FORM OF LOAN AGREEMENT (SEVENTH MEZZANINE LOAN)

Exhibit 10.30

      FORM OF LOAN AGREEMENT
(SEVENTH MEZZANINE LOAN)

Dated as of December 21, 2007

Among

HCR VII PROPERTIES, LLC,
as Borrower

and

JPMORGAN CHASE BANK, N.A.,
as Lender

ADJUSTABLE RATE MULTI-PROPERTY LOAN

(MANOR CARE HEALTH CARE PORTFOLIO)

TABLE OF CONTENTS

i

ii

SCHEDULES

iii

FORM OF LOAN AGREEMENT
(SEVENTH MEZZANINE LOAN)

         THIS LOAN AGREEMENT (SEVENTH MEZZANINE LOAN) , dated as of December 21, 2007 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this " Agreement "), by and between JPMORGAN CHASE BANK, N.A. , a banking association chartered under the laws of the United States of America, having an address at 270 Park Avenue, New York, New York 10017-2014 (in its capacity as collateral agent, for itself and any other Noteholder (as defined below), together with its successors and assigns in such capacity, " Lender ") and HCR VII PROPERTIES, LLC , a Delaware limited liability company (" Borrower "), having an address at 333 N. Summit Street, Toledo, Ohio 43604.

W I T N E S S E T H:

         WHEREAS, JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America (" JPMorgan "), Column Financial, Inc., a Delaware corporation (" Column "), and Bank of America, N.A., a national banking association (" BofA ", and together with JPMorgan and Column, collectively, the " Mortgage Noteholders ") are making a loan in aggregate principal amount of $3,000,000,000.00 (the " Mortgage Loan "), which Mortgage Loan is evidenced by that certain Promissory Note, dated as of the date hereof, made by the entities listed on Schedule I attached hereto (collectively, the" Mortgage Borrowers ") in favor of the Mortgage Noteholders (as the same may be amended, severed, split, extended, consolidated, replaced, restated, supplemented or otherwise modified from time to time, collectively, the " Mortgage Note "), pursuant to a Loan Agreement, dated as of the date hereof, by and among JPMorgan, as collateral agent for itself and the other Mortgage Noteholders (" Mortgage Lender "), HCR ManorCare Maryland Properties, LLC, a Delaware limited liability company (" Maryland Owner "), and the Mortgage Borrowers (as the same may be amended, replaced, restated, supplemented or otherwise modified from time to time, the " Mortgage Loan Agreement ") and secured by the Mortgages (as hereinafter defined);

         WHEREAS , JPMorgan, Column and BofA (collectively, the " First Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $100,000,000.00 (the " First Mezzanine Loan "), which First Mezzanine Loan is evidenced by that certain Promissory Note (First Mezzanine Loan), dated as of the date hereof, made by HCR I-A Properties, LLC, a Delaware limited liability company (" IA Borrower "), and HCR I-B Properties, LLC, a Delaware limited liability company (" IB Borrower ", and together with IA Borrower, each, a " First Mezzanine Borrower " and collectively, the " First Mezzanine Borrowers ") in favor of the First Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " First Mezzanine Note "), pursuant to a certain Loan Agreement (First Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other First Mezzanine Noteholders (together with its successors and assigns, the " First Mezzanine Lender "), and the First Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " First Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of IB Borrower's interest in IA Borrower and all of IA Borrower's interest in the Mortgage Borrowers (other than Maryland Borrower (as defined in this Agreement));

         WHEREAS , JPMorgan, Column and BofA (collectively, the " Second Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $250,000,000.00 (the " Second Mezzanine Loan "), which Second Mezzanine Loan is evidenced by that certain Promissory Note (Second Mezzanine Loan), dated as of the date hereof, made by HCR II Properties, LLC, a Delaware limited liability company (" Second Mezzanine Borrower "), in favor of the Second Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " Second Mezzanine Note "), pursuant to a certain Loan Agreement (Second Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other Second Mezzanine Noteholders (together with its successors and assigns, the " Second

Mezzanine Lender "), and the Second Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " Second Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of Second Mezzanine Borrower's interest in I-B Borrower;

         WHEREAS , JPMorgan, Column and BofA (collectively, the " Third Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $250,000,000.00 (the " Third Mezzanine Loan "), which Third Mezzanine Loan is evidenced by that certain Promissory Note (Third Mezzanine Loan), dated as of the date hereof, made by HCR III Properties, LLC, a Delaware limited liability company (" Third Mezzanine Borrower "), in favor of the Third Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " Third Mezzanine Note "), pursuant to a certain Loan Agreement (Third Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other Third Mezzanine Noteholders (together with its successors and assigns, the " Third Mezzanine Lender "), and the Third Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " Third Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of Third Mezzanine Borrower's interest in Second Mezzanine Borrower;

         WHEREAS , JPMorgan, Column and BofA (collectively, the " Fourth Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $250,000,000.00 (the " Fourth Mezzanine Loan "), which Fourth Mezzanine Loan is evidenced by that certain Promissory Note (Fourth Mezzanine Loan), dated as of the date hereof, made by HCR IV Properties, LLC, a Delaware limited liability company (" Fourth Mezzanine Borrower "), in favor of the Fourth Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " Fourth Mezzanine Note "), pursuant to a certain Loan Agreement (Fourth Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other Fourth Mezzanine Noteholders (together with its successors and assigns, the " Fourth Mezzanine Lender "), and the Fourth Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " Fourth Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of Fourth Mezzanine Borrower's interest in Third Mezzanine Borrower;

         WHEREAS , JPMorgan, Column and BofA (collectively, the " Fifth Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $250,000,000.00 (the " Fifth Mezzanine Loan "), which Fifth Mezzanine Loan is evidenced by that certain Promissory Note (Fifth Mezzanine Loan), dated as of the date hereof, made by HCR V Properties, LLC, a Delaware limited liability company (" Fifth Mezzanine Borrower "), in favor of the Fifth Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " Fifth Mezzanine Note "), pursuant to a certain Loan Agreement (Fifth Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other Fifth Mezzanine Noteholders (together with its successors and assigns, the " Fifth Mezzanine Lender "), and the Fifth Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " Fifth Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of Fifth Mezzanine Borrower's interest in Fourth Mezzanine Borrower;

         WHEREAS , JPMorgan, Column and BofA (collectively, the " Sixth Mezzanine Noteholders ") are making a loan in the aggregate principal amount of $250,000,000.00 (the " Sixth Mezzanine Loan "), which Sixth Mezzanine Loan is evidenced by that certain Promissory Note (Sixth Mezzanine Loan),

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dated as of the date hereof, made by HCR VI Properties, LLC, a Delaware limited liability company (" Sixth Mezzanine Borrower "), in favor of the Sixth Mezzanine Noteholders (as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time, the " Sixth Mezzanine Note "), pursuant to a certain Loan Agreement (Sixth Mezzanine Loan), dated as of the date hereof, by and between JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, as collateral agent for itself and the other Sixth Mezzanine Noteholders (together with its successors and assigns, the " Sixth Mezzanine Lender "), and the Sixth Mezzanine Borrowers (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the " Sixth Mezzanine Loan Agreement "), and secured by, among other things, a pledge of all of Sixth Mezzanine Borrower's interest in Fifth Mezzanine Borrower;

         WHEREAS , Borrower is the legal and beneficial owner of 100% of the issued and outstanding limited liability company membership interests in Sixth Mezzanine Borrower;

         WHEREAS, Borrower desires to obtain the Loan (as defined below) from Lender;

         WHEREAS, JPMorgan, Column and BofA (collectively, the " Noteholders ") are willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as defined below); and

         WHEREAS , as a condition precedent to the obligation of Lender to make the Loan to Borrower, Borrower has entered into that certain Pledge and Security Agreement (Seventh Mezzanine Loan), dated as of the date hereof, in favor of Lender (as amended, supplemented or otherwise modified from time to time, the " Pledge Agreement "), pursuant to which Borrower has granted to Lender a first priority security interest in the Collateral (as defined in the Pledge Agreement) as collateral security for the Debt (as hereinafter defined); and

         NOW THEREFORE, in consideration of the making of the Loan by the Noteholders and the covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows:

         I.     DEFINITIONS; PRINCIPLES OF CONSTRUCTION     

         Section 1.1.     Definitions.     For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

•         " Acceptable Counterparty " shall mean any counterparty to the Interest Rate Cap Agreement (or any guarantor thereof) that has the Minimum Counterparty Rating.

          " Accounts " shall mean, collectively, (a) the Seventh Mezzanine Deposit Account and (b) the Seventh Mezzanine Sub-accounts.

          " Additional Insolvency Opinion " shall mean (a) any non-consolidation opinion or (b) any update to the Insolvency Opinion, in either case, delivered by Borrower subsequent to the Closing Date.

          " Additional True-Lease Opinion " shall mean (a) any true-lease opinion or (b) any update to the True-Lease Opinion, in either case, delivered by Borrower subsequent to the Closing Date.

          " Affected Operator " shall mean, individually and collectively as the context requires, each Operator that is the subject of a Limited Cure Default.

          " Affected Property Release " shall have the meaning set forth in Mortgage Loan Agreement.

          " Affected Property Release Amount " shall mean, with respect to an Individual Property, the Allocated Loan Amount for such Individual Property.

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•         " Affiliate " shall mean, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person.

          " Agent's Register " shall have the meaning set forth in Section 10.24 hereof.

          " Aggregate Debt Service " shall mean, with respect to any particular period of time, the sum of (a) the Debt Service, (b) the Mortgage Debt Service and (c) the Other Mezzanine Debt Service.

          " Aggregate Property Threshold Amount " shall mean $50,000,000.00.

          " Aggregate Remaining Costs " shall have the meaning set forth in Section 5.1.23(a) hereof.

          " Allocated Loan Amount " shall mean, with respect to an Individual Property, the "Allocated Loan Amount" with respect to such Individual Property as set forth on Schedule I .

          " ALTA " shall mean American Land Title Association, or any successor thereto.

          " Alteration Security " shall have the meaning set forth in Section 5.1.23(a) hereof.

          " Alternative Transferee Standard " shall mean and be deemed to have been satisfied by an entity that (i) owns assets with a market value of at least $2,000,000,000, (ii) has a staff of experienced real estate professionals (A) who have the expertise and resources necessary to successfully manage a portfolio of commercial properties having a market value equal to the aggregate market value of the Properties, and (B) the senior members of which have actual experience in managing (at a senior level) a portfolio of commercial properties having a market value of at least $2,000,000,000, and (iii) are of the caliber, reputation, expertise and experience as would be reasonably acceptable to a prudent institutional investor to manage on its behalf a portfolio of commercial properties having a market value equal to the aggregate market value of the Properties.

          " Applicable Interest Rate " shall mean either (a) with respect to any period during which the Loan is a LIBOR Loan, the LIBOR Interest Rate plus the Spread or (b) with respect to any period during which the Loan is a Prime Rate Loan pursuant to the provisions of Section 2.2.4 (b) or (e) hereof, the Prime Rate plus the Prime Rate Spread.

          " Appraised Value " shall mean, with respect to any Individual Property, the "as is" appraised value of such Individual Property based on an updated appraisal thereof, at Borrower's, Senior Mezzanine Borrower's or Mortgage Borrower's sole cost and expense, prepared by a qualified MAI appraiser having no interest (direct or indirect) in the Loan, the Collateral or in the Properties and which is in compliance with the requirements of FIRREA, which appraisal shall be in form and substance acceptable to the Lender.

          " Approved Quarterly CapEx Budget " shall have the meaning set forth in Section 5.1.11(f) hereof.

          " Assignment of Leases " shall mean, (a) with respect to each Individual Property, that certain Assignment of Leases and Rents, dated as of November 6, 2007 and effective as of the date hereof, from the applicable Mortgage Borrower, as assignor, to Mortgage Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, and (b) with respect to the Maryland Properties, that certain Indemnity Assignment of Leases and Rents, dated as of November 6, 2007 and effective as of the date hereof, from Maryland Owner, as assignor, to Mortgage Lender, as assignee, with respect to the Maryland Properties, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

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•         " Assignment of Title Insurance Proceeds " shall mean that certain Assignment of Title Insurance Proceeds, dated as of the date hereof, by and among the Borrower (as defined therein) and the Owner (as defined therein) for the benefit of Lender (as defined therein).

          " Audited Financial Statements " shall have the meaning set forth in Section 5.1.11(b) hereof.

          " Award " shall mean any compensation paid directly or indirectly to Mortgage Borrower and Maryland Owner by any Governmental Authority in connection with a Condemnation with respect to all or any part of any Individual Property.

          " Bankruptcy Action " shall mean with respect to any Person, (a) the filing of a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law filed by such Person; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition against such Person; (c) the filing of an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against such person, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person; (d) the consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Properties by such Person; or (e) the making of an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due by such Person.

          " Bankruptcy Code " shall mean the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C., Section 101, et seq. , and the regulations adopted and promulgated pursuant thereto.

          " Basic Carrying Costs " shall mean, for any period, with respect to each Individual Property, the sum of the following costs associated with such Individual Property for such period: (a) Taxes, (b) Insurance Premiums and (c) Other Charges.

          " BofA " shall mean Bank of America, N.A., a national banking association, and its successors and assigns.

          " Borrower " shall have the meaning set forth in the introductory paragraph hereof.

          " Borrower Company Agreement " shall mean, individually or collectively, as the context may require, the operating agreements and certificates of formation of Borrower.

          " Breakage Costs " shall have the meaning set forth in Section 2.2.4(g) hereof.

          " Business Day " shall mean any day other than a Saturday, Sunday or any other day on which national banks in New York, New York are not open for business.

          " Capital Expenditures " shall mean, for any period, the amount expended with respect to the Properties for items capitalized under GAAP (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements).

          " Cap Replacement Delivery Date " shall have the meaning set forth in Section 2.2.8(c) hereof.

          " Cap Replacement Delivery Deadline " shall have the meaning set forth in Section 2.2.8(c) hereof.

          " Carlyle " shall mean TC Group, L.L.C., a Delaware limited liability company.

          " Cash Management Agreement " shall mean that certain Cash Management Agreement (Seventh Mezzanine Loan), dated as of the date hereof, by and between Borrower and Lender, as

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• 
  

  the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Casualty " shall have the meaning set forth in Section 6.2 hereof.

          " Closing Date " shall mean the date of the funding of the Loan.

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

          " Collateral " means, collectively, the "Collateral", as defined in the Pledge Agreement, and shall also include all amounts on deposit in the Seventh Mezzanine Deposit Account and the Reserve Funds (if such funds are under the control of the Lender), amounts payable pursuant to the Collateral Assignment of Interest Rate Cap and any and all other property or collateral in which Lender is granted a security interest under any of the Loan Documents, in each case whether existing on the date hereof or hereafter pledged or assigned to Lender.

          " Collateral Assignment of Interest Rate Cap Agreement " shall mean, individually and collectively, as the context shall require, those certain Collateral Assignments of Interest Rate Cap Agreement (Seventh Mezzanine Loan), dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Collateral Assignment of Lease Guaranty " shall mean, individually and collectively as the context requires, (a) that certain Collateral Assignment of Lease Guaranty made by Master Tenant to Mortgage Borrower and Maryland Owner and (b) that certain Collateral Assignment of Lease Guaranty made by Mortgage Borrower and Maryland Owner to Mortgage Lender.

          " Collateral Entities " shall have the meaning set forth in Section 5.1.8(a) hereof.

          " Column " shall mean Column Financial, Inc., a Delaware corporation, and its successors and assigns.

          " Condemnation " shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of any Individual Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting such Individual Property or any part thereof.

          " Condemnation Proceeds " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Contractual Obligations " shall mean as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound, or any provision of the foregoing.

          " Control " shall mean the ownership, directly or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial ownership interests of an entity and, when used with respect to any specific Person, the possession, directly or indirectly, of the power to direct and cause the direction of the management and policies of such Person whether through ownership of voting securities, beneficial interests, by contract or otherwise. The definition is to be construed to apply equally to variations of the word " Control ", including " Controlled ," " Controlling " or " Controlled by ."

          " Cooperation Agreement " shall mean that certain Cooperation Agreement of even date herewith by and among Mortgage Lender, Mortgage Borrower, Maryland Owner, each Mezzanine Lender and each Mezzanine Borrower.

          " Corporate Loan Lender " shall mean the lenders party to the Corporate Loan Agreement.

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•         " Corporate Loan " shall mean that certain term and revolving loan financing made by Corporate Loan Lender to Manor Care and HCR Healthcare, LLC, pursuant to the terms of the Corporate Loan Agreement and the other Corporate Loan Documents.

          " Corporate Loan Agreement " shall mean that certain Credit Agreement, dated as of the date hereof, by and among JPMorgan, as administrative and collateral agent, J.P. Morgan Securities Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Bookrunners and Manor Care and HCR Healthcare, LLC, and, as the same may be amended, restated, replaced, supplemented, refinanced, extended or otherwise modified from time to time.

          " Corporate Loan Documents " shall mean, collectively, the Corporate Loan Agreement and any and all other documents governing, evidencing or securing the Corporate Loan, in each case as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Corporate Services Agreement " shall mean, collectively, (i) that certain Corporate Services Agreement, of even date herewith, among HMS and all of the Operators other than the Oklahoma Operators (as defined in Section 11.1 hereof), and (ii) that certain Corporate Services Agreement, of even date herewith, among HMS and each of the Oklahoma Operators.

          " Counterparty " shall mean, with respect to each Interest Rate Cap Agreement, JPMorgan Chase Bank, N.A., Credit Suisse International and BofA or any substitute Acceptable Counterparty, and with respect to any Replacement Interest Rate Cap Agreement, any substitute Acceptable Counterparty.

