NEW ISSUE – BOOK ENTRY ONLY

RATINGS: Senior Bonds: “A+”

Second Tier Bonds: “BBB”
(See “Ratings” herein)
In the opinion of McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the Issuer, assuming compliance with certain covenants by the Borrower
and the Issuer (each as defined below), under existing statutes, regulations, published rulings and judicial decisions existing on the date hereof, (i) interest on
the Series 2017A-1 Bonds and the Second Tier Bonds is, except as set forth under “Tax Matters” herein, excludable from gross income for federal income taxation
purposes, and (ii) the Series 2017A-1 Bonds and the Second Tier Bonds will not be treated as “specified private activity bonds” the interest on which would be
included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986. In addition, the Series 2017 Bonds are
also exempt from State of Oklahoma taxation, except inheritance, estate or transfer taxes. See the caption “Tax Matters” herein for a description of Bond Counsel’s
opinion, including a discussion of the alternative minimum tax consequences.
Interest on the Series 2017A-2 Bonds is not excludable from gross income for federal income tax purposes.

$30,275,000
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. – Autumn Leaves Project)
Series 2017
consisting of
$14,640,000 $3,240,000 $12,395,000
Senior Living Revenue Bonds Senior Living Revenue Bonds Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. – (Leading Life Senior Living, Inc. – (Leading Life Senior Living, Inc. –
Autumn Leaves Project) Autumn Leaves Project) Autumn Leaves Project)
Series 2017A-1 Taxable Series 2017A-2 Second Tier Series 2017B
Dated: Date of Delivery Due: July 1, as shown on inside cover
The Oklahoma Development Finance Authority (the “Issuer”) is issuing its $14,640,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn
Leaves Project) Series 2017A-1 (the “Series 2017A-1 Bonds”), its $3,240,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project)
Taxable Series 2017A-2 (the “Series 2017A-2 Bonds,” and together with the Series 2017A-1 Bonds, the “Senior Bonds”), and its $12,395,000 Senior Living Revenue
Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project) Second Tier Series 2017B (the “Second Tier Bonds”). The Senior Bonds and the Second Tier Bonds
are herein referred to as the “Series 2017 Bonds.” The Series 2017 Bonds are being issued pursuant to the provisions of Title 60, Oklahoma Statutes 2016, Section
176 et seq., as amended, Title 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended, and Title 74, Oklahoma Statutes 2016, Section 5062.1 et seq., as amended
(collectively, the “Act”), in conformity with the provisions, restrictions, and limitations thereof pursuant to the Trust Indenture, dated as of December 1, 2017 (the
“Indenture”), between the Issuer and UMB Bank, N.A., as Trustee (the “Trustee”).
The Series 2017 Bonds are limited obligations of the Issuer, payable from payments to be made by Leading Life Senior Living, Inc., a Texas nonprofit corporation (the
“Borrower”), to the Trustee pursuant to a Loan Agreement, dated as of December 1, 2017 (the “Loan Agreement”), among the Issuer, the Trustee and the Borrower, and
pursuant to promissory notes evidencing the Borrower’s loan payment obligations (the “Series 2017 Notes”), issued under and entitled to the benefits of the Indenture.
The proceeds of the sale of the Series 2017 Bonds will be used to fund a loan to the Borrower, which will be used to (i) finance the cost of the acquisition by the
Borrower of two memory care facilities in Edmond, Oklahoma and Oklahoma City, Oklahoma, including the buildings, furniture, fixtures and equipment comprising such
facilities and including the real property upon which the facilities are located, (ii) fund certain capital expenditures and startup expenses of the Borrower, (iii) fund a
debt service reserve fund for the Second Tier Bonds, and (iv) pay the costs of issuance of the Series 2017 Bonds.
The Series 2017 Bonds are issuable only as fully registered bonds in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
(“DTC”) and will be available to ultimate purchasers (“Beneficial Owners”) under the book-entry only system maintained by DTC, only through brokers and dealers
who are, or act through, DTC Participants. Purchases by Beneficial Owners will be made in book-entry only form in denominations of $5,000 or any integral multiple
thereof. Beneficial Owners will not be entitled to receive physical delivery of the Series 2017 Bonds. Interest on the Series 2017 Bonds is payable on January 1 and
July 1 of each year commencing July 1, 2018. So long as Cede & Co. is the registered owner of the Series 2017 Bonds, payments of principal or redemption price of and
interest on the Series 2017 Bonds are required to be made to Beneficial Owners by DTC through its participants. See “Book-Entry Only System” herein.
An investment in the Series 2017 Bonds involves a certain degree of risk related to, among other things, the nature of the Borrower’s business, the
regulatory environment, and the provisions of the principal documents. A prospective Bondholder is advised to read “Security and Sources of Payment for the
Series 2017 Bonds” and “Certain Bondholders’ Risks” herein for a discussion of certain risk factors that should be considered in connection with an investment
in the Series 2017 Bonds.

Neither the State of Oklahoma (the “State”) nor any political subdivision, agency, or instrumentality of the State including the Issuer, will be liable or
obligated (generally, specially, morally, or otherwise) to pay the principal of the Series 2017 Bonds or redemption price of, or interest thereon, and neither the
faith and credit nor the taxing power of the State, the Issuer, or any other political subdivision, agency, or instrumentality of the State is pledged to the payment
of the principal or redemption price of, or interest on the Series 2017 Bonds. The Issuer has no taxing power. The Series 2017 Bonds and interest thereon are
special limited obligations of the Issuer, payable solely from and secured exclusively by the funds pledged thereto under the Indenture, including the payments
to be made by the Borrower pursuant to the Loan Agreement, as described herein.

Each series of Series 2017 Bonds is payable solely from and is secured by a pledge and assignment of the applicable Trust Estate. Each Trust Estate consists of (i) all
amounts in the Bond Fund and Debt Service Reserve Fund, if applicable, established under the Indenture for such series of Series 2017 Bonds, (ii) any related Residual
Revenues (as defined herein), related Residual Net Proceeds (as defined herein) and the related Series 2017 Note, (iii) on a subordinate basis to any Trust Estate that
is senior to it, all right, title and interest of the Issuer in the Loan Agreement, as described herein (except for Reserved Rights of the Issuer), and (iv) pro-rata among all
series of Series 2017 Bonds based on relative outstanding principal amount, any amounts derived from the Mortgages.
Rights to payment and remedies upon default for each series of Series 2017 Bonds are subject to the relative priority each series of Series 2017 Bonds has with
respect to the other series of Series 2017 Bonds, with the exception of (iv) in the preceding paragraph. See “Security and Sources of Payment for the Series 2017 Bonds”
herein.

SEE MATURITY AND PRICING SCHEDULE HEREIN

The Series 2017 Bonds are subject to redemption prior to stated maturity, as described herein under “The Series 2017 Bonds.”
The Series 2017 Bonds are being offered, subject to prior sale and withdrawal of such offer without notice, when, as, and if issued by the Issuer and accepted
by the Underwriter subject to the approving opinion of McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the Issuer. Certain legal matters will be
passed upon for the Issuer by its counsel, Skarky Law Firm, PLLC, Oklahoma City, Oklahoma; for the Borrower by its counsel, Bracewell LLP, Dallas, Texas, and
for the Underwriter by its counsel, Norton Rose Fulbright US LLP, Dallas, Texas. It is expected that the Series 2017 Bonds will be available for delivery through the
facilities of DTC, against payment therefor, on or about December 20, 2017.

The date of this Official Statement is December 14, 2017.

 MATURITY AND PRICING SCHEDULE

$14,640,000
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. - Autumn Leaves Project)
Series 2017A-1

$960,000 3.500% Term Bonds due July 1, 2028, Priced at 100.000 to Yield 3.500%, CUSIP† 67885P AA1
$2,995,000 4.000% Term Bonds due July 1, 2038, Priced at 99.306 to Yield 4.050%, CUSIP† 67885P AB9
$10,685,000 4.000% Term Bonds due July 1, 2053, Priced at 97.224 to Yield 4.150%, CUSIP† 67885P AC7

$3,240,000
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. - Autumn Leaves Project)
Taxable Series 2017A-2

$880,000 3.500% Term Bonds due July 1, 2023, Priced at 98.760 to Yield 3.750%, CUSIP† 67885P AD5
$1,060,000 4.000% Term Bonds due July 1, 2028, Priced at 97.894 to Yield 4.250%, CUSIP† 67885P AE3
$1,300,000 4.375% Term Bonds due July 1, 2033, Priced at 97.520 to Yield 4.600%, CUSIP† 67885P AF0

$12,395,000
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. - Autumn Leaves Project)
Second Tier Series 2017B

$1,785,000 4.000% Term Bonds due July 1, 2028, Priced at 97.894 to Yield 4.250%, CUSIP† 67885P AG8
$2,730,000 4.500% Term Bonds due July 1, 2038, Priced at 96.742 to Yield 4.750%, CUSIP† 67885P AH6
$7,880,000 5.000% Term Bonds due July 1, 2053, Priced at 97.563 to Yield 5.150%, CUSIP† 67885P AJ2

†
CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by S&P Capital IQ
on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Issuer, the Underwriter or
the Borrower and are included solely for the convenience of the holders of the Series 2017 Bonds. None of the Issuer, the Underwriter or the Borrower is responsible
for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the Series 2017 Bonds or as indicated above. The CUSIP
number for a specific maturity is subject to being changed after the execution and delivery of the Series 2017 Bonds as a result of various subsequent actions
including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar
enhancement by investors that is applicable to all or a portion of the Series 2017 Bonds.
Autumn Leaves of Edmond Autumn Leaves of SW Oklahoma City
 FINANCING PARTICIPANTS

ISSUER OF THE SERIES 2017 BONDS

Oklahoma Development Finance Authority
Oklahoma City, Oklahoma

ISSUER’S COUNSEL
Skarky Law Firm, PLLC
Oklahoma City, Oklahoma

BOND COUNSEL
McCall, Parkhurst & Horton L.L.P.
Dallas, Texas

BORROWER
Leading Life Senior Living, Inc.
Dallas, Texas

MANAGER
TLG Family Management, LLC
Irving, Texas

BORROWER’S COUNSEL
Bracewell LLP
Dallas, Texas

UNDERWRITER
Piper Jaffray & Co.
The Woodlands, Texas

UNDERWRITER’S COUNSEL
Norton Rose Fulbright US LLP
Dallas, Texas

FEASIBILITY CONSULTANT
Dixon Hughes Goodman, LLP
Atlanta, Georgia

TRUSTEE
UMB Bank, N.A.
Dallas, Texas

TRUSTEE’S COUNSEL
McGuire, Craddock & Strother, P.C.
Dallas, Texas
 SHORT STATEMENT

The information set forth in this short statement is subject in all respects to more complete information set
forth elsewhere in this Official Statement, which should be read in its entirety, including the assumptions,
methodology, and rationale underlying the projections of the Borrower’s management.

The offering of Series 2017 Bonds to potential investors is made only by means of this entire Official
Statement. No person is authorized to detach this short statement from this Official Statement or otherwise to use it
without this entire Official Statement. For the definitions of certain words and terms used in this short statement,
see “APPENDIX B – FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section 1.01. Definitions” herein.

THE ISSUER. The Oklahoma Development Finance Authority is issuing its $14,640,000 Senior Living
Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project) Series 2017A-1 (the “Series 2017A-1
Bonds”), its $3,240,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project)
Taxable Series 2017A-2 (the “Series 2017A-2 Bonds,” and together with the Series 2017A-1 Bonds, the “Senior
Bonds”), and its $12,395,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves
Project) Second Tier Series 2017B (the “Second Tier Bonds”). The Senior Bonds and the Second Tier Bonds are
herein referred to as the “Series 2017 Bonds.” The Series 2017 Bonds are being issued pursuant to the provisions of
Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, and Title 60, Oklahoma Statutes 2016, Section
175.1 et seq., as amended, and Title 74, Oklahoma Statutes 2016, Section 5062.1 et seq., as amended (collectively,
the “Act”), an authorizing resolution of the Issuer adopted on October 25, 2017, and a Trust Indenture dated as of
December 1, 2017 (the “Indenture”) between the Issuer and the UMB Bank, N.A., as Trustee (the “Trustee”).

THE BORROWER. Leading Life Senior Living, Inc. (the “Borrower”), is a Texas nonprofit corporation.
The Borrower is exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the “Code”). The Borrower, which was formed on February 14, 2017, has conducted no
operations to date and has no significant assets.

The Borrower does not intend to acquire any substantial assets or engage in any substantial business
activities other than those related to the acquisition, ownership and operation of two stand-alone properties in
Edmond, Oklahoma (“Autumn Leaves - Edmond”) and Oklahoma City, Oklahoma (“Autumn Leaves - SW OKC”
and, collectively the “Communities”), consisting of two separate facilities with an aggregate 86 rental memory care
units, as described below and in APPENDIX A. However, other affiliated entities and other members of the
development team have and may continue to engage in the acquisition, development, ownership and management of
similar types of affordable housing and assisted living projects.

The Borrower is the only entity obligated to pay debt service on the Series 2017 Bonds.

THE COMMUNITIES. The Communities comprise two stand-alone properties in Edmond, Oklahoma
and Oklahoma City, Oklahoma. The Communities are part of the brand “Autumn Leaves” and consists of 86 rental
memory care units with 100 memory care licensed beds. Information about the Communities is summarized in the
table below. See APPENDIX A.

Year Built Memory Care Budgeted Occupancy(1)

Community Units Beds
Autumn Leaves - Edmond 2014 42 46(2) 92.4%
Autumn Leaves - SW OKC 2015 44 46(2) 99.3%
Total 86 92 95.9%
______________________
(1) Average total occupancy for the ten month period ending October 31, 2017 was 95.9% with an ending monthly occupancy for October 2017
of 97% or 89 occupied beds.
(2) Each Community is licensed for 50 beds but budgets to operate 46 beds.

PURCHASE AND SALE AGREEMENT. The Communities will be acquired by the Borrower with
proceeds of the Series 2017 Bonds on the closing date of the Series 2017 Bonds (the “Closing Date”) from the
owners of the real and personal property comprising the Communities pursuant to two separate Agreements of
Purchase and Sale, each dated October 25, 2017, for an aggregate purchase price of $25,500,000, subject to
customary closing adjustments.

PLAN OF FINANCING. The proceeds of the Series 2017 Bonds will be loaned by the Issuer to the
Borrower pursuant to a Loan Agreement, dated as of December 1, 2017 (the “Loan Agreement”), and will be
i
 applied, together with other available funds to (i) finance the cost of the acquisition by the Borrower of the
Communities located in Edmond, Oklahoma and Oklahoma City, Oklahoma, including the buildings, furniture,
fixtures and equipment comprising such facilities and including the real property upon which the facilities are
located, (ii) fund certain capital expenditures and startup expenses of the Borrower, (iii) fund a debt service reserve
fund for the Second Tier Bonds, and (iv) pay the costs of issuance of the Series 2017 Bonds. See “PLAN OF
FINANCING” and “ESTIMATED SOURCES AND USES OF FUNDS.”

THE MANAGER AND THE MANAGEMENT AGREEMENTS. Concurrently with the issuance of
the Series 2017 Bonds, the Borrower will enter into a Management Agreement with respect to each Community,
each dated and effective as of the date of issuance of the Series 2017 Bonds (together, the “Management
Agreements”), each with TLG Family Management, LLC, a Texas nonprofit Corporation (the “Manager”). The
Manager is the current manager of the Communities and has managed the Communities since their inception. The
Manager is headquartered in Irving (Las Colinas), Texas, was incorporated in 2008 and currently has corporate
personnel of approximately 100 employees.

In addition to operating the Communities, the Manager operates 44 other memory care communities
throughout Florida, Georgia, Kansas, Illinois, Missouri, Oklahoma, South Carolina, Texas, and Wisconsin. See
APPENDIX A – “MANAGEMENT OF THE COMMUNITIES – The Manager,” “– The Management Agreements”

As compensation for providing services, the Borrower will pay the Manager an annual fee each Fiscal Year
equal to five percent (5%) of the gross revenues of the Communities. The payment of fees to the Manager under the
Management Agreements is subordinated to the payment of debt service on the Series 2017 Bonds to the extent that
money in the Revenue Fund is insufficient in any month to make all current and deferred deposits (other than
deposits to the Surplus Fund provided in the Indenture), provided that the payment of any such fee so subordinated
will accrue interest at a rate of four percent (4%) and will under no circumstance be subordinated for a period
exceeding five years after the original due date of such fee. The Manager’s fees are also required to be deferred if
the Debt Service Coverage Ratio is less than the Coverage Test or the Liquidity Requirement is not met as of any
Testing Date, or if an event of default under the Indenture or any Borrower Document (as defined in the Indenture)
has occurred and is continuing. Notwithstanding the foregoing, pursuant to the Indenture, any Deferred
Management Fee must be paid within five years of the original due date of such fee (together with interest due
thereon) unless a Favorable Opinion of Bond Counsel is delivered to the effect that such payment is not required.
The payment of such regular fees and any deferred fees will be made in accordance with the Indenture. See
APPENDIX A – “MANAGEMENT OF THE COMMUNITIES – The Manager” and “– The Management Agreements” and
APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section 5.04. Revenue Fund.”

APPRAISALS. JLL – Valuation and Advisory Services, LLC (the “Appraiser”) was retained by the
Borrower to prepare appraisal reports (the “Appraisals”) to provide the market value of the fee simple interest in
each of the Communities as going concerns, “as is” and investment value, as of November 9, 2017, subject to certain
general underlying assumptions and limiting conditions set forth therein. Subject to the methods used and to the
general underlying assumptions and limiting conditions as further described in the Appraisals, the Appraiser
determined (i) the total appraised “as is” value of the Communities on an individual basis to be $26,440,000, (ii) the
total appraised “as is bulk portfolio value” of the Communities as a portfolio to be $27,360,000 and (iii) the total
appraised investment value of the Communities on an individual basis assuming nonprofit ownership and ad
valorem tax exemption to be $29,340,000, and allocated the appraised investment value of the Communities as
follows:

Allocation of Value – Investment Value Indication

Furniture,
Fixtures & Real Estate &
Community Equipment Improvements Intangibles Total Value Allocation %
Autumn Leaves - Edmond $310,000 $11,370,000 $2,550,000 $14,230,000 48.50%
Autumn Leaves - SW OKC 330,000 12,150,000 2,630,000 15,110,000 51.50%
Totals $640,000 $23,520,000 $5,180,000 $29,340,000 100%

See “APPRAISALS” herein and APPENDIX E – “APPRAISAL SUMMARY REPORT” for more information about
the Appraisals and the underlying assumptions and limiting conditions. The individual Appraisals for each of the
Communities are available from the Underwriter upon request prior to the Closing Date.

Information taken from the appraisal reports prepared by the Appraiser should be evaluated within the
context of the full narrative report. Information presented out of the context of the full narrative report may be
ii
misleading. There is no assurance that the “market value” set forth in the Appraisals would be realized in the event
of the foreclosure or forced sale of the Communities. See “CERTAIN BONDHOLDERS’ RISKS – APPRAISALS.”

USE OF PROJECT REVENUES. A Revenue Fund will be established under the Indenture. On a monthly basis,
certain moneys will be deposited in the Revenue Fund, including all Loan Payments under the Loan Agreement and
all Project Revenues (as defined below). See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS –
Revenue Fund.” Money on deposit in the Revenue Fund will be disbursed on the 15th day of each month in the
following order of priority:

______________________
(1) The payment of any Deferred Management Fee, and any interest due thereon, will occur on the earlier of the date on which the Coverage
Test and Liquidity Requirement are met as of any Testing Date or five years after the original due date of such fee.

Failure to deposit sufficient Project Revenues to make the deposits described above will not, in itself,
constitute an Event of Default under the Indenture. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –
The Indenture – Section 5.04. Revenue Fund.”

“Project Revenues” means for any period, all cash operating and non-operating revenues of the
Communities, including unrestricted contributions to the Borrower, less (a) any extraordinary and nonrecurring
items (including any real property tax refunds), (b) income derived from the sale of assets not in the ordinary course
of business which is permitted under the Bond Documents (as defined in the Indenture), (c) security, cleaning or
similar deposits of tenants until applied or forfeited, (d) Net Proceeds of Insurance Proceeds or Condemnation
Awards and (e) any amount disbursed to the Borrower from the Surplus Fund, but including as Project Revenues
(i) any such Net Proceeds resulting from business interruption insurance or other insurance or condemnation
proceeds retained by the Borrower and (ii) amounts received by the Borrower or the Trustee pursuant to any
payment guaranty, operating guaranty or similar agreement with respect to the Communities.

SURPLUS FUND. The Trustee will deposit into the Surplus Fund all remaining monthly Project
Revenues as provided in the Indenture and all other amounts delivered to it with instructions to deposit the same in
the Surplus Fund. Money in the Surplus Fund will be applied each month, when needed, for the following purposes
and in the following manner and priority: (i) transferred to the Interest Account for the Senior Bonds to pay interest
on the Senior Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor,
(ii) transferred to the Principal Account for the Senior Bonds to pay principal on the Senior Bonds to the extent
amounts on deposit in such Principal Account are insufficient therefor, (iii) transferred to the Interest Account for
the Second Tier Bonds to pay interest on the Second Tier Bonds to the extent amounts on deposit in such Interest
Account are insufficient therefor, (iv) transferred to the Principal Account for the Second Tier Bonds to pay
principal on the Second Tier Bonds to the extent amounts on deposit in such Principal Account are insufficient
therefor, (v) transferred to the Revenue Fund to the extent of any deficiency in the amounts needed to fully make all
iii
transfers from the Revenue Fund pursuant to the Indenture (other than to the Surplus Fund), (vi) transferred to the
Borrower upon the direction of a Borrower Representative for deposit into the Operating Account for the payment of
Operating Expenses when a Borrower Representative certifies to the Trustee, on behalf of the Borrower, that there is
not sufficient money in the Operating Fund or Operating Account to pay Operating Expenses, (vii) paid to the
Trustee an amount equal to any unpaid Extraordinary Trustee’s Fees and Expenses then due, (viii) transferred to the
Borrower or upon the direction of a Borrower Representative, on behalf of the Borrower, to pay taxes, assessments
and premiums as set forth in the Indenture, (ix) transferred to the Operations and Maintenance Reserve Fund an
amount sufficient to restore such Fund to the Operations and Maintenance Reserve Requirement, and (x) transferred
to the Manager, any Deferred Management Fee then owing and any interest due thereon, provided, however, such
payments described under clause (x) will not be made unless and until the Borrower delivers to the Trustee a
quarterly report under the Loan Agreement showing that the Coverage Test and Liquidity Requirement have been
met or are above the required testing levels and a certificate to the effect that no event of default under the Indenture
or any Borrower Document has occurred and is continuing. Notwithstanding the foregoing requirements with
respect to payments described in clause (x) above, any Deferred Management Fee, and any interest due thereon,
must be paid no later than the end of five years from the original due date of such fee regardless of satisfaction of the
Coverage Test or the Liquidity Requirement (which amount must be listed in the Budget delivered to the Trustee
and paid in accordance with the foregoing clauses), unless there is a Favorable Opinion of Bond Counsel delivered
regarding the failure to pay such Deferred Management Fee and the interest due thereon at such time.

When, on or after any Annual Evaluation Date, the Trustee receives a certificate signed by a Borrower
Representative stating (i) that an Excess Surplus Fund Amount was on deposit in the Surplus Fund as of such
Annual Evaluation Date, (ii) the amount, if any, of such Excess Surplus Fund Amount on deposit in the Surplus
Fund as of such Annual Evaluation Date and as of the date of such certificate, (iii) the Borrower has satisfied the
Coverage Test (as shown in a report by a Certified Public Accountant delivered by the Borrower to the Trustee) for
the twelve-month period ending on such Annual Evaluation Date, upon which the Trustee may rely, and (iv) no
Event of Default, or event which with the passage of time or the giving of notice or both would constitute an Event
of Default, has occurred and is continuing, then (A) to the extent that the Repair and Replacement Fund has less than
$250,000 on deposit therein on such Annual Evaluation Date, the Trustee will transfer 25% of such Excess Surplus
Fund Amount to the Repair and Replacement Fund and (B) any Excess Surplus Fund Amount remaining after the
transfer, if any, to the Repair and Replacement Fund will be transferred to the Borrower in accordance with the
Indenture. See the chart below, APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section
5.19(b). Surplus Fund.”

“Annual Evaluation Date” means each December 31, commencing December 31, 2019.

“Cash and Investments” means the sum of cash, cash equivalents, and marketable securities of the
Borrower, including without limitation board-designated assets and amounts, if any, on deposit in the Operating
Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the Operating Account and
the Surplus Fund, but excluding (a) all funds held in a Debt Service Reserve Fund, (b) proceeds of Short-Term
Indebtedness, (c) donor-restricted funds and (d) any funds pledged or otherwise subject to a security interest for debt
other than the Bonds, as shown on the most recent Audited Financial Statements or unaudited financial statements of
the Borrower. For the purposes of calculations hereunder, an Unrestricted Contribution from an Affiliate will be
treated as being made during the period of such calculation so long as the Unrestricted Contribution is made prior to
the date the applicable certificate is required to be delivered with respect to such calculation.

“Excess Surplus Fund Amount” means the amount on deposit in the Surplus Fund on an Annual
Evaluation Date equal to the positive difference, if any, obtained by subtracting (x) the amount equal to 50 Days’
Cash on Hand as of such Annual Evaluation Date, from (y) the amount of Cash and Investments on such Annual
Evaluation Date; provided that on the date of any transfer or disbursement of the Excess Surplus Fund Amount from
the Surplus Fund, such amount may not exceed the amount on deposit in the Surplus Fund on the date of such
transfer or disbursement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Surplus Fund.”

SECURITY. The Borrower is obligated under the Loan Agreement to make payments (the “Loan
Payments”) in such amounts and at such times as will be sufficient to pay, when due, the principal of, premium, if
any, and interest on the Series 2017 Bonds as well as pay certain other fees and expenses in connection with the
Series 2017 Bonds. As evidence of its obligations to make the Loan Payments with respect to the Series 2017
Bonds, the Borrower will execute and deliver to the Trustee three promissory notes: the Senior Living Promissory
Note Series 2017A-1, the Senior Living Taxable Promissory Note Series 2017A-2, and the Senior Living Second
Tier Promissory Note Series 2017B, (collectively, the “Series 2017 Notes”).

iv
 The Borrower’s obligations under the Series 2017 Notes and the Loan Agreement will be secured by
(i) Project Revenues, and (ii) two Mortgage with Power of Sale and Security Agreements (collectively, the
“Mortgages”), each dated as of December 1, 2017, from the Borrower to the Mortgage trustee for the benefit of the
Trustee, which documents create a mortgage lien on, and security interest in, the Communities and other property
and payments, including an assignment of rents and leases, as described in the Mortgages, subject only to certain
Permitted Encumbrances identified therein. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017
BONDS – The Mortgages” herein.

Fidelity National Title Insurance Company will issue two lenders’ title insurance policies for the two
parcels of land upon which the Communities are located (collectively, the “Land”), in favor of the Trustee. The
policies insure against loss from any defects in the Borrower’s title to the Land and the liens of the Mortgages, or
encumbrances (other than utility easements) on the Land, in the aggregate amount equal to the original principal
amount of the Series 2017 Bonds, subject to the conditions, exclusions and exceptions described in the policies.

The Issuer may issue additional bonds (“Additional Bonds” and, together with the Series 2017 Bonds, the
“Bonds”) under the Indenture on conditions described therein (a) to refund all or a portion of a series of Bonds, or
(b) for any other lawful purpose so long as such Additional Bonds are subordinate to all other series of Bonds then
Outstanding. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Issuance of Additional
Bonds.”

Each series of Series 2017 Bonds is payable solely from and is secured by a pledge and assignment of the
applicable Trust Estate. Each Trust Estate consists of (i) all amounts in the Bond Fund and Debt Service Reserve
Fund, if applicable, established under the Indenture for such series of Series 2017 Bonds, (ii) any related Residual
Revenues (as described below), related Residual Net Proceeds and the related Series 2017 Note, (iii) on a
subordinate basis to any Trust Estate that is senior to it, all right, title and interest of the Issuer in the Loan
Agreement, as described herein (except for Reserved Rights of the Issuer), and (iv) pro-rata among all series of
Series 2017 Bonds based on relative outstanding principal amount, any amounts derived from the Mortgages.

Rights to payment and remedies upon default for each series of Series 2017 Bonds are subject to the
relative priority each series of Series 2017 Bonds has with respect to the other series of Series 2017 Bonds, with the
exception of (iv) in the preceding paragraph. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017
BONDS” herein.

RELATIONSHIP AMONG SERIES. Amounts on deposit in the accounts of the Bond Fund for a series
of Series 2017 Bonds will be used solely to pay principal and interest on that series of Series 2017 Bonds, on the
applicable payment dates. Amounts on deposit in the Debt Service Reserve Fund are available to pay the principal
of and interest only on the Second Tier Bonds when due to the extent money on deposit in the related Principal
Account or Interest Account are insufficient therefor after the transfer of any amounts from the Surplus Fund, the
Operations and Maintenance Reserve Fund and the Repair and Replacement Fund pursuant to the Indenture.

Failure to make payment of the principal or redemption price of any Senior Bond from the Senior Bonds
Trust Estate after the same becomes due, whether at maturity or upon call for redemption or otherwise, and failure to
make payment of interest on any Senior Bond from the Senior Bonds Trust Estate when due, among other things,
each constitutes a Senior Bonds Event of Default. In addition to other remedies that may be available, if a Senior
Bonds Event of Default has occurred and is continuing, the Trustee, upon written request of the Owners of not less
than 25% in outstanding principal amount of the Senior Bonds, will declare all Bonds of all series due and payable
and commence foreclosure proceedings under the Mortgages.

Failure to apply Residual Revenues to the payment of the principal or redemption price of, or interest on,
the Second Tier Bonds to the extent such Residual Revenues are available, among other things, constitutes a Second
Tier Bonds Event of Default. In addition to other remedies that may be available, if a Second Tier Bonds Event of
Default has occurred and is continuing and no Senior Bonds are then Outstanding, then the Trustee, upon written
request of the Owners of not less than 25% in outstanding principal amount of the Second Tier Bonds, will declare
all Bonds of all series due and payable and commence foreclosure proceedings under the Mortgages.

In addition, in the event that a failure to pay principal or redemption price of or interest on the Second Tier
Bonds from the applicable Trust Estate occurs and is continuing, the Owners of a majority in outstanding principal
amount of Second Tier Bonds may direct the Trustee in writing to use amounts on deposit in the Debt Service
Reserve Fund to redeem Second Tier Bonds in accordance with the Indenture. See “Mandatory Redemption from
Debt Service Reserve Funds” below and “THE SERIES 2017 BONDS – Mandatory Redemption from Debt Service
Reserve Funds.”
v
 “Residual Revenues” means (a) so long as the Senior Bonds remain Outstanding, such Project Revenues
which remain after the required deposit has been made to the Senior Bonds Bond Fund as set forth in in the
Indenture; and (b) on and after the date the Senior Bonds are no longer Outstanding, all such Project Revenues
which would have been available for the payment of the principal of and interest on the Senior Bonds.

See “Security and Sources of Payment for the Series 2017 Bonds – Mandatory Redemption from Debt
Service Reserve Funds” herein and Appendix B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Article
VIII. Defaults and Remedies.”

DEBT SERVICE RESERVE FUND. The Senior Bonds will not be secured by a debt service reserve
fund. A Debt Service Reserve Fund for the Second Tier Bonds will be established under the Indenture. The Debt
Service Reserve Fund for the Second Tier Bonds will be funded in the amount of $371,047.44 (approximately one-
half of the Maximum Annual Debt Service on the Second Tier Bonds). Amounts on deposit in the Debt Service
Reserve Fund will be used solely to pay the principal of and interest on the Second Tier Bonds when due to the
extent money on deposit in the related Principal Account or Interest Account for the Second Tier Bonds is
insufficient therefor after the transfer of any amounts from the Surplus Fund, the Operations and Maintenance
Reserve Fund and the Repair and Replacement Fund pursuant to the Indenture. See “SECURITY AND SOURCES OF
PAYMENT FOR THE SERIES 2017 BONDS” herein.

MANDATORY REDEMPTION FROM DEBT SERVICE RESERVE FUND. The Second Tier Bonds
are subject to mandatory redemption in whole or in part at any time at a redemption price equal to the principal
amount of such Second Tier Bonds to be redeemed together with unpaid interest accrued to the date fixed for
redemption, and without premium, upon direction from the Owners of a majority in outstanding Principal Amount
of the Second Tier Bonds are to be redeemed with amounts on deposit in the Debt Service Reserve Fund pursuant to
the Indenture in connection with the occurrence of an Event of Default related to payment of the principal or
redemption price of or interest on the Second Tier Bonds. Any such redemption will be made pro rata on the basis
of Principal Amount among the maturities, and be made on a date determined by the direction of such Owners not
more than 180 days after the date notice from such Owners is received by the Trustee. Such Owners must give the
Trustee and the Borrower not less than 45 days written notice of such redemption date.

RATE COVENANT. The Borrower has agreed in the Loan Agreement to fix, charge and collect, or cause
to be fixed, charged and collected, rents, fees and charges in connection with the operation and maintenance of the
Communities, such that for each Fiscal Year, beginning with the Fiscal Year ending December 31, 2018, the Debt
Service Coverage Ratio will not be less than the Coverage Test, which is 1.05 to 1.00 on all Outstanding Bonds and
other Long-Term Indebtedness, determined as of the end of each such Fiscal Year. If the Debt Service Coverage
Ratio is below 1.00 to 1.00 for any Fiscal Year, it is a Default under the Loan Agreement. See “Security and
Sources of Payment for the Series 2017 Bonds – Rate Covenant” for a further description of such covenant,
including a description of the actions required to be taken if such covenant is not met, including the retention of a
Management Consultant.

LIQUIDITY COVENANT. The Loan Agreement requires that the Borrower calculate its Days’ Cash on
Hand as of June 30 and December 31 of each Fiscal Year, commencing with June 30, 2018 (each such date being a
“Testing Date”). The Borrower agrees in the Loan Agreement to conduct its business so that on each Testing Date
the Borrower will have no less than 30 Days’ Cash on Hand (the “Liquidity Requirement”). See “Security and
Sources of Payment for the Series 2017 Bonds – Liquidity Covenant” for a further description of such covenant,
including a description of the actions required to be taken if such covenant is not met on a Testing Date, including
the retention of a Management Consultant.

AFFORDABILITY COVENANT. The Borrower has agreed in the Loan Agreement that beginning on
January 1, 2019, no less than 20% of the total number of units of the Communities will at all times be rented to and
occupied by Low Income Tenants (as described herein). See “Security and Sources of Payment for the Series 2017
Bonds – Affordability Covenant” herein for a more detailed description.

APPROVAL OF MANAGEMENT CONSULTANTS. Upon selecting a Management Consultant as

required under the provisions of the Loan Agreement, the Borrower will notify the Trustee of such selection. The
Trustee will, as soon as practicable but in no case longer than five Business Days after receipt of such notice, notify
the Owners of all Bonds Outstanding under the Indenture of such selection. Such notice must, among other
requirements, state that an Owner will be deemed to have consented to the selection of the Management Consultant
unless such Owner submits an objection within 15 days of the date that the notice is sent to the Owners. If the
Owners of 66.6% or more in aggregate principal amount of the Outstanding Bonds have been deemed to have
consented to the selection of the Management Consultant or have not responded to the request for consent by the end
vi
of the 15-day objection period, the Borrower will engage the Management Consultant within three Business Days of
receipt of the Trustee’s notice. If the Owners of more than 33.4% in aggregate Outstanding principal amount of the
Bonds have objected to the Management Consultant selected, the Borrower will select another Management
Consultant in compliance with the procedures of the Loan Agreement. See “SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2017 BONDS – Approval of Management Consultants.”

FEASIBILITY STUDY. Dixon Hughes Goodman LLP (the “Feasibility Consultant”) has prepared its
Financial Feasibility Study, dated December 7, 2017 (the “Feasibility Study”), which is included herein as
Appendix D. The Feasibility Study includes management’s financial forecast of the Borrower for the period ending
December 31, 2021. As stated in the Feasibility Study, the financial forecast presents, to the best of the Borrower’s
knowledge and belief, the Borrower’s expected consolidated results of operations, changes in net deficits, cash
flows, and financial position for the forecast period. See Appendix D – “Financial Feasibility Study – Forecasted
Financial Ratios.” Forecasted results usually differ from actual results because events and circumstances
frequently do not occur as expected, and those differences may be material. The Feasibility Study should be read
in its entirety, including the notes and assumptions set forth therein. See Appendix D hereto.

[Remainder of This Page Intentionally Left Blank]

vii
 The following table reflects the calculation of annual debt service for each series of Series 2017 Bonds,
which included an additional third tier series of bonds which were not issued, and Days’ Cash on Hand for the fiscal
years ending December 31, 2017 through 2021. The debt service coverage ratio information presented for any series
or multiple series of the Series 2017 Bonds is not indicative of the Borrower’s ability to meet the Debt Service
Coverage Ratio under the Loan Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017
BONDS – Rate Covenant” for a further description of such covenant. The information in the following table has
been extracted from the Feasibility Study included in APPENDIX D hereto.

Long-Term Debt Service Coverage Ratio 2018(1) 2019 2020 2021

Net income (loss) $ (42) $ (10) $ 15 $ 78
Add:
Interest Expense:
Series 2017 Bonds 1,355 1,330 1,293 1,257
Amortization of deferred financing costs 82 82 82 82
Amortization of original issue discount 18 18 18 18
Depreciation 860 872 885 899
Deduct:
Net Income Available for Debt Service $ 2,273 $ 2,292 $ 2,293 $ 2,334
(1)(4)
Annual Debt Service requirement $ 1,548 $ 1,721 $ 1,723 $ 1,674
Annual Debt Service requirement for the Senior Bonds(2)(4)(5) $ 734 $ 955 $ 952 $ 954
Debt Service Coverage Ratio for the Senior Bonds 3.10x 2.40x 2.41x 2.45x
Annual Debt Service requirement for the Senior Bonds and
the Second Tier Bonds(3)(4)(5) $ 1,324 $ 1,672 $ 1,673 $ 1,674
Debt Service Coverage Ratio for the Senior Bonds and
Second Tier Bonds 1.72x 1.37x 1.37x 1.39x
Debt Service Coverage Ratio for the Series 2017
Bonds(5)(6) 1.47x 1.33x 1.33x 1.39x
______________________
(1) The Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017 Bonds.
(2) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017A Bonds.
(3) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017A Bonds and
Series 2017B Bonds.
(4) For the purpose of this presentation, the Bond Funds for each series of the Series 2017 Bonds are included into the fiscal year 2018 Annual
Debt Service Requirement to normalize the partial year results.
(5) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service requirements for the Series 2017 Bonds and with
the subordination of the Management Fee would increase annually by approximately 0.25x.
(6) The Feasibility Study anticipated a third tier series of bonds being issued which were not issued.

Days’ Cash on Hand 2018 2019 2020 2021

Cash and investments (of the Operating Account) $ 174 $ 179 $185 $ 188
Surplus Fund(1) 745 1,181 796 1,297
Operations and Maintenance Reserve Fund 347 358 369 377
Operating Fund 173 179 184 189
Repair and Replacement Fund(1) - - 250 250
Unrestricted Cash and Investments Available(1) $ 1,439 $ 1,897 $ 1,784 $ 2,301

Total Operating Expenses $ 6,479 $ 6,598 $ 6,711 $ 6,778

Deduct:
Depreciation (860) (872) (885) (899)
Amortization of deferred financing costs (82) (82) (82) (82)
Amortization of original issue discount (18) (18) (18) (18)
Expenses, net $ 5,519 $ 5,626 $ 5,726 $ 5,779
Daily Operating Expenses(2) $ 15 $ 15 $ 16 $ 16
Days’ Cash on Hand 95 123 114 145

______________________
(1) Beginning in Fiscal Year 2020, the Excess Surplus Fund Amount within the Surplus Fund is to be used to transfer cash to the Repair and
Replacement Fund and for accelerated redemption of the Third Tier Bonds. The total unrestricted cash and investments is assumed to
decrease with the accelerated redemption of the Third Tier Bonds. The anticipated series of third tier bonds were not issued and the
provisions related to the Third Tier Bonds are not applicable.
(2) Daily operating expenses are equal to annual operating expenses less depreciation and amortization divided by 365 days.
viii
 The above tables should be considered in conjunction with the entire Feasibility Study, included herein as
APPENDIX D, to understand the Borrower’s financial requirements and management’s assumptions upon which the
Feasibility Study is based. The realization of any financial forecast depends on future events the occurrence of
which cannot be assured. Therefore, the actual results realized may vary from the Feasibility Study. Such
variation could be material. See the Feasibility Study in APPENDIX D hereto.

NONRECOURSE OBLIGATIONS. The Borrower’s obligations under the Loan Agreement, the Series
2017 Notes and the Mortgages are limited, nonrecourse obligations and the Borrower has no obligation to make
payments of amounts due under the Loan Agreement except from Project Revenues and from amounts held in the
Funds and Accounts created under the Indenture. No other revenues or assets of the Borrower will be available for
the payment of, or as security for, the Series 2017 Bonds. The right of the Issuer to collect and receive payments
under the Loan Agreement has been assigned to the Trustee under the Indenture for the benefit of the Owners. No
assets or other revenues of the Issuer are or will be available for the payment of, or as security for, the Series
2017 Bonds.

NEITHER THE STATE OF OKLAHOMA (THE “STATE”) NOR ANY POLITICAL

SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF THE STATE, INCLUDING THE ISSUER,
WILL BE LIABLE OR OBLIGATED (GENERALLY, SPECIALLY, MORALLY OR OTHERWISE) TO
PAY THE PRINCIPAL OF THE SERIES 2017 BONDS OR REDEMPTION PRICE OF, OR INTEREST
THEREON, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE,
THE ISSUER, OR ANY OTHER POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY OF
THE STATE IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF,
OR INTEREST ON THE SERIES 2017 BONDS. THE ISSUER HAS NO TAXING POWER.

CERTAIN BONDHOLDERS’ RISKS. AN INVESTMENT IN THE SERIES 2017 BONDS INVOLVES A

SIGNIFICANT DEGREE OF RISK. A PROSPECTIVE BONDHOLDER IS ADVISED TO READ THE ENTIRE OFFICIAL
STATEMENT, INCLUDING THE APPENDICES HERETO, BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE
SERIES 2017 BONDS. SPECIAL REFERENCE IS MADE TO THE SECTIONS “SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2017 BONDS” AND “CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN
RISK FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2017
BONDS. Careful consideration should be given to these risks and other risks described elsewhere in this Official
Statement. Among other things, because the Series 2017 Bonds are payable solely from the revenues and assets of
the Borrower and other money pledged to such payment, careful evaluation should be made of the assumptions and
the rationale of the management of the Borrower described in APPENDIX A, and certain factors (including, but not
limited to, the ability of the Borrower to attract residents and manage Communities in a manner that maintains high
occupancy levels), that may adversely affect the ability of the Borrower to generate sufficient revenues to pay its
expenses of operation, including the principal or redemption price of and interest on the Series 2017 Bonds.

FORWARD-LOOKING STATEMENTS. This Official Statement and the Appendices hereto contain
forward-looking information within the meaning of the federal securities laws. The forward-looking statements
include statements about the Borrower’s outlook for the future, as well as other statements of beliefs, future plans or
strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward-
looking statements and information are subject to many risks and uncertainties that could cause actual results to
differ materially from those expressed in, or implied by, the statements. The reader is cautioned not to place undue
reliance on forward-looking statements because actual results may differ materially from those expressed in, or
implied by, the statements. The forward-looking statements contained in this Official Statement are applicable only
as of their dates, and the Borrower undertakes no obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE BORROWER DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO
THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS, OR EVENTS,
CONDITIONS, OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
INVESTORS SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD LOOKING STATEMENTS.
PLEASE REVIEW THE FACTORS DESCRIBED BELOW UNDER “CERTAIN BONDHOLDERS’ RISKS”
WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER FROM EXPECTATIONS.

ix
 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY
OFFER AND SELL THE SERIES 2017 BONDS TO CERTAIN DEALERS AT PRICES LOWER THAN THE
PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGE AND PAGE (I) HEREOF AND SAID
PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE SERIES 2017 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE
ON CERTAIN EXEMPTIONS FROM REGISTRATION. THE REGISTRATION, QUALIFICATION, OR
EXEMPTION OF THE SERIES 2017 BONDS IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE SECURITIES HAVE
BEEN REGISTERED, QUALIFIED, OR EXEMPTED SHOULD NOT BE REGARDED AS A
RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR
AGENCIES HAVE GUARANTEED OR PASSED UPON THE SAFETY OF THE SERIES 2017 BONDS AS
AN INVESTMENT, UPON THE PROBABILITY OF ANY EARNINGS THEREON, OR UPON THE
ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT.

No dealer, broker, salesman, or other person has been authorized by the Issuer, the Borrower, DTC, or the
Underwriter to give any information or to make any representations with respect to this offering, other than those
contained in this Official Statement, and, if given or made, such other information or representations must not be
relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2017 Bonds by any person in any
state in which it is unlawful for such person to make such offer, solicitation, or sale. The information and
expressions of opinions contained herein are subject to change without notice and neither the delivery of this
Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Issuer or the Borrower since the date hereof.

This Official Statement contains a general description of the Series 2017 Bonds, the Issuer, the Borrower,
the Communities and the plan of financing and sets forth certain provisions of the Indenture, the Loan Agreement
and the Mortgages. The description and summaries herein do not purport to be complete. The Issuer has furnished
only the information included herein under the sections entitled “SHORT STATEMENT – The Issuer,” “INTRODUCTION
– The Issuer,” “THE ISSUER” and “LITIGATION – The Issuer.” The Issuer assumes no responsibility for the accuracy
or completeness of any other information in this Official Statement. Persons interested in purchasing the Series
2017 Bonds should review carefully the Appendices attached hereto as well as copies of such documents, which
prior to the issuance of the Series 2017 Bonds may be obtained from the Underwriter and, following the issuance of
the Series 2017 Bonds, will be held by the Trustee at its designated office.

References to web site addresses herein are for international purposes only and may be in form of a
hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or
links contained therein are not incorporated into, and are not part of, this Official Statement.

The order and placement of materials in this Official Statement, including the Appendices, are not to be
deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the
Appendices, must be considered in its entirety.

Except for any information provided by UMB Bank, N.A. concerning the Trustee, UMB Bank, N.A., has
no responsibility for any information in this Official Statement. UMB Bank, N.A., in its capacity as Trustee,
assumes no responsibility for the accuracy or completeness of the information concerning the Issuer or the Borrower
or their respective affiliates or any other party contained in this document or the related documents or for any failure
by the Issuer or the Borrower or any other party to disclose events that may have occurred and may affect the
significance or accuracy of such information.

x
 TABLE OF CONTENTS
Page Page
INTRODUCTION ...............................................................................1  Uncertainty of Revenues ............................................................... 29 
Purpose of this Official Statement ...................................................1  Subordinate Nature of the Second Tier Bonds .............................. 29 
The Issuer ........................................................................................1  Failure to Achieve or Maintain Occupancy ................................... 30 
Application of Bond Proceeds .........................................................1  Licensing Delay ............................................................................ 30 
Security and Sources of Payment for the Series 2017 Bonds ...........2  Competition................................................................................... 30 
Debt Service Reserve Fund ..............................................................2  Utilization Demand ....................................................................... 30 
Mandatory Redemption from Debt Service Reserve Fund...............3  Malpractice Claims and Losses ..................................................... 31 
Rate Covenant..................................................................................3  Nursing Shortage........................................................................... 31 
Liquidity Covenant ..........................................................................3  Overview of Government Regulation of the Health Care
Approval of Management Consultants.............................................3  Industry ..................................................................................... 31 
Affordability Covenant ....................................................................3  Federal Legislation and Regulations Governing the
Nonrecourse Obligations .................................................................3  Communities ............................................................................. 33 
Certain Bondholders’ Risks .............................................................4  Third Party Payments and Managed Care ..................................... 33 
THE ISSUER .......................................................................................4  Regulatory Enforcement ............................................................... 34 
General ............................................................................................4  States Legislation and Regulations Governing the Community
Board of Directors ...........................................................................4  and the Communities ................................................................ 39 
Indebtedness of the Issuer ................................................................4  State of Oklahoma Legislation and Regulations............................ 39 
Purposes and Powers .......................................................................4  Challenges to Continuing Care Retirement Centers from
Limitations on Liability ...................................................................5  Affordable Housing Activists ................................................... 40 
THE BORROWER ..............................................................................5  Appraisals ..................................................................................... 40 
The Communities.............................................................................5  Financial Projections ..................................................................... 41 
The Manager and the Management Agreements ..............................6  Financial Information Provided by the Seller of the
Use of Project Revenues ..................................................................6  Communities ............................................................................. 41 
APPRAISALS......................................................................................7  Tax-Exempt Status ........................................................................ 41 
PLAN OF FINANCING ......................................................................7  State and Local Tax Exemption .................................................... 42 
Application of Bond Proceeds .........................................................7  Unrelated Business Income ........................................................... 42 
ESTIMATED SOURCES AND USES OF FUNDS ............................8  Other Federal Tax Matters ............................................................ 42 
THE SERIES 2017 BONDS ..............................................................10  Federal Income Tax Matters; Changes in or Application of Tax
General ..........................................................................................10  Laws ......................................................................................... 44 
Transfer and Exchange of the Series 2017 Bonds ..........................10  Certain Matters Relating to Enforceability of the Indenture .......... 44 
Mandatory Redemption of Series 2017 Bonds...............................10  Environmental Matters .................................................................. 45 
Optional Redemption of Series 2017 Bonds ..................................11  Lien for Clean-up of Hazardous Materials .................................... 46 
Mandatory Sinking Fund Redemption ...........................................11  Amendments to Documents .......................................................... 46 
Mandatory Redemption of Tax-Exempt Bonds .............................14  Other Legislation ........................................................................... 46 
Mandatory Redemption from Debt Service Reserve Fund.............14  Lack of Marketability for the Series 2017 Bonds .......................... 46 
Special Redemption Upon Sale of Facilities ..................................15  Bankruptcy .................................................................................... 46 
Purchase in Lieu of Redemption ....................................................15  Additional Indebtedness ................................................................ 47 
Selection of Series 2017 Bonds to be Redeemed ...........................15  Foreclosure Rights under Oklahoma Law ..................................... 48 
Notice of Redemption ....................................................................15  Limited Use Community ............................................................... 48 
Payment of Redemption Price........................................................16  Uncertainty of Investment Income ................................................ 48 
Payment of Principal and Interest ..................................................16  Other Possible Risk Factors .......................................................... 49 
BOOK-ENTRY ONLY SYSTEM .....................................................16  CONTINUING DISCLOSURE......................................................... 49 
SECURITY AND SOURCES OF PAYMENT FOR THE Compliance with Prior Undertakings ............................................ 50 
SERIES 2017 BONDS...................................................................18  LITIGATION .................................................................................... 50 
Limited Obligations .......................................................................18  The Issuer ...................................................................................... 50 
Repayment of Loan........................................................................19  The Borrower ................................................................................ 50 
The Mortgages ...............................................................................20  LEGAL MATTERS .......................................................................... 50 
Operation of the Communities .......................................................21  TAX MATTERS ............................................................................... 50 
Affordability Covenant ..................................................................21  Certain Federal Income Tax Considerations ................................. 50 
Rate Covenant................................................................................21  Future and Proposed Tax Legislation ............................................ 52 
Liquidity Covenant ........................................................................22  Tax-Exempt Bonds........................................................................ 52 
Approval of Management Consultants...........................................22  Series 2017A-2 Bonds................................................................... 54 
Flow of Project Revenues ..............................................................23  Oklahoma Taxes ........................................................................... 54 
Revenue Fund ................................................................................23  State, Local and Foreign Taxes ..................................................... 54 
Debt Service Reserve Fund ............................................................25  RATINGS.......................................................................................... 55 
Operating Fund ..............................................................................25  UNDERWRITING ............................................................................ 55 
Operations and Maintenance Reserve Fund ...................................25  MISCELLANEOUS .......................................................................... 55 
Insurance and Tax Escrow Fund ....................................................26  Appendix A – The Borrower
Repair and Replacement Fund .......................................................26  Appendix B – Forms of the Principal Documents
Administration Fund ......................................................................26  Appendix C – Proposed Form of Opinion of Bond Counsel
Surplus Fund ..................................................................................26  Appendix D – Financial Feasibility Study
Rating Application .........................................................................27  Appendix E – Summary Appraisal Report
Other Covenants of the Borrower ..................................................28  Appendix F – Form of Disclosure Dissemination Agent
Relationship Among Series............................................................28  Agreement
Subordination of Second Tier Bonds .............................................28 
Issuance of Additional Bonds ........................................................28 
CERTAIN BONDHOLDERS’ RISKS ..............................................29 
General Risk Factors......................................................................29 
Limited Obligations of the Issuer...................................................29 
xi
[This page intentionally left blank.]
 OFFICIAL STATEMENT
RELATING TO

$30,275,000
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. - Autumn Leaves Project)
Series 2017
consisting of
$14,640,000 $3,240,000 $12,395,000
Senior Living Revenue Bonds Senior Living Revenue Bonds Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. – (Leading Life Senior Living, Inc. – (Leading Life Senior Living, Inc. –
Autumn Autumn Autumn
Leaves Project) Leaves Project) Leaves Project)
Series 2017A-1 Taxable Series 2017A-2 Second Tier Series 2017B

INTRODUCTION

Purpose of this Official Statement

This Official Statement, including the cover page and Appendices hereto, is provided to furnish
information with respect to the issuance, sale and delivery by The Oklahoma Development Finance Authority (the
“Issuer”) of its $14,640,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project) Series
2017A-1 (the “Series 2017A-1 Bonds”), its $3,240,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. -
Autumn Leaves Project) Taxable Series 2017A-2 (the “Series 2017A-2 Bonds,” and together with the Series 2017A-1 Bonds, the
“Senior Bonds”), and its $12,395,000 Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project)
Second Tier Series 2017B (the “Second Tier Bonds”). The Senior Bonds and the Second Tier Bonds are herein referred to as the
“Series 2017 Bonds.” The Series 2017 Bonds are being issued pursuant to the provisions of Title 60, Oklahoma
Statutes 2016, Section 176 et seq., as amended, Title 60, Oklahoma Statutes 2016, Section 175.1 et seq., as
amended, and Title 74, Oklahoma Statutes 2016, Section 5062.1 et seq., as amended (collectively, the “Act”),
pursuant to a Trust Indenture, dated as of December 1, 2017 (the “Indenture”), between the Issuer and UMB Bank,
N.A., as trustee (the “Trustee”). Certain capitalized terms used herein are defined in “FORMS OF THE PRINCIPAL
DOCUMENTS – The Indenture – Section 1.01. Definitions” in APPENDIX B hereto.

The Issuer may issue additional bonds (“Additional Bonds” and, together with the Series 2017 Bonds, the
“Bonds”) under the Indenture on conditions described therein (a) to refund all or a portion of a series of Bonds, or
(b) for any other lawful purpose so long as such Additional Bonds are subordinate to all other series of Bonds then
Outstanding. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Issuance of Additional
Bonds.”

The descriptions and summaries of various documents hereinafter set forth do not purport to be
comprehensive or definitive, and reference is made to each document for the complete details of its terms and
conditions. All statements herein are qualified in their entirety by reference to each document.

The Issuer

The Issuer is a public trust created under the Act. For further information concerning the Issuer, its powers,
members, Issuer indebtedness and bonds, see the information under the caption “THE ISSUER” herein.

Application of Bond Proceeds

The proceeds of the Series 2017 Bonds will be loaned by the Issuer to Leading Life Senior Living, Inc., a
Texas nonprofit corporation (the “Borrower”), pursuant to a Loan Agreement dated as of December 1, 2017 (the
“Loan Agreement”), among the Issuer, the Trustee and the Borrower, and will be applied together with other
available funds to (i) finance the cost of the acquisition by the Borrower of the Communities located in Edmond,
Oklahoma and Oklahoma City, Oklahoma, including the buildings, furniture, fixtures and equipment comprising
such facilities and including the real property upon which the facilities are located, (ii) fund certain capital
expenditures and startup expenses of the Borrower, (iii) fund a debt service reserve fund for the Second Tier Bonds,
and (iv) pay the costs of issuance of the Series 2017 Bonds. See “PLAN OF FINANCING” and “ESTIMATED SOURCES
AND USES OF FUNDS” herein.

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 The Series 2017A-1 Bonds and the Second Tier Bonds (collectively, the “Tax-Exempt Bonds”) will be
issued as “qualified 501(c)(3) bonds” as defined in Section 145 of the Code. The Borrower is an organization
described in Section 501(c)(3) of the Code and, in the opinion of Bracewell LLP, Borrower’s Counsel, the Borrower
is treated as a 501(c)(3) entity for federal income tax purposes.

Security and Sources of Payment for the Series 2017 Bonds

The Borrower is obligated under the Loan Agreement to make payments (the “Loan Payments”) in such
amounts and at such times as will be sufficient to pay, when due, the principal of, premium, if any, and interest on
the Series 2017 Bonds as well as pay certain other fees and expenses in connection with the Series 2017 Bonds.
Each obligation of the Borrower to repay each loan from the Issuer relating to the Series 2017 Bonds will be
evidenced by a promissory note of the Borrower, issued under the Loan Agreement and secured by (i) Project
Revenues, and (ii) two Mortgage with Power of Sale and Security Agreements (collectively, the “Mortgages”), each
dated as of December 1, 2017, from the Borrower to the Mortgage trustee for the benefit of the Trustee, which
documents create a mortgage lien on, and security interest in, the Communities and other property and payments,
including an assignment of rents and leases, as described in the Mortgages, subject only to certain Permitted
Encumbrances identified therein. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – The
Mortgages” herein.

“Project Revenues” means for any period, all cash operating and non-operating revenues of the
Communities, including unrestricted contributions to the Borrower, less (a) any extraordinary and nonrecurring
items (including any real property tax refunds), (b) income derived from the sale of assets not in the ordinary course
of business which is permitted under the Bond Documents (as defined in the Indenture), (c) security, cleaning or
similar deposits of tenants until applied or forfeited, (d) Net Proceeds of Insurance Proceeds or Condemnation
Awards and (e) any amount disbursed to the Borrower from the Surplus Fund, but including as Project Revenues
(i) any such Net Proceeds resulting from business interruption insurance or other insurance or condemnation
proceeds retained by the Borrower and (ii) amounts received by the Borrower or the Trustee pursuant to any
payment guaranty, operating guaranty or similar agreement with respect to the Communities.

As evidence of its obligations to make the Loan Payments with respect to the Series 2017 Bonds, the
Borrower will execute and deliver to the Trustee three promissory notes: the Senior Living Promissory Note Series
2017A-1, the Senior Living Taxable Promissory Note Series 2017A-2, and the Senior Living Second Tier
Promissory Note Series 2017B (collectively, the “Series 2017 Notes”).

Each series of Series 2017 Bonds is payable solely from and is secured by a pledge and assignment of the
applicable Trust Estate. Each Trust Estate consists of (i) all amounts in the Bond Fund and Debt Service Reserve
Fund, if applicable, established under the Indenture for such series of Series 2017 Bonds, (ii) any related Residual
Revenues (as described below), related Residual Net Proceeds and the related Series 2017 Note, (iii) on a
subordinate basis to any Trust Estate that is senior to it, all right, title and interest of the Issuer in the Loan
Agreement, as described herein (except for Reserved Rights of the Issuer), and (iv) pro-rata among all series of
Series 2017 Bonds based on relative outstanding principal amount, any amounts derived from the Mortgages. See
“SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Relationship Among Series.”

Rights to payment and remedies upon default for each series of Series 2017 Bonds are subject to the
relative priority each series of Series 2017 Bonds has with respect to the other series of Series 2017 Bonds, with the
exception of (iv) in the preceding paragraph. The Loan Agreement is secured by the Mortgages. See “SECURITY
AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” herein.

Debt Service Reserve Fund

The Senior Bonds will not be secured by a debt service reserve fund. A Debt Service Reserve Fund for the
Second Tier Bonds will be established under the Indenture. The Debt Service Reserve Fund for the Second Tier
Bonds will be funded in the amount of $371,047.44 (approximately one-half of the Maximum Annual Debt Service
on the Second Tier Bonds). Amounts on deposit in the Debt Service Reserve Fund will be used solely to pay the
principal of and interest on the Second Tier Bonds when due to the extent money on deposit in the related Principal
Account or Interest Account are insufficient therefor after the transfer of any amounts from the Surplus Fund, the
Operations and Maintenance Reserve Fund and the Repair and Replacement Fund pursuant to the Indenture. See
“SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” herein.

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Mandatory Redemption from Debt Service Reserve Fund

The Second Tier Bonds are subject to mandatory redemption in whole or in part at any time at a redemption
price equal to the principal amount to be redeemed together with unpaid interest accrued to the date fixed for
redemption, and without premium, upon direction from the Owners of a majority in outstanding Principal Amount
of the Second Tier Bonds are to be redeemed with amounts on deposit in the Debt Service Reserve Fund pursuant to
the Indenture in connection with the occurrence of an Event of Default related to the payment of principal or
redemption price of, or interest on, the Second Tier Bonds. Any such redemption will be made pro rata on the basis
of Principal Amount among the maturities, and be made on a date determined by the direction of such Owners not
more than 180 days after the date notice from such Owners is received by the Trustee. Such Owners must give the
Trustee and the Borrower not less than 45 days written notice of such redemption date.

Rate Covenant

The Borrower has agreed in the Loan Agreement to fix, charge and collect, or cause to be fixed, charged
and collected, rents, fees and charges in connection with the operation and maintenance of the Communities, such
that for each Fiscal Year beginning with the Fiscal Year ending December 31, 2018, the Debt Service Coverage
Ratio will not be less than the Coverage Test, which is 1.05 to 1.00 on all Outstanding Bonds and other Long-Term
Indebtedness, determined as of the end of each such Fiscal Year. If the Debt Service Coverage Ratio is below 1.00
to 1.00 for any Fiscal Year, it is a Default under the Loan Agreement. See “SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2017 BONDS – Rate Covenant” herein.

Liquidity Covenant

The Loan Agreement requires that the Borrower calculate its Days’ Cash on Hand as of June 30 and
December 31 of each Fiscal Year, commencing with June 30, 2018 (each such date being a “Testing Date”). The
Borrower agrees in the Loan Agreement to conduct its business so that on each Testing Date the Borrower will have
no less than 30 Days’ Cash on Hand (the “Liquidity Requirement”). See “SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2017 BONDS – Liquidity Covenant” for a further description of such covenant, including a
description of the actions required to be taken if such covenant is not met on a Testing Date.

Approval of Management Consultants

Upon selecting a Management Consultant as required under the provisions of the Loan Agreement, the
Borrower will notify the Trustee of such selection. The Trustee will, as soon as practicable but in no case longer
than five Business Days after receipt of such notice, notify the Owners of all Bonds Outstanding under the Indenture
of such selection. Such notice must, among other requirements, state that an Owner will be deemed to have
consented to the selection of the Management Consultant unless such Owner submits an objection within 15 days of
the date that the notice is sent to the Owners. If the Owners of 66.6% or more in aggregate principal amount of the
Outstanding Bonds have been deemed to have consented to the selection of the Management Consultant or have not
responded to the request for consent by the end of the 15-day objection period, the Borrower will engage the
Management Consultant within three Business Days of receipt of the Trustee’s notice. If the Owners of more than
33.4% in aggregate Outstanding principal amount of the Bonds have objected to the Management Consultant
selected, the Borrower will select another Management Consultant in compliance with the procedures of the Loan
Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Approval of Management
Consultants.”

Affordability Covenant

The Borrower has agreed in the Loan Agreement that beginning on January 1, 2019, no less than 20% of
the total number of units of the Communities will at all times be rented to and occupied by Low Income Tenants (as
described herein) (the “Affordability Covenant”). See “Security and Sources of Payment for the Series 2017 Bonds
– Affordability Covenant” herein for a more detailed description.

Nonrecourse Obligations

The Borrower’s obligations under the Loan Agreement, the Series 2017 Notes and the Mortgages are
limited, nonrecourse obligations and the Borrower has no obligation to make payments of amounts due under the
Loan Agreement except from Project Revenues and from amounts held in the Funds and Accounts created under the
Indenture. No other revenues or assets of the Borrower will be available for the payment of, or as security for, the
Series 2017 Bonds. The right of the Issuer to collect and receive payments under the Loan Agreement has been

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assigned to the Trustee under the Indenture for the benefit of the Owners. No assets or other revenues of the Issuer
are or will be available for the payment of, or as security for, the Series 2017 Bonds.

Neither the State of Oklahoma (the “State”) nor any political subdivision, agency, or instrumentality
of the State, including the Issuer, will be liable or obligated (generally, specially, morally, or otherwise) to pay
the principal of the Series 2017 Bonds or redemption price of, or interest thereon, and neither the faith and
credit nor the taxing power of the State, the Issuer, or any other political subdivision, agency, or
instrumentality of the State is pledged to the payment of the principal or redemption price of, or interest on
the Series 2017 Bonds. The Issuer has no taxing power.

Certain Bondholders’ Risks

AN INVESTMENT IN THE SERIES 2017 BONDS INVOLVES A SIGNIFICANT DEGREE OF RISK. A

PROSPECTIVE BONDHOLDER IS ADVISED TO READ THIS ENTIRE OFFICIAL STATEMENT, INCLUDING THE
APPENDICES HERETO, BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE SERIES 2017 BONDS. SPECIAL
REFERENCE IS MADE TO THE SECTIONS “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS”
AND “CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD
BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2017 BONDS.

THE ISSUER

General

The Issuer is a public trust created by a Declaration of Trust dated November 1, 1974, as amended October
9, 1975 (the “Original Declaration”), for the furtherance of public purposes and the benefit of the State pursuant to
the provisions of Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, and Title 60, Oklahoma
Statutes 2016, Section 175.1 et seq., as amended (the “Trust Act”), and other applicable statutes and laws of the
State. The Original Declaration was further amended by an Amended and Restated Declaration of Trust dated
February 11, 1988, which, among other things, changed the name of the Issuer from The Oklahoma Development
Authority to The Oklahoma Development Finance Authority, and was accepted and approved by the Governor of
the State on February 12, 1988. The most recent amendment to the Original Declaration occurred in 1994 under the
provisions of an Amended and Restated Declaration of Trust dated July 1, 1994, which was approved by the
Governor on August 5, 1994. The purpose of this amendment was to conform the membership of the Issuer with
that of the Oklahoma Industrial Finance Authority pursuant to certain statutory changes.

Board of Directors

The Issuer is governed by a Board of Directors consisting of seven persons, appointed by the Governor for
overlapping terms, with the advice and consent of the State Senate. One member is the Director of the Oklahoma
Department of Commerce, who serves ex officio, but who is a voting member of the Board of Directors. One
member is selected from each of the six Congressional Districts of the State as they existed in 1960, at least five of
whom are required to have had at least fifteen years’ experience in banking, mortgage loans or financial
management, and the remaining member must have demonstrated outstanding ability in business or industry. The
members annually elect a Chairman, Vice Chairman, and Secretary from among the membership of the Board of
Directors.

The day-to-day management of the Issuer is vested in the President appointed by the Board of Directors.
Michael Davis serves as President of the Issuer. The President employs such officers and employees as designated
by the Board of Directors and directs and supervises the administrative affairs and general assignments of the Issuer.
The current address and telephone number of the Issuer are 9220 North Kelley Ave., Oklahoma City, Oklahoma,
73131, (405) 848-9761.

Indebtedness of the Issuer

The Issuer is empowered to issue and has issued revenue bonds for other ventures unrelated to the
Borrower. The Issuer has previously issued and may in the future issue bonds to finance facilities which may
compete with the Communities or other facilities owned by the Borrower.

Purposes and Powers

The authorized purposes of the Issuer include, but are not limited to, the following: (i) to expand and
establish agricultural and industrial enterprises; (ii) to provide pollution control facilities; (iii) to develop public or
4
private energy generating, distribution or conservation facilities and sources; (iv) to provide health care facilities;
(v) to provide infrastructure, waste water and capital improvement facilities; (vi) to provide educational facilities;
(vii) to provide recreational facilities; and (viii) to provide for short term advance funding and the purchase of the
obligations of political subdivisions throughout the State.

The Issuer has all powers necessary or appropriate to carry out and effectuate its purposes, including,
without limitation: (i) to make and execute contracts and all other instruments necessary or convenient for the
performance of its duties and the exercise of its powers and functions; (ii) to borrow money and to issue bonds to
provide financing for the purposes and projects of the Issuer and to provide for the security and sources of payments
therefor; (iii) to provide financing assistance by making, entering into or providing for guarantees, leases, insurance,
financing credits, loans, letters of credit, financing assistance payments, grants or other financial aid for the purposes
and projects provided; and (iv) to lend money or otherwise extend credit to any person and exercise all powers of a
lender or creditor; (v) and to collect fees and charges in connection with its loans, commitments and servicing,
including, but not limited to, reimbursement of costs of financing as the Issuer determines to be reasonable and
approves.

Limitations on Liability

The officers, directors, agents, employees and members of the Issuer shall not be personally liable for any
costs, losses, damages or liabilities caused or incurred by the Issuer or the Trustee in connection with the Series
2017 Bonds, the Indenture or the Loan Agreement, or for the payment of any obligation under the Series 2017
Bonds, the Indenture or the Loan Agreement.

THE BORROWER

Leading Life Senior Living, Inc. is a Texas nonprofit corporation. The Borrower is exempt from federal
income taxation pursuant to Section 501(c)(3) of the Code. The Borrower, which was formed on February 14, 2017,
has conducted no operations to date and has no significant assets.

The Borrower does not intend to acquire any substantial assets or engage in any substantial business
activities other than those related to the acquisition, ownership and operation of the Communities, as described
below and in Appendix A. However, other members of the development team have and may continue to engage in
the acquisition, development, ownership and management of similar types of housing and assisted living projects.

The Borrower is the only entity obligated to pay debt service on the Series 2017 Bonds.

The Communities

The Communities comprise two stand-alone properties in Edmond, Oklahoma and Oklahoma City,
Oklahoma. The Communities are part of the brand “Autumn Leaves,” and consists of 86 units of memory care with
100 licensed beds. Information about the Communities is summarized in the table below. See APPENDIX A.

Year Built Memory Care Budgeted Occupancy(1)

Community Units Beds
Autumn Leaves - Edmond 2014 42 46(2) 92.4%
Autumn Leaves - SW OKC 2015 44 46(2) 99.3%
Total 86 92 95.9%
______________________
(1) Average total occupancy for the ten month period ending October 31, 2017 was 95.9% with an ending monthly occupancy for October 2017
of 97% or 89 occupied beds.
(2) Each Community is licensed for 50 beds but budgets to operate 46 beds.

Purchase And Sale Agreement

The Communities will be acquired by the Borrower on the closing date of the Series 2017 Bonds (the
“Closing Date”) with Series 2017 Bond proceeds from the owners of the real and personal property comprising the
Communities pursuant to two separate Agreements of Purchase and Sale, each dated October 25, 2017, for a
purchase price of $25,500,000, subject to customary closing adjustments.

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The Manager and the Management Agreements

Concurrently with the issuance of the Series 2017 Bonds, the Borrower will enter into a Management
Agreement with respect to each Community, each dated and effective as of the date of issuance of the Series 2017
Bonds (together, the “Management Agreements”), with the Manager. The Manager is headquartered in Irving (Las
Colinas), Texas, was incorporated in 2008 and currently has corporate personnel of approximately 100 employees.

In addition to operating the Communities, the Manager operates 44 other memory care communities
throughout Florida, Georgia, Kansas, Illinois, Missouri, Oklahoma, South Carolina, Texas, and Wisconsin. See
APPENDIX A – “MANAGEMENT OF THE COMMUNITIES – The Manager,” “– The Management Agreements.”

As compensation for providing services, the Borrower will pay the Manager an annual fee each Fiscal Year
equal to five percent (5%) of the gross revenues of the Communities. The payment of fees to the Manager under the
Management Agreements is subordinated to the payment of debt service on the Series 2017 Bonds to the extent that
money in the Revenue Fund is insufficient in any month to make all current and deferred deposits (other than
deposits to the Surplus Fund provided in the Indenture), provided that the payment of any such fee so subordinated
will accrue interest at a rate of four percent (4%) and will under no circumstance be subordinated for a period
exceeding five years after the original due date of such fee. The Manager’s fees are also required to be deferred if
the Debt Service Coverage Ratio is less than the Coverage Test or the Liquidity Requirement is not met as of any
Testing Date, or if an event of default under the Indenture or any Borrower Document (as defined in the Indenture)
has occurred and is continuing. Notwithstanding the foregoing, pursuant to the Indenture, any Deferred
Management Fee must be paid within five years of the original due date of such fee (together with interest due
thereon) unless a Favorable Opinion of Bond Counsel is delivered to the effect that such payment is not required.
The payment of such regular fees and any deferred fees will be made in accordance with the Indenture. See
APPENDIX A – “MANAGEMENT OF THE COMMUNITIES – The Manager” and “– The Management Agreements” and
APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section 5.04. Revenue Fund.”

Use of Project Revenues

A Revenue Fund will be established under the Indenture. On a monthly basis, certain moneys will be
deposited in the Revenue Fund, including all Loan Payments under the Loan Agreement and all Project Revenues.
See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Revenue Fund.” Money on deposit in
the Revenue Fund will be disbursed on the 15th day of each month in the following order of priority:

______________________
(1) The payment of any Deferred Management Fee, and any interest due thereon, will occur on the earlier of the date on which the Coverage
Test and Liquidity Requirement are met as of any Testing Date or five years after the original due date of such fee.

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 Failure to deposit sufficient Project Revenues to make the deposits described above will not, in itself,
constitute an Event of Default under the Indenture. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –
The Indenture – Section 5.04. Revenue Fund.”

APPRAISALS

JLL – Valuation & Advisory Services, LLC (the “Appraiser”) was retained by the Borrower to prepare
appraisal reports (the “Appraisals”) of the value of each Community. The Appraisals were completed in November
2017. For a summary of the Appraisals, see APPENDIX E – “SUMMARY APPRAISAL REPORT.” The purpose of the
Appraisals was to provide the market value of the real estate, furniture, fixtures and equipment, and intangibles of
each of the Communities as going concerns on both an “as is” and investment value basis, as of January 11, 2017,
subject to certain general underlying assumptions and limiting conditions set forth therein. The summary of certain
aspects of the Appraisals which follows does not purport to be complete or definitive and is qualified in its entirety
by reference to the full Appraisals. The individual Appraisals for each of the Communities are available from the
Underwriter upon request prior to the closing of the Series 2017 Bonds.

Subject to the methods used and to the general underlying assumptions and limiting conditions as further
described in the Appraisals, the Appraiser determined (i) the total appraised “as is” value of the Communities on an
individual basis to be $26,440,000, (ii) the total appraised “as is bulk portfolio value” of the Communities as a
portfolio to be $27,360,000 and (iii) the total appraised investment value of the Communities on an individual basis
assuming nonprofit ownership and ad valorem tax exemption to be $29,340,000, and allocated the appraised
investment value of the Communities as follows:

Allocation of Value – Investment Value Indication

Furniture,
Fixtures & Real Estate &
Community Equipment Improvements Intangibles Total Value Allocation %
Autumn Leaves - Edmond $310,000 $11,370,000 $2,550,000 $14,230,000 48.50%
Autumn Leaves - SW OKC 330,000 12,150,000 2,630,000 15,110,000 51.50%
Totals $640,000 $23,520,000 $5,180,000 $29,340,000 100%

The Appraisals include information regarding the procedures utilized in preparing the Appraisals and the
underlying general assumptions and limiting conditions. The conclusions and much of the other information
included in the Appraisals are based on the assumptions and rationale stated therein. In some instances, the
currently available information may be incomplete, may not necessarily disclose all material facts that might affect
the Communities, and, in any case, may change after the dates of the Appraisals. Accordingly, the assumptions and
other information in the Appraisals should be carefully evaluated by a prospective investor in the light of the
circumstances then prevailing.

Appraisals, by their nature, are based on the judgment of the Appraiser, represent only estimates of value
and should not be relied upon as a measure of realizable value. There can be no assurance that information set forth
therein continues to be accurate in all respects as of the date hereof.

Information taken from the appraisal reports prepared by the Appraiser should be evaluated within the
context of the full narrative report. Information presented out of the context of the full narrative report may be
misleading. There is no assurance that the “market value” set forth in the Appraisals would be realized in the event
of the foreclosure or forced sale of the Communities. See “Certain Bondholders’ Risks – Appraisals.”

PLAN OF FINANCING

Application of Bond Proceeds

The proceeds of the Series 2017 Bonds will be loaned by the Issuer to the Borrower pursuant to the Loan
Agreement, and will be applied together with other available funds to (i) finance the cost of the acquisition by the
Borrower of the Communities located in Edmond, Oklahoma and Oklahoma City, Oklahoma, including the
buildings, furniture, fixtures and equipment comprising such facilities and including the real property upon which
the facilities are located, (ii) fund certain capital expenditures and startup expenses of the Borrower, (iii) fund a debt
service reserve fund for the Second Tier Bonds, and (iv) pay the costs of issuance of the Series 2017 Bonds. See
“ESTIMATED SOURCES AND USES OF FUNDS” herein.

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 ESTIMATED SOURCES AND USES OF FUNDS

The following are the estimated sources and uses of funds in connection with the issuance of the Series
2017 Bonds. Potential investors should review this chart in the final Official Statement for possible changes in the
sources and uses.

Series Series
2017A-1 2017A-2 Second
Bonds Bonds Tier Bonds Total
Sources of Funds
Par Amount $14,640,000 $3,240,000 $12,395,000 $30,275,000
Net Original Issue Discount (317,401) (65,476) (318,571) (701,448)
Total Sources of Funds $14,322,599 $3,174,524 $12,076,429 $29,573,552

Uses of Funds
Acquisition of the Communities $14,036,147 - $11,463,853 $25,500,000
Startup Expenses – Operating Fund(1) - 850,000 - 850,000
Debt Service Reserve Fund(2) - - 371,047 371,047
Costs of Issuance(3) 286,452 2,324,524 241,529 2,852,505
Total Uses of Funds $14,322,599 $3,174,524 $12,076,429 $29,573,552
______________________
(1) Includes certain capital expenditures and startup expenses.
(2) Based on six months of Maximum Annual Debt Service.
(3) Includes Underwriter’s discount, trustee fee, legal, accounting and other professional fees, printing and other miscellaneous expenses relating
to the issuance and sale of the Series 2017 Bonds.

[Remainder of Page Intentionally Left Blank]

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 ESTIMATED DEBT SERVICE SCHEDULE

The following table sets forth, for each fiscal year of the Borrower ending December 31, the estimated
amounts required for the payment of principal on the Series 2017 Bonds at stated maturity or upon mandatory
sinking fund redemption and interest thereon.

Fiscal Year Ending Series 2017A-1 Taxable Series 2017A-2 Bonds Second Tier Bonds
December 31 Principal Interest Principal Interest Principal Interest Total
2018 $ - $ 308,147 $ - $ 69,012 $ - $ 312,099 $ 689,258
2019 80,000 580,100 165,000 128,588 150,000 586,850 1,690,538
2020 85,000 577,213 170,000 122,900 155,000 580,750 1,690,863
2021 90,000 574,150 175,000 116,863 160,000 574,550 1,690,563
2022 95,000 570,825 180,000 110,650 165,000 568,050 1,689,525
2023 90,000 567,763 190,000 104,263 175,000 561,350 1,688,376
2024 95,000 564,525 195,000 97,375 185,000 554,250 1,691,150
2025 100,000 561,113 205,000 89,375 185,000 546,850 1,687,338
2026 105,000 557,613 210,000 81,175 195,000 539,350 1,688,138
2027 110,000 553,675 220,000 72,775 200,000 531,450 1,687,900
2028 110,000 550,088 230,000 63,775 215,000 523,250 1,692,113
2029 115,000 546,000 240,000 54,250 220,000 514,375 1,689,625
2030 120,000 541,300 250,000 43,641 230,000 504,363 1,689,304
2031 125,000 536,500 260,000 32,594 240,000 493,900 1,687,994
2032 130,000 531,500 270,000 21,109 255,000 482,988 1,690,597
2033 140,000 526,100 280,000 9,188 265,000 471,400 1,691,688
2034 435,000 517,600 - - 280,000 459,250 1,691,850
2035 455,000 500,000 - - 290,000 446,538 1,691,538
2036 475,000 481,500 - - 300,000 433,375 1,689,875
2037 490,000 462,500 - - 320,000 419,650 1,692,150
2038 510,000 442,700 - - 330,000 405,138 1,687,838
2039 530,000 422,100 - - 350,000 389,625 1,691,725
2040 555,000 400,600 - - 360,000 372,000 1,687,600
2041 575,000 378,200 - - 385,000 353,625 1,691,825
2042 600,000 355,000 - - 400,000 334,250 1,689,250
2043 625,000 330,700 - - 420,000 314,000 1,689,700
2044 650,000 305,500 - - 440,000 292,750 1,688,250
2045 675,000 279,200 - - 465,000 270,500 1,689,700
2046 700,000 252,000 - - 490,000 246,875 1,688,875
2047 730,000 223,700 - - 515,000 222,000 1,690,700
2048 760,000 194,200 - - 540,000 196,125 1,690,325
2049 790,000 163,500 - - 570,000 168,625 1,692,125
2050 825,000 131,500 - - 595,000 139,750 1,691,250
2051 855,000 98,200 - - 625,000 109,750 1,687,950
2052 890,000 63,700 - - 660,000 78,000 1,691,700
2053 925,000 27,700 - - 1,065,000 40,000 2,057,700

Total $ 14,640,000 $ 14,676,709 $ 3,240,000 $ 1,217,531 $ 12,395,000 $ 14,037,649 $ 60,206,889

[Remainder of Page Intentionally Left Blank]

9
 THE SERIES 2017 BONDS

General

The Series 2017 Bonds are issuable as fully registered bonds without coupons in denominations of $5,000
or any integral multiple thereof. The Series 2017 Bonds will be dated their date of delivery (the “Dated Date”). The
Series 2017 Bonds will bear interest at the rates, and will mature on the dates and in the amounts, all as set forth on
the inside cover page and page (i) of this Official Statement. Interest on the Series 2017 Bonds will be payable
semiannually on each January 1 and July 1 of each year (the “Interest Payment Dates”) commencing July 1, 2018,
until stated maturity or prior redemption and be payable as to principal on the dates and in the amounts as set forth
in the Indenture. Interest will be computed on the basis of a year of 360 days and twelve 30-day months.

Each Series 2017 Bond will bear interest from the Interest Payment Date preceding the date of
authentication thereof, unless the date of such authentication is after a Record Date (as defined below), in which
case it will bear interest from the next succeeding Interest Payment Date succeeding the fifteenth day (whether or
not a Business Day) of the calendar month preceding the applicable Interest Payment Date (the “Record Date”), or
unless no interest has been paid on such Series 2017 Bond, from the Dated Date; provided, however, that if the
interest thereon is in default, as shown by the records of the Trustee, such Series 2017 Bond will bear interest from
the date to which interest has been paid in full. The Series 2017 Bonds authenticated on or before the first Record
Date following the issuance of the Series 2017 Bonds will bear interest from the Dated Date.

Transfer and Exchange of the Series 2017 Bonds

So long as a series of the Series 2017 Bonds are in book-entry only form, Cede & Co., as nominee of DTC,
will be the sole registered owner of such Series 2017 Bonds. Transfers of beneficial interests in the Series 2017
Bonds will be made as described in “BOOK-ENTRY-ONLY SYSTEM.”

So long as DTC acts as securities depository for a series of the Series 2017 Bonds, as described under the
“BOOK-ENTRY ONLY SYSTEM” herein, all references herein to “Owner”, “owner”, “Holder”, or “holder” of any such
Series 2017 Bonds or to “Bondowner”, “Bondholder”, “bondowner” or “bondholder” are deemed to refer to Cede &
Co., as nominee for DTC, and not to Participants, Indirect Participants or Beneficial Owners (as defined herein).

Mandatory Redemption of Series 2017 Bonds

Series 2017 Bonds of each series will be called for redemption (1) in whole or in part in the event the
Communities or any portion thereof is damaged or destroyed or taken in a condemnation proceeding and Net
Proceeds resulting therefrom are to be applied to the payment of the Series 2017 Notes as provided in the Loan
Agreement and the Borrower pursuant to the Loan Agreement has elected to use the Net Proceeds to redeem Series
2017 Bonds of such series, (2) in whole in the event the Borrower exercises its option to terminate the Loan
Agreement due to the events permitting termination listed therein, or (3) in whole or in part from proceeds of the
Title Policies pursuant to the Loan Agreement. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The
Indenture – Section 3.01. Mandatory Redemption of Series 2017 Bonds.”

If called for redemption at any time pursuant to (1) through (3) above, the Series 2017 Bonds of each series
to be redeemed will be subject to redemption by the Issuer prior to maturity, in whole at any time or (in the case of
redemption pursuant to clause (1) or (3) above) in part at any time (less than all of such Series 2017 Bonds to be
selected in accordance with the provisions of the Indenture (as described under the caption “Selection of Series 2017
Bonds to be Redeemed” below)) at a redemption price equal to 100% of the principal amount thereof plus accrued
interest to the redemption date; such redemption date to be a date determined by the Borrower.

[Remainder of Page Intentionally Left Blank]

10
Optional Redemption of Series 2017 Bonds

The Senior Bonds and Second Tier Bonds are subject to optional redemption prior to maturity by the Issuer
at the written direction of the Borrower in whole or in part on or after July 1, 2024 at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the date fixed for redemption.

The Borrower may condition any election to optionally redeem Bonds upon any condition. To the extent
that any condition specified in the notice of redemption does not occur, the Borrower may direct the Trustee to
rescind the notice. Upon receipt of such direction by the Borrower, the Trustee will notify the Owners of the Bonds
that such redemption has been rescinded.

Mandatory Sinking Fund Redemption

Series 2017A-1 Bonds. The Series 2017A-1 Bonds are subject to mandatory sinking fund redemption at a
redemption price equal to 100% of the principal amount thereof plus accrued interest on the dates and in the
principal amounts shown below:

Series 2017A-1 Bonds Maturing

July 1, 2028

Date Amount Date Amount

January 1, 2019 $40,000 January 1, 2024 $50,000
July 1, 2019 40,000 July 1, 2024 45,000
January 1, 2020 45,000 January 1, 2025 55,000
July 1, 2020 40,000 July 1, 2025 45,000
January 1, 2021 50,000 January 1, 2026 55,000
July 1, 2021 40,000 July 1, 2026 50,000
January 1, 2022 60,000 January 1, 2027 70,000
July 1, 2022 35,000 July 1, 2027 40,000
January 1, 2023 45,000 January 1, 2028 55,000
July 1, 2023 45,000 July 1, 2028 55,000*
________________
* Due at stated maturity

Series 2017A-1 Bonds Maturing

July 1, 2038

Date Amount Date Amount

January 1, 2029 $60,000 January 1, 2034 $220,000
July 1, 2029 55,000 July 1, 2034 215,000
January 1, 2030 65,000 January 1, 2035 230,000
July 1, 2030 55,000 July 1, 2035 225,000
January 1, 2031 65,000 January 1, 2036 245,000
July 1, 2031 60,000 July 1, 2036 230,000
January 1, 2032 65,000 January 1, 2037 245,000
July 1, 2032 65,000 July 1, 2037 245,000
January 1, 2033 75,000 January 1, 2038 255,000
July 1, 2033 65,000 July 1, 2038 255,000*
________________
* Due at stated maturity

11
 Series 2017A-1 Bonds Maturing
July 1, 2053

Date Amount Date Amount

January 1, 2039 $265,000 July 1, 2046 $350,000
July 1, 2039 265,000 January 1, 2047 365,000
January 1, 2040 280,000 July 1, 2047 365,000
July 1, 2040 275,000 January 1, 2048 380,000
January 1, 2041 290,000 July 1, 2048 380,000
July 1, 2041 285,000 January 1, 2049 395,000
January 1, 2042 300,000 July 1, 2049 395,000
July 1, 2042 300,000 January 1, 2050 415,000
January 1, 2043 315,000 July 1, 2050 410,000
July 1, 2043 310,000 January 1, 2051 430,000
January 1, 2044 325,000 July 1, 2051 425,000
July 1, 2044 325,000 January 1, 2052 445,000
January 1, 2045 340,000 July 1, 2052 445,000
July 1, 2045 335,000 January 1, 2053 465,000
January 1, 2046 350,000 July 1, 2053 460,000*
________________
* Due at stated maturity

Series 2017A-2 Bonds. The Series 2017A-2 Bonds are subject to mandatory sinking fund redemption at a
redemption price equal to 100% of the principal amount thereof plus accrued interest on the dates and in the
principal amounts shown below:

Series 2017A-2 Bonds Maturing

July 1, 2023

Date Amount Date Amount

January 1, 2019 $85,000 July 1, 2021 $90,000
July 1, 2019 80,000 January 1, 2022 90,000
January 1, 2020 80,000 July 1, 2022 90,000
July 1, 2020 90,000 January 1, 2023 95,000
January 1, 2021 85,000 July 1, 2023 95,000*
________________
* Due at stated maturity

Series 2017A-2 Bonds Maturing

July 1, 2028

Date Amount Date Amount

January 1, 2024 $ 95,000 July 1, 2026 $105,000
July 1, 2024 100,000 January 1, 2027 105,000
January 1, 2025 105,000 July 1, 2027 115,000
July 1, 2025 100,000 January 1, 2028 115,000
January 1, 2026 105,000 July 1, 2028 115,000*
________________
* Due at stated maturity

12
 Series 2017A-2 Bonds Maturing
July 1, 2033

Date Amount Date Amount

January 1, 2029 $120,000 July 1, 2031 $130,000
July 1, 2029 120,000 January 1, 2032 135,000
January 1, 2030 125,000 July 1, 2032 135,000
July 1, 2030 125,000 January 1, 2033 140,000
January 1, 2031 130,000 July 1, 2033 140,000*
________________
* Due at stated maturity

Second Tier Bonds. The Second Tier Bonds are subject to mandatory sinking fund redemption at a
redemption price equal to 100% of the principal amount thereof plus accrued interest on the dates and in the
principal amounts shown below:

Series 2017B Bonds Maturing

July 1, 2028

Date Amount Date Amount

January 1, 2019 $70,000 January 1, 2024 $90,000
July 1, 2019 80,000 July 1, 2024 95,000
January 1, 2020 75,000 January 1, 2025 90,000
July 1, 2020 80,000 July 1, 2025 95,000
January 1, 2021 75,000 January 1, 2026 95,000
July 1, 2021 85,000 July 1, 2026 100,000
January 1, 2022 80,000 January 1, 2027 100,000
July 1, 2022 85,000 July 1, 2027 100,000
January 1, 2023 85,000 January 1, 2028 110,000
July 1, 2023 90,000 July 1, 2028 105,000*
________________
* Due at stated maturity

Series 2017B Bonds Maturing

July 1, 2038

Date Amount Date Amount

January 1, 2029 $110,000 January 1, 2034 $140,000
July 1, 2029 110,000 July 1, 2034 140,000
January 1, 2030 115,000 January 1, 2035 145,000
July 1, 2030 115,000 July 1, 2035 145,000
January 1, 2031 120,000 January 1, 2036 150,000
July 1, 2031 120,000 July 1, 2036 150,000
January 1, 2032 125,000 January 1, 2037 160,000
July 1, 2032 130,000 July 1, 2037 160,000
January 1, 2033 130,000 January 1, 2038 165,000
July 1, 2033 135,000 July 1, 2038 165,000*
________________
* Due at stated maturity

13
 Series 2017B Bonds Maturing
July 1, 2053

Date Amount Date Amount

January 1, 2039 $175,000 July 1, 2046 $245,000
July 1, 2039 175,000 January 1, 2047 260,000
January 1, 2040 180,000 July 1, 2047 255,000
July 1, 2040 180,000 January 1, 2048 265,000
January 1, 2041 195,000 July 1, 2048 275,000
July 1, 2041 190,000 January 1, 2049 285,000
January 1, 2042 200,000 July 1, 2049 285,000
July 1, 2042 200,000 January 1, 2050 300,000
January 1, 2043 210,000 July 1, 2050 295,000
July 1, 2043 210,000 January 1, 2051 310,000
January 1, 2044 220,000 July 1, 2051 315,000
July 1, 2044 220,000 January 1, 2052 330,000
January 1, 2045 230,000 July 1, 2052 330,000
July 1, 2045 235,000 January 1, 2053 530,000
January 1, 2046 245,000 July 1, 2053 535,000*
______________________
*
Due at stated maturity

The principal amount of the Series 2017 Bonds of any series and stated maturity bearing interest at the
same interest rate required to be redeemed on each date set forth above will be reduced by the principal amount of
the Series 2017 Bonds of such series and stated maturity bearing such rate of interest specified by Borrower request
at least 45 days prior to the redemption date that have been either (i) purchased by or on behalf of the Borrower and
delivered to the Trustee for cancellation, or (ii) redeemed other than through the operation of the applicable
provisions of the Indenture, and that have not been previously made the basis for a reduction of the principal amount
of the Series 2017 Bonds of such series and stated maturity and interest rate to be redeemed on a sinking fund
redemption date.

Mandatory Redemption of Tax-Exempt Bonds

The Tax-Exempt Bonds of each series are subject to mandatory redemption in whole, or in part if such
partial redemption will preserve the exemption from gross income for federal income tax purposes of interest on the
remaining Tax-Exempt Bonds Outstanding of such series (such Tax-Exempt Bonds to be designated by the
Borrower Representative in writing to the Trustee), at a redemption price equal to (a) prior to the date such Tax-
Exempt Bonds are subject to optional redemption as described in “Optional Redemption of Series 2017 Bonds”
above, 105% of the principal amount thereof to be redeemed, and (b) on and after the date such Tax-Exempt Bonds
are subject to redemption as described in “Optional Redemption of Series 2017 Bonds” above, the applicable
percentage of the principal amount thereof to be redeemed as described in “Optional Redemption of Series 2017
Bonds” above, in each case together with unpaid interest accrued to the date fixed for redemption, if (i) a final
decree or judgment of any federal court, in which the Borrower participates to the extent it deems sufficient, or (ii) a
final action by the IRS, in proceedings in which the Borrower participates to the extent it deems sufficient,
determines that the interest paid or payable on any such Tax-Exempt Bonds to other than, as provided in the Code, a
“substantial user” of the Project or a “related person” is or was includable in the gross income of the owner thereof
for federal income tax purposes under the Code, as a result of the failure by the Borrower to observe or perform any
covenant, condition, or agreement on its part to be observed or performed under the Loan Agreement or the
inaccuracy of any representation by the Borrower under the Loan Agreement; provided, however, that no decree or
judgment by any court or action by the IRS is considered final unless the registered owner involved in such
proceeding or action (A) gives the Borrower and the Trustee prompt written notice of the commencement thereof
and (B), if the Borrower agrees to pay all expenses in connection therewith and to indemnify such registered owner
against all liabilities in connection therewith, offers the Borrower the opportunity to control the defense thereof.
Any such redemption will be made on a date determined by the Borrower not more than 180 days after the date of
such final decree, judgment or action. The Borrower must give the Issuer and the Trustee not less than 45 days
written notice of such redemption.

Mandatory Redemption from Debt Service Reserve Fund

The Second Tier Bonds are subject to mandatory redemption in whole or in part at any time at a redemption
price equal to the principal amount to be redeemed together with unpaid interest accrued to the date fixed for
14
redemption, and without premium, upon direction from the Owners of a majority in outstanding Principal Amount
of the Second Tier Bonds are to be redeemed with amounts on deposit in the Debt Service Reserve Fund pursuant to
the Indenture in connection with the occurrence of an Event of Default related to the payment of principal or
redemption price of, or interest on, the Second Tier Bonds. Any such redemption will be made pro rata on the basis
of Principal Amount among the maturities, and be made on a date determined by the direction of such Owners not
more than 180 days after the date notice from such Owners is received by the Trustee. Such Owners must give the
Trustee and the Borrower not less than 45 days written notice of such redemption date.

Special Redemption Upon Sale of Facilities

The Series 2017 Bonds are subject to mandatory redemption in whole or in part at any time at a redemption
price equal to the principal amount to be redeemed together with unpaid interest accrued to the date fixed for
redemption, and without premium, to the extent the Borrower has received Sale Proceeds from the sale of a portion
of the Communities pursuant to the Loan Agreement. Any such redemption will be made on a date determined by
the Borrower not more than 180 days after the receipt by the Borrower of such Sale Proceeds. The Borrower must
give the Trustee not less than 45 days written notice of such redemption date.

Purchase in Lieu of Redemption

If any Series 2017 Bond is called for optional or extraordinary redemption in whole or in part, the Borrower
may elect to have such Series 2017 Bond purchased in lieu of redemption, provided, however, that no such purchase
may be made unless the Borrower has obtained an opinion of Bond Counsel to the effect that the purchase will not
adversely affect the exclusion of interest on the Tax-Exempt Bonds from the gross income of the Owners thereof for
federal income tax purposes. The purchase price of the Series 2017 Bonds is required to be equal to the outstanding
principal of, accrued and unpaid interest on and the redemption premium, if any, that would have been payable on
such Series 2017 Bonds on the scheduled redemption date. No notice of purchase in lieu of redemption is required
to be given to Owners of Series 2017 Bonds other than the notice of redemption otherwise required.

Selection of Series 2017 Bonds to be Redeemed

Series 2017 Bonds may be redeemed only in Authorized Denominations. Subject to the requirements of
any Clearing Agency, if less than all of the Series 2017 Bonds are being redeemed or purchased, the particular
Series 2017 Bonds of each maturity and interest rate to be redeemed or purchased will be selected by the Trustee by
lot or in such manner as the Trustee in its discretion may deem proper and in accordance with the procedures of the
Clearing Agency (a) in the case of mandatory sinking fund redemptions, from the Outstanding Series 2017 Bonds of
the applicable series or subseries, maturity and interest rate to be redeemed in accordance with the Indenture, (b) in
the case of any mandatory redemption from Net Proceeds, optional redemption, special mandatory redemption of
Tax-Exempt Bonds or special redemption upon the sale of facilities, from all Outstanding Series 2017 Bonds of all
series, pro rata among all series based on relative outstanding principal amount, and (c) in the case of any mandatory
redemption as described in “– Mandatory Redemption from Debt Service Reserve Funds” and from the outstanding
Second Tier Bonds of the applicable series.

Subject to the requirements of any Clearing Agency, if it is determined that less than all of the principal
amount represented by any Series 2017 Bond of such series of any maturity and interest rate is to be called for
redemption, then, following notice of intention to redeem such principal amount, the Owner thereof will surrender
such Series 2017 Bond to the Trustee on or before the applicable redemption date for (a) payment on the redemption
date to such Owner of the redemption price of the amount called for redemption and (b) delivery to such Owner of a
new Series 2017 Bond or Series 2017 Bonds of such series, maturity and interest rate in the aggregate principal
amount of the unredeemed balance of the principal amount of such Series 2017 Bond, which must be an Authorized
Denomination. A new Series 2017 Bond of such series, maturity and interest rate representing the unredeemed
balance of such Series 2017 Bond will be issued to the Owner thereof, without charge therefor. If the Owner of any
Series 2017 Bond of such series, maturity and interest rate or integral multiple of the Authorized Denomination
selected for redemption fails to present such Series 2017 Bond of such series, maturity and interest rate to the
Trustee for payment and exchange as aforesaid, such Series 2017 Bond will, nevertheless, become due and payable
on the date fixed for redemption to the extent of the amount called for redemption (and to that extent only), and
interest will cease to accrue from the date fixed for redemption.

Notice of Redemption

In the event any of the Series 2017 Bonds are called for redemption, the Trustee will give notice, in the
name of the Issuer, of the redemption of such Series 2017 Bonds, which notice must (i) specify the series, maturity
15
and interest rate of the Series 2017 Bonds to be redeemed, the redemption date, the redemption price and the place
or places where amounts due upon such redemption will be payable (which will be the Designated Office of the
Trustee), and any conditions required to be satisfied prior to the redemption date and, if less than all of the Series
2017 Bonds are to be redeemed, the numbers of the Series 2017 Bonds, and the portions of the Series 2017 Bonds,
to be so redeemed, and (ii) state that on the redemption date the Series 2017 Bonds to be redeemed will cease to bear
interest. Such notice must be given electronically or by Mail to the Owners of the Series 2017 Bonds to be
redeemed, at least 20 days but no more than 60 days prior to the date fixed for redemption.

To the extent that any of the conditions precedent in the notice of redemption do not occur, the Borrower
may direct the Trustee to rescind such notice.

The Trustee may give any other or additional redemption notice as it deems necessary or desirable.

Any Series 2017 Bonds which have been duly selected for redemption and which are deemed to be paid in
accordance with the Indenture will cease to bear interest on the specified redemption date.

Payment of Redemption Price

Except in the case of a mandatory sinking fund redemption as described in “– Mandatory Sinking Fund
Redemption,” for the redemption of any of the Series 2017 Bonds of a series, the Trustee will cause to be deposited
in the applicable Special Redemption Account of the applicable Bond Fund, whether out of Project Revenues or any
other money constituting the applicable Trust Estate, including Net Proceeds of Insurance Proceeds or
Condemnation Awards available for such purpose pursuant to the Loan Agreement, or otherwise, an amount
sufficient to pay the principal of, premium, if any, and interest to become due on the date fixed for such redemption.
Any such deposit to be made under the Indenture will be reduced by the amount of money in such Special
Redemption Account available for and used on such redemption date for payment of the principal of, premium, if
any, and accrued interest on the Series 2017 Bonds to be redeemed.

Payment of Principal and Interest

Except in the case of payments made pursuant to mandatory sinking fund redemptions, the principal of and
premium, if any, on the Bonds shall be payable, when due, in lawful money of the United States of America at the
Designated Office of the Trustee upon presentation and surrender of the Bonds. Payment of interest on the Bonds
shall be made on each Interest Payment Date to the Owner thereof as of the Record Date, by check or draft mailed
by the Trustee on such Interest Payment Date to the Owner at its address as it appears on the registration books
maintained by or on behalf of the Trustee or at such other address as is furnished to the Trustee in writing by such
Owner prior to such Record Date. Payment of interest on any Bonds may, upon written request to the Trustee of any
Owner of Bonds in an aggregate principal amount of at least $100,000, be transmitted by wire transfer of
immediately available funds on the Interest Payment Date to such Owner to the bank account number at a bank
located within the continental United States on file with the Trustee as of the Record Date. Any such wire transfer
request shall continue in force until revoked in writing by such Owner to the Trustee, and to be effective as to any
interest payment such revocation must be received by the Trustee prior to the applicable Record Date.

BOOK-ENTRY ONLY SYSTEM

This section describes how ownership of the Series 2017 Bonds is to be transferred and how the principal
of and interest on the Series 2017 Bonds are to be paid to and credited by DTC while the Series 2017 Bonds are
registered in its nominee name. The information in this section concerning DTC and the book-entry only system has
been provided by DTC for use in disclosure documents such as this Official Statement. The Borrower and the
Underwriter believe the source of such information to be reliable, but take no responsibility for the accuracy or
completeness thereof.

The Borrower cannot and does not give any assurance that (1) DTC will distribute payments of debt
service on the Series 2017 Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or
others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Series 2017
Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3)
DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are
on file with the United States Securities and Exchange Commission, and the current procedures of DTC to be
followed in dealing with DTC Participants are on file with DTC.

16
 DTC will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as
fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as
may be requested by an authorized representative of DTC. One fully registered certificate will be issued for each
maturity and interest rate of the Series 2017 Bonds, in the aggregate principal amount of each maturity and interest
rate, and will be deposited with DTC.

DTC, the worlds’ largest securities depository, is a limited-purpose trust company organized under the New
York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code,
and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s
participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic computerized book-
entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement
of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC
is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). DTC has Standard & Poor’s highest rating of AA+. The DTC Rules applicable to its Participants
are on file with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.

Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Series 2017 Bonds on DTC’s records. The ownership interest of each actual
purchaser of each Series 2017 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect
Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase.
Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the Series 2017 Bonds are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2017
Bonds, except in the event that use of the Book-Entry Only System for the Series 2017 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2017 Bonds deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co, or such other name as may be requested by an
authorized representative of DTC. The deposit of Series 2017 Bonds with DTC and their registration in the name of
Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge
of the actual Beneficial Owners of the Series 2017 Bonds; DTC’s records reflect only the identity of the Direct
Participants to whose accounts such Series 2017 Bonds are credited, which may or may not be the Beneficial
Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on
behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of the Series 2017 Bonds may wish to take certain steps to augment the transmission to them of
notices of significant events with respect to the Series 2017 Bonds, such as redemptions, tenders, defaults and
proposed amendments to the Series 2017 Bond documents. For example, Beneficial Owners of the Series 2017
Bonds may wish to ascertain that the nominee holding the Series 2017 Bonds for their benefit has agreed to obtain
and transmit notices to the Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their
names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of a maturity and interest rate of the Series 2017
Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such Series 2017 Bonds to be redeemed.

17
 Neither DTC, Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2017
Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual
procedures, DTC mails an omnibus proxy (the “Omnibus Proxy”) to the Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose
accounts the Series 2017 Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).

Principal, redemption premium, if any, and interest payments on the Series 2017 Bonds will be made to
Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is
to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the
Issuer or the Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and
will be the responsibility of such Participant and not of DTC, the Trustee or the Issuer, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of principal, redemption premium, if any,
and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is
the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of
Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Series 2017 Bonds
at any time by giving notice to the Trustee and the Issuer. Under certain circumstances, in the event that a successor
depository is not obtained, Series 2017 Bond certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers for the Series 2017 Bonds
through DTC (or a successor securities depository). In that event, Series 2017 Bond certificates will be printed and
delivered as provided in the Indenture.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2017 BONDS,
REFERENCES HEREIN TO THE HOLDERS OR REGISTERED OWNERS OF THE SERIES 2017 BONDS
SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2017
BONDS.

The Issuer can make no assurances that DTC will distribute payments of principal of, redemption premium,
if any, or interest on the Series 2017 Bonds to the Direct Participants, or that Direct and Indirect Participants will
distribute payments of principal of, redemption price, if any, or interest on the Series 2017 Bonds or redemption
notices to the Beneficial Owners of such Series 2017 Bonds or that they will do so on a timely basis, or that DTC or
any of its Participants will act in a manner described in this Official Statement. The Issuer is not responsible or
liable for the failure of DTC to make any payment to any Direct Participant or failure of any Direct or Indirect
Participant to give any notice or make any payment to a Beneficial Owner in respect to the Series 2017 Bonds or any
error or delay relating thereto.

The rights of holders of beneficial interests in the Series 2017 Bonds and the manner of transferring or
pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2017 Bonds
may want to discuss the manner of transferring or pledging their interest in the Series 2017 Bonds with their legal
advisors. For every transfer and exchange of beneficial ownership of the Series 2017 Bonds, a Beneficial Owner
may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation
thereto.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS

Limited Obligations

The Series 2017 Bonds and the interest thereon are limited obligations of the Issuer, payable solely from
and secured exclusively by certain payments to be made by the Borrower under the Loan Agreement and under the
Series 2017 Notes, and certain other funds held by the Trustee under the Indenture and not from any other fund or
source of the Issuer.

THE SERIES 2017 BONDS WILL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OR
OF ANY POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY THEREOF. NEITHER THE STATE NOR THE
ISSUER WILL BE OBLIGATED TO PAY THE PRINCIPAL OF THE SERIES 2017 BONDS, OR THE INTEREST THEREON,
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EXCEPT FROM THE FUNDS PROVIDED UNDER THE INDENTURE AND THE LOAN AGREEMENT, THE SERIES 2017
NOTES, AND THE INDENTURE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OR OF
ANY POLITICAL SUBDIVISION, AGENCY, OR INSTRUMENTALITY THEREOF IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF OR INTEREST ON THE SERIES 2017 BONDS. THE ISSUER HAS NO TAXING POWER.

Repayment of Loan

The Borrower must pay (or cause the Manager to pay) all Project Revenues from the Project to the Trustee
for deposit in the Revenue Fund and application in accordance with the Indenture. The Project Revenues are to be
used to pay the Loan Payments and the Additional Payments. The Borrower has granted to the Trustee, for the
benefit of the Persons secured by the lien of the Indenture, a security interest in the Project Revenues, and all money,
securities, and obligations held for the credit of the Revenue Fund, as security for payment of the Loan Payments
and the Additional Payments.

The Project Revenues will be used to pay, as Loan Payments, the following amounts in accordance with
Article V of the Indenture and in the order and priority set forth therein, on or before the 15th day of each month, to
the Trustee (a) for deposit into the respective Interest Accounts in each Bond Fund a sum equal to the Interest
Requirement for each respective series of outstanding Series 2017 Bonds for such month and (b) for deposit into the
respective Principal Accounts in each Bond Fund, a sum equal to the Principal Requirements for each respective
series of outstanding Series 2017 Bonds for such month. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS
– The Indenture – Article V. Deposit of Bond Proceeds; Funds and Accounts; Revenues.”

The monthly installments of Loan Payments described above will in any event be equal in the aggregate to
an amount that, with other funds in the respective Accounts in the Bond Fund then available for payment of the
principal of and interest on the Series 2017 Bonds, will be sufficient to provide for the payment in full of the interest
on, premium, if any, and principal of each series of Series 2017 Bonds as they become due and payable.

Except as otherwise provided in the Indenture, the Project Revenues will also be used to pay, as Loan
Payments, to the Trustee for deposit in the respective Special Redemption Accounts of each Bond Fund, such
amounts as, together with any other money available therefor, are sufficient to pay all amounts, if any, required to
redeem each series of Series 2017 Bonds pursuant to the Indenture as and when they become subject to redemption
pursuant thereto, together with any related redemption premium associated therewith, all such payments to be made
by the Borrower to the Trustee, for deposit into the related Special Redemption Account on or before the date such
money is required by said provisions of the Indenture.

In addition to the Loan Payments, the Project Revenues will be used to pay the following costs and
expenses (to the extent such costs and expenses are not paid from the proceeds of the sale of the Series 2017 Bonds),
in accordance with Article V of the Indenture, which are the Additional Payments: any amounts required under the
Indenture to be deposited in the Debt Service Reserve Fund in order to satisfy the Debt Service Reserve
Requirement or to restore the difference between the amount on deposit in the Debt Service Reserve Fund and the
Debt Service Reserve Requirement; amounts sufficient to maintain balances in the Insurance and Tax Escrow Fund
(excluding the Property Tax Account), the Operating Fund, the Repair and Replacement Fund, the Administration
Fund, and the Operations and Maintenance Reserve Fund, equal to the amounts required pursuant to the Indenture;
the Issuer’s Fees and Expenses and all amounts advanced by the Issuer that the Borrower is obligated to repay; the
Ordinary Trustee’s Fees and Expenses and the Extraordinary Trustee’s Fees and Expenses, and all amounts
advanced by the Trustee that the Borrower is obligated to repay; the Dissemination Agent Fee; the Rebate Analyst
Fee and any amount required to be paid to the Rebate Fund; the Rating Agency Fee; the Management Fee; and the
fees and expenses of any Servicer engaged pursuant to the Loan Agreement. See APPENDIX B – “FORMS OF THE
PRINCIPAL DOCUMENTS – The Loan Agreement – Section 3.2(b). Deposit of Project Revenues; Loan Payments; and
Additional Payments.”

In the event the Borrower fails to pay, or fails to cause to be paid, any Loan Payments or Additional
Payments as required under the Loan Agreement, the payment not paid will continue as an obligation of the
Borrower until the unpaid amount is fully paid.

The Borrower’s obligations to make Loan Payments with respect to the Series 2017 Bonds are limited
obligations of the Borrower, and Owners of the Series 2017 Bonds will have recourse only to the Communities, the
money held in the Funds and Accounts created under the Indenture and the other Bond Documents (as defined in the
Indenture) (except as specifically set forth therein) and the Project Revenues to satisfy the obligations of the
Borrower with respect to the Series 2017 Bonds. Other than such amounts, the properties subject to the lien and

19
security interest granted under the Mortgage and the security interests granted under the Loan Agreement, no other
revenues or assets of the Borrower will be available for the payment of, or as security for, the Series 2017 Bonds.

Pursuant to the Indenture, the Issuer will pledge and assign all its rights and interests (except certain
reimbursement and indemnification rights of the Issuer and its rights to perform discretionary acts) and all amounts
payable (other than certain fees and expenses due to the Issuer) under the Loan Agreement and the Series 2017
Notes to the Trustee, in trust, to be held and applied pursuant to the provisions of the Indenture, for the benefit of the
Owners, in the order of priority described herein.

The Mortgages

To secure the payment of the Loan Payments payable under the Loan Agreement and the Series 2017
Notes, the Borrower will grant under the Mortgages to the Mortgage trustee for benefit of the Trustee, a first priority
lien on and a security interest in the Communities and other property and payments, including an assignment of rents
and leases, as described in the Mortgages, subject only to certain Permitted Encumbrances identified therein. The
“Mortgaged Properties” include generally all the land, buildings, fixtures, furnishings and equipment comprising
the Communities, including the sites on which the Communities are located.

Upon the occurrence and continuation of any Senior Bonds Event of Default (or an Event of Default
relating to the series of Series 2017 Bonds then most senior in priority), the Trustee, upon written request of the
Owners of not less than 25% in outstanding principal amount of the Outstanding Senior Bonds (or the series of
Series 2017 Bonds then most senior in priority) will declare all the Bonds due and payable and commence
foreclosure proceedings against the Mortgaged Property under the Mortgages. Notwithstanding any other
provisions of the Indenture to the contrary, any proceeds received by the Trustee from the foreclosure of the lien on
the Mortgaged Property will be applied to the payment of the principal and interest then due and unpaid upon the
Series 2017 Bonds of all series then Outstanding, without preference or priority of principal over interest or interest
over principal, or of any installment of interest over any other installment of interest, or of any Bond of any series
over any other Bond of any series, ratably, according to the amounts due respectively for principal and interest, to
the persons entitled thereto without any discrimination or privilege. See APPENDIX B – “FORMS OF THE PRINCIPAL
DOCUMENTS – The Indenture – Section 8.07. Application of Proceeds from Foreclosure of Mortgages.”

The Loan Agreement requires the Borrower, at its own expense, to keep the buildings and all other
improvements forming a part of the Communities in good repair and in good working order, making all necessary
and proper repairs thereto and renewals and replacements thereof. The Loan Agreement also specifies certain
conditions under which the Borrower may release parts of the Mortgaged Properties or subordinate the lien of the
Mortgages. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement – Section 6.18.
Release of Certain Land and Subordination; Granting of Easements.” Further, (i) any net proceeds of insurance or
condemnation awards not used for the restoration of the Communities and (ii) any money received in connection
with the release of any portion of the Mortgaged Properties or the subordination of the lien of the Mortgages
pursuant to the provisions of the Loan Agreement will be used for the payment of the Series 2017 Bonds. See
APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement – Article V. Insurance; Damage,
Destruction and Condemnation; Use of Net Proceeds.”

In addition to the foregoing, under the Loan Agreement the Borrower may sell any separate facility
constituting a part of the Communities, but only if:

(a) such sale is for at least fair market value, as established by an MAI appraisal submitted to
the Trustee;

(b) the Debt Service Coverage Ratio is at least equal to the required Coverage Test for the
last Fiscal Year for which Audited Financial Statements are available, after giving effect to such sale, as
demonstrated by a Certificate of the Borrower delivered to the Trustee; and

(c) the Net Proceeds of such sale are deposited into the respective Special Redemption
Accounts of the Bond Funds to be used to redeem Series 2017 Bonds in accordance with the Indenture.

Fidelity National Title Insurance Company will issue two lender’s title insurance policies for the two
parcels of land upon which the Communities are located (collectively, the “Land”), in favor of the Trustee. The
policies insure against loss from any defects in the Borrower’s title to the Land and the lien of the Mortgages, or
encumbrances (other than utility easements) on the Land, in the aggregate amount equal to the original principal
amount of the Series 2017 Bonds, subject to the conditions, exclusions and exceptions described in the policies.
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Operation of the Communities

Payments to be made by the Borrower pursuant to the Loan Agreement will be derived solely from
revenues generated by the operation of the Communities. NO REPRESENTATIONS OR ASSURANCES CAN
BE MADE THAT REVENUES WILL BE REALIZED BY THE BORROWER IN AMOUNTS NECESSARY TO
ENABLE THE BORROWER TO MAKE PAYMENTS PURSUANT TO THE LOAN AGREEMENT
SUFFICIENT TO PAY THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE SERIES
2017 BONDS.

WHILE THE INDENTURE CREATES A SECURITY INTEREST IN THE FUNDS HELD UNDER THE
INDENTURE (OTHER THAN THE REBATE FUND ESTABLISHED THEREUNDER), AND THE LOAN
AGREEMENT CREATES A SECURITY INTEREST IN THE PROJECT REVENUES, THE REVENUES OF
THE COMMUNITIES ARE NOT SUBJECT TO ANY LOCKBOX OR OTHER ESCROW ARRANGEMENTS,
EXCEPT THAT ALL PROJECT REVENUES ARE REQUIRED TO BE DEPOSITED WITH THE TRUSTEE,
AND THE LOAN AGREEMENT AND THE MORTGAGES OTHERWISE PLACE NO RESTRICTIONS UPON
THE EXPENDITURE OF SUCH REVENUES BY THE BORROWER.

Affordability Covenant

The Borrower has covenanted and agreed in the Loan Agreement that, beginning on January 1, 2019, no
less than 20% of the total number of units of the Communities will at all times be rented to and occupied by Low
Income Tenants (as defined below). For the purposes of this paragraph, a vacant unit that was most recently
occupied by a Low Income Tenant is treated as rented and occupied by a Low Income Tenant until reoccupied, at
which time the character of such unit is redetermined.

No tenant qualifying as a Low Income Tenant may be denied continued occupancy of a unit in the
Communities because, after commencement of occupancy, such tenant’s Adjusted Income (as defined below)
increases to exceed the qualifying limit for Low Income Tenants; however, should a Low Income Tenant’s Adjusted
Income, as of the most recent determination thereof, exceed 140% of the then applicable income limit for a Low
Income Tenant of the same family size and such Low Income Tenant constitutes a portion of the 20% requirement
of the paragraph above, the next available unit of comparable or smaller size will be rented to (or held vacant and
available for immediate occupancy by) a Low Income Tenant and such new Low Income Tenant will then constitute
a portion of the 20% requirement of the paragraph above; and, further, until such next available unit is rented to a
tenant who is a Low Income Tenant, the former Low Income Tenant who has ceased to qualify as such will be
deemed to continue to be a Low Income Tenant for purposes of the 20% requirement of the paragraph above.

The Borrower will obtain, complete, and maintain on file such applications, certifications or other
information obtained from residents as are necessary for the Borrower to make the certifications to the Trustee in the
following paragraph.

The Borrower will prepare and submit to the Trustee annually on each January 1 (commencing January 1,
2019), a Compliance Monitoring Report covering the previous 12 calendar months or, in the case of the initial
certificate, as of January 1, 2019, in substantially the form required by the Loan Agreement executed by the
Borrower.

“Adjusted Income” means the adjusted income of a person (together with the adjusted income of all
persons who intend to reside with such person in one residential unit) calculated pursuant to section 142(d) of the
Code, after payment of rent.

“Low Income Tenant” means a tenant whose Adjusted Income (after payment of rent) is 50% or less of
median gross income, as determined under section 142(d)(2)(B) of the Code, for the area in which the Community is
located.

Rate Covenant

The Borrower has agreed in the Loan Agreement to fix, charge and collect, or cause to be fixed, charged
and collected, rents, fees and charges in connection with the operation and maintenance of the Communities, such
that for each Fiscal Year beginning with the Fiscal Year ending December 31, 2018, the Debt Service Coverage
Ratio will not be less than the Coverage Test, which is 1.05 to 1.00 on all Outstanding Bonds and other Long-Term
Indebtedness, determined as of the end of each such Fiscal Year based on Audited Financial Statements. In the
event that the Borrower should fail to meet such rate covenant, the Borrower is required to retain a Management

21
Consultant to make recommendations with respect to the operations of the Communities and the sufficiency of the
rates, fees and charges imposed by the Borrower to enable the Borrower to improve the Debt Service Coverage
Ratio to at least the Coverage Test. Failure by the Borrower to retain a Management Consultant or, to the extent
possible and consistent with its charitable mission and in compliance with the covenant described above under “–
Affordability Covenant,” to implement the reasonable recommendations of that Management Consultant in any
calendar year in which the Debt Service Coverage Ratio is not met will constitute a Default as set forth in the Loan
Agreement. In addition, a failure of the Borrower to maintain a Debt Service Coverage Ratio of 1.00 to 1.00 for any
Fiscal Year is a Default under the Loan Agreement. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –
The Loan Agreement – Section 4.4. Rate Covenant; Coverage” and “– Section 4.5. Failure to Meet Rate Covenant;
Retention of Management Consultant.”

Liquidity Covenant

The Loan Agreement requires that the Borrower calculate its Days’ Cash on Hand as of June 30 and
December 31 of each Fiscal Year, commencing with June 30, 2018 (each such date being a “Testing Date”). The
Borrower agrees in the Loan Agreement to conduct its business so that on each Testing Date the Borrower will have
no less than 30 Days’ Cash on Hand (the “Liquidity Requirement”). If the amount of Days’ Cash on Hand as of any
Testing Date is less than the Liquidity Requirement, the Borrower is required to select a Management Consultant to
make recommendations with respect to the operations of the Communities and the sufficiency of the rates, fees and
charges imposed by the Borrower. The Borrower is required to follow the recommendations of the Management
Consultant to the extent lawful and feasible and consistent with the charitable mission of the Borrower and in
compliance with the covenant described above under “– Affordability Covenant.” See “– Approval of Management
Consultants” below.

Failure of the Borrower to satisfy the Liquidity Requirement will not constitute an Event of Default under
the Loan Agreement unless (a) the Borrower fails to engage a Management Consultant or (b) the Borrower fails to
implement its reasonable recommendations, to the extent possible and consistent with the charitable mission of the
Borrower and in compliance with the covenant described above under “– Affordability Covenant,” as required by
the Loan Agreement. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Loan Agreement – Section
4.14. Liquidity Covenant.”

Approval of Management Consultants

Upon selecting a Management Consultant as required under the provisions of the Loan Agreement, the
Borrower will notify the Trustee of such selection. The Trustee will, as soon as practicable but in no case longer
than five Business Days after receipt of such notice, notify the Owners of all Bonds Outstanding under the Indenture
of such selection. Such notice must, among other requirements, state that an Owner will be deemed to have
consented to the selection of the Management Consultant unless such Owner submits an objection within 15 days of
the date that the notice is sent to the Owners. If the Owners of 66.6% or more in aggregate principal amount of the
Outstanding Bonds have been deemed to have consented to the selection of the Management Consultant or have not
responded to the request for consent by the end of the 15-day objection period, the Borrower will engage the
Management Consultant within three Business Days of receipt of the Trustee’s notice. If the Owners of more than
33.4% in aggregate Outstanding principal amount of the Bonds have objected to the Management Consultant
selected, the Borrower will select another Management Consultant in compliance with the procedures of the Loan
Agreement. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Loan Agreement – Section 4.15.
Approval of Management Consultants.”

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Flow of Project Revenues

A Revenue Fund will be established under the Indenture. On a monthly basis, certain moneys will be
deposited in the Revenue Fund, including all Loan Payments under the Loan Agreement and all Project Revenues,
as further described under “– Revenue Fund” below.

______________________
(1) The payment of any Deferred Management Fee, and any interest due thereon, will occur on the earlier of the date on which the Coverage
Test and Liquidity Requirement are met as of any Testing Date or five years after the original due date of such fee.

Revenue Fund

A Revenue Fund will be established under the Indenture. There are required to be deposited in the
Revenue Fund (i) all Loan Payments and other amounts paid to the Trustee under the Loan Agreement (other than
prepayments required to redeem Series 2017 Bonds pursuant to the Indenture, which will be deposited in the related
Special Redemption Account), (ii) all other amounts required to be so deposited pursuant to the Indenture, including
investment earnings to the extent provided in the Indenture, (iii) any amounts derived from the Loan Agreement or
the Mortgages to be applied to payment of amounts intended to be paid from the Revenue Fund, (iv) all Project
Revenues, (v) any amounts transferred from the Property Tax Account of the Insurance and Tax Escrow Fund, and
(vi) such other money delivered to the Trustee by or on behalf of the Issuer or the Borrower with directions for
deposit of such money in the Revenue Fund.

Money on deposit in the Revenue Fund will be disbursed on the 15th day of each month in the following
order of priority:

(1) To the Interest Account in the Senior Bonds Bond Fund, an amount equal to the
applicable Interest Requirement for the Senior Bonds for such calendar month, together with an amount
equal to any unfunded Interest Requirement for the Senior Bonds from any prior month;

(2) To the Principal Account in the Senior Bonds Bond Fund, an amount equal to the
applicable Principal Requirement for the Senior Bonds for such calendar month, together with an amount
equal to any unfunded Principal Requirement for the Senior Bonds from any prior month;

(3) To the Interest Account in the Second Tier Bonds Bond Fund, an amount equal to the
applicable Interest Requirement for the Second Tier Bonds for such calendar month, together with an
amount equal to any unfunded Interest Requirement for the Second Tier Bonds from any prior month;

23
 (4) To the Principal Account in the Second Tier Bonds Bond Fund, an amount equal to the
applicable Principal Requirement for the Second Tier Bonds for such calendar month, together with an
amount equal to any unfunded Principal Requirement for the Second Tier Bonds from any prior month;

(5) To the Second Tier Bonds Debt Service Reserve Fund, the amount, if any, required to be
paid into the Second Tier Bonds Debt Service Reserve Fund pursuant to the Loan Agreement to restore the
amount on deposit therein to the Second Tier Bonds Debt Service Reserve Fund Requirement; provided
that if any deficiency in the Second Tier Bonds Debt Service Reserve Fund is the result of a redemption of
the Second Tier Bonds pursuant to the Indenture with amounts on deposit in the Second Tier Bonds Debt
Service Reserve Fund, then the amount to be transferred from the Revenue Fund to the Second Tier Bonds
Debt Service Reserve Fund in any month will be limited to 1/24 of the amount withdrawn from the Second
Tier Bonds Debt Service Reserve Fund and used for such redemption;

(6) Subject to the provisions under the heading “– Insurance and Tax Escrow Fund” below,
for transfer to the Insurance and Tax Escrow Fund, and, with respect to the annual real estate taxes, the
Property Tax Account therein, an amount equal to one-twelfth of the amount budgeted by the Borrower for
the current year for annual premiums for insurance required to be maintained pursuant to the Loan
Agreement and for annual real estate taxes, or other Impositions or charges for governmental services for
the current year, as provided in the Budget;

(7) To the Operating Fund, an amount equal to the Budgeted Operating Requirement (less
any amounts then on deposit in the Operating Fund and any amounts to be paid to the Manager pursuant to
clauses (12) and (13) below), together with such additional Operating Expenses (except any Interest
Requirement) requested in writing by a Borrower Representative from the Operations and Maintenance
Reserve Fund or the Surplus Fund pursuant to and after satisfaction of the conditions specified in the Loan
Agreement;

(8) Subject to the provisions under the heading “– Repair and Replacement Fund” below, for
transfer to the Repair and Replacement Fund, commencing with the month of January 2018, an amount
equal to one-twelfth of the Replacement Reserve Amount;

(9) Subject to the provisions under the heading “– Administration Fund” below, for transfer
to the Administration Fund, an amount equal to one-sixth of the Administration Expenses (other than the
Rebate Analyst Fee) scheduled to be due and payable on or before the next succeeding Interest Payment
Date;

(10) To the Administration Fund, the amount of any Rebate Analyst Fee then due;

(11) To the Rebate Fund, to the extent of any deposit required to be made thereto pursuant to
the Loan Agreement;

(12) To the Manager any Deferred Management Fee, including any interest due thereon, in the
order that such amounts were deferred;

(13) To the Manager, the Management Fee other than any Deferred Management Fee and paid
monthly in accordance with the Budget; and

(14) To the Surplus Fund, all remaining amounts.

In the event that, for any month, there are insufficient funds in the Revenue Fund to fund any one or more
of the uses set forth in clauses (1) through (13) above, the amount not funded in such month due to such
insufficiency of revenues will be added to the amount to be funded in subsequent months under the same clause until
such amount has been in fact funded. Failure to deposit sufficient Project Revenues to make the deposits described
above does not, in itself, constitute an Event of Default under the Indenture. See APPENDIX B – “FORMS OF THE
PRINCIPAL DOCUMENTS –The Indenture – Section 5.04. Revenue Fund.”

Payments pursuant to clause (12) above will not be made unless and until (i) a quarterly report as required
under the Loan Agreement is delivered to the Trustee showing that the Coverage Test and the Liquidity
Requirement have been met and (ii) a Borrower Representative has provided a certificate to the Trustee to the effect
that no Event of Default under the Indenture or event of default, as defined therein, under any Borrower Document
has then occurred and is continuing. Notwithstanding the foregoing sentence, any Deferred Management Fee, and

24
any interest due thereon, must be paid no later than the end of five years from the original due date of such fee
regardless of satisfaction of the Coverage Test or the Liquidity Requirement (which amounts are to be listed in the
Budget delivered to the Trustee and paid in accordance with the clauses set forth above), unless there is a Favorable
Opinion of Bond Counsel delivered regarding the failure to pay such Deferred Management Fee and the interest due
thereon at such time. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.04.
Revenue Fund.”

Debt Service Reserve Fund

The Senior Bonds will not be secured by a debt service reserve fund. A Debt Service Reserve Fund for the
Second Tier Bonds will be established under the Indenture. Amounts on deposit in the Debt Service Reserve Fund
will be used solely to pay the principal of and interest on the Second Tier Bonds when due to the extent money on
deposit in the related Principal Account or Interest Account are insufficient therefor after the transfer of any amounts
from the Surplus Fund, the Operations and Maintenance Reserve Fund and the Repair and Replacement Fund
pursuant to the Indenture. In addition, in the event that a failure to pay principal or redemption price of or interest
on Second Tier Bonds from the applicable Trust Estate occurs and is continuing, the Owners of a majority in
outstanding principal amount of Second Tier Bonds may direct the Trustee in writing to use amounts on deposit in
the Debt Service Reserve Fund to redeem Second Tier Bonds in accordance with the Indenture. See “THE SERIES
2017 BONDS – Mandatory Redemption from Debt Service Reserve Funds.”

If the amount on deposit in the Debt Service Reserve Fund for the Second Tier Bonds is less than the Debt
Service Reserve Requirement, the Borrower is required to pay the Trustee the amount of such deficiency to the
extent of available Project Revenues, such amount to be transferred from the Revenue Fund to the Debt Service
Reserve Fund as described in “– Revenue Fund” above; provided that if any deficiency in the Debt Service Reserve
Fund is the result of a redemption of the Second Tier Bonds as described above with amounts on deposit in the Debt
Service Reserve Fund, then the amount to be transferred from the Revenue Fund to the Debt Service Reserve Fund
in any month will be limited to 1/24 of the amount withdrawn from the Debt Service Reserve Fund and used for
such redemption. In addition, if the amount on deposit in the Debt Service Reserve Fund is less than the Debt
Service Reserve Requirement, investment earnings thereon will remain in the Debt Service Reserve Fund. See
APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.04. Revenue Fund.”

Operating Fund

The Trustee will deposit in the Operating Fund (i) money transferred from the Revenue Fund pursuant to
the Indenture, (ii) any transfers from the Operating Account received by the Trustee for deposit in the Operating
Fund and (iii) any other amounts required to be deposited into the Operating Fund under the Indenture, the Loan
Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein. Amounts on
deposit in the Operating Fund will be transferred by the Trustee to the Operating Account established by the
Borrower in accordance with the Loan Agreement and will be used by the Borrower to pay Operating Expenses of
the Communities. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.14.
Operating Fund.”

If an Event of Default under the Indenture has occurred and is continuing, the Borrower will not be entitled
to funds on deposit in the Operating Fund, and the Trustee may determine to pay Operating Expenses of the
Communities directly, without receipt of direction from the Borrower Representative, and in such event is to rely on
the annual Budget prepared by the Borrower in connection with the Communities.

Operations and Maintenance Reserve Fund

Amounts on deposit in the Operations and Maintenance Reserve Fund will be used to pay (i) maintenance
and repair costs of the Communities which are not capital expenditures payable from the Repair and Replacement
Fund, (ii) Operating Expenses in excess of Budgeted Operating Requirements, (iii) certain costs of repairs and
replacement as set forth in the Indenture and (iv) shortfalls in the Interest Accounts and Principal Accounts of the
Bond Funds in accordance with the Indenture. Except when transfers from the Operating Fund to the Operating
Account are not permitted under the Indenture, the Trustee will disburse money in the Operations and Maintenance
Reserve Fund to the Operating Account to pay such maintenance and repair costs and Operating Expenses upon
receipt of a written direction of a Borrower Representative which states the purpose for such disbursement and the
persons to which such amounts are to be paid, and when transfers from the Operating Fund to the Operating
Account are not permitted pursuant to the Indenture, the Trustee may disburse such money directly to pay such costs
and expenses. All interest income derived from the investment of amounts on deposit in the Operations and
Maintenance Reserve Fund will be retained in the Operations and Maintenance Reserve Fund until the amount on
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deposit therein is equal to the Operations and Maintenance Reserve Requirement, and thereafter deposited into the
Revenue Fund. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section 5.15.
Operations and Maintenance Reserve Fund.”

Insurance and Tax Escrow Fund

The Trustee will deposit in the Insurance and Tax Escrow Fund (i) money transferred from the Revenue
Fund in the amounts and on the dates described in the Indenture, and (ii) any other amounts required to be deposited
into the Insurance and Tax Escrow Fund pursuant to the Indenture, the Loan Agreement or the Mortgages and
delivered to the Trustee with instructions to deposit the same therein. Money on deposit in the Insurance and Tax
Escrow Fund will be disbursed by the Trustee to the Borrower to pay, or as reimbursement for the payment of,
Impositions, taxes, assessments and insurance premiums with respect to the Communities, as provided in the
Indenture; provided that amounts on deposit in the Property Tax Account will be used to pay any property taxes due
in respect of the Communities for the 2017 tax year or, if the Communities receive a full or partial exemption from
property taxation, transferred to the Revenue Fund to the extent of such exemption. See APPENDIX B – “FORMS OF
THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.16. Insurance and Tax Escrow Fund.”

Repair and Replacement Fund

A Repair and Replacement Fund will be established under the Indenture. The Repair and Replacement
Fund will be funded from monthly deposits from the Revenue Fund so that the amount on deposit equals the
Replacement Reserve Amount as described in the Indenture. The Replacement Reserve Amount is initially an
amount equal to $23,650, and may be increased or decreased pursuant to the Loan Agreement. The Trustee will
disburse money on deposit in the Repair and Replacement Fund, upon request of a Borrower Representative, no
more than once a month to pay to or to reimburse the Borrower for paying the cost of replacements or items of
extraordinary maintenance or repair which may be required to keep the Communities in sound condition, including
but not limited to, replacement of appliances, major floor covering replacement, replacement or repair of any roof or
other structural component of the Communities, maintenance (including painting) to exterior surfaces and major
repairs to or replacements of heating, air conditioning, plumbing and electrical systems, landscaping, storm water
drainage, repairs to common area amenities and any other extraordinary costs required for the repair or replacement
of the Communities not properly payable from the Revenue Fund or the Operations and Maintenance Reserve Fund
but in any case only if there are no funds available in the Project Fund for such purpose. The Repair and
Replacement Fund will also be used to remedy any deficiency in any Bond Fund on any Interest Payment Date after
exhaustion of the Surplus Fund and the Operations and Maintenance Reserve Fund, without any prior consents, as
provided in the Indenture. See APPENDIX A – “THE COMMUNITIES – Physical Needs Assessments” and APPENDIX
B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.17. Repair and Replacement Fund.”

Administration Fund

An Administration Fund will be established and funded pursuant to the Indenture, from which the Trustee
will disburse Administration Expenses then due. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The
Indenture – Section 5.18. Administration Fund.”

Surplus Fund

The Trustee will deposit into the Surplus Fund all remaining monthly Project Revenues as provided in the
Indenture and all other amounts delivered to it with instructions to deposit the same in the Surplus Fund. Money in
the Surplus Fund will be applied each month, when needed, for the following purposes and in the following manner
and priority: (i) transferred to the Interest Account for the Senior Bonds to pay interest on the Senior Bonds to the
extent amounts on deposit in such Interest Account are insufficient therefor, (ii) transferred to the Principal Account
for the Senior Bonds to pay principal on the Senior Bonds to the extent amounts on deposit in such Principal
Account are insufficient therefor, (iii) transferred to the Interest Account for the Second Tier Bonds to pay interest
on the Second Tier Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor,
(iv) transferred to the Principal Account for the Second Tier Bonds to pay principal on the Second Tier Bonds to the
extent amounts on deposit in such Principal Account are insufficient therefor, (v) transferred to the Revenue Fund to
the extent of any deficiency in the amounts needed to fully make all transfers from the Revenue Fund pursuant to the
Indenture (other than to the Surplus Fund), (vi) transferred to the Borrower upon the direction of a Borrower
Representative for deposit into the Operating Account for the payment of Operating Expenses when a Borrower
Representative certifies to the Trustee, on behalf of the Borrower, that there is not sufficient money in the Operating
Fund or Operating Account to pay Operating Expenses, (vii) paid to the Trustee an amount equal to any unpaid
Extraordinary Trustee’s Fees and Expenses then due, (viii) transferred to the Borrower or upon the direction of a
26
Borrower Representative, on behalf of the Borrower, to pay taxes, assessments and premiums as set forth in the
Indenture, (ix) transferred to the Operations and Maintenance Reserve Fund an amount sufficient to restore such
Fund to the Operations and Maintenance Reserve Requirement, and (x) transferred to the Manager, any Deferred
Management Fee then owing and any interest due thereon; provided, however, such payments described under
clause (x) will not be made unless and until the Borrower delivers to the Trustee a quarterly report under the Loan
Agreement showing that the Coverage Test and Liquidity Requirement have been met or are above the required
testing levels and a certificate to the effect that no event of default under the Indenture or any Borrower Document
has occurred and is continuing. Notwithstanding the foregoing requirements with respect to payments described in
clause (x) above, any Deferred Management Fee, and any interest due thereon, must be paid no later than the end of
five years from the original due date of such fee regardless of satisfaction of the Coverage Test or the Liquidity
Requirement (which amount must be listed in the Budget delivered to the Trustee and paid in accordance with the
foregoing clauses), unless there is a Favorable Opinion of Bond Counsel delivered regarding the failure to pay such
Deferred Management Fee and the interest due thereon at such time.

When, on or after any Annual Evaluation Date, the Trustee receives a certificate signed by a Borrower
Representative stating (i) that an Excess Surplus Fund Amount was on deposit in the Surplus Fund as of such
Annual Evaluation Date, (ii) the amount, if any, of such Excess Surplus Fund Amount on deposit in the Surplus
Fund as of such Annual Evaluation Date and as of the date of such certificate, (iii) the Borrower has satisfied the
Coverage Test (as shown in a report by a Certified Public Accountant delivered by the Borrower to the Trustee) for
the twelve-month period ending on such Annual Evaluation Date, upon which the Trustee may rely, and (iv) no
Event of Default, or event which with the passage of time or the giving of notice or both would constitute an Event
of Default, has occurred and is continuing, then (A) to the extent that the Repair and Replacement Fund has less than
$250,000 on deposit therein on such Annual Evaluation Date, the Trustee will transfer 25% of such Excess Surplus
Fund Amount to the Repair and Replacement Fund and (B) any Excess Surplus Fund Amount remaining after the
transfer, if any, to the Repair and Replacement Fund will be transferred to the Borrower in accordance with the
Indenture. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Section 5.19(b). Surplus
Fund.”

“Annual Evaluation Date” means each December 31, commencing December 31, 2019.

“Cash and Investments” means the sum of cash, cash equivalents, and marketable securities of the
Borrower, including without limitation board-designated assets and amounts, if any, on deposit in the Operating
Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the Operating Account and
the Surplus Fund, but excluding (a) all funds held in a Debt Service Reserve Fund, (b) proceeds of Short-Term
Indebtedness, (c) donor-restricted funds and (d) any funds pledged or otherwise subject to a security interest for debt
other than the Bonds, as shown on the most recent Audited Financial Statements or unaudited financial statements of
the Borrower. For the purposes of calculations hereunder, an Unrestricted Contribution from an Affiliate will be
treated as being made during the period of such calculation so long as the Unrestricted Contribution is made prior to
the date the applicable certificate is required to be delivered with respect to such calculation.

“Excess Surplus Fund Amount” means the amount on deposit in the Surplus Fund on an Annual
Evaluation Date equal to the positive difference, if any, obtained by subtracting (x) the amount equal to 50 Days’
Cash on Hand as of such Annual Evaluation Date, from (y) the amount of Cash and Investments on such Annual
Evaluation Date; provided that on the date of any transfer or disbursement of the Excess Surplus Fund Amount from
the Surplus Fund, such amount may not exceed the amount on deposit in the Surplus Fund on the date of such
transfer or disbursement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Surplus Fund.”

See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS –The Indenture – Section 5.19. Surplus
Fund.”

Rating Application

The Borrower covenants in the Loan Agreement that it will seek a rating of any series of Series 2017 Bonds
that is then-unrated each year after a determination is made by the Borrower in consultation with the Underwriter
that an investment grade rating for such series of Series 2017 Bonds is reasonably obtainable, until achievement of
an investment grade rating. If the Borrower receives a preliminary indication from such Rating Agency that such
series of Series 2017 Bonds will not be assigned an investment grade rating, the Borrower will withdraw its request
to have such Rating Agency assign a rating to such series of Series 2017 Bonds.

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Other Covenants of the Borrower

Under the Loan Agreement and the Mortgages, the Borrower is required to comply with certain other
covenants and agreements. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – THE LOAN AGREEMENT”
and “– THE MORTGAGES.”

Relationship Among Series

Amounts on deposit in the accounts of the Bond Fund for a series of Series 2017 Bonds will be used solely
to pay principal and interest on that series of Series 2017 Bonds, on the applicable payment dates. Amounts on
deposit in the Debt Service Reserve Fund are available to pay the principal of and interest only on the Second Tier
Bonds when due to the extent money on deposit in the related Principal Account or Interest Account are insufficient
therefor after the transfer of any amounts from the Surplus Fund, the Operations and Maintenance Reserve Fund and
the Repair and Replacement Fund pursuant to the Indenture.

Failure to make payment of the principal or redemption price of any Senior Bond from the Senior Bonds
Trust Estate after the same becomes due, whether at maturity or upon call for redemption or otherwise, and failure to
make payment of interest on any Senior Bond from the Senior Bonds Trust Estate when due, among other things,
each constitutes a Senior Bonds Event of Default. In addition to other remedies that may be available, if a Senior
Bonds Event of Default has occurred and is continuing, the Trustee, upon written request of the Owners of not less
than 25% in outstanding principal amount of the Senior Bonds, will declare all Bonds of all series due and payable
and commence foreclosure proceedings under the Mortgages.

Failure to apply Residual Revenues to the payment of the principal or redemption price of, or interest on,
the Second Tier Bonds to the extent such Residual Revenues are available, among other things, constitutes a Second
Tier Bonds Event of Default. In addition to other remedies that may be available, if a Second Tier Bonds Event of
Default has occurred and is continuing and no Senior Bonds are then Outstanding, then the Trustee, upon written
request of the Owners of not less than 25% in outstanding principal amount of the Second Tier Bonds, will declare
all Series 2017 Bonds of all series due and payable and commence foreclosure proceedings under the Mortgages.

In addition, in the event that a failure to pay principal or redemption price of or interest on the Second Tier
Bonds from the applicable Trust Estate occurs and is continuing, the Owners of a majority in outstanding principal
amount of Second Tier Bonds may direct the Trustee in writing to use amounts on deposit in the Debt Service
Reserve Fund to redeem Second Tier Bonds in accordance with the Indenture.

“Residual Revenues” means (a) so long as the Senior Bonds remain Outstanding, such Project Revenues
which remain after the required deposit has been made to the Senior Bonds Bond Fund as set forth in in the
Indenture; and (b) on and after the date the Senior Bonds are no longer Outstanding, all such Project Revenues
which would have been available for the payment of the principal of and interest on the Senior Bonds.

See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Mandatory Redemption from
Debt Service Reserve Funds” herein and APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture –
Article VIII. Defaults and Remedies.”

