Schedule 1 Development Appraisal Information

PARTIES

additional properties in accordance with the terms of this agreement and the Facility Agreement; (iii) implementing Property Strategic Capital Improvements in accordance with this Agreement; implementing development expenditure in accordance with the terms of this agreement and (iv) increasing the Lease Coverage Ratio and the covenant strength of Elder Care Co as tenant under the Portfolio Leases.

Affiliate: means, in relation to an entity, any subsidiary undertaking or parent undertaking of that entity and any subsidiary undertaking of such subsidiary undertaking or parent undertaking, in each case from time to time. For the avoidance of doubt, an affiliate includes all indirect subsidiaries of an entity;

Aggregate Earnings: means, subject to paragraph 3.4.4(d), for any Rent Cover Test Period, the sum without duplication of the following for the tenants under the Portfolio Lease or any one or group of them, as the context may require: Net Income, plus, (a) Interest Expense, (b) taxes on income, whether paid, payable or accrued, (c) depreciation expense, (d) amortization expense, (e) the amount of rent payable pursuant to said lease or leases, all of the foregoing determined in accordance with IFRS, (f) the Management Fee and (g) non-cash related losses (or reversal of such losses) associated with the impairment of long-lived assets, minus (X) gains from any sale of assets, other than sales in the ordinary course of business and (Y) other extraordinary or non-recurring gains;

Aggregate Rent: means, subject to paragraph 3.4.4(d), the aggregate rent payable by Elder Care Co during the Rent Cover Test Period under all of the Portfolio Leases;

BoS: means Bank of Scotland plc;

BoS Debt: means any amounts owing to or secured by Elder Care Co or any member of the MHL Group in favour of BoS as more particularly described in the Priority Deed and the ranking of which is set out in the Priority Deed;

BoS Warrant: means the warrant to be issued by New Group Holdco immediately following SPA Completion (in agreed form) in favour of BoS to subscribe for up to 10 Legacy Business Shares in New Group Holdco, which if exercised, would result in BoS having the rights conferred on the holder of Legacy Business Shares as set out in the as set out in the agreed form of Articles of Association of New Group Holdco which are to be adopted prior to SPA Completion;

BTA: has the meaning ascribed in Recital (C);

CAA: means the Capital Allowances Act 2001 (or, notwithstanding clause 1.10, any statute, statutory provision or subordinate legislation which it amends or re-enacts it);

Capital Improvement Costs: means the costs of any Property Strategic Capital Improvements made to each Portfolio Property whether paid for by the Landlord or paid for by Elder Care Co and reimbursed by the Landlord (but excluding tenant’s improvements), including (i) all consent fees and other costs imposed by any governmental or local authority, the cost of site preparation, the cost of construction including materials and labour, the cost of supervision and related design, engineering, architectural and other professional services, the cost of any fixtures, and if and to the extent approved by the Landlord, the cost of construction financing; (ii) the cost of any land contiguous to each Portfolio Property which is to become a part of each Portfolio Property purchased for the purpose of placing thereon the Capital Improvement or any part thereof or for providing means of access thereto, or parking facilities therefor, including the cost of surveying the same; (iii) the cost of insurance, water and sewerage charges and other utility charges for such Capital Improvement during construction; and (iv) reasonable legal and surveying fees and expenses.

Change of Control: shall occur with respect to Elder Care Co or any Relevant Group Company if:

(a) any person having previously Controlled Elder Care Co or a Relevant Group Company ceases to do so; or

(b) any person, other than PJ, acquires Control of Elder Care Co or of any Relevant Group Company; or

(c) prior to the tenth anniversary of this agreement, PJ shall cease to be the Chief Executive Officer of the group of companies which includes Elder Care Co and the Relevant Group Companies, except in circumstances where PJ’s appointment as such shall cease by reason of: (i) PJ’s death, (ii) the permanent disability of PJ or (iii) because PJ is seriously ill and as a result of such serious illness PJ cannot fulfil his duties as Chief Executive Officer for a consecutive period of six months or more; or

(d) PJ no longer owns fifty per cent. or more of the entire issued and to be issued share capital of Elder Care Co, New Group Holdco or any holding company of New Group Holdco (on a fully diluted basis), save that a Change of Control shall not have occurred as a result of the exercise of the BoS Warrant;

Chief Executive Officer: means, when used in this agreement, the chief executive officer, managing director, chairman and equivalent senior management role;

Collateral Security: means the debenture in the agreed form granted in favour of PropCo by Consensus, Glentworth and others over their assets and undertakings including fixed charges over the Consensus Portfolio, ranking only behind the security granted to BoS in respect of the Permitted Indebtedness (subject to the terms of the Priority Deed);

Consensus Guarantee: means the guarantee to be granted by Consensus, Glentworth and others in favour of GA Acquisition, GA REIT and PropCo at SPA Completion in the agreed form;

Consensus Operations: means the operations carried out by Consensus at the date of this agreement relating to specialist support services, including all operations, systems, personal property, licenses and employees necessary for the provision of such services and the operation of such facilities;

Consensus Packages: means the three packages of properties into which the Consensus Portfolio is divided for the purposes of this agreement as set out in detail in Appendix 2 of this agreement;

