Document:

Exhibit 10.3

 

This FIRST AMENDMENT
TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made as of December 18, 2013 between WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Seller”), and AQUA PROPERTY NT-HCI, LLC, a Delaware limited liability company (“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, Seller and
Buyer are parties to that certain Purchase and Sale Agreement dated as of November 19, 2013 (the “PSA”), with respect
to the sale of certain premises commonly known as the Pinebrook Retirement Living Center in Milford, Ohio, as more particularly
described therein; and

 

WHEREAS, Seller and
Buyer desire to amend the PSA as provided below.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.          All
capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the PSA.

 

2.          The
definition of “Review Period” (as defined in Section 1.1 of the PSA) shall be amended by replacing the reference to
“December 18, 2013” in clause (a)(i) thereof to “December 23, 2013”.

 

3.          The
definition of “Assumed Obligations” (as defined in Section 1.1 of the PSA) shall be amended in its entirety to read
as follows:

 

“Assumed Obligations”:
  All obligations and liabilities of Seller under the Loan Documents, including those relating to servicing the Loan, for the Post-Closing
period, except for (a) any such obligations or liabilities arising under any provisions thereof which have been redacted, obscured
or removed in the copies provided to Buyer’s counsel by Michael Pardoll on November 25, 2013 via the Marcus & Millichap
secured site, and (b) any such obligations or liabilities under the Settlement Agreement that relate to borrowers other than Borrower,
properties other than the Collateral, or any guarantor of Borrower’s or any other borrower’s obligations under the
Loan Documents.

 

4.          The
definition of “Deposit” (as defined in Section 1.1 of the PSA) shall be amended by replacing phrase “on the Commitment
Date or the next Business Day” in the third line thereof with “no later than 5:00 pm (EST) on December 19, 2013”.
The provisions of Section 2.1 of the PSA shall be amended by replacing phrase “On the Commitment Date or the next Business
Day” in the third and fourth lines thereof with “No later than 5:00 pm (EST) on December 19, 2013”.

 

5.          Except
as expressly set forth in this Amendment, the PSA is unmodified and is in full force and effect, and the PSA as modified by this
Amendment is ratified and confirmed. All references to the PSA shall be deemed to refer to the PSA as amended by this Amendment.

  

    	 

    	 

    

  

 

6.         This Amendment
(i) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, (ii) may
be executed in one or more counterparts, each of which shall constitute an original and all of which, when taken together, shall
constitute one and the same instrument, even where such executed counterpart is delivered via facsimile or Portable Document Format,
and (iii) shall be governed, interpreted and enforced in accordance with the provisions of the PSA.

 

[Remainder of page intentionally left blank]

 

    	 

    	 

    

  

IN WITNESS WHEREOF, Seller and Buyer have
executed this Amendment as of the date first above written.

 

	SELLER:
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 
	By:	  /s/ Jeff Cheng
	 Name: Jeff Cheng
	 Title:  Vice President

 

	BUYER: 
	 
	AQUA PROPERTY NT-HCI, LLC, 
	a Delaware limited liability company
	 
	By:	  /s/ Daniel R. Gilbert
	Name:  Daniel R. Gilbert
	Title:    Chief Executive Officer

 

[Signature Page to First Amendment to Purchase
and Sale Agreement]Exhibit 10.4

 

This SECOND AMENDMENT
TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made as of December 23, 2013 between WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Seller”), and AQUA PROPERTY NT-HCI, LLC, a Delaware limited liability company (“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, Seller and
Buyer are parties to that certain Purchase and Sale Agreement dated as of November 19, 2013 (as amended from time to time, the
“PSA”), with respect to the sale of certain premises commonly known as the Pinebrook Retirement Living Center in Milford,
Ohio, as more particularly described therein; and

 

WHEREAS, Seller and
Buyer desire to amend the PSA as provided below.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.          All capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in the PSA.

 

2.          The definition
of “Scheduled Closing Date” (as defined in Section 1.1 of the PSA) shall be amended by replacing the reference to “December
23, 2013” in clause (a)(i)(A) thereof to “December 27, 2013”.

 

3.          Pursuant to Section
2.3 of the PSA, Buyer is hereby deemed to give notice to Seller that Buyer is electing to proceed with the Transaction, and, accordingly,
the “Commitment Date” shall be deemed to have occurred as of December 23, 2013 and the Review Period shall be deemed
to have expired on such Commitment Date.

 

4.          Except as expressly
set forth in this Amendment, the PSA is unmodified and is in full force and effect, and the PSA as modified by this Amendment is
ratified and confirmed. All references to the PSA shall be deemed to refer to the PSA as amended by this Amendment.

 

5.         This Amendment
(i) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, (ii) may
be executed in one or more counterparts, each of which shall constitute an original and all of which, when taken together, shall
constitute one and the same instrument, even where such executed counterpart is delivered via facsimile or Portable Document Format,
and (iii) shall be governed, interpreted and enforced in accordance with the provisions of the PSA.

 

[Remainder of page intentionally left blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, Seller and Buyer have
executed this Amendment as of the date first above written.

 

	SELLER:
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 
	By:	 /s/  David Arreola 
	  Name: David Arreola
	  Title:  Vice President

 

	BUYER: 
	 
	AQUA PROPERTY NT-HCI, LLC, 
	a Delaware limited liability company
	 
	By:	  /s/ Ronald J. Lieberman
	   Name: Ronald J.  Lieberman
	   Title:  Executive Vice President, General Counsel
	              and Secretary

 

[Signature Page to Second Amendment to Purchase and Sale Agreement]Exhibit 10.5

  

MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT
(“Agreement”) is made as of the 27th day of December, 2013, by and between Watermark Retirement Communities, Inc.,
an Arizona corporation (“Manager”), and Watermark Pinebrook LLC, a Delaware limited liablilty company (“Owner”).

 

WHEREAS, Owner is the lessee
under that certain Operating Lease, dated as of December 27, 2013, by and between Watermark Pinebrook Owner, LLC, a Delaware limited
liability company, as lessor (“Lessor”), and Owner with respect to certain real and personal property located at 5877
Wolfpen-Pleasant Hill Road, Miami Township, Ohio, and the buildings and improvements thereon utilized as a senior housing community,
known as Pinebrook, a Watermark Community (the “Community”);

 

WHEREAS, Manager is qualified
in the supervision, operation and management of senior housing communities and desires to act as Owner’s independent consultant
and contractor to operate and manage the Community and perform certain other related functions; and

 

WHEREAS, Owner desires
to have Manager manage the Community and Manager is willing to perform such services for the account of Owner on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration
of the promises and the mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows:

 

Article
I

DEFINITIONS

 

		1.1	Defined Terms. In addition to the terms defined elsewhere in this Agreement, the following
terms shall have the meanings assigned to them herein:

 

		a)	Accounting Period shall mean each month.

 

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

 

		c)	Agreement shall have the meaning described in the Introductory Paragraph.

 

		d)	Agreement Termination Fee shall have the meaning described in Section 4.1(b).

 

		e)	Annual Financial Statement shall have the meaning described in Section 8.2(c).

 

		f)	Authorized Expenditures shall have the meaning described in Section 6.2.

 

		g)	Capital Expenditures Budget shall have the meaning described in Section 7.1(c).

 

    	Schedule J-1

    	 

    

  

		h)	Cash Flow Budget shall have the meaning described in Section 7.1(b).

 

		i)	Claims shall have the meaning described in Section 2.2(a).

 

		j)	Code shall mean the Internal Revenue Code of 1986, as in effect and hereafter amended, and, unless
the context otherwise requires, applicable regulations thereunder. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of future law.

 

		k)	Community shall have the meaning described in the Introductory Paragraph.

 

		l)	Community Employees shall have the meaning described in Section 5.3(a).

 

		m)	Consumable Supplies shall mean office supplies, cleaning supplies, uniforms, laundry and valet
supplies, engineering supplies, soap, toilet tissues and such other supplies as are consumed customarily on a daily basis in the
operation of the Community, together with food and beverages that are to be served or offered for sale to residents of the Community
and to the public.

 

		n)	Control, Controls and Controlled by shall mean the ability, directly or indirectly, whether through
the ownership of voting securities, by contract, or otherwise (including by being the general partner, officer or director of the
Person in question), to direct or cause the direction of the management and policies of a Person.

 

		o)	Default Rate shall have the meaning described in Section 2.3(b).

 

		p)	Disability means, with respect to any Person, any condition that will prevent or materially hinder
such Person from discharging his duties on behalf of the Manager for any period of forty-five (45) consecutive days or a total
of one hundred-twenty (120) days in any six (6) month period or is adjudicated mentally incompetent by a court.

 

		q)	Effective Date shall mean the date hereof.

 

		r)	Eligible Independent Contractor shall mean a management company that meets all of the following
requirements:

 

		i)	The management company does not own, directly or indirectly, more than nine and nine-tenths percent
(9.9%) of the equity interests in the NorthStar REIT;

 

		ii)	If the management company is a corporation (within the meaning of the Code), no more than nine
and nine-tenths percent (9.9%) of the total combined voting power of such management company’s outstanding stock (or nine
and nine-tenths percent
(9.9%) of the total shares of all classes of the outstanding stock) or, if it is not a corporation, no more than nine and

 

    	Schedule J-2

    	 

    

 

 nine-tenths
percent (9.9%) of the ownership interest in its assets or profits is owned directly or indirectly, by one or more Persons owning
nine and nine-tenths percent (9.9%) or more of the equity interests of the NorthStar REIT;

 

		iii)	None of the NorthStar REIT (nor any of its Affiliates), Owner Parent, Watermark Aqua Owner, LLC,
or Owner derive any income from the management company. For this purpose, the NorthStar REIT (or any of its Affiliates), Owner
Parent, Watermark Aqua Owner, LLC, or Owner will be treated as deriving income from the management company if the NorthStar REIT
(or any of its Affiliates), Owner Parent, Watermark Aqua Owner, LLC, or Owner leases property to the management company (or an
Affiliate of the management company), unless the lease is to an Affiliate of the management company that is a separate legal entity
for state law purposes and federal income tax purposes from the management company and that is not a direct or indirect subsidiary
of the management company, such Affiliate maintains its own bank accounts and books and records, and such Affiliate has its own
employees under its separate control;

 

		iv)	At all times, the management company (or any “related persons” within the meaning of
Section 856(d)(9)(F) of the Code) is actively engaged in the trade or business of operating “qualified health care properties”
within the meaning of Section 856(e)(6)(D)(i) of the Code for any Person who is not a “related persons” within the
meaning of Section 856(d)(9)(F) of the Code with respect to the NorthStar REIT (or any of its Affiliates), Owner Parent, Watermark
Aqua Owner, LLC, or Owner (an “Unrelated Person”). For purposes of determining whether the requirement of this
paragraph (iv) has been met, a management company shall be treated as being actively engaged in such a trade or business if the
management company (A) maintains at least three (3) management contracts (and has a continuing obligation to actively pursue replacement
contracts if necessary) to manage three separate “qualified health care properties” within the meaning of 856(e)(6)(D)(i)
of the Code for Unrelated Persons, and (B) complies with any regulations or other administrative guidance under Section 856(d)(9)
of the Code that provides a “safe harbor” rule with respect to the amount of health care facility management business
with Unrelated Persons that is necessary to qualify as an “eligible independent contractor” within the meaning of such
Code section.

