MASTER CREDIT FACILITY AGREEMENT

Loan Agreement

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SENIOR HOUSING PROPERTIES TRUST | CITIBANK, NA | Ellicott City Land I, LLC | SNH FM FINANCING LLC

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Title: MASTER CREDIT FACILITY AGREEMENT
Governing Law: District Of Columbia Date: 8/10/2009
Industry: Real Estate Operations Law Firm: Sullivan Worcester;Arent Fox Sector: Services

Exhibit 10.4

MASTER CREDIT FACILITY AGREEMENT

BY AND BETWEEN

SNH FM FINANCING LLC,

AND

CITIBANK, N.A.

DATED AS OF

August 4, 2009

TABLE OF CONTENTS

		Page

ARTICLE 1	THE TERM LOAN	2

ARTICLE 2	ALLOCABLE LOAN AMOUNT/SUPPLEMENTAL LOANS	2

ARTICLE 3	VALUATIONS/COLLATERAL CHANGES	4

ARTICLE 4	RESERVED	9

ARTICLE 5	RESERVED	9

ARTICLE 6	CONDITIONS PRECEDENT TO ALL REQUESTS	9

ARTICLE 7	REPRESENTATIONS AND WARRANTIES	17

ARTICLE 8	AFFIRMATIVE COVENANTS OF BORROWER	17

ARTICLE 9	NEGATIVE COVENANTS OF BORROWER	34

ARTICLE 10	FEES	37

ARTICLE 11	EVENTS OF DEFAULT	38

ARTICLE 12	REMEDIES	42

ARTICLE 13	INSURANCE, REAL ESTATE TAXES AND REPLACEMENT RESERVES	44

ARTICLE 14	LIMITS ON PERSONAL LIABILITY	45

ARTICLE 15	MISCELLANEOUS PROVISIONS	48

	EXHIBITS

EXHIBIT A	Schedule of Initial Mortgaged Properties, Initial Allocable Loan Amounts and Initial Valuations

EXHIBIT B	Confirmation of Guaranty

EXHIBIT C	Compliance Certificate

EXHIBIT D-1	Borrower Organizational Certificate

EXHIBIT D-2	Guarantor Organizational Certificate

EXHIBIT E	Reserved

EXHIBIT F	Reserved

EXHIBIT G	Reserved

EXHIBIT H	Reserved

EXHIBIT I	Request

EXHIBIT J	Confirmation of Obligations

EXHIBIT K	Reserved

EXHIBIT L	Reserved

EXHIBIT M	Reserved

EXHIBIT N	Reserved

EXHIBIT O	Disclosure Schedule

EXHIBIT P	Letter of Credit

EXHIBIT Q-1	Bank Legal Opinion (Foreign)

EXHIBIT Q-2	Bank Legal Opinion (Domestic)

EXHIBIT R	Form of Rent Roll

EXHIBIT S	Expansion Guaranty

EXHIBIT T	Expansion Security Agreement

SCHEDULE 1	Minimum Rent Payments

APPENDIX I	Definitions

iii

MASTER CREDIT FACILITY AGREEMENT

THIS MASTER CREDIT FACILITY AGREEMENT is made as of the 4th day of August, 2009, by and between SNH FM FINANCING LLC, a Delaware limited liability company and CITIBANK, N.A., a national banking association.

RECITALS

A. Borrower owns one (1) or more Seniors Housing Facilities (unless otherwise defined or the context clearly indicates otherwise, capitalized terms shall have the meanings ascribed to such terms in Appendix I of this Agreement) as more particularly described in Exhibit A to this Agreement.

B. Borrower has requested that Lender make a loan in the amount of $512,934,000 to Borrower, comprised of a $205,174,000 Variable Loan, and a $307,760,000 Fixed Loan.

C. To secure the obligations of Borrower under this Agreement and the other Loan Documents issued in connection with the Term Loan, Borrower shall create a Collateral Pool in favor of Lender. The Collateral Pool shall be comprised of (i) the Seniors Housing Facilities listed on Exhibit A and (ii) any other collateral pledged to Lender from time to time by Borrower pursuant to this Agreement or any other Loan Documents.

D. Each Note and Security Document related to the Mortgaged Properties comprising the Collateral Pool shall be cross-defaulted ( i.e. , a default under any Note, Security Document relating to the Collateral Pool and under this Agreement, shall constitute a default under each Note, Security Document and this Agreement related to the Mortgaged Properties comprising the Collateral Pool) and cross-collateralized ( i.e. , each Security Instrument related to the Mortgaged Properties within the Collateral Pool shall secure all of Borrower’s obligations under this Agreement and the other Loan Documents) and it is the intent of the parties to this Agreement that, after an Event of Default, Lender may accelerate any Note without needing to accelerate any other Note and that in the exercise of its rights and remedies under the Loan Documents, Lender may, except as provided in this Agreement, exercise and perfect any and all of its rights in and under the Loan Documents with regard to any Mortgaged Property without needing to exercise and perfect its rights and remedies with respect to any other Mortgaged Property and that any such exercise shall be without regard to the Allocable Loan Amount assigned to such Mortgaged Property and that Lender may recover an amount equal to the full amount outstanding in respect of any of the Notes in connection with such exercise and any such amount shall be applied as determined by Lender pursuant to the terms of this Agreement, the Notes and the other Loan Documents.

E. Subject to the terms, conditions and limitations of this Agreement, Lender has agreed to make a Term Loan.

NOW, THEREFORE, Borrower and Lender, in consideration of the mutual promises and agreements contained in this Agreement, hereby agree as follows:

ARTICLE 1
THE TERM LOAN

Section 1.01. Term Loan.

(a) Subject to the terms, conditions and limitations of this Agreement, Lender agrees to make the Term Loan to Borrower on the Initial Closing Date. The maximum aggregate principal balance of the Term Loan shall be $512,934,000.

Section 1.02. Notes.

The obligation of the Borrower to repay the Term Loan shall be evidenced by the following Notes: (i) a Fixed Facility Note in the principal amount of $307,760,000 and (ii) a Variable Facility Note in the principal amount of $205,174,000. The Notes shall be payable to the order of Lender and shall equal the aggregate original principal amount of the Term Loan to the Borrower.

Section 1.03. Maturity Date/Prepayment.

The maturity date of the Term Loan shall be September 1, 2019. The Term Loan shall amortize over the Amortization Period with the outstanding principal balance due and owing on the maturity date.

Section 1.04. Yield Maintenance/Prepayment.

The terms and conditions of yield maintenance and/or prepayment premiums as applicable, are contained in the Notes and such terms and conditions shall apply to the prepayment in part or whole of the Term Loan during the term of this Agreement.

Section 1.05. Interest Rate Execution.

In the event that the Term Loan made on the Initial Closing Date is solely a Fixed Loan, the provisions in this Agreement referencing the Variable Loan and Variable Facility Note shall be deemed to be of no further force and effect and be deemed to be eliminated from this Agreement.

ARTICLE 2
ALLOCABLE LOAN AMOUNT/SUPPLEMENTAL LOANS

Section 2.01. Determination of Allocable Loan Amount and Valuations.

(a) Initial Determinations . On the Initial Closing Date, Lender shall determine (i) the Allocable Loan Amount and Valuation for each Initial Mortgaged Property, (ii) the Aggregate NOI Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio and (iii) the Aggregate Lease Payment Debt Service Coverage Ratio. The determinations made as of the Initial Closing Date shall remain unchanged until the First Anniversary. Changes in Allocable Loan Amount, Valuations, the Aggregate NOI Debt Service Coverage Ratio, the

Aggregate Lease Payment Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio shall be made pursuant to Section 2.01(b) .

(b) Monitoring Determinations . Once each Calendar Quarter within twenty (20) Business Days after Borrower has delivered to Lender the reports required in Section 8.03 , Lender shall determine the Aggregate NOI Debt Service Coverage Ratio, the Aggregate Lease Payment Debt Service Coverage Ratio, the Aggregate Loan to Value Ratio, Level of Care Diversity Requirements, the Valuations and the Allocable Loan Amounts and whether Borrower is in compliance with the other covenants set forth in the Loan Documents. After the First Anniversary, on an annual basis, and if Lender decides that changed market or property conditions warrant, Lender shall redetermine Allocable Loan Amounts and Valuations. Lender shall also redetermine Allocable Loan Amounts to take account of any substitution or release of Collateral or other event that invalidates the outstanding determinations. In determining Valuations, Lender shall use Capitalization Rates based on its internal survey and analysis of capitalization rates for comparable sales in the vicinity of the Mortgaged Property, with such adjustments as Lender deems appropriate and without any obligation to use any information provided by Borrower. If Lender is unable to determine a Capitalization Rate for a Mortgaged Property, Lender shall have the right, with the prior consent of Borrower, not more than once annually, to obtain, at Borrower’s expense, a market study in order to establish a Capitalization Rate. In the event Borrower fails to consent to Lender obtaining a market study, Lender shall determine the Capitalization Rate pursuant to the Underwriting Requirements. Lender shall promptly disclose its determinations to Borrower. Until redetermined, the outstanding Allocable Loan Amounts and Valuations shall remain in effect. Notwithstanding anything in this Agreement to the contrary, no change in Allocable Loan Amounts, Valuations, the Aggregate Loan to Value Ratio, the Aggregate NOI Debt Service Coverage Ratio or the Aggregate Lease Payment Debt Service Coverage Ratio shall, unless resulting from the concurrent release or substitution of Collateral from the Collateral Pool, (i) result in a Potential Event of Default or Event of Default, (ii) require the prepayment of any Note, or (iii) require the addition of Collateral to the Collateral Pool.