Subordination of Second Tier Bonds

Notwithstanding anything in the Indenture or the Loan Agreement to the contrary, so long as any Senior
Bonds remain Outstanding, it is not a Senior Bonds Event of Default for either (a) failure by the Issuer to make due
and punctual payment of any interest on the Second Tier Bond or (b) failure by the Issuer to make due and punctual
payment of any principal of the Second Tier Bond (whether at maturity or call for redemption or otherwise).

The security for and payment of the principal of, premium, if any, and interest on the Second Tier Bonds is
subordinated to the security for and payment of the principal of, premium, if any, and interest on the Senior Bonds
as well as to deposits to various reserve funds. Principal of and interest on the Second Tier Bonds is payable as
described in clauses (3) and (4) under “– Revenue Fund” above from moneys on deposit in the Revenue Fund.

Issuance of Additional Bonds

So long as no Event of Default under the Indenture has occurred and is continuing, the Issuer at the request
of a Borrower Representative, upon compliance with the terms of the Indenture, may issue Additional Bonds (i) for
the purpose of refinancing all or a portion of any series of Bonds, or (ii) for any other lawful purpose so long as such
series of Additional Bonds is subordinate to all other series of Bonds then Outstanding. As a condition for the
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issuance of Additional Bonds, (a) the Trustee must receive written evidence from each Rating Agency then rating
any of the Series 2017 Bonds then Outstanding that the issuance of such Additional Bonds will not result in a
reduction on such rating, and (b) the Borrower must demonstrate that the issuance of such Additional Bonds will
comply with the provisions in the Loan Agreement related to the issuance of additional indebtedness. See
APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – Loan Agreement – Section 6.13. Other Indebtedness”
and “– The Indenture – Section 2.13. Additional Bonds.” and “– Section 2.14. Delivery of Additional Bonds.”

CERTAIN BONDHOLDERS’ RISKS

General Risk Factors

The Series 2017 Bonds are special and limited obligations of the Issuer, payable solely from and secured
exclusively by the funds pledged thereto, including the payments to be made by the Borrower under the Indenture.

A BONDHOLDER IS ADVISED TO READ THIS ENTIRE OFFICIAL STATEMENT, INCLUDING THE APPENDICES
HERETO, AND SPECIAL REFERENCE IS MADE TO THE SECTION “SECURITY AND SOURCES OF PAYMENT FOR THE
SERIES 2017 BONDS” AND THIS SECTION FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2017 BONDS.

Certain risks are inherent in the successful development and operation of facilities such as the
Communities. Such risks should be considered in evaluating the Borrower’s ability to generate sufficient revenues
to pay principal of, premium, if any, and interest on the Series 2017 Bonds when due. This section discusses some
of these risks but is not intended to be a comprehensive listing of all risks associated with the acquisition and
operation of the Communities or the payment of the Series 2017 Bonds.

Limited Obligations of the Issuer

The Series 2017 Bonds and the interest and premium, if any, payable thereon do not constitute a debt or
liability of the State or of any political subdivision, agency, or instrumentality thereof other than the Issuer or a
pledge of the faith and credit of the State or any political subdivision, agency, or instrumentality thereof, but shall be
payable solely from the funds pledged therefor in accordance with the Indenture. The issuance of the Series 2017
Bonds under the provisions of the Act does not directly, indirectly or contingently obligate the State or any political
subdivision thereof to levy any form of taxation for the payment thereof or to make any appropriation for their
payment, and such Series 2017 Bonds and the interest and premium, if any, payable thereon do not now and shall
never constitute a debt of the State, within the meaning of the Constitution or the statutes of the State and do not
now and shall never constitute a charge against the credit or taxing power of the State or any political subdivision,
agency, or instrumentality thereof. No breach by the Issuer of any such pledge, mortgage, obligation or agreement
may impose any liability, pecuniary or otherwise, upon the State or any political subdivision, agency, or
instrumentality thereof or any charge upon their general credit or against their taxing power.

Uncertainty of Revenues

The Borrower is a single purpose company. As noted elsewhere, except to the extent that the Series 2017
Bonds will be payable from the proceeds thereof or investment income thereon or, under certain circumstances,
proceeds of insurance, or sale or condemnation awards, the Series 2017 Bonds will be payable solely from payments
or prepayments to be made by the Borrower under the Loan Agreement and pursuant to the Series 2017 Notes. The
ability of the Borrower to make payments under the Loan Agreement and the Series 2017 Notes is dependent upon
the generation and timely collection by the Borrower of revenues in the amounts necessary for the Borrower to pay
the principal, premium, if any, and interest on the Series 2017 Notes, the other currently Outstanding Bonds, any
future Outstanding Bonds under the Indenture, amounts due to any future swap counterparty, as well as other
operating and capital expenses. The realization of future revenues and expenses are subject to, among other things,
the capabilities of management of the Borrower, government regulation and future economic (including but not
limited to availability of credit) and other conditions that are unpredictable and that may affect revenues and
payment of principal of and interest on the Series 2017 Bonds. No representation or assurance can be made that
revenues will be realized by the Borrower in amounts sufficient to make the required payments with respect to debt
service on the Series 2017 Bonds.

Subordinate Nature of the Second Tier Bonds

The Second Tier Bonds are subordinate in security and right of payment to the Senior Bonds. The
obligation of the Borrower to make payments on the Second Tier Bonds is expressly subordinated to the payment of

29
the principal of, premium, if any, and interest on the Senior Bonds pursuant to the terms and conditions of the
Indenture. Upon the occurrence of certain events and in certain circumstances, no payment of the principal,
premium, if any, or interest on the Second Tier Bonds will be permitted, nor will any property or assets be allowed
to be applied to the redemption, purchase or other acquisition or retirement of the Second Tier Bonds. These events
and circumstances include, among others, that at the time of such payment or application, or immediately after
giving effect thereto, there exists or will exist a default in the payment of the Senior Bonds or there has occurred and
is continuing an event of default with respect to the Senior Bonds.

Failure to Achieve or Maintain Occupancy

The economic feasibility of the Communities depends in large part upon the ability of the Borrower to
attract sufficient numbers of new residents to the communities and to achieve and maintain substantial occupancy
throughout the term of the Series 2017 Bonds. This depends to some extent on factors outside management’s
control, such as the Communities residents’ right to terminate their residency agreements (“Residency
Agreements”), subject to the conditions provided in the Residency Agreements. If the Communities fail to maintain
occupancy levels, there may be insufficient funds to pay the debt service on the Series 2017 Bonds.

Licensing Delay

The timeline to transfer (where permitted) or achieve any necessary licensure for operation of the
Community may be longer than expected and could negatively impact occupancy levels of the Community if such
services must be discontinued. See APPENDIX A – “THE COMMUNITY” and “– OTHER FINANCIAL AND REGULATORY
MATTERS – Licensure.”

On November 14, 2017, the Borrower applied to the Oklahoma State Department of Health (“OSDH”) for
new licenses (the “New Licenses”) to operate the Communities. None of the New Licenses have been obtained as
of the date of this Official Statement; however, the Borrower expects OSDH to issue the New Licenses effective as
of the issue date of the Series 2017 Bonds. Any unanticipated delay in obtaining any license or registration could
have a material negative financial impact on the Borrower. Further, any unanticipated delay in obtaining approval
of necessary facility inspections could negatively impact occupancy levels and have a material negative financial
impact on the Borrower. See APPENDIX A – “OTHER FINANCIAL AND REGULATORY MATTERS – Licensure.”

If upon issuance of the Series 2017 Bonds the Borrower has not received its New Licenses, the Borrower
will, if necessary, enter into one or more interim agreements with the Seller and/or a multi-party agreement among
the Borrower, the Manager and the Seller (the “Bridging License Agreements”). The Bridging License Agreements
will allow the memory care units to continue to be operated under the Seller’s current licenses, and to continue to be
serviced under the Seller’s current licenses until the Borrower receives its New Licenses from OSDH. Under the
Bridging License Agreements, if any, if there is any violation by the seller or a license or registration is revoked or
suspended by OSDH or Seller fails to maintain a license or registration for the Communities for any reason, the
Borrower will have no standing with OSDH to cure any such violation or other issue which led to such revocation or
suspension. Moreover, there is no guarantee that OSDH would recognize the validity of the Bridging License
Agreements or any court would enforce such agreements against the Seller, See APPENDIX A – “OTHER FINANCIAL
AND REGULATORY MATTERS – Licensure.”

Competition

The Communities provide services in areas where other competitive facilities exist and may face additional
competition in the future as a result of the construction or renovation of competitive facilities in the primary or
secondary market area of the Borrower. There may also arise in the future competition from other continuing care
facilities, some of which may offer similar facilities, but not necessarily similar services, at lower prices. See “THE
FACILITIES – Market and Competition” in APPENDIX A hereto.

Utilization Demand

Several factors could, if implemented, affect demand for services of the Communities including (i) efforts
by insurers and governmental agencies to reduce utilization of skilled nursing and long term care facilities by such
means as preventive medicine and home health care programs; (ii) advances in scientific and medical technology;
(iii) a decline in the population, a change in the age composition of the population or a decline in the economic
conditions of the service areas of the Communities; (iv) increased or more effective competition from retirement
communities and long term care facilities now or hereafter located in the service area of the Communities; and
(v) national health care reform legislation.
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Malpractice Claims and Losses

The operations of the Communities may be affected by increases in the incidence of malpractice lawsuits
against physicians, elder care facilities and care providers in general and by increases in the dollar amount of client
damage recoveries. These may result in increased insurance premiums and an increased difficulty in obtaining
malpractice insurance. It is not possible at this time to determine either the extent to which malpractice coverage
will continue to be available to the Borrower or the premiums at which such coverage can be obtained.

Nursing Shortage

Recently, the health care industry has experienced a shortage of nursing staff, which has resulted in
increased costs for health care providers due to the need to hire agency nursing personnel at higher rates. If the
nursing shortage continues, it could adversely affect the Borrower’s operations or financial condition.

Overview of Government Regulation of the Health Care Industry

General. The Borrower operates in a highly regulated industry. Both the federal and state governments
have extensive powers to regulate the operation of the facilities. The Borrower may be subject to, among others, the
following: regulatory actions by the governmental agencies that administer the Medicare and Medicaid programs;
changes in the form or amount of payment from governmental and other third party payors; actions by governmental
agencies concerning the licensure and certification of Communities’ operations; and actions by governmental and
other accreditation organizations, and federal, state, and local agencies.

National Health Care Reform. The enactment of the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010 (collectively, “ACA”) represents a significant reform of
federal health care legislation. Additionally, Congress continues to consider the adoption of additional laws to
modify several aspects of such legislation. The ACA is intended to bring about substantial changes to the delivery
of health care services, the financing of health care costs, reimbursement to health care providers, and the legal
obligations of health insurers, providers, and employers. The numerous ACA provisions are slated to take effect at
specified times over approximately the next decade, and, therefore, the full consequences of the ACA on the health
care industry will not be immediately realized. The ramifications of the ACA provisions may become apparent only
as a result of regulatory interpretations promulgated during the implementation of the enacted laws. Portions of the
ACA may also be limited or nullified as a result of legislation, regulation or legal challenges.

A significant component of the ACA is the reformation of the sources and methods by which consumers
will pay for health care for themselves and their families and by which employers will procure health insurance for
their employees and dependents. One of the primary purposes of the ACA is to provide or make available through
subsidized premiums, health care insurance for consumers who are currently uninsured (or underinsured) and who
fall below certain income levels. The ACA proposes to accomplish this through various provisions, summarized as
follows: (i) transparent insurance markets (referred to as exchanges) intended to increase competition among private
health insurers and to allow individuals and small employers to purchase health care insurance for themselves and
their families or their employees and dependents; (ii) subsidies for insurance premium costs to individuals and
families based upon their income relative to federal poverty levels; (iii) individual mandate for consumers to obtain,
and for certain employers to provide, a minimum level of health care insurance, enforced through penalties (i.e.,
taxes) on consumers and employers that do not comply with these mandates; (iv) elimination of lifetime or annual
cost caps and prohibition on private insurers denying coverage or adjusting insurance premiums based on health
status (i.e., pre-existing conditions), gender or other specified factors; (v) substantially increased federal and state-
funded Medicaid insurance program, authorizing states to establish federally subsidized non-Medicaid health plans
for low-income residents not eligible for Medicaid; and (vi) voluntary expansion of Medicaid programs to a broader
population with incomes up to 133% of federal poverty levels.

The ACA provisions relating to skilled nursing facilities (“SNFs”) include requirements that facilities
(i) make certain disclosures regarding ownership; (ii) implement compliance and ethics programs; and (iii) make
certain disclosures regarding expenditures for wages and benefits for direct care staff.

These ACA provisions could have a significant impact on health care providers, including their operations
and revenues, and such impact could be negative. For example, expanded health insurance coverage, in particular,
could affect the composition of the population enrolled in various public and private health plans, potentially
resulting in a capacity strain on provider networks or unanticipated service costs.

31
 Further, under the ACA, payments to providers for the provision of health care services under federally-
funded health insurance programs are reduced. To offset the cost of expanded health care coverage and
implementation of health reform, the ACA includes cuts in Medicare reimbursement and increased taxes. Cost-
cutting provisions will impact health care providers by reducing or eliminating reimbursement for failure to satisfy
certain quality requirements and reduction of Medicare market basket updates. Health care providers are also likely
to be subjected to decreased reimbursement as a result of the Independent Payment Advisory Board, whose directive
is to reduce Medicare cost growth. The Independent Payment Advisory Board’s recommended reductions would be
automatically implemented unless Congress adopts alternative legislation that meets equivalent savings targets.

Due to the voluntary federal legislative expansion of Medicaid in the face of the budgetary pressures at the
state level, payments made to health care providers under Medicaid are subject to further change as a result of
federal or state legislative and administrative actions, including changes to the methods for calculating payments, the
amount of payments that will be made for covered services and the types of services that will be covered under the
program. Also, measures may be taken to increase enrollment in Medicaid recipients in managed care programs
and/or to impose additional taxes on health care facilities to help finance or expand the state’s Medicaid system.

In May 2017, the U.S. House of Representatives adopted legislation to replace the ACA. The legislation
features provisions that would, in material part (i) eliminate the individual and large employer mandates to obtain or
provide health insurance coverage, respectively; (ii) permit insurers to impose a surcharge up to 30 percent on
individuals who go uninsured for more than two months and then purchase coverage; (iii) provide tax credits
towards the purchase of health insurance, with a phase-out of tax credits according to income level; (iv) expand
health savings accounts; (v) impose a per capita cap on federal funding of state Medicaid programs, or, if elected by
a state, transition federal funding to a block grant; and (vi) permit states to seek a waiver of certain federal
requirements that would allow such states to define essential health benefits differently from federal standards and
that would allow certain commercial health plans to take health status, including pre-existing conditions, into
account in setting premiums.

A May 2017 CBO report estimates that repealing certain portions of the ACA (including the individual
mandate), while leaving the insurance exchange market in place, would (1) increase the number of uninsured by 14
million in the first year and 51 million by 2026, and (2) increase insurance premiums by 20-25 percent in the first
year. To the extent the ACA is not repealed, any increased utilization resulting from the law will also increase the
variable and fixed costs of providing health care services, which may or may not be offset by increased revenues.

The legislation proceeded to the U.S. Senate, but the Senate has not passed legislation corresponding to the
House of Representatives bill to date. If the provisions of the proposed legislation are ultimately implemented along
with other proposed amendments to the ACA, there can be no assurance that any such legislation will not materially
adversely affect the Borrower, which material effects may include a potential decrease in the market for health care
services or a decrease in the Borrower’s ability to receive reimbursement for health care services provided.

In addition to legislative changes, ACA implementation and the ACA insurance exchange markets can be
significantly impacted by executive branch actions. On January 20, 2017, President Trump issued an executive
order requiring all federal agencies with authorities and responsibilities under the ACA to “exercise all authority and
discretion available to them to waive, defer, grant exemptions from, or delay” parts of the ACA that place
“unwarranted economic and regulatory burdens” on states, individuals or health care providers.

On October 11, 2017 the President signed an executive order directing the formation of association health
plans that would be exempt from certain ACA requirements such as the essential health benefits mandate. The
executive order also: (i) provides for expanded access to short-term health plans that are limited under the ACA; (ii)
seeks to expand how workers use employer-funded accounts to purchase their own policies; and (iii) calls for an
analysis of ways to limit consolidation within the insurance and health care industries.

Additionally, on October 12, 2017, President Trump announced that cost-sharing reduction payments will
no longer be made to insurers. Cost sharing reduction payments help offset deductibles and other out-of-pocket
expenses for exchange health insurance coverage for approximately seven million individuals earning up to 250
percent of the federal poverty level. The CBO previously reported that if cost sharing reduction payments were to
end, premiums for silver-level plans would increase by 20 percent in 2018. Congress is currently evaluating
proposals intended to continue cost sharing reduction payments, but no such legislation has been passed to date.

The proposed tax reform bill recently adopted by the Senate would repeal the individual mandate to obtain
health insurance imposed under the ACA. The CBO has indicated that the proposed repeal would represent a
reduction of 13 million individuals with health insurance by the end of 2026. While the House of Representatives
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has not yet adopted corresponding legislation, any legislation substantially reducing the number of individuals
having healthcare coverage could negatively impact the Borrower.

These recent actions have the potential to significantly impact the insurance exchange market by reducing
the number of plans available on exchanges and/or increasing insurance premiums. The Borrower cannot predict the
effect of any such actions on its business or financial condition, though such effects could be material. It is unclear
what effect these provisions will have on the Borrower’s finances at this time. Investors are encouraged to review
legislative, legal, and regulatory developments as they occur and to assess the elements and potential effects of the
health care reform initiative as it evolves.

Federal Legislation and Regulations Governing the Communities

The Borrower is subject to regulation by a number of federal, state and local government agencies and
private agencies. The affiliates of the Borrower, may be subject to, among others, the following: regulatory actions
by the governmental agencies that administer Medicare and other government programs; changes in the structure of
payment systems; limitations on payments from governmental and other third party payors; actions by governmental
agencies concerning the licensure and certification of the facilities; or the initiation of audits and investigations
concerning billing practices. All of these factors could potentially have an adverse effect on the results of operations
of the Borrower.

The following description of federal and state laws, regulations and policies affecting the Borrower and its
facilities is not meant to be an all-inclusive discussion of the federal and state laws, regulations and policies that may
affect the level of reimbursement to the Borrower. The Borrower operates in a complex regulatory environment.
Any of the laws or regulations discussed below could adversely affect the revenues generated by operation of the
Borrower.

Third Party Payments and Managed Care

General. In the environment of increasing managed care, the Borrower can expect additional challenges in
maintaining their resident population and attendant revenues. Third party payors, such as health maintenance
organizations, direct their subscribers to providers who have agreed to accept discounted rates or reduced per diem
charges. Continuing care retirement communities and assisted living facilities are less sensitive to this directed
utilization than stand-alone skilled nursing facilities; however, the risk may increase the Borrower may be required
to accept residents under such conditions should managed care cost reduction measures now pervasive in the health
care industry continue to grow.

Medicare. The Medicare program is a federal insurance program under the Social Security Act primarily
for individuals aged 65 and over. Medicare provides coverage for skilled nursing care (1) up to 100 days per year,
(2) immediately following at least three days of hospitalization and (3) for care related to the condition treated by the
prior hospitalization. The Balanced Budget Act of 1997 implemented a Prospective Payment System (“PPS”) for all
skilled nursing facilities with annual cost reporting periods beginning on or after July 1, 1998. The PPS pays an all-
inclusive per diem rate for routine, ancillary and capital costs, and is adjusted geographically for wages and case mix
index to reflect a patient’s resource requirements. Higher acuity patients receive more reimbursement under the
payment formula. The per diem prospective payment amount covers all Medicare Part A skilled nursing services
and any items in therapy services furnished during the patient’s Medicare covered stay (with a few minor
exceptions). “Ancillary” services furnished to skilled nursing residents are also covered under Medicare Part B and
may be reimbursed after Medicare Part A coverage is exhausted. The Balanced Budget Act of 1997 also provided
for the implementation of consolidated billing for skilled nursing facilities, whereby skilled nursing facilities are
required to bill the Medicare program for virtually all Medicare services and supplies provided to Medicare
residents.

Fiscal year 2018 SNF prospective payment rates reflect a 1.40% increase over the previous fiscal year. The
fiscal year 2016 SNF payment and policy changes also include the revisions to the quality reporting program
implemented under the Improving Medicare Post-Acute Care Transformation Act of 2014 (“IMPACT Act”) and the
Social Security Act; SNFs that fail to submit required quality data to CMS under the SNF Quality Reporting
Program will have their annual updates reduced by two percentage points. Further, the Protecting Access to
Medicare Act of 2014 (“PAMA”) established a Skilled Nursing Facility Value-Based Purchasing Program beginning
with fiscal year 2019, under which value-based incentive payments are made to SNFs in a fiscal year based on
performance.

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 Other future legislation, regulation or actions by the federal government are expected to continue the trend
toward more limitations on reimbursement for long term care services. At present, no determination can be made
concerning whether or in what form such legislation could be introduced and enacted into law. Similarly, the impact
of future cost control programs and future regulations upon the Borrower’s financial performance cannot be
determined at this time.

Medicare Managed Care. Medicare beneficiaries who are entitled to Part A and enrolled in Part B may
choose to obtain their benefits through a variety of risk-based plans under the Medicare Advantage Program, which
allows Medicare beneficiaries to participate in coordinated care plans, including health maintenance organizations
and preferred provider organizations. Reimbursement under these plans may be less than what traditional Medicare
pays.

The ACA provides for payments under the Medicare Advantage programs (Medicare managed care) to be
reduced. Although these reductions have been delayed to date, they may result in increased premiums or out-of-
pocket costs to Medicare beneficiaries enrolled in Medicare Advantage plans if implemented. These beneficiaries
may terminate their participation in those plans and opt for the traditional Medicare fee for service program. The
reduction in payments to Medicare Advantage programs may also lead to decreased payments to providers by
managed care companies operating Medicare Advantage programs. All or any of these outcomes would have a
disproportionately negative effect upon providers with relatively high dependence upon Medicare managed care
revenues.

Medicaid. Medicaid is a health insurance program for certain low-income and needy individuals that is
jointly funded by the federal government and the states. Pursuant to federal guidelines, each state establishes its
own eligibility standards; determines the type, amount, duration and scope of services; sets the payment rates for
services; and administers its own programs. Under Medicaid, the federal government provides grants to states that
have medical assistance programs that are consistent with (or have secured waivers from) federal standards.
Medicaid makes per-diem payments for SNF services on a cost basis.

Under ACA, states have the option to expand Medicaid to cover individuals under the age of 65 with
incomes up to 133% of the federal poverty level; the federal government pays 100% of costs for those made newly
eligible for Medicaid under ACA, but the federal match is pared down to 95% in 2017, 94% in 2018, 93% in 2017
and 90% in 2020 and beyond.

Oklahoma. Oklahoma has chosen to not expand Medicaid under the ACA. Oklahoma’s Medicaid
program, called SoonerCare, provides health care to children under the age of 19, adults with children under the age
of 18, pregnant women and people who are older than 65 or have blindness or another disability. The Borrower
does not participate in the Oklahoma Medicaid program and, accordingly, does not anticipate receiving SoonerCare
reimbursement.

Many states, including Oklahoma, face severe financial challenges, including erosion of general fund tax
revenues. These factors have resulted in a shortfall between revenue and spending demands. The financial
challenges facing states may negatively affect institutions in a number of ways, including, but not limited to, a
greater number of indigent patients who are unable to pay for their care and a greater number of individuals who
qualify for Medicaid and/or reductions in Medicaid reimbursement rates.

A large percentage of the residents of the Communities have their own health insurance or pay cash for the
services of the Communities. Thus, any decrease in the financial security of the residents could adversely the
Borrower.

Regulatory Enforcement

General. Health care “fraud and abuse” laws have been enacted at the federal and state levels to broadly
regulate the provision of services to government program beneficiaries and the methods and requirements for
submitting claims for services rendered to the beneficiaries. Under these laws, health care providers and others can
be penalized for a wide variety of conduct, including submitting claims for services that are not provided, billing in a
manner that does not comply with government requirements or including inaccurate or misleading billing
information, billing for services deemed to be medically unnecessary, or billings accompanied by an illegal
inducement to utilize or refrain from utilizing a service or product.

Recovery Audit and ZPIC Contractors. The Medicare Modernization Act of 2003 established the
Medicare Recovery Audit Contractor (“RAC”) program as a demonstration program to identify improper Medicare
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payments to Medicare providers and suppliers – both overpayments and underpayments. RACs are paid on a
contingency fee basis, receiving a percentage of the improper overpayments and underpayments they collect from
providers. The RAC program as expanded by the ACA, also subjects Medicaid and Medicare Parts C and D
payments to RAC scrutiny. Any RAC audit could have a material adverse effect on the Borrower’s finances. There
can be no assurance that the Borrower will not be audited or, if audited, will not be required to make substantial
repayments to the Medicare program. Although management of the Borrower believes its reserves are adequate for
such purpose, any such adjustments could be material. Medicare regulations also provide for withholding payment
in certain circumstances, and such withholds could have a material adverse effect on the future financial condition
and results of operations of the Members. In addition, health care providers are also subject to audit by CMS’s Zone
Program Integrity Contractors (“ZPICs”), which specifically identify cases of fraud and abuse. ZPIC audits have
already begun for certain providers. Such audits may result in reduced reimbursement for past alleged
overpayments and may slow future Medicare payments to providers pending the resolution of appeals process with
RACs and ZPICs, as well as increase purported Medicare overpayments in the future and associated costs for the
Borrower.

False Claims Act Liability and Enforcement Actions. The federal civil False Claims Act (“Civil FCA”)
prohibits anyone from knowingly submitting a false, fictitious or fraudulent claim to the federal government.
Violation of the Civil FCA can result in civil money penalties and fines, including treble damages. Private
individuals may initiate actions on behalf of the federal government in lawsuits called qui tam actions. The
plaintiffs, or “whistleblowers,” can recover significant amounts from the damages awarded to the government. In
several cases, Civil FCA violations have been alleged solely on the existence of alleged kickback arrangements or
Stark law violations, even in the absence of evidence that false claims had been submitted as a result of those
arrangements. Under the ACA, Congress has created new Civil FCA liabilities associated with knowingly failing to
report and return an overpayment by the later of: (i) the date which is 60 days after the date on which the
overpayment was identified; or (ii) the date any corresponding cost report is due, if applicable. An overpayment is
defined to include any funds that a person “receives or retains” under Medicare or Medicaid “to which the person,
after applicable reconciliation, is not entitled.” Any overpayment that has been retained after the deadline is
considered an obligation under the Civil FCA. The Department of Justice has also begun using the Civil FCA as a
basis for prosecuting nursing homes for providing substandard care.

The Fraud Enforcement and Recovery Act of 2009 (“FERA”) includes several amendments to the Civil
FCA intended to protect federal government funds disbursed to subcontractors to the same extent that the Civil FCA
protects funds distributed to prime contractors. FERA also seeks to address recent judicial interpretations of the
statute’s so-called “presentment clause,” which requires that a false claim be presented to a government employee
for payment before liability may be imposed, by clarifying that FCA liability “attaches whenever a person
knowingly makes a false claim to obtain money or property, any part of which is provided by the Government
without regard to whether the wrongdoer deals directly with the federal government; with an agent acting on the
government’s behalf; or with a third party contractor, grantee, or other recipient of such money or property.” FERA
also allows the attorney general to delegate to Department of Justice attorneys the power to issue civil investigative
demands for testimony, documents and interrogatory answers in FCA investigations and provides that information
obtained through the use of the civil investigative demands can be used in a range of federal investigations and
prosecutions.

FERA and ACA provisions amend and expand the reach of the FCA. FERA expanded the FCA’s reverse
false claims provision, imposing liability on any person who “knowingly conceals” or “knowingly and improperly
avoids or decreases” an “obligation to pay or transmit money or property to the Government,” whether the person
uses a false record or statement to do so or not. FERA also clarified that an “obligation” can arise from the retention
of an overpayment. Section 6402 of the ACA further addresses the retention of overpayments by defining the term
overpayment and the circumstances and timing under which an overpayment need be returned to the government
before it becomes an “obligation” under the FCA. FERA and the ACA also amend certain jurisdictional bars to the
ACA, effectively narrowing the public disclosure bar and expanding the definition of “original source,” thus
potentially broadening the field of potential whistleblowers.

Under the Civil FCA, health care providers may be liable if they take steps to obtain or retain improper
payments from the government. In several cases, Civil FCA violations have been alleged solely on the existence of
alleged kickback or self-referral arrangements, even in the absence of evidence that false claims had been submitted
as a result of those arrangements. In addition to the types of potential actions described above, Civil FCA cases
have proceeded on a theory that providers are liable for the submission of false claims when they are not in full
compliance with applicable legal and regulatory standards. The Department of Justice has also begun using the
False Claims Act as a basis for prosecuting nursing homes for providing substandard care.

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 The criminal False Claims Act (“Criminal FCA”) prohibits the knowing and willful making of a false
statement or misrepresentation of a material fact in submitting a claim to the government. Sanctions for violation of
the Criminal FCA include imprisonment, fines, and exclusions. To the extent the government cannot prove criminal
intent or meet its burden of proving a false claim beyond a reasonable doubt, the same conduct can typically be
prosecuted under civil statutes, including the Civil FCA. Imposition of such penalties or exclusions would result in
a significant loss of reimbursement and may have a material adverse effect on the Borrower’s financial condition.
Management of the Borrower has adopted a corporate compliance program addressing, among other items,
submission of claims under the government health programs. Nevertheless, there can be no assurance that the
affiliates of the Borrower will not be subject to enforcement actions in the future, and if so, that the Borrower will
not suffer any monetary or other penalties.

Civil Monetary Penalty Law. The Civil Monetary Penalty Law in part authorizes the government to
impose penalties against individuals and entities committing a variety of acts. For example, penalties may be
imposed for the knowing presentation of claims that are (i) incorrectly coded for payment, (ii) for services that are
known to be medically unnecessary, (iii) for services furnished by an excluded party, or (iv) otherwise false. An
entity that offers remuneration to an individual that the entity knows is likely to induce the individual to receive care
from a particular provider may also be fined. Moreover, a provider may not knowingly make a payment, directly or
indirectly, to a physician as an inducement to reduce or limit services to Medicare patients under the physician’s
direct care. The ACA amended the Civil Monetary Penalty Law to authorize civil monetary penalties for a number
of additional activities, including (i) knowingly making or using a false record or statement material to a false or
fraudulent claim for payment; (ii) failing to grant the Office of Inspector General timely access for audits,
investigations, or evaluations; or (iii) failing to report and return a known overpayment within statutory time limits.
Violations of the Civil Monetary Penalty Law can result in substantial civil money penalties plus three times the
amount claimed.

Federal Referral Laws. There is ever-increasing scrutiny by law enforcement authorities, the Department
of Health and Human Services (“DHHS”) Office of Inspector General (“OIG”), the courts, and Congress of
arrangements between health care providers and potential referral sources to ensure that the arrangements are not
designed as a mechanism to exchange remuneration for patient care referrals and opportunities. DHHS, the courts,
and Congress have also demonstrated a willingness to look behind the formalities of an entity’s structure to
determine the underlying purpose of payments between health care providers and potential referral sources.
Enforcement actions have increased, as evidenced by recent Federal court decisions and activities initiated by the
OIG.

Under federal anti-kickback law, it is illegal to offer, pay, solicit or receive a payment in return for
referring, ordering, recommending or arranging for the referral of any product or service covered by Medicare,
Medicaid or other government health care programs. This prohibition has been broadly applied by the courts.
Violations may result in civil and criminal penalties. Criminal penalties include imprisonment and fines. Civil
penalties include temporary or permanent exclusion from government health care programs and civil money
penalties. Under the ACA, Congress revised the intent requirement of the anti-kickback law to provide that a person
is not required to “have actual knowledge or specific intent to commit a violation of” the anti-kickback law in order
to be found guilty of violating such law. The ACA also provided that any claims for items or services that violate
the anti-kickback law are also considered false claims for purposes of the federal civil FCA.

The Physician Self-Referral Statute (the “Stark Law”) prohibits a physician from referring a Medicare or
Medicaid patient for certain “designated health services” to an entity with which the physician (or a member of the
physician’s immediate family) has a financial relationship, unless the financial relationship meets the requirements
of one of the exceptions set forth in the Stark statute or regulations. “Designated health services” include the
following: clinical laboratory services; physical therapy services; occupational therapy services; outpatient speech-
language pathology services, radiology services, including magnetic resonance imaging, computerized axial
tomography scans, and ultrasound services; radiation therapy services and supplies; durable medical equipment and
services; parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics, and prosthetic devices and
supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services.

If a prohibited financial relationship exists, the physician may not refer Medicare or Medicaid patients to an
entity for certain designated health services, and the entity may not present a claim for such services. If a Medicare
fiscal intermediary, carrier, or administrative contractor determines that there has been a Stark Law violation, it must
deny payment, and the physician and entity must refund any amounts collected from any individual. Further, DHHS
may seek civil monetary penalties for each illegal referral and for schemes designed to circumvent the Stark Law
requirements. If Stark Law violations are prosecuted under the Civil FCA, the potential liability would be increased.

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Penalties may be assessed against either the referring physician or the entity that receives the prohibited referral, or
both.

The Stark Law includes specific reporting requirements mandating that each entity furnishing covered
items or services, upon request, must provide DHHS with certain information concerning its ownership, investment
and compensation arrangements. Reportable information includes the covered items and services provided by the
entity and the names and unique physician identification numbers of all physicians who have a financial relationship
with the entity. Failure to adhere to these reporting requirements may subject the entity to significant civil money
penalties. Finally, qui tam plaintiffs may file actions under the Civil FCA, discussed above, on the basis of alleged
Stark Law violations.

The anti-kickback law and Stark Law are very broad in scope and the agencies responsible for investigation
and prosecution under them have considerable discretion. Prosecution under the anti-kickback statute or the Stark
Law could have a material adverse impact on the financial condition of a health care provider. Providers may act to
reduce their exposure for federal referral law violations by establishing an effective corporate compliance program
that periodically reviews physician relationships, promptly returning to the government any payments received by
way of illegal referrals, and responding in an effective manner to complaints regarding potentially illegal financial
arrangements. The Borrower has in effect such a corporate compliance program; however, there can be no
assurance that the Borrower will not be subject to such prosecution in the future.

Other Federal Medicare Related Fraud Provisions. Federal health care criminal provisions applicable to
private and governmental health benefit programs were enacted as part of Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”). Under these provisions, a person who knowingly and willfully executes, or
attempts to execute, a scheme or artifice (1) to defraud any health care benefit program, or (2) to obtain, by means of
false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the
custody or control of, any health care benefit program, in connection with delivery of or payment for health care
benefits, items or services, may be fined and/or imprisoned for not more than ten years. The term of imprisonment
can increase if serious bodily injury or death results from the fraud. Any violation of these provisions could have a
material adverse impact on the Borrower.

Congress has also enacted a variety of provisions designed to control fraud and abuse in the government
health programs and to strengthen enforcement capabilities. New health care crimes applicable to all health care
payment plans (governmental and private) have been established, the Medicare exclusion provisions have been
expanded to provide reciprocal exclusion of entities and individuals with ownership or controlling interests in such
entities, and civil monetary penalties for a variety of actions have been increased. Prosecution under these new
crimes or expanded provisions could have a material adverse impact on the financial condition of a health care
provider. As previously stated, the Borrower has in effect a corporate compliance program designed to facilitate
compliance with these laws and provisions, however, there can be no assurance that the Borrower will not be subject
to such prosecution in the future.

Administrative Enforcement. As with civil laws, administrative enforcement provisions require a lower
standard of proof of a violation than the criminal standard. Thus, health care providers have a risk of incurring
monetary penalties as a result of an administrative enforcement action.

Exclusions from Medicare Participation. The term “exclusion” means that no Medicare or state health
care program reimbursement will be made for any services rendered by the excluded party or for any services
rendered on the order or under the supervision of an excluded physician. DHHS is required to exclude from federal
health care program participation for not less than five years any individual or entity convicted of a criminal offense
relating to the delivery of any item or service reimbursed under Medicare or a state health care program; any
criminal offense relating to patient neglect or abuse in connection with the delivery of health care; a felony relating
to fraud, theft, embezzlement, breach of fiduciary responsibility or other misdemeanor in connection with the
delivery of health care services or with respect to any act or omission in a health care program (other than Medicare
or a state health care program) operated by or financed in whole or in part by a governmental agency; or a felony
offense relating to the illegal manufacture, distribution, prescription or dispensing of a controlled substance. DHHS
also has permissive authority to exclude individuals or entities under certain other circumstances, such as a
misdemeanor conviction for fraud in connection with delivery of health care services or conviction for obstruction
of an investigation of a health care violation. The minimum period of exclusion for certain permissive exclusions is
three years. Exclusion of the Borrower from the Medicare or state Medicaid programs could have a material adverse
impact on its financial condition.

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 Enforcement Activity. Enforcement activity against health care providers is increasing, and enforcement
authorities are adopting more aggressive approaches. In the current regulatory climate, it is anticipated that many
health care providers will be subject to investigation, audit or inquiry regarding billing practices or false claims. As
with other health care providers, the Borrower may be the subject of Medicare intermediary or carrier, OIG, U.S.
Attorney General, Department of Justice, state attorney general investigations, audits or inquiries in the future.
Because of the complexity of these laws, the instances in which an alleged violation may arise to trigger such
investigations, audits or inquiries are likely increasing and could result in enforcement action against the Borrower.

Regardless of the merits of a particular case or cases, the Borrower could incur significant legal and
settlement costs. Prolonged and publicized investigations could be damaging to the reputation, business and credit
of the Borrower, regardless of the outcome, and could have material adverse consequences on the financial
condition of the Borrower.

Privacy and Security Regulations. The confidentiality of patient medical records and other health
information is subject to considerable regulation by state and federal governments. Legislation and regulations
governing the dissemination and use of medical record information are being proposed continually at both the state
and federal levels. For example, the administrative simplification provisions of HIPAA mandate that health care
providers use and disclose certain patient health information in accordance with DHHS standards and requirements.
These rules require the implementation of policies and procedures by covered entities for coding, maintaining,
storing and transmitting medical information, as well as policies and procedures designed to protect the security,
data integrity and confidentiality of patient medical information and to permit patients to exercise their specific
rights under HIPAA.

HIPAA. HIPAA mandates the adoption of federal privacy and security standards to protect the
confidentiality of protected health information. Regulations designed to protect health information impose very
complex procedures and operational requirements with which the Borrower is obligated to comply. Failure to
protect the privacy and security of protected health information could result in damages or civil or criminal
penalties. In addition, violations may increase operating expenses as necessary to notify affected individuals of
privacy or security breaches, correct problems, comply with federal and state regulations, defend against potential
claims and implement and maintain any additional requirements imposed by government action.

HIPAA also added to an existing criminal statute a provision that prohibits in any matter involving health
benefits, the knowing and willful falsification or concealment of a material fact or the making of a materially false,
fictitious, or fraudulent statement in connection with the delivery of or payment for health care benefits, items, or
services. HIPAA also extends the federal government’s criminal authority to certain fraudulent acts committed
against health care benefit programs. In addition, HIPAA includes administrative simplification provisions that
require standardization of electronic transactions, specific security protections for medical information and
processes, privacy protections for patient health information, and establishment of national employer and provider
identifiers. DHHS and CMS have promulgated rules related to electronic transactions, national employer identifiers,
national provider identifiers, security, and privacy. These rules require the implementation of policies and
procedures by health care providers for coding, maintaining, storing and transmitting medical information, as well as
policies and procedures designed to protect the security, data integrity and confidentiality of patient medical
information and to permit patients to exercise their specific rights under HIPAA.

HIPAA imposes civil monetary penalties for violations and criminal penalties for knowingly obtaining or
using individually identifiable health information. Penalties for HIPAA non-compliance range from $55,010 for any
violation not to exceed $1.65 million in any calendar year for wrongful disclosure of individually identifiable health
information. Violations may increase operating expenses as necessary to notify affected individuals of privacy or
security breaches, correct problems, comply with federal and state regulations, defend against potential claims and
implement and maintain any additional requirements imposed by government action.

HITECH. Certain American Recovery and Reinvestment Act of 2009 provisions identified separately as
the Health Information Technology for Economic and Clinical Health Act (“HITECH”) alter certain rules regarding
the use and disclosure of protected health information. The HITECH Act (i) extends the reach of HIPAA beyond
“covered entities,” (ii) imposes a breach notification requirement on HIPAA covered entities, (iii) limits certain uses
and disclosures of individually identifiable health information, (iv) increases individuals’ rights with respect to
individually identifiable health information and (v) increases enforcement of, and penalties for, violations of privacy
and security of individually identifiable health information.

Any violation of the HITECH Act is subject to HIPAA civil and criminal penalties. The HITECH Act
broadened the applicability of the criminal penalty provisions under HIPAA to employees of covered entities and
38
required penalties for violations resulting from willful neglect. As noted above, the HITECH Act also significantly
increased the amount of civil penalties to up to $1.65 million for violations during a calendar year under HIPAA. In
addition, the HITECH Act authorized state attorneys general to bring civil actions seeking either injunction or
damages in response to violations of HIPAA privacy and security regulations that threaten state residents.

The Borrower maintains a formal plan for compliance with all applicable HIPAA requirements, has trained
its staff and employees in these requirements, and maintains specified HIPAA compliance officers who have been
provided the authority to supervise, update, and enforce policies and procedures designed to assure HIPAA
compliance. While the management of the Borrower believes they have taken reasonable and appropriate steps in
the design of policies and procedures and in its supervision so as to maintain HIPAA compliance, it cannot be
predicted when or to what extent complaints may be filed or investigations undertaken, which could involve the
expenditure of possibly substantial sums to defend, and the possibility of fines or other penalties should DHHS
determine that any covered component the Borrower is not in compliance with HIPAA requirements.

States Legislation and Regulations Governing the Community and the Communities

Legislation may be introduced from time to time in the Oklahoma Legislature relating to the operations and
reimbursement of health care providers, including the Borrower. No precise determination can be made at this time
whether the bills that may be introduced or the regulations which may be proposed for the purpose of containing
costs, providing access to care, or otherwise affecting health care provider revenues, or increasing competition
among health care providers, will be enacted, or, if enacted, whether and to what degree such legislation will affect
the financial condition and results of operations of the Borrower, or its ability to make future capital expenditures.

State of Oklahoma Legislation and Regulations

Oklahoma regulates assisted living, and residential facilities. The Oklahoma State Department of Health
licenses, reviews and enforces the minimum standards for the physical facilities, the staffing of facilities depending
on the level of care, and the services that may be provided in assisted living facilities. The Health Facility Systems
of the OSDH enforces the Continuum of Care and Assisted Living Act, which provides for disclosure and the
inclusion of certain information in continuing care contracts.

Continuum of Care and Assisted Living Act. The Borrower has applied for a license as an assisted living
facility by OSDH pursuant to the Continuum of Care and the Assisted Living Act (the “Act”). The Act licenses a
home, establishment, or institution providing nursing facility services and assisted living center services. The
licensing requirements include specific rules and requirements for the conduct of resident assessments, physical
plant design, privacy and independence of residents, staffing requirements, including nursing and medication
staffing, quality of care, resident contract provisions, complaint procedures, maintenance of records, quality of care,
and specific provisions that are required to be in each resident contract. The Department of Health may revoke or
suspend a licensed issued to an assisted living facility if it is not in compliance with the Act. However, an assisted
living facility license cannot be suspended without a hearing and a written notice of cause must be given. Notice of
suspension must include a statement of deficiencies on which the suspension is based.

Alzheimer’s Disease Special Care Disclosure Act. The Alzheimer’s Disease Special Care Disclosure Act
(the “Disclosure Act”) requires that a continuum of care facility, nursing facility or assisted living facility, that
advertises, markets or otherwise promotes itself as providing care or treatment to persons with Alzheimer’s disease
or related disorders, prior to entering into any agreement to provide care, must disclose the type of care or treatment
to the state licensing agency, the State of Oklahoma’s long-term care ombudsman, and any person seeking
placement at the facility on behalf of a person with Alzheimer’s disease or related disorders. The disclosures must
be made to the state licensing agency at the time of license renewal and any time there is a significant change in the
information that has been previously submitted. The disclosures include a written description of the facility’s
overall philosophy in treating individuals with Alzheimer’s disease or related disorders, the process and criteria for
placement in or transfer or discharge from a facility, the process used for assessment and implementation of a patient
care plan, staff-to-resident ratios, staff training and continuing education, the physical environment and design
features appropriate to support the function of the residents, the types and frequency of resident activities, the
involvement of families, and any fees from the facility for this additional type of care.

Residential Care Act. The Residential Care Act regulates any establishment or institution, which offers
residential accommodations, food service, and supportive assistance to any of its residents. Under the Residential
Care Act, the institution must provide proper personnel, including acceptable minimum staffing ratios; satisfactory
physical and sanitary conditions that affect the health, safety and welfare of the residents in a home; proper nutrition;
equipment; and rehabilitation programs that may be necessary for the residents. Violations of the Residential Care
39
Act may result in license revocation or suspension, transfer of residents, injunctive proceedings, civil fines not to
exceed $100 for each day that the violation continues or $10,000 for any related series of violations, and criminal
penalties.

Other Laws Enforced by OSDH. The Borrower is also subject to various other laws and regulations
administered by OSDH, including laws requiring registration of sex offenders or violent crime offenders seeking
placement at the Communities, laws requiring criminal arrest checks on certain persons offered employment, laws
relating to the employment of nurse’s aides, and laws related to compensation of caregivers.

As a result of the number of laws and regulations affecting the Borrower, any significant changes in such
laws and regulations could have an adverse impact on the Borrower.

Challenges to Continuing Care Retirement Centers from Affordable Housing Activists

The federal Fair Housing Act, 42 U.S.C. §§ 3604, 3606, prohibits housing providers from discriminating in
the sale or rental, or otherwise making unavailable or denying a “dwelling” to any buyer or renter, due to disability.
Under the Fair Housing Act, a “disability” is a physical or mental impairment which substantially limits one or more
of such person’s major life activities, and a “dwelling” is any building, structure or portion thereof which is
occupied as, or designed or intended for occupancy as, a residence by one or more families. Continuing care
retirement communities are considered to be housing or dwellings, subject to the Fair Housing Act. Generally, the
Fair Housing Act prohibits inquiries into health status.

There are inherent tensions between the Fair Housing Act and continuing care retirement communities.
Continuing care retirement communities such as the Communities guarantee access to health care for life at a price
that is set in advance subject to moderate increases. To offer this insurance-like product, continuing care retirement
communities use actuarial modeling and underwriting principles to set prices and determine the parameters of
acceptable resident health status. There is tension between state continuing care retirement community laws and fair
housing laws; state laws anticipate the collection of health information from life care applicants.

The tensions between continuing care retirement communities and fair housing laws have resulted in some
litigation, with favorable decisions on both the provider and resident side, but there is no definitive court ruling on
the legality of inquiries into applicants’ health status. However, continuing care retirement communities are
increasingly facing challenges to their admission policies. If a court were to rule that continuing care retirement
communities’ inquiries into applicants’ health status are forbidden by the Fair Housing Act, the Borrower would
likely need to increase fees to accommodate the inability to apply underwriting principles to its offering of life care.

Appraisals

The Appraisals are based on certain assumptions significant to the operation of the Communities as
described therein, and set forth information as of the dates thereof. Neither the Issuer, the Underwriter, the Trustee
nor any counsel rendering approving or other opinions with respect to the transactions described herein have
examined or verified the assumptions and conclusions contained in the Appraisals.

The Appraisals include information regarding the procedures utilized in preparing the Appraisals and the
underlying general assumptions and limiting conditions. The conclusions and much of the other information
included in the Appraisals are based on the assumptions and rationale stated therein. In some instances, the
currently available information may be incomplete, may not necessarily disclose all material facts that might affect
the Communities, and, in any case, may change after the date of the Appraisals. Accordingly, the assumptions and
other information in the Appraisals should be carefully evaluated by a prospective investor in the light of the
circumstances then prevailing.

Appraisals, by their nature, are based on the judgment of the appraiser, represent only estimates of value
and should not be relied upon as a measure of realizable value. There can be no assurance that information set forth
therein continues to be accurate in all respects as of the date hereof.

Information taken from the Appraisal Reports prepared by the Appraiser should be evaluated within the
context of the full narrative report. Information presented out of the context of the full narrative report may be
misleading. There is no assurance that the “market value” set forth in the Appraisals would be realized in the event
of the foreclosure or forced sale of the Communities. A Summary Appraisal Report is set forth as Appendix E to
this Official Statement.

40
Financial Projections

The financial forecast contained in the Feasibility Study included in Appendix D – “Financial Feasibility
Study” is based upon assumptions made by management of the Borrower and the Manager. As stated in the
Financial Feasibility Study, there will usually be differences between the forecasted and actual results, because
events and circumstances frequently do not occur as expected, and those differences may be material. In addition,
the financial forecast is only for the period ending December 31, 2021, and consequently does not cover the whole
period during which the Series 2017 Bonds may be outstanding. See the Financial Feasibility Study included herein
as Appendix D, which should be read in its entirety, including management’s notes and assumptions set forth
therein.

BECAUSE THERE IS NO ASSURANCE THAT ACTUAL EVENTS WILL CORRESPOND WITH THE
ASSUMPTIONS MADE BY MANAGEMENT, NO GUARANTY CAN BE MADE THAT THE FINANCIAL
FORECAST IN THE FEASIBILITY STUDY WILL CORRESPOND WITH THE RESULTS ACTUALLY ACHIEVED
IN THE FUTURE. ACTUAL OPERATING RESULTS MAY BE AFFECTED BY MANY UNCONTROLLABLE
FACTORS, INCLUDING BUT NOT LIMITED TO INCREASED COSTS, LOWER THAN ANTICIPATED
REVENUES, EMPLOYEE RELATIONS, TAXES, GOVERNMENTAL CONTROLS, CHANGES IN APPLICABLE
GOVERNMENTAL REGULATION, CHANGES IN DEMOGRAPHIC TRENDS, CHANGES IN THE RETIREMENT
LIVING AND HEALTH CARE INDUSTRIES, AND GENERAL ECONOMIC CONDITIONS.

Financial Information Provided by the Seller of the Communities

Certain historical financial information of the Communities presented in APPENDIX A and in APPENDIX D –
“Financial Feasibility Study” was provided by the seller of the Communities. Such historical financial information
serves as a basis for and underlies certain assumptions in the Feasibility Report, and it has not been audited nor has
it been reviewed or examined by an accountant. The Underwriter makes no representation as to such historical
financial information.

Tax-Exempt Status

Tax Exempt Status of Interest on the Tax-Exempt Bonds. The Code imposes a number of requirements
that must be satisfied for interest on state and local obligations, such as the Tax-Exempt Bonds, to be excludable
from gross income for federal income tax purposes. These requirements include limitations on the use of bond
proceeds, limitations on the investment earnings of bond proceeds prior to expenditure, a requirement that certain
investment earnings on bond proceeds be paid periodically to the United States, and a requirement that the issuers
file an information report with the IRS. The Borrower has agreed that it will comply with such requirements.
Failure to comply with the requirements stated in the Code and related regulations, rulings and policies may result in
the treatment of the interest on the Tax-Exempt Bonds as taxable. Such adverse treatment may be retroactive to the
date of issuance. See also “TAX MATTERS – Tax-Exempt Bonds” below.

Neither the Issuer nor the Borrower has not sought to obtain a private letter ruling from the IRS with
respect to the Tax-Exempt Bonds, and the opinion of McCall, Parkhurst & Horton L.L.P. is not binding on the IRS.
There is no assurance that any IRS examination of the Tax-Exempt Bonds will not adversely affect the market for or
market value of the Tax-Exempt Bonds during the pendency of such examination. See “TAX MATTERS – Tax-
Exempt Bonds” below.

Tax-Exempt Status of the Borrower. The tax exempt status of the Tax-Exempt Bonds currently depends
upon maintenance by the Borrower of its status as an organization described in Section 501(c)(3) of the Code. The
maintenance of this status depends on compliance by the Borrower with general rules regarding the organization and
operation of tax exempt entities, including their operation for charitable purposes and their avoidance of transactions
that may cause their earnings or assets to inure to the benefit of private individuals, such as the private benefit and
inurement rules.

Tax exempt organizations are subject to scrutiny from and face the potential for sanction and monetary
penalties imposed by the IRS. One primary penalty available to the IRS under the Code with respect to a tax exempt
entity engaged in inurement or impermissible private benefit is the revocation of tax exempt status. Loss of tax
exempt status by the Borrower could result in loss of tax exemption of the Tax-Exempt Bonds, and defaults in
covenants regarding the Tax-Exempt Bonds and other obligations would likely be triggered. Loss of tax exempt
status by the Borrower also could result in substantial tax liabilities on its income. For these reasons, loss of tax
exempt status of the Borrower could have material adverse consequences on the financial condition of the Borrower.

41
 The IRS Form 990 is used by most 501(c)(3) not-for-profit organizations exempt from federal income
taxation to submit information required by the federal government. The IRS Form 990 requires detailed public
disclosure of compensation practices, corporate government, loans to executive management and others, joint
ventures and other types of transactions, political campaign activities, and other areas the IRS deems to be
compliance risk areas. The form also requires reporting of information relating to tax-exempt bonds, including
compliance with the arbitrage rules and rules limiting private use of bond-financed facilities, including compliance
with the safe harbor guidance in connection with management contracts. This detailed information, available to the
IRS as well as states’ attorneys general, unions, plaintiff class action lawyers and public interest groups, could result
in increased enforcement actions, the effect of which cannot be determined at this time.

With increasing frequency, the IRS has imposed substantial monetary penalties and public benefit
obligations on tax-exempt organizations in lieu of revoking tax-exempt status, as well as requiring that certain
transactions be altered, terminated or avoided in the future and/or requiring governance or management changes.
These penalties and obligations typically are imposed on the tax-exempt organization pursuant to a “closing
agreement,” a contractual agreement pursuant to which a taxpayer and the IRS agree to settle a disputed matter. The
Borrower may be at risk for incurring monetary and other liabilities imposed by the IRS. These liabilities could be
materially adverse.

Less onerous sanctions, referred to generally as “intermediate sanctions”, have been enacted, which
sanctions focus enforcement on private persons who transact business with a tax exempt organization rather than the
tax exempt organization itself, but these sanctions do not replace the other remedies available to the IRS described
above. See “ – Other Federal Tax Matters – Intermediate Sanctions” herein.

The Borrower may be audited by the IRS. Because of the complexity of the tax laws and the presence of
issues about which reasonable persons can differ, an IRS audit could result in additional taxes, interest and penalties.
An IRS audit ultimately could affect the tax exempt status of the Borrower, as well as the exclusion from gross
income for federal income tax purposes of the interest on the Tax-Exempt Bonds and any other tax-exempt debt
issued for the Borrower. See “ – Other Federal Tax Matters – Bond Audit” herein.

State and Local Tax Exemption

In the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, assuming continuous compliance with
certain covenants described in “TAX MATTERS” herein, interest on the Tax-Exempt Bonds is excludable from net
income for State income tax purposes.

In addition, as previously noted, Oklahoma imposes ad valorem real property taxes. Local governments are
largely responsible for the administration of the real property tax system and rely heavily on such taxes for funding
of their operations. As a result, local governments are beginning to challenge the appropriateness of many
exemptions from real property taxation. Local governments regularly review the specific use of properties for
purposes of applying the state property tax exemption and a change in categorization could result in the imposition
of real property taxes.

Unrelated Business Income

The IRS and state, county and local taxing authorities may undertake audits and reviews of the operations
of tax-exempt organizations with respect to the generation of unrelated business taxable income (“UBTI”). The
Borrower participates in activities that may generate UBTI. The level of these activities is currently immaterial to
the Borrower, but these activities could increase in the future. An investigation or audit could lead to a challenge
that could result in taxes, interest and penalties with respect to UBTI and, in some cases, ultimately could affect the
tax-exempt status of the Borrower, as well as the exclusion from gross income for federal income tax purposes of
the interest payable on the Tax-Exempt Bonds and other tax-exempt debt issued for the Borrower.

Other Federal Tax Matters

Possible Changes in Borrower’s Tax Status. The possible modification or repeal of certain existing
federal income or state tax laws or other loss by the Borrower of the present advantages of certain provisions of the
federal income or state tax laws could materially and adversely affect the status of the Borrower and thereby the
revenues of the Borrower. The Borrower has obtained a determination letter from the IRS to the effect that the
Borrower is exempt from federal income taxation under Section 501(a) of the Code by virtue of being an
organization described in Section 501(c)(3) of the Code. As such, the Borrower is subject to a number of
requirements affecting its operations. The Feasibility Report prepared by Management of the Borrower includes an
42
assumption that the Borrower will continue to be treated as an organization described in Section 501(c)(3) of the
Code. The failure of the Borrower to remain qualified as exempt organizations would affect the funds available to
the Borrower for payments to be made under the Loan Agreement. Failure of the Borrower or the Issuer to comply
with certain requirements of the Code, or adoption of amendments to the Code to restrict the use of tax-exempt
bonds for facilities such as those being financed with Series 2017 Bond proceeds, could cause interest on the Tax-
Exempt Bonds to be included in the gross income of Owners of the Series 2017 Bonds or former Owners of the
Series 2017 Bonds for federal income tax purposes.

It is not possible to predict the scope or effect of future legislative or regulatory actions with respect to
taxation of charitable organizations. There can be, however, no assurance that future changes in the laws and
regulations of the federal, state or local governments will not materially and adversely affect the operations and
revenues of the Borrower by requiring it to pay income taxes.

Intermediate Sanctions. The Taxpayers Bill of Rights 2 (the “Taxpayers Act”), enacted by Congress in
1996, provides the IRS with an “intermediate” tax enforcement tool to combat violations by tax-exempt
organizations of the private inurement prohibition of the Code. Previous to the “intermediate sanctions law”, the
IRS could punish such violations only through revocation of an entity’s tax-exempt status. Intermediate sanctions
may be imposed where there is an “excess benefit transaction”, defined to include a disqualified person (i.e., a
director, officer or other related party) (1) engaging in a non-fair market value transaction with the tax-exempt
organization; (2) receiving excessive compensation from the tax-exempt organization; or (3) receiving payment in
an arrangement that violates the private inurement proscription. A disqualified person who benefits from an excess
benefit transaction will be subject to a “first tier” penalty excise tax equal to 25% of the amount of the excess
benefit. Organizational managers who participate in an excess benefit transaction knowing it to be improper are
subject to a first-tier penalty excise tax of 10% of the amount of the excess benefit, subject to a maximum penalty of
$20,000. A “second tier” penalty excise tax of 200% of the amount of the excess benefit may be imposed on the
disqualified person (but not the organizational manager) if the excess benefit transaction is not corrected in a
specified time period.

Bond Audit. The IRS has an ongoing program auditing tax-exempt obligations to determine whether, in
the view of the IRS, interest on such tax-exempt obligations is includable in the gross income of the owners thereof
for federal income tax purposes. No assurances can be given as to whether the IRS will commence an audit of the
Tax-Exempt Bonds. If an audit is commenced, under current procedures the IRS will treat the Issuer as the
taxpayer, and the Tax-Exempt Bond owners may have no right to participate in such procedure. Neither the Issuer,
the Underwriter, nor Bond Counsel is obligated to defend the tax-exempt status of the Tax-Exempt Bonds. The
Issuer has covenanted in the Indenture not to take any action that would cause the interest on the Tax-Exempt Bonds
to become includable in gross income except to the extent described above for the owners thereof for federal income
tax purposes. None of the Issuer, the Underwriter, or Bond Counsel is responsible to pay or reimburse the costs of
any Tax-Exempt Bond owner with respect to any audit or litigation relating to the Tax-Exempt Bonds.

Schedule K to Form 990 is intended to address what the IRS believes is significant noncompliance by tax-
exempt organizations with recordkeeping and record retention requirements relating to their outstanding tax exempt
bonds. Schedule K requires substantial additional efforts on the part of many tax-exempt organizations to complete.
Schedule K also focuses on the investment of bond proceeds that could violate the arbitrage rebate requirements and
on the private use of bond-financed facilities. These reporting requirements may increase the potential for sanctions
and monetary penalties imposed by the IRS.

Other Tax Status Issues. The IRS has also issued Revenue Rulings dealing specifically with the manner in
which a facility providing residential services to the elderly must operate in order to maintain its exemption under
Section 501(c)(3). Revenue Rulings 61-72 and 72-124 hold that, if otherwise qualified, a facility providing
residential services to the elderly is exempt under Section 501(c)(3) if the organization (1) is dedicated to providing,
and in fact provides or otherwise makes available services for, care and housing to aged individuals who otherwise
would be unable to provide for themselves without hardship, (2) to the extent of its financial ability, renders services
to all or a reasonable proportion of its residents at substantially below actual cost, and (3) renders services that
minister to the needs of the elderly and relieve hardship or distress. Revenue Ruling 79-18 holds that a facility
providing residential services to the elderly may admit only those tenants who are able to pay full rental charges,
provided that those charges are set at a level that is within the financial reach of a significant segment of the
community’s elderly persons, and that the organization is committed by established policy to maintaining persons as
residents, even if they become unable to pay the monthly charges after being admitted to the facility.

43
Federal Income Tax Matters; Changes in or Application of Tax Laws

As described under “TAX MATTERS,” the issuance of the Tax-Exempt Bonds is subject to the delivery of
Bond Counsel’s opinion to the effect that, on the date of such delivery, assuming continuous compliance with
certain covenants, interest on the Tax-Exempt Bonds will be excludable from gross income for federal income tax
purposes under existing law and interest on the Tax-Exempt Bonds will not be subject to the alternative minimum
tax on individuals. The Borrower cannot predict whether or to what extent Congress, the Treasury Department, the
IRS or courts of competent jurisdiction may, following the issuance of the Series 2017 Bonds, enact new laws, or
amend, change, or reinterpret existing laws, in a manner that could impact the Tax-Exempt Bonds. Although, with
respect to tax-exempt obligations, such changes in the past have generally been accorded prospective application
only and, as such, have not been applicable to outstanding indebtedness, there can be no assurance that changes with
retroactive effect may not be enacted. Legislation has been proposed in the U.S. Congress that would cap or
eliminate the exclusion of interest on municipal bonds from gross income for federal income tax purposes, and the
current U.S. federal government’s budget imbalance could result in enactment of one or more such proposals.

Any proposed legislation or administrative action, whether or not taken, could also affect the value and
marketability of the Tax-Exempt Bonds. For example, legislation is pending in Congress which, if enacted, would
significantly change the income tax rates for individuals and corporations and would repeal or modify the alternative
minimum tax for tax years beginning after December 31, 2017. It is uncertain whether such legislation will be
enacted and, if so, what provisions it will contain. Prospective purchasers of the Tax-Exempt Bonds should consult
with their own tax advisors with respect to any proposed or future changes in tax law.

Certain Matters Relating to Enforceability of the Indenture

The obligations of the Borrower and under the Series 2017 Notes will be limited to the same extent as the
obligations of debtors typically are affected by bankruptcy, insolvency and the application of general principles of
creditors’ rights and as additionally described below.

The accounts of the Borrower and any future member of the Borrower will be combined for financial
reporting purposes and will be used in determining whether various covenants and tests contained in the Indenture
(including tests relating to the incurrence of Additional Indebtedness) are met, notwithstanding the uncertainties as
to the enforceability of certain obligations of the Borrower contained in the Indenture which bear on the availability
of the assets and revenues of the Borrower to pay debt service on the Series 2017 Notes. The obligations described
herein of the Borrower to make payments of debt service on Bonds issued under the Indenture (including transfers in
connection with voluntary dissolution or liquidation) may not be enforceable to the extent (i) enforceability may be
limited by applicable bankruptcy, moratorium, reorganization or similar laws affecting the enforcement of creditors’
rights and by general equitable principles and (ii) such payments (A) are requested with respect to payments on any
Bonds issued by a member other than the member from which such payment is requested, issued for a purpose
which is not consistent with the charitable purposes of the member of the Borrower from which such payment is
requested or issued for the benefit of a member of the Borrower which is not a Tax Exempt Organization; (B) are
requested to be made from any money or assets which are donor restricted or which are subject to a direct or express
trust which does not permit the use of such money or assets for such a payment; (C) would result in the cessation or
discontinuation of any material portion of the health care or related services previously provided by the member of
the Borrower from which such payment is requested; or (D) are requested to be made pursuant to any loan violating
applicable usury laws. The extent to which the assets of any future member of the Borrower may fall within the
categories (B) and (C) above with respect to the Bonds cannot now be determined. The amount of such assets which
could fall within such categories could be substantial.

A member of the Borrower may not be required to make any payment on any Bonds, or portion thereof, the
proceeds of which were not loaned or otherwise disbursed to such member of the Borrower to the extent that such
payment would render such member of the Borrower insolvent or which would conflict with or not be permitted by
or which is subject to recovery for the benefit of other creditors of such member of the Borrower under applicable
laws. There is no clear precedent in the law as to whether such payments from a member of the Borrower in order
to pay debt service on the Series 2017 Notes may be voided by a trustee in bankruptcy in the event of bankruptcy of
a member of the Borrower, or by third party creditors in an action brought pursuant to Oklahoma fraudulent
conveyance statutes. Under the United States Bankruptcy Code, a trustee in bankruptcy and, under Oklahoma
fraudulent conveyance statutes and common law, a creditor of a related guarantor, may avoid any obligation
incurred by a related guarantor if, among other bases therefor, (i) the guarantor has not received fair consideration or
reasonably equivalent value in exchange for the guaranty and (ii) the guaranty renders the guarantor insolvent, as
defined in the United States Bankruptcy Code or Oklahoma fraudulent conveyance statutes, or the guarantor is
undercapitalized.
44
 Application by courts of the tests of “insolvency”, “reasonably equivalent value”, and “fair consideration”
has resulted in a conflicting body of case law. It is possible that, in an action to force a member of the Borrower to
pay debt service on an Bond for which it was not the direct beneficiary, a court might not enforce such a payment in
the event it is determined that such member is analogous to a guarantor of the debt of the Borrower who directly
benefited from the borrowing and that sufficient consideration for such member’s guaranty was not received and
that the incurrence of such Bond has rendered or will render the such member insolvent.

The effectiveness of the security interest in the Borrower’s revenues, accounts receivable and Project
Revenues granted in the Indenture may be limited by a number of factors, including (i) present or future prohibitions
against assignment contained in any applicable statutes or regulations; (ii) certain judicial decisions which cast doubt
upon the right of the Trustee, in the event of the bankruptcy of any member of the Borrower, to collect and retain
accounts receivable from Medicare, Medicaid, general assistance and other governmental programs;
(iii) commingling of the proceeds of Project Revenues with other money of a member of the Borrower not subject to
the security interest in Project Revenues; (iv) statutory liens; (v) rights arising in favor of the United States of
America or any agency thereof; (vi) constructive trusts, equitable or other rights impressed or conferred by a federal
or state court in the exercise of its equitable jurisdiction; (vii) federal bankruptcy laws which may affect the
enforceability of the mortgage or the security interest in the Project Revenues of the Borrower which are earned by
the Borrower within 90 days preceding or, in certain circumstances with respect to related corporations, within one
year preceding and after any effectual institution of bankruptcy proceedings by or against a member of the
Borrower; (viii) rights of third parties in Project Revenues converted to cash and not in the possession of the
Trustee; and (ix) claims that might arise if appropriate financing or continuation statements are not filed in
accordance with the Oklahoma Uniform Commercial Code, as applicable, as from time to time in effect.

Pursuant to the Indenture, each member of the Borrower who pledges its Project Revenues under the
Indenture covenants and agrees that, if an Event of Default involving a failure to pay any installment of interest or
principal on a Bond should occur and be continuing, it will deposit daily the proceeds of its Project Revenues. Such
deposits will continue daily until such default is cured. It is unclear whether the covenant to deposit the proceeds of
Project Revenues with the Trustee is enforceable. In light of the foregoing and of questions as to limitations on the
effectiveness of the security interest granted in such Project Revenues, as described above, no opinion will be
expressed by counsel to the members of the Borrower as to enforceability of such covenant with respect to the
required deposits.

An Event of Default on one issue of Bonds secured under the Indenture can cause acceleration of all Bonds
secured thereunder, including the Series 2017 Notes and thus the Series 2017 Bonds. Pursuant to the Indenture,
each member of the Borrower who pledges its Project Revenues under the Indenture covenants and agrees that, if an
Event of Default involving a failure to pay any installment of interest or principal on a Bond should occur and be
continuing, it will deposit daily the proceeds of its Project Revenues. Such deposits will continue daily until such
default is cured.

Environmental Matters

Health care providers are subject to a wide variety of federal, state, and local environmental and
occupational health and safety laws and regulations which address, among other things, health care operations,
facilities and properties owned or operated by health care providers. Among the type of regulatory requirements
faced by health care providers are: (i) air and water quality control requirements; (ii) waste management
requirements, including medical waste disposal; (iii) specific regulatory requirements applicable to asbestos,
polychlorinated biphenyls and radioactive substances; (iv) requirements for providing notice to employees and
members of the public about hazardous materials handled by or located at the clinics; (v) requirements for training
employees in the proper handling and management of hazardous materials and wastes; and (vi) other requirements.

In its role as the owner and operator of properties or facilities, the Borrower may be subject to liability for
investigating and remedying any hazardous substances that may have migrated off of their property. Typical health
care operations include, but are not limited to, in various combinations, the handling, use, storage, transportation,
disposal and discharge of hazardous, infectious, toxic, radioactive, flammable and other hazardous materials, wastes,
pollutants or contaminants. As such, health care operations are particularly susceptible to the practical, financial and
legal risks associated with compliance with such laws and regulations. Such risks may: (i) result in damage to
individuals, property or the environment; (ii) interrupt operations and increase their cost; (iii) result in legal liability,
damages, injunctions or fines; and (iv) result in investigations, administrative proceedings, penalties or other
governmental agency actions. There is no assurance that the Borrower will not encounter such risks in the future,
and such risks may result in material adverse consequences to the operations or financial condition of the Borrower.

45
 At the present time, none of the management of the Borrower is aware of any pending or threatened claim,
investigation or enforcement action regarding such environmental issues which, if determined adversely to the
Borrower, would have a material adverse effect on their operations or financial condition.

Lien for Clean-up of Hazardous Materials

The federal Comprehensive Environmental Response, Compensation and Liability Act (the “Federal
Superfund Act”) provides authority to the United States Environmental Protection Agency (the “EPA”) to arrange
for response actions in the event of a release or substantial threat of release of hazardous substances and also
imposes liability for certain response costs and damages on the present owner (among other parties) of a site of such
release or threat of release. The Federal Superfund Act provides that all costs and damages for which a person is
liable to the United States will constitute a lien upon all real property belonging to such person which is subject to or
affected by the response action. The federal lien is subject to the normal rules of priority.

A Phase I Environmental Site Assessment (or “Phase I”) dated November 20, 2017 was completed for the
Autumn Leaves – SW OKC Community by OGI Environmental LLC. The Phase I included field reconnaissance to
observe surficial conditions and an environmental database review. Based on the results of its assessment, no
evidence of recognized environmental conditions was found.

A Phase I Environmental Site Assessment dated November 21, 2017 was completed for the Autumn
Leaves – Edmond Community by OGI Environmental LLC. The Phase I included field reconnaissance to observe
surficial conditions and an environmental database review. Based on the results of its assessment, no evidence of
recognized environmental conditions was found.

Amendments to Documents

Certain amendments to the Indenture, the Loan Agreement and the Mortgages may be made with the
consent of the owners of a majority of the principal amount of outstanding Senior Bonds (or of Second Tier Bonds,
if no Senior Bonds are then Outstanding). Such amendments may adversely affect the security of the Owners of the
Series 2017 Bonds. See APPENDIX B – “FORMS OF THE PRINCIPAL DOCUMENTS – The Indenture – Article XI.
Modification of Bond Documents.”

Other Legislation

Section 7872 of the Code (Treatment of Loans with Below Market Interest Rates), provides for, in certain
circumstances, the imputation of interest income to a lender when the rate of interest charged by the lender is below
prevailing market rates (as determined under a formula) or, even if the below market interest rate loan would
otherwise be exempt from the provisions of section 7872, when one of the principal purposes for such below market
rate loan is the avoidance of federal income taxation.

Any determination of applicability of section 7872 could have the effect of discouraging potential residents
from becoming or remaining residents of the Communities.

Lack of Marketability for the Series 2017 Bonds

Although the Underwriter intends, but is not obligated, to make a market for the Series 2017 Bonds, there
can be no assurance that there will be a secondary market for the Series 2017 Bonds, and the absence of such a
market for the Series 2017 Bonds could result in investors not being able to resell the Series 2017 Bonds should they
need to do so, or wish to do so.

Bankruptcy

The filing by, or against, the Borrower or the Issuer for relief under the United States Bankruptcy Code (the
“Bankruptcy Code”) would have an adverse effect on the ability of the Trustee and Owners of the Series 2017
Bonds to enforce their claim or claims to the security granted by the Indenture, and their claim or claims to money
owed them as unsecured claimants, if any. The filing would operate as an automatic stay of the commencement or
continuation of any judicial or other proceeding against the Borrower or the Issuer, as applicable, and their
respective property and as an automatic stay of any act or proceeding to enforce a lien against such property.
Moreover, following such a filing the revenues and accounts receivable and other property of the Borrower or the
Issuer, as applicable, acquired after the filing (and under some conditions prior to the filing) would not be subject to
the liens and security interests created under the Indenture. In addition, the bankruptcy court has the power to issue
any order, process or judgment that is necessary or appropriate to carry out the provisions of the Bankruptcy Code;
46
such a court order could require that the property of the Borrower or the Issuer, as applicable, including the
revenues, accounts receivable and Project Revenues of the Borrower and proceeds thereof, could be used for the
benefit of the Borrower, despite the lien and security interest of the Trustee therein.

The amount of the secured claim which could be filed by the Trustee on behalf of the Owners of the Series
2017 Bonds would be limited to the value of the Communities at the time the bankruptcy proceeding was
commenced. This amount would likely be less than the principal amount of the Series 2017 Bonds, since the failure
of the Communities to produce sufficient revenues to pay operating expenses and debt service requirements prior to
the bankruptcy would reduce the value of the Communities. To the extent the principal amount of the Series 2017
Bonds exceeds the value of the Communities, the excess would be an unsecured claim which would rank on a parity
with unpaid management, project, and construction management fees and the claims of unsecured general creditors
of the Borrower. As a result, if the Borrower’s assets were sold following commencement of a bankruptcy
proceeding, it is unclear how much the Owners of the Series 2017 Bonds would receive.

In a bankruptcy proceeding, the debtor could file a plan of reorganization which modifies the rights of
creditors generally, or any class of creditors, secured or unsecured. The Owners of the Series 2017 Bonds may only
receive post-petition interest on the Series 2017 Bonds to the extent the value of their security exceeds their claim.
The plan, when confirmed by the court, binds all creditors who had notice or knowledge of the plan and discharges
all claims against the debtor provided for in the plan.

No plan may be confirmed unless, among other conditions, the plan is in the best interests of creditors, is
feasible and has been accepted by each class of claims impaired thereunder. Each class of claims has accepted the
plan if at least two-thirds in dollar amount and more than one-half in number of the allowed claims of the class that
are voted with respect to the plan are cast in its favor. Even if the plan is not so accepted, it may be confirmed if the
court finds that the plan is fair and equitable with respect to each class of non-accepting creditors impaired
thereunder and does not discriminate unfairly in favor of junior creditors. More particularly, the Bankruptcy Code
would permit the liquidation of the Borrower or the adoption of a reorganization plan for the Borrower or the Issuer,
as applicable, even though such plan had not been accepted by (i) the owners of a majority in aggregate outstanding
principal amount of the Series 2017 Bonds, if the plan is “fair and equitable” and does not discriminate unfairly
against the Owners of the Series 2017 Bonds as a class and is in the “best interest of the creditors”, which may mean
that the Owners of the Series 2017 Bonds are provided with the benefit of their original lien or the “indubitable
equivalent;” or (ii) any owner of the Series 2017 Bonds if the Owners of the Series 2017 Bonds, as a class, are
deemed unimpaired under the plan.

In addition, if the bankruptcy court were to conclude that the Owners of the Series 2017 Bonds have
“adequate protection”, it may (1) substitute other security for the security subject to the lien of the Loan Agreement,
the Indenture and/or the Mortgages or (2) subordinate the lien of the Owners of the Series 2017 Bonds to persons
who supply credit to the Borrower or the Issuer, as applicable, after commencement of the case. In the event of the
bankruptcy of the Borrower or the Issuer, any amount realized by the Trustee or Owners of the Series 2017 Bonds
may depend on the bankruptcy court’s interpretation of “indubitable equivalent” and “adequate protection” under
then-existing circumstances. Any transfers made to the Owners of the Series 2017 Bonds or the Trustee at or prior
to the commencement of the case may be avoided and recaptured if such transfers are (a) avoidable by a judicial lien
creditor who obtained its lien on the date the case commenced (regardless of whether such a creditor actually exists),
(b) preferential or fraudulent or (c) voidable under applicable law by any actual unsecured creditor. The Owners of
the Series 2017 Bonds may also be subject to avoidance and recapture of post-petition transfers, turnover of property
of the debtor which they, the Trustee or a custodian hold and assumption, assignment or rejection of executory
contracts.

Certain judicial decisions have cast doubt upon the right of a trustee, in the event of a health care facility’s
bankruptcy, to collect and retain for the benefit of bondholders portions of revenues consisting of Medicare and
other governmental receivables.

Additional Indebtedness

The Loan Agreement and the Indenture permit the Borrower to incur additional indebtedness, upon
compliance with the provisions thereof, which may be equally and ratably secured with the Series 2017 Notes. Any
such additional parity indebtedness would be entitled to share ratably with the holders of the Series 2017 Notes in
any money realized from the exercise of remedies in the event of a default under the Indenture. The Loan
Agreement and the Indenture also permit the Borrower to incur additional indebtedness, upon compliance with the
provisions thereof, which may be subordinate to the Series 2017 Bonds. The issuance of such additional subordinate
indebtedness could impair the ability of the Borrower to maintain its compliance with certain covenants in the
47
Borrower Documents (as defined in the Indenture). There is no assurance that, despite compliance with the
conditions upon which additional subordinate indebtedness may be incurred at the time such debt is created, the
ability of the Borrower to make the necessary payments to repay the Series 2017 Notes may not be materially
adversely affected upon the incurrence of such additional subordinate indebtedness. See “Security and Sources of
Payment for the Series 2017 Bonds – Issuance of Additional Bonds” and APPENDIX B – “FORMS OF THE PRINCIPAL
DOCUMENTS –The Loan Agreement – Section 6.13. Other Indebtedness.”

Foreclosure Rights under Oklahoma Law

If there is a default under a Mortgage, the Trustee has the right to judicially foreclose on the real property
encumbered thereby, and, pursuant to the Oklahoma Uniform Commercial Code, personal property can be sold at
such a sale as well. After a judgment is entered, the property is sold through a special execution proceeding. The
property must be appraised by three disinterested householders appointed by the sheriff in the County where the
property is located. A notice of foreclosure sale must then be mailed to all interested parties and must be published
for two consecutive weeks in a newspaper of general circulation in the county where the property is located. The
sale date for the property cannot be less than 30 days after the date of first publication. The sale is conducted by the
county sheriff. The property must receive a bid of at least two-thirds of the appraised value determined by the
appointed disinterested householders. The Trustee has the right to credit bid at the foreclosure sale up to the amount
of the debt secured. Upon receipt of the highest bid which meets the minimum two-thirds requirement, the sale is
complete. Upon confirmation of the sale by the court, the sheriff will issue a sheriff’s deed transferring title of the
property to the high bidder. The Borrower and any junior lien holders will have a right to redeem the property at
any time prior to the confirmation of the sale by the court.

The Trustee will also have the option to sell the property through a non-judicial foreclosure process under
the power of sale granted in the Mortgages. Among other statutory requirements, the notice must state the nature of
the default claimed. The Borrower has a right for 35 days from the date the notice is sent to cure the default and
reinstate the mortgage. If Borrower fails to cure the default within the 35 day time period, the Trustee may
accelerate the amount due. If the Borrower is in default more than three times in a 24 month period and has been
notified as provided for above, no right to an additional notice of intent to foreclose will be required prior to
acceleration of the amount due.

If the Borrower fails to cure the default after the notice of intent to foreclose has been delivered, the Trustee
may elect to accelerate the amount due and sell the property under the power of sale granted in the mortgage. If this
election is made, the Trustee must execute a written notice of sale directed to the Borrower and any other party
having an interest, claim or lien of record in the property. The notice of sale must describe the default and state the
date, time and place when the property will be sold. The notice must be personally served in the manner required
for service of process at least thirty 30 days prior to the sale date. The notice must also be published in a newspaper
authorized by law to publish legal notices in the county where the property is located at least one day a week for
four consecutive weeks prior to the sale. The first date of publication cannot be less than 30 days prior to the sale
date. The notice must also be recorded in the office of the county clerk in the county where the property is
located. At the sale, the property will be sold at public auction to the highest bidder. Any person may bid at the
sale. The Trustee may credit bid up to the full amount owed. If a purchaser other than the Trustee is the high
bidder, such person must post cash or certified funds equal to 10% of the amount bid for the property within 24
hours of the sale. The purchaser must complete the transaction within 10 days of the sale or such longer reasonable
time as may be permitted by the Trustee. Upon receipt of full payment from the purchaser, the Trustee will deliver a
deed to the purchaser, without warranty, conveying title to the property. The Borrower will have the right to redeem
the property by paying all principal, interest and other sums secured by the mortgage to the Trustee prior to the
execution and delivery of the deed.

Limited Use Community

The Communities have been specially designed as assisted living and memory care facilities. As a result,
in the event of default and eviction of the Borrower from the Communities, the Trustee’s remedies and the number
of entities that would be interested in purchasing or leasing the Communities might be limited, and the sales price or
fees generated by the Communities might thus be adversely affected.

Uncertainty of Investment Income

The investment earnings of, and accumulations in, certain funds established pursuant to the Indenture have
been estimated and are based on assumed interest rates as indicated. While these assumptions are believed to be
reasonable in view of the rates of return presently and previously available on the types of securities in which the
48
Trustee is permitted to invest under the Indenture there can be no assurance that similar interest rates will be
available on such securities in the future, nor can there be any assurance that the estimated funds will actually be
realized. Guaranteed investment contracts may be entered into with respect to certain of the funds held under the
Indenture. See “ESTIMATED SOURCES AND USES OF FUNDS” herein.

Other Possible Risk Factors

The occurrence of any of the following events, or other unanticipated events, could adversely affect the
operations of the Borrower:

(1) reinstatement or establishment of mandatory governmental wage, rent or price controls;

(2) inability to control increases in operating costs, including salaries, wages and fringe benefits,
supplies and other expenses, given an inability to obtain corresponding increases in revenues from residents whose
incomes will largely be fixed;

(3) unionization, employee strikes and other adverse labor actions which could result in a substantial
increase in expenditures without a corresponding increase in revenues;

(4) adoption of other federal, state or local legislation or regulations having an adverse effect on the
future operating or financial performance of the Borrower;

(5) the cost and availability of energy;

(6) increased unemployment or other adverse economic conditions in the service areas of the
Borrower which would increase the proportion of patients who are unable to pay fully for the cost of their care;

(7) any increase in the quantity of indigent care provided which is mandated by law or required due to
increased needs of the respective communities in order to maintain the charitable status of the Borrower;

(8) inflation or other adverse economic conditions;

(9) changes in tax, pension, social security or other laws and regulations affecting the provisions of
health care and other services to the elderly;

(10) inability to control the diminution of patients’ assets or insurance coverage with the result that the
patients’ charges are reimbursed from government reimbursement programs rather than private payments;

(11) the occurrence of natural disasters, including hurricanes, tornados, volcanic eruptions and
typhoons, floods or earthquakes, which may damage the facilities of the Borrower, interrupt utility service to the
facilities, or otherwise impair the operation and generation of revenues from said facilities; or

(12) cost and availability of any insurance, such as malpractice, fire, automobile and general
comprehensive liability, that organizations such as the Borrower generally carry.

CONTINUING DISCLOSURE

The Borrower will covenant in the Disclosure Dissemination Agent Agreement (the “Disclosure
Agreement”) for the benefit of beneficial owners of the Series 2017 Bonds to provide to Digital Assurance
Certification, L.L.C. (“DAC”), as dissemination agent, for dissemination (i) certain financial information and
operating data relating to the Borrower (referred to as an “Annual Report”) by not later than 150 days following the
end of each Fiscal Year, commencing with the report for the Fiscal Year ending December 31, 2018, (ii) within 45
days after the end of each fiscal quarter of each Fiscal Year, commencing with the fiscal quarter ending March 31,
2018, certain unaudited financial information, occupancy statistics, information on initial Oklahoma State
Department of Health licensure, and information on receipt or loss of exemption from franchise and ad valorem
taxation relating to the Borrower (referred to as a “Quarterly Report”) and (iii) notices of the occurrence of certain
enumerated events (referred to as “Event Notices”). Each Annual Report and Quarterly Report and any Event
Notices can be accessed through DAC’s website at www.dacbond.com, and DAC has also agreed to file such
information, on behalf of the Borrower, with the Municipal Securities Rulemaking Board (“MSRB”), in an
electronic format as prescribed by the MSRB. The MSRB has designated its Electronic Municipal Market Access
system (“EMMA”), found at http://emma.msrb.org, as the sole depository for such disclosure filings. For a
description of the information that is required to be filed in each Annual Report and each Quarterly Report and the
49
list of Event Notices, see Appendix F – “Form of Disclosure Dissemination Agent Agreement.” These covenants
have been made in order to assist the Underwriter in complying with Rule 15c2-12 of the Securities Exchange Act
of 1934.

Compliance with Prior Undertakings

The Borrower is a newly formed entity and has not previously entered into any continuing disclosure
agreements in accordance with SEC Rule 15c2-12.

LITIGATION

The Issuer

There is not now pending or, to the Issuer’s knowledge, threatened any litigation restraining or enjoining
the issuance or delivery of the Series 2017 Bonds or the execution and delivery by the Issuer of the Indenture, or the
Loan Agreement or questioning or affecting the validity of the Series 2017 Bonds or the security therefor or the
proceedings of the Issuer under which they are or are to be issued, respectively.

The Borrower

There is no litigation pending or, to the knowledge of the Borrower, threatened against the Borrower,
wherein an unfavorable decision would (i) adversely affect the ability of the Borrower to acquire, renovate or
operate its facilities or to carry out its obligations under the Indenture or the Loan Agreement, or (ii) would have a
material adverse impact on the financial position or results of operations of the Borrower.

LEGAL MATTERS

Legal matters incident to the authorization, issuance and sale of the Series 2017 Bonds are subject to the
unqualified approval of Bond Counsel. McCall, Parkhurst & Horton L.L.P. has acted in the capacity as Bond
Counsel to the Issuer for the purpose of rendering an opinion with respect to the authorization, issuance, delivery,
legality and validity of the Series 2017 Bonds and for the purpose of rendering an opinion on the exclusion of the
interest on the Tax-Exempt Bonds from gross income for federal income tax purposes and certain other tax matters.
Such firm has not been requested to examine, and has not investigated or verified, any statements, records, material
or matters relating to the financial condition or capabilities of the Borrower or its affiliates, and has not assumed
responsibility for the preparation of this Official Statement, except that, in its capacity as Bond Counsel, such firm
has reviewed the information in this Official Statement under the captions “SHORT STATEMENT – The Issuer”, “–
Security” (other than information relating to the Mortgages or the Title Policies), “Debt Service Reserve Fund”, “–
Rate Covenant”, “– Liquidity Covenant”, “INTRODUCTION – The Issuer,” “ – Security and Sources of Payment for
the Series 2017 Bonds” (other than information relating to the Mortgages), “THE ISSUER”, “THE SERIES 2017
BONDS”, “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” (except under the heading “The
Mortgages”), “TAX MATTERS”, in APPENDIX B – “FORMS OF PRINCIPAL DOCUMENTS (except under the heading
“The Mortgages”),” and in APPENDIX C – “PROPOSED FORM OF OPINION OF BOND COUNSEL.”

Certain matters will be passed upon for the Issuer by its counsel, Skarky Law Firm, PLLC, Oklahoma City,
Oklahoma; for the Borrower by its counsel, Bracewell LLP, Dallas, Texas; and for the Underwriter by its counsel,
Norton Rose Fulbright US LLP, Dallas, Texas.

The various legal opinions to be delivered concurrently with the delivery of the Series 2017 Bonds express
the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein.
In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional
judgment, of the transaction opined upon, or of the future performance of the parties to the transaction, nor does the
rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

TAX MATTERS

Certain Federal Income Tax Considerations

General. The following discussion is a summary of certain expected material federal income tax
consequences of the purchase, ownership and disposition of the Series 2017 Bonds and is based on the Code, the
regulations promulgated thereunder, published rulings and pronouncements of the IRS and court decisions currently
in effect. There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS, has

50
been, or is expected to be, sought on the issues discussed herein. Any subsequent changes or interpretations may
apply retroactively and could affect the opinion and summary of federal income tax consequences discussed herein.

The following discussion is not a complete analysis or description of all potential U.S. federal tax
considerations that may be relevant to, or of the actual tax effect that any of the matters described herein will have
on, particular Owners of the Series 2017 Bonds and does not address U.S. federal gift or estate tax or (as otherwise
stated herein) the alternative minimum tax, state, local or other tax consequences. This summary does not address
special classes of taxpayers (such as partnerships, or other pass-thru entities treated as a partnerships for U.S. federal
income tax purposes, S corporations, mutual funds, insurance companies, financial institutions, small business
investment companies, regulated investment companies, real estate investment trusts, grantor trusts, former citizens
of the U.S., broker-dealers, traders in securities and tax-exempt organizations, individual recipients of Social
Security or Railroad Retirement benefits, taxpayers who may be subject to the branch profits tax or personal holding
company provisions of the Code or taxpayers qualifying for the health insurance premium assistance credit) that are
subject to special treatment under U.S. federal income tax laws, or persons that hold Series 2017 Bonds as a hedge
against, or that are hedged against, currency risk or that are part of hedge, straddle, conversion or other integrated
transaction, or persons whose functional currency is not the “U.S. dollar”. This summary is further limited to
investors who will hold the Series 2017 Bonds as “capital assets” (generally, property held for investment) within
the meaning of Section 1221 of the Code. This discussion is based on existing statutes, regulations, published
rulings and court decisions, all of which are subject to change or modification, retroactively.

As used herein, the term “U.S. Owner” means a beneficial owner of a Series 2017 Bond who or which is:
(i) an individual citizen or resident of the United States, (ii) a corporation or partnership created or organized under
the laws of the United States or any political subdivision thereof or therein, (iii) an estate, the income of which is
subject to U.S. federal income tax regardless of the source; or (iv) a trust, if (a) a court within the U.S. is able to
exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust, or (b) the trust validly elects to be treated as a U.S. person for U.S.
federal income tax purposes. As used herein, the term “Non-U.S. Owner” means a beneficial owner of a Series 2017
Bond that is not a U.S. Owner.

THIS SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND DOES NOT
DISCUSS ALL ASPECTS OF THE U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A
PARTICULAR OWNER OF SERIES 2017 BONDS IN LIGHT OF THE OWNER’S PARTICULAR
CIRCUMSTANCES AND INCOME TAX SITUATION. PROSPECTIVE OWNERS OF THE SERIES 2017
BONDS (INCLUDING OWNERS OF ORIGINAL ISSUE DISCOUNT BONDS) SHOULD CONSULT THEIR
OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT
FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF SUCH SERIES 2017 BONDS BEFORE
DETERMINING WHETHER TO PURCHASE SERIES 2017 BONDS. THE DISCUSSION HEREIN, WHICH
WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE SALE OF THE SERIES 2017
BONDS, IS NOT INTENDED OR WRITTEN TO BE USED BY ANY TAXPAYER TO AVOID PENALTIES
THAT MIGHT BE IMPOSED ON THE TAXPAYER IN CONNECTION WITH THE MATTERS DISCUSSED
THEREIN.

INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX
IMPLICATIONS OF THE PURCHASE, OWNERSHIP OR DISPOSITION OF THE SERIES 2017 BONDS
(INCLUDING OWNERS OF ORIGINAL ISSUE DISCOUNT BONDS) UNDER APPLICABLE STATE OR
LOCAL LAWS, OR ANY OTHER TAX CONSEQUENCE. FOREIGN INVESTORS SHOULD ALSO
CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES UNIQUE TO NON-
U.S. OWNERS.

Information Reporting and Backup Withholding. Subject to certain exceptions, information reports
describing interest income, including original issue discount, with respect to the Series 2017 Bonds will be sent to
each registered Owner and to the IRS. Payments of interest and principal may be subject to backup withholding
under Section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner’s social
security number or other taxpayer identification number (“TIN”), furnishes an incorrect TIN, or otherwise fails to
establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit
against the recipient’s federal income tax. Special rules apply to partnerships, estates and trusts, and in certain
circumstances, and in respect of Non-U.S. Owners, certifications as to foreign status and other matters may be
required to be provided by partners and beneficiaries thereof.

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Future and Proposed Tax Legislation

Tax legislation, administrative actions taken by tax authorities or court decisions, whether at the federal or
state level, may adversely affect the tax-exempt status of interest on the Tax-Exempt Bonds under federal or state
law and could affect the market price or marketability of the Tax-Exempt Bonds. As of the date hereof, legislation
has been introduced in the United States Congress that, if enacted, would make significant changes to the Code,
including, among other provisions, changes to the federal income tax rates for individuals and corporations. Any
such proposal could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt
interest. The likelihood of any such proposal being enacted cannot be predicted. Prospective purchasers of the Tax-
Exempt Bonds should consult their own tax advisors regarding the foregoing matters.

Tax-Exempt Bonds

Opinion. On the date of initial delivery of the Tax-Exempt Bonds, McCall, Parkhurst & Horton L.L.P.,
Dallas, Texas, Bond Counsel to the Issuer (“Bond Counsel”), will render its opinion that, in accordance with
statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”), interest on
the Tax-Exempt Bonds for federal income tax purposes (i) will be excludable from the “gross income” of the
Owners thereof, except for any holder who is treated pursuant to section 147(a) of the Code as a “substantial user”
of the Communities or a “related person” to such substantial user, and (ii) the Tax-Exempt Bonds will not be treated
as “specified private activity bonds” the interest on which would be included as an alternative minimum tax
preference item under section 57(a)(5) of the Code. Except as stated above, Bond Counsel will express no opinion
as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Tax-Exempt
Bonds. See APPENDIX C – “PROPOSED FORM OF OPINION OF BOND COUNSEL.”

In rendering its opinion, Bond Counsel will rely upon (a) the opinion of Bracewell LLP, special counsel to
the Borrower, relating to the qualification of the Borrower as an organization described in Section 501(c)(3) of the
Code, (b) information furnished by the Borrower, and particularly written representations of officers and agents of
the Borrower with respect to certain material facts that are solely within their knowledge relating to the use of the
proceeds of the Tax-Exempt Bonds, and the acquisition and use of the Communities, and (c) covenants of the Issuer
and the Borrower with respect to arbitrage, the application of the proceeds to be received from the issuance and sale
of the Tax-Exempt Bonds and certain other matters. Failure of the Issuer or the Borrower to comply with these
representations or covenants could cause the interest on the Tax-Exempt Bonds to become includable in gross
income retroactively to the date of issuance of the Tax-Exempt Bonds.

The Code and the regulations promulgated thereunder contain a number of requirements that must be
satisfied subsequent to the issuance of the Tax-Exempt Bonds in order for interest on the Tax-Exempt Bonds to be,
and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such
requirements may cause interest on the Tax-Exempt Bonds to be included in gross income retroactively to the date
of issuance of the Tax-Exempt Bonds. The opinion of Bond Counsel is conditioned on compliance by the Issuer and
the Borrower with such requirements, and Bond Counsel has not been retained to monitor compliance with these
requirements subsequent to the issuance of the Tax-Exempt Bonds.

Bond Counsel’s opinion represents its legal judgment based upon its review of Existing Law and the
reliance on the aforementioned information, representations and covenants. Bond Counsel’s opinion is not a
guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and
administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that
Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax
treatment of the purchase, ownership or disposition of the Tax-Exempt Bonds.

A ruling was not sought from the IRS by the either the Borrower or the Issuer with respect to the Tax-
Exempt Bonds or the property financed or refinanced with proceeds of the Tax-Exempt Bonds. No assurances can
be given as to whether or not the IRS will commence an audit of the Tax-Exempt Bonds, or as to whether the IRS
would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures the IRS is
likely to treat the Issuer as the taxpayer and the Owners of the Series 2017 Bonds may have no right to participate in
such procedure.

Federal Income Tax Accounting Treatment of Original Issue Discount Bonds. The initial public offering
price to be paid for one or more maturities of the Tax-Exempt Bonds may be less than the principal amount thereof
or one or more periods for the payment of interest on the Tax-Exempt Bonds may not be equal to the accrual period
or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between (i) the
“stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to the
52
public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price
at maturity” means the sum of all payments to be made on the Tax-Exempt Bonds, less the amount of all periodic
interest payments. Periodic interest payments are payments that are made during equal accrual periods (or during
any unequal period if it is the initial or final period and that are made during accrual periods that do not exceed one
year.)

Under existing law, any U.S. Owner who has purchased such Original Issue Discount Bond in the initial
public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income
with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount
allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see the discussion set
forth below.

In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior
to stated maturity, however, the amount realized by such U.S. Owner in excess of the basis of such Original Issue
Discount Bond in the hands of such U.S. Owner (adjusted upward by the portion of the original issue discount
allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in
gross income.

Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the
stated maturity thereof (in amounts calculated as described below for each accrual period and ratably within each
such accrual period) and the accrued amount is added to an initial owner’s basis for such Original Issue Discount
Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or
other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the
issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated
maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such
Original Issue Discount Bond.

The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of
Original Issue Discount Bonds that are not purchased in the initial offering at the initial offering price may be
determined according to rules that differ from those described above. All owners of Original Issue Discount Bonds
should consult their own tax advisors with respect to the determination for federal, state and local income tax
purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue
Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase,
ownership, redemption, sale or other disposition of such Original Issue Discount Bonds.

Collateral Federal Income Tax Consequences. The following discussion is a summary of certain
collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Tax-Exempt
Bonds. This discussion is based on Existing Law, which is subject to change or modification, retroactively.

The following discussion is applicable to investors, other than those who are subject to special provisions
of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies,
individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income
credit, certain S Corporations with accumulated earnings and profits and excess passive investment income, foreign
Corporations subject to the branch profits tax, taxpayers qualifying for the health insurance premium credit and
taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations.
INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE
CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY
BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-
EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE TAX-EXEMPT
BONDS.

Interest on the Tax-Exempt Bonds will be includable as an adjustment for “adjusted current earnings” to
calculate the alternative minimum tax imposed on corporations by section 55 of the Code.
Under Section 6012 of the Code, U.S. Owners of tax-exempt obligations, such as the Tax-Exempt Bonds,
may be required to disclose interest received or accrued during each taxable year on their returns of federal income
taxation.
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the
disposition of a tax-exempt obligation, such as the Tax-Exempt Bonds, if such obligation was acquired at a “market

53
discount” and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such
treatment applies to “market discount bonds” to the extent such gain does not exceed the accrued market discount of
such bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount
bond” is one which is acquired by the holder at a purchase price which is less than the stated redemption price at
maturity or, in the case of a bond issued at an original issue discount, the “revised issue price” (i.e., the issue price
plus accrued original issue discount). The “accrued market discount” is the amount which bears the same ratio to
the market discount as the number of days during which the holder holds the obligation bears to the number of days
between the acquisition date and the final maturity date.
Series 2017A-2 Bonds

Certain U.S. Federal Income Tax Consequences to U.S. Owners.

Periodic Interest Payments and Original Issue Discount. The Series 2017A-2 Bonds are not
obligations described in Section 103(a) of the Code. Accordingly, the stated interest paid on the Series 2017A-2
Bonds or original issue discount, if any, accruing on the Series 2017A-2 Bonds, will be includable in “gross income”
within the meaning of Section 61 of the Code of each owner thereof and be subject to federal income taxation when
received or accrued, depending upon the tax accounting method applicable to such owner.

Disposition of Series 2017A-2 Bonds. An owner will recognize gain or loss on the redemption,
sale, exchange or other disposition of a Series 2017A-2 Bond equal to the difference between the redemption or sale
price (exclusive of any amount paid for accrued interest) and the owner’s tax basis in the Series 2017A-2 Bonds.
Generally, a U.S. Owners’ tax basis in the Series 2017A-2 Bonds will be the owner’s initial cost, increased by
income reported by such U.S. Owner, including original issue discount and market discount income, and reduced,
but not below zero, by any amortized premium. Any gain or loss generally will be a capital gain or loss and either
will be long-term or short-term depending on whether the Series 2017A-2 Bonds has been held for more than one
year.

Defeasance of the Series 2017A-2 Bonds. Defeasance of any Series 2017A-2 Bond may result in a
reissuance thereof, for U.S. federal income tax purposes, in which event a U.S. Owner will recognize taxable gain or
loss as described above.

Certain U.S. Federal Income Tax Consequences to Non-U.S. Owners. A Non-U.S. Owner that is not
subject to U.S. federal income tax as a result of any direct or indirect connection to the U.S. in addition to its
ownership of a Series 2017A-2 Bond, will not be subject to U.S. federal income or withholding tax in respect of
such Series 2017A-2 Bond, provided that such Non-U.S. Owner complies, to the extent necessary, with
identification requirements including delivery of a signed statement under penalties of perjury, certifying that such
Non-U.S. Owner is not a U.S. person and providing the name and address of such Non-U.S. Owner. Absent such
exemption, payments of interest, including any amounts paid or accrued in respect of accrued original issue
discount, may be subject to withholding taxes, subject to reduction under any applicable tax treaty. Non-U.S.
Owners are urged to consult their own tax advisors regarding the ownership, sale or other disposition of a Series
2017A-2 Bond.

The foregoing rules will not apply to exempt a U.S. shareholder of a controlled foreign corporation from
taxation on the U.S. shareholder’s allocable portion of the interest income received by the controlled foreign
corporation.

Oklahoma Taxes

In the opinion of Bond Counsel, pursuant to Title 74, Oklahoma Statutes 2016, Section 5062.11, as
amended, the Series 2017 Bonds and the income therefrom are exempt from all taxation in the State of Oklahoma,
except for inheritance, estate or transfer taxes.

State, Local and Foreign Taxes

Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership
or disposition of the Series 2017 Bonds under other applicable state or local laws. Foreign investors should also
consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons.

54
 RATINGS

S&P Global Ratings, a division of S&P Global Inc. (“S&P”), has assigned a rating of “A+” with a Stable
Outlook to the Senior Bonds, and a rating of “BBB” with a Stable Outlook to the Second Tier Bonds. Any desired
explanation of the significance of such ratings should be obtained from S&P. Certain information and materials not
included in this Official Statement were furnished to S&P by the Borrower. Generally, rating agencies base their
ratings on the information and materials so furnished and on investigations, studies and assumptions made by the
rating agencies. There is no assurance that a particular rating will be maintained for any given period of time or that
it will not be lowered or withdrawn entirely if, in the judgment of the rating agency originally establishing the rating,
circumstances so warrant. Neither the Underwriter nor the Borrower has undertaken any responsibility either to
bring to the attention of the owners of the Series 2017 Bonds any proposed revision or withdrawal of the ratings of
the Series 2017 Bonds or to oppose any such proposed revision or withdrawal. Any such change in or withdrawal of
any of such ratings, or other actions by a rating agency with respect to its rating on the Series 2017 Bonds, could
have an adverse effect on the market price of the Series 2017 Bonds.

UNDERWRITING

The Series 2017 Bonds are being purchased by Piper Jaffray & Co. (the “Underwriter”), as Underwriter for
a purchase price of $28,982,081.35 (representing the principal amount of the Series 2017 Bonds minus an
underwriter’s discount of $591,471.05 and minus an original issue discount on the Series 2017 Bonds of
$701,477.60) pursuant to a Bond Purchase Agreement, entered into among the Underwriter, the Issuer and the
Borrower (the “Bond Purchase Agreement”).

Pursuant to the Bond Purchase Agreement, the Borrower has agreed to indemnify the Underwriter and the
Issuer against certain liabilities. The Underwriter reserves the right to join with dealers and other underwriters in
offering the Series 2017 Bonds to the public. The obligations of the Underwriter to accept delivery of the Series
2017 Bonds are subject to various conditions contained in the Bond Purchase Agreement. The Bond Purchase
Agreement provides that the Underwriter will purchase all of the Series 2017 Bonds if any Series 2017 Bonds are
purchased.

The Underwriter may engage in other transactions with the Borrower, including transactions related to the
investment of proceeds of the Series 2017 Bonds, in which it could earn additional compensation.

Moreover, the Underwriter is a full service financial institution engaged in various activities, which may
include sales and trading, commercial and investment banking, advisory, investment management, investment
research, principal investment, hedging, market making, brokerage and other financial and non-financial activities
and services. The Underwriter has provided, and may in the future provide, a variety of these services to the
Borrower and to persons and entities with relationships with the Borrower, for which it received or will receive
customary fees and expenses.

In the ordinary course of its various business, the underwriter, and its officers, directors and employees may
purchase, sell or hold array of investments and actively trade securities, derivatives, loans, commodities, currencies,
credit default swaps and other financial instruments for their own account and for the accounts of their customers,
and such investment and trading activities may involve or relate to assets, securities and/or instruments of the
Borrower and/or persons and entities with relationships with the Borrower. The Underwriter may also communicate
independent investment recommendations, market color or trading ideas and/or publish or express independent
research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients
that they should acquire, long and/or short positions in such assets, securities and instruments.

MISCELLANEOUS

The references herein to the Act, the Indenture, the Loan Agreement, the Mortgages and other materials are
only brief outlines of certain provisions thereof and do not purport to summarize or describe all the provisions
thereof. Reference is hereby made to such instruments, documents and other materials, copies of which will be
furnished by the Trustee upon request for further information.

Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated,
are intended as such and not as representations of fact.

The attached Appendices A through F are integral parts of this Official Statement and should be read in
their entirety together with all of the foregoing statements.

55
 It is anticipated that CUSIP identification numbers will be secured for the Series 2017 Bonds, but neither
the failure to print such numbers on any Series 2017 Bond nor any error in the printing of such numbers will
constitute cause for a failure or refusal by the purchaser thereof to accept delivery of or pay for any Series 2017
Bonds.

The information assembled in this Official Statement has been supplied by the Borrower and other sources
believed to be reliable, and, except for the statements under the heading “INTRODUCTION – The Issuer” and “THE
ISSUER” herein and information relating to the Issuer under the heading “LITIGATION – The Issuer” herein, the Issuer
makes no representations with respect to nor warrants the accuracy of such information. The Borrower has agreed
to indemnify the Issuer and the Underwriter against certain liabilities relating to this Official Statement.

* * *

56
 APPENDIX A

THE BORROWER
 TABLE OF CONTENTS
Page

OVERVIEW ............................................................................................................................................................ A-1

Leading Life Senior Living, Inc. ...................................................................................................................... A-1
GOVERNANCE...................................................................................................................................................... A-1
Board of Directors ............................................................................................................................................ A-1
Conflicts of Interest .......................................................................................................................................... A-2
ACQUISITION OF THE COMMUNITIES............................................................................................................ A-2
Purchase And Sale Agreement ......................................................................................................................... A-2
MANAGEMENT OF THE COMMUNITIES......................................................................................................... A-2
The Manager..................................................................................................................................................... A-2
The Management Agreements .......................................................................................................................... A-5
Employees ........................................................................................................................................................ A-6
THE COMMUNITIES ............................................................................................................................................ A-6
General ............................................................................................................................................................. A-6
Autumn Leaves of Edmond .............................................................................................................................. A-7
Autumn Leaves of Southwest Oklahoma City ................................................................................................. A-8
Property Condition Assessments ...................................................................................................................... A-9
Historical Occupancy of the Communities ....................................................................................................... A-9
RESIDENT AGREEMENTS ................................................................................................................................ A-10
Financial Assistance ....................................................................................................................................... A-11
COMPETITION AND SERVICE AREA ............................................................................................................. A-12
PROJECTED FINANCIAL INFORMATION ...................................................................................................... A-12
OTHER FINANCIAL AND REGULATORY MATTERS .................................................................................. A-12
Licensure ........................................................................................................................................................ A-12
Operating and Capital Budgeting ................................................................................................................... A-12
Employee Benefits ......................................................................................................................................... A-12
Property Taxes ................................................................................................................................................ A-13
Consulting Agreement .................................................................................................................................... A-13
Environmental ................................................................................................................................................ A-13
Litigation ........................................................................................................................................................ A-13

A-i
 OVERVIEW

Leading Life Senior Living, Inc.

Leading Life Senior Living, Inc. (the “Borrower”), is a Texas nonprofit corporation formed on February
14, 2017 for the sole purpose of owning and operating facilities to provide independent living, assisted living,
memory care and skilled nursing opportunities for the growing elderly population. The Borrower’s mission is to
provide high quality elder care services and facilities to senior citizens living in the United States (the “Mission”).
The Borrower received its initial determination letter from the Internal Revenue Service (the “IRS”) for its tax-
exempt status effective April 24, 2017 (the “Determination Letter”), to the effect that the Borrower is an
organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), and
can reasonably be expected to be a publicly supported organization described in Section 509(a)(2) of the Code and
not a private foundation.

The Borrower has conducted no operations to date and has no significant assets. The Borrower does not
intend to acquire any substantial assets or engage in any substantial business activities other than those related to the
acquisition ownership and operation of two stand-alone properties: Autumn Leaves of Edmond (“Edmond”) and
Autumn Leaves of Southwest Oklahoma City (“SW Oklahoma City” and, together with Edmond, the
“Communities”), both located in the Oklahoma County. The Communities consist of 86 rental memory care units
with 100 memory care licensed beds. As of October 31, 2017, 83 of the 86 rental memory care units at the
Communities were occupied.

The Borrower is the only entity obligated to pay debt service on the Series 2017 Bonds.

GOVERNANCE

Board of Directors

The Borrower is governed by its Board of Directors (the “Board”). The Borrower’s bylaws provide that
the directors of the Board (the “Directors”) have the authority to carry out all of the purposes of the Borrower as set
forth in the Borrower’s certificate of formation. The number of Directors on the Board is permitted to be increased
or decreased from time to time, however, the Board is required to be comprised no less than three Directors at all
times. Currently, the Board consists of three Directors. The initial Directors of the Board are required to be re-
elected (or successors be chosen) at the first annual meeting of the Board that will be held in the first quarter of
2018. The current Directors expect to remain as members of the Board, in the same capacities as listed below,
following the first annual meeting. Thereafter, each Director shall hold office for a term of two years. Directors
may serve any number of consecutive terms if re-elected.

No changes or modifications to the Borrower’s certificate of formation or bylaws may be made without the
approval of a majority of the Directors. The Board currently consists of the following Directors:

Robert “Bob” W. Mosteller, Chairman and Director, (46), is the Chairman of the Board of Directors of
the Borrower. Mr. Mosteller brings over 20 years of business experience, with CFO and COO leadership roles in
venture capital, financial services, logistics and commercial construction. Currently, Mr. Mosteller serves as the
CFO and operating partner of the Dallas-based investment firm called Silver Creek Ventures, where he is
responsible for the operations, finance, accounting and administrative functions for their investment funds and
works closely with their portfolio companies to assist in budgeting, reporting, raising equity and bank related capital,
and M&A. Additionally, he has successfully raised numerous bank and equity financings in both the Texas and
Silicon Valley markets. Mr. Mosteller is also currently the CFO for Talari Networks, Inc., the market leader in SD-
WAN technology. Mr. Mosteller earned his Bachelor’s degree in accounting from Texas A&M University and
resides in Dallas, Texas.

Brian Barnes, Director, Secretary, (50), is the Secretary of Board of Directors of the Borrower. Mr.
Barnes has over 25 years’ experience in audit/finance and executive management. His experience includes
managing numerous public and private company audits, private equity financing transactions, and numerous
merger/acquisition transactions. For the past 13 years, Mr. Barnes has managed the finances and operations at
Legacy Senior Living Communities, Inc., including responsibility for the oversight and management of all business
operations as well as all finance/accounting and human resource functions. During his tenure, the company
successfully completed the tax-exempt bond financed construction of a continuing care retirement community, the

A-1
sale and purchase transactions of two skilled nursing facilities, the management and successful divestiture of a HUD
202 senior living property, and the launch of a Medicare-certified home health agency. In addition, the company
recently completed a successful refinancing of its outstanding bonds and secured an investment grade rating of its
operations. Mr. Barnes received a Bachelor’s Degree in Accounting and graduated with honors from Texas Tech
University in 1989 and is a Certified Public Accountant.

Matt M. Wilson, Director, (42), is the founder of Murdock and serves as the President and CEO, focusing
on delivering consulting services to senior living care providers through the development and implementation of
integrated strategies. Prior to Murdock, Mr. Wilson was the Executive Vice President for Sales and Marketing at
Total Lifestyle Communities in Santa Barbara, California. With Total Lifestyle Communities, he was responsible
for new business development and led the marketing and sales oversight for marketing consulting engagements. Mr.
Wilson also spent 5 years at Greystone Communities in Dallas, Texas, where he was responsible for occupancy
development of numerous senior living communities and for providing consultation for third-party marketing
agreements. Prior to joining Greystone in 2002, Mr. Wilson was a wealth manager at Morgan Stanley, responsible
for coordinating and implementing complex financial planning and risk management, strategies for retail and
institutional clients while managing in excess of $60 million. Mr. Wilson has over 10 years’ experience in sales
focused on individuals aged 62 and over. Mr. Wilson received a B.A. in Economics and a minor in Psychology
from Southern Methodist University.

Conflicts of Interest

From time to time, the Borrower may conduct business transactions with organizations or corporations with
which one or more members of the Board may be affiliated. The Borrower has a conflict of interest policy that
requires that any transaction with an actual or possible conflict of interest be disclosed by the interested person. The
interested person must disclose all material facts to the Board, and after any discussion between the Board and the
interested person, the interested person shall leave the meeting while the Board makes a determination of a conflict
of interest.

ACQUISITION OF THE COMMUNITIES

Purchase And Sale Agreement

The Communities will be acquired by the Borrower on the date of issuance of the Series 2017 Bonds (the
“Closing Date”) with proceeds of the Series 2017 Bonds from the owners of the real and personal property
comprising the Communities pursuant to separate Agreements of Purchase and Sale, both dated October 25, 2017,
for a total purchase price of $25,500,000, subject to customary closing adjustments.

MANAGEMENT OF THE COMMUNITIES

The Manager

The Borrower will enter into a management agreement for each Community, each dated and effective as of
the issue date of the Series 2017 Bonds (together, the “Management Agreements”), and each with TLG Family
Management, LLC (the “Manager”) to manage the operations of the Communities. The Manger is the current
manager of the Communities and has managed the Communities since their inception. Members of the management
team of the Manager will report to the Board on a regular basis.

The Manager is headquartered in Irving (Las Colinas), Texas, was incorporated in 2008 and currently has a
corporate personnel of approximately 100 employees. In addition to operating the Communities, the Manager
operates all of the “Autumn Leaves” communities which include 44 other memory care communities throughout
Florida, Georgia, Kansas, Illinois, Missouri, Oklahoma, South Carolina, Texas, and Wisconsin.

A-2
 TABLE 1
THE MANAGER’S EXPERIENCE

Number
Name Location Opened Occupancy
of Units
(3)
Autumn Leaves of Franklin WI 56 2018 N/A
Autumn Leaves of Lee’s Summit MO 56 2018(3) N/A
Autumn Leaves of Sarasota FL 56 2018(3) N/A
Autumn Leaves of Venice FL 56 2018(3) N/A
Autumn Leaves of Fort Mill(1) SC 54 2017 52%
Autumn Leaves of Greenville(1) SC 54 2017 48%
Autumn Leaves of Overland Park(1) KS 54 2017 44%
Autumn Leaves of South Austin(1) TX 56 2017 33%
Autumn Leaves of Windward(1) GA 52 2017 30%
Autumn Leaves of Amarillo(1) TX 56 2016 81%
Autumn Leaves of Estero(1) FL 56 2016 22%
Autumn Leaves of Westover Hills(1) TX 54 2016 39%
Autumn Leaves of Arlington Heights IL 46 2015 85%
Autumn Leaves of Georgetown TX 46 2015 96%
Autumn Leaves of Glen Ellyn IL 50 2015 91%
Autumn Leaves of Gurnee IL 46 2015 74%
Autumn Leaves of Southwest Oklahoma City OK 46 2015 96%
Autumn Leaves of Edmond OK 44 2014 98%
Autumn Leaves of Bolingbrook IL 42 2014 63%
Autumn Leaves of Cinco Ranch TX 46 2014 78%
Autumn Leaves of South Barrington IL 50 2014 72%
Autumn Leaves of Stockbridge GA 48 2014 87%
Autumn Leaves of Stone Oak TX 46 2014 81%
Autumn Leaves of Towne Lake GA 50 2014 70%
Autumn Leaves of Arlington TX 50 2013 67%
Autumn Leaves of Flower Mound TX 46 2013 67%
Autumn Leaves of Memorial City TX 50 2013 54%
Autumn Leaves of Sugarloaf GA 50 2013 78%
Autumn Leaves of Vernon Hills IL 46 2013 67%
Autumn Leaves of Clear Lake TX 46 2012 76%
Autumn Leaves of Crystal Lake IL 50 2012 88%
Autumn Leaves of Cy-Fair TX 46 2012 100%
Autumn Leaves of Meyerland TX 46 2012 61%
Autumn Leaves of Oswego IL 50 2012 72%
Autumn Leaves of Rockwall TX 48 2012 78%
Autumn Leaves of St. Charles IL 50 2012 83%
Autumn Leaves of Cypresswood TX 52 2011 78%(4)
Autumn Leaves of Pearland TX 50 2011 74%
Autumn Leaves of Riverstone TX 45 2011 63%
Autumn Leaves of Tulsa OK 50 2011 65%
Autumn Leaves of Cityview TX 46 2010 74%
Autumn Leaves of Orland Park IL 46 2010 77%
Autumn Leaves of Woodlands TX 46(5) 2010 100%
Autumn Leaves of Carrollton TX 44 2002 67%
Total Portfolio 2,177 77%(2)

(1) As of October 27, 2017, the community is in lease-up status.

(2) Excludes communities that are in lease-up status as of October 27, 2017, are under construction or that are currently closed due to Hurricane Harvey damage.
(3) Community is currently under construction with licensure pending and is not currently accepting residents.
(4) Occupancy prior to Hurricane Harvey. Community is currently closed due to damage from Hurricane Harvey (September 2017) and expected to re-open in
February 2018.
(5) Community has requested a capacity increase to 52 units.

The key staff of the Manager are set forth below:

Mitchell W. Warren, Chairman, CEO and Co-Owner, (36), focuses on overall corporate strategy,
leadership development, diversification, long-term planning, and overseeing the creation of the Manager’s goals and
budgets. Mr. Warren also spends much of his time working with and building relationships with the residents,
residents’ families, and staff at the Manager’s communities. He has over 15 years of experience in the senior living
business. Mr. Warren joined the Manager on a part-time basis in 2000 as a Project Manager. He helped oversee
several of the Manager’s initial senior living projects. In 2003, Mr. Warren started full time as Vice President of
Development, where he helped found the design, development, and construction divisions of the Manager, and

A-3
created and drove the business model for expanding the Autumn Leaves® Memory Care Assisted Living brand. In
2008, Mr. Warren became Chief Executive Officer and Co-Owner of the Manager. He graduated from the
University of Michigan with a bachelor of arts degree in political science (and additional concentrations in electrical
engineering, business, and technical theater).

Melvin W. Warren, Jr., Chairman Emeritus and Co-owner, (75), was one of the founders of the Manager
opening the first Autumn Leaves community in Arlington, Texas in 2000. Mr. Warren has over 40 years of
experience in business and real estate, including founding a business consulting firm that provided services to
Fortune 500 companies, and acting as president of both Warren Real Estate and Town & Country Management. Mr.
Warren graduated from Michigan State University with a bachelor of arts in business administration and marketing
and a masters in economics.

John W. Barbee, President, (55), has more than 30 years’ experience in real estate development and
construction, and 10 years’ experience with the Manager specifically in senior assisted living. Since 2017, as
President, Mr. Barbee leads the execution of the Manager’s strategic business and financial partnerships while
overseeing certain aspects of the Manager’s daily operations and serving as an added resource to the company’s
officers and employees at the home office and in the field. Within two years of joining the Manager, he advanced to
the role of Vice President of Construction, and in 2012, Mr. Barbee’s responsibilities were expanded to include Vice
President of Design and Development. In 2013, he was promoted to Executive Vice President of Real Estate. Since
1999, and prior to joining the Manager, Mr. Barbee was president of Barbee Enterprises, providing commercial
general contracting and custom home building services. He attended Taft Community College in California and
Steven F. Austin State University.

Randy Brown, Chief Financial Officer, (60), oversees all finance and accounting functions for the
Manager, including lender relationships, loan originations, equity fund raising, investor reporting, cash management,
budgeting and forecasting, asset performance and tax planning. His responsibilities include investment management,
investor relations, recapitalization, development, loan origination, acquisition and dispositions, coordinating and
monitoring the timely year-end audit process and tax return preparation. Mr. Brown ensures compliance with all
accounting standards and monitors compliance with the Manager’s policies and procedures. His expertise includes
finance and accounting for property management, leasing, development, construction, and acquisitions. Mr. Brown
earned a bachelor of science degree in business administration and accounting at Texas A&M University and
received his designation as a Certified Public Accountant from the Texas State Board of Public Accountancy.

Kim Higgins Alleman, Chief Administrative Officer, (62), oversees human resources, information
technology, risk and legal for the Manager. Ms. Alleman has more than 25 years’ executive corporate experience
and has administrative oversight over more than 1,500 employees. She is responsible for cultivating employee input
and communicating the Manager’s culture, mission, and values. Ms. Higgins earned her bachelor of science degree
and conducted post graduate studies in organizational development from Oklahoma State University.

Anna Callender, Associate Vice President and Regional Director of Operations, (40), assists executive
leadership with long-term, operational initiatives, including strategy, planning, and implementation. As the Regional
Director of Operations, Ms. Callender also has full operational and budgetary responsibility for the Manager’s
communities. Her experience encompasses regional and divisional leadership roles in sales, marketing, life
enrichment and programming, and operations for Emeritus Senior Living, as well as Hearthstone Assisted Living
and Angelus Retirement Communities. Ms. Callender is a Certified Dementia Practitioner by the National Council
of Certified Dementia Practitioners, as well as a member of the Alzheimer’s Association Speakers Bureau for the
Houston and Southeast Texas Chapter.

Schekesia Meadough, Associate Vice President of Health and Wellness, (38), is responsible for
establishing and directing nursing services for the Manager’s communities nationwide. This includes development
and implementation of training of the health care team across the organization, as well as review and evaluation of
nursing protocols and administrative procedures. Ms. Meadough joined the Manager in 2015 as a regional director
of healthcare, bringing more than two decades of experience in both clinical practice and education. Her prior
experience includes nurse surveyor for the Texas Department of Aging and Disability Services; regional program
director and faculty member for Kaplan Higher Education; and evaluator for the National Association of Credential
Evaluation Services. A registered nurse, Ms. Meadough holds both a bachelor’s degree and an associate’s degree in
nursing from Kaplan University.

A-4
 Karon Porter, Associate Vice President of Sales, (56), is responsible for development and management of
the Manager’s sales program, including sales team coaching and training. Ms. Porter joined the Manager in August,
2017, bringing more than 30 years of experience in marketing and managing senior living communities. Having
worked for Brookdale, Sagora Senior Living, Senior Lifestyle Corporation, and other national and regional
providers, Ms. Porter has experience with memory care, skilled nursing and independent and assisted living.

The Management Agreements

Pursuant to the Management Agreements, the Manager will be the exclusive agent for the management of
the Communities. The Manager will be responsible for the following: (i) hiring and compensation of employees;
(ii) management of employee benefits; (iii) implementation and operation of the accounting system, including
billing, collections, accounts payable and payroll; (iv) preparation of an annual budget to be approved by the
Borrower; (v) preparation of fee and rate schedules, subject to annual approval by the Borrower; (vi) supervising
and conducting a facility maintenance program; (vii) purchasing supplies; (viii) the administration and scheduling of
all the Communities’ services; (ix) administering the Resident Agreements (as described herein); (x) obtaining and
maintaining required insurance policies; (xi) administering service contracts; (xii) making recommendations for
capital improvements; (xiii) the implementation of an employee incentive program; and (xiv) the marketing of beds
that are unoccupied, including advertising, selection of media and production of brochures, in accordance with the
approved annual budget.

Under the Management Agreements, the Manager will be paid an annual fee for each fiscal year equal to
5% of the gross revenues of the Communities, which fee will be paid monthly based on the unaudited financial
statements of the Borrower for the preceding month. Beginning in calendar year 2019, if the Manager is compliance
with the calendar year 2018 approved budget, the Manager will be entitled to a 0.75% increase in the annual fee for
a total of 5.75%. Beginning calendar year 2020, if the Manager is in compliance with the calendar year 2019
approved budget, the Manager will be entitled to an additional 0.75% increase in the annual fee for a total of 6.5%.
The annual fee shall never exceed 6.5%.

The Manager is also eligible to receive an annual employee incentive program payment in an amount equal
to 8% of the positive difference between the gross revenues in the approved annual budget and the actual gross
revenues received for such year; provided, the total employee incentive program payment shall not exceed 2% of the
gross revenue actually received in such year and shall only be paid if the Manager is in compliance with the
approved budget.

The initial term of each of the Management Agreements is three years. The Borrower may terminate a
Management Agreement immediately upon the occurrence of the following events: (a) the Manager fails to
properly account for monies, make deposits in a timely manner or fails to make any payments of money payable and
due to the Borrower pursuant to such Management Agreement, and such failure continues for a period of fifteen (15)
days after the Manager’s receipt of written notice thereof from the Borrower; (b) the Manager fails to maintain an
occupancy level of 80% or greater of the budgeted census of 46 licensed beds at such Community, and such failure
continues for a period of sixty days after Manager’s receipt of written notice thereof from the Borrower (c) the
Manager fails to generate net operating income, defined as gross revenue less operational expenses excluding
depreciation, amortization and debt service, at the Community sufficient to produce the required debt service
coverage requirements of the Loan Agreement, which as of the Effective Date is 1.05 to 1.00, plus thirty (30) days
of cash on hand sufficient to fund all expenses necessary to operate and maintain the Community (d) to keep,
observe, or perform any other provisions of such Management Agreement required of the Manager, and such failure
continues for a period of thirty days after the Manager’s receipt of written notice thereof from the Borrower; (e) the
Manager is found by a state or federal court to have engaged in fraud, willful misrepresentation or gross negligence
in its management of the Community or in performing its obligations to the Borrower under such Management
Agreement; (f) the Manager breaches its covenant not to compete within a five mile radius of the Community, or (g)
the Manager files for or is involuntarily placed under protection of the federal bankruptcy laws of the United States;
or (e) sale of the property of the Community by the Borrower.

The Manager may terminate a Management Agreement upon the occurrence of the following events: (a) the
Borrower fails to make or cause to be made any payment to the Manager required to be made hereunder, or to make
any payment pursuant to any other agreement between the parties, and such failure continues for a period of thirty
days after the Borrower’s receipt of written notice thereof from the Manager; or (b) the Borrower fails to keep,
observe or perform any provision of such Management Agreement required of the Borrower, and such failure

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continues for a period of forty-five days after Borrower’s receipt of written notice thereof from the Manager, or if
such breach is not susceptible to cure within said forty-five day period, if the Borrower has not commenced to cure
within said forty-five day period, and proceeded diligently to prosecute such cure to completion.

The payment of fees to the Manager under the Management Agreements is subordinated to the payment of
debt service on the Series 2017 Bonds to the extent that money in the Revenue Fund is insufficient in any month to
make all current and deferred deposits (other than deposits to the Surplus Fund as provided in the Indenture). The
Manager’s fees are also required to be deferred if the Debt Service Coverage Ratio is less than the Coverage Test or
the Liquidity Requirement is not met as of any Testing Date, or an event of default under the Indenture or any
Borrower Document has occurred and is continuing. Notwithstanding the foregoing, pursuant to the Indenture, any
Deferred Management Fee must be paid within five years of the original due date of such fee unless a Favorable
Opinion of Bond Counsel is delivered to the effect that such payment is not required. The payment of such regular
fees and any deferred fees will be made in accordance with the Indenture.

Employees

As of October 31, 2017, 79 people were employed by the Manager at the Communities as follows:

TABLE 3
EMPLOYEES AT THE COMMUNITIES
Communities Full-Time Part-Time
Edmond 29 9
SW Oklahoma City 35 6
Total 64 15
There are currently no unions organized by employees at the Communities, and the Borrower believes the
relationship between the Manager and the employees is good. Historically, the Communities have not experienced
significant difficulty in attracting and retaining employees. Upon the acquisition of the Communities, it is expected
that the Manager will keep the number of employees stable by retaining all of the current employees after the
Borrower’s acquisition of the Communities.

THE COMMUNITIES

General

The Borrower intends to acquire two stand-alone memory care properties in Oklahoma City and Edmond,
Oklahoma. The Communities, which are currently branded Autumn Leaves® Memory Care Assisted Living,
consist of 86 memory care units that include 100 licensed memory care beds. The Edmond community was opened
in 2014 and the SW Oklahoma City community was opened in 2015, both as new construction. The average
monthly occupancy of Edmond and SW Oklahoma as of October 31, 2017 was 92.7% and 98.3%, respectively. The
average unit size is 273 square feet, and each property can accommodate 50 residents. The number of units and
beds at each of the Communities is as follows:

TABLE 4
THE COMMUNITIES – UNIT AND BED MIX
Community
Units Budgeted Beds
Edmond 42 46(1)
SW Oklahoma City 44 46(1)
Total 86 92
(1) Each Community is licensed for 50 beds but budgets to operate 46 beds.

[Remainder of Page Intentionally Left Blank]

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Autumn Leaves of Edmond

Autumn Leaves of Edmond is located at 1001 South Bryant Avenue in Edmond, Oklahoma, approximately
12 miles northeast of downtown Oklahoma City, 23 miles northeast from Will Rogers World Airport, and within
approximately one mile of Oklahoma Medical Center Edmond. The building consists of approximately 28,800
square feet and features individual resident suites as well as common living and dining areas.

The Edmond Community is located on approximately 4.5 acres in close proximity to retail, medical offices,
a hospital, office parks, a high school, single family homes and multifamily housing.

The following table summarizes the type, number, approximate square footage and monthly fees for the
units at the Edmond Community.

TABLE 5
EDMOND COMMUNITY CONFIGURATION
No. of
No. of Budgeted Square
Type Units Beds Footage Monthly Fee(1)(2)(3)
Memory Care Units:
Studio 2 2 205 $6,145
Standard 12 12 239 $6,455
Large with Shower 16 16 301 $6,685
Large (No Shower) 4 4 316 $6,685
Private – Shared Bath 4 4 255 $5,665
Semi-Private 4 8 430 $5,125
Total Units/Beds/Weighted Average(5) 42 46(4) 288 $6,242
______________________
(1) The second person fee is $2,000 per month.
(2) In addition to the Monthly Fee, each resident is required to pay a one-time community fee of $2,500.
(3) All-inclusive rate. No level of care fees.
(4) Each Community is licensed for 50 beds, but budgets to operate 46 beds.
(5) Weighted Average for square footage is calculated using the number of units, weighted average for monthly fee is calculated using the
number of budgeted beds.

[Remainder of Page Intentionally Left Blank]

A-7
 Autumn Leaves of Southwest Oklahoma City

Autumn Leaves of Southwest Oklahoma City is located at 2232 SW 104th Street, in Oklahoma City,
Oklahoma, approximately 15 miles southwest of downtown Oklahoma City, eight miles southeast from Will Rogers
World Airport, and within six miles of Integris Southwest Medical Center. The building consists of approximately
28,300 square feet and includes a mix of individual resident suites and common living and dining areas.

The SW Oklahoma City Community is located on approximately 3.9 acres in close proximity to residential,
business, retail and leisure facilities, including several golf courses.

The following table summarizes the type, number, approximate square footage and monthly fees for the
units at the SW Oklahoma City Community.

TABLE 6
SOUTHWEST OKLAHOMA CITY COMMUNITY CONFIGURATION
No. of Avg.
No. of Budgeted Square
Type Units Beds Footage Monthly Fee(1)(2)(3)
Memory Care Units:
Standard 14 14 225 $5,895
Large with Shower 16 16 285 $6,350
Large (No Shower) 4 4 285 $5,975
Private – Shared Bath 8 8 225 $5,550
Semi-Private 2 4 397 $4,950
Total Units/Beds/Weighted Average(5) 44 46(4) 260 $5,918
______________________
(1) The second person fee is $2,000 per month.
(2) In addition to the Monthly Fee, each resident must pay a one-time community fee of $2,500.
(3) All-inclusive rate. No level of care fees.
(4) Each Community is licensed for 50 beds, but budgets to operate 46 beds.
(5) Weighted Average for square footage is calculated using the number of units, weighted average for monthly fee is calculated using the
number of budgeted beds.

[Remainder of Page Intentionally Left Blank]

A-8
Property Condition Assessments

A property condition assessment for each of the Communities was completed by OGI Environmental, LLC
on November 28, 2017 (collectively, the “Condition Assessments”). The Condition Assessments found that the
condition of each of the Communities is good, with consideration given to the age of the building components and
the apparent tenant mix. Assuming that a preventative/remedial maintenance program is implemented and
maintained on a regular basis, and all site, systems and building components are replaced as necessary with an
acceptable standard of care in the prescribed time frames, the Condition Assessments concluded that each of the
Communities estimated remaining useful life should extend to at least an additional 35 years, barring any natural
disasters.

The Condition Assessment for the Edmond Community did not identify any code or life safety issues,
though deferred maintenance or an item beyond its useful life that is considered significant and requires immediate
repair was identified at the Edmond Community with an aggregate expense of $2,500. This maintenance item called
for the cleaning out of trash and debris from storm water retention areas. The Condition Assessments identified
required capital projects expected to be needed over the next 12 years, including concrete drive and parking repairs,
exterior painting, common area finishing replacement and painting, resident floor finishes, and resident room hard
and soft goods. The total cost of these projects for the next 12 years, not taking inflation into account, is estimated
at approximately $137,582.

The Condition Assessment for the SW Oklahoma City Community identified a code or life safety issue,
which consists of is adding one van-accessible parking stall, signage and accessible route, at an expense of $250.
An item of deferred maintenance or an item beyond its useful life that is considered significant and requires
immediate repair was identified at the SW Oklahoma City Community with an aggregate expense of $2,750. This
maintenance item called for filling or repairing visible cracks in a retaining wall. The Condition Assessments
identified required capital projects expected to be needed over the next 12 years, including concrete drive and
parking repairs, exterior painting, common area finishing replacement and painting, resident floor finishes, and
resident room hard and soft goods. The total cost of these projects for the next 12 years, not taking inflation into
account, is estimated at approximately $144,183.

Based upon this, the Conditions Assessment recommended that a replacement reserve of approximately
$275 per unit per year be established. The Replacement Reserve Amount to be deposited into the Repair and
Replacement Fund in monthly installments under the Indenture is equal to $23,650 per year, which is $275
multiplied by 86, the total number of units in the Communities. See “SECURITY AND SOURCES OF PAYMENT FOR
THE SERIES 2017 BONDS – Repair and Replacement Fund” in the forepart of this Official Statement.

The foregoing is only a summary of the Condition Assessments. The Condition Assessments are subject to
certain assumptions and qualifications as stated therein.

Historical Occupancy of the Communities

The following table summarizes the historical utilization of the memory care units of the Communities.

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 TABLE 7
COMMUNITY UTILIZATION
Historical Average Occupancy
YTD October
Fiscal Year Ended December 31, 2017
2014 2015 2016 2017(4)
By Individual Community:
Edmond(1) 72.6% 89.9% 86.8% 92.4%
SW Oklahoma City(2) N/A 62.0% 93.5% 99.3%

Combined Communities:
Avg. Beds Available(5) 46.0 84.3 92.0 92.0
Avg. Beds Occupied(5) 33.4 65.1 82.9 88.2
Total Occupancy 72.6% 77.2% 90.1% 95.9%
Source: Manager
______________________
(1) Community opened March, 2014.
(2) Community opened March, 2015.
(3) Each Community is licensed for 50 beds but budgets to operate 46 beds.
(4) Occupancy as of October 31, 2017 is 97%
(5) Occupancy is based on budgeted beds (46 per Community).

RESIDENT AGREEMENTS

To reserve a memory care unit, a prospective resident must execute a Resident Agreement (the “Resident
Agreement”), which reserves the right of the prospective resident to occupy the selected memory care unit. There is
no minimum age requirement but all residents must have a diagnosis of cognitive impairment and be able to be
cared for within the scope of services offered by the Communities under its assisted living license (the “Resident”).
Because of the lack of capacity of the Resident, the contract is executed by the Resident’s personal representative
referred to as the “Responsible Party.” The term of the Resident Agreement is month-to-month and will
automatically renew unless terminated by either the respective Community or the Resident as described herein.
Upon occupancy, Residents are expected to pay a one-time, non-refundable community fee of $2,500 and an
ongoing monthly fee (the “Monthly Fee”). There is a single level of care in the Communities. All rates are
inclusive of all available services subject to the excluded services contained in the Resident Agreement (including,
but not limited to, home health, hospice and other third-party providers).

Payment of the Monthly Fee entitles the Resident to occupy the selected memory care unit and receive the
following services and amenities:

• Monitoring – the Manager, through its staff, shall regularly monitor the Resident’s health status to
identify any changes in the Resident’s physical, mental, emotional and social functioning. the
Manager will summon emergency medical services to assist the Resident by calling “911” or
otherwise summon appropriate medical services personnel. Each Community will also assist
Resident with evacuation, if necessary.

• Assistance with Activities of Daily Living – As needed, the Manager will make available to the
Resident assistance with dressing, grooming, bathing, feeding and administration of medication
and other activities of daily living, to the extent allowed by applicable state law.

• Assistance with Storage and Administration of Medications – Through its staff, the Manager will
assist the Resident with storage and administration of medications to the extent allowed by state
law and in accordance with the medication policy.

• Nursing Supervision – Nursing supervision will be provided to residents based on their individual
needs. A registered nurse will provide nursing supervision of skilled nursing interventions when
needed to ensure all Resident’s needs are met. Home health and hospice nursing services may be
utilized to meet these needs.

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 • Intermittent or Unscheduled Nursing Care – Intermittent or unscheduled nursing care will be
provided to Resident as needed to meet their needs unless these services are required twenty four
hours per day. Home health and hospice nursing services may be utilized to meet these needs.

• Assistance with Cognitive Orientation, Transfer and/or Ambulation – Through its staff, the
Manager will assist the Resident with cognitive orientation, transfer and/or ambulation.

• Meals and Snacks – Three nutritionally well balanced meals per day are included with the
standard fee. Modified meals for special diets will be available to the Resident if prescribed by the
Resident’s physician as a medical necessity. Snacks are available to the Resident at all times.

• Housekeeping – the Manager will provide basic daily housekeeping services including cleaning of
common areas and resident’s private unit and bath.

• Laundry – The Manager will provide laundry service (wash, fold, return to Resident’s Room) for
personal clothes and linens.

• Activities – To meet the Residents’ physical, social, mental and spiritual needs, the Manager will
provide a full program of activities on a daily basis. The Resident will be provided with the use of
the common areas such as living rooms/TV rooms, lounges, craft rooms, library, meeting rooms
and outside courtyards (when weather permits).

In addition to the items included in the standard fee, certain services are available to Residents at an
additional cost including, but not limited to, medications, vitamins, eye glasses, eye examinations, hearing aids, ear
examinations, dental work, dental examinations, orthopedic appliances, laboratory tests, x-ray services, any
rehabilitative therapies (physical, occupation, or speech), podiatry services, IV therapy, oxygen therapy, equipment
rentals, in-room utilities such as private phone or cable, barber/beauty shop appointments, incontinence supplies,
and personal hygiene supplies (e.g. shampoo, soap, toothbrush). Staff at each Community can assist residents in
arranging third party providers for these services.

Prior to admission, the Community Director of Health Care at each of the Communities will conduct a
“Resident Assessment” (the “Assessment”) of the prospective resident to determine the degree of personal
assistance and care needed by the Resident. The Assessment assists the Communities in determining appropriate
placement in the memory care setting. The Communities charge a fixed monthly fee that will not change due to
Resident’s level of required care, but may be adjusted once annually upon thirty days’ written notice to the
Responsible Party, in accordance with the Resident Agreement.

Each Community will perform regular assessments of its Residents to evaluate the appropriateness of the
Residents’ placement and care needs.

If, at any time, the Borrower or a Resident’s physician determines that a Resident is in need of care that
exceeds the scope of services provided at the Community, the Resident Agreement will be terminated with written
notice to the Responsible Party, in accordance with Oklahoma State Department of Health requirements. If
requested by the Resident, the respective Community will assist the Resident in finding an alternative living
arrangement. The Resident Agreement may be terminated by the Resident upon 30 days’ written notice without
cause. Conversely, the Communities may only terminate the Resident Agreement upon 30 days’ written notice if
any of the following occur: (i) nonpayment of the Monthly Fee or additional charges for services requested by the
Responsible Party within 30 days of due date, (ii) for medical reasons and the welfare of the Resident when the
Manager is no longer able to adequately care for the Resident, and (iii) if the Resident or any person associated with
Resident is engaging in behavior which threatens the Resident’s or other residents’ or staff’s mental and/or physical
health or safety.

Financial Assistance

If a resident of the Communities can no longer pay the applicable monthly fees in full or in part due to a
lack of funds for reasons beyond the control of the resident, the Borrower may subsidize, in whole or in part, the
monthly fees and other charges to the extent the Borrower deems such help financially feasible. The Borrower will
review the circumstances with the resident and/or the Resident’s family. If accepted, the Borrower may approve

A-11
financial consideration and assistance for the resident in its sole discretion. Residents requesting financial assistance
from the Borrower will be required to apply for such federal, state, and local government financial assistance for
which such resident may be eligible.

The Borrower has also agreed that beginning on January 1, 2019, no less than 20% of the total number of
units at each of the Communities shall at all times be rented to and occupied by low income tenants. See “SECURITY
AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Affordability Covenant” in the forepart of this Official
Statement.

COMPETITION AND SERVICE AREA

Information with respect to the service area and competition related to each Community can be found under
the caption “Descriptions of the Communities and Characteristics of the Market Areas” in the Feasibility Study,
which is attached as APPENDIX D to this Official Statement. The Feasibility Study should be read in its entirety,
including the notes and assumptions set forth therein. See APPENDIX D to this Official Statement.

PROJECTED FINANCIAL INFORMATION

Information with respect to the projected future financial and operating performance of the Borrower can
be found in the Feasibility Study, which is attached as APPENDIX D to this Official Statement.

Forecasted results usually differ from actual results because events and circumstances frequently do not
occur as expected, and those differences may be material. The Feasibility Study should be read in its entirety,
including the notes and assumptions set forth therein. See APPENDIX D to this Official Statement. See also
“CERTAIN BONDHOLDERS’ RISKS – Financial Projections” in the forepart of this Official Statement.

OTHER FINANCIAL AND REGULATORY MATTERS

Licensure

On November 14, 2017, the Borrower submitted an application (the “Application”) to the Oklahoma State
Department of Health (“OSDH”) to obtain a license (the “New Licenses”) for each of the Communities to operate
an assisted living center as required by the Continuum of Care and Assisted Living Act, Title 319, Chapter 663 of
the Oklahoma Statutes (the “Act”). The seller’s existing licenses are not transferable under Oklahoma law, however,
the Borrower anticipates that the New Licenses will be issued and effective as of the issue date of the Bonds. If the
Borrower has not received its New License from OSDH prior to the date of issuance of the Series 2017 Bonds, the
Borrower will enter into the Transfer Agreement with the Seller under which the Borrower will be permitted by the
Seller to manage the Communities under the Seller’s license until the Borrower has received its New License. See
“CERTAIN BONDHOLDERS’ RISKS – Licensing Delay” in the forepart of this Official Statement.

Operating and Capital Budgeting

The budgetary plan for the Communities will be adopted annually by the Board. The Manager will be
responsible for preparing the operating and capital budgets after which they will be reviewed by the Borrower. The
resulting budget plan will be presented by the Manager to the Board for review, modification and final approval.

