Document:

Advisory Agreement

 Exhibit 10.1 

 
 ADVISORY AGREEMENT 

between 
 KBS
STRATEGIC OPPORTUNITY REIT, INC. 
 and 
 KBS CAPITAL ADVISORS LLC 
 October 8, 2012 

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
		
	 ARTICLE 1 - DEFINITIONS
	  	 	1	  
	 ARTICLE 2 - APPOINTMENT
	  	 	9	  
	 ARTICLE 3 - DUTIES OF THE ADVISOR
	  	 	9	  
	 3.01 Organizational and Offering Services
	  	 	9	  
	 3.02 Acquisition Services
	  	 	10	  
	 3.03 Asset Management Services
	  	 	10	  
	 3.04 Stockholder Services
	  	 	13	  
	 3.05 Other Services
	  	 	13	  
	 ARTICLE 4 - AUTHORITY OF ADVISOR
	  	 	14	  
	 4.01 General
	  	 	14	  
	 4.02 Powers of the Advisor
	  	 	14	  
	 4.03 Approval by the Board
	  	 	14	  
	 4.04 Modification or Revocation of Authority of Advisor
	  	 	14	  
	 ARTICLE 5 - BANK ACCOUNTS
	  	 	14	  
	 ARTICLE 6 – RECORDS AND FINANCIAL STATEMENTS
	  	 	15	  
	 ARTICLE 7 - LIMITATION ON ACTIVITIES
	  	 	15	  
	 ARTICLE 8 - FEES
	  	 	16	  
	 8.01 Acquisition Fees
	  	 	16	  
	 8.02 Asset Management Fees
	  	 	16	  
	 8.03 Disposition Fees
	  	 	17	  
	 8.04 Subscription Processing Fee
	  	 	18	  
	 8.05 Subordinated Share of Cash Flows
	  	 	18	  
	 8.06 Subordinated Incentive Fee
	  	 	19	  
	 8.07 Changes to Fee Structure
	  	 	19	  
	 ARTICLE 9 - EXPENSES
	  	 	19	  
	 9.01 General
	  	 	19	  
	 9.02 Timing of and Limitations on Reimbursements
	  	 	21	  
	 ARTICLE 10 – VOTING AGREEMENT
	  	 	22	  
	 ARTICLE 11 - RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR
	  	 	22	  
	 11.01 Relationship
	  	 	22	  
	 11.02 Time Commitment
	  	 	22	  
	 11.03 Investment Opportunities and Allocation
	  	 	23	  
	 ARTICLE 12 - THE KBS NAME
	  	 	23	  
	 ARTICLE 13 - TERM AND TERMINATION OF THE AGREEMENT
	  	 	23	  
	 13.01 Term
	  	 	23	  
	 13.02 Termination by Either Party
	  	 	24	  
	 13.03 Payments on Termination and Survival of Certain Rights and Obligations
	  	 	24	  
	 ARTICLE 14 - ASSIGNMENT
	  	 	24	  
	 ARTICLE 15 - INDEMNIFICATION AND LIMITATION OF LIABILITY
	  	 	25	  
	 15.01 Indemnification
	  	 	25	  

  
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	 15.02 Limitation on Indemnification
	  	 	25	  
	 15.03 Limitation on Payment of Expenses
	  	 	26	  
	 ARTICLE 16 - MISCELLANEOUS
	  	 	26	  
	 16.01 Notices
	  	 	26	  
	 16.02 Modification
	  	 	26	  
	 16.03 Severability
	  	 	26	  
	 16.04 Construction
	  	 	27	  
	 16.05 Entire Agreement
	  	 	27	  
	 16.06 Waiver
	  	 	27	  
	 16.07 Gender
	  	 	27	  
	 16.08 Titles Not to Affect Interpretation
	  	 	27	  
	 16.09 Counterparts
	  	 	27	  

  
 ii 

 ADVISORY AGREEMENT 
 This Advisory Agreement, dated as of October 8, 2012 (the “Agreement”), is between KBS Strategic Opportunity REIT, Inc., a Maryland corporation (the “Company”), and KBS Capital
Advisors LLC, a Delaware limited liability company (the “Advisor”). 
 W I T N E S S E T H 

WHEREAS, the Company desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain
facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the board of directors of the Company (the “Board”), all as
provided herein; and 
 WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the
Board, on the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows: 
 ARTICLE 1 

DEFINITIONS 

The following defined terms used in this Agreement shall have the meanings specified below: 

“Acquisition Expenses” means any and all expenses, excluding the fee payable to the Advisor pursuant to Section 8.01,
incurred by the Company, the Advisor or any Affiliate of either in connection with the selection, acquisition or development of any property, loan or other potential investment, whether or not acquired or originated, as applicable, including,
without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and
miscellaneous expenses related to the selection, acquisition or development of any property, loan or other potential investment. 
 “Acquisition Fees” means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person in
connection with making or investing in any Property, Loan or other Permitted Investment or the purchase, development or construction of any Property by the Company. Included in the computation of such fees or commissions shall be any real estate
commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated. Excluded shall be Development Fees and Construction Fees paid to Persons not

  
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Affiliated with the Advisor in connection with the actual development and construction of a Property. 
 “Advisor” means (i) KBS Capital Advisors LLC, a Delaware limited liability company, or (ii) any successor advisor to the Company. 

“Affiliate or Affiliated” An Affiliate of another Person includes any of the following: (i) any Person directly or
indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to vote 10% or more of the outstanding voting securities of such other
Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or
held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be deemed to control or be under common control with an Advisor-sponsored program
unless (i) the entity owns 10% or more of the voting equity interests of such program or (ii) a majority of the board of directors (or equivalent governing body) of such program is composed of Affiliates of the entity. 

“Appraised Value” means the value according to an appraisal made by an Independent Appraiser. 

“Asset Management Fee” shall have the meaning set forth in Section 8.02. 

“Average Invested Assets” means, for a specified period, the average of the aggregate book value of the assets of the Company
invested, directly or indirectly, in Properties, Loans and other Permitted Investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of such values at the end
of each month during such period. 
 “Board” means the board of directors of the Company, as of any particular time.

 “Bylaws” means the bylaws of the Company, as amended from time to time. 

“Cash from Financings” means the net cash proceeds realized by the Company from the financing of Properties, Loans or other
Permitted Investments or from the refinancing of any Company indebtedness (after deduction of all expenses incurred in connection therewith). 
 “Cash from Sales and Settlements” means the net cash proceeds realized by the Company (i) from the sale, exchange or other disposition of any of its assets or any portion thereof after
deduction of all expenses incurred in connection therewith and (ii) from the prepayment, maturity, workout or other settlement of any Loan or Permitted Investment or portion thereof after deduction of all expenses incurred in connection
therewith. In the case of a transaction described in clause (i) (C) of the definition of “Sale” and (i)(B) of the definition of “Settlement,” Cash from Sales and Settlements means the proceeds of any such transaction
actually distributed to the Company from the 

  
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Joint Venture or partnership. Cash from Sales and Settlements shall not include Cash from Financings. 
 “Cash from Sales, Settlements and Financings” means the total sum of Cash from Sales and Settlements and Cash from Financings. 

“Charter” means the articles of incorporation of the Company, as amended from time to time. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to
any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time. 

“Company” means KBS Strategic Opportunity REIT, Inc., a corporation organized under the laws of the State of Maryland.

 “Competitive Real Estate Commission” means a real estate or brokerage commission for the purchase or sale of
property that is reasonable, customary, and competitive in light of the size, type, and location of the property. 

“Conflicts Committee” shall have the meaning set forth in the Company’s Charter. 

“Construction Fee” means a fee or other remuneration for acting as general contractor and/or construction manager to construct
improvements, supervise and coordinate projects or to provide major repairs or rehabilitation on a Property. 
 “Contract
Sales Price” means the total consideration received by the Company for the sale of a Property, Loan or other Permitted Investment. 
 “Cost of Loans and other Permitted Investments” means the sum of the cost of all Loans and Permitted Investments held, directly or indirectly, by the Company, calculated each month on an ongoing
basis, and calculated as follows for each investment: the lesser of (i) the amount actually paid or allocated to acquire or fund the Loan or Permitted Investment (inclusive of fees and expenses related thereto and the amount of any debt
associated with or used to acquire or fund such investment) and (ii) the outstanding principal amount of such Loan or Permitted Investment (plus the fees and expenses related to the acquisition or funding of such investment), as of the time of
calculation. With respect to any Loan or Permitted Investment held by the Company through a Joint Venture or partnership of which it is, directly or indirectly, a partner, such amount shall be the Company’s proportionate share thereof.

 “Cost of Real Estate Investments” means the sum of (i) with respect to Properties wholly owned, directly or
indirectly, by the Company, the amount actually paid or allocated to the purchase, development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt

  
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attributable to such Properties and (ii) in the case of Properties owned by any Joint Venture or partnership in which the Company or the Partnership is, directly or indirectly, a partner,
the portion of the amount actually paid or allocated to the purchase, development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt associated with such Properties
that is attributable to the Company’s investment in the Joint Venture or partnership. 
 “Dealer Manager” means
(i) KBS Capital Markets Group LLC, a Delaware limited liability company, or (ii) any successor dealer manager to the Company. 
 “Development Fee” means a fee for the packaging of a Property, including negotiating and approving plans, and undertaking to assist in obtaining zoning and necessary variances and necessary
financing for the Property, either initially or at a later date. 
 “Director” means a member of the board of
directors of the Company. 
 “Disposition Fee” shall have the meaning set forth in Section 8.03. 

“Distributions” means any distributions of money or other property by the Company to owners of Shares, including distributions
that may constitute a return of capital for federal income tax purposes. 
 “GAAP” means accounting principals
generally accepted in the United States. 
 “Gross Proceeds” means the aggregate purchase price of all Shares sold for
the account of the Company through an Offering, without deduction for Organization and Offering Expenses. 
 “Independent
Appraiser” means a person or entity with no material current or prior business or personal relationship with the Advisor or the Directors, who is engaged to a substantial extent in the business of rendering opinions regarding the value of
assets of the type held by the Company, and who is a qualified appraiser of real estate as determined by the Board. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers (M.A.I.) or the
Society of Real Estate Appraisers (S.R.E.A.) shall be conclusive evidence of such qualification. 
 “Initial Public
Offering” means the initial public offering of Shares registered on Registration Statement No. 333-156633 on Form S-11. 
 “Invested Capital” means the amount calculated by multiplying the total number of Shares purchased by Stockholders by the issue price, reduced by any amounts paid by the Company to repurchase
Shares pursuant to the Company’s plan for redemption of Shares. 
 “Joint Venture” means any joint venture,
limited liability company or other Affiliate of the Company that owns, in whole or in part, on behalf of the Company any Properties, Loans or other Permitted Investments. 

  
 4 

 “Listed” or “Listing” shall have the meaning set forth in the
Company’s Charter. 
 “Loans” means mortgage loans and other types of debt financing investments made by the
Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, including, without limitation, mezzanine loans, B-notes, bridge loans, convertible mortgages, wraparound mortgage
loans, construction mortgage loans, loans on leasehold interests, and participations in such loans. 
 “Market Value”
shall have the meaning set forth in Section 8.06. 
 “NASAA Guidelines” means the NASAA Statement of Policy
Regarding Real Estate Investment Trusts as in effect on the date hereof. 
 “Net Income” means, for any period, the
total revenues applicable to such period, less the total expenses applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating
total allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the Company’s assets. 

“Offering” means any offering of Shares that is registered with the SEC, excluding Shares offered under any employee benefit
plan. 
 “Operating Cash Flow” means Operating Revenue Cash Flows minus the sum of (i) Operating Expenses,
(ii) all principal and interest payments on indebtedness and other sums paid to lenders, (iii) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing,
registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (iv) taxes, (v) incentive fees paid in compliance with Section
IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate interests, loans
or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. 

“Operating Expenses” means all costs and expenses incurred by the Company, as determined under GAAP, that in any way are
related to the operation of the Company or to Company business, including fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage,
listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes,
(iv) non-cash expenditures such as depreciation, amortization and bad loan reserves, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate
commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate 

  
 5 

 
interests, loans or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance,
repair and improvement of property. 
 “Operating Revenue Cash Flows” means the Company’s cash flow from
ownership and/or operation of (i) Properties, (ii) Loans, (iii) Permitted Investments, (iv) short-term investments, and (v) interests in Properties, Loans and Permitted Investments owned by any Joint Venture or any
partnership in which the Company or the Partnership is, directly or indirectly, a partner. 
 “Organization and Offering
Expenses” means all expenses incurred by or on behalf of the Company in connection with or preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether incurred before or after the date
of this Agreement, which may include but are not limited to, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to the underwriter or any
reimbursement of expenses of the underwriter by the Company; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and
experts; and expenses of qualification of the sale of the securities under Federal and State laws, including taxes and fees, accountants’ and attorneys’ fees. 
 “Partnership” means KBS Strategic Opportunity Limited Partnership, a Delaware limited partnership formed to own and operate Properties, Loans and other Permitted Investments on behalf of the
Company. 
 “Permitted Investments” means all investments (other than Properties and Loans) in which the Company may
acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, pursuant to its Charter, Bylaws and the investment objectives and policies adopted by the Board from time to time, other
than short-term investments acquired for purposes of cash management. 
 “Person” means an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the
Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political subdivision thereof, and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 
 “Property” means any real
property or properties transferred or conveyed to the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership. 

“Property Manager” means an entity that has been retained to perform and carry out at one or more of the Properties
property-management services, excluding persons, entities or independent contractors retained or hired to perform facility management or 

  
 6 

 
other services or tasks at a particular Property, the costs for which are passed through to and ultimately paid by the tenant at such Property. 

“Registration Statement” means the registration statement filed by the Company with the SEC on Form S-11 (Reg.
No. 333-156633), as amended from time to time, in connection with the Initial Public Offering. 
 “REIT” means a
“real estate investment trust” under Sections 856 through 860 of the Code. 
 “Sale” means any transaction
or series of transactions whereby: (A) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including the transfer of any
Property that is the subject of a ground lease, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by
one of the Company’s subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction; (B) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its
ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture or any partnership in which it is a partner; or (C) any Joint Venture or any partnership in which the Company or the Partnership is a
partner, sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to
insurance claims or condemnation awards, and including the issuance by such Joint Venture or any partnership or one of its subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction.

 “SEC” means the United States Securities and Exchange Commission. 

“Settlement” means the prepayment, maturity, workout or other settlement of any Loan or other Permitted Investment or portion
thereof owned, directly or indirectly, by (A) the Company or the Partnership or (B) any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner. 

“Shares” means shares of common stock of the Company, par value $.01 per share. 

“Stockholders” means the registered holders of the Shares. 

“Stockholders’ 7% Return” means, as of any date, an aggregate amount equal to a 7% cumulative, non-compounded, annual
return on Invested Capital (calculated like simple interest on a daily basis based on a three hundred sixty-five day year). For purposes of calculating the Stockholders’ 7% Return, Invested Capital shall be determined for each day during the
period for which the Stockholders’ 7% Return is being calculated and shall be calculated net of (1) Distributions of Operating Cash Flow to the extent such Distributions of Operating Cash Flow provide a cumulative, non-compounded, annual
return in excess of 7%, as such amounts are computed on a daily 

  
 7 

 
basis based on a three hundred sixty-five day year and (2) Distributions of Cash from Sales, Settlements and Financings, except to the extent such Distributions would be required to
supplement Distributions of Operating Cash Flow in order to achieve a cumulative, non-compounded, annual return of 7%, as such amounts are computed on a daily basis based on a three hundred sixty-five day year. 

“Subordinated Incentive Fee” means the fee payable to the Advisor under certain circumstances if the Shares are Listed, as
calculated in Section 8.06. 
 “Subordinated Incentive Fee Threshold” has the meaning set forth in
Section 8.06. 
 “Subordinated Performance Fee Due Upon Termination” means a fee payable in the form of an
interest bearing promissory note (the “Performance Fee Note”) in a principal amount equal to (1) 15% of the amount, if any, by which (a) the Appraised Value of the Company’s Properties at the Termination Date, less amounts
of all indebtedness secured by the Company’s Properties, plus the fair market value of all other Loans and Permitted Investments of the Company at the Termination Date, less amounts of indebtedness related to such Loans and Permitted
Investments, plus total Distributions (excluding any stock dividend) through the Termination Date exceeds (b) the sum of Invested Capital plus total Distributions required to be made to the stockholders in order to pay the Stockholders’ 7%
Return from inception through the Termination Date less (2) any prior payment to the Advisor of a Subordinated Share of Cash Flows (the amount calculated under (b) is the “Termination Fee Threshold”). Interest on the Performance
Fee Note will accrue beginning on the Termination Date at a rate deemed fair and reasonable by the Conflicts Committee. The Company shall repay the Performance Fee Note at such time as the Company completes the first Sale or Settlement after the
Termination Date using Cash from Sales and Settlements. If the Cash from Sales and Settlements from the first Sale or Settlement after the Termination Date is insufficient to pay the Performance Fee Note in full, including accrued interest, then the
Performance Fee Note shall be paid in part from the Cash from Sales and Settlements from the first Sale or Settlement, and in part from the Cash from Sales and Settlements from each successive Sale or Settlement until the Performance Fee Note is
repaid in full, with interest. If the Performance Fee Note has not been paid in full within five years from the Termination Date, then the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid
interest, into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of such election if the Shares are Listed at such time. If the Shares are not Listed at such time,
the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the fair market value for the Shares as determined by the Board based upon the
Appraised Value of Company’s Properties on the date of election plus the fair market value of all other Loans and Permitted Investments of the Company on the date of election. 

“Subordinated Share of Cash Flows” has the meaning set forth in Section 8.05. 

  
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 “Subordinated Share of Cash Flows Threshold” has the meaning set forth in
Section 8.05. 
 “Subscription Processing Fee” has the meaning set forth in Section 8.04. 

“Termination Date” means the date of termination of the Agreement determined in accordance with Article 13 hereof. 

“Termination Fee Threshold” has the meaning set forth in the definition of Subordinated Performance Fee Due Upon Termination.

 “2%/25% Guidelines” means the requirement pursuant to the NASAA Guidelines that, in any period of four consecutive
fiscal quarters, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month period. 

ARTICLE 2 

APPOINTMENT 

The Company hereby appoints the Advisor to serve as its advisor and asset manager on the terms and conditions set forth in this
Agreement, and the Advisor hereby accepts such appointment. 
 ARTICLE 3 

DUTIES OF THE ADVISOR 
 The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets. The Advisor undertakes to use its best efforts to present to
the Company potential investment opportunities, to make investment decisions on behalf of the Company subject to the limitations in the Company’s Charter, the direction and oversight of the Board and Section 4.03 hereof, and to provide the
Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. Subject to the limitations set forth in this Agreement,
including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging an Affiliate or third party, perform the following duties: 

3.01 Organizational and Offering Services. The Advisor shall perform all services related to the organization of the Company or any
Offering or private sale of the Company’s securities, other than services that (i) are to be performed by the Dealer Manager, (ii) the Company elects to perform directly or (iii) would require the Advisor to register as a
broker-dealer with the SEC or any state. 

  
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 3.02 Acquisition Services. 

(i) Serve as the Company’s investment and financial advisor and provide relevant market research and economic and
statistical data in connection with the Company’s assets and investment objectives and policies; 
 (ii)
Subject to Section 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which
investments in Properties, Loans and other Permitted Investments will be made; (c) acquire, originate and dispose of Properties, Loans and other Permitted Investments on behalf of the Company; (d) arrange for financing and refinancing and
make other changes in the asset or capital structure of investments in Properties, Loans and other Permitted Investments; and (e) enter into leases, service contracts and other agreements for Properties, Loans and other Permitted Investments;

 (iii) Perform due diligence on prospective investments and create due diligence reports summarizing the
results of such work; 
 (iv) With respect to prospective investments presented to the Board, prepare reports
regarding such prospective investments that include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments; 

(v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of
contemplated investments of the Company; 
 (vi) Deliver to or maintain on behalf of the Company copies of all
appraisals obtained in connection with the Company’s investments; and 
 (vii) Negotiate and execute
approved investments and other transactions, including prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments. 
 3.03 Asset Management Services. 
 (i) Real Estate and Related
Services: 
 (a) Investigate, select and, on behalf of the Company, engage and conduct business with (including
enter contracts with) such Persons as the Advisor deems necessary to the proper performance of its obligations as set forth in this Agreement, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers,
underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, Property Managers and any and all Persons acting in any other capacity

  
 10 

 
deemed by the Advisor necessary or desirable for the performance of any of the foregoing services; 
 (b) Negotiate and service the Company’s debt facilities and other financings; 
 (c) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of investments of the Company; 

(d) Monitor and evaluate the performance of each asset of the Company and the Company’s overall portfolio of
assets, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s investments; 

(e) Formulate and oversee the implementation of strategies for the administration, promotion, management, operation,
maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Properties, Loans and other Permitted Investments on an overall portfolio basis; 

(f) Consult with the Company’s officers and the Board and assist the Board in the formulation and implementation of
the Company’s financial policies, and, as necessary with respect to investment and borrowing opportunities presented to the Board, furnish the Board with advice and recommendations with respect to the making of investments consistent with the
investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company; 
 (g) Oversee the performance by the Property Managers of their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance; 

(h) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the
Properties to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers; 
 (i) Review, analyze and comment upon the operating budgets, capital budgets and leasing plans prepared and submitted by each Property Manager and aggregate these property budgets into the Company’s
overall budget; 
 (j) Coordinate and manage relationships between the Company and any Joint Venture partners;
and 

  
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 (k) Consult with the Company’s officers and the Board and provide
assistance with the evaluation and approval of potential asset disposition, sale and refinancing opportunities that are presented to the Board. 
 (ii) Accounting and Other Administrative Services: 
 (a) Provide
the day-to-day management of the Company and perform and supervise the various administrative functions reasonably necessary for the management of the Company; 

(b) From time to time, or at any time reasonably requested by the Board, make reports to the Board on the Advisor’s
performance of services to the Company under this Agreement; 
 (c) Make reports to the Conflicts Committee
each quarter of the investments that have been made by other programs sponsored by the Advisor or any of its Affiliates, including KBS Realty Advisors LLC, as well as any investments that have been made by the Advisor or any of its Affiliates
directly; 
 (d) Provide or arrange for any administrative services and items, legal and other services, office
space, office furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations; 
 (e) Provide financial and operational planning services; 
 (f)
Maintain accounting and other record-keeping functions at the Company and investment levels, including information concerning the activities of the Company as shall be required to prepare and to file all periodic financial reports, tax returns and
any other information required to be filed with the SEC, the Internal Revenue Service and any other regulatory agency; 
 (g) Maintain and preserve all appropriate books and records of the Company; 
 (h) Provide tax and compliance services and coordinate with appropriate third parties, including the Company’s independent auditors and other consultants, on related tax matters; 

(i) Provide the Company with all necessary cash management services; 

(j) Manage and coordinate with the transfer agent the dividend process and payments to Stockholders; 

  
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 (k) Consult with the Company’s officers and the Board and assist the
Board in evaluating and obtaining adequate insurance coverage based upon risk management determinations; 
 (l)
Provide the Company’s officers and the Board with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited to compliance with the
Sarbanes-Oxley Act of 2002; 
 (m) Consult with the Company’s officers and the Board relating to the
corporate governance structure and appropriate policies and procedures related thereto; 
 (n) Perform all
reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law, including federal and state securities laws and the Sarbanes-Oxley Act of 2002; 

(o) Notify the Board of all proposed material transactions before they are completed; and 

(p) Do all things necessary to assure its ability to render the services described in this Agreement. 

3.04 Stockholder Services. 
 (i) Manage services for and communications with Stockholders, including answering phone calls, preparing and sending written and electronic reports and other communications; 

(ii) Oversee the performance of the transfer agent and registrar; 

(iii) Establish technology infrastructure to assist in providing Stockholder support and service; and 

(iv) Consistent with Section 3.01, the Advisor shall perform the various subscription processing services reasonably
necessary for the admission of new Stockholders. 
 3.05 Other Services. Except as provided in Article 7, the Advisor shall
perform any other services reasonably requested by the Company (acting through the Conflicts Committee). 

  
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 ARTICLE 4 
 AUTHORITY OF ADVISOR 
 4.01 General. All rights and powers to manage and control
the day-to-day business and affairs of the Company shall be vested in the Advisor. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers,
employees, Affiliates, agents and representatives of the Advisor or the Company as it may deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the Advisor
specifically set forth in this Agreement or the Charter. 
 4.02 Powers of the Advisor. Subject to the express limitations set
forth in this Agreement and the continuing and exclusive authority of the Board over the management of the Company, the power to direct the management, operation and policies of the Company, including making, financing and disposing of investments,
shall be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and
enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement. 

4.03 Approval by the Board. Notwithstanding the foregoing, the Advisor may not take any action on behalf of the Company without the prior
approval of the Board or duly authorized committees thereof if the Charter or Maryland General Corporation Law require the prior approval of the Board. If the Board or a committee of the Board must approve a proposed investment, financing or
disposition or chooses to do so, the Advisor will deliver to the Board or committee, as applicable, all documents required by it to evaluate such investment, financing or disposition. 

4.04 Modification or Revocation of Authority of Advisor. The Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority or approvals set forth in Article 3 and this Article 4 hereof; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to
which the Advisor has committed the Company prior to the date of receipt by the Advisor of such notification. 
 ARTICLE 5

 BANK ACCOUNTS 
 The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or in the name of the Company and may collect and deposit into any such account or accounts,
and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the funds of the

  
 14 

 
Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company. 

ARTICLE 6 

RECORDS AND FINANCIAL STATEMENTS 
 The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with GAAP, which shall be
supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company and shall be available for inspection by the Board and by counsel,
auditors and other authorized agents of the Company, at any time or from time to time during normal business hours. Such books and records shall include all information necessary to calculate and audit the fees or reimbursements paid under this
Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the Company’s assets from theft, error or fraudulent activity. All financial
statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial reports that by their nature require a deviation from GAAP. The Advisor shall liaise with the
Company’s officers and independent auditors and shall provide such officers and auditors with the reports and other information that the Company so requests. 
 ARTICLE 7 
 LIMITATION ON ACTIVITIES 

Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action that, in its sole judgment made in
good faith, would (i) adversely affect the ability of the Company to qualify or continue to qualify as a REIT under the Code, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended, (iii) violate
any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Shares or its other securities, (iv) require the Advisor to register as a broker-dealer with the SEC or any state, or
(v) violate the Charter or Bylaws. In the event an action that would violate (i) through (v) of the preceding sentence but such action has been ordered by the Board, the Advisor shall notify the Board of the Advisor’s judgment of
the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in accordance with the specific
instructions of the Board so given. 

  
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 ARTICLE 8 
 FEES 
 8.01 Acquisition Fees. As compensation for the investigation, selection,
sourcing and acquisition or origination (by purchase, investment or exchange) of Properties, Loans and other Permitted Investments, the Company shall pay an Acquisition Fee to the Advisor for each such investment (whether an acquisition or
origination). With respect to the acquisition or origination of a Property, Loan or other Permitted Investment to be wholly owned, directly or indirectly, by the Company, the Acquisition Fee payable to the Advisor shall equal 1.0% of the sum of the
amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property, Loan or other
Permitted Investment and the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment. With respect to the acquisition or origination of a Property, Loan or other Permitted Investment
through any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner, the Acquisition Fee payable to the Advisor shall equal 1.0% of the portion of the amount actually paid or allocated to fund
the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property, Loan or other Permitted Investment, plus the amount of
any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment that is attributable to the Company’s investment in such Joint Venture or partnership. Notwithstanding anything herein to the
contrary, the payment of Acquisition Fees by the Company shall be subject to the limitations on Acquisition Fees contained in (and defined in) the Company’s Charter. The Advisor shall submit an invoice to the Company following the closing or
closings of each acquisition or origination, accompanied by a computation of the Acquisition Fee. Generally, the Acquisition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company.
However, the Acquisition Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Acquisition Fees not taken as to any fiscal year shall be deferred without interest and may be
paid in such other fiscal year as the Advisor shall determine. 
 8.02 Asset Management Fees. 

(i) Except as provided in Section 8.02(ii) hereof, the Company shall pay the Advisor as compensation for the
services described in Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 0.75% of the sum of the Cost of Real Estate Investments and the Cost of Loans and other Permitted Investments.
The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the Asset Management Fee for the applicable period. Generally, the Asset Management Fee payable to the Advisor shall be paid on the last day of such month, or
the first business day following the last day of such month. However, the Asset Management Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the 

  
 16 

 
Advisor. All or any portion of the Asset Management Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall
determine. 
 (ii) Notwithstanding anything contained in Section 8.02(i) to the contrary, a Property, Loan
or other Permitted Investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances may either be excluded from the calculation of the Cost of Real Estate Investments or the Cost of Loans and other
Permitted Investments or included in such calculation at a reduced value that is recommended by the Advisor and the Company’s management and then approved by a majority of the Company’s independent directors, and the resulting change in
the Asset Management Fee with respect to such an investment will be applicable upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a Person other than the Company, its direct
or indirect wholly owned subsidiary or a Joint Venture or partnership in which the Company has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or (iv) the
Advisor recommends a revised fee arrangement with respect to such investment. 
 8.03 Disposition Fees. If the Advisor or any of
its Affiliates provide a substantial amount of services (as determined by the Conflicts Committee) in connection with a Sale, the Advisor or such Affiliate shall receive a fee at the closing (the “Disposition Fee”) equal to 1% of the
Contract Sales Price; provided, however, that if in connection with such Sale commissions are paid to third parties other than the Advisor or its Affiliates, the fee paid to the Advisor or any of its Affiliates may not exceed the commissions paid to
such unaffiliated third parties; and provided further that no Disposition Fee shall be payable to the Advisor for any Sale if such Sale involves the Company selling all or substantially all of its assets in one or more transactions designed to
effectuate a business combination transaction (as opposed to a Company liquidation, in which case the Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount of services as provided above). The payment of any
Disposition Fees by the Company shall be subject to the limitations contained in the Company’s Charter. Any Disposition Fee payable under this Section 8.03 may be paid in addition to commissions paid to non-Affiliates, provided that the
total commissions (including such Disposition Fee) paid to all Persons by the Company for each Sale shall not exceed an amount equal to the lesser of (i) 6% of the aggregate Contract Sales Price of each Property, Loan or other Permitted
Investment or (ii) the Competitive Real Estate Commission for each Property, Loan or other Permitted Investment. The Advisor shall submit an invoice to the Company following the closing or closings of each disposition, accompanied by a
computation of the Disposition Fee. Generally, the Disposition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Disposition Fee may or may not be taken, in whole or
in part, as to any year in the sole discretion of the Advisor. All or any portion of the Disposition Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine.

  
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 8.04 Subscription Processing Fee. The Company shall pay the Advisor as compensation for the
services described in Section 3.04(iv) hereof a monthly fee (the “Subscription Processing Fee”) in an amount equal to $35 per subscription agreement for Shares received and processed by the Advisor. The Advisor shall submit a monthly
invoice to the Company, accompanied by a computation of the total amount of the Subscription Processing Fee for the applicable period. Generally, the Subscription Processing Fee payable to the Advisor shall be paid on the last day of such month, or
the first business day following the last day of such month. However, the Subscription Processing Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subscription
Processing Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. The Subscription Processing Fee is an Organization and Offering Expense of the Company and
is subject to the limitations on Organization and Offering Expenses in Article 9 hereof. 
 8.05 Subordinated Share of Cash
Flows. The Subordinated Share of Cash Flows shall be payable to the Advisor in an amount equal to 15% of Operating Cash Flow and Cash from Sales, Settlements and Financings remaining after the Stockholders have received Distributions of Operating
Cash Flow and of Cash from Sales, Settlements and Financings such that the owners of all outstanding Shares have received Distributions in an aggregate amount equal to the sum of: 

 

	 	a.	the Stockholders’ 7% Return and 

	 	b.	Invested Capital. 

 When determining whether the
above threshold (the “Subordinated Share of Cash Flows Threshold”) has been met: 
  

	 	(A)	Any stock dividend shall not be included as a Distribution; and 

  

	 	(B)	Distributions paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a Distribution.

 Following Listing, no Subordinated Share of Cash Flows will be paid to the Advisor. 

