Document:

EX-10.3

 Exhibit 10.3 
 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT 
 OF 

CHTSUN PARTNERS IV, LLC 
 THE INTERESTS OF THE MEMBERS ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR THE DISTRICT OF COLUMBIA. NO RESALE OR TRANSFER
OF AN INTEREST BY A MEMBER IS PERMITTED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AND ANY VIOLATION OF SUCH PROVISIONS COULD EXPOSE THE SELLING OR TRANSFERRING MEMBER AND THE
COMPANY TO LIABILITY. 
 Dated as of June 29, 2012 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
			
	 ARTICLE 1
	  	 DEFINITIONS
	  	 	1	  
	 1.1
	  	 Definitions
	  	 	1	  
	 1.2
	  	 General Interpretive Principles
	  	 	17	  
			
	 ARTICLE 2
	  	 THE COMPANY AND ITS BUSINESS
	  	 	18	  
	 2.1
	  	 Company Name
	  	 	18	  
	 2.2
	  	 Term
	  	 	18	  
	 2.3
	  	 Filing of Certificate and Amendments
	  	 	18	  
	 2.4
	  	 Business; Scope of Members’ Authority
	  	 	18	  
	 2.5
	  	 Principal Office; Registered Agent
	  	 	18	  
	 2.6
	  	 Authorized Persons
	  	 	19	  
	 2.7
	  	 Representations by Members
	  	 	19	  
	 2.8
	  	 Organization Expenses
	  	 	19	  
	 2.9
	  	 Opt-in to Article 8
	  	 	19	  
	 2.10
	  	 Securities Laws Restrictions
	  	 	21	  
	 2.11
	  	 Separateness Covenants
	  	 	21	  
			
	 ARTICLE 3
	  	 MANAGEMENT OF COMPANY BUSINESS
	  	 	24	  
	 3.1
	  	 Appointment of Managing Member
	  	 	24	  
	 3.2
	  	 Duties of Managing Member
	  	 	24	  
	 3.3
	  	 Bank Accounts
	  	 	25	  
	 3.4
	  	 Reimbursement for Costs and Expenses
	  	 	25	  
	 3.5
	  	 Major Decisions
	  	 	25	  
			
	 ARTICLE 4
	  	 RIGHTS AND DUTIES OF MEMBERS
	  	 	25	  
	 4.1
	  	 Members Shall Not Have Power to Bind Company
	  	 	25	  
	 4.2
	  	 Other Activities of the Members
	  	 	25	  
	 4.3
	  	 Indemnification
	  	 	26	  
	 4.4
	  	 Dealing with Members
	  	 	27	  
	 4.5
	  	 Use of Company Assets
	  	 	27	  
	 4.6
	  	 Designation of Tax Matters Member
	  	 	27	  
	 4.7
	  	 OFAC; Not Foreign Person; Not Prohibited Person
	  	 	28	  
	 4.8
	  	 Management Fees and OD Loans
	  	 	28	  
			
	 ARTICLE 5
	  	 BOOKS AND RECORDS; REPORTS
	  	 	28	  
	 5.1
	  	 Books and Records
	  	 	28	  
	 5.2
	  	 Availability of Books and Records; Return of Books and Records
	  	 	29	  
	 5.3
	  	 Reports and Statements
	  	 	29	  
	 5.4
	  	 Accounting Expenses
	  	 	29	  
	 5.5
	  	 Budgets
	  	 	30	  
			
	 ARTICLE 6
	  	 CAPITAL CONTRIBUTIONS, LOANS AND LIABILITIES
	  	 	30	  
	 6.1
	  	 Initial Capital Contributions of the Members
	  	 	30	  
	 6.2
	  	 [Intentionally Omitted]
	  	 	31	  

  
 i 

							
	 6.3
	  	 Capital Calls
	  	 	31	  
	 6.4
	  	 Reimbursements
	  	 	31	  
	 6.5
	  	 Member Loans for Failure to Fund Capital Contributions
	  	 	32	  
	 6.6
	  	 Capital of the Company
	  	 	33	  
	 6.7
	  	 Limited Liability of Members
	  	 	33	  
	 6.8
	  	 Refinancing
	  	 	33	  
	 6.9
	  	 Mezz Loan
	  	 	33	  
			
	 ARTICLE 7
	  	 CAPITAL ACCOUNTS, PROFITS AND LOSSES AND ALLOCATIONS
	  	 	34	  
	 7.1
	  	 Capital Accounts
	  	 	34	  
	 7.2
	  	 General Allocation Rules
	  	 	36	  
	 7.3
	  	 Special Allocations
	  	 	36	  
	 7.4
	  	 Income Tax Elections
	  	 	39	  
	 7.5
	  	 Income Tax Allocations
	  	 	39	  
	 7.6
	  	 Transfers During Fiscal Year
	  	 	40	  
	 7.7
	  	 Election to be Taxed as Association
	  	 	40	  
	 7.8
	  	 Assignees Treated as Members
	  	 	40	  
			
	 ARTICLE 8
	  	 DISTRIBUTIONS OF NET OPERATING CASH FLOW AND CAPITAL PROCEEDS
	  	 	40	  
	 8.1
	  	 Distributions of Net Operating Cash Flow
	  	 	40	  
	 8.2
	  	 Distribution of Capital Proceeds
	  	 	41	  
	 8.3
	  	 Distribution Calculations
	  	 	42	  
	 8.4
	  	 Repayment of Member Loans, Reconciliation Amounts and Other Payments
	  	 	42	  
	 8.5
	  	 Liquidation
	  	 	43	  
	 8.6
	  	 Sunrise Distribution Amount
	  	 	43	  
			
	 ARTICLE 9
	  	 DISPOSITION OF INTERESTS
	  	 	43	  
	 9.1
	  	 Limitations on Assignments of Interests by Members
	  	 	43	  
	 9.2
	  	 Assignment Binding on Company
	  	 	43	  
	 9.3
	  	 Substituted Members
	  	 	44	  
	 9.4
	  	 Acceptance of Prior Acts
	  	 	44	  
	 9.5
	  	 Permitted Transfers
	  	 	44	  
			
	 ARTICLE 10
	  	 DISSOLUTION OF THE COMPANY; WINDING UP AND DISTRIBUTION OF ASSETS
	  	 	47	  
	 10.1
	  	 Dissolution
	  	 	47	  
	 10.2
	  	 Winding Up
	  	 	48	  
	 10.3
	  	 Distribution of Assets
	  	 	48	  
			
	 ARTICLE 11
	  	 AMENDMENTS
	  	 	49	  
	 11.1
	  	 Amendments
	  	 	49	  
	 11.2
	  	 Additional Members
	  	 	49	  
	 11.3
	  	 Documentation
	  	 	49	  

  
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	 ARTICLE 12
	  	 BUY-SELL; PURCHASE OPTION; RIGHT OF FIRST OFFER
	  	 	49	  
	 12.1
	  	 Purchase Option
	  	 	49	  
	 12.2
	  	 Buy Sell
	  	 	51	  
	 12.3
	  	 Right of First Offer
	  	 	52	  
	 12.4
	  	 INTENTIONALLY OMITTED
	  	 	53	  
	 12.5
	  	 Closing
	  	 	53	  
	 12.6
	  	 Release from Guaranties
	  	 	55	  
	 12.7
	  	 Upon Termination of Management Agreement
	  	 	55	  
	 12.8
	  	 Enforcement
	  	 	55	  
	 12.9
	  	 Refinancing
	  	 	55	  
			
	 ARTICLE 13
	  	 MISCELLANEOUS
	  	 	56	  
	 13.1
	  	 Further Assurances
	  	 	56	  
	 13.2
	  	 Notices
	  	 	56	  
	 13.3
	  	 Headings and Captions
	  	 	57	  
	 13.4
	  	 Variance of Pronouns
	  	 	58	  
	 13.5
	  	 Counterparts
	  	 	58	  
	 13.6
	  	 Governing Law; Litigation, Jurisdiction and Waiver of Jury Trial
	  	 	58	  
	 13.7
	  	 Arbitration
	  	 	58	  
	 13.8
	  	 Partition
	  	 	60	  
	 13.9
	  	 Invalidity
	  	 	60	  
	 13.10
	  	 Successors and Assigns
	  	 	60	  
	 13.11
	  	 Entire Agreement
	  	 	60	  
	 13.12
	  	 Waivers
	  	 	61	  
	 13.13
	  	 No Brokers
	  	 	61	  
	 13.14
	  	 Confidentiality
	  	 	61	  
	 13.15
	  	 No Third Party Beneficiaries
	  	 	61	  
	 13.16
	  	 Power of Attorney
	  	 	61	  
	 13.17
	  	 Invalidity
	  	 	61	  
	 13.18
	  	 Construction of Documents
	  	 	62	  

  

			
	Schedule 1.1	  	List of Facilities
	Schedule 1.2	  	Quarterly Interest Rate Differential Amounts
	Schedule 1.3	  	Mezz Loan Documents
	Schedule 3.5	  	Major Decisions
	Schedule 6.1	  	Percentage Interests of the Members
	Exhibit A	  	Approved Budget
	Exhibit B	  	Indemnification and Contribution Agreement
	Exhibit C	  	Share Certificate

  
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 THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”) OF CHTSUN PARTNERS IV, LLC, a Delaware limited liability company (the “Company”) is entered into effective as of June 29, 2012 (the “Effective Date”), by and among Sunrise Senior Living
Investments, Inc., a Virginia corporation (“Sunrise”), and CHT SL IV Holding, LLC, a Delaware limited liability company (“CHT”). 
 RECITALS 
 WHEREAS, the Company was formed by Sunrise, as the sole member,
pursuant to a Limited Liability Company Agreement dated as of May 22, 2012 (the “Original Agreement”) and a Certificate of Formation was filed with the Secretary of State of the State of Delaware on May 22, 2012.

 WHEREAS, pursuant to the Transfer Agreement (as hereinafter defined), the Company has acquired one hundred percent
(100%) of the membership interests in Sun IV LLC, a Delaware limited liability company. 
 WHEREAS, the Members desire to
amend and restate the terms of the Original Agreement, to reflect, among other items, the admission of CHT as a Member, and the agreements between the Members with respect to the Company in connection therewith. 

NOW, THEREFORE, in order to carry out their intent as expressed above and in consideration of the mutual agreements hereinafter contained
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby amend and restate the Original Agreement in its entirety, as follows: 

ARTICLE 1 

DEFINITIONS 
 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below, which meanings shall be applicable equally to the singular and plural of the terms defined:

 “AAA” shall have the meaning set forth in Section 13.7(a). 

“Acceptance Notice” shall have the meaning set forth in Section 12.3(a). 

“Accounting Period” shall mean and refer to a calendar month. 

“Act” shall mean the Delaware Limited Liability Company Act (6 Del. C. §18-101 et seq.), as amended from
time to time. 
 “Adjusted Basis” shall mean the basis for determining gain or loss for federal income tax
purposes from the sale or other disposition of property, as defined in Section 1011 of the Code. 
 “Adjusted
Capital Account Deficit” shall mean, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: 

(a) Credit to such Capital Account any amounts which such Member is obligated to restore or is deemed to be obligated to restore pursuant
to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and 

  
 1 

 (b) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4)
(reasonably expected adjustments for depletion allowances), 1.704-1(b)(2)(ii)(d)(5) (certain other reasonably expected allocations of loss or deduction), and 1.704-1(b)(2)(ii)(d)(6) (reasonably expected distributions) of the Regulations. 

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

“Affiliate” means a Person, which controls, is controlled by, or is under common control with another Person. For the
purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interest, by contract or otherwise;
and the terms “controlling” and “controlled” have the meanings correlative to the foregoing. A Person shall not be deemed to be under common “control” with another Person solely based on the fact that one or more
Person(s) serve as a director of both Persons. 
 “Affiliate Guaranties” or “Affiliate Guaranty”
means a customary indemnity or carve-out guaranty, (or guaranties) or similar limited recourse undertakings (that may spring into full recourse in certain limited carve-out events) made by Sunrise Guarantor and/or CHT Guarantor for the benefit of
Lender relating to the Refinancing (including, without limitation, with respect to each Facility (a) a recourse liabilities guaranty made by Sunrise Guarantor and CHT Guarantor for the benefit of Lender, dated as of the date hereof; and
(b) an environmental and/or ERISA indemnity agreement, as applicable, made by Sunrise Guarantor, CHT Guarantor and the applicable Facility Entity and Operating Lessee for the benefit of Lender, dated as of the date hereof) or under any future
refinancing approved by all the Members pursuant to Section 3.5 of this Agreement. 
 “Agreement” shall
mean this Amended and Restated Limited Liability Company Agreement of the Company, as it may hereafter be amended or modified from time to time. 
 “Aggregate Quarterly Interest Rate Differential Amount” shall have the meaning set forth in Section 9.5(a)(iii). 

“Amended and Restated Loan Agreement” means that certain Amended and Restated Loan Agreement, dated as of the date
hereof, among the Facility Entities, Operating Lessees, and Lender, as the same may be amended, restated, supplemented or otherwise modified from time to time. 
 “Appointed Arbitrator” shall have the meaning set forth in Section 13.7(b). 
 “Approved Budget” shall have the meaning set forth in a Management Agreement. 
 “Arbitration Notice” shall have the meaning set forth in Section 13.7(b). 
 “Arbitration Proceeding” shall have the meaning set forth in Section 13.7(a). 

  
 2 

 “Assignee” shall mean a Person to whom an Interest has been transferred in
accordance with this Agreement and who has not been admitted as a Member. 
 “Bankruptcy” shall mean, with
respect to the affected party, (a) the entry of an order for relief under the Bankruptcy Code, (b) the admission by such party of its inability to pay its debts as they mature, (c) the making by it of an assignment for the benefit of
creditors, (d) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law, (e) the application by such party
for the appointment of a receiver for the assets of such party, (f) the filing of an involuntary Bankruptcy petition against it that is not dismissed for 60 or more days, or (g) the imposition of a judicial or statutory lien on all or a
substantial part of its assets. With respect to a Member, this definition of Bankruptcy supersedes the definition of Bankruptcy set forth in Sections 18-101(1) and 18-304 of the Act. 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from time to time. 

“Business Day” shall mean any day other than (a) a Saturday or Sunday and (b) a day on which federally insured
depositary institutions in the State of New York are authorized or obligated by law, governmental decree or executive order to be closed. 
 “Buy-Sell Closing Date” shall have the meaning set forth in Section 12.2(c). 
 “Buy-Sell Notice” shall have the meaning set forth in Section 12.2(a). 
 “Buy-Sell Price” shall have the meaning set forth in Section 12.2(a). 
 “Buy-Sell Seller” shall have the meaning set forth in Section 12.2(c). 
 “Capital Account” when used in respect of any Member shall mean the Capital Account maintained for such Member in accordance with Section 7.1, as said Capital Account may be
increased or decreased from time to time pursuant to the terms of Section 7.1. 
 “Capital Call” shall
mean any written notice given to the Members pursuant to Article 6, in accordance with the requirements of Section 13.2, requesting a Capital Contribution that is required to be made by the Members pursuant to said Article 6. 

“Capital Contribution” when used with respect to any Member, shall mean (i) the initial Capital Contribution of
such Member as set forth on Schedule 6.1 attached hereto, and (ii) any additional capital contributed to the Company by such Member (and, for clarification, shall not include any consideration paid by a Member to another Member for its
Interest). 
 “Capital Proceeds” shall mean funds of the Company arising from a Capital Transaction, net of the
actual costs incurred by the Company with third parties in consummating the Capital Transaction. 
 “Capital
Transaction” shall mean any of the following: (a) a sale, exchange, transfer, assignment or other disposition of all or a portion of any Company Asset other than (i) tangible personal property that is not sold or transferred in
connection with the sale or transfer of real property or (ii) a leasehold interest in real property that is otherwise sold or transferred in the ordinary course 

  
 3 

 
of business; (b) any condemnation or deeding in lieu of condemnation of all or a portion of any Company Asset; (c) any financing or refinancing of any Company Asset; (d) the
receipt of proceeds due to any fire or other casualty to any Company Asset; and (e) any other transaction involving Company Asset, the proceeds of which, in accordance with GAAP, are considered to be capital in nature. For purposes of
distributions under Section 8.2, net proceeds from a Capital Transaction shall only include those distributions to be made to the Members under this Agreement after any third party payments relating to the Capital Transaction have been made.

 “Carrying Value” shall mean, with respect to any asset, the Adjusted Basis of the asset, except as follows:

 (a) the initial Carrying Value of an asset contributed by a Member to the Company shall be the gross fair market value of the
asset, as determined by the Managing Member at the time the asset is contributed; 
 (b) The Carrying Values of the
Company’s assets shall be adjusted to equal their respective gross fair market values, as determined by the Managing Member as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing
Assignee or Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member or an Assignee of more than a de minimis amount of property as consideration for all or part of a Member’s
Interest or an Assignee’s economic rights; and (iii) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); but adjustments pursuant to clauses (i) and (ii) above shall be made only if
the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company; 
 (c) The Carrying Value of an asset of the Company distributed to a Member shall be adjusted to equal the gross fair market value of the asset on the date of distribution as determined by the Managing
Member; and 
 (d) The Carrying Values of the Company’s assets shall be increased (or decreased) to reflect any adjustments
to the Adjusted Basis of those assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that those adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-l(b)(2)(iv)(m);
but the Carrying Values shall not be adjusted pursuant to this clause (d) to the extent the Managing Member determines that an adjustment pursuant to clause (b) above is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this clause (d). 
 If the Carrying Value of an asset is determined or adjusted
pursuant to clauses (a), (b) or (d), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to the asset for purposes of computing Profit and Loss. 

“Certificate of Formation” shall mean the Certificate of Formation of the Company filed with the Secretary of State of
the State of Delaware on May 22, 2012, as the same may hereafter be amended and/or restated from time to time. 

“Change of Control Purchase Option” shall have the meaning set forth in Section 12.1(a). 

  
 4 

 “Change of Control Purchase Option Closing Date” shall have the meaning set
forth in Section 12.1(b). 
 “Change of Control Purchase Option Notice” shall have the meaning set forth
in Section 12.1(a). 
 “Change of Control Purchase Option Price” shall have the meaning set forth in
Section 12.1(a). 
 “CHT” shall have the meaning set forth in the preamble of this Agreement, and shall
include any of its assignees or transferees to the extent permitted in this Agreement, but only so long as any such Person continues in its capacity as a Member in the Company. 

“CHT Guarantor” shall mean CHT REIT or another Affiliate of CHT acceptable to Lender. 

“CHT Liquidity Event” means any merger, reorganization, business combination, share exchange, acquisition by any Person
or related group of Persons of beneficial ownership of all or substantially all of the equity shares of CHT REIT in one or more related transactions, or other similar transaction involving CHT REIT pursuant to which CHT REIT’s stockholders
receive for their equity shares, as full or partial consideration, cash, listed or non-listed equity securities or combination thereof, or a sale of all or substantially all of the assets of CHT REIT. 

“CHT Person” shall mean CHT or an Affiliate of CHT. 

“CHT Recourse Claim” shall mean a Claim made under an Affiliate Guaranty to the extent resulting from gross negligence,
willful misconduct or fraud of CHT or any Affiliate of CHT. 
 “CHT REIT” shall mean CNL Healthcare Trust,
Inc., a Maryland corporation. 
 “Claim” shall mean any claim or demand for payment made by Lender to a Sunrise
Guarantor or CHT Guarantor under any of the Affiliate Guaranties. 
 “Closing Date” shall have the meaning set
forth in Section 12.5(a). 
 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time,
or any corresponding provision(s) of succeeding law. 
 “Company” shall have the meaning set forth in the
preamble of this Agreement. 
 “Company Assets” shall mean all right, title and interest of the Company in and
to all or any portion of the assets of the Company and any property acquired in exchange therefor or in connection therewith. 

“Company Minimum Gain” shall have the same meaning as the term “partnership minimum gain” set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations. 
 “Company Year” shall mean a twelve (12) month
period starting on the first day of the month immediately following the month in which the Effective Date occurs or each anniversary thereof and ending on the day immediately preceding the following twelve (12) month period. 

  
 5 

 “Competitor” shall mean any Person which is regularly engaged in the
business of directly or indirectly operating or managing real estate that (i) either directly or indirectly, operates or manages a brand of retirement communities totaling at least ten (10) retirement communities and/or (ii) either
directly or indirectly, operates or manages a group of retirement communities totaling at least ten (10) retirement communities that are not affiliated with a brand but that are marketed and operated as a collective group. Notwithstanding the
foregoing, the Members agree that the term “Competitor” shall specifically exclude any entity that operates or is qualified as a Real Estate Investment Trust under applicable United States state and federal laws, rules and regulations.

 “Confidential Information” shall have the meaning set forth in Section 13.14. 

“Connecticut and Santa Monica Facilities” shall mean the Connecticut Avenue Facility and the Facility known as Sunrise
of Santa Monica described on Schedule 1.1 attached hereto. 
 “Connecticut Avenue Facility” means the
Facility known as Sunrise of Connecticut Avenue described on Schedule 1.1 attached hereto. 
 “Connecticut Avenue
Facility Owner” means Sunrise Connecticut Avenue Assisted Living Owner, L.L.C., a Virginia limited liability company (formerly known as Sunrise Connecticut Avenue Assisted Living Owner, L.L.C.), the fee owner of the Connecticut Avenue
Facility. 
 “Connecticut/Santa Monica Financing” means the existing mortgage indebtedness secured by the
Connecticut and Santa Monica Facilities issued on February 28, 2012 as evidenced by that certain Loan Agreement and related deeds of trust and additional loan documents, dated on or about February 28, 2012, made by Connecticut Avenue
Facility Owner and AL Santa Monica Senior Housing, LP in favor of Lender, each as amended, restated or otherwise modified by that certain Amended and Restated Loan Agreement, amended and restated deeds of trust, and additional loan documents, dated
as of the date hereof. 
 “Connecticut/Santa Monica Loan Documents” shall mean the documents evidencing the
Connecticut/Santa Monica Financing, and any future refinancing thereof. 
 “Contributing Member” shall have the
meaning set forth in Section 6.5. 
 “Costs” shall have the meaning set forth in Section 4.3(a).

 “Depreciation” shall mean, for each Fiscal Year, an amount equal to the depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its Adjusted Basis at the beginning of the Fiscal Year, Depreciation shall be an amount which bears the same
ratio to the beginning Carrying Value as the federal income tax depreciation, amortization or other cost recovery deduction for the Fiscal Year bears to such beginning Adjusted Basis; but if the Adjusted Basis of an asset at the beginning of a
Fiscal Year is zero, Depreciation shall be determined with reference to the beginning Carrying Value using any reasonable method selected by the Tax Matters Member. 
 “Effective Date” shall have the meaning set forth in the Preamble. 
 “11% Cumulative Return” means, (i) for CHT, as of any date, the amount, if any, that would be required to be distributed on such date so that the aggregate distributions to CHT
pursuant to Section 8.1(a)(i), Section 8.1(b), Section 8.2(a)(i) and Section 8.2(b)(iii) provide a cumulative, 

  
 6 

 
annually compounded return of 11% per annum on CHT’s Capital Contributions to the Company, and (ii) for Sunrise, as of any date, the amount, if any, that would be required to be
distributed on such date so that the aggregate distributions to Sunrise pursuant to Section 8.1(a)(ii), Section 8.1(b), and Section 8.2(a)(ii) provide a cumulative, annually compounded return of 11% per annum on Sunrise’s
Capital Contributions to the Company. Such amount will be calculated on the basis of the actual number of days elapsed from and including the date on which each Capital Contribution is accepted by the Company to and including the dates that
distributions constituting a return of such Capital Contributions were made. 
 “Eligibility Requirements”
means, with respect to any Person, that such Person (i) has total assets (in name or under management) in excess of $500,000,000 and (ii) (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus,
market capitalization or shareholder’s equity of at least $250,000,000. 
 “Emergency Expenses” shall have
the meaning set forth in a Management Agreement. 
 “EO13224” shall have the meaning set forth in
Section 4.7. 
 “Escrow Agent” shall have the meaning set forth in Section 9.5(a)(iii). 

“Escrow Agreement” shall have the meaning set forth in Section 9.5(a)(iii). 

“Escrow Funds” shall have the meaning set forth in Section 9.5(a)(iii). 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 “Excluded Property” shall mean, with respect to each Facility: (a) any right, title or
interest in the name “Sunrise” or “Sunrise Senior Living,” any combination or variation thereof or any other trademark or trade name used by Sunrise or its Affiliates, (b) all property owned by Sunrise or any of its
Affiliates, not normally located at the Facility and used, but not exclusively, in connection with the development of the Facilities; and (c) all items, tangible or intangible, relating to a Facility which Sunrise or any of its Affiliates
reasonably considers proprietary, including, without limitation, any item with the Sunrise name or logo imprinted on it. 

“Facility” shall mean each senior living facility and assisted living facility listed on Schedule 1.1 and shall
include all real property, including, without limitation, the Improvements and related personal property comprising each such Facility (and shall exclude any Excluded Property) and owned by a Facility Entity. 

“Facility Documents” shall mean, with respect to a particular Facility, (a) a Management Agreement, (b) the
Manager Pooling Agreement, (c) with respect to each Facility other than the Connecticut Avenue Facility, an Operating Lease and (d) all other agreements relating to the Facility. 

“Facility Entity” shall mean a limited liability company or limited partnership Subsidiary which owns the fee interest
in, or is the ground lessee of, a Facility, including, without limitation, the Connecticut Avenue Facility Owner and any Subsidiary formed by the Company pursuant to this Agreement for the purpose of acquiring, owning, developing, financing,
constructing, operating and/or selling a Facility. 

  
 7 

 “Facility Expenses” shall have the meaning set forth in a Management
Agreement. 
 “Facility Manager” shall mean Sunrise Senior Living Management, Inc., a Virginia corporation, or
any successor manager under the Management Agreements. 
 “FF&E Estimate” shall have the meaning set forth
in a Management Agreement. 
 “Fiscal Year” shall mean the fiscal year of this Company, which shall be the
calendar year; provided that the first Fiscal Year of the Term shall commence on the Effective Date and shall end on the last day of the calendar year in which the Effective Date occurs and the last Fiscal Year of the Term shall end on the last day
of the Term and shall commence on the first day of the calendar year in which such last day occurs. 
 “Five-Pack
Facilities” shall mean the following Facilities described on Schedule 1.1 attached hereto: (i) Sunrise of Metairie , (ii) Sunrise at Siegen, (iii), Sunrise of Gilbert, (iv) Sunrise of Louisville, and (v) Sunrise
at Fountain Square. 
 “Five-Pack Financing” means the new mortgage indebtedness secured by the Five-Pack
Facilities, issued on or about the Effective Date, as evidenced by the Amended and Restated Loan Agreement and certain additional loan documents made by the respective Facility Entities and Operating Lessees of the Five-Pack Facilities with respect
to the Five-Pack Financing as of the date hereof. 
 “Five-Pack Loan Documents” shall mean the documents
evidencing the Five-Pack Financing, and any future refinancing thereof. 
 “GAAP” shall mean generally accepted
accounting principles in the United States of America. 
 “Gross Revenues” shall have the meaning set forth in
a Management Agreement. 
 “Improvements” shall mean all structures and buildings located on the Property.

 “Independent Accountant” shall have the meaning set forth in Section 12.1(c). 

“Indemnified Person” shall have the meaning set forth in Section 4.3(a). 

“Index” shall have the meaning set forth for such term in a Management Agreement. 

“Initial Arbitrator” shall have the meaning set forth in Section 13.7(b). 

“Interest” shall mean the entire limited liability company interest of a Member in the Company at any particular time,
including, without limitation, the right of such Member to any and all benefits to which a Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this
Agreement. For purposes of clarity, the Interest of CHT shall include CHT’s rights and obligations as Managing Member hereunder. 

  
 8 

 “Internal Rate of Return” shall mean, the internal rate of return
calculated by using a “XIRR” function using exact dates for all contributions and disbursements made by or to the Members. Any payments received from a Non-Contributing Member to repay a Member Loan shall not be included in the internal
rate of return calculation. 
 “IRS” shall mean the Internal Revenue Service and any successor agency or entity
thereto. 
 “Lender” shall mean The Prudential Insurance Company of America, a New Jersey corporation, or the
lender under any future refinancing. 
 “Lien” shall mean any mortgage, deed of trust, deed to secure debt,
lien (statutory or other), pledge, hypothecation, assignment, preference, priority, security interest, or any other encumbrance or charge on or affecting real or personal property, or any portion thereof, or any interest therein (including, without
limitation, any conditional sale or other title retention agreement, any sale-leaseback, any financing lease having a similar economic effect to any of the foregoing, the filing of any financing statement or other similar instrument under the UCC or
any comparable law of any jurisdiction, domestic or foreign, and mechanics’, materialmen’s and any other similar lien or encumbrance). 
 “Loan Documents” shall mean, collectively, the Connecticut/Santa Monica Loan Documents and the Five-Pack Loan Documents. 

“Major Decisions” shall have the meaning set forth in Section 3.5. 

“Management Agreement” shall mean (i) with respect to the Connecticut Avenue Facility, a Management Agreement among
the Company, Facility Manager and Connecticut Avenue Facility Owner, and (ii) with respect to each Facility other than the Connecticut Avenue Facility, a Management Agreement among the Company, Facility Manager and the applicable Operating
Lessee, each such Management Agreement described in clause (i) or (ii) having been executed or to be executed in connection with the management of the Facility, as it may hereafter be amended or modified from time to time. 

“Management Agreement Guaranty” shall mean that certain Guaranty by the Company in favor of the Facility Manager, dated
as of the Effective Date, as it may hereafter be amended or modified from time to time. 
 “Manager Pooling
Agreement” shall mean that certain Manager Pooling Agreement by and among all of the Operating Lessees, Connecticut Avenue Facility Owner, the Facility Manager and the Company for the pooled management of the Facilities, dated as of the
Effective Date, as it may hereafter be amended or modified from time to time. 
 “Managing Member” shall mean
CHT or any other Member that succeeds CHT in its role as managing member of the Company pursuant to and in accordance with the terms hereof. 
 “Mandatory Capital Contribution” shall have the meaning set forth in Section 6.3. 
 “Material Contract” shall mean any contract, lease, license or other agreement pursuant to which the Company is obligated to pay or expend more than $50,000 in any Fiscal Year.

  
 9 

 “Member” shall mean each of CHT, Sunrise and the Managing Member, and any
Substituted Member who is admitted as a member of the Company after the Effective Date. 
 “Member Loan” shall
have the meaning set forth in Section 6.5. 
 “Member Loan Rate” shall mean five percent (5%) per
annum, compounded annually. 
 “Member Minimum Gain” shall mean the amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3). 

“Member Nonrecourse Debt” shall have the same meaning as the term “partner nonrecourse debt” set forth in
Regulations Section 1.704-2(b)(4). 
 “Member Nonrecourse Deductions” shall have the same meaning as
“partner nonrecourse deductions” set forth in Regulations Section 1.704-2(i)(1) and (2). The amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Fiscal Year equals the excess, if any, of the net
increase, if any, in the amount of Member Minimum Gain attributable to such Member Nonrecourse Debt during that Fiscal Year over the aggregate amount of any distributions during that Fiscal Year to the Member that bears the economic risk of loss for
such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined according to the
provisions of Regulations Section 1.704-2(i)(2). 
 “Mezz Lender” shall mean RCG LV DEBT IV NON-REIT
ASSETS HOLDINGS, LLC, a Delaware limited liability company, having an address at 7 Penn Plaza, Suite 512, New York, New York 10001, together with its successors and assigns, successors and assigns, or the mezzanine lender under any future mezzanine
refinancing permitted in accordance with the terms of this Agreement (including, without limitation, Section 9.5(a) hereof). 
 “Mezz Loan” shall mean the principal amount of, accrued and unpaid interest thereon, and any and all obligations for late charges, default interest, exit fees, prepayment or yield
maintenance charges, protective advances, expenses or fees, legal fees and similar items and all other obligations of CHT to the Mezz Lender under and pursuant to, that certain loan entered into on or about the Effective Date and evidenced by the
Mezz Loan Documents and secured by CHT’s Interest. 
 “Mezz Loan Documents” shall mean the documents
evidencing the Mezz Loan listed and described on Schedule 1.3 attached hereto, and any future refinancing thereof permitted in accordance with the terms of this Agreement (including, without limitation, Section 9.5(a) hereof). 

“Net Operating Cash Flow” for any month or Fiscal Year, shall mean the excess, if any, of (a) the sum of
(i) the amount of all cash receipts of the Company during such month or Fiscal Year from whatever source plus (ii) any working capital or any reserves in the form of cash of the Company existing at the start of such month or Fiscal
Year less (b) the sum of (i) all cash amounts paid or payable (without duplication) in that period on account of any expense incurred in connection 

  
 10 

 
with the Company’s business plus (ii) any cash reserves the Managing Member determines may be required for the working capital, capital expenditures and future needs of the
Company or any Facility Entity. Net Operating Cash Flow shall exclude Capital Proceeds. 
 “Non-Contributing
Member” shall have the meaning set forth in Section 6.5. 
 “Non-Discretionary Items” shall mean
(i) real estate taxes, (ii) insurance premiums, (iii) regular payments of debt service and any reserve amounts due under the Refinancing or any future refinancing thereof (but excluding the principal amount of such indebtedness at the
maturity date of such Refinancing, as the same may be accelerated), (iv) amounts necessary to pay judgments or liens against (a) the Company, (b) any of the Company assets, (c) any of the Subsidiaries or (d) any
Subsidiary’s assets (including, without limitation, the Property), and which, in each case, have been finally adjudicated, (v) any amounts required to be withheld pursuant to Section 1446 of the Code (or similar provisions of state or
local law), (vi) amounts currently due and payable, or to become due and payable within thirty (30) days, under any leases, service contracts or other agreements or contractual obligations (to the extent not entered into in violation of
this Agreement) to which the Company or any of the Subsidiaries is a party or obligor, whether or not the same are categorized for accounting purposes as ordinary operating expenses or capital improvements, and (vii) other amounts that are
required to be paid in the event of an emergency. 
 “Nonrecourse Deductions” shall have the meaning set forth
in Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a Fiscal Year equals the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during that Fiscal Year over the aggregate amount of any
distributions during that Fiscal Year of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain, determined according to the provisions of Section 1.704-2(c) of the Regulations. 

“Nonrecourse Liability” shall have the meaning set forth in Sections 1.704-2(b)(3) and 1.752-1(a)(2) of the Regulations.

 “Non-Transferor Member” shall have the meaning set forth in Section 12.3(a). 

“Objection Notice” shall have the meaning set forth in Section 13.7(b). 

“OD Loans” shall have the meaning set forth in a Management Agreement. 

“OFAC” shall have the meaning set forth in Section 4.7. 

“Offer Amount” shall have the meaning set forth in Section 12.2(a). 

“Offeree” shall have the meaning set forth in Section 12.2(a). 

“Offeror” shall have the meaning set forth in Section 12.2(a). 

“Operating Lease” shall mean, with respect to each Facility other than the Connecticut Avenue Facility, that certain
lease agreement by and between a Facility Entity and an Operating Lessee. 
 “Operating Lessee” shall mean each
of the following Subsidiaries of the Company: (i) CHTSun Two Metairie LA Senior Living, LLC, a Delaware limited liability company, (ii)

  
 11 

 
CHTSun Gilbert AZ Senior Living, LLC, a Delaware limited liability company, (iii) CHTSun Baton Rouge LA Senior Living, LLC, a Delaware limited liability company, (iv) CHTSun Three
Lombard IL Senior Living, LLC, a Delaware limited liability company (v) Sunrise Louisville KY Senior Living, LLC, a Kentucky limited liability company, and (vi) AL Santa Monica Senior Housing, LP, a Delaware limited partnership.

 “Option Price” shall have the meaning set forth in Section 12.1(c). 

“Organizational Document” shall mean, with respect to any Person: (a) in the case of a corporation, such
Person’s certificate of incorporation and by-laws, and any shareholder agreement, voting trust or similar arrangement applicable to any of such Person’s authorized shares of capital stock; (b) in the case of a partnership, such
Person’s certificate of limited partnership, partnership agreement, voting trusts, statement of qualification or similar arrangements applicable to any of its partnership interests; (c) in the case of a limited liability company, such
Person’s certificate of formation or articles of organization, limited liability company operating agreement or other document affecting the rights of holders of limited liability company interests; or (d) in the case of any other legal
entity, such Person’s organizational documents and all other documents affecting the rights of holders of equity interests in such Person. 
 “Original Agreement” shall have the meaning set forth in the Recitals. 
 “Partially Adjusted Capital Account” shall mean, with respect to any Member for any Fiscal Year, the Capital Account balance of such Member at the beginning of such period, adjusted as
set forth in the definition of Capital Account for all contributions and distributions during such period and all special allocations pursuant to Section 7.3 with respect to such period but before giving effect to any allocation with respect to
such period pursuant to Section 7.2. 
 “Payment Amount” shall mean, as applicable, (i) Ten Million
Six Hundred Thousand and 00/100 Dollars ($10,600,000.00) if the Change of Control Purchase Option Closing Date occurs at any time prior to the end of the sixth month of the first Company Year, (ii) Eleven Million Four Hundred Thousand and
00/100 Dollars ($11,400,000.00) if the Change of Control Purchase Option Closing Date occurs at any time from and after the beginning of the seventh month of the first Company Year through and including the last day of the first Company Year,
(iii) Seventeen Million Seven Hundred Thousand and 00/100 Dollars ($17,700,000.00) if the Change of Control Purchase Option Closing Date occurs at any time from and after the beginning of the second Company Year through and including the last
day of the sixth month of the second Company Year, and (iv) Eighteen Million Five Hundred Thousand and 00/100 Dollars ($18,500,000.00) if the Change of Control Purchase Option Closing Date occurs at any time from and after the beginning of the
seventh month of the second Company Year through and including the last day of the second Company Year. 
 “Percentage
Interest” shall mean, with respect to any Member, the percentage interest listed for each Member in Schedule 6.1, as the same may be adjusted pursuant to the terms of this Agreement. 

“Person” shall mean any individual, partnership, corporation, limited liability company, trust or other legal entity.

 “Pool Subsidiaries” shall have the meaning set forth in Section 2.11(e). 

  
 12 

 “Pooled OD Loans” shall have the meaning set forth in the Manager Pooling
Agreement. 
 “Prohibited Person” shall have the meaning set forth in Section 4.7. 

“Profits and Losses” shall mean, for each Fiscal Year or other period, an amount equal to the Company’s taxable
income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included
in taxable income or loss), with the following adjustments: 
 (a) Any income of the Company that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss; 
 (b)
Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses, shall be subtracted from such taxable income or loss; 
 (c) In the event the Carrying Value of any Company
asset is adjusted pursuant to subparagraph (b) or subparagraph (c) of the definition of Carrying Value herein, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses; 
 (d) Gain or loss resulting from any disposition of Company property with respect to which gain
or loss is recognized for federal income tax purposes shall be computed by reference to the Carrying Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Carrying Value; 

(e) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the terms of this Agreement; and 
 (f) Notwithstanding any other provision of this Agreement, any items which are specially allocated pursuant to Section 7.3 shall not be taken into account in computing Profits or Losses. In addition,
any items which are specially allocated pursuant to Sections 7.2(a) or 7.2(b) shall not be taken into account in computing Profits and Losses for purposes of Section 7.2(c). 

“Prohibited Transferee” shall mean (a) a Competitor of Sunrise, (b) HCP, (c) Ventas, or (d) any
Person (including any Person directly or indirectly controlling, controlled by or under common control with a Person) which: (i) has been convicted of, or plead guilty to, a felony, (ii) entitled to sovereign immunity, (iii) is
involved (or has been involved within the preceding five (5) years) in a material litigation adverse to Sunrise or an Affiliate of Sunrise, (iv) within the preceding five (5) years, has filed a petition under any insolvency statute,
made a general assignment for the benefit of its creditors, commenced a proceeding for the appointment of a receiver, trustee, liquidator or conservator, filed a petition seeking reorganization or liquidation or similar relief under any applicable
law or statute, or has been subject to any of foregoing, or (v) is a Prohibited Person. 

  
 13 

 “Property” shall mean the real property owned by any Facility Entity and
upon which a Facility has been constructed. 
 “Proposed Budget” shall have the meaning set forth in
Section 5.5. 
 “Purchase Option Closing Date” shall have the meaning set forth in Section 12.1(d).

 “Purchase Option Lockout Period” shall have the meaning set forth in Section 12.1(c). 

“Purchase Option Notice” shall have the meaning set forth in Section 12.1(c). 

“Purchase Option Termination Date” shall have the meaning set forth in Section 12.1(c). 

“Purchaser” shall have the meaning set forth in Section 12.5(a). 

“Qualified Transferee” shall mean any of (A) Sunrise or an Affiliate of Sunrise, (B) RCG Longview Debt Fund
IV, L.P. or an Affiliate thereof, or (C) a Person satisfactory to Sunrise (not to be unreasonably withheld, delayed or conditioned) that satisfies each of the following conditions: (i) such Person is not a Prohibited Transferee;
(ii) such Person, together with its Affiliates, satisfies the Eligibility Requirements; and (iii) such Person either (a) is engaged in the business of making loans secured by, or owning, commercial real estate assets substantially
similar to the Facilities (including mezzanine loans with respect to commercial real estate assets substantially similar to the Facilities), or (b) derives a material portion of its revenue from, and maintains an investment portfolio of
interests in, entities engaged in the ownership of commercial real estate assets substantially similar to the Facilities. 

“Quarterly Interest Rate Differential Amount” shall mean, with respect to any particular calendar quarter, the amount
specified opposite such calendar quarter on Schedule 1.2 attached hereto, as the same may be hereafter adjusted pursuant to and in accordance with Section 8.3(b) hereof. 

“Refinancing” shall mean, collectively, the Five-Pack Financing and the Connecticut/Santa Monica Financing. 

“Regulations” shall mean the permanent and temporary regulations, and all amendments, modifications and supplements
thereof, from time to time promulgated by the Department of the Treasury under the Code. 
 “Rejection Notice”
shall have the meaning set forth in Section 12.3(a). 
 “Reply Notice” shall have the meaning set forth in
Section 12.2(b). 
 “Resident Agreement Documents” means the resident agreements with respect to the
residents of the Facilities approved by the Members as of the Effective Date. 
 “Restricted Transferee” shall
have the meaning set forth in Section 9.5. 
 “ROFO Amount” shall have the meaning set forth in
Section 12.3(a). 
 “ROFO Closing Date” shall have the meaning set forth in Section 12.5(a). 

  
 14 

 “ROFO Recipient” shall have the meaning set forth in Section 12.5(a).

 “Secondary Arbitrator” shall have the meaning set forth in Section 13.7(b). 

“Secondary Objection Notice” shall have the meaning set forth in Section 13.7(b). 

“Seller” shall have the meaning set forth in Section 12.5(a). 

“Selling Amount” shall have the meaning set forth in Section 12.2(a). 

“Subsidiary” shall mean any entity in which the Company holds any ownership interests, whether directly or indirectly
through one or more Persons. 
 “Substituted Member” shall mean any Person admitted to the Company as a Member
pursuant to the provisions of Section 9.3. 
 “Sunrise” shall have the meaning set forth in the preamble
of this Agreement, and shall include any of its assignees or transferees to the extent permitted in this Agreement, but only so long as any such Person continues in its capacity as a Member in the Company. 

“Sunrise Change of Control Event” shall mean the occurrence of any of the following: (i) the acquisition by any
“person” or “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), in a single transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting power of the securities
of Sunrise or any direct or indirect parent thereof; (ii) the consummation of a reorganization, merger or consolidation of Sunrise or any direct or indirect parent thereof with any Person (a “Business Combination”), in each
case, in which the shareholders of Sunrise or such Affiliate, as the case may be, retain, directly or indirectly, less than 50% of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation
resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Sunrise, such direct or indirect parent, or all or substantially all of the Sunrise’s or such direct or indirect
parent’s assets either directly or through one or more subsidiaries), or (iii) the sale, lease, transfer or other conveyance, in one or a series of related transactions, of all or substantially all of the assets of Sunrise, or any direct
or indirect parent thereof, and their respective subsidiaries, taken as a whole, to any person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision). 

“Sunrise Contributed Interests” shall mean Sunrise’s 100% direct ownership interest in Sun IV LLC, a Delaware
limited liability company. 
 “Sunrise Distribution Amount” shall have the meaning set forth in
Section 6.1(a). 
 “Sunrise Guarantor” shall mean Sunrise or another Affiliate of Sunrise acceptable to
Lender. 
 “Sunrise Person” shall mean Sunrise or an Affiliate of Sunrise. 

“Sunrise Purchase Option” shall have the meaning set forth in Section 12.1(c). 

  
 15 

 “Sunrise Recourse Claim” shall mean a Claim made under an Affiliate
Guaranty to the extent resulting from the gross negligence, willful misconduct or fraud of a Sunrise Guarantor or any Affiliate of a Sunrise Guarantor.  
 “Target Capital Account” shall mean, with respect to any Member for any Fiscal Year or other period, an amount (which may be either a positive or negative balance) equal to (a) the
hypothetical distribution (if any) such Member would receive if all Company assets, including cash, were sold for cash equal to their Carrying Values (taking into account any adjustments to Carrying Values for such period), all Company liabilities
were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability of the Company, to the Carrying Values of the assets securing such liability), and the net proceeds of such sale to the Company (after satisfaction
of said liabilities) were distributed in full pursuant to Section 10.3 on the last day of such period, minus (b) the sum of (i) such Member’s share of Company Minimum Gain and Member Minimum Gain immediately prior to such deemed
sale, plus (ii) the amount, if any, which such Member is obligated to contribute to the capital of the Company pursuant to the terms of this Agreement as of the last day of such period (but only to the extent such capital contribution
obligation has not been taken into account in determining such Member’s share of Member Minimum Gain). 
 “Tax
Matters Member” shall mean the Managing Member. 
 “Term” shall have the meaning set forth in
Section 2.2. 
 “Third Party Costs and Expenses” shall mean, with respect to each Claim made against a
Sunrise Guarantor or a CHT Guarantor, as applicable, the reasonable third party costs and expenses actually incurred by a Sunrise Guarantor or a CHT Guarantor, as applicable, in connection with such Claim, including, without limitation, reasonable
costs and expenses (including legal fees and expenses) of settlement discussions, litigation, arbitration, mediation or other proceedings relating to the Claim. 
 “Total Capital Contribution” shall mean, with respect to any Member, the Initial Capital Contributions and all additional Capital Contributions made by such Member. 

