1 Integrating Innovative Financing Strategies for Future Flexibility February 25, 2015

Table of Contents I.Speaker Introductions II.Setting the Stage III.Case Studies

Moderator James Bodine, Executive Vice President HJ Sims Speakers David Laffey, Senior Vice President, Director of Capital Markets LCS Jimmy Taylor, Jr., Chief Operating Officer Omega Communities Jeffrey Sands, Managing Principal/General Counsel HJ Sims

David Laffey, Senior Vice President, Director of Capital Markets LCS

5 Timber Ridge at Talus, Issaquah, Washington

6 Refinancing and Expansion Financing- Timber Ridge Overview Timber Ridge is a for-profit Lifecare CCRC situated on 9.5 acres at the base of Cougar Mountain in Issaquah, WA Phase I of the community consists of 184 ILUs (98% occupied) and a 36 bed Health center LEED Certified Silver Ph II to add an additional 145 ILUs (84% pre-sold), 9 additional SNF beds, 14 Assisted Living Units and a 12 unit Memory Care $28 MM of existing debt on Ph I Partnership Structure Third JV between LCS/Westminster Funds. 85% Westminster/15% LCS Partnership spans over a decade Includes 8 separate Joint Ventures +$30 MM of partnership equity invested

7 Refinancing and Expansion Financing- Timber Ridge Opportunity Refinance PHI debt, $28 MM, and source expansion financing for PH II, $126.5 MM, for a total project financing of $154.5 MM Continue very high resident satisfaction and excellent reputation Cater to market demand Challenges Market liquidity Refinancing of existing debt and provision for expansion financing Closed end fund as a partner with a stated maturity date. Dovetail debt maturity/community stabilization with fund maturity Bank market support albeit heavy guarantees, incremental equity (+$30 MM invested) and modified loan amount Need to combine Multiple Sources of Financing Continued resident satisfaction

8 Refinancing and Expansion Financing- Timber Ridge Solutions & Results Solicited Capital Markets interest across the spectrum of participants including Banks, Institutional Investors, Taxable bond funds and REITs Financing Parallel-processed financing solicitations Dovetailed loan maturity with Fund maturity $154.5 MM of total senior financing provided entirely by NHI $90 MM to be repaid from entrance fees from PH II, approximate 80% occupancy, with $60 MM of permanent debt Limited guarantees Purchase Option to NHI upon stabilization Dovetailed Fund maturity with Purchase Option

9 Trillium Woods, Plymouth, Minnesota

10 Start-Up Financing Trillium Woods New LifeCare community to be built in Plymouth, MN Situated on 46 acres of land Phase I to include 209 ILU (gross entry fees of +$116,000,000) and a 44 bed Health center Total Phase I project cost of $161,400,000 Opportunity - Occupancy of Primary Market Entrance fee product nearly 100% occupied Limited Lifecare options Net market penetration rate of 5.8%

11 Start-Up Financing Trillium Woods Challenges $161,400,000 Capital Cost Budget Limited market liquidity Review all capital alternatives including Bank financing, bond financing, private placement, senior & subordinate debt New competition to come on stream Construction cost escalations

12 Start-up Financing Trillium Woods Solutions & Results Financing Parallel-processed financing solicitation of commercial banks, institutional taxable bond funds, hedge funds and family offices Secured senior debt commitments from commercial lenders for $70 MM, representing a repayment to those lenders upon achievement of a 65% initial occupancy Secured parity debt of $28 MM from the family office of the owner of the construction company. Represents full debt repayment upon achievement of 85% initial occupancy Partnership owns the project free and clear of all debt at 85% occupancy Projected debt capacity upon repayment of debt of +$60 MM, which will be accessed for PH II funding