If the Subordinated Share of Cash Flows is payable to the Advisor, the Advisor shall submit a monthly invoice to the Company, accompanied by a
computation of the total amount of the Subordinated Share of Cash Flows for the applicable period. Generally, the Subordinated Share of Cash Flows payable to the Advisor shall be paid on the last day of such month, or the first business day
following the last day of such month. However, the Subordinated Share of Cash Flows may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subordinated Share of Cash Flows not
taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 

  
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 8.06 Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to the
Subordinated Incentive Fee in an amount equal to 15% of the amount by which (i) the market value of the outstanding Shares of the Company, measured by taking the average closing price or the average of the bid and asked price, as the case may
be, over a period of 30 days during which the Shares are traded, with such period beginning 180 days after Listing (the “Market Value”), plus the total of all Distributions paid to Stockholders (excluding any stock dividends) from the
Company’s inception until the date that Market Value is determined, exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the
Stockholders’ 7% Return from inception through the date Market Value is determined (the sum of (A) and (B) is the “Subordinated Incentive Fee Threshold”). The Company shall have the option to pay such fee in the form of
cash, Shares, a promissory note or any combination of the foregoing. The Subordinated Incentive Fee will be reduced by the amount of any prior payment to the Advisor of a Subordinated Share of Cash Flows. In the event the Subordinated Incentive Fee
is paid to the Advisor following Listing, no other performance fee will be paid to the Advisor. In addition, the Subordinated Incentive Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or
any portion of the Subordinated Incentive Fee not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 

8.07 Changes to Fee Structure. The Advisor and the Company shall not agree to reduce the Subordinated Share of Cash Flows Threshold, the
Subordinated Incentive Fee Threshold or the Termination Fee Threshold without the approval of Stockholders holding a majority of the Shares. In the event of Listing, the Company and the Advisor shall negotiate in good faith to establish a fee
structure appropriate for a perpetual-life entity. 
 ARTICLE 9 

EXPENSES 
 9.01
General. In addition to the compensation paid to the Advisor pursuant to Article 8 hereof, the Company shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its Affiliates on behalf of the Company or
in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to: 
 (i) All Organization and Offering Expenses; provided, however, that the Company shall not reimburse the Advisor to the extent such reimbursement would cause the total amount spent by the Company on
Organization and Offering Expenses to exceed 15% of the Gross Proceeds raised as of the date of the reimbursement and provided further that within 60 days after the end of the month in which an Offering terminates, the Advisor shall reimburse the
Company to the extent the Company incurred Organization and Offering Expenses exceeding 15% of the Gross Proceeds raised in the completed Offering; the 

  
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Company shall not reimburse the Advisor for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company, and the Advisor shall reimburse the Company for
any Organization and Offering Expenses that are not fair and commercially reasonable to the Company; 
 (ii)
Acquisition Fees and Acquisition Expenses incurred in connection with the selection and acquisition of Properties, Loans and other Permitted Investments, including such expenses incurred related to assets pursued or considered but not ultimately
acquired by the Company, provided that, notwithstanding anything herein to the contrary, the payment of Acquisition Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Charter; 

(iii) The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not Affiliated
with the Advisor; 
 (iv) Interest and other costs for borrowed money, including discounts, points and other
similar fees; 
 (v) Taxes and assessments on income or Properties, taxes as an expense of doing business and
any other taxes otherwise imposed on the Company and its business, assets or income; 
 (vi) Out-of-pocket costs
associated with insurance required in connection with the business of the Company or by its officers and Directors; 
 (vii) Expenses of managing, improving, developing, operating and selling Properties, Loans and other Permitted Investments owned, directly or indirectly, by the Company, as well as expenses of other
transactions relating to such Properties, Loans and other Permitted Investments, including but not limited to prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments; 

(viii) All out-of-pocket expenses in connection with payments to the Board and meetings of the Board and Stockholders;

 (ix) Personnel and related employment costs incurred by the Advisor or its Affiliates in performing the
services described in Article 3 hereof, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services, provided that, other than reimbursement of travel and
communications expenses, no reimbursement shall be made for compensation of such employees of the Advisor or its Affiliates to the extent that such employees perform services for which the Advisor receives Acquisition Fees or Disposition Fees;

 (x) Out-of-pocket expenses of providing services for and maintaining communications with Stockholders,
including the cost of preparation, printing, 

  
 20 

 
and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities; 

(xi) Audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company
and all such fees incurred at the request, or on behalf of, the Board, the Conflicts Committee or any other committee of the Board; 
 (xii) Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances; 
 (xiii) Expenses connected with payments of Distributions made or caused to be made by the Company to the Stockholders; 

(xiv) Expenses of organizing, redomesticating, merging, liquidating or dissolving the Company or of amending the Charter
or the Bylaws; and 
 (xv) All other out-of-pocket costs incurred by the Advisor in performing its duties
hereunder. 
 9.02 Timing of and Additional Limitations on Reimbursements. 

(i) Expenses incurred by the Advisor on behalf of the Company and reimbursable pursuant to this Article 9 shall be
reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company during each quarter and shall deliver such statement to the Company within 45 days after the end of each quarter.

 (ii) Notwithstanding anything else in this Article 9 to the contrary, the expenses enumerated in this Article
9 shall not become reimbursable to the Advisor unless and until the Company has raised $2.5 million in the Initial Public Offering. 
 (iii) Commencing upon the earlier to occur of four fiscal quarters after (i) the Company’s making of its first investment or (ii) six months after commencement of the Initial Public
Offering, the following limitation on Operating Expenses shall apply: The Company shall not reimburse the Advisor at the end of any fiscal quarter for Operating Expenses that in the four consecutive fiscal quarters then ended (the “Expense
Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year unless the Conflicts Committee determines that such excess was justified, based on
unusual and nonrecurring factors that the Conflicts Committee deems sufficient. If the Conflicts Committee does not approve such excess as being so justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the
Company. If the Conflicts Committee determines such excess was justified, then, within 60 days after the end of any fiscal quarter of the Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the
Advisor, at the direction of 

  
 21 

 
the Conflicts Committee, shall cause such fact to be disclosed to the Stockholders in writing (or the Company shall disclose such fact to the Stockholders in the next quarterly report of the
Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Conflicts Committee considered in determining that such excess expenses were justified. The Company
will ensure that such determination will be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be determined in accordance with GAAP applied on a consistent basis. 

ARTICLE 10 

VOTING AGREEMENT 

The Advisor agrees that, with respect to any Shares now or hereinafter owned by it, the Advisor will not vote or consent on matters
submitted to the stockholders of the Company regarding (i) the removal of the Advisor or any Affiliate of the Advisor, (ii) any transaction between the Company and the Advisor or any of its Affiliates, (iii) the election of directors
of the Company or (iv) the approval or termination of any contract with the Advisor or any Affiliate of the Advisor. This voting restriction shall survive until such time that the Advisor is both no longer serving as such and is no longer an
Affiliate of the Company. 
 ARTICLE 11 
 RELATIONSHIP OF ADVISOR AND COMPANY; 
 OTHER ACTIVITIES OF THE ADVISOR 

11.01 Relationship. The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall
be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the
management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee or equityholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein.
The Advisor shall promptly disclose to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or could create a conflict of interest between the Advisor’s obligations to the
Company and its obligations to or its interest in any other Person. 
 11.02 Time Commitment. The Advisor shall, and shall cause
its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an

  
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appropriate manner consistent with the terms of this Agreement. The Company acknowledges that the Advisor and its Affiliates and their respective employees, officers and agents may also engage in
activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates. 

11.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable efforts to present a
continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular
investment opportunity to the Company even if the opportunity is of character that, if presented to the Company, could be taken by the Company. In the event an investment opportunity is located, the allocation procedure set forth under the caption
“Conflicts of Interest – Certain Conflict Resolution Measures – Allocation of Investment Opportunities” in the Registration Statement shall govern the allocation of the opportunity among the Company and Affiliates of the Advisor.

 ARTICLE 12 
 THE KBS NAME 
 The Advisor and its Affiliates have a proprietary interest in the
name “KBS.” The Advisor hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “KBS” during the term of this Agreement. Accordingly, and in recognition of
this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after receipt of written request from the Advisor, cease to conduct business under
or use the name “KBS” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “KBS” or any other word or words that might, in the
reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks or other
marks necessary to remove any references to the word “KBS.” Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise
permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “KBS” as a part of their name, all without the need for any consent (and without the right to
object thereto) by the Company. 
 ARTICLE 13 
 TERM AND TERMINATION OF THE AGREEMENT 
 13.01 Term. This Agreement shall have an
initial term of one year from the date hereof and may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. The Company (acting through the Conflicts Committee)

  
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will evaluate the performance of the Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no more than one year. Any such renewal must be approved by the
Conflicts Committee. 
 13.02 Termination by Either Party. This Agreement may be terminated upon 60 days written notice without
cause or penalty by either the Company (acting through the Conflicts Committee) or the Advisor. The provisions of Articles 1, 10, 12, 13, 15 and 16 shall survive termination of this Agreement. 

13.03 Payments on Termination and Survival of Certain Rights and Obligations. Payments to the Advisor pursuant to this Section 13.03
shall be subject to the 2%/25% Guidelines to the extent applicable. 
 (i) After the Termination Date, the
Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination (A) all unpaid reimbursements of expenses and all
earned but unpaid fees payable to the Advisor prior to termination of this Agreement and (B) the Subordinated Performance Fee Due Upon Termination, provided that no Subordinated Performance Fee Due Upon Termination will be paid if the Company
has paid or is obligated to pay the Subordinated Incentive Fee. 
 (ii) The Advisor shall promptly upon
termination: 
 (a) pay over to the Company all money collected pursuant to this Agreement, if any, after
deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; 
 (b)
deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board; 

(c) deliver to the Board all assets and documents of the Company then in the custody of the Advisor; and 

(d) cooperate with the Company to provide an orderly transition of advisory functions. 

ARTICLE 14 

ASSIGNMENT 

This Agreement may be assigned by the Advisor to an Affiliate with the consent of the Conflicts Committee. The Advisor may assign any
rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company without the consent of the Advisor,

  
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except in the case of an assignment by the Company to a corporation or other organization that is a successor to all of the assets, rights and obligations of the Company, in which case such
successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement. 
 ARTICLE 15 
 INDEMNIFICATION AND LIMITATION OF LIABILITY 

15.01 Indemnification. Except as prohibited by the restrictions provided in this Section 15.01, Section 15.02 and
Section 15.03, the Company shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective officers, directors, equity holders, partners and employees, from all liability, claims, damages or losses arising
in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance. Any indemnification of
the Advisor may be made only out of the net assets of the Company and not from Stockholders. 
 Notwithstanding the foregoing,
the Company shall not indemnify the Advisor or its Affiliates for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met:
(i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should
be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to
indemnification for violations of securities laws. 
 15.02 Limitation on Indemnification. Notwithstanding the foregoing, the
Company shall not provide for indemnification of the Advisor or its Affiliates for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Company, unless all of the following
conditions are met: 
 (i) The Advisor or its Affiliates have determined, in good faith, that the course of
conduct that caused the loss or liability was in the best interests of the Company. 
 (ii) The Advisor or its
Affiliates were acting on behalf of or performing services for the Company. 
 (iii) Such liability or loss was
not the result of negligence or misconduct by the Advisor or its Affiliates. 

  
 25 

 15.03 Limitation on Payment of Expenses. The Company shall pay or reimburse reasonable legal
expenses and other costs incurred by the Advisor or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by the Maryland General Corporation Law, as amended from time to time) all of the
following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (b) the legal proceeding was initiated by a third party who is not a stockholder or,
if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) the Advisor or its Affiliates undertake to repay the amount paid or reimbursed by the Company, together with the
applicable legal rate of interest thereon, if it is ultimately determined that the particular indemnitee is not entitled to indemnification. 
 ARTICLE 16 
 MISCELLANEOUS 

16.01 Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some
other method of giving such notice, report or other communication is required by the Charter, the Bylaws or is accepted by the party to whom it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery
service to the addresses set forth herein: 
 To the Company or the Board: 

KBS Strategic Opportunity REIT, Inc. 
 620 Newport Center Drive, Suite 1300 
 Newport Beach, California 92660 

To the Advisor: 
 KBS Capital Advisors LLC 
 620 Newport Center Drive, Suite 1300 

Newport Beach, California 92660 
 Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 16.01. 

16.02 Modification. This Agreement shall not be changed, modified, terminated or discharged, in whole or in part, except by an instrument
in writing signed by both parties hereto, or their respective successors or permitted assigns, and any change or modification to this Agreement must be in accordance with Section 8.07 hereof, to the extent applicable. 

16.03 Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected
or rendered invalid or 

  
 26 

 
unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 

16.04 Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of
Delaware. 
 16.05 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 

16.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by
the party asserted to have granted such waiver. 
 16.07 Gender. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 16.08 Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used
in the construction or interpretation hereof. 
 16.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. 
 [The remainder of this page is intentionally left blank. 
 Signature page
follows.] 

  
 27 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written. 
  
  

							
	KBS STRATEGIC OPPORTUNITY REIT, INC.
		
	  By:	 	/s/ David E. Snyder
		 	David E. Snyder, Chief Financial Officer
	
	KBS CAPITAL ADVISORS LLC
		
	  By:	 	  PBren Investments, L.P., a Manager
			
		 	  By:	 	  PBren Investments, LLC, as general partner
				
		 		 	  By:	 	/s/ Peter M. Bren
		 		 		 	Peter M. Bren, Manager
		
	  By:	 	  Schreiber Real Estate Investments, L.P., a Manager
			
		 	  By:	 	  Schreiber Investments, LLC, as general partner
				
		 		 	  By:	 	/s/ Charles J. Schreiber
		 		 		 	Charles J. Schreiber, Jr., Manager

  
 28Loan Agreement

 EXHIBIT 10.54 

 
  

 
 LOAN AGREEMENT 

(Senior Loan) 
 BY 
 AND BETWEEN 

CAMERON PARK SENIOR LIVING DELAWARE, LLC, 
 a Delaware limited liability company 
 (“Borrower”)

 AND 
 KBS FINANCE LLC, 
 a Delaware limited liability company 

(As “Agent” and a “Lender”) 
 AND 
 the Other Lenders Now or 

Hereafter Parties Hereto 

 TABLE OF CONTENTS 

 

									
	 	  	 	  	Page	 
			
	 1.
	  	Recitals	  	 	1	  
			
	 2.
	  	Definitions	  	 	1	  
			
	 3.
	  	The Loan; Disbursement of Loan; Establishment of Accounts	  	 	12	  
				
		  	(a)	    	Loan	  	 	12	  
		  	(b)	    	Loan Disbursements	  	 	12	  
		  	(c)	    	Interest Shortfall Reserve Account	  	 	12	  
		  	(d)	    	No Reborrowings	  	 	13	  
		  	(e)	    	Accounts	  	 	14	  
			
	 4.
	  	Interest Payments; Default Interest Rate; Loan Fee; Prepayment; Stated Maturity	  	 	14	  
				
		  	(a)	    	Interest	  	 	14	  
		  	(b)	    	Default Interest Rate	  	 	14	  
		  	(c)	    	Loan Fee	  	 	14	  
		  	(d)	    	Prepayment	  	 	14	  
		  	(e)	    	Stated Maturity	  	 	14	  
			
	 5.
	  	Security for Loan; Guaranty	  	 	15	  
				
		  	(a)	    	Security for Loan	  	 	15	  
		  	(b)	    	Guaranty	  	 	15	  
			
	 6.
	  	Conditions Precedent to Closing of the Loan	  	 	15	  
				
		  	(a)	    	Loan Documents	  	 	15	  
		  	(b)	    	Third Party Agreements	  	 	16	  
		  	(c)	    	Financial Statements	  	 	16	  
		  	(d)	    	Insurance Policies	  	 	16	  
		  	(e)	    	Leases	  	 	16	  
		  	(f)	    	Title Insurance Policy. The Title Policy referred to in Section 7(a) hereof	  	 	17	  
		  	(g)	    	ALTA Survey	  	 	17	  
		  	(h)	    	Zoning; Conditional Use Permits and Certificates of Occupancy	  	 	17	  
		  	(i)	    	Flood Plain Certification	  	 	17	  
		  	(j)	    	Appraisal	  	 	17	  
		  	(k)	    	Soils Report	  	 	17	  
		  	(l)	    	Engineering Report	  	 	17	  
		  	(m)	    	Environmental Report	  	 	17	  

  
 i 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	  	 	  	Page	 
				
		  	(n)	    	Borrower Authority	  	 	18	  
		  	(o)	    	Legal Opinion	  	 	18	  
		  	(p)	    	UCC and Lien Searches	  	 	19	  
		  	(q)	    	Utilities	  	 	19	  
		  	(r)	    	Environmental Disclosure	  	 	19	  
		  	(s)	    	Permits	  	 	19	  
		  	(t)	    	Initial Net Operating Income	  	 	19	  
		  	(u)	    	Additional Matters	  	 	19	  
			
	 7.
	  	Title Insurance	  	 	20	  
				
		  	(a)	    	Title Insurance	  	 	20	  
			
	 8.
	  	Insurance	  	 	20	  
				
		  	(a)	    	Insurance Requirements	  	 	20	  
		  	(b)	    	Automatic Reinstatement	  	 	22	  
		  	(c)	    	Other Requirements With Respect to Insurance	  	 	23	  
		  	(d)	    	Insurance Review	  	 	25	  
		  	(e)	    	Notice of Casualty	  	 	26	  
		  	(f)	    	Settlement of Claim	  	 	26	  
		  	(g)	    	Application of Insurance Proceeds	  	 	26	  
			
	 9.
	  	Eminent Domain	  	 	27	  
				
		  	(a)	    	Notice of Condemnation	  	 	27	  
		  	(b)	    	Settlement of Claim	  	 	27	  
		  	(c)	    	Application of Condemnation Awards	  	 	27	  
		  	(d)	    	No Lender Obligation	  	 	28	  
			
	 10.
	  	Rights of Access and Inspection	  	 	28	  
			
	 11.
	  	Financial Reports, Property Reports and Annual Budget	  	 	28	  
				
		  	(a)	    	Annual Financial Reports	  	 	28	  
		  	(b)	    	Monthly Reports	  	 	28	  
		  	(c)	    	Preparation and Certification	  	 	30	  
		  	(d)	    	Annual Budget	  	 	30	  
		  	(e)	    	Right to Audit	  	 	30	  
			
	 12.
	  	General Covenants of Borrower	  	 	30	  
				
		  	(a)	    	Operation and Maintenance of Property	  	 	31	  
		  	(b)	    	Restricted Sale and Encumbrance of Property and of Borrower Interests; Other Indebtedness	  	 	32	  

  
 ii 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	  	 	    	 	  	Page	 
				
		  	(c)	    	General Indemnity	  	 	32	  
		  	(d)	    	Leases	  	 	32	  
		  	(e)	    	Notices	  	 	34	  
		  	(f)	    	Property Management	  	 	34	  
		  	(g)	    	General ERISA Covenant	  	 	35	  
		  	(h)	    	Principal Place of Business; Choice of Law	  	 	35	  
		  	(i)	    	Compliance with Governmental Prohibitions	  	 	35	  
		  	(j)	    	No Distributions	  	 	35	  
		  	(k)	    	Patriot Act Compliance	  	 	36	  
		  	(l)	    	Partial Satisfaction	  	 	36	  
		  	(m)	    	Property Manager	  	 	37	  
		  	(n)	    	Assumption in Non-Consolidation Opinion	  	 	37	  
		  	(o)	    	Operating Covenants	  	 	37	  
			
	13.	  	Further Assurances	  	 	37	  
			
	14.	  	Appraisals	  	 	37	  
			
	15.	  	General Representations and Warranties of Borrower	  	 	38	  
				
		  	(a)	    	Organization; Corporate Powers; Authorization of Borrowing	  	 	38	  
		  	(b)	    	Title to Property; Matters Affecting Property	  	 	40	  
		  	(c)	    	Financial Statements	  	 	41	  
		  	(d)	    	No Loan Broker	  	 	41	  
		  	(e)	    	No Default	  	 	41	  
		  	(f)	    	Lawful Interest	  	 	42	  
		  	(g)	    	RICO	  	 	42	  
		  	(h)	    	ERISA	  	 	42	  
		  	(i)	    	Business Purpose	  	 	42	  
		  	(j)	    	Solvency	  	 	42	  
		  	(k)	    	Adequate Capitalization	  	 	42	  
		  	(l)	    	Violations of Governmental Prohibitions	  	 	42	  
		  	(m)	    	No Separate Insurance	  	 	43	  
		  	(n)	    	Federal Reserve Regulations; Investment Company Act	  	 	43	  
		  	(o)	    	No Other Indebtedness	  	 	43	  
		  	(p)	    	Recycled Entity Representations	  	 	43	  
		  	(q)	    	Third Party Agreements	  	 	44	  
		  	(r)	    	Accounts	  	 	44	  
		  	(s)	    	Management Agreements	  	 	44	  
		  	(t)	    	Furniture and Equipment	  	 	45	  
		  	(u)	    	Employees	  	 	45	  
		  	(v)	    	Seniors Housing Facility	  	 	45	  

  
 iii

 TABLE OF CONTENTS 

(continued) 
  

									
	 	  	 	    	 	  	Page	 
				
		  	(w)	    	Litigation, Claims and Proceedings	  	 	47	  
			
	16.	  	Event of Default	  	 	48	  
				
		  	(a)	    	Events of Default	  	 	48	  
		  	(b)	    	Right to Cure Non-Monetary Default	  	 	51	  
			
	17.	  	Remedies	  	 	52	  
				
		  	(a)	    	Actions upon Event of Default	  	 	52	  
		  	(b)	    	Appointment of Agent as Attorney-in-Fact	  	 	52	  
		  	(c)	    	Cross-Default to Note and Other Loan Documents	  	 	53	  
		  	(d)	    	After an Event of Default	  	 	53	  
		  	(e)	    	In order to induce Lender	  	 	53	  
			
	18.	  	Joint and Several Liability	  	 	53	  
			
	19.	  	Title Endorsements; Tax Searches; Administrative Costs	  	 	53	  
			
	20.	  	Miscellaneous	  	 	54	  
				
		  	(a)	    	Notices	  	 	54	  
		  	(b)	    	Waivers	  	 	56	  
		  	(c)	    	Agent’s Expenses; Rights of Lenders	  	 	56	  
		  	(d)	    	Agent and Lenders Not Partner of Borrower; Borrower in Control	  	 	56	  
		  	(e)	    	No Third Party	  	 	57	  
		  	(f)	    	Time of Essence; Context	  	 	57	  
		  	(g)	    	Successors and Assigns	  	 	57	  
		  	(h)	    	Governing Jurisdiction	  	 	57	  
		  	(i)	    	Entire Agreement	  	 	57	  
		  	(j)	    	Headings	  	 	58	  
		  	(k)	    	Severability	  	 	58	  
		  	(l)	    	Counterparts	  	 	58	  
		  	(m)	    	Waiver of Jury Trial	  	 	58	  
		  	(n)	    	Including Means Without Limitation	  	 	58	  
		  	(o)	    	Sole and Absolute Discretion	  	 	58	  
		  	(p)	    	Replacement Notes	  	 	58	  
			
	21.	  	Borrower Exculpation	  	 	59	  
				
		  	(a)	    	Borrower’s Recourse Liabilities	  	 	59	  
		  	(b)	    	Full Liability for all Indebtedness	  	 	60	  
		  	(c)	    	The provisions of this Section 21	  	 	61	  

  
 iv 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	  	 	    	 	  	Page	 
			
	22.	  	Intentionally Omitted	  	 	61	  
			
	23.	  	Special Representations, Warranties and Covenants of Borrower	  	 	61	  
			
	24.	  	No Withholdings	  	 	61	  
			
	25.	  	Agreement Among Lenders And Agent	  	 	62	  
				
		  	(a)	    	Agent	  	 	62	  
		  	(b)	    	Agent’s Authority and Powers; Required Lender Approvals	  	 	63	  
		  	(c)	    	Defaulting Lenders	  	 	66	  
		  	(d)	    	Non-Reliance on Agent and Other Lenders	  	 	67	  
		  	(e)	    	Collections; Disbursements To Lenders	  	 	68	  
		  	(f)	    	Borrower’s Default	  	 	69	  
		  	(g)	    	Retention of Counsel	  	 	71	  
		  	(h)	    	Interest In Loan Documents	  	 	71	  
		  	(i)	    	Bookkeeping Entries	  	 	72	  
		  	(j)	    	Information and Copies to Lenders	  	 	72	  
		  	(k)	    	Reimbursement for Costs and Expenses	  	 	73	  
		  	(l)	    	Payments Received Directly by Lenders	  	 	74	  
		  	(m)	    	Borrower not a Beneficiary or Party	  	 	74	  
		  	(n)	    	Indemnification	  	 	74	  
		  	(o)	    	Exculpation of Agent	  	 	75	  
		  	(p)	    	Authorization and Enforceability Representations	  	 	75	  
		  	(q)	    	Assignment by Lenders	  	 	75	  
		  	(r)	    	Other Transactions between Lenders and Borrower	  	 	75	  
		  	(s)	    	Effect of Agreement and Relationship of Parties	  	 	75	  
			
	26.	  	Assignment by Lenders	  	 	76	  
				
		  	(a)	    	Loan Participations	  	 	76	  
		  	(b)	    	Loan Sale	  	 	76	  
		  	(c)	    	Pledge of Loan	  	 	77	  
			
	27.	  	Special Provisions	  	 	77	  
				
		  	(a)	    	Further Splits and Secondary Market Transactions	  	 	77	  
		  	(b)	    	Use of Information	  	 	78	  
		  	(c)	    	Borrower’s Obligations Regarding Disclosure Documents	  	 	79	  
		  	(d)	    	Borrower Indemnity Regarding Filings	  	 	79	  
		  	(e)	    	Indemnification Procedure	  	 	79	  
		  	(f)	    	Contribution	  	 	80	  
		  	(g)	    	Severance of Loan	  	 	80	  

  
 v 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	  	 	    	 	  	Page	 
				
		  	(h)	    	Retention of Servicer	  	 	81	  

  
 vi 

 LOAN AGREEMENT 

(Senior Loan) 
 THIS LOAN AGREEMENT (this “Agreement”) is made as of September 13, 2012, by and among (i) KBS FINANCE LLC, a Delaware limited liability company (hereinafter sometimes referred
to as “Agent” and sometimes as “KBS”), as a Lender and in its capacity as Agent for itself and for each of the other Lenders who are now or who hereafter become parties to this Agreement, (ii) each of the
Lenders, including Agent, named on the execution pages hereof and such other Lenders as may from time to time become a party to this Agreement pursuant to the terms hereof, and (iii) CAMERON PARK SENIOR LIVING DELAWARE, LLC, a Delaware limited
liability company (“Borrower”). 
 R E C I T A L S: 

This Agreement is made with reference to the following facts: 

(i)         Borrower is the owner in fee simple of the real property (the
“Real Property”) described on Exhibit A attached hereto and made a part hereof. The Real Property is improved by that certain 243,332 square foot, 239 unit retirement community, and all other improvements, fixtures,
machinery, furnishings, equipment and other property of any kind installed or used at the Real Property (collectively, the “Improvements”). The Real Property and the Improvements are sometimes collectively referred herein as the
“Property”. 
 (ii)         The Property is currently
being operated as a Seniors Housing Facility. 

(iii)        Borrower has applied to Agent for a loan (the
“Loan”) in the amount of Thirty Five Million Seven Hundred Fifty Thousand and No/100 Dollars ($35,750,000.00) (the “Loan Amount”), which Loan is to be advanced by Lenders as hereinafter provided and is to be
evidenced by the Note (defined below). The Note is to be secured by the Mortgage and the other collateral referred to in Section 5 below. 
 (iv)         Borrower desires to borrow the Loan Amount from Lenders, the proceeds of which are to be used by Borrower to, among other things, pay the costs and
expenses, if any, referred to in Section 3(b) below. 
 NOW, THEREFORE, in consideration of the
foregoing and the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 

1.           Recitals.   The recitals set forth above
are true and correct and are incorporated herein by reference. 

2.           Definitions.   The following terms shall
have the meanings set forth next to them: 

 “Accounts”:   shall mean the Restricted Account
(as defined in the Cash Management Agreement), the Clearing Account (as defined in the Clearing Account Agreement), the Interest Shortfall Reserve Account, and the Tax and Insurance Reserve Account (as each are defined in the Pledge and Assignment
of Reserve Accounts) and any other accounts required to be established under this Agreement or the Loan Documents. 
 “Account Agreements”:   shall mean the Cash Management Agreement, Clearing Account Agreement, the Deposit Account Control Agreement, the Depository Bank Agreement, the Pledge
and Assignment of Reserve Accounts and any other Loan Document which creates, grants a security interest in or purports to govern the Accounts. 
 “Actual Maturity”:   shall mean the date upon which the entire unpaid indebtedness evidenced by the Note becomes due and payable in accordance with the terms of the Note, this
Agreement or the other Loan Documents (whether at Stated Maturity, upon acceleration following an Event of Default, voluntary prepayment or otherwise). 
 “Advance” or “Advances”:   shall mean any disbursement of the proceeds of the Loan by Agent or Lenders pursuant to the terms of this Agreement. 

“Affiliate”:   shall mean with respect to a specified person or entity, any individual,
partnership, corporation, limited liability company, trust, unincorporated organization, association or other entity which, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such
person or entity, including, without limitation, any general or limited partnership in which such person or entity is a partner. 
 “Agent” means KBS or any other Person which is at the time in question serving as the agent under the terms of Section 25 hereof and the other Loan Documents. 

“Aggregate Commitment”: shall mean the aggregate Commitment of the Lenders. 

“Annual Budget”: shall have the meaning ascribed to it in Section 11(d). 

“Bankruptcy Code”:   shall mean 11 U.S.C. Section 101, et. seq. 

“Bankruptcy Proceedings”:     shall have the meaning set forth in
Section 16(a)(xii) hereof. 
 “Base Interest”: shall have the meaning ascribed to
it in the Note. 
 “Benefit Plan Investor”:     shall mean a benefit plan
investor as defined in paragraph (f)(2) of the Plan Asset Regulation. 
 “Borrower’s
Certificate”:   shall mean that certain Borrower’s Certificate, dated as of even date hereof, executed by Borrower for the benefit of Agent and the Lenders. 

  
 2 

 “Borrower’s Knowledge”:     shall
mean the actual knowledge of Erik N. Pilegaard, an individual. 
 “Borrower’s Recourse
Liabilities”:     shall have the meaning ascribed to it in Section 21(a). 
 “Business Day”: shall mean any day other than a Saturday, Sunday or any day on which commercial banks in New York, New York, are authorized or required to close. 

“Cash Management Agreement”:     shall mean that certain Cash Management Agreement,
dated as of even date hereof by and among Borrower and Agent, and joined by Manager. 
 “Clearing
Account”:  shall have the meaning ascribed to it in the Clearing Account Agreement. 

“Clearing Account Agreement”:  shall mean that certain Clearing Account Agreement, dated as of
even date hereof by and among Borrower and Agent. 
 “Closing Date”:  shall mean the
date of this Agreement. 
 “Code”: shall mean the Internal Revenue Code of 1986, as amended
from time to time, or the corresponding provisions of any successor Federal Income Tax Law. Any reference to a particular provision of the Code shall include any amendment of such provision or the corresponding provision of any successor Federal
Income Tax Law. 
 “Commitment”:   shall have the meaning given to it in
Section 3(a). 
 “Commitment Percentage”: Subject to
Section 25(c)(iii), with respect to each Lender, the percentage determined by the dividing (a) the Aggregate Commitment of such Lender, by (b) the Aggregate Commitment (or, if the Aggregate Commitment has terminated, the
percentage determined by dividing (a) the outstanding and unpaid Advances of such Lender, by (b) all outstanding and unpaid Advances). 
 “Condemnation Awards”:  shall have the meaning ascribed to it in Section 9(b). 

“Consent and Subordination of Manager”:    shall mean that certain Consent and
Subordination of Manager of even date herewith, by and among Borrower, Agent and Manager. 

“Control”:     as such term is used with respect to any person or entity, including
the correlative meanings of the terms “controlled by” and “under common control with”, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person or
entity, whether through the ownership of voting securities, by contract or otherwise. 
 “Default
Interest Rate”:   shall have the meaning ascribed to it in the Note. 

  
 3 

 “Defaulting Lender”: shall have the meaning
ascribed to it in Section 25(c). 
 “Deposit Account Control
Agreement”:     shall mean that certain Deposit Account Control Agreement, dated as of even date hereof by and among Borrower, Agent and Depository Bank. 

“Depository Bank Agreement”:   shall mean that certain Cash Management Agreement (Hard), dated
as of even date hereof by and among Borrower, Agent and Depository Bank. 
 “Depository Bank”:
shall mean Wells Fargo Bank or other financial institution selected by Borrower and approved by Agent to hold the Accounts as required under the Account Agreements. 

“Disclosure Document”: shall have the meaning ascribed to it in Section 27(b). 

“Encumbrance”:   shall mean any mortgage, deed of trust, lien (statutory or otherwise) pledge,
encumbrance, hypothecation or other grant of security interest, whether direct or indirect, voluntary or involuntary or by operation of law, and whether or not consented to by Agent and/or the Lenders of or in (i) all or any portion of, or
interest in, the Property, or (ii) any legal or beneficial ownership interest in Borrower or the Sole Member. 
 “Environmental Indemnity”:     shall mean that certain Unsecured Environmental Indemnity Agreement of even date herewith, on Agent’s form, executed by Borrower
and the Guarantors containing representations, warranties, covenants and indemnities in favor of Agent, as agent for the Lenders with respect to Hazardous Substances. 

“Event of Default”:   shall have the meaning ascribed to it in Section 16.

 “Exchange Act”: shall have the meaning ascribed to it in Section 27(b).

 “Existing Loan”: shall have the meaning ascribed to it in Section 15(p).

 “Expenses”:   shall mean, for the Property and each month, all costs and expenses,
calculated on a cash basis, required to be paid during such month by or on behalf of the related Borrower in connection with the ownership and operation of the Property in accordance with the Annual Budget. 

“Fax”: shall have the meaning ascribed to it in Section 20(a). 

“Forbearance Termination Event”: shall have the meaning given to it in Section 21(b) below.

 “Full Replacement Cost”: shall have the meaning ascribed to it in
Section 8(a)(i). 
 “GAAP”: shall mean the generally accepted accounting principles
in the United States of America as of the date of the applicable financial report, consistently applied. 