“Transfer” shall mean, with respect to a specified interest, any transfer, sale, pledge, hypothecation, encumbrance,
assignment or other disposition of any sort, voluntary or involuntary, whether by operation of law or otherwise, of all or any portion of such interest, or any agreement or arrangement to do any of the foregoing. 

“Transfer Agreement” means that certain Transfer Agreement dated as of June 4, 2012 by and among Sunrise, CHT
Partners, LP, a Delaware limited partnership, and Facility Manager, as amended by that certain letter agreement dated as of June 4, 2012 and that certain First Amendment to Transfer Agreement dated as of June 25, 2012. 

“Transfer Expenses” mean any customary transaction expenses in connection with a sale of the Facilities, including,
without limitation, brokerage commissions, transfer taxes, loan prepayment fees and other costs, to the extent the same are saved in the proposed Transfer between the Members; such expenses to be reasonably determined by an independent accountant of
the Company in a manner consistent with then customary market practices for properties similar to the Facilities and to be allocated equitably among the Members in accordance with their Percentage Interests. 

  
 16 

 “Transfer Notice” shall have the meaning set forth in Section 12.3(a).

 “Transfer Price” shall have the meaning set forth in Section 12.3(a). 

“Transfer Price Notice” shall have the meaning set forth in Section 12.3(a). 

“Transferor Member” shall have the meaning set forth in Section 12.3(a). 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of Delaware, as amended from time to time, or any
corresponding provision(s) of succeeding law. 
 “Venue” shall have the meaning set forth in
Section 13.7(a). 
 1.2 General Interpretive Principles. 

(a) All references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise
specified. 
 (b) Unless otherwise specified, the words hereof, herein and hereunder and words of similar import will refer to
this Agreement as a whole and not to any particular provision of this Agreement. 
 (c) If the context requires, the use of any
gender will also refer to any other gender, and the use of either number will also refer to the other number. The word including is not exclusive; if exclusion is intended, the word comprising is used instead. The word or will be construed to mean
and/or unless the context clearly prohibits that construction. 
 (d) All terms that are defined by the UCC have the same
meanings assigned to them by the UCC, unless (and to the extent) they are varied by this Agreement. 
 (e) All accounting terms
not specifically defined have the meanings determined by reference to GAAP. 
 (f) Unless the context prevents this
construction, a reference to a Facility will be construed to refer to all or any portion of the Facility. 
 (g) The term
mortgage shall mean a mortgage, deed of trust, deed to secure debt or similar instrument, as applicable, and mortgagee means the secured party under a mortgage. 
 (h) The term deemed means conclusively presumed. The absence of a conclusive presumption does not mean that a particular circumstance does not exist or that a particular condition is not satisfied; it
just means that there is no conclusive presumption. 
 (i) The term presumed means presumed subject to rebuttal and the burden
of proof is on the Person seeking to rebut the fact presumed. 
 (j) All yields and interest rates will be calculated on a the
basis of a 360-day year. 

  
 17 

 (k) Any consent required by a Member that is described in this Agreement as not to be
unreasonably withheld shall mean that such consent shall not be unreasonably withheld, conditioned or delayed. 
 ARTICLE 2

 THE COMPANY AND ITS BUSINESS 
 2.1 Company Name. The business of the Company shall be conducted under the name of “CHTSun Partners IV, LLC” in the State of Delaware and under such name or such assumed names as the
Managing Member deems necessary or appropriate to comply with the requirements of any other jurisdiction in which the Company may be required to qualify. 
 2.2 Term. The term of the Company shall have commenced on the date of the filing of the Certificate of Formation with the State of Delaware and shall continue in full force and effect until the
date that is the later of (a) the thirty (30) year anniversary of the Effective Date or (b) the date on which the term of the last Management Agreement expires, including any renewals thereof, unless sooner terminated as hereinafter
provided (“Term”). 
 2.3 Filing of Certificate and Amendments. The Certificate of Formation was filed
with the Secretary of State of the State of Delaware. The Managing Member hereby agrees to cause the execution and filing of any required amendments to the Certificate of Formation and shall do all other acts requisite for the constitution of the
Company as a limited liability company pursuant to the laws of the State of Delaware or any other applicable law. 
 2.4
Business; Scope of Members’ Authority. 
 (a) The Company is formed for the purpose of (i) directly or through
Subsidiaries, engaging in the acquisition, ownership, development, financing, construction, management and sale of senior living facilities throughout the United States, and (ii) transacting any and all lawful business that is incident,
necessary or appropriate to accomplish the foregoing. 
 (b) Except as otherwise expressly and specifically provided in this
Agreement, no Member shall have the authority to bind, to act for, or to assume any obligation or responsibility on behalf of, the Company or any other Member. Neither the Company nor any Member shall, by virtue of executing this Agreement, be
responsible or liable for any indebtedness or obligation of any other Member incurred or arising either before or after the Effective Date of this Agreement, except, as to the Company, as to those joint responsibilities, liabilities, indebtedness,
or obligations expressly assumed by the Company as of the Effective Date or incurred after the Effective Date pursuant to and as limited by the terms of this Agreement. 
 2.5 Principal Office; Registered Agent. The principal office of the Company shall initially be at the offices of CHT at c/o CNL Healthcare Trust, Inc., 450 South Orange Avenue, Orlando, Florida
32801 or such other place as the Members may from time to time determine. The registered agent and the registered address, respectively, of the Company shall be National Registered Agents, Inc. at c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904. The Managing Member may elect to change the Company’s registered agent and the Company’s registered and principal offices by complying with the relevant requirements of the Act. 

  
 18 

 2.6 Authorized Persons. The Person who executed, delivered and filed the Certificate
of Formation with the Office of the Delaware Secretary of State is an authorized person within the meaning of the Act, and upon the filing of the Certificate of Formation with the Office of the Delaware Secretary of State, his or her powers as an
authorized person ceased. The Managing Member is hereby designated as an “authorized person” within the meaning of the Act. Any one of such authorized persons is hereby authorized to execute, deliver and file any other certificates or
documents (and any amendments and/or restatements thereof) on behalf of the Company. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation as provided in the Act. 

2.7 Representations by Members. Each Member represents, warrants, covenants and acknowledges that (a) it is a corporation,
limited liability company or limited partnership duly organized or formed and is in good standing in the jurisdiction in which it has been organized or formed, (b) it has the power and authority to authorize the execution, delivery and
performance of this Agreement, (c) it has been duly authorized and is otherwise duly qualified to purchase and hold its Interest and to execute and deliver this Agreement and all other instruments executed and delivered on behalf of it in
connection with the acquisition of its Interest, (d) the person or persons executing and delivering this Agreement on behalf of a Member are duly authorized to do so, (e) the consummation of such transactions will not result in a breach or
violation of, or a default under, its charter or bylaws, if such Member is a corporation, or its certificate of limited partnership or its partnership agreement, if such Member is a partnership, or its operating agreement if such Member is a limited
liability company, or any existing agreement by which it or any of its assets are bound, and (f) this Agreement is a valid and binding agreement on the part of such Member enforceable in accordance with its terms against such Member, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors and general principles of equity. 

2.8 Organization Expenses. Each Member shall bear the costs of its own legal counsel and other professional advisors in connection
with the negotiation of this Agreement. All out-of-pocket expenses that have been incurred by or on behalf of the Company by a Sunrise Person or a CHT Person on or prior to the Effective Date shall be expenses of the Company; provided, that, the
Members acknowledge that certain expenses incurred prior to the Effective Date shall be governed in accordance with the Transfer Agreement. 
 2.9 Opt-in to Article 8. 
 (a) Each limited liability company interest in
the Company shall constitute a “security” within the meaning of, and be governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the States of Delaware
(the “DEUCC”) and Florida (as the Company hereby “opts-in” to such provisions), and (ii) the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to
Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995. Each Member hereby agrees that its interest in the
Company shall for all purposes be personal property. Each Member has no interest in specific Company property. 

  
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 (b) The Company shall maintain books for the purposes of registering the transfer of the
limited liability company interests of the Company. Notwithstanding anything in this Agreement to the contrary, the transfer of limited liability company interests in the Company requires the delivery of an endorsed Share Certificate (as defined
below) and recordation of such transfer in the books and records of the Company. 
 (c) Upon the issuance of limited liability
company interests in the Company to any Person in accordance with the provisions of this Agreement, the Company shall issue one or more non-negotiable certificates in the name of such Person substantially in the form of Exhibit C attached hereto (a
“Share Certificate”), which evidences the ownership of the limited liability company interests in the Company of such Person. Each such Share Certificate shall be denominated in terms of the percentage of the limited liability
company interests in the Company evidenced by such Share Certificate and shall be signed by an appropriate officer of Managing Member on behalf of the Company. Each Share Certificate shall bear a legend stating the language set forth in the first
sentence of clause (a) of this Section 2.9. Additionally, each Share Certificate shall contain the following legend: “THE TRANSFER OF THIS SHARE CERTIFICATE AND THE LIMITED LIABILITY COMPANY INTEREST REPRESENTED HEREBY IS RESTRICTED
AS DESCRIBED IN THE LIMITED LIABILITY COMPANY AGREEMENT.” 
 (d) The Company shall issue a new Share Certificate in place
of any Share Certificate previously issued if the holder of the limited liability company interests in the Company represented by such Share Certificate, as reflected on the books and records of the Company: 

 

	 	(i)	makes proof by affidavit, in form and substance satisfactory to the Company, that such previously issued Share Certificate has been lost, stolen or destroyed;

  

	 	(ii)	requests the issuance of a new Share Certificate before the Company has notice that such previously issued Share Certificate has been acquired by a purchaser for value
in good faith and without notice of an adverse claim; 

  

	 	(iii)	if requested by the Company, delivers to the Company a bond, in form and substance satisfactory to the Company, with such surety or sureties as the Company may direct,
to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the previously issued Share Certificate; and 

 

	 	(iv)	satisfies any other reasonable requirements imposed by the Company. 

 (e) Upon a Member’s transfer in accordance with the provisions of this Agreement of any or all limited liability company interests in the Company represented by a Share Certificate, the transferee of
such limited liability company interests in the Company shall deliver such Share Certificate to the Company for cancellation (executed by the transferor on the reverse side thereof), and the Company shall thereupon issue a new Share Certificate to
such transferee for the percentage of limited liability company interests in the Company being transferred and, if applicable, cause to be issued to such Member a new Share Certificate for that percentage of limited liability company interests in
the Company that were represented by the canceled Share Certificate and that are not being transferred. 

  
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 (f) Notwithstanding any provision of this Agreement to the contrary, to the extent that any
provision of this Agreement is inconsistent with any non-waivable provision of Article 8 of the DEUCC, such provision of Article 8 of the DEUCC shall control. 
 2.10 Securities Laws Restrictions. The Interests have not been registered under the Securities Act of 1933, as amended, or under the securities laws of the State of Delaware or any other
jurisdiction. Consequently, the Interests may not be sold, Transferred, assigned, pledged, hypothecated or otherwise disposed of, except in accordance with the provisions of such laws and this Agreement. 

2.11 Separateness Covenants. Notwithstanding anything to the contrary contained herein or in any other document governing the
formation, management or operation of the Company, for so long as the Connecticut/Santa Monica Financing or the Five-Pack Financing remains outstanding and not discharged in full, the following shall govern: Except as provided below with respect to
Operating Lessees, (a) the Company shall not own any assets in addition to its indirect or direct ownership interest in the Pool Subsidiaries, other than any cash, investment accounts (provided that the liability associated with any such
investment account shall be limited to the assets contained in such account) or personal property used in connection with such ownership, as applicable, and (b) the Facilities shall generate substantially all of the gross income of the Company
and there shall be no substantial business being conducted by the Company, either directly or indirectly, other than the business of owning, operating and maintaining indirectly the Facility Entities and the Facilities and the activities incidental
thereto. Notwithstanding the foregoing, Operating Lessees may own its leasehold interest in all the Facilities and any personal property associated therewith; 
 (b) The Company shall not (i) liquidate or dissolve (or suffer any liquidation or dissolution), terminate, or otherwise dispose of, directly, indirectly or by operation of law, all or substantially
all of its assets; (ii) reorganize or change its legal structure without Lender’s prior written consent (not to be unreasonably withheld), except as otherwise expressly permitted under the Loan Documents; (iii) change its name,
address, or the name under which it conducts its business without promptly notifying Lender; (iv) enter into or consummate any merger, consolidation, sale, transfer, assignment, liquidation, or dissolution involving any or all of the assets of
the Company or general partner or any managing member of the Company; or (v) enter into or consummate any transaction or acquisition, merger or consolidation or otherwise acquire by purchase or otherwise all or any portion of the business or
assets of, or any stock or other evidence of beneficial ownership of, any Person; 
 (c) The Company shall not incur any secured
or unsecured debt except for (i) the Connecticut/Santa Monica Financing and the Five-Pack Financing, (ii) Permitted Capital Leases (as defined in the Amended and Restated Loan Agreement), (iii) customary and reasonable short term
trade payables obtained and repaid in the ordinary course of its business, and (iv) unsecured loans whose proceeds shall be used solely for the benefit of the Facility and the Facility Entities and which do not exceed, in the aggregate at any
given time, the amount of Ten Million and No/100 Dollars ($10,000,000.00); 
 (d) The Company shall not amend, modify or
otherwise change its Certificate of Formation or this Agreement in any material term or manner, or in a manner which adversely affects the Company’s existence as a single purpose entity or the Company’s compliance with the Loan Documents;

  
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 (e) To the extent that the Company requires an office, it shall maintain its principal
executive office and telephone and facsimile numbers separate from that of any Affiliate of same (other than the Pool Subsidiaries) and shall conspicuously identify such office and numbers as its own or shall allocate by written agreement fairly and
reasonably any rent, overhead and expenses for shared office space. For the purposes of this Section 2.11, “Pool Subsidiaries” shall mean the Facility Entities, the Operating Lessees, Sun IV, LLC, a Delaware limited liability company,
CHT SL IV TRS Corp., a Delaware corporation, CHTSun Two Pool Two, LLC, a Delaware limited liability company, CHTSun Three Pool One, LLC, a Delaware limited liability company, Santa Monica AL, LLC, a Delaware limited liability company, Santa Monica
GP, LLC, a Delaware limited liability company, and any other Subsidiaries expressly permitted under the Loan Documents; 
 (f)
To the extent that the Company uses stationery, invoices and checks, it shall use its own separate stationery, invoices and checks; 
 (g) The Company shall maintain correct and complete financial statements, accounts, books and records and other entity documents separate from those of any Affiliate of same or any other person or entity
(other than the Subsidiaries), except that the Company’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that the Company is properly
reflected and treated as a separate legal entity; 
 (h) To the extent the Company has bank accounts, it shall maintain its own
separate bank accounts, and shall maintain correct, complete and separate books of account; 
 (i) The Company shall file or
cause to be filed its own separate tax returns, or if applicable, consolidated tax returns; 
 (j) The Company shall hold itself
out to the public (including any of its Affiliates’ creditors) under its own name and as a separate and distinct entity and not as a department, division or otherwise of any Affiliate of same; 

(k) The Company shall observe all customary formalities regarding its existence, including holding meetings and maintaining current and
accurate minute books separate from those of any Affiliate of same; 
 (l) The Company shall hold title to its assets in its own
name and act solely in its own name and through its own duly authorized officers and agents. No Affiliate of same shall be appointed or act as agent of the Company, other than, if applicable, Operating Lessees as operators or Facility Manager as
property manager with respect to the Facilities; 
 (m) The Company shall make investments in the name of the Company directly
by the Company or on its behalf by brokers engaged and paid by the Facility Entities, Operating Lessees or their respective agents; 
 (n) Except as expressly required by Lender in connection with the Connecticut/Santa Monica Financing or the Five-Pack Financing and in writing or pursuant to the Management Agreement Guaranty, the Company
shall not guarantee or otherwise agree to be liable for (whether conditionally or unconditionally), pledge or assume or hold itself out or permit itself to be held out as having guaranteed, pledged or assumed any liabilities or obligations of any
partner 

  
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(whether limited or general), member, shareholder or any Affiliate of the Company, as applicable, or any other party (other than of the Pool Subsidiaries, to the extent of indebtedness permitted
under the Loan Documents), except in connection with the Permitted Member Loans (as defined in the Amended and Restated Loan Agreement) and Permitted Capital Leases; nor shall it make any loan (other than to (i) Pool Subsidiaries that are not
Facility Entities or Operating Lessees and (ii) any Facility Entities or Operating Lessees to the extent that such loans qualify as Permitted Member Loans under Section 5.01(h) of the Amended and Restated Loan Agreement); 

(o) The Company shall use commercially reasonable efforts to remain solvent and shall pay its own debts and liabilities out of its own
funds and assets (to the extent of such funds and assets) as the same shall become due; provided, however, the foregoing shall not require any Member to make additional capital contributions to the Company; 

(p) The Company shall separately identify, maintain and segregate its assets; 

(q) The Company’s funds (i) shall be deposited or invested in the Company’s name, (ii) shall not be commingled with
the funds of any Affiliate of the Company or any other person or entity except as may be required in connection with the Manager Pooling Agreement and (iii) shall be used only for the business of Company (including distributions of available
funds); 
 (r) The Company shall maintain any accounts it uses in its own name and with its own tax identification number,
separate from those of any Affiliate of same or any other person or entity (other than the Pool Subsidiaries); 
 (s) The
Company shall maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate of same or other Person; 

(t) The Company shall pay or cause to be paid its own liabilities and expenses of any kind, including but not limited to salaries of its
employees, if any, only out of its own separate funds and assets; 
 (u) The Company shall reflect its ownership interest in all
data and records (including computer records) used by any Facility Entity, Operating Lessees or any Affiliate of same; 
 (v)
The Company shall not invest any of its funds in securities issued by, nor shall the Company acquire the indebtedness or obligation of, any Affiliate of same (other than the Pool Subsidiaries); and 

(w) The Company shall maintain an arm’s length relationship with each of its Affiliates and may enter into contracts or transact
business with its Affiliates only on commercially reasonable terms that are no less favorable to the Company than is obtainable in the market from a person or entity that is not an Affiliate of same (other than the Pool Subsidiaries); provided,
however, the Company shall be permitted to enter into the Manager Pooling Agreement and Management Agreements. 

  
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 ARTICLE 3 
 MANAGEMENT OF COMPANY BUSINESS 
 3.1 Appointment of Managing Member.
CHT will be the initial Managing Member of the Company with the rights and responsibilities set forth in this Agreement. The rights of the Managing Member may not be assigned to any other Person whether voluntarily or by operation of law. The duties
of the Managing Member may not be delegated to any other Person whether voluntarily or by operation of law. Nothing in the preceding sentence is intended to prohibit or restrict the Managing Member from engaging a Sunrise Person, accountants,
lawyers and other professional and independent service providers for the purpose of performing services for the Company. 
 3.2
Duties of Managing Member. Subject to obtaining the unanimous consent of the Members to all Major Decisions as set forth in Section 3.5, the Managing Member will have the authority and the duty to manage the Company and implement
the purposes of the Company in accordance with the terms of this Agreement acting in a prompt and businesslike manner, and exercising such care and skill as a prudent owner with sophistication and experience in owning, operating and managing
facilities similar to the Facilities would exercise in dealing with its own facility. The Managing Member will devote such time to the Company and its business as is reasonably necessary to conduct the operations of the Company and to carry out the
Managing Member’s responsibilities. Subject to Section 2.11 and Section 3.5 the Managing Member shall have the following rights and authority to act on behalf of the Company: 

(a) To execute any contracts on behalf of the Company. 
 (b) To form Subsidiaries, including, without limitation, the Facility Entities and Operating Lessees. 
 (c) To collect revenues generated by the Company and to pay all expenses of the Company as permitted under this Agreement. 
 (d) To establish, maintain and draw upon checking, savings and other accounts in the name of the Company as provided in Section 3.3. 

(e) To make any tax elections to be made by the Company. 
 (f) To use a trade name in the operation of the Company. 
 (g) To enter into, or
cause its Subsidiaries to enter into, all Facility Documents. 
 (h) To take all actions reasonably necessary to cause the
Facility Manager to maintain in full force and effect all licenses, permits, approvals and insurance required for the construction, operation and maintenance of the Facilities. 

(i) To take all other actions reasonably necessary to implement the purposes of the Company. 

(j) To do any and all of the foregoing upon such terms and conditions as the Managing Member in its reasonable discretion determines to
be necessary, desirable or appropriate. 
 The Managing Member may delegate any of the above responsibilities and obligations to
any other Member of the Company upon reasonable advance notice, provided that such Member agrees to such delegation. 

  
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 3.3 Bank Accounts. The Company will maintain separate bank accounts in such banks as
the Managing Member may designate exclusively for the deposit and disbursement of the funds of the Company. All funds of the Company shall be promptly deposited in such accounts. The Managing Member from time to time shall authorize signatories for
such accounts. 
 3.4 Reimbursement for Costs and Expenses. Subject to the terms of the Approved Budget, the Managing
Member will fix the amounts, if any, which the Company will reimburse each Member for any costs and expenses incurred by such Member on behalf and for the benefit of the Company; provided, however, that except as otherwise provided herein or in any
separately-executed agreement relating to the business and operation of the Company, no overhead or general administrative expenses of any Person other than the Company itself shall be allocated to the operation of the Company. The Managing Member
in its capacity as Managing Member and not in its capacity as a Member shall not be entitled to any fee or compensation for performing its duties and obligations under this Agreement. 

3.5 Major Decisions. All of the actions listed on Schedule 3.5 (“Major Decisions”), shall require the
written approval of all Members, which approval shall be in the sole discretion of each Member. If a dispute or deadlock arises with respect to a Major Decision, the Members shall attempt to resolve such dispute during a sixty (60) day meet,
confer and cooling off period (the “Cooling Off Period”), upon the expiration of which without resolution the Members shall submit the Major Decision to arbitration in accordance with the provisions of Section 13.7. Either
party may initiate arbitration. Any Member may propose a Major Decision by sending written notice in accordance with Section 13.2 requesting the approval of such Major Decision; if a Member fails to respond to such request after five
(5) Business Days from receipt of the notice (or such longer time as expressly provided for in the notice), the proposing Member shall send another written notice to the other Member and if such Member fails to respond to such second request
after five (5) Business Days from receipt of the notice (or such longer time as expressly provided for in the notice), such Member will be deemed to have approved the Major Decision set forth in such notice. If CHT approves, or is deemed to
approve, a Major Decision proposed by Sunrise pursuant to this Section 3.5, CHT, in its capacity as Managing Member, shall be obligated to carry out the action that constitutes such Major Decision. 

ARTICLE 4 

RIGHTS AND DUTIES OF MEMBERS 
 4.1 Members Shall Not Have Power to Bind Company. Except as set forth in Section 3.2 in its capacity as Managing Member (if applicable), no Member, acting solely in its capacity as a Member,
shall transact business for the Company nor shall any Member, acting solely in its capacity as a Member, have the power or authority to sign, act for or bind the Company. 
 4.2 Other Activities of the Members. 
 (a) Each of the Members acknowledges
that the Members will continue to pursue their separate business opportunities outside of the Company and the Facilities. Each Member is free to pursue all such activities and may engage in or possess an interest in any other business venture or

  
 25 

 
ventures of any nature and description and in any vicinity whatsoever, independently or with others, including, without limitation, the ownership, development, financing, leasing, operation,
management, syndication, brokerage, subdivision or sale of real property or senior living facilities and related services, and neither the Company nor any other Member shall have any rights in and to such independent ventures or to income or profits
derived therefrom. 
 (b) Each Member may engage or invest in any other activity or venture or possess any interest therein
independently or with others. None of the Members, the Company or any other Person employed by, related to or in any way affiliated with any Member or the Company shall have any duty or obligation to disclose or offer to the Company or the other
Members, or obtain for the benefit of the Company or the other Members, any other activity or venture or interest not made with respect to the Company or any Facility. None of the Company, the Members, the creditors of the Company or any other
Person having any interest in the Company shall have any claim, right or cause of action against any Member or any other Person employed by, related to or in any way affiliated with, any Member (i) by reason of any direct or indirect investment
or other participation, whether active or passive, in any such activity or venture or interest therein, or (ii) any right to any such activity or venture or interest therein or the income or profits derived therefrom. 

4.3 Indemnification. 
 (a) In the event that the Members (including the Managing Member), or any of their direct or indirect partners, directors, officers, stockholders, employees, incorporators, agents, affiliates or
controlling Persons (an “Indemnified Person”), become involved, in any capacity, in any threatened, pending or completed action, proceeding or investigation, in connection with any matter arising out of or relating to the
Company’s business or affairs, the Company will periodically reimburse such Indemnified Person for its reasonable legal and other expenses (including, without limitation, the cost of any investigation and preparation) incurred in connection
therewith, provided that such Indemnified Person shall promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the
Company in connection with such action, proceeding or investigation as provided in the exception contained in the next succeeding sentence. To the fullest extent permitted by law, the Company also will defend, indemnify and hold harmless an
Indemnified Person against any losses, claims, damages, liabilities, obligations, penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements of any kind or nature whatsoever, including, without limitation, reasonable
attorney’s fees and costs (collectively, “Costs”) to which such an Indemnified Person may become subject in connection with any matter arising out of or in connection with the Company’s business or affairs, except to the
extent that any such Costs result solely from the gross negligence, fraud, or willful misconduct of such Indemnified Person. If for any reason (other than the gross negligence, fraud, or willful misconduct of such Indemnified Person) the foregoing
indemnification is unavailable to such Indemnified Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Person as a result of such Costs in such proportion as is appropriate
to reflect not only the relative benefits received by the Company on the one hand and such Indemnified Person on the other hand but also the relative fault of the Company and such Indemnified Person, as well as any relevant equitable considerations.
The reimbursement, indemnity and contribution obligations of the Company under this Section 4.3 shall be in addition to any liability which the Company may otherwise have to any Indemnified Person and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the Company and any Indemnified Person. The reimbursement, indemnity and contribution obligations of the Company under this Section 4.3 shall be limited to the Company
Assets, and no Member shall have any personal liability on account thereof. The foregoing provisions shall survive any termination of this Agreement. 

  
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 (b) To the fullest extent permitted by law, each Member shall defend and indemnify the
Company and the other Members against, and shall hold it and them harmless from, any Costs as and when incurred by the Company or the other Members in connection with or resulting from such indemnifying Member’s gross negligence, fraud, or
willful misconduct. 
 (c) In addition to and not in limitation of any other indemnification obligations set forth in this
Agreement, each Member shall indemnify the other with respect to: (i) any representations and warranties made in the Loan Documents by the borrower thereunder which are made based upon the knowledge of the borrower thereunder; or (ii) any
absolute representations and warranties made in the Loan Documents by the borrower thereunder of which the borrower has knowledge to be incorrect and, in each of the foregoing, (i) and (ii), that (A) are untrue but not known to the
indemnified Member at the closing of the Refinancing to be untrue, (B) can not be cured within the cure period allowed in the Loan Documents with commercially reasonable efforts, and (C) result in an event of default or other liability to
the Member being indemnified. As used in this Section 4.3(c), the term “knowledge” and “known” shall mean, (x) with respect to Sunrise (or with respect to the borrower in the Loan Documents under subclause
(i) above), the current, actual (not constructive, imputed or implied) knowledge, after due inquiry, of Greg Neeb, Philip Kroskin, Edward Burnett and Jerry Liang, and (y) with respect to CHT, the current, actual (not constructive, imputed
or implied) knowledge, after due inquiry, of Stephen H. Mauldin. and Joseph T. Johnson. 
 4.4 Dealing with Members. The
fact that a Member, an Affiliate of a Member, or any officer, director, employee, member, partner, consultant or agent of a Member or an Affiliate, is directly or indirectly interested in or connected with any Person employed by the Company to
render or perform a service, or from or to whom the Company may buy or sell any property or have other business dealings, shall not prohibit a Member from employing such Person or from dealing with him or it on customary terms and at competitive
rates of compensation, and neither the Company, nor any of the other Members shall have any right in or to any income or profits derived therefrom by reason of this Agreement. 
 4.5 Use of Company Assets. No Member shall make use of the Company Assets or any other funds or property of the Company, or assign its rights to specific Company property, other than for the
business or benefit of the Company. 
 4.6 Designation of Tax Matters Member. The Tax Matters Member shall act as the
“tax matters member” of the Company as provided in the regulations pursuant to Section 6231 of the Code. Each Member hereby approves of such designation and agrees to execute, certify, acknowledge, deliver, swear to, file and record
at the appropriate public offices such documents as may be deemed necessary or appropriate to evidence such approval. To the extent and in the manner provided by applicable Code sections and regulations thereunder, the Tax Matters Member (a)shall
furnish the name, address, profits interest and taxpayer identification number of each Member to the IRS and each Member shall provide such information to the Tax Matters Member upon request and (b)shall inform each Member of administrative or
judicial proceedings for the adjustment of Company items required to be taken into account by a Member for income tax purposes. Each Member hereby reserves all rights under applicable law, including, without limitation, the right to retain
independent counsel of its choice at its expense (which counsel shall receive the full cooperation of the Tax Matters Member). 

  
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 4.7 OFAC; Not Foreign Person; Not Prohibited Person. No Member is a “foreign
person” within the meaning of Section 1445(f)(3) of the Code. Each Member represents and warrants that it is not or will not be an entity or person (a)that is listed in the Annex to, or is otherwise subject to the provisions of Executive
Order 13224 issued on September 24, 2001 (“EO13224”), (b)whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically
Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, without limitation, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf), (c)who commits, threatens to commit or supports
“terrorism”, as that term is defined in EO13224, or (d)who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses [a] – [c] above are referred to as a “Prohibited
Person”). Each Member represents, warrants and covenants that it will not (e)knowingly conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, without limitation, knowingly making or receiving
any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person in violation of applicable laws, or knowingly selling or otherwise Transferring an interest in itself to any Prohibited Person or (f)knowingly engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. The Members agree to deliver (from time to time) to the Managing Member any
such certification or other evidence as may be reasonably requested by the Managing Member, confirming that (g)no Member is a Prohibited Person and (h)no Member has knowingly engaged in any business, transaction or dealings with a Prohibited Person,
including, without limitation, knowingly making or receiving any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person in violation of applicable laws. 

4.8 Management Fees and OD Loans. The Members consent to the execution by the Company of (i) the Management Agreements and
Manager Pooling Agreement, pursuant to which Facility Manager will receive certain fees and may make OD Loans or Pooled OD Loans to the Facilities as more specifically described in the Management Agreements and the Manager Pooling Agreement, and
(ii) a guaranty made in favor of Facility Manager, pursuant to which the Company will guaranty to Facility Manager the payment and performance obligations of the Operating Lessees and Connecticut Avenue Facility Owner under the Management
Agreements and the Manager Pooling Agreement. 
 ARTICLE 5 

BOOKS AND RECORDS; REPORTS 
 5.1 Books and Records. At all times during the continuance of the Company, the Managing Member, or such other Member as the Managing Member designates in accordance with the last sentence of
Section 3.2, shall (a) keep or cause to be kept true and complete books and records, including corporate and governance documents, of the Company and its Subsidiaries in which shall be entered each transaction of the Company and its
Subsidiaries and (b) maintain and keep in good order the Organizational Documents of the Company and its Subsidiaries and monitor corporate housekeeping issues relating to the Company and its Subsidiaries. Such books and records shall be kept
on the basis of the Fiscal Year in accordance with the accrual method of accounting, and shall reflect all transactions of the Company in accordance with GAAP. 

  
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 5.2 Availability of Books and Records; Return of Books and Records. All of the books
and records referred to in Section 5.1 (which shall include an executed copy of this Agreement, the Certificate of Formation, and any amendments thereto) shall at all times be maintained at the principal office of the Company or such other
location as the Managing Member shall reasonably approve (which other location, upon such approval, shall be communicated to all of the Members), and shall be open to the inspection and examination of the Members or their representatives during
reasonable business hours upon reasonable prior notice to the Managing Member. 
 5.3 Reports and
Statements. Subject to the terms of Section 3.5, the Managing Member, or such other Member as the Managing Member designates in accordance with the last sentence of Section 3.2, shall be responsible for determining the need for
independent accountants, selecting the Company’s independent accountant’s, if any, and for preparing or overseeing the Company’s independent accountants in the preparation of all federal, state and local tax returns required to be
filed. The Managing Member shall, or, in the Managing Member’s sole discretion, such other Member as the Managing Member designates, shall cause the accountants to deliver to the Members completed IRS Schedules K-1 promptly upon receipt from
the independent accountants. Each Member shall notify the other Members upon receipt of any notice of tax examination of the Company by federal, state or local authorities. The Managing Member shall, or in the Managing Member’s sole discretion,
such other Member as the Managing Member designates shall deliver to the Company: (a) not later than the fifteenth (15th) day of each month monthly consolidated balance sheets and income statements for the Company prepared in accordance
with GAAP; (b) not later than the fifteenth (15th) day of each month, trial balances for the preceding month and year-to-date for: (i) the Company and each Subsidiary; (ii) each “Taxable REIT Subsidiary” (as
defined by the Code) owned by the Company or any Subsidiary, (iii) each entity owned by any “Taxable REIT Subsidiary” that is owned by the Company or any Subsidiary, and (iv) each of the Facility Entities owned by the Company or
any Subsidiary; (c) not later than fifteen (15) days after the end of each quarter, information (including detailed depreciation and basis information) in a format reasonably requested by CHT to be used by CHT, or a consultant engaged by
CHT, to compute the earnings and profits of the Company; (d) not later than sixty (60) days after the end of each Company Year, annual consolidated balance sheets and income statements for the Company prepared in accordance with GAAP;
(e) not later than March 20th following the end
of each Company Year, annual audited consolidated financial statements for the Company prepared in accordance with GAAP, provided, however, that the Managing Member (or such other Member as the Managing Member designates) shall use its best efforts
to deliver such annual audited consolidated financial statements by March 15th following the end of each Company Year; and (f) all documentation and calculations necessary for the Company’s independent accountants to prepare the Company’s federal tax return and
K-1’s on or before May 1st of each year. In
addition to, and not in limitation of the foregoing, the Managing Member shall, or in the Managing Member’s sole discretion, such other Member as the Managing Member designates shall have the responsibility to monitor and manage the
Company’s debt compliance, cash management functions and annual independent audit. The Managing Member shall be responsible for determining, pursuant to and as required under Section 3.1(a) of each Operating Lease, whether any Excess Rent
(as defined in each Operating Lease) shall be deemed not to accrue or otherwise be payable as rent under any Operating Lease, which determination shall be subject to the approval of the other Members. 

5.4 Accounting Expenses. All out-of-pocket expenses payable to Persons that are retained in accordance with the terms of this
Agreement in connection with the keeping of the books and records of the Company and the preparation of audited or unaudited financial statements and federal, state and local tax and information returns required to implement the provisions of this

  
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Agreement or required by any governmental authority with jurisdiction over the Company shall be borne by the Company as an ordinary expense of its business; provided, however, that any financial
or other reporting or responsibility required of the Company because a Member is an Affiliate of a public company shall be borne by such Member. 
 5.5 Budgets. Attached hereto as Exhibit A is the Approved Budget for the current fiscal year. In each subsequent fiscal year, the Managing Member shall deliver to the other Members promptly
upon receipt from the Facility Manager, a draft annual operations budget for the next fiscal year for each Facility in the form attached as Exhibit D to the Management Agreement for the ensuing calendar year (the “Proposed
Budgets”). The Proposed Budget shall be considered by the Members and a final annual operations budget shall be approved based on the Proposed Budget which shall become an Approved Budget in accordance with the requirements of the
Management Agreement for such Facility. If there is a delay in the finalization of a new Approved Budget, or if the Proposed Budget is not approved as aforesaid, the Company shall require the Facility Manager to operate the Facility pursuant to the
Approved Budget for the prior fiscal year for the Facility increased by the greater of (A) three and one-half of one percent (3.5%) or (B) any increase in the Index, until the Proposed Budget is approved by the Members. The amount of
the Index increase for each fiscal year shall be determined by multiplying the Approved Budget for the previous Fiscal Year by a fraction, the numerator of which shall be (i) the Index most recently published immediately prior to the next
fiscal year, minus (ii) the Index most recently published immediately prior to the immediately preceding fiscal year, and the denominator of which shall be the Index most recently published immediately prior to the immediately preceding fiscal
year. Mathematically, the Index increase calculation may be expressed as (current Index – last year Index) last year Index. If consensus cannot be reached among the Members as to the Proposed Budget within sixty (60) days of the
Members’ receipt of the Proposed Budget, then the Members shall submit the Proposed Budget to arbitration pursuant to Section 13.7, for a determination as to any items contained in the Proposed Budget which remain in dispute. Either party
may initiate arbitration. Managing Member shall use commercially reasonable efforts to adhere to the Approved Budgets, it is understood, however, that the Approved Budgets are only projections by Managing Member of estimated results and that various
circumstances such as, but not limited to, the cost of labor, material, services and supplies, casualty, operation of law, or economic and market conditions may make achievement of the Approved Budgets impracticable or not obtainable. 

ARTICLE 6 

CAPITAL CONTRIBUTIONS, LOANS 
 AND LIABILITIES 
 6.1 Initial Capital Contributions of the Members.
The initial Capital Contributions of the Members are set forth on Schedule 6.1 attached to this Agreement, made as follows: 

(a) CHT has contributed Fifty-Six Million Seven Hundred Thirty-Eight Thousand Six Hundred Ninety-Nine and 98/100 Dollars ($56,738,699.98)
in cash to the Company, of which the Company has used (i) to make a distribution to Sunrise in the amount of Five Million and 00/100 Dollars ($5,000,000.00) (the “Sunrise Distribution Amount”), (ii) a portion of, together
with certain proceeds from the Refinancing, to repay the mortgage financing that encumbered the Five-Pack Facilities immediately prior to the Five Pack Financing, and (iii) a portion of to pay for other closing costs; and 

  
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 (b) Sunrise has contributed the Sunrise Contributed Interests to the Company for which
Sunrise shall receive a Capital Account credit of Forty-Six Million Three Hundred Eighty-Two Thousand Eight Hundred Seventy-Two and 57/100 Dollars ($46,382,872.57). 
 6.2 [Intentionally Omitted]. 
 6.3 Capital Calls. Any Member may, at
any time or times, require all Members upon the giving of a Capital Call, and all Members hereby agree, to make additional Capital Contributions to the Company for the purpose of curing an event of default or a default which with the passage of time
will ripen into an event of default or will give rise to the exercise of a remedy by the Lender under the Refinancing or any future refinancing approved by all the Members pursuant to Section 3.5 of this Agreement (other than the repayment of
the principal amount of the Refinancing or any future refinancing approved by all the Members pursuant to Section 3.5 of this Agreement at the maturity of the Refinancing or any future refinancing approved by all the Members pursuant to
Section 3.5 of this Agreement, as the same may be accelerated), or for the purpose of funding Non-Discretionary Items (such Capital Contributions, the “Mandatory Capital Contributions”). All additional Capital Contributions
other than the Mandatory Capital Contributions shall be a Major Decision subject to the mutual agreement of the Members in accordance with Section 3.5 hereof. Upon a Capital Call, provided such Capital Call is with respect to a Mandatory
Capital Contribution or an additional Capital Contribution agreed upon by the Members in accordance with Section 3.5, each Member shall contribute as a Capital Contribution such Member’s pro rata portion of the aggregate amount
specified in the Capital Call based on such Member’s Percentage Interest set forth on Schedule 6.1 hereto, other than payments for costs and expenses to be paid by a Member pursuant to Section 4.3(b). The Capital Calls shall be
given no less than ten (10) Business Days in advance of the date the Capital Contribution specified in such Capital Call is to be made. The Members acknowledge and agree that funds from Capital Contributions will be distributed to the Facility
Owners and Facility Lessees for the purposes set forth in this Section 6.3. 
 6.4 Reimbursements. 

(a) Except as provided in Sections 6.4(b) below, the Company shall reimburse each Sunrise Guarantor and CHT Guarantor, as applicable, for
(i) all amounts paid by a Sunrise Guarantor or CHT Guarantor in respect of a Claim made by Lender under an Affiliate Guaranty and (ii) Third Party Costs and Expenses incurred by a Sunrise Guarantor or CHT Guarantor in respect of the Claim.
The Company shall make such reimbursement from time to time, within fifteen (15) days after receipt of a demand from a Sunrise Guarantor or CHT Guarantor, as applicable, together with reasonable documentation substantiating the amount of the
request. The Managing Member shall notify the Members of the amount of funds required to pay the demand from the Sunrise Guarantor or CHT Guarantor, as applicable, and shall provide the Members with reasonable documentation substantiating the amount
of the request, and each Member’s required contribution amount. The Members shall fund the amount called for within ten (10) Business Days after notice is given. 
 (b) The Company shall have no reimbursement obligation with respect to a Sunrise Recourse Claim or CHT Recourse Claim. 
 (c) Notwithstanding the foregoing, (a) CHT shall reimburse each Sunrise Guarantor for one hundred percent (100%) of (i) all amounts paid by a Sunrise Guarantor in respect of a CHT Recourse
Claim made by Lender under an Affiliate Guaranty and (ii) Third Party Costs and Expenses incurred by a Sunrise Guarantor in respect of a CHT Recourse Claim and (b) Sunrise shall 

  
 31 

 
reimburse each CHT Guarantor for one hundred percent (100%) of (i) all amounts paid by a CHT Guarantor in respect of a Sunrise Recourse Claim made by Lender under an Affiliate Guaranty
and (ii) Third Party Costs and Expenses incurred by a CHT Guarantor in respect of a Sunrise Recourse Claim. CHT and Sunrise shall make such reimbursement from time to time, within ten (10) Business Days after demand from the Sunrise
Guarantor or CHT Guarantor, as applicable, together with reasonable documentation substantiating the amount of the request. 

6.5 Remedies for Failure to Fund Capital Contributions. 
 (a) If any Member shall fail to timely make a Capital Contribution required pursuant to Section 6.3 in the amount and within the time period specified in the Capital Call notice (such Member is
hereinafter referred to as a “Non-Contributing Member”), the Managing Member shall give written notice in accordance with the requirements of Section 13.2 of such failure to all other Members and any other Member or Members may
fund all or part of such Capital Contribution on behalf of such Non-Contributing Member (each such funding Member is hereinafter referred to as a “Contributing Member”). Any amounts funded by a Contributing Member on behalf of a
Non-Contributing Member shall be made directly to the Company but shall be treated as (a) a recourse demand loan made by the Contributing Member to the Non-Contributing Member (the “Member Loan”), bearing interest at the lower
of (i) the rate of return to which the Contributing Member is entitled pursuant to Section 8.1 at the time such Member Loan is made, plus the Member Loan Rate, and (ii) the maximum rate permitted by applicable law, followed by
(b) a capital contribution by such Non-Contributing Member to the Company. If and to the extent permitted under the terms of the Loan Documents, the Member Loan will be secured by a UCC security interest in the Non-Contributing Member’s
Interest (which the Non-Contributing Member hereby grants) and any transferee of the Non-Contributing Member’s Interest will take that Interest subject to the lien. In addition, the lien of such UCC security interest shall be
superior-in-interest to the lien of any pledge or other encumbrance granted by the Non-Contributing Member with respect to its Interest pursuant to and in accordance with Section 9.5 hereof. The Member Loan (to the extent of unpaid principal
and interest) shall be payable within thirty (30) days after written demand by the Contributing Member and shall be repaid (x) directly by the Company on behalf of the Non-Contributing Member to the Contributing Member from Net Operating
Cash Flow or Capital Proceeds otherwise distributable to the Non-Contributing Member as further provided in Section 8.4, and (y) to the extent outstanding, upon any Transfer of any part of the Non-Contributing Member’s Interest. Any
Net Operating Cash Flow or Capital Proceeds used to repay the Member Loan shall be applied first to interest and then to principal. The Member Loan may, at the election of the Contributing Member, be evidenced by a promissory note, and the
Contributing Member is hereby granted an irrevocable power of attorney, coupled with an interest, to execute and deliver that promissory note on behalf and in the name of the Non-Contributing Member. The failure of a Contributing Member or
Non-Contributing Member to execute the promissory note will not invalidate or otherwise affect the enforceability of, or amounts owing under, any Member Loan. 
 (b) Notwithstanding anything in Section 6.5(a) to the contrary, if the terms of the Loan Documents prohibit treating all or any portion of a Capital Contribution contributed by a Contributing Member
on behalf of a Non-Contributing Member as a Member Loan, and any Member shall fail to timely make a Capital Contribution required pursuant to Section 6.3 in the amount and within the time period specified in the Capital Call notice, the
Managing Member 

  
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shall give written notice in accordance with the requirements of Section 13.2 of such failure to all other Members and any other Member or Members may fund all or part of such Capital
Contribution on behalf of such Non-Contributing Member as a Capital Contribution to the Company. Any amounts funded by the Contributing Member on behalf of a Non-Contributing Member shall be made directly to the Company (and shall not be treated as
a Member Loan). In such an event, (X) the Capital Account of such Contributing Member shall be increased by two (2) times the aggregate amount of all Capital Contributions funded by such Contributing Member on behalf of itself and on
behalf of the Non-Contributing Member with respect to the Capital Call in question, and (Y) the Contributing Member’s Percentage Interest shall be increased and the Non-Contributing Member’s Percentage Interest shall be reduced each
proportionately based on such increase of the Contributing Member’s Capital Account. 
 6.6 Capital of the Company.
The capital of the Company shall be the sum of the Members’ Capital Contributions. Except as otherwise provided in this Agreement, no Member shall be entitled to withdraw or receive any interest on, or return of, all or any part of its Capital
Contribution or to receive Company Assets in return for its Capital Contribution. 
 6.7 Limited Liability of Members. No
Member shall be bound by, or be personally liable for, the expenses, liabilities, indebtedness or obligations of the Company. The liability of each Member shall be limited solely to the amount of its Capital Contribution; provided, however,
after a Member has received a distribution from the Company, such Member may be liable to the Company for the amount of the distribution but only to the extent required by this Agreement or by the Act. Nothing in this Agreement shall be construed to
create liability of any Member in excess of the amount of its Capital Contribution except for gross negligence, fraud, or willful misconduct by such Member. 
 6.8 Refinancing. 
 (a) Non-Recourse; Carve-out Guaranties The
Refinancing is secured by the Facilities and is non-recourse to the Company and to the Members, except as otherwise expressly set forth in the documents evidencing such Refinancing, provided that a Sunrise Guarantor and a CHT Guarantor will be
jointly and severally responsible for certain obligations as set forth in any Affiliate Guaranties. Sunrise and CHT shall cause Sunrise Guarantor and CHT Guarantor, respectively, to the extent required by the Lender, to issue any Affiliate
Guarantees, in forms acceptable to Sunrise and CHT in their sole discretion. CHT, Sunrise and the Company and the CHT Guarantor and Sunrise Guarantor have entered into an Indemnification and Contribution Agreement on the date hereof in the form
attached hereto as Exhibit B. 
 6.9 Mezz Loan. 