          " Covered Disclosure Information " shall have the meaning set forth in Section 9.2(b) hereof.

          " CS " shall mean Credit Suisse Securities (USA) LLC, a Delaware limited liability company, and its successors and assigns.

          " Debt " shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note, together with all interest accrued and unpaid thereon (including any interest that would accrue on the outstanding principal amount of the Loan through and including the end of any applicable Interest Period, even if such Interest Period extends beyond any prepayment date) and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Pledge Agreement and the other Loan Documents.

          " Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under this Agreement and the Note.

          " Debt Service Coverage Ratio " shall mean a ratio for the applicable period in which:

  • (a)

    the numerator is the Net Cash Flow (excluding interest on credit accounts) for such period as set forth in the financial statements required hereunder; and
    
    

    (b)

    the denominator is the Aggregate Debt Service due and payable for such period; provided , however , that for purposes of the calculation of the Debt Service Coverage Ratio, Aggregate Debt Service shall be calculated using a LIBOR Interest Rate in which LIBOR is equal to the Strike Price.

          " Default " shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

          " Default Rate " shall mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate and (b) three percent (3%) above the Applicable Interest Rate.

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•         " Designated Mezzanine Lender " shall mean, individually and collectively, as the context shall require (i) any holder of a Mezzanine Loan or any portion thereof, the original principal balance of which was $200,000,000.00 or more, provided, however, that if any Mezzanine Loan having an original principal balance of $200,000,000.00 or more is split and severed into two or more Mezzanine Loans all of which had an original principal balance of less than $200,000,000.00, the holders of such split and severed Mezzanine Loans having an aggregate original principal balance of $200,000,000.00 or more, acting jointly, shall be deemed to collectively constitute a Designated Mezzanine Lender, and (ii) any holder of both a Mezzanine Loan and a portion of the Mortgage Loan or a participation therein, the aggregate original principal balance of which was $200,000,000.00 or more.

          " Determination Date " shall mean, with respect to any Interest Period, the date that is two (2) London Business Days prior to the fifteenth (15 ^th ) day of the calendar month in which such Interest Period commences.

          " Disclosure Document " shall mean a prospectus, prospectus supplement, private placement memorandum or similar offering memorandum or offering circular, term sheet if any, or such other information customarily required by Lender used to offer Securities in connection with a Securitization.

          " Disregarded Entities " shall have the meaning set forth in Section 5.1.10 hereof.

          " Eligible Account " shall mean an account separate and identifiable from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

          " Eligible Institution " shall mean a depository institution or trust company, the short-term unsecured debt obligations or commercial paper of which are rated at least "A-1+" by S&P, "P-1" by Moody's and "F-1+" by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of Letters of Credit or accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least "AA" by Fitch and S&P and "Aa2" by Moody's).

          " Embargoed Person " shall have the meaning set forth in Section 4.1.35 hereof.

           "Enforcement Action " shall mean any (i) judicial or non-judicial foreclosure proceeding, the exercise of any power of sale, the taking of a deed or assignment in lieu of foreclosure, the obtaining of a receiver or the taking of any other enforcement action against any of the Properties, the Collateral, the Borrower, the Senior Mezzanine Borrower, the Mortgage Borrower or Maryland Owner, including, without limitation, the taking of possession or control of any portion thereof, (ii) acceleration of, or demand or action taken in order to collect, all or any indebtedness secured by the Properties and/or the Collateral (other than giving of notices of default and statements of overdue amounts) or (iii) exercise of any right or remedy available to Lender under the Loan Documents, Senior Mezzanine Lender under the Senior Mezzanine Loan Documents or Mortgage Lender under the Mortgage Loan Agreement, at law, in equity or otherwise with respect to the Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner and/or the Collateral or Properties, as applicable.

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•         " Environmental Indemnity " shall mean that certain Environmental Indemnity Agreement (Seventh Mezzanine Loan), dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Equity Capital " shall mean the equity capital of Guarantor, excluding retained earnings and letters of credit issued to Guarantor on the Closing Date, whether in the form of preferred equity on terms reasonably acceptable to Lender or common equity or, in the case of members of Guarantor's management or Persons under their control, rollover equity.

          " ERISA " shall mean the Employee Retirement Income Security Act of 1974, as amended.

          " Event of Default " shall have the meaning set forth in Section 8.1(a) hereof.

          " Exchange Act " shall have the meaning set forth in Section 9.2(a) hereof.

          " Exchange Act Filing " shall have the meaning set forth in Section 9.1(b) hereof.

          " Excluded Taxes " shall have the meaning set forth in Section 2.2.9 .

          " Facility ", with respect to each Individual Property, shall have the meaning set forth in the granting clause of the Mortgage encumbering such Individual Property.

          " Fee Borrower " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Fifth Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Fifth Mezzanine Note.

          " Fifth Mezzanine Deposit Account " shall have the meaning set forth in the Fifth Mezzanine Loan Agreement.

          " Fifth Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the Fifth Mezzanine Loan Agreement.

          " Fifth Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " Fifth Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the Fifth Mezzanine Loan Agreement.

          " First Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

          " First Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the First Mezzanine Note.

          " First Mezzanine Deposit Account " shall have the meaning set forth in the First Mezzanine Loan Agreement.

          " First Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " First Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " First Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

9

•         " First Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the First Mezzanine Loan Agreement.

          " First Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " First Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " First Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the First Mezzanine Loan Agreement.

          " Fiscal Year " shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.

          " Fitch " shall mean Fitch, Inc.

          " Fourth Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Fourth Mezzanine Note.

          " Fourth Mezzanine Deposit Account " shall have the meaning set forth in the Fourth Mezzanine Loan Agreement.

          " Fourth Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the Fourth Mezzanine Loan Agreement.

          " Fourth Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " Fourth Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the Fourth Mezzanine Loan Agreement.

          " GAAP " shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial report, consistently applied with such changes and modifications as Lender may reasonably approve.

          " General Taxes " shall have the meaning set forth in Section 2.2.9 .

          " Government Account " shall mean any account payable by any Government Payor under the Medicare or Medicaid programs, any similar or implementing state statutes and the rules and regulations promulgated pursuant to any thereof.

          " Government Payor " shall mean the Centers for Medicare & Medicaid Services and any other federal or state governmental authority or any other governmental Person responsible for making payment of any Government Account.

          " Governmental Authority " shall mean any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence having jurisdiction over the Properties, the Senior Mezzanine Collateral, the Collateral, Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner, Guarantor, Master Tenant or Operator.

10

•         " Gross Income from Operations " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Ground Lease " shall mean, individually and collectively, as the context requires, those certain ground leases described on Schedule II hereto (as such schedule may be modified from time to time to include ground leases for Substitute Properties and to exclude ground leases for Substituted Properties).

          " Guarantor " shall mean HCR ManorCare, Inc., a Delaware corporation.

          " Guaranty " shall mean that certain Guaranty (Seventh Mezzanine Loan), dated as of the date hereof, from Guarantor to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Health Care Authorities " shall mean any Governmental Authority or fiscal intermediary of the Facilities having jurisdiction over the ownership, operation, use or occupancy of any Individual Property as a skilled nursing facility, assisted living facility, long term acute care facility or other health care facility.

          " Health Care Licenses " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Health Care Requirements " shall mean, with respect to each Individual Property, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, standards, policies, judgments, decrees and injunctions or agreements, in each case regulating the establishment, construction, ownership, operation, use or occupancy of such Individual Property or any part thereof as a skilled nursing facility or assisted living facility, and all material permits, licenses and authorizations and regulations relating thereto, including all material rules, orders, regulations and decrees of and agreements with Health Care Authorities as pertaining to such Individual Property.

          " HMS " shall have the meaning set forth in Section 5.1.34 hereof.

          " IA Borrower " shall have the meaning set forth in the Recitals hereto.

          " IB Borrower " shall have the meaning set forth in the Recitals hereto.

          " Improvements " shall have the meaning set forth in the granting clause of the related Mortgage with respect to each Individual Property.

          " Indebtedness " of a Person, at a particular date, means the sum (without duplication) at such date of (a) all indebtedness or liability in respect of borrowed money of such Person (including indebtedness in the form of mezzanine debt and preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens.

          " Indemnification Agreement " shall have the meaning set forth in Section 9.2(b) hereof.

          " Indemnified Liabilities " shall have the meaning set forth in Section 10.13(b) hereof.

          " Indemnified Persons " shall have the meaning set forth in Section 9.2(b) hereof.

          " Indemnifying Person " shall mean each of Borrower and Guarantor.

          " Indemnity Guaranty " shall mean that certain Indemnity Guaranty Agreement, dated as of the date hereof, from Maryland Owner to Mortgage Lender securing the full and prompt payment and performance of the obligations and liabilities of Maryland Borrower under the Mortgage Note

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  and the other Mortgage Loan Documents, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Independent Director " or " Independent Manager " (Borrower) shall mean a natural person who is not at the time of initial appointment, or at any time while serving as a director or manager, as applicable, and has not been at any time during the preceding five (5) years: (a) a stockholder, director (with the exception of serving as the Independent Director or Independent Manager of Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner), officer, trustee, employee, partner, member (with the exception of serving as a special member), attorney or counsel of the Principal, Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner or any Affiliate of any of them; (b) a creditor, customer, supplier or other person who derives any of its purchases or revenues from its activities with the Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner, or any Affiliate of any of them; (c) a Person or other entity controlling or under common control with any Person excluded from serving as Independent Director or Independent Manager under the foregoing subparagraphs (a) or (b); or (d) a member of the immediate family by blood or marriage of any Person excluded from serving as Independent Director or Independent Manager under the foregoing subparagraphs (a) or (b). As used in this definition, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. A natural person who satisfies the foregoing definition other than subparagraph (b) shall not be disqualified from serving as an Independent Director or Independent Manager of Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner or other applicable Person if such individual is an independent director or independent manager provided by a nationally-recognized company that provides professional independent directors or independent managers (a " Professional Independent Director " or " Professional Independent Manager ") and that also provides other corporate services in the ordinary course of its business. A natural person who otherwise satisfies the foregoing definition other than subparagraph (a) by reason of being the independent director or independent manager of a "special purpose entity" affiliated with Borrower shall not be disqualified from serving as an Independent Director or Independent Manager of Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Principal, or Maryland Owner if such individual is either (i) a Professional Independent Director or Professional Independent Manager or (ii) the fees that such individual earns from serving as independent director or manager of affiliates of Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Principal or Maryland Owner in any given year constitute in the aggregate less than five percent (5%) of such individual's annual income for such year. Notwithstanding the immediately preceding sentence, an Independent Director or Independent Manager may not simultaneously serve as Independent Director or Independent Manager of Borrower, Principal, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner and independent director or independent manager of a special purpose entity that owns a direct or indirect equity interest in the Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner (other than Principal) or a direct or indirect equity interest of any co-borrower of the (1) Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner, (2) Operator or (3) Master Tenant.

          " Independent Director " or " Independent Manager " (Master Tenant) shall have the meaning set forth in the Mortgage Loan Agreement.

          " Independent Director " or " Independent Manager " (Operator) shall have the meaning set forth in the Mortgage Loan Agreement.

          " Individual Leasehold Property " shall mean, with respect to each Leasehold Borrower, each parcel of real property, the Improvements thereon and all personal property leased by such Leasehold Borrower pursuant to the related Ground Lease and encumbered by a Mortgage,

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  together with all rights pertaining to such property and Improvements (as more particularly described in the Granting Clauses of the applicable Mortgage and referred to therein as the "Property") and as set forth on Schedule I . For the avoidance of doubt, the term "Individual Leasehold Property" shall (a) exclude (i) any Release Property which is an Individual Leasehold Property from and after the date the same has been released pursuant to Section 2.6.1 hereof and (ii) any Substituted Property which is an Individual Leasehold Property from and after the substitution thereof in accordance with Section 2.5 hereof, and (b) include any Substitute Property which is an Individual Leasehold Property from and after the substitution thereof in accordance with Section 2.5 hereof.

          " Individual Property " shall mean, with respect to each Mortgage Borrower (other than Maryland Borrower) and Maryland Owner, each parcel of real property, the Improvements thereon and all personal property owned by such Mortgage Borrower or Maryland Owner and encumbered by a Mortgage, together with all rights pertaining to such property and Improvements (as more particularly described in the Granting Clauses of the applicable Mortgage and referred to therein as the "Property") and as set forth on Schedule I . For the avoidance of doubt, the term "Individual Property" shall (a) exclude (i) any Release Property from and after the same has been released pursuant to Section 2.6.1 hereof and (ii) any Substituted Property from and after the substitution thereof in accordance with Section 2.5 hereof and (b) include (i) any Substitute Property from and after the substitution thereof in accordance with Section 2.5 hereof and (ii) each Individual Leasehold Property.

          " Individual Property Threshold Amount " shall mean, with respect to any Individual Property, the greater of (i) Five Million Dollars ($5,000,000.00) and (ii) five percent (5%) of the Allocated Loan Amount (as defined in the Mortgage Loan Agreement) of such Individual Property.

          " Insolvency Opinion " shall mean that certain non-consolidation opinion letter dated the date hereof delivered by Richards, Layton & Finger, P.A. in connection with the Loan.

          " Insurance Premiums " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Insurance Proceeds " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Interest Period " shall mean, with respect to any Payment Date, the period commencing on the ninth (9 ^th ) day of the calendar month immediately preceding the calendar month in which such Payment Date occurs and terminating on (and including) the eighth (8 ^th ) day of the calendar month in which such Payment Date occurs; provided , however , each Interest Period shall be a full month and shall not be shortened by reason of any payment of the Loan prior to the expiration of such Interest Period.

          " Interest Rate Cap Agreement " shall mean, as applicable, one or more Interest Rate Cap Agreements (together with the confirmation and schedules relating thereto) in form and substance reasonably satisfactory to Lender between Borrower and an Acceptable Counterparty, or a Replacement Interest Rate Cap Agreement.

          " JPMorgan " shall mean JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America, and its successors and assigns.

          " Late Payment Charge " shall have the meaning set forth in Section 2.3.3 hereof.

          " Lease " shall mean any lease (including the Master Lease and the Operating Lease, but excluding each Ground Lease), rental agreement, occupancy agreement, residency agreement, sublease or subsublease, letting, license, concession or other agreement of whatever form, including service, consulting and administrative agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Individual Property, and (a) every modification,

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  amendment, extension, renewal, replacement or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

          " Lease Guaranty " shall mean that certain Joint and Several Cross-Default Guaranty, dated as of the date hereof, made by each Operator in favor of Master Tenant.

          " Leasehold Borrower " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Leasehold Properties " shall mean, collectively, each and every Individual Leasehold Property.

          " Legal Requirements " shall mean, with respect to each Individual Property, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities or Health Care Authorities affecting such Individual Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting such Individual Property or any part thereof, including any which may (a) require repairs, modifications or alterations in or to such Individual Property or any part thereof, or (b) in any way limit the use and enjoyment thereof, but excluding in each case all Health Care Requirements and the requirements of applicable Environmental Laws (as such term is defined in the Environmental Indemnity).

          " Lender " shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns; provided , however , that "Lender" shall be deemed to include each Noteholder for purposes of (a) the following sections of this Agreement: Sections 2.2.4(e) and (g) , Section 2.2.5 , Section 2.2.9 , Section 10.13 , and (b) any other provisions of this Agreement and of any other Loan Documents which provide for indemnification of Lender.

          " Letter of Credit " shall mean an irrevocable, unconditional, transferable, clean sight draft letter of credit reasonably acceptable to Lender (either (a) an evergreen letter of credit, (b) one which does not expire until at least three hundred sixty-five days (365) after the issuance thereof or (c) one which does not expire until at least ten (10) Business Days after the Maturity Date or such earlier date that such letter of credit is no longer required under the terms of the Loan Documents) in favor of Lender and entitling Lender to draw thereon based upon a statement purportedly executed by or on behalf of Lender that it has the right to draw thereon (either in whole or in part) in New York, New York or such other place as shall be reasonably acceptable to Lender, issued by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution. If at any time the bank issuing any such Letter of Credit shall cease to be an Eligible Institution and Borrower shall have failed to deliver to Lender a substitute Letter of Credit within ten (10) days after such bank shall have ceased to be an Eligible Institution, Lender shall have the right immediately to draw upon the same in full and hold the proceeds of such draw in accordance with the applicable provisions hereof. Each such Letter of Credit must be obtained by a Person, on behalf of Borrower, other than any Special Purpose Entity which is an Affiliate of Borrower, and neither Borrower nor any Special Purpose Entity which is an Affiliate of Borrower shall have or be permitted to have any liability or other obligations under any reimbursement agreement with respect to any such Letter of Credit or otherwise in connection with reimbursement to the issuing bank for draws on such Letter of Credit.

          " Liabilities " shall have the meaning set forth in Section 9.2(b) hereof.

          " LIBOR " shall mean, with respect to each Interest Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest ¹ / 1000 of 1%) for deposits in U.S.

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  dollars, for a one-month period, that appears on Reuters Screen LIBOR01 (or the successor thereto) as of 11:00 a.m., London time, on the related Determination Date. If such rate does not appear on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such Determination Date, Lender shall request the principal London office of any four major reference banks in the London interbank market selected by Lender to provide such bank's offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. dollars for a one-month period as of 11:00 a.m., London time, on such Determination Date for amounts of not less than the outstanding amount of the Loan. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Lender shall request any three major banks in New York City selected by Lender to provide such bank's rate (expressed as a percentage per annum) for loans in U.S. dollars to leading European banks for a one-month period as of approximately 11:00 a.m., New York City time on the applicable Determination Date for amounts of not less than the outstanding amount of the Loan. If at least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined by Lender or its agent, which determination shall be conclusive absent manifest error. Notwithstanding anything to the contrary contained in this Agreement, LIBOR for the period commencing on the Closing Date and ending on January 8, 2008 shall be equal to 4.897%.

