Document:

Exhibit 10.18

 

 

COMMERCIAL LOAN AGREEMENT

 

THIS
COMMERCIAL LOAN AGREEMENT dated as of June 3, 2013, between WEBSTER BANK, NATIONAL ASSOCIATION (herein called “Bank”)
a national association having an office at 145 Bank Street, Waterbury, Connecticut and NRFC CLINTON HOLDINGS, LLC (herein
called “Borrower”), a Delaware limited liability company, having its chief executive offices and principal places
of business at NorthStar Realty Finance, 399 Park Avenue, 18th Floor, New
York, New York 10022, Attn: Ronald J. Lieberman, Esq., Executive Vice President and General Counsel, and
PEREGRINE WAY OF CT, LLC (herein called “Guarantor”), a New York limited liability company having
its chief executive offices and principal places of business at 217 Montgomery Street, Sixth Floor, Syracuse, NY 13202, Attention:
Mark D. Farchione.

 

W I T N E S S E T H:

 

Section 1.     The Loan

 

1.1
           Amount. The Bank will lend to the Borrower, and the Borrower will borrow from the Bank, SEVEN MILLION EIGHT HUNDRED
SEVENTY-FIVE THOUSAND and 00/100 ($7,875,000.00) DOLLARS (the “Loan”).

 

1.2
          The Note. The borrowing will be evidenced by a note (herein
called “Note”) in substantially the form of Exhibit I hereto. The Note will be payable in principal installments
in the amounts specified in the Note. The Loan shall be secured by the lien of a mortgage on the real property of the Borrower
known as 89-91 East Main Street in the Town of Clinton, County of Middlesex and State
of Connecticut (the “Property”).

 

Notwithstanding any other provision contained in any promissory
note executed by the Borrower in favor of the Bank, this Agreement shall be deemed to govern each and every Loan and Note of the
Borrower and a default hereunder shall constitute a default under all loans and notes.

 

1.3
          Computation of Interest. All computations
of interest on the Note shall be made on the basis of a 360-day year and actual days elapsed.

 

1.4
          Repayment of Loan. The Borrower
shall repay the aggregate unpaid principal amount of the Loan in accordance with the terms set forth in the Note evidencing the
Loan.

 

1.5
          Payment of Principal and Interest.
The Bank is authorized to charge principal and interest due under the Note to any account of the Borrower or Guarantor borrowing
the Loan when and as it becomes due.

    	 

    	 

    

 

1.6
        Late Charge. Bank may collect
a “late charge” equal to five (5%) percent of any installment of interest or principal, or of any other amount due to
the Bank which is not paid or reimbursed by the Borrower or Guarantor within ten (10) days of the due date thereof to cover the
extra expense involved in handling such delinquent payment, provided, however, that the late charge will accrue on the final payment
due under the Note only after the expiration of thirty (30) days. The minimum late charge shall be $50.00. Borrower agrees that
such “late charge” is an agreed reasonable estimate of the amount of the expenses of Holder incident to handling such
delinquent payment, which expenses may be difficult for the parties to quantify, and which “late charge” constitutes
agreed upon liquidated damages in addition to the payment of interest.

 

Section 2.     Representations and Warranties

 

A.
          Borrower Representations and Warranties:
The Borrower hereby represents and warrants to the Bank (which representations and warranties will survive the delivery of the
Note and the making of the Loan and shall be deemed to be continuing until Loan and Note are fully paid and this Agreement is terminated)
that:

 

2.1
        Organization, Charter, Compliance
with Laws, Financial and other Information.

 

(a)
         Borrower is duly organized and validly
existing under the laws of the State of Delaware and is qualified and in good standing in Connecticut and in all states in which
the nature of business conducted requires qualification;; and

 

(b)
        The execution, delivery and performance
of this Agreement are within Borrower’s powers, have been duly authorized, are not in contravention of any law or any terms of
Borrower’s articles of organization, operating agreement or other governing or operating documents or
any agreement or undertaking to which Borrower is a party and will not violate any law, regulation or court order; and

 

(c)
        All of Borrower’s issued and outstanding
membership interests are duly authorized, validly issued, fully paid and non-assessable; and

 