(a) Sunrise and CHT acknowledge that CHT will obtain the Mezz Loan. In connection therewith, the Mezz Lender shall have the right to
acquire, directly or indirectly, CHT’s Interest in connection with the exercise of its rights under the Mezz Loan Documents in the event of a default thereunder, in accordance with the provisions of Sections 6.9(b). 

(b) The Mezz Lender shall provide copies to Sunrise of any notices of default delivered to CHT under the Mezz Loan Documents and any
notices delivered to CHT with respect to such Mezz Lender’s intent to accelerate the term of the Mezz Loan and to foreclose upon CHT’s 

  
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Interest (the “Acceleration Notice”). Sunrise shall have the option to purchase the Mezz Loan from the Mezz Lender (the “Mezz Loan Purchase Option”) for a
purchase price equal to the aggregate amount of all obligations of CHT outstanding under the Mezz Loan, including without limitation obligations for principal, interest, late charges, default interest, exit fees, prepayment or yield maintenance
charges, protective advances, expenses or fees, legal fees and similar items and all other obligations of CHT thereunder (the “Mezz Loan Purchase Price”) exercisable by delivering written notice thereof to the Mezz Lender within ten
(10) days of Sunrise’s receipt of the Acceleration Notice, which notice shall specify the date upon which the closing of such purchase shall take place. If Sunrise does not exercise the Mezz Loan Purchase Option or fails to deliver such
notice within such 10-day period and the Mezz Lender schedules a foreclosure sale of on CHT’s Interest, then (i) the Mezz Lender shall give reasonable prior notice to Sunrise of any such foreclosure sale by the Mezz Lender with respect to
CHT’s Interest, and (ii) the Mezz Lender shall only be permitted to sell, transfer or otherwise convey such interest to a Qualified Transferee. Provided that the holder of CHT’s interest following a foreclosure, sale or other transfer
of CHT’s Interest is a Qualified Transferee, such holder shall automatically be admitted as a Member of the Company upon such foreclosure, sale or other transfer, with all of the rights and obligations of CHT; except that such Qualified
Transferee shall not be the Managing Member and Sunrise shall become the Managing Member. The Company acknowledges that the pledge of CHT’s Interests in the Company made by CHT in connection with the Mezz Loan Documents between CHT, as pledgor,
and the Mezz Lender shall be a pledge not only of profits and losses of the Company, but also a pledge of all rights and obligations of the CHT; except that, the Mezz Lender (or such other Qualified Transferee to whom CHT’s Interest may be
transferred or conveyed) shall not be the Managing Member. Upon a foreclosure, sale or other transfer of CHT’s Interests in the Company pursuant to and in accordance with the terms of the Mezz Pledge Agreement and this Section 6.9(b), the
successor member shall be subject to all of the terms and conditions contained in this Agreement (except that Sunrise, and not the Mezz Lender, shall be the Managing Member), including, without limitation, those set forth in Article 9 and Article 12
hereof. Each of the pledge of CHT’s Interests in the Company by CHT and the foreclosure thereon by the Mezz Lender is, subject to the terms and conditions herein, permitted hereby and shall not cause CHT to cease to be a Member of the Company.

 ARTICLE 7 
 CAPITAL ACCOUNTS, PROFITS 
 AND LOSSES AND ALLOCATIONS 

7.1 Capital Accounts. 
 (a) The Capital Accounts of Sunrise and CHT established hereunder shall be initially set forth on Schedule 6.1. 
 (b) The Capital Accounts of the Members shall be set forth on Schedule 6.1. A separate Capital Account shall be maintained for each Member in accordance with the rules of Treasury Regulations
Section 1.704-1(b)(2)(iv), and this Section 7.1 shall be interpreted and applied in a manner consistent therewith. Whenever the Company would be permitted to adjust the Capital 

  
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Accounts of the Members pursuant to Treasury Regulation 1.704-1(b)(2)(iv)(f) to reflect revaluations of the Company, the Company may so adjust the capital accounts of the Members. In the event
that the Capital Accounts of the Members are adjusted pursuant to Treasury Regulation 1.704-1(b)(2)(iv)(f) to reflect revaluations of any of the Company’s assets or property, (i) the Capital Accounts of the Members shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss, as computed for book purposes, with respect to such assets or property, (ii) the Member’s
distributive shares of depreciation, depletion, amortization and gain or loss, as computed for tax purposes, with respect to such assets or property shall be determined so as to take account of the variation between the adjusted tax basis and the
book value of such assets or property in the same manner as under IRC Section 704(c), and (iii) the amount of upward and/or downward adjustments to the book value of the Company property shall be treated as income, gain, deduction and/or
loss for purposes of applying the allocation provisions of this Section. In the event that Code Section 704(c) applies to any Company property, the Capital Accounts of the Members shall be adjusted in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain and loss, as computed for book purposes with respect to such Company property. 

(c) Each Member’s Capital Account shall be maintained in accordance with the following provisions: 

(i) Each Member’s Capital Account shall be credited with the amounts of such Member’s Capital Contributions, such
Member’s distributive share of Profits and any items in the nature of income or gain which are specially allocated to the Member pursuant to this Article 7, and the amount of any liabilities of the Company assumed by such Member or which are
secured by any property distributed by the Company to such Member; 
 (ii) Each Member’s Capital Account shall be charged
with the amounts of cash and the Carrying Value of any property distributed by the Company to such Member pursuant to any provision of this Agreement, such Member’s distributive share of Losses and any items in the nature of expenses or losses
which are specially allocated to the Member pursuant to this Article 7, and the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company. 

(iii) If all or a portion of a Member’s 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; and 
 (iv) In
determining the amount of any liability for purposes of this Section 7.1(b), Section 752(c) of the Code and any other applicable provisions of the Code and Regulations shall be taken into account. 

This Section 7.1(b) and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. If the Managing Member determines that it is prudent to modify the manner in which the Capital Accounts, or any charges or credits thereto
(including charges or credits relating to liabilities which are secured by contributions or distributed property or which are assumed by the Company or by Members), are computed in order to comply with such Regulations, the Managing Member may make
such modification, but only if it is not likely to have a material effect on the amounts to be distributed to any Member pursuant to Section 8.1, Section 8.2 or Section 10.3 upon the dissolution of the Company. The Managing Member
also shall (c) make any adjustments that may be necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance

  
 35 

 
sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (d) make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b). 
 7.2 General Allocation Rules.

 After giving effect to the special allocations set forth in Section 7.3, all Profits and Losses (and to the extent
necessary, as set forth in clauses (a), (b) and (c) of this Section 7.2, items of gross income, gain, expense and loss) of the Company shall be allocated to the Members as follows: 

(a) If the Company has Profits for any Fiscal Year (determined prior to giving effect to this clause (a)), each Member whose Partially
Adjusted Capital Account is greater than its Target Capital Account shall be allocated, proportionately, items of Company expense or loss for such Fiscal Year equal to the difference between its Partially Adjusted Capital Account and Target Capital
Account. If the Company has insufficient items of expense or loss for such Fiscal Year to satisfy the previous sentence with respect to all such Members, the available items of expense or loss shall be allocated among such Members in proportion to
such differences. 
 (b) If the Company has Losses for any Fiscal Year (determined prior to giving effect to this clause (b)),
each Member whose Partially Adjusted Capital Account is less than its Target Capital Account shall be allocated, proportionately, items of Company gain or income for such Fiscal Year equal to the difference between its Partially Adjusted Capital
Account and Target Capital Account. If the Company has insufficient items of income or gain for such Fiscal Year to satisfy the previous sentence with respect to all such Members, the available items of income or gain shall be allocated among such
Members in proportion to such differences. 
 (c) Any remaining Profits or Losses (as computed after giving effect to clauses
(a) and (b) of this Section 7.2) shall be allocated among the Members so as to reduce, proportionately, the differences between their respective Partially Adjusted Capital Accounts and Target Capital Accounts for the period under
consideration. To the extent possible, each Member shall be allocated a pro rata share of all Company items allocated pursuant to this clause (c). No portion of such Profits, if any, shall be allocated to a Member whose Partially Adjusted Capital
Account for the period under consideration is greater than its Target Capital Account for such period; and no portion of such Losses, if any, shall be allocated to a Member whose Target Capital Account for the period under consideration is greater
than its Partially Adjusted Capital Account for such period. 
 7.3 Special Allocations. The following special
allocations shall be made in the following order and priority: 
 (a) Company Minimum Gain Charge-back. Notwithstanding
any other provision of this Article 7, if there is a net decrease in Company Minimum Gain during any Company Fiscal Year, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 7.3(a) is intended to
comply with the minimum gain charge-back requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. 

  
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 (b) Member Minimum Gain Charge-Back. Notwithstanding any other provision of this
Article 7 except Section 7.3(a), if there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Company Fiscal Year, each Member who has a share of the Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share
of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 7.3(b) is intended to
comply with the minimum gain charge-back requirement in Section 1.705-2(i)(4) of the Regulations and shall be interpreted consistently therewith. 
 (c) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in the Regulations Section 1.704-1(b)(2)(ii)(d)(4)
(adjustments for depletion), 1.704-1(b)(2)(ii)(d)(5) (other loss or deduction), or 1.704-1(b)(2)(ii)(d)(6) (reasonably expected distributions), items of Company income and gain shall be specially allocated to each such Member in any amount and
manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 7.3(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 7 have been tentatively made as if this Section 7.3(c) were not in the Agreement. 

(d) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Company Fiscal Year which is
in excess of the sum of (i)the amount such Member is obligated to restore pursuant to any provision of this Agreement and (ii)the amount such Member is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 7.3(d) shall be made only if and to the
extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 7 have been tentatively made as if this Section 7.3(d) and Section 7.3(c) were not in the
Agreement. 
 (e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be allocated between the
Members in proportion to their respective Percentage Interests. 
 (f) Member Nonrecourse Deductions. Any Member
Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in
accordance with Regulations Section 1.704-2(i)(1). 
 (g) Code Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,

  
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the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis),
and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations. 

(h) Reversal of Regulatory Allocations. 
 (i) The “Regulatory Allocations” consist of the “Basic Regulatory Allocations,” as defined in Section 7.3(h)(ii), the “Nonrecourse Regulatory Allocations,” as
defined in Section 7.3(h)(iii), and the “Member Nonrecourse Regulatory Allocations,” as defined in Section 7.3(h)(iv). 
 (ii) The “Basic Regulatory Allocations” consist of allocations pursuant to Section 7.3(c), 7.3(d) and 7.3(g). Notwithstanding any other provision of this Agreement, other than the
Regulatory Allocations, the Basic Regulatory Allocations shall be taken into account in allocating items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the
Basic Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Basic Regulatory Allocations had not occurred. For purposes of applying the foregoing sentence, allocations
pursuant to this Section 7.3(h)(ii) shall only be made with respect to allocations pursuant to Section 7.3(g) to the extent the Managing Member reasonably determines that such allocations will otherwise be inconsistent with the economic
agreement among the parties to this Agreement. 
 (iii) The “Nonrecourse Regulatory Allocations” consist of
all allocations pursuant to Sections 7.3(a) and 7.3(e). Notwithstanding any other provision of this Agreement, other than the Regulatory Allocations, the Nonrecourse Regulatory Allocations shall be taken into account in allocating items of income,
gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Nonrecourse Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated
to each such Member if the Nonrecourse Regulatory Allocations had not occurred. For purposes of applying the foregoing sentence, (A) no allocations pursuant to this Section 7.3(h)(iii) shall be made prior to the Company Fiscal Year during
which there is a net decrease in Company Minimum Gain, and (B) allocations pursuant to this Section 7.3(h)(iii) shall be deferred with respect to allocations pursuant to Section 7.3(e) to the extent the Managing Member reasonably
determines that such allocations are likely to be offset by subsequent allocations pursuant to Section 7.3(a). 
 (iv) The
“Member Nonrecourse Regulatory Allocations” consist of all allocations pursuant to Section 7.3(b) and 7.3(f). Notwithstanding any other provision of this Agreement, other than the Regulatory Allocations, the Member Nonrecourse
Regulatory Allocations shall be taken into account in allocating items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Member Nonrecourse Regulatory
Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Member Nonrecourse Regulatory Allocations had not occurred. For purposes of applying the foregoing sentence, (A) no
allocations pursuant to this Section 7.3(h)(iv) shall be made with respect to allocations pursuant to Section 7.3(f) relating to a particular Member Nonrecourse Debt prior to the Company Fiscal Year during which there is a net decrease in
Member Minimum Gain attributable to such Member Nonrecourse Debt, and then only to the extent necessary to avoid any potential economic distortions caused by such net decrease in Member Minimum Gain, and (B) allocations pursuant to this
Section 7.3(h)(iv) shall be deferred with 

  
 38 

 
respect to allocations pursuant to Section 7.3(f) relating to a particular Member Nonrecourse Debt to the extent the Managing Member reasonably determined that such allocations are likely to
be offset by subsequent allocations pursuant to Section 7.3(b). 
 (v) The Managing Member shall have reasonable
discretion, with respect to each Company Fiscal Year, to (A) apply the provisions of Sections 7.3(h)(ii), 7.3(h)(iii) and 7.3(h)(iv) in whatever order is likely to minimize the economic distortions that might otherwise result from the
Regulatory Allocations, and (B) divide all allocations pursuant to Sections 7.3(h)(ii), 7.3(h)(iii) and 7.3(h)(iv) among the Members in a manner that is likely to minimize such economic distortions. 

7.4 Income Tax Elections. In the event of a Transfer of all or part of a Member’s Interest (or of the interest of a partner
in a partnership which is a Member) because of death or sale, the Company shall, if requested by the transferee, make the election described in Section 754 of the Code. 
 7.5 Income Tax Allocations. 
 (a) Except as otherwise provided in
Section 7.5(c), for purposes of Sections 702 and 704 of the Code, or the corresponding sections of any future Federal internal revenue law, or any similar tax law of any state or other jurisdiction, the Company’s profits, gains and losses
for Federal income tax purposes, and each item of income, gain, loss or deduction entering into the computation thereof, shall be allocated among the Members in the same proportions as the corresponding “book” items are allocated pursuant
to this Section. 
 (b) If any portion of the Profit from a Capital Transaction allocated among the Members pursuant to
Section 7.5(a) is characterized as ordinary income under the recapture provisions of the Code or is subject to a different rate of tax under the Code, each Member’s distributive share of taxable gain from the sale of the property that gave
rise to such Profit (to the extent possible) shall include a proportionate share of the recapture income or income that is subject to a different rate of tax equal to that Member’s share of prior cumulative depreciation deductions with respect
to the property that give rise to the recapture income or the income that is subject to a different rate of tax except to the extent otherwise required by Regulations Sections 1.1245-1(e) and 1.1250-1(f). 

(c) Each item of taxable income, gain, loss or deduction attributable to (i)any property (other than cash) contributed by a Member to the
Company, and (ii)any other property of the Company the Carrying Value of which has been adjusted pursuant to clause (iii)of the definition of Carrying Value, shall be allocated among the Members in accordance with Section 704(c) of the Code,
using such method permitted by Section 704(c) of the Code and the Regulations thereunder as may be selected by the Managing Member, with the approval of Sunrise, so as to take into account the variation, at the time of contribution or
adjustment to Carrying Value, between the Adjusted Basis and the Carrying Value of such property, as required by Regulations Section 1.704-1(b)(4)(i) and Section 1.704-3. 

(d) Solely for purposes of determining a Member’s proportionate share of the “excess nonrecourse liabilities” of the
Company within the meaning of Regulations Section 1.752-3(a)(3), the Members’ interests in Company profits shall be in proportion to their respective Percentage Interests. 

  
 39 

 (e) To the extent permitted by Sections 1.704-2(h)(3) and 1.704-2(i)(6) of the Regulations,
the Members shall endeavor to treat distributions of Net Operating Cash Flow or Capital Proceeds as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or
increase an Adjusted Capital Account Deficit for any Member. 
 7.6 Transfers During Fiscal Year. In the event of the
Transfer of all or any part of a Member’s Interest (in accordance with the provisions of this Agreement) at any time other than the end of a Fiscal Year, the share of Profit or Loss (in respect of the Interest so Transferred) shall be allocated
between the transferor and the transferee in the same ratio as the number of days in the Fiscal Year before and after such Transfer. The prior sentence shall not apply to Profit or Loss from Capital Transactions or to other extraordinary
nonrecurring items. Such amounts shall be allocated between the transferor and transferee based on the date of closing of the sale or on the date the gain is realized or the loss incurred, as the case may be. 

7.7 Election to be Taxed as Association. The Company shall be treated as a partnership for federal income tax purposes. No Member
or Managing Member shall cause the Company to elect to be treated other than as a partnership for federal income tax purposes in accordance with Regulations Section 301.7701-3(c), unless such election is approved in writing by all Members. If
at any time the Company has just one Member, it shall be disregarded as a separate entity for federal, state and local tax purposes. The Managing Member, in the Managing Member’s reasonable discretion, shall have the authority to elect to treat
any subsidiary of the Company that is a corporation as a “Taxable REIT Subsidiary”. 
 7.8 Assignees Treated as
Members. For all purposes of this Article 7, but for no other purpose, an Assignee shall be treated as a Member and each reference in this Article 7 to the Members shall be deemed to include Assignees. 

ARTICLE 8 

DISTRIBUTIONS OF NET OPERATING CASH FLOW 
 AND CAPITAL PROCEEDS 
 8.1 Distributions of Net Operating Cash Flow.
Net Operating Cash Flow distributed shall be reasonably adjusted within 30 days after the end of the last calendar quarter of each Company Year (and to the extent necessary the Members agree to make appropriate adjustments among themselves) to
ensure that the amount distributable to each of the Members for the entire Company Year is equal to the amounts each of the Members would have received under Section 8.1 if the Net Operating Cash Flow was determined for the entire Company Year
and was distributed in a single disbursement as of the end of each Company Year (such adjustments, for example, shall take into account any increased yield a Member receives as a result of receiving distributions quarterly instead of annually).
Distributions of Net Operating Cash Flow shall be made to the Members within thirty (30) days after the close of each calendar quarter (unless (x) such distribution is not in compliance with law or (y) such distribution would result
in a breach of any covenants or undertakings provided by the Company (including covenants or undertakings provided for third party financing) or would, in the opinion of the Members, acting reasonably, be likely to do so during the following twelve
(12) months), in the following order of priority: 
 (a) For the first through seventh Company Years: 

(i) First, to CHT, until CHT has received an 11% Cumulative Return, compounded annually, on CHT’s Total Capital Contribution;

  
 40 

 (ii) Second, to Sunrise, until Sunrise has received an 11% Cumulative Return, compounded
annually, on Sunrise’s Total Capital Contribution; 
 (iii) Thereafter, the balance, if any, to the Members
pro-rata in accordance with their respective Percentage Interests. 
 (b) Following the seventh Company Year, to the
Members pro-rata in accordance with their respective Percentage Interests. 
 8.2 Distribution of Capital
Proceeds. Capital Proceeds shall be distributed promptly after a Capital Transaction (unless (x) such distribution is not in compliance with law or (y) such distribution would result in a breach of any covenants or undertakings
provided by the Company (including covenants or undertakings provided for third party financing) or would, in the opinion of the Members, acting reasonably, be likely to do so during the following twelve (12) months) in the following order of
priority: 
 (a) In the event of a Capital Transaction in the first through seventh Company Years: 

(i) First, to CHT, until CHT has received an 11% Cumulative Return, compounded annually, on CHT’s Total Capital Contribution after
taking into account all amounts previously distributed to CHT; 
 (ii) Second, (x) to Sunrise and CHT, pro-rata in
accordance with their respective Percentage Interests, until one Member has received an 13% Internal Rate of Return on its Total Capital Contribution after taking into account all amounts previously distributed to such Member, then (y) 100% to
the other Member until such other Member has received an 13% Internal Rate of Return on its Total Capital Contribution after taking into account all amounts previously distributed to such Member (including, without limitation, amounts distributed
under subsection (x) of this Section 8.2(a)(ii)). The 13% Internal Rate of Return shall be compounded annually; 

(iii) Thereafter, the balance, if any, to Sunrise. 
 (b) If the Capital Transaction occurs after the seventh Company Year: 
 (i)
First, to CHT, until CHT has received an 11% Cumulative Return, compounded annually, on CHT’s Total Capital Contribution attributable to years one (1) through seven (7) of the Company, after taking into account all amounts previously
distributed to CHT; 
 (ii) Second, (x) to Sunrise and CHT, pro-rata in accordance with their respective Percentage
Interests, until one Member has received an 13% Internal Rate of Return on its Total Capital Contribution after taking into account all amounts previously distributed to such Member, then (y) 100% to the other Member until such other Member has
received an 13% Internal Rate of Return on its Total Capital Contribution after taking into account all amounts previously distributed to such Member (including, without limitation, amounts distributed under subsection (x) of this
Section 8.2(b)(ii)). The 13% Internal Rate of Return shall be compounded annually; 

  
 41 

 (iii) Thereafter, the balance, if any, 50% to CHT and 50% to Sunrise. 

8.3 Distribution Calculations. 
 (a) In applying the terms of Section 8.1 and Section 8.2, (i) references to relative Percentage Interests or relative Capital Contributions will be those in effect at the time of the
distribution, (ii) until a particular priority has been satisfied in full, no amounts will be distributable under any junior priority, and (iii) all amounts distributable under a particular priority will be prorated among the Members in
the manner specified within that priority, and the method of proration applied to each dollar distributable in that priority will be the same until that priority is satisfied in full. 

(b) With respect to any distributions to be made to CHT pursuant to and in accordance with the terms of Section 8.1 and
Section 8.2 hereof, CHT acknowledges and agrees that the Quarterly Interest Rate Differential Amounts applicable to the period to which such distribution relates shall not actually be paid to CHT but shall be deemed to have been distributed to
CHT as cash on a first dollar basis. Sunrise and CHT each acknowledge and agree that in the event that following the execution of this Agreement, either (i) the actual interest rate payable under the Five-Pack Financing is reduced such that the
same is less than 5.25% or (ii) the borrowers under the Five-Pack Financing shall make a partial prepayment of the outstanding principal amount owed to the Lender thereunder, then the Quarterly Interest Rate Differential Amounts shall be
adjusted in accordance with the methodology described in Section 14.01(c) of the Transfer Agreement such that the same shall be calculated based upon such reduced interest rate and/or the then outstanding principal balance under the Five-Pack
Financing, as applicable, it being understood and agreed that in the event of a reduction in the actual interest rate payable under the refinancing of the Five-Pack Facilities following the Closing Date, the interest rate differential for purposes
of recalculating the Quarterly Interest Rate Differential Amounts shall be the new reduced interest rate and the Stated Rate. By way of example only, assuming a Stated Rate of 5.10%, in the event the actual interest rate payable under the
refinancing of the Five-Pack Facilities is reduced following the Closing Date to a rate that is equal to or less than 5.10%, no Quarterly Interest Rate Differential Amounts would be due and payable thereafter. The “Stated Rate” shall mean
that certain rate described in Section 14.01(c) of the Transfer Agreement. 
 8.4 Repayment of Member Loans,
Reconciliation Amounts and Other Payments. 
 (a) Notwithstanding anything to the contrary in Section 8.1 and
Section 8.2, if as a result of a Member Loan, any Member becomes a Non-Contributing Member, then any distributions that would otherwise be payable to the Non-Contributing Member pursuant to Section 8.1 or Section 8.2 will instead be
paid to the Contributing Member or Members, first to pay any accrued interest and then to pay the principal amount thereof until such Member Loan (including any accrued and unpaid interest) is repaid in full and such amounts will not be deemed to
have passed through the distribution waterfalls set forth in Section 8.1 and Section 8.2. If there are two or more Contributing Members with respect to the Member Loan to a Non-Contributing Member, distributions under Section 8.1 or
Section 8.2 will be made pro rata to each Contributing Member in proportion to the relative principal amount of Member Loans (including accrued and unpaid interest) that each Contributing Member has outstanding as a percentage of total
outstanding Member Loans 

  
 42 

 
made to the Non-Contributing Member by all Contributing Members. Any distributions paid to a Contributing Member(s) pursuant to this Section 8.4(a) in respect of a Member Loan will, for tax
allocation and all other purposes of this Agreement, be treated as if they had been distributed to the Non-Contributing Member, not the Contributing Member or Members. 
 (b) If any amount that is to be paid by a Member pursuant to Section 4.3(b) has not been paid by a Member, any distributions that would otherwise be payable to the Member will instead be used first
to pay the payment of any reconciliation amount owed by a Member to the Company that has not been paid pursuant to Section 4.3(b) and such amounts will not be deemed to have passed through the distribution waterfalls set forth in
Section 8.1 and Section 8.2. 
 8.5 Liquidation. Subject to the terms of Sections 8.2(a) and (b), in the event
of the sale or other disposition of all or substantially all of the Company Assets, the Company shall be dissolved and the proceeds of such sale or other disposition shall be distributed in liquidation as provided in Article 10, except that to the
extent that the Company receives a purchase money note or notes in exchange for all or a portion of such assets, the Company shall continue until such purchase money note or notes have been paid in full. 

8.6 Sunrise Distribution Amount. Notwithstanding anything to the contrary contained herein, the Members acknowledge and agree that
Sunrise is entitled to receive the Sunrise Distribution Amount, which amount was distributed by the Company to Sunrise from CHT’s initial Capital Contribution immediately following the Company’s receipt thereof. 

ARTICLE 9 

DISPOSITION OF INTERESTS 
 9.1 Limitations on Assignments of Interests by Members. Except as set forth in this Article 9 and other than (i) Transfers by Sunrise or CHT to their respective Affiliates, (ii) transfers
of a minority equity interest in CHT to CNL Lifestyle Properties, Inc., a Maryland corporation, (iii) Transfers between Sunrise and CHT, or (iv) pledges of, or security or similar interests in the Interests as may be required by the
Lenders to the Company or, with respect to pledges of CHT’s Interest only, the Mezz Lender, which in each case shall be subject to the terms and conditions of the Refinancing and, with respect to pledges of CHT’s Interest only, the Mezz
Loan Documents, no Member shall have the right to Transfer all or any portion of its Interest without the consent of the other Members in their sole discretion. Notwithstanding anything to the contrary herein, in no event may CHT Transfer all or any
portion of its Interest unless all necessary consents and approvals are received from the applicable governmental authority with respect to the licensure of the Facilities. Any transfer tax or similar tax imposed on Sunrise or CHT relating to a
transaction pursuant to Article 9 will be paid or caused to be paid by that Member (and the Member will indemnify the Company for any such transfer tax or similar tax). 
 9.2 Assignment Binding on Company. No Transfer of all or any part of the Interest of a Member permitted to be made under this Agreement shall be binding upon the Company unless and until a
duplicate original of such assignment or instrument of transfer, duly executed and acknowledged by the assignor or transferor, has been delivered to the Company, and such instrument evidences (i) the written acceptance by the assignee of all of
the terms and provisions of this Agreement and (ii) the assignee’s representation that such assignment was made in accordance with 

  
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all applicable laws and regulations. In addition, a Person to whom a Transfer may be made pursuant to this Article 9, may also be required, in the discretion of the Members, and as a condition
precedent to its becoming a transferee, to make certain representations, warranties and covenants including, without limitation, representations as to its net worth, sophistication and investment intent. 

9.3 Substituted Members. 
 (a) Members who assign all their Interests pursuant to an assignment or assignments permitted under this Agreement shall cease to be Members of the Company except that unless and until a Substituted
Member is admitted in its stead, the assigning Member shall not cease to be a Member of the Company under the Act and shall retain the rights and powers of a Member under the Act and pursuant to this Agreement, provided that such assigning
Member may, prior to the admission of a Substituted Member, assign its economic interest in its Interest, to the extent otherwise permitted under this Article 9. Any Person who is an assignee of any portion of the Interest of a Member and who has
satisfied the requirements of Section 9.1 and Section 9.2 shall become a Substituted Member only when (i) the Managing Member has entered such assignee as a Member on the books and records of the Company, which the Managing Member is
hereby directed to do upon satisfaction of such requirements, and (ii) such assignee shall have paid all reasonable legal fees and filing costs in connection with the substitution as a Member. 

(b) Any Person who is an assignee of any of the Interest of a Member but who does not become a Substituted Member and desires to make a
further assignment of any such Interest, shall be subject to all the provisions of this Article 9 to the same extent and in the same manner as any Member desiring to make an assignment of its Interest. 

9.4 Acceptance of Prior Acts. Any Person who becomes a Member, by becoming 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 Company prior to the date it became a Member and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other
instruments as may have been executed and delivered on behalf of the Company prior to said date and which are in force and effect on said date. 
 9.5 Permitted Transfers. 
 (a) Notwithstanding anything to the contrary
herein, subject to the terms and conditions of the Refinancing and the Mezz Loan, the following Transfers shall be deemed “Permitted Transfers” and shall not require the consent of the other Member, provided however that any Permitted
Transfer by CHT shall be subject to the Sunrise Purchase Option and the Change of Control Purchase Option and, subject to Section 9.5(b) below, the transfer restrictions described in Section 9.5(a)(iii). 

(i) any Member may pledge its Interest to a commercial lender in connection with a financing for the benefit of such Member or its
Affiliates (other than the Refinancing); provided that any such pledge would not contravene the terms and conditions of the Loan Documents; and provided further however, that the definitive loan documentation with such lender, including the Mezz
Loan Documents with respect to the Mezz Loan, shall provide that: (i) such lender acknowledges and agrees that such pledge, and the lien and security interest created thereby, shall be subject and subordinate to any lien and security interest
on such Member’s Interest (whether then existing or thereafter created) which secures a Member Loan made to such Member, 

  
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and such lender shall covenant and agree to duly execute and deliver such documents that may be reasonably requested by the Contributing Member to evidence such subordination, and (ii) such
lender shall provide a copy to both Members hereunder of any notice with respect to such lender’s intent to realize upon the pledged Interest after an event of default under such financing, and the Member which is not subject to the financing
shall have the same period as provided to the defaulting Member under the applicable loan documents to remedy or cause to be remedied the defaults specified in such notice (to the extent such defaults are capable of being remedied by such Member).
All sums expended by a Member to cure the loan defaults of a defaulting Member under this Section 9.5(a)(i) shall be treated as a Member Loan hereunder. In the event the applicable defaults are not so cured and the lender realizes upon the
defaulting Member’s Interest, such realization shall be a permitted Transfer hereunder. Each Member acknowledges and agrees that the Company shall not be required to bear any costs or expenses in connection with a financing of the type
described in this Section 9.5(a)(i) (including, without limitation, any fees, costs or expenses payable to any Lender on account of such financing), and all such costs and expenses shall be borne solely by the Member to whom (or to the
Affiliate of whom) such financing is made. In no event shall any such costs or expenses incurred by a Member pursuant to and in accordance with the immediately prior sentence entitle such Member to a Capital Account credit hereunder. 

(ii) Sunrise and its successors and assigns may sell all or any portion of its Interest subject to the right of first offer in favor of
CHT, on the terms set forth in Section 12.3 hereof; provided however, that with respect to the voting rights of any third party purchaser of a portion of the Sunrise Interest, such rights will be exercised by Sunrise on behalf of such purchaser
as if Sunrise retained 100% of its Interest. 
 (iii) CHT and its successors and assigns may, subject to the right of first
offer in favor of Sunrise on the terms set forth in Section 12.3 hereof, assign or sell all or a portion of its Interest to a REIT sponsored by CNL Financial Group, Inc., a Florida corporation, or its Affiliates, provided that such entity
(A) has total assets in excess of Two Hundred Million Dollars ($200,000,000), (B) has as its advisor (pursuant to an advisory agreement as to management, acquisition, advisory and administrative services) an Affiliate of CNL Financial
Group, LLC, a Florida limited liability company, (C) is not known in the community as being of bad moral character, and (D) is not in control of or is controlled by any one or more persons who have been convicted of a felony involving
turpitude in any state or federal court. In connection with an assignment or sale of all of CHT’s Interest pursuant to and in accordance with the terms of this Section 9.5(a)(iii), CHT may elect, in its sole and absolute discretion, by
written notice given to Sunrise not less than five (5) days prior to such sale or transfer, (I) to pay to Sunrise on the date of the closing of such assignment or sale an amount equal to the aggregate sum of all future Quarterly Interest
Rate Differential Amounts applicable to each quarter occurring from and after the date of the closing of such sale or assignment, as such amounts are set forth on Schedule 1.2 as in effect as of the date the closing of such sale (the
“Aggregate Quarterly Interest Rate Differential Amount”), or (II) to fund the Aggregate Quarterly Interest Rate Differential Amount on the date of the closing of such assignment or sale to a Person mutually agreed to by CHT and
Sunrise (the “Escrow Agent”) to be held in escrow pursuant to the terms of an escrow agreement the form of which shall be mutually agreed to by CHT and Sunrise prior to CHT’s funding such amount (the amount held pursuant to
such escrow agreement, the “Escrow Funds”), but which Escrow Agreement shall provide that (x) the Escrow Agent shall disburse to Sunrise, within thirty (30) days after the close of each calendar quarter, a portion of the
Escrow Funds equal to the Quarterly Interest Rate Differential Amount applicable to such quarter, for so long as the Quarterly Interest Rate Differential Amount would have 

  
 45 

 
been deemed distributed to CHT under this Agreement if CHT had remained a Member of the Company, (y) in the event Sunrise elects to prepay all or any portion of the Five Pack Financing, then
the Escrow Agent shall disburse to Sunrise an amount equal to that portion of any prepayment fee, penalty, premium or other similar charge that is payable to the Lender in connection with such prepayment to the extent the same is attributable to the
interest rate under the Five Pack Financing being an interest rate greater than 4.95%, and in the event there are insufficient Escrow Funds to satisfy such disbursement requirement, then CHT shall pay to Sunrise any such deficiency within five
(5) Business Days of receiving an invoice therefor, and (z) in the event the Five Pack Financing has been prepaid in full or in a sufficient amount such that following such prepayment no Quarterly Interest Rate Differential Amounts would
have been deemed to be paid to CHT hereunder if CHT had remained a Member of the Company, then following Sunrise’s receipt of any such amounts required to be paid pursuant to sub-clause (y) above, any remaining Escrow Funds shall be
returned by the Escrow Agent to CHT (such an escrow Agreement satisfying the foregoing conditions, including, without limitation, that it is in form mutually agreed to by CHT and Sunrise, is referred to herein as an “Escrow
Agreement”). If CHT timely makes the payment of the Aggregate Quarterly Interest Rate Differential Amount in full in either the manner described in clause (I) or clause (II) above, then Section 8.3(b) hereof shall be deemed to be
null and void and of no further force and effect from and after the date of such payment. If CHT fails to timely to make such payment as aforesaid, it is understood and agreed that any transferee of CHT’s interest pursuant to the terms of this
Section 9.5(a)(iii) would be subject to the terms and conditions of Section 8.3(b) hereof. 
 (iv) CHT and its
successors and assigns may, from and after the second Company Year and subject to the right of first offer in favor of Sunrise on the terms set forth in Section 12.3 hereof, sell all or a portion of its Interest to any party that is not
(A) a Competitor of Sunrise or (B) HCP, Inc., a Maryland corporation (“HCP”), or Ventas, Inc., a Delaware corporation (“Ventas”) or their respective Affiliates and successors (such Persons referenced in
clauses (A) and (B), each a “Restricted Transferee”); provided however, that with respect to the voting rights of any third party purchaser of a portion of the CHT Interest, such rights will be exercised by CHT on behalf of
such purchaser as if CHT retained 100% of its Interest. In connection with a sale of all of CHT’s Interest pursuant to and in accordance with the terms of this Section 9.5(a)(iv), CHT may elect, in its sole and absolute discretion, by
written notice given to Sunrise not less than five (5) days prior to such sale or transfer, (I) to pay to Sunrise on the date of the closing of such sale the Aggregate Quarterly Interest Rate Differential Amount, or (II) to fund the Escrow
Funds on the date of the closing of such sale to an Escrow Agent to be held in escrow pursuant to the terms of an Escrow Agreement. If CHT timely makes the payment of the Aggregate Quarterly Interest Rate Differential Amount in full in either the
manner described in clause (I) or clause (II) above, then Section 8.3(b) hereof shall be deemed to be null and void and of no further force and effect from and after the date of such payment. If CHT fails to timely to make such payment as
aforesaid, it is understood and agreed that any transferee of CHT’s interest pursuant to the terms of this Section 9.5(a)(iv) would be subject to the terms and conditions of Section 8.3(b) hereof. 

(b) Indirect Transfers of CHT’s Interest shall be subject to the restrictions set forth in Section 9.1, provided, however, that
notwithstanding anything else contained in this agreement, CHT may sell its Interest without receiving the prior written consent of Sunrise in connection with a CHT Liquidity Event, provided that the transferee of CHT REIT’s assets in
accordance with such Liquidity Event is not a Restricted Transferee; provided further however that, from and after such CHT Liquidity Event, (i)the restriction on sales of CHT’s Interest by the

  
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successor to CHT in connection with such CHT Liquidity Event to HCP or Ventas or their respective Affiliates and successors shall continue only for a period to expire on the later of (y) two
(2) years following such CHT Liquidity Event or (z) two (2) years following the expiration of the Purchase Option Lockout Period and (ii)notwithstanding the provisions of Section 12.1(c), if such CHT Liquidity Event (other than a
CHT Liquidity Event constituting an initial public offering of the shares of CHT or any Affiliate thereof) occurs prior to the expiration of the Purchase Option Lockout Period, Sunrise shall have the right to exercise the Sunrise Purchase Option as
of the date of such CHT Liquidity Event. For purposes of clarification, the restriction on sales of the CHT Interest to Competitors of Sunrise following a CHT Liquidity Event shall not expire. 

ARTICLE 10 

DISSOLUTION OF THE COMPANY; 
 WINDING UP AND DISTRIBUTION OF ASSETS 
 10.1 Dissolution. 

(a) Subject to Section 2.11(b), the Company shall be dissolved and its affairs shall be wound up only upon the first to occur
of the following: 
 (i) the entry of a decree of judicial dissolution under Section 18-802 of the Act; 

(ii) the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event which
terminates the continued membership of the last remaining Member of the Company in the Company unless the business of the Company is continued in a manner permitted by this Agreement or the Act. Upon the occurrence of any event that causes the last
remaining member of the Company to cease to be a member of the Company, to the fullest extent permitted by law, the personal representative of such member is hereby authorized and directed to, and shall, within ninety (90) days after the
occurrence of the event that terminated the continued membership of such Member in the Company, agree in writing (A) to continue the Company and (B) to the admission of the personal representative or its nominee or designee, as the case
may be, as a Substituted Member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining Member of the Company in the Company; 

(iii) a Capital Transaction effecting the sale, exchange, transfer, assignment or other disposition, directly or indirectly, of all of
the Facilities and receipt of the final payment of any installment obligation received as a result of any such Capital Transaction; 
 (iv) the written direction of all of the Members; or 
 (v)
the later of (A) the thirtieth
(30th) anniversary of the Effective Date and
(B) the date on which the term of the last Management Agreement expires, including any renewals thereof. 

  
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 (b) No Member shall have the right to (i)withdraw or resign as a Member of the Company,
(ii)redeem, or otherwise require redemption of, its Interest or any part thereof or (iii)to the fullest extent permitted by law, dissolve itself voluntarily. 
 (c) Notwithstanding any other provision of this Agreement, the Bankruptcy of any of the Members shall not cause said Member to cease to be a Member of the Company and upon the occurrence of such an event,
the business of the Company shall continue without dissolution. To the fullest extent permitted by law, the Company shall not be dissolved or terminated solely by reason of the Bankruptcy, removal, withdrawal, dissolution or admission of any Member.

 10.2 Winding Up. 
 (a) In the event of the dissolution of the Company pursuant to Section 10.1(a), the Managing Member may wind up the Company’s affairs. 

(b) Upon dissolution of the Company and until the filing of a certificate of cancellation of the Certificate of Formation as provided in
the Act, the Managing Member or a liquidating trustee, as the case may be, may, in the name of, and for and on behalf of, the Company, prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the
Company’s business, dispose of and convey the Company’s property, discharge or make reasonable provision for the Company’s liabilities, and distribute to the Members in accordance with Section 10.3 any remaining assets of the
Company, all without affecting the liability of Members and without imposing liability on any liquidating trustee. 
 (c) Upon
the completion of winding up of the Company, the Managing Member or liquidating trustee, as the case may be, shall file a certificate of cancellation of the Certificate of Formation in the Office of the Secretary of State of the State of Delaware as
provided in the Act. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate as provided in the Act. 
 10.3 Distribution of Assets. Upon the winding up of the Company, the Company Assets shall be distributed in the following priority: 

(a) to the satisfaction of debts and liabilities of the Company owed to creditors (whether by payment or the making of reasonable
provision for payment thereof), in order of priority as provided by law, other than debts and liabilities owed to Members, including, without limitation, Member Loans, including to the payment of expenses of the liquidation and to the setting up of
any reserves that the Managing Member or the liquidating trustee, as the case may be, shall determine are reasonably necessary for any contingent, conditional or non-matured liabilities or obligations of the Company or the Members; 

(b) to the satisfaction of debts and liabilities of the Company owed to Members; and 

(c) to the Members in accordance with provisions of Section 8.2(a) or Section 8.2(b) as if such distribution was a distribution of
Capital Proceeds. 

  
 48 

 ARTICLE 11 
 AMENDMENTS 
 11.1 Amendments. This Agreement may only be modified,
altered, supplemented or amended (i) with the prior written approval of Lender if required pursuant to Section 2.11(d), and (ii) pursuant to a written agreement executed and delivered by all of the Members. 

11.2 Additional Members. Notwithstanding Section 11.1, if this Agreement shall be amended as a result of adding or
substituting a Member, the amendment to this Agreement shall be signed by all of the Members and by the Person to be added or substituted and by the assigning Member, if any. 
 11.3 Documentation. In making any amendments, the Managing Member shall prepare and file for recordation such documents and certificates as shall be required to be prepared and filed. 

ARTICLE 12 

BUY-SELL; PURCHASE OPTION; RIGHT OF FIRST OFFER 
 12.1 Purchase Option. 
 (a) If during the first or second Company Year a
Sunrise Change of Control Event occurs, Sunrise or its successor, as applicable, shall have the option to purchase, exercisable in such party’s sole discretion, one hundred percent (100%) of CHT’s Interest in the Company (such option,
the “Change of Control Purchase Option”). The Change of Control Purchase Option shall be exercisable by Sunrise or its successor, as applicable, delivering prior written notice to CHT within ninety (90) days following the date
upon which a Sunrise Change of Control Event occurs (the “Change of Control Purchase Option Notice”) in accordance with the requirements of Section 13.2. If Sunrise or its successor, as applicable, exercises the Change of
Control Purchase Option, CHT will be paid a purchase price equal to the sum of (x) the applicable Payment Amount, plus (y) the amount of CHT’s Total Capital Contribution, less (i) all amounts previously distributed to CHT
pursuant to and in accordance with Sections 8.1(a)(i) and 8.2(a)(i) hereof, and (ii) provided if Section 8.3(b) hereof has not been deemed to be of no further force and effect pursuant to Section 9.5(a)(iii) or Section 9.5(a)(iv)
above, an amount equal to the aggregate sum of all future Quarterly Interest Rate Differential Amounts applicable to each quarter occurring from and after the date of the closing of such purchase, as such amounts are set forth on Schedule 1.2 as in
effect as of the date the closing of such purchase (the “Change of Control Purchase Price”). For purposes of calculating the Change of Control Purchase Price, any amounts paid to CHT by Sunrise with respect to any claim for breach
of obligations, representations or warranties of Sunrise under the Transfer Agreement in accordance with the terms thereof, whether in settlement of such claim or pursuant to a judgment issued against Sunrise or the Company in connection with such
claim or otherwise, shall be credited at closing against the Change of Control Purchase Price. For purposes of clarity, the Change of Control Purchase Option shall apply to CHT’s Interest in the Company but not to any interest in CHT.

 (b) The closing of the Transfer of CHT’s Interest in accordance with the Change of Control Purchase Option shall be in
accordance with Section 12.5 below and shall take place on the date that is no earlier than thirty (30) days and no later than ninety (90) days after CHT receives 

  
 49 

 
the Change of Control Purchase Option Notice (or if such day is not a Business Day, the first Business Day thereafter), unless Sunrise or its successor, as applicable, and CHT mutually agree to
an earlier or later closing date (the “Change of Control Purchase Option Closing Date”). At the closing, CHT shall transfer its Interest free and clear of all Liens and withdraw as Managing Member in consideration of its receipt of
the Change of Control Purchase Price by wire transfer of immediately available funds. The Members shall not invoke the provisions of Section 12.2 or Section 12.3 during any period when the Change of Control Purchase Option has been invoked
but closing thereunder has not yet occurred. During the period commencing upon the issuance of the Change of Control Purchase Option Notice and ending on the Change of Control Purchase Option Closing Date, all decisions regarding the management and
operations of the Company, whether or not such decisions are Major Decisions, shall be decided jointly between the Members. 

