Document:

Exhibit 10.1

 

Execution Version

 

LIMITED LIABILITY COMPANY AGREEMENT

OF

WATERMARK AQUA OPERATOR, LLC

 

Dated as of December 27, 2013 

 

    	 

    	 

    

 

TABLE OF CONTENTS

	 	 	Page
	 	 	 
	ARTICLE 1.	DEFINITIONS	1
	 	 	 
	1.01.	Defined Terms	1
	1.02.	Interpretation	15
	 	 	 
	ARTICLE 2.	FILING; NAME; PLACE OF BUSINESS	15
	 	 	 
	2.01.	Filing	15
	2.02.	Name of Venture	15
	2.03.	Place of Business	16
	2.04.	Registered Office and Registered Agent	16
	 	 	 
	ARTICLE 3.	PURPOSES AND POWERS OF THE VENTURE	16
	 	 	 
	3.01.	Purposes	16
	3.02.	Powers	16
	 	 	 
	ARTICLE 4.	TERM OF VENTURE	16
	 	 	 
	ARTICLE 5.	CAPITAL CONTRIBUTIONS; CLOSING UNDER THE PURCHASE AGREEMENTS	16
	 	 	 
	5.01.	Initial Capital Contributions	16
	5.02.	Additional Capital Contributions	17
	5.03.	Intentionally Omitted.	19
	5.04.	Intentionally Omitted.	19
	5.05.	Liability of Members	19
	5.06.	Return of Capital	19
	5.07.	Sole Benefit	20
	 	 	 
	ARTICLE 6.	ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS	20
	 	 	 
	6.01.	Capital Accounts	20
	6.02.	Income Allocations	21
	6.03.	Special Allocations	21
	6.04.	Tax Allocations; Allocation of Income and Loss	22
	6.05.	Distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow	23
	6.06.	Intentionally Omitted.	25
	6.07.	Withholding Taxes	25
	 	 	 
	ARTICLE 7.	MANAGEMENT	26
	 	 	 
	7.01.	Management	26

 

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	7.02.	Major Decisions	26
	7.03.	Permanent Major Decisions	29
	7.04.	Administrative Member	29
	7.05.	Removal of the Administrative Member	30
	7.06.	Goods and Services from Affiliates and Professionals	33
	7.07.	Approved Business Plan and Budget; Approved Long Term Business Plan	35
	7.08.	Compensation; Reimbursement for Expenses; Other Expenses	37
	7.09.	Intentionally Omitted	37
	7.10.	Other Business Ventures; Non-Compete	37
	7.11.	Intentionally Omitted	38
	7.12.	REIT Compliance	38
	7.13.	Leasing of the Facilities	39
	7.14.	Subsidiaries; Authorized Signatories	39
	 	 	 
	ARTICLE 8.	BANK ACCOUNTS; BOOKS AND RECORDS; STATEMENTS; TAXES; FISCAL YEAR	40
	 	 	 
	8.01.	Books of Account	40
	8.02.	Fiscal Year	41
	8.03.	Bank Accounts	41
	8.04.	Financial Statements	41
	8.05.	Tax Returns; Tax Matters Partner	43
	8.06.	Tax Elections	43
	 	 	 
	ARTICLE 9.	TRANSFERS AND PLEDGES OF INTERESTS	44
	 	 	 
	9.01.	Restrictions on Transfers and Pledges of Interests	44
	9.02.	Conditions Applicable to All Transfers	45
	9.03.	Admission of Transferee	46
	 	 	 
	ARTICLE 10.	FORCED SALE OF THE PROPERTIES	47
	 	 	 
	10.01.	Initiation of Forced Sale; Sale of Interest	47
	10.02.	Closing of the Purchase	48
	10.03.	Sale of the Facilities	51
	10.04.	Special Provisions	53
	 	 	 
	ARTICLE 11.	DISSOLUTION AND LIQUIDATION; EVENTS OF DEFAULT	53
	 	 	 
	11.01.	Events Causing Dissolution	53
	11.02.	Right to Continue Business of the Venture	53
	11.03.	Distributions Upon Dissolution	54

 

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	ARTICLE 12.	Intentionally omitted	54
	 	 	 
	ARTICLE 13.	REPRESENTATIONS AND WARRANTIES	54
	 	 	 
	13.01.	Representations and Warranties of the Members	54
	13.02.	Representations and Warranties by the TFG Member	55
	13.03.	Representations and Warranties by the NorthStar Member	56
	 	 	 
	ARTICLE 14.	MISCELLANEOUS PROVISIONS	56
	 	 	 
	14.01.	Compliance with LLC Act	56
	14.02.	Additional Actions and Documents	56
	14.03.	Notices	56
	14.04.	Expenses	57
	14.05.	Exculpation	57
	14.06.	Time of the Essence	58
	14.07.	Ownership of Venture Assets	58
	14.08.	Status Reports	58
	14.09.	Survival	58
	14.10.	Waivers	58
	14.11.	Exercise of Rights	59
	14.12.	Binding Effect	59
	14.13.	Limitation on Benefits of this Agreement	59
	14.14.	Severability	59
	14.15.	Amendment Procedure	59
	14.16.	Entire Agreement	59
	14.17.	Headings	59
	14.18.	Governing Law	59
	14.19.	Execution in Counterparts	59
	14.20.	Consents and Approvals	60
	14.21.	Indemnification	60
	14.22.	Business Day Extension	61
	14.23.	Consent to Jurisdiction	61
	14.24.	No Presumption	61
	14.25.	Press Releases; Confidentiality	61
	14.26.	Cooperation of Administrative Member	62
	14.27.	Subsidiaries	62
	14.28.	Brokerage	62
	14.29.	Usury Savings	63
	 	 	 
	ARTICLE 15.	BUY-SELL	63
	 	 	 
	15.01.	Buy/Sell Arrangements	63

 

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EXHIBITS

 

	Exhibit A	Certificate of Formation
	Exhibit B	Initial Facilities
	Exhibit C-1	Organizational Structure Chart
	Exhibit C-2	Capital Contributions and Percentage Interests
	Exhibit D	Approved Business Plan and Budget – 2013 and 2014
	Exhibit E	Insurance
	Exhibit F-1	Asset Management Reporting Requirements
	Exhibit F-2	Standard Financial Reporting Package
	Exhibit G	Sources and Uses Statement
	Exhibit H	Form of Operating Lease
	Exhibit I	Intentionally Omitted
	Exhibit J	Intentionally Omitted
	Exhibit K	Form of Management Agreement
	Exhibit L	Intentionally Omitted
	Exhibit M	Approved Long Term Business Plan

 

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THIS LIMITED LIABILITY
COMPANY AGREEMENT (as the same may be amended, supplemented, restated or otherwise modified from time to time, this “Agreement”)
of WATERMARK AQUA OPERATOR, LLC, a Delaware limited liability company (the “Venture”), is entered into as of
December 27, 2013, by and between WATERMARK AQUA INVESTMENTS, LLC, a Delaware limited liability company (together with its permitted
successors and assigns in its capacity as a Member, the “TFG Member”), and AQUA OPERATIONS NT-HCI, LLC, a Delaware
limited liability company (together with its permitted successors and assigns in its capacity as a Member, the “NorthStar
Member”).

 

W I T N E S S E T H:

 

WHEREAS, the Venture was
formed pursuant to the provisions of the Limited Liability Company Act of the State of Delaware (as amended from time to time,
the “LLC Act”) by the filing of the Certificate of Formation of the Venture (as the same may be amended, supplemented
or modified from time to time in accordance with the provisions of this Agreement, the “Certificate”) with the
Delaware Secretary of State on November 7, 2013, a copy of which Certificate is attached hereto as Exhibit A;

 

WHEREAS, the Venture owns
100% of the limited liability company interest in each of the Lessees as shown on the organizational structure chart attached hereto
as Exhibit C-1; and

 

WHEREAS, the parties hereto
desire to operate the Venture as a limited liability company under the LLC Act and to set forth their respective rights and obligations
vis-à-vis the Venture.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the parties
hereto hereby set forth their agreement as follows:

 

ARTICLE 1.

DEFINITIONS

 

1.01.         Defined
Terms. Unless the context otherwise specifies or requires, capitalized terms used herein shall have the following respective
meanings:

 

“Additional Capital
Contributions” is defined in Section 5.02(a).

 

“Additional Capital
Contribution Date” is defined in Section 5.02(a).

 

“Additional Capital
Contribution Request” is defined in Section 5.02(a).

 

“Adjusted Capital
Account” is defined in Section 6.02.

 

“Adjusted Capital
Account Deficit” means, with respect to any Member, the deficit balance, if any, in the Member’s Capital Account,
as of a specified time, after giving effect to the following adjustments:

 

    	 

    	

    

 

(a)          credit
to such Capital Account any amounts that such Member is obligated to restore or deemed obligated to restore pursuant to Regulations
Section 1.704-1(b)(2)(ii)(c) and the penultimate sentences of Regulations Section 1.704-2(g)(1) and Regulations Section 1.704-2(i)(5);
and

 

(b)          debit
to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

The foregoing definition of Adjusted Capital
Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

 

“Administrative
Member” means whichever of the NorthStar Member or the TFG Member is the Member entitled to exercise the rights of the
Administrative Member under this Agreement. As of the date hereof, the TFG Member is the Administrative Member of the Venture.

 

“Affiliate”
means, when used with reference to a specified Person, (a) any member, partner, shareholder, director, officer or employee of such
Person, or (b) any Person that, directly or indirectly, Controls, is Controlled by or is under common Control with the specified
Person.

 

“Affiliate Agreement”
means any agreement or contract between the Venture or any Subsidiary, on the one hand, and either Member or any Affiliate of either
Member, on the other hand.

 

“Agreement”
is defined in the Preamble to this Agreement.

 

“Annual Report”
is defined in Section 8.04(a).

 

“Approved Business
Plan and Budget” is defined in Section 7.07(b)(i).

 

“Approved Long
Term Business Plan” means the long-term strategic business plan of the Venture and the Subsidiaries, including underlying
assumptions, attached hereto as Exhibit M, which has been proposed by the TFG Member and approved by NorthStar Member, as
the same may be modified and supplemented from time to time in accordance with the provisions of Section 7.07(e).

 

“Bank Account”
is defined in Section 8.03.

 

“Bankrupt”
means, and a Person shall be deemed “Bankrupt” upon: (i) the entry of a final, nonappealable decree or order
for relief of the Person by a court of competent jurisdiction in any involuntary case involving the Person under any bankruptcy,
insolvency or other similar law now or hereafter in effect; (ii) the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or other similar agent for the Person or for all or substantially all of the Person’s assets or property
which appointment is not discharged within 90 days; (iii) the ordering of the winding up or liquidation of the Person’s affairs;
(iv) the filing with respect to the Person of a petition in any such involuntary bankruptcy case, which petition remains undismissed
for a period of 90 days; (v) the commencement by the Person of a voluntary case under any

 

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bankruptcy, insolvency or other similar law
now or hereafter in effect; (vi) the consent by the Person to the entry of an order for relief in an involuntary case under any
such law or to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar agent for the Person or for all or substantially all of the Person’s assets or property; (vii) the making by
the Person of any general assignment for the benefit of creditors; or (viii) the admission in writing by the Person of its inability
to pay its debts as such debts become due.

 

“Book Value”
means, with respect to any Venture Asset, the asset’s adjusted basis for federal income tax purposes, except that, in accordance
with the rules set forth in Regulations Section 1.704-1(b)(iv):

 

(a)          the
initial Book Value of the assets of the Venture as of the date of their contribution (or deemed contribution) shall be their respective
gross fair market values at such time as determined by the NorthStar Member;

 

(b)          the
Book Value of any asset distributed or deemed distributed by the Venture to any Member shall be adjusted immediately prior to such
distribution to equal its gross fair market value at such time as determined by the NorthStar Member;

 

(c)          the
Book Values of all Venture assets may be adjusted to equal their respective gross fair market values, as determined by the NorthStar
Member, as of:

 

(i)          the
date of the acquisition of an additional Interest in the Venture by any new or existing Member in exchange for a contribution to
the capital of the Venture; or

 

(ii)         upon
any distribution in liquidation of the Venture, or the distribution by the Venture to a retiring or continuing Member of money
or other assets of the Venture in reduction of such Member’s Interest in the Venture.

 

(d)          the
Book Values of all Venture assets shall be adjusted to reflect any adjustments to the adjusted basis of any assets of the Venture
pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are required to be taken
into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); and

 

(e)          if
the Book Value of an asset has been determined pursuant to clause (a), (c) or (d) above, such Book Value shall
thereafter be adjusted for depreciation and amortization deductions based on the asset’s Book Value as so determined, and
not on the asset’s adjusted tax basis.

 

The foregoing definition of Book Value is intended
to comply with the provisions of Regulations Section 1.704-1(b)(2)(iv) and shall be interpreted and applied consistently therewith.

 

“Business Day”
means Monday through Friday of each week, except that a legal holiday recognized as such by the Government of the United States
and any other day on which banks in

 

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the State of New York (or to the extent related
to a specific Facility, the State in which such Facility is located) are required or permitted to be closed shall not be regarded
as a business day.

 

“Buy/Sell Closing”
is defined in Section 15.01(c).

 

“Buy/Sell Closing
Date” is defined in Section 15.01(c).

 

“Buy/Sell Deposit”
is defined in Section 15.01(b)(i).

 

“Buy/Sell Escrow
Agent” is defined in Section 15.01(b)(i).

 

“Buy/Sell Lockout
End Date” means (a) with respect to the NorthStar Member, the third (3rd) anniversary of the date hereof and (b) with
respect to the TFG Member, the fifth (5th) anniversary of the date hereof.

 

“Buy/Sell Offer
Notice” is defined in Section 15.01(a).

 

“Buy/Sell Price”
is defined in Section 15.01(a).

 

“Buy/Sell Transaction”
is defined in Section 15.01(b).

 

“Capital Account”
means, with respect to any Member, the capital account of such Member maintained pursuant to Section 6.01, including all
additions thereto and subtractions therefrom pursuant to this Agreement.

 

“Capital Contribution”
means any property (including cash) contributed (or deemed contributed) to the Venture by or on behalf of a Member.

 

“Capital Improvement”
means any renewal, replacement and improvement to any Facility which in accordance with GAAP must be capitalized.

 

“Certificate”
is defined in the Recitals to this Agreement.

 

“Charges”
means, for a given period of time, a sum equal to the aggregate of the expenditures, charges and costs of the Venture and its Subsidiaries
(but without duplication) for such period of time in accordance with the terms of this Agreement, determined on a cash basis of
accounting. Notwithstanding the foregoing, there shall be excluded from Charges: (a) all non-cash items such as depreciation; (b)
amounts distributed to the Members pursuant to this Agreement; (c) all costs, charges and expenses deducted from the proceeds of
a Major Capital Event to determine the Net Extraordinary Cash Flow; (d) any expense, cost or charge to the extent such expense,
cost or charge was paid from Reserves; and (e) any expenses, obligations or liabilities incurred by a Member (or its Affiliates)
in connection with the formation of the Venture and the entering into of this Agreement which are specifically stated to be those
of the such Member or its Affiliates (rather than the Venture) under this Agreement.

 

“Code”
means the Internal Revenue Code of 1986, as in effect and hereafter amended, and, unless the context otherwise requires, applicable
regulations thereunder. Any reference

 

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herein to a specific section or sections of
the Code shall be deemed to include a reference to any corresponding provision of future law.

 

“Competing Facility”
is defined in Section 7.09.

 

“Contract”
means any service, maintenance or other contract or agreement affecting the management, operation or use of any Facility.

 

“Confidential
Information” is defined in Section 14.25(b).

 

“Contributing
Member” is defined in Section 5.02(b).

 

“Control”,
“Controls” and “Controlled by” means the ability, directly or indirectly, whether through
the ownership of voting securities, by contract, or otherwise (including by being the general partner, officer or director of the
Person in question), to direct or cause the direction of the management and policies of a Person; provided, that solely
for the purpose of determining whether a particular contract constitutes an Affiliate Agreement, “Control” (as such
term is used in the definition of “Affiliate”) shall be deemed to include, with reference to a Person, the ownership,
directly or indirectly through one or more intermediaries, of 10% or more of the equity interests in such Person.

 

“Control and Ownership
Requirement” is defined in Section 9.01(b)(ii).

 

“CPI”
is defined in Section 7.07(b)(iii).

 

“CPI-Budget Year”
is defined in Section 7.07(b)(iii).

 

“Current Return
Reserve” is defined in Section 6.06(a).

 

“Default Rate”
means the lesser of (a) 18% per annum, compounded monthly, and (b) the maximum interest rate permitted by law.

 

“Defaulting Member”
is defined in Section 5.04.

 

“Development Manager”
means, with respect to each Facility, TFG Parent or an Affiliate thereof, or any Person that shall succeed such Person as the “development
manager” under a Development Services Agreement for such Facility in accordance with the terms of the Owner Venture Agreement.

 

“Development Services
Agreement” means a Development Services Agreement to be entered into between a subsidiary of the Owner Venture, as owner,
and Development Manager, as development manager, with respect to a Facility on such terms and conditions as may be reasonably approved
from time to time by the Members, as the same may be amended, supplemented, replaced or otherwise modified from time to time in
accordance with the terms of the Owner Venture Agreement.

 

“Disability”
means, with respect to any Person, any condition that will prevent or materially hinder such Person from discharging his duties
on behalf of the TFG Member for any

 

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period of forty-five (45) consecutive days
or a total of one hundred-twenty (120) days in any six (6) month period or is adjudicated mentally incompetent by a court.

 

“Distributions”
means distributions of Net Ordinary Cash Flows and Net Extraordinary Cash Flows to a Member pursuant to Section 6.05(a)
(other than clause (i) thereof), Section 6.05(b) (other than clause (i) thereof) or Section 11.03
(except to the extent that clause (i) of Section 6.05(b) is applicable with respect thereto).

 

“Draft Annual
Plan and Budget” is defined in Section 7.07(a).

 

“Due Care”
means to act in good faith and exercising the usual and customary standard of care, skill, prudence and diligence of an experienced
and prudent real estate professional in the conduct of a real estate joint venture enterprise of a like character and with similar
goals and objectives as the Venture, taking into account the expected risks and rewards of investing in real estate projects comparable
to the Facilities.

 

“Emergency Expense”
means an expense which is necessary to (a) prevent an immediate threat to the health, safety or welfare of any resident or other
person in the immediate vicinity of any Facility, (b) prevent immediate damage or loss to any Facility, (c) avoid the suspension
of essential services to, or essential licenses at, a Facility, or (d) avoid criminal or civil liability on the part of the Venture
or any Subsidiary with respect to activities at any Facility or pursuant to this Agreement.

 

“Event of Default”
means, with respect to a Member, the occurrence of any of the following events by or in respect of such Member:

 

(a)          fraud
by such Member, any Affiliate of such Member or, in the case of the TFG Member, the Key Principals, in each case related to or
in connection with this Agreement, the Venture, any Subsidiary or any Facility;

 

(b)          gross
negligence, willful misconduct, willful breach, misappropriation or misapplication of Venture or Subsidiary funds by such Member,
any Affiliate of such Member or, in the case of the TFG Member, the Key Principals, in each case related to or in connection with
this Agreement, the Venture, any Subsidiary or any Facility;

 

(c)          such
Member or, in the case of the TFG Member, any Key Principal, the Manager or the Development Manager (so long as such Person is
an Affiliate of the TFG Member), is convicted of any crime (whether or not a felony) involving fraud, theft, misappropriation of
funds, or moral turpitude and such crime is committed against or with respect to (i) the other Member, any Affiliate of the other
Member, the Venture, or any Subsidiary, the Owner Venture or any subsidiary thereof or (ii) any other Person;

 

(d)          such
Member or, in the case of the TFG Member, any Key Principal, becomes Bankrupt;

 

(e)          a
Transfer by, or with respect to, a Member’s direct or indirect LLC Interests in violation of Article 9;

 

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(f)          the
failure of the TFG Member to satisfy the Control and Ownership Requirement at any time;

 

(g)          the
failure of such Member to perform any of its material obligations under this Agreement or the breach by such Member of any of the
material terms, conditions, representations, warranties or covenants of this Agreement and a continuation of such failure or breach
for more than thirty (30) days after notice from the other Member; provided, that (i) if such failure or breach is of the
nature that it can be cured but cannot reasonably be cured within such thirty (30) day period, such period shall be extended so
long as the defaulting Member, in good faith, commences all reasonable curative efforts within five (5) Business Days of its receipt
of such notice and diligently and expeditiously continues its curative efforts to completion and (ii) it is agreed by the Members
that, notwithstanding that certain actions may be required by a date certain pursuant to another provision of this Agreement, such
actions shall be deemed susceptible of cure and shall be deemed to have been cured in the event that such action subsequently occurs
within the cure periods otherwise permitted in this clause (g), and neither the Company nor any Member is adversely affected in
any material respect as a result of such failure to take such action by the applicable date certain; or

 

(h)          an
“Event of Default” (as such term is defined in the Owner Venture Agreement) occurs under the Owner Venture Agreement.

 

For purposes of any of
the acts or events described in clause (a), (b) or (c) of this definition committed by an individual, such act or event shall not
constitute an “Event of Default” if (1) in the case of the TFG Member, such act or event is not the result of an action
or inaction by a Key Principal, (2) notice of such act or event shall have been delivered to the other Member promptly after the
senior management of such Member (which, with respect to the TFG Member, shall mean a Key Principal) learns of such act or event,
and (3) such individual’s employment with such Member and its Affiliates is terminated.

 

“Excess Promote
Distribution” is defined in Section 6.05(d).

 

“Exculpated Party”
is defined in Section 14.05.

 

“Facility”
and “Facilities” means the Initial Facilities and any other real property acquired by the Owner Venture or any
subsidiary thereof after the date hereof in accordance with the terms of the Owner Venture Agreement, or any one of them.

 

“Family Member”
means, with respect to any Person, (a) the spouse, former spouse, child, step-child, sibling, niece, nephew, parent, grandparent
or any lineal descendent (whether by blood or adoption) of such Person, or a parent, grandparent or any lineal descendent (whether
by blood or adoption) of such Person’s spouse, (b) any corporation, partnership or limited liability company all or substantially
all of the equity interests in which are owned by a person described in clause (a) above, or (c) a trust, custodial account or
guardianship administered primarily for the benefit of a person described in clause (a) above.

 

“Fiscal Year”
is defined in Section 8.02.

 

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“Forced Sale Deposit”
is defined in Section 10.01(c).

 

“Forced Sale Lockout
End Date” means (a) with respect to the NorthStar Member, the third (3rd) anniversary of the date hereof,
and (b) with respect to the TFG Member, the fifth (5th) anniversary of the date hereof.

 

“Forced Sale Price”
is defined in Section 10.01(a).

 

“GAAP”
means generally accepted accounting principles in the United States consistently applied.

 

“Harvard Facility”
is defined in on Exhibit B-1 to this Agreement.

 

“Harvard Lessee”
is defined on Exhibit B-1 to this Agreement.

 

“Indemnitee”
is defined in Section 14.21(a).

 

“Indemnity Laws”
is defined in Section 14.21(d).

 

“Independent Sales
Agent” is defined in Section 10.03(a).

 

“Initial Acceptance
Notice” is defined in Section 10.01(b).

 

“Initial Acceptance
Period” is defined in Section 10.01(b).

 

“Initial Capital
Contribution” is defined in Section 5.01.

 

“Initial Consultant”
is defined in Section 7.05(g).

 

“Initial Consultant
Meeting” is defined in Section 7.05(g).

 

“Initial Forced
Sale Deposit” is defined in Section 10.01(b).

 

“Initial Facility”
means each of the Harvard Facility, the Parkview Facility, and the Pinebrook Facility.

 

“Initiating Member”
is defined in Section 10.01(a).

 

“Interest”
means, as to any Member, all of the interest of that Member in the Venture, including, without limitation, such Member’s
(a) right to a distributive share of the income, gain, losses and deductions of the Venture in accordance with this Agreement,
and (b) right to a distributive share of Venture Assets.

 

“Interest Closing
Date” is defined in Section 10.02(a).

 

“Interest Purchase
Price” is defined in Section 10.01(d).

 

“IRR”
means, as to any Member, the actual internal rate of return on the Capital Contributions made to the Venture by such Member (including
the return of such Capital

 

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Contributions), compounded monthly, and calculated
using the “XIRR” spreadsheet function in Microsoft Excel (Version 2007 (SP2)), where values is an array of values with
such Capital Contributions being negative values and Distributions as positive values and the corresponding dates in the array
are the actual dates that such Capital Contributions are made and Distributions are made, and will be calculated with monthly compounding
using the following formula: =((1+XIRR)^(1/12)-1)*12.

 

“Key Principals”
means David Freshwater and David Barnes.

 

“Lesser Price
Offer” is defined in Section 10.03(b).

 

“Lender”
is defined in Section 12.02.

 

“Lessee”
each of the Harvard Lessee, the Parkview Lessee, the Parkview Lessee, and, if applicable, any other Subsidiary formed to enter
into an Operating Lease with respect to any other Facility.

 

“LLC Act”
is defined in the Recitals to this Agreement.

 

“Major Capital
Event” means any extraordinary transaction with respect to the Venture, any Subsidiary or any Facility which generates
cash receipts other than ordinary operating income, including, without limitation, sales of real or personal property (other than
sales of personal property in the ordinary course of business), sales of interests in a Subsidiary, financings, refinancings and
borrowings (whether secured or unsecured) by the Venture or a Subsidiary, condemnations (and conveyances in lieu thereof), recoveries
relating to damage to any Facility, receipts of insurance proceeds relating to damage to any Facility and receipts of “key-man”
insurance proceeds relating to any principal, officer and/or employee of the Venture or a Subsidiary.

 

“Major Decisions”
is defined in Section 7.02.

 

“Management Agreement”
means that certain Management Agreement to be entered into between each Subsidiary, as owner, and Manager, as manager, with respect
to each Facility in substantially for the form attached hereto as Exhibit K or such other form as may be approved from time
to time by the Members, as the same may be amended, supplemented, replaced or otherwise modified from time to time in accordance
with the terms hereof.

 

“Manager”
means, with respect to each Facility, Watermark Retirement Communities, Inc., an Arizona corporation, or any Person that shall
succeed such Person as the “manager” under a Management Agreement for such Facility in accordance with the terms hereof.

 

“Marketing Period”
is defined in Section 10.03(a).

 

“Member”
means, at any time, any Person admitted and remaining as a member of the Venture pursuant to the terms of this Agreement. As of
the date of this Agreement, the Members of the Venture are the NorthStar Member and the TFG Member.

 

“Monthly Report”
is defined in Section 8.04(c).

 

    	9

    	

    

 

“Net Extraordinary
Cash Flow” means the amount, if any, remaining after subtracting from cash receipts arising from a Major Capital Event
(a) all expenses of the Venture or a Subsidiary related to such Major Capital Event, (b) the debts and liabilities of the Venture
or a Subsidiary to the extent paid or satisfied in connection with such Major Capital Event, and (c) Reserves established
by the NorthStar Member in connection with such Major Capital Event (it being understood that the reduction or release of any such
Reserves, other than for payment of the items for which the applicable Reserve was established, shall be treated as Net Extraordinary
Cash Flow). Net Extraordinary Cash Flow shall be determined on the cash basis of accounting.

 

“Net Income”
and “Net Loss” means, respectively, for each taxable year or part thereof, the taxable income and taxable loss
of the Venture for such period as determined for U.S. federal income tax purposes (inclusive of items required to be separately
accounted for under Section 703(a) of the Code); provided, that for purposes of determining Net Income and Net Loss and
each item thereof (and not for income tax purposes) (a) there shall be taken into account any tax exempt income of the Venture,
(b) any expenditures of the Venture which are described in Section 705(a)(2)(B) of the Code or which are deemed to be described
in Section 705(a)(2)(B) of the Code pursuant to Regulations under Section 704(b) of the Code shall be treated as deductible
expenses, (c) if any Venture Asset has a Book Value which differs from its adjusted tax basis as determined for U.S. federal income
tax purposes, income, gain, loss and deduction with respect to such Venture Asset shall be computed based upon the Venture Asset’s
Book Value rather than its adjusted tax basis, (d) if the Book Value of any Venture Asset is adjusted pursuant to clauses (b)
or (c) of the definition thereof, the amount of such adjustment shall be taken into account as gain or loss for purposes
of computing Net Income and Net Loss. Items of income, gain, deductions, and loss allocated pursuant to Section 6.03, including
“nonrecourse deductions” and “partner nonrecourse deductions,” shall be excluded from the computation of
Net Income and Net Loss.

 

“Net Ordinary
Cash Flow” means, for any given period of time, the Receipts for such period less the Charges for such period. The amount
of any released Reserves that are not used to pay Charges shall be treated as “Receipts” in accordance with the definition
thereof, and the establishment and any additions or increases to Reserves shall be treated as “Charges” in accordance
with the definition thereof. Net Ordinary Cash Flow shall be determined on the cash basis of accounting.

 

“Non-Contributing
Member” is defined in Section 5.02(b).

 

“Non-Discretionary
Expenses” means payments made to third parties on account of: (a) mandatory payments of principal and interest required
under any loan documents evidencing debt of the Venture or any Subsidiaries; (b) Emergency Expenses; or (c) other non-discretionary
expenditures such as real estate taxes, insurance premiums, utility charges, and other third-party non-discretionary expenses of
a similar nature if the failure to pay the same would result in a default under a Loan, the suspension of any essential service
or license relating to a Facility or any other material and adverse effect on a Facility or the senior housing facility located
thereon.

 

“Non-Initiating
Member” is defined in Section 10.01(a).

 

“NorthStar Interest
Amount” is defined in Section 15.01(a).

 

    	10

    	

    

 

“NorthStar Member”
is defined in the Preamble to this Agreement.

 

“NorthStar Parent”
means NorthStar Healthcare Income Operating Partnership, LP, a Delaware limited partnership, together with its successors and assigns.

 

“NorthStar Parties”
is defined in the Section 12.02(a).

 

“OFAC Programs”
is defined in Section 13.01(a)(h).

 

“Offer Notice”
is defined in Section 7.09.

 

“Offeree Member”
is defined in Section 15.01(a).

 

“Offeror Member”
is defined in Section 15.01(a).

 

“Operating Lease”
is defined in Section 7.13.

 

“Outstanding Capital
Contributions” is defined in Section 5.02(d).

 

“Owner Venture”
means Watermark Aqua Owner, LLC, a Delaware limited liability company.

 

“Owner Venture
Agreement” means that certain Limited Liability Company Agreement of the Owner Venture, dated as of the date hereof,
as the same may be amended, supplemented, restated or otherwise modified from time to time.

 

“Parkview Lessee”
is defined on Exhibit B-1 to this Agreement.

 

“Parkview Facility”
is defined on Exhibit B-1 to this Agreement.

 

“Percentage Interest”
means, with respect to any Member, initially, the Percentage Interest of such Member as set forth on Exhibit C-2 attached
hereto, as such amount may be adjusted from time to time pursuant to Section 5.02(b). No adjustment shall be made in Percentage
Interests on account of any distributions notwithstanding that the same may reduce or constitute a full or partial return of such
Member’s Outstanding Capital Contribution.

 

“Permanent Major
Decisions” is defined in Section 7.03.

 

“Permitted NorthStar
Member Affiliate” is defined in Section 9.01(b)(i).

 

“Person”
means any individual, corporation, association, partnership, limited liability company, joint venture, trust, estate or other entity
or organization.

 

“Pledge”
is defined in Section 9.01(a).

 

“Pinebrook Lessee”
is defined on Exhibit B-1 to this Agreement.

 

“Pinebrook Facility”
is defined on Exhibit B-1 to this Agreement.

 

    	11

    	

    

 

“Preferred Return”
means, with respect to each Member, a rate of return of twelve percent (12.0%) per annum, compounded monthly, on the aggregate
amount of such Member’s Outstanding Capital Contributions of such Member from time to time. In determining the Preferred
Return, the following shall apply: (a) all Distribution amounts shall be based on the amount of the Distribution prior to the application
of any federal, state or local taxation to Members (including any withholding or deduction requirements); (b) all Capital Contributions
shall be treated as having been contributed to the Venture on the last day of the month on which a Member’s funds (or funds
advanced on behalf of such Member) were actually delivered to the Venture; (c) all Distributions shall be treated as having been
received by the applicable Member on the last day of the month on which such Member actually receives such Distribution; and (d)
the Preferred Return shall be computed on the basis of a 360-day year for twelve (12) thirty (30) day months or, in the case of
any partial calendar month, the actual number of days in such partial month.