Section 2.02. Supplemental Loan.

After the First Anniversary, Borrower may participate in the Fannie Mae Supplemental Loan product, if the Supplemental Loan product is offered by Fannie Mae at the time and if no Targeted Entity is a Prohibited Person. Any such Supplemental Loan is subject to Lender’s determination that, as a result of its annual valuation of the Collateral Pool, a Supplemental Loan may be made pursuant to Lender’s Underwriting Requirements for Tier Four loans in effect at the time of the request. The Supplemental Loan will be documented with loan documents similar to the Loan Documents (“ Supplemental Loan Documents ”). Supplemental Loans will not be loans advanced under this Agreement. Any Supplemental Loan will be priced at market at the time of the loan and will be cross-defaulted with the Term Loan. To secure the obligations of Borrower under the Supplemental Loan Documents, Borrower shall grant, convey and assign to Lender a second Lien on each Mortgaged Property in the Collateral Pool and on any other collateral pledged to Lender from time to time pursuant to the Supplemental Loan Documents. On the closing date of the Supplemental Loan, Lender shall determine the portion of the

Supplemental Loan allocated to a particular Mortgaged Property by Lender (the “ Supplemental Allocable Loan Amount ”), which Supplemental Allocable Loan Amounts shall be set forth in a separate exhibit to this Agreement. Lender shall redetermine the Supplemental Allocable Loan Amounts in the same manner and at the same time as the redetermination of the Allocable Loan Amounts pursuant to Section 2.01(b) . Notwithstanding the foregoing, the Supplemental Loan shall be monitored pursuant to Section 2.01 of this Agreement and Lender shall include the Supplemental Loan upon calculating the Aggregate NOI Debt Service Coverage Ratio, the Aggregate Lease Payment Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio, in connection with any Request. Borrower agrees to pay any fees (including legal fees) that may be charged in connection with a Supplemental Loan.

ARTICLE 3
VALUATIONS/COLLATERAL CHANGES

Section 3.01. Reserved.

Section 3.02. Reserved.

Section 3.03. Right to Obtain Releases of Collateral.

Subject to the terms and conditions of this Article 3, and the limitations set forth in Section 15.17, Borrower shall have the right after the First Anniversary, from time to time, to obtain a release of Collateral from the Collateral Pool.

Section 3.04. Procedure for Obtaining Releases of Collateral.

(a) Request . To obtain a release of Collateral from the Collateral Pool, Borrower may deliver a Release Request to Lender. Upon delivery of the Release Request, Borrower shall not be permitted to re-borrow any amounts that will be prepaid in connection with the release of Collateral.

(b) Closing . If all conditions precedent contained in Section 6.05 and all General Conditions contained in Section 6.01 are satisfied, Lender shall cause the Release Mortgaged Property to be released, at a closing to be held at offices designated by Lender on a Closing Date selected by Lender, and occurring within thirty (30) days after Lender’s receipt of the Release Request (or on such other date as Borrower and Lender may agree), by executing and delivering, and causing all applicable parties to execute and deliver, all at the sole cost and expense of Borrower, the Release Documents. Borrower shall prepare the Release Documents and submit them to Lender for its review.

(c) Release Price . The “ Release Price ” for each Release Mortgaged Property means the greater of (i) one hundred percent (100%) of the Allocable Loan Amount for the Release Mortgaged Property plus one hundred percent (100%) of the Supplemental Allocable Loan Amount for the Release Mortgaged Property and (ii) one hundred percent (100%) of the amount, if any, of the Term Loan Outstanding and any Supplemental Loan Outstanding that is required to be repaid by Borrower to Lender in connection with the proposed release of the A

Release Mortgaged Property from the Collateral Pool, so that, immediately after the release, the Release Coverage and LTV Tests will be satisfied, the Aggregate NOI Debt Service Coverage Ratio or Aggregate Lease Payment Debt Service Coverage Ratio will not be reduced, and the Aggregate Loan to Value Ratio will not be increased as a result of such release. In addition to the Release Price, Borrower shall pay to Lender all associated prepayment premiums and other amounts due under the Notes being repaid. In connection with a non-simultaneous substitution of Collateral pursuant to Section 3.06(c)(ii) of this Agreement, Borrower shall be permitted, in lieu of paying the Release Price, to post a Letter of Credit issued by a financial institution acceptable to Lender and having terms and conditions acceptable to Lender, having a face amount equal to the Release Price.

(d) Application of Release Price . (i) The Release Price for the Release Mortgaged Property shall be applied in the order selected by Borrower, provided that (A) any amount of the Supplemental Loan Outstanding which Borrower elects to prepay must be prepaid in full, or if the Release Price is not sufficient to do so, the Supplemental Loan shall only be partially prepaid; (B) any amount of the Term Loan Outstanding which Borrower elects to prepay must be prepaid in full, or if the Release Price is not sufficient to do so, the Term Loan shall be only partially prepaid; (C) any prepayment is permitted under the applicable Note; (D) any prepayment premium due and owing is paid; and (E) interest is paid through the end of the month. If Borrower does not give Lender direction with respect to the application of the Release Price or if such direction does not comply with the provisions of (A) — (B) above, then the Release Price shall be applied first against any variable rate Supplemental Loan Outstanding so long as the prepayment is permitted under the applicable note, until any variable rate Supplemental Loan is no longer Outstanding (provided that, in the event there are multiple variable rate Supplemental Loans Outstanding, Lender shall determine the order of application of the Release Price taking into account factors including the unpaid principal balance of the variable rate Supplemental Loan notes, and which variable rate Supplemental Loan note Outstanding has the lowest prepayment costs or highest interest rate), then against any Variable Loan Outstanding so long as the prepayment is permitted under the Variable Facility Note, until any Variable Loan is no longer Outstanding, then against any fixed rate Supplemental Loan Outstanding so long as the prepayment is permitted under the applicable note, until any fixed rate Supplemental Loan is no longer Outstanding (provided that, in the event there are multiple fixed rate Supplemental Loans Outstanding, Lender shall determine the order of application of the Release Price taking into account factors including the unpaid principal balance of the fixed rate Supplemental Notes, and which fixed rate Supplemental Loan note Outstanding has the lowest prepayment costs or highest interest rate), then against any Fixed Loan Outstanding as permitted under the applicable Fixed Facility Note.

(ii) In the event Borrower desires to release a Release Mortgaged Property on a date other than the last Business Day of the month, the Release Price or the remainder of the Release Price, if any, shall be held by Lender (or its appointed collateral agent) as substitute Collateral (“Substitute Collateral”), in accordance with a security agreement (if required by Lender) and other documents in form and substance acceptable to Lender. Any Substitute Collateral shall first be used to prepay the applicable Supplemental Loan and then the applicable Term Loan on the last Business Day of the month.

(e) Test for Release . A release may be effected provided that immediately after giving effect to the requested release (i) the Release Coverage and LTV Tests for the Collateral Pool are met, (ii) the Geographical Diversification Requirements are satisfied and (iii) the Level of Care Diversity Requirements are satisfied. Notwithstanding the foregoing, if either the Release Coverage and LTV Tests, the Geographical Diversification Requirements or the Level of Care Diversity Requirements are not satisfied after the release of a Mortgaged Property, such release may be permitted by Lender if the release improves the Collateral Pool based on factors that are consistent with Lender’s Underwriting Requirements and result in improvement in one or more of the following areas: the then current Valuation of the Mortgaged Properties, the then current Aggregate NOI Debt Service Coverage Ratio, the then current Aggregate Lease Payment Debt Service Coverage Ratio or the then current Aggregate Loan to Value Ratio.

Section 3.05. Right to Substitutions.

Subject to the terms and conditions of this Article 3 and the limitations set forth in Section 15.17 , Borrower shall have the right to obtain the release of the Mortgaged Property securing the Term Loan made to Borrower (the “ Release Mortgaged Property ”) by replacing such Mortgaged Property with a Seniors Housing Facility that meets the requirements of this Agreement (the “ Substitute Mortgaged Property ”) thereby effecting a “ Substitution ” of Collateral.

Section 3.06. Procedure for Substitutions.

(a) Request . Borrower shall deliver to Lender a completed and executed Substitution Request. Each Substitution Request shall be accompanied by the following: (i) the information required by the Underwriting Requirements with respect to the proposed Substitute Mortgaged Property and any additional information Lender reasonably requests; and (ii) the payment of all Additional Collateral Due Diligence Fees.

(b) Underwriting.

(i) Lender shall evaluate the proposed Substitute Mortgaged Property in accordance with the Underwriting Requirements.