(c) From and after the expiration of the third Company Year (the period beginning on the Effective Date and ending upon the expiration of
the third Company Year referred to herein as the “Purchase Option Lockout Period”), subject to Section 9.5(b), Sunrise shall have the option to purchase, exercisable in Sunrise’s sole discretion, one hundred percent
(100%) of CHT’s Interest in the Company (such option, the “Sunrise Purchase Option”). The Sunrise Purchase Option shall be exercisable upon not less than ninety (90) days prior written notice to CHT (the
“Purchase Option Notice”) in accordance with the requirements of Section 13.2 (which notice may be exercised prior to the expiration of the Purchase Option Lockout Period), provided, however, that the Sunrise Purchase Option
shall no longer be exercisable after the seventh Company Year (the “Purchase Option Termination Date”). If Sunrise exercises the Sunrise Purchase Option, CHT will be paid a purchase price equal to the amount necessary to return to
CHT a 13% Internal Rate of Return on CHT’s Total Capital Contributions, after taking into account all amounts previously distributed to CHT, provided, however, that if Section 8.3(b) hereof has not been deemed to be of no further force and
effect pursuant to Section 9.5(a)(iii) or Section 9.5(a)(iv) above, such purchase price shall be reduced by an amount equal to the aggregate sum of all future Quarterly Interest Rate Differential Amounts applicable to each quarter
occurring from and after the date of the closing of such purchase, as such amounts are set forth on Schedule 1.2 as in effect as of the date the closing of such purchase (the “Option Price”). The Option Price shall be calculated
jointly by CHT and Sunrise. In the event the parties fail to agree on the Option Price within five (5) Business Days from the receipt by CHT of the Purchase Option Notice, then the Option Price shall be calculated by an accounting firm jointly
agreed upon by the Members (the “Independent Accountant”) and the Members hereby acknowledge that they shall give preference to one of the following accounting firms as the Independent Accountant: Ernst & Young,
PricewaterhouseCoopers, KPMG, or Deloitte Touche, within eight (8) Business Days of CHT’s receipt of the Purchase Option Notice, and such accountant shall notify Sunrise and CHT of such amounts in writing upon such calculation. For
purposes of calculating the Option Price, as applicable, any amounts paid to CHT by Sunrise with respect to any claim for breach of obligations, representations or warranties of Sunrise under the Transfer Agreement in accordance with the terms
thereof, whether in settlement of such claim or pursuant to a judgment issued against Sunrise or the Company in connection with such claim or otherwise, shall be credited at closing against the Option Price. For purposes of clarity, the Sunrise
Purchase Option shall apply to CHT’s Interest in the Company but not to any interest in CHT. 
 (d) The closing of the
Transfer of CHT’s Interest in accordance with the Sunrise Purchase Option shall be in accordance with Section 12.5 below and shall take place not earlier than ninety (90) days after CHT receives the Purchase Option Notice, unless
Sunrise and CHT mutually agree to an earlier closing date (the “Purchase Option Closing Date”). At the closing, CHT shall transfer its Interest free and clear of all Liens and withdraw as Managing Member in consideration of

  
 50 

 
its receipt of the Option Price, as applicable, by wire transfer of immediately available funds. The Members shall not invoke the provisions of Section 12.2 or Section 12.3 during any
period when the Sunrise Purchase Option has been invoked but closing thereunder has not yet occurred. During the period commencing upon the issuance of the Purchase Option Notice and ending on the Purchase Option Closing Date, all decisions
regarding the management and operations of the Company, whether or not such decisions are Major Decisions, shall be decided jointly between the Members. 
 (e) Sunrise or its successor, as applicable, agrees to cooperate with CHT to accommodate CHT in effectuating a like kind exchange (an “Exchange”) under Section 1031 of the Code in
connection with the purchase and sale of CHT’s Interest pursuant to a Sunrise Change of Control Event occurring during the twenty-four (24) month period following the Effective Date, provided that: (i) the Change of Control Purchase
Option Closing Date shall not be delayed or affected by reason of the Exchange nor shall consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to CHT’s obligations under this Agreement and CHT’s
failure or inability to consummate an exchange for any reason or for no reason at all shall not be deemed to excuse or release CHT from its obligations under this Agreement; (ii) CHT shall effect its Exchange through an assignment of this
Agreement, or its rights under this Agreement, to a qualified intermediary, but such assignment shall not release CHT from any of its obligations to Sunrise (or its successor, as applicable), under this Agreement, (iii) Sunrise, or its
successor, as applicable, shall not be required to take an assignment of the purchase agreement for the relinquished or replacement property or be required to acquire or hold title to any real property for purposes of consummating an Exchange
desired by CHT; and (iv) CHT shall pay any additional costs that would not otherwise have been incurred by Sunrise, or its successor, as applicable, had CHT not consummated the transaction through an Exchange. Sunrise, or its successor, as
applicable, shall not by this Agreement or acquiescence to an Exchange desired by CHT have its rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted to CHT that its
Exchange in fact complies with Section 1031 of the Code. 
 (f) Sunrise acknowledges and agrees that in the event that the
Company is required to make any additional payments to the Lender on account of the occurrence of a Sunrise Change of Control Event, then Sunrise shall reimburse CHT for its pro rata share, based on CHT’s Percentage Interest, of any such
payments actually paid to the Lender by the Company. 
 12.2 Buy Sell. 

(a) At any time from and after the Purchase Option Termination Date, provided Sunrise has not exercised the Change of Control Purchase
Option or the Sunrise Purchase Option on or before such Purchase Option Termination Date, either Member (the “Offeror”) may give to the other Member (the “Offeree”) a written notice in accordance with the
requirements of Section 13.2 (a “Buy-Sell Notice”) stating the Offeror’s determination of the price for the assets of the Company if the Company was sold to a third party purchaser for fair market value, free and clear of
all liabilities, (the “Buy-Sell Price”), and stating that the Offeror will either (i) pay to the Offeree in exchange for all the Offeree’s Interest an amount (the “Offer Amount”) equal to the cash amount
that the Offeree would have received in respect of the Offeree’s Interest pursuant to Section 8.2, net of the Transfer Expenses, in the event of a Capital Transaction of the type described in Section 10.1(a) above on the date of
delivery of the Buy-Sell Notice for a sales price equal to the Buy-Sell Price or (ii) sell all the Offeror’s Interest to the Offeree in exchange for an amount (the “Selling Amount”) equal to the cash amount Offeror would
have received pursuant to Section 8.2, net of the Transfer Expenses, in the event of a Capital Transaction of the type described in Section 10.1(a) above on the date of delivery 

  
 51 

 
of the Buy-Sell Notice for a sales price equal to the Buy-Sell Price. The Offer Amount and Selling Amount shall be calculated by an independent accountant acting on behalf of the Company within
three (3) Business Days of the issuance of the Buy-Sell Notice, and such accountant shall notify both the Offeror and Offeree of such amounts in writing upon such calculation. 

(b) The Offeree shall have a period of thirty (30) days after its receipt of the Buy-Sell Notice within which to give the Offeror
written notice in accordance with the requirements of Section 13.2 (the “Reply Notice”) whether the Offeree shall (i) sell its Interest to the Offeror for the Offer Amount or (ii) buy the Offeror’s Interest for
the Selling Amount. In the event that the Reply Notice is not so given prior to the expiration of the thirty (30) day period, the Offeree shall be deemed to have accepted the offer to sell its entire Interest to the Offeror for the Offer
Amount. Within ten (10) Business Days after the receipt or deemed receipt of the Reply Notice, the purchaser of the Interest shall deliver a ten percent (10%) cash deposit to the selling party. 

(c) Closing of the Transfer of the Offeror’s or Offeree’s Interest in accordance with the Offeree’s election will take
place within one hundred twenty (120) days after receipt or deemed receipt by the Offeror of the Reply Notice, unless the selling and the purchasing party mutually agree to an earlier closing date (the “Buy/Sell Closing Date”).
At the closing, the selling Member (the “Buy/Sell Seller”) shall transfer its Interest free and clear of all Liens in consideration of its receipt by wire transfer of the purchase price on the terms and conditions set forth in
Section 12.4 below. Should either Member default in its obligation to close when it is obligated to do so, (i)the defaulting purchasing party shall forfeit the deposit, (ii) the defaulting Member shall have no further ability to invoke the
provisions of this Section 12.2 and (iii) the non-defaulting Member (A) shall have the right to buy the defaulting Member’s Interest for a Buy-Sell Price that shall be reduced by ten percent (10%), which right shall continue for
a period of thirty (30) days following the default of the defaulting purchasing party and (B) shall be entitled to specific performance of such obligation. If the non-defaulting Member exercises the right set forth in the foregoing clause
(iii), the closing of the purchase of the defaulting Member’s Interest shall occur subject to and in accordance with the provisions of Section 12.5. Notwithstanding anything to the contrary contained herein, in the event CHT is the
Buy/Sell Seller and provided Section 8.3(b) hereof has not been deemed to be of no further force and effect pursuant to Section 9.5(a)(ii) or Section 9.5(a)(iv) above, the purchase price that would have otherwise been payable to CHT
under this Section 12.2 shall be reduced by an amount equal to the aggregate sum of all future Quarterly Interest Rate Differential Amounts applicable to each quarter occurring from and after the date of the closing of such purchase, as such
amounts are set forth on Schedule 1.2 as in effect as of the date the closing of such purchase. 
 12.3 Right of First
Offer. 
 (a) Subject to the terms and conditions of Article 9 of this Agreement and notwithstanding anything to the
contrary contained herein, if, at any time, (i) Sunrise intends to sell all or a portion of its Interest pursuant to Section 9.5(a)(ii), or (ii) CHT intends to sell all or a portion of its Interest pursuant to
Section 9.5(a)(iii), such Member (the “Transferor Member”) shall give a notice (“Transfer Notice”) to the other Member (the “Non-Transferor Member”) that the Transferor Member intends to
Transfer such portion of its Interest to a third party and, upon receipt of such Transfer Notice the Non-Transferor Member shall determine a price for the assets of the Company if the Company was sold to a third party purchaser for fair market
value, free and clear of all liabilities (the “Transfer Price”). Within ten (10) Business Days of receipt of the Transfer Notice, the Non-Transferor Member shall notify the Transferor Member as to its determination of the
Transfer Price (the “Transfer Price Notice”). Upon receipt of such Notice, the Transferor Member shall either 

  
 52 

 
accept or reject the Transfer Price. If the Transfer Price is accepted, the Transferor Member shall so notify the Non-Transferor Member (“Acceptance Notice”) and within three
(3) Business Days of acceptance, the Independent Accountant acting on behalf of the Company shall determine the cash amount (the “ROFO Amount”) that the Transferor Member would have received in respect of such portion of the
Transferor Member’s Interest pursuant to Section 8.2, net of the Transfer Expenses, in the event of a Capital Transaction of the type described in Section 10.1(a) above on the date of delivery of the Transfer Notice for a sales price
equal to the Transfer Price, and shall notify the Transferor Member and Non-Transferor Member of the same. Upon delivery and acceptance of the ROFO Amount, the Non-Transferor Member shall purchase the Transferor Member’s Interest in accordance
with the provisions of Section 12.5 of this Agreement. Notwithstanding the foregoing or anything to the contrary contained herein, if CHT is the Transferor Member and Section 8.3(b) has not been deemed to be of no further force and effect
pursuant to Section 9.5(a)(ii) or Section 9.5(a)(iv) above, then the amount payable to CHT for the purchase of its Interest under this Section 12.3(a) shall equal (i) the ROFO Amount less (ii) an amount equal to the
aggregate sum of all future Quarterly Interest Rate Differential Amounts applicable to each quarter occurring from and after the date of such purchase, as such amounts are set forth on Schedule 1.2 as in effect as of the date the closing of such
purchase. If the Transfer Price is rejected, the Transferor Member shall so notify the Non-Transferor Member (“Rejection Notice”) and the Transferor Member shall be free to sell its Interest to any third party in accordance with
Section 12.3(b) of this Agreement. The failure of a Transferor Member to deliver either an Acceptance Notice or a Rejection Notice within such period of time shall be deemed to be the delivery by such Non-Transferor Member of a Rejection
Notice. If the Non-Transferor Member fails to deliver a Transfer Price Notice within the time period set forth herein, the Transferor Member shall be free to sell its Interest to any third party. 

(b) Subject to the restrictions of Section 9.5, the Transferor Member shall at all times be free to negotiate with any prospective
third party purchasers of its Interest and, if no Acceptance Notice has been timely delivered to any Non-Transferor Member, the Transferor Member may sell all or a portion of its Interest to a bona fide third-party purchaser (the “Third
Party Purchaser”) for an amount that is at least ninety five percent (95%) of the ROFO Amount and upon other material terms no more favorable to such Third Party Purchaser than were the material terms offered by the Non-Transferor
Member, provided that (i) such purchase price is payable in immediately available funds, (ii) the Transferor Member and the Third Party Purchaser enter into a contract of sale not later than ninety (90) days after the date the
Rejection Notices were delivered or deemed delivered and (iii) the Transferor Member and the Third Party Purchaser close the Transfer at any time within one hundred twenty (120) days after the date the Rejection Notices were delivered or
deemed delivered, on the terms and conditions set forth in Section 12.5 below. In such case, the Third Party Purchaser shall become a Member hereunder; provided however, that with respect to the voting rights of the Third Party Purchaser, if
less than 100% percent of the Interest of a Member is transferred to a Third Party Purchaser, such rights will be exercised by the Transferor Member on behalf of the Third Party Purchaser as if the Transferor Member retained 100% of its Interest.

 12.4 [INTENTIONALLY OMITTED] 
 12.5 Closing. 
 (a) At the closing on (i) the date of the closing of
the purchase by the Non-Transferor Member or the Third Party Purchaser, (as applicable, the “ROFO Recipient”), of the Transferor Member’s Interests which is the subject of a the right of first offer in accordance with
Section 12.3 above (the “ROFO Closing Date”), (ii) the Purchase Option Closing Date or the Change 

  
 53 

 
of Control Purchase Option Closing Date in accordance with Section 12.1 above, or (iii) the Buy/Sell Closing Date in accordance with Section 12.2 above, (as the case may be, the
“Closing Date”) the Transferor Member (on the ROFO Closing Date), CHT (on the Purchase Option Closing Date or the Change of Control Purchase Option Closing Date) or Buy/Sell Seller (on the Buy/Sell Closing Date), respectively, (as
the case may be, the “Seller”), shall execute and deliver to the ROFO Recipient, Sunrise (or its successor, as applicable), or Buy/Sell Purchaser, respectively (as the case may be, the “Purchaser”), an assignment of
the Seller’s Interest (or with respect to the ROFO Closing Date, such portion of such Seller’s Interest which is subject to the assignment) (which assignment shall warrant Seller’s ownership of the Interest being sold to be free and
clear of all liens and other encumbrances) and such other instruments as the Purchaser may reasonably require, to give it good and lien free title to all of the Seller’s right, title and interest in the Company, subject to the terms of this
Agreement. If the Purchaser has elected to have the Seller convey the Seller’s Interest to a designee or nominee of the Purchaser, the Company shall thereafter continue. In such event, the Purchaser and the Company shall indemnify the Seller
against claims and liabilities of the Company arising after the date of such conveyance. 
 (b) On the Closing Date, the
Purchaser shall, at its option, (i) obtain a full release of the Seller (or a partial release in the event the Seller continues to be a Member after the Closing Date in connection with the sale of a partial Interest to the Third Party
Purchaser) from all liability, direct or contingent, by all holders of all Company and/or Subsidiary debts, obligations or claims against the Seller for which the Seller is or may be personally liable with respect to the period from and after the
Closing Date, except for any debts, obligations or claims which are fully insured by public liability insurer(s) reasonably acceptable to the Seller; or (ii) cause all such debts, obligations or claims to be paid in full on the Closing Date.

 (c) In the event of a contemplated transfer to take place pursuant to Section 12.1, Section 12.2 or
Section 12.3 of this Agreement, the Seller shall be entitled to receive distributions of available cash for the period ending at 11:59 p.m. of the day immediately preceding the Closing Date. All provisions allocating profits, losses, gains,
deductions and credits for tax purposes shall remain in effect through the Closing Date. 
 (d) The Managing Member is hereby
authorized to execute and deliver all documents, instruments and agreements deemed necessary or desirable by the Managing Member in its reasonable discretion to consummate the sale of the applicable Interest on the terms required by this Agreement
to a Third Party Purchaser. If any Member is required to execute any such documents, instruments or agreements, such Member shall execute the same upon the request of the Managing Member so long as the same are on terms and conditions which are
reasonable and customary and do not increase the liability of such Member in such Member’s reasonable discretion. 
 (e) If
a Facility or Facilities are damaged by fire or other casualty or if any Person possessing the right of eminent domain shall give notice of an intention to take or acquire any part of a Facility or the underlying Property of such Facilities, and
such notice is given between the date of election or deemed election by the Purchaser, and the Closing Date (if any), the following shall apply: 
 (i) If the Facility or Facilities are not substantially damaged (which shall be deemed to mean damage, the repair of which is reasonably estimated to cost no greater than $15,000,000.00, in the aggregate,
with respect to all Facilities), then the Purchaser (if any) shall be required to complete the transaction and the insurance proceeds or the relevant part thereof shall be 

  
 54 

 
retained by the Company and the Seller (if any) shall not be entitled to any portion thereof and shall credit Purchaser for Seller’s pro rata share (based on the Seller’s Percentage
Interest immediately prior to the Closing Date) of any deductible. 
 (ii) If the Facility or Facilities are substantially
damaged (which shall mean a casualty the repair of which is reasonably estimated to cost more than $15,000,000.00, in the aggregate, with respect to all Facilities), or if a taking of a Facility or Facilities worth at least $15,000,000.00, in the
aggregate, with respect to all Facilities, shall occur, then the Purchaser shall have the option to either (a) accept the Facilities in an “as is” condition in which event any insurance or condemnation proceeds, settlements and awards
or the relevant part thereof shall be retained by the Company and the Seller shall not be entitled to any portion thereof and shall credit Purchaser for Seller’s pro rata share (based on the Seller’s Percentage Interest immediately prior
to the Closing Date) of any deductible, or (b) cancel the purchase. 
 (iii) From and after the determination of the
Closing Date, but prior to such Closing Date, provided that the purchase has not been canceled by the Purchaser pursuant to Section 12.5(e)(ii), the Company shall not settle any claim relating to a casualty that damages the Facilities or a
taking or acquisition of the Facilities without the prior consent of the Purchaser. 
 (iv) In the event that the purchase is
canceled by the Purchaser pursuant to the above provisions, this Agreement shall remain in effect and continue to be binding on the parties and either Member shall thereafter have the right to continue to exercise its respective rights under
Section 12.1, Section 12.2 and Section 12.3 above. 
 12.6 Release from Guaranties. As a condition to the
buyout of a Member pursuant to the foregoing Sections 12.1 through 12.3, such Member and all of its Affiliates shall be released from the obligation to guarantee any of the obligations of the Company or any of its Subsidiaries or Affiliates under
any financing. If either Member is the selling party, the other Member shall, at its expense, secure the release from all lenders (without releasing any claim the Company may have against the applicable guarantor) of outstanding Affiliate Guaranties
executed by the applicable Sunrise Guarantor or CHT Guarantor or their respective Affiliates (other than obligations accrued prior to the transfer under any customary recourse carve-out guarantees) and, to the extent required, obtain the consent of
all lenders to the buy-out of such Member (or cause the applicable loans to be repaid at closing). 
 12.7 Upon Termination
of Management Agreement. Notwithstanding the time limitations in Section 12.1 above, if all but not less than all of the Management Agreements are terminated for any reason prior to the Purchase Option Termination Date, Sunrise and CHT
shall have the right to initiate the buy-sell options set forth in Section 12.2 prior to the Purchase Option Termination Date. 
 12.8 Enforcement. It is expressly agreed that the remedy at law for breach of the obligations of the Members set forth in this Article XII is inadequate in view of (a) the complexities
and uncertainties in measuring the actual damage to be sustained by reason of the failure of a Member to comply fully with such obligations, and (b) the uniqueness of the Company business and the Member’s relationships. Accordingly, each
of such obligations shall be, and is hereby expressly made, enforceable by a specific performance. 
 12.9 Refinancing.
The terms and provisions of this Article XII shall be subject to the terms and conditions of the Refinancing. 

  
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 ARTICLE 13 
 MISCELLANEOUS 
 13.1 Further Assurances. Each party to this
Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as, in the reasonable judgment of the
Managing Member, may be necessary or advisable to carry out the intent and purpose of this Agreement so long as such acts and things do not increase the obligations or diminish the rights of any of the Members. 

13.2 Notices. 
 (a) Any and all notices, including any demands, consents, approvals, offers, elections and other communications required or permitted under this Agreement shall be deemed adequately given if in writing,
addressed to the recipient of the notice at the addresses set forth below (or to such other addresses as the parties may specify by due notice to the others parties) and if delivered either (a) in hand, in which case it will be deemed delivered
on the date of delivery or on the date delivery was refused by the addressee, (b) by United States mail, postage prepaid, registered or certified, with return receipt requested, in which case it will be deemed delivered on the date of delivery
as established by the return receipt (or the date on which the return receipt confirms that acceptance of delivery was refused by the addressee), (c) by Federal Express or similar expedited commercial carrier, with all freight charges prepaid,
in which case it will be deemed delivered on the date of delivery as established by the courier service confirmation (or the date on which the courier service confirms that acceptance of delivery was refused by the addressee), or (d) by
facsimile transmission with a hard copy to follow by any of the other methods above, in which case it will be deemed delivered on the day and at the time indicated in the sender’s automatic acknowledgment. If a notice is sent to a party, then
copies of such notice under this Section shall also be sent by the same delivery method to the copy recipients. Whenever under this Agreement a notice is required to be delivered on a day which is not a Business Day or is required to be delivered on
or before a specific day which is not a Business Day, the day of required delivery shall automatically be extended to the next Business Day. All such notices shall be addressed as follows: 

 

					
	To CHT or the Managing	    	c/o CHT Partners, LP
	Member:	    	CNL Center at City Commons
		    	450 South Orange Ave.
		    	Orlando, Florida 32801
		    	Attn.:  Joseph T. Johnson, SVP and CFO and
		    	  Holly Greer, SVP and General Counsel

		    	Telecopy No.:	 	407-540- 2544
		    	Telephone No.:	 	407-540-7618 (Johnson)
		    		 	407-540-7546 (Greer)

  
 56 

					
	 With a copy to:
	    	 Lowndes, Drosdick, Doster, Kantor & Reed, PA
 215 North Eola Drive
 Orlando, Florida 32801

Attn.:  Peter E. Reinert, Esq.

Telecopy No.:  407-843-4444
 Telephone
No.:  407-418-6291

		
	To Sunrise:	    	 c/o Sunrise Senior Living, Inc.
 7900 Westpark Drive, Suite T-900
 McLean, Virginia 22102

Attn:  Chief Investment & Administrative Officer
 Telecopy No.: :  (703) 744-1601
 Telephone No.:   (703)
854-0683

		
	 With a copy to:
	    	 c/o Sunrise Senior Living, Inc.
 7900 Westpark Drive, Suite T-900
 McLean, Virginia 22102

Attention:  General Counsel
 Telecopy
No.:  (703) 854-0334
 Telephone No.:   (703) 744-1601

		
	 With a copy to:
	    	 Willkie Farr & Gallagher LLP
 787 Seventh Avenue
 New York, New York 10019

Attention:  Eugene A. Pinover
 Telecopy
No.:  (212) 728-9254
 Telephone No.:   (212) 728-8254
 E-mail: epinover@willkie.com

 (b) Notices, demands, requests, consents, approvals, offers, elections and other communications given by
an attorney named below on behalf of its client and sent to the other party to this Agreement in the manner set forth in this Section shall have the same effect as if given by a party to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, it is understood that notices to each party’s outside counsel shall be given as a courtesy only and failure to provide such notice shall not in any way affect or diminish the validity of the notice given to any
party under this Agreement. By notice given as provided in this Section, the parties to this Agreement and their respective successors and assigns shall have the right from time to time and at any time during the Term to change their respective
addresses effective five (5) Business Days after the date of receipt by the other parties of such notice and each party shall have the right to specify as its address any other address within the United States of America. 

13.3 Headings and Captions. All headings and captions contained in this Agreement and the table of contents hereto are inserted
for convenience only and shall not be deemed a part of this Agreement. 

  
 57 

 13.4 Variance of Pronouns. All pronouns and all variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or entity may require. 
 13.5
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one Agreement. The submission of a signature page transmitted by
facsimile (or similar electronic transmission facility) shall be considered as an “original” signature page for purposes of this Agreement so long as the original signature page is thereafter transmitted by mail or by other delivery
service and the original signature page is substituted for the facsimile signature page in the original and duplicate originals of this Agreement. 
 13.6 Governing Law; Litigation, Jurisdiction and Waiver of Jury Trial. 

(a) This Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware without regard to conflict of
laws principles. 
 (b) For the purposes of any suit, action or proceeding involving this Agreement, the parties each hereby
expressly and irrevocably submits to the jurisdiction of all federal and state courts sitting in the Commonwealth of Virginia and the State of Florida which courts shall have jurisdiction over any such suit, action or proceeding commenced by any
party. The parties consent to service of process, wherever made, by certified mail return receipt requested, personal service or any other method permitted by applicable law and the rules of the applicable court. In furtherance of such agreement,
the parties agree, upon the request of any party, to discontinue (or agree to the discontinuance of) any such suit, action or proceeding pending in any other jurisdiction. 
 (c) Each party hereby irrevocably waives any objection that either party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
brought in any federal or state court sitting in the Commonwealth of Virginia or the State of Florida and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. 
 (d) If for any reason, the state and federal courts sitting in the Commonwealth of Virginia or the State
of Florida refuse to exercise jurisdiction over the proceeding or any party, then litigation as permitted herein may be brought in any court of competent jurisdiction in the United States of America. 

(e) EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING
IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE FACILITY, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING. 

13.7 Arbitration. 
 (a) Any dispute with respect to the matters described in Sections 3.5 and 5.5 under this Agreement for which arbitration in accordance with Section 13.7 is expressly provided shall be determined by
binding arbitration proceeding (the “Arbitration Proceeding”) administered by 

  
 58 

 
the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules and Expedited Procedures, in effect at the time of the demand for arbitration, provided,
however, that to the extent any provision of this Section modifies, adds to, or is inconsistent with any provisions of those rules and procedures, the provisions of this Section shall control. Arbitration will be conducted before a single arbitrator
in Washington, D.C., Alexandria, VA, McLean, VA, Bethesda, MD, or Orlando, FL (the “Venue”). The parties hereby acknowledge and agree that the party which did not initiate the Arbitration Proceeding shall have the right to elect the
Venue in its sole discretion, which shall be binding on both parties. The choice of law provisions set forth in Section 13.6 shall apply in any such Arbitration Proceeding. Any dispute, disagreement, or controversy arising out of or relating to
this Agreement for which arbitration is not expressly provided as the means of resolution may be resolved by litigation as provided in Section 13.6 or by other lawful means. 

(b) The party desiring arbitration shall provide written notice in accordance with the requirements of Section 13.2 to the other
party (the “Arbitration Notice”) indicating (i) the matter in controversy and (ii) the name, contact information and professional resume of the proposed arbitrator meeting the requirements for a qualified and independent
arbitrator set forth in Section 13.7(c) (“Initial Arbitrator”) to arbitrate such matter in controversy. If the party receiving the Arbitration Notice rejects the Initial Arbitrator set forth in the Arbitration Notice it shall
object by written notice in accordance with the requirements of Section 13.2 (“Objection Notice”) delivered to the other party within seven (7) Business Days of the receipt of the Arbitration Notice. The Objection Notice
shall contain the name, contact information and professional resume of a different arbitrator meeting the requirements for a qualified and independent arbitrator set forth in Section 13.7(c) (“Secondary Arbitrator”) to
arbitrate the matter in controversy set forth in the Arbitration Notice. If the party receiving the Objection Notice rejects the Secondary Arbitrator, it shall object in writing (“Secondary Objection Notice”) to the other party
within seven (7) Business Days after the receipt of the Objection Notice. If neither the Initial Arbitrator nor the Secondary Arbitrator is accepted by the parties, the party which delivered the Arbitration Notice shall instruct the Initial
Arbitrator and the Secondary Arbitrator to agree, within five (5) Business Days after receipt of the Secondary Objection Notice, upon an arbitrator (“Appointed Arbitrator”) meeting the requirements for a qualified and
independent arbitrator set forth in Section 13.7(c). If they agree upon an Appointed Arbitrator who is prepared to act as the Appointed Arbitrator, the Initial Arbitrator and Secondary Arbitrator shall deliver written notice of the name,
contact information and professional resume of the Appointed Arbitrator to each party simultaneously. The appointment of the Appointed Arbitrator shall be a final decision, which shall not be subject to objection by either party, unless either party
to this Agreement within five (5) Business Days after such selection of an Appointed Arbitrator, gives written notice in accordance with the requirements of Section 13.2 of this Agreement to the other party, in writing, that such Appointed
Arbitrator fails to meet the requirements for a qualified and independent arbitrator set forth in Section 13.7(c) and provides specific information in such written notice as to the reasons why such failure exists. 

(c) In the event the Initial Arbitrator and the Secondary Arbitrator cannot agree on an Appointed Arbitrator or if such appointed
Arbitrator is unwilling to act as the Appointed Arbitrator or if either party objects to the Appointed Arbitrator within five (5) Business Days after the selection of such Appointed Arbitrator, as permitted in this Section 13.7, then
either party may petition the AAA (or any successor body of similar function) to appoint an arbitrator within five (5) Business Days of such petition using the following criteria: such arbitrator shall be (i) with respect to physical
property matters, a licensed professional engineer or registered architect having at least ten (10) years experience in the design or construction of similar senior housing facilities, (ii) with respect to financial matters, a partner in a
“Big Four Accounting Firm” with at least ten (10) years 

  
 59 

 
experience with the type of matter in dispute, (iii) with respect to property management issues, an individual who shall have had at least ten (10) years experience managing similar
senior housing facilities in the market place for the matter in dispute and (iv) be neutral and shall have had no prior notice, information or discussions concerning such controversy and shall not be employed by or associated with either party
or any Affiliate of either of them, or any of their respective agents or affiliates at such time or for the previous ten (10) years. If the dispute involves more than one type of matter, then the Appointed Arbitrator may be (v) an
individual with expertise in any one of the types of matters in dispute, or (vi) a retired judge. 
 (d) The Arbitration
Proceedings shall commence fifteen (15) Business Days after the engagement or appointment of the appropriate arbitrator pursuant to this Section 13.7. The arbitrator shall make a determination within ten (10) Business Days after
conclusion of the Arbitration Proceeding. 
 (e) The costs and expenses of an Arbitration Proceeding including the
administrative fees and costs, expert fees and the arbitrator’s fees and costs, shall be shared equally by CHT and Sunrise, and each party shall bear its own counsel, expert, administrative fees and other professional fees and expenses with
respect to such Arbitration Proceeding; provided, however, that the Appointed Arbitrator may (but shall not be required to), in the exercise of his/her best judgment, assess one party for a part or all of the costs of the other party, including,
without limitation, the costs of the Arbitration Proceeding. 
 (f) Any arbitrator’s final decision and award shall be in
writing, shall be binding on the parties and shall be non-appealable, and counterpart copies thereof shall be delivered to both parties. A judgment or order based upon such award may be entered in any court of competent jurisdiction. All actions
necessary to implement the decision of the arbitrator shall be undertaken as soon as possible, but in no event later than three (3) Business Days after the rendering of such decision. 

13.8 Partition. The Members hereby agree that no Member nor any successor-in-interest to any Member shall have the right to have
the property of the Company partitioned, or to file a complaint or institute any proceeding at law or in equity to have the property of the Company partitioned, and each Member, on behalf of himself, his successors, representatives, heirs and
assigns, hereby waives any such right. 
 13.9 Invalidity. Every provision of this Agreement is intended to be severable.
The invalidity and unenforceability of any particular provision of this Agreement in any jurisdiction shall not affect the other provisions of this Agreement, and this Agreement shall be construed in all respects as if such invalid or unenforceable
provision were omitted. 
 13.10 Successors and Assigns. This Agreement shall be binding upon the parties hereto and
their respective successors, executors, administrators, legal representatives, heirs and legal assigns and shall inure to the benefit of the parties hereto and, except as otherwise provided in this Agreement, their respective successors, executors,
administrators, legal representatives, heirs and legal assigns. 
 13.11 Entire Agreement. This Agreement supersedes all
prior agreements among the parties with respect to the subject matter of this Agreement and contains the entire Agreement among the parties with respect to such subject matter. 

  
 60 

 13.12 Waivers. No waiver of any provision of this Agreement by any party hereto shall
be deemed a waiver by any other party nor shall any such waiver by any party be deemed a continuing waiver of any matter by such party. No amendment, modification, supplement, discharge or waiver of this Agreement shall require the consent of any
Person not a party to this Agreement. 
 13.13 No Brokers. Each of the Members hereto represents and warrants to each
other that there are no brokerage commissions or finders’ fees (or any basis therefor) resulting from any action taken by such Member or any Person acting or purporting to act on their behalf upon entering into this Agreement. Each Member
agrees to defend, indemnify and hold harmless each other Member for all costs, damages or other expenses, including, without limitation, reasonable attorneys’ fees and expenses, arising out of any misrepresentation made in this
Section 13.13. 
 13.14 Confidentiality. Each Member agrees not to disclose or permit the disclosure of any of the
terms of this Agreement or of any other confidential, non-public or proprietary information relating to the Company Assets or business (collectively, “Confidential Information”), provided that such disclosure may be made
(a) to any Affiliate or other Person who is a partner, officer, director or employee of such Member or Affiliate or counsel to or accountants of such Member solely for their use and on a need-to-know basis, provided that such Persons are
notified of the Member’s confidentiality obligations pursuant to this Agreement, (b) with the consent of the other Members, (c) subject to the next paragraph, pursuant to a subpoena or order issued by a court, arbitrator or
governmental body, agency or official or (d) to any lender providing financing to the Company. 
 In the event that a
Member shall receive a request to disclose any Confidential Information under a subpoena or order such Member shall (e) promptly notify the other Members thereof, (f) consult with the other Members on the advisability of taking steps to
resist or narrow such request and (g) if disclosure is required or deemed advisable, cooperate with any of the other Members in any attempt it may make to obtain an order or other assurance that confidential treatment will be accorded the
Confidential Information that is disclosed. 
 13.15 No Third Party Beneficiaries. This Agreement is not intended and
shall not be construed as granting any rights, benefits or privileges to any Person not a party to this Agreement. 
 13.16
Power of Attorney. Subject to Section 3.5, each of the undersigned does hereby constitute and appoint Managing Member as its true and lawful representative and attorney-in-fact, in its name, place, and stead to make, execute, sign, and
file any amendment to the Certificate of Formation of the Company required because of an amendment to this Agreement or in order to effectuate any change in the membership of the Company, and all such other instruments, documents, and certificates
which may from time to time be required by the laws of the United States of America, the State of Delaware, or any other state in which the Company shall determine to do business, or any political subdivision or agency thereof, to effectuate,
implement, and continue the valid and subsisting existence of the Company, or in connection with any state tax filings of the Company. The power of attorney granted hereby is coupled with an interest and shall (a)continue in full force and effect
notwithstanding the subsequent death, incapacity, dissolution, termination, or Bankruptcy of the Member granting the same or the Transfer of all or any portion of such Member’s Interest, and (b)extend to such Member’s successors, assigns,
and legal representatives. 
 13.17 Invalidity. The provisions of this Section 13.17 were negotiated in good faith
by the parties to this Agreement, and the parties agree that such provisions are reasonable and are not more restrictive than necessary to protect the legitimate interests of the parties hereto. It is the intention of

  
 61 

 
the parties to this Agreement that if any of the restrictions or covenants contained herein is held to be for a length of time that is not permitted by applicable law, or is any way construed to
be too broad or to any extent invalid, such provision shall not be construed to be null, void and of no effect, but to the extent such provision would be valid or enforceable under applicable law, a court of competent jurisdiction shall construe and
interpret or reform such provision to provide for a restriction or covenant having the maximum time period and other provisions (not greater than those contained herein) as shall be valid and enforceable under applicable law. 

13.18 Construction of Documents. The parties acknowledge that they were represented by separate and independent counsel in
connection with the review, negotiation and drafting of this Agreement and that this Agreement shall not be subject to the principle of construing its meaning against the drafter. 

[SIGNATURE PAGES FOLLOW] 

  
 62 

 IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly
executed this Amended and Restated Limited Liability Company Agreement effective as of the Effective Date. 
  

			
	MEMBERS:
	
	SUNRISE SENIOR LIVING INVESTMENTS, INC., a Virginia corporation
		
	By:	 	 /s/ Edward W. Burnett

		 	Name: Edward W. Burnett
		 	Title: Vice President
	
	CHT SL IV HOLDING, LLC, a Delaware limited liability company
		
	By:	 	 /s/ Joshua J. Taube

		 	Name: Joshua J. Taube
		 	Title: Vice President

 [Signature Page to JV Agreement] 

 Schedule 1.1 
 Properties 
  

									
	 Name of Property
	    	 Street Address
	    	 City
	    	ST	  	Zip
	 Sunrise of Metairie
	    	3732 West Esplanade Ave S	    	Metairie	    	LA	  	70002
	 Sunrise at Siegen
	    	9351 Siegen Lane	    	Baton Rouge	    	LA	  	70810
	 Sunrise of Gilbert
	    	580 South Gilbert Road	    	Gilbert	    	AZ	  	85296
	 Sunrise of Louisville
	    	6700 Overlook Drive	    	Louisville	    	KY	  	40241
	 Sunrise at Fountain Square
	    	2210 Fountain Square Drive	    	Lombard	    	IL	  	60148
	 Sunrise of Santa Monica
	    	1312 15th Street	    	Santa Monica	    	CA	  	90404
	 Sunrise of Connecticut Avenue
	    	5111 Connecticut Avenue, NW	    	Washington	    	DC	  	20008

 Schedule 1.2 
 Quarterly Interest Rate Differential Amounts 
 (See Attached) 

 Schedule 1.3 
 Mezz Loan Documents 
  

	1.	Recognition Agreement, dated as of the Effective Date, between CHT, Sunrise and Mezz Lender. 

 

	2.	Promissory Note (Mezzanine Loan), dated as of the Effective Date, executed and made by CHT to and in favor of Mezz Lender in the principal amount of $40,000,000.00.

  

	3.	Mezzanine Loan Agreement, dated as of the Effective Date, between CHT and Mezz Lender. 

 

	4.	Mezzanine Guaranty, dated as of the Effective Date, executed by CHT REIT in favor of Mezz Lender. 

 

	5.	Mezzanine Environmental Indemnity Agreement, dated as of the Effective Date, executed by CHT and CHT REIT in favor of Mezz Lender. 

 

	6.	Assignment of Net Equity Raise, dated as of the Effective Date, executed by CHT REIT in favor of Mezz Lender. 

 

	7.	Pledge and Security Agreement, dated as of the Effective Date, executed by CHT to and for the benefit of Mezz Lender, pledging CHT’s Interest in the Company, and
that certain Acknowledgement and Consent of Pledge executed by the Company to and for the benefit of Mezz Lender. 

  

	8.	That certain Intercreditor Agreement between Lender and Mezz Lender. 

  

	9.	That certain (UCC-1) Financing Statement evidencing Mezz Lender’s security interests in the CHT’s Interest in the Company. 

 Schedule 3.5 
 Major Decisions 
 (a) Any sale, mortgage, financing or refinancing of any
material Company Assets, Facility, Facility Entity, any Subsidiary, or any interest in any material Company Asset, Facility, Facility Entity, any Subsidiary, or any lease of any Facility not permitted under the Management Agreement; however, the
Managing Member may make incidental sales, exchanges, conveyances, of personal property at the Facility which may be disposed of or replaced due to wear and tear or obsolescence or otherwise in the ordinary course of business, subject to the
provisions of Article 9 (Disposition of Interests) of this Agreement. 
 (b) Invest in or acquire any real property, or any
direct or indirect beneficial ownership interest therein by the Company or any Subsidiary. 
 (c) Make any expenditure or incur
any obligation by or for any Facility Entity which is not provided for in an Approved Budget or otherwise permitted to be incurred under the applicable Facility Documents of a Facility other than increased insurance costs, taxes, utility costs and
debt service payments; however, if actions are needed to satisfy any Emergency Requirements with respect to any Facility, the Managing Member may make such expenditures as may be necessary to alleviate such situation even if such expenditures are
not provided for, or exceed the amount provided for, in an Approved Budget or the FF&E Estimate, and the Managing Member shall promptly notify the other Members of the event giving rise to such repairs and the actions taken with respect thereto.

 (d) File any petition or consent to the filing of any petition that would subject the Company, any Facility Entity or other
Subsidiary to a Bankruptcy, or make any assignment for the benefit of creditors by the Company, any Facility Entity or other Subsidiary. 
 (e) Approve all Proposed Budgets and finalize Approved Budgets, Capital Budgets and FF&E Reserve Estimates. 
 (f) Approve operating and marketing budgets and business narrative as required to be approved by a Facility Entity pursuant to its Management Agreement; 

(g) Approve Material Contracts unless such agreements have been approved as part of the Approved Budget. 

(h) Dissolve, liquidate or otherwise terminate the Company or any Subsidiary, except pursuant to the provisions of Article 10 of
this Agreement. 
 (i) To terminate the Management Agreement if the amount of the insurance deductibles and other uninsured out
of pocket expenses of the applicable Facility Lessee in connection with the repair and/or replacement of a Facility subject to a Major Casualty (as defined in the Management Agreements) are in the aggregate higher than Five Million Dollars
($5,000,000) in accordance with Section 12.4(b) of the Management Agreements; 
 (j) To determine “fair market
value” in connection with the Facility Manager’s purchase of a Facility in accordance with Section 12.4(c) of the Management Agreements. 

 (k) Subject to Sections 12.04 and 12.05 of the applicable Management Agreement, to fairly
determine the use of the award in the accordance with the Management Agreement resulting from a partial condemnation of the Property or settlement in lieu thereof or the proceeds of an insurance claim resulting from a casualty to the Property, in
both instances, in excess of Five Million Dollars ($5,000,000); provided that the parties acknowledge that a portion of the proceeds for business interruption insurance would apply to management fees that would have been payable to Facility Manager
under the Manager Pooling Agreement. 
 (l) Change the status of the Company or Subsidiaries as a partnership for federal, state
or local income tax purposes. 
 (m) Enter into any resident agreement at the Facilities on a form or terms different from the
Resident Agreement Documents. 
 (n) Enter into any transaction or agreement, or modify or amend, or waive, any term of any new
or existing transaction or agreement, with an Affiliate of CHT, or take any enforcement action with respect to such a transaction or agreement. 
 (o) Renew, refinance, discharge or otherwise modify the existing loan or the Refinancing or obtain, incur, renew, refinance, discharge or otherwise modify any other financing, and entering into, amending
any loan document in connection with any such financing. 
 (p) Merge or consolidate the Company or any of its Subsidiaries with
or into another entity or forming any new Subsidiary. 
 (q) Reconstitute the Company prior to the termination thereof following
any dissolution of the Company. 
 (r) Take any other actions on behalf of the Company that are outside of the scope of
authority granted to the Managing Member pursuant to this Agreement. 
 (s) Change the purpose of the Company or the
Subsidiaries as set forth in this Agreement. 
 (t) Request any additional Capital Contributions (other than Mandatory Capital
Contributions). 
 (u) With respect to any redevelopment, renovation or capital improvement of the Facility, including with
respect to a casualty or condemnation, (a) approve the plans and specifications and material modifications thereto, (b) select the contractors and consultants, (c) approve the form and substance of the contracts with such contractors
and consultants and (d) approve of any modification of, or change order under, any such contracts. 
 (v) Institute, settle
or make any other material decision with respect to any lawsuit, claim, counterclaim or other legal proceeding by or against the Company, any Facility or any Subsidiary, including, without limitation, confessing a judgment against the Company or any
Subsidiary, accepting the settlement, compromise or payment of any claim asserted against the Company or any Subsidiary or any of their respective property and assets, or asserted by the Company or any Subsidiary in respect of the foregoing.

 (w) Change the name of the Company or any Subsidiary or otherwise modify the Organizational
Documents of any Subsidiary. 
 (x) Issue any guaranties or indemnities by the Company or any Subsidiary of obligations of any
Person whether or not in connection with the operation, improvement, management and maintenance of the Facilities. 
 (y) Settle
any dispute with respect to tax certiorari proceedings with respect to a Facility. 
 (z) Make any decisions with respect to
legal or tax matters which matters could have a material adverse effect upon the Company, any of its Subsidiaries, the Facilities or Sunrise, including, without limitation, any change to any allocation of profit and loss. 

(aa) Exchange or subdivide, or grant any option with respect to, all or any portion of the Facilities, and acquire any option with
respect to the purchase of any real property or granting or relocating any easements benefiting the Facilities, boundary line adjustments, road rights-of-way and other similar dispositions of non-leasehold interests in the Facilities. 

(bb) Set a level of reserves to be maintained by the Company or any Subsidiary. 

(cc) Select an accounting firm other than the so called “big four” accounting firms as the Company’s independent certified
public accountants; removing or replacing the Company’s independent certified public accountants unless such removed firm is replaced by any other of the so called “big four” accounting firms; make any accounting decisions for the
Company or any subsidiary in contradiction of the advice provided by the Company’s approved independent certified public accountants, and approving any financial statements within the agreed time period. 