 

“Priority Contribution”
is defined in Section 5.02(b).

 

“Promote Distribution
Provisions” is defined in Section 6.05(b).

 

“Promote Loss
Event” means the occurrence of an Event of Default with respect to the TFG Member pursuant to one or more of clauses
(a), (b)(but in the case of clause (b), other than if resulting solely from gross negligence), (c)(i), (f) (but, in the
case of clause (f), other than as a result of the death or Disability of the Key Principals), and (h) (but, in the case of clause
(h), only if such Event of Default constitutes a Promote Loss Event (as defined in the Owner Venture Agreement) under the Owner
Venture Agreement).

 

“Purchase”
is defined in Section 10.01(b).

 

“Purchasing Buy/Sell
Member” is defined in Section 15.01(c).

 

“Quarterly Report”
is defined in Section 8.04(b).

 

“Receipts”
means, for any given period of time, a sum equal to the aggregate of all amounts actually received by the Venture or a Subsidiary
from or in respect of any Facility or other Venture Asset during such period (without duplication), determined on a cash basis
of accounting, including, without limitation: (a) all rents, expense reimbursements, termination fees and other charges received
from tenants and other occupants of the Facilities; (b) proceeds of rent insurance and business interruption insurance; (c) all
utility or other deposits returned to the Venture or a Subsidiary, which deposits were made on or after the date hereof; (d) interest,
if any, earned on tenants’ security deposits or escrows to the extent unconditionally retained and security deposits to the
extent applied pursuant to the provisions of the applicable leases; (e) interest, if any, earned and available to the Venture or
to a Subsidiary on Reserves or other Venture funds, or on any escrow funds deposited by the Venture or a Subsidiary with others
or on any loans made by the Venture or a Subsidiary; (f) the amount of any released Reserves that are not used to pay Charges (other
than Reserves established by the NorthStar Member in connection with a Major Capital Event the release of which shall constitute
“Net Extraordinary Cash Flow” as provided in the definition thereof); and (g) cash or other receipts (other than receipts
from a Major Capital Event) received by the Venture or a Subsidiary from any other

 

    	12

    	

    

 

source. Notwithstanding the foregoing, Receipts
shall not include (i) amounts contributed or loaned by the Members to the Venture or a Subsidiary pursuant to this Agreement, (ii)
each tenant’s security deposit and interest thereon, if any, as long as the Venture or a Subsidiary has a contingent legal
obligation to return that deposit or such interest thereon, (iii) amounts which, although held by the Venture, may not be distributed
to the Venture or a Subsidiary, or by the Venture to its Members or by a Subsidiary under applicable law or pursuant to the terms
of an agreement with a third party, or (iv) amounts arising from a Major Capital Event.

 

“Regulations”
means the regulations issued by the United States Department of the Treasury under the Code as now in effect and as they may be
amended from time to time, and any successor regulations.

 

“Regulatory Allocations”
is defined in Section 6.03(d).

 

“REIT”
is defined in Section 7.12(a).

 

“Removal Date”
is defined in Section 7.05.

 

“Removal Event”
means (a) the occurrence of any Event of Default with respect to the TFG Member, (b) if the Percentage Interest of the TFG Member
is (or would be if all Priority Contributions made by the NorthStar Member were treated as Additional Capital Contributions by
the NorthStar Member and the Percentage Interests of the Members were adjusted as set forth in Section 5.02(c)(ii)(A)) less
than fifty percent (50%) of the TFG Member’s Percentage Interest on the date hereof by reason of the TFG Member’s failure
to make Additional Capital Contributions as required herein, (c) a breach or failure to comply by the TFG Member with any of its
obligations or requirements under Section 7.12 or (d) the occurrence of a “Removal Event” under (and as defined
in) the Owner Venture Agreement.

 

“Reserves”
means (a) reserve funds to pay Charges as set forth in the Approved Business Plan and Budget or as otherwise established by the
NorthStar Member and (b) any other reserve funds established by the NorthStar Member in connection with a Major Capital Event or
upon dissolution and liquidation of the Venture.

 

“Restricted Member”
is defined in Section 6.03(c).

 

“Sale Notice”
is defined in Section 10.01(a).

 

“Independent Sales
Agent” is defined in Section 10.03(a).

 

“Second Acceptance
Notice” is defined in Section 10.01(b).

 

“Second Acceptance
Period” is defined in Section 10.01(b).

 

“Second Buy/Sell
Acceptance Period” is defined in Section 15.01(b)(ii).

 

“Second Buy/Sell
Response Notice” is defined in Section 15.01(b)(ii).

 

“Second Forced
Sale Deposit” is defined in Section 10.01(b).

 

    	13

    	

    

“Selling Buy/Sell
Member” is defined in Section 15.01(c)(i).

 

“Shortfall Amount”
is defined in Section 5.02(b).

 

“Subsidiary”
means any direct or indirect wholly owned subsidiary of the Venture, including, without limitation, each Lessee.

 

“Taxes”
means all sales, payroll, real estate, personal property, occupancy and other excise, property, privilege or other taxes and assessments
imposed upon a Facility, a Subsidiary or the Venture (but excluding any Member’s income or franchise taxes).

 

“Third Consultant”
is defined in Section 7.05(g).

 

“TFG Buy/Sell
Trigger Event” means the failure of the Members to agree on a Major Decision (other than a Major Decision pursuant to
Section 7.02(f) or Section 7.02(i)), which failure has continued for not less than thirty (30) days after one Member
notifies the other Member of such disagreement and is reasonably likely to have a material adverse effect on the Venture or any
of its Subsidiaries, any Member or any Facility.

 

“TFG Exit Date”
is defined in Section 7.05(f).

 

“TFG Interest
Amount” is defined in Section 15.01(a).

 

“TFG Member”
is defined in the Preamble to this Agreement.

 

“TFG Parent”
means The Freshwater Group, Inc., an Arizona corporation.

 

“TFG Parties”
is defined in the Section 12.02(a).

 

“TFG Recourse
Party” means (a) David Freshwater, an individual, (b) The Diana and David Freshwater Living Trust U/D/T dated January
20, 2004, (c) David Barnes, an individual, and (d) The Barnes Family Revocable Trust U/D/T dated November 15, 2007, collectively
and jointly and severally.

 

“Transfer”
is defined in Section 9.01(a).

 

“Transfer Date”
is defined in Section 12.03.

 

“Upper Tier Transfer”
is defined in Section 9.01(a).

 

“Valid Contract”
means a contract for the sale of any Facility or Facilities that (a) provides for a then customary market-standard deposit
to be paid simultaneously with the execution of such contract, (b) contains no financing contingencies, (c) provides for no
recourse to the assets of the NorthStar Member or the TFG Member or the Venture, other than the Venture’s interest in the
applicable Facility or Facilities (but which may provide for recourse (i) to a customary, market-rate holdback or (ii) to the Venture
for customary surviving indemnification obligations, subject to customary survival periods and customary maximum liability amounts),
(d) shall provide for all cash payments of the purchase price for the applicable

 

    	14

    	

    

 

Facility or Facilities, and (e) is otherwise on customary
and commercially reasonable terms (including closing to occur within ninety (90) days of the date thereof, subject to customary
extension rights). For the avoidance of doubt, a Valid Contract hereunder shall include, in addition to the interest of the Venture
or applicable Subsidiary(ies) in the applicable Facility(ies), the interest of the Owner Venture or its applicable subsidiary(ies)
in the applicable Property(ies) and shall comply with the applicable requirements set forth in the Owner Venture Agreement relating
thereto.

 

“Venture”
is defined in the Preamble to this Agreement.

 

“Venture Accountants”
means Grant Thornton LLP, or such other nationally recognized firm of independent certified public accountants selected by the
NorthStar Member.

 

“Venture Assets”
means all assets and property, whether tangible or intangible and whether real, personal or mixed including, but not limited to
the Facilities, at any time owned by or held for the benefit of the Venture. The Venture Assets shall include all assets of Lessees
or any other Subsidiary.

 

“Venture Attorneys”
means (a) Cox, Castle & Nicholson LLP, (b) Fried, Frank, Harris, Shriver & Jacobson LLP or (c) such other law firm or law
firms selected by the NorthStar Member to provide legal services to the Venture or any Subsidiary.

 

1.02.         Interpretation.
Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender; (b) words using
the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof”, “herein”,
“hereby” and derivative or similar words refer to this Agreement; (d) the term “Section” or “Article”
refers to the specified Section or Article of this Agreement; and (e) the word “or” is not exclusive, and the phrases
“include” and “including” shall mean “include, without limitation”, and “including, without
limitation”.

 

ARTICLE 2.

FILING; NAME; PLACE OF BUSINESS

 

2.01.         Filing.
The Members shall execute and acknowledge, and the Administrative Member shall promptly file or record with the proper offices
in each jurisdiction and political subdivision in which the Venture does business and, if necessary or desirable, cause to be published,
such certificates or amended certificates, if any, as are required or permitted by the LLC Act, or any fictitious name act, or
act relating to qualification to do business, or similar statute or any rule or regulation in effect in such jurisdiction or political
subdivision. The Members shall further execute and acknowledge and the Administrative Member shall promptly file or record such
amended certificates or additional certificates or instruments of whatever nature as may from time to time be called for or required
by such statutes, rules or regulations to permit the continued existence and operation of the Venture.

 

2.02.         Name
of Venture. The name under which the Venture shall conduct its business is Watermark Aqua Operator, LLC or such other name
as the Members may jointly select.

 

    	15

    	

    

 

2.03.         Place
of Business. The location of the principal place of business of the Venture shall be c/o The Freshwater Group, Inc., 2020 West
Rudasill Road, Tucson, Arizona 85704. The principal place of business of the Venture shall be changed to such other place or places
within the continental United States as the Administrative Member may from time to time determine with the consent of the NorthStar
Member; provided, that if necessary, the Members shall amend the Certificate in accordance with the applicable requirements
of the LLC Act. The Administrative Member may establish and maintain such other offices and additional places of business of the
Venture as the NorthStar Member shall approve.

 

2.04.         Registered
Office and Registered Agent. The street address of the initial registered office of the Venture shall be The Corporation Trust
Company, Corporation Trust Center and the Venture’s registered agent at such address shall be 1209 Orange Street, Wilmington,
DE 19801. The Administrative Member may hereafter change the registered agent and registered office and, if necessary, the Members
shall amend the Certificate in accordance with the applicable requirements of the LLC Act to reflect such change.

 

ARTICLE 3.

PURPOSES AND POWERS OF THE VENTURE

 

3.01.         Purposes.
The purposes of the Venture shall be to own, hold, finance, manage, operate, sell and otherwise dispose or deal with and exercise
any rights it may have with respect to any of the Subsidiaries, which Subsidiaries will undertake to: (a) lease, manage, operate
and sell and otherwise dispose of or deal with and exercise any rights it may have with respect to the operation of a senior living
facility at the Facilities or any of them; (b) incur indebtedness (whether secured, directly or indirectly, by one or more of the
Facilities or any portion thereof or interest therein, or unsecured) and otherwise in connection with the Venture’s and the
Subsidiaries’ activities, as permitted hereunder; and (c) do all other things reasonably incident thereto, in accordance
with the terms of this Agreement.

 

3.02.         Powers.
The Venture shall have the power to do any and all acts and things necessary, appropriate, advisable or convenient for the furtherance
and accomplishment of the purposes of the Venture, including, without limitation, to engage in any kind of activity and to enter
into and perform obligations of any kind necessary to, or in connection with, or incidental to, the accomplishment of the purposes
of the Venture, so long as said activities and obligations may be lawfully engaged in or performed by a limited liability company
under the LLC Act.

 

ARTICLE 4.

TERM OF VENTURE

 

The existence of the Venture
commenced on the date upon which the Certificate was duly filed with the office of the Secretary of State of the State of Delaware
and shall continue until terminated in accordance with the provisions of Article 11.

 

ARTICLE 5.

CAPITAL CONTRIBUTIONS; CLOSING UNDER THE PURCHASE AGREEMENTS

 

5.01.         Initial
Capital Contributions. As of the date hereof, each Member has made a Capital Contribution in the amount specified on Exhibit
C-2 hereto as such Member’s initial

 

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Capital Contribution to the Venture (such Capital
Contribution being referred to in this Agreement as such Member’s “Initial Capital Contribution”).

 

5.02.       Additional
Capital Contributions. (a) If at any time, and from time to time, the Administrative Member or the NorthStar Member determines
that additional funds in excess of the Initial Capital Contributions, Receipts and available Reserves are necessary to meet the
needs or obligations of the Venture or any of its Subsidiaries, but solely to the extent of costs and expenses that are (i) needed
to fund Non-Discretionary Expenses, (ii) incurred in accordance with the Approved Business Plan and Budget (including Management
Fees payable to the Manager pursuant to any Management Agreement) or, subject to the terms of this Agreement (including Sections
7.02 and 7.07(e)), the Approved Long Term Business Plan, or (iii) that are reasonably determined by the NorthStar Member to be
necessary to maintain each of the Facilities as a high quality senior housing community and maximize the value of each of the Facilities;
provided, that the NorthStar Member shall not be permitted, without the consent of the TFG Member as a Major Decision pursuant
to Section 7.02(l), to make aggregate Additional Capital Contribution Requests pursuant to this clause (iii) (together with
any Additional Capital Contribution Requests (as defined in the Owner Venture Agreement) made pursuant to clause (iii) of Section
5.02(b) of the Owner Venture Agreement) in an amount in excess of $2,500,000 in any Fiscal Year or $5,000,000 in any period of
three (3) consecutive Fiscal Years; and determines to call for additional Capital Contributions to fund the same (“Additional
Capital Contributions”), the Administrative Member or the NorthStar Member, as applicable, shall deliver to each Member
a written notice (an “Additional Capital Contribution Request”) of the need for Additional Capital Contributions
(which may be made by email but requires confirmation by the receiving party of receipt of such email). Additional Capital Contributions
shall be funded by the Members on a pro rata basis in proportion to their respective Percentage Interests. Each Additional
Capital Contribution Request shall specify the aggregate amount of Additional Capital Contributions that the Administrative Member
or NorthStar Member, as applicable, has determined are required to be made by the Members pursuant to this Section 5.02(a)
and each Member’s pro rata share thereof and the date on which such determining Member has determined such Additional
Capital Contributions shall be required to be made by the Members (the “Additional Capital Contribution Date”),
which date shall not be earlier than fifteen (15) Business Days from the date that the Additional Capital Contribution Request
in question is given. Each Member shall contribute, on or before the Additional Capital Contribution Date, such Member’s
pro rata share of the aggregate Additional Capital Contributions specified in such Additional Capital Contribution Request.

 

(a)          If
at any time or times either Member shall fail to timely make any Additional Capital Contribution which such Member is obligated
to make under this Section 5.02 (such Member being referred to herein as a “Non-Contributing Member”),
and such failure shall continue for a period of ten (10) Business Days after notice of such failure from the other Member (such
Member that has timely contributed its pro rata share of the Additional Capital Contribution in question being referred
to herein as a “Contributing Member”), the rights and remedies set forth below in this Section 5.02(b)
shall apply, all of which shall be cumulative and non-exclusive with respect to each other; provided, that such rights and
remedies in the aggregate shall constitute the Contributing Member’s sole and exclusive remedies with respect the Non-Contributing
Member’s failure to make such Additional Capital Contribution. A Contributing Member shall give notice of any such election
or elections under this

 

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Section 5.02(b) to the Non-Contributing
Member within sixty (60) days after the applicable Additional Capital Contribution Date.

 

(i)          The
Contributing Member may require the Venture to return the Additional Capital Contribution in question made by the Contributing
Member.

 

(ii)         Except
to the extent the Contributing Member requires the Venture to return the Additional Capital Contribution in question made by the
Contributing Member pursuant to clause (i) above, the Contributing Member may (but shall not be obligated to) advance all or any
portion of the Additional Capital Contribution which the Non-Contributing Member has failed to make (the amount so advanced, the
“Shortfall Amount”) and elect to treat the Shortfall Amount as either (A) an additional Capital Contribution
made by the Contributing Member, in which case (I) the Percentage Interest of the Non-Contributing Member shall be decreased by
an amount equal to the percentage determined by dividing (x) the Shortfall Amount multiplied by 150% by (y) the total Capital Contributions
made by all the Members to the Venture on or prior to such date (provided, that the Non-Contributing Member’s Percentage
Interest shall not be reduced below zero) and (II) the Percentage Interest of the Contributing Member shall be increased by the
percentage determined under clause (I) or (B) an additional contribution from the Contributing Member to the Venture (which shall
not be treated as a Capital Contribution) (any such additional contribution being referred to hereinafter as a “Priority
Contribution”).

 

(iii)        Except
to the extent the Contributing Member requires the Venture to return the Additional Capital Contribution in question made by the
Contributing Member pursuant to clause (i) above, the Contributing Member may elect to treat the Additional Capital Contribution
in question made by the Contributing Member as either (A) an additional Capital Contribution made by the Contributing Member, in
which case (I) the Percentage Interest of the Non-Contributing Member shall be decreased by an amount equal to the percentage determined
by dividing (x) the amount of the Additional Capital Contribution in question made by the Contributing Member pursuant to the applicable
Additional Capital Contribution Request multiplied by 150% by (y) the total Capital Contributions made by all the Members to the
Venture on or prior to such date (provided, that the Non-Contributing Member’s Percentage Interest shall not be reduced
below zero) and (II) the Percentage Interest of the Contributing Member shall be increased by the percentage determined under clause
(I) or (B) a Priority Contribution from the Contributing Member to the Venture (provided, that the Contributing Member must
elect to treat the Shortfall Amount under Section 5(b)(ii) and the contributed amount under this Section 5(b)(iii)
identically (in other words, either both must reduce the Non-Contribution Member’s Percentage Interest or both must be deemed
to be Priority Contributions)).

 

(iv)        Priority
Contributions shall accrue a return from the date contributed until the date returned at the Default Rate. Priority Contributions,
and return accrued thereon, shall be repaid to the applicable Contributing Member out of Net Ordinary Cash Flow and Net Extraordinary
Cash Flow pursuant to and subject to the priorities set forth in Section 6.05 and Section 11.03.

 

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(b)          Upon
the making (or deemed making) of any Capital Contributions after the date hereof, the Administrative Member shall, at the direction
of the NorthStar Member, update Exhibit C-2 to reflect such Capital Contributions (and the recomputed Percentage Interests
of the Members, if applicable) and shall deliver notice and a copy thereof to each Member. Except as set forth in Section 5.01,
this Section 5.02, Section 5.03 and Section 6.06, no Member shall be required or permitted to make
any Capital Contribution or other payment to the Venture in excess of such Member’s Initial Capital Contributions made on
the date hereof.

 

(c)          The
outstanding amount of each of the Member’s Capital Contributions to the Venture (i) shall be increased to reflect any
additional Capital Contributions made (or deemed made) by such Member pursuant to Section 5.02, and (ii) shall be decreased
(but not below zero) to reflect any Distributions of Net Extraordinary Cash Flow made to such Member pursuant to the provisions
of Section 6.05(b)(ii) that constitutes a return of capital (and not a return on capital, it being agreed that Distributions
pursuant to Section 6.05(b)(ii) shall be deemed first to be a return on capital and then to be a return of capital); provided,
that if at any time any Distributions are made to such Member pursuant to Section 6.05(b)(iii), 6.05(b)(iv),
6.05(b)(v) or 6.05(b)(vi), such Member’s Outstanding Capital Contributions shall be reduced to zero (but may
be subsequently increased pursuant to clause (i) of this Section 5.02(d)). The outstanding amount of each Member’s
Capital Contributions to the Venture calculated in accordance with the provisions of this Section 5.02(d) is referred
to herein as such Member’s “Outstanding Capital Contributions”.

 

5.03.         Intentionally
Omitted.

 

5.04.         Intentionally
Omitted.

 

5.05.         Liability
of Members. Except as otherwise provided in the LLC Act or this Agreement, the debts, obligations and liabilities of the Venture,
whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Venture, and no Member
or Affiliate of any Member shall be obligated personally for any such debt, obligation or liability of the Venture (including any
Priority Contribution) solely by reason of being a Member or Affiliate of a Member. The failure of the Venture to observe any formalities
or requirements relating to the exercise of its powers or management of its business or affairs under the LLC Act or this Agreement
shall not be grounds for imposing personal liability on the Members or their respective Affiliates for liabilities of the Venture.

 

5.06.         Return
of Capital. Except as may be specifically provided in this Agreement, no Member shall have the right to demand or to receive
the return of all or any part of its Capital Account or its Capital Contributions or Priority Contributions to the Venture, and
no time has been agreed upon for (and neither the Venture, any Member, nor any Affiliate of any Member is guaranteeing) the return
of any Member’s Capital Contributions or any return thereon or the repayment of any Priority Contribution. No Member or any
direct or indirect member, partner, shareholder or other constituent owner of any Member, and no other Person, shall have any personal
liability with respect to the return of any Member’s Capital Contributions or any return thereon or the repayment of any
Priority Contribution.

 

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5.07.       Sole
Benefit. It is expressly acknowledged and agreed that the provisions of this Agreement relating to the rights and obligations
of the Members to make any Capital Contributions or to make any Priority Contributions to the Venture are for the sole benefit
of the Venture and the Members, and may not be exercised on behalf of the Members or invoked or enforced for any other purpose
by any other Person, including without limitation, by any lender or any trustee in a bankruptcy proceeding. In addition, no third
party or any creditor of the Venture, shall have any right to require the either Member to cause a Capital Contribution Request
to be delivered to the Members or to enforce the obligations of the Members to make any Capital Contribution, loan or other advance
to the Venture.

 

ARTICLE 6.

ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS

 

6.01.      Capital
Accounts. (a) Each Member shall have a Capital Account which shall be maintained in accordance with Regulations Section 1.704-1(b)(2)(iv).

 

(a)          The
Capital Account of each Member shall be increased (i) by the amount of cash and the fair market value of any other property (including
cash used to fund Pre-Effective Date Costs, but net of any liability secured by such property that the Venture is considered to
assume, or take subject to, under Section 752 of the Code) contributed by such Member to the Venture and (ii) by any Net Income
allocated to such Member pursuant to Section 6.02 and any item in the nature of income or gain specially allocated to such
Member pursuant to Section 6.03.

 

(b)          The
Capital Account of each Member shall be reduced by (i) the amount of cash and the fair market value of any property (net of any
liability secured by such property that the Member is considered to assume or take subject to, under Section 752 of the Code) distributed
to such Member and (ii) by any Net Loss allocated to such Member pursuant to Section 6.02 and any item in the nature of
loss or expense specially allocated to such Member pursuant to Section 6.03.

 

(c)          In
the event that all or a portion of an Interest is transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest.

 

(d)          The
Capital Account of each Member shall be adjusted to reflect any adjustment to the Book Value of Venture Assets attributable to
the application of Section 734 or Section 743 of the Code to the extent required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m).

 

(e)          Except
as otherwise provided in this Agreement, whenever it is necessary to determine the Capital Account of any Member, the Capital Account
of such Member shall be determined after giving effect to the allocations of Net Income, Net Loss and other items realized prior
or concurrently to such time (including, without limitation, any Net Income and Net Losses attributable to adjustments to Book
Values with respect to any concurrent distribution), and all contributions and distributions made prior or concurrently to the
time as of which such determination is to be made.

 

(f)          Except
as expressly required herein, no Member shall be required to restore any negative balance in its Capital Account. No allocation
to any Member of any loss or deduction,

 

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whether attributable to depreciation or otherwise,
shall create any obligation of that Member to the Venture or any other Member, even if the allocation reduces such Member’s
Capital Account or creates or increases a deficit in its Capital Account. No Member shall be obligated to pay any deficit in its
Capital Account to or for the account of the Venture or any creditor of the Venture.

 

6.02.       Income
Allocations. After the application of Section 6.03, Net Income and Net Loss for any taxable year, or portion thereof,
shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after making such allocation,
and after taking into account actual distributions made during such taxable year, or portion thereof, is, as nearly as possible,
equal (proportionately) to (i) the distributions that would be made to such Member pursuant to Section 11.03 (taking into
account Section 6.05) if the Venture were dissolved, its affairs wound up and its assets sold for cash equal to their adjusted
tax basis (or adjusted Book Value if applicable), all Venture liabilities were satisfied (limited with respect to each nonrecourse
liability to the adjusted tax basis (or adjusted Book Value if applicable) of the assets securing such liability) and the net assets
of the Venture were distributed in accordance with Section 11.03 to the Members immediately after making such allocation,
minus (ii) such Member’s share of partnership minimum gain and partner nonrecourse debt minimum gain determined pursuant
to Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), computed immediately prior to the hypothetical sale of assets;
provided, that in applying this Section 6.02 to allocations of Net Income or Net Loss to account specifically (and
solely) for the adjustment in the Members’ respective Percentage Interests as a result of the application of Section 5.02(b)(iii)(A)
(i.e., the amount of Net Income (which shall be a negative adjustment to what would otherwise be the relevant Member’s target
amount determined under clause (i) above) and Net Loss (which shall be a positive adjustment to what would otherwise be
the other Member’s target amount determined under clause (i) above) that would need to be allocated on the date of
such adjustment in the Members’ respective Percentage Interests to cause the Members’ respective Capital Accounts to
equal the target amounts determined under clauses (i) and (ii) above as of the date of such adjustment without
giving effect to this proviso), such allocations will be made, to the extent permitted under the Code and applicable Treasury Regulations
(as determined by the NorthStar Member), in the taxable year(s) in which the next succeeding Major Capital Event(s) occurs, and
in such year(s) such allocation may include items comprising Net Income or Net Loss (including items of gross income). Subject
to the other provisions of this Article 6, an allocation to a Member of a share of Net Income or Net Loss shall be treated
as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.

 

6.03.       Special
Allocations. (a) Notwithstanding any other provision of this Agreement, “partner nonrecourse deductions” (as defined
in Regulations Section 1.704-2(i)), if any, of the Venture shall be allocated to the Member who bears the economic risk of loss
with respect to the debt to which such deductions are attributable in accordance with Regulations Sections 1.704-2(i), and “nonrecourse
deductions” (as defined in Regulations Section 1.704-2(b)(1)) of the Venture shall be allocated to the Members in accordance
with their respective Percentage Interests.

 

(a)          This
Agreement shall be deemed to include “qualified income offset,” “minimum gain chargeback” and “partner
nonrecourse debt minimum gain chargeback” provisions within the meaning of the Regulations under Section 704(b) of the Code.
Accordingly, notwithstanding

 

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any other provision of this Agreement, items of income,
gain, loss, and deduction shall be allocated to the Members to the extent and in the manner required by such provisions. 

(b)          To
the extent that any loss or deduction otherwise allocable to a Member (the “Restricted Member”) hereunder would
cause such Member to have Adjusted Capital Account Deficit as of the end of the taxable period to which such loss or deduction
relates (after taking into account the allocation of all items of income and gain for such taxable period), such loss or deduction
shall not be allocated to such Member and instead shall be allocated to the Members in accordance with Section 6.02 as if
the Restricted Member were not a Member.

 

(c)          Any
allocations required to be made pursuant to Section 6.03(a), Section 6.03(b) and Section 6.03(c) (the
“Regulatory Allocations”) shall be taken into account, to the extent permitted by the Regulations, in computing
subsequent and concurrent allocations of income, gain, loss or deduction pursuant to Section 6.02 so that the net amount
of any items so allocated and all other items allocated to such Member shall, to the extent possible, be equal to the amount that
would have been allocated to each Member pursuant to Section 6.02 had such Regulatory Allocations under this Section
6.03 not occurred.

 

(d)          It
is intended that prior to a distribution of the proceeds from a liquidation of the Venture pursuant to the provisions of Section
11.03, the positive Capital Account balance of each Member shall be equal to the amount of liquidation proceeds that such Member
is entitled to receive in accordance with the provisions of Section 11.03. Accordingly, notwithstanding anything to the
contrary in this Article 6, to the extent necessary and permissible or required under Section 704(b) of the Code and the Regulations
promulgated thereunder, items of gross income and gross deductions, of the Venture for the year of liquidation of the Venture shall
be allocated among the Members so as to bring the positive Capital Account balance of each Member as close as possible to the amount
that such Member is entitled to receive in connection with such liquidation in accordance with the provisions of Section 11.03.

 

(e)          The
Members intend for the allocation provisions contained in this Agreement to comply with Section 704(b) of the Code and the Regulations
promulgated thereunder, and the allocation provisions herein shall be interpreted and applied in a manner consistent therewith.

 

6.04.       Tax
Allocations; Allocation of Income and Loss. (a) For federal income tax purposes, except as otherwise provided in Section
6.04(b), each item of income, gain, loss and deduction shall be allocated among the Members in the same manner as its corresponding
item of book income, gain, loss or deduction is allocated pursuant to this Article 6.

 

(a)          In
accordance with Sections 704(b) and 704(c) of the Code and the Regulations thereunder, income, gain, loss and deduction with respect
to any Venture Asset contributed (or deemed contributed) to the capital of the Venture shall, solely for federal income tax purposes,
be allocated among the Members so as to take into account any variation between the adjusted basis of such Venture Asset for federal
income tax purposes and its Book Value upon its contribution (or deemed contribution). If the Book Value of any Venture Asset is
adjusted, subsequent allocations of taxable income, gain, loss and deduction with respect to such Venture Asset shall take account
of any variation between the adjusted basis of such Venture Asset for federal income tax purposes and the Book Value of such Venture
Asset in the manner prescribed

 

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under Sections 704(b) and 704(c) of the Code and the Regulations
thereunder. Any elections or decisions relating to such allocations shall be made by the NorthStar Member in accordance with the
provisions of Section 8.06. Allocations pursuant to this Section 6.04(b) are solely for tax purposes and shall not
affect any Member’s Capital Account.

 

(b)          If
any Member acquires an Interest, redeems all or a portion of its Interest or transfers an Interest during any taxable year in accordance
with this Agreement, the Net Income or Net Loss (and other items referred to in Section 6.03) attributable to such Interest
for such taxable year shall be allocated between the transferor and the transferee by closing the books of the Venture as of the
date of the transfer, or by any other method permitted under Section 706 of the Code and the Regulations thereunder and agreed
to by the Members, including the transferor and the transferee.

 

6.05.       Distributions
of Net Ordinary Cash Flow and Net Extraordinary Cash Flow. (a) Distributions of Net Ordinary Cash Flow. The Administrative
Member shall calculate Net Ordinary Cash Flow (which calculation shall be subject to the review and confirmation of the NorthStar
Member) as of the end of each calendar month on a cumulative calendar year-to-date basis and apply and distribute Net Ordinary
Cash Flow 7.02on or before the 15th day of the following calendar month in the following order of priority:

 

(i)          First,
an amount of Net Ordinary Cash Flow equal to all outstanding Priority Contributions, together with all accrued return thereon,
shall be paid to the Contributing Members that have made Priority Contributions (payments made in respect of Priority Contributions
shall be applied in reverse order in time to which they are made (i.e., distribution made in respect of Priority Contributions
shall be applied first to the Priority Contribution made last in time and last to the Priority Contribution made first in time);

 

(ii)         Second,
for Net Ordinary Cash Flow generated during the period commencing on the date hereof and ending on January 31, 2016, to the NorthStar
Member until such time as the NorthStar Member has received aggregate Distributions equal to the NorthStar Member’s accrued
and unpaid Preferred Return as of the date of such Distribution;

 

(iii)        Third,
for Net Ordinary Cash Flow generated during the period commencing on the date hereof and ending on January 31, 2016, to the TFG
Member until such time as the TFG Member has received aggregate Distributions equal to the TFG Member’s accrued and unpaid
Preferred Return as of the date of such Distribution; and

 

(iv)        Fourth,
the balance, including (A) Distributions of Net Ordinary Cash Flow which exceed the Preferred Return under clauses (ii) and (iii)
above during the time period described therein, if any, and (B) all Distributions of Net Ordinary Cash Flow after such two (2)
year period, to the NorthStar Member and the TFG Member, pari passu in proportion to their respective Percentage Interests
as of the date of such Distribution.