The Manager will monitor financial performance on a monthly basis, comparing actual performance to
budget. Significant variances will be analyzed and corrective actions developed and implemented. The Board will
receive the financial statements on a monthly basis, including management’s discussion concerning occupancy and
significant variances to budget.

Employee Benefits

Employees at the Communities may elect life insurance, medical, dental and vision benefits. the cost of
these benefits are shared by the employer and employee. The Manager expects to continue to offer these benefits to
employees of the Communities.

A-12
Property Taxes

The Borrower currently anticipates that the Communities will receive an exemption from ad valorem
property taxes; however, there is no guarantee that the Borrower will receive such exemption. A deed is required to
start the application process.

The Seller owed and paid approximately $130,000 of real and tangible personal property taxes on the
Communities for the 2016 tax year. Upon acquisition of the Communities, the Borrower will file an application for
exemption from property taxes, which provides for an exemption from taxation for real and tangible personal
property owned by certain charitable organizations.. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES
2017 BONDS – Insurance and Tax Escrow Fund” in the forepart of this Official Statement.

Consulting Agreement

The Borrower has engaged McFarlin Group, LLC, a Texas limited liability company, (the “Consultant”) to
perform services relating to the acquisition, due diligence gathering and review, advisory and related services
relating to the acquisition of the Communities. The Borrower will pay the Consultant a consulting fee of one
percent (1.0%) of the purchase price (the “Consulting Fee”) of the Communities which fee is currently estimated at
$255,000. Additionally, the Consultant has provided funds in an amount not to exceed $400,000 to pay for pre-
finance expenditures (e.g., due diligence related costs and expenses, earnest money payments, etc.) (the “Seed
Capital”) for the acquisition of the Communities. As additional compensation, the Consultant will earn a one
hundred percent (100.0%) return (the “Seed Capital Return”) on the Seed Capital. The Consulting Fee and Seed
Capital Return are due upon the issuance of the Series 2017 Bonds.

Environmental

A Phase I Environmental Site Assessment was conducted on November 21, 2017 for the Edmond
Community and November 20, 2017 for the SW Oklahoma City Community (collectively, the “Environmental
Assessments”) by OGI Environmental LLC. The Environmental Assessments included review of local, state and
federal records and review of the past uses of the sites. The Environmental Assessments revealed no evidence of
recognized environmental conditions at the sites and determined that no further environmental studies related to the
scope of work of such assessments were needed at this time The Environmental Assessments will not necessarily
reveal all potential environmental issues and are subject to certain assumptions and limitations set forth therein.

Litigation

The Borrower will likely be, from time to time, subject to claims and suits for damages, all of which are
expected to be subject to coverage as to risk and amount by commercial insurance policies that will be obtained by
the Borrower upon its acquisition of the Communities. Currently, the Borrower is not involved in any pending
litigation or settlement negotiations.

In addition, the Borrower is not currently being challenged as to its status as a 501(c)(3) organization, nor
are they aware of any threatened challenge to such status.

* * *

A-13
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 APPENDIX B

FORMS OF THE PRINCIPAL DOCUMENTS

[This page intentionally left blank.]
 TABLE OF CONTENTS

(This Table of Contents is not a part of this

Loan Agreement and is only for convenience of reference)

PAGE

ARTICLE I DEFINITIONS AND INTERPRETATION ............................................................................................ 4 

Section 1.1  Definitions. ..................................................................................................................................... 4 
Section 1.2.  Rules of Construction ..................................................................................................................... 4 
ARTICLE II REPRESENTATIONS........................................................................................................................... 5 
Section 2.1.  Representations and Covenants of the Issuer. ................................................................................. 5 
LOAN AGREEMENT Section 2.2.  Representations and Covenants of the Borrower. ........................................................................... 5 
Section 2.3.  Special Purpose Entity Covenants. ................................................................................................. 7 
Dated as of December 1, 2017 Section 2.4.  Representations and Covenants of the Trustee. .............................................................................. 8 
Section 2.5.  Special Arbitrage Certifications. ..................................................................................................... 8 
Section 2.6.  Tax Exempt Status of Tax-Exempt Bonds. ..................................................................................... 9 
among Section 2.7.  (Intentionally Omitted). .................................................................................................................. 9 
Section 2.8.  Tax Representations, Covenants and Warranties of Borrower. ...................................................... 9 
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY, ARTICLE III ISSUANCE OF BONDS; LOAN TO BORROWER; RELATED OBLIGATIONS ......................... 18 
as Issuer Section 3.1.  Issuance of Series 2017 Bonds; Deposit of Proceeds.................................................................... 18 
Section 3.2.  The Loan; Loan Payments; and Additional Payments. ................................................................. 18 
UMB BANK, N.A., Section 3.3.  Obligations Unconditional; Limited Recourse .............................................................................. 20 
Section 3.4.  Assignment of Issuer’s Rights ...................................................................................................... 21 
as Trustee Section 3.5.  Amounts Remaining in Funds....................................................................................................... 21 
Section 3.6.  Borrower Required To Pay if Project Fund Insufficient ............................................................... 21 
and Section 3.7.  Security for Payments Under the Series 2017 Bonds.................................................................... 21 
Section 3.8.  Warranty of Title........................................................................................................................... 22 
LEADING LIFE SENIOR LIVING, INC., Section 3.9.  Title Insurance. ............................................................................................................................. 22 
as Borrower Section 3.10.  Borrower’s Covenants Regarding Title. ....................................................................................... 22 
ARTICLE IV THE PROJECT .................................................................................................................................. 24 
Section 4.1.  Acquisition of the Project. ............................................................................................................ 24 
Section 4.2.  Disbursement of Project Account. ................................................................................................ 24 
Relating to Section 4.3.  Operating Expenses ...................................................................................................................... 24 
Section 4.4.  Rate Covenant; Coverage.............................................................................................................. 25 
$30,275,000 Section 4.5.  Failure To Meet Rate Covenant; Retention of Management Consultant ...................................... 25 
The Oklahoma Development Finance Authority Section 4.6.  Maintenance and Modification of Project; Removal of Equipment .............................................. 26 
Senior Living Revenue Bonds Section 4.7.  Management of the Project ........................................................................................................... 28 
Section 4.8.  Forbearance and Deferral of Fees ................................................................................................. 28 
(Leading Life Senior Living, Inc. – Autumn Leaves Project) Section 4.9.  Taxes and Impositions. ................................................................................................................. 28 
Section 4.10.  Utilities.......................................................................................................................................... 29 
Consisting of: Section 4.11.  Hazardous Waste Covenant .......................................................................................................... 29 
Section 4.12.  Needs Assessment Analysis. ......................................................................................................... 30 
$14,640,000 Series 2017A-1 Section 4.13.  Trade Payables Covenant .............................................................................................................. 31 
$3,240,000 Taxable Series 2017A-2 Section 4.14.  Liquidity Covenant ....................................................................................................................... 31 
$12,395,000 Second Tier Series 2017B Section 4.15.  Approval of Management Consultants.......................................................................................... 32 
Section 4.16.  Maintenance of Rating .................................................................................................................. 32 
Section 4.17.  Rating Application ........................................................................................................................ 32 
Section 4.18.  Affordability Covenant ................................................................................................................. 32 
The interest of The Oklahoma Development Finance Authority in this Loan Agreement (except for ARTICLE V INSURANCE; DAMAGE, DESTRUCTION AND CONDEMNATION; SALE OF FACILITIES;
Reserved Rights of the Issuer) has been assigned to UMB Bank, N.A. (the “Trustee”) under the Trust USE OF NET PROCEEDS ......................................................................................................................................... 34 
Indenture of even date herewith, and is subject to the security interest of the Trustee. Section 5.1.  Required Insurance ....................................................................................................................... 34 
Section 5.2.  Delivery of Insurance Policies; Payment of Premiums ................................................................. 34 
Section 5.3.  Insurance Proceeds........................................................................................................................ 35 
Section 5.4.  Disbursement of Insurance Proceeds and Condemnation Awards ................................................ 36 
1

Section 5.5.  Report of Insurance Consultant; Insurance Commercially Unavailable. ...................................... 37  LOAN AGREEMENT
Section 5.6.  Obligation to Continue Payments ................................................................................................. 38 
Section 5.7.  Insufficiency of Net Proceeds ....................................................................................................... 38  THIS LOAN AGREEMENT, dated as of December 1, 2017 (this “Loan Agreement”), is by and
Section 5.8.  Cooperation of Issuer .................................................................................................................... 38  among THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY, a public trust of the State of
Section 5.9.  Sale of Facilities ............................................................................................................................ 38 
Oklahoma (together with its successors, the “Issuer”), UMB BANK, N.A., as Trustee (the “Trustee”), a
ARTICLE VI OTHER AGREEMENTS ................................................................................................................... 39 
Section 6.1.  Successor to Issuer ........................................................................................................................ 39  national banking association organized and existing under and by virtue of the laws of the United States of
Section 6.2.  Servicing the Loan; Servicing Agreement .................................................................................... 39  America having an office and a place of business in Dallas, Texas, in its capacity as Trustee under the
Section 6.3.  Assignment, Selling and Leasing .................................................................................................. 39  Indenture described below, and LEADING LIFE SENIOR LIVING, INC., a Texas nonprofit corporation
Section 6.4.  Continued Existence ..................................................................................................................... 40  created and existing under the laws of the State of Texas (the “Borrower”).
Section 6.5.  Indemnification ............................................................................................................................. 40 
RECITALS:
Section 6.6.  Recording and Filing..................................................................................................................... 43 
Section 6.7.  Nonrecourse to Representatives of Issuer ..................................................................................... 44  WHEREAS, the Borrower has requested the assistance of the Issuer to finance the acquisition,
Section 6.8.  Amendment of Borrower Documents ........................................................................................... 44  rehabilitation and equipping of two memory care facilities located in the cities of Oklahoma City and
Section 6.9.  Financial Statements and Reports ................................................................................................. 44  Edmond in the State of Oklahoma (the “Project”).
Section 6.10.  Budget ........................................................................................................................................... 45 
Section 6.11.  Notices of Certain Events ............................................................................................................. 46  WHEREAS, the Issuer is a public trust created by a Declaration of Trust dated November 1, 1974,
Section 6.12.  Inspection of Project Books; Right of Access ............................................................................... 46  as amended (the “Original Declaration”), for the furtherance of public purposes and the benefit of the State
Section 6.13.  Other Indebtedness........................................................................................................................ 46  of Oklahoma pursuant to the provisions of Title 60, Oklahoma Statutes 2016, Section 176 et seq., as
Section 6.14.  Advances By Trustee .................................................................................................................... 47  amended, and Title 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended (collectively, the “Trust
Section 6.15.  (Intentionally Omitted) ................................................................................................................. 47  Act”), and other applicable statutes and laws of the State of Oklahoma, such Original Declaration being
Section 6.16.  Related Party Transactions............................................................................................................ 47 
further amended by an Amended and Restated Declaration of Trust dated February 11, 1988, which, among
Section 6.17.  Purchase of Tax-Exempt Bonds .................................................................................................... 48 
Section 6.18.  Release of Certain Land and Subordination; Granting of Easements ........................................... 48 
other things, changed the name of the Issuer from The Oklahoma Development Authority to The Oklahoma
Section 6.19.  Excess Surplus Fund Amount Certificate ..................................................................................... 49  Development Finance Authority, such Restated Declaration being accepted and approved by the Governor
ARTICLE VII DEFAULTS AND REMEDIES ........................................................................................................ 50  of Oklahoma on February 12, 1988, the most recent amendment to the Original Declaration having occurred
Section 7.1.  Defaults ......................................................................................................................................... 50  in 1994 under the provisions of an Amended and Restated Declaration of Trust dated July 1, 1994, which
Section 7.2.  Notice of Default: Opportunity to Cure ........................................................................................ 50  was approved by the Governor of Oklahoma on August 5, 1994; and
Section 7.3.  Remedies ....................................................................................................................................... 51 
Section 7.4.  No Remedy Exclusive................................................................................................................... 52  WHEREAS, the Issuer is authorized to issue bonds in accordance with the Trust Act and Title 74,
Section 7.5.  Attorney’s Fees and Expenses. ..................................................................................................... 52  Oklahoma Statutes 2016, Section 5062.1 et seq., as amended (together with the Trust Act, the “Act”), and
Section 7.6.  No Additional Waiver Implied by One Waiver ............................................................................ 52  to use the proceeds thereof for financing all or part of the cost of certain projects, including health care
ARTICLE VIII OPTIONS TO TERMINATE AGREEMENT ................................................................................. 53  facilities; and
Section 8.1.  Grant of Option To Terminate ...................................................................................................... 53 
WHEREAS, in order to provide such assistance, the Issuer has provided for the issuance, pursuant
Section 8.2.  Exercise of Option To Terminate .................................................................................................. 53 
ARTICLE IX MISCELLANEOUS ........................................................................................................................... 54  to a Trust Indenture dated the date hereof (the “Indenture”), by and between the Issuer and the Trustee, of
Section 9.1.  Confidential Information............................................................................................................... 54  the Bonds, including the Series 2017 Bonds, as identified in the Indenture; and
Section 9.2.  Entire Agreement .......................................................................................................................... 54  WHEREAS, under this Loan Agreement, the Issuer shall lend the proceeds of the Series 2017
Section 9.3.  Notices .......................................................................................................................................... 54  Bonds to the Borrower and the Borrower is obligated to make loan payments sufficient to pay the principal
Section 9.4.  Assignments .................................................................................................................................. 54 
of, premium, if any, and interest on the Series 2017 Bonds; and
Section 9.5.  Severability ................................................................................................................................... 54 
Section 9.6.  Execution of Counterparts ............................................................................................................ 54  WHEREAS, in order to evidence the obligation to make loan payments sufficient to pay the
Section 9.7.  Rights of Trustee ........................................................................................................................... 54  principal of, premium, if applicable, and interest on the Series 2017 Bonds pursuant to this Loan Agreement,
Section 9.8.  Amendments, Changes and Modifications.................................................................................... 54  the Borrower has agreed to execute and deliver to the Issuer its promissory notes for each Series of Series
Section 9.9.  Governing Law ............................................................................................................................. 54 
2017 Bonds in an original aggregate principal amount equal to the aggregate principal amount of the Series
Section 9.10.  Term of Agreement ....................................................................................................................... 54 
Section 9.11.  No Liability of Issuer’s Officers ................................................................................................... 55 
2017 Bonds in substantially the forms attached hereto as Exhibit D (the “Series 2017 Notes”); and
Section 9.12.  Receipt of and Compliance With Indenture .................................................................................. 55  WHEREAS, the Bonds issued under the Indenture will be secured by an assignment and pledge of
Section 9.13.  Usury; Total Interest ..................................................................................................................... 55  all right, title and interest of the Issuer in and to this Loan Agreement (except for Reserved Rights of the
Section 9.14.  Survival. ........................................................................................................................................ 55  Issuer) and the Series 2017 Notes, by the two Mortgage with Power of Sale and Security Agreements
ARTICLE X LIMITATIONS ON LIABILITY ........................................................................................................ 56 
relating to each of the two facilities comprising the Project, each dated as of December 1, 2017 (collectively,
Section 10.1.  Limitation on Liability of the Issuer; Issuer May Rely ................................................................. 56 
Section 10.2.  Delivery of Reports, Etc................................................................................................................ 57 
the “Mortgages”), each by the Borrower to the trustee named therein, for the benefit of the Trustee;

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 NOW, THEREFORE, for and in consideration of the mutual agreements hereinafter contained, and ARTICLE II
for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows: REPRESENTATIONS
ARTICLE I
Section 2.1. Representations and Covenants of the Issuer. The Issuer represents and covenants
that:
DEFINITIONS AND INTERPRETATION
(a) The Issuer is a public trust of the State of Oklahoma. Pursuant to a resolution adopted by
Section 1.1 Definitions. All capitalized terms used herein and defined in the Indenture shall
the Governing Body of the Issuer, the Issuer has authorized the execution and delivery of the Bonds, the
have the meanings ascribed to them in the Indenture, unless otherwise defined herein.
Indenture and the other Bond Documents to which it is a party, and the performance by the Issuer of all of
Section 1.2. Rules of Construction. In this Loan Agreement, unless the context otherwise its obligations hereunder and under the Bonds and the other Bond Documents to which it is a party. The
requires: Bond Documents to which it is a party constitute valid, legal, binding, and enforceable obligations of the
(a) The singular form of any word used herein, including the terms defined in Section 1.01 of Issuer (subject to bankruptcy, insolvency or creditor rights laws generally, and principles of equity
the Indenture, shall include the plural, and vice versa. The use herein of a word of any gender shall include generally).
correlative words of all genders. (b) The Issuer has found and determined that the issuance of the Bonds under the Indenture
(b) Unless otherwise specified, references to Articles, Sections and other subdivisions of this and the acquisition, rehabilitation and equipping of the Project by the Borrower will further the purposes of
Loan Agreement are to the designated Articles, Sections and other subdivisions of this Loan Agreement as the Act.
originally executed. The words “hereof,” “herein,” “hereunder” and words of similar import refer to this (c) The Issuer has full power and authority to consummate all transactions described in the
Loan Agreement as a whole. Bonds and the Bond Documents, and to perform all of its obligations hereunder and thereunder.
(c) The headings or titles of the several articles and sections, and the table of contents appended (d) The Issuer has not pledged and covenants that it will not pledge the amounts derived from
to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction this Loan Agreement other than to secure the Bonds (except for Reserved Rights, which the Issuer retains).
or effect of the provisions hereof.
Section 2.2. Representations and Covenants of the Borrower. The Borrower hereby represents
and covenants as follows:
(a) The Borrower is a Texas nonprofit corporation created and existing under the laws of the
State of Texas, is in good standing and is duly qualified to transact business in the State of Oklahoma, is
not in violation of any provision of its Organizational Documents, has power to enter into and perform its
obligations under the Borrower Documents and has duly authorized the execution and delivery of the
Borrower Documents. The Bond Documents to which it is a party constitute valid, legal, binding, and
enforceable obligations of the Borrower (subject to bankruptcy, insolvency or creditor rights laws generally,
and principles of equity generally).
(b) Neither the execution and delivery of the Borrower Documents to which it is a party, the
consummation of the transactions described herein and therein, nor the fulfillment of or compliance with
the terms and conditions thereof conflict with or result in a breach of the terms, conditions, or provisions
of the Borrower’s Organizational Documents or any material restriction or any material agreement or
instrument to which the Borrower is now a party or by which the Borrower is bound, or constitutes a default
under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Borrower under the terms of any instrument or
agreement except as provided in the Borrower Documents.
(c) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or
by any court, public board or body, pending or, to the best knowledge of the Borrower, threatened against
or affecting the Borrower, nor to the best of the knowledge of the Borrower is there any basis therefor,
wherein an unfavorable decision, ruling, or finding would materially and adversely affect the transactions
described in the Bond Documents or which would adversely affect, in any way, the validity or enforceability
of the Bonds or the Bond Documents or any material agreement or instrument to which the Borrower is a
party used or contemplated for use in the consummation of the transactions, contemplated hereby.
(d) The Project is of the type authorized and permitted by the Act.

4 5

(e) The Borrower will not take or permit to be taken any action which would have the effect, (o) The Borrower (1) has not entered into the Loan or any Borrower Document with the actual
directly or indirectly, of causing interest on any of the Tax-Exempt Bonds to be includable in gross income intent to hinder, delay, or defraud any creditor and (2) received reasonably equivalent value in exchange
of the Owners thereof for purposes of federal income taxation. for its obligations under the Borrower Documents. Giving effect to the transactions described in the
Borrower Documents, the fair saleable value of the Borrower’s assets exceeds and will, immediately
(f) The Borrower will use due diligence to cause the Project to be acquired and operated in
following the execution and delivery of the Borrower Documents, exceed the Borrower’s contingent
accordance with the laws, rulings, regulations and ordinances of the State of Oklahoma and the departments,
liabilities. The fair saleable value of the Borrower’s assets is and will, immediately following the
agencies and political subdivisions thereof. The Borrower has obtained or will cause to be obtained all
execution and delivery of the Borrower Documents, be greater than the Borrower’s probable liabilities,
requisite approvals of the State of Oklahoma and of other federal, state, regional and local governmental
including the maximum amount of its contingent liabilities, or its debts as such debts become absolute and
bodies for the acquisition and operation of the Project. The Borrower has acquired good title to the Project.
mature. The Borrower’s assets do not and, immediately following the execution and delivery of the
(g) The Borrower agrees to fully and faithfully perform all the duties and obligations that the Borrower Documents, will not constitute unreasonably small capital to carry out its business as conducted
Issuer has covenanted and agreed in the Indenture to cause the Borrower to perform and any duties and or proposed to be conducted. The Borrower does not intend to, and does not believe that it will, incur
obligations that the Borrower or the Issuer is required by the Indenture to perform. The foregoing shall not debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its
apply to any duty or undertaking of the Issuer, which by its nature, cannot be delegated or assigned. ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in
(h) The Borrower agrees to provide to the Issuer all information necessary to enable the Issuer respect of obligations of the Borrower).
to complete and file all forms and reports required by the laws of the State of Oklahoma and the Code in (p) The Borrower is not (1) an “investment company” or a company “controlled” by an
connection with the Project and the Bonds. “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (2)
(i) The Borrower acknowledges, represents, and warrants that it understands the nature and subject to any other federal or state law or regulation that purports to restrict or regulate its ability to borrow
structure of the transactions relating to the financing of the Project; that it is familiar with the provisions of money.
all of the documents and instruments relating to such financing to which it or the Issuer is a party or of (q) The Project is not located in a flood hazard area as defined by the Federal Insurance
which it is a beneficiary; that it understands the risks inherent in such transactions, including without Administration.
limitation the risk of loss of the Project; and that it has not relied on the Issuer for any guidance or expertise
(r) To the Borrower’s knowledge, there is no proceeding threatened or pending for the total or
in analyzing the financial or other consequences of such financing transactions or otherwise relied on the
partial condemnation, appropriation, or recapture of any material portion of the Project that would
Issuer in any manner except to issue the Bonds in order to provide funds to lend to the Borrower.
materially affect the Borrower’s performance under the Borrower Documents, or the use, value, or
(j) The Permitted Encumbrances do not materially and adversely affect (1) the ability of the operation of the Project.
Borrower to pay in full the principal of and interest on the Series 2017 Notes when due or (2) the use of the
(s) All security deposits collected in connection with the Project are being held (i) in
Project for the use currently being made thereof, the operation of the Project as currently being operated or
accordance with all applicable laws and (ii) in a segregated eligible account.
the value of the Project.
(t) To the Borrower’s knowledge, the Project is (1) free and clear of any damage that would
(k) The Borrower (1) has no knowledge of any material liability that has been incurred or is
materially and adversely affect the use or value of the Project as security for the Loan, (2) in good repair
expected to be incurred by the Borrower that is or remains unsatisfied for any taxes or penalties with respect
and condition so as not to materially and adversely affect the use or value of the Project as security for the
to any employee benefit plan, within the meaning of Section 3(3) of the Employment Retirement Income
Loan, and (3) all building systems contained therein are in good working order so as not to materially and
Security Act of 1974, as amended (“ERISA”), or any “plan,” within the meaning of section 4975(e)(1) of
adversely affect the use or value of the Project as security for the Loan.
the Code or any other benefit plan (other than a multiemployer plan) maintained, contributed to, or required
to be contributed to by the Borrower or by any entity that is under common control with the Borrower (u) The Borrower, or Bond Counsel at the direction of the Borrower, will ensure that Internal
within the meaning of ERISA Section 4001(a)(14) (a “Plan”) or any plan that would be a Plan but for the Revenue Form 8038 is duly filed, which shall contain the information required to be filed pursuant to section
fact that it is a multiemployer plan within the meaning of ERISA Section 3 (37); and (2) has made and shall 149(e) of the Code.
continue to make when due all required contributions to all such Plans, if any. Each such Plan, if any, has
Section 2.3. Special Purpose Entity Covenants. The Borrower agrees as follows:
been and will be administered in compliance with its terms and the applicable action shall be taken or fail
to be taken that would result in the disqualification of loss of tax-exempt status of any such Plan intended (a) To maintain books and records separate from any other person or entity;
to be qualified and/or tax-exempt. (b) To maintain its accounts separate from any other person or entity;
(l) The Borrower has no known material contingent liabilities. (c) Not to commingle its assets with those of any other entity;
(m) The Borrower has no material financial obligation under any indenture, mortgage, deed of (d) To conduct its own business in its own name;
trust, loan agreement, or other agreement or instrument to which the Borrower is a party or by which the
Borrower or the Project is otherwise bound, other than obligations incurred in connection with the (e) To maintain separate financial statements;
acquisition of the Project or in the ordinary course of the operation of the Project and other than obligations (f) To pay its own liabilities out of its own funds;
under the Mortgages and the other Bond Documents.
(g) To observe all applicable business organization formalities;
(n) The Borrower has not borrowed or received other debt financing that has not been
heretofore repaid in full.
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 (h) To pay the salaries of its own employees and maintain a sufficient number of employees connection with the Tax-Exempt Bonds, whether such money was derived from the proceeds of
in light of its contemplated business operations; the sale of the Tax-Exempt Bonds or from any other source, will not be used in a manner that will
cause the Tax-Exempt Bonds to be classified as “arbitrage bonds,” within the meaning of
(i) Except as otherwise permitted by the Bond Documents, not to guarantee or become
section 148 of the Code. In furtherance of this covenant, the Issuer covenants to comply with the
obligated for the debts of any other entity or hold out its credit as being available to satisfy the obligations
terms set forth in this Loan Agreement.
of others;
Section 2.6. Tax Exempt Status of Tax-Exempt Bonds. The Borrower shall not take
(j) Except as otherwise permitted by the Bond Documents, not to acquire obligations of its
any action or omit to take any action which, if taken or omitted, respectively, would adversely
partners, members or shareholders;
affect the excludability of interest on the Tax-Exempt Bonds from the gross income, as defined in
(k) To allocate fairly and reasonably any overhead for shared office space; section 61 of the Code, of the owners thereof for federal income tax purposes. The Borrower and
(l) To use separate stationery, invoices and checks; the Issuer shall execute such amendments hereof and supplements hereto (and shall comply with
the provisions thereof) as may, in the opinion of Bond Counsel, be necessary to preserve or perfect
(m) Except as otherwise permitted by the Bond Documents, not to pledge its assets for the such exclusion. The Borrower shall comply with each specific covenant in this Section at all times
benefit of any other entity or make any loans or advances to any entity; prior to the last maturity of the Tax-Exempt Bonds, unless and until there shall have been delivered
(n) To hold itself out as a separate entity; to the Trustee and the Issuer a Favorable Opinion of Bond Counsel, and thereafter such covenant
shall no longer be binding upon the Borrower. All representations, warranties, and certifications
(o) To correct any known misunderstanding regarding its separate identity; and made by the Borrower in connection with the delivery of the Bonds on the Closing Date, including,
(p) To maintain adequate capital, as it determines in its sole discretion, in light of its but not limited to, those representations, warranties, and certifications contained in the Borrower’s
contemplated business operations. Tax Certificate are and shall be true, correct, and complete in all respects.

Section 2.4. Representations and Covenants of the Trustee. The Trustee represents and Section 2.7. (Intentionally Omitted).
covenants that: Section 2.8. Tax Representations, Covenants and Warranties of Borrower.
(a) It has full power and authority to carry on its business as now being conducted and to enter (a) Certain Federal Tax Matters.
into the Bond Documents to which it is a party and the transactions contemplated thereby.
(i) Exempt Status. The Borrower represents and warrants that to the best of its
(b) The Bond Documents to which it is a party have been duly executed and delivered by the knowledge:
Trustee.
A. it is an organization exempt from federal income taxation as provided in
(c) The Bond Documents to which it is a party constitute valid, legal, binding, and enforceable section 501(a) of the Code by virtue of being described in section 501(c)(3) of the Code;
obligations of the Trustee (subject to bankruptcy, insolvency or creditor rights laws generally, and
principles of equity generally). B. its purposes, character, activities, and methods of operation have not
changed since its organization and are not different from the purposes, character, activities,
(d) The execution, delivery, and performance of the Bond Documents to which it is a party by and methods of operation contemplated at the time of the ruling by the Internal Revenue
the Trustee will not cause or constitute, including due notice or lapse of time or both, a default under or Service that it is an organization described in section 501(c)(3) of the Code;
conflict with organizational documents or other agreements or otherwise materially or adversely affect the
Trustee’s performance of its duties. C. it has not and will not divert any part of its corpus or income for a purpose
or purposes other than the purpose or purposes for which it is organized or operated;
(e) The execution, delivery, and performance of the Bond Documents to which it is a party by
the Trustee will not violate any applicable law, regulation, order, or decree of any governmental authority. D. it has not operated, and will not operate, in a manner that would result in
being classified as an “action” organization within the meaning of Section 1.501(c)(3)-
(f) All consents, approvals, authorizations, orders, or filings of or with any court or (1)(c)(3) of the Regulations, including, but not limited to, promoting or attempting to
governmental agency or body, if any, required for the execution, delivery, and performance of the Bond influence legislation by propaganda or otherwise as a substantial part of its activities;
Documents to which it is a party by the Trustee have been obtained or made.
E. none of the directors, officers, or incorporators, or any related Persons, or
(g) There is no pending action, suit, or proceeding, arbitration or governmental investigation any other Person having a private or professional interest in the Borrower’s activities has
against the Trustee, an adverse outcome of which would materially affect the performance by the Trustee acquired or received, nor will such Persons be allowed to acquire or receive, directly or
under the Bond Documents. indirectly, any of the Borrower’s goods, services, income or assets, without fair
Section 2.5. Special Arbitrage Certifications. In Section 4.09(a) of the Indenture, and subject compensation or consideration received in exchange therefor;
to the provisions of Section 4.09(f) of the Indenture, the Issuer has covenanted not to cause or direct any F. it is not a “private foundation” within the meaning of section 509(a) of the
money in any Fund or Account under the Indenture to be used in a manner that would cause the Tax-Exempt Code;
Bonds to be classified as “arbitrage bonds,” within the meaning of section 148 of the Code. The Borrower
certifies and covenants to and for the benefit of the Issuer and the Owners that, so long as there are any G. it has not received any indication or notice from the Internal Revenue
Tax-Exempt Bonds Outstanding, money on deposit in any Fund or Account under the Indenture in Service to the effect that its exemption from federal income taxation under section
501(c)(3) of the Code has been revoked or modified, or that the Internal Revenue Service
8 9

is considering revoking or modifying such exemption, and such exemption is still in full (d) Weighted Average Maturity. The weighted average maturity, calculated by the
force and effect; Underwriter in accordance with section 147(b) of the Code, of the Tax-Exempt Bonds does not exceed
120% of the average reasonably expected remaining economic life of the Project, calculated in accordance
H. it has timely filed and will timely file with the Internal Revenue Service
with section 147(b) of the Code, financed or refinanced with the proceeds of the Tax-Exempt Bonds.
all requests for determination, reports, and returns required to be filed by it, and such
requests for determination, reports, and returns have not omitted or misstated any material (e) Ownership of Project. The Borrower will (or shall cause one or more other Exempt
fact; Persons to) own all portions of the property financed with the Tax-Exempt Bonds at all times prior to the
final maturity of the Tax-Exempt Bonds.
I. it has not devoted and will not devote more than an insubstantial part of
its activities in furtherance of a purpose other than an exempt purpose within the meaning (f) Prohibited Uses. The Borrower will not use or permit the use of any proceeds of the Tax-
of section 501(c)(3) of the Code; and Exempt Bonds or any income from the investment thereof
J. it has not taken any action, nor knows of any action that any other Person (i) to provide any airplane, skybox, or other private luxury box, any facility primarily
has taken, nor knows of the existence of any condition that would cause it to lose its used for gambling, or any store the principal business of which is the sale of alcoholic beverages
exemption from federal income taxation under section 501(c)(3) of the Code or cause for consumption off premises, or
interest on the Tax-Exempt Bonds to be includable in the gross income of the recipients
(ii) to pay or otherwise finance Issuance Costs in an amount that exceeds 2% of the
thereof for federal income tax purposes.
Sales Proceeds (exclusive of accrued interest) of the Tax-Exempt Bonds.
(b) Documents Provided to Bond Counsel. All of the documents, instruments and written
(g) No Arbitrage Bonds. The Borrower will not take any action or omit to take any action
information supplied (other than estimates, projections and pro-forma financial information) by or on behalf
with respect to the Gross Proceeds of the Tax-Exempt Bonds or of any amounts expected to be used to pay
of the Borrower that have been reasonably relied upon by Bond Counsel in rendering its opinion with
the principal thereof or the interest thereon which, if taken or omitted, respectively, would cause any Tax-
respect to the exclusion from gross income of the interest on the Tax-Exempt Bonds for federal income tax
Exempt Bond to be classified as an “arbitrage bond” within the meaning of section 148 of the Code.
purposes or counsel to the Borrower in rendering its opinion with respect to the status of the Borrower
under section 501(c)(3) of the Code, are true and correct in all material respects, do not contain any untrue (h) No Other Reserves. Except as provided in the Indenture and this Loan Agreement, the
statement of a material fact and do not omit to state any material fact necessary to be stated therein to make Borrower shall not pledge or otherwise encumber, or permit the pledge or encumbrance of, any money,
the information provided therein, in light of the circumstances under which such information was provided, investment, or investment property as security for payment of any amounts due under this Loan Agreement
not misleading. Estimates, projections and pro-forma financial information, if any, have been prepared or the Notes relating to the Tax-Exempt Bonds and shall not establish any segregated reserve or similar
based upon assumptions believed by the Borrower to be reasonable at the time of preparation. fund for such purpose and shall not prepay any such amounts in advance of the redemption date of an equal
principal amount of the Tax-Exempt Bonds.
(c) Use of Proceeds. With respect to the Tax-Exempt Bonds, the Borrower will not use or
permit to be used, directly or indirectly, in any trade or business carried on by any Person who is not an (i) Investment of Gross Proceeds. The Borrower will not, at any time prior to the final
Exempt Person more than the lesser of (i) 5% of the Tax-Exempt Bond Net Proceeds or (ii) $15,000,000. maturity of the Tax-Exempt Bonds, direct or permit the Trustee to invest Gross Proceeds of an issue of the
For purposes of the preceding sentence, the Borrower will apply rules set forth in the applicable Regulations Tax-Exempt Bonds in any Investment (or to use Gross Proceeds to replace money so invested), if as a result
promulgated by the Internal Revenue Service, including, among others, the following rules: (w) use of Tax- of such investment the Yield of all Investments acquired with Gross Proceeds (or with money replaced
Exempt Bond Net Proceeds by an organization described in section 501(c)(3) of the Code with respect to thereby) on or prior to the date of such investment exceeds the Yield of such issue of the Tax-Exempt Bonds
an unrelated trade or business, determined according to section 513(a) of the Code, does not constitute a to stated maturity, except as permitted by section 148 of the Code and Regulations thereunder. The
use by an Exempt Person; (x) use of any property financed with the Tax-Exempt Bond Net Proceeds Borrower will not direct or instruct the Trustee to invest Gross Proceeds of the Tax-Exempt Bonds in any
constitutes use of such Tax-Exempt Bond Net Proceeds to the extent of the cost of such property financed manner that is inconsistent with the Indenture.
with such Tax-Exempt Bond Net Proceeds; (y) except as otherwise provided in the Regulations, a non- (j) No Federal Guarantee. Except to the extent permitted by section 149(b) of the Code and
Exempt Person will be treated as a private business user of Tax-Exempt Bond Net Proceeds as a result of the Regulations and rulings thereunder, the Issuer and the Borrower will not take nor omit to take any action
ownership, actual or beneficial use pursuant to a lease, a management or incentive payments contract or that would cause the Tax-Exempt Bonds to be “federally guaranteed” in the meaning of section 149(b) of
other arrangements pursuant to which such non-Exempt Person has special legal entitlements with respect the Code and the Regulations and rulings thereunder.
to the Project; and (z) any use of the Tax-Exempt Bond Net Proceeds to pay costs of issuance shall constitute
the use of such Tax-Exempt Bond Net Proceeds in the trade or business of a person who is not an Exempt (k) No Abusive Devices. In the issuance of the Tax-Exempt Bonds, the Borrower has not (a)
Person. Further, the Borrower will not use or permit the use of any portion of the Sale Proceeds of the employed an “abusive arbitrage device” within the meaning of Section 1.148-10(a) of the Regulations; (b)
Tax-Exempt Bonds, directly or indirectly, to make or finance loans to a non-Exempt Persons. For purposes overburdened the tax exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds
of the preceding sentence, (i) a loan to an organization described in section 501(c)(3) of the Code for use to remain outstanding longer than reasonably necessary to accomplish the governmental purpose for which
with respect to an unrelated trade or business, determined according to section 513(a) of the Code, does not the Bonds were issued; or (c) employed a “device” to obtain a material financial advantage (based on
constitute a loan to an Exempt Person and (ii) any transaction that constructively transfers ownership of arbitrage), within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower
property financed with Sale Proceeds of the Tax-Exempt Bonds for federal income tax purposes constitutes interest rates.
a loan of such Sale Proceeds. (l) Elections. The Borrower shall exercise, on behalf of the Issuer, any election with respect
to the Tax-Exempt Bonds pursuant to the Code or the Regulations, and the Issuer will cooperate with the

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Borrower and execute any form or statement required by the Code or the Regulations to perfect any such arbitrage” (as that term is defined in section 148(f) of the Code) in respect of such issue of
election. Tax-Exempt Bonds; and
(m) Reliance on Borrower. Anything in this Loan Agreement to the contrary notwithstanding, 3. an Internal Revenue Service Form 8038-T completed as of such
it is expressly understood and agreed by the parties hereto that the Issuer and the Trustee may rely Computation Date, if applicable.
conclusively on the truth and accuracy of any certificate, opinion, notice, representation or instrument made
(r) Correction of Underpayments. If the Borrower shall discover or be notified as of any date
or provided by the Borrower in order to establish the existence of any fact or statement of affairs solely
that any payment paid to the United States Treasury pursuant to Section 2.8(q) of an amount described in
within the knowledge of the Borrower, and which is required to be noticed, represented or certified by the
Section 2.8(q)(i)(1) or (2) above shall have failed to satisfy any requirement of Section 1.148-3 of the
Borrower hereunder or in connection with any filings, representations or certifications required to be made
Regulations (whether or not such failure shall be due to any default by the Borrower, the Issuer, or the
by the Borrower in connection with the issuance and delivery of the Bonds.
Trustee), the Borrower shall (1) pay to the Trustee (for deposit to the Rebate Fund) and cause the Trustee
(n) Compliance. The Borrower, for the benefit of the Issuer, each Owner and the Trustee, to pay to the United States Treasury from the Rebate Fund the Rebate Amount, together with any penalty
hereby represents that it has not taken, or permitted to be taken on its behalf, and agrees that it will not take, and/or interest due, as specified in Section 1.148-3(h) of the Regulations, within 175 days after any
or permit to be taken on its behalf, any action that would adversely affect the exclusion from gross income discovery or notice and (2) deliver to the Trustee an Internal Revenue Service Form 8038-T completed as
for federal income tax purposes of the interest paid on the Tax-Exempt Bonds, and that it will make and of such date. If such Rebate Amount, together with any penalty and/or interest due, is not paid to the United
take, or require to be made and taken, such acts and filings as may from time to time be required under the States Treasury in the amount and manner and by the time specified in the Regulations the Borrower shall
Code to maintain the exclusion from gross income for federal income tax purposes of the interest on the take such steps as are necessary to prevent the Tax-Exempt Bonds from becoming “arbitrage bonds,” within
Tax-Exempt Bonds, including maintaining continuous compliance with the requirements of section 145(d) the meaning of section 148 of the Code. Additionally, the Borrower agrees that if the Rebate Fund incurs
of the Code. The Borrower agrees that it will not make any changes in the Project that will result in a losses from investment that result in a balance below the amount required to be paid under section 148(f)
violation of the limitation of the maturity of the Tax-Exempt Bonds under section 147(b) of the Code. The of the Code, the Borrower will repay amounts equalizing such losses in the Rebate Fund.
Borrower will take such action or actions, including being a party to or consenting to such amendments of
(s) Records. The Borrower shall retain all of its accounting records relating to expenditures
this Loan Agreement or such other documents pertaining to the Bonds, as may be necessary, in the opinion
and earnings of Tax-Exempt Bond Proceeds and all calculations made in preparing the statements described
of Bond Counsel, to comply fully with all applicable rules, rulings, regulations policies, procedures or other
in Section 2.8(q) for at least three years after the later of the final maturity of the Tax-Exempt Bonds or the
official statements promulgated or proposed by the Internal Revenue Service pertaining to obligations the
first date on which no Tax-Exempt Bonds are Outstanding.
interest on which is excludable from gross income under section 103 of the Code, and which pertain to the
Tax-Exempt Bonds. (t) Fees and Expenses. The Borrower agrees to pay all of the reasonable fees and reasonable
expenses of a nationally-recognized bond counsel, a certified public accountant and any other necessary
(o) One Issue. There is no issue of tax-exempt obligations that has been, or will be, sold or
consultant employed by the Borrower, the Trustee or the Issuer in connection with computing the Rebate
issued at substantially the same time as each issue of the Tax-Exempt Bonds, the payment of the principal
Amount.
of or interest on which is secured, directly or indirectly, by any obligation of the Borrower or the Project.
(u) No Diversion of Rebatable Arbitrage. The Borrower will not indirectly pay any amount
(p) Project Location. The Project is located wholly within Cleveland County and Oklahoma
otherwise payable to the federal government pursuant to the foregoing requirements to any person other
County in the State of Oklahoma.
than the federal government by entering into any investment arrangement with respect to the Gross Proceeds
(q) Rebate. The Borrower agrees to take all steps necessary to compute and pay any rebatable of the Tax-Exempt Bonds that is not purchased at fair market value or includes terms that the Borrower
arbitrage in accordance with section 148(f) of the Code, including: would not have included if the Tax-Exempt Bonds were not subject to section 148(f) of the Code.
(i) Delivery of Documents and Money on Computation Dates. The Borrower shall (v) Modification of Requirements. If at any time during the term of this Loan Agreement the
retain a Rebate Analyst to provide the calculations required under this Section 2.8(q). The Issuer, the Trustee, or the Borrower desires to take any action that would otherwise be prohibited by the
Borrower shall deliver to the Trustee, within 55 days after each Computation Date, terms of this Section, such Person shall be permitted to take such action if it shall first obtain and provide
to the other Persons named herein an Opinion of Bond Counsel to the effect that such action shall not
1. a statement, signed by a Rebate Analyst, stating the Rebate Amount as of
adversely affect the exclusion of interest on the Tax-Exempt Bonds from gross income of the Owners
such Computation Date; and
thereof for federal income tax purposes and shall be in compliance with the laws of the State of Oklahoma
2. (a) if such Computation Date is an Installment Computation Date, an and the terms of this Loan Agreement.
amount which, together with any amount then held for the credit of the Rebate Fund, is
(w) Limit on Nonhospital Bonds. The Borrower will expend at least 95% of the Bond Net
equal to at least 90% of the Rebate Amount in respect of the Tax-Exempt Bonds as of such
Proceeds of the Tax-Exempt Bonds for capital expenditures incurred after August 5, 1997. Accordingly,
Installment Computation Date, less any prior payments made to the United States for
the Bonds are not subject to the $150,000,000 limit on nonhospital bonds imposed by section 145(b)(1) of
“rebatable arbitrage” (as that term is defined in section 148(f) of the Code) in respect of
the Code.
the Tax-Exempt Bonds, or (b) if such Computation Date is the Final Computation Date, an
amount which, together with any amount then held for the credit of the Rebate Fund in (x) Bonds Are Not Hedge Bonds. The Borrower covenants and agrees that not more than
respect of the Tax-Exempt Bonds, is equal to the Rebate Amount as of such Final 50% of the Proceeds of the Tax-Exempt Bonds will be invested in Nonpurpose Investments having a
Computation Date, less any prior payments made to the United States for “rebatable substantially guaranteed Yield for four years or more within the meaning of section 149(g)(3)(A)(ii) of the
Code, and the Borrower reasonably expects that at least 85% of the spendable proceeds of the Tax-Exempt

12 13

Bonds will be used to carry out the governmental purposes of the Tax-Exempt Bonds within the three-year date that is five years after the Issuance Date, Bond Years end on each anniversary
period beginning on this Issuance Date. of the Issuance Date and on the date of final maturity.
(y) Public Approval. The Borrower will not use the Proceeds of the Tax-Exempt Bonds in (iv) “Computation Date” means each Installment Computation Date and the
any manner that deviates in any substantial degree from the Project described in the written notice of public Final Computation Date, and if the Bonds are a Construction Bond Issue, in addition, with
hearing regarding the Tax-Exempt Bonds. respect to which the penalty set forth in section 148(f) of the Code has been elected, each
Expenditure Date.
(z) Limitation of Project Expenditures. Other than to the extent of preliminary expenditures
(i.e. architectural, engineering, surveying, soil testing, bond issuance, and similar costs that are incurred (v) “Construction Bond Issue” means the Bonds (or any portion thereof with
prior to commencement of acquisition, construction or rehabilitation of the Project (other than land respect to which the Issuer has made an election in accordance with section 148(f)(4)(C)(v) of
acquisition, site preparation and similar costs incident to commencement of construction)), no portion of the Code), at least 75 percent of the Available Construction Proceeds, of which are to be used
the Proceeds of the Bonds will be disbursed to reimburse the Issuer, the Borrower or any “related person” for construction expenditures (including expenditures for reconstruction and rehabilitation)
(within the meaning of section 144(a)(3) of the Code) for any expenditures paid prior to the date that is 60 with respect to property that is or will be owned by an Exempt Person.
days before the Closing Date or the date the Borrower adopted a reimbursement resolution described in
(vi) “Exempt Person” means a state or local governmental unit as defined in
Section 1.150-2 of the Regulations.
Section 1.141-1(b) of the Regulations or an organization exempt from federal income taxation
(aa) Yield on Investment of Gross Proceeds. The Borrower will restrict the cumulative, under section 501(a) of the Code by reason of being described in section 501(c)(3) of the Code.
blended Yield on the investment of the Gross Proceeds of any issue of Tax-Exempt Bonds, to the Yield of
(vii) “Expenditure Date” means, with respect to any portion of the Bonds that
such issue, other than amounts (i) not subject to yield restriction due to any applicable temporary period
is a Construction Bond Issue with respect to which the penalty set forth in section 148(f) of the
under section 148(b) of the Code, deposited in a Reasonably Required Reserve or Replacement Fund, the
Code has been elected, each 6-month anniversary of the Issuance Date.
Rebate Fund, a bona fide debt service fund (including the Debt Service Fund), or as a minor portion, or (ii)
invested at a restricted yield by virtue of being invested in obligations described in section 103(a) of the (viii) “Expenditure Delay Penalty” means, with respect to any portion of the
Code that are not “specified private activity bonds” within the meaning of section 57(a)(5) of the Code to Bonds that is a Construction Bond Issue for which there is Unexpended Required Amount, an
the extent required by the Code or the Regulations. amount equal to the amount calculated under Section 1.148-3 of the Regulations (i.e., the
Rebate Amount calculated as if no part of the Bonds is a Construction Bond Issue); provided,
(bb) Examination by IRS. The Borrower acknowledges that, in the event of an examination by
however, such term shall mean with respect to a Construction Bond Issue for which the Issuer
the Internal Revenue Service of the exclusion of interest on the Tax-Exempt Bonds from the gross income
has made an election in accordance with section 148(f)(4)(C)(vii) of the Code to pay the penalty
of the Owners thereof for federal tax purposes, the Issuer will likely be treated as the “taxpayer,” and the
in lieu of rebate, 1 1/2% of the Unexpended Required Amount on each Expenditure Date.
Borrower agrees to respond in a commercially reasonable manner on behalf of, and at the direction of, the
Issuer to such examination and to pay the costs of the counsel selected by the Issuer to provide a defense (ix) “Final Computation Date” means the final Maturity of the Bonds.
regarding the exclusion of the interest on the Tax-Exempt Bonds from the gross income of the Owners (x) “Gross Proceeds” means any Proceeds and any Replacement Proceeds.
thereof for federal income tax purposes. PURSUANT TO SECTION 6.5 OF THIS LOAN
AGREEMENT, THE BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE ISSUER (xi) “Installment Computation Date” means the last day of the fifth and each
AND THE TRUSTEE AGAINST ANY AND ALL COSTS, LOSSES, CLAIMS, DAMAGES, OR succeeding fifth Bond Year.
LIABILITY OF, OR RESULTING FROM, SUCH AN EXAMINATION AND THE SETTLEMENT (xii) “Investment Proceeds” means any amounts actually or constructively
THEREOF BY THE ISSUER AND THE TRUSTEE (INCLUDING THE COST OF THE ISSUER’S AND received from investing Proceeds.
THE TRUSTEE’S LEGAL COUNSEL), EXCEPT AS A RESULT OF THE WILLFUL MISCONDUCT,
BAD FAITH, OR FRAUD OF THE ISSUER (WITH RESPECT TO INDEMNIFICATION OF THE (xiii) “Issue Price” means “issue price” as defined in sections 1273 and 1274 of
ISSUER) OR THE NEGLIGENCE OF THE TRUSTEE (WITH RESPECT TO INDEMNIFICATION OF the Code, unless otherwise provided in Sections 1.148-0 through 1.148-11 of the Regulations
THE TRUSTEE). and, generally, is the aggregate initial offering price at which 10% of each maturity of Bonds
is sold to the public (excluding underwriters or related parties).
(cc) Definitions. The following terms have the meanings assigned to them below whenever
they are used in this Loan Agreement: (xiv) “Nonpurpose Investments” means any “investment property,” within the
meaning of section 148(b) of the Code, that is not acquired to carry out the governmental
(i) “Available Construction Proceeds” has the meaning set forth in section purpose of the Bonds.
148(f)(4)(C)(vi) of the Code.
(xv) “Proceeds” means any Sale Proceeds, Investment Proceeds and
(ii) “Bond Net Proceeds” means any Sale Proceeds (less any Sale Proceeds Transferred Proceeds of the Bonds.
deposited in a Reasonably Required Reserve or Replacement Fund), Investment Proceeds and
any Transferred Proceeds of the Bonds. (xvi) “Reasonably Required Reserve or Replacement Fund” means any fund
described in section 148(d) of the Code provided that the amount thereof allocable to the Bonds
(iii) “Bond Year” means each one-year period that ends at the close of business invested at a Yield materially higher than the Yield on the Bonds does not exceed the lesser of
on the day selected by the Borrower. The first and last Bond Years may be short periods. If (1) 10% of the stated principal amount of the Bonds or Sale Proceeds in the event that the
no day is selected by the Borrower before the earlier of the final maturity of the Bonds or the amount of original issue discount exceeds 2% of the stated redemption price at maturity of the
14 15

B-4
 Bonds, (2) the maximum annual debt service on the Bonds, or (3) 125% of the average annual nationally recognized rebate consultant or Bond Counsel) stating that a rebate report is not
debt service on the Bonds, within the meaning of Section 1.148-2(f)(2)(ii) of the Regulations. required.
(xvii) “Rebate Amount” has the meaning ascribed in Section 1.148-3 of the (ii) The Issuer has designated its Chairman, Vice Chairman or President as the
Regulations and generally means the excess of the future value, as of any date, of all receipts person who (A) will receive notice by the person described in the preceding paragraph of
on Nonpurpose Investments over the future value of all payments on Nonpurpose Investments, any Change in Use of the Project and who will determine, upon consultation with Bond
all as determined in accordance with Section 1.148-3 of the Regulations. In the case of any Counsel, whether to take any remedial action or any other remedy available at law to ensure
Temporary Period Issue, the “Rebate Amount” as of any Computation Date shall be limited to that the tax-exempt status of the Tax Exempt Bonds is preserved following such Change
the “Rebate Amount” attributable to any Reasonably Required Reserve or Replacement Fund. in Use, and (B) will receive the aforementioned rebate report or letter stating that such
For any Construction Bond Issue, the “Rebate Amount” as of any Computation Date shall be report is not required.
the Expenditure Delay Penalty, if any, plus (in the case of a Computation Date other than an
(iii) For purposes of this Section 2.8(dd), “Change in Use” means any
Expenditure Date) the “Rebate Amount” attributable to any Reasonably Required Reserve or
occurrence with respect to any facilities financed or refinanced with the proceeds of any
Replacement Fund.
“issue” (as defined in Section 1.150-1(c) of the Regulations) of Tax-Exempt Bonds that
(xviii) “Replacement Proceeds” has the meaning set forth in Section 1.148-1(c) would result in such issue meeting the private business use test in section 141 of the Code.
of the Regulations.
(ee) Provision of Services. The Borrower represents that the residents of the facilities
(xix) “Required Amount” means for any Construction Bond Issue (1) 10% of comprising the Project will be provided with continual or frequent nursing, medical or psychiatric services
the Available Construction Proceeds, on the Expenditure Date that falls on the 6-month (such as is the case in hospitals, nursing homes, sanitariums, lifecare facilities or intermediate care facilities
anniversary of the Issuance Date, (2) 45% of the Available Construction Proceeds, on the for the mentally and physically handicapped).
Expenditure Date that falls on the 1-year anniversary of the Issuance Date, (3) 75% of the
Available Construction Proceeds, on the Expenditure Date that falls on the 18-month
anniversary of the Issuance Date, and (4) 100% of the Available Construction Proceeds on any
Expenditure Date that falls on or after the 2-year anniversary of the Issuance Date.
(xx) “Sale Proceeds” means any amounts actually or constructively received
from the sale (or other disposition) of any Bond, including amounts used to pay underwriters’
discount or compensation and accrued interest other than pre-issuance accrued interest. Sale
Proceeds also include amounts derived from the sale of a right that is associated with any Bond
and that is described in Section 1.148-4 of the Regulations.
(xxi) “Temporary Period Issue” means the Bonds that meet either the 6 month
exception or the 18-month exception set forth in Section 1.148-7 of the Regulations.
(xxii) “Transferred Proceeds” means, with respect to the portion of the Bonds
that is a refunding issue, proceeds that have ceased to be proceeds of a refunded issue and are
transferred proceeds of the refunding issue by reason of Section 1.148-9 of the Regulations.
(xxiii) “Unexpended Required Amount” means, for any Construction Bond Issue,
the Required Amount on any Expenditure Date less the Available Construction Proceeds,
actually expended on and prior to such Expenditure Date; provided, however, that in the case
of any Expenditure Date that falls on or after the 2-year anniversary of the Issuance Date,
Available Construction Proceeds actually expended shall include a reasonable retainage (not
in excess of 5 percent of Available Construction Proceeds if such retainage is expended prior
to the 3-year anniversary of the Issuance Date.
(xxiv) “Yield” of (1) the Bonds has the meaning set forth in Section 1.148-4 of
the Regulations and of (2) any investment has the meaning set forth in Section 1.148-5 of the
Regulations.
(dd) Written Procedures.
(i) The Borrower (A) has designated its President as the person who will
contact the Issuer and its counsel in the event of any Change in Use (hereinafter defined)
within 15 days after the date of such Change in Use, and (B) will provide, within 60 days
of such date, a rebate report or a letter (prepared by a Certified Public Accountant,
16 17

ARTICLE III the Bonds, shall be sufficient to provide for the payment in full of the interest on, premium, if any, and
principal of each Series of Bonds as they become due and payable.
ISSUANCE OF BONDS; LOAN TO BORROWER;
Except as otherwise provided in the Indenture, the Project Revenues shall also be used to pay, as
RELATED OBLIGATIONS
Loan Payments, to the Trustee for deposit in the respective Special Redemption Accounts of each Bond
Section 3.1. Issuance of Series 2017 Bonds; Deposit of Proceeds. To provide funds to assist Fund, such amounts as shall, together with any other money available therefor, be sufficient to pay all
the Borrower in financing the acquisition, rehabilitation and equipping of the Project, the Issuer, amounts, if any, required to redeem each Series of Bonds pursuant to the provisions of Article III of the
concurrently with the execution and delivery of this Loan Agreement, and upon satisfaction of the Indenture as and when they become subject to redemption pursuant thereto, together with any related
conditions to the delivery of the Series 2017 Bonds set forth in Section 2.07 of the Indenture, will issue, redemption premium associated therewith, all such payments to be made by the Borrower to the Trustee,
sell and deliver the Series 2017 Bonds and will deposit the proceeds of the Series 2017 Bonds with the for deposit into the related Special Redemption Account on or before the date such money is required by
Trustee in accordance with Section 5.02 of the Indenture. said provisions of the Indenture.
Section 3.2. The Loan; Loan Payments; and Additional Payments. (ii) Additional Payments. In addition to the Loan Payments, the Project
Revenues shall be used to pay the following costs and expenses (to the extent such costs
(a) The Loan. The Issuer agrees, upon the terms and conditions herein, to lend to the
and expenses are not paid from the proceeds of the sale of the Bonds), in accordance with
Borrower the proceeds received by the Issuer from the sale of each Series of Series 2017 Bonds by causing
Article V of the Indenture, which are the Additional Payments:
such proceeds to be deposited with the Trustee for disposition as provided in the Indenture. The obligation
of the Issuer to make the Loan shall be deemed fully discharged upon the deposit of the proceeds of each 1. any amounts required by the Indenture to be deposited in the
Series of the Series 2017 Bonds with the Trustee. The Loan shall be evidenced by the respective Series respective Debt Service Reserve Funds in order to satisfy the applicable Debt
2017 Note for such Series of Series 2017 Bonds. Service Reserve Requirement or to restore the difference between the amount on
deposit in the applicable Debt Service Reserve Fund and the related Debt Service
(b) Deposit of Project Revenues; Loan Payments; and Additional Payments. The Borrower
Reserve Requirement;
shall pay (or cause the Manager to pay) all Project Revenues from the Project to the Trustee for deposit in
the Revenue Fund and application in accordance with Article V of the Indenture. The Project Revenues 2. amounts sufficient to maintain balances in the Insurance and Tax
shall be used to pay the Loan Payments and the Additional Payments, as provided in this Section 3.2(b), in Escrow Fund (excluding the Property Tax Account), the Operating Fund, the
such lawful money of the United States of America as at the time of payment shall be legal tender for the Repair and Replacement Fund, the Administration Fund, and the Operations and
payment of public and private debts. The Borrower hereby grants to the Trustee, for the benefit of the Maintenance Reserve Fund, equal to the amounts required pursuant to the
Persons secured by the lien of the Indenture, a security interest in the Project Revenues, and all money, Indenture;
securities, and obligations held for the credit of the Revenue Fund, as security for payment of the Loan
3. the Issuer’s Fees and Expenses and all amounts advanced by the
Payments and the Additional Payments.
Issuer under authority of the Indenture or any of the Borrower Documents that the
(i) Loan Payments. The Project Revenues shall be used to pay, as Loan Borrower is obligated to repay;
Payments, the following amounts in accordance with Article V of the Indenture and in the
4. the Ordinary Trustee’s Fees and Expenses and the Extraordinary
order and priority set forth therein:
Trustee’s Fees and Expenses, all amounts advanced by the Trustee under authority
1. on or before the 15th day of each month, commencing January 15, of the Indenture or any of the Borrower Documents that the Borrower is obligated
2018, until such time as the principal of and the premium, if any, and interest on, to repay;
each Series of the Series 2017 Bonds shall have been paid in full, or provisions
5. the Dissemination Agent Fee;
made for such full payment in accordance with the provisions of the Indenture, to
the Trustee for deposit in the respective Interest Accounts in each Bond Fund 6. the Rebate Analyst Fee, and if a deposit is required to be made to
provided for in the Indenture, a sum equal to the Interest Requirement for each the Rebate Fund as a result of any calculation made by such Rebate Analyst, the
respective Series of then Outstanding Bonds for such month; provided, however, amount of such deposit to the Rebate Fund in accordance with the terms of the
for Additional Bonds, payments shall be made as set forth in any related Indenture;
Supplemental Indenture; and 7. the Rating Agency Fee;
2. on or before the 15th day of each month, commencing July 15, 8. any Deferred Management Fee;
2018, to the Trustee for deposit in the respective Principal Accounts in each Bond
Fund, a sum equal to the Principal Requirement for each respective Series of then 9. the Management Fee; and
Outstanding Series 2017 Bonds for such month; provided, however, for Additional 10. the fees and expenses of any Servicer engaged pursuant to Section
Bonds, payments shall be made as set forth in any related Supplemental Indenture. 6.2 hereof.
The monthly installments of Loan Payments described in (1) and (2) above payable by the Borrower (iii) Miscellaneous. In the event the Borrower shall fail to pay, or fail to cause
under this Loan Agreement shall in any event be equal in the aggregate to an amount that, with other funds to be paid, any Loan Payments or Additional Payments as required by this Section 3.2(b)
in the respective Accounts in the Bond Fund then available for the payment of principal of and interest on (except to the extent amounts due under Section 3.2(b) are paid from amounts on deposit
18 19

B-5
 in a Debt Service Reserve Fund, the Repair and Replacement Fund or the Surplus Fund), specific performance (other than pertaining to this Loan Agreement, any agreement pertaining to the Project
the payment not paid shall continue as an obligation hereunder of the Borrower until the or any other agreement securing the Borrower’s obligations under this Loan Agreement), shall be rendered
unpaid amount shall have been fully paid. against the Borrower nor any member of the Borrower, the assets of the Borrower (other than the
Borrower’s interest in the Project, this Loan Agreement, amounts held in the Funds and Accounts created
The Borrower shall pay, or cause to be paid, in accordance with the terms of this Section 3.2, the
under the Indenture, any rights of the Borrower under the Bond Documents or any rights of the Borrower
Loan Payments and Additional Payments without any further notice thereof.
under any guarantees relating to the Project), its officers, directors or members or their heirs, personal
The Borrower shall be permitted to distribute, free and clear of any and all liens or encumbrances representatives, successors, transferees assigns, as the case may be, in any action or proceeding arising out
on, or right to recovery of, such funds hereunder, to any Person any funds properly disbursed to the of this Loan Agreement and the Indenture or any agreement securing the obligations of the Borrower under
Borrower from the Surplus Fund subject to the terms and provisions of the Indenture. this Loan Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding.
Section 3.3. Obligations Unconditional; Limited Recourse. The obligations of the Borrower Section 3.4. Assignment of Issuer’s Rights. As security for the payment of the Bonds, the
to make the payments required in Section 3.2 and other Sections hereof and to perform and observe the Issuer in the Indenture assigns to the Trustee certain of the Issuer’s rights under this Loan Agreement,
other agreements contained herein shall be absolute and unconditional and shall not be subject to any including the right to receive payments hereunder and thereunder (except for any deposits to the Rebate
defense or any right of setoff, counterclaim or recoupment arising out of any breach by the Issuer or the Fund and the Reserved Rights), and the Borrower hereby assents to such assignment and agrees to make
Trustee of any obligation to the Borrower whether hereunder or otherwise, or out of any Indebtedness or payments directly to the Trustee, without defense or set off by reason of any dispute between the Borrower
liability at any time owing to the Borrower by the Issuer or the Trustee. Until such time as the principal and the Issuer or the Trustee. By virtue of such assignment and certain obligations of the Borrower to the
of, premium, if any, and interest on the Bonds shall have been fully paid or provision for the payment Trustee, the Trustee shall have the right to enforce the obligations of the Borrower hereunder and
thereof shall have been made in accordance with the Indenture, the Borrower (a) will not suspend or thereunder, subject to the limitations hereof and thereof, including the limitations in Section 3.3.
discontinue any payments provided for in Section 3.2 hereof, (b) will perform and observe all other
Section 3.5. Amounts Remaining in Funds. It is agreed by the parties hereto that after (a)
agreements contained in this Loan Agreement, and (c) except as provided in Article VIII hereof, will not
payment in full of the Bonds, or provision for such payment having been made as provided in the Indenture,
terminate this Loan Agreement for any cause, including, without limiting the generality of the foregoing,
(b) payment of all fees, charges and expenses of the Trustee in accordance with the terms of the Indenture,
failure of the Borrower to complete the acquisition, rehabilitation and equipping of the Project, the
and (c) payment of all other amounts required to be paid under this Loan Agreement and the Indenture, any
occurrence of any acts or circumstances that may constitute failure of consideration, destruction of or
amounts remaining in the Funds and Accounts held by the Trustee under the Indenture, subject to the
damage to the Project, the taking by eminent domain of title to or temporary use of any or all of the Project,
application of money in the Rebate Fund as provided herein, shall be applied by the Trustee as provided in
commercial frustration of purpose, any change in the tax or other laws of the United States of America or
Section 5.22 of the Indenture. The Issuer shall have no claim to such amounts.
of the State of Oklahoma or any political subdivision of either or any failure of the Issuer or the Trustee to
perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising Section 3.6. Borrower Required To Pay if Project Fund Insufficient. In the event the money
out of or connected with this Loan Agreement or otherwise. in the Project Fund available for payment of the amounts described in Section 5.03 of the Indenture is
insufficient to pay such amounts in full, the Borrower agrees to pay such insufficiency. The Issuer does not
Nothing contained in this Section shall be construed to release the Issuer from the performance of
make any warranty, either express or implied, that the money that will be paid into the Project Fund and
any of the agreements on its part herein contained, and in the event the Issuer or the Trustee fails to perform
which, under the provisions of this Loan Agreement, will be available for payment of the Costs of the
any such agreement on its part, the Borrower may institute such action against the Issuer or the Trustee as
Project, will be sufficient to pay all the costs that will be incurred in that connection. The Borrower agrees
the Borrower may deem necessary to compel performance so long as such action does not abrogate the
that if, after exhaustion of the money in the Project Fund, the Borrower pays any portion of the such Costs
obligations of the Borrower contained in the first sentence of this Section. The Borrower may, at its own
of the Project pursuant to the provisions of this Section, it will not be entitled to any reimbursement therefor
cost and expense and in its name or in the name of the Issuer and with proper notice to the Issuer, prosecute
from the Issuer or from the Trustee or from the Owners of any of the Bonds, nor will it be entitled to any
or defend any action or proceeding or take any other action involving third persons that the Borrower deems
diminution of the loan payments payable under Section 3.2 hereof. The obligation of the Borrower to
reasonably necessary in order to secure or protect the Borrower’s right of possession, occupancy and use
complete the acquisition, rehabilitation and equipping of the Project will survive any termination of this
of the Project, and in such event the Issuer hereby agrees to cooperate fully with the Borrower, at the
Loan Agreement.
Borrower’s sole cost and expense, and to take all action necessary to effect the substitution of the Borrower
for the Issuer in any such action or proceeding if the Borrower shall so request. Section 3.7. Security for Payments Under the Series 2017 Bonds. Contemporaneously with
the issuance of the Series 2017 Bonds of each Series, as security for the payment of the Series 2017 Bonds
Notwithstanding the foregoing or any other provision or obligation to the contrary contained in this
of each Series, the Issuer will execute and deliver the Indenture, under the terms of which all of the right,
Loan Agreement or any other Bond Document, with the exception of any and all indemnities provided in
title, interest, and remedies of the Issuer in this Loan Agreement (except the Reserved Rights) and the Series
the Bond Documents, which such indemnities shall be a general obligation of the Borrower, (a) the liability
2017 Notes for the respective Series of Series 2017 Bonds, together with all revenues and amounts to be
of the Borrower under this Loan Agreement and the other Bond Documents to any person or entity,
received and all property to be held by the Issuer thereunder, will be assigned and will be the subject of a
including, but not limited to, the Trustee or the Issuer and their successors and assigns, is limited to the
grant of a security interest to the Trustee and will be pledged as security for, among other things, the
Borrower’s interest in the Project, the Project Revenues and the amounts held in the Funds and Accounts
payment of the Series 2017 Bonds of each Series. The Borrower hereby consents to such assignment and
created under the Indenture or other Bond Documents or any rights of the Borrower under any guarantees
grant of a security interest and hereby agrees that its obligations to make all payments under this Loan
relating to the Project, and such persons and entities shall look exclusively thereto, to such other security
Agreement will be absolute and will not be subject to any defense, except payment, or to any right of setoff,
as may from time to time be given for the payment of obligations arising out of this Loan Agreement or
counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Borrower,
any other agreement securing the obligations of the Borrower under this Loan Agreement; and (b) from and
whether hereunder or otherwise, or arising out of any Indebtedness or liability at any time owing to the
after the date of this Loan Agreement, no deficiency or other personal judgment, nor any order or decree of
20 21

Borrower by the Issuer. The Borrower further agrees that all Loan Payments required to be made under this any of such purposes, may expend and advance such sums of money as it may deem necessary, and such
Loan Agreement will be paid directly to the Trustee for the account of the Issuer. The Trustee will have all sums will be an advance payable in accordance with Section 6.14 hereof.
rights and remedies herein accorded to the Issuer (except for Reserved Rights), but shall not have assumed
any obligation of the Issuer hereunder or under any of the Bond Documents, and any reference herein to
the Issuer will be deemed, with the necessary changes in detail, to include the Trustee, and the Trustee and
the Owners are deemed to be and are third party beneficiaries of the representations, covenants, and
agreements of the Borrower (but not any obligation of the Issuer) herein contained. In addition, a lien on
the real property included in the Project and a security interest in the personal property included in the
Project has been granted to the Trustee pursuant to the Mortgages as security for the payment of the Series
2017 Bonds.
Section 3.8. Warranty of Title. The Borrower warrants that (a) it has acquired, or
simultaneously with the issuance of the Series 2017 Bonds will acquire, good and indefeasible fee simple
title to the Mortgaged Property, (b) except as otherwise permitted, the Borrower is or will be the legal owner
of all real and personal property included in the Project, and (c) the Project is and will be free from all
adverse claims, security interests, and encumbrances, other than Permitted Encumbrances. The Borrower
will not suffer any liens to exist upon the Project as a result of any claims brought against the Borrower
pursuant to a right or interest not existing in connection with or as permitted by this Loan Agreement or the
Mortgages.
Section 3.9. Title Insurance. The Borrower, prior to or simultaneously with the issuance of
the Series 2017 Bonds, will furnish to the Trustee commitments to issue the Title Policies. The Borrower
will furnish to the Trustee within the time limit specified in any binder originals of the Title Policies. The
mortgagee’s title policies will insure that the Trustee has a valid lien on the real property described in
Exhibit “A” to each of the Mortgages subject only to Permitted Encumbrances. There will be deleted at
the Borrower’s sole cost and expense from the Title Policies the standard exceptions for discrepancies,
encroachments, overlaps, conflicts in boundary lines, servitudes, shortages in area, or other matters that
would be disclosed by an accurate survey and inspection of the Mortgaged Property, for mechanics’ and
materialmen’s liens, or for rights or claims of parties in possession and easements or claims of easements
not shown by the public records. At the Borrower’s sole cost and expense, the Title Policies will contain
the standard zoning endorsement and will not contain an exception for matters shown by a current survey.
In lieu of the standard zoning endorsement the Borrower may provide an opinion of Independent Counsel
to the effect that the Project is properly zoned or evidence of proper zoning from appropriate government
officials. Any Net Proceeds payable either to the Issuer or the Borrower under the Title Policies will be
subject to the lien of the Indenture, will be paid to the Trustee, and held by the Trustee in the Project Account
of the Project Fund, and, at the Borrower’s written direction, will be either (a) used to acquire or construct
replacement or substitute property within the area of operation of the Issuer for that to which title has been
lost, or (b) used to redeem Bonds pursuant to Section 3.01 of the Indenture. Any proceeds of the Title
Policies remaining after the Bonds are no longer Outstanding will be paid to the Borrower.
Section 3.10. Borrower’s Covenants Regarding Title. The Borrower agrees to protect,
preserve, and defend its interest in the Project and its title thereto, to appear and defend such interest and
title in any action or proceeding affecting or purporting to affect the Project, the lien of the Mortgages
thereon, or any of the rights of the Trustee thereunder, and to pay on demand all costs and expenses
reasonably incurred by the Trustee in or in connection with any such action or proceeding, including
reasonable attorneys’ fees, whether any such action or proceeding progresses to judgment and whether
brought by or against the Trustee. The Trustee will be reimbursed for any such costs and expenses in
accordance with the provisions of Section 6.14 hereof. If the Borrower does not take the action
contemplated herein, the Trustee or the Issuer may, but will not be under any obligation to, appear or
intervene in any such action or proceeding and retain counsel therein and defend the same or otherwise take
such action therein as it may be advised and may settle or compromise the same and, in that behalf and for

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 ARTICLE IV 5.14 of the Indenture shall be promptly transferred by the Borrower to the Trustee for deposit in the
Operating Fund.
THE PROJECT
If actual Operating Expenses in any month exceed the Budgeted Operating Requirement for that
Section 4.1. Acquisition of the Project. The Borrower’s interest in any land, buildings and month, the Borrower may requisition from the Operations and Maintenance Reserve Fund or the Surplus
equipment acquired with the proceeds of the Bonds or amounts deposited in the Project Fund shall be a part Fund the amount of such excess in the manner provided in Section 5.15 and Section 5.19 of the Indenture.
of the Project, shall belong to and be the property of the Borrower, and shall be subject to this Loan However, if there are two such requests by the Borrower in any fiscal quarter that are in excess of 10% of
Agreement. the Budgeted Operating Requirement in any month, then (i) the Borrower must notify the Trustee, the
Underwriter and the Rating Agency; and (ii) the Borrower must prepare or cause the Manager to prepare a
The Borrower agrees that it will acquire the Project immediately upon issuance of the Bonds,
report that describes the reasons for the additional expenses and the circumstances surrounding the
substantially in accordance with the description set forth in Exhibits hereto, and the Borrower agrees to use
additional expenses. If the Borrower ascertains that the actual expenses with respect to the Project in any
its best efforts to cause the acquisition of the Project to be completed as of the Closing Date.
month will continue to exceed the Budgeted Operating Requirement for that month, then the Borrower will
Section 4.2. Disbursement of Project Account. Amounts in the Project Account of the Project prepare or cause the Manager to prepare a revised Budget for the upcoming 12-month period that reflects
Fund shall be disbursed by the Trustee as provided in the Indenture, upon delivery by the Borrower to the the actual Operating Expenses in connection with the Project.
Trustee of a requisition, substantially in the form attached hereto as Exhibit B, executed by a Borrower
Section 4.4. Rate Covenant; Coverage. The Borrower shall fix, charge and collect, or cause to
Representative setting forth the nature of the amounts to be paid and the name of the payee and certifying
be fixed, charged and collected rents, fees and charges in connection with the operation and maintenance
that the amounts being paid are Costs of the Project, provided that the purchase price of the facilities
of the Project such that for each Fiscal Year beginning with the Fiscal Year ending December 31, 2018, the
comprising the Project, and the other costs shown on the closing statement for the Series 2017 Bonds, may
Debt Service Coverage Ratio will not be less than the Coverage Test, determined as of the end of each such
be disbursed without formal requisition. The execution of each requisition submitted for disbursements
Fiscal Year based on and supported by Audited Financial Statements. Notwithstanding the foregoing, if
by the Borrower shall constitute the certification, warranty, and agreement of the Borrower as follows:
the Debt Service Coverage Ratio is less than 1.00 to 1.00 on all Outstanding Bonds and other Long-Term
(a) the Project is free and clear of all liens and encumbrances except Permitted Encumbrances; Indebtedness for any such Fiscal Year, such failure shall constitute a Default under this Loan Agreement.
(b) all evidence, statements, and other writings required to be furnished under the terms of this Section 4.5. Failure To Meet Rate Covenant; Retention of Management Consultant. If the
Loan Agreement, the Mortgages and the Indenture are true and omit no material fact, the omission of which Coverage Test for any Fiscal Year beginning with the Fiscal Year ending December 31, 2018, as set forth
may make them misleading; in the certificate delivered pursuant to Section 6.9(a)(ii) hereof, is not satisfied, but the Debt Service
(c) all money previously disbursed from the Project Account of the Project Fund has been used Coverage Ratio is equal to or greater than 1.00 to 1.00 on all Outstanding Bonds and other Long-Term
solely to pay for costs allowed by this Loan Agreement (or to reimburse the Borrower for such costs Indebtedness, the Borrower shall, in accordance with Section 4.15 hereof, retain a Management Consultant.
previously paid by the Borrower), and the Borrower has written evidence to support this item of warranty; Payment of the fees of the Management Consultant shall be deemed an Operating Expense. The
Management Consultant shall prepare recommendations with respect to the operations of the Project and
(d) none of the items for which payment is requested have formed the basis for any payment the sufficiency of the rates, fees and charges imposed by the Borrower.
previously made from the Project Account of the Project Fund;
The Management Consultant’s report shall (a) include the projection of the Project Revenues,
(e) all bills for labor, materials, and fixtures used, or on hand and to be used, in the Operating Expenses and Net Income Available for Debt Service on a quarterly basis for not less than the
rehabilitation or equipping of the Project have been paid or will be paid from the proceeds of such next two Fiscal Years, and (b) make such recommendations to the Borrower as the Management Consultant
disbursement; and believes are appropriate to enable the Borrower to increase the Debt Service Coverage Ratio to satisfy the
(f) payment of the cost referenced herein will not violate any representation, warranty, or Coverage Test for the current Fiscal Year. If, in the judgment of the Management Consultant, it is not
covenant of the Borrower in this Loan Agreement or the Borrower’s Tax Certificate. possible for the Borrower to meet such requirements, the report of the Management Consultant shall so
indicate and shall project the Debt Service Coverage Ratio that could be achieved if the recommendations
Section 4.3. Operating Expenses. The Borrower agrees to pay when due all Operating of the Management Consultant are followed. Continuous retention of a Management Consultant during
Expenses. The Borrower agrees to review and approve invoices for Operating Expenses on a timely basis. the years that are the subject of the Management Consultant’s report shall not be required, however, if a
Except when an Event of Default under Section 8.01(a) or 8.01(b) of the Indenture or a Default under this Borrower Representative delivers a certificate to the Trustee, within 45 days after the end of each calendar
Loan Agreement has occurred and is continuing, the Borrower (or the Manager) shall be entitled to request quarter, setting forth the actual results for such quarter (which may be based on unaudited financial
the disbursement from the Operating Fund of the monthly Budgeted Operating Requirements by the Trustee statements) and such results show that the Debt Service Coverage Ratio as projected by the Management
to fund the cost of operating the Project as provided in Section 5.14 of the Indenture. Consultant is being met. The Borrower shall, to the extent possible and consistent with the charitable
The Borrower shall establish and maintain an Operating Account in a federally insured financial mission of the Borrower and in compliance with Section 4.18 hereof, follow the recommendations of the
institution. Money transferred from the Operating Fund to the Operating Account pursuant to Section 5.14 Management Consultant.
of the Indenture shall be held in the Operating Account and used by the Borrower or the Manager, on behalf So long as the Debt Service Coverage Ratio is equal to or greater than 1.00 to 1.00 on all
of the Borrower, to pay Operating Expenses. Amounts on deposit in the Operating Account in excess of Outstanding Bonds and other Long-Term Indebtedness for any Fiscal Year, failure of the Borrower to
the amount needed to pay or be reserved to pay actual Operating Expenses shall be transferred by the satisfy the Coverage Test covenant shall not constitute a Default under this Loan Agreement unless (a) the
Borrower to the Trustee for deposit in the Revenue Fund. Any balance in the Operating Account at such Borrower fails to engage the Management Consultant or, (b) the Borrower fails to implement its reasonable
time that transfers from the Operating Fund to the Operating Account are not permitted pursuant to Section recommendations, to the extent possible permitted by the laws of the State of Oklahoma, to the extent
24 25

consistent with the charitable mission of the Borrower and in compliance with Section 4.18 hereof, as part thereof, unless the Borrower has first procured and paid for all requisite municipal and other
required by this Loan Agreement. governmental permits and authorizations. All such work must be done in a good and workmanlike manner
and in compliance with all applicable building, zoning, and other laws, ordinances, governmental
Section 4.6. Maintenance and Modification of Project; Removal of Equipment. The Borrower
regulations, and requirements and in accordance with the requirements, rules, and regulations of all insurers
agrees that during the term of this Loan Agreement it will at its own expense (i) keep the Project in a safe
under the policies required to be carried under the provisions of Article V hereof.
condition, (ii) keep the buildings and all other improvements forming a part of the Project in good repair
and in good operating condition, making from time to time, subject to the provisions of this Section 4.6, all If no Default under this Loan Agreement has happened and is continuing, in any instance where
necessary and proper repairs thereto and renewals and replacements thereof, including external and the Borrower in its discretion determines that any items of Equipment or parts thereof have become
structural repairs, renewals, and replacements, and (iii) use the Equipment in the regular course of its inadequate, obsolete, worn out, unsuitable, undesirable, or unnecessary, the Borrower may remove such
business only, within the normal capacity of the Equipment, without abuse, and in a manner described in items of Equipment or parts thereof from the Mortgaged Property and sell, trade in, exchange, or otherwise
the manufacturer’s warranty thereof, and cause the Equipment to be maintained in accordance with the dispose of them (as a whole or in part) without any responsibility or accountability to the Issuer therefor,
manufacturer’s then currently published standard maintenance contract and recommendations. The provided that the Borrower will:
Borrower may, also at its own expense, from time to time make any Modifications to the Project it may
(a) Substitute and install anywhere in the Project items of replacement equipment or related
deem desirable for its business purposes that do not, in the opinion of an Independent Architect filed with
property having equal or greater value or utility (but not necessarily having the same function) in the
the Trustee, adversely affect the operation or value of the Project, and provided further, that such
operation of the Project for the purpose for which it is intended, provided such removal and substitution
Modifications shall not cause the Debt Service Coverage Ratio to fall below the required Coverage Test for
will not impair the nature of the Project, all of which replacement equipment or related property will be
any Series of Bonds. Modifications to the Project so made by the Borrower will be on the Mortgaged
free of all liens, security interests, and encumbrances (other than Permitted Encumbrances), will become
Property, will become a part of the Project, and will become subject to the lien of the Mortgages. Any
subject to the security interest of the Mortgages, and will be held by the Borrower on the same terms and
contract for such Modifications that is in an amount in excess of $500,000 will be made only by a contractor
conditions as the items originally constituting Equipment, or
who furnishes performance and labor and material payment bonds in the full amount of such contract, made
by the contractor thereunder as the principal and a surety company or companies rated “A” or higher by (b) In the case of (i) the sale of any such Equipment, (ii) the trade-in of such Equipment for
A.M. Best Company, Inc. Such bonds must name the Borrower, the Issuer, and the Trustee as obligees, other machinery, furnishings, equipment, or related property not to become part of the Equipment and
and all Net Proceeds received under such bonds will be paid over to the Trustee and deposited in the Project subject to the security interest of the Mortgages, or (iii) any other disposition thereof, the Borrower will pay
Account of the Project Fund to be applied to the completion of the Modifications. Such money held by the to the Trustee the proceeds of such sale or disposition or an amount equal to the credit received upon such
Trustee in the Project Account of the Project Fund will be invested from time to time, as provided in Article trade-in for deposit into the applicable Special Redemption Account of the Bond Fund. In the case of the
VI of the Indenture. sale, trade-in, or other disposition of any such Equipment to the Borrower, or an Affiliate, the Borrower
will pay to the Trustee an amount equal to the greater of the amounts and credits received therefor or the
The Borrower will execute a conditional assignment directing the architect who has prepared any
fair market value thereof at the time of such sale, trade-in, or other disposition (as certified by the Borrower,
plans and specifications for any Modifications to make available to the Trustee a complete set of the plans
with evidence of the basis therefor) for deposit into the applicable Special Redemption Account of the Bond
and specifications, which assignment will be effective only upon a Default hereunder by the Borrower.
Fund.
Each construction contract for an amount in excess of $100,000 executed by the Borrower for construction
of any Modifications must contain a provision that, or by separate agreement such contractors must agree Except to the extent that amounts are deposited into the Bond Fund as provided in the preceding
that, upon a Default by the Borrower hereunder, such contracts with the contractors and/or sub-contractors subsection (b), the removal from the Project of any portion of the Equipment pursuant to the provisions of
will be deemed assigned to the Trustee should the Trustee so direct and in which case the Trustee will be this Section will not entitle the Borrower to any abatement or diminution of the Loan Payments or
responsible for the carrying out of all the terms and conditions thereof in place of the Borrower in such Additional Payments payable under Section 3.2 hereof.
contracts. The Borrower covenants to include such conditional assignments in all contracts and subcontracts If prior to such removal and disposition of items of Equipment from the buildings and the
executed for work to be performed on the Mortgaged Property in excess of $100,000. Mortgaged Property, the Borrower has acquired and installed machinery, furnishings, equipment, or related
The Borrower further agrees that at all times during the construction of Modifications that cost in property with its own funds that become part of the Equipment and subject to the security interest of the
excess of $500,000, the construction contract for such Modifications must be on a “fixed” or “guaranteed Mortgages and that have equal or greater utility, but not necessarily the same functions, as the Equipment
maximum price” basis and the Borrower must maintain or cause to be maintained in full force and effect to be removed, the Borrower may take credit to the extent of the amount so spent by it against the
Builder’s Risk-Completed Value Form insurance for the full insurable value of such Modifications. The requirement that it either substitute and install other machinery and equipment having equal or greater value
Borrower will not permit any mechanics’ or materialmen’s or other statutory liens to be perfected or remain or that it make payment to the Trustee for deposit into the applicable Special Redemption Account of the
against the Project for labor or materials furnished in connection with any Modifications so made by it, Bond Fund.
provided that it will not constitute a Default hereunder upon such lien being filed, if the Borrower notifies The Borrower will promptly provide written notice to the Trustee of each such removal,
promptly the Trustee, in writing, of any such liens, and the Borrower in good faith and in accordance with substitution, sale, or other disposition referred to in subsection (b) of the Section and will pay to the Trustee
applicable law contests promptly such liens in the same manner as is provided for the contest of Impositions such amounts as are required by the provisions of subsection (b) of this Section to be paid promptly into
in Section 4.9 hereof; and in such event the Borrower may permit the items so contested to remain the Bond Fund after the sale, trade-in, or other disposition requiring such payment; provided, that no such
undischarged and unsatisfied during the period of such contest and any appeal therefrom. report and payment need be made until the amount to be paid into the applicable Special Redemption
The Borrower will not do or permit others under its control to do any work in or about the Project Account of the Bond Fund on account of all such sales, trade-ins, or other dispositions not previously
or related to any repair, rebuilding, restoration, replacement, alteration of, or addition to the Project, or any reported in the aggregate has a value of at least $100,000, and then only to the extent of such excess. All

26 27

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amounts deposited in the Bond Fund pursuant to this Section 4.6 will be used to redeem Bonds pursuant to (b) If at any time after the date hereof there shall be assessed or imposed (i) a tax or assessment
Section 3.02 of the Indenture on the earliest date Bonds can be redeemed at par. The Borrower will not on the Project in lieu of or in addition to the Impositions payable by the Project pursuant to subparagraph
remove, or permit the removal of, any of the Equipment from the buildings or Mortgaged Property except (a) hereof or (ii) a license fee, tax or assessment imposed on the Trustee and measured by or based, in whole
in accordance with the provisions of this Section 4.6. The Trustee is not responsible for verifying or or in part, upon the amount of the outstanding Notes, then all such taxes, assessments or fees shall be
validating any amounts received pursuant to this Section 4.6. deemed to be included within the term “Impositions,” as defined in subparagraph (a) hereof, and the
Borrower shall pay and discharge the same as herein provided with respect to the payment of Impositions.
Section 4.7. Management of the Project. The Borrower shall initially retain the Manager
identified in the Indenture to manage the Project pursuant to the Management Agreement. The fees of the (c) Subject to the applicable laws of the State of Oklahoma, the Borrower shall have the right
Manager shall be payable solely from available money in the Revenue Fund or the Surplus Fund established before any delinquency occurs to contest or object to the amount or validity of any Imposition by
in the Indenture, as applicable, and from other money of the Borrower. No Person shall be engaged by the appropriate legal proceedings, but this shall not be deemed or construed in any way as relieving, modifying,
Borrower as the Manager (other than the initial Manager named in the Indenture) unless such Person or a or extending the Borrower’s covenant to pay any such Imposition at the time and in the manner provided
principal officer (or in the case of a limited liability company, manager) thereof (a) shall have at least 5 in this Section 4.9, unless the Borrower has given prior written notice to the Trustee of the Borrower’s
years of demonstrated experience in the management and leasing of senior living facilities and (b) have its intent to so contest or object to an Imposition, and unless, at the Trustee’s sole option, (i) the Borrower shall
employees bonded for not less than $500,000 as required by Section 5.1(h) hereof. The Borrower shall certify to the Trustee that the legal proceedings shall conclusively operate to prevent the sale of the Project,
instruct the Manager that all Project Revenues collected by the Manager shall be remitted to the Trustee not or any part thereof, to satisfy such Imposition prior to final determination of such proceedings; (ii) the
later than 3 Business Days following receipt and all management agreements entered into by the Borrower Borrower shall furnish a good and sufficient bond or surety satisfactory to the Trustee; or (iii) the Borrower
shall be subject to cancellation by the Trustee at any time without the payment of any penalty or liability shall have provided a good and sufficient undertaking as may be required or permitted by law to accomplish
upon the occurrence of a Default under this Loan Agreement. In the event any Management Agreement a stay of such proceedings.
is terminated, the Borrower shall manage the Project itself until such time as it can engage a qualified
(d) The Borrower shall deposit or cause to be deposited with the Trustee into the Insurance
successor Manager to manage the Project in accordance with the provisions of this Section. The Borrower
and Tax Escrow Fund amounts sufficient to pay the annual Impositions as set forth in the Budget to be next
shall so engage a successor Manager on the earliest practicable date. Prior to entering into a contract with
due on the Project, in accordance with the provisions of the Indenture. The Trustee shall be under no
any successor Manager, the Borrower must first deliver to the Trustee (i) a Favorable Opinion of Bond
obligation to verify or review any bills, statements or other documents relating to Impositions. Upon
Counsel regarding the proposed Management Agreement and (ii) a certificate of the proposed successor
receipt of a requisition of the Borrower, the Trustee shall, so long as no Default has occurred and be
manager stating that it has reviewed, understands, and will comply with the restrictions contained in this
continuing, pay such amounts as may be due thereunder out of the Insurance and Tax Escrow Fund. If any
Loan Agreement.
time and for any reason the funds so deposited are or will be insufficient to pay such amounts as may then
Section 4.8. Forbearance and Deferral of Fees. The Borrower hereby agrees that it, any or subsequently be due, the Trustee shall notify the Borrower, and the Borrower shall immediately deposit
member of the Borrower, and any Manager which shall be caused by the Borrower, shall forbear from or cause to be deposited an amount equal to such deficiency with, or as directed by, the Trustee, which
taking any management, administration, development or other fees, or any portions thereof, in the event deposit may be from amounts available in the Surplus Fund. If the Borrower fails to deposit or cause to
and to the extent that money in the Revenue Fund are insufficient in any month to make all current and be deposited sums sufficient to fully pay such Impositions at least 30 days before delinquency thereof, the
deferred deposits (other than deposits to the Surplus Fund) provided in the Indenture, that such fees will be Trustee shall transfer to the Insurance and Tax Escrow Fund from the Surplus Fund the amount of such
deferred upon the occurrence of the events set forth in the Indenture, and that the payment of such fees will deficiency, if available in the Surplus Fund. In addition the Trustee may, at the Trustee’s election, but
be made in accordance with Sections 5.04 and 5.19 of the Indenture. The Borrower agrees that any without any obligation to do so, advance any amounts required to make up the deficiency, which advances,
management agreement entered into with respect to the Project during the term of this Loan Agreement if any, shall be secured by the Mortgages and shall be repayable to the Trustee as herein elsewhere provided.
shall be subject to this Section and shall contain provisions consistent herewith.
(e) The Borrower covenants and agrees not to suffer, permit or initiate the joint assessment of
Section 4.9. Taxes and Impositions. the real and personal property or any other procedure whereby the lien of the real property taxes and the
lien of the personal property taxes shall be assessed, levied or charged to the Project as a single lien.
(a) Subject to paragraph (c) of this Section 4.9, the Borrower agrees to pay, prior to
delinquency, all real property taxes and assessments, general and special, and all other taxes and Section 4.10. Utilities. The Borrower shall pay, or cause to be paid, when due, all utility
assessments of any kind or nature whatsoever, which are assessed or imposed upon the Project, or become charges that are incurred for the benefit of the Project or which may become a charge or lien against the
due and payable, and which create, may create or appear to create a lien upon the Project, or any part Project for gas, electricity, water or sewer services furnished to the Project and all other taxes, assessments
thereof, or upon any personal property, equipment or other facility used in the operation or maintenance or charges of a similar nature, whether public or private, affecting the Project or any portion thereof, whether
thereof (all of which taxes, assessments and other governmental and non-governmental charges of like or not such taxes, assessments or charges are liens thereon.
nature are hereinafter referred to as “Impositions”); provided, however, that if, by law, any such Imposition
is payable, or may at the option of the taxpayer be paid, in installments, the Borrower may pay the same Section 4.11. Hazardous Waste Covenant. In addition to and without limitation of all other
representations, warranties and covenants made by the Borrower under this Loan Agreement, the Borrower
together with any accrued interest on the unpaid balance of such Imposition in installments as the same
further represents, warrants and covenants that the Borrower will not use Hazardous Substances on, from
become due and before any fine, penalty, interest or cost may be added thereto for the nonpayment of any
or affecting the Project in any manner that violates Environmental Laws, and that to the best of the
such installment and interest. Payments made by the Trustee on behalf of the Borrower from funds held
Borrower’s knowledge, no tenant, subtenant, prior tenant, prior subtenant, prior owner or prior manager
under the Indenture in the Insurance and Tax Escrow Fund upon delivery by the Borrower to the Trustee
of a requisition, therefor, executed by a Borrower Representative, shall, to the extent of such payments, have used Hazardous Substances on, from, or affecting the Project in any manner that violates any
Environmental Law. Without limiting the foregoing, the Borrower shall not cause or permit the Project or
discharge the Borrower’s obligations hereunder.
any part thereof to be used to generate, manufacture, refine, transport, treat, store, handle, dispose of,
28 29

transfer, produce or process Hazardous Substances, except in compliance with all Environmental Laws, nor the Replacement Reserve Amount. The Borrower shall revise the Replacement Reserve Amount (and
shall the Borrower cause or knowingly permit, as a result of any intentional act or omission on the part of advise the Trustee of the revised Replacement Reserve Amount) based on the recommendation of the
the Borrower, the Manager or any tenant or subtenant, a release of Hazardous Substances onto the Project. consulting engineer and the Borrower shall promptly implement any recommendations contained in the
The Borrower shall comply with and require compliance by the Manager and all tenants and subtenants Needs Assessment Analysis to the maximum extent practicable.
with all Environmental Laws and, shall obtain and comply with, and require that the Manager and all tenants
Section 4.13. Trade Payables Covenant. The Borrower covenants (the “Trade Payables
and subtenants obtain and comply with, any and all approvals, registrations or permits required thereunder.
Covenant”) that, commencing with the first full fiscal quarter following the issuance of the Series 2017
The Borrower shall conduct and complete all investigations, studies, sampling and testing, and all remedial,
Bonds, it shall maintain at least 80% of its trade accounts payable at less than 60 days, provided that any
removal and other action required by a governmental authority under any applicable Environmental Law
trade account payable that is the subject of a bona fide dispute, the resolution of which is being diligently
to clean up and remove all Hazardous Substances on, from or affecting the Project in accordance with all
pursued by the Borrower, shall be excluded from such computation. For the purposes of this Section “trade
applicable federal, state and local laws, ordinances, rules and regulations. The Borrower shall defend,
accounts” means those trade accounts payable with respect to the operation of the Project as determined by
indemnify and hold harmless the Issuer, the Underwriter, and the Trustee from and against any claims,
generally accepted accounting principles.
demands, penalties, fines, liabilities, settlements, damages, costs or expenses of whatever kind or nature,
known or unknown, contingent or otherwise, arising out of, or in any way related to, (a) the presence, (a) Testing Compliance. Compliance with the Trade Payables Covenant shall be tested by
disposal, release or threatened release of any Hazardous Substances that are on or from the Project that the Borrower: (i) at the end of each fiscal quarter based on the Borrower’s unaudited financial statements
affect the soil, water, vegetation, buildings, personal property, persons, animals or otherwise, (b) any required pursuant to Section 6.9(a)(i) hereof, and (ii) at the end of each Fiscal Year based on the Borrower’s
personal injury (including wrongful death) or property damage (real or personal) arising out of or related Audited Financial Statements required pursuant to Section 6.9(a)(ii) hereof.
to such Hazardous Substances on or from the Project, and/or (c) any violation of laws, orders, regulations, (b) Failure to Meet Trade Payables Covenant. If the Trade Payables Covenant is not met at
requirements or demands of government authorities, or written requirements of the Issuer and the Trustee, the end of any fiscal quarter or Fiscal Year, and is not remedied within 30 days, the Borrower shall, within
which are based upon or in any way related to such Hazardous Substances or Environmental Laws, 60 days of receipt of the financial statement showing such deficiency, complete a report setting forth in
including, without limitation, reasonable attorney and consultant fees, investigation and laboratory fees, detail the reasons for such deficiency and shall adopt a specific plan setting forth steps designed to meet the
court costs and litigation expenses. In the event the Project is foreclosed upon, or a deed in lieu of Trade Payables Covenant by the end of the second quarter following the date such report and plan are
foreclosure is tendered, the Borrower shall deliver the Project in a manner and condition that shall conform required. If at the end of such second quarter the Borrower is still not in compliance with the Trade Payables
with all applicable federal, state and local laws, ordinances, rules or regulations affecting the Project, Covenant, the Borrower shall, in accordance with Section 4.15, employ a Management Consultant within
including but not limited to Environmental Laws. The provisions of this paragraph shall be in addition to 45 days of the delivery to the Trustee of the financial statement demonstrating noncompliance with the
any and all other obligations and liabilities the Borrower may have to the Issuer and the Trustee at common Trade Payables Covenant. Payment of the fees of the Management Consultant shall be deemed an
law or under the Bond Documents, and shall survive the termination of this Loan Agreement and defeasance Operating Expense. The Management Consultant shall, within 90 days of its engagement by the Borrower,
of the Bonds. prepare recommendations with respect to the operations of the Project such that the Borrower will comply
The indemnifications and protections set forth in this Section shall be extended, with respect to the with the Trade Payables Covenant. No Default shall occur if the Borrower’s plan and, if required, the
Issuer, to its Governing Body, officers, employees, agents and persons under the Issuer’s control or Management Consultant’s recommendations, are delivered and followed (to the extent possible and
supervision, with respect to the Trustee and the Underwriter, to any of their respective directors, officers, consistent with the charitable mission of the Borrower and in compliance with Section 4.18 hereof) pursuant
employees, agents and persons under their control or supervision. to this Section.
Anything to the contrary in this Loan Agreement notwithstanding, the covenants of the Borrower Section 4.14. Liquidity Covenant. The Borrower covenants that it will calculate the Days’ Cash
contained in this Section shall remain in full force and effect after the termination of this Loan Agreement on Hand of the Borrower as of each Testing Date. The Borrower shall deliver a certificate of a Borrower
and the defeasance of the Bonds until the later of (a) the expiration of the period stated in the applicable Representative setting forth such calculation as of each Testing Date to the Trustee not less than 45 days
statute of limitations during which a claim or cause of action may be brought and (b) payment in full or the after such Testing Date.
satisfaction of such claim or cause of action and of all expenses and charges incurred by the Issuer or the The Borrower is required to conduct its business so that on each Testing Date the Borrower shall
Trustee relating to the enforcement of the provisions herein specified. have no less than 30 Days’ Cash on Hand on such Testing Date (the “Liquidity Requirement”).
For the purposes of this Section, the Borrower shall not be deemed an employee, agent or servant If the amount of Days’ Cash on Hand as of any Testing Date is less than the Liquidity Requirement,
of the Issuer, the Underwriter or the Trustee or a person under the Issuer’s, the Underwriter’s or the the Borrower shall, in accordance with Section 4.15, retain a Management Consultant. Payment of the
Trustee’s control or supervision. fees of the Management Consultant shall be deemed an Operating Expense. The Management Consultant
Section 4.12. Needs Assessment Analysis. The Borrower will contract for a Needs Assessment shall prepare recommendations with respect to the operations of the Project and the sufficiency of the rates,
Analysis to be prepared with respect to the Project every 5 years from the date of this Loan Agreement and fees and charges imposed by the Borrower.
then will submit copies of the report to the Trustee and the Rating Agency. The Needs Assessment The Management Consultant’s report shall (a) include the projection of the Project Revenues,
Analysis must be conducted and prepared by a consulting engineer and that, in the objective and reasonable Operating Expenses, Net Income Available for Debt Service and Days’ Cash on Hand on a quarterly basis
opinion of the Borrower, is experienced in conducting needs assessment analyses for multifamily projects. for not less than the next two Fiscal Years, and (b) make such recommendations to the Borrower as the
Such Needs Assessment Analysis shall identify the major maintenance requirements (including the Management Consultant believes are appropriate to enable the Borrower to increase the Days’ Cash on
replacement of machinery and appliances), for the next 5 years and the estimated costs thereof and include Hand to satisfy the Liquidity Requirement for each Testing Date. If, in the judgment of the Management
recommendations for (a) the monthly amount to be deposited to the Repair and Replacement Fund and (b) Consultant, it is not possible for the Borrower to meet such requirements, the report of the Management
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B-8
Consultant shall so indicate and shall project the Days’ Cash on Hand that could be achieved if the a vacant unit that was most recently occupied by a Low Income Tenant is treated as rented and occupied
recommendations of the Management Consultant are followed. Continuous retention of a Management by a Low Income Tenant until reoccupied, at which time the character of such unit shall be redetermined.
Consultant during the years that are the subject of the Management Consultant’s report shall not be required,
(b) No tenant qualifying as a Low Income Tenant shall be denied continued occupancy of a
however, if a Borrower Representative delivers a certificate to the Trustee, within 45 days after each Testing
unit in the Project because, after commencement of occupancy, such tenant's Adjusted Income increases to
Date, setting forth the actual results for such Testing Date (which may be based on unaudited financial
exceed the qualifying limit for Low Income Tenants; however, should a Low Income Tenant's Adjusted
statements) and such results show that the Days’ Cash on Hand as projected by the Management Consultant
Income, as of the most recent determination thereof, exceed 140% of the then applicable income limit for
is being met. The Borrower shall, to the extent possible and consistent with the charitable mission of the
a Low Income Tenant of the same family size and such Low Income Tenant constitutes a portion of the
Borrower and in compliance with Section 4.18 hereof, follow the recommendations of the Management
20% requirement of paragraph (a) of this Section, the next available unit of comparable or smaller size shall
Consultant.
be rented to (or held vacant and available for immediate occupancy by) a Low Income Tenant and such
Failure of the Borrower to satisfy the Liquidity Requirement shall not constitute a Default under new Low Income Tenant will then constitute a portion of the 20% requirement of paragraph (a) of this
this Loan Agreement unless (a) the Borrower fails to engage the Management Consultant or (b) the Section; and, further, until such next available unit is rented to a tenant who is a Low Income Tenant, the
Borrower fails to implement its reasonable recommendations, to the extent possible and consistent with the former Low Income Tenant who has ceased to qualify as such shall be deemed to continue to be a Low
charitable mission of the Borrower and in compliance with Section 4.18 hereof, as required by this Loan Income Tenant for purposes of the 20% requirement of paragraph (a) of this Section.
Agreement.
(c) The Borrower will obtain, complete, and maintain on file such applications, certifications
Section 4.15. Approval of Management Consultants. Upon selecting a Management Consultant or other information obtained from residents as are necessary for the Borrower to make the certifications to
as required under the provisions of this Loan Agreement, the Borrower will notify the Trustee of such the Trustee described in Section 4.18(d) below.
selection. The Trustee shall, as soon as practicable but in no case longer than five Business Days after
(d) The Borrower will prepare and submit to the Trustee annually on each January 1
receipt of such notice, notify the Owners of all Bonds Outstanding under the Indenture of such selection.
(commencing January 1, 2019), a Compliance Monitoring Report covering the previous twelve calendar
Such notice shall (i) include the name of the Management Consultant and a brief description of the
months or, in the case of the initial certificate, as of January 1, 2019, in substantially the form attached
Management Consultant, (ii) state the reason that the Management Consultant is being engaged including
hereto as Exhibit E executed by the Borrower. The Borrower shall retain copies of all Compliance
a description of the covenant(s) of this Loan Agreement that require the Management Consultant to be
Monitoring Reports submitted in compliance with this subsection (d).
engaged, and (iii) state that an Owner will be deemed to have consented to the selection of the Management
Consultant named in such notice unless such Owner submits an objection to the selected Management
Consultant in writing (in a manner acceptable to the Trustee) to the Trustee within 15 days of the date that
the notice is sent to the Owners. No later than two Business Days after the end of the 15-day objection
period, the Trustee shall notify the Borrower of the number of objections and the percentage of the aggregate
principal amount of the Outstanding Bonds represented by such objections. If the Owners of 66.6% or
more in aggregate principal amount of the Outstanding Bonds have been deemed to have consented to the
selection of the Management Consultant or have not responded to the request for consent by the end of the
15-day objection period, the Borrower shall engage the Management Consultant within three Business Days
of receipt of the Trustee’s notice. If the Owners of more than 33.4% in aggregate principal amount of the
Outstanding Bonds have objected to the Management Consultant selected, the Borrower shall select another
Management Consultant that may be engaged upon compliance with the procedures of this Section 4.15.
Section 4.16. Maintenance of Rating. The Borrower covenants that it will provide the
necessary information and pay such rating fees as are necessary to maintain the initial rating on each Series
of Bonds that are then rated; provided that it shall not be a default under this covenant if such initial rating
is decreased or withdrawn by the Rating Agency providing such rating.
Section 4.17. Rating Application. The Borrower covenants that it will seek a rating from a
Rating Agency of any Series of Bonds that is then unrated each year after a determination is made by the
Borrower in consultation with the Underwriter that an investment grade rating is reasonably obtainable,
until achievement of an investment grade rating for such Series of Bonds. The Borrower also covenants
that if the Borrower receives a preliminary indication from such Rating Agency that such Series of Bonds
will not be assigned an investment grade rating, the Borrower shall withdraw its request to have such Rating
Agency assign a rating to such Series of Bonds.
Section 4.18. Affordability Covenant. The Borrower hereby covenants and agrees as follows:
(a) Beginning on January 1, 2019, no less than 20% of the total number of units of the Project
shall at all times be rented to and occupied by Low Income Tenants. For the purposes of this paragraph (a),

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ARTICLE V The Borrower shall deposit or cause to be deposited with the Trustee to the Insurance and Tax
Escrow Fund, in accordance with Sections 5.04 and 5.16 of the Indenture, amounts sufficient to pay when
INSURANCE; DAMAGE, DESTRUCTION AND CONDEMNATION; SALE OF FACILITIES; due the estimated aggregate annual insurance premiums on all policies of insurance required by this Loan
USE OF NET PROCEEDS Agreement. Such amounts shall be disbursed as provided in the Indenture.
Section 5.1. Required Insurance. The Borrower shall procure and maintain continuously in Section 5.3. Insurance Proceeds. After the occurrence of any casualty to the Project, or any
effect during the term of this Loan Agreement, at its sole cost and expense, policies of insurance with part thereof, the Borrower shall give prompt written notice thereof to the Trustee and each insurer and
respect to its business, the Project and the operation thereof, insuring against such hazards and risks promptly submit a claim to each insurer for payment of Insurance Proceeds; the Borrower shall provide the
(including but not limited to public liability and employee dishonesty) and in amounts not less than are Trustee with a copy of such claims.
customary in the case of corporations engaged in the same or similar activities and for a prudent owner of
(a) All Insurance Proceeds with respect to the Project in excess of $100,000 shall be paid to
properties comparable to those comprising the Project and located in the same area as the Project is located.
the Trustee, and each insurer is hereby authorized and directed to make payment for any such loss directly
Without limiting the generality of the foregoing, and subject to the unavailability of coverage as provided
to the Trustee instead of payment to the Borrower. All Insurance Proceeds with respect to the Project of
in Section 5.5(b), the Borrower shall maintain such insurance with one or more reputable insurance
$100,000 or less shall be paid to the Borrower. Any Insurance Proceeds paid to the Trustee shall be applied
companies meeting the requirements set forth in Section 5.2 hereof with respect to the Project.
as provided in this Section 5.3 and Section 5.23 of the Indenture. Damage to or destruction of the Project
Section 5.2. Delivery of Insurance Policies; Payment of Premiums. All policies of insurance shall not affect the lien of the Mortgages or the obligations of the Borrower hereunder, and the Trustee is
provided for in Section 5.1 shall be issued by companies licensed to do business in the State of Oklahoma, authorized, at the Trustee’s option, upon written notice to the Borrower, to compromise and settle all loss
and such insurance companies must have a rating from the Rating Agency of no less than “BBB” or from claims on said policies if not adjusted promptly by the Borrower.
A.M. Best Company, Inc. of no less than “A-” (a “Qualified Insurer”). Such policies shall be at least in
(b) Notwithstanding the application of Insurance Proceeds to the payment of a portion of the
amounts as required by the provisions of this Loan Agreement. All policies of insurance shall name the
Bonds pursuant to the Indenture, any unpaid portion of the Bonds shall remain in full force and effect, and
Trustee as a named or an additional insured and shall have (i) attached thereto a lender’s loss payable
the Borrower shall not be excused from the Loan Payments relating thereto. If any act or occurrence of
endorsement for the benefit of the Trustee, which endorsement indicates that all insurance proceeds in
any kind or nature on which insurance was not obtained or obtainable shall result in damage to or loss or
excess of $100,000 are payable directly to the Trustee and (ii) a clause in favor of the Trustee stating that
destruction of the Project, the Borrower shall give immediate notice thereof to the Trustee and, unless
there can be no changes, including modifications, amendments or cancellations, to the respective policy
otherwise so instructed by the Trustee, shall promptly, at the Borrower’s sole cost and expense, restore,
without 30 days prior written notice to the Trustee. The Borrower shall furnish the Trustee with an original
repair, replace and rebuild the Project as nearly as possible to its value, condition and character immediately
or certified copies of certificates of insurance for all required insurance.
prior to such damage, loss or destruction, in accordance with plans and specifications submitted to and
The Borrower shall not obtain (i) any umbrella or blanket liability or casualty insurance policy approved by the Trustee, provided that such Restoration, repair, replacement and rebuilding is permitted by
unless, in each case, the Trustee’s interest is included therein as provided in this Loan Agreement and such law.
policy is issued by a Qualified Insurer, or (ii) separate insurance concurrent in form or contributing in the
(c) Except as provided below, nothing contained in this Loan Agreement shall be deemed to
event of loss with that required in Section 5.1 to be furnished by, or which may be reasonably required to
excuse the Borrower from repairing or maintaining the Project, as provided herein. The application or
be furnished by, the Borrower. In the event the Borrower obtains separate insurance or an umbrella or a
release by the Trustee of any Insurance Proceeds shall not cure or waive any Default or notice of default
blanket policy, the Borrower shall notify the Trustee of the same and shall cause certified copies of each
under this Loan Agreement or invalidate any act done pursuant to such notice. If the Insurance Proceeds
policy to be delivered as required in Section 5.1. Any blanket policy shall specifically allocate to the
are not applied to the Restoration of the Project, the Borrower shall not be required to restore, rebuild,
Project the amount of coverage from time to time required hereunder and shall otherwise provide the same
replace or repair the portion of the Project damaged or destroyed, and the failure to do so shall not constitute
protection as would a separate policy insuring only the Project in compliance with the provisions of Section
a Default under this Loan Agreement.
5.1.
(d) All net Insurance Proceeds shall be applied, at the option of the Borrower so long as no
Prior to the expiration of each such policy, the Borrower shall furnish the Trustee with a certificate
Default has occurred and is continuing, either (i) to the payment of the Bonds in accordance with the
of the Borrower confirming the reissuance of the existing policy or the issuance of a new policy continuing
Indenture, or (ii) to the Restoration of the Project (if permitted by law, and to the extent not permitted by
insurance in force, as required by this Loan Agreement. In all cases, the Borrower shall immediately give
law, such Insurance Proceeds shall be applied to the payment of the Bonds), except that (A) the proceeds
notice to the Trustee of any notice received by the Borrower of any expiration, cancellation or modification
of any business interruption or loss of rent insurance shall be deposited in the Revenue Fund under the
of, or material reduction of coverage under, any such policy. The Borrower shall not consent to any
Indenture and applied as therein provided and (B) any surplus Insurance Proceeds shall be applied to the
material amendment to or the cancellation of any such policy.
payment of the Bonds.
In the event the Borrower fails to provide, maintain, keep in force or deliver and furnish to the
(e) Unless the Borrower exercises its option to apply the Insurance Proceeds to the payment
Trustee the certificates of insurance required by this Loan Agreement or make the deposits required under
of the Bonds in accordance with the provisions of the Indenture, and so long as any Bonds shall be
this Section 5.2, the Trustee may, but is not required to procure such insurance as is provided for in Section
outstanding and unpaid, and whether or not Insurance Proceeds are sufficient or available therefor, the
5.1, and the Borrower will immediately pay all premiums thereon promptly upon demand by the Trustee
Borrower shall promptly commence and complete with all reasonable diligence the Restoration of the
(to the extent such amounts are not paid from money in the Insurance and Tax Escrow Fund held under the
Project as nearly as possible to the same value and revenue producing capacity that existed immediately
Indenture), and, until such payment is made by the Borrower, the amount of all such premiums shall be
prior to such loss or damage in accordance with plans and specifications prepared by an independent
secured by this Loan Agreement.
architect (“Restoration Plans”), and in compliance with all legal requirements. Any Restoration in excess

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B-9
of $100,000 shall be effected in accordance with procedures to be first submitted to and approved by the all legal requirements, free and clear of all mechanic’s liens and other liens or claims for
Controlling Owners as provided in Section 5.4 hereof. The Borrower shall pay all costs of such lien that are not Permitted Encumbrances,
Restoration to the extent not paid from Net Proceeds of Insurance Proceeds available therefor pursuant to
(v) A certificate of the Borrower Representative confirming it has obtained a
this Section 5.3. If such Restoration is not permitted by law, the Insurance Proceeds shall be applied to
waiver of any rights of subrogation from any insurer under any Insurance Policy which, at
the payment of the Bonds.
any time claims that no liability exists as to the Borrower or the owner or insured under
(f) To exercise the option provided in paragraph (d) above, within thirty (30) days following such Insurance Policies, and
the deposit of Insurance Proceeds or awards in accordance with the provisions of the Indenture, the
(vi) Such architect’s and engineer’s certificates, waivers of lien, contractor’s
Borrower shall give written notice of the option it has selected to the Trustee. If such notice is to exercise
sworn statements, title insurance endorsements, surveys, opinions of counsel and such
the option of prepaying the Bonds, the Trustee shall apply the Net Proceeds of such Insurance Proceeds in
other evidences of cost, payment and performance as the Controlling Owners may
the manner provided in Section 5.23 of the Indenture. If such notice is to exercise the option of Restoration
reasonably require and upon which the Trustee may conclusively rely (and have no
or if no such notice is received, the provisions of paragraph (e) above shall control.
obligation to review).
Section 5.4. Disbursement of Insurance Proceeds and Condemnation Awards.
(c) If, within 60 days after the receipt of such Net Proceeds, the Borrower shall fail to furnish
(a) All Net Proceeds of Insurance Proceeds and/or Condemnation Awards received by the sufficient funds and the other items required by paragraph (b) of this Section or if any other Default shall
Trustee as provided in Section 5.3 hereof shall be applied as provided in this Section. then exist or shall occur and be continuing hereunder at any time (whether before or after the
commencement of such Restoration) the Trustee may, and shall at the written request of the Controlling
(b) If the Borrower elects to apply the Insurance Proceeds or Condemnation Awards to the
Owners, declare the entire principal balance of the Bonds or any portion thereof to be immediately due and
payment of the Bonds in accordance with the Indenture, such Insurance Proceeds or Condemnation Awards
payable and to avail itself of any and all remedies afforded hereunder upon a Default, and whether or not
shall be deposited with the Trustee and applied in accordance with the Indenture. If no Default shall exist
the Bonds shall be so accelerated such Net Proceeds, or any portion thereof, then held by the Trustee or
hereunder and if the Borrower has elected Restoration and such Restoration is permitted by law, all Net
other depository hereunder may be applied as provided in the Indenture.
Proceeds in excess of $100,000 shall be deposited in the Project Account of the Project Fund and disbursed
in accordance with the provisions of Section 5.03 of the Indenture to pay or reimburse the Borrower for the (d) No payment made prior to the final completion of the Restoration of the Project in
payment of the costs, fees and expenses incurred for the Restoration of the Project as required under Section accordance with the approved Restoration Plans shall exceed 90% of the value of the work performed from
5.3 hereof; provided that no distribution of Net Proceeds for Restoration shall be made until the Trustee time to time, as such value shall be evidenced by an Independent Architect’s or contractor’s certificate to
shall have received the following: that effect, delivered to the Trustee, upon which the Trustee may conclusively rely; and at all times the
undisbursed balance of such proceeds remaining in the hand of the Trustee or such other depository,
(i) A certificate of the Borrower Representative confirming it has obtained
together with funds deposited or irrevocably committed by or on behalf of the Borrower to pay the cost of
Restoration Plans and procedures for the Restoration of the Project as required by Section
such Restoration, shall be sufficient to pay the entire unpaid cost of the Restoration free and clear of all
5.3(e) hereof,
liens or claims for lien, other than any Permitted Encumbrances evidenced by an Independent Architect’s
(ii) A certificate of the Borrower Representative confirming that the Project or contractor’s certificate to that effect, delivered to the Trustee, upon which the Trustee may conclusively
Revenues (including the proceeds of any business interruption or loss of rent insurance and rely.
other funds irrevocably committed to the payment of such amounts) to be received during,
(e) Any surplus that may remain out of such Net Proceeds after payment of all costs, fees and
and after completion of, the Restoration of the Project in accordance with the approved
expenses (including expenses of the Trustee and its counsel, agents, experts or other consultants retained in
Restoration Plans, will be sufficient and available to make all payments and deposits when
connection with such Restoration) of such Restoration shall be applied to the redemption of Bonds as
due hereunder, including without limitation to pay all principal, premium, if any, and
provided in Section 3.01 of the Indenture.
interest on the Bonds when due, to make all required deposits into the Funds and Accounts
required by Section 5.04 of the Indenture, to pay all other Operating Expenses of the (f) The Borrower shall make written monthly progress reports to the Trustee as to the status
Project, and to pay the debt service on any indebtedness (other than the Bonds) then of construction and compliance with the budget prepared in connection with the Restoration of the Project.
outstanding or to be incurred in connection with such Restoration,
Section 5.5. Report of Insurance Consultant; Insurance Commercially Unavailable.
(iii) A certificate of the Borrower Representative confirming it has obtained
(a) The insurance required to be maintained pursuant to this Article V shall be subject to the
construction schedules and budgets and estimates and other evidence to establish the total
annual review of the Insurance Consultant, and the Borrower agrees that it will follow any
amount of the costs, fees and expenses necessary to complete the Restoration of the Project
recommendations of the Insurance Consultant. In order to establish compliance with this Article V, the
in accordance with the approved Restoration Plans, and of the time period required to
Borrower agrees that it will deliver to the Trustee at or prior to the Closing Date and then annually thereafter
complete such Restoration,
within five months after the end of each Fiscal Year, a report of the Insurance Consultant setting forth a
(iv) A certificate from an Independent Architect or contractor appointed by the description of the insurance maintained, or caused to be maintained pursuant to this Article V and then in
Borrower upon which the Trustee may conclusively rely that the Net Proceeds available effect (including any alternative plan as permitted by Section 5.5(b) hereof) and stating whether, in the
therefor together with funds deposited with the Trustee, or irrevocably committed by or on opinion of the Insurance Consultant, such insurance, the manner of providing such insurance and any
behalf of the Borrower, shall be sufficient to fully pay all costs, fees and expenses necessary reductions or eliminations of the amount of any insurance coverage during the Fiscal Year covered by such
for the Restoration of the Project in accordance with the approved Restoration Plans and

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report comply with the requirements of this Article V and adequately protect the Project and the Borrower’s ARTICLE VI
operations.
OTHER AGREEMENTS
(b) In the event that any insurance required by Section 5.1 hereof is commercially unavailable
at a reasonable cost, the Borrower, upon notice to the Trustee, may provide such substitute coverage, if any, Section 6.1. Successor to Issuer. The Issuer will do all things in its power to maintain its
as is recommended by the Insurance Consultant at a reasonable cost. The Borrower shall make a continuing existence or assure the assumption of its obligations hereunder and under the Indenture by any corporation
good faith effort to secure the insurance required by Section 5.1 hereof, and if the insurance becomes or political subdivision succeeding to its powers under the Act.
commercially available at a reasonable cost, the Borrower shall acquire such insurance upon expiration of
Section 6.2. Servicing the Loan; Servicing Agreement. The Controlling Owners may direct
the substitute insurance or as otherwise recommended by the Insurance Consultant.
the Borrower to enter into a Servicing Agreement with a Servicer to perform such functions with respect to
Section 5.6. Obligation to Continue Payments. If prior to full payment of the Bonds (or the servicing of the Loan as may be set forth in such Servicing Agreement. Such functions may include,
provision for payment thereof in accordance with the provisions of the Indenture) the Project or any portion without limitation: assuring the maintenance of insurance as required by this Loan Agreement and the
thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, or title to, or the temporary payment of premiums therefor; inspection of the Project; review of the Borrower’s compliance with this
use of, the Project or any portion thereof shall be taken under the exercise of the power of eminent domain Loan Agreement; monitoring the procedures for the collection of Project Revenues and their remittance to
by any governmental body or any person, firm or corporation acting under governmental authority, the the Trustee; and review of the Borrower’s obligations under the Borrower Documents to assure compliance
Borrower shall nevertheless be obligated to continue to pay the amounts specified in Section 3.2 hereof. with the terms thereof by the Borrower.
Section 5.7. Insufficiency of Net Proceeds. If, in accordance with this Loan Agreement, the Section 6.3. Assignment, Selling and Leasing. Except as otherwise provided in Section 5.9
Borrower elects to repair, restore or replace the Project and the Net Proceeds are insufficient to pay in full hereof and in the Mortgages, after the completion of the acquisition, rehabilitation and equipping of the
the cost of any Restoration, the Borrower will nonetheless complete the work and will pay any cost in Project as described in Section 4.1 hereof, this Loan Agreement may be assigned and the Project sold or
excess of the amount of the Net Proceeds held by the Trustee. The Borrower agrees that if by reason of any leased (other than by reason of foreclosure or deed in lieu of foreclosure), as a whole, by the Borrower only
such insufficiency of the Net Proceeds, the Borrower shall make any payments pursuant to the provisions as permitted by this Section 6.3, subject to each of the following conditions:
of this Section, the Borrower shall not be entitled to any reimbursement therefor from the Issuer, the Trustee,
(a) The assignee, purchaser or lessee shall assume the obligations of the Borrower hereunder
or the Owners, nor shall the Borrower be entitled to any diminution of the amounts payable under Section
and under the other Borrower Documents, in writing to the extent of the interest assigned or sold,
3.2 hereof.
(b) The assignee, purchaser or lessee shall deliver an opinion of Independent Counsel in form
Section 5.8. Cooperation of Issuer. The Issuer shall cooperate fully with the Borrower at the
reasonably satisfactory to the Trustee that the assumption described in paragraph (a) above and any
expense of the Borrower in filing any proof of loss with respect to any insurance policy covering the
replacement mortgage required by (j) below is a valid and enforceable obligation of the assignee, purchaser
casualties described in Section 5.1 hereof and in the prosecution or defense of any prospective or pending
or lessee,
condemnation proceeding with respect to the Project or any part thereof or any property of the Borrower in
connection with which the Project is used and will, to the extent it may lawfully do so, permit the Borrower (c) The Borrower shall, within 10 days after the delivery thereof, furnish or cause to be
to litigate in any proceeding resulting therefrom in the name and on behalf of the Issuer. In no event will furnished to the Issuer and the Trustee a true and complete copy of each assignment, assumption of
the Issuer voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance obligation, or contract of sale, as the case may be,
claim or any prospective or pending condemnation proceeding with respect to the Project or any part thereof (d) The Borrower shall provide a Favorable Opinion of Bond Counsel to the effect that such
without the written consent of the Borrower Representative. assignment, sale or lease does not adversely affect the exclusion from gross income of the recipients thereof
Section 5.9. Sale of Facilities. Notwithstanding anything herein or in the Indenture to the of interest on the Tax-Exempt Bonds for federal income tax purposes,
contrary, the Borrower may sell any separate facility constituting a part of the Project, but only if: (e) No Default with respect to the Bonds Outstanding after such assignment, sale or lease shall
(a) such sale is for at least fair market value, as established by an MAI appraisal submitted to have occurred and be continuing hereunder or under any other Borrower Document, unless such Default is
the Trustee; cured or waived in connection with such assignment, sale or lease, and the Borrower shall deliver a
Compliance Certificate to that effect,
(b) the Debt Service Coverage Ratio is at least equal to the required Coverage Test for the last
Fiscal Year for which Audited Financial Statements are available, after giving effect to such sale, as (f) The delivery to the Trustee of an opinion of Counsel to the effect the successor to the
demonstrated by a Certificate of the Borrower delivered to the Trustee; and Borrower hereunder is (i) a 501(c)(3) organization or a limited liability company whose sole member is a
501(c)(3) organization; and (ii) duly qualified to transact business in the State of Oklahoma and obligated
(c) the Net Proceeds of such sale are deposited into the respective Special Redemption
to maintain an agent in the State of Oklahoma on whom service of process may be made in connection with
Accounts of the Bond Funds to be used to redeem Bonds in accordance with Sections 3.06 and 3.13 of the
any actions against the Borrower arising out of the Borrower Documents,
Indenture.
(g) The Rating Agency shall have provided a Confirmation of Rating on the Bonds with
respect to such assignment, sale or lease,
(h) The Borrower shall have received the Issuer’s consent to such assignment, sale or lease,
(i) The assignee, purchaser or lessee must deliver (A) an opinion or opinions of Independent
Counsel or (B) an endorsement to title policy to the effect that, regardless of the assumption described
38 39

B-10
above, a valid and enforceable first lien on and perfected security interest in the Project and other collateral NATURE OR FORM (THE “ISSUER INDEMNITY LIABILITIES”), BY OR ON BEHALF OF
securing the Bonds will remain and any such assignments and other documents executed for purposes of ANY PERSON ARISING IN ANY MANNER FROM THE TRANSACTION OF WHICH THIS
this Section 6.3 are valid, delivered and enforceable obligations of such parties enforceable in accordance LOAN AGREEMENT IS A PART OR ARISING IN ANY MANNER IN CONNECTION WITH
with their terms, THE PROJECT OR THE FINANCING OF THE PROJECT INCLUDING WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, ARISING FROM (I) THE WORK DONE ON THE
(j) In the case of a sale, (i) Section 3.9 hereof shall be complied with as if the purchaser were
PROJECT OR THE OPERATION OF THE PROJECT DURING THE TERM OF THIS LOAN
the Borrower thereunder and a mortgage from such purchaser shall be executed, delivered and recorded
AGREEMENT; (II) ANY BREACH OR DEFAULT ON THE PART OF THE BORROWER IN
that is the same in all material respects as the Mortgages, and (ii) the opinion of Counsel required by Section
THE PERFORMANCE OF ANY OF ITS OBLIGATIONS UNDER THIS LOAN AGREEMENT,
6.6(c) hereof shall be provided, and
THE MORTGAGES, THE INDENTURE OR ANY BORROWER DOCUMENT (OTHER THAN
(k) The Borrower shall provide to the Issuer and the Trustee any items required by Section 6.4 A FAILURE TO PAY THE PRINCIPAL OF, AND ANY INTEREST AND PREMIUM ON, THE
hereof and not otherwise provided pursuant to clauses (a) through (j) above. LOAN, THE NOTES OR THE BONDS); (III) ANY CLAIM OR CAUSE OF ACTION AGAINST
It is hereby expressly stipulated and agreed that any disposition of the Project by the Borrower in THE ISSUER THAT SEEKS TO IMPOSE LIABILITY ON THE ISSUER WITH RESPECT TO
violation of this Section will be null, void and without effect, will cause a reversion of title to the transferor THE BONDS, THIS LOAN AGREEMENT OR THE INDENTURE THAT EXCEEDS THE
Borrower, and will be ineffective to relieve the Borrower of its obligations under this Loan Agreement and LIABILITY OF THE ISSUER AS SET FORTH IN SECTION 10.1 HEREOF; (IV) THE
any other document, agreement or instrument evidencing or securing the Borrower’s obligations PROJECT OR ANY PART THEREOF; (V) ANY VIOLATION OF ANY CONTRACT,
thereunder. The Borrower will include, verbatim or by incorporation by reference, all requirements and AGREEMENT OR RESTRICTION RELATING TO THE PROJECT EXCLUDING THE
restrictions contained in this Loan Agreement in any deed or other documents transferring any interest in PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON THE BONDS,
the Project to any other person or entity to the end that such transferee has notice of and is bound by such THE NOTES OR THE LOAN; OR (VI) ANY LIABILITY, VIOLATION OF LAW,
restrictions, and will obtain the express written assumption of this Loan Agreement by any such transferee. ORDINANCE OR REGULATION AFFECTING THE PROJECT OR ANY PART THEREOF
OR THE OWNERSHIP OR OCCUPANCY OR USE THEREOF. UPON NOTICE FROM ANY
Section 6.4. Continued Existence. The Borrower agrees that during the term of this Loan ISSUER INDEMNIFIED PARTY, THE BORROWER SHALL DEFEND THE ISSUER
Agreement it will maintain its existence, will continue to be a nonprofit corporation in good standing in the INDEMNIFIED PARTIES IN ANY ACTION OR PROCEEDING BROUGHT IN
State of Oklahoma, will not dissolve or otherwise dispose of all or substantially all of its assets and will not CONNECTION WITH ANY OF THE ABOVE, AND PROVIDE COMPETENT COUNSEL
consolidate with or merge into another legal entity or permit one or more other legal entities to consolidate REASONABLY SATISFACTORY TO THE ISSUER; PROVIDED, HOWEVER, THAT THE
with or merge into it; provided that the Borrower may, without violating the agreement contained in this ISSUER SHALL HAVE THE ABSOLUTE RIGHT TO EMPLOY SEPARATE COUNSEL IN
Section, consolidate with or merge into another legal entity, or permit one or more legal entities to ANY ACTION DESCRIBED IN THE PRECEDING SENTENCE AT THE EXPENSE OF THE
consolidate with or merge into it, or sell or otherwise transfer to another legal entity all or substantially all BORROWER;
of its assets as an entirety and thereafter dissolve; provided (a) that a Favorable Opinion of Bond Counsel
is provided regarding such acquisition, consolidation, merger or transfer; (b) that if the surviving, resulting (ii) IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ISSUER
or transferee legal entity, as the case may be, is not the Borrower, then such legal entity shall be a legal INDEMNIFIED PARTIES SHALL NOT INCUR PECUNIARY LIABILITY BY REASON OF
entity organized and existing under the laws of one of the states of the United States of America, shall be a THE TERMS OF THIS LOAN AGREEMENT OR BY REASON OF THE UNDERTAKINGS
501(c)(3) organization or a limited liability company whose sole member is a 501(c)(3) organization, shall REQUIRED OF THE ISSUER AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
be qualified to do business in the State of Oklahoma, shall be a single purpose entity whose only business AND ATTORNEYS HEREUNDER IN CONNECTION WITH THE ISSUANCE OF THE
operations shall be operation of the Project and whose only assets and liabilities shall be the Project (and BONDS, INCLUDING BUT NOT LIMITED TO THE EXECUTION AND DELIVERY OF THE
assets and liabilities related thereto) and the Borrower Documents and permitted debt hereunder, and shall INDENTURE, THIS LOAN AGREEMENT AND ALL OTHER INSTRUMENTS AND
assume in writing in form and substance satisfactory to the Issuer all of the obligations of the Borrower DOCUMENTS REQUIRED TO CLOSE THE TRANSACTION; THE PERFORMANCE OF
under this Loan Agreement and the other Borrower Documents; (c) that in the opinion of Independent ANY ACT REQUIRED OF THE ISSUER INDEMNIFIED PARTIES, BY THIS LOAN
Counsel, this Loan Agreement shall be a valid and enforceable obligation of such surviving, resulting or AGREEMENT; OR THE PERFORMANCE OF ANY ACT REQUESTED OF THE ISSUER
transferee entity; (d) that no Default has occurred and is continuing hereunder; (e) that prior to such INDEMNIFIED PARTIES, BY THE BORROWER OR IN ANY WAY ARISING FROM THE
acquisition, consolidation, merger or transfer, the Borrower shall furnish a Compliance Certificate to the TRANSACTION OF WHICH THIS LOAN AGREEMENT IS A PART OR ARISING IN ANY
Issuer and the Trustee; and (f) the Rating Agency shall have provided a Confirmation of Rating on the MANNER IN CONNECTION WITH THE PROJECT OR THE FINANCING OF THE PROJECT,
Bonds with respect to such acquisition, consolidation, merger or transfer. INCLUDING BUT NOT LIMITED TO THE EXECUTION AND DELIVERY OF THE
INDENTURE, THIS LOAN AGREEMENT AND ALL OTHER INSTRUMENTS AND
Section 6.5. Indemnification. DOCUMENTS REQUIRED TO CLOSE THE TRANSACTION. NEVERTHELESS, IF THE
(a) (i) THE BORROWER COVENANTS AND AGREES TO PROTECT, ISSUER INDEMNIFIED PARTIES SHOULD INCUR ANY SUCH PECUNIARY LIABILITY
INDEMNIFY AND SAVE THE ISSUER, AND ITS RESPECTIVE OFFICIALS, DIRECTORS, WITH RESPECT TO EVENTS OCCURRING AFTER THE DATE HEREOF, THEN IN SUCH
OFFICERS, EMPLOYEES, AGENTS AND ATTORNEYS (EACH AN “ISSUER EVENT THE BORROWER SHALL INDEMNIFY AND HOLD THE ISSUER INDEMNIFIED
INDEMNIFIED PARTY”) HARMLESS FROM AND AGAINST ALL LIABILITY, LOSSES, PARTIES HARMLESS AGAINST ALL CLAIMS BY OR ON BEHALF OF ANY PERSON,
DAMAGES, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), ARISING OUT OF THE SAME, AND ALL COSTS AND EXPENSES (INCLUDING
TAXES, CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS AND JUDGMENTS OF ANY WITHOUT LIMITATION REASONABLE FEES AND EXPENSES OF COUNSEL)
INCURRED IN CONNECTION WITH ANY SUCH CLAIM OR IN CONNECTION WITH ANY
40 41

ACTION OR PROCEEDING BROUGHT THEREON, AND UPON TIMELY NOTICE FROM statements made therein by the Borrower, in the light of the circumstances under which
THE ISSUER, THE BORROWER SHALL DEFEND THE ISSUER INDEMNIFIED PARTIES they were made, not misleading;
IN ANY SUCH ACTION OR PROCEEDING, AND PROVIDE COUNSEL SATISFACTORY
(viii) Any declaration of taxability of interest on the Tax-Exempt Bonds or
TO THE ISSUER AND THE BORROWER SHALL PAY THE ISSUER’S EXPENSES
allegations (or regulatory inquiry) that interest on the Tax-Exempt Bonds, is taxable for
INCLUDING PAYMENT OF THE REASONABLE FEES AND EXPENSES OF THE
federal income tax purposes; and
COUNSEL USED BY THE ISSUER; PROVIDED, HOWEVER, THAT THE ISSUER SHALL
HAVE THE RIGHT TO EMPLOY SEPARATE COUNSEL IN ANY ACTION DESCRIBED IN (ix) The Trustee’s acceptance or administration of the trust of the Indenture, or
THE PRECEDING SENTENCE AT THE EXPENSE OF THE BORROWER; AND the Trustee’s exercise or performance of or failure to exercise or perform any of its powers
or duties thereunder or under any of the Bond Documents to which it is a party.
(iii) NOTWITHSTANDING ANY PROVISION OF THIS SECTION 6.5 TO THE
CONTRARY, THE ISSUER AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS Except:
AND ATTORNEYS SHALL BE INDEMNIFIED BY THE BORROWER WITH RESPECT TO (c) In the case of the foregoing indemnification of the Trustee or any related Indemnified Party,
LIABILITIES ARISING FROM THE ISSUER’S OWN GROSS NEGLIGENCE, NEGLIGENCE to the extent such damages are caused by the gross negligence or willful misconduct of such Indemnified
OR BREACH OF CONTRACTUAL DUTY, BUT NOT FOR ANY LIABILITIES ARISING Party.
FROM THE ISSUER’S OWN BAD FAITH, FRAUD OR WILLFUL MISCONDUCT.
(d) In the event that any action or proceeding is brought against any Indemnified Party with
(b) To the fullest extent permitted by law, the Borrower agrees to indemnify, hold harmless respect to which indemnity may be sought hereunder, the Borrower, upon written notice from the
and defend the Trustee and each of its officers, governing members, directors, officials, employees, Indemnified Party (which notice shall be timely given so as not to materially impair the Borrower’s right
attorneys and agents (each an “Indemnified Party”), against any and all losses, damages, claims, actions, to defend), shall assume the investigation and defense thereof, including the employment of counsel
liabilities, reasonable costs and expenses of any nature, kind or character (including, without limitation, reasonably approved by the Indemnified Party, and shall assume the payment of all expenses related thereto,
reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement (to the extent that the with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified
Borrower has consented to such settlement) and amounts paid to discharge judgments) (together with the Party shall have the right to review and approve or disapprove any such compromise or settlement, which
Issuer Indemnity Liabilities, the “Liabilities”) to which the Indemnified Parties, or any of them, may approval shall not be unreasonably withheld. Each Indemnified Party shall have the right to employ
become subject under federal or state securities laws or any other statutory law or at common law or separate counsel in any such action or proceeding and to participate in the investigation and defense thereof.
otherwise, to the extent arising out of or based upon or in any way relating to: The Borrower shall pay the reasonable fees and expenses of such separate counsel.
(i) The Bond Documents or the execution or amendment thereof or in (e) Notwithstanding any transfer of the Project to another owner in accordance with the
connection with transactions contemplated thereby, including the issuance, sale, transfer provisions of this Loan Agreement, the Borrower shall remain obligated to indemnify each Issuer
or resale of the Bonds; Indemnified Party and Indemnified Party pursuant to this Section 6.5 if such subsequent owner fails to
(ii) Any act or omission of the Borrower or any of its agents, contractors, indemnify any party entitled to be indemnified hereunder.
servants, employees or licensees in connection with the Loan or the Project, the operation (f) The rights of any persons to indemnity hereunder and rights to payment of fees and
of the Project, or the condition, environmental or otherwise, occupancy, use, possession, reimbursement of expenses pursuant to Section 10.1 shall survive the final payment or defeasance of the
conduct or management of work done in or about, or from the planning, design, acquisition, Bonds and in the case of the Trustee any resignation or removal. The provisions of this Section shall
installation or construction of, the Project or any part thereof; survive the termination of this Loan Agreement.
(iii) Any lien (other than a Permitted Encumbrance) or charge upon payments Section 6.6. Recording and Filing.
by the Borrower to the Trustee hereunder, or any taxes (including, without limitation, all
ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on (a) At the time of the issuance of each Series of Bonds, the Borrower will cause the filing and
the Issuer or the Trustee in respect of any portion of the Project; recording of all financing statements and other instruments necessary to perfect or maintain the security
interest and lien of the Trustee and the Issuer in the Borrower Documents.
(iv) Any violation of any Environmental Law, rule or regulation with respect
to, or the release of any Hazardous Substance from, the Project or any part thereof during (b) The Trustee agrees that, upon written direction of a Borrower Representative, it will cause
the period in which the Borrower is in possession or control of the Project; to be filed or recorded all necessary continuation statements within the time prescribed by the Uniform
Commercial Code - Secured Transactions of the State of Oklahoma or other state law in order to continue
(v) The enforcement of, or any action taken or not taken by the Trustee related the financing statements and instruments in connection with the security interests and liens identified in this
to remedies under, this Loan Agreement, the Indenture and the other Bond Documents; Loan Agreement, the Mortgages or the Indenture filed and recorded on or before the Closing Date. The
(vi) The defeasance and/or redemption, in whole or in part, of the Bonds; Trustee shall have no duty to determine, at any time, whether the financing statements and instruments filed
and recorded in connection with the security interests and liens identified in this Loan Agreement, the
(vii) Any untrue statement or misleading statement or alleged untrue statement
Mortgages or otherwise were or remain sufficient to perfect or establish such security interests and liens
or alleged misleading statement of a material fact by the Borrower contained in any offering
under applicable law.
statement or document for the Bonds or any of the Bond Documents to which the Borrower
is a party, or any omission or alleged omission from any offering statement or document (c) Not earlier than 60 days nor later than 30 days before each fifth anniversary date after the
for the Bonds of any material fact necessary to be stated therein in order to make the Closing Date, the Borrower shall cause an opinion of Counsel to be given to the Trustee to the effect that
42 43