          " LIBOR Interest Rate " shall mean with respect to each Interest Period the quotient of (i) LIBOR applicable to the Interest Period divided by (ii) a percentage equal to 100% minus the Reserve Requirements applicable to the Interest Period.

          " LIBOR Loan " shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon the LIBOR Interest Rate.

          " Licenses " shall have the meaning set forth in Section 4.1.22 hereof.

          " Lien " shall mean, with respect to each Individual Property, the Senior Mezzanine Collateral or the Collateral, any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance or charge on or affecting the applicable Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner or such Individual Property, the Senior Mezzanine Collateral or the Collateral (as the case may be), any portion thereof, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic's, materialmen's and other similar liens and encumbrances.

          " Limited Cure Default " shall have the meaning set forth in Section 8.1(c) hereof.

          " Limited Cure Release " shall have the meaning set forth in Section 8.1(c) hereof.

          " Limited Cure Release Amount " shall have the meaning set forth in Section 8.1(c) hereof.

          " Liquidation Event " shall have the meaning set forth in Section 2.4.2(a) hereof.

          " Loan " shall mean the loan made by Lender to Borrower pursuant to this Agreement.

          " Loan Documents " shall mean, collectively, this Agreement, the Note, the Pledge Agreement, the Environmental Indemnity, the Collateral Assignment of Interest Rate Cap Agreement, the Subordinations of South Carolina Management Agreement, the O&M Agreement, if any, the Guaranty, the Cash Management Agreement, the Cooperation Agreement, the Assignment of Title Insurance Proceeds and any and all other documents executed and/or delivered in connection with the Loan.

          " Loan Release Payments " shall have the meaning set forth in Section 2.6.1(e) hereof.

          " Lockout Release Date " shall have the meaning set forth in Section 2.4.1 hereof.

15

•         " London Business Day " shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in London, England or New York, New York are not open for business.

          " Low DSCR General Reserve Account " shall have the meaning set forth in Section 7.1.1 .

          " Low DSCR General Reserve Funds " shall have the meaning set forth in the Cash Management Agreement.

          " Low DSCR Interest Floor Reserve Account " shall have the meaning set forth in Section 7.1.1 .

          " Low DSCR Interest Floor Reserve Funds " shall have the meaning set forth in the Cash Management Agreement.

          " Low DSCR Reserve Funds " shall mean, collectively, Low DSCR Interest Floor Reserve Funds and Low DSCR General Reserve Funds.

          " Mandatory Prepayment Date " shall have the meaning set forth in Section 2.4.4 hereof.

          " Manor Care " shall have the meaning set forth in the definition of "Merger Agreement".

          " Maryland Borrower " shall mean HCR ManorCare Maryland Properties II, LLC, a Delaware limited liability company.

          " Maryland Owner " shall have the meaning set forth in the Recitals hereto.

          " Maryland Properties " shall mean each of those certain Individual Properties located in the State of Maryland as listed on Schedule IV attached hereto.

          " Master Lease " shall mean that certain Master Lease of even date herewith by and between Mortgage Borrower (other than Maryland Borrower) and Maryland Owner, as landlord, and Master Tenant, as tenant.

          " Master Tenant " shall mean HCR III Healthcare, LLC, a Delaware limited liability company.

          " Material Adverse Effect " shall mean any material adverse effect upon (a) the business, operations, assets or financial condition of (i) Borrower, (ii) any Senior Mezzanine Borrower (with respect to First Mezzanine Borrower, taken as a whole), (iii) Mortgage Borrower and Maryland Owner (taken as a whole), (iv) Guarantor, (v) Master Tenant, (vi) Operator (taken as a whole), (vii) the Properties (taken as a whole) or the Facilities (taken as a whole), (viii) the Senior Mezzanine Collateral with respect to any one Senior Mezzanine Loan or (ix) the Collateral; (b) the ability of Borrower or Guarantor to perform, in all material respects, its respective material obligations under the Loan Documents (taken as a whole) to which it is a party; (c) the ability of any Senior Mezzanine Borrower (with respect to First Mezzanine Borrower, taken as a whole) to perform in all material respects, its respective obligations under the Senior Mezzanine Loan Documents to which it is a party, (d) the ability of Mortgage Borrower (taken as a whole) and Maryland Owner or Guarantor to perform in all material respects, its respective obligations under the Mortgage Loan Documents to which it is a party; (e) the ability of Master Tenant or Operator (taken as a whole) to perform, in all material respects, its respective material obligations under the Leases (taken as a whole); (f) the enforceability or validity of (i) the Master Lease, (ii) the Operating Lease (taken as a whole), (iii) the Loan Documents (taken as a whole) or the perfection and priority of the Liens created under the Loan Documents (taken as a whole), (iv) the Senior Mezzanine Loan Documents for any one Senior Mezzanine Loan (taken as a whole) or the perfection and priority of the Liens created under the Senior Mezzanine Loan Documents for any one Senior Mezzanine Loan (taken as a whole) or (v) the Mortgage Loan Documents (taken as a whole) or the perfection and priority of the Liens created under the Mortgage Loan Documents (taken as a whole); or (g) (i) the material rights, interests and

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  remedies of Lender under the Loan Documents (taken as a whole), (ii) the material rights, interests and remedies of Lender under the Senior Mezzanine Loan Documents with respect to any one Senior Mezzanine Loan (taken as a whole) or (iii) the material rights, interests and remedies of Mortgage Lender under the Mortgage Loan Documents (taken as a whole).

          " Maturity Date " shall mean January 9, 2013, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

          " Maximum Legal Rate " shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

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

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

          " Merger " shall mean that certain merger transaction effectuated substantially in accordance with the Merger Agreement, pursuant to which Mergerco shall be merged with and into Manor Care, with Manor Care being the surviving entity.

          " Merger Agreement " shall mean that certain Agreement and Plan of Merger, dated as of July 2, 2007, by and between MCHCR-CP Merger Sub Inc., a Delaware corporation (" Mergerco "), and Manor Care, Inc., a Delaware corporation (" Manor Care "), and the disclosure schedules and exhibits attached thereto and made a part thereof as same may have been amended pursuant to amendments disclosed to Lender.

          " Mergerco " shall have the meaning set forth in the definition of "Merger Agreement".

          " Mezzanine Borrower " shall mean, individually and collectively as the context may require, (a) First Mezzanine Borrower, (b) Second Mezzanine Borrower, (c) Third Mezzanine Borrower, (d) Fourth Mezzanine Borrower, (e) Fifth Mezzanine Borrower, (f) Sixth Mezzanine Borrower and (g) Borrower.

          " Mezzanine Entities " shall have the meaning set forth in Section 5.2.10(e) hereof.

          " Mezzanine Lender " shall mean, individually and collectively as the context may require (a) First Mezzanine Lender, (b) Second Mezzanine Lender, (c) Third Mezzanine Lender, (d) Fourth Mezzanine Lender, (e) Fifth Mezzanine Lender, (f) Sixth Mezzanine Lender and (g) Lender.

          " Mezzanine Loan " shall mean, individually and collectively as the context may require (a) the First Mezzanine Loan, (b) the Second Mezzanine Loan, (c) the Third Mezzanine Loan, (d) the Fourth Mezzanine Loan, (e) the Fifth Mezzanine Loan, (f) the Sixth Mezzanine Loan and (g) the Loan.

          " Mezzanine Loan Agreement " shall mean, individually and collectively as the context may require, (a) the First Mezzanine Loan Agreement, (b) the Second Mezzanine Loan Agreement, (c) the Third Mezzanine Loan Agreement, (d) the Fourth Mezzanine Loan Agreement, (e) the Fifth Mezzanine Loan Agreement, (f) the Sixth Mezzanine Loan Agreement and (g) this Agreement.

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•         " MILA " shall have the meaning set forth in paragraph (a) of the definition of "Special Purpose Entity (Operator)".

          " Minimum Counterparty Rating " shall mean, with respect to a Counterparty, that (a) the long-term unsecured debt obligations or counterparty rating of such Counterparty are rated at least "A-" by S&P and (b) the long-term unsecured debt obligations or counterparty rating of such Counterparty are rated at least "A1" by Moody's.

          " Moody's " shall mean Moody's Investors Service, Inc.

          " Mortgage " shall mean (a) with respect to each Individual Property other than an Individual Leasehold Property or a Maryland Property, that certain Mortgage (or Deed of Trust or Deed to Secure Debt) and Security Agreement, dated as of November 6, 2007 and effective as of the date hereof, executed and delivered by Mortgage Borrower, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, (b) with respect to each Individual Leasehold Property, that certain Leasehold Mortgage (or Deed of Trust or Deed to Secure Debt) and Security Agreement, dated as of November 6, 2007 and effective as of the date hereof, executed and delivered by Mortgage Borrower, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time and (c) with respect to each Maryland Property, that certain Indemnity Deed of Trust and Security Agreement, dated as of November 6, 2007 and effective as of the date hereof, executed and delivered by Maryland Owner as security for, inter alia, the obligations and liabilities of Maryland Owner under the Indemnity Guaranty, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Mortgage Borrower " shall mean the "Borrower" under and as defined in the Mortgage Loan Agreement.

          " Mortgage Cash Management Account " shall mean the "Cash Management Account" under and as defined in the Mortgage Cash Management Agreement.

          " Mortgage Cash Management Agreement " shall mean that certain Cash Management Agreement, dated as of the date hereof, among Mortgage Borrower, Maryland Owner and Mortgage Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Mortgage Debt " shall mean the "Debt" as defined in the Mortgage Loan Agreement.

          " Mortgage Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Mortgage Note.

          " Mortgage Lender " shall have the meaning set forth in the Recitals hereto, together with its successors and assigns.

          " Mortgage Loan " shall have the meaning set forth in the Recitals hereto.

          " Mortgage Loan Agreement " shall have the meaning set forth in the Recitals hereto.

          " Mortgage Loan Documents " shall mean, collectively, the Mortgage Note, the Mortgage Loan Agreement, the Mortgage, the Assignment of Leases and Rents, the Mortgage Cash Management Agreement, and any and all other documents defined as "Loan Documents" in the Mortgage Loan Agreement, as amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Mortgage Loan Event of Default " shall mean an "Event of Default" under and as defined in the Mortgage Loan Agreement.

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•         " Mortgage Loan Reserve Funds " shall mean the "Reserve Funds" as defined in the Mortgage Loan Agreement.

          " Mortgage Note " shall have the meaning set forth in the Recitals hereto.

          " Mortgage Noteholders " shall have the meaning set forth in the Recitals hereto.

          " Mortgage Release Amount " shall mean "Release Amount" under, as defined in, and subject to adjustment in accordance with, the Mortgage Loan Agreement.

          " Mortgage Sub-accounts " shall have the meaning set forth in the Mortgage Cash Management Agreement.

          " Net Cash Flow " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Net Cash Flow Schedule " shall mean a schedule reconciling Net Operating Income to Net Cash Flow, which schedule shall itemize all material adjustments to Net Operating Income to arrive at Net Cash Flow, accompanied by an Officer's Certificate stating that such items fairly and correctly reflect in all material respects the matters set forth therein.

          " Net Liquidation Proceeds After Debt Service " shall mean, with respect to any Liquidation Event, all amounts paid to or received by or on behalf of Mortgage Borrower or Maryland Owner in connection with such Liquidation Event, including, without limitation, proceeds of any sale, refinancing or other disposition or liquidation, less (a) Lender's, Mortgage Lender's and/or Senior Mezzanine Lender's reasonable costs incurred in connection with the recovery thereof, (b) the costs incurred by Mortgage Borrower or Maryland Owner in connection with a Restoration of all or any portion of the Property made in accordance with the Mortgage Loan Documents, (c) amounts required or permitted to be deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to Mortgage Lender or pursuant to the applicable Senior Mezzanine Loan Documents to Senior Mezzanine Lender, (d) (i) in the case of a foreclosure sale, disposition or Transfer of the Property in connection with realization thereon following an Mortgage Loan Event of Default, such reasonable and customary costs and expenses of sale or other disposition (including attorneys' fees and brokerage commissions), and (ii) in the case of a foreclosure sale, disposition or Transfer of the Senior Mezzanine Collateral in connection with realization thereon following a Senior Mezzanine Loan Event of Default, such reasonable and customary costs and expenses of sale or other disposition (including attorneys' fees and brokerage commissions), (e) (i) in the case of a foreclosure sale, such costs and expenses incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled to receive reimbursement for under the terms of the Mortgage Loan Documents, and (ii) in the case of a foreclosure sale, such costs and expenses incurred by Senior Mezzanine Lender under the applicable Senior Mezzanine Loan Documents as the applicable Senior Mezzanine Lender shall be entitled to receive reimbursement for under the terms of the applicable Senior Mezzanine Loan Documents, (f) in the case of a refinancing of the Mortgage Loan and/or any Senior Mezzanine Loan, such costs and expenses (including attorneys' fees) of such refinancing as shall be reasonably approved by Mortgage Lender and/or Senior Mezzanine Lender, as the case may be, (g) the amount of any prepayments required pursuant to the Mortgage Loan Documents, any of the Senior Mezzanine Loan Documents, and/or the Loan Documents, in connection with any such Liquidation Event and (h) all amounts which are required to be paid to each Other Mezzanine Borrower or Other Mezzanine Lender pursuant to the terms and provisions of the Mortgage Loan Agreement, the Loan Agreement and each Other Mezzanine Loan Agreement that require ratable allocation of any such amounts among the Mortgage Loan and each Mezzanine Loan.

          " Net Operating Income " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Net Proceeds " shall have the meaning set forth in the Mortgage Loan Agreement.

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•         " New Lease " shall have the meaning set forth in Section 5.1.22 hereof.

          " Non-Excluded Taxes " shall have the meaning set forth in Section 2.2.9 hereof.

          " Non-Exempt Lender " shall have the meaning set forth in Section 2.2.9 .

          " Non-Material Lease " shall mean (a) any Lease to a third-party tenant with respect to an Individual Property, which Lease (i) has a term which does not exceed five (5) years, and (ii) is for a portion of the Facility located on such Individual Property which does not exceed 5,000 square feet, and (b) any Lease to a third party tenant with respect to an Individual Property, which Lease (i) has a term not to exceed five (5) years, (ii) is for an unimproved portion of such Individual Property which in any case constitutes less than ten percent (10%) of the land constituting such Individual Property and such land is in a portion of such Individual Property that is immaterial to the use, operation or maintenance of such Individual Property as a skilled nursing facility or as an assisted living facility, as applicable, (iv) does not cause the Facility or such Individual Property to fail to be in compliance with all material Legal Requirements, and (v) restricts the use of the land demised thereunder to uses which comply with all material Legal Requirements.

          " Note " shall mean that certain Promissory Note of even date herewith in the stated principal amount of Two Hundred Fifty Million and No/100 Dollars ($250,000,000.00) made by Borrower in favor of each of JPMorgan, Column and BofA, as the same may be amended, severed, split, extended, consolidated, restated, replaced, supplemented or otherwise modified from time to time.

          " Noteholder " shall mean each holder of the Note, including any assignee or successor to a holder of the Note; as of the Closing Date, the Noteholders are JPMorgan, Column and BofA.

          " O&M Agreement " shall mean, with respect to each Individual Property for which Lender shall reasonably so require, that certain Operations and Maintenance Agreement (Seventh Mezzanine Loan), dated as of the date hereof, between Borrower and Lender given in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          " Officer's Certificate " shall mean a certificate delivered to Lender by Borrower, which is signed on behalf of Borrower by an authorized representative or officer of Borrower (in such capacity).

          " Operating Cash Flow Coverage Ratio " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Operating Expenses " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Operating Lease " shall mean, individually and collectively, as the context requires, each of those certain subleases of even date herewith entered into by each Operator, as subtenant thereunder, in each case with Master Tenant, as sublandlord.

          " Operator " shall mean, individually and collectively as the context requires, the entities set forth on Schedule III , together with their respective permitted successors and permitted assigns, each of which entities is the operator of the Individual Property set forth opposite such entity's name on Schedule III pursuant to an Operating Lease. For the avoidance of doubt, the term "Operator" shall include any Substitute Property Operator from and after a substitution in accordance with Section 2.5 hereof.

          " Other Borrower Collateral " shall have the meaning set forth in Section 11.2.1 hereof.

          " Other Borrowers " shall have the meaning set forth in Section 11.1 hereof.

          " Other Charges " shall mean all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license fees for the use of vaults, chutes

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  and similar areas adjoining any Individual Property, now or hereafter levied or assessed or imposed against such Individual Property or any part thereof.

          " Other Mezzanine Borrower " shall mean, individually or collectively, as the context may require, (a) the First Mezzanine Borrower, (b) the Second Mezzanine Borrower, (c) the Third Mezzanine Borrower, (d) the Fourth Mezzanine Borrower, (e) the Fifth Mezzanine Borrower and (f) the Sixth Mezzanine Borrower.

          " Other Mezzanine Debt Service " shall mean, with respect to any particular period of time, the sum of (a) the First Mezzanine Debt Service, (b) the Second Mezzanine Debt Service, (c) the Third Mezzanine Debt Service, (d) the Fourth Mezzanine Debt Service, (e) the Fifth Mezzanine Debt Service and (f) the Sixth Mezzanine Debt Service.