 

(b)          Distributions
of Net Extraordinary Cash Flow. The Administrative Member shall calculate Net Extraordinary Cash Flow (which calculation shall
be subject to the review and confirmation of the NorthStar Member) and apply and distribute such Net Extraordinary Cash Flow promptly
after the Venture’s receipt thereof in the following order of priority (taking into

 

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account, as necessary and without limitation,
all prior Distributions of Net Ordinary Cash Flow pursuant to Section 6.05(a):

 

(i)          First,
an amount of Net Extraordinary Cash Flow equal to all outstanding Priority Contributions, together with all accrued return thereon,
shall be paid to the Contributing Members that have made Priority Contributions (payments made in respect of Priority Contributions
shall be applied in reverse order in time to which they are made (i.e., payments made in respect of Priority Contributions
shall be applied first to the Priority Contribution made last in time and last to the Priority Contribution made first in time);

 

(ii)         Second,
to the NorthStar Member and the TFG Member, pari passu in proportion to their respective Percentage Interests as of the
date of such Distribution, until the NorthStar Member has received a twelve percent (12%) IRR;

 

(iii)        Third,
(A) 7.2165% to the TFG Member and (B) 92.7835% to the NorthStar Member and the TFG Member, pari passu in proportion
to their respective Percentage Interests as of the date of such Distribution, until the NorthStar Member has received a seventeen
percent (17%) IRR;

 

(iv)        Fourth,
(A) 17.5258% to the TFG Member and (B) 82.4742% to the NorthStar Member and the TFG Member, pari passu in proportion
to their respective Percentage Interests as of the date of such Distribution, until the NorthStar Member has received a twenty
five percent (25%) IRR;

 

(v)         Fifth,
(A) 22.6804% to the TFG Member and (B) 77.3196% to the NorthStar Member and the TFG Member, pari passu in proportion
to their respective Percentage Interests as of the date of such Distribution, until the NorthStar Member has received a thirty
percent (30%) IRR; and

 

(vi)        Sixth,
the balance, if any, (A) 32.9897% to the TFG Member and (B) 67.0103% to the NorthStar Member and the TFG Member, pari passu
in proportion to their respective Percentage Interests as of the date of such Distribution;

 

provided, that any distribution pursuant
to clause (A) of Sections 6.05(b)(iii), 6.05(b)(iv), 6.05(b)(v) and 6.05(b)(vi) (the “Promote
Distribution Provisions”) shall be subject to the further provisions of Section 6.05(d) and Section 7.05.

 

(c)          Reconciliation
of Distributions. Notwithstanding the foregoing, which is intended to permit interim distributions of Net Ordinary Cash Flow,
the Administrative Member shall calculate Net Ordinary Cash Flow on an annual basis, and if the annual audited report of the Venture
should show that there was any over-distribution of Net Ordinary Cash Flow to a Member, such Member shall repay the over-distribution
within 30 days after receipt of such report. If such annual audited report should show that there was an under-distribution of
Net Ordinary Cash Flow to a Member, such under-distribution shall be paid to such Member within 30 days after receipt of such report
or as promptly thereafter as there is sufficient Net Ordinary Cash Flow.

 

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(d)          Clawback.
If (i) following any Capital Contribution by the Members pursuant to Section 5.02 or (ii) upon the completion of the Distribution
of all the Venture’s assets pursuant to Section 11.03 in connection with the dissolution of the Venture, taking into
account all Capital Contributions of the Members and all Distributions made pursuant to Section 6.05 and Section 11.03,
as well as the timing thereof, but before giving effect to this Section 6.05(d), the Distributions actually received by
the TFG Member pursuant to the Promote Distribution Provisions are in excess of the Distributions the TFG Member should have received
(i.e., the amount the TFG Member would have received pursuant to the Promote Distribution Provisions had all distributions then
been made under Section 6.05(b), but taking into account the actual timing of Capital Contributions and Distributions for
determining whether the IRR hurdles have been met) pursuant to the Promote Distribution Provisions (the “Excess Promote
Distribution”), then the TFG Member shall make a Capital Contribution to the Venture in the amount of the Excess Promote
Distribution which shall then be distributed to the Members that should have received such Distributions using the methodology
as used in determining the Excess Promote Distribution. The TFG Recourse Party shall guaranty the TFG Member’s obligation
to make any Capital Contributions to the Venture in an amount equal to the Excess Promote Distribution pursuant to this Section
6.05(d). By execution of this Agreement, the TFG Recourse Party acknowledges and agrees to its obligations under this Section
6.05(d).

 

(e)          No
Restoration of Funds. Except as provided in Section 6.05(c) and Section 6.05(d), no Member shall be
required to restore to the Venture any funds properly distributed to such Member pursuant to any of the provisions of this Section
6.05 or Section 11.03 unless required by applicable law.

 

(f)          Limitation
on Distributions. Except as provided in this Section 6.05 and Section 11.03, no Member shall be entitled
to (i) receive any distribution from the Venture (including a withdrawal of any of such Member’s capital), (ii) receive interest
from the Venture upon any capital contributed to the Venture, or (iii) receive property other than cash in return for such Member’s
Capital Contributions.

 

6.06.       Intentionally
Omitted.

 

6.07.       Withholding
Taxes. If the Venture is directly or indirectly required by applicable federal, state, local or foreign tax laws to withhold
any portion of any distribution or allocation to a Member, the Venture shall withhold such amounts and make such payments to such
taxing authorities as are necessary to ensure compliance with such tax laws. Any funds withheld by reason of this Section 6.07
shall nonetheless be deemed distributed or allocated (as the case may be) to the Member in question for all purposes under this
Agreement. If the Venture itself pays or incurs any tax (including penalties or interest) or similar charge directly or indirectly
on behalf of any Member as required by applicable law (other than on account of all Member equally), that is not withheld from
actual distributions to the Member, then the Venture may, at the option of the NorthStar Member, either (i) require the Member
to reimburse the Venture for such payment or (ii) reduce any subsequent distributions to such Member by the amount of such payment.
The obligation of a Member to reimburse the Venture for taxes that were paid or incurred shall continue after such Member Transfers
its interest in the Venture or after a withdrawal by such Member. Each Member agrees to furnish the Venture with any

 

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representations and forms as shall reasonably
be requested by the NorthStar Member to assist it in determining the extent of, and in fulfilling, any withholding obligations
it may have.

 

ARTICLE 7.

MANAGEMENT

 

7.01.      Management.
(a) Subject to the terms and conditions of this Agreement, the full and exclusive right, power, authority and discretion to conduct
the business and affairs of the Venture, and to do all things necessary to carry on the business of the Venture, shall be vested
in the NorthStar Member who shall have all of the power and authority of a manager (as defined in Section 18-101(10) of the LLC
Act) within the meaning of and pursuant to the LLC Act; provided, that (i) unless and until a Removal Event has occurred
and is continuing, the Major Decisions shall require the consent of both the NorthStar Member and the TFG Member, (ii) whether
or not a Removal Event has occurred and is continuing, the Permanent Major Decisions shall require the consent of both the NorthStar
Member and the TFG Member, and (iii) unless and until the TFG Member is removed as the Administrative Member, the TFG Member,
in its capacity as the Administrative Member, shall have the duties, responsibilities and authority set forth in Section 7.04
and elsewhere in this Agreement. Without limiting the generality of the foregoing, subject to clauses (i) and (ii) of the immediately
preceding sentence, the NorthStar Member is hereby authorized to execute and deliver on behalf of the Venture any and all documents,
contracts, certificates, agreements and instruments, and to take any action of any kind and to do anything and everything the NorthStar
Member deems necessary, desirable or appropriate in accordance with the provisions of this Agreement and the LLC Act.

 

(a)          Except
to the extent that the NorthStar Member is performing any duties, obligations and responsibilities of the Administrative Member
hereunder, in which case the NorthStar Member shall perform such duties, obligations and responsibilities with Due Care; to the
fullest extent permitted by law (including the LLC Act), (i) the NorthStar Member shall not be bound by any fiduciary duty to the
Venture or the Members and (ii) the TFG Member hereby fully, unconditionally and irrevocably waives any right to assert or bring
any claim or action against the NorthStar Member for breach of fiduciary duty; provided, that (A) the NorthStar Member acknowledges
and agrees that it shall be bound by, and shall comply with, the covenant of good faith and fair dealing implied in every contract
(including this Agreement) and (B) nothing contained in this Agreement shall release the NorthStar Member from, or be deemed to
limit the NorthStar Member’s liability for, or result in the waiver of any rights by the Venture or the Members with respect
to, the NorthStar Member’s fraud, bad faith, willful misconduct, gross negligence or breach of this Agreement in the conduct
of its rights or obligations under this Agreement.

 

7.02.      Major
Decisions. The “Major Decisions”, with respect to the Venture or any Subsidiary, shall be:

 

(a)          make
any voluntary petition in bankruptcy or reorganization or institute any other type of bankruptcy, reorganization or insolvency
proceeding with respect to the Venture or any Subsidiary, consent to the institution of involuntary bankruptcy, reorganization
or insolvency proceedings with respect to the Venture or any Subsidiary, cause the Venture or any Subsidiary

 

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to admit in writing its inability to pay its
debts generally as they become due or cause the Venture or any Subsidiary to make a general assignment for the benefit of its creditors;

 

(b)          cause
the Venture or any Subsidiary to take any action that would trigger liability under any Guaranty (as defined in the Owner Venture
Agreement) or other recourse or personal liability to any Member or an Affiliate of any Member;

 

(c)          admit
additional or substitute Members to the Venture except in accordance with the provisions of Article 9 or admit any additional
partners or members into any Subsidiary (other than the Venture or any other Subsidiary);

 

(d)          merge
or consolidate the Venture or any Subsidiary with any other Person or enter into any joint venture or similar relationship with,
or acquiring any interest in, any corporation, limited liability company, partnership, association or other business organization
by the Venture or any Subsidiary;

 

(e)          except
as provided in Section 7.06, cause the Venture or any Subsidiary to enter into or terminate any Affiliate Agreement or any
amendment or modification to an Affiliate Agreement or waive any material right under any Affiliate Agreement;

 

(f)          except
as otherwise provided in Article 10, the direct or indirect sale or other disposition of all or any material portion of
any Facility, Subsidiary or any other material Venture Assets or the entering into any binding agreement to do so;

 

(g)          intentionally
omitted;

 

(h)          approve
or consummate any financing, refinancing or mortgaging of any Facility or other material Venture Assets, or otherwise incur or
modify or guaranty indebtedness of the Venture or any Subsidiary (including, without limitation, any mezzanine indebtedness), or
place any encumbrance or title condition on any of any Facility or other material Venture Assets (including the Venture’s
ownership interests in any Subsidiary) or modifying any existing encumbrance or title condition;

 

(i)          subject
to the provisions of Section 7.07, adopt each Approved Annual Plan and Budget (including, without limitation, the establishment
or modification of the leasing parameters or entry fees, monthly rates, discounts and concessions for residents with respect to
any Facility) or amend, modify or supplement the terms of the Approved Business Plan and Budget then in effect (provided,
that the Approved Business Plan and Budget attached as Exhibit D hereto is hereby approved as the Approved Business
Plan and Budget for the balance of the 2013 Fiscal Year and for the 2014 Fiscal Year) or the Approved Long Term Business Plan;

 

(j)          intentionally
omitted;

 

(k)          with
respect to any Facility, cause the Venture or applicable Subsidiary to incur any operating or capital expenditures to the extent
such expenditures would: (i) cause the aggregate expenditures for the accounting category which includes the applicable line item(s)
(on a year to date basis) to be exceeded by ten percent (10%) or more of the budgeted amount

 

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therefor or (ii) cause the aggregate
operating expenditures or capital expenditures (as applicable) set forth in the Approved Business Plan and Budget applicable to
such Facility to be exceeded by five percent (5%) or more of the budgeted amount therefor (and, accordingly, any operating or capital
expenditure that is within (i.e., less than) the maximum permitted variances set forth in both clause (i) and clause (ii) shall
be deemed to be “in compliance with the Approved Business Plan and Budget” or satisfy words of similar import); provided,
that (A) the Administrative Member may, on behalf of the Venture, incur Non-Discretionary Expenses without regard to any such limitations
and the expenditure of such Non-Discretionary Expenses shall be deemed approved by the Members, (B) the Administrative Member shall
be permitted to reasonably reallocate any realized cost savings with respect to any line item to any other line item within the
Approved Business Plan and Budget as it relates to any Facility so long as there are demonstrated actual savings in the line item
from which amounts are being reallocated and such reallocation does not violate the terms of any Loan and (C) the Administrative
Member shall give notice to the NorthStar Member of the nature and amount of any such reallocation or Non-Discretionary Expenses
promptly following the occurrence or incurrence thereof;

 

(l)          except
as expressly provided in Section 5.02, make any call for Additional Capital Contributions;

 

(m)        except
as expressly provided in Section 6.05 and Section 11.03, approve any distributions of Net Ordinary Cash Flow, Net
Extraordinary Cash Flow or other Venture Assets;

 

(n)         invest
or lend any available cash of the Venture or any Subsidiary (other than short term deposits or investments of available cash with
financial institutions or in any “money market” type mutual fund or like account);

 

(o)         except
as expressly contemplated by the Approved Business Plan and Budget then in effect, enter into any Contract, whether written or
oral, which is not cancelable by its terms on not more than sixty (60) days’ notice without premium, penalty or other charge;

 

(p)         except
as expressly provided in this Agreement or the Approved Business Plan and Budget then in effect, amend, modify or terminate any
insurance policy required to be maintained pursuant to this Agreement;

 

(q)         intentionally
omitted;

 

(r)          cause
any Subsidiary to enter into any lease other than (i) non-resident leases to the extent that such leases (A) are terminable without
penalty on notice to the counterparty of ninety (90) days or less, (B) require a use of the applicable space that is complimentary
to a senior housing facility and (C) provide for arms-length rent and are otherwise on market terms or (ii) resident agreements
which are in compliance with the leasing parameters set forth in any Approved Business Plan and Budget; provided, that copies of
all leases or agreements entered into by any Subsidiary shall be promptly provided to the NorthStar Member upon execution of such
lease or agreement;

 

(s)         except
as set forth in Section 7.13, amend, modify or supplement the terms of any Operating Lease or enter into any Operating Lease
not substantially in the form attached hereto at Exhibit H;

 

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(t)          liquidate
or dissolve the Venture or any Subsidiary other than in accordance with the terms of this Agreement;

 

(u)         amend
the Certificate of Formation;

 

(v)         take
any action which would make it impossible to carry on the primary purpose of the Venture, amend the purposes of the Venture set
forth in this Agreement or change the zoning of any Facility or the primary use of any Facility from senior housing;

 

(w)        institute
any legal action involving a claim; settle any legal action or confess a judgment by or against the Venture or any Subsidiary;
and

 

(x)         make
any other decision which, pursuant to this Agreement, expressly requires “unanimous approval” or the “approval
or consent of both Members”.

 

7.03.      Permanent
Major Decisions. The “Permanent Major Decisions”, with respect to the Venture or any Subsidiary, shall be
those Major Decisions set forth in Section 7.02(b), (c), (d), (h) (but solely to the extent that the
applicable action would result in additional, or amend the existing, recourse liability of the TFG Recourse Party), (l), (s),
and (u).

 

7.04.      Administrative
Member. (a) Subject to the restrictions on the Administrative Member’s authority contained in this Agreement, the Administrative
Member shall have the duty and obligation (and non-exclusive authority) to (i) conduct (or cause to be conducted) the day to day
business and affairs of the Venture and the Subsidiaries, subject to and in accordance with the provisions of this Agreement, including
the implementation of all approved Major Decisions and Permanent Major Decisions, (ii) implement, in accordance with all applicable
terms and conditions hereof, the Approved Long Term Business Plan and the then effective Approved Business Plan and Budget (which
shall include, without limitation, making decisions, taking necessary actions and making necessary expenditures to the extent that
such expenditure is on behalf of the Venture and its Subsidiaries on account of and in respect of their day-to-day business affairs
and operations which are in furtherance of and in compliance with the Approved Business Plan and Budget and otherwise in accordance
with all applicable terms and conditions hereof), (iii) perform or observe all of the specific obligations and rights to be performed
by the Administrative Member hereunder, and (iv) execute and deliver on behalf of the Venture any and all documents, contracts,
certificates, agreements and instruments, in furtherance of, and consistent with, the foregoing (including leases and contracts
and the procurement of insurance in accordance with the terms and conditions hereof to the extent not otherwise constituting Major
Decisions (unless approved as Major Decisions in accordance with the terms and conditions hereof)). For the avoidance of doubt
and without limiting the foregoing, the Administrative Member shall not take or permit, or bind the Venture or any Subsidiary to
take or permit (A) any Major Decision, (B) any Permanent Major Decision or (C) any other decision, election, expenditure or other
action by or on behalf of the Venture or any Subsidiary that would exceed or violate the authority granted to the Administrative
Member pursuant to clauses (i)-(iv) of this Section 7.04(a) or elsewhere in this Agreement, in each case without the NorthStar
Member’s prior written consent. The Administrative Member shall not receive compensation for serving as Administrative Member
of the Venture.

 

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(a)          The
Administrative Member, in its capacity as such, shall at all times perform its rights, duties, obligations and responsibilities
with Due Care in accordance with all applicable laws and this Agreement; provided, that, except as expressly set forth in
the definition of “Due Care” as set forth herein (if at all), to the fullest extent permitted by law (including the
LLC Act), (i) the Administrative Member shall not be bound by any additional fiduciary duty to the Venture or the Members and (ii)
the NorthStar Member hereby fully, unconditionally and irrevocably waives any right to assert or bring any claim or action against
Administrative Member for breach of fiduciary duty to the extent the same exceeds the requirements of Due Care; and provided, further,
that (A) the Administrative Member shall be bound by, and shall comply with, the covenant of good faith and fair dealing implied
in every contract (including this Agreement) and (B) nothing contained in this Agreement shall release the Administrative Member
from, or be deemed to limit Administrative Member’s liability for, or result in the waiver of any rights by the Venture or
the Members with respect to, the Administrative Member’s fraud, bad faith, willful misconduct, gross negligence or breach
of this Agreement in the conduct of its rights or obligations under this Agreement.

 

(b)          The
Administrative Member shall procure and maintain or cause to be procured and maintained throughout the term of this Agreement,
on behalf of the Venture, as a Charge, the insurance coverage set forth on Exhibit E attached hereto or such additional
or other coverage as the NorthStar Member may from time to time request or approve.

 

7.05.       Removal
of the Administrative Member. (a) Process. Following the occurrence of a Removal Event, the NorthStar Member may remove
the TFG Member as the Administrative Member of the Venture (in which event the TFG Member shall be deemed to be a Member that is
not the Administrative Member for all purposes hereunder) by written notice to the Administrative Member, which removal shall be
effective as of the date of such notice (such date, the “Removal Date”). If the TFG Member is removed as the
Administrative Member of the Venture, in addition to its rights and obligations under Section 7.05(e), the NorthStar Member
may, as of the Removal Date, select a new Administrative Member, which successor Administrative Member so designated may be the
NorthStar Member, an Affiliate thereof or a third party appointed to act as the Administrative Member of the Venture, in which
event such third party shall not be a Member hereunder, notwithstanding its title as “Administrative Member”. Any such
successor Administrative Member shall agree to be, and shall be, bound by the terms of this Agreement.

 

(a)          Intentionally
Omitted.

 

(b)          Intentionally
Omitted.

 

(c)          Arbitration.
In the event of any dispute between Members under Section 7.05 with respect to whether or not a Removal Event or a Promote
Loss Event has occurred, such dispute shall be submitted to final and binding arbitration in New York, NY, administered by JAMS
in accordance with JAMS Streamlined Arbitration Rules and Procedures in effect at that time. The Members shall cooperate with JAMS
and with each other in scheduling the arbitration proceedings so that a final non-appealable award is rendered within sixty (60)
calendar days after submission to arbitration, and any notice requirements under Paragraph 14(b) of the JAMS Streamlined Arbitration
Rules and Procedures or otherwise may be shortened by the JAMS

 

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arbitrator in its discretion. The non-prevailing
party in such arbitration shall pay all fees and disbursements due to JAMS and the JAMS arbitrator. The JAMS arbitrator shall be
(a) a disinterested and impartial person and (b) selected in accordance with Paragraph “12(c)” et seq. of the JAMS
Streamlined Arbitration Rules and Procedures. The JAMS arbitrator shall be bound by the provisions of this Agreement and by applicable
law and shall not have the power to add to, subtract from, or otherwise modify such provisions. Any decision rendered by the JAMS
arbitrator shall be final, conclusive and binding upon the Venture and the Members. Notwithstanding anything to the contrary contained
herein, during the pendency of any arbitration proceeding under this Section 7.05(d), the Administrative Member shall not
take any action on behalf of the Venture or any Subsidiary (including with respect to the day-to-day management of the Venture
or any Subsidiary) without the consent of NorthStar Member.

 

(d)          Effect
of Removal. If the NorthStar Member elects to remove the TFG Member as the Administrative Member in accordance with this Section
7.05:

 

(i)          from
and after the Removal Date, the NorthStar Member shall have the unilateral right to terminate any Affiliate Agreements without
penalty;

 

(ii)         as
of the Removal Date, the TFG Member shall have no further approval rights over any actions taken by the NorthStar Member, the Venture
or any Subsidiary except with respect to any amendments or modifications to this Agreement that have an adverse effect on the TFG
Member in any material respect and Permanent Major Decisions;

 

(iii)        from
and after the Removal Date through the TFG Exit Date, the TFG Member shall retain its Interest in the Venture as a non-Administrative
Member but shall no longer have any rights to Distributions or allocations;

 

(iv)        the
TFG Member shall have no further obligation to make Capital Contributions to the Venture;

 

(v)         the
TFG Member shall have no further duties or obligations as Administrative Member under this Agreement;

 

(vi)        the
TFG Member shall not by reason of any change in management control hereunder be released from any liability that the TFG Member
may have to the NorthStar Member or the Venture by reason of the breach that resulted in such removal, if any, by the TFG Member
of its obligations under this Agreement prior to the change in management control, but the TFG Member shall not be liable for any
liabilities of the Venture or its Subsidiaries first arising from and after the change in management control other than for such
liabilities caused by the TFG Member or any of its Affiliates, if any; and

 

(vii)       all
bank accounts contracts, deposits, accounts or other evidences of any rights of the Venture and its Subsidiaries shall be transferred
to the name or control of the such Person as the NorthStar Member shall direct and the TFG Member shall promptly execute such instruments
and take such actions as the NorthStar Member may request to effect such transfer; provided, that the NorthStar Member may
execute any and all such documents in the name of the TFG Member pursuant to the power-of-attorney referenced in Section 7.03(h).

 

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(e)          Purchase
of Interests. If the TFG Member is removed as the Administrative Member, then the NorthStar Member shall purchase from the
TFG Member, and the TFG Member shall sell to the NorthStar Member, the entire Interest of the TFG Member within one (1) year following
such removal (the date the Interest of the TFG Member is purchased hereunder, the “TFG Exit Date”), in accordance
with and subject to the following terms:

 

(i)          The
NorthStar Member shall deliver to the TFG Member a notice of purchase, which notice will specify a closing date for such purchase
and sale, which date shall be on or before the date that is one (1) year following the Removal Date (such notice, a “Default
Purchase Notice”). Failure by the NorthStar Member to deliver a Default Purchase Notice as specified herein shall not
constitute a waiver of any such breach or default. If the NorthStar Member does not deliver a Default Purchase Notice on or prior
to the date that is nine (9) months after the Removal Date, then the TFG Exit Date shall automatically be deemed to be the one
(1) year anniversary of the Removal Date; provided, that such date may be accelerated by the NorthStar Member.

 

(ii)         The
purchase price for the Interest of the TFG Member shall be the amount that would be distributed to the TFG Member if all of the
assets of the Venture (other than the leasehold estate in each Facility, the value of which shall not be taken into account for
such purpose) were sold for fair market value as of the Removal Date (as determined through the “baseball arbitration”
procedures described in Section 7.05(g)), all customary transaction costs relating to such a sale were paid, all other liabilities
of the Venture and its Subsidiaries were discharged, and the Venture was liquidated and all assets of the Venture were distributed
in accordance with the provisions of Section 11.03; provided, that if the TFG Member is removed as the Administrative
Member by the NorthStar Member as a result of a Removal Event that constitutes a Promote Loss Event, in determining such purchase
price, any amount that would otherwise have been distributed to the TFG Member pursuant to the Promote Distribution Provisions
shall instead be distributed to the Members, pro rata in accordance with their Percentage Interests.

 

(iii)        Any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements
of any kind or nature whatsoever sustained by the Venture, any Subsidiary or the NorthStar Member on account of the Removal Event
that gave rise to such Default Purchase Notice shall be offset against any amounts payable to the TFG Member under this Section
7.05(f).

 

(f)          Baseball
Arbitration Procedures. Within ten (10) business days after the delivery of the Default Purchase Notice, NorthStar Member and
TFG Member will each select an independent consultant (each, an “Initial Consultant” and together, the “Initial
Consultants”). If either NorthStar Member or TFG Member fail to timely appoint an Initial Consultant, then the party
which appointed an Initial Consultant shall notify the other party of such failure and, if within five (5) Business Days of receipt
of such notice such failing party shall fail to appoint an Initial Consultant, the appointed Initial Consultant shall independently
select and appoint the other Initial Consultant, who shall be impartial, within five (5) Business Days after notice to the failing
party. Each Initial Consultant shall, as promptly as possible, but in any event within forty-five (45) days of selection, prepare
a sealed appraisal of the fair market value of the assets of the Venture and its Subsidiaries, taken as a whole (other than the
leasehold estate in each

 

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Facility, the value of which shall not be taken
into account for such purpose). Neither of the fair market value appraisals shall be opened except as and when hereinafter expressly
provided. If both of the Initial Consultants submit their respective appraisals in accordance with the foregoing provisions, then
the Initial Consultants shall arrange a meeting (the “Initial Consultant Meeting”) to be held at a location
that is mutually agreeable to the Initial Consultants and located in the Borough of Manhattan during business hours within ten
(10) days after the appraisals shall have been prepared, for the purpose of opening the fair market value appraisals. NorthStar
Member and TFG Member shall have not less than ten (10) days’ notice of the date, time and location of the Initial Consultant
Meeting and shall have the right to have its representatives present thereat. At the Initial Consultant Meeting, the fair market
determinations shall be opened by each of the Initial Consultants and copies thereof shall be distributed to NorthStar Member and
TFG Member. If the higher of the appraised values is less than or equal to 110% of the lower appraised value (or the two appraisals
are equal in amount), the fair market value of the assets of the Venture and its Subsidiaries will be deemed to be equal to the
average of the two appraised values. If the higher of the appraised values is more than 110% of the lower appraised value, then
the two Initial Consultants, within ten (10) days after the Initial Consultant Meeting, shall jointly appoint a mutually agreeable
third appraiser who shall be impartial (the “Third Consultant”). If the Initial Consultants fail to agree upon
and appoint the Third Consultant within such ten (10)-day period, then either of NorthStar Member or TFG Member may request that
JAMS appoint the Third Consultant within ten (10) days after such request, and the parties hereto shall be bound by any appointment
so made within such 10-day period. If the Third Consultant shall not have been appointed within such 10-day period, then either
of NorthStar Member or TFG Member may apply to any court having jurisdiction to make such appointment. The Third Consultant shall
subscribe and swear to an oath to fairly and impartially select the appraised value of the assets of the Venture and its Subsidiaries
as of the Removal Date which, in his or her opinion, more accurately reflects the appraised value at issue. The Third Consultant
shall conduct such hearings as he or she deems appropriate. Within five (5) business days after the Third Consultant has been appointed,
the Third Consultant shall select the appraised value (i.e., the Third Consultant must choose either the appraised value of the
first Initial Consultant or the second Initial Consultant) which, in his or her opinion, more accurately reflects the fair market
value of the assets of the Venture and its Subsidiaries, and shall notify NorthStar Member and TFG Member of such selection in
writing and such closest appraised value shall be deemed to be the fair market value of the assets of the Venture and its Subsidiaries.
The fees and expenses of any such appraisal shall be borne by the parties equally, but each party shall bear the expense of the
Initial Consultant appointed by it (or the Initial Consultant that should have been appointed by it) and its attorneys and experts
as well as any expenses of presenting its own proof. The NorthStar Member and the TFG Member shall each have the right to submit
such data and memoranda to each of the appraisers in support of their respective positions as they may deem necessary or appropriate.
Each appraiser shall be a real estate broker having at least five (5) years’ experience valuation of senior living facilities
in the United States. It is expressly understood, and each appraiser shall acknowledge and agree, that any determination of the
appraised value shall be based on all relevant factors. The appraisers shall not have the power to add to, modify or change any
provision of the Agreement, and the jurisdiction of the appraisers is accordingly limited.

 

7.06.         Goods
and Services from Affiliates and Professionals. (a) Except as set forth in Section 7.06(b) and Section 7.06(c),
neither Member shall cause or permit the Venture or any

 

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Subsidiary to enter into (i) any Affiliate
Agreement (or permit any property manager, managing agent or other agent of the Venture or any Subsidiary to enter into any Affiliate
Agreement) unless such agreement or arrangement has been approved by the Member that is not an Affiliate of the counterparty to
such Affiliate Agreement after the nature of the relationship or affiliation and the terms of such agreement or arrangement have
been fully disclosed in writing or (ii) any agreement with the Manager or any subsidiary of the Manager that would cause the Venture
to receive any income from the Manager or any subsidiary thereof.

 

(a)          Subject
in all respects to the provisions of Section 7.06(d), the Members hereby acknowledge that an Affiliate of the TFG Member
shall serve as Manager of each of the Facilities pursuant to a separate Management Agreement for each Facility between the Manager
and the Subsidiary with respect to each Facility. The Members hereby approve the terms of the Management Agreement in the form
attached hereto as Exhibit K and authorize the performance of the duties and obligations of the Manager thereunder
by the Manager. Notwithstanding anything to the contrary, the Venture or applicable Subsidiary thereof shall have the right (exercisable
on behalf of the Venture or applicable Subsidiary by the NorthStar Member as provided in Section 7.06(d)) to terminate any
Management Agreement (A) as to any Facility upon a sale or other disposition (direct or indirect) of such Facility and (B) as
to any Facility or all Facilities during any period in which the NorthStar Member has the right to remove the TFG Member as the
Administrative Member or the TFG Member is not serving as the Administrative Member or no longer owns an Interest.

 

(b)          Subject
in all respects to the provisions of Section 7.06(d), the Members hereby acknowledge that an Affiliate of the TFG Member
shall serve as Development Manager of each of the Facilities requiring development (outside of the scope of any capital improvement
supervisory services contemplated in the applicable Management Agreement) as provided in the Approved Long Term Business Plan pursuant
to a separate Development Services Agreement for each such Facility between the Development Manager and the Owner Venture or a
subsidiary thereof. The terms and conditions of the Development Services Agreement shall be as reasonably approved by each of the
members of the Owner Venture, which shall include a development services fee payable to the Development Manager pursuant to the
terms of such Development Services Agreement equal to five percent (5%) of project costs for the applicable development, excluding
(i) land acquisition costs, (ii) real estate or property taxes, (iii) insurance premiums, (iv) contingencies, (v) financing costs,
(vi) interest reserves, (vii) operating reserves and (viii) the development services fee. Notwithstanding anything to the contrary,
the Owner Venture or applicable subsidiary thereof shall have the right (exercisable on behalf of the Owner Venture or applicable
subsidiary by the NorthStar Member (as defined in the Owner Venture Agreement) as provided in Section 7.06(d) of the Owner
Venture Agreement) to terminate any Development Services Agreement (i) as to any Facility upon a sale or other disposition (direct
or indirect) of such Facility and (ii) as to any Facility or all Facilities during any period in which the NorthStar Member (as
defined in the Owner Venture Agreement) has the right to remove the TFG Member (as defined in the Owner Venture Agreement) as the
Administrative Member of the Owner Venture or the TFG Member (as defined in the Owner Venture Agreement) is not serving as the
Administrative Member or no longer owns an Interest in the Owner Venture.