B-11
all security agreements, financing statements, continuation statements, notices and other instruments to the Manager as fees under the Management Agreement with respect to such Fiscal Year. The Trustee
required by applicable law have been recorded or filed or rerecorded or refiled in such manner and in such does not have a duty to review such financial statements or declare a Default based on the content and does
places as are required by law in order fully to preserve the rights of the Owners and the Trustee in the not have a duty to verify the accuracy of such statements and is solely acting as a repository for the same.
assignment to the Trustee of certain rights under this Loan Agreement pursuant to the Indenture and in the Notwithstanding the quarterly reporting requirements set forth above, compliance with the Coverage Test
Project pursuant to the Mortgages. shall only be tested annually as provided in Section 4.4 of this Loan Agreement, and compliance with the
Liquidity Requirement shall only be tested semi-annually as provided in Section 4.14 of this Loan
(d) The Borrower and the Issuer, at the request of the Borrower or the Trustee, shall execute
Agreement.
and deliver all instruments and shall furnish all information and evidence deemed necessary or advisable
by such Counsel in order to enable such Counsel to render the opinion referred to in subsection (c) of this (b) The Audited Financial Statements submitted pursuant to paragraph (a) hereof shall be
Section. The Borrower shall file and refile and record and rerecord or cause to be filed and refiled and certified as true and correct by the party submitting such statement and shall be reported by a public
recorded and rerecorded all instruments required to be filed and refiled and recorded and rerecorded accounting firm selected by the Borrower.
pursuant to the law of the State of Oklahoma and shall continue or cause to be continued the liens of such
(c) The Borrower will deliver to the Issuer and the Trustee, within 120 days after the end of
instruments for so long as the Bonds shall be outstanding, except as otherwise required in this Loan
each Fiscal Year, a written statement signed by a Borrower Representative stating, as to the signer thereof,
Agreement or the Mortgages.
that (i) a review of the activities of the Borrower during such year and of performance under this Loan
Section 6.7. Nonrecourse to Representatives of Issuer. No deficiency or other personal Agreement has been made under their supervision, and (ii) to the best of the knowledge of such Borrower
judgment, nor any order shall be rendered against the Issuer or any members of the Governing Body, Representative, based on such review, the Borrower has fulfilled all of its obligations throughout such Fiscal
employees or officers of the Issuer, their heirs, personal representatives, successors, transferees or assigns, Year in all material respects, or, if there has been a default in the fulfillment of any such obligation,
as the case may be, in any action or proceeding arising out of this Loan Agreement or the Indenture or any specifying each such Default known to such Borrower Representative and the nature and status thereof.
other Bond Document, or any judgment, order or decree rendered pursuant to any such action or proceeding.
(d) The Borrower shall provide to each Rating Agency with an outstanding rating on the Bonds
Any obligation of the Issuer hereunder is payable by the Issuer solely from the Trust Estate, and nothing in
and to any Owner of more than $500,000 in principal amount of the Bonds that identifies itself to the
this Loan Agreement shall be considered as assigning or pledging any other funds of the Issuer other than
Borrower and provides the Borrower with its contact information copies of any financial statements or other
the Trust Estate.
information described in paragraphs (a) and (c) of this Section 6.9. Upon the written request of the Trustee,
Section 6.8. Amendment of Borrower Documents. Neither the Issuer nor the Borrower shall any Owner of more than $500,000 in principal amount of the Bonds, or any Rating Agency with an
amend, supplement, alter, modify or terminate any Borrower Document, except as otherwise provided in outstanding rating on the Bonds, the Borrower promptly and at its own expense shall obtain and furnish to
such document, without the prior written consent of the Trustee, which may be given only as provided in the Trustee, such Owner or such Rating Agency any information that the Borrower may be entitled to
Article XI of the Indenture. Nothing in this Section shall prohibit any assignment or transfer otherwise request and receive under the Management Agreement or any other agreement or arrangement pertaining
permitted by Section 6.3. to the Project.
Section 6.9. Financial Statements and Reports. Section 6.10. Budget.
(a) The Borrower shall deliver or cause to be delivered to the Trustee, (i) on or before the 45th (a) On or before January 1, 2018 and on or before January 1 of each year thereafter, the
day after the end of each calendar quarter, beginning with the calendar quarter ending March 31, 2018, (A) Borrower shall prepare a Budget of anticipated Project Revenues and Operating Expenses for the
current financial statements prepared on an accrual basis itemizing income and expenses from the Project succeeding Fiscal Year, and shall submit a copy of such Budget to the Trustee. Such Budget shall show
for the previous quarter, and (B) a calculation of the Debt Service Coverage Ratio and Days’ Cash on Hand there to be sufficient income to achieve the Coverage Test provided for in Section 4.4 hereof, provided that
for the calendar quarter then ended based on current unaudited financial statements prepared on an accrual such requirement shall not apply to the extent Deferred Management Fees are required to be paid by the
basis (provided that for the calendar quarters prior to the calendar quarter ending September 30, 2018, the Borrower in accordance with Sections 5.04 and 5.19 of the Indenture regardless of satisfaction of the
calculation of (1) Debt Service Coverage Ratio shall be made using (I) Net Income Available for Debt Coverage Test or the Liquidity Requirement.
Service as derived from the unaudited financial statements for the calendar quarters available at the time
(b) The Budget shall be prepared on a cash basis and should provide a proposed budget for the
such calculation is made and (II) the sum of all amounts scheduled to be deposited with the Trustee pursuant
next Fiscal Year in sufficient detail including income and expenses, deposits to the Funds and Accounts
to Section 3.2(b)(i) hereof as the Annual Debt Service, and (2) Days’ Cash on Hand shall be made using (I)
under the Indenture and this Loan Agreement and any other required funds, and payments of principal of,
Operating Expenses as derived from the unaudited financial statements for the calendar quarters available
premium (if any) and interest on the Bonds. The Budget shall report income on a 30-day lag period and
at the time such calculation is made and (II) the actual number of days elapsed for such calendar quarters;
shall not assume any prepayment on the Bonds. The Budget shall demonstrate sufficient cash flow and
and for the calendar quarters ending September 30, 2018 and thereafter, calculations shall be made using
Project Revenues to pay all required expenses, payments of scheduled interest, principal and premium (if
the unaudited financial statements and the Annual Debt Service for such prior twelve month period), and
any) on the Bonds and the funding of any reserves as required in the flow of funds in Article V of the
(ii) within 120 days after the end of each Fiscal Year of the Borrower, Audited Financial Statements of the
Indenture prior to the release of any funds from the Surplus Fund. The Budget shall be certified in writing
Borrower prepared on an accrual basis, which shall include a balance sheet, income statement and a
as true and correct by the Borrower.
statement of sources and uses of funds for the preceding Fiscal Year, together with a certificate of the
Borrower and the Certified Public Accountants reporting on such Audited Financial Statements in (c) The Budget may be amended from time to time, by the Borrower, during the course of the
substantially the form of Exhibit C setting forth (A) the calculation of the Debt Service Coverage Ratio and Fiscal Year, and such amendments shall be certified and submitted in the same manner as the Budget.
Days’ Cash on Hand for the Fiscal Year reflected in said Audited Financial Statements, (B) the Net Income Aggregate increases in a new or amended Budget in the category of costs to be paid or reimbursed from the
Available for Debt Service, if any, for such Fiscal Year, and (C) the percentage of Project Revenues paid Revenue Fund shall not exceed 20% on an annual basis unless (i) the Borrower provides to the Trustee a
44 45

statement of a Certified Public Accountant or Management Consultant to the effect that the increase is is equal to its Maximum Annual Debt Service or (ii) (A) a Feasibility Report stating that the Debt Service
reasonable under the circumstances and (ii) the revised Budget demonstrates sufficient cash flow and Coverage Ratio, as forecasted for the first two full Fiscal Years following the later of (x) the estimated
Project Revenues to pay all required expenses, payments of scheduled interest, principal and premium (if completion of the development, marketing, acquisition, construction, renovation or replacement being paid
any) on the Bonds and the funding of any reserves as required in the flow of funds in Article V of the for with the proceeds of such Long-Term Indebtedness or (y) the first full Fiscal Year following the Fiscal
Indenture prior to the release of any funds from the Surplus Fund. Year in which average occupancy of senior living facilities being financed with the proceeds of such
additional Long-Term Indebtedness is forecasted to reach 85%, provided that such average occupancy of
(d) Notwithstanding the foregoing, the failure of the Borrower to maintain the Coverage Test
85% is forecasted to occur no later than during the fourth full Fiscal Year following the incurrence of such
or to meet the Liquidity Requirement or failure of the Borrower to show in the Budget that such
Long-Term Indebtedness or, in the case of Long-Term Indebtedness assumed or incurred for the purpose
requirements will be achieved, shall not constitute a Default hereunder except as set forth in Sections 4.5
of refinancing any Long-Term Indebtedness then Outstanding or incurred or assumed for any other purpose
or 4.14 hereof.
not involving construction, the first two full Fiscal Years following the date on which it is incurred or
(e) Each Budget shall include provision for payment by the Borrower of the costs, fees and assumed, is forecasted to be at least 1.50 and (B) an Officer’s Certificate showing that the Debt Service
expenses payable or incurred under this Loan Agreement and the Indenture including, without limitation, Coverage Ratio was at least 1.40 for the immediately preceding Fiscal Year;
the costs of maintaining the insurance coverage required pursuant to Section 5.1 and all applicable ad
(c) Long-Term Indebtedness incurred as a result of the issuance of Additional Bonds; provided
valorem taxes (or payment in lieu of taxes), if any, assessed against the Project payable by the Borrower,
that prior to incurring, assuming, or guaranteeing any such Long-Term Indebtedness the Borrower must
and all Administration Expenses.
furnish to the Trustee (i) written notice from each Rating Agency then rating any of the Bonds then
Section 6.11. Notices of Certain Events. The Borrower hereby covenants to notify the Issuer Outstanding that the issuance of such refunding Bonds shall not result in a reduction of such rating and (ii)
and the Trustee in writing of the occurrence of any Default known to it hereunder or any event which, with certification from the Borrower that, taking into account the issuance of the Additional Bonds and the
the passage of time or service of notice, or both, would constitute a Default hereunder, specifying the nature application of the proceeds thereof to the refunding, the Maximum Annual Debt Service with respect to all
and period of existence of such event and the actions being taken or proposed to be taken with respect Outstanding Bonds is not increased;
thereto. Such notice shall be given promptly, and in no event more than 10 Business Days after the Borrower
(d) Indebtedness incurred in the ordinary course of business that does not give rise to a lien or
receives notice or knowledge of the occurrence of any such event. The Borrower further agrees that it will,
encumbrance on the Project except for Permitted Encumbrances; and
and will require the Manager to, give prompt written notice to the Trustee if Insurance Proceeds or
Condemnation Awards are received with respect to the Project and are not used to repair or replace the (e) Any Indebtedness incurred or assumed pursuant to (b) above which is not Additional Bonds
Project, which notice shall state the amount of such proceeds or awards. shall not be secured by a lien on or security interest in all or any portion of the Project or the Project
Revenues, except to the extent such lien or security interest is otherwise a Permitted Encumbrance, and
Section 6.12. Inspection of Project Books; Right of Access. To the extent permitted by
such Indebtedness will not be secured by the money and investments held in any fund established under the
applicable law and subject to any privacy, confidentiality or other legal restrictions, at any time during
Indenture.
normal business hours upon not less than two Business Days’ notice, the Trustee, the Issuer or any Owner
of more than $100,000 of the principal amount of the Bonds may have access to the Project and all books Section 6.14. Advances By Trustee.
and records of the Borrower pertaining to the Project and shall be permitted to inspect the same, discuss the
(a) In the event the Borrower shall fail to pay, or fail to cause to be paid (including payment
affairs of the Borrower and the Project with appropriate representatives of the Borrower, the Manager and
from amounts held in the Insurance and Tax Escrow Fund for that purpose), any Impositions required to be
the Borrower’s outside accountants and shall be permitted to make copies of any of such records.
paid by the provisions of Section 4.9, or maintain, or cause to be maintained, the full insurance coverage
Section 6.13. Other Indebtedness. The Borrower shall not incur any Indebtedness, other than required by the provisions of Section 5.1, the Trustee, without prior notice to the Borrower, may (but shall
the Series 2017 Notes and the other debts permitted or anticipated herein as of the Closing Date relating to be under no obligation to) pay such Impositions or obtain or maintain the required policy of insurance, and
the Series 2017 Bonds, except that the Borrower is permitted to incur the following so long as no Default pay the premium or premiums on the same.
or Event of Default has occurred and is continuing:
(b) The Borrower shall notify the Trustee any time it is aware of any unsafe or dangerous
(a) such Short-Term Indebtedness as the Borrower, in its judgment, deems expedient; provided condition existing at the Project. In the event that the Borrower, any tenant of the Project, or any other
that the aggregate amount of Short-Term Indebtedness outstanding at any time does not exceed 10% of the Person, shall permit any unsafe or dangerous condition to exist in the Project and the Trustee is notified by
total Operating Expenses of the Borrower for the preceding Fiscal Year for which Audited Financial any party of such conditions, the Trustee may (but shall be under no obligation to) notify the Borrower in
Statements are available; writing of such condition, and if the Borrower shall fail to correct such condition, or cause such condition
to be corrected, within 30 calendar days after receipt of such notice, the Trustee may (but shall be under no
(b) such Long-Term Indebtedness as the Borrower, in its judgment, deems expedient,
obligation to) make the required correction, improvement, or repair.
including Indebtedness incurred as a result of the issuance of Additional Bonds; provided that prior to
incurring, assuming, or guaranteeing any such Long-Term Indebtedness the Borrower must furnish to the Section 6.15. (Intentionally Omitted).
Trustee either (i) a Certificate setting forth the terms of such Long-Term Indebtedness and that demonstrates
Section 6.16. Related Party Transactions. The Borrower shall not enter into any transaction,
that (A) the Debt Service Coverage Ratios were at least equal to the required Coverage Tests for the last
including, without limitation, the purchase, sale, lease, or exchange of property or the rendering of any
Fiscal Year for which Audited Financial Statements are available, and (B) the Debt Service Coverage Ratios
service, with any Affiliate except in the ordinary course of business and pursuant to the reasonable
would have been at least equal to the required Coverage Tests for the last Fiscal Year for which Audited
requirements of the Borrower’s business and upon terms found by the Governing Body of the Borrower to
Financial Statements are available assuming the proposed Long-Term Indebtedness was incurred on the
first day of such Fiscal Year and that the Annual Debt Service on such proposed Long-Term Indebtedness
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be fair and reasonable and no less favorable to the Borrower than would be obtained in a comparable arm’s monetary consideration received in connection with the release of any portion of the Mortgaged Property
length transaction with a Person not an Affiliate. or the subordination of the lien of the Mortgages pursuant to this Section 6.18 will be deposited in a Special
Redemption Account of the Bond Fund and used to redeem Bonds pursuant to Section 3.01 of the Indenture
Section 6.17. Purchase of Tax-Exempt Bonds. Neither the Borrower nor any “related person”
on the earliest date Bonds can be redeemed at par.
to the Borrower (within the meaning of section 147(a)(2) of the Code) will purchase any of the Tax-Exempt
Bonds, pursuant to any arrangement, formal or informal, unless the Borrower or such related person delivers If all of the conditions of this Section are met, the Trustee is authorized to release any such property
a Favorable Opinion of Bond Counsel to the Trustee and the Issuer. from the lien of the Mortgages or subordinate such lien or execute and deliver any instrument necessary or
appropriate to confirm and grant or release any such casement, license, right of way, or other right or
Section 6.18. Release of Certain Land and Subordination; Granting of Easements. The parties
privilege.
hereto reserve the right at any time and from time to time to (a) effect the release and removal from the
Mortgages of any part (or interest in such part) of the Mortgaged Property with respect to which the No release or conveyance effected under the provisions of this Section will entitle the Borrower to
Borrower proposes to convey fee title to a public utility or public body in order that utility services or public any abatement or diminution of the Loan Payments or the Additional Payments payable under Section 3.2
services may be provided to the Project, or to effect the subordination of the lien of the Mortgages to rights hereof.
granted to a public utility or public body in order that utility services or public services may be provided to
Section 6.19. Excess Surplus Fund Amount Certificate. The Borrower shall deliver or cause to
the Project, (b) grant easements, licenses, rights of way (including the dedication of public highways), and
be delivered to the Trustee within 60 days after each Annual Evaluation Date, a certificate, substantially in
other rights or privileges in the nature of easements with respect to any property included in the Project,
the form attached hereto as Exhibit F, executed by a Borrower Representative setting forth the Excess
free from the lien of the Mortgages, or (c) release existing easements, licenses, rights of way, and other
Surplus Fund Amount, if any, as of the Annual Evaluation Date coinciding with the end of such Fiscal Year
rights or privileges with or without consideration; provided, that if at the time any such release, removal,
and as of the date of such certificate.
or grant is made any of the Bonds are Outstanding and unpaid, the Borrower must deposit with the Trustee
the following:
(a) [Reserved],
(b) a resolution or action of the Governing Body of the Borrower (i) giving an adequate legal
description of that portion of the Mortgaged Property to be released or subordinated, (ii) stating the purpose
for which the Borrower desires the release or subordination, (iii) requesting such release or subordination,
and (iv) approving an appropriate amendment to the Mortgages,
(c) a certificate of the Borrower to the effect that the Borrower is not in default under any of
the provisions of this Loan Agreement and that neither any building nor any other improvement constituting
part of the Project are located on a portion of the Mortgaged Property with respect to which the release or
subordination is to be granted, accompanied by a plat of survey of the Mortgaged Property certified by a
registered surveyor of the State of Oklahoma depicting (i) the boundaries of the portion of the Mortgaged
Property with respect to which the release or subordination is to be granted, (ii) all improvements located
on the property surveyed and the relation of the improvements by distances to the boundaries of the portion
of such property with respect to which the release or subordination is to be granted, and (iii) all easements
and rights of way with recording data and instruments establishing the same,
(d) a copy of the instrument conveying the title to or subordinating the lien of the Mortgages
in favor of a public utility or public body or granting or releasing such easement, license, right of way, or
other right or privilege, and
(e) a certificate of an Architect, dated not more than 60 days prior to the date of the
conveyance, release, subordination or grant and stating that, in the opinion of the person signing such
certificate, (i) the portion of the Mortgaged Property so proposed to be released or with respect to which
the subordination is proposed or with respect to which an easement, license or right of way is proposed to
be granted is necessary or desirable in order to obtain utility services or public services to benefit the Project
and (ii) the conveyance, release, subordination or grant so proposed to be made will not impair the
usefulness of the Project as a senior living facility and will not destroy the means of ingress thereto and
egress therefrom.
If such release or subordination relates to a part of the Mortgaged Property on which transportation
or utility facilities are located, the Borrower will retain an easement to use such transportation or utility
facilities to the extent necessary for the efficient operation of the Project as a senior living facility. Any

48 49

ARTICLE VII (b) The Borrower shall have had 30 days after receipt of such notice to correct the default and
shall not have corrected it; provided, however, that:
DEFAULTS AND REMEDIES
(i) if such default cannot be corrected within 30 days, it shall only be a Default
Section 7.1. Defaults. Each of the following shall constitute a “Default” hereunder: hereunder if the Borrower fails to initiate and diligently pursue appropriate corrective action and
such default is not remedied within 120 days after the date of occurrence thereof, or
(a) Failure by the Borrower to pay when due the amounts required to be paid under this
Agreement or the Notes when the same shall become due and payable in accordance with the terms of this (ii) if by reason of Force Majeure the Borrower is unable in whole or in part to carry
Agreement or the Notes, including a failure to repay any amounts that have been previously paid but are out any of its agreements contained herein (other than its obligations contained in Article III
recovered, attached or enjoined pursuant to any insolvency, receivership, liquidation or similar proceedings; hereof), it shall only be a Default hereunder if the Borrower fails to remedy such default within 120
provided however that no Default shall exist for failure to pay the Second Tier Note so long as any Senior days after the date of occurrence thereof.
Bonds are Outstanding.
Notwithstanding the foregoing clause (ii), the Borrower agrees to remedy with all reasonable
(b) Failure by the Borrower to make, or cause to be made, any (i) Additional Payment (except dispatch the cause or causes preventing the Borrower from carrying out its agreements hereunder, provided
for the Additional Payments described in Section 3.2(b)(ii)(8) and (9)) or (ii) payments of any amounts that the settlement of strikes and other industrial disturbances shall be entirely within the discretion of the
required to be paid under Sections 4.3, 4.9, 4.10, 5.3, 5.4 and 5.9 on or before the date due. Borrower and the Borrower shall not be required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when such course is in the
(c) Failure by the Borrower to meet the Coverage Test covenant if (a) the Borrower fails to
judgment of the Borrower unfavorable to the Borrower.
engage a Management Consultant or (b) the Borrower fails to implement any of the Management
Consultant’s reasonable recommendations to the extent possible, and to the extent consistent with the Section 7.3. Remedies. Whenever any Default under Section 7.1 hereof shall have happened
charitable mission of the Borrower and in compliance with Section 4.18 hereof, as provided in this Loan and be continuing, any or all of the following remedial steps shall be available:
Agreement.
(a) To the extent that the Trustee has declared all Bonds due and payable pursuant to Article
(d) Failure by the Borrower to perform or observe any of its covenants or agreements contained VIII of the Indenture, the Trustee shall declare the outstanding principal balance and interest accrued on
in this Loan Agreement other than as specified in paragraphs (a) through (c) of this Section 7.1, and such the Loan and Notes and all payments required to be made by the Borrower under Section 3.2 hereof with
failure shall continue beyond the applicable grace period specified in Section 7.2 hereof. respect to the Bonds for the remainder of the term of this Loan Agreement to be immediately due and
payable, whereupon the same shall become immediately due and payable.
(e) The dissolution or liquidation of the Borrower or the filing by the Borrower of a voluntary
petition in bankruptcy, or adjudication of the Borrower as a bankrupt, or assignment by the Borrower for (b) The Trustee, for and on behalf of the Issuer, may, and with the direction of the Controlling
the benefit of its creditors or the entry by the Borrower into an agreement of composition with its creditors, Owners of the Bonds shall, take whatever action at law or in equity may appear necessary or desirable to
or the approval by a court of competent jurisdiction of a petition applicable to the Borrower in any collect the payments required to be made by the Borrower under Section 3.2 hereof then due and thereafter
proceeding instituted under the provisions of the laws of the State of Oklahoma or the State of Texas, or to become due, including, without limitation, pursuing remedies under the Mortgages and the remedies
the federal bankruptcy statute, as amended, or under any similar act that may hereafter be enacted. The under Section 8.02 of the Indenture.
term “dissolution or liquidation of the Borrower,” as used in this Section 7.1(e), shall not be construed to
(c) The Issuer or the Trustee may take whatever action at law or in equity as may be necessary
include the cessation of the existence of the Borrower resulting either from a merger or consolidation of the
or desirable to enforce performance and observance of any obligation, agreement or covenant of the
Borrower into or with another entity or a dissolution or liquidation of the Borrower following a transfer of
Borrower under this Loan Agreement.
all or substantially all of its assets as an entirety, under the conditions permitting such actions contained in
Section 6.3 hereof. The provisions of clause (a) of the preceding paragraph, however, are subject to the condition that
if, at any time after the Loan shall have been so declared due and payable, and before any judgment or
(f) The occurrence or continuance of an “Event of Default” under the Mortgages or the
decree for the payment of the money due shall have been obtained or entered, there shall have been
Indenture.
deposited with the Trustee a sum sufficient to pay all the principal of the Bonds matured prior to such
(g) Failure by the Borrower to maintain a Debt Service Coverage Ratio equal to or greater than declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue
1.00 to 1.00 on all Outstanding Bonds and other Long-Term Indebtedness for any Fiscal Year. installments of principal as provided herein, and the reasonable fees and expenses of the Trustee, and any
and all other Defaults known to the Trustee (other than in the payment of principal of and interest on the
The Trustee shall not be deemed to have knowledge of any Default hereunder other than a Default
Loan due and payable solely by reason of such declaration) shall have been made good or cured to the
under paragraph (a) or (b)(ii) hereof, unless a Responsible Officer of the Trustee shall have received actual
satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor,
knowledge or shall have been specifically notified in writing of such Default by the Issuer, the Borrower
then, and in every such case, the Controlling Owners of the Bonds by written notice to the Issuer and to the
or by the Owners of at least 25% of the principal amount of the Outstanding Bonds.
Trustee, may, on behalf of the Owners of all the Bonds, rescind and annul such declaration and its
Section 7.2. Notice of Default: Opportunity to Cure. No default under Section 7.1(d) hereof consequences and waive such Default; provided that no such rescission and annulment shall extend to or
shall constitute a Default hereunder until: shall affect any subsequent Default, or shall impair or exhaust any right or power consequent thereon.
(a) The Trustee or the Issuer, by Mail, shall give notice to the Borrower of such default In case the Trustee or the Issuer shall have proceeded to enforce its rights under this Loan
specifying the same; and Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have
been determined adversely to the Trustee or the Issuer, then, and in every such case, the Borrower, the
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Trustee and the Issuer shall be restored respectively to their several positions and rights hereunder, and all ARTICLE VIII
rights, remedies and powers of the Borrower, the Trustee and the Issuer shall continue as though no such
action had been taken, subject to the results of any such proceedings or any settlement thereof. OPTIONS TO TERMINATE AGREEMENT
In case the Borrower shall fail forthwith to pay such amounts upon such demand, the Trustee shall Section 8.1. Grant of Option To Terminate.
be entitled and empowered to institute any action or proceeding at law or in equity for the collection of the
(a) The Borrower shall have, and is hereby granted, the option to terminate this Loan
sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and
Agreement as a whole at any time the Borrower declares it will cease to use the Project by reason of:
may enforce any such judgment or final decree against the Borrower and collect in the manner provided by
law the money adjudged or decreed to be payable. (i) the damage or destruction of all or a significant portion of the Project (with
property damage equal to at least $100,000) to such extent that, in the reasonable opinion
In case proceedings shall be pending for the bankruptcy or for the reorganization of the Borrower
of the Borrower, the Restoration thereof would not be economical;
under the federal bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have
been appointed for the property of the Borrower or in the case of any other similar judicial proceedings (ii) the condemnation of all or part of the Project or the taking by
relative to the Borrower, or the creditors or property of the Borrower, then the Trustee shall be entitled and condemnation of such part, use or control of the Project (with the value of the property so
empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the taken or condemned equaling at least $100,000) as to render it unsatisfactory to the
whole amount owing and unpaid pursuant to this Loan Agreement and the Notes and, in case of any judicial Borrower for its intended use, provided that any temporary taking by condemnation shall
proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable not give rise to the option unless, in the Borrower’s reasonable opinion, such temporary
in order to have the claims of the Trustee allowed in such judicial proceedings relative to the Borrower, its taking shall render the Project unsatisfactory to the Borrower for its intended use for a
creditors or its property, and to collect and receive any money or other property payable or deliverable on period of at least six months; or
any such claims, and to distribute such amounts as provided in the Indenture after the deduction of its (iii) any changes in the Constitution of the State of Oklahoma or the
charges and expenses. Any receiver, assignee or trustee in bankruptcy or reorganization is hereby Constitution of the United States or of legislative or administrative action (whether state,
authorized to make such payments to the Trustee, and to pay to the Trustee any amount due it for federal, or local), by which this Loan Agreement shall become void or unenforceable or
compensation and expenses, including expenses and fees of counsel incurred by it up to the date of such impossible of performance in accordance with the intent and purposes hereof;
distribution.
provided, however, that (A) in the case of clause (i) or (ii) above, the Borrower shall comply with
Section 7.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Article V hereof and apply the Insurance Proceeds resulting from such event to the payment of the
Issuer is intended to be exclusive of any other available remedies, but each and every such remedy shall be Bonds in accordance with the Indenture, and (B) in the case of clause (iii) above, the Bonds shall
cumulative and shall be in addition to every other remedy given under this Loan Agreement or now or have been fully paid or provision made for such payment pursuant to Article VII of the Indenture.
hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon
any Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such (b) The Borrower may also prepay the Loan in whole and terminate this Loan Agreement if
right or power may be exercised from time to time and as often as may be deemed expedient. In order to the Loan is prepaid in whole and in amounts necessary to redeem the Outstanding Bonds pursuant to Section
entitle the Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any 3.02 of the Indenture.
notice, other than such notice as may be required in this Article. Such rights and remedies as are given the Section 8.2. Exercise of Option To Terminate. To exercise any such option in Section 8.1, the
Issuer hereunder shall also extend to the Trustee, and the Trustee and the Owners, subject to the provisions Borrower shall give written notice to the Issuer and the Trustee, which notice shall specify therein the
of the Indenture, shall be entitled to the benefit of all covenants and agreements herein contained. reason for and the date of termination, and the Borrower shall make arrangements satisfactory to the Issuer
Section 7.5. Attorney’s Fees and Expenses. If a Default hereunder occurs and if the Issuer or and the Trustee for the giving of any required notices of defeasance or redemption of all of the Bonds and
the Trustee, or the representative or agent of either, should employ attorneys or incur expenses for the any application of Insurance Proceeds in accordance with this Loan Agreement and the Indenture, and pay,
enforcement of any obligation or agreement of the Borrower contained herein or in the other Borrower or cause to be paid, on or prior to the applicable redemption date, to the Trustee, an amount equal to the
Documents, the Borrower on demand will pay to the Issuer or the Trustee, as the case may be, the reasonable sum of the following:
fees of such attorneys and the reasonable expenses so incurred, including all costs of any and all (a) An amount of money which, when added to the amounts then on deposit under the
investigations, proceedings and court appeals. Indenture and available for such purpose, will be sufficient to retire and redeem all the Outstanding Bonds
Section 7.6. No Additional Waiver Implied by One Waiver. In the event any agreement on the earliest possible redemption date after notice as provided in the Indenture, including, without
contained in this Loan Agreement should be breached by either party and thereafter waived by the other limitation, the principal amount thereof and all interest to accrue to said redemption date; plus
party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any (b) An amount of money equal to the Ordinary Trustee’s Fees and Expenses and Extraordinary
other breach hereunder. Trustee’s Fees and Expenses under the Indenture accrued and to accrue until such final payment and
redemption of the Bonds, including fees and expenses related to such redemption; plus
(c) An amount of money equal to the Issuer’s Fees and Expenses under this Loan Agreement
accrued and to accrue until such final payment and redemption of the Bonds.

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ARTICLE IX Section 9.11. No Liability of Issuer’s Officers. No recourse under or upon any obligation,
covenant, or agreement contained in this Loan Agreement, or for any claim based thereon, or under any
MISCELLANEOUS judgment obtained against the Issuer, or by the enforcement of any assessment or penalty or otherwise or
by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or
Section 9.1. Confidential Information. The Borrower shall not be required to disclose, or to
otherwise or under any other circumstances, under or independent of the Indenture, shall be had against any
permit the Issuer, the Trustee or others to acquire access to, any trade secrets of the Borrower or any other
member of the Governing Body or officer, as such, past present, or future of the Issuer, for the payment for
processes, techniques or information reasonably deemed by the Borrower to be proprietary or confidential,
or to the Issuer or any receiver thereof, of any sum that may be due and unpaid by the Issuer upon the
except as may be appropriate under applicable state law for the prosecution or defense of any legal or
Bonds. Any and all personal liability of every nature, whether at common law or in equity, or by statute or
equitable action arising hereunder or for the collection of a judgment or to insure compliance with the Bond
by constitution or otherwise, of any such member of the Governing Body or officer, as such, to respond by
Documents.
reason of any act or omission on his part or otherwise, for the payment for or to the Issuer or any receiver
Section 9.2. Entire Agreement. The Bond Documents together constitute the entire agreement thereof, of any sum that may remain due and unpaid upon the Bonds, is hereby expressly waived and
and supersede all prior agreements and understandings, both written and oral, between the Issuer and the released as a condition of and in consideration for the execution of this Loan Agreement and the issuance
Borrower with respect to the subject matter hereof. of the Bonds.
Section 9.3. Notices. All notices, certificates or other communications shall be sufficiently Section 9.12. Receipt of and Compliance With Indenture. The Borrower acknowledges that it
given and shall be deemed given on the second day following the date on which the same have been mailed has received an executed copy of the Indenture, and accepts and agrees to the provisions thereof, including,
by first class mail, postage prepaid, addressed as provided in the Indenture. A duplicate copy of each notice, without limitation, the provisions of Section 9.04 of the Indenture with respect to compensation and
certificate or other communication given hereunder by either the Issuer or the Borrower to the other shall indemnification of the Trustee, and agrees that it will take all such actions as are required or contemplated
also be given to the Trustee and the Manager. of it under the Indenture to preserve and protect the rights of the Trustee, the Issuer and of the Owners
Section 9.4. Assignments. This Loan Agreement may not be assigned by either party without thereunder and that it will not take any action that would cause a default or Event of Default thereunder. It
consent of the other, except that the Issuer shall assign to the Trustee its rights under this Loan Agreement is agreed by the Borrower and the Issuer that all redemption of Bonds prior to maturity shall be effected as
(except its Reserved Rights) as provided by Section 3.4 hereof and the Borrower may assign its rights under provided in the Indenture. The Borrower hereby agrees that its interest in the Mortgaged Property and its
this Loan Agreement as provided by Section 6.3 hereof. rights hereunder are subject to and subordinated to the interest and rights of the Trustee under the Indenture
and acknowledges that the Trustee has entered into the Indenture in reliance upon the assignment to the
Section 9.5. Severability. If any provision of this Loan Agreement shall be held or deemed to Trustee of the Issuer’s rights under this Loan Agreement and the Borrower’s provision of indemnity. The
be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or Borrower covenants that it will perform all of the Issuer’s obligations and covenants under the Indenture to
provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent the extent that they can be performed by the Borrower thereunder. The Borrower further covenants that it
whatever. will perform all of the duties and obligations of the Borrower that are set forth in the Indenture. The
Section 9.6. Execution of Counterparts. This Loan Agreement may be simultaneously Borrower further agrees that it will reimburse the Issuer for any expenses incurred in the administration of
executed in several counterparts, each of which shall be an original and all of which shall constitute but one any of the foregoing agreements and this Loan Agreement and will hold the Issuer harmless from any
and the same instrument. liabilities thereunder in accordance with Section 6.5 hereof.

Section 9.7. Rights of Trustee. The Trustee shall have and be protected by all of the rights, Section 9.13. Usury; Total Interest. This Loan Agreement is subject to the express condition,
powers, indemnities, privileges, immunities and other protections provided to the Trustee under the and it is agreed, that at no time shall Loan Payments hereunder or under the other Bond Documents that are
Indenture that are hereby incorporated herein by reference. or are construed to be payments of interest on the unpaid principal amount of the Bonds reflect interest that
is borne at a rate in excess of the maximum permitted by law. The Borrower shall not be obligated or
Section 9.8. Amendments, Changes and Modifications. Subsequent to the issuance of Bonds required to pay, nor shall the Issuer be permitted to charge or collect, interest borne at a rate in excess of
and prior to their payment in full (or provision for payment thereof having been made in accordance with such maximum rate. If by the terms of this Loan Agreement, the Notes, or the other Bond Documents the
the provisions of the Indenture), this Loan Agreement may not be effectively amended, supplemented, Borrower is required to make such payments reflecting interest borne at a rate in excess of such maximum
modified, altered or terminated except by an instrument in writing signed by the parties hereto, and only as rate, such payments shall be deemed to be reduced immediately and automatically to reflect such maximum
permitted in Article XI of the Indenture and Section 6.8 hereof. rate. This Loan Agreement is also subject to the condition that amounts paid hereunder representing late
Section 9.9. Governing Law. THIS LOAN AGREEMENT SHALL BE GOVERNED payment or penalty charges or the like shall only be payable to the extent permitted by law.
EXCLUSIVELY BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF Section 9.14. Survival. (a) The rights of the Trustee to payments under this Loan Agreement,
OKLAHOMA. other than Loan Payments, shall survive the Trustee’s resignation or removal, the discharge of this Loan
Section 9.10. Term of Agreement. This Loan Agreement shall be in full force and effect from Agreement and defeasance of the Bonds.
the date hereof until the later of (a) such time as all the Bonds shall have been fully paid or provision made (b) Notwithstanding anything in this Loan Agreement or any of the Bond Documents to the
for such payment pursuant to Article VII of the Indenture, (b) the Borrower has complied with the contrary, the rights, protections, indemnities and immunities afforded to the Trustee hereunder shall survive
provisions of Article VIII hereof, or (c) such time as the Borrower has paid, or caused to be paid, all amounts the resignation or removal of the Trustee and the payment in full or defeasance of the Bonds.
payable hereunder.

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 ARTICLE X any Constitutional provision or statutory limitation, or any personal or pecuniary liability upon any official,
director, officer, employee, agent or attorney of the Issuer.
LIMITATIONS ON LIABILITY
(d) All covenants, obligations and agreements of the Issuer contained in this Loan Agreement
and the Indenture shall be effective to the extent authorized and permitted by applicable law. No such
Section 10.1. Limitation on Liability of the Issuer; Issuer May Rely.(a) All obligations of the
covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present
Issuer incurred under this Loan Agreement and the Indenture shall be limited obligations of the Issuer,
or future official, director, officer, employee, agent or attorney of the Issuer in other than his official
payable solely and only from Bond proceeds, and revenues and other amounts derived by the Issuer from
capacity, and no official executing the Bonds shall be liable personally on the Bonds or be subject to any
the Trust Estate. THE BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES AND
personal liability or accountability by reason of the issuance thereof or by reason of the covenants,
OTHER FUNDS AND PROPERTY PLEDGED UNDER THE INDENTURE AND THE MORTGAGES
obligations or agreements of the Issuer contained in this Loan Agreement or in the Indenture. No
FOR THE PAYMENT OF THE BONDS, AND NO OWNER OR OWNERS OF ANY OF THE BONDS
provision, covenant or agreement contained in this Loan Agreement, the Indenture or the Bonds, or any
SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE
obligation herein or therein imposed upon the Issuer, or the breach thereof, shall constitute or give rise to
STATE OF OKLAHOMA OR ANY POLITICAL SUBDIVISION OR OTHER PUBLIC BODY OF THE
or impose upon the Issuer a pecuniary liability or a charge. No recourse shall be had for the enforcement
STATE OF OKLAHOMA, OR TO ENFORCE THE PAYMENT OF THE BONDS AGAINST ANY
of any obligation, covenant, promise, or agreement of the Issuer contained in this Loan Agreement or in
PROPERTY OF THE ISSUER, THE STATE OF OKLAHOMA OR ANY SUCH POLITICAL
any Bond or for any claim based hereon or otherwise in respect hereof or upon any obligation, covenant,
SUBDIVISION OR OTHER PUBLIC BODY, INCLUDING THE ISSUER, EXCEPT AS PROVIDED IN
promise, or agreement of the Issuer contained in any agreement, instrument, or certificate executed in
THE INDENTURE. NO OFFICIAL, DIRECTOR, OFFICER, EMPLOYEE, AGENT OR ATTORNEY
connection with the Project or the issuance and sale of the Bonds, against any member of the governing
OF THE ISSUER, INCLUDING ANY PERSON EXECUTING THIS LOAN AGREEMENT ON
board of the Issuer, its officers, counsel, financial advisor, employees or agents, as such, in his or her
BEHALF OF THE ISSUER, SHALL BE LIABLE PERSONALLY UNDER THIS LOAN AGREEMENT
individual capacity, past, present, or future, or of any successor thereto, whether by virtue of any
OR FOR ANY REASON RELATING TO THE ISSUANCE OF THE BONDS. NO RECOURSE SHALL
Constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or
BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE BONDS, OR
otherwise; it being expressly agreed and understood that no personal liability whatsoever shall attach to, or
FOR ANY CLAIM BASED ON THE BONDS, OR OTHERWISE IN RESPECT OF THE BONDS, OR
be incurred by, any member of the governing board, officers, counsel, financial advisors, employees or
BASED ON OR IN RESPECT OF THIS LOAN AGREEMENT OR ANY AMENDMENT TO THIS
agents, as such, in his or her individual capacity, past, present, or future, of the Issuer or of any successor
LOAN AGREEMENT, AGAINST ANY OFFICIAL, DIRECTOR, OFFICER, EMPLOYEE, AGENT OR
thereto, either directly or by reason of any of the obligations, covenants, promises, or agreements entered
ATTORNEY OF THE ISSUER, AS SUCH, OR ANY SUCCESSOR WHETHER BY VIRTUE OF ANY
into between the Issuer and the Trustee or the Borrower to be implied therefrom as being supplemental
CONSTITUTION, STATUTE OR RULE OF LAW, OR BY THE ENFORCEMENT OF ANY
hereto or thereto, and that all personal liability of that character against every such director, officer, counsel,
ASSESSMENT OR PENALTY OR OTHERWISE, ALL SUCH LIABILITY BEING, BY THE
financial advisor, employee or agent, is, by the execution of the Bonds, this Loan Agreement, and the
ACCEPTANCE OF THIS LOAN AGREEMENT AND AS PART OF THE CONSIDERATION FOR THE
Indenture, and as a condition of, and as part of the consideration for, the execution of the Bonds, this Loan
ISSUANCE OF THE BONDS, EXPRESSLY WAIVED AND RELEASED.
Agreement and the Indenture, expressly waived and released.
(b) It is expressly understood and agreed by the parties to this Loan Agreement that:
Section 10.2. Delivery of Reports, Etc. The delivery of reports, information and documents to
(i) the Issuer may rely conclusively on the truth and accuracy of any certificate, the Issuer as provided herein is for informational purposes only and the Issuer’s receipt of such shall not
opinion, notice or other instrument furnished to the Issuer by the Trustee, any Owner or the constitute constructive knowledge of any information contained therein or determinable from information
Borrower as to the existence of a fact or state of affairs required under this Loan Agreement to be contained therein. The Issuer shall have no duties or responsibilities hereunder except those that are
noticed by the Issuer; specifically set forth herein, and no other duties or obligations shall be implied in this Loan Agreement
(ii) the Issuer shall not be under any obligation to perform any record keeping or to against the Issuer.
provide any legal service, it being understood that such services shall be performed or caused to be
performed by the Borrower; and
(iii) none of the provisions of this Loan Agreement shall require the Issuer to expend
or risk its own funds (apart from the proceeds of Bonds issued under the Indenture) or otherwise
endure financial liability in the performance of any of its duties or in the exercise of any of its rights
under this Loan Agreement unless it first shall have been adequately indemnified to its satisfaction
against the costs, expenses and liabilities that may be incurred by taking any such action.
(c) No provision, representation, covenant or agreement contained in this Loan Agreement or
in the Indenture, the Bonds, or any obligation herein or therein imposed upon the Issuer, or the breach
thereof, shall constitute or give rise to or impose upon the Issuer a pecuniary liability (except to the extent
of any Loan repayments, revenues and receipts derived by the Issuer pursuant to this Loan Agreement and
other moneys held pursuant to the Indenture, other than in the Rebate Fund). No provision hereof shall be
construed to impose a charge against the general credit of the Issuer, the State of Oklahoma or any other
political subdivision of the State of Oklahoma, the taxing powers of the foregoing, within the meaning of
56 57

IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement under seal, all LEADING LIFE SENIOR LIVING, INC.
as of the day and year first above mentioned.
THE OKLAHOMA DEVELOPMENT FINANCE
AUTHORITY
By: _________________________________________
President

By: _________________________________________
President

[Issuer Signature Page of Loan Agreement] B-15 [Borrower Signature Page of Loan Agreement]
 UMB BANK, N.A., as Trustee EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project will consist of the two memory care facilities as follows:
Autumn Leaves of Edmond – A senior living facility consisting of 42 memory care units
and related common areas located on approximately 3.78 acres at 1001 S. Bryant Avenue,
By: _________________________________________
Edmond, Oklahoma 73034.
Authorized Representative
Autumn Leaves of Southwest Oklahoma City – A senior living facility consisting of 44
memory care units and related common areas located on approximately 3.5 acres at 2232
SW 104th Street, Oklahoma City, Oklahoma 73159.

[Trustee Signature Page of Loan Agreement] A-1

EXHIBIT B 5. all bills for labor, materials, and fixtures used, or on hand and to
be used, in the rehabilitation or equipping of the Project have been paid or will be
FORM OF PROJECT ACCOUNT REQUISITION
paid from the proceeds of such disbursement; and
6. payment of the cost referenced herein will not violate any
Requisition No. ___________ Date: __________________ representation, warranty, or covenant of the Borrower in the Loan Agreement or
the Borrower’s Tax Certificate.

To: UMB Bank, N.A., as Trustee (the “Trustee”) under the Trust Indenture dated as of December 1, Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in
2017 (the “Indenture”), relating to The Oklahoma Development Finance Authority Senior Living the Indenture.
Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017 LEADING LIFE SENIOR LIVING, INC.
Attention: Trust Department

The undersigned Borrower Representative designated pursuant to the terms of the aforesaid By: __________________________________
Indenture and a Loan Agreement of even date therewith (the “Agreement”) relating to the Bonds identified Borrower Representative
above among Leading Life Senior Living, Inc., a Texas nonprofit corporation (the “Borrower”), the Trustee
and The Oklahoma Development Finance Authority hereby requests that there be paid from the Project
Account of the Project Fund the sum set forth below, and in that connection with respect to the use of the
proceeds of the Bonds, I HEREBY CERTIFY, as follow:
An obligation in each of the amounts set forth below constitutes a Cost of the Project, and such
obligation or amount is not a cost of issuance of the Series 2017 Bonds.
Payee

Name and Address; Wire Instructions Purpose Amount

TOTAL:

The Borrower hereby certifies that:

1. the Project is free and clear of all liens and encumbrances except
Permitted Encumbrances;
2. all evidence, statements, and other writings required to be
furnished under the terms of the Agreement and the Indenture are true and omit no
material fact, the omission of which may make them misleading;
3. all monies previously disbursed from the Project Account have
been used solely to pay for costs allowed by the Agreement (or to reimburse
Borrower for such costs previously paid by Borrower), and the Borrower has
written evidence to support this item of warranty;
4. none of the items for which payment is requested have formed the
basis for any payment previously made from the Project Account;

B-1 B-16 B-2

 EXHIBIT C The undersigned ________________, certifies that (a) it has reviewed the Audited Financial
Statements of the Borrower for the period ending December 31, 20__, (b) the foregoing calculations of the
FORM OF COMPLIANCE CERTIFICATE
Debt Service Coverage Ratios are correct, (c) the Net Income Available for Debt Service as of the last day
for the Period Ended December 31, 20__ of such Fiscal Year was $__________, (d) the Days’ Cash on Hand as of the last day of such Fiscal Year
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY was ______________, and (e) the percentage of Project Revenues paid to the Manager as fees under the
Management Agreement with regard to such Fiscal Year was _____%.
$ 30,275,000
Senior Living Revenue Bonds
(Leading Life Senior Living, Inc. – Autumn Leaves Project) [INDEPENDENT CERTIFIED PUBLIC
Series 2017 ACCOUNTANT]

I, ____________________________________, an authorized representative of Leading Life

Senior Living, Inc., as “Borrower” for the above described Bonds (the “Series 2017 Bonds”), do hereby
Dated: By: _______________________
certify that (a) no Event of Default, Default or Potential Default of which the Borrower has knowledge has
occurred or is continuing, and (b) the Net Income Available for Debt Service, Debt Service Coverage Ratio
and Days’ Cash on Hand calculations for the Project for the twelve months ending as set forth below, are
true and correct. Terms used herein as defined terms have the meanings provided in the Trust Indenture
dated as of December 1, 2017 with regard to the Series 2017 Bonds.
Net Income Available for Debt Service:

Divided by: Annual Debt Service:

Debt Service Coverage Ratio: _______________________________

Days’ Cash on Hand: _______________________________

Dated __________________ LEADING LIFE SENIOR LIVING, INC.

By: __________________________________
Borrower Representative

C-2
C-1

EXHIBIT D-1 This Note is also secured by the Mortgages (as defined in the Indenture).
[FORM OF SERIES 2017A-1 NOTE] If an Event of Default, as defined in the Indenture, or a Default as defined in the Loan Agreement,
SENIOR LIVING PROMISSORY NOTE SERIES 2017A-1 shall occur, the principal hereof and accrued interest hereon may, at the option of the holder hereof, be
declared due and payable on the terms, in the manner and with the effect provided in the Indenture or the
$14,640,000 December 20, 2017
Loan Agreement.
This Note is a contract made under and shall be construed in accordance with and governed by the
FOR VALUE RECEIVED, the borrower executing this Senior Living Promissory Note Series laws of the State of Oklahoma.
2017A-1, and its successors and assigns (the “Borrower”), promises to pay to UMB Bank, N.A., or its
LEADING LIFE SENIOR LIVING, INC.
successor, as trustee (the “Trustee”) under that certain Trust Indenture dated as of December 1, 2017 (the
“Indenture”), between the Trustee and The Oklahoma Development Finance Authority (the “Issuer”), the
principal sum of $14,640,000 payable on July 1, 2053, or such earlier dates as required in the Indenture or
the Loan Agreement (as defined below), and interest accrued on the unpaid portion thereof, from the date
hereof at the rate for each day of accrual equal to the rates of interest borne by the bonds of the Issuer By: ___________________________________
designated as Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Authorized Representative
Series 2017A-1 (“Series 2017A-1 Bonds”) at the time Outstanding (as defined in the Indenture) payable on
the dates and computed as described in the Indenture and the Loan Agreement, relating to principal and
interest on the Series 2017A-1 Bonds. Simultaneously with the issuance of the Series 2017A-1 Bonds, the
Issuer is issuing its Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves
Project) Taxable Series 2017A-2 (the “Series 2017A-2 Bonds” and, together with the Series 2017A-1
Bonds, the “Series 2017A Bonds”) and Second Tier Series 2017B (the “Series 2017B Bonds,” which
together with the Series 2017A Bonds are referred to herein as the “Series 2017 Bonds”).
This Senior Living Promissory Note Series 2017A-1 (this “Note”) and the payments required to be
made hereunder (other than Reserved Rights) have been irrevocably assigned, without recourse, to the
Trustee under the Indenture and such payments will be made directly to the Trustee for the account of the
Issuer pursuant to such assignment. All the terms, conditions and provisions of the Indenture, the Loan
Agreement and the Series 2017A-1 Bonds are hereby incorporated as a part of this Note.
The principal hereof (and premium, if any) and the interest hereon shall be payable at the designated
corporate trust office of the Trustee on the date such payments come due. All such payments shall be in
immediately available funds or in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
If the specified date for any such payment shall be a day other than a Business Day (as defined in
the Indenture), then such payment may be made on the next succeeding day that is a Business Day without
additional interest and with the same force and effect as if made on the specified date for such payment.
This Note is executed and delivered by the Borrower pursuant to the Loan Agreement, dated as of
December 1, 2017 (the “Loan Agreement”), among the Issuer, the Borrower and the Trustee relating to the
Series 2017 Bonds, to evidence a loan by the Issuer to the Borrower thereunder from proceeds of the Series
2017A-1 Bonds. To the extent that any provision of this Note contradicts or is inconsistent with the
provisions of the Loan Agreement, the provisions of the Loan Agreement shall control and supersede the
contradictory or inconsistent provision herein.
The Borrower shall prepay the outstanding principal sum hereof, as a whole or in part, in the same
amount and on the same dates, and with the same premiums, if any, as Series 2017A-1 Bonds called for
redemption prior to their maturity in accordance with the provisions of the Indenture. Presentation,
demand, protest and notice of dishonor are hereby expressly waived by the Borrower.

D-1-1
D-1-2
B-17
 EXHIBIT D-2 This Note is also secured by the Mortgages (as defined in the Indenture).
[FORM OF SERIES 2017A-2 NOTE] If an Event of Default, as defined in the Indenture, or a Default as defined in the Loan Agreement,
SENIOR LIVING PROMISSORY NOTE SERIES 2017A-2 shall occur, the principal hereof and accrued interest hereon may, at the option of the holder hereof, be
declared due and payable on the terms, in the manner and with the effect provided in the Indenture or the
$3,240,000 December 20, 2017
Loan Agreement.
This Note is a contract made under and shall be construed in accordance with and governed by the
FOR VALUE RECEIVED, the borrower executing this Senior Living Promissory Note Series laws of the State of Oklahoma.
2017A-2, and its successors and assigns (the “Borrower”), promises to pay to UMB Bank, N.A., or its
LEADING LIFE SENIOR LIVING, INC.
successor, as trustee (the “Trustee”) under that certain Trust Indenture dated as of December 1, 2017 (the
“Indenture”), between the Trustee and The Oklahoma Development Finance Authority (the “Issuer”), the
principal sum of $3,240,000 payable on July 1, 2033, or such earlier dates as required in the Indenture or
the Loan Agreement (as defined below), and interest accrued on the unpaid portion thereof, from the date
hereof at the rate for each day of accrual equal to the rates of interest borne by the bonds of the Issuer By: ___________________________________
designated as Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Authorized Representative
Series 2017A-2 (“Series 2017A-2 Bonds”) at the time Outstanding (as defined in the Indenture) payable on
the dates and computed as described in the Indenture and the Loan Agreement, relating to principal and
interest on the Series 2017A-2 Bonds. Simultaneously with the issuance of the Series 2017A-2 Bonds, the
Issuer is issuing its Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves
Project) Series 2017A-1 (the “Series 2017A-1 Bonds” and, together with the Series 2017A-2 Bonds, the
“Series 2017A Bonds”) and Second Tier Series 2017B (the “Series 2017B Bonds,” which together with the
Series 2017A Bonds are referred to herein as the “Series 2017 Bonds”).
This Senior Living Promissory Note Series 2017A-2 (this “Note”) and the payments required to be
made hereunder (other than Reserved Rights) have been irrevocably assigned, without recourse, to the
Trustee under the Indenture and such payments will be made directly to the Trustee for the account of the
Issuer pursuant to such assignment. All the terms, conditions and provisions of the Indenture, the Loan
Agreement and the Series 2017A-2 Bonds are hereby incorporated as a part of this Note.
The principal hereof (and premium, if any) and the interest hereon shall be payable at the designated
corporate trust office of the Trustee on the date such payments come due. All such payments shall be in
immediately available funds or in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
If the specified date for any such payment shall be a day other than a Business Day (as defined in
the Indenture), then such payment may be made on the next succeeding day that is a Business Day without
additional interest and with the same force and effect as if made on the specified date for such payment.
This Note is executed and delivered by the Borrower pursuant to the Loan Agreement, dated as of
December 1, 2017 (the “Loan Agreement”), among the Issuer, the Borrower and the Trustee relating to the
Series 2017 Bonds, to evidence a loan by the Issuer to the Borrower thereunder from proceeds of the Series
2017A-2 Bonds. To the extent that any provision of this Note contradicts or is inconsistent with the
provisions of the Loan Agreement, the provisions of the Loan Agreement shall control and supersede the
contradictory or inconsistent provision herein.
The Borrower shall prepay the outstanding principal sum hereof, as a whole or in part, in the same
amount and on the same dates, and with the same premiums, if any, as Series 2017A-2 Bonds called for
redemption prior to their maturity in accordance with the provisions of the Indenture. Presentation,
demand, protest and notice of dishonor are hereby expressly waived by the Borrower.

D-2-1
D-2-2

EXHIBIT D-3 This Note is also secured by the Mortgages (as defined in the Indenture).
[FORM OF SERIES 2017B NOTE] If an Event of Default, as defined in the Indenture, or a Default as defined in the Loan Agreement,
SENIOR LIVING PROMISSORY NOTE SERIES 2017B shall occur, the principal hereof and accrued interest hereon may, at the option of the holder hereof, be
declared due and payable on the terms, in the manner and with the effect provided in the Indenture or the
$12,395,000 December 20, 2017
Loan Agreement.
This Note is a contract made under and shall be construed in accordance with and governed by the
FOR VALUE RECEIVED, the borrower executing this Senior Living Promissory Note Series laws of the State of Oklahoma.
2017B, and its successors and assigns (the “Borrower”), promises to pay to UMB Bank, N.A., or its
LEADING LIFE SENIOR LIVING, INC.
successor, as trustee (the “Trustee”) under that certain Trust Indenture dated as of December 1, 2017 (the
“Indenture”), between the Trustee and The Oklahoma Development Finance Authority (the “Issuer”), the
principal sum of $12,395,000 payable on July 1, 2053, or such earlier dates as required in the Indenture or
the Loan Agreement (as defined below), and interest accrued on the unpaid portion thereof, from the date
hereof at the rate for each day of accrual equal to the rates of interest borne by the bonds of the Issuer By: ___________________________________
designated as Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Authorized Representative
Second Tier Series 2017B (“Series 2017B Bonds”) at the time Outstanding (as defined in the Indenture)
payable on the dates and computed as described in the Indenture and the Loan Agreement, relating to
principal and interest on the Series 2017B Bonds. Simultaneously with the issuance of the Series 2017B
Bonds, the Issuer is issuing its Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn
Leaves Project) Series 2017A-1 and Taxable Series 2017A-2 (the “Series 2017A Bonds,” which together
with the Series 2017B Bonds are referred to herein as the “Series 2017 Bonds”).
This Senior Living Promissory Note Series 2017B (this “Note”) and the payments required to be
made hereunder (other than Reserved Rights) have been irrevocably assigned, without recourse, to the
Trustee under the Indenture and such payments will be made directly to the Trustee for the account of the
Issuer pursuant to such assignment. All the terms, conditions and provisions of the Indenture, the Loan
Agreement and the Series 2017B Bonds are hereby incorporated as a part of this Note.
The principal hereof (and premium, if any) and the interest hereon shall be payable at the designated
corporate trust office of the Trustee on the date such payments come due. All such payments shall be in
immediately available funds or in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
If the specified date for any such payment shall be a day other than a Business Day (as defined in
the Indenture), then such payment may be made on the next succeeding day that is a Business Day without
additional interest and with the same force and effect as if made on the specified date for such payment.
This Note is executed and delivered by the Borrower pursuant to the Loan Agreement, dated as of
December 1, 2017 (the “Loan Agreement”), among the Issuer, the Borrower and the Trustee relating to the
Series 2017 Bonds, to evidence a loan by the Issuer to the Borrower thereunder from proceeds of the Series
2017B Bonds. To the extent that any provision of this Note contradicts or is inconsistent with the
provisions of the Loan Agreement, the provisions of the Loan Agreement shall control and supersede the
contradictory or inconsistent provision herein.
The Borrower shall prepay the outstanding principal sum hereof, as a whole or in part, in the same
amount and on the same dates, and with the same premiums, if any, as Series 2017B Bonds called for
redemption prior to their maturity in accordance with the provisions of the Indenture. Presentation,
demand, protest and notice of dishonor are hereby expressly waived by the Borrower.

D-3-1
D-3-2
B-18
 EXHIBIT E LEADING LIFE SENIOR LIVING, INC.

COMPLIANCE MONITORING REPORT

To: UMB Bank, N.A., as Trustee under the Trust Indenture dated as of December 1, 2017, relating to By:____________________________________
The Oklahoma Development Finance Authority Senior Living Revenue Bonds (Leading Life Authorized Officer
Senior Living, Inc. – Autumn Leaves Project) Series 2017 (the "Series 2017 Bonds")
Attention: Trust Department

Leading Life Senior Living, Inc. (the "Borrower"), hereby represents and warrants that:

1. A review of the activities of the Borrower during the period of _____________ through
_____________ and of the Borrower's performance under the Loan Agreement has been made under the
supervision of the undersigned.

2. The Borrower owns ______________________________ (the "Project").

3. The Project was financed, in substantial part, as a result of the loan of the proceeds of the
Series 2017 Bonds.

4. The undersigned has read and is thoroughly familiar with the provisions of Section 4.18 of
the Loan Agreement, dated as of December 1, 2017, between The Oklahoma Development Finance
Authority and the Borrower (the "Loan Agreement"). Hereinafter, unless otherwise expressly provided
herein or unless the context requires otherwise, the capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Loan Agreement.

5. Commencing on January 1, 2019, 20% of the units of the Project shall at all times be rented
to and occupied by Low Income Tenants.

6. As of the date of this Certificate, the following percentages of units in the Project (i) are
occupied by Low Income Tenants or (ii) are currently vacant and being held available for such occupancy
and have been so held continuously since the date a Low Income Tenant vacated such unit, as indicated:

Occupied by Low Income Tenants: ________ percent

Held vacant for occupancy

continuously since last
occupied by Low Income
Tenant: ________ percent

7. To the best knowledge of the undersigned, after due inquiry, all units were rented or
available for rental on a continuous basis during the immediately preceding calendar quarter to members of
the general public, and the Borrower is in compliance with and is not now and has not been in default under
the terms of the Affordability Covenant in Section 4.18 of the Loan Agreement.

E-1 E-2

EXHIBIT F
EXCESS SURPLUS FUND AMOUNT CERTIFICATE
for the Annual Evaluation Date of December 31, 20__ (the “Annual Evaluation Date”)

To: UMB Bank, N.A., as Trustee (the “Trustee”) under the Trust Indenture dated as of December 1,
2017 (the “Indenture”), relating to The Oklahoma Development Finance Authority Senior Living
Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017
Attention: Trust Department

The undersigned Borrower Representative designated pursuant to the terms of the aforesaid
Indenture and a Loan Agreement of even date therewith (the “Agreement”) relating to the Bonds identified
above among Leading Life Senior Living, Inc., a Texas nonprofit corporation (the “Borrower”), the Trustee
and The Oklahoma Development Finance Authority hereby certifies that:

1. [An Excess Surplus Fund Amount was on deposit in the Surplus Fund in the amount of
$__________ as of the Annual Evaluation Date and in the amount of $__________ as of
the date of this certificate] or [An Excess Surplus Fund Amount was not on deposit in the
Surplus Fund as of the Annual Evaluation Date.]1

2. The Borrower has satisfied the Coverage Test (as shown in a report by a Certified Public
Account delivered by the Borrower to the Trustee) for the twelve-month period ending on [THIS PAGE INTENTIONALLY LEFT BLANK]
the Annual Evaluation Date.

3. No Event of Default, or event that with the passage of time or the giving of notice or both
would constitute an Event of Default, has occurred and is continuing.

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the
Indenture.

Date: _____________

LEADING LIFE SENIOR LIVING, INC.

By: __________________________________
Borrower Representative

1
If no Excess Surplus Fund Amount is on deposit in the Surplus Fund as of the Annual Evaluation Date, then items
#2 and #3 will not need to be included in this Certificate.

F-1
B-19
 TABLE OF CONTENTS

TRUST INDENTURE (This Table of Contents is not a part of this

Indenture of Trust and is only for convenience of reference)
Dated as of December 1, 2017
Page
by and between
ARTICLE I DEFINITIONS AND INTERPRETATION ............................................................................................ 4 
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY,
Section 1.01.  Definitions. ................................................................................................................................... 4 
as Issuer Section 1.02.  Rules of Construction. ................................................................................................................ 22 
Section 1.03.  Content of Certificates and Opinions. ........................................................................................ 22 
and
ARTICLE II. THE SERIES 2017 BONDS ............................................................................................................... 23 
UMB BANK, N.A., Section 2.01.  Authority for and Issuance of Series 2017 Bonds, Interest on the Series 2017 Bonds. .............. 23 
as Trustee Section 2.02.  Interest on Bonds........................................................................................................................ 24 
Section 2.03.  Execution.................................................................................................................................... 25 
Section 2.04.  Limited Obligations.................................................................................................................... 25 
Section 2.05.  Authentication. ........................................................................................................................... 26 
Section 2.06.  Form of Bonds............................................................................................................................ 26 
Section 2.07.  Delivery of Series 2017 Bonds. .................................................................................................. 26 
Section 2.08.  Mutilated, Lost, Stolen or Destroyed Bonds. ............................................................................. 27 
Relating to Section 2.09.  Registration and Transfer of Bonds; Persons Treated as Owners. ............................................. 27 
Section 2.10.  Cancellation of Bonds. ............................................................................................................... 28 
Section 2.11.  Temporary Bonds. ...................................................................................................................... 28 
Section 2.12.  Book Entry Form. ....................................................................................................................... 28 
Section 2.13.  Additional Bonds........................................................................................................................ 29 
$30,275,000
Section 2.14.  Delivery of Additional Bonds. ................................................................................................... 30 
The Oklahoma Development Finance Authority
Senior Living Revenue Bonds ARTICLE III. REDEMPTION OR PURCHASE OF SERIES 2017 BONDS.......................................................... 32 
(Leading Life Senior Living, Inc. – Autumn Leaves Project) Section 3.01.  Mandatory Redemption of Series 2017 Bonds. .......................................................................... 32 
Series 2017 Section 3.02.  Optional Redemption of Series 2017 Bonds. ............................................................................. 32 
Section 3.03.  Mandatory Sinking Fund Redemption. ...................................................................................... 32 
Section 3.04.  Purchase in Lieu of Redemption. ............................................................................................... 35 
Section 3.05.  Direction to Purchase. ................................................................................................................ 35 
Consisting of: Section 3.06.  Selection of Bonds to Be Redeemed. ......................................................................................... 36 
Section 3.07.  Notice of Redemption. ............................................................................................................... 36 
Section 3.08.  Payment of Redemption Price. ................................................................................................... 37 
Section 3.09.  (Intentionally Omitted). .............................................................................................................. 37 
$14,640,000 Series 2017A-1 Section 3.10.  Effect of Notice of Redemption. ................................................................................................ 37 
$3,240,000 Taxable Series 2017A-2 Section 3.11.  Redemption Payments. ............................................................................................................... 38 
Section 3.12.  Special Mandatory Redemption. ................................................................................................ 38 
$12,395,000 Second Tier Series 2017B Section 3.13.  Special Redemption Upon Sale of Facilities. ............................................................................. 38 
Section 3.14.  Mandatory Redemption from Debt Service Reserve Funds. ...................................................... 38 
ARTICLE IV. GENERAL COVENANTS ............................................................................................................... 40 
Section 4.01.  Payment of Bonds; Limited Obligations. ................................................................................... 40 
Section 4.02.  Performance of Covenants; Authority; Due Execution. ............................................................. 40 
Section 4.03.  Instruments of Further Assurance. ............................................................................................. 40 
Section 4.04.  Recording and Filing; Further Instruments. ............................................................................... 40 
Section 4.05.  (Intentionally Omitted). .............................................................................................................. 40 
Section 4.06.  No Disposition of Trust Estate, Project or Project Revenues. .................................................... 41 
Section 4.07.  Access to Books. ........................................................................................................................ 41 

Section 4.08.  Trustee to Retain Information. ................................................................................................... 41  Section 9.06.  Action by Trustee. ...................................................................................................................... 69 
Section 4.09.  Tax Covenants Relating to the Tax-Exempt Bonds. .................................................................. 41  Section 9.07.  Good Faith Reliance. .................................................................................................................. 69 
Section 9.08.  Dealings in Bonds or with the Issuer or the Borrower. .............................................................. 69 
ARTICLE V. DEPOSIT OF BOND PROCEEDS; FUNDS AND ACCOUNTS; REVENUES .............................. 43 
Section 9.09.  Resignation of Trustee. .............................................................................................................. 69 
Section 5.01.  Creation of Funds and Accounts. ............................................................................................... 43  Section 9.10.  Removal of Trustee. ................................................................................................................... 69 
Section 5.02.  Deposit and Use of Proceeds. ..................................................................................................... 43  Section 9.11.  Appointment of Successor Trustee............................................................................................. 70 
Section 5.03.  Disbursements from the Project Fund. ....................................................................................... 43  Section 9.12.  Qualifications of Trustee. ........................................................................................................... 70 
Section 5.04.  Revenue Fund............................................................................................................................. 44  Section 9.13.  Judicial Appointment of Successor Trustee. .............................................................................. 70 
Section 5.05.  Senior Bonds Bond Fund. .......................................................................................................... 46  Section 9.14.  Acceptance of Trusts by Successor Trustee. .............................................................................. 70 
Section 5.06.  (Intentionally Omitted). .............................................................................................................. 47  Section 9.15.  Successor by Merger or Consolidation....................................................................................... 70 
Section 5.07.  Second Tier Bonds Bond Fund. ................................................................................................. 47  Section 9.16.  Intervention in Litigation of the Issuer. ...................................................................................... 71 
Section 5.08.  Second Tier Bonds Debt Service Reserve Fund, ........................................................................ 48  Section 9.17.  Paying Agent. ............................................................................................................................. 71 
Section 5.09.  (Intentionally Omitted). .............................................................................................................. 48  Section 9.18.  Qualifications of Paying Agent; Resignation; Removal. ............................................................ 71 
Section 5.10.  (Intentionally Omitted). .............................................................................................................. 48  Section 9.19.  Several Capacities; Duty To Cooperate. .................................................................................... 71 
Section 5.11.  (Intentionally Omitted). .............................................................................................................. 49  Section 9.20.  Additional Duties. ...................................................................................................................... 71 
Section 5.12.  (Intentionally Omitted). .............................................................................................................. 49  Section 9.21.  Notice to Rating Agency. ........................................................................................................... 71 
Section 5.13.  Rebate Fund. .............................................................................................................................. 49  Section 9.22.  Survival. ..................................................................................................................................... 72 
Section 5.14.  Operating Fund........................................................................................................................... 49 
ARTICLE X. EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP OF BONDS 73 
Section 5.15.  Operations and Maintenance Reserve Fund. .............................................................................. 50 
Section 5.16.  Insurance and Tax Escrow Fund. ............................................................................................... 50 
ARTICLE XI. MODIFICATION OF BOND DOCUMENTS .................................................................................. 74 
Section 5.17.  Repair and Replacement Fund. .................................................................................................. 51 
Section 5.18.  Administration Fund. ................................................................................................................. 51  Section 11.01.  Limitations. ................................................................................................................................ 74 
Section 5.19.  Surplus Fund. ............................................................................................................................. 51  Section 11.02.  Supplemental Indentures Without Owner Consent. ................................................................... 74 
Section 5.20.  Bonds Not Presented for Payment. ............................................................................................. 53  Section 11.03.  Supplemental Indentures Requiring Owners’ Consent............................................................... 74 
Section 5.21.  Money Held in Trust. ................................................................................................................. 53  Section 11.04.  Amendment of Borrower Documents Without Owner Consent. ................................................ 75 
Section 5.22.  Payment to the Borrower............................................................................................................ 53  Section 11.05.  Amendment of Borrower Documents Requiring Owners’ Consent. .......................................... 76 
Section 5.23.  Deposit of Extraordinary Revenues............................................................................................ 53  Section 11.06.  Procedures for Amendments. ..................................................................................................... 76 
Section 11.07.  Opinions; Certificate. ................................................................................................................. 76 
ARTICLE VI. INVESTMENTS ............................................................................................................................... 55 
Section 11.08.  Effect of Amendments; Other Consents. .................................................................................... 76 
ARTICLE VII. DEFEASANCE ................................................................................................................................ 57  ARTICLE XII. MISCELLANEOUS ........................................................................................................................ 78 
Section 12.01.  Successors of the Issuer.............................................................................................................. 78 
ARTICLE VIII. DEFAULTS AND REMEDIES ..................................................................................................... 58 
Section 12.02.  Parties in Interest. ....................................................................................................................... 78 
Section 8.01.  Events of Default........................................................................................................................ 58  Section 12.03.  Severability. ............................................................................................................................... 78 
Section 8.02.  Remedies. ................................................................................................................................... 59  Section 12.04.  No Personal Liability. ................................................................................................................ 78 
Section 8.03.  Priority of Payments after Senior Bonds Event of Default......................................................... 61  Section 12.05.  Counterparts. .............................................................................................................................. 78 
Section 8.04.  Priority of Payments after Second Tier Bonds Event of Default................................................ 62  Section 12.06.  Governing Law........................................................................................................................... 78 
Section 8.05.  (Intentionally Omitted). .............................................................................................................. 63  Section 12.07.  Notices. ...................................................................................................................................... 78 
Section 8.06.  (Intentionally Omitted). .............................................................................................................. 63  Section 12.08.  Holidays. .................................................................................................................................... 80 
Section 8.07.  Application of Proceeds from Foreclosure of Mortgages........................................................... 63 
Section 8.08.  Termination of Proceedings. ...................................................................................................... 64  EXHIBIT A-1 - FORM OF SERIES 2017A-1 BONDS .......................................................................................... A-1
Section 8.09.  Owners’ Direction of Proceedings. ............................................................................................ 64  EXHIBIT A-2 - FORM OF SERIES 2017A-2 BONDS............................................................................................ A-2
Section 8.10.  Limitations on Rights of Owners. .............................................................................................. 64  EXHIBIT B - FORM OF SERIES 2017B BONDS ................................................................................................. B-1
Section 8.11.  Possession of Bonds by Trustee Not Required. .......................................................................... 64 
Section 8.12.  Remedies Not Exclusive. ........................................................................................................... 65 
Section 8.13.  No Waiver of Default. ................................................................................................................ 65 
Section 8.14.  Notice of Event of Default. ........................................................................................................ 65 
ARTICLE IX. TRUSTEE ......................................................................................................................................... 66 
Section 9.01.  Acceptance of Trusts. ................................................................................................................. 66 
Section 9.02.  No Responsibility for Recitals. .................................................................................................. 68 
Section 9.03.  Limitations on Liability. ............................................................................................................. 68 
Section 9.04.  Compensation, Expenses and Advances. ................................................................................... 68 
Section 9.05.  Notice of Events of Default. ....................................................................................................... 68 

ii iii

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 TRUST INDENTURE Bonds, and to pay the costs of issuance of the Bonds, (ii) make payments sufficient to pay the principal of
and interest on the Bonds when due (whether at maturity, by redemption, acceleration or otherwise), and
THIS TRUST INDENTURE is made and entered into as of December 1, 2017, by and between
(iii) observe the other covenants and agreements and make the other payments set forth therein; and
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY, a public trust of the State of Oklahoma
(the “Issuer”) and UMB BANK, N.A., a national banking association organized and existing under the laws WHEREAS, the Borrower has delivered to the Issuer three promissory notes dated the date of
of the United States of America having an office and a place of business in Dallas, Texas, and being issuance of the Series 2017 Bonds in an original principal amount equal to the original principal amount of
qualified to accept and administer the trusts hereby created (the “Trustee”). All capitalized terms used in each respective Series or subseries of the Series 2017 Bonds (as amended, modified, or supplemented from
this Indenture and not otherwise defined herein have the meanings ascribed to them in Section 1.01 of this time to time, the “Series 2017 Notes”) evidencing its obligation to repay the Loan, and the Issuer has made
Indenture. the Loan to the Borrower, subject to the terms and conditions of the Loan Agreement and this Indenture
and the two Mortgage with Power of Sale and Security Agreements relating to each of the two facilities
RECITALS: comprising the Project, each dated as of December 1, 2017, each by the Borrower to the trustee named
WHEREAS, the Issuer is a public trust created by a Declaration of Trust dated November 1, 1974, therein, for the benefit of the Trustee, as from time to time supplemented and amended (collectively, the
as amended (the “Original Declaration”), for the furtherance of public purposes and the benefit of the State “Mortgages”), except as otherwise herein provided; and
of Oklahoma pursuant to the provisions of Title 60, Oklahoma Statutes 2016, Section 176 et seq., as WHEREAS, the Series 2017 Bonds, the certificate of authentication to be endorsed on the Series
amended, and Title 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended (collectively, the “Trust 2017 Bonds and the form of assignment to be endorsed on each respective series of the Series 2017 Bonds
Act”), and other applicable statutes and laws of the State of Oklahoma, such Original Declaration being are to be in substantially the forms, with appropriate variations, omissions and insertions as permitted or
further amended by an Amended and Restated Declaration of Trust dated February 11, 1988, which, among required by this Indenture described in Exhibit A-1, Exhibit A-2 and Exhibit B hereto; and
other things, changed the name of the Issuer from The Oklahoma Development Authority to The Oklahoma
WHEREAS, all acts and proceedings required by law necessary to make the Series 2017 Bonds,
Development Finance Authority, such Restated Declaration being accepted and approved by the Governor
when authenticated by the Trustee and duly issued as provided in this Indenture, the valid, binding and legal
of Oklahoma on February 12, 1988, the most recent amendment to the Original Declaration having occurred
limited obligations of the Issuer, and to constitute this Indenture a valid and binding agreement for the uses
in 1994 under the provisions of an Amended and Restated Declaration of Trust dated July 1, 1994, which
and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution
was approved by the Governor of Oklahoma on August 5, 1994; and
and delivery of this Indenture have been in all respects duly authorized.
WHEREAS, the Issuer is authorized to issue bonds in accordance with the Trust Act and Title 74, GRANTING CLAUSES
Oklahoma Statutes 2016, Section 5062.1 et seq., as amended (together with the Trust Act, the “Act”), and
NOW, THEREFORE, the Issuer, in consideration of the premises and the acceptance by the Trustee
to use the proceeds thereof for financing all or part of the cost of certain projects, including health care
of the trusts hereby created and of the purchase and acceptance of the Bonds by the Owners thereof, and
facilities; and
for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, to
WHEREAS, pursuant to the laws of the State of Oklahoma, and particularly the Act, the Issuer has secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor
agreed to issue its revenue bonds and to lend the proceeds thereof to Leading Life Senior Living, Inc., a and effect and to secure the performance and observance by the Issuer of all the covenants expressed or
Texas nonprofit corporation (the “Borrower”), for the purpose of financing the cost of the acquisition of implied herein and in the Bonds, does hereby bargain, sell, convey, mortgage, assign, pledge and grant, a
two memory care facilities, including land, buildings, and equipment, all to be owned by the Borrower and security interest in the Trust Estate to the Trustee, and its successors in trust and assigns forever, for the
located in the cities of Oklahoma City and Edmond in the State of Oklahoma (the “Project”), paying certain securing of the performance of the obligations of the Issuer hereinafter set forth, including all of the Issuer’s
capital expenditures and startup costs related to the Project, funding debt service reserve funds, and paying right, title and interest in and to the following property:
a portion of the costs of issuing such revenue bonds; and GRANTING CLAUSE FIRST
WHEREAS, pursuant to and in accordance with the Act, the Issuer desires to provide funds to For the benefit of the Senior Bonds, the Senior Bonds Trust Estate; and for the benefit of the Second
finance the acquisition of the Project by issuing its Senior Living Revenue Bonds (Leading Life Senior Tier Bonds, the Second Tier Bonds Trust Estate (as such terms are defined herein) together with all right,
Living, Inc. – Autumn Leaves Project) Series 2017A-1 (the “Series 2017A-1 Bonds”), Taxable Series title and interest of the Issuer therein including, but without limiting the generality of the foregoing, the
2017A-2 (the “Series 2017A-2 Bonds” and, together with the Series 2017A-1 Bonds, the “Series 2017A present and continuing right to receive, receipt for, collect or make claim for any of the moneys, income,
Bonds” or the “Senior Bonds”) and Second Tier Series 2017B (the “Series 2017B Bonds” or the “Second revenues, issues, profits and other amounts payable or receivable under the Loan Agreement and the Notes,
Tier Bonds”) in the combined aggregate principal amount of $30,275,000 (collectively, the “Series 2017 to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things that
Bonds” and, together with any Additional Bonds that may be issued hereunder, the “Bonds”), pursuant to the Issuer or any other person is or may become entitled to do under the Loan Agreement and the Notes;
this Indenture; and
GRANTING CLAUSE SECOND
WHEREAS, the Issuer has determined that the purpose of the Act in providing for the acquisition
Any and all other property of each name and nature from time to time hereafter by delivery or by
of the Project will be realized by the issuance of the Series 2017 Bonds, and the loan of the proceeds of
writing of any kind pledged or assigned as and for additional security for the Senior Bonds or the Second
such Series 2017 Bonds (the “Loan”) pursuant to a Loan Agreement dated as of even date herewith (the
Tier Bonds, hereunder, by anyone, to the Trustee, which is hereby authorized to receive any and all such
“Loan Agreement”) among the Issuer, the Trustee and the Borrower, and therefore the Issuer has agreed to
property at any and all times and to hold and apply the same subject to the terms hereof;
issue the Series 2017 Bonds and lend the proceeds thereof to the Borrower and the Borrower has agreed to
(i) apply the proceeds of the Loan to pay the costs of acquisition of the Project, to pay certain capital TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or hereafter
expenditures and startup costs related to the Project, to fund debt service reserve funds for certain Series of acquired, to the Trustee and its successors in trust and assigns forever;
1 2

IN TRUST NEVERTHELESS, as to the Senior Bonds Trust Estate, upon the terms and trusts herein ARTICLE I
set forth for the equal and proportionate benefit, security and protection of all present and future Owners of
the Senior Bonds from time to time issued under and secured by this Indenture without privilege, priority DEFINITIONS AND INTERPRETATION
or distinction as to the lien or otherwise of any of the Senior Bonds over any of the other Senior Bonds,
Section 1.01. Definitions. Unless the context otherwise requires, the following words and
except as specifically set forth herein;
phrases shall, for all purposes of this Indenture and of the Loan Agreement and of any supplement or
IN TRUST NEVERTHELESS, as to the Second Tier Bonds Trust Estate, upon the terms and trusts amendment hereto or thereto, have the following meanings:
herein set forth for the equal and proportionate benefit, security and protection of all present and future
“Account” or “Accounts” means any one or more, as the case may be, of the named and unnamed
Owners of the Second Tier Bonds from time to time issued under and secured by this Indenture without
accounts established within any Fund.
privilege, priority or distinction as to the lien or otherwise of any of the Second Tier Bonds over any of the
other Second Tier Bonds, except as specifically set forth herein; “Act” has the meaning assigned thereto in the recitals.
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay, or “Additional Bonds” means the additional bonds authorized to be issued by the Issuer pursuant to
cause to be paid, the principal of, premium, if any, and interest on the Bonds due or to become due thereon, the terms and conditions of Section 2.13 of this Indenture.
at the times and in the manner mentioned in the Bonds and as provided in Article VII hereof according to “Additional Payments” means those payments described in Section 3.2(b)(ii) of the Loan
the true intent and meaning thereof, and shall cause the payments to be made as required under Article IV Agreement.
hereof, or shall provide, as permitted hereby, for the payment thereof in accordance with Article VII hereof,
and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms “Adjusted Income" means the adjusted income of a person (together with the adjusted income of
of this Indenture to be kept, performed and observed by it, and shall disburse or cause to be disbursed to all persons who intend to reside with such person in one residential unit) calculated pursuant to section
the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, 142(d) of the Code, after payment of rent.
then upon such final payments or deposits as provided in Article VII hereof, this Indenture and the rights “Administration Expenses” means (a) the Ordinary Trustee’s Fees and Expenses, (b) the
hereby granted shall cease, terminate and be void. Dissemination Agent Fee, (c) the Rebate Analyst Fee, (d) the Rating Agency Fee, (e) the Issuer’s Fees and
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Expenses, and (f) the fees and expenses of any Servicer.
Bonds issued and secured hereunder are to be issued, authenticated and delivered and all of the Trust Estate “Administration Fund” means the trust fund by that name established pursuant to Section 5.01
is to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, hereof.
agreements, trusts, uses and purposes hereinafter expressed, and the Issuer has agreed and covenanted, and
does hereby agree and covenant, with the Trustee and with the respective Owners, from time to time, of the “Affiliate” means any Person (a) directly or indirectly controlling, controlled by, or under common
Bonds, or any part thereof, as follows: control with the Borrower; or (b) a majority of the members of the Directing Body of which are members
of the Directing Body of the Borrower. For purposes of this definition, control means with respect to: (a)
a corporation having stock, the ownership, directly or indirectly, of more than 50% of the securities (as
defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a majority of the directors of such
corporation; (b) a not for profit corporation not having stock, having the power to elect or appoint, directly
or indirectly, a majority of the members of the Directing Body of such corporation; or (c) any other entity,
the power to direct the management of such entity through the ownership of at least a majority of its voting
securities or the right to designate or elect at least a majority of the members of its Directing Body, by
contract or otherwise. For the purposes of this definition, “Directing Body” means with respect to: (a) a
corporation having stock, such corporation’s board of directors and owners, directly or indirectly, of more
than 50% of the securities (as defined in Section 2(1) of the Securities Act of 1933, as amended) of any
class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the directors of such corporation (both of which groups will be considered a Directing Body);
(b) a not for profit corporation not having stock, such corporation’s members if the members have complete
discretion to elect the corporation’s directors, or the corporation’s directors if the corporation’s members
do not have such discretion; or (c) any other entity, its governing body or board. For the purposes of this
definition, all references to directors and members will be deemed to include all entities performing the
function of directors or members however denominated.
“Amend” or “Amendment,” as used in Article XI hereof, refer to any amendment, modification,
alteration or supplement to any Bond Document, or any waiver of any provision thereof.
“Annual Debt Service” means, for any twelve month period, the amount of the scheduled principal
and interest payment requirements with respect to all Outstanding Bonds, or all Outstanding Bonds of one
3 4

B-21
or more Series, or Indebtedness, as applicable, for such twelve month period, subject to Section 6.9(a)(i)(B) “Borrower Documents” means the Loan Agreement, the Mortgages, the Notes, the Continuing
of the Loan Agreement; provided that there shall be excluded from Annual Debt Service on any Series of Disclosure Agreement, the Borrower’s Tax Certificate, the Management Agreement, the Collateral
Bonds the amount of any interest on such Series of Bonds for which the proceeds of Bonds have been Assignment of Management Agreements, and together with all other documents or instruments executed
deposited into the Interest Account related to such Series of Bonds. For Bonds or Indebtedness that bears by the Borrower evidencing or securing the Borrower’s Indebtedness under the Loan Agreement, in each
interest at a variable rate, such interest rate shall be assumed to be: (1) for the purpose of determining case as the same may be amended or supplemented from time to time.
whether such Bonds or Indebtedness may be incurred, the rate estimated by a Consultant to be in effect on
“Borrower Representative” means each person at the time designated to act on behalf of the
debt of comparable terms and creditworthiness at the time of such incurrence; and (2) for future periods for
Borrower by written certificate furnished to the Issuer and the Trustee on behalf of the Borrower containing
Bonds or Indebtedness Outstanding, including any projected Debt Service Coverage Ratios, the higher of
the specimen signature of such person and any designated alternates and signed on behalf of the Borrower
(a) the average interest rate on such Bonds or Indebtedness Outstanding for the preceding calendar year or
by the President, any Vice President, the Secretary, or any Assistant Secretary of the Borrower.
(b) the rate then in effect on such Bonds or Indebtedness.
“Borrower’s Tax Certificate” means the Borrower’s Certification executed by the Borrower on the
“Annual Evaluation Date” means each December 31, commencing December 31, 2019.
Closing Date, which is attached to the Federal Tax Certificate executed by the Issuer on the Closing Date.
“Architect” means any architect, engineer or firm of architects or engineers that is Independent and
“Budget” means the budget described in Section 6.10 of the Loan Agreement.
that is appointed by the Borrower for the purpose of passing on questions relating to the design and
construction of any particular facility, has all licenses and certifications necessary for the performance of “Budgeted Operating Requirement” means all Operating Expenses, exclusive of amounts to be
such services, and has a favorable reputation for skill and experience in performing similar services in deposited to or payable from any Interest Account or the Administration Fund, Insurance and Tax Escrow
respect of a facility of a comparable size and nature of the Project. Fund, Operations and Maintenance Reserve Fund or Repair and Replacement Fund, projected to be payable
in a particular month in accordance with the Budget.
“Audited Financial Statements” means the financial statements prepared for each Fiscal Year for
the Borrower prepared in accordance with generally accepted accounting principles and examined by a “Business Day” means any day other than a (i) Saturday, (ii) Sunday, (iii) day on which banking
Certified Public Accountant. institutions in (a) any city in which the designated corporate trust or principal operations offices of the
Trustee (such city being initially Dallas, Texas) are located, (b) the State of Missouri or (c) the City of New
“Authorized Denominations” means, (a) with respect to the Series 2017A Bonds and the Series
York, New York, are authorized or obligated by law or executive order to be closed, or (iv) day on which
2017B Bonds, $5,000 principal amount and any integral multiple of $5,000 in excess thereof, and (b) with
the New York Stock Exchange is closed.
respect to any Series of Additional Bonds, as provided in the Supplemental Indenture creating such Series
of Additional Bonds. “Cash and Investments” means the sum of cash, cash equivalents, and marketable securities of the
Borrower, including without limitation board-designated assets and amounts, if any, on deposit in the
“Beneficial Owner” means a Person owning a Beneficial Ownership Interest in the Bonds, as
Operating Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the
evidenced to the satisfaction of the Trustee.
Operating Account and the Surplus Fund, but excluding (a) all funds held in a Debt Service Reserve Fund,
“Beneficial Ownership Interest” means the right to receive payments and notices with respect to (b) proceeds of Short-Term Indebtedness, (c) donor-restricted funds and (d) any funds pledged or otherwise
the Bonds held in a book-entry system. subject to a security interest for debt other than the Bonds, as shown on the most recent Audited Financial
Statements or unaudited financial statements of the Borrower. For the purposes of calculations hereunder,
“Bond Counsel” means (a) McCall, Parkhurst & Horton L.L.P. or (b) any Independent Counsel of
an Unrestricted Contribution from an Affiliate shall be treated as being made during the period of such
nationally recognized standing in matters pertaining to the validity of, and exclusion from gross income for
calculation so long as the Unrestricted Contribution is made prior to the date the applicable certificate is
federal income tax purposes of interest on, obligations issued by states and political subdivisions, familiar
required to be delivered with respect to such calculation.
with the transactions contemplated under this Indenture appointed by the Borrower and reasonably
acceptable to the Issuer. “Certified Public Accountant” means any Person who is Independent, appointed by the Borrower,
actively engaged in the business of public accounting and duly licensed as a certified public accountant.
“Bond Documents” means this Indenture and the Borrower Documents.
“Clearing Agency” means any clearing agency under federal law operating and maintaining, with
“Bond Fund” means each trust fund by that name created pursuant to Section 5.01 hereof.
its participants or otherwise, a book-entry system to record Beneficial Ownership Interests in the Bonds,
“Bond Payment Date” means any Interest Payment Date, any Principal Payment Date and any other and to effect transfers of book-entry interests of the Bonds in book-entry form, which initially shall be The
date on which the principal of, premium, if any, or interest on the Bonds is to be paid to the Owners thereof, Depository Trust Company.
whether upon redemption, at maturity or upon acceleration of maturity of the Bonds.
“Closing Date” means, with respect to the Series 2017 Bonds, the date of initial issuance and
“Bond Year” means a 12-month period ending on January 1, except that the first Bond Year shall delivery of the Series 2017 Bonds and, with respect to any Series of Additional Bonds, the date of initial
begin on the date on which the Bonds are initially delivered and end on the next succeeding January 1. issuance and delivery thereof.
“Bonds” means, collectively, the Series 2017 Bonds and any Additional Bonds. “Code” means the Internal Revenue Code of 1986, the applicable Regulations, and any
“Borrower” means Leading Life Senior Living, Inc., a nonprofit corporation organized and existing amendments of, or successor provisions to, the foregoing and any official rulings, announcements, notices
under the laws of the State of Texas, and its authorized successors and assigns under Section 6.3 of the and procedures regarding any of the foregoing. Unless otherwise indicated, reference to a section of the
Loan Agreement. Code means that section of the Code, including such applicable regulations, rulings, announcements,
notices and procedures. Further, each reference to the Code is deemed to include any successor provisions

5 6

of any successor internal revenue law and applicable regulations (whether proposed, temporary or final) the Borrower or others, and payment for the miscellaneous expenses incidental to any of the foregoing
under such successor provision. items including the premium on any surety bond;
“Collateral Assignment of Management Agreements” means the Assignment of Rights Under (c) payment to the Trustee, as such payments become due, of the reasonable fees and expenses
Management Agreements and Consent of Manager dated as of December 1, 2017, between the Borrower of the Trustee other than its initial fee (as Trustee, bond registrar and paying agent) and of any paying agent
and the Trustee and consented to by the Manager, as in effect on the Closing Date and as it may thereafter properly incurred under this Indenture that may become due during the rehabilitation of the Project;
to be amended or supplemented from time to time in accordance with its terms.
(d) to such extent as they are not paid by a contractor for construction or installation with
“Compliance Certificate” means a certificate of a Borrower Representative stating that, as of the respect to any part of the Project, payment of the premiums on all insurance required to be taken out and
date of such certificate, the Borrower is in compliance with all requirements of the Borrower Documents maintained during the period of rehabilitation of the Project;
(with such exceptions as shall be acceptable to the Issuer).
(e) payment of the taxes, assessments, and other charges, if any, that may become payable
“Condemnation Award” means the total condemnation proceeds paid by the condemner as a result during the period of rehabilitation of the Project;
of condemnation or eminent domain proceedings with respect to all or any part of the Project or of any
(f) payment of expenses incurred in seeking to enforce any remedy against any contractor or
settlement or compromise of such proceedings.
subcontractor in respect of any default under a contract relating to the Project;
“Confirmation of Rating” means a written confirmation, obtained prior to the event or action under
(g) payment of out-of-pocket fees and expenses of the Borrower, if any, including, but not
scrutiny, from each Rating Agency then rating any Outstanding Bonds to the effect that, following the
limited to, architectural, engineering, and supervisory services with respect to the Project;
proposed action or event under scrutiny at the time such confirmation is sought, the rating or ratings of such
Rating Agency with respect to all Series of Bonds then Outstanding and then rated by such Rating Agency (h) payment of the fees or out-of-pocket expenses, if any, of those providing services with
will not be downgraded, suspended, qualified or withdrawn as a result of such action or event. respect to the Project, including, but not limited to, architectural, engineering, and supervisory services;
“Consultant” means a Person who is Independent, appointed by the Borrower, and who is nationally (i) payment to the Borrower of such amounts, if any, as are necessary to reimburse the
recognized as being expert as to matters for which its certificate or advice is required or contemplated. Borrower in full for all advances and payments made by it for any of the items set forth in (a) through (h)
above; and
“Continuing Disclosure Agreement” means the Disclosure Dissemination Agent Agreement dated
December 1, 2017 between the Borrower and the Dissemination Agent, as in effect on the Closing Date (j) payment of any other costs and expenses relating to the Project that would constitute a
and as it may thereafter be amended or supplemented from time to time in accordance with its terms. “cost” or “expense” permitted to be paid under the Act.
“Controlling Owners” means, as of any date, in the case of consent or direction to be given “Counsel” means an attorney or firm of attorneys duly admitted to practice law before the highest
hereunder, the Owners of the majority in aggregate principal amount of the then Outstanding Senior Bonds; court of any state and not unsatisfactory to the Trustee or the Issuer.
provided if no Senior Bonds are then Outstanding, then the Owners of the majority in aggregate principal “Coverage Test” means that the Debt Service Coverage Ratio for the relevant period was equal to
amount of the then Outstanding Second Tier Bonds. or greater than 1.05 to 1.00 on all Outstanding Bonds and other Long-Term Indebtedness.
“Costs of Issuance Account” means the account by that name in the Project Fund created pursuant “Dated Date” means, with respect to the Series 2017 Bonds, the Closing Date, and, with respect to
to Section 5.01 hereof. any Series of Additional Bonds, the dated date thereof as provided in the Supplemental Indenture creating
“Costs of the Project” means those costs and expenses in connection with the acquisition, such Series of Additional Bonds.
rehabilitation, refinancing, furnishing, and equipping of the Project permitted by the Act to be paid or “Days’ Cash on Hand” means, as of the date of calculation, the amount determined by dividing (a)
reimbursed from Bond proceeds including, but not limited to, the following: the amount of Cash and Investments on such date by (b) the quotient obtained by dividing Operating
(a) payment of (i) the cost of the preparation of plans and specifications (including any Expenses as shown on the most recent annual Audited Financial Statements (or, with respect to any
preliminary study or planning of the Project, the renovations to the Project or any aspect thereof), (ii) the calculation of Days’ Cash on Hand as of any June 30, as reflected in the unaudited trailing twelve month
cost of acquisition, construction and rehabilitation of the Project and all acquisition, construction, financial statements for the period ending such June 30, as derived from the quarterly financial statements
rehabilitation and installation expenses required to provide utility services or other facilities and all real or delivered pursuant to Section 6.9(a) of the Loan Agreement, by 365.
personal properties deemed necessary in connection with the Project (including development, architectural, “Debt Service” means the principal and redemption price of and interest due on any Series of Bonds
engineering, and supervisory services with respect to any of the foregoing), (iii) interest on the Bonds during on any given Bond Payment Date.
the rehabilitation of the Project, and (iv) any other costs and expenses relating to the Project;
“Debt Service Coverage Ratio” means, for any period, the ratio obtained by dividing Net Income
(b) payment of the purchase price of the Project, improvements thereon, and the Equipment, Available for Debt Service for such period by the Annual Debt Service for such period, in each case, as
and any fixtures to be incorporated into the Project, including all costs incident thereto, payment for labor, calculated by the Borrower and certified to the Trustee in writing and supported by the Audited Financial
services, materials, and supplies used or furnished in site improvement and in the construction of the Statements described in Section 6.9 of the Loan Agreement or, in the case of reports delivered pursuant to
Project, including all costs incident thereto, payment for the cost of the construction, rehabilitation, Section 6.9(a)(i)(B) of the Loan Agreement, the unaudited financial statements for the applicable period in
acquisition, and installation of utility services or other facilities, payment for all real and personal property such report.
deemed necessary in connection with the Project, payment of consulting and development fees payable to

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B-22
 “Debt Service Requirements” means for a specified period: (a) amounts needed to pay scheduled but not limited to, crude oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other
payments of principal of the Bonds during such period, including payments for mandatory sinking fund waste, oil sludge, and all other liquid hydrocarbons, regardless of specific gravity), natural or synthetic gas,
redemption pursuant to Section 3.03 hereof; (b) amounts needed to pay interest on the Bonds payable during products and/or hazardous substance or material, toxic or dangerous waste, substance or material, pollutant
such period; and (c) to the extent not duplicative of (a) or (b) above, amounts due during such period to or contaminant, as may now or at any time hereafter be in effect.
restore the amounts on deposit in any Debt Service Reserve Fund to the applicable Debt Service Reserve
“Equipment” means the equipment, machinery, furnishings and other personal property located on
Fund Requirement.
the Mortgaged Property and all replacements, substitutions, and additions thereto.
“Debt Service Reserve Fund” means the Second Tier Bonds Debt Service Reserve Fund.
“Event of Default” means a Senior Bonds Event of Default or a Second Tier Bonds Event of
“Debt Service Reserve Fund Requirement” means the Second Tier Debt Service Reserve Fund Default, as set forth in Section 8.01 hereof.
Requirement.
“Excess Surplus Fund Amount” means the amount on deposit in the Surplus Fund on an Annual
“Default” under the Loan Agreement means any of the events described in Section 7.1 of the Loan Evaluation Date equal to the positive difference, if any, obtained by subtracting (x) the amount equal to 50
Agreement. Days’ Cash on Hand as of such Annual Evaluation Date, from (y) the amount of Cash and Investments on
such Annual Evaluation Date; provided that on the date of any transfer or disbursement of the Excess
“Deferred Management Fee” means the amount of the Management Fee that that is otherwise due
Surplus Fund Amount from the Surplus Fund, such amount shall not exceed the amount on deposit in the
on and after (i) any Testing Date on which either the Coverage Test or the Liquidity Requirement has not
Surplus Fund on the date of such transfer or disbursement.
been met, until the date a report is delivered pursuant to Section 6.9(a)(i)(B) of the Loan Agreement
showing that the Coverage Test and the Liquidity Requirement have been met, or (ii) the date an Event of “Extraordinary Expenses” means all reasonable expenses properly incurred by the Trustee under
Default hereunder or an event of default, as defined therein, under a Borrower Document has occurred and this Indenture, other than Ordinary Expenses.
is continuing; provided that such deferred fee shall be paid no later than the end of five years from the
“Extraordinary Services” means all services rendered by the Trustee under this Indenture, other
original due date of such deferred fee in accordance with Section 5.04 hereof.
than Ordinary Services.
“Designated Office” means, when referring to the Trustee or any Paying Agent, means the office
“Extraordinary Trustee’s Fees and Expenses” means the fees, expenses and disbursements payable
where the Trustee or Paying Agent, as applicable, maintains its designated corporate trust department,
to the Trustee and Paying Agent pursuant to Section 9.04 hereof during any Fiscal Year in excess of
which as of the date of this Indenture, shall be the address provided in Section 12.07.
Ordinary Trustee’s Fees and Expenses, including but not limited to, reasonable counsel fees and expenses,
“Dissemination Agent” means Digital Assurance Certification, L.L.C., or any successor thereto, reasonable fees of other third party professionals, and any costs of sending notices pursuant to the terms
acting as Dissemination Agent under the Continuing Disclosure Agreement. and conditions of the Bond Documents, including but not limited to, Section 3.06 hereof.
“Dissemination Agent Fee” means an annual fee payable to the Dissemination Agent so long as the “Favorable Opinion of Bond Counsel” means, with respect to any action the taking of which
Bonds remain Outstanding as compensation for its services and expenses in performing its obligations requires such an opinion, an opinion of Bond Counsel addressed to the Issuer and the Trustee to the effect
under the Continuing Disclosure Agreement. that such action, or omission of an action, will not, in and of itself, cause interest on the Tax-Exempt Bonds
to be includible in gross income for federal income tax purposes (subject to the inclusion of any exceptions
“Environmental Laws” means the Comprehensive Environmental Response, Compensation and
contained in the opinion delivered upon the original issuance of the Tax-Exempt Bonds or as agreed by the
Liability Act of 1980, as amended (“CERCLA”) (42 U.S.C. § 9601 et seq.), the Resource Conservation and
Issuer and the Trustee).
Recovery Act, as amended (“RCRA”) (42 U.S.C. § 6901 et seq.), the National Environmental Policy Act
of 1969, as amended (42 U.S.C. § 4321 et seq.), the Solid Waste Disposal Act, as amended (42 U.S.C. § “Feasibility Report” means a report prepared and signed by a Consultant setting forth for a forecast
6901 et seq.), the Hazardous Material Transportation Act, as amended (49 U.S.C. § 1801 et seq.), the period not exceeding five Fiscal Years from the later of the date of the issuance of the Long-Term
Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et seq.), the Toxic Indebtedness in question, or the completion of the additional facilities financed with such Long-Term
Substance Control Act, as amended (15 U.S.C. § 2601 et seq.), the Clean Water Act, as amended (33 U.S.C. Indebtedness: (i) forecasted financial statements prepared on the same basis as the Borrower’s Audited
§ 1251 et seq.), the Clean Air Act, as amended (42 U.S.C. § 7401 et seq.), the Federal Water Pollution Financial Statements; and (ii) a full explanation of the assumptions and rationale used in preparing such
Control Act, as amended (33 U.S.C. § 1251 et seq.), the Federal Coastal Zone Management Act, as amended forecasts, including that such forecasts have taken into account the projected utilization of the Borrower’s
(16 U.S.C. § 1451 et seq.), the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.), facilities, the rates and charges to patients and residents and such other data and information as may be
the Safe Drinking Water Act, as amended (42 U.S.C. § 300(f) et seq.), and any other federal, state, or local necessary to support the forecasted financial statements; which is required to be accompanied by an opinion
law, statute, ordinance, and regulation, now or hereafter in effect, and in each case as amended or of such Consultant that the underlying assumptions provide a reasonable basis for such forecast.
supplemented from time to time, and any applicable judicial or administrative interpretation thereof,
“Fiduciary” means the Trustee and any Paying Agent.
including, without limitation, any applicable judicial or administrative order, consent decree, or judgment
applicable to the Project relating to the regulation and protection of human health and safety and/or the “Fiscal Year” means a period of 12 consecutive months ending on each December 31, except that
environment and natural resources (including, without limitation, ambient air, surface water, groundwater, the first Fiscal Year shall begin on the Closing Date and end on December 31, 2018.
wetlands, land surface or subsurface strata, wildlife, aquatic species, and/or vegetation), including all “Fitch” means Fitch Ratings, Inc., a corporation organized and existing under the laws of the State
amendments to such Acts, and any and all regulations promulgated thereunder, and all analogous local or of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall
state counterparts or equivalents, and any transfer of ownership notification or approval statutes, and any no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other
federal, state or local statute, law, ordinance, code, rule, regulation, order or decree, regulating, relating to nationally recognized securities rating agency designated by the Borrower by notice to the Trustee.
or imposing liability or standards of conduct concerning any petroleum, petroleum byproduct (including
9 10

“Force Majeure” means (a) the following: acts of nature; strikes or other industrial disturbances; “Indenture” means this Trust Indenture, as in effect on the Closing Date and as it may thereafter be
acts of public enemies; orders or restraints of any kind of the government of the United States of America as amended or supplemented from time to time in accordance with Article XI hereof.
or of the State of Oklahoma or of any of their subdivisions, departments, agencies or officials, or of any
“Independent” means, with respect to Counsel or any Consultant or other person, a person who is
civil or military authority; insurrections; riots; landslides; earthquakes; fires; floods; explosions, but only
not a member of the Governing Body of the Issuer or the Borrower and is not an officer or employee of the
to the extent that any such cause or event is not within the control of the Borrower; and (b) any other cause
Issuer or the Borrower and that is not a partnership, corporation or association having a partner, director,
or event not reasonably within the control of the Borrower.
officer, member or substantial stockholder who is a member of the Governing Body of the Issuer or the
“Fund” or “Funds” means any one or more, as the case may be, of the separate trust funds created Borrower or who is an officer or employee of the Issuer or the Borrower; provided, however, that the fact
and established in Article V of this Indenture. that such person is retained regularly by or transacts business with the Issuer or the Borrower shall not make
such person an employee within the meaning of this definition.
“Governing Body” means (a), with respect to the Issuer, the Board of Directors of the Issuer, or
any governing body that succeeds to the functions of the Board of Directors of the Issuer, and (b) with “Insurance and Tax Escrow Fund” means the trust fund by that name established pursuant to
respect to the Borrower, the Board of Directors of the Borrower. Section 5.01 hereof.
“Government Obligations” means direct obligations of, and obligations the principal of and interest “Insurance Consultant” means a Consultant having the skill and expertise necessary to evaluate the
on which are unconditionally guaranteed as to timely payment by, the United States of America. insurance needs of multifamily rental housing and which may be a broker or agent with which the Borrower
or the Issuer transacts business.
“Hazardous Substances” means any petroleum or petroleum products and their by-products,
flammable explosives, radioactive materials, toxic chemicals and substances, radon, asbestos in any form “Insurance Proceeds” means the total proceeds of insurance paid by an insurance company under
that is or could become friable, urea formaldehyde foam insulation and polychlorinated biphenyls (PCBs), the policies of property or title insurance required to be procured by the Borrower pursuant to the Loan
asbestos-containing materials (ACMs), lead-containing or lead-based paint (LBP), radon, medical waste Agreement.
and other bio-hazardous materials and any chemicals, pollutants, materials or substances defined as or
“Interest Account” means each trust account by that name in the Bond Fund created with respect
included in the definition of “hazardous substances” as defined pursuant to the federal Comprehensive
to a Series of Bonds pursuant to Section 5.01 hereof.
Environmental Response, Compensation and Liability Act, “regulated substances” within the meaning of
subtitle I of the federal Resource Conservation and Recovery Act, and words of similar import under “Interest Payment Date” means, with respect to the Series 2017 Bonds, each January 1 and July 1,
applicable Environmental Laws. commencing July 1, 2018, and with respect to any Series of Additional Bonds, the dates specified in the
Supplemental Indenture creating such Series of Additional Bonds, until the final Principal Payment Date
“Impositions” has the meaning given such term in Section 4.9 of the Loan Agreement.
of the applicable Bonds.
“Indebtedness” means with respect to any Person (a) all indebtedness of such Person, whether or
“Interest Period” for any Bonds means initially the period from the Dated Date to but not including
not represented by bonds, debentures, notes or other securities, for the repayment of money borrowed, (b)
the first Interest Payment Date and thereafter the period from and including each Interest Payment Date to
all deferred indebtedness of such Person for the payment of the purchase price of properties or assets
but not including the next Interest Payment Date or other date on which interest is required to be paid on
purchased, (c) all guaranties, endorsements (other than endorsements in the ordinary course of business),
such Bonds.
assumptions, and other contingent obligations of such Person in respect of, or to purchase or to otherwise
acquire, indebtedness of others, (d) all indebtedness of such Person secured by a mortgage, or secured by a “Interest Requirement” for any Bonds means an amount equal to the interest that would be due and
pledge, security interest, or lien existing on property owned which is subject to a mortgage, pledge, security payable on such Bonds on the Interest Payment Date next succeeding the date of determination (assuming
interest, or lien, whether or not the indebtedness secured thereby has been assumed, (e) all capitalized lease that no principal of such Bonds is paid or redeemed between such date and the next succeeding Interest
obligations, (f) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for Payment Date) multiplied by a fraction the numerator of which is one and the denominator of which is the
which such Person would be liable, if such amounts were advanced under the credit facility, (g) all amounts number of whole calendar months in the Interest Period in which such date occurs. For purposes of
required to be paid by such Person as a guaranteed payment to partners or members or a preferred or special determining the Interest Requirement for any Bonds during a period where the interest rate borne by such
dividend, including any mandatory redemption of shares or interests, (h) all unfunded pension funds, or Bonds has not yet been determined, an interest rate equal to the maximum rate allowable on such Bonds
welfare or pension benefit plans or liabilities of such Person, and (i) all obligations (calculated on a net shall be assumed for such period.
basis) of such Person under derivatives in the form of interest rate swaps, credit default swaps, total rate of “Investment Securities” means any of the following that at the time are legal investments (provided
return swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is that the Trustee shall be entitled to rely upon any investment directions from the Borrower or its designated
liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations of investment advisor as conclusive certification to the Trustee that the investments described therein are so
such Person otherwise assures a creditor against loss; provided, however, that for the purpose of computing authorized):
Indebtedness, there will be excluded any particular Indebtedness if, upon or prior to the maturity thereof,
there has been deposited with the proper depository in trust the necessary funds (or Government Obligations (1) Obligations of, and obligations fully and unconditionally guaranteed as to timely payment
not callable or pre-payable by the issuer thereof) for the payment, redemption, or satisfaction of such by, the United States government or any agency, instrumentality or establishment of the United States
Indebtedness, and thereafter such funds and such Government Obligations so deposited will not be included government;
in any computation of the assets of such Person and the income derived from such funds and such direct (2) Certificates of deposit or time deposits constituting direct obligations of any bank or any
obligations of the United States of America so deposited will not be included in any computation of the savings and loan association which obligations are fully insured as to principal by the Federal Deposit
income of such Person.

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B-23
Insurance Corporation (“FDIC”), or, if not so insured, which obligations are fully collateralized with United “Issuer’s Fees and Expenses” means those reasonable fees and expenses, if any, payable to or
States government and/or agency obligations as detailed in item (1) of this definition; incurred by the Issuer in connection with its administration and enforcement of or compliance with the
Indenture or any of the Borrower Documents, or otherwise in connection with the Project and the Bonds,
(3) Investments in money market funds registered under the Investment Company Act of 1940,
including, without limitation, any and all fees and expenses incurred in connection with the authorization,
whose shares are registered under the Securities Act of 1933, and having a rating at the time of purchase
issuance, sale and delivery of the Series 2017 Bonds and the administration of the Series 2017 Bonds. The
by S&P of “AAAm-G,” “AAAm” or better (including funds for which the Trustee, its parent holding
Borrower agrees to pay a semiannual administrative fee to the Issuer (for each semiannual period beginning
company, if any, or any affiliates or subsidiaries of the Trustee provide investment advisory or other
January 1 to be invoiced on June 30 and beginning July 1 to be invoiced December 31 of each year while
management services);
the Series 2017 Bonds remain Outstanding), equal to the sum of (i) 5 basis points (0.05%) multiplied against
(4) Pre-refunded municipal obligations defined as follows: any bonds or other obligations of the first $20,000,000 in principal amount of the Series 2017 Bonds Outstanding as of the first day of each
any state of the United States of America or of any agency, instrumentality or local governmental unit of such semiannual period, and (ii) 0.625 basis points (0.00625%) multiplied against the principal amount of
any such state that are not callable at the option of the obligor prior to maturity or as to which irrevocable the Series 2017 Bonds in excess of $20,000,000 Outstanding as of the first day of each such semiannual
instructions have been given by the obligor to call on the date specified in the notice and which obligations period; provided, that the aggregate of all such amounts paid to the Issuer shall not equal or exceed an
are fully secured as to both sufficiency and timely payment by, and payable solely from United States amount that would cause the "yield" on the Series 2017 Notes, the Loan Agreement or any other "acquired
government and/or agency obligations as detailed in item (1) of this definition; purpose obligation" to be "materially higher" than the "yield" on the Series 2017 Bonds, as such terms are
(5) Investment agreements, including GICs, forward purchase agreements and reserve fund used in the Code. Such fees and expenses shall be paid directly to the Issuer for its own account as and
put agreements from financial entities rated at the time of purchase “A2” or higher by Moody’s or “A” or when such fees and expenses become due and payable.
higher by S&P; “Liquidity Requirement” has the meaning given such term in Section 4.14 of the Loan Agreement.
(6) Commercial paper that is rated at the time of purchase “P-1” by Moody’s or “A-1” or “A- “Loan” means the loan evidenced by the Series 2017 Notes from the Borrower to the Trustee
1+” by S&P and maturing not more than 270 calendar days after the date of purchase; financed by the Issuer, and each additional loan financed by the Issuer and evidenced by additional Notes
(7) Municipal general obligation bonds rated “Aa3” or higher by Moody’s or rated “AA-” or from the Borrower to the Trustee in respect of Additional Bonds.
higher by S&P or general obligation bonds of states rated “A3” or higher by Moody’s or rated “A-” or “Loan Agreement” means the Loan Agreement of even date herewith among the Issuer, the Trustee
higher by S&P; and the Borrower, as in effect on the Closing Date and as it may thereafter be amended and supplemented
(8) U.S. dollar denominated deposit accounts, federal funds or bankers acceptances with from time to time in accordance with its terms.
domestic commercial banks that may include the Trustee and its affiliates that have a rating on their short “Loan Payments” means those payments described in Section 3.2(b)(i) of the Loan Agreement.
term certificates of deposit on the date of purchase of “P-1” by Moody’s or “A-1” or “A-1+” by S&P (for
“Long-Term Indebtedness” means any Indebtedness other than Short-Term Indebtedness.
purposes of rating, ratings on holding companies are not considered as the rating of the bank) and maturing
not more than 360 calendar days after the date of purchase; and “Low Income Tenant” means a tenant whose Adjusted Income (after payment of rent) is 50% or
less of median gross income, as determined under section 142(d)(2)(B) of the Code, for the area in which
(9) Insurance and corporate debentures that at the time of purchase are rated in one of the three
the Project is located.
highest rating classifications by Moody’s or S&P (without regard to modifiers such as “+”, “-,” “l”, “2”,
“3”, “(positive)”, “(negative)” or “(stable)”). “Mail” means either (a) first class mail by the United States Postal Service, postage prepaid, to the
Owners at their respective addresses that appear on the registration books of the Paying Agent on the date
“Issuance Costs” means costs to the extent incurred in connection with, and allocable to, the
of mailing, or (b) actual delivery to the Owners or their representatives evidenced by a receipt signed by
issuance of the Bonds within the meaning of section 147(g) of the Code. For example, Issuance Costs
such Owners or their representatives.
include the following costs, but only to the extent incurred in connection with, and allocable to, the
borrowing: underwriters’ spread; counsel fees; financial advisory fees; fees paid to an organization to “Management Agreement” means (i) collectively, the Management Agreements with respect to
evaluate the credit quality of an issue; trustee fees; paying agent fees; bond registrar, certification and each of the two facilities comprising the Project, each dated as of December 20, 2017, and each between
authentication fees; accounting fees; printing costs for bonds and offering documents; public approval the Manager and the Borrower, or (ii) any substitute agreement providing for the management, maintenance
process costs; engineering and feasibility study costs; guarantee fees, other than qualified guarantees; and and operation of the Project, in each case as it may be amended and supplemented from time to time.
similar costs.
“Management Consultant” means a Consultant possessing significant management consulting
“Issuer” means The Oklahoma Development Finance Authority, a public trust of the State of experience in matters pertaining to owning and operating senior housing facilities similar to the Project.
Oklahoma, and any successor body to the duties or functions of the Issuer.
“Management Fee” means the fee paid to the Manager pursuant to the Management Agreement,
“Issuer Representative” shall mean the Chairman, President, Vice Chairman, Secretary or any other than any amounts deferred in accordance with the definition of Deferred Management Fee.
Assistant Secretary of the Issuer, or such other person at the time designated to act on behalf of the Issuer
“Manager” means TLG Family Management, LLC, a Texas corporation, or any subsequent third-
as evidenced by a written certificate furnished to the Trustee and the Borrower containing the specimen
party management company with experience in managing similar properties and their successors and
signature of such person and signed on behalf of the Issuer by an Issuer Representative. Such certificate
assigns meeting the requirements of Section 4.7 of the Loan Agreement and any subcontractor as manager
may designate an alternate or alternates, each of whom shall be entitled to perform all duties of the Issuer
of the Project.
Representative.

13 14

“Material Adverse Effect” means (a) a material adverse change in the financial condition of the “Operating Account” means, the demand deposit bank account maintained by the Borrower
Borrower or the Project; or (b) any event or occurrence of whatever nature that would materially and pursuant to Section 4.3 of the Loan Agreement on which the Borrower or its authorized agent writes checks
adversely change (i) the Borrower’s ability to perform its obligations under the Loan Agreement or any to pay Operating Expenses.
other Borrower Documents; or (ii) the Trustee’s security interests in the security pledged hereunder.
“Operating Expenses” means, for any period, cash expenses paid or accrued in connection with the
“Maximum Annual Debt Service” means as of any date of calculation the highest Annual Debt operation, maintenance and current repair of the Project (determined on a cash basis) during such period
Service with respect to all Outstanding Bonds of the applicable Series for any succeeding Fiscal Year, but including, without limitation, the costs of any utilities necessary to operate the Project, advertising and
excluding the Fiscal Year or portion thereof ending on the final Principal Payment Date of such Series of promotion costs, payroll expenses, insurance premiums, administrative and legal expenses of the Borrower
Bonds. relating to the Project, labor, executive compensation, the cost of materials and supplies used for current
operations of the Project, taxes and charges for accumulation of appropriate reserves for current expenses
“Modifications” means modifications, repairs, renewals, improvements, replacements, alterations,
not annually recurrent but which are such as may reasonably be expected to be incurred in connection with
additions, enlargements, or expansions in, on, or to the Project (other than routine repair or maintenance),
the Project and in accordance with sound accounting practice. “Operating Expenses” includes (a) Interest
but excluding any Equipment therefor.
Requirements and (b) the actual Management Fee (and any Deferred Management Fee paid from the
“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws Revenue Fund or the Surplus Fund). “Operating Expenses” does not include (a) Principal Requirements,
of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or (b) any loss or expense resulting from or related to any extraordinary and nonrecurring items, (c) any losses
liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed or expenses related to the sale of assets, the proceeds of which sale are not included in Project Revenues
to refer to any other nationally recognized securities rating agency designated by the Borrower by notice to pursuant to clause (b) of the definition thereof, (d) expenses paid from operational reserves, including the
the Trustee. Operations and Maintenance Reserve Fund, (e) expenses paid from the Repair and Replacement Fund, (f)
“Mortgages” means collectively, the two Mortgage with Power of Sale and Security Agreements any Rebate Amount to the extent that it is paid from the Rebate Fund, (g) deposits in the Repair and
relating to each of the two facilities comprising the Project, each dated as of even date herewith, each by Replacement Fund, (h) any allowance for depreciation or replacements of capital assets of the Project or
the Borrower to the trustee named therein, for the benefit of the Trustee, securing the repayment of the Loan amortization of financing costs, or (i) disbursements from the Surplus Fund. In addition, for purposes of
and the Series 2017 Notes and certain additional amounts due and owing under the Loan Agreement, as in calculating Net Income Available for Debt Service, “Operating Expenses” does not include deposits to the
effect on the Closing Date and as they may thereafter be amended and supplemented from time to time in Insurance and Tax Escrow Fund from the Revenue Fund or payments from the Insurance and Tax Escrow
accordance with their terms. Fund, deposits to the Repair and Replacement Fund from the Revenue Fund or Surplus Fund, deposits to
the Rebate Fund from the Revenue Fund, any Rebate Amount to the extent that it is not paid from the
“Mortgaged Property” means the real property on which the Project is located and all improvements Rebate Fund, deposits to the Administration Fund from the Revenue Fund, the Administration Expenses,
thereon that is subject to the lien of the Mortgages, as more specifically described in Exhibit A to each of and expenses funded with proceeds of the Bonds.
the Mortgages.
“Operating Fund” means the trust fund by that name created pursuant to Section 5.01 hereof.
“Needs Assessment Analysis” means the analysis and report required as set forth in Section 4.12
of the Loan Agreement. “Operations and Maintenance Reserve Fund” means the trust fund by that name created pursuant
to Section 5.01 hereof.
“Net Income Available for Debt Service” means, for any period of determination thereof, Project
Revenues for such period, plus all interest earnings on money held in Funds and Accounts that are “Operations and Maintenance Reserve Requirement” means an amount equal to one month’s
transferred to the Revenue Fund pursuant to Article VI hereof, minus (a) total Operating Expenses budgeted Operating Expenses for the Project for the current Fiscal Year.
(exclusive of any Interest Requirements for such period) incurred on a basis consistent with generally “Ordinary Expenses” means those reasonable expenses incurred in the ordinary course of business,
accepted accounting principles by the Borrower for such period, (b) any profits or losses that would be by a trustee, a registrar, an authenticating agent and a paying agent under instruments similar to this
regarded as extraordinary items under generally accepted accounting principles, (c) gain or loss on the Indenture, but excluding Extraordinary Expenses.
extinguishment of Indebtedness, (d) gifts, grants, bequests, donations, or contributions, to the extent
“Ordinary Services” means those services normally rendered by a trustee, a registrar, an
specifically restricted by the donor to a particular purpose inconsistent with their use for the payment of
authenticating agent and a paying agent under instruments similar to this Indenture, excluding
principal of (and premium, if any) and interest and other debt service charges on Indebtedness, (e) proceeds
Extraordinary Services.
of Additional Bonds and any other Permitted Indebtedness, (f) Net Proceeds of any Insurance Proceeds or
Condemnation Awards, and (g) the proceeds of any sale, transfer or other disposition of all or any portion “Ordinary Trustee’s Fees and Expenses” means those annual fees, expenses and disbursements for
of the Project by the Borrower. the Ordinary Services and the Ordinary Expenses of the Trustee and Paying Agent incurred in connection
with their duties under this Indenture payable in advance on the Closing Date in an amount not to exceed
“Net Proceeds,” when used with respect to (a) any Insurance Proceeds, Condemnation Award or
$5,000 per annum and payable on June 1 of each year thereafter until the Bonds are no longer Outstanding.
Sales Proceeds, means the gross proceeds from such Insurance Proceeds, Condemnation Award or sale of
any portion of the Project, less all expenses (including reasonable attorneys’ fees of the Borrower or the “Organizational Documents” means the documents under which the Borrower is organized and
Trustee and any Extraordinary Trustee’s Fees and Expenses) incurred in the realization thereof; and (b) the governed as such documents are in effect on the Closing Date and as they may be thereafter amended or
Bonds, has the same meaning as “net sale proceeds” under Treasury Regulation 1.148-1(b). supplemented from time to time in accordance with their terms.
“Notes” means the Series 2017 Notes and any promissory note issued by the Borrower in “Outstanding” or “outstanding” with respect to any Bonds of a Series means, as of any given date,
connection with Additional Bonds. all Bonds of such Series that have been authenticated and delivered by the Trustee under this Indenture,
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except: (a) Bonds of such Series cancelled at or prior to such date or delivered to or acquired by the Trustee of which is the number of whole calendar months in the period commencing on the last date of payment of
or Paying Agent on or prior to such date for cancellation; (b) Bonds of such Series deemed to be paid in regularly scheduled principal (or July 1, 2018, if no principal has been paid) and ending on the next Bond
accordance with Article VII of this Indenture; and (c) Bonds of such Series in lieu of which other Bonds of Payment Date for payment of regularly scheduled principal.
such Series have been authenticated under Section 2.08 or 2.09 hereof.
“Project” means the Mortgaged Property, together with the improvements constructed thereon,
“Owner” or “Owners” means the Person or Persons in whose name any Bond is registered on the consisting of two memory care facilities located in Cleveland County and Oklahoma County in the State of
registration records for the Bonds maintained by the Trustee as registrar. Oklahoma, including all buildings, structures and improvements now or hereafter constructed thereon, and
all fixtures, machinery, equipment, furniture, furnishings and other personal property hereafter attached to,
“Paying Agent” means the Trustee or any successor or additional Paying Agent appointed
located in, or used in connection with any such structures, buildings or improvements, and all additions,
hereunder that satisfies the requirements of Section 9.18 hereof.
substitutions and replacements thereto, whether now owned or hereafter acquired. The term “Project” does
“Permitted Encumbrances” means, with respect to the Project, (a) the Mortgages, (b) the lien of not include property owned by Persons other than the Borrower, including the Manager or residents of the
current real property taxes (if any), ground rents, water charges, sewer rents and assessments not yet due Project.
and payable, (c) covenants, conditions and restrictions, rights of way, easements and other matters of public
“Project Account” means the trust account by that name within the Project Fund.
record, none of which, individually or in the aggregate, materially interferes with the current use of the
Project or the security intended to be provided by the Mortgages or with the Borrower’s ability to pay its “Project Fund” means the trust fund by that name created pursuant to Section 5.01 hereof.
obligations when they become due or materially and adversely affects the value of the Project, (d) the
“Project Revenues” means for any period, all cash operating and non-operating revenues of the
exceptions (general and specific) set forth in the Title Policies or appearing of record, none of which,
Project, including Unrestricted Contributions, less (a) any extraordinary and nonrecurring items (including
individually or in the aggregate, materially interferes with the intended use of the Project or the security
any real property tax refunds), (b) income derived from the sale of assets not in the ordinary course of
intended to be provided by the Mortgages or with the Borrower’s ability to pay its obligations when they
business that is permitted under the Bond Documents, (c) security, cleaning or similar deposits of tenants
become due or materially and adversely affects the value of the Project, (e) any lien of any contractor,
until applied or forfeited, (d) Net Proceeds of Insurance Proceeds or Condemnation Awards and (e) any
subcontractor, supplier of goods, materials, equipment or services, or laborer or any other similar lien
amount disbursed to the Borrower from the Surplus Fund, but including as Project Revenues (i) any such
arising in the ordinary course of business, in respect of any claim that is being contested by the Borrower
Net Proceeds resulting from business interruption insurance or other insurance or condemnation proceeds
in good faith by appropriate proceedings conducted with due diligence with the execution thereon stayed,
retained by the Borrower and (ii) amounts received by the Borrower or the Trustee pursuant to any payment
(f) any liens or encumbrances expressly permitted by the Loan Agreement or the Mortgages, (g) any lien
guaranty, operating guaranty or similar agreement with respect to the Project.
placed upon any furniture, equipment, vehicle or other tangible personal property or any fixture being
acquired by the Borrower, to secure all or a portion of the purchase price thereof or any rent payable with “Property Tax Account” means the trust account by that name within the Insurance and Tax Escrow
respect thereto, (h) any attachment or judgment lien being contested by the Borrower in good faith by Fund created pursuant to Section 5.01 hereof.
appropriate proceedings diligently pursued, if such lien shall have been duly stayed, and (i) statutory liens “Purchase Notice Date” means, with respect to any purchase of Bonds pursuant to Section 3.04, (a)
and rights of setoff granted to banks or other financial institutions with respect to funds on deposit in the if the Bonds are not in book-entry form with a Clearing Agency, the fifth Business Day prior to the
ordinary course of business. applicable scheduled redemption date for the Bonds, and (b) if the Bonds are in book-entry form with a
“Permitted Indebtedness” means (a) payments and other liabilities payable under the Loan Clearing Agency, the earlier of (i) that number of Business Days prior to the applicable scheduled
Agreement or the Notes, (b) liabilities of the Borrower under the Mortgages, and (c) Indebtedness of the redemption date for the Bonds that is required by the Clearing Agency to comply with the rules and
Borrower allowed pursuant to Section 6.13 of the Loan Agreement. regulations of the Clearing Agency, and (ii) the fifth Business Day prior to the applicable scheduled
redemption date for the Bonds.
“Person” or “person” means an individual, a corporation, a limited liability company, a partnership,
an association, a joint stock company, a trust, any unincorporated organization, a governmental body, any “Qualified Insurer” has the meaning provided in Section 5.2 of the Loan Agreement.
other political subdivision, municipality or authority or any other group or entity. “Rating Agency” means S&P, Moody’s or Fitch, or any other nationally recognized rating agency
“Potential Default” means any event that with the passage of time or the giving of notice, or both, if such agency currently has a rating in effect with respect to any Series of the Bonds. The initial Rating
would constitute an Event of Default under this Indenture or a Default under the Loan Agreement. Agency shall be S&P.
“Principal Account” means the trust account by that name within the Bond Fund created with “Rating Agency Fee” means any fee required to be paid to a Rating Agency to maintain a rating on
respect to a Series of Bonds pursuant to Section 5.01 hereof. the Bonds.
“Principal Amount” means the then Outstanding principal amount of the Bonds or a Series of “Rebate Analyst” means a Certified Public Accountant, financial analyst or Bond Counsel, or any
Bonds, as applicable. firm of the foregoing, or a financial institution (which may include the Trustee) experienced in making the
arbitrage and rebate calculations required pursuant to section 148 of the Code and retained by the Borrower
“Principal Payment Date” means the maturity date of any Series of Bonds and any date for
to make the computations and give the directions required pursuant to this Indenture and the Loan
mandatory sinking fund redemption of any Series of Bonds pursuant to Section 3.03 hereof.
Agreement.
“Principal Requirement” for the Bonds or any Series of Bonds means an amount equal to the
“Rebate Analyst Fee” means a fee paid for each rebate calculation (which are to be made every
regularly scheduled principal that is due and payable on such Bonds on the Bond Payment Date next
fifth year, if required).
succeeding the date of determination, whether by maturity or by mandatory sinking fund redemption
pursuant to Section 3.03 hereof, multiplied by a fraction the numerator of which is one and the denominator “Rebate Fund” means the trust fund by that name created pursuant to Section 5.01 hereof.
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“Record Date” means, with respect to the Series 2017 Bonds, the fifteenth day (whether or not a “S&P” means S&P Global Ratings, a division of S&P Global Inc., a corporation organized and
Business Day) of the calendar month preceding any applicable Interest Payment Date, and with respect to existing under the laws of the State of New York, its successors and their assigns, and, if such organization
any Series of Additional Bonds, the date specified in the Supplemental Indenture creating such Series of shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P”
Additional Bonds. shall be deemed to refer to any other nationally recognized securities rating agency designated by the
Borrower by notice to the Trustee.
“Regulations” means the applicable proposed, temporary or final Treasury Regulations
promulgated under the Code or, to the extent applicable to the Code, under the Internal Revenue Code of “Sale Proceeds” means the proceeds from the sale of one or more of the facilities that are part of
1954, as amended from time to time. the Project in accordance with Section 5.9 of the Loan Agreement.
“Repair and Replacement Fund” means the trust fund by that name established pursuant to “Second Tier Bonds” means the Series 2017B Bonds and all Additional Bonds issued by the Issuer
Section 5.01 hereof. on a parity with the Series 2017B Bonds.
“Replacement Reserve Amount” means an amount equal to $23,650 per year, as increased or “Second Tier Bonds Bond Fund” means the Second Tier Bonds Bond Fund created and established
decreased pursuant to any Needs Assessment Analysis required by Section 4.12 of the Loan Agreement. by Section 5.01.
“Reserved Rights” shall mean (a) all of the Issuer’s right, title and interest in its reimbursement and “Second Tier Bonds Debt Service Reserve Fund” means the Second Tier Bonds Debt Service
indemnification pursuant to the Bond Documents and all enforcement remedies with respect to the Reserve Fund created and established in Section 5.01.
foregoing, all of which shall survive any transfer or payment of the Bonds in full or in part and that shall
“Second Tier Bonds Debt Service Reserve Fund Requirement” means, as of any date of
also survive the termination of the Loan Agreement and this Indenture, (b) all the rights to receive the
determination, an amount equal to the least of (a) one-half of Maximum Annual Debt Service with respect
Issuer’s Fees and Expenses, (c) the right to receive notices and to make any determination and to grant any
to the Second Tier Bonds, (b) 10% of the initial principal amount of the Second Tier Bonds, (c) 125% of
approval or consent to anything in this Indenture, the Loan Agreement, the Notes and the Bonds requiring
the average annual debt service on the Second Tier Bonds in each remaining Bond Year, or (d) $371,047.44.
the determination, consent or approval of the Issuer, (d) all rights of the Issuer to enforce the representations,
As of the Closing Date, the Second Tier Bonds Debt Service Reserve Fund Requirement is $371,047.44.
warranties, covenants and agreements of the Borrower set forth in the Loan Agreement and the Borrower’s
Tax Certificate, (e) any and all limitations of liability of the Issuer set forth in the Bond Documents and “Second Tier Bonds Event of Default” has the meaning set forth in Section 8.01(b).
related rights and remedies regarding (1) the negotiability, registration and transfer of the Bonds, (2) the “Second Tier Bonds Trust Estate” means all amounts in the Second Tier Bonds Bond Fund and the
loss or destruction of the Bonds, (3) the limited liability of the Issuer as provided in the Act and in this Second Tier Bonds Debt Service Reserve Fund established pursuant to this Indenture for the benefit of the
Indenture and the Bond Documents, (4) the maintenance of insurance by the Borrower, (5) no liability of Second Tier Bonds, together with all Residual Revenues, Residual Net Proceeds, the Second Tier Note and
the Issuer to third parties, and (6) no warranties of suitability or merchantability by the Issuer, and (f) all all rights, interests, collections, and other property pledged to the payment of any Second Tier Bond
rights of the Issuer in connection with any amendment to or modification of this Indenture, the Loan pursuant to the granting clauses hereof and, subordinate to the Senior Bonds, the Loan Agreement,
Agreement, the Notes and the Bonds. including Loan Payments, expressly excluding, however, the Reserved Rights.
“Residual Net Proceeds” means (a) so long as the Senior Bonds shall remain Outstanding, such Net “Second Tier Note” means the promissory note designated as the Senior Living Promissory Note
Proceeds as are available after redeeming all the then Outstanding Senior Bonds; and (b) on and after the Series 2017B executed by the Borrower in accordance with the Loan Agreement.
date on which the Senior Bonds are no longer Outstanding, all such Net Proceeds that would have been
available for the redemption of Senior Bonds. “Second Tier Owners” means the Owners of the Second Tier Bonds.
“Residual Revenues” means (a) so long as the Senior Bonds shall remain Outstanding, such Project “Senior Bonds” means the Series 2017A Bonds and all Additional Bonds issued by the Issuer on a
Revenues that remain after the required deposit has been made to the Senior Bonds Bond Fund as set forth parity with the Series 2017A Bonds.
in Section 5.04 herein; and (b) on and after the date the Senior Bonds are no longer Outstanding, all such “Senior Bonds Bond Fund” means the Senior Bonds Bond Fund created and established by Section
Project Revenues that would have been available for the payment of principal of and interest on the Senior 5.01.
Bonds.
“Senior Bonds Event of Default” has the meaning set forth in Section 8.01(a).
“Responsible Officer,” when used with respect to the Trustee, means any corporate trust officer or
assistant corporate trust officer or any other officer of the Trustee within its corporate trust department “Senior Bonds Trust Estate” means all amounts in the Senior Bonds Bond Fund established
customarily performing functions similar to those performed by any of the above designated officers, and pursuant to this Indenture for the benefit of the Senior Bonds, together with all Project Revenues, Net
also means, with respect to a particular corporate trust matter, any other officer to whom such matter is Proceeds, the Senior Notes and the Loan Agreement (other than the Reserved Rights), and any rights,
referred because of such person’s knowledge of and familiarity with the particular subject. interests, collections, and other property pledged to the payment of any Senior Bonds pursuant to the
granting clauses hereof.
“Restoration” means the restoration, replacement, repair or rebuilding of the Project as a result of
an event for which Condemnation Awards or Insurance Proceeds are received with respect to the Project, “Senior Notes” means the promissory notes designated as the Senior Living Promissory Note Series
as provided in Section 5.3 of the Loan Agreement. 2017A-1 and the Senior Living Promissory Note Series 2017A-2 executed by the Borrower in accordance
with the Loan Agreement.
“Restoration Plans” has the meaning provided in Section 5.3 of the Loan Agreement.
“Senior Owners” means the Owners of the Senior Bonds.
“Revenue Fund” means the trust fund by that name created pursuant to Section 5.01 hereof.
“Series” means any series of Bonds issued pursuant to this Indenture.
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 “Series 2017 Bonds” means the Series 2017A Bonds and the Series 2017B Bonds. “Unrestricted Contributions” means contributions that are not restricted in any way that would
prevent their application to the payment of debt service on Indebtedness of the Borrower.
“Series 2017 Notes” means the Senior Notes and the Second Tier Note.
Section 1.02. Rules of Construction. In this Indenture, unless the context otherwise requires:
“Series 2017A Bonds” means the Series 2017A-1 Bonds and the Series 2017A-2 Bonds.
(a) The singular form of any word used herein, including the terms defined in Section 1.01,
“Series 2017A-1 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun
Living, Inc. – Autumn Leaves Project) Series 2017A-1.
of any gender shall include correlative words of the other genders.
“Series 2017A-2 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
(b) All references herein to “Articles,” “Sections” and other subdivisions hereof are to the
Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-2.
corresponding Articles, Sections or subdivisions of this Indenture as originally executed; and the words
“Series 2017B Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not
Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B. to any particular Article, Section or subdivision hereof.
“Servicer” means any mortgage banking company or financial institution engaged pursuant to (c) The table of contents and the headings or titles of the several Articles and Sections hereof,
Section 6.2 of the Loan Agreement to service the Loan. and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall
“Short-Term Indebtedness” means any Indebtedness maturing not more than 365 days after it is not affect the meaning, construction or effect, of this Indenture.
incurred or which is payable on demand, except for any such Indebtedness that is renewable or extendable (d) The parties acknowledge that the Issuer, the Trustee, the Borrower, and their respective
at the sole option of the debtor to a date more than 365 days after it is incurred, or any such Indebtedness counsel have participated in the drafting of this Indenture and the other Bond Documents. Accordingly, the
which, although payable within 365 days, constitutes payments required to be made on account of parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting
Indebtedness expressed to mature more than 365 days after it was incurred. party shall not apply in the interpretation of this Indenture or any of the other Bond Documents or any
“Special Redemption Account” means each trust account by that name within the Bond Fund amendment or supplement or exhibit hereto or thereto.
created with respect to a Series of Bonds pursuant to Section 5.01 hereof. References to the Tax-Exempt Bonds as “tax-exempt” or to the “tax-exempt status” of the Tax-
“State” means the State of Oklahoma. Exempt Bonds, refer to the exclusion of interest on the Tax-Exempt Bonds from gross income for federal
income tax purposes pursuant to section 103(a) of the Code, irrespective of such forms of taxation as
“Supplemental Indenture” means any Amendment to this Indenture entered into in accordance with alternative minimum tax, environmental tax, or branch profits tax on foreign corporations, as is consistent
Article XI hereof. with the approach taken in section 59(i) of the Code.
“Surplus Cash” means the amount remaining on deposit in the Surplus Fund after the transfers Section 1.03. Content of Certificates and Opinions. Every certificate or opinion with respect to
made from the Surplus Fund pursuant to Section 5.19(a) hereof. compliance with a condition or covenant provided for in this Indenture or the Loan Agreement shall include
“Surplus Fund” means the trust fund by that name created pursuant to Section 5.01 hereof. (a) a statement that the person or persons making or giving such certificate or opinion have read such
covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and
“Tax-Exempt Bonds” means the Series 2017A-1 Bonds and the Series 2017B Bonds and any scope of the examination or investigation upon which the statements or opinions contained in such
Additional Bonds that, as originally issued, are the subject of an opinion of Bond Counsel to the effect that certificate or opinion are based; (c) a statement that, in the opinion of the signers, they have made or caused
the interest thereon is excluded from gross income for federal income tax purposes. to be made such examination or investigation as is necessary to enable them to express an informed opinion
“Test Period” means any period of not more than twelve months ending on the last day of the most as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether,
recent month preceding the month in which the Debt Service Coverage Ratio is tested and beginning on the in the opinion of the signers, such condition or covenant has been complied with.
last to occur of (a) the first day of the eleventh month preceding such most recent month or (b) the Closing Any such certificate or opinion made or given by an officer of the Issuer may be based, insofar as
Date. it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer
“Testing Date” means each June 30 and December 31, commencing June 30, 2018. knows that the certificate or opinion or representations with respect to the matters upon which his or her
certificate or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should
“Title Policies” means, collectively, the two title insurance policies, each in the form of an ALTA have known that the same were erroneous. Any such certificate or opinion made or given by counsel may
mortgagee’s title policy, issued by a title insurance company acceptable to the Underwriter and counsel to be based, insofar as it relates to factual matters (with respect to which information is in the possession of
the Trustee in the aggregate face amount of at least the principal amount of Series 2017 Bonds insuring that the Issuer), upon the certificate or opinion of or representations by an officer of the Issuer, unless such
the Trustee has a first priority valid lien in the Mortgaged Property subject only to Permitted Encumbrances. counsel knows that the certificate or opinion or representations with respect to the matters upon which his
“Trust Estate” means, collectively, the Senior Bonds Trust Estate and the Second Tier Bonds Trust or her opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should have
Estate. known that the same were erroneous.

“Trustee” means UMB Bank, N.A., Dallas, Texas, or any successors or assigns hereunder.
“Underwriter” means Piper Jaffray & Co.