(d)
        The financial statements presented by Borrower
to the Bank are true, complete and correct in all material respects and fairly present the financial condition of Borrower as of
the date of such statements and the results of its operations for the period then ended. There has been no material adverse change
to Borrower’s financial condition since the date of such financial statements ; and

 

(e)
         Subject to any limitations stated therein
or in connection therewith, all information furnished or to be furnished by the Borrower pursuant to the terms hereof is, or will
be at the time the same is furnished, accurate and complete in all material respects necessary in order to make the information
furnished, in the light of the circumstances under which such information is furnished, not misleading in any material respect;
and

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(f)
         Except as specifically disclosed to the
Bank on Schedule 2.1 hereto, to the best of its knowledge the Borrower is in compliance with all laws, ordinances, rules
or regulations, applicable to it, of all federal, state or municipal governmental authorities, instrumentalities or agencies including,
without limitation, the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and the United
States Occupational Safety and Health Act of 1970, as amended, (“OSHA”).

 

2.2.
       Subsidiaries, Affiliates. The
Borrower has no Subsidiaries or Affiliates other than those shown on Schedule 2.2 attached hereto which Schedule 2.2 sets
forth the membership interests in the Borrower and which describes in detail the relationship with each such entity. The Borrower
is not the record or beneficial owner of any stock, common or preferred, of any other corporation, and there are no fixed, contingent
or other obligations on the part of the Borrower to issue any additional membership interests or other equity interests.

 

2.3
        Claims, Actions, Place of Business.

 

(a)
         Except as disclosed in the mortgagee title
insurance policy issued on the date of this Agreement by Chicago Title Insurance Company to the Bank relating to the Property for
Policy No.4235670 (the “Title Policy”), no claims, including, without limitation, taxes, assessments and insurance
premiums, are due and unpaid; and

 

(b)
         Borrower’s chief place of business is the
addresses shown above and Borrower shall give Bank at least thirty (30) days prior written notice of any change; and

 

(c)
          Other than pursuant to this Agreement or
as disclosed on Schedule 2.3 hereto, the Borrower has no other indebtedness, except for accounts payable incurred in the
ordinary course of its business; and

 

(d)
          Except as specifically disclosed to the
Bank on Schedule 2.3, the Borrower, to its knowledge, is not in default of any agreement, decree, law or order to which
it is a party or by which it is bound, including, without limitation, those relating to the environment; and

 

(e)
          Except as specifically disclosed to the
Bank on Schedule 2.3 hereto or in the Title Policy, no suits or actions are pending or threatened against Borrower or affecting
the Borrower or any of its properties which, if adversely determined, would materially impair the assets, liabilities, financial
condition or business of the Borrower; and

 

(f)
          Except as disclosed on Schedule 2.3,
the Borrower does not perform any work on any contracts for the United States government or any agency or subdivision thereof;
and

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(g)
          The Borrower is not a party to any payment
or performance bonds.

 

(h)
          The Borrower conducts business solely through
its own name and not through any trade name or style except as set forth in Schedule 2.3 hereof.

 

(i)
          The Borrower holds all necessary licenses,
consents (governmental or otherwise), patents and trademarks as are necessary to enable Borrower to conduct its business as presently
conducted and as contemplated and all of such licenses and consents are listed on Schedule 2.3 hereto.

 

(j)
          The Borrower has filed all federal, state
and local tax returns and other reports it is required to file by law and has paid all taxes and other charges that are due and
payable;

 

2.4
          Use of Proceeds. The Borrower
shall use the proceeds of the Loan to purchase the Property from Peregrine’s Landing of Clinton, Ct Real Estate, LLC , provided
that no part of such proceeds will be used, in whole or in part, for the purpose of (i) acquiring any consumer or household
goods or (ii) purchasing or carrying any “margin security” as such term is defined in Regulation U of the Board
of Governors of the Federal Reserve System or (iii) acquiring substantially all of the stock or assets of any other firm,
corporation or entity, without the prior written consent of the Bank.

 

2.5
         Validity. This Agreement, the
Note and all Related Agreements (as that term is defined in Section 3.3), upon the execution and delivery thereof, will be legal,
valid, binding and enforceable obligations of the Borrower, in accordance with the terms of each.