Consensus Portfolio: means the freehold property portfolio from time to time owned by Consensus, Glentworth and/or their subsidiaries, all of which are charged in favour PropCo under the terms of the Collateral Security;

Control: shall have the meaning ascribed to it in section 1124 of the Corporation Tax Act 2010 and Controlled shall be interpreted accordingly;

Current Developments: means the developments to be carried out at Ivy Road, Norwich, Norfolk, Southlands Court, 33 Hastings Road, Bexhill-On-Sea TN40 2HJ and The Home Of Compassion, High Street, Thames Ditton, Surrey KT7 0TS, referred to herein respectively as Ivy Road, Bexhill and Compassion;

Deed of Adherence: means a deed substantially in the form set out in schedule 7 amended and completed in accordance with clause 9 so as to be appropriate to the circumstances;

Development Assets Sale Agreement: means the real estate purchase agreement to be entered into between a Dev SPV and PropCo (or a GA REIT Affiliate) pursuant to clause 7.1.7, being substantially in the terms of the agreed form draft thereof;

Development Project: means a Current Development or a Future Development in each case as contemplated by clause 7 and the Facility Agreement;

Development Project Stabilization: means a Development Project achieving a level of occupancy such that at least 85% of the number of operational care beds (as stated to be at that Property pursuant to the relevant Development Budget or New Development Budget – as said terms are defined in the Facility Agreement) are occupied by third party residents on arms’ length commercial contractual residential care contract terms.

Dev SPV: means the owner of the freehold interest of a specific Development Project.

Encumbrance: means any interest or equity of any person (including any right to acquire, option, restriction on voting, receipt of dividends or transfer or right of pre-emption) or any mortgage, charge, debenture, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement;

Facility Agreement: means the loan facility agreement entered into by GA REIT and certain other parties in relation to Development Projects in the agreed form, dated on or about the date of this Agreement;

Future Development: means a future development project for an elder care facility for which construction is financed by a Future Facility under the Facility Agreement;

Gretton Homes: means the homes listed in Schedule 9;

HMRC: means HM Revenue & Customs (or its predecessors or successors, as applicable);

GA REIT Affiliate: means an Affiliate of GA REIT that has adhered to this agreement in accordance with clause 9;

Glentworth Operations: means the operations carried out by Glentworth at the date of this agreement relating to specialist support services, including all operations, systems, personal property, licenses and employees necessary for the provision of such services and the operation of such facilities;

IFRS: means International Financial Reporting Standards;

Imputed Lease Coverage Ratio: means the quotient obtained by dividing Aggregate Earnings of a Development during the period specified in the applicable clause by the

annual initial rent payable under the Portfolio Lease proposed to be entered into during said period;

Indebtedness of any party shall means, without duplication, (a) all items which, in accordance with IFRS, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person as of the date as of which Indebtedness is to be determined, including any lease which, in accordance with IFRS, would constitute Indebtedness, (b) all indebtedness secured by any mortgage, pledge, security, lien or conditional sale or other title retention agreement to which any property or asset owned or held is subject, whether or not the indebtedness secured thereby shall have been assumed, (c) all indebtedness of others which such party has directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), discounted or sold with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which such party has agreed to supply or advance funds (whether by way of loan, stock, equity or other ownership interest purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable;

Independent Valuation: means a valuation to be provided pursuant to clause 6.2.9 by Colliers International or, if they shall be unable or unwilling to act, by another reputable firm of chartered surveyors appointed by Elder Care Co with the prior written consent of PropCo, such consent not to be unreasonably withheld or delayed;

Interest Expense means, for any Rent Cover Test Period, total interest expense (including attributable to capital leases in accordance with IFRS) fees with respect to all outstanding Indebtedness including capitalized interest but excluding commissions, discounts and other fees owed with respect to letters of credit and bankers’ acceptance financing and net costs under any interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to hedge the position with respect to interest rates;  

Investment Criteria: the investment criteria for the purposes of this Agreement are as follows:

Landlord: means PropCo, a subsidiary of PropCo or, as applicable, a subsidiary of GA REIT that is the landlord under the relevant Portfolio Lease.

Lease Coverage Ratio: means the quotient obtained by dividing Aggregate Earnings during the applicable Rent Cover Test Period by the Aggregate Rent payable during that period;

Letter of Credit: means an irrevocable, unconditional standby letter of credit which is in a form approved by PropCo and which is issued by a financial institution based in the United Kingdom approved by PropCo, such approval not to be unreasonably withheld, conditioned or delayed, in an amount equal to at least six months’ rent under the Master Lease. Elder Care Co shall provide the Letter of Credit to PropCo pursuant to clause 6.3;

Listing: means the admission of any of the shares of New Group HoldCo or a member of the MHL Group to the Official List in the United Kingdom, or the granting of permission for any of such shares to be dealt on another recognised investment exchange (as defined by section 285(1)(a) of the Financial Services and Markets Act 2000).