  
 4 

 “Governing Jurisdiction”: shall mean the State of
California. 
 “Government Lists”: shall have the meaning ascribed to it in
Section 12(k). 
 “Governmental Authority”: shall mean board, commission,
department or body or any municipal or county, state or Federal government unit, or any subdivision of any of them. 
 “Gross Receipts”: shall mean all revenue derived from the ownership and operation of the Property from whatever source, including, but not limited to, Rents and license fees, but
excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, non-recurring revenues as determined or approved by Agent, payments received by Borrower under any interest
rate protection agreement pertaining to the Loan, security deposits (except to the extent such security deposits are properly utilized to offset a loss of rent), refunds and uncollectible accounts, proceeds of casualty insurance (other than business
interruption or other loss of income insurance related to business interruption or loss of income for the period in question), Condemnation Awards. 
 “Guarantor” or “Guarantors”: shall mean Erik N. Pilegaard, an individual. 
 “Guaranty”: shall mean (i) that certain Guaranty of Non-Recourse Carveouts, dated as of even date herewith, from the Guarantor to Agent for the benefit of itself and the other
Lenders, as the same may be amended, modified or restated from time to time, and (ii) that certain Limited Repayment Guaranty, dated as of even date herewith, from the Guarantor to Agent for the benefit of itself and the other Lenders, as the
same may be amended, modified or restated from time to time. 
 “Hazardous
Substances”:   shall have the meaning ascribed to it in the Environmental Indemnity. 

“Improvements”:   shall have the meaning ascribed to it in the Recitals above. 

“Indebtedness”: shall mean the principal of, interest on, and any other amounts due at any time under,
this Agreement, the Note, the Mortgage or any other Loan Document, including prepayment premiums, late charges, default interest, and advances to protect the lien and security interest of the Mortgage thereunder. 

“Indemnified Parties”: shall have the meaning ascribed to it in Section 12(c). 

“Initial Disbursement”: shall have the meaning ascribed to it in Section 3(b)(i).

 “Insolvency Laws”: shall mean the Bankruptcy Code and any and all present and future
federal, state and local laws, ordinances, regulations, rules and any other requirements of any Governmental Authority relating to the bankruptcy, insolvency, appointment of receiver, reorganization, arrangement, readjustment of debt, dissolution or
liquidation of, for or relating to, any Person, each as hereafter amended from time to time and the present and future rules, regulations and guidance documents promulgated under any of the foregoing. 

  
 5 

 “Insurance Premiums”: shall mean the insurance premiums
payable by Borrower with respect to the insurance policies that Borrower is required to maintain pursuant to Section 8 of this Agreement (the “Policies”). 

“Interest Shortfall Reserve Account”: shall have the meaning ascribed to it in the Pledge and Assignment
of Reserve Account. 
 “Issuer”: shall have the meaning ascribed to it in Section
27(c). 
 “Law” or “Laws”: shall have the meaning ascribed to it in
Section 15(l). 
 “Lease” or “Leases”: shall mean all leases,
subleases, licenses, residency agreements, (including any associated admission and care agreements) occupancy agreements, concessions or other arrangements, whether written or oral, whether now existing or entered into at any time hereafter in
accordance with the terms of Section 12(d) hereof, whereby any person agrees to pay money or any other consideration for the use, possession or occupancy of, or any estate in, all or any part of the Property, each as the same may be
amended, modified and restated from time to time in accordance with Section 12(d) hereof. 

“Lender”:   shall mean KBS and any other Person that is a signatory hereto under the caption
“Lenders” on the signature pages hereto and any other Person which hereafter becomes a party hereto as a “Lender” pursuant to the terms of Section 25(a) each in their individual capacity, and Lenders means KBS
and each such other Person. 
 “Liabilities”: shall have the meaning ascribed to it in
Section 27(c). 
 “Loan”: shall have the meaning ascribed to it in the Recitals above.

 “Loan Amount”: shall have the meaning ascribed to it in the Recitals above. 

“Loan Documents”: shall mean this Agreement, the Note, the Mortgage, the other documents listed in
Section 6(a) below, and all other documents evidencing, securing or pertaining to the Loan, each as the same may hereafter be amended, modified and restated from time to time. 

“Loan Fee”: shall mean the non-refundable fee described in Section 4(c) below. 

“Loan Year”: shall mean each full calendar year during the Term of this Loan plus the partial calendar
years at the commencement and termination of such Term. 
 “Losses”: shall have the meaning
ascribed to it in Section 21(a). 
 “Management Agreement”: shall mean that certain
Management Agreement dated November 1, 2010, and amended on February 29, 2012, entered into by and between Manager and Cameron Park Senior Living, LLC, a California limited liability company (and assigned to Borrower pursuant to
that certain Assignment of Management Agreement, dated as of 

  
 6 

 
September 7, 2012), pursuant to which Manager has agreed to manage the operations of the Property, as the same may be amended, modified or restated from time to time, or any other property
management agreement approved by Agent pursuant to Section 12(f) hereof. 

“Manager”: shall mean Integral Senior Living, LLC, a California limited liability company, or any other
property manager approved by Agent pursuant to Section 12(f) hereof. 
 “Material Adverse
Effect”: shall mean the occurrence or existence of a condition or event which would have a material adverse effect on (i) the business, profits, operations or financial condition of Borrower, including the inability to operate the
Property as a Seniors Housing Facility, (ii) the ability of Borrower to pay any amounts under the Loan Documents as they become due or (iii) the value of the Property. 

“Mezzanine Loan”:     shall mean any mezzanine loan made after the date hereof by
Mezzanine Lender to Mezzanine Borrower, and evidenced and secured by the Mezzanine Loan Documents. 

“Mezzanine Borrower”: shall mean the Sole Member. 

“Mezzanine Loan Documents”: shall mean all documents evidencing, securing or pertaining to the Mezzanine
Loan, each as may be amended, modified and restated from time to time in accordance with the terms and conditions of the applicable intercreditor agreement between Agent and Mezzanine Lender (the “Intercreditor Agreement”)

 “Mezzanine Lender”: shall mean KBS Finance LLC, a Delaware limited liability company (in its
capacity as a lender and as agent for other mezzanine lenders), and their respective successors and/or assigns. 

“Mortgage”:     shall mean that certain Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing of even date herewith, on Agent’s form, executed by Borrower and encumbering the Property. 
 “Net Operating Income”: shall mean for any period the “in place” net operating income of the Property determined by Agent in accordance with GAAP. 

“Note”: any individual promissory note of Borrower payable to the order of Agent, as agent for Lenders,
or to a Lender, as applicable, and evidencing all or a portion of the Loan, and “Notes” means all of the Notes, collectively; together with any renewals, extensions or modifications thereof and substitutions therefor. To the extent
that at any time there is only one Note in effect, all references in this Agreement and the other Loan Documents to the “Notes” shall be deemed to refer to such single Note. 

“Note Rate”: shall have the meaning ascribed to it in the Note. 

“OFAC”: shall have the meaning ascribed to it in Section 12(k). 

  
 7 

 “Patriot Act”: shall have the meaning ascribed to it in
Section 12(k). 
 “Patriot Act Offense”: shall have the meaning ascribed to it in
Section 12(k). 
 “Payment Date”: shall mean the first of every calendar month (or
if any such date is not a Business Day, the first Business Day immediately following such date). 

“Permitted Exceptions”: shall have the meaning ascribed to it in the Mortgage. 

“Permits” shall mean any operating licenses, certificates of occupancy, health department licenses, food
service licenses, certificates of need, business licenses, permits, registrations, certificates, authorizations, approvals, and similar documents required by applicable laws and regulations for the operation of the Property as a Seniors Housing
Facility, including replacement and additions thereto.” 
 “Person”: shall mean any
individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in
such capacity on behalf of any of the foregoing. 
 “Plan Asset Regulation”: shall mean the
regulation published by the Department of Labor at 29 C.F.R. § 2510.3-101. 
 “Pledge and
Assignment of Reserve Accounts”: shall mean that certain Pledge and Assignment of Reserve Accounts, dated as of even date herewith, by and among Borrower, and Agent, as agent for the Lenders. 

“PML”: shall have the meaning ascribed to it in Section 8(a)(vi). 

“Property”: shall mean the Real Property and the Improvements. 

“Provided Information”: shall have the meaning ascribed to it in Section 27(a). 

“Rating Agency”: shall mean each of Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), and Fitch, Inc., a division of Fitch Ratings Ltd. (“Fitch”) or any other nationally-recognized statistical rating
organization to the extent any of the foregoing have been engaged by Agent or its designee in connection with or in anticipation of any Secondary Market Transaction. 

“Real Property”: shall have the meaning ascribed to it in the Recitals above. 

“Registration Statement”: shall have the meaning ascribed to it in Section 27(c).

 “Rents”: shall mean all rents (whether from residential or non-residential space), revenues
and other income of the Property, including rent paid under any Lease, subsidy payments received from any sources (including but not limited to payments under any Housing 

  
 8 

 
Assistance Payments Contract), parking fees, laundry and vending machine income and fees and charges for food, healthcare, and other services provided at the Property, whether now due, past due,
or to become due, security deposits, entrance fees, application fees, processing fees, community fees and any other amounts or fees forfeited by any resident or tenant, together with and including all proceeds from any private insurance for
residents to cover rental charges and charges for services at or in connection with the Property, and the right to third party payments due for the rents or services of residents at the Property. 

“Restricted Account”: shall have the meaning ascribed to it in the Cash Management Agreement.

 “RICO”: shall have the meaning ascribed to it in Section 15(g). 

“RICO Related Laws”: shall have the meaning ascribed to it in Section 15(g). 

“Sale”: shall mean (i) any sale, conveyance, transfer, lease (of all or a substantial part of the
Property other than Leases and subleases made to tenants in compliance with Section 12(d) below) or assignment, or the entry into any agreement to sell, convey, transfer, lease (of all or a substantial part of the Property other than
Leases and subleases made to tenants in compliance with Section 12(d) below) or assign, whether by law or otherwise, of, on, in or affecting (x) all or part of the Property (including any legal or beneficial direct or indirect
interest therein but excluding Leases made to tenants of the Property in Borrower’s ordinary course of business and otherwise in compliance with Section 12(d) hereof), (y) any direct or indirect interest in Borrower (including
any profit interest), or (z) any direct or indirect interest in Sole Member or (ii) any change of Control of Borrower or Sole Member. 
 For purposes hereof: 

(i)           a Sale of an interest in Borrower or Sole Member
shall be deemed to include: 
 (A)       if Borrower or Sole Member or a
controlling shareholder of Borrower or Sole Member is a corporation, the voluntary or involuntary sale, conveyance or transfer of such corporation’s stock (or the stock of any corporation directly or indirectly controlling such corporation by
operation of law or otherwise) or the creation or issuance of new stock in one or a series of transactions by which an aggregate of more than ten percent (10%) of such corporation’s stock shall be vested in a party or parties who are not
now stockholders or any change in the Control of such corporation; and 

(B)       if Borrower, Sole Member or controlling shareholder of Borrower or Sole Member
is a limited or general partnership, joint venture or limited liability company, the change, removal, resignation or addition of a general partner, managing partner, limited partner, joint venturer or member or the transfer of the partnership
interest of any general partner, managing partner or limited partner or the transfer of the interest of any joint venturer or member; and 
 (ii)          a change of Control of Borrower or Sole Member shall be deemed to have occurred if: 

  
 9 

 (A)        there is any change in
the identity of any individual or entity or any group of individuals or entities who have the right, by virtue of any partnership agreement, articles of incorporation, by-laws, articles of organization, operating agreement or any other agreement,
with or without taking any formative action, to cause Borrower (or Sole Member) to take some action or to prevent, restrict or impede Borrower (or Sole Member) from taking some action which, in either case, Borrower (or Sole Member) could take or
could refrain from taking were it not for the rights of such individuals, or 

(B)        the individual or entity or group of individuals or entities that
Control Borrower (and Sole Member) as described in clause (A) ever cease to own at least fifty-one percent (51%) of all equity interests (direct or indirect) in Borrower (and Sole Member). 

Notwithstanding the foregoing, and so long as no Event of Default has occurred and is continuing hereunder or under any
of the other Loan Documents, the following transfer shall not be deemed to be a Sale and may be made without the consent of Agent or the Lenders: the transfer of up to 45% of the indirect ownership interests (in the aggregate) of Cameron Park Senior
Living, LLC, a California limited liability company (“CPSL”), provided that (A) Erik N. Pilegaard maintains Control of the Borrower, Sole Member and CPSL, (B) if such Sale would cause the transferee to increase its
direct or indirect interest in CPSL or in to an amount which equals or exceeds twenty percent (20%), Agent shall have approved in its reasonable discretion such proposed transferee which approval shall be solely based upon Agent’s satisfactory
determination as to the reputable character and creditworthiness of such proposed transferee, as evidenced by credit and background checks and Patriot Act searches performed by Agent as Agent determines are necessary and such other financial
statements and other information reasonably requested by Agent, (C) Borrower shall give Agent notice of such transfer together with copies of all instruments effecting such transfer not less than ten (10) days following the date of such
transfer, and (D) Borrower shall reimburse Agent for all actual and reasonable expenses incurred by Agent in connection with such transfer (including out-of-pocket attorneys’ fees and expenses). 

“Secondary Market Transaction”: shall have the meaning ascribed to it in Section 27(a).

 “Securities”: shall have the meaning ascribed to it in Section 27(a).

 “Securities Act”: shall have the meaning ascribed to it in Section 27(b).

 “Security Deposit Account”: shall have the meaning ascribed to it in
Section 12(d)(vii). 
 “Security Deposit Subaccount”:   shall have the
meaning ascribed to it in Section 12(d)(vii). 
 “SEL”: shall have the meaning
ascribed to it in Section 8(a)(vi). 
 “Seniors Housing Facility”: shall mean a
residential housing facility which qualifies as “housing for older persons” under the Fair Housing Amendments Act of 1988 and the Housing 

  
 10 

 
for Older Persons Act of 1995 comprised of independent living units, assisted living units and Alzheimer’s/dementia care units. 

“Servicer” shall mean any servicer selected by Agent to service the Loan, including any “master
servicer” or “special servicer” appointed under the terms of any pooling and servicing agreement or similar agreement entered into as a result of a Secondary Market Transaction. 

“Sole Member”: shall mean Cameron Park Senior Living Mezz, LLC, a Delaware limited liability company,
the sole member of Borrower. 
 “Special Purpose Bankruptcy Remote Entity”: shall have the
meaning ascribed to it in Section 23. 
 “Stated Maturity”: shall mean
October 1, 2015, subject to Borrower’s option to extend the Stated Maturity date pursuant to Section 4(f) hereof. 
 “Survey”: shall have the meaning ascribed to it in Section 6(g). 
 “Tax” or “Taxes”: shall mean any and all present or future taxes, levies, imposts, duties, deductions, filings, charges, withholdings or other fees imposed by any
Governmental Authority. 
 “Term”: shall mean the period beginning on the date of the Notes and
ending at Actual Maturity, at which time Borrower must pay the outstanding principal balance of the Loan and all accrued but unpaid interest thereon (including all Base Interest and all other amounts due under the Notes and the other Loan
Documents). 
 “Terrorism Laws”: shall have the meaning ascribed to it in
Section 15(l). 
 “Third Party Agreement”: shall have the meaning ascribed to it in
Section 1.14(a) of the Mortgage. 
 “Third Party Payments”: shall mean all payments
and the rights to receive such payments from Medicare programs or similar Federal, state and local programs, boards, bureaus or agencies, and from residents, private insurers or others. 

“Title Insurer”: shall mean Commonwealth Land Title Insurance Company or another nationally recognized,
creditworthy title insurance company licensed to do business in the state where the Real Property is located and otherwise acceptable to Agent. 
 “Title Policy”: shall have the meaning ascribed to it in Section 7(a). 
 “Underwriter”: shall have the meaning ascribed to it in Section 27(c). 
 “Underwriter Group”: shall have the meaning ascribed to it in Section 27(c). 

  
 11 

 3.           The Loan;
Disbursement of Loan; Establishment of Accounts. 

(a)        Loan. On the basis of the covenants, agreements and
representations of Borrower contained herein and subject to the terms and conditions hereinafter set forth, each Lender severally agrees to lend to Borrower and Borrower shall borrow from each Lender such Lender’s pro rata share of the Loan as
set forth on Exhibit B attached hereto (each Lender’s “Commitment”) the proceeds of which are to be disbursed by the Lenders in accordance with the provisions of Section 3(b) hereof. 

(b)        Loan Disbursements. Upon recordation of the Mortgage, provided
that the Title Insurer has issued or irrevocably committed in writing to issue to Agent, as agent for the Lenders the Title Policy (defined below), and subject to the satisfaction of the conditions set forth in Section 6 hereof, Lenders
shall disburse to or for the account of Borrower, or to the persons, firms or corporation entitled thereto the amounts set forth on the closing statement executed by Borrower and Agent on the Closing Date (the “Closing Statement”),
and Borrower hereby directs and authorizes each Lender to disburse its portion of the Loan in the following order of priority as follows: 
 (i)        Loan Fee. A sum sufficient to pay in full the unpaid portion of the Loan Fee described in Section 4(c) hereof shall be
disbursed to Agent or as Agent may so direct. 

(ii)        Lenders’ Costs and Expenses. A sum sufficient to
pay in full all of the costs, charges and expenses incurred by Agent and payable to Agent hereunder, including without limitation, cost and expenses incurred by Agent in connection with (1) the negotiation, execution and recordation of the Loan
Documents, (2) the delivery, execution and preparation of the items required to be delivered pursuant to Section 6 hereof, (3) the hiring and retention of any appraiser, engineer or other consultant, including without
limitation, performing due diligence or analysis for Agent, and (4) the making of the Loan and the transactions described in the Loan Documents. 
 (iii)      Repayment of Existing Loans. The amounts outstanding under the mortgages encumbering the Property; 

(iv)      Accounts. Such sums as may be required to fully fund the Accounts
pursuant to the terms of the Account Agreements; and 
 (v)      
Borrower’s Costs and Expenses. To the extent available funds remain, a sum sufficient to pay in full all of the costs, charges and expenses incurred by Borrower in connection with title charges and premiums, tax and lien service charges,
recording fees, escrow fees, recording and transfer taxes, insurance premiums, loan brokerage commissions, attorneys’ fees and any other closing costs and third-party costs as and to the extent reflected in the Closing Statement. 

(c)        Interest Shortfall Reserve Account. 

  
 12 

 (i)         Amount of Interest Shortfall
Reserve Account. An amount equal to Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) (the “Interest Shortfall Reserve Account”). 
 (ii)         Payments from Interest Shortfall Reserve Account. Funds in the Interest Shortfall Reserve Account shall be additional security for the
Loan. Except as may otherwise be agreed to in writing by Agent, in Agent’s sole and absolute discretion, Agent shall have no obligation to release, or permit the release of any funds from the Interest Shortfall Reserve Account even if the Gross
Receipts from the Property are insufficient to pay accrued Base Interest then due and payable under the Note. Notwithstanding the foregoing, subject to the satisfaction of the conditions set forth in Section 6 hereof and the performance
of the covenants set forth in Section 12 hereof (any of which such conditions and covenants may be waived by Agent in its sole discretion), and so long as there remain sufficient funds in the Interest Shortfall Reserve Account, upon
Borrower’s written request, Agent will disburse (or cause to be disbursed) an amount sufficient to pay the Base Interest and Deferred Interest, if applicable, then due and payable under the Note (the “Disbursed Interest Reserve
Amount”); provided, however, that within thirty (30) days after the date the Disbursed Interest Reserve Amount was disbursed from the Interest Shortfall Reserve Account, Borrower shall be obligated to re-deposit into the Interest
Shortfall Reserve Account an amount equal to the Disbursed Interest Reserve Amount such that the balance in the Interest Reserve Shortfall Account shall be equal to $250,000.00. Failure to re-deposit the Disbursed Interest Reserve Amount within
thirty (30) days in accordance with the foregoing sentence shall constitute a Borrower’s Recourse Liability pursuant to Section 21(b)(vi) hereof. 
 (iii)         Depletion of Interest Shortfall Reserve Account. The amount of any disbursement from the Interest Shortfall Reserve Account approved by
Lender pursuant to subsection (ii) above to pay accrued Base Interest and Deferred Interest, if applicable, shall reduce the balance of the Interest Shortfall Reserve Account. If and when the Interest Shortfall Reserve Account has been fully
disbursed, no further undisbursed amounts of the Loan will be disbursed to pay interest accrued on outstanding principal amounts of the Loan. Further, the depletion of the Interest Shortfall Reserve Account shall not in any manner affect or impair
Borrower’s obligation to continue to pay all interest accruing on the Loan. 
 (iv)
        Use of Interest Shortfall Reserve Account. The portion of the Loan allocated for Interest Shortfall Reserve Account shall not be used or disbursed for any purpose other than payment of Base
Interest and Deferred Interest, if applicable, accrued on the Loan, without Agent’s prior written consent, which may be withheld in Agent’s sole and absolute discretion. Upon the occurrence and during the continuation of an Event of
Default, Agent shall be entitled to cause Depository Bank to release all or any portion of the funds in the Interest Shortfall Reserve Account to Agent and Agents shall have the right to use and apply such funds in the order and manner as Agent may
elect, in Agent’s sole discretion. 
 (d)         No
Reborrowings. Any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed. 

  
 13 

 (e)         Accounts.

 (i)         Opening of Accounts. Concurrently with the closing of the
Loan and as a condition precedent thereto, Borrower shall (1) open the Accounts in accordance with the Account Agreements and execute such documents as are necessary to establish the same, and (2) deposit into the Accounts the funds
required to be deposited therein pursuant to the Account Agreements. 
 (ii)
        Withdrawals from Accounts. Borrower shall not have the right to make any withdrawals, or authorize any disbursement from, any of the Accounts except as expressly set forth in the Account
Agreements. 
 (iii)         Security Interest. In accordance with the
terms of the Account Agreements, Borrower shall irrevocably and unconditionally grant to Agent, as agent for the Lenders, as security for the Loan, all of Borrower’s right, title and interest in and to the Accounts, the funds deposited therein
and in and to all investment income earned on the funds in the Accounts or proceeds thereof. 
 4.
        Interest Payments; Default Interest Rate; Loan Fee; Prepayment; Stated Maturity. 
 (a)         Interest. Interest on the outstanding principal balance of the Loan shall be computed and paid in accordance with the terms set forth in the
Note. 
 (b)         Default Interest Rate. The Default Interest
Rate, if applicable, shall be applied and paid in accordance with the terms set forth in the Note. 
 (c)
        Loan Fee. Concurrently with the closing of the Loan, and as a condition precedent thereto, Agent shall disburse to itself or as it may so direct from the Loan funds, a non-refundable Loan Fee in
the amount of One Million Four Hundred Thirty Thousand and No/100 Dollars ($1,430,000.00), which shall be deemed to have been earned in full, and is non-refundable, upon the disbursement of all or any portion of the Loan. The parties agree that the
Loan Fee is consideration for the Lenders’ agreement to enter into the Loan, and that such fee constitutes compensation to Lenders for the use of Lenders’ funds and is not in exchange for services rendered to Borrower. The Loan Fee shall
be allocated among Agent and the Lenders pursuant to their separate agreement. Agent and Borrower hereby agree that the commissions payable to Preferred Capital Advisors Inc. and Sequoia Capital Partners Inc. shall be paid by Agent out of the Loan
Fee. 
 (d)         Prepayment. All amounts due and owing under
the Note from time to time may only be prepaid in accordance with the terms of the Note. 
 (e)
        Stated Maturity. The outstanding principal balance of the Note and all accrued and unpaid interest thereon shall become due and payable at the Stated Maturity, unless the same is otherwise
accelerated in accordance with the provisions hereof or the other Loan Documents. 

  
 14 

 5.         Security for Loan;
Guaranty. 
 (a)         Security for Loan. The Loan shall
be secured and/or supported by, among other things, the Mortgage, the Cash Management Agreement, the Clearing Account Agreement, the Pledge and Assignment of Reserve Accounts, the Environmental Indemnity, all of the Accounts, the Guaranty,
and the other Loan Documents. 
 (b)         Guaranty. The Loan
shall be guaranteed by the Guarantor executing and delivering to Agent, as agent for the Lenders, the Guaranty on Agent’s form. 
 6.         Conditions Precedent to Closing of the Loan. Prior to the recordation of the Mortgage and the closing of the Loan (unless otherwise provided), all
of the following conditions shall have been satisfied and/or Borrower shall have furnished to Agent the following, all in form and substance satisfactory to Agent, which consent may be given or withheld in Agent’s sole and absolute discretion:

 (a)         Loan Documents. Duly executed and, where
appropriate, notarized originals of the Loan Documents, each on Agent’s form and otherwise satisfactory to Agent and the Lenders in their sole and absolute discretion, including the following: 

(i)         this Agreement; 

(ii)        the Note; 

(iii)       the Mortgage; 

(iv)       the Guaranty; 

(v)        the Environmental Indemnity; 

(vi)       the Clearing Account Agreement; 

(vii)      the Cash Management Agreement; 

(viii)     the Deposit Account Control Agreement; 

(ix)        the Depository Bank Agreement; 

(x)         the Consent and Subordination of Manager; 

(xi)        Pledge and Assignment of Reserve Accounts; 

(xii)       UCC Financing Statements, both state and local, as appropriate, with
respect to items which are, or may be, fixtures, personal property or other collateral including the collateral as described in: 
  (1)         the Mortgage; 

  
 15 

 (2)        the Pledge and
Assignment of Reserve Accounts; 
 (3)        the Cash Management
Agreement; 
 (4)        the Clearing Account Agreement; and

 (xiii)    Such other agreements by Borrower or the Sole Member as may be required
by other provisions of this Agreement or as Agent may reasonably require in order to evidence or secure the Loan, including without limitation, an interest rate protection agreement. 

(b)         Third Party Agreements: 

(i)        Copies. Executed copies, certified by the Borrower as
being true, correct and complete, of the Management Agreement and the other Third Party Agreements; 

(ii)       Estoppel Certificate. If requested by Agent, an estoppel
certificate from the parties to the Management Agreement and the other Third Party Agreements confirming the absence of any default thereunder and such other matters as Agent may require. 

(iii)     Management Subordination Agreement. The Borrower shall cause the
Manager to enter into a subordination agreement with the Agent, as agent for the Lenders, on Agent’s standard form. 
 (iv)     Assignments. If requested by Agent, separate collateral assignments of Borrower’s interest in the Third Party Agreements, on Agent’s standard
form. 
 (c)         Financial Statements. With respect to
the Borrower, the Property and the Sole Member, financial statements and other financial information, in the form and containing the detail and supporting information required pursuant to Section 11 hereof. The financial statements for
the Sole Member and the Borrower shall be executed by the Sole Member and the Borrower, as applicable. The financial statements for the Property shall be executed by the Borrower. 

(d)        Insurance Policies. Agent must receive certified copies of all
the required insurance policies under Section 8 hereof (or certificates of insurance with respect to such insurance). Agent may require certified copies, detailed binders, endorsements and/or certificates of insurance as evidence of
continuation of coverage for subsequent renewals. 

(e)         Leases: 

(i)         Copies. Copies, certified by Borrower as being
true, correct and complete of (a) the form lease for the Property, previously approved by Agent and (b) all Leases covering the Property; 
 (ii)       Rent Roll. A current rent roll for the Property listing each tenant leasing space in the Property, the rental rate (including the amount of any
security deposits, the 

  
 16 

 
commencement date and termination date of each Lease in effect, a list of those tenants whose rent is delinquent, and such other information as Agent may reasonably request from time to time.

 (f)         Title Insurance Policy. The Title Policy
referred to in Section 7(a) hereof. 
 (g)        ALTA
Survey.   A current ALTA survey of the Property (the “Survey”) prepared by a surveyor or engineer licensed by the appropriate governmental authorities of the jurisdiction in which the Property is located and otherwise
acceptable to Agent. The Survey shall be satisfactory to Agent and to the Title Insurer and shall be certified to Agent, and the Title Insurer as (a) having been prepared in accordance with the “Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys,” jointly established and adopted by ALTA and NSPS in 2011, (b) containing Table A Items 1, 2, 3, 4, 6, 7(a), 7(b)(1)-(2), 7(c), 8, 9, 10, 11(a), 13, 14, 15 and 16 and (c) meeting the strictest
accuracy requirements of an ALTA Survey. 
 (h)        Zoning;
Conditional Use Permits and Certificates of Occupancy.   A copy of the applicable zoning ordinance and zoning map covering the Property, any conditional use permit(s) affecting the Property and final certificates of occupancy for the
Property and such evidence as Agent may require (including the written certification of Borrower’s engineer or any other person satisfactory to Agent) that the zoning of the Property is satisfactory and compatible with the Improvements and that
the Property can be operated and maintained in accordance with all zoning laws, other applicable laws and regulations, conditional use permits and other agreements affecting the Property. 

(i)         Flood Plain Certification. To the extent not provided on
the Survey, such evidence as Agent may require (including the written certification of Borrower’s engineer or any other person satisfactory to Agent) that the Property is not located within any flood plain or, if the Property is located within
a flood plain, Borrower has obtained and is maintaining in full force and effect a policy or policies of flood insurance pursuant to Section 8 hereof. 

(j)         Appraisal. An appraisal of the Property in form and
substance satisfactory to Agent (including the assumptions on which it is based), addressed to Agent, as agent for the Lenders and prepared by a licensed appraiser acceptable to Agent. 

(k)        Soils Report. A soils report covering the Property, certified
to Agent, as agent for the Lenders, and in form and substance satisfactory to Lender, prepared by a soils engineer acceptable to Agent. 
 (l)         Engineering Report. An engineering report covering the construction, structural integrity and functional utility of the Property and the
Improvements as well as their compliance with the Americans With Disabilities Act and all other applicable laws, in form and substance satisfactory to Agent and certified to Agent, as agent for the Lenders. 

(m)        Environmental Report.   An environmental report
covering the Property, certified to Agent, as agent for the Lenders and in form and substance satisfactory to Agent, prepared by a professional acceptable to Agent. 

  
 17 

 (n)         Borrower
Authority. 
 (i)        Good Standing.  A
certificate issued by the appropriate agency of the state in which the company was formed dated not more than thirty (30) days prior to the date of this Agreement, certifying that such company is a company duly formed and in good standing under
the laws of such state, and if such state is not the Governing Jurisdiction, a certificate issued by the appropriate agency of the Governing Jurisdiction dated not more than thirty (30) days prior to the date of this Agreement certifying that
such company is duly authorized to transact business in the Governing Jurisdiction; 

(ii)        Operating Agreement.    A
certified copy of such company’s operating agreement and any amendments thereto certified by the managing member to be true, correct and complete, which agreement shall comply with the provisions of Section 23 below; 

(iii)       Articles of Organization.    A
certified copy of such company’s articles of organization, certified by the Secretary of State of the state of formation as well as the managing member to be true, correct and complete, which shall conform to the requirements of
Section 23 below; 

(iv)       Resolutions.    A certified copy of
resolutions of such company’s members, if such company is member-managed or of such company’s board of managers, if such company is manager-managed. Such resolutions shall be duly executed by the President or Vice President of such
company, authorizing such company’s execution of the Loan Documents to be executed by such company and the consummation of the transactions contemplated thereby; and 

(v)        Incumbency. A certificate of incumbency, duly executed
by a duly authorized officer of such company, certifying the identity, incumbency and specimen signature(s) of the member(s) of such company who is executing the Loan Documents on behalf of such company. 

(o)        Legal Opinion. A written legal opinion from Borrower’s,
Guarantor’s and Sole Member’s counsel (which counsel must be acceptable to Agent) in form acceptable to Agent and its attorneys, opining as to such matters as Agent may reasonably require, including an opinion regarding: (1) due
organization and valid existence; (2) authority; (3) enforceability of the Loan Documents (subject to the effects of applicable Insolvency Laws and equitable limitations on the enforcement of creditors’ rights generally);
(4) lack of substantive consolidation of Borrower with other entities; (5) the lack of a partnership relationship between Borrower and Agent and Lenders; (6) choice of law (as applicable); (7) usury; (8) doing business;
(9) franchise and income taxation; (10) perfection of security interest in Accounts (and permitted investments) as well as the collateral pledged under the Mortgage; and (11) such other matters as may be reasonably requested by Agent.
In addition, if Borrower’s counsel is not authorized to practice law in the Governing Jurisdiction, a written legal opinion from Borrower’s counsel in such Governing Jurisdiction in form and substance acceptable to Agent and its attorneys,
opining as to the enforceability of the Loan Documents, the perfection of the security interests described above and such other matters as Agent may reasonably require. 

  
 18 

 (p)        UCC and Lien
Searches.  Full uniform commercial code, federal and state tax lien, bankruptcy, judgment and pending litigation searches, performed by a search company and in jurisdictions satisfactory to Agent, with respect to the Borrower and the
Sole Member and disclosing no matters objectionable to Agent. 

(q)        Utilities.    Evidence that all sewer,
water, electrical, telephone and any other utility services are available at the Property in adequate supply for the use and operation of the Property. This evidence may include letters from the applicable utility providers. 

(r)         Environmental Disclosure.    In
accordance with all applicable Laws, including the laws of the Governing Jurisdiction, Borrower shall provide a true, correct and complete copy of any disclosure document or other instrument required by any such Law relating to environmental
matters, Hazardous Substances or otherwise required in connection with the making of the Loan or the recording of the Mortgage. 
 (s)        Permits.    Evidence satisfactory to Agent that all Permits necessary to operate the Property as a Seniors Housing Facility
are in full force and effect, including all conditions under any conditional use permit relating to the Improvements have been satisfied. 
 (t)         Initial Net Operating Income.    Evidence satisfactory to Agent that the initial Net Operating Income from the Property
at Closing, as determined by Lender, shall not be less than Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00). 
 (u)        Additional Matters.    The Borrower shall have delivered to Agent such other or additional documents, instruments, information
or items as the Agent may request prior to the disbursing of the Loan. 