          " Other Mezzanine Loan " shall mean, individually or collectively, as the context may require, (a) the First Mezzanine Loan, (b) the Second Mezzanine Loan, (c) the Third Mezzanine Loan, (d) the Fourth Mezzanine Loan, (e) the Fifth Mezzanine Loan and (f) the Sixth Mezzanine Loan.

          " Other Mezzanine Loan Agreement " shall mean, individually or collectively, as the context may require, (a) the First Mezzanine Loan Agreement, (b) the Second Mezzanine Loan Agreement, (c) the Third Mezzanine Loan Agreement, (d) the Fourth Mezzanine Loan Agreement, (e) the Fifth Mezzanine Loan Agreement and (f) the Sixth Mezzanine Loan Agreement.

          " Other Mezzanine Loan Documents " shall mean, individually or collectively, as the context may require, (a) the First Mezzanine Loan Documents, (b) the Second Mezzanine Loan Documents, (c) the Third Mezzanine Loan Documents, (d) the Fourth Mezzanine Loan Documents, (e) the Fifth Mezzanine Loan Documents and (f) the Sixth Mezzanine Loan Documents.

          " Other Mezzanine Release Amount " shall mean, with respect to any Individual Property, the sum of (a) the First Mezzanine Release Amount applicable to such Individual Property, (b) the Second Mezzanine Release Amount applicable to such Individual Property, (c) the Third Mezzanine Release Amount applicable to such Individual Property, (d) the Fourth Mezzanine Release Amount applicable to such Individual Property, (e) the Fifth Mezzanine Release Amount applicable to such Individual Property and (f) the Sixth Mezzanine Release Amount applicable to such Individual Property.

          " Other Taxes " shall have the meaning set forth in Section 2.2.9 .

          " Payment Date " shall mean the ninth (9th) day of each calendar month during the term of the Loan.

          " Permitted Encumbrances " shall mean, with respect to an Individual Property, collectively, (a) the Liens and security interests created by the Mortgage Loan Documents, the Senior Mezzanine Loan Documents and the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policies relating to such Individual Property or any part thereof, (c) Liens for which the underlying obligations have been satisfied and which are not taken as exceptions to the Title Insurance Policies, (d) Liens, if any, for Taxes imposed by any Governmental Authority not yet delinquent, (e) the Master Lease, (f) the Operating Lease, and (g) such other title and survey exceptions as Lender has approved or may approve in writing in Lender's reasonable discretion.

          " Permitted Investments " shall have the meaning set forth in the Cash Management Agreement.

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•         " Permitted Release " shall mean the release of a Release Property which is not a Limited Cure Release, an Affected Property Release or an Unlicensed Facility Release and which is effectuated in accordance with the applicable provisions of Section 2.6 hereof; provided that the Allocated Loan Amount for such Release Property, when taken together with the Allocated Loan Amounts in respect of all Release Properties previously released pursuant to Permitted Releases, Limited Cure Releases, Affected Property Releases and Unlicensed Facility Releases does not exceed, in the aggregate, the Permitted Release Threshold.

          " Permitted Release Amount " shall mean, with respect to a Permitted Release, if the Allocated Loan Amount for the Release Property being released pursuant to such Permitted Release, when aggregated with the Allocated Loan Amounts for any Release Property(ies) previously released pursuant to a Permitted Release, a Limited Cure Release, an Unlicensed Facility Release or an Affected Property Release, or concurrently being released pursuant to a Permitted Release, a Limited Cure Release, an Unlicensed Facility Release or an Affected Property Release, (a) is less than or equal to fifteen percent (15%) of the original principal amount of the Loan, 100% of the Allocated Loan Amount of such Release Property, (b) is greater than fifteen percent (15%) but less than or equal to thirty percent (30%) of the original principal amount of the Loan, 110% of the Allocated Loan Amount of such Release Property, and (c) is greater than thirty percent (30%) of the original principal amount of the Loan but less than or equal to the Permitted Release Threshold, 115% of the Allocated Loan Amount of such Release Property.

          " Permitted Release Threshold " shall mean seventy percent (70%) of the original principal amount of the Loan.

          " Person " shall mean any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

          " Personal Property " shall have the meaning set forth in the granting clauses of the Mortgage with respect to each Individual Property.

          " Physical Condition Report " shall mean, with respect to each Individual Property, a report prepared by a company satisfactory to Lender regarding the physical condition of such Individual Property, satisfactory in form and substance to Lender in its reasonable discretion.

          " Pledge " shall mean a voluntary or involuntary transfer, encumbrance, pledge, mortgage, hypothecation, encumbrance, financing of, grant of a security interest in or other collateral assignment of a legal or beneficial interest.

          " Pledge Agreement " shall have the meaning set forth in the Recitals hereto.

          " Policies " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Pre-Approved Accounting Firm " shall mean any of (a) Deloitte & Touche LLP, (b) KPMG LLP, (c) PricewaterhouseCoopers LLP and (d) Ernst & Young LLP.

          " Prescribed Laws " shall mean, collectively, (a) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act), as amended, (b) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., (d) the International Emergency Economic Power Act, 50 U.S.C. §1701 et seq. and (e) all other material Legal Requirements relating to money laundering or terrorism.

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•         " Prime Rate " shall mean the annual rate of interest publicly announced by JPMorgan in New York, New York, as its base rate, as such rate shall change from time to time. If JPMorgan ceases to announce a base rate, the Prime Rate shall mean the rate of interest published in The Wall Street Journal from time to time as the "Prime Rate." If more than one "Prime Rate" is published in The Wall Street Journal for a day, the average of such "Prime Rates" shall be used, and such average shall be rounded up to the nearest one-thousandth of one percent (0.001%). If The Wall Street Journal ceases to publish the "Prime Rate," Lender shall select an equivalent publication that publishes such "Prime Rate," and if such "Prime Rates" are no longer generally published or are limited, regulated or administered by a governmental or quasigovernmental body, then Lender shall reasonably select a comparable interest rate index.

          " Prime Rate Loan " shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon the Prime Rate.

          " Prime Rate Spread " shall mean the difference (expressed as the number of basis points) between (a) the LIBOR Interest Rate plus the Spread on the date LIBOR was last applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to the Loan; provided , however , in no event shall such difference be a negative number.

          " Principal " shall mean the Special Purpose Entity corporation or limited liability company, if any, which is (a) the managing member of Borrower, in the event that Borrower is a limited liability company, or (b) a general partner of Borrower, in the event that Borrower is a limited partnership.

          " Prior Owner " shall mean each and every Person (i) which has ever previously owned, directly or indirectly, a fee or leasehold interest in any one or more of the Individual Properties, or (ii) which is an Affiliate of any Person described in clause (i) above.

          " Property " or " Properties " shall mean, collectively, each and every Individual Property set forth on Schedule I . For the avoidance of doubt, the term "Property" shall (a) exclude (i) any Release Property from and after the same has been released pursuant to Section 2.6.1 hereof and (ii) any Substituted Property from and after the substitution thereof in accordance with Section 2.5 hereof and (b) include each Substitute Property from and after the substitution thereof in accordance with Section 2.5 hereof.

          " Property Uncross " shall have the meaning set forth in Section 9.8 hereof.

          " Provided Information " shall mean any and all financial and other information provided at any time by, or on behalf of, and at the direction of, any Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner, any Principal or Guarantor, or any Affiliate of any of the foregoing, with respect to the Collateral, the Senior Mezzanine Collateral, the Properties, Borrower, Senior Mezzanine Borrower, Maryland Owner, Mortgage Borrower, Master Tenant, Operator, Principal and/or Guarantor.

          " Public Information " shall have the meaning set forth in Section 10.25 hereof.

          " Qualified Operator " shall mean, with respect to each Individual Property, (a) the Operator of such Individual Property as of the Closing Date, (b) HCR Healthcare, LLC or any direct or indirect subsidiary thereof or (c) an operator possessing experience in operating and managing health care properties similar in size, scope, use and value as such Individual Property or such Substitute Property, as the case may be, which operator, in the case of clauses (a), (b) and (c) above, is a Special Purpose Entity (Operator), is licensed, as applicable, to operate such Individual Property or Substitute Property, as the case may be, and shall otherwise be reasonably acceptable to Mortgage Lender and each Designated Mezzanine Lender.

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•         " Qualified Transferee " shall mean a Transferee which is:

  •           (i)  a pension fund, pension trust, pension account, private equity fund or opportunity fund that immediately prior to such transfer either (A) has total real estate assets with a market value of at least $2,000,000,000 or (B) at the time of such proposed transfer, satisfies the Alternative Transferee Standard;

             (ii)  a pension fund advisor, private equity fund or opportunity fund acting on behalf of one or more pension funds that in the aggregate, satisfies the requirements of clause (i) of this definition;

            (iii)  an insurance company which is subject to supervision by the insurance commissioner, or a similar official or agency, of a state or territory of the United States (including the District of Columbia) (i) with a net worth, determined as of a date no more than six (6) months prior to the date of the proposed transfer, of at least $2,000,000,000, and (ii) who, either (A) immediately prior to such proposed transfer, controls, directly and/or indirectly, real estate assets with a market value of at least $2,000,000,000 (exclusive of the Property), or (B) at the time of such proposed transfer, satisfies the Alternative Transferee Standard;

            (iv)  an association organized under the banking laws of the United States or any state or territory of the United States (including the District of Columbia) (i) with a combined capital surplus of at least $2,000,000,000, and (ii) who, either (A) immediately prior to such transfer, controls, directly or indirectly, real estate assets with a market value of at least $2,000,000,000 (exclusive of the Property), or (B) at the time of such transfer, satisfies the Alternative Transferee Standard;

             (v)  a real estate investment trust or commercial credit corporation (i) with a net worth, determined as of a date no more than six (6) months prior to the date of the proposed transfer, of at least $2,000,000,000, and (ii) who, either (A) immediately prior to such proposed transfer, controls, directly and/or indirectly, real estate assets with a market value of at least $2,000,000,000 (exclusive of the Property), or (B) at the time of such proposed transfer, satisfies the Alternative Transferee Standard;

            (vi)  an investment bank, money management firm or "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended (i) with a combined capital surplus of at least $2,000,000,000, and (ii) who, either (A) immediately prior to such transfer, controls, directly or indirectly, real estate assets with a market value of at least $2,000,000,000 (exclusive of the Property) or (B) at the time of such proposed transfer, satisfies the Alternative Transferee Standard;

           (vii)  any Person that is wholly owned (directly or indirectly) by a Person described in clauses (i) through (vi) above; or

          (viii)  any Person reasonably approved by each Designated Mezzanine Lender.

          " Quarterly CapEx Budget " shall have the meaning set forth in Section 5.1.11(f) hereof.

          " ratably " shall mean, with respect to the Mortgage Lender and each Mezzanine Lender, its respective share of any payment or amount, including but not limited to, disbursements of Net Proceeds, measured as a fraction (a) the numerator of which shall be the outstanding principal amount of the Mortgage Loan or the applicable Mezzanine Loan and (b) the denominator of which shall be the aggregate of the outstanding principal amount of the Mortgage Loan and each Mezzanine Loan, in each case as of any date of determination.

          " Rating Agencies " shall mean each of S&P, Moody's and Fitch, or any other nationally recognized statistical rating agency that has been approved by Lender.

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•         " Registrar " shall have the meaning set forth in Section 10.24 hereof.

          " Registered Loan " shall have the meaning set forth in Section 10.24 hereof.

          " Regulation AB " shall mean Regulation AB under the Securities Act and the Exchange Act, as such Regulation may be amended from time to time.

          " REIT " means a "real estate investment trust", as such term in defined in Section 856 of the Code.

          " REIT Lender " shall mean any Lender that is a REIT or is an Affiliate of a REIT.

          " REIT Representations and Covenants " shall mean those certain representations and covenants contained in Section 5.1.8 hereof.

          " Related Loan " shall mean a loan made to an Affiliate of Borrower or secured by a Related Property, that is included in a Securitization with the Loan.

          " Related Property " shall mean a parcel of real property, together with improvements thereon and personal property related thereto, that is "related", within the meaning of the definition of Significant Obligor, to one or more of the Individual Properties.

          " Release Amount " shall mean (a) with respect to a Release Property pursuant to a Permitted Release, the applicable Permitted Release Amount, (b) with respect to a Release Property pursuant to a Limited Cure Release, the Limited Cure Release Amount, (c) with respect to a Release Property pursuant to an Affected Property Release, the Affected Property Release Amount, and (d) with respect to a Release Property pursuant to an Unlicensed Facility Release, the Unlicensed Facility Release Amount.

          " Release Property " shall have the meaning set forth in Section 2.6.1 hereof.

          " Remaining Costs " shall have the meaning set forth in Section 5.1.23 hereof.

          " Rent Instruction " shall mean that certain obligation contained in the Master Lease with respect to payments of Rent under the Master Lease directly into the Cash Management Account.

          " Rents " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Reorganization Documents " shall mean, collectively, the following instruments being entered into on or about the date hereof among Borrower, Manor Care or their respective Affiliates: (i) the MILA, (ii) contribution agreements, pursuant to which the Properties were contributed to Borrower and Maryland Owner and certain other entities that were merged with and into Borrower, (iii) merger agreements, merging certain Affiliates of Manor Care with and into Manor Care or Affiliates of Manor Care, (iv) the Master Loan Proceeds Distribution Agreement, pursuant to which Borrower and Maryland Owner will distribute the proceeds of the Loan, (v) the Purchase and Novation Agreements among Manor Care and certain of its Affiliates, (vi) the Receivables Purchase Agreement between Manor Care and certain of its Affiliates, (vii) contribution agreements pursuant to which operating assets or equity interests in certain Affiliates of Manor Care were contributed to Affiliates of Manor Care, and (viii) various deeds and assignments of leases entered into in connection with the contribution agreements referred to in (ii) above.

          " Replacement Interest Rate Cap Agreement " shall mean an interest rate cap agreement from an Acceptable Counterparty delivered by Borrower pursuant to Section 2.2.8(c) or Section 2.4.4 hereof, all of the material terms of which interest rate cap agreement shall be substantially similar to those of the then-effective Interest Rate Cap Agreement, except that (a) the notional amount thereof shall be equal to the outstanding principal amount of the Loan on (i) in the case of an interest rate cap agreement delivered pursuant to Section 2.2.8 hereof, the Cap Replacement

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  Delivery Date or (ii) in the case of an interest rate cap agreement delivered pursuant to Section 2.4.4 hereof, the first day following the Mandatory Prepayment Date; (b) the effective date thereof shall be (i) in the case of an interest rate cap agreement delivered pursuant to Section 2.2.8 hereof, the Cap Replacement Delivery Date or (ii) in the case of an interest rate cap agreement delivered pursuant to Section 2.4.4 hereof, the first day following the Mandatory Prepayment Date; and (c) the expiration date thereof shall be the last day of the Interest Period corresponding to the Maturity Date; provided , however , that to the extent any such interest rate cap agreement does not meet the foregoing requirements, a " Replacement Interest Rate Cap Agreement " shall be delivered to Lender and shall otherwise be reasonably acceptable to Lender.

          " Replacement Reserve Account " shall have the meaning set forth in Section 7.3.1 hereof.

          " Replacement Reserve Funds " shall have the meaning set forth in Section 7.3.1 hereof.

          " Replacement Reserve Deposit " shall have the meaning set forth in Section 7.3.1 hereof.

          " Replacements " shall have the meaning set forth in Section 7.3.1 hereof.

          " Required Annual Replacement Expenditure " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Required Opinion " shall have the meaning set forth in Section 5.1.34 hereof.

          " Required Repairs " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Requisite Operators " shall have the meaning specified in Section 9.3(b) .

          " Reserve Accounts " shall mean, collectively, (a) the Tax and Insurance Reserve Account, (b) the Replacement Reserve Account, (c) the Low DSCR Interest Floor Reserve Account, (d) the Low DSCR General Reserve Account and (e) any other reserve account established pursuant to the Loan Documents.

          " Reserve Funds " shall mean, collectively, (a) the Tax and Insurance Funds, (b) the Replacement Reserve Funds, (c) the Low DSCR Reserve Funds and (d) any other reserve fund established pursuant to the Loan Documents.

          " Reserve Requirements " shall mean with respect to any Interest Period, the maximum rate of all reserve requirements (including, without limitation, all basic, marginal, emergency, supplemental, special or other reserves and taking into account any transitional adjustments or other schedule changes in reserve requirements during the Interest Period) which are imposed under Regulation D on eurocurrency liabilities (or against any other category of liabilities which includes deposits by reference to which LIBOR is determined or against any category of extensions of credit or other assets which includes loans by a non-United States office of a depository institution to United States residents or loans which charge interest at a rate determined by reference to such deposits) during the Interest Period and which are applicable to member banks of the Federal Reserve System with deposits exceeding one billion dollars, but without benefit or credit of proration, exemptions or offsets that might otherwise be available from time to time under Regulation D. The determination of the Reserve Requirements shall be based on the assumption that Lender funded 100% of the Loan in the interbank eurodollar market. In the event of any change in the rate of such Reserve Requirements under Regulation D during the Interest Period, or any variation in such requirements based upon amounts or kinds of assets or liabilities, or other factors, including, without limitation, the imposition of Reserve Requirements, or differing Reserve Requirements, on one or more but not all of the holders of the Loan or any participation therein, Lender may use any reasonable averaging and/or attribution methods which it deems necessary for determining the rate of such Reserve Requirements which shall be used in the

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  computation of the Reserve Requirements. Lender's computation of same shall be final absent manifest error.