 

		s)	Emergency Expenses means any expense which is necessary to (a) prevent an immediate threat to the
health, safety or welfare of any resident or other person in the immediate vicinity of the Community, (b) prevent immediate
damage or loss to the Community, (c) avoid the suspension of essential services to, or essential licenses at, a Community, or (d)
avoid criminal or civil liability on the part of Owner or Manager with respect to activities at the Community or pursuant to this
Agreement or the Owner Parent Operating Agreement.

 

    	Schedule J-3

    	 

    

  

		t)	Entry Fee shall mean and refer to all deposits of whatsoever nature or kind paid by residents including
but not limited to security deposits, damage deposits and entry fees paid by residents for the use and occupancy of the Community.

 

		u)	Equipment Leases shall mean any leases or rental agreements for Operating Equipment or Furniture,
Furnishings and Equipment used in the Community, or any modifications or renewals thereof, presently existing or made subsequent
to the date of this Agreement.

 

		v)	Federal Privacy Regulations shall have the meaning described in Section 5.19.

 

		w)	Federal Security Regulations shall have the meaning described in Section 5.19.

 

		x)	Fiscal Year shall mean each January through December during the Operating Term of this Agreement,
except that the first Fiscal Year shall be the period commencing on the Effective Date and ending on December 31. The words “full
Fiscal Year” shall mean any Fiscal Year containing not fewer than 365 days. A partial Fiscal Year after the end of the last
full Fiscal Year and ending with the expiration or earlier termination of the Operating Term shall constitute a separate Fiscal
Year.

 

		y)	Force Majeure shall have the meaning described in Section 12.15.

 

		z)	Furniture, Furnishings and Equipment (“FF&E”) shall mean furniture and furnishings
of public areas and rooms, office furniture and equipment, signs, carpets, televisions, computers and other electrical and electronic
equipment, any vehicles and such other furnishings and equipment (other than Operating Equipment) as are used in the operation
of the Community.

 

		aa)	Gross Revenues for the Community shall mean the total of all rents, revenues, income and receipts
(less any discounts) of every kind derived directly or indirectly from the operation of the Community and all departments and parts
thereof, including, without limitation, income (from cash and credit transactions before commissions) from the rental of rooms
and apartments, amortization of resident entry fees in accordance with generally accepted accounting practices, termination fees,
service charges, and proceeds, if any, from business interruption or other loss of income insurance. Gross Revenues for the Community
shall not include, as applicable (i) the proceeds of sales or dispositions of capital assets used in the operation of such Community
or sales or dispositions of investment assets, notes or loans receivable; (ii) donations or grants; (iii) refunds, rebates, refinancing
and sale and insurance proceeds (except business interruption insurance as described above); (iv) fee simple sales; (v) condominium
sales; (vi) payments received as interest or principal on notes or loans receivable; (vii) condemnation awards or (viii) resident
security deposits.

 

		bb)	HIPAA shall have the meaning described in Section 5.19.

 

		cc)	Home Office Reimbursables shall have the meaning described in Section 5.13.

 

    	Schedule J-4

    	 

    

		dd)	Key Person shall mean each of David Freshwater and David Barnes.

 

		ee)	Key Person Event shall mean the failure of at least one Key Person to do both of the following:
(A) remain actively engaged in the executive management of Manager and (B) devote a sufficient amount of his time to the operations
of the Community.

 

		ff)	Lender shall mean General Electric Capital Corporation, as administrative agent for certain lenders.

 

		gg)	Lessor shall have the meaning described in the Introductory Paragraph.

 

		hh)	Loan shall mean, individually and collectively, the loan made by each Lender, and the corresponding
loan documents entered into by [Owner] and each Lender.

 

		ii)	Management Fee shall have the meaning described in Section 2.3(a).

 

		jj)	Manager Liability Claims shall have the meaning described in Section 2.2(a).

 

		kk)	Marketing Plan shall have the meaning described in Section 7.1(d).

 

		ll)	Material Breach shall mean a breach of this Agreement by Manager pursuant to Subsections 4.1(d)(i),
4.1(d)(iii), 4.1(d)(iv) or 4.1(d)(ix).

 

		mm)	Material License shall have the meaning described in Section 4.1(d)(v).

 

		nn)	Material License Event shall have the meaning described in Section 4.1(d)(vi).

 

		oo)	Miscellaneous Contracts shall mean any contract or commitment or outstanding bid or proposal, whether
oral or written, relating to the operation or ownership of the Community, or any modification or renewal thereof, whether presently
existing or made subsequent to the date of this Agreement by Owner or by Manager pursuant to this Agreement. Miscellaneous Contracts
shall include, without limitation, all service contracts, employment contracts and union contracts, but shall not include mortgages
and Equipment Leases.

 

		pp)	Monthly Operating Statements shall have the meaning described in Section 8.2(a).

 

		qq)	Net Operating Income shall mean Gross Revenues less Operating Expenses.

 

		rr)	Non-Discretionary Expenses means payments made to third parties on account of (a) Emergency Expenses;
or (b) other non-discretionary expenditures such as real estate taxes, insurance premiums, utility charges, and other third-party
non-discretionary expenses of a similar nature if the failure to pay the same would result in a default under a Loan, the suspension
of any essential service or license relating to the Community or any other material and adverse effect on the Community.

 

    	Schedule J-5

    	 

    

  

		ss)	NorthStar Member shall mean Aqua Operations NT-HCI, LLC, a Delaware limited liability company.

 

		tt)	NorthStar REIT shall mean NorthStar Healthcare Income, Inc., a Maryland corporation.

 

		uu)	Notice Period shall have the meaning described in Section 4.1(b).

 

		vv)	Operating Account shall mean a checking account for the Community established at a federally insured
financial institution selected from time to time by Manager which shall be separate and apart from any of Manager’s or Owner’s
other accounts. Manager shall not be held liable in the event of bankruptcy or failure of a depository institution. The Operating
Account shall be established in accordance with requirements of the Loan, if any.

 

		ww)	Operating Budget shall have the meaning described in Section 7.1(a).

 

		xx)	Operating Equipment shall mean chinaware, glassware, linens, silverware, utensils, and other items
of a like or similar nature used in the operation of the Community.

 

		yy)	Operating Expenses for the Community for any period shall include the following outlays, provided,
in each case, that such outlay is in accordance with the approved Operating Plan then in effect:

 

		i)	All wages and salaries of all Community Employees (exclusive of salaries paid to corporate executive
personnel of Manager, but including such wages, salaries and other compensation chargeable to the Community pursuant to Section
5.13 hereof, but only to the extent so chargeable) employed by Manager in connection with the operation and management of the Community
and all other payroll costs, fringe benefits, employer taxes and similar charges related to employment of such Community Employees;

 

		ii)	All department and administrative and general expenses relating to the Community, including, without
limitation, advertising and promotional expenses specific to the Community including the allocable portion of such costs billed
to multiple seniors housing communities (it being agreed that any pro rata allocation of advertising and promotional expenses applicable
to other senior housing communities or properties managed by Manager in addition to the Community shall require the consent of
Owner but the portion allocable to the Community shall constitute Operating Expenses hereunder), and costs of heat, light, power
and other utilities;

 

		iii)	All costs and expenses of routine maintenance, repairs and minor alterations which are necessary
to keep the Community in good operating condition and which, under generally accepted accounting principles, are expensed currently
rather than capitalized;

 

    	Schedule J-6

    	 

    

		iv)	All license fees and permits relating to the Community or the operation thereof;

 

		v)	All amounts due under service contracts relating to the Community or operation thereof;

 

		vi)	All costs and fees of technical consultants and operational experts for technical or specialized
services rendered with respect to the Community (such as, for example, a property tax consultant or union consultant) and which,
under generally accepted accounting principles, are expensed currently rather than capitalized;

 

		vii)	All compensation and (without duplication of any other items listed in this definition) reimbursements
paid to Manager under this Agreement with respect to its operation of the Community, including Section 5.13 hereof;

 

		viii)	All costs and expenses of insurance specific to the Community (and not with respect to other senior
housing communities or properties managed by Manager or Manager generally) as described in Section 11 and all local, state and
federal taxes (exclusive of income taxes), including but not limited to real estate and personal property taxes, sales taxes, property
assessments, service charges and other items included in a property tax billing;

 

		ix)	All costs necessary to keep the Community in compliance with any state or federal licensing requirements;
and

 

		x)	All other costs and expenses incurred and capable of being properly listed as expenses on a complete
and accurate profit and loss statement for the Community.

 

		zz)	Operating Plan shall have the meaning described in Section 7.1.

 

		aaa)	Operating Term shall have the meaning described in Section 3.1.

 

		bbb)	Owner shall have the meaning described in the Introductory Paragraph.

 

		ccc)	Owner Parent shall mean Watermark Aqua Operator, LLC, a Delaware limited liability company, which
is the direct or indirect owner of all of the membership interests in Owner.

 

		ddd)	Owner Parent Operating Agreement shall mean that certain Limited Liability Company Agreement of
Owner Parent, dated as of December __, 2013, by and between the NorthStar Member and the TFG Member.

 

		eee)	Person shall mean any individual, corporation, association, partnership, limited liability company,
joint venture, trust, estate or other entity or organization.

 

    	Schedule J-7

    	 

    

		fff)	PHI shall have the meaning described in Section 5.19.

 

		ggg)	Quarterly Financial Statement shall have the meaning described in Section 8.2(b).