  
 19 

7.            Title Insurance. 

  (a)      Title
Insurance.    Concurrently with the closing of the Loan, Borrower shall deliver or cause to be delivered to Agent an ALTA Loan Policy of Title Insurance (unmodified October 17, 1970 Form) with extended coverage (the
“Title Policy”) issued by the Title
Insurer, with a liability limit equal to not less than the Loan Amount, and with coverage and in form satisfactory to Agent, insuring Agent’s interest under the Mortgage as a valid first lien on the Property, together with such reinsurance
(with direct access to the reinsurers thereunder) or coinsurance agreements and such endorsements to the Title Policy as Agent may require. The Title Policy shall not be subject to any exceptions of any kind whatsoever other than the matters
approved by Agent in writing. Any easements benefiting the Real Property shall be additional insured parcels under the Title Policy. Moreover, to the extent available in the Governing Jurisdiction, the Title Policy shall contain the following
endorsements, each in form and substance satisfactory to Agent: (i) comprehensive endorsement No. 1, (ii) zoning 3.1 with parking or an equivalent endorsement, (iii) usury, (iv) tax parcel endorsement, (v) doing
business, (vi) restriction endorsement (if applicable), (vii) contiguity endorsement (if applicable), (viii) survey (both location and access), (ix) interest on interest endorsement, and (x) such other endorsements deemed
necessary by Agent. 

8.            Insurance. 

  (a)      Insurance Requirements.  During the term of the
Loan, Borrower shall, at its sole cost and expense, obtain and maintain, without interruption, not less than the following minimum insurance coverage for the Property: 

  (i)       Property Insurance.  The Property shall
be insured for the benefit of Agent, as agent for the Lenders on a “Full Replacement Cost” basis, (defined as the cost of replacing the Improvements on such property, together with appurtenances and betterments in compliance with
the prevailing building codes, without deduction for physical depreciation thereof, at the time of replacement of property, following a loss) or such other limits as may be approved by Agent, based on insurable values, for each property securing the
Loan. The policy will not be subject to coinsurance. Borrower will not make a decision not to replace the Improvements, unless upon written consent of Agent. Full Replacement Cost shall be determined by an appraisal at Borrower’s sole expense,
by an insurance company, appraiser, appraisal company, or any other entity or method selected by Borrower and approved by Agent. The value so determined shall be binding and conclusive upon the parties hereto. The policy shall further provide that
Borrower shall not be unreasonably restricted from applying such proceeds to the building of the Improvements at such other location as Borrower and/or Agent shall elect. The Property shall be insured on an All Risk basis. If determined necessary by
Agent, Borrower will also maintain coverage for flood, earthquake, windstorm, sections (v) and (vi) notwithstanding. The policy shall be endorsed to provide demolition and increased cost of construction. 

  (ii)      Rent Loss/Business Interruption. Borrower shall
maintain rent loss or business interruption insurance sufficient to prevent Agent from being a co-insurer, and in an 

  
 20 

 
amount not less than eighteen (18) months’ projected gross income from the Property, and whenever possible, for the length of reconstruction, whichever is longer. 

(iii)      Boiler and Machinery.    If applicable,
Borrower shall maintain boiler and machinery insurance covering physical damage to the Property and to the major components of any central heating, air conditioning or ventilation systems, and such other equipment as Agent may require. The policy
shall include coverage for business interruption due to mechanical equipment malfunctions, including expediting and extra expense, in an amount usual and customary for similar risks, or as determined by Agent. Unless the insurance required in
subparagraphs (i), (iii) and (iv) is provided on a single policy, a Joint Loss Agreement between separate policies must be provided on each policy. 
 (iv)      Builder’s Risk.    The coverage may be provided as an extension to the property policy in force (as required in subparagraph
(i) above), if the requirements herein are satisfied. 

(v)       Flood.    If at any time the Property is
in an area that has been identified by the Federal Insurance Administration, HUD or FEMA as having special flood and/or mudslide hazards, and in which the sale of flood insurance has been made available under the National Flood Insurance Act of
1968, Borrower shall purchase and maintain a flood insurance policy satisfactory to Agent, but which shall insure the full value of the Property. In the event that the Property is in an area identified as subject to flood and/or mudslide hazards,
Borrower shall deliver to Agent on or prior to the Closing and thereafter upon request, a certificate or letter in a form satisfactory to Agent stating that the Property is insured for losses arising out of these perils. 

(vi)      Earthquake.    If the Property is in an area
identified by any governmental, engineering or any hazard underwriting agencies as being subject to the peril of earthquake, with a probable maximum loss (“PML”) based on the “Scenario Expected Loss”
(“SEL”) for a 475-year return period per ASTM E 2026-99 (Reference 1) of between 15% and 20%, Borrower must have earthquake insurance equal to 50% of the replacement cost of the Property. Neither Agent nor the Lenders shall be
obligated to make any loans on properties with a PML exceeding 20%, but if the Lenders do agree to make such a loan, earthquake insurance for the full replacement cost of the Property shall be required. 

(vii)     Windstorm Insurance.    Borrower shall maintain
windstorm insurance in amounts and in a form and substance satisfactory to Agent, which shall not provide for a deductible greater than two percent (2%) of the Full Replacement Cost of the Property, subject to a $250,000 minimum deductible.

 (viii)    Liability Insurance.    The following
liability insurance: 
   (1)        Comprehensive General
Liability.    Comprehensive commercial liability insurance on the broadest forms available for similar risks, written on an “occurrence policy form,” against all claims for bodily injury, disease or death, property
damage, personal injury and contractual liability in an amount not less than $2,000,000.00 for loan 

  
 21 

 
amounts under $5,000,000.00, and $5,000,000.00 for loans of $5,000,000.00 or more in the aggregate and $1,000,000.00 per occurrence plus a $25,000,000.00 umbrella excess policy, or at
Agent’s discretion, such other limits as may reasonably be determined to be usual and customary for similar use and occupancy in the area. If liability coverage for the Property is included under Borrower’s blanket policy written on an
aggregate form, then the annual aggregate limit of insurance must not be less than $10,000,000.00. The policy shall be endorsed to include Agent as an additional insured subject to the benefits stipulated under subsection (f)(iv) hereof. 

(2)        Contractors.    Borrower shall require
general contractors and subcontractors engaged on the Property to maintain commercial liability insurance, with extension to cover products or completed operations, with limits of not less than $1,000,000.00 per occurrence. The general contractors
and the subcontractors will have Borrower and Agent included on their insurance required herein as additional insureds. 
 (3)        Vendors.    Borrower will require vendors who will operate independently, or perform services for Borrower on the Property, to
maintain commercial general liability coverage (including products or completed operations) with limits of not less than $1,000,000.00 per occurrence. 
  (ix)      Workers’ Compensation and Employers’ Liability.    Borrower shall maintain for all its employees, and will cause
any of its agents, contractors, subcontractors, and vendors to maintain similar insurance for all their respective employees, to the fullest extent required under the laws of the state or country in which the Property is located. 

 (x)        Other Insurance.    The types and
limits of coverage stipulated herein are the minimum requirements. Agent retains the right to make any changes it deems necessary. Borrower shall also maintain all insurance, surety and fidelity bonds that Borrower is required to maintain as
landlord under tenants’ leases, if any. Borrower may also maintain any other insurance and bonds, even if not specifically required herein, in amounts, and for such periods that are deemed to be prudent, or are customarily maintained by persons
or entities operating properties of like kind, construction and occupancy in the locality of the Property, or as Agent may from time to time require and approve. Compliance with insurance requirements will not in itself be construed to be limitation
of Borrower’s liability. 

 (xi)        Terrorism.    The commercial
property, liability and business income required above shall cover perils of terrorism and acts of terrorism (whether caused by a foreign or domestic source) consistent with the requirements described above at all times during the term of the Loan.

 (b)        Automatic Reinstatement.    If
any policies are subject to exhaustion of limits, Borrower will exercise effort to have such policies include warranties of the right to reinstate coverage and policy limits of not less than the amount specified in Section 8(a), if any.
Agent shall reasonably determine whether such blanket policies provide sufficient limits of insurance. 

  
 22 

 (c)         Other Requirements
With Respect to Insurance.  The following provisions shall apply with respect to the insurance coverage required in Section 8(a) above: 

 (i)          Insurance
Companies.    All insurance required herein shall be issued by insurance companies selected by Borrower, but subject to approval by Agent, which approval shall not be unreasonably withheld. The insurers must be of recognized
good standing, with a rating of AX or better in Best’s Key Rating Guide for loans under $20,000,000, “A-” or better by S&P (and the equivalent by any other Rating Agency) for loans between $20,000,000 and $35,000,000, and
“A” or better by S&P (and the equivalent by any other Rating Agency) for loans over $35,000,000, and must be licensed to do business in the state in which the Property is located. Coverage under blanket policies may be extended by
endorsements provided the insurers meet the requirements stipulated herein. Each policy shall not have more than a $25,000.00 deductible for any occurrence without Agent’s approval, except for mandatory deductibles where required under local
regulations, or when required by insurers for specific catastrophic perils. 

 (ii)         Evidence of Insurance.  Each of
the policies required herein will specify the Property as an insured location. Borrower shall deliver to Agent, at least 15 Business Days prior to the Loan closing, certified copies of certificates of insurance evidencing that the required coverage
is in force, and thereafter at least 30 days before the expiration date of each such policy, Borrower shall deliver to Agent certified copies of the policies or certificates in form and content satisfactory to Agent. These certificates must provide
that the insurance in force is not contributory, participating with, nor excess over any other insurance, unless such other insurance is part of and applicable to the same risk, with the knowledge of, and consent of Agent. Upon request by Agent,
Borrower shall produce receipts evidencing payment of the current premiums. 

 (iii)        Certificates of
Insurance.    Whenever a certificate of insurance is issued, it must, at the minimum: 

(1)         indicate Borrower as the named insured; 

(2)         indicate the required limits of insurance for property and
liability; 
 (3)         indicate the Property as a covered location;

 (4)         specify Agent, as agent for the Lenders as a
“mortgagee” or “loss payee,” and additional insured; 

(5)         show Agent, as agent for the Lenders as the “Certificate
Holder”; 
 (6)         indicate policy numbers and policy terms;

  
 23 

 (7)         identify insurance
companies for each type of coverage; and 
 (8)         bear an
authorized signature. 
 (iv)        Mortgagee and Loss Payee
Clause.  The Property insurance shall have attached thereto a standard non-contributing, non-reporting mortgagee clause or its equivalent satisfactory to, and naming Agent, as agent for the Lenders, as first mortgagee, entitled to
collect directly from the insurers the proceeds payable under such insurance, as its interest may appear, and stipulating that this entitlement will in no way be adversely affected by any act, error or omission of Borrower which may void any or all
coverage provided. 
 (v)         Waiver of
Subrogation.    The Property policies will contain a standard waiver of subrogation provision. 
 (vi)        Reinsurance.  For all policies for which the insurer has purchased reinsurance, Borrower shall request a “cut-through”
clause. 

(vii)       Cancellation.    Borrower shall
immediately notify Agent of any cancellation of, non-renewal, or such material change as may adversely affect any insurance policy or coverage in force. Each policy shall contain a provision obligating the insurer to send at least 30 days prior
written notice to Agent notifying Agent of the intent to cancel or make such change, and that any loss otherwise payable to Agent thereunder shall be paid notwithstanding any act or negligence of Agent or Borrower which might, absent of such
provision, result in a forfeiture of all or part of such insurance payment. 

(viii)      Separate Insurance.    Borrower shall not
purchase separate insurance concurrent in form or contributing in the event of loss, with the insurance required hereunder, without Agent’s prior written consent. 

(ix)        Contravention of
Insurance.    Borrower will not intentionally do, allow or permit anything to be done on or about the Property that will affect, impair or contravene any policies of insurance that may be in force for the Property, or any
part thereof, or the use thereof, against damage or destruction by fire, public liability, or any other cause of loss. Further, Borrower at its sole cost and expense, will comply and cause compliance of the Property and the operations, maintenance
and use thereof with all insurance requirements, whether or not compliance therewith shall require structural changes in or interfere with the use and enjoyment of the Property, or any part thereof. 

(x)         Payment of
Premium.    Borrower shall be solely responsible for, and promptly pay when due, any and all premiums for all such insurance. Should Borrower fail to effect, maintain or renew any of the insurance as stipulated in this
Agreement, or fail to pay the premiums thereof, or fail to deliver to Agent any evidence of such insurance, then, at its option but without the obligation to do so, Agent may procure such insurance. Any sums expended by Agent and/or the Lenders to
procure such insurance shall be payable by Borrower on demand, and with interest; however, it is expressly understood that procurement by Agent 

  
 24 

 
and/or the Lenders of any such insurance shall not be deemed to waive or release the default of Borrower, or the right of Agent, at its option, to exercise the remedies set forth in the Mortgage
upon the occurrence of an Event of Default under the Loan Documents. Should Borrower fail to repay any such sums expended by Agent and/or the Lenders, Agent may add such sums to the outstanding Loan balance. Agent shall not be responsible for
obtaining or maintaining any insurance required under the provisions of Section 8(a), and shall not, by reason of accepting, rejecting, approving or obtaining any such insurance, incur any liability for the existence, nonexistence of, or
insufficient coverage of such insurance, or from legal liability arising therefrom. 

(xi)         Sale under the Mortgage.  In the event of a
sale of all or part of the Property pursuant to the provisions of the Mortgage, or if the title to any or all of the Property is transferred in extinguishment of the indebtedness evidenced by the Note, Agent, as agent for the Lenders, shall succeed
to all the rights and interest of Borrower, including any right of Borrower to unearned premiums, in and to all such policies of insurance. 
 (xii)        Notice of Transfer or Loss.  Upon a change in ownership or use or occupancy of the Property, Borrower shall immediately notify,
in writing, Agent, and all other parties insured under the policies herein, provided that nothing herein shall be construed to permit such change in ownership if otherwise prohibited under the provisions hereof. If a loss (defined herein for the
purpose of this subsection to mean any act or occurrence of any kind or nature, whether or not insured, which results in damage, loss or destruction to any or all of the Property or any interest therein) occurs, Borrower will likewise give immediate
written notice to Agent of the loss, and Agent may, but is not obligated to, make proof of such loss if not made promptly by Borrower. With the exception of Workers’ Compensation, all policies of the insurance required herein will allow, but
not obligate, Agent, as agent for the Lenders, to participate in the adjustment and settlement process of all claims expected to exceed $100,000.00. 
 (xiii)      Leases.  Borrower will require on all leases signed after the date hereof that each of its tenants’ property insurance policy provide
a standard waiver of subrogation, and each such policy shall include Agent, as agent for the Lenders, as an additional insured. 
 (d)         Insurance Review.  At Agent’s option, but not more often than annually, Borrower shall provide Agent with a report from an
independent insurance consultant of regional or national prominence, acceptable to Agent, certifying that Borrower’s insurance is in compliance with this Section 8. As of the date hereof, Agent confirms that Borrower’s
insurance is acceptable to Agent notwithstanding the fact that Borrower’s current coverage may not satisfy all of the requirements of this Section 8; provided, however, Agent’s approval of Borrower’s insurance as of the
date hereof shall not constitute a present or future waiver by Agent of the insurance requirements set forth in this Section 8, and Borrower acknowledges and agrees that Agent shall have the right at any time to require that
Borrower’s insurance comply with all of the requirements set forth in this Section 8. 

  
 25 

 (e)        Notice of
Casualty.   Borrower shall give to Agent immediate notice of any loss occurring on or with respect to the Property. 
 (f)         Settlement of Claim.    In case of loss covered by any of such policies, Agent, as agent for the Lenders is authorized
to adjust, collect and compromise, in its discretion, all claims thereunder. In the event of any adjustment, collection and compromise by Agent, Borrower covenants to sign upon demand, or Agent may sign or endorse, on Borrower’s behalf, all
necessary proofs of loss, receipts, releases and other papers required by the insurance companies to be signed by Borrower. Borrower hereby irrevocably appoints Agent, as agent for the Lenders as its attorney-in-fact for the purposes set forth in
the preceding sentence. Agent may deduct from such insurance proceeds any expenses incurred by Agent and/or the Lenders in the collection and settlement thereof, including reasonable attorneys’ and adjustors’ fees and charges. 

Nothing contained in this Agreement shall create any responsibility or obligation on the Agent or the Lenders to collect any amounts
owing on any insurance policy, to rebuild or replace any damaged or destroyed Property or to perform any other act hereunder. The Agent shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any
insurance, incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or payment or defense of lawsuits, and the Borrower hereby expressly
assumes full responsibility therefor and all liability, if any, with respect thereto. 

(g)        Application of Insurance Proceeds.   Any
insurance proceeds received by Borrower under any of such policies shall be delivered to Agent, as agent for the Lenders, and applied, at the option of the Agent, toward prepayment or reimbursement of the Indebtedness and any other amounts evidenced
or secured by the Loan Documents, or to the rebuilding or repairing of the Property so damaged or destroyed, as the Agent in its sole and unreviewable discretion may elect. Agent’s election to apply such insurance proceeds to the Loan and other
amounts evidenced or secured by the Loan Documents shall not relieve the Borrower of the duty to rebuild or repair. 

Notwithstanding the foregoing, the Agent shall consent to the application of any proceeds of said insurance to the restoration of the
Property so damaged if and only if Borrower fulfills all of the following conditions not waived in writing by Agent: 
  (i)         that no Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, has
occurred and is continuing under this Agreement or any of the Loan Documents; 

 (ii)         the insurance proceeds shall be sufficient to fully
restore and rebuild the Property free and clear of all liens except the lien of the Mortgage and the Permitted Exceptions, or in the event that such proceeds are in Agent’s sole judgment insufficient to restore and rebuild the Property, then
Borrower shall deposit upon demand the shortfall with Agent or in an account approved by Agent; 

  
 26 

 (iii)         any and all
monies which are made available for restoration and rebuilding hereunder shall be disbursed substantially in accordance with the disbursement procedures for advances under this Agreement including, if requested by Agent, monthly lien waivers and
title insurance date-downs, or in any other manner approved by Agent; 

(iv)         construction and completion of restoration and
rebuilding of the Property can, in Agent’s judgment be completed within the earlier of (A) two (2) months prior to Stated Maturity and (B) twelve (12) months of the casualty; 

(v)          for any restorations involving structural
components or where the cost of restoration exceeds $200,000.00, construction and completion of restoration and rebuilding of the Property is completed in accordance with plans, specifications and drawings submitted to and approved by Agent, which
plans, specifications and drawings shall not be modified, changed or revised without the Agent’s prior written consent, and shall be in conformity with all governmental regulation, including building, zoning, land use and environmental
regulations; and 
 (vi)         Agent shall also have approved
all general or prime contractors and all subcontractors, and the general contract or contracts the Borrower proposes to enter into with respect to the restoration and rebuilding, which approval shall not be unreasonably withheld or delayed.

 9.         Eminent Domain. 

 (a)         Notice of Condemnation.  Borrower shall
give to Agent immediate notice of any taking of any portion of Property or the institution of any proceedings the effect of which is to achieve a taking of any portion of any Property by condemnation. 

 (b)         Settlement of Claim.   In case the
Property, or any part or interest in any thereof, is taken by condemnation, the Agent is hereby empowered to collect and receive all compensation and awards of any kind whatsoever (referred to collectively herein as “Condemnation
Awards”) which may be paid for any property taken or for damages to any property not taken (all of which the Borrower hereby assigns to Agent). In the event of any adjustment, collection and compromise by Agent, Borrower covenants to sign
upon demand, or Agent may sign or endorse on Borrower’s behalf, all necessary proofs of loss, receipts, releases and other papers required by the condemning authority to be signed by Borrower. Borrower hereby irrevocably appoints Agent, as
agent for the Lenders as its attorney-in-fact for the purposes set forth in this Section 9. Agent may deduct from any Condemnation Awards, any expenses incurred by Agent in the collection and settlement thereof, including reasonable
attorneys’ and adjusters’ fees and charges. 

 (c)         Application of Condemnation
Awards.    All Condemnation Awards so received shall be delivered to Agent, as agent for the Lenders, forthwith and applied by the Agent, as it may elect in its sole and unreviewable discretion, to the payment or
reimbursement of the Loan or the other amounts evidenced or secured by the Loan Documents, or to the repair 

  
 27 

 
and restoration of any property not so taken or damaged. No election made by the Agent under this Section 9 shall relieve the Borrower of the duty to repair and restore. 

 (d)         No Lender Obligation.   Nothing
contained in this Agreement shall create any responsibility or obligation of Agent to collect any amounts owing on account of any such condemnation or proceedings relating to the Property, to rebuild or replace any damaged or destroyed property or
to perform any other act hereunder. 
 10.         Rights of Access
and Inspection.    Borrower grants Agent, its agents and representatives the right to enter and visit the Property at any reasonable time for the purposes of observing it, performing appraisals, inspecting the Property,
taking soil or groundwater samples, and conducting tests, among other things, to investigate for the presence of Hazardous Substances. Without limiting the foregoing, Borrower expressly grants Agent the rights of inspection prior to, or as a part
of, any proceeding to exercise its rights under the Mortgage or in any other way enforce its rights and remedies under the Loan Documents. Borrower shall also allow Agent access to the Property in order to examine, copy and audit its books and
records including any audit performed pursuant to Section 11(e) hereof. Agent is under no duty to visit or observe the Property, or to examine any books or records. Any site visit, observation or examination by Agent shall be solely for
the purpose of protecting the security for the Loan and preserving Agent’s and Lenders’ rights under the Loan Documents. Neither Borrower nor any other party is entitled to rely on any site visit, observation or testing by Agent,
its agents or representatives. Agent owes no duty of care to protect Borrower or any other party against, or to inform Borrower or any other party of, any adverse condition affecting the Property, including any defects in the design or construction
of any improvements on the Property or the presence of any Hazardous Substances on the Property. So long as no Event of Default has occurred and is continuing, Agent shall give Borrower reasonable prior notice of its intent to enter the Property.
Agent shall exercise reasonable efforts to avoid interfering with Borrower’s or any tenant’s use of the Property in connection with the activities permitted under this Section /10. 

11.         Financial Reports, Property Reports and Annual Budget.

  (a)         Annual Financial
Reports.    Within sixty (60) days after the end of each Loan Year, Borrower and its Sole Member shall deliver to Agent copies of their annual financial statements which shall include comparative balance sheets, income
statements, cash flow statements (sources and application of funds), and statements of changes in financial position for such Loan Year. In addition, for Borrower, such statement shall also include a calculation of the Gross Receipts and Expenses
for the immediately preceding Loan Year and a schedule of occupancy statistics for the Property. Each such annual report shall (i) be in a form reasonably satisfactory to Agent, (ii) be prepared on a cash basis, in accordance with
generally accepted accounting principles consistently applied, (iii) be certified by Guarantor as being true and correct in all respects, and (iv) otherwise comply with the reporting requirements of Agent. 

 (b)         Monthly Reports.    Within ten
(10) days after the end of each calendar month, Borrower will provide or cause to be provided the following reports in format acceptable to Agent: 

  
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 (i)         Income
Statement.    An income statement which provides both actual and budgeted results for the prior month and year-to-date, which statement identifies Gross Receipts and Expenses for the immediately preceding month, each broken
out for each type of utilization of the Property such as commercial, office, residential and parking (if applicable). 
 (ii)         Balance Sheet.  A balance sheet. 
 (iii)        Supporting Balance Sheet Schedules.    Supporting balance sheet schedules on the following topics: 

(1)         Aged Accounts Receivable.    Aged
accounts receivable in intervals of 30/60/90 and 90+ days. Such information shall be prepared for both the commercial and residential operations of the Property (if applicable). 

(2)         Aged Accounts Payables.    Aged
accounts payables in the same intervals as presented for receivables. Notwithstanding the foregoing, no aged accounts payable shall be scheduled for payables thirty (30) days old or less. 

(3)         Bank Statements.    To the extent
not provided by the Depository Bank, monthly bank statements for each of the Accounts. 

(4)         Other Information.  Other documentation for
balance sheet accounts as are usual and customary, as may be requested by Agent. 

(iv)        Rent Roll.  A rent roll for the Property
listing each tenant leasing space in the Property, the rental rate (including the amount of any security deposit), the total rent received by Borrower, the commencement date and termination date of each Lease in effect and such other information as
Agent may reasonably request from time to time. If applicable, the rent roll shall be broken out for each type of utilization of the Property such as commercial, office and residential, if applicable. 

(v)        Security Deposits.    In addition
to the bank statements required under Section 11(b)(iii)(3) above, a statement, certified as true, correct and complete, showing for each individual Lease and also in the aggregate for all Leases, the amount of security deposits
currently held, if any, and any receipts or disbursements of such security deposits occurring since the date of the prior month’s statement. 
 (vi)        Management Information Narrative.    A management information narrative certified by Borrower which contains the
following elements: 
 (1)         Monthly and Year-to-Date
Variances. A brief discussion of material monthly or year-to-date variances incurred versus the Annual Budget (defined below). 

  
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 (2)         Material Operating
Items. Comments on material operating items such as major pass-through receivables, tax appeals or capital expenditures. 
 (3)         Leasing Status Report. A leasing status report in the form and with detail reasonably satisfactory to Agent. 

(c)         Preparation and Certification.  All of the
financial statements and reports set forth in this Section 11 shall be prepared in accordance with GAAP and be certified by Borrower’s and each Guarantor’s, if any, chief financial officer or Sole Member. 

(d)         Annual Budget.    The “Annual
Budget” for any period, shall mean the budget submitted to and approved by Agent for such period. The Annual Budget shall set forth, in sufficient detail, Borrower’s projection of Gross Receipts and Expenses for such period. Each
Annual Budget shall be for a calendar year except that the Annual Budget for the year in which this Loan originates or terminates, shall only cover the periods after origination or prior to termination, as applicable. The Annual Budget for
January 1, 2012 through and including December 31, 2012 is set forth on Exhibit C attached hereto and made a part hereof. Borrower shall submit to Agent, for Agent’s review and approval, a proposed Property budget for each
Loan Year, not later than sixty (60) days prior to the commencement of such Loan Year. If Agent has not approved a proposed Annual Budget within thirty (30) days of submission, Borrower shall continue to operate the Property pursuant to
the prior year’s Annual Budget until such time as the new proposed Annual Budget is approved by Agent. Borrower shall attach to each Annual Budget any supporting schedules requested by Agent, including schedules stating the Gross Receipts from
all residential tenants on a total gross monthly basis. The Gross Receipts schedule with respect to residential tenants shall specifically identify general budget assumptions regarding monthly occupancy, retention of monthly roll over and
rental rate ranges by residential unit type. 
 (e)         Right to
Audit. Within one hundred eighty (180) days after receipt of the financial statements for a particular Loan Year satisfying the requirements of Section 11(a), Agent may notify Borrower in writing that Agent disputes any
computation or item contained in any portion of such statement. In the event Agent shall so notify Borrower, the parties shall meet in good faith to resolve such disputed items. If the parties are unable to resolve such disputed items between
themselves within fifteen (15) days, then the items shall be submitted to arbitration, which arbitration shall be performed by an independent certified public accountant selected by Agent and reasonably satisfactory to Borrower. The
determination of such arbitrator shall be final. The fees of such arbitrator shall be paid by Borrower if the arbitrator determines that Borrower’s financial statements overstated Net Operating Income by more than two percent (2%). If
Agent does not so notify Borrower of a dispute in the manner and within the time period set forth in this Section 11(e), then such statements shall be deemed acceptable to Agent. 

12.         General Covenants of Borrower.  Until the full and
final payment of the Loan, unless Agent waives compliance in writing, Borrower hereby covenants and agrees as follows: 

  
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 (a)         Operation and
Maintenance of Property.    In addition to the terms, conditions and provisions set forth in the other Loan Documents: 
 (i)        Record Keeping.    Borrower shall keep and maintain full and accurate accounts and records of Borrower’s
operations according to generally accepted accounting principles consistently applied and in sufficient detail to accurately calculate Gross Receipts, and Expenses. Borrower shall keep all such accounts and records at the Property or at its
address set forth in Section 20(a) hereof. 

(ii)       Payment of Lawful Claims.    Borrower
shall pay or discharge all lawful claims, including Taxes, assessments and governmental charges or levies imposed upon Borrower or its income or profits or upon any property belonging to Borrower prior to the date upon which penalties attach
thereto. Without limiting the generality of the foregoing, Borrower shall pay (a) all taxes and recording expenses, including stamp taxes, if any, relating to the Mortgage and any other documents and instruments securing the Loan, (b) the
fees and commissions (if any) lawfully due to brokers in connection with this transaction and hold Agent and Lenders harmless from all such claims, whether or not lawfully due, and (c) the fees and expenses of Agent’s counsel relating to
Agent’s consultation with such counsel in connection with the Loan, the negotiation, documentation and closing of the Loan, and any subsequent modifications of the Loan. 

(iii)      No Amendments.    Borrower shall not, without
Agent’s prior written consent, enter into any amendments or modifications of (a) the insurance policies required by Section 8 hereof, except that Borrower shall be entitled to modify its insurance policies provided that
Borrower continues to comply with the insurance provisions set forth in Section 8 herein, (b) if Borrower or its Sole Member is a corporation, the Borrower’s and its Sole Member’s by-laws and articles of incorporation,
(c) if Borrower or its Sole Member is a limited liability company, such entity’s operating agreement or articles of organization, or (d) the Third Party Agreements. In addition, Guarantor(s), if any, shall not amend or modify
Guarantor’s by-laws or articles of incorporation, or its operating agreement or articles of organization, as applicable. 
 (iv)      No Separate Insurance.    Borrower shall not obtain any separate insurance whatsoever which is concurrent in form or contributing
in the event of loss with that required under Section 8 hereof or under the Mortgage without first obtaining Agent’s prior written consent thereto, which such consent shall be exercised in Agent’s sole and absolute discretion.

 (v)       Maintenance and Repair of
Property.    Borrower shall (a) maintain the Property, including the parking and landscaping portions thereof, in good condition and repair, (b) promptly make all necessary structural and non-structural repairs to
the Property, and (c) not demolish, alter, remove or add to any Improvements, excepting (i) the repair and restoration of Improvements following damage thereto as required by this Agreement, and (ii) as otherwise required by any
applicable law, rule or regulations, and (d) not erect any new buildings, structures or building additions on the Property, without the prior written consent of 

  
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Agent. Borrower shall pay when due all claims for labor performed and materials furnished therefor in connection with any improvements or construction activities. 

(b)         Restricted Sale and Encumbrance of Property and of Borrower
Interests; Other Indebtedness.  Other than the Mezzanine Loan, Borrower shall not engage in any Sale or Encumbrance without the prior written consent of Agent (which may be withheld by Agent in Agent’s sole and absolute
discretion). All easements, declarations of covenants, conditions and restrictions and private and public dedications affecting the Property shall be submitted to Agent for its approval and such approval shall be obtained prior to the execution or
granting of any thereof by Borrower, accompanied by a drawing or survey showing the precise location of each thereof. In addition, Borrower shall not incur any Indebtedness, whether secured or unsecured, other than this Loan and the Mezzanine Loan.

 (c)         General
Indemnity.    Borrower shall, at Borrower’s expense, protect, defend, indemnify, save and hold Agent and each Lender and each of their respective members or partners and its members’ or partner’s stockholders,
directors, officers, members, employees and agents (collectively the “Indemnified Parties”) harmless against any and all claims, demands, losses, expenses (including court costs and reasonable attorney’s fees and expenses),
damages, causes of action (whether legal or equitable in nature) asserted by any person or entity arising out of, caused by or relating to the Loan, the Property, the Agent’s exercise of its rights under the Loan Documents and the construction
or interpretation of the relationship between Agent, Lenders and Borrower contrary to Section 20(d) hereof. Borrower shall pay to Agent upon demand all claims, judgments, damages, losses and expenses (including court costs and reasonable
attorneys’ fees and expenses) incurred by Agent and/or the Lenders as a result of any legal or other action arising out of the aforesaid matters. Borrower acknowledges that the Indemnified Parties may defend any matter covered by the above
indemnification by counsel of the relevant Indemnified Party’s choice, and the costs of such defense (including reasonable attorney’s fees) are part of the costs covered by this indemnity. The foregoing indemnification shall not be subject
to the limitations on liability contained in Section 21 below and shall survive repayment of the Loan. 
 (d)         Leases: 
 (i)        Lease Requirements.  All Leases entered into after the date of this Agreement shall be on the standard form of Lease (together
with all associated agreements regarding the provision of care to the applicable residents). 

(ii)      Performance of Obligations.    Borrower shall
pay, perform and discharge, as and when payment, performance and discharge are due, all obligations of Borrower as landlord under all Leases. Borrower shall give Agent prompt notice of any default by Borrower claimed by any tenant under any Lease,
together with a copy of any notice of default given by any such tenant to Borrower or Manager. 

(iii)    Enforcement of Lease.  Borrower shall enforce all covenants and
agreements on the tenant’s part to be performed or complied with under each of the Leases and 

  
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on the part to be performed or complied with by any guarantor under any guaranty given in connection with any Lease. Except in the normal course of business consistent with Borrower’s past
practices, Borrower shall not, or allow Manager to, without the prior written consent of Agent in each instance, (1) amend or modify any Lease, (2) consent to the assignment or subletting of the whole or any portion of the tenant’s
interest under any Lease or (3) cancel, terminate or accept the surrender of any Lease except as a result of a default by the tenant thereunder or waive or release any obligation or liability of any tenant under any Lease or of any guarantor
under any guaranty thereof. 
 (iv)        Prepayments;
Security Interest.    Neither Borrower nor Manager shall, without Agent’s prior written consent in each instance, accept prepayment of rent (including any lease termination payments) under any Lease or permit any tenant
to offset or credit sums due and payable by Borrower to such tenant against rents, as the case may be, for more than thirty (30) days in advance. Borrower shall not further assign, pledge, transfer or otherwise encumber the Leases or the rents
under the Leases. If an Event of Default has occurred and Borrower shall receive all or any portion of any lease termination payments, Borrower shall cause such portion of any lease termination payments to be deposited into the Restricted Account
and all such amounts shall then be applied to the payment of the Indebtedness or the payment of Expenses, as Agent may elect in its sole and unreviewable discretion. 