Management Agreement: means any agreement, whether written or oral, between a tenant under a Portfolio Lease and any other party (including an affiliate of said tenant) pursuant to which the tenant provides any payment, fee or other consideration to such party to operate or manage the applicable Portfolio Premises or to provide management, advisory or other services relating to the operation thereof;

Management Fee: means a fee paid pursuant to a Management Agreement;

Master Lease: the agreed form of lease granted or to be granted by PropCo or its subsidiaries (or, if PropCo elects, a subsidiary of GA REIT) to Elder Care Co in respect of each Portfolio Property;

MHL Group: means the group of companies comprising Elder Care Co, any holding company of Elder Care Co (including, without limitation, New Group HoldCo) and the subsidiaries of Elder Care Co, and any such holding company of Elder Care Co from time to time. A diagram showing all of the members of the MHL Group immediately before SPA Completion is attached as Appendix 1 to this Agreement;

Net Income means, the net profit for a year after taxes, determined in conformity with IFRS;

Non-Financed Entity: means a company that was formed to implement the acquisition and/or development of an elder care facility that GA REIT has elected to not provide finance for pursuant to clause 7, and which is not acquired by PropCo pursuant to clause 5, clause 7 or clause 8;

Permitted Indebtedness: shall have the meaning given to such term under the Facility Agreement;

PJ Related Party Activities: the companies and businesses listed in Schedule 8 to this agreement. For purposes of this agreement, a PJ Related Party Activity shall be deemed an activity that PJ Controls if (i) it is an activity based in the UK, (ii) it is an activity relating to elder care or specialty care and (iii) PJ in fact Controls the company associated with such activity;

Portfolio: means the portfolio of properties from time to time owned by PropCo (or, if PropCo elects, a subsidiary of GA REIT) and leased to Elder Care Co comprising initially the properties set out in schedule 4 to the SPA (and Portfolio Properties shall be construed accordingly);

Portfolio Leases: means the individual leases, in the terms of the Master Lease, granted by PropCo (or, if PropCo elects, a subsidiary of GA REIT) to Elder Care Co in respect of each of the Portfolio Properties;

Premises: means the specific Portfolio Property to which a clause pertains.

Prior Option to Tax: means an option to tax that has effect in relation to any supplies of property by PropCo (or a subsidiary of PropCo), any member of the VAT Group or a “relevant associate” of PropCo (or a subsidiary of PropCo) (as defined in paragraph 3 of Schedule 10 VATA) as a result of such option being in place and effective over any of the Portfolio Properties at any time before HMRC confirms that PropCo (or a subsidiary of PropCo) has been removed from the VAT Group;

Priority Deed: means the priority deed in the agreed form to be entered into between BoS, GA REIT, PropCo, Elder Care Co, Consensus and Glentworth in connection with SPA Completion;

Property Strategic Capital Improvement: means alterations, additions or improvements (with the Landlord’s prior consent in accordance with this Agreement) to the existing buildings to maintain the business at a Portfolio Property.

Quarter Day: means 31 March, 30 June, 30 September and 31 December in each year;

Relevant Group Company: means New Group Holdco, Elder Care Co, any company carrying on the business of operating elderly care homes from Portfolio Properties, and any company comprised within the Collateral Security from time to time;

Rent Cover Test Period: means the designated period of time ending on a Quarter Day for which the Lease Coverage Ratio is calculated, and for such calculation, all applicable figures for the Rent Cover Test Period shall be considered using the actual figures for the period stated;

RPI Index: means the Retail Price Index published by the Office for National Statistics in the UK. If the Office for National Statistic discontinues publication of the RPI Index, publishes the RPI Index less frequently than necessary to conduct calculations herein or alters the RPI Index in any material manner, then Landlord may adopt a substitute index or procedure which reasonably reflects and monitors consumer prices;

Schedules of Condition: the schedules of condition prepared by Knight Frank prior to the date hereof to be attached to the Portfolio Leases prior to completion of the BTA;

SDLT: means stamp duty land tax;

SPA: has the meaning ascribed in Recital (B);

SPA Completion: means completion of the SPA in accordance with its terms;

SPV Completion: has the meaning ascribed in clause 7.1.6;

SPV Seller: has the meaning ascribed in clause 7.1.3;

SPV Share SPA: means the agreement for sale and purchase of the entire issued share capital of a Dev SPV to be entered into between the SPV Seller and PropCo (or a GA REIT Affiliate) pursuant to clause 7.1.7, being substantially in the terms of the agreed form draft thereof;

Substitution: has the meaning ascribed to it in Schedule 3;

Tax: means any taxes, duties, contributions, withholdings, deductions, charges, levies and sums in the nature of or payable on account of tax;

Term Commencement Date: has the meaning ascribed in the Master Lease;

Trigger Date and Trigger Event: have the meanings ascribed in clause 3.1.3

US Treasury Rate: means the interest rate payable on newly issued ten year United States of America Treasury Notes for the relevant period displayed on the appropriate

page of the Reuters screen (or such other page as the Lender may specify) at 9.00 am New York time on the applicable date of determination specified in this agreement.