Jimmy Taylor, Chief Operating Officer Omega Communities

14 Omega Communities The Fountains of Hope OMEGA CAPITAL/OMEGA COMMUNITIES Multifaceted Financial Firm Senior Housing; Venture Capital; Real Estate; High Net Worth Insurance Senior Living With a Mission SYNOPSIS 140 Bed Assisted Living and Memory Care Facility Bill Sims adjusted 110 bed assisted living and memory care facility Ingress/Egress issues and site accessibility (Sarasota I-75 Visibility) Drove Jeff Sands to 6 competing facilities and counted turns Began structuring financing in June 2014 Broke ground in October 2014 and closed financing in November OPPORTUNITY Expand Southwest Florida I-75 Footprint North Port; Sarasota; Fort Myers; Others Partner with 5,000+ member church also responsible for 13 other churches Largest indoor shopping mall built in US in last decade Adjacent to Lakewood Ranch 5 th Best Subdivision in US in 2013

15 CHALLENGES William B. Sims, Managing Principal; HJ Sims Ingress/Egress Slightly ahead of our time? Major connector announced in January Impending competition MITIGATING FACTORS THE OMEGA TEAM Life Care Services and The LCS Family of Companies 24 month cooperative relationship prior to launch LCS Development serves as Project Manager during construction Serves as Operating Partner/Manager Investment in project/provided operating backstop (First Ever) Core Construction/Gilbane Building Company Combined $3 billion bonding capacity Senior housing experience/overall expertise and reputation Quality; Controls; Professionalism; Relationship; Balance Sheet Omega Communities The Fountains of Hope

16 MITIGATING FACTORS (Continued) CliftonLarsonAllen Sue Bunevich served as single point of contact Specific expertise and flexibility to adapt to our unique model Market Study and Feasibility Study integrity Legal Counsel David Williams of Butler Snow Bob Gang and Bruce Giles-Klein of Greenberg Traurig Ty Roofner, Brian Watson and Alina Arbuthnot of Burr Forman 7 Additional Firms SOLUTIONS AND RESULTS Creative and Complex Financing Structure Use of 142(d) revenue bonds (tax free) Use of taxable bonds for greater financing flexibility Mezzanine financing by new partner Brevet Capital Letter of credit vs. cash for certain reserves Land value contribution reduces loan to overall cost Draw down bond allocation/reduced debt service reserve Omega Communities The Fountains of Hope

17 FINAL CAPITAL STACK Single Purchaser for Tax Free Bonds ($20.15 Million) Also willing to purchase taxable tail ($1.45 Million) HJ Sims introduction; Sims also had backup plans Accommodating terms (flexibility, rate, call, etc.) Letter of credit vs. cash for certain reserves Equity Mezz Land Senior Tax Free Senior Taxable EB5 $2.7 million land contribution and $750,000 letter of credit $4 million of Mezz funding by Brevet Capital $20.15 million of tax free bonds purchased by single institutional investor $1.45 million of taxable bonds purchased by same investor EB-5 raise to cover Mezz and letter of credit retirement within 18 months Omega Communities The Fountains of Hope OMEGANOMICS (Be Careful What You Wish For) Scalable and Reproducible Senior Housing Model Brevet committed to 9 additional senior living projects with Omega Brevet also invested working capital into Omega Communities Brevet Investment Fund emphasizes use of EB-5 funding Previous bond purchasers interested in participating again, among others Omega expects to close 3-4 projects in 2015 (Fort Myers and Atlanta)

Jim Bodine, Executive Vice President HJ Sims

19 Acquisition & Recapitalization Financing Laurel Lake Retirement Community Synopsis Strong performing 425 unit/bed Single Site Not-for-Profit CCRC in Hudson, OH Opened 1989 & Affiliated in 1997 with Catholic Health Partners CHP divestiture of LLRC (and selected senior living facilities) in 2013 Opportunity Consolidate ownership/operation by incumbent Management via Acquisition Continuity of successful operation, high resident satisfaction and excellent reputation in the community Continued investment in services, programs and facilities to maintain strong position

20 Challenges Two-Step Acquisition Bid-to-Financing Process Coordination of Multiple Constituents of Sponsor (Board, Management, Residents) Competitive Bid Process and Short Timeline Establishing Bidding Credibility with Parent (CHP) Highly Leveraged Transaction Finance Purchase Price, Working Capital & Reserves Limited Sponsor Equity Acquisition & Recapitalization Financing Laurel Lake Retirement Community