 

(c)          Each
Member shall have the unilateral right (but not the obligation) to exercise, on behalf of the Venture, all rights of the Venture
or any Subsidiary, as applicable, to enforce or

 

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exercise any right, remedy or option under
any Affiliate Agreement (including the Management Agreements and Development Services Agreements) with an Affiliate of the other
Member (including, without limitation, the terminating of, or the bringing of any summary proceeding, litigation, suit or other
action to enforce, such Affiliate Agreement pursuant to the terms thereof), and the right to execute documents on behalf of the
Venture or cause the Venture to execute documents on behalf of any Subsidiary in connection therewith.

 

(d)          The
Administrative Member shall employ, on behalf of the Venture, the Venture Attorneys and the Venture Accountants, and no other Person
shall be retained to provide legal or accounting services to the Venture without the approval of the NorthStar Member.

 

7.07.      Approved
Business Plan and Budget; Approved Long Term Business Plan. (a) For each Fiscal Year commencing after the 2014 Fiscal Year,
the Administrative Member shall prepare and deliver to the NorthStar Member, not later than November 1 of the immediately preceding
Fiscal Year, a draft business plan of the Venture and each Subsidiary, including detailed cash flow projections and underlying
assumptions, and a draft operating and capital budget and plan (collectively, a “Draft Annual Plan and Budget”)
with respect to the Venture Assets, the Subsidiaries and each Facility for the upcoming Fiscal Year, which Draft Annual Plan and
Budget shall be approved by the Administrative Member prior to delivery thereof to the NorthStar Member. Each Draft Annual Plan
and Budget shall (i) be in the form attached hereto as Exhibit D, (ii) set forth separately on a month-by-month basis all
anticipated revenue, operating expenses (including any amounts payable to the Manager pursuant to any Management Agreement and
to the Development Manager pursuant to any Development Services Agreement), other Charges, capital and other costs and expenses
the Venture and each Subsidiary and Facility for such Fiscal Year (including detailed cash flow projections after debt service
and reserves), (iii) set forth leasing parameters for each Facility setting forth the rates for entry fees and monthly rates (as
well as permitted discounts and concessions), together with other charges billable to residents, and (iv) set forth all underlying
assumptions.

 

(a)          (i)          If
the NorthStar Member shall approve the entire Draft Annual Plan and Budget proposed by the Administrative Member, the same shall
constitute the approved operating and capital budget and plan for the applicable Fiscal Year (each approved Draft Annual Plan and
Budget being an “Approved Business Plan and Budget”).

 

(i)          If
the NorthStar Member objects to any aspect of the Draft Annual Plan and Budget proposed by the Administrative Member, then the
Administrative Member, within ten (10) days after its receipt of such objection, shall (A) revise such Draft Annual Plan and Budget
in its reasonable discretion to attempt to address and incorporate the NorthStar Member’s objections and (B) re-submit the
same to the NorthStar Member. The foregoing provisions of this Section 7.07(b)(ii) shall be repeated until there is an Approved
Business Plan and Budget for the Fiscal Year in question acceptable to the Administrative Member that has been proposed by the
Administrative Member and approved by the NorthStar Member.

 

(ii)         If
the NorthStar Member has not approved a proposed Draft Annual Plan and Budget for any Fiscal Year by the first day of the Fiscal
Year to which it relates, then for purposes hereof, until a Draft Annual Plan and Budget for such Fiscal Year is approved, the
Approved Business Plan and Budget for such Fiscal Year (a “CPI-Budget Year”) shall be the

 

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same as the Approved Business Plan and Budget
for the previous Fiscal Year but with an increase in each line item by the lesser of (A) three percent (3.0%) or (B) the same
percentage as the percentage increase (if any) in the CPI from the CPI published in the month that is 13 months prior to the first
month in such CPI-Budget Year to the CPI published one month prior to the first month in such CPI-Budget Year; provided,
that (x) Non-Discretionary Expenses may be incurred as necessary without regard to any such limitations during the CPI-Budget Year
in question, and (y) capital expenditure line items shall not carry forward other than the unexpended portion of any capital expenditure
line items set forth in the prior Approved Business Plan and Budget for projects not yet competed, and (z) without duplication
of any amounts carried forward pursuant to clause (y), any capital expenditures set forth in such portion of the Approved Long
Term Business Plan relating to the applicable CPI-Budget Year shall be deemed part of such Approved Business Plan and Budget for
such CPI-Budget Year until a Draft Annual Plan and Budget for such Fiscal Year is approved. For purposes hereof, “CPI”
shall be the Consumer Price Index for All Urban Consumers, All Areas (base year 1982-1984 = 100) published by the United States
Bureau of Labor Statistics.

 

(b)          The
Members have each heretofore approved and agreed upon the Approved Business Plan and Budget for the Venture and the Pinebrook Facility
for the balance of the 2013 Fiscal Year and for the 2014 Fiscal Year, which Approved Business Plan and Budget is attached hereto
as Exhibit D.

 

(c)          Prior
to the closing of the acquisition by the Owner Venture or its subsidiary of each of the Parkview Facility and the Harvard Facility,
the TFG Member shall propose a Draft Annual Plan and Budget with respect to such Facility for the 2014 Fiscal Year. If the NorthStar
Member objects to the Draft Business Plan and Budget, the Members shall follow the procedures set forth in Section 7.07(b)(ii)
until a Draft Business Plan and Budget with respect to such Facility has been proposed by the TFG Member and approved by NorthStar
Member.

 

(d)          The
Administrative Member shall prepare and deliver to the NorthStar Member proposed modifications and supplements to the Approved
Long Term Business Plan on an annual basis together with each Draft Annual Plan and Budget delivered pursuant to the provisions
of Section 7.07(a). If the NorthStar Member shall approve of any such proposed modifications to the Approved Long Term Business
Plan, the same shall be deemed so modified, and as so modified shall be deemed the Approved Long Term Business Plan. If the NorthStar
Member does not approve of any such proposed modifications to the Approved Long Term Business Plan, the Administrative Member shall
(i) revise such proposed modifications to attempt to address and incorporate the NorthStar Member’s objections and (ii) re-submit
the same to the NorthStar Member. The foregoing provisions of this Section 7.07(e) shall be repeated until any proposed
modifications to the Approved Long Term Business Plan acceptable to the Administrative Member have been proposed by the Administrative
Member and approved by the NorthStar Member. The Members shall use good faith efforts to undertake, and shall cooperate with each
other in good faith in connection with undertaking, the implementation of the Approved Long Term Business Plan in a commercially
reasonable manner, including with respect to reaching agreement between the Members with respect to taking any Major Decisions
required to execute such implementation.

 

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7.08.       Compensation;
Reimbursement for Expenses; Other Expenses. (a) No Member and no employee of any Member, as such, shall be entitled to any
salary or other compensation for any services rendered or to be rendered by it to the Venture; provided, that the reasonable
out-of-pocket expenses incurred by the Administrative Member in its capacity as such in connection with the performance of its
duties hereunder shall be reimbursed by the Venture as a Charge (it being understood that the TFG Member, in its capacity as the
Administrative Member, shall not be entitled to be paid or reimbursed by the Venture or any Subsidiary under this Agreement for
any costs and expenses incurred by any Affiliate of the TFG Member pursuant to any Agreement with such Affiliate to the extent
such costs and expenses are duplicative of amounts separately reimbursed by the Venture or any Subsidiary to such Affiliate under
such Affiliate Agreement).

 

(a)          Subject
to Section 7.08(c), all fees and disbursements of third-party accountants, attorneys and consultants (including environmental,
engineering and appraisal consultants) retained by the Venture (but not the Members) and incurred in connection with the transactions
contemplated hereby and the preparation, negotiation, execution and delivery of any and all documents related to the Venture shall
be paid by the Venture.

 

(b)          Without
duplication of any amounts paid by the Venture pursuant to Section 7.08(b), the Venture shall reimburse each of the
NorthStar Member and the TFG Member for all out-of-pocket expenses incurred by such party in connection with the negotiation of
the Purchase Agreements (and associated acquisition financing) and the transactions contemplated by this Agreement (including,
without limitation, all due diligence costs, travel costs, transfer taxes, costs of third party environmental, engineering, appraisal
and other consultants and attorneys and other closing costs incurred in connection therewith) as set forth on the final sources
and uses statement attached hereto as Exhibit G.

 

(c)          Each
of the Members shall pay their own respective attorneys’ fees and expenses incurred in connection with the preparation, negotiation,
execution and delivery of this Agreement, the Owner Venture Agreement, the Management Agreements and the Development Services Agreements.

 

7.09.       Intentionally
Omitted.

 

7.10.      Other
Business Ventures; Non-Compete. Subject to the provisions of Section 7.09 of the Owner Operating Agreement and
this Section 7.10, the Venture and the Members: (a) recognize that the Members and their Affiliates, and their respective
members, partners, shareholders, officers, directors, employees, agents and representatives, have or may in the future have other
business interests, activities and investments, independently or with others, some of which may be in conflict or competition with
the business of the Venture; (b) agree that the Members and their Affiliates, and their respective members, partners, shareholders,
officers, directors, employees, agents and representatives, are entitled to carry on such other business interests, activities
and investments; (c) agree that neither the Venture, the other Members, nor any of their respective members, partners, shareholders,
officers, directors, employees, agents or representatives, shall have any right, by virtue of this Agreement or otherwise, in or
to such business interests, activities and investments, any interests therein or the income or profits derived therefrom; and (d)
agree that the pursuit of such business interests, activities and

 

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investments, even if competitive with the business
of the Venture, shall not be deemed wrongful or improper. Notwithstanding the foregoing, except with respect to the Facilities,
none of the TFG Member, the Key Principals, any other Person Controlled by the Key Principals or any of their respective Affiliates,
without the consent of the NorthStar Member, shall acquire or invest in any property on which any Person plans to develop a senior
living facility within a radius distance of five (5) miles measured from any Facility.

 

7.11.       Intentionally
Omitted.

 

7.12.       REIT
Compliance. (a) The Administrative Member acknowledges that, as of the date hereof, certain direct or indirect members of the
NorthStar Member are qualified or intend to qualify as a real estate investment trust as defined in Section 856 of the Code (a
“REIT”) and such members hold their investment in the Venture through a taxable REIT subsidiary within the meaning
of Section 856(l) of the Code. Accordingly, the Administrative Member shall use commercially reasonable best efforts to manage
and operate the Venture and the Subsidiaries in such manner that: (i) the Venture and the Subsidiaries will not be treated as operating
or managing a lodging facility or a health care facility within the meaning of Section 856(l)(3) of the Code; and (ii) any health
care facility (within the meaning of Section 856(l)(3) of the Code) leased or owned by the Venture and the Subsidiaries is operated
and managed by an eligible independent contractor within the meaning of Section 856(d)(9) of the Code. In furtherance of the foregoing,
any direct or indirect member of the Administrative Member shall not enter into any agreement under which the Venture or any Subsidiary
would receive any income from the Manager or a subsidiary of the Manager. Notwithstanding the foregoing, the Administrative Member
shall not be deemed to have breached the foregoing provisions of this Section 7.12(a) (and shall have no liability or be
subject to any remedy under this Agreement) with respect to any specific actions taken by the Administrative Member at the written
direction of, or with the prior approval of, the NorthStar Member, including the entering into of each Operating Lease (the form
of which is hereby approved by the NorthStar Member).

 

(a)          If
there shall be an amendment or modification to Code or other relevant rules after the date of this Agreement that adversely impacts
the direct or indirect members of the NorthStar Member that are REITs, as REITs, as a result of the activities of the Venture and
the Subsidiaries or any Member’s ownership of an Interest, then (i) the Administrative Member shall cooperate reasonably
with the NorthStar Member and shall exercise reasonable efforts to effectuate solutions or “workarounds” to address
any REIT qualification concerns under the Code of the NorthStar Member and its affiliates arising out of any such amendment or
modification and (ii) the NorthStar Member shall use reasonable efforts to ensure that any such solutions or “workarounds”,
to the extent practicable, have no material adverse effect on the Administrative Member.

 

(b)          The
Administrative Member on behalf of the Venture shall use commercially reasonable efforts to provide all information reasonably
requested by the NorthStar Member related to the business and operation of the Venture or any Subsidiary, including such information
as the NorthStar Member may request in order to determine its (or its direct or indirect holders) qualification as a REIT.

 

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(c)          At
all times during the term of this Agreement, the TFG Member shall be a separate legal entity for state law purposes and federal
income tax purposes from any Affiliate of the TFG Member that is serving as a Manager with respect to any Property and not a direct
or indirect subsidiary of the Manager, and the TFG Member shall maintain and control, separate from any such Affiliated Manager,
its own bank account, books and records and employees.

 

(d)          The
Members acknowledge and agree that an unintentional breach or violation of this Section 7.12 by the Administrative
Member shall constitute a Removal Event but not an Event of Default (so long as the action that triggered such breach or violation
would not otherwise cause an Event of Default pursuant to the provisions of this Agreement excluding Section 7.12) and,
accordingly, the sole remedy available to the NorthStar Member in such instance shall be to remove the Administrative Member pursuant
to Section 7.05.

 

7.13.       Leasing
of the Facilities. In connection with the acquisition of fee title by any subsidiary of the Owner Venture of any Facility (other
than undeveloped land until it is developed and ready to be placed in operation), provided that the NorthStar Member has determined
that such Facility is a senior housing facility, such subsidiary shall enter into a lease for such Facility, as lessor, to the
Venture or a Subsidiary, as lessee, as a senior housing facility that will be treated as a “qualified health care property”
as defined in Section 856(e)(6)(D) of the Code (each, an “Operating Lease”). The Operating Lease for any such
Facility shall be substantially in the form of Exhibit H attached hereto and shall contain such other terms and conditions
as the Members may determine in accordance with the provisions of this Agreement; provided, that (i) the initial amount
of base rent and, if applicable, percentage rent payable under any Operating Lease shall be determined by the NorthStar Member
based on a transfer pricing study performed by an independent accounting firm selected by the NorthStar Member with respect to
the applicable Facility, (ii) the NorthStar Member shall be permitted at any time to increase (or add) the base rent and percentage
rent payable under any Operating Lease, (iii) the NorthStar Member shall be permitted at any time to otherwise modify the base
rent and, if applicable, percentage rent payable under any Operating Lease based a new or updated transfer pricing study, and (iv)
the NorthStar Member shall be permitted at any time to modify any of the other terms and conditions of an Operating Lease if the
NorthStar Member determines, in good faith, that such modification is necessary or desirable to better assure the status of the
NorthStar Member or certain direct or indirect members of the NorthStar Member as a REIT (provided, that the NorthStar Member shall
use reasonable efforts to ensure that any such modifications, to the extent practicable, have no material adverse effect on the
Administrative Member). The Administrative Member makes no representations or warranties as to whether any modifications to any
Operating Lease made by the NorthStar Member pursuant to the authority granted in the previous sentence shall assure the status
of the NorthStar Member or certain direct or indirect members of the NorthStar Member as a REIT.

 

7.14.       Subsidiaries;
Authorized Signatories. (a) All of the provisions of this Agreement regarding the management and governance of the Venture
shall apply to the management and governance of each Subsidiary, whether any such Subsidiary is managed or controlled directly
or indirectly by the Venture, as member, manager, partner, stockholder or otherwise. Any action to be taken by any of the Subsidiaries
shall for all purposes hereof be construed as an action taken by the Venture and shall be subject to the same rights and limitations
granted and imposed on the Members under this Agreement, subject to any additional

 

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rights and limitations granted or imposed in
the governing documents of such Subsidiary. In the event that the Venture conducts its business through one or more Subsidiaries,
the Administrative Member shall perform, with no additional compensation, the same or substantially identical services for each
such Subsidiary as the Administrative Member performs for the Venture, subject to the terms, conditions, limitations and restrictions
set forth in this Agreement. Without limiting the generality of the foregoing (and notwithstanding anything contained herein to
the contrary), any and all references herein to the Venture or any Member taking, causing or directing any action on behalf of
a Subsidiary shall be deemed to refer to the Venture causing (or such Member causing the Venture to cause), in its capacity as
a direct or indirect partner, member or stockholder of such Subsidiary, such action to be taken for and on behalf of such Subsidiary.

 

(a)          In
addition, each of the Administrative Member and the NorthStar Member shall be permitted to appoint one or more “Authorized
Signatories” of any Subsidiary in order to accomplish the foregoing, which Authorized Signatories shall be subject to the
same limitations on authority as are set forth in this Agreement. If the TFG Member is removed as the Administrative Member pursuant
to Section 7.05, each Authorized Signatory of any Subsidiary that was appointed by the TFG Member shall be deemed automatically
removed from such office as an Authorized Signatory and shall have no further right to act in such capacity.

 

ARTICLE 8.

BANK ACCOUNTS; BOOKS AND RECORDS;

STATEMENTS; TAXES; FISCAL YEAR

 

8.01.       Books
of Account. At all times during the existence of the Venture, the books of account of the Venture shall be prepared
and kept by the Administrative Member in accordance with GAAP, which shall reflect all of the transactions relating to the Facilities,
the Venture and the Subsidiaries and shall be appropriate and adequate for the business of the Facilities, the Venture and the
Subsidiaries, and which books of account shall be maintained at the principal place of business of the Venture. There shall be
maintained at the principal place of business of the Venture (a) copies of the Venture’s federal, state and local income
tax returns and reports (including all reporting work papers and documentation), if any, for the six (6) most recent years, (b) a
copy of this Agreement and all amendments thereto and of any financial statements of the Venture (including all reporting work
papers and documentation) for the six (6) most recent years and (c) copies of all mortgages, deeds of trust and other documents
evidencing loans or leases to which the Venture or any Subsidiary is a party or by which the Venture or any Subsidiary is bound,
brokerage agreements to which the Venture or any Subsidiary is a party or by which the Venture or any Subsidiary is bound, the
Management Agreement, Development Services Agreements, Contracts, all permits and licenses relating to any of the Facilities (other
than to the extent the same are required to be kept at the applicable Facilities), all easements and other recorded and unrecorded
agreements affecting any of the Facilities or to which the Venture or any Subsidiary is a party or by which the Venture or any
Subsidiary is bound and other Venture records. Any Member or its duly authorized representatives shall have the right at any time
to inspect and copy such books of account during normal business hours upon reasonable notice. Any Member and its duly authorized
representatives shall have the right to examine (and copy) or conduct an audit of the Venture’s books and records at any
time during normal business hours and upon reasonable notice at the Venture’s principal place of business. Any such

 

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examination or special audit (i.e.,
audits other than the annual audits for the Venture which shall be conducted as of December 31 at the Venture’s sole
cost and expense) shall be performed at such Member’s sole cost and expense.

 

8.02.         Fiscal
Year. Unless the Members shall agree otherwise, the fiscal year of the Venture for financial, accounting, federal, state and
local income tax purposes (the “Fiscal Year”) shall be the calendar year (except that the first Fiscal Year
of the Venture (for financial and accounting purposes) shall begin on the date hereof and the last Fiscal Year of the Venture shall
end on the last day of the term of this Agreement).

 

8.03.         Bank
Accounts. Subject to the requirements of any applicable Mortgage Loans (as defined in the Owner Venture Agreement), all funds
of the Venture and each Subsidiary shall be deposited in the Venture’s or such Subsidiary’s name, as applicable, in
one or more separate bank accounts (each, a “Bank Account”) at a bank selected by the Administrative Member
with the consent of the NorthStar Member, and representatives of the NorthStar Member may, at its election, be authorized signatories
of any such account. Each such Bank Account shall be used exclusively for the Venture’s or a Subsidiary’s funds, as
applicable, and no other funds shall be commingled therein. Withdrawals may be made from such Bank Account only for purposes authorized
under this Agreement. All withdrawals from the Bank Account in excess of $25,000 shall be made only upon the signature of an authorized
signatory of the Administrative Member which authorized signatory shall be either David Freshwater or David Barnes and such other
individuals as may be designated by the Administrative Member and approved by the NorthStar Member.

 

8.04.         Financial
Statements. (a) Commencing after the conclusion of the 2014 calendar year, within 15 days after the end of each Fiscal Year,
the Administrative Member shall prepare and deliver to the Members draft financial statements of the Venture on a consolidated
basis for such Fiscal Year, within 45 days after the end of each Fiscal Year, the Administrative Member shall prepare and deliver
to the Members final financial statements of the Venture on a consolidated basis for such Fiscal Year together with a certification
from the Administrative Member to the NorthStar Member in a form reasonably acceptable to the NorthStar Member, and within 90 days
(or such short time period as may be required by any Lender (as defined in the Owner Venture Agreement)) after the end of each
Fiscal Year, the Administrative Member shall prepare and deliver to the Members final audited financial statements of the Venture
on a consolidated basis for such Fiscal Year which shall be audited by the Venture Accountants in accordance with generally accepted
auditing standards (the “Annual Report”); in each case, along with, to the extent not included as part of such
draft, final or final audited financial statements, a balance sheet, an income statement, statements of cash flow (including Net
Ordinary Cash Flow and Net Extraordinary Cash Flow) for the Facilities, a trial balance, a debt summary and such other information
set forth in the NorthStar Member’s annual asset management reporting requirements attached hereto as Exhibit F-1,
all of which (except for the reports of Net Ordinary Cash Flow and Net Extraordinary Cash Flow and other reports prepared on a
cash basis) shall be prepared in accordance with GAAP and shall present fairly and accurately the financial position and operating
results of the Venture, the Subsidiaries and the Facilities.

 

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(a)          Within
10 days after the end of each calendar quarter, the Administrative Member shall prepare and deliver to the Members an unaudited
financial report for the Venture, each Subsidiary and the Facilities for such calendar quarter (the “Quarterly Report”).
The Quarterly Report shall include the following: a balance sheet, income statement, statement of cash flows (including Net Ordinary
Cash Flow and Net Extraordinary Cash Flow), a trial balance, statements of the Members’ Capital Accounts, a debt summary
and such other information set forth in the NorthStar Member’s quarterly asset management reporting requirements attached
hereto as Exhibit F-1 or that the NorthStar Member may reasonably request, all of which (except for the reports of Net Ordinary
Cash Flow and Net Extraordinary Cash Flow and other reports prepared on a cash basis) shall be prepared in accordance with GAAP
and shall present fairly and accurately the financial position and operating results of the Venture, the Subsidiaries and the Facilities.
Each Quarterly Report shall also include a certification from the Administrative Member to the NorthStar Member in a form reasonably
acceptable to the NorthStar Member that the Venture is in compliance with all of its debt covenants and that the Administrative
Member does not anticipate any debt covenant noncompliance for the forward 12-month period or, if the Venture is not in compliance
with any of its debt covenants or the Administrative Member anticipates any debt covenant noncompliance for the forward 12-month
period, a statement specifying each such noncompliance or anticipated noncompliance. Material deviations from the Approved Business
Plan and Budget and pro forma shall be accompanied by the Administrative Member’s narrative explanation.

 

(b)          Within
10 Business Days after the end of each calendar month, the Administrative Member shall prepare and deliver to the Members an unaudited
financial report for the Venture, each Subsidiary and the Facilities for the preceding month (the “Monthly Report”).
The Monthly Report shall include the following: a discussion of the operating and financial performance of the Venture for the
period, leasing updates, a balance sheet, an income statement, statement of cash flows (including Net Ordinary Cash Flow and Net
Extraordinary Cash Flow), statements of the Members’ Capital Accounts, statements of the Members’ Capital Contributions,
statements of the Members’ Outstanding Capital Contributions, statements of the Members’ Percentage Interests, statements
of capital expenditures, a rent roll schedule, an accounts receivable aging schedule, an accounts payable summary, an accounting
of actual expenditures and revenues compared to those set forth in the Approved Business Plan and Budget, an accounting of all
withdrawals and explanations of any “working capital” with respect to each Facility, and such other information set
forth on the NorthStar Member’s monthly asset management reporting requirements attached hereto as Exhibit F-1 or
that the NorthStar Member may reasonably request. In addition, within 10 Business Days after the end of each calendar month, the
Administrative Member shall prepare and deliver to the Members the Administrative Member’s standard financial reporting package
with respect to the Venture and the Facilities, an example of which is attached hereto as Exhibit F-2. Deviations from the
Approved Business Plan and Budget in excess of the lesser of ten percent (10%) of the applicable line item or $10,000 shall be
accompanied by the Administrative Member’s narrative explanation.

 

(c)          The
Administrative Member shall cause the Venture to deliver to the NorthStar Member (i) such additional reports or other information
set forth on Exhibit F-1 attached hereto within the applicable time periods set forth thereon and (ii) such information,
and at such times, as the NorthStar Member shall reasonably request in order for any direct or indirect owner of the

 

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NorthStar Member to continue to qualify as,
and to determine whether it will or will continue to qualify as, a REIT for federal income tax purposes.

 

8.05.       Tax
Returns; Tax Matters Partner. (a) The Administrative Member shall cause all Venture tax returns to be timely prepared so that
they may be filed with the applicable government authorities within allowable time periods, including extensions, which tax returns
shall not be filed until the NorthStar Member consents to such filing and shall provide to any Member such other information as
may be reasonably requested by such Member relating to the Company’s tax matters. In furtherance of the foregoing the Administrative
Member shall, as soon as practicable, cause to be submitted drafts of all income tax returns (including all related schedules and
exhibits and upon request, copies of all supporting work papers) to the NorthStar Member for its consent to the filing of such
returns, which shall be provided at least 30 days prior to the required filing date and prior to filing the same and in the case
of any annual income tax returns. In addition, the Administrative Member shall cause to be provided to the NorthStar Member: (1)
at least 5 Business Days prior to each quarterly estimated tax payment date for calendar year corporations, an estimate of the
NorthStar Member’s share of the Company’s taxable income or loss with respect to such calendar quarter and (2) within
25 days after the end of each taxable year, estimated information necessary for such Member to prepare any required 1099-DIV forms.
Notwithstanding the above, the Administrative Member will cause to be provided to each Member with (i) estimates of its IRS Schedule
K-1 items with respect to any taxable year within 20 days after the end of such taxable year and (ii) a final IRS Schedule K-1
with respect to the taxable year no later than May 31st following such taxable Year.

 

(a)          The
NorthStar Member shall be the tax matters partner (as described in Section 6231(a)(7) of the Code and similar provisions of
state and local tax law) of the Venture. In the event the Venture shall be the subject of an income tax audit by any U.S. federal,
state, or local authority, to the extent the Venture is treated as an entity for purposes of such audit, including administrative
settlement and judicial review, the tax matters partner shall be authorized to act for, and its decision shall be final and binding
upon, the Venture and each Member thereof.  Moreover, each Member agrees that without the prior written consent of the NorthStar
Member, it will not act independently with respect to any tax audit or proceeding related to the Venture, including any administrative
or judicial review, involving any U.S. federal, state, or local or non-U.S. tax authority; any settlement, closing, or similar
agreement entered into by the Venture in respect of the Venture with any such authority; and any voluntary disclosure made by the
Venture to any such authority.

 

8.06.        Tax
Elections. All elections required of permitted to be made under the Code or any successor thereto and under any state, local
or non-U.S. tax law, shall be made by the NorthStar Member in its sole discretion, provided that if any such election would have
a material, adverse and disproportionate effect to the TFG Member, such election shall be subject to TFG Member’s consent
not to be unreasonably withheld or delayed, unless the failure to make such election would adversely affect the ability of the
NorthStar Member (or its direct or indirect members) to maintain its or their status as a REIT. Notwithstanding the foregoing the
Venture shall be treated as a partnership for federal income tax purposes and no Member shall make any election (for tax purposes
or otherwise) inconsistent with such treatment.

 

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ARTICLE 9.

TRANSFERS AND PLEDGES OF INTERESTS

 

9.01.       Restrictions
on Transfers and Pledges of Interests. (a) Except as specifically permitted in this Section 9.01, no Member shall, directly
or indirectly, sell, assign, transfer or otherwise dispose of (each such transaction being herein called a “Transfer”),
or pledge, collaterally assign (including any assignment of income or profits) or otherwise hypothecate or create or permit to
exist a lien against (each such transaction being herein called a “Pledge”), all or any part of such Member’s
Interest without the prior written consent of the other Members, and any such Transfer or Pledge made in violation of the foregoing
shall be void ab initio. Any of the following (each, an “Upper Tier Transfer”), whether accomplished
directly or indirectly, by contract, operation of law, voluntarily or involuntarily, shall be deemed a Transfer or Pledge, as applicable,
for purposes hereof:

 

(i)          any
Transfer or Pledge of (A) any partnership interest in any Member that is a partnership, (B) any limited liability company interest
in any Member that is a limited liability company, (C) any stock in any Member that is a corporation or (D) any legal or beneficial
interest in any Member that is a trust or other entity;

 

(ii)         the
(A) admission of any additional partner to any Member that is a partnership, (B) admission of any additional member to any Member
that is a limited liability company, (C) issuance of additional stock in any Member that is a corporation, or (D) issuance of any
additional legal or beneficial interest in any Member that is a trust or other entity; and

 

(iii)        the
occurrence of any of the transactions described in Section 9.01(a)(i) or Section 9.01(a)(ii) with respect
to any partnership, limited liability company, corporation, trust or other entity that is itself an owner of any direct or indirect
interest in a Member, or any other transaction, howsoever effected, which changes the beneficial ownership of a Member from that
existing on the date hereof.

 

(b)          Notwithstanding
the foregoing, the following Transfers, Pledges and Upper Tier Transfers shall be permitted by or in respect of each Member without
the consent of the other Members:

 

(i)          with
respect to the NorthStar Member: (A) any Transfer or Pledge of all or a portion of the NorthStar Member’s Interest to any
entity in which the managing member or general partner is, directly or indirectly, Controlled by or under common Control with the
NorthStar Parent, or any Affiliate thereof (any of the foregoing permitted NorthStar Member transferees or pledgees being referred
to herein as a “Permitted NorthStar Member Affiliate”); (B) any Upper Tier Transfer in respect of the NorthStar
Member as to any Person among the existing holders of the partnership, limited liability company, stock or other legal or beneficial
ownership interests in such Person or as to any other Person so long as, after giving effect to such Upper Tier Transfer, the NorthStar
Member is, directly or indirectly, Controlled by a Permitted NorthStar Member Affiliate; (C) the Transfer by the direct or indirect
members, partners, shareholders or other beneficial owners of the NorthStar Member of any of their respective direct or indirect
beneficial ownership interests in the NorthStar Member among themselves; and (D) any Transfer of direct or indirect ownership interests
in the NorthStar

 

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Parent, or a Transfer as part of a merger,
consolidation or similar transaction involving the NorthStar Parent; provided, that in all such instances, the NorthStar
Parent or another Person reasonably satisfactory to the TFG Member shall remain obligated to the TFG Recourse Party under a Contribution
Agreement.

 

(ii)         with
respect to the TFG Member: any Upper Tier Transfer in respect of the TFG Member so long as, after giving effect to such Upper Tier
Transfer: (A) the Key Principals possess sole control of the policies and management of TFG Member, and are responsible for the
day-to-day management of the same; and (B) the Key Principals, together with each of their respective Family Members, beneficially
continue to own, directly or indirectly, one hundred percent (100%) of the equity and other ownership interests in the TFG Member;
provided, that one or more members of senior management of the TFG Member or its Affiliates designated by the Key Principals, together
with their respective Family Members, may own up to five percent (5%) in the aggregate of the equity and other ownership interests
in the TFG Member (clauses (A) and (B) collectively, the “Control and Ownership Requirement”).

 

9.02.       Conditions
Applicable to All Transfers. (a) Notwithstanding anything to the contrary contained in this Agreement, any Transfer of any
Interest by a Member or any Upper Tier Transfer with respect to a Member shall be made in full compliance with all applicable statutes,
laws, ordinances, rules and regulations of all federal, state and local governmental bodies, agencies and subdivisions having jurisdiction
over the Venture or any applicable Subsidiary or Facility. In the event that any filing, application, approval or consent is required
in connection with any such transfer, the transferring member shall promptly make such filing or application or obtain such approval
or consent, at its sole expense, and shall reimburse the other Member for any costs or expenses (including attorneys’ fees)
incurred by such Member in connection with any filing, application, approval or consent.