(ii) A Substitution may be effected provided that: (i) Lender determines that the Substitute Mortgaged Property is of similar or better quality taking into account such factors as age of the asset, property condition and vacancy rate and located in a similar or better market, taking into account such factors as demographics, income levels, market occupancy rates and level of unemployment as the released Seniors Housing Facility, (ii) the proposed Substitute Mortgaged Property individually satisfies the Loan to Value Ratio requirements for all Mortgaged Properties in the Collateral Pool, (iii) immediately after the Substitution, the resulting Collateral Pool satisfies the better of (A) the Substitution Coverage and LTV Tests or (B) the Aggregate Lease Payment Debt Service Coverage Ratio, the Aggregate NOI Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio of the Collateral Pool immediately prior to the Substitution Request, (iv) after the Substitution, the Geographical Diversification Requirements are met, (v) after the Substitution the Level of Care Diversity

Requirements are met, (vi) the Substitute Mortgaged Property is leased to the Master Tenant pursuant to the Operating Lease and Operator pursuant to the Sub-Lease and (vii) if the proposed Substitute Mortgaged Property contains Skilled Nursing Units, the Net Operating Income of the Substitute Mortgaged Property obtained from the Skilled Nursing Units is less than twenty percent (20%). Notwithstanding the foregoing, if either the Substitution Coverage and LTV Tests, the Geographical Diversification Requirements or the Level of Care Diversity Requirements are not satisfied after the Substitution of a proposed Substitute Mortgaged Property, such Substitution may be permitted by Lender if the Substitution improves the Collateral Pool based on factors that are consistent with Lender’s Underwriting Requirements and result in improvement in one or more of the following areas: the then current Valuation of the Mortgaged Properties, the then current Aggregate NOI Debt Service Coverage Ratio, the then current Aggregate Lease Payment Debt Service Coverage Ratio or the then current Aggregate Loan to Value Ratio.

(iii) Within thirty (30) Business Days after receipt of (A) the Substitution Request and (B) all reports, certificates and documents required by the Underwriting Requirements and this Agreement, including a zoning analysis required by Lender in connection with similar loans anticipated to be sold to Fannie Mae, Lender shall notify the applicable Borrower whether the Substitute Mortgaged Property meets the requirements of this Section 3.06(b) and the Underwriting Requirements and the other requirements for the Substitution of a Mortgaged Property as set forth in this Agreement. Within five (5) Business Days after receipt of Lender’s written notice in response to the Substitution Request, Borrower shall notify Lender whether it elects to proceed with the Substitution. If Borrower fails to respond within the period of five (5) Business Days, it shall be conclusively deemed to have elected not to proceed with the Substitution.

(c) Closing . If Lender determines that the Substitution Request satisfies the conditions set forth herein, Borrower timely elects to proceed with the substitution, and all conditions precedent contained in Section 3.05 , Section 3.06 , Section 6.05 , Section 6.06 , Section 6.11 and all General Conditions contained in Section 6.01 are satisfied, the proposed Substitute Mortgaged Property shall be added in replacement of the Mortgaged Property being released, at a closing to be held at offices designated by Lender on a Closing Date selected by Lender and occurring —

(i) if the substitution of the proposed Substitute Mortgaged Property is to occur simultaneously with the release of the Release Mortgaged Property, within sixty (60) days after Lender’s receipt of the applicable Borrower’s election (or on such other date to which Borrower and Lender may agree); or

(ii) if the substitution of the proposed Substitute Mortgaged Property is to occur subsequent to the release of the Release Mortgaged Property, within ninety (90) days after the release of such Release Mortgaged Property (provided such date may be extended an additional ninety (90) days if Borrower provides evidence satisfactory to Lender that Borrower has identified and is under contract to purchase or already owns a suitable proposed Substitute Mortgaged Property) (the “ Property Delivery Deadline ”).

Section 3.07. Substitution Deposit.

(a) The Deposit . If a Substitution of the proposed Substitute Mortgaged Property is to occur subsequent to the release of the Release Mortgaged Property pursuant to Section 3.06(c)(ii) , at the Closing Date of the release of the Release Mortgaged Property, Borrower shall deposit with Lender the “ Substitution Deposit ” described in Section 3.07(b) in the form of cash in a non-interest bearing account held by Lender or, in lieu of depositing cash for the Substitution Deposit, Borrower may post a Letter of Credit issued by a financial institution acceptable to Lender and having terms and conditions acceptable to Lender, having a face amount equal to the Substitution Deposit.

(b) Substitution Deposit Amount . The “ Substitution Deposit ” for each proposed substitution shall be an amount equal to the sum of (i) the Release Price, plus (ii) any and all fee maintenance or prepayment premium for: (A) such Note or Notes designated by Borrower in accordance with the conditions set forth in Section 3.04(d) in connection with the application of Release Price, as the Notes Borrower elects to prepay if the substitution fails to take place or (B) if Borrower does not make such designation or such designation does not comply with the provisions of Section 3.04(d), Lender shall choose such Note in accordance with the provisions of Section 3.04(d) (the “ Selected Note ”), calculated as of the end of the month in which the Property Delivery Deadline occurs, as if the Selected Note were to be prepaid in such month, plus (iii) principal and interest due and owing on the portion of the Selected Note which is to be prepaid through the end of the month in which the Property Delivery Deadline occurs, plus (iv) reasonable costs, expenses and fees of Lender pertaining to the substitution (the “ Substitution Cost Deposit ”). The amount of the Substitution Deposit shall be recalculated by Lender in the event the Property Delivery Deadline is extended pursuant to Section 3.06(c)(ii). If a Substitution of the last remaining asset is taking place, the cash collateral or Letter of Credit must include, (A) any yield maintenance that would be due to the extent that the Fixed Facility Note must be prepaid to effect a release at that time and (B) any fee maintenance that would be due to the extent that the Variable Facility Note must be prepaid to effect a release at that time and (C) the full amount of principal and interest owing under all remaining Notes. The Substitution Cost Deposit shall be used by Lender to cover all reasonable out-of-pocket costs and expenses incurred by Lender and Fannie Mae, including any out-of-pocket legal fees and expenses incurred by Fannie Mae and Lender in connection with such substitution whether such substitution actually closes.

(c) Failure to Close Substitution . If the substitution of the proposed Substitute Mortgaged Property does not occur by the Property Delivery Deadline in accordance with Section 3.06(c)(ii) , then such Borrower shall have irrevocably waived its right to substitute such Release Mortgaged Property with the proposed Substitute Mortgaged Property, and the release of the Release Mortgaged Property shall be deemed a prepayment of the Note. Subject to the terms of Section 3.06(c)(ii) , the Property Delivery Deadline shall be no later than the date ninety (90) days after the date the Lender’s lien on such Release Mortgaged Property is released. Any MBS being prepaid shall be deemed to be prepaid as of the end of the month in which the Property Delivery Deadline falls and the Lender shall follow standard Fannie Mae procedures for the prepayment of the Note, including delivery of the Substitution Deposit (less the Substitution Cost

Deposit) to Fannie Mae in accordance with such procedures. Any portion of the Substitution Deposit not needed to prepay the Note, all interest, and any prepayment fees (including any portion of the Substitution Cost Deposit not used by Lender to cover all reasonable out-of-pocket costs and expenses incurred by Lender and Fannie Mae, including any out-of-pocket legal fees and expenses incurred by Fannie Mae and Lender in connection with such Substitution) shall be promptly refunded to the applicable Borrower after the Property Delivery Deadline.

(d) Substitution Deposit Disbursement . At closing of the Substitution, the Lender shall disburse the Substitution Deposit (less any portion of the Substitution Cost Deposit used by Lender to cover all reasonable out-of-pocket costs and expenses incurred by Lender and Fannie Mae, including any out-of-pocket legal fees and expenses incurred by Fannie Mae and Lender in connection with such substitution) directly to the Borrower at such time as the conditions set forth in Sections 3.05 , 3.06 , 6.05 , 6 .06 , 6.11 and all General Conditions contained in Section 6.01 have been satisfied, which must occur no later than the Property Delivery Deadline.

ARTICLE 4
RESERVED

ARTICLE 5
RESERVED

ARTICLE 6
CONDITIONS PRECEDENT TO ALL REQUESTS

Section 6.01. Conditions Applicable to All Requests.

Borrower’s right to close the transaction requested in a Request shall be subject to Lender’s determination that all of the following general conditions precedent (“ General Conditions ”) have been satisfied, in addition to any other conditions precedent contained in this Agreement:

(a) Geographical Diversification . The Mortgaged Properties in the Collateral Pool satisfy the Geographical Diversification Requirements.

(b) Payment of Expenses . The payment by Borrower of Lender’s and Fannie Mae’s reasonable third party out-of-pocket fees and expenses payable in accordance with this Agreement, including, but not limited to, the legal fees and expenses described in Section 10.03 .

(c) No Material Adverse Change . There has been no material adverse change in the financial condition, business or prospects of Borrower or Key Principal in the physical condition, operating performance or value of any of the Mortgaged Properties (excluding any Mortgaged Property which is requested to be released) since the date of the most recent Compliance Certificate (or, with respect to the conditions precedent to the Term Loan, from the condition, business or prospects reflected in the financial statements, reports and other

information obtained by Lender during its review of Borrower and Key Principal and the Initial Mortgaged Properties).

(d) No Default . Subject to Section 8.25 and the last paragraph of Section 11.01, there shall exist no Event of Default or Potential Event of Default in each case under Sections 11.01(b)-(k) or, in any material respect, under Sections 11.01(a) , (l) or (m) (it being understood and agreed that any default comparable to the Events of Default listed in 11.01(b) - (k) in the other Loan Documents or Supplemental Loan Documents will be treated to be material) on the Closing Date for the Request and, after giving effect to the transaction requested in the Request, no Event of Default or Potential Event of Default shall have occurred.

(e) No Insolvency . Receipt by Lender on the Closing Date for the Request of evidence satisfactory to Lender that neither Borrower nor Key Principal is insolvent (within the meaning of any applicable federal or state laws relating to bankruptcy or fraudulent transfers) or will be rendered insolvent by the transactions contemplated by the Loan Documents, or, after giving effect to such transactions, will be left with an unreasonably small capital with which to engage in its business or undertakings, or will have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature or will have intended to hinder, delay or defraud any existing or future creditor.

(f) No Untrue Statements . The Loan Documents shall not contain any untrue or misleading statement of a material fact and shall not fail to state a material fact necessary to make the information contained therein not misleading except in relation to a Mortgaged Property which is requested to be released.

