8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 31, 2013

CNL Healthcare Properties, Inc.

(Exact name of registrant as specified in its charter)

Maryland	000-54685	27-2876363
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification no.)

450 South Orange Ave.

Orlando, Florida 32801

(Address of principal executive offices)

Registrant’s telephone number, including area code: (407) 650-1000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Please see the disclosure under Items 2.01 and 2.03 herein, which is incorporated by reference herein.

Item 2.01 Completion of Acquisition or Disposition of Assets

Perennial Communities

On May 31, 2013 (the “Closing Date”), we, through our operating partnership, CHP Partners, LP (the “Operating Partnership”) acquired a 100% fee simple interest in land and related improvements comprising six skilled nursing communities located in Arkansas (collectively, the “Perennial Communities”) from affiliates of Perennial Healthcare Management, LLC (collectively, the “Perennial Sellers”) pursuant to the terms and conditions of that certain Asset Purchase Agreement dated April 23, 2013 (the “Perennial Acquisition”). The Perennial Communities have an aggregate of 868 licensed beds and 780 usable beds. The aggregate purchase price for the Perennial Communities was approximately $56.4 million, excluding closing costs (the “Perennial Purchase Price”).

The following table lists each of the Perennial Communities, its location, number of usable beds, occupancy rates as of March 31, 2013, asset age, year renovated and square footage:

Perennial Communities	Location	Number of Usable Beds		Occupancy %	Asset Age	Year Renovated	Square Footage
Bates Healthcare Center	Batesville, AR		116	80%	38 years	2011		46,100
Broadway Healthcare Center	West Memphis, AR		119	92%	19 years	2012		46,600
Jonesboro Healthcare Center	Jonesboro, AR		136	91%	1 year	-		45,000
Magnolia Healthcare Center	Magnolia, AR		140	85%	4 years	-		43,000
Mine Creek Healthcare Center	Nashville, AR		78	76%	35 years	-		11,600
Searcy Healthcare Center	Searcy, AR		191	76%	40 years	2009 & 2011		59,000
Total:	-		780	83% (avg.)	22.7 years (avg.)	-		158,600

Effective as of the Closing Date of the Perennial Acquisition, each of the Perennial Communities is managed by Senior Living Centers, an affiliate of Capital Health Group, LLC. Also effective as of the Closing Date, each of the Perennial Communities is operated by a subsidiary of Arkansas SNF Operations Acquisition III, LLC, a Delaware limited liability company and an affiliate of Capital Health Group, LLC (collectively, the “New Perennial Operators”) under triple-net lease agreements having an initial term of ten years, with two five-year renewal options exercisable at the discretion of the New Perennial Operators. A security deposit is in place and available for use in the event of a default by the New Perennial Operators in the payment of rent or any other monetary obligation.

In the initial year, the aggregate minimum annual rent for the Perennial Communities is approximately $5.54 million, and the average effective annual rental per usable bed is approximately $7,100. Pursuant to the terms of the Perennial Communities leases, none of the New Perennial Operators, any of their subsidiaries, nor certain of its principals may compete within fifteen (15) miles of any of the Perennial Communities during the term of the applicable lease and for a period of five years after expiration of the applicable lease, unless we are first offered the right to acquire the competing facility.

The New Perennial Operators have an option to purchase the Perennial Communities that are located in Batesville, Mine Creek and Searcy, Arkansas, which is exercisable during the period from the end of the third year through the end of the fifth year following the Closing Date. The acquisition price for any of such facilities would be an amount that yields a 4% compounded annual return to us with respect to the adjusted lease basis at the time the option is exercised.

Until August 1, 2013, when the New Perennial Operators obtain required licensure, the existing operators of the Perennial Communities will continue to operate and manage their respective properties under subleases entered into pursuant to an Operations Transfer Agreement with the New Perennial Operators.

Senior Living Centers management has over 20 years of experience in healthcare real estate and senior living executive management, spanning all aspects of acquisitions, development, asset management and operations, and Senior Living Centers currently manages 17 skilled nursing facilities in Arkansas representing over 1,600 licensed beds.

We are not affiliated with the Perennial Sellers Senior Living Centers or the New Perennial Operators; however, this is our second project with affiliates of Capital Health Group, LLC the first of which is the portfolio of five senior housing communities located in Michigan and Maryland, known as the Capital Health Communities.

We paid our advisor, CNL Healthcare Corp., an aggregate investment services fee of $1.04 million in connection with the acquisition of the Perennial Communities, which is equal to 1.85% of the aggregate Perennial Purchase Price.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Perennial Communities Loan

On May 31, 2013, in connection with our acquisition of the Perennial Communities, subsidiaries of our Operating Partnership which own the Perennial Communities (the “Perennial Borrowers”) entered into a Secured Loan Agreement with KeyBank National Association and Synovus Bank (the “Perennial Lenders”) providing for a three-year term loan in the aggregate principal amount of $30.0 million (the “Perennial Loan”). The Perennial Loan matures on May 31, 2016 and may be prepaid by the Perennial Borrowers in whole or in part without penalty except for any breakage costs.

Interest on the outstanding principal balance of the Perennial Loan accrues at a rate equal to LIBOR plus 4.25%. In addition to each monthly interest payment, the Perennial Borrowers are required to make monthly principal payments commencing May 10, 2015 through the maturity date in an amount sufficient to amortize the loan on a 25-year schedule at a per annum rate of 6%.

The Perennial Loan is collateralized by first mortgages on all real property, improvements and personal property of the Perennial Communities, and assignments to the Perennial Lenders of all rents and leases collected or received with respect to the Perennial Communities by the Perennial Borrowers. The Perennial Borrowers are also required to establish deposit accounts at KeyBank for each Perennial Community to which all cash flow, including lease income, is deposited and available for payment of principal or interest on the Perennial Loan or payment of real estate taxes on the Perennial Communities.

The Company has guaranteed the Perennial Loan pursuant to a standard non-recourse carve-out guaranty. The Perennial Loan is subject to customary affirmative, negative and financial covenants for a loan of this type, including covenants related to minimum occupancy at the Perennial Communities, minimum debt service coverage and minimum rent coverage covenants.

The Perennial Borrowers paid the Perennial Lenders an origination fee of $375,000 in connection with the Perennial Loan or 1.25% of the aggregate Perennial Loan amount.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1	Secured Loan Agreement dated May 31, 2013, made by and among CHP Batesville Healthcare Owner, LLC, CHP Broadway Healthcare Owner, LLC, CHP Jonesboro Healthcare Owner, LLC, CHP Magnolia Healthcare Owner, LLC, CHP Mine Creek Healthcare Owner, LLC and CHP Searcy Healthcare Owner, as Borrowers, Keybank National Association, as Agent, and the lending institutions a party hereto from time to time (Filed herewith.)
10.2	Promissory Note ($15,000,000.00) dated May 31, 2013, of CHP Batesville Healthcare Owner, LLC, CHP Broadway Healthcare Owner, LLC, CHP Jonesboro Healthcare Owner, LLC, ChP Magnolia Healthcare Owner, LLC, CHP Mine Creek Healthcare Owner, LLC and CHP Searcy Healthcare Owner, LLC in favor of Synovus Bank (Filed herewith.)
10.3	Promissory Note ($15,000,000.00) dated May 31, 2013, of CHP Batesville Healthcare Owner, LLC, CHP Broadway Healthcare Owner, LLC, CHP Jonesboro Healthcare Owner, LLC, CHP Magnolia Healthcare Owner, LLC, CHP Mine Creek Healthcare Owner, LLC and CHP Searcy Healthcare Owner, LLC in favor of Keybank National Association (Filed herewith.)
10.4	Guaranty Agreement dated May 31, 2013, made by CNL Healthcare Properties, Inc., to and for the benefit of Keybank National Association (Filed herewith.)
10.5	Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes future advances) dated May 31, 2013, made by CHP Batesville Healthcare Owner, LLC, as Mortgagor, to Keybank National Association, as Agent, for the benefit of the Lenders, as Mortgagee (Filed herewith.)

10.6	Lease Agreement dated as of May 31, 2013, by and between CHP Batesville Healthcare Owner, LLC, as Landlord, and Batesville Health and Rehab, LLC, as Tenant (Filed herewith.)
10.7	Schedule of Omitted Documents (Filed herewith.)
99.1	Press Release dated June 6, 2013 (Filed herewith.)

Caution Concerning Forward-Looking Statements

The information above contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Some factors that might cause such a difference include, but are not limited to, the following: risks associated with our investment strategy; a worsening economic environment in the U.S. or globally, including financial market fluctuations; risks associated with real estate markets, including declining real estate values; availability of proceeds from our offering of our shares; our failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the use of debt to finance our business activities, including refinancing and interest rate risk and our failure to comply with debt covenants; our ability to identify and close on suitable investments; failure to successfully manage growth or integrate acquired properties and operations; risks related to development projects or acquired property value-add conversions, including construction delays and cost overruns; inability to obtain necessary permits and/or public opposition to these activities; our ability to make necessary improvements to properties on a timely or cost-efficient basis; competition for properties and/or tenants; defaults on or non-renewal of leases by tenants; failure to lease properties on favorable terms or at all; the impact of current and future environmental, zoning and other governmental regulations affecting our properties; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of our accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; material adverse actions or omissions by any joint venture partners, if applicable; increases in operating costs and other expenses; uninsured losses or losses in excess of our insurance coverage; the impact of outstanding and/or potential litigation; risks associated with our tax structuring; failure to qualify and maintain our REIT qualification; and our ability to protect our intellectual property and the value of our brand. Given these uncertainties, we caution you not to place undue reliance on such statements. For further information regarding risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q, and our registration statement on Form S-11 and the sticker supplements and amendments thereto, copies of which may be obtained from our Web site at http://www.cnlhealthcareproperties.com.

We undertake no obligation to publicly release the results of any revisions to these forward looking-statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

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 hereunto duly authorized.

Date: June 6, 2013		CNL HEALTHCARE PROPERTIES, INC. a Maryland Corporation
	By:	/s/ Joseph T. Johnson
		Joseph T. Johnson
		Chief Financial Officer, Senior Vice President and Treasurer

EX-10.1

Exhibit 10.1

SECURED LOAN AGREEMENT

for a loan in the aggregate amount of

$30,000,000.00

MADE BY AND AMONG

CHP BATESVILLE HEALTHCARE OWNER, LLC,

CHP BROADWAY HEALTHCARE OWNER, LLC,

CHP JONESBORO HEALTHCARE OWNER, LLC,

CHP MAGNOLIA HEALTHCARE OWNER, LLC,

CHP MINE CREEK HEALTHCARE OWNER, LLC,

and

CHP SEARCY HEALTHCARE OWNER, LLC,

as Borrowers,

KEYBANK NATIONAL ASSOCIATION,

as Agent,

and

The lending institutions a party hereto from time to time.

Dated as of May 31, 2013

TABLE OF CONTENTS

		Page
ARTICLE 1 INCORPORATION OF RECITALS AND EXHIBITS			2
1.1	Incorporation of Recitals		2
1.2	Incorporation of Schedule Exhibits		2
ARTICLE 2 DEFINITIONS			2
2.1	Defined Terms		2
2.2	Other Definitional Provisions		11
ARTICLE 3 BORROWERS’ REPRESENTATIONS AND WARRANTIES			11
3.1	Representations and Warranties		11
3.2	Survival of Representations and Warranties		17
ARTICLE 4 LOAN AND LOAN DOCUMENTS			17
4.1	Agreement to Borrow and Lend; Lenders’ Obligation to Disburse		17
4.2	Loan Documents		18
4.3	Term of the Loan		19
4.4	Prepayments		19
4.5	Required Principal Payments		19
4.6	Late Charge		20
ARTICLE 5 INTEREST			20
5.1	Interest Rate		20
5.2	Interest Rate Agreement
ARTICLE 6 COSTS OF MAINTAINING LOAN			21
6.1	Increased Costs and Capital Adequacy		21
6.2	Borrower Withholding		21
ARTICLE 7 LOAN EXPENSE AND ADVANCES			22
7.1	Loan and Administration Expenses		22
7.2	Lender’s Attorneys’ Fees and Disbursements		22
7.3	Time of Payment of Fees and Expenses		22
7.4	Expenses and Advances Secured by Loan Documents		22
7.5	Right of Lender to Make Advances to Cure Borrowers’ Defaults		23
ARTICLE 8 REQUIREMENTS PRECEDENT TO THE OPENING OF THE LOAN AND ANY SUBSEQUENT DISBURSEMENT			23
8.1	Conditions Precedent to Closing and Opening of the Loan		23
ARTICLE 9 RESERVED			25
ARTICLE 10 BORROWERS’ AGREEMENTS			25
10.1	Borrowers further covenant and agree as follows:		25

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Table of Contents

(continued)

		Page
ARTICLE 11 CASUALTIES AND CONDEMNATION			31
11.1	Agent’s Election to Apply Proceeds on Indebtedness		31
11.2	Borrowers’ Obligation to Rebuild and Use of Proceeds Therefor		31
ARTICLE 12 ASSIGNMENTS BY BORROWERS			32
12.1	Prohibition of Assignments and Transfers by Borrowers		32
12.2	Prohibition of Transfers in Violation of ERISA		33
12.3	Successors and Assigns		33
ARTICLE 13 TIME OF THE ESSENCE			33
13.1	Time is of the Essence		33
ARTICLE 14 EVENTS OF DEFAULT			33
14.1	Events of Default		33
ARTICLE 15 LENDERS’ REMEDIES IN EVENT OF DEFAULT			35
15.1	Remedies Conferred Upon Lenders		35
ARTICLE 16 GENERAL PROVISIONS			36
16.1	Captions		36
16.2	Modification; Waiver		36
16.3	GOVERNING LAW		36
16.4	Acquiescence Not to Constitute Waiver of Lenders’ Requirements		36
16.5	Disclaimer by Lenders		36
16.6	Partial Invalidity; Severability		36
16.7	Definitions Include Amendments		36
16.8	Execution in Counterparts		37
16.9	Entire Agreement		37
16.10	Waiver of Damages		37
16.11	Claims Against Lenders		37
16.12	Jurisdiction		37
16.13	Set-Offs		38
16.14	Authorized Representative		38
ARTICLE 17 NOTICES			38
ARTICLE 18			39
ARTICLE 19 ASSIGNMENTS AND PARTICIPATIONS			39
19.1	Assignments and Participations		39
19.2	Several Liability		42
ARTICLE 20 AGENT			42
20.1	Appointment		42

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Table of Contents

(continued)

		Page
20.2	Reliance on Agent		42
20.3	Powers		42
20.4	Disbursements		43
20.5	Distribution and Apportionment of Payments		43
20.6	Consents and Approvals		44
20.7	Agency Provisions Relating to Collateral		46
20.8	Lender Actions Against Borrower or the Collateral		47
20.9	Assignment and Participation		47
20.10	Ratable Sharing		47
20.11	General Immunity		47
20.12	No Responsibility for Loan, Recitals, etc.		47
20.13	Action on Instructions of Lenders		48
20.14	Employment of Agents and Counsel		48
20.15	Reliance on Documents; Counsel		48
20.16	Agent’s Reimbursement and Indemnification		48
20.17	Rights as a Lender		48
20.18	Lenders’ Credit Decisions		49
20.19	Notice of Events of Default		49
20.20	Successor Agent		49
ARTICLE 21 WAIVER OF JURY TRIAL			49

-iii-

LIST OF EXHIBITS TO LOAN AGREEMENT

Exhibit A-1	Legal Description of Batesville Land
Exhibit A-2	Legal Description of Broadway Land
Exhibit A-3	Legal Description of Jonesboro Land
Exhibit A-4	Legal Description of Magnolia Land
Exhibit A-5	Legal Description of Mine Creek Land
Exhibit A-6	Legal Description of Searcy Land
Exhibit B-1	Batesville Permitted Exceptions
Exhibit B-2	Broadway Permitted Exceptions
Exhibit B-3	Jonesboro Permitted Exceptions
Exhibit B-4	Magnolia Permitted Exceptions
Exhibit B-5	Mine Creek Permitted Exceptions
Exhibit B-6	Searcy Permitted Exceptions
Exhibit C	Title Requirements
Exhibit D	Survey Requirements
Exhibit E	Insurance Requirements
Exhibit F	Reserved
Exhibit G	Form of Covenant Compliance Certificate
Exhibit H	Form of Assignment and Assumption Agreement
Schedule I	Environmental Documents
Schedule II	Minimum Quarterly Rent Coverage Requirements
Schedule III	Immediate Repairs

-iv-

SECURED LOAN AGREEMENT

THIS SECURED LOAN AGREEMENT (“Agreement”) is made as of May 31, 2013, by and among Borrowers, KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors and/or assigns, as administrative agent (referred to in such capacity as “Agent” in this Agreement), and the lending institutions a party hereto from time to time (Agent, as a lender, and each such other lending institution, and their respective successors and assigns, referred to individually a “Lender” and collectively, as the “Lenders”).

RECITALS

A. Batesville Borrower intends to acquire fee simple title to a tract of land in the City of Batesville, State of Arkansas, which land is legally described in Exhibit A-1 (the “Batesville Land”). In addition, Batesville Borrower proposes to acquire a 150-bed health care facility (the “Batesville Improvements”) located on the Batesville Land commonly known as “Batesville Health Care Center” (the Batesville Land and the Batesville Improvements collectively referred to herein as the “Batesville Project”).

B. Broadway Borrower intends to acquire fee simple title to a tract of land in the City of West Memphis, State of Arkansas, which land is legally described in Exhibit A-2 (the “Broadway Land”). In addition, Broadway Borrower proposes to acquire a 119-bed health care facility (the “Broadway Improvements”) located on the Broadway Land commonly known as “Broadway Health Care Center” (the Broadway Land and the Broadway Improvements collectively referred to herein as the “Broadway Project”).

C. Jonesboro Borrower intends to acquire fee simple title to a tract of land in the City of Jonesboro, State of Arkansas, which land is legally described in Exhibit A-3 (the “Jonesboro Land”). In addition, Jonesboro Borrower proposes to acquire a 136-bed health care facility (the “Jonesboro Improvements”) located on the Jonesboro Land commonly known as “Jonesboro Health Care Center” (the Jonesboro Land and the Jonesboro Improvements collectively referred to herein as the “Jonesboro Project”).

D. Magnolia Borrower intends to acquire fee simple title to a tract of land in the City of Magnolia, State of Arkansas, which land is legally described in Exhibit A-4 (the “Magnolia Land”). In addition, Magnolia Borrower proposes to acquire a 140-bed health care facility (the “Magnolia Improvements”) located on the Magnolia Land commonly known as “Magnolia Health Care Center” (the Magnolia Land and the Magnolia Improvements collectively referred to herein as the “Magnolia Project”).

E. Mine Creek Borrower intends to acquire fee simple title to a tract of land in the City of Nashville, State of Arkansas, which land is legally described in Exhibit A-5 (the “Mine Creek Land”). In addition, Mine Creek Borrower proposes to acquire a 78-bed health care facility (the “Mine Creek Improvements”) located on the Mine Creek Land commonly known as “Mine Creek Health Care Center” (the Mine Creek Land and the Mine Creek Improvements collectively referred to herein as the “Mine Creek Project”).

F. Searcy Borrower intends to acquire fee simple title to a tract of land in the City of Searcy, State of Arkansas, which land is legally described in Exhibit A-6 (the “Searcy Land”). In addition, Searcy Borrower proposes to acquire a 245-bed health care facility (the “Searcy Improvements”) located on the Searcy Land commonly known as “Searcy Health Care Center” (the Searcy Land and the Searcy Improvements collectively referred to herein as the “Searcy Project”).

G. Borrowers have requested and applied to the Lenders for a loan in the amount of up to THIRTY MILLION AND NO/100 DOLLARS ($30,000,000.00) (the “Loan”) to reimburse Borrowers for a portion of the costs for the acquisition of the Projects and the closing costs and expenses of Borrowers in connection with the acquisition of the Projects and the closing of the Loan, and the Lenders are willing to make the Loan on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

SECURED LOAN AGREEMENT Page 1

ARTICLE 1

INCORPORATION OF RECITALS AND EXHIBITS

1.1 Incorporation of Recitals.

The foregoing preambles and all other recitals set forth herein are made a part hereof by this reference.

1.2 Incorporation of Schedule Exhibits.

Schedules I through III and Exhibits A through H, inclusive, attached hereto are incorporated herein and expressly made a part hereof by this reference.

ARTICLE 2

DEFINITIONS

2.1 Defined Terms.

The following terms as used herein shall have the following meanings:

Adjusted Base Rate: An interest rate per annum equal to the sum of (a) the Base Rate, plus (b) the Applicable Margin. Any change in the Adjusted Base Rate shall be effective immediately from and after a change in the Adjusted Base Rate (or the Federal Funds Effective Rate, as applicable).

Adjusted LIBOR Rate: For any LIBOR Rate Interest Period, an interest rate per annum equal to the sum of (i) the rate obtained by dividing (1) the LIBOR Rate for such LIBOR Rate Interest Period by (2) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate Interest Period, and (ii) the Applicable Margin.

Affiliate: With respect to a specified person or entity, any individual, partnership, corporation, limited liability company, trust, unincorporated organization, association or other entity which, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such person or entity, including, without limitation, any general or limited partnership in which such person or entity is a partner.

Agreement: This Secured Loan Agreement.

Applicable Margin: Four and one-quarter percent (4.25%).

Applicable Rate: As such term is defined in Section 5.1(a).

Appraisal: A MAI certified appraisal of the Projects performed in accordance with FIRREA and Agent’s appraisal requirements by an appraiser selected and retained by Agent.

Assignments of Rents: One or more assignments of leases and rents made by the Borrowers in favor of Agent for the benefit of the Lenders assigning all of Borrowers’ respective interest in and to its Operating Lease, all Leases, subleases and other agreements relating to the use and occupancy of all or any portion of the Projects, and all present and future Leases, rents, issues and profits therefrom, as the same may be hereafter amended, restated, supplemented or otherwise modified pursuant to the terms thereof.

Authorized Representative: As such term is defined in Section 16.14.

Available Beds: 780. For purposes of the calculations set forth herein, this number shall not be changed without Agent’s prior written consent.

Bankruptcy Code: As such term is defined in Section 14.1(d).

SECURED LOAN AGREEMENT Page 2

Base Rate: For any day, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the greatest of:

(i) the rate of interest established by Agent, from time to time, as its “prime rate,” whether or not publicly announced, which interest rate may or may not be the lowest rate charged by it for commercial loans or other extensions of credit;

(ii) the Federal Funds Effective Rate in effect from time to time, determined one Business Day in arrears, plus 1/2 of 1% per annum; and

(iii) the Daily LIBOR Rate.

Batesville Borrower: CHP Batesville Healthcare Owner, LLC, a Delaware limited liability company.

Batesville Mortgage: As such term is defined in Section 4.2(b).

Batesville Operating Lease: That certain Lease Agreement of even date herewith between Batesville Borrower and Batesville Operator.

Batesville Operator: Batesville Health and Rehab, LLC, an Arkansas limited liability company.

Batesville Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-1 hereto to which title to the Batesville Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Batesville Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Leases or residency agreements; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

Borrowers: Batesville Borrower, Broadway Borrower, Jonesboro Borrower, Magnolia Borrower, Mine Creek Borrower, and Searcy Borrower, jointly and severally, as applicable.

Breakage Costs: Collectively, (a) the cost to Lenders of re-employing funds bearing interest at an Adjusted LIBOR Rate, incurred (or expected to be incurred) in connection with (i) any payment of any portion of a Loan bearing interest at an Adjusted LIBOR Rate prior to the termination of any applicable LIBOR Rate Interest Period, or (ii) the conversion of an Adjusted LIBOR Rate to any other applicable interest rate on a date other than the last day of the relevant interest period, and (b) any amounts payable by a Borrower under any Interest Rate Agreement in connection with termination of such Agreement.

Broadway Borrower: CHP Broadway Healthcare Owner, LLC, a Delaware limited liability company.

Broadway Operating Lease: That certain Lease Agreement of even date herewith between Broadway Borrower and Broadway Operator.

Broadway Operator: Broadway Health and Rehab, LLC, an Arkansas limited liability company.

Broadway Mortgage: As such term is defined in Section 4.2(c).

Broadway Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-2 hereto to which title to the Broadway Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Broadway Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet

SECURED LOAN AGREEMENT Page 3

delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Leases or residency agreements; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

Business Day: A day of the year on which banks are not required or authorized to close in Brooklyn, Ohio.

Buyback Project(s): Shall refer, individually, or collectively, as applicable, to the Batesville Project, the Mine Creek Project and the Searcy Project.

Change of Control: Shall mean an event or series of events by which:

(i) Guarantor fails to own 100% of the indirect ownership of Borrowers;

(ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all equity interests that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 30% or more of the equity interests of Guarantor entitled to vote for members of the board of directors or equivalent governing body of Guarantor on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); provided that, notwithstanding the above, unexercised warrants with respect to equity interests of Guarantor shall not be deemed to be ownership of equity interests of Guarantor unless and until such warrants are exercised; or

(iii) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Guarantor cease to be composed of individuals (a) who were members of that board or equivalent governing body on the first day of such period, (b) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (a) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (c) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (a) and (b) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (b) and clause (c), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors);

(iv) after giving effect to the applicable event or events, (a) the total equity, direct or indirect, in any Borrower or Guarantor held by a particular person exceeds twenty-four percent (24%) of the total equity, direct or indirect, in Guarantor or such Borrower, as the case may be, and (b) such person did not hold in excess of twenty-four percent (24%) of the total equity, direct or indirect, in Guarantor or any Borrower as of the date hereof; or

(v) CNL and its affiliates no longer serve as manager, advisor, or sponsor of the Borrowers or Guarantor.

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CHP Holding: CHP Senior Living Net Lease Holding, LLC, a Delaware limited liability company.

CNL: CNL Financial Group, Inc., a Delaware corporation.

Commitment: The maximum amount each Lender has agreed to lend to Borrowers as part of the Loan (which amounts are set forth below the signature line of each Lender), subject to modification by each Assignment and Assumption.

Control: As such term is used with respect to any person or entity, including the correlative meanings of the terms “controlled by” and “under common control with”, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise.

Daily LIBOR Rate: The rate of interest calculated by Agent on a daily basis equal to the one month rate of interest (rounded upward to the next highest 1/16th of 1%) of the one month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London time) on the second preceding LIBOR Business Day; as determined and adjusted from time to time in Agent’s sole discretion.

Debt Service Coverage: The ratio of (a) the Lease Income for the applicable period, to (b) the Pro Forma Debt Service.

Default or default: Any event, circumstance or condition which, if it were to continue uncured, would, with notice or lapse of time or both, constitute an Event of Default hereunder.

Default Rate: A rate per annum equal to 5% (500 basis points) over the Adjusted Base Rate.

Eligible Assignee: (i) Any Lender; (ii) any commercial bank, savings bank, savings and loan association or similar financial institution which (a) has total assets of Five Billion Dollars ($5,000,000,000) or more, (b) is “well capitalized” within the meaning of such term under the regulations promulgated under the auspices of the Federal Deposit Insurance Corporation Improvement Act of 1991, (c) in the sole judgment of the Agent, is engaged in the business of lending money and extending credit, and buying loans or participations in loans under credit facilities substantially similar to those extended under this Agreement, and (d) in the sole judgment of the Agent, is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank; (iii) any insurance company in the business of writing insurance which (a) has total assets of Five Billion Dollars ($5,000,000,000) or more (b) is “best capitalized” within the meaning of such term under the applicable regulations of the National Association of Insurance Commissioners, and (c) meets the requirements set forth in subclauses (c) and (d) of clause (ii) above; and (iv) any other financial institution having total assets of Five Billion Dollars ($5,000,000,000) (including a mutual fund or other fund under management of any investment manager having under its management total assets of Five Billion Dollars ($5,000,000,000) or more) which meets the requirement set forth in subclauses (c) and (d) of clause (ii) above; provided that each Eligible Assignee must (w) be organized under the Laws of the United States of America, any state thereof or the District of Columbia, or, if a commercial bank, be organized under the Laws of the United States of America, any state thereof or the District of Columbia, the Cayman Islands or any country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, (x) act under the Loan Documents through a branch, agency or funding office located in the United States of America, (y) be exempt from withholding of tax on interest and deliver the documents related thereto pursuant to the Internal Revenue Code as in effect from time to time and (z) not be a Borrower or an Affiliate of a Borrower.

Environmental Documents: Collectively, the documents listed on Schedule I attached hereto.

Environmental Proceedings: As such term is defined in Section 3.1(g).

Environmental Report: As such term is defined in Section 8.1(o).

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ERISA: The Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder from time to time.

Event of Default: As such term is defined in Article 14.

Federal Funds Effective Rate: Shall mean, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate.”

Final Maturity Date: The date on which the Note matures, whether by acceleration, lapse of time or otherwise; provided, that such date shall be the Original Maturity Date, unless earlier accelerated as permitted herein or in any other Loan Document.

FIRREA: The Financial Institutions Reform, Recovery And Enforcement Act of 1989, as amended from time to time.

GAAP: Generally Accepted Accounting Principles.

Governmental Approvals: As such term is defined in Section 3.1(n).

Governmental Authority: Any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

Gross Revenues: For any period, all revenues of Operator determined on a GAAP basis derived from the operation, use, leasing and occupancy of the Projects during such period; provided, however, that in no event shall Gross Revenues include (i) any loan proceeds, (ii) proceeds or payments under insurance policies (except proceeds of business interruption insurance); (iii) condemnation proceeds; (iv) any security deposits received from tenants in the Projects, unless and until the same are applied to rent or other obligations in accordance with the tenant’s lease; or (v) any other extraordinary items, in Agent’s reasonable discretion.

Guarantor: CNL Healthcare Properties, Inc., a Maryland corporation.

Guaranty: As such term is defined in Section 4.2(h).

Hazardous Material: Means and includes gasoline, petroleum, asbestos containing materials, explosives, radioactive materials or any hazardous or toxic material, substance or waste which is defined by those or similar terms or is regulated as such under any Law of any Governmental Authority having jurisdiction over the Project or any portion thereof or its use, including: (i) any “hazardous substance” defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; and (vii) any other toxic substance or contaminant that is subject to any other Law or other past or present requirement of any Governmental Authority, as any such acts and laws may be amended, modified or supplemented from time to time.

Immediate Repairs: Shall mean those repairs to the Broadway Project and the Mine Creek Project as detailed in the property condition reports delivered to Agent and as set forth on Schedule III attached hereto in connection with the closing of the Loan in an aggregate amount of approximately $109,300.00.

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Improvements: The collective reference to the Batesville Improvements, the Broadway Improvements, the Jonesboro Improvements, the Magnolia Improvements, the Mine Creek Improvements, and the Searcy Improvements.

Including or including: Including but not limited to.

Indemnity: As such term is defined in Section 4.2(i).

Jonesboro Borrower: CHP Jonesboro Healthcare Owner, LLC, a Delaware limited liability company.

Jonesboro Operating Lease: That certain Lease Agreement of even date herewith between Jonesboro Borrower and Jonesboro Operator.

Jonesboro Operator: Jonesboro Health and Rehab, LLC, an Arkansas limited liability company.

Jonesboro Mortgage: As such term is defined in Section 4.2(d).

Jonesboro Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-3 hereto to which title to the Jonesboro Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Jonesboro Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Leases or residency agreements; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

Land: The collective reference to the Batesville Land, the Broadway Land, the Jonesboro Land, the Magnolia Land, the Mine Creek Land, and the Searcy Land.

Late Charge: As such term is defined in Section 4.6.

Laws: Collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential authority in the applicable jurisdiction.

Lease Income: Shall mean all rentals or other income paid to Borrowers under the Operating Leases between any Borrower and any Operator in connection with the Projects for any applicable period, but specifically excluding any reserves, escrows, security deposits or other deposits, taxes, or reimbursements for amounts paid by Borrowers on Operator’s behalf.

Leases: The collective reference to all Operating Leases and all other leases, subleases and occupancy agreements affecting a Project or any part thereof now existing or hereafter executed and all amendments, modifications or supplements thereto.

LIBOR Adjustment Date: The tenth (10th) day of each calendar month.

LIBOR Business Day: A Business Day on which dealings in U.S. dollars are carried on in the London Interbank Market.

LIBOR Rate: For any LIBOR Rate Interest Period, the average rate (rounded upwards to the nearest 1/16th) as shown by Reuters at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR Business Days prior to the first day of such LIBOR Rate Interest Period with a maturity approximately equal to such LIBOR Rate Interest Period and in an amount approximately equal to the amount to which such LIBOR Rate Interest Period relates, adjusted for reserves and taxes if required by future regulations. If Reuters no longer reports such rate or Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to Lenders in the London Interbank Market, Agent may select a replacement index.

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LIBOR Rate Interest Period: With respect to each amount bearing interest at a LIBOR based rate, a period of one month, to the extent deposits with such maturity is available to the Lenders, commencing on a LIBOR Business Day provided, however, that each LIBOR Rate Interest Period shall end on the last LIBOR Adjustment Date occurring prior to the scheduled end of such LIBOR Rate Interest Period.

Loan: As such term is defined in Recital F on page 1 of this Agreement.

Loan Amount: The maximum amount of the Loan as set forth in Section 4.1(a) as reduced by principal payments, if any, made from time to time.

Loan Documents: The collective reference to this Agreement, the documents and instruments listed in Section 4.2, and all the other documents and instruments entered into from time to time, evidencing or securing the Loans or any obligation of payment thereof or performance of Borrowers’ obligations in connection with the transaction contemplated hereunder and any Interest Rate Agreements, each as amended from time to time.

Loan Opening Date: The date of this Agreement.

Magnolia Borrower: CHP Magnolia Healthcare Owner, LLC, a Delaware limited liability company.

Magnolia Operator: Magnolia Health and Rehab, LLC, an Arkansas limited liability company.

Magnolia Operating Lease: That certain Lease Agreement of even date herewith between Magnolia Borrower and Magnolia Operator.

Magnolia Mortgage: As such term is defined in Section 4.2(e).

Magnolia Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-4 hereto to which title to the Magnolia Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Jonesboro Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Leases or residency agreements; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

Material Adverse Change or material adverse change: The business prospects, operations or financial condition of a person, entity or property has changed in a manner which could impair the value of Lenders’ security for the Loan, prevent timely repayment of the Loan or otherwise prevent the applicable person or entity from timely performing any of its material obligations under the Loan Documents.

Medicaid: That certain program of medical assistance, funded jointly by the federal government and the States, for impoverished individuals who are aged, blind and/or disabled, and/or members of families with dependent children, which program is more fully described in Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.) and the regulations promulgated thereunder.

Medicare: That certain federal program providing health insurance for eligible elderly and other individuals, under which physicians, hospitals, skilled nursing homes, home health care and other providers are reimbursed for certain covered services they provide to the beneficiaries of such program, which program is more fully described in Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.) and the regulations promulgated thereunder.

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Mine Creek Borrower: CHP Mine Creek Healthcare Owner, LLC, a Delaware limited liability company.

Mine Creek Operator: Mine Creek Health and Rehab, LLC, an Arkansas limited liability company.

Mine Creek Operating Lease: That certain Lease Agreement of even date herewith between Mine Creek Borrower and Mine Creek Operator.

Mine Creek Mortgage: As such term is defined in Section 4.2(f).

Mine Creek Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-5 hereto to which title to the Mine Creek Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Mine Creek Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Leases or residency agreements; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

Monthly Excess Cash Flow: The amount by which the monthly Lease Income from the Projects exceeds all amounts due and payable under the Loan Documents for such month.

Mortgages: The collective reference to the Batesville Mortgage, the Broadway Mortgage, the Jonesboro Mortgage, the Magnolia Mortgage, the Mine Creek Mortgage, and the Searcy Mortgage.

Net Operating Income or NOI: The difference between (i) the Gross Revenues for the applicable period, less (ii) the Operating Expenses for such period.

Notes: As such term is defined in Section 4.2(a).

Number of Available Bed Days: Shall mean the product of the Available Beds multiplied by the number of days in the applicable calculation period.

Number of Resident Days: Shall mean the number of days Available Beds were occupied during the applicable calculation period.

Occupancy: Shall mean the ratio of average Number of Resident Days to average Number of Available Bed Days.

Opening of the Loan or Loan Opening: The first disbursement of Loan proceeds.

Operating Expenses: For any period, the actual costs and expenses of owning, operating, managing and maintaining the Projects during such period incurred by Operator, determined on a GAAP basis, including, (i) the greater of (a) a $500 per Available Bed annual replacement reserve, and (b) the actual capital expenditures for the Projects during such period, and (ii) a management fee in an amount equal to five percent (5%), excepting, however, (w) interest expense, (x) taxes, (y) depreciation and amortization, and (z) Rent Expense for such period.

Operating Leases: Collectively, the Batesville Operating Lease, the Broadway Operating Lease, the Jonesboro Operating Lease, the Magnolia Operating Lease, the Mine Creek Operating Lease, and the Searcy Operating Lease.

Operating Statement: As such term is defined in Section 10.1(m).

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Operator(s): Shall mean, individually, or collectively, as applicable, the Batesville Operator, the Broadway Operator, the Jonesboro Operator, the Magnolia Operator, the Mine Creek Operator and/or the Searcy Operator.

Original Maturity Date: May 31, 2016.

Permitted Exceptions: The collective reference to the Batesville Permitted Exceptions, the Broadway Permitted Exceptions, the Jonesboro Permitted Exceptions, the Magnolia Permitted Exceptions, the Mine Creek Permitted Exceptions, and the Searcy Permitted Exceptions.

Pro Forma Debt Service: The total annual installments of principal and interest that would be required for the Loan calculated based upon a twenty-five (25) year amortization schedule and a per annum interest rate equal to the greater of (i) Applicable Rate, (ii) six percent (6.00%), and (iii) the yield per annum as of the date of such calculation on U.S. Treasury securities selected in good faith by Lender, maturing approximately seven (7) years after the date of calculation, plus two and one-half percent (2.50%).

Project(s): Shall mean, individually or collectively as applicable, any of the Batesville Project, the Broadway Project, the Jonesboro Project, the Magnolia Project, the Mine Creek Project, and/or the Searcy Project.

Project Operating Account(s): As such term is defined in Section 4.1(d).

Reimbursement Contracts: means all third-party reimbursement contracts relating to any Project which are now or hereafter in effect with respect to residents or patients qualifying for coverage under the same, including Medicare and Medicaid, Managed Care Plans and private insurance agreements, and any successor program or other similar reimbursement program and/or private insurance agreements, now or hereafter existing.

Release Price: For any Buyback Project, an amount equal to sixty percent (60%) of the “fee simple” value of the applicable Buyback Project as shown in the Appraisal delivered to Agent in connection with the closing of the Loan.

Rent Coverage: With respect to any applicable period ending on the applicable date of determination, the ratio of (a) the Net Operating Income for such period, to (b) the Rent Expense.

Rent Expense: With respect to any applicable period ending on the applicable date of determination, the total rent paid by Operators to Borrowers under the Leases during such period.

Required Lenders: Those Lenders holding at least sixty-six and 67/100th percent (66.67%) of the total outstanding principal balance of the Loans.

Reserve Percentage: For any LIBOR Rate Interest Period, that percentage which is specified three (3) Business Days before the first day of such LIBOR Rate Interest Period by the Board of Governors of the Federal Reserve System (or any successor) or any other governmental or quasi-governmental authority with jurisdiction over the Lenders for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for the Lenders with respect to liabilities constituting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such LIBOR Rate Interest Period and with a maturity equal to such LIBOR Rate Interest Period.

Searcy Borrower: CHP Searcy Healthcare Owner, LLC, a Delaware limited liability company.

Searcy Operator: Searcy Health and Rehab, LLC, an Arkansas limited liability company.

Searcy Operating Lease: That certain Lease Agreement of even date herewith between Searcy Borrower and Searcy Operator.

Searcy Mortgage: As such term is defined in Section 4.2(g).

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Searcy Permitted Exceptions: Shall mean (i) as of the date hereof, those matters listed on Exhibit B-5 hereto to which title to the Searcy Project may be subject at the Loan Opening, and (ii) at all times thereafter, (a) along with the liens and security interests created by the Searcy Mortgage or other Loan Documents. statutory liens for ad valorem taxes, standby fees and other governmental charges which are not yet delinquent at the time in question or are being contested in accordance with the requirements of the Loan Documents; (b) rights of tenants under Approved Leases; (c) other liens and security interests (if any) in favor of Agent for the benefit of the Lenders or otherwise approved by Agent; (d) mechanics’ liens being contested in accordance with the requirements of the Loan Documents, and (e) such other title exceptions as Agent may reasonably approve in writing.

State: The State of Ohio.

Synovus: Synovus Bank, a Georgia banking corporation.

Tenant Deposit Account: As such term is defined in Section 4.1(e).

Title Insurer: Fidelity National Title Insurance Company, or such other title insurance company licensed in the State as may be approved in writing by Agent.

Title Policies: As such term is defined in Section 8.1(a).

Transfer: As such term is defined in Section 12.1.

2.2 Other Definitional Provisions.

All terms defined in this Agreement shall have the same meanings when used in the Note, Mortgages, any other Loan Documents, or any certificate or other document made or delivered pursuant hereto. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement.

ARTICLE 3

BORROWERS’ REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties.

To induce each of the Lenders to execute this Agreement and perform its respective obligations hereunder, Borrowers hereby represent and warrant to the Lenders as follows:

(a) Batesville Borrower has good and marketable fee simple title in the Batesville Project, subject only to the Batesville Permitted Exceptions.

(b) Broadway Borrower has good and marketable fee simple title in the Broadway Project, subject only to the Broadway Permitted Exceptions.

(c) Jonesboro Borrower has good and marketable fee simple title in the Jonesboro Project, subject only to the Jonesboro Permitted Exceptions.

(d) Magnolia Borrower has good and marketable fee simple title in the Magnolia Project, subject only to the Magnolia Permitted Exceptions.

(e) Mine Creek Borrower has good and marketable fee simple title in the Mine Creek Project, subject only to the Mine Creek Permitted Exceptions.

(f) Searcy Borrower has good and marketable fee simple title in the Searcy Project, subject only to the Searcy Permitted Exceptions.

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(g) No litigation or proceedings are pending, or to the best of Borrowers’ knowledge threatened, against any Borrower or Guarantor, which could, if adversely determined, cause a Material Adverse Change with respect to any Borrower, Guarantor or any Project. To the best of Borrowers’ knowledge, there are no pending environmental proceedings, whether civil (including actions by private parties), criminal, or administrative proceedings, relating to any Project (collectively, “Environmental Proceedings”), and Borrowers have no knowledge of any threatened Environmental Proceedings or any facts or circumstances which may give rise to any future Environmental Proceedings.

(h) Each Borrower is a duly organized and validly existing Delaware limited liability company and has full power and authority to execute, deliver and perform all Loan Documents to which such Borrower is a party, and such execution, delivery and performance have been duly authorized by all requisite action on the part of such Borrower.

(i) Guarantor is a duly organized and validly existing Maryland corporation and has full power and authority to execute, deliver and perform all Loan Documents to which such person is a party, and such execution, delivery and performance have been duly authorized by all requisite action on the part of such person.

(j) No consent, approval or authorization of or declaration, registration or filing with any Governmental Authority or nongovernmental person or entity, including any creditor, partner or member of any Borrower or Guarantor, is required in connection with the execution, delivery and performance of this Agreement or any of the Loan Documents other than the recordation of the Mortgages, the Assignments of Rents and UCC-1 Financing Statements, except for such consents, approvals or authorizations of or declarations or filings with any Governmental Authority or non-governmental person or entity where the failure to so obtain would not have an adverse effect on any Borrower or Guarantor or which have been obtained as of any date on which this representation is made or remade.

(k) The execution, delivery and performance of this Agreement, the execution and payment of the Notes and the granting of the Mortgages and other security interests under the other Loan Documents have not constituted and will not constitute, upon the giving of notice or lapse of time or both, a breach or default under any other agreement to which any Borrower or Guarantor is a party or may be bound or affected, or a violation of any law or court order which may affect any Project, any part thereof, any interest therein, or the use thereof.

(l) There is no default under this Agreement or the other Loan Documents, nor any condition which, after notice or the passage of time or both, would constitute a default or an Event of Default under said documents.

(m) (i) No condemnation of any portion of any Project, (ii) no condemnation or relocation of any roadways abutting any Project, and (iii) no proceeding to deny access to any Project from any point or planned point of access to such Project, has commenced or, to the best of Borrowers’ knowledge, is contemplated by any Governmental Authority.

(n) To the best of Borrowers’ knowledge, the use of each Project does not violate (i) any Laws (including subdivision, zoning, building, environmental protection and wetland protection Laws), or (ii) any building permits, restrictions of record, or agreements affecting such Project or any part thereof. To the best knowledge of Borrowers, no Project violates (i) any Laws (including subdivision, zoning, building, environmental protection and wetland protection Laws), or (ii) any building permits, restrictions of record, or agreements affecting such Project or any part thereof. To the best of Borrowers’ knowledge, neither the zoning authorizations, approvals or variances nor any other right to own or to use any Project is to any extent dependent upon or related to any real estate other than the Land applicable to such Project. All consents, licenses and permits and all other authorizations or approvals (collectively, “Governmental Approvals”) required for the ownership and use of each Project have been obtained and remain in full force and effect.

(o) To the best of Borrowers’ knowledge, each Project has adequate water, gas and electrical supply, storm and sanitary sewerage facilities, other required public utilities, fire and police protection, and means of access between such Project and public highways; to the best of Borrowers’ knowledge, none of the foregoing will be foreseeably delayed or impeded by virtue of any requirements under any applicable Laws.

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(p) No brokerage fees or commissions are payable by or to any person in connection with this Agreement or the Loan to be disbursed hereunder.

(q) All financial statements and other information previously furnished by any Borrower or Guarantor to Lender in connection with the Loan are true, complete and correct and fairly present the financial conditions of the subjects thereof as of the respective dates thereof and do not fail to state any material fact necessary to make such statements or information not misleading, and no Material Adverse Change with respect to any Borrower or Guarantor has occurred since the respective dates of such statements and information. None of any Borrower, nor Guarantor has any material liability, contingent or otherwise, not disclosed in such financial statements.

(r) As of the date hereof and except as disclosed in the Environmental Report, (i) each Project is in a clean, safe and healthful condition, and, except for materials used in the ordinary course of construction, maintenance and operation of such Project, is free of all Hazardous Material and is in compliance with all applicable Laws; (ii) none of the Borrowers nor, to the best knowledge of Borrowers, any other person or entity, has ever caused or permitted any Hazardous Material to be placed, held, located or disposed of on, under, at or in a manner to affect any Project in violation of any applicable Laws, or any part thereof, and no Project has ever been used (whether by any Borrower or, to the best knowledge of Borrowers, by any other person or entity) for any activities involving, directly or indirectly, the use, generation, treatment, storage, transportation, or disposal of any Hazardous Material in violation of any applicable Laws; (iii) no Project, nor any Borrower is subject to any existing, pending, or, to the best of Borrowers’ knowledge, threatened investigation or inquiry by any Governmental Authority, and no Project is subject to any remedial obligations under any applicable Laws pertaining to health or the environment; and (iv) to the best of Borrowers’ knowledge, there are no underground tanks, vessels, or similar facilities for the storage, containment or accumulation of Hazardous Materials of any sort on, under or affecting any Project.

(s) Each Project is taxed separately without regard to any other property and for all purposes the Project may be mortgaged, conveyed and otherwise dealt with as an independent parcel.

(t) None of the Borrowers nor their respective agents have entered into any Leases, subleases or other arrangements for occupancy of space within each Project other than the Operating Leases.

(u) Except as set forth on the applicable survey delivered to Agent for each Project, no portion of the Improvements encroaches upon any property line, building line, setback line, side yard line or any recorded or visible easement (or other easement of which any Borrower is aware or has reason to believe may exist) with respect to such Project.

(v) The Loan is not being made for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation T, U or X issued by the Board of Governors of the Federal Reserve System, and each Borrower agrees to execute all instruments necessary to comply with all the requirements of Regulation U of the Federal Reserve System.

(w) No Borrower is a party in interest to any plan defined or regulated under ERISA, and none of the assets of the Borrowers are “plan assets” of any employee benefit plan covered by ERISA or Section 4975 of the Internal Revenue Code.

(x) No Borrower is a “foreign person” within the meaning of Section 1445 or 7701 of the Internal Revenue Code.

(y) No Borrower uses any trade name other than its actual name set forth herein. The principal place of business of Borrower is as stated in Article 17.

(z) Each Borrower’s place of organization is the State of Delaware.

(aa) All statements set forth in the Recitals are true and correct.

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(bb) No Borrower, nor Guarantor, and, to the best of Borrower knowledge, no Operator is (or will be) a person with whom any Lender is restricted from doing business under OFAC (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 23, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. In addition, each Borrower hereby agrees to provide Agent with any additional information that any Lender deems necessary from time to time in order to ensure compliance with all applicable Laws concerning money laundering and similar activities.

(cc) Each Operating Lease is in full force and effect. To Borrower’s knowledge, there are no defaults (either monetarily or non-monetarily) by any Operator or any Borrower under its Operating Lease.

(dd) No Borrower has entered into this Agreement or any of the other Loan Documents with the actual intent to hinder, delay, or defraud any creditor, and each Borrower has received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effect to the transactions contemplated by the Loan Documents, the fair saleable value of each Borrower’s assets exceeds and will, immediately following the execution and delivery of the Loan Documents, be greater than such Borrower’s probable liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and mature. Each Borrower’s assets do not and, immediately following the execution and delivery of the Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. No Borrower intends to, and does not believe that it will, incur debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of each Borrower).

(ee) After consultation with counsel concerning the federal anti-kickback law (42 U.S.C.A. SEC. 1320a-7b(b)), neither any Borrower nor its agent have offered or given any remuneration or thing of value to any person to encourage referral to the Projects nor has any Borrower or its agent solicited or received any remuneration or thing of value in exchange for any Borrower’s agreement to make referrals or to purchase goods or services for the Projects.

(ff) Except for indirect ownership interests in any Borrower as a result of ownership of publicly traded shares of stock in Guarantor, no physician or other healthcare practitioner has an ownership interest in, or financial relationship with, any Borrower, any Project or, to the best of Borrowers’ knowledge, any Operator.

(gg) The Batesville Project is duly licensed as a 150-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 116 bed skilled nursing facility. Batesville Operator is, or will be, the lawful owner of all required permits for the operation of the Batesville Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Batesville Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Batesville Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Batesville Project. The Batesville Borrower and the Batesville Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Batesville Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Batesville Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Batesville Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Batesville Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

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(hh) The Broadway Project is duly licensed as a 119-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 119 bed skilled nursing facility. Broadway Operator is, or will be, the lawful owner of all required permits for the operation of the Broadway Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Broadway Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Broadway Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Broadway Project. The Broadway Borrower and the Broadway Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Broadway Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Broadway Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Broadway Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Broadway Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

(ii) The Jonesboro Project is duly licensed as a 136-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 136 bed skilled nursing facility. Jonesboro Operator is, or will be, the lawful owner of all required permits for the operation of the Jonesboro Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Jonesboro Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Jonesboro Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Jonesboro Project. The Jonesboro Borrower and the Jonesboro Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Jonesboro Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Jonesboro Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Jonesboro Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Jonesboro Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

(jj) The Magnolia Project is duly licensed as a 140-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 140 bed skilled nursing facility. Magnolia Operator is, or will be, the lawful owner of all required permits for the operation of the Magnolia Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Magnolia Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Magnolia Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Magnolia Project. The Magnolia Borrower and the Magnolia Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Magnolia Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Magnolia Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Magnolia Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Magnolia Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

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(kk) The Mine Creek Project is duly licensed as a 78-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 78 bed skilled nursing facility. Mine Creek Operator is, or will be, the lawful owner of all required permits for the operation of the Mine Creek Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Mine Creek Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Mine Creek Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Mine Creek Project. The Mine Creek Borrower and the Mine Creek Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Mine Creek Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Mine Creek Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Mine Creek Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Mine Creek Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

(ll) The Searcy Project is duly licensed as a 245-bed skilled nursing facility under the applicable laws of the State of Arkansas and is currently operated as a 191 bed skilled nursing facility. Searcy Operator is, or will be, the lawful owner of all required permits for the operation of the Searcy Project, including, without limitation, the Certificate of Need, if applicable, which (a) are in full force and effect, (b) constitute all of the permits, licenses and certificates required for the use, operation and occupancy thereof, (c) have not been pledged as collateral for any other loan or indebtedness, (d) are held free from any restriction or any encumbrance which would materially adversely affect the use or operation of the Searcy Project and (e) are not provisional, probationary or restricted in any way. No waivers of any laws, rules, regulations, or requirements (including, but not limited to, minimum foot requirements per bed are required for the Searcy Project to operate at the foregoing licensed bed capacity. All Reimbursement Contracts are in full force and effect with respect to the Searcy Project. The Searcy Borrower and the Searcy Operator are in good standing with all the respective agencies governing such Project’s licenses, program certification and Reimbursement Contracts. Searcy Borrower is current in the payment of all so-called provider specific taxes or other assessments with respect to such Reimbursement Contracts. Searcy Borrower will maintain the Certificate of Need, if applicable, and/or any required permits in full force and effect. In the event Lender acquires the Searcy Project through foreclosure or otherwise, neither Lender nor a subsequent manager, a subsequent lessee or any subsequent purchaser (through foreclosure or otherwise) must obtain a Certificate of Need prior to applying for and receiving a license to operate the Searcy Project and certification to receive Medicare and Medicaid payments (and its successor programs) for patients having coverage thereunder provided that no service or bed complement is changed.

(mm) No Borrower nor its Operator has granted to any third party the right to reduce the number of licensed beds in any Project or to apply for approval to transfer the right to any or all of the licensed beds to any other location.

(nn) Each Project is in compliance with all requirements for participation in Medicare and Medicaid, including without limitation, the Medicare and Medicaid Patient Protection Act of 1987. Each Project is in conformance in all material respects with all insurance, reimbursement and cost reporting requirements and has a current provider agreement which is in full force and effect under Medicare and Medicaid.

(oo) There is no threatened or pending revocation, suspension, termination, probation, restriction, limitation, or nonrenewal affecting any Borrower, any Project or any participation or provider agreement with any third-party payor, including Medicare, Medicaid, Blue Cross and/or Blue Shield, and any other private commercial insurance managed care and employee assistance program (such programs, the “Third-Party Payors’

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Programs”) to which Borrowers or the Projects presently is subject. All Medicare (if any), Medicaid (if any) and private insurance cost reports and financial reports submitted by Borrower or Operator are and will be materially accurate and complete and have not been and will not be misleading in any material respects. No cost reports for any Project remain “open” or unsettled except as otherwise disclosed.

(pp) No Borrower nor Guarantor nor, to the best of Borrower’s knowledge, any Operator or any Project is currently the subject of any proceeding by any governmental agency, and no notice of any violation has been received by any Borrower or Guarantor from any federal, state or local government or quasi-governmental body or agency or any administrative or investigative body that would, directly or indirectly, or with the passage of time:

(i) have a material adverse impact on a Borrower’s or an Operator’s ability to accept and/or retain residents or result in the imposition of a fine, a sanction, a lower rate certification or a lower reimbursement rate for services rendered to eligible residents;

(ii) modify, limit or annul or result in the transfer, suspension, revocation or imposition of probationary use of any of the permits; or

(iii) affect a Borrower’s continued participation in the Medicare or Medicaid programs or any other Third-Party Payors’ Programs, or any successor programs thereto, at current rate certifications.

3.2 Survival of Representations and Warranties.

Each Borrower agrees that all of the representations and warranties set forth in Section 3.1 and elsewhere in this Agreement are true as of the date hereof, will be true at the Loan Opening and, except for matters which have been disclosed by Borrowers and approved by Agent in writing, at all times thereafter. It shall be a condition precedent to the Loan Opening that each of said representations and warranties is true and correct as of the date thereof.

ARTICLE 4

LOAN AND LOAN DOCUMENTS

4.1 Agreement to Borrow and Lend; Lenders’ Obligation to Disburse.

Subject to the terms, provisions and conditions of this Agreement and the other Loan Documents, Borrowers agree to borrow from the Lenders and each Lender agrees to lend to Borrowers the Loan, for the purposes and subject to all of the terms, provisions and conditions contained in this Agreement. If more than one Lender is a party hereto, the obligations of each such Lender with respect to the amount it has agreed to loan to Borrowers shall be several (and not joint and several) and shall be limited to its proportionate share of the Loan and of each advance.

(a) The maximum aggregate amount of the Loan shall not exceed the lesser of (i) Thirty Million and No/100 Dollars ($30,000,000.00), and (ii) sixty percent (60%) of the “leased fee” value of the Projects as determined in the Appraisal, and (iii) sixty percent (60%) of the “fee simple” value of the Projects as determined in the Appraisal. The Loan will be funded in a single lump sum advance on the Loan Opening Date. The Loan is non-revolving, and amounts repaid hereunder shall not be available for further borrowing hereunder.

(b) Lenders agree, upon Borrowers’ compliance with and satisfaction of all conditions precedent to the Loan Opening and provided no Material Adverse Change has occurred with respect to any Borrower, Guarantor or the Projects and no default or Event of Default has occurred and is continuing hereunder, to open the Loan.

