Andrew and Margita Zards et al. - Page 7

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               On December 12, 1985, Vebeliunas, as president of Litas,               
          executed a mortgage assumption agreement whereby Litas assumed              
          the first Kasa obligation (the Litas assumption).                           
          Good Shepherd:  Organization and Operations                                 
               The articles of incorporation of Good Shepherd provide that            
          Good Shepherd is formed for the following purposes:                         
                    Clause (a).  To carry on the business of                          
               acquiring, constructing, owning, managing or operating                 
               nursing homes and other health care facilities,                        
               including health care facilities licensed by the                       
               Indiana Health Facilities Licensing Council, and                       
               performing all other legal activities related thereto.                 
                    Clause (b).  To act as agent of or representative                 
               for any one or more corporations, associations,                        
               partnerships, individuals, or other legal entities, to                 
               the extent that such activities are lawful under the                   
               Act.                                                                   
                    Clause (c).  To transact any or all lawful                        
               business for which corporations may be incorporated                    
               under the Act.                                                         
               Prior to its involvement with the property, Good Shepherd              
          had never operated a nursing home or a health care or medical               
          facility.  None of Good Shepherd's officers had operated a                  
          nursing care, elder care, or health care facility.  Good Shepherd           
          has never received a license from the State of Indiana to operate           
          the property as a nursing home, nursing care facility, or other             
          medical facility.  Good Shepherd has never received a license to            
          operate an elder care facility on the property.  Good Shepherd              
          has never obtained Medicaid or Medicare certification for the               







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