PARTNERSHIPS AND JOINT VENTURES

1. PARTNERSHIPSAND JOINT VENTURES March 5, 2014

2. PRESENTERS William Pettit President and Chief Operating Officer R. D. Merrill Co. Michael Comparato Chairman and Chief Executive Officer, Vieste, LLC John Mehrkens VP of Senior Housing Partners, Presbyterian Homes & Services, MN Adam Kane, Esq. Senior Vice President for Corporate Affairs Erickson Living Moderator: R. Jeffrey Sands, Esq. Principal / General Counsel HJ Sims

3. HJ Sims ConferenceMarch 4 – 6, 2014 Senior Housing Partners Affiliated w/Presbyterian Homes & Services

4. St. Andrew’s Village, Mahtomedi, MN

5. St. Andrew’s Village, Mahtomedi, MN • 60%/40% partnership with St. Andrews Lutheran Church • 44 Assisted Living Apartments • 25 Memory Care Apartments • 70 Independent Living Apartments • Child Daycare located on site • Town Center - 16,000 sq. ft.

6. McKenna Crossings, Prior Lake, MN

7. McKenna Crossings, Prior Lake, MN

8. McKenna Crossings, Prior Lake, MN Club Room Courtyard Cafe Dining Room

9. McKenna Crossings, Prior Lake, MN • Originally formed as a 50%/50% partnership with Shepherd of the Lake Lutheran Church (currently 100% owned by PHS). • 66 Assisted Living Apartments • 18 Memory Care Apartments • 79 Independent Living Apartments • Town Center - 26,000 sq. ft.

10. Valley Ridge, Burnsville, MN

11. Valley Ridge, Burnsville, MN

12. Valley Ridge, Burnsville, MN • Partnership w/CDA – PHS owns Assisted Living and manages the CDA owned Independent Living. • 80 Independent Living Apartments • 40 Assisted Living Apartments • 20 Memory Care Apartments • Town Center - 20,000 sq. ft.

13. Development Partnerships William Pettit President and Chief Operating Officer R. D. Merrill Co.

14. Merrill Gardens • Owns and operates 21 senior living communities in four states with a focus on lifestyle. • Each Merrill Gardens community is different in physical structure, reflecting the characteristics of the area where it is located and the needs of residents. • Affiliate of the R.D. Merrill Company, a private holding company formed in the 1890’s by timber pioneer R.D. Merrill. • Has a long history of developing senior housing communities.

15. Structural Questions • First question: Should I self develop or use outside developer? • Pros and Cons • Second question: Should I contract with an outside developer or include developer in a joint venture? • Pros and Cons

16. Merrill Conclusion • Joint Venture • Reasons • Alignment of Interests • Identity of Purpose • Attracts Developers who have a longer term interest in the project and/or the location (i.e. part of a larger development) and so they care about long term viability (not just build and go). • Shares financial burden and risk

17. Choosing Development Partner • Criteria • Expectations • Expectations

18. Structure • Responsibilities • Capital Obligations • Merrill oversight • Exit

19. Results • Approach has lead to a group of joint venture partners that really buy into the Merrill approach • Interests are aligned • Local knowledge enhances choice of sites • Results in multiple projects and solid pipeline • Has resulted in projects that are part of larger community developments.

20. Erickson Living Creating Communities That Celebrate Life March 2014

21. Erickson Overview

22. Erickson’s Diverse & Expansive Portfolio • Erickson manages a diverse portfolio of senior living facilities of various sizes ranging from 200 to 2,250 units • Erickson’s healthcare facilities provide a full continuum of services to residents and seniors seeking stand-alone health services

23. Company Overview • Erickson Living is one of the largest senior living operators in the United States • Approximately 20,000 units in 11 markets across the U.S. • Owned by Redwood Capital, a family office with significant capital dedicated to senior housing • Track record of strong partnerships with not-for-profits which operate 16 Erickson communities • Erickson is a trailblazing senior living company • Differentiated product with high resident satisfaction • Industry leading occupancy and longer length of stay • Dominant market positions • Most comprehensive healthcare system in senior living • Only senior housing operator taking risk in a Medicare Advantage plan • Diversified service offering across the spectrum of senior living and healthcare • Committed and experienced service culture

24. Industry Leading Results • Erickson management has driven industry leading occupancies and high resident satisfaction • Independent living occupancy: 96%; Industry average: 90% • Healthcare occupancy: 94% 1; Industry average: 89% • Customer satisfaction: 95% will recommend to family and friends Erickson Managed Communities Quarterly Occupancy 1 Source: Erickson Management and NICMAP. (1) Excludes ETH, HSD, and WCD healthcare buildings currently in lease-up.

25. Working with Non Profits • Erickson Living has a history of working with non profits • Work together to further the mission of the non profit • Align incentives to create a win – win • Erickson takes development risk and non profit focuses on governance • Non profit purchase option or maintain as a joint venture • Propriety source of capital for expansion and repositioning • Provide the non profit access to our national resources and programs • Regulatory • Sales and Marketing • Public Relations and Crisis Management • Centralized Back Office • Operations • Erickson Health • Erickson Advantage • Erickson Realty and Moving Services

26. Structure Percent of Revenue Share of Cash Flow Lease Management Contract The Lease and Management Contract need to be “market rate” agreements

27. Key Points • IRS regulations • Respect for autonomy • Alignment of interests

28. Erickson’s Growth Strategy

29. Growth Strategy • Erickson is committed to investing in strategic growth opportunities • Work with additional Not For Profit Communities • Senior living and healthcare facility acquisitions and development • Expansion of ancillary services, primary care medical group, at-risk products, and innovative new Medicare and Medicaid services • Leverage senior living and healthcare facility expertise to explore additional development opportunities in Erickson’s footprint • Explore partnership opportunities with regional and national operators Ashby Ponds New Residential Building Highland Springs Continuing Care Building

30. VIESTE Public Private Real Estate & Infrastructure Investment Solutions 11TH ANNUAL HJ SIMS CONFERENCE Ft. Lauderdale, Florida March 4-6, 2014 Presented By: Michael Comparato Chief Executive Officer

31. vIESTE V • A consortium of companies that collectively plan, finance, design, build, own and operate capital assets. • Asset classes include renewable energy, biofuels, social infrastructure and healthcare facilities • EXAMPLES: • Waste to Energy Facility Glendale, Arizona • Youth/Amateur Sports Complex Delavan, Wisconsin • Adult Congregate Living Kissimmee, Florida

32. Public private partnerships V A Public Private Partnership (PPP) is formed when a public sector entity elects to divert from traditional, government-funded and executed delivery models to accomplish a capital project or program. The lack of capital, stress on public debt and a tremendous amount of deferred investment in public sector infrastructure dictate the introduction of alternative delivery methods that include private sector resources. • Joint Ownership • Performance Agreements • Incentives and Concessions

33. SENIOR LIVING VALUE PROPOSITION V Wabash County, Indiana Glendale, Arizona Overview • Rural County Indiana • Property Tax Net of TIF • Payroll Tax with 60% capture rate • $1.5 million investment (10% of capex) • Facilitated sale of residual acreage to hospital • Suburban Metro Phoenix • Property Tax – No TIF • Payroll Tax with 30% capture rate • Expedited entitlement process • Infrastructure improvements • Quantify and promote economic impact early in planning • Incorporate economic impact and host jurisdiction into project model • Don’t expect to receive something you don’t ask for