          " Restoration " shall mean the repair and restoration of an Individual Property after a Casualty or Condemnation as nearly as possible to the condition the Individual Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.

          " Restoration Threshold " shall mean, with respect to any Individual Property, an amount equal to the greater of (i) Five Million Dollars ($5,000,000.00) and (ii) five percent (5%) of the Allocated Loan Amount (as defined in the Mortgage Loan Agreement) of such Individual Property.

          " Restricted Party " shall mean, collectively (a) Manor Care, each Other Mezzanine Borrower, Borrower, Mortgage Borrower, Maryland Owner, Principal, Guarantor, Master Tenant or any Operator and (b) any shareholder, partner, member (other than the springing member or special member), direct or indirect legal or beneficial owner of any of the foregoing.

          " Sale " shall mean a voluntary or involuntary sale, conveyance, assignment or other Transfer of a legal or beneficial interest in the Property, other than a Pledge.

          " S&P " shall mean Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.

          " Second Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Second Mezzanine Note.

          " Second Mezzanine Deposit Account " shall have the meaning set forth in the Second Mezzanine Loan Agreement.

          " Second Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the Second Mezzanine Loan Agreement.

          " Second Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " Second Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the Second Mezzanine Loan Agreement.

          " Section 2.2.9 Certificate " shall have the meaning set forth in Section 2.2.9 .

          " Securities " shall have the meaning set forth in Section 9.1 hereof.

          " Securities Act " shall have the meaning set forth in Section 9.2(a) hereof.

          " Securitization " shall have the meaning set forth in Section 9.1 hereof.

          " Senior Mezzanine Borrower " shall mean, individually or collectively, as the context may require, First Mezzanine Borrower, Second Mezzanine Borrower, Third Mezzanine Borrower, Fourth Mezzanine Borrower, Fifth Mezzanine Borrower and/or Sixth Mezzanine Borrower.

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•         " Senior Mezzanine Collateral " shall mean, individually or collectively, as the context may require, the "Collateral" under and as defined in the First Mezzanine Loan Agreement, the Second Mezzanine Loan Agreement, the Third Mezzanine Loan Agreement, the Fourth Mezzanine Loan Agreement, the Fifth Mezzanine Loan Agreement and/or the Sixth Mezzanine Loan Agreement.

          " Senior Mezzanine Deposit Account " shall mean, individually or collectively, as the context may require, the First Mezzanine Deposit Account, the Second Mezzanine Deposit Account, the Third Mezzanine Deposit Account, the Fourth Mezzanine Deposit Account, the Fifth Mezzanine Deposit Account and/or the Sixth Mezzanine Deposit Account.

          " Senior Mezzanine Lender " shall mean, individually or collectively, as the context may require, First Mezzanine Lender, Second Mezzanine Lender, Third Mezzanine Lender, the Fourth Mezzanine Lender, the Fifth Mezzanine Lender and/or the Sixth Mezzanine Lender.

          " Senior Mezzanine Loan " shall mean, individually or collectively, as the context may require, the First Mezzanine Loan, the Second Mezzanine Loan, the Third Mezzanine Loan, the Fourth Mezzanine Loan, the Fifth Mezzanine Loan and/or the Sixth Mezzanine Loan.

          " Senior Mezzanine Loan Agreement " shall mean, individually or collectively, as the context may require, the First Mezzanine Loan Agreement, the Second Mezzanine Loan Agreement, the Third Mezzanine Loan Agreement, the Fourth Mezzanine Loan Agreement, the Fifth Mezzanine Loan Agreement and/or the Sixth Mezzanine Loan Agreement.

          " Senior Mezzanine Loan Documents " shall mean, individually or collectively, as the context may require, the "Loan Documents" under and as defined in the First Mezzanine Loan Agreement, the Second Mezzanine Loan Agreement, the Third Mezzanine Loan Agreement, the Fourth Mezzanine Loan Agreement, the Fifth Mezzanine Loan Agreement and/or the Sixth Mezzanine Loan Agreement.

          " Senior Mezzanine Loan Event of Defaul t" shall mean, individually or collectively, as the context may require, an "Event of Default" under and as defined in the First Mezzanine Loan Agreement, the Second Mezzanine Loan Agreement, the Third Mezzanine Loan Agreement, the Fourth Mezzanine Loan Agreement, the Fifth Mezzanine Loan Agreement and/or the Sixth mezzanine Loan Agreement.

          " Servicer " shall have the meaning set forth in Section 9.4 hereof.

          " Servicing Agreement " shall have the meaning set forth in Section 9.4 hereof.

          " Seventh Mezzanine Deposit Account " shall have the meaning set forth in the Cash Management Agreement.

          " Seventh Mezzanine Sub-accounts " shall have the meaning set forth in the Cash Management Agreement.

          " Severed Loan Documents " shall have the meaning set forth in Section 8.2(c) hereof.

          " Significant Obligor " shall have the meaning set forth in Item 1101(k) of Regulation AB under the Securities Act.

          " Sixth Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Borrower Company Agreement " shall mean, individually and collectively, the limited liability company agreements of each entity making up Sixth Mezzanine Borrower.

          " Sixth Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Sixth Mezzanine Note.

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•         " Sixth Mezzanine Deposit Account " shall have the meaning set forth in the Sixth Mezzanine Loan Agreement.

          " Sixth Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the Sixth Mezzanine Loan Agreement.

          " Sixth Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " Sixth Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the Sixth Mezzanine Loan Agreement.

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

          " Solvency Certificate " shall mean that certain solvency certificate dated the date hereof delivered by Manor Care in connection with the Merger and the Loan.

          " South Carolina Mortgage Borrower " shall mean, individually and collectively as the context requires, each Mortgage Borrower owning South Carolina Property.

          " South Carolina Conditions " shall mean (a) that all material approvals and consents have been obtained from all applicable Governmental Authorities and Health Care Authorities to increase the rent under each Operating Lease of a South Carolina Property to an amount equal to the aggregate of the rent then payable under each such Operating Lease and the management fee and all other compensation then payable (including escalations thereof) under the South Carolina Management Agreement applicable to such South Carolina Property, and to amend each such Operating Lease to be on substantially the same terms and conditions as the Operating Leases affecting the Properties located outside of South Carolina, (b) each Operating Lease of a South Carolina Property has been amended as contemplated by clause (a) above, (c) the Master Lease has been amended, if necessary, to increase the rent payable thereunder by an amount equal to the aggregate increase in the rent payable under the Operating Leases for the South Carolina Properties pursuant to clause (b) above, and (d) South Carolina Operators and Master Tenant have provided Lender upon request with estoppel certificates reasonably acceptable to Lender confirming such rent increases and amendments, together with copies of such documents.

          " South Carolina Management Agreement " shall mean, collectively and individually as the context shall require, those certain Management Agreements, each dated as of the Closing Date, entered into with respect to each Individual Property that is located in the State of South Carolina, between the South Carolina Operator that is the Operator of the applicable Individual Property and Master Tenant.

          " South Carolina Operator " shall mean, individually and collectively as the context requires, each Operator that is the Operator of a South Carolina Property.

          " South Carolina Property " shall mean, individually and collectively as the context shall require, an Individual Property that is located in the State of South Carolina as listed on Schedule V attached hereto. "South Carolina Property" shall not include any Substitute Property located in the State of South Carolina.

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•         " Special Purpose Entity " shall mean (a) with respect to any Borrower, Special Purpose Entity (Borrower), (b) with respect to any Operator, Special Purpose Entity (Operator), (c) with respect to the Master Tenant, Special Purpose Entity (Master Tenant), and (d) with respect to any Person other than Borrower, Operator and Master Tenant, the definition of "Special Purpose Entity (Borrower)" shall apply mutatis mutandis .

          " Special Purpose Entity (Borrower) " shall mean a limited liability company which, except to the extent required by the Loan Documents, at all times since its formation, and on and after the date hereof until the Debt is paid in full:

  •         (a)   is organized solely for the purpose of (i) acquiring, owning, holding, managing and otherwise dealing with its limited liability interest, the Sixth Mezzanine Borrower, and engaging in such actions and exercising such authority as are consistent with being the sole member of such Persons, (ii) entering into and performing its obligations under the Loan Documents (including, without limitation, borrowing money thereunder and incurring the obligations thereunder) and the Corporate Services Agreement to which it is a party dated as of the date hereof by and among itself, HCR Manor Care Services, Inc. and certain other of its Affiliates, (iii) selling, transferring, servicing, conveying, disposing of, pledging, assigning, borrowing money against, financing, refinancing or otherwise dealing with the Collateral to the extent permitted under the Loan Documents; and (iv) engaging in any lawful act or activity and exercising any powers permitted to limited liability companies organized under the laws of the State of Delaware that are related or incidental to and necessary, convenient or advisable for the accomplishment of the above-mentioned purposes, including entering into interest rate cap agreements;

            (b)   is not engaged and will not engage, directly or indirectly, in any business other than those activities required or permitted to be performed under the Loan Documents, including pursuant to this definition of "Special Purpose Entity" and Subsection (a) above, as applicable;

            (c)   does not have and will not have any assets other than those (i) equity interests of the Sixth Mezzanine Borrower, the Collateral, cash, cash equivalents and investment grade securities and (ii) incidental personal property necessary for the ownership or operation of the Collateral;

            (d)   to the fullest extent permitted by law, has not engaged, and will not engage in, any dissolution, liquidation, consolidation, merger, sale or transfer of all or substantially all of its assets, except as permitted by the Loan Documents;

            (e)   if such entity is a limited liability company with only one member, is a limited liability company organized in the State of Delaware that has (i) as its only member a non-managing member, (ii) at least two (2) Independent Directors (Borrower) and has not caused or allowed and will not cause or allow the board of directors of such entity to take any action requiring the unanimous affirmative vote of one hundred percent (100%) of the directors and the Independent Directors (Borrower) unless two Independent Directors (Borrower) shall have participated in such vote and (iii) at least two (2) springing members, each of which shall be either an individual or a "special purpose corporation" whose stock is one hundred percent (100%) owned by the sole member of such entity, either one of whom will become the non-managing member of such entity upon the dissolution of the existing non-managing member;

            (f)    has articles of organization, a certificate of formation and/or an operating agreement which provide that such entity will not: (A) dissolve, merge, liquidate, consolidate; (B) sell all or substantially all of its assets except as permitted pursuant to the Loan Documents; (C) engage in any other business activity, or amend its organizational documents with respect

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• • 
    

    to the matters set forth in this definition without the consent of Lender; or (D) without the affirmative vote of two Independent Directors (Borrower) and of all other directors of the corporation (that is the managing or co-managing member of such entity), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other Person in which it has a direct or indirect legal or beneficial ownership interest;

            (g)   is maintaining and will maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided , however , that the foregoing shall not require its member to make any additional capital contributions;

            (h)   intentionally omitted;

            (i)    has maintained and will maintain its bank accounts, books and records separate from any other Person;

            (j)    except as contemplated or permitted by the Loan Documents, has not commingled and will not commingle its assets with those of any other Person;

            (k)   has conducted and will conduct its business only in its own name;

            (l)    has maintained and will maintain its financial statements, showing its assets and liabilities separate and apart from any other Person and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other Person; provided , however , that that each of the Borrower's assets may be included in a consolidated financial statement of any of their Affiliates provided that (i) to the extent consistent with GAAP, any such consolidated financial statements contain a note indicating that each of the Borrower's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (ii) such assets shall also be listed on each of the Borrower's own separate balance sheet;

            (m)  except to the extent permitted by the Loan Documents, has paid and will pay its own liabilities and expenses, including the salaries of its own employees, if any, out of its own funds and has maintained and will maintain a number of employees, if any, that Borrower believes to be reasonably sufficient to conduct its business in light of its contemplated business purpose;

            (n)   has observed and will observe all limited liability company formalities necessary to maintain its separate existence;

            (o)   has and will have no Indebtedness other than (i) the Loan, (ii) liabilities incurred by Borrower in the ordinary course of business relating to the ownership of the Collateral and the routine administration of Borrower and Sixth Mezzanine Borrower, in amounts not to exceed, $100,000, which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note, and which amounts are normal and reasonable under the circumstances, and (iv) such other liabilities as are expressly permitted pursuant to this Agreement;

            (p)   except as contemplated or permitted by the Loan Documents, has not and will not guarantee or become obligated for the debts of any other Person or hold out its credit or assets as being available to pay the obligations of any other Person;

            (q)   except as contemplated or permitted by the Loan Documents, has not and will not acquire obligations or securities of its members or any other Affiliate, except for the Collateral;

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• •         (r)   has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including for shared office space and services performed by any employee of an Affiliate;

            (s)   except as contemplated or permitted by the Loan Documents, has not pledged and will not pledge its assets to secure the obligations of any other Person;

            (t)    has held itself out and will hold itself out to the public and all other Persons and identify itself as a legal entity separate from its member and any other Person and not as a division or department of any other Person;

            (u)   shall not make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than the Sixth Mezzanine Borrower), except that the Borrower may invest in those investments permitted under the Loan Documents and may make any advance required or permitted to be made pursuant to any provisions of the Loan Documents and permit the same to remain outstanding in accordance with such provisions;

            (v)   has filed and shall file its own tax returns, separate from those of any other Person except (i) to the extent that it is treated as a "disregarded entity" for tax purposes and is not required to file tax returns under applicable law or (ii) to the extent required by applicable law, and pay any taxes so required to be paid under applicable law from its own funds;

            (w)  except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents and properly reflected on its books and records, and except transactions permitted by the Loan Documents, not enter into any transaction with any of its Affiliate except on commercially reasonable terms similar to those available to unaffiliated parties in an arm's-length transaction;

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

            (y)   does not and will not have any of its obligations guaranteed by any Affiliate, except as contemplated by the Loan Documents;

            (z)   if such entity is a Delaware limited liability company, it shall have its own board of directors or board of managers, and shall cause such board to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe all other limited liability company formalities;

            (aa) has complied and will comply with all of the terms and provisions contained in its organizational documents. The statement of facts contained in its organizational documents are true and correct and will remain true and correct;

            (bb) except for the Senior Mezzanine Borrowers, Mortgage Borrowers (other than Maryland Borrower) and Maryland Owner, as applicable, has not and will not form, acquire, or hold any subsidiary or own any equity interest in any other entity;

            (cc) has used and shall use separate stationery, invoices and checks bearing its own name;

            (dd) except as contemplated or permitted by the Loan Documents, shall not buy or hold evidence of indebtedness issued by any other Person (other than cash, cash equivalents, certificates of deposit, interests in bank accounts or investment-grade securities);

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• •         (ee) with respect to all capital contributions and distributions, has duly authorized the receipt or making of such capital contributions and distributions and has duly recorded such action in its books and records, in accordance with applicable organizational documents and applicable law; and

            (ff)  cause its directors, officers, agents and other representatives to act at all times with respect to the Borrower consistently and in furtherance of the foregoing

          " Special Purpose Entity (Master Tenant) " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Special Purpose Entity (Operator) " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Spread " shall mean four percent (4.0%) per annum.

          " Spread Maintenance Premium " shall mean, with respect to each repayment of any of the outstanding principal amount of the Loan prior to the Lockout Release Date, an amount equal to the product of (i) the principal amount of the Loan to be prepaid, (ii) the Spread, (iii) the number of days from and including the date of prepayment (1) through and including the Mandatory Prepayment Date, unless Borrower satisfies the terms and provisions of Section 2.4.4 hereof and is not required to prepay the Debt on the Mandatory Prepayment Date, in which case (2) through and including the Maturity Date, and (iv) 1/360.

          " State " shall mean, with respect to an Individual Property, the State or Commonwealth in which such Individual Property or any part thereof is located.

          " Strike Price " shall mean five and one quarter percent (5.25%).

          " Subordinations of South Carolina Management Agreement " shall mean, individually and collectively as the context shall require, those certain Subordinations of Management Agreement, dated as of the date hereof, made by the South Carolina Operators in favor of Lender and consented to by Master Tenant and the South Carolina Mortgage Borrowers.

          " Substitute Property " shall have the meaning set forth in Section 2.5 hereof.

          " Substitute Property Borrower" shall have the meaning set forth in the Mortgage Loan Agreement.

          " Substitute Property Lien Documents " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Substitute Property Operator " shall have the meaning set forth in the Mortgage Loan Agreement.

          " Substituted Property " shall have the meaning set forth in Section 2.5 hereof.

          " Substitution Effective Date " shall have the meaning set forth in Section 2.5 hereof.

          " Survey " shall mean, with respect to each Individual Property, the survey of such Individual Property reviewed and reasonably approved by Lender prior to the Closing Date and containing a certification to Lender customary for loan transactions similar to the Loan.

          " Tax and Insurance Reserve Account " shall have the meaning set forth in Section 7.2 hereof.

          " Tax and Insurance Reserve Funds " shall have the meaning set forth in Section 7.2 hereof.

          " Taxes " shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against any Individual Property or part thereof.

          " Third Mezzanine Borrower " shall have the meaning set forth in the Recitals hereof.

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•         " Third Mezzanine Debt Service " shall mean, with respect to any particular period of time, scheduled interest payments due under the Third Mezzanine Note.

          " Third Mezzanine Deposit Account " shall have the meaning set forth in the Third Mezzanine Loan Agreement.

          " Third Mezzanine Lender " shall have the meaning set forth in the Recitals hereof.

          " Third Mezzanine Loan " shall have the meaning set forth in the Recitals hereof.