21 22

ARTICLE II. The total combined aggregate principal amount of Series 2017 Bonds that may be issued and
Outstanding hereunder is expressly limited to $30,275,000, except as provided in Section 2.08 hereof. The
THE SERIES 2017 BONDS Series 2017 Bonds are designated The Oklahoma Development Finance Authority Senior Living Revenue
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017A-1, Taxable Series 2017A-
Section 2.01. Authority for and Issuance of Series 2017 Bonds, Interest on the Series 2017
2 and Second Tier Series 2017B. No Bonds may be issued under the provisions of this Indenture except
Bonds. There is hereby authorized under this Indenture two Series of Series 2017 Bonds (with two
in accordance with this Article.
subseries of the Series 2017A Bonds) that shall mature (such maturity not to exceed forty years from the
Closing Date) in the respective principal amounts and bear interest from the Dated Date, payable on each The Bonds shall be special obligations of the Issuer payable solely from the Trust Estate as provided
Interest Payment Date, at the respective rates per annum as set forth in the following tables: herein.
Series 2017A-1 Bonds The Bonds shall be issuable only as fully registered Bonds without coupons, in Authorized
Denominations. The Series 2017 Bonds shall be lettered “A-1, A-2 or B,” as appropriate, and shall be
Maturity Date
numbered separately from R-l consecutively upwards, bearing numbers not then contemporaneously
(July 1,) Amount ($) Interest Rate (%)
outstanding (in order of issuance).
2028 960,000 3.500
The Series 2017 Bonds shall be dated the Dated Date. The Bonds shall bear interest from the
**** ****** **** Interest Payment Date preceding the date of authentication thereof, unless the date of such authentication
2038 2,995,000 4.000 shall be after a Record Date, in which case they shall bear interest from the next succeeding Interest
Payment Date succeeding the Record Date; provided that if, as shown by the records of the Paying Agent,
**** ****** **** interest on the Bonds shall be in default, Bonds shall bear interest from the date to which interest has been
2053 10,685,000 4.000 paid in full on the Bonds, or if no interest has been paid on the Bonds, from their Dated Date. Bonds
authenticated on or before the first Record Date following the Closing Date shall bear interest from the
Dated Date.
Except in the case of payments made pursuant to Section 3.03 hereof for mandatory sinking fund
Taxable Series 2017A-2 Bonds redemptions, the principal of and premium, if any, on the Bonds shall be payable, when due, in lawful
money of the United States of America at the Designated Office of the Trustee upon presentation and
Maturity Date surrender of the Bonds. Payment of interest on the Bonds shall be made on each Interest Payment Date to
(July 1,) Amount ($) Interest Rate (%) the Owner thereof as of the Record Date, by check or draft mailed by the Trustee on such Interest Payment
2023 880,000 3.500 Date to the Owner at its address as it appears on the registration books maintained by or on behalf of the
Trustee or at such other address as is furnished to the Trustee in writing by such Owner prior to such Record
**** ****** **** Date. Payment of interest on any Bonds may, upon written request to the Trustee of any Owner of Bonds
2028 1,060,000 4.000 in an aggregate principal amount of at least $100,000, be transmitted by wire transfer of immediately
available funds on the Interest Payment Date to such Owner to the bank account number at a bank located
**** ****** **** within the continental United States on file with the Trustee as of the Record Date. Any such wire transfer
2033 1,300,000 4.375 request shall continue in force until revoked in writing by such Owner to the Trustee, and to be effective as
to any interest payment such revocation must be received by the Trustee prior to the applicable Record
Date. Notwithstanding any provision herein, when the Bonds are held in book-entry form only, the
Series 2017B Bonds provisions of Section 2.12 and the current rules applicable to The Depository Trust Company on file with
the United States Securities and Exchange Commission, and the current procedures of The Depository Trust
Maturity Date Company, shall apply.
(July 1,) Amount ($) Interest Rate (%)
Section 2.02. Interest on Bonds. (a) Interest on the Series 2017A Bonds shall be computed on
2028 1,785,000 4.000 the basis of a 360-day year consisting of twelve 30-day months, payable on each Interest Payment Date.
**** ****** **** (b) Interest on the Series 2017B Bonds shall be computed on the basis of a 360-day year
2038 2,730,000 4.500 consisting of twelve 30-day months, payable on each Interest Payment Date, but only to the extent of
Residual Revenues available for such payment. In the event that the Residual Revenues are not sufficient
**** ****** ****
to pay the accrued interest due and payable on the Series 2017B Bonds on an Interest Payment Date, such
2053 7,880,000 5.000 unpaid interest shall be deferred for payment on the following Interest Payment Date. While any Senior
Bonds are Outstanding, non-payment of interest on the Series 2017B Bonds on any Interest Payment Date
due to insufficient Residual Revenues shall not be an Event of Default under this Indenture. Interest
payments that have been deferred shall accrue interest at the rate on such Series 2017B Bonds until paid as
set forth below.
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 Section 2.03. Execution. The Bonds shall be executed on behalf of the Issuer with the manual shall have been furnished with assurance of payment or reimbursement for any expense and with reasonable
or facsimile signature of the Chairman, Vice Chairman or President of the Issuer, shall be attested by the indemnity for liability of the Issuer and its officers, directors, employees, agents and counsel.
manual or facsimile signature of the Secretary or an Assistant Secretary of the Issuer, and shall have
(d) No Liability. No agreements or provisions contained in this Indenture nor any agreement,
impressed or imprinted thereon the official seal of the Issuer or a facsimile of such seal, if applicable.
covenant or undertaking by the Issuer contained in any document executed by the Issuer in connection with
In case any officer of the Issuer whose signature or whose facsimile signature shall appear on the the Project or the issuance, sale and delivery of the Bonds shall give rise to any pecuniary liability of the
Bonds shall cease to be such officer before the authentication of such Bonds, such signature or the facsimile Issuer or any of its officers or directors or a charge against its general credit, or shall obligate the Issuer or
signature thereof shall nevertheless be valid and sufficient for all purposes the same as if he or she had any of its officers or directors financially in any way except with respect to the Issuer under the Loan
remained in office until authentication; and any Bond may be signed on behalf of the Issuer by such persons Agreement and the application of revenues therefrom that have been pledged to the payment of the Bonds
as are at the time of execution of such Bond proper officers of the Issuer, even if, at the date of this Indenture, and the proceeds of the Bonds. No failure of the Issuer to comply with any term, condition, covenant or
any such person was not such officer. agreement herein shall subject the Issuer, its incorporators, officers, employees, agents and counsel to
liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the
Section 2.04. Limited Obligations. same can be paid or recovered from the Loan Agreement or revenues therefrom that have been pledged to
payment of the Bonds or proceeds of the Bonds. Nothing herein shall preclude a proper party in interest
(a) Not a Debt of the State of Oklahoma or Political Subdivision. THE BONDS AND THE
from seeking and obtaining, to the extent permitted by law, specific performance against the Issuer for any
INTEREST THEREON ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM
failure to comply with any term, condition, covenant or agreement herein; provided, that no costs, expenses
THE TRUST ESTATE AND GIVE RISE TO NO PECUNIARY LIABILITY OF THE ISSUER. THE
or other monetary relief shall be recoverable from the Issuer or its incorporators, officers, directors,
BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE ISSUER. THE BONDS AND THE
employees, agents and counsel except as may be payable from the Loan Agreement or revenues therefrom
INTEREST THEREON DO NOT CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY,
GENERAL OR MORAL OBLIGATION OR A PLEDGE OF THE FULL FAITH AND CREDIT OR that have been pledged to payment of the Bonds or the proceeds of the Bonds.
TAXING POWER OF THE ISSUER, THE STATE OF OKLAHOMA, OR ANY POLITICAL Section 2.05. Authentication. Only such Bonds as shall have endorsed thereon a certificate of
SUBDIVISION OF THE STATE OF OKLAHOMA WITHIN THE MEANING OF ANY authentication manually executed by the Trustee substantially in the form set forth in Exhibits A-1, A-2 and
CONSTITUTIONAL OR STATUTORY LIMITATIONS. NEITHER THE STATE OF OKLAHOMA B or a Supplemental Indenture authorizing a Series of Additional Bonds, respectively, shall be entitled to
NOR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA NOR THE ISSUER SHALL any security or benefit hereunder. No Bond shall be valid or obligatory for any purpose or entitled to any
BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, THE INTEREST THEREON OR security or benefit under this Indenture unless and until such certificate of authentication shall have been
OTHER COSTS INCIDENT THERETO EXCEPT FROM REVENUES PLEDGED THEREFOR UNDER executed by the Trustee, and such executed certificate of authentication of the Trustee upon any such Bond
THIS INDENTURE, ALL AS MORE FULLY SET FORTH IN THIS INDENTURE. NEITHER THE shall be conclusive evidence that such Bond has been authenticated and delivered hereunder. Said
FULL FAITH AND CREDIT NOR THE TAXING POWER, IF ANY, OF THE ISSUER, THE STATE certificate of authentication on any Bond shall be deemed to have been executed by the Trustee if signed
OF OKLAHOMA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE by an authorized officer of the Trustee, but it shall not be necessary that the same officer sign the certificate
PAYMENT OF THE PRINCIPAL OF THE BONDS OR THE INTEREST THEREON OR OTHER of authentication on all of the Bonds issued hereunder.
COSTS INCIDENT THERETO.
Section 2.06. Form of Bonds. The Series 2017A Bonds and Series 2017B Bonds shall be
(b) No Recourse to Issuer. No recourse under or upon any obligation, covenant or agreement substantially in the forms set forth in Exhibits A-1, A-2 and B, respectively, hereto with such variations,
contained in this Indenture or in any Bond, or under any judgment obtained against the Issuer, or the omissions and insertions as are permitted or required by this Indenture. Each Series of Additional Bonds
enforcement of any assessment, or any legal or equitable proceedings by virtue of any constitution or statute shall be substantially in the form set forth in the Supplemental Indenture authorizing such Series of
or otherwise, or under any circumstances under or independent, or any claim based thereon or otherwise in Additional Bonds.
respect thereof shall be had against the Issuer or any incorporator, member, director, officer, employee,
Section 2.07. Delivery of Series 2017 Bonds. Upon the execution and delivery of this
agent or counsel as such, past, present or future of the Issuer, either directly or through the Issuer, the
Trustee or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Owner of Indenture, the Issuer shall execute and deliver the Series 2017 Bonds to the Trustee, and the Trustee shall
any Bond issued hereunder, or otherwise, of any sum that may be due and unpaid by the Issuer upon any authenticate the Series 2017 Bonds and shall deliver them to the original purchasers thereof as directed by
such Bond. Any and all personal liability of every nature whether at common law or in equity or by statute the Issuer in the request described in (c) below.
or by constitution or otherwise of any such incorporator, member, director, officer, employee, agent or Prior to the delivery of any of the Series 2017 Bonds against payment therefor, the Trustee shall
counsel, as such, to respond by reason of any act or omission on his part or otherwise, for the payment for have received the following:
or to the Owner of any Bond issued hereunder or otherwise of any sum that may remain due and unpaid
(a) A copy, duly certified by the Secretary or an Assistant Secretary of the Issuer, of the
upon the Bond hereby secured or any of them is, by the acceptance hereof, expressly waived and released
resolution of the members of the Governing Body of the Issuer, authorizing the execution and delivery of
as a condition of and in consideration for the execution and the issuance of the Bonds.
the Loan Agreement and this Indenture and the issuance of the Series 2017 Bonds;
(c) Role of Issuer. The Issuer shall not be required to take any action hereunder not expressly
(b) Original executed counterparts of this Indenture, the Loan Agreement, the Mortgages, the
provided for herein. In addition, the Issuer shall have no obligation to review, control or oversee the
Series 2017 Notes, the Borrower’s Tax Certificate, the Management Agreement, the Collateral Assignment
activities of the Trustee in (a) collecting any amounts payable pursuant to the Loan Agreement, or (b)
of Management Agreements and the Continuing Disclosure Agreement;
making any payments on the Bonds. Furthermore, the Issuer shall not be obligated to take any action or
execute any document that might, in its reasonable judgment, involve it in any expense or liability unless it

25 26

(c) A request and authorization to the Trustee on behalf of the Issuer and signed by an Issuer the Business Day preceding the next Interest Payment Date or (b) to transfer any Bonds selected, called or
Representative to authenticate and deliver the Series 2017 Bonds as set forth therein and to deposit the being called for redemption in whole or in part.
proceeds of the Series 2017 Bonds in the various funds and accounts as specified therein;
Bonds delivered upon any transfer as provided herein, or as provided in Section 2.08 hereof, shall
(d) An approving opinion of Bond Counsel in respect of the tax-exemption of the Tax-Exempt be valid limited obligations of the Issuer, evidencing the same debt as the Bonds surrendered, shall be
Bonds and the enforceability of the Series 2017 Bonds; and secured by this Indenture and shall be entitled to all of the security and benefits hereof to the same extent
as the Bonds surrendered.
(e) A budget of the Borrower for the Fiscal Year ended December 31, 2018.
The Issuer, the Borrower and the Trustee shall treat the person in whose name a Bond is registered
Section 2.08. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated,
on the registration books maintained by the Trustee as the absolute owner thereof for all purposes, whether
lost, stolen or destroyed, the Issuer may execute and the Trustee may authenticate and deliver a new Bond
or not such Bond shall be overdue, and shall not be bound by any notice to the contrary.
of the same Series or subseries and of like date, interest rate, principal amount, maturity and denomination
as the Bond mutilated, lost, stolen or destroyed; provided that, in the case of any mutilated Bond, such Section 2.10. Cancellation of Bonds. Whenever any Outstanding Bond shall be delivered to the
mutilated Bond shall first be surrendered to the Trustee, and, in the case of any lost, stolen or destroyed Trustee for cancellation pursuant to this Indenture, upon payment of the principal amount thereof and
Bond, there shall be first furnished to the Trustee evidence of such loss, theft or destruction satisfactory to interest thereon, for replacement pursuant to Section 2.08 hereof, for transfer or exchange pursuant to
the Trustee, together with indemnity for the Issuer and the Trustee satisfactory to the Trustee, in its sole Section 2.09 hereof or otherwise, such Bond shall be cancelled and destroyed by the Trustee and, upon
discretion. In the event any such Bond shall be about to mature or have matured or been called for written request of the Issuer, counterparts of a certificate of destruction evidencing such destruction shall
redemption, instead of issuing a duplicate Bond, the Issuer may pay the same without surrender thereof. be furnished by the Trustee to the Issuer.
The Issuer and the Trustee may charge the Owner of such Bond their reasonable fees and expenses incurred
Section 2.11. Temporary Bonds. Pending preparation of definitive Bonds of any Series, there
pursuant to this Section 2.08.
may be executed, and upon request of the Issuer, the Trustee shall authenticate and deliver, in lieu of
All duplicate Bonds issued and authenticated pursuant to this Section 2.08 shall constitute original, definitive Bonds of such Series and subject to the same limitations and conditions, temporary typewritten,
contractual obligations of the Issuer to the extent provided in this Indenture (whether or not lost, stolen or printed, engraved or lithographed bonds, in the form of registered Bonds of such Series without coupons in
destroyed Bonds be at any time found by anyone) and shall be entitled to equal and proportionate rights Authorized Denominations, substantially in the respective forms of Exhibits A-1, A-2 and B hereto, with
and benefits hereunder as all other Outstanding Bonds issued hereunder. respect to the Series 2017 Bonds, or as set forth in a Supplemental Indenture for Additional Bonds.
Section 2.09. Registration and Transfer of Bonds; Persons Treated as Owners. The Trustee If temporary Bonds of a Series shall be issued, the Issuer shall cause the definitive Bonds to be
shall keep books for the registration and for the transfer of the Bonds as provided in this Indenture. So long prepared and to be executed, authenticated and delivered to the Trustee not later than 14 days following the
as the Bonds are held in physical form and not book-entry form, at reasonable times and under reasonable delivery or reissuance of such temporary Bonds, and the Trustee, upon presentation to it at its Designated
regulations established by the Trustee and subject to applicable law providing to the contrary, such list may Office of any temporary Bond, shall cancel the same and deliver in exchange therefor at the place designated
be inspected and copied by the Issuer, the Borrower or the Owners of $1,000,000 or more in aggregate by the Owner, without charge to the Owner, a definitive Bond or Bonds of the same Series or subseries in
Principal Amount of the Bonds, or a designated representative of such Owners. an equal aggregate principal amount, of the same maturity and bearing interest at the same rate or rates as
the temporary Bond surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled
Promptly following surrender for transfer of any Bond at its Designated Office, the Trustee shall
to the same benefit and security of this Indenture as the definitive Bonds of such Series or subseries to be
enter the name and address of the transferee upon the registration books of the Issuer and shall deliver to
issued and authenticated hereunder.
the transferee a new fully authenticated and registered Bond or Bonds in the name of the transferee, such
new Bond or Bonds to be of the same Series or subseries, of Authorized Denominations and of the same Section 2.12. Book Entry Form. Notwithstanding anything herein to the contrary, the Series
maturity, interest rate and for the aggregate principal amount that the new Owner is entitled to receive. In 2017 Bonds shall initially be issued as typewritten bonds and held in book-entry form on the books of the
addition, promptly following surrender of any Bond at the Designated Office of the Trustee, duly endorsed Clearing Agency. The Issuer and any Fiduciary may, in connection herewith, do or perform or cause to
in blank, such Bond may at the option of the Owner thereof, be exchanged for a Bond or Bonds of the same be done or performed any acts or things not adverse to the rights of the holders of the Series 2017 Bonds,
Series or subseries in an equal aggregate principal amount of the applicable Series of Authorized as are necessary or appropriate to accomplish or recognize such book-entry form Series 2017 Bonds.
Denominations and of the same form, interest rate and tenor of the Bond being exchanged.
(a) So long as the Bonds of a Series remain and are held in book-entry form on the books of a
All Bonds presented for transfer, exchange, redemption or payment shall (if so required by the Clearing Agency, then (1) any such Bond may be registered upon the books kept by the Trustee in the name
Issuer or the Trustee) be accompanied by a written instrument or instruments of transfer, in form and with of such Clearing Agency, or any nominee thereof, including Cede & Co., as nominee of The Depository
guaranty of signature as set forth in the form of Bond of the applicable Series or as may be satisfactory to Trust Company; (2) the Clearing Agency in whose name such Bonds are so registered shall be, and the
the Trustee, duly executed by the Owner. Issuer and any Fiduciary may deem and treat such Clearing Agency as, the absolute owner and holder of
such Bond for all purposes of this Indenture, including, without limitation, the receiving of payment of the
The Trustee also may require payment from the Owner of a sum sufficient to cover any tax or other
principal of, premium, if any, and interest on such Bond and the receiving of notice and giving of consent;
governmental fee or charge that may be imposed in relation thereto. Such taxes, fees and charges shall be
(3) neither the Issuer nor any Fiduciary shall have any responsibility or obligation hereunder to any direct
paid before any such new Bond shall be delivered. The cost of printing Bonds and any services rendered
or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as
or expenses incurred by the Trustee in connection with any transfer shall be paid by the Borrower.
amended, of such Clearing Agency, or any person on behalf of which, or otherwise in respect of which, any
The Issuer and the Trustee shall not be required (a) to issue or register the transfer of any Bonds such participant holds any interest in any such Bond, including, without limitation, any responsibility or
during any period beginning on a Record Date with respect thereto and ending at the close of business on obligation hereunder to maintain accurate records of any interest in any such Bond or any responsibility or
27 28

B-27
obligation hereunder with respect to the receiving of payment of principal, premium, if any, or interest on such Additional Bonds. In addition to the other requirements of Section 2.14, the Bonds of such Series
any such Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required shall be authenticated and delivered by the Trustee only upon (i) written evidence from each Rating Agency
to present any such Bond called for partial redemption prior to receiving payment so long as the Trustee then rating any of the Bonds then Outstanding that the issuance of such Additional Bonds shall not result
and the Clearing Agency have agreed to the method for noting such partial redemption. in a reduction of such rating and (ii) certification from the Borrower that the issuance of such Additional
Bonds will comply with Section 6.13 of the Loan Agreement.
(b) If either (a) the Issuer receives notice from the Clearing Agency that is currently the
registered owner of the Bonds of a Series to the effect that such Clearing Agency is unable or unwilling to Section 2.14. Delivery of Additional Bonds. Upon the execution and delivery in each instance
discharge its responsibility as a Clearing Agency for such Bonds or, (b) the Issuer elects with the prior of an appropriate indenture supplemental hereto, the Issuer shall execute and deliver to the Trustee and the
written consent of the Borrower to discontinue its use of such Clearing Agency as a Clearing Agency and Trustee shall register and authenticate Additional Bonds and deliver them to the purchaser or purchasers as
the Issuer fails to establish a securities depository/book-entry system relationship with another Clearing may be directed by the Issuer, as hereinafter in this Section 2.14 provided. Prior to the delivery by the
Agency, then the Issuer and any Fiduciary each shall do or perform or cause to be done or performed all Trustee of any such Additional Bonds, there shall be filed with the Trustee:
acts or things, not adverse to the rights of the holders of the Bonds, as are necessary or appropriate to
(a) a valid and effective amendment to the Loan Agreement, pursuant to Section 11.04 hereof,
discontinue use of such Clearing Agency as a Clearing Agency for the Bonds and to transfer the ownership
providing for the inclusion within the Project of any real estate and interests therein and any buildings,
of each of the Bonds to such person or persons, including any other Clearing Agency, as the holder of the
structures, facilities, machinery, equipment, and related property to be acquired by purchase or construction
Bonds of such Series may direct in accordance with this Indenture. Any expenses of such discontinuance
from the proceeds of the Additional Bonds and providing for an adjustment to the Loan Payment obligations
and transfer, including expenses of printing new certificates to evidence the Bonds, shall be paid by the
of the Borrower to cover the Debt Service Requirements of all the Bonds that will be Outstanding after the
Borrower.
issuance of the Additional Bonds, which shall be evidenced by a Note of the Borrower, and providing any
(c) So long as the Bonds of a Series remain and are held in book-entry form on the books of a other changes in connection with the issuance of Additional Bonds;
Clearing Agency, the Trustee shall be entitled to request and rely upon a certificate or other written
(b) a valid and effective Supplemental Indenture providing for the issuance of such new Series
representation from the Clearing Agency or any participant or indirect participant with respect to the
of Additional Bonds and (except for refunding Bonds issued pursuant to Section 2.13(a)) expressly
identity of any Owners of such Series as of a record date selected by the Trustee. For purposes of
subordinating the payment of and security for such Additional Bonds to all other Series of Bonds then
determining whether the consent, advice, direction or demand of an owner of a Bond has been obtained,
Outstanding;
the Trustee shall be entitled to treat the Owners as the owner or Beneficial Owner of such Bonds and any
consent, request, direction, approval, objection or other instrument of such Owner may be obtained in the (c) a valid and effective amendment to the Mortgages subjecting to the lien of the Mortgages
same fashion described in Article X hereof. any and all real estate and interests therein and any buildings, structures, facilities, and related property
acquired by purchase or construction from proceeds of such Additional Bonds and assigning and pledging
In the event all of the Bonds are no longer rated in one of the three highest rating categories by a
to the Issuer and the Trustee the Borrower’s interest in the leases, rents, issues, profits, revenues, income,
Rating Agency, the book-entry system may also be discontinued with respect to the Bonds, at the direction
receipts, money, royalties, rights and benefits thereof and therefrom and granting a security interest to the
of the Issuer or the Borrower, and at the Borrower’s expense, and the Issuer and the Trustee will cause the
Issuer in the Borrower’s interest in the machinery, equipment, and related property acquired by purchase
delivery of Bond certificates to such Beneficial Owners of the Bonds, registered in the names of such
or construction from the proceeds of the Additional Bonds, in any inventory then or thereafter located at
Beneficial Owners as are specified to the Trustee by the Clearing Agency in writing.
the real estate or interests therein and any buildings, structures, facilities, and related property to be acquired
When the book-entry system is not in effect, all references herein to the Clearing Agency will be by purchase or construction from the proceeds of the Additional Bonds, and in the accounts, documents,
of no further force or effect. chattel paper, instruments, and general intangibles arising in any manner from the Borrower’s operation of
any real estate or interests therein and any buildings, structures, facilities, machinery, equipment, and
Section 2.13. Additional Bonds. (a) So long as no Event of Default has occurred and is
related property to be acquired by purchase or construction from the proceeds of the Additional Bonds;
continuing, one or more series of Additional Bonds may be issued, authenticated and delivered to refund
all or any portion of the Outstanding Bonds of one or more Series including any portion of any maturity (d) a copy, duly certified by the Secretary or an Assistant Secretary of the Issuer, of the
within one or more Series. Refunding Bonds shall be of the same priority and on a parity with the Bonds resolution of the members of the Governing Body of the Issuer, authorizing the execution and delivery of
of the Series to be refunded. Refunding Bonds shall be issued in a principal amount sufficient, together the Supplemental Indenture, amendment to the Loan Agreement, a Note and issuance of the Additional
with other moneys available therefore, to accomplish such refunding including providing amounts for the Bonds;
costs incidental to or connected with any such financing and the making of any deposits into the applicable
(e) a request and authorization to the Trustee on behalf of the Issuer, signed by an Issuer
Debt Service Reserve Fund and any of the funds and accounts required by the provisions of the
Representative, to authenticate and deliver the Additional Bonds to the purchaser or purchasers therein
Supplemental Indenture authorizing such Series of refunding Bonds. In addition to the other requirements
identified upon payment to the Trustee, for the account of the Issuer, of a specified sum plus any accrued
of Section 2.14, refunding Bonds of each Series shall be authenticated and delivered by the Trustee only
interest; the proceeds of the Additional Bonds shall be paid over to the Trustee and deposited to the credit
upon receipt by the Trustee of (i) written evidence from each Rating Agency then rating any of the Bonds
of such other funds as are provided in such request and authority or as are created by the Supplemental
then Outstanding that the issuance of such refunding Bonds shall not result in a reduction of such rating
Indenture;
and (ii) certification from the Borrower that the issuance of such Additional Bonds will comply with Section
6.13 of the Loan Agreement. (f) a certificate signed by a Borrower Representative to the effect that no Event of Default
under this Indenture or any Borrower Document has then occurred and is continuing;
(b) So long as no Event of Default has occurred and is continuing, one or more series of
Additional Bonds may be issued, authenticated and delivered for any other lawful purpose so long as such
Series of Bonds is expressly subordinate to all other Series of Bonds Outstanding at the time of issuance of
29 30

(g) if such Additional Bonds are issued pursuant to Section 2.13(b), a certification from the ARTICLE III.
Borrower and calculations demonstrating that the requirements of Section 6.13 of the Loan Agreement will
be satisfied in respect of the issuance of the Additional Bonds; REDEMPTION OR PURCHASE OF SERIES 2017 BONDS
(h) if such Additional Bonds are issued pursuant to Section 2.13(a), a certification from the Section 3.01. Mandatory Redemption of Series 2017 Bonds. Series 2017 Bonds shall be called
Borrower described in Section 2.13(a)(ii); for redemption (a) in whole or in part in the event the Project or any portion thereof is damaged or destroyed
or taken in a condemnation proceeding and Net Proceeds resulting therefrom are to be applied to the
(i) a Favorable Opinion of Bond Counsel with respect to the Outstanding Tax-Exempt Bonds
payment of the Series 2017 Notes as provided in Section 5.3 of the Loan Agreement, which Net Proceeds
and an approving opinion of Bond Counsel with respect to the tax-exemption (to the extent that such
are to be used to redeem Series 2017 Bonds at the election of the Borrower made pursuant to Section 5.3
Additional Bonds are Tax-Exempt Bonds) and enforceability of the Additional Bonds;
of the Loan Agreement, (b) in whole in the event the Borrower exercises its option to terminate the Loan
(j) the items required by Section 2.13 of this Indenture; Agreement pursuant to Article VIII thereof (and cause all of the Series 2017 Bonds to be redeemed as
(k) endorsements of the Title Policies, which endorsements include any additional real provided in Article III hereof), or (c) in whole or in part from proceeds of the Title Policies pursuant to
property made subject to the Mortgages and increases the aggregate face amount of the policies to an Section 3.9 of the Loan Agreement.
amount equal to the principal amount of the Outstanding Bonds and the Additional Bonds; and If called for redemption at any time pursuant to (a) through (c) above, the Series 2017 Bonds of a
(l) such other documents as the Trustee may reasonably require to evidence compliance with Series to be redeemed shall be subject to redemption by the Issuer prior to maturity, in whole at any time
any of the Bond Documents. or (in the case of redemption pursuant to clause (a) or (c) above) in part at any time (less than all of such
Series 2017 Bonds to be selected in accordance with the provisions of Section 3.05 hereof) at a redemption
price equal to 100% of the principal amount thereof plus accrued interest to the redemption date; such
redemption date to be a date determined by the Borrower.
Section 3.02. Optional Redemption of Series 2017 Bonds. The Bonds are subject to optional
redemption prior to maturity by the Issuer at the written direction of the Borrower in whole or in part on or
after July 1, 2024, at a redemption price equal to 100% of the principal amount to be redeemed, together
with accrued interest to the date fixed for redemption.
The Borrower may condition any election to redeem Bonds upon any condition. To the extent that
any condition specified in the notice of redemption does not occur, the Borrower may direct the Trustee to
rescind the notice. Upon receipt of such direction by the Borrower, the Trustee shall notify the Owners of
the Bonds that such redemption notice has been rescinded.
Section 3.03. Mandatory Sinking Fund Redemption.

(a) The Series 2017A-1 Bonds of each maturity shown below are subject to mandatory sinking
fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest
on the dates and in the principal amounts shown below:
July 1, 2028
Date Amount ($) Date Amount ($)
January 1, 2019 40,000 January 1, 2024 50,000
July 1, 2019 40,000 July 1, 2024 45,000
January 1, 2020 45,000 January 1, 2025 55,000
July 1, 2020 40,000 July 1, 2025 45,000
January 1, 2021 50,000 January 1, 2026 55,000
July 1, 2021 40,000 July 1, 2026 50,000
January 1, 2022 60,000 January 1, 2027 70,000
July 1, 2022 35,000 July 1, 2027 40,000
January 1, 2023 45,000 January 1, 2028 55,000
July 1, 2023 45,000 July 1, 2028 55,000*
*Remaining due at maturity

31 32

B-28
 July 1, 2028
July 1, 2038
Date Amount ($) Date Amount ($)
Date Amount ($) Date Amount ($)
January 1, 2024 95,000 July 1, 2026 105,000
January 1, 2029 60,000 January 1, 2034 220,000 July 1, 2024 100,000 January 1, 2027 105,000
July 1, 2029 55,000 July 1, 2034 215,000 January 1, 2025 105,000 July 1, 2027 115,000
January 1, 2030 65,000 January 1, 2035 230,000 July 1, 2025 100,000 January 1, 2028 115,000
July 1, 2030 55,000 July 1, 2035 225,000 January 1, 2026 105,000 July 1, 2028 115,000*
January 1, 2031 65,000 January 1, 2036 245,000 *Remaining due at maturity
July 1, 2031 60,000 July 1, 2036 230,000
July 1, 2033
January 1, 2032 65,000 January 1, 2037 245,000
July 1, 2032 65,000 July 1, 2037 245,000 Date Amount ($) Date Amount ($)
January 1, 2033 75,000 January 1, 2038 255,000 January 1, 2029 120,000 July 1, 2031 130,000
July 1, 2033 65,000 July 1, 2038 255,000* July 1, 2029 120,000 January 1, 2032 135,000
*Remaining due at maturity January 1, 2030 125,000 July 1, 2032 135,000
July 1, 2030 125,000 January 1, 2033 140,000
January 1, 2031 130,000 July 1, 2033 140,000*
July 1, 2053 *Remaining due at maturity
Date Amount ($) Date Amount ($)
(c) The Series 2017B Bonds of each maturity shown below are subject to mandatory sinking
January 1, 2039 265,000 July 1, 2046 350,000 fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest
July 1, 2039 265,000 January 1, 2047 365,000 on the dates and in the principal amounts shown below:
January 1, 2040 280,000 July 1, 2047 365,000
July 1, 2040 275,000 January 1, 2048 380,000 July 1, 2028
January 1, 2041 290,000 July 1, 2048 380,000 Date Amount ($) Date Amount ($)
July 1, 2041 285,000 January 1, 2049 395,000
January 1, 2042 300,000 July 1, 2049 395,000 January 1, 2019 70,000 January 1, 2024 90,000
July 1, 2042 300,000 January 1, 2050 415,000 July 1, 2019 80,000 July 1, 2024 95,000
January 1, 2043 315,000 July 1, 2050 410,000 January 1, 2020 75,000 January 1, 2025 90,000
July 1, 2043 310,000 January 1, 2051 430,000 July 1, 2020 80,000 July 1, 2025 95,000
January 1, 2044 325,000 July 1, 2051 425,000 January 1, 2021 75,000 January 1, 2026 95,000
July 1, 2044 325,000 January 1, 2052 445,000 July 1, 2021 85,000 July 1, 2026 100,000
January 1, 2045 340,000 July 1, 2052 445,000 January 1, 2022 80,000 January 1, 2027 100,000
July 1, 2045 335,000 January 1, 2053 465,000 July 1, 2022 85,000 July 1, 2027 100,000
January 1, 2046 350,000 July 1, 2053 460,000* January 1, 2023 85,000 January 1, 2028 110,000
*Remaining due at maturity July 1, 2023 90,000 July 1, 2028 105,000*
*Remaining due at maturity
(b) The Series 2017A-2 Bonds of each maturity shown below are subject to mandatory sinking
fund redemption at a redemption price equal to 100% of the principal amount thereof plus accrued interest July 1, 2038
on the dates and in the principal amounts shown below: Date Amount ($) Date Amount ($)
July 1, 2023 January 1, 2029 110,000 January 1, 2034 140,000
July 1, 2029 110,000 July 1, 2034 140,000
Date Amount ($) Date Amount ($) January 1, 2030 115,000 January 1, 2035 145,000
January 1, 2019 85,000 July 1, 2021 90,000 July 1, 2030 115,000 July 1, 2035 145,000
July 1, 2019 80,000 January 1, 2022 90,000 January 1, 2031 120,000 January 1, 2036 150,000
January 1, 2020 80,000 July 1, 2022 90,000 July 1, 2031 120,000 July 1, 2036 150,000
July 1, 2020 90,000 January 1, 2023 95,000 January 1, 2032 125,000 January 1, 2037 160,000
January 1, 2021 85,000 July 1, 2023 95,000* July 1, 2032 130,000 July 1, 2037 160,000
January 1, 2033 130,000 January 1, 2038 165,000
*Remaining due at maturity July 1, 2033 135,000 July 1, 2038 165,000*
*Remaining due at maturity
33 34

July 1, 2053 (b) Not later than the Purchase Notice Date, any direction given to the Trustee pursuant to this
Date Amount ($) Date Amount ($) Section 3.05 may be withdrawn by the Borrower by written notice to the Trustee. Subject generally to this
Indenture, should a direction to purchase be withdrawn, the Bonds for which such notice was given shall
January 1, 2039 175,000 July 1, 2046 245,000
be redeemed and canceled on the redemption date.
July 1, 2039 175,000 January 1, 2047 260,000
January 1, 2040 180,000 July 1, 2047 255,000 (c) The purchase shall be made for the account of the Borrower or its designee.
July 1, 2040 180,000 January 1, 2048 265,000
(d) The purchase price of the Bonds shall be equal to the outstanding principal of, accrued and
January 1, 2041 195,000 July 1, 2048 275,000
unpaid interest on and the redemption premium, if any, that would have been payable on such Bonds on the
July 1, 2041 190,000 January 1, 2049 285,000
scheduled redemption date. To pay the purchase price of such Bonds, the Trustee shall use (A) such
January 1, 2042 200,000 July 1, 2049 285,000
monies deposited by the Borrower with the Trustee for such purpose and (B) monies, if any, in funds held
July 1, 2042 200,000 January 1, 2050 300,000
under this Indenture, if any, that the Trustee would have used to pay the outstanding principal of, accrued
January 1, 2043 210,000 July 1, 2050 295,000
and unpaid interest on and the redemption premium, if any, that would have been payable on the redemption
July 1, 2043 210,000 January 1, 2051 310,000
of such Bonds on the scheduled redemption date.
January 1, 2044 220,000 July 1, 2051 315,000
July 1, 2044 220,000 January 1, 2052 330,000 Any Bonds purchased pursuant to this Section 3.05 may be remarketed by any applicable
January 1, 2045 230,000 July 1, 2052 330,000 remarketing agent and shall not be deemed cancelled or retired for any purpose unless otherwise directed
July 1, 2045 235,000 January 1, 2053 530,000 by the Borrower. In the event that all Outstanding Bonds are purchased pursuant to this Section 3.05, such
January 1, 2046 245,000 July 1, 2053 535,000* Bonds shall be deemed to be Outstanding for purposes of Article XI hereof.
*Remaining due at maturity (e) No notice of purchase in lieu of redemption shall be required to be given to the Owners
(other than the notice of redemption otherwise required under this Indenture).
The principal amount of the Series 2017 Bonds of any Series and stated maturity bearing interest
at the same interest rate required to be redeemed on each date set forth above shall be reduced by the Section 3.06. Selection of Bonds to Be Redeemed. Bonds may be redeemed only in Authorized
principal amount of the Series 2017 Bonds of such Series and stated maturity bearing such rate of interest Denominations. Subject to the requirements of any Clearing Agency, if less than all of the Bonds are being
specified by Borrower request at least 45 days prior to the redemption date that have been either (i) redeemed or purchased, the particular Bonds of each maturity and interest rate to be redeemed or purchased
purchased by or on behalf of the Borrower and delivered to the Trustee for cancellation, or (ii) redeemed shall be selected by the Trustee by lot or in such manner as the Trustee in its discretion may deem proper
other than through the operation of the provisions of this Section 3.03, and that have not been previously and in accordance with the procedures of the Clearing Agency (a) in the case of mandatory sinking fund
made the basis for a reduction of the principal amount of the Series 2017 Bonds of such Series and stated redemptions pursuant to Section 3.03 hereof, from the Outstanding Bonds of the applicable Series or
maturity and interest rate to be redeemed on a sinking fund redemption date. subseries, maturity and interest rate to be redeemed in accordance with Section 3.03 hereof, (b) in the case
of any redemption pursuant to Sections 3.01, 3.02, 3.12 or 3.13 hereof, from all Outstanding Bonds of all
Section 3.04. Purchase in Lieu of Redemption. Notwithstanding anything to the contrary in this
Series, pro rata among all Series based on relative outstanding principal amount, and (c) in the case of any
Indenture, if any Bond is called for optional or extraordinary redemption in whole or in part, the Borrower
redemption pursuant to Sections 3.14 hereof, as provided in Sections 3.14 hereof, as applicable.
may, upon the receipt of a Favorable Opinion of Bond Counsel addressed to the Borrower, the Trustee and
the Issuer, elect to have such Bond purchased and transferred in lieu of redemption and cancellation in Subject to the requirements of any Clearing Agency, if it is determined that less than all of the
accordance with this Section 3.04. principal amount represented by any Bond of such Series of any maturity and interest rate is to be called
for redemption, then, following notice of intention to redeem such principal amount, the Owner thereof
Section 3.05. Direction to Purchase. (a) Unless otherwise provided in a Supplemental
shall surrender such Bond to the Trustee on or before the applicable redemption date for (i) payment on the
Indenture, purchase in lieu of redemption shall be available to all Bonds called for optional or extraordinary
redemption date to such Owner of the redemption price of the amount called for redemption and (ii) delivery
redemption or for such lesser portion of such Bonds in any Authorized Denomination. The Borrower may
to such Owner of a new Bond or Bonds of such Series, maturity and interest rate in the aggregate principal
direct the Trustee to purchase all or such lesser portion of the Bonds so called for redemption. Any such
amount of the unredeemed balance of the principal amount of such Bond, which shall be an Authorized
direction to the Trustee must:
Denomination. A new Bond of such Series, maturity and interest rate representing the unredeemed balance
(i) be in writing; of such Bond shall be issued to the Owner thereof, without charge therefor. If the Owner of any Bond of
such Series, maturity and interest rate or integral multiple of the Authorized Denomination selected for
(ii) state either that all the Bonds called for redemption are to be purchased or, if less
redemption shall fail to present such Bond of such Series, maturity and interest rate to the Trustee for
than all of the Bonds called for redemption are to be purchased, identify those Bonds to be
payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the date
purchased by stated maturity and interest rate, and outstanding principal amount in Authorized
fixed for redemption to the extent of the amount called for redemption (and to that extent only), and interest
Denominations; and
shall cease to accrue from the date fixed for redemption.
(iii) be received by the Trustee no later than the Purchase Notice Date.
Section 3.07. Notice of Redemption.
If so directed, the Trustee shall purchase such Bonds on the date that otherwise would be the
(a) In the event any of the Bonds are called for redemption, the Trustee shall give notice, in
redemption date of such Bonds. Any of the Bonds called for redemption that are not purchased in lieu of
the name of the Issuer, of the redemption of such Bonds, which notice shall (i) specify the Series, maturity
redemption shall be redeemed and cancelled as otherwise required by this Indenture on such redemption
and interest rate of the Bonds to be redeemed, the redemption date, the redemption price and the place or
date.
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places where amounts due upon such redemption will be payable (which shall be the Designated Office of redemption date), then the purported optional redemption and such notice of redemption shall be void. Such
the Trustee), and any conditions required to be satisfied prior to the redemption date, and (ii) state that on event shall not constitute an Event of Default hereunder.
the redemption date the Bonds to be redeemed shall cease to bear interest. Such notice may set forth any
Section 3.11. Redemption Payments. At the written request by any Owner upon the payment
additional information relating to such redemption. Such notice shall be given electronically or by Mail to
of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such
the Owners of the Bonds to be redeemed, at least 20 days but no more than 60 days prior to the date fixed
purpose shall, to the extent possible, bear the CUSIP number identifying, by issue and maturity, the Bonds
for redemption. Upon presentation and surrender of the Bonds so called for redemption at the place or
being redeemed with the proceeds of such check or other transfer. In addition, if such check or other transfer
places of payment, such Bonds shall be redeemed.
of funds includes more than one Series of Bonds being redeemed, such check or other transfer must set
(b) If required by law or applicable regulation, notice of redemption shall also be given by the forth the dollar amount of each such Series being redeemed.
Trustee, by first-class mail, to all organizations registered with the United States Securities and Exchange
Section 3.12. Special Mandatory Redemption. The Tax-Exempt Bonds of each series are
Commission as securities depositories, and to at least one information service of national recognition that
subject to mandatory redemption in whole, or in part at any time if such partial redemption will preserve
disseminates redemption information with respect to tax-exempt securities.
the exemption from gross income for federal income tax purposes of interest on the remaining Tax-Exempt
(c) Failure by the Trustee to give notice pursuant to the preceding paragraphs of this Bonds Outstanding of such Series (such Bonds to be designated by the Borrower Representative in writing
Section 3.07 shall not affect the sufficiency of the proceedings for redemption. Failure of the Trustee to to the Trustee), at a redemption price equal to (a) prior to the date such Bonds are subject to optional
give notice to an Owner or any defect in such notice shall not affect the validity of the proceedings for redemption pursuant to Section 3.02 hereof, 105% of the principal amount thereof to be redeemed and (b)
redemption of the Bonds of any Owner to whom notice shall have been properly given. Any notice mailed on and after the date such Bonds are subject to optional redemption pursuant to Section 3.02 hereof, the
as provided in this Section 3.07 shall be conclusively presumed to have been duly given, whether or not the percentage of the principal amount thereof to be redeemed as specified in Section 3.02 hereof, in each case
Owners receive the notice. together with unpaid interest accrued to the date fixed for redemption, if (i) a final decree or judgment of
any federal court, in which the Borrower participates to the extent it deems sufficient, or (ii) a final action
(d) The Trustee may give any other or additional redemption notice as it deems necessary or
by the Internal Revenue Service, in proceedings in which the Borrower participates to the extent it deems
desirable, but it is not obligated to give or provide any additional notice or information.
sufficient, determines that the interest paid or payable on any such Tax-Exempt Bonds to other than, as
(e) Any Bonds that have been duly selected for redemption and that are deemed to be paid in provided in the Code, a "substantial user" of the Project or a "related person" is or was includable in the
accordance with Article VII hereof shall cease to bear interest on the specified redemption date. gross income of the owner thereof for federal income tax purposes under the Code, as a result of the failure
Section 3.08. Payment of Redemption Price. Except in the case of a mandatory sinking fund by the Borrower to observe or perform any covenant, condition, or agreement on its part to be observed or
redemption pursuant to Section 3.03 hereof, for the redemption of any of the Bonds of a Series, the Trustee performed under the Loan Agreement or the inaccuracy of any representation by the Borrower under the
shall cause to be deposited in the applicable Special Redemption Account, whether out of Project Revenues Loan Agreement; provided, however, that no decree or judgment by any court or action by the Internal
or any other money constituting the applicable Trust Estate, including Net Proceeds of any Insurance Revenue Service shall be considered final unless the registered owner involved in such proceeding or action
Proceeds or Condemnation Awards available for such purpose pursuant to Article VIII of the Loan (A) gives the Borrower and the Trustee prompt written notice of the commencement thereof and (B), if the
Agreement, or otherwise, an amount sufficient to pay the principal of, premium, if any, and interest to Borrower agrees to pay all expenses in connection therewith and to indemnify such registered owner against
become due on the date fixed for such redemption. Any such deposit to be made hereunder shall be all liabilities in connection therewith, offers the Borrower the opportunity to control the defense thereof.
reduced by the amount of money in such Special Redemption Account available for and used on such Any such redemption shall be made on a date determined by the Borrower not more than 180 days after the
redemption date for payment of the principal of, premium, if any, and accrued interest on the Bonds to be date of such final decree, judgment or action. The Borrower shall give the Issuer and the Trustee not less
redeemed. than 45 days written notice of such redemption.

Section 3.09. (Intentionally Omitted). Section 3.13. Special Redemption Upon Sale of Facilities. The Bonds are subject to mandatory
redemption in whole or in part at any time at a redemption price equal to the principal amount to be
Section 3.10. Effect of Notice of Redemption. If notice of redemption has been given in the redeemed together with unpaid interest accrued to the date fixed for redemption, and without premium, to
manner provided in this Article, and money for the redemption is held by the Trustee for that purpose, the the extent the Borrower has received Sale Proceeds from the sale of a portion of the Project pursuant to
Bonds so called for redemption shall become due and payable on the redemption date, and interest thereon Section 5.9 of the Loan Agreement. Any such redemption shall be made on a date determined by the
shall cease to accrue on such date; and such Bonds shall thereafter no longer be entitled to any security or Borrower not more than 180 days after the receipt by the Borrower of such Sale Proceeds. The Borrower
benefit under this Indenture except to receive payment of the redemption price thereof. shall give the Trustee not less than 45 days written notice of such redemption date.
If any Bond called for redemption shall not be so paid on the redemption date upon proper surrender Section 3.14. Mandatory Redemption from Debt Service Reserve Funds. The Second Tier
of the Bond for redemption, the redemption price and, to the extent lawful, interest thereon shall, until paid, Bonds are subject to mandatory redemption in whole or in part at any time at a redemption price equal to
bear interest from the redemption date at the rate borne by the Bond immediately before the redemption the principal amount of the Second Tier Bonds to be redeemed together with unpaid interest accrued to the
date. date fixed for redemption, and without premium, upon direction from the Owners of a majority of aggregate
Notwithstanding the foregoing, with respect to optional redemptions only, if the Trustee does not Principal Amount of the Second Tier Bonds that the Second Tier Bonds are to be redeemed with amounts
have funds in its possession on the redemption date sufficient to pay the redemption price (including interest on deposit in the Debt Service Reserve Fund pursuant to Section 8.02 hereof in connection with the
accruing to the redemption date) of all of the Bonds to be optionally redeemed for any reason (including, occurrence of an Event of Default relating to payment of the principal or redemption price of or interest on
but not limited to, failure to issue any refunding obligations intended for such purpose on or prior to the the Second Tier Bonds. Any such redemption shall be made pro rata on the basis of Principal Amount
among the maturities of the Second Tier Bonds, and shall be made on a date determined by the direction of

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such Owners not more than 180 days after the date notice from such Owners is received by the Trustee. ARTICLE IV.
Such Owners shall give the Trustee and the Borrower not less than 45 days written notice of such
redemption date. GENERAL COVENANTS
Section 4.01. Payment of Bonds; Limited Obligations.
(a) The Issuer covenants that it will promptly pay or cause to be paid the principal of, premium,
if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner
provided herein and in the Bonds, provided that the principal, premium, if any, and interest on each Series
of the Bonds are payable by the Issuer solely from the related Trust Estate, and nothing in the Bonds or this
Indenture shall be considered as assigning or pledging any other funds or assets of the Issuer other than the
Trust Estate.
(b) Each and every covenant made herein by the Issuer is predicated upon the condition that
none of the Issuer, the State of Oklahoma nor any political subdivision of the State of Oklahoma shall in
any event be liable for the payment of the principal of, premium, if any, or interest on any of the Bonds or
for the performance of any pledge, obligation or agreement undertaken by the Issuer except to the extent
that money pledged herein are sufficient therefor.
Section 4.02. Performance of Covenants; Authority; Due Execution. The Issuer covenants that
it will faithfully perform or cause to be performed at all times any and all covenants, undertakings,
stipulations and provisions to be performed by the Issuer contained in this Indenture and the other Bond
Documents, in any and every Bond executed, authenticated and delivered hereunder and in all of its
proceedings pertaining hereto. The Issuer covenants that it is duly authorized under the laws of the State
of Oklahoma, including particularly the Act, to issue the Bonds, to execute this Indenture and to pledge the
amounts hereby pledged in the manner and to the extent herein set forth. The Issuer further covenants that
all action on its part for the issuance of the Bonds and the execution and delivery of the Bond Documents
have been duly and effectively taken.
Section 4.03. Instruments of Further Assurance. The Issuer covenants that it will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such indentures
supplemental hereto and such further acts, instruments and transfers as necessary or as the Trustee may
reasonably require for the better assuring, transferring, pledging, assigning and confirming to the Trustee
all and singular the rights assigned hereby and the amounts pledged hereby to the payment of the principal
of, premium, if any, and interest on the Bonds.
Section 4.04. Recording and Filing; Further Instruments.
(a) The Trustee shall cooperate with the Borrower so that the Borrower shall cause to be
recorded or filed, at the Borrower’s expense, all necessary financing statements, including continuation
statements, related to this Indenture, and the Mortgages and all supplements hereto and thereto, and such
other documents as may be necessary to be kept and filed in such manner and in such places as may be
required by law in order to perfect, preserve and protect fully the security of the Owners and the rights of
the Trustee hereunder. At the written request of the Trustee, the Borrower shall provide evidence to the
Trustee that all necessary filings required by this paragraph have been made.
(b) The Issuer shall, at the expense of the Borrower, as necessary or upon the reasonable
request of the Trustee, from time to time execute and deliver such further instruments and take such further
action as may be reasonable and as may be required to effectuate the purposes of this Indenture or any
provision hereof; provided, however, that no such instruments or actions shall pledge the general credit, the
full faith or the taxing power of the Issuer, the State of Oklahoma or any political subdivision thereof; and
provided that the Borrower may fulfill the Issuer’s obligations under this Section 4.04 (other than any
obligations, duties or undertakings of the Issuer that, by their nature, cannot be delegated or assigned).
Section 4.05. (Intentionally Omitted).
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 Section 4.06. No Disposition of Trust Estate, Project or Project Revenues. Except as permitted (e) The Issuer will not take any action that would result in all or any portion of the Tax-Exempt
by this Indenture (including specifically in connection with the discharge of the lien of this Indenture in Bonds being treated as federally guaranteed within the meaning of section 149(b)(2) of the Code.
accordance with Article VII hereof or the Mortgages), the Issuer shall not sell, lease, pledge, assign or
(f) For purposes of this Section 4.09, the Issuer’s compliance shall be based solely on acts or
otherwise encumber or dispose of its interest in the Trust Estate. Except as described in the Loan Agreement
omissions by the Issuer known by the Issuer to be taken or omitted to be taken by the Issuer, and no acts,
and the Mortgages, the Issuer will not, and will not permit the Borrower to, sell, lease, pledge, assign or
omissions or directions of the Borrower, the Trustee or any other Persons shall be attributed to the Issuer.
otherwise encumber or dispose of the Project or Project Revenues.
(g) All officers, employees and agents of the Issuer are authorized and directed to provide
Section 4.07. Access to Books. All books and documents in the possession of the Issuer or the
certifications of facts and estimates that are material to the reasonable expectations of the Issuer as of the
Trustee relating to the Project, the Project Revenues and the Trust Estate shall at all reasonable times be
date of delivery of the Bonds. In complying with the foregoing covenants, the Issuer may rely from time to
open to inspection by the Trustee, the Issuer, the Borrower and the Owners of at least $1,000,000 of the
time upon Favorable Opinion of Bond Counsel.
Bonds to the extent permitted by applicable privacy, confidentiality and other legal requirements.
(h) Notwithstanding any provision of this Indenture or the Loan Agreement to the contrary,
Section 4.08. Trustee to Retain Information. So long as any of the Bonds shall be Outstanding,
the Trustee shall not be liable or responsible for any calculation or determination that may be required in
the Trustee shall retain all certificates, requisitions, financial statements and other written information
connection with or for the purpose of complying with section 148 or any applicable Regulation (the
furnished to it by or on behalf of the Borrower or any other person under the Loan Agreement and any other
“Arbitrage Rules”), including, without limitation, the calculation of amounts required to be paid to the
agreement or instrument pertaining to the Bonds and shall make such documentation available to the Issuer,
United States under the provisions of the Arbitrage Rules, the maximum amount that may be invested in
the Borrower, the Rating Agencies, or any Owner for review after reasonable written notice during regular
“nonpurpose obligations” as defined in the Code and the fair market value of any investment made under
business hours at the Designated Office of the Trustee. The Trustee shall permit such reviewers to take
this Indenture, it being understood and agreed that the sole obligation of the Trustee with respect to
copies of all or any part of such documentation, subject to their payment of such copying and handling
investments of funds hereunder shall be to invest the money received by the Trustee pursuant to the written
charges as the Trustee may impose.
instructions of the Borrower given in accordance with the provisions of this Indenture. The Trustee shall
Section 4.09. Tax Covenants Relating to the Tax-Exempt Bonds. have no responsibility for determining whether or not the investment made pursuant to the written direction
of the Borrower or any of the instructions received by the Trustee under this Indenture comply with the
(a) To the extent of its control, the Issuer covenants and agrees that until the final maturity of
requirements of the Arbitrage Rules and shall have no responsibility for monitoring the obligations of the
the Tax-Exempt Bonds, based upon the Borrower’s covenants in Section 2.8 of the Loan Agreement, it will
Borrower or the Issuer for compliance with the provisions of this Indenture with respect to the Arbitrage
not use any money on deposit in any fund or account maintained in connection with the Tax-Exempt Bonds,
Rules.
whether or not such money was derived from the proceeds of the sale of the Tax-Exempt Bonds or from
any other source, in a manner that would cause the Tax-Exempt Bonds to be “arbitrage bonds,” within the (i) Notwithstanding anything contained in this Indenture, or in any other instrument to the
meaning of section 148 of the Code. In the event the Borrower notifies the Issuer that it is necessary to contrary, the Trustee shall not be under any duty to evaluate, verify or otherwise independently confirm the
restrict or limit the yield on the investment of money held by the Trustee pursuant to this Indenture, or to compliance of any instruction it receives from the Borrower, the Issuer, Bond Counsel or any rebate analyst
use such money in any certain manner to avoid the Tax-Exempt Bonds being considered “arbitrage bonds,” for compliance with the requirements of sections 103(a) or 148 of the Code or any applicable provisions of
the Issuer at the direction of the Borrower shall deliver to the Trustee an order containing appropriate this Indenture.
instructions, including without limitation the yield restrictions on such investments, in which event the
Trustee shall take such action as is necessary to restrict or limit the yield on such investment or to use such
money in accordance with such order.
(b) The Issuer will not use or permit to the extent of its control the use of any proceeds of the
Tax-Exempt Bonds or any other funds of the Issuer, directly or indirectly, in any manner, and shall not take
or permit to be taken to the extent of its control any other action or actions, which would result in any of
the Tax-Exempt Bonds being treated other than as an obligation described in section 103(a) of the Code.
(c) The Issuer will not use any portion of the proceeds of the Tax-Exempt Bonds, including
any investment income earned on such proceeds, directly or indirectly, to make or finance loans to persons
who are not “exempt persons.” For purposes of the preceding sentence, a loan to an organization described
in section 501(c)(3) of the Code for use with respect to an unrelated trade or business, determined according
to section 513(a) of the Code, constitutes a loan to a person who is not an “exempt person.”
(d) The Issuer will not take any action or omit to take any action that will adversely affect the
exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds, and in
the event of such action or omission will promptly, upon receiving knowledge thereof, take all lawful
actions, based on advice of Bond Counsel and at the expense of the Borrower, as may rescind or otherwise
negate such action or omission.

41 42

ARTICLE V. (b) On the Closing Date for the Series 2017 Bonds, amounts on deposit in the Project Account
of the Project Fund shall be applied to payment of the costs of acquiring the Project, including but not
DEPOSIT OF BOND PROCEEDS; FUNDS AND ACCOUNTS; REVENUES limited to the purchase price of the facilities comprising the Project, as shown on the closing statement for
the Bonds, without formal requisition. Thereafter, amounts on deposit in the Project Account of the Project
Section 5.01. Creation of Funds and Accounts. There are hereby created by the Issuer and
Fund shall be applied to payment of capital expenditures and startup expenses of the Project in accordance
ordered established the following Funds and Accounts to be held by the Trustee:
with one or more requisitions of the Borrower to the Trustee signed by a Borrower Representative in the
(a) A Senior Bonds Bond Fund and therein a Principal Account, an Interest Account and a form set forth as Exhibit B to the Loan Agreement.
Special Redemption Account with respect to the Senior Bonds;
(c) Net Proceeds of any Insurance Proceeds or Condemnation Awards deposited in the Project
(b) (Reserved); Fund pursuant to Section 5.3 or 5.4 of the Loan Agreement shall be applied as provided in Section 5.3 and
(c) A Second Tier Bonds Bond Fund and therein a Principal Account, an Interest Account and 5.4 of the Loan Agreement.
a Special Redemption Account with respect to the Second Tier Bonds; (d) Any amounts remaining in the Project Account of the Project Fund on the date that is three
(d) A Second Tier Bonds Debt Service Reserve Fund; years after the Closing Date (in the case of original and investment proceeds of the Series 2017 Bonds, or
the date of deposit of such amounts into the Project Fund, in the case of other amounts) shall be deposited
(e) (Reserved); in the Revenue Fund unless otherwise required by the Loan Agreement, and the Project Fund shall be
(f) (Reserved); closed.

(g) (Reserved); Section 5.04. Revenue Fund.

(h) (Reserved); (a) There shall be deposited in the Revenue Fund (i) all Loan Payments and other amounts
paid to the Trustee under the Loan Agreement (other than prepayments required to redeem Bonds pursuant
(i) A Project Fund and therein a Project Account and a Costs of Issuance Account; to Sections 3.01, 3.02, 3.12, 3.13 or 3.14 hereof, which shall be deposited in the related Special Redemption
(j) A Revenue Fund; Account), (ii) all other amounts required to be so deposited pursuant to the terms hereof, including
investment earnings to the extent provided in Article VI, (iii) any amounts derived from the Loan
(k) A Rebate Fund; Agreement or the Mortgages to be applied to payment of amounts intended to be paid from the Revenue
(l) An Operating Fund; Fund, (iv) all Project Revenues, (v) any amounts transferred from the Property Tax Account of the Insurance
and Tax Escrow Fund pursuant to Section 5.16(c) hereof, and (vi) such other money as delivered to the
(m) An Operations and Maintenance Reserve Fund; Trustee by or on behalf of the Issuer or the Borrower with directions for deposit of such money in the
(n) An Insurance and Tax Escrow Fund and therein a Property Tax Account; Revenue Fund.
(o) A Repair and Replacement Fund; (b) Money on deposit in the Revenue Fund shall be disbursed on the 15th day of each month
in the following order of priority:
(p) A Surplus Fund; and
(1) To the Interest Account in the Senior Bonds Bond Fund, an amount equal
(q) An Administration Fund. to the applicable Interest Requirement for the Senior Bonds for such calendar month,
together with an amount equal to any unfunded Interest Requirement for the Senior Bonds
Section 5.02. Deposit and Use of Proceeds. Upon initial execution and delivery of the Series from any prior month;
2017 Bonds, the proceeds of the Series 2017 Bonds shall be deposited as described in and required by the
request and authorization of the Issuer delivered to the Trustee pursuant to Section 2.07(c) hereof. The (2) To the Principal Account in the Senior Bonds Bond Fund, an amount equal
Issuer hereby acknowledges and directs the Trustee to follow disbursement requests from the Borrower or to the applicable Principal Requirement for the Senior Bonds for such calendar month,
Borrower Representative without further consent from the Issuer. together with an amount equal to any unfunded Principal Requirement for the Senior Bonds
from any prior month;
Section 5.03. Disbursements from the Project Fund.
(3) (Reserved);
(a) On the Closing Date for the Series 2017 Bonds, amounts on deposit in the Costs of Issuance
Account shall be applied to payment of Costs of Issuance as shown on the closing statement for the Bonds (4) To the Interest Account in the Second Tier Bonds Bond Fund, an amount
without formal requisition. Thereafter, the Trustee shall disburse money in the Costs of Issuance Account equal to the applicable Interest Requirement for the Second Tier Bonds for such calendar
in the Project Fund to pay the Costs of Issuance upon receipt of a written requisition of the Borrower to the month, together with an amount equal to any unfunded Interest Requirement for the Second
Trustee signed by a Borrower Representative that states (i) that such amount is to be paid to persons, firms Tier Bonds from any prior month;
or corporations identified therein, and (ii) that such amount is properly payable as a Cost of Issuance (5) To the Principal Account in the Second Tier Bonds Bond Fund, an amount
hereunder. On the date that is six months after the Closing Date, the Trustee shall transfer any remaining equal to the applicable Principal Requirement for the Second Tier Bonds for such calendar
balance in the Costs of Issuance Account to the Operating Fund, and the Cost of Issuance Account shall be month, together with an amount equal to any unfunded Principal Requirement for the
closed. Second Tier Bonds from any prior month;

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 (6) To the Second Tier Bonds Debt Service Reserve Fund, the amount, if any, (21) To the Surplus Fund, all remaining amounts in the Revenue Fund.
required to be paid into the Second Tier Bonds Debt Service Reserve Fund pursuant to
In the event that, for any month, there are insufficient funds in the Revenue Fund to fund any one
Section 3.2(b)(ii) of the Loan Agreement to restore the amount on deposit therein to the
or more of the uses set forth in clauses (1) through (20) above, the amount not funded in such month due to
Second Tier Bonds Debt Service Reserve Fund Requirement; provided that if any
such insufficiency of revenues shall be added to the amount to be funded in subsequent months under the
deficiency in the Second Tier Bonds Debt Service Reserve Fund is the result of a
same clause until such amount has been in fact funded. Failure to deposit sufficient Project Revenues to
redemption of the Second Tier Bonds pursuant to Section 3.14 hereof with amounts on
make the deposits described above shall not, in itself, constitute an Event of Default hereunder.
deposit in the Second Tier Bonds Debt Service Reserve Fund, then the amount to be
transferred from the Revenue Fund to the Second Tier Bonds Debt Service Reserve Fund Provided, however, the payments under (19) above shall not be made unless and until (i) a report
in any month shall be limited to 1/24 of the amount withdrawn from the Second Tier Bonds is delivered pursuant to Section 6.9(a)(i)(B) of the Loan Agreement showing that the Coverage Test and
Debt Service Reserve Fund and used for such redemption; the Liquidity Requirement have been met and (ii) a Borrower Representative has provided a certificate to
the Trustee to the effect that no Event of Default under this Indenture or event of default, as defined therein,
(7) (Reserved);
under any Borrower Document has then occurred and is continuing. Notwithstanding the foregoing
(8) (Reserved); sentence, any Deferred Management Fee and any interest due thereon, shall be paid no later than the end
of five years from the original due date of such fee regardless of satisfaction of the Coverage Test or the
(9) (Reserved);
Liquidity Requirement (which amount shall be listed in the Budget delivered to the Trustee and paid in
(10) (Reserved); accordance with the clauses set forth above), unless there is a Favorable Opinion of Bond Counsel delivered
(11) (Reserved); regarding the failure to pay such Deferred Management Fee and the interest due thereon at such time.

(12) (Reserved); Section 5.05. Senior Bonds Bond Fund.

(13) Subject to Section 5.16 hereof, for transfer to the Insurance and Tax (a) There shall be deposited into the Principal Account of the Senior Bonds Bond Fund (i)
Escrow Fund, and, with respect to the annual real estate taxes, the Property Tax Account money transferred to such Principal Account from the Revenue Fund pursuant to Section 5.04 hereof; (ii)
therein, an amount equal to one-twelfth of the amount budgeted by the Borrower for the money transferred from the Surplus Fund, the Operations and Maintenance Reserve Fund, the Repair and
current year for annual premiums for insurance required to be maintained pursuant to the Replacement Fund and the Operating Fund pursuant to Section 5.05(f) hereof in respect of principal payable
Loan Agreement and for annual real estate taxes, or other Impositions or charges for on the Senior Bonds, and (iii) any other amounts deposited with the Trustee with directions from the
governmental services for the current year, as provided in the Budget; Borrower to deposit the same in the Principal Account of the Senior Bonds Bond Fund.

(14) To the Operating Fund, an amount equal to the Budgeted Operating (b) There shall be deposited into the Interest Account of the Senior Bonds Bond Fund (i) all
Requirement (less any amounts then on deposit in the Operating Fund and any amounts to accrued interest, if any, on the sale and delivery of the Senior Bonds, (ii) money transferred to such Interest
be paid to the Manager pursuant to clauses (19) and (20) below), together with such Account from the Revenue Fund pursuant to Section 5.04 hereof; (iii) money transferred from the Surplus
additional Operating Expenses (except any Interest Requirement) requested in writing by Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund and the Operating
a Borrower Representative from the Operations and Maintenance Reserve Fund or the Fund pursuant to Section 5.05(f) hereof in respect of interest payable on the Senior Bonds, and (iv) any
Surplus Fund pursuant to and after satisfaction of the conditions specified in Section 4.3 of other amounts deposited with the Trustee with directions from the Borrower to deposit the same in the
the Loan Agreement; Interest Account of the Senior Bonds Bond Fund.

(15) Subject to the provisions of Section 5.17 hereof, for transfer to the Repair (c) There shall be deposited in the Special Redemption Account of the Senior Bonds Bond
and Replacement Fund, commencing with the month of January 2018, an amount equal to Fund (i) any Net Proceeds of Insurance Proceeds or Condemnation Awards to be transferred to a Special
one-twelfth of the Replacement Reserve Amount; Redemption Account pursuant to Section 5.23 hereof, and (ii) all other payments made by or on behalf of
the Issuer with respect to the redemption of Senior Bonds pursuant to Sections 3.01, 3.02, 3.12, 3.13 or 3.14
(16) Subject to the provisions of Section 5.18 hereof, for transfer to the hereof. Amounts on deposit in the Special Redemption Account shall be used to pay the redemption price
Administration Fund, an amount equal to one-sixth of the Administration Expenses (other of Senior Bonds being redeemed.
than the Rebate Analyst Fee) scheduled to be due and payable on or before the next
succeeding Interest Payment Date; (d) Except as otherwise provided herein, money in the Principal Account of the Senior Bonds
Bond Fund shall be used for the payment of principal of the Senior Bonds as the same shall become due
(17) To the Administration Fund, the amount of any Rebate Analyst Fee then and payable on any Principal Payment Date, including a Principal Payment Date resulting from the
due; redemption of the Senior Bonds pursuant to Section 3.03 hereof.
(18) To the Rebate Fund, to the extent of any deposit required to be made (e) Except as otherwise provided herein, money in the Interest Account of the Senior Bonds
thereto pursuant to the Loan Agreement; Bond Fund shall be used for the payment of interest on the Senior Bonds as the same becomes due and
(19) To the Manager, any Deferred Management Fee, including any interest payable on any Bond Payment Date.
due thereon, in the order that such amount was deferred; (f) If on any Bond Payment Date the amount on deposit in the Interest Account or the Principal
(20) To the Manager, the Management Fee other than any Deferred Account of the Senior Bonds Bond Fund is insufficient to make the payments or deposits described in (a)
Management Fee and paid monthly in accordance with the Budget; and
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or (b) above, the Trustee shall, to the extent available, make up any such shortfall by transferring amounts Tier Bonds Debt Service Reserve Fund, any payment required under Section 5.05(f) shall be made prior to
from the following Funds in the following order: any payment made under this Section 5.07(f):
(1) the Surplus Fund; (1) the Surplus Fund;
(2) the Operations and Maintenance Reserve Fund; (2) the Operations and Maintenance Reserve Fund;
(3) the Repair and Replacement Fund; and (3) the Repair and Replacement Fund;
(4) the Operating Fund. (4) the Second Tier Bonds Debt Service Reserve Fund; and
(g) Any balance in the Principal Account and the Interest Account of the Senior Bonds Bond (5) the Operating Fund.
Fund on each Bond Payment Date after making the payments required pursuant to clauses (d) and (e),
(g) Any balance in the Principal Account and the Interest Account of the Second Tier Bonds
respectively, above in this Section 5.05 shall be transferred to the Revenue Fund.
Bond Fund on each Bond Payment Date after making the payments required pursuant to clauses (d) and
Section 5.06. (Intentionally Omitted). (e), respectively, above in this Section 5.07 shall be transferred to the Revenue Fund.
Section 5.07. Second Tier Bonds Bond Fund. Section 5.08. Second Tier Bonds Debt Service Reserve Fund,
(a) There shall be deposited in the Second Tier Bonds Debt Service Reserve Fund (i) all money
(a) There shall be deposited into the Principal Account of the Second Tier Bonds Bond Fund
transferred to the Second Tier Bonds Debt Service Reserve Fund pursuant to Section 5.02 hereof, (ii) money
(i) money transferred to such Principal Account from the Revenue Fund pursuant to Section 5.04 hereof;
transferred from the Revenue Fund pursuant to Section 5.04 hereof, and (iii) any other money received by
(ii) money transferred from the Surplus Fund, the Operations and Maintenance Reserve Fund, the Repair
the Trustee with directions from the Borrower to deposit the same in the Second Tier Bonds Debt Service
and Replacement Fund, the Second Tier Bonds Debt Service Reserve Fund and the Operating Fund
Reserve Fund.
pursuant to Section 5.07(f) hereof in respect of principal payable on the Second Tier Bonds, and (iii) any
other amounts deposited with the Trustee with directions from the Borrower to deposit the same in the (b) Amounts on deposit in the Second Tier Bonds Debt Service Reserve Fund shall be used to
Principal Account of the Second Tier Bonds Bond Fund. make the payments required pursuant to Section 5.04(b)(4) and (5) after the transfer of any amounts from
the Surplus Fund, the Operations and Maintenance Reserve Fund and the Repair and Replacement Fund
(b) There shall be deposited into the Interest Account of the Second Tier Bonds Bond Fund (i)
pursuant to Section 5.07(f) hereof, if the amounts on deposit in the Revenue Fund are insufficient therefor.
all accrued interest, if any, on the sale and delivery of the Second Tier Bonds, (ii) money transferred to such
Interest Account from the Revenue Fund pursuant to Section 5.04 hereof; (iii) money transferred from the (c) Amounts on deposit in the Second Tier Bonds Debt Service Reserve Fund shall be
Surplus Fund, the Operations and Maintenance Reserve Fund, the Repair and Replacement Fund, the transferred to the Principal Account of the Second Tier Bonds Bond Fund at the direction of a Borrower
Second Tier Bonds Debt Service Reserve Fund and the Operating Fund pursuant to Section 5.07(f) hereof Representative for the purpose of paying the last maturing principal of the Second Tier Bonds on a Principal
in respect of interest payable on the Second Tier Bonds, and (iv) any other amounts deposited with the Payment Date or, if all the Second Tier Bonds are being redeemed, to the Special Redemption Account of
Trustee with directions from the Borrower to deposit the same in the Interest Account of the Second Tier the Second Tier Bonds Bond Fund for redemption of Second Tier Bonds.
Bonds Bond Fund. (d) If the Second Tier Bonds Debt Service Reserve Fund Requirement is reduced or eliminated
(c) There shall be deposited in the Special Redemption Account of the Second Tier Bonds in accordance with the definition thereof, the amounts on deposit in the Second Tier Bonds Debt Service
Bond Fund (i) any Net Proceeds of Insurance Proceeds or Condemnation Awards to be transferred to a Reserve Fund in excess of the Second Tier Bonds Debt Service Reserve Fund Requirement shall, at the
Special Redemption Account pursuant to Section 5.23 hereof, and (ii) all other payments made by or on written direction of a Borrower Representative delivered to the Trustee, be either (i) transferred to the
behalf of the Issuer with respect to the redemption of Second Tier Bonds pursuant to Sections 3.01, 3.02, Special Redemption Account of the Second Tier Bonds Bond Fund to be used to redeem Second Tier Bonds
3.12, 3.13 or 3.14 hereof. Amounts on deposit in the Special Redemption Account shall be used to pay pursuant to Section 3.02 hereof, (ii) transferred to the Principal or Interest Account of the Second Tier
the redemption price of Second Tier Bonds being redeemed. Bonds Bond Fund to pay the principal of and/or interest on the Second Tier Bonds as it becomes due, or
(iii) if no Second Tier Bonds remain Outstanding, either transferred to the Revenue Fund and applied as
(d) Except as otherwise provided herein, money in the Principal Account of the Second Tier
provided in Section 5.04 hereof, or used for any other purpose directed in writing by a Borrower
Bonds Bond Fund shall be used for the payment of principal of the Second Tier Bonds as the same shall
Representative, which, as set forth in a Favorable Opinion of Bond Counsel delivered to the Issuer and the
become due and payable on any Principal Payment Date, including a Principal Payment Date resulting from
Trustee, complies with the Act and will not adversely affect the exclusion from gross income of the owners
the redemption of the Second Tier Bonds pursuant to Section 3.03 hereof.
thereof of the interest on the Tax-Exempt Bonds for federal income tax purposes.
(e) Except as otherwise provided herein, money in the Interest Account of the Second Tier
(e) All interest income derived from the investment of amounts on deposit in the Second Tier
Bonds Bond Fund shall be used for the payment of interest on the Second Tier Bonds as the same becomes
Bonds Debt Service Reserve Fund shall be retained in the Second Tier Bonds Debt Service Reserve Fund
due and payable on any Bond Payment Date.
until the amount on deposit therein shall be equal to the Second Tier Bonds Debt Service Reserve Fund
(f) If on any Bond Payment Date the amount on deposit in the Interest Account or the Principal Requirement, and thereafter shall be deposited into the Revenue Fund.
Account of the Second Tier Bonds Bond Fund is insufficient to make the payments or deposits described
Section 5.09. (Intentionally Omitted).
in (a) or (b) above, the Trustee shall, to the extent available, make up any such shortfall by transferring
amounts from the following Funds in the following order, provided that except for payment from the Second Section 5.10. (Intentionally Omitted).

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 Section 5.11. (Intentionally Omitted). Operating Fund shall be used to pay shortfalls in the Interest Accounts and Principal Accounts of the
applicable Bond Funds in accordance with Sections 5.05(f), 5.07(f), 5.09(f) and 5.11(f) hereof.
Section 5.12. (Intentionally Omitted).
Section 5.15. Operations and Maintenance Reserve Fund.
Section 5.13. Rebate Fund.
(a) The Trustee shall deposit in the Operations and Maintenance Reserve Fund (i) money
(a) The Trustee shall deposit or transfer to the credit of the Rebate Fund each amount delivered
transferred from the Surplus Fund in the amounts and on the dates described in Section 5.19 hereof and (ii)
to the Trustee by the Borrower for deposit thereto and each amount directed by a Borrower Representative
any other amounts required to be deposited into the Operations and Maintenance Reserve Fund hereunder
on behalf of the Borrower in writing to be transferred thereto.
or under the Loan Agreement and delivered to the Trustee with instructions to deposit the same therein.
(b) Within five days after each receipt or transfer of funds to the Rebate Fund in accordance
(b) Amounts on deposit in the Operations and Maintenance Reserve Fund shall be used to pay
with Section 2.8(q)(i) of the Loan Agreement, the Trustee shall withdraw from the Rebate Fund and pay to
(i) maintenance and repair costs to the Project that are not capital expenditures payable from the Repair and
the United States of America the balance of the Rebate Fund.
Replacement Fund, (ii) Operating Expenses in excess of Budgeted Operating Requirements, (iii) certain
(c) All payments to the United States of America pursuant to this Section 5.13 shall be made costs of repair and replacement in accordance with Section 5.17(b) hereof and (iv) shortfalls in the Interest
by the Trustee for the account and in the name of the Issuer and shall be paid by check posted by registered Accounts and Principal Accounts of the Bond Fund in accordance with Sections 5.05(f), 5.07(f), 5.09(f)
United States Mail (return receipt requested), addressed to the Internal Revenue Service Center designated and 5.11(f) hereof. Except when transfers from the Operating Fund to the Operating Account are not
in writing at such time by the Borrower (accompanied by the relevant Internal Revenue Service Form permitted pursuant to Section 5.14 hereof, the Trustee shall disburse money in the Operations and
8038-T described in Section 2.8(q)(i)(3) of the Loan Agreement, if such payment is described in (q)(i) of Maintenance Reserve Fund to the Operating Account to pay such maintenance and repair costs and
the Loan Agreement, and by the relevant Internal Revenue Service Form 8038-T and written explanation Operating Expenses upon receipt of a written direction of a Borrower Representative that states the purpose
of the Borrower delivered to the Trustee described in Section 2.8(r) of the Loan Agreement, if such payment for such disbursement and the persons to which such amounts are to be paid, and when transfers from the
is described in Section 2.8(r) of the Loan Agreement). Operating Fund to the Operating Account are not permitted pursuant to Section 5.14 hereof the Trustee
(d) The Trustee shall preserve all statements, forms, and explanations received from the may disburse such money directly to pay such costs and expenses. All interest income derived from the
Borrower pursuant to Section 2.8(q) of the Loan Agreement and all records of transactions in the Rebate investment of amounts on deposit in the Operations and Maintenance Reserve Fund shall be retained in the
Fund until three years after the retirement of all of the Bonds. Operations and Maintenance Reserve Fund until the amount on deposit therein shall be equal to the
Operations and Maintenance Reserve Requirement, and thereafter shall be deposited into the Revenue
(e) The Trustee may conclusively rely on the instructions of the Borrower with regard to any Fund.
actions to be taken by it pursuant to this Section 5.13 and shall have no liability for any consequences of
any failure of the Borrower to perform its duties or obligations or to supply accurate or sufficient Section 5.16. Insurance and Tax Escrow Fund.
instructions. Except as provided in subsections (b) and (c) above, the Trustee shall have no duty or (a) The Trustee shall deposit in the Insurance and Tax Escrow Fund (i) money transferred from
responsibility with respect to the Rebate Fund or the Borrower’s duties and responsibilities with respect the Revenue Fund in the amounts and on the dates described in Section 5.04 hereof and (ii) any other
thereto except to follow the Borrower’s specific written instruction related thereto. amounts required to be deposited into the Insurance and Tax Escrow Fund hereunder or under the Loan
(f) If at any time during the term of this Indenture the Issuer, the Trustee, or the Borrower Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein.
desires to take any action that would otherwise be prohibited by the terms of this Section 5.13, such Person Money on deposit in the Insurance and Tax Escrow Fund shall be disbursed by the Trustee to the Borrower
shall be permitted to take such action if it shall first obtain and provide to the other Persons named herein to pay, or as reimbursement for the payment of, Impositions, taxes, assessments and insurance premiums
a Favorable Opinion of Bond Counsel and an opinion of Bond Counsel to the effect that such action shall with respect to the Project, as hereinafter provided; provided that amounts on deposit in the Property Tax
be in compliance with the laws of the State of Oklahoma and the terms hereof. Account shall be used and transferred as set forth in subsection (c) of this Section 5.16. On an annual
basis, excess amounts in the Insurance and Tax Escrow Fund may be disbursed to the Revenue Fund if
Section 5.14. Operating Fund. The Trustee shall deposit in the Operating Fund (i) money actual costs are below budgeted amounts upon the written direction of a Borrower Representative on behalf
transferred from the Revenue Fund in the amounts and on the dates described in Section 5.04 hereof, (ii) of the Borrower.
any transfers from the Operating Account received by the Trustee for deposit in the Operating Fund and
(iii) any other amounts required to be deposited into the Operating Fund hereunder or under the Loan (b) Upon presentation to the Trustee of a requisition signed by a Borrower Representative, the
Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein. Trustee will, not more frequently than once a month, pay to the Borrower to provide for the payment of, or
Except when an Event of Default under Section 8.01(a) or 8.01(b) of this Indenture or a Default under the as reimbursement for the payment of, such taxes, assessments, and premiums, from money then on deposit
Loan Agreement has occurred and is continuing, the Trustee shall transfer amounts deposited in the in the Insurance and Tax Escrow Fund. If the total amount on deposit in the Insurance and Tax Escrow
Operating Fund to the Operating Account promptly following such deposits. If an Event of Default under Fund shall not be sufficient to pay directly or to pay or reimburse the Borrower in full for the payment of
this Indenture has occurred and is continuing, the Trustee may, in its sole discretion, and shall, if so directed such taxes, assessments, premiums or other Impositions, then the Borrower shall pay the excess amount of
by the Controlling Owners in accordance with Section 8.09 hereof, not make such transfers to the Operating such taxes, assessments, and premiums from the Surplus Fund.
Account, in which case (i) the Borrower will not be entitled to request withdrawals from funds on deposit (c) Upon presentation to the Trustee of a requisition signed by a Borrower Representative, the
in the Operating Fund, and (ii) the Trustee may determine to pay Operating Expenses of the Project directly, Trustee shall pay to the Borrower to provide for the payment of such property taxes from money then on
without receipt of direction from a Borrower Representative and in such event is to rely on the annual deposit in the Property Tax Account. If the total amount on deposit in the Property Tax Account is not
Budget prepared by the Borrower in connection with the Project. In addition, amounts on deposit in the sufficient to pay directly or to pay or reimburse the Borrower in full for the payment of such property taxes,
then the Borrower shall pay the excess amount of such property taxes from the Surplus Fund. Upon the
49 50

delivery to the Trustee of a certificate of a Borrower Representative stating that the Project has received a (i) transferred to the Interest Account for the Senior Bonds to pay interest on the
full or partial exemption from property taxation from the applicable taxing authority, together with evidence Senior Bonds to the extent amounts on deposit in such Interest Account are insufficient therefor;
of such exemption, the amount then on deposit in the Property Tax Account (or such pro rata amount that
(ii) transferred to the Principal Account for the Senior Bonds to pay principal on the
is proportional to the exemption granted to the Project if a partial exemption from property taxation is
Senior Bonds to the extent amounts on deposit in such Principal Account are insufficient therefor;
granted) shall be transferred by the Trustee to the Revenue Fund for application in accordance with Section
5.04 hereof. On the date that all amounts have been expended or transferred from the Property Tax (iii) transferred to the Interest Account for the Second Tier Bonds to pay interest on the
Account, the Property Tax Account shall be closed. Second Tier Bonds to the extent amounts on deposit in such Interest Account are insufficient
therefor;
Section 5.17. Repair and Replacement Fund.
(iv) transferred to the Principal Account for the Second Tier Bonds to pay principal on
(a) The Trustee shall deposit into the Repair and Replacement Fund (i) money transferred from
the Second Tier Bonds to the extent amounts on deposit in such Principal Account are insufficient
the Revenue Fund in the amounts and on the dates described in Section 5.04 hereof and (ii) any other
therefor;
amounts required to be deposited into the Repair and Replacement Fund hereunder or under the Loan
Agreement or the Mortgages and delivered to the Trustee with instructions to deposit the same therein. The (v) (Reserved);
Trustee shall apply money on deposit in the Repair and Replacement Fund upon request of a Borrower (vi) (Reserved);
Representative, but no more frequently than once a month, to pay to or to reimburse the Borrower for paying
the cost of replacements or items of extraordinary maintenance or repair that may be required to keep the (vii) (Reserved);
Project in sound condition, including but not limited to, replacement of appliances, major floor covering (viii) (Reserved);
replacement, replacement or repair of any roof or other structural component of the Project, maintenance
(including painting) to exterior surfaces and major repairs to or replacements of heating, air conditioning, (ix) transferred to the Revenue Fund to the extent of any deficiency in the amounts
plumbing and electrical systems, landscaping, storm water drainage, repairs to common area amenities and needed to fully make all transfers from the Revenue Fund pursuant to Section 5.04 hereof (other
any other extraordinary costs required for the repair or replacement of the Project not properly payable from than to the Surplus Fund);
the Revenue Fund or the Operations and Maintenance Reserve Fund but in any case only if there are no (x) transferred to the Borrower upon the direction of a Borrower Representative for
funds available in the Project Fund for such purpose. deposit into the Operating Account for the payment of Operating Expenses when a Borrower
(b) Upon presentation to the Trustee of a requisition signed by a Borrower Representative Representative certifies to the Trustee, on behalf of the Borrower, that there are not sufficient
accompanied by a summary of the amount for which payment or reimbursement is sought, the Trustee will moneys in the Operating Fund or Operating Account to pay Operating Expenses;
pay to the Borrower the amount of such repair and replacement costs from money then on deposit in the (xi) paid to the Trustee an amount equal to any unpaid Extraordinary Trustee’s Fees
Repair and Replacement Fund, provided no Event of Default shall then exist hereunder. If the total amount and Expenses then due;
on deposit in the Repair and Replacement Fund shall not be sufficient to pay all of such repair and
replacement costs when they shall become due, then funds in the Operations and Maintenance Reserve (xii) transferred to the Borrower or upon the direction of a Borrower Representative, on
Fund may be disbursed until exhausted, and then the Borrower shall pay the excess amount of such costs behalf of the Borrower, to pay taxes, assessments and premiums as set forth in Section 5.16(b) or
directly (which Borrower monies may be reimbursed from monies available in the Repair and Replacement (c) hereto.
Fund at a later date when they become available). (xiii) transferred to the Operations and Maintenance Reserve Fund an amount sufficient
(c) The Repair and Replacement Fund will also be used to remedy any deficiency in any Bond to establish in such Fund or restore such Fund to the Operations and Maintenance Reserve
Fund on any Interest Payment Date after exhaustion of the Surplus Fund and the Operations and Requirement; and
Maintenance Reserve Fund, without any prior consents, as provided in Sections 5.05(f), 5.07(f), 5.09(f) and (xiv) transferred to the Manager, any Deferred Management Fee then owing and any
5.11(f) hereof. interest due thereon, provided, however, such payments under this clause (xiv) shall not be made
Section 5.18. Administration Fund. The Trustee shall deposit in the Administration Fund (i) unless and until (i) a report is delivered pursuant to Section 6.9(a)(i)(B) of the Loan Agreement
money transferred from the Revenue Fund pursuant to Section 5.04 hereof, and (ii) any other amounts showing that the Coverage Test and the Liquidity Requirement have been met and (ii) a Borrower
required to be deposited in the Administration Fund hereunder or under the Loan Agreement or the Representative has provided a certificate to the Trustee to the effect that no Event of Default under
Mortgages with instructions to deposit the same therein. The Trustee shall disburse amounts in the this Indenture or event of default, as defined therein, under any Borrower Document has then
Administration Fund necessary for payment of Administration Expenses then due automatically to the occurred and is continuing. Notwithstanding the foregoing requirements with respect to the
parties due such payment upon presentation of an invoice for payment from such requesting party without payments described in this clause (xiv), any Deferred Management Fee, and any interest due
any approval of the Borrower. thereon, shall be paid no later than the end of five years from the original due date of such fee
regardless of satisfaction of the Coverage Test or the Liquidity Requirement (which amount shall
Section 5.19. Surplus Fund. be listed in the Budget delivered to the Trustee and paid in accordance with the clauses set forth
(a) The Trustee shall deposit, into the Surplus Fund, amounts provided in Section 5.04(b)(21) above), unless there is a Favorable Opinion of Bond Counsel delivered regarding the failure to pay
hereof and any other amounts delivered to it with instructions to deposit the same in the Surplus Fund. such Deferred Management Fee and the interest due thereon at such time.
Money in the Surplus Fund shall be applied each month, when needed, for the following purposes and in (b) When, on or after any Annual Evaluation Date, the Trustee receives a certificate signed by
the following manner and priority: a Borrower Representative in the form set forth as Exhibit G to the Loan Agreement stating (i) that an
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Excess Surplus Fund Amount was on deposit in the Surplus Fund as of such Annual Evaluation Date, (ii) the Trustee pursuant to the Loan Agreement shall be deposited by the Trustee in the Project Account of the
the amount, if any, of such Excess Surplus Fund Amount on deposit in the Surplus Fund as of such Annual Project Fund.
Evaluation Date and as of the date of such certificate, (iii) the Borrower has satisfied the Coverage Test (as
(b) At the written direction of the Borrower, the Trustee shall disburse such money in the
shown in a report by a Certified Public Accountant delivered by the Borrower to the Trustee) for the twelve-
Project Fund as provided in Sections 5.3 and 5.4 of the Loan Agreement to enable the Borrower to undertake
month period ending on such Annual Evaluation Date, upon which the Trustee may rely, and (iv) no Event
a restoration of the Project if such restoration is permitted by law; provided that, if the Borrower exercises
of Default, or event which with the passage of time or the giving of notice or both would constitute an Event
or is deemed to exercise its option to apply such money to the payment of the Notes or the conditions of
of Default, has occurred and is continuing, then (A) to the extent that the Repair and Replacement Fund has
Sections 5.3 and 5.4 of the Loan Agreement are not satisfied, or an excess of such money exists after
less than $250,000 on deposit therein on such Annual Evaluation Date, the Trustee shall transfer 25% of
restoration of the Project, such money shall be transferred by the Trustee to the Special Redemption
such Excess Surplus Fund Amount to the Repair and Replacement Fund and (B) any Excess Surplus Fund
Account of each Bond Fund on a pro rata basis among Series based on outstanding principal amount and
Amount remaining after the transfer, if any, to the Repair and Replacement Fund shall be transferred to the
applied to redeem or prepay Bonds pursuant to Article III hereof, in a principal amount equal to the amount
Borrower. All transfers and disbursements made pursuant to this Section 5.19(b) shall be completed within
so transferred or the next lowest Authorized Denomination of the Bonds.
two Business Days of the Trustee’s receipt of the certificate signed by a Borrower Representative.
(c) Title insurance proceeds shall be used to remedy any title defect resulting in the payment
(c) Notwithstanding anything to the contrary herein, the Trustee shall not make any transfers
thereof or deposited in the applicable Bond Fund for use in redeeming Bonds pursuant to Article III hereof.
or disbursements pursuant to Section 5.19(b) hereof unless the Trustee has received the financial reports
and certificates then due as set forth in Section 6.9 of the Loan Agreement. (d) The proceeds of any rental loss, use and occupancy or business interruption insurance shall
be deposited in the Revenue Fund.
(d) (Reserved)
Section 5.20. Bonds Not Presented for Payment. In the event any Bonds shall not be presented
for payment when the principal thereof becomes due on any Bond Payment Date, if money sufficient to
pay such Bonds are held by the Trustee, the Trustee shall segregate and hold such money in trust, without
liability for interest thereon, for the benefit of Owners of such Bonds who shall, except as provided in the
following paragraph, thereafter be restricted exclusively to such funds for the satisfaction of any claim of
whatever nature on their part under this Indenture or relating to said Bonds.
All money deposited with the Trustee for the payment of principal of, premium, if any, or interest
on the Bonds and not claimed for the earlier of (a) two years after they become payable or distributable or
(b) one day less than the applicable escheat laws shall be paid by the Trustee to the Borrower. In such event,
the Trustee and the Issuer shall be relieved of all liability with respect to such money and payment for such
Bonds and the Owner of such Bonds shall look solely to the Borrower for such payment.
Section 5.21. Money Held in Trust. All money required to be deposited with or paid to the
Trustee for deposit into any Fund or Account (other than the Rebate Fund) and all money withdrawn from
a Bond Fund and held by the Trustee shall be held by the Trustee, in trust, and such money (other than
money held pursuant to Section 5.13 hereof) shall, while so held, constitute part of the Trust Estate and be
subject to the lien hereof. Money held in a Bond Fund or Debt Service Reserve Fund shall constitute a
separate trust fund for the Owners of the related Series and shall not constitute property of the Issuer or the
Borrower.
Section 5.22. Payment to the Borrower. After the right, title and interest of the Trustee in and
to the Trust Estate and all covenants, agreements and other obligations of the Issuer to the Owners shall
have ceased, terminated and become void and shall have been satisfied and discharged in accordance with
Article VII hereof, and all fees, expenses and other amounts payable to the Trustee pursuant to any
provision hereof shall have been paid in full, any money remaining in the Funds and Accounts hereunder
shall be paid or transferred to the Borrower upon the written request of a Borrower Representative; provided
that amounts on deposit in the Rebate Fund shall be retained therein to the extent required by Section 5.13
hereof.
Section 5.23. Deposit of Extraordinary Revenues.
(a) Any money representing Net Proceeds of Insurance Proceeds or Condemnation Awards
upon damage to, destruction of or governmental taking of all or a portion of the Project and deposited with

53 54

ARTICLE VI. applicable issue of Tax-Exempt Bonds or such investments shall consist solely of tax-exempt bonds within
the meaning of section 148(b)(3) of the Code.
INVESTMENTS
Money in all Funds and Accounts established hereunder shall, at the written direction of a Borrower
Representative at least two Business Days before the making of such investment (any oral direction to be
promptly confirmed in writing), be invested and reinvested by the Trustee in Investment Securities. Subject
to the further provisions of this Article, such investments shall be made by the Trustee as directed and
designated by the Borrower Representative in a certificate of, or telephonic advice promptly confirmed by
a certificate of a Borrower Representative. As long as no Event of Default shall have occurred and be
continuing, the Borrower shall have the right to designate the investments to be sold and otherwise to direct
the Trustee in the sale or conversion to cash of the investments made with the money in any Fund or
Account. In the absence of the receipt of such written instructions from the Borrower Representative, the
Trustee is directed to invest and re-invest such moneys in Investment Securities of the type described in
clause (3) of the definition thereof. The Borrower will not direct that any investment be made of any funds
that would violate the covenants set forth in Section 2.8 of the Loan Agreement. Unless otherwise
confirmed in writing, an account statement delivered by the Trustee to the Borrower shall be deemed written
confirmation by the Borrower that the investment transactions identified therein accurately reflect the
investment directions given to the Trustee by the Borrower, unless a Borrower Representative notifies the
Trustee in writing to the contrary within 30 days after the date of such statement.
Money in any Fund or Account shall be invested in Investment Securities with respect to which
payments of principal thereof and interest thereon are scheduled to be paid or are otherwise payable
(including Investment Securities payable at the option of the holder) not later than the earlier of (a) the date
on which it is estimated that such money will be required by the Trustee, or (b) six months after the date of
acquisition thereof by the Trustee.
The Trustee may make any and all such investments through its own banking department or the
banking department of any affiliate. All income attributable to money deposited in any Fund or Account
created hereunder shall be credited to the Revenue Fund, except that income on money (a) in the Project
Fund shall be credited to the Project Fund, (b) in the Rebate Fund shall be credited to the Rebate Fund, (c)
in a Debt Service Reserve Fund shall be credited to such Debt Service Reserve Fund to the extent provided
herein and (d) in the Operations and Maintenance Reserve Fund shall be credited to the Operations and
Maintenance Reserve Fund to the extent provided in Section 5.15 hereof. Any net loss realized and
resulting from any such investment shall be charged to the particular fund or account for whose account
such investment was made. The Trustee is authorized and directed to sell and reduce to cash funds a
sufficient amount of such investments whenever the cash balance in any fund or account is insufficient to
make any withdrawal therefrom as required under this Indenture. The Trustee shall not be liable for any
depreciation of the value of any investment made pursuant to this Article VI or for any loss resulting from
any such investment on the redemption, sale and maturity thereof.
Investment Securities held in a Debt Service Reserve Fund shall be valued at cost on each Interest
Payment Date.
The Trustee shall at all times maintain accurate records of deposits into each Fund and Account
and the sources of such deposits and such records shall be made available to the Borrower upon reasonable
written request.
Notwithstanding anything in this Indenture or the Bond Documents, and subject in all events to the
requirements of the Borrower’s Tax Certificate, the amount of Tax-Exempt Bond proceeds placed in the
Operations and Maintenance Reserve Fund may only be invested as permitted by this Indenture at the
written direction of a Borrower Representative to produce a yield that is not greater than the yield on the

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 ARTICLE VII. ARTICLE VIII.

DEFEASANCE DEFAULTS AND REMEDIES

If the Issuer shall pay or cause to be paid to the Owner of any Bond the principal of, premium, if Section 8.01. Events of Default.
any, and interest due and payable, and thereafter to become due and payable, upon such Bond, or any
(a) Senior Bonds Events of Default. Each of the following events is hereby declared
portion of such Bond in any Authorized Denomination thereof, such Bond or portion thereof shall cease to
a “Senior Bonds Event of Default”:
be entitled to any lien, benefit or security under this Indenture. If the Issuer shall pay or cause to be paid
the principal of, premium, if any, and interest due and payable on all Outstanding Bonds, and thereafter to (i) there is a failure to make payment of the principal or redemption price of
become due and payable thereon, and shall pay or cause to be paid all other sums payable hereunder by the any Senior Bond from the Senior Bonds Trust Estate after the same shall become due,
Issuer, including all fees, compensation and expenses of the Trustee and receipt by the Trustee of an opinion whether at maturity or upon call for redemption, or otherwise; or
of Counsel that all conditions precedent have been complied with, then the right, title and interest of the (ii) there is a failure to make payment of interest on any Senior Bond from the
Trustee in and to the Trust Estate shall thereupon cease, terminate and become void and the Trustee shall Senior Bonds Trust Estate when and as the same shall become due; or
release or cause to be released the Trust Estate, the Mortgages and any other documents securing the Bonds
or execute such documents so as to permit the Trust Estate, the Mortgages and such other documents to be (iii) a failure by the Issuer to observe and perform any other covenant,
released. condition, agreement or provision (other than as specified in subparagraph (i) or (ii) of this
subsection (a)) contained in the Senior Bonds or in this Indenture on the part of the Issuer
Any Bond shall be deemed to be paid within the meaning of this Article and for all purposes of this to be observed or performed with respect to the Senior Bonds, which failure shall continue
Indenture when (a) payment of the principal of and premium, if any, on such Bond, plus interest thereon to for a period of 30 days after written notice is provided by the Trustee specifying such failure
the due date thereof (whether such due date is by reason of maturity or upon redemption as provided herein) and requesting that it be remedied, shall have been given to the Issuer by the Trustee, which
either (i) shall have been made or caused to be made in accordance with the terms thereof or (ii) shall have may give such notice in its discretion and shall give such notice at the written request of
been provided for by any irrevocable deposit with the Trustee in trust and irrevocably set aside exclusively the Controlling Owners, unless the Trustee, or the Trustee and Owners that requested such
for such payment, (1) funds sufficient to make such payment and/or (2) Government Obligations maturing notice, as the case may be, shall agree in writing to an extension of such period prior to its
as to principal and interest in such amounts and at such times as will insure the availability of sufficient expiration; provided, however, that the Trustee, or the Trustee and the Owners of such
money to make such payment, and (b) all fees, compensation and expenses of the Trustee pertaining to the Senior Bonds, as the case may be, shall be deemed to have agreed to an extension of such
Bonds with respect to which such deposit is made accrued and to accrue until final payment of the Bonds, period if corrective action is initiated by the Issuer or the Borrower within such period and
whether at maturity or upon redemption, shall have been paid or the payment thereof provided for to the is being diligently pursued with notice of such corrective action provided to the Trustee;
satisfaction of the Trustee. At such times as a Bond shall be deemed to be paid hereunder, as aforesaid, such provided, further that in no event shall such period be extended for more than 180 days
Bond shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes of after the date of giving of notice of such failure without the consent of the Controlling
any such payment from such funds or Government Obligations. Owners; or
Notwithstanding the foregoing paragraph, no deposit under clause (a)(ii) of the immediately (iv) there shall be a Default under the Loan Agreement.
preceding paragraph shall be deemed a payment of such Bond as aforesaid until (A) the Borrower, shall
have given the Trustee, in form satisfactory to the Trustee, irrevocable written instructions to notify, as The occurrence of a Senior Bonds Event of Default shall constitute an Event of Default
soon as practicable, the Owners in accordance with Section 3.07 hereof, that the deposit required by (a)(ii) only with respect to the Senior Bonds.
above has been made with the Trustee and that said Bond is deemed to have been paid in accordance with (b) Second Tier Bonds Events of Default. Each of the following events is hereby
this Article VII and stating the maturity or redemption date upon which money is to be available for the declared a “Second Tier Bonds Event of Default”:
payment of the redemption price of said Bond, plus interest thereon to the due date thereof; or (B) the
maturity of such Bond. In addition to the foregoing, no deposit described in clause (a)(ii) of the immediately (i) Residual Revenues are not applied to the payment of the principal or
preceding paragraph shall be deemed a payment of said Bond until the Borrower has delivered to the Trustee redemption price of any Second Tier Bonds after the same shall become due, whether at
(i) a report of an Independent Certified Public Accountant verifying the sufficiency of the amounts, if any, maturity or upon call for redemption or otherwise, to the extent of such Residual Revenues
described in (a)(ii) above to insure payment of such Bond, and (ii) a Favorable Opinion of Bond Counsel available; or
addressed to the Issuer and the Trustee to the effect that such deposit will not adversely affect the exclusion (ii) Residual Revenues are not applied to the payment of interest on any
of interest on the Tax-Exempt Bonds from the gross income of the Owners thereof for federal income tax Second Tier Bonds when and as the same shall become due to the extent of such Residual
purposes. Revenues available; or
(iii) a failure by the Issuer to observe and perform any other covenant,
condition, agreement or provision (other than as specified in subparagraph (i) or (ii) of this
subsection (b)) contained in the Second Tier Bonds or in this Indenture on the part of the
Issuer to be observed or performed with respect to the Second Tier Bonds, which failure
shall continue for a period of 30 days after written notice is provided by the Trustee
specifying such failure and requesting that it be remedied, shall have been given to the
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Issuer by the Trustee, which may give such notice in its discretion and shall give such Amount of the Outstanding Senior Bonds, the Trustee shall annul such declaration and its
notice at the written request of the Owners of a majority in aggregate Principal Amount of consequences.
the Second Tier Bonds, unless the Trustee, or the Trustee and Owners that requested such
(c) Upon the happening and continuance of any Second Tier Bonds Event of Default
notice, as the case may be, shall agree in writing to an extension of such period prior to its
specified in Section 8.01(b), then the Trustee may proceed (provided that the Trustee shall only
expiration; provided, however, that the Trustee, or the Trustee and the Owners of such
proceed if it obtains the consent of the Owners of not less than 25% in Principal Amount of the
Second Tier Bonds, as the case may be, shall be deemed to have agreed to an extension of
Senior Bonds if any Senior Bonds are then Outstanding), and upon the written request of the
such period if corrective action is initiated by the Issuer or the Borrower within such period
Owners of not less than 25% in Principal Amount of the Outstanding Second Tier Bonds, together
and is being diligently pursued with notice of such corrective action provided to the
with the consent of the Owners of at least 25% in Principal Amount of the Outstanding Senior
Trustee; provided, further that in no event shall such period be extended for more than 180
Bonds if any Senior Bonds are then Outstanding, shall proceed in its own name, to protect and
days after the date of giving of notice of such failure without the consent of the Owners of
enforce its rights and the rights of the Second Tier Owners by such of the following remedies as
a majority in aggregate Principal Amount of the Second Tier Bonds; or
the Trustee shall deem most effectual to protect and enforce such rights:
(iv) there is a failure to pay the principal of (including any mandatory sinking
(i) by suit, action or proceeding, enforce all rights of the Second Tier Owners
fund redemption amount) or interest on the Second Tier Bonds on the final maturity date
hereunder, including the right to require the Borrower to receive and collect Project
thereof; or
Revenues adequate to carry out the covenants and agreements as to, and pledge of, such
(v) if there are no Senior Bonds Outstanding, there shall be a Default under Project Revenues, and to require the Borrower to carry out any other covenant or agreement
the Loan Agreement. with Second Tier Owners and to perform its duties under the Loan Agreement;
The occurrence of a Second Tier Bonds Event of Default shall constitute an Event of (ii) by bringing suit upon the Second Tier Bonds;
Default only with respect to the Second Tier Bonds.
(iii) by action or suit, require the Borrower to account as if the Borrower were
Section 8.02. Remedies. the trustee of an express trust for the Second Tier Owners; or
(a) Upon the happening and continuance of any Senior Bonds Event of Default (iv) by action or suit, enjoin any acts or things that may be unlawful or in
specified in Section 8.01(a), then the Trustee may proceed, and upon the written request of the violation of the rights of the Second Tier Owners hereunder;
Owners of not less than 25% in aggregate Principal Amount of the Outstanding Senior Bonds, shall
provided, however, so long as the Second Tier Bonds are Outstanding, the Trustee in so acting
proceed in its own name, to protect and enforce its rights and the rights of the Senior Owners by
under this Section 8.02(c) shall act solely for the benefit of the Second Tier Owners.
such of the following remedies as the Trustee shall deem most effectual to protect and enforce such
rights: In addition, upon the happening and continuance of any Second Tier Bonds Event of Default
specified in Section 8.01(b)(i) or (ii), Owners of a majority in aggregate Principal Amount of Outstanding
(i) by suit, action or proceeding, enforce all rights of the Senior Owners
Second Tier Bonds may direct the Trustee in writing to use the amounts then on deposit in the Second Tier
hereunder, including the right to require the Borrower to receive and collect Project
Bonds Debt Service Reserve Fund to redeem Second Tier Bonds in accordance with Section 3.14 hereof.
Revenues adequate to carry out the covenants and agreements as to, and pledge of, such
Project Revenues, and to require the Borrower to carry out any other covenant or agreement (d) If the Senior Bonds are no longer Outstanding, upon the occurrence of a Second
with Senior Owners and to perform its duties under the Loan Agreement; Tier Bond Event of Default specified in Section 8.01(b), then, and in each such case, the Trustee,
upon the written request of the Owners of not less than 25% in aggregate Principal Amount of the
(ii) by bringing suit upon the Senior Bonds;
Outstanding Second Tier Bonds, shall declare all Outstanding Bonds of all Series due and payable
(iii) by action or suit, require the Borrower to account as if the Borrower were and shall commence foreclosure proceedings against the Mortgaged Property under the Mortgages,
the trustee of an express trust for the Senior Owners; or and if all defaults shall be made good, then, with the written consent of the Owners of not less than
25% in aggregate Principal Amount of the Outstanding Second Tier Bonds, the Trustee shall annul
(iv) by action or suit, enjoin any acts or things that may be unlawful or in
such declaration and its consequences.
violation of the rights of the Senior Owners hereunder;
(e) (Reserved)
provided, however, so long as the Senior Bonds are Outstanding, the Trustee in so acting under this
Section 8.02(a) shall act solely for the benefit of the Senior Owners, and the Second Tier Owners (f) (Reserved)
shall have no interest in or right to direct remedies with respect thereto.
(g) (Reserved)
(b) Upon the happening and continuance of any Senior Bonds Event of Default
(h) (Reserved)
specified in Section 8.01(a), then, and in each such case, the Trustee, upon the written request of
the Owners of not less than 25% in aggregate Principal Amount of the Outstanding Senior Bonds, (i) In the enforcement of the remedies in the manner provided under this Indenture,
shall declare all Outstanding Bonds of all Series due and payable and shall commence foreclosure the Trustee shall be entitled to sue for, enforce payment on and receive any and all amounts then
proceedings against the Mortgaged Property under the Mortgages, and if all defaults shall be made or during any default becoming, and any time remaining, due from the Borrower for payment of
good, then, with the written consent of the Owners of not less than 25% in aggregate Principal principal, interest or otherwise, under any provision of this Indenture, the Loan Agreement or of
the Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified
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 in the Bonds, together with any and all costs and expenses of collection and of all proceedings (b) If the principal of all of the Senior Bonds has become or been declared due
hereunder and under the Bonds, including reasonable attorneys’ fees. and payable, to the payment of the principal of and interest then due and unpaid upon the
Senior Bonds without preference or priority of principal over interest or of interest over
Section 8.03. Priority of Payments after Senior Bonds Event of Default. In the event that the
principal, or of any installment of interest over any other installment of interest, or of any
funds held by the Trustee shall be insufficient for the payment of principal of and interest then due on the
Senior Bond over any other Senior Bond, ratably, according to the amounts due
Senior Bonds after a Senior Bonds Event of Default (other than funds held for the payment or redemption
respectively for principal and interest, to the persons entitled thereto without any
of particular Senior Bonds that have theretofore become due at maturity or by call for redemption), such
discrimination or preference except as to any difference in the respective rates of interest
funds derived from actions taken in connection under a Senior Bonds Event of Default only, and any other
specified in the Senior Bonds. Moneys remaining after satisfying the payments as
moneys received or collected by the Trustee acting pursuant to this Article VIII, after making provision for
provided in this subsection (b) shall be applied proportionately to the payment of the
the payment of any expenses necessary in the opinion of the Trustee or the Issuer to protect the interests of
principal of and interest then due and unpaid upon the Second Tier Bonds without
the Owners of the Senior Bonds, and for the payment of the fees, charges and expenses and liabilities
preference or priority of principal, or of any installment of interest over any other
incurred and advances made by the Trustee or the Issuer in the performance of their duties under this
installment of interest, ratably, according to the amounts due respectively for principal and
Indenture, including reasonable attorneys’ fees, shall, subject to Section 8.07 hereof, be applied as follows
interest, to the persons entitled thereto without any discrimination or preference.
(provided that moneys in the Senior Bonds Bond Fund shall not be applied to make payments with respect
to the Second Tier Bonds; and provided further that moneys in the Second Tier Bonds Bond Fund from (c) Whenever moneys are to be applied by the Trustee pursuant to the
transfers made thereto from the Second Tier Bonds Debt Service Reserve Fund and moneys in the Second provisions of this Section, such moneys shall be applied by the Trustee at such times, and
Tier Bonds Debt Service Reserve Fund shall only be applied to make payments with respect to the Second from time to time, as the Trustee in its sole discretion shall determine, having due regard
Tier Bonds): to the amount of such moneys available for application and the likelihood of additional
money becoming available for such application in the future; the deposit of such moneys
(a) If the principal of all the Senior Bonds has not become or been declared
with the Paying Agents, or otherwise setting aside such moneys in trust for the proper
due and payable,
purpose, shall constitute proper application by the Trustee and the Trustee shall incur no
FIRST, to the payment to the persons entitled thereto of all installments of liability whatsoever to the Issuer, to any Owner or to any other person for any delay in
interest then due on the Senior Bonds in the order of the maturity of such applying any such moneys, so long as the Trustee acts with reasonable diligence, having
installments, and, if the amount available shall not be sufficient to pay in full any due regard for the circumstances, and ultimately applies the same in accordance with such
installment, then to the payment thereof ratably, according to the amounts due on provisions of this Indenture as may be applicable at the time of application by the Trustee.
such installment, to the persons entitled thereto, without any discrimination or Whenever the Trustee shall exercise such discretion in applying such moneys, it shall fix
preference; the date (which shall be an Interest Payment Date unless the Trustee shall deem another
SECOND, to the payment to the persons entitled thereto of the unpaid date more suitable) upon which such application is to be made and upon such date interest
Principal Amounts of any Senior Bonds that shall have become due, whether at on the amounts of principal to be paid on such date shall cease to accrue. The Trustee
maturity or by call for redemption, in the order of their due dates and, if the shall give such notice as it may deem appropriate for the fixing of any such date. The
amounts available shall not be sufficient to pay in full all the Senior Bonds due on Trustee shall not be required to make payment to the Owner of any unpaid Bond unless
any date, then to the payment thereof ratably, according to the principal amounts such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation
due on such date, to the persons entitled thereto, without any discrimination or if fully paid.
preference; Section 8.04. Priority of Payments after Second Tier Bonds Event of Default. In the event that
THIRD, to the payment to the persons entitled thereto of all installments the funds held by the Trustee shall be insufficient for the payment of principal of and interest then due on
of interest then due on the Second Tier Bonds in the order of the maturity of such the Second Tier Bonds after a Second Tier Bonds Event of Default (other than funds held for the payment
installments and pro rata among Second Tier Bonds with respect to installments or redemption of particular Second Tier Bonds that have theretofore become due at maturity or by call for
with the same maturity, and, if the amount available shall not be sufficient to pay redemption), such funds derived from actions taken in connection under a Second Tier Bonds Event of
in full any installment, then to the payment thereof ratably, according to the Default only, and any other moneys received or collected by the Trustee and the Issuer acting pursuant to
amounts due on such installment, to the persons entitled thereto, without any Article VIII, after making provision for the payment of any expenses necessary in the opinion of the Trustee
discrimination or preference; and and the Issuer to protect the interests of the Owners of the Second Tier Bonds, and for the payment of the
fees, charges and expenses and liabilities incurred and advances made by the Trustee or the Issuer in the
FOURTH, to the payment to the persons entitled thereto of the unpaid performance of their duties under this Indenture, including reasonable attorney fees, shall, subject to Section
Principal Amounts of any Second Tier Bonds that shall have become due, whether 8.07 hereof, be applied as follows:
at maturity or by call for redemption, in the order of their due dates and, if the
amounts available shall not be sufficient to pay in full all the Second Tier Bonds (a) If the principal of all the Second Tier Bonds has not become or been
due on any date, then to the payment thereof ratably, according to the principal declared due and payable,
amounts due on such date, to the persons entitled, without any discrimination or FIRST, to the payment to the persons entitled thereto of all installments of
preference. interest then due on the Second Tier Bonds in the order of the maturity of such
installments, and, if the amount available shall not be sufficient to pay in full any

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installment, then to the payment thereof ratably, according to the amounts due on Section 8.08. Termination of Proceedings. In the case any proceeding taken by the Trustee on
such installment, to the persons entitled thereto, without any discrimination or account of any Event of Default shall have been discontinued or abandoned for any reason, then in every
preference; and case the Issuer, the Trustee and the Owners shall be restored to their former positions and rights hereunder,
respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such
SECOND, to the payment to the persons entitled thereto of the unpaid
proceeding had been taken.
Principal Amounts of any Second Tier Bonds that shall have become due, whether
at maturity or by call for redemption, in the order of their due dates and, if the Section 8.09. Owners’ Direction of Proceedings. The Owners of a majority in Principal
amounts available shall not be sufficient to pay in full all the Second Tier Bonds Amount of the (a) Senior Bonds, so long as the Senior Bonds are Outstanding; and (b) if the Senior Bonds
due on any date, then to the payment thereof ratably, according to the principal are not Outstanding, then the Second Tier Bonds then Outstanding shall have the right, by an instrument or
amounts due on such date, to the persons entitled thereto, without any concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting
discrimination or preference. all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be
otherwise than in accordance with law or the provisions of this Indenture and that the Trustee shall have
(b) If the principal of all of the Second Tier Bonds has become or been
the right to decline to follow any direction that in the opinion of the Trustee would be unjustly prejudicial
declared due and payable, to the payment of the principal of and interest then due and
to Owners not parties to such direction.
unpaid upon the Second Tier Bonds without preference or priority of principal over interest
or of interest over principal, or of any installment of interest over any other installment of Section 8.10. Limitations on Rights of Owners. No Owner of any Bond of any Series shall have
interest, or of any Second Tier Bond over any other Second Tier Bond, ratably, according any right to institute any suit, action or other proceedings hereunder, or for the protection or enforcement
to the amounts due respectively for principal and interest, to the persons entitled thereto of any right under this Indenture or any right under law, unless such Owner shall have given to the Trustee
without any discrimination or preference except as to any difference in the respective rates written notice of the Event of Default or breach of duty on account of which suit, action or proceeding is to
of interest specified in the Second Tier Bonds. be taken, and unless the Owners of not less than 25% in aggregate Principal Amount of the Bonds of the
Series affected shall have made written request of the Trustee after the right to exercise such powers or
(c) Whenever moneys are to be applied by the Trustee pursuant to the
right of action, as the case may be, shall have accrued, together with the written consents of the Owners of
provisions of this Section, such moneys shall be applied by the Trustee at such times, and
not less than 25% in aggregate Principal Amount of the Bonds of each Series that are payable on a senior
from time to time, as the Trustee in its sole discretion shall determine, having due regard
basis to the Bonds of the Owners making such request, and shall have afforded the Trustee a reasonable
to the amount of such moneys available for application and the likelihood of additional
opportunity either to proceed to exercise the powers herein granted or granted under law or to institute such
money becoming available for such application in the future; the deposit of such moneys
action, suit or proceeding in its name and unless, also, there shall have been provided to the Trustee
with the Trustee, or otherwise setting aside such moneys in trust for the proper purpose,
reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or
shall constitute proper application by the Trustee and the Trustee shall incur no liability
thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable
whatsoever to the Issuer, to any Owner or to any other person for any delay in applying
time; and such notification, request and offer of indemnity are hereby declared in every such case at the
any such moneys, so long as the Trustee acts with reasonable diligence, having due regard
option of the Trustee to be conditions precedent to the execution of the powers under this Indenture or for
for the circumstances, and ultimately applies the same in accordance with such provisions
any other remedy hereunder or under law. It is understood and intended that no one or more Owners of
of this Indenture as may be applicable at the time of application by the Trustee. Whenever
the Bonds hereby secured shall have any right in any manner whatever by their action to affect, disturb or
the Trustee shall exercise such discretion in applying such moneys, it shall fix the date
prejudice the security of this Indenture, or to enforce any right hereunder or under law with respect to the
(which shall be an Interest Payment Date unless the Trustee shall deem another date more
Bonds or this Indenture, except in the manner herein provided, and that all proceedings shall be instituted,
suitable) upon which such application is to be made and upon such date interest on the
had and maintained in the manner herein provided and for the benefit of all Owners of the Bonds as provided
amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give
herein.
such notice as it may deem appropriate for the fixing of any such date. The Trustee shall
not be required to make payment to the Owner of any unpaid Bond unless such Bond shall Anything to the contrary contained in this Section 8.10 or any other provision of this Indenture
be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. notwithstanding, each Owner of any Bond by his acceptance thereof shall be deemed to have agreed that
any court in its discretion may require, in any suit for the enforcement of any right or remedy under the
Section 8.05. (Intentionally Omitted).
Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing of
Section 8.06. (Intentionally Omitted). any party litigant in such suit of an undertaking to pay the reasonable costs of such suit, and that such court
Section 8.07. Application of Proceeds from Foreclosure of Mortgages. Notwithstanding any may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant
other provisions of this Indenture to the contrary, any proceeds received by the Trustee from the foreclosure in any such suit, having due regard to the merits and good faith of the claims or defenses made by such
of the lien on the Mortgaged Property shall be applied to the payment of the principal and interest then due litigant; but the provisions of this subsection shall not apply to any suit instituted by the Trustee, to any suit
and unpaid upon the Bonds of all Series then Outstanding, without preference or priority of principal over instituted by any Owner, or group of Owners, holding at least 25% in aggregate Principal Amount of the
interest or interest over principal, or of any installment of interest over any other installment of interest, or Bonds, or to any suit instituted by any Owner for the enforcement of the payment of the principal of or
of any Bond of any Series over any other Bond of any Series, ratably, according to the amounts due interest on any Bond on or after the respective date thereof expressed in such Bond.
respectively for principal and interest, to the persons entitled thereto without any discrimination or Section 8.11. Possession of Bonds by Trustee Not Required. All rights of action under this
privilege. Indenture or under any of the Bonds, enforceable by the Trustee, may be enforced by it without possession
of any of the Bonds or the production thereof in the trial or other proceeding relative thereto, and any such

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suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the ARTICLE IX.
Owners of such Bonds, subject to the provisions of this Indenture.
TRUSTEE
Section 8.12. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the
Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and Section 9.01. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by
each and every such remedy shall be cumulative and shall be in addition to any other remedy given this Indenture and its duties under this Indenture, the Loan Agreement and the Mortgages, and agrees to
hereunder or now or hereafter existing at law or in equity or by statute. perform such trusts and duties, but only upon and subject to the following express terms and conditions set
forth in this Article IX:
Section 8.13. No Waiver of Default. No delay or omission of the Trustee or of any Owner of
the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or (a) The Trustee, before the occurrence of an Event of Default and after the curing of all Events
shall be construed to be a waiver of any such default or an acquiescence therein; and every power and of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically
remedy given by this Indenture to the Trustee and the Owners of the Bonds, respectively, may be exercised set forth in this Indenture. In case an Event of Default (of which the Trustee has knowledge) has occurred
from time to time and as often as may be deemed expedient. (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would
Section 8.14. Notice of Event of Default. The Trustee shall give to the Owners notice of each
exercise or use under the circumstances in the conduct of his or her own affairs.
Event of Default hereunder known to the Trustee within three Business Days after knowledge of the
occurrence thereof, unless such Event of Default shall have been remedied or cured before the giving of (b) The Trustee shall not be accountable for the use of any Bonds authenticated or delivered
such notice; provided that, except in the case of (i) default in any payment of the principal of or interest on hereunder. The Trustee may buy, sell, own and deal in any of the Bonds secured hereby with the same
any of the Bonds; or (ii) in the making of any payment required to be made into the Senior Bonds Bond rights that it would have were it not the Trustee.
Fund, the Second Tier Bonds Bond Fund and the Second Tier Bonds Debt Service Reserve Fund, the
(c) The Trustee shall not withhold unreasonably its consent, approval or action to any
Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive
reasonable request of the Issuer, provided that any such consent, approval or action is permitted by this
committee, or a trust committee of directors or responsible officers of the Trustee in good faith determines
Indenture. Any action taken by the Trustee pursuant to this Indenture upon the request or authority or
that the withholding of such notice is in the interests of the Owners of all Bonds. Each such notice of
consent of any person who at the time of making such request or giving such authority or consent is the
Event of Default shall be given by mailing written notice thereof to all registered Owners of Bonds, as the
Owner of any Bond shall be conclusive and binding upon all future Owners of the same Bond and upon
names and address of such Owners appear upon the books of registration as kept by the Trustee.
Bonds, issued in exchange therefor or in place thereof.
(d) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any
instrument, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed by an Issuer
Representative or a Borrower Representative as sufficient evidence of the facts therein contained, and
before the occurrence of a default of which the Trustee has notice as provided in Section 9.05 hereof, shall
also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action
is necessary or expedient, but may, at its discretion, secure such further evidence deemed necessary or
advisable, but shall not be bound to secure the same. The Trustee may accept a certificate signed on behalf
of the Issuer to the effect that a resolution in the form therein set forth has been adopted by the Issuer as
conclusive evidence that such resolution has been duly adopted, and is in full force and effect.
(e) The permissive right of the Trustee to do things enumerated in this Indenture shall not be
construed as a duty, and it shall not be answerable for other than its negligence or willful misconduct.
(f) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys,
experts, engineers, accountants and representatives, shall have the right fully to inspect any and all of the
property herein conveyed, including all books, papers and records of the Issuer or the Borrower pertaining
to the revenues and receipts relating to the Project or the Bonds, and to take such memoranda from and in
regard thereto as may be desired.
(g) The Trustee shall not be required to give any bond or surety in respect of the execution of
the trusts and powers hereunder or otherwise in respect of the premises.
(h) The Trustee shall not be under any duty or obligation to perform any act that would cause
it to incur any expense or liability or to institute or defend any suit in respect of this Indenture or to advance
any of its own money, unless it is provided with indemnification satisfactory to it for the reimbursement of
all expenses (including without limitation, attorneys’ fees and court costs) to which it may be put and to
protect it against all liability, except all liability that is adjudicated to have resulted from its negligence or
willful misconduct by reason of any action so taken.
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(i) The Trustee shall not be required to enter, take possession of or take any other action with (t) In no event shall the Trustee be responsible or liable for special, indirect, punitive or
respect to the Project or the Mortgaged Property thereof unless it shall have first received assurances and consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
indemnity satisfactory to it that the Trustee will not be subject to liability for, among other things, the irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless
existence of, or contamination by environmentally hazardous substances or other discharges, emissions or of the form of action.
releases with respect to the Project or the Mortgaged Property.
(u) The Trustee shall not be responsible for and makes no representation as to existence,
(j) The Trustee shall have no responsibility, opinion or liability with respect to any genuineness, value or protection of the Project or any other collateral securing the Bonds, or for the creation,
information, statements or recitals in any offering memorandum or other disclosure material prepared or perfection, priority, sufficiency or protection of any liens securing the Bonds. Unless otherwise directed
distributed with respect to the issuance of the Bonds. in writing by a Borrower Representative, the Trustee shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public office at any time or times
(k) The Trustee’s rights to immunities and protection from liability hereunder and its rights to
or otherwise perfecting or maintaining the perfection of any lien or security interest in the Project or any
payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance
other collateral securing the Bonds.
of the Bonds.
Section 9.02. No Responsibility for Recitals. The recitals, statements and representations
(l) The Trustee shall not be under any obligation to effect or maintain insurance or to renew
contained in this Indenture or in the Bonds, save only the Trustee’s authentication upon the Bonds, shall be
any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried by the
taken and construed as made by and on the part of the Issuer, and not by the Trustee, and the Trustee does
Borrower, or to report, or make or file claims or proof of loss for, any loss or damage insured against or
not assume, nor shall it have, any responsibility or obligation for the correctness of any thereof.
that may occur. The Trustee may rely on any report provided by the Borrower pursuant to Section 5.5 of
the Loan Agreement with respect to satisfaction of the insurance requirements of the Loan Agreement and Section 9.03. Limitations on Liability. The Trustee may execute any of the trusts or powers
the Mortgages, and shall have no responsibility for assuring compliance with such insurance requirements, hereof and perform the duties required of it hereunder by or through attorneys, agents, receivers or
but shall notify the Issuer, the Borrower and the Rating Agency if it has not received the report required by employees selected by it, and shall be entitled to advice of counsel concerning all matters of trust and its
Section 5.5 of the Loan Agreement. duty hereunder and to obtain the opinion of Counsel acceptable to the Trustee prior to taking action
hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers
(m) All money received by the Trustee need not be segregated except to the extent required by
or employees as is deemed necessary in connection with the performance of the Trustee’s duties under this
law or this Indenture.
Indenture, and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent
(n) [Reserved]. or employee selected by it with reasonable care. The Trustee may act upon the advice of any attorney
(o) The Trustee agrees to provide to the Rating Agency all information in its possession if approved by the Trustee in the exercise of reasonable care, and the Trustee shall not be responsible for any
reasonably requested by the Rating Agency. loss or damage resulting from any action or non-action in good faith reliance upon such opinion or advice.
Without limitation, the Trustee shall be entitled to the benefit of the foregoing sentence with respect to the
(p) The Trustee shall provide to the Issuer and the Rating Agency copies of written notices it delegation to the Trustee’s duties hereunder with respect to payment of principal, premium, if any, or
has received or produced with respect to any Event of Default, the occurrence of any casualty or material interest on, or redemption of, the Bonds, the authentication and delivery thereof, and exchange and transfer
damage or loss or any condemnation proceedings concerning the Project, the resignation or removal of the thereof. The Trustee shall not be answerable for the exercise of any discretion or power under this Indenture
Trustee and the appointment of a successor trustee, or any amendments or supplements to this Indenture or or for anything whatsoever in connection with the trust created hereby, except only for its own negligence
the Loan Agreement. or willful misconduct.
(q) The Trustee shall not be liable for any action taken or omitted by the Trustee in good faith Section 9.04. Compensation, Expenses and Advances. The Trustee shall be entitled to
at the direction of the Controlling Owners as to the time, method and place of conducting any proceedings reasonable compensation for its services rendered hereunder, including Extraordinary Trustee’s Fees and
for any remedy available to the Trustee or the exercising of any power conferred by this Indenture. Expenses (not limited by any provision of law in regard to the compensation of the trustee of an express
(r) Whether or not therein expressly so provided, every provision of this Indenture relating to trust) and to reimbursement for its actual out-of-pocket expenses (including counsel fees and expenses and
the conduct of, or affecting the liability of, or affording protection to the Trustee shall be subject to the any fees, expenses, payments, indemnification reserves or other security that may be incurred in connection
provisions of this Section 9.01. with the appointment or designation of a separate trustee for all or part of the Bonds) reasonably incurred
in connection therewith, except as a result of its negligence or willful misconduct. The Issuer agrees that it
(s) The Trustee agrees to accept and act upon instructions or directions pursuant to this will, but solely from the Trust Estate as provided herein, pay to the Trustee such compensation and
Indenture sent by a Borrower Representative or an Issuer Representative by unsecured e-mail, facsimile reimbursement of expenses and advances. The Trustee shall have, in addition to any other rights hereunder,
transmission or other similar unsecured electronic methods. If the Issuer and the Borrower elect to give the a lien and claim, for the payment of its compensation and the reimbursement of its expenses and any
Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in advances made by it, as provided in this Section 9.04, upon the money that is on deposit in the appropriate
its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be funds and accounts created herein, subject to the requirements hereof for other applications of such funds
deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or and accounts, and the Trustee may withdraw the same from such funds and accounts when the same become
indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding whether due and payable, to the extent available for such purpose.
such instructions conflict or are inconsistent with a subsequent written instruction. The Issuer and the
Borrower agree to assume all risks arising out of the use of such electronic methods to submit instructions Section 9.05. Notice of Events of Default. The Trustee shall not be required to take notice, or
and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized be deemed to have notice, of any default or Event of Default under this Indenture, other than an Event of
instructions, and the risk of interception and misuse by third parties. Default under Section 8.01(a)(i) or (ii), (b)(i), (ii) or (iv) hereof, unless a Responsible Officer of the Trustee
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shall have received actual knowledge or shall have been specifically notified in writing of such default or Section 9.11. Appointment of Successor Trustee. If at any time the Trustee shall resign, be
Event of Default by the Issuer, the Borrower or by the Owners of at least 25% in aggregate Principal removed, or be dissolved, or if its property or affairs shall be taken under the control of any state or federal
Amount of the applicable Series of Bonds. The Trustee may, however, at any time, in its discretion, and court or administrative body because of insolvency or bankruptcy, or for any other reason become incapable
shall, upon the request of at least 25% in aggregate Principal Amount of the applicable Series of Bonds, of acting, then a vacancy shall forthwith and ipso facto exist in the office of Trustee and the Borrower, with
require of the Borrower full information and advice as to the performance of any of the covenants, written notice to the Issuer, shall promptly appoint a successor Trustee. Any such appointment shall be
conditions and agreements contained herein. made by a written instrument executed by a Borrower Representative. Copies of such instrument shall be
promptly delivered by the Borrower to the predecessor Trustee and to the Trustee so appointed. The
Section 9.06. Action by Trustee. The Trustee shall be under no obligation to take any action in
successor Trustee shall give notice of such appointment electronically or by Mail, at least once within 30
respect of any default or Event of Default hereunder or toward the execution or enforcement of any of the
days of such appointment, to all Owners.
trusts hereby created, or to institute, appear in or defend any suit or other proceeding in connection therewith
or to take any other discretionary action at the direction of the Owners, and if in its opinion such action may Any new Trustee so appointed as presented in this Section 9.11 shall immediately and without
tend to involve it in expense or liability, unless furnished, from time to time as often as it may require, with further act be superseded by a Trustee appointed in the manner above provided.
security and indemnity satisfactory to it; but the foregoing provisions are intended only for the protection
Section 9.12. Qualifications of Trustee. The Trustee and every successor Trustee, if any, (a)
of the Trustee, and, shall not affect any discretion or power given by any provisions of this Indenture to the
shall be a bank or trust company duly organized under the laws of the United States or any state thereof
Owners or to the Trustee to take action in respect of any default or Event of Default without such notice or
authorized by law to perform all the duties imposed upon it by this Indenture, the Loan Agreement and the
request from the Owners, or without such security or indemnity.
Mortgages, (b) shall at the time of appointment have (or in the case of a corporation or trust company
Section 9.07. Good Faith Reliance. The Trustee shall be protected and shall incur no liability included in a bank holding company system, the related bank holding company shall have) trust assets
in acting or proceeding in good faith, reasonably exercised, upon any resolution, notice, electronic or under management of at least $50,000,000, (c) shall be permitted under the Act to perform the duties of
facsimile transmission, request, consent, waiver, certificate, statement, affidavit, voucher, bond, requisition Trustee and (d) shall be acceptable to the Issuer.
or other paper or document that it shall in good faith believe to be genuine and to have been passed or
Section 9.13. Judicial Appointment of Successor Trustee. If at any time the Trustee shall resign
signed by the proper board, body or person or to have been prepared and furnished pursuant to any of the
and no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this
provisions of this Indenture or the other Bond Documents, or upon the written opinion of any attorney,
Article prior to the date specified in the notice of resignation as the date when such resignation is to take
engineer, accountant or other expert reasonably believed by the Trustee to be qualified in relation to the
effect, the resigning Trustee may forthwith apply to a court of competent jurisdiction for the appointment
subject matter, and the Trustee shall be under no duty to make any investigation or inquiry as to the
of a successor Trustee. If no appointment of a successor Trustee shall be made pursuant to the foregoing
qualification of such person or any statements contained or matters referred to in any such instrument, but
provisions of this Article within six months after a vacancy shall have occurred in the office of Trustee, any
may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements.
Owner may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may
Section 9.08. Dealings in Bonds or with the Issuer or the Borrower. The Trustee may in good thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee.
faith, reasonably exercised, buy, sell, own, hold and deal in any of the Bonds issued hereunder, and may
Section 9.14. Acceptance of Trusts by Successor Trustee. Any successor Trustee appointed
join in any action that any Owner may be entitled to take with like effect as if it did not act in any capacity
hereunder shall execute, acknowledge and deliver to the Issuer an instrument accepting such appointment
hereunder. The Trustee, in its individual capacity, either as principal or agent, may also engage in or be
hereunder, and thereupon such successor Trustee, without any further act, deed or conveyance, shall
interested in any financial or other transaction with the Issuer or the Borrower, and may act as depositary,
become duly vested with all the estates, property, rights, powers, trusts, duties and obligations of its
trustee or agent for any committee or body of Owners secured hereby or other obligations of the Issuer or
predecessor in the trust hereunder, with like effect as if originally named Trustee herein. Upon request of
the Borrower as freely as if it did not act in any capacity hereunder.
the Trustee and the payment of the predecessor Trustee’s fees and expenses hereunder, such predecessor
Section 9.09. Resignation of Trustee. The Trustee may resign and be discharged of the trusts Trustee and the Issuer shall execute and deliver an instrument transferring to such successor Trustee all the
created by this Indenture by executing an instrument in writing resigning such trust and specifying the date estates, property, rights, powers and trusts hereunder of such predecessor Trustee and, subject to the
when such resignation shall take effect, and filing the same with the Issuer and the Borrower, and by giving provisions of Section 9.04 hereof, such predecessor Trustee shall pay over to the successor Trustee all
notice of such resignation electronically or by Mail, not less than 15 days prior to such resignation date, to money and other assets at the time held by it hereunder, and such predecessor Trustee shall assign its
all Owners. Such resignation shall only take effect on the day a successor Trustee shall have been appointed beneficial interests in the Mortgages to the successor Trustee and record said assignment in the same manner
as hereinafter provided. as the Mortgages were recorded.
Section 9.10. Removal of Trustee. The Trustee may be removed at any time by the Borrower Section 9.15. Successor by Merger or Consolidation. Any entity into which any Trustee
or by the Controlling Owners with the consent of the Borrower (not to be unreasonably withheld), by filing hereunder may be merged or converted or with which it may be consolidated, or any entity resulting from
with the Trustee so removed and with the Issuer an instrument or instruments in writing appointing a any merger, conversion or consolidation to which any Trustee hereunder shall be a party, or any entity
successor, executed by a Borrower Representative if the Trustee has been removed by the Borrower (and succeeding to the business of the Trustee, or any company to which the Trustee may sell or transfer all or
notice thereof given electronically or by Mail to the Owners and the Issuer), or executed by said Owners of substantially all of its corporate trust business, provided such entity meets the qualifications contained in
Bonds if the Trustee was removed by said Owners; provided that the Borrower may not remove the Trustee, Sections 9.12 or 9.18 hereof, as appropriate, shall be a successor Trustee under this Indenture, without the
and the consent of the Borrower shall not be required (in the case of removal by the Owners) if an Event of execution or filing of any paper or any further act on the part of the parties hereto, anything in this Indenture
Default has occurred and is continuing hereunder or a Default has occurred and is continuing under the to the contrary notwithstanding.
Loan Agreement.

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Section 9.16. Intervention in Litigation of the Issuer. In any judicial proceeding to which the by or on behalf of the Trustee, (i) any partial prepayment of the Loan or the giving of notice of the call for
Issuer is a party and that in the opinion of the Trustee and its counsel has a substantial bearing on the redemption of any Bonds, (j) any change in the investment of funds subject to the lien of this Indenture
interests of the Owners, the Trustee, if permitted by the court having jurisdiction in the premises, may other than in Investment Securities, (k) any defeasance of the Bonds hereunder, or (l) any change in the
intervene and shall intervene, upon receipt of indemnity satisfactory to it, at the written request of the Manager of which a Responsible Officer of the Trustee has actual knowledge.
Controlling Owners.
Section 9.22. Survival.
Section 9.17. Paying Agent. The Issuer hereby appoints the Trustee as the paying agent for the
(a) The rights of the Trustee to payment under this Indenture shall survive the Trustee’s
Bonds.
resignation or removal, the discharge of this Indenture and defeasance of the Bonds.
Section 9.18. Qualifications of Paying Agent; Resignation; Removal. Any Paying Agent (a)
(b) Notwithstanding anything in this Indenture or any of the Bond Documents to the contrary,
shall be a bank or trust company, duly organized under the laws of the United States of America or any
the rights, protections, indemnities and immunities afforded to the Trustee hereunder shall survive the
state thereof authorized by law to perform all the duties imposed upon it by this Indenture, and (b) shall at
resignation or removal of any such party and the payment in full or defeasance of the Bonds.
the time of appointment have (or in the case of a corporation or trust company included in a bank holding
company system, the related bank holding company shall have), trust assets under management of at least
$50,000,000. Any Paying Agent may at any time resign and be discharged of the duties and obligations
created by this Indenture by giving at least 15 days’ notice to the Issuer, the Borrower and the Trustee. The
Paying Agent may be removed at any time at the direction of the Borrower or the Controlling Owners with
the consent of the Borrower (not to be unreasonably withheld), with written notice to the Issuer, by an
instrument signed by the Borrower or such Owners, as applicable, and filed with the Paying Agent and the
Trustee. In the event of the resignation or removal of any Paying Agent, such Paying Agent shall pay over,
assign and deliver any money held by it in such capacity to its successor or, if there be no successor, to the
Trustee. Successor Paying Agents shall be appointed in accordance with the provisions of Section 9.11
hereof.
Section 9.19. Several Capacities; Duty To Cooperate. Anything in this Indenture to the
contrary notwithstanding, the same entity must serve hereunder as the Trustee and the Paying Agent.
Section 9.20. Additional Duties. Notwithstanding any provisions hereof to the contrary, the
Trustee shall have the following duties:
(a) The Trustee shall provide the Rating Agency such information within its possession as the
Rating Agency shall reasonably require from time to time in order to maintain the Rating on the Bonds;
(b) The Trustee shall continue to perform its function hereunder without regard to the
insufficiency of payment of its fees, provided that nothing herein shall negate the Trustee’s right to
compensation and indemnification hereunder and as provided in the Loan Agreement or the right of the
Trustee to resign under Section 9.09 hereof; and
(c) The Trustee shall provide to the Underwriter at its cost and upon its request a list of the
names and addresses of the registered Owners of all Bonds then outstanding at the sole cost and expense of
the Underwriter or, if the Bonds are held in book-entry form, the special position report (or similar list of
Beneficial Owners) from the Clearing Agency.
Section 9.21. Notice to Rating Agency. The Trustee shall notify the Rating Agency of (a)
subject to Section 9.05 hereof, the occurrence of an Event of Default or a Default of which a Responsible
Officer of the Trustee has actual knowledge, (b) the occurrence of any monetary or other material default
under the Loan of which a Responsible Officer of the Trustee has actual knowledge, (c) any change in the
identity of the Trustee, (d) any amendments, modifications, or changes to this Indenture, the Loan
Agreement, or the Bonds, including any extension of principal or modification of interest or redemption
premium due on any of the Bonds, in each case only in the event a Responsible Officer of the Trustee has
actual knowledge, (e) any draws on the Debt Service Reserve Fund, (f) any damage, destruction or
condemnation of the Project of which a Responsible Officer of the Trustee has actual knowledge, (g) any
change or proposed change in the structure or identity of the Issuer of which a Responsible Officer of the
Trustee has actual knowledge, (h) the initiation of any foreclosure action taken with respect to the Project

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 ARTICLE XI.

ARTICLE X. MODIFICATION OF BOND DOCUMENTS

Section 11.01. Limitations. Neither this Indenture nor any of the Borrower Documents shall be
EXECUTION OF INSTRUMENTS BY OWNERS
Amended in any respect subsequent to the Closing Date except as provided in and in accordance with and
AND PROOF OF OWNERSHIP OF BONDS
subject to the provisions of this Article.
Any request, direction, consent or other instrument in writing required or permitted by this
Section 11.02. Supplemental Indentures Without Owner Consent. The Issuer and the Trustee
Indenture to be signed or executed by Owners or on their behalf by an attorney-in-fact may be in any number
may, from time to time and at any time, without the consent of but with prompt notice to the Owners and
of concurrent instruments of similar tenor and may be signed or executed by Owners in person or by an
the Rating Agency, enter into Supplemental Indentures as follows:
agent or attorney-in-fact appointed by an instrument in writing or as provided in the Bonds. Proof of the
execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this (a) to cure any formal defect, omission, inconsistency or ambiguity in this Indenture;
Indenture and shall be conclusive in favor of the Trustee with regard to any action taken by it under such (b) to add to the covenants and agreements of the Issuer in this Indenture other covenants and
instrument if made in the following manner: agreements, or to add to the security for the Bonds or any Series of Bonds, or to surrender any right or
(a) The fact and date of the execution by any person of any such instrument may be proved by power reserved or conferred upon the Issuer if such surrender shall not, in the judgment of the Trustee,
the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take materially adversely affect the interests of the Owners, the Trustee being authorized to rely on an opinion
acknowledgments within such jurisdiction, to the effect that the person signing such instrument of Counsel with respect thereto;
acknowledged before him the execution thereof, or by an affidavit of a witness to such execution. (c) to confirm, as further assurance, any pledge of or lien on the Loan Agreement or of any
(b) The ownership of Bonds shall be proved by the registration books kept under the provisions other money, securities or funds subject to the lien of this Indenture;
of Section 2.09 hereof. (d) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time
Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it being amended;
intended that the Trustee may accept any other evidence of matters herein stated that it may deem necessary (e) to preserve the exclusion of interest on the Tax-Exempt Bonds from gross income for
or sufficient. Any request, consent of, or assignment by any Owner shall bind every future Owner of the federal income tax purposes, as set forth in a Favorable Opinion of Bond Counsel;
same Bond or any Bond or Bonds issued in lieu thereof in respect of anything done by the Trustee or the
Issuer in pursuance of such request or consent. (f) to make changes to obtain, maintain or restore the rating on the Bonds from the Rating
Agency;
(g) to provide for any Amendment specifically authorized or required by any provision of this
Indenture;
(h) in connection with any Additional Bonds; or
(i) with respect to any other Amendment that, in the judgment of the Trustee, does not have a
material adverse effect on the Owners of the Bonds, the Trustee being authorized to rely on an opinion of
Counsel with respect thereto.
Section 11.03. Supplemental Indentures Requiring Owners’ Consent.
(a) Except for any Supplemental Indenture entered into pursuant to Section 11.02, subject to
the terms and provisions contained in this Section 11.03 and not otherwise, the Controlling Owners shall
have the right from time to time to consent to and approve the execution and delivery by the Issuer and the
Trustee of any Supplemental Indenture deemed necessary or desirable by the Issuer for the purposes of
modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or
provisions contained in this Indenture; however, unless approved in writing by all Owners of Bonds affected
thereby, nothing herein contained shall permit, or be construed as permitting, (i) a change in the times,
amounts or currency of payment of the principal of or interest on any Outstanding Bond or a reduction in
the principal amount or redemption price of any Outstanding Bond or the rate of interest thereon, or (ii) the
creation of a claim or lien upon, or a pledge of, the Trust Estate ranking prior to the respective claims, liens
or pledges created by this Indenture, or (iii) a reduction in the aggregate Principal Amount the consent of
the Owners of which is required for any such Supplemental Indenture or that is required, under
Section 11.05, for any modification, alteration, amendment or supplement to any Borrower Documents;
and provided further that if the Supplemental Indenture subjects additional property to the lien of the
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Indenture the Trustee shall have been provided with an opinion of Counsel that such Supplemental (h) with respect to any other Amendment that does not, in the judgment of the Trustee, have a
Indenture is duly authorized in accordance with the terms. material adverse effect on the Owners of the Bonds, the Trustee being authorized to rely on an opinion of
Counsel with respect thereto.
(b) If, at any time, the Issuer and the Trustee propose to enter into any such Supplemental
Indenture for any of the purposes specified in this Section 11.03, the Trustee shall, subject to Section 11.07 Section 11.05. Amendment of Borrower Documents Requiring Owners’ Consent. Except in the
and upon being satisfactorily indemnified with respect to expenses by the Borrower, cause notice of the case of Amendments referred to in Section 11.04 hereof, the Issuer and the Trustee shall not enter into, and
proposed execution of such Supplemental Indenture to be delivered electronically or mailed, postage shall not consent to, any Amendment of the Borrower Documents without the written approval or consent
prepaid, to all Owners affected thereby. Such notice shall briefly set forth the nature of the proposed of the Controlling Owners, given and procured as provided in Section 11.03 hereof; provided that the
Supplemental Indenture and shall state that copies thereof are on file at the Designated Office of the Trustee foregoing will not permit or be construed as permitting any change referred to in Section 11.03(i)
for inspection by all Owners affected thereby. If, within 60 days or such longer period as shall be prescribed (substituting for such purpose the word “Note” for the word “Bond”) without the consent of all Owners
by the Trustee following the mailing of such notice, the Controlling Owners at the time of execution of any given and obtained in the manner set forth in Section 11.03 hereof. If at any time the Issuer requests the
such Supplemental Indenture shall have consented to and approved the execution thereof as herein consent of the Trustee to any such proposed modification, alteration, amendment or supplement, the Trustee
provided, no Owner of any Bond shall have any right to object to any of the terms and provisions contained will cause notice thereof to be given in the same manner as provided by Section 11.06 hereof with respect
therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to to Supplemental Indentures. Such notice will briefly set forth the nature of such proposed modification,
enjoin or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant to alteration, amendment or supplement and will state that copies of the instrument embodying the same are
the provisions thereof. Upon the execution of any such Supplemental Indenture as in this Section 11.03 is on file at the Designated Office of the Trustee for inspection by all Owners. The Issuer and the Trustee
permitted and provided, this Indenture shall be deemed to be and shall be modified and amended in may enter into, or may consent to, any such proposed modification, alteration, amendment or supplement
accordance therewith. The Trustee and Issuer may rely upon an opinion of Bond Counsel as conclusive subject to the same conditions and with the same effect as provided in Section 11.03 hereof with respect to
evidence that the execution and delivery of a Supplemental Indenture has been effected in compliance with Supplemental Indentures.
the provisions of this Article.
Section 11.06. Procedures for Amendments. If at any time the Trustee shall be requested to enter
(c) Anything herein to the contrary notwithstanding, so long as no Event of Default under the into any Supplemental Indenture pursuant to Section 11.03 or to consent to any Amendment pursuant to
Loan Agreement with respect to the Borrower has occurred and is continuing, a Supplemental Indenture Section 11.05, the Trustee shall cause notice of the proposed Supplemental Indenture or other Amendment
under this Article shall not become effective unless and until the Borrower shall have consented to the to be given electronically or by Mail to all Owners. Such notice shall set forth with particularity the nature
execution and delivery of such Supplemental Indenture. In this regard, the Trustee shall cause notice of the of the proposed Supplemental Indenture or other Amendment and shall state that a copy thereof is on file
proposed execution and delivery of any such Supplemental Indenture to be mailed by certified or registered at the Designated Office of the Trustee for inspection by all Owners. Within two years after the date of
mail to the Borrower at least 20 days prior to the proposed date of execution and delivery of any the first giving of such notice, the Issuer and the Trustee may enter into such Supplemental Indenture or the
Supplemental Indenture. Trustee may consent to such Amendment in substantially the form described in such notice, but only if
there shall have first been delivered to the Trustee (i) the required consents, in writing, of Owners and (ii)
Section 11.04. Amendment of Borrower Documents Without Owner Consent. Without the
the opinion of Bond Counsel required by Section 11.07 hereof.
consent of but with notice to the Owners, the Trustee may consent to any Amendment of any Borrower
Document from time to time as follows: If Owners of not less than the amount required by Section 11.03 or 11.05, as applicable, shall have
consented to and approved the execution and delivery thereof as herein provided, no Owner shall have any
(a) to cure any formal defect, omission, inconsistency or ambiguity in such Borrower
right to object to the execution and delivery of such Supplemental Indenture or other Amendment, or to
Document;
object to any of the terms and provisions contained therein or the operation thereof, or in any manner to
(b) to add to the covenants and agreements of the Issuer or the Borrower in such document question the propriety of the execution and delivery thereof, or to enjoin or restrain the Issuer, the Trustee
other covenants and agreements, or to add to the security for the Bonds or any Series of Bonds, or to or the Borrower from executing and delivering or consenting to the same or from taking or permitting any
surrender any right or power reserved or conferred upon the Issuer or the Borrower, if such surrender shall action pursuant to the provisions thereof.
not, in the judgment of the Trustee, materially adversely affect the interests of the Owners, the Trustee
Section 11.07. Opinions; Certificate. The Trustee shall not enter into or consent to any
being authorized to rely on an opinion of Counsel with respect thereto;
Amendment of any provision of any Bond Document unless there shall have been delivered to the Issuer
(c) to confirm, as further assurance, any lien on or pledge of the Project or the revenues and the Trustee an opinion of Bond Counsel stating that such Amendment will not adversely affect the
therefrom or of any other property, money, securities or funds subject to the Mortgages or any other security exclusion of interest on the Tax-Exempt Bonds from the gross income of the recipients thereof for federal
for the Loan Agreement; income tax purposes. In addition, the Trustee (i) may obtain, and shall be protected in relying on, an
(d) to preserve the exclusion of interest on the Tax-Exempt Bonds from gross income for opinion of Counsel to the effect that such Amendment is authorized or permitted by this Indenture and
federal income tax purposes, as set forth in an opinion of Bond Counsel; complies with the terms hereof; and (ii) may require, as a condition to entering into or consenting to any
such Amendment, a Compliance Certificate from the Borrower.
(e) to make changes required to obtain or maintain the rating on the Bonds from the Rating
Agency; Section 11.08. Effect of Amendments; Other Consents. Upon the execution and delivery of any
Supplemental Indenture or any Amendment to a Borrower Document pursuant to the provisions of this
(f) to provide for any Amendment specifically authorized or required by any provision of any Article, this Indenture or such Borrower Document shall be, and be deemed to be, modified and amended
Borrower Document; in accordance therewith, and the respective rights, duties and obligations under the Bond Documents of the
(g) in connection with any Additional Bonds; or
75 76

B-39
Issuer, the Trustee, the Borrower and all Owners shall thereafter be determined, exercised and enforced ARTICLE XII.
under the Bond Documents subject in all respects to such modifications and amendments.
MISCELLANEOUS
Notwithstanding anything herein to the contrary, (i) the Trustee shall not be required to enter into
or consent to any Amendment of any Bond Document which, in the sole judgment of the Trustee, might Section 12.01. Successors of the Issuer. In the event of the dissolution or transfer of functions
adversely affect the rights, obligations, powers, privileges, indemnities, immunities or other security of the Issuer, all the covenants, stipulations, promises and agreements in this Indenture contained, by or on
provided the Trustee herein or therein; and (ii) except as otherwise required hereby, the Trustee shall not behalf of, or for the benefit of, the Issuer, shall bind or inure to the benefit of the successors of the Issuer
enter into or consent to any Amendment of any Bond Document that affects the rights or obligations of the from time to time and any entity, officer, board, commission, agency or instrumentality to whom or to
Borrower or the Issuer unless the Borrower or the Issuer, respectively, enters into or consents to such which any power or duty of the Issuer shall be transferred.
Amendment.
Section 12.02. Parties in Interest. Except as herein otherwise specifically provided, nothing in
this Indenture expressed or implied is intended or shall be construed to confer upon any person, firm or
corporation other than the Issuer, the Borrower, the Trustee and the Owners any right, remedy or claim
under or by reason of this Indenture, this Indenture being intended to be for the sole and exclusive benefit
of the Issuer, the Borrower, the Trustee and the Owners.
Section 12.03. Severability. In case any one or more of the provisions of this Indenture or of any
Borrower Document or of the Bonds shall, for any reason, be held to be illegal or invalid, such illegality or
invalidity shall not affect any other provisions of this Indenture, such Borrower Document or such Bonds,
and this Indenture, the Borrower Documents and the Bonds shall be construed and enforced as if such illegal
or invalid provisions had not been contained herein or therein.
Section 12.04. No Personal Liability. No covenant or agreement contained in the Bonds or in
this Indenture shall be deemed to be the covenant or agreement of any official, director, officer, agent or
employee of the Issuer or the Trustee in his or her individual capacity, and neither the members of the Issuer
or the Trustee nor any official executing the Bonds shall be liable personally on the Bonds or be subject to
any personal liability or accountability by reason of the issuance thereof.
Section 12.05. Counterparts. This Indenture may be executed in any number of counterparts,
each of which, when so executed and delivered, shall be an original; but such counterparts shall together
constitute but one and the same Indenture.
Section 12.06. Governing Law. The laws of the State of Oklahoma shall govern the construction
and enforcement of this Indenture and of all the Bonds issued hereunder.
Section 12.07. Notices. Except as otherwise provided in this Indenture, all notices, certificates,
requests, requisitions or other communications by the Issuer or the Trustee pursuant to this Indenture shall
be in writing and shall be sufficiently given and shall be deemed given when delivered electronically or
mailed by overnight delivery by a nationally recognized service provider (such as Federal Express or United
Parcel Service) by registered mail, postage prepaid, or by facsimile transmission that produces receipt of
transmission, addressed as follows:
To the Issuer: The Oklahoma Development Finance Authority
9220 North Kelley Avenue
Oklahoma City, OK 73131
Telephone: (405) 842-1145
Attn: Michael Davis, President
Email: [email protected]

77 78

Copy to: Skarky Law Firm, PLLC Section 12.08. Holidays. If the date for making any payment or the last date for performance of
P.O. Box 20370 any act or the exercising of any right, as provided in this Indenture shall not be a Business Day, such
Oklahoma City, Oklahoma 73156 payment may, unless otherwise provided in this Indenture, be made or act performed or right exercised on
Telephone: (405) 641-4411 the next succeeding Business Day with the same force and effect as if done on the nominal date provided
Attn: Earl A. Skarky in this Indenture, and no interest shall accrue for the period after such nominal date.
Email: [email protected]

To the Trustee: UMB Bank, N.A.