(g) Representations and Warranties . All representations and warranties made by Borrower and Key Principal in the Loan Documents shall be true and correct in all material respects on the Closing Date for the Request with the same force and effect as if such representations and warranties had been made on and as of the Closing Date for the Request except in relation to a Mortgaged Property which is requested to be released.

(h) No Condemnation or Casualty . Except in connection with a Release Request or a Substitution Request, there shall not be pending or threatened any condemnation or other taking, whether direct or indirect, against the Mortgaged Property and there shall not have occurred any casualty to any improvements located on the Mortgaged Property, which casualty would have a Material Adverse Effect.

(i) Delivery of Closing Documents . The receipt by Lender of the following, each dated as of the Closing Date for the Request, in form and substance satisfactory to Lender in all respects:

(i) The Loan Documents relating to such Request;

(ii) A Compliance Certificate;

(iii) An Organizational Certificate; and

(iv) Such other documents, instruments, approvals (and, if requested by Lender, certified duplicates of executed copies thereof) and opinions as Lender may reasonably request.

(j) Covenants . Except to the extent that a covenant applies exclusively and specifically to a Mortgaged Property which is requested to be released, Borrower is in full compliance with each of the covenants contained in Article 8 and Article 9 of this Agreement, without giving effect to any notice and cure rights of Borrower.

Section 6.02. Conditions Precedent to Term Loan.

The obligation of Lender to make the Term Loan is subject to the following conditions precedent:

(a) Receipt by Lender of the Replacement Reserve Agreement and Completion/Repair Security Agreement;

(b) Receipt by Lender of the Certificate of IDOT Guarantor and IDOT Guaranty;

(c) Receipt by Lender of opinions of counsel to Borrower, counsel to Master Tenant and counsel to Operator in form and content satisfactory to Lender;

(d) Receipt by Lender of the documents and instruments required by Sections 6.11;

(e) Delivery to the Title Company with fully executed instructions directing the Title Company to file and/or record in all applicable jurisdictions, all applicable Loan Documents required by Lender to be filed or recorded, including duly executed and delivered original copies of the Variable Facility Note or Fixed Facility Note, as applicable, the Guaranty, the Initial Security Instruments covering the Initial Mortgaged Properties and UCC-1 Financing Statements covering the portion of the Collateral comprised of personal property, and other appropriate instruments, in form and substance satisfactory to Lender and in form proper for recordation, as may be necessary in the opinion of Lender to perfect the Liens created by the applicable Security Instruments and any other Loan Documents creating a Lien in favor of Lender, and the payment of all taxes, fees and other charges payable in connection with such execution, delivery, recording and filing;

(f) Receipt by Lender of the Initial Origination Fee pursuant to Section 10.01(a) and the Initial Due Diligence Fee pursuant to Section 10.02(a) ; and

(g) Such other documents, instruments, approvals (and, if requested by Fannie Mae and Lender, certified duplicates of executed copies thereof) and opinions as Fannie Mae or Lender may reasonably request.

Section 6.03. Reserved.

Section 6.04. Reserved.

Section 6.05. Conditions Precedent to Release of Property from the Collateral Pool.

The release of a Mortgaged Property from the Collateral Pool is subject to the satisfaction of the following conditions precedent on or before the Closing Date:

(a) Receipt by Lender of the fully executed Release Request.

(b) Immediately after giving effect to the requested release, the provisions of Section 3.04(e) are satisfied.

(c) Receipt by Lender of the Release Price and all amounts owing under Section 3.04(c) ;

(d) Receipt by Lender of the Release Fee;

(e) Receipt by Lender of all legal fees and expenses payable by Borrower in connection with a Release Request.

(f) Receipt by Lender on the Closing Date of one (1) or more counterparts of each Release Document, dated as of the Closing Date, signed by each of the parties (other than Lender) who is a party to such Release Document;

(g) If required in Lender’s judgment under state law in order to preserve and protect Lender’s rights, amendments to this Agreement, the Notes and the Security Instruments, reflecting the release of the Release Mortgaged Property from the Collateral Pool and, as to any Security Instrument or Note so amended or if Lender determines that such endorsement is necessary to maintain the priority of the Lien created in favor of Lender with respect to the Outstanding Indebtedness or to maintain the validity of any Title Insurance Policy, the receipt by Lender of an endorsement to each Title Insurance Policy insuring the Security Instruments, amending the effective date of each Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date, Permitted Liens and other exceptions approved by Lender;

(h) If Lender determines the Release Mortgaged Property to be one (1) phase of a project, and one (1) or more other phases of the project are Mortgaged Properties which will remain in the Collateral Pool (“ Remaining Mortgaged Properties ”), Lender must determine that the Remaining Mortgaged Properties can be operated separately from the Release Mortgaged Property and any other phases of the project which are not Mortgaged Properties and whether any cross use agreements or easements are necessary. In making this determination, Lender shall evaluate access, utilities, marketability, community services, ownership and operation of the

Release Properties and any other issues identified by Lender in connection with similar loans anticipated to be sold to Fannie Mae;

(i) Receipt by Lender of endorsements to the tie-in endorsements of the Title Insurance Policies, if deemed necessary by Lender, to reflect the release;

(j) Receipt by Lender on the Closing Date of a Confirmation of Obligations;

(k) Receipt by Lender prior to the Closing Date of the amendment to the Operating Lease evidencing only the release of the Release Mortgaged Property from the terms of the Operating Lease and adjusting the rent payment under the Operating Lease pursuant to the terms of the Operating Lease.

Section 6.06. Conditions Precedent to Substitutions.

The obligation of Lender to make a requested Substitution is subject to Lender’s determination that each of the following conditions precedent has been met:

(a) Receipt by Lender of the fully executed Substitution Request;

(b) Receipt by Lender of the Substitution Deposit to the extent necessary under Section 3.07 ;

(c) Receipt by Lender of the Additional Collateral Due Diligence Fees and Substitution Fee;

(d) Such Substitute Mortgaged Property shall comply with the provisions of Section 3.06(b) of this Agreement;

(e) Delivery to the Title Company, with fully executed instructions directing the Title Company to file and/or record in all applicable jurisdictions, all applicable Loan Documents required by Lender to be filed or recorded, including duly executed and delivered original copies of the Security Instruments covering the Substitute Mortgaged Properties and UCC-1 Financing Statements covering the portion of the Substitute Mortgaged Property comprised of personal property, and other appropriate instruments, in form and substance satisfactory to Lender and in form proper for recordation, as may be necessary in the opinion of Lender to perfect the Lien created by the applicable additional Security Instrument, and any other relevant Loan Document creating a Lien in favor of Lender, and the payment of all taxes, fees and other charges payable in connection with such execution, delivery, recording and filing;

(f) Receipt by Lender of endorsements to the tie-in endorsements of the Title Insurance Policies, if deemed necessary by Lender, to reflect the substitution;

(g) Receipt of all documents required for the addition of the Substitute Mortgaged Property pursuant to the Underwriting Requirements;

(h) The Borrower is the owner of the proposed Substitute Mortgage Property;

(i) Receipt by Lender on the Closing Date of a Confirmation of Obligations; and

(j) If required by Lender, amendments to this Agreement, the Notes and the Security Instruments, reflecting the Substitution and, as to any Security Instrument or Note so amended or if Lender determines that such endorsement is necessary to maintain the priority of the Lien created in favor of Lender with respect to the Outstanding Indebtedness or to maintain the validity of any Title Insurance Policy, the receipt by Lender of an endorsement to each Title Insurance Policy insuring the Security Instruments, amending the effective date of each Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date, Permitted Liens and other exceptions approved by Lender, together with any reinsurance agreements required by Lender.

(k) Receipt by Lender prior to the Closing Date of the amendment to the Operating Lease evidencing only the following: (i) the release of the Release Mortgaged Property from the terms of the Operating Lease, (ii) the addition of the Substitute Mortgaged Property to the terms of the Operating Lease, and (iii) adjusting the rent payments under the Operating Lease pursuant to the terms of the Operating Lease.

Section 6.07. Reserved.

Section 6.08. Reserved.

Section 6.09. Reserved.

Section 6.10. Delivery of Opinion Relating to Substitution Request.

With respect to the closing of a Substitution Request, it shall be a condition precedent that Lender receives favorable opinions of counsel (including local counsel, Master Tenant’s counsel, Operators counsel, as applicable) to Borrower, as to the due organization and qualification of Borrower, the due authorization, execution, delivery and enforceability of each Loan Document executed in connection with the Request and such other matters as Lender may reasonably require, each dated as of the Closing Date for the Request, in form and substance satisfactory to Lender in all respects.

Section 6.11. Delivery of Property-Related Documents.