 

(a)          Notwithstanding
anything to the contrary contained in this Agreement, no transfer of an Interest (including any Upper Tier Transfer) shall be binding
upon the other Member unless (i) such transfer will not be subject to, or such transfer, when aggregated with prior transfers in
accordance with applicable law, will not result in the imposition of, any state, city or local transfer taxes to the Venture, any
Subsidiary or the non-transferring Member (except to the extent it is specifically provided herein that the non-transferring Member
is obligated to pay all or a portion of such taxes), unless the transferring Member agrees to pay, and actually pays, such transfer
tax and to indemnify the non-transferring Member, (ii) in the case of a transfer of a direct Interest, such transfer shall be a
transfer of the transferring Member’s entire Interest (rather than a portion thereof), and the transferee shall have delivered
to such other Member an executed and acknowledged assumption agreement pursuant to which the transferee assumes all the obligations
of the transferor accruing from and after the date of such transfer under, and agrees to be bound by all the provisions of, this
Agreement (or, in the case where the transferee is an Affiliate of the transferor, from and after the date of this Agreement),
subject to the limitations of liabilities set forth herein, and (iii) in the case of the transfer of a direct Interest, the transferee
shall have executed, acknowledged and delivered any instruments required under the LLC Act to effect such transfer and its admission
to the Venture. Notwithstanding anything in this Agreement to the contrary, in no event shall an Interest be transferred to a Person
who is the subject of any pending bankruptcy proceedings, or to a Person who is a minor or who otherwise

 

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lacks legal capacity, and any attempt to effect a transfer
to such a Person shall be void and of no effect and shall not bind the Venture.

 

(b)          Notwithstanding
any transfer made pursuant to this Article 9, the transferring Member shall remain liable for all of the obligations and
liabilities of the transferring Member under this Agreement, whether accruing prior to, on or from and after the date of such transfer;
provided, that the transferring Member shall be relieved of any such obligations and liabilities accruing from and after
the date of such transfer (other than a transfer to an Affiliate of the transferring Member) if the transferee shall have delivered
to the other Member an executed and acknowledged assumption agreement pursuant to which the transferee assumes all the obligations
of the transferring Member accruing from and after the date of such transfer under, and agrees to be bound by all the provisions
of, this Agreement. In connection with any transfer permitted under this Article 9, each Member hereby consents to the withdrawal
of the transferring Member as a Member and the admission of the transferee as a Member with the rights of the transferring Member
hereunder.

 

(c)          The
Venture, each Member and any other Person or Persons having business with the Venture, need deal only with Members who are admitted
as Members or as substituted Members of the Venture, and they shall not be required to deal with any other Person by reason of
transfer by a Member or by reason of the death of a Member, except as otherwise provided in this Agreement. In the absence of the
substitution (as provided herein) of a Member for a transferring or a deceased Member, any payment to a Member or to a Member’s
executors or administrators shall acquit the Venture and the Members of all liability to any other Persons who may be interested
in such payment by reason of an assignment by, or the death of, such Member.

 

(d)          Without
the consent of the NorthStar Member, no Transfer shall be permitted if the Transfer would (i) cause the Venture to terminate under
Section 708(b) of the Code; (ii) cause the Venture to fail to qualify from the “private placement safe harbor” from
being treated as a “publicly traded partnership” under Regulations Section 1.7704-1(h); (iii) cause any direct or indirect
owner of the NorthStar Member to fail to qualify as a REIT; or (iv) cause the assets of the Venture to be deemed “plan assets”
of any Person subject to ERISA which may own any direct or indirect interest in the Venture.

 

9.03.      Admission
of Transferee. Any Person who becomes a Member, accepts, ratifies and agrees to be bound by all actions duly taken pursuant
to the terms and provisions of this Agreement by the Venture prior to the date of its membership in the Venture and, without limiting
the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been properly
executed and delivered on behalf of the Venture in accordance with this Agreement prior to said date and which are in force and
effect on said date. Unless and until a transferee is admitted as a substituted Member, the transferee shall be entitled only to
allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information
or accounting of the affairs of the Venture, shall not be entitled to inspect the books or records of the Venture, and shall not
have no right to exercise any of the powers, rights, and privileges of a Member hereunder.

 

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ARTICLE 10.

FORCED SALE OF THE PROPERTIES

 

10.01.     Initiation
of Forced Sale; Sale of Interest. (a) If, at any time after the expiration of the Forced Sale Lockout End Date with respect
to a Member, such Member desires to sell the interest of the Venture and its Subsidiaries in all of the Facilities or, solely with
respect to the NorthStar Member, any Facility, and the other Member does not approve such sale, then, so long as neither the Venture
or applicable Subsidiary(ies) nor the Owner Venture or its applicable subsidiary(ies) is not then subject to any prohibition on
the sale of the interest of the Venture and its Subsidiaries in the applicable Facility(ies) pursuant to any Loan Documents (as
defined in the Owner Venture Agreement) or other agreements binding upon the Venture or applicable Subsidiary(ies) or the Owner
Venture or its applicable subsidiary(ies) (it being understood that, such a prohibition on the sale of such interest shall not
include the mere requirement or condition that a release price be paid, a defeasance (including a partial defeasance) be effectuated
or a loan be repaid in full (including the payment of a yield maintenance premium or prepayment fee) in connection with such sale),
such Member shall have the right, subject to Section 10.04 and Section 15.01(f), to give the other Member a notice
(a “Sale Notice”; the Member giving a Sale Notice, the “Initiating Member”; the Member receiving
a Sale Notice, the “Non-Initiating Member”) which Sale Notice shall (i) set forth the Initiating Member’s
recommendation that the Venture sell the interest of the Venture and its Subsidiaries in the applicable Facility(ies) to a third
party who is not an Affiliate of the Initiating Member, (ii) be delivered together with, and as part of, a “Sale Notice”
as defined in, and given pursuant to the provisions of, Section 10.01 of the Owner Venture Agreement, and shall otherwise comply
with the requirements set forth therein with respect to any assumption of Mortgage Loans and Qualifying Buyers (as each such phrase
is defined therein), and (iii) the Initiating Member’s determination of the price (the “Forced Sale Price”),
in dollars, at which the Initiating Member would be willing to sell the interest of the Venture and its Subsidiaries in the applicable
Facility(ies) free and clear of all liabilities secured by or otherwise relating to such applicable Facility(ies) (except as otherwise
set forth in Section 10.01 of the Owner Venture Agreement). Notwithstanding anything to the contrary contained in this Article 10,
neither Member shall have the right to be an Initiating Member or tender a Sale Notice during the existence of an Event of Default
by such Member or if a Removal Event has occurred with respect to such Member.

 

(a)          Within
a period (the “Initial Acceptance Period”) of thirty (30) days following the delivery of the Sale Notice, the
Non-Initiating Member shall have the right to deliver to the Initiating Member a notice (the “Initial Acceptance Notice”)
stating its desire to purchase (i) in the case of a Sale Notice covering all of the Facilities, the Initiating Member’s Interest
for the Interest Purchase Price, or (ii) in the case of a Sale Notice covering less than all of the Facilities, the interest of
the Venture and its Subsidiaries in the applicable Facility(ies) covered by such Sale Notice for the Forced Sale Price (which,
if the applicable Facility(ies) constitute all of the Facilities owned by one or more Subsidiaries, may be structured as a purchase
of ownership interests in such Subsidiary(ies)) (such purchase described in clause (i) or (ii), a “Purchase”);
provided, that simultaneously with the giving of the Initial Acceptance Notice such Non-Initiating Member shall deliver
to a national title insurance company, as escrow agent pursuant to a customary escrow agreement, a soft deposit (the “Initial
Forced Sale Deposit”) in an amount equal to one percent (1.0%) of the Forced Sale Price.

 

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(b)          If
the Non-Initiating Member has delivered an Initial Acceptance Notice, within a period (the “Second Acceptance Period”)
of ninety (90) days following the delivery of the Initial Acceptance Notice, the Non-Initiating Member shall have the right to
deliver to the Initiating Member a notice (the “Second Acceptance Notice”) reaffirming its desire to consummate
the Purchase; provided, that simultaneously with the giving of the Second Acceptance Notice such Non-Initiating Member shall
deliver to the applicable escrow agent an additional deposit (the “Second Forced Sale Deposit” and together
with the Initial Forced Sale Deposit, the “Forced Sale Deposit”) in an amount equal to two percent (2.0%) of
the Forced Sale Price, which shall result in an aggregate Forced Sale Deposit of three percent (3.0%) of the Forced Sale Price.
If the Non-Initiating Member does not timely deliver the Second Acceptance Notice to the Initiating Member together with the Second
Forced Sale Deposit on or before the expiration of the Second Acceptance Period (time being of the essence), the Non-Initiating
Member shall be deemed to have elected not to consummate the Purchase and the Initial Forced Sale Deposit shall be returned to
the Non-Initiating Member.

 

(c)          Following
the delivery of the Sale Notice, the Administrative Member shall request the Venture Accountants to promptly calculate the amount
that would be distributed to each Member if the interest of the Venture and its Subsidiaries in the applicable Facility(ies) were
sold for the Forced Sale Price on the date which the Forced Sale Notice is delivered, all customary transaction costs relating
to such a sale were paid and all other liabilities of the Venture and its Subsidiaries which relate to the Facility(ies) being
sold were discharged (and solely in the case of a sale of all Facilities, the Venture was liquidated and all assets of the Venture
were distributed in accordance with the provisions of Section 11.03); provided, that (i) there shall be
no deduction for any deemed transfer, stamp or similar taxes or the establishment of any reserves under Section 11.03(b)
(ii) the calculation shall take into account any applicable additional assumptions set forth in Section 10.01(d) of the Owner Venture
Agreement. The amount so calculated by the Venture Accountants that would be distributed to the Initiating Member shall be referred
to as the “Interest Purchase Price”. The failure of the Venture Accountants to complete the calculation of the
Interest Purchase Price prior to the last day of the Acceptance Period shall not extend the Acceptance Period.

 

10.02.     Closing
of the Purchase. (a) If the applicable Sale Notice covers all of the Facilities and the Non-Initiating Member (i) timely gives
the Initial Acceptance Notice and delivers the Initial Forced Sale Deposit as provided in Section 10.01(b) and (ii) timely
gives the Second Acceptance Notice and delivers the Second Forced Sale Deposit as provided in Section 10.01(c), then
on or before the sixtieth (60th) day after receipt of the Second Acceptance Notice (the “Interest Closing Date”),
the Non-Initiating Member (or its designee(s)) shall purchase from the Initiating Member, and the Initiating Member shall sell
to the Non-Initiating Member (or its designee(s)), the Initiating Member’s Interest for the Interest Purchase Price, subject
to the further terms and conditions hereof. Time shall be of the essence with respect to the parties’ obligation to close
such Purchase on the scheduled Interest Closing Date. On the Interest Closing Date:

 

(i)          the
Initiating Member shall deliver to the Non-Initiating Member (or its designee(s)) a duly executed and acknowledged instrument of
assignment conveying the Initiating Member’s Interest to the Non-Initiating Member (or its designee(s)) free and clear of
all liens and encumbrances, which instrument shall contain surviving representations concerning

 

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due organization and authority of the Initiating
Member and the absence of liens and encumbrances on the Initiating Member’s Interest and shall contain a provision indemnifying
and holding the Non-Initiating Member (or its designee(s)) harmless from any loss, liability, cost or expense (including reasonable
attorneys’ fees) it may incur by reason of any breach of such representation;

 

(ii)         the
Non-Initiating Member shall pay the Interest Purchase Price (minus the Deposit, together with any interest accrued thereon, which
shall be delivered to the Initiating Member, and as adjusted by the credits and apportionments herein set forth) to the Initiating
Member in immediately available funds;

 

(iii)        the
Venture Accountants shall close the books of the Venture as of the Interest Closing Date, and all items of Venture revenue and
expense which are customarily apportioned in the sale of properties comparable to the Facilities shall be apportioned between the
Initiating Member and the Non-Initiating Member as of 11:59 p.m. on the day preceding the Interest Closing Date in accordance with
the customs and practices usual in transactions involving properties comparable to the Facilities in proportion to their respective
shares of Net Ordinary Cash Flow for the then current calendar period;

 

(iv)        notwithstanding
Section 6.02, the Net Income and Net Loss (and other items referred to in Section 6.02) attributable to the Initiating
Member’s Interest for the taxable year of the sale shall be allocated between the Initiating Member and the Non-Initiating
Member by closing the books of the Venture as of the Interest Closing Date, unless otherwise agreed to by the Initiating Member
and the Non-Initiating Member;

 

(v)         Net
Ordinary Cash Flow and Net Extraordinary Cash Flow up to (but not including) the Interest Closing Date shall be distributed in
accordance with the provisions of Section 6.05;

 

(vi)        the
Interest Purchase Price shall be (A) increased by the aggregate amount of all Capital Contributions and Priority Contributions
(and accrued and unpaid return thereon) made by the Initiating Member on account of the Initiating Member’s Interest in the
period between the date of the Sale Notice and the Interest Closing Date and (B) decreased by any Net Extraordinary Cash Flow distributed
to the Initiating Member pursuant to Section 6.05 (including in repayment of any Priority Contributions made by the Initiating
Member) on account of the Initiating Member’s Interest during such period;

 

(vii)       the
Initiating Member shall pay all transfer, stamp or similar taxes due in connection with the conveyance of the Interest of the Initiating
Member or, if no such taxes are due in connection with such conveyance but would otherwise have been due in connection with a sale
of the applicable Facility(ies), then there shall be deducted from the Interest Purchase Price an amount equal to the respective
share (based on its respective Percentage Interest) of the Initiating Member of such transfer, stamp or similar taxes that would
have been due in connection with any such sale of applicable the applicable Facility(ies);

 

(viii)      the
Initiating Member shall discharge of record all liens and encumbrances affecting its Interest, and if the Initiating Member fail
to do so, the Non-Initiating Member may

 

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use any portion of the Interest Purchase Price to pay and
discharge any such liens and encumbrances and any related expenses and adjourn the Interest Closing Date for such period as may
be necessary for such purpose; and

 

(ix)         the
Members shall execute all amendments to fictitious name, limited liability company or similar certificates necessary to reflect
the withdrawal of the Initiating Member from the Venture, the admission of any new Member to the Venture, if applicable, the termination
of the Venture, or as may otherwise be required by law.

 

(b)          If
the applicable Sale Notice covers less than all of the Facilities and the Non-Initiating Member (i) timely gives the Initial Acceptance
Notice and delivers the Initial Forced Sale Deposit as provided in Section 10.01(b) and (ii) timely gives the Second Acceptance
Notice and delivers the Second Forced Sale Deposit as provided in Section 10.01(c), then on or before the thirtieth (30th)
day after receipt of the Second Acceptance Notice, the Non-Initiating Member and the Venture or applicable Subsidiary(ies) shall
enter into a Valid Contract for the purchase of the interest of the Venture and its Subsidiaries in the applicable Facility(ies)
covered by the applicable Sale Notice for the Forced Sale Price (which Purchase, at the election of the Non-Initiating Member,
may be structured as a purchase of the Venture’s ownership interests in the applicable Subsidiary(ies) as provided in Section 10.01(b));
provided, that the deposit required under such Valid Contract shall be the Deposit provided for in Section 10.01(b).
The Initiating Member shall negotiate such Valid Contract on behalf of the Venture or applicable Subsidiary(ies). The parties shall
act reasonably and in good faith to timely enter into such Valid Contract within such 30-day period and shall thereafter proceed
to close the Purchase thereunder within 90 days after entering into such Valid Contract. Time shall be of the essence with respect
to the parties’ obligation to close such Purchase on the scheduled closing date set forth in such Valid Contract.

 

(c)          If
(i) the Initiating Member shall default in its obligation to close the sale of its Interest contemplated by Section 10.02(a)
on the Interest Closing Date or (ii) the Initiating Member or Affiliate of the Initiating Member that is a member of the Operating
Venture shall default in its obligation to close the sale of its Interest (as defined in the Operating Venture Agreement) contemplated
by Section 10.02(a) of the Operating Venture Agreement on the Interest Closing Date, then the Non-Initiating Member may declare
such default to be an Event of Default under this Agreement and pursue its rights and remedies under this Agreement, seek specific
performance of the Initiating Member’s obligations or pursue its remedies at law or in equity (in which case such Non-Initiating
Member shall be entitled to the return of the Deposit, together with all interest accrued thereon), all of which rights and remedies
shall be cumulative and nonexclusive. If (i) the Non-Initiating Member shall default in its obligation to close the purchase of
the Initiating Member’s Interest contemplated by Section 10.02(a) on the Interest Closing Date or (ii) the Non-Initiating
Member or Affiliate of the Non-Initiating Member that is a member of the Operating Venture shall default in its obligation to close
the purchase of the Interest of the Initiating Member (as each such term is defined in the Operating Venture Agreement) contemplated
by Section 10.02(a) of the Operating Venture Agreement on the Interest Closing Date, then the Initiating Member shall be entitled
to declare such default to be an Event of Default under this Agreement and pursue its rights and remedies under this Agreement,
and shall be entitled to retain the Deposit, together with all interest accrued thereon, as liquidated damages, and may thereafter
cause the Venture to sell the Properties to any

 

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unrelated third party pursuant to a Valid Contract without
the Non-Initiating Member having any rights to purchase the Properties under this Agreement or otherwise consent thereto. In no
event shall such Deposit or accrued interest be deemed to be a Capital Contribution by any Member. The Valid Contract to be entered
into between the Non-Initiating Member and the Venture or applicable Subsidiary(ies) pursuant to Section 10.02(c)
shall provide for remedies substantially similar to the remedies provided for in this Section 10.02(d).

 

(d)          Notwithstanding
anything to the contrary set forth in this Article 10, if the Non-Initiating Member is the TFG Member, the TFG Member shall
not be permitted to designate the Manager or any subsidiary of the Manager to be the purchaser of the NorthStar Member’s
Interest or any Property pursuant to this Section 10.02.

 

10.03.    Sale
of the Facilities. (a) If the Non-Initiating Member (i) elects not to purchase the interest of the Venture and its Subsidiaries
in the applicable Facility(ies), (ii) fails to deliver timely an Initial Acceptance Notice to the Initiating Member together with
the Initial Forced Sale Deposit on or before the expiration of the Initial Acceptance Period (time being of the essence) or (iii)
fails to deliver timely a Second Acceptance Notice to the Initiating Member together with the Second Forced Sale Deposit on or
before the expiration of the Second Acceptance Period (time being of the essence), then the NorthStar Member shall, notwithstanding
anything to the contrary contained in this Agreement, be authorized to act for and on behalf of the Venture, without any further
consent of any other Member, for purposes of executing, in the name of the Venture, any documents or instruments which the NorthStar
Member deems necessary or appropriate to implement the sale of the interest of the Venture and its Subsidiaries in the applicable
Facility(ies) pursuant to this Section 10.03. The NorthStar Member shall consult with and keep the TFG Member closely informed
of matters relating to the sale of the applicable Facility(ies), including, without limitation, circulating to the TFG Member drafts
of the contract(s) of sale and any written comments thereon made by the proposed purchaser(s). Within 30 days after the expiration
of the Acceptance Period, the NorthStar Member shall cause the Venture to engage one or more Independent Sales Agent(s) selected
by the NorthStar Member to market the applicable Facility(ies) for sale, for a period (“Marketing Period”) of
up to 180 days (which 180-day period shall commence following such 30-day period), in a manner designed to achieve the highest
net cash sales price to the Venture (taking into account any difference in cost to the Owner Venture of prepaying or defeasing
any existing Mortgage Loan versus an assumption of any such Mortgage Loan by a proposed buyer) and seek to cause the Venture to
enter into one or more Valid Contracts within the Marketing Period. The applicable Facility(ies) may be marketed and sold to one
or more unaffiliated third party purchasers either as a single Portfolio, in sub-portfolios of fewer than all of the applicable
Facility(ies) or on an individual Facility-by-Facility basis, as the Initiating Member determines in the exercise of its good faith
business judgment is most likely to maximize the aggregate sales price for the applicable Facility(ies) realized by the Venture.
The commission to be paid to the Independent Sales Agent(s) shall not exceed a fair market, arms’ length commission for the
sale of comparable senior housing facilities. Without limiting the authority granted to the Initiating Member above, each Member
shall cooperate in all reasonable respects with the Venture, the other Member and the Independent Sales Agent(s) (including, without
limitation, in connection with the marketing of the applicable Facility(ies) and by executing any documents which may be reasonably
required) in order to effect the intent of, and consummate the transactions contemplated in, this Article 10. In addition,
the Administrative Member shall provide all

 

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material information relating to the applicable Facility(ies)
and customary estoppel certificates that a third party purchaser reasonably requests and to provide access to the applicable Facility(ies)
and to all of the relevant information and files which are useful or necessary to effect a sale of the interest of the Venture
and its Subsidiaries in the applicable Facility(ies), subject to first obtaining from the recipient of any such information a
customary non-disclosure agreement. If the Administrative Member shall delay in providing any such information, then, at the election
of the NorthStar Member, the time periods set forth herein shall be extended by the period of such delay. For purposes hereof,
“Independent Sales Agent” shall mean an independent duly licensed sales agent that is among the top five independent
sales agents (by volume or sale price) then actively engaged in serving as sales agent in connection with the sale of senior housing
facilities comparable to the applicable Facility(ies).

 

(a)          If,
following the marketing of the interest of the Venture and its Subsidiaries in the applicable Facility(ies) for sale in accordance
with the provisions of Section 10.03(a) during the Marketing Period, (1) the highest available gross sale price (without
any deduction for any brokerage commissions or similar fees payable in connection with such sale and without adjustments and closing
prorations) at which a bona fide third party purchaser who is not an Affiliate of the Initiating Member (and who shall be a Qualifying
Buyer if such Qualifying Buyer was specified in the Sale Notice) enters or is willing to enter into a Valid Contract to purchase
the interest of the Venture and its Subsidiaries in the applicable Facility(ies) is equal to or greater than 95% of the Forced
Sale Price stated in the Sale Notice and (2) if applicable, any additional requirements set forth in clause (2) of Section 10.03(b)
of the Owner Venture Agreement are satisfied, then the Venture shall, or shall cause the applicable Subsidiary(ies) to, enter into
such Valid Contract on or prior to the date that is 30 days following the end of the Marketing Period and sell the interest of
the Venture and its Subsidiaries in the applicable Facility(ies) at such price to such purchaser pursuant to the terms thereof.
If (i) following the marketing of the applicable Facility(ies) for sale in accordance with the provisions of Section 10.03(a)
during the Marketing Period, the highest available gross sale price (without any deduction for any brokerage commissions or similar
fees payable in connection with such sale and without adjustments and closing prorations) at which a bona fide third party purchaser
who is not an Affiliate of the Initiating Member enters or is willing to enter into a binding contract to purchase the interest
of the Venture and its Subsidiaries in the applicable Facility(ies) that would otherwise qualify as a Valid Contract is less than
95% of the Forced Sale Price stated in the Sale Notice and (ii) the Initiating Member is willing to consent to a sale at such lesser
price (the “Lesser Price Offer”), then upon written notice by the Initiating Member to the Non-Initiating Member,
the Non-Initiating Member shall again have the right to deliver an Initial Acceptance Notice as provided in Section 10.01(b)
above at the Lesser Price Offer as if such notice were a Sale Notice, except that the time to deliver an Initial Acceptance Notice
shall be reduced to a 10-day period from receipt of the Lesser Price Offer. If the Non-Initiating Member does not timely elect
to so deliver an Acceptance Notice at the Lesser Price Offer as aforesaid, then the Venture shall, or shall cause the applicable
Subsidiary(ies) to, enter into such Valid Contract and sell the interest of the Venture and its Subsidiaries in the applicable
Facility(ies) at such Lesser Price Offer to such bona fide third party purchaser pursuant to the terms thereof. If, by the date
that is nine (9) months after the expiration of the initial Second Acceptance Period, the Venture has not sold the interest of
the Venture and its Subsidiaries in the applicable Facility(ies) as herein provided for a gross sale price (without any deduction
for any brokerage commissions or similar fees payable in connection with such sale and without adjustments and closing prorations)
that is

 

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equal to or greater than (y) 95% of the Forced Sale Price or (z)
if there has been a Lesser Price Offer and the Non-Initiating Member did not timely elect to deliver an Acceptance Notice at the
Lesser Price Offer as aforesaid, such Lesser Price Offer, and the applicable Facility(ies) are not otherwise subject to a binding
Valid Contract at such price, then the Venture shall not cause the interest of the Venture and its Subsidiaries in the applicable
Facility(ies) to be sold pursuant to this Article 10 unless the NorthStar Member (and with respect to which an Event of
Default does not then exist) delivers another Sale Notice and once again initiates the provisions of this Article 10.

 

10.04.     Special
Provisions. Notwithstanding anything to the contrary contained in this Article 10 or Article 15: (i) once
the procedures outlined in this Article 10 are initiated, the procedures under Article 15 shall not be initiated
until all of the rights under this Article 10 shall have been exercised, exhausted or extinguished relating to such first
initiation; (ii) once the procedures outlined in Article 15 are initiated, the procedures under this Article 10 shall
not be initiated until all of the rights under Article 15 shall have been exercised, exhausted or extinguished relating
to such first initiation; and (iii) any of the procedures or elections followed or made by a Member under this Article 10
(including with respect to the delivery of a Sale Notice, an Initial Acceptance Notice or a an Second Acceptance Notice) shall
be simultaneously made with or followed by a like procedure or election by such Member or its Affiliate who is a member of the
Owner Venture pursuant to and in accordance with the terms of Article 10 of the Owner Venture Agreement, in order for such procedure
or election to be effective hereunder.

 

ARTICLE 11.

DISSOLUTION AND LIQUIDATION; EVENTS OF DEFAULT

 

11.01.     Events
Causing Dissolution. The Venture shall be dissolved and its affairs wound up upon the occurrence of any of the following:

 

(a)          the
Members consent in writing to such dissolution;

 

(b)          the
sale or other disposition (voluntarily or involuntarily) by the Venture of all or substantially all of the Venture Assets and the
collection of all amounts derived from any such sale or other disposition, including all amounts payable to the Venture under any
promissory notes or other evidences of indebtedness taken by the Venture (unless the Members shall elect to distribute such indebtedness
to the Members in liquidation), and the satisfaction of contingent liabilities of the Venture in connection with such sale or other
disposition; or

 

(c)          the
occurrence of any event that, under the LLC Act, would cause the dissolution of the Venture or that would make it unlawful for
the business of the Venture to be continued.

 

11.02.     Right
to Continue Business of the Venture. Upon an event described in Section 11.01(c) or Section 11.01(d) (but not
an event described in Section 11.01(c) that makes it unlawful for the business of the Venture to be continued), the Venture
thereafter shall be dissolved and liquidated unless, within 90 days after such event, an election to continue the business of the
Venture shall be made in writing by all remaining Members. If such an election to continue the Venture is made, then the Venture
shall continue until another event causing dissolution in accordance with this Article 11 shall occur.

 

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11.03.     Distributions
Upon Dissolution. (a) Upon the dissolution of the Venture, the NorthStar Member (or any other Person responsible for winding
up the affairs of the Venture) shall proceed without any unnecessary delay to sell or otherwise liquidate the Venture Assets and
pay or make due provision for the payment of all debts, liabilities and obligations of the Venture. The NorthStar Member may delegate
any of its duties hereunder to the Administrative Member.

 

(a)          The
net liquidation proceeds and any other liquid assets of the Venture after the payment of all debts, liabilities and obligations
of the Venture (including, without limitation, all amounts owing to the Members under this Agreement), the payment of expenses
of liquidation of the Venture, and the establishment of a reasonable reserve in an amount estimated by the NorthStar Member to
be sufficient to pay any amounts reasonably anticipated to be required to be paid by the Venture, shall be distributed to the Members
in accordance with the provisions of Section 6.05(b).

 

(b)          Each
of the Members shall be furnished with a statement prepared by, or under the supervision of, the Venture Accountants, the NorthStar
Member and any other person or entity responsible for winding up the affairs of the Venture which shall set forth the assets and
liabilities of the Venture as of the date of complete liquidation. Upon dissolution and liquidation of the Venture, the Members
shall execute, acknowledge and cause to be filed any notice or certificate required by law to reflect the termination of the Venture.

 

ARTICLE 12.

Intentionally omitted

 

ARTICLE 13.

REPRESENTATIONS AND WARRANTIES

 

13.01.     Representations
and Warranties of the Members. Each Member hereby represents and warrants to the other Member, as of the date hereof that:

 

(a)          Such
Member is duly organized, validly existing and (to the extent such concept is relevant under its jurisdiction of incorporation
or formation) in good standing under the laws of its jurisdiction of incorporation or formation, with all requisite power and authority
to enter into and perform this Agreement.

 

(b)          This
Agreement has been duly authorized, executed and delivered by such Member and constitutes the legal, valid and binding obligation
of such Member, enforceable against such Member in accordance with its terms.

 

(c)          No
consents or approvals are required from any governmental authority or other Person for such Member to enter into this Agreement
and form the Venture. All limited liability company, corporate, partnership or trust action on the part of such Member necessary
for the authorization, execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby,
have been duly taken.

 

(d)          Neither
the execution and delivery of this Agreement by such Member, nor the consummation of the transactions contemplated hereby, conflict
with or contravene the provisions of its organizational documents or any agreement or instrument by which it is or its

 

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properties are bound, or any law, rule, regulation,
order or decree to which it or its properties are subject.

 

(e)          Such
Member acknowledges that (i) the Interest issued to such Member has not been registered under the Securities Act of 1933, as amended,
or state securities laws, (ii) the Interest, therefore, cannot be resold unless registered under the Securities Act and applicable
state securities laws, or unless an exemption from registration is available, (iii) there is no public market for the Interest,
and (iv) neither the Venture nor any other Member has any obligation or intention to register the Interest for resale under the
Securities Act of 1933, as amended, or any state securities laws or to take any action that would make available any exemption
from the registration requirements of such laws.

 

(f)          Such
Member hereby acknowledges that because of the restrictions on transfer or assignment of the Interest which are set forth in this
Agreement, such Member may have to bear the economic risk of its investment in the Venture for an indefinite period of time.

 

(g)          On
behalf of itself and each assignee or transferee of it, such Member is acquiring its Interest for its own account for investment
and not with a view to the distribution or resale thereof, or with the present intention of distributing or reselling such Interest,
and that it will not transfer or attempt to transfer its Interest in violation of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any other applicable federal, state or local securities law. Nothing herein shall be construed
to create or impose on the Venture or any Member an obligation to register any transfer of any Interest or any portion thereof.

 

(h)          As
of the date hereof and at all times during the term of this Agreement: (i) the Capital Contributions contributed by such Member
to the Venture were not and are not directly or indirectly derived from activities that may contravene applicable federal, state
or international laws and regulations, including anti-money laundering laws and regulations; (ii) to the best of its knowledge,
none of (A) such Member, (B) any person Controlling or Controlled by such Member, (C) if such Member is a privately held entity,
any person having a beneficial interest in such Member, or (D) any person for whom such Member is acting as agent or nominee in
connection with this investment, is a country, territory, individual or entity named on an OFAC list, nor is a person or entity
prohibited under the OFAC Programs. As used herein, “OFAC Programs” mean the programs administered by U.S. Treasury
Department’s Office of Foreign Assets Control that prohibit dealings with individuals or entities in certain countries regardless
of whether such individuals or entities appear on the OFAC lists.

 

(i)          Such
Member is not a “benefit plan investor” (within the meaning of the U.S. Department of Labor Regulation § 2510.3-101).

 

(j)          As
of the date hereof and at all times during the term of this Agreement, each Member will be a U.S. person for U.S. federal income
tax purposes and not a foreign person within the meaning of Section 1445 of the Code and the regulations thereunder.