5910 N Central Expressway, Suite 1900
Dallas, TX 75206
Attn: Israel Lugo
Telephone: (214) 389-5947
Email: [email protected]

To the Borrower: Leading Life Senior Living, Inc.

6370 Lyndon B. Johnson Freeway, Suite 276
Dallas, Texas 75240
Attn: Robert Mosteller, Chairman
Telephone: (469) 371-0446
Email: [email protected]

Copy to: Bracewell LLP

1445 Ross Avenue, Suite 3800
Dallas, TX 75202
Telephone: (214) 758-1079
Attn: Jonathan Leatherberry
Email: [email protected]

To the Manager: TLG Family Management, LLC

545 East John Carpenter Freeway, Suite 500
Irving, Texas 75062
Attention: President
Telephone: (214) 845-4500
Email: [email protected]

To the Underwriter: Piper Jaffray & Co.

1790 Hughes Landing Blvd.
Suite 400
The Woodlands, Texas 77380
Attn: Rick Lohr, Managing Director
Telephone: (281) 907-4918

A copy of any communication given by or to the Borrower shall also be sent, as provided above,
to the Manager at the address listed above. Any of the foregoing may, by notice given hereunder to each
of the others, designate any further or different addresses to which subsequent notices, certificates, requests
or other communications shall be sent hereunder or under the Loan Agreement.

79
80
B-40
 IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed by its duly TRUSTEE
authorized officer and the Trustee has caused this Indenture to be executed on its behalf by its duly
authorized officer, all as of the day and year first above written.
UMB BANK, N.A.
ISSUER

THE OKLAHOMA DEVELOPMENT By: ___________________________________

FINANCE AUTHORITY Authorized Representative

By ___________________________________
President

[Signature Page to Indenture] [Signature Page to Indenture]

81 82

EXHIBIT A-1 This Bond is one of a duly authorized issue of revenue bonds of the Issuer, aggregating $14,640,000
in principal amount, designated as “The Oklahoma Development Finance Authority Senior Living Revenue
(FORM OF SERIES 2017A-1 BOND)
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017A-1 (the “Series 2017A-1
NOTICE: Unless this certificate is presented by an authorized representative of The Bonds”). Simultaneously with the issuance of the Series 2017A-1 Bonds, the Issuer is issuing its Senior
Depository Trust Company to the Issuer or its agent for registration of transfer, exchange Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-
or payment, and any certificate issued is registered in the name of Cede & Co. or such other 2 (the “Series 2017A-2 Bonds” and, together with the Series 2017A-1 Bonds, the “Series 2017A Bonds”)
name as requested by an authorized representative of The Depository Trust Company and and Second Tier Series 2017B (the “Series 2017B Bonds,” which together with the Series 2017A Bonds
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE are referred to herein as the “Series 2017 Bonds”). The Series 2017B Bonds are issued on a subordinate
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL basis to the Series 2017A Bonds. The Indenture authorizes the Issuer to issue additional bonds on a parity
since the registered owner hereof, Cede & Co., has an interest herein. with the Series 2017A Bonds for purposes of refunding the Series 2017A Bonds. Additional bonds may
R-____ $________ also be issued pursuant to the terms of the Indenture on a basis subordinate to any Outstanding Series 2017
Bonds. The Series 2017 Bonds and any additional bonds issued pursuant to the terms of the Indenture are
referred to herein as the “Bonds”. The Series 2017 Bonds are issued under and pursuant to the laws of the
UNITED STATES OF AMERICA State of Oklahoma, particularly Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, Title
STATE OF OKLAHOMA 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended, and Title 74, Oklahoma Statutes 2016,
Section 5062.1 et seq., as amended (collectively, the “Act”), and a Trust Indenture dated as of December
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY 1, 2017 (as amended and supplemented from time to time, the “Indenture”), by and between the Issuer and
SENIOR LIVING REVENUE BOND UMB Bank, N.A. (the “Trustee”).
(LEADING LIFE SENIOR LIVING, INC. – AUTUMN LEAVES PROJECT)
SERIES 2017A-1 THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE ISSUER PAYABLE SOLELY
FROM THE SENIOR BONDS TRUST ESTATE PLEDGED TO SUCH PAYMENT PURSUANT TO
THIS BOND AND THE ISSUE OF WHICH IT FORMS A PART ARE NOT THE INDENTURE. THE BONDS AND THE INTEREST THEREON DO NOT CONSTITUTE NOR
GENERAL OBLIGATIONS OF THE ISSUER BUT ARE LIMITED GIVE RISE TO A PECUNIARY LIABILITY, GENERAL OR MORAL OBLIGATION OR A PLEDGE
OBLIGATIONS PAYABLE SOLELY FROM THE MONEY AND PROPERTIES OF THE FULL FAITH AND CREDIT OR TAXING POWER OF THE ISSUER, THE STATE OF
PLEDGED FOR PAYMENT THEREOF. OKLAHOMA, OR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA WITHIN THE
MATURITY DATE DATED DATE INTEREST RATE CUSIP NO. MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATIONS. NEITHER THE STATE
OF OKLAHOMA NOR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA NOR
July 1, 20__ _____% __________ THE ISSUER SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, THE INTEREST
THEREON OR OTHER COSTS INCIDENT THERETO EXCEPT FROM REVENUES PLEDGED
THEREFOR UNDER THE INDENTURE, ALL AS MORE FULLY SET FORTH IN THE INDENTURE.
REGISTERED OWNER: NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER, IF ANY, OF THE ISSUER,
THE STATE OF OKLAHOMA, NOR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF THE BONDS OR THE INTEREST THEREON OR OTHER
PRINCIPAL AMOUNT: COSTS INCIDENT THERETO.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY (the “Issuer”), a public trust of PREMIUM, IF ANY, OR INTEREST ON THIS BOND AGAINST ANY PAST, PRESENT OR FUTURE
the State of Oklahoma, for value received, promises to pay, subject to the provisions hereof and of the OFFICER, DIRECTOR, MEMBER, EMPLOYEE OR AGENT OF THE ISSUER, OR OF ANY
Indenture, to the Registered Owner named above on the Maturity Date specified above, or upon earlier SUCCESSOR TO THE ISSUER, AS SUCH, EITHER DIRECTLY OR THROUGH THE ISSUER OR
redemption as described herein, the Principal Amount shown above and to pay interest on the unpaid ANY SUCCESSOR TO THE ISSUER, UNDER ANY RULE OF LAW OR EQUITY, STATUTE OR
principal amount hereof at the Interest Rate specified above until payment of the principal or redemption CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR
price hereof has been made. Interest on this The Oklahoma Development Finance Authority Senior Living OTHERWISE, AND ALL SUCH LIABILITY OF ANY SUCH OFFICERS, DIRECTORS, MEMBERS,
Revenue Bond (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017A-1 (this “Bond”) EMPLOYEES OR AGENTS, AS SUCH, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A
is payable on January 1 and July 1, commencing July 1, 2018 (each such date being hereinafter referred to CONDITION OF, AND CONSIDERATION FOR, THE EXECUTION AND ISSUANCE OF THIS
as an “Interest Payment Date”) and on any other date on which payment of principal of this Bond is due. BOND.
Interest hereon will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2017A-1 Bonds stated to mature on July 1 of the years 2028, 2038 and 2053 are referred
Any term used herein as a defined term but not defined herein shall be as defined in the Indenture. to herein as the “Term Bonds.” The Term Bonds are subject to mandatory sinking fund redemption prior
to their stated maturities from money required to be deposited in the Senior Bonds Bond Fund for such
This Bond is payable in lawful money of the United States of America. The principal of and purpose and shall be redeemed in part, by lot or other customary method, at the principal amount thereof
premium, if any, on this Bond is payable at the Designated Office of the Trustee (as hereinafter defined) in plus accrued interest to the date of redemption in the principal amounts on July 1 in each of the years as set
Dallas, Texas, upon presentation and surrender of this Bond. forth in the Indenture.

A-1-1 B-41 A-1-2

 The principal amount of the Term Bonds of any stated maturity bearing interest at the same interest Neither the members of the Governing Body of the Issuer nor any person executing this Bond shall
rate required to be redeemed on each date set forth in the Indenture shall be reduced by the principal amount be personally liable on this Bond or be subject to any personal liability or accountability by reason of the
of the Term Bonds of such stated maturity bearing such rate of interest specified by Borrower request at issuance of this Bond.
least 45 days prior to the redemption date that have been either (i) purchased by or on behalf of the Borrower
This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or
and delivered to the Trustee for cancellation, or (ii) redeemed other than through mandatory sinking fund
security under the Indenture unless the Certificate of Authentication hereon has been executed by the
redemption, and that have not been previously made the basis for a reduction of the principal amount of
Trustee by manual signature.
Term Bonds of such stated maturity and interest rate to be redeemed on a sinking fund redemption date.
The Series 2017A-1 Bonds are also subject to mandatory redemption upon the occurrence of certain
events, optional redemption, special mandatory redemption and special redemption upon sale of facilities
as set forth in the Indenture.
Reference is hereby made to the Indenture for a description of the rights, duties and obligations of
the Issuer, the Trustee and the Owners of the Bonds, the terms upon which the Bonds are issued, a
description of the property and interests pledged for the payment of the Bonds, the relative claims of the
various series of Bonds against such property and interests, the terms upon which such property and interest
are pledged and the terms and conditions upon which the Bonds will be deemed to be paid, at or prior to
maturity or redemption of the Bonds, if any, upon the making of provision for the payment thereof in the
manner set forth in the Indenture. The terms and provisions contained in the Indenture are hereby
incorporated herein by reference and the Owner of this Bond, by purchase hereof, assents to all of such
terms and provisions.
The Series 2017 Bonds are being issued for the purpose of providing financing for the acquisition,
rehabilitation and equipping of two memory care facilities located in the State of Oklahoma (the “Project”),
paying certain capital expenditures and startup expenses, funding a debt service reserve fund for the Series
2017B Bonds and paying costs of issuance of the Series 2017 Bonds. The proceeds of the Series 2017
Bonds are being used by the Issuer to finance a loan by the Issuer to Leading Life Senior Living, Inc. (the
“Borrower”), a nonprofit corporation organized and existing under the laws of the State of Texas, pursuant
to a Loan Agreement dated as of December 1, 2017 (as amended and supplemented from time to time, the
“Loan Agreement”) among the Issuer, the Trustee, and the Borrower. Pursuant to the Loan Agreement,
the Borrower is obligated to make payments sufficient to pay principal of, premium, if any, and interest on
the Series 2017 Bonds, which obligation is evidenced by promissory notes (the “Series 2017 Notes”). The
liability of the Borrower under the Loan Agreement is limited as provided therein.
The Bonds are secured by a mortgage lien on and security interest in the Project granted pursuant
to the two Mortgage with Power of Sale and Security Agreements relating to each of the two facilities
comprising the Project (collectively, the “Mortgages”). The Bonds are secured by the assignment of
payments made in respect of the respective Note, which is further secured by the Mortgages. The Senior
Bonds Bond Fund has been specifically pledged and set aside to secure or provide for the payment of
principal of and interest on the Series 2017A Bonds.
Reference is hereby made to the Indenture, the Loan Agreement and the Mortgages, copies of which
are on file with the Trustee, for the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Issuer, the Borrower, the Trustee and the Owners of the
Bonds, the terms upon which this Bond is issued, and the terms and conditions upon which this Bond will
be deemed to be paid, at or prior to maturity or prepayment of this Bond, upon the making of provision for
the payment hereof in the manner set forth in the Indenture, to all of the terms and conditions of which the
Owner of this Bond hereby assents. The Owner of this Bond, by the acceptance hereof, is deemed to have
agreed and consented to the terms and provisions of the Indenture, the Loan Agreement and the Mortgages.
It is hereby certified, recited and declared that all acts, conditions and things required by the
Constitution and laws of the State of Oklahoma to exist, to have happened and to have been performed,
precedent to and in the execution and delivery of the Indenture and the issuance of this Bond, do exist, have
happened and have been performed in regular and due form as required by law.

A-1-3 A-1-4

IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name and on its ASSIGNMENT
behalf by the manual or facsimile signature of the Chairman, Vice Chairman or President of the Issuer, and
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
has caused its seal or a facsimile thereof to be reproduced hereon and attested by the manual or facsimile
signature of the Secretary or Assistant Secretary of the Issuer.
(Please print or typewrite Name and Address,
THE OKLAHOMA DEVELOPMENT
including Zip Code, and Federal Taxpayer Identification or
FINANCE AUTHORITY
Social Security Number of Assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints

By: __________________________________ Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full
President power of substitution in the premises.

Attest: Dated: ___________

Signature guaranteed by:

By: ___________________________________
Assistant Secretary
_____________________________________ _____________________________________
NOTICE: Signature must be guaranteed by a NOTICE: The signature to this Assignment must
member firm of the New York Stock Exchange or correspond with the name as it appears on the face
(SEAL)
a commercial bank of trust company of the within Bond in every particular, without
alteration or enlargement or any change
CERTIFICATE OF AUTHENTICATION whatsoever.

This Bond is one of the Series 2017A-1 Bonds described in the Indenture referred to herein.
Date of Authentication: ___________________.
UMB BANK, N.A., as Trustee

By: __________________________________
Authorized Signatory

A-1-5 B-42 A-1-6

 EXHIBIT A-2 This Bond is one of a duly authorized issue of revenue bonds of the Issuer, aggregating $3,240,000
in principal amount, designated as “The Oklahoma Development Finance Authority Senior Living Revenue
(FORM OF SERIES 2017A-2 BOND)
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-2 (the “Series
NOTICE: Unless this certificate is presented by an authorized representative of The 2017A-2 Bonds”). Simultaneously with the issuance of the Series 2017A-2 Bonds, the Issuer is issuing its
Depository Trust Company to the Issuer or its agent for registration of transfer, exchange Senior Living Revenue Bonds (Leading Lives Senior Living, Inc. – Autumn Leaves Project) Series 2017A-
or payment, and any certificate issued is registered in the name of Cede & Co. or such other 1 (the “Series 2017A-1 Bonds” and, together with the Series 2017A-2 Bonds, the “Series 2017A Bonds”),
name as requested by an authorized representative of The Depository Trust Company and Second Tier Series 2017B (the “Series 2017B Bonds,” which together with the Series 2017A Bonds are
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE referred to herein as the “Series 2017 Bonds”). The Series 2017B Bonds are issued on a subordinate basis
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL to the Series 2017A Bonds. The Indenture authorizes the Issuer to issue additional bonds on a parity with
since the registered owner hereof, Cede & Co., has an interest herein. the Series 2017A Bonds for purposes of refunding the Series 2017A Bonds. Additional bonds may also
R-____ $________ be issued pursuant to the terms of the Indenture on a basis subordinate to any Outstanding Series 2017
Bonds. The Series 2017 Bonds and any additional bonds issued pursuant to the terms of the Indenture are
referred to herein as the “Bonds”. The Series 2017 Bonds are issued under and pursuant to the laws of the
UNITED STATES OF AMERICA State of Oklahoma, particularly Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, Title
STATE OF OKLAHOMA 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended, and Title 74, Oklahoma Statutes 2016,
Section 5062.1 et seq., as amended (collectively, the “Act”), and a Trust Indenture dated as of December
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY 1, 2017 (as amended and supplemented from time to time, the “Indenture”), by and between the Issuer and
SENIOR LIVING REVENUE BOND UMB Bank, N.A. (the “Trustee”).
(LEADING LIFE SENIOR LIVING, INC. – AUTUMN LEAVES PROJECT)
TAXABLE SERIES 2017A-2 THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE ISSUER PAYABLE SOLELY
FROM THE SENIOR BONDS TRUST ESTATE PLEDGED TO SUCH PAYMENT PURSUANT TO
THIS BOND AND THE ISSUE OF WHICH IT FORMS A PART ARE NOT THE INDENTURE. THE BONDS AND THE INTEREST THEREON DO NOT CONSTITUTE NOR
GENERAL OBLIGATIONS OF THE ISSUER BUT ARE LIMITED GIVE RISE TO A PECUNIARY LIABILITY, GENERAL OR MORAL OBLIGATION OR A PLEDGE
OBLIGATIONS PAYABLE SOLELY FROM THE MONEY AND PROPERTIES OF THE FULL FAITH AND CREDIT OR TAXING POWER OF THE ISSUER, THE STATE OF
PLEDGED FOR PAYMENT THEREOF. OKLAHOMA, OR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA WITHIN THE
MATURITY DATE DATED DATE INTEREST RATE CUSIP NO. MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATIONS. NEITHER THE STATE
OF OKLAHOMA NOR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA NOR
July 1, 20__ _____% __________ THE ISSUER SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, THE INTEREST
THEREON OR OTHER COSTS INCIDENT THERETO EXCEPT FROM REVENUES PLEDGED
THEREFOR UNDER THE INDENTURE, ALL AS MORE FULLY SET FORTH IN THE INDENTURE.
REGISTERED OWNER: NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER, IF ANY, OF THE ISSUER,
THE STATE OF OKLAHOMA, NOR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF THE BONDS OR THE INTEREST THEREON OR OTHER
PRINCIPAL AMOUNT: COSTS INCIDENT THERETO.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY (the “Issuer”), a public trust of PREMIUM, IF ANY, OR INTEREST ON THIS BOND AGAINST ANY PAST, PRESENT OR FUTURE
the State of Oklahoma, for value received, promises to pay, subject to the provisions hereof and of the OFFICER, DIRECTOR, MEMBER, EMPLOYEE OR AGENT OF THE ISSUER, OR OF ANY
Indenture, to the Registered Owner named above on the Maturity Date specified above, or upon earlier SUCCESSOR TO THE ISSUER, AS SUCH, EITHER DIRECTLY OR THROUGH THE ISSUER OR
redemption as described herein, the Principal Amount shown above and to pay interest on the unpaid ANY SUCCESSOR TO THE ISSUER, UNDER ANY RULE OF LAW OR EQUITY, STATUTE OR
principal amount hereof at the Interest Rate specified above until payment of the principal or redemption CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR
price hereof has been made. Interest on this The Oklahoma Development Finance Authority Senior Living OTHERWISE, AND ALL SUCH LIABILITY OF ANY SUCH OFFICERS, DIRECTORS, MEMBERS,
Revenue Bond (Leading Life Senior Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-2 (this EMPLOYEES OR AGENTS, AS SUCH, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A
“Bond”) is payable on January 1 and July 1, commencing July 1, 2018 (each such date being hereinafter CONDITION OF, AND CONSIDERATION FOR, THE EXECUTION AND ISSUANCE OF THIS
referred to as an “Interest Payment Date”) and on any other date on which payment of principal of this BOND.
Bond is due. Interest hereon will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2017A-2 Bonds stated to mature on July 1 of the years 2023, 2028 and 2033 are referred
Any term used herein as a defined term but not defined herein shall be as defined in the Indenture. to herein as the “Term Bonds.” The Term Bonds are subject to mandatory sinking fund redemption prior
to their stated maturities from money required to be deposited in the Senior Bonds Bond Fund for such
This Bond is payable in lawful money of the United States of America. The principal of and purpose and shall be redeemed in part, by lot or other customary method, at the principal amount thereof
premium, if any, on this Bond is payable at the Designated Office of the Trustee (as hereinafter defined) in plus accrued interest to the date of redemption in the principal amounts on July 1 in each of the years as set
Dallas, Texas, upon presentation and surrender of this Bond. forth in the Indenture.

A-2-1 A-2-2

The principal amount of the Term Bonds of any stated maturity bearing interest at the same interest Neither the members of the Governing Body of the Issuer nor any person executing this Bond shall
rate required to be redeemed on each date set forth in the Indenture shall be reduced by the principal amount be personally liable on this Bond or be subject to any personal liability or accountability by reason of the
of the Term Bonds of such stated maturity bearing such rate of interest specified by Borrower request at issuance of this Bond.
least 45 days prior to the redemption date that have been either (i) purchased by or on behalf of the Borrower
This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or
and delivered to the Trustee for cancellation, or (ii) redeemed other than through mandatory sinking fund
security under the Indenture unless the Certificate of Authentication hereon has been executed by the
redemption, and that have not been previously made the basis for a reduction of the principal amount of
Trustee by manual signature.
Term Bonds of such stated maturity and interest rate to be redeemed on a sinking fund redemption date.
The Series 2017A-2 Bonds are also subject to mandatory redemption upon the occurrence of certain
events, optional redemption and special redemption upon sale of facilities as set forth in the Indenture.
Reference is hereby made to the Indenture for a description of the rights, duties and obligations of
the Issuer, the Trustee and the Owners of the Bonds, the terms upon which the Bonds are issued, a
description of the property and interests pledged for the payment of the Bonds, the relative claims of the
various series of Bonds against such property and interests, the terms upon which such property and interest
are pledged and the terms and conditions upon which the Bonds will be deemed to be paid, at or prior to
maturity or redemption of the Bonds, if any, upon the making of provision for the payment thereof in the
manner set forth in the Indenture. The terms and provisions contained in the Indenture are hereby
incorporated herein by reference and the Owner of this Bond, by purchase hereof, assents to all of such
terms and provisions.
The Series 2017 Bonds are being issued for the purpose of providing financing for the acquisition,
rehabilitation and equipping of two memory care facilities located in the State of Oklahoma (the “Project”),
paying certain capital expenditures and startup expenses, funding a debt service reserve fund for the Series
2017B Bonds and paying costs of issuance of the Series 2017 Bonds. The proceeds of the Series 2017
Bonds are being used by the Issuer to finance a loan by the Issuer to Leading Life Senior Living, Inc. (the
“Borrower”), a nonprofit corporation organized and existing under the laws of the State of Texas, pursuant
to a Loan Agreement dated as of December 1, 2017 (as amended and supplemented from time to time, the
“Loan Agreement”) among the Issuer, the Trustee, and the Borrower. Pursuant to the Loan Agreement,
the Borrower is obligated to make payments sufficient to pay principal of, premium, if any, and interest on
the Series 2017 Bonds, which obligation is evidenced by promissory notes (the “Series 2017 Notes”). The
liability of the Borrower under the Loan Agreement is limited as provided therein.
The Bonds are secured by a mortgage lien on and security interest in the Project granted pursuant
to the two Mortgage with Power of Sale and Security Agreements relating to each of the two facilities
comprising the Project (collectively, the “Mortgages”). The Bonds are secured by the assignment of
payments made in respect of the respective Note, which is further secured by the Mortgages. The Senior
Bonds Bond Fund has been specifically pledged and set aside to secure or provide for the payment of
principal of and interest on the Series 2017A Bonds.
Reference is hereby made to the Indenture, the Loan Agreement and the Mortgages, copies of which
are on file with the Trustee, for the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Issuer, the Borrower, the Trustee and the Owners of the
Bonds, the terms upon which this Bond is issued, and the terms and conditions upon which this Bond will
be deemed to be paid, at or prior to maturity or prepayment of this Bond, upon the making of provision for
the payment hereof in the manner set forth in the Indenture, to all of the terms and conditions of which the
Owner of this Bond hereby assents. The Owner of this Bond, by the acceptance hereof, is deemed to have
agreed and consented to the terms and provisions of the Indenture, the Loan Agreement and the Mortgages.
It is hereby certified, recited and declared that all acts, conditions and things required by the
Constitution and laws of the State of Oklahoma to exist, to have happened and to have been performed,
precedent to and in the execution and delivery of the Indenture and the issuance of this Bond, do exist, have
happened and have been performed in regular and due form as required by law.

A-2-3 B-43 A-2-4

 IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name and on its ASSIGNMENT
behalf by the manual or facsimile signature of the Chairman, Vice Chairman or President of the Issuer, and
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
has caused its seal or a facsimile thereof to be reproduced hereon and attested by the manual or facsimile
signature of the Secretary or Assistant Secretary of the Issuer.
(Please print or typewrite Name and Address,
THE OKLAHOMA DEVELOPMENT
including Zip Code, and Federal Taxpayer Identification or
FINANCE AUTHORITY
Social Security Number of Assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints

By: __________________________________ Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full
President power of substitution in the premises.

Attest: Dated: ___________

Signature guaranteed by:

By: ___________________________________
Assistant Secretary
_____________________________________ _____________________________________
NOTICE: Signature must be guaranteed by a NOTICE: The signature to this Assignment must
member firm of the New York Stock Exchange or correspond with the name as it appears on the face
(SEAL)
a commercial bank of trust company of the within Bond in every particular, without
alteration or enlargement or any change
CERTIFICATE OF AUTHENTICATION whatsoever.

This Bond is one of the Series 2017A-2 Bonds described in the Indenture referred to herein.
Date of Authentication: ___________________.
UMB BANK, N.A., as Trustee

By: __________________________________
Authorized Signatory

A-2-5 A-2-6

EXHIBIT B This Bond is one of a duly authorized issue of revenue bonds of the Issuer, aggregating $12,395,000
in principal amount, designated as “The Oklahoma Development Finance Authority Senior Living Revenue
(FORM OF SERIES 2017B BOND)
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B (the “Series
NOTICE: Unless this certificate is presented by an authorized representative of The Depository 2017B Bonds”). Simultaneously with the issuance of the Series 2017B Bonds, the Issuer is issuing its
Trust Company to the Issuer or its agent for registration of transfer, exchange or payment, and any Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017A-
certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized 1 and Taxable Series 2017A-2 (the “Series 2017A Bonds,” which together with the Series 2017B Bonds
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY are referred to herein as the “Series 2017 Bonds”). The Series 2017B Bonds are issued on a subordinate
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY basis to the Series 2017A Bonds. The Indenture authorizes the Issuer to issue additional bonds on a parity
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. with the Series 2017B Bonds for purposes of refunding the Series 2017B Bonds. Additional bonds may
R-____ $________ also be issued pursuant to the terms of the Indenture on a basis subordinate to any Outstanding Series 2017
Bonds. The Series 2017 Bonds and any additional bonds issued pursuant to the terms of the Indenture are
referred to herein as the “Bonds”. The Series 2017 Bonds are issued under and pursuant to the laws of the
UNITED STATES OF AMERICA State of Oklahoma, particularly Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, Title
STATE OF OKLAHOMA 60, Oklahoma Statutes 2016, Section 175.1 et seq., as amended, and Title 74, Oklahoma Statutes 2016,
Section 5062.1 et seq., as amended (collectively, the “Act”), and a Trust Indenture dated as of December
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY 1, 2017 (as amended and supplemented from time to time, the “Indenture”), by and between the Issuer and
SENIOR LIVING REVENUE BOND UMB Bank, N.A. (the “Trustee”).
(LEADING LIFE SENIOR LIVING, INC. – AUTUMN LEAVES PROJECT)
SECOND TIER SERIES 2017B THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE ISSUER PAYABLE SOLELY
FROM THE SENIOR BONDS TRUST ESTATE PLEDGED TO SUCH PAYMENT PURSUANT TO
THIS BOND AND THE ISSUE OF WHICH IT FORMS A PART ARE NOT THE INDENTURE. THE BONDS AND THE INTEREST THEREON DO NOT CONSTITUTE NOR
GENERAL OBLIGATIONS OF THE ISSUER BUT ARE LIMITED GIVE RISE TO A PECUNIARY LIABILITY, GENERAL OR MORAL OBLIGATION OR A PLEDGE
OBLIGATIONS PAYABLE SOLELY FROM THE MONEY AND PROPERTIES OF THE FULL FAITH AND CREDIT OR TAXING POWER OF THE ISSUER, THE STATE OF
PLEDGED FOR PAYMENT THEREOF. OKLAHOMA, OR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA WITHIN THE
MATURITY DATE DATED DATE INTEREST RATE CUSIP NO. MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATIONS. NEITHER THE STATE
OF OKLAHOMA NOR ANY POLITICAL SUBDIVISION OF THE STATE OF OKLAHOMA NOR
July 1, 20__ _____% __________ THE ISSUER SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, THE INTEREST
THEREON OR OTHER COSTS INCIDENT THERETO EXCEPT FROM REVENUES PLEDGED
THEREFOR UNDER THE INDENTURE, ALL AS MORE FULLY SET FORTH IN THE INDENTURE.
REGISTERED OWNER: NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER, IF ANY, OF THE ISSUER,
THE STATE OF OKLAHOMA, NOR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF THE BONDS OR THE INTEREST THEREON OR OTHER
PRINCIPAL AMOUNT: COSTS INCIDENT THERETO.
NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY (the “Issuer”), a public trust of PREMIUM, IF ANY, OR INTEREST ON THIS BOND AGAINST ANY PAST, PRESENT OR FUTURE
the State of Oklahoma, for value received, promises to pay, subject to the provisions hereof and of the OFFICER, DIRECTOR, MEMBER, EMPLOYEE OR AGENT OF THE ISSUER, OR OF ANY
Indenture, to the Registered Owner named above on the Maturity Date specified above, or upon earlier SUCCESSOR TO THE ISSUER, AS SUCH, EITHER DIRECTLY OR THROUGH THE ISSUER OR
redemption as described herein, the Principal Amount shown above and to pay interest on the unpaid ANY SUCCESSOR TO THE ISSUER, UNDER ANY RULE OF LAW OR EQUITY, STATUTE OR
principal amount hereof at the Interest Rate specified above until payment of the principal or redemption CONSTITUTION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR
price hereof has been made. Interest on this The Oklahoma Development Finance Authority Senior Living OTHERWISE, AND ALL SUCH LIABILITY OF ANY SUCH OFFICERS, DIRECTORS, MEMBERS,
Revenue Bond (Leading Life Senior Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B (this EMPLOYEES OR AGENTS, AS SUCH, IS HEREBY EXPRESSLY WAIVED AND RELEASED AS A
“Bond”) is payable on January 1 and July 1, commencing July 1, 2018 (each such date being hereinafter CONDITION OF, AND CONSIDERATION FOR, THE EXECUTION AND ISSUANCE OF THIS
referred to as an “Interest Payment Date”) and on any other date on which payment of principal of this BOND.
Bond is due. Interest hereon will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2017B Bonds stated to mature on July 1 of the years 2028, 2038 and 2053 are referred
Any term used herein as a defined term but not defined herein shall be as defined in the Indenture. to herein as the “Term Bonds.” The Term Bonds are subject to mandatory sinking fund redemption prior to
their stated maturities from money required to be deposited in the Second Tier Bonds Bond Fund for such
This Bond is payable in lawful money of the United States of America. The principal of and purpose and shall be redeemed in part, by lot or other customary method, at the principal amount thereof
premium, if any, on this Bond is payable at the Designated Office of the Trustee (as hereinafter defined) in plus accrued interest to the date of redemption in the principal amounts on July 1 in each of the years as set
Dallas, Texas, upon presentation and surrender of this Bond. forth in the Indenture.

B-1 B-44 B-2

 The principal amount of the Term Bonds of any stated maturity bearing interest at the same interest It is hereby certified, recited and declared that all acts, conditions and things required by the
rate required to be redeemed on each date set forth in the Indenture shall be reduced by the principal amount Constitution and laws of the State of Oklahoma to exist, to have happened and to have been performed,
of the Term Bonds of such stated maturity bearing such rate of interest specified by Borrower request at precedent to and in the execution and delivery of the Indenture and the issuance of this Bond, do exist, have
least 45 days prior to the redemption date that have been either (i) purchased by or on behalf of the Borrower happened and have been performed in regular and due form as required by law.
and delivered to the Trustee for cancellation, or (ii) redeemed other than through mandatory sinking fund
Neither the members of the Governing Body of the Issuer nor any person executing this Bond shall
redemption, and that have not been previously made the basis for a reduction of the principal amount of
be personally liable on this Bond or be subject to any personal liability or accountability by reason of the
Term Bonds of such stated maturity and interest rate to be redeemed on a sinking fund redemption date.
issuance of this Bond.
The Series 2017B Bonds are also subject to mandatory redemption upon the occurrence of certain
This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or
events, optional redemption, special mandatory redemption, special redemption upon sale of facilities and
security under the Indenture unless the Certificate of Authentication hereon has been executed by the
mandatory redemption from debt service reserve funds as set forth in the Indenture.
Trustee by manual signature.
Reference is hereby made to the Indenture for a description of the rights, duties and obligations of
the Issuer, the Trustee and the Owners of the Bonds, the terms upon which the Bonds are issued, a
description of the property and interests pledged for the payment of the Bonds, the relative claims of the
various series of Bonds against such property and interests, the terms upon which such property and interest
are pledged and the terms and conditions upon which the Bonds will be deemed to be paid, at or prior to
maturity or redemption of the Bonds, if any, upon the making of provision for the payment thereof in the
manner set forth in the Indenture. The terms and provisions contained in the Indenture are hereby
incorporated herein by reference and the Owner of this Bond, by purchase hereof, assents to all of such
terms and provisions.
The Series 2017 Bonds are being issued for the purpose of providing financing for the acquisition,
rehabilitation and equipping of two memory care facilities located in the State of Oklahoma (the “Project”),
paying certain capital expenditures and startup expenses, funding a debt service reserve fund for the Series
2017B Bonds and paying costs of issuance of the Series 2017 Bonds. The proceeds of the Series 2017
Bonds are being used by the Issuer to finance a loan by the Issuer to Leading Life Senior Living, Inc. (the
“Borrower”), a nonprofit corporation organized and existing under the laws of the State of Texas, pursuant
to a Loan Agreement dated as of December 1, 2017 (as amended and supplemented from time to time, the
“Loan Agreement”) among the Issuer, the Trustee, and the Borrower. Pursuant to the Loan Agreement,
the Borrower is obligated to make payments sufficient to pay principal of, premium, if any, and interest on
the Series 2017 Bonds, which obligation is evidenced by promissory notes (the “Series 2017 Notes”). The
liability of the Borrower under the Loan Agreement is limited as provided therein.
The Bonds are secured by a mortgage lien on and security interest in the Project granted pursuant
to the two Mortgage with Power of Sale and Security Agreements relating to each of the two facilities
comprising the Project (collectively, the “Mortgages”). The Bonds are secured by the assignment of
payments made in respect of the respective Note, which is further secured by the Mortgages. The Second
Tier Bonds Bond Fund and the Second Tier Bonds Debt Service Reserve Fund have been specifically
pledged and set aside to secure or provide for the payment of principal of and interest on the Series 2017B
Bonds.
Reference is hereby made to the Indenture, the Loan Agreement and the Mortgages, copies of which
are on file with the Trustee, for the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Issuer, the Borrower, the Trustee and the Owners of the
Bonds, the terms upon which this Bond is issued, and the terms and conditions upon which this Bond will
be deemed to be paid, at or prior to maturity or prepayment of this Bond, upon the making of provision for
the payment hereof in the manner set forth in the Indenture, to all of the terms and conditions of which the
Owner of this Bond hereby assents. The Owner of this Bond, by the acceptance hereof, is deemed to have
agreed and consented to the terms and provisions of the Indenture, the Loan Agreement and the Mortgages.

B-3 B-4

IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name and on its ASSIGNMENT
behalf by the manual or facsimile signature of the Chairman, Vice Chairman or President of the Issuer, and
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
has caused its seal or a facsimile thereof to be reproduced hereon and attested by the manual or facsimile
signature of the Secretary or Assistant Secretary of the Issuer.
(Please print or typewrite Name and Address,
THE OKLAHOMA DEVELOPMENT
including Zip Code, and Federal Taxpayer Identification or
FINANCE AUTHORITY
Social Security Number of Assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints

By: __________________________________ Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full
President power of substitution in the premises.

Attest: Dated: ___________

Signature guaranteed by:

By: ___________________________________
Assistant Secretary
_____________________________________ _____________________________________
NOTICE: Signature must be guaranteed by a NOTICE: The signature to this Assignment must
member firm of the New York Stock Exchange or correspond with the name as it appears on the face
(SEAL)
a commercial bank of trust company of the within Bond in every particular, without
alteration or enlargement or any change
CERTIFICATE OF AUTHENTICATION whatsoever.

This Bond is one of the Series 2017B Bonds described in the Indenture referred to herein.
Date of Authentication: ___________________.
UMB BANK, N.A., as Trustee

By: __________________________________
Authorized Signatory

B-6
B-5 B-45
 TABLE OF CONTENTS

RECORDING REQUESTED BY AND Page

WHEN RECORDED MAIL TO:
ARTICLE I
Ted Brizzolara
McCall, Parkhurst & Horton L.L.P. DEFINITIONS 
717 North Harwood, 9th Floor
Dallas, Texas 75201 SECTION 1.1 Definitions ................................................................................................................... 5 
ARTICLE II

RULES OF CONSTRUCTION 
SECTION 2.1 Rules of Construction .................................................................................................. 9 
SECTION 2.2 Recitals Incorporated Herein by Reference ................................................................. 9 
ARTICLE III

MORTGAGE WITH POWER OF SALE AND SECURITY AGREEMENT TITLE; FUTURE ADVANCEMENTS 
SECTION 3.1 Mortgagor’s Representations and Covenants Regarding Title .................................... 9 
SECTION 3.2 Future Advancements ................................................................................................ 10 
dated as of December 1, 2017
ARTICLE IV

by and between ASSIGNMENT OF RENTS 

SECTION 4.1 Assignment ................................................................................................................ 10 
LEADING LIFE SENIOR LIVING, INC., SECTION 4.2 Limited License ......................................................................................................... 10 
as Mortgagor
SECTION 4.3 Affirmative Covenants .............................................................................................. 11 
SECTION 4.4 Negative Covenants................................................................................................... 11 
and
SECTION 4.5 Appointment of Attorney-in Fact .............................................................................. 12 
SECTION 4.6 Default ....................................................................................................................... 12 
UMB BANK, N.A.,
as Mortgagee SECTION 4.7 No Obligation of Mortgagee ..................................................................................... 13 
SECTION 4.8 No Waiver of Mortgagee’s Rights ............................................................................ 13 
SECTION 4.9 Warranties Concerning Leases and Rents ................................................................. 13 
SECTION 4.10 Termination of Assignment of Leases....................................................................... 14 

A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SECTION 4.11 Right to Enforce the Leases....................................................................................... 14 
SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY SECTION 4.12 Mortgagee Not Mortgagee-in-Possession ................................................................. 14 
AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON ARTICLE V
DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.
SECURITY AGREEMENT 
SECTION 5.1 Grant of Security Interest .......................................................................................... 15 
SECTION 5.2 Debtor’s Covenants ................................................................................................... 15 
SECTION 5.3 Debtor’s Warranties and Representations ................................................................. 16 

TABLE OF CONTENTS TABLE OF CONTENTS

(continued) (continued)

Page Page

ARTICLE VI ARTICLE XI

CERTAIN COVENANTS AND WARRANTIES OF THE MORTGAGOR  ENVIRONMENTAL AND LAND USE MATTERS 
SECTION 6.1 Covenants and Warranties of the Mortgagor............................................................. 17  SECTION 11.1 Environmental Representations, Warranties and Covenants..................................... 26 
SECTION 6.2 Status of Project ........................................................................................................ 17  SECTION 11.2 Notices; Proceedings ................................................................................................. 27 
SECTION 6.3 Defense of Title and Litigation ................................................................................. 18  SECTION 11.3 Site Assessments ....................................................................................................... 27 
SECTION 6.4 Compliance with Laws .............................................................................................. 18  SECTION 11.4 Rights of the Mortgagee ............................................................................................ 28 
SECTION 6.5 Indemnification ......................................................................................................... 20  ARTICLE XII
SECTION 6.6 Certificate .................................................................................................................. 22 
MISCELLANEOUS 
ARTICLE VII
SECTION 12.1 Severability................................................................................................................ 28 
DEFAULTS  SECTION 12.2 Captions and Titles .................................................................................................... 28 
SECTION 7.1 Event of Default ........................................................................................................ 22  SECTION 12.3 Usury Savings Clause................................................................................................ 28 
SECTION 7.2 Remedies ................................................................................................................... 23  SECTION 12.4 Additional Security ................................................................................................... 29 
SECTION 7.3 Remedies Cumulative................................................................................................ 23  SECTION 12.5 Suit Not an Election of Remedies ............................................................................. 29 
SECTION 7.4 No Waiver ................................................................................................................. 23  SECTION 12.6 Notices ....................................................................................................................... 29 
SECTION 7.5 Expenses of Collection. ........................................................................................... 24  SECTION 12.7 Extension, Rearrangement or Renewal of Secured Obligations................................ 30 
ARTICLE VIII SECTION 12.8 Governing Law .......................................................................................................... 30 
SECTION 12.9 Amendments; Waivers .............................................................................................. 30 
CERTAIN REMEDIES 
SECTION 12.10 Assignment ................................................................................................................ 30 
SECTION 8.1 Application of Proceeds ............................................................................................ 24 
SECTION 12.11 Further Acts ............................................................................................................... 31 
SECTION 8.2 Remedies Not Exclusive ........................................................................................... 24 
SECTION 12.12 Mineral Interests ........................................................................................................ 31 
SECTION 8.3 Waivers...................................................................................................................... 24 
SECTION 12.13 Negation of Partnership ............................................................................................. 31 
SECTION 8.4 Sale in Parcels. .......................................................................................................... 25 
SECTION 12.14 Submission to Jurisdiction......................................................................................... 31 
SECTION 8.5 Bankruptcy.. .............................................................................................................. 25 
SECTION 12.15 Business or Commercial Purpose .............................................................................. 32 
ARTICLE IX
EXHIBITS:
CONDEMNATION AND CASUALTY LOSS  Exhibit A – Legal Description of the Land A-1
SECTION 9.1 Condemnation ........................................................................................................... 25  Exhibit B – Liens and Other Encumbrances B-1
SECTION 9.2 Casualty ..................................................................................................................... 25 
ARTICLE X

AMENDMENTS OF AND SUPPLEMENTS TO THIS

MORTGAGE AND OTHER DOCUMENTS 
SECTION 10.1 Amendments and Supplements with Consent; Limitations....................................... 26 

ii iii

B-46
 CONVEY and MORTGAGE unto the Mortgagee and to its successors and assigns, the following property,
MORTGAGE WITH POWER OF SALE AND SECURITY AGREEMENT whether now or hereafter owned, leased and/or acquired by the Grantor to wit (collectively, the “Mortgaged
Properties”):

PREAMBLE (a) subject to the Permitted Encumbrances, that certain real property (the “Land”)
being situated in the City of Edmond, County of Oklahoma, State of Oklahoma, being more fully
This Mortgage with Power of Sale and Security Agreement is made as of December 1, 2017 described as set forth in Exhibit A attached hereto and hereby referred to and incorporated herein
(hereinafter called this “Mortgage”) by and between LEADING LIFE SENIOR LIVING, INC., a Texas for all purposes, together with all right, title and interest of the Mortgagor, including any after-
non-profit corporation exempt from federal income taxes under Internal Revenue Code Section 501(c)(3), acquired right, title or reversion, in and to (i) the beds of the ways, streets, avenues and alleys
having a mailing address of 6370 LBJ Freeway, Suite 276, Dallas, Texas 75240 (Attn: Robert Mosteller, adjoining the Land, (ii) any strips or gores between the Land and abutting or adjacent properties,
Chairman) (the “Mortgagor”), and UMB BANK, N.A., a national banking association organized and and (iii) all water and water rights, timber, crops and mineral interest pertaining to the Land, and
existing under the laws of the United States of America, as trustee (the “Trustee”) under the Indenture all Improvements (hereinafter defined).
(hereinafter defined) having a mailing address of 5910 N Central Expressway, Suite 1900, Dallas, Texas
75206 (Attn: Israel Lugo) (as more particularly defined herein, the “Mortgagee”) (who shall be included (b) furniture, furnishings, fixtures, equipment and other goods necessary for or used
within the term “assignee” and “Secured Party” as used hereinafter), and any successor trustee appointed in connection with the use (or proposed use) of the Project (hereinafter defined) and/or the
pursuant to the Trust Indenture dated as of December 1, 2017 (together with all Supplements (hereinafter Improvements, and all appurtenances and Additions (hereinafter defined) thereto and betterments,
defined) thereto, the “Indenture”) between the Mortgagee and The Oklahoma Development Finance renewals, substitutions and replacements thereof, all of the foregoing as now owned or hereafter
Authority, a public trust of the State of Oklahoma, and any successor body to the duties or functions thereof acquired by the Mortgagor, wherever situated, and now or hereafter located on, attached to,
(the “Issuer”). contained in, or used or usable in connection with the Project and/or the Improvements or placed
on any part thereof, though not attached thereto, including all screens, awnings, shades, blinds,
WITNESSETH: curtains, draperies, carpets, rugs, furniture and furnishings, heating, electrical, lighting, plumbing,
ventilating, air-conditioning, refrigerating, incinerating and/or compacting plants, systems, fixtures
WHEREAS, the Issuer, at the request of the Mortgagor, desires to finance the costs of the Project and equipment, elevators, hoists, stoves, ranges, vacuum and other cleaning systems, call systems,
(hereinafter defined) through the issuance of bonds by the Issuer; and sprinkler systems and other fire prevention and extinguishing apparatus, and materials, motors,
machinery, pipes, ducts, conduits, dynamos, engines, compressors, generators, boilers, stokers,
WHEREAS, pursuant to and in accordance with the Act (hereinafter defined), the Issuer has furnaces, pumps, tanks, appliances, equipment, fittings, and fixtures, lockers, exercise and fitness
determined to issue and sell its (a) Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – equipment, scales, duplication and communication equipment, calculators, cash registers, tables,
Autumn Leaves Project) Series 2017A-1, (b) Senior Living Revenue Bonds (Leading Life Senior Living, chairs, pianos, satellite dishes, televisions, telephones, maid carts, all kitchen equipment (including
Inc. – Autumn Leaves Project) Taxable Series 2017A-2, and (c) Senior Living Revenue Bonds (Leading kitchen utensils, china ware and glassware) towels, drapes, miniblinds, linens, bedspreads, pillows,
Life Senior Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B in the combined aggregate robes, and all building materials and equipment now or hereafter delivered to the Project and
principal amount of $30,275,000.00 (collectively, the “Series 2017 Bonds” and, together with any intended to be installed therein; excluding however, all personal property owned by lessees or
Additional Bonds that may be issued under the Indenture, the “Bonds”). The net proceeds of the sale of vendors and intangibles owned by third parties. The Mortgagor shall have the right to replace worn
the Series 2017 Bonds shall be loaned to the Mortgagor by the Issuer pursuant to the terms of the Series or obsolete items of personal property (including items that have become fixtures) in accordance
2017 Notes (hereinafter defined) and the Loan Agreement (hereinafter defined) dated as of even date with the Loan Agreement.
herewith among the Issuer, the Mortgagee and the Mortgagor and shall be used to finance the cost of the
acquisition of the Project, to fund certain capital expenditures and startup costs related to the Project, to (c) Leases (hereinafter defined), the Rents (hereinafter defined), and all rents,
fund debt service reserve funds, and to pay a portion of the costs of issuing such Series 2017 Bonds; and revenues, profits, income, damages, awards, and proceeds from or attributable to all or any portion
of the Land hereinabove described, the Improvements, and any other property, both real and
WHEREAS, the Mortgagor will derive substantial direct and indirect benefits from the Series 2017 personal, hereinabove described.
Notes and the other Secured Obligations (hereinafter defined) and desires to secure its obligations to the
Mortgagee by granting the Mortgagee a mortgage and lien on certain property of the Mortgagor pursuant (d) money, funds, and accounts of the Mortgagor, deposits (including lessee security
to this Mortgage; and deposits), instruments, documents, general intangibles, notes, and chattel paper arising from or by
virtue of any transaction related to the Project, the Improvements, or any of the Personal Property
WHEREAS, the Mortgagor has executed this Mortgage to provide security for the performance (hereinafter defined), subject to Section 4.1, prior to distribution of any of the foregoing to the
by the Mortgagor of all of the Secured Obligations, including without limitation the Secured Obligation to Mortgagor and except for balances in accounts that are subject to draw by the Mortgagor for
pay amounts necessary to make the debt service payments on the Bonds. approved draws under the Loan Agreement or the Mortgagee under the Indenture and amounts
allocated to ordinary expenses for payment by any manager of the Project.
NOW, THEREFORE, to secure to the Mortgagee the payment of the Secured Obligations and
any agreement, document, certificate or instrument executed in connection therewith, with interest thereon, (e) appurtenances and additions to the items of tangible personal property described
the payment of all other moneys secured hereby or advanced hereunder and the performance of the herein and betterments, renewals, substitutions, and replacements thereof and therefor; and, if the
covenants and agreements herein contained, the Mortgagor does hereby GRANT, BARGAIN, SELL, lien and security interest granted by this Mortgage is subject to any security interest in said personal
1 2

property, all right, title, and interest of the Mortgagor as the Mortgagor, now or hereafter arising, management contract, service contract, warranty and computer software related to the Project, or
in and to any and all said property is hereby assigned to the Mortgagee, together with the benefits other agreement with any third party pertaining to the ownership, development, construction,
of all deposits and payments now or hereafter made thereon by or on behalf of the Mortgagor; operation, maintenance, marketing, sale, or use of the Land and/or the Improvements.
excluding, however, all personal property owned by tenants of the Improvements.
(n) proceeds arising from or by virtue of the sale, lease or other disposition of the
(f) other articles of personal property, tangible or intangible (together with those items Land, the Improvements or the Personal Property.
described in subsections (b), (e), and (g), collectively, the “Personal Property”) now or hereafter
attached to or used in or about the Improvements or that are necessary or useful for the complete (o) Net Proceeds (hereinafter defined) (including premium refunds) of each policy of
and comfortable use and occupancy of the Improvements for the purposes for which they are to be insurance relating to the Land, the Improvements or the Personal Property.
attached, placed, erected, constructed or developed, or which Personal Property is or may be used
in or related to the planning, development, financing or operation of the Improvements, and all (p) Net Proceeds from the taking of any of the Land, the Improvements, the Personal
renewals of or replacements or substitutions for any of the foregoing, whether or not the same are Property or any rights appurtenant thereto by right of eminent domain or by private or other
or shall be attached to the Land or the Improvements. purchase in lieu thereof, including change of grade of streets, curb cuts or other rights of access,
for any public or quasi-public use under any law.
(g) building materials and equipment now or hereafter delivered to and intended to be
installed in or on the Land or the Improvements. (q) right, title and interest of the Mortgagor in and to all streets, roads, public places,
easements and rights-of-way, existing or proposed, public or private, adjacent to or used in
(h) right, title and interest of the Mortgagor in and to contracts now or hereafter entered connection with, belonging or pertaining to the Land.
into by and between the Mortgagor and any other party, as well as all right, title and interest of the
Mortgagor under any subcontracts, providing for the construction (original, restorative or (r) rights, hereditaments and appurtenances pertaining to the foregoing.
otherwise) of any improvements to or on any of the Land or the furnishing of any materials,
supplies, equipment or labor in connection with such construction. (s) interests of every kind and character that the Mortgagor now has or at any time
hereafter acquires in and to the Land, Improvements, and Personal Property described herein and
(i) right, title and interest of the Mortgagor in and to all plans, specifications and all property that is used or useful in connection therewith, including rights of ingress and egress
drawings of the Improvements (including, but not limited to, plat plans, foundation plans, floor and all reversionary rights or interests of the Mortgagor with respect to such property.
plans, elevations, framing plans, cross-section of walls, mechanical plans, electrical plans and
architectural and engineering plans, and architectural engineering studies and analysis) heretofore TO HAVE AND TO HOLD the Mortgaged Properties with all the rights, improvements and
or hereafter prepared by any architect or any engineer, relating to any of the Land. appurtenances thereunto belonging, or in anywise appertaining unto the Mortgagee, its successors and
assigns, forever. The Mortgagor covenants that the Mortgagor is seized of an indefeasible estate in fee
(j) right, title and interest of the Mortgagor in and to all agreements now or hereafter simple in the Mortgaged Properties, that the Mortgagor has a good right to sell, convey and mortgage the
entered into and with any party, including any assigned obligations, relating to architectural, same, that the Mortgaged Properties are free and clear of all general and special taxes, liens, charges and
engineering, management, development or consulting services rendered or to be rendered relating encumbrances of every kind and character, and that the Mortgagor hereby warrants and will forever defend
to planning, design, inspection or supervision of the construction management or development of the title thereto against the claims of all persons whomsoever, subject only to Permitted Encumbrances
any of the Land. (hereinafter defined).

(k) completion bond, performance bond or labor and material payment bond or other PROVIDED, HOWEVER, that if the Mortgagor pays the Secured Obligations (including payment
bond relating to the Land or the Project or to any contract providing for construction of of all principal and all interest and attorneys’ fees and other amounts, if any, owing or to become owing
Improvements to the Land or the Project. thereon) when the same shall become due or make provision for such payment such that there are no
Secured Obligations that are outstanding and shall in all things do and perform all other acts and agreements
(l) the Mortgagor’s right, title and interest in and to (but not its obligations) under any herein contained to be done, then, in that event only, this Mortgage shall be and become null and void;
contracts relating to the Land, the Improvements, or the Personal Property. however, the Secured Obligation to indemnify and hold harmless the Mortgagee, the Trustee, the Holders,
and their respective officers, directors, employees, agents, and attorneys pursuant to the provisions hereof
(m) right, title, and interest of the Mortgagor in and to all contracts, approvals, utility shall survive any such payment.
deposits, utility capacity, and utility rights issued, granted agreed upon, or otherwise provided by
any governmental or private authority, person or entity relating to the ownership, development, Notwithstanding anything herein to the contrary, this Mortgage is executed and delivered by the
construction, operation, maintenance, marketing, sale or use of the Land and/or the Improvements, Mortgagor to secure the payment and performance of the Secured Obligations; however, the Secured
including all of the Mortgagor’s rights and privileges hereto or hereafter otherwise arising in Obligations shall not include and there is expressly excepted therefrom any items of indebtedness owing or
connection with or pertaining to the Land and/or the Improvements, including, without limiting the to become owing to the Mortgagee for which applicable law prohibits the taking of a lien upon real estate
generality of the foregoing, all water and/or sewer capacity, all water, sewer and/or other utility as security. Each and every item of the Secured Obligations, including any and all renewals, rearrangements
deposits or prepaid fees, and/or all water and/or sewer and/or other utility tap rights or other utility and extensions of all or any part of the Indebtedness described and included in this paragraph is intended
rights, any right or privilege of the Mortgagor under any loan commitment, lease, contract,
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to be fully secured by the liens, assignments, and security interests created under and by virtue of this “Damaged” means (a) damaged, destroyed, or injured (in whole or in part) by fire or other casualty,
Mortgage. or (b) taken by Condemnation.

ARTICLE I “Debtor” has the meaning ascribed to such term in Section 5.1.

DEFINITIONS “Documents” means and includes (without limitation) the Bonds, the Loan Agreement, the Notes,
the Indenture, this Mortgage, and any and all other documents which the Issuer, the Mortgagor, or any other
SECTION 1.1 Definitions. Certain terms used in this Mortgage are defined in this party or parties or their representatives, have executed and delivered, or may hereafter execute and deliver,
Section. When used herein, such terms shall have the respective meanings ascribed to them in this to create, evidence or secure the Secured Obligations, or any part thereof, or in connection therewith,
Section, unless specifically provided otherwise or unless the context clearly indicates otherwise. together with all Supplements thereto.
Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in
the Indenture. “Encumbrance” means any deed of trust, mortgage, pledge, lien, security interest, charge or other
encumbrance, including but not limited to any covenant or agreement restricting, regulating or otherwise
“Act” means Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, Title 60 Oklahoma affecting the use of the Land or the Mortgaged Properties.
Statutes 2016, Section 175.1 et seq., as amended, and Title 74 Oklahoma Statutes 2016, Section 5062.1 et
seq., as amended, all as now in effect and as may from time to time hereafter be amended or supplemented. “Event of Default” has the meaning ascribed to such term in Section 7.1.

“Additional Bonds” means the additional bonds authorized to be issued by the Issuer pursuant to “Governmental Authority” means any federal, state or local governmental or quasi-governmental
the terms and conditions of the Indenture. entity having jurisdiction over the Project, including, without limitation, any agency, department,
commission, board, bureau, administration, service, or other instrumentality of any governmental entity.
“Additions” means any and all alterations, additions, accessions and improvements to property,
substitutions therefor, and renewals and replacements thereof. “Hazardous Substance” has the meaning ascribed to such term in Section 11.1(f).

“Agent” means, with respect to any entity, any official, officer, employee or agent of such entity. “Holder” or “Holders” means the Person or Persons in whose name any Bond is registered on the
registration records for the Bonds maintained by the Mortgagee as registrar.
“Applicable Environmental Law” has the meaning ascribed to such term in Section 11.1(b).
“Improvements” means all structures or buildings now or hereafter erected or placed on the Land,
“Applicable Rate” means the respective applicable rates of interest payable by the Issuer under the including without limitation, the Project, and all Additions thereto.
Bonds from time to time.
“Indebtedness” means all sums of money secured by this Mortgage, including
“Bonds” means, collectively, the Series 2017 Bonds and any Additional Bonds.
(a) all money (including all principal, interest, and premiums (if any)) due or to
“CERCLA” has the meaning ascribed to such term in Section 11.1(b). become due under the Loan Agreement or the Notes;

“Closing Date” means the date of initial delivery of the Series 2017 Bonds. (b) all other money now or hereafter advanced or expended by the Mortgagee or the
Issuer as provided for herein or in any other of the Documents, which the Mortgagor is required to
“Collateral” means all of the security for the Loan described in this Mortgage, together with all repay or reimburse hereunder, under any of the other Documents, or by applicable law; and
Proceeds and products thereof and Additions thereto.
(c) all costs, expenses, charges, liabilities, commissions, half-commissions and
“Condemnation” means any taking of title, of use, or of any other property interest under the attorneys’ fees now or hereafter chargeable to the Mortgagor, or incurred by, or disbursed by, the
exercise of the power of eminent domain, by any governmental body or by any person acting under Issuer or the Mortgagee on behalf of the Mortgagor as provided for herein, or in any of the other
governmental authority. Documents, which the Mortgagor is required to pay, repay or reimburse hereunder, under any of
the other Documents, or by applicable law.
“Controlling Holders” means, as of any date, in the case of consent or direction to be given
hereunder, the Holders of the majority in aggregate principal amount of the then Outstanding Senior Bonds; “Indemnified Party” and “Indemnified Parties” have the respective meanings ascribed to such terms
provided if no Senior Bonds are then Outstanding, then the Holders of the majority in aggregate principal in Section 6.5.
amount of the then Outstanding Second Tier Bonds.
“Indenture” means that certain Trust Indenture dated as of December 1, 2017 between the
“Damage” means (a) any damage, destruction or other injury (in whole or in part) by fire or other Mortgagee and Issuer, together with all Supplements thereto.
casualty, and (b) any Condemnation.
“Land” has the meaning ascribed to such term in the Granting Clauses hereof.

5 6

“Law” has the meaning ascribed to such term in Section 11.1(d). “Rents” has the meaning ascribed to such term in Section 4.1(b).

“Leases” has the meaning ascribed to such term in Section 4.1(a). “Second Tier Bonds” means, collectively, the Series 2017B Bonds and all Additional Bonds issued
by the Issuer on a parity with the Series 2017B Bonds.
“License” has the meaning ascribed to such term in Section 4.2.
“Secured Obligations” means the obligations of the Mortgagor under the Notes, the Bonds, the
“Loan Agreement” means the Loan Agreement dated December 1, 2017 executed among the Issuer, Indenture, this Mortgage, the Loan Agreement and the other Documents, to (a) pay amounts necessary to
the Mortgagee and the Mortgagor, together with all Supplements thereto. pay the principal of, premium (if any) and interest on the Bonds, when and as the same shall become due
and payable (whether at the stated maturity thereof, on any installment payment date, or by acceleration of
“Mortgage” means this Mortgage with Power of Sale and Security Agreement, together with all maturity, or after notice of redemption or otherwise), (b) pay all other payments (if any) required by the
Supplements hereto. Bonds, the Indenture, the Loan Agreement, this Mortgage and the other Documents to which it is a party
to be paid by the Mortgagor to the Issuer, the Mortgagee, the Holders or to others, when and as the same
“Mortgaged Properties” has the meaning ascribed to such term in the Granting Clauses hereof. shall become due and payable, (c) timely perform, observe and comply with all of the terms, covenants,
conditions, stipulations and agreements, express or implied, which the Mortgagor is required by the Bonds,
“Mortgagee” means UMB Bank, N.A., a national banking association organized and existing under the Indenture or any of the other Documents to which it is a party, to perform and observe; and (d) reimburse
the laws of the United States of America, acting as trustee under the Indenture, and its successors and the Issuer or the Mortgagee, as the case may be, for any sums advanced thereby as set forth in the Loan
assigns, and includes any successor appointed as trustee pursuant to the Indenture. Agreement and this Mortgage and the other Documents.

“Mortgagor” means Leading Life Senior Living, Inc., a Texas non-profit corporation, and its “Secured Party” has the meaning ascribed to such term in Section 5.1.
successors and assigns.
“Senior Bonds” means, collectively, the Series 2017A Bonds and all Additional Bonds issued by
“Net Proceeds,” when used with respect to any Condemnation awards or insurance proceeds the Issuer on a parity with the Series 2017A Bonds.
allocable to the the Project, means the gross proceeds from Condemnation or insurance remaining after
payment of all expenses (including attorneys’ fees) incurred in the collection of such gross proceeds. “Series 2017 Notes” means, collectively, the Senior Living Promissory Note Series 2017A-1 in the
principal amount of $14,640,000.00, the Senior Living Promissory Note Taxable Series 2017A-2 in the
“Notes” means, collectively, the Series 2017 Notes and any promissory note issued in connection principal amount of $3,240,000.00, and the Senior Living Promissory Note Series 2017B in the principal
with Additional Bonds. amount of $12,395,000.00, each executed by the Mortgagor, payable to the Issuer and assigned by the Issuer
to the Mortgagee pursuant to the Indenture.
“Permitted Encumbrances” has the meaning ascribed to such term in the Indenture, and shall
include, without limitation, the liens and other encumbrances set forth in Exhibit B. “Series 2017A Bonds” means, collectively, the Series 2017A-1 Bonds and the Series 2017A-2
Bonds.
“Personal Property” has the meaning ascribed to such term in the Granting Clauses hereof.
“Series 2017A-1 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
“Pledge” has the meaning ascribed to such term in Section 6.4(i). Living, Inc. – Autumn Leaves Project) Series 2017A-1.
“Proceeds” or “proceeds” means, when used with respect to any of the Collateral, all proceeds “Series 2017A-2 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
within the meaning of the Uniform Commercial Code and shall include the proceeds of any and all Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-2.
insurance policies.
“Series 2017B Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
“Project” has the meaning ascribed to such term in the Indenture. Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B.
“Project Revenues” has the meaning ascribed to such term in the Indenture. “Site Reviewers” has the meaning ascribed to such term in Section 11.3.
“Property Taxes” means all taxes, payments in lieu of taxes, water rents, sewer rents, ground rents, “Site Assessments” has the meaning ascribed to such term in Section 11.3.
assessments and other governmental or municipal or public or private dues, charges and levies and any
liens (including federal tax liens) which are or may be levied, imposed or assessed upon the Project or any “State” means the State of Oklahoma.
part thereof or any of the other Collateral, or upon any Leases, or upon the rents, issues, income or profits
thereof, whether any or all of the aforementioned be levied directly or indirectly or as excise taxes, as “Supplements” means any and all extensions, renewals, modifications, amendments, supplements
income taxes, or otherwise. and substitutions.

“RCRA” has the meaning ascribed to such term in Section 11.1(b).

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 “Taxes” means all taxes, assessments and governmental charges or levies imposed upon the replacements, modifications, rearrangements, consolidations or extensions of the Secured Obligations
applicable Person or on its income or its properties, including, without limitation, all Property Taxes. or other Indebtedness.

“Uniform Commercial Code” means the Uniform Commercial Code—Secured Transactions (Title ARTICLE IV
12A, Oklahoma Statutes 2001, Section 9), as amended.
ASSIGNMENT OF RENTS
ARTICLE II
SECTION 4.1 Assignment. The Mortgagor does hereby GRANT, TRANSFER,
RULES OF CONSTRUCTION ASSIGN and SET OVER unto the Mortgagee, its successors and assigns, the following:

SECTION 2.1 Rules of Construction. The words “hereof,” “herein,” “hereunder,” (a) all rights, interests and estates of the Mortgagor in, to and under, but none of its
“hereto,” and other words of similar import refer to this Mortgage in its entirety. obligations, responsibilities, or liabilities related to, any leases, now or hereafter made, executed or
delivered, whether written or oral, covering all or any portion of the Land, or the Improvements
(a) “Including” means “including, but not limited to.” now or hereafter erected or constructed thereon, or any other portion of the Mortgaged Properties,
together with all renewals, extensions, modifications and replacements thereof (such lease
(b) References to Articles, Sections, and other subdivisions of this Mortgage are to the agreements, renewals, extensions, modifications and replacements thereof being herein collectively
designated Articles, Sections and other subdivisions of this Mortgage as originally executed. called the “Leases”);

(c) All references made (i) in the neuter, masculine or feminine gender shall be (b) all rents, rentals, security deposits, royalties, bonuses, issues, profits, revenue,
deemed to have been made in all such genders, and (ii) in the singular or plural number shall be income, and other sums of money or benefits that may now or hereafter be derived from the
deemed to have been made, respectively, in the plural or singular number as well. Mortgaged Properties, but none of its obligations, responsibilities, or liabilities related to, or arising
from the use or enjoyment of any portion thereof, or from any lease pertaining thereto, including
(d) Wherever used in this Mortgage, unless the context clearly indicates a contrary but not limited to, liquidated damages arising from any default under a lease, amounts that may be
intent or unless otherwise specifically provided herein, the word “Mortgagor” shall mean collected from any guarantor of a lease, any proceeds payable under any insurance policy covering
“Mortgagor and/or any subsequent owner or owners of the Mortgaged Properties” and the word loss of rents, and any and all rights that the Mortgagor may have against any lessee, guarantor or
“Mortgagee” shall mean “Mortgagee or any subsequent holder or holders of this Mortgage”. sublessee under such Leases (herein collectively called the “Rents”); and

SECTION 2.2 Recitals Incorporated Herein by Reference. The Mortgagor (c) all other Project Revenues arising from or by virtue of any transaction related to
acknowledges that the Recitals contained hereinabove are true and correct and agrees that the same the Project and not included in (a) and (b) above.
are incorporated herein as a substantive part of this Mortgage.
The parties intend to establish an absolute transfer and assignment of all the rights, title, and interest
ARTICLE III of the Mortgagor in and to, but none of its obligations, responsibilities or liabilities relating to the Leases
and the Rents to the Mortgagee and not just to create a security interest.
TITLE; FUTURE ADVANCEMENTS
SECTION 4.2 Limited License. Although this assignment constitutes an absolute,
SECTION 3.1 Mortgagor’s Representations and Covenants Regarding Title. Without present and current assignment of all Leases and Rents, so long as there exists no Event of Default
in any way limiting the conveyance and the warranty herein contained, the Mortgagor represents itself hereunder, the Mortgagor shall have the right under a limited license granted hereby, and the
to be the owner of all the Mortgaged Properties as hereinabove conveyed and, should any ambiguity Mortgagee hereby grants to the Mortgagor a limited license (the “License”) to collect (but not more
exist in regard to the description of said properties, reference may be had to the Mortgagor’s ownership than one month in advance or two months in advance where one month’s rental is attributable to the
of properties held by it in the survey(s), subdivision(s) or section(s) described in Exhibit A attached next ensuing month and one month’s rental is attributable to the last month in the lease term, if any,
hereto and made a part hereof for further description of the properties herein conveyed, the Mortgagor and is collected as security under the provisions of a written lease or rental agreement) all of the Rents
agrees that it will execute any further instruments, amendments, or supplements desired to more arising from or out of the Leases or any renewals or extensions thereof, or from or out of the Mortgaged
adequately describe the Mortgaged Properties which it has agreed to make subject to this Mortgage. Properties or any part thereof. The Mortgagor shall receive such Rents and hold them in trust and as
a trust fund to be applied, and the Mortgagor hereby covenants to apply the Rents so collected in
SECTION 3.2 Future Advancements. This Mortgage shall secure the payment of the accordance with the Loan Agreement and the Indenture. The License shall be revoked automatically
Secured Obligations, including any and all Additional Bonds and other advancements made by the upon the occurrence of an Event of Default hereunder or under any of the documents evidencing or
Mortgagee thereunder, and any and all additional Indebtedness of the Mortgagor required under to be securing the Secured Obligations, but to the extent the Mortgagor continues to collect the Rents after
paid by the Mortgagor to the Issuer, the Mortgagee, the Holders or to others under and pursuant to the an Event of Default, the Mortgagor shall continue to hold the Rents in trust for the benefit of the
Documents, whether or not incurred or becoming payable under the provisions hereof and whether as Mortgagee. Upon the occurrence and continuation of an Event of Default, the Mortgagor shall cause
future advancements or otherwise, together with any renewals, amendments, restatements, the tenants under the Leases to pay Rents by check payable to the order of the Mortgagee or a name
designated by the Mortgagee. Any such payment to the Mortgagee shall constitute payment to the
9 10

Mortgagor under the Leases, and the Mortgagor hereby appoints the Mortgagee as the Mortgagor’s (e) cancel, terminate or modify any Lease, except upon default by the tenant
lawful attorney-in-fact, coupled with an interest, for giving, and is hereby empowered to give, thereunder; cause or permit any cancellation, termination or surrender of any Lease, except in
acquittances to any tenants for such payments and to give the Mortgagor’s endorsement to any check connection with a termination, cancellation or similar right under a Lease; or commence any
made payable to the Mortgagor. proceedings for dispossession of any tenant under any Lease, except upon default by the Tenant
thereunder or otherwise in accordance with the terms of any Lease.
SECTION 4.3 Affirmative Covenants. The Mortgagor shall, at the sole cost and
expense of the Mortgagor: SECTION 4.5 Appointment of Attorney-in Fact. Subject to the License as described
and limited in Section 4.2, the Mortgagor hereby constitutes and appoints the Mortgagee the true and
(a) duly and punctually observe, perform and discharge, all of the material obligations, lawful attorney-in-fact, coupled with an interest, of the Mortgagor, empowered and authorized in the
terms, covenants, conditions and warranties of the lessor under the Leases; and name, place and stead of the Mortgagor to demand, sue for, attach, levy, recover and receive the Rents,
or any premium or penalty payable upon the exercise by any lessee under any Leases of a privilege of
(b) give prompt notice to the Mortgagee of any failure on the part of the Mortgagor to cancellation originally provided in any such Leases, and to give proper receipts, releases, and
observe, perform and discharge the same or of any claim made by any lessee of any such failure by acquittances therefor and, after deducting expenses of collection, to apply the net proceeds as a credit
the Mortgagor, but only to the extent that such failure, or alleged failure is a material obligation of upon any portion of the Secured Obligations selected by the Mortgagee, notwithstanding the fact that
the Mortgagor under the Leases; and such portion of the Secured Obligations may not then be due and payable or that such portion of the
Secured Obligations is otherwise adequately secured; and the Mortgagor does hereby authorize and
(c) enforce in accordance with sound commercial practices the Leases, or secure the direct any such lessee to deliver such payment to the Mortgagee, in accordance with this assignment,
performance of each and every obligation, term, covenant, condition and agreement in the Leases and the Mortgagor hereby ratifies and confirms all that its said attorney-in-fact shall do or cause to be
to be performed by any lessee or any guarantor; and done by virtue of the powers granted hereby. The foregoing appointment is irrevocable and continuing
and such rights, powers and privileges shall be exclusive in the Mortgagee, its successors and assigns,
(d) use its best efforts to keep the Project leased at a sufficient rental and on other so long as any part of the Secured Obligations secured hereby remains unpaid and undischarged. A
terms and conditions reasonably acceptable to the Mortgagee; and lessee need not inquire into the authority of the Mortgagee to collect any Rents, and its obligations to
pay Rents to the Mortgagor shall be absolutely discharged to the extent of any payment to the
(e) at the request of the Mortgagee, execute a written instrument evidencing that the Mortgagee. Subject to the License, the Mortgagor hereby constitutes and appoints the Mortgagee the
rights, title, and interest of the Mortgagor in and to, but none of its obligations, responsibilities or true and lawful attorney-in-fact, coupled with an interest, of the Mortgagor, empowered and authorized
liabilities relating to such future Leases have been transferred and assigned to the Mortgagee in in the name and stead of the Mortgagor to subject and subordinate at any time any Leases or any part
accordance with the terms and conditions as herein contained; and thereof to the lien and security interest of this Mortgage and the Loan Agreement, or to request or
require such subordination in any case where the Mortgagor otherwise would have the right, power or
(f) make, execute and deliver to the Mortgagee upon demand and at any time or times, privilege so to do, and to cause some or all of the provisions of any Leases that are subordinate to the
any and all assignments and other documents and other instruments which the Mortgagee may lien and security interest of this Mortgage to become superior to this Mortgage and the Loan
deem advisable to carry out the true purposes and intent of this assignment. Agreement. The foregoing appointment is irrevocable and continuing and such rights, powers and
privileges shall be exclusive in the Mortgagee, its successors and assigns, so long as any Secured
SECTION 4.4 Negative Covenants. The Mortgagor shall not without Mortgagee’s Obligations secured hereby remain unpaid and discharged, and the Mortgagor hereby warrants that
prior written consent, except in compliance with the Indenture, the Loan Agreement or the Leases, the Mortgagor has not at any time prior to the date hereof exercised any such right, and the Mortgagor
and except as noted below and in the ordinary course of business: hereby covenants not to exercise any such right, to subordinate any such Leases to the lien of this
Mortgage, the Loan Agreement, or to any other mortgage, deed of trust or security agreement or to
(a) execute a Lease for a term greater than 364 days (excluding renewal options); or any ground lease.
(b) consent to any subletting of Mortgaged Properties or any part thereof, to any SECTION 4.6 Default. If there shall have occurred and be continuing an Event of
assignment of any Leases by any lessee thereunder, to any assignment or further subletting of any Default, then the Mortgagee may, at its option, but subject to the prior written consent of the
sublease; or Controlling Holders, and shall at the written direction of the Controlling Holders, without notice and
without regard to the adequacy of security for the Secured Obligations hereby secured, terminate the
(c) receive or collect any Rents from any lessee for a period of more than one month
License, and either in person or by agent, with or without bringing any action or proceedings, or by a
in advance or two months in advance where one month’s rental is attributable to the next ensuing
receiver to be appointed by court, enter upon, take possession of, manage and operate the Mortgaged
month and one month’s rental is attributable to the last month in the lease term, if any, and is
Properties or any portion thereof; make, cancel, enforce or modify Leases to the same extent that the
collected as security under the provisions of a written lease or rental agreement, if any (whether in
Mortgagor could do; obtain and evict lessees, and fix or modify Rents, and do any acts which the
cash or by evidence of indebtedness); or
Mortgagee deems proper to protect the security hereof; and either with or without taking possession
of the Mortgaged Properties, in its own name sue for or otherwise collect and receive such Rents
(d) pledge, transfer, mortgage or otherwise encumber or assign or permit an
(including lessee’s security deposits and Rents that are past due and unpaid), and apply the same, less
encumbrance upon future payments of Rents or any other interest of the Mortgagor in the Leases
costs and expenses of operation and collection, including attorneys’ fees, upon any Secured
except as permitted by the Loan Agreement; or
Obligations secured hereby, in such order as the Mortgagee may determine subject to the provisions
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 of the Loan Agreement and the Indenture. If there shall have occurred and be continuing an Event of (d) except in the ordinary course of business, except as indicated in the Leases, the
Default, upon demand by the Mortgagee, the Mortgagor shall deliver to the Mortgagee all such lessees’ Mortgagor has not received any funds or deposits from any lessee for which credit has not already
security deposits that the Mortgagor has in its possession or control. The entering upon and taking been made on account of accrued Rents.
possession of the Mortgaged Properties or the collection of the Rents and security deposits and the
application thereof as aforesaid, shall not cure or waive any default under the documents evidencing The phrase “Mortgagor’s current actual knowledge” as used in this Section shall mean the current, actual
or securing the Secured Obligations, or waive, modify or affect notice of an Event of Default, or knowledge, after reasonable inquiry of the officers of the Mortgagor most likely to have knowledge of the
invalidate any act done pursuant to such notice. The Mortgagee may exercise its rights under this facts and circumstances contained herein.
paragraph as often as any such Event of Default may occur and be continuing, and the exercise of such SECTION 4.10 Termination of Assignment of Leases. Upon the payment or
right shall not constitute a waiver of any of the other remedies of the Mortgagee under this Mortgage performance in full of the Secured Obligations, this assignment shall become void and of no effect,
or other document evidencing or securing the Secured Obligations. but the affidavit of any officer or loan correspondent of the Mortgagee stating that any part of the
Indebtedness remains unpaid shall be and constitute evidence of the validity, effectiveness and
SECTION 4.7 No Obligation of Mortgagee. It is understood that the Mortgagee’s
continuing force of this assignment, and any person may and is hereby authorized to rely thereon.
acceptance of the assignment made hereby shall not operate to place responsibility for the control,
care, management or repair of the Mortgaged Properties upon the Mortgagee, nor for the carrying out SECTION 4.11 Right to Enforce the Leases. In exercise of the rights and powers created
of any of the terms and conditions of said Leases; nor shall it operate to make the Mortgagee under this Article, if an Event of Default has occurred or is continuing under the Indenture, the
responsible or liable for any waste committed on the Mortgaged Properties by the lessees or any other Mortgagor specifically agrees that the Mortgagee or the Mortgagee’s agent, as such party may see fit,
parties, or for any dangerous or defective condition of the Mortgaged Properties, or for any negligence may do any of the following: (a) use against the Mortgagor or any other persons lawful or peaceable
in the management, upkeep, repair or control of the Mortgaged Properties resulting in loss, injury or means to enforce the collection of any such rents, revenues, profits, and income, (b) secure possession
death to the Mortgagor or any lessee, licensee, employee or stranger. The Mortgagee shall not be of the Mortgaged Properties, or any part thereof; settle or compromise on any terms the liability of
liable for any loss sustained by the Mortgagor resulting from the Mortgagee’s failure to let the any person or persons for any such rents, revenues, profits, or income; institute and prosecute to final
Mortgaged Properties after an Event of Default or from any other act or omission of the Mortgagee in conclusion actions of forcible entry and detainer, or actions of trespass to try title, or actions for
dealing with the Mortgaged Properties after an Event of Default. The Mortgagee shall not be obligated damages, or any other appropriate actions, in the name of such person or in the name of the Mortgagor;
to perform or discharge, nor does the Mortgagee hereby undertake to perform or discharge, any and (c) settle, compromise, or abandon any such actions. In furtherance of the foregoing and not by
obligation, duty or liability under any of the Leases or under or by reason of this assignment. way of limitation, the Mortgagor binds itself to take whatever lawful or peaceful steps the Mortgagee
may ask it to take for such purposes, including the institution and prosecution of actions of the
SECTION 4.8 No Waiver of Mortgagee’s Rights. Nothing contained in this assignment
character above stated; however, the Mortgagor recognizes that neither the Mortgagee nor any person
and no act done or omitted by the Mortgagee pursuant to the powers and rights granted to it hereunder
acting on behalf of the Mortgagee shall ever be required to collect any such rents or income or be
shall be deemed to be a waiver by the Mortgagee of its other rights and remedies under the Loan
liable or chargeable for failure so to do. All money collected by the Mortgagee shall be applied to the
Agreement, the Notes, the Indenture, this Mortgage, or other document evidencing or securing the
Secured Obligations as provided in the Indenture.
Secured Obligations, and this assignment is made and accepted without prejudice to any of the other
rights and remedies possessed by the Mortgagee under the terms of the Loan Agreement, the Notes, SECTION 4.12 Mortgagee Not Mortgagee-in-Possession. Neither the foregoing
the Indenture, this Mortgage, and other documents evidencing or securing the Secured Obligations. assignment of Rents and Leases to the Mortgagee, nor the exercise by the Mortgagee of any of its
The right of the Mortgagee to collect the principal sum, interest and other indebtedness under the rights or remedies hereunder shall be deemed to make the Mortgagee a “mortgagee-in-possession” or
Bonds and to enforce any security therefor held by it may be exercised by the Mortgagee either prior otherwise liable in any manner with respect to the Mortgaged Properties, unless the Mortgagee, in
to, simultaneously with, or subsequent to any action taken by it hereunder. person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the
Mortgaged Properties by any court at the request of the Mortgagee or by agreement with the
SECTION 4.9 Warranties Concerning Leases and Rents. The Mortgagor represents
Mortgagor, or the entry into possession of the Mortgaged Properties by such receiver, be deemed to
and warrants to the Mortgagee that, to the best of Mortgagor’s current actual knowledge:
make the Mortgagee a “mortgagee-in-possession” or otherwise liable in any manner with respect to
the Mortgaged Properties.
(a) the Mortgagor has good title to the existing Leases and Rents hereby assigned and
the authority to assign them, and no other person or entity has any right, title or interest therein, and
ARTICLE V
no Rents have been or will be assigned, mortgaged or pledged except pursuant to this Mortgage,
the Indenture and the Loan Agreement;
SECURITY AGREEMENT
(b) all existing Leases are valid, unmodified and in full force and effect, and no
SECTION 5.1 Grant of Security Interest. Without limiting any of the other provisions
material default exists thereunder;
of the Indenture, the Loan Agreement and this Mortgage, the Mortgagor, as Debtor (referred to in this
Article as “Debtor,” whether one or more), expressly GRANTS unto the Mortgagee, as Secured Party
(c) except in the ordinary course of business or as otherwise permitted hereunder, no
(referred to in this Article as “Secured Party,” whether one or more), a security interest in all the
Rents have been or will be, without the Mortgagee’s prior written consent, anticipated, waived,
Mortgaged Properties (including both those now and those hereafter existing) to the full extent that
released, discounted, setoff or compromised; and
the Mortgaged Properties may be subject to the Uniform Commercial Code.

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SECTION 5.2 Debtor’s Covenants. Debtor covenants and agrees with Secured Party condition or thing incident thereto shall be presumed conclusively to have been performed or to
as follows: have occurred. Proceeds of any sale of the collateral shall be applied to the Secured Obligations as
set forth in the Indenture.
(a) In addition to any other remedies granted in this Mortgage to Secured Party
(including specifically, but not limited to, the right to proceed against all the Mortgaged Properties (f) Secured Party may require Debtor to assemble the Collateral and make it available
in accordance with the rights and remedies in respect of those Mortgaged Properties which are real to Secured Party at a place to be designated by Secured Party that is reasonably convenient to both
property pursuant to Section 9.604 of the Uniform Commercial Code), Secured Party may, should parties. Debtor shall be fully liable for all expenses of retaking, holding, preparing for sale, lease
an Event of Default occur and be continuing, proceed under the Uniform Commercial Code as to or other use or disposition, selling, leasing or otherwise using or disposing of the Collateral which
all or any part of the Collateral, and shall have and may exercise with respect to the Collateral all are incurred or paid by Secured Party as authorized or permitted hereunder, including also all
the rights, remedies, and powers of a secured party under the Uniform Commercial Code, including, attorneys’ fees, legal expenses, and costs, all of which expenses and costs shall constitute a part of
without limitation, the right and power to sell, at one or more public or private sales, or otherwise the Secured Obligations.
dispose of, lease, or utilize the Collateral and any part or parts thereof in any manner authorized or
permitted under the Uniform Commercial Code after default by a debtor, and to apply the proceeds (g) Certain of the Collateral is or will become “fixtures” (as that term is defined in the
thereof toward payment of any costs and expenses and attorneys’ fees and legal expenses thereby Uniform Commercial Code) on the real estate hereinabove described, and this Mortgage upon being
incurred by Secured Party, and toward payment of the Secured Obligations in such order or manner filed for record in the real estate records shall operate also as a financing statement upon such of
as Secured Party may elect. the Collateral which is or may become fixtures. Debtor has an interest of record in the real estate.

(b) Among the rights of Secured Party upon occurrence and continuance of an Event (h) Any copy of this Mortgage which is signed by Debtor or any carbon, photographic,
of Default and without limitation, Secured Party shall have the right, by any lawful means, to take or other reproduction of this Mortgage may also serve as a financing statement under the Uniform
possession of the Collateral or any part thereof and to enter, in any lawful manner, upon any Commercial Code by Debtor, whose address is set opposite its signature hereinbelow, in favor of
premises where same may be situated for such purpose without being deemed guilty of trespass Secured Party, whose address is set out hereinbelow.
and without liability for damages thereby occasioned, and to take any lawful action deemed
necessary or appropriate or desirable by Secured Party, to repair, refurbish, or otherwise prepare (i) So long as any Secured Obligations remain outstanding, unless the prior written
the Collateral for sale, lease, or other use or disposition as herein authorized. specific consent and approval of Secured Party shall have first been obtained, Debtor will not
execute and there will not be filed in any public office any financing statement or statements
(c) To the extent permitted by law and except as otherwise provided in the Loan affecting the Collateral other than financing statements in favor of Secured Party hereunder, under
Agreement, Debtor expressly waives any notice of sale or other disposition of the Collateral and and as specifically permitted by the Loan Agreement or the Indenture, or relating to Permitted
any other rights or remedies of a debtor or formalities prescribed by law relative to sale or Encumbrances.
disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after
an Event of Default hereunder; and, to the extent any such notice is required and cannot be waived, SECTION 5.3 Debtor’s Warranties and Representations. Debtor warrants and
Debtor agrees that, if such notice is mailed, postage prepaid, to Debtor at the address shown represents to Secured Party that, except for the security interest granted hereby and by the other
opposite Debtor’s signature hereinbelow at least five (5) days before the time of the sale or Documents, in the Collateral, Debtor is the owner and holder of the Collateral, free of any adverse
disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement for claim, security interest or encumbrance (other than Permitted Encumbrances), and Debtor agrees to
giving of said notice. defend the Collateral against all claims and demands of any person at any time claiming the same or
any interest therein. Debtor further warrants and represents with respect to the Collateral that it has
(d) Upon occurrence and continuance of an Event of Default, Secured Party is hereby not heretofore signed, filed or authorized any financing statement and that no financing statements
granted the express right, at its option, to transfer to itself or to its nominee, the Collateral, or any signed, filed or authorized by Debtor are now on file in any public office except those statements true
part thereof, to notify any obligor or account debtor in the case of any Collateral to make payment and correct copies of which have been delivered to Secured Party.
directly to Secured Party, and to receive the money, income, proceeds or benefits attributable or
accruing thereto and to hold the same as security for the Secured Obligations or to apply the same ARTICLE VI
on the principal and interest or other amounts owing on any of the Secured Obligations, whether or
not then due, in such order or manner as Secured Party may elect, subject to the Loan Agreement CERTAIN COVENANTS AND WARRANTIES OF THE MORTGAGOR
and the Indenture. With respect to the Collateral, Debtor, for itself, its heirs and assigns, hereby
expressly and specifically waives all rights to a marshaling of the assets of Debtor, including the SECTION 6.1 Covenants and Warranties of the Mortgagor. As further assurances with
Collateral, or to a sale in inverse order of alienation. regard to the Secured Obligations, the Mortgagor hereby covenants, warrants, and agrees in favor of
the Mortgagee, as follows:
(e) All recitals in any instrument of assignment or any other instrument executed by
Secured Party incident to sale, transfer, assignment, lease, or other disposition or utilization of the (a) The Mortgagor hereby agrees and binds itself to perform and pay the Secured
Collateral or any part thereof hereunder shall be full proof of the matters stated therein, no other Obligations and every installment of principal and interest thereof promptly as the same becomes
proof shall be requisite to establish full legal propriety of the sale or other action or of any fact, due and payable.
condition or thing incident thereto, and all prerequisites of such sale or other action and of any fact,
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#5600154.3 B-50
 (b) The Mortgagor, to the extent same can lawfully be levied, hereby covenants and any such action or proceeding or the protection of the lien, security interest, validity, enforceability,
agrees to pay all taxes and assessments of every kind or character charged, levied, or assessed or priority of this instrument or of such title or rights, including the employment of counsel, the
against the Mortgaged Properties or any part thereof, before any such taxes or assessments become prosecution or defense of litigation, the compromise, release or discharge of such adverse claims, the
delinquent; to pay all water, gas, sewer, electricity, and other utility rates and charges with regard purchase of any tax title, and the removal of such prior liens and security interests. The Mortgagor
to the Mortgaged Properties; to pay all maintenance fees or charges of any owners’ association or shall, on demand, reimburse the Mortgagee for all expenses (including reasonable attorneys’ fees and
like group assessed with respect to the Mortgaged Properties; to pay any ground rents or charges disbursements) incurred by it (directly or indirectly by the Mortgagee) in connection with the
for any easement, license, or agreement existing for the benefit of the Mortgaged Properties; to pay foregoing matters. All such costs and expenses of the Mortgagee, until reimbursed by the Mortgagor,
any interest, costs or penalties with respect to the foregoing items; and, upon the written request of shall be part of the Secured Obligations and shall be deemed to be secured by this Mortgage.
the Mortgagee to the Mortgagor, to furnish to the Mortgagee evidence of the timely payment of
such items. SECTION 6.4 Compliance with Laws.

(c) The Land consists of one or more parcels assessed for purposes of Property Taxes (a) General. The Mortgagor will perform and comply promptly with, and cause the
as separate and distinct parcels from any other real property so that the Land shall never become Project to be maintained, used, and operated in accordance with, any and all (i) present and future
subject to the lien of any Property Taxes levied or assessed against any real property other than the laws, ordinances, rules, regulations, and requirements of every duly-constituted governmental or
Land. quasi-governmental authority or agency applicable to the Mortgagor or the Project, including,
without limitation, the Americans with Disabilities Act of 1990 and the Fair Housing Act; (ii)
(d) The Mortgagor, shall, at its sole cost and expense, obtain and maintain the similarly applicable orders, rules, and regulations of any regulatory, licensing, accrediting,
insurance coverage as described in the Loan Agreement. insurance underwriting, or rating organization, or other body exercising similar functions; (iii)
similarly applicable duties or obligations of any kind imposed under any Permitted Encumbrance
SECTION 6.2 Status of the Project. The Mortgagor has, or will have, on or prior to the or otherwise by law, covenant, condition, agreement, or easement, public or private; and (iv)
Closing Date, all certificates, licenses, and other approvals, governmental and otherwise, necessary policies of insurance at any time in force with respect to the Project. If the Mortgagor receives any
for the operation of the Project and Improvements and the conduct of its business thereat, or will notice that the Mortgagor or the Project is in default under or is not in compliance with any of the
otherwise be permitted under applicable law to operate the Project and the Improvements and conduct foregoing, or notice of any proceeding initiated under or with respect to any of the foregoing, the
its business thereat on and as of the Closing Date. Mortgagor will promptly furnish a copy of such notice to the Mortgagee.

(a) The Mortgagor will cause all debts and liabilities of any character, including (b) Zoning; Title Matters. The Mortgagor warrants that the Land is currently zoned
without limitation all debts and liabilities for labor, materials and equipment and all debts and such that the Mortgagor may lawfully operate thereon the respective senior living facilities to be
charges for utilities servicing the Project, incurred in the maintenance and operation of the Project acquired by the Mortgagor and constituting all or a portion of the Project. The Mortgagor also
to be promptly paid, except for those being contested or bonded around in accordance with the warrants that it will not, without the prior written consent of the Mortgagee, such consent not to be
applicable provisions of the Loan Agreement or this Mortgage. unreasonably withheld, conditioned or delayed, (i) initiate or overtly support any zoning
reclassification of the Mortgaged Properties, the Project, or the Improvements, seek any variance
(b) The Project and the Improvements are served by all utilities required for the under existing zoning ordinances applicable to the Mortgaged Properties, the Project or the
contemplated acquisition and use of the Project. Improvements, or use or permit the use of the Mortgaged Properties, the Project, and Improvements
in a manner which would result in such use becoming a non-conforming use under applicable
(c) All public roads and streets necessary to serve the Project and the Improvements zoning ordinances; (ii) modify, amend, or supplement any of the Permitted Encumbrances except
for the contemplated acquisition and use thereof are serviceable, and have been dedicated to and utility distribution easements across the Land which will permit utility service to the Project; (iii)
formally accepted by the appropriate governmental entities. impose any restrictive covenants or encumbrances upon the Mortgaged Properties or the
Improvements, execute or file any subdivision plat affecting the Mortgaged Properties or the
SECTION 6.3 Defense of Title and Litigation. If the lien or security interest created by Improvements, or consent to the annexation of the Mortgaged Properties or the Improvements to
this Mortgage, or the validity, enforceability, or priority thereof or of this instrument or if title or any any municipality except utility distribution easements across the Land which will permit utility
of the rights of the Mortgagor or the Mortgagee in or to the Project, shall be endangered or shall be service to the Project; or (iv) permit or suffer the Mortgaged Properties or the Improvements to be
attacked directly or indirectly or if any action or proceeding is instituted against the Mortgagor or the used by the public or any person in such manner as to make reasonably possible a claim of adverse
Mortgagee with respect thereto, the Mortgagor will promptly notify the Mortgagee thereof when usage or possession or of any implied dedication or easement.
known by the Mortgagor, and will diligently endeavor to cure any defect which may be developed or
claimed, and will take all necessary and proper steps for the defense of such action or proceeding, (c) No Cooperative or Condominium. The Mortgagor shall not operate or permit the
including the employment of counsel, the prosecution or defense of litigation, and, subject to the Project or the Improvements to be operated as a cooperative, condominium, or other form of
Mortgagee’s approval, in its sole reasonable discretion, the compromise, release, or discharge of any ownership in which the lessees or other occupants thereof participate in the ownership, control, or
and all adverse claims. If the Mortgagor fails to perform its obligations under this Section promptly, management of the Project, or any part thereof, as lessees, stockholders, or otherwise; provided, it
or if the positions of the Mortgagor and the Mortgagee are not identical, the Mortgagee (whether or shall not be a breach of this subsection for one (1) person who is a resident of a facility which is
not named as a party to such actions or proceedings) is hereby authorized and empowered (but shall part of the Project to participate in meetings of the board of directors of the Mortgagor.
not be obligated) to take such additional steps as it may deem necessary or proper for the defense of
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(d) Repair. The Mortgagor hereby covenants and agrees to keep and maintain the Upon request of the Mortgagor, the Mortgagee shall execute and deliver such instruments
Improvements now or at any time hereafter constituting a portion of the Mortgaged Properties in a or documents as shall be necessary or desirable to confirm the release of portions of the Mortgaged
state of good repair and condition; to make all repairs, replacements, reconstructions and Property from the lien of this Mortgage. Any such request must be accompanied by documentation
restorations necessary to keep such Improvements in such condition; and, without the prior written reasonably satisfactory to the Mortgagee confirming a permitted sale of the Mortgaged Property in
consent of the Mortgagee, not to tear down or remove or permit to be torn down or removed any accordance with the Loan Agreement or a termination of the Loan Agreement has resulted in the
such Improvements now existing or hereafter erected. sale of all or a portion of the Mortgaged Property. All reasonable costs and expenses (including
reasonable attorneys’ fees) incurred by the Mortgagee in connection with such release shall be paid
(e) Lien Priority. The Mortgagor covenants and agrees that, should it be discovered by the Mortgagor.
after the execution and delivery hereof, that there is a lien or encumbrance of any nature whatsoever
(other than Permitted Encumbrances) upon the Mortgaged Properties or any part thereof, equal or (j) No Pledges or Mortgages. The Mortgagor covenants and agrees that the
superior in rank to the lien of this Mortgage, or in case of an error or defect herein, or the execution Mortgagee may treat any mortgage, pledge, hypothecation, or encumbrance of the Mortgaged
or acknowledgment hereof, the Mortgagor shall immediately give written notice, together with a Properties or any interest therein other than the Permitted Encumbrances (collectively referred to
copy of such lien or encumbrance, to the Mortgagee and shall immediately thereafter, but in no as the “Pledge”), whether or not such Pledge is expressly subordinate to the lien of this Mortgage,
event later than thirty (30) days of discovery of such lien or encumbrance, correct such defects in as an Event of Default and thereupon may invoke any remedies permitted by this Mortgage.
such title, or remove said liens or encumbrances or homestead claim, or correct such error or defect
in this Mortgage or its execution or any acknowledgment hereof and provide evidence thereof to (k) Personalty. The Mortgagor shall not sell, convey or otherwise transfer or dispose
the Mortgagee. of its interest in any machinery or equipment in which the Mortgagee has a security interest
pursuant to any Document except in accordance with and as permitted by the Loan Agreement.
(f) Possession after Sale. The Mortgagor covenants and agrees that, after any sale
under this Mortgage, it, or its successors or assigns, shall be mere tenants at sufferance of the (l) Notice of Loss and Taking. The Mortgagor will give the Mortgagee prompt notice
purchaser of the property at said sale, and that such purchaser shall be entitled to immediate of any casualty loss, threat of Condemnation, Condemnation, or taking affecting all or any portion
possession thereof, and that, if the Mortgagor fails to vacate such property immediately, such of the Mortgaged Properties.
purchaser may and shall have the right to go into any justice court having venue, or in any other
court hereafter having jurisdiction of forcible detainer actions, and file an action in forcible (m) Payment after Default. In the event the Secured Obligations shall become due and
detainer, which action shall lie against the Mortgagor or its successors or assigns as tenants at payable by virtue of an Event of Default, the Mortgagor agrees that any tender of payment of the
sufferance. Secured Obligations prior to a foreclosure sale shall, at the option of the Mortgagee, be deemed a
voluntary prepayment by the Mortgagor requiring the payment of any prepayment penalty, or
(g) Subrogation. To the extent the proceeds of any of the Secured Obligations are redemption premium required under the terms of the documents evidencing the Secured
used for the purpose of paying the indebtedness secured by any mortgage lien having priority over Obligations to the full extent that such payment, when added to all other amounts then and
the lien of this Mortgage, the Mortgagee shall be subrogated to any and all rights, superior titles, theretofore paid and which constitute interest, would not exceed the maximum lawful interest
liens and equities owned or claimed by the holder of such prior mortgage. Except with respect to permitted to be charged of the Mortgagor.
the priority of any mortgage to which the Mortgagee is subrogated pursuant to the provisions
hereof, the terms and provisions of this Mortgage shall govern the rights and remedies of the SECTION 6.5 Indemnification. THE MORTGAGOR HEREBY AGREES TO INDEMNIFY,
Mortgagee and shall supersede the rights and remedies provided under any mortgage to which the HOLD HARMLESS AND DEFEND THE ISSUER, THE MORTGAGEE, AND THEIR RESPECTIVE
Mortgagee is subrogated. OFFICIALS, OFFICERS, DIRECTORS AND EMPLOYEES (EACH, AN “INDEMNIFIED PARTY” AND
COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST (X) (1) ANY LOSS, LIABILITY,
(h) Due on Sale. The Mortgagor covenants and agrees that the Mortgagee may treat DEMAND, DAMAGE, COST, EXPENSE, CLAIM, ACTION OR CAUSE OF ACTION ARISING FROM THE
any sale, transfer, or conveyance of the Mortgaged Properties or any interest therein (except for the IMPOSITION OR RECORDING OF A LIEN, THE INCURRING OF COSTS OF REQUIRED REPAIRS,
Leases, Permitted Encumbrances, or any other sale, transfer or conveyance permitted by the REMEDIATION, CLEAN UP OR DETOXIFICATION AND REMOVAL UNDER ANY APPLICABLE
Documents or otherwise, as provided in and in accordance with the Loan Agreement and the ENVIRONMENTAL LAW (INCLUDING OTHER ASSOCIATED COSTS, INTEREST, FEES, AND
Indenture), as an Event of Default, and thereupon may invoke any remedies permitted by this PENALTIES) WITH RESPECT TO ALL OR ANY PART OF THE MORTGAGED PROPERTIES OR
Mortgage. LIABILITY TO ANY THIRD PARTY IN CONNECTION WITH ANY VIOLATION OF ANY APPLICABLE
ENVIRONMENTAL LAW; (2) ANY OTHER LOSS, LIABILITY, DAMAGE, COST, EXPENSE, OR CLAIM
(i) Release of Mortgage Property. The Mortgagee acknowledges and agrees that (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS AND
certain permitted sales of the Mortgaged Properties are allowed under the Loan Agreement and that EXPENSES, AND COSTS AND EXPENSES REASONABLY INCURRED IN INVESTIGATING, PREPARING,
the termination of the Loan Agreement may result in the sale of all or a portion of the Mortgaged SETTLING OR DEFENDING AGAINST ANY LITIGATION OR CLAIM, ACTION, SUIT, PROCEEDING OR
Properties. To the extent that a permitted sale of any portion of the Mortgaged Properties occurs DEMAND OF ANY KIND OR CHARACTER), WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
in accordance with the Loan Agreement or a termination of the Loan Agreement results in a sale THE INDEMNIFIED PARTIES OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, DIRECTLY OR
of any portion of the Mortgaged Property, such portion of the Mortgaged Property shall also be INDIRECTLY, ARISING FROM THE PRESENCE ON OR UNDER, OR THE DISCHARGE, EMISSION OR
released from the lien of this Mortgage. RELEASE FROM ANY OF THE MORTGAGED PROPERTIES INTO OR UPON THE LAND, ATMOSPHERE,
OR ANY WATERCOURSE, BODY OF SURFACE OR SUBSURFACE WATER OR WETLAND, ARISING FROM

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 THE INSTALLATION, USE, GENERATION, MANUFACTURE, TREATMENT, HANDLING, REFINING, The Mortgagor shall be responsible for the reasonable counsel fees, costs, and expenses of the
PRODUCTION, PROCESSING, STORAGE, REMOVAL, REMEDIATION CLEAN UP OR DISPOSAL OF ANY Indemnified Party in conducting its defense under the circumstances described in the preceding
HAZARDOUS SUBSTANCE WHETHER OR NOT CAUSED BY THE MORTGAGOR; AND (3) LOSS OF sentence.
VALUE OF ANY OF THE MORTGAGED PROPERTIES AS A RESULT OF ANY SUCH LIEN, REMEDIATION
CLEAN UP, DETOXIFICATION, LOSS, LIABILITY, DAMAGE, EXPENSE OR CLAIM OR A FAILURE OR (b) The foregoing indemnification is intended to and shall be enforceable by the
DEFECT IN TITLE OCCASIONED BY ANY HAZARDOUS SUBSTANCE OR APPLICABLE Indemnified Parties to the full extent permitted by law.
ENVIRONMENTAL LAW, AND IN ANY SUCH CASE, THE MORTGAGOR SHALL DEFEND SUCH CLAIM,
AND THE INDEMNIFIED PARTY SHALL COOPERATE IN THE DEFENSE AND MAY HAVE SEPARATE (c) Notwithstanding anything herein to the contrary, nothing in this Section shall be
COUNSEL OF ITS CHOOSING, AND IN SUCH EVENT THE MORTGAGOR SHALL PAY THE FEES AND construed as to require the Mortgagor to satisfy or pay any claims settled by an Indemnified Party
EXPENSES OF SUCH COUNSEL AND (Y) ANY AND ALL OTHER ACTUAL OUT-OF-POCKET LOSSES OR without the prior written consent of the Mortgagor.
EXPENSES SUFFERED OR INCURRED BY ANY INDEMNIFIED PARTY TO THE EXTENT CAUSED BY
CLAIMS, JOINT OR SEVERAL, BY OR ON BEHALF OF ANY PERSON ARISING FROM ANY CAUSE SECTION 6.6 Certificate. The Mortgagor, upon request by the Mortgagee, made either
WHATSOEVER IN CONNECTION WITH TRANSACTIONS CONTEMPLATED HEREBY OR OTHERWISE IN personally or by mail, shall certify, by a writing duly acknowledged, to the Mortgagee or to any
CONNECTION WITH THE MORTGAGED PROPERTIES, THE BONDS (AND WITH RESPECT TO THE proposed assignee of this Mortgage, the amount of principal and interest then owing on this Mortgage
MORTGAGEE, ACCEPTANCE OR ADMINISTRATION OF THE TRUST IMPOSED BY THE INDENTURE), and whether any offsets or defenses exist against the indebtedness hereby secured, within ten (10) days
OR THE EXECUTION OR AMENDMENT OF ANY DOCUMENT RELATING THERETO, AND ALL after the receipt by the Mortgagor of such request.
REASONABLE ACTUAL OUT-OF-POCKET COSTS, COUNSEL FEES, EXPENSES OR LIABILITIES
INCURRED IN CONNECTION WITH ANY SUCH CLAIM, OR PROCEEDING BROUGHT THEREON, ARTICLE VII
EXCEPT TO THE EXTENT SUCH DAMAGES ARE CAUSED, IN THE CASE OF THE MORTGAGEE, BY THE
BAD FAITH, NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY. DEFAULTS

NOTWITHSTANDING THE FOREGOING, UPON ANY PERMITTED TRANSFER OF ALL OR ANY PART SECTION 7.1 Event of Default. Should any of the following events or conditions
OF THE MORTGAGED PROPERTIES TO ANOTHER PERSON, THE RELEASE OF ALL OR ANY PART OF THE occur, the same shall constitute an event of default under this Mortgage (herein called “Event of
MORTGAGED PROPERTIES FROM THE LIEN OF THIS MORTGAGE, THE FORECLOSURE OF THE LIEN OF Default”):
THIS MORTGAGE, THE APPOINTMENT OF A RECEIVER OR THE OCCURRENCE OF ANY OTHER EVENT
WHICH DIVESTS THE MORTGAGOR OF CONTROL OF ALL OR ANY PART OF THE MORTGAGED (a) the Mortgagor shall fail or refuse to pay all or any portion of the Secured
PROPERTIES OR THE RECEIPTS THEREOF (EACH, A “TRANSFER”), THE MORTGAGOR SHALL REMAIN Obligations when due, subject to any grace periods applicable to such payments in the Documents
OBLIGATED TO INDEMNIFY EACH INDEMNIFIED PARTY PURSUANT TO THIS SECTION WITH RESPECT TO evidencing such Secured Obligations;
(BUT ONLY WITH RESPECT TO) ACTS OCCURRING PRIOR TO THE DATE OF SUCH TRANSFER
(IRRESPECTIVE OF WHEN A CLAIM IS ACTUALLY MADE), PROVIDED THAT EXCEPT AS TO THE ISSUER, (b) the Mortgagor shall fail to perform or to fulfill in a timely manner any other of the
THE INDEMNITY PROVISIONS OF THIS SECTION (AS SO LIMITED) SHALL SURVIVE THE TERMINATION OF Secured Obligations, including specifically, but not limited to, the covenants and obligations of the
THIS MORTGAGE, SUCH TRANSFER OR OTHER DISPOSITION OF ALL OR ANY PART OF THE MORTGAGED Mortgagor contained in this Mortgage, and continuance of such failure for a period of 30 days
PROPERTIES FOR A PERIOD OF TWO YEARS. THE RIGHTS OF THE ISSUER HEREUNDER SHALL NOT (unless a different grace period is specifically provided for in this Mortgage or the Documents)
TERMINATE AT SUCH TIME. after there has been given, by registered or certified mail, to the Mortgagor by the Mortgagee, or to
the Mortgagor and the Mortgagee by Holders of at least 25% of the Bonds then Outstanding, a
(a) In case any action or proceeding is brought against any Indemnified Party in written notice specifying such failure and requiring it to be remedied and stating that such notice is
respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall a notice of default under this Mortgage;
give notice of that action or proceeding to the Mortgagor, and the Mortgagor upon receipt of that
notice shall have the obligation and the right to assume the defense of the action or proceeding; (c) any warranty or representation of the Mortgagor set forth in this Mortgage or the
provided that failure of a party to give that notice shall not relieve the Mortgagor from any of its Documents shall prove to have been untrue in any material respect when made; or
obligations under this Section unless that failure prejudices the defense of the action or proceeding
by the Mortgagor. Any Indemnified Party shall have the right to employ separate counsel in any (d) any “event of default” or “default,” however defined, shall have occurred under
such action and to participate in the defense thereof, but the fees and expenses of such counsel shall the Loan Agreement, the Indenture, any of the Secured Obligations or any of the documents
be at the expense of such Indemnified Party. If the Indemnified Party is advised in an opinion of evidencing or securing the Secured Obligations or any other Document, in each case, after the
counsel that there may be conflicting interests between the Mortgagor and the Indemnified Party expiration of all applicable grace and cure periods.
or legal defenses available to the Indemnified Party which are different from or in addition to those
available to the Mortgagor or if the Mortgagor shall, after this notice and within a period of time SECTION 7.2 Remedies. Upon the occurrence of an Event of Default, so long as such
necessary to preserve any and all defenses to any claim asserted, fail to assume the defense or to Event of Default remains uncured, the Mortgagee shall have the option and right to take any one or
employ counsel for that purpose reasonably satisfactory to the Indemnified Party, the Indemnified more of the following actions: (a) declare the Secured Obligations, without deduction and without
Party shall have the right, but not the obligation, to undertake the defense of, and to compromise notice, to be immediately due and payable, and the Mortgagee will be entitled to foreclose this
or settle the claim or other matter on behalf of, for the account of, and at the risk of, the Mortgagor. Mortgage by judicial proceeding, or (b) after any notice to the Mortgagor required by the Oklahoma

21 22

Power of Sale Mortgage Foreclosure Act, 46 Okla. Stat. § 41 et seq. (1991), as amended from time to the payment of indebtedness hereby secured to any other security therefor held by the Mortgagee in
time (the “Power of Sale Act”) declare the Secured Obligations, without deduction, to be immediately such order and manner as the Mortgagee may elect.
due and payable, and the Mortgagee will be entitled to foreclose this Mortgage by power of sale
pursuant to the provisions of the Power of Sale Act. The Mortgagor hereby confers upon the SECTION 7.5 Expenses of Collection. It is agreed that if, and as often as, this Mortgage
Mortgagee and grants to the Mortgagee the power to sell the Mortgaged Properties pursuant to the or any of the Secured Obligations is placed in the hands of an attorney for collection, or to protect the
Power of Sale Act or any other applicable authority. Upon the occurrence and during the continuation priority or validity of this Mortgage, or to prosecute or defend any suit affecting the Mortgaged Properties,
of an Event of Default, the Mortgagee will be entitled to exercise all further and additional remedies or to enforce or defend any of the Mortgagee’s rights hereunder, the Mortgagor shall pay to the Mortgagee
as might now or hereafter be accorded to the Mortgagee at law or in equity. Whether the Mortgagee its reasonable attorney’s fees, together with all court costs, expenses for title examination, title insurance
elects to foreclose this Mortgage by judicial proceeding or by power of sale, the Mortgagee shall, or other disbursements relating to the Mortgaged Properties, which sums shall be secured hereby.
immediately on default, be entitled to the possession of the Mortgaged Properties and the rents and
profits thereof, and shall be entitled to have a receiver appointed to take possession of the Mortgaged ARTICLE VIII
Properties without notice, which notice the Mortgagor hereby waives, notwithstanding anything
contained in this Mortgage or any law heretofore or hereafter enacted. No action of the Mortgagee CERTAIN REMEDIES
based upon the provisions contained herein or contained in the Power of Sale Act, including, without
limitation, the giving of any of the notices provided for in the Power of Sale Act shall constitute an SECTION 8.1 Application of Proceeds. The Mortgagee shall pay, distribute, and apply
election of remedies which would preclude the Mortgagee from pursuing judicial foreclosure before the proceeds of any disposition of the Mortgaged Properties for deposit and use as provided in the
or at any time after commencement of the power of sale foreclosure procedure. Indenture. Said disposition shall forever be a bar against the Mortgagor, its legal representatives,
successors and assigns, and all other persons claiming under any of them. It is expressly agreed that
SECTION 7.3 Remedies Cumulative. The rights of the Mortgagee arising under the the recitals in each conveyance to the purchaser shall be full evidence of the truth of the matters therein
clauses and covenants contained in this Mortgage shall be separate, distinct and cumulative and none stated, and all lawful prerequisites to said disposition shall be conclusively presumed to have been
of them shall be in exclusion of the other. No act of the Mortgagee shall be construed as an election performed.
to proceed under any one provision herein to the exclusion of any other provision, anything herein or
otherwise to the contrary notwithstanding. SECTION 8.2 Remedies Not Exclusive. No lien, right, or remedy herein conferred
upon or otherwise available to the Mortgagee is intended to be or shall be construed to be exclusive
SECTION 7.4 No Waiver. Any failure by the Mortgagee to insist upon the strict of any other available lien, right, or remedy, but each and every such lien, right, or remedy shall be
performance by the Mortgagor of any of the terms and provisions hereof shall not be deemed to be a cumulative and shall be in addition to every other lien, right, or remedy given hereunder or now or
waiver of any of the terms and provisions hereof, and the Mortgagee, notwithstanding any such failure, hereafter existing at law or in equity or by statute. No delay or omission to exercise any right, power,
shall have the right thereafter to insist upon the strict performance by the Mortgagor of any and all of or remedy accruing upon any default or Event of Default shall impair any such right, power, or remedy
the terms and provisions of this Mortgage to be performed by the Mortgagor. Neither the Mortgagor or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein,
nor any other person now or hereafter obligated for the payment of the whole or any part of the but every such right, power, or remedy may be exercised from time to time and as often as may be
indebtedness now or hereafter secured by this Mortgage shall be relieved of such obligation by reason deemed expedient. No waiver of any default or Event of Default hereunder shall extend to or shall
of the failure of the Mortgagee to comply with any request of the Mortgagor or of any other person so affect any subsequent default or Event of Default or shall impair any rights or remedies consequent
obligated to take action to foreclose this Mortgage or otherwise enforce any of the provisions of this thereon. The giving, taking, or enforcement of any other or additional security, collateral, or guaranty
Mortgage or of any obligations secured by this Mortgage, or by reason of the release, regardless of for the payment of the Secured Obligations shall not operate to prejudice, waive, or affect the security
consideration, of the whole or any part of the security held for the indebtedness secured by this of this Mortgage or any rights, powers, or remedies hereunder, nor shall the Mortgagee be required to
Mortgage, or by reason of any agreement or stipulation between any subsequent owner or owners of first look to, enforce, or exhaust such other additional security, collateral, or guarantees.
the Mortgaged Properties and the Mortgagee extending, from time to time, the time of payment or
modifying the terms of this Mortgage or any of the other Documents without first having obtained the SECTION 8.3 Waivers.
consent of the Mortgagor or such other person, and in the latter event, the Mortgagor and all such other
persons shall continue liable to make such payments according to the terms of any such agreement of (a) All rights of marshaling of assets or sale in inverse order of alienation in the event
extension or modification unless expressly released and discharged in writing by the Mortgagee. of foreclosure of any lien at any time securing the Secured Obligations or any part thereof
Regardless of consideration, and without the necessity for any notice to or consent by the holder of (including, but not limited to, the lien hereby created) are hereby waived.
any subordinate lien on the Mortgaged Properties, the Mortgagee may release the obligation of anyone
at any time liable for any of the indebtedness secured by this Mortgage or any part of the security held (b) Appraisement of the Mortgaged Properties is hereby expressly waived, or not, at
for such indebtedness and may from time to time extend the time of payment or otherwise modify the the option of the Mortgagee, such option to be exercised at the time judgment is rendered in any
terms of this Mortgage or any other Document without, as to the security for the remainder thereof, in foreclosure hereof, or at any time prior thereto.
any way impairing or affecting the lien of this Mortgage or the priority of such lien, as security for the
payment of the indebtedness as it may be so extended or modified, over any subordinate lien. The (c) To the extent allowed by applicable law, the Mortgagor shall not at any time insist
holder of any subordinate lien shall have no right to terminate any lease affecting the Mortgaged upon or plead or in any manner whatever claim or take the benefit or advantage of any stay or
Properties whether or not such lease be subordinate to this Mortgage. The Mortgagee may resort for extension law or any law exempting the Mortgaged Properties from attachment, levy, or sale on
execution now or at any time hereafter in force in any locality where the Mortgaged Properties or
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 any part thereof may or shall be situated, and the Mortgagor hereby expressly waives all benefit ARTICLE XI
and advantage of any such law or laws and covenants that the Mortgagor will not hinder, obstruct,
delay, or impede the execution of any power herein granted, but that the Mortgagor will suffer and ENVIRONMENTAL AND LAND USE MATTERS
permit the execution of every such power as though no such law or laws had been made or enacted.
SECTION 11.1 Environmental Representations, Warranties and Covenants. The
SECTION 8.4 Sale in Parcels. In case of any sale under this Mortgage by virtue of Mortgagor represents, warrants, and covenants, to Mortgagor’s limited actual knowledge obtained
judicial proceedings or otherwise, the Mortgaged Properties may be sold in one parcel and as an entirety or solely from Mortgagor’s review of the Property Reports (defined below), as follows:
in such parcels, manner or order as the Mortgagee in its sole discretion may elect, and the Mortgagor waives
any and all rights which the Mortgagor may have to insist upon the sale of the Mortgaged Properties in one (a) the location, occupancy, operation, and use of the Mortgaged Properties does not
parcel or in separate parcels. violate any applicable law (including, without limitation, applicable provisions of the Occupational
Safety and Health Act of 1970, the Employee Retirement Income Security Act of 1974, the
SECTION 8.5 Bankruptcy. The entire indebtedness secured by this Mortgage shall Americans with Disabilities Act of 1990, and corresponding rules and regulations), statute,
become and immediately be due at the option of the Mortgagee if by order of a court of competent ordinance, rule, regulation, order, or determination of any governmental authority or any board of
jurisdiction a receiver or liquidator or trustee of the Mortgagor or of all or any part of the Mortgaged fire underwriters (or other body exercising similar functions), or any restrictive covenant or deed
Properties, shall be appointed and shall not have been discharged within one hundred eighty (180) days; or, restriction (recorded or otherwise) affecting the Mortgaged Properties, including, without
if by decree of such court, the Mortgagor shall be adjudicated bankrupt or insolvent or the Mortgaged limitation, all applicable zoning ordinances and building codes, flood disaster laws, and health and
Properties shall have been sequestered and such decree shall have continued undischarged and unstayed for environmental laws and regulations;
one hundred eighty (180) consecutive days after the entry thereof; or if the Mortgagor shall file a petition
in voluntary bankruptcy or seeking relief under any provision of any bankruptcy or insolvency law or shall (b) neither the Mortgaged Properties nor the Mortgagor is in violation of or subject to
consent to the filing of any bankruptcy petition against the Mortgagor under any such law; or if the any existing, pending, or threatened investigation or inquiry by any governmental authority or to
Mortgagor shall file a petition or answer seeking reorganization or an arrangement with creditors; or if any remedial obligations under any Application Regulations pertaining to health or the environment
(without limitation of the generality of the foregoing) the Mortgagor shall make an assignment for the (herein sometimes collectively called “Applicable Environmental Law”), including, without
benefit of creditors, or shall admit in writing an inability to pay debts generally as they become due, or shall limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980,
consent to the appointment of a receiver, or trustee or liquidator of the Mortgagor or of all or any part of 42 U.S.C. §9601 et seq., as amended (“CERCLA”), the Hazardous Materials Transportation Act,
the Mortgaged Properties. 49 U.S.C. §1801 et seq., as amended, the Resource Conservation and Recovery Act, 42 U.S.C.
§6901 et seq., as amended (“RCRA”), the Toxic Substance Control Act of 1976, 14 U.S.C. §2601
ARTICLE IX et seq., as amended, the Clean Water Act, 33 U.S.C. §466 et seq., as amended, the Clean Air Act,
42 U.S.C. §7401, et seq., as amended, the Oklahoma laws covering Water and Water Rights, the
CONDEMNATION AND CASUALTY LOSS Oklahoma Solid Waste Management Act, the Oklahoma Controlled Industrial Waste Disposal Act,
the Oklahoma Clean Air Act and any other federal, state, or local law similar to those set forth in
SECTION 9.1 Condemnation. If the Mortgaged Properties, or any part thereof, shall this definition, and this representation and warranty would continue to be true and correct following
be condemned or taken for public use under the power of eminent domain, all Net Proceeds from disclosure to the applicable governmental authorities of all relevant facts, conditions, and
awards, compensation, settlement, and damages for such taking of or injury to the Mortgaged circumstances, if any, pertaining to the Mortgaged Properties. If any such investigation or inquiry
Properties shall be applied in accordance with the Indenture and the Loan Agreement. is subsequently initiated, the Mortgagor will promptly notify the Mortgagee;

SECTION 9.2 Casualty. Should the Mortgaged Properties be wholly or partially (c) the Mortgagor has not obtained and is not required to obtain any permits, licenses,
destroyed or damaged by fire, explosion, windstorm, or other insured casualty, all Net Proceeds that or similar authorizations to acquire, occupy, operate, or use any buildings, improvements, fixtures,
may become payable or collectible upon any policy of insurance by reason of such damage to or and equipment forming a part of the Mortgaged Properties by reason of any Applicable
destruction of the Mortgaged Properties shall be applied in accordance with the Indenture and the Loan Environmental Law;
Agreement.
(d) the Land has not previously been used as a landfill or as a dump for garbage or
ARTICLE X refuse; the Land does not lie within a flood plain or in an area that has been identified by the
Secretary of the United States Department of Housing and Urban Development as an area having
AMENDMENTS OF AND SUPPLEMENTS TO THIS special flood hazards, or, to the extent a portion of the Land may fall within such flood plain, the
MORTGAGE AND OTHER DOCUMENTS Mortgagor shall provide sufficient insurance coverage against such hazard. The Mortgagor has not
manufactured, used, generated, stored, found, released, or disposed of any Hazardous Substance
SECTION 10.1 Amendments and Supplements with Consent; Limitations. The on, under, or about the Land in violation of any applicable federal, state, or local law, statute,
Mortgagee and the Mortgagor may at any time and from time to time enter into a supplemental ordinance, or regulation (“Law”). The Mortgagor has no knowledge that any Hazardous Substance
mortgage on the conditions and in the manner set forth in Section 11.04 of the Indenture and Section or solid wastes have been illegally disposed of or otherwise illegally or released on or about the
11.05 of the Indenture. Mortgaged Properties;

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(e) except as disclosed to the Mortgagee in writing, the Mortgaged Properties do not SECTION 11.3 Site Assessments. Upon written direction by the Mortgagee (by its
contain lead based paint, asbestos, urea-formaldehyde foam insulation, or any other chemical, officers, employees and agents) at any time and from time to time (not more than once each calendar
material, or substance exposure to which may or could pose a health hazard whether or not the year unless an environmental condition is reported or found to exist on the Mortgaged Properties in
substance is prohibited, limited, or regulated by any governmental authority; and which event no limit shall apply) shall contract for the services of persons or entities (the “Site
Reviewers”) to perform environmental site assessments (“Site Assessments”) on all or any part of the
(f) the use which the Mortgagor makes or intends to make of the Mortgaged Properties Mortgaged Properties to determine the existence of any environmental condition which under any
will not result in the illegal manufacturing, treatment, refining, transportation, generation, storage, Applicable Environmental Law might result in any liability, cost or expense to the owner, occupier or
disposal, or other release or presence of any Hazardous Substance or solid waste on or to the operator of any of the Mortgaged Properties. The Site Reviewers are authorized to enter upon all or
Mortgaged Properties. For purposes of this Article, the terms “Hazardous Substance” and “release” any part of the Mortgaged Properties to conduct Site Assessments during normal business hours upon
shall have the respective meanings specified in CERCLA, and the terms “solid waste” and reasonable prior notice. The Site Reviewers are further authorized to perform both above and below
“disposal” (or “disposed”) shall have the respective meanings specified in RCRA, provided, in the the ground testing for environmental damage or the presence of Hazardous Substances on any of the
event either CERCLA or RCRA is amended so as to broaden any meaning of any term defined Mortgaged Properties and such other tests on or of any of the Mortgaged Properties as the Site
thereby, such broader meaning shall apply subsequent to the effective date of such amendment, and Reviewers, the Mortgagee may deem necessary. The Mortgagor agrees to supply to the Site Reviewers
provided, further, to the extent that the laws of the State establish a meaning for “hazardous and the Mortgagee such historical and operational information regarding the Mortgaged Properties as
substance,” “release,” “solid waste,” or “disposal” which is broader than that specified in either may be reasonably requested to facilitate the Site Assessments and will make available for meetings
CERCLA or RCRA, such broader meaning shall apply; provided, further, that the term “Hazardous with the Site Reviewers appropriate personnel having knowledge of such matters. The results of Site
Substance” shall also include those listed in the U.S. Department of Transportation Table (49 Assessments shall be furnished to the Mortgagor upon request. The cost of performing Site
C.F.R. 172.101) and amendments thereto from time to time. Assessments shall be paid by the Mortgagor.

The foregoing representations, covenants, and warranties are in addition to, and in no way limit the SECTION 11.4 Rights of the Mortgagee. Notwithstanding any other provision of this
representations, covenants, and warranties of the Mortgagor to the Mortgagee under the Loan Agreement. Mortgage to the contrary, the Mortgagee may first require, in the exercise of its sole and unlimited
As used in this Section 11.1, the term “Property Reports” shall mean (i) that certain Property Condition discretion, that it receive (a) a Site Assessment or other environmental report in form and substance
Report regarding 1001 South Bryant Avenue, Edmond, Oklahoma, dated November 28, 2017, prepared by satisfactory to it and (b) indemnification for all costs and expenses incurred in connection therewith,
OGI Environmental LLC (the “Environmental Consultant”), Project No. OGI-17-187; (ii) that certain Phase before the Mortgage is required to foreclose upon or take possession or title to any Mortgaged
I Environmental Site Assessment regarding 1001 South Bryant Avenue, Edmond, Oklahoma, dated Properties in connection with an Event of Default. Further, if the Mortgagee determines, in the
November 21, 2017, prepared by the Environmental Consultant, Project No. OGI-17-187; and (iii) that exercise of its sole and unlimited discretion, that it does not desire to become the owner of, or take
certain Zoning Analysis Report related to 1001 South Bryant Avenue, Edmond, Oklahoma, dated December possession of such real property or improvements thereon, in its capacity as Mortgagee, the Mortgagee
4, 2017, prepared by AEI Consultants, Project No. 381188; copies of which Property Reports have been shall not be required to proceed with such foreclosure or to take possession, and shall give written
provided to the Mortgagee prior to the date hereof. notice of such determination to the Issuer. If the Controlling Holders nonetheless desire to proceed
with foreclosure and so notify the Mortgagee in writing, the Mortgagee may resign, and such
SECTION 11.2 Notices; Proceedings. The Mortgagor shall immediately advise the resignation shall become effective upon the appointment of a successor trustee in accordance with the
Mortgagee in writing of (a) any governmental or regulatory actions instituted or threatened under any provisions of the Indenture. THE MORTGAGEE SHALL HAVE NO OBLIGATION TO INDEMNIFY OR
Applicable Environmental Law affecting all or any part of or any interest in the Mortgaged Properties, OTHERWISE COMPENSATE ANY SUCH SUCCESSOR MORTGAGEE FOR ANY LOSS, COST, OR
(b) all claims made or threatened by any third party against the Mortgagor or the Mortgaged Properties EXPENSE ARISING OUT OF ANY SUCH FORECLOSURE OR OTHER MATTER, AND IF ANY SUCH
relating to damage, contribution, cost recovery, compensation, or loss or injury resulting from any SUCCESSOR MORTGAGEE REQUESTS SUCH INDEMNIFICATION, THE BONDHOLDERS SHALL HAVE
Hazardous Substance, (c) the discovery of any occurrence or condition on any real property adjoining THE SOLE RESPONSIBILITY FOR PROVIDING SUCH INDEMNIFICATION.
or in the vicinity of the Mortgaged Properties that could cause the Mortgaged Properties to be classified
in a manner which may support a claim under any Applicable Environmental Law, and (d) the ARTICLE XII
discovery of any occurrence or condition on any part of the Mortgaged Properties or any real property
adjoining or in the vicinity of the Mortgaged Properties which could subject the Mortgagor or any part MISCELLANEOUS
of the Mortgaged Properties to any limitations or restrictions on the ownership, occupancy,
transferability or use thereof. The Mortgagee may elect (but shall not be obligated) to join and SECTION 12.1 Severability. If any provision of this Mortgage is held to be illegal,
participate in any settlements, remedial actions, legal proceedings or other actions initiated in invalid, or unenforceable under present or future laws, such provision shall be fully severable and shall
connection with any claims or responses under any Applicable Environmental Law and to have its not invalidate this Mortgage, and the remaining provision of this Mortgage shall remain in full force
reasonable attorneys’ fees relating to such participation paid by the Mortgagor. At its sole cost and and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance
expense, the Mortgagor agrees to promptly and completely cure and remedy every existing and future from this Mortgage.
violation of an Applicable Environmental Law occurring on or with respect to any part of the
Mortgaged Properties and to promptly remove all Hazardous Substances now or hereafter in, on or SECTION 12.2 Captions and Titles. All article, section and subsection titles or captions
under all or any part of the Mortgaged Properties and to dispose of the same as required by Applicable contained in this Mortgage or in any schedule or exhibit hereto are for convenience only and shall not
Environmental Law(s). be deemed a part of this Mortgage and shall not affect the meaning or interpretation of this Mortgage.

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 SECTION 12.3 Usury Savings Clause. The Mortgagor and the Mortgagee specifically custody of a nationally recognized overnight delivery service, such as Federal Express Corporation,
intend and agree to limit contractually the amount of interest payable under this Mortgage, the Secured addressed to such party at the address herein specified. Any notice given in the above manner shall
Obligations, and all other instruments and agreements related hereto and thereto to the maximum be deemed effective (i) if given by mail, three days after its deposit into the custody of the U.S. postal
amount of interest lawfully permitted to be charged under applicable law. Therefore, none of the terms service (except as to the Mortgagee for whom notice shall be effective only upon receipt); or (ii) if
of this Mortgage, the Secured Obligations, or any instrument pertaining to or relating to this Mortgage employing any other method, upon receipt. The addresses for notices for the Mortgagee and the
or the Secured Obligations shall ever be construed to create a contract to pay interest at a rate in excess Mortgagor under this Mortgage and for all notices hereunder shall be as follows:
of the maximum rate permitted to be charged under applicable law, and neither the Mortgagor nor any
other party liable or to become liable hereunder, under the Secured Obligations, or under any other If to the Mortgagee: UMB Bank, N.A.
instruments and agreements related hereto and thereto shall ever be liable for interest in excess of the 5910 N Central Expressway, Suite 1900
amount determined at such maximum rate, and the provisions of this paragraph shall control over all Dallas, Texas 75206
other provisions of this Mortgage, the Secured Obligations, or of any other instrument pertaining to or Attn: Israel Lugo
relating to the transactions herein contemplated. If any amount of interest taken or received by the Telephone: (214) 389-5947
Mortgagee shall be in excess of said maximum amount of interest which, under applicable law, could Email: [email protected]
lawfully have been collected by the Mortgagee incident to such transactions, then such excess shall be
deemed to have been the result of a mathematical error by all parties hereto and shall, at the election If to the Mortgagor: Leading Life Senior Living, Inc.
of the Mortgagee, either be applied as credit against the then unpaid principal amount of the Secured 6370 Lyndon B. Johnson Freeway, Suite 276
Obligations or refunded promptly to the party paying such amount. All amounts paid or agreed to be Dallas, TX 75240
paid in connection with such transactions which would under applicable law be deemed “interest” Attn: Robert Mosteller, Chairman
shall, to the extent permitted by such applicable law, be amortized, prorated, allocated, and spread Telephone: (469) 371-0446
throughout the stated term of the Secured Obligations. As used in this Section, (a) “applicable law” Email: [email protected]
means that law in effect from time to time which lawfully permits the charging and collection of the
highest permissible lawful, nonusurious rate of interest on the transactions herein contemplated, Copy to: Bracewell LLP
including laws of the State and of the United States of America; and (b) “maximum rate,” as used in 1445 Ross Ave., Suite 3800
this paragraph, means, with respect to each portion of the Secured Obligations, the maximum lawful, Dallas, TX 75202
nonusurious rate of interest (if any) which under applicable law the Mortgagee is permitted to charge Telephone: (214) 758-1079
from time to time with respect to such portion of the Secured Obligations. Attn: Jonathan Leatherberry
Email: [email protected]
SECTION 12.4 Additional Security. The Mortgagor agrees that no other security, now
existing or hereafter taken, for the Secured Obligations shall be impaired or affected in any manner by If to the Issuer: The Oklahoma Development Finance Authority
the execution hereof; no security subsequently taken by any holder of the Secured Obligations shall 9220 North Kelley Avenue
impair or affect in any manner the security given by this Mortgage; all security for the payment of the Oklahoma City, OK 73131
Secured Obligations shall be taken, considered, and held as cumulative; and the taking of additional Telephone: (405) 842-1145
security shall at no time release or impair any security by endorsement or otherwise previously given. Attn: Michael Davis, President
The Mortgagor further agrees that any part of the security herein described may be released without Email: [email protected]
in anywise altering, varying, or diminishing the force, effect, or lien of this Mortgage, or of any
renewal or extension of said lien, and that this Mortgage shall continue as a first lien, assignment, and Copy to: Skarky Law Firm, PLLC
security interest on all the Mortgaged Properties (subject however to Permitted Encumbrances) not P.O. Box 20370
expressly released until all Secured Obligations are fully discharged and paid. Oklahoma City, OK 73156
Telephone: (405) 641-4411
SECTION 12.5 Suit Not an Election of Remedies. The filing of a suit to foreclose any Attn: Earl A. Skarky
lien, assignment, or security interest under this Mortgage either on any matured portions of the Secured Email: [email protected]
Obligations or for all Secured Obligations shall never be considered an election so as to preclude
foreclosure under any power of sale herein contained after dismissal of the suit. SECTION 12.7 Extension, Rearrangement or Renewal of Secured Obligations. It is
expressly agreed that any of the Secured Obligations at any time secured hereby may be from time to
SECTION 12.6 Notices. Any notice required or permitted to be given hereunder by one time extended for any period, rearranged, or renewed, and that any part of the security herein
party to another shall be in writing and shall be given, except where a particular method is otherwise described, or any other security for the Secured Obligations may be waived or released without in
specified in this Mortgage, using one or more of the following methods: (a) delivered in person to the anywise altering, varying or diminishing the force, effect, or lien of this Mortgage as to unaffected
address set forth below for the party to whom the notice is given; (b) placed in the United States mail property.
with postage prepaid, certified or registered mail return receipt requested, properly addressed to such
party at the address hereinafter specified; (c) transmitted by telegram or by telecopy (with the original SECTION 12.8 Governing Law. Tthe parties hereto agree that this Mortgage shall be
to be sent the same day by nationally recognized overnight delivery service); or (d) deposited into the construed according to the laws of the State.
29 30

SECTION 12.9 Amendments; Waivers. No amendment or waiver of any provision of mineral rights, the Mortgagee shall receive the entire consideration to be paid for such lease or grant
this Mortgage, nor consent to any departure by the Mortgagor therefrom, shall in any event be effective of mineral rights, with the same to be applied upon the Indebtedness hereby secured; provided,
unless the same is consented to in writing by the Mortgagee and is in writing and signed by the however, that the acceptance of such consideration shall in no way impair the lien of this Mortgage on
Mortgagor and the Mortgagee, and is accomplished in accordance with Article 10, and then such the entire Mortgaged Properties and all rights therein, including all mineral rights.
waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. SECTION 12.13 Negation of Partnership. Nothing contained in the Documents is
intended to create any partnership, joint venture, or association between the Mortgagor and the
SECTION 12.10 Assignment. This Mortgage shall be binding upon the Mortgagor and Mortgagee, or in any way make the Mortgagee a co-principal with the Mortgagor with reference to
its successors and assigns and shall inure to the benefit of the Mortgagee and its respective successors, the Mortgaged Properties, and any inferences to the contrary are hereby expressly negated.
transferees, and assigns, and no person other than the Mortgagee and its successors, transferees, and
assigns shall under any circumstances be deemed to be a beneficiary of any provision of this Mortgage. SECTION 12.14 Submission to Jurisdiction. Without limiting the right of the Mortgagee
Without limiting the generality of the foregoing, the Mortgagee may assign, grant a security interest to bring any action or proceeding against the undersigned or its property arising out of or relating to
in, or otherwise transfer this Mortgage to any other person or entity, and such other person or entity the Secured Obligations (an “Action”) in the courts of other jurisdictions, the Mortgagor hereby
shall thereupon become vested with all the benefits in respect thereof granted to the Mortgagee herein irrevocably submits to the jurisdiction of an Oklahoma court in Oklahoma County or any federal court
or otherwise. The Mortgagor agrees that the assignments made of this Mortgage shall not subject the sitting in the Western District of Oklahoma, and the Mortgagor hereby irrevocably agrees that any
Mortgagee to or transfer or pass or in any way affect or modify any obligation of the Mortgagor under Action may be heard and determined in such Oklahoma state court or in such federal court.
the Loan Agreement, the Bonds, or this Mortgage, it being understood and agreed that all such
obligations of the Mortgagor shall be and remain enforceable only against the Mortgagor. SECTION 12.15 Business or Commercial Purpose. The Mortgagor warrants that the
extension of credit evidenced by the Bonds secured hereby is solely for business or commercial
SECTION 12.11 Further Acts. The Mortgagor shall do and perform all acts necessary to purposes, other than agricultural purposes
keep valid and effective the charges and lien hereof, to carry into effect its objective and purposes, and
to protect (a) the position of the lawful Holders of the Bonds and (b) the other Secured Obligations. SECTION 12.16 Trustee. The Mortgagee is acting in its capacity as Trustee under the
Promptly upon request by the Mortgagee and at the Mortgagor’s expense, the Mortgagor shall execute, Indenture. In the event any provision of this Mortgage requires the approval, consent, or action by the
acknowledge, and deliver to the Mortgagee such other and further instruments and do such other acts Mortgagee, the Mortgagee must undertake to grant or deny such approval or consent, or perform such
as in the reasonable opinion of the Mortgagee that may be necessary or appropriate to (i) grant to the action, only subject to and as directed by the terms of the Indenture, and may, in the Mortgagee’s sole
Mortgagee the highest available perfected lien on all of the Mortgaged Properties; (ii) grant to the discretion, require direction of the Controlling Owners prior to undertaking any such approval,
Mortgagee, to the fullest extent permitted by applicable law, the right to foreclose on the Mortgaged consent, or action.
Properties nonjudicially; (iii) correct any defect, error, or omission which may be discovered in the
contents of this instrument or any other Document; (iv) identify more fully and subject to the liens, THE LOAN AGREEMENT, THIS MORTGAGE, THE BONDS AND THE INDENTURE, TOGETHER
encumbrances, and security interests and assignments created hereby any property intended by the WITH THE OTHER DOCUMENTS AND INSTRUMENTS CREATING, EVIDENCING, AND SECURING THE
terms hereof to be covered hereby (including, without limitation, any renewals, additions, SECURED OBLIGATIONS, REPRESENT THE FINAL AGREEMENT OF THE PARTIES HERETO AND THERETO
substitutions, replacements, or appurtenances to the Mortgaged Properties); (v) assure the first priority AND MAY NOT BE CONTRADICTED BY EVIDENCE OR ORAL AGREEMENTS OF SUCH PARTIES, WHETHER
hereof and thereof, subject however to Permitted Encumbrances; and (vi) otherwise effect the intent MADE BEFORE, ON OR AFTER THE DATE OF THIS MORTGAGE. THERE ARE NO UNWRITTEN ORAL
of this Mortgage. Without limiting the generality of the foregoing, the Mortgagor shall promptly and, AGREEMENTS BETWEEN SUCH PARTIES.
insofar as not contrary to applicable law, at the Mortgagor’s own expense, record, rerecord, file, and
refile in such offices, as such times and as often as may be necessary, this instrument, additional A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF
mortgages and deeds of trust, and every other instrument in addition or supplemental hereto, including SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY
applicable financing statements, as may be necessary to create, perfect, maintain, and preserve the AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
liens, encumbrances, and security interests intended to be created hereby and the rights and remedies DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.
of the Mortgagee hereunder. Upon request by the Mortgagee, the Mortgagor shall supply evidence of
fulfillment of each of the covenants herein contained concerning which a request for such evidence
has been made. [The remainder of this page intentionally left blank]

SECTION 12.12 Mineral Interests. The Mortgagor agrees that the making of any oil, gas
or mineral lease or the sale or conveyance of any mineral interest or right to explore for minerals under,
through or upon the Mortgaged Properties would impair the value of the Mortgaged Properties as
security for payment of the Indebtedness and that the Mortgagor shall have no right, power or authority
to lease the Mortgaged Properties, or any part thereof, for oil, gas or other mineral purposes, or to
grant, assign or convey any mineral interest of any nature, or the right to explore for oil, gas and other
minerals, without first obtaining from the Mortgagee express written permission, which permission
shall not be valid until recorded. Whether or not the Mortgagee shall consent to such lease or grant of
31 32

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

ADDRESS OF MORTGAGOR: MORTGAGOR: Legal Description of the Land

6370 Lyndon B. Johnson Freeway LEADING LIFE SENIOR LIVING, INC. Property Description
Suite 276 a Texas non-profit corporation
Dallas, TX 75240 Lot 1, Block 1, Autumn Leaves, an addition to the City of Edmond, Oklahoma County, State of
Oklahoma, according to the plat thereof recorded in Book 71 Plats, Page 77.