With respect to each of the Initial Mortgaged Properties or a Substitute Mortgaged Property, it shall be a condition precedent that Lender receive from Borrower each of the documents and reports required by Lender pursuant to the Underwriting Requirements in connection with the addition of such Mortgaged Property to the Collateral Pool and, each of the following, each dated as of the applicable Closing Date for the Initial Mortgaged Property or a Substitute Mortgaged Property, as the case may be, in form and substance satisfactory to Lender in all respects:

(a) A commitment for the Title Insurance Policy applicable to the Mortgaged Property and a pro forma Title Insurance Policy based on the title commitment in the amount of title insurance afforded by the Title Insurance Policy for each Mortgaged Property in the Collateral Pool equal to (i) if tie-in endorsements are available for all or a portion of the Mortgaged Properties, in an aggregate amount equal to the combined Allocable Loan Amounts for all of the Mortgaged Properties covered by the tie-in endorsements, not to exceed the amount of the amount of the Term Loan, or (ii) if tie-in endorsements are not available for any of the Mortgaged Properties, then with respect to such Mortgaged Properties not subject to the tie-in endorsement an amount equal to 150% of the Valuation of such Mortgaged properties not subject to the tie-in endorsement (or such lesser amount that is the maximum allowed by law or regulation);

(b) the Insurance Policy (or a certified copy of the Insurance Policy) applicable to the Mortgaged Property;

(c) The Survey applicable to the Mortgaged Property;

(d) Evidence satisfactory to Lender of compliance of the Mortgaged Property with Applicable Laws;

(e) A Replacement Reserve Agreement or an amendment thereto, providing for the establishment of a replacement reserve account, to be pledged to Lender, in which the owner shall (unless waived by Lender) periodically deposit amounts for replacements for improvements at the Mortgaged Property and as additional security for Borrower’s obligations under the Loan Documents;

(f) A Completion/Repair and Security Agreement or an amendment thereto, together with required escrows, on the standard form required by Lender;

(g) A Subordination Assignment and Security Agreement for each Mortgaged Property;

(h) An Assignment of Leases and Rents, if Lender determines one to be necessary or desirable, provided that the provisions of any such assignment shall be substantively identical to those in the Security Instrument covering the Collateral, with such modifications as may be necessitated by applicable state or local law;

(i) In relation to each Initial Mortgaged Property, a Security Instrument to effectuate the addition of such Initial Mortgaged Property to the Collateral Pool and in relation to each Substitute Mortgaged Property, a Security Instrument to effectuate the addition of such Substitute Mortgaged Property to the Collateral Pool and a Note relating to the Mortgaged Properties. The amount secured by each Security Instrument shall be equal to the Term Loan;

(j) A Certificate of Borrower;

(k) Indemnification Agreement Regarding Taxes

(l) Any and all Operating Leases, Sub-Leases or leases relating to a Mortgaged Property; and

(m) Such other documents, instruments, approvals (and, if requested by Fannie Mae and Lender, certified duplicates of executed copies thereof) and opinions as Fannie Mae or Lender may reasonably request.

Section 6.12. Letters of Credit.

(a) Letter of Credit Requirements . If Borrower provides Lender with a Letter of Credit pursuant to this Agreement, the Letter of Credit shall be in form and substance satisfactory to Lender and Lender shall be entitled to draw under such Letter of Credit solely upon presentation of a sight draft to the LOC Bank. Any Letter of Credit shall be for a term of at least 110 days. Any Letter of Credit shall be issued by a financial institution satisfactory to Lender and shall have its long-term debt obligations and its short-term debt obligations rated in accordance with the requirements of Fannie Mae then in effect.

(b) Draws Under Letter of Credit . Lender shall have the right to draw monies under the Letter of Credit:

(i) upon the occurrence of (A) an Event of Default; or (B) a Potential Event of Default of which the Borrower has knowledge which has continued for two (2) Business Days;

(ii) upon the failure to close a substitution pursuant to Section 3.07(c); or

(iii) upon the downgrading of the ratings of the long-term or short-term debt obligations of the LOC Bank below the requirements of Fannie Mae then in effect.

(c) Default Draws . If Lender draws under the Letter of Credit pursuant to Section 6.12(b)(i) above, Lender shall have the right to use monies drawn under the Letter of Credit to prepay any Note.

(d) Other Draws . If Lender draws under the Letter of Credit pursuant to Section 6.12(b)(ii) or (iii) above, Lender shall have the right to use monies drawn under the Letter of Credit to prepay a Selected Note as such term is defined in Section 3.07(b).

(e) Legal Opinion . Prior to or simultaneous with the delivery of any new Letter of Credit (but not the extension of any existing Letter of Credit), such Borrower shall cause the LOC Bank’s counsel to deliver a legal opinion substantially in the form of Exhibit Q-1 or Exhibit Q-2 , as applicable, and in any event satisfactory in form and substance to the Lender in the Lender’s discretion.

ARTICLE 7
REPRESENTATIONS AND WARRANTIES

Section 7.01. Representations and Warranties of Borrower.

The representations and warranties of the Borrower are contained in the Certificate of Borrower.

For purposes of the Loan Documents, where Borrower purports to have knowledge and without limiting the scope of the meaning of Borrower’s having actual knowledge, Borrower will automatically and immediately be deemed to have actual knowledge:

(i) of written public disclosure; or

(ii) in the event that Key Principal or REIT Management Research LLC or its successors and assigns has actual knowledge.

Section 7.02. Representations and Warranties of Lender.

Lender hereby represents and warrants to Borrower as follows as of the date hereof:

(a) Due Organization . Lender is a national banking association duly organized, validly existing and in good standing under the laws of the United States.

(b) Power and Authority . Lender has the requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.

(c) Due Authorization . The execution and delivery by Lender of this Agreement, and the consummation by it of the transactions contemplated thereby, and the performance by it of its obligations thereunder, have been duly and validly authorized by all necessary action and proceedings by it or on its behalf.

ARTICLE 8
AFFIRMATIVE COVENANTS OF BORROWER

Borrower agrees and covenants with Lender that, at all times during the Term of this Agreement:

Section 8.01. Compliance with Agreements.

(a) Borrower shall comply with all the terms and conditions of each Loan Document to which it is a party or by which it is bound; provided, however, that Borrower’s failure to comply with such terms and conditions shall not be an Event of Default until the expiration of the applicable notice and cure periods, if any, specified in the applicable Loan Document.

(b) Borrower shall comply with all the material terms and conditions of any building permits or any conditions, easements, rights-of-way or covenants of record, restrictions of record or any recorded or, to the extent Borrower has knowledge thereof, unrecorded agreement affecting or concerning any Mortgaged Property including planned development

permits, condominium declarations, and reciprocal easement and regulatory agreements with any Governmental Authority; provided, however, that Borrower’s failure to comply with such terms and conditions shall not be an Event of Default until the expiration of the applicable notice and cure periods, if any, specified in the applicable document.

Section 8.02. Maintenance of Existence.

(a) Borrower shall maintain its existence and continue to be organized under the laws of the state of its organization. Borrower shall continue to be duly qualified to do business in each jurisdiction in which such qualification is necessary to the conduct of its business and where the failure to be so qualified would adversely affect the validity of, the enforceability of, or the ability to perform, its obligations under this Agreement or any other Loan Document.

(b) During the Term of this Agreement, if Key Principal intends to qualify, and be taxed as, a real estate investment trust under Subchapter M of the Internal Revenue Code, Key Principal will not be engaged in any activities which would reasonably be anticipated to jeopardize such qualification and tax treatment.

Section 8.03. Financial Statements; Accountants’ Reports; Other Information.

(a) Borrower shall keep and maintain at all times at the address set forth in Section 15.08 of this Agreement, and upon Lender’s request shall make available at the Mortgaged Property, complete and accurate books of accounts and records (including copies of supporting bills and invoices) in sufficient detail to correctly reflect (i) all of Borrower’s and Key Principal’s financial transactions and assets, and (ii) the results of its operations, Borrower shall cause each Operator to keep and maintain at all times at the address set forth in Section 11 of the Subordination, Assignment and Security Agreement or at the Mortgaged Properties complete and accurate books of accounts and records (including copies of supporting bills and invoices) in sufficient detail to correctly reflect (x) all its financial transactions and assets, and (y) the results of the operation of each Mortgaged Property, and copies of all written contracts, Leases and other instruments which affect each Mortgaged Property (including all bills, invoices and contracts for electrical service, gas service, water and sewer service, waste management service, telephone service and management services). The books, records, contracts, Leases and other instruments shall be subject to examination and inspection at any reasonable time by Lender.

(b) In addition, Borrower (with respect to clauses (i), (ii), (iii), (ix) and (xi) set forth below) shall furnish, or cause to be furnished, to Lender:

(i) Annual Financial Statements . As soon as available, and in any event within ninety (90) days after the close of its fiscal year during the Term of this Agreement, the balance sheet showing all assets and liabilities of Borrower and Key Principal as of the end of such fiscal year, the statement of income, expenses, equity and retained earnings of Borrower’s operation and Key Principal’s operation for such fiscal year, and the statement of changes in financial position and cash flows of Borrower and Key Principal for such fiscal year, all in reasonable detail and stating in comparative form the respective figures for the

corresponding date and period in the prior fiscal year, prepared in accordance with GAAP consistently applied and accompanied by a certificate of Borrower’s and Key Principal’s independent certified public accountants to the effect that (a) such financial statements have been externally prepared by and reviewed by such accountants, (b) such financial statements fairly present the results of its operations and financial condition for the periods and dates indicated, with such certification to be free of exceptions and qualifications as to the scope of the audit as to the going concern nature of the business. As soon as available, and in any event within ninety (90) days after the close of its fiscal year during the Term of this Agreement, Key Principal’s Chief Financial Officer will provide to Lender, a letter as of January 1 of each year, to the effect that such officer has reviewed the records and systems of the Borrower and the Key Principal and that Borrower is in compliance with subsections (v), (vi) and (xvi) of the Single- Purpose requirements (as set forth in the definition of Single-Purpose herein) (the “Compliance Letter”). If the Key Principal is no longer a publicly traded entity, such Compliance Letter will be provided by Borrower and Key Principal’s independent certified public accounting firm or any other nationally recognized accounting firm and such Compliance Letter will be based upon agreed upon procedures satisfactory to Lender. All financial statements required by this subsection (i) with respect to Key Principal shall be audited, and all financial statements required by this subsection (i) with respect to Borrower may be unaudited;