(dd) Reduce the insurance and fidelity bond coverages carried by the Company or any Subsidiary with respect to the Company or any
Subsidiary and their respective assets, including, without limitation, the Facilities, below the greater of (x) the minimum coverages required by any loan documents and (y) the coverages in effect as of the date hereof, and
(ii) increasing the deductible with respect to any insurance coverages to more than a specified threshold amount. At any time that CHT intends to increase the insurance and/or fidelity bond coverages, Sunrise may require replacement insurance
and fidelity bond coverages to the extent that (a) such replacement insurance and fidelity bond coverages are available from an insurance company satisfactory to CHT and any lender at a lower premium than the premium for the insurance or
fidelity bond coverages in effect as of the date that CHT intends to increase such coverages, (b) the deductible with respect to any such replacement coverages shall not exceed the deductible for the coverages that CHT intends to obtain and
(c) the extent of the coverages provided by such replacement shall be equal to no less than the greater of (1) the coverages required by loan documents, and (2) the coverages in effect as of the date that CHT intends to increase such
coverages. 
 (ee) Select any third-party consultants, including, without limitation, environmental consultants, attorneys or
other professionals, to be employed or commissioned by the Company or any Subsidiary or on behalf of the Company or any Subsidiary, and the termination of any such third party, in each case to the extent related to any redevelopment, renovation or
capital improvement of the Facilities. 

 (ff) Make cash or other property distributions to the Members (other than as expressly
required or permitted under the terms of this Agreement and/or pursuant to an Approved Budget). 
 (gg) Other than with respect
to the service agreements in effect as of the date hereof, cause the Company or any Subsidiary to enter into any service agreements, or assign, cancel, terminate, extend, or modify the same, unless such service agreement (A) either (x) has
a term of one (1) year or less, or (y) is cancelable on not more than thirty (30) days’ notice without penalty and (B) is not in excess of the amount budgeted therefore. 

(hh) Make any decision with respect to any environmental matters affecting the Facilities. 

(ii) Make or agree to any changes to the zoning of the Facilities; and approve the terms and provisions of any restrictive covenants or
easement agreements affecting the Facilities or any portion thereof. 
 (jj) Approve the admission to the Company or any
Subsidiary of a successor or an additional member unless otherwise permitted to be admitted pursuant to this Agreement. 
 (kk)
Make any change or modification to, or waive any provision of, the Operating Leases. 
 (ll) In the event of a termination of
the Facility Manager in accordance with the Management Agreements, hire a new manager that is not an Affiliate of Sunrise. 

 SCHEDULE 6.1 
 Percentage Interests of the Members 
  

									
	Member	  	Percentage
Interest	 	 	Initial Capital
Contribution ($)	 
			
	 CHT SL IV Holding, LLC
	  	 	55.0212	% 	 	$	56,738,699.98	  
			
	 Sunrise Senior Living Investments, Inc.
	  	 	44.9788	% 	 	$	46,382,872.57	  

 Exhibit A 
 Approved Budget 

 Exhibit B 
 Indemnification and Contribution AgreementEX-10.4

 Exhibit 10.4 
 MANAGEMENT AGREEMENT 
 For 

SUNRISE OF CONNECTICUT AVENUE 
 Dated as of 
 June 29, 2012 

Owner: Sunrise Connecticut Avenue Assisted Living Owner, L.L.C. 
 Manager: Sunrise Senior Living Management, Inc. 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
			
	 ARTICLE I
	  	 DEFINITIONS
	  	 	1	  
	 1.01.
	  	 Defined Terms
	  	 	1	  
			
	 ARTICLE II
	  	 APPOINTMENT OF MANAGER AND PRIMARY GOAL OF AGREEMENT
	  	 	14	  
	 2.01.
	  	 Appointment of Manager
	  	 	14	  
	 2.02.
	  	 Goals
	  	 	14	  
			
	 ARTICLE III
	  	 MANAGEMENT FEES
	  	 	15	  
	 3.01.
	  	 Base Management Fee
	  	 	15	  
			
	 ARTICLE IV
	  	 DUTIES AND RIGHTS OF MANAGER
	  	 	15	  
	 4.01.
	  	 Authority of Manager; Right of Possession
	  	 	15	  
	 4.02.
	  	 Marketing Services
	  	 	15	  
	 4.03.
	  	 Management Duties
	  	 	16	  
	 4.04.
	  	 Manager’s Home Office Employees
	  	 	17	  
	 4.05.
	  	 Personnel Administration
	  	 	18	  
	 4.06.
	  	 Purchasing
	  	 	18	  
	 4.07.
	  	 Resident Agreements
	  	 	18	  
	 4.08.
	  	 Ancillary Activities
	  	 	18	  
	 4.09.
	  	 Notice of Licensure Issues
	  	 	19	  
			
	 ARTICLE V
	  	 COLLECTIONS AND PAYMENTS; GROSS REVENUE DISTRIBUTION; OD LOAN; CREDITS AND COLLECTIONS; WORKING CAPITAL;
IMPOSITIONS
	  	 	19	  
	 5.01.
	  	 Collections and Payments
	  	 	19	  
	 5.02.
	  	 Manager Pooling Agreement
	  	 	19	  
	 5.03.
	  	 Distribution of Gross Revenues; OD Loan
	  	 	19	  
	 5.04.
	  	 Credits and Collections
	  	 	21	  
	 5.05.
	  	 Depositories for Funds
	  	 	21	  
	 5.06.
	  	 Working Capital
	  	 	22	  
	 5.07.
	  	 Impositions
	  	 	22	  
			
	 ARTICLE VI
	  	 FINANCIAL RECORDS
	  	 	23	  
	 6.01.
	  	 Accounting and Financial Records
	  	 	23	  
	 6.02.
	  	 Reports
	  	 	24	  
	 6.03.
	  	 Access; Audit
	  	 	24	  
			
	 ARTICLE VII
	  	 ANNUAL OPERATING BUDGET
	  	 	24	  
	 7.01.
	  	 Annual Operating Budget
	  	 	24	  
			
	 ARTICLE VIII
	  	 ENVIRONMENTAL MATTERS
	  	 	25	  
	 8.01.
	  	 Owner Responsibility and Indemnification
	  	 	25	  
	 8.02.
	  	 Manager Responsibility and Indemnity
	  	 	26	  
	 8.03.
	  	 Notice
	  	 	27	  

  
  

- i - 

							
	 8.04.
	  	 Obligation to Comply
	  	 	27	  
			
	 ARTICLE IX
	  	 OTHER FINANCIAL MATTERS
	  	 	27	  
	 9.01.
	  	 Charges
	  	 	27	  
	 9.02.
	  	 Tax Status
	  	 	27	  
	 9.03.
	  	 Employee Withholding
	  	 	28	  
			
	 ARTICLE X
	  	 GENERAL COVENANTS AND OWNER AND MANAGER OBLIGATIONS
	  	 	28	  
	 10.01.
	  	 Owner’s Obligations
	  	 	28	  
	 10.02.
	  	 Manager’s Obligations
	  	 	28	  
	 10.03.
	  	 Quiet Enjoyment
	  	 	28	  
	 10.04.
	  	 Financing of the Facility
	  	 	28	  
			
	 ARTICLE XI
	  	 REPAIRS, MAINTENANCE AND REPLACEMENTS
	  	 	29	  
	 11.01.
	  	 Routine Repairs and Maintenance
	  	 	29	  
	 11.02.
	  	 FF&E Reserve and Routine Expenditures
	  	 	30	  
	 11.03.
	  	 Non-Routine Capital Expenditures
	  	 	32	  
	 11.04.
	  	 Emergency Expenditures
	  	 	33	  
	 11.05.
	  	 Owner to Provide Funds; Failure of Owner to Fund
	  	 	33	  
	 11.06.
	  	 Liens Arising From Repairs and Alterations
	  	 	34	  
			
	 ARTICLE XII
	  	 INSURANCE; DAMAGE; CONDEMNATION; FORCE MAJEURE
	  	 	34	  
	 12.01.
	  	 General Requirements
	  	 	34	  
	 12.02.
	  	 Blanket Policies
	  	 	35	  
	 12.03.
	  	 Risk Management
	  	 	35	  
	 12.04.
	  	 Damage and Repair
	  	 	35	  
	 12.05.
	  	 Condemnation
	  	 	36	  
	 12.06.
	  	 Licensure Issues
	  	 	36	  
			
	 ARTICLE XIII
	  	 TERMINATION OF AGREEMENT
	  	 	37	  
	 13.01.
	  	 General Termination; Termination by Parties
	  	 	37	  
	 13.02.
	  	 Transition upon Termination
	  	 	37	  
	 13.03.
	  	 Repayment of Operating Deficit Loan upon Termination
	  	 	39	  
			
	 ARTICLE XIV
	  	 DEFAULTS
	  	 	39	  
	 14.01.
	  	 Default by Manager
	  	 	39	  
	 14.02.
	  	 Default by Owner
	  	 	39	  
	 14.03.
	  	 Insolvency Default
	  	 	40	  
	 14.04.
	  	 Remedies of Owner
	  	 	40	  
	 14.05.
	  	 Remedies of Manager
	  	 	40	  
	 14.06.
	  	 No Waiver of Default
	  	 	40	  
	 14.07.
	  	 Termination Fee
	  	 	40	  
	 14.08.
	  	 Failure to Pay
	  	 	41	  
	 14.09.
	  	 Manager’s Right to Specific Performance for Owner’s Wrongful Termination
	  	 	41	  
			
	 ARTICLE XV
	  	 LEGAL ACTIONS, INDEMNITIES, AND LIMITATION OF LIABILITY
	  	 	42	  

  
  

- ii - 

							
	 15.01.
	  	 Legal Actions
	  	 	42	  
	 15.02.
	  	 Indemnities
	  	 	42	  
	 15.03.
	  	 Limitation of Liability
	  	 	43	  
			
	 ARTICLE XVI
	  	 REGULATORY AND CONTRACTUAL REQUIREMENTS
	  	 	43	  
	 16.01.
	  	 Regulatory and Contractual Requirements
	  	 	43	  
	 16.02.
	  	 Equal Employment Opportunity
	  	 	44	  
	 16.03.
	  	 Equal Housing Opportunity
	  	 	44	  
			
	 ARTICLE XVII
	  	 PROPRIETARY MARKS; INTELLECTUAL PROPERTY
	  	 	44	  
	 17.01.
	  	 Proprietary Marks
	  	 	44	  
	 17.02.
	  	 Ownership of Proprietary Marks
	  	 	44	  
	 17.03.
	  	 Intellectual Property
	  	 	44	  
	 17.04.
	  	 Trademark License
	  	 	45	  
	 17.05.
	  	 Breach of Covenant
	  	 	45	  
			
	 ARTICLE XVIII
	  	 MISCELLANEOUS PROVISIONS
	  	 	45	  
	 18.01.
	  	 Additional Assurances
	  	 	45	  
	 18.02.
	  	 Right to Inspect
	  	 	45	  
	 18.03.
	  	 Estoppel Certificates
	  	 	45	  
	 18.04.
	  	 Consents, Approval and Discretion
	  	 	46	  
	 18.05.
	  	 No Brokerage
	  	 	46	  
	 18.06.
	  	 Notices
	  	 	46	  
	 18.07.
	  	 Severability
	  	 	48	  
	 18.08.
	  	 Gender and Number
	  	 	48	  
	 18.09.
	  	 Division and Headings
	  	 	48	  
	 18.10.
	  	 Confidentiality of Information
	  	 	48	  
	 18.11.
	  	 Right to Perform
	  	 	49	  
	 18.12.
	  	 Assignment by Manager or Owner; Controlling Interest Sale; Facility Sale
	  	 	49	  
	 18.13.
	  	 Entire Agreement; Amendment
	  	 	53	  
	 18.14.
	  	 Relationship Between the Parties
	  	 	53	  
	 18.15.
	  	 Force Majeure
	  	 	53	  
	 18.16.
	  	 Subordination, Non-disturbance and Attornment Agreements
	  	 	53	  
	 18.17.
	  	 Arbitration
	  	 	54	  
	 18.18.
	  	 Cooperation
	  	 	56	  
	 18.19.
	  	 Manager Pooling Agreement as Controlling Agreement
	  	 	56	  
	 18.20.
	  	 Costs of Dispute
	  	 	56	  
	 18.21.
	  	 Governing Law; Litigation, Jurisdiction and Waiver of Jury Trial
	  	 	56	  
	 18.22.
	  	 Counterparts
	  	 	57	  
	 18.23.
	  	 Contracting with Affiliates
	  	 	57	  
	 18.24.
	  	 Parent Subordination
	  	 	57	  
	 18.25.
	  	 Facility Name
	  	 	58	  
	 18.26.
	  	 Parent and Owner Consents
	  	 	58	  
	 18.27.
	  	 REIT Compliance
	  	 	58	  

  
  

- iii - 

 LIST OF EXHIBITS 

 

			
	Exhibit A	  	Description of Real Property
	Exhibit B-1	  	Facility Shared Services
	Exhibit B-2	  	B-2 Direct Expenses
	Exhibit C-1	  	Financial Reporting Requirements
	Exhibit C-2	  	Form of Quarterly Certification
	Exhibit D	  	Form of Proposed Budget
	Exhibit E	  	Current Insurance Program

  
  

- iv - 

 MANAGEMENT AGREEMENT 

THIS MANAGEMENT AGREEMENT (“Agreement”) is made as of June 29, 2012 (“Effective Date”) by
and among SUNRISE SENIOR LIVING MANAGEMENT, INC., a Virginia corporation (“Manager”), SUNRISE CONNECTICUT AVENUE ASSISTED LIVING OWNER, L.L.C., a Virginia limited liability company (“Owner”), and
CHTSUN PARTNERS IV, LLC, a Delaware limited liability company (“Parent”). 
 RECITALS: 

A. Owner has a fee interest in that certain real property described in Exhibit A, attached hereto and made a part hereof, on
which is constructed an assisted living facility, located in Washington, D.C. and known as Sunrise of Connecticut Avenue (hereinafter referred to as the “Facility”). 

B. Owner wishes to appoint Manager as manager of the Facility and Manager desires to accept such appointment and manage the Facility.

 NOW, THEREFORE, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 

1.01. Defined Terms. The following terms shall have the following meanings when used in the Agreement: 

AAA. The term “AAA” is defined in Section 18.17. 

Accountants. The term “Accountants” means Ernst & Young LLP, PricewaterhouseCoopers, Deloitte Touche
Tohmatsu, and KPMG as selected by Owner and Manager, or such other firm of independent certified public accountants as may be approved by Owner and Manager. 
 Accounting Period. The term “Accounting Period” means and refers to a calendar month. 
 Affiliate. The term “Affiliate” means a Person, which controls, is controlled by, or is under common control with another Person. For the purposes of this definition,
“control” means the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interest, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing. A Person shall not be deemed to be under common “control” with another Person solely based on the fact that one or more Person(s) serve as a
director of both Persons. 
 Agreement. The terms “Agreement” and this “Agreement”
means this Management Agreement by and among Parent, Owner and Manager, and any amendments thereto as may be from time to time agreed to in writing by the parties. 

  
  

 

 Approved Budget. The term “Approved Budget” means the annual
operating budget for the operation of the Facility approved by Owner in accordance with Article VII. 
 Arbitration
Proceeding. The term “Arbitration Proceeding” is defined in Section 18.17. 
 Bad Debt. The
term “Bad Debt” means the Facility’s accounts receivable deemed to be uncollectable and written off, and the allowance for bad debts per the Manager’s policy, as consistently applied within Manager’s System.

 Base Management Fee. The term “Base Management Fee” is defined in Section 3.01. 

Business Day. The term “Business Day” means any day other than Saturday, Sunday or any other day on which banks
or savings and loan associations in New York, New York are not open for business. 
 Capital Budget. The term
“Capital Budget” is defined in Section 11.03(a). 
 Capital Transaction. The term “Capital
Transaction” means the sale, exchange or disposition of any of Owner’s property, the refinancing of any of Owner’s property or casualty damage to or condemnation of any of Owner’s property. 

CHT. The term “CHT” is defined in Section 6.02. 

CHT Partner. The term “CHT Partner” is defined in Section 14.08. 

Collection Proceedings. The term “Collection Proceedings” is defined in Section 15.01. 

Continuation Notice. The term “Continuation Notice” is defined in Section 18.12. 

Controlling Interest. The term “Controlling Interest” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person. 
 Controlling Interest Sale. The term
“Controlling Interest Sale” means any direct or indirect sale, assignment (other than a collateral assignment given in connection with a financing of the Facility), transfer or other disposition, for value or otherwise, voluntary or
involuntary, by Owner or its Affiliate of a Controlling Interest in Owner. For purposes of this Agreement, a Controlling Interest Sale shall include any sale, assignment, transfer, or other disposition, for value or otherwise, voluntary or
involuntary, in a single transaction or a series of related transactions. For the avoidance of any doubt, the sale, assignment or other disposition of any interest in Parent shall not be considered a Controlling Interest Sale for purposes of this
Agreement. 
 Debt Service. The term “Debt Service” means the monthly payments of principal and interest
payable on the note secured by or to be secured by the Facility Mortgage. 
 Downpayment. The term
“Downpayment” is defined in Section 18.12(d). 

  
  

- 2 - 

 Effective Date. The term “Effective Date” is defined in the Preamble
of this Agreement. 
 Emergency Expenditures. The term “Emergency Expenditures” is defined in
Section 11.04. 
 Emergency Requirements. The term “Emergency Requirements” means any of the
following events or circumstances: (1) an emergency threatening the Facility, or the life, safety or property of its residents, invitees or employees; (2) a Legal Requirement which if not complied with may subject Owner or Manager to
financial liability; (3) a condition, the continuation of which may subject Owner or Manager to civil or criminal liability or may cause a default under any third party indebtedness of Owner, or (4) a Force Majeure event that prevents
Manager from managing or operating the Facility pursuant to Manager’s Standards. 
 Environmental Law(s). The term
“Environmental Law(s)” means: (1) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., as now or hereafter amended and the Resource Conservation and Recovery Act of 1976, as
now or hereafter amended; (2) the regulations promulgated thereunder, from time to time; and (3) all federal, state, municipal and local laws, rules and regulations (now or hereafter in effect) dealing with the use, generation, treatment,
management, storage, disposal or abatement of Hazardous Materials or protection of human health or the environment. 
 Escrow
Agent. The term “Escrow Agent” means a nationally recognized title company reasonably acceptable to Manager. 
 Event of Default by Manager. The term “Event of Default by Manager” is defined in Section 14.01. 
 Event of Default by Owner. The term “Event of Default by Owner” is defined in Section 14.02. 
 Facility. The term “Facility” is defined in the recitals to this Agreement. 
 Facility Expenses. 
 (a) The term “Facility Expenses”
means those costs and expenses that are directly related to the operation, maintenance, repair costs and staffing of the Facility, which expenses and payment of expenses shall be administered by Manager from the Facility’s Gross Revenues,
including, without limitation: 
  

	 	•	 	 Costs of inventory and supplies used in the operation of the Facility; 

 

	 	•	 	 Costs payable to prevent, cure or correct any violation of federal, state or municipal laws, ordinances, regulations, restrictive covenants or orders
or the rules of the applicable Board of Fire Underwriters with respect to the leasing, use, repair or maintenance of the Facility and any expense incurred in order to obtain or maintain any operating permits or licenses, including any registration
fees and expenses and legal fees associated therewith; 

  
  

- 3 - 

	 	•	 	 Costs payable to make repairs and perform all maintenance and preventative maintenance and other routine property maintenance and upkeep services with
respect to the Facility other than those paid from the FF&E Reserve; 

  

	 	•	 	 Costs payable for the collection of delinquent rentals collected through an attorney or collection agency and other costs required in connection with
the enforcement of any lease or resident agreement with respect to the Facility (including, without limitation, legal fees, reasonable disbursements and moving and storage expenses for FF&E and personal property of Residents and/or lessees);

  

	 	•	 	 Costs payable under service contracts to which Owner or Manager is a party with respect to the Facility; 

 

	 	•	 	 Costs payable to third parties for advertising and leasing expenses with respect to the Facility (including, but not limited to, promotions, printing
and signs), or a pro rata share thereof where such advertising is for the benefit of the Facility and other facilities; 

  

	 	•	 	 Costs payable to third parties for auditing, tax preparation and accounting services with respect to the Facility, and reasonable attorneys’ fees
incurred with respect to the Facility; 

  

	 	•	 	 All reasonable costs and fees of audit, legal, technical and other independent professionals who are retained by Manager to perform professional
services (which for purposes of this paragraph shall exclude repair, maintenance and alterations work not of a professional nature) required or permitted hereunder; provided that, so long as the Facility is subject to the Manager Pooling Agreement,
Manager will obtain Owner’s prior written consent with respect to any such proposed expenditures to the extent required under Section 5.3 of the Manager Pooling Agreement, unless such expenditures are necessary to satisfy Emergency
Requirements, in which case Owner’s consent shall not be required provided that Manager provides Owner with prompt written notice of such expenditure; 

 

	 	•	 	 The reasonable cost and expense of technical consultants and operational experts who are employees of Manager or one of its Affiliates and who perform
specialized services (that is, services not otherwise required to be provided by Manager hereunder for and in consideration of the fees payable hereunder) in connection with Facility work (including, but not limited to, regional office employees and
employees of Sunrise Senior Living, Inc. or its Affiliates who assist with the Facility operations which includes an information technology help desk and a regional business manager); provided, however, that the costs and expenses so incurred shall
only be Facility Expenses to the extent such costs and expenses are reasonable and competitively priced, as compared to similar work done by outside consultants or experts; and provided, further, so long as the Facility is subject to the Manager
Pooling Agreement, Manager will obtain 

  
  

- 4 - 

	 	 
Owner’s prior written consent with respect to any such proposed expenditures to the extent required under Section 5.3 of the Manager Pooling Agreement, unless such expenditures are
necessary to satisfy Emergency Requirements, in which case Owner’s consent shall not be required provided that Manager provides Owner with prompt written notice of such expenditure; 

 

	 	•	 	 Costs incurred by Manager for all personnel employed at the Facility or whose services are entirely allocable to the Facility, and for those personnel
employed in part at the Facility and in part at other facilities, a reasonable share of costs of such personnel (determined by factors such as services rendered in a facility and operational complexities and percent of such personnel’s time
spent in connection with the Facility), such costs to include salary and wages (including costs of processing, printing and mailing of payroll checks and W-2 forms), training programs, hiring expenses, payroll taxes, workers’ compensation,
bonus compensation, incentive compensation, retirement plan payments, travel expenses and other benefits payable (including, for example, health insurance, dental insurance, life insurance and disability insurance) to such personnel;

  

	 	•	 	 Costs payable to third parties for printed forms and supplies required for use at the Facility; 

 

	 	•	 	 Costs of all utilities serving the Facility; 

  

	 	•	 	 Costs payable to third parties for printed checks and bank account maintained by Owner or Manager in accordance with this Agreement with respect to the
Facility; 

  

	 	•	 	 To the extent required to be carried by Manager pursuant to the terms of this Agreement, costs of insurance at the Facility which include: insurance
premiums; the ultimate costs of self-insured losses and deductibles; claims administration costs; risk management costs; and other program costs including premium taxes, fronting fees, state Workers’ Compensation self-insurance assessments,
collateral fees and surety bonds supporting self-insurance programs, and broker fees; 

  

	 	•	 	 Costs incurred to third parties incurred in order to prevent a breach under a lease or a Facility Mortgage; 

 

	 	•	 	 The Base Management Fee payable to Manager under the terms of this Agreement; 

 

	 	•	 	 Costs incurred by Manager for electronic data processing equipment, systems, software or services used at the Facility, including procurement,
maintenance and upgrades; 

  

	 	•	 	 All Impositions described in Section 5.07; 

  

	 	•	 	 Costs incurred by Manager for comprehensive crime insurance or fidelity bonds for Facility employees; and 

  
  

- 5 - 

	 	•	 	 Any other costs, fees or expenses included in, and which Manager is authorized to incur in accordance with the terms and conditions set forth in this
Agreement. 

 (b) Facility Expenses will include a proportionate share of Facility Shared Services used at the
Facility. At Owner’s request, Manager shall provide Owner with an analysis of the formula and methodology employed by Manager in allocating the Facility Shared Services among the applicable facilities which allocation shall be a fair and
reasonable formula based upon use by the other facilities within the Manager’s System (and Owner’s allocation of Facility Shared Services shall not be disproportionate as compared to Facility Shared Services used by other facilities within
the Manager’s System). Facility Expenses will also include charges for services provided directly to the Facility by employees of Manager or Manager’s Affiliates who do not work at the Facility which services are set forth in Exhibit B-2
attached hereto. The amount, type, and cost of the Facility Shared Services that are necessary to maintain the Facility in accordance with Manager’s Standards and will be included in the Proposed Budget submitted to Owner pursuant to Article
VII. 
 (c) Facility Expenses shall not include the following: 

 

	 	•	 	 Except as expressly agreed to by Owner, or included in the Approved Budget or as otherwise set forth above, costs incurred by Manager for salary and
wages, payroll taxes, workers’ compensation, bonus compensation, incentive compensation, retirement plan payments, travel expenses and other benefits payable to Manager’s or Manager’s Affiliates’ corporate office employees or
divisional or regional supervisor employees (including, without limitation, non-incentive stock option grants and any bonus compensation to such employees); 

 

	 	•	 	 Except as expressly agreed to by Owner as part of an annual request by Manager, costs incurred by Manager for in-house accounting and reporting
systems, software or services furnished by Manager under this Agreement, as distinguished from third party accounting and reporting costs (as for example, the annual auditing costs of Accountants), which shall be Facility Expenses;

  

	 	•	 	 Costs incurred by Manager for forms, papers, ledgers and other supplies, equipment, copying and telephone of any kind used in Manager’s office at
any location other than the Facility; 

  

	 	•	 	 Except as expressly agreed to by Owner, costs incurred by Manager for political contributions; 

 

	 	•	 	 Costs attributable to losses which are covered by the indemnity obligations of Manager pursuant to Section 15.02(a) of this Agreement;

  

	 	•	 	 Except to the extent included in an Approved Budget or as otherwise expressly agreed to by Owner, costs incurred by Manager for training and hiring
expenses related to corporate office employees or divisional or regional supervisory employees, including but not limited to employment and employment agency fees; 

  
  

- 6 - 

	 	•	 	 Costs incurred by Manager for advertising expenses of Manager other than costs of marketing the Facility for lease or occupancy, or costs of employment
ads for positions at the Facility; 

  

	 	•	 	 Costs incurred by Manager for any architect, engineer, or other professional advisor or consultant employed by Manager, as distinguished from cost for
third parties engaged for the performance of such services, which shall be Facility Expenses; 

  

	 	•	 	 Costs incurred by Manager for dues of Manager or any of its employees in professional organizations or for any of Manager’s employees
participating in industry conventions or meetings (except to the extent included in an Approved Budget or as otherwise specifically approved by Owner); 

 

	 	•	 	 Any insurance premiums and deductibles and real estate taxes payable by the Owner if Owner is making those payments directly rather than having Manager
make those payments on Owner’s behalf; and 

  

	 	•	 	 Debt Service. 

 For purposes of consents required to be given by Owner as described in this definition of “Facility Expenses,” an approval by Owner given by e-mail from a person so authorized to give such
consent as determined by Owner from time to time to Manager will be sufficient. 
 Facility Mortgage. The term
“Facility Mortgage” means any mortgage, deed of trust or indemnity deed of trust recorded against all or any portion of the Facility as security for a secured loan. 

Facility Sale. The term “Facility Sale” means any sale, assignment (other than a collateral assignment given in
connection with a financing of the Facility), transfer or other disposition, for value or otherwise, voluntary or involuntary, of Owner’s title or other interest (or any part thereof) to the Facility (either fee or leasehold title, as the case
may be). For purposes of this Agreement, a Facility Sale shall include (a) a lease (or sublease) of all or substantially all of the Facility to any Person, and (b) any sale, assignment, transfer, or other disposition of all or
substantially all of the Facility, for value or otherwise, voluntary or involuntary, in a single transaction or a series of related transactions. 
 Facility Shared Services. The term “Facility Shared Services” shall mean (i) those expenses for goods or services that relate to the Facility and to other Facilities in
Manager’s System which are set forth on Exhibit B-1, and (ii) expenses for such other services that are provided by Manager throughout the Manager’s System from time to time as reasonably approved by Owner in the
Approved Budget, which charges shall not include general corporate overhead or general corporate operating expenses of Manger or its Affiliates. 
 FF&E. The term “FF&E” means furniture, furnishings, fixtures, soft goods, case goods, vehicles and equipment (including but not limited to telephone systems, facsimile
machines, communications and computer systems hardware) located in or on or used exclusively in 

  
  

- 7 - 

 
connection with the operation of the Facility but shall not include Household Replacements or any software. FF&E shall be and remain the property of Owner during the Term and upon the
expiration or termination of this Agreement. 
 FF&E Estimate. The term “FF&E Estimate” is
defined in Section 11.02(c). 
 FF&E Reserve. The term “FF&E Reserve” means the reserve
established pursuant to Section 11.02(a). FF&E Reserve shall be and remain the property of Owner during the Term and upon the expiration or termination of this Agreement. 

FF&E Reserve Balance. The term “FF&E Reserve Balance” means, as of any date, an amount equal to the
difference between (1) the amount actually paid into the FF&E Reserve pursuant to Article V and (2) the amounts due to be paid into the FF&E Reserve pursuant to Article V. Any portion of the FF&E Reserve Balance remaining
unpaid at the end of any Fiscal Year shall accrue and become payable as a portion of the FF&E Reserve for the subsequent Fiscal Year. 
 FF&E Reserve Payment. The term “FF&E Reserve Payment” is defined in Section 11.02(f). 
 Financing. The term “Financing” is defined in Section 10.04(a). 
 Fiscal Year. The term “Fiscal Year” means the calendar year. 
 FMV Determination Notice. The term “FMV Determination Notice” is defined in Section 12.04(c). 
 Force Majeure. The term “Force Majeure” is defined in Section 18.15. 
 GAAP. The term “GAAP” means “U.S. generally accepted accounting principles.” 
 Guaranty. The term “Guaranty” means that certain Guaranty dated as of the date hereof made by Parent in favor of Manager. 

Governmental Authority. The term “Governmental Authority” means any federal, state, county or municipal
government, or political subdivision thereof, any governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court or administrative tribunal. 

Gross Revenues. The term “Gross Revenues” means for each Accounting Period, all revenues and receipts of every
kind derived from operating the Facility and all departments and parts thereof, including, but not limited to: income (from both cash and credit transactions) from monthly occupancy fees, health care fees and ancillary services fees received
pursuant to various agreements with residents of the Facility; interest received with respect to the monies in any operating account of the Facility; income from food and beverage, and catering sales; income from telephone charges; income from
vending machines; and proceeds, if any, from business interruption or other loss of income insurance (to the extent such insurance either reimburses on the basis of gross revenues or otherwise covers all expenses including Manager’s fees), all

  
  

- 8 - 

 
determined on an accrual basis in accordance with GAAP consistently applied; provided, however, that Gross Revenues shall not include: (i) gratuities to employees at the
Facility; (ii) federal, state or municipal excise, sales or use taxes or similar taxes imposed at the point of sale and collected directly from residents or guests of the Facility or included as part of the sales price of any goods or services,
such as gross receipts or similar taxes; (iii) proceeds from the sale or disposition of FF&E or other capital assets (which proceeds will be deposited in the FF&E Reserve); (iv) interest received or accrued with respect to the
monies in any reserve accounts of the Facility; (v) any cash refunds, rebates or discounts to residents of the Facility, or cash discounts and credits of a similar nature, given, paid or returned in the course of obtaining Gross Revenues or
components thereof; (vi) proceeds from any sale of the Facility or any part thereof, or any other Capital Transaction; (vii) proceeds of any financing transaction affecting the Facility; (viii) security or resident fee deposits until
such time as the same are applied to current fees and other charges due and payable; (ix) awards of damages, settlement proceeds and other payments received by Owner in respect of any litigation other than litigation to collect fees due for
services rendered from the Facility; (x) proceeds of any condemnation; (xi) proceeds of any casualty insurance, other than loss of rents or business interruption insurance; (xii) payments under any policy of title insurance;
(xiii) income derived from securities and other property acquired and held for investment; (xiv) income from services to the extent they are outsourced and (xv) contributions by Owner. Any Bad Debt, or any community fees or deposits
that are refunded to a resident shall be credited against Gross Revenues during the Accounting Period in which such Bad Debt is recognized or such refunds are made, as the case may be, if such amounts were previously included in Gross Revenues. Any
Bad Debt which is recognized but is later collected shall be added to Gross Revenues. 
 Hazardous Materials. The term
“Hazardous Materials” is defined in Section 8.01. 
 Home Office Employees. The term “Home
Office Employees” is defined in Section 4.04. 
 Household Replacements. The term “Household
Replacements” means supply items, except for FF&E, used or held in storage for future use, as are customarily used on a daily basis and are necessary in connection with the operation of the Facility in accordance with the terms of this
Agreement, including linen, china, glassware, silver, uniforms, and similar items, including food, beverages, medical supplies, soaps, shampoos or any other similar consumable product. 

Impositions. The term “Impositions” is defined in Section 5.07(b). 

Indemnitee. The term “Indemnitee” is defined in Section 8.02. 

Index. The term “Index” means the Consumer Price Index: All Urban Consumers, (1982-84=100), All Items, U.S. City
Average (CPI-U), as published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or otherwise revised during the Term, such other government index or computation with which it is replaced shall be
used. If the Index is discontinued with no successor Index, another similar index with an appropriate conversion factor shall be substituted. If the Index is changed so that a base year other than 1982-84 is used, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor Statistics. 

  
  

- 9 - 

 Initial Arbitrator. The term “Initial Arbitrator” is defined in
Section 18.17. 
 Insurance Program. The term “Insurance Program” is defined in Section 12.01.

 Insurance Retention. The term “Insurance Retention” is defined in Section 13.02. 

Intellectual Property. The term “Intellectual Property” means (1) all computer software developed and owned
by Manager or an Affiliate of Manager; and (2) all manuals, instructions, policies, procedures and directives issued by Manager to its employees at the Facility regarding the procedures and techniques to be used in operation of the Facility.
The term “Intellectual Property” shall include Proprietary Marks but does not include the data and information stored or maintained on the Intellectual Property. 
 Interest. The term “Interest” means the lower of (i) sixteen percent (16%) per annum or (ii) the highest interest permitted under applicable laws. 

JV Agreement. The term “JV Agreement” is defined in Section 14.08. 

Legal Requirements. The term “Legal Requirements” means any law, code, rule, ordinance, regulation, license,
certificate or order of any Governmental Authority having jurisdiction over the business or operation of the Facility or the matters which are the subject of this Agreement, including any resident care or health care, building, zoning or use laws,
ordinances regulations or orders, environmental protection laws, employment laws, occupational health and safety laws and fire department rules. 
 Loan Documents. The term “Loan Documents” is defined in Section 10.04(b). 
 Major Casualty. The term “Major Casualty” means any fire or other casualty that results in damage to the Facility to a greater extent than a Minor Casualty. 

Management Agreement. The term “Management Agreement” means this Agreement and any Replacement Management
Agreement. 
 Manager. The term “Manager” is defined in the Preamble of this Agreement. 

Manager FMV Determination. The term “Manager FMV Determination” is defined in Section 12.04(c). 

Manager Indemnitee(s). The terms “Manager Indemnitee” and “Manager Indemnitees” are defined in
Section 8.01. 
 Manager Pooling Agreement. The term “Manager Pooling Agreement” means the Manager
Pooling Agreement dated as of the date hereof by and among Manager, Owner along with tenants at certain other facilities managed by Manager, and Parent, as the same may be amended from time to time. 

Manager Receivables. The term “Manager Receivables” is defined in Section 18.24. 

  
  

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 Manager’s Standards. The term “Manager’s Standards” means,
from time to time, the (1) operational standards (for example, housekeeping, food service, activities, staffing levels, resident care and health care policies and procedures) and (2) the physical standards (for example, life safety
equipment and policies and procedures, amounts and quality of FF&E, frequency of FF&E replacement) that are then implemented or in the process of being implemented at seventy-five percent (75%) or more of similarly situated, in
Manager’s reasonable judgment, assisted living and/or independent living communities in Manager’s System, but in any event not less than the operational and physical standards of other senior living communities of similar size and market
orientation; provided that in no event shall Manager’s Standards be permitted to fall below the operational and physical standards as in effect as of the Effective Date. 
 Manager’s System. The term “Manager’s System” means at any particular time the system or group of assisted living and/or independent living communities then owned and/or
operated or managed by Manager (or one or more of its Affiliates). 
 Marketing Services. The term “Marketing
Services” is defined in Section 4.02. 
 Minor Casualty. The term “Minor Casualty” means
any fire or other casualty which results in damage to the Facility and/or its contents, and in the reasonable judgment of Manager the out-of-pocket expenses (to the extent not covered by insurance proceeds) of the “Repair and/or
Replacement” equals or is less than One Million Dollars ($1,000,000) (excluding any required insurance deductibles). For purposes of this paragraph, “Repair and/or Replacement” shall mean the repair and/or replacement of the Facility
and/or its contents to substantially the same condition as existed prior to the fire or other casualty resulting in damage to the Facility and its contents. 
 Monthly Reports. The term “Monthly Reports” is defined in Section 4.03(k). 
 Mortgagee. The term “Mortgagee” means the holder, from time to time, of a Facility Mortgage or any replacement of a Facility Mortgage. 

Net Operating Income. The term “Net Operating Income” means, for each Accounting Period or Fiscal Year, as
applicable, all Gross Revenues in excess of Facility Expenses. For purposes of calculating Net Operating Income, any capital expenditure (determined in accordance with GAAP) and FF&E Reserve necessary to operate and maintain the Facility shall
not be included in the definition of Facility Expenses. 
 Non-Compliance Costs. The term “Non-Compliance
Costs” is defined in Section 16.01(b). 
 Non-Routine Capital Expenditures. The term “Non-Routine
Capital Expenditures” means all other capital projects and/or items not provided for in Section 11.02, including, without limitation, (i) renovations, replacements and maintenance to the Facility which are included in the Approved
Budget and which are normally capitalized consistent with Manager’s Standards and GAAP such as flooring in common areas and full replacement of roofs and parking areas, and (ii) any other expenses necessary for alterations, improvements,
renewals or replacements to the Facility building’s structure or exterior facade or to its mechanical, electrical, heating, ventilating, air conditioning, plumbing, or vertical transportation systems which are classified as capital expenditures
under GAAP. 

  
  

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 OD Loan. The term “OD Loan” (Operating Deficit Loan) is defined in
Section 5.03. 
 Offered Purchase Price. The term “Offered Purchase Price” is defined in
Section 18.12(d). 
 Operating Year. The term “Operating Year” shall mean a twelve (12) month
period commencing at midnight on January 1 and ending at 11:59 p.m. on December 31 of each calendar year during the Term. 
 Owner. The term “Owner” is defined in the Recitals of this Agreement. 
 Owner Indemnitee(s). The terms “Owner Indemnitee” and “Owner Indemnitees” are defined in Section 8.02. 

Parent. The term “Parent” is defined in the Preamble of this Agreement. 

Permitted Expenditure Limit. The term “Permitted Expenditure Limit” is defined within the definition of
“Facility Expenses” in Section 1.01. 
 Person. The term “Person” means any individual,
partnership, corporation, limited liability company, trust or other legal entity. 
 Proposed Budget. The term
“Proposed Budget” is defined in Section 7.01. 
 Proprietary Marks. The term “Proprietary
Marks” means all trademarks, trade names, symbols, logos, slogans, designs, insignia, emblems, devices, service marks and distinctive designs of buildings and signs, or combinations thereof, which are used to identify the Facility. The term
“Proprietary Marks” shall also include all trade names, trademarks, symbols, logos, designs, etc, which are used in connection with the operation of the Facility during the Term. The term “Proprietary Marks” shall include all
present and future Proprietary Marks, whether they are now or hereafter owned by Manager or any of its Affiliates, and whether or not they are registered under the laws of the United States or any other country. 

Purchase Notice. The term “Purchase Notice” is defined in Section 18.12(d). 

Qualified Broker. The term “Qualified Broker” is defined in Section 12.04(c). 

Qualified Transferee. The term “Qualified Transferee” means (a) CNL Healthcare Trust, Inc., a Maryland
corporation, provided that such entity (A) has total assets in excess of Two Hundred Million Dollars ($200,000,000), (B) has as its advisor (pursuant to an advisory agreement as to management, acquisition, advisory and administrative
services) an Affiliate of CNL Financial Group, Inc., a Florida corporation, (C) is not known in the community as being of bad moral character, and (D) is not in control of or is controlled by any one or more persons who have been convicted
of a felony involving turpitude in any state or federal court, (b) any other real estate investment trust, provided that such entity (A) has total assets in excess of Two 

  
  

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Hundred Fifty Million Dollars ($250,000,000), (B) is not known in the community as being of bad moral character, and (C) is not in control of or is controlled by any one or more persons
who have been convicted of a felony involving turpitude in any state or federal court, or (c) a bank, saving and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or
pension advisory firm, mutual fund, United States government entity or plan, investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an
institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended which is regularly engaged in the business of directly or indirectly owning or operating real estate and which has total
assets (in name or under management) in excess of Two Hundred Fifty Million Dollars ($250,000,000); provided that, in the case of subsection (c) of this definition, such Person (i) does not, either directly or indirectly, have an ownership
interest (excluding that of a mere franchisee or a mere passive investor with a non-controlling interest) in a brand of retirement communities totaling at least ten (10) retirement communities, if such brand of retirement communities competes
with Manager, (ii) does not, either directly or indirectly, have an ownership interest (excluding that of a mere franchisee or a mere passive investor with a non-controlling interest) in a group of retirement communities totaling at least ten
(10) retirement communities that are not affiliated with a brand but that are marketed and operated as a collective group, if such group of retirement communities competes with Manager, (iii) is not affiliated with a brand or group
described in (i) and (ii) above, (iv) is not known in the community as being of bad moral character, and (v) is not in control of or is controlled by any one or more persons who have been convicted of a felony involving turpitude
in any state or federal court. 
 Replacement Management Agreement. The term “Replacement Management
Agreement” shall mean a management agreement for the management of the Facility executed by Manager and a Person which replaces the Management Agreement in effect immediately prior to the replacement. 

Residents. The term “Residents” is defined in Section 2.02. 

Response. The term “Response” is defined in Section 18.12(d). 

Routine Expenditures. The term “Routine Expenditures” is defined in Section 11.02. 

Sale Notice. The term “Sale Notice” is defined in Section 18.12(b). 

Sale Offer. The term “Sale Offer” is defined in Section 18.12(d). 

Second Notice. The term “Second Notice” is defined in Section 12.04(c). 

Software. The term “Software” means all computer software and accompanying documentation (including all future
upgrades, enhancements, additions, substitutions and modifications thereof) that are owned or leased by Manager and used in connection with its operations at the Facility. 

  
  

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 Term. The “Term” shall begin on the Effective
Date, and, unless sooner terminated, shall continue until the thirtieth (30th) anniversary of the first day of the month immediately after the Effective Date. 
 Termination Date. The term “Termination Date” is defined in Section 14.07. 
 Termination Fee. The term “Termination Fee” is equal to the amount determined by multiplying (a) five (5) by (b) an amount equal to the aggregate of (i) the
Base Management Fee payable to Manager during the twelve (12) month period preceding the Termination Date and (ii) if any Incentive Fee (as defined in the Manager Pooling Agreement) is payable to Manager on account of the pooled
Facilities’ performance during the twelve (12) month period preceding the Termination Date, an amount equal to twenty-six and two tenths percent (26.2%) of the Incentive Fee payable to Manager on an annualized basis for such period.

 Trademark License. The term “Trademark License” is defined in Section 17.04. 

Venue. The term “Venue” is defined in Section 18.17. 

ARTICLE II 

APPOINTMENT OF MANAGER AND PRIMARY GOAL OF AGREEMENT 
 2.01. Appointment of Manager. Owner hereby appoints Manager and Manager hereby accepts appointment, subject to the terms and conditions of this Agreement, as the sole and exclusive manager for the
daily operation and management of the Facility. Except as otherwise provided herein, Manager shall have responsibility and complete and full control and discretion in the operation, direction, management and supervision of the Facility in accordance
with Manager’s Standards and the Approved Budget. Manager accepts said appointment and agrees to operate the Facility during the Term of this Agreement in accordance with the terms and conditions herein set forth. 

2.02. Goals. 
 (a) It is the joint goal of Owner and Manager to: 
 (1) Establish
and maintain programs to promote the most effective utilization of the Facility’s services; 
 (2) Provide
quality services to residents of the Facility (the “Residents”) in a manner consistent with the form of resident agreement in use at the Facility and the Approved Budget (as hereinafter defined); 

(3) Establish appropriate marketing programs and maintain a public image of excellence for the Facility; 

(4) Maintain a sufficient number of well trained and quality staff at the Facility; 

(5) Operate the Facility on a sound financial basis; 

  
  

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 (6) Institute a sound financial accounting system for the Facility;

 (7) Institute adequate internal fiscal controls through proper budgeting, accounting procedures, and timely
financial reporting; 
 (8) Establish sound billing and collection procedures and methods; 

(9) Conform operations at the Facility to all applicable Legal Requirements, including without limitation, those
pertaining to licensing; and 
 (10) Take such other steps as are necessary to provide high quality care to the
Residents. 
 ARTICLE III 
 MANAGEMENT FEES 
 3.01. Base Management Fee. As compensation for the
services to be rendered by Manager pursuant to this Agreement, during the Term, Owner hereby instructs Manager to pay itself, through retention or other means, on a monthly basis, in arrears, a management fee (the “Base Management
Fee”) equal to six percent (6%) of Gross Revenues per month. The Base Management Fee will be paid in accordance with Section 5.03 by determining such fee from the Gross Revenues for the Accounting Period to which such Base
Management Fee applies. 
 ARTICLE IV 
 DUTIES AND RIGHTS OF MANAGER 
 4.01. Authority of Manager; Right of
Possession. Facility operations shall be under the exclusive supervision and control of Manager who, except as otherwise specifically provided in this Agreement and as set forth in the Approved Budget, shall be responsible for the proper and
efficient operation of the Facility. Manager shall have discretion and control, in all matters relating to day-to-day management and operation of the Facility, including, without limitation, the following: fees and charges for providing
accommodations, food services, care services, and related services to Residents and their guests; supervision of resident care; credit policies; food and beverage services; employment policies; executing, modifying and terminating licenses and
concessions for commercial space within the Facility in accordance with Section 4.03 below (provided that the term of any such license or concession shall not extend beyond the Term of this Agreement); receipt, holding and disbursement of
funds; maintenance of bank accounts; procurement of inventories, supplies and services; promotion and publicity; and, generally, all activities necessary for the operation of the Facility. 