By:
Name:
Title:

THE STATE OF TEXAS §

§
COUNTY OF DALLAS §

This instrument was acknowledged before me this ____ day of __________________, 2017, by
__________________________, as _________________________ of Leading Life Senior Living, Inc., a
Texas non-profit corporation.

(SEAL)

Notary Public in and for the State of Texas

(Printed Name of Notary)

My commission expires:

S-1 A-1

EXHIBIT B

Liens and Other Encumbrances

1. Fees, taxes and assessments made by any taxing authority for the year 2018 which are not
yet ascertainable, due or payable, and all subsequent years.

2. All interest in and to all water, oil, gas, coal, asphalt, metallic ores or other minerals in and
underlying the land, together with all rights, privileges, and estates relating thereto.

3. Rights of parties in possession as residential tenants only.

4. Temporary Permit to Take and Use Ground Water in favor of the City of Edmond recorded
in Book 4414, Page 1101.

5. Ten (10) foot easement as set out in Right of Way Agreement in favor of Oklahoma Natural
Gas Company, a division of ONEOK Inc., a Delaware corporation, recorded in Book 6165,
Page 2134, as assigned to ONE Gas, Inc., an Oklahoma corporation, by Assignment and
Assumption of Real Property Interests recorded in Book 12813, Page 1408, as shown on
that certain survey prepared by Darin L. Raibourn, Professional Land Surveyor No. 1637,
of Smith Roberts Baldischwiler, LLC, dated October 26, 2017, last revised ______, 2017
(the “Survey”).

6. Ten (10) foot easement as set out in Right of Way Agreement in favor of Oklahoma Natural [THIS PAGE INTENTIONALLY LEFT BLANK]
Gas Company, a division of ONEOK Inc., a Delaware corporation, recorded in Book 6165,
Page 2135, as assigned to ONE Gas, Inc., an Oklahoma corporation, by Assignment and
Assumption of Real Property Interests recorded in Book 12813, Page 1408, as shown on
the Survey.

7. Ten (10) foot perpetual drainage easement as set out in Storm Water Drainage Easement
and Temporary Construction Easement Agreement executed by and between Contempra
Holdings, L.L.C., an Oklahoma limited liability company, and Edmond Memory Care,
LLC, a Delaware limited liability company, recorded in Book 12252, Page 224, as shown
on the Survey.

8. Easements and building setback lines as shown on plat of Autumn Leaves, an addition to
the City of Edmond, Oklahoma County, Oklahoma, recorded in Book 71 Plats, Page 77, as
shown on the Survey.

B-1

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 TABLE OF CONTENTS

RECORDING REQUESTED BY AND Page

WHEN RECORDED MAIL TO:
ARTICLE I
Ted Brizzolara
McCall, Parkhurst & Horton L.L.P. DEFINITIONS 
717 North Harwood, 9th Floor
Dallas, Texas 75201 SECTION 1.1 Definitions ................................................................................................................... 5 
ARTICLE II

RULES OF CONSTRUCTION 
SECTION 2.1 Rules of Construction .................................................................................................. 9 
SECTION 2.2 Recitals Incorporated Herein by Reference ................................................................. 9 
ARTICLE III

MORTGAGE WITH POWER OF SALE AND SECURITY AGREEMENT TITLE; FUTURE ADVANCEMENTS 
SECTION 3.1 Mortgagor’s Representations and Covenants Regarding Title .................................... 9 
SECTION 3.2 Future Advancements ................................................................................................ 10 
dated as of December 1, 2017
ARTICLE IV

by and between ASSIGNMENT OF RENTS 

SECTION 4.1 Assignment ................................................................................................................ 10 
LEADING LIFE SENIOR LIVING, INC., SECTION 4.2 Limited License ......................................................................................................... 10 
as Mortgagor
SECTION 4.3 Affirmative Covenants .............................................................................................. 11 
SECTION 4.4 Negative Covenants................................................................................................... 11 
and
SECTION 4.5 Appointment of Attorney-in Fact .............................................................................. 12 
SECTION 4.6 Default ....................................................................................................................... 12 
UMB BANK, N.A.,
as Mortgagee SECTION 4.7 No Obligation of Mortgagee ..................................................................................... 13 
SECTION 4.8 No Waiver of Mortgagee’s Rights ............................................................................ 13 
SECTION 4.9 Warranties Concerning Leases and Rents ................................................................. 13 
SECTION 4.10 Termination of Assignment of Leases....................................................................... 14 

A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SECTION 4.11 Right to Enforce the Leases....................................................................................... 14 
SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY SECTION 4.12 Mortgagee Not Mortgagee-in-Possession ................................................................. 14 
AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON ARTICLE V
DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.
SECURITY AGREEMENT 
SECTION 5.1 Grant of Security Interest .......................................................................................... 15 
SECTION 5.2 Debtor’s Covenants ................................................................................................... 15 
SECTION 5.3 Debtor’s Warranties and Representations ................................................................. 16 

TABLE OF CONTENTS TABLE OF CONTENTS

(continued) (continued)

Page Page

ARTICLE VI ARTICLE XI

CERTAIN COVENANTS AND WARRANTIES OF THE MORTGAGOR  ENVIRONMENTAL AND LAND USE MATTERS 
SECTION 6.1 Covenants and Warranties of the Mortgagor............................................................. 17  SECTION 11.1 Environmental Representations, Warranties and Covenants..................................... 26 
SECTION 6.2 Status of Project ........................................................................................................ 17  SECTION 11.2 Notices; Proceedings ................................................................................................. 27 
SECTION 6.3 Defense of Title and Litigation ................................................................................. 18  SECTION 11.3 Site Assessments ....................................................................................................... 27 
SECTION 6.4 Compliance with Laws .............................................................................................. 18  SECTION 11.4 Rights of the Mortgagee ............................................................................................ 28 
SECTION 6.5 Indemnification ......................................................................................................... 20  ARTICLE XII
SECTION 6.6 Certificate .................................................................................................................. 22 
MISCELLANEOUS 
ARTICLE VII
SECTION 12.1 Severability................................................................................................................ 28 
DEFAULTS  SECTION 12.2 Captions and Titles .................................................................................................... 28 
SECTION 7.1 Event of Default ........................................................................................................ 22  SECTION 12.3 Usury Savings Clause................................................................................................ 28 
SECTION 7.2 Remedies ................................................................................................................... 23  SECTION 12.4 Additional Security ................................................................................................... 29 
SECTION 7.3 Remedies Cumulative................................................................................................ 23  SECTION 12.5 Suit Not an Election of Remedies ............................................................................. 29 
SECTION 7.4 No Waiver ................................................................................................................. 23  SECTION 12.6 Notices ....................................................................................................................... 29 
SECTION 7.5 Expenses of Collection. ........................................................................................... 24  SECTION 12.7 Extension, Rearrangement or Renewal of Secured Obligations................................ 30 
ARTICLE VIII SECTION 12.8 Governing Law .......................................................................................................... 30 
SECTION 12.9 Amendments; Waivers .............................................................................................. 30 
CERTAIN REMEDIES 
SECTION 12.10 Assignment ................................................................................................................ 30 
SECTION 8.1 Application of Proceeds ............................................................................................ 24 
SECTION 12.11 Further Acts ............................................................................................................... 31 
SECTION 8.2 Remedies Not Exclusive ........................................................................................... 24 
SECTION 12.12 Mineral Interests ........................................................................................................ 31 
SECTION 8.3 Waivers...................................................................................................................... 24 
SECTION 12.13 Negation of Partnership ............................................................................................. 31 
SECTION 8.4 Sale in Parcels. .......................................................................................................... 25 
SECTION 12.14 Submission to Jurisdiction......................................................................................... 31 
SECTION 8.5 Bankruptcy.. .............................................................................................................. 25 
SECTION 12.15 Business or Commercial Purpose .............................................................................. 32 
ARTICLE IX
EXHIBITS:
CONDEMNATION AND CASUALTY LOSS  Exhibit A – Legal Description of the Land A-1
SECTION 9.1 Condemnation ........................................................................................................... 25  Exhibit B – Liens and Other Encumbrances B-1
SECTION 9.2 Casualty ..................................................................................................................... 25 
ARTICLE X

AMENDMENTS OF AND SUPPLEMENTS TO THIS

MORTGAGE AND OTHER DOCUMENTS 
SECTION 10.1 Amendments and Supplements with Consent; Limitations....................................... 26 

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 CONVEY and MORTGAGE unto the Mortgagee and to its successors and assigns, the following property,
MORTGAGE WITH POWER OF SALE AND SECURITY AGREEMENT whether now or hereafter owned, leased and/or acquired by the Grantor to wit (collectively, the “Mortgaged
Properties”):

PREAMBLE (a) subject to the Permitted Encumbrances, that certain real property (the “Land”)
being situated in the City of Oklahoma City, County of Cleveland, State of Oklahoma, being more
This Mortgage with Power of Sale and Security Agreement is made as of December 1, 2017 fully described as set forth in Exhibit A attached hereto and hereby referred to and incorporated
(hereinafter called this “Mortgage”) by and between LEADING LIFE SENIOR LIVING, INC., a Texas herein for all purposes, together with all right, title and interest of the Mortgagor, including any
non-profit corporation exempt from federal income taxes under Internal Revenue Code Section 501(c)(3), after-acquired right, title or reversion, in and to (i) the beds of the ways, streets, avenues and alleys
having a mailing address of 6370 LBJ Freeway, Suite 276, Dallas, Texas 75240 (Attn: Robert Mosteller, adjoining the Land, (ii) any strips or gores between the Land and abutting or adjacent properties,
Chairman) (the “Mortgagor”), and UMB BANK, N.A., a national banking association organized and and (iii) all water and water rights, timber, crops and mineral interest pertaining to the Land, and
existing under the laws of the United States of America, as trustee (the “Trustee”) under the Indenture all Improvements (hereinafter defined).
(hereinafter defined) having a mailing address of 5910 N Central Expressway, Suite 1900, Dallas, Texas
75206 (Attn: Israel Lugo) (as more particularly defined herein, the “Mortgagee”) (who shall be included (b) furniture, furnishings, fixtures, equipment and other goods necessary for or used
within the term “assignee” and “Secured Party” as used hereinafter), and any successor trustee appointed in connection with the use (or proposed use) of the Project (hereinafter defined) and/or the
pursuant to the Trust Indenture dated as of December 1, 2017 (together with all Supplements (hereinafter Improvements, and all appurtenances and Additions (hereinafter defined) thereto and betterments,
defined) thereto, the “Indenture”) between the Mortgagee and The Oklahoma Development Finance renewals, substitutions and replacements thereof, all of the foregoing as now owned or hereafter
Authority, a public trust of the State of Oklahoma, and any successor body to the duties or functions thereof acquired by the Mortgagor, wherever situated, and now or hereafter located on, attached to,
(the “Issuer”). contained in, or used or usable in connection with the Project and/or the Improvements or placed
on any part thereof, though not attached thereto, including all screens, awnings, shades, blinds,
WITNESSETH: curtains, draperies, carpets, rugs, furniture and furnishings, heating, electrical, lighting, plumbing,
ventilating, air-conditioning, refrigerating, incinerating and/or compacting plants, systems, fixtures
WHEREAS, the Issuer, at the request of the Mortgagor, desires to finance the costs of the Project and equipment, elevators, hoists, stoves, ranges, vacuum and other cleaning systems, call systems,
(hereinafter defined) through the issuance of bonds by the Issuer; and sprinkler systems and other fire prevention and extinguishing apparatus, and materials, motors,
machinery, pipes, ducts, conduits, dynamos, engines, compressors, generators, boilers, stokers,
WHEREAS, pursuant to and in accordance with the Act (hereinafter defined), the Issuer has furnaces, pumps, tanks, appliances, equipment, fittings, and fixtures, lockers, exercise and fitness
determined to issue and sell its (a) Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – equipment, scales, duplication and communication equipment, calculators, cash registers, tables,
Autumn Leaves Project) Series 2017A-1, (b) Senior Living Revenue Bonds (Leading Life Senior Living, chairs, pianos, satellite dishes, televisions, telephones, maid carts, all kitchen equipment (including
Inc. – Autumn Leaves Project) Taxable Series 2017A-2, and (c) Senior Living Revenue Bonds (Leading kitchen utensils, china ware and glassware) towels, drapes, miniblinds, linens, bedspreads, pillows,
Life Senior Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B in the combined aggregate robes, and all building materials and equipment now or hereafter delivered to the Project and
principal amount of $30,275,000.00 (collectively, the “Series 2017 Bonds” and, together with any intended to be installed therein; excluding however, all personal property owned by lessees or
Additional Bonds that may be issued under the Indenture, the “Bonds”). The net proceeds of the sale of vendors and intangibles owned by third parties. The Mortgagor shall have the right to replace worn
the Series 2017 Bonds shall be loaned to the Mortgagor by the Issuer pursuant to the terms of the Series or obsolete items of personal property (including items that have become fixtures) in accordance
2017 Notes (hereinafter defined) and the Loan Agreement (hereinafter defined) dated as of even date with the Loan Agreement.
herewith among the Issuer, the Mortgagee and the Mortgagor and shall be used to finance the cost of the
acquisition of the Project, to fund certain capital expenditures and startup costs related to the Project, to (c) Leases (hereinafter defined), the Rents (hereinafter defined), and all rents,
fund debt service reserve funds, and to pay a portion of the costs of issuing such Series 2017 Bonds; and revenues, profits, income, damages, awards, and proceeds from or attributable to all or any portion
of the Land hereinabove described, the Improvements, and any other property, both real and
WHEREAS, the Mortgagor will derive substantial direct and indirect benefits from the Series 2017 personal, hereinabove described.
Notes and the other Secured Obligations (hereinafter defined) and desires to secure its obligations to the
Mortgagee by granting the Mortgagee a mortgage and lien on certain property of the Mortgagor pursuant (d) money, funds, and accounts of the Mortgagor, deposits (including lessee security
to this Mortgage; and deposits), instruments, documents, general intangibles, notes, and chattel paper arising from or by
virtue of any transaction related to the Project, the Improvements, or any of the Personal Property
WHEREAS, the Mortgagor has executed this Mortgage to provide security for the performance (hereinafter defined), subject to Section 4.1, prior to distribution of any of the foregoing to the
by the Mortgagor of all of the Secured Obligations, including without limitation the Secured Obligation to Mortgagor and except for balances in accounts that are subject to draw by the Mortgagor for
pay amounts necessary to make the debt service payments on the Bonds. approved draws under the Loan Agreement or the Mortgagee under the Indenture and amounts
allocated to ordinary expenses for payment by any manager of the Project.
NOW, THEREFORE, to secure to the Mortgagee the payment of the Secured Obligations and
any agreement, document, certificate or instrument executed in connection therewith, with interest thereon, (e) appurtenances and additions to the items of tangible personal property described
the payment of all other moneys secured hereby or advanced hereunder and the performance of the herein and betterments, renewals, substitutions, and replacements thereof and therefor; and, if the
covenants and agreements herein contained, the Mortgagor does hereby GRANT, BARGAIN, SELL, lien and security interest granted by this Mortgage is subject to any security interest in said personal
1 2

property, all right, title, and interest of the Mortgagor as the Mortgagor, now or hereafter arising, management contract, service contract, warranty and computer software related to the Project, or
in and to any and all said property is hereby assigned to the Mortgagee, together with the benefits other agreement with any third party pertaining to the ownership, development, construction,
of all deposits and payments now or hereafter made thereon by or on behalf of the Mortgagor; operation, maintenance, marketing, sale, or use of the Land and/or the Improvements.
excluding, however, all personal property owned by tenants of the Improvements.
(n) proceeds arising from or by virtue of the sale, lease or other disposition of the
(f) other articles of personal property, tangible or intangible (together with those items Land, the Improvements or the Personal Property.
described in subsections (b), (e), and (g), collectively, the “Personal Property”) now or hereafter
attached to or used in or about the Improvements or that are necessary or useful for the complete (o) Net Proceeds (hereinafter defined) (including premium refunds) of each policy of
and comfortable use and occupancy of the Improvements for the purposes for which they are to be insurance relating to the Land, the Improvements or the Personal Property.
attached, placed, erected, constructed or developed, or which Personal Property is or may be used
in or related to the planning, development, financing or operation of the Improvements, and all (p) Net Proceeds from the taking of any of the Land, the Improvements, the Personal
renewals of or replacements or substitutions for any of the foregoing, whether or not the same are Property or any rights appurtenant thereto by right of eminent domain or by private or other
or shall be attached to the Land or the Improvements. purchase in lieu thereof, including change of grade of streets, curb cuts or other rights of access,
for any public or quasi-public use under any law.
(g) building materials and equipment now or hereafter delivered to and intended to be
installed in or on the Land or the Improvements. (q) right, title and interest of the Mortgagor in and to all streets, roads, public places,
easements and rights-of-way, existing or proposed, public or private, adjacent to or used in
(h) right, title and interest of the Mortgagor in and to contracts now or hereafter entered connection with, belonging or pertaining to the Land.
into by and between the Mortgagor and any other party, as well as all right, title and interest of the
Mortgagor under any subcontracts, providing for the construction (original, restorative or (r) rights, hereditaments and appurtenances pertaining to the foregoing.
otherwise) of any improvements to or on any of the Land or the furnishing of any materials,
supplies, equipment or labor in connection with such construction. (s) interests of every kind and character that the Mortgagor now has or at any time
hereafter acquires in and to the Land, Improvements, and Personal Property described herein and
(i) right, title and interest of the Mortgagor in and to all plans, specifications and all property that is used or useful in connection therewith, including rights of ingress and egress
drawings of the Improvements (including, but not limited to, plat plans, foundation plans, floor and all reversionary rights or interests of the Mortgagor with respect to such property.
plans, elevations, framing plans, cross-section of walls, mechanical plans, electrical plans and
architectural and engineering plans, and architectural engineering studies and analysis) heretofore TO HAVE AND TO HOLD the Mortgaged Properties with all the rights, improvements and
or hereafter prepared by any architect or any engineer, relating to any of the Land. appurtenances thereunto belonging, or in anywise appertaining unto the Mortgagee, its successors and
assigns, forever. The Mortgagor covenants that the Mortgagor is seized of an indefeasible estate in fee
(j) right, title and interest of the Mortgagor in and to all agreements now or hereafter simple in the Mortgaged Properties, that the Mortgagor has a good right to sell, convey and mortgage the
entered into and with any party, including any assigned obligations, relating to architectural, same, that the Mortgaged Properties are free and clear of all general and special taxes, liens, charges and
engineering, management, development or consulting services rendered or to be rendered relating encumbrances of every kind and character, and that the Mortgagor hereby warrants and will forever defend
to planning, design, inspection or supervision of the construction management or development of the title thereto against the claims of all persons whomsoever, subject only to Permitted Encumbrances
any of the Land. (hereinafter defined).

(k) completion bond, performance bond or labor and material payment bond or other PROVIDED, HOWEVER, that if the Mortgagor pays the Secured Obligations (including payment
bond relating to the Land or the Project or to any contract providing for construction of of all principal and all interest and attorneys’ fees and other amounts, if any, owing or to become owing
Improvements to the Land or the Project. thereon) when the same shall become due or make provision for such payment such that there are no
Secured Obligations that are outstanding and shall in all things do and perform all other acts and agreements
(l) the Mortgagor’s right, title and interest in and to (but not its obligations) under any herein contained to be done, then, in that event only, this Mortgage shall be and become null and void;
contracts relating to the Land, the Improvements, or the Personal Property. however, the Secured Obligation to indemnify and hold harmless the Mortgagee, the Trustee, the Holders,
and their respective officers, directors, employees, agents, and attorneys pursuant to the provisions hereof
(m) right, title, and interest of the Mortgagor in and to all contracts, approvals, utility shall survive any such payment.
deposits, utility capacity, and utility rights issued, granted agreed upon, or otherwise provided by
any governmental or private authority, person or entity relating to the ownership, development, Notwithstanding anything herein to the contrary, this Mortgage is executed and delivered by the
construction, operation, maintenance, marketing, sale or use of the Land and/or the Improvements, Mortgagor to secure the payment and performance of the Secured Obligations; however, the Secured
including all of the Mortgagor’s rights and privileges hereto or hereafter otherwise arising in Obligations shall not include and there is expressly excepted therefrom any items of indebtedness owing or
connection with or pertaining to the Land and/or the Improvements, including, without limiting the to become owing to the Mortgagee for which applicable law prohibits the taking of a lien upon real estate
generality of the foregoing, all water and/or sewer capacity, all water, sewer and/or other utility as security. Each and every item of the Secured Obligations, including any and all renewals, rearrangements
deposits or prepaid fees, and/or all water and/or sewer and/or other utility tap rights or other utility and extensions of all or any part of the Indebtedness described and included in this paragraph is intended
rights, any right or privilege of the Mortgagor under any loan commitment, lease, contract,
3 4

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to be fully secured by the liens, assignments, and security interests created under and by virtue of this “Damaged” means (a) damaged, destroyed, or injured (in whole or in part) by fire or other casualty,
Mortgage. or (b) taken by Condemnation.

ARTICLE I “Debtor” has the meaning ascribed to such term in Section 5.1.

DEFINITIONS “Documents” means and includes (without limitation) the Bonds, the Loan Agreement, the Notes,
the Indenture, this Mortgage, and any and all other documents which the Issuer, the Mortgagor, or any other
SECTION 1.1 Definitions. Certain terms used in this Mortgage are defined in this party or parties or their representatives, have executed and delivered, or may hereafter execute and deliver,
Section. When used herein, such terms shall have the respective meanings ascribed to them in this to create, evidence or secure the Secured Obligations, or any part thereof, or in connection therewith,
Section, unless specifically provided otherwise or unless the context clearly indicates otherwise. together with all Supplements thereto.
Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in
the Indenture. “Encumbrance” means any deed of trust, mortgage, pledge, lien, security interest, charge or other
encumbrance, including but not limited to any covenant or agreement restricting, regulating or otherwise
“Act” means Title 60, Oklahoma Statutes 2016, Section 176 et seq., as amended, Title 60 Oklahoma affecting the use of the Land or the Mortgaged Properties.
Statutes 2016, Section 175.1 et seq., as amended, and Title 74 Oklahoma Statutes 2016, Section 5062.1 et
seq., as amended, all as now in effect and as may from time to time hereafter be amended or supplemented. “Event of Default” has the meaning ascribed to such term in Section 7.1.

“Additional Bonds” means the additional bonds authorized to be issued by the Issuer pursuant to “Governmental Authority” means any federal, state or local governmental or quasi-governmental
the terms and conditions of the Indenture. entity having jurisdiction over the Project, including, without limitation, any agency, department,
commission, board, bureau, administration, service, or other instrumentality of any governmental entity.
“Additions” means any and all alterations, additions, accessions and improvements to property,
substitutions therefor, and renewals and replacements thereof. “Hazardous Substance” has the meaning ascribed to such term in Section 11.1(f).

“Agent” means, with respect to any entity, any official, officer, employee or agent of such entity. “Holder” or “Holders” means the Person or Persons in whose name any Bond is registered on the
registration records for the Bonds maintained by the Mortgagee as registrar.
“Applicable Environmental Law” has the meaning ascribed to such term in Section 11.1(b).
“Improvements” means all structures or buildings now or hereafter erected or placed on the Land,
“Applicable Rate” means the respective applicable rates of interest payable by the Issuer under the including without limitation, the Project, and all Additions thereto.
Bonds from time to time.
“Indebtedness” means all sums of money secured by this Mortgage, including
“Bonds” means, collectively, the Series 2017 Bonds and any Additional Bonds.
(a) all money (including all principal, interest, and premiums (if any)) due or to
“CERCLA” has the meaning ascribed to such term in Section 11.1(b). become due under the Loan Agreement or the Notes;

“Closing Date” means the date of initial delivery of the Series 2017 Bonds. (b) all other money now or hereafter advanced or expended by the Mortgagee or the
Issuer as provided for herein or in any other of the Documents, which the Mortgagor is required to
“Collateral” means all of the security for the Loan described in this Mortgage, together with all repay or reimburse hereunder, under any of the other Documents, or by applicable law; and
Proceeds and products thereof and Additions thereto.
(c) all costs, expenses, charges, liabilities, commissions, half-commissions and
“Condemnation” means any taking of title, of use, or of any other property interest under the attorneys’ fees now or hereafter chargeable to the Mortgagor, or incurred by, or disbursed by, the
exercise of the power of eminent domain, by any governmental body or by any person acting under Issuer or the Mortgagee on behalf of the Mortgagor as provided for herein, or in any of the other
governmental authority. Documents, which the Mortgagor is required to pay, repay or reimburse hereunder, under any of
the other Documents, or by applicable law.
“Controlling Holders” means, as of any date, in the case of consent or direction to be given
hereunder, the Holders of the majority in aggregate principal amount of the then Outstanding Senior Bonds; “Indemnified Party” and “Indemnified Parties” have the respective meanings ascribed to such terms
provided if no Senior Bonds are then Outstanding, then the Holders of the majority in aggregate principal in Section 6.5.
amount of the then Outstanding Second Tier Bonds.
“Indenture” means that certain Trust Indenture dated as of December 1, 2017 between the
“Damage” means (a) any damage, destruction or other injury (in whole or in part) by fire or other Mortgagee and Issuer, together with all Supplements thereto.
casualty, and (b) any Condemnation.
“Land” has the meaning ascribed to such term in the Granting Clauses hereof.

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“Law” has the meaning ascribed to such term in Section 11.1(d). “Rents” has the meaning ascribed to such term in Section 4.1(b).

“Leases” has the meaning ascribed to such term in Section 4.1(a). “Second Tier Bonds” means, collectively, the Series 2017B Bonds and all Additional Bonds issued
by the Issuer on a parity with the Series 2017B Bonds.
“License” has the meaning ascribed to such term in Section 4.2.
“Secured Obligations” means the obligations of the Mortgagor under the Notes, the Bonds, the
“Loan Agreement” means the Loan Agreement dated December 1, 2017 executed among the Issuer, Indenture, this Mortgage, the Loan Agreement and the other Documents, to (a) pay amounts necessary to
the Mortgagee and the Mortgagor, together with all Supplements thereto. pay the principal of, premium (if any) and interest on the Bonds, when and as the same shall become due
and payable (whether at the stated maturity thereof, on any installment payment date, or by acceleration of
“Mortgage” means this Mortgage with Power of Sale and Security Agreement, together with all maturity, or after notice of redemption or otherwise), (b) pay all other payments (if any) required by the
Supplements hereto. Bonds, the Indenture, the Loan Agreement, this Mortgage and the other Documents to which it is a party
to be paid by the Mortgagor to the Issuer, the Mortgagee, the Holders or to others, when and as the same
“Mortgaged Properties” has the meaning ascribed to such term in the Granting Clauses hereof. shall become due and payable, (c) timely perform, observe and comply with all of the terms, covenants,
conditions, stipulations and agreements, express or implied, which the Mortgagor is required by the Bonds,
“Mortgagee” means UMB Bank, N.A., a national banking association organized and existing under the Indenture or any of the other Documents to which it is a party, to perform and observe; and (d) reimburse
the laws of the United States of America, acting as trustee under the Indenture, and its successors and the Issuer or the Mortgagee, as the case may be, for any sums advanced thereby as set forth in the Loan
assigns, and includes any successor appointed as trustee pursuant to the Indenture. Agreement and this Mortgage and the other Documents.

“Mortgagor” means Leading Life Senior Living, Inc., a Texas non-profit corporation, and its “Secured Party” has the meaning ascribed to such term in Section 5.1.
successors and assigns.
“Senior Bonds” means, collectively, the Series 2017A Bonds and all Additional Bonds issued by
“Net Proceeds,” when used with respect to any Condemnation awards or insurance proceeds the Issuer on a parity with the Series 2017A Bonds.
allocable to the the Project, means the gross proceeds from Condemnation or insurance remaining after
payment of all expenses (including attorneys’ fees) incurred in the collection of such gross proceeds. “Series 2017 Notes” means, collectively, the Senior Living Promissory Note Series 2017A-1 in the
principal amount of $14,640,000.00, the Senior Living Promissory Note Taxable Series 2017A-2 in the
“Notes” means, collectively, the Series 2017 Notes and any promissory note issued in connection principal amount of $3,240,000.00, and the Senior Living Promissory Note Series 2017B in the principal
with Additional Bonds. amount of $12,395,000.00, each executed by the Mortgagor, payable to the Issuer and assigned by the Issuer
to the Mortgagee pursuant to the Indenture.
“Permitted Encumbrances” has the meaning ascribed to such term in the Indenture, and shall
include, without limitation, the liens and other encumbrances set forth in Exhibit B. “Series 2017A Bonds” means, collectively, the Series 2017A-1 Bonds and the Series 2017A-2
Bonds.
“Personal Property” has the meaning ascribed to such term in the Granting Clauses hereof.
“Series 2017A-1 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
“Pledge” has the meaning ascribed to such term in Section 6.4(i). Living, Inc. – Autumn Leaves Project) Series 2017A-1.
“Proceeds” or “proceeds” means, when used with respect to any of the Collateral, all proceeds “Series 2017A-2 Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
within the meaning of the Uniform Commercial Code and shall include the proceeds of any and all Living, Inc. – Autumn Leaves Project) Taxable Series 2017A-2.
insurance policies.
“Series 2017B Bonds” means the Issuer’s Senior Living Revenue Bonds (Leading Life Senior
“Project” has the meaning ascribed to such term in the Indenture. Living, Inc. – Autumn Leaves Project) Second Tier Series 2017B.
“Project Revenues” has the meaning ascribed to such term in the Indenture. “Site Reviewers” has the meaning ascribed to such term in Section 11.3.
“Property Taxes” means all taxes, payments in lieu of taxes, water rents, sewer rents, ground rents, “Site Assessments” has the meaning ascribed to such term in Section 11.3.
assessments and other governmental or municipal or public or private dues, charges and levies and any
liens (including federal tax liens) which are or may be levied, imposed or assessed upon the Project or any “State” means the State of Oklahoma.
part thereof or any of the other Collateral, or upon any Leases, or upon the rents, issues, income or profits
thereof, whether any or all of the aforementioned be levied directly or indirectly or as excise taxes, as “Supplements” means any and all extensions, renewals, modifications, amendments, supplements
income taxes, or otherwise. and substitutions.

“RCRA” has the meaning ascribed to such term in Section 11.1(b).

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 “Taxes” means all taxes, assessments and governmental charges or levies imposed upon the replacements, modifications, rearrangements, consolidations or extensions of the Secured Obligations
applicable Person or on its income or its properties, including, without limitation, all Property Taxes. or other Indebtedness.

“Uniform Commercial Code” means the Uniform Commercial Code—Secured Transactions (Title ARTICLE IV
12A, Oklahoma Statutes 2001, Section 9), as amended.
ASSIGNMENT OF RENTS
ARTICLE II
SECTION 4.1 Assignment. The Mortgagor does hereby GRANT, TRANSFER,
RULES OF CONSTRUCTION ASSIGN and SET OVER unto the Mortgagee, its successors and assigns, the following:

SECTION 2.1 Rules of Construction. The words “hereof,” “herein,” “hereunder,” (a) all rights, interests and estates of the Mortgagor in, to and under, but none of its
“hereto,” and other words of similar import refer to this Mortgage in its entirety. obligations, responsibilities, or liabilities related to, any leases, now or hereafter made, executed or
delivered, whether written or oral, covering all or any portion of the Land, or the Improvements
(a) “Including” means “including, but not limited to.” now or hereafter erected or constructed thereon, or any other portion of the Mortgaged Properties,
together with all renewals, extensions, modifications and replacements thereof (such lease
(b) References to Articles, Sections, and other subdivisions of this Mortgage are to the agreements, renewals, extensions, modifications and replacements thereof being herein collectively
designated Articles, Sections and other subdivisions of this Mortgage as originally executed. called the “Leases”);

(c) All references made (i) in the neuter, masculine or feminine gender shall be (b) all rents, rentals, security deposits, royalties, bonuses, issues, profits, revenue,
deemed to have been made in all such genders, and (ii) in the singular or plural number shall be income, and other sums of money or benefits that may now or hereafter be derived from the
deemed to have been made, respectively, in the plural or singular number as well. Mortgaged Properties, but none of its obligations, responsibilities, or liabilities related to, or arising
from the use or enjoyment of any portion thereof, or from any lease pertaining thereto, including
(d) Wherever used in this Mortgage, unless the context clearly indicates a contrary but not limited to, liquidated damages arising from any default under a lease, amounts that may be
intent or unless otherwise specifically provided herein, the word “Mortgagor” shall mean collected from any guarantor of a lease, any proceeds payable under any insurance policy covering
“Mortgagor and/or any subsequent owner or owners of the Mortgaged Properties” and the word loss of rents, and any and all rights that the Mortgagor may have against any lessee, guarantor or
“Mortgagee” shall mean “Mortgagee or any subsequent holder or holders of this Mortgage”. sublessee under such Leases (herein collectively called the “Rents”); and

SECTION 2.2 Recitals Incorporated Herein by Reference. The Mortgagor (c) all other Project Revenues arising from or by virtue of any transaction related to
acknowledges that the Recitals contained hereinabove are true and correct and agrees that the same the Project and not included in (a) and (b) above.
are incorporated herein as a substantive part of this Mortgage.
The parties intend to establish an absolute transfer and assignment of all the rights, title, and interest
ARTICLE III of the Mortgagor in and to, but none of its obligations, responsibilities or liabilities relating to the Leases
and the Rents to the Mortgagee and not just to create a security interest.
TITLE; FUTURE ADVANCEMENTS
SECTION 4.2 Limited License. Although this assignment constitutes an absolute,
SECTION 3.1 Mortgagor’s Representations and Covenants Regarding Title. Without present and current assignment of all Leases and Rents, so long as there exists no Event of Default
in any way limiting the conveyance and the warranty herein contained, the Mortgagor represents itself hereunder, the Mortgagor shall have the right under a limited license granted hereby, and the
to be the owner of all the Mortgaged Properties as hereinabove conveyed and, should any ambiguity Mortgagee hereby grants to the Mortgagor a limited license (the “License”) to collect (but not more
exist in regard to the description of said properties, reference may be had to the Mortgagor’s ownership than one month in advance or two months in advance where one month’s rental is attributable to the
of properties held by it in the survey(s), subdivision(s) or section(s) described in Exhibit A attached next ensuing month and one month’s rental is attributable to the last month in the lease term, if any,
hereto and made a part hereof for further description of the properties herein conveyed, the Mortgagor and is collected as security under the provisions of a written lease or rental agreement) all of the Rents
agrees that it will execute any further instruments, amendments, or supplements desired to more arising from or out of the Leases or any renewals or extensions thereof, or from or out of the Mortgaged
adequately describe the Mortgaged Properties which it has agreed to make subject to this Mortgage. Properties or any part thereof. The Mortgagor shall receive such Rents and hold them in trust and as
a trust fund to be applied, and the Mortgagor hereby covenants to apply the Rents so collected in
SECTION 3.2 Future Advancements. This Mortgage shall secure the payment of the accordance with the Loan Agreement and the Indenture. The License shall be revoked automatically
Secured Obligations, including any and all Additional Bonds and other advancements made by the upon the occurrence of an Event of Default hereunder or under any of the documents evidencing or
Mortgagee thereunder, and any and all additional Indebtedness of the Mortgagor required under to be securing the Secured Obligations, but to the extent the Mortgagor continues to collect the Rents after
paid by the Mortgagor to the Issuer, the Mortgagee, the Holders or to others under and pursuant to the an Event of Default, the Mortgagor shall continue to hold the Rents in trust for the benefit of the
Documents, whether or not incurred or becoming payable under the provisions hereof and whether as Mortgagee. Upon the occurrence and continuation of an Event of Default, the Mortgagor shall cause
future advancements or otherwise, together with any renewals, amendments, restatements, the tenants under the Leases to pay Rents by check payable to the order of the Mortgagee or a name
designated by the Mortgagee. Any such payment to the Mortgagee shall constitute payment to the
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Mortgagor under the Leases, and the Mortgagor hereby appoints the Mortgagee as the Mortgagor’s (e) cancel, terminate or modify any Lease, except upon default by the tenant
lawful attorney-in-fact, coupled with an interest, for giving, and is hereby empowered to give, thereunder; cause or permit any cancellation, termination or surrender of any Lease, except in
acquittances to any tenants for such payments and to give the Mortgagor’s endorsement to any check connection with a termination, cancellation or similar right under a Lease; or commence any
made payable to the Mortgagor. proceedings for dispossession of any tenant under any Lease, except upon default by the Tenant
thereunder or otherwise in accordance with the terms of any Lease.
SECTION 4.3 Affirmative Covenants. The Mortgagor shall, at the sole cost and
expense of the Mortgagor: SECTION 4.5 Appointment of Attorney-in Fact. Subject to the License as described
and limited in Section 4.2, the Mortgagor hereby constitutes and appoints the Mortgagee the true and
(a) duly and punctually observe, perform and discharge, all of the material obligations, lawful attorney-in-fact, coupled with an interest, of the Mortgagor, empowered and authorized in the
terms, covenants, conditions and warranties of the lessor under the Leases; and name, place and stead of the Mortgagor to demand, sue for, attach, levy, recover and receive the Rents,
or any premium or penalty payable upon the exercise by any lessee under any Leases of a privilege of
(b) give prompt notice to the Mortgagee of any failure on the part of the Mortgagor to cancellation originally provided in any such Leases, and to give proper receipts, releases, and
observe, perform and discharge the same or of any claim made by any lessee of any such failure by acquittances therefor and, after deducting expenses of collection, to apply the net proceeds as a credit
the Mortgagor, but only to the extent that such failure, or alleged failure is a material obligation of upon any portion of the Secured Obligations selected by the Mortgagee, notwithstanding the fact that
the Mortgagor under the Leases; and such portion of the Secured Obligations may not then be due and payable or that such portion of the
Secured Obligations is otherwise adequately secured; and the Mortgagor does hereby authorize and
(c) enforce in accordance with sound commercial practices the Leases, or secure the direct any such lessee to deliver such payment to the Mortgagee, in accordance with this assignment,
performance of each and every obligation, term, covenant, condition and agreement in the Leases and the Mortgagor hereby ratifies and confirms all that its said attorney-in-fact shall do or cause to be
to be performed by any lessee or any guarantor; and done by virtue of the powers granted hereby. The foregoing appointment is irrevocable and continuing
and such rights, powers and privileges shall be exclusive in the Mortgagee, its successors and assigns,
(d) use its best efforts to keep the Project leased at a sufficient rental and on other so long as any part of the Secured Obligations secured hereby remains unpaid and undischarged. A
terms and conditions reasonably acceptable to the Mortgagee; and lessee need not inquire into the authority of the Mortgagee to collect any Rents, and its obligations to
pay Rents to the Mortgagor shall be absolutely discharged to the extent of any payment to the
(e) at the request of the Mortgagee, execute a written instrument evidencing that the Mortgagee. Subject to the License, the Mortgagor hereby constitutes and appoints the Mortgagee the
rights, title, and interest of the Mortgagor in and to, but none of its obligations, responsibilities or true and lawful attorney-in-fact, coupled with an interest, of the Mortgagor, empowered and authorized
liabilities relating to such future Leases have been transferred and assigned to the Mortgagee in in the name and stead of the Mortgagor to subject and subordinate at any time any Leases or any part
accordance with the terms and conditions as herein contained; and thereof to the lien and security interest of this Mortgage and the Loan Agreement, or to request or
require such subordination in any case where the Mortgagor otherwise would have the right, power or
(f) make, execute and deliver to the Mortgagee upon demand and at any time or times, privilege so to do, and to cause some or all of the provisions of any Leases that are subordinate to the
any and all assignments and other documents and other instruments which the Mortgagee may lien and security interest of this Mortgage to become superior to this Mortgage and the Loan
deem advisable to carry out the true purposes and intent of this assignment. Agreement. The foregoing appointment is irrevocable and continuing and such rights, powers and
privileges shall be exclusive in the Mortgagee, its successors and assigns, so long as any Secured
SECTION 4.4 Negative Covenants. The Mortgagor shall not without Mortgagee’s Obligations secured hereby remain unpaid and discharged, and the Mortgagor hereby warrants that
prior written consent, except in compliance with the Indenture, the Loan Agreement or the Leases, the Mortgagor has not at any time prior to the date hereof exercised any such right, and the Mortgagor
and except as noted below and in the ordinary course of business: hereby covenants not to exercise any such right, to subordinate any such Leases to the lien of this
Mortgage, the Loan Agreement, or to any other mortgage, deed of trust or security agreement or to
(a) execute a Lease for a term greater than 364 days (excluding renewal options); or any ground lease.
(b) consent to any subletting of Mortgaged Properties or any part thereof, to any SECTION 4.6 Default. If there shall have occurred and be continuing an Event of
assignment of any Leases by any lessee thereunder, to any assignment or further subletting of any Default, then the Mortgagee may, at its option, but subject to the prior written consent of the
sublease; or Controlling Holders, and shall at the written direction of the Controlling Holders, without notice and
without regard to the adequacy of security for the Secured Obligations hereby secured, terminate the
(c) receive or collect any Rents from any lessee for a period of more than one month
License, and either in person or by agent, with or without bringing any action or proceedings, or by a
in advance or two months in advance where one month’s rental is attributable to the next ensuing
receiver to be appointed by court, enter upon, take possession of, manage and operate the Mortgaged
month and one month’s rental is attributable to the last month in the lease term, if any, and is
Properties or any portion thereof; make, cancel, enforce or modify Leases to the same extent that the
collected as security under the provisions of a written lease or rental agreement, if any (whether in
Mortgagor could do; obtain and evict lessees, and fix or modify Rents, and do any acts which the
cash or by evidence of indebtedness); or
Mortgagee deems proper to protect the security hereof; and either with or without taking possession
of the Mortgaged Properties, in its own name sue for or otherwise collect and receive such Rents
(d) pledge, transfer, mortgage or otherwise encumber or assign or permit an
(including lessee’s security deposits and Rents that are past due and unpaid), and apply the same, less
encumbrance upon future payments of Rents or any other interest of the Mortgagor in the Leases
costs and expenses of operation and collection, including attorneys’ fees, upon any Secured
except as permitted by the Loan Agreement; or
Obligations secured hereby, in such order as the Mortgagee may determine subject to the provisions
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of the Loan Agreement and the Indenture. If there shall have occurred and be continuing an Event of (d) except in the ordinary course of business, except as indicated in the Leases, the
Default, upon demand by the Mortgagee, the Mortgagor shall deliver to the Mortgagee all such lessees’ Mortgagor has not received any funds or deposits from any lessee for which credit has not already
security deposits that the Mortgagor has in its possession or control. The entering upon and taking been made on account of accrued Rents.
possession of the Mortgaged Properties or the collection of the Rents and security deposits and the
application thereof as aforesaid, shall not cure or waive any default under the documents evidencing The phrase “Mortgagor’s current actual knowledge” as used in this Section shall mean the current, actual
or securing the Secured Obligations, or waive, modify or affect notice of an Event of Default, or knowledge, after reasonable inquiry of the officers of the Mortgagor most likely to have knowledge of the
invalidate any act done pursuant to such notice. The Mortgagee may exercise its rights under this facts and circumstances contained herein.
paragraph as often as any such Event of Default may occur and be continuing, and the exercise of such SECTION 4.10 Termination of Assignment of Leases. Upon the payment or
right shall not constitute a waiver of any of the other remedies of the Mortgagee under this Mortgage performance in full of the Secured Obligations, this assignment shall become void and of no effect,
or other document evidencing or securing the Secured Obligations. but the affidavit of any officer or loan correspondent of the Mortgagee stating that any part of the
Indebtedness remains unpaid shall be and constitute evidence of the validity, effectiveness and
SECTION 4.7 No Obligation of Mortgagee. It is understood that the Mortgagee’s
continuing force of this assignment, and any person may and is hereby authorized to rely thereon.
acceptance of the assignment made hereby shall not operate to place responsibility for the control,
care, management or repair of the Mortgaged Properties upon the Mortgagee, nor for the carrying out SECTION 4.11 Right to Enforce the Leases. In exercise of the rights and powers created
of any of the terms and conditions of said Leases; nor shall it operate to make the Mortgagee under this Article, if an Event of Default has occurred or is continuing under the Indenture, the
responsible or liable for any waste committed on the Mortgaged Properties by the lessees or any other Mortgagor specifically agrees that the Mortgagee or the Mortgagee’s agent, as such party may see fit,
parties, or for any dangerous or defective condition of the Mortgaged Properties, or for any negligence may do any of the following: (a) use against the Mortgagor or any other persons lawful or peaceable
in the management, upkeep, repair or control of the Mortgaged Properties resulting in loss, injury or means to enforce the collection of any such rents, revenues, profits, and income, (b) secure possession
death to the Mortgagor or any lessee, licensee, employee or stranger. The Mortgagee shall not be of the Mortgaged Properties, or any part thereof; settle or compromise on any terms the liability of
liable for any loss sustained by the Mortgagor resulting from the Mortgagee’s failure to let the any person or persons for any such rents, revenues, profits, or income; institute and prosecute to final
Mortgaged Properties after an Event of Default or from any other act or omission of the Mortgagee in conclusion actions of forcible entry and detainer, or actions of trespass to try title, or actions for
dealing with the Mortgaged Properties after an Event of Default. The Mortgagee shall not be obligated damages, or any other appropriate actions, in the name of such person or in the name of the Mortgagor;
to perform or discharge, nor does the Mortgagee hereby undertake to perform or discharge, any and (c) settle, compromise, or abandon any such actions. In furtherance of the foregoing and not by
obligation, duty or liability under any of the Leases or under or by reason of this assignment. way of limitation, the Mortgagor binds itself to take whatever lawful or peaceful steps the Mortgagee
may ask it to take for such purposes, including the institution and prosecution of actions of the
SECTION 4.8 No Waiver of Mortgagee’s Rights. Nothing contained in this assignment
character above stated; however, the Mortgagor recognizes that neither the Mortgagee nor any person
and no act done or omitted by the Mortgagee pursuant to the powers and rights granted to it hereunder
acting on behalf of the Mortgagee shall ever be required to collect any such rents or income or be
shall be deemed to be a waiver by the Mortgagee of its other rights and remedies under the Loan
liable or chargeable for failure so to do. All money collected by the Mortgagee shall be applied to the
Agreement, the Notes, the Indenture, this Mortgage, or other document evidencing or securing the
Secured Obligations as provided in the Indenture.
Secured Obligations, and this assignment is made and accepted without prejudice to any of the other
rights and remedies possessed by the Mortgagee under the terms of the Loan Agreement, the Notes, SECTION 4.12 Mortgagee Not Mortgagee-in-Possession. Neither the foregoing
the Indenture, this Mortgage, and other documents evidencing or securing the Secured Obligations. assignment of Rents and Leases to the Mortgagee, nor the exercise by the Mortgagee of any of its
The right of the Mortgagee to collect the principal sum, interest and other indebtedness under the rights or remedies hereunder shall be deemed to make the Mortgagee a “mortgagee-in-possession” or
Bonds and to enforce any security therefor held by it may be exercised by the Mortgagee either prior otherwise liable in any manner with respect to the Mortgaged Properties, unless the Mortgagee, in
to, simultaneously with, or subsequent to any action taken by it hereunder. person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the
Mortgaged Properties by any court at the request of the Mortgagee or by agreement with the
SECTION 4.9 Warranties Concerning Leases and Rents. The Mortgagor represents
Mortgagor, or the entry into possession of the Mortgaged Properties by such receiver, be deemed to
and warrants to the Mortgagee that, to the best of Mortgagor’s current actual knowledge:
make the Mortgagee a “mortgagee-in-possession” or otherwise liable in any manner with respect to
the Mortgaged Properties.
(a) the Mortgagor has good title to the existing Leases and Rents hereby assigned and
the authority to assign them, and no other person or entity has any right, title or interest therein, and
ARTICLE V
no Rents have been or will be assigned, mortgaged or pledged except pursuant to this Mortgage,
the Indenture and the Loan Agreement;
SECURITY AGREEMENT
(b) all existing Leases are valid, unmodified and in full force and effect, and no
SECTION 5.1 Grant of Security Interest. Without limiting any of the other provisions
material default exists thereunder;
of the Indenture, the Loan Agreement and this Mortgage, the Mortgagor, as Debtor (referred to in this
Article as “Debtor,” whether one or more), expressly GRANTS unto the Mortgagee, as Secured Party
(c) except in the ordinary course of business or as otherwise permitted hereunder, no
(referred to in this Article as “Secured Party,” whether one or more), a security interest in all the
Rents have been or will be, without the Mortgagee’s prior written consent, anticipated, waived,
Mortgaged Properties (including both those now and those hereafter existing) to the full extent that
released, discounted, setoff or compromised; and
the Mortgaged Properties may be subject to the Uniform Commercial Code.

13 14

SECTION 5.2 Debtor’s Covenants. Debtor covenants and agrees with Secured Party condition or thing incident thereto shall be presumed conclusively to have been performed or to
as follows: have occurred. Proceeds of any sale of the collateral shall be applied to the Secured Obligations as
set forth in the Indenture.
(a) In addition to any other remedies granted in this Mortgage to Secured Party
(including specifically, but not limited to, the right to proceed against all the Mortgaged Properties (f) Secured Party may require Debtor to assemble the Collateral and make it available
in accordance with the rights and remedies in respect of those Mortgaged Properties which are real to Secured Party at a place to be designated by Secured Party that is reasonably convenient to both
property pursuant to Section 9.604 of the Uniform Commercial Code), Secured Party may, should parties. Debtor shall be fully liable for all expenses of retaking, holding, preparing for sale, lease
an Event of Default occur and be continuing, proceed under the Uniform Commercial Code as to or other use or disposition, selling, leasing or otherwise using or disposing of the Collateral which
all or any part of the Collateral, and shall have and may exercise with respect to the Collateral all are incurred or paid by Secured Party as authorized or permitted hereunder, including also all
the rights, remedies, and powers of a secured party under the Uniform Commercial Code, including, attorneys’ fees, legal expenses, and costs, all of which expenses and costs shall constitute a part of
without limitation, the right and power to sell, at one or more public or private sales, or otherwise the Secured Obligations.
dispose of, lease, or utilize the Collateral and any part or parts thereof in any manner authorized or
permitted under the Uniform Commercial Code after default by a debtor, and to apply the proceeds (g) Certain of the Collateral is or will become “fixtures” (as that term is defined in the
thereof toward payment of any costs and expenses and attorneys’ fees and legal expenses thereby Uniform Commercial Code) on the real estate hereinabove described, and this Mortgage upon being
incurred by Secured Party, and toward payment of the Secured Obligations in such order or manner filed for record in the real estate records shall operate also as a financing statement upon such of
as Secured Party may elect. the Collateral which is or may become fixtures. Debtor has an interest of record in the real estate.

(b) Among the rights of Secured Party upon occurrence and continuance of an Event (h) Any copy of this Mortgage which is signed by Debtor or any carbon, photographic,
of Default and without limitation, Secured Party shall have the right, by any lawful means, to take or other reproduction of this Mortgage may also serve as a financing statement under the Uniform
possession of the Collateral or any part thereof and to enter, in any lawful manner, upon any Commercial Code by Debtor, whose address is set opposite its signature hereinbelow, in favor of
premises where same may be situated for such purpose without being deemed guilty of trespass Secured Party, whose address is set out hereinbelow.
and without liability for damages thereby occasioned, and to take any lawful action deemed
necessary or appropriate or desirable by Secured Party, to repair, refurbish, or otherwise prepare (i) So long as any Secured Obligations remain outstanding, unless the prior written
the Collateral for sale, lease, or other use or disposition as herein authorized. specific consent and approval of Secured Party shall have first been obtained, Debtor will not
execute and there will not be filed in any public office any financing statement or statements
(c) To the extent permitted by law and except as otherwise provided in the Loan affecting the Collateral other than financing statements in favor of Secured Party hereunder, under
Agreement, Debtor expressly waives any notice of sale or other disposition of the Collateral and and as specifically permitted by the Loan Agreement or the Indenture, or relating to Permitted
any other rights or remedies of a debtor or formalities prescribed by law relative to sale or Encumbrances.
disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after
an Event of Default hereunder; and, to the extent any such notice is required and cannot be waived, SECTION 5.3 Debtor’s Warranties and Representations. Debtor warrants and
Debtor agrees that, if such notice is mailed, postage prepaid, to Debtor at the address shown represents to Secured Party that, except for the security interest granted hereby and by the other
opposite Debtor’s signature hereinbelow at least five (5) days before the time of the sale or Documents, in the Collateral, Debtor is the owner and holder of the Collateral, free of any adverse
disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement for claim, security interest or encumbrance (other than Permitted Encumbrances), and Debtor agrees to
giving of said notice. defend the Collateral against all claims and demands of any person at any time claiming the same or
any interest therein. Debtor further warrants and represents with respect to the Collateral that it has
(d) Upon occurrence and continuance of an Event of Default, Secured Party is hereby not heretofore signed, filed or authorized any financing statement and that no financing statements
granted the express right, at its option, to transfer to itself or to its nominee, the Collateral, or any signed, filed or authorized by Debtor are now on file in any public office except those statements true
part thereof, to notify any obligor or account debtor in the case of any Collateral to make payment and correct copies of which have been delivered to Secured Party.
directly to Secured Party, and to receive the money, income, proceeds or benefits attributable or
accruing thereto and to hold the same as security for the Secured Obligations or to apply the same ARTICLE VI
on the principal and interest or other amounts owing on any of the Secured Obligations, whether or
not then due, in such order or manner as Secured Party may elect, subject to the Loan Agreement CERTAIN COVENANTS AND WARRANTIES OF THE MORTGAGOR
and the Indenture. With respect to the Collateral, Debtor, for itself, its heirs and assigns, hereby
expressly and specifically waives all rights to a marshaling of the assets of Debtor, including the SECTION 6.1 Covenants and Warranties of the Mortgagor. As further assurances with
Collateral, or to a sale in inverse order of alienation. regard to the Secured Obligations, the Mortgagor hereby covenants, warrants, and agrees in favor of
the Mortgagee, as follows:
(e) All recitals in any instrument of assignment or any other instrument executed by
Secured Party incident to sale, transfer, assignment, lease, or other disposition or utilization of the (a) The Mortgagor hereby agrees and binds itself to perform and pay the Secured
Collateral or any part thereof hereunder shall be full proof of the matters stated therein, no other Obligations and every installment of principal and interest thereof promptly as the same becomes
proof shall be requisite to establish full legal propriety of the sale or other action or of any fact, due and payable.
condition or thing incident thereto, and all prerequisites of such sale or other action and of any fact,
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 (b) The Mortgagor, to the extent same can lawfully be levied, hereby covenants and any such action or proceeding or the protection of the lien, security interest, validity, enforceability,
agrees to pay all taxes and assessments of every kind or character charged, levied, or assessed or priority of this instrument or of such title or rights, including the employment of counsel, the
against the Mortgaged Properties or any part thereof, before any such taxes or assessments become prosecution or defense of litigation, the compromise, release or discharge of such adverse claims, the
delinquent; to pay all water, gas, sewer, electricity, and other utility rates and charges with regard purchase of any tax title, and the removal of such prior liens and security interests. The Mortgagor
to the Mortgaged Properties; to pay all maintenance fees or charges of any owners’ association or shall, on demand, reimburse the Mortgagee for all expenses (including reasonable attorneys’ fees and
like group assessed with respect to the Mortgaged Properties; to pay any ground rents or charges disbursements) incurred by it (directly or indirectly by the Mortgagee) in connection with the
for any easement, license, or agreement existing for the benefit of the Mortgaged Properties; to pay foregoing matters. All such costs and expenses of the Mortgagee, until reimbursed by the Mortgagor,
any interest, costs or penalties with respect to the foregoing items; and, upon the written request of shall be part of the Secured Obligations and shall be deemed to be secured by this Mortgage.
the Mortgagee to the Mortgagor, to furnish to the Mortgagee evidence of the timely payment of
such items. SECTION 6.4 Compliance with Laws.

(c) The Land consists of one or more parcels assessed for purposes of Property Taxes (a) General. The Mortgagor will perform and comply promptly with, and cause the
as separate and distinct parcels from any other real property so that the Land shall never become Project to be maintained, used, and operated in accordance with, any and all (i) present and future
subject to the lien of any Property Taxes levied or assessed against any real property other than the laws, ordinances, rules, regulations, and requirements of every duly-constituted governmental or
Land. quasi-governmental authority or agency applicable to the Mortgagor or the Project, including,
without limitation, the Americans with Disabilities Act of 1990 and the Fair Housing Act; (ii)
(d) The Mortgagor, shall, at its sole cost and expense, obtain and maintain the similarly applicable orders, rules, and regulations of any regulatory, licensing, accrediting,
insurance coverage as described in the Loan Agreement. insurance underwriting, or rating organization, or other body exercising similar functions; (iii)
similarly applicable duties or obligations of any kind imposed under any Permitted Encumbrance
SECTION 6.2 Status of the Project. The Mortgagor has, or will have, on or prior to the or otherwise by law, covenant, condition, agreement, or easement, public or private; and (iv)
Closing Date, all certificates, licenses, and other approvals, governmental and otherwise, necessary policies of insurance at any time in force with respect to the Project. If the Mortgagor receives any
for the operation of the Project and Improvements and the conduct of its business thereat, or will notice that the Mortgagor or the Project is in default under or is not in compliance with any of the
otherwise be permitted under applicable law to operate the Project and the Improvements and conduct foregoing, or notice of any proceeding initiated under or with respect to any of the foregoing, the
its business thereat on and as of the Closing Date. Mortgagor will promptly furnish a copy of such notice to the Mortgagee.

(a) The Mortgagor will cause all debts and liabilities of any character, including (b) Zoning; Title Matters. The Mortgagor warrants that the Land is currently zoned
without limitation all debts and liabilities for labor, materials and equipment and all debts and such that the Mortgagor may lawfully operate thereon the respective senior living facilities to be
charges for utilities servicing the Project, incurred in the maintenance and operation of the Project acquired by the Mortgagor and constituting all or a portion of the Project. The Mortgagor also
to be promptly paid, except for those being contested or bonded around in accordance with the warrants that it will not, without the prior written consent of the Mortgagee, such consent not to be
applicable provisions of the Loan Agreement or this Mortgage. unreasonably withheld, conditioned or delayed, (i) initiate or overtly support any zoning
reclassification of the Mortgaged Properties, the Project, or the Improvements, seek any variance
(b) The Project and the Improvements are served by all utilities required for the under existing zoning ordinances applicable to the Mortgaged Properties, the Project or the
contemplated acquisition and use of the Project. Improvements, or use or permit the use of the Mortgaged Properties, the Project, and Improvements
in a manner which would result in such use becoming a non-conforming use under applicable
(c) All public roads and streets necessary to serve the Project and the Improvements zoning ordinances; (ii) modify, amend, or supplement any of the Permitted Encumbrances except
for the contemplated acquisition and use thereof are serviceable, and have been dedicated to and utility distribution easements across the Land which will permit utility service to the Project; (iii)
formally accepted by the appropriate governmental entities. impose any restrictive covenants or encumbrances upon the Mortgaged Properties or the
Improvements, execute or file any subdivision plat affecting the Mortgaged Properties or the
SECTION 6.3 Defense of Title and Litigation. If the lien or security interest created by Improvements, or consent to the annexation of the Mortgaged Properties or the Improvements to
this Mortgage, or the validity, enforceability, or priority thereof or of this instrument or if title or any any municipality except utility distribution easements across the Land which will permit utility
of the rights of the Mortgagor or the Mortgagee in or to the Project, shall be endangered or shall be service to the Project; or (iv) permit or suffer the Mortgaged Properties or the Improvements to be
attacked directly or indirectly or if any action or proceeding is instituted against the Mortgagor or the used by the public or any person in such manner as to make reasonably possible a claim of adverse
Mortgagee with respect thereto, the Mortgagor will promptly notify the Mortgagee thereof when usage or possession or of any implied dedication or easement.
known by the Mortgagor, and will diligently endeavor to cure any defect which may be developed or
claimed, and will take all necessary and proper steps for the defense of such action or proceeding, (c) No Cooperative or Condominium. The Mortgagor shall not operate or permit the
including the employment of counsel, the prosecution or defense of litigation, and, subject to the Project or the Improvements to be operated as a cooperative, condominium, or other form of
Mortgagee’s approval, in its sole reasonable discretion, the compromise, release, or discharge of any ownership in which the lessees or other occupants thereof participate in the ownership, control, or
and all adverse claims. If the Mortgagor fails to perform its obligations under this Section promptly, management of the Project, or any part thereof, as lessees, stockholders, or otherwise; provided, it
or if the positions of the Mortgagor and the Mortgagee are not identical, the Mortgagee (whether or shall not be a breach of this subsection for one (1) person who is a resident of a facility which is
not named as a party to such actions or proceedings) is hereby authorized and empowered (but shall part of the Project to participate in meetings of the board of directors of the Mortgagor.
not be obligated) to take such additional steps as it may deem necessary or proper for the defense of
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(d) Repair. The Mortgagor hereby covenants and agrees to keep and maintain the Upon request of the Mortgagor, the Mortgagee shall execute and deliver such instruments
Improvements now or at any time hereafter constituting a portion of the Mortgaged Properties in a or documents as shall be necessary or desirable to confirm the release of portions of the Mortgaged
state of good repair and condition; to make all repairs, replacements, reconstructions and Property from the lien of this Mortgage. Any such request must be accompanied by documentation
restorations necessary to keep such Improvements in such condition; and, without the prior written reasonably satisfactory to the Mortgagee confirming a permitted sale of the Mortgaged Property in
consent of the Mortgagee, not to tear down or remove or permit to be torn down or removed any accordance with the Loan Agreement or a termination of the Loan Agreement has resulted in the
such Improvements now existing or hereafter erected. sale of all or a portion of the Mortgaged Property. All reasonable costs and expenses (including
reasonable attorneys’ fees) incurred by the Mortgagee in connection with such release shall be paid
(e) Lien Priority. The Mortgagor covenants and agrees that, should it be discovered by the Mortgagor.
after the execution and delivery hereof, that there is a lien or encumbrance of any nature whatsoever
(other than Permitted Encumbrances) upon the Mortgaged Properties or any part thereof, equal or (j) No Pledges or Mortgages. The Mortgagor covenants and agrees that the
superior in rank to the lien of this Mortgage, or in case of an error or defect herein, or the execution Mortgagee may treat any mortgage, pledge, hypothecation, or encumbrance of the Mortgaged
or acknowledgment hereof, the Mortgagor shall immediately give written notice, together with a Properties or any interest therein other than the Permitted Encumbrances (collectively referred to
copy of such lien or encumbrance, to the Mortgagee and shall immediately thereafter, but in no as the “Pledge”), whether or not such Pledge is expressly subordinate to the lien of this Mortgage,
event later than thirty (30) days of discovery of such lien or encumbrance, correct such defects in as an Event of Default and thereupon may invoke any remedies permitted by this Mortgage.
such title, or remove said liens or encumbrances or homestead claim, or correct such error or defect
in this Mortgage or its execution or any acknowledgment hereof and provide evidence thereof to (k) Personalty. The Mortgagor shall not sell, convey or otherwise transfer or dispose
the Mortgagee. of its interest in any machinery or equipment in which the Mortgagee has a security interest
pursuant to any Document except in accordance with and as permitted by the Loan Agreement.
(f) Possession after Sale. The Mortgagor covenants and agrees that, after any sale
under this Mortgage, it, or its successors or assigns, shall be mere tenants at sufferance of the (l) Notice of Loss and Taking. The Mortgagor will give the Mortgagee prompt notice
purchaser of the property at said sale, and that such purchaser shall be entitled to immediate of any casualty loss, threat of Condemnation, Condemnation, or taking affecting all or any portion
possession thereof, and that, if the Mortgagor fails to vacate such property immediately, such of the Mortgaged Properties.
purchaser may and shall have the right to go into any justice court having venue, or in any other
court hereafter having jurisdiction of forcible detainer actions, and file an action in forcible (m) Payment after Default. In the event the Secured Obligations shall become due and
detainer, which action shall lie against the Mortgagor or its successors or assigns as tenants at payable by virtue of an Event of Default, the Mortgagor agrees that any tender of payment of the
sufferance. Secured Obligations prior to a foreclosure sale shall, at the option of the Mortgagee, be deemed a
voluntary prepayment by the Mortgagor requiring the payment of any prepayment penalty, or
(g) Subrogation. To the extent the proceeds of any of the Secured Obligations are redemption premium required under the terms of the documents evidencing the Secured
used for the purpose of paying the indebtedness secured by any mortgage lien having priority over Obligations to the full extent that such payment, when added to all other amounts then and
the lien of this Mortgage, the Mortgagee shall be subrogated to any and all rights, superior titles, theretofore paid and which constitute interest, would not exceed the maximum lawful interest
liens and equities owned or claimed by the holder of such prior mortgage. Except with respect to permitted to be charged of the Mortgagor.
the priority of any mortgage to which the Mortgagee is subrogated pursuant to the provisions
hereof, the terms and provisions of this Mortgage shall govern the rights and remedies of the SECTION 6.5 Indemnification. THE MORTGAGOR HEREBY AGREES TO INDEMNIFY,
Mortgagee and shall supersede the rights and remedies provided under any mortgage to which the HOLD HARMLESS AND DEFEND THE ISSUER, THE MORTGAGEE, AND THEIR RESPECTIVE
Mortgagee is subrogated. OFFICIALS, OFFICERS, DIRECTORS AND EMPLOYEES (EACH, AN “INDEMNIFIED PARTY” AND
COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST (X) (1) ANY LOSS, LIABILITY,
(h) Due on Sale. The Mortgagor covenants and agrees that the Mortgagee may treat DEMAND, DAMAGE, COST, EXPENSE, CLAIM, ACTION OR CAUSE OF ACTION ARISING FROM THE
any sale, transfer, or conveyance of the Mortgaged Properties or any interest therein (except for the IMPOSITION OR RECORDING OF A LIEN, THE INCURRING OF COSTS OF REQUIRED REPAIRS,
Leases, Permitted Encumbrances, or any other sale, transfer or conveyance permitted by the REMEDIATION, CLEAN UP OR DETOXIFICATION AND REMOVAL UNDER ANY APPLICABLE
Documents or otherwise, as provided in and in accordance with the Loan Agreement and the ENVIRONMENTAL LAW (INCLUDING OTHER ASSOCIATED COSTS, INTEREST, FEES, AND
Indenture), as an Event of Default, and thereupon may invoke any remedies permitted by this PENALTIES) WITH RESPECT TO ALL OR ANY PART OF THE MORTGAGED PROPERTIES OR
Mortgage. LIABILITY TO ANY THIRD PARTY IN CONNECTION WITH ANY VIOLATION OF ANY APPLICABLE
ENVIRONMENTAL LAW; (2) ANY OTHER LOSS, LIABILITY, DAMAGE, COST, EXPENSE, OR CLAIM
(i) Release of Mortgage Property. The Mortgagee acknowledges and agrees that (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS AND
certain permitted sales of the Mortgaged Properties are allowed under the Loan Agreement and that EXPENSES, AND COSTS AND EXPENSES REASONABLY INCURRED IN INVESTIGATING, PREPARING,
the termination of the Loan Agreement may result in the sale of all or a portion of the Mortgaged SETTLING OR DEFENDING AGAINST ANY LITIGATION OR CLAIM, ACTION, SUIT, PROCEEDING OR
Properties. To the extent that a permitted sale of any portion of the Mortgaged Properties occurs DEMAND OF ANY KIND OR CHARACTER), WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
in accordance with the Loan Agreement or a termination of the Loan Agreement results in a sale THE INDEMNIFIED PARTIES OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, DIRECTLY OR
of any portion of the Mortgaged Property, such portion of the Mortgaged Property shall also be INDIRECTLY, ARISING FROM THE PRESENCE ON OR UNDER, OR THE DISCHARGE, EMISSION OR
released from the lien of this Mortgage. RELEASE FROM ANY OF THE MORTGAGED PROPERTIES INTO OR UPON THE LAND, ATMOSPHERE,
OR ANY WATERCOURSE, BODY OF SURFACE OR SUBSURFACE WATER OR WETLAND, ARISING FROM

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 THE INSTALLATION, USE, GENERATION, MANUFACTURE, TREATMENT, HANDLING, REFINING, The Mortgagor shall be responsible for the reasonable counsel fees, costs, and expenses of the
PRODUCTION, PROCESSING, STORAGE, REMOVAL, REMEDIATION CLEAN UP OR DISPOSAL OF ANY Indemnified Party in conducting its defense under the circumstances described in the preceding
HAZARDOUS SUBSTANCE WHETHER OR NOT CAUSED BY THE MORTGAGOR; AND (3) LOSS OF sentence.
VALUE OF ANY OF THE MORTGAGED PROPERTIES AS A RESULT OF ANY SUCH LIEN, REMEDIATION
CLEAN UP, DETOXIFICATION, LOSS, LIABILITY, DAMAGE, EXPENSE OR CLAIM OR A FAILURE OR (b) The foregoing indemnification is intended to and shall be enforceable by the
DEFECT IN TITLE OCCASIONED BY ANY HAZARDOUS SUBSTANCE OR APPLICABLE Indemnified Parties to the full extent permitted by law.
ENVIRONMENTAL LAW, AND IN ANY SUCH CASE, THE MORTGAGOR SHALL DEFEND SUCH CLAIM,
AND THE INDEMNIFIED PARTY SHALL COOPERATE IN THE DEFENSE AND MAY HAVE SEPARATE (c) Notwithstanding anything herein to the contrary, nothing in this Section shall be
COUNSEL OF ITS CHOOSING, AND IN SUCH EVENT THE MORTGAGOR SHALL PAY THE FEES AND construed as to require the Mortgagor to satisfy or pay any claims settled by an Indemnified Party
EXPENSES OF SUCH COUNSEL AND (Y) ANY AND ALL OTHER ACTUAL OUT-OF-POCKET LOSSES OR without the prior written consent of the Mortgagor.
EXPENSES SUFFERED OR INCURRED BY ANY INDEMNIFIED PARTY TO THE EXTENT CAUSED BY
CLAIMS, JOINT OR SEVERAL, BY OR ON BEHALF OF ANY PERSON ARISING FROM ANY CAUSE SECTION 6.6 Certificate. The Mortgagor, upon request by the Mortgagee, made either
WHATSOEVER IN CONNECTION WITH TRANSACTIONS CONTEMPLATED HEREBY OR OTHERWISE IN personally or by mail, shall certify, by a writing duly acknowledged, to the Mortgagee or to any
CONNECTION WITH THE MORTGAGED PROPERTIES, THE BONDS (AND WITH RESPECT TO THE proposed assignee of this Mortgage, the amount of principal and interest then owing on this Mortgage
MORTGAGEE, ACCEPTANCE OR ADMINISTRATION OF THE TRUST IMPOSED BY THE INDENTURE), and whether any offsets or defenses exist against the indebtedness hereby secured, within ten (10) days
OR THE EXECUTION OR AMENDMENT OF ANY DOCUMENT RELATING THERETO, AND ALL after the receipt by the Mortgagor of such request.
REASONABLE ACTUAL OUT-OF-POCKET COSTS, COUNSEL FEES, EXPENSES OR LIABILITIES
INCURRED IN CONNECTION WITH ANY SUCH CLAIM, OR PROCEEDING BROUGHT THEREON, ARTICLE VII
EXCEPT TO THE EXTENT SUCH DAMAGES ARE CAUSED, IN THE CASE OF THE MORTGAGEE, BY THE
BAD FAITH, NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY. DEFAULTS

NOTWITHSTANDING THE FOREGOING, UPON ANY PERMITTED TRANSFER OF ALL OR ANY PART SECTION 7.1 Event of Default. Should any of the following events or conditions
OF THE MORTGAGED PROPERTIES TO ANOTHER PERSON, THE RELEASE OF ALL OR ANY PART OF THE occur, the same shall constitute an event of default under this Mortgage (herein called “Event of
MORTGAGED PROPERTIES FROM THE LIEN OF THIS MORTGAGE, THE FORECLOSURE OF THE LIEN OF Default”):
THIS MORTGAGE, THE APPOINTMENT OF A RECEIVER OR THE OCCURRENCE OF ANY OTHER EVENT
WHICH DIVESTS THE MORTGAGOR OF CONTROL OF ALL OR ANY PART OF THE MORTGAGED (a) the Mortgagor shall fail or refuse to pay all or any portion of the Secured
PROPERTIES OR THE RECEIPTS THEREOF (EACH, A “TRANSFER”), THE MORTGAGOR SHALL REMAIN Obligations when due, subject to any grace periods applicable to such payments in the Documents
OBLIGATED TO INDEMNIFY EACH INDEMNIFIED PARTY PURSUANT TO THIS SECTION WITH RESPECT TO evidencing such Secured Obligations;
(BUT ONLY WITH RESPECT TO) ACTS OCCURRING PRIOR TO THE DATE OF SUCH TRANSFER
(IRRESPECTIVE OF WHEN A CLAIM IS ACTUALLY MADE), PROVIDED THAT EXCEPT AS TO THE ISSUER, (b) the Mortgagor shall fail to perform or to fulfill in a timely manner any other of the
THE INDEMNITY PROVISIONS OF THIS SECTION (AS SO LIMITED) SHALL SURVIVE THE TERMINATION OF Secured Obligations, including specifically, but not limited to, the covenants and obligations of the
THIS MORTGAGE, SUCH TRANSFER OR OTHER DISPOSITION OF ALL OR ANY PART OF THE MORTGAGED Mortgagor contained in this Mortgage, and continuance of such failure for a period of 30 days
PROPERTIES FOR A PERIOD OF TWO YEARS. THE RIGHTS OF THE ISSUER HEREUNDER SHALL NOT (unless a different grace period is specifically provided for in this Mortgage or the Documents)
TERMINATE AT SUCH TIME. after there has been given, by registered or certified mail, to the Mortgagor by the Mortgagee, or to
the Mortgagor and the Mortgagee by Holders of at least 25% of the Bonds then Outstanding, a
(a) In case any action or proceeding is brought against any Indemnified Party in written notice specifying such failure and requiring it to be remedied and stating that such notice is
respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall a notice of default under this Mortgage;
give notice of that action or proceeding to the Mortgagor, and the Mortgagor upon receipt of that
notice shall have the obligation and the right to assume the defense of the action or proceeding; (c) any warranty or representation of the Mortgagor set forth in this Mortgage or the
provided that failure of a party to give that notice shall not relieve the Mortgagor from any of its Documents shall prove to have been untrue in any material respect when made; or
obligations under this Section unless that failure prejudices the defense of the action or proceeding
by the Mortgagor. Any Indemnified Party shall have the right to employ separate counsel in any (d) any “event of default” or “default,” however defined, shall have occurred under
such action and to participate in the defense thereof, but the fees and expenses of such counsel shall the Loan Agreement, the Indenture, any of the Secured Obligations or any of the documents
be at the expense of such Indemnified Party. If the Indemnified Party is advised in an opinion of evidencing or securing the Secured Obligations or any other Document, in each case, after the
counsel that there may be conflicting interests between the Mortgagor and the Indemnified Party expiration of all applicable grace and cure periods.
or legal defenses available to the Indemnified Party which are different from or in addition to those
available to the Mortgagor or if the Mortgagor shall, after this notice and within a period of time SECTION 7.2 Remedies. Upon the occurrence of an Event of Default, so long as such
necessary to preserve any and all defenses to any claim asserted, fail to assume the defense or to Event of Default remains uncured, the Mortgagee shall have the option and right to take any one or
employ counsel for that purpose reasonably satisfactory to the Indemnified Party, the Indemnified more of the following actions: (a) declare the Secured Obligations, without deduction and without
Party shall have the right, but not the obligation, to undertake the defense of, and to compromise notice, to be immediately due and payable, and the Mortgagee will be entitled to foreclose this
or settle the claim or other matter on behalf of, for the account of, and at the risk of, the Mortgagor. Mortgage by judicial proceeding, or (b) after any notice to the Mortgagor required by the Oklahoma

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Power of Sale Mortgage Foreclosure Act, 46 Okla. Stat. § 41 et seq. (1991), as amended from time to the payment of indebtedness hereby secured to any other security therefor held by the Mortgagee in
time (the “Power of Sale Act”) declare the Secured Obligations, without deduction, to be immediately such order and manner as the Mortgagee may elect.
due and payable, and the Mortgagee will be entitled to foreclose this Mortgage by power of sale
pursuant to the provisions of the Power of Sale Act. The Mortgagor hereby confers upon the SECTION 7.5 Expenses of Collection. It is agreed that if, and as often as, this Mortgage
Mortgagee and grants to the Mortgagee the power to sell the Mortgaged Properties pursuant to the or any of the Secured Obligations is placed in the hands of an attorney for collection, or to protect the
Power of Sale Act or any other applicable authority. Upon the occurrence and during the continuation priority or validity of this Mortgage, or to prosecute or defend any suit affecting the Mortgaged Properties,
of an Event of Default, the Mortgagee will be entitled to exercise all further and additional remedies or to enforce or defend any of the Mortgagee’s rights hereunder, the Mortgagor shall pay to the Mortgagee
as might now or hereafter be accorded to the Mortgagee at law or in equity. Whether the Mortgagee its reasonable attorney’s fees, together with all court costs, expenses for title examination, title insurance
elects to foreclose this Mortgage by judicial proceeding or by power of sale, the Mortgagee shall, or other disbursements relating to the Mortgaged Properties, which sums shall be secured hereby.
immediately on default, be entitled to the possession of the Mortgaged Properties and the rents and
profits thereof, and shall be entitled to have a receiver appointed to take possession of the Mortgaged ARTICLE VIII
Properties without notice, which notice the Mortgagor hereby waives, notwithstanding anything
contained in this Mortgage or any law heretofore or hereafter enacted. No action of the Mortgagee CERTAIN REMEDIES
based upon the provisions contained herein or contained in the Power of Sale Act, including, without
limitation, the giving of any of the notices provided for in the Power of Sale Act shall constitute an SECTION 8.1 Application of Proceeds. The Mortgagee shall pay, distribute, and apply
election of remedies which would preclude the Mortgagee from pursuing judicial foreclosure before the proceeds of any disposition of the Mortgaged Properties for deposit and use as provided in the
or at any time after commencement of the power of sale foreclosure procedure. Indenture. Said disposition shall forever be a bar against the Mortgagor, its legal representatives,
successors and assigns, and all other persons claiming under any of them. It is expressly agreed that
SECTION 7.3 Remedies Cumulative. The rights of the Mortgagee arising under the the recitals in each conveyance to the purchaser shall be full evidence of the truth of the matters therein
clauses and covenants contained in this Mortgage shall be separate, distinct and cumulative and none stated, and all lawful prerequisites to said disposition shall be conclusively presumed to have been
of them shall be in exclusion of the other. No act of the Mortgagee shall be construed as an election performed.
to proceed under any one provision herein to the exclusion of any other provision, anything herein or
otherwise to the contrary notwithstanding. SECTION 8.2 Remedies Not Exclusive. No lien, right, or remedy herein conferred
upon or otherwise available to the Mortgagee is intended to be or shall be construed to be exclusive
SECTION 7.4 No Waiver. Any failure by the Mortgagee to insist upon the strict of any other available lien, right, or remedy, but each and every such lien, right, or remedy shall be
performance by the Mortgagor of any of the terms and provisions hereof shall not be deemed to be a cumulative and shall be in addition to every other lien, right, or remedy given hereunder or now or
waiver of any of the terms and provisions hereof, and the Mortgagee, notwithstanding any such failure, hereafter existing at law or in equity or by statute. No delay or omission to exercise any right, power,
shall have the right thereafter to insist upon the strict performance by the Mortgagor of any and all of or remedy accruing upon any default or Event of Default shall impair any such right, power, or remedy
the terms and provisions of this Mortgage to be performed by the Mortgagor. Neither the Mortgagor or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein,
nor any other person now or hereafter obligated for the payment of the whole or any part of the but every such right, power, or remedy may be exercised from time to time and as often as may be
indebtedness now or hereafter secured by this Mortgage shall be relieved of such obligation by reason deemed expedient. No waiver of any default or Event of Default hereunder shall extend to or shall
of the failure of the Mortgagee to comply with any request of the Mortgagor or of any other person so affect any subsequent default or Event of Default or shall impair any rights or remedies consequent
obligated to take action to foreclose this Mortgage or otherwise enforce any of the provisions of this thereon. The giving, taking, or enforcement of any other or additional security, collateral, or guaranty
Mortgage or of any obligations secured by this Mortgage, or by reason of the release, regardless of for the payment of the Secured Obligations shall not operate to prejudice, waive, or affect the security
consideration, of the whole or any part of the security held for the indebtedness secured by this of this Mortgage or any rights, powers, or remedies hereunder, nor shall the Mortgagee be required to
Mortgage, or by reason of any agreement or stipulation between any subsequent owner or owners of first look to, enforce, or exhaust such other additional security, collateral, or guarantees.
the Mortgaged Properties and the Mortgagee extending, from time to time, the time of payment or
modifying the terms of this Mortgage or any of the other Documents without first having obtained the SECTION 8.3 Waivers.
consent of the Mortgagor or such other person, and in the latter event, the Mortgagor and all such other
persons shall continue liable to make such payments according to the terms of any such agreement of (a) All rights of marshaling of assets or sale in inverse order of alienation in the event
extension or modification unless expressly released and discharged in writing by the Mortgagee. of foreclosure of any lien at any time securing the Secured Obligations or any part thereof
Regardless of consideration, and without the necessity for any notice to or consent by the holder of (including, but not limited to, the lien hereby created) are hereby waived.
any subordinate lien on the Mortgaged Properties, the Mortgagee may release the obligation of anyone
at any time liable for any of the indebtedness secured by this Mortgage or any part of the security held (b) Appraisement of the Mortgaged Properties is hereby expressly waived, or not, at
for such indebtedness and may from time to time extend the time of payment or otherwise modify the the option of the Mortgagee, such option to be exercised at the time judgment is rendered in any
terms of this Mortgage or any other Document without, as to the security for the remainder thereof, in foreclosure hereof, or at any time prior thereto.
any way impairing or affecting the lien of this Mortgage or the priority of such lien, as security for the
payment of the indebtedness as it may be so extended or modified, over any subordinate lien. The (c) To the extent allowed by applicable law, the Mortgagor shall not at any time insist
holder of any subordinate lien shall have no right to terminate any lease affecting the Mortgaged upon or plead or in any manner whatever claim or take the benefit or advantage of any stay or
Properties whether or not such lease be subordinate to this Mortgage. The Mortgagee may resort for extension law or any law exempting the Mortgaged Properties from attachment, levy, or sale on
execution now or at any time hereafter in force in any locality where the Mortgaged Properties or
23 24

B-62
 any part thereof may or shall be situated, and the Mortgagor hereby expressly waives all benefit ARTICLE XI
and advantage of any such law or laws and covenants that the Mortgagor will not hinder, obstruct,
delay, or impede the execution of any power herein granted, but that the Mortgagor will suffer and ENVIRONMENTAL AND LAND USE MATTERS
permit the execution of every such power as though no such law or laws had been made or enacted.
SECTION 11.1 Environmental Representations, Warranties and Covenants. The
SECTION 8.4 Sale in Parcels. In case of any sale under this Mortgage by virtue of Mortgagor represents, warrants, and covenants, to Mortgagor’s limited actual knowledge obtained
judicial proceedings or otherwise, the Mortgaged Properties may be sold in one parcel and as an entirety or solely from Mortgagor’s review of the Property Reports (defined below), as follows:
in such parcels, manner or order as the Mortgagee in its sole discretion may elect, and the Mortgagor waives
any and all rights which the Mortgagor may have to insist upon the sale of the Mortgaged Properties in one (a) the location, occupancy, operation, and use of the Mortgaged Properties does not
parcel or in separate parcels. violate any applicable law (including, without limitation, applicable provisions of the Occupational
Safety and Health Act of 1970, the Employee Retirement Income Security Act of 1974, the
SECTION 8.5 Bankruptcy. The entire indebtedness secured by this Mortgage shall Americans with Disabilities Act of 1990, and corresponding rules and regulations), statute,
become and immediately be due at the option of the Mortgagee if by order of a court of competent ordinance, rule, regulation, order, or determination of any governmental authority or any board of
jurisdiction a receiver or liquidator or trustee of the Mortgagor or of all or any part of the Mortgaged fire underwriters (or other body exercising similar functions), or any restrictive covenant or deed
Properties, shall be appointed and shall not have been discharged within one hundred eighty (180) days; or, restriction (recorded or otherwise) affecting the Mortgaged Properties, including, without
if by decree of such court, the Mortgagor shall be adjudicated bankrupt or insolvent or the Mortgaged limitation, all applicable zoning ordinances and building codes, flood disaster laws, and health and
Properties shall have been sequestered and such decree shall have continued undischarged and unstayed for environmental laws and regulations;
one hundred eighty (180) consecutive days after the entry thereof; or if the Mortgagor shall file a petition
in voluntary bankruptcy or seeking relief under any provision of any bankruptcy or insolvency law or shall (b) neither the Mortgaged Properties nor the Mortgagor is in violation of or subject to
consent to the filing of any bankruptcy petition against the Mortgagor under any such law; or if the any existing, pending, or threatened investigation or inquiry by any governmental authority or to
Mortgagor shall file a petition or answer seeking reorganization or an arrangement with creditors; or if any remedial obligations under any Application Regulations pertaining to health or the environment
(without limitation of the generality of the foregoing) the Mortgagor shall make an assignment for the (herein sometimes collectively called “Applicable Environmental Law”), including, without
benefit of creditors, or shall admit in writing an inability to pay debts generally as they become due, or shall limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980,
consent to the appointment of a receiver, or trustee or liquidator of the Mortgagor or of all or any part of 42 U.S.C. §9601 et seq., as amended (“CERCLA”), the Hazardous Materials Transportation Act,
the Mortgaged Properties. 49 U.S.C. §1801 et seq., as amended, the Resource Conservation and Recovery Act, 42 U.S.C.
§6901 et seq., as amended (“RCRA”), the Toxic Substance Control Act of 1976, 14 U.S.C. §2601
ARTICLE IX et seq., as amended, the Clean Water Act, 33 U.S.C. §466 et seq., as amended, the Clean Air Act,
42 U.S.C. §7401, et seq., as amended, the Oklahoma laws covering Water and Water Rights, the
CONDEMNATION AND CASUALTY LOSS Oklahoma Solid Waste Management Act, the Oklahoma Controlled Industrial Waste Disposal Act,
the Oklahoma Clean Air Act and any other federal, state, or local law similar to those set forth in
SECTION 9.1 Condemnation. If the Mortgaged Properties, or any part thereof, shall this definition, and this representation and warranty would continue to be true and correct following
be condemned or taken for public use under the power of eminent domain, all Net Proceeds from disclosure to the applicable governmental authorities of all relevant facts, conditions, and
awards, compensation, settlement, and damages for such taking of or injury to the Mortgaged circumstances, if any, pertaining to the Mortgaged Properties. If any such investigation or inquiry
Properties shall be applied in accordance with the Indenture and the Loan Agreement. is subsequently initiated, the Mortgagor will promptly notify the Mortgagee;

SECTION 9.2 Casualty. Should the Mortgaged Properties be wholly or partially (c) the Mortgagor has not obtained and is not required to obtain any permits, licenses,
destroyed or damaged by fire, explosion, windstorm, or other insured casualty, all Net Proceeds that or similar authorizations to acquire, occupy, operate, or use any buildings, improvements, fixtures,
may become payable or collectible upon any policy of insurance by reason of such damage to or and equipment forming a part of the Mortgaged Properties by reason of any Applicable
destruction of the Mortgaged Properties shall be applied in accordance with the Indenture and the Loan Environmental Law;
Agreement.
(d) the Land has not previously been used as a landfill or as a dump for garbage or
ARTICLE X refuse; the Land does not lie within a flood plain or in an area that has been identified by the
Secretary of the United States Department of Housing and Urban Development as an area having
AMENDMENTS OF AND SUPPLEMENTS TO THIS special flood hazards, or, to the extent a portion of the Land may fall within such flood plain, the
MORTGAGE AND OTHER DOCUMENTS Mortgagor shall provide sufficient insurance coverage against such hazard. The Mortgagor has not
manufactured, used, generated, stored, found, released, or disposed of any Hazardous Substance
SECTION 10.1 Amendments and Supplements with Consent; Limitations. The on, under, or about the Land in violation of any applicable federal, state, or local law, statute,
Mortgagee and the Mortgagor may at any time and from time to time enter into a supplemental ordinance, or regulation (“Law”). The Mortgagor has no knowledge that any Hazardous Substance
mortgage on the conditions and in the manner set forth in Section 11.04 of the Indenture and Section or solid wastes have been illegally disposed of or otherwise illegally or released on or about the
11.05 of the Indenture. Mortgaged Properties;

25 26

(e) except as disclosed to the Mortgagee in writing, the Mortgaged Properties do not SECTION 11.3 Site Assessments. Upon written direction by the Mortgagee (by its
contain lead based paint, asbestos, urea-formaldehyde foam insulation, or any other chemical, officers, employees and agents) at any time and from time to time (not more than once each calendar
material, or substance exposure to which may or could pose a health hazard whether or not the year unless an environmental condition is reported or found to exist on the Mortgaged Properties in
substance is prohibited, limited, or regulated by any governmental authority; and which event no limit shall apply) shall contract for the services of persons or entities (the “Site
Reviewers”) to perform environmental site assessments (“Site Assessments”) on all or any part of the
(f) the use which the Mortgagor makes or intends to make of the Mortgaged Properties Mortgaged Properties to determine the existence of any environmental condition which under any
will not result in the illegal manufacturing, treatment, refining, transportation, generation, storage, Applicable Environmental Law might result in any liability, cost or expense to the owner, occupier or
disposal, or other release or presence of any Hazardous Substance or solid waste on or to the operator of any of the Mortgaged Properties. The Site Reviewers are authorized to enter upon all or
Mortgaged Properties. For purposes of this Article, the terms “Hazardous Substance” and “release” any part of the Mortgaged Properties to conduct Site Assessments during normal business hours upon
shall have the respective meanings specified in CERCLA, and the terms “solid waste” and reasonable prior notice. The Site Reviewers are further authorized to perform both above and below
“disposal” (or “disposed”) shall have the respective meanings specified in RCRA, provided, in the the ground testing for environmental damage or the presence of Hazardous Substances on any of the
event either CERCLA or RCRA is amended so as to broaden any meaning of any term defined Mortgaged Properties and such other tests on or of any of the Mortgaged Properties as the Site
thereby, such broader meaning shall apply subsequent to the effective date of such amendment, and Reviewers, the Mortgagee may deem necessary. The Mortgagor agrees to supply to the Site Reviewers
provided, further, to the extent that the laws of the State establish a meaning for “hazardous and the Mortgagee such historical and operational information regarding the Mortgaged Properties as
substance,” “release,” “solid waste,” or “disposal” which is broader than that specified in either may be reasonably requested to facilitate the Site Assessments and will make available for meetings
CERCLA or RCRA, such broader meaning shall apply; provided, further, that the term “Hazardous with the Site Reviewers appropriate personnel having knowledge of such matters. The results of Site
Substance” shall also include those listed in the U.S. Department of Transportation Table (49 Assessments shall be furnished to the Mortgagor upon request. The cost of performing Site
C.F.R. 172.101) and amendments thereto from time to time. Assessments shall be paid by the Mortgagor.

The foregoing representations, covenants, and warranties are in addition to, and in no way limit the SECTION 11.4 Rights of the Mortgagee. Notwithstanding any other provision of this
representations, covenants, and warranties of the Mortgagor to the Mortgagee under the Loan Agreement. Mortgage to the contrary, the Mortgagee may first require, in the exercise of its sole and unlimited
As used in this Section 11.1, the term “Property Reports” shall mean (i) that certain Property Condition discretion, that it receive (a) a Site Assessment or other environmental report in form and substance
Report regarding 2232 SW 104th Street, Oklahoma City, OK, dated November 28, 2017, prepared by OGI satisfactory to it and (b) indemnification for all costs and expenses incurred in connection therewith,
Environmental LLC (the “Environmental Consultant”), Project No. OGI-17-187; (ii) that certain Phase I before the Mortgage is required to foreclose upon or take possession or title to any Mortgaged
Environmental Site Assessment regarding 2232 SW 104th Street, Oklahoma City, OK, dated November 20, Properties in connection with an Event of Default. Further, if the Mortgagee determines, in the
2017, prepared by the Environmental Consultant, Project No. OGI-17-187; and (iii) that certain Zoning exercise of its sole and unlimited discretion, that it does not desire to become the owner of, or take
Analysis Report related to 2232 SW 104th Street, Oklahoma City, OK, dated November 29, 2017, prepared possession of such real property or improvements thereon, in its capacity as Mortgagee, the Mortgagee
by AEI Consultants, Project No. 380523; copies of which Property Reports have been provided to the shall not be required to proceed with such foreclosure or to take possession, and shall give written
Mortgagee prior to the date hereof. notice of such determination to the Issuer. If the Controlling Holders nonetheless desire to proceed
with foreclosure and so notify the Mortgagee in writing, the Mortgagee may resign, and such
SECTION 11.2 Notices; Proceedings. The Mortgagor shall immediately advise the resignation shall become effective upon the appointment of a successor trustee in accordance with the
Mortgagee in writing of (a) any governmental or regulatory actions instituted or threatened under any provisions of the Indenture. THE MORTGAGEE SHALL HAVE NO OBLIGATION TO INDEMNIFY OR
Applicable Environmental Law affecting all or any part of or any interest in the Mortgaged Properties, OTHERWISE COMPENSATE ANY SUCH SUCCESSOR MORTGAGEE FOR ANY LOSS, COST, OR
(b) all claims made or threatened by any third party against the Mortgagor or the Mortgaged Properties EXPENSE ARISING OUT OF ANY SUCH FORECLOSURE OR OTHER MATTER, AND IF ANY SUCH
relating to damage, contribution, cost recovery, compensation, or loss or injury resulting from any SUCCESSOR MORTGAGEE REQUESTS SUCH INDEMNIFICATION, THE BONDHOLDERS SHALL HAVE
Hazardous Substance, (c) the discovery of any occurrence or condition on any real property adjoining THE SOLE RESPONSIBILITY FOR PROVIDING SUCH INDEMNIFICATION.
or in the vicinity of the Mortgaged Properties that could cause the Mortgaged Properties to be classified
in a manner which may support a claim under any Applicable Environmental Law, and (d) the ARTICLE XII
discovery of any occurrence or condition on any part of the Mortgaged Properties or any real property
adjoining or in the vicinity of the Mortgaged Properties which could subject the Mortgagor or any part MISCELLANEOUS
of the Mortgaged Properties to any limitations or restrictions on the ownership, occupancy,
transferability or use thereof. The Mortgagee may elect (but shall not be obligated) to join and SECTION 12.1 Severability. If any provision of this Mortgage is held to be illegal,
participate in any settlements, remedial actions, legal proceedings or other actions initiated in invalid, or unenforceable under present or future laws, such provision shall be fully severable and shall
connection with any claims or responses under any Applicable Environmental Law and to have its not invalidate this Mortgage, and the remaining provision of this Mortgage shall remain in full force
reasonable attorneys’ fees relating to such participation paid by the Mortgagor. At its sole cost and and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance
expense, the Mortgagor agrees to promptly and completely cure and remedy every existing and future from this Mortgage.
violation of an Applicable Environmental Law occurring on or with respect to any part of the
Mortgaged Properties and to promptly remove all Hazardous Substances now or hereafter in, on or SECTION 12.2 Captions and Titles. All article, section and subsection titles or captions
under all or any part of the Mortgaged Properties and to dispose of the same as required by Applicable contained in this Mortgage or in any schedule or exhibit hereto are for convenience only and shall not
Environmental Law(s). be deemed a part of this Mortgage and shall not affect the meaning or interpretation of this Mortgage.

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 SECTION 12.3 Usury Savings Clause. The Mortgagor and the Mortgagee specifically custody of a nationally recognized overnight delivery service, such as Federal Express Corporation,
intend and agree to limit contractually the amount of interest payable under this Mortgage, the Secured addressed to such party at the address herein specified. Any notice given in the above manner shall
Obligations, and all other instruments and agreements related hereto and thereto to the maximum be deemed effective (i) if given by mail, three days after its deposit into the custody of the U.S. postal
amount of interest lawfully permitted to be charged under applicable law. Therefore, none of the terms service (except as to the Mortgagee for whom notice shall be effective only upon receipt); or (ii) if
of this Mortgage, the Secured Obligations, or any instrument pertaining to or relating to this Mortgage employing any other method, upon receipt. The addresses for notices for the Mortgagee and the
or the Secured Obligations shall ever be construed to create a contract to pay interest at a rate in excess Mortgagor under this Mortgage and for all notices hereunder shall be as follows:
of the maximum rate permitted to be charged under applicable law, and neither the Mortgagor nor any
other party liable or to become liable hereunder, under the Secured Obligations, or under any other If to the Mortgagee: UMB Bank, N.A.
instruments and agreements related hereto and thereto shall ever be liable for interest in excess of the 5910 N Central Expressway, Suite 1900
amount determined at such maximum rate, and the provisions of this paragraph shall control over all Dallas, Texas 75206
other provisions of this Mortgage, the Secured Obligations, or of any other instrument pertaining to or Attn: Israel Lugo
relating to the transactions herein contemplated. If any amount of interest taken or received by the Telephone: (214) 389-5947
Mortgagee shall be in excess of said maximum amount of interest which, under applicable law, could Email: [email protected]
lawfully have been collected by the Mortgagee incident to such transactions, then such excess shall be
deemed to have been the result of a mathematical error by all parties hereto and shall, at the election If to the Mortgagor: Leading Life Senior Living, Inc.
of the Mortgagee, either be applied as credit against the then unpaid principal amount of the Secured 6370 Lyndon B. Johnson Freeway, Suite 276
Obligations or refunded promptly to the party paying such amount. All amounts paid or agreed to be Dallas, TX 75240
paid in connection with such transactions which would under applicable law be deemed “interest” Attn: Robert Mosteller, Chairman
shall, to the extent permitted by such applicable law, be amortized, prorated, allocated, and spread Telephone: (469) 371-0446
throughout the stated term of the Secured Obligations. As used in this Section, (a) “applicable law” Email: [email protected]
means that law in effect from time to time which lawfully permits the charging and collection of the
highest permissible lawful, nonusurious rate of interest on the transactions herein contemplated, Copy to: Bracewell LLP
including laws of the State and of the United States of America; and (b) “maximum rate,” as used in 1445 Ross Ave., Suite 3800
this paragraph, means, with respect to each portion of the Secured Obligations, the maximum lawful, Dallas, TX 75202
nonusurious rate of interest (if any) which under applicable law the Mortgagee is permitted to charge Telephone: (214) 758-1079
from time to time with respect to such portion of the Secured Obligations. Attn: Jonathan Leatherberry
Email: [email protected]
SECTION 12.4 Additional Security. The Mortgagor agrees that no other security, now
existing or hereafter taken, for the Secured Obligations shall be impaired or affected in any manner by If to the Issuer: The Oklahoma Development Finance Authority
the execution hereof; no security subsequently taken by any holder of the Secured Obligations shall 9220 North Kelley Avenue
impair or affect in any manner the security given by this Mortgage; all security for the payment of the Oklahoma City, OK 73131
Secured Obligations shall be taken, considered, and held as cumulative; and the taking of additional Telephone: (405) 842-1145
security shall at no time release or impair any security by endorsement or otherwise previously given. Attn: Michael Davis, President
The Mortgagor further agrees that any part of the security herein described may be released without Email: [email protected]
in anywise altering, varying, or diminishing the force, effect, or lien of this Mortgage, or of any
renewal or extension of said lien, and that this Mortgage shall continue as a first lien, assignment, and Copy to: Skarky Law Firm, PLLC
security interest on all the Mortgaged Properties (subject however to Permitted Encumbrances) not P.O. Box 20370
expressly released until all Secured Obligations are fully discharged and paid. Oklahoma City, OK 73156
Telephone: (405) 641-4411
SECTION 12.5 Suit Not an Election of Remedies. The filing of a suit to foreclose any Attn: Earl A. Skarky
lien, assignment, or security interest under this Mortgage either on any matured portions of the Secured Email: [email protected]
Obligations or for all Secured Obligations shall never be considered an election so as to preclude
foreclosure under any power of sale herein contained after dismissal of the suit. SECTION 12.7 Extension, Rearrangement or Renewal of Secured Obligations. It is
expressly agreed that any of the Secured Obligations at any time secured hereby may be from time to
SECTION 12.6 Notices. Any notice required or permitted to be given hereunder by one time extended for any period, rearranged, or renewed, and that any part of the security herein
party to another shall be in writing and shall be given, except where a particular method is otherwise described, or any other security for the Secured Obligations may be waived or released without in
specified in this Mortgage, using one or more of the following methods: (a) delivered in person to the anywise altering, varying or diminishing the force, effect, or lien of this Mortgage as to unaffected
address set forth below for the party to whom the notice is given; (b) placed in the United States mail property.
with postage prepaid, certified or registered mail return receipt requested, properly addressed to such
party at the address hereinafter specified; (c) transmitted by telegram or by telecopy (with the original SECTION 12.8 Governing Law. Tthe parties hereto agree that this Mortgage shall be
to be sent the same day by nationally recognized overnight delivery service); or (d) deposited into the construed according to the laws of the State.
29 30

SECTION 12.9 Amendments; Waivers. No amendment or waiver of any provision of mineral rights, the Mortgagee shall receive the entire consideration to be paid for such lease or grant
this Mortgage, nor consent to any departure by the Mortgagor therefrom, shall in any event be effective of mineral rights, with the same to be applied upon the Indebtedness hereby secured; provided,
unless the same is consented to in writing by the Mortgagee and is in writing and signed by the however, that the acceptance of such consideration shall in no way impair the lien of this Mortgage on
Mortgagor and the Mortgagee, and is accomplished in accordance with Article 10, and then such the entire Mortgaged Properties and all rights therein, including all mineral rights.
waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. SECTION 12.13 Negation of Partnership. Nothing contained in the Documents is
intended to create any partnership, joint venture, or association between the Mortgagor and the
SECTION 12.10 Assignment. This Mortgage shall be binding upon the Mortgagor and Mortgagee, or in any way make the Mortgagee a co-principal with the Mortgagor with reference to
its successors and assigns and shall inure to the benefit of the Mortgagee and its respective successors, the Mortgaged Properties, and any inferences to the contrary are hereby expressly negated.
transferees, and assigns, and no person other than the Mortgagee and its successors, transferees, and
assigns shall under any circumstances be deemed to be a beneficiary of any provision of this Mortgage. SECTION 12.14 Submission to Jurisdiction. Without limiting the right of the Mortgagee
Without limiting the generality of the foregoing, the Mortgagee may assign, grant a security interest to bring any action or proceeding against the undersigned or its property arising out of or relating to
in, or otherwise transfer this Mortgage to any other person or entity, and such other person or entity the Secured Obligations (an “Action”) in the courts of other jurisdictions, the Mortgagor hereby
shall thereupon become vested with all the benefits in respect thereof granted to the Mortgagee herein irrevocably submits to the jurisdiction of an Oklahoma court in Cleveland County or any federal court
or otherwise. The Mortgagor agrees that the assignments made of this Mortgage shall not subject the sitting in the Western District of Oklahoma, and the Mortgagor hereby irrevocably agrees that any
Mortgagee to or transfer or pass or in any way affect or modify any obligation of the Mortgagor under Action may be heard and determined in such Oklahoma state court or in such federal court.
the Loan Agreement, the Bonds, or this Mortgage, it being understood and agreed that all such
obligations of the Mortgagor shall be and remain enforceable only against the Mortgagor. SECTION 12.15 Business or Commercial Purpose. The Mortgagor warrants that the
extension of credit evidenced by the Bonds secured hereby is solely for business or commercial
SECTION 12.11 Further Acts. The Mortgagor shall do and perform all acts necessary to purposes, other than agricultural purposes
keep valid and effective the charges and lien hereof, to carry into effect its objective and purposes, and
to protect (a) the position of the lawful Holders of the Bonds and (b) the other Secured Obligations. SECTION 12.16 Trustee. The Mortgagee is acting in its capacity as Trustee under the
Promptly upon request by the Mortgagee and at the Mortgagor’s expense, the Mortgagor shall execute, Indenture. In the event any provision of this Mortgage requires the approval, consent, or action by the
acknowledge, and deliver to the Mortgagee such other and further instruments and do such other acts Mortgagee, the Mortgagee must undertake to grant or deny such approval or consent, or perform such
as in the reasonable opinion of the Mortgagee that may be necessary or appropriate to (i) grant to the action, only subject to and as directed by the terms of the Indenture, and may, in the Mortgagee’s sole
Mortgagee the highest available perfected lien on all of the Mortgaged Properties; (ii) grant to the discretion, require direction of the Controlling Owners prior to undertaking any such approval,
Mortgagee, to the fullest extent permitted by applicable law, the right to foreclose on the Mortgaged consent, or action.
Properties nonjudicially; (iii) correct any defect, error, or omission which may be discovered in the
contents of this instrument or any other Document; (iv) identify more fully and subject to the liens, THE LOAN AGREEMENT, THIS MORTGAGE, THE BONDS AND THE INDENTURE, TOGETHER
encumbrances, and security interests and assignments created hereby any property intended by the WITH THE OTHER DOCUMENTS AND INSTRUMENTS CREATING, EVIDENCING, AND SECURING THE
terms hereof to be covered hereby (including, without limitation, any renewals, additions, SECURED OBLIGATIONS, REPRESENT THE FINAL AGREEMENT OF THE PARTIES HERETO AND THERETO
substitutions, replacements, or appurtenances to the Mortgaged Properties); (v) assure the first priority AND MAY NOT BE CONTRADICTED BY EVIDENCE OR ORAL AGREEMENTS OF SUCH PARTIES, WHETHER
hereof and thereof, subject however to Permitted Encumbrances; and (vi) otherwise effect the intent MADE BEFORE, ON OR AFTER THE DATE OF THIS MORTGAGE. THERE ARE NO UNWRITTEN ORAL
of this Mortgage. Without limiting the generality of the foregoing, the Mortgagor shall promptly and, AGREEMENTS BETWEEN SUCH PARTIES.
insofar as not contrary to applicable law, at the Mortgagor’s own expense, record, rerecord, file, and
refile in such offices, as such times and as often as may be necessary, this instrument, additional A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF
mortgages and deeds of trust, and every other instrument in addition or supplemental hereto, including SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY
applicable financing statements, as may be necessary to create, perfect, maintain, and preserve the AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
liens, encumbrances, and security interests intended to be created hereby and the rights and remedies DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.
of the Mortgagee hereunder. Upon request by the Mortgagee, the Mortgagor shall supply evidence of
fulfillment of each of the covenants herein contained concerning which a request for such evidence
has been made. [The remainder of this page intentionally left blank]

SECTION 12.12 Mineral Interests. The Mortgagor agrees that the making of any oil, gas
or mineral lease or the sale or conveyance of any mineral interest or right to explore for minerals under,
through or upon the Mortgaged Properties would impair the value of the Mortgaged Properties as
security for payment of the Indebtedness and that the Mortgagor shall have no right, power or authority
to lease the Mortgaged Properties, or any part thereof, for oil, gas or other mineral purposes, or to
grant, assign or convey any mineral interest of any nature, or the right to explore for oil, gas and other
minerals, without first obtaining from the Mortgagee express written permission, which permission
shall not be valid until recorded. Whether or not the Mortgagee shall consent to such lease or grant of
31 32

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

ADDRESS OF MORTGAGOR: MORTGAGOR: Legal Description of the Land

6370 Lyndon B. Johnson Freeway LEADING LIFE SENIOR LIVING, INC. Property Description
Suite 276 a Texas non-profit corporation
Dallas, TX 75240 A tract of land lying in the Northeast Quarter (NE/4) of Section 7, Township 10 North, Range 3 West of
the Indian Base and Meridian, City of Oklahoma City, Cleveland County, State of Oklahoma, according to
the United States government survey thereof, and being more particularly described as follows:
By:
Name: Commencing at the Northeast corner of said Northeast Quarter of Section 7; thence South 88°31’27” West
Title: along the North line of said Northeast Quarter, a distance of 840.07 feet to the point of beginning;

Thence South 01°28’33” East a distance of 443.50 feet to a point on the Northerly line of the plat of
Greenbriar Kingswood Section 3, an addition to the City of Oklahoma City, according to the plat thereof
recorded in Book 10 of Plats, Page 70, Cleveland County records; thence South 59°55’56” West along said
Northerly line a distance of 152.67 feet to a point on the Northerly line of the plat of Kingswood Estates,
THE STATE OF TEXAS § an addition to the City of Oklahoma City, according to the plat thereof recorded in Book 16 of Plats, Page
§ 51, Cleveland County records; thence North 81°21’25” West along said Northerly line a distance of 219.35
feet to a point on the East line of the plat of St. Andrews Square, an addition to the City of Oklahoma City,
COUNTY OF DALLAS § according to the plat thereof recorded in Book 16 of Plats, Page 52, Cleveland County records; thence North
01°28’33” West, along said East line a distance of 478.02 feet to a point on the North line of the Northeast
Quarter of Section 7; thence North 88°31’27” East along said North line, a distance of 350 feet to the point
This instrument was acknowledged before me this ____ day of __________________, 2017, by of beginning.
__________________________, as _________________________ of Leading Life Senior Living, Inc., a
Texas non-profit corporation. .

(SEAL)

Notary Public in and for the State of Texas

(Printed Name of Notary)

My commission expires:

S-1 A-1

EXHIBIT B 13. The following matters shown on the Survey:

A. Encroachment of fences onto and off of subject property;

Liens and Other Encumbrances
B. Overhead power line outside easement area along the Northerly boundary of subject
1. Fees, taxes and assessments made by any taxing authority for the year 2018 which are not property; and
yet ascertainable, due or payable, and all subsequent years.
C. Twenty (20) foot utility easement per plat of Greenbriar Kingswood Section 3,
2. All interest in and to all water, oil, gas, coal, asphalt, metallic ores or other minerals in and along the Southerly portion of subject property.
underlying the land, together with all rights, privileges, and estates relating thereto.

3. Rights of parties in possession as residential tenants only.

4. Seventeen (17) foot easement as set out in Easement to City of Oklahoma City recorded in
Book 1520, Page 78, as shown on that certain survey prepared by Buckley Blew, PLS No.
1681, Blew & Associates, P.A., dated December 6, 2017 (the “Survey”).

5. Variable width Right of Way Agreement to Conoco, Inc., recorded in Book 1868, Page 91,
as shown on the Survey.

6. Conveyance of Water Rights to The West Aspen Company, a Colorado corporation,

recorded in Book 693, Page 577, as further conveyed to the City of Mustang, Oklahoma, a
municipal corporation, by Conveyance of Water Rights and Agreement recorded in Book
1158, Page 15.

7. Seventeen (17) foot easement as set out in Easement for Underground Facilities to
Southwestern Bell Telephone Company recorded in Book 1535, Page 338, as shown on
the Survey.

8. Right of Way Agreement to Sun Exploration and Production Company recorded in Book
1791, Page 254, as assigned to Sun Operating Limited Partnership, a Delaware partnership,
by Assignment recorded in Book 1931, Page 155, as shown on the Survey.

9. Right of Way Agreement to Sun Exploration and Production Company recorded in Book
1898, Page 970, and Right of Way Agreement to Sun Exploration and Production Company
recorded in Book 1898, Page 972, as assigned to Sun Operating Limited Partnership, a
Delaware partnership, by Assignment recorded in Book 2064, Page 437, as shown on the
Survey.

10. Seventeen (17) foot easement as set out in Easement to City of Oklahoma City recorded in
Book 521, Page 277, as shown on the Survey.

11. Variable width Permanent Easement to City of Oklahoma City recorded in Book 5682,
Page 317, as shown on the Survey.

12. Thirty-three (33) foot section line road right of way pursuant to 43 U.S.C. Sec. 1095, as
shown on the Survey.

B-1 B-2

B-65
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 APPENDIX C

PROPOSED FORM OF OPINION OF BOND COUNSEL

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December 20, 2017

THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY

SENIOR LIVING REVENUE BONDS
(LEADING LIFE SENIOR LIVING, INC. – AUTUMN LEAVES PROJECT)
SERIES 2017

WE HAVE ACTED AS BOND COUNSEL for The Oklahoma Development Finance Authority
(the "Issuer") solely for the purpose of rendering an opinion as to the validity of the Issuer's Senior Living
Revenue Bonds (Leading Life Senior Living, Inc. – Autumn Leaves Project) Series 2017A-1 (the "Series
2017A-1 Bonds"), Taxable Series 2017A-2 (the "Taxable Series 2017A-2 Bonds") and Second Tier Series
2017B (the "Series 2017B Bonds" and, together with the Series 2017A-1 Bonds and the Taxable Series
2017A-2 Bonds, the "Series 2017 Bonds") under Oklahoma law, and the status of the interest on the Series
2017A-1 Bonds and Series 2017B Bonds (the "Tax-Exempt Bonds") under federal income tax law, and for
no other purpose. In such capacity, we do not take responsibility for any matters relating to such transaction
except as covered below, and specifically we have not been requested to examine, and have not investigated
or verified any records, material or matters relating to the financial condition or capacity of the Issuer or
Leading Life Senior Living, Inc. (the "Obligor"), a Texas nonprofit corporation, or any matter relating to the
Obligor, other than as stated below, or the disclosure thereof in connection with the sale of the Series 2017
Bonds, and we express no opinion with respect thereto.

THE SERIES 2017 BONDS are issued pursuant to a Trust Indenture dated as of December 1, 2017
(the "Indenture") between the Issuer and UMB Bank, N.A. (the "Trustee").

WE HAVE EXAMINED the validity of the Series 2017 Bonds bearing interest until maturity or
redemption at the interest rates set forth in the Indenture. Interest on the Series 2017 Bonds is payable and
the Series 2017 Bonds mature on the dates set forth in the Indenture and the Series 2017 Bonds are subject
to optional and mandatory redemption prior to maturity in accordance with the terms and conditions stated
on the face of the Series 2017 Bonds. The Series 2017 Bonds are issuable only as fully registered bonds in
the denominations described in the Indenture.

WE HAVE EXAMINED certified copies of the proceedings of the Board of Directors of the Issuer;
certificates and resolutions of the Obligor; the opinion of Bracewell LLP, Counsel to the Obligor, upon which
we rely to the extent permitted by the terms thereof; and other instruments authorizing and relating to the
issuance of the Series 2017 Bonds, including one of each series of the executed Series 2017 Bonds.

BASED ON SUCH EXAMINATION, IT IS OUR OPINION that the Resolution of the Issuer
authorizing the Series 2017 Bonds (the "Bond Resolution") has been duly and lawfully adopted by, and
constitutes a valid and binding obligation of, the Issuer, and that the Series 2017 Bonds have been duly
authorized, issued and delivered in accordance with Oklahoma law and constitute valid and binding
obligations of the Issuer. The principal of, redemption premium, if any, and interest on the Series 2017 Bonds
are payable from, and secured by a pledge and assignment of, the revenues derived by the Issuer from the
Obligor pursuant to a Loan Agreement dated as of December 1, 2017 (the "Loan Agreement") among the
Issuer, the Trustee and the Obligor. The Obligor has agreed and is obligated to the Issuer to make the
payments due under the Loan Agreement to the Trustee under the Indenture for deposit into the Bond Funds
or the Debt Service Reserve Funds established by the Indenture in amounts sufficient to pay and redeem, or
provide for the payment and redemption of, the principal of, redemption premium, if any, and interest on the
applicable Series 2017 Bonds, when due, as required by the Indenture. We do not, however, express any
opinion nor make any comment with respect to the sufficiency of the security for or the marketability of the
Series 2017 Bonds.

 
 

IT IS OUR OPINION that the Loan Agreement has been duly and lawfully authorized, executed
and delivered by, and is a valid and binding obligation of, the Issuer. For purposes of rendering the opinion
expressed in this paragraph, we have assumed that the Loan Agreement has been duly and lawfully
authorized, executed and delivered by the Obligor and is a valid and binding obligation of the Obligor,
enforceable in accordance with its terms and conditions.

THE SERIES 2017 BONDS ARE FURTHER SECURED BY the Indenture whereunder the Trustee
is custodian of the funds established by the Indenture and is obligated to enforce the rights of the Issuer and
the owners of the Series 2017 Bonds secured by the Indenture and to perform other duties, in the manner and
under the conditions stated in the Indenture; and it is our further opinion that the Indenture has been duly and
lawfully authorized, executed and delivered by the Issuer and is a valid and binding agreement of the Issuer.

THE SERIES 2017 BONDS are further secured by promissory notes issued by the Obligor (the
"Notes") pursuant to the Loan Agreement. The Notes are secured by each respective Mortgage with Power
of Sale and Security Agreement, each dated as of December 1, 2017 (collectively, the "Mortgage"), each by
the Obligor to the trustee named therein, for the benefit of the Trustee. Counsel to the Obligor has rendered
an opinion with respect to the validity and enforceability of the Notes and the Mortgage. We have not been
requested to render, nor have we rendered, any opinion on such matters.

THE OWNERS OF THE SERIES 2017 BONDS shall never have the right to demand payment
thereof out of any funds raised or to be raised by taxation, and the Series 2017 Bonds are payable solely from
the sources described in the Indenture.

THE INDENTURE PERMITS, with certain exceptions as therein provided, the amendment thereof
at any time by the Issuer with the consent of the registered owners of not less than a majority in aggregate
principal amount of all bonds at the time outstanding thereunder.

IN OUR OPINION, except as discussed below for federal income tax purposes, the interest on the
Tax-Exempt Bonds is excludable from the gross income of the owners thereof for federal income tax
purposes under the statutes, regulations, published rulings and court decisions existing on the date of this
opinion. We are further of the opinion that the Tax-Exempt Bonds are not "specified private activity bonds"
(other than "qualified 501(c)(3) bonds") and that, accordingly, interest on the Tax-Exempt Bonds will not be
included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code
of 1986 (the "Code").

IN EXPRESSING OUR OPINION as to the exclusion of interest on the Tax-Exempt Bonds from
the gross income of the owners as described above, we have relied upon, and assumed to be correct, (i) the
representations, covenants and agreements of the Issuer and the Obligor in the Loan Agreement, and
information furnished by and on behalf of the Issuer and the Obligor and particularly certificates and
representations of officers and representatives of the Issuer and the Obligor with respect to certain material
facts that are solely within their knowledge relating to the proposed use of the proceeds of the Tax-Exempt
Bonds and the organization and operation of the Obligor that affect such exclusion and (ii) an opinion of
Counsel to the Obligor, upon which we rely, to the effect that the Obligor is an organization described in
section 501(c)(3) of the Code and exempt from taxation under section 501(a) of the Code. We call your
attention to the fact that failure by the Issuer or the Obligor to comply with such representations and covenants
may cause the interest on the Tax-Exempt Bonds to become includable in gross income of owners thereof
retroactively to the date of issuance of the Tax-Exempt Bonds.

IT IS FURTHER OUR OPINION that, pursuant to Title 74, Oklahoma Statutes 2016, Section
5062.11, as amended, the Series 2017 Bonds and the income therefrom are exempt from all taxation in the
State of Oklahoma, except for inheritance, estate or transfer taxes.

C-2
 

WE CALL YOUR ATTENTION TO THE FACT that the interest on tax-exempt obligations, such
as the Tax-Exempt Bonds, will be included in a corporation's alternative minimum taxable income for
purposes of determining the alternative minimum tax imposed on corporations by section 55 of the Code.

EXCEPT AS STATED ABOVE, we express no opinion as to any other federal, state or local tax
consequences of acquiring, carrying, owning or disposing of the Tax-Exempt Bonds, including the amount,
accrual or receipt of interest on the Tax-Exempt Bonds. In particular, but not by way of limitation, we express
no opinion with respect to the federal, state or local tax consequences arising from the enactment of any
pending or future legislation.

OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Such opinions
are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement
our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any
changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee
of result and are not binding on the Internal Revenue Service (the "Service"); rather, such opinions represent
our legal judgment based upon our review of existing law and in reliance upon the representations and
covenants referenced above that we deem relevant to such opinions. The Service has an ongoing audit
program to determine compliance with rules that relate to whether interest on state or local obligations is
includable in gross income for federal income tax purposes. No assurance can be given whether or not the
Service will commence an audit of the Tax-Exempt Bonds. If an audit is commenced, in accordance with its
current published procedures the Service is likely to treat the Issuer as the taxpayer. We observe that each
of the Issuer and the Obligor has covenanted not to take any action, or omit to take any action within its
control, that if taken or omitted, may result in the treatment of interest on the Tax-Exempt Bonds as includable
in gross income for federal income tax purposes.

THE OPINIONS contained herein are limited to the extent that (a) enforceability of the Series 2017
Bonds, the Bond Resolution, the Indenture and the Loan Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors' rights or remedies generally and
(b) a particular court may refuse to grant certain equitable remedies, including, without limitation, specific
performance, with respect to any of the provisions of the Series 2017 Bonds, the Bond Resolution, the
Indenture and the Loan Agreement.

Respectfully,

C-3
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 APPENDIX D

FINANCIAL FEASIBILITY STUDY

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 Leading Life Senior Living, Inc.

Financial Feasibility Study

Five Years Ending December 31, 2021

Leading Life Senior Living, Inc.
Financial Feasibility Study
Five Years Ending December 31, 2021

TABLE OF CONTENTS
Independent Accountants' Examination Report ................................................................. D-1

Forecasted Financial Statements:

Forecasted Statements of Operations and Changes in Net Assets .................................. D-4
Forecasted Statements of Cash Flows............................................................................. D-5
Forecasted Statements of Financial Position .................................................................. D-6
Forecasted Financial Ratios ............................................................................................ D-7
Forecasted Financial Ratios – Annual Debt Service – Per Series .................................. D-8

Summary of Significant Forecast Assumptions and Accounting Policies

Basis of Presentation ....................................................................................................... D-9
Background ..................................................................................................................... D-9
Purchase and Sale Agreement ...................................................................................... D-12
Management of the Communities ................................................................................ D-12
Affordability Covenant ................................................................................................. D-14
Summary of Financing.................................................................................................. D-15
Company Fair Value ..................................................................................................... D-16
Description of the Resident Agreement ........................................................................ D-17
Regulatory .................................................................................................................... D-19
Industry Overview ........................................................................................................ D-21
Descriptions of the Communities and Characteristics of the Market Areas ................. D-22
The Edmond Community.............................................................................................. D-30
The Southwest OKC Community ................................................................................. D-37
Summary of Significant Accounting Policies ............................................................... D-43
Memory Care Revenues................................................................................................ D-44
Summary of Operating Expense Assumptions ............................................................. D-46
Assets Limited as to Use ............................................................................................... D-47
Property and Equipment and Depreciation Expense .................................................... D-48
Debt and Interest Expense ............................................................................................ D-49
Consulting Agreement .................................................................................................. D-51
Current Assets and Current Liabilities.......................................................................... D-51

Independent Accountant’s Report on Supplemental Information ................................... D-52

 INDEPENDENT ACCOUNTANTS’ EXAMINATION REPORT

Board of Trustees
Leading Life Senior Living, Inc.
Dallas, Texas

We have prepared a financial feasibility study of the plans of Leading Life Senior Living, Inc.
(the “Corporation” or “Borrower”) to acquire two existing memory care communities in
Oklahoma.

The Corporation is a Texas nonprofit corporation formed for the sole purpose of owning and
operating facilities for the growing elderly population. The Corporation plans to acquire two
memory care communities: Autumn Leaves of Edmond and Autumn Leaves of Southwest
Oklahoma City providing for a total of 86 memory care units (100 licensed memory care beds),
collectively defined herein as the “Communities”.

The feasibility study was undertaken to evaluate the Corporation’s ability to generate sufficient
funds to meet its operating expenses, working capital needs and other financial requirements,
including the debt service requirements associated with the proposed issuance in multiple series
of bonds in the aggregate principal amount of $30,235,000 of The Oklahoma Development
Finance Authority Senior Living Revenue Bonds (Leading Life Senior Living, Inc. – Autumn
Leaves Project), Series 2017 (collectively, the “Series 2017 Bonds”).

Management of the Corporation plans to engage the existing operating manager TLG Family
Management, LLC (the “Operating Manager”) as the manager during the forecast period.
Management of the Corporation and the Operating Manager are collectively defined as
“Management”.

As provided by the Corporation’s underwriter Piper Jaffray (the “Underwriter”), the Series 2017
Bonds are assumed to include rated and nonrated bonds that will be both tax-exempt and taxable
structured as term bonds, with average yields ranging from 3.25 to 7.00 percent per annum.

The proceeds from the Series 2017 Bonds and from the Corporation are assumed to be used as
follows:
x To pay all acquisition costs of the Communities;
x To fund various debt service reserve funds for the Series 2017 Bonds;
x To fund an Operating Fund in the approximate amount of $750,000; and
x To pay costs associated with the issuance of the Series 2017 Bonds.

D-1
Our procedures included analysis of:
x The Corporation’s objectives, timing and financing;
x The Communities’ history;
x Future demand for the Communities’ services, including consideration of the following:
 Socioeconomic and demographic characteristics of the Communities’ defined market
areas;
 Locations, capacities and competitive information pertaining to other existing and
planned facilities in each market area; and
 Forecasted occupancy and utilization levels of the Communities;
x Acquisition costs of the Communities, debt service requirements and estimated financing
costs;
x Staffing requirements, salaries and wages, related fringe benefits and other operating
expenses;
x Anticipated monthly fees and per diem charges for each resident of the Communities;
x Sources of other operating and non-operating revenues; and
x Revenue/expense/volume relationships.

The accompanying forecast for each of the years for the five year period ending December 31,
2021 is based on assumptions that were provided by, or reviewed with and approved by,
Management. The forecast includes the following financial statements and the related summary
of significant forecast assumptions and accounting policies:
x Forecasted Statements of Operations and Changes in Net Assets;
x Forecasted Statements of Cash Flows;
x Forecasted Statements of Financial Position; and
x Forecasted Financial Ratios.

We have examined the accompanying forecast of the Corporation based on the guidelines for the
presentation of a forecast by the American Institute of Certified Public Accountants (“AICPA”).
Management is responsible for preparing and presenting the forecast in accordance with the
guidelines for the presentation of a forecast established by the AICPA. Our responsibility is to
express an opinion on the forecast based on our examination.

Our examination was conducted in accordance with attestation standards established by the
AICPA. Those standards require that we plan and perform the examination to obtain reasonable
assurance about whether the forecast is presented in accordance with the guidelines for the
presentation of a forecast established by the AICIPA, in all material respects. An examination
involves performing procedures to obtain evidence about the forecast. The nature, timing, and
extent of the procedures selected depend on our judgement, including an assessment of the risks
of material misstatement of the forecast, whether due to fraud or error. We believe that the
evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.

Legislation and regulations at all levels of government have affected and may continue to affect
the operations of retirement communities. The forecast is based upon legislation and regulations
currently in effect. If future legislation or regulations related to the Corporation’s operations are

D-2
subsequently enacted, such legislation or regulations could have a material effect on future
operations.

Management’s forecast is based on the achievement and maintenance of occupancy levels and re-
occupancy of beds vacated by residents. We have not been engaged to evaluate the effectiveness
of Management, and we are not responsible for future marketing efforts and other Management
actions upon which actual results will depend.

The assumed interest rates, principal payments and other financing assumptions are described in
the section entitled “Summary of Significant Forecast Assumptions and Accounting Policies.” If
actual interest rates or principal payments are different from those assumed in this study, the
amount of the Series 2017 Bonds and associated debt service requirements would need to be
adjusted accordingly from those indicated in the forecast. If such interest rates and principal
payments are lower than those assumed, such adjustments would not adversely affect
Management’s forecast.

Our conclusions are presented below:

x In our opinion, the accompanying forecast is presented, in all material respects in

accordance with guidelines for presentation of a forecast established by the AICPA.

x In our opinion, the underlying assumptions are suitably supported and provide a reasonable
basis for Management’s forecast. However, there will usually be differences between the
forecasted and actual results, because events and circumstances frequently do not occur as
expected, and those differences may be material.

x The accompanying forecast indicates that sufficient funds could be generated to meet the
Corporation’s operating expenses, working capital needs and other financial requirements,
including the debt service requirements associated with the proposed Series 2017 Bonds,
during the forecast period. However, the achievement of any forecast is dependent upon
future events, the occurrence of which cannot be assured.

We have no responsibility to update this report for events and circumstances occurring after the
date of this report.

Atlanta, Georgia
December 7, 2017

D-3
 Leading Life Senior Living, Inc.
Forecasted Statements of Operations and Changes in Net Assets
Five Years Ending December 31, 2021
(In Thousands)

2017 2018 2019 2020 2021

Revenues:
Memory care $ - $ 6,315 $ 6,442 $ 6,571 $ 6,702
Other revenue - 99 101 103 105
Investment income - 23 45 52 49
Total revenues - 6,437 6,588 6,726 6,856

Expenses:
Payroll - 2,691 2,745 2,800 2,856
General and administrative - 280 286 292 298
Marketing - 133 136 139 142
Maintenance - 143 146 149 152
Utilities - 170 173 176 180
Culinary - 172 175 179 183
Activities - 18 18 18 18
Other operating - 132 135 138 141
Insurance - 104 106 108 110
Management fee - 321 376 434 442
Interest expense
Series 2017 Bonds - 1,355 1,330 1,293 1,257
Amortization of deferred financing costs - 82 82 82 82
Amortization of original issue discount - 18 18 18 18
Depreciation - 860 872 885 899
Total expenses - 6,479 6,598 6,711 6,778

Excess of Revenues over Expenses - (42) (10) 15 78

Other income
Gain on bargain purchase 940 - - - -

Change in net assets 940 (42) (10) 15 78

Net assets (deficit), beginning of year - 940 898 888 903

Net assets (deficit), end of year $ 940 $ 898 $ 888 $ 903 $ 981

See accompanying Summary of Significant Forecast Assumptions and Accounting Policies and
Independent Accountants’ Examination Report
D-4
 Leading Life Senior Living, Inc.
Forecasted Statements of Cash Flows
Five Years Ending December 31, 2021
(In Thousands)

2017 2018 2019 2020 2021

Cash flows from operating activities:
Change in net assets $ 940 $ (42) $ (10) $ 15 $ 78
Adjustments to reconcile change in net assets
to net cash provided by operating activities:
Depreciation - 860 872 885 899
Amortization of deferred financing costs - 82 82 82 82
Amortization of original issue discount - 18 18 18 18
Gain on bargain purchase price (940) - - - -
Net change in current assets and liabilities - (790) 3 24 2
Change in accrued interest - 670 (7) (29) (7)
Net cash provided by operating activities - 798 958 995 1,072

Cash flows from investing activities:

Acquisition cost (25,500) - - - -
Routine capital additions - (100) (115) (130) (145)
Change in assets limited as to use (991) (698) (453) 171 (514)
Net cash provided by (used in) investing activities (26,491) (798) (568) 41 (659)

Cash flows from financing activities:

Deferred financing costs (2,856) - - - -
Issuance of long-term debt - Series 2017A Bonds 17,565 - - - -
Issuance of long-term debt - Series 2017B Bonds 12,030 - - - -
Issuance of long-term debt - Series 2017C Bonds 640 - - - -
Original issue discount - Series 2017 Bonds (714) - - - -
Principal payments - Series 2017A Bonds - - (240) (245) (255)
Principal payments - Series 2017B Bonds - - (140) (150) (155)
Principal payments - Series 2017C Bonds - - (5) (5) -
Principal payments - Series 2017C Bonds (additional principal) - - - (630) -
Net cash provided by (used in) financing activities 26,665 - (385) (1,030) (410)

Change in cash and investments $ 174 $ - $ 5 $ 6 $ 3

Cash and investments, beginning of year - 174 174 179 185
Cash and investments, end of year $ 174 $ 174 $ 179 $ 185 $ 188

See accompanying Summary of Significant Forecast Assumptions and Accounting Policies and
Independent Accountants’ Examination Report
D-5
 Leading Life Senior Living, Inc.
Forecasted Statements of Financial Position
Five Years Ending December 31, 2021
(In Thousands)

Assets 2017 2018 2019 2020 2021

Current assets:
Cash and investments (of the Operating Account) $ 174 $ 174 $ 179 $ 185 $ 188
Accounts receivable, net - 176 179 183 186
Inventory - 20 20 21 21
Prepaid expenses - 116 118 121 123
Current portion of assets limited as to use - 863 863 839 840
Total current assets 174 1,349 1,359 1,349 1,358

Assets limited as to use:

Operating Fund 576 173 179 184 189
Debt Service Reserve Fund - Series 2017B 363 363 363 363 363
Debt Service Reserve Fund - Series 2017C (a) 52 52 52 - -
Bond Fund - interest - 670 663 634 627
Bond Fund - principal - 193 200 205 213
Surplus Fund (a) - 745 1,181 796 1,297
Operations and Maintenance Reserve Fund - 347 358 369 377
Insurance and Tax Escrow Fund - 9 9 9 9
Repair and Replacement Fund - - - 250 250
Total assets limited as to use 991 2,552 3,005 2,810 3,325
Less: current portion - (863) (863) (839) (840)
Total assets limited as to use, net 991 1,689 2,142 1,971 2,485
Property and equipment 26,440 26,540 26,655 26,785 26,930
Accumulated depreciation - (860) (1,732) (2,617) (3,516)
Property and equipment, net 26,440 25,680 24,923 24,168 23,414
Total assets $ 27,605 $ 28,718 $ 28,424 $ 27,488 $ 27,257

Liabilities and Net Assets

Current liabilities:
Accounts payable $ - $ 247 $ 252 $ 257 $ 262
Accrued expenses - 138 141 144 147
Accrued interest - Series 2017 Bonds - 670 663 634 627
Current portion of long-term debt - Series 2017A Bonds - 240 245 255 265
Current portion of long-term debt - Series 2017B Bonds - 140 150 155 160
Current portion of long-term debt - Series 2017C Bonds (a) - 5 5 - -
Total current liabilities - 1,440 1,456 1,445 1,461

Long-term debt - Series 2017A Bonds 17,565 17,325 17,080 16,825 16,560
Long-term debt - Series 2017B Bonds 12,030 11,890 11,740 11,585 11,425
Long-term debt - Series 2017C Bonds (a) 640 635 630 - -
Deferred financing costs (2,856) (2,774) (2,692) (2,610) (2,528)
Original issue discount - Series 2017 Bonds (714) (696) (678) (660) (642)
Total liabilities 26,665 27,820 27,536 26,585 26,276

Net assets (deficit) 940 898 888 903 981

Total liabilities and Net assets $ 27,605 $ 28,718 $ 28,424 $ 27,488 $ 27,257
(a) Includes principal reductions for the Series 2017C Bonds from the Surplus Fund redemptions and release of the Series 2017C Debt Service Reserve Fund .

See accompanying Summary of Significant Forecast Assumptions and Accounting Policies and
Independent Accountants’ Examination Report
D-6
 Leading Life Senior Living, Inc.
Forecasted Financial Ratios
Five Years Ending December 31, 2021
(In Thousands, Except for Ratios)

Debt Service Coverage Ratio 2018 2019 2020 2021

Operating Income (loss) $ (42) $ (10) $ 15 $ 78
Add:
Interest expense:
Series 2017 Bonds 1,355 1,330 1,293 1,257
Amortization of deferred financing costs 82 82 82 82
Amortization of original issue discount 18 18 18 18
Depreciation 860 872 885 899
Net Income Available for Debt Service $ 2,273 $ 2,292 $ 2,293 $ 2,334
Annual Debt Service Requirement (a)(b) $ 1,548 $ 1,721 $ 1,723 $ 1,674
Debt Service Coverage Ratio (c) 1.47 x 1.33 x 1.33 x 1.39 x
(a) The Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017 Bonds.
(b) For the purpose of this presentation, the Bond Funds for each series of the Series 2017 Bonds are included into the fiscal year 2018 Annual Debt
Service Requirement to normalize the partial year results.
(c) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017 Bonds and with the
subordination of the Management Fee would increase annually by approximately 0.25x.

Days' Cash on Hand 2018 2019 2020 2021

Cash and investments (of the Operating Account) $ 174 $ 179 $ 185 $ 188
Surplus Fund (d) 745 1,181 796 1,297
Operations and Maintenance Reserve Fund 347 358 369 377
Operating Fund 173 179 184 189
Repair and Replacement Fund (d) - - 250 250
Unrestricted Cash and Investments available (d) $ 1,439 $ 1,897 $ 1,784 $ 2,301

Total operating expenses $ 6,479 $ 6,598 $ 6,711 $ 6,778

Deduct:
Depreciation (860) (872) (885) (899)
Amortization of deferred financing costs (82) (82) (82) (82)
Amortization of original issue discount (18) (18) (18) (18)
Expenses, net $ 5,519 $ 5,626 $ 5,726 $ 5,779
Daily operating expenses (e) $ 15 $ 15 $ 16 $ 16
Days' Cash on Hand 95 123 114 145
(d) Beginning in fiscal year 2020, the Excess Surplus Fund Amount (as defined in the Indenture) within the Surplus Fund is to be used to transfer cash to
the Repair and Replacement Fund and for accelerated redemption of the Series 2017C Bonds (Third Tier Bonds). The total unrestricted cash and
investments is assumed to decrease with the accelerated redemption of the Series 2017C Bonds.
(e) Daily operating expenses are equal to annual operating expenses less depreciation and amortization divided by 365 days.

See accompanying Summary of Significant Forecast Assumptions and Accounting Policies and
Independent Accountants’ Examination Report
D-7
 Leading Life Senior Living, Inc.
Forecasted Financial Ratios
Annual Debt Service – Per Series
Five Years Ending December 31, 2021
(In Thousands, Except for Ratios)

The Series 2017 Bonds are assumed to be issued with multiple tranches of debt. The following
presentation provides the calculation of annual debt service for each Series 2017 Bonds tranche.
The following debt service coverage ratio information is not required under the rate covenant of
the Loan Agreement and is presented for informational purposes only.

Annual Debt Service Coverage Ratio - Series 2017A Bonds 2018 (c) 2019 2020 2021
Annual Debt Service Requirement (a)(c)(d) $ 734 $ 955 $ 952 $ 954
Annual Debt Service Coverage Ratio (Series 2017A Bonds) 3.10 x 2.40 x 2.41 x 2.45 x

Annual Debt Service Coverage Ratio - Series 2017A and 2017B Bonds
Annual Debt Service Requirement (b)(c)(d) $ 1,324 $ 1,672 $ 1,673 $ 1,674
Annual Debt Service Coverage Ratio (Series 2017A/B Bonds) 1.72 x 1.37 x 1.37 x 1.39 x

(a) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017A Bonds.
(b) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017A
and Series 2017B Bonds.
(c) For the purpose of this presentation, the Bond Funds for each series of the Series 2017 Bonds are included into the fiscal year 2018 Annual Debt
Service Requirement to normalize the partial year results.
(d) The Long-Term Debt Service Coverage Ratio as calculated with the Annual Debt Service Requirements for the Series 2017 Bonds and with the
subordination of the Management Fee would increase annually by approximately 0.25x.

See accompanying Summary of Significant Forecast Assumptions and Accounting Policies and
Independent Accountants’ Examination Report
D-8
 Leading Life Senior Living, Inc.

Summary of Significant Forecast Assumptions and Accounting Policies

Basis of Presentation

The accompanying financial forecast presents, to the best of the knowledge and belief of the
management of Leading Life Senior Living, Inc. (the “Corporation” or “Borrower”), the expected
financial position, results of operations, and cash flows for each of the five years ending December
31, 2021. Accordingly, the financial forecast reflects the judgement of management of the
Corporation and its operating manager TLG Family Management, LLC (the “Operating Manager,”
and together with the Corporation, “Management”), as of December 7, 2017, the date of this
forecast, of the expected conditions and its expected course of action during the forecast period.
However, there will usually be differences between the forecast and actual results, because events
and circumstances frequently do not occur as expected, and those differences may be material.

Background

The Corporation, is a Texas nonprofit corporation formed for the sole purpose of owning and
operating facilities for the growing elderly population. The Corporation’s mission is to provide
high quality elder care services and facilities to senior citizens living in the United States. The
Corporation is exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended (the “Code”).

The Corporation is governed by its Board of Directors (the “Board”). The Corporation’s bylaws
provide that the directors of the Board (the “Directors”) have the authority to carry out all of the
purposes of the Corporation as set forth in the Corporation’s certificate of formation. The number
of Directors on the Board is permitted to be increased or decreased from time to time, however,
the Board is required to be comprised no less than three Directors at all times. Currently, the Board
consists of three Directors. The initial Directors of the Board are required to be re-elected (or
successors be chosen) at the first annual meeting of the Board that will be held in the first quarter
of 2018. Directors may serve any number of consecutive terms if re-elected.

The Corporation, which was formed on February 14, 2017, has conducted no operations to date
and has no significant assets. The Corporation intends to acquire two stand-alone properties
currently branded as: Autumn Leaves of Edmond (the “Edmond Community”) and Autumn
Leaves of Southwest Oklahoma City (the “Southwest OKC Community”) (collectively, the
“Communities”) both located in the Oklahoma City market (Edmond and Oklahoma City), and
consisting of a total of 86 rental assisted living memory care units.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The average unit size at the Communities is 273 square feet, and each property can accommodate
up to 50 residents. The following table summarizes the type and number of units and beds at the
Communities:

Table 1
The Communities – Unit and Bed Mix
The Communities Memory Care Units Memory Care Beds
Edmond Community(1)(3) 42 46
Southwest OKC Community(2)(3) 44 46
Total 86 92(3)
Source: Management
(1) The Edmond Community was originally constructed in 2014.
(2) The Southwest OKC Community was originally constructed in 2015.
(3) Management is licensed for 50 beds at each facility but plans to operate 46 beds during the forecast period.

The Edmond Community is located at 1001 South Bryant Avenue in Edmond, Oklahoma,
approximately 12 miles northeast of downtown Oklahoma City. The building consists of
approximately 28,800 square feet and features individual resident suites as well as common living
and dining areas. The Edmond Community is located on approximately 4.5 acres in close
proximity to retail, medical offices, a hospital, office parks, a high school, single family homes
and multifamily housing.

The Southwest OKC Community is located at 2232 SW 104th Street, in Oklahoma City,
Oklahoma, approximately 15 miles southwest of downtown Oklahoma City. The building consists
of approximately 28,300 square feet and includes a mix of individual resident suites and common
living and dining areas. The Southwest OKC Community is located on approximately 3.9 acres in
close proximity to residential, business, retail and leisure facilities, including several golf courses.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The following maps depict the locations of the Communities and a 15-mile radius around the
Communities to provide context.

15-Mile Radius

Legend

The Edmond Community

The Southwest OKC Community

See Independent Accountants’ Examination Report

D-11
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Purchase and Sale Agreement

The Communities will be acquired by the Corporation on the date of issuance of the Series 2017
Bonds (as defined later in the report) with proceeds of the Series 2017 Bonds from the owners of
the real and personal property comprising the Communities pursuant to separate Agreements of
Purchase and Sale, both dated October 25, 2017, Southwest OKC Community for $13,500,000,
and Edmond Community for $12,000,000, combining for a total purchase price of $25,500,000,
subject to customary closing adjustments (the “Project Acquisition”).

Management of the Communities

The Corporation plans to retain the existing operating manager of the Communities with the
engagement of a management team led by TLG Family Management, LLC (the “Operating
Manager”). The Operating Manager is headquartered in Irving/Las Colinas, Texas and was
incorporated in 2008. They currently operate 44 other assisted living/memory care communities
throughout the Southeast and Midwest.

Management Agreement

The Corporation and the Operating Manager plan to enter into separate management agreement
with each Community effective upon closing of the Series 2017 Bonds (the “Management
Agreement”). The first date upon which the Operating Manager is expected to commence services
under each Management Agreement is the date that the Corporation acquires the Communities (the
“Effective Date”).

Pursuant to each Management Agreement, the Operating Manager will be the exclusive agent for
the management of the Communities. The Operating Manager will be responsible for the
following: (i) hiring and compensation of employees; (ii) management of employee benefits; (iii)
implementation and operation of the accounting system, including billing, collections, accounts
payable and payroll; (iv) preparation of operating and capital budgets; (v) preparation of fee and
rate schedules; (vi) supervising and conducting a facility maintenance program; (vii) purchasing
supplies; (viii) the administration and scheduling of all the Communities’ services; (ix)
administering the resident Agreements (as described herein); (x) obtaining and maintaining
required insurance policies; (xi) administering service contracts; (xii) making recommendations
for capital improvements; (xiii) the implementation of an employee incentive program; and (xiv)
the marketing of beds that are unoccupied, including advertising, selection of media and
production of brochures, in accordance with the Corporation’s operating budget.