21 Challenges (Continued) Acquisition of Independent Living Units (First Use Tax Code Limitations) Requiring Equityor Taxable Financing Need to Combine Multiple Sources of Financing Bank & Bond Debt (Taxable & Tax-Exempt) Senior & Subordinate Debt Solutions & Results Acquisition Integrating iterative financial forecasting and debt capacity analysis to formulate purchase price Modeling multiple financing/capital structure scenarios including bank and bond debt on senior/subordinate bases Established credibility with Seller (and Advisors) and selected as Winning Bidder Acquisition & Recapitalization Financing Laurel Lake Retirement Community

22 Solutions & Results (Continued) Financing Parallel-processed financing solicitation of commercial banks (senior debt) and institutional & retail investors (subordinate debt) Secured senior debt commitments from commercial banks and indications of interest for subordinate debt Successfully navigated integration of security, covenant and default/remedy provisions between senior and subordinate debt Solidified investor interest in subordinate debt, combining retail and institutional participation $50 million total financing $36 million senior taxable bank debt (adjustable/variable rate) $9.5 million senior tax-exempt bank debt (adjustable/variable rate) $2 million subordinate tax-exempt bonds (fixed rate) $2.7 million subordinate tax-exempt bonds (adjustable rate) 5.42% blended all-in financing cost Acquisition & Recapitalization Financing Laurel Lake Retirement Community

Jeffrey Sands, Principal/General Counsel HJ Sims

24 Sims Case Study Athena Acquisition VI, LLC SIMS RAISES $7.8 MILLION OF PREFERRED EQUITY FOR ACQUISITION OF A PORTFOLIO OF 6 NURSING HOMES IN MASSACHUSETTES Herbert J. Sims & Co., Inc., (Sims) through an affiliate, provided $7.8 million of preferred equity to finance the acquisition of a portfolio of 5 skilled nursing facilities in Massachusetts comprised of 705 skilled nursing beds and one leasehold interest with 21 skilled nursing beds (the Portfolio) by Athena Health Care Associates Inc. (Athena).

25 Sims Case Study Athena Acquisition VI, LLC Background Sims was approached by Athena, a successful long-term care operator in New England with locations in Connecticut, Massachusetts and Rhode Island, to finance the acquisition of a portfolio of 5 skilled nursing facilities and one leasehold interest in Massachusetts comprised of 726 beds. The plan of finance included a first mortgage loan, preferred equity, sellers not an equity from Athenas principals. Challenges There were several challenges associated with this financing including: Closing within 30 days Providing a high-leverage financing equal to 95% of appraised value Meeting very strict Senior Lender requirements on the form of our investment Avoiding certain regulatory restrictions Anticipating a possible future HUD refinancing

26 Sims Case Study Athena Acquisition VI, LLC Specific Structuring Challenges Senior Lender Prohibition on any subordinate debt Limitations distributions Limitations on change of ownership High Leverage Issue Bad appraisal Regulatory Restrictions Licensure not conducive to investment partnerships with multiple owners Anticipated HUD Refinancing Need to structure so as to have argument that investment is eligible for HUD refinancing Time Constraint

27 Structure of Athena Transaction Athena Member Athena Landlord MA III LLC Athena Health Care Systems MA III LLC Class A Equity Athena Acquisition VI, LLC (Issuer) Athena Equity 5 Realty Companies6 Operating Companies 100% Equity Lease s HJ Sims Investments, LLC 100% Taxable Bonds ($12.275M) Senior Debt ($68.750M) Limited Guaranty from Athena

28 Sims Case Study Athena Acquisition VI, LLC Result Sims was able to provide preferred equity that met the needs and the requirements of both Athena and the Senior Lender. The expertise and creativity of Sims bankers, along with the flexibility and industry knowledge of its retail investors resulted in a unique solution for Athena. Preferred equity investments with excellent owners such as Athena are the latest example of Sims using its extensive investor base to provide financing to senior housing providers. Sims excels in filling the niches that allow an owner or developer to complete a transaction by providing creative financing such as preferred equity or mezzanine debt.

29 THANK YOU

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1 Integrating Innovative Financing Strategies for Future Flexibility February 25, 2015