4.02. Marketing Services. Manager shall provide the following services (the “Marketing Services”): 

(a) Direct the marketing efforts for the Facility. 
 (b) Plan and implement community outreach, public relations and special events programs. 

  
  

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 (c) Arrange and contract for all advertising and promotion of the Facility which Manager in
its reasonable discretion deems necessary or appropriate for the operation of the Facility, to the extent the costs of such advertising and promotion are included in the Approved Budget. 

4.03. Management Duties. As manager of the Facility, Manager shall, subject to adequate funds being available from Gross Revenues
or otherwise provided by Owner, implement all aspects of the operation of the Facility in accordance with the terms of this Agreement, the Approved Budget and Manager’s Standards, and shall have responsibility and commensurate authority for all
such activities. In addition to any other duties set forth in this Agreement, Manager shall, subject to adequate funds being available from Gross Revenues or otherwise provided by Owner: 

(a) Enter into all contracts, leases and agreements required in the ordinary course of business for the supply, operation, maintenance
and service of the Facility (including but not limited to food procurement, trash removal, pest control and elevator maintenance) and, subject to adequate funds being available from Gross Revenues or otherwise provided by Owner, pay the costs of all
such services when due; provided that Owner’s consent shall be required, not to be unreasonably delayed, withheld or conditioned, for any leases for the occupancy of space at the Facility, except for resident agreements as permitted hereunder
and leases permitted under Section 4.08 below which are in connection with services customarily provided at facilities of similar size and class as the Facility. 
 (b) Purchase inventories, provisions, food, supplies and other expendable items. 

(c) Recruit, hire, supervise and train all employees to be employed at the Facility. 

(d) Provide care to Residents of the Facility as provided for in the resident agreement agreed to by the parties. 

(e) Set all resident fees and use its commercially reasonable efforts to collect such fees. 

(f) Oversee and manage all day-to-day operations. 
 (g) Obtain, renew and maintain all licenses and permits necessary in order to operate the Facility in accordance with Legal Requirements and the terms of this Agreement. 

(h) Establish and revise, as necessary, administrative policies and procedures including, without limitation, policies and procedures for
the control of revenue and expenditures, for the purchase of Household Supplies and services, for the control of credit, and for the scheduling of maintenance. 
 (i) Make or install, or cause to be made or installed, in the name of Owner, all normal capital repairs, decorations, renewals, revisions, alterations, rebuilds, replacements, additions, and improvements
in and to the Facility building and FF&E, in the ordinary course of 

  
  

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business, that Manager deems necessary or appropriate for the proper operation and maintenance of the Facility in accordance with Manager’s Standards and otherwise in accordance with this
Agreement and the Approved Budget. 
 (j) Except as otherwise provided in any Loan Documents, open and maintain the bank
accounts as required by this Agreement. 
 (k) Prepare and deliver to Owner the Proposed Budget, the reports and financial
statements required pursuant to Article VI (the “Monthly Reports”) and such other information as required by this Agreement. 
 (l) Plan, execute and supervise repairs and maintenance at the Facility. 
 (m)
Procure and maintain insurance in accordance with Article XII. 
 (n) Operate the Facility in compliance with any Facility
Mortgage, and, promptly after obtaining knowledge of the same, notify Owner of any notice of violations or default under any Facility Mortgage. Notwithstanding the foregoing sentence, so long as no Affiliate of Manager holds a direct or indirect
ownership interest in Owner, Manager shall have the obligation to comply with the provisions of any Facility Mortgage only to the extent that Owner has provided written notice to Manager of the terms of the Facility Mortgage with which Owner
requires Manager to comply with and such terms do not prevent Manager from operating the Facility in compliance with Legal Requirements and Manager’s Standards. In all events, Manager shall only have the obligation to comply with the provisions
of any Facility Mortgage to the extent that there are sufficient funds available to Manager out of Gross Revenues or otherwise provided by Owner to cover the costs and expenses incurred by Manager in connection with the compliance by Manager with
the terms of the Facility Mortgage. 
 (o) Conduct such other operations from time to time as may be required under this
Agreement. 
 4.04. Manager’s Home Office Employees. As part of the provision of the services provided by Manager,
Manager shall from time to time make its employees who are not working directly at the Facility (the “Home Office Employees”) available to the on-site management staff for consultation and advice related to the Facility (exclusive
of the Facility Shared Services). Home Office Employees include Manager’s home office staff and staff at other facilities managed by Manager and its Affiliates with experience in areas such as accounting, budgeting, finance, human resources,
construction, development, marketing, food service and purchasing. Owner may reasonably request such services, but the decision to provide Home Office Employees shall be within the reasonable discretion of Manager. Except as provided with respect to
Facility Shared Services, which shall be a Facility Expense hereunder, the services of Home Office Employees shall be provided at no additional charge to Owner. Should Owner request a type, form or level of service that Home Office Employees do not
provide in the normal course of operations to carry out the scope of services described in this Agreement and which do not constitute a Facility Shared Service hereunder, Manager shall (1) provide such services by Home Office Employees for an
additional cost to be agreed to in advance by Manager and Owner, which cost shall be a Facility Expense, or (2) if such services cannot be 

  
  

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provided by Manager’s Home Office Employees or if Manager and Owner cannot agree on the cost thereof, and Owner so directs Manager in writing, use commercially reasonable efforts to locate
and contract for such services from outside consultants, the cost of which shall be a Facility Expense. 
 4.05. Personnel
Administration. The personnel at the Facility shall be employed by Manager, and the salaries, costs and benefits of such employees shall be Facility Expenses. Manager shall be responsible for recruiting, hiring, training, promoting, assigning,
supervising and discharging the personnel of the Facility and shall be responsible for the formulation, implementation, modification and administration of wage scales, rates of compensation, employee insurance, employee taxes, in-service training,
attendance at seminars or conferences, staffing schedules, job descriptions and personnel policies with respect to the personnel of the Facility in accordance with the Approved Budget. 

4.06. Purchasing. Manager shall use, on behalf of the Facility, such purchasing systems and procedures developed by or otherwise
available to Manager for all items that are consistent with the Approved Budget. Any purchase by Manager made pursuant to or otherwise ancillary to this Agreement shall be made with Manager acting for and at the expense of the Facility or Owner.
Owner acknowledges that Manager is not a merchant and thus is not making any representations or warranties with respect to the goods or services purchased by Manager for use at the Facility, implied or otherwise. In the event that Manager receives
any competitive discounts or rebates due to its relationships with vendors, Manager covenants to allocate a fair and reasonable portion of any such discounts or rebates to the Facility in order to reduce Facility Expenses. 

4.07. Resident Agreements. Owner acknowledges and agrees that it has received from Manager the forms of resident agreement,
resident lease or resident occupancy agreement contemplated to be used by Manager at the Facility and has approved such forms. Manager shall act on behalf of Owner in executing resident agreements, resident leases and resident occupancy agreements
and amendments and renewals thereof, substantially in the form of the form approved by Owner as of the Effective Date with any changes to such form as Manager may determine in its discretion to be necessary or desirable for the operation of the
Facility, provided that such changes meet Legal Requirements and Manager’s Standards. Notwithstanding the immediately preceding sentence, in the event any changes to any resident agreement, resident lease or resident occupancy agreement would
result in a materially adverse consequence to Owner, Manager shall obtain the approval of Owner in connection with such changes. 
 4.08. Ancillary Activities. Manager and/or its Affiliates shall have the right, to utilize the Facility for ancillary activities the revenues from which will not be included in Gross Revenues, so
long as (i) any such ancillary activities are separately contracted for by Manager and/or its Affiliates and outside the scope of the assisted living and independent living services being provided to Residents in the Manager’s System (such
as providing rehabilitation, hospice or other intensive care services to certain Residents), (ii) such ancillary activities are outside the scope of the services being provided to Residents on a usual basis, (iii) no such ancillary
activities impair the health and safety of the Residents or the quality of services provided to them by Manager under this Agreement, (iv) Owner receives a fair market rental and reimbursement for any space or equipment in the Facility being
utilized or utilities being consumed in 

  
  

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connection therewith, (v) no employees of Manager whose salaries and benefits are being paid by Owner shall be utilized in the conduct of any ancillary activities and (vi) any such
ancillary activities would not have a materially adverse economic impact on the Facility. The foregoing shall not prohibit employees at the Facility from making referrals to prospective Residents to more appropriate services, and receiving fees for
such referrals to the extent referral fees are permitted under applicable federal, state and local laws, provided that Manager demonstrates to Owner’s reasonable satisfaction that such ancillary activities may be reasonably expected to provide
long-term benefit to the business of the Facility. For example, but not by way of limitation, the referral of a prospective Resident to an at-home care program, where such prospective Resident is not yet in need of assisted living or independent
living services, provides contact and marketing opportunities which encourage the individual to become a Resident on a later date when assisted living or independent living services are appropriate. No program shall be established where it is more
beneficial to refer an individual to a different service than to have the individual become a Resident. In connection with the delivery of the Proposed Budget in accordance with Section 7.01 Manager shall deliver a written or oral notice to
Owner describing Manager’s anticipated ancillary activities during the fiscal year to which the Proposed Budget pertains. If Owner believes that a proposed ancillary activity is in violation of this Section 4.08 and Owner refuses to
consent to such ancillary activity, then Owner shall have the right to submit the dispute to Arbitration in accordance with Section 18.17.
 4.09. Notice of Licensure Issues. If Manager receives a notice from a Governmental Authority which presents or reasonably would be expected to present a threat to the continued licensure of the
Facility, Manager shall promptly provide Owner with a copy of such notice. 
 ARTICLE V 

COLLECTIONS AND PAYMENTS; GROSS REVENUE DISTRIBUTION; OD LOAN; 

CREDITS AND COLLECTIONS; WORKING CAPITAL; IMPOSITIONS 
 5.01. Collections and Payments. Manager shall be responsible for collecting all Gross Revenues and fees billed to Residents and for paying Facility Expenses as agreed in the Approved Budget.

 5.02. Manager Pooling Agreement. So long as the Facility is subject to the Manager Pooling Agreement, in each Fiscal
Year, Gross Revenues shall be distributed, to the extent available, as provided in the Manager Pooling Agreement and the provisions of Section 5.03 shall not apply. 
 5.03. Distribution of Gross Revenues; OD Loan. 
 (a)
Distributions. For any period during which the Facility is not subject to the Manager Pooling Agreement, no later than the twentieth (20th) day following the end of each Accounting Period, the following items shall be paid by Manager from Gross
Revenues, to the extent cash, revenues and receipts derived from operating the Facility are on hand and available with respect to such Accounting Period, in the following order of priority: 

  
  

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 (1) pay Facility Expenses (including the Base Management Fee) payable during
such Accounting Period, 
 (2) transfer into the FF&E Reserve those amounts required to be deposited into the
FF&E Reserve pursuant to this Agreement, plus any FF&E Reserve Balance, 
 (3) pay Debt Service under the
Facility Mortgage, 
 (4) pay any outstanding principal and accrued interest under any OD Loan, 

(5) pay the remainder of the Gross Revenues, to Owner. 
 If and to the extent cash, revenues and receipts on hand and available are insufficient to satisfy the foregoing distribution, such deficiency shall be paid on the next distribution date on which cash,
revenues and receipts on hand are sufficient to pay such distribution. In determining the amount of Gross Revenues available for distribution pursuant to Section 5.03(a), Manager shall use the accrual method of accounting. If at any time,
including pursuant to the annual audit, Manager or Owner establishes that the distributions made pursuant to this subsection (a) with respect to a particular Accounting Period have not been correctly made, each party agrees that it will pay the
appropriate amount to the other party to correct any mistakes; provided that there shall be no such obligation after the conclusion of two consecutive annual audits of the particular Accounting Period. All monthly distributions under this
Section 5.03 shall initially be based upon the aggregate results anticipated as reflected in the Approved Budget for the Facility. If actual results vary from the Approved Budget, then Manager shall adjust the distributions of Gross Revenues
based on its good faith estimate of anticipated results for the remainder of the full Fiscal Year, which estimate shall be based on actual year-to-date performance, and subject to ongoing cumulative reconciliation and repayment, if applicable, on a
quarterly basis, to be conducted by Manager. For any period during which the Facility is not subject to the Manager Pooling Agreement, if the portion of Gross Revenues to be paid pursuant to Sections 5.03(a)(1), (2), (3), and (4) above is
insufficient in any Fiscal Year to pay such amount in full for such Fiscal Year, any amount left unpaid shall accrue beyond such Fiscal Year and if Owner does not promptly fund such deficit as it relates to payments for Sections 5.03(a)(1),
(2) and (3), Manager may (but shall have no obligation to) fund such deficit pursuant to an OD Loan. 
 (b) OD Loan.
If, during any Accounting Period, Gross Revenues during such period are insufficient to pay the amounts set forth in Section 5.03(a)(1), (2) and (3) in full for such period, Owner shall fund any such shortfall within ten
(10) days after notice from the Manager of such shortfall. If Owner shall fail to fund any such shortfall, such failure shall be an Event of Default by Owner under this Agreement. Nevertheless, Manager or an Affiliate of Manager shall have the
right (but not the obligation) to advance the necessary funds to cover such shortfall and such funds shall be deemed to be a loan to Owner (the “OD Loan”). The OD Loan will initially bear no interest, will be unsecured and will be
repayable by Owner to Manager or an Affiliate of Manager within thirty (30) days after written notice of the amount of the OD Loan is delivered to the Owner. Thereafter, if the OD Loan remains unpaid following the expiration of such thirty
(30) day period, Manager shall have the right to withdraw an amount 

  
  

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equal to the OD Loan (including accrued interest) pursuant to Section 5.03(a) above. In addition, Manager shall have the right, but not the obligation, to offset any unpaid OD Loan amounts
against any amounts owed to Owner as a Cure Amount under Section 2.1(c) of the Manager Pooling Agreement. The outstanding principal amount of the OD Loan shall bear interest at the rate of Interest accruing from the 31st day after funding until
its repayment based on a 360 day year for the actual number of days elapsed. 
 5.04. Credits and Collections. Manager
shall install credit and collection policies and procedures, and Manager shall institute reasonable steps necessary to effectuate monthly billing by the Facility, and the collection of accounts and monies owed to the Facility. This also includes the
institution of legal proceedings in the name of Owner, Manager and/or the Facility to collect such accounts or to enforce the rights of Owner or Manager as creditor under any contract in connection with the rendering of any service or the purchase
of any goods, if necessary after Manager has used commercially reasonable efforts to collect such accounts, or to enforce such rights without the institution of such proceedings. Any and all reasonable costs and/or fees charged by a third party in
connection with the collections and/or enforcement set forth in this Section shall be included in Facility Expenses. 
 5.05.
Depositories for Funds. 
 (a) Manager shall maintain accounts and investments in such banks, savings and loan
associations, and other financial institutions designated by Manager and reasonably approved by Owner. These accounts shall be in Manager’s name as agent for Owner, and withdrawals from such accounts shall be made solely by representatives of
Manager whose signatures have been authorized to access the accounts, and the Manager shall be responsible for reimbursement of any amounts misappropriated from such accounts by its employees. These accounts shall be segregated from other of
Manager’s accounts and investments. Manager shall maintain such balances therein as Manager shall deem appropriate, taking into account the cash flow management needs of the Facility and the disbursement from such accounts of such amounts of
the Facility’s funds as Manager shall from time to time reasonably determine to be appropriate in the discharge of the responsibilities of Manager under this Agreement, as well as remaining in accordance with the Approved Budget. Any interest
earned on the amounts in such funds (but not in the FF&E Reserve) shall be treated as Gross Revenues of the Facility. It is Owner’s responsibility to provide the funds needed to operate the Facility in a manner designed to meet the mutual
goals of Owner and Manager set forth in Section 2.02 above, consistent with the terms of this Agreement. Upon Owner’s request, Manager shall provide to Owner a list of all bank accounts maintained by Manager with respect to the Facility.
Reasonable petty cash funds shall be maintained at the Facility. 
 (b) Notwithstanding anything to the contrary contained
herein, all accounts and investments maintained by Manager or Owner hereunder shall be subject to the terms and conditions of any Loan Documents. In the event of any conflict between the Loan Documents and this Agreement with respect to such
accounts or investments, the Loan Documents shall govern. 

  
  

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 5.06. Working Capital. 

(a) As used herein, “Working Capital” means assets which are reasonably necessary and used for the day-to-day operation
of the Facility’s business, including, without limitation, amounts sufficient for the maintenance of petty cash funds, amounts deposited in operating bank accounts, receivables, prepaid expenses, and funds required to maintain inventories and
pay all Facility Expenses as they become due, less accounts payable and accrued current liabilities. Owner shall be responsible for ensuring that Manager has sufficient Working Capital at all times for operation of the Facility in accordance with
the Approved Budget and in accordance with Manager’s Standards. 
 (b) During the period that the Facility is subject to
the Manager Pooling Agreement, the Manager Pooling Agreement shall apply for determining Working Capital needs of the Facility. 

(c) Manager will manage the Working Capital of the Facility prudently and in accordance with the Approved Budget. During the period that
the Facility is not subject to the Manager Pooling Agreement, if Manager reasonably determines that levels of Working Capital drop below levels generally consistent with Manager’s Standards and as are reasonably required to satisfy
Manager’s Standards, Manager may submit to Owner an estimate of additional Working Capital needed, together with reasonable backup explaining the cause for such shortfall. Owner shall provide such additional Working Capital to Manager no later
than fifteen (15) days after receipt of a written request for the same, and shall give notice to Manager within five (5) Business Days after receipt of such written request if Owner disputes the need for such additional Working Capital. In
the event that Owner disputes Manager’s request for additional Working Capital, the dispute will be resolved exclusively by arbitration pursuant to Section 18.17. Either party may initiate such arbitration. Owner shall pay such disputed
additional Working Capital to Manager to be held in escrow by Manager until such time as the arbitrator renders its decision and Owner shall disburse any undisputed amount directly to Manager to be used as additional Working Capital. 

(d) Any Working Capital provided by Owner shall remain the property of Owner throughout the Term of this Agreement. Working Capital shall
be available for use by Manager in accordance with this Agreement. Upon termination of this Agreement, Owner shall retain any of its unused Working Capital. 
 5.07. Impositions. 
 (a) All Impositions (defined below) which accrue
during the Term of this Agreement (or are properly allocable to such Term under GAAP) shall be paid by Manager from Gross Revenues, as a Facility Expense, before any fine, penalty or interest is added thereto or lien placed upon the Facility or this
Agreement, unless payment thereof is stayed; provided, however, that nothing herein shall impose upon Manager responsibility for funding payment of Impositions from Manager’s own funds. Owner shall within five (5) Business
Days after the receipt of any invoice, bill, assessment, notice or other correspondence relating to any Imposition, furnish Manager with a copy thereof. Owner may initiate proceedings (or direct Manager to initiate proceedings) to contest any
Imposition (in which case each party agrees to sign the required applications and otherwise cooperate with the other party in expediting the matter), and all reasonable costs of any negotiations or proceedings with respect to any such contest shall
be paid from Gross Revenues and shall be a Facility Expense. 

  
  

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 (b) The term “Impositions” means all levies, taxes, assessments and similar
charges, including, without limitation, the following: real estate taxes, sales taxes, goods and services taxes, all water, sewer or similar fees, rents, rates, charges, excises or levies, vault license fees or rentals; license fees; inspection fees
and other authorization fees and other charges by a Governmental Authority of any kind or nature whatsoever, whether general or special, ordinary or extraordinary, foreseen or unforeseen, or hereinafter levied or assessed of every character
(including all interest and penalties thereon), which at any time during or in respect of the Term of this Agreement may be assessed, levied, confirmed or imposed on Owner or Manager with respect to the Facility or the operation thereof, or
otherwise in respect of or be a lien upon the Facility (including, without limitation, on any of the inventories or Household Replacements now or hereafter located therein). Impositions shall not include any of the following: (1) any income or
franchise taxes payable by Owner or Manager, or (2) any franchise, corporate, estate, inheritance, succession, capital levy or transfer tax imposed on Owner, all of which shall be paid solely by the party against whom such expense was assessed,
not from Gross Revenues or any other funds generated by or held with respect to the Facility. Notwithstanding the foregoing, any Impositions resulting from Manager’s gross negligence or willful misconduct, or fines or penalties imposed due to
Manager’s failure to correct a noticed deficiency prior to the imposition of a fine (provided that reasonable notice and time to cure was given), or as a result of a repeat of a prior violation for which Manager was cited in the prior twelve
(12) month period, shall be paid by Manager from its own funds and not as a Facility Expense, provided that Manager shall not be responsible for Impositions if Manager’s fault for such Impositions (i) is caused by an Event of Default
by Owner, (ii) is caused by lack of funding by Owner, or (iii) is a result of the fact that Owner did not follow Manager’s recommendations for establishing sufficient funds in the Approved Budget. In the event that Manager and Owner
disagree as to whether an Imposition is appropriate for reimbursement as a Facility Expense, the dispute will be resolved exclusively by arbitration pursuant to Section 18.17. Either party may initiate such arbitration. 

ARTICLE VI 

FINANCIAL RECORDS 
 6.01. Accounting and Financial Records. Manager shall, at its own expense, establish and administer accounting procedures and controls and systems for the development, preparation and safekeeping
of records and books of accounting relating to the business and financial affairs of the Facility, including payroll, accounts receivable and accounts payable, and shall prepare monthly, quarterly and annual financial reports (including profit and
loss statements) in accordance with the requirements of Exhibit C-1 attached hereto. Such interim reporting shall compare monthly and year-to-date results with the Approved Budgets. Manager shall prepare annual financial reporting in
accordance with GAAP and reasonably cooperate with the Accountants in the annual audit. Manager shall also cooperate with Owner to provide any third-party lenders on the Facility with any reasonable Facility related financial information required by
such third-party lenders under the terms of any loan secured by a Facility Mortgage, provided that Manager shall receive reasonable additional compensation for any different reporting formats required. If required by such third-party lenders,
Manager shall certify such reports as true and correct in all material respects. The reasonable costs of the annual audit shall be a Facility Expense. 

  
  

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 6.02. Reports. In addition to the Monthly Reports, Manager shall keep Owner informed
as to the financial status, condition, and operation of the Facility and as to any State or local reporting requirements in connection with the licenses and permits necessary for Manager to operate the Facility, with written reports and such other
or special reports as Manager may from time to time determine are necessary or which Owner may reasonably request. From and after such time Sunrise Senior Living Investment, Inc. (“SSLII”) is no longer required to deliver to CHT SL
IV Holding, LLC (“CHT”) a quarterly certification under that certain Delegation Agreement, dated as of the date hereof, between SSLII and CHT, Manager shall also provide Owner, within twenty (20) days following the end of each
quarter during the Fiscal Year, a quarterly certification in the form set forth on Exhibit C-2 attached hereto. So long as Owner is indirectly owned by SSLII and/or CHT, Manager shall maintain a system of internal controls necessary
for SSLII’s and CHT’s Sarbanes-Oxley certifications in the manner currently maintained by Manager. 
 6.03. Access;
Audit. Owner shall have the right at least three (3) business days notice to Manager and at all reasonable times during the usual business hours of the Facility, to audit, examine and make copies of books of account maintained by Manager
with respect to the Facility. Such right may be exercised through any agent or employee designated by Owner or by the Accountants. Further, at the end of the Term of this Agreement, or upon other termination of this Agreement, as provided herein,
copies of all books and records kept for the Facility, including all records kept on electronic media, and accounts and funds belonging to each Facility, are to be promptly delivered to Owner in a form readable by generally available software.
Manager shall have the right to locate any and all books of account and other records maintained by Manager with respect to the Facility either at Manager’s corporate office, located in McLean, Virginia or at the Facility. In the case of books
of account and other records located at Manager’s corporate office, Manager shall make adequate space available to Owner at Manager’s corporate office to audit, examine and make copies of such books of account and other records, and
Manager shall be under no obligation to relocate such records to the Facility for Owner’s review. In the event of any such audit, the final accounting shall be controlling over any interim accountings and the parties agree to make any necessary
corrective financial adjustments determined by any such audit. 
 ARTICLE VII 

ANNUAL OPERATING BUDGET 
 7.01. Annual Operating Budget. (a) Manager shall, within the time limits set forth on Exhibit C-1, deliver to Owner (i) a draft annual operations budget for the next Fiscal
Year for the Facility in the form attached hereto as Exhibit D (the “Proposed Budget”), for Owner’s approval, (ii) an estimate, on an Accounting Period basis, of Gross Revenues and Facility Expenses, and
(iii) an explanation of anticipated changes to resident charges, payroll rates and positions, non-wage cost increases, the proposed methodology and formula employed by Manager in allocating the cost of Facility Expenses, a line-item detail of
any shared Facility Expenses, and all other factors differing from the then current Fiscal Year. The Proposed Budget shall be considered by the Owner and, upon consultation with Manager, a final annual operations

  
  

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budget (the “Approved Budget”) shall be approved based on the Proposed Budget. If there is a delay in the finalization of a new Approved Budget, or if the Proposed Budget is not
approved as aforesaid, Manager shall operate the Facility pursuant to the prior Fiscal Year’s Approved Budget, increased by the greater of (i) three and one-half percent (3.5%) or (ii) any increase in the Index, until the
Proposed Budget is approved by Owner. The amount of the Index increase for each Fiscal Year shall be determined by multiplying the Approved Budget for the previous Fiscal Year by a fraction, the numerator of which shall be (i) the Index most
recently published immediately prior to the next Fiscal Year, minus (ii) the Index most recently published immediately prior to the immediately preceding Fiscal Year, and the denominator of which shall be the Index most recently published
immediately prior to the immediately preceding Fiscal Year. Mathematically, the Index increase calculation may be expressed as (current Index - last year Index) ÷ last year Index. Provided that Manager is not an Affiliate of a Person holding
a direct or indirect ownership interest in Owner, if consensus cannot be reached between the parties as to the Proposed Budget within sixty (60) days of Owner’s receipt of the Proposed Budget, the dispute will be resolved exclusively by
arbitration pursuant to Section 18.17 (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be resolved subject to and in accordance with the JV
Agreement). Either party may initiate such arbitration. Manager shall use commercially reasonable efforts to adhere to the Approved Budgets, it is understood, however, that the Approved Budget is only a projection by Manager of estimated results and
that various circumstances such as, but not limited to, the cost of labor, material, services and supplies, casualty, operation of law, or economic and market conditions may make achievement of the Approved Budget impracticable or not obtainable.
Except for expenditures necessary to satisfy any Emergency Requirements, Manager will secure Owner’s prior approval if actual aggregate annual expenditures exceed the aggregate annual expenditures set forth in the Approved Budget by more
than 10% (the “Permitted Variance”). Notwithstanding the foregoing, Owner’s approval shall not be required if such excess actual aggregate annual expenditures (in excess of 10%) results in a Net Operating Income margin
consistent with that in the Approved Budget for the applicable year. Notwithstanding anything contained herein to the contrary, any references to actions of Manager being “in accordance with the Approved Budget” or words of similar import
shall mean the Approved Budget as adjusted by the Permitted Variance. 
 ARTICLE VIII 

ENVIRONMENTAL MATTERS 
 8.01. Owner Responsibility and Indemnification. In the event of the discovery of non-compliance with any Environmental Law related to Hazardous Materials (as defined below) on any portion of the
Facility during the Term of this Agreement, Owner shall promptly remedy such matter to achieve compliance, including if required the removal of such Hazardous Materials, together with all contaminated soil and containers and shall otherwise remedy
the problem in accordance with all Environmental Laws, except Manager shall bear the costs of such remediation at its own cost and expense if and to the extent such problem is the result of Manager’s gross negligence or willful misconduct.
Owner shall indemnify, defend and hold harmless Manager, its stockholders, members, partners, trustees, directors, officers, agents, employees and beneficiaries, and any of their respective successors or assigns with respect to their interest in the
Facility (collectively, the “Manager Indemnitees” and, individually, a “Manager Indemnitee”) for, from and against any and all debts, liens, claims, causes of action,

  
  

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administrative orders or notices, fines, penalties, expenses, loss, costs, liability and damage (including, without limitation, engineers fees, attorneys’ fees and expenses and the cost of
litigation) arising from the aforementioned non-compliance with Environmental Laws; and this indemnification obligation of Owner shall survive for one (1) year after termination of this Agreement. This duty includes, but is not limited to,
costs associated with personal injury or property damage claims as a result of the presence of Hazardous Material in, upon or under the soil or ground water of the Facility in violation of any Environmental Law prior to the expiration or sooner
termination of this Agreement. Owner shall undertake any litigation defense through its own legal counsel (at its sole cost and expense) of any indemnification duties arising from this Section 8.01. If Manager determines that the Manager
Indemnitee’s interests in the outcome of such litigation conflicts with Owner’s interest, Manager shall have the right to participate in any litigation defense through its own legal counsel at Owner’s sole cost and expense, provided
that Owner shall not be liable for any attorney fees incurred by Manager and Manager Indemnitees if it is determined by a judicial, administrative or arbitral proceeding that the presence of Hazardous Materials (which served as the basis of the
Environmental Law violation) was caused by Manager’s gross negligence or willful misconduct (with no contributory negligence or willful misconduct on the part of Owner), in which case Manager shall be responsible for both its own and
Owner’s legal costs and expenses incurred in connection with this Section 8.01. “Hazardous Materials” shall mean and include any substance or material containing one or more of any of the following: “hazardous
material,” “hazardous waste,” “hazardous substance,” “regulated substance,” “petroleum,” “pollutant,” “contaminant,” or “asbestos” as such terms are defined in any applicable
Environmental Law in such concentration(s) or amount(s) as may impose clean-up, removal, monitoring or other responsibility under the Environmental Laws, as the same may be amended from time to time, or which may present a significant risk of harm
to Residents, invitees or employees of the Manager or the Facility. All costs and expenses of the aforesaid removal of Hazardous Materials from the Facility and of the aforesaid compliance with all Environmental Laws shall be paid as a Facility
Expense or from the FF&E Reserve (and Owner shall promptly replenish the FF&E Reserve to the extent funds from the FF&E Reserve were used in connection with any such action). Any amounts paid to Manager pursuant to the indemnity set
forth in this Section 8.01, shall be paid by Owner from its own funds not as a Facility Expense nor from the FF&E Reserve. 
 8.02. Manager Responsibility and Indemnity. To the extent not otherwise covered by insurance maintained by either Manager or Owner, Manager shall protect, indemnify and hold harmless Owner, its
stockholders, members, partners, trustees, directors, officers, agents, employees and beneficiaries, and any of their respective successors or assigns with respect to their interest in the Facility (collectively, the “Owner
Indemnitees” and, individually, a “Owner Indemnitee”) for, from and against any and all debts, liens, claims, causes of action, administrative orders or notices, fines, penalties, expenses, loss, costs, liability and damage
(including, without limitation, engineers fees, attorneys’ fees and expenses and the cost of litigation) imposed upon, incurred by or asserted against any Owner Indemnitee resulting from, either directly or indirectly, the presence during the
Term in, upon or under the soil or ground water of the Facility or any properties surrounding the Facility of any Hazardous Materials in violation of any Environmental Law, to the extent that any of the foregoing arises by reason of the gross
negligence or willful misconduct of Manager, except to the extent the same also arises from the negligence or wrongful conduct of a third party or any other Owner Indemnitee. This duty includes, but is not limited to, costs associated with personal
injury or property damage 

  
  

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claims as a result of the presence prior to the expiration or sooner termination of this Agreement of Hazardous Materials in, upon or under the soil or ground water of the Facility in violation
of any Environmental Law. Upon written notice from the indemnified party and any other of the Owner Indemnitees, Manager shall undertake any litigation defense through its own legal counsel (at its sole cost and expense) of any indemnification
duties set forth under this Section 8.02. If Owner determines that the Owner Indemnitee’s interests in the outcome of such litigation conflicts with Manager’s interest, Owner shall have the right to participate in any litigation
defense through its own legal counsel at the sole cost and expense of Manager, provided that Owner shall be liable for any and all attorney fees incurred by Manager and the Owner Indemnitees if it is determined by a judicial, administrative or
arbitral proceeding that the presence of Hazardous Materials (which served as the basis of the Environmental Law violation) was not caused by Manager’s gross negligence or willful misconduct. The Owner and Indemnities, at their own expense,
will cooperate fully with Manager. The indemnity obligation of Manager set forth in this Section 8.02 shall survive for one (1) year after termination of this Agreement. 

8.03. Notice. Each party shall undertake reasonable efforts to notify the other party concerning the non-compliance of any
Environmental Law or presence of any Hazardous Materials on or under the Facility of which the notifying party has knowledge; provided, however, that, except to the extent permitted by Section 18.10 below, the parties shall otherwise maintain
such information confidential. 
 8.04. Obligation to Comply. Manager agrees to take all reasonable actions necessary to
comply with all requests of lenders and insurers and with all Legal Requirements including implementing any and all remedial or preventative maintenance programs as circumstances may reasonably require to comply with any and all Environmental Laws.
All such costs shall be paid as a Facility Expense to the extent they are typical and ordinary maintenance expenses, but if such costs are extraordinary in nature or should be properly treated as a capitalized expense, Owner shall bear such costs
and shall promptly pay such expenses. 
 ARTICLE IX 

OTHER FINANCIAL MATTERS 
 9.01. Charges. As part of the Approved Budget and at other times as determined by Manager, Manager will establish the overall rate structure of the Facility, including, without limitation,
residency room charges, charges for all ancillary services, and charges for supplies, medication, and special services performed by Facility personnel. All such charges shall take into account the financial obligations of the Facility, the level of
rates at other comparable facilities, and the importance of providing housing, services and care at a competitive rate, all considered in a manner most likely to achieve the goals set forth in Section 2.02 above. 

9.02. Tax Status. Subject to the provisions of this Agreement, Manager shall use its reasonable efforts to cause the Facility to
be operated in a manner to assure that Owner and the Facility receive all benefits of Federal, State, county, municipal and city or district tax exemptions and/or credits available thereto. Manager shall provide Owner reasonably available data in
its possession, or otherwise reasonably available to Manager, relating to the Facility which Owner may need for the preparation of Federal and State tax returns. Manager shall 

  
  

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provide such information upon request by Owner and in a timely manner so that Owner shall have sufficient time to prepare and file any necessary tax returns. Manager shall not be responsible for
the preparation of any of Owner’s tax returns. 
 9.03. Employee Withholding. Manager shall use commercially
reasonable efforts to comply with all applicable local, State and Federal requirements concerning the withholding of taxes from employee wages. 
 ARTICLE X 
 GENERAL COVENANTS AND OWNER AND MANAGER OBLIGATIONS

 10.01. Owner’s Obligations. Owner hereby agrees to comply with all of the applicable provisions of this
Agreement and to perform all obligations of Owner as otherwise set forth herein. Owner further agrees to take all steps reasonably necessary to facilitate Manager’s provision of management services hereunder in accordance with the terms of this
Agreement and Manager’s Standards, and to ensure, consistent with the provisions herein, that Owner, and Owner’s employees and agents, provide necessary assistance and cooperation to Manager in connection therewith. 

10.02. Manager’s Obligations. Manager hereby agrees to comply with all of the provisions in this Agreement and to perform all
obligations of Manager as otherwise set forth herein. 
 10.03. Quiet Enjoyment. Owner covenants that, so long as Owner
has not terminated this Agreement by reason of (a) an Event of Default by Manager under this Agreement, or (b) the exercise by Owner of any right of Owner to terminate this Agreement under any other Section of this Agreement, Manager shall
quietly hold, occupy and enjoy the Facility throughout the Term hereof free from hindrance or ejection by Owner or other party claiming under, through or by right of Owner. Owner agrees to pay and discharge any payments and charges and, at its
expense, to prosecute all appropriate actions, judicial or otherwise, necessary to assure such free and quiet occupancy except those resulting from any act or failure to act on the part of Manager in violation of this Agreement. Nothing set forth in
the preceding sentence, however, shall be deemed to create a recourse obligation by Owner to pay any payment or charge pursuant to a contract that is otherwise, by its terms, non-recourse to Owner. 

10.04. Financing of the Facility. 
 (a) Facility Mortgage. Manager shall use commercially reasonable efforts to cooperate with Owner, as may be reasonably requested by Owner, in its efforts to obtain financing or replacement
financing (a “Financing”) for the Facility on favorable terms (e.g., providing prospective lender with information about Manager generally available to the public from a publicly traded company). Owner shall have the right to
encumber all of the assets that comprise the Facility, any part thereof, or any interest therein, including the common elements on which the Facility is located, the Facility building and all improvements thereto and all FF&E and equipment and
operating supplies placed in or used in connection with the operation of the Facility as contemplated in any Facility Mortgage that is entered into by Owner, provided that any Mortgagee under such Facility Mortgage grants reasonable non-disturbance
to Manager, 

  
  

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further provided that the Facility Mortgage shall not allow such Mortgagee to use any Working Capital or FF&E Reserve amounts to pay debt service on the Facility Mortgage as such Working
Capital and FF&E Reserve amounts shall be used exclusively for the operation of the Facility. 
 (b) Owner Consent.
If the loan documents executed in connection with a Financing or any subordination, non-disturbance and attornment agreement executed by Manager in connection with the Financing (the “Loan Documents”) contain provisions requiring
Manager (upon default under the Financing or upon various other stipulated conditions) to pay certain amounts which are otherwise due to Owner under the Management Agreement (after the payment of Facility Expenses) to the lender or its designee
(rather than to Owner), Owner hereby gives its consent to such provisions, which consent shall be deemed to be irrevocable until the entire Financing debt secured by the Facility has been discharged. 

(c) Modification of Manager’s Obligations. The parties acknowledge that a lender under a proposed Financing may impose
requirements on the operations of the Facility that exceed those or are different from those set forth in this Agreement or the Manager Pooling Agreement pursuant to the terms and conditions of the Loan Documents. Manager shall comply with those
obligations under the Loan Documents that are within the scope of Manager’s duties under this Agreement or the Manager Pooling Agreement, and execute an amendment to this Agreement or the Manager Pooling Agreement reflecting any additional
obligations or duties required by the Loan Documents but only to the extent that (i) any additional duties or obligations shall be subject to Manager’s reasonable ability to perform, (ii) no budgetary or other restriction which might
be imposed by any lender shall in any way impair Manager’s ability to maintain all appropriate licenses for the Facility nor expose Manager to any potential liability for inadequate care, (iii) adequate funds are provided to Manager
(either by the Facility’s cash flow or by Owner), and (iv) such additional duties or obligations do not diminish the formula for the fees or reimbursements becoming due to Manager under this Agreement or the Manager Pooling Agreement and
do not otherwise (A) adversely affect Manager’s rights and interests under this Agreement or the Manager Pooling Agreement or (B) create any additional liabilities or obligations on the part of Manager under this Agreement or the
Manager Pooling Agreement. 
 ARTICLE XI 
 REPAIRS, MAINTENANCE AND REPLACEMENTS 
 11.01. Routine Repairs and
Maintenance. Manager shall maintain the Facility in good repair and condition and in conformity with applicable Legal Requirements (or in conformity with Manager’s Standards, if higher), and shall make or cause to be made such routine
maintenance, repairs and minor alterations, and Emergency Expenditures which are not capitalized under GAAP, the cost of which can be expensed under GAAP, as it, from time to time, deems necessary for such purposes. The cost of such maintenance,
repairs and alterations shall be paid from Gross Revenues and treated as a Facility Expense in determining Net Operating Income. All repairs shall be made in a good, workmanlike manner, consistent with Manager’s Standards, in accordance with
all applicable Legal Requirements relating to such work. 

  
  

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 11.02. FF&E Reserve and Routine Expenditures. 

(a) FF&E Reserve. Manager, on behalf of Owner, shall establish an interest bearing reserve account (the “FF&E
Reserve”) at a bank designated by Owner to cover the cost of the following (collectively “Routine Expenditures”). All interest earned on the funds in the FF&E Reserve shall be added to and shall remain a part of the
FF&E Reserve. Such account shall be established in Owner’s name and control for the purposes set forth in this Agreement. All funds in the FF&E Reserve, all interest earned thereon and all property purchased with funds from the FF&E
Reserve shall be and shall remain the property of Owner: 
 (1) Replacements, renewals and additions to the
Facility’s FF&E as required to meet Manager’s Standards and Legal Requirements; and 
 (2) Certain
routine refurbishments to the Facility buildings as required to meet Manager’s Standards and Legal Requirements and which are normally capitalized under GAAP such as exterior and interior repainting, resurfacing building walls, floors, roofs
and parking areas, but which are not Non-Routine Capital Expenditures. 
 (b) Throughout the Term, Manager shall transfer into
the FF&E Reserve one twelfth (1/12) of the FF&E Reserve Payment each Accounting Period. 
 (c)
Manager shall submit by November 30th of each Fiscal
Year an estimate (the “FF&E Estimate”) of the expenditures necessary for (i) replacements, renewals and additions to the Facility’s FF&E described in Section 11.02(a)(1), and (ii) repairs to the Facility
of the nature described in Section 11.02(a)2, during the ensuing Fiscal Year, and shall submit such FF&E Estimate to Owner for its review. Manager will at all times give good faith consideration to Owner’s suggestions regarding any
FF&E Estimate. In the event that such FF&E Estimate projects a deficit in the FF&E Reserve, Owner and Manager will work together in good faith to prepare an alternate estimate which will reduce or eliminate such deficit, but also take
into account the needs of the Facility. All expenditures from the FF&E Reserve will be both reasonable and necessary, given the objective that the Facility will be maintained and operated in accordance with Manager’s Standards. 

(d) Manager shall from time to time make such (1) replacements, renewals and additions to the Facility’s FF&E described in
Section 11.02(a)(1), and (2) repairs to the Facility of the nature described in Section 11.02(a)(2), as it deems necessary, provided that Manager shall not expend more than the balance in the FF&E Reserve without the prior
approval of Owner. Manager will endeavor to follow the applicable FF&E Estimate, but shall be entitled to depart therefrom, in its reasonable discretion, provided that (A) such departures from the applicable FF&E Estimate result from
circumstances which could not reasonably have been foreseen at the time of the submission of such FF&E Estimate or (B) such departures from the applicable FF&E Estimate result from circumstances which require prompt repair and/or
replacement or are necessary to comply with Legal Requirements or Emergency Requirements. Following any such departures that exceed the FF&E Estimate by more than ten percent (10%) in the aggregate, Manager shall submit to Owner a revised
FF&E Estimate for the balance of the Fiscal Year for Owner’s approval, not to be unreasonably withheld. At the end of each Fiscal Year, any amounts remaining in the FF&E Reserve shall be retained in the FF&E Reserve and shall be
carried forward to the next Fiscal Year. 

  
  

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 (e) Upon a sale of the Facility, funds in the FF&E Reserve will not be affected (or, if
withdrawn, Owner will require that funds in the FF&E Reserve will be replaced by the purchaser of the Facility) and all dispositions of such funds (both before and after such sale of the Facility) will continue to be made exclusively pursuant to
the provisions of this Agreement. Proceeds from the sale of FF&E no longer necessary to the operation of the Facility shall be deposited in the FF&E Reserve, as shall any interest which accrues on amounts placed in the FF&E Reserve.
Neither (i) proceeds from the disposition of FF&E, nor (ii) interest which accrues on amounts held in the FF&E Reserve, shall either (x) result in any reduction in the required contribution to the FF&E Reserve set forth in
subsection (b) above or (y) be included in Gross Revenues. Manager shall be authorized to lease (rather than purchase) shuttle vans, postal machines, photocopiers and other office equipment. Lease payments with respect to such leases shall
be paid from Gross Revenues and will be a Facility Expense if it is an operating lease; if it is a capital lease, lease payments shall be paid from the FF&E Reserve. It is understood that Manager shall not be required to guarantee or otherwise
stand behind any lease obligations of Owner. 
 (f) FF&E Reserve Payments. The amount of the annual FF&E Reserve
payment (the “FF&E Reserve Payment”) shall be One Thousand Dollars ($1,000.00) per unit per annum during the period commencing on the Effective Date and ending on the day immediately preceding the first anniversary of the
Effective Date. On each anniversary of the Effective Date (each, an “Adjustment Date”), the FF&E Reserve Payment shall be increased by any increase in the Index during the preceding 12 month period, as determined calculating a
fraction, the numerator of which shall be (A) the Index most recently published immediately prior to the particular Operating Year in question, minus (B) the Index most recently published immediately prior to the immediately preceding
Operating Year, and the denominator of which shall be the Index most recently published immediately prior to the immediately preceding Operating Year. Mathematically, the Index increase calculation may be expressed as (current Index - last year
Index) ÷ last year Index. 
 (g) The FF&E Reserve Payment which is described in 11.02(f) is an estimate based upon
Manager’s prior experience with other comparable retirement communities. As the Facility ages, this FF&E Reserve Payment may not be sufficient to keep the FF&E Reserve at the levels necessary to make the replacements, renewals or
additions to the Facility’s FF&E described in Section 11.02(a)(1), or to make the refurbishments to the Facility of the nature described in Section 11.02(a)2, which are required to maintain the Facility in accordance with
Manager’s Standards. If any FF&E Estimate which is prepared in accordance with 11.02(c) would require funding in excess of the FF&E Reserve Payment which is set forth in 11.02(f) above, Owner may either: 

(1) Agree to increase the FF&E Reserve Payment set forth in 11.02(f) up to the level set forth in the FF&E
Estimate, in order to provide the additional funds required, such increases to be treated as Facility Expenses, 

(2) Make a lump-sum contribution to the FF&E Reserve in the necessary amount to increase the FF&E Reserve to a
level sufficient to fund the items in the FF&E Estimate; or 

  
  

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 (3) Provide Manager in writing with the specific reasons for its disapproval
and election to not increase the FF&E Reserve Payment pursuant to Section 11.02(g)(1) or make a lump-sum contribution to the FF&E Reserve pursuant to Section 11.02(g)(2) within thirty (30) days. Thereafter, in the fifteen
(15) day period following Manager’s receipt of Owner’s disapproval, the parties will attempt to resolve in good faith the objections so specified by Owner. Provided that Manager is not an Affiliate of a Person holding a direct or
indirect ownership interest in Owner, in the event that one or more of such objections have not been resolved as of the end of such fifteen (15) day period, any such matter shall be submitted to arbitration pursuant Section 18.17 (it being
acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be resolved subject to and in accordance with the JV Agreement). The foregoing notwithstanding, Manager may proceed
with the implementation of any portion of its assessment and recommendations that is not subject to dispute. 
 If Owner elects not to agree to
either option (1), (2) or (3) above, or Owner does not respond with respect to either option within thirty (30) days after submission of the FF&E Estimate (or, if Owner has elected option (2), if Owner fails to fund the required
amount within a thirty (30) days of Manager’s request therefor), such failure shall constitute an Event of Default by Owner and Manager may (in addition to any other rights and remedies available to it), treat such failure to fund as an
election by Owner of the option set forth in 11.02(g)(1) above. In addition, the placing of any restrictions on the expenditure by Manager of funds from the FF&E Reserve other than as set forth in this Article XI or in Article 7 (including,
without limitation, restrictions resulting from (a) any litigation involving Owner or the Facility or (b) a foreclosure) shall constitute and Event of Default by Owner. 

