CHECKLIST FOR REVIEWING THE CCRC AGREEMENT

CHECKLIST FOR REVIEWING THE CCRC AGREEMENT SPONSOR 1. Name of sponsor: 2. Is the sponsor affiliated with any other group? Yes No If yes, name of group: 3. What is the track record of the sponsoring organization? 4. Is the sponsor not-for-profit? Yes No 5. Is the facility a member of AAHSA? Yes No 6. Is the facility accredited by CCAC? Yes No 7. Has the CCRC been issued a Certificate of Authority by the New Jersey Department of Community Affairs? Yes No 8. Is the CCRC an existing successful facility? Yes No 9. Is the CCRC mature (i.e., more than 8 years old or at least between 3 and 9 years old)? Yes No ? 2010 Begley Law Group. All rights reserved. 10. Has the CCRC been continuously operating since opening? Yes No 11. Is the occupancy rate at least 90%? Yes No 12. Is the annual turnover rate 1% for each year of operation, but not more than 8% annually? Yes No 13. Is the percentage of the population using health-related services less than 20%? Yes No 14. Is the average number of residents per unit not more than 1.5? Yes No 15. Is the average age of residents no more than 80 years? Yes No 16. If the CCRC is under construction, has it met an 80% pre-sale? Yes No 17. If the CCRC uses a GAAP income statement, does it amortize it's entry fees and establish a health care reserve for the unamortized portion of the fees? Yes No 18. Is the Excess Margin Ratio between 2% and 4%? Yes No 19. Is the Liquidity Ratio between 1.25% and 1.75%? Yes No 20. Is the Capital Structure Ratio around 10% or 11%? Yes No ? 2010 Begley Law Group. All rights reserved. 21. If the CCRC is under construction or less than 3 years old, has an actuarial study been furnished showing the actuarial assumptions? Yes No 22. Has Standard and Poors rated the debt of the CCRC? Yes No If yes, what is the rating? 23. Has Fitch Investors Service rated the debt of the CCRC? Yes No If yes, what is the rating? 24. Has the CCRC had a 90% occupancy rate for at least one year? Yes No 25. Do residents have input into management decisions? Yes No If yes, to what extent? 26. Is the facility operated by the sponsor or by a professional manager? If operated by a professional manager, who is the manager? If operated by a professional manager, what is the track record of that manager? 29. Has the client reviewed the rules and regulations or facility handbook? Yes No ? 2010 Begley Law Group. All rights reserved. If yes, are the terms satisfactory to the client? Yes No 30. Has the client reviewed the latest inspection reports available from the facility or from DCA? Yes No 31. Has the client visited with residents and asked them about the CCRC? Yes No ENTRY FEE 32. What is the entry fee? $ 33. Is the contract: Extensive? Yes No Modified? Yes No 34. What percentage of the entry fee is tax deductible as a medical expense? 35. Is the entry fee refundable? Yes No 36. Is it refundable on a declining basis? Yes No If yes, what is the basis? 37. Is it partially refundable? Yes No If so, what portion is refundable during what period of time? ? 2010 Begley Law Group. All rights reserved. 38. If the entry fee is refundable, does the CCRC send the resident a Form 1099? Yes No 39. If the facility does not send the client a For 1099, does the facility reimburse the resident, if a tax is later assessed? Yes No MONTHLY FEE 40. What is the amount of the monthly fee currently charged? $ 41. Are monthly fees for single and Yes No double occupancy clear? 42. On what day of the month are monthly fees paid? Is there a grace period for payment of monthly fees? 43. What are the late charges for late payment? 44. What notice is required before increase in monthly fees? 45. What have the fee increases been over the last: One Year? Two Years? Three Years? ? 2010 Begley Law Group. All rights reserved. Four Years? Five Years? 46. What are the formulas for increasing monthly fees? 47. Are increases in monthly fees capped? Yes No If yes, what is the cap? 48. Will the monthly service change when the resident is permanently assigned to: Long-term care facility? Yes No If yes, by what formula? Assisted care facility? Yes No If so, by what formula? ? 2010 Begley Law Group. All rights reserved.