 

13.02.     Representations
and Warranties by the TFG Member. In addition to the representations and warranties made elsewhere in this Agreement (including
Section 13.01), the TFG Member hereby represents and warrants to the NorthStar Member as of the date hereof that:

 

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(a)          Purchase
Agreements. The TFG Member has provided the NorthStar Member with true and correct copies of each Purchase Agreement (other
than with respect to the Pinebrook Facility), including all amendments thereto, and neither the TFG Member, nor any of its Affiliates
has entered into any other agreement with respect to any of the Initial Facilities.

 

(b)          Capitalization
of the TFG Member. The TFG Member satisfies the Control and Ownership Requirement. The TFG Member shall, on the date hereof,
disclose to NorthStar Member in writing all of the material terms and conditions relating to the organizational structure and governance
of, and equity interests held in, the TFG Member, including providing NorthStar Member with a copy of the operating agreement of
(and all side letters with respect to) TFG Member and the direct or indirect entities holding interests therein.

 

13.03.     Representations
and Warranties by the NorthStar Member. In addition to the representations and warranties made elsewhere in this Agreement
(including Section 13.01), the NorthStar Member hereby represents and warrants to the TFG Member as of the date hereof that
the NorthStar Member has provided the TFG Member with true and correct copies of the Purchase Agreement with respect to the Pinebrook
Facility, including all amendments thereto, and neither the NorthStar Member, nor any of its Affiliates has entered into any other
agreement with respect to the Pinebrook Facility.

 

ARTICLE 14.

MISCELLANEOUS PROVISIONS

 

14.01.      Compliance
with LLC Act. Each Member agrees not to take any action or fail to take any action which, considered alone or in the aggregate
with other actions or events, would result in the termination of the Venture under the LLC Act. No Member shall file for, pursue
or seek any partition of any Venture Assets.

 

14.02.      Additional
Actions and Documents. Each of the Members hereby agrees to take or cause to be taken such further actions, to execute, acknowledge,
deliver and file or cause to be executed, acknowledged, delivered and filed such further documents and instruments, and to use
commercially reasonable efforts to obtain such consents, as may be necessary or as may be reasonably requested in order to fully
effectuate the purposes, terms and conditions of this Agreement.

 

14.03.      Notices.
All notices, demands, requests, or other communications which may be or are required to be given, served, delivered, or sent by
any party to any other party pursuant to this Agreement shall be in writing and shall be (a) mailed by first-class, registered
or certified mail, return receipt requested, postage prepaid, (b) sent by nationally recognized overnight courier, (c) delivered
by hand delivery (including delivery by nationally recognized courier), or (d) sent by emailed Adobe® portable document format
(.pdf) document (with a copy contemporaneously delivered by one of the other permitted methods of delivery), addressed as follows:

 

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	To TFG Member	c/o The Freshwater Group, Inc.
    
	 	2020 West Rudasill Road
	 	Tucson, Arizona 85704 
	 	Attention:  Carl Mittendorff
	 	Email:  carl@thefreshwatergroup.com
    
	 	 
	with a copy to:	Cox, Castle & Nicholson LLP
	 	2049 Century Park East, 28th Floor
	 	Los Angeles, CA 90067
	 	Attention:  Kevin S. Kinigstein
	 	Email:  kkinigstein@coxcastle.com 
	 	 
	To NorthStar Member:	c/o NorthStar Realty Healthcare
	 	2 Bethesda Metro Center, Suite 1300
	 	Bethesda, Maryland 20814
	 	Attention:  Doug Bath 
	 	Email:  dbath@nrfc.com 
	 	 
	with a copy to:	NorthStar Realty Finance Corp.
	 	399 Park Avenue
	 	New York, New York 10022
	 	Attention:  Ronald J. Lieberman 
	 	Email:  rlieberman@nrfc.com 
	 	 
	and a copy to:	Fried, Frank, Harris, Shriver & Jacobson LLP
	 	One New York Plaza
	 	New York, New York 10004
	 	Attention:  Harry R. Silvera, Esq.
	 	Email:  harry.silvera@friedfrank.com
    

 

Each party may designate by notice in writing
a new address to which any notice, demand, request or communication may thereafter be so given, served, delivered or sent. Each
notice, demand, request, or communication which shall be mailed, sent, delivered or transmitted in the manner described above shall
be deemed, given, served or delivered at such time as it is received by the addressee upon presentation (or, if received on a day
that is not a Business Day or after 5:00 p.m. on a Business Day, on the next succeeding Business Day) or at such times as delivery
is attempted in the case of any change in address as to which notice was not given to the other party as required hereunder or
in the case of a refusal to accept delivery.

 

14.04.         Expenses.
In the event of any dispute which results in legal proceedings between the Members, all reasonable legal fees, court costs and
disbursements incurred in connection with such action by the party prevailing in such legal proceedings after a final nonappealable
judgment of a court of competent jurisdiction has been entered shall be paid by the party not prevailing in such action within
10 days after demand therefor.

 

14.05.         Exculpation.
Except as otherwise expressly provided in this Agreement, the NorthStar Member and the TFG Member acknowledge and agree that the
obligations of each

 

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Member under this Agreement or any other document
or instrument executed pursuant to this Agreement are the respective obligations of such Member only, and not any direct or indirect
member, manager, partner, shareholder, director, officer, employee or agent of such Member or any of such Member’s Affiliates,
or of the Person executing this Agreement on behalf of such Member or any of such Person’s Affiliates (each, an “Exculpated
Party”), and each Member shall not bring any action against any such Exculpated Party in respect of the obligations of
the other Members under this Agreement.

 

14.06.         Time
of the Essence. Except as otherwise expressly provided in this Agreement, time shall be of the essence with respect to all
time periods set forth in this Agreement.

 

14.07.         Ownership
of Venture Assets. The Interest of each Member shall be personal property for all purposes. All real and other property owned
by the Venture shall be deemed owned by the Venture as Venture property. No Member, individually, shall have any direct ownership
of such property and title to such property shall be held in the name of the Venture or the Subsidiaries, as applicable.

 

14.08.         Status
Reports. Recognizing that each Member may find it necessary from time to time to establish to third parties, such as accountants,
banks, mortgages, investors, prospective transferees of its Interest, or the like, the then current status of performance of the
Venture and the Interests, each Member shall, within a reasonable period of time (but no more than fifteen (15) Business Days)
following the written request of either Member (provided, that any such written request is not made more than once in any
12-month period), furnish a written statement on the status of the following: (a) that this Agreement is unmodified (or if there
have been modifications, stating the modifications) and, to the certifying Member’s knowledge, is in full force and effect;
(b) stating whether or not to its knowledge an Event of Default has occurred; (c) if the Administrative Member is the certifying
Member, stating, to the best knowledge of the Administrative Member, the Capital Contributions, Outstanding Capital Contributions
and Percentage Interests of the Members; and (d) to the best knowledge of the party making such statement, with respect to any
other matters as may be reasonably requested by the other Member. Such statement may be relied upon (and shall state that it may
be relied upon) by the other Member, but no such statement shall operate as a waiver as to any default or other matter as to which
the Member executing it did not have actual knowledge.

 

14.09.         Survival.
It is the express intention and agreement of the Members that all covenants, agreements, statements, representations, warranties
and indemnities made in this Agreement shall survive the execution and delivery of this Agreement.

 

14.10.         Waivers.
Neither the waiver by the Venture or either Member of a breach of or a default under any of the provisions of this Agreement, nor
the failure of the Venture or either Member, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, remedy or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default
of a similar nature, or as a waiver of any such provisions, rights, remedies or privileges hereunder. Each Member hereby waives
the right to trial by jury in connection with any legal proceeding between the Members with respect to this Agreement or the Venture.

 

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14.11.         Exercise
of Rights. No failure or delay on the part of either Member or the Venture in exercising any right, power or privilege hereunder
and no course of dealing between the Members or between a Member and the Venture shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. Except as otherwise provided in this Agreement, the rights and remedies herein expressly
provided are cumulative and not exclusive of any other rights or remedies which either Member or the Venture would otherwise have
at law or in equity or otherwise.

 

14.12.         Binding
Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon and shall inure to the
benefit of each of the Members and their respective heirs, devises, executors, administrators, legal representatives, successors
and assigns.

 

14.13.         Limitation
on Benefits of this Agreement. Except for any Indemnitee, to the extent that such Indemnitee is expressly granted certain rights
of defense and indemnification in this Agreement, this Agreement shall not confer any rights or remedies upon any party other than
the Members (and their respective successors and assigns as permitted hereunder) and the Venture.

 

14.14.         Severability.
The invalidity of any one or more provisions hereof or of any other agreement or instrument given pursuant to or in connection
with this Agreement shall not affect the remaining portions of this Agreement or any such other agreement or instrument or any
part thereof, all of which are inserted conditionally on their being held valid in law; and in the event that one or more of the
provisions contained herein or therein should be invalid, or should operate to render this Agreement or any such other agreement
or instrument invalid, this Agreement and such other agreements and instruments shall be construed as if such invalid provisions
had not been inserted.

 

14.15.         Amendment
Procedure. This Agreement may only be modified or amended by the unanimous written consent of the Members (which may be evidenced
by their execution and delivery of the applicable amendment or other modification).

 

14.16.         Entire
Agreement. This Agreement and any other agreements executed contemporaneously herewith contain the entire agreement between
the Members with respect to the matters contemplated herein, and supersede all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein and therein.

 

14.17.         Headings.
Article, Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not
be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or
scope of any of the provisions hereof.

 

14.18.         Governing
Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of Delaware (but not including the choice of law rules thereof).

 

14.19.         Execution
in Counterparts. To facilitate execution, this Agreement may be executed in as many counterparts as may be required; and it
shall not be necessary that the

 

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signatures of, or on behalf of, each party,
or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the
signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more
of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof
of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf
of, all of the parties hereto. The exchange of counterparts of this Agreement among the parties by means of facsimile transmission
or by electronic email transmission (including via .pdf files) which shall contain authentic reproductions shall constitute a valid
exchange of this Agreement and shall be binding upon the parties hereto.

 

14.20.     Consents
and Approvals. No consent or approval requested of either Member shall be effective unless such consent or approval shall be
delivered by such Member in a written instrument in advance of the action with respect to which such consent or approval was requested.

 

14.21.     Indemnification.
(a) The Venture shall indemnify and hold harmless each of the Members and their respective Affiliates (each, an “Indemnitee”)
including, in the case of the TFG Member in its capacity as Administrative Member, from and against any and all claims, demands,
losses, damages, liabilities, lawsuits and other proceedings, judgments, awards, costs and expenses (including reasonable attorneys’
fees, disbursements and court costs) to the extent the same arise directly or indirectly from the ownership, operation, use, maintenance
or management of the Venture Assets or by reason of its acts or omissions which are for or on behalf of the Venture and taken in
accordance, or believed in good faith to be in accordance, with such Member’s responsibilities and obligations under this
Agreement; provided, that the foregoing indemnity shall not apply to the extent the same arise out of or result from the
criminal conduct, fraud, gross negligence or willful misconduct of, or material breach of the terms of this Agreement by, such
Indemnitee.

 

(a)          Except
in the case of criminal conduct, fraud, gross negligence or willful misconduct of, or material breach of the terms of this Agreement
by, a Member, neither Member shall be liable to the other Members or the Venture for (i) any act or omission performed or omitted
in good faith, (ii) such Member’s failure or refusal to perform any act, except those required pursuant to the terms of this
Agreement, or (iii) the negligence, dishonesty or bad faith of any agent, consultant or broker of the Venture selected, engaged
or retained in good faith and with reasonable prudence.

 

(b)          The
Members shall be entitled to rely on the advice of counsel or public accountants experienced in the matter at issue and any act
or omission of a Member pursuant to such advice shall in no event subject such Member to liability to the Venture or any other
Member.

 

(c)          Without
limiting the foregoing provisions of this Section 14.21, in any action brought against either Member pursuant to the LLC
Act, the Member named as a defendant in such suit shall be entitled to be indemnified to the fullest extent permitted under Section
18-108 of the LLC Act or any other applicable law (the “Indemnity Laws”) and, to the fullest extent

 

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permitted under the Indemnity Laws, the Venture shall advance
any expenses incurred by such defending Member in defending such action, subject to repayment.

 

14.22.     Business
Day Extension. In the event any time period or any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and
performance hereunder may be made on such Business Day with the same force and effect as if made on such other day.

 

14.23.     Consent
to Jurisdiction. Any legal suit, action or proceeding against either Member arising out of or relating to this Agreement shall
be brought exclusively in the courts of the State of New York, County of New York or in the United States federal courts sitting
in the Southern District of New York, and each Member hereby accepts for itself, irrevocably and unconditionally, the exclusive
jurisdiction of the aforesaid courts with respect thereto. Each Member hereby irrevocably consents to the service of process out
of any of the aforesaid courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Member at such Member’s address for notices set forth in Section 14.03. Each Member
hereby irrevocably waives any objection that such Member may now or hereafter have to the laying of venue of any such suit, action
or proceeding in any such court and hereby irrevocably waives and agrees not to plead or claim in any such court that any such
suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing contained in this Section
14.23 shall affect the right of either Member to serve process in any other manner permitted by applicable law.

 

14.24.      No
Presumption. This Agreement shall be construed without regard to any presumption against the party causing this Agreement to
be drafted.

 

14.25.     Press
Releases; Confidentiality. (a) No Member shall issue any press releases or other announcements regarding the transactions contemplated
hereby unless the Members first shall reasonably approve such release or announcement, in writing.

 

(a)          Each
of the Members represents and warrants that prior to the date hereof it and its agents have not, except with the consent of the
other Member, disclosed any of the terms, conditions, obligations or matters contained in or relating to this Agreement and the
transactions contemplated herein other than to their respective investors and its and their respective counsel, accountants and
other advisors. Each of the Members covenants and agrees (and agrees to cause its employees, agents, or Affiliates) not to disclose
the terms of this Agreement or any other information relating to this Agreement and the transactions contemplated hereunder which
is of a confidential or proprietary nature provided by any Member to any other Member (collectively, the “Confidential
Information”), except (i) to any lender providing financing to the Venture, subject to an appropriate confidentiality
undertaking being received from such Person, (ii) to such Member’s lenders, accountants and attorneys, subject to an appropriate
confidentiality undertaking being received from such Persons, (iii) pursuant to a subpoena or order issued by a court, arbitrator
or governmental body, agency or official binding upon such Member, (iv) to one or more of its potential investors (subject to confidentiality
undertakings by such potential investors), (v) pursuant to any applicable laws or governmental requirements (e.g., securities
law requirements), or the requirements of any securities exchange, in either case that are binding

 

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upon such Member or its direct or indirect
constituent investors, (vi) to the extent any such Confidential Information comes into the public domain other than as a result
of disclosure by any of the Members or (vii) with the prior written consent of the other Member. In the event that any Member shall
receive a request to disclose any Confidential Information under a subpoena or order, such Member shall (x) promptly notify the
other Member and consult with such other Member regarding the advisability of taking steps to resist or narrow such request, (y)
if disclosure is required or deemed advisable, furnish only such portion of the Confidential Information as such Member is advised
by counsel is legally required or advisable to be disclosed and (z) if disclosure is required or deemed advisable, reasonably cooperate
with the NorthStar Member (at no cost to such Member) in any attempt it may make to obtain an order or other assurance that confidential
treatment will be accorded such Confidential Information, as the case may be, that is disclosed.

 

(b)          Notwithstanding
anything in the foregoing or anything else contained in this Agreement to the contrary, each Member (and each employee, representative,
or other agent thereof) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure
of the Member’s investment in the Venture and the ownership of an Interest (including the tax treatment and tax structure
of any Venture transactions) and all materials of any kind (including opinions or other tax analyses) that are provided to the
Member relating to such tax treatment and tax structure. For purposes of this Section 14.25(c), “tax structure”
means any facts relevant to understanding the purported or claimed federal income tax treatment of a Member’s investment
in the Venture and the ownership of an Interest (including the tax treatment and tax structure of any Venture transactions).

 

14.26.     Cooperation
of Administrative Member. In the event of any proposed sale, assignment or other transfer of all or a portion of the Facilities
or a transfer of an interest in any Member or a Transfer of any Member’s Interest in accordance with the terms hereof, the
Administrative Member shall, upon reasonable notice, (a) make available to the prospective transferee at reasonable hours all books
of account, correspondence, leases, and all other information related to the Venture, each Subsidiary and each Facility and to
the management thereof at the request and expense of the requesting Member, or copies thereof; and (b) cause the management personnel
involved directly or indirectly in the affairs of the Venture to cooperate fully with the requesting Member and its proposed transferee
or designees of either of them and furnish information in their possession as reasonably requested by such persons as to the status
of the affairs of the Venture.

 

14.27.     Subsidiaries.
The Venture shall not take any action or fail to take any action that would cause any of the Subsidiaries to violate any of the
provisions of their respective operating agreements.

 

14.28.     Brokerage.
Each Member represents and warrants to the other Member that it has not dealt with any broker in connection with the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby. The NorthStar Member shall indemnify
the TFG Member and the Venture from any claims asserted against the TFG Member or the Venture by reason of any party claiming to
have dealt with the NorthStar Member. The TFG Member shall indemnify the NorthStar Member and the Venture from any claims asserted

 

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against the NorthStar Member or the Venture
by reason of any party claiming to have dealt with the TFG Member.

 

14.29.     Usury
Savings. With respect to any Priority Contribution, if the fulfillment of any provision hereof shall involve transcending the
limit of validity prescribed by applicable usury law, the obligation to be fulfilled shall be reduced to the limit of such validity,
and if from any such circumstance, the Venture shall have ever received interest or anything which might be deemed interest under
applicable law which would exceed the higher of the maximum interest rate allowed by applicable United States federal, Delaware
or New York law (each as amended from time to time and as in effect on the date for which a determination of interest accrued hereunder
is made), such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account
of the Priority Contribution and not to the payment of interest.

 

ARTICLE 15.

BUY-SELL

 

15.01.     Buy/Sell
Arrangements. (a) At any time following (i) the Buy/Sell Lockout End Date with respect to the NorthStar Member or (ii) the
occurrence (and continuation) of a TFG Buy/Sell Trigger Event after the Buy/Sell Lockout End Date with respect to the TFG Member,
such Member (the “Offeror Member”) may tender, subject to Section 15.01(f), to the other Member (the
“Offeree Member”) a good faith, written offer (a “Buy/Sell Offer Notice”) in which it offers
either to sell all of the Interests of the Offeror Member to the Offeree Member or to purchase from the Offeree Member all of the
Interests of the Offeree Member; provided, that any such Buy/Sell Offer Notice shall be accompanied by the simultaneous
delivery to a national title insurance company which shall be designated by the Offeror Member in the Buy/Sell Notice (the “Buy/Sell
Escrow Agent”) a deposit (the “Buy/Sell Deposit”) equal to three percent (3%) of whichever of the
NorthStar Interest Amount or the TFG Interest Amount corresponds to the Offeror Member (i.e., three percent (3%) of the amount
the Offeror Member would have to pay if the Offeror Member turns out to be the Purchasing Buy/Sell Member). The Buy/Sell Offer
Notice shall provide a price (the “Buy/Sell Price”) for which the Offeror Member would be willing to sell the
Facilities, and the calculation of the amount that would be distributed to (x) the NorthStar Member (the “NorthStar
Interest Amount”), and (y) the TFG Member (the “TFG Interest Amount”), if the Facilities were
sold for the Buy/Sell Price on the date which the Buy/Sell Offer Notice is delivered, all customary transaction costs relating
to such a sale were paid and all other liabilities of the Venture were discharged, the Venture was liquidated and all remaining
assets of the Venture were distributed in accordance with the provisions of Section 11.03; provided, that in
computing the NorthStar Interest Amount and the TFG Interest Amount, there shall be no deduction for any deemed transfer, stamp
or similar taxes or the establishment of any reserves under Section 11.03(b).

 

(a)          The
Offeree Member shall give written notice (an “Initial Buy/Sell Response Notice”) within thirty (30) days after
the receipt of the Buy/Sell Offer Notice (the “Initial Buy/Sell Acceptance Period”) that the Offeree Member
will either (i) sell its entire Interest to the Offeror Member for an amount equal to the NorthStar Interest Amount or the TFG
Interest Amount, as applicable or (ii) purchase the entire Interest of the Offeror Member for an amount equal to the NorthStar
Interest Amount or the TFG Interest Amount, as applicable (either such

 

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transaction, a “Buy/Sell Transaction”).
Failure to respond within the thirty (30) day period set forth above shall be conclusively deemed to be an election by the Offeree
Member to sell its entire Interest.

 

(i)          If
the Offeree Member elects in the Initial Buy/Sell Response Notice to purchase the entire Interest of the Offeror Member, the Offeree
Member shall, simultaneously with the delivery of the Initial Buy/Sell Response Notice, deliver to the Buy/Sell Escrow Agent a
Buy/Sell Deposit equal to one percent (1.0%) of whichever of the NorthStar Interest Amount or the TFG Interest Amount is being
paid, which amount shall be held in escrow pursuant to an escrow agreement reasonably satisfactory to each of the Members. In such
event, the Buy/Sell Deposit originally delivered by the Offeror Member shall be simultaneously returned by the Buy/Sell Escrow
Agent to the Offeror Member.

 

(ii)         If
the Offeree Member has delivered an Initial Buy/Sell Response Notice to purchase the entire Interest of the Offeror Member, within
a period (the “Second Buy/Sell Acceptance Period”) of ninety (90) days following the delivery of the Initial
Buy/Sell Response Notice, the Offeree Member shall have the right to deliver to the Offeror Member a notice (the “Second
Buy/Sell Acceptance Notice”) reaffirming its desire to purchase the entire Interest of the Offeror Member; provided,
that simultaneously with the giving of the Second Buy/Sell Acceptance Notice such Offeree Member shall deliver to deliver to the
Buy/Sell Escrow Agent an additional Buy/Sell Deposit equal to two percent (2.0%) of whichever of the NorthStar Interest Amount
or the TFG Interest Amount is being paid, which shall result in an aggregate Buy/Sell Deposit of three percent (3.0%) of whichever
of the NorthStar Interest Amount or the TFG Interest Amount is being paid and the entire amount of such Buy/Sell Deposit shall
be non-refundable (except in the event that the Offeror Member fails to deliver title to its Interest (other than due to the default
of the Offeree Member), in which case such Buy/Sell Deposit shall be returned to the Offeree Member). If the Offeree Member does
not timely deliver the Second Buy/Sell Acceptance Notice to the Offeror Member together with the additional Buy/Sell Deposit on
or before the expiration of the Second Buy/Sell Acceptance Period (time being of the essence), the Offeree Member shall be deemed
to have elected to have elected to be the Selling Buy/Sell Member and any Buy/Sell Deposit made by the Offeree Member shall be
returned to the Offeree Member.

 

(iii)        Failure
of the Offeror Member to timely deliver the Buy/Sell Deposit as provided in Section 15.01(a) shall result in an invalid
Buy/Sell Offer Notice which is of no force or effect. Failure of the Offeree Member to timely deliver the Buy/Sell Deposit as provided
in Section 15.01(b)(i) and 15.01(b)(ii) shall result in the Offeree Member being deemed to have elected to be the
Selling Buy/Sell Member.

 

(iv)        The
Buy/Sell Offer Notice and the Buy/Sell Response Notice (or deemed response) shall constitute a binding agreement of purchase and
sale between the Offeree Member and the Offeror Member in accordance with the terms hereof.

 

(b)          The
closing of the Buy/Sell Transaction (the “Buy/Sell Closing”) shall occur on a date (the “Buy/Sell Closing
Date”) and at a place designated by the purchasing Member (or its designee; provided, that if the purchasing Member
is the TFG Member, such designee shall not be the Manager or any subsidiary of the Manager) (as applicable, the “Purchasing
Buy/Sell 

 

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Member”) which is not more than sixty (60)
days after the expiration of (A) if the Offeree Member elects in the Initial Buy/Sell Response Notice to be the Selling Buy/Sell
Member, the Initial Buy/Sell Election Period or (B) otherwise, the Second Buy/Sell Election Period (such Buy/Sell Closing Date
to be determined by the Purchasing Buy/Sell Member on no less than fifteen (15) days prior notice to the Selling Buy/Sell Member
(subject to an adjournment of the closing as provided in clause (vii) below). On the Buy/Sell Closing Date:

 

(i)          the
Purchasing Buy/Sell Member shall take title to the Interests of the selling Members (collectively, the “Selling Buy/Sell
Member”) free and clear of all liens and encumbrances, and, indirectly, the Facility in its “as is” physical
condition;

 

(ii)         the
Purchasing Buy/Sell Member shall deliver to the Selling Buy/Sell Member, the NorthStar Interest Amount or the TFG Interest Amount,
as applicable, less the Buy/Sell Deposit by wire transfer in immediately available funds, and the Buy/Sell Deposit shall be transferred
from the Buy/Sell Escrow Agent to the Selling Buy/Sell Member;

 

(iii)        the
Selling Buy/Sell Member shall pay all transfer, stamp or similar taxes due in connection with the conveyance of the Interest of
the Selling Buy/Sell Member, as the case may be, or, if no such taxes are due in connection with such conveyance but would otherwise
have been due in connection with a sale of all of the Facilities, then there shall be deducted from the NorthStar Interest Amount
or the TFG Interest Amount, as applicable, an amount equal to the respective share (based on its respective Percentage Interest)
of the Selling Buy/Sell Member of such transfer, stamp or similar taxes that would have been due in connection with any such sale
of the Facilities;

 

(iv)        the
Selling Buy/Sell Member shall deliver to the Purchasing Buy/Sell Member appropriate assignment documents assigning its Interests,
without covenants, representations or warranties of any kind (other than that the Selling Buy/Sell Member’s Interest is owned
free and clear of all liens and encumbrances) to the Purchasing Buy/Sell Member or its designee(s), which conveyance shall be (except
as provided in this clause (iv)(A)) without any representation or warranty by, or recourse against, the Selling Buy/Sell
Member;

 

(v)         to
the extent not otherwise taken into account in computing the NorthStar Interest Amount or the TFG Interest Amount, as applicable,
Net Ordinary Cash Flow and Net Extraordinary Cash Flow hereunder to the Buy/Sell Closing Date shall be distributed in accordance
with the provisions of Section 6.05 and there shall be distributed to the Selling Buy/Sell Member its Percentage Interest
of Reserves (if any);

 

(vi)        the
NorthStar Interest Amount or the TFG Interest Amount, as applicable, shall (A) be increased by the aggregate amount of all additional
Capital Contributions made by the Selling Buy/Sell Member on account of the Interests of the Selling Buy/Sell Member in the period
between the date of the Offer Notice and the Sale Closing Date and (B) be decreased by any Net Extraordinary Cash Flow distributed
to the Selling Buy/Sell Member on account of the Interests of the Selling Buy/Sell Member during such period;

 

(vii)       all
Priority Contributions outstanding as of the Buy/Sell Closing Date, together with return then accrued and unpaid thereon, shall
be repaid to the applicable

 

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Contributing Member, whether such Priority Contributions
were made prior to or after the date of the Buy/Sell Notice (it being acknowledged that any Priority Contributions made by or
to the Selling Buy/Sell Member prior to the date of the Buy/Sell Notice, together with accrued and unpaid return through such
date, shall be taken into account in computing the NorthStar Interest Amount and the TFG Interest Amount, as applicable);

 

(viii)      without
duplication of any other adjustment item, all items of revenue and expense of the Facility or the Venture, as applicable (including
the items which are customarily apportioned in the sale of membership interests comparable to the Interests), shall be apportioned
between the Selling Buy/Sell Member, and the Purchasing Buy/Sell Member for the current calendar period as of 11:59 p.m. on
the day preceding the Buy/Sell Closing Date in accordance with the customs and practices usual in transactions involving properties
comparable to the Facility or Venture interests comparable to the Interests; and

 

(ix)         the
Selling Buy/Sell Member and the Purchasing Buy/Sell Member shall deliver such additional instruments (without representation or
warranty by or material liability to the Venture or the Selling Buy/Sell Member) which are customarily delivered by buyers or sellers
of properties comparable to the Interests.

 

(c)          (i)          If
(x) the Selling Buy/Sell Member shall default in its obligation to close the sale of its Interest contemplated by this Section
15.01 or (y) the Selling Buy/Sell Member or its Affiliate that is a member of the Operating Venture shall default in its obligation
to close the sale of its Interest (as defined in the Operating Venture Agreement) contemplated by Section 15.01 of the Operating
Venture Agreement, then (A) the Purchasing Buy/Sell Member may seek specific performance to cause the Selling Buy/Sell Member to
sell its Interest for the NorthStar Interest Amount or the TFG Interest Amount, as applicable, with respect to which action the
provisions of Section 15.04(b) shall apply, or (B) if the Purchasing Buy/Sell Member does not seek specific performance
or does not receive specific performance (I) the Buy/Sell Escrow Agent shall immediately return the Buy/Sell Deposit, if any, to
the Purchasing Buy/Sell Member, (II) notwithstanding anything to the contrary contained in this Agreement, the Purchasing Buy/Sell
Member shall have the unilateral right to sell the Facilities without the consent of the Selling Buy/Sell Member during the following
twelve (12) month period, and (III) for a period of twelve (12) months after such default by the Selling Buy/Sell Member under
this Section 15.01, the Selling Buy/Sell Member and its Affiliated Members shall not be permitted to invoke the procedures
set forth in Section 10.01 or this Section 15.01.

 

(i)          If
(x) the Purchasing Buy/Sell Member shall default in its obligation to purchase the Interest of the Selling Buy/Sell Member contemplated
by this Section 15.01 or (y) the Purchasing Buy/Sell Member or its Affiliate that is a member of the Operating Venture
shall default in its obligation to close the purchase of the Interest of the Selling Buy/Sell Member (as each such term is defined
in the Operating Venture Agreement) contemplated by Section 15.01 of the Operating Venture Agreement, then the Selling Buy/Sell
Member may either (A) seek specific performance against the Purchasing Buy/Sell Member, with respect to which action the provisions
of Section 15.04(b) shall apply, or (B) if the Selling Buy/Sell Member does not seek specific performance or does not receive
specific performance (I) retain for itself the Buy/Sell Deposit held by the Buy/Sell Escrow Agent as liquidated damages and (II) notwithstanding
anything to the contrary contained in this Agreement, the Selling Buy/Sell

 

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Member shall have the unilateral right to sell
the Facilities without the consent of the Purchasing Buy/Sell Member during the following twelve (12) month period. During the
twelve (12) month period set forth in the preceding sentence, the Purchasing Buy/Sell Member shall not be permitted to invoke the
procedures set forth in Section 10.01 or this Section 15.01.

 

(ii)         A
party may exercise any one or more of the foregoing remedies in clause (i) or clause (ii), but such remedies
shall collectively be the sole remedies for default under this Section 15.01(d).

 

(d)          Each
Member shall reasonably cooperate with the other Members and the transferee in consummating the Buy/Sell Transaction contemplated
by this Section 15.01, including by executing such additional documents as may reasonably be required in connection therewith
(but at no additional cost or liability (other than to a de minimis extent) to the cooperating Member).

 

(e)          Notwithstanding
anything to the contrary contained in Article 10 or this Article 15: (i) once the procedures outlined in
this Article 15 are initiated, the procedures under Article 10 shall not be initiated until all of the rights under
this Article 15 shall have been exercised, exhausted or extinguished relating to such first initiation; (ii) once the procedures
outlined in Article 10 have been initiated, the procedures under this Article 15 shall not be initiated until all
of the rights under Article 10 shall have been exercised, exhausted or extinguished; and (iii) any of the procedures or
elections followed or made by a Member under this Article 15 (including with respect to the delivery of a Buy/Sell Offer
Notice, an Initial Buy/Sell Response Notice or a an Second Buy/Sell Response Notice) shall be simultaneously made with or immediately
followed by a like procedure or election by such Member or its Affiliate who is a member of the Owner Venture pursuant to and in
accordance with the terms of Article 15 of the Owner Venture Agreement, in order for such procedure or election to be effective
hereunder.

 

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IN WITNESS WHEREOF, the
undersigned have caused this Agreement to be duly executed on their behalf as of the day and year first above written.