11.03. Non-Routine Capital Expenditures. 

(a) Capital Budget. Manager shall prepare an annual estimate (the “Capital Budget”) of
Non-Routine Capital Expenditures. Manager shall submit such Capital Budget to Owner for Owner’s approval no later than December 15th of each Fiscal Year. Owner shall not unreasonably withhold its consent with respect to such Non-Routine Capital
Expenditures which are: (1) required, in Manager’s reasonable judgment, to keep the Facility in a competitive, efficient and economical operating condition to meet Manager’s Standards, (2) reasonably required to achieve material
compliance with any applicable Legal Requirements or in accordance with Manager’s Standards (if Manager’s Standards are higher than the Legal Requirements), or (3) refurbishments or replacements of portions of the Facility with
respect to which it is no longer reasonably prudent to perform only routine maintenance in order to keep the Facility in good condition and repair, consistent with Manager’s Standards. In the event Owner disapproves any portion of such Capital
Budget that requires Owner’s consent, Owner will provide Manager in writing with the specific reasons for its disapproval within thirty (30) days of the date of submission of the Capital Budget to Owner. Thereafter, in the twenty-five
(25) day period following Manager’s receipt of Owner’s disapproval, the parties will attempt to resolve in good faith any objections so specified by Owner. Provided that Manager is not an Affiliate of a Person holding a direct or
indirect ownership interest in Owner, in the event one or more of such objections have not been resolved as of the end of such twenty-five (25) day period, the dispute will be resolved exclusively by arbitration pursuant to Section 18.17
and 

  
  

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either party may initiate such arbitration (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be
resolved subject to and in accordance with the JV Agreement). Pending a final resolution, Manager may proceed with the implementation of any portion of such Capital Budget that is not subject to dispute. 

(b) The cost of all Non-Routine Capital Expenditures shall be paid from the FF&E Reserve as set forth in the FF&E Estimate
(subject to the Permitted FF&E Reserve Variance). If and to the extent amounts in the FF&E Reserve are insufficient to satisfy the cost of such Non-Routine Capital Expenditures, Owner shall be solely responsible for the amount of such
shortfall. The failure of Owner to fulfill its obligations under this Section within thirty (30) days of Manager’s request therefor shall constitute an Event of Default by Owner. 

11.04. Emergency Expenditures. Notwithstanding anything to the contrary in this Article XI, Manager shall be authorized to take
appropriate remedial action (including making any necessary expenditures from the FF&E Reserve for capital items or exceeding the maintenance and repairs budget for non-capital Emergency Expenditures), without receiving Owner’s prior
approval, to remedy or respond to any Emergency Requirements (provided that Manager shall give Owner notice of any such remedial action that requires more than a de minimis expenditure of funds from the FF&E Reserve or exceeds the repairs and
maintenance budget) (hereinafter “Emergency Expenditures”). Manager shall, as soon as reasonably practical under the circumstances, notify Owner of any action that it may have taken and any costs it may have paid or incurred
utilizing the FF&E Reserve under this Section 11.04 and shall cooperate with Owner in the pursuit of any such action and shall have the right to participate therein. Owner shall reimburse Manager for any such costs incurred by Manager in
connection with any such remedial action (and shall replenish the FF&E Reserve of the Facility, to the extent funds from the FF&E Reserve were used in connection with any such remedial action) within thirty (30) days after Owner’s
receipt of written notice from Manager of the amount of such costs. 
 11.05. Owner to Provide Funds; Failure of Owner to
Fund. 
 (a) Owner shall timely provide sufficient funds required to be provided under this Article XI, as they are incurred
or become due. This obligation shall continue throughout the Term without regard to the sufficiency of Gross Revenues, or the existence of any Event of Default by Manager hereunder. With respect to expenditures under 11.02, it is anticipated that
this obligation will be met by Manager, on Owner’s behalf, paying Facility Expenses, first from Gross Revenues as made available to Manager for such purpose, then from available Working Capital, then, if such funds are insufficient, from funds
provided by Owner. Notwithstanding Section 5.03(d), it is specifically agreed that Manager has no obligation hereunder to provide either funds or its credit for the benefit of Owner for the Facility. However, the parties acknowledge that
Residents, employees, contractors, suppliers and other third parties doing business with the Facility may rely upon the credit, good name, and reputation of Manager. Therefore, timely compliance by Owner of its obligations under this Article XI is
material in every respect and time is of the essence. 
 (b) An unreasonable failure or refusal by Owner to fund the amounts
required to be funded under this Article XI within a thirty (30) day period after Manager’s request 

  
  

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therefor shall be an Event of Default by Owner and shall entitle Manager to terminate this Agreement and to exercise Manager’s remedies under Article XIV. Such termination shall be evidenced
by a written notice to Owner, which notice shall be delivered to Owner no later than ninety (90) days after the expiration of the thirty (30) day period described in the preceding sentence. The effective date of such termination shall be
the date stated by Manager in such notice, provided that such effective date shall be no less than sixty (60) days after the date of such notice. 
 11.06. Liens Arising From Repairs and Alterations. Manager and Owner shall use commercially reasonable efforts to prevent any liens from being filed against the Facility which arise from any
maintenance, repairs, alterations, improvements, renewals or replacements in or to the Facility. Each of Manager and Owner shall cooperate fully in obtaining the release of any such liens, and the costs thereof, if the lien was not occasioned by the
fault of either party, shall be treated the same as the cost of the matter to which it relates. If the lien arises as a result of the fault of either party, then the party at fault shall bear the cost of obtaining the lien release. 

ARTICLE XII 

INSURANCE; DAMAGE; CONDEMNATION; FORCE MAJEURE 
 12.01. General Requirements. 
 (a) Manager, in Manager’s name, shall
negotiate with independent insurance companies of recognized responsibility, a contract or contracts for, and keep in full force and effect, all policies of insurance of the type, extent, amount and cost of coverage which will be provided to Owner
and otherwise consistent with sound management of the Facility and market availability, insuring Owner, Manager and the Facility against the risks customarily insured against for such a facility (the “Insurance Program”). The cost
of the Insurance Program shall be included in the Approved Budget and the Annual Operating Budget as a Facility Expense. As of the date of this Agreement, the current coverages maintained under the Insurance Program are set forth in Exhibit
E attached hereto. If Owner desires to increase the insurance coverage set forth in Exhibit E attached, Owner shall notify Manager of its request and Manager will purchase additional insurance provided that Owner timely
provides Manager the required funds to purchase such additional insurance if there is insufficient funds from the Facility to pay for such additional expense. Manager shall obtain Owner’s consent prior to decreasing the insurance coverage set
forth in Exhibit E attached. 
 (b) The amount of any insurance deductibles paid by Owner (or by Manager on
Owner’s behalf out of Gross Revenues) shall be a Facility Expense. Neither Manager nor its Affiliates shall be required to pledge their credit in order to obtain any letters of credit issued to the insurance carriers in connection with any
insurance policies. 
 (c) As soon as practicable following the issuance of any policy of insurance required hereby, Manager
shall provide Owner with a certificate or certificates evidencing that policy. Any policy in the Insurance Program may be cancelled or materially changed only upon not less than ninety (90) days prior written notice by the insurer to the Named
Insured. Such changes will be discussed with the Owner. 

  
  

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 12.02. Blanket Policies. All insurance described in Section 12.01 may be
obtained by Manager by endorsement or equivalent means under its blanket insurance policies, provided that such blanket policies substantially fulfill the requirements specified herein. 

12.03. Risk Management. One of the responsibilities of the Manager shall be to provide risk management oversight at the Facility.

 12.04. Damage and Repair. The following provisions shall apply in the event the Facility is damaged by a Major
Casualty or a Minor Casualty, subject to the requirements of any Facility Mortgage as to which Owner has complied with the terms of Section 4.03(n). 
 (a) Minor Casualty. If, during the Term, the Facility is damaged by a Minor Casualty, Manager shall, with all reasonable diligence, proceed to process the claim with the applicable insurance
carriers, including settling such claim, and to make the necessary arrangements with appropriate contractors and suppliers to repair and/or replace the damaged portion of the Facility. Owner’s consent shall not be needed for Manager to perform
any of the foregoing, all of which shall be performed in accordance with Manager’s reasonable judgment; provided, however, that the parties agree that the standard for such repair and/or replacement shall be to repair and/or
replace the damaged portion of the Facility to levels of quality and quantity that are equal to those that existed with respect to such portion of the Facility prior to the occurrence of the damage at issue. Owner agrees to sign promptly any
documents which are necessary to process and/or adjust the claim with the insurance carriers, as well as any contracts with such contractors and/or suppliers. Manager shall be entitled to receive a construction management fee equal to five percent
(5%) of the total cost of all work undertaken pursuant to this Section, provided that the same is payable from insurance proceeds covering the cost of such repairs and/or replacements. 

(b) Major Casualty. If, during the Term, the Facility suffers a Major Casualty, Owner shall, at its cost and expense and with all
reasonable diligence, repair and/or replace the damaged portion of the Facility to the same condition as existed previously. Manager shall have the right to discontinue operating the Facility to the extent it deems necessary to comply with
applicable Legal Requirements or as necessary for the safe and orderly operation of the Facility in accordance with Manager’s Standards. To the extent available, proceeds from any casualty insurance shall be applied to such repairs and/or
replacements. If Owner fails to so promptly commence (no later than 30 days after receipt of the insurance proceeds) and complete the repairing and/or replacement of the Facility so that it shall be substantially the same as it was prior to such
damage or destruction, such failure shall be an Event of Default by Owner. The Owner agrees to use commercially reasonable efforts to ensure that any Facility Mortgage shall include a provision permitting the Owner to use casualty insurance proceeds
to complete the repairing and/or replacement of the Facility so that it shall be substantially the same as it was prior to the damage or destruction. If (i) the Owner is unable to obtain such entitlements and/or other approvals of a
Governmental Authority as may be necessary to undertake such repair and/or replacement after Owner’s prompt and good faith efforts to obtain such entitlements and/or approvals, or (ii) the amount of the insurance deductibles and other
uninsured out of pocket expenses of Owner in connection with the repair and/or replacement of the Facility pursuant to this subsection (b) are in the aggregate higher than Five Million Dollars ($5,000,000) (the “Cost Limit”)
with respect to a particular casualty as shown by good faith estimates 

  
  

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delivered to the Manager and Owner does not wish to pay for the amounts above the Cost Limit, then either party may terminate this Agreement upon thirty (30) days’ written notice to the
other party. Such notice must be sent within thirty (30) days after the date of the Major Casualty. 
 12.05.
Condemnation. The following provisions shall apply in the event all or a portion of the Facility is taken in any eminent domain, condemnation, compulsory acquisition, or similar proceeding by any competent authority for any public or
quasi-public use or purpose, subject to the requirements of any Facility Mortgage as to which Owner has complied with the terms of Section 4.03(n). 
 (a) In the event all or substantially all of the Facility shall be taken in any eminent domain, condemnation, compulsory acquisition, or similar proceeding by any competent authority for any public or
quasi-public use or purpose, or in the event a portion of the Facility shall be so taken, but the result is that it is unreasonable to continue to operate the Facility in accordance with the standards required by this Agreement, this Agreement shall
terminate effective as of the date of such taking or similar proceeding. Owner and Manager shall each have the right to initiate such proceedings as they deem advisable to recover any damages to which they may be entitled. 

(b) In the event a portion of the Facility shall be taken by the events described in Section 12.05(a), or the entire Facility is
affected but on a temporary basis, and the result is not to make it unreasonable to continue to operate the Facility, this Agreement shall not terminate. However, so much of any award for any such partial taking or condemnation as shall be necessary
to render the Facility equivalent to its condition prior to such event shall be used by Owner for such purpose; and Manager shall have the right to discontinue operating the Facility or portion of the Facility to the extent it deems necessary for
the safe and orderly operation of the Facility. 
 (c) Provided that Manager is not an Affiliate of a Person holding a direct or
indirect ownership interest in Owner, in the event of any proceedings described in Section 12.05(a) or 12.05(b), and if Owner and Manager cannot agree on a fair and equitable apportionment of any such award, the dispute shall be submitted by
either party to arbitration pursuant to Section 18.17 (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will be resolved subject to and in accordance with
the JV Agreement). 
 12.06. Licensure Issues. 
 (a) The expiration, withdrawal or revocation of any license which is material to the operation of the Facility in accordance with Manager’s Standards, where such expiration, withdrawal or revocation:
(1) is not due to either an Event of Default by Manager or an Event of Default by Owner; and (2) is not otherwise within the reasonable control of either Manager or Owner, shall not be either an Event of Default by Manager or an Event of
Default by Owner under Article XIV of this Agreement. Manager and Owner shall each, in good faith, use all commercially reasonable efforts (including the diligent pursuit of all available appeals), during the period of one hundred twenty
(120) days after the date of such withdrawal or revocation, to have such License reinstated. If, notwithstanding such efforts, such license is not reinstated prior 

  
  

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to the expiration of the aforesaid period of one hundred twenty (120) days, either Owner or Manager shall have the right, at its option, to terminate this Agreement upon no less than thirty
(30) days’ notice to the other party; provided, however, that the terminating party must deliver such notice of termination to the other party by no later than ninety (90) days after the expiration of such one hundred
twenty (120) day period; and provided further, that no such termination shall be effective if, prior to the effective date of such termination, such License is reinstated or such expiration, withdrawal or revocation of such License is stayed.

 (b) If an order, judgment or directive by a court or administrative body is issued in connection with any litigation
involving Owner, which restricts or prevents Manager, in a material adverse manner, from operating the Facility in accordance with Manager’s Standards, Manager shall be entitled, at its option, to terminate this Agreement upon sixty
(60) days’ notice. If Owner and Manager disagree whether the order, judgment or directive of the court or administrative body prevents Manager, in a material adverse manner, from operating the Facility in accordance with Manager’s
Standards, the parties will submit the matter to arbitration for determination in accordance with the provisions of Section 18.17 of this Agreement. 
 ARTICLE XIII 
 TERMINATION OF AGREEMENT 

13.01. General Termination; Termination by Parties. 
 (a) This Agreement shall automatically terminate at the end of the Term. Manager shall be compensated for its services through the date of termination, but shall not be entitled to any Termination Fee
upon the natural expiration of the Term. 
 (b) Manager may terminate this Agreement, subject to the provisions of
Section 14.05 and in addition to any other rights expressly set forth in this Agreement, if there is an Event of Default by Owner and may be entitled to a Termination Fee. 

(c) Owner may terminate this Agreement, subject to the provisions of Section 14.04, and in addition to any other rights expressly
set forth in this Agreement, if there is an Event of Default by Manager, in which event a Termination Fee shall not be owed to Manager provided that such Event of Default was not caused by a prior Event of Default by Owner. In the event Manager
asserts that the Event of Default was caused by a prior Event of Default by Owner, the parties will attempt to resolve in good faith the objections so specified by Manager for a period of thirty (30) days. In the event the parties have not
resolved Manager’s objections as of the end of such thirty (30) day period, any such dispute shall be submitted to arbitration pursuant Section 18.17 of this Agreement. 

13.02. Transition upon Termination. The following provisions shall apply in the event of any termination or expiration of this
Agreement: 
 (a) Upon termination of this Agreement for any reason, for a period of ninety (90) days thereafter Manager
agrees to reasonably cooperate in transferring operational control of the Facility to Owner or a successor manager. Such cooperation shall include but not be limited to: 

(1) the transfer of computer data in non-proprietary machine readable format and the transfer of any documents housed in
Manager’s corporate headquarters relating to the Facility (or copies of such documents if Manager is required by law to maintain the originals); 

  
  

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 (2) the removal or covering of all signage on the Facility bearing the
Sunrise name or trademark within thirty (30) days of such termination, it being agreed that Manager shall use reasonable care during any such removal and shall, at Manager’s sole cost and expense, repair any damage to the Facility caused
by such removal; 
 (3) within One Hundred Twenty (120) days after the last day of the month in which the
effective date of termination occurs, the preparation of a final accounting of Facility operations in accordance with the requirements of the annual financial statements specified on Exhibit C-1, and the disbursement to Owner of funds
held by Manager on behalf of Owner, including, without limitation, the FF&E Reserve; and 
 (4) the peaceful
vacation and surrender of the Facility to Owner upon the effective date of termination, it being agreed that Manager shall leave the premises in a clean and orderly condition. 
 (b) Manager shall (to the extent permitted by law) assign to Owner or to the new manager all operating licenses and permits for the Facility which have been issued in Manager’s name; provided that if
Manager has expended any of its own funds in the acquisition of any of such licenses or permits, Owner shall reimburse Manager therefor if it has not done so already. Additionally, so as to avoid any disruption or delay of any services or amenities
at the Facility, if licenses or permits held in Manager’s name cannot be transferred or cannot be transferred immediately to Owner or the successor manager, Manager will continue to provide management services to Owner under an interim
management arrangement with Owner or the successor manager, in form and substance reasonably acceptable to Manager, but in any event no less favorable to Manager than this Agreement, until the completion of the assignment of licenses and permits, or
the issuance of a replacement licenses or permits, or until the parties otherwise agree. 
 (c) After Manager shall have
received all amounts due to Manager under this Agreement, Manager shall turn over, assign and transfer to Owner: 

(1) All Facility assets, including all cash in Manager’s custody and control, whether segregated or commingled with
the monies of Manager and/or other parties, which has been generated in connection with or arising from operations of the Facility; 
 (2) All coupons, instruments for the payment of money, certificates of deposit, accounts receivable or other contract rights or intangible personal property arising in connection with the operation of the
Facility; 

  
  

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 (3) All equipment, supplies, keys, locks, safe combinations, computer
passwords, telephone and fax numbers associated with the Facility, alarm access codes, and key cards; and 
 (4)
All of Owner’s non-proprietary books and records respecting the Facility, and all contracts, leases, and other documents respecting the Facility and which are in custody or control of Manager (and Owner or the successor manager shall assume all
contracts made in accordance with this Agreement). 
 13.03. Repayment of Operating Deficit Loan upon Termination. Upon
termination of this Agreement for any reason, any and all amounts due to Manager under the OD Loan shall become immediately due and payable, whether such amounts are otherwise due and payable at such time and Manager shall have the right to offset
any amounts outstanding under the OD Loan (including accrued but unpaid interest) against any amounts held by Manager on behalf of Owner as FF&E Reserve, Working Capital or Non-Routine Capital Expenditures. 

ARTICLE XIV 
 DEFAULTS 
 14.01. Default by Manager. Manager shall be deemed
to be in default (each, an “Event of Default by Manager”) under this Agreement (a) in the event Manager shall fail to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept,
observed or performed by Manager, and such default shall continue (1) for a period of ten (10) Business Days after Manager receives written notice from Owner specifying the default in the case of monetary defaults or (2) for a period
of thirty (30) days after Manager receives written notice from Owner in the case of non-monetary defaults; provided, however, that if such non-monetary default cannot be cured within such thirty (30) day period, then Manager shall be
entitled to such additional time as is reasonable under the circumstances to cure such default, provided Manager is capable of curing same, has proceeded to commence cure of such default within said period, and thereafter diligently prosecutes the
cure to completion, or (b) any of the events in Section 14.03 occurs with respect to Manager. 
 14.02. Default by
Owner. Owner shall be deemed to be in default (each, an “Event of Default by Owner”) under this Agreement (a) in the event Owner shall fail to keep, observe or perform any material covenant, agreement, term or provision of
this Agreement to be kept, observed or performed by Owner, to the extent such default continues (1) for a period of ten (10) Business Days after written notice thereof by Manager to Owner in the case of monetary defaults or (2) for a
period of thirty (30) days after written notice thereof by Manager to Owner in the case of non-monetary time defaults; provided, however, if such default cannot be cured within such thirty (30) day period, then Owner shall be entitled to
such additional time as is reasonable under the circumstances to cure such default, provided that Owner is capable of curing same, has proceeded to commence cure of such default within said period, and thereafter diligently prosecutes the cure to
completion, (b) any of the events in Section 14.03 occurs with respect to Owner or (c) if Owner elects to close the Facility or substantial portion of the Facility for any reason other than a casualty or condemnation event if
expressly permitted under this Agreement. 

  
  

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 14.03. Insolvency Default. The occurrence of any of the following shall constitute a
default hereunder: 
 (a) Either party files a voluntary petition in bankruptcy or insolvency or a petition for reorganization
under any bankruptcy law, or the admission of either party that it is unable to pay its debts as they become due; or 
 (b)
Either party consents to an involuntary petition in bankruptcy or fails to vacate, within ninety (90) days from the date of entry thereof, any order approving an involuntary petition by either party; or 

(c) Any court of competent jurisdiction enters an order, judgment or decree adjudicating either party as bankrupt or insolvent or
approving a petition seeking reorganization or appointing a receiver, trustee or liquidator of a substantial part of such party’s assets, and such order, judgment or decree’s continuing unstayed and in effect for an aggregate of sixty
(60) days (whether or not consecutive). 
 14.04. Remedies of Owner. Upon the occurrence of an Event of Default by
Manager as specified in Section 14.01 of this Agreement (as such Event of Default by Manager may occur upon the expiration of any applicable cure period provided by this Agreement), Owner shall be entitled to exercise its rights at law or in
equity, including the right to terminate this Agreement without payment of a Termination Fee or to compel specific performance of Manager’s obligations hereunder. 
 14.05. Remedies of Manager. Upon the occurrence of an Event of Default by Owner as specified in Section 14.02 of this Agreement (as such Event of Default by Owner may occur upon the expiration
of any applicable cure period provided by this Agreement), Manager shall be entitled either: (a) to specific performance of Owner’s obligations under this Agreement or (b) to terminate this Agreement and to recover the Termination
Fee. 
 14.06. No Waiver of Default. The failure of Owner or Manager to seek remedy for any violation of, or to insist
upon the strict performance of, any term or condition of this Agreement shall not prevent a subsequent act by Owner or Manager which would have originally constituted a violation of this Agreement by Owner or Manager, from having all the force and
effect of an original violation. Owner or Manager may waive any breach or threatened breach by Owner or Manager of any term or condition herein contained. The failure by Owner or Manager to insist upon the strict performance of any one of the terms
or conditions of this Agreement or to exercise any right, remedy or election herein contained or permitted by law shall not constitute or be construed as a waiver or relinquishment for the future of such term, condition, right, remedy or election,
but the same shall continue and remain in full force and effect. All rights and remedies that Owner or Manager may have at law, in equity or otherwise for any breach of any term or condition of this Agreement, shall be distinct, separate and
cumulative rights and remedies and no one of them, whether or not exercised by Owner or Manager, shall be deemed to be in exclusion of any other right or remedy of Owner or Manager. 

14.07. Termination Fee. If Owner fails to pay the Termination Fee in full within thirty (30) days after the Termination Date,
then Manager shall have the right (without affecting 

  
  

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Manager’s other remedies under this Agreement) to withhold the amount of such fee from the FF&E Reserve, the Working Capital funds or any other funds of Owner held by or under the
control of Manager. The “Termination Date” shall mean the date of termination of this Agreement specified in any notice of termination given by Manager pursuant to the exercise by Manager of any termination right hereunder.

 14.08. Failure to Pay. Upon the failure of either party to make any payment required to be made in accordance with the
terms of this Agreement as of the due date which is specified in this Agreement, and the continuance of such failure for five (5) Business Days after written notice thereof, the amount owed to the non-defaulting party shall accrue interest at a
rate equal to (a) if CHT or an Affiliate or successor thereof (“CHT Partner”) holds a direct or indirect ownership interest in Owner, five percent (5%) plus the rate of return then payable to CHT Partner under
Section 8.1 of the Amended and Restated Limited Liability Company Agreement of Parent (the “JV Agreement”) (or the highest interest permitted under applicable law if that is lower) or (b) if CHT Partner does not hold a
direct or indirect ownership interest in Owner, eighteen percent (18%) (or the highest interest permitted under applicable law if that is lower, in each case from and after the date on which such payment was originally due to the non-defaulting
party until such payment is made. 
 14.09. Manager’s Right to Specific Performance for Owner’s Wrongful
Termination. Owner hereby acknowledges that (a) Manager has an interest in this Agreement beyond the fees Manager will earn pursuant to the provisions of this Agreement, (b) the termination of this Agreement by Owner when Owner is not
entitled to terminate this Agreement pursuant to the provisions of this Agreement will be injurious to Manager’s business conducted beyond Owner’s Facility, and will damage Manager’s Proprietary Marks, (c) Manager’s
Proprietary Marks are unique, Manager’s exclusive rights of possession under this Agreement are unique, the Facility is unique and Manager is entitled to an exclusive license to operate Manager’s business at the Facility and to promote
Manager’s Proprietary Marks at the Facility, which license is irrevocable except pursuant to the express provisions of this Agreement, (d) it would be impossible to calculate the damages that Manager would sustain if Owner terminated this
Agreement when Owner is not entitled to terminate this Agreement pursuant to the provisions of this Agreement, and (e) the remedy of specific performance of Owner’s obligations under this Agreement is fair, equitable and practicable.
Accordingly, Owner agrees that for as long as Manager is an Affiliate of Sunrise Senior Living, Inc. (X) Owner shall not breach this Agreement by terminating, or purporting to terminate, this Agreement when Owner has no right to terminate this
Agreement pursuant to the provisions of this Agreement, and (Y) Owner consents to the issuance by any court of competent jurisdiction of injunctive relief prohibiting Owner from terminating, or purporting to terminate, this Agreement or from
evicting Manager from the Facility, and Owner consents to the award by a court of competent jurisdiction of specific performance of the obligations of Owner under this Agreement, without the requirement for posting of any bond. Notwithstanding the
foregoing, if Manager receives the Termination Fee (as set forth in Section 14.07 above), Manager waives any and all other rights to seek damages with respect to the termination of this Agreement, including, but not limited to, the right to sue
for specific performance. 

  
  

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 ARTICLE XV 
 LEGAL ACTIONS, INDEMNITIES, AND LIMITATION OF LIABILITY 
 15.01. Legal
Actions. Manager shall have the right to institute or defend, in the name of Owner, any legal action affecting the Facility and take any actions, in the name of Owner, necessary to protest or litigate to a final decision in any appropriate court
or forum, any violation, order, rule, or regulation affecting the Facility. Owner shall assist and cooperate with Manager in the defense or prosecution of any such action. All actions arising out of the operation of the Facility and not attributable
to the gross negligence or willful misconduct of Manager, and any and all legal actions or proceedings to collect charges, third party payments, rents, or other incomes for Manager, Owner or the Facility (“Collection Proceedings”),
or to lawfully evict or dispossess Residents or other Persons in possession thereunder, or to lawfully cancel, modify, or terminate any lease, license, or concession agreement in the event of breach or default thereof, or to defend any action
brought against Owner, the Facility or Manager in connection with the Facility, shall be paid out of Gross Revenues and be treated as Facility Expenses. Manager shall provide written notice to Owner of all actions arising out of the operation of the
Facility except for Collection Proceedings. 
 15.02. Indemnities. 

(a) By Manager. Manager will defend, indemnify and hold Owner and any of its Affiliates, and their respective directors, officers,
shareholders, members, employees and agents harmless from and against any and all claims, losses, expenses (including reasonable attorney fees), costs, suits, actions, proceedings, demands or liabilities that are asserted against, or sustained or
incurred by them as a result of, or in connection with, Manager’s gross negligence, fraud, or willful misconduct in the performance of Manager’s duties under this Agreement. 

(b) By Owner. Owner will defend, indemnify, and hold Manager, and any of its Affiliates, and their respective directors, officers,
shareholders, employees and agents harmless, from and against any and all claims, expenses (including reasonable attorney fees), losses, costs, suits, actions, proceedings, demands, or liabilities that are asserted against, or sustained or incurred
by them as a result of, or in connection with, the performance of Manager’s duties under this Agreement or otherwise while acting within the scope of this Agreement except to the extent that such claims, losses, expenses (including reasonable
attorney fees), costs, suits, actions, proceedings, demands or liabilities are a result of Manager’s gross negligence, fraud, or willful misconduct in the performance of Manager’s duties under this Agreement. 

(c) Recovery upon an indemnity contained in this Agreement shall be reduced dollar-for-dollar by any applicable insurance collected by
the indemnified party with respect to the claims covered by such indemnity. 
 (d) The indemnities contained in this
Section 15.02 shall survive for a period of one (1) year after the termination of this Agreement. 

  
  

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 15.03. Limitation of Liability. 

(a) Limitation of Liability. Notwithstanding any other provisions of this Agreement to the contrary, the maximum liability of
Manager to Owner (but not to any third party or any third party claim passed through Owner to Manager) for any breach of this Agreement or for any claims arising hereunder shall be limited to the amount of insurance carried by Manager pursuant to
Article XII hereinabove and the amount of the Base Management Fees paid as of the date of such breach or claim. 
 (b)
Standard of Care. Manager agrees to use its commercially reasonable efforts to exercise, with respect to all services provided by Manager under or pursuant to this Agreement, a high and qualified standard of care, skill, and diligence in
accordance with Manager’s Standards. 
 (c) Non-Recourse. To the maximum extent permitted by applicable law, no
member, partner, shareholder, officer, director, employee or agent of any party to this Agreement shall have any personal liability with respect to the liabilities or obligations of such party under this Agreement or any document executed by such
party pursuant to this Agreement. 
 ARTICLE XVI 
 REGULATORY AND CONTRACTUAL REQUIREMENTS 
 16.01. Regulatory and
Contractual Requirements. 
 (a) Manager shall use commercially reasonable efforts to cause all things to be done in and
about the Facility reasonably necessary to comply with the requirements of any applicable Legal Requirement, or order of any Governmental Authority or quasi-governmental regulatory body or agency, or board of fire underwriters respecting the use of
the Facility or the construction, maintenance, or operation thereof. Manager shall use commercially reasonable efforts to obtain and maintain all Federal, State and county permits and licenses needed for its management of a licensed assisted living
and/or independent living (as applicable) facility providing personal care services in the State. Owner agrees upon request by Manager to sign promptly and without charge applications for licenses, permits or other instruments necessary for
operation of the Facility in accordance with Legal Requirements and to provide such information and perform such acts relative to the ownership of the Facility as are required by law, regulation or practice of a Governmental Authority in order for
Manager to obtain and/or maintain any license, permit, instrument, certificate, certification or approval with respect to the operation of the Facility in accordance with the terms of this Agreement. Manager shall keep its corporate organization in
good standing in the State and shall maintain all corporate permits and licenses required by the State. 
 (b) The parties
understand and agree that certain deficiencies or situations of non-compliance with various Legal Requirements (such as building codes, OSHA, ADA, health care regulations and the like) are likely to occur from time to time in the normal course of
business operations. Such occurrences will not constitute a breach or Event of Default by Manager hereunder, provided that, (a) they are not materially beyond the general experience of similar facility operations located in the State in terms
of scope, seriousness, or frequency, and (b) Manager takes all reasonable actions in a timely manner to cure such deficiencies or situations of non-compliance. The costs (including fines for non-compliance) of curing such

  
  

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deficiencies or circumstances of non-compliance (collectively, “Non-Compliance Costs”) shall constitute Facility Expenses unless incurred by reason of Manager’s willful
misconduct or gross negligence. Any Non-Compliance Costs resulting from Manager’s willful misconduct or gross negligence shall be paid by Manager from its own funds and not as a Facility Expense. So long as Manager is not an Affiliate of a
Person holding a direct or indirect an ownership interest in Owner, then in the event that Manager and Owner disagree as to whether a Non-Compliance Cost is appropriate for reimbursement as a Facility Expense, the disagreement will be resolved
exclusively by arbitration pursuant to Section 18.17 and either party may initiate such arbitration (it being acknowledged that if Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, such dispute will
be resolved subject to and in accordance with the JV Agreement). 
 16.02. Equal Employment Opportunity. Without
limitation of any provision set forth herein, Owner and Manager expressly agree to abide by any and all applicable Federal and/or State equal employment opportunity statutes, rules and regulations, including, without limitation, Title II of the
Civil Rights Act of 1964, the Equal Pay Act of 1963, the National Labor Relations Act, the Fair Labor Standard Act, the Rehabilitation Act of 1983, and the Occupational Safety and Health Act of 1970, all as may be from time to time modified or
amended. 
 16.03. Equal Housing Opportunity. Without limitation of any provision set forth herein, Owner and Manager
expressly agree to abide by any and all applicable Federal and/or State equal housing opportunity statutes, rules and regulations, all as may be from time to time modified or amended. 

ARTICLE XVII 
 PROPRIETARY MARKS; INTELLECTUAL PROPERTY 
 17.01. Proprietary Marks.
During the Term of this Agreement, the Facility may be known as a “Sunrise” Facility, with such additional identification as may be necessary and agreed to by Owner and Manager to provide local identification. If the name of Manager’s
System is changed, Manager shall have the right (with Owner’s written consent, which shall not be unreasonably withheld) to change the name of the Facility to conform thereto. 

17.02. Ownership of Proprietary Marks. The Proprietary Marks shall in all events remain the exclusive property of Manager, and
nothing contained herein shall confer on Owner the right to use the Proprietary Marks. Upon termination of this Agreement, any use of or right to use the Proprietary Marks by Owner shall cease forthwith and Owner shall promptly remove, at
Manager’s expense, from the Facility any signs or similar items that contain the Proprietary Marks. If Owner has not removed such signs or similar items promptly upon termination, Manager shall have the right to remain at the Facility as long
as is necessary for Owner to do so. The right to use such Proprietary Marks belongs exclusively to Manager, and the use thereof inures to the benefit of Manager whether or not the same are registered and regardless of the source of the same.

 17.03. Intellectual Property. All Intellectual Property shall at all times be proprietary to Manager or its
Affiliates, and shall be the exclusive property of Manager or its Affiliates. During the Term of this Agreement, Manager shall be entitled to take all reasonable steps to ensure that the Intellectual Property remains confidential. Upon termination,
all Intellectual Property shall be removed from the Facility by Manager, without compensation to Owner. 

  
  

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 17.04. Trademark License. Manager hereby grants to Owner a non-exclusive right and
license (“Trademark License”) to use “Sunrise” solely as part of the name of the Facility. Owner shall not be permitted to use “Sunrise” in connection with the identification or operation of any other business or
property, or at any other location, except as may otherwise be provided in other agreements between Owner and Manager (or one of its Affiliates). Owner acknowledges and agrees that Manager (or one of its Affiliates) is the owner of all right, title,
and interest in and to “Sunrise” and the goodwill associated with and symbolized by that mark. Owner’s use of “Sunrise” and its derivatives pursuant to this Trademark License shall not give Owner any ownership, apart from
this Trademark License, to “Sunrise,” and that all goodwill arising from Owner’s use of “Sunrise” shall inure solely to Manager’s benefit. This Trademark License shall immediately terminate upon termination or
expiration of this Agreement. 
 17.05. Breach of Covenant. Manager and/or its Affiliates shall be entitled, in case of
any breach of the covenants of this Article XVII by Owner or others claiming through it, to injunctive relief and to any other right or remedy available at law. Article XVII shall survive termination. 

ARTICLE XVIII 
 MISCELLANEOUS PROVISIONS 
 18.01. Additional Assurances. The
provisions of this Agreement shall be self-operative and shall not require further agreement by the parties except as may be herein specifically provided to the contrary; provided, however, at the request of either party, the party requested shall
execute such additional instruments and take such additional acts as the requesting party may deem necessary to effectuate this Agreement. 
 18.02. Right to Inspect. Owner or its agents shall have access to the Facility at any and all reasonable times for the purpose of inspection or showing the Facility to prospective purchasers,
investors, tenants, or mortgagees. 
 18.03. Estoppel Certificates. Each party to this Agreement shall at any time and
from time to time, upon not less than thirty (30) day’s prior notice from the other party, execute, acknowledge and deliver to such other party, or to any third party specified by such other party, a statement in writing:
(a) certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications); (b) stating whether or not to the
best knowledge of the certifying party: (x) there is a continuing default by the non-certifying party in the performance or observation of any covenant, agreement or condition contained in this Agreement; or (y) there shall have occurred
any event which, with the giving of Notice or the passage of time or both, would become such a default, and, if so, specifying such default or occurrence of which the certifying party may have knowledge; and (c) stating such other information
as the non-certifying party may reasonably request. Such statement shall be binding upon the certifying party and may be relied upon by the non-certifying party and/or such third party specified by the non-certifying party as aforesaid. The
obligations set forth in this Section 18.03 shall survive 

  
  

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termination (that is, each party shall, on request, within the time period described above, execute and deliver to the non-certifying party and to any such third party a statement certifying that
this Agreement has been terminated). 
 18.04. Consents, Approval and Discretion. Except as expressly provided herein to
the contrary, whenever this Agreement requires any consent or approval to be given by either party or either party must or may exercise discretion, the parties agree that such consent or approval shall not be unreasonably withheld or delayed and
such discretion shall be reasonably exercised in good faith. 
 18.05. No Brokerage. Each party represents to the other
that it has not engaged a broker in connection with this transaction, and agrees to defend, indemnify, and hold the other party harmless from any claim made by a broker through the indemnifying party. 

18.06. Notices. Any and all notices, including any demands, consents, approvals, offers, elections and other communications
required or permitted under this Agreement shall be deemed adequately given if in writing, addressed to the recipient of the notice at the addresses set forth below (or to such other addresses as the parties may specify by due notice to the others
parties) and if delivered either (a) in hand, in which case it will be deemed delivered on the date of delivery or on the date delivery was refused by the addressee, (b) by United States mail, postage prepaid, registered or certified, with
return receipt requested, in which case it will be deemed delivered on the date of delivery as established by the return receipt (or the date on which the return receipt confirms that acceptance of delivery was refused by the addressee), (c) by
Federal Express or similar expedited commercial carrier, with all freight charges prepaid, in which case it will be deemed delivered on the date of delivery as established by the courier service confirmation (or the date on which the courier service
confirms that acceptance of delivery was refused by the addressee), or (d) by facsimile transmission with a hard copy to follow by any of the other methods above, in which case it will be deemed delivered on the day and at the time indicated in
the sender’s automatic acknowledgment. If a notice is sent to a party, then copies of such notice under this Section shall also be sent by the same delivery method to the copy recipients. Whenever under this Agreement a notice is required to be
delivered on a day which is not a Business Day or is required to be delivered on or before a specific day which is not a Business Day, the day of required delivery shall automatically be extended to the next Business Day. All such notices shall be
addressed as follows: 
  

			
	 Owner or Parent:
	 	 c/o CNL Healthcare Trust, Inc.

CNL Center at City Commons
 450 South Orange
Ave
 Orlando, Florida 32801
 Attention:
Joseph T. Johnson, SVP and CFO and
         Holly Greer, SVP and General
Counsel
 Facsimile: (407) 540- 2544

		
	Copy to:	 	 Sunrise Senior Living, Inc.

7900 Westpark Drive, Suite T-900
 McLean,
Virginia 22102
 Attention: General Counsel
 Facsimile: (703) 854-0334

  
  

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	Copy to:	 	 Willkie Farr & Gallagher

787 Seventh Avenue
 New York, New York
10019
 Attention: Eugene A. Pinover

Facsimile: (212) 728-9254

		
	and a copy to:	 	 Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
 215 N. Eola Drive
 P O Box 2809
 Orlando, Florida 32801
 Attention: Peter L. Lopez, Esq.

Facsimile: 407 843-4444

		
	Manager:	 	 Sunrise Senior Living Management, Inc.
 7900 Westpark Drive, Suite T-900
 McLean, Virginia 22102

Attn: Chief Operating Officer
 Facsimile: (703)
744-1628

		
	Copy to:	 	 c/o Sunrise Senior Living, Inc.

7900 Westpark Drive, Suite T-900
 McLean,
Virginia 22102
 Attention: General Counsel
 Facsimile: (703) 854-0334

		
	Copy to:	 	 c/o CNL Healthcare Trust, Inc.

CNL Center at City Commons
 450 South Orange
Ave
 Orlando, Florida 32801
 Attention:
Joseph T. Johnson, SVP and CFO and
         Holly Greer, SVP and General
Counsel
 Facsimile: (407) 540- 2544

		
	Copy to:	 	 Willkie Farr & Gallagher

787 Seventh Avenue
 New York, New York
10019
 Attention: Eugene A. Pinover

Facsimile: (212) 728-9254

 By notice given as provided in this Section, the parties to this Agreement and their respective
successors and assigns shall have the right from time to time to change their respective addresses effective five (5) Business Days after the date of receipt by the other parties of such notice and each party shall have the right to specify as
its address any other address within the United States of America. 

  
  

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 18.07. Severability. If any term or provision of this Agreement or the application
thereof to any Person or circumstance is held to be invalid or unenforceable for any reason, the remainder of this Agreement, or the application of such term or provision to Persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 
 18.08. Gender and Number. Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine, feminine, and neuter, and the number of all words herein shall
include the singular and plural. 
 18.09. Division and Headings. The divisions of this Agreement into sections and
subsections and the use of captions and headings in connection therewith are solely for convenience and shall have no legal effect whatsoever in construing the provisions of this Agreement. 

18.10. Confidentiality of Information. Manager and Owner agree to keep confidential and not to use or to disclose to others,
except as expressly consented to in writing by the other party, any and all of their respective secrets or confidential technology, proprietary information, customer lists, or trade secrets, or any confidential matter or confidential items
ascertained through their association with each other; provided, however, that either party may disclose the existence and/or terms and conditions of this Agreement without the consent of the other party (i) to any Mortgagee, (ii) to
either party’s directors, officers, members, partners, employees, legal counsel, accountants, engineers, architects, financial advisors and similar professionals and consultants to the extent such party deems it necessary or appropriate (and
such party shall inform each of the foregoing parties of the obligations of each party under this Section 18.10 and shall secure the agreement of such parties to be bound by the terms hereof), (iii) if so required by law or applicable
regulation other than laws or regulations regarding securities, so long as such party first provides a copy of any written request for disclosure to the other party and consults with such other party with respect to the content of the disclosure and
(iv) if so required by applicable securities laws or regulations so long as such party provides copies of such disclosures to the other party. Manager and Owner further agree that should Manager leave the active service of Owner, Manager will
turn over to Owner any and all Facility information of any kind, subject to compliance with HIPAA and similar privacy regulations, and in any case excluding Manager’s Intellectual Property, reasonably necessary for Owner or a new manager to
continue to operate the Facility, including but not limited to information of any kind pertaining to Residents of the Facility, business, sales, financial condition or products and Owner will return to Manager any and all of Manager’s
confidential information obtained by Owner. All funds related to and accounts opened on behalf of the Facility also will be returned to Owner. Notwithstanding any terms or conditions in this Agreement to the contrary, but subject to restrictions
reasonably necessary to comply with federal or state securities laws, any person may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided relating to such tax treatment and tax structure. For the avoidance of doubt, this authorization is not intended to permit disclosure of the names of, or other identifying information regarding, the
participants in the transaction, or of any information or the portion of any materials not relevant to the tax treatment or tax structure of the transaction. 

  
  

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 18.11. Right to Perform. In the event that Owner or Manager shall fail to perform any
duty or fulfill any obligation hereunder to the material detriment of the other, Owner or Manager, in addition to any rights or remedies available to it under law, shall have the right, but not the obligation, after notice and the expiration of all
applicable cure periods, to perform any such duty or fulfill any such obligation, but in no way obligating the party beyond any termination period allowable hereunder. 
 18.12. Assignment by Manager or Owner; Controlling Interest Sale; Facility Sale. 
 (a) Assignment. Manager shall have the right to assign this Agreement to an Affiliate of Manager after fifteen (15) days written notice to Owner. Manager shall not have the right to assign
this Agreement to any non-Affiliate without Owner’s prior written permission, which permission may be granted or withheld in Owner’s sole and absolute discretion. Owner shall not have the right to assign this Agreement without
Manager’s prior written permission, which permission may be granted or withheld in Manager’s sole and absolute discretion; provided, however, that if this Agreement is assigned to the purchaser of the Facility in connection with the sale
of the Facility in accordance with this Section 18.12, then the assignee (as Owner) of this Agreement shall also execute a counterpart of this Agreement and become party to this Agreement; further provided, however, that the Owner selling the
Facility shall not be released of its obligations under this Agreement arising prior to the date of execution of this Agreement by its assignee. This Agreement will be binding upon, and will inure to the benefit of, any permitted successor, assign,
grantee or transferee of the assignor. 
 (b) Controlling Interest Sale or Facility Sale to a Qualified Transferee.