          " Third Mezzanine Loan Agreement " shall have the meaning set forth in the Recitals hereof.

          " Third Mezzanine Loan Documents " shall mean the "Loan Documents" under and as defined in the Third Mezzanine Loan Agreement.

          " Third Mezzanine Note " shall have the meaning set forth in the Recitals hereof.

          " Third Mezzanine Noteholders " shall have the meaning set forth in the Recitals hereof.

          " Third Mezzanine Release Amount " shall mean the "Release Amount" under and as defined in the Third Mezzanine Loan Agreement.

          " Threshold Amount " shall have the meaning set forth in Section 5.1.23(a) hereof.

          " Title Insurance Policies " shall mean, with respect to each Individual Property, an ALTA mortgagee title insurance policy in a form customary for loan transactions similar to the Mortgage Loan (or, if an Individual Property is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted in such State and reasonably acceptable to Mortgage Lender), issued with respect to such Individual Property with endorsements customary in the jurisdiction where such Individual Property is located and insuring the lien of the Mortgage encumbering such Individual Property.

          " Transfer " shall have the meaning set forth in Section 5.2.10(b) hereof.

          " Transferee " shall have the meaning set forth in Section 5.2.10(e)(ii) hereof.

          " Trigger Event " shall mean that on any date of determination, the Debt Service Coverage Ratio for the prior calendar quarter was less than 1.10:1.0.

          " Trigger Period " shall mean a period commencing on the day after the last day of a calendar quarter with respect to which a Trigger Event has occurred and ending on the date on which Borrower establishes in accordance with Section 7.1.2 that the Debt Service Coverage Ratio for the calendar quarter occurring immediately prior to the calendar quarter in which such date occurs has been greater than or equal to 1.10:1.0.

          " True-Lease Opinion " shall mean that certain true lease opinion letter dated the date hereof delivered by Latham & Watkins LLP in connection with the Loan.

          " UCC " or " Uniform Commercial Code " shall mean the Uniform Commercial Code as in effect from time to time in the applicable State in which an Individual Property is located.

          " UCC Title Insurance Policy " shall mean, with respect to the Collateral pledged under the Pledge Agreement, a UCC title insurance policy in the form acceptable to Lender issued with respect to such Collateral and insuring the lien of the Pledge Agreement encumbering such Collateral.

          " Unlicensed Facility Release " shall have the meaning set forth in Section 5.1.33 hereof.

          " Unlicensed Facility Release Amount " shall have the meaning set forth in Section 5.1.33 hereof.

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•         " U.S. Obligations " shall mean non-redeemable securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are direct obligations of the United States of America for the payment of which its full faith and credit is pledged.

          " Veterans Administration " shall mean the United States Department of Veterans Affairs.

         Section 1.2.     Principles of Construction.     All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified. All uses of the word "including" shall mean "including, without limitation" unless the context shall indicate otherwise. Unless otherwise specified, the words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined. With respect to cross-references contained herein to the Mortgage Loan Documents or the Other Mezzanine Loan Documents or any Mortgage Loan Document or any Other Mezzanine Loan Document (including with respect to any cross-references to defined terms therein), unless otherwise specifically provided herein, such cross-references shall be with respect to the Mortgage Loan Documents or the Other Mezzanine Loan Documents or such Mortgage Loan Document or such Other Mezzanine Loan Document, as the case may be, in existence as of the date hereof, and no modification or amendment to such cross-referenced sections of the Mortgage Loan Documents or the Other Mezzanine Loan Documents or any Mortgage Loan Document or any Other Mezzanine Loan Document shall be binding upon Lender or Borrower unless Lender and Borrower shall have expressly agreed in writing to be bound by such modification or amendment. Notwithstanding anything stated herein to the contrary, any provisions in this Agreement cross-referencing provisions of the Mortgage Loan Agreement shall be effective notwithstanding the termination of the Mortgage Loan Agreement by payment in full of the Mortgage Loan or otherwise. The words "Borrower shall cause Mortgage Borrower to," "Borrower shall cause Mortgage Borrower not to," "Borrower shall cause Maryland Owner to," or "Borrower shall cause Maryland Owner not to," (or words of similar meaning) shall mean Borrower shall cause each Senior Mezzanine Borrower to cause Mortgage Borrower and/or Maryland Owner, as applicable, so to act or not so to act, as applicable. The words "Borrower shall cause Operator to" or "Borrower shall not permit Operator to" or "Borrower shall cause Master Tenant to" (or words of similar meaning) shall mean Borrower shall cause Senior Mezzanine Borrower to cause Mortgage Borrower and Maryland Owner to cause Master Tenant to cause Operator, as the case may be, to so act or not to so act, as applicable.

         II.     GENERAL TERMS     

         Section 2.1.     Loan Commitment; Disbursement to Borrower.     

         2.1.1.     Agreement to Lend and Borrow.     Subject to and upon the terms and conditions set forth herein, the Noteholders hereby agree to make, and Borrower hereby agrees to accept, the Loan on the Closing Date.

         2.1.2.     Single Disbursement to Borrower.     The principal amount of the Loan shall be advanced to Borrower in one advance on the Closing Date. Any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed.

         2.1.3.     The Note and Loan Documents.     The Loan shall be evidenced by the Note and secured by the Pledge Agreement and the other Loan Documents.

         2.1.4.     Use of Proceeds.     Borrower shall use the proceeds of the Loan solely to (a) make an equity contribution to Mortgage Borrower and Maryland Owner through Senior Mezzanine Borrower in order to cause Mortgage Borrower and Maryland Owner to use such amounts for any use permitted pursuant to Section 2.1.4 of the Mortgage Loan Agreement, (b) pay costs and expenses incurred in connection

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with the closing of the Loan, as approved by Lender and (c) distribute the balance, if any, at Borrower's option in whole or in part to Borrower's members.

         Section 2.2.     Interest Rate.     

         2.2.1.     Intentionally Omitted.     

         2.2.2.     Interest Rate.     Interest on the principal balance of the Note outstanding from time to time shall accrue from the Closing Date up to but (except in the case of an acceleration thereof) excluding the Maturity Date (including all interest that would accrue on the outstanding principal balance of the Loan through the end of the Interest Period during which the Maturity Date occurs in the event of an acceleration thereof even if such period extends beyond the Maturity Date) at the Applicable Interest Rate or the Default Rate as provided herein, if applicable. Interest on the outstanding principal balance of the Loan existing on the commencement of an Interest Period shall accrue for the entire Interest Period and shall be owed by Borrower for the entire Interest Period regardless of whether any principal portion of the Loan is repaid prior to the expiration of such Interest Period.

         2.2.3.     Interest Calculation.     Interest on the outstanding principal balance of the Note shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance.

         2.2.4.     Determination of Interest Rate.     (a) Subject to the terms and conditions of this Section 2.2.4 , the Loan shall be a LIBOR Loan and Borrower shall pay interest on the outstanding principal amount of the Note at the LIBOR Interest Rate plus the Spread for the applicable Interest Period. Any change in the rate of interest hereunder due to a change in the Applicable Interest Rate shall become effective as of the opening of business on the first day on which such change in the Applicable Interest Rate shall become effective. Each determination by Lender of the Applicable Interest Rate shall be presumptively correct, absent manifest error.

        (b)   In the event that Lender shall have determined (which determination shall be presumptively correct, absent manifest error) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such determination, confirmed in writing, to Borrower at least two (2) Business Days prior to the last day of the related Interest Period. If such notice is given, the related outstanding LIBOR Loan shall be converted, from and after the first day of the next succeeding Interest Period, to a Prime Rate Loan.

        (c)   If, pursuant to the terms of this Agreement, any portion of the Loan has been converted to a Prime Rate Loan and Lender shall determine (which determination shall be shall be presumptively correct absent manifest error) that the event(s) or circumstance(s) which resulted in such conversion shall no longer be applicable, Lender shall give notice by telephone of such determination, confirmed in writing, to Borrower at least one (1) Business Day prior to the last day of the related Interest Period. If such notice is given, the related outstanding Prime Rate Loan shall be converted to a LIBOR Loan from and after the first day of the next succeeding Interest Period.

        (d)   Intentionally Omitted.

        (e)   If any requirement of law or any change therein or in the interpretation or application thereof shall hereafter make it unlawful for Lender to make or maintain a LIBOR Loan as contemplated hereunder (i) the obligation of Lender hereunder to make a LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be canceled forthwith until such time as such change or interpretation ceases to exist and (ii) any outstanding LIBOR Loan shall be converted automatically to a Prime Rate Loan on the next succeeding Payment Date or within such earlier period as required by law. Borrower hereby agrees to promptly pay Lender, within ten (10) Business Days following written demand, any

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additional amounts necessary to compensate Lender for any reasonable costs actually incurred by Lender in making any conversion in accordance with this Agreement, including any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the LIBOR Loan hereunder. Lender's notice of such costs, as certified to Borrower, shall be presumptively correct absent manifest error; provided , however , within ten (10) Business Days after Borrower's written request, Lender shall furnish Borrower with a statement of such additional amounts, specifying same in reasonable detail, which statement shall be presumptively correct, absent manifest error.

        (f)    In the event that any change in any material requirement of law or in the interpretation or application thereof, or material compliance by Lender with any request or directive (whether or not having the force of law) hereafter issued from any central bank or other Governmental Authority (as used in this Section 2.2.4(f) , a "change or issuance"):

•           (i)  shall hereafter impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the determination of LIBOR hereunder;

           (ii)  shall hereafter have the effect of reducing the rate of return on Lender's capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender's policies with respect to capital adequacy) by any amount deemed by Lender to be material (other than, for the avoidance of doubt, as a consequence of the imposition or change in rate of a General Tax); or

          (iii)  shall hereafter impose on Lender any other condition (other than, for the avoidance of doubt, the imposition or change in rate of a General Tax) and the result of any of the foregoing is to increase the cost to Lender of making, renewing or maintaining loans or extensions of credit or to reduce any amount payable hereunder;

then, in any such case, Borrower shall promptly pay Lender, within ten (10) Business Days after demand and receipt of a reasonably detailed invoice, any additional amounts necessary to compensate Lender for such additional cost or reduced amount payable (including, for the avoidance of doubt, any General Taxes arising from or with respect to any such additional amounts) which Lender deems to be material as determined by Lender in its reasonable discretion. If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.4(f) , Lender shall provide Borrower with not less than ninety (90) days notice specifying in reasonable detail the event by reason of which it has become so entitled and the additional amount required to fully compensate Lender for such additional cost or reduced amount. A certificate as to any additional costs or amounts payable pursuant to the foregoing sentence submitted by Lender to Borrower shall be presumptively correct in the absence of manifest error. This provision shall survive payment of the Note and the satisfaction of all other obligations of Borrower under this Agreement and the Loan Documents, provided that such amount owed was incurred, or relates to any change or issuance that occurred, at the time the Debt was outstanding. Notwithstanding anything to the contrary in this Section 2.2.4 , Borrower shall not be required to compensate Lender pursuant to this Section 2.2.4 for any amounts incurred more than ninety (90) days prior to the date that Lender notifies Borrower of Lender's intention to claim compensation therefor.

        (g)   Borrower agrees to indemnify and defend Lender and to hold Lender harmless from and against any loss or expense which Lender sustains or actually incurs as a consequence of (i) any default by Borrower in payment of the principal of or interest on a LIBOR Loan, including any such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder, (ii) any prepayment (whether voluntary or mandatory) of the LIBOR Loan on a day that (A) is not a Payment Date or (B) is a Payment Date if Borrower did not give the prior notice of such prepayment required pursuant to the terms of this Agreement, including such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it

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in order to maintain the LIBOR Loan hereunder and (iii) the conversion (for any reason whatsoever, whether voluntary or involuntary) of the Applicable Interest Rate from the LIBOR Interest Rate plus the Spread to the Prime Rate plus the Prime Rate Spread with respect to any portion of the outstanding principal amount of the Loan then bearing interest at the LIBOR Interest Rate plus the Spread on a date other than the first day of an Interest Period, including such loss or expenses arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein referred to collectively as the " Breakage Costs "), provided , however , Borrower shall not be obligated to indemnify Lender for any cost or expense arising from Lender's willful misconduct or gross negligence. This provision shall survive payment of the Note in full and the satisfaction of all other obligations of Borrower under this Agreement and the other Loan Documents, provided that such amount owed was incurred at the time the Debt was outstanding.

         2.2.5.     Additional Costs.     Lender will use reasonable efforts (consistent with legal and regulatory restrictions) to maintain the availability of the LIBOR Loan and to avoid or reduce any increased or additional costs payable by Borrower under Section 2.2.4 , including, if requested by Borrower, a transfer or assignment of the Loan to a branch, office or Affiliate of Lender in another jurisdiction, or a redesignation of its lending office with respect to the Loan, in order to maintain the availability of the LIBOR Loan or to avoid or reduce such increased or additional costs, provided that the transfer or assignment or redesignation (a) would not result in any additional costs, expenses or risk to Lender that are not reimbursed by Borrower and (b) would not cause Lender to suffer any economic, legal or regulatory disadvantage as determined by Lender in its reasonable discretion.

         2.2.6.     Default Rate.     In the event that, and for so long as, any Event of Default shall be continuing, the outstanding principal balance of the Note and, to the extent permitted by law, all accrued and unpaid interest in respect of the Note and any other amounts due pursuant to the Loan Documents, shall accrue interest at the Default Rate, calculated from the date such Event of Default shall have occurred after giving effect to any applicable notice and grace periods; provided , however , that any amounts expended by Lender due to a Default for which Borrower is obligated under the Loan Documents to reimburse Lender shall accrue interest at the Default Rate calculated from the date expended without regard to any grace or cure periods contained herein.

         2.2.7.     Usury Savings.     This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

         2.2.8.     Interest Rate Cap Agreement.     (a) On or prior to the Closing Date, Borrower shall enter into an Interest Rate Cap Agreement with a LIBOR strike price equal to or less than the Strike Price. The Interest Rate Cap Agreement (i) shall be with an Acceptable Counterparty, (ii) shall direct such Acceptable Counterparty to deposit directly into the Seventh Mezzanine Deposit Account all amounts due Borrower under such Interest Rate Cap Agreement so long as any portion of the Debt exists, (iii) shall be for the period from the Closing Date through the Mandatory Prepayment Date and

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(iv) shall have an initial notional amount equal to the principal balance of the Loan. Borrower shall collaterally assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap Agreement, all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the Seventh Mezzanine Deposit Account). Lender hereby accepts the Interest Rate Cap Agreement that is the subject of the Collateral Assignment of Interest Rate Cap Agreement and agrees it complies with the requirements of this Section 2.2.8 .

        (b)   Borrower shall comply with all of its obligations under the material terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty under the Interest Rate Cap Agreement to Borrower shall be deposited directly into the Seventh Mezzanine Deposit Account or into such other account as specified by Lender.

        (c)   In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the Minimum Counterparty Rating, Borrower, upon reasonable notice of such downgrade, withdrawal or qualification, shall replace the Interest Rate Cap Agreement (such date of replacement, which date shall in no event be later than the Cap Replacement Delivery Deadline, the " Cap Replacement Delivery Date ") with a Replacement Interest Rate Cap Agreement (and shall deliver to Lender one or more legal opinions issued by counsel (which counsel may be in-house counsel for the counterparty) to the Counterparty (and any guarantor thereof) which are in form and substance substantially similar to the opinions delivered to Lender on the Closing Date or are otherwise reasonably acceptable to Lender) not later than ten (10) Business Days after the occurrence of such downgrade, withdrawal or qualification (such date, the " Cap Replacement Delivery Deadline ").

        (d)   In connection with any release pursuant to and in accordance with Section 2.6 hereof or in connection with any application by Lender of Net Liquidation Proceeds After Debt Service to the Debt in accordance with Section 2.4.2 hereof, in the event that the notional amount of the Interest Rate Cap Agreement or any Replacement Interest Rate Cap Agreement, as applicable, exceeds the outstanding principal balance of the Loan (after giving effect to the release and the application of the Loan Release Payments as provided in Section 2.6 hereof or of the application of Net Proceeds), Borrower shall have the right, at its sole cost and expense, to cause the notional amount of such Interest Rate Cap Agreement or Replacement Cap Agreement, as applicable, to be reduced to an amount not less than such outstanding principal balance provided that (i) no Event of Default shall be continuing, (ii) Borrower shall have delivered to Lender the documentation to effect such reduction not less than ten (10) Business Days prior to the effective date of such reduction and (iii) such reduction does not result in the notional amount of such Interest Rate Cap Agreement or Replacement Cap Agreement, as applicable, being reduced below the outstanding principal balance of the Loan. Upon the modification of the Interest Rate Cap Agreement or delivery of such Replacement Cap Agreement, Borrower shall obtain and deliver to Lender an opinion from counsel (which counsel may be in-house counsel for the Counterparty) for the Counterparty (upon which Lender, its successors and assigns and the Rating Agencies may rely) which is in form and substance substantially similar to the opinions delivered to Lender on the Closing Date or is otherwise reasonably acceptable to Lender.