(c) To the extent that the Lenders may have acquiesced in noncompliance with any requirements precedent to the Opening of the Loan or precedent to the subsequent disbursement of the proceeds of the Loan, such acquiescence shall not constitute a waiver by Lenders, and Lenders may at any time after such acquiescence require Borrowers to comply with all such requirements.

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(d) Borrowers shall open one deposit account for each Project with Agent (each such account, a “Project Operating Account” and collectively, the “Project Operating Accounts”). All cash flow from each Project received by Borrowers, including, without limitation, the Lease Income, but excluding tenant security deposits referenced in (e) below, shall be deposited in the applicable Project Operating Account; provided, however, that any Lender may maintain a separate account in the name of one or more Borrowers for tenant security deposits from the Projects as agreed to between Agent and such Lender. During the existence of an Event of Default, all such cash flow shall be available for payment of debt service on the Loan, and Agent, for the pro rata benefit of the Lenders, is authorized to pay principal or interest due upon the Notes during the existence of an Event of Default as well as real estate taxes if the same are not paid by Borrower or Operator prior to delinquency by debiting funds on deposit in the Project Operating Accounts. Unless an Event of Default shall exist, Borrowers shall have access to and may use any or all Monthly Excess Cash Flow then held in the Project Operating Accounts for any lawful purpose which shall include, without limitation, payment of the operating expenses for the Projects, dividends, distributions or any other costs or expenses of Borrowers or Guarantors.

(e) Borrowers shall open one deposit account for all Projects maintained by Synovus for the benefit of the Lenders (“Tenant Deposit Account”). All tenant security deposits under the Leases received by Borrowers shall be deposited in the tenant Deposit Account, including, without limitation, $458,431.00 on the date hereof and $76,406.00 per month for the twelve months commencing on the date hereof. For the avoidance of doubt, the rights of the Lenders in the security deposits referenced herein are subject to the rights of Operators under the Leases. Borrowers hereby pledge the Tenant Deposit Account and all amounts held in therein to Agent for the benefit of the Lenders. The Tenant Deposit Account shall be a blocked account held by Synovus subject to a control agreement with Borrowers on Synovus’ form.

4.2 Loan Documents.

Each Borrower agrees that it will, on or before the Loan Opening Date, execute and deliver or cause to be executed and delivered to Agent the following documents in form and substance acceptable to Agent:

(a) One or more promissory notes (the “Notes”), in the maximum amount of the Loan, executed by Borrowers and payable to the order of each Lender in the amount of such Lender’s Commitment.

(b) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Batesville Mortgage”), executed by Batesville Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Batesville Borrower’s fee simple interest in the Batesville Project, subject only to the Batesville Permitted Exceptions.

(c) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Broadway Mortgage”), executed by Broadway Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Broadway Borrower’s fee simple interest in the Broadway Project, subject only to the Broadway Permitted Exceptions.

(d) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Jonesboro Mortgage”), executed by Jonesboro Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Jonesboro Borrower’s fee simple interest in the Jonesboro Project, subject only to the Jonesboro Permitted Exceptions.

(e) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Magnolia Mortgage”), executed by Magnolia Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Magnolia Borrower’s fee simple interest in the Magnolia Project, subject only to the Magnolia Permitted Exceptions.

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(f) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Mine Creek Mortgage”), executed by Mine Creek Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Mine Creek Borrower’s fee simple interest in the Mine Creek Project, subject only to the Mine Creek Permitted Exceptions.

(g) An Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (the “Searcy Mortgage”), executed by Searcy Borrower in favor of Agent for the benefit of the Lenders securing this Agreement, the Notes, and all obligations of Borrowers in connection with the Loan, granting a first priority lien on Searcy Borrower’s fee simple interest in the Searcy Project, subject only to the Searcy Permitted Exceptions.

(h) A guaranty ( the “Guaranty”) executed by Guarantor and pursuant to which the Guarantor guarantees the “Guaranteed Indebtedness” as such term is therein defined.

(i) An environmental indemnity (“Indemnity”) from Borrowers and Guarantor indemnifying Agent and the Lenders with regard to all matters related to Hazardous Materials and other environmental matters.

(j) The Assignments of Rents.

(k) Such UCC financing statements as Agent’s counsel determines are advisable or necessary to perfect or notify third parties of the security interests intended to be created by the Loan Documents.

(l) Such other documents, instruments or certificates as Agent and its counsel may reasonably require, including such documents as Agent in its sole discretion deems necessary or appropriate to effectuate the terms and conditions of this Agreement and the Loan Documents, and to comply with the laws of the State.

4.3 Term of the Loan.

Unless the Loan is otherwise earlier accelerated as permitted herein or under any other Loan Document, all principal, interest and other sums due under the Loan Documents shall be due and payable in full on the Original Maturity Date. The terms and provisions of this Section 4.3 shall not constitute a waiver of the requirement that any modification of the Notes or any of the Loan Documents shall require the express written approval of Agent, no such approval (either expressed or implied) having been given as of the date hereof (other than as expressly set forth herein).

4.4 Prepayments.

Borrowers shall have the right to make prepayments of the Loan, in whole or in part, without prepayment penalty other than any Breakage Costs which may be due, upon not less than seven (7) days’ prior written notice to Agent. No prepayment of all or part of the Loan shall be permitted unless same is made together with the payment of all interest accrued on the Loan through the date of prepayment and an amount equal to all Breakage Costs and attorneys’ fees and disbursements incurred by each Lender as a result of the prepayment.

4.5 Required Principal Payments.

In addition to, and not in lieu of, each monthly interest payment required under Section 5.1 hereof, commencing May 10, 2015, and continuing on the tenth (10^th) day of each successive month thereafter until the Final Maturity Date, principal shall be due and payable in monthly installments. Each such installment shall be in an amount that would be sufficient to fully amortize the Loan on a twenty-five (25) year amortization schedule at a per annum rate of six percent (6%). Notwithstanding anything to the contrary, the aggregate outstanding balance of the Loan plus all accrued but unpaid interest shall be due and payable on the Final Maturity Date.

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4.6 Late Charge.

Any and all amounts due hereunder or under the other Loan Documents which remain unpaid more than ten (10) days after the date said amount was due and payable shall incur a fee (the “Late Charge”) of four percent (4%) of said amount, which payment shall be in addition to all of Lenders’ other rights and remedies under the Loan Documents, provided that no Late Charge shall apply to the final payment of principal on the Final Maturity Date.

ARTICLE 5

INTEREST

5.1 Interest Rate.

(a) The Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable. Except as expressly provided herein, the Adjusted LIBOR Rate shall be the “Applicable Rate”. Borrower shall pay interest in arrears on the tenth (10^th) day of every calendar month in the amount of all interest accrued and unpaid. All payments (whether of principal or of interest) shall be deemed credited to Borrower’s account only if received by 12:00 noon Brooklyn, Ohio, time on a Business Day; otherwise, such payment shall be deemed received on the next Business Day.

(b) If Agent determines in its reasonable discretion (i) that Dollar deposits in an amount approximately equal to the Loan for the designated LIBOR Rate Interest Period are not generally available at such time in the London interbank market for deposits in Dollars, (ii) that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to Lenders of maintaining a LIBOR Rate on such portion of the Loan or of funding the same for such LIBOR Rate Interest Period due to circumstances affecting the London interbank market generally, (iii) that reasonable means do not exist for ascertaining a LIBOR Rate, or (iv) that an Adjusted LIBOR Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any such event, Agent shall so notify Borrower and all portions of the Loan bearing interest at an Adjusted LIBOR Rate that are so affected shall, as of the date of such notification with respect to an event described in clause (ii) or (iv) above, or as of the expiration of the applicable LIBOR Rate Interest Period with respect to an event described in clause (i) or (iii) above, bear interest at the Adjusted Base Rate (or such lower rate as required by applicable law) until such time as the situations described above are no longer in effect or can be avoided, at which time the Loan shall again accrue interest at the Adjusted LIBOR Rate.

(c) Interest at the Applicable Rate (or Default Rate) shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

(d) Borrower shall pay all Breakage Costs incurred from time to time by Lenders upon demand.

(e) If the introduction of or any change in any Law, regulation or treaty, or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof, shall make it unlawful for Lender to maintain the Applicable Rate at an Adjusted LIBOR Rate with respect to the Loan or any portion thereof, or to fund the Loan or any portion thereof in Dollars in the London interbank market, or to give effect to its obligations regarding the accrual of interest on the Loan at the Adjusted LIBOR Rate as contemplated by the Loan Documents, then (1) Agent shall notify Borrower that Lenders are no longer able to maintain the Applicable Rate at an Adjusted LIBOR Rate, (2) the Applicable Rate for any portion of the Loan for which the Applicable Rate is then an Adjusted LIBOR Rate shall automatically be converted to the Adjusted Base Rate, and (3) Borrower shall pay to Agent the amount of Breakage Costs (if any) incurred in connection with such conversion. Thereafter, the Loan shall accrue interest at the Adjusted Base Rate until such time as the situation described herein is no longer in effect or can be avoided, at which time the Loan shall again accrue interest at the Adjusted LIBOR Rate.

(f) The Loan shall bear interest at the Default Rate upon the election of the Lenders at any time at which an Event of Default shall exist.

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ARTICLE 6

COSTS OF MAINTAINING LOAN

6.1 Increased Costs and Capital Adequacy.

(a) Borrowers recognize that the cost to the Lenders of maintaining the Loan or any portion thereof may fluctuate and, Borrowers agree to pay Agent for the pro rata benefit of the Lenders additional amounts to compensate the Lenders for any increase in its actual costs incurred in maintaining the Loan or any portion thereof outstanding or for the reduction of any amounts received or receivable from Borrowers as a result of:

(i) any change after the date hereof in any applicable Law, regulation or treaty, or in the interpretation or administration thereof, or by any domestic or foreign court, (A) changing the basis of taxation of payments under this Agreement to Agent (other than taxes imposed on all or any portion of the overall net income or receipts of any Lender), or (B) imposing, modifying or applying any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, credit extended by, or any other acquisition of funds for loans by the Lenders (which includes the Loan or any applicable portion thereof), or (C) imposing on any Lender, or the London interbank market generally, any other condition affecting the Loan, provided that the result of the foregoing is to increase the cost to Lender of maintaining the Loan or any portion thereof or to reduce the amount of any sum received or receivable from Borrowers by Lenders under the Loan Documents; or

(ii) the maintenance by any Lender of reserves in accordance with reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States with respect to “Eurocurrency Liabilities” of a similar term to that of the applicable portion of the Loan (without duplication for reserves already accounted for in the calculation of a LIBOR Rate pursuant to the terms hereof).

(b) If the application of any Law, rule, regulation or guideline adopted or arising out of the July, 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards”, or the adoption after the date hereof of any other Law, rule, regulation or guideline regarding capital adequacy, or any change after the date hereof in any of the foregoing, or in the interpretation or administration thereof by any domestic or foreign Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has the effect of reducing the rate of return on Lender’s capital to a level below that which Lender would have achieved but for such application, adoption, change or compliance (taking into consideration the policies of Lender with respect to capital adequacy), then, from time to time Borrowers shall pay to Lender such additional amounts as will compensate Lender for such reduction with respect to any portion of the Loan outstanding.

(c) Any amount payable by Borrowers under subsection (a) or subsection (b) of this Section 6.1 shall be paid within five (5) days of receipt by Borrowers of a certificate signed by an authorized officer of Agent setting forth the amount due and the basis for the determination of such amount, which statement shall be conclusive and binding upon Borrowers, absent manifest error. Failure on the part of Agent to demand payment from Borrowers for any such amount attributable to any particular period shall not constitute a waiver of each Lender’s right to demand payment of such amount for any subsequent or prior period. Agent shall use reasonable efforts to deliver to Borrowers prompt notice of any event described in subsection (a) or (b) above, of the amount of the reserve and capital adequacy payments resulting therefrom and the reasons therefor and of the basis of calculation of such amount; provided, however, that any failure by Agent to so notify Borrowers shall not affect Borrowers’ obligation to pay the reserve and capital adequacy payment resulting therefrom.

6.2 Borrower Withholding.

If by reason of a change in any applicable Laws occurring after the date hereof, any Borrower is required by Law to make any deduction or withholding in respect of any taxes (other than taxes imposed on or measured by the net income of any Lender or any franchise tax imposed on any Lender), duties or other charges

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from any payment due under the Notes, the sums due from such Borrower in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, Lender receives and retains a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made.

ARTICLE 7

LOAN EXPENSE AND ADVANCES

7.1 Loan and Administration Expenses.

Each Borrower unconditionally agrees to pay all reasonable expenses of the Loan, including all amounts payable pursuant to Sections 7.2 and 7.3 and any and all other fees owing to Agent or any Lender pursuant to the Loan Documents, and also including, without limiting the generality of the foregoing, all recording, filing and registration fees and charges, mortgage or documentary taxes, all insurance premiums, title insurance premiums and other charges of each Title Insurer, printing and photocopying expenses, survey fees and charges, cost of certified copies of instruments, cost of premiums on surety company bonds and the Title Policies, at the promulgated rates, if applicable, charges of a Title Insurer or other escrowee for administering disbursements, all fees and costs of Agent’s Environmental Report, all appraisal fees, insurance consultant’s fees, travel related expenses and all costs and expenses incurred by Agent in connection with the determination of whether or not Borrowers have performed the obligations undertaken by Borrowers hereunder or have satisfied any conditions precedent to the obligations of each Lender hereunder and, if any default or Event of Default occurs hereunder or under any of the Loan Documents or if the Loan or the Notes or any portion thereof is not paid in full when and as due, all costs and expenses of Lenders (including, without limitation, court costs and counsel’s fees and disbursements) incurred in attempting to enforce payment of the Loan and expenses of Agent and each Lender incurred (including court costs and counsel’s fees and disbursements) in attempting to realize, while a default or Event of Default exists, on any security or incurred in connection with the sale or disposition (or preparation for sale or disposition) of any security for the Loan. Each Borrower agrees to pay all brokerage, finder or similar fees or commissions payable in connection with the transactions contemplated hereby and shall indemnify and hold Agent and the Lenders harmless against all claims, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) arising in relation to any claim by broker, finder or similar person.

7.2 Lender’s Attorneys’ Fees and Disbursements.

Borrowers agree to pay the reasonable attorneys’ fees of the Lenders and disbursements incurred in connection with the Loan, including (i) the preparation of this Agreement, any intercreditor agreements and the other Loan Documents and the preparation of the closing binders, (ii) the disbursement, syndication, amendment and administration of the Loan and (iii) the enforcement of the terms of this Agreement and the other Loan Documents.

7.3 Time of Payment of Fees and Expenses.

Borrowers shall pay all expenses and fees incurred as of the Loan Opening on the Loan Opening Date (unless sooner required herein). At the time of the Opening of the Loan, Agent may pay from the proceeds of the initial disbursement of the Loan all Loan expenses. Agent is hereby authorized, without any specific request or direction by Borrowers, to make disbursements from time to time in payment of or to reimburse Agent for all reasonable Loan expenses and fees.

7.4 Expenses and Advances Secured by Loan Documents.

Any and all advances or payments made by any Lender under this Article 7 from time to time, and any amounts expended by Agent pursuant to this Agreement, shall, as and when advanced or incurred, constitute additional indebtedness evidenced by the Notes and secured by the Mortgage and the other Loan Documents.

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7.5 Right of Lender to Make Advances to Cure Borrowers’ Defaults.

In the event that any Borrower fails to perform any of such Borrower’s covenants, agreements or obligations contained in this Agreement or any of the other Loan Documents (after the expiration of applicable grace periods, except in the event of an emergency or other exigent circumstances), Agent may (but shall not be required to) perform any of such covenants, agreements and obligations, and any amounts expended by Agent in so doing and shall constitute additional indebtedness evidenced by the Notes and secured by the Mortgages and the other Loan Documents and shall bear interest at the Default Rate.

ARTICLE 8

REQUIREMENTS PRECEDENT

TO THE OPENING OF THE LOAN AND ANY SUBSEQUENT DISBURSEMENT

8.1 Conditions Precedent to Closing and Opening of the Loan.

Borrowers agree that the obligation of the Lenders’ to open the Loan is conditioned upon Borrowers’ performance and satisfaction of the following conditions precedent in form and substance satisfactory to Agent in its reasonable discretion:

(a) Borrowers shall have furnished to Agent ALTA Mortgagee Title Insurance Policies, issued by the Title Insurer in the maximum amount of the Loan, insuring the lien of each Mortgage as a valid first, prior and paramount lien upon the applicable Project and all appurtenant easements, and subject to no exceptions other than the applicable Permitted Exceptions (collectively, the “Title Policies”). The Title Policies shall satisfy the requirements of Exhibit C attached hereto and made a part hereof;

(b) Borrowers shall have furnished an ALTA plat of survey of each Project prepared and certified by a surveyor licensed in the State in which the respective Land is located and otherwise satisfactory to Agent, in triplicate, showing, through the use of course bearings and distances, (i) all foundations of the Improvements in place; (ii) the dimensions and locations of all easements and roads or rights of way and setback lines, if any, affecting each Project, or required by subsection (i) of this Section and that the same are unobstructed; (iii) the dimensions, boundaries and square footage of the applicable Improvements, if any; (iv) that all foundations and other structures are within the lot lines and in compliance with any restrictions of record or ordinances relating to the location thereof; (v) the dimensions of all buildings and improvements, if any, and distance of such buildings and improvements from the lot lines; (vi) no encroachments by any improvements located on adjoining property, except as approved by Agent; (vii) whether or not the applicable Project is located within a flood plain or flood hazard area; (viii) the location of adjoining streets and utilities and the distance and name of the nearest intersecting streets; (ix) the dimensions and locations of all exterior parking areas, if any; and (x) such additional information which may be required by Agent. Each such survey shall be dated no earlier than ninety (90) days prior to the Loan Opening, shall be made (and certified to have been made) as set forth in Exhibit D attached hereto and made a part hereof. Such survey shall include the legal description of the applicable Land;

(c) Borrowers shall have furnished to Agent prior to the Loan Opening Date satisfactory evidence that insurance coverages are in effect with respect to each Project and each Operator and Borrowers, in accordance with the Insurance Requirements attached hereto as Exhibit E, for which the premiums have been fully prepaid with endorsements satisfactory to Agent;

(d) Borrowers shall have furnished evidence that no litigation or proceedings shall be pending or, to the best of Borrowers’ knowledge, threatened which could or might cause a Material Adverse Change with respect to any Borrower, Guarantor, or any Project;

(e) Borrowers shall have furnished to Agent an opinion from counsel for Borrowers and Guarantor covering due authorization, execution and delivery and enforceability of the Loan Documents and also containing such other legal opinions as Agent shall require;

(f) Agent shall have obtained one or more Appraisals, which Appraisals must be satisfactory to Agent in all respects;

(g) Borrowers shall have furnished to Agent a property condition report for each Project;

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(h) Borrowers shall have furnished to Agent current bankruptcy, federal tax lien and judgment searches and searches of all Uniform Commercial Code financing statements filed in each place UCC Financing Statements are to be filed hereunder, demonstrating the absence of adverse claims;

(i) Borrowers shall have furnished to Agent current annual financial statement of Guarantor, and such other persons or entities connected with the Loan as Agent may request, each in form and substance and certified by Borrowers or Guarantor, as applicable, as acceptable to Agent. Guarantor shall provide such other additional financial information Agent reasonably requires;

(j) Borrowers shall have furnished to Agent legible copies of all title exception documents cited in the Title Policy and all other legal documents affecting each Project or the use thereof;

(k) Intentionally Deleted;

(l) Agent has received evidence that no portion of the Projects is located in an area designated by the Secretary of Housing and Urban Development as a special flood hazard area, or flood hazard insurance acceptable to Agent in its sole discretion;

(m) If any Title Policy does not include a zoning endorsement, Borrowers shall have furnished to Agent a zoning report for each Project in form satisfactory to Agent;

(n) Borrowers shall have furnished to Agent proof satisfactory to Agent of authority, formation, organization and good standing in the state of its incorporation or formation and, if applicable, qualification as a foreign entity in good standing in the state of its incorporation or formation, of all corporate, partnership, trust and limited liability company entities (including each Borrower and Guarantor) executing any Loan Documents, whether in their own name or on behalf of another entity. Borrower shall also provide certified resolutions in form and content satisfactory to Agent, authorizing execution, delivery and performance of the Loan Documents, and such other documentation as Agent may reasonably require to evidence the authority of the persons executing the Loan Documents;

(o) Borrowers shall have furnished an environmental report (“Environmental Report”) for each Project prepared at Borrowers’ expense by a qualified environmental consultant approved by Agent. The environmental survey shall, at a minimum, (a) demonstrate the absence of any existing or potential Hazardous Material contamination or violations of environmental Laws at each Project, except as acceptable to Agent in its sole and absolute discretion, (b) include the results of all sampling or monitoring to confirm the extent of existing or potential Hazardous Material contamination at any Project, including the results of leak detection tests for each underground storage tank located at such Project, if any, (c) describe response actions appropriate to remedy any existing or potential Hazardous Material contamination, and report the estimated cost of any such appropriate response, (d) confirm that any prior removal of Hazardous Material or underground storage tanks from any Project was completed in accordance with applicable Laws, and (e) confirm whether or not the Land is located in a wetlands district;

(p) Intentionally Deleted;

(q) Intentionally Deleted;

(r) Borrowers shall have delivered to Agent a copy of the executed Operating Lease for each Project between the applicable Borrower and the applicable Operator along with a subordination, non-disturbance and attornment agreement fully executed between the applicable parties on Agent’s form;

(s) Intentionally Deleted;

(t) There shall be no uncured Default or Event of Default by any Borrower hereunder;

(u) Borrowers shall have delivered to Agent copies of the current renewed licenses for each Project that expire as of June 30, 2014; and

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(v) Borrowers shall have furnished to Agent such other materials, documents, papers or requirements regarding any Project, any Borrower and Guarantor as Agent shall reasonably request.

The conditions contained in this Section 8.1 are for the sole benefit of the Lenders, and Agent, on behalf of the Lenders, may, in its sole discretion, waive Borrowers’ compliance with any one (1) or more conditions; provided, that, in no event shall the waiver of one (1) condition by Agent constitute the waiver of any other condition listed above.

ARTICLE 9

RESERVED

ARTICLE 10

BORROWERS’ AGREEMENTS

10.1 Borrowers further covenant and agree as follows:

(a) Opening of Loan on the Loan Opening Date. All conditions precedent to the Opening of the Loan shall be complied with on or prior to the Loan Opening Date. If such conditions are not complied with as of the Loan Opening Date, Agent may at its sole option terminate the obligation of the Lenders to fund the Loan by written notice to Borrowers.

(b) Inspection by Agent. Borrowers will cooperate with Agent in arranging for inspections by representatives of Agent from time to time provided, that unless an Event of Default exists, upon twenty-four (24) hours prior notice to Borrowers. Such inspection shall include an examination of (i) the Improvements, and (ii) all books, contracts and records with respect to the Improvements.

(c) Mechanics’ Liens and Contest Thereof. Borrowers will not suffer or permit any mechanics’ lien claims to be filed or otherwise asserted against any Project, and will promptly discharge the same in case of the filing of any claims for lien or proceedings for the enforcement thereof, provided, however, that Borrowers shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claim upon furnishing to the Title Insurer such security or indemnity as it may require to induce said Title Insurer to issue an endorsement to the Title Policy insuring against all such claims or liens; and provided further, that the aggregate amount of liens so insured against at any time shall not exceed $25,000.00 for any one Project or $150,000.00 in the aggregate without Agent’s prior written consent.

(d) Settlement of Mechanics’ Lien Claims. If Borrowers shall fail promptly either (i) to discharge any such lien, or (ii) to contest claims asserted and give security or indemnity in the manner provided in subsection (c) of this Section, or having commenced to contest the same, and having given such security or indemnity, shall fail to prosecute such contest with diligence, or to maintain such indemnity or security so required by the Title Insurer for its full amount, or upon adverse conclusion of any such contest, to cause any judgment or decree to be satisfied and lien to be released, then and in any such event Agent may, at its election (but shall not be required to), procure the release and discharge of any such claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, or may furnish such security or indemnity to the Title Insurer, and any amounts so expended by Agent or any Lender, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute disbursement of the proceeds of the Loan hereunder. In settling, compromising or discharging any claims for lien, Agent shall not be required to inquire into the validity or amount of any such claim.

(e) Renewal of Insurance. Borrowers shall maintain, or cause the Operators to maintain, insurance policies to be maintained in compliance with Exhibit E at all times. Borrowers shall timely pay, or cause the Operators to pay, all premiums on all insurance policies required hereunder, and as and when additional insurance is required by Agent, from time to time, and as and when any policies of insurance may expire, furnish to Agent, premiums prepaid, additional and renewal insurance policies with companies, coverage and in amounts satisfactory to Agent in accordance with Section 8.1(c).

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(f) Payment of Taxes. Borrowers shall pay, or cause to be paid, all real estate taxes and assessments and charges of every kind upon the Projects before the same become delinquent, provided, however, that Borrowers shall have the right to pay such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing the collection of such taxes so contested and also of preventing the sale or forfeiture of the Project or any part thereof or any interest therein, (ii) Borrowers have notified Agent of their intent to contest such taxes, and (iii) Borrowers have deposited security in form and amount satisfactory to Agent, in its sole discretion. If Borrowers fail to commence such contest or, having commenced to contest the same, and having deposited such security required by Agent for its full amount, shall thereafter fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of any such contest, shall fail to pay such tax, assessment or charge, Agent, on behalf of the Lenders, may, at its election (but shall not be required to), pay and discharge any such tax, assessment or charge, and any interest or penalty thereon, and any amounts so expended by Agent shall be deemed to constitute disbursements of the Loan proceeds hereunder (even if the total amount of disbursements would exceed the face amount of the Notes). Borrowers shall furnish to Agent evidence that taxes are paid at least five (5) days prior to the last date for payment of such taxes and before imposition of any penalty or accrual of interest.

(g) Escrow Accounts. During the continuance of an Event of Default, Borrowers shall, following the written request of Agent and for so long as such Event of Default is continuing, make insurance and tax escrow deposits, in amounts reasonably determined by Agent from time to time as being needed to pay taxes and insurance premiums when due, in an interest bearing escrow account held by Agent in Agent’s name and under its sole dominion and control. All payments deposited in the escrow account, and all interest accruing thereon, are pledged as additional collateral for the Loan. Notwithstanding Agent’s holding of the escrow account, nothing herein shall obligate Agent or any Lender to pay any insurance premiums or real property taxes with respect to any portion of the Projects, provided that, so long as no Event of Default exists, Agent shall make available to Borrowers such funds as may be deposited in the escrow account from time to time for Borrowers’ payment of insurance premiums or real property taxes due with respect to the Projects.

(h) Personal Property. All of Borrowers’ personal property, fixtures, attachments and equipment delivered upon, attached to or used in connection with the operation of the Projects shall always be located at the applicable Project and shall be kept free and clear of all liens, encumbrances and security interests.

(i) Operating Leases. Each Borrower shall maintain its Operating Lease in full force and effect and timely perform all of its obligations thereunder and not permit the termination or any material amendment of any Operating Lease unless the prior written consent of Lenders is first obtained. Upon the occurrence of default by an Operator under an Operating Lease that is not cured within applicable notice and cure periods, upon Lenders’ request, Borrowers shall promptly engage oversight management services from a management company reasonably acceptable to the Lenders. In the event that bankruptcy or insolvency proceedings are instituted by or against any Operator, each Borrower shall (to the extent permitted by the applicable bankruptcy court having jurisdiction over such proceedings), upon written instruction received from Agent, terminate the Operating Lease.

(j) Defaults Under Leases. Borrowers will not suffer or permit any breach or material default to occur in any of Borrowers’ obligations under any of the Leases nor suffer or permit the same to terminate by reason of any failure of Borrowers to meet any requirement of any Lease, which default or failure results in a Material Adverse Change, including, without limitation, under any Operating Lease between any of the Borrowers and any Operator.

(k) Agent’s Attorneys’ Fees for Enforcement of Agreement. In case of any default or Event of Default hereunder, Borrowers (in addition to Agent’s reasonable attorneys’ fees, if any, to be paid pursuant to Section 7.3) will pay Agent’s reasonable attorneys’ and paralegal fees (including, without limitation, any attorney and paralegal fees and costs incurred in connection with any litigation or bankruptcy or administrative hearing and any appeals therefrom) in connection with the enforcement of this Agreement; without limiting the generality of the foregoing, if at any time or times hereafter Agent or any Lender employs counsel (whether or not any suit has been or shall be filed and whether or not other legal proceedings have been or shall be instituted) for advice or other representation with respect to the Projects, this Agreement, or any of the other Loan Documents, or to protect, collect, lease, sell, take possession of, or liquidate the Project, or to attempt to enforce any security interest or lien in any portion of the Project, or to enforce any rights of Agent and each Lender or any of Borrowers’ obligations

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hereunder, then in any of such events all of the reasonable attorneys’ fees arising from such services, and any expenses, costs and charges relating thereto, shall constitute an additional liability owing by Borrowers to Agent and/or the applicable Lender, on a joint and several basis, payable on demand.

(l) Appraisals. Agent shall have the right to obtain a new or updated Appraisal of any Project from time to time. Borrowers shall cooperate with Agent in this regard. If the Appraisal is obtained to comply with any applicable law or regulatory requirement, or bank policy promulgated to comply therewith, or an Event of Default exists, Borrowers shall pay for any such Appraisal upon Agent’s request.

(m) Furnishing Information. Borrowers shall provide Lender or shall cause Guarantor or Operator to provide to Agent the following financial statements and information on a continuing basis during the term of the Loan:

(i) Within ninety (90) days after the end of each Fiscal Year of each Project, Borrowers unaudited financial statements prepared in accordance with GAAP, and certified by an officer of Borrower, which statements shall be prepared in accordance with GAAP, and shall include a balance sheet and a statement of income and expenses for the year then ended, and shall be certified as true and correct by a financial officer of Borrowers.

(ii) Within ninety (90) days after the end of each calendar year, audited financial statements of the Guarantor on a GAAP basis (which include balance sheet, income statement, cash flow statement and all supporting notes);

(iii) Within forty-five (45) days after the end of each quarter, unaudited interim financial statements of the operations of the Projects, certified as true and correct by a financial officer of the Borrowers or Operators, prepared in accordance with GAAP, which statements shall include a balance sheet and statement of income and expenses for the quarter then ended and for the fiscal year to date, which such statements shall be accompanied by a covenant compliance certificate in the form attached hereto as Exhibit G;

(iv) Within forty-five (45) days after the end of each quarter, quarterly census information by payor-class of the Projects as of the end of such quarter on an average basis for such year through the end of such quarter, certified by the chief financial officer of Borrowers or Operator to be true and correct.

(v) Within sixty (60) days after the end of each quarter, unaudited interim financial statements of the operations of the Guarantor, certified as true and correct by a financial officer of the Guarantor, prepared in accordance with GAAP, which statements shall include a balance sheet and statement of income and expenses for the quarter then ended and for the Fiscal Year to date.

(vi) If and to the extent applicable, within ten (10) days after filing or receipt, all Medicaid cost reports and any amendments thereto filed with respect to the Projects and all responses, audit reports, or other inquiries with respect to such cost reports (based on availability and applicability).

(vii) Within ten (10) days after receipt, copies of all licensure survey reports and statements of deficiencies (with plans of correction attached thereto) (based on availability and applicability).

(viii) Within three (3) days after receipt, any and all notices (regardless of form) from any and all licensing agency, that any Project’s license or certification is being downgraded to a substandard category, revoked or suspended, or that action is pending or being considered to downgrade to a substandard category, revoke or suspend a Project’s license or certification.

(ix) If requested by Lender, within one hundred twenty (120) days after the end of the Projects’ Fiscal Year, and more frequently, if reasonably requested by Lender (but in no event more often than twice during any calendar year), an aged accounts receivable report for any Project by the account age classifications of 30 days, 60 days, 90 days, 120 days, and over 120 days.

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Lender reserves the right to require that the annual and/or quarterly financial statements of Borrowers, or Guarantor be audited and prepared by a nationally recognized accounting firm or independent certified public accounting firm acceptable to Lender, at their respective sole cost and expense, if (i) an Event of Default exists, or (ii) if Lender has reasonable grounds to believe that the unaudited financial statements do not accurately represent the financial condition of Borrowers or Guarantor as the case may be. Lender further reserves the right to require such other financial information of Borrowers, Guarantor, and/or the Projects, at such other times (including monthly or more frequently) as it shall deem necessary. All financial statements must be in the form and detail as Lender shall from time to time reasonably request. Borrowers shall during regular business hours permit Agent or any of its agents or representatives (after twenty-four hours prior notice to Borrowers unless an Event of Default exists) to have access to and examine all of its books and records regarding the development and operation of each Project.

(n) Lost Note. Upon any Lender’s furnishing to Borrowers an affidavit to such effect, Borrowers shall, if the applicable Note is mutilated, destroyed, lost or stolen, deliver to such Lender, in substitution therefor, a new note containing the same terms and conditions as the such Note.

(o) INDEMNIFICATION. BORROWERS SHALL INDEMNIFY AGENT, EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND CONSULTANTS (EACH, AN “INDEMNIFIED PARTY”) AND DEFEND AND HOLD EACH INDEMNIFIED PARTY HARMLESS FROM AND AGAINST ALL CLAIMS, INJURY, DAMAGE, LOSS AND LIABILITY, COST AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES, COSTS AND EXPENSES) OF ANY AND EVERY KIND TO ANY PERSONS OR PROPERTY BY REASON OF (I) THE OPERATION OR MAINTENANCE OF THE PROJECT; (II) ANY BREACH OF REPRESENTATION OR WARRANTY, DEFAULT OR EVENT OF DEFAULT; OR (III) ANY OTHER MATTER ARISING IN CONNECTION WITH THE LOAN, ANY BORROWER OR PROJECT (EXPRESSLY INCLUDING, WITHOUT LIMITATION, TO THE EXTENT CAUSED BY THE NEGLIGENCE OF THE INDEMNIFIED PARTY). NO INDEMNIFIED PARTY SHALL, HOWEVER, BE ENTITLED TO BE INDEMNIFIED AGAINST ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(p) No Additional Debt. Except for the Loan, no Borrower shall incur any indebtedness (whether personal or nonrecourse, secured or unsecured) other than customary trade payables paid within sixty (60) days after they are incurred and equipment lease financing in the ordinary course of business; provided, however, Borrowers shall be permitted to enter into recourse debt with the consent of Agent, which consent shall not be unreasonably withheld by Agent.

(q) Compliance With Laws. Each Borrower shall comply with all applicable requirements (including applicable Laws) of any Governmental Authority having jurisdiction over such Borrower or any applicable Project.

(r) Organizational Documents. No Borrower shall, without the prior written consent of Agent, permit or suffer (i) a material amendment or modification of its organizational documents, (ii) the admission of any new member, partner or shareholder, or (iii) any dissolution or termination of its existence.

(s) Furnishing Reports. Within thirty (30) days from receipt thereof, Borrowers shall provide Agent with copies of all inspections, reports, test results and other information received by any Borrower, which relate to any Project or any part thereof in any material respect.

(t) Management Contracts. Borrowers shall not and shall not permit its Operators to, enter into, modify in any material respect, amend in any material respect, terminate or cancel any management agreement (or any other contract related to the management or operation of any Project) for any Project (except that the Interim Agreements (as defined below) may terminate by their express terms) or agreements with agents or brokers, without the prior written approval of Agent, which approval shall not be unreasonably withheld by Agent. Pursuant to applicable law, the licenses and permits required for Operator to operate the Projects as a skilled nursing facility (the “Operator Permits”) may not be transferred or new Operator Permits issued prior to August 1^st of any calendar year and application of such transfer or issuance cannot be made more than thirty (30) days prior to August 1, 2013.

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Accordingly, as of the date hereof, the Operators have not been issued Operator Permits. Borrower agrees to cause Operator to apply for the issuance of new Operator Permits (the “New Operator Permits”) in a timely manner. Furthermore, as is customary practice in the State of Arkansas, in order for the Operators to operate the Projects during the period prior to the issuance of the New Operator Permits, (i) each Operator, as a sublessor, and each of the existing holders of the Operating Permits (the “Existing Permit Holders”), as a sublessee, have entered a Sublease Agreement of even date herewith with respect to each Project (individually, a “Sublease” and collectively, the “Subleases”) and (ii) each Existing Permit Holder and an affiliate of Operator, as a manager, have entered into a Management Agreement of even date herewith with respect to each Project (individually, a “Management Agreement” and collectively, the “Management Agreements”) (the Subleases and Management Agreements being collectively referred to as the “Interim Agreements”), which Interim Agreements shall terminate upon issuance of the New Operator Permits. Lender and Borrower acknowledge the foregoing arrangement with respect to the Operator Permits and issuance of New Operator Permits.

(u) Furnishing Notices. Borrowers shall provide Agent with copies of all material notices pertaining to any Project received by any Borrower from any Operator, any Governmental Authority or insurance company within seven (7) days after such notice is received.

(v) Alterations. Without the prior written consent of Agent, which consent will be not be unreasonably withheld, Borrowers shall not make, or permit to be made, any material alterations to any Project, other than alterations and improvements in the ordinary course of business and the Immediate Repairs.

(w) Distributions. At all times while any indebtedness under the Loan remains outstanding, Borrowers shall not make any distributions to partners, members or shareholders; provided, however, so long as no Event of Default exists as of the date of any such distribution and after giving effect thereto, Borrowers shall have access to and may use any or all Monthly Excess Cash Flow for any cash distribution. If an Event of Default occurs, Agent, for the pro rata benefit of the Lenders, may take all Monthly Excess Cash Flow and apply the same to the aggregate outstanding balance under the Loan Documents. Notwithstanding the foregoing, Borrowers shall be permitted to make equity distributions as, and in an amount, necessary to maintain REIT status whether or not an Event of Default exists.

(x) Minimum Occupancy. Borrowers shall not permit the aggregate Occupancy level for the Projects to be less than seventy-five percent (75%) of the number Available Beds based upon the average trailing twelve (12) months. Such covenant shall be tested on a quarterly basis commencing on September 30, 2013, and continuing on the last day of each quarter thereafter until the Final Maturity Date. The initial calculation shall be based upon a trailing three months with each successive test aggregating the prior period or periods until a trailing twelve months is achieved. If the foregoing covenant is not achieved for any quarter during the term of the Loan for which it is tested, Borrowers shall submit to Agent within thirty (30) days following such failure, a written plan of correction reasonably satisfactory to the Agent, detailing the Borrowers’ plan to bring the Projects into compliance with such covenant. If the Projects fail to achieve the required level for a second consecutive quarter, upon request by Agent, Borrowers shall (1) promptly retain a marketing consultant satisfactory to the Agent to advise the Borrowers regarding the Projects, (2) obtain and submit the recommendations or reports of such marketing consultant to Agent within thirty (30) days following the engagement of the marketing consultant, and (3) promptly implement the recommendations of the foregoing marketing consultant. Notwithstanding any provision herein to the contrary, Agent agrees that failure of the Projects to achieve the occupancy covenant shall not, in and of itself, constitute an Event of Default so long as Borrowers provide Agent with evidence satisfactory to Agent that a marketing plan submitted to and approved by Lender is being timely implemented to correct the non-compliance.

(y) Minimum Debt Service Coverage. Borrowers shall not permit the Debt Service Coverage to be less than 1.45 to 1.0 at all times. Such covenant shall be tested on a quarterly basis commencing on September 30, 2013, and continuing on the last day of each quarter thereafter until the Final Maturity Date. The initial calculation shall be based upon a trailing three months with each successive test aggregating the prior period or periods until a trailing twelve months is achieved.

(z) Minimum Rent Coverage. Borrowers shall not permit the Rent Coverage to be less than that set forth in Schedule II attached hereto. Such covenant shall be tested on a quarterly basis in accordance with such Schedule and for the periods therein set forth.

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(aa) Lien Searches. Without limiting the obligations of the Borrowers hereunder, Borrowers agree, within ten (10) days of Lender’s written demand, to reimburse Agent for all expenses not to exceed $2,000 in any twelve (12) month period incurred by Agent in periodically (up to two (2) times per year) verifying the performance of each Borrower of its obligations under the Loan Documents and the security and priority of the Mortgages, including without limitation expenses incurred by Agent for title searches, title updates and endorsements, tax and judgment lien searches, litigation searches, and UCC searches.

(bb) REIT Status. Guarantor shall maintain its status as a real estate investment trust at all times that any portion of the Loan is outstanding.

(cc) Immediate Repairs. Borrowers shall promptly commence the Immediate Repairs and shall complete the same prior to September 1, 2013.

(dd) Conduct of Operations. Borrowers shall conduct, or cause Operator to conduct, the operation of each Project at all times in a manner consistent with the level of operation of other similar skilled nursing facilities, including without limitation, the following:

(i) to maintain the standard of care for the residents of the Project at all times at a level necessary to ensure quality care for the residents of the Project in accordance with customary and prudent industry standards;

(ii) to operate the Project in a prudent manner and in substantial compliance with applicable laws and regulations relating thereto and cause all permits, Reimbursement Contracts, and any other agreements necessary for the use and operation of the Project or, if applicable, as may be necessary for participation in reimbursement programs (if any) to remain in effect without reduction in the number of licensed units authorized for applicable reimbursement programs;

(iii) to maintain sufficient inventory and equipment of types and quantities at the Project to enable each Borrower and Operator to perform operations of the Projects adequately;

(iv) to keep all improvements and equipment located on or used or useful in connection with each Project in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needed and proper repairs, renewals, replacements, additions, and improvements thereto to keep the same in good operating condition;

(v) to maintain sufficient cash in the operating accounts of the Projects in order to satisfy the working capital needs of the Projects;

(vi) to keep all required permits current and in full force and effect; and

(vii) to cause all current Operator Permits to be transferred to Operator by the applicable Governmental Authorities on or before August 31, 2013, with copies of such licenses delivered promptly to Agent.

(ee) Periodic Surveys. Borrowers shall furnish or cause each Operator to furnish to Agent, within twenty (20) days of receipt, a copy of any licensing agency survey or report and any statement of deficiencies and/or any other report indicating that any action is pending or being considered to downgrade any Project to a substandard category, and within the time period required by the particular agency for furnishing a plan of correction also furnish or cause to be furnished to Agent a copy of the plan of correction generated from such survey or report for any Project, and correct or cause to be corrected any deficiency, the curing of which is a condition of continued licensure or for full participation in a reimbursement program pursuant to any Reimbursement Contract for existing residents or for new residents to be admitted with coverage, by the date required for cure by such agency (plus extensions granted by such agency).

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(ff) Fraud and Abuse.

(i) Anti-Kickback Law. After consultation with counsel concerning the federal anti-kickback law (42 U.S.C.A. SEC. 1320a-7b(b)), neither Borrowers nor their agents shall offer or give any remuneration or thing of value to any person to encourage referral to the Projects nor will Borrowers or their agents solicit or receive any remuneration or thing of value in exchange for Borrowers’ agreement to make referrals or to purchase goods or services for the Projects.

(ii) Relationships. Except for indirect ownership interests in any Borrower as a result of ownership of publicly traded shares of stock of Guarantor, Borrowers will not allow a physician or other healthcare practitioner to have an ownership interest in, or financial relationship with, a Borrower or any Project.

ARTICLE 11

CASUALTIES AND CONDEMNATION

11.1 Agent’s Election to Apply Proceeds on Indebtedness.

(a) Subject to the provisions of Section 11.1(b) below, the Lenders may elect to collect, retain and apply upon the indebtedness of Borrowers under this Agreement or any of the other Loan Documents all proceeds of insurance or condemnation (individually and collectively referred to as “Proceeds”) after deduction of all expenses of collection and settlement, including reasonable attorneys’ and adjusters’ fees and charges. Any proceeds remaining after repayment of the indebtedness under the Loan Documents shall be paid by Agent to Borrowers.

(b) Notwithstanding anything in Section 11.1(a) to the contrary, in the event of any casualty to any Improvements or any condemnation of part of any Project, Agent and the Lenders agree to make available the Proceeds to restoration of such Improvements if (i) no Event of Default exists, (ii) all Proceeds are deposited with Agent, (iii) in Agent’s reasonable judgment, the amount of Proceeds available for restoration of the applicable Improvements is sufficient to pay the full and complete costs of such restoration, (iv) if the cost of restoration exceeds ten percent (10%) of the Loan Amount, in Agent’s sole determination after completion of restoration the Loan Amount will not exceed (A) 60% of the aggregate “leased fee” value of the Projects, and (B) 75% of the “leased fee” value of the applicable Project, (v) in Agent’s reasonable determination, the applicable Project can be restored to an architecturally and economically viable project in compliance with applicable Laws, (vi) each Guarantor reaffirms its Guaranty in writing, and (vii) in Agent’s reasonable determination, such restoration is likely to be completed no later than three months prior to the Final Maturity Date.

11.2 Borrowers’ Obligation to Rebuild and Use of Proceeds Therefor.

In case the Lenders do not elect to apply or does not have the right to apply the Proceeds to the indebtedness, as provided in Section 11.1 above, Borrower shall:

(a) Proceed with diligence to make settlement with insurers or the appropriate governmental authorities and cause the Proceeds to be deposited with Agent;

(b) In the event of any delay in making settlement with insurers or the appropriate governmental authorities or effecting collection of the Proceeds, deposit with Agent the full amount required to complete construction as aforesaid;

(c) In the event the Proceeds are insufficient to assure the Lenders that the Loan will be in balance, promptly deposit with Agent any amount necessary to place the Loan in balance; and

(d) Promptly proceed with the assumption of construction of such Improvements, including the repair of all damage resulting from such fire, condemnation or other cause and restoration to its former condition.

Any request by Borrowers for a disbursement by Agent of Proceeds and funds deposited by Borrowers shall be treated by Agent as if such request were for an advance of the Loan hereunder, and the disbursement thereof shall be conditioned upon Borrower’s compliance with and satisfaction of the same conditions precedent as would be applicable under this Agreement for an advance of the Loan.

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ARTICLE 12

ASSIGNMENTS BY BORROWERS

12.1 Prohibition of Assignments and Transfers by Borrowers; Partial Releases.

(a) Borrowers shall not assign or attempt to assign its rights under this Agreement and any purported assignment shall be void. Without the prior written consent of Agent, in Agent’s sole discretion, Borrowers shall not suffer or permit the sale, transfer, lease (other than the Operating Leases and in the ordinary course of business pursuant to residency agreements and without material deviation from the pro forma rents previously provided by Borrowers to Agent), conveyance, alienation, pledge, assignment, encumbrance, hypothecation or other disposition (a “Transfer”) of (i) all or any portion of any Project or any portion of any other security for the Loan, (ii) all or any portion of any Borrower’s right, title and interest in and to any Project or any portion of any other security for the Loan, or (iii) any interest in Guarantor or any Borrower or any interest in any entity which holds an interest in, or directly or indirectly controls, any Borrower. Notwithstanding the provisions hereof to the contrary, Agent and the Lenders acknowledge that CHP Holding owns one hundred percent (100%) of the direct ownership interests in each Borrower. Further, any third party or combination of third parties which is not under common Control with, or an Affiliate of, CHP Holding shall be permitted to acquire direct or indirect ownership interests in Guarantor or any Borrower so long as no Change of Control occurs.

(b) Notwithstanding the foregoing, Borrowers shall have the right at any time to obtain release of any Buyback Project from the liens securing the Notes upon making the respective payments set out hereunder and upon compliance with the following terms and conditions:

(i) No Event of Default or event which with the passing of time and/or giving of notice will constitute an Event of Default exists or will exist after giving effect to the proposed release;

(ii) Borrowers deliver to Agent for the benefit of the Lenders the Release Price for the applicable Project to be applied to the aggregate outstanding principal balance under the Notes;

(iii) Agent shall have received evidence satisfactory to Agent that (a) the aggregate “as-is” value of the remaining Projects (based upon the Appraisals delivered to Agent in connection with the closing of the Loan) on a fee simple basis exceeds the aggregate Loan Amount, after giving effect to any pay down of the Loan in connection with the applicable release, such that the Loan Amount shall be less than or equal to sixty percent (60%) of the aggregate “as is” value for the remaining Projects on a fee simple basis, and (b) the Rent Coverage for the remaining Projects is in excess of 1.40 to 1.00 for the six month period immediately preceding the applicable date of determination;

(iv) All partial release documents shall be prepared at the expense of Borrowers and shall be in form and substance satisfactory to Agent. Borrowers shall present to Agent a written request for a partial release, specifically identifying the Project to be released, together with an appropriate partial release document required to be paid in order to entitle Borrowers to such partial release, or escrow arrangements satisfactory to Agent for delivery of any partial release. Agent will execute, acknowledge and return the partial release documents to Borrowers within five (5) business days after Agent’s receipt of the above specified items. In connection with and at the time of the partial release of a Project, Agent shall further release the applicable Borrower from any and all liabilities and obligations under the Loan Documents which accrue from and after the date of such release, subject to any indemnity obligations that expressly survive payment in full; and

(v) Borrowers shall reimburse Agent for all out-of-pocket fees and costs, including, without limitation, reasonable legal fees in connection with the granting of such partial releases and shall provide Agent with any and all information reasonably requested by Agent with respect to the Project to be released.

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12.2 Prohibition of Transfers in Violation of ERISA.

In addition to the prohibitions set forth in Section 12.2 above, no Borrower shall assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or rights in this Agreement or in the Project, or attempt to do any of the foregoing or suffer any of the foregoing, nor shall any party owning a direct or indirect interest in Borrower assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose of any of its rights or interest (direct or indirect) in Borrower, attempt to do any of the foregoing or suffer any of the foregoing, if such action would cause the Loan, or the exercise of any of the Lenders’ rights in connection therewith, to constitute a prohibited transaction under ERISA or the Internal Revenue Code or otherwise result in any Lender being deemed in violation of any applicable provision of ERISA. Borrower agrees to indemnify and hold Agent and each Lender free and harmless from and against all losses, costs (including reasonable attorneys’ fees and expenses), taxes, damages (including consequential damages) and expenses Agent or any Lender may suffer by reason of the investigation, defense and settlement of claims and in obtaining any prohibited transaction exemption under ERISA necessary or desirable in Lender’s sole judgment or by reason of a breach of the foregoing prohibitions. The foregoing indemnification shall be a recourse obligation of Borrower and shall survive repayment of the Notes, notwithstanding any limitations on recourse contained herein or in any of the Loan Documents.

12.3 Successors and Assigns.

Subject to the foregoing restrictions on transfer and assignment contained in this Article 12, this Agreement shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and permitted assigns.

ARTICLE 13

TIME OF THE ESSENCE

13.1 Time is of the Essence.

Borrowers agree that time is of the essence under this Agreement.

ARTICLE 14

EVENTS OF DEFAULT

14.1 Events of Default.

The occurrence of any one or more of the following shall constitute an “Event of Default” as said term is used herein:

(a) Failure of Borrowers (i) (x) to pay the aggregate outstanding balance under the Notes on the Final Maturity Date, (y) to make any scheduled payment of principal (other than that required on the Final Maturity Date) or interest within ten (10) days after the date when due or (z) to observe or perform any of the other covenants or conditions by any Borrower to be performed under the terms of this Agreement or any other Loan Document concerning the payment of money, for a period of ten (10) days after written notice from Lender that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Lender, to observe or perform any non-monetary covenant or condition contained in this Agreement or any other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure and cannot reasonably be cured within said thirty (30) day period, then Borrowers shall have an additional sixty (60) days, so long as Borrowers have commenced and is diligently pursuing a cure of the applicable default, and provided further that if a different notice or grace period is specified under any other paragraph of this Article 14 with respect to a particular breach, the specific provision shall control. No cure period shall be afforded to Borrowers’ failure to observe or perform any covenants or conditions contained in Section 10.1(m), (p), (r), (w), (x), (z) or (bb).

(b) Any Transfer or other disposition in violation of Sections 12.2 or 12.3.

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(c) If any warranty, representation, statement, report or certificate made now or hereafter by any Borrower or Guarantor is materially untrue or materially incorrect at the time made or delivered, provided that if such breach is reasonably susceptible of cure, then no Event of Default shall exist so long as Borrowers cure said breach (i) within the notice and cure period provided in (a)(i) above for a breach that can be cured by the payment of money or (ii) within the notice and cure period provided in (a)(ii) above for any other breach.

(d) Any Borrower or Guarantor shall commence a voluntary case concerning any Borrower or Guarantor under Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor thereto or any other present or future bankruptcy or insolvency statute (the “Bankruptcy Code”); or an involuntary proceeding is commenced against any Borrower or Guarantor under the Bankruptcy Code and relief is ordered against any Borrower or Guarantor, or the petition is controverted but not dismissed or stayed within sixty (60) days after the commencement of the case, or a custodian (as defined in the Bankruptcy Code) is appointed for or takes charge of all or substantially all of the property of any Borrower or Guarantor; or any Borrower or Guarantor commences any other proceedings under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar Law of any jurisdiction whether now or hereafter in effect relating to any Borrower or Guarantor; or there is commenced against any Borrower or Guarantor any such proceeding which remains undismissed or unstayed for a period of ninety (90) days; or any Borrower or Guarantor fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or any Borrower or Guarantor by any act or failure to act indicates its consent to, approval of, or acquiescence in any such case or proceeding or the appointment of any custodian or the like of or for it for any substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of ninety (90) days.

(e) Any Borrower or Guarantor shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or trustee or liquidator of all of its property or the major part thereof or if all or a substantial part of the assets of any Borrower or Guarantor are attached, seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors.

(f) If any Borrower is enjoined, restrained or in any way prevented by any court order from operating any Project.

(g) One or more final, unappealable judgments are entered against any Borrower in amounts aggregating in excess of $50,000, and said judgments are not paid, stayed or bonded over within thirty (30) days after entry.

(h) If any Borrower shall fail to pay any debt owed by it or is in default under any agreement with Lender or any other party which failure to pay or default would have a Material Adverse Change to Borrowers, the Projects or Borrowers’ ability to perform their obligations under this Agreement, and such failure or default continues after any applicable grace or cure period specified in the instrument or agreement relating thereto.

(i) If a Material Adverse Change occurs with respect to any Borrower, any Project or Guarantor.

(j) The occurrence of an event of default by any Borrower under any Lease with the Operator beyond any applicable notice and/or cure period.

(k) The occurrence of a payment or other material event of default by any Operator under any Lease with the Operator beyond any applicable notice and/or cure period, and the continuation of the same for a period of thirty (30) days. Prior to the expiration of such thirty (30) day period, Borrowers shall present to Lender a course of action to remedy such default (such as waiver, modification or termination of the lease and replacement of the tenant) and obtain Lender’s approval thereto. So long as Borrowers follow the approved course of action and meet any deadlines in connection therewith, such default shall be deemed cured.

(l) The occurrence of any other event or circumstance denominated as an Event of Default herein or under any of the other Loan Documents and the expiration of any applicable grace or cure periods, if any, specified for such Event of Default herein or therein, as the case may be.

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(m) The failure of Borrowers to correct or to cause its Operator to correct, within the time deadlines set by any applicable Medicare, Medicaid or licensing agency, any deficiency which would result in the following actions by such agency with respect to any Project:

(i) a termination of any Reimbursement Contract or any permit; or

(ii) a ban on new admissions generally or, if applicable, on admission of patients otherwise qualifying for Medicare or Medicaid coverage;

(n) The assessment against any Borrower, Operator, or any Project of any fines or penalties by any state or any Medicare, Medicaid, health or licensing agency having jurisdiction over such Persons or the Project in excess of $25,000, which are not paid or discharged within thirty (30) days following such assessment; provided, however, Borrower shall not be in default if Borrower or Operator is in good faith disputing such assessment.

ARTICLE 15

LENDERS’ REMEDIES IN EVENT OF DEFAULT

15.1 Remedies Conferred Upon Lenders.

Upon the occurrence of any Event of Default that is continuing, Agent may, and at the request of Required Lenders shall, pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other:

(a) Take possession of the Projects and do anything which is necessary or appropriate in its sole judgment to fulfill the obligations of Borrowers under this Agreement and the other Loan Documents, including either the right to avail itself of and procure performance of existing contracts or let any contracts with the same contractors or others. Without restricting the generality of the foregoing and for the purposes aforesaid, each Borrower hereby appoints and constitutes Agent its lawful attorney-in-fact with full power of substitution in the Projects to pay, settle or compromise all existing bills and claims, which may be liens or security interests, or to avoid such bills and claims becoming liens against the Projects; to execute all applications and certificates in the name of each Borrower prosecute and defend all actions or proceedings in connection with the Improvements or the Projects; to take action and require such performance as it deems necessary under any of the bonds to be furnished hereunder and to make settlements and compromises with the surety or sureties thereunder, and in connection therewith, to execute instruments of release and satisfaction; and to do any and every act which any Borrower might do in its own behalf; it being understood and agreed that this power of attorney shall be a power coupled with an interest and cannot be revoked;

(b) Declare the Notes to be immediately due and payable;

(c) Use and apply any monies or letters of credit deposited by any Borrower with Agent, regardless of the purposes for which the same was deposited, to cure any such default or to apply on account of any indebtedness under this Agreement which is due and owing to Lenders;

(d) Exercise or pursue any other remedy or cause of action permitted under this Agreement or any other Loan Documents, or conferred upon Lenders by operation of Law.