(v)         Defense; Pursuit of
Remedies.    Borrower shall, at Borrower’s expense, appear in and defend any action or proceeding arising from or connected with any of the Leases or any obligation or liability of Borrower as landlord thereunder.
Borrower shall diligently pursue all remedies, including claims for damages available at law or in equity against any tenant under a Lease or guarantor thereof and shall not settle or compromise any such claims without Agent’s prior written
consent in each instance. 
 (vi)        Copies of
Leases.    Borrower shall furnish to Agent copies of all Leases requested by Agent within five (5) Business Days following Agent’s demand therefor. Borrower shall deliver copies of any Leases and amendments to
Leases within five (5) Business Days after Borrower’s execution thereof. 

(vii)       Security Deposits.    To the extent
Borrower receives any security deposits under any of the Leases, Borrower shall promptly advise Agent and such security deposits shall be held in a separately designated account to be established at such time under Borrower’s control at the
Depository Bank (and in the case of a letter of credit, collaterally assigned to Agent with full power of attorney and executed sight drafts to Agent be effective during the continuance of an Event of Default) so that the security deposits shall not
be commingled with any other funds of Borrower (such account, the “Security Deposit Account”). After the occurrence of an Event of Default, Borrower shall, upon Agent’s request, if permitted by applicable law, turn over to
Agent the security deposits (and any interest theretofore earned thereon) under Leases, to be held by Agent in a subaccount (the “Security Deposit Subaccount”) subject to the terms of the Leases. Security deposits held in the
Security Deposit Subaccount will be released by Agent upon notice from Borrower together with such evidence as 

  
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Agent may reasonably request that such security deposit is required to be returned to a tenant pursuant to the terms of a Lease or may be applied as rent pursuant to the rights of Borrower under
the applicable Lease. Any letter of credit or other instrument that Borrower receives in lieu of a cash security deposit under any Lease entered into after the date hereof shall (i) be maintained in full force and effect in the full amount
unless replaced by a cash deposit as hereinabove described and (ii) if permitted pursuant to any legal requirements, be fully assignable in accordance with the issuing bank’s procedures). 

(e)        Notices.  Borrower shall promptly notify Agent in
writing of any litigation affecting (a) Borrower or its Sole Member and Guarantor, if any, and, if Borrower or its Sole Member is other than a natural person or trust, any general partner or controlling shareholder of Borrower or its Sole
Member, or (b) the Property, to the extent that any such litigation may result in a material adverse change in (i) the financial condition of any of the foregoing parties, (ii) Borrower’s or its Sole Member’s and
Guarantor’s, if any, ability to timely perform any of its obligations under any of the Loan Documents, or (iii) the physical condition or operation of the Property. 

(f)        Property Management.    Borrower shall
(i) cause the Property to be managed by Manager pursuant to the Management Agreement (unless a new professional manager is approved in writing by Agent in which event the Property shall be managed by the new approved Manager pursuant to a new
Management Agreement approved in writing by Agent) ; (ii) promptly perform and observe all of the covenants required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep
unimpaired its rights thereunder; (iii) promptly notify Agent of any default under the Management Agreement of which it is aware; (iv) if requested, promptly deliver to Agent a copy of each financial statement, business plan, capital
expenditure plan, and property improvement plan and any other notice, report and estimate received by Borrower under the Management Agreement; and (v) promptly enforce the performance and observance of all of the covenants required to be
performed and observed by Manager under the Management Agreement, the failure of which covenants could cause a Material Adverse Effect. Without Agent’s prior written consent (not to be unreasonably withheld), Borrower shall not
(a) surrender, terminate, cancel, extend or renew the Management Agreement or otherwise replace the Manager or enter into any other management agreement; (b) reduce or consent to the reduction of the term of the Management Agreement;
(c) increase or consent to the increase of the amount of any charges under the Management Agreement; (d) otherwise modify, change, supplement, alter or amend in any material respect, or waive or release any of its rights and remedies
under, the Management Agreement; or (e) suffer or permit the occurrence and continuance of a default beyond any applicable cure period under the Management Agreement (or any successor management agreement) if such default permits the Manager to
terminate the Management Agreement (or such successor management agreement). If (i) an Event of Default shall be continuing, or (ii) upon the gross negligence, malfeasance or willful misconduct of the Manager, Borrower shall, at the
request of Agent, terminate the Management Agreement and replace Manager with a replacement manager acceptable to Agent in Agent’s discretion and the applicable Rating Agencies on terms and conditions satisfactory to Agent and the applicable
Rating Agencies. Borrower’s failure to appoint an acceptable manager within thirty (30) days after Agent’s request 

  
 34 

 
of Borrower to terminate the Management Agreement shall constitute an immediate Event of Default. The Management Agreement is and shall be subject and subordinate in all respects to the liens,
terms, covenants and conditions of this Agreement, the Mortgage and the other Loan Documents, and to all renewals, modifications, consolidations, replacements and extensions thereof, and to all advances heretofore made or which may hereafter be made
pursuant to the terms of the Loan Documents (including all sums advanced for the purposes of (x) protecting or further securing the lien of the Mortgage, curing defaults by Borrower under the Loan Documents or for any other purposes expressly
permitted by the Loan Documents or (y) constructing, renovating, repairing, furnishing, fixturing or equipping the Property. 
 (g)        General ERISA Covenant.  In the event that the ownership of any class of equity interests of the Borrower by Benefit Plan Investors is
“significant” as defined in paragraph (f) of the Plan Asset Regulation, the Borrower shall operate at all times so that it qualifies as a “real estate operating company” as defined in paragraph (3) of the Plan Asset
Regulation. 
 (h)        Principal Place of Business; Choice of
Law.  Borrower shall not change its principal place of business or, if Borrower has more than one place of business, its chief executive office, from its address set forth in Section 20(a). In addition, Borrower shall not
make an election under the Uniform Commercial Code to treat, as the governing law for perfection of uncertificated securities, the law of any jurisdiction other than the jurisdiction of its formation. Agent agrees not to unreasonably withhold its
consent to any change in the Borrower’s principal place of business or the governing law with respect to uncertificated securities so long as (1) Borrower and any other party requested by Agent execute all documents and instruments deemed
necessary by Agent to perfect the security interests granted pursuant to the Loan Documents, (2) the Borrower pays all of the Agent’s and each Lender’s costs and expenses perfecting such security interests and (3) Borrower
delivers to Agent, as agent for the Lenders, an opinion from counsel selected by Agent opining as to the continued perfection of such security interest. 
 (i)        Compliance with Governmental Prohibitions.    No portion of the Loan proceeds will be used, disbursed or distributed by
Borrower or its Sole Member for any purpose, or to any person, in violation of any Law (as defined in Section 15 (l)) including, without limitation, any of the Terrorism Laws (as defined in Section 15 (l)). Borrower shall
provide Agent with immediate written notice (a) of any failure of any of the representations and warranties set forth in Section 15(l) of this Agreement to be true, correct and complete in all respects at any time, or (b) if
Borrower obtains knowledge that Borrower, its Sole Member, or any holder at any time of any direct or indirect equitable, legal or beneficial interest in Borrower or its Sole Member is the subject of any of the Terrorism Laws. Borrower shall
immediately and diligently take, or cause to be immediately and diligently taken, all necessary action to comply with all Terrorism Laws and to cause the representations and warranties set forth in Section 15(l) to be true, correct and
complete in all respects. 
 (j)        No
Distributions.    Borrower shall not make any distributions to its partners, members or shareholders after the occurrence and during the continuation of an Event of Default. 

  
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 (k)        Patriot Act
Compliance.    Borrower will use its good faith and commercially reasonable efforts to comply with the Patriot Act (as defined below) and all applicable requirements of Governmental Authorities having jurisdiction over
Borrower and the Property, including those relating to money laundering and terrorism. Agent shall have the right to audit Borrower’s compliance with the Patriot Act and all applicable requirements of Governmental Authorities having
jurisdiction over Borrower and the Property, including those relating to money laundering and terrorism. In the event that Borrower fails to comply with the Patriot Act or any such requirements of Governmental Authorities, then Agent may, at its
option, cause Borrower to comply therewith and any and all reasonable costs and expenses incurred by Agent and/or the Lenders in connection therewith shall be secured by the Mortgage and the other Loan Documents and shall be immediately due and
payable. For purposes hereof, the term “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may be amended
from time to time, and corresponding provisions of future laws. 
 Neither Borrower nor any member of Borrower
or member or partner of such member nor to Borrower’s Knowledge, any owner of a direct or indirect interest in Borrower (a) is listed on any Government Lists (as defined below), (b) is a person who has been determined by competent
authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or in any enabling legislation
or other Presidential Executive Orders in respect thereof, (c) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense (as defined below), or (d) is
currently under investigation by any governmental authority for alleged criminal activity. For purposes hereof, the term “Patriot Act Offense” means any violation of the criminal laws of the United States of America or of any of the
several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under
(a) the criminal laws against terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or the (e) Patriot Act. “Patriot
Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government Lists” means (i) the Specially Designated Nationals
and Blocked Persons Lists maintained by Office of Foreign Assets Control (“OFAC”), (ii) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of
OFAC that Agent notified Borrower in writing is now included in “Governmental Lists”, or (iii) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other government
authority or pursuant to any Executive Order of the President of the United States of America that Agent notified Borrower in writing is now included in “Governmental Lists”. 

(l)        Partial Satisfaction.  Borrower agrees not to send
Agent payments marked “paid in full,” “without recourse,” or similar language. If Borrower sends such a payment, Agent may accept it without losing any of Agent’s and Lenders’ rights under the Loan Documents, and
Borrower will remain obligated to pay any further amounts owed to the Agent and the Lenders. 

  
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 (m)         Property
Manager.    The Property shall be managed at all times by a manager acceptable to Agent under the terms of a management agreement acceptable to Agent. Agent hereby accepts Manager as the manager and the Management Agreement
as the current management agreement. Borrower shall not retain any person as a manager of the Property without Agent’s prior written consent in each instance. 

(n)         Assumption in Non-Consolidation
Opinion.    Borrower and Sole Member shall each conduct its business so that the assumptions (with respect to each Person) made in that certain substantive non-consolidation opinion letter delivered by Borrower’s counsel
in connection with the Loan, shall be true and correct in all respects. 

(o)         Operating Covenants. 

(i)       Borrower shall comply with all laws, rules and regulations of any
Governmental Authority having jurisdiction over the Property, including without limitation, all laws, rules and regulations relating to trade and business licenses for the Property; 

(ii)      Borrower further covenants and agrees that it shall maintain and operate
the Property as a Seniors Housing Facility at all times in accordance with the standards required by any applicable Permits and as required by any regulatory authority, that it shall maintain in good standing all Permits, and that it shall cause to
renew and extend all such required Permits, and shall not fail to take any action necessary to keep all such Permits in good standing and full force and effect. Borrower will immediately provide Lender with any notice or order of a violation which
may otherwise have an adverse impact on the Property, its operations or its compliance with licensing and regulatory requirements. 
 (iii)     Borrower shall promptly deliver to Agent a copy of each financial statement, business plan, budget, capital expenditures plan, notice, report and estimate
received by it from the Manager under the Management Agreement; and 

13.        Further Assurances.  Borrower shall, from time to
time, upon Agent’s request, execute, deliver, record and furnish such documents and do such other acts as Agent may reasonably deem necessary or desirable to (i) perfect and maintain valid liens upon the security contemplated by the Loan
Documents, (ii) correct any errors of a typographical or other manifest nature which may be contained in any of the Loan Documents, (iii) evidence Borrower’s compliance with the Loan Documents, and (iv) consummate fully and carry
out the intent of the transactions contemplated under this Agreement or the Loan Documents. Borrower shall also cause to be delivered to the Agent, as agent of the Lenders, such opinions of counsel (in form and substance reasonably satisfactory to
the Agent and from counsel reasonably acceptable to the Agent) as the Agent may from time to time reasonably request because of a change of law, change of fact, or other legitimate reason, concerning any material matters incident to this Agreement
or the transactions contemplated in this Agreement or the Loan Documents. 

14.        Appraisals.  Agent has the right to obtain a new
appraisal or update an existing appraisal of the Property at any time while the Loan or any portion thereof remains outstanding (a) when, in Agent’s reasonable judgment, such an appraisal is warranted as a result of Agent’s

  
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internal evaluation of the Loan, and/or (b) to comply with statutes, rules, regulations or directives of Governmental Authorities. Borrower shall pay, upon demand, all appraisers’ fees
and related expenses incurred by Agent from time to time in obtaining such appraisal reports. 

15.          General Representations and Warranties of
Borrower.  Borrower represents and warrants to Agent and the Lenders, which representations and warranties shall survive the termination of this Agreement, the repayment of the Loan, any investigations, inspections or inquiries made by
Agent or the Lenders or any of their representatives, the recording of the Mortgage, and any disbursements made by Agent or the Lenders hereunder, as follows: 
 (a)        Organization; Corporate Powers; Authorization of Borrowing. 

(i)          Organization. 

(1)        Borrower is a limited liability company which has been duly formed
and is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in the Governing Jurisdiction. 
 (2)        The Sole Member of Borrower is Cameron Park Senior Living Mezz, LLC, a Delaware limited liability company, holding a one hundred percent
(100%) interest in Borrower. 
 (ii)         Power
and Authority.    Borrower and its Sole Member, and Guarantor(s), if any, have full power and authority to execute the Loan Documents to which they are a party and to undertake and consummate the transactions contemplated
hereby and thereby, and to pay, perform and observe the conditions, covenants, agreements and obligations herein and therein contained; and the Loan Documents have been duly and validly executed by Borrower and its Sole Member and constitute the
legal, valid and binding obligations of Borrower and its Sole Member and Guarantor(s), if any, and are and will continue to be enforceable in accordance with their respective terms, except as such enforcement may be qualified or limited by
Insolvency Laws or other similar laws affecting creditors’ rights generally. 

(iii)        Not a Foreign Person.  Borrower is not a
foreign person and is a “United States Person” as such term is defined in Section 7701(a) of the Internal Revenue Code and is not a person with respect to which the applicable Laws of the Governing Jurisdiction require state income
tax withholding. 
 (iv)        No Defaults Under Existing
Agreements.  The consummation of the transactions contemplated hereby and the performance by Borrower, its Sole Member, the Guarantor(s), if any, or by any other parties which are a party thereto of their respective obligations under
the Loan Documents will not result in any breach of, or constitute a default under any other Third Party Agreements or any mortgage, deed of trust, lease, bank loan or security agreement, or any other instrument to which Borrower, its Sole Member,
the Guarantor(s), if any, or such other parties are a party or by which the Property, the Borrower, its Sole Member or such other parties may be bound or affected. 

  
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 (v)        True and
Correct Copies of Documents.    All due diligence documents required to be delivered by or on behalf of Borrower to Agent hereunder (including those due diligence documents referred to in Section 6 hereof) are
true, correct and complete copies thereof and the same have not been amended or modified except as expressly disclosed therein. 
 (vi)       No Bankruptcy Filing.    Borrower is not contemplating filing a Bankruptcy Proceeding (defined below) and Borrower has no
knowledge of any Person contemplating the filing of a Bankruptcy Proceeding against it. In addition, neither Borrower nor Sole Member has been a party to, or the subject of a Bankruptcy Proceeding for the past ten (10) years. 

(vii)      Full and Accurate Disclosure.    No statement
of fact made by Borrower in any Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein not misleading. There is no material fact presently known to Borrower
that has not been disclosed to Agent which might have a Material Adverse Effect. All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Agent in respect of Borrower and, to
Borrower’s Knowledge, the Property (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of Borrower and the Property as of the date of such reports, and (iii) to the
extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP consistently applied throughout the periods covered, except as disclosed therein. Borrower has no contingent liabilities, liabilities for
delinquent taxes, unusual forward or long-term commitments, unrealized or anticipated losses from any unfavorable commitments or any liabilities or obligations not expressly permitted by this Agreement. Since the date of such financial statements,
there has been no materially adverse change in the financial condition, operations or business of Borrower or, to Borrower’s Knowledge, the Property from that set forth in said financial statements. 

(viii)     Tax Filings.  To the extent required, Borrower has filed (or
has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Borrower.
Borrower believes that its tax returns (if any) properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon
audit. 
 (ix)        Name; Principal Place of
Business.  Borrower does not use and will not use any trade name and has not done and will not do business under any name other than its actual name set forth herein. The principal place of business of Borrower is its primary address
for notices as set forth in Section 20(a) hereof, and Borrower has no other place of business. 

  
 39 

 (x)        Other
Debt.  There is no indebtedness with respect to the Property or any excess cash flow or any residual interest therein, whether secured or unsecured, other than Permitted Exceptions. 

(b)        Title to Property; Matters Affecting Property. 

(i)        Title to Property.    Borrower has
and will have good and marketable fee simple title to the Property, subject only to such exceptions as have been approved in writing by Agent, and good, marketable and freely alienable title to all personal property located on the Property, subject
only to such exceptions as have been approved in writing by Agent; Borrower will protect or cause to be protected the title to the Property and Borrower will forever warrant and defend the same against any other claims of any persons or parties
whomsoever. 
 (ii)      Borrower
Interests.  Borrower’s Sole Member owns and will own one hundred percent (100%) of its ownership interests in Borrower, and except for the Mezzanine Loan, has not (and will not) transferred, conveyed, pledged or encumbered
such interests except to Agent, as agent for the Lenders, pursuant to the Loan Documents. 

(iii)     No Actions.  There are no actions, suits or proceedings at
law or in equity (including condemnation or eminent domain proceedings) currently pending, or to the knowledge of Borrower threatened, against or affecting Borrower, its Sole Member or the Property or involving the validity or enforceability of the
Loan Documents or the priority of the lien of any thereof, or for or by any Governmental Authority having or exercising jurisdiction over the Property. Borrower will promptly notify Agent of any such future actions, suits or proceedings. To
Borrower’s Knowledge, neither Borrower nor the Property is in default with respect to, or in violation of, any order, writ, injunction, decree or demand of any court or any Governmental Authority having or exercising jurisdiction over Borrower
or the Property. 
 (iv)    No Contracts Giving Rise to
Liens.    Borrower has made no contract or arrangement of any kind, that does or could give rise to a lien on the Property. Neither the Borrower nor its Sole Member has made any contract or arrangement of any kind that does
or could give rise to a lien or Encumbrance on the Sole Member’s ownership interests in Borrower. 

(v)     Utility Services.  All utility services necessary either are
available at the boundaries of the Property or all necessary steps have been taken by Borrower to insure the complete construction and installation of facilities for such services, including water supply facilities, storm and sanitary sewer
facilities, and gas, electric and telephone facilities 

(vi)    Roads.    All roads necessary for the full utilization of
the Improvements for their intended purposes have been completed and/or the necessary rights-of-way therefor have been acquired by the Governmental Authority having or exercising jurisdiction over such matters or have been dedicated to public use
and accepted by such Governmental Authority and all necessary steps have been taken by Borrower and such Governmental Authority to assure the complete use thereof. 

  
 40 

 (vii)        Compliance
with Property Agreements.  The Improvements in all respects conform to and comply with all covenants, conditions, restrictions, reservations, regulatory agreements, conditional use permits and zoning ordinances affecting the Property
whether or not recorded against the Property. 

(viii)       Personal Property.  Any personal property owned
by Borrower is vested in Borrower free and clear of all liens, Encumbrances and adverse claims not disclosed in writing to and approved by Agent. 
 (ix)          Leases.    The Leases of the Property heretofore submitted by Borrower to Agent are in full force and
effect, and there are no defaults under any of the provisions thereof, and all conditions to the effectiveness or continuing effectiveness thereof required to be satisfied by Borrower by the date hereof have been satisfied. There are no Leases of
the Property except those disclosed in the rent roll delivered pursuant to Section 6 hereof. 

(x)           Permits.  All Permits
required for the operation of the Property as a Seniors Housing Facility are or will be in effect and will remain in effect and the Property and its contemplated use and operation comply or will comply therewith. 

(c)        Financial Statements.    The financial
statements heretofore delivered to Agent by Borrower and its Sole Member and Guarantor(s), if any, are true and correct in all respects, have been prepared in accordance with sound accounting practices, and fairly present the financial condition(s)
of the person(s) referred to therein as of the date(s) indicated; no materially adverse change has occurred in the financial condition(s) reflected in such financial statements since the date(s) shown thereon and no additional borrowings or
liabilities have been made or incurred by such person(s) since the date(s) thereof other than the borrowing contemplated hereby or other borrowings disclosed in writing to and approved by Agent. 

(d)        No Loan Broker.  Other than Preferred Capital
Advisors Inc. and Sequoia Capital Partners Inc., Borrower has not dealt with any person, firm or corporation who is or may be entitled to any finder’s fee, brokerage commission, loan commission or other sum in connection with the execution of
this Agreement, the consummation of the transactions contemplated hereby or the making of the Loan by Agent and the Lenders to Borrower. Borrower does hereby indemnify and agree to defend and hold Agent and the Lenders harmless from and against any
and all loss, liability or expense, including court costs and reasonable attorneys’ fees and expenses, which Agent and/or the Lenders may suffer or sustain should such warranty or representation prove inaccurate in whole or in part. 

(e)        No Default.  There is no default under the Loan
Documents on the part of Borrower, its Sole Member or Guarantor(s), if any, or the other parties signatory thereto, and no event has occurred and is continuing which, with the giving of notice or the passage of time, or both, would constitute a
default by Borrower, its Sole Member or any Guarantor(s), if any, under any thereof. 

  
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 (f)        Lawful
Interest.  The amounts to be received by Agent and the Lenders as interest payments under the Note shall constitute lawful interest and shall be neither usurious nor illegal under the laws of the Governing Jurisdiction (defined below).

 (g)        RICO.  To the best of Borrower’s
Knowledge, there are no actions, suits or proceedings under the Racketeer Influenced and Corrupt Organization Act of 1970, 18 U.S.C. Sections 1961-1968 (“RICO”), or any other federal or state law for which forfeiture of assets is a
potential penalty (collectively, “RICO Related Laws”), currently pending or threatened against Borrower, its Sole Member or any of such parties’ partners, shareholders or Affiliates. Borrower will promptly notify Agent of any
such future actions, suits or proceedings. 

(h)        ERISA.  In the event the ownership of any class of
equity interests of the Borrower by Benefit Plan Investors is “significant” as defined in paragraph (f) of the Plan Asset Regulation, the Borrower represents and warrants that it qualifies as a “real estate operating
company” as defined in paragraph (e) of the Plan Asset Regulation. 

(i)        Business Purpose.  The undersigned represents and
agrees that the Loan evidences indebtedness arising from the regular conduct of Borrower’s business (which is carried on for the purpose of profit and not for household purposes), and that the indebtedness evidenced and secured by the Loan
Documents constitutes a business loan under applicable Law and is not usurious. 

(j)        Solvency.  As of the date hereof, the Borrower is
solvent and able to pay its debts from its assets as the same shall become shall due and payable. 

(k)        Adequate Capitalization.    As of the date
hereof, the Borrower and Guarantor have adequate capitalization for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. 

(l)        Violations of Governmental Prohibitions.  Neither
the making of the Loan, nor the receipt of Loan proceeds by Borrower or its Sole Member, violates any federal, state, county, municipal and other governmental and quasi-governmental statutes, laws, rules, orders, regulations, ordinances, judgments
or decrees (collectively, “Law” or “Laws”, as applicable) applicable to such parties, including, without limitation, any of the Terrorism Laws (defined below). Neither the making of the Loan, nor the receipt of Loan
proceeds by Borrower, its Sole Member or any principal, violates any of the Terrorism Laws applicable to the Sole Member. To Borrower’s best knowledge, no holder of any direct or indirect equitable, legal or beneficial interest in Borrower or
its Sole Member is the subject of any of the Terrorism Laws. No portion of the Loan proceeds will be used, disbursed or distributed by Borrower for any purpose, or to any person, directly or indirectly, in violation of any Law including, without
limitation, any of the Terrorism Laws. “Terrorism Laws” means Executive Order 13224 issued by the President of the United States of America, the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal
Regulations), the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), and the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal
Regulations), and all other 

  
 42 

 
present and future federal, state and local laws, ordinances, regulations, policies and any other requirements of any Governmental Authority (including, without limitation, the United States
Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and acts of war, each as hereafter supplemented, amended or modified from time to time, and the present and future
rules, regulations and guidance documents promulgated under any of the foregoing, or under similar laws, ordinances, regulations, policies or requirements of other states or localities. 

(m)        No Separate Insurance.  Borrower does not carry any
separate insurance whatsoever which is concurrent in form or contributing in the event of loss with that required under Section 8 hereof or under the Mortgage. 

(n)         Federal Reserve Regulations; Investment Company
Act.    No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or
for any other purpose that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Law or any Loan Document. Borrower is not (i) an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (ii) a “holding company” or a “subsidiary company” of a “holding company”
or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money. 

(o)         No Other Indebtedness .  Borrower has no
indebtedness (and will have no indebtedness) (other than (i) the Mezzanine Loan, and (ii) that certain existing loan (“Existing Loan”) made by (x) Bank of the West, a California banking corporation, and Mechanics
Bank, a California banking corporation (“Existing Lenders”), to Borrower in the original principal amount of $56,700,000.00 as evidenced by a promissory note, dated on or about May 27, 2008, from Borrower to Existing Lenders,
which Existing Loan (and all liens created in connection therewith) shall, upon the funding of the Loan, be fully satisfied and removed from record, Borrower shall retain no continuing liability, actual or contingent, and no recourse against any
portion of the Property shall be available under any circumstance) (and will have no indebtedness) other than (i) the Loan; (ii) the Mezzanine Loan; and (iii) unsecured trade debt not to exceed two percent (2%) of the Loan amount
in the aggregate, which is not evidenced by a note and is incurred in the ordinary course of its business in connection with owning, operating and maintaining of the Property and is paid within thirty (30) days from the date incurred.

 (p)         Recycled Entity Representations
.  Borrower hereby further represents, warrants and certifies to and for the benefit and reliance of Agent and the Lenders that (i) upon the closing of the Loan, the Property and Borrower shall have been fully released from the
Existing Loan, Borrower shall not have any continuing liability, actual or contingent, for the Existing Loan, and no recourse whatsoever against any portion of the Property shall be available to satisfy the Existing Loan under any circumstance,
(ii) Borrower has provided Agent with true, correct and complete copies of (A) Borrower’s current (and since the date of its inception) 

  
 43 

 
financial statements, (B) Borrower’s current (and since the date of its inception) operating agreement (and all amendments and modifications thereto) (collectively,
“Borrower’s Organizational Documents”), and (C) the loan documents for the Existing Loan, (iii) Borrower has at all times prior to the date of the disbursement of the Loan conducted its affairs as a special purpose
bankruptcy remote entity in substantial accordance with (A) the provisions of Section 23 below, (B) the provisions of Borrower’s Organizational Documents, and (C) the documents evidencing the Existing Loans, and
(iv) Borrower’s certifications and statements set forth in the Borrower’s Certificate entered into in connection with the Loan are true and correct in all respects. 

(q)         Third Party Agreements.   Each of the Third Party
Agreements is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice or both would constitute a default thereunder or otherwise give rise
to a termination right. 
 (r)         Accounts.
  None of the Accounts are in the name of any Person other than Borrower, as pledgor, or Agent, as pledgee. 
 (s)         Management Agreements. 
 (i)         The Management Agreement is in full force and effect and is valid and enforceable in all material respects, subject in each case to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; there are no defaults, breaches or violations thereunder by
Borrower or, to Borrower’s Knowledge, any other party thereto, and to Borrower’s Knowledge, there are no conditions (other than payments that are due but not yet delinquent and other non-delinquent executory obligations) that, with the
passage of time or the giving of notice, or both, would constitute a default by any party thereunder, where the effect of such default would have a Material Adverse Effect on the value, use, operation or maintenance of the Property or on
Borrower’s ability to perform its respective obligations. Neither the execution and delivery of the Loan Documents, Borrower’s performance thereunder, the recordation of the Mortgage, nor the exercise of any remedies by Agent, will
adversely affect Borrower’s rights under the Management Agreement. 
 (ii)
        To Borrower’s Knowledge, Manager (i) has full power and authority and the legal right to manage and operate (as applicable) the Property it operates and to conduct the business in which it is
currently engaged with respect to the Property, (ii) is duly qualified or licensed and is in good standing under the laws of each jurisdiction where its management or operation of the Property requires such qualification, and (iii) is in
compliance with all Laws applicable to the Property operated or managed by it, or applicable to the operation or management thereof. 
 (iii)         Borrower has not mortgaged, pledged or otherwise encumbered the Management Agreement or its rights thereunder. 

  
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 (t)         Furniture and
Equipment.   Except as disclosed to Agent prior to execution of this Agreement, all Furniture and Equipment necessary for the general operation, use and occupancy of the Property have been installed or incorporated into the Property
and Borrower is the absolute owner of all of the same free and clear of all chattel mortgages, conditional vendor’s liens and other liens and/or security interests, other than the Mortgage and the security interested created by the other Loan
Documents or as permitted by this Agreement. 
 (u)        
Employees.     Borrower has no employees. As of the date of this Agreement, Borrower does not have any obligations under any collective bargaining agreements. 

(v)         Seniors Housing Facility. 

(i)         The Property is duly licensed as a “Residential Care
Elderly” and is in all respects otherwise legally authorized to operate the Property as a Seniors Housing Facility, under the applicable laws of California. 

(ii)        Borrower and the Property (and the operation thereof) are in
compliance in all material respects with the applicable provisions of all laws, statutes, regulations, ordinances, orders, standards, restrictions and rules of any federal, state or local government or quasi-government body, agency, board or
authority having jurisdiction over the operation of the Property, including, without limitation: (i) health care and fire safety codes; (ii) design and construction requirements, (iii) laws regulating the handling and disposal of
medical or biological waste; (iv) the applicable provisions of Seniors Housing Facility laws, rules, regulations and published interpretations thereof to which the Borrower or the Property is subject; (v) privacy, security and billing
standards such as those set forth in HIPAA, and (vi) all criteria established to classify the Property as housing for older persons under the Fair Housing Amendments Act of 1988 and the Housing for Older Persons Act of 1995; 

(iii)       If required, Borrower has a current provider agreement under any and
all applicable federal, state and local laws for reimbursement: (a) to a Seniors Housing Facility; or (b) for other type of care provided at such facility. There is no decision not to renew any provider agreement related to the Property,
nor is there any action pending or threatened to impose alternative, interim or final sanctions with respect to the Property; 

  
 45 

 (iv)         Borrower and
the Property are not subject to any proceeding, suit or investigation by any federal, state or local government or quasi-government body, agency, board authority or any other administrative or investigative body which may result in the imposition of
a fine or an alternative, interim or final sanction, or which would have a Material Adverse Effect on Borrower or the operation of the Property, or which would result in the appointment of a receiver or manager or would result in the revocation,
transfer, surrender, suspension or other impairment of the Licenses for the Property to operate as a Seniors Housing Facility; 
 (v)          Upon Lender’s request and subject to privacy laws, copies of resident care agreements and resident occupancy agreements shall be
provided to Lender. All resident records at the Property are true and correct in all material respects; 

(vi)         Neither the execution and delivery of the Note, the Mortgage
or the Loan Documents, Borrower’s performance thereunder, nor the recordation of the Mortgage will adversely affect the Permits necessary for the operation of the Property as a Seniors Housing Facility in California. 

(vii)       Borrower is not a participant in any federal program whereby any
federal, state or local, government or quasi-governmental body, agency, board or other authority may have the right to recover funds by reason of the advance of federal funds. Borrower has received no notice, and is not aware of any violation of
applicable antitrust laws of any federal, state or local, government or quasi-government body, agency, board or other authority; and 
 (viii)       Except as otherwise specifically disclosed to the Lender in writing, in the event any existing Lease or the Management Agreement is terminated or Lender
acquires the Property through foreclosure or otherwise, neither Borrower, Lender, any subsequent operator or manager, nor any subsequent purchaser (through foreclosure or otherwise) must obtain a certificate of need from any applicable state health
care regulatory authority or agency (other than giving such notice required under the applicable state law or regulation) prior to applying for any applicable Permits necessary for the operation of the Property as a Seniors Housing Facility,
provided that no service or unit complement is changed. 
 (ix)
        Attached as Schedule 2 to this Agreement is a correct and complete list of all existing accounts receivable which exceed $50,000 (for a period of 90 days), their age and all accounts receivable
(including amounts) which have exceeded such amount during the past twelve (12) months. 
 (x)
          Attached as Schedule 3 to this Agreement is a correct and complete list of all trademarks owned by or licensed to the Borrower which are used in the business of the Property.

 (xi)          Attached as Schedule 4 to this
Agreement is a correct and complete list of all of the Borrower’s bank accounts (including those held by or in the name of the Manager). 

  
 46 

 (xii)       Attached as Schedule
5 to this Agreement is a correct and complete list of all contracts material to the Borrower’s operation, management, maintenance and use of the Property as a Seniors Housing Facility. Each such contract is currently in full force and
effect and, to Borrower’s Knowledge, no event of default or any event which, with the passage of time or the giving of notice, or both, would become an event of default, has occurred and is continuing under any such contract. 

(xiii)      Attached as Schedule 6 to this Agreement is a correct and complete
list of and Borrower has obtained, all Permits necessary for the operation, management, maintenance and use of the Property as a Seniors Housing Facility. 
 (xiv)     Attached as Schedule 7 to this Agreement is a correct and complete list of all personal property necessary for the operation, management, maintenance and use of
the Property which is leased or in which a person other than the Borrower maintains or retains some interest. 