 

		hhh)	Renewal Term shall have the meaning described in Section 3.1.

 

		iii)	Resident Refunds shall mean amounts due to residents after moving out of their apartments as specified
in their residency agreements.

 

		jjj)	TFG Member shall mean Watermark Aqua Investments, LLC, a Delaware limited liability company.

 

		kkk)	Working Capital shall have the meaning described in Section 6.4.

 

Article
II

APPOINTMENT AND COMPENSATION
OF MANAGER

 

		2.1	Appointment of Manager.

 

		a)	Owner hereby appoints and engages Manager, and Manager hereby accepts appointment by Owner on the
terms and conditions hereinafter provided, to stabilize, maintain, operate, manage, supervise, rent and lease the Community on
Owner’s behalf. The performance of all activities by Manager hereunder shall be as an independent contractor and not as an
agent of Owner, except as otherwise specifically provided herein. With reference to any item in this Agreement, whenever written
criteria are submitted to Manager from Owner, Manager shall use its best efforts to meet such criteria; however, if no written
criteria are submitted to Manager, Manager shall carry out the policies and terms of this Agreement in a manner consistent with
the highest standards of professional management applicable to the senior living industry.

 

		b)	The parties to this Agreement understand and acknowledge that Manager is an affiliate of the TFG
Member and the TFG Member is the current Administrative Member (as defined in the Owner Parent Operating Agreement) of Owner Parent.
Manager acknowledges and agrees that, as an affiliate of the TFG Member, Manager has (and shall be deemed to have) knowledge of
and familiarity with all of the terms and conditions of the Owner Parent Operating Agreement including, but not limited to (i)
requirements under the Owner Parent Operating Agreement to obtain the consent or approval of the NorthStar Member for certain decisions
as therein provided, (ii) the provisions of the Owner Parent Operating Agreement regarding removal of the TFG Member as the Administrative
Member and the termination of this Agreement, and (iii) the provisions of the Owner Parent Operating Agreement regarding the exercise
of rights and the enforcement of remedies of Owner under this Agreement by the NorthStar Member. Without limiting the foregoing
or any other provisions of this Agreement limiting the right of Manager to act on behalf of Owner or otherwise take any action,
Manager will not take or effectuate any NorthStar Approval Action (as defined in the Owner

 

    	Schedule J-8

    	 

    

 

Parent Operating
Agreement) without first obtaining the consent of the NorthStar Member in accordance with the Owner Parent Operating Agreement.

 

		2.2	Indemnification.

 

		a)	By Manager. Manager shall indemnify, defend and hold Owner (including the members and affiliates
of Owner and the shareholders, directors, officers, employees and agents of Owner and such members and affiliates) harmless from
and against any and all third party claims, damages, liabilities, costs and expenses (including, without limitation, experts’
and attorneys’ fees and expenses), actions proceedings, demands or suits of any kind (“Claims”) arising directly
or indirectly from (i) the gross negligence, willful misconduct or fraud in managing and/or operating the Community, (ii) any claims
of Community Employees at the Community if and to the extent such claims arise from Manager’s gross negligence, willful misconduct,
fraud or Material Breach, or (iii) a Material Breach of this Agreement by Manager (collectively, “Manager Liability Claims”).
For the avoidance of doubt, neither Claims resulting from environmental conditions at the Community (other than to the extent caused
by the gross negligence, willful misconduct, criminal acts or fraud of Manager) nor Claims resulting from the actions or inactions
of Community Employees at the Community (so long as neither the hiring nor supervision of such employees, in and of itself, constituted
gross negligence, or fraud willful misconduct of Manager) shall be deemed to be Manager Liability Claims. All costs and expenses
incurred by Manager under this Section 2.2(a) shall be born solely by Manager and shall not be treated as Authorized Expenditures.

 

		b)	By Owner. Owner shall indemnify, defend and hold Manager harmless from and against any and
all Claims arising directly or indirectly from the ownership, operation and management of the Community except to the extent that
such Claims are Manager Liability Claims. All costs and expenses incurred by Owner under this Subsection 2.2(b) shall be Authorized
Expenditures (as defined in Section 6.2).

 

		c)	Survival. This Section 2.2 shall survive the termination of this Agreement.

 

		2.3	Management Fee.

 

		a)	Commencing on the Effective Date, Owner shall pay Manager a monthly management fee equal to Five
Percent (5%) of Gross Revenue (prorated for partial months) (the “Management Fee”). The Manager acknowledges that the
Management Fee (together with any other compensation to Manager set forth herein) adequately compensates it for the services it
is to perform hereunder.

 

		b)	An estimate of the Management Fee shall be due and payable on the first (1st) business day of the
month in which such services are to be provided; provided, however, that the actual Management Fee shall thereafter
be adjusted, from time to time, based upon the actual Gross Revenues billed during such month and

 

    	Schedule J-9

    	 

    

 

reconciled against
the estimated Management Fee previously paid to Manager for such month within twenty-five (25) days following conclusion of such
month. Manager is hereby authorized and directed to withdraw and pay Manager for its services as provided for herein on the due
dates thereof from the Operating Accounts.

 

		c)	Owner shall also pay Manager a one-time fee of Fifteen Thousand Dollars ($15,000) to cover the
Manager’s start-up and mobilization costs.

 

		d)	Any dispute, claim or controversy arising out of or relating to this Section 2.3 shall be determined
by binding arbitration in New York, New York before a sole arbitrator (who must be a current, former or retired federal district
judge, or an experienced arbitrator who has been admitted to the practice of law for at least fifteen years, each with experience
with large, complex real estate and retirement facility disputes). The parties hereto shall have twenty (20) days from receipt
by respondent of notice of a dispute to agree on the identity of the arbitrator. If the parties cannot timely agree on the arbitrator,
the arbitrator shall be appointed by the American Arbitration Association. The arbitrator shall render a decision within thirty
(30) days of selection, and shall allocate all of the costs of arbitration, including the fees of the arbitrator and the reasonable
attorneys’ fees of the prevailing party.

 

		2.4	Eligible Independent Contractor.

 

		a)	Manager hereby represents and warrants that, as of the Effective Date, Manager satisfies the requirements
and conditions of being an Eligible Independent Contractor.

 

		b)	Manager hereby covenants that, at all times during the Operating Term, it shall maintain its status
as an Eligible Independent Contractor and shall not do, or omit to do, anything that would cause Manager to no longer meet the
requirements of being an Eligible Independent Contractor.

 

		c)	Within five (5) business days of Owner’s request, Manager shall deliver to Owner a certificate,
executed by an executive officer of Manager, addressed to the NorthStar REIT and, and in the form attached hereto as Schedule
E, confirming that either (i) Manager is, and has at all times from and after the date of this Agreement been, in compliance
with the terms of this Section 2.4, (ii) Manager is in compliance with the terms of this Section 2.4 and has timely cured any past
failure to comply with the terms of this Section 2.4, or (iii) Manager is using commercially reasonable efforts to cure any failure
to comply with the terms of this Section 2.4.

 

		d)	If there shall be an amendment or modification to Section 856(d)(9) of the Code after the date
of this Agreement that adversely impacts Manager’s qualification as an Eligible Independent Contractor under the Code, Manager
shall cooperate reasonably with Owner, the NorthStar REIT and their respective Affiliates and

 

    	Schedule J-10

    	 

    

  

shall exercise reasonable
efforts to effectuate solutions or “workarounds” to address any REIT qualification concerns under the Code of the NorthStar
REIT and its Affiliates arising out of any such amendment or modification; provided that (i) to the extent reasonably practicable,
any such changes shall be structured so as to not have any negative impact on Manager in any material respect, and (ii) Owner shall
bear one hundred percent (100%) of the cost (including legal fees for Manager) in connection with the negotiation and documentation
of any such amendments or modifications.

 

		e)	Manager shall notify Owner within five (5) business days of any matter, event, transaction or other
circumstance that, to Manager’s knowledge, could reasonably be expected to (i) violate the terms of this Section 2.4 and
(ii) jeopardize or threaten the qualification or status or legal compliance with any government regulations relating to the operation
or qualification as a real estate investment trust for United States federal tax purposes, of the NorthStar REIT or its Affiliates
(either presently or with the passage of time) or both.

 

		f)	Manager acknowledges that Owner, the NorthStar REIT and/or their respective Affiliates may suffer
immediate and irreparable harm in the event of any breach by Manager of any of its obligations contained in this Section 2.4. Accordingly,
Owner, as its sole and exclusive remedy in the event of a breach of this Section 2.4 shall be entitled to terminate this Agreement
in accordance with Section 4.1(g)(iii); provided, however, that (i) Manager shall be permitted to cure any such breach of this
Section 2.4 (so long as Manager is pursuing such cure with reasonable diligence) unless Owner determines that the REIT status of
NorthStar REIT is, or is at such time reasonably likely to be, impaired by such breach (and accordingly, Owner shall not be permitted
to enforce its termination right unless Owner determines that the REIT status of NorthStar REIT is, or at such time is reasonably
likely to be, impaired by such breach); and (ii) the restriction on Owner’s remedies set forth in this Section 2.4(f) shall
not apply with respect to (A) a breach of Section 2.4(a) or (B) a breach of any other provision of this Section 2.4 which also
constitutes a breach under any provision of Section 4.1(d) (other than clause (ii) thereof).

 

Article
III

OPERATING TERM

 

		3.1	Operating Term. Subject to the termination provisions as hereinafter provided (which shall
also serve as the sole grounds for non-renewal by either party), the “Operating Term” of this Agreement shall commence
on the Effective Date and terminate on the Seventh (7th) anniversary of the Effective Date. Thereafter, the Operating Term shall
be extended automatically for subsequent periods of one (1) year each (“Renewal Term”).

 

    	Schedule J-11

    	 

    

  

Article
IV

TERMINATION

 

		4.1	Termination.

 

		a)	By Either Party. Either party may terminate or elect not to renew this Agreement by written
notice to the other upon the occurrence of any of the following events (and if this Agreement is terminated under this Section
4.1(a), Owner shall not be liable to pay to Manager any fee or penalty):

 

		i)	Bankruptcy. The making by the other party of a general assignment for the benefit of creditors;
the filing by the other party of a voluntary petition in bankruptcy or for relief of debtors; the seeking by such other party of
appointment of a trustee or owner to take possession of substantially all of its assets or the Community; the failure of such other
party to obtain within thirty (30) days the discharge, release or stay of any involuntary petition in bankruptcy or for the reorganization,
appointment of such a trustee or owner or the attachment, execution or other judicial seizure of substantially all such party’s
assets or the Community.