 

2.6
         Compliance with Government Programs.
Each governmental certification, governmental agreement and contract to which Borrower is now or hereafter may be a party is in
full force and effect, has not been amended, supplemented, rescinded, revoked or assigned and does not contain any provision prohibiting
the transfer of the pertinent obligor’s payment obligation thereunder, to the extent permitted by law, from Borrower to
Bank to the extent contemplated hereby. To the best of the knowledge of the Borrower, no condition exists, and no event has occurred,
which directly or indirectly, with the giving of notice or the passage of time or both, is reasonably likely to result in the
suspension, revocation, impairment, forfeiture, or non-renewal of any governmental consent, license or approval which is necessary
for the operation of Borrower’s business. .

 

2.7
         Patents
and Trademarks.  Borrower owns or possesses all the patents, trademarks, service marks, trade names, domain names, copyrights,
licenses, and rights with respect to the foregoing necessary for the present and planned future conduct of its business without
any known conflict with the rights of others. All such patents, trademarks, service marks, trade names, copyrights, domain names,
licenses and other similar rights are listed on Schedule 2.7 attached hereto and made a part hereof.

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2.8
         Labor
Relations. Except as described on Schedule 2.8 attached hereto and made a part hereof, Borrower is not a party to any
collective bargaining agreement; there are no material grievances, disputes or controversies with any union or any other organization
of Borrower’s employees, or threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any
union or organization.

 

2.9
        Environmental Matters. With respect to the Borrower:

 

(i)
          To the best of the knowledge of the Borrower, it has
obtained all permits, licenses and other authorizations which are required under all Environmental Laws. To the best of the knowledge
of the Borrower, each is in compliance, in all material respects, with the terms and conditions of all such permits, licenses and
authorizations, and is also in compliance, in all material respects, with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

 

(ii)
         Borrower has not (A) received any notice, notification,
demand, request for information, citation, summons or order; or (B) has any knowledge of the issuance of any of the forgoing; or
(C) any knowledge of any complaint being filed or of any penalty being assessed or any investigation or review pending or threatened
by any governmental or other entity with respect to any alleged failure by any of them to have any permit, license or authorization
required in connection with the conduct of its business or with respect to any Environmental Laws, including without limitation,
Environmental Laws relating to the generation, treatment, storage, recycling, transportation, disposal or release of any Hazardous
Materials.

 

(iii)
        Other than as set forth in that certain Phase I Environmental
Site Assessment Report, 89-91 East Main Street, Clinton, CT issued by HRP Associates, Inc., dated March 29, 2013, and that certain
Addendum to the Environmental Site Assessment (ESA) at 89-91 East Main Street, Clinton, Connecticut, dated April 16, 2013, from
HRP Associates, Inc. (collectively the “Environmental Report”), to Borrower’s actual knowledge, no oral
or written notification of a release of a Hazardous Material has been filed by or against, or received by,(collectively the “Environmental
Report”), no oral or written notification of a release of a Hazardous Material has been filed by or against, or received
by, Borrower or Guarantor and no Property now or previously owned, leased or used by Borrower including without limitation, the
Property, (the Property and any and such other properties previously owned, leased or used by any of them are collectively referred
to herein as the “Properties”) is listed or proposed for listing on the Comprehensive Environmental Response,
Compensation and Liability Inventory of Sites or National Priorities List under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or on any similar state or federal list of sites requiring investigation or clean-up.

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(iv)
       To the best of the knowledge of
the Borrower, there are no liens or encumbrances arising under or pursuant to any Environmental Laws on any of the Properties;
including without limitation, the Property, owned or leased by it, and no governmental actions have been taken or are in process
which could subject any of such Properties to such liens or encumbrances or, as a result of which Borrower would be required to
place any notice or restriction relating to the presence of Hazardous Materials at the Property or any of the Properties owned
by it in any deed to the Property or such Properties.

 

(v)
        Except as set forth in the Environmental
Report, neither it nor, to the best knowledge of Borrower, any previous owner, tenant, occupant or user of the Property or any
Properties owned, leased or used by Borrower , has (i) engaged in or permitted any operations or activities upon or any use or
occupancy of such Property, or any portion thereof, for the purpose of or in any way involving the release, discharge, refining,
dumping or disposal (whether legal or illegal, accidental or intentional) of any Hazardous Materials on, under, or in or about
such Property, or (ii) transported or had transported any Hazardous Materials to such Property except to the extent such Hazardous
Materials are used, stored, transported and disposed of in compliance with, all Environmental Laws; (iii) engaged in or permitted
any operations or activities which would allow the facility to be considered a treatment, storage or disposal facility as that
term is defined in 40 CFR 264 and 265, or (iv) constructed, stored or otherwise located Hazardous Materials on, under, in or about
any such Property except to the extent commonly used in day-to-day operations of any such Property and, in such case, in compliance
with all Environmental Laws. Further, to the best knowledge of Borrower, no Hazardous Materials have migrated from other properties
upon, about or beneath the Property or any other such Properties.