Notwithstanding the foregoing, upon the occurrence of any Event of Default under Section 14(d), all amounts evidenced by the Notes shall automatically become due and payable, without any presentment, demand, protest or notice of any kind to Borrowers.

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ARTICLE 16

GENERAL PROVISIONS

16.1 Captions.

The captions and headings of various Articles, Sections and subsections of this Agreement and Exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

16.2 Modification; Waiver.

No modification, waiver, amendment or discharge of this Agreement or any other Loan Document shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment or discharge is sought.

16.3 GOVERNING LAW.

EXCEPT AS SET FORTH IN THE MORTGAGE, ALL OF THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAWS.

16.4 Acquiescence Not to Constitute Waiver of Lenders’ Requirements.

Each and every covenant and condition for the benefit of the Lenders contained in this Agreement may be waived by the Lenders, provided, however, that to the extent that the Lenders may have acquiesced in any noncompliance with any construction or nonconstruction conditions precedent to the Opening of the Loan or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute a waiver by the Lenders of such requirements with respect to any future disbursements of Loan proceeds.

16.5 Disclaimer by Lenders.

This Agreement is made for the sole benefit of Borrowers and the Lenders, and no other person or persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Agent or the Lenders pursuant to this Agreement. Neither Agent nor any Lender shall be liable for any debts or claims accruing in favor of any such parties against any Borrower or others or against the Project. The Lenders, by making the Loan or taking any action pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with any Borrower or any fiduciary of Borrower.

16.6 Partial Invalidity; Severability.

If any of the provisions of this Agreement, or the application thereof to any person, party or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

16.7 Definitions Include Amendments.

Definitions contained in this Agreement which identify documents, including, but not limited to, the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments and supplements thereto entered into from time to time to satisfy the requirements of this Agreement or otherwise with the consent of Agent (and, to the extent applicable, the Required Lenders). Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement.

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16.8 Execution in Counterparts.

This Agreement may be executed in any number of counterparts and by different parties hereto 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 agreement.

16.9 Entire Agreement.

This Agreement, taken together with all of the other Loan Documents and all certificates and other documents delivered by Borrowers to the Lenders, embody the entire agreement and supersede all prior agreements, written or oral, relating to the subject matter hereof.

16.10 Waiver of Damages.

In no event shall Agent or any Lender be liable to any Borrower for punitive, exemplary or consequential damages, including, without limitation, lost profits, whatever the nature of a breach by Agent or any Lender of its obligations under this Agreement or any of the Loan Documents, and each Borrower for itself and Guarantor waive all claims for punitive, exemplary or consequential damages.

16.11 Claims Against Lenders.

Neither Agent nor any Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim of any Borrower shall have been given to Agent within three (3) months after such Borrower first had knowledge of the occurrence of the event which such Borrower alleges gave rise to such claim and such person does not remedy or cure the default, if any there be, promptly thereafter. Each Borrower waives any claim, set-off or defense against Agent or any Lender arising by reason of any alleged default by Agent or any Lender as to which such Borrower does not give such notice timely as aforesaid. Each Borrower acknowledges that such waiver is or may be essential to the Lenders’ ability to enforce its remedies without delay and that such waiver therefore constitutes a substantial part of the bargain between the Lenders and Borrowers with regard to the Loan.

16.12 Jurisdiction.

TO THE GREATEST EXTENT PERMITTED BY LAW, EACH BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY THE LENDERS. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A “PROCEEDING”), EACH BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF CLEVELAND, COUNTY OF CUYAHOGA, STATE OF OHIO, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS AGREEMENT SHALL PRECLUDE AGENT ON BEHALF OF THE LENDERS FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. EACH BORROWER FURTHER AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY STATE OF OHIO OR UNITED STATES COURT SITTING IN THE CITY OF CLEVELAND, COUNTY OF CUYAHOGA, STATE OF OHIO MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF A BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

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16.13 Set-Offs.

After the occurrence and during the continuance of an Event of Default, each Borrower hereby irrevocably authorizes and directs each Lender from time to time to charge such Borrower’s accounts and deposits with such Lender (or its Affiliates), and to pay over to such Lender an amount equal to any amounts from time to time due and payable to such Lender hereunder, under the Notes or under any other Loan Document. Each Borrower hereby grants to Agent for the benefit of the Lenders a security interest in and to all such accounts and deposits maintained by such Borrower with each Lender (or its Affiliates).

16.14 Authorized Representative.

Borrowers hereby appoint Steven M. Wortman, Senior Vice President of Borrowers, as their “Authorized Representative” for purposes of dealing with Agent on behalf of Borrowers in respect of any and all matters in connection with this Agreement, the other Loan Documents, and the Loan. The Authorized Representative shall have the power, in his discretion, to give and receive all notices, monies, approvals, and other documents and instruments, and to take any other action on behalf of Borrowers. All actions by the Authorized Representative shall be final and binding on Borrowers. The Lenders may rely on the authority given to the Authorized Representative until actual receipt by Agent on behalf the Lenders of a duly authorized resolution substituting a different person as the Authorized Representative. No more than one person shall serve as Authorized Representative at any given time.

ARTICLE 17

NOTICES

Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

If to Borrowers:
	c/o CNL Healthcare Properties, Inc. 450 South Orange Avenue Orlando, Florida 32801 Attention: Joseph T. Johnson, Senior Vice President and Chief Financial Officer Attention: Holly J. Greer, Esq., Senior Vice President and General Counsel Telephone:  (407) 540-7500 Facsimile:   (407) 540-2544
With a courtesy copy to:
	Lowndes, Drosdick, Doster, Kantor & Reed, P.A. 215 North Eola Drive Orlando, Florida 32801 Attention: Peter L. Lopez, Esq. Telephone:  (407) 843-4600 Facsimile:   (407) 843-4444

SECURED LOAN AGREEMENT Page 38

If to Agent:
	KeyBank National Association Real Estate Capital-Healthcare Mailcode: OH-01-51-0311 4910 Tiedeman Road, 3rd Floor Brooklyn, Ohio 44144 Attention: Amy MacLearie, Closer Telephone:  (216) 813-6935 Facsimile:   (216) 357-6383
With copies to:
	Synovus Bank 800 Shades Creek Parkway, Suite 325 Birmingham, Alabama 35209 Telephone:  (205) 868-4752 Facsimile:   (205) 868-
	Gail Livingston Mills, Esq. Burr & Forman LLP 420 North 20th Street, Suite 3400 Birmingham, Alabama 35203 Telephone:  (205) 458-5300 Facsimile:   (205) 244-5681
	Alfred G. Kyle, Esq. Bracewell & Giuliani LLP 1445 Ross Avenue, Suite 3800 Dallas, Texas 75202 Telephone:  (214) 758-1660 Facsimile:   (214) 758-8360 And, if required under any applicable intercreditor agreement: Capital Finance, LLC 1422 Clarkview Road Baltimore, MD 21209 Attention: Account Manager for Perennial Transaction

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

ARTICLE 18

RESERVED

ARTICLE 19

ASSIGNMENTS AND PARTICIPATIONS

19.1 Assignments and Participations.

(a) Each Lender shall have the right to assign, transfer, sell, negotiate, pledge or otherwise hypothecate this Agreement and any of its rights and security hereunder and under the other Loan Documents to any other Eligible Assignee with the prior written consent of the Agent and with the prior written consent of Borrower, which consents by the Agent and the Borrowers shall not be unreasonably withheld, conditioned or delayed (provided that no consent of Borrower shall be required if the Eligible Assignee is also a Lender as of the date

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hereof or if an Event of Default then exists) and no consent of the Agent shall be required if the Eligible Assignee is also a Lender; provided, however, that (i) the parties to each such assignment shall execute and deliver to Agent, for its approval and acceptance, an Assignment and Assumption Agreement substantially in the form of Exhibit H attached hereto (the “Assignment and Assumption”), (ii) each such assignment shall be of a constant, and not a varying, percentage of the assigning Lender’s rights and obligations under this Agreement, (iii) if the potential assignee is not already a Lender hereunder, at least ten (10) days prior to the date of the assignment, the potential assignee shall deliver to Agent all information reasonably necessary for Agent to successfully complete the Agent’s Patriot Act Customer Identification Process and OFAC Review Process, (iv) unless the Agent and, so long as no Event of Default exists, Borrowers otherwise consent, the aggregate amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment shall in no event be less than Five Million Dollars ($5,000,000), (v) the Agent shall receive from the assigning Lender a processing fee of Three Thousand Five Hundred Dollars ($3,500), and (vi) if the assignment is less than the assigning Lender’s entire interest in the Loan, the assigning Lender must retain at least a Ten Million Dollar ($10,000,000.00) interest in the Loan. The Agent may designate any Eligible Assignee accepting an assignment of a specified portion of the Loan to be a Co-Agent, an “Arranger” or similar title, but such designation shall not confer on such Assignee the rights or duties of the Agent. Upon such execution, delivery, approval and acceptance, and upon the effective date specified in the applicable Assignment and Assumption, (a) the Eligible Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, have the rights and obligations of a Lender hereunder and under the other Loan Documents, and Borrowers hereby agree that all of the rights and remedies of Lenders in connection with the interest so assigned shall be enforceable against Borrowers by an Eligible Assignee with the same force and effect and to the same extent as the same would have been enforceable but for such assignment, and (b) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights and be released from its obligations hereunder and thereunder.

(b) By executing and delivering an Assignment and Assumption, the assigning Lender thereunder and the Eligible Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) except as provided in such Assignment and Assumption, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document or any other instrument or document furnished in connection therewith; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance or observance by each Borrower of any of its obligations under any Loan Document or any other instrument or document furnished in connection therewith; (iii) such Eligible Assignee confirms that it has received a copy of this Agreement together with such financial statements, Loan Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into the Assignment and Assumption and to become a Lender hereunder; (iv) such Eligible Assignee will, independently and without reliance upon Agent, the assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such Eligible Assignee appoints and authorizes the Agent to take such action as the Agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto; and (vi) such Eligible Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(c) Agent shall maintain a copy of each Assignment and Assumption delivered to and accepted by it and shall record in its records the names and address of each Lender and the Commitment of, and Percentage of the Loan owing to, such Lender from time to time. Borrowers, the Agent and Lenders may treat each entity whose name is so recorded as a Lender hereunder for all purposes of this Agreement.

(d) Upon receipt of an Assignment and Assumption executed by an assigning Lender and an Eligible Assignee, Agent shall, if such Assignment and Assumption has been properly completed and consented to if required herein, accept such Assignment and Assumption, and record the information contained therein in its records, and the Agent shall use its best efforts to give prompt notice thereof to Borrowers (provided that neither the Agent nor the Lenders shall be liable for any failure to give such notice).

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(e) Borrowers shall, at no cost or expense to Borrowers, use reasonable efforts to cooperate with Agent and each Lender in connection with the assignment of interests under this Agreement or the sale of participations herein.

(f) Anything in this Agreement to the contrary notwithstanding, and without the need to comply with any of the formal or procedural requirements of this Agreement, including this Section, any Lender may at any time and from time to time pledge and assign all or any portion of its rights under all or any of the Loan Documents to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from its obligations hereunder. To facilitate any such pledge or assignment, the Agent shall, at the request of such Lender, enter into a letter agreement with the Federal Reserve Bank in, or substantially in, the form of the exhibit to Appendix C to the Federal Reserve Bank of New York Operating Circular No. 12.

(g) Anything in this Agreement to the contrary notwithstanding, any Lender may assign all or any portion of its rights and obligations under this Agreement to another branch or Affiliate of such Lender without first obtaining the approval of any Agent or the Borrowers, provided that (i) such Lender remains liable hereunder unless the Borrowers and Agent shall otherwise agree, (ii) at the time of such assignment such Lender is not a Defaulting Lender, (iii) such Lender gives the Agent and Borrower at least fifteen (15) days prior written notice of any such assignment; (iv) the parties to each such assignment execute and deliver to Agent an Assignment and Assumption, and (v) the Agent receives from the assigning Lender a processing fee of One Thousand Five Hundred Dollars ($1,500).

(h) Each Lender shall have the right, without the consent of the Borrowers, to sell participations to one or more Eligible Assignees in or to all or a portion of its rights and obligations under the Loan and the Loan Documents; provided, however, that (i) such Lender’s obligations under this Agreement (including without limitation its Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations (iii) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and with regard to any and all payments to be made under this Agreement and (iv) the holder of any such participation shall not be entitled to voting rights under this Agreement or the other Loan Documents (but such holder may contract with the Lender selling such Eligible Assignee its interest in such Lender’s share of the Loan as to voting of such Lender’s interest under Section 20.6(b) [but not under any other section of this Agreement], provided that any such agreement by a Lender shall bind only such Lender alone and not Borrowers, the other Lenders or the Agent).

(i) No Eligible Assignee of any rights and obligations under this Agreement shall be permitted to subassign such rights and obligations. No participant in any rights and obligations under this Agreement shall be permitted to sell subparticipations of such rights and obligations.

(j) Borrowers acknowledge and agree that Lenders may provide to any Eligible Assignee or participant originals or copies of this Agreement, any other Loan Document and any other documents, instruments, certificates, opinions, insurance policies, letters of credit, reports, requisitions and other materials and information of every nature or description, and may communicate all oral information, at any time submitted by or on behalf of Borrowers or received by any Lender in connection with the Loan or with respect to Borrowers, provided that prior to any such delivery or communication, such Eligible Assignees or participants shall agree to preserve the confidentiality of any of the foregoing to the same extent that such Lender agreed to preserve such confidentiality. In order to facilitate assignments to Eligible Assignees and sales to Eligible Assignees, Borrowers shall execute such further documents, instruments or agreements as Lenders may reasonably require; provided, that no Borrower shall be required (i) to execute any document or agreement which would materially decrease its rights, or materially increase its obligations, relative to those set forth in this Agreement or any of the other Loan Documents (including financial obligations, personal recourse, representations and warranties and reporting requirements), or (ii) to expend more than incidental sums of money or incidental administrative time for which it does not receive reasonable reimbursement in order to comply with any requests or requirements of any Lender in connection with such assignment or sale arrangement. In addition, Borrowers agrees to cooperate fully with Lenders in the exercise of Lenders’ rights pursuant to this Section, including providing such information and documentation regarding Borrower as any Lender or any potential Eligible Assignee or participant may reasonably request and to meet with potential Eligible Assignees.

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19.2 Several Liability.

Anything in this Agreement contained to the contrary notwithstanding, the obligations of each Lender to Borrowers under this Agreement are several and not joint and several; each Lender shall only be obligated to fund its Percentage of each disbursement to be made hereunder up to the amount of its Commitment. During any time, and only during such time, as Agent is the sole Lender and has not assigned any portion or portions of its interest in the Loan to another Lender pursuant to an Assignment and Assumption Agreement, Agent in its individual capacity shall be liable for all of the obligations of the Lender under this Agreement and the other Loan Documents. From and after the date that Agent as the sole Lender assigns any portion or portions of its interest in the Loan to another Lender pursuant to an Assignment and Assumption Agreement, then Agent shall act as the administrative agent on behalf of itself as a Lender and the other Lenders.

ARTICLE 20

AGENT

20.1 Appointment.

KeyBank National Association is hereby appointed as Agent hereunder and under each other Loan Document, and each Lender hereby irrevocably authorizes the Agent to act as agent for such Lender and to take such actions as such Lender is obligated or entitled to take under the provisions of this Agreement and the other Loan Documents. Agent agrees to act as such upon the express conditions contained in this Article in substantially the same manner that it would act in dealing with a loan held for its own account. Agent shall not have a fiduciary relationship with respect to any Lender by reason of this Agreement.

The provisions of this Article are solely for the benefit of the Agent and the Lenders, and Borrowers shall not have any rights to rely on or enforce any of the provisions hereof except as provided in Section 20.2 below. In performing its functions and duties under this Agreement, the Agent shall act solely as agent of Lender and does not assume, and shall not be deemed to have assumed, any obligations toward or relationship of agency or trust with or for the Borrowers.

20.2 Reliance on Agent.

All acts of and communications by the Agent, as agent for the Lenders, shall be deemed legally conclusive and binding; and Borrower or any third party (including any court) shall rely on any and all communications or acts of the Agent with respect to the exercise of any rights or the granting of any consent, waiver or approval on behalf of a Lender in all circumstances where an action by such Lender is required or permitted pursuant to this Agreement or the provisions of any other Loan Document or by applicable law without the right or necessity of making any inquiry of any individual Lender as to the authority of Agent with respect to such matter. In no event shall any of the foregoing limit the rights or obligations of any Lender with respect to any other Lender pursuant to this Article 20.

20.3 Powers.

The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto or are otherwise necessary or desirable in connection with the administration of the Loan, and may exercise all other powers of Lenders as are not made subject to the consent of the Required Lenders pursuant to Section 20.6(a) or to the consent of all Lenders pursuant to Section 20.6(b). Without limiting the foregoing, the Agent may consent to or execute easements, plats, dedications, release of minor portions of the collateral and similar documents. The Agent shall not be considered, or be deemed, a separate agent of the Lenders hereunder, but is, and shall be deemed, acting in its contractual capacity as Agent, exercising such rights and powers under the Loan Documents as are specifically delegated to the Agent or Agent is otherwise entitled to take hereunder. Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action except any action specifically provided by the Loan Documents to be taken by the Agent.

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20.4 Disbursements.

(a) At least one (1) Business Day (by 11:00 a.m. Cleveland time) prior to the date the Loan is to be disbursed hereunder pursuant to this Agreement (or at least two (2) LIBOR Business Days [by 11:00 a.m. Cleveland time] for such disbursement to be made at the Adjusted LIBOR Rate), the Agent shall notify each Lender of the proposed disbursement. Each Lender shall make available to Agent (or the funding Lender or entity designated by the Agent), the amount of such Lender’s Percentage of such disbursement (with respect to such Lender, such amount being referred to herein as an “Advance”) in immediately available funds not later than 11:00 a.m. (Cleveland time) on the date such disbursement is to be made (such date being referred to herein as a “Funding Date”). Unless the Agent shall have been notified by any Lender prior to such time for funding in respect of any Advance that such Lender does not intend to make available to the Agent such Lender’s Advance, the Agent may assume that such Lender has made such amount available to the Agent and the Agent, in its sole discretion, may, but shall not be obligated to, make available to Borrowers a corresponding amount. If such corresponding amount is not in fact made available to the Agent by such Lender on or prior to the respective Funding Date, such Lender agrees to pay and Borrowers agree to repay to Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to Borrowers until the date such amount is paid or repaid to Agent, at (A) in the case of such Lender, the Federal Funds Effective Rate, and (B) in the case of Borrowers, the interest rate applicable at the time to a disbursement made on such Funding Date. If such Lender shall pay to Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance, and if both such Lender and Borrowers shall have paid and repaid, respectively, such corresponding amount, Agent shall promptly return to Borrowers such corresponding amount in same day funds.

(b) Requests by the Agent for funding by the Lenders of disbursements of the Loan will be made by facsimile. Each Lender shall make its Advance available to the Agent in dollars and in immediately available funds to such Lender and account as the Agent may designate, not later than Noon (Cleveland time) on the Funding Date. Nothing in this Section 20.4 shall be deemed to relieve any Lender of its obligation hereunder to make any Advance on any Funding Date, nor shall any Lender be responsible for the failure of any other Lender to perform its obligations to make any Advance hereunder, and the Commitment of any Lender shall not be increased or decreased as a result of the failure by any other Lender to perform its obligation to make any Advances hereunder.

20.5 Distribution and Apportionment of Payments.

(a) Subject to Section 20.5(b), payments actually received by Agent for the account of the Lenders shall be paid to them promptly after receipt thereof by Agent, but in any event within one (1) Business Day, provided that, if any such payments are not distributed to the Lenders within one (1) Business Day after Agent’s receipt thereof, Agent shall pay to such Lenders interest thereon, at the lesser of (i) the Federal Funds Effective Rate and (ii) if the applicable payment represents repayment of a portion of the principal of the Loan, the rate of interest applicable to such portion of the Loan, from the date of receipt of such funds by Agent until such funds are paid in immediately available funds to such Lenders provided such funds are received by Agent not later than 11:00 A.M. (Cleveland time) on the date of receipt. All payments of principal and interest in respect of the Loan, all payments of the fees described in this Agreement (but not in any separate fee letter except to the extent expressly set forth therein), and all payments in respect of any other obligations of Borrower under the Loan Documents shall be allocated among such of Lenders as are entitled thereto, in proportion of their respective Percentages or otherwise as provided herein in the other Loan Documents, as the case may be. The Agent shall distribute to each Lender at its primary address set forth herein or in its Assignment and Assumption, or at such other address as a Lender may request in writing, such funds as it may be entitled to receive, provided that the Agent shall in any event not be bound to inquire into or determine the validity, scope or priority of any interest or entitlement of any Lender and may suspend all payments and seek appropriate relief (including without limitation instructions from the Required Lenders, or all Lenders, as applicable, or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby. The order of priority herein is set forth solely to determine the rights and priorities of the Lenders as among themselves and may at any time or from time to time be changed by the Lenders as they may elect, in writing, without necessity of notice to or consent of or approval by Borrowers.

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(b) If a Lender (a “Defaulting Lender”) defaults in making any Advance or paying any other sum payable by it hereunder, such sum together with interest thereon at the Default Rate from the date such amount was due until repaid (such sum and interest thereon as aforesaid referred to, collectively, as the “Lender Default Obligation”) shall be payable by the Defaulting Lender (i) to any Lender(s) which elect, at their sole option (and with no obligation to do so), to fund the amount which the Defaulting Lender failed to fund or (ii) to Agent or any other Lender which under the terms of this Agreement is entitled to reimbursement from the Defaulting Lender for the amounts advanced or expended. Notwithstanding any provision hereof to the contrary, until such time as a Defaulting Lender has repaid the Lender Default Obligation in full, all amounts which would otherwise be distributed to the Defaulting Lender shall instead be applied first to repay the Lender Default Obligation (to be applied first to interest at the Default Rate and then to principal) until the Lender Default Obligation has been repaid in full (whether by such application or by cure by the Defaulting Lender), whereupon such Lender shall no longer be a Defaulting Lender. Any interest collected from Borrowers on account of principal advanced by any Lender(s) on behalf of a Defaulting Lender shall be paid to the Lender(s) who made such advance and shall be credited against the Defaulting Lender’s obligation to pay interest on the amount advanced at the Default Rate. If no other Lender makes an advance a Defaulting Lender failed to fund, a portion of the indebtedness of Borrowers to the Defaulting Lender equal to the Lender Default Obligation shall be subordinated to the indebtedness of Borrowers to all other Lenders and shall be paid only after the indebtedness of Borrowers to all other Lenders is paid. The provisions of this Section shall apply and be effective regardless of whether an Event of Default occurs and is then continuing, and notwithstanding (i) any other provision of this Agreement to the contrary or (ii) any instruction of Borrowers as to their desired application of payments. No Defaulting Lender shall have the right to vote on matters which are subject to the consent or approval of Required Lenders or all Lenders and while any Lender is a Defaulting Lender the requisite percentage of Lenders which constitutes the Required Lenders shall be calculated exclusive of the Percentage of the Defaulting Lender. The Agent shall be entitled to (i) withhold or set off, and to apply to the payment of the Lender Default Obligation any amounts to be paid to such Defaulting Lender under this Agreement, and (ii) bring an action or suit against such Defaulting Lender in a court of competent jurisdiction to recover the Lender Default Obligation and, to the extent such recovery would not fully compensate the Lenders for the Defaulting Lender’s breach of this Agreement, to collect damages. In addition, the Defaulting Lender shall indemnify, defend and hold Agent and each of the other Lenders harmless from and against any and all claims, actions, liabilities, damages, costs and expenses (including attorneys’ fees and expenses), plus interest thereon at the Default Rate, for funds advanced by Agent or any other Lender on account of the Defaulting Lender or any other damages such persons may sustain or incur by reason of or as a direct consequence of the Defaulting Lender’s failure or refusal to abide by its obligations under this Agreement.

(c) At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Lender, each Lender that is not incorporated under the laws of the United States of America, or a state thereof, agrees that it will deliver to the Agent two duly completed copies of United States Internal Revenue Service Form W-8 BEN or W-8 ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement and the Note without deduction or withholding of any United States federal income taxes. Each Lender which so delivers a Form W-8 BEN or W-8 ECI further undertakes to deliver the Agent two additional copies of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Agent, in each case certifying that such Lender is entitled to receive payments under this Agreement and the Note without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender advises the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

20.6 Consents and Approvals.

(a) Each of the following shall require the approval or consent of the Required Lenders:

(i) The exercise of any rights and remedies under the Loan Documents following an Event of Default, provided that absent any direction from the Required Lenders, Agent may exercise any right or remedy under the Loan Documents as Agent may determine in good faith to be necessary or appropriate to protect the Lenders or the collateral securing the Loan;

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(ii) Appointment of a successor Agent;

(iii) Approval of Post-Default Plan (defined in Section 20.7(d)); and

(iv) Except as referred to in subsection (b) below, approval of any amendment or modification of this Agreement or any of the other Loan Documents, or issuance of any waiver of any material provision of this Agreement or any of the other Loan Documents;

(b) Each of the following shall require the approval or consent of all the Lenders:

(i) Extension of the Maturity Date (beyond any extension permitted herein) or forgiveness of all or any portion of the principal amount of the Loan or any accrued interest thereon, or any other amendment of this Agreement or the other Loan Documents which would reduce the interest rate options or the rate at which fees are calculated or forgive any loan fee, or extend the time of payment of any principal, interest or fees;

(ii) Reduction of the percentage specified in the definition of Required Lenders;

(iii) Increasing the amount of the Loan or any non-consenting Lender’s Commitment;

(iv) Release of any lien on any material collateral (except as Borrowers are entitled to under the Loan Documents); and

(v) Amendment of the provisions of this Section 20.6.

(c) In addition to the required consents or approvals referred to in subsections (a) and (b) above, the Agent may at any time request instructions from the Required Lenders with respect to any actions or approvals which, by the terms of this Agreement or of any of the Loan Documents, the Agent is permitted or required to take or to grant without instructions from any Lenders, and if such instructions are promptly requested, the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever for refraining from taking any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from the Required Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders or, where applicable, all Lenders. The Agent shall promptly notify each Lender at any time that the Required Lenders have instructed the Agent to act or refrain from acting pursuant hereto.

(d) Each Lender authorizes and directs the Agent to enter into the Loan Documents other than this Agreement for the benefit of the Lenders. Each Lender agrees that any action taken by the Agent at the direction or with the consent of the Required Lenders in accordance with the provisions of this Agreement or any other Loan Document, and the exercise by the Agent at the direction or with the consent of the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders, except for actions specifically requiring the approval of all Lenders. All communications from the Agent to the Lenders requesting Lenders’ determination, consent, approval or disapproval (i) shall be given in the form of a written notice to each Lender, (ii) shall be accompanied by a description of the matter or item as to which such determination, approval, consent or disapproval is requested, or shall advise each Lender where such matter or item may be inspected, or shall otherwise describe the matter or issue to be resolved, (iii) shall include, if reasonably requested by a Lender and to the extent not previously provided to such Lender, written materials and a summary of all oral information provided to the Agent by Borrower in respect of the matter or issue to be resolved, and (iv) shall include the Agent’s recommended course of action or determination in respect thereof. Each Lender shall reply promptly, but in any event within ten (10) Business Days after receipt of the request therefor from the Agent (the “Lender Reply Period”). Unless a Lender shall give written notice to the Agent that it objects to the recommendation or determination of the Agent (together with a written explanation of the

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reasons behind such objection) within the Lender Reply Period, such Lender shall be deemed to have approved of or consented to such recommendation or determination. With respect to decisions requiring the approval of the Required Lenders or all Lenders, the Agent shall upon receiving the required approval or consent follow the course of action or determination recommended to the Lenders by the Agent or such other course of action recommended by the Required Lenders.

20.7 Agency Provisions Relating to Collateral.

(a) The Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender, at any time and from time to time, to take any action with respect to any collateral for the Loan or any Loan Document which may be necessary to preserve and maintain such collateral or to perfect and maintain perfected the liens upon such collateral granted pursuant to this Agreement and the other Loan Documents.

(b) Except as provided in this Agreement, the Agent shall have no obligation whatsoever to any Lender or to any other person or entity to assure that any collateral exists or is owned by any Borrower or is cared for, protected or insured or has been encumbered or that the liens granted herein or in any of the other Loan Documents or pursuant hereto or thereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority.

(c) Should the Agent commence any proceeding or in any way seek to enforce the Agent’s or the Lenders’ rights or remedies under the Loan Documents, irrespective of whether as a result thereof the Agent shall acquire title to any collateral, each Lender, upon demand therefor from time to time, shall contribute its share (based on its Percentage) of the reasonable costs and/or expenses of any such enforcement or acquisition, including, but not limited to, fees of receivers or trustees, court costs, title company charges, filing and recording fees, appraisers’ fees and fees and expenses of attorneys to the extent not otherwise reimbursed by Borrowers. Without limiting the generality of the foregoing, each Lender shall contribute its share (based on its Percentage) of all reasonable costs and expenses incurred by the Agent (including reasonable attorneys’ fees and expenses) if the Agent employs counsel for advice or other representation (whether or not any suit has been or shall be filed) with respect to any collateral for the Loan or any part thereof, or any of the Loan Documents, or the attempt to enforce any security interest or lien on any collateral, or to enforce any rights of the Agent or the Lenders or any of Borrowers’ or any other party’s obligations under any of the Loan Documents, but not with respect to any dispute between Agent and any other Lender(s). It is understood and agreed that in the event the Agent determines it is necessary to engage counsel for Lender from and after the occurrence of a Default or Event of Default, said counsel shall be selected by the Agent and written notice of such selection, together with a copy of such counsel’s engagement letter and fee estimate, shall be delivered to the Lenders.

(d) In the event that all or any portion of the collateral for the Loan is acquired by the Agent as the result of the exercise of any remedies hereunder or under any other Loan Document, or is retained in satisfaction of all or any part of Borrowers’ obligations under the Loan Documents, title to any such collateral or any portion thereof shall be held in the name of the Agent or a nominee or subsidiary of Agent, as agent, for the ratable benefit of the Agent and the Lenders. The Agent shall prepare a recommended course of action for such collateral (the “Post-Default Plan”), which shall be subject to the approval of the Required Lenders. The Agent shall administer the collateral in accordance with the Post-Default Plan, and upon demand therefor from time to time, each Lender will contribute its share (based on its Percentage) of all reasonable costs and expenses incurred by the Agent pursuant to the Post-Default Plan, including without limitation, any operating losses and all necessary operating reserves. To the extent there is net operating income from such collateral, the Agent shall, in accordance with the Post-Default Plan, determine the amount and timing of distributions to Lenders. All such distributions shall be made to Lenders in accordance with their respective Percentages. In no event shall the provisions of this subsection or the Post-Default Plan require the Agent or any Lender to take an action which would cause such Lender to be in violation of any applicable regulatory requirements.

SECURED LOAN AGREEMENT Page 46

20.8 Lender Actions Against Borrower or the Collateral.

Each Lender agrees that it will not take any action, nor institute any actions or proceedings, against any Borrower or any other person hereunder or under any other Loan Documents with respect to exercising claims against such Borrower or rights in any collateral without the consent of the Required Lenders. With respect to any action by the Agent to enforce the rights and remedies of the Agent and Lenders with respect to such Borrower and any collateral in accordance with the terms of this Agreement, each Lender hereby consents to the jurisdiction of the court in which such action is maintained.

20.9 Assignment and Participation.

No Lender shall be permitted to assign or sell all or any portion of its rights and obligations under this Agreement to any Borrower or any Affiliate of any Borrower.

20.10 Ratable Sharing.

Subject to Sections 20.4 and 20.5, Lenders agree among themselves that (i) with respect to all amounts received by them which are applicable to the payment of the Loan, equitable adjustment will be made so that, in effect, all such amounts will be shared among them ratably in accordance with their Percentages, whether received by voluntary payment, by the exercise of the right of set-off or bankers’ lien, by counterclaim or cross action or by the enforcement of any or all of the Loan Documents or any collateral and (ii) if any of them shall by voluntary payment or by the exercise of any right of counterclaim, set-off, bankers’ lien or otherwise, receive payment of a proportion of the aggregate amount of the Loan held by it which is greater than its Percentage of the payments on account of the Loan, the one receiving such excess payment shall purchase, without recourse or warranty, an undivided interest and participation (which it shall be deemed to have done simultaneously upon the receipt of such payment) in such obligations owed to the others so that all such recoveries with respect to such obligations shall be applied ratably in accordance with their Percentages; provided, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to that party to the extent necessary to adjust for such recovery, but without interest except to the extent the purchasing party is required to pay interest in connection with such recovery. Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of Borrowers in the amount of such participation.

20.11 General Immunity.

Neither Agent nor any of its directors, officers, agents or employees shall be liable to Borrowers or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct. In the absence of gross negligence, the Agent shall not be liable for any apportionment or distribution of payments made by it in good faith pursuant to Section 20.5, and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due, but not made, shall be to recover from the recipients of such payments any payment in excess of the amount to which they are determined to have been entitled.

20.12 No Responsibility for Loan, Recitals, etc..

Neither Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any use of the Loan; (ii) the performance or observance of any of the covenants or agreements of any party to any Loan Document; (iii) the satisfaction of any condition specified in this Agreement, except receipt of items purporting to be the items required to be delivered to any Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith, provided that the foregoing shall not release Agent from liability for its gross negligence or willful misconduct.

SECURED LOAN AGREEMENT Page 47

20.13 Action on Instructions of Lenders.

The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by all the Lenders (or the Required Lenders, if such action may be directed hereunder by the Required Lenders), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of Lenders. Each Lender, severally to the extent of its Percentage, hereby agrees to indemnify Agent against and hold it harmless from any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action, provided that the foregoing shall not release Agent from liability for its gross negligence or willful misconduct.

20.14 Employment of Agents and Counsel.

The Agent may undertake any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be liable to Lenders, except as to money or securities received by them or their authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document.

20.15 Reliance on Documents; Counsel.

The Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be an employee of Agent, provided that the foregoing shall not release the Agent from liability for its gross negligence or willful misconduct. Any such counsel shall be deemed to be acting on behalf of Lender in assisting the Agent with respect to the Loan, but shall not be precluded from also representing Agent in any matter in which the interests of Agent and the other Lenders may differ.

20.16 Agent’s Reimbursement and Indemnification.

Lenders agree to reimburse and indemnify Agent ratably (i) for any amounts (excluding principal and interest on the Loan and loan fees) not reimbursed by Borrowers for which Agent is entitled to reimbursement under the Loan Documents, (ii) for any other expenses incurred by Agent on behalf of Lender, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, if not paid by Borrowers, (iii) for any expenses incurred by Agent on behalf of Lender which may be necessary or desirable to preserve and maintain collateral or to perfect and maintain perfected the liens upon the collateral granted pursuant to this Agreement and the other Loan Documents, if not paid by Borrowers, (iv) for any amounts and other expenses incurred by Agent on behalf of Lender in connection with any default by any Lender hereunder or under the other Loan Documents, if not paid by such Lender, and (v) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of Agent.

20.17 Rights as a Lender.

With respect to its Commitment, if any, Agent shall have the same rights, powers and obligations hereunder and under any other Loan Document as any Lender and may exercise such rights and powers as though it were not an Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Agent in its individual capacities. Borrowers and each Lender acknowledge and agree that Agent and/or its affiliates may accept deposits from, lend money to, hold other investments in, and generally engage in any kind of trust, debt, equity or other transaction or have other relationships, in addition to those contemplated by this Agreement or any other Loan Document, with Borrowers or any of their affiliates in which Borrowers or such affiliate are not restricted hereby from engaging with any other person.

SECURED LOAN AGREEMENT Page 48

20.18 Lenders’ Credit Decisions.

Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements and other information prepared by Borrowers and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.

20.19 Notice of Events of Default.

Should Agent receive any written notice of the occurrence of a default or Event of Default, or should the Agent send Borrowers a notice of Default or Event of Default, the Agent shall promptly furnish a copy thereof to each Lender.

20.20 Successor Agent.

(a) Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least thirty (30) days prior written notice to Lenders and Borrowers. Such resignation shall take effect on the date set forth in such notice or as otherwise provided below. Such resignation by Agent as agent shall not affect its obligations hereunder, if any, as a Lender.

(b) Upon resignation by the Agent, or any successor Agent, the Required Lenders shall appoint a successor Agent with the written consent of Borrowers, which shall not be unreasonably withheld, conditioned or delayed (provided that no consent of Borrowers shall be required if an Event of Default then exists). If no successor Agent shall have been so appointed by the Required Lenders (with the consent of Borrowers as set forth in the preceding sentence), and shall have accepted such appointment within thirty (30) days after the retiring Agent’s giving notice of resignation, then the retiring Agent may appoint a successor Agent with the consent of Borrower, which shall not unreasonably withheld, conditioned or delayed (provided that no consent of Borrower shall be required if an Event of Default then exists). Upon the acceptance of any appointment as an Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Agent and the Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents other than its liability, if any, for duties and obligations accrued prior to its retirement. After any retiring Agent’s resignation hereunder as an Agent, the provisions of this Article 20 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as an Agent hereunder and under the other Loan Documents. In the event that Synovus Bank, in its sole discretion, elects to become successor Agent, the consent of Borrowers shall not be required.

ARTICLE 21

WAIVER OF JURY TRIAL

EACH BORROWER AND LENDER EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

SECURED LOAN AGREEMENT Page 49

EXECUTED as of the date first set forth above.

BORROWERS:	CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President
	CHP BROADWAY HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President
	CHP JONESBORO HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President
	CHP MAGNOLIA HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President
	CHP MINE CREEK HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President
	CHP SEARCY HEALTHCARE OWNER, LLC, a Delaware limited liability company
	By:	/s/ Steven M. Wortman
		Steven M. Wortman, Senior Vice President

SECURED LOAN AGREEMENT Page 50

AGENT:	KEYBANK NATIONAL ASSOCIATION, a national banking association, as administrative agent on behalf of itself and the other lenders
	By:	/s/ Amy L. MacLearie
		Amy L. MacLearie, AVP-Closing Officer
LENDERS:	KEYBANK NATIONAL ASSOCIATION, a national banking association
	By:	/s/ Amy L. MacLearie
		Amy L. MacLearie, AVP-Closing Officer
	SYNOVUS BANK, a Georgia state banking corporation
	By:	/s/ James C. Thompson
		James C. Thompson, Senior Director

SECURED LOAN AGREEMENT Page 51

EXHIBIT A-1

Legal Description of Batesville Land

[Intentionally Omitted]

.EXHIBIT A-2

Legal Description of Broadway Land

[Intentionally Omitted]

EXHIBIT A-3

Legal Description of Jonesboro Land

[Intentionally Omitted]

EXHIBIT A-4

Legal Description of Magnolia Land

[Intentionally Omitted]

.EXHIBIT A-5

Legal Description of Mine Creek Land

[Intentionally Omitted]

EXHIBIT A-6

Legal Description of Searcy Land

[Intentionally Omitted]

EXHIBIT B-1

Batesville Permitted Exceptions

[Intentionally Omitted]

EXHIBIT B-2

Broadway Permitted Exceptions

[Intentionally Omitted]

EXHIBIT B-3

Jonesboro Permitted Exceptions

[Intentionally Omitted]

EXHIBIT B-4

Magnolia Permitted Exceptions

[Intentionally Omitted]

EXHIBIT B-5

Mine Creek Permitted Exceptions

[Intentionally Omitted]

EXHIBIT B-6

Searcy Permitted Exceptions

[Intentionally Omitted]

EXHIBIT C

Title Requirements

[Intentionally Omitted]

EXHIBIT D

SURVEY REQUIREMENTS

[Intentionally Omitted]

EXHIBIT E

INSURANCE REQUIREMENTS FOR COMMERCIAL REAL ESTATE LOANS

TERM LOAN – Existing or Completed Building – Health Care Group

[Intentionally Omitted]

EXHIBIT F

RESERVED

EXHIBIT G

FORM OF BORROWERS’ CERTIFICATE OF COMPLIANCE

[Intentionally Omitted]

EXHIBIT H

ASSIGNMENT AND ASSUMPTION AGREEMENT

[Intentionally Omitted]

SCHEDULE I

Environmental Documents

[Intentionally Omitted]

SCHEDULE II

Minimum Quarterly Rent Coverage Requirements

[Intentionally Omitted]

SCHEDULE III

Immediate Repairs

[Intentionally Omitted]

EX-10.2

Exhibit 10.2

PROMISSORY NOTE

U.S. $15,000,000.00 As of May 31, 2013

FOR VALUE RECEIVED, each of the undersigned, having an address at 450 South Orange Avenue, Orlando, Florida 32801 (such entities collectively referred to herein as “Maker”), hereby promises, on a joint and several basis, to pay to the order of SYNOVUS BANK, a Georgia state banking corporation (“Payee”), having an address at 8000 Shades Creek Parkway, Suite 325, Birmingham, Alabama 35209, the principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00) or so much thereof as may be advanced from time to time, and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

This Note is issued by Maker pursuant to that certain Secured Loan Agreement of even date herewith (the “Loan Agreement”) entered into among Maker, KeyBank National Association, individually and as administrative agent for itself and certain other lenders from time to time a party thereto (collectively, the “Lenders”), and the other Lenders. This Note evidences the Loan (as defined in the Loan Agreement). Payment of this Note is governed by the Loan Agreement, the terms of which are incorporated herein by express reference as if fully set forth herein. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

1. Interest. The principal amount hereof outstanding from time to time shall bear interest until paid in full at the Applicable Rate.

2. Monthly Payments. Interest only shall be payable in arrears on the tenth (10^th) day of each calendar month after the date hereof up to and including the Final Maturity Date in the amount of all interest accrued during the immediately preceding calendar month. In addition to, and not in lieu of, each such monthly interest payment, principal under the Notes shall be due and payable in monthly installments commencing on May 10, 2015, and continuing on the tenth (10^th) day of each successive month thereafter until the Final Maturity Date in an amount sufficient to fully amortize the Loan on a twenty-five (25) year amortization schedule at a per annum interest rate of six percent (6.00%). All payments on account of the indebtedness evidenced by this Note shall be made to Payee not later than 11:00 a.m. Cleveland, Ohio time on the day when due in lawful money of the United States and shall be first applied to late charges, costs of collection or enforcement and other similar amounts due, if any, under this Note and any of the other Loan Documents, then to interest due and payable hereunder and the remainder to principal due and payable hereunder.

3. Final Maturity Date. The indebtedness evidenced hereby shall mature on the Final Maturity Date. On the Final Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

4. General Provisions.

(a) Regardless of whether an Adjusted LIBOR Rate would otherwise then be in effect, in the event (i) the principal balance hereof is not paid when due whether by acceleration or upon the Final Maturity Date or (ii) an Event of Default exists, then the principal balance hereof shall bear interest from and after at the Default Rate. In addition, for any installment (exclusive of the payment due upon the Final Maturity Date) which is not paid within ten (10) days of the date when due a late charge as set forth in the Loan Agreement shall be also due and payable.

(b) Maker shall have the right to prepay this Note as set forth in Section 4.4 of the Loan Agreement.

(c) Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq.

(d) The parties hereto intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Maker and the holder or holders hereof under the remainder of this Note shall continue in full force and effect. All agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws. If, from any circumstances whatsoever, the fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if from any circumstance the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest.

(e) This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Payee, together with its successors and assigns, including each owner and holder from time to time of this Note.

PROMISSORY NOTE Page 2

(f) Time is of the essence as to all dates set forth herein.

(g) Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Payee; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

(h) Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

(i) If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys’ fees and disbursements.

(j) All parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due installment following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by the laws of the State. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

(k) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

Maker has delivered this Note as of the day and year first set forth above.

Signature Page Follows

PROMISSORY NOTE Page 3

MAKER:
CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP BROADWAY HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP JONESBORO HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP MAGNOLIA HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP MINE CREEK HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President

PROMISSORY NOTE Page 4

CHP SEARCY HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President

[This Promissory Note was executed in the State of Florida. Accordingly, Documentary stamp tax in the amount of $2,450.00 will be paid by Maker to the Florida Department of Revenue upon execution and delivery of this Promissory Note.]

PROMISSORY NOTE Page 5

EX-10.3

Exhibit 10.3

PROMISSORY NOTE

U.S. $15,000,000.00 As of May 31, 2013

FOR VALUE RECEIVED, each of the undersigned, having an address at 450 South Orange Avenue, Orlando, Florida 32801 (such entities collectively referred to herein as “Maker”), hereby promises, on a joint and several basis, to pay to the order of KEYBANK NATIONAL ASSOCIATION, a national banking association (“Payee”), having an address at 4910 Tiedeman Road, 3^rd Floor, Brooklyn, Ohio 44144, the principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00) or so much thereof as may be advanced from time to time, and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

This Note is issued by Maker pursuant to that certain Secured Loan Agreement of even date herewith (the “Loan Agreement”) entered into among Maker, Payee, individually and as administrative agent for itself and certain other lenders from time to time a party thereto (collectively, the “Lenders”), and the other Lenders. This Note evidences the Loan (as defined in the Loan Agreement). Payment of this Note is governed by the Loan Agreement, the terms of which are incorporated herein by express reference as if fully set forth herein. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

1. Interest. The principal amount hereof outstanding from time to time shall bear interest until paid in full at the Applicable Rate.

2. Monthly Payments. Interest only shall be payable in arrears on the tenth (10^th) day of each calendar month after the date hereof up to and including the Final Maturity Date in the amount of all interest accrued during the immediately preceding calendar month. In addition to, and not in lieu of, each such monthly interest payment, principal under the Notes shall be due and payable in monthly installments commencing on May 10, 2015, and continuing on the tenth (10^th) day of each successive month thereafter until the Final Maturity Date in an amount sufficient to fully amortize the Loan on a twenty-five (25) year amortization schedule at a per annum interest rate of six percent (6.00%). All payments on account of the indebtedness evidenced by this Note shall be made to Payee not later than 11:00 a.m. Cleveland, Ohio time on the day when due in lawful money of the United States and shall be first applied to late charges, costs of collection or enforcement and other similar amounts due, if any, under this Note and any of the other Loan Documents, then to interest due and payable hereunder and the remainder to principal due and payable hereunder.

3. Final Maturity Date. The indebtedness evidenced hereby shall mature on the Final Maturity Date. On the Final Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

4. General Provisions.

(a) Regardless of whether an Adjusted LIBOR Rate would otherwise then be in effect, in the event (i) the principal balance hereof is not paid when due whether by acceleration or upon the Final Maturity Date or (ii) an Event of Default exists, then the principal balance hereof shall bear interest from and after at the Default Rate. In addition, for any installment (exclusive of the payment due upon the Final Maturity Date) which is not paid within ten (10) days of the date when due a late charge as set forth in the Loan Agreement shall be also due and payable.

(b) Maker shall have no right to prepay this Note except as set forth in Section 4.4 of the Loan Agreement.

(c) Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq.

(d) The parties hereto intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Maker and the holder or holders hereof under the remainder of this Note shall continue in full force and effect. All agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws. If, from any circumstances whatsoever, the fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if from any circumstance the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest.

(e) This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Payee, together with its successors and assigns, including each owner and holder from time to time of this Note.

PROMISSORY NOTE Page 2

(f) Time is of the essence as to all dates set forth herein.

(g) Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Payee; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

(h) Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

(i) If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys’ fees and disbursements.

(j) All parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due installment following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by the laws of the State. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

(k) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

Maker has delivered this Note as of the day and year first set forth above.

Signature Page Follows

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MAKER:
CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP BROADWAY HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP JONESBORO HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP MAGNOLIA HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP MINE CREEK HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President
CHP SEARCY HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President

PROMISSORY NOTE Page 4

[This Promissory Note was executed in the State of Florida. Accordingly, Documentary stamp tax in the amount of $2,450.00 will be paid by Maker to the Florida Department of Revenue upon execution and delivery of this Promissory Note.]

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EX-10.4

Exhibit 10.4

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (“Guaranty”) made as of May 31, 2013, CNL HEALTHCARE PROPERTIES, INC., a Maryland corporation (“Guarantor”), to and for the benefit of KEYBANK NATIONAL ASSOCIATION, a national banking association, as administrative agent for the benefit of the Lenders, its successors and assigns (“Agent”).

RECITALS

A. On or about the date hereof, CHP Batesville Healthcare Owner, LLC (“Batesville”), CHP Broadway Healthcare Owner, LLC (“Broadway”), CHP Jonesboro Healthcare Owner, LLC (“Jonesboro”), CHP Magnolia Healthcare Owner, LLC (“Magnolia”), CHP Mine Creek Healthcare Owner, LLC (“Mine Creek”), and CHP Searcy Healthcare Owner, LLC (“Searcy”) (Batesville, Broadway, Jonesboro, Magnolia, Mine Creek, and Searcy being collectively referred to as “Borrower”), Agent and the Lenders entered into that certain Secured Loan Agreement (“Loan Agreement”) whereby the Lenders agreed to make a secured term loan (the “Loan”) available to Borrower in the maximum aggregate amount at any time outstanding not to exceed the sum of Thirty Million and No/100 Dollars ($30,000,000.00), for the acquisition of the Projects.

B. In connection with the Loan, Borrowers have executed and delivered one or more promissory notes (collectively, the “Notes”), of even date herewith and payable to the order of the Lenders in the aggregate amount of $30,000,000.00, payment of which is secured by (i) the Mortgages made by Borrower in favor of Agent for the benefit of the Lenders on the Project and (ii) the other Loan Documents.

C. Guarantor will derive financial benefit from the Loan evidenced and secured by the Notes, the Mortgages and the other Loan Documents.

D. The Lenders have relied on the statements and agreements contained herein in agreeing to make the Loan. The execution and delivery of this Guaranty by Guarantor is a condition precedent to the making of the Loan by the Lenders.

E. Initially capitalized terms used and not otherwise defined herein shall have the meanings respectively ascribed to them in the Loan Agreement.

AGREEMENTS

NOW, THEREFORE, intending to be legally bound, Guarantor, in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for other good and valuable consideration the receipt and sufficiency of which are acknowledged, hereby covenants and agrees with Agent for the benefit of the Lenders and their respective successors, indorsees, transferees, participants and assigns as follows:

1. Guarantor absolutely, unconditionally and irrevocably guarantees to Lender:

(a) the full and prompt payment of any Enforcement Costs (as hereinafter defined in Section 8 hereof).

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(b) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders arising out of, on account of, or in connection with the misapplication or conversion of any tenant security deposits, insurance proceeds, condemnation awards, or any proceeds from the sale of a portion of any Project received by any Borrower and not delivered over to Agent or used to restore the Project in accordance with the terms of the Loan Agreement;

(c) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders arising out or on account of or based upon any fraud or willful misrepresentation of a material fact by any Borrower or Guarantor in any document executed or presented to Agent or any Lender in connection with the Loan;

(d) any amount(s) necessary to repair or replace any damage to or destruction of any Project which is the result of willful misconduct or gross negligence on the part of any Borrower including, without limitation, waste, any act of arson or malicious destruction by any Borrower;

(e) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders out of or on account of or based upon the failure to maintain insurance as required by the Loan Documents or the failure to timely pay insurance premiums for any such required insurance or real estate taxes for any Project;

(f) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders out of or on account of or based upon the failure to timely pay any valid real estate taxes for any Project which could create liens on any portion of any Project which would be superior to the lien or security title of the applicable Mortgage or the other Loan Documents, to the full extent of the amount claimed by any such lien claimant;

(g) the aggregate amount outstanding under the Loan Documents upon any Borrower or Guarantor (i) making a general assignment for the benefit of its creditors; (ii) filing a petition, answer or consent seeking, or having entered against it an order for relief (or any similar remedy) under any provision of Title 11 of the United States Code or any other federal, state or foreign Law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, or consent to the institution of any proceedings thereunder; (iii) convening a meeting of its creditors, or any class thereof, for the purpose of effecting a moratorium upon or extension or composition of its debts; (iv) admitting in writing that it is generally not able to pay its debts as they mature; or (v) applying for a consent to the appointment of a receiver, trustee, custodian, liquidator or other similar official of all or a portion of its assets;

(h) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders arising out of, on account of, or in connection with the failure of any Project to be properly licensed by the applicable Governmental Authority for the operation of the Improvements as skilled nursing care facilities for the number of Available Beds as set forth in the Loan Agreement; and

GUARANTY AGREEMENT Page 2

(i) any loss, damage, cost, expense, liability or obligation suffered or incurred by the Lenders arising out of, on account of, or in connection with a distribution by any Borrower of Monthly Excess Cash Flow in violation of the provisions of the Loan Documents.

All amounts due, debts, liabilities and payment obligations described in subsections (a) – (i) of this Section 1 shall be hereinafter collectively referred to as the “Guaranteed Indebtedness.”

2. In the event of any default by Borrowers in the payment of the Guaranteed Indebtedness, after the expiration of any applicable cure or grace period, Guarantor agrees, on demand by Agent or the holder of any Note, to pay the Guaranteed Indebtedness regardless of any defense, right of set-off or claims which any Borrower or Guarantor may have against Agent or any Lender or the holder of any Note.

3. All of the remedies set forth herein and/or provided for in any of the Loan Documents or at law or equity shall be equally available to Agent and the Lenders, and the choice by Agent or the Lenders of one such alternative over another shall not be subject to question or challenge by Guarantor or any other person, nor shall any such choice be asserted as a defense, setoff, or failure to mitigate damages in any action, proceeding, or counteraction by Agent to recover or seeking any other remedy under this Guaranty, nor shall such choice preclude Agent from subsequently electing to exercise a different remedy. The parties have agreed to the alternative remedies provided herein in part because they recognize that the choice of remedies in the event of a default hereunder will necessarily be and should properly be a matter of good faith business judgment, which the passage of time and events may or may not prove to have been the best choice to maximize recovery by Agent and the Lenders at the lowest cost to Borrowers and/or Guarantor. It is the intention of the parties that such good faith choice by Agent or any Lender be given conclusive effect regardless of such subsequent developments.

4. Guarantor does hereby (a) waive notice of acceptance of this Guaranty by Agent and the Lenders and any and all notices and demands of every kind which may be required to be given by any statute, rule or law, (b) agree to refrain from asserting, until after repayment in full of the Loan, any defense, right of set-off or other claim which Guarantor may have against any Borrower, (c) waive any defense, right of set-off or other claim which Guarantor or any Borrower may have against any Agent, any Lender, or the holder of any Note, (d) waive any and all rights Guarantor may have under any anti-deficiency statute or other similar protections, (e) waive presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection and any and all formalities which otherwise might be legally required to charge Guarantor with liability, and (f) waive any failure by Agent or any Lender to inform Guarantor of any facts Agent or any Lender may now or hereafter know about any Borrower, any Project, the Loan, or the transactions contemplated by the Loan Agreement, it being understood and agreed that neither Agent nor any Lender has any duty so to inform and that Guarantor is fully responsible for being and remaining informed by Borrowers of all circumstances bearing on the risk of nonperformance of any Borrower’s obligations. Credit may be granted or continued from time to time by the Lenders to any Borrower without notice to

GUARANTY AGREEMENT Page 3

or authorization from Guarantor, regardless of the financial or other condition of such Borrower at the time of any such grant or continuation. Neither Agent nor any Lender shall have any obligation to disclose or discuss with Guarantor its assessment of the financial condition of Borrower. Guarantor acknowledges that no representations of any kind whatsoever have been made by Agent or any Lender. No modification or waiver of any of the provisions of this Guaranty shall be binding upon Agent or any Lender except as expressly set forth in a writing duly signed and delivered by Agent on behalf of the Lenders.

5. Guarantor further agrees that Guarantor’s liability as guarantor shall in not be impaired or affected by any renewals or extensions which may be made from time to time, with or without the knowledge or consent of Guarantor of the time for payment of interest or principal under the Notes or by any forbearance or delay in collecting interest or principal under the Notes, or by any waiver by Agent or any Lender under the Loan Agreement, any Mortgage or any other Loan Documents, or by Agent’s or any Lender’s failure or election not to pursue any other remedies it may have against any Borrower or Guarantor, or by any change or modification in any Note, the Loan Agreement, any Mortgage or any other Loan Document, or by the acceptance by Agent or any Lender of any additional security or any increase, substitution or change therein, or by the release by Agent or any Lender of any security or any withdrawal thereof or decrease therein, or by the application of payments received from any source to the payment of any obligation other than the Guaranteed Indebtedness even though Agent or any Lender might lawfully have elected to apply such payments to any part or all of the Guaranteed Indebtedness, it being the intent hereof that, subject to Agent’s and the Lenders’ compliance with the terms of this Guaranty, Guarantor shall remain liable for the payment of the Guaranteed Indebtedness, until the Guaranteed Indebtedness has been paid in full, notwithstanding any act or thing which might otherwise operate as a legal or equitable discharge of a surety. Guarantor further understands and agrees that Agent and the Lenders may at any time enter into agreements with Borrowers to amend and modify the Notes, the Loan Agreement, the Mortgages or other Loan Documents, and may waive or release any provision or provisions of the Notes, the Loan Agreement, the Mortgages and other Loan Documents or any thereof, and, with reference to such instruments, may make and enter into any such agreement or agreements as Agent, the Lenders and Borrowers may deem proper and desirable, without in any manner impairing or affecting this Guaranty or any of Agent’s or Lenders’ rights hereunder or Guarantor’s obligations hereunder.