 

		ii)	Condemnation or Destruction.    The permanent taking by lawful condemnation of the Community
or so substantial a portion of the Community as to render operation of the Community not economically viable or the determination
by Owner not to rebuild following the destruction of a substantial portion of the Community.

 

		b)	Termination by Owner Without Cause. Owner shall not be permitted to terminate this Agreement
other than as expressly permitted under this Section 4.1.

 

		c)	Termination by Manager Without Cause.    Manager shall not be permitted to terminate this Agreement
other than as expressly permitted under this Section 4.1.

 

		d)	Manager Breach. The Owner may terminate this Agreement without the payment of any fee or
penalty to Manager upon notice to Manager of the occurrence of any of the following:

 

		i)	a monetary breach by Manager of Manager’s obligations under this Agreement, provided that
Owner shall have notified Manager in writing of such breach and Manager shall not, within five (5) business days after receipt
of such notice, have cured such breach;

 

		ii)	a non-monetary breach by Manager of Manager’s obligations under this Agreement, provided
Owner shall have notified Manager in writing of such breach setting forth the details of such breach, and Manager shall not, within
thirty (30) days after the receipt of such notice, have cured such breach or if such breach cannot reasonably be cured within such
time period, commence the cure of such breach and diligently prosecute the cure of such breach;

 

		iii)	the commission of gross negligence, fraud or willful misconduct by Manager in the performance of
its duties under this Agreement or the intentional or wanton breach or disregard of Manager’s duties and obligations under
this Agreement;

 

    	Schedule J-12

    	 

    

  

		iv)	the conviction of Manager, any Key Principal, any Community Employee or any of Manager’s
other employees or officers of a crime (whether or not a felony) involving fraud, theft, misappropriation of funds or any crime
of moral turpitude and such crime is committed against Owner (or Owner Parent, Watermark Pinebrook, LLC, Watermark Aqua Owner,
LLC, NorthStar Member or an Affiliate of NorthStar Member) or the Community (unless, in the case of the conviction of any Community
Employee or other employee or officer (as applicable) who is not a Key Person, such Community Employee or other employee or officer
shall have been immediately fired);

 

		v)	except as set forth in clause (iv) above, the conviction of Manager, any Key Principal, or any
Community Employee of any felony which constitutes a crime of moral turpitude (unless, in the case of the conviction of any Community
Employee who is not a Key Person, such Community Employee shall have been immediately fired);

 

		vi)	The occurrence of (A) the receipt by Manager or Owner of written notice of any pending or threatened
action by a governmental authority (or other regulatory body) to cancel, revoke or suspend any license the cancellation, revocation
or suspension of which would prevent the operation of the Community or any material part thereof (any such license, a “Material
License”) so long as the underlying facts or circumstances that caused such notice to be delivered, or such action to be
commenced or threatened, are not the direct result of any failure of Owner to comply with its obligations under this Agreement,
and (B) the failure of Manager (1) to promptly commence to cure the underlying circumstances that resulted in receipt of such notice
(including, without limitation, by diligently pursuing a challenge or appeal of any such cancellation, revocation or suspension
of such Material License), (2) to thereafter continuously exercise reasonable diligence to complete such cure, or (3) to complete
such cure on or prior to the deadline imposed by the applicable governmental authority, as the same may be extended with the consent
of the applicable governmental authority or any appeal being pursued in accordance with clause (B)(1) above;

 

		vii)	The occurrence of any cancellation, revocation or suspension of any Material License (any such
cancellation, revocation or suspension, a “Material Licensure Event”) so long as the underlying facts or circumstances
that caused such cancellation, revocation or suspension are not the direct result of any failure of Owner to comply with its obligations
under this Agreement; provided, that the Material Licensure Event shall not constitute a Manager breach hereunder until it becomes
final and non-appealable so long as (1) Manager has a legal right to appeal such Material Licensure Event, (2) Manager timely appeals
the Material Licensure Event, (3) while Manager is contesting such Material Licensure Event, the Community must be continuously
permitted to operate in substantially the

 

    	Schedule J-13

    	 

    

  

manner in which
it was operating prior to such event without any conditions or restrictions that have a material adverse impact on the Community
(other than admissions bans, which are addressed below), and (4) Manager is diligently and continuously pursuing the reinstatement
of the Material License;

 

		viii)	The occurrence of any full or partial ban by a governmental authority (or other regulatory agency)
on new admissions of any residents that, prior to such ban, were permitted at the Community so long as the underlying facts or
circumstances that caused such ban are not the direct result of any failure of Owner to comply with its obligation under this Agreement;
provided, that any such full or partial ban shall not constitute a Manager breach hereunder if Manager promptly commences to pursue,
and thereafter diligently and continuously pursues, the full termination of such ban, and such ban is fully terminated by on or
prior to the ninetieth (90th) day after such ban first commenced and no other full or partial ban of the nature referenced in this
clause (vii) occurs after the date of such full termination and on or prior to such 90th day;

 

		ix)	the occurrence of a Key Person Event other than as a result of the death or Disability of a Key
Person.

 

		e)	Owner Breach. The Manager may terminate this Agreement upon notice to Owner of the occurrence
of the following:

 

		i)	a monetary breach by Owner of Owner’s obligations under this Agreement, provided that Manager
shall have notified Owner in writing of such breach and Owner shall not, within five (5) business days after receipt of such notice,
cure such breach; or,

 

		ii)	a non-monetary breach by Owner of Owner’s obligations under this Agreement, provided Manager
shall have notified Owner in writing of such breach setting forth the details of such breach, and Owner shall not, within thirty
(30) days after the receipt of such notice, cure such breach or if such breach cannot be cured within such time period, commence
the cure of such breach and diligently prosecute the cure of such breach which shall be completed within ninety (90) days after
receipt of such notice.

 

		f)	Mutual Termination. Notwithstanding the foregoing, this Agreement may also be terminated
at any time by the written agreement of Owner and Manager.

 

		g)	Additional Owner Termination Rights. Owner may terminate this Agreement without the payment
of any fee or penalty to Manager upon notice to Manager of the occurrence of any of the following:

 

		i)	the direct or indirect sale or conveyance (voluntary or involuntary) of the Community or of the
interest (direct or indirect) of the TFG Member (or any Affiliate thereof) in Owner or Lessor;

 

    	Schedule J-14

    	 

    

  

		ii)	the occurrence of any other event that allows the NorthStar Member to terminate this Agreement
pursuant to the Owner Parent Operating Agreement;

 

		iii)	a Key Person Event resulting from the death or Disability of a Key Person;

 

		iv)	Manager’s failure to be an Eligible Independent Contractor or to comply with the terms and
provisions set forth in Section 2.4; or

 

		v)	Manager’s failure to use its commercially reasonable best efforts to manage and operate the
Community such that the Community qualifies as a “qualified health care property” as defined in Section 856(e)(6)(D)(i)
of the Code.

 

		h)	Additional Manager Termination Rights. Manager may terminate this Agreement upon notice
to Owner of the occurrence of the removal of TFG Member as the Administrative Member of Owner Parent. Owner shall not have any
obligation to make any payment of any fee or penalty to Manager upon any such termination pursuant to this Section 4.1(h)

 

		i)	Notification of Breach. If Manager has knowledge of any breach of this Agreement by Manager,
Manager shall promptly notify Owner of such breach.

 

		4.2	Rights and Obligations Following Termination. In addition to the rights and remedies otherwise
available to the parties at law or in equity (but subject to the limitations set forth in Section 4.1(b)), the following provisions
shall apply following termination pursuant to this Article IV:

 

		a)	Manager shall quit, vacate, surrender and deliver to Owner peacefully and promptly the Community
and documents and records in its possession pertaining to the Community and the operation thereof, including but not limited to,
all licenses, permits, books, records, accounts, contracts, keys and Working Capital or any funds legally or beneficially belonging
to Owner other than funds due and owing to Manager pursuant to the terms of this Agreement for the period prior to termination;
provided, however, that Manager shall not be required to deliver such documents and records deemed proprietary by Manager (such
as manuals or other materials containing Manager’s trade secrets) or Manager’s separate books and records;

 

		b)	Any funds or other amounts received by Manager with respect to the Community following the termination
of this Agreement shall promptly be delivered to Owner, and Manager shall take all actions necessary to ensure that thereafter
Owner directly receives all such amounts;

 

		c)	Manager shall do all acts and execute and deliver all documents reasonably requested by Owner which
involves no third-party out of pocket cost or expense to Manager (unless Owner agrees to pay any of the same) to insure or facilitate
an orderly continuation of the business of the Community and to accomplish an

 

    	Schedule J-15

    	 

    

 

orderly transfer
of the operation and management of the Community to Owner or to any entity designated by Owner;

 

		d)	The rights and liabilities of the parties having accrued prior to the termination shall continue
(it being acknowledged and agreed that this shall include payment to Manager of all compensation owing to Manager, and payment
by Manager of all amounts owing to Owner, hereunder through the date of such termination);

 

		e)	Manager will turn over possession of the Community to Owner or its designee in a clean, safe and
secure manner, and at Owner’s request and at the Owner’s expense, Manager shall arrange for an independent agency to
conduct an inventory of FF&E, copies of which shall be made available to both Owner and Manager;

 

		f)	As required under applicable law, Owner shall notify the appropriate licensing authorities of the
termination of the Manager, and Manager shall surrender and assign to Owner, to the extent assignable, any and all licenses, permits
and other authorizations required for the operation of the Community in accordance with the directions of the Owner and with applicable
laws, regulations, or orders;

 

		g)	Owner shall, not later than ninety (90) days following termination, cease using the name “Watermark”
or any variation thereof and shall remove all signage using the name “Watermark” or any variation thereof from the
Community at Manager’s expense;

 

		h)	Owner shall, not later ninety (90) days following termination, cease using any forms and documents
or other materials bearing the name “Watermark” or any variation thereof and destroy or turn over possession of such
items; and

 

		i)	This Section 4.2 shall survive the termination of this Agreement.