VAT: means value added tax (or any replacement or similar tax);

VAT Group: means the VAT group of which CHHG is a member, with group registration number ###-###-#### 42 all the members of which are listed in Appendix 5);

VATA: means the Value Added Tax Act 1994 (or, notwithstanding clause 1.10, any statute, statutory provision or subordinate legislation which it amends or re-enacts it);

Withdrawal: has the meaning ascribed to it in Schedule 3;

Working Capital Facility: means the working capital line not to exceed £7,500,000 provided by BoS and secured by first ranking security over the Senior Security (as said term is defined in the Priority Deed), subject to the terms of the Priority Deed;

Working Day: means any day except Saturday Sunday and bank or other public holidays in England.

and Elder Care Co in writing, and subject further to the agreed form of the table of particulars.

and the date upon which a Trigger Event occurs shall be a Trigger Date.

Subsequent to the entry into of this agreement the parties will work together in good faith to agree the final form of the Development Budgets for development work to be carried out at the Portfolio Properties at Kingsclear Nursing Home, Park Road, Camberley and Oaken Holt House, Eynsham Road, Farmoor, Oxford. In so doing, the parties will establish the treatment of such development works for the purposes of value added tax and will endeavour to establish a structure that eliminates or minimises the impact of any irrecoverable value added tax. To the extent that they are unable to do so then the parties shall discuss increasing the final Development Budget(s) (subject to review and Landlord’s approval) by up to 20% to accommodate that irrecoverable value added tax, with the entirety of said Development Budget(s) remaining subject to approval by PropCo as provided in this agreement.

such default shall constitute a Cross Default.

Agreement.

The parties agree that Portfolio Properties may only be removed from the Portfolio in exchange for another elder care property (a Substitution) or removed from the Portfolio without being exchanged for another elder care property (a Withdrawal) by Elder Care Co only in accordance with the terms and conditions set out in Schedule 3 of this Agreement (Substitution and Withdrawal).

For the purposes of this clause 3.5, the term “Net Worth” shall mean total assets less total liabilities on a consolidated basis for the MHL Group and “Liquid Resources” shall (i) mean assets of New Group HoldCo (calculated on a consolidated basis for the MHL Group) that can readily be converted to cash (such as, by way of example, amounts available to Elder Care Co under a line of credit issued to it, cash and cash equivalents and availability under the Working Capital Facility), less (ii) ) to the extent (a) amounts falling due from the MHL Group (calculated on a consolidated basis) to creditors within one year are greater than (b) amounts falling due to the MHL Group (calculated on a consolidated basis) from debtors within one year, the net of (a) and (b), in each case calculated in accordance with IFRS. A breach of this covenant which remains unless remedied within 10 Working Days of the default occurring shall be treated as a breach of the terms of each Portfolio Lease and the Facility Agreement.

Date under the Portfolio Leases, if said anniversary is a Quarter Day, or on the first Quarter Day occurring after said anniversary, if said anniversary is not a Quarter Day; and

It shall be a default of this agreement, each Portfolio Lease and the Facility Agreement if the Lease Coverage Ratio for the Portfolio is below the applicable Lease Coverage Ratio specified in clause 3.5.4 (b) on two (2) consecutive Quarter Days. Within thirty (30) days of each Quarter Day, Elder Care Co shall deliver to PropCo a certificate signed by its Chief Executive Officer or Chief Financial Officer (from time to time) setting out the Aggregate Earnings achieved and Aggregate Rent payable during the Rent Cover Test Period concerned, together with a calculation of the Lease Coverage Ratio derived therefrom.

foregoing, if PropCo’s approval is not to be unreasonably withheld or delayed, it shall be unreasonable to withhold or delay consent if as a result of the Change of Control Elder Care Co will become controlled by a person or entity who has a good reputation, proven track record, is experienced in owning and managing institutional elder care portfolios in the United Kingdom and such person or entity covenants to PropCo to adhere to the terms of this agreement.

to proportionately allocate such expenses to the various businesses and subsidiaries within the MHL Group. Elder Care Co and New Group HoldCo shall provide such supporting documentation or information as PropCo may reasonably request relating to this cost sharing arrangement.

Elder Care Co shall remit payments of rent due and payable under the Portfolio Leases as an aggregated, single payment pursuant to a wire transfer of funds in accordance with written instructions provided by PropCo, from time to time.

Elder Care Co shall spend per annum (measured from the initial Rent Commencement Date of the Portfolio Leases on a three year rolling basis as provided in clause 3.7.2) the following:

multiplied by (ii) the maximum number of beds licensed for the entire Portfolio (even if fewer beds are utilized in ordinary operations) on capital repairs to and improvements of the Property as part of its maintenance programme at the Portfolio.