 (1) If Parent or an Affiliate of Parent intends to enter into a Controlling Interest Sale with a Person
(including an Affiliate of Owner or Parent) that is a Qualified Transferee, then prior to entering into the Controlling Interest Sale Parent or such Affiliate shall deliver to Manager a notice of its intent to sell the Controlling Interest (the
“Sale Notice”) together with evidence that the proposed transferee is a Qualified Transferee and the provisions of Section 18.12(d) shall apply. 

(2) If Owner intends to enter into a Facility Sale with a Person (including an Affiliate of Owner or Parent) that is a
Qualified Transferee, then prior to entering into the Facility Sale, Owner shall deliver to Manager a Sale Notice of its intent to sell the Facility together with evidence that the proposed transferee is a Qualified Transferee and the provisions of
Section 18.12(d) shall apply. 
 (3) If Manager does not exercise its right of first offer pursuant to
Section 18.12(d) to the extent available, then Parent, its Affiliate or Owner, as applicable, shall require, as a condition to the closing of the Controlling Interest Sale or Facility Sale, as applicable, to a Qualified Transferee that:
(1) the Qualified Transferee and Manager either: (i) enter into an assignment of this Agreement, or (ii) enter into a Replacement Management Agreement (under the same terms and conditions as the then current Management Agreement
except that the term of any such Replacement Management Agreement shall consist only of the balance of the term remaining under the then current Management Agreement), (2) the Qualified Transferee replace the FF&E Reserve and the

  
  

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Working Capital required under the then current Management Agreement, and (3) the Qualified Transferee provide for a replacement guarantor under the Guaranty reasonably acceptable to
Manager. Manager shall be obligated to enter with the Qualified Transferee at the closing of the Controlling Interest Sale or Facility Sale either into (x) an assignment of the then current Management Agreement, or (y) enter into a
Replacement Management Agreement as set forth in Section 18.12(b)(2)(ii) above. 
 (c) Controlling Interest Sale or
Facility Sale to a Non-Qualified Transferee. 
 (1) If Parent or an Affiliate of Parent intends to enter into
a Controlling Interest Sale with a Person (including an Affiliate of Owner or Parent) that is not a Qualified Transferee, then prior to entering into the Controlling Interest Sale Parent or such Affiliate shall deliver to Manager a Sale Notice of
its intent to sell the Controlling Interest and the provisions of Section 18.12(d) shall apply. 
 (2) If
Owner intends to enter into a Facility Sale with a Person (including an Affiliate of Owner or Parent) that is not a Qualified Transferee, then prior to entering into the Facility Sale, Owner shall deliver to Manager a Sale Notice of its intent to
sell the Facility and the provisions of Section 18.12(d) shall apply. 
 (3) If Parent or its Affiliate
intends to enter into a Controlling Interest Sale with a Person (including an Affiliate of Owner or Parent) that is not a Qualified Transferee or if the Owner intends to enter into a Facility Sale to a Person (including an Affiliate of Owner or
Parent) that is not a Qualified Transferee, and Manager does not exercise its right of first offer pursuant to Section 18.12(d) to the extent available, then Manager shall have the right to elect, at its sole discretion, to continue the
operation of the Facility under the then current Management Agreement or to terminate the then current Management Agreement and receive the Termination Fee at the closing of such Controlling Interest Sale or Facility Sale. Manager shall notify Owner
or Parent or its Affiliate, as applicable, within thirty (30) days after receipt of the Sale Notice with respect to a Controlling Interest Sale or Facility Sale, as applicable, of its desire to continue to operate the Facility under the then
current Management Agreement (the “Continuation Notice”). If Manager does not deliver a Continuation Notice within the thirty (30) day period, it is deemed to have elected to terminate the then current Management Agreement and
receive the Termination Fee at the closing. If Manager delivers a Continuation Notice within the thirty (30) day period, then Parent, its Affiliate or Owner, as applicable, shall require, as a condition to the closing of the Controlling
Interest Sale or the Facility Sale, that the new owner of the Facility enter into an assignment of the then current Management Agreement or (ii) enter into a Replacement Management Agreement (under the same terms and conditions as the then
current Management Agreement except that the term of any such Replacement Management Agreement shall consist only of the balance of the term remaining under the then current Management Agreement), (2) replace the FF&E Reserve and the
Working Capital required under the then current Management Agreement, and (3) provide for a replacement guarantor under the Guaranty reasonably acceptable to Manager. Parent or its Affiliate shall not close a Controlling Interest Sale or Owner
shall not close a Facility Sale until the later of (x) the date on which Manager and the Controlling Interest 

  
  

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purchaser have agreed on the form of the Replacement Management Agreement and the replacement guarantor, if a Continuation Notice was delivered, and (y) the expiration of the thirty
(30) day period for the delivery of the Continuation Notice if no Continuation Notice is delivered. 
 (d)
Manager’s Right of First Offer. If Owner intends to enter into a Facility Sale or Parent or its Affiliate intends to enter into a Controlling Interest Sale with any Person (including an Affiliate of Owner or Parent) and no Person with a
direct or indirect ownership interest in Owner is then an Affiliate of Manager, then Owner shall provide notice to Manager and Manager shall have a right of first offer to purchase the Facility upon the terms set forth below. 

(1) Owner shall provide Manager with written notice (within the Sale Notice or otherwise) of its intent to enter into the
Facility Sale or Parent’s or its Affiliate’s intent to enter into a Controlling Interest Sale, and Manager shall have ten (10) Business Days following receipt of such notice to deliver a written offer to Owner and Parent or its
Affiliates (the “Purchase Notice”) with the price offered by Manager for the purchase of the Facility (“Offered Purchase Price”). Owner or Parent or its Affiliates, as applicable, shall respond to Manager within
five (5) Business Days after receipt of the Purchase Notice whether or not it accepts the Offered Purchase Price (the “Response”). If the Owner or Parent or its Affiliate, as applicable, accepts the Offered Purchase Price
within the five (5) Business Days’ period, then Manager shall deliver to Owner and Parent or its Affiliate within ten (10) Business Days after the Response is received, a proposed draft purchase agreement, and will deposit with the
Escrow Agent in cash an amount equal to the lesser of (i) five percent (5%) of the Offered Purchase Price, or (ii) $500,000 (the “Downpayment”) within three (3) Business Days after execution of the purchase
agreement. If Owner fails to deliver the Response within the five (5) Business Days’ period, Owner shall be deemed to have accepted the Offered Purchase Price. If the Response specifies that Owner or Parent or its Affiliate, as applicable,
does not accept the Offered Purchase Price, then Owner shall have the right to market the Facility, but shall continue to be bound by the provisions of subsection 18(d)(4) below. 

(2) The Escrow Agent shall hold the Downpayment in an interest bearing account pursuant to a written agreement among
Owner, Manager and the Escrow Agent, which agreement shall be satisfactory to such parties in the exercise of their respective reasonable discretion and shall provide, among other things, that the Escrow Agent shall not commingle the Downpayment
with any other funds. In the event of a closing of a Facility Sale to Manager pursuant to the terms of this Section 18.12(d), the Downpayment, together with any interest earned thereon, shall be credited against the Offered Purchase Price. If
Manager shall fail to purchase the Facility in compliance with its obligations under this Section 18.12(d), the Purchase Notice shall be deemed revoked and the Downpayment, and any interest thereon, shall be paid to Owner by the Escrow Agent
promptly following written request therefor as Owner’s sole and exclusive remedy and Section 18.12(d) shall apply. If the purchase agreement is terminated by Manager in accordance with any allowable periods for termination as set forth in
the purchase agreement, then the Downpayment shall be returned to Manager and the Purchase Notice shall thereafter be deemed revoked, with no liability to Manager therefor and Section 

  
  

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18.12(b)(3) shall apply. If Owner shall default in any of its obligations under this Section 18.12(d), the Downpayment, and any interest earned thereon, shall be returned to Manager promptly
following written request therefor, and Manager may pursue an action for specific performance or any other remedy available to it by law. Upon acceptance or deemed acceptance of the Offered Purchase Price by Owner as aforesaid, (i) a binding
contract shall be deemed to exist between Owner and Manager with respect to the purchase and sale of the Facility, and (ii) Manager and Owner shall use good faith efforts to negotiate a definitive agreement for the closing of the purchase and
sale to be held at the principal place of business of Manager (or as otherwise may be agreed to by the parties) on a Business Day selected by Manager not less than thirty (30) days and not more than one hundred twenty (120) days from
Owner’s receipt of the Purchase Notice. Manager shall pay the Offered Purchase Price (less the Downpayment and any interest earned thereon) by wire transfer of immediately available federal funds to an account (or account(s)) designated in
writing by Owner. Each party shall pay its own costs and expenses in connection with the conveyance of the Facility to Manager pursuant to this Section 18.12(d). Any transfer, deed, documentary, stamp or similar tax due in connection with a
sale of the Facility pursuant to this Section 18.12(d) shall be shared equally by Manager and Owner. If the Manager and the Owner are unable to negotiate a definitive agreement for the closing of the purchase and sale of the Facility as set
forth in this paragraph, then the dispute will be resolved exclusively by arbitration pursuant to Section 18.17 of this Agreement. Either party may initiate such arbitration. 

(3) If (x) Manager does not timely deliver a Purchase Notice or (y) the Manager states in its Purchase Notice
that it does not exercise its option purchase the Facility, or (z) Manager’s Purchase Notice is deemed to have been revoked in accordance with Section 18.12(d)(2) or if Owner or Parent or its Affiliate rejects Manager’s Offered
Purchase Price within the applicable time period, Owner or Parent or its Affiliate are authorized for three hundred sixty-five (365) days following the deadline for receipt of such Purchase Notice to accept any offer for the purchase of the
Facility or a Controlling Interest without further offer to the Manager which complies with the specifications set forth in items (i) and (ii) below (a “Sale Offer”), provided that any Facility Sale or Controlling Interest
Sale, as applicable, shall remain subject to the provisions of Section 18.12(a). 
 (i) The Sale Offer must
be an all cash offer for the purchase of the Facility or the Controlling Interest, as applicable, in an amount not less than 105% of the Offered Purchase Price; and 

(ii) The Sale Offer must provide for the closing of the purchase of the Facility or the Controlling Interest, as
applicable, not sooner than thirty (30) days nor later than three hundred sixty-five (365) days after (A) if Manager failed to deliver a Purchase Notice, the date which is thirty (30) days after receipt of the Sale Notice by
Manager, (B) if Manager delivered a Purchase Notice and same was deemed to have been revoked, the date of the deemed revocation of the Purchase Notice or (C) if Manager delivered the Purchase Notice but the Offered Purchase Price was
rejected in the Response, the date the Response was received by Manager. 

  
  

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 (4) If Owner or Parent or its Affiliate fails to close the Facility Sale or
the Controlling Interest Sale pursuant to the requirements of (as applicable) subsection 18.12(d)(3) or if the Sale Offer does not comply with the provisions of Section 18.12(d)(3)(i)-(ii), then any further Facility Sale or a Controlling
Interest Sale shall be again subject to the provisions of this Section 18.12(d). 
 18.13. Entire Agreement;
Amendment. This Agreement supersedes all prior drafts and discussions relating to this Agreement. This Agreement constitutes one (1) agreement and shall be construed and interpreted in light of all such other agreements between the parties
including, but not limited to, the Manager Pooling Agreement. All prior representations or agreements not expressly incorporated herein, whether written or verbal, are superseded, and no changes in or additions to this Agreement shall be recognized
unless and until made in writing and signed by both parties hereto. 
 18.14. Relationship Between the Parties. The
relationship between Owner and Manager pursuant to this Agreement shall not be one of general agency, but shall be that of Owner with Manager being an independent contractor; provided, however, that Manager shall have the authority to bind the Owner
with respect to third parties to the extent Manager is performing its obligations under this Agreement or as otherwise authorized by Owner. Neither this Agreement nor any agreements, instruments, documents or transactions contemplated hereby shall
in any respect be interpreted, deemed or construed as making Owner a partner or joint venturer with Manager or as creating any similar relationship or entity, and each party agrees that it will not make any contrary assertion, contention, claim or
counterclaim in any action, suit or other legal proceeding involving the other. Owner hereby grants an irrevocable power of attorney to the Manager to act on behalf of Owner vis-a-vis third parties as necessary in connection with the performance of
Manager’s obligations under this Agreement. 
 18.15. Force Majeure. As used in this Agreement, the term
“Force Majeure” shall mean any failure to perform an obligation under this Agreement when the party so obligated is prevented from so performing by (i) Acts of God, (ii) strike, lockouts, actions of labor unions or other
labor trouble, (iii) sabotage, (iv) fire or casualty, (v) order or regulation of or by any Governmental Authority (other than orders or regulations of a Governmental Authority resulting from the obligated party’s non-compliance
with typical and ordinary health, licensing and construction laws, rules or regulations), (vi) acts or omissions of any Governmental Authority (including delays in obtaining any required licenses, permits or approvals, provided such permits
were timely and accurately submitted to the applicable Governmental Authority), (vii) war (declared or undeclared), acts of terrorism, riot, acts of the public enemy or other civil commotion, (vii) rebellions, riots, insurrections or
sabotage, (ix) shortage of labor, materials or supplies; provided, however, that the lack of financial resources or a failure to comply with existing laws shall never be excused. 

18.16. Subordination, Non-disturbance and Attornment Agreements. 

(a) At such time that Manager receives from Mortgagee an executed and recordable subordination, non-disturbance and attornment agreement
in a form acceptable to Manager in its sole discretion, this Agreement and any extensions, renewals, replacements or modifications thereto, and all rights and interests of Manager in the Facility, shall be subject and subordinate to any Facility
Mortgage. 

  
  

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 (b) If the loan documents secured by the Facility Mortgage, or any subordination,
non-disturbance and attornment agreement executed by Manager contains provisions requiring Manager (upon default under the Facility Mortgage, or upon various other stipulated conditions) to pay certain amounts which are otherwise due to Owner under
this Agreement (after the payment of Facility Expenses) to the Mortgagee or its designee (rather than to Owner), Owner hereby gives its consent to such provisions, which consent shall be deemed to be irrevocable until the entire debt secured by the
Facility Mortgage has been discharged. 
 18.17. Arbitration. 

(a) Any dispute, disagreement, or controversy arising out of this Agreement for which arbitration in accordance with this
Section 18.17 is expressly provided shall be resolved by arbitration (the “Arbitration Proceeding”) administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules and
Expedited Procedures, in effect at the time of the demand for arbitration, provided, however that to the extent any provision of this Section modifies, adds to, or is inconsistent with any provisions of those rules and procedures, the provisions of
this Section shall control. The arbitration will be conducted before a single arbitrator in Washington, D.C., Alexandria, VA, McLean, VA, Bethesda, MD or Orlando, FL (the “Venue”). The parties hereby acknowledge and agree that the
party which did not initiate the Arbitration Proceeding shall have the right to elect the Venue in its sole discretion, which shall be binding on both parties. The choice of law provisions set forth in Section 18.21 shall apply in any such
Arbitration Proceeding. Any dispute, disagreement, or controversy arising out of or relating to this Agreement for which arbitration is not expressly provided as the means of resolution may be resolved by litigation as provided in Section 18.21
or by other lawful means. Notwithstanding anything to the contrary contained herein, so long as the JV Agreement is in effect and Manager is an Affiliate of a Person holding a direct or indirect ownership interest in Owner, any dispute, disagreement
or controversy arising out of this Agreement which also constitutes a dispute as to a Major Decision (as defined in the JV Agreement) under the JV Agreement shall not be submitted to an Arbitration Proceeding hereunder, but rather shall be resolved
pursuant to and in accordance with the terms and conditions of the JV Agreement, and Manager and Owner agree that such resolution shall be binding. 
 (b) The party desiring arbitration shall provide written notice to the other party (the “Arbitration Notice”) indicating (1) the matter in controversy and (2) the name, contact
information and professional resume of the proposed arbitrator meeting the requirements for a qualified and independent arbitrator set forth in Section 18.17(c) (“Initial Arbitrator”) to arbitrate such matter in controversy. If
the party receiving the Arbitration Notice rejects the Initial Arbitrator set forth in the Arbitration Notice it shall object in writing (“Objection Notice”) delivered to the other party within seven (7) Business Days of the
receipt of the Arbitration Notice. The Objection Notice shall contain the name, contact information and professional resume of a different arbitrator meeting the requirements for a qualified and independent arbitrator set forth in
Section 18.17(c) (“Secondary Arbitrator”) to arbitrate the matter in controversy set forth in the Arbitration Notice. If the party receiving the Objection Notice rejects 

  
  

- 54 - 

 
the Secondary Arbitrator, it shall object in writing (“Secondary Objection Notice”) to the other party within seven (7) Business Days after the receipt of the Objection
Notice. If neither the Initial Arbitrator nor the Secondary Arbitrator is accepted by the parties, the party which delivered the Arbitration Notice shall instruct the Initial Arbitrator and the Secondary Arbitrator to agree, within five
(5) Business Days after receipt of the Secondary Objection Notice, upon an arbitrator (“Appointed Arbitrator”) meeting the requirements for a qualified and independent arbitrator set forth in Section 18.17(c). If they
agree upon an Appointed Arbitrator who is prepared to act as the Appointed Arbitrator, the Initial Arbitrator and Secondary Arbitrator shall deliver written notice of the name, contact information and professional resume of the Appointed Arbitrator
to each party simultaneously. The appointment of the Appointed Arbitrator shall be a final decision, which shall not be subject to objection by either party, unless either party within five (5) Business Days after such selection of an Appointed
Arbitrator, notifies the other party, in writing, that such Appointed Arbitrator fails to meet the requirements for a qualified and independent arbitrator set forth in Section 18.17(c) and provides specific information in such written notice as
to the reasons why such failure exists. 
 (c) In the event the Initial Arbitrator and the Secondary Arbitrator cannot agree on
an Appointed Arbitrator or if such appointed Arbitrator is unwilling to act as the Appointed Arbitrator or if either party objects to the Appointed Arbitrator within five (5) Business Days after the selection of such Appointed Arbitrator, as
permitted in this Section 18.17, then either party may petition the AAA (or any successor body of similar function) to appoint an arbitrator within five (5) Business Days of such petition using the following criteria: such arbitrator shall
be (1) with respect to physical property matters, a licensed professional engineer or registered architect having at least ten (10) years experience in the design or construction of similar senior housing facilities, (2) with respect
to financial matters, a partner in a “Big Four Accounting Firm” with at least ten (10) years experience with the type of matter in dispute, (3) with respect to property management issues, an individual who shall have had at least
ten (10) years experience managing similar senior housing facilities and (4) be neutral and shall have had no prior notice, information or discussions concerning such controversy and shall not be employed by or associated with either party
or any Affiliate of either of them, or any of their respective agents or affiliates at such time or for the previous ten (10) years. If the dispute involves more than one type of matter, then the Appointed Arbitrator may be (X) an
individual with expertise in any one of the types of matters in dispute, or (Y) a retired judge. 
 (d) The Arbitration
Proceedings shall commence fifteen (15) Business Days after the engagement or appointment of the appropriate arbitrator pursuant to this Section 18.17. The arbitrator shall make a determination within ten (10) Business Days after
conclusion of the Arbitration Proceeding. 
 (e) The costs and expenses of an Arbitration Proceeding including administrative
fees and costs, expert fees and the arbitrator’s fees and cost, shall be shared equally by Owner and Manager, and each party shall bear its own counsel, expert, administrative fees and other professional fees and expenses with respect to such
Arbitration Proceeding; provided, however, that the Appointed Arbitrator may (but shall not be required to), in the exercise of his/her best judgment, assess one party for a part or all of the costs of the other party, including the
costs of the Arbitration Proceeding. 

  
  

- 55 - 

 (f) Any arbitrator’s final decision and award shall be in writing and delivered by the
parties in an expedited manner, shall be binding on the parties and shall be non-appealable, and counterpart copies thereof shall be delivered to both parties. A judgment or award rendered by the arbitrator may be entered in any court of competent
jurisdiction. All actions necessary to implement the decision of the arbitrator shall be undertaken as soon as possible, but in no event later than three (3) Business Days after the rendering of such decision. 

18.18. Cooperation. Should any claim, demand, suit or other legal proceeding be made or instituted by either party which arises
out of any of the matters relating to this Agreement, each party shall give the other all non-privileged and pertinent information possessed by or under the control of such party and reasonable assistance in the defense or other disposition thereof.
In addition, in each instance where Manager’s performance under this Agreement is dependant on receiving the cooperation of Owner, Owner shall promptly cooperate and provide Manager with such requested assistance. 

18.19. Manager Pooling Agreement as Controlling Agreement. The Manager Pooling Agreement is intended to modify and amend this
Agreement. If there is any conflict or inconsistency between the terms of this Agreement and the terms of the Manager Pooling Agreement, then the terms of the Manager Pooling Agreement shall supersede and control in all respects. 

18.20. Costs of Dispute. In any legal action or proceeding arising out of this Agreement, other than an Arbitration Proceeding,
the successful or prevailing party or parties therein will be entitled to recover from the other party or parties reasonable attorney’s fees and other costs incurred in that action or proceeding, including those related to appeal of any such
action. The recovery of attorney’s fees and costs will be in addition to any other relief to which the successful or prevailing party or parties may be entitled. 
 18.21. Governing Law; Litigation, Jurisdiction and Waiver of Jury Trial. 

(a) This Agreement will be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia without regard to
conflict of laws principles. 
 (b) For the purposes of any suit, action or proceeding involving this Agreement, the parties
each hereby expressly and irrevocably submits to the jurisdiction of all federal and state courts sitting in the Commonwealth of Virginia which courts shall have the exclusive jurisdiction over any such suit, action or proceeding commenced by any
party. The parties consent to service of process, wherever made, by certified mail return receipt requested, personal service or any other method permitted by applicable law and the rules of the applicable court. In furtherance of such agreement,
the parties agree, upon the request of any party, to discontinue (or agree to the discontinuance of) any such suit, action or proceeding pending in any other jurisdiction. 
 (c) Each party hereby irrevocably waives any objection that either party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
brought in any federal or state court sitting in the Commonwealth of Virginia and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 

  
  

- 56 - 

 (d) If for any reason, the state and federal courts sitting in the Commonwealth of Virginia
refuse to exercise jurisdiction over the proceeding or any party, then litigation as permitted herein may be brought in any court of competent jurisdiction in the United States of America. 

(e) EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING
IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE FACILITY, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING. 

18.22. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument. 
 18.23. Contracting with Affiliates. Manager shall
be entitled to contract with companies that are Affiliates (or companies in which Manager has an ownership interest if such interest is not sufficient to make such company an Affiliate) to provide goods and/or services to the Facility; provided that
the prices and/or terms for such goods and/or services are at a fair market price. Additionally, Manager may contract for the purchase of goods and services for the Facility with third parties that have other contractual relationships with
Manager and its Affiliates, so long as the prices and terms are at a fair market price. Manager shall fully disclose to Owner any material interest of Manager and/or its Affiliate in any vendor and Manager shall establish to Owner’s
reasonable satisfaction that any such purchase contracts were made at fair market prices. In determining, pursuant to the foregoing, whether such prices and/or terms are at a fair market price, they will be compared to the prices and/or terms
which would be available from reputable and qualified parties for goods and/or services of similar quality, and the goods and/or services which are being purchased shall be grouped in reasonable categories, rather than being compared item by
item. Any dispute as to whether prices and/or terms are at a fair market price shall be referred to arbitration pursuant to Section 18.17. The price paid may include overhead and the allowance of a reasonable return to Manager and its
Affiliates (or companies in which Manager has an ownership interest if such interest is not sufficient to make such company an Affiliate). 
 18.24. Parent Subordination. Parent and Owner acknowledge and agree that payment of any fees or other amounts, including the Termination Fee, payable to Manager under this Agreement or the Manager
Pooling Agreement (the “Manager Receivables”) shall be senior to the payment of any distributions or other payments to Parent (including, without limitation, reimbursement payments to Parent for Parent’s satisfaction of any
Guaranteed Obligations (as defined in the Guaranty)) and Parent hereby subordinates its right to receive any distributions or other payments from Owner to Manager’s right to the Manager Receivables. 

  
  

- 57 - 

 18.25. Facility Name. Owner and Parent hereby agree that during the term of the
Management Agreement, Manager shall have the right, in its sole discretion, to publicly designate the Facility governed thereunder a “Sunrise” community, with such additional identification to provide local identification. 

18.26. Parent and Owner Consents. Manager shall be entitled to rely fully and act upon all approvals, consents, authorizations and
elections made by Owner under this Agreement, without any obligation whatsoever to make inquiry of Parent or seek confirmation that Parent has provided its authorization, or approval, written or otherwise, to such Owner action and Manager shall not
be required to grant any additional time for Parent to instruct Owner with respect to such matters. 
 18.27. REIT
Compliance. 
 (a) Manager shall provide Owner written notice any time Manager or any of its Affiliates acquires any of the
shares of CNL Lifestyle Properties, Inc., or CNL Healthcare Trust, Inc. (each, a “REIT”), and in any event neither Manager nor any of Manager’s Affiliates shall own, at any time during the Term, more than thirty-five percent
(35%) of the shares of either REIT. 
 (b) Manager shall at all times qualify as an “eligible independent
contractor” as defined in Section 856(d) of the Internal Revenue Code. In the event that Owner reasonably concludes that the terms of this Agreement will have an effect as to cause rent under Owner’s lease of the Facility to fail to
qualify as “rents from real property” within the meaning of Section 856(d) of the Internal Revenue Code, Manager hereby agrees to enter into an amendment to this Agreement as proposed by Owner modifying such terms in such a way as to
cause rent under Owner’s lease of the Facility to so qualify as “rents from real property” in the reasonable opinion of Owner and its counsel, provided, however, no such modifications shall affect the amount of
management fees or the practical realization of the rights and benefits of the Manager hereunder. 
 [Signatures Commence on
Following Page] 

  
  

- 58 - 

 IN WITNESS WHEREOF, the parties hereto have caused this Management Agreement to be executed
under seal by their duly authorized offices, all as of the Effective Date. 
  

					
	OWNER:
	
	 SUNRISE CONNECTICUT AVENUE
 ASSISTED LIVING OWNER, L.L.C., a Virginia limited liability company

		
	By:	 	 /s/ Joshua J. Taube

		 	Name:	 	Joshua J. Taube
		 	Title:	 	Vice President

 [Signatures continue on following page] 

[Signature page to Management Agreement: Sunrise of Connecticut Avenue] 

 
					
	 MANAGER:

	
	 SUNRISE SENIOR LIVING MANAGEMENT,
 INC., a Virginia corporation

		
	By:	 	 /s/ Edward W. Burnett

		 	Name:	 	Edward W. Burnett
		 	Title:	 	Vice President

 [Signatures continue on following page] 

[Signature page to Management Agreement: Sunrise of Connecticut Avenue] 

 
					
	PARENT:
	
	 CHTSUN PARTNERS IV, LLC,
 a Delaware limited liability company

		
	By:	 	CHT SL IV HOLDING, LLC,
		 	a Delaware limited liability company.
		 	Managing Member
		
	By:	 	 /s/ Joshua J. Taube

		 	Name:	 	Joshua J. Taube
		 	Title:	 	Vice President

 [Signature page to Management Agreement: Sunrise of Connecticut Avenue] 

 EXHIBIT A 

DESCRIPTION OF REAL PROPERTY 

All of those lots or parcels of land located in the District of Columbia and more particularly described as follows: 

Lot 162 in Square 1989 in a subdivision made by Sunrise Connecticut Avenue Assisted Living, LLC, and others, as per plat recorded in Liber No. 194
at folio 37 among the Records of the Office of the Surveyor for the District of Columbia. 

 EXHIBIT B-1 

FACILITY SHARED SERVICES 
  

			
	 Accounts Payable Processing
	  	 Referral Fees - MIS

	 AOD Billing System
	  	 Regional Facilities Expense

	 Business Managers
	  	 Resident Billing Support

	 Clinical System
	  	 Resident Billing System

	 Connectivity-Shared
	  	 Sales System

	 Cost Report Expense
	  	 Sales Training - EBD

	 Engagement Surveys
	  	 Sales Training - Focus

	 Learning Delivery and Implementation
	  	 Sales Training- Excellence in Selling

	 Learning Design and Development
	  	 Sales Training- Selling Skills

	 Learning Logistics and Administration
	  	 Skilled Nursing

	 Medicare Billing
	  	 Tax Advice - Shared

	 Memory Care Training
	  	 Technology Help Desk

	 Payroll Staff, Training & Communication
	  	 Time & Attendance System

	 Recruitment Marketing and Advertising
	  	 Med Management

  
  

B-1-1 

 EXHIBIT B-2 

DIRECT EXPENSES 
  

			
	 Audit Expense
	  	 Payroll Charge

	 Bank Service Charges
	  	 Predictive Index

	 Connectivity-Direct
	  	 Preventative Maintenance System

	 Desktop Software Licensing
	  	 Referral Subscriptions - APFM

	 Emergency Resources
	  	 Resident Bill Print & Delivery

	 E-Newsletter
	  	 TALX

	 Horizon
	  	 Tax Compliance - Direct

	 Internet Marketing
	  	 Training Materials-Liberty

	 Mystery Shop
	  	 Website

	 Learning Management System
	  	 Yellow Pages

  
  

B-2-1 

 EXHIBIT C-1 

FINANCIAL REPORTING REQUIREMENTS 
  

											
	 Schedule of Reporting
	  	 	  	 	  	 	  	 	  	 
	 General Description
	  	Detailed Description	  	 Due Date
	  	Monthly	  	Quarterly	  	Annually
	 Financial Reporting
	  		  		  		  		  	
	 Financial Statements (balance sheet, income statement and trial balance)
	  	Sunrise’s standard
format	  	15th	  	X	  		  	
	 Cash Flow (Non GAAP)
	  		  	15th	  	X	  		  	
	 Capital Expenditures
	  	Sunrise’s standard
format	  	15th	  	X	  		  	
	 Insurance Claims
	  		  	15th	  	X	  		  	
	 Accounts Receivable Aging
	  		  	15th	  	X	  		  	
	 Distribution Schedule
	  	Actual	  	15th	  	X	  		  	
	 Captive Insurance Company Financials (audited)
	  	Annually	  	(June 30th)	  		  		  	X
	 Occupancy Report
	  	Flash Report	  	15th	  	X	  		  	
	 Variance Report
	  		  	15th	  	X	  		  	
	 Partners’ K-1’s
	  	Un-audited	  	60 Days	  		  		  	
	 Audit
	  	Final	  	March 20th (Manager to use best efforts to deliver by March 15th)	  		  		  	
	 Tax Returns
	  	Un-audited	  	90 Days	  		  		  	
	 Rent Roll
	  		  	15th	  	X	  		  	
	 Budgets
	  		  		  		  		  	
	 Property Annual Operating Budget
	  	Draft	  	Nov 30th	  		  		  	X
	 Property Annual Operating Budget
	  	Final	  	Dec 15th	  		  		  	X
	 Budget to Include:
	  		  		  		  		  	
	 Narrative with operating objectives and assumptions
	  		  	Dec 15th	  		  		  	
	 Competitive Set Analysis
	  	Annual Update	  	Dec 15th	  		  		  	
	 Real Estate Tax Summary
	  		  	Dec 15th	  		  		  	
	 Capital Expenditures
	  	1 year forecast	  	Dec 15th	  		  		  	
	 Distribution Projection
	  		  	Dec 15th	  		  		  	

  
  

C-1-1 

 EXHIBIT C-2 
 QUARTERLY CERTIFICATION 
  

	1.	Except to set forth on Exhibit A to this Quarterly Certification, to Manager’s knowledge, the consolidated income statement and balance sheet (the
“Reports”) of CHTSun Partners IV, LLC (the “Partnership”) delivered on              fairly present in all material respects the financial position and results of
operations of the Partnership at the dates and for the periods presented in the Reports, with respect to the matters addressed by such Reports, all in accordance with United States generally accepted accounting principles consistently applied
(subject to normal year end adjustments). 

  

	2.	Except as set forth on Exhibit A to this Quarterly Certification, Manager is not aware of any significant deficiencies or material weaknesses in Manager’s design
or operation of internal control over financial reporting which are reasonably likely to adversely affect Manager’s ability to record, process, summarize and report financial information with respect to the Partnership.

  

	3.	Except as set forth on Exhibit A to this Quarterly Certification, Manager is not aware of any material fraud that involves management or other employees who have a
significant role in Manager’s internal control over financial reporting. 

  
  

C-2-1 

 EXHIBIT D 

Form of Proposed Budget 
  

																													
	 Occupancy %
	  	All Departments	  	 Jan
	  	 Feb
	  	 Mar
	  	 Apr
	  	 May
	  	 Jun
	  	 Jul
	  	 Aug
	  	 Sep
	  	 Oct
	  	 Nov
	  	 Dec
	  	 Year
Total

	 Total Revenue ADR
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Margin
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Total Resident Fees
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Total Extended Care
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Incontinence Management
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Medication Management
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Care Revenue
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Ancillary and Therapy
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Community Fee
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Other Revenue
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Rental Income-Affiliate
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Revenue
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Total Cost of Sales
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Revenue
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Productive Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Non Productive Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 PR Tax & Benefits
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Total Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Resident Food Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Utilities
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Repairs and Maintenance
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Paint Vinyl Sealing Coating
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Workers Comp - Insurance
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Insurance
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Supplies Expense
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Referral Fee Costs
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Marketing and Advertising
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Bad Debt Write-Offs
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Contract Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Key Controllable Operating Expense
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Legal, Professional Fees and Consulting
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Non Resident Food Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	

  
  

 

																													
	 Program Costs
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Telecommunications
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Technology
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Other Non-Op Income (Expense)
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Travel Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Auto and Equipment
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Business Office Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Employee Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Other Department Controllables
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Operating Expense
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 NOI
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Net Income
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Stats MoveIns
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	Total Assisted Living	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	Total Reminiscence	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	Total Independent Living	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	Total Health Care	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Avg Number of Residents
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Resident Days
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Resident Days Capacity
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Units Occupied (Avg Monthly Balance-Units)
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Unit Capacity
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Unit Occupancy %
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Total Revenue ADR
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	Total Assisted Living	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	Total Reminiscence	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	Total Independent Living	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	Total Health Care	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Extended Care ADR
	  	All Departments	  		  		  		  		  		  		  		  		  		  		  		  		  	
															
	 Margins
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Cost of Sales
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Productive Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Non Productive Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 PR Tax & Benefits
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	

  
  

 

																													
	 Total Labor
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Res. Food Cost
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Utilities
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 R&M
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Paint Vinyl Sealing Coating
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Worker’s Comp
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Insurance
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Supplies
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Referrals
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Marketing
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Key Controllables
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Other Controllable
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 House Profit
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Mgmt Fee
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Non-Dept
	  		  		  		  		  		  		  		  		  		  		  		  		  		  	

  
  

 

																							
	 Occupancy %
	  	All
Departments	  	Working	  	Working	  	Working	  	Working	  	Working	  	Working	  	 	  	 	  	Working	  	Working
	 Total Revenue ADR
	  	All
Departments	  	Q1	  	Q2	  	Q3	  	Q4	  	Year
Total	  	Year
Total	  		  		  	Year
Total	  	Year
Total
	 Margin
	  	All
Departments	  	2011	  	2011	  	2011	  	2011	  	2011	  	2010	  		  		  	2010	  	2009
		  		  	Budget	  	Budget	  	Budget	  	Budget	  	Budget	  	Forecast	  	$ Var	  	% Var	  	Budget	  	Actual
	 Total Resident Fees
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Care Revenue
	  		  		  		  		  		  		  		  		  		  		  	
	 Ancillary and Therapy
	  		  		  		  		  		  		  		  		  		  		  	
	 Community Fee
	  		  		  		  		  		  		  		  		  		  		  	
	 Other Revenue
	  		  		  		  		  		  		  		  		  		  		  	
	 Rental Income-Affiliate
	  		  		  		  		  		  		  		  		  		  		  	
	 Revenue
	  		  		  		  		  		  		  		  		  		  		  	
	 Total Cost of Sales
	  		  		  		  		  		  		  		  		  		  		  	
	 Net Revenue
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Productive Labor
	  		  		  		  		  		  		  		  		  		  		  	
	 Non Productive Labor
	  		  		  		  		  		  		  		  		  		  		  	
	 PR Tax & Benefits
	  		  		  		  		  		  		  		  		  		  		  	
	 Total Labor
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Resident Food Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Utilities
	  		  		  		  		  		  		  		  		  		  		  	
	 Repairs and Maintenance
	  		  		  		  		  		  		  		  		  		  		  	
	 Paint Vinyl Sealing Coating
	  		  		  		  		  		  		  		  		  		  		  	
	 Workers Comp - Insurance
	  		  		  		  		  		  		  		  		  		  		  	
	 Insurance
	  		  		  		  		  		  		  		  		  		  		  	
	 Supplies Expense
	  		  		  		  		  		  		  		  		  		  		  	
	 Referral Fee Costs
	  		  		  		  		  		  		  		  		  		  		  	
	 Marketing and Advertising
	  		  		  		  		  		  		  		  		  		  		  	
	 Bad Debt Write-Offs
	  		  		  		  		  		  		  		  		  		  		  	
	 Contract Labor
	  		  		  		  		  		  		  		  		  		  		  	

  
  

 

																							
	 Key Controllable Operating Expense
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Legal, Professional Fees and Consulting
	  		  		  		  		  		  		  		  		  		  		  	
	 Non Resident Food Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Program Costs
	  		  		  		  		  		  		  		  		  		  		  	
	 Telecommunications
	  		  		  		  		  		  		  		  		  		  		  	
	 Technology
	  		  		  		  		  		  		  		  		  		  		  	
	 Other Non-Op Income (Expense)
	  		  		  		  		  		  		  		  		  		  		  	
	 Travel Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Auto and Equipment
	  		  		  		  		  		  		  		  		  		  		  	
	 Business Office Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Employee Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Other Department Controllables
	  		  		  		  		  		  		  		  		  		  		  	
	 Operating Expense
	  		  		  		  		  		  		  		  		  		  		  	
	 House Profit
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Non Department Expense
	  		  		  		  		  		  		  		  		  		  		  	
	 Total Operating Expenses
	  		  		  		  		  		  		  		  		  		  		  	
												
	 NOI
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Investment Factors
	  		  		  		  		  		  		  		  		  		  		  	
	 Net Income
	  		  		  		  		  		  		  		  		  		  		  	
												
	 Stats MoveIns
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Occupancy %
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Avg Number of Residents
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Resident Days
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Resident Days Capacity
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Unit Occupancy %
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	

  
  

 

																							
	 Total Revenue ADR
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Net Resident Fees ADR
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
	 Extended Care ADR
	  	All
Departments	  		  		  		  		  		  		  		  		  		  	
												
	 Margins
	  		  		  		  		  		  		  		  		  		  		  	
	 Cost of Sales
	  		  		  		  		  		  		  		  		  		  		  	
	 Productive Labor
	  		  		  		  		  		  		  		  		  		  		  	
	 Non Productive Labor
	  		  		  		  		  		  		  		  		  		  		  	
	 PR Tax & Benefits
	  		  		  		  		  		  		  		  		  		  		  	
	 Total Labor
	  		  		  		  		  		  		  		  		  		  		  	
	 Res. Food Cost
	  		  		  		  		  		  		  		  		  		  		  	
	 Utilities
	  		  		  		  		  		  		  		  		  		  		  	
	 R&M
	  		  		  		  		  		  		  		  		  		  		  	
	 Paint Vinyl Sealing Coating
	  		  		  		  		  		  		  		  		  		  		  	
	 Worker’s Comp
	  		  		  		  		  		  		  		  		  		  		  	
	 Insurance
	  		  		  		  		  		  		  		  		  		  		  	
	 Supplies
	  		  		  		  		  		  		  		  		  		  		  	
	 Referrals
	  		  		  		  		  		  		  		  		  		  		  	
	 Marketing
	  		  		  		  		  		  		  		  		  		  		  	
	 Key Controllables
	  		  		  		  		  		  		  		  		  		  		  	
	 Other Controllable
	  		  		  		  		  		  		  		  		  		  		  	
	 House Profit
	  		  		  		  		  		  		  		  		  		  		  	
	 Mgmt Fee
	  		  		  		  		  		  		  		  		  		  		  	
	 Non-Dept
	  		  		  		  		  		  		  		  		  		  		  	
	 NOI
	  		  		  		  		  		  		  		  		  		  		  	

  
  

 

 EXHIBIT E 

CURRENT INSURANCE PROGRAM 

The parties hereto mutually agree that the insurance requirements listed below shall be subject to reasonable availability of such insurance in the
marketplace at time of procurement. 
 All insurers must have an A.M. Best rating of A-/VII or better. Certificates of insurance for all
coverages will be issued as soon as practicable after renewal terms have been finalized. 
 Article I Lines of Insurance

 1.01 Property Insurance 

Coverage is full replacement cost value of the facility, including business interruption under a $250,000,000 blanket limit. The values associated with
each property will be reviewed annually. 
 California Earthquake Coverage - $50,000,000 in blanket limits 

National Flood Insurance Program (NFIP) coverage on all locations in Special Flood Hazard Areas as defined by FEMA. 

1.02 Commercial General and Professional Liability Insurance 
 $11,000,000 per occurrence 
 $11,000,000 annual aggregate 

$21,000,000 policy period aggregate 
 Aggregate
does not apply on a per location basis 
 1.03 Automobile Liability 
 $2,000,000 Combined Single Limit Each Accident 
 Automobile Physical Damage – Actual Cash
Value 
 1.04 Workers’ Compensation (statutory limits) and Employers Liability Insurance 

$2,000,000 each employee 
 $2,000,000 each
accident 
 $2,000,000 policy limit 

1.05 Excess Liability 
 Employer’s
Liability and Automobile Liability: 
 $10,000,000 per Loss, $20,000,000 Annual Aggregate excess of $2,000,000 Each Accident and Employer’s
Liability only Policy Aggregate 

  
  

E-1 

 General and Professional, Employer’s and Automobile Liability 

$40,000,000 per Occurrence excess of $11,000,000 per Occurrence (GL/PL) and $12,000,000 Per Loss (EL/Auto) 

$40,000,000 Annual Aggregate excess of $11,000,000 Annual Aggregate, $21,000,000 Policy Period Aggregate (GL/PL) and $12,000,000 Per Loss, $20,000,000
Annual Aggregate (EL/Auto) 
 General, Employer’s Liability and Automobile Liability Only 

$50,000,000 per Occurrence excess of $51,000,000 per Occurrence (GL) and $52,000,000 per Occurrence (EL/Auto) 

$50,000,000 Annual Aggregate excess of $51,000,000 Annual Aggregate, $61,000,000 Policy Aggregate, (GL/PL ) and $52,000,000 Annual Aggregate (EL/Auto)

 1.06 Employment Practices Liability 

$10,000,000 per occurrence 
 $10,000,000
aggregate 
 Article II Insurance Cost Allocation 
 Section 2.01 The cost associated with the insurance program, including projected ultimate losses within deductible layers or self-insured retentions and premiums, will be allocated to all facilities
operated by Sunrise Senior Living Management, Inc. (“Manager”) at the time of the Manager’s Insurance Program renewal date. The allocations will be determined based on the following: 

 

			
	Property	  	Rate per $100 of Value
		
	GL/PL	  	Rate per Resident Capacity, by State, Bed Type, and Loss Experience
		
	Excess Liability	  	Rate per Resident Capacity
		
	Automobile	  	Rate per Vehicle
		
	Crime	  	Rate per Facility Employee/Payroll
		
	California Earthquake	  	Allocated to facilities based on Risk of Zone
		
	Flood	  	Allocated to facilities based on Risk of Zone
		
	Workers’ Compensation	  	Rate per $100 of Facility Payroll by State, Class Code, and Loss Experience
		
	Employment Practices Liability	  	Rate per Payroll

  
  

E-2 

 Article III Financial Responsibility 

Section 3.01 For those lines of coverage to which a policy deductible or self-insured retention applies, each Facility will be responsible for the
cost of a portion of the deductible or self-insured retention based on the projected ultimate loss estimate. The projected ultimate loss estimate will be derived using a third party actuarial analysis of Manager’s loss experience and other
external factors, including but not limited to, inflation and increased litigation. 
 Within the projected ultimate loss estimate, each
Facility will be responsible for a deductible of up to $25,000 per occurrence or the amount of the per occurrence deductible or self-insured retention under the insurance policy, if less (the “Facility deductible”). Manager reserves the
right to adjust the Facility deductible by line of insurance coverage for certain high-risk jurisdictions. Such Facility deductible will be paid as a Facility expense as the Manager pays losses for the occurrence, up to the Facility deductible
limit. 
 Section 3.02 In the event that any of the required insurance placements are provided on a claims made basis, the Manager will
provide an extended reporting period coverage or “tail”, reasonably available in the commercial insurance market for each such coverage or coverages, but in no event less than two years after the expiration of such coverage. The cost of
such tail coverage will be treated as a Facility Expense. 
 Section 3.03 Upon Termination or sale of Facility by Owner, an escrow fund in
an amount reasonably acceptable to the Manager shall be established from the proceeds of Gross Revenues (or, if such Gross Revenues are not sufficient, with funds provided by the Owner) to cover the amount of any Facility deductible and all other
cost and expense which shall eventually have to be paid by either the Owner or Manager with respect to pending or contingent claims, including those that arise after Termination from causes arising during the Term of this Agreement. Upon the final
disposition of all such pending or contingent claims, any unexpected funds remaining in such escrow shall be paid to Owner. Operating Profit for the final Fiscal Year shall be recalculated as a result of any claims paid and Manager and Owner shall
each pay to the other such amounts as may be required as a result of such adjustment. 

  
  

E-3

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