 

Article
V

SERVICES OF MANAGER 

 

		5.1	Manager’s General Covenants. Manager shall manage and operate the Community, its businesses,
services and sales and shall do so at all times in a manner appropriate for a high quality seniors housing community, consistent
with all applicable legal and regulatory requirements and the approved Operating Plan then in effect. Manager upon its own initiative
with reasonable frequency shall consult with and advise Owner and otherwise bring to Owner’s attention opportunities to (a)
increase or stabilize Community revenues and control or minimize Community expenses and (b) maximize the quality of services to
the residents of the Community. Manager shall promptly notify Owner of any material developments with respect to the Community.
Without limiting the generality of the foregoing and in addition to the obligations of Manager set forth elsewhere herein, Manager
shall perform the duties and provide the services described below.

 

		5.2	Policies and Practices. Manager shall implement administrative, accounting, budgeting, marketing,
personnel and operational policies and practices: (i) to facilitate effective and

 

    	Schedule J-16

    	 

    

  

efficient discharge
of its obligations hereunder; (ii) to create and enhance goodwill among existing and prospective residents and patrons; (iii) to
establish and maintain for the Community a favorable reputation as a high quality seniors housing Community; and (iv) to maintain
the Community in compliance with applicable regulatory requirements.

 

		5.3	Personnel.

 

		a)	Community Employees.    Subject to the terms of this Agreement (including, without limitation,
the approved Operating Plan then in effect, Manager shall select, promote, terminate where appropriate, supervise, direct, train
and assign the duties of all “on-site” personnel that Manager reasonably determines to be necessary or appropriate
for the direct management and operation of the Community (collectively, “Community Employees”). All Community Employees
shall be employed by the Manager or an affiliate of Manager. All persons employed in the management or operation of the Community
(including all Community Employees) shall be employees of Manager or an affiliate of Manager and shall not be employees of Owner
or the Community. All Community Employees duties in connection with their employment shall be exclusively dedicated to the Community
and not to any other senior housing communities or properties managed by Manager without the consent of Owner; provided, however,
that any Community Employee may be “loaned” to (or from) another seniors housing facility managed by Manager without
Owner’s consent for a period not to exceed ten (10) days in any calendar year and in either such case, there will be no adjustment
made to the books of either the lending or receiving community. The primary place of work of all Community Employees shall be the
Community. Except to the extent expressly provided in Section 5.13, any costs and expenses of any employees of Manager who are
not Community Employees working directly at the Community shall not be reimbursable hereunder. Manager shall exercise reasonable
care to select qualified, competent and trustworthy employees. Owner may at any time consult or communicate with Manager regarding
any of the Community Employees, but Owner shall not give orders to or otherwise interfere in the day-to-day activities of Community
Employees. Owner may at any time converse with the Manager’s Executive Director or other employee in charge of the Community
regarding any subject, and Manager shall instruct such personnel to disclose fully to Owner upon Owner’s request all information
regarding the operation of the Community. The Manager shall not discriminate against any employee or applicant for employment because
of race, color, religion, national origin, ancestry, age, sex or sexual orientation, and all employment advertising shall indicate
that the Community is an equal opportunity employer.

 

		b)	Compensation.    Subject to compliance with the approved Operating Plan, Manager shall set
the salaries and benefits of all Community Employees, including but not limited to all bonuses, moving costs and any severance
payable to such Community Employee upon such Community Employee’s termination. Manager shall not permit such compensation
(and the cost of such benefits) to exceed by any substantial amount the compensation (and cost of such benefits) of

 

    	Schedule J-17

    	 

    

  

employees with similar
skills and responsibilities at comparable seniors housing communities in the general employment market unless otherwise agreed
to by Owner. Upon written request of Owner, Manager shall provide to Owner for Owner’s review, a written schedule for the
Community listing all existing or planned Community Employees. These schedules shall include such employee’s title or job
description and salary (or anticipated salary range) and all additional compensation or perquisites such as lodging, meals, maintenance,
moving expenses, bonus/incentive compensation and the like.

 

		c)	Insurance. Except as provided in Section 11.1 hereof and subject to compliance with the
approved Operating Plan then in effect, Manager shall procure and maintain, as Authorized Expenditure, insurance to cover all Community
Employees as required by any applicable laws or any regulatory agency having jurisdiction with respect thereto.

 

		5.4	Community Operations and Maintenance. Manager shall contract or otherwise arrange for the
Community to be furnished with water, electricity, gas, telephone and other utilities, pest control services, trash removal, landscape
maintenance, cleaning, equipment maintenance, security and such other services as are necessary for the efficient operation and
proper maintenance of the Community. Manager shall (i) maintain the Community in good condition and repair generally and (ii) maintain,
repair and replace when necessary the Operating Equipment and the FF&E, all out of funds made available for such purpose by
Owner from the Operating Account in accordance with the approved Operating Plan. Manager will utilize its reasonable best efforts
to keep the Community in a safe, neat, clean and sanitary condition at all times and will remove all garbage and trash from the
grounds, sidewalks, adjoining driveways, parking areas and other public spaces within a reasonable time frame.

 

		5.5	Advertising, Promotion and Sales. Subject to compliance with the approved Operating Plan
then in effect, Manager will plan, prepare and contract for advertising and promotions for the Community designed to publicize
the Community and attract residents in accordance with the standards set by other high quality seniors housing communities. To
this end, Manager shall arrange and make contracts for such advertising and promotion, as it may deem advisable from time to time
for the successful operation of the Community, and in all cases in accordance with the Operating Plan. In performance of its obligations
under this Agreement Manager will comply with the provisions of all federal, state and local laws, including those prohibiting
discrimination in housing. Manager may either (i) use graphic design services from its in house agency and charge such graphic
design fees back to the Community with respect to any advertising, promoting or marketing materials budgeted for in the approved
Operating Plan then in effect, and Manager will ensure that such charges, if any, will be at or below market rates for similar
services and will be with respect to work done specifically for the Community (and not any other senior housing communities or
properties managed by the Manager) or (ii) use outside graphic design services for such materials, and in such cases will charge
these services back to the Community.

 

    	Schedule J-18

    	 

    

  

		5.6	Emergencies. In the event that any circumstance shall occur that Manager reasonably and
in good faith judges to be an Emergency, then Manager shall take such action and cause such things to be done as Manager reasonably
and in good faith believes necessary (including the expenditure of funds in excess of those approved in the Operating Plan). Manager
shall inform Owner of any and all Emergencies and expenditures with respect thereto as soon as practical

 

		5.7	Contracting. Manager shall be authorized to negotiate and execute, on behalf of Owner and
without Owner’s prior approval; (a) non-resident leases to the extent that such leases (i) are terminable without penalty
on notice to the counterparty of ninety (90) days or less, (ii) require a use of the applicable space that is complimentary to
a senior housing facility and (iii) provide for arms-length rent and are otherwise on market terms, (b) resident agreements which
are in compliance with the approved Operating Plan and (c) contracts which are in compliance with the approved Operating Plan and
terminable without penalty on notice to the counterparty of sixty (60) days or less. With respect to all contracts negotiated by
Manager for the Community, Manager shall use its reasonable best efforts to secure for Owner all possible rebates, discounts and
other benefits to be derived from each contract Manager negotiates with respect to the Community. Any rebate, discount or other
benefit derived under any such contract shall accrue to the benefit of the Community (and not to the Manager or any other senior
living community or property managed by Manager).

 

		5.8	Loan and Contract Compliance. Manager shall use commercially reasonable efforts to cause
the operation of the Community to comply with all terms, conditions and obligations contained in the Loan, any lease (including,
without limitation, resident leases), and any other agreements of which Manager is made aware and provided a complete copy that
are executed by Owner and relate to the Community, and Manager shall execute and deliver promptly any agreements and documents
which Owner or Lender may reasonably request to provide for or verify operation of the Community in such manner. Owner agrees to
provide Manager with copies of all documents evidencing any Loan (and for this purpose, Manager shall be deemed to have a copy
of any such documents of which the TFG Member has a copy).

 

		5.9	Licensure. Manager shall obtain and use its commercially reasonable best efforts to keep
in full force and effect all permits, licenses and authorizations required for the conduct of the business of the Community. Permits,
licenses and authorization shall be in Owner’s name to the extent allowed by the applicable licensing authorities. Owner
shall cooperate fully with Manager in its efforts to make applications for such licenses and permits. Manager shall advise Owner
of its obligation with respect to all rules, regulations and requirements related to state licensure of the Community and of the
steps to be taken so that the Community is at all times in compliance and in good standing with the applicable licensing authorities.
Manager is authorized to and shall take such action and expend such funds to the extent provided by Owner as are necessary to cause
the Community to comply in all respects to state licensure requirements. Any such expenditure shall be considered an Authorized
Expenditure. Manager shall (i) promptly notify Owner of any material compliance issues with respect to any permits, licenses and
authorizations held by the Community or required for the conduct of the business of the

 

    	Schedule J-19

    	 

    

  

Community (including,
without limitation, receipt of any notices from governmental authorities or other applicable regulatory bodies relating to any
such material compliance issues) and (ii) provide Owner with weekly status updates regarding any uncured compliance issues under
Sections 4.1(d)(vi), (vii) or (viii) during the pendency of any related cure periods.

 

		5.10	Compliance with Government Rules and Regulations.    Manager shall conduct the business of
the Community in compliance with all applicable laws and regulations in and ensure that no activity or condition occurs on or about
the Community in violation of any such laws or regulations. In the event that Manager shall have reason to believe that any laws
or regulations may be violated on or about the Community, the Manager shall promptly so notify Owner. Manager shall use reasonable
efforts to comply with environmental laws, shall not negligently permit the discharge of hazardous or toxic substance and shall
report any problem to Owner immediately. Upon notice and written approval of Owner, Manager will retain the appropriate consultants
to determine and make recommendations to remedy the situation and the costs and expenses associated therewith shall be an Authorized
Expenditure.

 

		5.11	Credit and Pricing Policies; Billing and Collection Practices.

 

		a)	Pricing Policies.    Manager will propose in connection with the Operating Plan the rate and
price schedules for all rooms, products and services provided at the Community.

 

		b)	Billing and Collection Practices.    Manager shall establish and administer systems for the
timely issuance of bills, including claims for reimbursement from governmental and other third-party payors as applicable, for
all rooms, products and services provided at the Community and for which Owner is entitled to be paid. Manager shall employ its
best efforts to collect any and all rents, charges, reimbursement and accounts receivable owed to Owner with respect to the Community.
Subject to the provisions of Section 5.12, Manager may employ, as an Authorized Expenditure to the extent set forth in the Operating
Plan, collection agencies and legal counsel where appropriate to pursue such claims on behalf of Owner, in each case in accordance
with applicable law. All accounting, billing and collection policies of the Community (including with respect to the write-off
of any amounts owed) shall be subject to the prior written approval of the Owner.