 

(vi)
        As used in this Agreement, the
term “Environmental Laws” shall mean all applicable federal, state and local laws, ordinances, rules and regulations
of any governmental or regulatory authority relating to health and safety or pollution or protection of the environment (collectively,),
including, without limitation, those relating to (i) the transportation, storage, placement, handling, treatment, discharge,
generation, manufacture, production or disposal of any asbestos or any waste, substance or material containing asbestos, any oil
or petroleum products, lead paint or other material containing lead, urea formaldehyde, foam insulation, transformers or other
equipment containing polychlorinated biphenyls, flammable explosives, radioactive materials and any other hazardous, toxic or dangerous
waste, substance or material subject to regulation under the Clean Water Act, the Clean Air Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Superfund Amendment and Reauthorization
Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, Title 22a of the Connecticut General Statutes (or
Environmental Laws of any other state in which the Land is located) and any other Environmental Law, now or hereafter in effect
(each a “Hazardous Material” and individually or collectively, “Hazardous Materials”), and
those relating to (ii) the spilling, leaking, migrating, pumping, pouring, emitting, emptying, injecting, escaping, leaching,
dumping, discharging or disposing into the

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environment or existence in the water, soil or air of any Contaminant upon, in, from
or affecting the Property or the Properties, whether sudden or gradual, accidental or anticipated, threatened or occurring or of
any other nature.

 

B.
           Guarantor Representations and Warranties:
The Guarantor hereby represents and warrants to the Bank (which representations and warranties will survive the delivery of the
Note and the making of the Loan and shall be deemed to be continuing until Loan and Note are fully paid and this Agreement is terminated)
that:

 

2.10        Organization, Charter, Compliance
with Laws, Financial and other Information.

 

(a)
          Guarantor is duly organized and validly
existing under the laws of the State of New York and is qualified and in good standing in Connecticut and in all states in which
the nature of business conducted requires qualification;; and

 

(b)
          The execution, delivery and performance
of this Agreement are within Guarantor’s powers, have been duly authorized, are not in contravention of any law or any terms of
Guarantor’s articles of organization, operating agreement or other governing or operating documents or
any agreement or undertaking to which Guarantor is a party and will not violate any law, regulation or court order; and

 

(c)
          All of Guarantor’s issued and outstanding
membership interests are duly authorized, validly issued, fully paid and non-assessable; and

 

(d)
          The financial statements presented by Guarantor
to the Bank are true, complete and correct in all material respects and fairly present the financial condition of Guarantor as
of the date of such statements and the results of its operations for the period then ended. There has been no material adverse
change to Guarantor’s financial condition since the date of such financial statements ; and

 

(e)
          Subject to any limitations stated therein
or in connection therewith, all information furnished or to be furnished by the Guarantor pursuant to the terms hereof is, or will
be at the time the same is furnished, accurate and complete in all material respects necessary in order to make the information
furnished, in the light of the circumstances under which such information is furnished, not misleading in any material respect;
and

 

(f)
         Except as specifically disclosed to the
Bank on Schedule 2.1 hereto, the Guarantor is in compliance with all laws, ordinances, rules or regulations, applicable
to it, of all federal, state or municipal governmental authorities, instrumentalities or agencies including, without limitation,
ERISA and OSHA.

 

2.11.
      Subsidiaries, Affiliates. The
Guarantor has no Subsidiaries or Affiliates other than those shown on Schedule 2.2 attached hereto which Schedule 2.2 sets
forth the membership interests in the Guarantor, which describes in detail the relationship

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with each such entity. The Guarantor
is not the record or beneficial owner of any stock, common or preferred, of any other corporation, and there are no fixed, contingent
or other obligations on the part of the Guarantor to issue any additional membership interests or other equity interests.