6. This is an absolute, present and continuing guaranty of payment and not of collection. Guarantor agrees that this Guaranty may be enforced by Agent on behalf of the Lenders without the necessity at any time of resorting to or exhausting any other security or collateral given in connection herewith or with the Notes, the Loan Agreement, any Mortgage or any of the other Loan Documents through foreclosure or sale proceedings, as the case may be, under any Mortgage or otherwise, or resorting to any other guaranties, and Guarantor hereby waives any right to require Agent or any Lender to join any Borrower in any action brought hereunder or to commence any action against or obtain any judgment against any Borrower or to pursue any other remedy or enforce any other right. Guarantor further agrees that nothing contained herein or otherwise shall prevent Agent on behalf of the Lenders from pursuing concurrently or successively all rights and remedies available to it at law and/or in equity or under the Notes, the Loan Agreement, any Mortgage or any other Loan Documents, and the exercise of any of its rights or the completion of any of its remedies shall not constitute a discharge of Guarantor’s obligations hereunder, it being the purpose and intent of Guarantor that

GUARANTY AGREEMENT Page 4

the obligations of Guarantor hereunder shall be absolute, independent and unconditional under any and all circumstances whatsoever. None of Guarantor’s obligations under this Guaranty or any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of any Borrower under the Notes, the Loan Agreement, any Mortgage or other Loan Documents or by reason of the bankruptcy of any Borrower or by reason of any creditor or bankruptcy proceeding instituted by or against any Borrower. This Guaranty shall continue to be effective or be reinstated (as the case may be) if at any time payment of all or any part of any sum payable pursuant to the Notes, the Loan Agreement, any Mortgage or any other Loan Document is rescinded or otherwise required to be returned by Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization of any Borrower, or upon or as a result of the appointment of a receiver, intervenor, custodian or conservator of or trustee or similar officer for, any Borrower or any substantial part of its property, or otherwise, all as though such payment to Agent or such Lender had not been made, regardless of whether Agent or such Lender contested the order requiring the return of such payment. In the event of the foreclosure of the Mortgage and of a deficiency, Guarantor hereby promises and agrees forthwith to pay the amount of such deficiency notwithstanding the fact that recovery of said deficiency against Borrowers would not be allowed by applicable law; however, the foregoing shall not be deemed to require that Agent on behalf of the Lenders institute foreclosure proceedings or otherwise resort to or exhaust any other collateral or security prior to or concurrently with enforcing this Guaranty.

7. In the event any Lender or any holder of any Note shall assign any Note to any lender or other entity to secure a loan from such lender or other entity to any Lender or such holder for an amount not in excess of the amount which will be due, from time to time, from Borrowers to any Lender under such Note with interest not in excess of the rate of interest which is payable by Borrowers under such Note, Guarantor will accord full recognition thereto and agree that all rights and remedies of such Lender or such holder hereunder shall be enforceable against Guarantor by such lender or other entity with the same force and effect and to the same extent as would have been enforceable by such lender or such holder but for such assignment; provided, however, that unless Agent shall otherwise consent in writing, Agent shall have an unimpaired right, prior and superior to that of its assignee or transferee, to enforce this Guaranty for Lender’s benefit to the extent any portion of the Guaranteed Indebtedness or any interest therein is not assigned or transferred.

8. If: (a) this Guaranty is placed in the hands of an attorney for collection or is collected through any legal proceeding; (b) an attorney is retained to represent Agent or any Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors’ rights and involving a claim under this Guaranty; (c) an attorney is retained to provide advice to Agent or any Lender or other representative of Agent or any other Lender in any proceedings whatsoever in connection with this Guaranty and Agent or such Lender prevails in such proceedings, then Guarantor shall pay to Agent or such Lender upon demand all reasonable attorney’s fees, costs and expenses incurred in connection therewith (all of which are referred to herein as “Enforcement Costs”), in addition to all other amounts due hereunder, regardless of whether all or a portion of such Enforcement Costs are incurred in a single proceeding brought to enforce this Guaranty as well as the other Loan Documents.

GUARANTY AGREEMENT Page 5

9. The parties hereto intend and believe that each provision in this Guaranty comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Guaranty is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Agent and the Lenders under the remainder of this Guaranty shall continue in full force and effect.

10. TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY AGENT. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A “PROCEEDING”), AGENT (BY ITS ACCEPTANCE HEREOF) AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF CLEVELAND AND STATE OF OHIO, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS GUARANTY SHALL PRECLUDE AGENT FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. AGENT AND GUARANTOR FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY OHIO STATE OR UNITED STATES COURT SITTING IN THE CITY OF CLEVELAND AND MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

11. Any indebtedness of Borrower to Guarantor now or hereafter existing is hereby subordinated to the payment of the Guaranteed Indebtedness. Guarantor agrees that, until the entire Guaranteed Indebtedness has been paid in full, Guarantor will not seek, accept, or retain for its own account, any payment from Borrower on account of such subordinated debt. Any payments to Guarantor on account of such subordinated debt shall be collected and received by Guarantor in trust for the Lenders and shall be paid over to Agent for the benefit of the Lenders on account of the Guaranteed Indebtedness without impairing or releasing the obligations of Guarantor hereunder.

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12. Any amounts received by the Lenders from any source on account of the Loan may be utilized by the Lenders for the payment of the Guaranteed Indebtedness and any other obligations of any Borrower to the Lenders in such order as the Lenders may from time to time elect. Additionally, if the Guaranteed Indebtedness guaranteed hereby is less than the full indebtedness evidenced by the Notes, all rents, proceeds and avails of each Project, including proceeds of realization of the Lenders’ collateral, shall be deemed applied on the Guaranteed Indebtedness of Borrowers to the Lenders that is not guaranteed by Guarantor until such unguaranteed indebtedness of Borrowers to the Lenders has been fully repaid before being applied upon the Guaranteed Indebtedness guaranteed by Guarantor.

13. GUARANTOR AND AGENT (BY ITS ACCEPTANCE HEREOF) HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

14. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

Guarantor:	CNL Healthcare Properties, Inc. 450 South Orange Avenue Orlando, Florida 32801 Attention:     Joseph T. Johnson, Senior Vice President and Chief Financial Officer Attention:     Holly J. Greer, Esq., Senior Vice President and General Counsel Telephone:   (407) 540-7500 Facsimile:    (407) 540-2544
With a copy to:	Lowndes Drosdick Doster Kantor & Reed, P.A. 215 North Eola Drive Orlando, Florida 32801 Attention:     Peter L. Lopez, Esq. Telephone:   (407) 843-4600 Facsimile:    (407) 843-4444

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Agent:	KeyBank National Association Mailcode: OH-01-51-0311 4910 Tiedeman Road, 3rd Floor Brooklyn, Ohio 44144 Attention:     Amy L. MacLearie, KREC Commercial Loan Closer-Assistant Vice President Telephone:    (216) 813-6935 Facsimile:     (216) 357-6383
With a copy to:	Alfred G. Kyle, Esq. Bracewell & Giuliani LLP 1445 Ross Avenue, Suite 3800 Dallas, Texas 75202 Telephone:    (214) 758-1660 Facsimile:     (214) 758-8360

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

15. In order to induce the Lenders to make the Loan, Guarantor makes the following representations and warranties to the Agent for the benefit of the Lender set forth in this Section. Guarantor acknowledges that but for the truth and accuracy of the matters covered by the following representations and warranties, the Lenders would not have agreed to make the Loan:

(a) Guarantor is duly formed, validly existing, and in good standing in its state of organization and has qualified to do business and is in good standing in any state in which it is necessary in the conduct of its business;

(b) Guarantor maintains an office at the address set forth for such party in Section 14;

(c) Any and all balance sheets, net worth statements, and other financial data with respect to Guarantor which have heretofore been given to Agent or any Lender by or on behalf of Guarantor fairly and accurately present the financial condition of Guarantor in all material respects as of the respective dates thereof;

(d) The execution, delivery, and performance by Guarantor of this Guaranty does not and will not contravene or conflict with (i) any Laws, order, rule, regulation, writ, injunction or decree now in effect of any Government Authority, or court having jurisdiction over Guarantor, (ii) any contractual restriction binding on or affecting Guarantor or Guarantor’s property or assets which may adversely affect Guarantor’s ability to fulfill its obligations under this Guaranty, (iii) the instruments creating any trust holding title to any assets included in Guarantor’s financial statements, or (iv) the organizational documents of Guarantor;

(e) This Guaranty creates legal, valid, and binding obligations of Guarantor enforceable in accordance with its terms;

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(f) there is no action, proceeding, or investigation pending or, to the knowledge of Guarantor, threatened or affecting Guarantor, which may adversely affect Guarantor’s ability to fulfill its material obligations under this Guaranty. There are no judgments or orders for the payment of money rendered against Guarantor for an amount in excess of $100,000 which have been undischarged for a period of ten (10) or more consecutive days or the enforcement of which is not stayed by reason of a pending appeal or otherwise. Guarantor is not in default under any agreements which may adversely affect Guarantor’s ability to fulfill its obligations under this Guaranty;

(g) All statements set forth in the Recitals are true and correct; and

(h) For purposes of this Section 15(h), the “Company” shall mean the Guarantor.

(i) No Person owns more than 10% of the Equity Shares. The Articles of Amendment and Restatement of the Company dated June 8, 2011, as amended (the “Articles of Incorporation”) provide that no Person shall Beneficially Own shares of any class or series of Equity Shares in excess of, with respect to each such class or series, 9.8% (by number or value) of the outstanding shares of such Equity Shares.

(ii) The Articles of Incorporation provide that a majority of the Board of Directors will be Independent Directors, except for a period of 90 days after the death, removal, or resignation of an Independent Director. Independent Directors shall nominate replacements for vacancies in the Independent Director positions and no other Person has the right to nominate such replacements.

(iii) The Articles of Incorporation provide that the Board of Directors are responsible for setting the general policies of the Company and for the general supervision of its business; however, the Board Directors may, at their option, appoint, employ, or contract with any Person as an Advisor and may grant or delegate such authority to the Advisor as the Board of Directors may, in their sole discretion, deem necessary or desirable. The term or retention of any Advisor shall not exceed one (1) year, although there is no limit to the number of times and terms that a particular Advisor may be retained.

(iv) As of the date of this Guaranty, the Company has retained CNL Healthcare Corp., a Florida corporation, as its current Advisor.

(v) The Company’s stated investment objectives in the Articles of Incorporation are to invest in diversified portfolio of assets that will allow the Company to pay attractive and steady cash dividends, preserve, protect and grow the Invested Capital, and explore liquidity options in the future, including the sale of either the Company or the Company’s Assets, potential merger opportunities, or the Listing of Common Shares. The Independent Directors are required to review the investment policies of the Company with sufficient frequency and at least annually to determine that the policies being followed by the Company are in the best interest of its stockholders.

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(vi) The Company’s funds will at all times be kept separate and apart from any Affiliated entity or the Advisor.

(vii) The proceeds of the Loan, or assets purchased with such proceeds, will not be transferred to any of the following Persons: CHT Acworth GA Owner, LLC, a Delaware limited liability company; CHT Harborchase Assisted Living Owner, LLC, a Delaware limited liability company; Cypress Dallas, LP, a Texas limited partnership; CLP Moline IL Assisted Living Owner, LLC, a Delaware limited liability company; CLP Moline IL Memory Care Owner, LLC, a Delaware limited liability company; CLP Carson City NV Owner, LLC, a Delaware limited liability company; CLP Godfrey IL Owner, LLC, a Delaware limited liability company; and CLP Laurel Creek GA Owner, LLC, a Delaware limited liability company (collectively, the “Non-Company Related Entities”), other than in a bona fide arm’s length transaction where the proceeds are used to acquire property, goods, or services.

(viii) The source of repayment of the Loan is separate from and unrelated to the sources of repayment on the following loans from Synovus Bank, a Lender, to the Non-Company Related Entities: $15,073,041.00 loan to CHT Acworth GA Owner, LLC, a Delaware limited liability company; $17,328,027 loan to CHT Harborchase Assisted Living Owner, LLC, a Delaware limited liability company; $22,500,000.00 loan to Cypress Dallas, LP, a Texas limited partnership; and $30,000,000 loan to CLP Moline IL Assisted Living Owner, LLC, a Delaware limited liability company; CLP Moline IL Memory Care Owner, LLC, a Delaware limited liability company; CLP Carson City NV Owner, LLC, a Delaware limited liability company; CLP Godfrey IL Owner, LLC, a Delaware limited liability company; and CLP Laurel Creek GA Owner, LLC, a Delaware limited liability company.

(ix) Borrowers do not control, are not controlled by, or are not under common control with any of the Non-Company Related Entities. For purposes of this Section 15(h)(ix), Borrowers are deemed to “control” Non-Company Related Entities if they, directly or indirectly, or acting through or in concert with one or more persons: (A) own, control, or have the power to vote ten (10%) percent or more of any class of voting securities of a Non-Company Related Entity; (B) control in any manner the election of a majority of the directors of a Non-Company Related Entity; or (C) have the power to exercise a controlling influence over the management or policies of a Non-Company Related Entity.

For purposes of this Section 15(h), the terms “Advisor,” Affiliated,” “Assets,” “Beneficially Own,” “Common Shares,” “Equity Shares,” “Independent Directors,” “Invested Capital,” “Listing,” “Person” and “Real Estate” shall have the meaning given such terms in the Articles of Incorporation.

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All of the foregoing representations and warranties shall be deemed remade on the date of the first disbursement of Loan proceeds, on the date of each advance of Loan proceeds, and upon any extension of the Loan pursuant to the Loan Agreement. Guarantor hereby agrees to indemnify and hold Agent and each Lender free and harmless from and against all loss, cost, liability, damage, and expense, including reasonable attorney’s fees and costs, which Agent or any Lender may sustain by reason of the inaccuracy or breach of any of the foregoing representations and warranties as of the date the foregoing representations and warranties are made and are remade.

16. Guarantor shall deliver or cause to be delivered to Agent all of the Guarantor financial statements to be delivered in accordance with the terms of the Loan Agreement.

17. This Guaranty shall be binding upon the heirs, executors, legal and personal representatives, successors and assigns of Guarantor.

18. THIS GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE LOAN SECURED HEREBY WERE NEGOTIATED IN THE STATE OF OHIO, AND DELIVERED BY GUARANTOR OR BORROWER, AS APPLICABLE, AND ACCEPTED BY AGENT IN THE STATE OF OHIO, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS AND PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF OHIO APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

19. The Lenders shall be entitled to honor any request for Loan proceeds made by Borrower and shall have no obligation to see to the proper disposition of such advances. Guarantor agrees that its obligations hereunder shall not be released or affected by reason of any improper disposition by Borrowers of such Loan proceeds.

20. This Guaranty may be executed in any number of counterparts and by different parties hereto 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 instrument.

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IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State of Ohio as of the date first written above.

GUARANTOR:
CNL HEALTHCARE PROPERTIES, INC., a Maryland corporation
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President

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EX-10.5

Exhibit 10.5

ARKANSAS MORTGAGE,

ABSOLUTE ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND

FIXTURE FILING (INCLUDES FUTURE ADVANCES)

MADE BY

CHP BATESVILLE HEALTHCARE OWNER, LLC,

a Delaware limited liability company

as Mortgagor

to

KEYBANK NATIONAL ASSOCIATION,

as Agent, for the benefit of the Lenders,

as Mortgagee

Dated as of: May 31, 2013

PREPARED BY AND UPON RECORDATION RETURN TO:

Bracewell & Giuliani LLP

1445 Ross Avenue, Suite 3800

Dallas, Texas 75202-2711

Attention: Alfred G. Kyle, Esq.

ARKANSAS MORTGAGE,

ABSOLUTE ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND

FIXTURE FILING (INCLUDES FUTURE ADVANCES)

Project Commonly Known As

“Batesville Health Care Center”

THIS ARKANSAS MORTGAGE, ABSOLUTE ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Mortgage”) is made as of May 31, 2013, by CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company (“Mortgagor”) whose address is /o CNL Healthcare Properties, Inc., 450 South Orange Ave., Orlando, Florida 32801, in favor KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors and assigns, as administrative agent for the benefit of the Lenders (“Mortgagee”), whose address is 4910 Tiedeman Road, 3rd Floor, Brooklyn, Ohio 44144.

1. Grant and Secured Obligations.

1.1 Grant. For the purpose of securing payment and performance of the Secured Obligations defined and described in Section 1.2 below, Mortgagor hereby irrevocably and unconditionally grants, bargains, sells, conveys, mortgages and warrants to Mortgagee, with power of sale and with right of entry and possession, all estate, right, title and interest which Mortgagor now has or may later acquire in and to the following property (all or any part of such property, or any interest in all or any part of it, as the context may require, the “Property”):

(a) the real estate situated in Independence County, Arkansas, which is more particularly described in Exhibit A attached hereto and made a part hereof for all purposes the same as if set forth herein verbatim, together with all right, title and interest of Mortgagor in and to (i) all streets, roads, alleys, easements, rights-of-way, licenses, rights of ingress and egress, vehicle parking rights and public places, existing or proposed, abutting, adjacent, used in connection with or pertaining to the real property or the Improvements (as hereinafter defined); (ii) any strips or gores between the real property and abutting or adjacent properties; and (iii) all water and water rights, timber, crops and mineral interests pertaining to the real property (such real estate and other rights, titles and interests being hereinafter sometimes called the “Land”);

(b) all buildings, structures and other improvements (such buildings, structures and other improvements being hereinafter sometimes called the “Improvements”) now or hereafter situated on the Land;

(c) all fixtures, under Ark. Code Ann. §§ 4-9-313 and 4-9-401 et seq., or similar statute, whether now or hereinafter enacted, equipment, systems, machinery, furniture, furnishings, inventory, goods, building and construction materials, supplies, and articles of personal property, of every kind and character, now owned or hereafter acquired by Mortgagor, which are now or hereafter attached to or situated in, on or about the Land or the Improvements, or used in or necessary to the complete and proper planning, development, use, occupancy or operation thereof, or acquired (whether

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delivered to the Land or stored elsewhere) for use or installation in or on the Land or the Improvements, and all renewals and replacements of, substitutions for and additions to the foregoing, including, but without limiting the foregoing, any and all fixtures, equipment, machinery, systems, facilities and apparatus for heating, ventilating, air conditioning, refrigerating, plumbing, sewer, lighting, generating, cleaning, storage, incinerating, waste disposal, sprinkler, fire extinguishing, communications, transportation (of people or things, including, but not limited to, stairways, elevators, escalators and conveyors), data processing, security and alarm, laundry, food or drink preparation, storage or serving, gas, electrical and electronic, water, and recreational uses or purposes; all tanks, pipes, wiring, conduits, ducts, doors, partitions, rugs and other floor coverings, wall coverings, windows, drapes, window screens and shades, awnings, fans, motors, engines and boilers; and decorative items and art objects (all of which are herein sometimes referred to together, as the “Accessories”);

(d) all (i) plans and specifications for the Improvements; (ii) contracts relating to the Land, or the Improvements or the Accessories or any part thereof, including, without limitation, any and all operations transfer or other similar agreements; (iii) deposits, (including, but not limited to, Mortgagor’s rights in tenants’ security deposits, deposits with respect to utility services to the Land, or the Improvements or the Accessories or any part thereof, and any deposits or reserves hereunder or under any other Loan Document (as hereinafter defined) for taxes, insurance or otherwise, funds, accounts, contract rights, instruments, documents, commitments, general intangibles (including, but not limited to, trademarks, trade names and symbols), notes, and chattel paper used in connection with or arising from or by virtue of any transactions related to the Land, or the Improvements or the Accessories or any part thereof; (iv) permits, licenses, franchises, certificates and other rights and privileges obtained in connection with the Land, or the Improvements or the Accessories or any part thereof; (v) leases, rents, royalties, bonuses, issues, profits, revenues and other benefits of the Land, the Improvements and the Accessories; and (vi) other properties, rights, titles and interests, if any, specified in any Section or any Article of this Mortgage as being part of the Property; and

(e) all (i) proceeds of or arising from the properties, rights, titles and interests referred to above in paragraphs (a), (b), (c) and (d), including, but not limited to, proceeds of any sale, lease or other disposition thereof, proceeds of each policy of insurance relating thereto (including premium refunds), proceeds of the taking thereof or of any rights appurtenant thereto by eminent domain or sale in lieu thereof for public or quasi-public use under any law, and proceeds arising out of any damage thereto whether caused by such a taking (including change of grade of streets, curb cuts or other rights of access) or otherwise caused; and (ii) other interests of every kind and character, and proceeds thereof, which Mortgagor now has or hereafter acquires in, to or for the benefit of the properties, rights, titles and interests referred to above in paragraphs (a), (b), (c) and (d) and all property used or useful in connection therewith, including, but not limited to, remainders, reversions and reversionary rights or interests. In the event the estate of Mortgagor in and to any of the Property is a leasehold estate, this conveyance shall include, and the lien and security interest created hereby shall encumber and extend to, all other further or additional title, estates, interest or rights which may exist now or at any

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time be acquired by Mortgagor in or to the property demised under the lease creating such leasehold estate and including Mortgagor’s rights, if any, to the property demised under such lease and, if fee simple title to any of such property shall ever become vested in Mortgagor such fee simple interest shall be encumbered by this Mortgage in the same manner as if Mortgagor had fee simple title to said property as of the date of execution hereof.

TO HAVE AND TO HOLD the Property, unto Mortgagee and Mortgagee’s successors, substitutes or assigns, for the uses and purposes herein set forth, forever, together with all rights, privileges, hereditaments and appurtenances in anywise appertaining or belonging thereto, subject only to the Permitted Exceptions (herein so called) listed on Exhibit B attached hereto (to the extent that the same are valid, subsisting and affect the Property), and Mortgagor, for Mortgagor and Mortgagor’s successors, hereby agrees to warrant and forever defend, all and singular, the Property unto Mortgagee and Mortgagee’s successors or substitutes against the claim or claims of all persons claiming or to claim the same or any part thereof, subject, however, as aforesaid.

Capitalized terms used above and elsewhere in this Mortgage without definition have the meanings given them in the Loan Agreement referred to in Subsection 1.2(a)(iii) below.

1.2     Secured Obligations.

(a) Mortgagor makes the grant, conveyance, and mortgage set forth in Section 1.1 above, and grants the security interest set forth in Section 3 below for the purpose of securing the following obligations (the “Secured Obligations”) in any order of priority that Mortgagee may choose:

(i) Payment of all obligations at any time owing under one or more promissory notes (the “Notes”) bearing even date herewith, payable by Borrowers as maker in the aggregate principal amount of Thirty Million and No/100 Dollars ($30,000,000.00) to the order of each Lender; and

(ii) Payment and performance of all obligations of Mortgagor under this Mortgage; and

(iii) Payment and performance of all obligations of Borrowers under a Secured Loan Agreement bearing even date herewith among Mortgagor, the other Borrowers, Mortgagee and the Lenders (the “Loan Agreement”); and

(iv) Payment and performance of any obligations of Borrowers under any Loan Documents which are executed by Borrowers or any one of them; and

(v) Payment and performance of all future advances and other obligations that Mortgagor or any successor in ownership of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of the Lenders, when a writing evidences the parties’ agreement that the advance or obligation be secured by this Mortgage; and

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(vi) Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Secured Obligations.

(b) All persons who may have or acquire an interest in all or any part of the Property will be considered to have notice of, and will be bound by, the terms of the Secured Obligations and each other agreement or instrument made or entered into in connection with each of the Secured Obligations. Such terms include any provisions in the Note or the Loan Agreement which permit borrowing, repayment and reborrowing, or which provide that the interest rate on one or more of the Secured Obligations may vary from time to time.

2. Assignment of Rents.

2.1 Assignment. Mortgagor hereby irrevocably, absolutely, presently and unconditionally assigns to Mortgagee all of Mortgagor’s right, title and interest in and to all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other benefits of the Property, whether now due, past due or to become due, including all prepaid rents and security deposits (some or all collectively, as the context may require, “Rents”). This is an absolute assignment, not an assignment for security only.

2.2 Grant of License. Mortgagee hereby confers upon Mortgagor a license (“License”) to collect and retain the Rents as they become due and payable, so long as no Event of Default, as defined in Section 6.2 below, shall exist and be continuing. If an Event of Default has occurred and is continuing, Mortgagee shall have the right, which it may choose to exercise in its sole discretion, to terminate this License upon notice to Mortgagor, and without regard to the adequacy of Mortgagee’s security under this Mortgage.

2.3 Collection and Application of Rents. Subject to the License granted to Mortgagor under Section 2.2 above, Mortgagee has the right, power and authority to collect any and all Rents. Mortgagor hereby appoints Mortgagee its attorney-in-fact to perform any and all of the following acts, if and at the times when Mortgagee in its sole discretion may so choose while an Event of Default is ongoing:

(a) Demand, receive and enforce payment of any and all Rents; or

(b) Give receipts, releases and satisfactions for any and all Rents; or

(c) Sue either in the name of Mortgagor or in the name of Mortgagee for any and all Rents.

Mortgagee and Mortgagor agree that the mere recordation of the assignment granted herein entitles Mortgagee immediately to collect and receive rents upon the occurrence of an Event of Default, as defined in Section 6.2, without first taking any acts of enforcement under applicable law, such as, but not limited to, providing notice to Mortgagor, filing foreclosure proceedings, or seeking and/or obtaining the appointment of a receiver. Further, Mortgagee’s right to the Rents does not depend on whether or not Mortgagee takes possession of the Property as permitted under Subsection 6.3(c). In Mortgagee’s sole discretion, Mortgagee may choose to collect Rents either with or without taking possession of the Property. Mortgagee shall apply all Rents

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collected by it in the manner provided under Section 6.6. If an Event of Default occurs while Mortgagee is in possession of all or part of the Property and is collecting and applying Rents as permitted under this Mortgage, Mortgagee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Mortgage and at law or in equity.

2.4 Mortgagee Not Responsible. Under no circumstances shall Mortgagee have any duty to produce Rents from the Property. Regardless of whether or not Mortgagee, in person or by agent, takes actual possession of the Land and Improvements, unless Mortgagee agrees in writing to the contrary, Mortgagee is not and shall not be deemed to be:

(a) A “Mortgagee in possession” for any purpose; or

(b) Responsible for performing any of the obligations of the lessor under any lease; or

(c) Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair or control of the Property; or

(d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it.

Notwithstanding the foregoing, however, Mortgagee shall not be exculpated for its gross negligence or willful misconduct.

2.5 Leasing. Mortgagor shall not accept any deposit or prepayment of rents under the leases for any rental period exceeding one (1) month without Mortgagee’s prior written consent. Mortgagor shall not lease the Property or any part of it except strictly in accordance with the Loan Agreement.

3. Grant of Security Interest.

3.1 Security Agreement. The parties intend for this Mortgage to create a lien on the Property, and an absolute assignment of the Rents, all in favor of Mortgagee. The parties acknowledge that some of the Property and some or all of the Rents may be determined under applicable law to be personal property or fixtures. To the extent that any Property or Rents may be or be determined to be personal property, Mortgagor as debtor hereby grants Mortgagee as secured party a security interest in all such Property and Rents, to secure payment and performance of the Secured Obligations. This Mortgage constitutes a security agreement under the Uniform Commercial Code of the State in which the Property is located, covering all such Property and Rents.

3.2 Financing Statements. Mortgagor shall execute one or more financing statements and such other documents as Mortgagee may from time to time reasonably require to perfect or continue the perfection of Mortgagee’s security interest in any Property or Rents. As provided in Section 5.9 below, Mortgagor shall pay all reasonable fees and costs that Mortgagee may incur in filing such documents in public offices and in obtaining such record searches as Mortgagee

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may reasonably require. In case Mortgagor fails to execute any financing statements or other documents for the perfection or continuation of any security interest, Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact to execute any such documents on its behalf. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never be construed as in any way derogating from or impairing this Mortgage or the rights or obligations of the parties under it.

4. Fixture Filing.

This Mortgage constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code in the State in which the Property is located, as amended or recodified from time to time, covering any Property which now is or later may become fixtures attached to the Land or Improvements. For this purpose, the respective addresses of Mortgagor, as debtor, and Mortgagee, as secured party, are as set forth in the preambles of this Mortgage.

5. Rights and Duties of the Parties.

5.1 Representations and Warranties. Mortgagor represents and warrants that:

(a) Subject to the Batesville Permitted Exceptions, Mortgagor lawfully possesses and holds fee simple title to all of the Land and Improvements;

(b) Mortgagor has good and marketable title to all Property other than the Land and Improvements;

(c) Mortgagor has the full and unlimited power, right and authority to encumber the Property and assign the Rents;

(d) This Mortgage creates a first and prior lien on the Property;

(e) The Property includes all property and rights which may be reasonably necessary or desirable to promote the present and contemplated future beneficial use and enjoyment of the Land and Improvements;

(f) Mortgagor owns any Property which is personal property free and clear of any security agreements, reservations of title or conditional sales contracts, and there is no financing statement affecting such personal property on file in any public office; and

(g) Mortgagor’s place of business, or its chief executive office if it has more than one place of business, is located at the address specified below.

5.2 Taxes, and Assessments. Mortgagor shall, or shall cause the Batesville Operator to, prior to delinquency, pay all taxes, levies, charges and assessments, in accordance with the Loan Agreement.

5.3 Performance of Secured Obligations. Mortgagor shall promptly pay and perform each Secured Obligation in accordance with its terms.

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5.4 Liens, Charges and Encumbrances. Mortgagor shall, or shall cause the Batesville Operator to, immediately discharge any lien on the Property which Mortgagee has not consented to in writing. Mortgagee has not consented and will not consent to any contract or to any work or to the furnishing of any materials which might be deemed to create a lien or liens superior to the lien of this instrument, either under Ark. Code Ann. §18-44-110, or otherwise, unless by signed, recorded writing, which consent Mortgagee may refuse to give in its sole and absolute discretion.

5.5 Damages and Insurance and Condemnation Proceeds. In the event of any casualty or condemnation of the Property, the provisions of Article 15 of the Loan Agreement shall govern.

5.6 Maintenance and Preservation of Property.

(a) Mortgagor shall, or shall cause the Batesville Operator to, insure the Property as required by the Loan Agreement and keep the Property in good condition and repair.

(b) Mortgagor shall not remove or demolish the Property or any part of it, or alter, restore or add to the Property, or initiate or allow any change in any zoning or other land use classification which affects the Property or any part of it, except as permitted or required by the Loan Agreement or with Mortgagee’s express prior written consent in each instance.

(c) If all or part of the Property becomes damaged or destroyed, Mortgagor shall, or shall cause the Batesville Operator to, promptly and completely repair and/or restore the Property in a good and workmanlike manner in accordance with sound building practices, regardless of whether or not Mortgagee agrees to disburse Proceeds or other sums to pay costs of the work of repair or reconstruction under the Loan Agreement.

(d) Mortgagor shall not commit or allow any act upon or use of the Property which would violate: (i) any applicable Laws or order of any Governmental Authority, whether now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or private covenant, condition, restriction or equitable servitude affecting the Property. Mortgagor shall not bring or keep any article on the Property or cause or allow any condition to exist on it, if that could invalidate or would be prohibited by any insurance coverage required to be maintained by Mortgagor on the Property or any part of it under the Loan Agreement.

(e) Mortgagor shall not commit or allow waste of the Property, including those acts or omissions characterized under the Loan Agreement as waste which arises out of Hazardous Material.

(f) Mortgagor shall, or shall cause the Batesville Operator to, perform all other acts which from the character or use of the Property may be reasonably necessary to maintain and preserve its value.

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5.7 Releases, Extensions, Modifications and Additional Security. From time to time, Mortgagee may perform any of the following acts without incurring any liability or giving notice to any person:

(a) Release any person liable for payment of any Secured Obligation;

(b) Extend the time for payment, or otherwise alter the terms of payment, of any Secured Obligation;

(c) Accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security;

(d) Alter, substitute, or release any property securing the Secured Obligations;

(e) Consent to the making of any plat or map of the Property or any part of it;

(f) Join in granting any easement or creating any restriction affecting the Property;

(g) Join in any subordination or other agreement affecting this Mortgage or the lien of it; or

(h) Release the Property or any part of it.

5.8 Release. When all of the Secured Obligations have been paid in full and all fees and other sums owed by Mortgagor under Section 5.9 of this Mortgage and the other Loan Documents have been received, Mortgagee shall release this Mortgage, the lien created thereby, and all notes and instruments evidencing the Secured Obligations. Mortgagor shall pay any costs of preparation and recordation of such release.

5.9 Compensation, Exculpation, Indemnification.

(a) Mortgagor agrees to pay fees in the maximum amounts legally permitted, or reasonable fees as may be charged by Mortgagee when the law provides no maximum limit, for any reasonable services that Mortgagee may render in connection with this Mortgage, including providing a statement of the Secured Obligations or providing the release pursuant to Section 5.8 above. Mortgagor shall also pay or reimburse all of Mortgagee’s reasonable costs and expenses which may be incurred in rendering any such services. Mortgagor further agrees to pay or reimburse Mortgagee for all reasonable costs, expenses and other advances which may be incurred or made by Mortgagee in any efforts to enforce any terms of this Mortgage, including any rights or remedies afforded to Mortgagee under Section 6.3, whether any lawsuit is filed or not, or in defending any action or proceeding arising under or relating to this Mortgage, including reasonable attorneys’ fees and other legal costs, costs of any Foreclosure Sale (as defined in Subsection 6.3(i) below) and any cost of evidence of title. If Mortgagee, as required by applicable law, chooses to dispose of Property through more than one Foreclosure Sale, Mortgagor shall pay all reasonable costs, expenses or other advances that may be incurred or made by Mortgagee in each of such Foreclosure Sales.

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(b) Mortgagee shall not be directly or indirectly liable to Mortgagor or any other person as a consequence of any of the following:

(i) Mortgagee’s exercise of or failure to exercise any rights, remedies or powers granted to Mortgagee in this Mortgage;

(ii) Mortgagee’s failure or refusal to perform or discharge any obligation or liability of Mortgagor under any agreement related to the Property or under this Mortgage; or

(iii) Any loss sustained by Mortgagor or any third party resulting from Mortgagee’s failure to lease the Property, or from any other act or omission of Mortgagee in managing the Property, after an Event of Default, unless the loss is caused by the gross negligence or willful misconduct of Mortgagee.

Mortgagor hereby expressly waives and releases all liability of the types described above, and agrees that no such liability shall be asserted against or imposed upon Mortgagee.

(c) EXCEPT AS CAUSED BY THE GROSS NEGLIGENCE AND OR WILLFUL MISCONDUCT OF MORTGAGEE (IT BEING THE INTENT OF THE PARTIES THAT THIS INDEMNIFICATION SHALL COVER THE NEGLIGENCE OF SUCH PARTIES), MORTGAGOR AGREES TO INDEMNIFY MORTGAGEE AGAINST AND HOLD THEM HARMLESS FROM ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, CAUSES OF ACTION, JUDGMENTS, COURT COSTS, ATTORNEYS’ FEES AND OTHER LEGAL EXPENSES, COST OF EVIDENCE OF TITLE, COST OF EVIDENCE OF VALUE, AND OTHER COSTS AND EXPENSES WHICH THEY MAY SUFFER OR INCUR:

(i) IN PERFORMING ANY ACT REQUIRED OR PERMITTED BY THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS OR BY LAW;

(ii) BECAUSE OF ANY FAILURE OF MORTGAGOR TO PERFORM ANY OF ITS OBLIGATIONS; OR

(iii) BECAUSE OF ANY ALLEGED OBLIGATION OF OR UNDERTAKING BY MORTGAGEE TO PERFORM OR DISCHARGE ANY OF THE REPRESENTATIONS, WARRANTIES, CONDITIONS, COVENANTS OR OTHER OBLIGATIONS IN ANY DOCUMENT RELATING TO THE PROPERTY OTHER THAN THE LOAN DOCUMENTS.

THIS AGREEMENT BY MORTGAGOR TO INDEMNIFY MORTGAGEE SHALL SURVIVE THE RELEASE AND CANCELLATION OF ANY OR ALL OF THE SECURED OBLIGATIONS AND THE FULL OR PARTIAL RELEASE OF THIS MORTGAGE.

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(d) Mortgagor shall pay all obligations to pay money arising under this Section 5.9 immediately upon demand by Mortgagee. Each such obligation shall be added to, and considered to be part of, the principal of the Note, and shall bear interest from the date the obligation arises at the Default Rate.

5.10 Defense and Notice of Claims and Actions. At Mortgagor’s sole expense, Mortgagor shall protect, preserve and defend the Property and title to and right of possession of the Property, and the security of this Mortgage and the rights and powers of Mortgagee created under it, against all adverse claims. Mortgagor shall give Mortgagee prompt notice in writing if any claim is asserted which does or could affect any such matters, or if any action or proceeding is commenced which alleges or relates to any such claim.

5.11 Subrogation. Mortgagee shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Mortgagee in accordance with this Mortgage or with the proceeds of any loan secured by this Mortgage.

5.12 Site Visits, Observation and Testing. Mortgagee and its agents and representatives shall have the right at any reasonable time to enter and visit the Property for the purpose of performing appraisals, observing the Property, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. Mortgagee has no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation or testing by Mortgagee, its agents or representatives shall impose any liability on any of Mortgagee, its agents or representatives. In no event shall any site visit, observation or testing by Mortgagee, its agents or representatives be a representation that Hazardous Material are or are not present in, on or under the Property, or that there has been or shall be compliance with any law, regulation or ordinance pertaining to Hazardous Material or any other applicable governmental law. Neither Mortgagor nor any other party is entitled to rely on any site visit, observation or testing by any of Mortgagee, its agents or representatives. Neither Mortgagee, its agents or representatives owe any duty of care to protect Mortgagor or any other party against, or to inform Mortgagor or any other party of, any Hazardous Material or any other adverse condition affecting the Property. Mortgagee shall give Mortgagor reasonable notice before entering or visiting the Property. Mortgagee shall make reasonable efforts to avoid interfering with Mortgagor’s or the Batesville Operator’s use of the Property in exercising any rights provided in this Section 5.12.

5.13 Notice of Change. Mortgagor shall give Mortgagee prior written notice of any change in: (a) the location of its place of business or its chief executive office if it has more than one place of business; (b) the location of any of the Property, including the Books and Records; and (c) Mortgagor’s name or business structure. Unless otherwise approved by Mortgagee in writing, all Property that consists of personal property (other than the Books and Records) will be located on the Land and all Books and Records will be located at Mortgagor’s place of business or chief executive office if Mortgagor has more than one place of business.

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6. Accelerating Transfers, Default and Remedies.

6.1 Accelerating Transfers.

(a) “Accelerating Transfer” means any Transfer not expressly permitted under Article 12 of the Loan Agreement.

(b) Mortgagor acknowledges that Mortgagee is making one or more advances under the Loan Agreement in reliance on the expertise, skill and experience of Mortgagor; thus, the Secured Obligations include material elements similar in nature to a personal service contract. In consideration of Mortgagee’s reliance, Mortgagor agrees that Mortgagor shall not make any Accelerating Transfer, unless the transfer is preceded by Mortgagee’s express written consent to the particular transaction and transferee. Mortgagee may withhold such consent in its sole discretion. If any Accelerating Transfer occurs, Mortgagee in its sole discretion may declare all of the Secured Obligations to be immediately due and payable, and Mortgagee may invoke any rights and remedies provided by Section 6.3 of this Mortgage.

6.2 Events of Default. Mortgagor will be in default under this Mortgage upon the occurrence of any one or more of the following events (some or all collectively, “Events of Default;” any one singly, an “Event of Default”).

(a) Failure of Mortgagor (i) (x) to pay any of the principal or interest of the Loan within ten (10) days after the date when due or (y) to observe or perform any of the other covenants or conditions by Mortgagor to be performed under the terms of this Mortgage or any of the other Loan Documents concerning the payment of money for a period of ten (10) days after written notice from Mortgagee that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Mortgagee, to observe or perform any non-monetary covenant or condition contained in this Mortgage or any of the other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure but cannot reasonably be cured within said thirty (30) day period, then Mortgagor shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as Mortgagor commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Mortgagee’s notice; or

(b) An “Event of Default” occurs under the Loan Agreement or any other Loan Document.

6.3 Remedies. At any time after an Event of Default, Mortgagee shall be entitled to invoke any and all of the rights and remedies described below, in addition to all other rights and remedies available to Mortgagee at law or in equity. All of such rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies.

(a) Acceleration. Mortgagee may declare any or all of the Secured Obligations to be due and payable immediately.

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(b) Receiver. Mortgagee shall, as a matter of right, without notice and without giving bond to Mortgagor or anyone claiming by, under or through Mortgagor, and without regard for the solvency or insolvency of Mortgagor or the then value of the Property, to the extent permitted by applicable law, be entitled to have a receiver appointed for all or any part of the Property and the Rents, and the proceeds, issues and profits thereof, with the rights and powers referenced below and such other rights and powers as the court making such appointment shall confer, and Mortgagor hereby consents to the appointment of such receiver and shall not oppose any such appointment. Such receiver shall have all powers and duties prescribed by applicable law, all other powers which are necessary or usual in such cases for the protection, possession, control, management and operation of the Property, and such rights and powers as Mortgagee would have, upon entering and taking possession of the Property under subsection (c) below.

(c) Entry. Mortgagee, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Mortgagee may in its sole discretion consider necessary and appropriate to protect the security of this Mortgage. Such other things may include: taking and possessing all of Mortgagor’s or the then owner’s Books and Records; entering into, enforcing, modifying or canceling leases on such terms and conditions as provided in such leases and as Mortgagee may consider proper; obtaining and evicting tenants and fixing or modifying Rents, subject to the terms of each tenant’s respective lease; collecting and receiving any payment of money owing to Mortgagee; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Mortgagee so requests, Mortgagor shall assemble all of the Property that has been removed from the Land and make all of it available to Mortgagee at the site of the Land. Mortgagor hereby irrevocably constitutes and appoints Mortgagee as Mortgagor’s attorney-in-fact to perform such acts and execute such documents as Mortgagee in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Mortgagor’s name on any instruments.

(d) Cure; Protection of Security. Mortgagee may cure any breach or default of Mortgagor, and if it chooses to do so in connection with any such cure, Mortgagee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Mortgage, including, without limitation, completing construction of the improvements at the Property contemplated by the Loan Agreement. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Mortgagee under, this Mortgage; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Mortgagee’s sole judgment is or may be senior in priority to this Mortgage, such judgment of Mortgagee or to be conclusive as among the parties to this Mortgage; obtaining insurance and/or paying any premiums or charges for insurance required to be carried under the Loan Agreement; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Mortgagee. Mortgagee may take any of the actions permitted under this Subsection 6.3(d) either with or without giving notice to any person. Any amounts expended by Mortgagee under this Subsection 6.3(d) shall be secured by this Mortgage.

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(e) Uniform Commercial Code Remedies. Mortgagee may exercise any or all of the remedies granted to a secured party under the Uniform Commercial Code in the State in which the Property is located.

(f) Foreclosure; Lawsuits. Mortgagee shall have the right, in one or several concurrent or consecutive proceedings, to foreclose the lien hereof upon the Property or any part thereof, for the Secured Obligations, or any part thereof, by any proceedings appropriate under applicable law. Mortgagee or its nominee may bid and become the purchaser of all or any part of the Property at any foreclosure or other sale hereunder, and the amount of Mortgagee’s successful bid shall be credited on the Secured Obligations. Without limiting the foregoing, Mortgagee may proceed by a suit or suits in law or equity, whether for specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure under the judgment or decree of any court of competent jurisdiction.

(g) Other Remedies. Mortgagee may exercise all rights and remedies contained in any other instrument, document, agreement or other writing heretofore, concurrently or in the future executed by Mortgagor or any other person or entity in favor of Mortgagee in connection with the Secured Obligations or any part thereof, without prejudice to the right of Mortgagee thereafter to enforce any appropriate remedy against Mortgagor. Mortgagee shall have the right to pursue all remedies afforded to a “mortgagee” under applicable law, and shall have the benefit of all of the provisions of such applicable law, including all amendments thereto which may become effective from time to time after the date hereof.

(h) Sale of Personal Property. Mortgagee, as required by applicable law, shall have the discretionary right to cause some or all of the Property, which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

(i) For purposes of this power of sale, Mortgagee, as required by applicable law, may elect to treat as personal property any Property which is intangible or which can be severed from the Land or Improvements without causing structural damage. If it chooses to do so, Mortgagee, as required by applicable law, may dispose of any personal property, in any manner permitted by Article 9 of the Uniform Commercial Code of the State in which the Property is located, including any public or private sale, or in any manner permitted by any other applicable law.

(ii) In connection with any sale or other disposition of such Property, Mortgagor agrees that the following procedures constitute a commercially reasonable sale: Mortgagee shall mail written notice of the sale to Mortgagor not later than thirty (30) days prior to such sale. Mortgagee will publish notice of the sale in a local daily newspaper of general circulation. Upon receipt of any written

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request, Mortgagee will make the Property available to any bona fide prospective purchaser for inspection during reasonable business hours. Notwithstanding, Mortgagee shall be under no obligation to consummate a sale if, in its judgment, none of the offers received by it equals the fair value of the Property offered for sale. The foregoing procedures do not constitute the only procedures that may be commercially reasonable.

(i) Foreclosure Sales. Mortgagee may proceed with foreclosure under the power of sale (a “Foreclosure Sale”) which is hereby conferred, such foreclosure to be accomplished in accordance with the following provisions:

(i) Mortgagee is hereby authorized and empowered to sell the Property or any part thereof, with or without having taken possession of same. Any such sale (including notice thereof) shall comply with the applicable requirements governing sales of Arkansas real property under powers of sale conferred by mortgages or deeds of trust. If there is no statute in force at the time of the sale governing sales of Arkansas real property under powers of sale conferred by mortgages or deeds of trust, such sale shall comply with applicable law, at the time of the sale, governing sales of Arkansas real property under powers of sale conferred by mortgages or deeds of trust.

(ii) In addition to the rights and powers of sale granted under the preceding provisions of this Subsection, if default is made in the payment of any installment of the Secured Obligations and such default continues beyond any applicable grace period, Mortgagee may, at Mortgagee’s option, at once or at any time thereafter while any matured installment remains unpaid, without declaring the entire Secured Obligations to be due and payable, sell the Property subject to such unmatured indebtedness and to the rights, powers, liens, security interests and assignments securing or providing recourse for payment of such unmatured indebtedness, in the same manner, all as provided in the preceding provisions of this Subsection. Sales made without maturing the Secured Obligations may be made hereunder whenever there is a default in the payment of any installment of the Secured Obligations, without exhausting the power of sale granted hereby, and without affecting in any way the power of sale granted under this Subsection, the unmatured balance of the Secured Obligations or the rights, powers, liens, security interests and assignments securing or providing recourse for payment of the Secured Obligations.

(iii) Sale of a part of the Property shall not exhaust the power of sale, but sales may be made from time to time until the Secured Obligations are paid and performed in full. It is intended by each of the foregoing provisions of this Subsection that Mortgagee may sell not only the Land and the Improvements, but also the Accessories and other interests constituting a part of the Property or any part thereof, along with the Land and the Improvements or any part thereof, as a unit and as a part of a single sale, or may sell any part of the Property separately from the remainder of the Property. It shall not be necessary to have present or to exhibit at any sale any of the Property.

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(iv) After any sale under this Subsection, Mortgagee shall make good and sufficient deeds, assignments and other conveyances to the purchaser or purchasers thereunder in the name of Mortgagor, conveying the Property or any part thereof so sold to the purchaser or purchasers with general warranty of title by Mortgagor. It is agreed that, in any deeds, assignments or other conveyances given by Mortgagee, any and all statements of fact or other recitals therein made as to the identity of Mortgagee, or as to the occurrence or existence of any Default, or as to the acceleration of the maturity of the Secured Obligations, or as to the request to sell, notice of sale, time, place, terms and manner of sale, and receipt, distribution and application of the money realized therefrom, and, without being limited by the foregoing, as to any other act or thing having been duly done by or on behalf of Mortgagee, shall be taken by all courts of law and equity as prima facie evidence that the said statements or recitals state facts and are without further question to be so accepted, and Mortgagor does hereby ratify and confirm any and all acts that Mortgagee may lawfully do in the premises by virtue hereof.

6.4 Credit Bids. At any Foreclosure Sale, any person, including Mortgagor or Mortgagee, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Mortgagee may settle for the purchase price by crediting the sales price of the property against the following obligations:

(a) First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Mortgagor is obligated to pay or reimburse Mortgagee under Section 5.9 of this Mortgage; and

(b) Second, all other Secured Obligations in any order and proportions as Mortgagee in its sole discretion may choose.

6.5 Application of Foreclosure Sale Proceeds. Mortgagee shall apply the proceeds of any Foreclosure Sale in the following manner:

(a) First, to pay the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Mortgagor is obligated to reimburse Mortgagee under Section 5.9 of this Mortgage;

(b) Second, to pay the portion of the Secured Obligations attributable to any sums expended or advanced by Mortgagee under the terms of this Mortgage which then remain unpaid;

(c) Third, to pay all other Secured Obligations in any order and proportions as Mortgagee in its sole discretion may choose; and

(d) Fourth, to remit the remainder, if any, to the person or persons entitled to it by law.

6.6 Application of Rents and Other Sums. Mortgagee shall apply any and all Rents collected by it, and any and all sums other than proceeds of a Foreclosure Sale which Mortgagee may receive or collect under Section 6.3 above, in the following manner:

(a) First, to pay the portion of the Secured Obligations attributable to the costs and expenses of operation and collection that may be incurred by Mortgagee or any receiver;

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(b) Second, to pay all other Secured Obligations in any order and proportions as Mortgagee in its sole discretion may choose; and

(c) Third, to remit the remainder, if any, to the person or persons entitled to it by law.

Mortgagee shall have no liability for any funds which it does not actually receive.

7. The Mortgagee.

7.1 Certain Rights. Mortgagee shall have the right to take any and all of the following actions: (i) to select, employ and consult with counsel (who may be, but need not be, counsel for Mortgagee) upon any matters arising hereunder, including the preparation, execution and interpretation of the Loan Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through his or her agents or attorneys, (iii) to select and employ, in and about the execution of his or her duties hereunder, suitable accountants, engineers and other experts, agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of Mortgagee (and Mortgagee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act done by Mortgagee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Mortgagee’s gross negligence or bad faith), and (iv) any and all other lawful action that Mortgagee may protect or enforce Mortgagee’s rights hereunder. Mortgagee shall not be personally liable in case of entry by Mortgagee, or anyone entering by virtue of the powers herein granted to Mortgagee, upon the Land for debts contracted for or liability or damages incurred in the management or operation of the Land. Mortgagee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by Mortgagee hereunder, believed by Mortgagee in good faith to be genuine. Mortgagee shall be entitled to reimbursement for reasonable expenses incurred by Mortgagee in the performance of Mortgagee’s duties hereunder. Mortgagor will save and hold Mortgagee harmless against, any and all liability and expenses which may be incurred by Mortgagee in the performance of Mortgagee’s duties.

7.2 Retention of Money. All moneys received by Mortgagee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, and shall be segregated from any other moneys of Mortgagee.

7.3 Perfection of Appointment. Should any deed, conveyance, or instrument of any nature be required from Mortgagor by Mortgagee to more fully and certainly vest in and confirm to Mortgagee such estates, rights, powers, and duties, then, upon request by Mortgagee, any and all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Mortgagor.

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7.4 No Representation by Mortgagee. By accepting or approving anything required to be observed, performed, or fulfilled or to be given to Mortgagee pursuant to the Loan Documents, Mortgagee shall not be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or affirmation with respect thereto by Mortgagee.

8. Miscellaneous Provisions.

8.1 Additional Provisions. The Loan Documents fully state all of the terms and conditions of the parties’ agreement regarding the matters mentioned in or incidental to this Mortgage. The Loan Documents also grant further rights to Mortgagee and contain further agreements and affirmative and negative covenants by Mortgagor which apply to this Mortgage and to the Property.

8.2 No Waiver or Cure.

(a) Each waiver by Mortgagee must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Mortgagee to take action on account of any default of Mortgagor. Consent by Mortgagee to any act or omission by Mortgagor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Mortgagee’s consent to be obtained in any future or other instance.

(b) If any of the events described below occurs, that event alone shall not: cure or waive any breach, Event of Default or notice of default under this Mortgage or invalidate any act performed pursuant to any such default or notice; or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and all other defaults under the Loan Documents have been cured); or impair the security of this Mortgage; or prejudice Mortgagee or any receiver in the exercise of any right or remedy afforded any of them under this Mortgage; or be construed as an affirmation by Mortgagee of any tenancy, lease or option, or a subordination of the lien of this Mortgage.

(i) Mortgagee, its agent or a receiver takes possession of all or any part of the Property in the manner provided in Subsection 6.3(c).

(ii) Mortgagee collects and applies Rents as permitted under Sections 2.3 and 6.6 above, either with or without taking possession of all or any part of the Property.

(iii) Mortgagee receives and applies to any Secured Obligation any proceeds of any Property, including any proceeds of insurance policies, condemnation awards, or other claims, property or rights assigned to Mortgagee under Section 5.5 above.

(iv) Mortgagee makes a site visit, observes the Property and/or conducts tests as permitted under Section 5.12 above.

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(v) Mortgagee receives any sums under this Mortgage or any proceeds of any collateral held for any of the Secured Obligations, and applies them to one or more Secured Obligations.

(vi) Mortgagee or any receiver invokes any right or remedy provided under this Mortgage.

8.3 Powers of Mortgagee.

(a) If Mortgagee performs any act which it is empowered or authorized to perform under this Mortgage, including any act permitted by Section 5.7 or Subsection 6.3(d) of this Mortgage, that act alone shall not release or change the personal liability of any person for the payment and performance of the Secured Obligations then outstanding, or the lien of this Mortgage on all or the remainder of the Property for full payment and performance of all outstanding Secured Obligations. The liability of the original Mortgagor shall not be released or changed if Mortgagee grants any successor in interest to Mortgagor any extension of time for payment, or modification of the terms of payment, of any Secured Obligation. Mortgagee shall not be required to comply with any demand by the original Mortgagor that Mortgagee refuse to grant such an extension or modification to, or commence proceedings against, any such successor in interest.

(b) Mortgagee may take any of the actions in accordance with the terms of and permitted under Subsections 6.3(b) and/or 6.3(c) regardless of the adequacy of the security for the Secured Obligations, or whether any or all of the Secured Obligations have been declared to be immediately due and payable, or whether notice of default and election to sell has been given under this Mortgage.

(c) From time to time, Mortgagee may apply to any court of competent jurisdiction for aid and direction in executing and enforcing the rights and remedies created under this Mortgage. Mortgagee may from time to time obtain orders or decrees directing, confirming or approving acts in executing and enforcing these rights and remedies.

8.4 Merger. No merger shall occur as a result of Mortgagee’s acquiring any other estate in or any other lien on the Property unless Mortgagee consents to a merger in writing.

8.5 Joint and Several Liability. If Mortgagor consists of more than one person, each shall be jointly and severally liable for the faithful performance of all of Mortgagor’s obligations under this Mortgage.

8.6 Applicable Law. The creation, perfection and enforcement of the lien of this Mortgage shall be governed by the law of the State in which the Property is located. Subject to the foregoing, in all other respects, this Mortgage shall be governed by the substantive laws of the State of Ohio.

8.7 Successors in Interest. The terms, covenants and conditions of this Mortgage shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties. However, this Section 8.7 does not waive the provisions of Section 6.1 above.

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8.8 Interpretation.

(a) Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the sections of this Mortgage are for convenience only and do not define or limit any terms or provisions. The word “include(s)” means “include(s), without limitation,” and the word “including” means “including, but not limited to.”

(b) The word “obligations” is used in its broadest and most comprehensive sense, and includes all primary, secondary, direct, indirect, fixed and contingent obligations. It further includes all principal, interest, prepayment charges, late charges, loan fees and any other fees and charges accruing or assessed at any time, as well as all obligations to perform acts or satisfy conditions.

(c) No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Mortgage. The Exhibits to this Mortgage are hereby incorporated in this Mortgage.

8.9 In-House Counsel Fees. Whenever Mortgagor is obligated to pay or reimburse Mortgagee for any attorneys’ fees, those fees shall include the allocated costs for services of in-house counsel.