 

		c)	Fees and Rates.    Manager may establish or modify the entry fees, monthly rates, and discounts/concessions
to residents in accordance the Operating Plan.

 

		d)	Admission and Discharge Policies.    Manager shall establish or modify resident admission and
discharge policies, and any other policies relating to the health, welfare and safety of residents in accordance with its usual
policies and practices.

 

		e)	Third Party Payors.    Manager shall establish or modify policies and practices related to
third-party payors including, without limitation, Medicare and Medicaid in accordance with its usual policies and practices.

 

    	Schedule J-20

    	 

    

  

		f)	Licenses.    Manager may terminate, amend or change any license necessary to operate any Property
as a retirement community to the extent reasonably necessary to continue to operate the Community.

 

		5.12	Litigation. Manager, as an Authorized Expenditure (subject to compliance with the approved
Operating Plan then in effect), shall institute any necessary or desirable legal actions or proceedings to collect charges or other
income of the Community or to evict or dispossess nonpaying or legally undesirable persons in possession, or exercise right to
cancel or terminate or sue for damages under any agreement relating to the operation of the Community, other than this Agreement.
No such action or proceeding shall be instituted without Owner’s prior approval, and Manager shall only use counsel approved
by Owner and shall direct counsel to supply Owner with a copy of all pleadings relating to such litigation. With respect to all
actions brought by Manager concerning the Community, Manager shall be permitted to charge all necessary and appropriate filing
and legal fees and expenses as an Authorized Expenditure (subject to compliance with the approved Operating Plan then in effect).

 

		5.13	Home Office Activities.    Manager shall employ the resources of its home office and personnel
to supervise and assist the operation of the Community. Manager shall cause appropriate officers and employees of Manager or an
affiliate of Manager to visit and inspect (either personally or via video conference) the Community and the operation thereof with
reasonable frequency. Neither the Community nor the Owner shall be obligated to reimburse Manager for the expenses or overhead
associated with Manager’s home office or home office personnel assisting at the Community, the costs for which are included
in the fees paid hereunder, except that Owner agrees to pay or reimburse Manager for the following costs and expenses to the extent
that such costs and expenses are in compliance with the approved Operating Plan then in effect (collectively, “Home Office
Reimbursables”): (i) Manager’s reasonable travel costs and related expenses as required and outlined in the approved
Operating Plan then in effect and subject to the limitations set forth on Schedule B, and such additional reasonable travel
and related expenses, if any, as may be approved in advance by Owner; (ii) costs incurred with respect to Manager’s home
office employees, affiliates or contractors who, on an interim basis, assume the duties of a Community Employee and are exclusively
dedicated to the Community (and not to any other senior housing communities or properties managed my Manager) for a period of ten
(10) or more days in any given thirty (30) day period, where costs will be reimbursed at the budgeted expense of the appropriate
Community Employee position (inclusive of, without limitation, the allocable cost of benefits); (iii) costs incurred by Manager
for services outlined in Schedule B, which services will be charged at Manager’s then-current fee structure as outlined
in Schedule B and (iv) the portion of any of Manager’s national contracts (to the extent such contracts relate to
goods or services for, among other communities, the Community) which is allocable to the Community; provided that as part of the
annual budget approval process, Manager shall provide Owner with a schedule of national contracts, vendor and services provided
and allocation methodology used to bill the communities and such charges, to the extent approved for inclusion in the Operating
Plan, will also be included in the Operating Plan.

 

    	Schedule J-21

    	 

    

  

		5.14	Limitation Upon Obligations.    In the event that performance of any of Manager’s obligations
under this Agreement require expenditure of Owner’s funds or Owner’s assistance or cooperation hereunder shall be impeded
by reason of unavailability of such funds or lack of Owner’s assistance or cooperation, then Manager’s performance
of such obligations shall be excused to the extent so impeded and until such funds become available or until Owner’s assistance
or cooperation is obtained. Manager’s obligations also shall be excused to the extent performance would be contrary to instructions
of Owner.

 

		5.15	Taxes and Assessments.    Manager shall obtain bills for real estate and personal property
taxes, improvement assessments and other like charges that are, or may become liens against the Community, recommend to Owner payment
thereof or appeal therefrom and, unless specifically instructed by Owner to withhold any payment (or such amounts are impounded
and paid by Lender), shall make payments with respect thereto, which shall be an Authorized Expenditure. Manager shall review and
submit all real estate and personal property taxes and all assessments affecting the Community to Owner and shall file all personal
property tax returns with respect to the Community.

 

		5.16	Inventories and Supplies.    Manager shall purchase such Consumable Supplies and other expendable
items as are necessary to operate the Community and shall pay for such supplies out of the Operating Account in accordance with
the Operating Plan. When taking bids or issuing purchase orders, Manager shall use commercially reasonable efforts to secure for
and credit to Owner any discounts, commissions or rebates obtainable as a result of such purchase. Manager shall utilize a reasonable
competitive bidding process with respect to any contracts or orders that are reasonably likely to result in the aggregate amount
payable with respect thereto exceeding $15,000 in any one (1) year period.

 

		5.17	Liens.    Manager shall use its best efforts to prevent any liens from being filed against
the Community which arise from any maintenance, changes, repairs, alterations, improvements, renewals or replacements in or to
the Community and shall (i) to the extent required under any Loan, obtain or (ii) with respect to the provision of goods or services
to the Community in excess of $25,000, upon written request from Owner, use commercially reasonable efforts to obtain, lien waivers
from any person providing goods or services to the Community. The costs and expenses associated therewith shall be an Authorized
Expenditure.

 

		5.18	Related-Party Transactions.    Manager shall not engage or enter into a contract with any entity
that is an affiliate of Manager to provide services with respect to the Community unless (i) the nature of such affiliation is
disclosed in writing to Owner in advance, (ii) Manager receives Owner’s prior written consent to each specific contract or
agreement, and (iii) the compensation paid for the services shall be competitive with the compensation paid to nonaffiliated entities
furnishing the same or similar services.

 

		5.19	HIPAA Business Associate Obligations.    The parties acknowledge and agree that, with respect
to certain services furnished at the Community, Owner is subject to the requirements of the Health Insurance Portability and Accountability
Act of 1996 and its

 

    	Schedule J-22

    	 

    

  

implementing regulations
(“HIPAA”), including the privacy regulations at 45 C.F.R. Parts 160 and 164, as amended (the “Federal Privacy
Regulations”) and the security regulations at 45 C.F.R. Parts 160, 162 and 164, as amended (the “Federal Security Regulations”),
and, as a result, Owner is obligated to obtain from Manager contractual assurances concerning the privacy and security of Protected
Health Information (as that term is defined in the Federal Privacy Regulations) (“PHI”) used or disclosed in connection
with the provision of services under this Agreement. In order that Owner can comply with the requirements of HIPAA and any applicable
state privacy laws, Manager agrees to comply with the requirements set forth in Schedule A to this Agreement.

 

Article
VI

OPERATING ACCOUNTS, PAYMENTS
AND DISTRIBUTIONS

 

		6.1	Bank Accounts.    Manager shall open an Operating Account that may be drawn upon by authorized
signatories of the Manager, subject to the limitations set forth in this Section. Owner shall deposit in the Operating Account
monthly the amount specified in the Operating Plan. Owner and Manager shall deposit or cause to be deposited into the Operating
Account all Gross Revenues received with respect to the operation of the Community. Manager shall be authorized to withdraw funds
from the Operating Account during the term hereof on its signature alone for any purpose authorized hereunder; provided, that Manager
shall not have any right to withdraw or deduct any funds from the Operating Account or any other account of Owner to pay any fees,
compensation, costs or expenses of Manager other than the Management Fee and those amounts constituting Authorized Expenditures.
So long as Manager’s President or such other individuals appointed by Manager and approved by Owner are reasonably available
to sign the checks, then Manager’s President and such appointees shall be the Manager’s primary signatories on the
Operating Account in addition to Owner’s representative, as requested. In addition to the monthly deposits, specific amounts
budgeted in the Operating Plan shall be transferred to the Operating Account for payment of expenses.

 

		6.2	Payments of Costs and Expenses; Authorized Expenditures.    Manager shall be permitted to expend
such funds from the Operating Account and shall be entitled to reimbursement for expenses or payments, only to the extent the same
constitute Authorized Expenditures hereunder, and Owner agrees to reimburse Manager for the expenditure by Manager of any and all
Authorized Expenditures. For purposes of this Agreement, Authorized Expenditures shall include but be limited to expenditures which:
(i) are provided for in the approved Operating Plan then in effect or an amendment thereto or otherwise permitted to be expended
in accordance with Section 7.2; (ii) are specifically approved in advance by Owner for such purpose in writing; (iii) are specifically
authorized herein as an Authorized Expenditure pursuant to Section 5.9, 5.10 or 5.17; or (iv) are otherwise expressly authorized
or permitted hereunder. Manager shall endeavor to pay Authorized Expenditures before any penalty or interest accrues thereon, while
taking into account sound cash management. Manager will use sound internal control procedures in the handling of Owner’s
assets.

 

		6.3	Other Expenses. Except to the extent that such costs and expenses may be approved for payment
by Owner in writing apart from this Agreement, the following costs and

 

    	Schedule J-23

    	 

    

  

expenses shall
be borne solely by Manager, shall be paid by Manager prior to delinquency and shall not be paid from the Operating Account or otherwise
reimbursed by Owner hereunder: (a) costs of gross salary and wages, bonuses, payroll taxes, insurance, worker’s compensation
and other benefits of employees of Manager (other than Community Employees), except for costs reimbursed in accordance with Section
5.13; (b) overhead expenses of Manager incurred in its home office or otherwise apart from the Community, unless approved in the
Operating Plan; (c) any expenditures of Manager that do not constitute Authorized Expenditures; and (d) other items as provided
for herein.