As used herein, the term “Property CapEx Factor” initially shall mean £200.00 and the term “Portfolio CapEx Factor” initially shall mean £550.00, such that the total amount Elder Care Co shall spend per annum on capital expenditures per maximum number of beds licensed for the entire Portfolio initially shall mean £750.00, increased annually as provided by this clause. Beginning on the first anniversary of the initial Rent Commencement Date for the Portfolio Leases and on each anniversary thereafter, the Property CapEx Factor and the Portfolio CapEx Factor each shall increase by an amount equal to the increase in the RPI Index, but in no event shall either the Property CapEx Factor and the Portfolio CapEx Factor for an annual period referred to herein be less than the Property CapEx Factor and the Portfolio CapEx Factor, respectively for the immediately preceding annual period. Furthermore, Elder Care Co’s compliance with the requirement of this clause 3.7 shall be computed on a rolling three (3) year look-back basis, meaning that for any date on which PropCo elects to evaluate Elder Care Co’s compliance with this provision, PropCo shall determine the amount of Elder Care Co’s expenditures made during the three (3) year period during the Term preceding said measurement date. Amounts spent pursuant to this clause shall be in addition to expenditures made pursuant to clause 3.8. Elder Care Co shall deliver to PropCo by January 31 of each calendar year a report containing a reasonable degree of detail, in form reasonably approved by PropCo, setting forth the expenditures made pursuant to this clause 3.7 during the preceding calendar year.

The parties agree that Elder Care Co shall make Property Strategic Capital Improvements to the Portfolio Properties in accordance with the terms of Schedule 6 of this Agreement.

then in either such case, Elder Care Co/PJ may sell such ROFO Property at any time within six months of the expiry of the ROFO Period (as may be extended in accordance with clause 5.4) to a third party at a price that is no less than 95% of PropCo’s best offer and otherwise on economic terms (including payment of the price and rental rate, if any) which are no more favourable to the third party purchaser as the terms offered by PropCo (if any). If the sale of such ROFO Property in accordance with the terms of

this clause 5.5 has not completed within six months of expiry of the ROFO Period (as may be extended in accordance with clause 5.4), then Elder Care Co/PJ must comply with the terms of this clause 5 again before it may sell such ROFO Property to the same or any other third party purchaser.

New Group HoldCo, Elder Care Co, Consensus, Glentworth and PJ shall procure that the Consensus Guarantee and the Collateral Security are duly executed by the parties to them and delivered to PropCo and GA REIT on or before SPA Completion.

transfer to another Consensus Package so that such limit is not exceeded and the release shall proceed, and such transfer shall be subject to PropCo’s consent, such consent not to be unreasonably withheld or delayed.

15 Working Days, nominated at the request of either Elder Care Co or PropCo by the President for the time being of the Institute of Chartered Accountants in England and Wales or any successor institute.

1.7:1.0 for a period of 12 consecutive calendar months, it being the intent of the parties that the termination of the Consensus Guarantee is governed by the terms of said instrument and the Facility Agreement.

PropCo (acting reasonably), containing an expiry date and break dates that are coterminous with those applying to the Portfolio Leases but with provisions to suspend the application of all cross references to this Umbrella Agreement, at an annual rent payable from the date of completion of the lease until the revocation of such suspension to be agreed between the Dev SPV and Elder Care Co as the cost of servicing the debt attributable to the relevant Current Development under the Facility Agreement.

it has not previously done so pursuant to the Facility Agreement) elect to either purchase the SPV Shares or the assets comprising the Development Project (the Development Assets) by providing Elder Care Co notice specifying whether it elects to acquire the SPV Shares or the Development Assets (a PropCo Election Notice). If PropCo fails to provide Elder Care Co with such a PropCo Election Notice within the 20 Working Day period referred to in this clause 7.1.6, PropCo shall be deemed to have elected to acquire the SPV Shares. If PropCo acquires the Development Assets rather than the SPV Shares, the portion of the purchase price paid and constituting the basis for the rent payable under the Portfolio Lease in connection therewith shall exclude SDLT arising in connection with said purchase.

future attach) to the SPV Shares or the Development Assets.

If Elder Care Co shall fail to respond to enquiries reasonably raised by PropCo by way of due diligence as referenced in this clause 7.1.9 within two Working Days of such enquiries being raised, the 20 Working Day period for completion of due diligence specified in this clause shall be extended by the period of such delay.

a Deed of Amendment to the lease of the Development Asset removing the suspension of cross references to this Umbrella Agreement, establishing the initial Principal Rent equal to 7.5% of the Relevant Indebtedness (defined below), and making such further modifications as PropCo may reasonably require to conform such lease to the form of the Master Lease.

PropCo shall pay the stamp tax on the share purchase. In addition, at SPV Completion, PropCo shall procure the repayment of the Relevant Indebtedness. For reporting purposes, the total consideration shall include the purchase price for the SPV shares and the Relevant Indebtedness.

twelve month period preceding the Quarter Day on or immediately preceding the Put Option exercise date of at least 1:1.5, based upon a first year capitalization rate that is the greater of:

rent payable under the terms of the lease shall be an amount equal to the following:

has the right from time to time, directly or indirectly, to create or grant a mortgage or any other type of lien or charge on any Portfolio Property, or any portion thereof or interest therein (including the lessor’s interest under a Portfolio Lease), to secure any borrowing or other financing or refinancing. Elder Care Co and the MHL Group shall cooperate with PropCo and GA REIT Affiliate in connection with PropCo’s and/or GA REIT Affiliate’s efforts to obtain any such financing. Elder Care Co undertakes to discuss in good faith and co-operate with PropCo, GA REIT Affiliate or its respective mortgagee if modifications or amendments are required to the affected Portfolio Leases or this agreement, provided that nothing in this clause shall impose any obligation on Elder Care Co to execute any amendment to this agreement and/or the affected Portfolio Leases. Subject to the proviso in the previous sentence, Elder Care Co and, to the extent necessary, such other members of the MHL Group also shall execute such other commercially reasonable and customary documentation required by the mortgagee in connection with the financing, and shall request its lender under the Permitted Indebtedness to execute such other documentation required by the mortgagee in connection with the financing, including without limitation inter-creditor agreements. Elder Care Co shall be reimbursed by PropCo (or GA REIT Affiliate, as applicable) for any properly incurred third party cost and expense incurred by Elder Care Co in complying with any requirements under this clause. The mortgagee shall acquire no greater rights with respect to the Portfolio Leases than the rights held by PropCo or any GA REIT Affiliate as landlord, the security granted to any mortgagee shall be subject in all respects to the terms of the applicable Portfolio Leases and, subject to there being no change of law in England and Wales in relation to tenant rights opposite landlords pursuant to which it becomes prevailing market practice for tenants to enter into such documents, in the event that tenant’s landlord has a mortgagee, it shall not be required to enter into any subordination or postponement agreement with the mortgagee.

Elder Care Co and New Group HoldCo will provide PropCo with the following financial and operational information:

for the avoidance of doubt, and New Group HoldCo, Consensus HoldCo, Consensus, Glentworth, Consensus Newco and any of their subsidiaries) to cooperate with GA REIT to engage any third party chartered accountant to commence the restatement of prior years’ financial information on the basis of IFRS upon execution of the SPA; and

New Group HoldCo and Elder Care Co will cooperate with GA REIT’s auditor on any and all reasonable audit requirements of PropCo and GA REIT imposed under SEC Rules.

GA REIT shall promptly reimburse the MHL Group in respect of its agreed, or otherwise reasonable, properly vouched third-party costs incurred in connection with the following; (a) its initial conversion of historical numbers to IFRS, (b) the additional, reasonable costs of Deloitte to complete an initial audit of the historical financials in accordance with US Auditing Standards (US GAAS), and (c) any additional, reasonable costs of Deloitte in connection with GA REIT including Deloitte's opinion in an SEC filing and (d) if required by GA REIT, the extra cost to audit in accordance with US GAAS versus UK GAAS going forward. Following this initial conversion, Elder Care Co shall pay for any future IFRS costs and the cost of its regular audit. 

it amends or re-enacts it);

the Regulations;

provided that if HMRC notifies PropCo that the Occupational Tenant’s registration status has changed, then the Landlord shall make the Contract Payment subject to such direction made by HMRC in accordance with section 69 FA 2004 and the Regulations, and this proviso shall be applied as often as may be required.

538 of the CAA and, accordingly, Elder Care Co agrees to procure that the relevant Occupational Tenant:

In consideration of GA REIT and PropCo entering into this Agreement and the Documents (as defined below), New Group HoldCo irrevocably and unconditionally:

(New Group HoldCo Guarantee) if the amount claimed had been recoverable on the basis of a guarantee.

This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Guaranteed Entity under the Documents regardless of any intermediate payment or discharge in whole or in part.

If any discharge, release or arrangement (whether in respect of the obligations of any Guaranteed Entity or any security for those obligations or otherwise) is made by PropCo in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of New Group HoldCo will continue or be reinstated as if the discharge, release or arrangement had not occurred and PropCo shall be entitled to recover the value or amount of that payment, security or disposition from New Group HoldCo.

The obligations of New Group HoldCo under this clause will not be affected by any act, omission, matter or thing which, but for this clause 13.1.4 would reduce, release or prejudice any of its obligations under this clause (without limitation and whether or not known to it or PropCo) including:

Without prejudice to the generality of clause ‎13.1.4 (Waiver of Defences), New Group HoldCo expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Documents and/or any facility or amount made available under any of the Documents for the purposes of or in connection with any of the following: acquisitions of any nature; increasing working capital; enabling distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

New Group HoldCo waives any right it may have of first requiring PropCo (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from New Group HoldCo under this clause 13.1 (New Group HoldCo Guarantee). This waiver applies irrespective of any law or any provision of a Document to the contrary.

GA REIT confirms its agreement to cause PropCo to perform all of its obligations under this Agreement, and further agrees to capitalize PropCo to the extent necessary to allow PropCo to perform its obligations hereunder. Without limiting the generality of the foregoing, if for any reason PropCo is unable to promptly perform any financial obligation owed to Seller under this Agreement, then GA REIT agrees to perform such financial obligations on PropCo’s behalf within thirty (30) days’ notice from Elder Care Co, New Group HoldCo or PJ stating that PropCo has failed to perform. GA REIT recognises that Elder Care Co, New Group HoldCo and PJ are relying on this undertaking in entering into this Agreement.

Except as expressly provided in this agreement, each party shall pay its own costs and expenses incurred in connection with the negotiation, preparation and execution of this agreement (and any documents referred to in it).

with a copy to:

all references to time are to local time in the place of deemed receipt.