(xv)       Attached as Schedule 8 to this Agreement is a correct and
complete list of all automobiles, vans and other vehicles owned or operated by the Borrower or Manager in connection with the operation, management, maintenance and use of the Property. 

(xvi)      Attached as Exhibit C to this Agreement is a correct and complete
copy of the current budget for the Property and any business plans and projections currently governing the planning and operation of the Property’s business. Any such projections are the Borrower’s good faith and reasonable estimates of
the likely results of operations of the Property for the periods indicated and are based on the Borrower’s and Manager’s study of and experience with the continuing care retirement community business giving due consideration to prevailing
demographic and economic conditions. 
 (w)       Litigation, Claims and
Proceedings.   Except as disclosed on Schedule 9 to this Agreement, there are not currently and have not been in the last twelve (12) months, (a) any actions, suits or proceedings against or, to Borrower’s
Knowledge, threatened against or affecting the Borrower or the Property, or (b) any disciplinary, regulatory or criminal actions, investigations or proceedings by any regulatory or governmental entity, an adverse decision in which has had or
would have a Material Adverse Effect on the financial condition of the Borrower or the Property, the reputation of the Borrower, or the ability of the Borrower to performs its obligations under the Loan Documents. 

(x)         A certificate of authority to offer continuing care contracts under
applicable Law has not been issued with respect to the Property and is not needed under applicable Law for the services and level of care currently being offered and provided at the Property. 

(y)         Neither Borrower, nor any Affiliate of Borrower, or Manager is
receiving payments from any governmental payor (i.e., Medicare, Medicaid, etc.) with respect to the Property. Prior to receiving any payments from any governmental payor with respect to the 

  
 47 

 
Property after the date of this Agreement, Borrower shall obtain all necessary certifications and licenses and deliver Agent evidence of such certifications and licenses. 

16.         Event of Default. 

 (a)       Events of Default.   Borrower shall be in default under
this Agreement upon the occurrence of any of the following events (hereinafter referred to as an “Event of Default”): 
 (i)         Non-Payment.   The failure of Borrower to pay any installment of principal and/or interest due and payable under the Note,
including, but not limited to, Base Interest, or any other sum due and payable by Borrower to Agent or to any other person under any of the Loan Documents, including deposits required under any Account Agreement, within five (5) days following
the date when the same shall be due and payable hereunder or thereunder; or 

(ii)        Waste.   Except for the work performed pursuant
to the Annual Budget, the actual or threatened waste, removal, demolition or alteration of the Property or any part thereof without the prior written consent in each instance of Agent; or 

(iii)       Insurance.   The failure of Borrower to keep in force
any insurance policy required hereunder or to deliver such policy or evidence of its renewal to Agent; or 

(iv)       Reports and Documents.   The failure of Borrower to
deliver any notice, report, assignment, certificate, instrument or other document which Borrower is required to deliver to Agent under any of the Loan Documents within thirty (30) days following written demand by Agent therefor; or 

(v)        Sale, Encumbrance or Other Indebtedness.   The
taking of any action by Borrower, its Sole Member or any other person contrary to the provisions of Section 12(b) of this Agreement (and Agent, as the agent for the Lenders, shall not be required to demonstrate any actual impairment of
the security or any increased risk of default in order to exercise any of its remedies with respect to an Event of Default under this Section 16(a)(v)); or 

(vi)       Representations and Warranties.   The failure of
any warranty or representation made in this Agreement or in any other Loan Document or in any notice, report, assignment, certificate or other document given by Borrower to Agent on the date hereof or at any time hereafter to be true and correct in
any material respect as of the date made; or 
 (vii)      a transfer or
change in the holder of the Permits authorizing the Property to operate as a Seniors Housing Facility; or 

(viii)     a transfer of the Borrower’s or Manager’s respective interest(s) in
the Management Agreement; or 

  
 48 

 (ix)        any loss by
Borrower, Manager or any manager (as applicable) of any Permits or other legal authority necessary to operate the Property as a Seniors Housing Facility, or any failure by Borrower, Manager or any manager (as applicable) to comply strictly with any
consent order or decree or to correct, within the time deadlines set by any federal, state or local licensing agency, any deficiency where such failure results, or under applicable laws and regulations, is reasonably likely to result, in an action
by such agency with respect to the Property that may have a Material Adverse Effect on the income and operations of the Property or Borrower’s interest in the Property, including, without limitation, a termination, revocation or suspension of
any applicable Permits, necessary for the operation of the Property as a Seniors Housing Facility; or 

(x)         Other Breaches under the Note or this Agreement.
  The failure of Borrower to perform and observe any covenant, obligation, agreement or undertaking under the Note or this Agreement not otherwise referred to in this Section 16 within thirty (30) days following written
notice thereof from Agent or, if such failure cannot with due diligence be cured within thirty (30) days, such longer period, not to exceed sixty (60) days in the aggregate from and after the giving of such written notice, as may be
necessary to cure the same with due diligence, provided Borrower commences to cure within such thirty (30) days and proceeds diligently thereafter to cure the same; or 

(xi)        Other Breaches Under Other Loan Documents.   The
failure of Borrower or any guarantor, indemnitor or obligor to perform and observe any covenant, obligation, agreement or undertaking under any Loan Document other than the Note following such notice and/or grace period, if any, as may be provided
therein for curing such failure; or 
 (xii)       Bankruptcy
Proceedings.   If the Borrower or the Guarantor(s), if any, shall (each of the following proceedings or events are collectively referred to as “Bankruptcy Proceedings”): 

(1)         Become insolvent, make a transfer in fraud of, or an assignment for
the benefit of, creditors, or admit in writing its inability, or is unable, to pay debts as they become due; or 
 (2)         Have a receiver, custodian, liquidator or trustee appointed for all or substantially all of its assets or for the Property in any proceeding brought by
the Borrower or any such receiver or trustee is appointed in any proceeding brought against the Borrower or the Property and such appointment is not promptly contested and is not dismissed or discharged within ninety (90) days after such
appointment; or 
 (3)         File a petition under Title 11 of the
United States Code as amended or under any similar Federal or state law or statute; or 
 (4)
        Have a petition filed against it commencing an involuntary case under any present or future Federal or state bankruptcy or similar law and such petition is not dismissed or discharged within ninety
(90) days after the filing thereof; or 

  
 49 

   (5)        Request any
composition, rearrangement, liquidation, extension, reorganization or other relief of debtors now or hereafter existing; or 
 (xiii)     Attachment.   The taking, attaching or sequestering on execution or other process of law of the Property in any action against Borrower; or

 (xiv)      Priority.   The upholding by any court of
competent jurisdiction or consent to by Borrower of any claim of priority to this Agreement or any of the Loan Documents by title, lien or otherwise; or 
 (xv)       Third Party Agreements. 
  (1)         Borrower fails to cure any default by Borrower under any of the Leases or any of the Third Party Agreements within the shorter of thirty
(30) days following the giving of notice of default by any party thereunder or the applicable grace period set forth therein; or 
  (2)         Borrower fails to diligently enforce its rights and remedies against Manager in the event of a material default by Manager under the Management
Agreement. 
 (xvi)     Filing of Charges Under RICO.   The filing
of formal charges, including the issuance of an indictment, by any governmental or quasi-governmental entity under RICO or any RICO Related Law, against Borrower, its Sole Member, Guarantor(s), if any, or against any such party’s partners,
shareholders or Affiliates; or 
 (xvii)    Service of Bonded Notice to Withhold Loan
Funds.   The service upon Agent, as agent for the Lenders, in accordance with the laws of the Governing Jurisdiction of a bonded notice to withhold Loan funds from Borrower and within thirty (30) Business Days after Agent’s
receipt of such notice either (a) the claim set forth therein is not discharged by Borrower or (b) if the amount claimed is disputed in good faith by Borrower or Borrower’s contractor, Borrower fails to deliver to Agent, as agent for
the Lenders, a bond, in form and substance and issued by a surety company acceptable to Agent, insuring Agent, as agent for the Lenders, against such claim; or 

(xviii)    Enjoinder of Construction or Performance of Obligations.   The making
of any order or the entry of any decree by a court of competent jurisdiction enjoining or prohibiting Borrower and Agent, or either of them, from performing or satisfying their respective covenants, obligations or conditions contained herein and
such proceedings are not discontinued or such order or decree is not vacated within sixty (60) days after the making or granting thereof; or 
 (xix)      Failure to Discharge Mechanics’ Liens.   The filing for record of a mechanic’s lien or materialman’s lien against the Property or
the filing of an action to foreclose such lien and within thirty (30) Business Days after the filing thereof either (a) the claim set forth therein is not discharged by Borrower or (b) if the amount claimed is disputed in good faith
by 

  
 50 

 
Borrower or any contractor, Borrower fails to provide a bond for such lien or to prosecute the dispute diligently; or 

(xx)       Termination of Permits.   If any material license
necessary to the operation of the Property as a Seniors Housing Facility shall have been terminated or suspended for more than thirty (30) days and Agent reasonably determines that such termination or suspension is reasonably likely to have a
Material Adverse Effect; or 
 (xxi)      Replacement
Manager.   Manager ceases for any reason to act in that capacity and a replacement manager approved by Agent has not been put in place within thirty (30) days thereafter; or 

(xxii)     Termination of Business.   If Borrower ceases to do business as a
Seniors Housing Facility with the level of care and service provided as of the date hereof or terminates such business for any reason whatsoever (other than a temporary cessation in connection with any continuing and diligent renovation or
restoration of the Property following a casualty or condemnation). 

(b)         Right to Cure Non-Monetary Default. 

(i)         Except as provided in Section 16(b)(ii) below,
upon the occurrence of any Event of Default, Agent shall not accelerate the debt evidenced by the Note, make any payments for which Borrower is primarily liable or foreclose upon or attach any assets of Borrower until thirty (30) days after
notice is given by Agent of the occurrence of an Event of Default not described in Section 16(b)(ii) below, provided (A) within three (3) days after the delivery or mailing of the notice of default Borrower commences its cure
and submits to Agent in writing its plan to cure, and (B) said cure is continuously pursued by Borrower with due diligence. If said Event of Default is not reasonably capable of being cured within thirty (30) days, Borrower shall have such
additional time as is reasonably necessary to complete the cure, but in no event more than thirty (30) days after the delivery or mailing of the notice of default; provided: (i) said Event of Default is in Agent’s reasonable judgment
curable within said period; (ii) Borrower provides Agent with written, detailed progress reports at least every ten (10) days until cure is complete; and (iii) Borrower continuously and diligently pursues said cure. 

(ii)        Notwithstanding anything stated to the contrary in
Section 16(b)(i) herein, the cure period provided for in Section 16(b)(i) herein shall not apply in any of the following circumstances: 

(1)         the occurrence of an Event of Default described in
Section 16(a)(i) herein; or 
 (2)         the occurrence
of an Event of Default described in Section 16(a)(v) herein; or 

  
 51 

 (3)         in any circumstance
when a delay in effecting a cure is, in the reasonable judgment of Agent, likely to result in any security being damaged, becoming uninsured or the value thereof being materially and adversely affected; or 

(4)         any failure to proceed with the construction or repair of
Improvements to the Property as required by this Agreement; or 
 (5)
        the occurrence of any Event of Default described in Section 16(a)(ix) herein; or 
 (6)         any Event of Default which Agent reasonably determines is not capable of being cured within the requisite period. 

(iii)         Notwithstanding anything stated to the contrary in this
Agreement or in any of the other Loan Documents, but subject to the provisions of Section 16(b)(ii) herein, the provisions of Section 16(b)(i) herein shall apply to Events of Default under this Agreement and under the Loan
Documents, and unless expressly stated to the contrary in such documents, any cure period referred to therein shall be deemed to incorporate the provisions of Section 16(b) herein. If the provisions of any said Loan Documents are
inconsistent with the provisions of Section 16(b) herein, the provisions of Section 16(b) herein shall be controlling. Where additional notice or cure periods are provided in the Note or any other Loan Documents, or are
required by any other contract or by law, said periods and those contained in this Section 16(b) shall run concurrently. Nothing in this Section 16(b) herein shall be construed as extending the term of the Stated Maturity,
the Note or the date upon which an Event of Default occurs, and no decision to forego any remedy for any given Event of Default shall be deemed a waiver on the part of the Agent or any Lender of any right relating to any other Event of Default. The
provisions of this Section 16(b)(iii) shall be strictly construed and shall not impair the exercise of any remedy for an Event of Default referred to in Section 16(b)(ii) herein, including, without limitation, the seeking of
any mandatory or prohibitive injunction or restraining order. 

17.         Remedies. 

(a)         Actions upon Event of Default.   If an Event of
Default shall occur, Agent, in addition to any other rights of Agent, as agent for the Lenders, under the Loan Documents, may at its option and without prior notice or demand, declare the unpaid principal balance of the Note and all accrued but
unpaid interest thereon, as well as all other sums owing under the Loan Documents, immediately due and payable, except that Agent and the Lenders may make any advances after the happening of any one or more of said Events of Default without thereby
waiving the right to demand payment in full of the Note and such other amounts and without liability to make any other or further advances. 
 (b)         Appointment of Agent as Attorney-in-Fact.   Borrower hereby irrevocably, unconditionally and presently appoints Agent, as agent for the
Lenders, as Borrower’s attorney-in-fact, with full power of substitution, to be exercised by Agent only upon the occurrence of an Event of Default, to exercise its rights under the Mortgage (in its own name or the name of a designee) for
purposes of preserving and protecting the Property or the collateral pledged under 

  
 52 

 
the Mortgage; and, as Agent in its sole discretion deems necessary or proper, to execute, acknowledge (when appropriate) and deliver all instruments and documents in the name of Borrower which
may be necessary or desirable in order to do any and every act which Borrower might do on its own behalf. This power of attorney is a power coupled with an interest and is irrevocable. 

(c)         Cross-Default to Note and Other Loan Documents.
  At the option of Agent, any default by Borrower under this Agreement or in the performance of any of Borrower’s covenants, agreements or obligations contained herein, shall constitute a default under the Note, the Mortgage or any of
the other Loan Documents to the same extent as though the Note had by its own terms become due and payable at maturity and payment thereof had been refused, and in such event Agent, as agent for the Lenders, may, without liability to Borrower,
assert and exercise any and all rights and remedies provided for herein or in the Note, the Mortgage or any of the other Loan Documents or otherwise as may be provided by law. Such rights and remedies may be asserted concurrently or successively
from time to time (either before or after commencement of foreclosure proceedings or before or after the exercise of any other remedy) until the Note, including interest thereon, and all other indebtedness of Borrower under this Agreement and the
other Loan Documents, have been paid in full. 
 (d)         After an
Event of Default, at Lender’s option, Lender is further authorized to give notice to all payors of Third Party Payments instructing them to pay all Third Party Payments which would be otherwise paid to Borrower or Manager to Lender, to the
extent permitted by law. 
 (e)         In order to induce Lender to
lend funds hereunder, Borrower hereby agrees upon the occurrence of an Event of Default and at the option of Lender, that it shall continue to provide, and cause Manager to provide, all necessary services required under any Lease or applicable
licensing or regulatory requirements and shall fully cooperate with Lender and any receiver as may be appointed by a court, in performing these services and agrees to arrange for an orderly transition to a replacement operator, manager or provider
of the necessary services, and to execute promptly all applications, assignments, consents and documents requested by Lender to facilitate such transition. In addition, if after the occurrence of an Event of Default Lender elects to have the
Management Agreement terminated, then until such time as a replacement Manager approved by Lender has been engaged, Borrower shall continue to provide all required services to maintain the Property in full compliance with all licensing and
regulatory requirements as a Seniors Housing Facility. Borrower acknowledges that its failure to perform or to cause the performance of this service shall constitute a form of waste of the Property, causing irreparable harm to Lender and the
Property, and shall constitute sufficient cause for the appointment of a receiver. 

18.         Joint and Several Liability.   If Borrower is more
than one entity, the liability of each Borrower under this Agreement shall be joint and several. 

19.         Title Endorsements; Tax Searches; Administrative Costs.
  From time to time during the term of the Loan, Agent may, at Borrower’s sole cost and expense, obtain or require 

  
 53 

 
Borrower to obtain, from such person or entity as Agent shall approve, in its discretion, such (a) title insurance endorsements to be attached to the Title Policy, in form and substance
satisfactory to Agent, (b) surveys of the Property, (c) tax and insurance service contracts regarding the Property, and (d) title searches, service contracts or other information regarding Borrower or the Property as Agent deems
reasonably necessary. In connection herewith, Borrower shall be responsible for the payment of all costs incurred by Borrower or Agent in obtaining any of the foregoing including recording fees, attorneys’ and accountants’ fees,
administrative costs and title and other insurance premiums. 

20.        Miscellaneous. 

  (a)         Notices.   Any notice, election,
communication, request, approval or other document or demand required or permitted under this Agreement shall be in writing and transmitted to the applicable party either by receipted courier service, or by the United States Postal Service, first
class registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission (“Fax”), at the address or addresses indicated for such party below (and/or to such other address as such party
may from time to time by written notice designate to the other): 

  
 54 

 
					
	 To Borrower, as follows:
	  	
		
		  	 Cameron Park Senior Living Delaware, LLC

		  	 2452 Bayview Avenue

		  	 Carmel, California 93923

		  	 Attention:
 Fax:
	  	 Erik N. Pilegaard
 (831) 624-4942

		
	 With a copy to:
	  	
		  	 Larry L. Rader

		  	 3029 Merrick San Way

		  	 Carmichael, California 95608

		  	 Fax:
	  	 (916) 480-2966

			
	 To KBS as Agent or a Lender,

as follows:
	  		  	
		  	 c/o KBS Capital Advisors LLC

		  	 620 Newport Center Drive, Suite 1300

		  	 Newport Beach, CA 92660

		  	 Attention:
	  	 Brian Ragsdale

		  	 Fax:
	  	 (949) 417-6518

			
		  	 And
	  	
		
		  	 c/o KBS Capital Advisors LLC

		  	 620 Newport Center Drive, Suite 1300

		  	 Newport Beach, CA 92660

		  	 Attention:
	  	 Jeff Rader

		  	 Fax:
	  	 (949) 417-6518

			
		  	 And
	  	
		
		  	 Greenberg Traurig, LLP

		  	 3161 Michelson Drive, Suite 1000

		  	 Irvine, CA 92612

		  	 Attention:
	  	 L. Bruce Fischer and
 Scott A. Morehouse

		  	 Fax:
	  	 (949) 732-6501

 If to any other Lender to the addresses set forth in Exhibit B attached hereto. 

and shall be deemed delivered and received: (A) if delivery is made or Fax transmission completed before 5:00 p.m. recipient’s
local time on a Business Day, or if tendered for delivery between 9:00 a.m. and 5:00 p.m. recipient’s local time on a Business Day and refused, then on the date of such actual or attempted delivery or completed transmission, as evidenced by
postal 

  
 55 

 
or courier receipt or by the transmission log sheet generated by the sending Fax machine; and otherwise (B) on the Business Day next following the date of actual delivery or completed
transmission; provided, however, that any communication by Fax to be effective must be confirmed within three (3) Business Days after transmission by duplicate notice delivered as otherwise provided herein. 

(b)         Waivers.   No delay or omission of Agent in
exercising any right or power arising from any default by Borrower shall be construed as a waiver of such default or as an acquiescence therein, nor shall any single or partial exercise thereof preclude any further exercise thereof or the exercise
of any other right or power arising from any default by Borrower. No waiver of any breach of any of the covenants or conditions of this Agreement shall be construed to be a waiver of or an acquiescence in or a consent to any previous or subsequent
breach of the same or of any other condition or covenant. 
 (c)
        Agent’s Expenses; Rights of Lenders.   Borrower shall promptly pay to Agent, upon demand, with interest thereon from the date of demand at the lesser of (a) the Default
Interest Rate or (b) the maximum contract rate permitted by the Governing Jurisdiction, reasonable attorneys’ fees and all costs and other expenses paid or incurred by Agent in enforcing or exercising its rights or remedies created by,
connected with or provided for in this Agreement or any of the other Loan Documents, and payment thereof shall be secured by the Mortgage. If at any time Borrower fails, refuses or neglects to do any of the things herein provided to be done by
Borrower, Agent, as agent for the Lenders, shall have the right, but not the obligation, to do the same but at the expense and for the account of Borrower. The amount of any monies so expended or obligations so incurred by Agent and/or Lenders,
together with interest thereon at the lesser of (x) the Default Interest Rate or (y) the maximum contract rate permitted by the Governing Jurisdiction, shall be repaid to Agent forthwith upon written demand therefor and payment thereof
shall be secured by the Mortgage. 
 (d)         Agent and Lenders
Not Partner of Borrower; Borrower in Control.   Neither the execution nor the performance of any of the Loan Documents by the Agent or the Lenders, nor the exercise by the Agent, as agent for the Lenders, of any of its rights,
privileges or remedies conferred under the Loan Documents or under applicable law, shall be deemed to render the Agent or any Lender a partner or a joint venturer with the Borrower, any Guarantor of the Loan or any other person, or to render
Borrower an agent of the Agent or any Lender for any purposes. Nothing contained herein shall characterize or be deemed to characterize, or be used as a basis for characterizing, Agent or any Lender as a “mortgagee-in-possession”. Agent,
Lenders and Borrower agree that Borrower remains in control of the Property, that it determines the business plan for, and employment, management, leasing and operating directions and decisions for, the Property and for Borrower. All of Agent’s
rights, and actions taken by Agent as provided or permitted, in or under this Agreement or the other Loan Documents, are for and in its capacity as a secured lender attempting to protect the collateral security for the Loan and to collect the
indebtedness and any other amounts owing or outstanding under the Note or the Loan Documents. 

  
 56 

 (e)         No Third Party.
  This Agreement is made for the sole benefit of Borrower and Agent and Lenders and each of their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to
the exercise of any right or power of Agent and the Lenders hereunder or arising from any default by Borrower, nor shall Agent and/or the Lenders owe any duty whatsoever to any claimant for labor performed or materials furnished, to apply any
undisbursed portion of the Loan to the payment of any such claims. 
 (f)
        Time of Essence; Context.  Time is hereby declared to be of the essence of this Agreement and of every part hereof. When the context and construction so require, all words used in the
singular herein shall be deemed to have been used in the plural and the masculine shall include the feminine and the neuter and vice versa. 
 (g)         Successors and Assigns.     This Agreement may not be assigned by Borrower without the prior written consent of Agent and
each Lender. Subject to the foregoing restriction, this Agreement shall inure to the benefit of Agent and each Lender, their successors, assigns and representatives and shall bind Borrower, its successors, assigns and representatives. 

(h)         Governing Jurisdiction.     This
Agreement and all of the other Loan Documents (except as otherwise expressly provided therein with respect to the enforcement of specific remedies) shall be governed by and construed in accordance with the laws of the Governing Jurisdiction without
regard to the application of choice of law principles, and Borrower hereby consents to the personal jurisdiction of the state courts of the Governing Jurisdiction and of the United States District Court for the Central District of the Governing
Jurisdiction in any action that may be commenced by Agent, as agent for the Lenders, to enforce its rights hereunder or under the Loan Documents. 
 (i)         Entire Agreement.    This Agreement, the Notes, and all of the other Loan Documents constitute the entire understanding
between the parties hereto with respect to the subject matter hereof, superseding all prior written or oral understandings (including the provisions of that certain term sheet delivered to Agent on August 16, 2012, and may not be modified,
amended or terminated except by a written agreement signed by Agent and Borrower. Notwithstanding the foregoing, (i) the provisions of this Agreement are not intended to supersede the provisions of the Mortgage, but shall be construed as
supplemental thereto, and (ii) Agent and Lenders shall have the right to modify, amend or terminate in any manner any and all agreements between Agents and Lenders, including without limitation, Sections 25 and 26 hereof, without
the consent or signature of Borrower, Guarantor or any other obligors. Borrower hereby acknowledges that this Agreement and the other Loan Documents accurately reflect the agreements and understandings of the parties hereto with respect to the
subject matter hereof and hereby waives any claims against Agent and/or the Lenders which Borrower may now have or may hereafter acquire to the effect that the actual agreements and understandings of the parties hereto with respect to the subject
matter hereof may not be accurately set forth in this Agreement or such other Loan Documents. 

  
 57 

 (j)         Headings.
    The various headings of this Agreement are included for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof. 

(k)         Severability.   Each provision of this Agreement
shall be interpreted so as to be effective and valid under applicable law, but if any such provision shall in any respect be ineffective or invalid under such law, such ineffectiveness or invalidity shall not affect the remainder of such provision
or the remaining provisions of this Agreement. 
 (l)
        Counterparts.       This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute
but one and the same document. 
 (m)        Waiver of Jury
Trial.       BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF THE LENDER. BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS LOAN AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT, AND THAT THIS WAIVER SHALL BE
EFFECTIVE AS TO EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN. 
 (n)
        Including Means Without Limitation.   The use in this Agreement of the term “including”, and related terms such as “include”, shall in all cases mean
“including without limitation”. 
 (o)         Sole and
Absolute Discretion.     Any option, consent, approval, or discretion or similar right of Agent or any Lender set forth in this Agreement or any of the other Loan Documents may be exercised by Agent or such Lender in its
sole, absolute and unreviewable discretion, unless the provisions of this Agreement or the other Loan Documents specifically require such option, consent, approval, discretion or similar right to be exercised in Agent’s or such Lender’s
reasonable discretion. 
 (p)         Replacement Notes.
  In connection with the closing of the Loan, Borrower is executing and delivering the Notes. Thereafter, Borrower shall execute such replacement and substitute Notes (the “Replacement Note(s)”) as may be requested by
Agent from time to time to (i) replace the original Note in the event it is lost or misplaced, and (ii) facilitate the assignment by Agent or a Lender of all or part of its rights and obligations under the Loan Agreement; provided,
however, such Replacement Note(s) shall in the aggregate total the amount of the Note being replaced, and upon delivery of a Replacement Note, the applicable Lender shall conspicuously mark the face of the Note being substituted (unless such Note
has been lost or misplaced) with the following legend: “THIS NOTE HAS BEEN RENEWED AND SUBSTITUTED” and promptly return same to Borrower. 

  
 58 

 21.         Borrower
Exculpation.   Except as set forth below or as provided in the Guaranty or the Environmental Indemnity, no trustee, beneficiary, partner, shareholder, director, officer or member of Borrower (other than a Guarantor) or any trustee,
beneficiary, partner, shareholder, director, officer or member of a partner, shareholder or member of Borrower (other than a Guarantor), and no legal representative, heir or estate of any of the foregoing shall have any personal liability for
(i) the payment of any sum of money which is or may be payable hereunder or under the Loan Documents, including the repayment of the indebtedness evidenced by the Note, or (ii) the performance or discharge of any covenants or undertakings
of Borrower hereunder or under any of the Loan Documents. In the enforcement of any of its rights hereunder, Agent, as agent for the Lenders, shall proceed solely against the assets of Borrower from time to time, and any other collateral given as
security for payment of the Note or for payment or performance under the Loan Documents, and shall not seek any deficiency judgment. 
 (a)         Borrower’s Recourse Liabilities.     Nothing contained in this Section 21 shall (i) constitute a
waiver, release or impairment of the lien of the Mortgage or any obligation evidenced or secured by any of the other Loan Documents; (ii) impair the right of Agent, as agent for the Lenders, to name Borrower as a party defendant in any action
or suit under the Mortgage or any of the other Loan Documents; (iii) affect the validity or enforceability of any of the Loan Documents or any guaranty made in connection with the Loan or any of the rights and remedies of Agent, as agent for
the Lenders, thereunder; (iv) impair the right of Agent, as agent for the Lenders, to obtain the appointment of a receiver; (v) constitute a prohibition against Agent, as agent for the Lenders, to commence any other appropriate action or
proceeding in order for Lender to fully realize the lien and security granted by the Mortgage or the other Loan Documents or to exercise its remedies against all or any portion of the Property. In addition, nothing in this Section 21
shall be deemed to impede or prejudice the rights of the holder of the Note to recover (including reasonable attorney’s fees and costs) against Borrower, for and to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Agent and/or the Lenders (including reasonable attorney’s fees and costs) (collectively, the “Losses”) arising out of or in connection with the following (all such liability and obligation of Borrower for
any or all of the following being referred hereto as “Borrower’s Recourse Liabilities”) as a result of: 
 (i)         misappropriation or misapplication of funds associated with the Property, or failure to apply funds in accordance with the provisions of the Loan
Documents, including (i) lease security deposits and prepaid rents, (ii) casualty insurance proceeds and Condemnation Awards, (iii) judgments, settlements or bankruptcy claims for unpaid rent and (iv) Gross Receipts from the
Property not applied to payment of Expenses, debt service and other expenditures required by the Loan Documents (provided that Borrower may make distributions to its Members if no Event of Default exists and is continuing and Expenses are paid on a
current basis); 
 (ii)         waste in connection with the
Property; 
 (iii)        removal from the Property of any
personal property in violation of any of the Loan Documents; 

  
 59 

 (iv)         forfeiture of
the Property; 
 (v)          the intentional breach of any
of the representations and warranties set forth in the Loan Documents; 
 (vi)
       to the extent there exist adequate funds from the operation of the Property to pay for or carry insurance, the failure to pay for or carry insurance as required by the Loan Documents; 

(vii)        to the extent there exist adequate funds from the operation
of the Property to pay Taxes with respect to the Property, the failure to pay Taxes with respect to the Property when due; 
 (viii)       all reasonable costs and expenses incurred by Agent in connection with the exercise by Agent, as agent for the Lenders, of its rights and remedies under
this Agreement and the Loan Documents as a result of any of the foregoing or the matters and events listed in Section 21(b) below. 
 (ix)         Borrower’s failure to re-deposit into the Interest Shortfall Reserve Account an amount equal to the Disbursed Interest Reserve Amount in
accordance with Section 3(c)(ii) above. 
 Notwithstanding anything to the contrary in this Agreement or any of the
Loan Documents, neither Agent nor any Lender shall be deemed to have waived any right which any of them may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the
Indebtedness or to require that all collateral for the Loan shall continue to secure all of the Indebtedness in accordance with the Loan Documents. 
 (b)         Full Liability for all Indebtedness. In addition to all amounts for which Borrower is personally liable for under Section 21(a),
Borrower shall be fully liable to Agent and the Lenders for all Indebtedness (including, without limitation, all Losses incurred by Agent and the Lenders in collecting any of such amounts), and nothing in the Loan Documents shall limit the liability
of any Borrower for all Indebtedness (including, without limitation, all Losses incurred by Agent and the Lenders in collecting any of such amounts) and Agent’s agreement (as agent for the Lenders) not to pursue the personal liability of any
Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no force and effect and the Indebtedness shall become fully recourse to Borrower in the event one or more of following occurs (each, a “Forbearance Termination
Event”): 
 (i)         Any voluntary or collusive
involuntary bankruptcy or insolvency proceeding of Borrower, Sole Member, or Guarantor; 
 (ii)
        Borrower, Sole Member, or Guarantor commits fraud with respect to the Loan or the Property; 

  
 60 

 (iii)         Borrower,
Sole Member, or Guarantor violates any of the debt or transfer restrictions set forth in this Agreement and the other Loan Documents; 
 (iv)         Borrower’s breach or violation of any of the provisions of Section 23 of this Agreement; 

(v)          Borrower, Sole Member, or Guarantor commits an
intentional act that impairs the rights of Agent or the Lenders under the Loan Documents. 

(c)         The provisions of this Section 21 shall survive the
Agent’s (or its designee’s) (i) acquiring the Property pursuant to the Mortgage or and other Loan Documents (whether by foreclosure, deed in lieu of foreclosure or otherwise) or (ii) enforcement of any of the other rights and
remedies under the Loan Documents. Any amounts required to be paid under this Section 21 shall be payable on demand and shall bear interest from the date of such demand, until paid in full, at the Default Interest Rate. 

22.         Intentionally Omitted. 

23.         Special Representations, Warranties and Covenants of
Borrower.   Agent’s and each Lender’s willingness and ability to make the Loan is contingent upon, among other things, the Borrower being a Special Purpose Bankruptcy Remote Entity. Therefore, the Borrower hereby represents,
warrants and covenants to Agent and the Lenders that Borrower shall at all times be a Special Purpose Bankruptcy Remote Entity. Borrower shall not directly or indirectly make any change, amendment or modification to its organizational documents, or
otherwise take any action which could result in Borrower not being a Special Purpose Bankruptcy Remote Entity. A “Special Purpose Bankruptcy Remote Entity” shall have the meaning set forth on Schedule 1 hereto. 

24.         No Withholdings.   All sums payable by Borrower
under the Note, this Agreement and the other Loan Documents, shall be paid in full and without set-off or counterclaims and free of any deductions or withholdings for any and all Taxes. In the event that Borrower is prohibited by any law from making
any such payment free of such deductions or withholdings with respect to Taxes, then Borrower shall pay such additional amount to Agent as may be necessary in order that the actual amount received by Agent and the Lenders after such deduction or
withholding (and after payment of any additional Taxes due as a consequence of the payment of such additional amount) shall equal the amount that would have been received if such deduction or withholding were not required; provided, however, that
Borrower shall not be obligated to pay such additional amount solely because Agent and/or any Lender, although having a legal basis to do so, fails to deliver to Borrower a duly executed copy of United States Internal Revenue Service Form W-8 BEN or
W-9 or any successor form or any required renewal thereof, establishing that a full exemption exists from United States backup withholding tax, and as a result of such failure, Borrower was prohibited by the Code, from making any such payment free
of such deductions or withholding. Notwithstanding anything contained in this Section 24, in no event will Agent’s or any Lender’s failure to deliver any such forms, or any renewal or extension thereof, affect, postpone or
relieve Borrower from any obligation to pay Base Interest, 

  
 61 

 
principal and other amounts due under the Loan Documents (other than amounts due under this Section 24 as a result of Agent’s or any Lender’s failure to deliver such forms).
Such additional amount shall be due concurrently with the payment with respect to which such additional amount is owed in the amount of Taxes certified by Agent. A certificate as to the amount of Taxes submitted by Agent to Borrower setting forth
Agent’s basis for the determination of Taxes shall be conclusive evidence of the amount thereof, absent manifest error. Failure on the part of Agent to demand payment from Borrower for any Taxes attributable to any particular period shall not
constitute a waiver of Agent’s right to demand payment of such amount for any subsequent or prior period. 