8.10 Waiver of Statutory Rights. To the extent permitted by law, Mortgagor hereby agrees that it shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so-called “Moratorium Laws,” now existing or hereafter enacted, in order to prevent or hinder the enforcement or foreclosure of this Mortgage, but hereby waives the benefit of such laws. Mortgagor for itself and all who may claim through or under it waives any and all right to have the property and estates comprising the Property marshaled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the Property sold as an entirety. Mortgagor hereby waives any and all rights of redemption from sale under any judgment of foreclosure of this Mortgage on behalf of Mortgagor and on behalf of each and every person acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the date of this Mortgage, including, particularly, all right of redemption under §18-49-106 of the Arkansas Code Annotated. The foregoing waiver of right of redemption is made pursuant to the provisions of applicable law.

8.11 Severability. If any provision of this Mortgage should be held unenforceable or void, that provision shall be deemed severable from the remaining provisions and shall in no way affect the validity of this Mortgage except that if such provision relates to the payment of any monetary sum, then Mortgagee may, at its option, declare all Secured Obligations immediately due and payable.

8.12 Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c)

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if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

If to Mortgagor:

CHP Batesville Healthcare Owner, LLC

c/o CNL Healthcare Properties, Inc.

450 South Orange Avenue

Orlando, Florida 32801

Attention: Joseph T. Johnson,

                  Senior Vice President and Chief Financial Officer

Attention: Holly J. Greer, Esq., Senior Vice President and General Counsel

Telephone: (407) 540-7500

Facsimile: (407) 540-2544

With a copy to:

Lowndes Drosdick Doster Kantor & Reed, P.A.

215 North Eola Drive

Orlando, Florida 32801

Attention: Peter L. Lopez, Esq.

Telephone: (407) 843-4600

Facsimile: (407) 843-4444

If to Mortgagee:

KeyBank National Association

Mailcode: OH-01-51-0311

4910 Tiedeman Road, 3rd Floor

Brooklyn, Ohio 44144

Attention: Amy L. MacLearie,

                  KREC Commercial Loan Closer-Assistant Vice President

Telephone: (216) 813-6935

Facsimile: (216) 357-6383

With a copy to:

Alfred G. Kyle, Esq.

Bracewell & Giuliani LLP

1445 Ross Avenue, Suite 3800

Dallas, Texas 75202

Telephone: (214) 758-1660

Facsimile: (214) 758-8360

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

8.13 Future Advances. The total amount of indebtedness secured hereby may increase or decrease from time to time, but the total unpaid principal balance of indebtedness secured hereby (including disbursements that the Bank may, but shall not be obligated to, make under

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this Mortgage, the Loan Documents or any other document with respect thereto) at any one time outstanding may be substantially less but shall be limited to all indebtedness reasonably contemplated by the parties for the Project as of the date hereof, including, without limitation, any disbursements made for the enforcement of this Mortgage and any remedies hereunder, payment of taxes, special assessments, utilities or insurance on the Property and interest on such disbursements and all disbursements by Mortgagee pursuant to applicable law (all such indebtedness being hereinafter referred to as the maximum amount secured hereby). This Mortgage shall be valid and have priority to the extent of the maximum amount secured hereby over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the Property given priority by law, AND IT IS AGREED THAT THIS MORTGAGE SHALL STAND AS SECURITY FOR ANY AND ALL FUTURE AND ADDITIONAL INDEBTEDNESS OF BORROWERS TO THE LENDERS, WHETHER IT BE INCURRED FOR ANY BUSINESS PURPOSE THAT WAS RELATED OR WHOLLY UNRELATED TO THE PURPOSE OF THE ORIGINAL LOAN, OR WHETHER IT WAS INCURRED FOR SOME PERSONAL OR NONBUSINESS PURPOSE, OR FOR ANY OTHER PURPOSE RELATED OR UNRELATED, OR SIMILAR OR DISSIMILAR, TO THE PURPOSE OF THE ORIGINAL LOAN.

8.14 Mortgagee’s Lien for Service Charge and Expenses. At all times, regardless of whether any Loan proceeds have been disbursed, this Mortgage secures (in addition to any Loan proceeds disbursed from time to time) the payment of any and all loan commissions, service charges, liquidated damages, expenses and advances due to or incurred by Mortgagee not to exceed the maximum amount secured hereby.

8.15 WAIVER OF TRIAL BY JURY. MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS MORTGAGE, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN OR ANY OTHER STATEMENTS OR ACTIONS OF MORTGAGOR OR MORTGAGEE. MORTGAGOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. MORTGAGOR FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR MORTGAGEE TO MAKE THE LOAN, ENTER INTO THIS MORTGAGE AND EACH OF THE OTHER LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

8.16 Inconsistencies. In the event of any inconsistency between this Mortgage and the Loan Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or maintain a valid security interest upon the Property, otherwise the provisions of the Loan Agreement shall be controlling.

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8.17 Controlling Agreement. The parties hereto intend to conform strictly to the applicable usury laws. All agreements between Mortgagor (and any other party liable for any part of the Secured Obligations) and Mortgagee, whether now existing or hereafter arising and whether written or oral, are expressly limited so that in no event whatsoever, whether by reason of acceleration of the maturity of the Secured Obligations or otherwise, shall the interest contracted for, charged or received by Mortgagee hereunder or otherwise exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever interest would otherwise be payable to Mortgagee in excess of the maximum lawful amount, the interest payable to Mortgagee shall be reduced automatically to the maximum amount permitted under applicable law. If Mortgagee shall ever receive anything of value deemed interest under applicable law which would apart from this provision be in excess of the maximum lawful amount, the amount which would have been excessive interest shall be applied to the reduction of the principal amount owing on the Secured Obligations in inverse order of maturity and not to the payment of interest, or if such amount which would have been excessive interest exceeds the unpaid principal balance of the Secured Obligations, such excess shall be refunded to Mortgagor, or to the maker of the Note or other evidence of indebtedness if other than Mortgagor. All interest paid or agreed to be paid to Mortgagee shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term, including any renewal or extension, of such indebtedness so that the amount of interest on account of such indebtedness does not exceed the maximum permitted by applicable law. The terms and provisions of this section shall control and supersede every other provision of all existing and future agreements between Mortgagor, the maker of the Note or other evidence of indebtedness if other than Mortgagor, and Mortgagee.

THIS MORTGAGE, THE LOAN AGREEMENT, AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions hereof and the other Loan Documents may be amended or waived only by an instrument in writing signed by the Mortgagor and Mortgagee.

[INTENTIONALLY BLANK]

MORTGAGE Page 22

IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date first above written.

MORTGAGOR:
CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Steven M. Wortman
	Steven M. Wortman, Senior Vice President

STATE OF FLORIDA	)
	)	SS:
COUNTY OF ORANGE	)

The foregoing instrument was acknowledged before me this 24th day of May, 2013, by Steven M. Wortman, Senior Vice President of CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company, on behalf of said limited liability company. He is personally known to me or has produced                                               as identification.

Sign Name:	/s/ Tresa Bagwell
	Notary Public
Print Name:	Tresa Bagwell

Serial No. (if any):

[NOTARIAL SEAL]

My Commission Expires: August 23, 2013

MORTGAGE Page 23

EXHIBIT A

Description of Land

[Intentionally Omitted]

EXHIBIT B

Permitted Exceptions

[Intentionally Omitted]

EX-10.6

Exhibit 10.6

BATESVILLE HEALTHCARE CENTER

BATESVILLE, ARKANSAS

LEASE AGREEMENT

DATED AS OF MAY 31, 2013

BY AND BETWEEN

CHP BATESVILLE HEALTHCARE OWNER, LLC,

A DELAWARE LIMITED LIABILITY COMPANY,

AS LANDLORD,

AND

BATESVILLE HEALTH AND REHAB, LLC,

AN ARKANSAS LIMITED LIABILITY COMPANY,

AS TENANT

TABLE OF CONTENTS

		Page
ARTICLE 1 DEFINITIONS			2
ARTICLE 2 LEASED PROPERTY AND TERM			13
2.1	Leased Property		13
2.2	Assignment of Permits		14
2.3	Assignment of Operating Contracts		14
2.4	Condition of Leased Property		14
2.5	Initial Term		15
2.6	Extended Terms		15
2.7	Yield Up		15
2.8	Grant of Easements, Etc. by Landlord		16
ARTICLE 3 RENT			16
3.1	Rent		16
3.2	Minimum Rent		16
3.3	Intentionally Omitted		17
3.4	Additional Charges		17
3.5	Landlord Advances		18
3.6	Late Payment of Rent		18
3.7	Net Lease		19
3.8	No Abatement of Rent		20
3.9	Tenant Security Deposit		20
3.10	Security for Lease		21
3.11	Security Agreement		21
ARTICLE 4 USE OF THE LEASED PROPERTY			21
4.1	Permitted Use		21
4.2	Environmental Matters		23
4.3	Continuous Operations		24
4.4	Compliance With Restrictions, Etc		24
4.5	Standard of Operation		24
4.6	Standards, Not Control		25
4.7	Survival		25
ARTICLE 5 MAINTENANCE AND REPAIRS			26
5.1	Tenant’s Obligations		26
5.2	Reserve		26
5.3	Landlord Funding		29
ARTICLE 6 IMPROVEMENTS, ETC			30
6.1	Prohibition		30
6.2	Permitted Renovations		30
6.3	Conditions to Reserve Expenditures and Permitted Renovations		31
6.4	Salvage		32
6.5	Project Budget Overruns		32

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ARTICLE 7 LANDLORD’S INTEREST NOT SUBJECT TO LIENS		32
7.1	Liens, Generally	32
7.2	Construction or Mechanics Liens	33
7.3	Contest of Liens	34
7.4	Notices of Commencement of Construction	34
ARTICLE 8 TAXES AND ASSESSMENTS		34
8.1	Obligation to Pay Taxes and Assessments	34
8.2	Tenant’s Right to Contest Taxes	35
8.3	Tax and Insurance Escrow Account	35
ARTICLE 9 INSURANCE		36
9.1	Insurance Requirements	36
9.2	Waiver of Subrogation	39
9.3	General Insurance Provisions	39
9.4	Indemnification of Landlord	40
ARTICLE 10 CASUALTY		41
10.1	Restoration and Repair	41
10.2	Escrow and Disbursement of Insurance Proceeds	42
10.3	No Abatement of Rent; Reduction in Adjusted Lease Basis	42
10.4	Business Interruption Insurance	43
10.5	Restoration of Tenant’s Property	43
10.6	Waiver	43
10.7	Rights of Mortgagee	43
ARTICLE 11 CONDEMNATION		43
11.1	Total Condemnation, Etc	43
11.2	Partial Condemnation	43
11.3	Disbursement of Award	44
11.4	No Abatement of Rent	44
ARTICLE 12 DEFAULTS AND REMEDIES		45
12.1	Tenant Events of Default	45
12.2	Landlord Remedies Upon An Event of Default by Tenant	47
12.3	Landlord Event of Default; Tenant Remedies	50
12.4	Application of Funds	51
12.5	Landlord’s Right to Cure Tenant’s Default	51
12.6	Landlord’s Security Interest and Lien	51
12.7	Collateral Assignment	52
ARTICLE 13 HOLDING OVER		53
ARTICLE 14 LIABILITY OF LANDLORD; INDEMNIFICATION		53
14.1	Liability of Landlord	53
14.2	Indemnification of Landlord	53
14.3	Notice of Claim or Suit	54
14.4	Limitation on Liability of Landlord	55
ARTICLE 15 REIT AND UBTI REQUIREMENTS		55
15.1	Limitations on Rents Attributable to Personal Property	55

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15.2	Basis for Sublease Rent Restricted	56
15.3	Landlord Affiliate Subleases Restricted	56
15.4	Landlord Interests in Tenant Restricted	56
15.5	Landlord Services	56
15.6	Certain Subtenants Prohibited	56
15.7	Future Amendment	56
ARTICLE 16 SUBLETTING AND ASSIGNMENT		56
16.1	Transfers Prohibited Without Consent	56
16.2	Indirect Transfer Prohibited Without Consent	57
16.3	Adequate Assurances	57
16.4	Landlord Transfers	58
ARTICLE 17 ESTOPPEL CERTIFICATES, FINANCIAL STATEMENTS AND OPERATING STATEMENTS		58
17.1	Estoppel Certificates	58
17.2	Monthly Financial Statements	58
17.3	Annual Financial Statements	59
17.4	Records	59
17.5	General Operations Budget	60
17.6	Quarterly Meetings	60
17.7	Tenant Financial Statements	60
17.8	Monthly Statements of Operations	61
17.9	Audit Rights	61
ARTICLE 18 LANDLORD’S RIGHT TO INSPECT		61
ARTICLE 19 FACILITY MORTGAGES		61
19.1	Subordination	61
19.2	Attornment	63
19.3	Rights of Mortgagees and Assignees	63
ARTICLE 20 ADDITIONAL COVENANTS OF TENANT		64
20.1	Conduct of Business	64
20.2	Additional Covenants of Tenant	64
20.3	Notice to Landlord of Severe Incident and/or Significant Property Damage	65
20.4	Leasehold Financing Prohibited	66
20.5	Resale Certificate	66
ARTICLE 21 MISCELLANEOUS		66
21.1	Limitation on Payment of Rent	66
21.2	No Waiver	67
21.3	Remedies Cumulative	67
21.4	Severability	67
21.5	Acceptance of Surrender	67
21.6	No Merger of Title	67
21.7	Tenant’s Representations	67
21.8	Quiet Enjoyment	69
21.9	Recordation of Memorandum of Lease	69

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21.10	Notices	69
21.11	Construction; Nonrecourse	70
21.12	Counterparts; Headings	71
21.13	Applicable Law	71
21.14	Right to Make Agreement	71
21.15	Brokerage	71
21.16	No Partnership or Joint Venture	72
21.17	Entire Agreement	72
21.18	Costs and Attorneys’ Fees	72
21.19	Approval of Landlord	72
21.20	Successors and Assigns	72
21.21	Waiver of Jury Trial	72
21.22	Treatment of Lease	73
21.23	Transfer of Permits and Operating Contracts	73
21.24	Confidential Information	74
21.25	Tenant’s Personal Property	74
21.26	No Third Party Beneficiaries	75
21.27	Option to Purchase	75
21.28	Right of First Refusal	75
21.29	Non-Solicitation	75
21.30	Community Fees	75

TABLE OF EXHIBITS

EXHIBIT A	-	The Land
EXHIBIT B	-	Minimum Rent
EXHIBIT C	-	Estoppel Certificate
EXHIBIT D	-	Memorandum of Lease
EXHIBIT E	-	Operating Contracts
EXHIBIT F	-	Permitted Encumbrances
EXHIBIT G	-	Initial Landlord P&E
EXHIBIT H	-	Tenant’s Personal Property
EXHIBIT I	-	Agreements With Affiliates
SCHEDULE 1	-	Affiliated Leases
SCHEDULE 12.6	-	Tenant Personal Property Exclusions
SCHEDULE 16.2	-	Tenant Organizational Chart

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LEASE AGREEMENT

This LEASE AGREEMENT (this “Lease”) is entered into as of the 31^ST day of May, 2013 (the “Effective Date”) by and between CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company as landlord (“Landlord”), and BATESVILLE HEALTH AND REHAB, LLC, an Arkansas limited liability company as tenant (“Tenant”).

WITNESSETH:

WHEREAS, CHP Partners, LP (“CHP”), entered into that certain Asset Purchase Agreement with BHC Properties, LLC, an Arkansas limited liability company, WHC Properties, LLC, an Arkansas limited liability company, SHC Properties, LLC, an Arkansas limited liability company, NHC Properties, LLC, an Arkansas limited liability company, JHC Properties, LLC, an Arkansas limited liability company, LVRC Properties, LLC, an Arkansas limited liability company, collectively, as sellers, dated as of April 23, 2013 (as may be amended, the “Purchase Agreement”), with respect to the purchase of certain real and personal property described therein; and

WHEREAS, CHP assigned to Landlord, an Affiliate of CHP, all of its rights, title and interest in and to the Purchase Agreement with respect to the Leased Property (these and other capitalized terms used and not otherwise defined herein having the meanings ascribed to such terms in Article 1), and Landlord has assumed certain of CHP’s obligations thereunder; and

WHEREAS, CHP also assigned to the Affiliated Landlords, each an affiliate of CHP, all of its rights, title, and interest in and to the Purchase Agreement with respect to the Affiliated Leased Properties, and the Affiliated Landlords have assumed certain of CHP’s obligations thereunder; and

WHEREAS, pursuant to the Purchase Agreement, Landlord has acquired the Leased Property as of the Effective Date; and

WHEREAS, pursuant to the Purchase Agreement, Affiliated Landlords have acquired the Affiliated Leased Properties as of the Effective Date; and

WHEREAS, Landlord desires to lease to Tenant all of Landlord’s interests in the Leased Property, and Tenant desires to lease from Landlord all of Landlord’s interests in the Leased Property, all subject to and conditioned upon the terms and conditions herein set forth; and

WHEREAS, Affiliated Landlords are entering into the Affiliated Leases with the Affiliated Tenants as of the Effective Date; and

WHEREAS, a material inducement to Landlord entering into this Lease is the treatment of a default under any of the Affiliated Leases as a default under this Lease.

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

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ARTICLE 1

DEFINITIONS

For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Article and used in this Lease shall have the meanings assigned to them in this Article and include the plural as well as the singular, (ii) all accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with GAAP, (iii) all references in this Lease to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Lease, and (iv) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subdivision.

“Accessibility Laws” shall mean all applicable laws, statutes, regulations, rules, ordinances, codes, licenses, permits and orders, from time to time in existence, of all courts of competent jurisdiction and Government Agencies, and all applicable judicial and administrative and regulatory decrees, judgments and orders, including common law rulings and determinations, relating to accessibility for the disabled or handicapped, including, but not limited to, any applicable provisions of The Architectural Barriers Act of 1968, The Rehabilitation Act of 1973, The Fair Housing Act of 1988, The Americans With Disabilities Act, the accessibility code(s), if any, of the State in which the Leased Property is located, and all regulations and guidelines promulgated under any all of the foregoing, as the same may be amended from time to time.

“Accounting Period” shall mean each calendar month beginning on the first day of the month and ending on the last day of such month. Notwithstanding the foregoing, if the Effective Date is other than the first day of a calendar month, then the first (1st) Accounting Period under this Lease shall begin on the Effective Date and end on the last day of the first full calendar month thereafter.

“ACM” shall have the meaning given such term in Section 4.2.

“Additional Charges” shall have the meaning given such term in Section 3.4.

“Adjusted Lease Basis” shall mean the sum of Landlord’s Original Investment and Landlord’s Additional Investment from time to time.

“Affiliate” shall mean, with respect to any Person, (i) any Person directly or indirectly Controlling, Controlled by or under common Control with any such Person, (ii) in the case of any such Person which is a partnership, any partner in such partnership, (iii) in the case of any such Person which is a limited liability company, any member of such company, (iv) in the case of any such Person which is a corporation, any officer, director or stockholder of such corporation, (v) any other Person which is a Parent, a Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one or more of the Persons referred to in the preceding clauses (i) through (iv), (vi) any other Person who is an officer, director, trustee or employee of, or partner in, such Person or any Person referred to in the preceding clauses (i) through (v) and (vii) any other Person who is a member of, or trustee of any trust for the benefit of, the Immediate Family

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of such Person or of any Person referred to in the preceding clauses (i) through (vi); provided, however, a Person shall not be deemed to be an Affiliate solely by virtue of the ownership of shares of stock registered under the Securities Act of 1934, as amended, unless such Person, as holder of such stock, is required to file a Schedule 13-D, pursuant to Section 13(d) of such Act and Rule 13-d-1 promulgated thereunder.

“Affiliated Landlords” shall mean, individually or collectively as the context requires, the landlords under each of the Affiliated Leases.

“Affiliated Leased Properties” shall mean the properties leased by the Affiliated Landlords to the Affiliated Tenants under the Affiliated Leases.

“Affiliated Lease(s)” shall mean, individually or collectively as the context requires, the leases set forth on Schedule 1 attached hereto.

“Affiliated Tenants” shall mean, individually or collectively as the context requires, the tenants under each of the Affiliated Leases.

“Applicable Laws” shall mean all applicable laws, statutes, regulations, rules, ordinances, codes, licenses, permits and orders, from time to time in existence, of all courts of competent jurisdiction and Government Agencies, all Legal Requirements and all applicable judicial and administrative and regulatory decrees, judgments and orders, including common law rulings and determinations of any kind, including without limitation, those relating to (i) damage to, or the protection of, real or personal property, (ii) human health and safety (except those requirements which, by definition, are solely the responsibility of employers), (iii) the Environment, including, without limitation, all valid and lawful requirements of courts and other Government Agencies pertaining to reporting, licensing, permitting, investigation, remediation and removal of underground improvements (including, without limitation, treatment or storage tanks, or water, gas or oil wells), or emissions, discharges, releases or threatened releases of Hazardous Substances, chemical substances, pesticides, petroleum or petroleum products, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the Environment, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances, underground improvements (including, without limitation, treatment or storage tanks, or water, gas or oil wells), or pollutants, contaminants or hazardous or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature, (iv) Accessibility Laws, (v) securities, including, without limitation, the marketing thereof, (vi) nursing facility licensure or (vii) participation in Medicare or Medicaid programs.

“Approved Reserve Budget” shall have the meaning given such term in Section 5.2.3.

“Business” means the operation of the Facility and other activities related thereto.

“Business Day” shall mean any day other than Saturday, Sunday, or any other day on which federal banking institutions are authorized by law or executive action to close.

“CHP” shall have the meaning given such term in the Recitals.

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“Claim” shall have the meaning given such term in Section 14.3.

“Code” shall mean the Internal Revenue Code of 1986 and, to the extent applicable, the Treasury Regulations promulgated thereunder, each as amended from time to time.

“Condemnation” shall mean (a) the exercise of any governmental power with respect to the Leased Property or any interest therein, whether by legal proceedings or otherwise, by a Condemnor under its power of condemnation, (b) a voluntary sale or transfer of the Leased Property, or any portion thereof, by Landlord to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending, or (c) a taking or voluntary conveyance of all or part of the Leased Property, 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 the Leased Property, whether or not the same shall have actually been commenced.

“Condemnor” shall mean any public or quasi public authority, or Person having the power of Condemnation.

“Confidential Information” shall have the meaning given such term in Section 21.24.

“Control” (including the correlative meanings of the terms “Controlling”, “Controlled by”, and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person whether through the ownership of voting securities, by contract or otherwise.

“Compete” shall have the meaning given such term in Section 21.28.

“Covered Person” shall have the meaning given such term in Section 21.28.

“Default” shall mean any event or condition existing which with the giving of notice and/or lapse of time would ripen into an Event of Default.

“Effective Date” shall have the meaning given such term in the introductory paragraph of this Lease.

“Emergency” shall have the meaning given such term in Section 5.2.3.

“Entity” shall mean any corporation, general or limited partnership, limited liability company, limited liability partnership, stock company or association, joint venture, association, company, trust, bank, trust company, land trust, business trust, cooperative, any government or agency or political subdivision thereof or any other association or entity.

“Environment” shall mean soil, surface waters, ground waters, land, streams, sediments, surface or subsurface strata and ambient air.

“EP” means an independent, qualified, licensed and insured environmental professional.

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“Event of Default” shall have the meaning given such term in Section 12.1.

“Extended Term” shall have the meaning given such term in Section 2.6.

“Extension Option(s)” shall have the meaning given such term in Section 2.6.

“Facility Mortgage” shall have the meaning given such term in Section 19.1.

“Facility” means the nursing facility known as the “Batesville Healthcare Center” located on the Land.

“Fiscal Quarter” shall mean the first, second, third and fourth three-month period (each consisting of three (3) Accounting Periods) during each Fiscal Year.

“Fiscal Year” shall mean each fiscal year of Tenant, each such fiscal year to consist of twelve (12) consecutive Accounting Periods, beginning on January 1 and ending on December 31. Notwithstanding the foregoing, the first (1st) Fiscal Year under this Lease shall begin on the Effective Date and end on December 31, 2013. If Tenant shall, for a bona fide business reason, change its Fiscal Year during the Term, appropriate adjustments, if any, shall be made with respect to the timing of certain accounting and reporting requirements of this Lease; provided, however, that in no event shall any such change or adjustment increase or reduce any monetary obligation under this Lease.

“Force Majeure Event” means any circumstance which is not within the reasonable control of either party hereto, caused by any of the following: strikes; lockouts; acts of God; civil commotion; fire or any other casualty; governmental action; or other similar cause or circumstance which is not within the reasonable control of either party hereto. Neither lack of financing nor general economic and/or market conditions or factors is a Force Majeure Event.

“GAAP” shall mean generally accepted accounting principles consistently applied.

“Government Agencies” shall mean any legislative body, court, agency, authority, board (including, without limitation, health and long term care, environmental protection, planning and zoning), bureau, commission, department, office or instrumentality of any nature whatsoever of any governmental or quasi governmental unit of the United States or the State or any county or any political subdivision of any of the foregoing, whether now or hereafter in existence, having jurisdiction over Tenant or the Leased Property or any portion thereof, or the Business operated thereon.

“Hazardous Substances” shall mean any substance:

(a) the presence of which requires or may hereafter require notification, investigation or remediation under any federal, state or local statute, regulation, rule, ordinance, order, action or policy; or

(b) which is or becomes defined as a “hazardous waste”, “hazardous material” or “hazardous substance” or “pollutant” or “contaminant” under any present or future federal, state or local statute, regulation, rule or ordinance or amendments thereto

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including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) and the regulations promulgated thereunder; or

(c) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, any state of the United States, or any political subdivision thereof; or

(d) the presence of which on the Leased Property causes or materially threatens to cause an unlawful nuisance upon the Leased Property or to adjacent properties or poses or materially threatens to pose a hazard to the Leased Property or to the health or safety of persons on or about the Leased Property, including without limitation molds/microbial organisms which affect health, indoor air quality and/or structural integrity; or

(e) without limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic compounds; or

(f) without limitation, which contains polychlorinated biphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or

(g) without limitation, which contains or emits radioactive particles, waves or material; or

(h) without limitation, which constitutes materials which are now or may hereafter be subject to regulation pursuant to the Material Waste Tracking Act of 1988, or any Applicable Laws promulgated by any Government Agencies.

“HUD Materials” shall have the meaning given such term in Section 4.2.

“Immediate Family” shall mean, with respect to any individual, such individual’s spouse, parents, brothers, sisters, children (natural or adopted), stepchildren, grandchildren, grandparents, parents in law, brothers-in-law, sisters-in-law, nephews and nieces.

“Improvement Project” shall have the meaning given such term in Section 5.3.

“Incident” shall have the meaning given such term in Section 20.3.

“Indebtedness” shall mean all obligations, contingent or otherwise, which in accordance with GAAP should be reflected on the obligor’s balance sheet as liabilities.

“Index” shall mean the Consumer Price Index: All Urban Consumers, (1982-84=100), All Items, U.S. City Average (CPI-U), as published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or otherwise revised during the Term, such other government index or computation with which it is replaced shall be used. If the Index

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is discontinued with no successor Index, another similar index with an appropriate conversion factor shall be substituted. If the Index is changed so that a base year other than 1982-84 is used, the Index shall be converted in accordance with the conversion factor published by the Bureau of Labor Statistics.

“Information Technology and Software” shall mean all information technology systems and equipment and software necessary to or used in connection with the operation of the Business.

“Initial Landlord P&E” shall mean and refer to all P&E of any kind or description which are owned by Landlord and located on the Land as of the Effective Date, including, without limitation, those items enumerated on Exhibit G attached hereto and made a part hereof, but specifically excluding items of Tenant’s Personal Property.

“Initial Term” shall have the meaning given such term in Section 2.5.

“Insurance Requirements” shall mean all terms of any insurance policy, certificate or endorsement required by this Lease and all requirements of the issuer of any such policy and all orders, rules and regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon Landlord, Tenant or any of the Leased Property.

“Inventory” shall mean all inventory, as such term is customarily used and defined in its most broad and inclusive sense, including, but not limited to, all inventory of merchandise, food, beverages, medical supplies and other consumables held by Tenant for sale to or for consumption by residents or employees at the Facility or in connection with the Business, and operating supplies, cleaning supplies, building and maintenance supplies and spare parts.

“Land” shall have the meaning given such term in Section 2.1(a).

“Landlord” shall have the meaning given such term in the preambles to this Lease and shall include its successors and assigns.

“Landlord’s Acquisition Costs” shall mean the sum of all costs incurred by Landlord with third parties, at arm’s length, in connection with the acquisition of the Leased Property pursuant to the Purchase Agreement and lease of same to Tenant, including, without limitation, all due diligence costs (including, without limitation, costs of any environmental reports or studies, property condition reports and surveys), attorneys’ fees, accountants’/auditors’ fees, consultants’ fees, closing costs, transfer, sales or similar taxes, transfer and related costs, recording fees, title premiums and any other title related charges or fees, and prorations paid to Seller and/or Tenant in connection with Landlord’s acquisition of the Leased Property and which were reasonably incurred with respect to the acquisition of same and the lease of same to Tenant.

“Landlord’s Additional Investment” shall mean the sum of all costs of any repairs, maintenance, renovations or replacements pursuant to Article 5, Article 6 or Article 10 hereof and other expenditures made by Landlord in connection with the Leased Property which are not paid out of the Reserve.

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“Landlord’s Original Investment” shall mean that amount which equals the sum of (i) the purchase price allocated to the Leased Property as set forth in the Purchase Agreement, plus (ii) Landlord’s Acquisition Costs (including any tax consequences Landlord covers on behalf of the seller of the Property in connection with such seller’s payment of brokerage fees to Stifel).

“LBP” shall have the meaning given such term in Section 4.2.

“Lease” shall mean this Lease Agreement, including all Exhibits and Schedules hereto, as it and they may be amended or restated from time to time as herein provided.

“Lease Year” shall mean each period of 365 consecutive calendar days (366 consecutive calendar days during any leap year) elapsing from and after the Effective Date forward.

“Leased Improvements” shall have the meaning given such term in Section 2.1(b).

“Leased Intangible Property” shall mean all transferable or assignable (a) governmental permits, including licenses and authorizations, required for the construction, ownership and operation of the Leased Improvements, including without limitation, certificates of authority, certificates of occupancy, building permits, signage permits, site use approvals, zoning certificates, environmental and land use permits and any and all necessary approvals from state or local authorities and other approvals granted by any public body or by any private party pursuant to a recorded instrument relating to the Leased Improvements or the Land; (b) telephone exchange numbers identified with the Leased Property, if any, and customer files, guest lists, credit records, labels, promotional literature, security codes, all records and sales and other customer data, and any unexpired guaranties or warranties, relating to the Leased Property and/or the operation of the Business (but only to the extent all of the same are not included in Tenant’s Personal Property); and (c) certificates, licenses, warranties and guarantees and contracts, other than such permits, operating permits, certificates, licenses and approvals which are Tenant’s Personal Property or are to be held by, or transferred to, Tenant in accordance with the terms of the Purchase Agreement and the OTA or otherwise in order to permit Tenant to operate such Leased Improvements properly and in accordance with the terms of this Lease. The term. “Leased Intangible Property” shall specifically exclude items of Tenant’s Personal Property.

“Leased Property” shall have the meaning given such term in Section 2.1.

“Legal Requirements” shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting the Leased Property or the maintenance, construction, alteration or operation thereof, whether now or hereafter enacted or in existence, including, without limitation, (a) all permits, licenses, authorizations, certificates and regulations necessary or required for the operation of the Leased Property for its Permitted Use, (b) all covenants, agreements, declarations, restrictions and encumbrances contained in any instruments at any time in force affecting the Leased Property or to which Tenant has consented or which are required to be granted pursuant to Applicable Laws, including those which may (i) require material repairs, modifications or alterations in or to the Leased Property or (ii) in any way materially and adversely affect the use and enjoyment thereof, but excluding any requirements arising as a result of Landlord’s status as a real estate investment trust, and (c) Applicable Laws.

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“Lien” shall mean any mortgage, security interest, pledge, collateral assignment, or other encumbrance, lien or charge of any kind, including but not limited to construction, mechanics’ and materialmen’s liens, or any transfer of property or assets for the payment of Indebtedness or performance of any other obligation in priority to payment of the obligor’s general creditors.

“Major Alterations” shall have the meaning given such term in Section 6.2.2.

“Materiality Threshold Period” shall have the meaning given such term in Section 17.7.

“Minimum Rent” shall mean annual rent as set forth in Section 3.2, subject to prorations and adjustments as set forth in Section 3.2.

“Minor Alterations” shall have the meaning given such term in Section 6.2.1.

“Mortgagee” shall mean the holder of any Facility Mortgage.

“Notice” shall mean a notice given in accordance with Section 21.10.

“Notice of Commencement” shall have the meaning given such term in Section 7.4.

“O&M Plan” shall have the meaning given such term in Section 4.2.

“Official Records” shall mean the land records of the county clerk where the Land is located.

“Officer’s Certificate” shall have the meaning given such term in Section 17.2.

“Operating Contracts” shall mean the various service agreements, equipment leases, purchase contracts and special event contracts, software licenses and information technology contracts, and other contracts utilized in the operation of the Business, all as more particularly set forth on Exhibit E attached hereto and made a part hereof.

“Operating Expenses” means all those ordinary and necessary expenses incurred in the operation of the Business in accordance with this Lease, including all costs and expenses associated with the employees (including salaries, wages, bonuses and other compensation of all employees and their benefits, including life, medical and disability insurance and retirement benefits), the costs associated with permits and licenses, the cost of maintenance and utilities, administrative expenses, the costs of advertising, marketing and business promotion, any and all taxes, assessments, charges, levies, fees (including, without limitation, license, permit, inspection, authorization and similar fees) and other impositions and charges of every kind and nature whatsoever, extraordinary as well as ordinary, foreseen or unforeseen, and each and every installment thereof which shall or may during or with respect to the Term accrue and be charged, laid, levied, assessed, or imposed upon, or arise in connection with, the use, occupancy, operation or possession of the Leased Property or the Business conducted thereon, all premiums

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and other charges to obtain the insurance policies required pursuant to the terms hereof, all capital expenditures to the extent deductible in accordance with GAAP. The term “Operating Expenses” shall expressly exclude (i) any debt service for any Facility Mortgage or other financing obtained by Landlord in connection with the Leased Property, and (ii) any federal, state and local income taxes, other taxes on income or net worth, franchise taxes, margin taxes, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar taxes or charges or substitutes therefor.

“OTA” means that certain Operations Transfer Agreement by and among sellers under the Purchase agreement, certain Affiliates of sellers under the Purchase Agreement, Tenant, the Affiliated Tenants and certain Affiliates thereof, dated as of April 23, 2013.

“OTA Assets” shall mean all assets (and any replacements thereof) transferred to Tenant pursuant to the OTA.

“Overdue Rate” shall mean, on any date, a per annum rate of interest equal to the lesser of (a) twelve percent (12%), or (b) the maximum rate then permitted under Applicable Laws.

“P&E” shall mean all items of personal property, as defined under the Model Uniform Commercial Code, including, but not limited to: (a) all equipment, machinery, fixtures, and other items of property, now or hereafter located on or permanently affixed to or incorporated into the Leased Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air cooling and air conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment and irrigation equipment, together with all replacements, modifications, alterations and additions thereto, all of which to the extent not otherwise constituting real property under Applicable Law; (b) all furniture, furnishings, movable walls or partitions, computers or trade fixtures or other personal property of any kind or description used or useful in the Business on or in the Leased Improvements, and located on or in the Leased Improvements, and all modifications, replacements, alterations and additions to such personal property; (c) “Property and Equipment,” “P&E,” and “FF&E” (as such terms are customarily used and defined in the most broad and inclusive sense); (d) all replacements of or additions to items set forth in clause (a) through (c) above; and (e) the Initial Landlord P&E. The term “P&E” shall specifically exclude items of Tenant’s Personal Property.

“P&E Replacements” shall mean all items of P&E purchased with funds from the Reserve established under Article 5 of this Lease or with insurance proceeds payable with respect to P&E or P&E Replacements (specifically excluding all insurance proceeds payable with respect to items of Tenant’s Personal Property) and all other items of P&E added and used at the Leased Property during the Term of this Lease (specifically excluding items of Tenant’s Personal Property), together with all leasehold improvements made by Tenant during the Term of this Lease to the extent not constituting real property affixed to the Land, whether purchased from the Reserve or with other funds of Tenant, all subject to disposal and further replacement at the end of their useful lives.

“Parent” shall mean, with respect to any Person, any Person which directly, or indirectly through one or more Subsidiaries or Affiliates, (i) owns more than fifty percent (50%) of the voting or beneficial interest in, or (ii) otherwise has the right or power (whether by contract, through ownership of securities or otherwise) to Control, such Person.

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“Permits” means all licenses, permits and certificates used or useful in connection with the ownership, operation, use or occupancy of the Facility, the Leased Property or the Business, including, without limitation, healthcare licenses issued by the Arkansas Department of Health or Arkansas Department of Human Services, Health Insurance Benefit Agreements issued by the Centers for Medicare and Medicaid Services, liquor licenses, business licenses, state and local health and environmental department licenses, any other licenses required in connection with the operation of the Leased Property for the Permitted Use, food service licenses, licenses to conduct business and all such other permits, licenses and rights, obtained from any governmental, quasi governmental or private person or entity whatsoever.

“Permitted Encumbrances” shall mean (a) all rights, restrictions, and easements of record set forth on Exhibit F attached hereto and made a part hereof, (b) to the extent not referenced on Exhibit F, any mortgage and other documents of record relating to a Facility Mortgage, and (c) any other such encumbrances as may have been consented to in writing by Landlord from time to time in accordance with the terms of Section 2.8 hereof.

“Permitted Renovations” shall have the meaning given that term in Section 6.2.

“Permitted Use” shall have the meaning given such term in Section 4.1.1.

“Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits.

“Purchase Agreement” shall have the meaning given such term in the Recitals.

“REIT” shall have the meaning given such term in Article 15.

“REIT Personal Property Limitation” shall have the meaning given such term in Section 15.1.

“Release” shall have the meaning given such term in Section 4.2.

“Rent” shall mean, collectively, Minimum Rent and Additional Charges.

“Reserve” shall have the meaning given such term in Section 5.2.

“Reserve Budget” shall have the meaning given such term in Section 5.2.3.

“Reserve Expenditures” shall have the meaning given such term in Section 5.2.

“Reserve Payment” shall have the meaning given such term in Section 5.2.2.

“SEC” shall mean the Securities and Exchange Commission.

“Security Deposit” shall have the meaning given such term in Section 3.9.

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“Seller” shall have the meaning given such term in the Recitals.

“Severe Incident” shall have the meaning given such term in Section 20.3.1.

“Significant Property Damage” shall have the meaning given such term in Section 20.3.2.

“Site Development” shall have the meaning given such term in Section 4.2.

“State” shall mean the State in which the Land is located.

“Subsidiary” shall mean, with respect to any Person, any Entity in which such Person directly, or indirectly through one or more Subsidiaries or Affiliates, (a) owns more than fifty percent (50%) of the voting or beneficial interest or (b) which such Person otherwise has the right or power to Control (whether by contract, through ownership of securities or otherwise).

“Tax and Insurance Account” shall have the meaning given such term in Section 8.3.

“Tax and Insurance Escrow Amount” shall have the meaning given such term in Section 8.3.

“Tenant” shall be the entity identified in the preamble to this Lease and shall include its successors and assigns expressly permitted hereunder.

“Tenant’s Personal Property” shall mean the OTA Assets, the Inventory and any specific items of P&E listed in Exhibit H attached hereto and made a part hereof, or which hereafter are acquired by Tenant or an Affiliate with its own funds after the Effective Date or replacements for such items and located at the Leased Property (but not including any property purchased with funds from the Reserve established under Article 5), or items of intangible property owned by Tenant or an Affiliate in connection with the Business, including, without limitation, Information Technology and Software.

“Term” shall mean, collectively, the Initial Term and the Extended Terms, unless sooner terminated pursuant to the provisions of this Lease.

“Unforeseen Reserve Expenditures” shall have the meaning given such term in Section 5.2.5.

“Unfunded Reserve Expenditures” shall have the meaning given such term in Section 5.2.6.

“Unsuitable for Its Permitted Use” shall mean a state or condition of the Leased Property such that following any damage, taking, Condemnation or destruction involving the Leased Property, (a) the Leased Property cannot be operated in the reasonable judgment of Landlord after consultation with Tenant on a commercially practicable basis for its Permitted Use and (b) it cannot reasonably be expected to be restored to substantially the same condition as existed before such damage or destruction and as is otherwise required by Article 10 within (i) twelve (12) months following such damage or destruction, or (ii) eighteen (18) months following

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such damage or destruction in the event that Tenant has extended the term of the business interruption insurance to pay at least eighteen (18) months Rent for the benefit of Landlord or provides other reasonably acceptable security for any uninsured portion of the eighteen (18) months Rent.

ARTICLE 2

LEASED PROPERTY AND TERM

2.1 Leased Property. Upon and subject to the terms and conditions hereinafter set forth, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord all of Landlord’s right, title and interest in and to all of the following (collectively, the “Leased Property”), and grants to Tenant the right to use and occupy the Leased Property for the purposes, and subject to the limitations, set forth in this Lease:

(a) all that certain tract, piece and parcel of land, as more particularly described in Exhibit A attached hereto and made a part hereof (the “Land”);

(b) all buildings, structures, fixtures and other improvements of every kind, including, without limitation, all roofs, plumbing systems, electric systems and HVAC systems, roadways, pavilions, alleyways, parking areas and facilities, landscaping, sidewalks, curbs, connecting tunnels, utility pipes, irrigation systems, conduits and lines (on site and off site), appurtenant to or presently situated upon the Land (collectively, the “Leased Improvements”);

(c) all easements, hereditaments, appurtenances and all other rights, privileges and entitlements, if any, relating to the Land and the Leased Improvements;

(d) all Initial Landlord P&E, all P&E Replacements;

(e) all moveable machinery, equipment, furniture, furnishings, computers or trade fixtures (including all vehicles, together with all supplies related thereto), owned by Landlord and located on or in the Leased Improvements, and all modifications, replacements, alterations and additions to such property, including without limitation, to the extent assignable by Landlord, any operating leases of any such Initial Landlord P&E, P&E Replacements or other machinery, equipment, furniture, furnishings, computers or trade fixtures, but specifically excluding all items included within the category of Tenant’s Personal Property;

(f) all of the Leased Intangible Property;

(g) all Landlord’s right, title and interest in any and all maintenance, service and supply contracts, equipment leases, space leases (including without limitation, leases of storage spaces by any non-commercial tenant and all other similar agreements affecting any of the Leased Property and/or the operation of the Business to the extent that such contracts are transferable, including, without limitation, the Permits and Operating Contracts, together with all prepayments and deposits held thereunder (it being agreed that Landlord shall, as of the Effective Date, make such prepayments and deposits actually available to Tenant for use in the operation of the Business);

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(h) all plans and specifications, blue prints, architectural plans, engineering diagrams and similar items specifically related to any of the Land or the Leased Improvements; and

(i) all other property and interests in property conveyed or assigned to Landlord pursuant to the Purchase Agreement.

2.2 Assignment of Permits. Landlord and Tenant shall cooperate and take commercially reasonable efforts to cause all Permits related to the operation (but not ownership) of the Leased Property, which are not currently held in the name of Tenant, to be assigned to Tenant effective as of the Effective Date or as soon thereafter as reasonably possible. Landlord shall pay all costs and expenses in connection with the transfer of the Permits, the out-of-pocket amounts of which incurred with third parties at arm’s length shall be included in Landlord’s Additional Investment. Landlord shall, at no additional cost to Landlord (other than de minimis costs), cooperate in a commercially reasonable manner with Tenant in connection with obtaining any Permits that are non-transferable. Tenant shall be responsible for the processing of all requests and/or applications for such Permits.

2.3 Assignment of Operating Contracts. Landlord and Tenant shall cooperate and take commercially reasonable efforts to cause all of the Operating Contracts, under which Tenant is not already a party, to be assigned to Tenant as of the Effective Date or as soon thereafter as reasonably possible.

2.4 Condition of Leased Property. TENANT ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY MADE BY LANDLORD IN THIS LEASE, LANDLORD IS NOT MAKING AND SPECIFICALLY DISCLAIMS ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY, THE BUSINESS OR ANY OF THE OTHER ITEMS INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO MATTERS OF TITLE, ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITIONS INCLUDING WEATHER-RELATED CONDITIONS, AVAILABILITY OF ACCESS, INGRESS OR EGRESS, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS, THE VALUE, CONDITION, MERCHANTABILITY, MARKETABILITY, PROFITABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE. TENANT AGREES THAT TENANT HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF LANDLORD OR ANY AGENT OF LANDLORD OR OTHER THIRD PARTY, INCLUDING ANY REAL ESTATE BROKER OR AGENT, EXCEPT AS EXPRESSLY MADE BY LANDLORD IN THIS LEASE. EXCEPT AS OTHERWISE PROVIDED IN THIS LEASE, TENANT HAS CONDUCTED, OR HAS HAD THE OPPORTUNITY TO CONDUCT, ITS OWN INSPECTIONS AND INVESTIGATIONS OF THE LEASED PROPERTY AND THE BUSINESS AND ASSUMES ALL RISK IN CONNECTION THEREWITH, AND TENANT HEREBY ACKNOWLEDGES AND AGREES

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THAT LANDLORD IS LEASING TO TENANT AND TENANT HEREBY ACCEPTS ALL OF THE LEASED PROPERTY, THE BUSINESS AND ANY OTHER ITEMS LEASED HEREBY “AS IS WHERE IS,” WITH ALL FAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS COLLATERAL TO OR AFFECTING THE LEASED PROPERTY BY LANDLORD, ANY AGENT OF LANDLORD OR ANY THIRD PARTY. THE TERMS AND CONDITIONS OF THIS SECTION SHALL EXPRESSLY SURVIVE THE TERMINATION OF THIS LEASE.

2.5 Initial Term. The initial term of this Lease (the “Initial Term”) shall commence on the Effective Date and shall terminate and expire at 11:59 p.m. on May 30, 2023.

2.6 Extended Terms. Tenant shall have and is hereby granted two (2) options (each, an “Extension Option”) to extend the Term of this Lease (each, an “Extended Term”) for an additional five (5) years each, upon the terms, covenants, conditions and rental as set forth herein; provided no continuing Event of Default then exists hereunder or under any Affiliated Lease at the commencement of the respective Extended Term. Tenant may exercise each such Extension Option successively by giving written notice to Landlord not less than six (6) months nor more than twelve (12) months prior to the respective expiration of the Initial Term of this Lease, or of the then applicable Extended Term. Should Tenant fail to give Landlord such timely written notice during the required period, the then current Term of this Lease and all rights of renewal shall automatically expire as of the then scheduled expiration date of the Term of this Lease.

2.7 Yield Up. Tenant shall, on or before the last day of the Term or upon the sooner termination thereof, peaceably and quietly surrender and deliver to Landlord the Leased Property and the OTA Assets, including, without limitation, all Leased Improvements and P&E and all additions thereto and replacements thereof made from time to time during the Term, together with and including, without limitation, the P&E Replacements, in good order, condition and repair, reasonable wear and tear excepted, and free and clear of all Liens and encumbrances (other than Permitted Encumbrances, Liens or encumbrances in favor of or granted by Landlord, and any other encumbrances expressly permitted under the terms of this Lease), and Tenant shall fully cooperate with Landlord in transferring, to the extent transferable under Applicable Laws and without consideration or fee, any of the Permits, which Landlord determines, in its sole and absolute discretion, would be necessary or appropriate to continue to operate the Leased Property for its Permitted Use. Tenant acknowledges that both the Initial Landlord P&E described on Exhibit G attached hereto and consumable items of Inventory located at the Leased Property as of the Commencement Date may be completely consumed and/or otherwise disposed of in the course of operation of the Leased Property during the Term of this Lease. Tenant agrees that, at the expiration or earlier termination of this Lease, Tenant shall fully restore the Initial Landlord P&E, inclusive with and after consideration of all P&E Replacements which will become the property of Landlord, to at least the approximate types and amounts (with reasonably equivalent value) as shown on Exhibit G, and shall fully restore an adequate supply of Inventory consistent with the full stocking levels at the applicable time of the Fiscal Year to be maintained by Tenant pursuant to this Lease. At the expiration or earlier termination of this Lease, Tenant shall (i) retain all accounts receivable from its operation of the Property and Business subject to and net of the amount of such receivables due to Landlord or to the Reserve pursuant to the terms hereof, and (ii) remain liable for the payment of accounts payable which have accrued prior to the expiration or earlier termination of this Lease.

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2.8 Grant of Easements, Etc. by Landlord. Landlord may, from time to time, at the reasonable request of any third party, or as requested or required by any Government Agencies, at Landlord’s cost and expense: (i) grant easements and other rights in the nature of easements; (ii) release existing easements or other rights in the nature of easements which are for the benefit of the Leased Property; (iii) dedicate or transfer unimproved portions of the Leased Property for road, highway or other public purposes; (iv) execute petitions to have the Leased Property annexed to any municipal corporation or utility district; (v) execute amendments to any covenants and restrictions affecting the Leased Property; and (vi) execute and deliver to any person any instrument appropriate to confirm or effect such grants, releases, dedications and transfers (to the extent of its interest in the Leased Property), provided that any instrument requested may not materially impair or diminish Tenant’s use of the Leased Property or adversely affect in any material respect the operation, value or financial viability of the Business, or otherwise materially increase Tenant’s obligations or decrease its rights under this Lease.

ARTICLE 3

RENT

3.1 Rent. Tenant shall pay, in lawful money of the United States of America which shall be legal tender for the payment of public and private debts, without offset, abatement, demand or deduction (unless otherwise expressly provided in this Lease), Rent, together with all applicable sales, use or excise tax thereon now or hereafter applied to rental receipts by the State, (but expressly excluding all federal, state and local income taxes, other taxes on income or net worth, franchise taxes, margin taxes, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar taxes or charges or substitutes therefor), to Landlord during the Term at the address to which Notices to Landlord are to be given or to such other party or to such other address as Landlord may designate from time to time by written notice to Tenant. All payments to Landlord shall be made by wire transfer of immediately available federal funds or by other means acceptable to Landlord in its sole discretion and all such payments shall, upon receipt by Landlord, be and remain the sole and absolute property of Landlord. If Landlord shall at any time accept any such Rent or other sums after the same shall become due and payable, or any partial payment of Rent, such acceptance shall not excuse a delay upon subsequent occasions, or constitute or be construed as a waiver of any of Landlord’s rights hereunder.

3.2 Minimum Rent. Tenant shall pay annual base minimum rent (“Minimum Rent”), together with all applicable sales, use or excise tax thereon now or hereafter applied to rental receipts by the State (but expressly excluding all federal, state and local income taxes, other taxes on income or net worth, franchise taxes, margin taxes, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar taxes or charges or substitutes therefor), to Landlord in equal monthly installments in advance, on the first (1st) Business Day of each Accounting Period; provided, however, that the first payment of Minimum Rent shall be payable on the Effective Date. Further, if applicable, the first payment of Minimum Rent and the last payment of Minimum Rent shall be prorated on a per diem basis; provided, however, that for purposes of Minimum Rent, any prorated payment for any partial Accounting Period prior to the

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first full Accounting Period shall be prorated based upon the installment of Minimum Rent payable for the first full Accounting Period, and any prorated Rent at the end of the Term shall be prorated based upon the installment of Minimum Rent payable for the last full Accounting Period.

3.2.1 Calculation of Initial Term Minimum Rent. Subject to proration as set forth above, Tenant shall pay Minimum Rent during each Lease Year of the Initial Term of this Lease in amounts calculated in accordance with the formula set forth on Exhibit B attached hereto and made a part hereof.

3.2.2 Calculation of Extended Term Minimum Rent. Subject to proration as set forth above, Tenant shall pay Minimum Rent during each Lease Year of each Extended Term of this Lease in amounts calculated in accordance with the formula set forth on Exhibit B attached hereto and made a part hereof.

3.3 Intentionally Omitted.

3.4 Additional Charges. In addition to the Minimum Rent payable hereunder, Tenant shall pay to the appropriate parties and discharge as and when due and payable hereunder the following (collectively the “Additional Charges”):

3.4.1 Taxes and Assessments. Tenant shall pay or cause to be paid all taxes and assessments required to be paid pursuant to Article 8.

3.4.2 Utility Charges. Tenant shall be liable for and shall promptly pay directly to the utility company all deposits, charges and fees (together with any applicable taxes or assessments thereon) when due for water, gas, electricity, air conditioning, heat, septic, sewer, refuse collection, telephone and any other utility charges, impact fees, or similar items in connection with the use or occupancy of the Leased Property. Landlord shall not be responsible or liable in any way whatsoever for the quality, quantity, impairment, interruption, stoppage, or other interference with any utility service, including, without limitation, water, air conditioning, heat, gas, electric current for light and power, telephone, or any other utility service provided to or serving the Leased Property. No interruption, termination or cessation of utility services shall relieve Tenant of its duties and obligations pursuant to this Lease, including, without limitation, its obligation to pay all Rent as and when the same shall be due hereunder.

3.4.3 Insurance Premiums. Tenant shall pay or cause to be paid all premiums for the insurance coverage required to be maintained pursuant to Article 9.

3.4.4 Licenses and Permits. Except as otherwise provided in this Lease, Tenant shall pay or cause to be paid all fees, dues and charges of any kind which are necessary in order to acquire and keep in effect and good standing all Permits required for operation of the Leased Property in accordance with the terms of Article 4. Tenant shall maintain, in Tenant’s name (to the extent permitted under Applicable Laws), those Permits related to the operation of the Leased Property. Notwithstanding the foregoing, in the event of the expiration or earlier termination of this Lease, Tenant shall assign, transfer or otherwise convey all Permits maintained in Tenant’s name to Landlord or Landlord’s designee, to the extent not prohibited by Applicable Laws.

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3.4.5 Reserve Payments. Tenant shall pay or cause to be paid all amounts required to be placed into the Reserve pursuant to Section 5.2.

3.4.6 Sales Tax. Each Fiscal Quarter, Tenant shall reimburse Landlord for the amount of any applicable sales, use, excise or similar or other tax paid by Landlord on any Rent and any payments to the Reserve, if any, whether the same be now or hereafter levied, imposed or assessed by the State or any Governmental Agencies, but specifically excluding any federal, state or local income taxes, franchise taxes, margin taxes, taxes on net worth, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar tax or charge or substitutes therefor and any other taxes imposed on Landlord’s income. Each Fiscal Quarter, Landlord shall provide Tenant with information regarding the calculation and payment of such tax, and Tenant shall reimburse Landlord for such amounts, if any, within five (5) Business Days of Landlord’s delivery of such information.

3.4.7 Other Charges. Tenant shall pay or cause to be paid all other amounts, liabilities and obligations arising in connection with the Leased Property, including, without limitation, Operating Expenses and any other costs and expenses specifically identified as “Additional Charges” pursuant to this Lease, except those obligations expressly stated not to be an obligation of Tenant pursuant to this Lease.

3.4.8 Penalties and Interest. Tenant shall pay or cause to be paid every fine, penalty, interest and cost, that Tenant is responsible for, which may be added for non-payment or late payment of the items referenced in this Section 3.4. Tenant shall prepare and file at its expense, to the extent required or permitted by Applicable Laws, all tax returns and other reports in respect of any Additional Charge as may be required by Governmental Agencies. Notwithstanding the foregoing provisions of this Section 3.4, with respect to any Additional Charge accruing prior to the Effective Date and payable on or after the Effective Date for which Landlord has received a credit from the Seller at Closing, Landlord shall either pay such credited amount when due to the applicable parties or deliver such credited amount to Tenant in which event Tenant shall pay such credited amount to the applicable parties when due.

3.5 Landlord Advances. Except as specifically provided otherwise in this Lease, and subject to Tenant’s right to contest taxes affecting the Leased Property pursuant to, and in accordance with, Section 8.2 hereof, if Tenant does not pay or discharge all Additional Charges, and provide proof of payment if requested by Landlord prior to delinquency, Landlord shall have the right but not the obligation to pay such Additional Charges on behalf of Tenant. If Landlord shall make any such expenditure for which Tenant is responsible or liable under this Lease, or if Tenant shall become obligated to Landlord under this Lease for any other sum besides Minimum Rent as hereinabove provided, and if Tenant fails to pay same when due, then the amount thereof shall be deemed to constitute an “Additional Charge” and shall be due and payable by Tenant to Landlord, together with interest at the Overdue Rate and all applicable sales or other taxes thereon, if any, simultaneously with the next succeeding monthly installment of Minimum Rent or at such other time as may be expressly provided in this Lease for the payment of the same.

3.6 Late Payment of Rent. If Tenant fails to make any payment of Rent on or before the fifth (5^th) Business Day after Tenant’s receipt of written notice from Landlord that the same is past due, Tenant shall pay to Landlord an administrative late charge of three percent (3%) of

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the amount of such payment. In addition, such past due payment shall bear interest at the Overdue Rate from the date first due until paid. Such late charge and interest shall constitute an Additional Charge and shall be due and payable with the next installment of Rent due hereunder.