If a party fails to make any payment due to the other party under this agreement by the due date for payment, and should such failure continue for a period of five Working Days after receipt of written notice, then the defaulting party shall pay interest on the overdue amount at the rate of 3% per annum above BoS's base lending rate from time to time. Such interest shall accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The defaulting party shall pay the interest together with the overdue amount.

this agreement are not subject to the consent of any other person.

This agreement (and the documents referred to in it) are made for the benefit of the parties and their successors and permitted assigns, and the rights and obligations of the parties under this agreement shall continue for the benefit of, and shall be binding on, their respective successors and permitted assigns.

This agreement may be executed in any number of counterparts, each of which when executed shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.

This agreement and agreements referred to in it which are expressed to be in the agreed form constitute the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, arrangements and understandings between them, whether written or oral, relating to their subject matter.

Except as expressly provided in this agreement, the rights and remedies provided under this agreement are in addition to, and not exclusive of, any rights or remedies provided by law.

SIGNED by the parties by their duly authorised representatives on the date which first appears in this Agreement.

A development appraisal submitted by Elder Care Co in respect of a Future Development shall contain the information:

Elder Care Co shall submit the following information in respect of an Acquisition Proposal:

This Schedule governs the process to address a Portfolio Property that has been under-performing (based upon the standards established in this Schedule) and where a turnaround of that property is deemed to be either impossible or impractical to achieve.

clause is intended to limit the total number of Substitutions and/or Withdrawal transactions to a maximum of three in every five year period. Further, no Substitution or Withdrawal transaction shall be permitted during the three year period following the Rent Commencement Date of the Portfolio Leases.

A single Substitution Request may relate to not more than three Portfolio Properties (an Old Prop Group), provided that each of the three Portfolio Properties included within the Old Prop Group individually meets the criteria stated in the clauses (a)-(f), above, or have a justification for inclusion prepared by Elder Care Co and approved by PropCo in its sole discretion.

documents as PropCo may be reasonably require to assess with its evaluation of the request

any rebalancing pursuant to clause 3.1.2 had not occurred (and hence the rental level would be the initial annual rent subject to any increases pursuant to the terms of the Lease);

Elder Care Co may propose to PropCo a Substitution or Withdrawal on terms other than those stated in this Schedule including (inter alia) because Elder Care Co considers the proposal to be in the best interests of the Portfolio which PropCo will consider but will be free to accept or reject same in its sole and absolute discretion.

necessary) with the prior written consent of the Landlord under the Portfolio Lease

(a) the Principal Rent payable under the Portfolio Leases on the day immediately prior to the Market Review Date by (b) 1.025;

The Open Market Rent for each Premises at the Market Review Date may be agreed in writing at any time between the Landlord and Elder Care Co but in the absence of agreement for all the Premises within the period up to the date that is 6 months prior to the Market Review Date but not before the commencement of such period either party may (whether before or after the Market Review Date) by notice in writing to the other require the Open Market Rent for each and every Premises where there is no agreement to be determined by the Review Surveyor.

In default of agreement between PropCo and Elder Care Co on the appointment of the Review Surveyor, the Review Surveyor shall be appointed by the President on the written application of either party, such application to be made not earlier than six months nor later than one month before the Market Review Date, provided that PropCo may not make such an application to the President until Elder Care Co has made an election or is deemed to have made an election in accordance with paragraph 5 of this Schedule.

If by the Market Review Date the Principal Rent payable from that Review Date has not been agreed or determined Elder Care Co shall (subject to the terms of the New Lease) continue to pay the Principal Rent at the rate previously payable, as escalated for Index Rent as provided in the Portfolio Leases

Time shall not (save as in paragraph 5.2 of this Schedule expressly otherwise provided) be of the essence in respect of any provisions of this Schedule.

Commencement Date of the Portfolio Leases (the “Second Application Period”) and Landlord has already funded Property Strategic Capital Improvements on the Thunderbird Properties (i) during said period which, when added to the requested funding in question, exceed £1,000,000 plus the portion of the maximum expenditure permitted under clause 19.2.6(b) that was not requested during the period stated in said section and/or (ii) during said period and prior thereto exceed £3,000,000;

Additionally, Landlord shall have no obligation to fund any Property Strategic Capital Improvement cost following the fifth (5^th) anniversary of the initial Rent Commencement Date of the Portfolio Leases, even if less than £5,000,000 has been disbursed as of said date.

provided that, for purposes of this clause, the Lease Coverage Ratio shall be calculated by including “CapEx Rent” (in addition to Principal Rent) in the calculation of Aggregate Earnings and Principal Rent. As used herein, the term “CapEx Rent” shall equal the product obtained by multiplying (i) the amount of the Property Strategic Capital Improvement cost for which Elder Care Co is requesting payment in the current

payment application, plus the total amount of all Property Strategic Capital Improvement cost previously paid by Landlord under all of the Portfolio Leases by (ii) 7.5%.