25.         Agreement Among Lenders And Agent. 

(a)         Agent. 

(i)         Appointment.   Each Lender hereby
irrevocably designates and appoints KBS as the Agent of such Lender under this Agreement, the Notes, and the other Loan Documents, and each such Lender irrevocably authorizes Agent, as Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement, the Notes, and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to Agent, by the terms of this Agreement, the Notes, and the other Loan Documents, and such
other documents as are executed by and between Agent and Lenders, together with such other powers as are reasonably incidental thereto. Agent is hereby authorized to execute all Loan Documents (other than this Agreement) on behalf of Lenders.
Borrower is entitled to rely on instructions, consents and approvals given by Agent on behalf of Lenders. 

(ii)        Agent’s Standard.   Agent shall exercise all
of its powers, discretion and authority under this Agreement in good faith and in accordance with the same standards which it customarily applies to loans held solely for its own account (the “Agent’s Standard”). 

(iii)       Use of the Term “Agent”.   The term
“Agent” is used in the Loan Documents in reference to Agent merely as a matter of custom. It is intended to reflect only an administrative relationship between Agent and Lenders as independent contracting parties. In no event shall the use
of such term create or imply any fiduciary relationship or any other obligation arising under the general law of agency. Notwithstanding any provision to the contrary elsewhere in this Agreement, Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in any other documents signed by and between Agent and the Lenders, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or other document as otherwise exist against Agent in such capacity. 
 (iv)        Delegation of Duties.   Agent may execute any of its duties under this Agreement and the other Loan Documents or any other document
by and between Agent and Lenders by or through a servicer, agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of
any servicer, agents or attorneys-in-fact selected by it with 

  
 62 

 
reasonable care. 

(v)         Reliance by Agent.   Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, facsimile, e-mail, statement, order or other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity and upon advice and statements of legal counsel (including, without limitation, counsel to Borrower, Guarantors, or other obligors), the independent accountants and other
experts selected by Agent. Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with Agent. Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement and the Notes and the other Loan Documents in accordance with a request of Required Lenders or all Lenders, to the extent required, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all Lenders and all future holders of the Notes. 

(vi)        Agent in Individual Capacity.   Agent and its
affiliates may make loans to, accept deposits from and generally engage in any kind of business with Borrower, Guarantors, or other obligors, as though Agent was not Agent hereunder and under the other Loan Documents. With respect to Agent, the Loan
made by Agent or its affiliate and the Notes issued to Agent or its affiliate shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and Agent may exercise the same as though it were not Agent. The
terms “Lender” and “Lenders” shall include Agent in its individual capacities. Agent may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with Borrower, any Guarantor, or
other obligors as if Agent were not an agent hereunder. 
 (vii)      
Resignation or Removal.   Agent may resign as Agent upon thirty (30) days’ notice to Lenders and Borrower. Required Lenders may remove Agent by a vote of the Required Lenders for Agent’s gross negligence or willful
misconduct. If Agent shall be removed or if Agent shall resign as Agent under this Agreement and the other Loan Documents, then Required Lenders shall appoint from among Lenders (unless otherwise agreed by all Lenders), a successor agent for Lenders
and shall promptly notify Borrower in writing, whereupon such successor agent shall succeed to the rights, powers and duties of Agent and the term “Agent” shall mean such successor agent, effective upon its appointment, and the former
Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Notes. 

(viii)     Successor Agent.     After any retiring Agent’s
removal or resignation as Agent, the provisions of this Section 25 shall inure to the benefit of the Successor Agent as to any actions taken or omitted to be taken by it while it was Agent, under this Agreement and the other Loan
Documents. 
 (b)         Agent’s Authority and Powers;
Required Lender Approvals. 

  
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 (i)         Powers
Granted to Agent.   Agent, acting on behalf of itself and Lenders and without notice to Lenders, but subject to the limitations contained herein, shall have the right and power to take such actions as may be desirable or necessary to
carry out the routine, day to day administration of the Loan Documents, including, without limitation, the following: 
  (1)         to administer, control, manage and service the Loan; 
  (2)         to review and approve Requests for Advances; 
  (3)         except as set forth in Section 25(b)(ii), below, to give routine consents, approvals or waivers in connection with any term, provision
or condition of any Loan Document or Lease relating to the Project, subject to the terms of the Loan Documents; 
  (4)         except as set forth in Section 25(b)(ii), below, to make all decisions under the Loan Documents in connection with the day to day
administration of the Loan, including, without limitation, approval of inspections and other routine administrating and servicing matters; and 
  (5)         to collect and receive from Borrower or any third persons all Loan Recoveries (as hereinafter defined) and other payments due under the Loan
Documents (except such payments as may be made directly to Lenders under the terms of the Notes). 

(ii)        Limitations on Agent’s Actions. 

 (1)         Unanimous Consent.   Without the prior
written consent or approval of each Lender, Agent shall not: (A) reduce the interest rate of the Notes (except as provided in this Agreement) or otherwise reduce the amount of payment of any fee, principal or interest payable under the Notes or
this Agreement (except waiver or reduction of late fees and interest at the Default Interest Rate which shall only require Agent’s approval); (B) forgive, or postpone payment of, or waive any default under the Loan Documents in connection
with the payment of principal or interest due under the Notes, this Agreement or any other Loan Document (except waiver or reduction of late fees and interest at the Default Interest Rate which shall only require Agent’s approval);
(C) increase the amount of the Aggregate Commitment or any Lender’s Commitment; (D) extend the Initial Maturity Date or the date of any interest payment thereunder, except as specifically provided in this Agreement; (E) release,
partially or fully, any material collateral given as security for the Loan, except as specifically provided in this Agreement; (F) release, partially or fully, any Guarantor, except as provided in the Loan Documents; (G) consent to or
accept any cancellation or termination of any Loan Document; (H) agree to a transfer or termination of an instrument now or hereafter assigned to it as security for the Loan; or (I) change the definition of Required Lenders or change the
requirement for the approval of Required Lenders or all Lenders to certain actions of Agent, as provided herein. 
  (2)         Required Lenders’ Consent.   Without the prior written consent or approval of the Required Lenders, Agent shall not unless
Agent itself holds more than fifty percent (50%) of the Aggregate Commitment of the Loan: (A) exercise any remedies under the Loan Documents, including, without limitation, foreclosing the lien of the Mortgage and

  
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submitting a bid at the foreclosure sale; (B) waive one or more Events of Default specified in the Loan Documents (except as provided in Section 25(b)(ii)(1)(B)); (C) agree
to accept a deed in lieu of foreclosure to the Property (or other similar arrangement); (D) waive or amend any provisions of Sections 16 or 25 of this Agreement; (E) apply insurance proceeds or condemnation awards in any
manner other than as required or permitted under the Loan Documents; or (F) consent to any subordinate financing, except as permitted by the Loan Documents. Notwithstanding the foregoing, Agent, in its discretion, may deliver to Borrower and
Guarantors notices of default and demands for payment or performance of their obligations under the Loan Documents and accelerate the maturity of the Loan at any time after the occurrence of any Event of Default. Agent shall deliver copies of such
notices and demands to Lenders. 
 (3)         Requests for
Approval.   Agent shall provide written notice to Lenders of any proposed action requiring their approval under this Agreement, together with such background information as is in Agent’s possession with respect to the proposed
action. Lenders shall promptly consider in good faith, whether to approve or disapprove of any proposed action that is the subject of any such notice. A proposed action shall be deemed approved by a Lender if such Lender does not provide a response
with the reason or reasons why it does not approve of the proposed action within seven (7) Business Days after receipt of the written notice from Agent proposing such action; provided that any such request for approval shall prominently state
that such approval shall be deemed given if no response is given within such seven (7) Business Day period. 
 (4)         Purchase Option.   If a Lender responds in the negative to such a request for approval, and if the action requires unanimous approval
of Lenders under Section 25(b)(ii)(1) hereof and such unanimous approval cannot be agreed upon within an additional ten (10) Business Days after the initial seven (7) Business Day period, then Agent or any Lender that is in
agreement with the proposed action and that wishes to do so, shall have the right (but not the obligation) to purchase such dissenting Lender’s Commitment Percentage in the Loan at par value plus accrued interest and other amounts due to such
Lender (other than late fees and interest at the Default Interest Rate). If more than one Lender elects to purchase the dissenting Lender’s Commitment Percentage in the Loan, then all such Lenders shall purchase the same, on a pro rata basis
calculated based on their respective Commitment Percentages. Agent and any other Lender which elects to purchase a dissenting Lender’s Commitment Percentage shall notify such dissenting Lender in writing within ten (10) days after the
expiration of the foregoing periods. Such dissenting Lender shall then have five (5) Business Days after receipt of such written notice to approve the contested action. If the dissenting Lender shall not approve such action and if another
Lender elects to purchase the dissenting Lender’s Commitment Percentage, then the purchase of its interest shall be closed by payment in cash to the dissenting Lender of the amount described above within forty-five (45) days after the
election to do so is made. At the Closing of the sale, the selling Lender shall assign to the purchasing Lender(s) its entire interest in the Loan, the Loan Documents and its Note, but such sale shall be without recourse, representation or warranty
to the selling Lender and the selling Lender shall thereafter have no further obligation or liability hereunder. 

  
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 (c)        Defaulting
Lenders. 
 (i)          If any Lender fails to
fund such Lender’s Commitment Percentage of a Request for Advance that has been approved by Agent as provided in this Agreement, or any other amount due in accordance with this Agreement within five (5) Business Days after written demand
therefor from Agent to Lender, then such Lender (the “Defaulting Lender”) shall be in default hereunder. 
 (ii)        Upon any default by a Defaulting Lender as described in Section 26(c)(i) above, any Lender, by written notice to Agent at such
Lender’s sole option, may (but shall not be obligated to) fund such amounts on behalf of such Defaulting Lender. If more than one Lender elects to fund a Defaulting Lender’s share then each such Lender shall fund on a pro rata basis, based
on their respective Commitment Percentages, and shall be entitled to reimbursement from the Defaulting Lender on demand of the amount so funded. If such reimbursement is not made on demand, then until such time as full reimbursement is received, the
Lender or Lenders that are entitled to the reimbursement shall be entitled to receive the next moneys becoming payable to the Defaulting Lender in order to recover such reimbursement. Whether or not a Lender funds such amounts on behalf of such
Defaulting Lender, the following provisions shall apply: 

  (1)        Subject to the right of a Lender which has funded the
Defaulting Lender’s Commitment Percentage to reimbursement thereof as provided above, Agent may, but shall not be obligated to, withhold and apply any and all amounts payable to the Defaulting Lender pursuant to this Agreement in such order of
priority as Agent shall determine, in its sole discretion: (A) to fund the Defaulting Lender’s Commitment Percentage of any Request for Advance which the Defaulting Lender is obligated to fund pursuant to the Loan Documents and this
Agreement, and (B) to reimburse Agent for the Defaulting Lender’s Commitment Percentage of any costs, expenses or disbursements incurred or made by Agent pursuant to this Agreement; and 

  (2)        Agent may exercise any combination or all of the remedies
set forth above, or any other remedies available at law or in equity. 

(iii)      The right of a Defaulting Lender to consent, approve or disapprove of
any matter under this Agreement or otherwise in connection with the Loan or the Property, or receive payments from Agent, or exercise the rights granted herein to purchase the interest of Lenders in the Loan, or to fund the Commitment Percentage of
another Defaulting Lender, shall be suspended during the period such Lender is in default hereunder (the “Suspension Period”). During any Suspension Period, the Commitment Percentage of each Lender shall be recalculated, solely for
purposes or consenting, approving or disapproving of any matter under this Agreement or otherwise in connection with the Loan or the Project or to receive payments from Agent, to proportionately increase each Lender’s Commitment Percentages as
if the Defaulting Lender did not have an interest in the Loan. Such recalculation shall not increase the Commitment Percentage of any non-defaulting Lender for the purposes of funding Advances, except to the

  
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extent that a non-defaulting Lender has agreed to fund the Defaulting Lender’s share of such Request for Advance or other payment due. 

(iv)    Any of the following shall constitute a default by a Lender under this Agreement: If
a Lender shall fail to cure any default under Section 25(c)(i) of this Agreement within thirty (30) days after written notice thereof from Agent, or if Agent is in default, from another Lender, or if any proceeding is commenced
which involves the dissolution, termination of existence, insolvency or business failure of any Lender, or the appointment of a receiver for any part of the property of a Lender, or the assignment for the benefit of creditors of a Lender or any
proceeding is commenced under any Bankruptcy or insolvency law, state or federal, by or against a Lender. Upon the occurrence of any such default, in addition to all other remedies available at law or in equity, any Lender that is not in default
hereunder that elects to do so, shall have the right (but not the obligation) to purchase on a pro rata basis, based upon their respective Commitment Percentages, the interest in the Loan owed by such Lender in default, at par value plus accrued
interest and any other amounts due to such Lender (other than late fees and interest at the Default Interest Rate). Any such purchase by a Lender shall be completed within forty-five (45) days after the election to do so is made. At the closing
of the sale, the selling Lender shall assign to the purchasing Lender(s) its entire interest in the Loan, the Loan Documents and its Note but such sale shall be without recourse, representation or warranty to the Lender whose interest in the Loan is
being purchased and thereafter, such selling Lender shall have no further obligation or liability hereunder. Any Lender not in default shall also each have the right to maintain an action for specific performance against the Defaulting Lender to
enforce their rights under this Agreement unless Agent has elected to undertake such action on behalf of the non-defaulting Lenders. 
 (d)        Non-Reliance on Agent and Other Lenders.    Each Lender expressly acknowledges that neither Agent nor any officer, director,
employee, agent, attorney-in-fact or affiliate thereof has made any representations or warranties to it and that no act taken by Agent hereafter, including any review of the affairs of Borrower or any Guarantor, or other obligor shall be deemed to
constitute any representation or warranty by Agent to any Lender. Each Lender represents to Agent that it has, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of Borrower, Guarantors, and other obligors, and made its own decision to make its Commitment
Percentage of the Loan and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of Borrower, Guarantors, Obligors and other obligors. Each Lender assumes all risk of loss in connection with its interest in the Loan. Without limiting the generality of the
foregoing, Agent shall not in any way be responsible for: (a) the accuracy of any information given or to be given to Lenders by or on behalf of Borrower or any Guarantor; (b) the validity, enforceability or legal effect of any of the Loan
Documents; (c) any title 

  
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insurance policies furnished to Agent by Borrower or any other party or the validity or effectiveness of the examination thereof; (d) the solvency or creditworthiness of Borrower or any
Guarantor or the collectibility of the Loan; (e) the value of any collateral given to secure the Loan; (f) any recitals, representations, or warranties contained in, or for the execution, validity, genuineness, effectiveness, or
enforceability of any Loan Document or any other instrument or document delivered hereunder or in connection herewith; or (g) the validity, genuineness, perfection, effectiveness, enforceability, existence, value, or enforcement of any
collateral. 
 (e)        Collections; Disbursements To Lenders.

 (i)        Collections of Payments by
Agent.  Each Lender’s interest under the Loan shall be payable solely from payments, collections and proceeds actually received by Agent under the Loan Documents; and Agent’s only liability to a Lender with respect to any
such payments, collections or proceeds shall be to account for such Lender’s Commitment Percentage thereof in accordance with this Agreement. Agent shall have the exclusive right to collect sums on account of the Loan, including, without
limitation, protective advances, fees, prepayment premiums (if any), and repayment of advances in excess of the face amount of the Loan, whether such sums are received directly from Borrower or any other persons, or as amounts payable by
Agent’s enforcement of its security interests against the deposits, accounts, moneys, or other property of Borrower deposited at or held by Agent and in which Agent has been granted a security interest, or by reason of total or partial
condemnation or taking by governmental authority, proceeds or recoveries under insurance policies collected and not applied to repair and restore the Project, payment and performance bonds (if any), title insurance policies, amounts realized by
reason of any sale or operation of the collateral for the Loan or enforcement of the Loan Documents (all collectively, the “Loan Recoveries”). 

(ii)      Distribution of Payments.  Whenever Agent receives a
payment of any Loan Recoveries in connection with the Loan to which a Lender is entitled to its Commitment Percentage, Agent shall promptly pay to such Lender its Commitment Percentage thereof, subject to the provisions of Section 25(c)
above. If payment is received by Agent before 1:00 p.m. Pacific time on any Business Day, Agent shall pay Lenders on the next Business Day. If any such payment is received by Agent after 1:00 p.m. Pacific time, Agent shall pay Lenders before the end
of the second Business Day following receipt by Agent. For purposes of the foregoing, funds shall be deemed “paid” to Lenders if Agent receives a confirmation number from the Federal Reserve. Agent shall not be required to remit to Lenders
any amount not actually collected by Agent, whether or not the Loan is then in default. 

(iii)    Standard of Care.  Agent will hold the Loan Documents (other than
each individual Lender’s Note) and perform all of its obligations under each provision of this Agreement in accordance with Agent’s Standard. Agent will receive and hold all receipts and collections with respect to the Loan for the benefit
of each Lender in accordance with its respective Commitment Percentage, subject to the provisions of Section 25(c) above. Agent’s relationship to Lenders shall be that of an independent contractor and Agent is not a partner,
employee or joint venturer of Lenders and shall have no fiduciary obligations to Lenders. 

  
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(iv)      Repayment.  If claim is ever made upon Agent for
repayment of any amount or amounts received by Agent in payment of the obligations under the Loan Documents following distribution to Lenders (whether or not all or any part of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by Agent) and Agent repays or is obligated to repay all or any part of said amount, then, notwithstanding any revocation or termination of this Agreement or the cancellation of any Note or any other
instrument evidencing the Loan; Lenders shall promptly pay over to Agent their Commitment Percentages of the amount so recovered, returned or to be paid over, together with their Commitment Percentages of any interest or other amount that Agent is
required to pay in connection with such recovery. 

(v)        Application of Loan Recoveries.  All Loan
Recoveries received by Agent in connection with the Loan or the Loan Documents shall be applied by Agent as set forth herein. 
 (f)        Borrower’s Default. 
 (i)        Notice of Borrower’s Default.  Each Lender shall notify Agent, and Agent shall notify each Lender, within five
(5) Business Days after acquiring actual knowledge of any Event of Default under the Loan Documents or any event which, with the lapse of time or giving of notice, or both, would constitute an Event of Default under the Loan Documents. Agent
shall have no duty to inquire into any performance or failure to perform by Borrower and shall not be deemed to have knowledge of the occurrence of an Event of Default unless Agent has received notice from a Lender or Borrower specifying the
occurrence of such Event of Default. Agent is entitled to assume that no Event of Default or event or omission which, with the giving of notice or lapse of time, or both, would constitute such an Event of Default, has occurred and is continuing
unless Agent (i) has actual knowledge of such Event of Default or event, or (ii) has been notified by a Lender in writing that the Lender considers that such an Event of Default or event or omission has occurred and is continuing and
specifies the nature thereof. Such notice shall be given in accordance with Section 20(a) hereof. 

(ii)       Consultation and Remedies.  Agent shall promptly
consult with Lenders regarding the actions to be taken in response to an Event of Default, and the applicable provisions of Section 25(b)(ii) hereof shall govern the consent by Agent and Lenders to the action to be taken in response to
such Event of Default. If a vote of the Required Lenders fails to establish a course of action to be taken in response to such Event of Default as provided in Section 25(b)(ii)(2) above, then the course of action taken shall be deemed to
be forbearance until the earlier to occur of (i) the date an alternate course of action is decided upon by Required Lenders, or (ii) 30 days after the date the Event of Default has been declared, in which event Agent may begin to exercise
its remedies as Agent (for the benefit of Lenders) under the Loan Documents including, without limitation, the exercise of the power of sale under the Loan Documents. Notwithstanding the consent provisions of Section 25(b)(ii) or the
consultation requirement of this Section 25(f)(ii), Agent shall have the right at any time to take such actions as Agent believes in good faith must be taken immediately without an opportunity for consultation with Lenders in order to
protect and preserve the value of any security held for the 

  
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Loan. Each Lender shall be liable for that Lender’s Commitment Percentage of all costs and expenses incurred by Agent in analysis and exercise of Agent’s rights and remedies under the
Loan Documents, as provided in Section 25(k). 

(iii)     Purchase Right.  In addition to the rights provided for under
the foregoing provisions of this Section 25(f), if at any time the Required Lenders are not in agreement as to a course of action to be taken in response to an Event of Default, then Agent, and any Lender that is in agreement with the
course of action favored by Agent and that wishes to do so, shall have the right in its sole discretion (but not the obligation) to purchase the interest in the Loan of any Lender that is not in agreement with the course of action favored by Agent,
at par value plus accrued interest and other amounts, due to such Lender. If more than one Lender elects to purchase the dissenting Lender’s Commitment Percentage in the Loan, then all such Lenders shall purchase the same on a pro rata basis
based on their respective Commitment Percentages. Any such purchase shall be completed within forty-five (45) days after the election to do so is made. At the closing of the sale, the selling Lender shall assign to the purchasing Lender(s) its
entire interest in the Loan, the Loan Documents and its Note, but such sale shall be without recourse, representation or warranty to the Lender or Lenders whose interest or interests in the Loan are being purchased and thereafter, such Lender(s)
shall have no further obligation or liability hereunder. 

(iv)      Advances and Reimbursements.  If Borrower fails to pay
taxes, assessments, insurance premiums or any other charges or expenditures for which Borrower is responsible or liable under the Loan Documents, Agent may, but shall not be required to, advance the amount necessary to make such payments. Each
Lender shall, immediately upon demand, reimburse Agent for such Lender’s Commitment Percentage thereof pursuant to Section 1.11. Agent shall use reasonable efforts to recover from Borrower all advances and expenses that are the
obligation of Borrower under the Loan Documents, but making such efforts shall not be a precondition to Lenders’ reimbursing Agent promptly. 
 (v)       Ownership of the Property.  If the Required Lenders elect (or Agent has the right to under Section 25(f)(ii) above) to take
title to the Property, whether by the exercise of remedies under the Loan Documents or by a consensual agreement with Borrower or otherwise, then in the absence of any alternate structure selected by vote of the Required Lenders, Agent, as agent for
the Lenders, shall form a limited liability company (the “Ownership LLC”) to hold such ownership interest in the Property. The Managing Member of the LLC shall be Agent (the “Managing Member”). The member interests
in the Ownership LLC shall be held by Agent and Lenders (or their designees or affiliates) in accordance with their respective Commitment Percentages. The Operating Agreement for the Ownership LLC shall have terms and provisions similar to this
Agreement with respect to the ownership and administration of the Property. Agent shall have a right to resign as Managing Member, and Agent and Lenders shall have the right to remove Agent as Managing Member for cause only under the same terms and
conditions as are required for removal or replacement of Agent under Section 25(a)(vii). Agent and Lenders shall have voting control of the Ownership LLC in accordance with their respective Commitment Percentages. Agent and each of the
Lenders shall enter into a contribution agreement pursuant to which Agent and each Lender shall agree to 

  
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(i) fund all amounts due from it or from its affiliates in connection with the Ownership LLC with respect to the Property, and (ii) guaranty any indemnities made by its affiliate in
connection with the Ownership LLC. Notwithstanding the foregoing, in the event that Agent determines that, to protect the collateral securing the Loan, title to the Property must be transferred for the benefit of Lenders before the ownership
structure described above can be completed, then Agent shall have the right to elect to take title to the Property in its own name or in the name of its wholly-owned affiliate, on behalf of itself and each Lender, and thereafter, transfer title to
the Ownership LLC as soon as reasonably practicable. The specific terms and provisions of the (A) agreements, instruments, certificates, articles and other documents evidencing, governing and creating the Ownership LLC, and (B) any other
agreements with a third-party corporation or management company shall be subject to the approval of Lenders and Agent by vote of the Required Lenders. If the terms and provisions of any such agreements are so approved and are not inconsistent with
the provisions of this Agreement, all Lenders shall join in executing and delivering such agreements, instruments, certificates, articles and other documents and abide by the terms thereof. 

(g)        Retention of Counsel.  If, in Agent’s judgment,
attorneys should be retained for the administration of the Loan or the Property or the protection of the interests of Agent and Lenders, including, without limitation, in connection with actual or threatened litigation, Agent may, following written
notice to Lenders, employ counsel to represent Agent and Lenders. Agent shall seek to cause Borrower to pay the fees and expenses of such counsel in accordance with other terms of this Agreement and the other Loan Documents, but Lenders shall pay
their respective Commitment Percentages of such reasonable fees and expenses to Agent immediately upon request pursuant to Section 25(k) hereof, whether or not Agent has sought or received reimbursement from Borrower. If Agent later
receives reimbursement therefor from Borrower, Agent shall return Lenders’ respective Commitment Percentages, without interest (unless such interest is actually paid by Borrower), to Lenders. Each Lender shall have the right to retain counsel
on its own behalf and at such Lender’s sole cost and expense, in connection with any matters pertaining to the Loan. 
 (h)        Interest In Loan Documents. 
 (i)        Proportional Interest.  Each Lender shall, upon funding its share of an Advance, become vested with its Commitment Percentage of
the Advance without the necessity of any written instrument of assignment or document. Upon such funding, the respective interests of each Lender in the Loan Documents shall be of equal priority with one another, except as otherwise expressly
provided in this Agreement. If Agent or its designee acquires an ownership interest in any of the collateral for the Loan due to the foreclosure or other realization of any security interest in or lien granted by any of the Loan Documents, each
Lender shall have an interest in such ownership interest in such collateral equal to its Commitment Percentage in the Loan, notwithstanding that title is taken in the name of Agent or its designee alone. 

(ii)      Documents and Third Parties.  All original Loan
Documents, other than each individual Lender’s Note, shall be held by Agent in its customary fashion in 

  
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accordance with Agent’s Standard. Agent is authorized to retain the Loan and the Loan Documents in Agent’s own name, and, as to parties other than Lenders, to deal with such parties as
though an absolute owner of the Loan and the Loan Documents. Lenders hereby authorize any third person, without inquiry as to whether any action by Agent is authorized hereunder, to deal with Agent concerning the Loan in the same manner as if
Lenders’ interests were not outstanding and Agent were the sole owner of the Loan. 

(iii)      Other Collateral.    Agent holds for its own
and Lenders’ proportional benefit all collateral described in the Loan Documents which secures the performance and payment of Borrower’s obligations and liabilities under the Loan. Lenders, however, shall have no interest in any
(i) other property taken as security for any credit, loan or financial accommodation made or furnished to Borrower, any Guarantor or any of their affiliates by Agent, other than the Loan; (ii) property now or hereafter in Agent’s
possession or under Agent’s control other than by reason of the Loan or the Loan Documents; or (iii) deposits or other indebtedness which may be or might become security for performance or payment of any of Borrower’s or any
Guarantor’s obligations and liabilities under the Loan Documents by reason of the general description contained in any instrument other than the Loan Documents held by Agent or by reason of any right of setoff, counterclaim, Lenders’ lien
or otherwise. Likewise, Agent shall have no interest in any property or deposits of Lenders, as described in clauses (i)-(iii) above. If, however, such property, deposit, indebtedness or the proceeds thereof shall actually be applied to the
payment or reduction of principal, interest, fees, commissions or any other amounts owing by Borrower to Agent in connection with the Loan, then each Lender shall be entitled to that Lender’s Commitment Percentage of the amounts so applied to
the Loan, subject to Section 25(c). 

(i)        Bookkeeping Entries.  Each Lender shall record in
its financial records the amount of its undivided interest in the Loan and its participation in Agent’s right and obligations in connection with the Loan. Agent shall record in its financial records the existence of the undivided interests of
Lenders in the Loan. 
 (j)        Information and Copies to
Lenders.    Agent shall from time to time, promptly after receipt thereof, furnish to Lenders copies of material documents, notices and non-oral financial information received from Borrower or sent by Agent to Borrower
regarding the Loan, the Loan Documents and the transactions contemplated thereby. Upon written request, Agent will promptly provide to Lenders from time to time such material information regarding the Loan as is then available to Agent which Lenders
may reasonably request and which has not previously been so furnished to Lenders. Agent shall have no responsibility with respect to the authenticity, validity, accuracy or completeness of the information provided by Borrower or any other party.
Lenders agree and acknowledge that Agent need not provide copies of or information pertaining to confidential Lender examiner’s reports, including any classification of Borrower or the Loan by an examiner. Upon reasonable advance written
notice, Lenders may, at their expense, inspect and copy, during normal business hours, Agent’s books and records specifically and solely relating to collections, disbursements, costs and expenses under the Loan. 

  
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 (k)        Reimbursement for
Costs and Expenses. 
 (i)        Agent’s Right to
Reimbursement.    All payments, collections and proceeds received or effected by Agent may be applied first to pay or reimburse Agent for all reasonable costs and expenses at any time incurred by or imposed upon Agent in
connection with this Agreement or any other Loan Document (including, but not limited to, all reasonable attorney’s fees, including allocated costs of in-house counsel), foreclosure expenses and advances made to protect the security of any
collateral, but excluding any costs, expenses, damages or liabilities arising from the gross negligence or willful misconduct of Agent. Each Lender shall, within ten (10) Business Days after demand, indemnify and reimburse Agent for such
Lender’s Commitment Percentage of any and all costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses, title insurance and foreclosure costs, costs of consultants, court costs and disbursements
(collectively, “Administrative Costs”) which may be incurred or paid by Agent under or in connection with actions taken by Agent in connection with the Loan or any of the Loan Documents, or in any action taken by Agent to collect the
liabilities created under or in connection with the Loan or any Loan Document or to enforce or protect any collateral for any such liabilities, for which Agent has not previously been reimbursed by or on behalf of Borrower, which actions are
permitted by the terms of the Loan Documents. All such payments and reimbursements by Lenders shall be made to Agent in immediately available funds in Newport Beach, California. However, if Agent later is reimbursed by Borrower or any obligor for
any such expenses, Agent shall immediately reimburse each Lender according to each Lender’s Commitment Percentage. Each Lender shall have the right to review a full and complete accounting of Administrative Costs incurred by Agent promptly upon
request therefor. 
 (ii)      Collection from Defaulting
Lender.    Any and all costs, expenses and disbursements (including, without limitation, reasonable attorneys’ fees and other legal expenses) incurred by Agent or a Lender in any effort to collect any amounts payable
under this Agreement from Defaulting Lender shall be paid by the Defaulting Lender against which such collection efforts are taken, immediately upon demand. If suit is filed by Agent or a Lender in connection with such collection efforts, the party
prevailing in such suit shall be entitled to an award of attorneys’ fees and costs, in addition to all other awards. 
 (iii)    Legal Fees.    Except as otherwise provided in Section 25(k)(ii), neither Agent nor Lenders are responsible for any other
party’s attorney’s fees or any other expenses in connection with the negotiation and execution of the Loan Documents or this Agreement, or any disputes among Agent and/or Lenders. In the event a Lender, other than Agent acting in its
capacity as Agent pursuant to Section 25(g), shall retain counsel, consultants or accountants or incur any expenses in connection with the Loan, the Loan Documents or this Agreement, such fees and expenses shall be paid by such Lender
alone. 
 (iv)    Recovery of Expenses from Payments and
Proceeds.    If Agent does not receive payments, collections or proceeds sufficient to cover any such costs and expenses within five (5) days after their incurrence or imposition from Borrower or Guarantor, each Lender
shall, upon demand, remit to Agent such Lender’s Commitment Percentage of the difference between (i) such costs and expenses and (ii) such payments, collections and proceeds, 

  
 73 

 
together with interest on such amount for each day following the tenth (10th) day after demand therefor until so remitted at a rate equal to the Federal Funds Effective Rate for each such
day. The foregoing provision is intended only to set forth certain rules for the application of payments, proceeds and collections in the event that a Lender has breached its obligations hereunder and shall not be deemed to excuse any Lender from
such obligations. 
 (l)        Payments Received Directly by
Lenders.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise) on account of any Note or on account of any fees under this Agreement in excess of such
Lender’s Commitment Percentage, such Lender shall promptly give notice of such fact to Agent and shall promptly remit to Agent such amount as shall be necessary to cause the remitting Lender to share such excess payment or other recovery
ratably with each Lender in accordance with their respective Commitment Percentages together with interest for each day on such amount until so remitted at a rate equal to the Note Rate (but not the Default Interest Rate) for each such day;
provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such Lender or holder, the remittance shall be restored to the extent of such recovery. 

(m)        Borrower not a Beneficiary or Party.  The provisions
and agreements in this Section 25, and the provisions of Section 26 are solely among Lenders and Agent and Borrower shall not be considered a party thereto or a beneficiary thereof. 