3.7 Net Lease. Landlord and Tenant acknowledge and agree that both parties intend that this Lease shall be and constitute what is generally referred to in the real estate industry as a “triple net” or “absolute net” lease, such that, except as otherwise expressly set forth herein, Tenant shall be obligated hereunder to pay all costs and expenses incurred with respect to, and associated with, the Leased Property and all personal property thereon and therein and the business operated thereon and therein, including, without limitation, all rent and other charges due and payable under any ground lease or sublease encumbering the Land, all taxes and assessments, utility charges, insurance costs, maintenance costs and routine and customary repair, replacement and restoration expenses (all as more particularly herein provided), together with any and all other assessments, charges, costs and expenses of any kind or nature whatsoever related to, or associated with, the Leased Property, the use, occupation or operation thereof, and the Business operated thereon and therein, other than Landlord’s financing costs and expenses and related debt service; provided, however, that Landlord shall nonetheless be obligated to pay Landlord’s federal, state and local income taxes, other taxes on income or net worth, franchise taxes, margin taxes, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar taxes or charges or substitutes therefor with respect to the Rent and other amounts received by Landlord under this Lease. Except as expressly provided in this Lease, Landlord shall bear no cost or expense of any type or nature with respect to, or associated with, the Leased Property, or the use, occupation or operation thereof. Except to the extent otherwise expressly provided in this Lease, it is agreed and intended that Rent payable hereunder by Tenant shall be paid without notice, demand, counterclaim, set off, deduction or defense and without abatement, suspension, deferment, diminution or reduction and that Tenant’s obligation to pay Rent throughout the Term and any applicable Extended Term is absolute and unconditional and the respective obligations and liabilities of Tenant and Landlord hereunder shall in no way be released, discharged or otherwise affected for any reason, including without limitation: (a) any defect in the condition, merchantability, design, quality or fitness for use of the Leased Property or any part thereof, or the failure of the Leased Property to comply with Applicable Laws, including any inability to occupy or use the Leased Property by reason of such non compliance; (b) any damage to, removal, abandonment, salvage, loss, Condemnation, theft, scrapping or destruction of or any requisition or Condemnation of the Leased Property or any part thereof, or any environmental condition on the Leased Property or any property in the vicinity of the Leased Property; (c) any restriction, prevention or curtailment of or interference with any use of the Leased Property or any part thereof, including eviction; (d) any defect in title to or rights to the Leased Property or any Lien on such title or rights to the Leased Property; (e) any change, waiver, extension, indulgence or other action or omission or breach in respect of any obligation or liability of or by any Person; (f) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceedings relating to Tenant or any other Person or any action taken with respect to this Lease by any trustee or receiver of Tenant or any other Person or by any court, in any such proceedings; (g) any right or claim that Tenant has or might have against any Person, including, without limitation, Landlord or any vendor, manufacturer or contractor of or for the Leased Property (other than a claim resulting from any willful misconduct or gross negligence of Landlord); (h) subject to Section 12.7 hereof, any

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failure on the part of Landlord or any other Person to perform or comply with any of the terms of this Lease, or of any other agreement; (i) any invalidity, unenforceability, rejection or disaffirmance of this Lease by operation of law or otherwise against or by Tenant or any provision hereof; (j) the impossibility of performance by Tenant or Landlord, or both; (k) any action by any court, administrative agency or other Government Agencies; (l) any interference, interruption or cessation in the use, possession or quiet enjoyment of the Leased Property or otherwise; or (m) any other occurrence whatsoever whether similar or dissimilar to the foregoing, whether foreseeable or unforeseeable, and whether or not Tenant shall have notice or knowledge of any of the foregoing. Except as specifically set forth in this Lease, this Lease shall be non cancelable by Tenant for any reason whatsoever and, except as expressly provided in this Lease Tenant, to the extent now or hereafter permitted by Applicable Laws, waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Lease or to any diminution, abatement or reduction of Rent payable hereunder. Except as specifically set forth in this Lease, under no circumstances or conditions shall Landlord be expected or required to make any payment of any kind hereunder or have any obligations with respect to the use, possession, control, maintenance, alteration, rebuilding, replacing, repair, restoration or operation of all or any part of the Leased Property, so long as the Leased Property or any part thereof is subject to this Lease, and Tenant expressly waives the right to perform any such action at the expense of Landlord pursuant to any law.

3.8 No Abatement of Rent. Except as specifically set forth in this Lease, no abatement, diminution or reduction (a) of Rent, charges or other compensation, or (b) of Tenant’s other obligations hereunder shall be allowed to Tenant or any Person claiming under Tenant, under any circumstances or for any reason whatsoever and to the maximum extent permitted by Applicable Laws, Tenant hereby waives the application of any local or state statutes, land rules, regulations or ordinance providing to the contrary.

3.9 Tenant Security Deposit. On the Effective Date, Tenant shall deliver to Landlord a cash security deposit in the total amount of FIFTY THOUSAND FOUR HUNDRED TWENTY ONE and No/100 Dollars ($50,421.00) (the “Initial Security Deposit Payment”). On June 1, 2013 and on the first (1^st) day of each month thereafter through and including May, 1, 2014, Tenant shall deposit with Landlord an amount equal to EIGHT THOUSAND FOUR HUNDRED FOUR and No/100 Dollars ($8,404.00) (each, an “Additional Deposit”; each Additional Deposit together with the Initial Security Deposit Payment is collectively referred to herein as, the “Security Deposit”). The Security Deposit shall increase on a pro-rata basis from time to time as and when any Landlord’s Additional Investment is funded during the Term by an amount equal to ten percent (10%) of such Landlord’s Additional Investment. Tenant shall deliver such additional amounts to Landlord within ten (10) calendar days of Landlord’s written demand therefor which, when received by Landlord, shall immediately be deemed to be part of the Security Deposit. The Security Deposit shall be retained by Landlord for the duration of the Term of this Lease, subject to the terms of Section 16.4. If Tenant performs all of Tenant’s obligations hereunder, then at the expiration of the Term, and after Tenant has vacated the Leased Property, the Security Deposit, or so much thereof as has not been applied or used by Landlord as provided in this Lease, shall be returned to Tenant, without payment of interest or other increment for its use. No trust or escrow relationship is created herein between Landlord and Tenant with respect to the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its general accounts and may commingle the same with other funds of Landlord.

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3.10 Security for Lease. The Security Deposit shall be held by Landlord as security for the faithful observance and performance by Tenant of all the terms, covenants and conditions of this Lease and the Affiliated Leases to be observed and performed. If an Event of Default shall occur and be continuing under this Lease or one or more of the Affiliated Leases, then Landlord may, at its option, and without prejudice to any other remedy which Landlord may have hereunder or under such Affiliated Leases, make use, apply or retain all or any portion of the Security Deposit for the payment of any Rent, the funding of Additional Charges or other charges arising out of an Event of Default, the funding of the Reserve or for the payment of any sum to which Landlord may become obligated by reason of such Event of Default. Without limiting the foregoing, in the event Tenant fails to timely deposit into the Reserve any amounts which are required to be deposited by Tenant pursuant to Section 5.2.2 hereof or of the Affiliated Leases, then Landlord may apply the Security Deposit to fund such amounts. If Landlord so uses or applies all or any portion of the Security Deposit, Tenant shall, within five (5) days after written demand therefor, deliver to Landlord cash in the amount equal to any amounts of the Security Deposit so used, applied or retained by Landlord. TENANT HEREBY ACKNOWLEDGES AND AGREES THAT (A) THE SECURITY DEPOSIT SHALL NOT BE CONSIDERED AS PREPAID RENT HEREUNDER; (B) LANDLORD’S DAMAGES HEREUNDER SHALL NOT BE LIMITED TO THE AMOUNT OF THE SECURITY DEPOSIT; AND (C) LANDLORD HAS ENTERED INTO THIS LEASE IN RELIANCE UPON THE SECURITY DEPOSIT.

3.11 Security Agreement. Tenant hereby grants to Landlord a security interest in the Security Deposit and Reserve as security for Tenant’s obligations to Landlord hereunder and Tenant agrees that, in addition to all other rights and remedies available to Landlord, Landlord shall have all rights of a secured party under Applicable Law with respect to such proceeds. Tenant agrees to execute and deliver all such instruments as may be required by Landlord to evidence and/or perfect these security interests. At Landlord’s expense, Landlord may file at the state and county Uniform Commercial Code filing offices any financing statement or other instrument needed to evidence and/or perfect these security interests. Tenant hereby grants to Landlord a power of attorney specifically limited to Landlord’s execution and filing of any financing statement or other instrument needed to evidence and/or perfect Landlord’s aforesaid security interest, which power is coupled with an interest and is irrevocable during the Term.

ARTICLE 4

USE OF THE LEASED PROPERTY

4.1 Permitted Use.

4.1.1 Permitted Use. Tenant covenants and agrees that it shall, throughout the Term of this Lease, except during the continuation of a Force Majeure Event, continuously use and occupy the Leased Property solely for operation of the Business, and for such other uses as may be necessary or incidental to such use, and for no other purpose without interruption (the foregoing being referred to as the “Permitted Use”). Subject to Sections 16.1 and 16.2 hereof,

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without the prior written consent of Landlord, no Affiliate of Tenant may be a subtenant or concessionaire in the Leased Property. No use shall be made or permitted to be made of the Leased Property which will cause the cancellation of any insurance policy covering the Leased Property or any part thereof, nor shall Tenant sell or otherwise provide or permit to be kept, used or sold in or about the Leased Property any article which may be prohibited by law or by the standard form of fire insurance policies, or any other insurance policies required to be carried hereunder, or fire underwriter’s regulations. Tenant shall, at its sole cost, comply with all Insurance Requirements. Tenant shall not take or omit to take any action, the taking or omission of which materially impairs the value or the usefulness of the Leased Property or any part thereof for its Permitted Use.

4.1.2 Necessary Approvals. Tenant shall at all times during the Term of this Lease and in accordance with the terms of this Lease maintain, in good standing, all Permits and approvals necessary to use and operate, for its Permitted Use, the Leased Property and the Business operated thereon under Applicable Laws, and shall provide to Landlord, upon Landlord’s request, a copy of any documents or information pertaining to said Permits and approvals. Landlord shall, at no cost or liability to Landlord, reasonably cooperate with Tenant in this regard.

4.1.3 Lawful Use, Etc. Tenant shall not use or suffer or permit the use of the Leased Property or Tenant’s Personal Property, if any, for any unlawful purpose. Tenant shall not commit or suffer to be committed any waste on the Leased Property nor shall Tenant cause or permit any unlawful nuisance thereon or therein. Tenant shall not suffer nor permit the Leased Property, the OTA Assets, or any portion thereof, to be used in such a manner as (i) would reasonably be expected to impair Landlord’s title thereto or to any portion thereof, (ii) would reasonably be expected to allow a claim or claims for adverse usage or adverse possession by the public, as such, or of implied dedication of the Leased Property or any portion thereof, or (iii) are likely to result in a material, negative change in its quality or condition.

4.1.4 Compliance with Legal Requirements. Tenant shall at all times, at its sole cost and expense, keep, maintain and operate the Leased Property in compliance with all Legal Requirements; provided that the cost or expense of any improvement, alteration, repair or addition required under any Legal Requirement or necessary for compliance with any Applicable Law shall be paid for using funds from the Reserve and otherwise in accordance with Article 5 hereof. Tenant agrees to give Landlord Notice of any notices, orders or other communications relating to Legal Requirements affecting the Leased Property which is or are enacted, passed, promulgated, made, issued or adopted, a copy of which is served upon, or received by, Tenant, or a copy of which is posted on or fastened or attached to the Leased Property, within five (5) Business Days after service, receipt, posting, fastening or attaching. At the same time, Tenant will inform Landlord as to the work or steps which Tenant proposes to do or take in order to comply therewith. Tenant shall manage the use of all Hazardous Substances stored at, or used in connection with, the Leased Property and Business in accordance with all applicable Environmental Laws.

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4.2 Environmental Matters.

4.2.1 Except in accordance with Applicable Laws, Tenant shall at all times during the Term keep the Leased Property free of Hazardous Substances. Neither Tenant nor any of its employees, agents, invitees, licensees, contractors, guests, or subtenants (if permitted) shall use, generate, manufacture, refine, treat, process, produce, store, deposit, handle, transport, Release (as defined below), or dispose of Hazardous Substances in, on, at, under, from or about the Leased Property or the Environment thereof, in violation of any Applicable Law(s). Tenant shall give Landlord prompt Notice of any claim received by Tenant from any person, entity, or applicable Governmental Agencies that a Release or disposal of Hazardous Substances has occurred or otherwise been identified on the Leased Property or the Environment thereof, and shall strictly comply with and correct, at Tenant’s sole cost and expense, any and all violations of Applicable Law(s) to the written satisfaction of the applicable Governmental Agencies and Landlord. Upon request of Landlord, Tenant shall provide Landlord with a copy of any and all written correspondence between any such applicable Governmental Agency and Tenant. Under this Section 4.2, the term “Release” shall mean any actual presence in, on, at, under, from, or the spilling, leaking, migrating, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the Environment of any Hazardous Substance(s). Tenant shall not knowingly or intentionally discharge or permit to be discharged into any septic facility or sanitary sewer system serving the Leased Property any Hazardous Substance(s), toxic or hazardous sewage or waste other than that which is permitted by Applicable Laws or which is normal domestic waste water for the type of business contemplated by this Lease to be conducted by Tenant on, in, at or from the Leased Property. Any Hazardous Substance(s) toxic or hazardous sewage or waste which is produced or generated in connection with the use or operation of the Leased Property shall be handled and disposed of as required by and in strict compliance with all Applicable Law(s), or shall be pre treated to the level of domestic wastewater, as specified by Applicable Law(s), prior to discharge into any septic facility or sanitary sewer system serving the Leased Property.

4.2.2 Tenant acknowledges and understands that Landlord has or shall be conducting surveys of all Leased Property improvements for asbestos/asbestos containing materials (“ACM”) and suspect lead based paint (“LBP”) (collectively, “HUD Materials”), including preparation of an ACM survey and LBP survey prepared by an EP in accordance with any and all guidelines and/or regulations promulgated by the applicable Governmental Authorities associated with HUD Materials and all Applicable Laws. If Landlord determines, in its sole discretion, that HUD Materials are present based on any such ACM and/or LBP survey reports, Tenant covenants and warrants to Landlord that (a) Tenant shall, within fifteen (15) Business Days from the date of Tenant’s receipt of the ACM and/or LBP survey reports, prepare and implement (including all required employee training), at Tenant’s sole cost and expense and using an EP pre-approved by and otherwise reasonably acceptable to Landlord, an operations and maintenance plan (“O&M Plan”) to properly manage any and all the HUD Materials at the Leased Property in accordance with any and all guidelines promulgated by the applicable Governmental Authorities associated with HUD Materials and all Applicable Laws, and (b) if any development, construction, renovation or any other work to be conducted on the Leased Property (collectively, “Site Development”) is reasonably likely to or actually disturbs, damages, or otherwise adversely affects any HUD Materials on the Leased Property, Tenant shall adhere to the guidelines and/or regulations promulgated by the applicable Governmental Authorities and Applicable Laws in connection with Tenant’s timely, lawful and proper

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abatement, management and removal of the HUD Materials prior to any such Site Development. Any and all abatement, management and removal of HUD Materials from the Leased Property shall be undertaken at Tenant’s sole cost, charge and expense, which cost, charge and expense may be paid from the Reserve pursuant to Article 5 hereof. Tenant shall further be liable for any cost, charge, expense or other damages which Landlord incurs as a result of the failure of Tenant to timely comply with its obligations, if any, under this Section 4.2.2. If Tenant fails to complete and/or fully implement the O&M Plan, then Landlord shall have the right, but not the obligation, to undertake, complete and/or implement the O&M Plan, or any portion thereof, and all costs and expenses incurred by Landlord in connection therewith shall be added to the Adjusted Lease Basis. The O&M Plan obligation shall terminate when all HUD Materials have been properly abated at and disposed of from the Leased Property.

4.3 Continuous Operations. Tenant shall continuously operate the Leased Property in the manner required hereunder, shall maintain sufficient skilled staff and employees, and shall maintain adequate levels and quality of P&E, to operate the Leased Property as herein required at its sole cost and expense throughout the entire Term of this Lease. Subject to Section 4.5(f), Tenant shall not enter into any management agreement with respect to the Leased Property unless such management agreement is approved in writing by Landlord, at Landlord’s sole and absolute discretion, and any such management agreement shall be expressly subordinate to the interests of Landlord and the holder of any Facility Mortgage, and the payment of any management fees thereunder shall be expressly subordinate to payment of Rent under this Lease.

4.4 Compliance With Restrictions, Etc. Tenant, at its sole cost and expense, shall comply in all respects with all Permitted Encumbrances affecting the Leased Property and Tenant shall comply with and perform all of the obligations set forth under the same to the extent that the same are applicable to the Leased Property or to the extent that the same would, if not complied with or performed, impair or prevent the continued use, occupancy and operation of the Leased Property for the purposes set forth in this Lease; provided, however, the foregoing shall not require Tenant to perform any of Landlord’s obligations under any Permitted Encumbrance relating to a Facility Mortgage or any other financing incurred by Landlord. Further, in addition to Tenant’s payment obligations under this Lease, Tenant shall pay all sums charged, levied or assessed under any Permitted Encumbrances (other than any encumbrances relating to a Facility Mortgage or any other financing incurred by Landlord) promptly as the same become due and shall, upon receipt of written request by Landlord, promptly furnish Landlord evidence of payment thereof.

4.5 Standard of Operation. Throughout the Term of this Lease, Tenant shall continuously operate (except during a Force Majeure Event) the Business and the Leased Property in full compliance with the terms hereof in a manner consistent with the level of operation maintained as of the Effective Date, as may be improved from time to time, including, without limitation, the following:

(a) to operate the Leased Property and the Business in a prudent manner and in material compliance with Applicable Laws, Accessibility Laws, Legal Requirements and regulations relating thereto, and maintain all Permits and any other agreements necessary for the use and operation of the Business;

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(b) to maintain sufficient P&E and Inventory of types and quantities for the Business to enable Tenant adequately to operate the Business;

(c) to keep all Leased Improvements, OTA Assets and P&E located on the Land or used or useful in connection with the Business in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needed and proper repairs, renewals, replacements, additions and improvements thereto to keep the same in good operating condition, reasonable wear and tear excepted;

(d) to maintain sufficient working capital to operate the Leased Property as herein required (working capital shall mean assets which are reasonably necessary and used for the day to day operation of the Leased Property, including, without limitation, (i) amounts sufficient for the maintenance of change and petty cash funds, amounts deposited in operating bank accounts, receivables, prepaid expenses, and (ii) funds required to (A) maintain Inventory, (B) pay all Operating Expenses as they become due, less accounts payable and accrued current liabilities, and (C) maintain the Leased Property in good repair, working order and condition, reasonable wear and tear excepted);

(e) to keep, maintain, operate, and use the Leased Property, Business and OTA Assets in compliance with the terms hereof, and at the level of operation conducted at the Facility as of the Effective Date;

(f) to recruit, train and employ appropriate personnel, and, if applicable, retain management and/or consulting services from an Affiliate or other qualified operator or service provider, approved by Landlord, for same; provided that to the extent an Affiliate is engaged to provide services upon the Leased Property, such Affiliate shall be compensated at the prevailing market rates for the area in which the Facility is located; and further provided that Tenant shall not enter into any agreement with an Affiliate or otherwise which purports to obligate Landlord or which survives the expiration or earlier termination of this Lease without the prior written approval of Landlord. The Agreements with the Affiliates referenced in Exhibit I attached hereto and made a part hereof are deemed approved by Landlord; and

(g) to provide prompt written notice to Landlord of material or extraordinary developments, lawsuits, violation of any Legal Requirements and fines relating to the use and operation of the Leased Property or the Business.

4.6 Standards, Not Control. Landlord and Tenant stipulate and agree that the means, pricing, policies, and methods used and actions taken to operate the Business are within the sole control and election of Tenant, and are not specified by or under the control of Landlord. Accordingly, Landlord shall have no responsibility for any action taken by Tenant in order to manage or operate the Business.

4.7 Survival. As to conditions and uses of Tenant existing or occurring prior to the expiration or sooner termination of this Lease, the provisions of this Article 4 shall survive the expiration or sooner termination of this Lease.

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ARTICLE 5

MAINTENANCE AND REPAIRS

5.1 Tenant’s Obligations.

5.1.1 Tenant shall, at its sole cost and expense, keep the Leased Property in good working order and repair, reasonable wear and tear excepted, and shall promptly make all necessary and appropriate repairs and replacements thereto of every kind and nature reasonably required for the standard of operation for the Business as set forth herein, whether interior or exterior, structural or nonstructural, foreseen or unforeseen or arising by reason of a condition existing prior to the commencement of the Term and whether or not necessitated by siltation, wear, tear, acts of God, obsolescence or defects, latent or otherwise, and shall use all reasonable precautions to prevent damage or injury. All repairs shall be made in a good, workmanlike manner, consistent with the standards generally employed by owners and operators of nursing facilities comparable to the Facility, as may be improved from time to time, in accordance with all applicable federal, state and local statutes, ordinances, by laws, codes, rules and regulations relating to any such work.

5.1.2 Tenant shall also, at its sole cost and expense, put, keep, replace and maintain Tenant’s Personal Property in good repair and in good, safe and substantial order, reasonable wear and tear excepted, howsoever the necessity or desirability for repairs may occur, and whether or not necessitated by wear, tear, obsolescence or defects. Tenant may at any time and from time to time remove and dispose of any of Tenant’s Personal Property which is either (i) obsolete or unfit for use or which is no longer useful in the operation of the Business or (ii) not reasonably required for the operation of the Business as required herein.

5.1.3 In addition to the foregoing, Tenant shall, at its sole cost and expense, comply with and perform any maintenance obligations and/or requirements set forth in any and all applicable agreements or permits concerning storm water control or drainage procedures and any agreements or permits applicable to any rights in or to navigable waters associated with or related to the Leased Property or the operation thereof.

5.2 Reserve

5.2.1 Landlord shall establish an interest bearing reserve account (the “Reserve”) in a bank designated by Landlord. All interest earned on the funds in the Reserve shall be added to and remain a part of the Reserve. Both Tenant and Landlord shall be signatories on the Reserve and both parties approval shall be required prior to a party making a withdrawal from the Reserve. Notwithstanding the foregoing, so long as no Tenant Event of Default has occurred and is continuing, Tenant shall be permitted to withdraw funds from the Reserve without Landlord’s prior approval (but with written notice to Landlord), so long as the withdrawn funds are for projects to be funded from the Reserve pursuant to the Reserve Budget and the amounts withdrawn are consistent with such budget. Further, upon the occurrence and continuance of an Event of Default, only Landlord’s approval shall be required to withdraw funds from the Reserve. Such account shall be established in Landlord’s name and control for the purposes set forth in this Lease. The purpose of the Reserve is to cover the cost of the following, to the extent carried out in accordance with this Lease (collectively, “Reserve Expenditures”):

(a) replacements (including P&E Replacements) and renewals and additions to the P&E located at the Land or used in connection with the Business (other than food and beverages located at any restaurant operated in connection with the Business); and

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(b) repairs, alterations (including any Permitted Renovations contemplated by Section 6.2 hereof, subject to the provisions of Section 6.2.2 hereof), improvements, renewals, replacements and additions, whether routine, non routine or major, to the Leased Improvements, including without limitation, those required in order to cause the Leased Property to comply with Applicable Laws and those which are normally capitalized under GAAP such as renovations, alterations, improvements, renewals, replacements and additions (but not ordinary maintenance or repair) to (i) any structures, including bearing walls, foundations, exterior facades, interior walls, roofs and ceilings, any mechanical, electrical, heating, ventilating, air conditioning, plumbing and vertical transportation elements of the Leased Improvements, and all other related improvements and facilities; and (ii) signage, storm drain system, parking lot and related facilities and all other related improvements and facilities, which expenditures Tenant reasonably believes should be made for the Leased Property for the following Fiscal Year in order to maintain the Leased Property in a commercially reasonable condition consistent with the standard of operation for the Business required herein.

(c) In accordance with the terms of Section 4.2.2 hereof, any abatement, management, cleanup, removal or remediation work with respect to any Hazardous Substances, including, without limitation any HUD Materials.

5.2.2 On or before the tenth (10^th) Business Day following the end of each Accounting Period during the Term hereof, Tenant shall transfer into the Reserve an amount equal to one twelfth (1/12) of the Reserve Payment. The term “Reserve Payment” shall mean FIFTY-EIGHT THOUSAND AND NO/100 DOLLARS ($58,000.00) per annum during the period commencing on the Effective Date and ending on December 31, 2013, and, thereafter, on the first (1^st) day of each Fiscal Year, the Reserve Payment shall be increased by three percent (3%) per annum. Notwithstanding anything to the contrary in this Section 5.2.2, in the event that an amount different than the Reserve Payment set forth above is set forth in a Reserve Budget, or a greater amount is required by the lender holding the first Mortgage on the Facility, then the Reserve Payment shall be such different or greater amount, as the case may be.

5.2.3 On or before November 1st of each Fiscal Year (and in no event later than November 15^th of each year), of each Fiscal Year (and within sixty (60) days of the Effective Date for the first Fiscal Year), Tenant shall prepare an estimate (the “Reserve Budget”) of Reserve Expenditures anticipated during the ensuing Fiscal Year, and shall submit such Reserve Budget to Landlord for its review. Such Reserve Budget shall reflect by category the projected budget for Reserve Expenditures for the Leased Property and assumptions on the basis of which such categories were prepared in narrative form if necessary, including separate budget items for all projected expenditures for replacements, substitutions and additions to Tenant’s Personal Property. Tenant shall provide to Landlord reasonable additional detail, information and

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assumptions used in the preparation of the Reserve Budget as requested by Landlord, and shall also submit to Landlord with the Reserve Budget good faith longer range projections of planned Reserve Expenditures for an additional three (3) Fiscal Years. Tenant shall review the Reserve Budget with Landlord, and subject to Landlord’s approval, Tenant shall implement such Reserve Budget for the successive Fiscal Year (during which it shall, if approved by Landlord, be referred to as the “Approved Reserve Budget”). In addition, Landlord shall have the right to reasonably disapprove any expenditures to be made pursuant to the Reserve Budget which are not in compliance with Applicable Laws. Further, Landlord’s approval of any expenditure pursuant to the Reserve Budget shall not be, or be deemed to be, an assumption by Landlord of any liability in connection with the expenditures made. Pending resolution of any dispute, the specific disputed item of the Reserve Budget shall be suspended and replaced for the Fiscal Year in question by an amount equal to the lesser of (a) that proposed by Tenant for such Fiscal Year, or (b) such budget item for the Fiscal Year prior thereto. Subject to the terms of this Section 5.2.3, Tenant shall not deviate from the Approved Reserve Budget without the prior reasonable approval of Landlord, except in the case of an emergency where immediate action is necessary to prevent imminent danger to person or property (an “Emergency”). In such circumstances, Tenant shall use good faith efforts to obtain the approval of Landlord if practicable and if such efforts would not pose a risk to the condition of the Leased Property or harm to any person, and in any event provide notice to Landlord as promptly as possible of such expenditure, the amount of and the reason for the same.

5.2.4 Tenant shall, consistent with the Approved Reserve Budget, from time to time make Reserve Expenditures from the Reserve as it reasonably deems necessary in accordance with Section 5.2 and Section 5.2.3. Tenant shall provide to Landlord, within thirty (30) days after the end of each Accounting Period, an itemized statement setting forth Reserve Expenditures made to date during the Fiscal Year, including appropriate supporting documentation such as receipts, invoices or other relevant information required to support and account for such Reserve Expenditures.

5.2.5 In the event Reserve Expenditures not otherwise provided for in the Approved Reserve Budget are required (a) as a result of Legal Requirements, a Force Majeure Event and/or are otherwise required for the continued safe and orderly operation of the Leased Property, (b) due to an Emergency threatening the Leased Property, its guests, invitees or employees, or (c) because the continuation of a given condition will subject Tenant or Landlord to civil or criminal liability (“Unforeseen Reserve Expenditures”), Tenant shall give Landlord Notice thereof, which Notice shall set forth in reasonable detail the nature of the Unforeseen Reserve Expenditures and the estimated cost thereof, and Landlord agrees that it shall not unreasonably withhold, condition or delay its approval of such Unforeseen Reserve Expenditures.

5.2.6 In the event funds in the Reserve shall be insufficient, or are reasonably projected by Tenant to be insufficient for necessary and permitted Reserve Expenditures, including, without limitation, Unforeseen Reserve Expenditures as set forth under Section 5.2.5 hereof (collectively, “Unfunded Reserve Expenditures”), Tenant shall give Landlord Notice thereof, which Notice shall set forth in reasonable detail the nature of the Unfunded Reserve Expenditures and the estimated cost thereof, and Landlord, at Tenant’s request but in Landlord’s sole and absolute discretion, shall approve and fund the amount necessary to pay for such Unfunded Reserve Expenditures and the amounts so funded shall constitute part of Landlord’s Additional Investment.

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5.2.7 All interest earned on the Reserve shall be added to and become a part thereof, and all P&E Replacements purchased with funds from the Reserve shall be and remain the property of Landlord and shall be treated as Leased Property pursuant to Section 2.1(e). All funds in the Reserve shall be the property of Landlord throughout the Term and upon expiration or earlier termination of this Lease, subject to Section 5.2.8 below and Tenant’s rights to use the same in accordance with this Article 5.

5.2.8 It is understood and agreed that, during the Term, the Reserve shall be maintained and used solely in connection with the Leased Property. At the end of each Accounting Period, any amounts remaining in the Reserve shall be carried forward to the next Accounting Period, but Tenant shall not receive a credit for such remaining amounts against the Reserve Payment to be deposited by Tenant in such next Accounting Period. If this Lease is terminated or for any reason expires, all funds remaining in the Reserve shall be retained by Landlord as the sole and exclusive property of Landlord.

5.2.9 If Landlord wishes to grant a security interest in or create another encumbrance on its interest in the Reserve in connection with a Facility Mortgage, including all or any part of the existing or future funds therein, or any general intangible in connection therewith, the instrument granting such security interest or creating such other encumbrance shall expressly provide that such security interest or encumbrance is subject to the rights of Tenant with respect to the Reserve as set forth herein so long as no Tenant Event of Default is occurring and continuing.

5.3 Landlord Funding. If Landlord provides Landlord’s Additional Investment to fund the costs of construction, renovation and/or refurbishment, as applicable, with respect to the Leased Property (an “Improvement Project”), Landlord and Tenant acknowledge and agree that (a) all amounts funded by Landlord in connection with such Improvement Project shall be deemed and treated as Landlord’s Additional Investment and shall be added to and become part of the Adjusted Lease Basis, (b) all amounts disbursed by Landlord in connection with such Improvement Project shall be used by Tenant solely in connection with the Permitted Renovations to the Leased Property approved in writing by Landlord in connection with such Improvement Project, (c) the terms, conditions, rights and obligations of Tenant and Landlord, as applicable, set forth in this Section 5.3 shall be complied with in all respects by Tenant and Landlord, as applicable, with respect to such Improvement Project, and (d) all improvements and personal property acquired in connection with such Improvement Project shall be the property of Landlord and shall be part of the Leased Property hereunder.

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ARTICLE 6

IMPROVEMENTS, ETC.

6.1 Prohibition. Except for Minor Alterations as hereinafter expressly provided in Section 6.2, no portion of the Leased Property shall be demolished, removed or altered by Tenant in any manner whatsoever without the prior written consent and approval of Landlord. Tenant shall be entitled and obligated to undertake all alterations to the Leased Property required by any Legal Requirements and, in such event, Tenant shall comply with the provisions of Section 6.2 below.

6.2 Permitted Renovations. The activities permitted pursuant to Section 6.2.1 and Section 6.2.2 below shall collectively constitute “Permitted Renovations”.

6.2.1 Minor Alterations. Landlord acknowledges that certain minor alterations and renovations to the Leased Improvements may be undertaken by Tenant from time to time (“Minor Alterations”). Landlord hereby agrees that Tenant shall be entitled to perform such Minor Alterations on or about the Leased Improvements without the prior approval of Landlord; provided, however, that the cost of each Minor Alteration shall not exceed Two Hundred Thousand and No/100 Dollars ($200,000.00), and the same shall not weaken or impair the structural strength of any buildings or other structural improvements which constitute part of the Leased Improvements, or alter their design or appearance (including, but not limited to, a reduction in the number of units), materially impair the use of any of the service facilities located on the Leased Property, or fundamentally affect in any detrimental manner the character or suitability of, the Leased Improvements for the Permitted Use above, or materially lessen or impair the value thereof. If Tenant elects to perform any Minor Alterations, the cost thereof shall be borne by Tenant and accounted for in accordance with GAAP unless the cost of such Minor Alteration constitutes an approved Reserve Expenditure, an Unforeseen Reserve Expenditure which has been approved by Landlord pursuant to Section 5.2.5 or an Unfunded Reserve Expenditure which has been approved by Landlord pursuant to Section 5.2.6.

6.2.2 Additions, Expansions and Structural Alterations. All alterations, additions, expansions and renovations to the Leased Improvements which do not qualify as Minor Alterations shall constitute “Major Alterations.” Except as expressly permitted in Section 6.1 and Section 6.2.1 above, nothing in this Article 6 or elsewhere in this Lease shall be deemed to authorize Tenant to perform any Major Alterations; it being understood that Tenant may do so only with the prior written consent and approval of Landlord, which consent and approval may be withheld by Landlord in its sole and absolute discretion (unless the Major Alteration is required by any Governmental Agency, in which case Landlord’s consent shall not be unreasonably withheld, conditioned or delayed), and may be conditioned upon the payment by Tenant to Landlord of all reasonable costs incurred by Landlord in evaluating the same, providing additional insurance and such other conditions as Landlord may impose. If Tenant elects to perform any Major Alterations, the cost thereof shall be borne by Tenant unless the Major Alteration constitutes an Improvement Project which has been approved by Landlord pursuant to Section 5.3, an approved Reserve Expenditure or an Unforeseen Reserve Expenditure which has been approved by Landlord pursuant to Section 5.2.5 or an Unfunded Reserve Expenditure which has been approved by Landlord pursuant to Section 5.2.6 or involves the use of insurance proceeds to repair, replace or reconstruct following any damage or destruction.

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6.3 Conditions to Reserve Expenditures and Permitted Renovations. In connection with any Reserve Expenditures Permitted Renovations pursuant to the Approved Reserve Budget, Tenant shall satisfy the following conditions:

(a) Except in the case of Minor Alterations, before the commencement of any Permitted Renovations, plans and specifications therefor or a detailed itemization thereof prepared by a licensed architect reasonably approved by Landlord or other design professional appropriate under the circumstances reasonably approved by Landlord shall be furnished to Landlord for its review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. Such approval shall not constitute Landlord’s agreement that such plans and specifications are in compliance with Applicable Laws or an assumption by Landlord of any liability in connection with the Permitted Renovations contemplated thereby. In the case of Minor Alterations, to the extent applicable, Tenant shall furnish to Landlord a complete set of plans and specifications therefore or a detailed itemization thereof for its records.

(b) To the extent required by any Legal Requirements and Applicable Laws, before the commencement of any such work, Tenant shall obtain the approval thereof by all Governmental Agencies having or claiming jurisdiction of or over the Leased Property, and with any public utility companies having an interest therein. In connection with any such work Tenant shall materially comply with all Legal Requirements and Applicable Laws, of all other Governmental Agencies having or claiming jurisdiction of or over the Leased Property and of all their respective departments, bureaus and offices, and with the requirements, if any, of such public utilities, of the insurance underwriting board or insurance inspection bureau having or claiming jurisdiction, or any other body exercising similar functions, and of all insurance companies then writing policies covering the Leased Property or any part thereof.

(c) Tenant represents and warrants to Landlord that all such work will be performed in a good and workmanlike manner and in accordance with the plans and specifications required under this Section 6.3 therefor, the terms, provisions and conditions of this Lease and all governmental requirements.

(d) Landlord, at its sole cost and expenses and upon not less than twenty-four (24) hours Notice to Tenant, shall have the right to inspect any such work at all times during normal working hours using such inspector(s) as it may deem necessary so long as such inspections do not unreasonably interfere with Tenant’s work and the Business (but Landlord shall not thereby assume any responsibility for the proper performance of such work in accordance with the terms of this Lease, nor any liability arising from the improper performance thereof).

(e) All work comprising a part of the Permitted Renovations or other work pursuant to which Reserve Expenditures are used, shall, subject to Section 7.1 hereof, be performed free of any Liens on Landlord’s fee simple and/or leasehold interest, or Tenant’s leasehold interest, in the Leased Property.

(f) To the extent required by any Legal Requirements or Applicable Laws, upon substantial completion of any Permitted Renovations or other work pursuant to which Reserve Expenditures are used, Tenant shall procure a certificate of occupancy, certificate of completion or other final approvals, if applicable, from the appropriate Governmental Agencies and provide copies of same to Landlord

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(g) Tenant shall, and hereby agrees to, indemnify, save, pay, insure and hold Landlord and its Affiliated Parties harmless from and against and reimburse Landlord for any and all loss, damage, cost, liability, fee and expense (including, without limitation, reasonable attorney’s fees based upon service rendered at hourly rates) incurred by or asserted against Landlord which is occasioned by or results, directly or indirectly, from any such work conducted upon the Leased Property; whether or not the same is caused by, or is the fault of Tenant or any agent, employee, manager, contractor, subcontractor, laborer, supplier, materialmen or any other third party; provided, however, Tenant shall not be obligated to indemnify Landlord from any loss as aforesaid caused by Landlord’s gross negligence or willful misconduct.

6.4 Salvage. Other than Tenant’s Personal Property, all materials which are scrapped or removed in connection with maintenance and repair performed pursuant to Article 5 and the making of Permitted Renovations pursuant to this Article 6 shall be disposed of by Tenant and the net proceeds thereof, if any, shall be deposited in the Reserve.

6.5 Project Budget Overruns. Other than as specifically set forth herein, Landlord shall not be responsible for the cost of any Improvement Projects or Permitted Renovations contemplated or permitted hereby. Landlord shall have the right to review and approve a budget for any Improvement Projects or Permitted Renovations which Landlord agrees to fund. With respect to any Improvement Project or Permitted Renovation which Landlord agrees to fund, all such amounts shall be added to and become a part of the Adjusted Lease Basis, as more particularly described in Section 5.3 hereof. In the event Landlord agrees to fund any Improvement Project or Permitted Renovation, Landlord agrees that it will fund up to ten percent (10%) in excess of the original approved budget, but shall have no responsibility to fund any costs which, in the aggregate, exceed one hundred and ten percent (110%) of the approved budgeted amount for such Improvement Project or Permitted Renovation. To the extent that Tenant requests that Landlord fund and Landlord agrees to fund such amounts in excess of one hundred and ten percent (110%) of the approved budgeted amount for any Improvement Project or Permitted Renovation, one hundred fifty percent (150%) of such excess amounts funded by Landlord shall be added to and become a part of Adjusted Lease Basis. Notwithstanding the foregoing, even in the event Tenant does not request Landlord to fund such excess, Tenant shall remain obligated to diligently complete any such Improvement Project or Permitted Renovation in a timely and workmanlike manner, consistent with all Landlord approved plans and specifications and in conformance with all Applicable Laws. Tenant acknowledges that any expenditure in excess of one hundred and ten percent (110%) of the approved budgeted amount for such Improvement Project or Permitted Renovation, and any other expenditure for Improvement Projects or Permitted Renovations, may be subject to Landlord obtaining the approval of such expenditure by the board of directors of the Parent of Landlord.

ARTICLE 7

LANDLORD’S INTEREST NOT SUBJECT TO LIENS

7.1 Liens, Generally. Tenant shall not, directly or indirectly, create or cause to be imposed, claimed or filed upon the Leased Property, the OTA Assets or any of Tenant’s assets, properties or income or any portion thereof related to the Leased Property or upon the interest of

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Landlord therein, any Lien of any nature whatsoever, except upon Landlord’s prior written consent which consent may be withheld in Landlord’s sole and absolute discretion. If, because of any act or omission of Tenant, any such Lien shall be imposed, claimed or filed by any party whosoever or whatsoever, Tenant shall, subject to Section 7.3, at its sole cost and expense, cause the same to be promptly (and in no event later than thirty (30) days following receipt of notice of such Lien) fully paid and satisfied or otherwise promptly discharged of record (by bonding or otherwise) and Tenant shall indemnify, save, pay, insure and hold Landlord harmless from and against any and all costs, liabilities, suits, penalties, claims and demands whatsoever, and from and against any and all reasonable attorney’s fees, at both trial and all appellate levels, resulting or on account thereof and therefrom. In the event that Tenant shall fail to comply with the foregoing provisions of this Section 7.1, Landlord shall have the option, but not the obligation, of paying, satisfying or otherwise discharging (by bonding or otherwise) such Lien and Tenant agrees to reimburse Landlord, upon demand and as an Additional Charge, for all sums so paid and for all costs and expenses incurred by Landlord in connection therewith, together with interest thereon, until paid.

Notwithstanding anything to the contrary, Tenant shall (i) be entitled to secure accounts receivable financing (the “AR Financing”) from an accounts receivable lender (the “AR Lender”) of Tenant’s selection, which AR Financing shall be secured by a first priority lien in such Tenant’s accounts receivable and other Tenant’s Personal Property located at the Facility and the Affiliated Leased Properties (but no others) (the “AR Collateral”); and, (ii) in connection with Tenant securing such AR Financing, Landlord shall subordinate the priority of its security interest, if any, in the AR Collateral, including accounts receivable, pursuant to the terms of a commercially reasonable Intercreditor Agreement agreed to between Landlord, Tenant, AR Lender and any Mortgagee. Further, the restrictions contained herein shall not be construed to prohibit purchase money liens in connection with the financing of vehicles or other equipment and property serving the Facility, provided the sum of such financing of equipment and property (other than vehicles) does not exceed $25,000 per year.

7.2 Construction or Mechanics Liens. Landlord’s interest in the Leased Property shall not be subjected to Liens of any nature by reason of Tenant’s construction, alteration, renovation, repair, restoration, replacement or reconstruction of any improvements on or in the Leased Property, or by reason of any other act or omission of Tenant (or of any person claiming by, through or under Tenant) including, but not limited to, construction, mechanics’ and materialmen’s liens. All persons dealing with Tenant are hereby placed on notice that such persons shall not look to Landlord or to Landlord’s credit or assets (including Landlord’s interest in the Leased Property) for payment or satisfaction of any obligations incurred in connection with the construction, alteration, renovation, repair, restoration, replacement or reconstruction thereof by or on behalf of Tenant. Tenant has no power, right or authority to subject Landlord’s interest in the Leased Property to any construction, mechanic’s or materialmen’s lien or claim of lien. If a Lien, a claim of lien or an order for the payment of money shall be imposed against the Leased Property on account of work performed, or alleged to have been performed, for or on behalf of Tenant, Tenant shall, subject to Section 7.3, within thirty (30) days after written notice of the imposition of such Lien, claim or order, cause the Leased Property to be released therefrom by the payment of the obligation secured thereby or by furnishing a bond or by any other method prescribed or permitted by Applicable Laws. If a Lien is released, Tenant shall

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thereupon furnish Landlord with a written instrument of release which has been recorded or filed in the appropriate office of land records of the County in which the Leased Property is located, and otherwise sufficient to establish the release as a matter of record. Before commencing any work relating to alterations, additions, or improvements affecting the Leased Property (other than Minor Alterations), Tenant shall notify Landlord in writing of the expected date of commencement thereof. Landlord shall then have the right at any time and from time to time to post and maintain on the Land and Leased Improvements such notices as Landlord reasonably deems necessary to protect the Leased Property and Landlord from mechanics’ liens, materialmen’s liens, or any other Liens. In any event, Tenant shall pay when due all claims for labor or materials furnished to or for Tenant at or for use in the Land and Leased Improvements. Tenant shall not permit any mechanics’ or materialmen’s liens to be levied against the Leased Property for any labor or material furnished to Tenant or claimed to have been furnished to Tenant or to Tenant’s agents or contractors in connection with work of any character performed or claimed to have been performed on the Land or the Leased Improvements by or at the direction of Tenant, and subject to Section 7.3, shall promptly cause the release of any such Liens as provided hereinabove.

7.3 Contest of Liens. Tenant may, at its option, contest the validity of any Lien or claim of lien if Tenant shall have first posted an appropriate and sufficient bond in favor of the claimant or paid the appropriate sum into court, if permitted by and in strict compliance with Applicable Laws, and thereby obtained the release of the Leased Property from such Lien. If judgment is obtained by the claimant under any Lien, Tenant shall pay the same promptly after such judgment shall have become final and the time for appeal therefrom has expired without appeal having been taken. Tenant shall, at its sole cost and expense, using counsel reasonably approved by Landlord, diligently defend the interests of Tenant and Landlord in any and all such suits; provided, however, that Landlord may, nonetheless, at its election and expense, engage its own counsel and assert its own defenses, in which event Tenant shall cooperate with Landlord and make available to Landlord all information and data which Landlord deems necessary or desirable for such defense.

7.4 Notices of Commencement of Construction. Notwithstanding anything to the contrary contained in this Lease, Tenant shall not be deemed to be a partner, joint venturer or agent of Landlord. Tenant agrees that any contracts it enters into for improvements to the Leased Property shall clearly state that Landlord is not responsible for the obligations of Tenant thereunder. Further, Tenant shall not permit any Major Alteration to be commenced until such time as Tenant has provided Landlord with a fully executed copy of the construction contract evidencing incorporation of the aforesaid language.

ARTICLE 8

TAXES AND ASSESSMENTS

8.1 Obligation to Pay Taxes and Assessments. Throughout the entire Term, Tenant shall bear, pay and discharge as Additional Charges and not later than the last day on which payment may be made without penalty or interest, any and all taxes, assessments, charges, levies, fees (including, without limitation, license, permit, inspection, authorization and similar fees) and other impositions and charges of every kind and nature whatsoever, extraordinary as well as

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ordinary, foreseen or unforeseen, and each and every installment thereof which shall or may during or with respect to the Term hereof accrue and/or be charged, laid, levied, assessed, or imposed upon, or arise in connection with, the use, occupancy, operation or possession of the Leased Property or any part thereof or the Business conducted thereon, including, without limitation, ad valorem real and personal property taxes, all taxes charged, laid, levied, assessed or imposed in lieu of or in addition to any of the foregoing by virtue of all present or future laws, ordinances, requirements, orders, directions, rules or regulations of Governmental Agencies, and all assessments and charges imposed pursuant to the Permitted Encumbrances (other than those relating to a Facility Mortgage or other financing of Landlord) or other documents of record affecting title to the Leased Property, with the understanding that any such Additional Charge that relates to any period prior to the expiration of the Term or the earlier termination of this Lease which does not become due and payable until after such expiration or termination shall be the responsibility of Tenant. Tenant shall prepare and timely file all applicable returns required with respect to such taxes, assessments, impositions or charges, including, without limitation, all personal property tax returns required in connection with the Leased Property. Upon Landlord’s request, Tenant shall promptly furnish to Landlord satisfactory evidence of the payment of all such taxes, assessments, impositions or charges and copies of any such returns filed. Notwithstanding the foregoing, Tenant shall not be responsible for Additional Charges due and payable after the expiration of the Term to the extent that the same relate and apply interests and benefits accruing to Landlord after the Term. Tenant shall have no right to approve any Facility Mortgage or other documents relating to indebtedness of Landlord and Tenant shall have no responsibility to pay any tax, charge or imposition levied with respect to any Facility Mortgage.

8.2 Tenant’s Right to Contest Taxes. Notwithstanding the foregoing, Tenant shall have the right, after prior written notice to Landlord, to contest at its own expense the amount and validity of any taxes affecting the Leased Property by appropriate proceedings under Applicable Laws conducted in good faith and with due diligence and to postpone or defer payment thereof, provided and so long as:

(a) Such proceedings shall operate to suspend the collection of such taxes with respect to the Leased Property;

(b) Neither the Leased Property nor any part thereof would be in immediate danger of being forfeited or lost by reason of such proceedings, postponement or deferment; and

(c) Tenant shall have furnished Landlord with security for payment of the contested taxes which is satisfactory to Landlord, and, in the event that the preconditions set forth in (a) and (b) above are no longer met, Landlord shall have the right to draw upon such security to pay and discharge the taxes in question and any Liens against the Leased Property arising thereunder.

8.3 Tax and Insurance Escrow Account. During the existence of any Event of Default hereunder, or upon request of a Mortgagee, Landlord shall have the right, by written notice to Tenant effective as of the date of such notice, to require Tenant to pay or cause to be paid into a separate account (the “Tax and Insurance Account”) to be established by Tenant with a lending institution or other third party escrow agent designated by Landlord (which Tax and Insurance

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Account shall not be removed from such lending institution or other third party escrow agent without the express prior approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed), and which Landlord may draw upon, a reserve amount sufficient to discharge the obligations of Tenant under Section 8.1 and Article 9 hereof (other than worker’s compensation insurance premiums) with respect to real estate taxes and insurance premiums for the applicable Fiscal Year as and when they become due (such amounts, the “Tax and Insurance Escrow Amount”). During each month commencing with the first full calendar month following the receipt of said notice from Landlord, Tenant shall deposit into the Tax and Insurance Account one twelfth of the Tax and Insurance Escrow Amount so that as each installment of insurance premiums and real estate taxes becomes due and payable, there are sufficient funds in the Tax and Insurance Account to pay the same. If the amount of such insurance premiums and real estate taxes has not been definitively ascertained by Tenant at the time when any such monthly deposit is to be paid, Landlord shall require payment of the Tax and Insurance Escrow Amount based upon the amount of premiums and real estate taxes paid for the preceding year, subject to adjustment as and when the amount of such premiums and real estate taxes are ascertained by Tenant. The Tax and Insurance Escrow Amount in the Tax and Insurance Account shall be and constitute additional security for the performance of Tenant’s obligations hereunder and shall be subject to Landlord’s security interest therein and shall, if there are sufficient funds in escrow, be used to pay taxes and insurance premiums when due. Landlord and Tenant shall execute such documentation as may be necessary to create and maintain Landlord’s security interest in the Tax and Insurance Account.

ARTICLE 9

INSURANCE

9.1 Insurance Requirements. Commencing upon the Effective Date, Tenant shall procure and maintain the following insurance at all times during the term of this Agreement, provided, however, that Landlord reserves the right, at its sole discretion, to place on behalf of Landlord and Tenant, any of the insurance coverages required herein, Landlord shall provide Tenant with written notice prior to exercising such right:

(a) Property Insurance, (and to the extent applicable, Builder’s Risk Insurance) including boiler and machinery and/or Equipment Breakdown coverage to the building(s) and contents by risks commonly covered by an ISO Special Cause of Loss or its equivalent. The amount of such insurance shall be not less than one hundred percent (100%) of the full insurable replacement cost of the Leased Improvements, physical OTA Assets, furniture, furnishings, fixtures, equipment, and other items included in the Facility and owned by Landlord or Tenant from time to time, without reduction for depreciation. The determination of the replacement cost amount shall be adjusted annually to comply with the requirements of the insurer issuing such coverage or, at Landlord’s election, by reference to such indices, appraisals, or information as Landlord determines in its reasonable discretion. Full insurable replacement cost, as used herein means, with respect to any and all Leased Improvements, the cost of replacing the Land and Leased Improvements without regard to deduction for depreciation (less cost of excavations, foundations, and footings below the lowest basement floor). Such coverage

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shall contain a replacement cost/agreed amount endorsement, waiver of co-insurance, and Ordinance and Law coverage endorsement which shall contain Coverage A equal to the full replacement cost of the undamaged portion of the building and Coverage B and Coverage C in an amount at least equal to Three Million and No/100 Dollars ($3,000,000.00) combined limit for both demolition and increased cost of construction, with Landlord having the right, in its reasonable discretion, to require greater coverage.

(b) Flood Insurance, not less than full replacement cost basis with a limit equivalent to the replacement cost of the Facility (the Real Property and its personal property) or maximum available at commercially reasonable terms with deductibles that are reasonable and customary to similar properties. Coverage must include business income, including loss of rents. If the Facility or any part thereof is identified by the Federal Emergency Management Agency (or successor governmental agency or authority performing such identification functions) as being situated in an area now or subsequently designated as having special flood hazards (including, without limitation, those areas designated as Zone A or Zone V), flood insurance in an amount equal to the maximum insurance available under the appropriate National Flood Insurance Administration program, with any excess limits as Landlord may require; provided, however, under no circumstances shall such limits exceed $2,500,000 per occurrence/annual aggregate. Coverage must include business income, including loss of rents. In the event that the deductible is greater than $500,000, such higher deductible must be acceptable to Landlord, which approval will not be unreasonably withheld.

(c) Earthquake Insurance is required if the Facility is located in whole or in part within an Earthquake zone, as determined by the U.S. Geological Survey, including insurance coverage for loss or damage caused by earth movement. Such coverage, including business income, shall be for not less than the probable maximum loss as determined by a recognized earthquake/engineering firm, less a reasonable deductible subject to the approval of Landlord. Such insurance shall contain limits and deductibles acceptable to the Landlord and in accordance with that which is customarily carried by owners of properties similar in type, location and quality as the Leased Improvements

(d) Business Interruption Insurance (including loss of rents) which must be maintained in an amount sufficient to provide proceeds which will cover the “Actual Loss Sustained” during restoration of any portion of the Facility or the Leased Improvements. Actual Loss Sustained shall mean projected gross revenues (less non-recurring expenses) for a period of not less than twelve (12) months with a one hundred twenty (120) day extended period of indemnity (or such longer period as may be reasonably required by any Mortgagee, but in no event more than 180 days). The amount of coverage shall be adjusted annually to reflect changes to Actual Loss Sustained during the succeeding twelve (12) month period. The perils covered by this insurance shall be the same as those required in Sections 9.1(a), 9.1(b), and 9.1(c) above.

(e) If required by Landlord or Mortgagee, all insurance policies, except earthquake and flood, procured under Sections 9.1(b) and 9.1(c) above shall provide terrorism coverage, to the extent available through the commercial insurance market or by Federal Act at rates, terms and conditions acceptable to Landlord. If Landlord requires terrorism insurance to be procured by Tenant under Section 9.1(a) above, Landlord shall authorize Tenant to procure such coverage and Tenant shall provide Landlord said rates, terms and conditions of the terrorism insurance upon binding coverage for the Facility.

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(f) Commercial General Liability on an occurrence form (ISO CG0001 or its equivalent) with unimpaired limits not less than $1,000,000.00 per occurrence and $2,000,000.00 general aggregate. Further, liquor liability coverage shall be provided to the extent such exposure exists. An endorsement shall be included naming Landlord as an additional insured as respects liability arising from work, operations, occupancy or use of the Leased Property by or on behalf of Tenant. Coverage must include contractual liability, product/completed operations liability (unless otherwise agreed) and broad form property damage and must contain an exception to any pollution exclusion which insures damage or injury arising out of heat, smoke, or fumes from a hostile fire. Such insurance must be written on an occurrence basis. Liability insurance maintained by Tenant will be primary coverage naming the mortgagee as an additional insured, without right of contribution by any similar insurance that may be maintained by Landlord. Coverage for sexual/physical abuse or molestation should be included. Should “Claims Made” coverage be obtained, the coverage under such policy must be continuously maintained with a retroactive date preceding the commencement date of this Lease and shall continue for a period following the expiration or termination of this Lease that is sufficient to cover any applicable statute of limitations.

(g) Commercial Automobile Liability insurance including coverage for owned, non-owned and leased automobiles liability with limits of at least $1,000,000 per accident.

(h) Employee Dishonesty/Crime insurance in an amount acceptable to Landlord and Tenant; provided that maintenance of the deductible shall be commercially reasonable and shall be maintained by owners of properties similar in type, location and quality as the Facility.

(i) Workers’ Compensation and Employers Liability insurance shall be in the form and amount required by state statute with limits of at least $500,000 each accident; $500,000 Disease-Policy Limit, and $500,000 Disease-Each Employee, or such other amounts as are required by law or available on a voluntary basis.

(j) Employment Practices Liability insurance with limits in an amount equal to the following: (i) $100,000 per accident for accidental injury; (ii) $100,000 per employee; and (iii) $100,000 aggregate for occupational illness or disease, including coverage for a third party.

(k) Professional Liability coverage for claims arising as a result of alleged negligence, dishonesty, errors or omissions while performing or rendering professional services with limits of not less than $250,000 per occurrence and $1,000,000 in the aggregate. Coverage for sexual/physical abuse or molestation shall be included.

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(l) Umbrella/Excess Liability insurance on an occurrence form above the required Commercial General Liability, Commercial Auto Liability and Employer’s Liability coverages with limits of not less than $5,000,000 per occurrence and $5,000,000 general aggregate written on a form excess over and no less broad than the liability coverage referenced above.as the underlying commercial general liability; automobile liability, and employer’s liability. Coverage must drop down for exhausted aggregate limits under Commercial General Liability, Commercial Auto Liability and Employer’s Liability subject to a self-insured retention not to exceed $10,000 per occurrence or accident.