The term of each Management Agreement shall commence on the Effective Date and remain
effective for a period of three years, unless sooner terminated by either party.

As compensation for providing services under each Management Agreement the Operating
Manager will be paid an annual fee for each fiscal year equal to five percent (5.0%) of the gross
revenues of each Communities (the “Management Fee”).

See Independent Accountants’ Examination Report

D-12
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Beginning in calendar year 2019, if the Operating Manager is compliance with the calendar year
2018 approved budget, the Operating Manager will be entitled to a 0.75 percent (0.75%) increase
in the annual fee for a total of 5.75 percent. Beginning in calendar year 2020, if the Operating
Manager is in compliance with the calendar year 2019 approved budget, the Operating Manager
will be entitled to an additional 0.75 percent (0.75%) increase in the annual fee for a total of 6.50
percent (the “Incentive Management Fee” and collectively with the Management Fee). The total
annual Management Fee shall never exceed 6.50 percent of the gross revenue received in such
year.

The following table presents the Management Fee payment percentages during the forecast:

Table 2
Forecasted Management Fee Payment Percentages

2018 2019 2020 2021

Management Fee Payment Percentage 5.00% 5.75% 6.50% 6.50%

The Operating Manager is also eligible to receive an annual employee incentive program payment
in an amount equal to 8.0 percent (8.0%) of the positive difference between the gross revenues in
the approved annual budget and the actual gross revenues received for such year; provided, the
total employee incentive program payment shall not exceed 2.0 percent (2.0%) of the gross revenue
actually received in such year and shall only be paid if the Operating Manager is in compliance
with the approved budget.

Subordination and Deferment of Management Fees

The payment of the Management Fee is subordinate to the payment of debt service on the Series
2017 Bonds, provided that the payment of any such fee so subordinated is expected to accrue
interest at a rate of 6.0 percent and will under no circumstance be subordinated for a period
exceeding five years after the original due date of such fee. The Management Fee is also required
to be deferred if the Debt Service Coverage Ratio is less than the coverage test or the liquidity
requirement is not met on any semiannual testing date or an event of default occurs under the
indenture (the “Indenture”). Notwithstanding the foregoing, pursuant to the Indenture, any
deferred Management Fee must be paid within five (5) years of the original due date of such fee
(together with interest due thereon), unless otherwise stated in the Indenture. The payment of such
regular fees and any deferred fees will be made in accordance with the Indenture.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Affordability Covenant

Under the Loan Agreement, the Corporation covenants and agrees to an “Affordability Covenant”,
among other covenants, that no less than 20 percent of the total number of units of the Communities
shall at all times be rented to and occupied by individuals whose income is 50 percent or less of
the area median gross income (the “Low Income Tenants”) on and after January 1, 2019.

According to HUD’s 2017 statistics, 50% of the median income in each of the counties where the
Communities are located is follows:

x Edmond Community (Oklahoma County, Oklahoma): $23,600 for a residential unit with
one tenant and $26,950 for a residential unit with two tenants; therefore, 20 percent of the
total 42 units at the Edmond Community (approximately eight units) must be occupied by
prospective residents with an annual income less than $23,600.

x Southwest OKC Community (Cleveland County, Oklahoma): $23,600 for a residential unit
with one tenant and $26,950 for a residential unit with two tenants; therefore, 20 percent
of the total 44 units at the Southwest OKC Community (approximately nine units) must be
occupied by prospective residents with an annual income less than $23,600.

While the 50 percent median income limitation in the Communities’ respective counties falls
below the income qualifications established for the Communities, Management assumes that
alternative sources of income from family members as well as the “spend down” of proceeds from
an asset base will be available to residents. The determination of resident income related to the
Affordability Covenant shall be made by the Corporation upon initial occupancy of a unit in the
Community by such tenant and annually thereafter for each unit on the basis of current income of
the residents. Management will be required to submit an annual certification as to whether the
Communities continue to meet the requirement of the Affordability Covenant.

Management is responsible for defining specific marketing strategies to market the community to
potential residents that meet the Low Income Tenants criteria while having sufficient income or
assets (via a spend down of assets) to pay the full monthly fee. Within the first twelve months
after closing on the Series 2017 Bonds, Management plans to identify the existing Low Income
Tenants at the Communities. Additionally, going forward with all prospective residents,
Management will evaluate the income along with the total assets of prospective residents including
home values, investments, and other assets prior to admission. The expectation is that a potential
resident would have sufficient assets to cover any shortfall between the resident’s annual income
and the annual cost of residing in a unit. Management has forecasted that the majority of the
Communities’ residents will be able to pay the market-rate rents forecasted for the Communities
through the utilization of the individual’s annual income and the spend down of assets, including
proceeds from the sale of a primary residence and other alternative sources.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Summary of Financing
Total financial requirements for the Project Acquisition are assumed to approximate
$29,521,000. The Corporation plans to fund these financial requirements primarily through the
proposed issuance in multiple series of bonds in the aggregate principal amount of $30,235,000
Oklahoma Development Finance Authority Senior Living Revenue Bond Series 2017A-1, Senior
Living Revenue Bond Taxable Series 2017A-2, Senior Living Revenue Bond Second Tier Series
2017B, and Senior Living Revenue Bond Third Tier Series 2017C (Leading Life Senior Living,
Inc. – Autumn Leaves Project), (collectively, the “Series 2017 Bonds”).

Management has assumed the following sources and uses of funds in preparing the financial
forecast based upon information provided by the Corporation’s underwriter Piper Jaffray & Co.
(the “Underwriter”).

Table 3
Sources and Uses of Funds
(In Thousands)

Sources of Funds:
Series 2017 Bonds
Series 2017A Bonds (1) $17,565
Series 2017B Bonds (1) 12,030
Series 2017C Bonds (1) 640
Total Series 2017 Bonds 30,235
Original Issue Discount (2) (714)
Total Sources of Funds $29,521

Uses of Funds:
Project Acquisition cost (3) $25,500
Debt Service Reserve Funds (4) 415
Operating Fund (5) 750
Cost of Issuance and other costs(6) 2,856
Total Uses of Funds $29,521
Source: Management and the Underwriter

See Independent Accountants’ Examination Report

D-15
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

(1) According to the Underwriter, the following series of bonds are assumed to be issued at par for a total
of $30,235,000:
x $17,565,000 of long-term rated taxable and tax-exempt fixed rate bonds (collectively, the “Series
2017A Bonds”);
x $12,030,000 of long-term rated tax-exempt fixed rate bonds (“Series 2017B Bonds”); and
x $640,000 of long-term rated tax-exempt fixed rate bonds (“Series 2017C Bonds”).
(2) Pursuant to terms and conditions outlined in the “Bond Purchase Agreement” for the Series 2017 Bonds,
the Series 2017 Bonds are assumed to be purchased at a discount (the “OID”).
(3) Project Acquisition cost for Edmond Memory Care, LLC is $12,000,000 and Southwest Oklahoma City
Memory Care LLC, is $13,500,000 combined to approximate $25,500,000 based on purchase and sale
agreements executed on October 25, 2017.
(4) The aggregate deposit to the separate Debt Service Reserve Funds is assumed to approximate $415,000.
(5) A deposit to the “Operating Fund” is assumed to approximate $750,000 to provide funds for capital
expenditures and start-up costs related to the Project Acquisition of the Communities.
(6) Costs of issuance related to the Series 2017 Bonds approximate $2,856,000 and include Underwriter
fees, accounting fees, legal fees, and the bond issuance fees.

Company Fair Value

The following table illustrates the assumed fair value amount based on the appraisal of the
Communities and the corresponding gain on bargain purchase:

Table 4
Fair Value of Acquired Property, Plant, & Equipment
(In Thousands)

Purchase price (1) $ 25,500

Assumed fair value of assets acquired (2) $ 26,440
Gain on bargain purchase price $ 940
Source: Management
(1) The purchase price for the Corporation assets is based on purchase and sale agreements dated October 25, 2017 in the
collective amount of $25,500,000.
(2) Based on the aggregate of the Communities’ individual appraised values summarized in the appraisal report completed by
JLL Valuation and Advisory Services, LLC on December 1, 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Description of the Resident Agreement

Memory Care
To reserve a memory care unit (“Memory Care Unit”) at one of the Communities, a prospective
resident must execute and sign a resident agreement (the “Agreement”) which reserves the right
of the prospective resident to occupy the selected memory care unit. There is no minimum age
requirement but all residents must have a diagnosis of cognitive impairment and be able to be cared
for within the scope of services offered at the Communities (the “Resident”). Residents occupying
the memory care beds are also expected to pay a one-time non-refundable community fee of $2,500
and an ongoing monthly fee (the “Monthly Fee”).

Payment of the Monthly Fee entitles the Resident to occupy the respective unit and receive the
following basic services and amenities:

x Three meals per day and snacks;

x Health monitoring and assistance with activities of daily living (“ADLs”);
x Administration of medications;
x Nursing supervision and unscheduled nursing care as needed;
x Assistance with cognitive orientation, transfer and/or ambulation;
x Daily basic housekeeping, flat laundry service and personal laundry;
x All utilities, except telephone and premium cable;
x Activities;
x 24-hour supervision and emergency response; and
x Scheduled transportation.

In addition to the items included in the Monthly Fee, certain services are available to Residents at
an additional cost including, but not limited to, medications, vitamins, eye glasses, eye
examinations, hearing aids, ear examinations, dental work, dental examinations, orthopedic
appliances, laboratory tests, x-ray services, any rehabilitative therapies (physical, occupation, or
speech), podiatry services, IV therapy, oxygen therapy, equipment rentals, in-room utilities such
as private phone or cable, barber/beauty shop appointments, incontinence supplies, and personal
hygiene supplies (e.g. shampoo, soap, toothbrush). Employee staff at each Community can assist
residents in arranging third party providers for these services.

Prior to admission, the Community Director of Health Care is expected to conduct a resident
assessment (the “Assessment”) of the prospective resident to determine the degree of personal
assistance and care needed by the Resident. The Communities charge a fixed monthly fee that will
not change due to Resident’s level of required care, but may be adjusted once annually upon thirty
(30) days’ written notice to the Resident, in accordance with the Agreement.

The Communities will perform regular Assessments of the Residents to evaluate the
appropriateness of the Residents’ placement and care needs.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

If, at any time, the Community or a Resident’s physician determines that a Resident is in need of
care that exceeds the scope of services provided at the Communities, the Agreement can be
terminated with written notice to the responsible party set forth in the agreement, in accordance
with Oklahoma State Department of Health (the “Department”) requirement. If requested by the
Resident, the Community will assist the Resident in finding an alternative living arrangement. The
Agreement may be terminated by the Resident upon 30 days’ written notice without cause.
Conversely, the Community may only terminate the Residency Agreement upon 30 days’ written
notice if any of the following occur: (i) nonpayment of Monthly Fee or additional charges for
services request by the responsible party within 30 days of due date, (ii) for medical reasons and
the welfare of the Resident when the Community is no longer able to adequately care for the
Resident, and (iii) if the Resident or any person associated with Resident is engaging in behavior
which threatens the Resident's or other residents’ or staff’s mental and/or physical health or safety.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Regulatory

Oklahoma Assisted Living Regulatory Requirements

In Oklahoma, assisted living communities are licensed and regulated by the Department under
Title 310, Chapter 663, of the Oklahoma Statutes. The Department defines assisted living as:

“Any home or establishment offering, coordinating or providing services to two or more persons
who:
a) are domiciled therein;
b) are unrelated to the operator;
c) by choice or functional impairments, need assistance with personal care or nursing
supervision;
d) may need intermittent or unscheduled nursing care;
e) may need medication assistance; and
f) may need assistance with transfer and/or ambulation.

Intermittent nursing care and home health aide services may be provided in an assisted living
facility by a home health agency.”

An assisted living community must be licensed with the Department prior to entering into resident
contracts. Licensing must include disclosure of applicant’s identity and background in the
operation of continuum of care and assisted living services, and evidence of the adequacy of the
applicant’s financial resources and ability to ensure adequate staffing.

Alzheimer’s disease special care communities are also licensed and regulated by the Department
under Title 63, Section 1-879.2a, of the Oklahoma Statutes. The Department defines Alzheimer’s
disease specialty care as “care that is provided to persons with a diagnosis of probable Alzheimer’s
disease or related disorders by an entity that provides such care in a special unit or under a special
program designed to prevent or limit access to areas outside the designated units or program.”

“Any facility including, but not limited to, a nursing facility, residential care facility, assisted living
facility, adult congregate living facility, adult day care center or a continuum of care facility
retirement community that advertises, markets, or otherwise promotes itself as providing care or
treatment to persons with Alzheimer’s disease or related disorders in a special unit or under a
special program shall disclose the type of care or treatment provided that distinguishes it as being
especially applicable to or suitable for such persons.”

An Alzheimer’s disease special care community must be licensed by the Department prior to
entering into resident contracts. Licensing must include:
x A written description of the facility’s overall philosophy and mission;
x The process for placement in or transfer to the facility;
x The process used for assessment, establishment, and implementation of a patient plan of
care;
x Staff-to-resident ratios, staff training and continuing education requirements;

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

x Description of the physical environment and design features to support Alzheimer’s

patients;
x The types and frequency of resident activities;
x The involvement of families in care planning and the availability of family support
programs; and,
x The fees for care and any additional fees.

The Communities are currently licensed by the Department for assisted living and memory care
and the Corporation will need to obtain a new license from the Department. The corporation
submitted an application to obtain licenses for each Community to operate as assisted living and
memory care to the Department on November 14, 2017 and anticipates that the new licenses will
be issued and effective as of the date the Series 2017 Bonds are issued.

If the Operating Manager has not received its new license from the Department prior to the date
of issuance of the Series 2017 Bonds, the Operating Manager will enter into a Transfer Agreement
with the seller under which the Operating Manager will be permitted by the seller to manage and
operate the Communities under the seller’s license until the Operating Manager has received its
New License.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Industry Overview

There are a broad array of housing options available to seniors, from staying in their own home to
specialized facilities that provide 24 hour nursing care as follows:
NORCs - Naturally Occurring Retirement Communities (NORCs) include multi-unit buildings
which were originally planned for people of all ages, but over time have evolved to include a
significant proportion of residents aged 60 and over. NORCs enable seniors to stay in their own
homes and access local services, volunteer programs and social activities.
Independent Living - Independent living communities are exclusively for seniors and include those
that may be apartments, condominiums and/or free-standing homes where residents have access
to on-site amenities and services that typically include 30 meals per month, weekly housekeeping,
utilities, scheduled transportation, activities programs, emergency call system in each residence,
24-hour security and maintenance of grounds. Due to the recent trend of the older, frailer senior
moving into a senior living establishment, the care for an independent living resident may be
similar to that of one in need of assistance.
Assisted Living Facilities - Also known as residential care, board and care, adult care home, adult
group home, alternative care facility, or sheltered housing, assisted living is a housing option for
those who need help with some activities of daily living, including minor help with medications.
Costs tend to vary according to the level of daily help required, although staff is available 24 hours
a day. Some assisted living facilities provide apartment-style living with scaled-down kitchens,
while others provide rooms. Most facilities have a group dining area and common areas for social
and recreational activities.
Memory Care Facilities – Memory care facilities are designed to provide care for seniors with
neuro-cognitive disorders such as dementia, Alzheimer’s, Parkinson’s and other types of memory
problems. Also called special care units (SCUs), memory care units usually provide 24-hour
supervised care within a separate wing or floor of a residential facility. A memory care
environment is designed for persons with a level of impairment making it unsafe to continue to
stay at home, but who do not require the intensive care of a skilled nursing facility. Memory care
allows a person experiencing memory loss to maintain a level of independence while relying on
the safety and security of being in a residential facility with a professional staff.
Nursing care - Skilled nursing facilities generally provide the highest level of care for older adults
outside of a hospital. While they also provide assistance in activities of daily living, they differ
from other senior housing in that they also provide a high level of medical care 24 hours per day.
A licensed physician supervises each resident’s care and a nurse or other medical professional is
almost always on the premises. Skilled nursing care and medical professionals such as
occupational or physical therapists are also available.
Continuing Care Retirement Communities (“CCRCs”) – CCRCs are facilities that include
independent living, assisted living, and nursing home care in one location, so seniors can stay in
the same general area as their housing needs change over time. There is normally the cost of buying
a unit in the community as well as monthly fees that increase as you require higher levels of care.
It also can mean spouses can still be very close to one another even if one requires a higher level
of care.
See Independent Accountants’ Examination Report
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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Descriptions of the Communities and Characteristics of the Market Areas

Assumptions for the current and future utilization of the Communities was developed by
Management based on analysis of the following factors that may affect the demand for the
Communities’ accommodations and services:
x Demographic and socioeconomic characteristics of the primary market areas;
x Site description and general area analysis for the Communities; and
x Description and utilization of existing and proposed comparable senior housing
communities and assisted living facilities (including memory care), as applicable.

Primary Market Areas

The primary market area (“PMA”) for providers of senior living services is typically defined as
the geographic area from which a majority of prospective residents reside prior to assuming
occupancy at the Communities. In general, seniors requiring health care such as assisted living
and memory care services generally originate from within the local area because of the more
immediate, need-driven nature of the services.

Based on discussions with existing senior living providers in the area and experience with similar
communities, the primary market areas have been defined as follows:

x The PMA for the Edmond Community is a six-zip code are surrounding that community
(the “Edmond PMA”); and
x The PMA for the Southwest OKC Community is an 11-zip-code area surrounding that
community.

The Edmond PMA and the Southwest OKC PMA are collectively referred to as the “PMAs”.

See Independent Accountants’ Examination Report

D-22
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The following map shows the Communities and the PMAs.

5-Mile Radius

5-Mile Radius

Legend

The Edmond Community The Southwest OKC Community

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Population

The age distribution of the population in a geographic area is a key factor in the determination of
an area’s retirement housing needs. The U.S. Census Bureau has collected demographic data based
on the 2010 census figures. Environics Analytics, a firm that specializes in the analysis of
demographic data, has extrapolated the 2010 census information to derive the estimated 2017
figures and projected statistics for 2022. The following table presents population data by age
cohort and the anticipated average annual compounded percentage change between 2010 and 2017
and 2017 and 2022 in the PMAs, the state of Oklahoma (“Oklahoma”), and the United States.

Table 5
Historical, Estimated and Projected Populations - The PMAs, Oklahoma and United States
Compounded Compounded
2010 2017 2022 Annual Percentage Annual Percentage
Population Population Population Change Change
(Census) (Estimated) (Projected) 2010 – 2017 2017 – 2022
Edmond PMA
Total Population 150,011 182,329 198,410 2.8% 1.7%
Age 65 to 74 Population 8,597 13,455 17,126 6.6% 4.9%
Age 75 to 84 Population 4,610 5,823 7,554 3.4% 5.3%
Age 85 Plus Population 1,797 2,273 2,539 3.4% 2.2%
Total 65 Plus 15,004 21,551 27,219 5.3% 4.8%
Total 75 Plus 6,407 8,096 10,093 3.4% 4.5%
Southwest OKC PMA
Total Population 219,466 239,672 254,029 1.3% 1.2%
Age 65 to 74 Population 12,605 16,607 20,089 4.0% 3.9%
Age 75 to 84 Population 7,470 8,310 10,084 1.5% 3.9%
Age 85 Plus Population 2,492 3,134 3,363 3.3% 1.4%
Total 65 Plus 22,567 28,051 33,536 3.2% 3.6%
Total 75 Plus 9,962 11,444 13,447 2.0% 3.3%
Oklahoma
Total Population 3,751,351 3,958,019 4,118,862 0.8% 0.8%
Age 65 to 74 Population 280,467 357,170 427,012 3.5% 3.6%
Age 75 to 84 Population 164,335 180,288 204,257 1.3% 2.5%
Age 85 Plus Population 61,912 70,989 76,783 2.0% 1.6%
Total 65 Plus 506,714 608,447 708,052 2.6% 3.1%
Total 75 Plus 226,247 251,277 281,040 1.5% 2.3%
United States
Total Population 308,745,538 325,139,271 337,393,057 0.7% 0.7%
Age 65 to 74 Population 21,713,429 29,466,143 35,735,178 4.5% 3.9%
Age 75 to 84 Population 13,061,122 14,481,874 16,651,167 1.5% 2.8%
Age 85 Plus Population 5,493,433 6,327,357 6,688,544 2.0% 1.1%
Total 65 Plus 40,267,984 50,275,374 59,074,889 3.2% 3.3%
Total 75 Plus 18,554,555 20,809,231 23,339,711 1.7% 2.3%
Source: Environics Analytics

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The following table presents the percentage of total population by age group for the targeted age
population in the PMAs, Oklahoma and the United States.

Table 6
Percentage of Total Population by Age Cohort
2017 (Estimated)
Southwest OKC
Edmond PMA PMA Oklahoma United States
Age Groupings
65 plus 11.8% 11.7% 15.4% 15.5%
75 plus 4.4% 4.8% 6.3% 6.4%
85 plus 1.2% 1.3% 1.8% 1.9%
2022 (Projected)
Southwest OKC
Edmond PMA PMA Oklahoma United States
Age Groupings
65 plus 13.7% 13.2% 17.2% 17.5%
75 plus 5.1% 5.3% 6.8% 6.9%
85 plus 1.3% 1.3% 1.9% 2.0%
Source: Environics Analytics

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

General Area Analysis

Edmond PMA

The Edmond Community is located approximately three miles west of Interstate 35, which
provides access to Wichita, Kansas to the north and Dallas, Texas to the south. The Wiley Post
Airport is located approximately eighteen miles southwest of the Edmond Community and is one
of three airports owned by the City of Oklahoma City Department of Airports. The closest
international airport to the Edmond Community is the Will Rogers World Airport (“OKC”) which
is located approximately 23 miles southwest. OKC is served by six major airlines and serves
approximately 3.7 million passengers per year.

Major hospitals serving the Edmond PMA include:

x OU Medical Center Edmond, located approximately one mile north of the Edmond
Community, is an acute care hospital with 58 beds; and,
x Mercy Health Center, located approximately 11 miles southwest of the Edmond
Community, is a short term acute care hospital with 316 beds.

The major employers in the city of Edmond are Edmond Public Schools, the University of Central
Oklahoma, the City of Edmond, OU Medical Center Edmond and Adfitech.

Southwest OKC PMA

The Southwest OKC Community is located approximately four miles southeast of the intersection
of Interstate 240, which provides access to Interstate 40 and Little Rock, Arkansas to the east, and
Interstate 44, which provides access to Wichita Falls, Texas to the southwest and access to Tulsa,
Oklahoma to the northeast. The closest international airport to the Southwest OKC Community is
the Will Rogers World Airport (“OKC”) which is located approximately eight miles northwest.
OKC is served by six major airlines and serves approximately 3.7 million passengers per year.

Major hospitals serving the Southwest OKC PMA include:

x Community Hospital, located approximately three miles east of the Southwest OKC
Community, is an acute care hospital with 40 beds;
x Norman Regional Moore Medical Center, located approximately five miles southeast of
the Southwest OKC Community, is an acute care hospital with 45 beds; and,
x Integris SouthWest Medical Center, located approximately six miles north of the
Southwest OKC Community, is a short term acute care hospital with 316 beds.

The major employers within and near the Southwest OKC PMA are Tinker Air Force Base, Hobby
Lobby Stores, The Boeing Company, Oklahoma City Community College and UPS.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Unemployment

The unemployment trends for the city of Edmond, Oklahoma City, Oklahoma County, Cleveland
County, Oklahoma City, the Oklahoma City Metropolitan Statistical Area (“MSA”), Oklahoma
and the United States are shown in the following table.

Table 7
Unemployment Trends
2015 2016 2017(1)
City of Edmond 2.9% 3.2% 3.4%
Oklahoma City 3.6% 4.0% 4.1%
Oklahoma County 3.9% 4.3% 4.2%
Cleveland County 3.5% 3.9% 3.7%
The Oklahoma City MSA 3.8% 4.2% 4.0%
State of Oklahoma 4.4% 4.9% 4.5%
United States 3.9% 4.3% 4.2%
Source: U.S. Department of Labor, Bureau of Labor Statistics Data, November 2017.
(1) Data for the city of Edmond, Oklahoma City, Oklahoma County, Cleveland County, the Oklahoma City MSA and the state
of Oklahoma is through September 2017. Data for the United States is through October 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Aggregate Penetration Rates

Aggregate Penetration Rates are used by the National Investment Center for Seniors Housing and
Care (“NIC”), to compare the senior housing inventory in a market area to the number of age
qualified (age 75 and above) seniors in that market area in order to allow comparisons across the
top 150 Metropolitan Statistical Areas (“MSAs”) in the United States. The following map shows
the Communities and the Oklahoma City MSA.

Legend

The Edmond Community The Southwest OKC Community

The Aggregate Penetration Rate is a measure of the general saturation of senior housing units in a
market area among senior households regardless of income earnings or ability to pay.
In order to calculate aggregate penetration rates, NIC classifies all senior living communities into
three categories (Majority Independent Living, Majority Assisted Living or Majority Skilled
Nursing) based on the type of unit that comprises the majority of the total units at the community.
See Independent Accountants’ Examination Report
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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The NIC assisted living aggregate penetration rate (“AL Aggregate Penetration Rate”) is
calculated by dividing the total inventory of senior living units at properties where assisted living
units comprise the largest share of inventory (“Majority AL”) by the number of age 75+
households (with no income criteria).

As shown in the following graph, the AL Aggregate Penetration Rate in the Oklahoma City MSA
is similar to the 32 MSAs (by size), MSAs 32 to 100 and the top 150 MSAs.

Table 8
AL Aggregate Penetration Rates Comparison
6.0%
5.5% 5.6%

4.9%
5.0%
4.6%

4.0%

3.0%

2.0%

1.0%

0.0%
Oklahoma City Top 32 MSAs 32 - 100 MSAs Top 150 MSAs
MSA

Source: NIC MAP, 3rd Quarter 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Edmond Community

The Edmond Community is located at 1001 South Bryant Avenue, Edmond, Oklahoma County,
Oklahoma on an approximate 4.4 acre site. The Edmond Community opened in 2014 and is
approximately 28,800 square feet.

The following table summarizes the type, number, approximate square footage and monthly fees
(“Monthly Fees”) for the units at the Edmond Community.

Table 9
Edmond Community Configuration
Number of Number of Square Monthly
Unit Type Units Operating Beds(1) Footage Fee(2)(3)
Memory Care Units:
Studio 2 2 205 $6,145
Standard 12 12 239 $6,455
Large with Shower 16 16 301 $6,685
Large (No Shower) 4 4 316 $6,685
Private – Shared Bath 4 4 255 $5,665
Semi-Private 4 8 430 $5,125
Total/Weighted Average 42 46 288 $6,242
Source: Management
(1) The Edmond Community is licensed for 50 beds; however, Management plans to operate 46 beds during the forecast period.
(2) The second person fee for assisted living is $2,000 per month.
(3) In addition to a Monthly Fee, each resident is required to pay a one-time community fee of $2,500.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The following map depicts the Edmond Community, the Edmond PMA and the assisted living and
memory care communities within the Edmond PMA.

5-Mile Radius

Legend

The Edmond Community

Existing Assisted Living Communities within the Edmond PMA

1 – Bradford Village 8 – StoneCreek Assisted Living and Memory Care
2 – The Veraden 9 – Brookdale Edmond Santa Fe
3 – Teal Creek Senior Living 10 –The Fountains at Canterbury
4 – Brookdale Edmond Danforth 11 – Epworth Villa
5 – Lyndale Edmond 12 – Iris Memory Care
6 – Tealridge Assisted Living 13 – Legend Assisted Living at Jefferson’s Garden
7 – Touchmark at Coffee Creek

Existing Comparable Communities – Edmond PMA

The following tables summarize the number of units, square footages, occupancy rates and service
fees at the existing comparable communities, based on surveys and site visits completed through
November 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 10
Existing Comparable Assisted Living Facilities within the Edmond PMA
The Edmond
Community Bradford Village The Veraden Teal Creek Senior Living
Location Edmond – 73034 Edmond – 73034 Edmond – 73034 Oklahoma City – 73013
Miles from the Edmond – 2.3 2.4 2.6
Sponsor/Developer Leading Life Senior Living, Brookdale Senior Living Covenant Group Teal Creek Assisted Living
Year Opened 2014 1957 2017 June 2017
For-Profit/Non-Profit Not-For-Profit For-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units Units
Shared Suite – – – –
Studios – 38 24 100
One-bedroom – 6 41 26
Two-bedroom – – 9 –
Total AL – 44 74 126
Memory Care (MC)
Shared Suite 4 – – –
Studios 38 – 23 –
One-bedroom – – – –
Total MC 42 – 23 –
Total AL and MC 42 44 97 126
Total Licensed Beds 50 177 110 126
Square Footage
Assisted Living Units:
Shared Suite – – – –
Studios – 396 – 450 401 290 – 348
One-bedroom – 451 – 595 498 – 615 590
Two-bedroom – – 773 –
Memory Care Units:
Shared Suite 430 – – –
Studios 205 – 316 – 279 –
One-bedroom – – – –
Community Fee $2,500 $1,600 $2,500 – AL Only $1,500
Assisted Living Pricing
Base Monthly Fees
Shared suites – – – –
Studio – $4,430 – 4,725 $3,075 – 3,275 $2,995 – 3,195
One-bedroom – $4,950 – 5,250 $3,475 – 4,375 $4,995
Two-bedroom – – $4,775 –
Second Person Fee – $735 $1,000 $700
Memory Care Pricing
Base Monthly Fees
Shared Suite $5,125 – – –
Studio $5,665 – 6,685 – $4,900 –
One-bedroom – – – –
AL: $400 -1,600
Higher Levels of Care All-Inclusive All-Inclusive AL: $550 –1,800
MC: $250 – 500
Occupancy Rate 92% 89% 77% 37%

Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 10 (continued)
Existing Comparable Assisted Living Facilities within the Edmond PMA
Brookdale Edmond Tealridge Assisted Touchmark at
Danforth Lyndale Edmond Living Coffee Creek
Location Edmond – 73003 Edmond – 73013 Edmond – 73013 Edmond – 73003
Miles from the Edmond Community 2.8 3.0 3.4 4.3
Affordable
Brookdale Senior Touchmark Living
Sponsor/Developer Sagora Senior Living Community Housing
Living Centers
Trust
Year Opened 2000 1986 2010 2002
For-Profit/Not-for-Profit For-Profit For-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units Units
Shared Suite – – – –
Studios 8 28 10 7
One-bedroom 29 16 37 32
Two-bedroom – 4 5 15
Total AL 37 48 52 54
Memory Care (MC)
Shared Suite – – – –
Studios – – 16 50
One-bedroom – – – –
Total MC – – 16 50
Total AL and MC 37 48 68 104
Total Licensed Beds 43 52 80 134
Square Footage
Assisted Living Units:
Shared Suite – – – –
Studios 288 256 – 356 330 518
One-bedroom 324 – 360 256 – 377 570 629
Two-bedroom – 625 780 – 900 1,169
Memory Care Units:
Shared Suite – – – –
Studios – – 300 291
One-bedroom – – – –
Community Fee $1,500 $1,750 $1,000 $3,500
Assisted Living Pricing
Base Monthly Fees
Shared suites – – – –
Studio $2,795 $2,600 – 2,875 $2,800 $4,280
One-bedroom apartments $2,925 $3,000 $3,250 $4,685
Two-bedroom – $3,400 $3,750 – 3,950 $5,040 – 5,590
Second Person Fee $1,000 $600 $800 $1,000
Memory Care Pricing
Base Monthly Fees
Shared Suite – – – –
Studio – – $4,825 $7,370
One-bedroom – – – –
AL: $90 – $450 per AL: $300 – 600
Higher Levels of Care AL: $400 – 2,000 AL and MS: $500
service MC: $1,100 – 1,200
Occupancy Rate 100% 92% 100% 92%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 10 (continued)
Existing Comparable Assisted Living Facilities within the Edmond PMA
StoneCreek Assisted Brookdale Edmond The Fountains of
Living and Memory Care Santa Fe Canterbury
Location Edmond – 73012 Edmond – 73003 Oklahoma City – 73114
Miles from the Edmond Community 4.5 4.8 6.9
Sponsor/Developer StoneCreek Real Estate Brookdale Senior Living Watermark Retirement
Year Opened July 2017 1991 1983
For-Profit/Not-for-Profit For-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units
Shared Suite – – –
Studios 22 28 50
One-bedroom 32 – 10
Two-bedroom 4 – –
Total AL 58 28 60
Memory Care (MC)
Shared Suite 10 – 8
Studios 22 – 12
One-bedroom – – –
Total MC 32 – 20
Total AL and MC 90 28 80
Total Licensed Beds 94 35 218
Square Footage
Assisted Living Units:
Shared Suite – – –
Studios 419 342 331
One-bedroom 572 – 635 – 437
Two-bedroom 833 – –
Memory Care Units:
Shared Suite – – 500
Studios 302 – 357 – 331
One-bedroom – – –
Community Fee $2,000 $1,500 $1,000
Assisted Living Pricing
Base Monthly Fees
Shared suites – – –
Studio $3,400 $2,780 – 2,880 $2,995
One-bedroom apartments $3,990 – 4,300 – $3,695
Two-bedroom $4,990 – –
Second Person Fee $1,000 $600 $865
Memory Care Pricing
Base Monthly Fees
Shared Suite $4,200 – $3,395
Studio $5,200 – $4,295
One-bedroom – – –
AL: $450 – 1,500
Higher Levels of Care AL: $600 – 2,000 AL and MC: $450 – 1,350
MC: All-inclusive
Occupancy Rate 39% 94% 91%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 10 (continued)
Existing Comparable Assisted Living Facilities within the Edmond PMA
Legend Assisted Living at
Epworth Villa Iris Memory Care Jefferson’s Garden
Location Oklahoma City – 73134 Edmond – 73012 Edmond – 73013
Miles from the Edmond Community 8.1 8.4 8.8
Oklahoma Conference of
Sponsor/Developer Evolve Senior Living Legend Senior Living
United Methodist Church
Year Opened 1990 November 2016 1999
For-Profit/Not-for-Profit Not-for-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units
Shared Suite – – –
Studios 6 – –
One-bedroom 60 – 40
Two-bedroom 12 – –
Total AL 78 – 40
Memory Care (MC)
Shared Suite – – –
Studios 40 40 –
One-bedroom – – –
Total MC 40 40 40
Total AL and MC 118 40 40
Total Licensed Beds 217 40 44
Square Footage
Assisted Living Units:
Shared Suite – – –
Studios 292 – –
One-bedroom 583 – 400
Two-bedroom 873 – –
Memory Care Units:
Shared Suite – – –
Studios 292 200 –
One-bedroom – – –
Community Fee – $2,000 $1,500
Assisted Living Pricing
Base Monthly Fees
Shared suites – – –
Studio $4,470 – –
One-bedroom apartments $5,667 – $2,995 – 3,630
Two-bedroom $8,426 – –
Second Person Fee $4,513 – $1,000
Memory Care Pricing
Base Monthly Fees
Shared Suite – – –
Studio $7,585 $5,500 – 5,950 –
One-bedroom – – –
Higher Levels of Care AL and MC: All-inclusive MC: All-inclusive AL: $350 – 1,250
Occupancy Rate 67% 50% 88%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

D-35
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Planned Assisted Living Communities within the Edmond PMA

Teal Ridge Assisted Living, which is located approximately three miles south of the Edmond
Community, is planning to add independent living apartment and cottages to their campus as part
of a planned Phase II. According to management of Teal Ridge, the plans for this expansion are
currently under review by the City of Oklahoma City Planning Department so a construction start
date has not been set. In addition, Teal Ridge is considering adding memory support units to their
campus as part of a planned Phase III; however, the total number of memory support units to be
built has not been determined at this time.

See Independent Accountants’ Examination Report

D-36
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The Southwest OKC Community

The Southwest OKC Community is located at 2232 Southwest 104th Street, Oklahoma City,
Cleveland County, Oklahoma on an approximate 3.9 acre site. The Southwest OKC Community
opened in 2015 and is approximately 28,300 square feet.

The following table summarizes the type, number, approximate square footage and Monthly Fees
for the units at the Southwest OKC Community.

Table 11
Southwest OKC Community Configuration
Number of Number of Square Monthly
Unit Type Units Operating Beds Footage(1) Fee(2)(3)
Memory Care Units:
Standard 14 14 225 $5,895
Large with Shower 16 16 285 $6,350
Large (No Shower) 4 4 285 $5,975
Private – Shared Bath 8 8 225 $5,550
Semi-Private 2 4 397 $4,950
Total/Weighted Average 44 46 260 $5,918
Source: Management
(1) The Southwest OKC Community is licensed for 50 beds; however, Management plans to operate 46 beds during the forecast
period.
(2) The second person fee for assisted living is $2,000 per month.
(3) In addition to a Monthly Fee, each resident is required to pay a one-time community fee of $2,500.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

The following map depicts the Southwest OKC Community, the Southwest OKC PMA and the
assisted living and memory care communities within the Southwest OKC PMA.

5-Mile Radius

Legend

The Southwest OKC Community

Existing Assisted Living Communities within the Southwest OKC PMA

1 – Village on the Park 5 – The Legend at Rivendell
2 – Brookdale Oklahoma City Southwest 6 – Rambling Oaks Courtyard
3 – Sommerset Assisted Living Residence 7 – Crystal Place Assisted Living
4 – Southridge Place 8 – Featherstone Assisted Living

Existing Comparable Communities – Southwest OKC PMA

The following tables summarize the number of units, square footages, occupancy rates and service
fees at the existing comparable communities, based on surveys and site visits completed through
November 2017.

See Independent Accountants’ Examination Report

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 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 12
Existing Comparable Assisted Living Facilities within the Southwest OKC PMA
The Southwest OKC Brookdale Oklahoma City
Community Village on the Park Southwest
Location Oklahoma City – 73159 Oklahoma City – 73170 Oklahoma City – 73159
Miles from the Southwest – 0.8 1.1
OKC Community
Sponsor/Developer Leading Life Senior Living, Inc. Cardinal Bay Brookdale Senior Living
Year Opened 2015 1999 1985
For-Profit/Not-for-Profit Not-For-Profit Not-For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units
Shared Suite – – –
Studios – 10 –
One-bedroom – 9 –
Two-bedroom – – –
Total AL – 19 –
Memory Care (MC)
Shared Suite 2 8 4
Studios 42 13 28
One-bedroom – – –
Total MC 44 21 32
Total AL and MC 44 40 32
Total Licensed Beds 50 64 40
Square Footage
Assisted Living Units:
Studios – 416 –
One-bedroom – 508 –
Two-bedroom – – –
Memory Care Units:
Shared Suite 397 416 625
Studios 225 – 285 416 315
One-bedroom – – –
Community Fee $2,500 $2,500 $1,500
Assisted Living Pricing
Base Monthly Fees
Shared suites – – –
Studio – $3,500 –
One-bedroom – $3,800 –
Two-bedroom – – –
Second Person Fee – $1,000 –
Memory Care Pricing
Base Monthly Fees
Shared Suite $4,950 $4,200 $4,700
Studio $5,550 – 6,350 $5,500 $5,200
One-bedroom – – –
AL: $385 – 1,250
Higher Levels of Care MC: All-inclusive MC: $1,000 – 1,750
MC: $500
Occupancy Rate 98% 95% 97%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

D-39
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 12 (continued)
Existing Comparable Assisted Living Facilities near the Southwest OKC PMA
Sommerset Assisted Living
Residence Southridge Place The Legend at Rivendell
Location Oklahoma City –73170 Oklahoma City – 73159 Oklahoma City – 73170
Miles from the Southwest
1.4 1.8 2.6
OKC Community
Sponsor/Developer Sommerset Neighborhood Enlivant Legend Senior Living
Year Opened 1998 1996 2008 AL/2016 MC
For-Profit/Not-for-Profit Not-For-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units
Shared Suite – – –
Studios 40 23 –
One-bedroom 32 9 64
Two-bedroom – – –
Total AL 72 32 64
Memory Care (MC)
Shared Suite – – 20
Studios 20 – 55
One-bedroom – – –
Total MC 20 – 75
Total AL and MC 92 32 139
Total Licensed Beds 126 39 146
Square Footage
Assisted Living Units:
Shared Suite – – –
Studios 300 288 – 324 –
One-bedroom 400 360 382 – 555
Two-bedroom – – –
Memory Care Units:
Shared Suite – – 428 – 460
Studios 300 – 307 – 458
One-bedroom – – –
Community Fee $1,850 $1,500 $2,000 – 2,500
Assisted Living Pricing
Base Monthly Fees
Shared suites – – –
Studio $2,659 $2,736 –
One-bedroom apartments $3,129 – 3,546 $3,040 $3,770 – 4,805
Two-bedroom apartments – – –
Second Person Fee $1,161 $958 $1,200
Memory Care Pricing
Base Monthly Fees
Shared Suite – – $4,770
Studio $3,688 – 4,390 – $5,560
One-bedroom – – –
AL:$400 – 1,290
Higher Levels of Care AL and MC: All-inclusive AL: $517 – 2,523
MC: All-inclusive
Occupancy Rate 100% 63% 83%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

D-40
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Table 12 (continued)
Existing Comparable Assisted Living Facilities near the Southwest OKC PMA
Rambling Oaks Courtyard Crystal Place Assisted Living Featherstone Assisted Living
Location Oklahoma City – 73170 Oklahoma City – 73139 Moore – 73160
Miles from the Southwest
3.0 3.6 5.8
OKC Community
Sponsor/Developer Integral Senior Living Privately Owned Consolidated Healthcare
Year Opened 1998 1999 1996
For-Profit/Non-Profit Non-Profit For-Profit For-Profit
Unit Configuration
Assisted Living (AL) Units Units Units
Shared Suite – – –
Studios 30 36 32
One-bedroom 14 4 10
Two-bedroom – – –
Total AL 44 40 42
Memory Care (MC)
Shared Suite – – –
Studios 20 – –
One-bedroom – – –
Total MC 20 – –
Total AL and MC 64 40 42
Total Licensed Beds 80 50 55
Square Footage
Assisted Living Units:
Shared Suite – – –
Studios 440 – 600 300 300
One-bedroom 500 – 700 350 350
Two-bedroom – – –
Memory Care Units:
Shared Suite – – –
Studios 300 – –
One-bedroom – – –
Community Fee $1,250 $500 $800
Assisted Living Pricing
Base Monthly Fees
Shared suites – – –
Studio $2,935 – 3,195 $2,130 $2,695
One-bedroom apartments $3,295 – 4,195 $2,780 $2,895
Two-bedroom apartments – – –
Second Person Fee $1,000 $400 $600
Memory Care Pricing
Base Monthly Fees
Shared Suite – – –
Studio $5,250 – –
One-bedroom – – –
AL: $325 – 1,225
Higher Levels of Care AL: $152 – 608 AL:$295 – 590
MC: All-inclusive
Occupancy Rate 91% 45% 76%
Source: Management, site visits and telephone interviews conducted by DHG, November 2017.

See Independent Accountants’ Examination Report

D-41
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Planned Assisted Living Communities within the Southwest OKC PMA

Based on discussions with representatives of the local planning and permitting agencies and
interviews with management at existing and planned retirement communities, there are no assisted
living or memory care beds planned in the Southwest OKC PMA.

See Independent Accountants’ Examination Report

D-42
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Summary of Significant Accounting Policies

(a) Basis of Accounting
The Corporation maintains its accounting and financial records according to the accrual basis
of accounting.
(b) Deferred Financing Costs
Costs associated with the issuance of the related financing are assumed to be capitalized and
amortized over the expected life of the bonds using the effective interest method.
Management has implemented ASU No. 2015-03 “Interest – Imputation of Interest” and
simplified the presentation of debt issuance costs. Under the new Standard, the debt issuance
costs are netted against the related debt on the balance sheet and the amortization is included
in interest expense on the statement of operations.
(c) Cash and Cash Equivalents
Cash and cash equivalents include investments in highly liquid securities with an original
maturity of three months or less when purchased.
(d) Property, Equipment and Depreciation Expense
Property and equipment are recorded at cost. Depreciation expense is calculated on the
straight-line method over the estimated useful lives of depreciable assets. The cost of
maintenance and repairs is charged to operations as incurred, whereas significant renewals and
betterments are capitalized.
(e) Assets Limited as to Use
Assets limited as to use are assumed to be carried at fair value, which, based on the nature of
the underlying securities, is assumed to approximate historical cost. Management assumes no
material changes in fair values that result in material net realized or unrealized gains or losses
during the forecast period.
(f) Investment Income
Investment income is reported as operating revenue unless restricted by donor or law.
Management assumes no changes in fair values that result in material net realized or unrealized
gains or losses during the forecast period.
(g) Tax-Exempt Status
The Corporation is a nonprofit organization exempt from federal income and excise taxes
under section 501(c)(3) of the Internal Revenue Code, and is classified as other than a private
foundation.

See Independent Accountants’ Examination Report

D-43
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Memory Care Revenues

Memory care revenues are generated from services provided to residents of the Communities that
are direct admissions from the local surrounding area. The monthly fees for memory care beds
are assumed to increase 3.0 percent beginning January 1, 2019 and annually thereafter. The
memory care units’ average occupancy is assumed to be approximately 93.0 percent in fiscal year
2018 and remain constant at that level throughout the remainder of the forecast.

The following table summarizes the historical and assumed utilization of the memory care units.

Table 13
Memory Care Utilization
Historical Average Occupancy Forecast
Fiscal Year Ending
2014(1) 2015(2) 2016 (3) 2017 (4) 2018 - 2021 (5)
December 31,
By Individual Community:
Edmond Community 72.6% 89.9% 86.8% 92.4% 93.0%
Southwest OKC Community N/A 62.0% 93.5% 99.3% 93.0%
Combined Communities:
Avg. Beds Available 46.0 84.3 92.0 92.0 92.0
Avg. Beds Occupied 33.4 65.1 82.9 88.2 85.6
Total Occupancy 72.6% 77.2% 90.1% 95.9% 93.0%
Source: Management
(1) The Edmond Community opened in March 2014.
(2) The Southwest OKC Community opened in March 2015.
(3) Average total occupancy for the year ending December 31, 2016 was 90.1 percent with an ending monthly occupancy for
December 2016 of 97.8 percent or 90 occupied beds.
(4) Average total occupancy from January 1, 2017 to October 31, 2017 was 95.9 percent with an ending monthly occupancy for
October 2017 of 97 percent or 89 occupied beds.
(5) Management is licensed for a total of 100 licensed beds, and Management plans to operate 92 of the beds during the forecast
period. For the purpose of the occupancy table above, available beds are shown at 92.

The double occupancy rate for the memory care beds is assumed to approximate five percent of
the Communities’ total occupied memory care beds during the forecast period.

See Independent Accountants’ Examination Report

D-44
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Other Revenue
Other revenue includes resident meals and snacks, additional laundry and transportation services,
guest meals, guest apartment rentals, barber and beauty fees, application fees, pet fees and other
miscellaneous sources. Additionally, other revenue is generated from health care fees which
include therapies, incontinence fees, medical supplies, and other billable ancillary services. These
revenues are assumed to increase 3.0 percent annually throughout the forecast period.

Investment Income
Management has assumed a 2.0 percent annual rate of return on the Corporation’s unrestricted
cash and investments. Based upon information provided by the Underwriter, Management has
assumed average annual rates of return of 1.0 percent on the Working Capital Fund, 0.5 percent
on the Bond Fund and 2.35 percent on the Debt Service Reserve Funds.

See Independent Accountants’ Examination Report

D-45
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Summary of Operating Expense Assumptions

Operating expenses are estimated by Management based on its experience with the development
and operation of other similar senior housing communities. Staff salaries and benefits are based
on prevailing local salary and wage rates and are assumed to increase 3.0 percent annually
throughout the forecast period. The cost of employee fringe benefits, consisting primarily of
payroll taxes, health insurance and other costs for the Communities’ employees are assumed to be
approximately 13 percent during the forecast period. The following table summarizes the assumed
staffing levels for all departments.

Table 14
Schedule of Staffing Levels (FTEs)
Edmond Southwest OKC Total
Community Community FTE’s (1)
By Department:
Activity 2.0 2.0 4.0
Administration 20.4 20.4 40.8
Memory Care 3.1 3.1 6.2
Dining 1.5 1.5 3.0
Housekeeping 2.4 2.4 4.8
Maintenance 1.0 1.0 2.0
Marketing 1.0 1.0 2.0
Total FTE’s 31.4 31.4 62.8
Source: Management
(1) Management has assumed the stabilized FTE staffing to be approximately 62.8 during the forecast period.

Other non-salary operating expenses are assumed to include ongoing marketing costs, raw food
costs, utilities, supplies, maintenance and security contracts, building and general liability
insurance, legal and accounting fees, nursing provider taxes and other miscellaneous expenses.
The cost of these non-salary operating expenses is assumed to increase 3.0 percent annually
throughout the forecast period.

Management assumes that the Communities will receive an exemption from ad valorem property
taxes upon conversion to a nonprofit entity. Management has estimated annual tax expense
savings of approximately $130,000 per year during the forecast period.

See Independent Accountants’ Examination Report

D-46
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Assets Limited as to Use

The Trustee is assumed to maintain the following funds under the terms of the Indenture:
(1) Separate Debt Service Reserve Funds for certain series of Series 2017 Bonds, to be funded at
closing with Series 2017 Bond proceeds and is assumed to be available to pay debt service in
the year that the Series 2017 Bonds are repaid in full.
(2) Separate Bond Funds for each series of Series 2017 Bonds, to contain the principal and interest
payments to be used for payment of debt service on the applicable series of Series 2017 Bonds.
(3) Surplus Fund, is assumed to be funded with excess gross receipts after deposits required
pursuant to the Indenture. Beginning in fiscal year 2020, the Excess Surplus Fund Amount (as
defined in the Indenture) within the Surplus Fund is to be used to transfer cash to the Repair
and Replacement Fund and for extra redemptions for the Series 2017C Bonds (third tier bonds).
(4) Operations and Maintenance Reserve Fund, is assumed to be available to the Corporation for
maintenance and repair costs, principal and interest costs, and operating expenses pursuant to
the Indenture. As withdrawals are made from the Operations and Maintenance Reserve Fund,
the balance is assumed to be replenished to a balance of 30 days of total operating expenses.
The Operations and Maintenance Reserve Fund is to be funded to 30 days of total operating
expenses in calendar years 2018 and thereafter.
(5) Operating Fund, is assumed to be available to the Corporation for monthly operating expenses.
It is assumed to be funded monthly from gross receipts and equal to one month’s budgeted
operating expenses less the cash in the Corporation’s Operating Account. It will be funded at
closing in the amount of $750,000.
(6) Repair and Replacement Fund, beginning on January 1, 2018 and each month thereafter, is
assumed to be funded with cash flows from operations. Pursuant to the Indenture, the minimum
annual balance is equal to $275 per available unit, approximately $23,650. For the purposes of
the Forecast, Management anticipates spending down the Repair and Replacement Fund
annually for annual capital expenditures. Beginning in fiscal year 2020, 25 percent of the
Excess Surplus Fund, as defined in the Indenture, is to be funded into the Repair and
Replacement Fund until balance reaches $250,000.

See Independent Accountants’ Examination Report

D-47
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Property and Equipment and Depreciation Expense

The Communities are to incur routine capital additions during the forecast period that are to be
capitalized as property and equipment. Depreciation expense for all capital assets is computed
based on the straight-line method for buildings and equipment over estimated average useful lives
ranging from 10 to 35 years.

The Corporation’s property and equipment costs, net of accumulated depreciation, during the
forecast period are summarized in the table below.

Table 15
Schedule of Property and Equipment
(In Thousands)
Fiscal Year Ending
December 31, 2017 2018 2019 2020 2021
Property and equipment, gross
Beginning balance $ - $ 26,440 $ 26,540 $ 26,655 $ 26,785
Capital Additions 25,500 - - - -
Gain on bargain purchase 940 - - - -
Routine capital additions - 100 115 130 145
Property and equipment, gross $ 26,440 $ 26,540 $ 26,655 $ 26,785 $ 26,930
Accumulated depreciation - (860) (1,732) (2,617) (3,516)
Property and equipment, net
ending balance $ 26,440 $ 25,680 $ 24,923 $ 24,168 $ 23,414
Source: Management

See Independent Accountants’ Examination Report

D-48
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Debt and Interest Expense

Series 2017 Bonds
During the forecast period, the Corporation intends to cause the issuance of the Series 2017 Bonds
to (i) finance the costs of the Project Acquisition (ii) fund debt service reserve funds for the Series
2017B Bonds and Series 2017C Bonds, (iii) fund an Operating Fund for working capital purposes,
and (iv) pay costs of issuance of the Series 2017 Bonds.

The Series 2017 Bonds are assumed to consist of multiple series of bonds in the aggregate principal
amount of $30,235,000 to be issued with discounts and premiums, with assumed coupon rates and
average yields ranging from 3.25 to 7.00 percent per annum. Interest on the Series 2017 Bonds is
to be payable January 1 and July 1 of each year beginning July 1, 2018. Principal on the Series
2017 Bonds is to be paid semiannually on January 1 and July 1 of each year beginning January 1,
2019 with a final maturity on July 1, 2053. The following tables present the assumed annual debt
service for the Series 2017 Bonds during the forecast period and thereafter.

Table 16
Schedule of Series 2017 Bonds
Annual Debt Service
(In Thousands)
Amortized Additional
Year Ending Principal Principal Interest Total
December 31, Payments Payments(2) Payment Debt Service
2018 (1) $ - $ - $ 685 $ 685
2019 385 - 1,337 1,722
2020 400 630 1,322 2,352
2021 410 - 1,264 1,674
Total $ 1,195 $ 630 $ 4,608 $ 6,433
Source: Management and the Underwriter
(1) Interest on the Series 2017 Bonds is to be payable January 1 and July 1 of each year beginning July 1, 2018.
(2) Beginning in FY 2020 and as required under the Indenture, Management is to pay additional principal on the Series 2017C
Bonds from all unrestricted cash and investments in excess of 50 Days’ Cash on Hand. The Corporation’s excess cash above
50 Days’ Cash on Hand is to be split 75/25 between principal on the Series 2017C Bonds and the Repair and Replacement
Fund, respectively.

D-49
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Series 2017A Bonds

The Series 2017A Bonds are assumed to consist of A+ rated taxable and tax-exempt fixed rate
bonds with the following rates and maturities:

x $14,440,000, 5-year to 35-year tax-exempt term bonds with an average interest rate ranging
from 3.25 to 4.25 percent annum; and
x $3,125,000, 5-year to 15-year taxable term bonds with average interest rates ranging from 3.25
to 4.625 percent annum.

Series 2017B Bonds

The Series 2017B Bonds are assumed to consist of BBB rated tax-exempt fixed rate bonds totaling
$12,030,000 composed of 5-year to 35-year term bonds with average interest rates ranging from
4.00 to 5.00 percent annum.

Series 2017C Bonds

The Series 2017C Bonds are assumed to consist of tax-exempt unrated rated fixed rate bonds
totaling $640,000 composed 35-year term bonds with average interest rates of 7.00 percent annum.

D-50
 Summary of Significant Forecast Assumptions
Leading Life Senior Living Inc. and Accounting Policies, Continued

Consulting Agreement

The Corporation has engaged McFarlin Group, LLC, a Texas limited liability company, (the
“Consultant”) to perform services relating to the acquisition which include: due diligence
gathering and review, advisory and related services relating to the Project Acquisition of the
Communities. The Corporation will pay the Consultant a consulting fee of one percent (1.0%) of
the purchase price (the “Consulting Fee”) of the Communities, approximately $255,000.
Additionally, the Consultant is to provide funds to the Corporation in an amount not to exceed
$400,000 to pay for pre-finance expenditures (e.g., due diligence related costs and expenses,
earnest money payments, etc.) (“Seed Capital”) for the Project Acquisition of the Communities.
As additional compensation, the Consultant will earn a one hundred percent (100.0%) return (the
“Seed Capital Return”) on the Seed Capital. The Consulting Fee and Seed Capital Return are due
upon the issuance of the Series 2017 Bonds.

Current Assets and Current Liabilities

Operating expenses exclude amortization, depreciation, other non-cash expenses and interest
expense. Operating revenues include the monthly and daily services fees for each Community and
other revenues. Working capital components have been estimated based on industry standards and
Management’s historical experience as follows:

Table 17
Working Capital – Days on Hand
Accounts receivables 10 days operating revenues
Inventory 2 days operating expenses
Prepaid expenses 11 days operating expenses
Accounts payable 25 days operating expenses
Accrued expenses 14 days operating expenses
Source: Management

D-51
Leading Life Senior Living Inc. Supplemental Disclosure

INDEPENDENT ACCOUNTANTS’ REPORT ON

SUPPLEMENTAL INFORMATION

Board of Trustees
Leading Life Senior Living, Inc.
Dallas, Texas

Our examination of the financial forecast presented in the preceding section of this document was
made for the purpose of forming an opinion on whether the financial forecast is presented in
conformity with AICPA guidelines for the presentation of a forecast and that the underlying
assumptions provide a reasonable basis for the forecast. The study was undertaken to evaluate the
Corporation’s ability to generate sufficient funds to meet its operating expenses, working capital
needs and other financial requirements, including the debt service requirements associated with
the proposed Series 2017 Bonds based on Management’s assumptions of future operations of the
Corporation. However, future events could occur which could adversely affect the financial
forecast of the Corporation and its ability to meet debt service requirements. These factors include,
among others, legislation and regulatory action, changes in assumptions concerning occupancy,
per diem rates, financing and operating costs.

The accompanying supplemental analysis is presented for purposes of demonstrating the

significance of certain assumptions and is not a required part of the financial forecast nor
considered an all-inclusive list. Such information has not been subjected to procedures applied in
the examination of the financial forecast and, accordingly, we express no opinion or any other
form of assurance on it.

Atlanta, Georgia
December 7, 2017

D-52
Leading Life Senior Living Inc. Supplemental Disclosure

Sensitivity Analysis I – Occupancy

Occupancy rates can vary depending upon economic conditions, the competitive and regulatory
environments, and Management’s ability to execute the marketing and admission plans. The
period of time it takes to achieve and maintain stabilized occupancy could be longer than
Management has assumed in the accompanying forecast.

Management assumes stabilized occupancy of approximately 93.0 percent is to be achieved and

maintained throughout the forecast period. The period of time it takes to achieve and maintain
stabilized occupancies could be longer than Management has assumed in the accompanying
forecast.
Sensitivity Analysis IA

The data presented in the table below demonstrates the financial impact if the Communities were
not occupied as assumed during the forecast period. In this analysis, occupancy of the
Communities is reduced by 5.0 percent to an occupancy level of approximately 88.0 percent
without corresponding a adjustment to certain fixed or staffing expenses.
Sensitivity Analysis IB

The data presented in the table below provides a “Breakeven Analysis” assuming a lower stabilized
occupancy such that the Maximum Annual Debt Service Coverage Ratio would approximate 1.00x
without a corresponding adjustment to certain fixed or staffing expenses.

Table 18
Sensitivity Analysis – I
Estimated Financial Information
For the Year Ending December 31, 2018
As Forecasted Sensitivity IA Sensitivity IB

Communities Average Occupancy 93.0% 88.0% 82.0%

Debt Service Coverage Ratio (1)(2) 1.47x 1.25x 1.00x
Days Cash on Hand (1)(2) 95 75 54
Source: Management
(1) For purposes of the sensitivity analysis, occupancy was reduced without a corresponding adjustment to certain fixed or
staffing expenses. Additionally, the Management Fee was assumed to be paid as forecasted.
(2) For purposes of the sensitivity analysis, the assumed amortization schedule for the repayment of the Series 2017 Bonds
and the Surplus Fund redemption payments to the Series 2017C Bonds remained as originally forecasted.

D-53
Leading Life Senior Living Inc. Supplemental Disclosure

Sensitivity Analysis II – Property Tax Expense

Management assumes that the Communities will receive an exemption from ad valorem property
taxes upon conversion to a nonprofit entity. Management has estimated annual tax expense
savings of approximately $130,000 during the forecast period.

The data presented in the table below are provided to demonstrate the impact on the overall
financial performance of the Communities assuming the property tax exemption is not received.

Table 19
Sensitivity Analysis – II
Estimated Financial Information
For the Year Ending December 31, 2018
As Forecasted Sensitivity II

Property Taxes $130,000 $130,000

Exemption ($130,000) $ –
Property Taxes, Net $ – $130,000
(1)(2)
Debt Service Coverage Ratio 1.47x 1.38x
Days Cash on Hand (1)(2) 95 84
Source: Management
(1) For purposes of the sensitivity analysis, the Management Fee was assumed to be paid as forecasted.
(2) For purposes of the sensitivity analysis, the assumed amortization schedule for the repayment of the Series 2017 Bonds
and the Surplus Fund redemption payments to the Series 2017C Bonds remained as originally forecasted.

D-54
Leading Life Senior Living Inc. Supplemental Disclosure

Sensitivity Analysis III – Competition

Management assumes that Autumn Leaves of Edmond will maintain stabilized occupancy despite
an increase in new competition within the Edmond PMA area. Management has estimated that
they will continue to have a 93.0 percent stabilized occupancy during the forecast. Due to
competition Autumn Leaves of Edmond’s period of time to achieve and maintain stabilized
occupancies could be longer than Management has assumed in the accompanying forecast.

Sensitivity IIIA

The data presented in the table below demonstrates the financial impact if Autumn Leaves of
Edmond was not occupied as assumed during the forecast period. In this analysis, only occupancy
at Autumn Leaves of Edmond is reduced by 5.0 percent to an overall occupancy of 88 percent
without a corresponding adjustment to certain fixed or staffing expenses.

Sensitivity IIIB

The data presented in the table below demonstrates the financial impact if Autumn Leaves of
Edmond was not occupied as assumed during the forecast period. In this analysis, only occupancy
at Autumn Leaves of Edmond is reduced by 10.0 percent to an overall occupancy of 83 percent
without a corresponding adjustment to certain fixed or staffing expenses.

Table 19
Sensitivity Analysis – III
Estimated Financial Information
For the Year Ending December 31, 2018
As Forecasted Sensitivity IIIA Sensitivity IIIB

Occupancy
Autumn Leaves of Edmond 93.0% 88.0% 83.0%
Autumn Leaves of SW Oklahoma 93.0% 93.0% 93.0%
Communities Average Occupancy 93.0% 91.0% 88.0%
Debt Service Coverage Ratio (1)(2) 1.47x 1.37x 1.26x
Days Cash on Hand (1)(2) 95 85 75
Source: Management
(1) For purposes of the sensitivity analysis, occupancy was reduced without a corresponding adjustment to certain fixed or staffing
expenses. Additionally, the Management Fee was assumed to be paid as forecasted.
(2) For purposes of the sensitivity analysis, the assumed amortization schedule for the repayment of the Series 2017 Bonds and
the Surplus Fund redemption payments to the Series 2017C Bonds remained as originally forecasted.

D-55
[This page intentionally left blank.]
 APPENDIX E

SUMMARY APPRAISAL REPORT

[This page intentionally left blank.]
Restricted Report for Appraisals Of:
Bulk Portfolio Valuation of 2 Senior Housing Assets
Autumn Leaves Portfolio
Edmond and Oklahoma City, Oklahoma
Prepared for: Leading Life Senior Living, Inc.

JLL File Number: 1400-17-134137

© RDate
by JLL Valuation
 700 E. Campbell Road, Suite 265, Richardson, TX 75081
Phone: 972 960 1222 Fax: 972 960 2922

December 1, 2107

Mr. Robert W. Mosteller

Leading Life Senior Living, Inc.
6370 LBJ Freeway
Suite 276
Dallas, Texas 75240

Subject: Bulk Portfolio Valuation

2 Autumn Leaves Properties
Edmond and Oklahoma City, Oklahoma

Pursuant to your request, this is a Restricted Report that analyzes and reports the going concern market value in the
above referenced portfolio of 2 seniors housing assets. This letter constitutes a Restricted Appraisal Report, which is
intended to comply with the reporting requirements set forth in the Uniform Standards of Professional Appraisal Practice
for a Restricted Appraisal Report. As such, this letter presents only our relevant conclusions. Supporting documentation
concerning the data, reasoning, and analyses is retained in our files. The supporting appraisal reports were also
delivered to the client which are used as reference for the conclusions reported in this report.

Value Conclusion
Value Scenario Effective Date Value Conclusion
Market Value of the Specified Assets of the Business As Is
"Bulk Portfolio Value", Fee Simple Estate 1/11/2017 $27,360,000

The above conclusion reflects a portfolio premium. The subject properties were also appraised based upon the “going
concern” premise as an on-going business operation. Our value allocations are as follows:

As Is Value Indications
Value Allocation
Type of Effective
Property # Name Care Date Concluded Value Real Estate FF&E Intangibles
1 Autumn Leaves of Southwest Oklahoma City MC 11/09/17 $13,560,000 $11,170,000 $330,000 $2,060,000
2 Autumn Leaves of Edmond MC 11/09/17 $12,880,000 $10,520,000 $310,000 $2,050,000
Totals $26,440,000 $21,690,000 $640,000 $4,110,000

In addition, an investment value of the going concern assuming not-for-profit ownership and tax exempt status was
indicated using forecasted net operating income excluding tax liability. The following table shows the concluded values.
No portfolio premium is applicable:

As Is Value Indication - Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption
Value Allocation
Type of Effective
Property # Name Care Date Concluded Value Real Estate FF&E Intangibles
1 Autumn Leaves of Southwest Oklahoma City MC 11/09/17 $15,110,000 $12,150,000 $330,000 $2,630,000
2 Autumn Leaves of Edmond MC 11/09/17 $14,230,000 $11,370,000 $310,000 $2,550,000
Totals $29,340,000 $23,520,000 $640,000 $5,180,000

Our valuation is based on terms of cash and a reasonable exposure time of six months prior to the effective date of
value. The estimated marketing period is also six months. The Specified Assets of the Business exclude certain items
not normally conveyed, such as cash on hand, accounts receivable, accounts payable, management company
Page 2

trademarks, and proprietary management systems. Please refer to the Assumptions and Limiting Conditions section
where any Extraordinary Assumptions and Hypothetical Conditions specific to this engagement are discussed.

We appreciate this opportunity to provide our valuation services to Leading Life Senior Living, Inc.

JLL Valuation and Advisory Services, LLC

James Redford, MAI

Senior Vice President
Oklahoma Certified General Appraiser #13191CGA
Telephone: 817-334-8134
Email: [email protected]

Keri Redford, MAI

Senior Vice President
Oklahoma Certified General Appraiser #13083CGA
Telephone: 817-334-8138
Email: [email protected]

Brian L. Chandler, MAI, CRE, FRICS

Executive Vice President
Oklahoma Certified General Appraiser #12945CGA
Telephone: 214-396-5423
Email: [email protected]
Certification 3

Certification
I hereby certify that, to the best of our knowledge and belief:

x The statements of fact contained in this report are true and correct.
x The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting
conditions and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions.
x I have no present or prospective interest in the property that is the subject of this report and no personal
interest with respect to the parties involved.
x I have no bias with respect to the property that is the subject of this report or to the parties involved with this
assignment.
x Our engagement in this assignment was not contingent upon developing or reporting predetermined results.
x Our compensation for completing this assignment is not contingent upon the development or reporting of a
predetermined value or direction in value that favors the cause of the client, the amount of the value opinion,
the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended
use of this appraisal.
x Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity
with the Uniform Standards of Professional Appraisal Practice.
x James Redford, MAI has made a personal inspection of the property that is the subject of this report. Keri
Redford, MAI has not made a personal inspection of the property that is the subject of this report. Brian L.
Chandler, MAI, CRE, FRICS has not made a personal inspection of the property that is the subject of this
report.
x No other persons provided significant real property appraisal assistance to the persons signing this
certification.
x I certify that, to the best of my knowledge and beliefs, the reported analyses, opinions, and conclusions were
developed and this report has been prepared in conformity with the requirements of the Code of Professional
Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.
x I certify that the use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
x USPAP 2016-17 requires the appraiser to disclose “any services regarding the subject property performed by
the appraiser within the three year period immediately preceding acceptance of the assignment, as an
appraiser or in any other capacity.” Pursuant to that requirement, to the best of our knowledge, we:
o Have not performed any services in connection with the subject property within the three-year period
immediately preceding acceptance of this assignment, either as an appraiser or in any other capacity.
x As of the date of this report, James Redford, MAI has completed the continuing education requirements of the
Appraisal Institute. As of the date of this report, Keri Redford, MAI has completed the continuing education
requirements of the Appraisal Institute. As of the date of this report, Brian L. Chandler, MAI, CRE, FRICS has
completed the continuing education program for Designated Members of the Appraisal Institute. A

Autumn Leaves Portfolio

Certification 4

x Various analysts employed by JLL Valuation and Advisory Services, LLC procured the comparable data used
in this report.

James Redford, MAI

Senior Vice President
Oklahoma Certified General Appraiser #13191CGA
Telephone: 817-334-8134
Email: [email protected]

Keri Redford, MAI

Senior Vice President
Oklahoma Certified General Appraiser #13083CGA
Telephone: 817-334-8138
Email: [email protected]

Brian L. Chandler, MAI, CRE, FRICS

Executive Vice President
Oklahoma Certified General Appraiser #12945CGA
Telephone: 214-396-5423
Email: [email protected]

Autumn Leaves Portfolio

Table of Contents 5

Table of Contents
Page No.
Letter of Transmittal............................................................................................................................................... 1
Certification............................................................................................................................................................. 3
Table of Contents ................................................................................................................................................... 5
Summary of Salient Facts and Conclusions ....................................................................................................... 6
General Information ............................................................................................................................................... 8
Assumptions and Limiting Conditions .............................................................................................................. 13
Portfolio Premium ................................................................................................................................................ 17
Income Capitalization - Direct Capitalization .................................................................................................... 18
Conclusion ............................................................................................................................................................ 21

Autumn Leaves Portfolio

Summary of Salient Facts and Conclusions 6

Summary of Salient Facts and Conclusions

Property Name: 2 Autumn Leaves Facilities

Property Identification -
Street Address: Various Locations
Municipality: Oklahoma City and Edmond Oklahoma
County: Cleveland
State: Oklahoma
Zip: Various Locations

Purpose of the Appraisal:

To estimate the value of the going concern under the following scenario(s):
Market Value of the Specified Assets of the Business As Is "Bulk Portfolio
Value", Fee Simple Estate
Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax
Exemption
Market Value of the Specified Assets of the Business As Is, Fee Simple Estate
(For the Individual Properties)

Assets and Property Rights Appraised -

Assets Appraised: All assets of the business enterprise including real property, FF&E and business
value
Property Rights Appraised: Fee Simple, Investment Value

Certified Appraisers: James Redford, MAI Keri Redford, MAI

Certification Types: Certified General Certified General

Certified Appraisers: Brian L. Chandler, MAI, CRE, FRICS

Certification Types: Certified General

Autumn Leaves Portfolio

Summary of Salient Facts and Conclusions 7

Improvement Summary -
Property Type: Seniors housing
Care Provided: Memory Care Assisted Living
Year of Construction: 2014 (OKC) and 2012 (Edmond)
Number of Properties: 2
Nursing Units: 0
Assisted Living Units: 0
Dementia Care Units: 86
Independent Living Units: 0
Total Units: 86

Highest & Best Use Summary -

As Vacant: Varies by property
As Improved: Continued use as a seniors housing facility

Occupancy Analysis -
Current Occupancy: 91.8%
Stabilized Occupancy Forecast: 93.0%

Autumn Leaves Portfolio

 General Information 8

General Information
Identification of the Subjects
Portfolio Identification
Property # Name Address City State Type Property Rights Year Built Total Units MC Units MC Beds Occupancy Stabilized
1 Autumn Leaves of Southwest Oklahoma City 2232 SW 104th Street Oklahoma City OK MC Fee Simple 2014 44 44 50 89.8% Yes
2 Autumn Leaves of Edmond 1001 S. Bryant Avenue Edmond OK MC Fee Simple 2012 42 42 48 93.8% Yes
Totals 86 86 98 91.8%

Purpose of the Appraisal

The purpose of this appraisal is to estimate the market value of the subject under the following scenario(s):

x Market Value of the Specified Assets of the Business As Is "Bulk Portfolio Value", Fee Simple Estate
x Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption
x Market Value of the Specified Assets of the Business As Is, Fee Simple Estate (For the Individual
Properties)

Client, Intended User(s) and Intended Uses(s)

Leading Life Senior Living, Inc. is the intended user of this report. The intended use is underwriting bond financing to be
secured by the subject.

Pertinent Dates
The pertinent dates include the date of inspection, which occurred on November 9, 2017 for both assets. The Market
Value of the Specified Assets of the Business As Is "Bulk Portfolio Value", Fee Simple Estate is November 9, 2017.
The Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption is also as of November 9,
2017. This restricted report was completed on December 1, 2017.

Prior Services
USPAP 2016-17 requires the appraiser to disclose “any services regarding the subject property performed by the
appraiser within the three year period immediately preceding acceptance of the assignment, as an appraiser or in any
other capacity.” Pursuant to that requirement, to the best of our knowledge, we:

x Have not performed any services in connection with the subject property within the three-year period
immediately preceding acceptance of this assignment, either as an appraiser or in any other capacity.
Definition of Market Values
For purposes of this appraisal, market value and as is market value are defined as:

Market value: The most probable price which a property should bring in a competitive and open market,
under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably,
and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of
a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider their own best
interests;

3. A reasonable time is allowed for exposure in the open market;

Autumn Leaves Portfolio

General Information 9

4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable
thereto; and

5. The price represents the normal consideration for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated with the sale.1

As Is Market Value: The estimate of the market value of real property in its current physical condition,
use, and zoning as of the appraisal’s effective date. 2

Assets Appraised
Seniors housing and health care assets are generally considered to be business enterprises and may have value in
excess of the real estate value. Such assets can be valued based upon the liquidation premise or the going concern
premise. The liquidation premise would only be used if the highest and best use of the asset is to sell the component
parts separately. This is not the case with the subject, so the subject is valued based upon the going concern premise.
The term going concern is defined as follows:

One of the premises under which the total assets of a business (TAB) can be valued; the assumption that
a company is expected to continue operating well into the future (usually indefinitely). Under the going
concern premise, the value of a business is equal to the sum of the value of the tangible assets and the
value of the intangible assets, which may include the value of excess profit, where asset values are
derived consistent with the going concern premise. 3

When a property is valued based upon the going concern premise, the valuation may include real estate, FF&E and
intangibles. These assets in total compromise the Total Assets of a Business (TAB), defined as follows:

The tangible property (real property and personal property, including inventory and furniture, fixtures and
equipment) and intangible property (cash, workforce, contracts, name, patents, copyrights and other
residual intangible assets, to include capitalized economic profit).4

When appraised based upon the going concern premise, the Market Value of the Total Assets of the Business (MVTAB)
is defined as follows:

The market value of all of the tangible and intangible assets of a business as if sold in aggregate as a
going concern.5

Definitions of the components that compromise the TAB are as follows:

Real property: All interests, benefits, and rights inherent in the ownership of physical real estate; the
bundle of rights with which the ownership of the real estate is endowed. In some states, real property is
defined by statute and is synonymous with real estate.6

1. 12 C.F.R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990 as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994.

2. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

3. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

4. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition)

5. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition)

6. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

Autumn Leaves Portfolio

General Information 10

Furniture, fixtures and equipment (FF&E): The movable property of a business enterprise not
classified as stock or inventory or leasehold improvements; frequently found in the ownership of hotels or
motels, restaurants, assisted living facilities, service stations, car washes, greenhouses and nurseries,
and other service intensive properties. Furniture, fixtures and equipment frequently wears out much more
rapidly that other components of those properties. 7

Business enterprise value: A term applied to the concept of the value contribution of the total intangible
assets of a continuing business enterprise such as marketing and management skill, an assembled
workforce, working capital, trade names, franchises, patents, trademarks, contracts, leases, and
operating agreements.8

However, it should be noted that some of the assets included in the definition of TAB are not commonly included in the
value or sale of a seniors housing facility. Items normally excluded are: cash on hand, working capital, accounts
receivable, and accounts payable. As such, our valuation focuses upon the specified assets of the business, which
excludes the items noted.

Property Rights Appraised

Definitions of the three major classes of property rights are as follows:

Fee simple estate: Absolute ownership unencumbered by any other interest or estate, subject only to
the limitations imposed by the governmental powers of taxation, eminent domain, police power, and
escheat.9

Leased fee interest: A freehold (ownership interest) where the possessory interest has been granted to
another party by creation of a contractual landlord-tenant relationship (i.e., a lease).10
Leasehold estate: The tenant’s possessory interest created by a lease.11

Investment Value: The value of a property interest to a particular investor or class of investors based on
the investor’s specific requirements. Investment value may be different from market value because it
depends on a set of investment criteria that are not necessarily typical of market.12

The property rights valued in this appraisal are Fee Simple. As previously stated, we have also provided an investment
value based on not-for-profit ownership and ad valorem tax exemption.

Inspection
James Redford, MAI has conducted an inspection of the subject, which included common areas and a sample of living
units. Keri Redford, MAI has not conducted an inspection of the subject. Brian L. Chandler, MAI, CRE, FRICS has not
conducted an inspection of the subject.

7. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

8. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

9. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

10. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

11. The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

12 The Dictionary of Real Estate Appraisal (Chicago, IL: Appraisal Institute, Fifth Edition).

Autumn Leaves Portfolio

General Information 11

Approaches to Value
In appraising the subjects, we have applied the approaches to value as follows:

Approaches to Value
Approach to Value Developed Applicability
Income Capitalization - Direct Capitalization Yes Highly applicable

Sales Comparison No Not Utilized

Cost No Not Utilized

The direct capitalization method of income capitalization was developed. The income capitalization process is well
supported and highly pertinent to the appraisal of income property such as the subject. Market rent was estimated after
a review of competing local properties. Total income and expenses were estimated based upon analysis of similar
income and expense comparables with consideration to the subject’s historical expenses. This is the approach most
utilized in the market and is considered the most relevant approach to valuing the subject.

The sales comparison approach and cost approach were not developed. Market participants rely upon sales to provide
general ranges for valuation purposes but generally place much more weight in the income approach. In addition, the
cost approach is typically only reliable for new or nearly new properties in which estimating depreciation is more
accurate.

Report Type
Per Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice, this report is intended to comply
with the requirements for a Restricted Report, which states the major conclusions without discussion of the data
considered and the analysis conducted.

Compliance
We have developed this appraisal in compliance with:

x The requirements of the Code of Ethics and the Standards of Professional Practice of the Appraisal Institute;
x The Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Foundation; and
x FIRREA Title XI, 12 CFR Part 323 (FDIC) and 12 CFR Part 34 (RTC).

Ownership, History and Management of the Subject

USPAP Standards Rules 1-5(a) and (b) require an appraiser, when the value opinion to be developed is market value,
and if such information is available to the appraiser in the normal course of business, to analyze (1) all agreements of
sale, options, or listings of the subject property current as of the effective date of the appraisal and (2) all sales of the
subject property that occurred within three years prior to the effective date of the appraisal. The subject’s current
ownership, ownership history, current status, and management are discussed below.

Autumn Leaves Portfolio

General Information 12

Current Ownership
Oklahoma City: The subject is currently owned by Southwest Oklahoma City Memory Care, LLC and managed by
LaSalle Group, Inc.

Edmond: The subject is currently owned by Edmond Memory Care LLC and managed by LaSalle Group, Inc.

Ownership History
There has been no sale or transfer of either subject property in the last three years.

Current Status
The individual property ownership was discussed above. The subject is under contract to sell to Leading Life Senior
Living, Inc. Details of the sales follow:

Contract of Sale
Grantor (Seller): Southwest Oklahoma City Memory Care, LLC and Edmond Memory
Care LLC
Grantee (Buyer): Leading Life Senior Living, Inc.
Proposed Date of Closing: Year End December 2017
Sales Price: $13,500,000 for Oklahoma City and $12,000,000 for Edmond, or
$25,500,000 jointly
Sale Included: Site and existing buildings known as -
Autumn Leaves of Southwest Oklahoma City
Autumn Leaves of Edmond
Total Units/Beds: 86 Units, 98 Beds
Financing: Cash to Seller
Conditions of Sale: Going Concern

The properties are assisted living memory care facilities that were constructed between 2012 and 2014. Both
properties are stabilized facilities. Separate purchase agreements were provided for each asset. Based on our
valuation of the portfolio, the purchase price is within market parameters.

Management
Autumn Leaves was founded in the late 1990’s by two Michigan families who had a driving passion for providing care to
those in need. The families had experience in both business and Alzheimer’s care, and they each recognized a great
need for better and more specialized dementia care. After moving to Texas, they opened their first Autumn Leaves
community in Arlington, Texas in 2000. Encouraged by the reception of Autumn Leaves of Arlington, they opened their
second community in Carrollton, Texas in 2002. Autumn Leaves continued to grow at a smart, steady pace as they set
themselves apart as a leader in memory care, unwavering in the company’s founding commitment to providing
unsurpassed care to seniors with memory impairment.

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Assumptions and Limiting Conditions 13

Assumptions and Limiting Conditions

The use of this report is subject to the following assumptions and limiting conditions:

x All reports and work product we deliver to you (collectively called “report”) represents an opinion of value,
based on historical information and forecasts of market conditions. Actual results may vary from those forecast
in the report. There is no guaranty or warranty that the opinion of value reflects the actual value of the property.
x The conclusions stated in our report apply only as of the effective date of the appraisal, and no representation
is made as to the effect of subsequent events. Assessed values may change significantly and unexpectedly
over short periods. We are not liable for any conclusions in the report that may be different if there are
subsequent changes in value. We are not liable for loss relating to reliance upon our report more than three
months after its date.
x There may be differences between projected and actual results because events and circumstances frequently
do not occur as predicted, and those differences may be material. We are not liable for any loss arising from
these differences.
x We are not obligated to predict future political, economic or social trends. We assume no responsibility for
economic factors that may affect or alter the opinions in the report if the economic factors were not present as
of the date of the letter of transmittal accompanying the report.
x The report reflects an appraisal of the property free of any liens or encumbrances unless otherwise stated.
x We assume responsible ownership and competent property management.
x The appraisal process requires information from a wide variety of sources. We have assumed that all
information furnished by others is correct and complete, up to date and can be relied upon, but no warranty is
given for its accuracy. We do not accept responsibility for erroneous information provided by others. We
assume that no information that has a material effect on our appraisal has been withheld.
x We assume the following, unless informed to the contrary in writing: Each property has a good and marketable
title. All documentation is satisfactorily drawn and that there are no encumbrances, restrictions, easements or
other adverse title conditions, which would have a material effect on the value of the interest under
consideration. There is no material litigation pending involving the property. All information provided by the
Client, or its agents, is correct, up to date and can be relied upon. We are not responsible for considerations
requiring expertise in other fields, including but not limited to: legal descriptions, interpretation of legal
documents and other legal matters, geologic considerations such as soils and seismic stability, engineering, or
environmental and toxic contaminants. We recommend that you engage suitable consultants to advise you on
these matters.
x We assume that all engineering studies correct. The plot plans and illustrative material in the report are
included only to help the reader visualize the property.
x We assume that there are no hidden or unapparent conditions of the property, subsoil or structures that render
it more or less valuable. We are not responsible for such conditions or for obtaining the engineering studies
that may be required to discover them.
x We assume that the property is in full compliance with all applicable federal, state, and local environmental
regulations and laws unless the lack of compliance is stated, described, and considered in the report. We have
not made or requested any environmental impact studies in conjunction with the report. We reserve the right to
revise or rescind any opinion of value that is based upon any subsequent environmental impact studies. If any
environmental impact statement is required by law, the report assumes that such statement will be favorable
and will be approved by the appropriate regulatory bodies.

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Assumptions and Limiting Conditions 14

x Unless otherwise stated in the report, you should assume that we did not observe any hazardous materials on
the property. We have no knowledge of the existence of such materials on or in the property; however, we are
not qualified to detect such substances, and we are not providing environmental services. The presence of
substances such as asbestos, urea-formaldehyde foam insulation and other potentially hazardous materials
may affect the value of the property. Our report assumes that there is no such material on or in the property
that would cause a loss in value. We do not assume responsibility for such conditions or for any expertise or
engineering knowledge required to discover them. We encourage you to retain an expert in this field, if
desired. We are not responsible for any such environmental conditions that exist or for any engineering or
testing that might be required to discover whether such conditions exist. We are not experts in the field of
environmental conditions, and the report is not an environmental assessment of the property.
x We may have reviewed available flood maps and may have noted in the report whether the property is
generally located within or out of an identified Special Flood Hazard Area. However, we are not qualified to
detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas
and/or wetlands may affect the value of the property. Any opinion of value we include in our report assumes
that floodplain and/or wetlands interpretations are accurate.
x The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific
survey or analysis of the property to determine whether it is in compliance with the ADA. We claim no expertise
in ADA issues, and render no opinion regarding compliance of the property with ADA regulations.
x We assume that the property conforms to all applicable zoning and use regulations and restrictions unless we
have identified, described and considered a non-conformity in the report.
x We assume that all required licenses, certificates of occupancy, consents, and other legislative or
administrative authority from any local, state, or national government or private entity or organization have
been or can be obtained or renewed for any use on which the opinion of value contained in the report is based.
x We assume that the use of the land and improvements is confined within the boundaries or property lines of
the property described and that there is no encroachment or trespass unless noted in the report.
x We have not made any investigation of the financial standing of actual or prospective tenants unless
specifically noted in the report. Where properties are valued with the benefit of leasing, we assume, unless we
are informed otherwise, that the tenants are capable of meeting their financial obligations under the leases, all
rent and other amounts payable under the leases have been paid when due, and that there are no
undisclosed breaches of the leases.
x We did not conduct a formal survey of the property and assume no responsibility for any survey matters. The
Client has supplied the spatial data, including sketches and/or surveys included in the report, and we assume
that data is correct, up to date and can be relied upon.
x Unless otherwise stated, the opinion of value included in our report excludes any additional value attributable
to goodwill, or to fixtures and fittings which are only of value, in situ, to the present occupier. We have made no
allowance for any plant, machinery or equipment unless they form an integral part of the building and would
normally be included in a sale of the building. We do not normally carry out or commission investigations into
the capacity or condition of services being provided to the property. We assume that the services, and any
associated controls or software, are in working order and free from defect. We also assume that the services
are of sufficient capacity to meet current and future needs.
x In the case of property where construction work is in progress, such as refurbishment or repairs, or where
developments are in progress, we have relied upon cost information supplied to us by the Client or its
appointed experts or upon industry accepted cost guides. In the case of property where construction work is in
progress, or has recently been completed, we do not make allowance for any liability already incurred, but not
yet discharged, in respect of completed work, or obligations in favor of contractors, subcontractors or any
members of the professional or design team. We assume the satisfactory completion of construction, repairs or

Autumn Leaves Portfolio

Assumptions and Limiting Conditions 15

alterations in a workmanlike manner.

x Any allocation in the report of value between the land and the improvements applies only under the stated
program of utilization. The separate values allocated to the land and buildings must not be used in conjunction
with any other appraisal and are invalid if so used.
x The report is confidential to the party to whom it is addressed and those other intended users specified in the
report for the specific purpose to which it refers. Use of the report for any other purpose or use by any party
not identified as an intended user of the report without our prior written consent is prohibited, and we accept no
responsibility for any use of the report in violation of the terms of this Agreement.
x We are not required to testify or provide court-related consultation or to be in attendance in court unless we
have agreed to do so in writing.
x Neither the whole report, nor any part, nor reference thereto, may be published in any manner without our prior
written approval.
x We may rely on, and will not verify, the accuracy and sufficiency of documents, information and assumptions
provided to it by the Client or others. We will not verify documents, information and assumptions derived from
industry sources or that JLL or its affiliates have prepared in the regular course of business. We are not liable
for any deficiency in the report arising from the inaccuracy or insufficiency of such information, documents and
assumptions. However, our report will be based on our professional evaluation of all such available sources of
information.
x JLL IS NOT LIABLE TO ANY PERSON OR ENTITY FOR LOSS OF PROFITS, CONSEQUENTIAL,
PUNITIVE, EXEMPLARY OR SIMILAR DAMAGES IN CONNECTION WITH THIS AGREEMENT. IN NO
EVENT SHALL THE LIABILITY OF JLL AND ITS AFFILIATES IN CONNECTION WITH THIS AGREEMENT
EXCEED THE FEE PAID TO JLL HEREUNDER.
x Unless expressly advised to the contrary, we assume that appropriate insurance coverage is and will continue
to be available on commercially acceptable terms.
x We assume that no material changes in any applicable federal, state or local laws, regulations or codes
(including, without limitation, the Internal Revenue Code) are anticipated.
x We may determine during the course of the assignment that additional Hypothetical Conditions and
Extraordinary Assumptions may be required in order to complete the assignment. The report will be subject to
those Hypothetical Conditions and Extraordinary Assumptions. Each person that is permitted to use the report
agrees to be bound by all the Assumptions and Limiting Conditions and any Hypothetical Conditions and
Extraordinary Assumptions stated in the report.

Autumn Leaves Portfolio

Assumptions and Limiting Conditions 16

Extraordinary Assumptions
USPAP defines an extraordinary assumption as “an assumption, directly related to a specific assignment, as of the
effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.”
Our appraisal is subject to the following extraordinary assumptions:

x The subject is valued based upon the going concern premise and is considered an on-going business
enterprise. Our market value conclusion(s) include real estate, FF&E, and some intangible items. The
allocation to the individual asset groups explicitly assumes the subject property will continue to operate as a
going concern. Any individual allocation of value represents an opinion of the contributory value of the asset to
the going concern. It is an extraordinary assumption of the appraisal that the asset allocations are part of a
continuing going concern and do not represent the value of these assets separate from the going concern. The
market value of the specified assets of the business is comprised of real property, personal property (FF&E),
and intangible (non-realty) assets, such as business enterprise value. If any one of the assets is removed from
the going concern, the remaining individual asset allocations of value may be rendered invalid. Furthermore, if
the subject property discontinued operating, then the real estate allocated value, as well as the allocated value
of the FF&E and business assets, may be much less than the reported value allocated to each component.
The appraisal industry has not set forth a generally agreed upon methodology for the allocation of market
value between real estate and non-realty items (FF&E and business assets). Differing allocation methods may
result in widely varying allocations of value. Any user of the appraisal should be aware of and fully understand
the above information.
x We are also providing a value of the property assuming the subject will have not-for-profit and tax exempt
status. As this is an investment value and the subject is currently a for-profit entity.
Hypothetical Conditions
USPAP defines a hypothetical condition as “a condition, directly related to a specific assignment, which is contrary to
what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of
analysis.” Our analysis is based upon the following hypothetical conditions:

x None

Autumn Leaves Portfolio

Portfolio Premium 17

Portfolio Premium
In order to arrive at a portfolio valuation we have interviewed participants familiar with portfolio purchases and analyzed
certain portfolios the appraisers were involved in and the buyer/seller’s opinion of what the portfolio premium was. The
results are shown in the following chart.

Market Participants
Company Discount/Premium
Greystone 10 to 15 bps Premium. Cap Rate of 5.5% as low
end.

Institutional Property Advisors - Marcus & Millichap 15% to 25% Premium

JLL Could see a slight premium for a 30+ ILF portfolio.

Not Lower than 5.5%, closer to 5.75%.

Sentio Investments (REIT) 25 bps premium. It is not as signficant as it was in

prior years. Of note is that they sold a portfolio in
2017 of 28+ assets.
Evans Senior Investments Portfolio Premium of 25 bps to 50 bps. Not lower
than 5.5%

It was discussed that in general, portfolio premiums are considered to have declined recently from previous levels over
the past several years. This is primarily a result of REIT activity which was significantly higher in previous years. The
majority of the discussions we had with participants noted the reduction in portfolio premiums. This was also recently
discussed by a panel at the NIC conference. It was also discussed that premiums are considered to be reduced with the
higher dollar volume with reference to over $500 million as a result of available parties that have the ability to purchase
a portfolio of that size and that larger portfolios can have operating challenges if they are too large from an overall
management perspective.

The following is a summary of portfolio transactions that have traded over the years:
Portfolio Transaction Comparables
Property Name ST/Prov Subtype Price/Units Cap Rate Sale Date Effective Sale Price Occ EGIM Year Built IL Units AL Units MC Units Total Units
3 Property Pennsylvania Portfolio PA IL, AL, MC $252,168 6.93% Jun-15 $87,250,000 95.0% 5.33 1986, 2000, & 2005 139 151 56 346
Solana Portfolio PA IL, AL, MC $574,561 5.75% Jun-16 $98,250,000 93.5% 7.48 2013 14 104 53 171
3 Property Keystone Portfolio in PA PA IL, AL, MC $271,654 6.92% Jan-17 $138,000,000 95.2% 5.29 2004-2014 274 173 61 508
3 Fox Ridge Properties AR IL, AL, MC $233,898 7.17% Dec-15 $69,000,000 99.0% 4.60 2001, 2007, 2008 69 202 24 295
3 Hearth Properties TN AL, MC $281,330 6.34% May-15 $110,000,000 61.0% 5.38 2012 & 2014 0 277 118 395
Hollinger Northeast MD AL $182,191 7.48% Mar-15 $54,475,000 94.0% 3.53 Various 0 200 99 299
5 CNL Properties GA IL, AL, MC $278,174 6.50% Aug-15 $195,000,000 93.1% 5.48 2001-2010 290 316 95 701
Aegis Portfolio WA AL, MC $360,870 4.45% Sep-15 $58,100,000 87.0% 4.67 1975, 1988, 1995 0 77 84 161
2 Property Emeritus Portfolio NY AL, MC $262,295 6.60% Dec-15 $48,000,000 93.0% 5.24 1999 & 2007 0 133 50 183
Pine Ridge Portfolio MI IL $191,375 7.27% Oct-16 $71,000,000 96.2% 5.58 1974-2006 371 0 0 371
Town Village Portfolio Various IL $220,049 6.34% Sep-16 $180,000,000 88.0% 6.66 2000, 2001, 2002 818 0 0 818
Hawthorne Portfolio Various Primarily IL $248,530 5.68% Sep-17 $1,395,000,000 89.6% n/a 2001 - 2016 4,923 619 71 5,613
Summary Low $182,191 4.45%
Average $279,758 6.45%
High $574,561 7.48%

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Income Capitalization - Direct Capitalization 18

Income Capitalization - Direct Capitalization

The income capitalization approach is based upon the premise that the present value of a property is based upon the
present worth of future benefits. There are two primary methods that are normally utilized in developing the income
capitalization approach. Development of the direct capitalization method is presented below.

The direct capitalization method is a method that converts an income estimate for a single year into an estimate of value
through the application of a capitalization rate. An overall capitalization rate (RO) is normally used. The RO reflects the
relationship between a single year’s income and value. The most common way to estimate overall capitalization rates is
via analysis of comparable sales. The direct capitalization method is developed in four basic steps:

x Analyze the market and contractual income for the subject.

x From available market data, estimate a proper allowance for vacancy and credit loss forecast to occur during
the projected period of ownership.

x Estimate and project anticipated fixed and operating expenses to be incurred by the real estate.

x Select and apply an appropriate capitalization rate.

It is noted that detailed income capitalization approaches are analyzed in each of the individual appraisals. The
following analysis is presented in a summary format given the restricted use report. The table on the following page
displays the individual asset valuations.

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Income Capitalization - Direct Capitalization 19

The table above displays the summary of the individual and total historical and forecasted occupancy.

Portfolio Historical & Forecasted Occupancy

Annualized 9 Current Stabilized
Months Ending 2018 Budget Occupancy Occupancy
Property # Name Total Units State 9/17 Occupancy 1/11/2017 Forecast
1 Autumn Leaves of Southwest Oklahoma City 44 OK 92.1% 86.8% 89.8% 92.0%
2 Autumn Leaves of Edmond 42 OK 88.3% 90.2% 93.8% 94.0%
Totals 86 90.2% 88.5% 91.8% 93.0%

The table above displays the summary of the individual and total historical and forecasted effective gross income.

Portfolio Historical & Forecasted Effective Gross Income

Annualized 9
Months Ending Stabilized EGI
Property # Name Total Units State 9/17 2018 Budget Forecast
1 Autumn Leaves of Southwest Oklahoma City 44 OK $3,273,355 $3,192,814 $3,270,009
2 Autumn Leaves of Edmond 42 OK $3,075,655 $3,221,223 $3,126,568
Totals 86 $6,349,010 $6,414,037 $6,396,577

The table above displays the summary of the individual and total historical and forecasted total expenses.

Portfolio Historical & Forecasted Total Expenses

Annualized 9 Stabilized
Months Ending Expense
Property # Name Total Units State 9/17 % of EGI 2018 Budget % of EGI Forecast % of EGI
1 Autumn Leaves of Southwest Oklahoma City 44 OK $2,256,362 68.9% $2,126,634 66.6% $2,218,190 67.8%
2 Autumn Leaves of Edmond 42 OK $2,073,849 67.4% $2,169,376 67.3% $2,160,534 69.1%
Totals 86 $4,330,211 68.2% $4,296,010 67.0% $4,378,724 68.5%

The table above displays the summary of the individual and total historical and forecasted net operating income.

Portfolio Historical & Forecasted Net Operating Income

Annualized 9
Months Ending Stabilized NOI
Property # Name Total Units State 9/17 % of EGI 2018 Budget % of EGI Forecast % of EGI
1 Autumn Leaves of Southwest Oklahoma City 44 OK $1,016,993 31.1% $1,066,180 33.4% $1,051,819 32.2%
2 Autumn Leaves of Edmond 42 OK $1,001,806 32.6% $1,051,847 32.7% $966,034 30.9%
Totals 86 $2,018,799 31.8% $2,118,027 33.0% $2,017,853 31.5%

The table above displays the summary of the individual income approaches. The following table displays the value of
the subject property as portfolio in bulk.
Portfolio Income Approach Summary
Direct Cap As
Stabilized Concessions Stabilized Stabilized Net Deductions/ Is Value Income
Property # Name State Occupancy /Loss to Lease Stabilized EGI Expenses Operating Income Cap Rate Value Additions (Rounded) Conclusion
1 Autumn Leaves of Southwest Oklahoma City OK 92.0% 0.00% $3,270,009 $2,218,190 $1,051,819 7.75% $13,571,858 $15,000 $13,590,000 $13,590,000
2 Autumn Leaves of Edmond OK 94.0% 3.00% $3,126,568 $2,160,534 $966,034 7.50% $12,880,453 $0 $12,880,000 $12,880,000
Totals 93.0% 1.50% $6,396,577 $4,378,724 $2,017,853 7.63% $26,452,311 $15,000 $26,470,000 $26,470,000

We conclude a capitalization rate as shown in the following table to be appropriate for the subject portfolio in bulk as
previously discussed.

Autumn Leaves Portfolio

Income Capitalization - Direct Capitalization 20

Summary of Direct Capitalization (Bulk Value)

Current Year
JLL Pro
Forma As Of
11/9/2017
Total Income $6,396,577
Total Expenses $4,378,724
Net Operating Income $2,017,853
Capitalization Rate 7.38%
Indicated Stabilized Value $27,348,603
Stabilized Value Rounded $27,350,000
Less Absorption/Rent Loss $0
Less Unstabilized Discount $0
Less Temporary Concessions/Loss to Lease $0
Less Repairs $15,000
Plus Excess Land $0
Indicated Value Rounded $27,360,000

Indicated Value via the Income Approach - Direct Capitalization

The portfolio weighted average capitalization rate on an individual basis is 7.64%. We have applied a capitalization rate
that is 25 bps lower, resulting in the weighted bulk value capitalization rate shown above for an implied portfolio
premium of 3%. The indicated value on an as-is basis is $24,360,000 for the subject.

Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption

An investment value of the going concern assuming not-for-profit ownership and tax exempt status was indicated using
forecasted net operating income excluding tax liability. The following table shows the concluded values. No portfolio
premium is applicable:

As Is Value Indication - Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption
Value Allocation
Type of Effective
Property # Name Care Date Concluded Value Real Estate FF&E Intangibles
1 Autumn Leaves of Southwest Oklahoma City MC 11/09/17 $15,110,000 $12,150,000 $330,000 $2,630,000
2 Autumn Leaves of Edmond MC 11/09/17 $14,230,000 $11,370,000 $310,000 $2,550,000
Totals $29,340,000 $23,520,000 $640,000 $5,180,000

Autumn Leaves Portfolio

Conclusion 21

Conclusion
Market Value of the Specified Assets of the Business As Is "Bulk Portfolio
Value," Fee Simple Estate
The following indications of value have been developed for the subject on an as is basis:

Value Conclusion
Value Scenario Effective Date Value Conclusion
Market Value of the Specified Assets of the Business As Is
"Bulk Portfolio Value", Fee Simple Estate 1/11/2017 $27,360,000

The direct capitalization method of income capitalization was developed. The income capitalization process is well
supported and highly pertinent to the appraisal of income property such as the subject. Market rent was estimated after
a review of competing local properties. Total income and expenses were estimated based upon analysis of similar
income and expense comparables with consideration to the subject’s historical expenses. This is the approach most
utilized in the market and is considered the most relevant approach to valuing the subject.

The income approach-direct capitalization approach is given primary weight. We conclude that the indicated value is
$27,360,000 for the combined portfolio which includes a 3% portfolio premium based on an overall capitalization rate
premium of 75 bps.

Market Value of the Specified Assets of the Business, As Is, Fee Simple Estate
(For the Individual Properties)
The subject properties were also appraised based upon the “going concern” premise as an on-going business
operation. Our value allocations are as follows:

As Is Value Indications
Value Allocation
Type of Effective
Property # Name Care Date Concluded Value Real Estate FF&E Intangibles
1 Autumn Leaves of Southwest Oklahoma City MC 11/09/17 $13,560,000 $11,170,000 $330,000 $2,060,000
2 Autumn Leaves of Edmond MC 11/09/17 $12,880,000 $10,520,000 $310,000 $2,050,000
Totals $26,440,000 $21,690,000 $640,000 $4,110,000

Autumn Leaves Portfolio

Conclusion 22

Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax

Exemption
An investment value of the going concern assuming not-for-profit ownership and tax exempt status was indicated using
forecasted net operating income excluding tax liability. The following table shows the concluded values. No portfolio
premium is applicable:

As Is Value Indication - Investment Value Assuming Not-For-Profit Ownership and Ad Valorem Tax Exemption
Value Allocation
Type of Effective
Property # Name Care Date Concluded Value Real Estate FF&E Intangibles
1 Autumn Leaves of Southwest Oklahoma City MC 11/09/17 $15,110,000 $12,150,000 $330,000 $2,630,000
2 Autumn Leaves of Edmond MC 11/09/17 $14,230,000 $11,370,000 $310,000 $2,550,000
Totals $29,340,000 $23,520,000 $640,000 $5,180,000

Marketing Time
Exposure time is assumed to precede the date of value while marketing time is the estimated time from the date of
value that would be required to sell the property. When market conditions are stable and not expected to change,
exposure time and marketing time are generally the same. That is the case in this instance, so the estimated marketing
time is also 6 months.

Autumn Leaves Portfolio

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 APPENDIX F

FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT

[This page intentionally left blank.]
 DISCLOSURE DISSEMINATION AGENT AGREEMENT

This Disclosure Dissemination Agent Agreement (the “Disclosure Agreement”), dated as

of December 1, 2017, is executed and delivered by Leading Life Senior Living, Inc., a Texas
nonprofit corporation (the “Obligated Person”), and Digital Assurance Certification, L.L.C., as
exclusive Disclosure Dissemination Agent (the “Disclosure Dissemination Agent” or “DAC”)
for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in
order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule
15c2-12 of the United States Securities and Exchange Commission under the Securities
Exchange Act of 1934, as the same may be amended from time to time (the “Rule”).

The services provided under this Disclosure Agreement solely relate to the execution of
instructions received from the Obligated Person through use of the DAC system and do not
constitute “advice” within the meaning of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the “Act”). DAC will not provide any advice or recommendation to the Issuer
(hereinafter defined), the Obligated Person, or anyone on behalf of the Issuer or Obligated
Person, regarding the “issuance of municipal securities” or any “municipal financial product” as
defined in the Act and nothing in this Disclosure Agreement shall be interpreted to the contrary.
DAC is not a “Municipal Advisor” as such term is defined in Section 15B of the Securities
Exchange Act of 1934, as amended, and related rules.

Section 1. Definitions.

Capitalized terms not otherwise defined in this Disclosure Agreement shall have the
meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Indenture
(hereinafter defined). The capitalized terms shall have the following meanings:

“Annual Filing Date” means the date, set forth in Sections 2(a) and 2(f), by which the
Annual Report is to be filed with the MSRB.

“Annual Financial Information” means annual financial information as such term is

used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure
Agreement.

“Annual Report” means an Annual Report containing Annual Financial Information

described in and consistent with Section 3 of this Disclosure Agreement.

“Audited Financial Statements” means the financial statements (if any) of the Obligated
Person for the prior fiscal year, certified by an independent auditor as prepared in accordance
with generally accepted accounting principles or otherwise, as such term is used in paragraph
(b)(5)(i)(B) of the Rule and specified in Section 3(b) of this Disclosure Agreement, including a
statement of the balances on deposit in each fund and account established under the Indenture.

“Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP
numbers relating thereto.

“Certification” means a written certification of compliance signed by the Disclosure

Representative stating that the Annual Report, Quarterly Report, Audited Financial Statements,

F-1
Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary
Financial Disclosure delivered to the Disclosure Dissemination Agent is the Annual Report,
Quarterly Report, Audited Financial Statements, Notice Event notice, Failure to File Event
notice, Voluntary Event Disclosure or Voluntary Financial Disclosure required to be (or
voluntarily) submitted to the MSRB under this Disclosure Agreement. A Certification shall
accompany each such document submitted to the Disclosure Dissemination Agent by the
Disclosure Representative and include the full name of the Bonds and the 9-digit CUSIP
numbers for all Bonds to which the document applies.

“Community” shall mean each of the Project’s two stand-alone properties in Oklahoma
City and Edmond, Oklahoma, and collectively, shall be referred to as the “Communities.”

“Disclosure Representative” means the President of the Obligated Person, or his or her
designee, or such other person as the Obligated Person shall designate in writing to the
Disclosure Dissemination Agent from time to time as the person responsible for providing
Information to the Disclosure Dissemination Agent.

“Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting

in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure
Dissemination Agent designated in writing by the Obligated Person pursuant to Section 9 hereof.

“EMMA” means the Electronic Municipal Market Access system as described in

Exchange Act Release No. 59062 and maintained by the MSRB for purposes of Rule 15c2-12
and any other system designated by the MSRB or the Securities and Exchange Commission for
purposes of Rule 15c2-12.

“Failure to File Event” means the Obligated Person’s failure to file an Annual Report on
or before the Annual Filing Date, a failure to file a Quarterly Report on or before the Quarterly
Filing Date or the failure to file the information required by Sections 3(a), 3(b) and 3Q with such
Reports.

“Force Majeure Event” means: (i) acts of God, war, or terrorist action; (ii) failure or
shut-down of EMMA; or (iii) to the extent beyond the Disclosure Dissemination Agent’s
reasonable control, interruptions in telecommunications or utilities services, failure, malfunction
or error of any telecommunications, computer or other electrical, mechanical or technological
application, service or system, computer virus, interruptions in Internet service or telephone
service (including due to a virus, electrical delivery problem or similar occurrence) that affect
Internet users generally, or in the local area in which the Disclosure Dissemination Agent or the
MSRB is located, or acts of any government, regulatory or any other competent authority the
effect of which is to prohibit the Disclosure Dissemination Agent from performance of its
obligations under this Disclosure Agreement.

“Holder” means any person (a) having the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any
Bonds for federal income tax purposes.

F-2
 “Indenture” means the Trust Indenture, dated as of the date hereof, between the Issuer
and UMB Bank, N.A.

“Information” means, collectively, the Annual Reports, the Quarterly Reports, the
Audited Financial Statements (if any), the Notice Event notices, the Failure to File Event notices,
the Voluntary Event Disclosures and the Voluntary Financial Disclosures.

“Issuer” means the Oklahoma Development Finance Authority, as issuer of the Bonds.

“MSRB” means the Municipal Securities Rulemaking Board, or any successor thereto,
established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934.

“Notice Event” means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule
and listed in Section 4(a) of this Disclosure Agreement.

“Official Statement” means that Official Statement prepared by the Issuer and the
Obligated Person in connection with the Bonds, as listed on Exhibit A.

“Project” means the Obligated Person’s two stand-alone properties in Oklahoma City and
Edmond, Oklahoma, consisting of 86 memory care units.

“Quarterly Report” means a Quarterly Report described in and consistent with Section
3Q of this Disclosure Agreement.

“Quarterly Filing Date” means the date, set in Section 2Q(a), by which the Quarterly
Report is to be filed with the MSRB.

“Tax-Exempt Bonds” means, collectively, the Series 2017A-1 Bonds and the Series
2017B Bonds.

“Trustee” means the institution identified as such in the document under which the
Bonds were issued.

“Underwriter” means Piper Jaffray & Co., as underwriter of the Bonds.

“Voluntary Event Disclosure” means information of the category specified in any of

subsections (e)(vi)(1) through (e)(vi)(11) of Section 2 of this Disclosure Agreement that is
accompanied by a Certification of the Disclosure Representative containing the information
prescribed by Section 7(a) of this Disclosure Agreement.

“Voluntary Financial Disclosure” means information of the category specified in any of

subsections (e)(vii)(l) through (e)(vii)(9) of Section 2 of this Disclosure Agreement that is
accompanied by a Certification of the Disclosure Representative containing the information
prescribed by Section 7(b) of this Disclosure Agreement.

F-3
 Section 2. Provision of Annual Reports.

(a) The Obligated Person, or the Disclosure Representative on behalf of the Obligated
Person, shall provide, annually, an electronic copy of the Annual Report and Certification to the
Disclosure Dissemination Agent, together with a copy for the Trustee, not later than the Annual
Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the
Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB
not later than 150 days after the end of each fiscal year of the Obligated Person, commencing
with the fiscal year ending December 31, 2018. Such date and each anniversary thereof is the
“Annual Filing Date.” The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may cross-reference other information as provided in
Section 3 of this Disclosure Agreement.

(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure
Dissemination Agent has not received a copy of the Annual Report and Certification, the
Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in
writing (which may be by e-mail), to remind the Obligated Person of its undertaking to provide
the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative
shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual
Report and the Certification no later than two (2) business days prior to the Annual Filing Date,
or (ii) instruct the Disclosure Dissemination Agent in writing that the Obligated Person will not
be able to file the Annual Report within the time required under this Disclosure Agreement, state
the date by which the Annual Report for such year will be provided and instruct the Disclosure
Dissemination Agent to immediately send a Failure to File Event notice to the MSRB in
substantially the form attached as Exhibit B, accompanied by a cover sheet completed by the
Disclosure Dissemination Agent in the form set forth in Exhibit C-1.

(c) If the Disclosure Dissemination Agent has not received an Annual Report and
Certification by 6:00 p.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date
falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual
Report, a Failure to File Event shall have occurred and the Obligated Person irrevocably directs
the Disclosure Dissemination Agent to immediately send a Failure to File Event notice to the
MSRB in substantially the form attached as Exhibit B without reference to the anticipated filing
date for the Annual Report, accompanied by a cover sheet completed by the Disclosure
Dissemination Agent in the form set forth in Exhibit C-1.

(d) If Audited Financial Statements of the Obligated Person are prepared but not
available prior to the Annual Filing Date, the Obligated Person shall file or cause to be filed with
the MSRB its unaudited annual financial statements prepared in accordance with generally
accepted accounting principles and, when the Audited Financial Statements are available,
provide in a timely manner an electronic copy to the Disclosure Dissemination Agent,
accompanied by a Certification, together with a copy for the Trustee, for filing with the MSRB.

(e) The Disclosure Dissemination Agent shall:

(i) verify the filing specifications of the MSRB each year prior to the Annual
Filing Date;

F-4
(ii) upon receipt, promptly file each Annual Report received under Sections
2(a) and 2(b) with the MSRB;

(iii) upon receipt, promptly file each Audited Financial Statement, or

unaudited financial statement, as applicable, received under Section 2(d)
with the MSRB;

(iv) upon receipt, promptly file the text of each Notice Event received under
Sections 4(a) and 4(b)(ii) with the MSRB, identifying the Notice Event as
instructed by the Obligated Person pursuant to Section 4(a) or 4(b)(ii)
(being any of the categories set forth below) when filing pursuant to
Section 4(c) of this Disclosure Agreement:

1. “Principal and interest payment delinquencies”;

2. “Non-payment related defaults, if material”;

3. “Unscheduled draws on debt service reserves reflecting financial

difficulties”;

4. “Unscheduled draws on credit enhancements reflecting financial

difficulties”;

5. “Substitution of credit or liquidity providers, or their failure to

perform”;

6. “Adverse tax opinions, the issuance by the Internal Revenue

Service of proposed or final determinations of taxability, Notices
of Proposed Issue (IRS Form 5701-TEB) or other material notices
or determinations with respect to the tax status of the security, or
other material events affecting the tax status of the security”;

7. “Modifications to rights of security holders, if material”;

8. “Bond calls, if material, and tender offers”;

9. “Defeasances”;

10. “Release, substitution, or sale of property securing repayment of

the securities, if material”;

11. “Rating changes”;

12. “Bankruptcy, insolvency, receivership or similar event of the

obligated person”;

13. “The consummation of a merger, consolidation, or acquisition

involving an obligated person or the sale of all or substantially all

F-5
 of the assets of the obligated person, other than in the ordinary
course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its
terms, if material”; and

14. “Appointment of a successor or additional trustee, or the change of

name of a trustee, if material”;

Note to Section 2(e)(iv)(12): For the purposes of the event identified in

Section 2(e)(iv)(12), the event is considered to occur when any of the
following occur: the appointment of a receiver, fiscal agent or similar
officer for an obligated person in a proceeding under the U.S. Bankruptcy
Code or in any other proceeding under state or federal law in which a
court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the obligated person, or if such
jurisdiction has been assumed by leaving the existing governing body and
officials or officers in possession but subject to the supervision and orders
of a court or governmental authority, or the entry of an order confirming a
plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the obligated person.

(v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this
Disclosure Agreement, as applicable), promptly file a completed copy of
Exhibit B to this Disclosure Agreement with the MSRB, identifying the
filing as “Failure to provide annual financial information as required”
when filing pursuant to Section 2(b)(ii) or Section 2(c) of this Disclosure
Agreement;

(vi) upon receipt, promptly file the text of each Voluntary Event Disclosure
received under Section 7(a) with the MSRB, identifying the Voluntary
Event Disclosure as instructed by the Obligated Person, or the Disclosure
Representative on behalf of the Obligated Person, pursuant to Section 7(a)
(being any of the categories set forth below) when filing pursuant to
Section 7(a) of this Disclosure Agreement:

1. “amendment to continuing disclosure undertaking”;

2. “change in obligated person”;

3. “notice to investors pursuant to bond documents”;

4. “certain communications from the Internal Revenue Service”;

5. “secondary market purchases”;

6. “bid for auction rate or other securities”;

F-6
 7. “capital or other financing plan”;

8. “litigation/enforcement action”;

9. “change of tender agent, remarketing agent, or other on-going

party”;

10. “derivative or other similar transaction”; and

11. “other event-based disclosures.”

(vii) upon receipt, promptly file the text of each Voluntary Financial Disclosure
received under Section 7(b) with the MSRB, identifying the Voluntary
Financial Disclosure as instructed by the Obligated Person pursuant to
Section 7(b) (being any of the categories set forth below) when filing
pursuant to Section 7(b) of this Disclosure Agreement:

1. “monthly financial information”;

2. “change in fiscal year/timing of annual disclosure”;

3. “change in accounting standard”;

4. “interim/additional financial information/operating data”;

5. “budget”;

6. “investment/debt/financial policy”;

7. “information provided to rating agency, credit/liquidity provider or

other third party”;

8. “consultant reports”; and

9. “other financial/operating data.”

(viii) upon receipt (or irrevocable direction pursuant to Section 2Q(c) of this
Disclosure Agreement, as applicable), promptly file a completed copy of
Exhibit D to this Disclosure Agreement with the MSRB, identifying the
filing as “Failure to provide quarterly report as required” when filing
pursuant to Section 2Q(b)(ii) or Section 2Q(c) of this Disclosure
Agreement; and

(ix) provide the Obligated Person evidence of the filings of each of the above
when made, which shall be by means of the DAC system, for so long as
DAC is the Disclosure Dissemination Agent under this Disclosure
Agreement.

F-7
 (f) The Obligated Person may adjust the Annual Filing Date upon change of its fiscal
year by providing written notice of such change and the new Annual Filing Date to the
Disclosure Dissemination Agent, Trustee and the MSRB, provided that the period between the
existing Annual Filing Date and new Annual Filing Date shall not exceed one year.

(g) Anything in this Disclosure Agreement to the contrary notwithstanding, any

Information received by the Disclosure Dissemination Agent before 6:00 p.m. Eastern time on
any business day that it is required to file with the MSRB pursuant to the terms of this Disclosure
Agreement and that is accompanied by a Certification and all other information required by the
terms of this Disclosure Agreement will be filed by the Disclosure Dissemination Agent with the
MSRB no later than 11:59 p.m. Eastern time on the same business day; provided, however, the
Disclosure Dissemination Agent shall have no liability for any delay in filing with the MSRB if
such delay is caused by a Force Majeure Event provided that the Disclosure Dissemination
Agent uses reasonable efforts to make any such filing as soon as possible.

Section 2Q. Provision of Quarterly Reports.

(a) The Obligated Person, or the Disclosure Representative on behalf of the Obligated
Person, shall provide, quarterly, for the applicable fiscal quarter, an electronic copy of the
Quarterly Report and Certification to the Disclosure Dissemination Agent, together with a copy
for the Trustee, not later than the Quarterly Filing Date. Promptly upon receipt of an electronic
copy of the Quarterly Report and the Certification, the Disclosure Dissemination Agent shall
provide a Quarterly Report to the MSRB not later than 45 days after the end of each fiscal
quarter of the Obligated Person, commencing with the quarter ending March 31, 2018 (each, a
“Quarterly Filing Date”). The Quarterly Report may be submitted as a single document or as
separate documents comprising a package, and may cross-reference other information as
provided in Section 3Q of this Disclosure Agreement.

(b) If on the fifth (5th) day prior to the Quarterly Filing Date, the Disclosure
Dissemination Agent has not received a copy of the Quarterly Report and Certification, the
Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in
writing (which may be by e-mail) to remind the Obligated Person of its undertaking to provide
the Quarterly Report pursuant to Section 2Q(a). Upon such reminder, the Disclosure
Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic
copy of the Quarterly Report and the Certification no later than two (2) business days prior to the
Quarterly Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the
Obligated Person will not be able to file the Quarterly Report within the time required under this
Disclosure Agreement, state the date by which the Quarterly Report for such quarter will be
provided and instruct the Disclosure Dissemination Agent to immediately send a Failure to File
Event notice to the MSRB in substantially the form attached as Exhibit D, which may be
accompanied by a cover sheet completed by the Disclosure Dissemination Agent in the form set
forth in Exhibit C-1.

(c) If the Disclosure Dissemination Agent has not received a Quarterly Report and
Certification by 6:00 p.m. Eastern time on the Quarterly Filing Date (or, if such Quarterly Filing
Date falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the
Quarterly Report, a Failure to File Event shall have occurred and the Obligated Person

F-8
irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to the
MSRB in substantially the form attached as Exhibit D without reference to the anticipated filing
date for the Quarterly Report, accompanied by a cover sheet completed by the Disclosure
Dissemination Agent in the form set forth in Exhibit C-1.

Section 3. Content of Annual Reports.

(a) Each Annual Report shall contain Annual Financial Information with respect to
the Obligated Person, consisting of the following information:

1. the calculation of the Obligated Person’s Debt Service Coverage

Ratio and Days’ Cash on Hand;

2. a report showing the average occupancy of the assisted living and

memory care units, as applicable, for each Community for the
preceding Fiscal Year and for each month during such preceding
Fiscal Year; and

3. management discussion with respect to the financial statements

and occupancy results for the preceding Fiscal Year.

(b) Audited Financial Statements prepared in accordance with generally accepted

accounting principles (“GAAP”) as described in the Indenture will be included in the Annual
Report, including a letter from such accountant to the effect that in the course of such audit
nothing came to its attention to lead it to believe that any default had occurred under the
Indenture as it pertains to accounting matters, or specifying the nature of such default. If audited
financial statements are not available, then, unaudited financial statements, prepared in
accordance with GAAP as described in the Indenture will be included in the Annual Report.
Audited Financial Statements (if any) will be provided pursuant to Section 2(d).

Any or all of the items listed above may be included by specific reference from other
documents, including official statements of debt issues with respect to which the Obligated
Person is an “obligated person” (as defined by the Rule), which have been previously filed with
the Securities and Exchange Commission or available on EMMA. If the document incorporated
by reference is a final official statement, it must be available from MSRB. The Obligated Person
will clearly identify each such document so incorporated by reference.

If the Annual Financial Information contains modified operating data or financial

information different from the Annual Financial Information agreed to in the continuing
disclosure undertaking related to the Bonds, the Obligated Person is required to explain, in
narrative form, the reasons for the modification and the impact of the change in the type of
operating data or financial information being provided.

Section 3Q. Content of Quarterly Reports.

(a) Each Quarterly Report shall contain the following information with respect to the
Obligated Person:

F-9
 1. a copy of the Obligated Person’s unaudited quarterly financial
statements prepared on a basis substantially consistent with its
audited financial statements and certified by the Disclosure
Representative, including a statement of the balances on deposit in
each fund and account established under the Indenture, and
together with a calculation of the Obligated Person’s Debt Service
Coverage Ratio and Days’ Cash on Hand;

2. a report showing the average occupancy of the assisted living and

memory care units, as applicable, for each Community for each
month in the preceding fiscal quarter; and

3. management discussion with respect to (i) the financial statements

and occupancy results for the preceding fiscal quarter, (ii) the
receipt of initial licensure from the Oklahoma State Department of
Health for each Community, and (iii) the receipt or loss of
franchise or ad valorem tax exemption for each Community, as
applicable.

Any or all of the items listed above may be included by specific reference from other
documents, including official statements of debt issues with respect to which the Obligated
Person is an “obligated person” (as defined by the Rule), which have been previously filed with
the Securities and Exchange Commission or available on EMMA. If the document incorporated
by reference is a final official statement, it must be available from MSRB. The Obligated Person
will clearly identify each such document so incorporated by reference.

If the quarterly financial information contains modified operating data or financial

information different from the quarterly financial information agreed to in the continuing
disclosure undertaking related to the Bonds, the Obligated Person is required to explain, in
narrative form, the reasons for the modification and the impact of the change in the type of
operating data or financial information being provided.

Section 4. Reporting of Notice Events.

(a) The occurrence of any of the following events with respect to the Bonds
constitutes a Notice Event:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial

difficulties;

4. Unscheduled draws on credit enhancements reflecting financial

difficulties;

F-10
5. Substitution of credit or liquidity providers, or their failure to
perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service

of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax exempt status of the Tax-
Exempt Bonds, or other material events affecting the tax status of
the Bonds;

7. Modifications to rights of Bond holders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of the

Bonds, if material;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the

Obligated Person;

Note to subsection (a)(12) of this Section 4: For the purposes of

the event described in subsection (a)(12) of this Section 4, the
event is considered to occur when any of the following occur: the
appointment of a receiver, fiscal agent or similar officer for an
Obligated Person in a proceeding under the U.S. Bankruptcy Code
or in any other proceeding under state or federal law in which a
court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the Obligated Person,
or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject
to the supervision and orders of a court or governmental authority,
or the entry of an order confirming a plan of reorganization,
arrangement or liquidation by a court or governmental authority
having supervision or jurisdiction over substantially all of the
assets or business of the Obligated Person.

13. The consummation of a merger, consolidation, or acquisition

involving an Obligated Person or the sale of all or substantially all
of the assets of the Obligated Person, other than in the ordinary
course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its
terms, if material; and

F-11
 14. Appointment of a successor or additional trustee or the change of
name of a trustee, if material.

The Obligated Person shall, in a timely manner not in excess of nine (9) business days
after its occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a
Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the
occurrence pursuant to subsection (c) and shall be accompanied by a Certification. Such notice
or Certification shall identify the Notice Event that has occurred (which shall be any of the
categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include the text of the
disclosure that the Obligated Person desires to make, contain the written authorization of the
Obligated Person for the Disclosure Dissemination Agent to disseminate such information, and
identify the date the Obligated Person desires for the Disclosure Dissemination Agent to
disseminate the information (provided that such date is not later than the tenth business day after
the occurrence of the Notice Event).

(b) The Disclosure Dissemination Agent is under no obligation to notify the

Obligated Person or the Disclosure Representative of an event that may constitute a Notice
Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure
Representative, the Disclosure Representative will within two business days of receipt of such
notice (but in any event not later than the tenth business day after the occurrence of the Notice
Event, if the Obligated Person determines that a Notice Event has occurred), instruct the
Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be
made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the
occurrence pursuant to subsection (c) of this Section 4, together with a Certification. Such
Certification shall identify the Notice Event that has occurred (which shall be any of the
categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include the text of the
disclosure that the Obligated Person desires to make, contain the written authorization of the
Obligated Person for the Disclosure Dissemination Agent to disseminate such information, and
identify the date the Obligated Person desires for the Disclosure Dissemination Agent to
disseminate the information (provided that such date is not later than the tenth business day after
the occurrence of the Notice Event).

(c) If the Disclosure Dissemination Agent has been instructed by the Obligated
Person as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a
Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such
occurrence with MSRB in accordance with Section 2(e)(iv) hereof. This notice may be filed with
a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit
C-1.

Section 5. CUSIP Numbers.

Whenever providing information to the Disclosure Dissemination Agent, including but

not limited to Annual Reports, documents incorporated by reference to the Annual Reports,
Quarterly Reports, Audited Financial Statements, Notice Event notices, Failure to File Event
notices, Voluntary Event Disclosures and Voluntary Financial Disclosures, the Obligated Person
shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to
which the provided information relates.

F-12
 The Obligated Person will provide the Disclosure Dissemination Agent with the CUSIP
numbers for any Bonds to which new CUSIP numbers are assigned in substitution for the CUSIP
numbers previously assigned to such Bonds.

Section 6. Additional Disclosure Obligations.

The Obligated Person acknowledges and understands that other state and federal laws,
including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the
Securities Exchange Act of 1934, may apply to the Obligated Person, and that the duties and
responsibilities of the Disclosure Dissemination Agent under this Disclosure Agreement do not
extend to providing legal advice regarding such laws. The Obligated Person acknowledges and
understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution
of the mechanical tasks of disseminating information as described in this Disclosure Agreement.

Section 7. Voluntary Filing.

(a) The Obligated Person may instruct the Disclosure Dissemination Agent to file a
Voluntary Event Disclosure with the MSRB from time to time pursuant to a Certification of the
Disclosure Representative. Such Certification shall identify the Voluntary Event Disclosure
(which shall be any of the categories set forth in Section 2(e)(vi) of this Disclosure Agreement),
include the text of the disclosure that the Obligated Person desires to make, contain the written
authorization of the Obligated Person for the Disclosure Dissemination Agent to disseminate
such information, and identify the date the Obligated Person desires for the Disclosure
Dissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has
been instructed by the Obligated Person as prescribed in this Section 7(a) to file a Voluntary
Event Disclosure, the Disclosure Dissemination Agent shall promptly file such Voluntary Event
Disclosure with the MSRB in accordance with Section 2(e)(vi) hereof. This notice will be filed
with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in
Exhibit C-2.

(b) The Obligated Person may instruct the Disclosure Dissemination Agent to file a
Voluntary Financial Disclosure with the MSRB from time to time pursuant to a Certification of
the Disclosure Representative. Such Certification shall identify the Voluntary Financial
Disclosure (which shall be any of the categories set forth in Section 2(e)(vii) of this Disclosure
Agreement), include the text of the disclosure that the Obligated Person desires to make, contain
the written authorization of the Obligated Person for the Disclosure Dissemination Agent to
disseminate such information, and identify the date the Obligated Person desires for the
Disclosure Dissemination Agent to disseminate the information. If the Disclosure Dissemination
Agent has been instructed by the Obligated Person as prescribed in this Section 7(b) to file a
Voluntary Financial Disclosure, the Disclosure Dissemination Agent shall promptly file such
Voluntary Financial Disclosure with the MSRB in accordance with Section 2(e)(vii) hereof. This
notice will be filed with a cover sheet completed by the Disclosure Dissemination Agent in the
form set forth in Exhibit C-2.

(c) The parties hereto acknowledge that the Obligated Person is not obligated
pursuant to the terms of this Disclosure Agreement to file any Voluntary Event Disclosure

F-13
pursuant to Section 7(a) hereof or any Voluntary Financial Disclosure pursuant to Section 7(b)
hereof.

(d) Nothing in this Disclosure Agreement shall be deemed to prevent the Obligated
Person from disseminating any other information through the Disclosure Dissemination Agent
using the means of dissemination set forth in this Disclosure Agreement or including any other
information in any Annual Report, Quarterly Report, Audited Financial Statements, Notice Event
notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial
Disclosure, in addition to that required by this Disclosure Agreement. If the Obligated Person
chooses to include any information in any Annual Report, Quarterly Report, Audited Financial
Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or
Voluntary Financial Disclosure in addition to that which is specifically required by this
Disclosure Agreement, the Obligated Person shall have no obligation under this Disclosure
Agreement to update such information or include it in any future Annual Report, Quarterly
Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice,
Voluntary Event Disclosure or Voluntary Financial Disclosure.

Section 8. Termination of Reporting Obligation.

The obligations of the Obligated Person and the Disclosure Dissemination Agent under
this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance,
prior redemption or payment in full of all of the Bonds, when the Obligated Person is no longer
an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative
to the Disclosure Dissemination Agent of an opinion of counsel expert in federal securities laws
to the effect that continuing disclosure is no longer required.

Section 9. Disclosure Dissemination Agent.

The Obligated Person has appointed Digital Assurance Certification, L.L.C. as exclusive
Disclosure Dissemination Agent under this Disclosure Agreement. The Obligated Person may,
upon 30 days written notice to the Disclosure Dissemination Agent and the Trustee, replace or
appoint a successor to the Disclosure Dissemination Agent. Upon termination of DAC’s services
as Disclosure Dissemination Agent, whether by notice of the Obligated Person or DAC, the
Obligated Person agrees to appoint a successor Disclosure Dissemination Agent or, alternately,
agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure
Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or
appointment of a successor, the Obligated Person shall remain liable until payment in full for any
and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure
Dissemination Agent may resign at any time by providing 30 days’ prior written notice to the
Issuer and the Obligated Person.

Section 10. Remedies in Event of Default.

In the event of a failure of the Obligated Person or the Disclosure Dissemination Agent to
comply with any provision of this Disclosure Agreement, the Holders’ rights to enforce the
provisions of this Agreement shall be limited solely to a right, by action in mandamus or for
specific performance, to compel performance of the parties’ obligation under this Disclosure

F-14
Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement
shall not constitute a default on the Bonds or under any other document relating to the Bonds,
and all rights and remedies shall be limited to those expressly stated herein.

Section 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent.

(a) The Disclosure Dissemination Agent shall have only such duties as are
specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s
obligation to deliver the information at the times and with the contents described herein shall be
limited to the extent the Obligated Person has provided such information to the Disclosure
Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination
Agent shall have no duty with respect to the content of any disclosures or notice made pursuant
to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to
review or verify any Information, or any other information, disclosures or notices provided to it
by the Obligated Person and shall not be deemed to be acting in any fiduciary capacity for the
Issuer, the Obligated Person, the Holders of the Bonds or any other party. The Disclosure
Dissemination Agent shall have no responsibility for the Obligated Person’s failure to report to
the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality
thereof. The Disclosure Dissemination Agent shall have no duty to determine or liability for
failing to determine whether the Obligated Person has complied with this Disclosure Agreement.
The Disclosure Dissemination Agent may conclusively rely upon Certifications of the Obligated
Person at all times.

THE OBLIGATED PERSON AGREES TO INDEMNIFY AND SAVE THE DISCLOSURE

DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, EXPENSE AND
LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE EXERCISE OR
PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, INCLUDING THE
COSTS AND EXPENSES (INCLUDING ATTORNEY’S FEES) OF DEFENDING AGAINST
ANY CLAIM OF LIABILITY, BUT EXCLUDING LIABILITIES DUE TO THE
DISCLOSURE DISSEMINATION AGENT’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

The obligations of the Obligated Person under this Section shall survive resignation or removal
of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds.

(b) The Disclosure Dissemination Agent may, from time to time, consult with legal
counsel (either in-house or external) of its own choosing in the event of any disagreement or
controversy, or question or doubt as to the construction of any of the provisions hereof or its
respective duties hereunder, and shall not incur any liability and shall be fully protected in acting
in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such
counsel shall be payable by the Obligated Person.

(c) All documents, reports, notices, statements, information and other materials
provided to the MSRB under this Disclosure Agreement shall be provided in an electronic format
and accompanied by identifying information as prescribed by the MSRB.

F-15
 Section 12. No Issuer Responsibility.

The Obligated Person and the Disclosure Dissemination Agent acknowledge that the
Issuer has undertaken no responsibility, and shall not be required to undertake any responsibility,
with respect to any reports, notices or disclosures required by or provided pursuant to this
Disclosure Agreement, and shall have no liability to any person, including any Holder of the
Bonds, with respect to any such reports, notices or disclosures.

Section 13. Amendment; Waiver.

Notwithstanding any other provision of this Disclosure Agreement, the Obligated Person
and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any
provision of this Disclosure Agreement may be waived, if such amendment or waiver is
supported by an opinion of counsel expert in federal securities laws acceptable to both the
Obligated Person and the Disclosure Dissemination Agent to the effect that such amendment or
waiver does not materially impair the interests of Holders of the Bonds, and would not, in and of
itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been
effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule; provided neither the Obligated Person nor the Disclosure
Dissemination Agent shall be obligated to agree to any amendment modifying their respective
duties or obligations without their consent thereto.

Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have
the right to adopt amendments to this Disclosure Agreement necessary to comply with
modifications to and interpretations of the provisions of the Rule as announced by the Securities
and Exchange Commission from time to time by giving not less than 20 days written notice of
the intent to do so together with a copy of the proposed amendment to the Obligated Person. No
such amendment shall become effective if the Obligated Person shall, within 10 days following
the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it
objects to such amendment.

Section 14. Beneficiaries.

This Disclosure Agreement shall inure solely to the benefit of the Obligated Person, the
Issuer, the Trustee, the Disclosure Dissemination Agent, the Underwriter, and the Holders from
time to time of the Bonds, and shall create no rights in any other person or entity.

Section 15. Governing Law.

This Disclosure Agreement shall be governed by the laws of the State of Oklahoma
(other than with respect to conflicts of laws).

[Remainder of page intentionally left blank.]

F-16
 Section 16. Notices

All notices required to be given or authorized to be given by either party pursuant to this
Agreement shall be in writing and shall be sent by registered or certified mail (as well as by
facsimile, in the case of the Disclosure Dissemination Agent) to the following addresses:

In the case of the Obligated Person: Leading Life Senior Living, Inc.
6370 Lyndon B. Johnson Freeway, Suite 276
Dallas, Texas 75240

In the case of the Disclosure Digital Assurance Certification, L.L.C.

Dissemination Agent: 315 E. Robinson Street, Suite 300
Orlando, FL 32801

In the case of the Issuer: The Oklahoma Development Finance

Authority
9220 North Kelley Avenue
Oklahoma City, OK 73131

In the case of the Trustee: UMB Bank, N.A.

5910 N Central Expressway, Suite 1900
Dallas, TX 75206

Section 17. Counterparts.

This Disclosure Agreement may be executed in several counterparts, each of which shall
be an original and all of which shall constitute but one and the same instrument.

[Remainder of page intentionally left blank.]

F-17
 The Disclosure Dissemination Agent and the Obligated Person have caused this
Continuing Disclosure Agreement to be executed, on the date first written above, by their
respective officers duly authorized.

DIGITAL ASSURANCE
CERTIFICATION, L.L.C., as Disclosure
Dissemination Agent

By:
Name:
Title:

LEADING LIFE SENIOR LIVING,

INC., as Obligated Person

By:
Name:
Title:

[Signature Page to Disclosure Dissemination Agent Agreement]

F-18
 EXHIBIT A

NAME AND CUSIP NUMBERS OF BONDS

Name of Issuer: The Oklahoma Development Finance Authority

Obligated Person(s): Leading Life Senior Living, Inc.

Name of Bond Issues: $16,490,000 The Oklahoma Development Finance

Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Series
2017A-1; $3,240,000 The Oklahoma Development Finance
Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Taxable
Series 2017A-2; and $12,395,000 The Oklahoma
Development Finance Authority Senior Living Revenue
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves
Project), Series 2017B

Date of Issuance: December 20, 2017

Date of Official Statement: December 14, 2017

CUSIP Numbers: 67885PAA1, 67885PAB9, 67885PAC7, 67885PAD5,

67885PAE3, 67885PAFO, 67885PAG8, 67885PAH6,
67885PAJ2

F-19
 EXHIBIT B

NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT

Issuer: The Oklahoma Development Finance Authority

Obligated Person: Leading Life Senior Living, Inc.

Name of Bond Issues: $16,490,000 The Oklahoma Development Finance

Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Series
2017A-1; $3,240,000 The Oklahoma Development Finance
Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Taxable
Series 2017A-2; and $12,395,000 The Oklahoma
Development Finance Authority Senior Living Revenue
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves
Project), Series 2017B

Date of Issuance: December 20, 2017

Date of Disclosure Agreement: December 1, 2017

CUSIP Numbers:

NOTICE IS HEREBY GIVEN that the Obligated Person has not provided an Annual Report
with respect to the above-named Bonds as required by the Disclosure Agreement between the
Obligated Person and Digital Assurance Certification, L.L.C., as Disclosure Dissemination
Agent. [The Obligated Person has notified the Disclosure Dissemination Agent that it anticipates
that the Annual Report will be filed by ________________________.]

Dated: ____________________________

DIGITAL ASSURANCE CERTIFICATION,

L.L.C., as Disclosure Dissemination Agent,
on behalf of the Obligated Person

cc: Obligated Person

Trustee

F-20
 EXHIBIT C-1

EVENT NOTICE COVER SHEET

This cover sheet and accompanying “event notice” will be sent to MSRB pursuant to Securities and
Exchange Commission Rule 15c2-12(b)(5)(i)(C) and(D).

Issuer’s and Obligated Person’s Names:

Issuer: The Oklahoma Development Finance Authority

Obligated Person: Leading Life Senior Living, Inc.

Issuer’s Six-Digit CUSIP Number: 67885P

Issuer’s Nine-Digit CUSIP Numbers of the bonds to which this material event notice relates:

Number of pages of attached: __

_______ Description of Notice Event (Check One):

1. ___ “Principal and interest payment delinquencies”;

2. ___ ‘‘Non-payment related defaults, if material”;
3. ___ ‘‘Unscheduled draws on debt service reserves reflecting financial difficulties”;
4. ___ “Unscheduled draws on credit enhancements reflecting financial difficulties”;
5. ___ “Substitution of credit or liquidity providers, or their failure to perform”;
6. ___ “Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations
of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the security, or other material events affecting the tax
status of the security”;
7. ___ “Modifications to rights of securities holders, if material”;’
8. ___ “Bond calls, if material, and tender offers”;
9 . ___ ‘‘Defeasances”;
10. ___ “Release, substitution, or sale of property securing repayment of the securities, if material”;
11. ___ “Rating changes”;
12. ___ ‘‘Bankruptcy, insolvency, receivership or similar event of the obligated person”;
13. ___ ‘‘The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale
of all or substantially all of the assets of the obligated person, other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material”; and
14. ___ ‘‘Appointment of a successor or additional trustee, or the change of name of a trustee, if material.”

_______ Failure to provide annual financial information as required

_______ Failure to provide quarterly report as required

I hereby represent that I am authorized by the Obligated Person or its agent to distribute this information publicly:

Signature: Date:

Name: Title:

Digital Assurance Certification, L.L.C.

315 E. Robinson Street, Suite 300
Orlando, FL 32801
407-515-1100
F-21
 EXHIBIT C-2

VOLUNTARY EVENT DISCLOSURE COVER SHEET

This cover sheet and accompanying “voluntary event disclosure” will be sent to the MSRB, pursuant to the
Disclosure Dissemination Agent Agreement, dated as of December 1, 2017, between the Obligated Person and
DAC.

Issuer’s and Obligated Person’s Names:

Issuer: The Oklahoma Development Finance Authority

Obligated Person: Leading Life Senior Living, Inc.

Issuer’s Six-Digit CUSIP Number:

Issuer’s Nine-Digit CUSIP Numbers of the bonds to which this notice relates:

Number of pages attached: __

_______ Description of Voluntary Event Disclosure (Check One):

1. ___ “amendment to continuing disclosure undertaking”;

2. ___ “change in obligated person”;
3. ___ “notice to investors pursuant to bond documents”;
4. ___ “certain communications from the Internal Revenue Service”;
5. ___ “secondary market purchases”;
6. ___ “bid for auction rate or other securities”;
7. ___ “capital or other financing plan”;
8. ___ “litigation/enforcement action”;
9. ___ “change of tender agent, remarketing agent, or other on-going party”;
10. ___ “derivative or other similar transaction”; and
11. ___ “other event-based disclosures.”

I hereby represent that I am authorized by the Obligated Person or its agent to distribute this information publicly:

Signature: Date:

Name: Title:

Digital Assurance Certification, L.L.C.

315 E. Robinson Street, Suite 300
Orlando, FL 32801
407-515-1100

F-22
 EXHIBIT C-3

VOLUNTARY FINANCIAL DISCLOSURE COVER SHEET

This cover sheet and accompanying “voluntary financial disclosure” will be sent to MSRB, pursuant to the
Disclosure Dissemination Agent Agreement, dated as of December 1, 2017, between the Obligated Person and
DAC.

Issuer’s and Obligated Person’s Names:

Issuer: The Oklahoma Development Finance Authority

Obligated Person: Leading Life Senior Living, Inc.

Issuer’s Six-Digit CUSIP Number: 67885P

Issuer’s Nine-Digit CUSIP Numbers of the bonds to which this notice relates:

Number of pages attached: __

__ Description of Voluntary Financial Disclosure (Check One):

1. ___ “monthly financial information”;

2. ___ “change in fiscal year/timing of annual disclosure”;
3. ___ “change in accounting standard”;
4. ___ “interim/additional financial information/operating data”;
5. ___ “budget”;
6. ___ “investment/debt/financial policy”;
7. ___ “information provided to rating agency, credit/liquidity provider or other third party”;
8. ___ “consultant reports”; and
9. ___ “other financial/operating data.”

I hereby represent that I am authorized by the Obligated Person or its agent to distribute this information publicly:

Signature: Date: _

Name: Title:

Digital Assurance Certification, L.L.C.

315 E. Robinson Street, Suite 300
Orlando, FL 32801
407-515-1100

F-23
 EXHIBIT D

NOTICE TO MSRB OF FAILURE TO FILE QUARTERLY REPORT

Issuer: The Oklahoma Development Finance Authority

Obligated Person: Leading Life Senior Living, Inc.

Name of Bond Issues: $16,490,000 The Oklahoma Development Finance

Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Series
2017A-1; $3,240,000 The Oklahoma Development Finance
Authority Senior Living Revenue Bonds (Leading Life
Senior Living, Inc. – Autumn Leaves Project), Taxable
Series 2017A-2; and $12,395,000 The Oklahoma
Development Finance Authority Senior Living Revenue
Bonds (Leading Life Senior Living, Inc. – Autumn Leaves
Project), Series 2017B

Date of Issuance: December 20, 2017

Date of Disclosure Agreement: December 1, 2017

CUSIP Numbers:

NOTICE IS HEREBY GIVEN that the Obligated Person has not provided a Quarterly Report
with respect to the above-named Bonds as required by the Disclosure Agreement between the
Obligated Person and Digital Assurance Certification, L.L.C., as Disclosure Dissemination
Agent. [The Obligated Person has notified the Disclosure Dissemination Agent that it anticipates
that the Quarterly Report will be filed by _________________ ___.]

Dated:

DIGITAL ASSURANCE CERTIFICATION, L.L.C., as

Disclosure Dissemination Agent, on behalf of the
Obligated Person

cc: Obligated Person

Trustee

F-24
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[THIS PAGE INTENTIONALLY LEFT BLANK]
THE OKLAHOMA DEVELOPMENT FINANCE AUTHORITY • Senior Living Revenue Bonds (Leading Life Senior Living, Inc. - Autumn Leaves Project) Series 2017