(ii) Quarterly Financial Statements . As soon as available, and in any event within forty five (45) days after each of the first three fiscal quarters of each fiscal year during the Term of this Agreement, the unaudited balance sheet showing all assets and liabilities of Borrower as of the end of such fiscal quarter, the unaudited statement of income, expenses, equity and retained earnings of Borrower and the unaudited statement of changes in financial position and cash flows of Borrower for the portion of the fiscal year ended with the last day of such quarter, and if required by Lender, a statement of income and expenses of each Mortgaged Property for the prior month, all prepared in accordance with GAAP and in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the previous fiscal year, accompanied by a certificate of an authorized representative of Borrower reasonably acceptable to Lender stating that such financial statements have been prepared in accordance with GAAP, consistently applied, and fairly present the results of its operations and financial condition for the periods and dates indicated, subject to year end adjustments in accordance with GAAP;

(iii) Quarterly Property Statements . As soon as available, and in any event within forty five (45) days after each Calendar Quarter, a statement of income and expenses of each Mortgaged Property prepared in accordance with GAAP and accompanied by a certificate of an authorized representative of Borrower reasonably acceptable to Lender to the effect that each such statement of income and expenses fairly, accurately and completely presents, in all material respects, the operations of each such Mortgaged Property for the period indicated;

(iv) Annual Property Statements . On an annual basis within forty five (45) days after the close of its fiscal year, an annual statement of income and expenses of each Mortgaged Property accompanied by a certificate of an authorized representative of Borrower

reasonably acceptable to Lender to the effect that each such statement of income and expenses fairly, accurately and completely presents, in all material respects, the operations of each such Mortgaged Property for the period indicated;

(v) Intentionally Deleted;

(vi) Updated Rent Rolls . Within forty five (45) days after each Calendar Quarter, and at any other time upon Lender’s request, a current Rent Roll for each Mortgaged Property, showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid and any other information requested by Lender and accompanied by a certificate of an authorized representative of Borrower reasonably acceptable to Lender to the effect that each such Rent Roll fairly, accurately and completely presents the information required therein;

(vii) Security Deposit Information . Within forty five (45) days after each Calendar Quarter, and at any other time upon Lender’s request, a listing of all security deposits held in connection with any Lease of any part of any Mortgaged Property, including the name and identification number of the accounts in which such security deposits are held, the name and address of the financial institutions in which such security deposits are held and the name and telephone number of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts;

(viii) Accountants’ Reports; Other Reports . Promptly upon receipt thereof: (i) copies of any reports or management letters submitted to Borrower by its independent certified public accountants in connection with the examination of its financial statements made by such accountants (except for reports otherwise provided pursuant to subsection (a) above); provided, however, that Borrower shall only be required to deliver such reports and management letters to the extent that they relate to Borrower or any Mortgaged Property; and (ii) all schedules, financial statements or other similar reports delivered by Borrower pursuant to the Loan Documents or requested by Lender with respect to Borrower’s business affairs or condition (financial or otherwise) or any of the Mortgaged Properties;

(ix) Ownership Interests . Within 120 days after the end of each fiscal year of Borrower, and at any other time upon Lender’s request, a statement that identifies all owners of any interest in Borrower and the interest held by each, if Borrower is a corporation, all officers and directors of Borrower, and if Borrower is a limited liability company, all managers who are not members;

(x) Complaints . By the 15 th day of each month, copies of any complaint filed against Borrower or any Mortgaged Property management during the prior month alleging any violation of fair housing law, handicap access or the Americans with Disabilities Act and any final administrative or judicial dispositions of such complaints.

(xi) Resident Care Agreements . Upon the Lender’s request, copies of resident care agreements.

(xii) Other Information . Upon the Lender’s request, a property management report for each Mortgaged Property and any other information reasonably requested by Lender.

(xiii) Regulatory or Licensing . Within 10 Business Days after receipt thereof, copies of all material inspection reports, surveys, reviews, and certifications prepared by, for, or on behalf of any licensing or regulatory authority relating to any Mortgaged Property and any legal actions, orders, notices, or reports relating to any Mortgaged Property issued by the applicable regulatory or licensing authorities which in any instance would cause Borrower to be in noncompliance with any term or covenant in this Agreement.

For purposes of this paragraph an inspection report, survey, review or certification or related correspondence is material if: (i) it contains 8 or more deficiencies or items which need to be corrected or (ii) if it relates to assisted living units, it requires a plan of correction or otherwise imposes or threatens to impose sanctions or penalties of any kind or (iii) if it relates to skilled nursing units, cites any deficiency which has a scope and severity of “F” or higher or otherwise imposes or threatens to impose sanctions or penalties of any kind.

(xiv) Services and Operations . Upon the request of Lender, copies of all reports relating to the services and operations of each Mortgaged Property, including, if applicable, Medicaid cost reports and records relating to account balances due to or from Medicaid or any private insurer.

(xv) Intentionally Deleted .

(xvi) Certification . All certifications required to be delivered pursuant to this Agreement shall run directly to and be for the benefit of Lender and Fannie Mae.

(xvii) Standards . Each of the statements, schedules and reports required by this Agreement shall be certified to be complete and accurate, or in the case of financial statements, to fairly present the information presented, by an individual having authority to bind Borrower or Operator, as the case may be, and shall be in such form and contain such detail as Lender may reasonably require.

(xviii) Books and Records . If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender upon written demand all books and records relating to its Mortgaged Property or its operation.

(xix) Incident Reports . By the 15 th day of each month, copies of all incident reports submitted by or on behalf of Borrower during the prior month to any liability insurance carrier or any elderly affairs, regulatory or licensing authority.

(xx) Annual Financial Statements of Operator . Within 10 days of submission to Borrower by Master Tenant or Operator, the financial statements, reports, documents, communications and information delivered to Borrower by Master Tenant or

Operator pursuant to the Operating Lease as in effect on the date of this Agreement, to the extent not otherwise provided under this Agreement.

(xxi) Annual Budgets . Within sixty (60) days after the start of its fiscal year, an annual budget for each Mortgaged Property for such fiscal year, setting forth an estimate of all of the costs and expenses, including capital expenses, of maintaining and operating each Mortgaged Property.

(c) Each of the statements, schedules and reports required by Section 8.03 shall be certified to be complete and accurate in all material respects by an individual having authority to bind Borrower, and shall be in such form and contain such detail as Lender may reasonably require. After an Event of Default, Lender also may require that any statements, schedules or reports be audited at Borrower’s expense by independent certified public accountants acceptable to Lender.

(d) After an Event of Default, Lender shall have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender shall become immediately due and payable and shall become an additional part of the Indebtedness as provided in Section 12 of each Security Instrument.

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

(f) Borrower irrevocably authorizes Lender to obtain a credit report on Borrower at any time.

(g) If an Event of Default has occurred and Lender has not previously required Borrower to furnish a quarterly statement of income and expense for the Mortgaged Property, Lender may require Borrower to furnish such a statement within forty-five (45) days after the end of each fiscal quarter of Borrower following such Event of Default.

Section 8.04. Access to Records; Discussions With Officers and Accountants.

To the extent permitted by law and in addition to the applicable requirements of the Security Instruments, Borrower shall permit Lender and shall cause the Operator to permit Lender to:

(a) inspect, make copies and abstracts of, and have reviewed or (after an Event of Default) audited, such of Borrower’s and/or the Operator’s books and records as may relate to the Obligations or any Mortgaged Property;

(b) at any time discuss Borrower’s affairs, finances and accounts with Borrower’s Senior Management or property managers and (provided that an officer of Borrower or Key Principal has been given the opportunity by Lender to be a party to such discussion)

independent public accountants; after an Event of Default, discuss Borrower’s affairs, finances and account with Key Principal’s officers, partners and employees;

(c) discuss the Mortgaged Properties’ conditions, operations or maintenance with the officers of the Operator of such Mortgaged Properties, the officers and employees of Borrower and/or the Key Principal; and

(d) receive any other information that Lender reasonably deems necessary or relevant in connection with the Term Loan, any Loan Document or the Obligations from the officers and employees of such Borrower or third parties.

Notwithstanding the foregoing, prior to an Event of Default and so long as no Potential Event of Default has occurred and is continuing and in the absence of an emergency, all inspections shall be conducted at reasonable times during normal business hours upon reasonable notice to Borrower.

Section 8.05. Certificate of Compliance.

Borrower shall deliver to Lender concurrently with the delivery of the financial statements and/or reports required by Section 8.03(a) and Section 8.03(b) a certificate signed by an authorized representative of Borrower reasonably acceptable to Lender (i) setting forth in reasonable detail the calculations required to establish whether Borrower and Key Principal were in compliance with the requirements of this Agreement on the date of such financial statements, and (ii) stating that, to the best knowledge of such individual following reasonable inquiry, no Event of Default or Potential Event of Default has occurred, or if an Event of Default or Potential Event of Default has occurred, specifying the nature thereof in reasonable detail and the action Borrower is taking or proposes to take. Any certificate required by this Section shall run directly to and be for the benefit of Lender and Fannie Mae.

Section 8.06. Maintain Licenses.

Borrower shall procure and maintain or cause the Operator to procure and maintain full force and effect all licenses, Permits, charters and registrations which are material to the conduct of its business and shall abide by and satisfy all terms and conditions of all such licenses, Permits, charters and registrations.