The minimum amount payable by a Landlord in connection with an application to fund pursuant to this Schedule shall be £50,000.00, except for the final payment of the amount available. Sums shall be payable by Landlord under this clause with respect to all Portfolio Leases no more frequently than monthly. Sums paid by Landlord under this clause shall be disbursed only to pay (i) the cost of materials used to construct the Property Strategic Capital Improvements and the cost of labor provided to construct the Property Strategic Capital Improvements, and (ii) design costs, professional fees, the costs of license and permits, or other costs and expenses, provided that the Property Strategic Capital Improvements funds shall be used to pay only those expenses enumerated on a budget approved by Landlord as provided herein

THIS DEED OF ADHERENCE is made on 20••

[insert name of GA REIT Affiliate] of [insert address of GA REIT Affiliate] (GA REIT Affiliate) in favour of the persons whose names are set out in the schedule to this deed and is supplemental to the Agreement in respect of the leasing of the Caring Homes Elderly Care Home Portfolio and other matters relating to Caring Homes Healthcare Group Limited, formerly known as Myriad Healthcare Limited (Elder Care Co) and its subsidiaries dated [_•_] 2013 between (1) Myriad Healthcare Limited, (2) Caring Homes Healthcare Group Limited (3) Consensus Support Services Limited, (4) Consensus Holdco Limited, (5) Consensus Newco Limited, (6) GA HC REIT II U.K. SH Acquisition Limited, (7) Paul Jeffery, (8) Glentworth House Limited, (9) Walstead Place Residential Home Limited, (10) Caring Homes (L’Hermitage) Limited and (11) MHL Holdco Limited (the Agreement).

GA REIT Affiliate intends to acquire one or more properties that will become Portfolio Property and to lease the same to Elder Care Co upon the terms of a Portfolio Lease subject to GA REIT Affiliate entering into this deed.

GA REIT AFFILIATE UNDERTAKES AS FOLLOWS:

GA REIT Affiliate confirms that it has read a copy of the Agreement and the documents referred to therein and covenants with each person named in the schedule to this deed to perform and be bound by all the terms of the Agreement applicable to PropCo either generally or specifically in respect of the Portfolio Properties now or hereafter to be acquired by GA REIT Affiliate as if GA REIT Affiliate were named in the Agreement as a party thereto.

This deed (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this deed or its formation) shall be governed by and construed in accordance with English law.

IN WITNESS whereof this deed has been executed by GA REIT Affiliate and is intended to be and is hereby delivered on the date first above written.

[Schedule to Deed to include all parties (including by way of earlier Deeds of Adherence) to the Agreement.]

LOP Investments = PJ alone and owns a property in Italy

Whitegates Ltd = Trading home in Westfield Sussex – Paul and his brother Robert (RJ)

Marshcall Ltd = PJ alone owns a freehold in Ipswich for Supported Living residents – Lime Tree Housing Ltd is the Tenant and provides the tenancies.  LTH =PJ alone.

Jeffery Investments Ltd = PJ alone and owns a residential block as Landlord.

Kingarth Ltd = PJ alone and operates a LD Home in Bury

Willowbeech Ltd = PJ alone and operates a LD Home in Bournemouth

First Care Homes (Ipswich)Ltd/Park View Care Homes (Ipswich)Ltd = Care Home in Ipswich – PJ/RJ/HJ (Helena, Paul’s mother)

CAP 11 Ltd = Property Company (holding investments, some of which are used for staff accommodation and rented, together with two other houses which are rented out), PJ/Craig Griffin.

Antra = JV Myriad – Lawgra. The site being developed by this joint venture company is not longer being developred and the site is being sold (near exchange of contracts).

Caring Building Account Ltd  (A dormant company that has not traded, established but never used).

Caring People Ltd = Recruitment Co/ HJ and husband.

The following comprise the Gretton Homes:

Bannigans

19 High Street

Corby Old Village

Corby

Northants

NN17 1UX

Clare House

50 Doune Road

Dunblane

Stirlingshire

FK15 9HR

Fletton Avenue

35 Fletton Avenue

Peterborough

Cambridgeshire

PE2 8AX

Gretton House

3 High Street

Gretton

Northants

NN17 3DE

Haydock House

89 Rockingham Road

Kettering

Northants

NN16 9HX

The following homes are within five miles of each other:

A)    

1.    Deer Park View

Sandy Lane

Teddington;    

2.    Galsworthy House

Kingston Hill

Kingston upon Thames

KT2 7LX;

3.    The Home of Compassion

High Street

Thames Ditton

KT7 0TS; and

4.    The Pines

104 West Hill

Putney

London

SW15 2UQ.

    

B)    

1.    Abbey Crest Nursing Home

Essex Way

Sonning Common

Reading

RG4 9RG; and

2.    Huntercombe Hall Nursing Home

Huntercombe Place

Nuffield

Henley-on-Thames

RG9 5SE.

C)    

1.    Moorlands Nursing Home

Macdonald Road

Lightwater

GU18 5US;

2.    Dormy House

Ridgemount Road

Ascot

SL5 9RL;

3.    Kingsclear Nursing Home

Park Road

Camberley

GU15 2LN; and

4.    Coxhill Manor Nursing Home

Station Road

Chobham

Woking

GU24 8AU.

D)    

1.    Beechwood Park Nursing Home

136 Main Street

Sauchie

Alloa

FK10 3JZ;

2.    Forth Bay Nursing Home

Walker Street

Kincardine

Alloa

FK10 4NT; and

3.    Hillview Court Nursing Home

Sauchie

Alloa.