         2.2.9.     Taxes.     (a) Any and all payments by the Borrower under or in respect of this Agreement or any other Loan Documents to which the Borrower is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future income, franchise, sales, use or other taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, " General Taxes "), unless required by law. If the Borrower shall be required under any requirement of law to deduct or withhold any General Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Loan Documents to the Lender

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(including for all purposes of this Section 2.2.9 any assignee, successor or participant), (i) Borrower shall make all such deductions and withholdings in respect of General Taxes, (ii) Borrower shall pay the full amount deducted or withheld in respect of General Taxes to the relevant taxation authority or other Governmental Authority in accordance with any requirement of law, and (iii) the sum payable by Borrower shall be increased as may be necessary so that after Borrower has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 2.2.9 ) such Lender receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement the term " Non-Excluded Taxes " shall mean General Taxes other than, in the case of a Lender, General Taxes that are imposed on its net income, net profits or capital (and franchise taxes imposed in lieu thereof), or branch profits taxes that are imposed, by the jurisdiction under the laws of which such Lender is organized or of its applicable lending office, or any political subdivision thereof, unless such General Taxes are imposed as a result of such Lender having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Loan Documents but only if the Lender would not have been subject to such General Taxes in the jurisdiction generally had the Lender not entered into this Agreement or any other Loan Document (in which case such General Taxes will be treated as Non-Excluded Taxes).

        (b)   In addition, Borrower hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Loan Document or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other Loan Document (collectively, " Other Taxes ").

        (c)   Borrower hereby agrees to indemnify Lender for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full amount of General Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.2.9 imposed on or paid by such Lender and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. The indemnity by Borrower provided for in this Section 2.2.9(c) shall apply and be made whether or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable by Borrower under the indemnity set forth in this Section 2.2.9(c) shall be paid within ten (10) days from the date on which Lender makes written demand therefor.

        (d)   Within thirty (30) days after the date of any payment of General Taxes, Borrower (or any Person making such payment on behalf of Borrower) shall furnish to Lender for its own account a certified copy of the original official receipt or such other evidence that is reasonably satisfactory to Lender evidencing payment thereof. For purposes of subsection (e) of this Section 2.2.9 , the terms "United States" and "United States person" shall have the meanings specified in Section 7701 of the Internal Revenue Code.

        (e)   Each Lender (including for avoidance of doubt any assignee, successor or participant) (a " Non-Exempt Lender ") shall deliver or cause to be delivered to Borrower, but only if it is legally able to do so, the following properly completed and duly executed documents:

•           (i)  in the case of a Lender that is not a United States person, a complete and executed (x) U.S. Internal Revenue Form W-8BEN with Part II completed if Lender is able to claim the benefits of a tax treaty with the United States providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

           (ii)  in the case of a Lender that is an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate substantially in the form of Schedule 2.2.9 (a " Section 2.2.9 Certificate ") or (y) a complete and executed U.S.

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• 
  

  Internal Revenue Service Form W-9 certifying that such Person is exempt from backup withholding (or any successor forms thereto); or

          (iii)  in the case of a Lender that is organized under the laws of the United States, any State thereof, or the District of Columbia, a complete and executed U.S. Internal Revenue Service Form W-9 certifying that such Person is exempt from backup withholding (or any successor forms thereto), including all appropriate attachments; or

          (iv)  in the case of a Lender that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a Section 2.2.9 Certificate; or

           (v)  in the case of a Lender that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) a Section 2.2.9 Certificate, and (y) without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, " beneficial owners "), the documents that would be required by clause (i), (ii), (iii), (iv), (vi), (vii) and/or this clause (v) with respect to each such beneficial owner if such beneficial owner were Lender, provided , however , that no such documents will be required with respect to a beneficial owner to the extent the actual Lender is determined to be in compliance with the requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements of this clause (v) are otherwise determined to be unnecessary, all such determinations under this clause (v) to be made in the sole discretion of Borrower, provided , however , that Lender shall be provided an opportunity to establish such compliance as reasonable; or

          (vi)  in the case of a Lender that is disregarded for U.S. federal income tax purposes, the document that would be required by clause (i), (ii), (iii), (iv), (v), (vii) and/or this clause (vi) of this Section 2.2.9(e) with respect to its beneficial owner if such beneficial owner were the Lender; or

         (vii)  in the case of a Lender that (A) is not a United States person and (B) is acting in the capacity as an "intermediary" (as defined in U.S. Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (ii) a Section 2.2.9 Certificate, and (y) if the intermediary is a "non-qualified intermediary" (as defined in U.S. Treasury Regulations), from each person upon whose behalf the "non-qualified intermediary" is acting the documents that would be required by clause (i), (ii), (iii), (iv), (v), (vi), and/or this clause (vii) with respect to each such person if each such person were Lender.

        If the forms referred to in clause (i)(x) above in this Section 2.2.9(e) that are provided by a Lender at the time such Lender first becomes a party to this Agreement or, with respect to a grant of a participation, the effective date thereof, indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as General Taxes other than "Non-Excluded Taxes" (" Excluded Taxes ") and shall not qualify as Non-Excluded Taxes unless and until such Lender provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for the periods governed by such form. If, however, on the date a Person becomes an assignee, successor or participant to this Agreement, Lender transferor was entitled to indemnification or additional amounts under this Section 2.2.9 , then the Lender assignee, successor or participant shall be entitled to indemnification or additional amounts to

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the extent (and only to the extent), that the Lender transferor was entitled to such indemnification or additional amounts for Non-Excluded Taxes, and the Lender assignee, successor or participant shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes. In addition, a Lender shall, subject to Section 2.2.9(f) , upon written notice from Borrower promptly deliver such new forms as are required by the relevant Governmental Authority to claim exemption from, or reduction in the rate of, U.S. federal withholding tax upon the obsolescence or invalidity of any form previously delivered by such Lender, but only if such Lender is legally able to do so.

        (f)    For any period with respect to which a Lender has failed to provide Borrower with the appropriate form, certificate or other document described in subsection (e) of this Section 2.2.9 (other than if such failure is due to a change in any requirement of law (including any applicable law, treaty, governmental rule, regulation, guideline or order), or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided and it is legally inadvisable or otherwise commercially disadvantageous for such Lender to deliver such form, certificate or other document), such Lender shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this Section 2.2.9 with respect to Non-Excluded Taxes imposed by the United States by reason of such failure; provided , however , that should a Lender become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Borrower shall take such steps as such Lender shall reasonably request, to assist such Lender in recovering such Non-Excluded Taxes.

        (g)   If a Lender receives a tax refund that is solely attributable to any Non-Excluded Taxes as to which such Lender has received additional amounts pursuant to Section 2.2.9(a) or indemnification pursuant to Section 2.2.9(c) , such Lender will pay to the Borrower the amount that, in such Lender's sole discretion, is solely attributable to such Non-Excluded Taxes, net of all out-of-pocket expenses of such Lender, and without interest; provided that (i) such Borrower, upon the request of such Lender, as the case may be, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender in the event such Lender is required to repay such refund to such Governmental Authority and (ii) in no event is any Lender required to arrange its Tax affairs to claim any refund. This paragraph shall not under any circumstances require such Lender to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person. Notwithstanding anything contained herein to the contrary, in no event will any Lender be required to pay any amount to the Borrower the payment of which would place such Lender in a less favorable net after-Tax position than such Lender would have been in if the additional amounts or indemnification giving rise to such refund of Taxes had never been paid and the refund never been received.

        (h)   The obligations of Borrower under this Section 2.2.9 shall survive the termination of this Agreement and the payment of the Loan and all other amounts payable hereunder.

         Section 2.3.     Loan Payment.     

         2.3.1.     Payments Generally.     (a) Borrower shall pay to Lender (i) on the Closing Date, an amount equal to interest only on the outstanding principal balance of the Note from the Closing Date up to and including (A) the eighth day of the calendar month in which the Closing Date occurs or (B) if the Closing Date occurs subsequent to the eighth day of the calendar month in which the Closing Date occurs, the eighth day of the calendar month of the first month subsequent to the month in which the Closing Date occurs, and (ii) on February 9, 2008 and on each Payment Date thereafter up to and including the Maturity Date, Borrower shall make a payment to Lender of interest accruing on the Note during the entire Interest Period ending on such Payment Date.

        (b)   For purposes of making payments hereunder, but not for purposes of calculating interest accrual periods, if the day on which such payment is due is not a Business Day, then amounts due on

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such date shall be due on the immediately preceding Business Day. All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever.

         2.3.2.     Payment on Maturity Date.     Borrower shall pay to Lender on the Maturity Date the outstanding principal balance of the Loan, all accrued and unpaid interest and all other amounts due hereunder and under the Note, the Pledge Agreement and the other Loan Documents, including all interest that would accrue on the outstanding principal balance of the Loan through and including the end of the Interest Period in which the Maturity Date occurs (even if, in the event of an acceleration of the Loan, such Interest Period extends beyond the Maturity Date).

         2.3.3.     Late Payment Charge.     If any principal, interest or any other sums due under the Loan Documents is not paid by Borrower by the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of three percent (3.0%) of such unpaid sum or the maximum amount permitted by applicable law (such amount, the " Late Payment Charge ") in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such Late Payment Charge shall be secured by the Pledge Agreement and the other Loan Documents to the extent permitted by applicable law.

         2.3.4.     Method and Place of Payment.     Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 2:00 p.m., New York City time, on the date when due and shall be made in lawful money of the United States of America in immediately available funds at Lender's office or as otherwise directed by Lender, and any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next succeeding Business Day.

         Section 2.4.     Prepayments.     

         2.4.1.     Voluntary Prepayments.     The outstanding principal amount of the Loan may be prepaid in whole or in part only as expressly provided herein, and may not otherwise be prepaid. On any date occurring after the Closing Date, upon not less than ten (10) Business Days' prior notice to Lender, Borrower may prepay the Loan (a) in whole or (b) in part, solely with respect to this clause (b), pursuant to (i) a Permitted Release in accordance with Section 2.6 hereof (but only to the extent that such prepayment (together with all prior prepayments made pursuant to Permitted Releases, Affected Property Releases and Limited Cure Releases) does not exceed the Permitted Release Threshold), (ii) pursuant to a Limited Cure Release in accordance with Section 8.1(c) hereof or (iii) pursuant to an Affected Property Release in accordance with Section 6.4(d) of the Mortgage Loan Agreement; provided that (A) no Event of Default shall be continuing (other than the Event of Default which is to be cured pursuant to a Limited Cure Release); provided , however , that solely in connection with a prepayment in whole of the Loan, the absence of an Event of Default shall not be a precondition thereto so long as such prepayment complies with all other applicable provisions hereof and (B) any prepayment in whole pursuant to clause (a) hereof or any prepayment pursuant to clause (b) hereof pursuant to a Permitted Release or a Limited Cure Release which occurs prior to the Payment Date occurring in January, 2009 (the " Lockout Release Date ") shall include the Spread Maintenance Premium. If a prepayment under this Section 2.4.1(a) is made (I) on a Payment Date, then Borrower shall pay to Lender, simultaneously with such prepayment, all interest on the principal balance of the Loan then being prepaid accrued through the end of the Interest Period ending immediately prior to such Payment Date or (II) on a day other than a Payment Date, then Borrower shall pay to Lender, simultaneously with such prepayment, all interest on the principal balance of the Loan then being prepaid which would have accrued through the end of the Interest Period then in effect, notwithstanding that such Interest Period extends beyond the date of such prepayment. Additionally, in connection with any voluntary prepayment pursuant to this Section 2.4.1 , the Mortgage Loan and each

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Other Mezzanine Loan shall be simultaneously prepaid ratably, or if such prepayment is in connection with the release of a Release Property in accordance with Section 2.6 hereof, in an amount equal to the Mortgage Release Amount and the Other Mezzanine Release Amount applicable to such Release Property. Borrower acknowledges and agrees that in connection with any prepayment under the Mortgage Loan or any Other Mezzanine Loan, the Loan shall be simultaneously prepaid as provided in the Mortgage Loan Agreement or the applicable Other Mezzanine Loan Agreement. Borrower shall have the right, by notice to Lender, to revoke any notice of prepayment given pursuant to this Section 2.4.1 , provided that (i) such notice is given not later than the date that is one (1) Business Day prior to the date originally designated as the date of prepayment and (ii) Borrower shall within ten (10) Business Days after demand pay to Lender all reasonable costs and expenses incurred by Lender in connection with the proposed prepayment and/or the revocation thereof, including, without limitation, reasonable attorneys' fees and disbursements.

         2.4.2.     Liquidation Events.     (a) Subject to the provisions of Section 2.4.1 hereof, in the event of (i) any Casualty to all or any portion of the Properties, (ii) any Condemnation of all or any portion of the Properties, (iii) a Transfer of all or any portion of the Properties or any of the Senior Mezzanine Collateral, (iv) any refinancing of the Properties or equity interests in Mortgage Borrower and Maryland Owner or the Mortgage Loan or of any of the Senior Mezzanine Collateral or of any Senior Mezzanine Loan in accordance with the terms hereof, the Mortgage Loan Agreement and the applicable Senior Mezzanine Loan Agreement, or (v) the receipt by Mortgage Borrower of any excess proceeds realized under its owner's title insurance policy after application of such proceeds by Mortgage Borrower to cure any title defect (each, a " Liquidation Event "), Borrower shall authorize Lender to apply one hundred percent (100%) of such Net Liquidation Proceeds After Debt Service to the outstanding principal balance of the Note, together with, in the event that such Net Liquidation Proceeds After Debt Service are received on or before a Payment Date, interest that would have accrued on such prepaid amounts through and including the end of the Interest Period in which such Payment Date occurs. Other than during the continuance of an Event of Default, no prepayment premium or fee shall be due in connection with any prepayment made pursuant to clauses (i) or (ii) of this Section 2.4.2 . The Allocated Loan Amount for the Individual Property with respect to which such Net Liquidation Proceeds After Debt Service were paid shall be reduced in an amount equal to such prepayment. Notwithstanding anything to the contrary contained in this Section 2.4.2(a ), Net Liquidation Proceeds After Debt Service paid or received with respect to any of the events described in clauses (i), (ii) or (iv) above shall be the result of a ratable application of the proceeds from any such Liquidation Event (net of all amounts permitted or required to be deducted therefrom in accordance with the definition of "Net Liquidation Proceeds After Debt Service") to the Mortgage Loan and each Mezzanine Loan, while Net Liquidation Proceeds After Debt Service paid with respect to any Liquidation Event described in clause (iii) or (v) or otherwise following a foreclosure sale or other disposition of the Property in connection with realization thereon following a Mortgage Loan Event of Default, shall be the result of the sequential application of such proceeds (net of all amounts permitted or required to be deducted therefrom in accordance with the definition of "Net Liquidation Proceeds After Debt Service") to the Mortgage Loan and each Mezzanine Loan. Any Net Liquidation Proceeds After Debt Service in excess of the Debt shall be paid as directed by Borrower.

        (b)   Borrower shall reasonably promptly notify Lender of any Liquidation Event once Borrower has knowledge of such event; provided , however , that Borrower's obligation to so notify Lender with respect to a Casualty shall only be with respect to a Casualty, the Net Proceeds of which would reasonably be expected to exceed $500,000. Borrower shall be deemed to have knowledge of (i) a sale (other than a foreclosure sale) of the Property or the Senior Mezzanine Collateral on the date on which a contract of sale for such sale is entered into, and a foreclosure sale, on the date notice of such foreclosure sale is given, and (ii) a refinancing of the Property or the Mortgage Loan or of any Senior Mezzanine Collateral or any Senior Mezzanine Loan, on the date on which a commitment for such refinancing has been entered into. The provisions of this Section 2.4.2 shall not be construed to

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contravene in any manner the restrictions and other provisions (including, without limitation, any provision relating to the application of proceeds thereof) regarding refinancing of the Mortgage Loan, any Senior Mezzanine Loan, Transfer of the Property or any Senior Mezzanine Collateral, substitution or release of any Individual Property or the application of Net Liquidation Proceeds After Debt Service set forth in this Agreement, the other Loan Documents, the applicable Senior Mezzanine Loan Documents or the Mortgage Loan Documents.

         2.4.3.     Prepayments After Event of Default.     If, on or prior to the Lockout Release Date, payment of all or any part of the Debt is tendered by Borrower or otherwise recovered by Lender (including through application of any Reserve Funds) during the continuance of an Event of Default, such tender or recovery shall (a) include interest accruing through and including the end of the Interest Period in which such payment occurs and (b) be deemed a voluntary prepayment by Borrower in violation of the prohibition against prepayment set forth in Section 2.4.1 and Borrower shall pay, in addition to the Debt, an amount equal to the Spread Maintenance Premium.