Section 8.07. Inform Lender of Material Events.

Borrower shall promptly inform Lender in writing of any of the following (and shall deliver to Lender copies of any related written communications, complaints, orders, judgments and other documents relating to the following) of which Borrower has actual knowledge:

(a) Defaults . The occurrence of any Event of Default or any Potential Event of Default under this Agreement or any other Loan Document or any “Default” or “Event of Default” under the Operating Lease, Sub-Lease or any loan document in connection with a Supplemental Loan;

(b) Regulatory Supervision or Penalty . The commencement of any rulemaking or disciplinary proceeding or the promulgation of any proposed or final rule which would have, or may reasonably be expected to have, a Material Adverse Effect; the receipt of notice from any Governmental Authority having jurisdiction over Borrower or Operator that (A) Borrower or Operator is being placed under regulatory supervision, (B) any License, Permit, charter, membership or registration material to the conduct of Borrower’s or Operator’s business or the Mortgaged Properties is to be suspended or revoked or (C) Borrower or Operator is to cease and desist any practice, procedure or policy employed by Borrower or Operator in the conduct of its business, and such cessation would have, or may reasonably be expected to have, a Material Adverse Effect;

(c) Bankruptcy Proceedings . The commencement of any proceedings by or against Borrower, Operator or Key Principal under any applicable bankruptcy, reorganization, liquidation, insolvency or other similar law now or hereafter in effect or of any proceeding in which a receiver, liquidator, trustee or other similar official is sought to be appointed for any such party;

(d) Environmental Claim . The receipt from any Governmental Authority or other Person of any notice of violation, claim, demand, abatement, order or other order or direction (conditional or otherwise) for any damage, including personal injury (including sickness, disease or death), tangible or intangible property damage, contribution, indemnity, indirect or consequential damages, damage to the environment, pollution, contamination or other adverse effects on the environment, removal, cleanup or remedial action or for fines, penalties or restrictions, resulting from or based upon (i) the existence or occurrence, or the alleged existence or occurrence, of a Hazardous Substance Activity on any Mortgaged Property in violation of any law or (ii) the violation, or alleged violation, of any Hazardous Materials Laws in connection with any Mortgaged Property or any of the other assets of Borrower;

(e) Material Adverse Effects . The occurrence of any act, omission, change or event (including the commencement or written threat of any proceedings by or against Borrower in any Federal, state or local court, or before any Governmental Authority, or before any arbitrator), that has, or would have, a Material Adverse Effect, subsequent to the date of the most recent audited financial statements of Borrower delivered to Lender pursuant to Section 8.03 ;

(f) Accounting Changes . Any material change in Borrower’s accounting policies or financial reporting practices;

(g) Legal and Regulatory Status . The occurrence of any material act, omission, change or event, including any Governmental Approval, the result of which is to change or alter in any way the legal or regulatory status of Borrower or Operator;

(h) Change in Senior Management . Any change in the identity of Senior Management; and

(i) Legal Proceedings . The commencement or written threat of, or amendment to, any proceedings by or against Borrower, Master Tenant or any Operator in any

Federal, state or local court or before any Governmental Authority, or before any arbitrator, which, if adversely determined, would have, or at the time of determination may reasonably be expected to have, a Material Adverse Effect.

Section 8.08. Compliance with Applicable Law.

Borrower shall comply and shall cause the Operator to comply in all material respects with all Applicable Laws now or hereafter affecting any Mortgaged Property or any part of any Mortgaged Property or requiring any alterations, repairs or improvements to any Mortgaged Property. Borrower shall procure and continuously maintain or shall cause the Operator to procure and maintain in full force and effect, and shall abide by and satisfy or shall cause the Operator to abide by and satisfy all material terms and conditions of all Permits and shall comply with all written notices from Governmental Authorities. Borrower shall comply and shall cause the Operator to comply in all material respects with all requirements of insurance companies or similar organizations which have provided insurance with respect to Borrower or any Mortgaged Property, affecting the operation or use of any Mortgaged Property or the consummation of the transactions to be effected by this Agreement or any of the other Loan Documents.

Section 8.09. Alterations to the Mortgaged Properties.

Borrower shall have the right to undertake, or permit to be undertaken, any alteration, improvement, demolition, removal or construction (collectively, “ Alterations ”) to the Mortgaged Properties without the prior consent of Lender; provided, however, that in any case, no such Alteration shall be made to any Mortgaged Property without the prior written consent of Lender if (i) such Alteration when completed could reasonably be expected to adversely affect the value of such Mortgaged Property or its operation as a Senior Housing Facility in substantially the same manner in which it is being operated on the date such property became Collateral, (ii) the construction of such Alteration could reasonably be expected to result in interference to the occupancy of tenants of such Mortgaged Property such that tenants in occupancy with respect to five percent (5%) or more of the Leases would be permitted to terminate their Leases or to abate the payment of all or any portion of their rent, or (iii) such Alteration will be completed in more than twelve (12) months from the date of commencement or in the last year of the Term of this Agreement. Lender acknowledges that Borrower may request consent to perform an Expansion (as defined in the Expansion Security Agreement) to the Mortgaged Property known as Heartsfield at Easton, pursuant to the terms of the Expansion Security Agreement. In the event such request is made and such consent is granted, Borrower agrees to execute and deliver the Expansion Security Agreement and to cause Key Principal to execute and deliver the Expansion Guaranty. Notwithstanding the foregoing, Borrower must obtain Lender’s prior written consent to construct Alterations with respect to the Mortgaged Property costing in excess of, with respect to any Mortgaged Property, the number of units in such Mortgaged Property multiplied by $3,000, but in any event, costs in excess of $500,000 within a Calendar Year and Borrower must give prior written notice to Lender of its intent to construct Alterations with respect to such Mortgaged Property costing in excess of $250,000. For purposes of this Section 8.09, the defined term Alterations is not intended to include any (i) routine maintenance, routine repairs or routine

capital expenditures or (ii) repairs or capital expenditures specified in the Completion Repair and Security Agreement or Replacement Reserve Agreement.

Section 8.10. Loan Document Taxes.

If any tax, assessment or Imposition (other than a franchise tax or excise tax imposed on or measured by, the net income or capital (including branch profits tax) of Lender (or any transferee or assignee thereof, including a participation holder)) (“ Loan Document Taxes ”) is levied, assessed or charged by the United States, or any State in the United States, or any political subdivision or taxing authority thereof or therein upon any of the Loan Documents or the obligations secured thereby, the interest of Lender in the Mortgaged Properties, or Lender by reason of or as holder of the Loan Documents, Borrower shall pay all such Loan Document Taxes to, for, or on account of Lender (or provide funds to Lender for such payment, as the case may be) within 30 days after written notice thereof by Lender and shall promptly furnish proof of such payment to Lender, as applicable. In the event of passage of any law or regulation permitting, authorizing or requiring such Loan Document Taxes to be levied, assessed or charged, which law or regulation in the opinion of counsel to Lender may prohibit Borrower from paying the Loan Document Taxes to or for Lender, Borrower shall enter into such further instruments as may be permitted by law to obligate Borrower to pay such Loan Document Taxes.

Section 8.11. Further Assurances.

Borrower, at the request of Lender, shall execute and deliver and, if necessary, file or record such statements, documents, agreements, UCC financing and continuation statements and such other instruments and take such further action as Lender from time to time may reasonably request as reasonably necessary, desirable or proper to carry out more effectively the purposes of this Agreement or any of the other Loan Documents or to subject the Collateral to the lien and security interests of the Loan Documents or to evidence, perfect or otherwise implement, to assure the lien and security interests intended by the terms of the Loan Documents or in order to exercise or enforce its rights under the Loan Documents. If Lender believes that an “all-asset” collateral description, as contemplated by Section 9-504(2) of the UCC, is appropriate as to any Collateral under any Loan Document, the Lender is irrevocably authorized to use such a collateral description, whether in one or more separate filings or as part of the collateral description in a filing that particularly describes the collateral.

Section 8.12. Transfer of Ownership Interests in Borrower.

(a) Prohibition on Transfers . Subject to paragraph (b) of this Section, no Targeted Entity shall cause or permit a Transfer or a Change of Control.

(b) Permitted Transfers . Notwithstanding the provisions of paragraph (a) of this Section, or any other provisions of this Agreement or any other Loan Document to the contrary, the following Transfers by a Targeted Entity, (upon thirty (30) days’ prior written notice to Lender, in the case of subclauses (iv) and (v) below and in the case of subclause (iii) within thirty (30) days of such event), are permitted without the consent of Lender:

(i) A Transfer of any direct or indirect Ownership Interest in Key Principal; provided, however, that no Change of Control occurs as the result of such Transfer.

(ii) The issuance by Key Principal of additional membership interests or stock (including by creation of a new class or series of interests or stock and all varieties of convertible debt, equity and other similar securities), as the case may be, and the subsequent direct or indirect Transfer of such interests or stock; provided, however, that no Change of Control occurs as the result of such Transfer.

(iii) Any amendment, modification or any other change in the governing instrument or instruments of Key Principal; provided, however, that no Change of Control or material change in the decision making process occurs as the result of such Transfer.

(iv) A merger with or acquisition of another entity by Key Principal, provided that (1) such merger is not with or acquisition is not of Five Star Quality Care, Inc. or any subsidiaries of Five Star Quality Care, Inc., (2) no Change in Control occurs and (3) such merger or acquisition does not result in an Event of Default, as such terms are defined in this Agreement.

(v) A Transfer of 100% of the Ownership Interests in the Borrower to a Single Purpose entity that is wholly owned by the Key Principal.