 

	TFG MEMBER:	Watermark Aqua Investments, LLC, a Delaware limited liability company
	 	 	 
	 	By:	/s/ David Barnes	 
	 	 	Name:  David Barnes
	 	 	Title:    Managing Member

 

	NORTHSTAR MEMBER:	Aqua Operations NT-HCI, LLC, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Daniel R. Gilbert	 
	 	 	Name:  Daniel R. Gilbert
	 	 	Title:    Chief Executive Officer 

 

Signature Page to Limited Liability Company
Agreement of Watermark Aqua Operator, LLC

 

    	 

    	

    

 

TFG RECOURSE PARTY

 

Solely for purposes of 6.05(d):

 

	/s/ David J. Freshwater 	 
	David J. Freshwater, an individual 
	 	 
	The Diana and David Freshwater Living Trust
	 	 
	/s/ David J. Freshwater 	 
	David J. Freshwater, Co-Trustee of The Diana And David Freshwater Living Trust
	 	 
	/s/ David Barnes	 
	David Barnes, an individual 
	 	 
	The Barnes Family Revocable Trust
	 	 
	/s/ David Barnes	 
	David N. Barnes, Co-Trustee of The Barnes Family Revocable Trust

 

Signature Page to Limited Liability Company
Agreement of Watermark Aqua Operator, LLCExhibit 10.2 

 

EXECUTION VERSION

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND
SALE AGREEMENT, dated as of the Agreement Date, is between Buyer and Seller, and relates to the purchase and sale of the Loan
and the other Assigned Rights. In consideration of the mutual agreements contained herein, the Parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION 

 

Section 1.1           Definitions.
The following terms shall have the corresponding meanings in this Agreement:

 

Parties

 

“Buyer”:
Aqua Property NT-HCI, LLC, a Delaware limited liability company.

 

“Seller”:
Wells Fargo Bank, National Association

 

Loan Information

 

“Borrower”:
Pinebrook LLC (f/k/a MVSL Wolfpen LLC), an Ohio limited liability company.

 

“Loan”: Collectively,
the loans made by Seller to Borrower on or about August 23, 2007, in the original principal amount of $17,905,000.

 

“Real Property Collateral”:
That certain property commonly known as the Pinebrook Retirement Living Center in Milford, Ohio, as more particularly described
in Exhibit A to the Assignment of Security Instrument.

 

Purchase Price

 

“Purchase
Price”: $15,600,000. Revenue , accrued expenses and prepaid expenses with respect to the Real Property Collateral, and
cash on deposit in the Independent Account, will be prorated as of the Closing Date (it being agreed that excess cash flow on deposit
after the above described prorations that is attributable to the Real Property Collateral prior to the Closing Date shall belong
to Seller). Security Deposits from residents and future residents at the Real Property Collateral, to the extent in the actual
possession of Borrower and/or Seller, shall be delivered to Buyer on the Closing Date. All prorations shall be final.

 

Key Dates

 

“Agreement Date”: November 19,
2013.

 

“Closing Date”:
The date on which the Closing occurs.

 

“Commitment Date”:
The date on which Buyer delivers the notice that it has elected to proceed to Close the Transaction as set forth in Section
2.3.

 

    	 

    	 

    

 

“Review Period”:
The period beginning on the Agreement Date and ending on the earlier to occur of: (a) the later to occur of: (i) December 18, 2013,
and (ii) the date that is five (5) Business Days following the date that Buyer first receives notice of an Encumbrance in a writing
or otherwise first has Actual Knowledge thereof; and (b) the Commitment Date.

 

“Scheduled
Closing Date”: Either: (a) without limiting any of Buyer’s rights hereunder, the later to occur of: (i) the date
that is the earlier of: (A) December 23, 2013; and (B) 15 days after the Commitment Date, (ii) the date that is five (5) Business
Days following the date that either Buyer or Seller first receives notice in a writing of any breach or inaccuracy of any representation
or warranty made herein by the other Party, or otherwise first has Buyer’s Actual Knowledge or Seller’s Actual Knowledge
(as applicable) thereof, or (iii) the date that is five (5) Business Days following the date of Buyer’s Actual Knowledge
of any Material Casualty or Material Condemnation occurring after the Commitment Date, or (b) such other date agreed upon by the
Parties.

 

Other Definitions

 

“Affiliate”:
With respect to a Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled
by or is under common control with that Person. The term “control” shall mean the direct or indirect possession of
the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. The terms “controlling” and “controlled” shall have correlative meanings.

 

“Agreement”:
This Loan Purchase and Sale Agreement.

 

“Applicable Law”:
A law, statute, ordinance, order, decree, directive, rule or regulation of a Governmental Authority applicable to a matter or Person.

 

“Assigned Rights”:
All of Seller's right, title and interest in, to and under the Loan, the Loan Documents, the Collateral and all related proceeds,
servicing rights and Claims, but excluding the Retained Rights.

 

“Assignment of Loan
Documents”: An Omnibus Assignment and Assumption of Loan Documents, in substantially the form of Exhibit B-1.

 

“Assignment of Security
Instrument”: One or more Assignments of Security Instrument, in substantially the form of Exhibit B-2, modified
as necessary to be recorded in the county in which Real Property Collateral is located, and executed and acknowledged before a
notary public.

 

“Assumed Obligations”:
All obligations and liabilities of Seller under the Loan Documents, including those relating to servicing the Loan, for the Post-Closing
period.

 

“Borrower Party”:
Borrower and any guarantor, surety, indemnitor or other Person obligated or liable for payment or performance under the Loan Documents.

 

“Buyer's Actual Knowledge”:
With respect to any matter, the current and actual (and not constructive, imputed or implied) knowledge of that matter of the officer
of Buyer named

 

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below, who has current and direct
responsibility for the management of the Transaction, without any personal liability or duty of inquiry on his part: Doug Bath.

 

“Business Day”:
A day that is not a Saturday, a Sunday or another day on which the Federal Reserve Bank of New York is closed.

 

“Claim”: A
claim, right, demand, cause of action, legal action or proceeding, liability, obligation, loss, cost or expense (including related
legal fees and expenses) that is based upon, arises out of or is related to the Assigned Rights or this Agreement, including its
negotiation, execution or performance. A Claim may be: (a) made by a Party or its Related Parties against the other Party pursuant
to Article VIII, (b) made by a Person other than a Party against a Party or its Related Parties, or (c) sustained or incurred
by a Party or its Related Parties. In addition, a Claim may be direct or indirect, actual or potential, filed or unfiled, absolute
or contingent, known or unknown, or suspected or unsuspected, and may be based on contract, tort or other legal or equitable theory.

 

“Close” or
“Closing”: The completion of the actions specified in Section 3.1.

 

“Collateral”:
The Real Property Collateral and all other property in or over which a lien or security interest has been (or was intended to have
been) granted or otherwise created under the Loan Documents for the benefit of Seller or other holder of the Loan. Collateral may
be real or personal (including any Reserves), tangible or intangible, of any other kind or nature, or now owned or hereafter acquired.

 

“Confidentiality Agreement”:
Collectively: (a) the Confidentiality Agreement dated September 6, 2013 between The Freshwater Group and Seller, and (b) the Confidentiality
Agreement dated September 10, 2013 between ND Investment-T, LLC and Seller, in each case restricting Buyer's disclosure of certain
information relating to the Assigned Rights and the Transaction, its contact with certain Persons and other matters.

 

“Deposit”:
$468,000. An amount equal to $312,000 shall be deposited on the Agreement Date or next Business Day (the “First Deposit
Installment”), and an amount equal to $156,000 shall be deposited on the Commitment Date or next Business Day (the “Second
Deposit Installment”). All interest and other proceeds of investment earned on the amounts on account shall be added
to the Deposit and disbursed with the remainder of the Deposit in accordance with the terms of this Agreement.

 

“Dispute”:
A Claim, dispute or controversy between the Parties or their Related Parties to the extent it is based upon, arises out of or is
related to Transaction-Related Matters.

 

“Encumbrance”:
Any of the following: (a) a mortgage, deed of trust, pledge, lien, security interest, charge, hypothecation, encumbrance or other
adverse claim against title, (b) a purchase, sale, assignment, participation, option, put, call or subordination, or (c) an agreement
or instrument that effects or would effect any of the foregoing.

 

“Excluded Materials”:
All documents, notes, correspondence and other materials relating to the Assigned Rights, which Seller’s determines in good
faith: (a) are subject to the attorney-client privilege or work product doctrine, (b) consist of financial or other information
relating to a natural Person, (c) consist of personal or “shadow” files of an employee of Seller, (d) consist of electronic
mail sent or received by Seller, or (e) consist of underwriting memoranda, credit analyses, reviews of third-party reports, action
or

 

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workout plans, periodic management
reports or other materials prepared for Seller's internal use.

 

“First Amendment to
Settlement Agreement”: That certain First Amendment to Settlement Agreement dated as of August 9, 2013, by and among
Seller, Borrower and certain other parties thereto.

 

“Governmental Authority”:
A: (a) foreign, federal, state or local government or political subdivision, (b) governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or other public body, (c) court or administrative tribunal, or (d) governmental
or private arbitration body.

 

“Independent Account”:
The Independent Account (as defined in the Settlement Agreement) for the Real Property Collateral.

 

“Loan Documents”:
(a) All loan, credit, financing, guaranty, security, pledge, account control, intercreditor, co-lender, participation and investment
agreements, promissory notes, mortgages, deeds of trust and other operative documents, in each case executed or assumed by a Borrower
Party in connection with the Loan, including, without limitation, the Settlement Agreement, and (b) relating to the foregoing,
all written waivers, modifications, amendments, releases, reconveyances, satisfactions and terminations; in each case, to the extent
in effect as of the Closing Date and material in the context of the Transaction, but excluding Excluded Materials.

 

“Loan Files”:All
files maintained by Seller in connection with its administration, servicing or monitoring of the Loan, including correspondence
and third-party reports; in each case to the extent material in the context of the Transaction, but excluding Excluded Materials.

 

“Material Casualty”:
A casualty affecting the Collateral which is reasonably likely to have an effect adverse on the value thereof, in an amount reasonably
likely to exceed $1,560,000, or the cost of repair or restoration as a result thereof is reasonably likely to exceed $1,560,000.

 

“Material Condemnation”:
the commencement or existence of a condemnation or eminent domain proceeding with respect to the Collateral which is reasonably
likely to have an effect on the value thereof (without taking into account the amount of the condemnation proceeds), in an amount
reasonably likely to exceed $1,560,000, or such award is reasonably likely to exceed $1,560,000.

 

“Party”: Each
of Buyer and Seller, including their respective successors and permitted assigns.

 

“Permitted Encumbrances”:
Any or all of the following: Encumbrances which: (a) exist as of the Commitment Date (other than any such Encumbrances which Seller
has agreed to remove on or prior to the Closing Date) and either: (i) were disclosed to Buyer in a writing, (ii) were of record
with respect to the Collateral, or (iii) as to which Buyer’s Actual Knowledge existed during the Review Period, (b) constitute
residence agreements entered into after the Agreement Date in the normal course of business, and which were not in violation of
this Agreement, (c) are extinguished as of the Closing Date, or (d) are

 

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junior in priority to the Security
Instrument and are in an amount which, in the aggregate, do not exceed $1,560,000.

 

“Person”:
An individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated
organization, Governmental Authority (other than a court or administrative tribunal) or other entity, and its respective successors
and assigns.

 

“Post-Closing”:
Related to facts, events or circumstances occurring, or a period beginning, on or after the Closing Date.

 

“Pre-Closing”:
Related to facts, events or circumstances occurring, or a period ending, before the Closing Date.

 

“Prohibited
Person”: A Person: (a) subject to trade or other restrictions such that its direct or indirect purchase or sale of the
Assigned Rights is prohibited by Applicable Law, (b) “blocked” under Executive Order Nos. 12947, 13099 or 13224, (c)
listed as a specially designated national, specially designated terrorist or “blocked” person on a list maintained
by the Office of Foreign Assets Control, Department of the Treasury (accessible at www.treas.gov/ofac/t11sdn.pdf), under
the USA Patriot Act of 2001, (d) subject to a prohibition in the USA Patriot Act, (e) with which a U.S. citizen is prohibited by
Applicable Law from engaging in transactions, or (f) that is an Affiliate of any of the foregoing.

 

“Related Parties”:
With respect to a Party, the Affiliates of that Party and its and their respective officers, directors, employees, partners, members,
direct and indirect equity owners, managers, participants, attorneys, advisors, agents, representatives, successors and assigns,
and their respective successors and assigns.

 

“Reserves”:
All reserves, escrows, impounds, deposits or other funds, in which Seller has a security interest or other interest, that are held
by Seller or any other Person pursuant to the Loan Documents for any purpose, including interest, taxes, insurance premiums, insurance
proceeds, maintenance, tenant improvements, leasing commissions, tenant security deposits, holdbacks or earnouts, and the funds
on deposit in the Independent Account.

 

“Retained Rights”:
All rights of Seller: (a) to be indemnified for Pre-Closing Claims pursuant to the Loan Documents, (b) to make counterclaims and
cross-claims against a Borrower Party or any other Person in connection with any Pre-Closing Claims made against Seller by any
Person, and (c) under the Settlement Agreement to the extent the same relate to borrowers other than Borrower, properties other
than the Collateral, or any guarantor of Borrower’s or any other borrower’s obligations under the Loan Documents.

 

“Review”:
Buyer's due diligence review, analysis and evaluation of: (a) the Loan Documents, Loan Files, Borrower Parties, Collateral, Assigned
Rights and Assumed Obligations, (b) the financial, accounting, tax, legal and other aspects, consequences, benefits, risks and
uncertainties of entering into the Transaction, (c) the quality of title to and availability of title insurance coverage for the
Collateral, (d) the current and potential future value of the Collateral, (e) the existence and extent of any environmental issues
relating to the Collateral, and (f) other relevant facts, circumstances and matters. The foregoing shall be: (x) at Buyer's expense,
(y) subject to applicable access, contact and

 

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  other restrictions
contained in the Loan Documents and the Confidentiality Agreement (which Buyer acknowledges will not materially impair its Review),
and (z) conducted and completed before the end of the Review Period to such extent and in consultation with such legal and other
advisers as Buyer considers necessary and sufficient in order to make an independent and informed decision whether or not to enter
into the Transaction.

 

“Security Instrument”:
Open-End Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing dated August 23, 2007, executed by Borrower,
as mortgagor, for the benefit of Seller, as mortgagee, and recorded on August 28, 2007 as Instrument No. 200700025892 in the Official
Records of Clermont County, Ohio, given by Borrower under the Loan.

 

“Seller's Actual Knowledge”:
With respect to any matter, the current and actual (and not constructive, imputed or implied) knowledge of that matter of the officers
of Seller named below, who have current and direct responsibility for the servicing of the Loan or management of the Transaction,
without any personal liability or duty of inquiry on their parts: Jeff Cheng and David Bernas.

 

“Settlement Agreement”:
That certain Settlement Agreement dated as of May 27, 2011, by and among Seller, Borrower and certain other parties thereto, as
amended pursuant to the First Amendment to Settlement Agreement.

 

“Termination Event”:
The termination of the obligations of the Parties to proceed with and Close the Transaction, which may occur either (a) automatically
pursuant to this Agreement, or (b) on the date that notice of the Termination Event is given by a Party pursuant to a Section that
expressly provides for such notice of such termination. The payment and other obligations of the Parties in connection with a Termination
Event are set forth in Section 7.6.

 

“Title Condition”:
That all of the following are true as of the Closing Date: (a) delivery of the Pinebrook Deed and transfer tax forms to Buyer on
the Closing Date (with the names and other blanks appropriately completed) shall be sufficient to transfer fee simple title to
the real estate portion of the Collateral to Buyer on the Closing Date, subject only to Permitted Encumbrances, (b) delivery of
organizational documents and resolutions from Borrower with respect to the Transaction, to the extent reasonably required by the
title company issuing an owner’s title policy to Buyer, to evidence the authority of Borrower to execute and deliver the
Pinebrook Escrow Documents (as defined in the Settlement Agreement), and (c) no Encumbrances shall encumber the Collateral on the
Closing Date, other than Permitted Encumbrances.

 

“Transaction”:
The purchase and sale of the Assigned Rights and the assumption of the Assumed Obligations pursuant to this Agreement.

 

“Transaction-Related
Matters”: The collective reference to the Transaction, this Agreement, the Assignment of Loan Documents, the Assignment
of Security Instrument, the Confidentiality Agreement, the Assigned Rights, the Assumed Obligations, the Loan, the Loan Documents,
the Borrower Parties, the Collateral and all other matters related to any of the foregoing.

 

Section 1.2           Interpretation.
Headings are for convenience only and do not affect interpretation. The singular includes the plural and vice versa. A general
reference to this

 

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Agreement includes all
agreements and other documents expressly contemplated by this Agreement unless the context or language clearly indicates otherwise.
A reference to an Article, Section, Exhibit, Schedule or Annex is a reference to an Article, Section, Exhibit, Schedule or Annex
of this Agreement, all of which are hereby incorporated in this Agreement by this reference. A reference to an agreement or document
is to the agreement or document as amended or replaced from time to time. A reference to legislation includes any amendment, codification
or replacement thereof and rules and regulations issued thereunder. The words hereof, herein and hereunder
and similar words refer to this Agreement as a whole and not to a particular provision. The word including is not limiting
and means including without limitation. The words a, an and any are not limiting and mean any and
all unless the context or language clearly indicates otherwise. The word or is not disjunctive and means and/or
unless the context or language clearly indicates otherwise. The words shall and will have the same meaning. This
Agreement shall be deemed to have been drafted jointly by the Parties and their respective counsel. No provision of this Agreement
shall be interpreted for or against a Party because that Party or its counsel drafted or requested that or another provision.

 

ARTICLE II

DEPOSIT;
REVIEW; TERMINATION OR COMMITMENT

 

Section 2.1             Deposit.  On
the Agreement Date or the next Business Day, Buyer shall remit the First Deposit Installment to a third party escrow agent designated
by Seller (the “Escrow Agent”) pursuant to a separate escrow agreement mutually acceptable to the Parties. On
the Commitment Date or the next Business Day, Buyer shall remit the Second Deposit Installment to the Escrow Agent, unless a Termination
Event has occurred pursuant to Section 2.3.

 

Section 2.2          Review
Period.  During the Review Period: (a) Buyer shall conduct its Review, (b) Seller shall consult with Buyer with respect
to the Assigned Rights, as reasonably requested by Buyer, and (c) Seller shall make available to Buyer (either by delivery or posting
in a virtual data room) copies of all Loan Documents and Loan Files.

 

Section
2.3           Termination Event or Commitment to Transaction on Last Day of
Review Period. On or before the last day of the Review Period, Buyer may, in its sole discretion, notify Seller of a
Termination Event, with the effect set forth in Section 7.6(a). If Buyer does not expressly notify Seller before the
end of the Review Period, then a Termination Event shall be deemed have automatically occurred, with the effect set forth in Section
7.6(a). If Buyer notifies Seller before the end of the Review Period that Buyer has elected to proceed with the
Transaction, then: (a) the Review Period shall be deemed to have expired and the “Commitment Date” shall be
deemed to have occurred, and (b) Buyer shall thereupon be committed to proceed with and Close the Transaction pursuant to
this Agreement.

 

ARTICLE III

PURCHASE AND SALE; ALLOCATIONS 

 

Section 3.1           Agreement
to Purchase and Sell. On the terms and subject to the conditions of this Agreement, on the Closing Date:

 

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(a)       
   Seller shall sell, assign, transfer, grant and convey the Assigned Rights to Buyer, without recourse, and
without representation or warranty of any kind or nature except as expressly set forth in and limited by this Agreement.

 

(b)          Buyer
shall purchase and accept the Assigned Rights, and shall assume, perform and comply with the Assumed Obligations.

 

Section 3.2           Allocations
of Loan Payments. 

 

(a)          All
payments of principal and/or interest on the Loan that are received by either Party before the Closing Date shall belong to Seller.
All payments of principal and/or interest on the Loan that are received by either Party on or after the Closing Date shall belong
to Buyer.

 

(b)          A
Party that receives payments belonging to the other Party pursuant to this Section 3.2 shall remit them to the other Party
pursuant to Section 9.2.

 

ARTICLE IV

CLOSING/POST-CLOSING

 

Section 4.1           Closing
Procedures. The Closing shall occur as follows, provided that (i) the Commitment Date has occurred, (ii) the conditions precedent
in Sections 4.2 and 4.3 have been satisfied or waived, (iii) Applicable Law does not prevent the Closing, and (iv) the other
terms and conditions of this Agreement have been complied with. Before 3:00 p.m., Eastern time, on the Scheduled Closing Date:

 

(a)          The
Parties shall deliver to the applicable escrow agent instructions to disburse the Deposit to Seller for its own account, the receipt
of which shall be confirmed by Seller.

 

(b)         Buyer
shall remit to Seller the remaining balance of the Purchase Price.

 

(c)          Seller
shall deliver to Buyer:

 

(i)          the
original Note (or if it is lost or otherwise unavailable, an executed lost note certificate containing an indemnification from
Seller, all in a form reasonably satisfactory to Buyer and Seller).

 

(ii)         an
original allonge describing the Note and containing the following endorsement: “Pay to the order of [insert name of Buyer],
without recourse, and without representation or warranty of any kind or nature except as expressly set forth in and limited by
the Loan Purchase and Sale Agreement dated as of [insert date] between Wells Fargo Bank, National Association, as Seller,
and [insert Buyer], as Buyer.”

 

(iii)        all
original executed counterparts of other Loan Documents in Seller's possession.

 

(iv)        an
original executed Assignment of Loan Documents.

 

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(v)         an
original executed Assignment of Security Instrument.

 

(vi)        a
certificate signed by Seller stating that each of Seller’s representations and warranties in this Agreement is and remains
true and correct in all material respects on and as of the Closing Date, except that: (A) with respect to the representation set
forth in Section 5.3(f), if such representation cannot be remade as written, Seller shall be deemed to have satisfied its
obligation to remake the same if it has disclosed the facts and circumstances which result in such inability to remake the representation,
(B) with respect to the representation in Section 5.3(i) Seller shall be deemed to have satisfied its obligation to remake
the same if it discloses the then current amount on deposit in the Independent Account, and (C) with respect to the representation
set forth in Section 5.3(j), if such representation cannot be remade as written, Seller shall be deemed to have satisfied
its obligation to remake the same if it has disclosed the facts and circumstances which result in such inability to remake the
representation.

 

(vii)       the
Pinebrook Deed and the other Pinebrook Escrow Documents (as each such term is defined in the Settlement Agreement), each of which
shall be dated on and as of the Closing Date and shall name Buyer as Pinebrook Property Transferee.

 

(viii)      the
Transfer Tax Declarations (as defined in the Settlement Agreement), each of which shall be dated on and as of the Closing Date
and shall name Buyer as Pinebrook Property Transferee.

 

In addition to the foregoing,
Seller shall use reasonable efforts to cause Borrower, on or prior to the Closing Date, to deliver the documents, instruments and
other items set forth in Sections 4.1.2.3 and 4.1.2.4, and all items set forth in Section 4.1.3 of the Settlement
Agreement (all of the foregoing being the “Additional Items”) to Buyer on the Closing Date, it being expressly
agreed however, that: (A) Seller’s failure to cause the delivery of the Additional Items shall not be deemed to be a default
under this Agreement, and (B) the delivery of the Additional Items shall not be a condition precedent to Buyer’s obligation
to close the Transaction in accordance with the terms of this Agreement. Buyer and Seller agree that it shall be Buyer’s
responsibility to work with the Borrower to obtain the Additional Items. Seller agrees to reasonably cooperate and assist Buyer
in connection therewith, and will instruct Borrower to cooperate with Buyer in accordance with the terms of the Settlement Agreement.

 

(d)          Buyer
shall deliver to Seller:

 

(i)          an
original executed Assignment of Loan Documents,

 

(ii)         an
original executed Assignment of Security Instrument,

 

(iii)        executed
Transfer Tax Declarations (to the extent required by applicable law, and

 

(iv)        a
certificate signed by Buyer stating that each of Buyer’s representations and warranties in this Agreement is and remains
true and correct in all material respects on and as of the Closing Date.

 

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The foregoing actions shall be deemed to
have occurred simultaneously and shall complete the Closing, whereupon the transactions described in Section 3.1 shall automatically
and irrevocably become effective, and Buyer shall bear all risk of loss relating to the Assigned Rights.

 

Section 4.2           Conditions
Precedent to Buyer's Obligation to Close. Buyer's obligation to Close shall be subject to: (a) the accuracy in all material
respects, as of the Closing Date, of the representations and warranties of Seller in this Agreement required to be made as of such
date, (b) Buyer's receipt of the documents described in Sections 4.1(a) and 4.1(c), including the certificate set
forth in Section 4.1(c)(vi), (c) satisfaction of the Title Condition, (d) there not having occurred a Material Casualty
or the initiation of a Material Condemnation since the Commitment Date, (e) the performance by Seller of each of Seller’s
material covenants and obligations under this Agreement: (i) that are required to be performed by Seller after the Commitment Date
and on or prior to the Closing Date; and (ii) that were required to be performed by Seller after the Agreement Date and prior to
the Commitment Date, unless with respect to this clause (ii), Buyer’s Actual Knowledge of Seller’s failure to
perform such covenants and obligations existed prior to the Commitment Date, and (f) delivery of possession of the Real Property
Collateral as of the Closing Date, in all cases described in clauses (a) through (f) above, except to the extent
waived by Buyer. For the avoidance of doubt, Buyer’s obligation to close shall not be subject to: (i) Buyer's ability to
obtain debt, equity or other financing for all or any portion of the Purchase Price, (ii) delivery of any or all of the Additional
Items, or (iii) any other contingency not expressly set forth in this Agreement.

 

Section 4.3           Conditions
Precedent to Seller's Obligation to Close. Seller's obligation to Close shall be subject to: (a) the accuracy in all material
respects, as of the Closing Date, of the representations and warranties of Buyer in this Agreement required to be made as of such
date, (b) Seller's receipt of the payments and documents described in Sections 4.1(a), 4.1(b) and 4.1(d),
including the certificate set forth in Section 4.1(d)(iv), and (c) the performance by Buyer of each of Buyer’s material
covenants and obligations under this Agreement that are required to be performed by Buyer on or prior to the Closing Date, in all
cases described in clauses (a) through (c) above, except to the extent waived by Seller.

 

Section 4.4           Post-Closing
Obligation. Buyer hereby covenants and agrees to deliver a Covenant Not to Sue the Pinebrook Borrower, in the form required
by the terms of the Settlement Agreement, subject to, and as and when required by, the terms of the Settlement Agreement.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES 

 

Section 5.1           Mutual
Representations and Warranties. Each Party represents and warrants to the other Party, as of the Agreement Date and the Closing
Date, as follows:

 

(a)           It
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

 

(b)           It
has full power and authority and has taken all action necessary to execute, deliver and perform its obligations under this Agreement.

 

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(c)          Its
execution, delivery and performance of this Agreement do not and will not violate its organizational documents, Applicable Law
or any agreement or instrument by which it is bound or a material portion of its assets is affected.

 

(d)          It
has duly executed and delivered this Agreement, which constitutes its legal, valid and binding obligation, enforceable against
it in accordance with the terms hereof, except as enforcement may be limited by bankruptcy and other laws and equitable principles
affecting the enforcement of creditors' rights generally.

 

(e)          No
legal actions or proceedings are pending against it before any Governmental Authority that in the aggregate would reasonably be
expected to materially and adversely affect the Assigned Rights, this Agreement or its ability to perform its obligations hereunder.

 

(f)          Neither
it nor any of its Related Parties is a Prohibited Person or an Affiliate of a Borrower Party.

 

Section 5.2          Buyer's
Representations and Warranties. Buyer represents and warrants to Seller, as of the Agreement Date and the Closing Date except
as otherwise specified, as follows:

 

(a)           On
the Closing Date, Buyer will have financial resources sufficient to purchase and hold the Assigned Rights for an indefinite period
(recognizing that the Assigned Rights may have little or no liquidity), and to bear the economic risk of the Assigned Rights and
a total loss of the Purchase Price. Buyer’s payment of the Purchase Price on the Closing Date shall be deemed prima facie
evidence of the truth and accuracy of this representation.

 

(b)          Buyer
or one or more of its Affiliates involved with the Transaction is an institutional investor and has such knowledge, sophistication
and experience in underwriting, evaluating, acquiring, administering and realizing upon commercial real estate mortgage loans and
interests therein (including, to the extent applicable to the Loan, loans that are sub-performing, non-performing, delinquent or
secured by distressed or devalued collateral), that it is able to competently conduct its Review. As of the Closing Date, Buyer:
(i) has had adequate time to complete and has completed its Review, (ii) has received all information that it deems necessary or
appropriate for its Review, and (iii) has made an independent and informed decision to enter into the Transaction, relying solely
upon its Review and the express representations, warranties, agreements and indemnities of Seller in this Agreement, and not in
any way upon: (x) any appraisal, environmental or other reports of third parties contained in the Loan Files, or (y) except relating
to the express representations, warranties, agreements and indemnities of Seller in this Agreement, any recommendation, prediction,
assurance, opinion or other statement relating to the Assigned Rights or the Transaction that may have been made or implied by
or on behalf of Seller (in which regard Buyer acknowledges that none of the foregoing has in fact been made or implied by or on
behalf of Seller).

 

(c)       
   Buyer has complied with the Confidentiality Agreement.

 

(d)          Buyer
is not “insolvent” (as defined in the Bankruptcy Code (Title 11 of the United States Code)) and will not be rendered
insolvent as a result of the Transaction. Buyer has not filed a petition or taken any other action seeking or acquiescing in

 

    	11

    	 

    

 

bankruptcy, reorganization, liquidation,
dissolution or similar proceedings under the Bankruptcy Code, nor does Buyer intend to do so, nor has such a petition been filed
against Buyer.

 

Section 5.3          Seller's
Representations and Warranties.  Seller represents and warrants to Buyer, as of the Agreement Date and the Closing Date except
as otherwise specified, as follows:

 

(a)           Seller
is the sole legal and beneficial owner of, and is selling, assigning and transferring to Buyer pursuant to this Agreement, good
title to the Assigned Rights, free and clear of Encumbrances. The foregoing shall not constitute any representation or warranty
regarding the existence or absence of Encumbrances affecting the Collateral itself (as opposed to the Assigned Rights constituting
Seller’s rights in such Collateral).

 

(b)           Seller
has fully funded and disbursed the proceeds of the Loan. The Loan Documents do not require any future advances to be made to Borrower
under any circumstances (although Lender may elect to make protective advances).

 

(c)           No
existing loan by Seller to a Borrower Party other than the Loan: (i) is secured by any Collateral, or (ii) would be in default
solely because the Loan was in default.

 

(d)           To
Seller's Actual Knowledge, since the date of the First Amendment to Settlement Agreement, Seller has not received written notice
from a Borrower Party: (i) of a default or event of default under a Loan Document (nor has Seller delivered such a notice), (ii)
asserting that Seller has failed to perform any of its obligations under a Loan Document, or (iii) asserting that a Borrower Party
has a Claim against Seller or an offset, counterclaim or other right or defense against any of its obligations under a Loan Document.

 

(e)           Seller
has not, other than pursuant to the Loan Documents: (i) satisfied, canceled, rescinded, waived or subordinated any Loan Document
in whole or in part, (ii) released a material portion of the Collateral from a lien or security interest created or agreed upon
pursuant to the Loan Documents, (iii) released a Borrower Party from a material obligation relating to the Loan, or (iv) executed
an agreement or instrument that effects or would effect any of the foregoing.

 

(f)            Since
the date of the First Amendment to Settlement Agreement, Seller has not received any written request from or on behalf of a Borrower
Party to restructure, modify, extend or waive a material obligation of a Borrower Party under the Loan Documents.

 

(g)           Seller
is not a party to any pending legal action or proceeding relating to the Loan. To Seller’s Actual Knowledge, there is no
action or proceeding threatened against Seller with respect to the Assigned Rights that would adversely affect in any material
respect Seller’s ability to carry out the transactions contemplated by this Agreement.

 

(h)           True,
correct, and complete copies of all Loan Documents have been made available to Buyer (either by delivery or posting in a virtual
data room), as redacted in the case of the Settlement Agreement and First Amendment to Settlement
Agreement.