(m) Mortgagee Provisions, (if applicable) which must match standard clause of ISO forms of Lender’s Loss Payable clause as further described in section D of ISO form CP 12 18 (06 07); a copy of which must be included with the certificate of insurance.

(n) Such additional insurance or increased insurance limits as may be reasonably required, from time to time, by Landlord (including, without limitation, any mortgage, security agreement or other financing permitted hereunder and then affecting the Leased Property, as well as any declaration, ground lease or easement agreement affecting the Leased Property), or any Mortgagee, provided the same is customarily carried by a majority of comparable facilities in the area.

So long as Tenant utilizes a captive insurance Program with respect to Professional Liability insurance required hereunder, on an annual basis concurrent with its delivery of financial statements to Landlord, Tenant shall also provide Landlord with an annual report from its captive reflecting the use of funds and the reserve balances available for Professional Liability claims therein.

9.2 Waiver of 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.

9.3 General Insurance Provisions. Except as otherwise provided in this Article 9, the property insurance deductible shall not exceed Fifty Thousand and No/100 Dollars ($50,000.00), unless such greater amount is agreeable to both Landlord and Tenant, or if a higher deductible for high hazard risks (i.e., wind or flood) is mandated by the insurance carrier. All insurance policies pursuant to this Article 9 shall: (i) be with insurers authorized to conduct business in the state within which the Leased Property is located; (ii) currently have and at all times during this Lease maintain a rating of at least A- from Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc. or an AM Best Rating of A-VII or better; (iii) specifically identify insured location(s) by name and contain the complete address of the Leased Property; (iv) be for terms of at least one (1) year; (v) contain deductibles to be approved by Landlord in its reasonable discretion; (vi) not cause Landlord to be liable for any insurance premiums thereon or subject to any assessments thereunder, ; and (vii) all such coverages required herein shall be primary and any insurance carried by any additional insured shall be excess and non-contributory to the extent of the indemnification obligation pursuant to Section 9.4 below. All such policies

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described in Section 9.1, with the exception of Workers’ Compensation, Employer’s Liability, Employee Dishonesty/Crime, Professional Liability and Employment Practices Liability, shall name Landlord, CNL Healthcare Properties, Inc., a Maryland corporation, or its designated Subsidiaries and Affiliates, and any Mortgagee whose name and address has been provided to Tenant as additional insureds, Mortgagee’s, lenders loss payees, or mortgagees, as their interests may appear and to the extent of their indemnity. All loss adjustments shall be payable as provided in Article 10. Tenant shall deliver certificates of liability (Acord 25) and Evidence of Commercial Property Insurance (Acord 28) thereof to Landlord and Mortgagee prior to their effective date (and, with respect to any renewal binder, no less than ten (10) days prior to the expiration of the existing policy and the renewal policy no more than thirty (30) days after the renewal of the policy), which certificates shall state the nature and level of coverage reported thereby, as well as the amount of the applicable deductible. Upon Landlord’s request, duplicate original copies of all insurance policies to be obtained by Tenant shall be provided to Landlord by Tenant. All such policies must provide Landlord (and any Mortgagee whose name and address has been provided to Tenant if required by the same) thirty (30) days prior written notice of any material change or cancellation of such policy.

In the event Tenant shall fail to effect such insurance as herein required, to pay the premiums therefor or to deliver such certificates to Landlord or any Mortgagee at the times required, Landlord shall have the right, but not the obligation, subject to the provisions of Section 12.4, to acquire such insurance and pay the premiums therefor, which amounts shall be payable to Landlord, upon demand, as an Additional Charge, together with interest accrued thereon at the Overdue Rate from the date such payment is made until (but excluding) the date repaid.

9.4 Indemnification of Landlord. Except as expressly provided herein, Tenant shall protect, indemnify, pay, save, insure, defend and hold harmless Landlord for, from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and reasonable expenses (including, without limitation, reasonable attorneys’ fees), to the maximum extent permitted by law, imposed upon or incurred by or asserted against Landlord by reason of: (a) any accident, injury to or death of persons or loss of or damage to property of third parties occurring on or about the Leased Property or adjoining sidewalks or rights of way under Tenant’s control during the Term, and (b) any use, misuse, condition, management, maintenance or repair by Tenant or anyone claiming under Tenant of the Leased Property or Tenant’s Personal Property during the Term, or any litigation, proceeding or claim by Governmental Agencies relating to such use, misuse, condition, management, maintenance, or repair thereof to which Landlord is made a party; provided, however, that Tenant’s obligations hereunder shall not apply to any liability, obligation, claim, damage, penalty, cause of action, cost or expense arising from any gross negligence or willful misconduct of Landlord, its employees, agents, contractors or invitees. Any such claim, action or proceeding asserted or instituted against Landlord covered under this indemnity shall be defended by counsel selected by Tenant and reasonably acceptable to Landlord, at Tenant’s sole cost and expense. The obligations of Tenant under this Section 9.4 shall survive the expiration or any early termination of this Lease.

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ARTICLE 10

CASUALTY

10.1 Restoration and Repair. If during the Term the Leased Property shall be totally or partially destroyed and thereby rendered Unsuitable for Its Permitted Use, Tenant shall give Landlord prompt Notice thereof. Either Landlord or Tenant may, by the giving of Notice thereof to the other party within sixty (60) days after such casualty occurs, terminate this Lease, whereupon Landlord shall be entitled to retain the insurance proceeds payable on account of such damage and Tenant shall pay to Landlord the amount of any deductible. If this Lease is not terminated, Tenant shall be obligated to promptly proceed with the complete restoration and repair of the Leased Property first using available proceeds from any insurance policy then in place naming Tenant as an insured party, plus the amount of any deductible thereunder. In the event that the total amount of such available insurance proceeds and any deductible to be paid by Tenant thereunder are insufficient to pay all necessary repair and restoration costs and expenses, Landlord shall fund any additional costs or expenses to repair and restore the same, and any and all amounts so funded by Landlord shall be deemed and treated as Landlord’s Additional Investment hereunder and, accordingly, the Adjusted Lease Basis shall increase by an amount equal to the amount funded by Landlord contemporaneously with the funding thereof by Landlord. Tenant further expressly acknowledges, understands and agrees that in the event that this Lease is terminated as aforesaid, Landlord may settle any insurance claims and Tenant shall, upon request of Landlord, reasonably cooperate in any such settlement. If during the Term, the Leased Property shall be destroyed or damaged in whole or in part by fire, windstorm or any other cause whatsoever, but the Leased Property either (i) is not rendered Unsuitable for Its Permitted Use or (ii) is rendered Unsuitable for Its Permitted Use but neither Landlord nor Tenant terminate this Lease in the manner provided above, then, Tenant shall give Landlord prompt Notice thereof and Tenant shall, subject to the provisions of Section 10.2 below, repair, reconstruct and replace the Leased Property, or the portion thereof so destroyed or damaged, at least to the extent of the value and character thereof existing immediately prior to such occurrence and in compliance with all Legal Requirements, including any alterations to the Leased Property required to be made by any Governmental Agencies due to any changes in code or building regulations (which Tenant acknowledges may increase the replacement value of the Leased Property which Tenant will then be required to insure, due to any changes in code or building regulations). All such restoration work shall be started as promptly as practicable by Tenant following Tenant’s receipt of insurance proceeds and, if applicable, any additional funds Landlord is obligated to fund pursuant to this Section 10.1, and thereafter diligently completed by Tenant. Tenant shall, however, promptly take such action as is necessary to assure that the Leased Property (or any portion thereof), does not constitute a nuisance or otherwise present or constitute a health or safety hazard. Notwithstanding anything herein to the contrary, if damage to or destruction of the Leased Property occurs during the last twenty-four (24) months of the Term and such damage or destruction cannot reasonably be expected to be fully repaired or restored prior to the date that is twelve (12) months prior to the end of such Term, Tenant shall have no obligation to repair or restore such damage or destruction.

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10.2 Escrow and Disbursement of Insurance Proceeds. If this Lease is not otherwise terminated pursuant to Section 10.1, then in the event of a casualty resulting in a loss to the Leased Improvements and/or the P&E in an amount greater than Fifty Thousand and No/100 Dollars ($50,000.00) (as determined by an architect or engineer selected by Landlord), subject to the rights of any Mortgagee, the proceeds of all insurance policies maintained by Tenant shall be deposited in Landlord’s name in an escrow account at a bank or other financial institution designated by Landlord, and shall be used by Tenant for the repair, reconstruction or restoration of the Leased Property in accordance with the requirements of this Article 10. Tenant shall, at the time of establishment of such escrow account and from time to time thereafter until said work shall have been completed and paid for, furnish Landlord with adequate evidence acceptable to Landlord that at all times the undisbursed portion of the escrowed insurance proceeds, together with any funds made available by Tenant, is sufficient to pay for the repair, reconstruction or restoration in its entirety. Landlord may, at its option, require, prior to advancement of said escrowed insurance proceeds (i) approval of plans and specifications by an architect or other design professional appropriate under the circumstances and approved by Landlord and Tenant (which approval shall not be unreasonably withheld, conditioned or delayed), (ii) general contractors’ estimates, (iii) architect’s certificates, (iv) unconditional lien waivers of general contractors, if available, (v) evidence of approval by all Governmental Agencies and other regulatory bodies whose approval is required, and (vi) such other terms as a Mortgagee or lender of Landlord may reasonably require. The escrowed insurance proceeds shall be disbursed by Landlord, not more than bi-weekly, upon (y) certification of the architect or engineer selected by Landlord and having supervision of the work that such amounts are the amounts paid or payable for the repair, reconstruction or restoration, and (z) submittal by Tenant of a written requisition and substantiation therefor on AIA Forms G702 and G703 (or on such other form or forms as may be reasonably acceptable to Landlord). Tenant shall obtain, and make available to Landlord, receipted bills and, upon completion of said work, full and final waivers of lien. In the event of a casualty resulting in a loss payment for the Leased Property in an amount equal to or less than the amount stated above, the proceeds shall be paid to Tenant, and shall be applied towards repair, reconstruction and restoration. Any and all loss adjustments with respect to losses payable hereunder shall require the prior written consent of Landlord, which consent may be withheld in Landlord’s reasonable discretion. All salvage resulting from any risk covered by insurance shall belong to Tenant, provided any rights to the same have been waived by the insurer. In addition, notwithstanding anything in this Lease to the contrary, Tenant shall be strictly liable and solely responsible for the amount of any deductible and shall pay for all repairs, reconstruction or alterations up to the full amount of such deductible (and provide evidence of such payment to Landlord by documentation reasonably acceptable to Landlord) before any insurance proceeds are used for repairs, reconstruction or alterations.

10.3 No Abatement of Rent; Reduction in Adjusted Lease Basis. Unless terminated in accordance with the provisions of Section 10.1 above, this Lease shall remain in full force and effect and Tenant’s obligation to make all payments of Rent and to pay all Additional Charges as and when required under this Lease shall remain unabated during the Term notwithstanding any casualty to the Leased Property. Notwithstanding the foregoing, to the extent that any insurance proceeds are received by Landlord in connection with a casualty and not used in the repairs, reconstruction and restoration of the Leased Property, then the Adjusted Leases Basis shall be reduced by an amount equal to the amount of such insurance proceeds not applied to the repairs, reconstruction and restoration of the Leased Property. The provisions of this Article 10 shall be considered an express agreement governing any event of casualty involving the Leased Property and, to the maximum extent permitted by law, Tenant hereby waives the application of any local or state statute, law, rule, regulation or ordinance in effect during the Term which provides for such abatement.

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10.4 Business Interruption Insurance. All insurance proceeds payable by reason of any loss of or damage to any of Tenant’s Personal Property and the business interruption insurance maintained for the benefit of Tenant shall be paid to Tenant; provided, however, no such payments shall diminish or reduce the insurance payments otherwise payable to or for the benefit of Landlord hereunder.

10.5 Restoration of Tenant’s Property. If Tenant is required to restore the Leased Property as hereinabove provided, Tenant shall either (i) restore all alterations and improvements made by Tenant and Tenant’s Personal Property, or (ii) replace such alterations and improvements and Tenant’s Personal Property with improvements or items of the same or better quality and utility in the operation of the Leased Property.

10.6 Waiver. Tenant hereby waives to the maximum extent permitted by law, any statutory or common law rights of termination which may arise by reason of any damage or destruction of the Leased Property and agrees that its rights shall be limited to those set forth in Section 10.1.

10.7 Rights of Mortgagee. Notwithstanding any provision herein to the contrary, so long as a Facility Mortgage is in existence, all insurance proceeds with respect to the Leased Property to be paid and disbursed to Landlord pursuant to the terms of this Lease shall be paid and disbursed in accordance with the loan documents executed in connection with such Facility Mortgage, provided that such Mortgagee agrees in writing with Landlord and Tenant to disburse such proceeds in accordance with this Lease.

ARTICLE 11

CONDEMNATION

11.1 Total Condemnation, Etc. If the whole of the Leased Property shall be taken or Condemned for any public or quasi public use or purpose, by right of eminent domain or by purchase in lieu thereof, or if a substantial portion of the Leased Property shall be so taken or condemned such that the portion or portions remaining is or are not sufficient and suitable for the continued operation thereof as required herein, so as to effectively render the Leased Property Unsuitable for its Permitted Use, then this Lease and the Term hereby granted shall cease and terminate (without prejudice to Landlord’s and Tenant’s respective rights to an award under Section 11.3 below) as of the date on which the Condemnor takes possession and all Rent shall be paid by Tenant to Landlord up to that date or refunded by Landlord to Tenant if Rent has previously been paid by Tenant beyond that date.

11.2 Partial Condemnation. If a portion of the Leased Property shall be subject to any Condemnation, and the portion or portions remaining can be adapted and used for the conduct of the Business in accordance with the terms of this Lease, such that the Leased Property is not effectively rendered Unsuitable for its Permitted Use, then Tenant shall, utilizing, as reasonably

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necessary, Condemnation proceeds paid to Landlord from the Condemnor, promptly restore the remaining portion or portions thereof to a condition comparable to their condition at the time of such Condemnation, less the portion or portions lost by the taking, and this Lease shall continue in full force and effect with no reduction or abatement of Rent, subject to Section 11.4 below.

11.3 Disbursement of Award. Subject to the rights of any Mortgagee, the entire Condemnation award for the Leased Property or the portion or portions thereof so taken shall be apportioned between Landlord and Tenant as follows: (a) if this Lease terminates due to a Condemnation, Landlord shall be entitled to the entire award; provided, however, that any portion of the award expressly made for the taking of Tenant’s leasehold interest in the Leased Property, loss of business during the remainder of the Term, and the taking of Tenant’s Personal Property shall be the sole property of and payable to Tenant, and (b) if this Lease does not terminate due to such Condemnation, Tenant shall be entitled to the award to the extent required for restoration of the Leased Property, and Landlord shall be entitled to the balance of the award not applied to restoration. In any Condemnation proceedings, Landlord and Tenant shall each seek its own award in conformity herewith, at its own expense. If this Lease does not terminate due to a Condemnation, Tenant shall, with due diligence, restore the remaining portion or portions of the Leased Property in the manner hereinabove provided. In such event, and subject to the rights of any Mortgagee, the proceeds of the award to be applied to restoration shall be deposited with a bank or financial institution designated by Landlord as if such award were insurance proceeds, and the amount so deposited will thereafter be treated in the same manner as insurance proceeds are to be treated under Section 10.2 of this Lease until the restoration has been completed and Tenant has been reimbursed for all the costs and expenses thereof. If the award is insufficient to pay for the restoration, Landlord shall be responsible for the remaining cost and expense of such restoration and such cost shall be added to the Adjusted Lease Basis. All proceeds in excess of those required for restoration shall be disbursed to Landlord upon completion of such restoration.

11.4 No Abatement of Rent. This Lease shall remain in full force and effect and Tenant’s obligation to make all payments of Rent and to pay all other charges as and when required under this Lease shall remain unabated during the Term notwithstanding any Condemnation involving the Leased Property. Notwithstanding the foregoing, in the event that 10% or more of occupied residential units are rendered uninhabitable as a result of post-condemnation restoration, then so long as Tenant is diligently pursuing such restoration, then rent shall abate on a pro-rata basis from the date of taking to the completion of restoration. Also, notwithstanding the foregoing, if this Lease is not terminated as a result of a Condemnation, to the extent that any portion of the award received by Landlord in connection with a Condemnation is not used in the repairs, reconstruction and restoration of the Leased Property, then the Adjusted Leases Basis shall be reduced by an amount equal to the amount of such award not applied to the repairs, reconstruction and restoration of the Leased Property.

The provisions of this Article 11 shall be considered an express agreement governing any Condemnation involving the Leased Property and, to the maximum extent permitted by Applicable Laws, no local or State statute, law, rule, regulation or ordinance in effect during the Term which provides for such abatement shall have any application in such case.

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ARTICLE 12

DEFAULTS AND REMEDIES

12.1 Tenant Events of Default. Each of the following events shall be an “Event of Default” hereunder by Tenant and shall constitute a breach of this Lease:

(a) If Tenant shall fail to (i) pay, when due, any Minimum Rent due hereunder and such failure in each such event shall continue for a period of five (5) Business Days after such amounts become due.

(b) If Tenant shall fail to (i) pay, when due, any Additional Charge due hereunder; or (ii) make any required contribution to the Reserve pursuant to Section 5.2 of this Lease, and such failure in each such event shall continue for a period of five (5) days after receipt of written Notice thereof from Landlord.

(c) If any assignment, transfer or sublease of or concerning any of the Leased Property, specifically excluding the P&E, shall be made or deemed to be made that is in violation of the provisions of this Lease.

(d) If any lien or encumbrance of the Leased Property or OTA Assets or if any assignment, transfer, sublease, lien or encumbrance of the P&E shall be made or deemed to be made that is in violation of the provisions of this Lease and such violation or failure shall continue for a period of ninety (90) days after written notice thereof from Landlord.

(e) If Tenant shall cease the actual and continuous operation of the Business contemplated by this Lease to be conducted by Tenant upon the Leased Property (and such cessation is not the result of casualty, Condemnation or a Permitted Renovation and accompanying restoration or is not otherwise permitted by Landlord or is not the result of Applicable Laws or during an Emergency or other Force Majeure Event); or if Tenant shall vacate, desert or abandon the Leased Property; or if the Leased Property shall become empty and unoccupied; or if any of the Leased Property or Leased Improvements are used or are permitted to be used for any purpose, or for the conduct of any activity, other than the Permitted Use.

(f) If, at any time during the Term of this Lease, Tenant shall file in any court, pursuant to any statute of either the United States or of any State, a petition in bankruptcy or insolvency, or for reorganization or arrangement, or for the appointment of a receiver or trustee of all or any portion of Tenant’s property, including, without limitation, the leasehold interest in the Leased Property, or if Tenant shall make an assignment for the benefit of its creditors or petitions for or enters into an arrangement with its creditors.

(g) If, at any time during the Term of this Lease, there shall be filed against Tenant in any court pursuant to any statute of the United States or of any State, a petition in bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver or trustee of all or a portion of Tenant’s property, including, without limitation, the leasehold interest in the Leased Property, and any such proceeding against Tenant shall not be dismissed within ninety (90) days following the commencement thereof.

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(h) If Tenant’s leasehold interest in the Leased Property or any property therein (including, without limitation, any material portion of Tenant’s Personal Property) shall be seized under any levy, execution, attachment or other process of court where the same shall not be vacated or stayed on appeal or otherwise within ninety (90) days thereafter, or if Tenant’s leasehold interest in the Leased Property is sold by judicial sale and such sale is not vacated, set aside or stayed on appeal or otherwise within ninety (90) days thereafter.

(i) If any of the Permits material to the operation of the Business or the use of the Land for its Permitted Use are at any time suspended and the suspension is not stayed pending appeal within thirty (30) days of the date of the notice of the suspension of any Permits material to the operation of the Business or the use of the Land for its Permitted Use, or voluntarily terminated without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole opinion and discretion.

(j) If any governmental agency or regulatory authority places a ban on admissions to the Facility and such ban is not lifted and admissions again permitted within ninety (90) calendar days; provided, however, if such violation or failure is incapable of cure by Tenant within such ninety (90) calendar days after Tenant’s diligent and continuous efforts to cure the same, Tenant shall have an additional thirty (30) days to complete such cure before it shall be an Event of Default hereunder; provided Tenant commenced the cure within the initial ninety (90) calendar days and diligently thereafter pursues its remedies with the applicable Government Agency; provided further that Tenant shall have no right to an additional cure period if the Facility is in imminent loss of licensure.

(k) If Tenant fails to give notice to Landlord not later than ten (10) Business Days after Tenant’s receipt of any fine notice from any Government Agency relating to a violation of Applicable Law at the Land or relating to the Business, which violation, if not cured, could cause a cessation of operations of the Business or a substantial portion thereof.

(l) If Tenant fails during the Term of this Lease to cure or abate any violation of Applicable Law occurring during the Term that is claimed by any Governmental Agency of any law, order, ordinance, rule, regulation or Applicable Laws pertaining to the operation of the Business or the use of the Land for its Permitted Use, and within the later of (i) the time permitted by such authority for such cure or abatement, or (ii) thirty (30) days after written notice thereof from Landlord.

(m) If Tenant violates or fails to comply with or perform any other term, provision, covenant, agreement or condition to be performed or observed by Tenant under this Lease which is not otherwise identified in this Section 12.1, and such violation or failure shall continue for a period of thirty (30) days after receipt of written notice thereof from Landlord; provided, however, if such violation or failure is incapable of cure by

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Tenant within such thirty (30) days after Tenant’s diligent and continuous efforts to cure the same, it shall not constitute an Event of Default provided Tenant commences the cure within thirty (30) days and diligently thereafter completes the cure of same within a commercially reasonable period of time after such written notice.

(n) If Tenant encumbers the Leased Property, the OTA Assets or its interests under this Lease with leasehold financing in violation hereof.

(o) If there shall be a default by any Guarantor under the Guaranty and such default is not cured within any applicable cure period.

(p) If there shall be a default by any Affiliated Tenant under any Affiliated Lease and such default is not cured within any applicable cure period. By execution of this Agreement, Tenant expressly agrees and acknowledges that for the limited purposes of assumption and rejection of this Lease under Section 365 of Title 11 of the U.S. Code, the Lease and the Affiliated Leases shall be construed as an integrated agreement and are not severable. Tenant expressly agrees and acknowledges that this Section 12.1 is a material inducement to Landlord entering into the Lease and that it has received material consideration in connection herewith.

(q) If Tenant shall be in default under any AR Financing and such default is not cured within any applicable cure period.

12.2 Landlord Remedies Upon An Event of Default by Tenant. If any of the Events of Default hereinabove specified shall occur and be continuing, Landlord shall have and may exercise any of the following rights and remedies:

(a) Landlord may, pursuant to written notice thereof to Tenant, immediately terminate this Lease and, peaceably or pursuant to appropriate legal proceedings, reenter, retake and resume possession of the Leased Property for Landlord’s own account without liability for trespass (Tenant hereby waiving any right to notice or hearing prior to such taking of possession by Landlord) and, for Tenant’s breach of and default under this Lease, recover immediately from Tenant any and all sums and damages due or in existence at the time of such termination, including, without limitation, (i) all Rent and other sums, charges, payments, costs and expenses agreed and/or required to be paid by Tenant to Landlord hereunder prior to such termination, (ii) all reasonable costs and expenses of Landlord in connection with the recovery of possession of the Leased Property, including reasonable attorney’s fees and court costs, and (iii) all reasonable costs and expenses of Landlord in connection with any reletting or attempted reletting of the Leased Property or any part or parts thereof, including, without limitation, brokerage fees, advertising costs, reasonable attorney’s fees and the cost of any alterations or repairs or tenant improvements which may be reasonably required to so relet the Leased Property, or any part or parts thereof.

(b) Landlord may, pursuant to any prior notice required by law, and without terminating this Lease, peaceably or pursuant to appropriate legal proceedings, reenter, retake and resume possession of the Leased Property for the account of Tenant, make

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such alterations of and repairs and improvements to the Leased Property as may be reasonably necessary in order to relet the same or any part or parts thereof and, directly or through a qualified management or operating company which may include an Affiliate of Landlord, operate and manage the Leased Property, and relet or attempt to relet the Leased Property or any part or parts thereof for such term or terms (which may be for a term or terms extending beyond the Term of this Lease), at such rents and upon such other terms and provisions as Landlord, in its sole discretion, may deem advisable. If Landlord takes possession and control of the Leased Property and operates the same, Tenant shall, for so long as Landlord is actively operating the Leased Property, have no obligation to operate the Leased Property but agrees that Landlord, any contract manager or operator, or any new tenant or sublessee may, to the extent permitted by Applicable Laws, operate the Business under Tenant’s Permits, including, unless prohibited by Applicable Laws, the healthcare license, if any, until same are issued in the name of Landlord or the new manager/operator or tenant or sublessee, as applicable. In addition, Tenant will reasonably cooperate with Landlord in transferring, to the extent transferable, any of Tenant’s Permits which Landlord determines would be necessary or appropriate to continue to operate the Leased Property for its Permitted Use. If Landlord relets or attempts to relet the Leased Property, or obtains a contract manager or operator for the Leased Property, Landlord shall at its sole discretion determine the terms and provisions of any new lease or sublease, or management or operating agreement, and whether or not a particular proposed manager or operator, or new tenant or sublessee, is acceptable to Landlord. Upon any such reletting, or the operation of the Leased Property by a contract manager or operator, all rents or incomes received by Landlord from such reletting or otherwise from the operation of the Leased Property shall be applied, (i) first, to the payment of all costs and expenses of recovering possession of the Leased Property, (ii) second, to the payment of any costs and expenses of such reletting and or operation, including brokerage fees, advertising costs, reasonable attorney’s fees, a reasonable management fee (if considered necessary by good business practices), and the cost of any alterations and repairs reasonably required for such reletting or operation of the Leased Property, (iii) third, to the payment of any indebtedness, other than Rent, due hereunder from Tenant to Landlord, (iv) fourth, to the payment of all Rent and other sums due and unpaid hereunder, and (v) fifth, the residue, if any, shall be held by Landlord and applied in payment of future Rent as the same may become due and payable hereunder. If the rents received from such reletting or net income from the operation of the Leased Property during any period shall be less than the Rents and Additional Charges required to be paid during that period by Tenant hereunder, Tenant shall promptly pay any such deficiency to Landlord and failing the prompt payment thereof by Tenant to Landlord, Landlord shall immediately be entitled to institute legal proceedings for the recovery and collection of the same. Such deficiency shall be calculated and paid at the time each payment of Minimum Rent or any other sum shall otherwise become due under this Lease, or, at the option of Landlord, at the end of the Term of this Lease. Landlord shall, in addition, be immediately entitled to sue for and otherwise recover from Tenant any other damages occasioned by or resulting from any abandonment of the Leased Property or other breach of or default under this Lease other than a default in the payment of Rent. No such reentry, retaking or resumption of possession of the Leased Property by Landlord for the account of Tenant shall be construed as an election on the part of

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Landlord to terminate this Lease unless a written notice of such intention shall be given to Tenant or unless the termination of this Lease be decreed by a court of competent jurisdiction. Notwithstanding any such re entry and reletting or attempted reletting of the Leased Property or any part or parts thereof for the account of Tenant without termination, Landlord may at any time thereafter, upon written notice to Tenant, elect to terminate this Lease or pursue any other remedy available to Landlord for Tenant’s previous breach of or default under this Lease.

(c) Landlord may, without reentering, retaking or resuming possession of the Leased Property, sue for all Rent and all other sums, charges, payments, costs and expenses due from Tenant to Landlord hereunder (discounted to present value) either: (i) as they become due under this Lease, taking into account that Tenant’s right and option to pay the Rent hereunder on a monthly basis in any particular Fiscal Year is conditioned upon the absence of a Default on Tenant’s part in the performance of its obligations under this Lease, or (ii) at Landlord’s option, accelerate the maturity and due date of the whole or any part of the Rent for the entire then remaining unexpired balance of the Term of this Lease, as well as all other sums, charges, payments, costs and expenses required to be paid by Tenant to Landlord hereunder, including, without limitation, damages for breach or default of Tenant’s obligations hereunder in existence at the time of such acceleration, such that all sums due and payable under this Lease shall, following such acceleration, be treated as being and, in fact, be due and payable in advance as of the date of such acceleration. Landlord may then proceed to recover and collect all such unpaid Rent and other sums so sued for from Tenant by distress, levy, execution or otherwise. Regardless of which of the foregoing alternative remedies is chosen by Landlord under this subparagraph (c), Landlord shall not be required, except as may be required by Applicable Law, to relet the Leased Property nor exercise any other right granted to Landlord pursuant to this Lease, nor, except as may be required by Applicable Laws, shall Landlord be under any obligation to minimize or mitigate Landlord’s damages or Tenant’s loss as a result of Tenant’s breach of or default under this Lease. Notwithstanding the foregoing, following such time as Landlord may obtain possession of the Leased Property, Landlord or its successor Landlord at the time of any Lease termination, shall continue to make the Leased Property available for lease, on an “as is” basis, and shall turn over the net proceeds thereof to Tenant to the extent actually received by Landlord in respect of any time period for which Landlord shall have received the full amount of Rent payable with respect thereto (albeit perhaps on a basis reasonably discounted for the time value of money or present value basis).

(d) Landlord may, in addition to any other remedies provided herein, to the extent permitted by Applicable Laws, enter upon the Leased Property or any portion thereof and take possession of (i) any and all of Tenant’s Personal Property, if any, (ii) Tenant’s books and records necessary to operate the Leased Property, and (iii) the Reserve, without liability for trespass or conversion (Tenant hereby waiving any right to notice or hearing prior to such taking of possession by Landlord) and sell the same by public or private sale, after giving Tenant reasonable notice of the time and place of any public or private sale, at which sale Landlord or its assigns may purchase all or any portion of Tenant’s Personal Property, if any, unless otherwise prevented by law. Unless

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otherwise provided by law and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable notice shall be met if such notice is given at least ten (10) days before the date of sale. The proceeds from any such disposition, less all expenses incurred in connection with the taking of possession, holding and selling of such Property (including reasonable attorneys’ fees based upon services rendered at hourly rates) shall be credited against Rent which is due hereunder.

(e) Tenant acknowledges that one of the rights and remedies available to Landlord under Applicable Law is to apply to a court of competent jurisdiction for the appointment of a receiver to collect the rents, issues, profits and income of the Leased Property and to manage the operation of the Leased Property. Therefore, in addition to any other right or remedy of Landlord under this Lease, Landlord may petition any appropriate court for appointment of a receiver to manage the operation of the Leased Property (or any portion thereof), to collect and disburse all rents, issues, profits and income generated thereby. The receiver shall be entitled to a reasonable fee for his services as receiver. All such fees and other expenses of the receivership estate shall be payable as Additional Charges under this Lease. To the extent permitted by Applicable Law, Tenant hereby irrevocably stipulates to the appointment of a receiver under such circumstances and for such purposes and agrees not to contest such appointment.

(f) In addition to the remedies hereinabove specified and enumerated, Landlord shall have and may exercise the right to invoke any other remedies allowed at law or in equity as if the remedies of reentry, unlawful detainer proceedings and other remedies were not herein provided. Accordingly, the mention in this Lease of any particular remedy shall not preclude Landlord from having or exercising any other remedy at law or in equity. Nothing herein contained shall be construed as precluding Landlord from having or exercising such lawful remedies as may be and become necessary in order to preserve Landlord’s right or the interest of Landlord in the Leased Property and in this Lease, even before the expiration of any notice periods provided for in this Lease, if under the particular circumstances then existing the allowance of such notice periods will prejudice or will endanger the rights and estate of Landlord in this Lease and in the Leased Property. For purposes hereof Landlord’s right to act before the expiration of a notice period under the preceding sentence shall only apply when an applicable governmental agency has provided written notice that such authority intends to terminate such license and/or provider number and that the final date for such termination is within thirty (30) days. In addition, any provision of this Lease to the contrary notwithstanding, no provision of this Lease shall delay or otherwise limit Landlord’s right to seek injunctive relief or Tenant’s obligation to comply with any such injunctive relief.

12.3 Landlord Event of Default; Tenant Remedies. It shall be an Event of Default by Landlord hereunder and a breach of this Lease if Landlord shall fail to perform any obligation of Landlord expressly contemplated in this Lease, and such failure shall continue for a period of forty (45) days after written Notice thereof from Tenant; provided, however, if such failure is incapable of cure by Landlord within such forty (45) days after Landlord’s diligent and continuous efforts to cure the same, Landlord shall have up to an additional period of sixty (60) days for a total of one hundred five (105) days to cure the same. Tenant shall have, as its sole and

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exclusive remedy for any such Event of Default by Landlord hereunder, the right to either (i) bring and pursue an action for specific performance against Landlord with respect to such Event of Default, in which event, Tenant shall specifically waive any right to pursue a claim for damages, or (ii) bring and pursue an action for actual damages resulting from such Event of Default. ANYTHING HEREIN CONTAINED, AND ANYTHING AT LAW OR IN EQUITY, TO THE CONTRARY NOTWITHSTANDING, TENANT HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES, IN ANY ACTION OR PROCEEDING AGAINST LANDLORD ARISING UNDER OR WITH RESPECT TO THIS LEASE, ANY RIGHT, POWER OR PRIVILEGE TENANT MAY HAVE TO TERMINATE THIS LEASE OR TO CLAIM OR RECEIVE ANY PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR OTHER SPECIAL DAMAGES (INCLUDING LOST PROFITS AND ANY CLAIMS FOR LOSS OF FUTURE REVENUES FROM LOSS OF USE OF THE LEASED PROPERTY), AND TENANT ACKNOWLEDGES AND AGREES THAT THE REMEDIES HEREIN PROVIDED WILL IN ALL CIRCUMSTANCES BE ADEQUATE. Landlord and Tenant acknowledge and agree that to the extent the provisions of this Section 12.3 conflict with any Applicable Laws, the terms and provisions of this Section 12.3 shall control.

12.4 Application of Funds. Any payments received by Landlord under any of the provisions of this Lease during the existence or continuance of any Event of Default (and any payment made to Landlord rather than Tenant due to the existence of any Event of Default) shall be applied to Tenant’s current and past due obligations under this Lease in such order as Landlord may determine or as may be prescribed by the laws of the State in which the Leased Property is located.

12.5 Landlord’s Right to Cure Tenant’s Default. If an Event of Default shall occur and be continuing beyond any applicable cure period, Landlord may, but shall have no obligation to, perform the same for the account and at the expense of Tenant. If, at any time and by reason of such Event of Default, Landlord is compelled to pay, or elects to pay, any sum of money or do any act which will require the payment of any sum of money, or is compelled to incur any expense in the enforcement of its rights hereunder or otherwise, such sum or sums, together with interest thereon at the Overdue Rate, shall be deemed an Additional Charge hereunder and shall be repaid to Landlord by Tenant promptly when billed therefor, and Landlord shall have all the same rights and remedies in respect thereof as Landlord has in respect of the rents herein reserved.

12.6 Landlord’s Security Interest and Lien. Landlord shall have, and Tenant hereby grants, a security interest in (a) Tenant’s Personal Property (specifically excluding any proprietary software or proprietary operating systems of Tenant and items listed on Schedule 12.6 attached hereto) or the equity of Tenant therein located at the Leased Property and (b) Tenant’s books and records related solely to and necessary to operate the Leased Property. Such lien shall be subordinate to any AR Financing pursuant to the terms of the Intercreditor Agreement. This security interest is granted for the purpose of securing the payment of Rent, Additional Charges, assessments, penalties and damages herein covenanted to be paid by Tenant. Upon the occurrence and continuance of an Event of Default hereunder, and subject to the terms and provisions of the Intercreditor Agreement, Landlord shall have all remedies available under

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the Uniform Commercial Code enacted in the State, including, without limitation, the right to take possession of the above-mentioned property and dispose of it by sale in a commercially reasonable manner. Tenant hereby authorizes Landlord to file such financing statements as Landlord deems necessary and appropriate in such jurisdictions as Landlord deems necessary and appropriate for the purpose of serving notice to third parties of the security interest herein granted. Tenant agrees, upon Landlord’s written demand after the occurrence and continuance of an Event of Default, to convey the OTA Assets to Landlord at no cost.

12.6.1 Landlord shall have at all times during the Term of this Lease, a valid lien for all Rent, Additional Charges and other sums of money becoming due hereunder from Tenant, upon all goods, wares, merchandise, Inventory, furniture, fixtures, equipment, vehicles and other personal property and effects of Tenant situated in or upon the Leased Property, including Tenant’s Personal Property (specifically excluding any proprietary software or proprietary operating systems of Tenant and items listed on Schedule 12.6 attached hereto) and any interest of Tenant in P&E Replacements, and such property shall not be removed therefrom except in accordance with the terms of this Lease without the approval and consent of Landlord until all arrearages in Rent, Additional Charges or other sums of money then due to Landlord hereunder shall first have been paid and discharged in full. Alternatively, the lien hereby granted may be foreclosed in the manner and form provided by law for foreclosure of security interests or in any other manner and form provided by law. The statutory lien for Rent, if any, is not hereby waived and the express contractual lien herein granted is in addition thereto and supplementary thereto. Tenant agrees to execute and deliver to Landlord from time to time during the Term of this Lease such financing statements as Landlord deems necessary and appropriate in such jurisdictions as Landlord deems necessary and appropriate in order to perfect Landlord’s lien provided herein or granted or created by state law. Tenant further agrees that during the occurrence and continuance of an Event of Default, Tenant shall not make any distributions to its shareholders, partners, members or other owners and any such distributions shall be considered and deemed to be fraudulent (within the meaning of the United States Commercial Code) and preferential and subordinate to Landlord’s claim for Rent and other sums hereunder.

12.7 Collateral Assignment. As additional security for Tenant’s performance of its obligations hereunder, Tenant hereby collaterally assigns to Landlord, to the extent assignable, all of Tenant’s right, title and interest in Permits, Operating Contracts, and other agreements and documents held by Tenant (but expressly excluding documents and other materials which are legally privileged or which pertain to the ownership, corporate structure or corporate governance of Tenant) and necessary and used to operate the Leased Property for its Permitted Use. Such collateral assignment shall become an outright assignment and shall be effective upon the expiration or sooner termination of this Lease by Landlord as a result of an Event of Default by Tenant without the need to execute any additional instruments evidencing such assignment. Tenant agrees and acknowledges that any third party may rely upon a written statement by Landlord as to an Event of Default by Tenant and the termination of this Lease. Notwithstanding the foregoing, Tenant agrees to execute and deliver to Landlord, upon the termination of this Lease by Landlord as a result of Event of Default by Tenant, such instruments evidencing the assignment contemplated hereby as may be required by Landlord in its sole and absolute discretion.

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ARTICLE 13

HOLDING OVER

If Tenant or any other Person or party claiming by, through or under Tenant shall remain in possession of the Leased Property or any part thereof following the expiration of the Term or earlier termination of this Lease without an agreement in writing between Landlord and Tenant with respect thereto, such Person or party remaining in possession shall be deemed to be a tenant at sufferance, and during any such holdover, the Rent payable under this Lease by such tenant at sufferance shall be equal to two hundred percent (200%) of the rate or rates in effect immediately prior to the expiration of the Term or earlier termination of this Lease. In no event, however, shall such holding over be deemed or construed to be or constitute a renewal or extension of this Lease.

ARTICLE 14

LIABILITY OF LANDLORD; INDEMNIFICATION

14.1 Liability of Landlord. Landlord and its Affiliates shall not be liable to Tenant, its employees, agents, invitees, licensees, customers or clients for any damage, injury, loss, compensation or claim, including, but not limited to, claims for the interruption of or loss to Tenant’s business, based on, arising out of or resulting from any cause whatsoever (other than Landlord’s gross negligence or willful misconduct), including, but not limited to: (a) repairs to any portion of the Leased Property; (b) interruption in Tenant’s use of the Leased Property; (c) any accident or damage resulting from the use or operation (by Landlord, Tenant or any other person or persons) of any equipment within the Leased Property, including without limitation, heating, cooling, electrical or plumbing equipment or apparatus; (d) the termination of this Lease by reason of the Condemnation or destruction of the Leased Property in accordance with the provisions of this Lease; (e) any fire, robbery, theft, mysterious disappearance or other casualty; (f) the actions of any other person or persons, other than Landlord or an Affiliate of Landlord; (g) any leakage or seepage in or from any part or portion of the Leased Property, whether from water, rain or other precipitation that may leak into, or flow from, any part of the Leased Property, or from drains, pipes or plumbing fixtures in the Leased Improvements; (h) any condition relating to the Environment, except as otherwise provided for herein; and (i) the existence of any Hazardous Substance located at, on or in the Land, except as otherwise provided for herein. Any goods, property or personal effects stored or placed by Tenant or its employees in or about the Leased Property including Tenant’s Personal Property, shall be at the sole risk of Tenant.

14.2 Indemnification of Landlord. Tenant shall defend, indemnify, pay, save and hold Landlord harmless from and against any and all liabilities, obligations, losses, damages, injunctions, suits, actions, fines, penalties, claims, demands, costs and expenses of every kind or nature, including reasonable attorneys’ fees and court costs, incurred by Landlord, arising directly or indirectly from: (a) any failure by Tenant to perform any of the terms, provisions, covenants or conditions of this Lease, on Tenant’s part to be performed including but not limited to the payment of any fee, cost or expense which Tenant is obligated to pay and discharge hereunder, (b) any accident, injury or damage which shall happen at, in or upon the Leased

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Property; (c) any matter or thing growing out of the condition, occupation, maintenance, alteration, repair, use or operation by any person of the Leased Property, or any part thereof, or the operation of the Business contemplated by this Lease to be conducted thereon, thereat, therein, or therefrom arising during the Term; (d) any failure of Tenant to comply with the Legal Requirements as provided for or required under this Lease; (e) the presence of any Hazardous Substance or contamination of the Leased Property or the ground water thereof, arising during the Term, whether caused by Tenant or an Affiliate of Tenant, their employees, agents, invitees, customers, licensees or contractors; (f) any discharge of toxic or hazardous sewage or waste materials from the Leased Property into any septic facility or sanitary sewer system serving the Leased Property arising on or after the date Tenant takes possession of the Leased Property, whether by Tenant or Tenant Affiliate, their employees, agents, invitees, customers, licensees or contractors; or (g) any other act or omission of Tenant or Tenant Affiliate, or any of their employees, agents, invitees, customers, licensees or contractors. Notwithstanding anything set forth above in this Section 14.2, Tenant shall not be liable for or be obligated to defend, indemnify, pay, save and hold Landlord harmless from and against any liabilities, obligations, losses, damages, injunctions, suits, actions, fines, penalties, claims, demands, costs or expenses of any kind or nature, including reasonable attorneys’ fees and court costs, resulting from Landlord’s gross negligence or willful misconduct. Tenant’s indemnity obligations under this Article and elsewhere in this Lease shall survive expiration, assignment or earlier termination of this Lease.

14.3 Notice of Claim or Suit. Tenant shall promptly notify Landlord of any material claim, action, proceeding or suit instituted or threatened against Tenant or Landlord of which Tenant receives notice or of which Tenant acquires knowledge (a “Claim”). In the event Landlord is made a party to any action for damages or other relief against which Tenant has indemnified Landlord, as aforesaid, Tenant shall at its own expense using counsel reasonably approved by Landlord, diligently defend Landlord, and pay all costs in such litigation; provided, however, that Landlord shall have the option, at its sole cost and expense, to engage its own counsel in connection with its own defense or settlement of said litigation, in which event Tenant shall reasonably cooperate with Landlord and make available to Landlord all information and data which Landlord deems necessary or desirable for such defense. In the event Landlord is required to secure its own counsel due to a conflict in the interests of Tenant and Landlord in any action for damages or other relief against which Tenant has indemnified Landlord, Tenant shall pay all of Landlord’s reasonable costs in such litigation. Notwithstanding anything to the contrary contained herein, Tenant shall not be required to pay costs incurred by Landlord in engaging separate counsel to defend Landlord pursuant to this Section 14.3, unless Landlord is required to secure its own counsel as a result of a conflict of interest between Landlord and Tenant in any action for damages or other relief against which Tenant has indemnified Landlord. Tenant is required to approve a settlement agreement for any such claim or suit as requested by Landlord and which is consistent with applicable insurance company requirements, unless Tenant posts a bond or other security acceptable to Landlord for any potentially uninsured liability amounts. Notwithstanding any provision herein to the contrary, on or before the end of each Fiscal Quarter, Tenant shall provide Landlord with a status report with respect to all Claims, which status report shall include a summary as to the status of each Claim.

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14.4 Limitation on Liability of Landlord. In the event Tenant is awarded a money judgment against Landlord, Tenant’s sole recourse for satisfaction of such judgment shall be limited to execution against Landlord’s interest in the Leased Property. In no event shall any partner, member, officer, director, stockholder or shareholder of Landlord or any partner thereof or Affiliate or Subsidiary thereof, be personally liable for the obligations of Landlord hereunder.

ARTICLE 15

REIT AND UBTI REQUIREMENTS

Tenant understands that, in order for Landlord to qualify as a real estate investment trust (a “REIT”) under the Code, the following requirements must be satisfied. The parties intend that amounts to be paid by Tenant hereunder and received or accrued, directly or indirectly, by Landlord with respect to the Leased Property (including any rents attributable to personal property that is leased with respect thereto) will qualify as “rents from real property” (within the meaning of Code Section 856(d) and Section 512(b)(3)), and that neither party will take, or permit to take, any action that would cause any amount received by Landlord under this Lease to fail to qualify as such under the Code. Consistent with this intent, the parties agree that:

15.1 Limitations on Rents Attributable to Personal Property. “Rents attributable to any personal property” leased to the Tenant cannot exceed fifteen percent (15%) of the total rent received or accrued by Landlord under this Lease for the Fiscal Year of Landlord. In addition, Landlord’s customary practice is to limit “rents attributable to any personal property” to twelve and one-half percent (12.5%) of the total rent received or accrued by Landlord pursuant to any lease agreement. Consistent therewith, the average of the fair market values of the personal property (within the meaning set forth in Section 1.512(b) 1(c)(3)(ii) of the applicable Treasury Regulations) that is leased to Tenant with respect to the Leased Property at the beginning and end of a Fiscal Year cannot exceed twelve and one-half percent (12.5%) of the average of the aggregate fair market values of the real and personal property comprising such Leased Property that is leased to Tenant under such lease at the beginning and end of such Fiscal Year (the “REIT Personal Property Limitation”). If Landlord reasonably anticipates that the REIT Personal Property Limitation will be exceeded with respect to the Leased Property for any Fiscal Year, Landlord may, at Landlord’s sole option and absolute discretion (i) notify Tenant, and Landlord and Tenant shall negotiate in good faith the purchase by Tenant of items of personal property anticipated by Landlord to be in excess of the REIT Personal Property Limitation, provided, in such event, Tenant’s responsibility to purchase such personal property would be offset by Landlord in some mutually agreeable manner, which would not result in Landlord earning income which would constitute “unrelated business taxable income” within the meaning of Section 512 of the Code, if Landlord was a “qualified trust” within the meaning of Section 856(h)(3)(E) of the Code; or (ii) restructure the ownership of Landlord and/or Landlord’s ownership of the personal property and lease, or cause an Affiliate to lease to Tenant, pursuant to a separate lease agreement, such personal property, and Tenant agrees that it shall cooperate with Landlord in good faith in connection with such restructuring and shall execute any separate or amended lease agreements, provided the same do not materially increase Tenant’s economic liability or materially affect Tenant’s rights and obligations under this Lease.

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15.2 Basis for Sublease Rent Restricted. Tenant cannot sublet the property that is leased to it by Landlord, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (a) the net income or profits derived by the business activities of the sublessee or (b) any other formula such that any portion of the rent paid by Tenant to Landlord would fail to qualify as “rents from real property” within the meaning of Section 856(d) and Section 512(b)(3) of the Code and regulations promulgated thereunder.

15.3 Landlord Affiliate Subleases Restricted. Anything to the contrary in this Lease notwithstanding, Tenant shall not sublease the Leased Property to, or enter into any similar arrangement with, any person in which Landlord owns, directly or indirectly, a ten percent (10%) or more interest, with the meaning of Section 856(d)(2)(B) of the Code, and any such action shall be deemed void ab initio. Anything to the contrary in this Lease notwithstanding, Tenant shall not sublease the Leased Property to, or enter into any similar arrangement with, any Person that Landlord would be deemed to control within the meaning of Section 512(b)(13) of the Code.

15.4 Landlord Interests in Tenant Restricted. Anything to the contrary in this Lease notwithstanding, neither party shall take, or permit to take, any action that would cause Landlord to own, directly or indirectly, a ten percent (10%) or greater interest in Tenant within the meaning of Section 856(d)(2)(B) of the Code, and any similar or successor provision thereto, and any such action shall be deemed void ab initio. In addition, anything to the contrary in this Lease notwithstanding, Tenant shall not take or permit to take, any action that would cause Landlord to own, directly or indirectly, such interest in Tenant such that amounts received from Tenant would represent amounts received from a controlled entity within the meaning of Section 512(b)(13) of the Code.

15.5 Landlord Services. Any services provided by, or on behalf of, Landlord will not prevent any amounts received or accrued from qualifying as “rents from real property” (within the meaning of Section 856(d)(2) or Section 512(b)(3) of the Code.

15.6 Certain Subtenants Prohibited. Anything to the contrary in this Lease notwithstanding, Tenant shall not sublease the Leased Property to, or enter into any similar arrangement with, any Person that would be described in Section 514(c)(9)(B)(iii) or (iv) of the Code.

15.7 Future Amendment. Tenant hereby agrees to amend this Article 15 from time to time as Landlord deems necessary or desirable in order to effectuate the intent hereof, so long as any such amendment does not increase Tenant’s economic obligations under this Lease.

ARTICLE 16

SUBLETTING AND ASSIGNMENT

16.1 Transfers Prohibited Without Consent. Tenant shall not, without the prior written consent of Landlord in each instance, which consent may be withheld in Landlord’s sole opinion and discretion, sell, assign, sublease, license, concession or otherwise transfer this Lease, or Tenant’s interest in the Leased Property together with all interests of Tenant in all property of

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any nature located and used at the Leased Property (including without limitation Tenant’s Personal Property), in whole or in part, or any rights or interest which Tenant may have under this Lease, or sublet, license or concession any part of the Leased Property, or grant or permit any Lien or encumbrance on or security interest in Tenant’s interest in this Lease, except as set forth in Section 7.1 and this Article 16. Any sale, assignment, sublease, license, concession or transfer of this Lease without the prior written consent of Landlord shall be voidable at Landlord’s option; provided however, notwithstanding anything herein to the contrary, the following transfers may be made without the prior consent of Landlords: (i) assignments or subleases with respect to the lease by Tenant to an Affiliate of Tenant; (ii) transfers of direct or indirect membership interests in Tenant between existing Members of Tenant; (iii) transfers of direct or indirect membership interests in Tenant by a transferor to (A) Immediate Family of such transferor, or (B) a trust of which such transferor is the grantor and such transferor, or his or her spouse, is the trustee for the benefit of such spouse or Immediate Family of such spouse, or (C) an Entity or Entities in which such transferor or his or her Immediate Family member shall retain Control; (iv) transfers of up to forty nine percent (49%) in the aggregate, of the direct membership interests in Tenant to any Person; and/or (v) enter into a sublease with Batesville Healthcare Center, LLC, an Arkansas limited liability company, the existing operator of the Facility, for the period commencing on the Commencement Date and expiring on the Closing Date (as defined in the OTA). Upon any assignment of this Lease in its entirety by Tenant with Landlord’s consent, Tenant shall be released from all future liability and obligations accruing under this Lease from and after the date of the assignment.

16.2 Indirect Transfer Prohibited Without Consent. Schedule 16.2 attached hereto sets forth the current ownership and Control of Tenant. A (a) sale, assignment, pledge, transfer, exchange or other disposition of the stock, partnership interests, membership interests or other equitable interests in Tenant or any Person Controlling Tenant, which results in a change or transfer of Control or a change or transfer of management of Tenant, or (b) merger, consolidation or other combination of Tenant with another entity which results in a change or transfer of management or Control of Tenant, shall be deemed an assignment hereunder and shall be subject to Section 16.1 hereof. For purposes hereof, change or transfer of management or Control or effective Control, shall mean a transfer of fifty percent (50%) or more of the economic benefit of, or Control of, any such entity. Notwithstanding the foregoing, any Affiliate of Tenant may transfer his, her or its stock, partnership interests, membership interests or other equitable interests in Tenant without first obtaining the prior written consent of Landlord if such transfer or other disposition (i) is the result of the death of such Affiliate, (ii) involves a transfer to (A) the Immediate Family of such Affiliate, or (B) a trust of which such Affiliate is the grantor and such Affiliate, or his or her spouse, is the trustee for the benefit of such spouse or Immediate Family of such spouse, or (C) an Entity or Entities in which such Affiliate, spouse or Immediate Family member shall retain Control.

16.3 Adequate Assurances. Without limiting any of the foregoing provisions of this Article, if, pursuant to the U.S. Bankruptcy Code, as the same may be amended from time to time, Tenant is permitted to assign or otherwise transfer its rights and obligations under this Lease in disregard of the restrictions contained in this Article, the assignee shall be deemed to agree to provide adequate assurance to Landlord (a) of the continued use of the Leased Property solely in accordance with the Permitted Use thereof, (b) of the continuous operation of the

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business on the Leased Property in strict accordance with the requirements of Article 4 hereof, and (c) of such other matters as Landlord may reasonably require at the time of such assumption or assignment. Without limiting the generality of the foregoing, adequate assurance shall include, without limitation, the requirement that any such assignee shall (i) have a net worth (exclusive of good will) of not less than the aggregate of the Rent due and payable for the previous Fiscal Year and (ii) continue the Security Deposit. Such assignee shall expressly assume this Lease by an agreement in recordable form, an original counterpart of which shall be delivered to Landlord prior to an assignment of this Lease. Any approval of such successor Tenant shall not affect or alter Landlord’s approval rights of each manager of the Leased Property or successor Tenants.

16.4 Landlord Transfers. Landlord may, in its sole and absolute discretion, sell, assign, convey or otherwise transfer its interest in this Lease or the Leased Property, or any portion thereof, or any interest therein, directly or indirectly, to any Person, without the consent of Tenant. Tenant shall attorn to any such transferee and continue to be bound by this Lease in the event of any such transfer, provided, however, that Tenant shall continue to pay Rent and other Additional Charges to Landlord and performance all other obligations under this Lease in favor of Landlord until Tenant receives written notice of any such assignment of this Lease by Landlord and a copy of such transferee’s assumption of all obligations of Landlord under the terms of this Lease.

ARTICLE 17

ESTOPPEL CERTIFICATES, FINANCIAL STATEMENTS AND OPERATING STATEMENTS

17.1 Estoppel Certificates. Tenant and Landlord shall from time to time, within fifteen (15) days after receipt of a written request therefor and without charge, give an Estoppel Certificate in the form (or substantially the form) of Exhibit C attached hereto and containing such other matters as may be reasonably requested to any Person specified by such requesting party.

17.2 Monthly Financial Statements. Throughout the Term of this Lease, Tenant shall prepare and deliver to Landlord within twenty (20) calendar days after the end of each Accounting Period: (i) an income (or profit and loss) statement and operating balance sheet showing the results of the operation of the Leased Property, prepared in accordance with GAAP (without footnotes), and a comparison against the Annual Budget for the for the immediately preceding Accounting Period, Fiscal Quarter and Fiscal Year to date; (ii) a census report showing patient days by payor type for the immediately preceding Accounting Period; (iii) a statement of total facility revenues by payor type for the immediately preceding Accounting Period, Fiscal Quarter and for the Fiscal Year to date (if not included in the income or profit and loss statement); (iv) an accounts receivable aging report by payor type for the preceding Accounting Period; (v) copies of any correspondence with fiscal intermediaries which would be material to the operation of the Leased Property, including any property cost reports filed; and (vi) a reconciliation of the Reserve for the immediately preceding Accounting Period. This information shall be provided to Landlord under a complete financial statement for the Business which shall be delivered electronically within the designated time periods in the form customarily provided in the industry and approved in advance by Landlord. The aforesaid

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financial statements shall be accompanied by an Officer’s Certificate which, for purposes hereof shall mean a Certificate of the Chief Executive Officer or the Chief Financial Officer of Tenant (or of Tenant’s general partner or manager) (an “Officer’s Certificate”) in which such Officer shall certify to the best of such Officer’s knowledge (a) that such statements have been properly prepared in accordance with GAAP and are true, correct and complete in all material respects and fairly present the consolidated financial condition of Tenant at and as of the dates thereof and the results of its operations for the period covered thereby, and (b) that no Event of Default has occurred and is continuing hereunder.