Section 8.13. Transfer of Ownership of Mortgaged Property.

(a) Prohibition on Transfers . Subject to paragraph (b) of this Section, Borrower shall not cause or permit a Transfer of all or any part of a Mortgaged Property or interest in any Mortgaged Property.

(b) Permitted Transfers . Notwithstanding provision (a) of this Section or any other provisions of this Agreement or any other Loan Document to the contrary, the following Transfers of a Mortgaged Property by Borrower are permitted without the consent of Lender:

(i) The grant of a leasehold interest in individual dwelling units or commercial spaces in accordance with the Security Instrument.

(ii) A sale or other disposition of obsolete or worn out personal property which is contemporaneously replaced by comparable personal property of equal or greater value which is free and clear of liens, encumbrances and security interests other than those created by the Loan Documents or Permitted Liens.

(iii) The creation of a mechanic’s or materialmen’s lien or judgment lien against a Mortgaged Property which is released of record, bonded or otherwise remedied to Lender’s satisfaction within thirty (30) days of the date of creation.

(iv) The grant of an easement if, prior to the granting of the easement, Borrower causes to be submitted to Lender all information required by Lender to evaluate the

easement, and if Lender consents to such easement based upon Lender’s determination that the easement will not materially adversely affect the operation of the Mortgaged Property or Lender’s interest in the Mortgaged Property and Borrower pays to Lender, on demand, all reasonable third party out-of-pocket costs and expenses incurred by Lender in connection with reviewing Borrower’s request. Lender shall not unreasonably withhold its consent to or withhold its agreement to subordinate the lien of a Security Instrument to (1) the grant of a utility easement serving a Mortgaged Property to a publicly operated utility, or (2) the grant of an easement related to expansion or widening of roadways, driveways or parking areas, provided that any such easement is in form and substance reasonably acceptable to Lender and does not materially and adversely affect the access, use or marketability of a Mortgaged Property.

(v) The execution of the Operating Lease and any Sub-Lease, and of any replacement Operating Lease and any replacement Sub-Lease entered into in accordance with Section 8.19 .

(vi) Any commercial sub-lease of a Mortgaged Property permitted by Section 4 of any Subordination, Assignment and Security Agreement.

(c) Assumption of Collateral Pool . Notwithstanding paragraph (a) of this Section, a Transfer of the entire Collateral Pool may be permitted with the prior written consent of Lender if each of the following requirements is satisfied:

(i) the transferee (“ New Collateral Pool Borrower ”) is a Single-Purpose entity, is not directly or indirectly owned by and is not a Prohibited Person and executes an assumption agreement that is acceptable to Lender pursuant to which such New Collateral Pool Borrower assumes all obligations of Borrower under all the applicable Loan Documents and Supplemental Loan Documents;

(ii) the applicable Loan Documents and Supplemental Loan Documents shall be amended and restated as deemed necessary or appropriate by Lender to meet the then-applicable requirements of Fannie Mae; provided, however, any waivers granted in connection with the Term Loan or Supplemental Loan will not be reinstated unless specifically approved by Lender and Fannie Mae;

(iii) after giving effect to the assumption, the requirements of Section 6.05 and the General Conditions contained in Section 6.01 shall be satisfied;

(iv) New Collateral Pool Borrower shall make such deposits to the reserves or escrow funds established under the Loan Documents and Supplemental Loan Documents, including replacement reserves, completion/repair reserves, and all other required escrow and reserve funds at such times and in such amounts as determined by Lender at the time of the assumption;

(v) New Collateral Pool Borrower shall propose a guarantor acceptable to Lender, which guarantor is not directly or indirectly owned by and is not a Prohibited Person executes and delivers a guaranty acceptable to Lender provided that the

guaranty is guaranteeing a non-recourse loan with comparable exceptions to non-recourse as set forth in Section 14.01 ;

(vi) Lender shall be the servicer of the loan; and

(vii) the requirements of Section 8.14 are satisfied.

Section 8.14. Consent to Prohibited Transfers.

(a) Consent to Prohibited Transfers . Lender may, in its sole and absolute discretion, consent to a Transfer that would otherwise violate Sections 8.12 and 8.13 if, prior to the Transfer, Borrower has satisfied or caused to be satisfied each of the following requirements:

(i) the submission to Lender of all information required by Lender to make the determination required by this Section;

(ii) the absence of any Event of Default;

(iii) the transferee and any guarantor is not directly or indirectly owned by and is not a Prohibited Person and meets all of the eligibility, credit, management and other standards (including any standards with respect to previous relationships between Lender and the transferee and the organization of the transferee) customarily applied by Lender at the time of the proposed Transfer to the approval of borrowers or guarantors, as the case may be, in connection with the origination or purchase of similar mortgages, deeds of trust or deeds to secure debt on Seniors Housing Facilities;

(iv) in the case of a Transfer of direct or indirect ownership interests in Borrower, if transferor or any other person has obligations under any Loan Documents, the execution by the transferee or one (1) or more individuals or entities acceptable to Lender and/or Fannie Mae of an assumption agreement, guaranty or any other required loan documents, as applicable, that is acceptable to Lender and that, among other things, requires the transferee to perform all obligations of transferor or such person set forth in such Loan Document, and may require that the transferee comply with any provisions of this Agreement or any other Loan Document which previously may have been waived by Lender;

(v) Lender’s receipt of all of the following:

(A) a transfer fee equal to one percent (1%) of the unpaid Outstanding principal balance of the Term Loan.

(B) In addition, Borrower shall be required to reimburse Lender for all of Lender’s reasonable out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Transfer request.

(vi) The Transfer will not result in a significant modification under Section 1001 of the Internal Revenue Code of any Fixed Loan or any Variable Loan that has been securitized in a mortgage-backed security.

Section 8.15. Date-Down Endorsements.

Before the release or substitution of a Mortgaged Property and at any time and from time to time that Lender has reason to believe that an additional lien may encumber a Mortgaged Property, Lender may obtain an endorsement to each Title Insurance Policy containing a revolving credit endorsement, amending the effective date of each such Title Insurance Policy to the date of the title search performed in connection with the endorsement. Borrower shall pay for the cost and expenses incurred by Lender to the Title Company in obtaining such endorsement, provided that, for each Title Insurance Policy, it shall not be liable to pay for more than one (1) such endorsement in any consecutive twelve (12) month period.

Section 8.16. Ownership of Mortgaged Properties.

Borrower or an IDOT Guarantor shall be the sole owner of each of the Mortgaged Properties free and clear of any Liens other than Permitted Liens.

Section 8.17. Compliance with Net Worth Test.

Until the date upon which all of the conditions set forth in Section 8.25 are satisfied, Key Principal shall at all times maintain its Net Worth so that it is not less than $515,000,000.

Section 8.18. Compliance with Liquidity Test.

Until the date upon which all of the conditions set forth in Section 8.25 are satisfied, Key Principal shall at all times ensure that the sum of (i) cash and Cash Equivalents maintained by it and (ii) the amount available to be drawn by it under its lines of credit (including, without limitation, under the Amended and Restated Credit Agreement dated as of July 29, 2005, as amended, with certain lenders and Wachovia Bank, National Association, as administrative Agent) is not less than $21,000,000.

Section 8.19. Master Tenant and Operator.

The Borrower shall not remove or permit or suffer the removal of the Master Tenant or the Operator without the prior written consent of the Lender and unless and until Lender has approved in writing a replacement Master Tenant or Operator as the case may be. If any Master Tenant and/or Operator is removed by Lender pursuant to the terms and conditions of the Loan Documents, Borrower agrees to use commercially reasonable efforts to enter into a new lease with a new Master Tenant and establish a new Operator on or prior to the effective date of termination unless otherwise directed by Lender. Any new Master Tenant or Operator must be approved in writing by Lender. Any operating lease or other similar agreement between the Borrower and a new Master Tenant and any Sub-Lease or management agreement with any new Operator must be approved in writing by Lender and the Borrower, new Master Tenant and each

new Operator must execute and deliver to Lender a Subordination, Assignment and Security Agreement. The Borrower shall cause the Master Tenant and Operator to notify Lender in writing of any name change or any change in its place of incorporation. The Borrower agrees that the Lender shall have the right to remove the Master Tenant and the Operator at any time: (i) upon the occurrence of an Event of Default under (and as defined in) the Operating Lease or Sub-Lease and (ii) upon the occurrence of an “Event of Default” under (and as defined in) any Subordination, Assignment and Security Agreement.

Section 8.20. Borrower and Any Operating Lease.

Except in connection with a transaction permitted under Sections 8.12, 8.13, 8.14 or 8.19, Borrower shall not assign its rights under the Operating Lease and shall cause Master Tenant and Operator to not assign either of their rights under the Operating Lease or Sub-Lease, without the prior written consent of Lender. Within five days of Borrower’s receipt, Borrower shall give Lender written notice of any notice or information that Borrower receives which indicates that either Borrower, Master Tenant or Operator is in default under the terms of any Operating Lease or Sub-Lease, Operator is terminating the Sub-Lease, Master Tenant is terminating the Operating Lease or that Operator is otherwise discontinuing its operation and management of the Mortgaged Property.

Section 8.21. Enforcement of Leases.

Borrower will comply with and shall (a) enforce the obligations of the Master Tenant under the Operating Lease, (b) cause the Master Tenant to perform its obligations under the Sub-Lease as sub-landlord and (c) cause the Operator to perform its obligations under the Sub-Lease. Borrower shall not and shall cause Master Tenant or Operator, as the case may be, not

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