 

		6.4	Working Capital.    Owner shall provide the Community with the amount of “Working Capital”
per annum as is set forth in the approved Operating Plan from time to time, which is the amount of funds that Owner and Manager
have reasonably determined is reasonably necessary for the day-to-day operation of the Community, including, without limitation,
amounts sufficient for the maintenance of petty cash funds, operating bank accounts, receivables, payrolls, prepaid expenses and
funds required to maintain inventories, less accounts payable and accrued current liabilities. From time to time thereafter, subject
to Manager’s withdrawal and use of Working Capital solely to pay Authorized Expenditures (including, to the extent permitted
under Section 7.2, Authorized Expenditures which are not expressly contemplated in the Operating Plan), Owner shall deposit in
the Operating Account, upon the reasonable request of Manager together with reasonably detailed supporting documentation, such
additional funds as are necessary to maintain the necessary amount of Working Capital for the Community.

 

		6.5	Manager Not Required to Advance Funds.    In the event the balance in the Operating Account
is any time insufficient to pay disbursements due and payable, including Resident Refunds, under this Agreement, and provided that
such insufficiency is not the result of Manager’s use of funds from the Operating Account for purposes not permitted under
this Agreement, Owner shall, promptly upon notice from Manager together with reasonably detailed supporting documentation, deposit
into the Operating Account sufficient funds to cover the deficiency.

 

		6.6	Resident Funds.    Manager shall properly manage and account for any deposits, funds or fees
paid by residents of the Community to Manager, including, but not limited to, security deposits, damage deposits, entry fees paid
by residents for the use and occupancy of the Community, and funds held by Manager on behalf of residents of the Community for
their current personal use or safekeeping. Manager shall comply with applicable laws, rules and regulations regarding the handling
of all such security deposits, damage deposits and entry fees paid by residents.

 

Article
VII

OPERATING PLAN

 

		7.1	Operating Plan.    The annual operating plan for the Community (the “Operating Plan”),
for the remainder of the 2013 Fiscal Year and the 2014 Fiscal Year is attached hereto as Schedule F, which has been approved
by the Owner. For each subsequent Fiscal Year after the 2014 Fiscal Year, by November 1 of the immediately preceding Fiscal Year,

 

    	Schedule J-24

    	 

    

  

Manager shall prepare
and present to Owner an Operating Plan, in the form attached hereto as Schedule G, which shall include for the Fiscal Year
to which it relates the following proposed budgets and programs:

 

		a)	A proposed revenue and expense statement (the “Operating Budget”) on a monthly and
yearly basis with reasonably detailed schedules for Gross Revenues and Operating Expenses;

 

		b)	A proposed cash flow statement (“Cash Flow Budget”) showing in reasonable detail the
projection of current assets and liabilities for such period;

 

		c)	A proposed budget (“Capital Expenditures Budget”) with respect to the Community setting
forth in reasonable detail Manager’s best estimate of capital expenditures to be made for major building improvements, renovation,
repairs and expansion for such period as well as replacement of and additions to Furniture, Furnishings and Equipment and Operating
Equipment for such period;

 

		d)	A proposed marketing plan (“Marketing Plan”) to include, but not be limited to, a detailed
program for advertising and promotion, a detailed program for sales strategies and a competitive property analysis for such period;

 

		e)	A proposed schedule of salaries and benefits for Community Employees for such period as provided
for in Section 5.3(b); and

 

		f)	A financial analysis for any new programs to be established or any recommendations to close existing
programs during such period.

 

		7.2	Compliance with Operating Plan.     Manager shall be permitted to incur or expend any Operating
Expenses on behalf of the Company unless such incurrence or expenditure would: (i) cause the aggregate expenditures for the accounting
category which includes the applicable line item(s) (on a year to date basis) to be exceeded by ten percent (10%) or more of the
budgeted amount therefor or (ii) cause the aggregate operating expenditures or capital expenditures (as applicable) set
forth in the Operating Plan to be exceeded by five percent (5%) or more of the budgeted amount therefor (and, accordingly, any
operating or capital expenditure that is within (i.e., less than) the maximum permitted variances set forth in both clause (i)
and clause (ii) shall be deemed to be Authorized Expenditures and “in compliance with the Operating Plan” or satisfy
words of similar import); provided, that (A) Manager may, on behalf of the Company, incur Non-Discretionary Expenses without
regard to any such limitations and the expenditure of such Non-Discretionary Expenses shall Authorized Expenditures, (B) Manager
shall be permitted to reasonably reallocate any realized cost savings with respect to any line item to any other line item within
the Operating Plan so long as there are demonstrated actual savings in the line item from which amounts are being reallocated and
such reallocation does not violate the terms of any Loan and (C) Manager shall give notice to Owner of the nature and amount of
any such reallocation or Non-Discretionary Expenses promptly following the occurrence or incurrence thereof.

 

    	Schedule J-25

    	 

    

  

		7.3	Approval by Owner.    If any of the above elements of the proposed Operating Plan are disapproved
by Owner, the Manager and Owner shall enter into discussions in an attempt to agree upon a mutually satisfactory Operating Plan.
Owner shall make the final determination with respect to the Operating Plan. No proposed Operating Plan shall become approved unless
approved in writing by Owner. For the purposes of this Agreement, email communications, the receipt of which is confirmed by the
recipient by return email shall be deemed in writing.

 

Article
VIII

ACCOUNTING

 

		8.1	Books and Records.    Manager shall establish and operate accounting and internal audit control
systems reasonably acceptable to Owner and, in connection with the foregoing, complete proper, current and accurate records and
books of account reflecting all transactions of the Community and of Manager with respect to the Community. Such books and records
shall be prepared on an accrual basis in accordance with GAAP, consistently applied within each Accounting Period and from year
to year, and consistent with applicable requirements of the Loan. Manager shall make such books and records available during normal
business hours and at all other reasonable hours at the Community for inspection, copying and audit with or without notice by Owner
or its agent. Any books and records relating to the Community maintained at Manager’s home office shall be made available,
either at the Community, or electronically (at Manager’s election) upon ten (10) business days’ notice from Owner.

 

		8.2	Financial and Operating Statements.    Commencing in the Accounting Period following the Effective
Date and continuing thereafter as to each Accounting Period of the Operating Term, Manager shall cause Community Employees to prepare
and deliver to Owner (i) the financial statements required pursuant to Schedule J hereto, (ii) any financial reports required by
governmental agencies in connection with any license at the Community and (iii) any financial reports required to be delivered
to a Lender.

 

		8.3	Other Reports.    Upon request by Owner, Manager shall promptly prepare or cause to be prepared
such other reports and information constituting matters of interest to Owner. Upon Owner’s request from time to time, the
Manager, Executive Director and Owner (or its agents) shall meet and discuss the operations of the Community.

 

		8.4	Annual Audit.     Owner may cause an audit of the books, records and operations of the Community
to be made by an independent certified accounting firm, as and when required by the Loan documents. Manager shall cooperate fully
with such auditors and shall make available to them promptly any and all requested information concerning the Community. The cost
of any such independent audit, including a coordination fee as outlined in the Operating Plan paid to the Manager, shall be an
administrative and general expense of the Community for the succeeding Fiscal Year, provided that such cost shall be an expense
of the subject year in the event that such year is the last year of the Operating Term. In the event an audit determines weaknesses
or a need for reasonable changes in the internal control system pertaining to the safeguarding of Owner’s assets,

 

    	Schedule J-26

    	 

    

  

Manager will make
all necessary changes. The independent certified accounting firm shall be selected by Owner.

 

		8.5	Tax Statements. Owner shall cause the filing of all Owner and Community tax returns with
the applicable government authorities within allowable time periods, including extensions. Manager shall cooperate fully and shall
make available promptly any and all requested information concerning the Community.

 

		8.6	Survival Following End of Operating Term.    Owner’s and Manager’s obligations
under this Article VIII shall continue as to an Accounting Period occurring within the term hereof notwithstanding that such performance
may be due following the end of the Operating Term.

 

Article
IX

CAPITAL IMPROVEMENTS

 

		9.1	Supervision of Capital Improvements.    If capital improvements to the Community are needed
and funding is available, Manager agrees, if requested, to assist Manager personnel in the supervision of the construction of such
improvements without additional compensation beyond the Management Fee for any such improvement (or group of related improvements)
for which the aggregate expenditures are $100,000 or less in any Fiscal Year. For any improvements for which the aggregate expenditures
are greater than $100,000 in any Fiscal Year, if there is no third-party project manager being paid a fee with respect to such
capital improvements, Manager shall be paid for its services in supervising the construction of such improvements at rates outlined
in Schedule B and the Capital Expenditures Budget. No capital improvements to the Community shall commence without Owner’s
prior written approval.

 

		9.2	Expenditures for Capital Improvements.    Notwithstanding the foregoing, provided sufficient
funds have been made available to Manager, Manager shall make such capital improvements and replacements or renewals of or additions
to the Furniture, Furnishing and Equipment in accordance with the approved Operating Plan then in effect or as otherwise may be
agreed to by Owner in writing. The funds needed for any expenditures with respect to capital improvements shall not be drawn from
the Operating Account and shall be separately made available to Manager, unless otherwise agreed by Owner.

 

Article
X

ASSIGNMENT

 

		10.1	Assignment by Manager.    This Agreement, or any rights and duties expressed herein, may not
be assigned or transferred by Manager without the prior written consent of Owner, which consent may be granted or withheld in Owner’s
sole discretion; provided, however, that (i) Manager may, as part of an assignment of all or substantially all of the communities
managed by Manager, assign this Agreement directly or indirectly to an entity Controlled on a day to day basis by David Barnes
and/or David Freshwater that qualifies as an Eligible Independent Contractor and (ii) Manager may, with the consent of Owner (not
to be unreasonably withheld, conditioned or delayed), as part of an

  

    	Schedule J-27

    	 

    

  

assignment of communities
constituting a significant portion but less than all or substantially all of the communities managed by Manager, assign this Agreement
directly or indirectly to an entity Controlled on a day to day basis by David Barnes and/or David Freshwater that qualifies as
an Eligible Independent Contractor.

 

		10.2	Assignment by Owner.    This Agreement, or any rights and duties expressed herein, may be assigned
or transferred by Owner at any time.

 

Article
XI

INSURANCE 

 

		11.1	Unless Owner undertakes to provide such insurance, Manager shall, commencing on the Effective Date
and during the term of this Agreement, procure and maintain, using funds in the Operating Account, with insurance companies reasonably
acceptable to Owner, the insurance set forth on Schedule H or such greater coverage as is required under a Loan.