(n)        Indemnification.  Each Lender hereby agrees to
indemnify and hold Agent harmless from and against each Lender’s Commitment Percentage of any and all loss, cost, liability, damage, penalty, action, suit and expense (including reasonable attorneys’ fees and other legal expenses) which
may be imposed upon, asserted against, paid or incurred by Agent (except to the extent that the same arises from Agent’s gross negligence or willful misconduct) at any time and from time to time in connection herewith, including, without
limitation, (a) the prosecution or defense of any suit relating to or arising out of the Loan Documents, (b) any default by a Lender under this Agreement, or the Ownership LLC, (c) the exercise of Agent’s right pursuant to
Section 25(f)(v) hereof to acquire title to the Property in Agent’s name or in the name of Agent’s wholly-owned affiliate on behalf of the Lenders, (d) any matter related to its capacity as Agent; and (e) any matter
relating to or arising out of this Agreement, or any of the Loan Documents, or any documents contemplated therein or herein. Each Lender’s obligations to Agent under this Section 25(n) shall include, without limitation, Agent’s
being held liable to Borrower or any third party for breach of any duty or obligation, either express or implied, in contract or otherwise, including alleged wrongful termination of the Loan, improper collection and enforcement actions and
interference or involvement in Borrower’s business activities. If the indemnity provided by this Agreement shall become impaired, Agent may require an additional indemnity from the Lenders and may cease to perform the acts with respect to which
the indemnity is impaired until such additional indemnity is received. So long as any indemnification obligations of a Lender to Agent pursuant to this Agreement are outstanding, this Agreement shall not terminate. Notwithstanding anything contained
herein to the contrary, this indemnity is not intended to excuse Agent from failing to perform hereunder in accordance with Agent’s Standard. 

  
 74 

 (o)        Exculpation of
Agent.    Neither Agent nor any of its shareholders, directors. officers, employees or agents shall be liable to Lenders for any obligation, undertaking, act or judgment of Borrower or any other person, or for any error of
judgment or any action taken or omitted to be taken by Agent (except and only to the extent that the same arises from the gross negligence or willful misconduct of Agent), or be bound to ascertain or inquire as to the performance or observance of
any term of any Loan Document. Without limiting the generality of the foregoing, and subject thereto, Agent (a) may consult with legal counsel, accountants, financial advisers and other consultants and experts selected by Agent and shall not be
liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel and advisers; (b) makes no warranty or representation and shall not be responsible for any warranty or representation made in or in
connection with any Loan Document, or for the financial condition of Borrower, any Guarantor or any other person, or for the value of any collateral, or for the observance or performance of any obligations of Borrower, any Guarantor or any other
person or entity; and (c) makes no warranty or representation and shall not be responsible for the due execution, validity, enforceability, genuineness, sufficiency or collectibility of any of the Loan Documents. 

(p)        Authorization and Enforceability
Representations.    Agent and Lenders each hereby represents to the other parties hereto that (a) all necessary corporate and other action has been taken to authorize it to execute, and to perform its obligations under,
this Agreement, and (b) this Agreement is binding and enforceable against it. 

(q)        Assignment by Lenders.    Lenders shall
not be authorized to assign their respective rights and obligations under the Loan Documents and this Agreement except in accordance with Sections 26 and 27 of this Agreement, as applicable. 

(r)        Other Transactions between Lenders and
Borrower.    Agent and the Lenders and their respective affiliates may accept deposits from, lend money to, act as trustee under indentures for and generally engage in any kind of business with Borrower and its subsidiaries,
owners, partners and affiliates (collectively, “Borrower’s Affiliates”) and any person who may do business with or own interests in any of them. Neither Agent nor Lenders shall have any interest in any property taken as security for
any other loans or any credits extended to Borrower or any of Borrower’s Affiliates by Agent or Lenders, respectively, other than pursuant to the Loan Documents. Nothing herein shall in any manner be deemed to limit or preclude the right of
Agent to enter into any such other arrangements or to exercise any rights or remedies available in connection therewith, including the exercise of any right of set-off or other rights available as a matter of law. 

(s)        Effect of Agreement and Relationship of
Parties.    This Agreement is not intended to constitute, and shall not be construed to establish, a partnership or joint venture between Agent and Lenders. Agent will have no obligation or responsibility to any Lender except
as specifically stated herein, and Agent shall not have a fiduciary duty of any kind to any Lender. The execution of this Agreement, the performance of the terms or provisions hereof and the performance or exercise of any obligations or rights
pursuant hereto (including Lenders’ purchase of and ownership interest in the Loan and the Loan Documents) shall not constitute 

  
 75 

 
Lenders as owners, holders, purchasers or sellers of any security (as that term is defined in the Securities Act of 1933 or the Securities Exchange Act of 1934) issued, owned, purchased or sold
by Agent, either as principal or as agent for Borrower. Each Lender is purchasing and acquiring legal and equitable ownership of its Commitment Percentage of the Loan and is not making a loan to Agent, and no debtor-creditor relationship exists
between them as a result of this Agreement. This Agreement and the provisions of the Loan Documents constitute the entire agreement among the parties, and no representation, promise, inducement or statement of intent has been made by Agent to
Lenders which is not embodied in this Agreement or in the other Loan Documents. 

26.        Assignment by Lenders.  In connection with any loan
participation, sale of the Loan, pledge or other transaction contemplated under this Section, Borrower authorizes Agent and each Lender to disclose to any relevant party any and all financial information in such Lender’s possession concerning
Borrower and the Property which has been delivered to Agent or such Lender by or on behalf of Borrower pursuant to this Agreement or any other Loan Document or which has been delivered to Agent or such Lender by or on behalf of Borrower or any
Guarantors, or other obligors in connection with Agent’s or such Lender’s credit evaluation of Borrower prior to becoming a party to this Agreement. 
 (a)        Loan Participations.  Any Lender may at any time sell to one or more Lenders or other entities (“Participants”)
participating interests in the rights of such Lender hereunder and under the other Loan Documents. A Participant shall have the right to vote only on the extension of regularly scheduled maturity of principal or interest under the Note and this
Agreement executed in favor of its selling Lender, reduction of the principal amount or rate of interest of such Note or the release of any material portion of the collateral (except as otherwise expressly permitted in this Agreement in which case
no such consent shall be required). In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender shall remain the holder of its Note for all purposes under this Agreement and the other Loan Documents, and Borrower and Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents. 
 (b)        Loan Sale.  Lenders (including Agent) may, without the consent of Borrower, sell the Loan at any time sell to any other entity,
including without limitation, Affiliates of the any of the Lenders and Agent (a “Purchasing Lender”). In addition, each Lender acting individually or collectively may, without the consent of Borrower, sell all or part of its
interests in the Loan all or any part of its rights and obligations under this Agreement, the Note and the other Loan Documents pursuant to an assignment agreement (an “Assignment and Acceptance”) executed by such Purchasing Lender
and such transferor Lender(s), and delivered to Agent accompanied by a $3,500 processing fee (which fee Borrower is not obligated to pay); provided, however, that the Purchasing Lender shall not be Borrower, Mezzanine Borrower, Guarantor or any
Affiliates of any of the Borrower, Mezzanine Borrower or Guarantor without Agent’s and all Lender’s prior written consent, which consent may be withheld in Agent’s and 

  
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each Lender’s sole and absolute discretion. In each case, upon such execution and delivery from and after the transfer effective date determined pursuant to such Assignment and Acceptance,
(i) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender (or Agent, as applicable) hereunder, and (ii) the transferor Lender
thereunder shall, to the extent of such assigned portion and as provided in the Assignment and Acceptance, be released from its obligations under this Agreement and the other Loan Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of a transferor Lender’s rights and obligations under this Agreement, such transferor Lender shall cease to be a party hereto). Any such Assignment and Acceptance shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations
of such transferor Lender under this Agreement and the other Loan Documents. Borrower, at its expense, shall execute and deliver to Agent in exchange for the surrendered Note(s), new Note(s) to the order of such Purchasing Lender in an amount equal
to the Commitment Percentage in the Loan assumed by it, and if the transferor Lender has retained a Commitment Percentage in the Loan hereunder, new Note(s) to the order of the transferor Lender in an amount equal to such Commitment Percentage
retained by it hereunder. Such new Note(s) shall be dated the effective date of such assignment, or as of the date of this Agreement, as Agent shall direct. 
 (c)        Pledge of Loan.    Agent and Lenders may, without the consent of Borrower, pledge all or any portion of the Loan. 

27.        Special Provisions. 

(a)        Further Splits and Secondary Market
Transactions.  Agent and the Lenders shall have the right at any time and from time to time (i) to sell or assign the entire Loan, (ii) to sell or assign all or any part of Agent’s or any Lender’s interest in the
Loan, (iii) to cause the Loan to be split into two or more separate loans, or (iv) to securitize the Loan or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities
(the “Securities”) secured by or evidencing ownership interests in the Notes and the Loan Documents (each such severance of the Loan, loan split, securitization, and each of transactions described in Section 26 above, is
referred to herein as a “Secondary Market Transaction”). In connection with any Secondary Market Transaction, Borrower shall use all reasonable efforts and cooperate fully and in good faith with Agent and each Lender and otherwise
assist Agent and each Lender in satisfying the market standards to which Agent and such Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any such Secondary Market
Transactions, including: (A) to (i) provide such financial and other information with respect to the Property, the Collateral (as defined in the Mortgage), Borrower, and its Affiliates, Manager and any tenants of the Property,
(ii) provide business plans and budgets relating to the Property and (iii) subject to the rights of tenants at the Property, perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies,
environmental reviews and reports, engineering reports and other due diligence investigations of the Property, as may be reasonably 

  
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requested from time to time by Agent or a Lender or the Rating Agencies or as may be necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act requirements (the
items provided to Agent or a Lender pursuant to this paragraph (A) being called the “Provided Information”), together, if customary, with appropriate verification of and/or consents to the Provided Information through letters
of auditors or opinions of counsel of independent attorneys acceptable to Agent and such Lender and the Rating Agencies; (B) cause counsel to render opinions as to non-consolidation and any other opinion customary in securitization transactions
with respect to the Collateral, the Property, Borrower, and its Affiliates, which counsel and opinions shall be reasonably satisfactory to Agent and such Lender and the Rating Agencies; (C) make such representations and warranties as of the
closing date of any Secondary Market Transaction with respect to the Collateral, the Property, Borrower, and the Loan Documents as are customarily provided in such transactions and as may be reasonably requested by Agent and such Lender or the
Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents; (D) provide current certificates of good
standing and qualification with respect to Borrower, and Sole Member from appropriate Governmental Authorities; and (E) execute such amendments to the Loan Documents and Borrower’s organizational documents, as may be requested by Agent and
such Lender or the Rating Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in this subsection (E) shall result in a material economic change in the transaction; provided that notwithstanding
anything to the contrary in this Section 27(a), Borrower shall not be required to (i) incur more than $50,000 of out-of-pocket expenses in connection with the Secondary Market Transaction during the initial Term of the Loan unless
Agent or the applicable Lender agrees to pay for such out-of-pocket expenses as they are incurred by Borrower (including, without limitation, a change in the Spread (as defined in the Note) or the Stated Maturity of the Loan), (ii) agree to a
modification of any Loan Document that would have a material impact upon the rights, liabilities, or responsibilities of Borrower, or (iii) take any actions that would impose a significant burden on Borrower. Borrower’s cooperation
obligations set forth herein shall continue until the Loan has been paid in full. 

(b)        Use of Information.  Borrower understands that all
or any portion of the Provided Information may be included in disclosure documents in connection with a Secondary Market Transaction, including a prospectus or private placement memorandum (each, a “Disclosure Document”) and may
also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers or other parties relating to the Secondary Market Transaction. If the Disclosure Document is required
to be revised, Borrower shall cooperate with Agent and the Lenders in updating the Provided Information for inclusion or summary in the Disclosure Document or for other use reasonably required in connection with a Secondary Market Transaction by
providing all current information pertaining to Borrower, Manager, the Collateral and the Property necessary to keep the Disclosure Document accurate and complete in all material respects with respect to such matters. 

  
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 (c)        Borrower’s
Obligations Regarding Disclosure Documents.  In connection with a Disclosure Document, Borrower shall: (a) if requested by Agent and/or a Lender, certify in writing that Borrower has carefully examined those portions of such
Disclosure Document, pertaining to Borrower, the Collateral, the Property, Manager and the Loan, and that such portions do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not misleading; and (b) indemnify (in a separate instrument of indemnity, if so requested by Agent and/or a Lender) (i) any underwriter, syndicate member or placement
agent (collectively, the “Underwriters”) retained by Agent and/or a Lender or its issuing company affiliate (the “Issuer”) in connection with a Secondary Market Transaction, (ii) Agent and the Lenders and
(iii) the Issuer that is named in the Disclosure Document or registration statement relating to a Secondary Market Transaction (the “Registration Statement”), and each of the Issuer’s directors, each of its officers who
have signed the Registration Statement and each person or entity who controls the Issuer Agent or each of the Lenders within the meaning of Section 15 of the Securities Act or Section 30 of the Exchange Act (collectively within (iii), the
“Lender Group”), and each of its directors and each person who controls each of the Underwriters, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any losses, claims, damages or liabilities (the “Liabilities”) to which Agent, the Lenders, the Lender Group or the Underwriter Group may become subject (including reimbursing all of them
for any legal or other expenses actually incurred in connection with investigating or defending the Liabilities) insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in any of the Provided Information or in any of the applicable portions of such sections of the Disclosure Document applicable to Borrower, Manager, the Collateral, the Property or the Loan, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated in the applicable portions of such sections or necessary in order to make the statements in the applicable portions of such sections in light of the circumstances under which
they were made, not misleading, provided, however, that Borrower shall not be required to indemnify Agent and the Lenders for any Liabilities relating to untrue statements or omissions which Borrower identified to Agent in writing at the time of
Borrower’s examination of such Disclosure Document. 

(d)        Borrower Indemnity Regarding Filings.  In connection
with filings under the Exchange Act, Borrower shall (i) indemnify Agent and the Lenders, the Lender Group and the Underwriter Group for any Liabilities to which Agent, Lenders, the Lender Group or the Underwriter Group may become subject
insofar as the Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information in order to make the statements in the Provided
Information, in light of the circumstances under which they were made not misleading and (ii) reimburse Agent, Lenders, the Lender Group or the Underwriter Group for any legal or other expenses actually incurred by Agent, Lenders, Lender Group
or the Underwriter Group in connection with defending or investigating the Liabilities. 

(e)        Indemnification Procedure.    Promptly
after receipt by an indemnified party under Section 12(c) of notice of the commencement of any action for which a claim for 

  
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indemnification is to be made against Borrower, such indemnified party shall notify Borrower in writing of such commencement, but the omission to so notify Borrower will not relieve Borrower from
any liability that it may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to Borrower. If any action is brought against any indemnified party, and it notifies Borrower of the commencement thereof,
Borrower will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice of
commencement, to assume the defense thereof with counsel satisfactory to such indemnified party in its discretion. After notice from Borrower to such indemnified party under this Section 27(e), Borrower shall not be responsible for any
legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both Borrower and an
indemnified party, and any indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to Borrower, then the
indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Borrower shall not be liable for
the expenses of more than one separate counsel unless there are legal defenses available to it that are different from or additional to those available to another indemnified party. 

(f)        Contribution.  In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement provided for in Section 12(c) is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or action in respect thereof)
referred to therein which would otherwise be indemnifiable under Section 27(c) or 27(d), Borrower shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the Lender Group’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances. Agent, Lenders, and
Borrower hereby agree that it may not be equitable if the amount of such contribution were determined by pro rata or per capita allocation. 
 (g)        Severance of Loan.  Agent and Lenders shall have the right, at any time (whether prior to, in connection with, or after any Secondary
Market Transaction), with respect to all or any portion of the Loan, to modify, split and/or sever all or any portion of the Loan as hereinafter provided. Without limiting the foregoing, Agent may (i) cause the Note and the Mortgage to be split
into a first and second loan, (ii) create one (1) or more senior and subordinate notes (i.e., an A/B or A/B/C structure), (iii) create multiple components of the Note or Notes (and allocate or reallocate the principal balance of the
Loan among such components) or (iv) otherwise sever the Loan into two (2) or more loans secured by mortgages and by a 

  
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pledge of partnership or membership interests (directly or indirectly) in Borrower (i.e., a senior loan/mezzanine loan structure), in each such case, in whatever proportion and whatever priority
Agent determines; provided, however, in each such instance the outstanding principal balance of all the Notes evidencing the Loan (or components of such Notes) immediately after the effective date of such modification equals the outstanding
principal balance of the Loan immediately prior to such modification and the weighted average of the interest rates for all such Notes (or components of such Notes) immediately after the effective date of such modification equals the interest rate
of the original Note immediately prior to such modification. If requested by Agent, Borrower (and Borrower’s constituent members, if applicable) shall execute within two (2) Business Days after such request, such documentation as Agent may
reasonably request to evidence and/or effectuate any such modification or severance; provided, however, if a mezzanine loan is to be created, the mezzanine loan shall be evidenced by mezzanine loan documents substantially in the forms delivered from
Agent to Borrower prior to the date of this Agreement. Borrower shall not be required to (A) incur any out-of-pocket expense in connection with any action taken pursuant to this Section 27(g) unless Agent agrees to pay for such out
of pocket expenses as they are incurred by Borrower (including, without limitation, a change in the Spread or the Stated Maturity of the Loan), (B) agree to a modification of any Loan Document that would have a material impact upon the rights,
liabilities, or responsibilities of Borrower, or (C) take any actions that would impose a significant burden on Borrower. 
 (h)        Retention of Servicer.  Agent reserves the right to retain the Servicer to act as its agent hereunder with such powers as are
specifically delegated to the Servicer by Agent, whether pursuant to the terms of this Agreement, any pooling and servicing agreement or similar agreement entered into as a result of a Secondary Market Transaction or otherwise, together with such
other powers as are reasonably incidental thereto. Borrower shall pay any reasonable fees and expenses of the Servicer (i) in connection with a release of the Property (or any portion thereof), (ii) in connection with an assumption or
modification of the Loan, (iii) in connection with the enforcement of the Loan Documents or (iv) in connection with any other action or approval taken by Servicer hereunder on behalf of Agent (which shall not include ongoing regular
servicing fees relating to the day-to-day servicing of the Loan, for which Borrower shall not be charged). 
 (the remainder
of the page left intentionally blank) 

  
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 IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the day and year first above written. 
 BORROWER: 
 CAMERON PARK SENIOR LIVING DELAWARE, LLC, 
 a Delaware limited liability company 

 

			
	 By:
	 	 /s/ Erik N. Pilegaard

	 Name:
	 	 Erik N. Pilegaard

	 Title:
	 	 Authorized Signatory

  
 82 

 
							
	 AGENT:

	
	 KBS FINANCE LLC,
 a Delaware limited liability company

		
	 By:
	 	     KBS STRATEGIC OPPORTUNITY LIMITED     PARTNERSHIP,

		 	     a Delaware limited partnership,

    its sole member

			
		 	     By:
	 	 KBS STRATEGIC OPPORTUNITY REIT, INC.,

		 		 	 a Maryland corporation,
 its sole general partner

				
		 		 	 By:
	 	 /s/ David E. Snyder

		 		 		 	 David E. Snyder
 Chief Financial Officer

  
 83 

 JOINDER 
 The undersigned, the Sole Member, has duly executed and delivered this Agreement as of the day and year first above written for the purpose of agreeing and consenting to (i) the provisions of
Section 23 of the Agreement and (ii) the other provisions of this Agreement concerning the Sole Member. 
  

			
	 CAMERON PARK SENIOR LIVING
 MEZZ, LLC,

	 a Delaware limited liability company

		
	 By:
	 	 /s/ Erik N. Pilegaard

	 Name: 
	 	 Erik N. Pilegaard

	 Title:
	 	 Authorized Signatory

  
 84 

 EXHIBIT A 
 Legal Description of Real Property 
  
 All that certain real property situated in the County of El Dorado, State of California, described as follows: 
 Unincorporated Area 
 PARCEL ONE: 
 ALL THAT PORTION OF SECTIONS 2 AND 3, TOWNSHIP 09 NORTH, RANGE 09 EAST, M. D.B.&M. DESCRIBED AS FOLLOWS: 
 PARCEL 2, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF EL DORADO, STATE OF CALIFORNIA ON DECEMBER 28, 2006 IN BOOK 49 OF PARCEL MAPS AT PAGE 111. 

EXCEPTING THEREFROM ALL THAT PORTION, CONVEYED TO THE COUNTY OF EL DORADO IN THAT CERTAIN IRREVOCABLE OFFER OF DEDICATION AND ACCEPTANCE RECORDED JANUARY
16, 2009, AS SERIES NO. 2009-1669, OFFICIAL RECORDS. 
 ASSESSORS PARCEL NUMBER: 083-350-53-100 

PARCEL TWO 
 LOTS 1 THROUGH 64, INCLUSIVE, AS
SHOWN ON THE MAP OF CAMERON PARK CONGREGATE CARE, THE DUETS, RECORDED ON SEPTEMBER 17, 2008 IN BOOK “J” OF MAPS, AT PAGE 105, EL DORADO COUNTY RECORDS. 
 ASSESSORS PARCEL NUMBER: 083-620-01-100 THROUGH APN 083-620-64-100 INCLUSIVE 
 PARCEL THREE

 AN EASEMENT AS AN APPURTENANCE TO PARCEL TWO ABOVE, FOR GENERAL USE, OVER LOT “R” AS SHOWN ON THE MAP OF CAMERON PARK CONGREGATE
CARE, THE DUETS, RECORDED ON SEPTEMBER 17, 2008 IN BOOK “J” OF MAPS, AT PAGE 105, EL DORADO COUNTY RECORDS. 

  
 1 

 EXHIBIT B 
 Lender’s Pro Rata Shares and Addresses 
  
  

					
	Lender	  	Address	  	Pro Rata Share
	 KBS FINANCE LLC
	  	 c/o KBS Capital Advisors LLC

620 Newport Center Drive,
 Suite 1300
 Newport Beach, California 92660

 
	  	 100%

 EXHIBIT C 
 Initial Annual Budget 
 (Attached) 

  
 

 

  
 

 

  
 

 

  
 

 

  
 

 

 SCHEDULE 1 
 A “Special Purpose Bankruptcy Remote Entity” means (x) a limited liability company that is a Single Member Bankruptcy Remote LLC (defined below) or (y) a corporation, limited
partnership or limited liability company which at all times since its formation and at all times thereafter: 

(i)        was and will be organized solely for the purpose of
(A) owning the Property or (B) acting as a general partner of the limited partnership that owns the Property or member of the limited liability company that owns the Property; 

(ii)        has not engaged and will not engage in any business unrelated
to (A) the ownership of the Property, (B) acting as general partner of the limited partnership that owns the Property or (C) acting as a member of the limited liability company that owns the Property, as applicable; 

(iii)       has not had and will not have any assets other than those related
to the Property or its partnership or member interest in the limited partnership or limited liability company that owns the Property, as applicable; 
 (iv)       has not engaged, sought or consented to and will not engage in, seek or consent to any dissolution, winding up, liquidation, consolidation, merger,
asset sale (except as expressly permitted by this Agreement), transfer of partnership or membership interests or the like, or amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable); 

(v)        [Intentionally Omitted]; 

(vi)       [Intentionally Omitted]; 

(vii)      if such entity is a limited liability company, has and will have at
least one member that has been and will be a Special Purpose Bankruptcy Remote Entity that has been and will be a corporation or a limited liability company and such corporation or limited liability company is the managing member of such limited
liability company; 
 (viii)     if such entity is a limited liability company,
has and will have articles of organization, a certificate of formation and/or an operating agreement, as applicable, providing that (A) such entity will dissolve only upon the bankruptcy of the managing member, (B) the vote of a
majority-in-interest of the remaining members is sufficient to continue the life of the limited liability company in the event of such bankruptcy of the managing member and (C) if the vote of a majority-in-interest of the remaining members to
continue the life of the limited liability company following the bankruptcy of the managing member is not obtained, the limited liability company may not liquidate the Property without the consent of the applicable Rating Agencies for as long as the
Loan is outstanding; 

  
 2 

 (ix)      has not, and without the
unanimous consent of all of its partners, directors or members (including all Independent Directors), as applicable, will not, with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest
(A) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (B) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of such entity’s properties, (C) make any assignment for the benefit of such
entity’s creditors or (D) take any action with the intention of rendering the Company insolvent; 

(x)       has remained and intends to remain solvent and has maintained and
intends to maintain adequate capital in light of its contemplated business operations; 

(xi)      has not failed and will not fail to correct any known misunderstanding
regarding the separate identity of such entity; 
 (xii)     has maintained and
will maintain its accounts, books and records separate from any other Person and will file its own tax returns; 
 (xiii)    has maintained and will maintain its books, records, resolutions and agreements as official records; 

(xiv)    has not commingled and will not commingle its funds or assets with those of any
other Person; 
 (xv)     has held and will hold its assets in its own name;

 (xvi)    has conducted and will conduct its business in its name, 

(xvii)   has maintained and will maintain its financial statements, accounting records and other
entity documents separate from any other Person; 
 (xviii)  has paid and will pay its own
liabilities, including the salaries of its own employees, out of its own funds and assets; 

(xix)     has observed and will observe all partnership, corporate or limited liability
company formalities, as applicable; 
 (xx)      has maintained and will
maintain an arm’s-length relationship with its Affiliates; 

(xxi)     (a) if such entity owns the Property, has and will have no indebtedness
other than the Loan and unsecured trade payables in the ordinary course of business which (1) do not exceed $100,000, at any time, and (2) are paid within sixty (60) days of the date incurred, or (b) if such entity acts as the
general partner of a limited partnership which owns the Property, has and will have no indebtedness other than unsecured trade payables in the ordinary course of business relating to acting as general partner of the limited partnership which owns
the Property which (1) do not exceed, at any time, $100,000 and (2) are paid within sixty 

  
 3 

 
(60) days of the date incurred, or (c) if such entity acts as a managing member of a limited liability company which owns the Property, has and will have no indebtedness other than unsecured
trade payables in the ordinary course of business relating to acting as a member of the limited liability company which owns the Property which (1) do not exceed, at any time, $100,000 and (2) are paid within sixty (60) days of the
date incurred; 
 (xxii)   has not and will not assume or guarantee or become obligated
for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except for the Loan; 
 (xxiii)  has not and will not acquire obligations or securities of its partners, members or shareholders; 

(xxiv)  has allocated and will allocate fairly and reasonably shared expenses, including shared office
space, and uses separate stationery, invoices and checks; 
 (xxv)   except in connection
with the Loan, has not pledged and will not pledge its assets for the benefit of any other Person; 

(xxvi)  has held itself out and identified itself and will hold itself out and identify itself as a
separate and distinct entity under its own name and not as a division or part of any other Person; 

(xxvii) has maintained and will maintain its assets in such a manner that it will not be costly or difficult
to segregate, ascertain or identify its individual assets from those of any other Person; 

(xxviii) has not made and will not make loans to any Person; 

(xxix)  has not identified and will not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it; 
 (xxx)   has not entered into or
been a party to, and will not enter into or be a party to, any transaction with its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are intrinsically fair and are no less favorable to it
than would be obtained in a comparable arm’s-length transaction with an unrelated third party; 

(xxxi)   has and will have no obligation to indemnify its partners, officers, directors, members
or Special Members, as the case may be, or has such an obligation that is fully subordinated to the Indebtedness and will not constitute a claim against it if cash flow in excess of the amount required to pay the Indebtedness is insufficient to pay
such obligation; and 
 (xxxii) will consider the interests of such entity, including its
creditors, in connection with all corporate, partnership or limited liability actions, as applicable. 

“Independent Director” means (x) in the case of a Single Member Bankruptcy Remote LLC: a
natural person selected by Borrower and reasonably satisfactory to Agent who 

  
 4 

 
shall not have been at the time of such individual’s appointment as an Independent Director of the Single Member Bankruptcy Remote LLC, does not thereafter become while serving as an
Independent Director (except pursuant to an express provision in the Single Member Bankruptcy Remote LLC’s limited liability company agreement providing for the Independent Director to become a Special Member (defined below) upon the sole
member of such Single Member Bankruptcy Remote LLC ceasing to be a member in such Single Member Bankruptcy Remote LLC) and shall not have been at any time during the preceding five (5) years (i) a shareholder/partner/member of, or an
officer or employee of, Borrower or any of its shareholders, subsidiaries or Affiliates, (ii) a director (other than as an Independent Director) of any shareholder, subsidiary or Affiliate of Borrower, (iii) a customer of, or supplier to,
Borrower or any of its shareholders, subsidiaries or Affiliates (other than a supplier of independent director or other corporate services), (iv) a Person who Controls any such shareholder, supplier or customer, or (v) a member of the
immediate family of any such shareholder/ director/partner/member, officer, employee, supplier or customer or of any director of Borrower (other than as an Independent Director); and (y) in the case of a corporation, an individual selected by
Borrower and reasonably satisfactory to Agent who shall not have been at the time of such individual’s appointment as a director, does not thereafter become while serving as an Independent Director and shall not have been at any time during the
preceding five (5) years (i) a shareholder/partner/member of, or an officer, employee, consultant, agent or advisor of, Borrower or any of its shareholders, subsidiaries, members or Affiliates, (ii) a director of any shareholder,
subsidiary, member, or Affiliate of Borrower other than Borrower’s general partner or managing member, (iii) a customer of, or supplier to, Borrower or any of its shareholders, subsidiaries or Affiliates that derives more than 10% of its
purchases or income from its activities with Borrower or any Affiliate of Borrower, (iv) a Person who Controls any such shareholder, supplier or customer, or (v) a member of the immediate family (including a grandchild or sibling) of any
such shareholder/director/partner/member, officer, employee, supplier or customer or of any other director of Borrower’s general partner or managing member. 

“Single Member Bankruptcy Remote LLC” means a limited liability company organized under the laws
of the State of Delaware which at all times since its formation and at all times thereafter (i) complies with the following clauses of the definition of Special Purpose Bankruptcy Remote Entity above: (i)(A), (ii)(A), (iii), (iv), (ix), (x),
(xi) and (xiii) through (xxxii); (ii) has maintained and will maintain its accounts, books and records separate from any other person; (iii) has and will have an operating agreement which provides that the business and affairs of
Borrower shall be managed by Sole Member, and at all times there shall be at least one (1) duly appointed Independent Director, and the limited liability company will not take any action requiring the unanimous affirmative vote of 100% of the
independent directors unless, at the time of such action there is at least one (1) Independent Director, and all of the directors and all Independent Directors shall have participated in such vote; (iv) has and will have an operating
agreement which provides that, as long as any portion of the Indebtedness remains outstanding, (A) upon the occurrence of any event that causes Sole Member to cease to be a member of Borrower (other than (x) upon an assignment by Sole
Member of all of its limited liability company interest in Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower and the Loan Documents, or (y) the resignation of Sole Member and the
admission of an additional member of Borrower, if permitted pursuant to the organizational documents of Borrower and the Loan Documents), the person acting as an 

  
 5 

 
Independent Director of Borrower shall, without any action of any Person and simultaneously with Sole Member ceasing to be a member of Borrower, automatically be admitted as the sole member of
Borrower (the “Special Member”) and shall preserve and continue the existence of Borrower without dissolution, (B) no Special Member may resign or transfer its rights as Special Member unless (x) a successor Special Member
has been admitted to Borrower as a Special Member, and (y) such successor Special Member has also accepted its appointment as an Independent Director and (C) except as expressly permitted pursuant to the terms of this Agreement, Sole
Member may not resign and no additional member shall be admitted to Borrower; (v) has and will have an operating agreement which provides that, as long as any portion of the Indebtedness remains outstanding, (A) Borrower shall be
dissolved, and its affairs shall be would up only upon the first to occur of the following: (x) the termination of the legal existence of the last remaining member of Borrower or the occurrence of any other event which terminates the continued
membership of the last remaining member of Borrower in Borrower unless the business of Borrower is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the “Act”) or (y) the
entry of a decree of judicial dissolution under Section 18-802 of the Act; (B) upon the occurrence of any event that causes the last remaining member of Borrower to cease to be a member of Borrower or that causes Sole Member to cease to be
a member of Borrower (other than (x) upon an assignment by Sole Member of all of its limited liability company interest in Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower and the
Loan Documents, or (y) the resignation of Sole Member and the admission of an additional member of Borrower, if permitted pursuant to the organizational documents of Borrower and the Loan Documents), to the fullest extent permitted by law, the
personal representative of such member shall be authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in Borrower, agree in writing to continue the existence of Borrower
and to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower, effective as of the occurrence of the event that terminated the continued membership of such member in Borrower;
(C) the bankruptcy of Sole Member or a Special Member shall not cause such member or Special Member, respectively, to cease to be a member of Borrower and upon the occurrence of such an event, the business of Borrower shall continue without
dissolution; (D) in the event of dissolution of Borrower, Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of Borrower in an orderly manner), and the assets of Borrower shall
be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and (E) to the fullest extent permitted by law, each of Sole Member and the Special Members shall irrevocably waive any right or power that
they might have to cause Borrower or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of Borrower, to compel any sale of all or any portion of the assets of Borrower pursuant to any
applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of Borrower. 

  
 6 

 SCHEDULE 2 
 None. 

 SCHEDULE 3 
 None. 

 SCHEDULE 4 
 Bank of the West, Operating Account, #014520288 

 SCHEDULE 5 

 

					
	  

Management Agreement
	  	  

Integral Senior Living
	  	  

Current, No Default

	  

Landscaping Contract
	  	  
 Jensen Landscaping
	  	  
 Current, No Default

	  

Copier Maintenance
	  	  
 Zoom Imaging
	  	  
 Current, No Default

 SCHEDULE 6 
 Residential Care Facility License issued by the State of California Department of Social Services. Facility number 097004177. 

 SCHEDULE 7 
 Phone system is leased from Mitel Leasing, Inc. 

 SCHEDULE 8 
 2009 Ford 18 Passenger Bus-   VIN 1fdfe45p19da42185 
 2009 Toyota Sienna
Van-   VIN 5tdzk23c19s26574b 

 SCHEDULE 9 
 Job discrimination lawsuit filed against multiple defendants including, Erik N. Pilegaard, on April 11, 2011 by Tracy DaOro in the U.S. District Court, Eastern District of California - Case #
2:11-cv-00960-KJM-JFM.

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