 

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 Exhibit A is a true, correct, and complete list of all Loan Documents. None of the terms of any Loan Document
has been amended, supplemented, replaced or otherwise modified in any respect, except as set forth on Exhibit A.

 

(i)            As
of November 15, 2013, there is $783,092 on deposit in the Independent Account. There are no other reserves or escrows being
maintained under the Loan Documents.

 

(j)            To
Seller’s Actual Knowledge: (i) no proceeding has been commenced with respect to a Material Condemnation, and (ii) since the
Commitment Date, no Material Casualty has occurred that has not been substantially remediated.

 

(k)           To
Seller’s Actual Knowledge, Borrower is not currently the subject of, and the Loan is not currently subject to, any proceedings
relating to bankruptcy, insolvency, reorganization, or moratorium.

 

Section 5.4           Seller's
Disclaimer of Other Representations or Warranties.

(a)          Except
for the representations and warranties of Seller expressly set forth in and limited by this Agreement, Seller is selling, assigning
and transferring the Assigned Rights to Buyer pursuant to this Agreement AS-IS, WHERE-IS and WITH ALL FAULTS.

 

(b)          Except
for the representations and warranties of Seller expressly set forth in and limited by this Agreement, Seller does not make and
expressly disclaims, and Buyer irrevocably and unconditionally waives and expressly disclaims any reliance upon, all representations
and warranties (whether express or implied, statutory or otherwise, or in fact or in law) with respect to all matters, risks and
adverse conditions of any kind or nature whatsoever relating to the Assigned Rights or the Transaction, including those relating
to:

 

(i)         the
Collateral, including: (A) its physical condition or the absence of hazardous waste, toxic substances, asbestos or asbestos-containing
materials affecting it, (B) its current or potential value, leases, tenants, management or franchise agreements, rents, income
or expenses, and (C) its compliance with Applicable Law (whether relating to building, zoning, hazardous waste, toxic substances,
asbestos or asbestos-containing materials or otherwise),

 

(ii)         the
Loan or the Loan Documents, including whether or not the obligations set forth therein are valid, enforceable, collectible or in
compliance with Applicable Law,

 

(iii)        the
Loan Files, including whether or not the documents and information therein are accurate or complete,

 

(iv)        the
Excluded Materials, including whether or not the documents and information therein could have, or could have had, a material adverse
impact on the perceived, apparent, current or potential value of the Assigned Rights or on the willingness of Buyer to enter into
the Transaction,

 

    	13

    	 

    

 

(v)        the
Borrower Parties, including their business or financial condition or prospects,

 

(vi)       whether
or not all amounts due to Seller, Governmental Authorities (including real estate taxes and assessments) and other Persons under
the Loan Documents or Applicable Law have been paid, 

 

(vii)     whether
or not any lien or security interest purported to have been granted or created under the Loan Documents in fact has been granted
or created, has attached, has been perfected, has any particular priority, or is otherwise effective,

 

(viii)      whether
or not a default or event of default by a Borrower Party exists under the Loan Documents or whether or not adequate remedies are
available under the Loan Documents or Applicable Law for that default, and

 

(ix)         whether
or not the Loan or the Assigned Rights are merchantable or fit for any particular use or purpose.

 

(b)         Seller
shall have no obligation whatsoever to Buyer relating to, and Buyer expressly assumes, all matters, risks and adverse conditions
of any kind or nature whatsoever relating to Transaction-Related Matters, except to the extent covered by a representation or warranty
of Seller expressly set forth in and limited by this Agreement.

 

(c)          Buyer
acknowledges that:

 

(i)        the
net amount it ultimately realizes from the Assigned Rights may be less than the Purchase Price,

 

(ii)         Buyer
shall have no recourse to Seller for any such deficiency,

 

(iii)        Seller has specifically bargained for Buyer to assume all matters, risks and adverse conditions with respect to which there is
no express representation or warranty by Seller in this Agreement, as provided in clause (b) above, and

 

(iv)        the Parties have taken the provisions of this Section 5.4 into consideration in agreeing upon a lower Purchase Price than
they might otherwise have agreed upon.

 

Section
5.5            Termination of Representations and Warranties. The
representations and warranties of the Parties in this Agreement shall terminate 90 days after the Closing Date; provided, however,
that: (a) the representations and warranties of Seller in Sections 5.3(a) and 5.3(b) shall terminate one year after
the Closing Date, and (b) the representations and warranties of the Parties in Section 5.1 shall terminate upon the
expiration of the applicable statute of limitations; and provided, further, however, that the
representations and warranties of the Parties in this Agreement shall all terminate on the earliest of: (i) the applicable
termination date set forth above, (ii) the satisfaction in full and discharge of the Loan, and (iii) the completion of
Buyer's exercise of remedies pursuant to the Loan Documents.

 

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Section 5.6           Related
Provisions. Article VIII sets forth other provisions relating to the representations and warranties of the Parties and
the exclusive remedies for their breach or inaccuracy.

 

ARTICLE VI

OTHER AGREEMENTS
OF PARTIES

 

Section 6.1           Agreements
of Seller. From the Agreement Date to the Closing Date (or to the date of any earlier Termination Event):

 

(a)          Seller
shall continue to service the Loan pursuant to the Loan Documents in substantial conformity with the manner it services similar
loans for its own account.

 

(b)          Seller
shall not sell, assign, transfer, or encumber, or contract to sell, assign, transfer, or encumber the Assigned Rights (in whole
or in part), to any Person other than Buyer.

 

(c)         Seller shall not:

 

 (i)          create
an Encumbrance with respect to the Assigned Rights or the Collateral or any portion thereof,

 

(ii)         release
any portion of the Collateral from a lien or security interest created or agreed upon pursuant to the Loan Documents or waive any
of the material rights of Lender under the Loan or the Loan Documents,

 

(iii)         waive
or release a Borrower Party from a material obligation under the Loan Documents,

 

(iv)        enter
into any agreements with Borrower or another Person which would be binding on Buyer, the Collateral (including the Real Property
Collateral) or any portion thereof, following the Closing Date,

 

(v) exercise
remedies against a Borrower Party pursuant to the Loan Documents,

 

(vi)        amend,
cancel, or otherwise modify any of the terms, covenants, or conditions of the Loan or the Loan Documents,

 

(vii)       consent
to any action requested by Borrower under the Loan Documents for which Seller has discretion to approve or deny, without first
obtaining Buyer’s written consent to such determination, which consent Buyer shall not unreasonably withhold, delay or condition.
Notwithstanding the foregoing, if Seller is required under the Loan Documents to be reasonable in its determination of whether
to grant or deny such consent, then if Buyer’s consent to such determination by Seller is not given after request therefor,
Seller shall nonetheless have the right to grant or withhold its consent to Borrower’s request, if Seller reasonably determines
that there is no reasonable basis upon which Buyer was able to withhold its consent to Seller’s determination,

 

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(viii)      accept
any partial prepayment, partial payment, or discounted payoff with respect to the Loan (unless Seller is required under the Loan
Documents or Applicable Law to accept such partial prepayment, partial payment or discounted payoff), or

 

(ix)         file
or commence any bankruptcy or other insolvency against any Borrower Party.

 

(d)          If,
after the date hereof, Seller identifies or otherwise receives any additional material documents relating to the Loan not included
in the Loan File, then Seller shall promptly thereafter deliver such additional documents to Buyer and such documents shall be
considered thenceforth part of the Loan File. If, after the date hereof, Seller obtains Seller’s Actual Knowledge of a material
change in any of its representations or warranties set forth herein (provided Seller shall have no duty of inquiry with respect
thereto), then Seller shall promptly thereafter notify Buyer of same.

 

(e)           Seller
shall not withdraw (or otherwise direct to be transferred or otherwise withdrawn) any funds or monies held in the Independent Account,
except to apply the same to the purposes for which such account was established.

 

(f)           In
the event of the occurrence of a Material Condemnation or Material Casualty following the Commitment Date, Buyer, at its option,
shall have the right (to be exercised within five (5) Business Days following Buyer’s Actual Knowledge of the same) to either:
(i) terminate this Agreement, in which event a Termination Event shall be deemed to have occurred and the provisions of Section
7.6(a) shall apply, or (ii) require Seller to, at Buyer’s option, cause Borrower either: (A) to apply the insurance proceeds
(less the costs of settling such claim) to the restoration of the Collateral in accordance with the terms of the Loan Documents,
or (B) if permitted by the terms of the Loan Documents, deliver such proceeds (less the costs of settling such claim) to Buyer
on the Closing Date. If Buyer elects clause (ii) above, Seller shall not permit such funds to be applied to the outstanding
principal balance, interest, or any other amounts due under the Loan unless such amount is sufficient to repay the Loan in full,
in which event, a Termination Event as described in Section 7.4 shall be deemed to have occurred. Buyer’s failure
to timely elect clause (ii) above shall be deemed to be an election under clause (i) above. Buyer agrees that, except
as expressly set forth herein, the occurrence of a casualty, condemnation or eminent domain proceeding of any kind, shall not waive,
limit or modify its obligations hereunder, including its obligation to Close the Transaction in accordance with this Agreement.

 

Section 6.2          
Agreements of Buyer. 

 

(a)          Buyer
shall, on or promptly after the Closing Date, file the Assignment of Security Instrument, and prepare and file Uniform Commercial
Code assignment or termination statements (which Seller hereby authorizes Buyer to execute in Seller's name), in each case with
such Governmental Authorities as Buyer deems necessary or advisable in order to evidence and perfect the Transaction and comply
with Applicable Law.

 

(b)         Buyer
shall, on or promptly after the Closing Date, arrange with Borrower to be substituted for Seller as loss payee and additional insured
under all applicable insurance policies covering the Collateral.

 

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(c)         Buyer
shall, as and when due: (i) pay all filing, transfer and recording taxes, fees and expenses relating to the sale and transfer of
the Assigned Rights and the filings and recordings made pursuant to this Agreement (whether or not those taxes, fees or expenses
are by custom or Applicable Law payable by a seller of loans), and (ii) prepare and file all related tax returns, reports and other
documents.

 

(d)         Buyer
shall provide Seller upon request with information regarding the status and completion of any of the foregoing. Seller shall have
no responsibility in connection with any of the foregoing.

 

Section 6.3           Post-Closing
Servicing of the Loan. On and after the Closing Date, Seller shall have no rights, obligations or responsibilities relating
to the servicing of the Loan, all of which shall be assumed by Buyer as part of the Assumed Obligations.

 

Section 6.4           Post-Closing
Limitations on Settlements and Releases.  On and after the Closing Date: (a) neither Party shall settle a Claim if the settlement
could reasonably be expected to adversely affect the other Party's ability to pursue or defend that or another Claim, (b) Buyer
shall not accept a release of liability from a Borrower Party or grant a release of liability to a Borrower Party relating to the
Assigned Rights, unless the Borrower Party simultaneously releases Seller and Related Parties of Seller from Claims the Borrower
Party has or could have against them relating to the Assigned Rights, which release shall otherwise be in substantially the same
form as that accepted or granted by Buyer, and (c) if Buyer sells, assigns, transfers or pledges Assigned Rights to any Person,
it shall obtain and provide to Seller the written agreement of that Person to comply with clauses (b) and (c) of
this sentence as though that Person were Buyer.

 

Section 6.5          Mutual
Releases. As of the Closing Date, each Party hereby releases the other Party and its Related Parties from all Claims that Party
may have had, may currently have, or may in the future have against any of them, except for obligations of and Claims against the
other Party pursuant to this Agreement, including, indemnity claims asserted by either Party under Article VIII.

 

Section 6.6           Differing
Access to Certain Information. As of the Agreement Date, Commitment Date and Closing Date, each Party:

 

(a)          
acknowledges that the other Party may currently and in the future have information not known to it, regarding the Borrower Parties,
Collateral, Assigned Rights, Assumed Obligations or other matters, which if known by it may have been material to its decision
whether or not to enter into the Transaction,

 

(b)          
confirms that it
has nevertheless decided to enter into the Transaction, and

 

(c)          
to the extent permitted
by Applicable Law, waives and releases any Claims it may currently or in the future have against the other Party based on, arising
out of or related to the other Party's failure to disclose such information to it; provided, however, that no such
information shall cause any of the other Party's representations and warranties in this Agreement to be inaccurate.         

 

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Section 6.7          Broker
Commissions.  Each Party shall be responsible for commissions, fees and expenses of brokers and agents engaged by or claiming
through or under it in connection with the Transaction. Accordingly, Seller shall pay the commission, fees and expenses of Marcus
& Millichap.

 

Section 6.8          Confidentiality.
Without limiting any provision of the Confidentiality Agreement, neither Party shall disclose any information concerning the
Purchase Price to any other Person, except: (a) to its Related Parties, (b) to a title insurance company in connection with the
Transaction, (c) as required by Applicable Law or a Governmental Authority, or (d) as required in connection with a Claim relating
to this Agreement. Neither Party shall file or record this Agreement or a memorandum hereof with any Governmental Authority. Neither
Party shall issue a press release or other publicity statement relating to the Transaction without the other Party's prior written
consent.

 

Section 6.9           No
Buyer Contact with Certain Parties. Before the Closing Date, neither Buyer nor any Person on behalf of Buyer shall contact
or communicate, in connection with the Loan, the Collateral or this Agreement, with any Borrower Party, or any current tenant,
property manager, franchisor, lender (other than Seller), or any Affiliate of any of them, or any contractor, architect, engineer
or consultant retained by or on behalf of any of them (other than to the extent also retained by Buyer), without the consent of
Seller (not to be unreasonably withheld, conditioned or delayed). In the event of any conflict between this Section 6.9
and the Confidentiality Agreement, this Section 6.9 shall govern.

 

ARTICLE VII

FAILURE TO CLOSE

 

Section 7.1           Failure
of Seller to Close. If on the Scheduled Closing Date: (a) Buyer
is willing and able to Close, (b) all conditions precedent to Seller's obligation to Close set forth in Section 4.3 have
been satisfied or waived in writing by Seller, and (c) the Closing does not occur solely because of a failure by Seller to Close,
a Termination Event shall automatically occur on the Scheduled Closing Date.

 

Section 7.2           Failure
of Buyer to Close. If on the Scheduled Closing Date: (a) Seller is willing and able to Close, (b) all conditions precedent
to Buyer's obligation to Close set forth in Section 4.2 have been satisfied or waived in writing by Buyer, and (c) the Closing
does not occur solely because of a failure by Buyer to Close, a Termination Event shall automatically occur on the Scheduled Closing
Date.

 

Section 7.3           Applicable
Law. If the Closing does not occur on the Scheduled Closing Date solely because of a requirement of Applicable Law, a Termination
Event shall automatically occur on the Scheduled Closing Date.

 

Section 7.4           Loan
Satisfaction. Notwithstanding anything to the contrary contained herein, Seller shall have the right to accept a prepayment
of the Loan in full at any time after the Agreement Date (but before the Closing Date), in which event, a Termination Event shall
automatically occur on the date of satisfaction and discharge.

 

Section 7.5           Disagreement.
If the Closing does not occur on the Scheduled Closing Date and the Parties disagree as to the reason therefor, the Parties
shall instruct the escrow agent

 

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regarding the disbursement of the Deposit
upon and in accordance with the resolution of the disagreement by mutual agreement or legal action.

 

Section 7.6           Effect
of Termination Event. 

 

(a)          If
the Termination Event is pursuant to Section 2.3, 6.1(f) or 7.3, or if the Closing does not occur as a result
of a failure of a condition precedent to the obligations of Buyer or Seller hereunder pursuant to Section 4.2 or 4.3
as applicable (provided such failure of a condition precedent is not the result of a default hereunder) Buyer shall be entitled
to an amount equal to the Deposit (less any fees owed to any escrow agent, or portion of the Deposit lost due to any investment
made pursuant to any escrow agreement), but to no other compensation, damages or reimbursement.

 

(b)          If
the Termination Event is pursuant to Section 7.1, Buyer shall be entitled either: (i) to an amount equal to the Deposit
(less any fees owed to any escrow agent, or portion of the Deposit lost due to any investment made pursuant to any escrow agreement),
or (ii) to seek specific performance for Seller’s breach hereunder (it being agreed that no adequate remedy at law for such
breach exists); it being agreed, however, that in either case, Buyer shall not be entitled to any other compensation, damages or
reimbursement, except as otherwise provided in Section 9.5.

 

(c)          If
the Termination Event is pursuant to Section 7.2, Seller shall be entitled to an amount equal to the Deposit (less any fees
owed to any escrow agent, or portion of the Deposit lost due to any investment made pursuant to any escrow agreement), but to no
other compensation, damages or reimbursement or remedy. The Parties
agree that the actual and anticipated damages that Seller would incur because of a failure of Buyer to Close as set forth in Section
7.2 would be extremely difficult or impracticable to determine and prove, and that considering all circumstances existing on
the Agreement Date and the Commitment Date, the amount of the Deposit is a reasonable estimate of such damages.

 

(d)          If
the Termination Event is pursuant to Section 7.4, Buyer shall be entitled: (i) to an amount equal to the Deposit (less any
fees owed to any escrow agent, or portion of the Deposit lost due to any investment made pursuant to any escrow agreement); plus
(ii) an amount, not to exceed $25,000, equal to the actual out-of-pocket third party expenses paid by Buyer in connection with
its due diligence and legal fees and costs related to the Transaction incurred during the Review Period; it being agreed that Buyer
shall not be entitled to any other compensation, damages or reimbursement.

 

(e)          
On the date of the Termination Event or the next Business Day, the Parties shall deliver to escrow agent instructions to immediately
disburse the Deposit (less any reduction described in clauses (a) and (b) above) to the Party entitled thereto as
provided in this Article VII.

 

(f)          Upon
a Termination Event, neither Party shall have any obligations to the other Party under this Agreement except under Section 6.8,
this Section 7.6 and Section 9.5. The provisions of this Section 7.6 shall constitute the sole and exclusive
recourse and remedy of the Parties in the case of a Termination Event.

 

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ARTICLE VIII

 INDEMNIFICATION

 

Section 8.1           Indemnification
by Seller.  On and after the Closing Date, and subject to the limitations of this Article VIII, Seller shall indemnify,
hold harmless and defend Buyer and its Related Parties from and against, and pay or reimburse them for, all Claims against or
incurred by any of them, to the extent based upon, arising out of or related to: (a) the breach or inaccuracy in any material
respect of a representation and warranty of Seller in this Agreement, (b) the failure by Seller to perform any of its material
obligations set forth in this Agreement, (c) a Pre-Closing act or failure to act by Seller, whether or not pursuant to the Loan
Documents or Applicable Law, or (d) the Retained Rights.

   

Section 8.2           Indemnification
by Buyer.  On and after the Closing Date, and subject to the limitations of this Article VIII, Buyer shall indemnify,
hold harmless and defend Seller and its Related Parties from and against, and pay or reimburse them for, all Claims against or
incurred by any of them, to the extent based upon, arising out of or related to: (a) the breach or inaccuracy in any material respect
of a representation and warranty of Buyer in this Agreement, (b) the failure by Buyer to perform any of its material obligations
set forth in this Agreement, (c) a Post-Closing act or failure to act by Buyer, whether or not pursuant to the Loan Documents or
Applicable Law, or (d) the Assumed Obligations.

 

Section 8.3           Limitations
on Indemnification. Notwithstanding anything to the contrary in this Agreement:

 

(a)          
Seller shall not be obligated to make payments pursuant to Section 8.1(a) in an aggregate amount exceeding (i) 100% of the
Purchase Price, with respect to the breach or inaccuracy of one or more representations and warranties of Seller in Sections
5.1(a), 5.1(b) or 5.3(a), or (ii) 5% of the Purchase Price, with respect to the breach or inaccuracy of one or
more other representations and warranties of Seller in this Agreement.

 

(b)          The
Parties agree that the provisions of this Article VIII are not intended to cover the rights or remedies of a Party hereunder
with respect to a Termination Event, which rights and remedies are covered by the provisions of Section 7.6.

 

(c)          Neither
Party shall be obligated to make payments pursuant to Sections 8.1(a) or 8.2(a), as applicable, with respect to the
breach or inaccuracy of any representation and warranty of such Party in this Agreement, unless such Party receives from the other
Party, on or before the date the representation and warranty terminates pursuant to Section 5.5, notice of the breach or
inaccuracy setting forth in reasonable detail the basis for a claim for indemnification hereunder. If such notice is not given
before such termination date, the other Party shall not thereafter be entitled to make any claim against or receive any payment
from such Party relating thereto.

 

(d)          Neither
Party shall be obligated to make payments pursuant to Sections 8.1(a) or 8.2(a), as applicable, with respect to the
breach or inaccuracy of any representation and warranty of such Party in this Agreement, to the extent the breach or inaccuracy:
(i) was disclosed in any document or other written information made available to the other Party before the Closing Date, (ii)
existed to Seller’s Actual Knowledge before the Closing Date with respect to a breach or inaccuracy by or of Buyer, (iii)
existed to Buyer’s Actual Knowledge before the Closing Date with respect to

 

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a breach or inaccuracy by or
of Seller, or (iv) is cured or corrected in all material respects within 60 days after such Party receives notice pursuant to clause
(c) above.

 

(e)          Neither
Party shall be obligated to make payments pursuant to Section 8.1(a) or 8.2(a), as applicable, unless and until such
Party would otherwise be obligated to make payments thereunder exceeding in the aggregate a threshold amount of $100,000, whereupon
such Party shall make payment to the other Party of both the threshold amount and the excess amount; provided, however,
that the threshold amount shall not apply to payments by Seller pursuant to Section 8.1(a) with respect to the representations
and warranties of Seller in Sections 5.3(a) or 5.3(b).

 

(f)          The
Parties shall use commercially reasonable efforts to: (i) mitigate a Claim covered by this Article VIII, (ii) obtain related
insurance proceeds, tax benefits and recoveries available from Borrower Parties or otherwise with respect to the Assigned Rights,
and (iii) remit those amounts to the Party entitled to indemnification under this Article VIII to the extent such Party
has not been indemnified for the Claim in accordance with this Article VIII, and otherwise to the other Party.

 

(g)          Neither
Party shall ever be liable to the other Party or a Related Party of the other Party, pursuant to this Article VIII or otherwise
with respect to Transaction-Related Matters, for consequential, special or incidental damages, lost profits, opportunity costs
or diminution in value. The preceding sentence shall apply notwithstanding any other provision of this Agreement or any facts or
circumstances that might otherwise be relevant, including: (i) the breach or inaccuracy of a representation or warranty of a Party
in this Agreement, (ii) the breach of an obligation of a Party in this Agreement, (iii) action or inaction of a Party of any kind
or nature, or (iv) notice to or knowledge of a Party (whether actual, constructive, implied or imputed) that the other Party or
a Related Party of the other Party may sustain consequential, special or incidental damages, lost profits, opportunity costs or
diminution in value as a result of any such facts or circumstances.

 

Section 8.4          Procedures.
The Parties shall endeavor to keep each other informed of Claims that may be indemnified pursuant to this Article VIII.
If the Claim is being made by a Person other than a Party, the indemnifying Party shall defend the Claim at its expense through
independent counsel reasonably acceptable to the indemnified Party. However, if the indemnified Party determines in good faith
that the indemnifying Party is not conducting the defense of the Claim in a timely and appropriate manner, the indemnified Party
may assume the defense of the Claim through independent counsel, and the indemnifying Party shall pay or reimburse all related
legal and other costs and expenses as and when incurred by the indemnified Party. The Party not conducting the defense may participate
therein at its expense through separate independent counsel. The Parties and their respective counsel shall consult and cooperate
with respect to the defense and possible settlement of the Claim. Neither Party shall settle the Claim without the prior written
consent of the other Party (which if requested shall not be unreasonably withheld, conditioned or delayed).

  

Section 8.5          Exclusive
Remedy. The representations and warranties of each Party in this Agreement are solely contractual in nature, without regard
to when they were made or whether they were relied upon by the other Party. Neither Party is guaranteeing the accuracy of any of
its representations or warranties. On and after the Closing Date, the indemnification provisions in this Article VIII
shall constitute the sole and exclusive recourse and remedy of each Party with respect to (a) the breach or inaccuracy of any representation
or warranty of the other

 

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Party in this Agreement, and (b) except
with respect to a Termination Event, which is the subject of Section 7.6, the breach of any obligation of the other Party
in this Agreement.      

   

ARTICLE IX

GENERAL

 

Section 9.1           Notices.
Notices under this Agreement shall be: (a) in writing, (b) addressed to the receiving Party at its address for notices on its
signature page hereof (as such address may be amended by notice by such Party referring to this Agreement), (c) sent to the receiving
Party by a nationally recognized delivery service, and (d) effective upon delivery at such address. 

 

Section 9.2         Payments.
Payments and remittances under this Agreement shall be made: (a) not later than the Business Day after their due date (except
that the Purchase Price shall be payable on the Closing Date), (b) by wire transfer of immediately available funds pursuant to
the wire transfer instructions for the receiving Party on its signature page hereof (as such instructions may be amended by notice
by such Party referring to this Agreement), and (c) without setoff, withholding, costs or deductions.

 

Section 9.3           
Severability. If a provision of this Agreement is invalid or unenforceable, the remaining provisions shall not be affected,
but that provision shall, if permitted by Applicable Law, be automatically modified to the minimum extent necessary to make it
valid and enforceable.

 

Section 9.4           Entire
Agreement. This Agreement constitutes the entire agreement between the Parties with respect to Transaction-Related Matters,
and supersedes all previous and contemporaneous negotiations, agreements, understandings, representations and warranties, all of
which have been merged and finally integrated into this Agreement. The Parties agree to define their respective rights, liabilities
and obligations relating to Transaction-Related Matters exclusively in contract as expressly set forth in this Agreement. The Parties
disclaim that they are owed any duties or are entitled to any remedies not expressly set forth in this Agreement. This Agreement
may be amended only pursuant to a document executed by the Parties.

 

Section 9.5           Costs
and Expenses. The Parties shall pay their own respective legal and other costs and expenses relating to this Agreement. However,
in the event of legal action between the Parties relating to this Agreement, the Party against which the legal action is resolved
shall reimburse the other Party for all related legal and other costs and expenses reasonably incurred by the other Party.

 

Section 9.6           Counterparts
and Electronic Delivery. The transmission of an executed counterpart or signature page of this Agreement (including the agreements
and documents specifically referred to herein) by any means of electronic transmission shall be deemed to constitute delivery of
an executed “original” counterpart, all of which, however transmitted, shall together constitute one and the same document.

 

Section 9.7           Time
of the Essence. Time is of the essence in the payment and performance of every obligation under this Agreement.

 

Section 9.8           Successors
and Assigns. This Agreement shall be binding upon the Parties and their respective successors and permitted assigns. Neither
Party shall or shall attempt to assign, transfer, pledge, grant a participation in or otherwise dispose of any of its rights or

 

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obligations under this Agreement to any
Person other than an Affiliate of such Party (but no such assignment, transfer, pledge or participation shall serve to release
or limit the original, named Party’s liability hereunder) without the prior written consent of the other Party (which may
be withheld in its sole discretion). Any such attempted transaction without such consent shall be ineffective. For the avoidance
of doubt, Buyer may, after the Closing Date and without regard to this Section 9.8, assign, transfer, pledge, grant a participation
in or otherwise dispose of the Assigned Rights (other than any of its rights or obligations under this Agreement) to any Person,
but: (a) no such assignment, transfer, pledge or participation shall serve to release or limit the original, named Buyer’s
liability hereunder, and (b) any such assignee or transferee shall expressly assume in writing the obligations of Buyer hereunder.

 

Section 9.9        Cooperation.
Each Party shall take actions, execute documents and otherwise cooperate with the other Party as reasonably requested by, and
at the expense of, the other Party, in order to carry out the intent and purpose of this Agreement.

 

Section 9.10      
No Third Party Beneficiaries. This Agreement is not intended to benefit and may not be enforced by any Person other than the
Parties and their respective successors and permitted assigns.

 

Section
9.11       Relationships of Parties. The relationship between Buyer and Seller with
respect to the Transaction is solely that of a buyer and seller contracting with each other at arm's length in the ordinary
course of their respective businesses. Neither Party is a trustee or agent for the other Party, is a partner of or joint
venturer with the other Party, has fiduciary or similar duties to the other Party relating to the Transaction, or has any
other special relationship with the other Party. Each Party and its Related Parties may have past, current and future
business and other relationships with a Borrower Party and its Related Parties, and with the other Party and its Related
Parties, with no obligation to disclose them to the other Party in connection with the Transaction.

 

Section 9.12         Treatment
of Transaction. Each Party shall reflect the Transaction on its books, records and tax returns as the purchase and sale of
a commercial loan secured directly or indirectly by real property, and not as the purchase and sale of a security or as a loan
by Buyer to Seller.

 

Section 9.13        Survival.
All provisions of this Agreement shall survive the Closing, subject to the specific limitations expressly set forth herein.

 

Section 9.14        Governing
Law. This Agreement and all Claims shall be governed by the internal laws of the State of New York.

  

Section 9.15        Waiver
of Jury Trial. Each Party: (a) irrevocably and unconditionally WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY in any legal
action or proceeding directly or indirectly based upon, arising out of or related to Transaction-Related Matters, to the fullest
extent permitted by Applicable Law, (b) acknowledges that neither the other Party nor a Related Party of the other Party has represented
in any manner that the other Party would not seek to enforce the foregoing waiver, and (c) acknowledges that it and the other
Party have each been induced to enter into this Agreement by, among other things, the mutual waivers and acknowledgements in this
Section 9.15. 

 

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Section 9.16     Jurisdiction.
Each Party: (a) irrevocably and unconditionally submits to and accepts the exclusive jurisdiction of the United States District
Court for the Southern District of New York located in the Borough of Manhattan, or the courts of the State of New York located
in the County of New York, for any legal action or proceeding directly or indirectly based upon, arising out of or related to Transaction-Related
Matters, and (b) waives any objection it may currently or in the future have that any such court is an inappropriate venue, is
an inconvenient forum or does not have personal jurisdiction over it. 

 

Section 9.17         Exhibits.
This Agreement has the following Exhibits:

 

Exhibit A – Loan
Documents

Exhibit B-1 – Form
of Assignment of Loan Documents

Exhibit B-2 – Form
of Assignment of Security Instrument

 

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IN WITNESS WHEREOF,
the Parties have executed and delivered this Agreement as of the Agreement Date.

 

(Signatures pages follow)

 

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EXECUTION VERSION

 

Seller:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

	By:	 /s/ Jeff Cheng
	Name:	Jeff Cheng
	Title:	Vice President 

Address for Notices (See Section 9.1):

 

Wells Fargo Bank, National Association

10 South Wacker Drive, 32nd
Floor

Chicago, IL 60606

Attention: David Bernas

Email: bernasdr@wellsfargo.com

 

With a copy to:

c/o Wells Fargo Bank, National Association

10 South Wacker Drive, 32nd
Floor

Chicago, IL 60606

Attention: Jeff Cheng

Email: jeff.cheng@wellsfargo.com

 

With a copy to:

Wells Fargo Bank, National Association

One Wachovia Center

301 South College Street

MAC: D1053-300

Charlotte, NC 28288

Attention: Richard L. Ferrell, Senior Counsel

Email: Richard.L.Ferrell@wellsfargo.com

 

With a copy to:

Sidley Austin LLP

One South Dearborn

Chicago, IL 60603

Attention: John M. Rafkin

Email: jrafkin@sidley.com

 

    	 

    	 

    

 

Buyer:

 

AQUA PROPERTY NT-HCI,
LLC, 

a Delaware limited liability company

 

	By:	/s/ Daniel R. Gilbert
	Name:	Daniel R. Gilbert
	Title:	Chief Executive Officer

 

Address for Notices (See Section 9.1):

 

Doug Bath

NorthStar Realty Healthcare

2 Bethesda Metro Center, Suite 1300

Bethesda, MD 20814

E-mail: dbath@nrfc.com

 

Ronald J. Lieberman

NorthStar Realty Finance

399 Park Avenue

New York, NY 10022

E-mail: rlieberman@nrfc.com

 

With a copy to:

 

Fried, Frank, Harris, Shriver & Jacobson
LLP

One New York Plaza

New York, New York 10004

Attention: Harry R. Silvera, Esq.

E-mail: harry.silvera@friedfrank.com

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