 

		11.2	Operational Insurance. Manager shall, commencing on the Effective Date and during the term
of this Agreement, procure and maintain, using funds in the Operating Account, the following insurance:

 

		a)	Worker’s compensation and employer’s liability insurance as may be required under applicable
laws covering all of the Community Employees with such deductible limits or self-insured retentions as determined by Owner;

 

		b)	Crime/fidelity bonds with limits not less than $1,000,000 and deductibles to be determined by Manager,
covering its Community Employees in job classifications normally bonded in the seniors housing industry or as otherwise required
by law, and comprehensive crime insurance to the extent Manager determines it is necessary for the Community; and

 

		c)	Such other insurance and/or additional coverage in amounts as Owner in its reasonable judgment
deems advisable for its protection against claims, liabilities and losses arising out of or connected with Manager’s performance
under this Agreement.

 

		11.3	Cost and Expense.    Insurance premiums and any costs or expenses with respect to the insurance
described in this Article XI and Schedule H (including, without limitation, insurance for claims asserted by Community Employees
against Manager for Manager’s employment practices or actions) shall be treated as Authorized Expenditures to the extent
in accordance with Section 6.2. Premiums on policies for more than one (1) year shall be charged pro rata against Gross Revenues
over the period of the policies. Any reserves, losses, costs, damages or expenses which are uninsured, or fall within deductible
limits or self-insured retentions, shall be treated as a cost of insurance and shall be Authorized Expenditures. Upon termination
of this Agreement, an escrow fund in an amount reasonably acceptable to Owner and Manager shall be established from Gross Revenues
(or, if Gross Revenues are not sufficient, with funds provided by Owner) to cover the amount of any deductible limits or self-insured
retentions which will

 

    	Schedule J-28

    	 

    

  

eventually have
to be paid by either Owner or Manager, as applicable, with respect to pending claims.

 

		11.4	Policies and Endorsements.

 

		a)	All policies of insurance provided under Section 11.1 shall name Manager and Owner and Lessor and
their respective members and principals as insured, and shall name the parties set forth on Schedule I as additional insured
parties. In addition, Lender shall be named as mortgagee, loss payee and an additional insured party, as applicable. The Owner
shall deliver to Manager and Manager shall deliver to Owner certificates of insurance with respect to all policies so procured,
including existing, additional and renewal policies and, in the case of insurance about to expire, shall deliver certificates of
insurance with respect to the renewal policies not less than ten (10) days prior to the respective dates of expiration.

 

		b)	All policies of insurance provided for under Article XI shall, to the extent obtainable, have attached
thereto an endorsement that such policy shall not be canceled (except for non-payment of premium) or materially changed without
at least thirty (30) days prior written notice to Owner and Manager (and such policy shall not be cancelled without at least ten
(10) days prior written notice).

 

		c)	Policies must be written on a per occurrence basis except for earthquake and professional liability
coverage.

 

		d)	Coverage must be issued by an insurance carrier with an A.M. Best general policyholder’s
rating of “A” or better and a performance index rating of X or higher.

 

		e)	All policies and renewals thereof, are to be written for not less than one year.

 

		f)	All existing or new policies must be paid in full and cannot be financed unless approved in advance
by Owner.

 

		11.5	Tail Insurance. Manager shall procure and maintain, using funds deducted from Gross Revenues,
with insurance companies reasonably acceptable to Owner, tail insurance with a policy term of at least two (2) years for any insurance
policy maintained by the Manager or Owner on so-called “claims made” basis in the occurrence of the following events:

 

		a)	Upon any change in liability insurance from a so-called “claims-made” basis to a so-called
“occurrence” basis. A “prior acts endorsement” may be procured in lieu of the tail insurance referenced
above.

 

		b)	Upon termination of this Agreement or the date of closing of a sale or other disposition of the
Community to any person or entity other than an affiliate of the Owner.

 

    	Schedule J-29

    	 

    

  

Article
XII

GENERAL PROVISIONS

 

		12.1	Inspection of Community.    Owner and its agents, employees and designees may go anywhere in
the Community for the purpose of i) inspecting the Community; ii) inspecting the performance by Manager of the terms and conditions
hereof, or iii) showing the Community to prospective purchasers, lessees or mortgagees. Manager shall upon request facilitate access
permitted under this Section 12.1.

 

		12.2	Attorney’s Fees.    Should either party commence any action against the other to enforce
any obligations hereunder, the prevailing party shall be entitled to recover from the other its reasonable attorneys’ fees
and costs.

 

		12.3	Confidentiality.    In connection with services furnished pursuant to this Agreement, Manager
may receive access to certain financial, operating and other information regarding the Community’s and Owner’s business,
agreements, commitments, liabilities, personnel and property. Manager shall hold all such information in strict confidence.

 

		12.4	Amendments.    The terms, covenants, conditions and provisions of this Agreement may not be
modified or revised, except in writing signed by both of the parties hereto.

 

		12.5	Time.    Time is of the essence hereof.

 

		12.6	Notices. All notices provided for in this Agreement shall be in writing and emailed, faxed
or mailed by registered or certified mail, postage prepaid or by express mail, to the following addresses until such time as written
notice of change of address is given the other party.

 

	 	OPERATOR:	Watermark Retirement Communities, Inc.
	 	ATTN:	David Barnes
	 	 	2020 West Rudasill Road
	 	 	Tucson, AZ  85704
	 	 	contracts@watermarkcommunities.com
	 	 	 
	 	and a copy to:	 
	 	ATTN:	Cox, Castle & Nicholson LLP
	 	 	Kevin Kinigstein, Esq.
	 	 	2049 Century Park East, 28th Floor
	 	 	Los Angeles, CA 90067
	 	 	kkinigstein@coxcastle.com

 

	 	OWNER:	Watermark Pinebrook, LLC
	 	ATTN:	Doug Bath
	 	 	c/o NorthStar Realty Healthcare
	 	 	2 Bethesda Metro Center, Suite 1300
	 	 	Bethesda, Maryland 20814
	 	 	dbath@nrfc.com

 

    	Schedule J-30

    	 

    

  

	 	and a copy to:	 
	 	ATTN:	Ronald J. Lieberman
	 	 	NorthStar Realty Finance
	 	 	399 Park Avenue
	 	 	New York, New York 10022
	 	 	rlieberman@nrfc.com
	 	 	 
	 	and a copy to:	Fried, Frank, Harris, Shriver & Jacobson LLP
	 	ATTN:	Harry R. Silvera, Esq.
	 	 	One New York Plaza
	 	 	New York, New York 10004
	 	 	harry.silvera@friedfrank.com

 

		12.7	Entire Agreement.   This Agreement is the entire agreement between the parties with respect
to the subject matter hereof and no modification or interpretation hereof shall be binding unless in writing and signed by both
of the parties hereto.

 

		12.8	Severability.    If any provision of this Agreement or the application thereof to any person
or circumstances shall be invalid or unenforceable to any extent, and such invalidity or unenforceability does not destroy the
basis of the bargain between the parties, then the remainder of this Agreement and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

		12.9	Applicable Law.   This Agreement shall be construed and enforced in accordance with the laws
of the State of New York.

 

		12.10	Use.    Manager shall manage and operate the Community solely as a seniors housing community
under standards comparable to those prevailing in the seniors housing industry and for activities in connection therewith that
are customary and usual to such an operation.

 

		12.11	Waiver.   The failure of either party to insist upon a strict performance of any of the terms
or provisions of this Agreement or to exercise any option, right or remedy herein contained shall not be construed as a waiver
or as a relinquishment for the future of such term, provision, option, right or remedy, but the same shall continue and remain
in full force and effect. No waiver by either party of any term or provision hereof shall be deemed to have been made unless expressed
in writing and signed by such party.

 

		12.12	Failure to Perform. If Manager or Owner shall at any time fail to make any payments as specified
or required hereunder or shall fail to perform any other act on its part to be made or performed hereunder, without limitation,
then the other party, after ten (10) business days written notice to the defaulting party, may (but shall not be obligated to)
pay any such delinquent amount or perform any other act on the defaulting party’s part to be made or performed as provided
in this Agreement and may enter upon the Community premises for said purpose and take all such action thereon as may be necessary
or desirable therefor. Any sums thus paid and all performance of any such acts, together

 

    	Schedule J-31

    	 

    

  

with interest thereon
at the fixed rate of eight percent (8%) per annum (the “Default Rate”) from the date that such payment is made or such
costs and expenses incurred, shall constitute a liquidated amount to be paid by the defaulting party under this Agreement to the
other on demand from the defaulting party’s funds.

 

		12.13	Breach of Covenant.    Subject to the terms, conditions and limitations set forth in this Agreement,
Owner and Manager and/or their affiliates shall be entitled, in case of any breach of this Agreement by the other party or other
claiming through it, to seek injunctive relief and any other right or remedy available at law or in equity. The rights of Owner
and Manager pursuant to this Section 12.13 shall survive termination of this Agreement.

 

		12.14	Headings.    Headings or Articles and Sections are inserted only for convenience and are in
no way to be construed as a limitation on the scope of the particular Articles or Sections to which they refer.

 

		12.15	Force Majeure.    In the event that either party should be prevented from performing any of
its duties hereunder by operation of Force Majeure, or other cause beyond the party’s reasonable control, then while so prevented,
the affected party’s duties to comply with such obligations shall be suspended. The term “Force Majeure” shall
mean forces of nature, acts of God, strikes, lockouts, accidents to building or machinery, explosions or other causes not within
the reasonable control of the affected party. For avoidance of doubt, the failure of Owner to provide Working Capital required
under Section 6.4 shall be deemed an event of Force Majeure with respect to the performance of specific obligations by Manager
that are affected by the level of Working Capital.

 

		12.16	Execution.    Each individual signing this Agreement warrants that such execution has been
duly authorized by the party for which he/she is signing. The execution and performance of this Agreement by each party has been
duly authorized by all necessary corporate action, and this Agreement constitutes the valid and enforceable obligation of each
party in accordance with its terms. Electronic or faxed signatures shall be considered binding.

 

		12.17	Counterparts.    This Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which shall constitute one agreement.

 

[Signatures on following page]

 

    	Schedule J-32

    	 

    

  

IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed as of the day and year first above written.

 

	OPERATOR:	WATERMARK RETIREMENT COMMUNITIES, INC. 
	 	 
	 	 	  /s/ David Barnes
	 	By:	David Barnes
	 	Its:	President
	 	 	 
	OWNER:	WATERMARK PINEBROOK, LLC
	 	 	 
	 	 	  /s/ Douglas W. Bath
	 	By:	Douglas Bath
	 	Its:	Authorized Signatory

 

    	Schedule J-33

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