         2.4.4.     Mandatory Prepayment.     On the first (1 ^st ) Payment Date occurring after the fourth (4 ^th ) anniversary of the Closing Date (the " Mandatory Prepayment Date "), Borrower shall be required to prepay in whole the Debt, unless Borrower shall have satisfied each of the following terms and conditions on or prior to the Mandatory Prepayment Date:

        (a)   no Event of Default shall be continuing on the Mandatory Prepayment Date;

        (b)   if the Interest Rate Cap Agreement is scheduled to mature on or prior to the Mandatory Prepayment Date, Borrower shall obtain and deliver to Lender not later than the first day following the Mandatory Prepayment Date ( provided that the form of such Replacement Interest Rate Cap shall have been delivered to Lender not later than ten (10) Business Days prior to the first day following the Mandatory Prepayment Date), one or more Replacement Interest Rate Cap Agreements at the Strike Price from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreements shall be effective commencing on the first day following the Mandatory Prepayment Date and shall have a maturity date not earlier than the Maturity Date;

        (c)   the Debt Service Coverage Ratio for the trailing twelve (12) full calendar months as of the date immediately preceding the Mandatory Prepayment Date shall not be less than 1.45:1.00, provided that Borrower shall have the right on the Mandatory Prepayment Date to repay a portion of the Loan on a pro rata basis with the Mortgage Loan and each Other Mezzanine Loan based on the respective original principal amounts of the Loan, the Mortgage Loan and each Other Mezzanine Loan in an amount necessary to cause the foregoing Debt Service Coverage Ratio requirement to be satisfied;

        (d)   Borrower shall have delivered to Lender as of the Mandatory Prepayment Date an Officer's Certificate in form reasonably acceptable to Lender certifying that each of the representations and warranties of Borrower contained in the Loan Documents is true, complete and correct in all material respects as of the date of such Officer's Certificate to the extent such representations and warranties are not matters which by their nature can no longer be true and correct as a result of the passage of time or are no longer true and correct as a result of factual circumstances or events that have occurred subsequently, provided such circumstances and events that have occurred subsequently do not constitute a Default or an Event of Default that is continuing;

        (e)   (i) Each of Mortgage Borrower and Maryland Owner, First Mezzanine Borrower, Second Mezzanine Borrower and Third Mezzanine Borrower shall have contemporaneously extended the term of the Mortgage Loan, the First Mezzanine Loan, the Second Mezzanine Loan and the Third Mezzanine Loan, respectively, and (ii) each of the Fourth Mezzanine Borrower, the Fifth Mezzanine Borrower and the Sixth Mezzanine Borrower shall have satisfied the conditions set forth in Section 2.4.4 of the Fourth Mezzanine Loan Agreement, the Fifth Mezzanine Loan Agreement and the Sixth Mezzanine Loan Agreement, respectively, such that they are not required to repay their respective Mezzanine Loan; and

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        (f)    Borrower shall have paid to Lender all reasonable costs incurred by Lender in connection with the requirements set forth in this Section 2.4.4 (including reasonable attorneys' fees) excluding any Spread Maintenance Premium, prepayment penalty or breakage fees which might otherwise be due.

         Section 2.5.     Substitution of Properties.     Borrower may cause Mortgage Borrower and Maryland Owner to obtain the release of one or more Individual Properties from the Lien of the Mortgage thereon and the release of Mortgage Borrower's and/or Maryland Owner's obligations under the Mortgage Loan Documents with respect to such Individual Property (other than those expressly stated to survive) (each such Individual Property, a " Substituted Property "), by substituting therefor one or more properties (such properties, individually and collectively as the context requires, " Substitute Property "), upon the satisfaction of each of the following conditions:

        (a)   After giving effect to the proposed substitution, no Event of Default shall be continuing;

        (b)   Lender shall have received at least thirty (30) days' prior notice requesting the substitution and identifying the Substitute Property and the Substituted Property;

        (c)   All conditions to the substitution set forth in Section 2.5 of the Mortgage Loan Agreement and each Senior Mezzanine Loan Agreement shall have been satisfied and Lender shall have received evidence that all such conditions shall have been satisfied; provided that such evidence shall in all cases consist of the identical evidence or documentation provided to Mortgage Lender and each Senior Mezzanine Lender in satisfaction of such conditions;

        (d)   Lender shall have received an Officer's Certificate stating that (i) no Event of Default shall have occurred and be continuing, (ii) each of the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects with respect to the Substitute Property Borrower and the Substitute Property as of the applicable Substitution Effective Date (on a pro forma basis giving effect to the proposed substitution) and (iii) that all of the conditions of this Section 2.5 shall have been satisfied or waived;

        (e)   Lender shall have received such certified organizational documents, good standing certificates, qualifications to do business, resolutions and consents for the Substitute Property Borrower and the Substitute Property Operator in connection with the substitution as are requested by Mortgage Lender pursuant to Section 2.5(o) of the Mortgage Loan Agreement;

        (f)    Lender shall have received such lien, credit, bankruptcy, litigation and judgment searches with respect to the Substitute Property, the Substitute Property Borrower, the Substitute Property Operator, any former owner and/or operator of the Substitute Property and any direct or indirect owner thereof as are provided to Mortgage Lender pursuant to Section 2.5(w) of the Mortgage Loan Agreement;

        (g)   Lender shall have received a mezzanine loan or similar endorsement (to the extent available, and if not available, a form of "comfort letter" in substantially the form delivered at closing, if available) to each owner's Title Insurance Policy insuring such Substitute Property as of the Substitution Effective Date. Lender also shall have received copies of paid receipts or a closing statement showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid or will be paid at closing of the purchase of the Substitute Property;

        (h)   Lender shall have received from Borrower a copy of each document, agreement, financial statement, amendment, instrument, report, appraisal, opinion, survey, study or other communication delivered by Mortgage Borrower to Mortgage Lender in connection with such Substitution pursuant to Section 2.5 of the Mortgage Loan Agreement;

        (i)    Intentionally omitted;

        (j)    Lender shall have received the following opinions of Borrower's counsel: (i) copies of First Mezzanine Borrower's counsel's opinion as to the perfection and enforceability of the pledge of the

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ownership interests in the Substitute Property Borrower, (ii) copies of an opinion or opinions of counsel admitted in New York and Delaware opining as to such matters with respect to the Substitute Property Borrower and the documents and instruments delivered with respect to the substitution and with such qualifications and assumptions as the opinions with respect to the Property delivered at the closing of the Mortgage Loan, which opinions and the counsel issuing the same would be acceptable to a prudent lender originating commercial mortgage loans for securitization similar to the Mortgage Loan, (iii) copies of so-called "Special Delaware" opinions with respect to the Substitute Property Borrower and the Substitute Property Operator issued by counsel admitted to practice in Delaware and with such qualifications and assumptions as the "Special Delaware" opinions with respect to Mortgage Borrower, Maryland Owner and Operator delivered at the closing of the Mortgage Loan, which opinions and counsel issuing the same shall otherwise be acceptable to the Rating Agencies, (iv) copies of an opinion of counsel with respect to such health care regulatory matters as are required by the Rating Agencies with respect to the Mortgage Loan, (v) copies of an opinion of counsel which would be acceptable to a prudent lender originating commercial mortgage loans for securitizations similar to the Mortgage Loan, and if after a Securitization of the Mortgage Loan, acceptable to the Rating Agencies, opining that subjecting the Substitute Property to the Lien of the related Substitute Property Lien Documents and the execution and delivery of the related Loan Documents does not and will not affect or impair the ability of Mortgage Lender to enforce its remedies under all of the Mortgage Loan Documents or to realize the benefits of the cross-collateralization provided for thereunder, (vi) if required by the Rating Agencies under the Mortgage Loan, an Additional True-Lease Opinion of counsel acceptable to the Rating Agencies under the Mortgage Loan, (vii) copies of an opinion of counsel acceptable to the Rating Agencies under the Mortgage Loan that the substitution does not constitute a "significant modification" of the Mortgage Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a "prohibited transaction" by any REMIC Trust and (viii) an update of the Insolvency Opinion indicating that the substitution does not affect the opinions set forth therein (it being agreed that any opinions contemplated by this paragraph which cover the same matters as opinions delivered on the Closing Date shall be of similar form and substance as those delivered on the Closing Date);

        (k)   Lender shall have received with respect to the Substitute Property Borrower and the Substitute Property, as applicable, (i) annual operating statements for the three (3) years immediately prior to the Substitution Effective Date, (ii) financial statements for the most current completed Fiscal Year in accordance with the requirements of Section 5.1.11 hereof, (iii) a current operating statement and (iv) an Officer's Certificate certifying that each of the foregoing presents fairly the financial condition and the results of operations of the Substitute Property Borrower and the Substitute Property and that there has been no material adverse change in the financial condition of the Substitute Property;

        (l)    Following the substitution of a Substituted Property in exchange for a Substitute Property in accordance with this Section 2.5 , Lender shall adjust (if applicable) the amounts thereafter required to be deposited by Borrower into the Reserve Funds to reflect amounts required solely for the remaining Individual Properties and the Substitute Property after giving effect to such substitution, unless such deposits have been made by Mortgage Borrower and Maryland Owner or any Senior Mezzanine Borrower pursuant to the Mortgage Loan Documents or the applicable Senior Mezzanine Loan Documents, in which case the making of such deposits shall be waived hereunder;

        (m)  Borrower shall have caused to be paid or reimbursed Lender for all costs and expenses incurred by Lender (including, without limitation, reasonable attorneys fees and disbursements) in connection with the release and substitution and Borrower shall have caused to be paid all recording charges, filing fees, taxes or other expenses (including, without limitation, mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution. Borrower shall have

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caused to be paid all costs and expenses and fees of the Rating Agencies incurred by Mortgage Borrower and Maryland Owner in connection with the substitution; and

        (n)   such substitution shall not result in any breach of or noncompliance with any applicable REIT Representations and Covenants.

        Upon satisfaction or waiver of the foregoing conditions precedent, the Allocated Loan Amount of the Substitute Property shall be equal to the Allocated Loan Amount of the Substituted Property (and, if there is more than one Substitute Property, the Allocated Loan Amount of the Substituted Property shall be allocable to each such Substitute Property on a pro rata basis according to the Appraised Value thereof) (such date, the " Substitution Effective Date ").

         Section 2.6.     Release of Collateral.     No repayment or prepayment of all or any portion of the Note (other than repayment in full of the Debt in accordance with the terms hereof) shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of the Pledge Agreement in the Collateral, or any portion thereof.

         2.6.1.     Release of Individual Property.     After the Closing Date, Borrower may cause or permit Mortgage Borrower and Maryland Owner to obtain the release of an Individual Property from the Lien of the Mortgage thereon (each such Individual Property, a " Release Property ") and the release of Mortgage Borrower's obligations under the Mortgage Loan Documents (and, if applicable, the release of the Maryland Owner from the Indemnity Guaranty) with respect to such Release Property, upon the satisfaction of each of the following conditions:

        (a)   Such release is either (i) a Permitted Release, (ii) a Limited Cure Release effectuated in accordance with Section 8.1(c) hereof, (iii) an Affected Property Release effectuated in accordance with Section 6.4(d) of the Mortgage Loan Agreement or (iv) an Unlicensed Facility Release in accordance with Section 5.1.28 hereof;

        (b)   After giving effect to the proposed release, no Event of Default shall be continuing;

        (c)   (i) In the case of a Limited Cure Release, Borrower shall have paid to Lender the applicable Limited Cure Release Amount and the Spread Maintenance Premium, if applicable; provided , however , that such Limited Cure Release, when aggregated with all prior Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases and all concurrent Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases shall not exceed the Permitted Release Threshold; and (ii) in the case of an Unlicensed Facility Release, Borrower shall have paid to Lender the applicable Unlicensed Facility Release Amount; provided , however , that such Unlicensed Facility Release, when aggregated with all prior Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases and all concurrent Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases, shall not exceed the Permitted Release Threshold;

        (d)   In the case of an Affected Property Release, Borrower shall have paid to Lender the applicable Affected Property Release Amount; provided , that Borrower shall receive a credit against such Affected Property Release Amount in the amount of the Net Liquidation Proceeds After Debt Service held by Lender corresponding to the Individual Property to which such Affected Property Release relates;

        (e)   In the case of a Permitted Release, Borrower shall have paid to Lender (i) the applicable Permitted Release Amount and (ii) the Spread Maintenance Premium, if applicable; provided , that such Permitted Release, when aggregated with all prior Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases and all concurrent Permitted Releases, Limited Cure Releases, Unlicensed Facility Releases and Affected Property Releases, shall not exceed

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the Permitted Release Threshold (the Release Amounts paid by Borrower pursuant to subsections (c) , and (d) above and this subsection (e) are collectively the " Loan Release Payments ");

        (f)    Intentionally omitted;

        (g)   Either (i) the Release Property shall be conveyed or (ii) the ownership interests in the Mortgage Borrower or Maryland Owner owning such Release Property shall be Transferred (but not Pledged), in either case, to a Person other than a Borrower, Mortgage Borrower, Maryland Owner, an Other Mezzanine Borrower, Master Tenant or an Operator;

        (h)   The Release Amount paid to Lender in connection with any such release shall be applied to reduce the Allocated Loan Amount of the Release Property to zero, but shall not be applied to reduce the Allocated Loan Amounts of any Individual Properties remaining subject to the Lien of a Mortgage immediately following such release;

        (i)    Concurrently with the payment of the Loan Release Payments, Mortgage Borrower shall make a partial prepayment of the Mortgage Loan equal to the Mortgage Release Amount applicable to such Release Property and each Other Mezzanine Borrower shall make a partial prepayment of its respective Other Mezzanine Loan equal to the Other Mezzanine Release Amount applicable to such Release Property, together in each case with any related interest, costs and expenses and all other amounts payable under the Mortgage Loan Documents or related Other Mezzanine Loan Documents in connection with such prepayment, including, to the extent such prepayment is made on a date other than a Payment Date, interest which would have accrued on the outstanding principal balance of the Mortgage Loan or such Mezzanine Loan to the next Payment Date;

        (j)    (i) Mortgage Borrower and Maryland Owner shall have satisfied all of the terms and conditions contained in Section 2.6.1 and 2.6.2 of the Mortgage Loan Agreement required for the release of any such Individual Property and (ii) each Senior Mezzanine Borrower shall have satisfied all of the terms and conditions contained in Section 2.6.1 and 2.6.2 of the applicable Senior Mezzanine Loan Agreement required for the release of any such Individual Property.

        (k)   Borrower shall have caused to be paid or reimbursed Lender for all reasonable out-of-pocket costs and expenses incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with any release effectuated pursuant to this Section 2.6.1 , and Borrower shall have caused to be paid all reasonable third-party costs and expenses incurred in connection with any such release, including but not limited to, any charges incurred in connection with the release of any Liens.

        (l)    such release shall not result in any breach of or noncompliance with any applicable REIT Representations and Covenants.

         2.6.2.     Release on Payment.     Lender shall, upon the written request and at the sole cost and expense (including reasonable attorneys' fees and disbursements) of Borrower, upon payment in full of all principal and interest due on the Loan and all other amounts due and payable under the Loan Documents in accordance with the terms and provisions of the Note and this Agreement, release the Lien of the Pledge Agreement on the Collateral. Upon request of Borrower and at Borrower's sole cost and expense (including reasonable attorneys' fees and disbursements), Lender agrees to cooperate to provide assignments without representation or warranty and without recourse in lieu of the aforementioned releases.

         2.6.3.     Release of Reserve Funds.     In connection with a release of a Release Property pursuant to this Section 2.6 , Lender will cause a portion of the Reserve Funds (other than Low DSCR Reserve Funds) or a reduction to any Letters of Credit delivered to Lender in lieu of such Reserve Funds in accordance with Section 7.6 hereof by an amount, as determined by Lender in its reasonable discretion, equal to the undisbursed portion thereof allocable to such Release Property. Following the release of a

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Release Property in accordance with Section 2.6.1 , Lender shall adjust (if applicable) the amounts thereafter required to be deposited by Borrower into the Reserve Funds (other than the Low DSCR Reserve Funds) to reflect amounts required solely for the remaining Individual Properties after giving effect to such release.

         Section 2.7.     Cash Management.     

         2.7.1.     Operator Accounts; Rent Instruction.     (a)    Borrower shall cause Mortgage Borrower and Maryland Owner to establish and maintain a segregated Eligible Account for the purpose of depositing all payments of Rents payable pursuant to the Master Lease, which Eligible Account shall be in the name of Borrower Agent under the Mortgage Loan Agreement.

        (b)   Borrower hereby represents and warrants that the Rent Instruction directs Master Tenant to deposit all Rents payable under the Master Lease directly into the Mortgage Cash Management Account.

        (c)   Borrower hereby covenants and agrees to cause Mortgage Borrower and Maryland Owner to deposit directly into the Mortgage Cash Management Account any payments of Rents in respect of the Master Lease received by Mortgage Borrower, notwithstanding Subsection (b) above, within one (1) Business Day of receipt.

         2.7.2.     Mortgage Cash Management Account.     (a)    Borrower shall cause Mortgage Borrower and Maryland Owner to establish and maintain the Mortgage Cash Management Account and the Mortgage Sub-accounts with Mortgage Lender in accordance with Section 2.7.3 of the Mortgage Loan Agreement for the benefit of Mortgage Lender, each of which Accounts shall be under the sole dominion and control of Mortgage Lender. Borrower shall not cause or permit Mortgage Borrower in any way to alter or modify the Mortgage Cash Management Account and will notify Lender of the account number thereof. Borrower shall direct or cause Mortgage Borrower and Maryland Owner to direct that all cash distributions from the Mortgage Cash Management Account to be paid to Mortgage Borrower in accordance with the Mortgage Cash Management Agreement (including the Net Liquidation Proceeds After Debt Service) be deposited into the First Mezzanine Deposit Account maintained in accordance with the Cash Management Agreement.

        (b)   All funds on deposit in the Accounts during the continuance of an Event of Default may be applied by Lender in such order and priority as Lender shall determine.

         2.7.3.     Senior Mezzanine Cash Management Account.     (a)    Borrower shall cause Senior Mezzanine Borrower to establish and maintain Senior Cash Management Accounts and the sub-accounts established thereunder as Eligible Accounts in accordance with Section 2.7.3 of the applicable Senior Mezzanine Loan Agreement for the benefit of the applicable Senior Mezzanine Lender, each of which Accounts shall be under the sole dominion and control of the applicable Senior Mezzanine Lender. Borrower shall not cause or permit Senior Mezzanine Borrower in any way to materially alter or modify the applicable Senior Mezzanine Deposit Account and will notify Lender of the account number thereof. Borrower shall direct or cause Senior Mezzanine Borrower to direct that all cash distributions