17.3 Annual Financial Statements. Tenant shall deliver to Landlord within eighty (80) days after the end of each Fiscal Year, a profit and loss statement, balance sheet and statement of cash flow showing results from the operation of the Leased Property during such Fiscal Year, including without limitation, an accounting of the calculation of amounts paid into the Reserve and reasons for material variations from the approved budget for such year. The aforesaid financial statements shall be accompanied by an a certificate by an officer or manager of Tenant (which certificate shall be certified by an officer of Tenant or Tenant’s general partner, managing member or manager, as applicable) in which such Officer shall certify to the best of such officer’s knowledge (a) that such statements have been properly prepared in accordance with GAAP and are true, correct and complete in all material respects and fairly present the consolidated financial condition of the Facility at and as of the dates thereof and the results of its operations for the period covered thereby, and (b) that no Event of Default has occurred and is continuing hereunder. Tenant shall also deliver to Landlord at any time and from time to time, upon not less than twenty (20) days’ notice from Landlord, any financial statements or other financial reporting information required to be filed by Landlord with the SEC or any other governmental authority or required pursuant to any order issued by any Governmental Agencies or arbitrator in any litigation to which Landlord is a party for purposes of compliance therewith. Notwithstanding the foregoing, in the event that Tenant’s financial records are not otherwise being reviewed or audited by an independent certified public accountant then Landlord will accept financial statements certified true and correct by the Chief Financial Officer of Tenant (or of Tenant’s general partner or manager). In connection with Landlord’s responsibility to maintain effective internal controls over financial reporting and the requirements for complying with the Sarbanes-Oxley Act of 2002, Tenant hereby agrees to provide reasonable access to the Leased Property, including the Leased Property’s books and records, and reasonable assistance necessary to Landlord that will allow Landlord to conduct activities necessary to satisfy such responsibilities, including, but not limited to, the activities stipulated by the Public Company Accounting Oversight Board in its release 2004-1, or other similarly promulgated guidance by other regulatory agencies. Landlord agrees to provide Tenant with appropriate notice regarding the conduct of activities anticipated in this provision. Tenant agrees to provide, at Landlord’s request, evidence of Tenant’s documented policies, if any, regarding “whistle-blower” procedures and regarding the reporting of fraud or misstatements involving financial reporting.

17.4 Records. Tenant shall keep and maintain at all times in accordance with GAAP (separate and apart from its other books, records and accounts) complete and accurate up to date books and records adequate to reflect clearly and correctly the results of operations of the Leased Property. Such books and records shall be kept and maintained at the Leased Property or Tenant’s principal office at 1422A Clarkview Road, Baltimore, Maryland 21209. Landlord or its representatives shall have, at all reasonable times during normal business hours, reasonable access, on reasonable advance Notice, to examine and copy the books and records pertaining to the Leased Property.

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17.5 General Operations Budget. In addition to the Reserve Budget, Tenant shall use reasonable commercial efforts to furnish to Landlord, on or before November 1st of each Fiscal Year (and in no event later than November 15^th of each year), a proposed annual budget, a marketing/business plan in a form satisfactory to Landlord and consistent with the then standards for nursing facilities comparable to the Facility setting forth the strategic plans of the Business, a disaster management plan, and an updated organizational structure/chart, together with specific departmental support plans and projected income and costs and expenses projected to be incurred by Tenant in managing, leasing, maintaining and operating the Business during the following Fiscal Year. Prior to finalizing the general operations budget, Tenant shall consider in good faith any comments or suggestions on such general operations budget provided to Tenant by Landlord after its review of the same.

17.6 Quarterly Meetings. At Landlord’s request, Tenant shall make Tenant’s property management team and the executive officers of Tenant (or of Tenant’s general partner or managing member or manager, if applicable) available to meet with Landlord once during each Fiscal Quarter to discuss the Reserve Budget, the annual budgets and any other items related to the operation of the Business, which Landlord wishes to discuss. Such meetings shall be conducted via teleconference or at a location mutually agreeable to Landlord and Tenant and each of Landlord and Tenant shall be solely responsible for their respective expenses in connection with such meetings. Tenant agrees to give good faith consideration to any suggestions or requests that Landlord may have.

17.7 Tenant Financial Statements. For so long as Landlord is an Affiliate of CNL Healthcare Properties, Inc., or its successors, Landlord shall have the right, at Landlord’s sole discretion, to require Tenant to prepare and deliver to Landlord, at Landlord sole cost and expense, within sixty (60) days after the end of each Fiscal Year during which a Materiality Threshold Period (as hereinafter defined) occurs, a balance sheet, income statement, statement of owner’s equity, cash flows and footnotes with respect to Tenant audited and certified by an independent certified public accountant (registered with the Public Company Accounting Oversight Board) who is actively engaged in the practice of his profession and who is acceptable to Landlord. The foregoing financial statements and reports shall be certified to Landlord by such independent certified public accountant that such statements have been properly prepared in accordance with GAAP and are true, correct, and complete in all material respects and fairly present the consolidated financial condition of Tenant at and as of the dates thereof and the results of all of its operations for the period covered thereby. For the purposes hereof, the term “Materiality Threshold Period” shall mean any period of time during the Term during which Tenant, either itself or together with its Affiliates, leases, operates or manages properties owned by Landlord or its Affiliates that, in the aggregate, comprise more than twenty percent (20%) of the total assets of CNL Healthcare Properties, Inc., or its successors, as reasonably determined by Landlord.

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17.8 Monthly Statements of Operations. Throughout the Term of this Lease, Tenant shall prepare and deliver to Landlord: within twenty (20) calendar days after the end of each Accounting Period, a report of Facility operations, to include, at a minimum: (a) census for the preceding month showing available units and resident days as well as actual units and resident days for the preceding month; (b) copies of any communications from regulatory agencies having authority over the Facility; and (c) notice of how much of the Facility is devoted to Medicaid or Medicare, if any.

17.9 Audit Rights. Landlord shall have the right, at its sole cost and expense, to perform an audit on any of the foregoing reports provided by Tenant, and Tenant agrees to reasonably cooperate with any such audit.

ARTICLE 18

LANDLORD’S RIGHT TO INSPECT

Landlord, Mortgagee and their agents shall have the right, upon providing at least 24 hours advance notice to Tenant, to enter upon the Leased Property or any portion thereof at any reasonable time during normal business hours to inspect the same, including but not limited to, the operation, sanitation, safety, maintenance and use of the same, or any portions of the same and to assure itself that Tenant is in full compliance with its obligations under this Lease (but Landlord and Mortgagee shall not thereby assume any responsibility for the performance of any of Tenant’s obligations hereunder, nor any liability arising from the improper performance thereof). In making any such inspections, neither Landlord nor Mortgagee shall unduly interrupt or interfere with the conduct of Tenant’s Business or any residents of the Facility.

ARTICLE 19

FACILITY MORTGAGES

19.1 Subordination. Subject to the Tenant-protection requirements set forth hereinafter, this Lease, Tenant’s interest hereunder and Tenant’s leasehold interest in and to the Leased Property are hereby agreed by Tenant to be and are hereby made junior, inferior, subordinate and subject in right, title, interest, lien, encumbrance, priority and all other respects to any mortgage or mortgages and security interests now or hereafter in force and effect upon or encumbering Landlord’s interest in the Leased Property, or any portion thereof, and to all collateral assignments by Landlord to any third party or parties of any of Landlord’s rights under this Lease or the rents, issues and profits thereof or therefrom as security for any liability or indebtedness, direct, indirect or contingent, of Landlord to such third party or parties, and to all future modifications, extensions, renewals, consolidations and replacements of, and all amendments and supplements to any such mortgage, mortgages or assignments, and upon recording of any such mortgage, mortgages or assignments, the same shall be deemed to be prior in dignity, lien and encumbrance to this Lease, Tenant’s interest hereunder and Tenant’s leasehold interest in and to the Leased Property irrespective of the dates of execution, delivery or recordation of any such mortgage, mortgages or assignments (such mortgages, mortgages, security interests, assignments, modifications, extensions, renewals, amendments, supplements and replacement being a “Facility Mortgage”); provided that the Landlord shall use commercially reasonable efforts to cause the Mortgagee to enter into a non-disturbance agreement pursuant to the terms and provisions of this Section 19.1. Tenant shall reasonably

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cooperate with Landlord and any Mortgagee or potential Mortgagee in connection with a Facility Mortgage, including, but not limited to, consenting to non-material and reasonable amendments to this Lease as may be requested by such Mortgagee, provided that such amendments do not increase Tenant’s economic obligations under this Lease or the use and operation of any of the Leased Property or materially increase Tenant’s obligations or decrease its rights hereunder. Any and all costs, fees and expenses incurred by Landlord in connection with any Facility Mortgage shall not be included as part of Landlord’s Additional Investment. The foregoing subordination provisions of this Section shall only be automatic and self-operative without the necessity of the execution of any further instrument or agreement of subordination on the part of Tenant, so long as the Facility Mortgage recognizes the existence of this Lease and acknowledges and evidences Mortgagee’s agreement (to Tenant’s reasonable satisfaction) that, so long as no Event of Default by Tenant has occurred and is continuing under this Lease (after the expiration of the applicable notice and curative periods contained herein), (i) Mortgagee, its successors and assigns (or any other purchaser at any foreclosure sale pursuant to the Facility Mortgage or any other security instrument in connection therewith) shall not disturb Tenant’s right of possession to the Leased Property and all other rights of Tenant hereunder (including, but not limited to, the right to make use of the Reserve) in the event that Mortgagee, its successors and assigns (or any other purchaser at any foreclosure sale pursuant to the Facility Mortgage or any other security instrument in connection therewith) acquires title to all or any part of the Leased Property pursuant to the exercise of any remedy provided for in the Facility Mortgage or any other related security instrument or acceptance of title to the Leased Property in lieu of any such foreclosure, (ii) Tenant shall not be named as a party defendant to any action to foreclose the liens and security interests of the Facility Mortgage or any other related security instrument, except to the extent required by Applicable Law, and (iii) Tenant is expressly made a third party beneficiary of such provision. Tenant acknowledges and agrees that notwithstanding the foregoing automatic subordination, if Landlord or Mortgagee shall request that Tenant execute and deliver any further instrument or agreement of subordination of this Lease or Tenant’s interest hereunder or Tenant’s leasehold interest in the Leased Property to any such Facility Mortgage, in confirmation or furtherance of or in addition to the foregoing subordination provisions of this Section, Tenant shall promptly execute and deliver the same to the requesting party so long as the same is reasonably acceptable to Tenant, contains the non-disturbance provisions described in the preceding sentence, is consistent with the terms and provisions of this Lease and does not materially increase Tenant’s obligations or decrease its rights hereunder. Tenant agrees that it will, from time to time, execute such documentation as may be reasonably requested by Landlord and any Mortgagee (a) to assist Landlord and such Mortgagee in establishing or perfecting any security interest in Landlord’s interest in the Reserve and any funds therein; and (b) to facilitate or allow Landlord to encumber the Leased Property or any portion thereof as herein contemplated. If, within thirty (30) calendar days following Tenant’s receipt of a written request by Landlord, Tenant shall fail or refuse or shall have not executed any such further instrument or agreement of subordination, which satisfies the criteria set forth in this Section 19.1, Tenant shall be in breach and default of its obligation to do so and of this Lease and Landlord shall be entitled thereupon to exercise any and all remedies available to Landlord pursuant to this Lease or otherwise provided by law. To the extent Tenant is required to incur any additional out of pocket costs, fees and expenses in connection with the review and negotiation of any agreements or confirmations required from Tenant under the terms of this Section 19.1, Landlord shall promptly reimburse Tenant for all such reasonable costs, fees and

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expenses. Notwithstanding anything to the contrary in the foregoing, on or before the Commencement Date, Landlord, Tenant and the Mortgagee financing Landlord’s acquisition of the Leased Property shall enter into a non-disturbance agreement in the form and content set forth in Schedule 19.1 attached hereto.

19.2 Attornment. So long as the Facility Mortgagee agrees to the non-disturbance provisions described in Section 19.1, Tenant shall and hereby agrees to attorn, and be bound under all of the terms, provisions, covenants and conditions of this Lease, to any successor of the interest of Landlord under this Lease for the balance of the Term of this Lease remaining at the time of the succession of such interest to such successor. In particular, in the event that any proceedings are brought for the foreclosure of any Facility Mortgage, Tenant shall attorn to the purchaser at any such foreclosure sale and recognize such purchaser as Landlord under this Lease. Tenant agrees that neither the purchaser at any such foreclosure sale nor the foreclosing Mortgagee or holder of any such Facility Mortgage shall have any liability for any act or omission of Landlord, be subject to any offsets or defenses which Tenant may have as claims against Landlord, or be bound by any advance rents which may have been paid by Tenant to Landlord for more than the current period in which such rents come due.

19.3 Rights of Mortgagees and Assignees. Any Mortgagee shall have the right to unilateral enjoyment, exercise or control over the rights, remedies, powers and interests of Landlord hereunder, or otherwise arising under Applicable Law, as assigned or granted to such Mortgagee by Landlord or as provided in any Facility Mortgage. At the time of giving any notice of default to Landlord, Tenant shall mail or deliver to any Mortgagee of whom Tenant has notice, a copy of any such notice. No notice of default or termination of this Lease by Tenant shall be effective until each Mortgagee shall have been furnished a copy of such notice by Tenant. In the event Landlord fails to cure any default by it under this Lease, the Mortgagee shall have, at its option, a period of thirty (30) days after expiration of any cure period of Landlord within which to remedy such default of Landlord or to cause such default to be remedied. In the event that the Mortgagee elects to cure any such default by Landlord, then Tenant shall accept such performance on the part of such Mortgagee as though the same had been performed by Landlord, and for such purpose Tenant hereby authorizes any Mortgagee to enter upon the Leased Property, subject to the terms of Article 18, to the extent necessary to exercise any of Landlord’s rights, powers and duties under this Lease. If, in the event of any default by Landlord which is reasonably capable of being cured by a Mortgagee, the Mortgagee promptly commences and diligently pursues to cure the default, then Tenant will not terminate this Lease or cease to perform any of its obligations under this Lease so long as the Mortgagee is, with due diligence, engaged in the curing of such default.

19.4 HUD Financing. The parties recognize that HUD is the primary source for lender financing of properties like the Facility. Accordingly, in the event HUD financing is sought for the Facility, the parties agree to cooperate and work together using commercially reasonable efforts, to equitably modify this Agreement and enter into any supplemental agreements as required to obtain HUD financing and otherwise comply with any requirements of HUD in connection with any such HUD financing, at no cost and expense to Tenant; provided that, such modifications and supplemental agreements do not increase Tenant’s economic obligations under this Lease and/or materially increase Tenant’s other obligations and liabilities or materially decrease Tenant’s rights under this Lease.

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ARTICLE 20

ADDITIONAL COVENANTS OF TENANT

20.1 Conduct of Business. Tenant shall not engage in any business on the Leased Property other than for the Permitted Use, and any activities incidental thereto, and shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect and in good standing its corporate, limited partnership, limited liability company or other entity status and existence and its rights and Permits reasonably necessary to conduct the Business.

20.2 Additional Covenants of Tenant. In addition to the other covenants and representations of Tenant herein and in this Lease, Tenant hereby covenants, acknowledges and agrees that Tenant shall:

(a) Not guaranty any obligation of any Person.

(b) Pay or cause to be paid all lawful claims for labor and rents with respect to the Leased Property.

(c) Pay or cause to be paid all trade payables with respect to the Leased Property.

(d) Not declare, order, pay or make, directly or indirectly, any Distribution or any payments to any partners or Affiliates as to Tenant (including payments in the ordinary course of business and payments pursuant to any management agreements with any such Affiliate, but expressly excluding payments to any partners or Affiliates of Tenant for reimbursement of operating expenses incurred by such partners or Affiliates in connection with the operation and management of the Leased Property pursuant to any management agreement with such partners or Affiliates), or set apart any sum of property therefor, or agree to do so, if, at the time of such proposed action or immediately after giving effect thereto, any Event of Default shall exist.

(e) Except as otherwise permitted by this Lease, not sell, lease (as lessor or sublessor), transfer or otherwise dispose of or abandon, all or any material portion of its assets or business to any Person, or sell, lease, transfer or otherwise dispose of or abandon any of the P&E or Tenant’s Personal Property; provided, however, Tenant may dispose of portions of the P&E or Tenant’s Personal Property which have become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, provided substitute equipment or fixtures having equal or greater value and utility have been provided.

(f) Provide and maintain throughout the Term, all Tenant’s Personal Property and P&E Replacements as shall be necessary in order to operate the Leased Property in compliance with applicable Legal Requirements, Insurance Requirements and otherwise

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in accordance with customary practice in the industry for the Permitted Use. If, from and after the Effective Date, Tenant acquires an interest in any items of tangible personal property (other than motor vehicles) on, or in connection with the Leased Property which belong to anyone other than Tenant, Tenant shall require the agreement permitting such use to provide that Landlord or its designee may assume Tenant’s rights and obligations under such agreement upon the termination of this Lease and any assumption of management or operation of the Leased Property by Landlord or its designee.

(g) Not, except as approved in writing by Landlord, either directly or indirectly, for itself, or through, or on behalf of, or in connection with any Person, divert or attempt to divert any business or customer of the Leased Property to any competitor (other than to an Affiliated Tenant for an Affiliated Leased Property), by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the good will associated with Landlord or the Leased Property.

(h) Except for liabilities incurred in the ordinary course of business and any permitted AR Financing and other financings permitted under Section 7.1 of this Lease (collectively, the “Permitted Indebtedness”), not create, incur, assume or guarantee, or permit to exist or become or remain liable directly or indirectly upon, any Indebtedness except the Indebtedness of Tenant to Landlord (or, if unsecured and expressly subject to the terms of this Lease and Landlord’s interest hereunder, and payable solely out of excess cash flow after payment of all Rent hereunder, to Tenant’s shareholders, partners or members, as applicable). Tenant further agrees that the obligee in respect of any such Indebtedness (other than Permitted Indebtedness) shall agree in writing, in form and substance satisfactory to Landlord, that (w) the payment of such Indebtedness shall be expressly subordinate in all respects to all of Tenant’s obligations under this Lease, (x) no remedies may be exercised by the obligee with respect to enforcement or collection of such Indebtedness until such time as this Lease shall be terminated and all of Tenant’s obligations hereunder shall have been discharged in full; (y) such Indebtedness shall not be assigned by the obligee to any other party; and (z) the obligee shall not initiate or join in any bankruptcy proceedings against Tenant. As used in this Section 20.2(h) (and notwithstanding any other definition of Indebtedness herein), Indebtedness shall mean all obligations, contingent or otherwise, to pay or repay monies irrespective of whether, in accordance with GAAP, such obligations should be reflected on the obligor’s balance sheet as debt.

20.3 Notice to Landlord of Severe Incident and/or Significant Property Damage. In the event of a Severe Incident (defined in Section 20.3.1 below) or Significant Property Damage (defined in Section 20.3.2 below) (in each case, an “Incident”), Tenant shall notify Landlord within twenty-four (24) hours of learning of the occurrence of any such Incident via email at notice@cnl.com. Such email notification shall include, at a minimum, (i) the names and contact information of the parties involved in the Incident, to the extent known at that time, (ii) a brief description of the Incident, and (iii) all measures that Tenant (or any other Person(s), to the knowledge of Tenant) is currently undertaking, or plans to undertake to the extent known, to resolve the Incident and to prevent, in connection with a Severe Incident and/or Significant Property Damage, any further harm to person or damage to property as result of such Incident.

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20.3.1 Severe Incident. The defined term “Severe Incident” shall mean any material or significant accident, incident, claim, cause of action, loss of or damage to the Leased Property, Tenant’s Personal Property or any other property of third parties, or injury to or death of a person occurring on or about the Leased Property or adjoining sidewalks or rights of way under Tenant’s control during the Term, including, but not limited to, the following: (i) a fatality, (ii) claim of abuse, assault or molestation, (iii) personal injury resulting in the amputation of a limb, brain injury, burns over fifty percent (50%) or more of a person’s body, hearing or sight loss, internal injury resulting in impaired organ function, spinal cord injury resulting in any degree of paralysis, or substantial disfigurement, or (iv) a mass casualty event, such as a ride or other attraction incident, wildfire or building fire, earthquake, and pier collapse.

20.3.2 Significant Property Damage. The defined term “Significant Property Damage” shall mean any incident resulting in significant damage to the Leased Property including, but not limited to the following: fires, floods, avalanches, earthquakes, catastrophic structure failure, roof collapse, or any Force Majeure Event caused by either man or nature.

20.4 Leasehold Financing Prohibited. Tenant shall be prohibited from encumbering any or all of the Leased Property (other than in connection with any Permitted Indebtedness), or any or all of its interests under this Lease, with leasehold financing without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole and absolute discretion.

20.5 Resale Certificate. Tenant acknowledges that Landlord may provide, but has no obligation to do so, Tenant with a resale certificate issued by the State of Arkansas Department of Finance and administration Sales and Use Tax Section (the “Resale Certificate”). Tenant shall not use the Resale Certificate for any purpose other than for the purchase of Leased Property, and any use of the Resale Certificate by Tenant shall comply with all Legal Requirements, Applicable Laws, and any instructions provided to Tenant by Landlord from time to time. Tenant shall be responsible for, and shall indemnify, save, insure, pay, defend, and hold harmless Landlord from and against, all liabilities, obligations, claims, damages, penalties, fines, causes of action, costs, and expenses (including, without limitation, reasonable attorneys’ fees), to the maximum extent permitted by law, which are imposed upon, incurred by, or asserted against Landlord by reason of Tenant’s use of the Resale Certificate in violation of this Section 20.5.

ARTICLE 21

MISCELLANEOUS

21.1 Limitation on Payment of Rent. All agreements between Landlord and Tenant herein are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of Rent or otherwise, shall the Rent or any other amounts payable to Landlord under this Lease exceed the maximum permissible under Applicable Laws, the benefit of which may be asserted by Tenant as a defense, and if, from any circumstance whatsoever, fulfillment of any provision of this Lease, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, or if from any circumstances Landlord should ever receive as fulfillment of such provision such an excessive amount, then, ipso facto, the amount which would be excessive shall be applied to the reduction of the installment(s) of Minimum Rent next due and not to the payment of such excessive amount. This provision shall control every other provision of this Lease and any other agreements between Landlord and Tenant.

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21.2 No Waiver. No release, discharge or waiver of any provision hereof shall be enforceable against or binding upon Landlord or Tenant unless in writing and executed by Landlord or Tenant, as the case may be. Neither the failure of Landlord or Tenant to insist upon a strict performance of any of the terms, provisions, covenants, agreements and conditions hereof, nor the acceptance of any Rent by Landlord with knowledge of a breach of this Lease by Tenant in the performance of its obligations hereunder, or the following of any practice or custom at variance with the terms hereof, shall be deemed or constitute a waiver of any rights or remedies that Landlord or Tenant may have or a waiver of any subsequent breach or default in any of such terms, provisions, covenants, agreements and conditions or the waiver of the right to demand exact compliance with the terms hereof.

21.3 Remedies Cumulative. To the maximum extent permitted by law, each legal, equitable or contractual right, power and remedy of Landlord, now or hereafter provided either in this Lease or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other right, power and remedy and the exercise or beginning of the exercise by Landlord of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise by Landlord of any or all of such other rights, powers and remedies.

21.4 Severability. Any clause, sentence, paragraph, section or provision of this Lease held by a court of competent jurisdiction to be invalid, illegal or ineffective shall not impair, invalidate or nullify the remainder of this Lease, but rather the effect thereof shall be confined to the clause, sentence, paragraph, section or provision so held to be invalid, illegal or ineffective, and this Lease shall be construed as if such invalid, illegal or ineffective provisions had never been contained therein.

21.5 Acceptance of Surrender. No surrender to Landlord of this Lease or of the Leased Property or any part thereof, or of any interest therein, shall be valid or effective unless agreed to and accepted in writing by Landlord and no act by Landlord or any representative or agent of Landlord, other than such a written acceptance by Landlord, shall constitute an acceptance of any such surrender.

21.6 No Merger of Title. It is expressly acknowledged and agreed that it is the intent of the parties that there shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same Person may acquire, own or hold, directly or indirectly, this Lease or the leasehold estate created hereby and the fee estate or ground landlord’s interest in the Leased Property.

21.7 Tenant’s Representations. In addition to any other representation or warranty set forth herein and as an inducement to Landlord to enter into this Lease, Tenant hereby represents and warrants to Landlord as follows:

(a) Tenant is a limited liability company which is duly organized and validly existing and in good standing under the laws of the state of its formation. Tenant has all requisite power and authority under the laws of the state of its formation and its articles

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of organization and operating agreement or other charter documents to enter into and perform its obligations under this Lease and to consummate the transactions contemplated hereby. Tenant is duly registered or authorized, as applicable, to transact business in any jurisdiction in which the nature of the business conducted by it requires such qualification.

(b) Tenant has taken all necessary action to authorize the execution, delivery and performance of this Lease, and upon the execution and delivery of any document to be delivered by Tenant, prior to the date hereof, such document shall constitute the valid and binding obligation and agreement of Tenant, enforceable against Tenant in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors and except to the extent that the availability of equitable relief may be subject to the discretion of the court before which any proceeding may be brought.

(c) There are no judgments presently outstanding and unsatisfied against Tenant or any of its properties, and neither Tenant nor any of its properties are involved in any material litigation at law or in equity or any proceeding before any court, or by or before any governmental or administrative agency, which litigation or proceeding could materially adversely affect Tenant, and no such material litigation or proceeding is, to the knowledge of Tenant, threatened against Tenant and no investigation looking toward such a proceeding has begun or is contemplated.

(d) To the knowledge of Tenant, neither this Lease nor any other document, certificate or statement furnished to Landlord by or on behalf of Tenant in connection with the transaction contemplated herein contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. There is no fact or condition which materially and adversely affects the business, operations, affairs, properties or condition of Tenant which has not been set forth in this Lease or in other documents, certificates or statements furnished to Landlord in connection with the transaction contemplated hereby.

(e) All employees of Tenant or any Affiliate, if any, are solely employees of Tenant or such Affiliate and not Landlord. Neither Tenant nor any Affiliate of Tenant is Landlord’s agent for any purpose in regard to Tenant’s or any Affiliate of Tenant’s employees or otherwise. Further, Tenant expressly acknowledges and agrees that Landlord does not exercise any direction or control over the employment policies or employment decisions of Tenant or any Affiliate of Tenant. Tenant agrees to indemnify and hold Landlord and its Affiliates harmless from any against any and all claims of its employees or employees of the Facility against Landlord.

(f) Tenant has not (i) made any contributions, payments or gifts to or for the private use of any governmental official, employee or agent where either the payment or the purpose of such contribution, payment or gift is illegal under the laws of the United States or the jurisdiction in which made, (ii) established or maintained any unrecorded fund or asset for any purpose or made any false or artificial entries on its books or (iii)

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made any payments to any person with the intention or understanding that any part of such payment was to be used for any purpose other than that described in the documents supporting the payment. Tenant shall not take any such actions during the Term of this Lease.

21.8 Quiet Enjoyment. Landlord covenants and agrees that so long as Tenant shall timely pay all rents due to Landlord from Tenant hereunder and keep, observe and perform all covenants, promises and agreements on Tenant’s part to be kept, observed and performed hereunder, Tenant shall and may peacefully and quietly have, hold and occupy the Leased Property free of any interference from Landlord or any Person claiming by, through or under Landlord of any of its Affiliates; subject, however, and nevertheless to the terms, provisions and conditions of this Lease, the Permitted Encumbrances and documents affecting title to the Leased Property approved by Tenant.

21.9 Recordation of Memorandum of Lease. On the Commencement Date, the Parties shall execute a short form memorandum of this Lease, in the form of Exhibit D attached hereto and made a part hereof (the “Memorandum”). The executed original copy of the Memorandum shall be delivered to Tenant on the Commencement Date and Tenant shall cause the same to be recorded or filed among the Official Records, or the Memorandum shall be delivered to the escrow agent closing Landlord’s acquisition of the Property and said escrow agent shall be instructed to record or file the Memorandum among the Official Records. Tenant shall pay the transfer and all recording costs associated therewith. In the event of a discrepancy between the provisions of this Lease and such short form memorandum thereof, the provisions of this Lease shall prevail.

21.10 Notices. Any and all notices, demands, consents, approvals, offers, elections and other communications required or permitted under this Lease (each, a “Notice”) shall be deemed adequately given if in writing and the same shall be delivered either in hand, by telecopier with written acknowledgment of receipt, or by mail or Federal Express or another nationally-recognized overnight carrier, addressed to the recipient of the notice, with all freight charges prepaid (if by Federal Express or similar carrier).

(a) Any notice, demand or request which shall be served upon any of the parties in the manner aforesaid shall be deemed sufficiently given (i) upon being hand delivered in person, (ii) transmitted by facsimile transmission provided a copy is sent as provided in the following clause (iii) or the following Business Day, (iii) upon being deposited with Federal Express or another nationally-recognized overnight carrier; provided, however, the time period in which any response to such notice, demand or request must be given shall commence on the date of actual delivery of the notice, demand or request to the address to which it is sent (rather than delivery to the specific addressee). Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given as provided below shall be deemed delivery of the notice, demand or request sent. The addresses given above may be changed by any party by ten (10) days prior notice to all other parties given in the manner provided herein.

(b) All such notices shall be addressed,

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if to Landlord to:	CHP Batesville Healthcare Owner, LLC c/o CNL Healthcare Properties, Inc. 450 S. Orange Avenue Orlando, Florida 32801 Attention: Holly J. Greer, Esq., Senior Vice President and General Counsel Fax: (407) 540-2544 Phone: (407) 540-7500 Emails: holly.greer@cnl.com
with a copy to:	Lowndes, Drosdick, Doster, Kantor and Reed, P.A. 215 North Eola Drive Orlando, Florida 32801 Attention: William T. Dymond, Jr., Esq. Fax: (407) 843-4600 Phone: (407) 843-4444 Email: william.dymond@lowndes-law.com
if to Tenant to:	Batesville Health and Rehab, LLC c/o Arkansas SNF Operations Acquisition III, LLC 1422 Clarkview Road Baltimore, Maryland 21209 Attention: Brian Reynolds Fax: (443)761-6432_ Phone: (410) 342-3155 Email: breynolds@capfundinc.com
With a copy to:	Fenigstein & Kaufman 1900 Avenue of the Stars, Suite 2300 Los Angeles, California 90067 Attention: S. Jack Fenigstein Fax: (310) 556-1346 Phone: (310) 201-0777 Email: jack_fenigstein@fenkauf.com

(c) By notice given as herein provided, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Lease to change their respective addresses effective upon receipt by the other parties of such notice and each shall have the right to specify as its address any other address within the United States of America.

21.11 Construction; Nonrecourse. Anything contained in this Lease to the contrary notwithstanding, all claims against, and liabilities of, Tenant or Landlord arising prior to any date of termination or expiration of this Lease with respect to the Leased Property shall survive such termination or expiration. Each term or provision of this Lease to be performed by Tenant shall be construed as an independent covenant and condition. Time is of the essence with respect to

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the performance of all obligations under this Lease, including, without limitation, obligations for the payment of money. Except as otherwise set forth in this Lease, any obligations arising prior to the expiration or sooner termination of this Lease of Tenant (including without limitation, any monetary, repair and indemnification obligations) and Landlord shall survive the expiration or sooner termination of this Lease. In addition, nothing contained in this Lease shall be construed to create or impose any liabilities or obligations and no such liabilities or obligations shall be imposed on any of the shareholders, beneficial owners, direct or indirect, officers, directors, trustees, employees or agents of Landlord or Tenant for the payment or performance of the obligations or liabilities of Landlord or Tenant hereunder. The parties have participated jointly in the negotiation and drafting of this Lease. In the event an ambiguity or question of intent or interpretation arises, this Lease shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Lease.

21.12 Counterparts; Headings. This Lease may be executed in two or more counterparts, each of which shall constitute an original, but which, when taken together, shall constitute but one instrument and shall become effective as of the date hereof when copies hereof, which, when taken together, bear the signatures of each of the parties hereto shall have been signed. Captions and headings in this Lease are for purposes of reference only and shall in no way define, limit or describe the scope or intent of, or otherwise affect, the provisions of this Lease.

21.13 Applicable Law. This Lease shall be governed by, and construed in accordance with, the laws of the State in which the Leased Property is located.

21.14 Right to Make Agreement. Each party warrants, with respect to itself, that neither the execution and delivery of this Lease, nor the compliance with the terms and provisions hereof, shall violate any provision of any law, or any judgment, writ, injunction, order or decree of any court or Governmental Authority; nor result in or constitute a breach or default under or the creation of any lien, charge or encumbrance upon any of its property or assets under, any indenture, mortgage, deed of trust, contract, other commitment or restriction to which it is a party or by which it is bound; nor require any consent, vote or approval which has not been given or taken, or at the time of the transaction involved shall not have been given or taken. Each party covenants that it has and will continue to have throughout the term of this Lease and any extensions thereof, the full right to enter into this Lease and perform its obligations hereunder.

21.15 Brokerage. Landlord and Tenant hereby represent and warrant to each other that they have not engaged, employed or utilized the services of any business or real estate brokers, salesmen, agents or finders in the initiation, negotiation or consummation of the business and real estate transaction reflected in this Lease. On the basis of such representation and warranty, each party shall and hereby agrees to indemnify, pay and save and hold the other party harmless from and against the payment of any commissions or fees to or claims for commissions or fees by any real estate or business broker, salesman, agent or finder resulting from or arising out of any actions taken or agreements made by them with respect to the business and real estate transaction reflected in this Lease.

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21.16 No Partnership or Joint Venture. Landlord shall not, by virtue of this Lease, in any way or for any purpose, be deemed to be a partner of Tenant in the conduct of Tenant’s business upon, within or from the Leased Property or otherwise, or a joint venture partner or a member of a joint enterprise with Tenant.

21.17 Entire Agreement. This Lease contains the entire agreement between the parties and, except as otherwise provided herein, can only be changed, modified, amended or terminated by an instrument in writing executed by the parties. It is mutually acknowledged and agreed by Landlord and Tenant that there are no verbal agreements, representations, warranties or other understandings affecting the same; and that Tenant hereby waives, as a material part of the consideration hereof, all claims against Landlord for rescission, damages or any other form of relief by reason of any alleged covenant, warranty, representation, agreement or understanding not contained in this Lease.

21.18 Costs and Attorneys’ Fees. In addition to Landlord’s rights under Sections 12.2 and 14.2, if either party shall bring an action to recover any sum due hereunder, or for any breach hereunder, and shall obtain a judgment or decree in its favor, the court may award to such prevailing party its reasonable costs and reasonable attorney’s fees, specifically including reasonable attorney’s fees incurred in connection with any appeals (whether or not taxable as such by law). Landlord shall also be entitled to recover its reasonable attorney’s fees and costs incurred in any bankruptcy action filed by or against Tenant, including, without limitation, those incurred in seeking relief from the automatic stay, in dealing with the assumption or rejection of this Lease, in any adversary proceeding, and in the preparation and filing of any proof of claim.

21.19 Approval of Landlord. Whenever Tenant is required under this Lease to do anything to meet the satisfaction or judgment of Landlord, the reasonable satisfaction or judgment of Landlord shall be deemed sufficient. The foregoing provision of this Section shall not apply in any instance where the provisions of this Lease expressly state that the provisions of this Section do not apply or where the provisions of this Lease expressly state that such consent, approval or satisfaction are subject to the sole and absolute discretion or judgment of Landlord, and in each such instance Landlord’s approval or consent may be unreasonably withheld or unreasonable satisfaction or judgment may be exercised by Landlord.

21.20 Successors and Assigns. The agreements, terms, provisions, covenants and conditions contained in this Lease shall be binding upon and inure to the benefit of Landlord and Tenant and, to the extent permitted herein, their respective successors and assigns.

21.21 Waiver of Jury Trial. TENANT AND LANDLORD HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, THE RIGHT EITHER OF THEM OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION PROCEEDINGS OR COUNTERCLAIM, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, THE RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO TENANT’S ENTERING INTO THIS LEASE AND LANDLORD’S ACCEPTING THIS LEASE.

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21.22 Treatment of Lease. Landlord and Tenant each acknowledge and agree that: (i) this Lease is a “true lease” and not a financing lease, capital lease, mortgage, equitable mortgage, deed of trust, trust agreement, security agreement or other financing or trust arrangement, and the economic realities of this Lease are those of a true lease; (ii) the business relationship created by this Lease and any other related documents is solely that of a long term commercial lease between Landlord and Tenant, the Lease has been entered into by both parties in reliance upon the economic and legal bargains contained herein, and none of the agreements contained herein is intended, nor shall the same be deemed or construed to create a partnership between Landlord and Tenant, to make them joint venturers, to make Tenant an agent, legal representative, partner, or subsidiary of Landlord, nor to make Landlord in any way responsible for the debts, obligations or losses of Tenant; (iii) except as required by Applicable Law, (x) each party will treat this Lease as a true lease for tax purposes and an operating lease under GAAP, and for federal income tax purposes, (y) each party shall report this Lease as a true lease with Landlord as the owner of the Leased Property and Tenant as the tenant of the Leased Property; (iv) each party will not, nor will it permit any Affiliate to, at any time, take any action or fail to take any action with respect to the preparation or filing of any statement or disclosure to any governmental authority, including, without limitation, any income tax return (or amended return), to the extent that such action or such failure to take action would be inconsistent with the intention of the parties expressed in this Section 21.22; (v) the Minimum Rent is the fair market value for the use of the Leased Property and was agreed to by Landlord and Tenant on that basis, and the execution and delivery of, and the performance by Tenant of its obligations under this Lease do not constitute a sale, transfer or conveyance of the Leased Property by Landlord to Tenant; (vi) each of Landlord and Tenant waives any claim or defense based upon the characterization of this Lease as anything other than a true lease, and each party stipulates and agrees that it will not challenge the validity, enforceability or characterization of this Lease as a true lease, nor will it assert or take or omit to take any action inconsistent with the agreements and understandings of this Section 21.22.

21.23 Transfer of Permits and Operating Contracts. Upon the expiration or sooner termination of this Lease, Tenant shall use commercially reasonable efforts to transfer and assign to Landlord or its designee or assist Landlord or its designee in obtaining transfer or assignment of all (a) Permits (to the extent such Permits may be legally transferred) and Operating Contracts, including, without limitation, any trade names and intellectual property (except for trade names, trade secrets, proprietary matters, and other intellectual property and/or proprietary software included within the Tenant Personal Property), and (b) to the extent owned by or held in the name of Tenant, (i) governmental permits, including licenses and authorizations, required for the construction, ownership and operation of the Leased Improvements, including without limitation, certificates of authority, certificates of occupancy, building permits, signage permits, site use approvals, zoning certificates, environmental and land use permits, and any and all necessary approvals from state or local authorities and other approvals granted by any public body or by any private party pursuant to a recorded instrument relating to such Leased Improvements or the Land (to the extent such Permits may be legally transferred); (ii) development rights, telephone exchange numbers identified with the Leased Property, if any; and (iii) certificates, licenses,

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warranties and guarantees and contracts. If requested by Landlord and to the extent permitted by law and any licensor, Tenant shall provide a collateral assignment or similar pledge of such licenses and other intangible rights upon Landlord’s request and as further security for their respective obligations hereunder plus Permits and Operating Contracts, all of which shall be assumed by Landlord or its designee. Unless termination of this Lease is as a result of an Event of Default by Tenant, Landlord shall bear the costs of any fees associated with the transfer of any of the foregoing.

21.24 Confidential Information. Each Party shall treat as strictly confidential any and all information concerning the other Party and its operations including, without limitation, information concerning the business operations, financial models and operating systems of the other Party (collectively, “Confidential Information”), and shall not divulge, disclose, publish or otherwise communicate any such Confidential Information to any person or entity for any reason; provided, however, Tenant shall be permitted to (i) deliver a copy of this Lease to a prospective purchaser with the consent of the Landlord, which consent shall not be unreasonably withheld; provided, however, that, with respect to any request made in connection with disclosure to a prospective acquirer of Tenant’s interest in this Lease (or a Controlling interest in Tenant), it shall not be unreasonable for Landlord to withhold its consent if, in Landlord’s reasonable opinion, such party lacks the character or the quality and relevant experience necessary to satisfy the obligations of Tenant hereunder, and (ii) provided further that Tenant obtain a standard non-disclosure agreement from the party to whom such information is to be disclosed (in form, and substance reasonably satisfactory to Landlord), notwithstanding the foregoing, Tenant may disclose the general economic terms of its operations (including, without limitation, the economic terms contained in this Lease Agreement) to prospective acquirers of substantially all of Tenant’s assets or the interests of and/or in Tenant, lenders and investors. As used herein, the term Confidential Information shall not include information that (i) is generally available to the public other than as a result of an improper disclosure by a Party or its Affiliates or representatives, or was available to the public on a non-confidential basis prior to its disclosure by Landlord or Tenant, as applicable, or (ii) must be disclosed as a matter of law, including such public disclosure obligations as are required by the SEC or in response to a subpoena or other legal process. The provisions of this Section 21.24 shall survive any termination of this Lease.

21.25 Tenant’s Personal Property. Upon the expiration or sooner termination of the Term of this Lease, Landlord may, in its sole and absolute discretion, elect either (i) to give Tenant Notice that Tenant shall be required, within sixty (60) Business Days after such expiration or termination, to remove all of Tenant’s Personal Property from the Leased Property or (ii) to give Tenant Notice that Landlord shall purchase Tenant’s Personal Property within sixty (60) Business Days after such expiration or termination. In the event that Landlord exercises its option under the foregoing clause (ii) of this Section 21.25, the purchase price for all items of Tenant’s Personal Property shall be the lesser of the fair market value or Tenant’s book value of such Tenant’s Personal Property (free of, and net of, all Liens and other encumbrances, monetary or otherwise). Notwithstanding the foregoing, the OTA Assets, despite being a part of Tenant’s Personal Property, shall be conveyed to Landlord or its designee at no cost or expense upon the expiration or sooner termination of this Lease.

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21.26 No Third Party Beneficiaries. Nothing herein is intended or shall be construed to confer upon or give to any person other than Landlord and Tenant, any rights or remedies under or by reason of this Lease.

21.27 Option to Purchase. Tenant shall have the right to purchase the Leased Property from Landlord on the terms and conditions set forth on Exhibit J attached hereto.

21.28 Right of First Refusal. Tenant agrees that during the term of this Lease and for a period of five years following the expiration of this Lease, Tenant shall not engage, and shall not cause or permit any of its Subsidiaries or any of its Affiliates, other than the Affiliated Tenants operating pursuant to the Affiliated Leases to acquire the real property and improvements housing a nursing facility within fifteen (15) miles of the Facility (a “Competing Facility”), without first offering in writing (a “ROFO Notice”) to Landlord or its designee the option (the “ROFO Option”) to (i) acquire the Competing Facility on the terms agreed to by Tenant or its Affiliate and the owner of such Competing Facility (the “Offered Terms”) and (ii) lease such Competing Facility to Tenant or its Affiliate pursuant to a lease agreement in the form of this Lease. Each ROFO Notice shall contain a description of the Offered Terms and a copy of any purchase agreement or letter of intent evidencing the Offered Terms. If Landlord fails to exercise the ROFO Option or fails to respond to such ROFO Notice within twenty (20) days after its receipt of a ROFO Notice, then Landlord shall or shall be deemed to have waived its ROFO Option with respect to such Competing Facility, and Tenant or its Affiliate may acquire the Competing Facility on terms no more favorable to Tenant then the Offered Terms.

21.29 Non-Solicitation. Tenant agrees that during the term of this Lease and for a period of one year following the expiration of this Lease, neither it nor its Subsidiaries or Affiliates will solicit, recruit or seek to divert or move occupants of the Facility to any facility owned or operated by Tenant or its Subsidiary or Affiliate (other than to any facility located at an Affiliated Leased Property).

21.30 Community Fees. To the extent Tenant or the property manager charge or collect any “Community Fee”, “Entrance Fee” or similar fee from residents which is obligated to be repaid, in whole or in part, Tenant agrees that it is solely responsible for such repayment and hereby agrees to indemnify, save, pay, insure and hold Landlord and its Affiliated Parties harmless from and against and reimburse Landlord for any and all loss, damage, cost, liability, fee and expense (including, without limitation, reasonable attorney’s fees based upon service rendered at hourly rates) incurred by or asserted against Landlord which is occasioned by or results, directly or indirectly, from such Community Fees, Entrance Fees or other fees charged by Tenant or the Property Manager. Further, upon an Event of Default under or termination of this Lease, Tenant agrees to assign to Landlord any assets securing or backing the repayment obligation. This provision shall expressly survive termination of the Lease.

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IN WITNESS WHEREOF, the parties have executed this Lease Agreement as a sealed instrument as of the date above first written.

LANDLORD: CHP BATESVILLE HEALTHCARE OWNER, LLC, a Delaware limited liability company
By:	/s/ Kevin R. Maddron
Name:	Kevin R. Maddron
Title:	Senior Vice President

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TENANT: BATESVILLE HEALTH AND REHAB, LLC, an Arkansas limited liability company
By:	/s/ Brian K. Reynolds
Name:	Brian K. Reynolds
Title:	Manager

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The exhibits to this agreement are omitted as not necessary to an understanding of the agreement.

EXHIBIT A	-	The Land
EXHIBIT B	-	Minimum Rent
EXHIBIT C	-	Estoppel Certificate
EXHIBIT D	-	Memorandum of Lease
EXHIBIT E	-	Operating Contracts
EXHIBIT F	-	Permitted Encumbrances
EXHIBIT G	-	Initial Landlord P&E
EXHIBIT H	-	Tenant’s Personal Property
EXHIBIT I	-	Agreements With Affiliates
SCHEDULE 1	-	Affiliated Leases
SCHEDULE 12.6	-	Tenant Personal Property Exclusions
SCHEDULE 16.2	-	Tenant Organizational Chart

EXHIBIT J

TERMS OF OPTION TO PURCHASE

OPTION: During the period commencing one hundred twenty (120) days prior to the third anniversary of the Effective Date of this Lease and expiring on the sixth anniversary of the Effective Date of this Lease (the “Option Period”), Tenant will have the option to buy all of Landlord’s right, title and interest in the Leased Property (the “Option Property”) from Landlord (the “Option”).

EXERCISE OF OPTION: Tenant may exercise the Option by delivering, during the Option Period, written notice to Landlord stating that the Option is exercised (the “Notice of Exercise of Option”) and, in order to be effective, shall also specify the closing date for the Option transaction, which shall be a business day within one hundred twenty (120) days from the date of the Notice of Exercise of Option (the “Option Closing Date”). If Tenant exercises the Option, Landlord and Tenant shall enter into a purchase agreement for the Option Property substantially similar to the Purchase Agreement within twenty (20) days after the exercise of the Option; provided, however, that Section 2.07 and Sections 3.01(d) through and including (i) of the Purchase Agreement shall be intentionally omitted from such purchase agreement.

EXPIRATION AND TERMINATION OF OPTION: If the Option is not exercised in the manner provided above on or before five o’clock p.m. E.S.T. on the last day of the Option Period, the Option shall expire and be null and void and of no further force and effect; provided, however, if said day shall be a Saturday, Sunday or legal holiday, the Option Period shall be extended until five o’clock p.m. E.S.T. on the next following regular business day.

Additionally, Landlord and Tenant acknowledge and agree that the Option shall become null and void and of no further force and effect upon the occurrence of an Event of Default that is not cured by Tenant under this Lease or upon the termination of this Lease.

PURCHASE PRICE: The purchase price for the Option Property will be the amount that yields a four percent (4%) compounded annual return to Landlord with respect to the Adjusted Lease Basis at the time the Option is exercised (the “Purchase Price”). The Purchase Price for the Option Property will be paid by Tenant in cash or other funds acceptable to Landlord at the Option Closing.

PRORATION OF EXPENSES REGARDING OPTION PROPERTY: Landlord and Tenant acknowledge and agree that Tenant, as tenant under this Lease, is responsible for all utilities, real and personal property taxes, and other similar expenses with respect to the Option Property prior to the Option Closing Date, and that if the Option is exercised pursuant to the terms hereof, Tenant, as owner of the Option Property as of the Option Closing Date will be responsible for all costs and expenses associated with the Option Property from and after the Option Closing Date. Thus, Landlord and Tenant acknowledge and agree that no proration of expenses will be necessary in connection with the Option transaction (the “Transaction”). However, Landlord and Tenant acknowledge and agree that Rent due under this Lease will be prorated on a per diem basis as of the Option Closing Date.

AS-IS, WHERE IS NATURE OF OPTION TRANSACTION. THE SALE OF THE OPTION PROPERTY HEREUNDER IS AND WILL BE MADE ON AN “AS IS, WHERE IS, WITH ALL FAULTS” BASIS AND THAT OWNER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE OPTION PROPERTY OR ANY OTHER MATTER WHATSOEVER; EXCEPT THAT LANDLORD OWNS THE OPTION PROPERTY AND HAS THE AUTHORITY TO CONVEY THE PROPERTY TO TENANT UNDER THE TERMS AND CONDITIONS SET FORTH HEREIN.

CONDITIONS TO CLOSING OBLIGATIONS. If Tenant exercises the Option, Tenant’s obligation to close the Transaction is subject to Landlord delivering (a) a Special Warranty Deed conveying the Option Property to Tenant (and a bill of sale or other satisfactory conveyance document with respect to the personal property comprising the Option Property), (b) any transfer tax declarations or other documents required under Applicable Law in connection with the conveyance of the Option Property, (c) an original counterpart of the closing statement, (d) an affidavit with respect to compliance with the Foreign Investment in Real Property Tax Act (Internal Revenue Code Sec. 1445, as amended), (d) such resolutions, and incumbency certificates as required to evidence the capacity and authority of any person signing on behalf of Landlord, and (e) the irrevocable commitment of a title company approved by Tenant issuing Tenant an ALTA owner’s policy for the Option Property in the amount of the Purchase Price.

If Tenant exercises the Option, Landlord’s obligation to close the Transaction is subject to Tenant delivering (a) to Landlord or an escrow agent with irrevocable written direction to disburse the same to Landlord, the Purchase Price, and (b) such other documents and instruments as may be reasonably requested by Landlord or the escrow agent in order to consummate the Transaction.

OPTION TRANSACTION EXPENSES: Tenant shall pay for all costs and expenses related to the Option Closing, except that each party will bear the party’s own attorneys’ fees, costs, and expenses incurred in connection with the Transaction.

EX-10.7

Exhibit 10.7

Schedule of Omitted Documents

of CNL Healthcare Properties, Inc.

The following mortgage agreements have not been filed as exhibits pursuant to Instruction 2 of Item 601 of Regulation S-K: These documents are substantially identical in all material respects to Exhibit 10.5 to this Form 8-K.

1. Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes Future Advances) dated May 31, 2013, made by CHP Broadway Healthcare Owner, LLC, to Keybank National Association.

2. Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes Future Advances) dated May 31, 2013, made by CHP Jonesboro Healthcare Owner, LLC to Keybank National Association.

3. Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes Future Advances) dated May 31, 2013, made by CHP Magnolia Healthcare Owner, LLC, to Keybank National Association.

4. Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes Future Advances) dated May 31, 2013, made by CHP Mine Creek Healthcare Owner, LLC, to Keybank National Association.

5. Arkansas Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing (includes Future Advances) dated May 31, 2013, made by CHP Searcy Healthcare Owner, LLC, to Keybank National Association.

The following lease agreements have not been filed as exhibits pursuant to Instruction 2 of Item 601 of Regulation S-K: These documents are substantially identical in all material respects to Exhibit 10.6 to this Form 8-K.

1. Lease Agreement dated as of May 31, 2013, by and between CHP Broadway Healthcare Owner, LLC, as Landlord, and Broadway Health and Rehab, LLC, as Tenant.

2. Lease Agreement dated as of May 31, 2013, by and between CHP Jonesboro Healthcare Owner, LLC, as Landlord, and Jonesboro Health and Rehab, LLC, as Tenant.

3. Lease Agreement dated as of May 31, 2013, by and between CHP Magnolia Healthcare Owner, LLC, as Landlord, and Magnolia Health and Rehab, LLC, as Tenant.

4. Lease Agreement dated as of May 31, 2013, by and between CHP Mine Creek Healthcare Owner, LLC, as Landlord, and Mine Creek Health and Rehab, LLC, as Tenant.

5. Lease Agreement dated as of May 31, 2013, by and between CHP Searcy Healthcare Owner, LLC, as Landlord, and Searcy Health and Rehab, LLC, as Tenant.

EX-99.1

Exhibit 99.1

News Release

For information contact:

Lisa Schultz

Chief Communications Officer

CNL Financial Group

(407) 650-1223

CNL HEALTHCARE PROPERTIES ACQUIRES FIRST SKILLED NURSING

COMMUNITIES PORTFOLIO FOR $56.4 MILLION

— Portfolio comprises six facilities in Arkansas —

(ORLANDO, Fla.) June 6, 2013 — CNL Healthcare Properties, an investment offering focused on senior housing and healthcare real estate, has acquired six skilled nursing properties in Arkansas for $56.4 million. This portfolio marks the company’s first acquisition in the post-acute care space.

“We are excited to introduce skilled nursing communities to our portfolio through this acquisition and our relationship with Senior Living Centers,” said Stephen H. Mauldin, president and CEO of CNL Healthcare Properties. “We continue to seek new opportunities to further diversify our investment portfolio. The skilled nursing industry has and will continue to play a critical role in the delivery of care to seniors and these properties strategically complement our existing and growing portfolio of senior living and healthcare real estate.”

The Perennial portfolio is composed of: Batesville Healthcare Center in Batesville, Ark.; Broadway Healthcare Center in West Memphis, Ark.; Jonesboro Healthcare Center in Jonesboro, Ark.; Magnolia Healthcare Center in Magnolia, Ark.; Mine Creek Healthcare Center in Nashville, Ark.; and Searcy Healthcare Center in Searcy, Ark. The communities include a total of 868 licensed beds.

Senior Living Centers will manage the six properties under a long-term lease agreement. Senior Living Centers currently manages 17 other skilled nursing properties in Arkansas with more than 1,600 licensed beds.

“This acquisition provided a great opportunity to expand our relationship with CNL Healthcare Properties,” said Brian Reynolds of Senior Living Centers. “Each property in Arkansas is dedicated to providing residents with quality care, and we look forward to continuing that commitment of care with CNL Healthcare Properties.”

— page 1 of 3 —

Page 2 /CNL Healthcare Properties acquires first skilled nursing communities portfolio for $56.4 million

Since its launch in the summer of 2011, CNL Healthcare Properties has acquired interests in senior housing and healthcare assets valued at more than $560 million.

Financial advisors can contact the managing dealer of the REIT, CNL Securities, member FINRA/SIPC, at (866) 650-0650 (www.CNLSecurities.com).

About CNL Healthcare Properties

CNL Healthcare Properties, Inc., is an investment offering that focuses on acquiring properties in the senior housing and healthcare sectors, both stabilized and development, as well as other income-producing properties, real-estate related securities and loans. Beginning with the year ended December 31, 2012, the company intends to be taxed as a real estate investment trust. CNL Financial Group, LLC is the sponsor of CNL Healthcare Properties. For more information, visit www.CNLHealthcareProperties.com.

About CNL Financial Group

CNL Financial Group (CNL) is a leading private investment management firm providing global real estate and alternative investments. Since inception in 1973, CNL and/or its affiliates have formed or acquired companies with more than $26 billion in assets. CNL is headquartered in Orlando, Florida. For more information, visit www.cnl.com.

Caution Concerning Forward-Looking Statements

The information above contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Some factors that might cause such a difference include, but are not limited to, the following: risks associated with our investment strategy; a worsening economic environment in the U.S. or globally, including financial market fluctuations; risks associated with real estate markets, including declining real estate values; availability of proceeds from our offering of our shares; our failure to obtain, renew or extend necessary financing or to access the debt or equity markets; the use of debt to finance our business activities, including refinancing and interest rate risk and our failure to comply with debt covenants; our ability to identify and close on suitable investments; failure to successfully manage growth or integrate acquired properties and operations; risks related to development projects or acquired property value-add conversions, including construction delays and cost overruns; inability to obtain necessary permits and/or public opposition to these activities; our ability to make necessary improvements to properties on a timely or cost-efficient basis; competition for properties and/or tenants; defaults on or non-renewal of leases by tenants; failure to lease properties on favorable terms or at all; the impact of current and future environmental, zoning and other governmental regulations affecting our properties; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of our accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; material adverse actions or omissions by any joint venture partners, if applicable; increases in

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operating costs and other expenses; uninsured losses or losses in excess of our insurance coverage; the impact of outstanding and/or potential litigation; risks associated with our tax structuring; failure to qualify and maintain our REIT qualification; and our ability to protect our intellectual property and the value of our brand. Given these uncertainties, we caution you not to place undue reliance on such statements. For further information regarding risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q, and our registration statement on Form S-11 and the sticker supplements and amendments thereto, copies of which may be obtained from our Web site at http://www.cnlhealthcareproperties.com.

We undertake no obligation to publicly release the results of any revisions to these forward looking-statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

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