 

2.12
       Claims, Actions, Place of Business.

 

(a)
          Except as disclosed in the Title Policy,
no claims, including, without limitation, taxes, assessments and insurance premiums, are due and unpaid; and

 

(b)
          Guarantor’s chief place of business are
the addresses shown above and Guarantor and Guarantor shall give Bank at least thirty (30) days prior written notice of any change;
and

 

(c)
          Other than pursuant to this Agreement or
as disclosed on Schedule 2.3 hereto, the Guarantor has no other indebtedness, except for accounts payable incurred in the
ordinary course of its business; and

 

(d)
          Except as specifically disclosed to the
Bank on Schedule 2.3, the Guarantor, to its knowledge, is not in default of any agreement, decree, law or order to which
it is a party or by which it is bound, including, without limitation, those relating to the environment; and

 

(e)
          Except as specifically disclosed to the
Bank on Schedule 2.3 hereto or in the Title Policy, no suits or actions are pending or threatened against Guarantor or affecting
the Guarantor or any of its respective properties which, if adversely determined, would materially impair the assets, liabilities,
financial condition or business of the Guarantor; and

 

(f)
          Except as disclosed on Schedule 2.3,
the Guarantor does not perform any work on any contracts for the United States government or any agency or subdivision thereof;
and

 

(g)
         The Guarantor is not a party to any payment
or performance bonds.

 

(h)
         The Guarantor conducts business solely
through its own name and not through any trade name or style except as set forth in Schedule 2.3 hereof.

 

(i)
          The Guarantor holds all necessary licenses,
consents (governmental or otherwise), patents and trademarks as are necessary to enable Guarantor to conduct its business as presently
conducted and as contemplated and all of such licenses and consents are listed on Schedule 2.3 hereto.

 

(j)
          The Guarantor has filed all federal, state
and local tax returns and other reports it is required to file by law and has paid all taxes and other charges that are due and
payable;

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2.13
        Validity. This Agreement, the
Note and all Related Agreements (as that term is defined in Section 3.3), upon the execution and delivery thereof, will be legal,
valid, binding and enforceable obligations of the Guarantor, in accordance with the terms of each.

 

2.14
       Compliance with Government Programs.
Each governmental certification, governmental agreement and contract to which Guarantor is now or hereafter may be a party is
in full force and effect, has not been amended, supplemented, rescinded, revoked or assigned and does not contain any provision
prohibiting the transfer of the pertinent obligor’s payment obligation thereunder from the patient to Guarantor or, to the
extent permitted by law, from Guarantor to Bank to the extent contemplated hereby. Guarantor is in material compliance with the
requirements of all private or governmental healthcare payment or reimbursement programs in which Guarantor participates (collectively
referred to herein as “Healthcare Programs”), and all contracts and agreements relating to their “accounts”
(referred to herein as the “Accounts”), as that term is defined in Article 9 of the Uniform Commercial Code,
as enacted in Connecticut. All of Guarantor’s existing provider identification numbers are set forth in Schedule 2.6
attached hereto and incorporated herein. To the best of the knowledge of the Guarantor, no condition exists, and no event
has occurred, which directly or indirectly, with the giving of notice or the passage of time or both, is reasonably likely to
result in the suspension, revocation, impairment, forfeiture, or non-renewal of any governmental consent, license, approval or
provider number which is necessary for the operation of Guarantor’s business or their participation in any Healthcare Program
or any other contract or agreement relating to Accounts. Guarantor has not received any notice of any audits, investigations or
other inquiries pending or threatened against the Guarantor, including, without limitation, with respect to its participation
in any Healthcare Programs.

 

2.15
      Patents
and Trademarks. Guarantor owns or possesses all the patents, trademarks, service marks, trade names, domain names, copyrights,
licenses, and rights with respect to the foregoing necessary for the present and planned future conduct of its business without
any known conflict with the rights of others. All such patents, trademarks, service marks, trade names, copyrights, domain names,
licenses and other similar rights are listed on Schedule 2.7 attached hereto and made a part hereof.

 

2.16       Labor
Relations. Except as described on Schedule 2.8 attached hereto and made a part hereof, Guarantor is not a party to any
collective bargaining agreement; there are no material grievances, disputes or controversies with any union or any other organization
of Guarantor’s employees, or threats of strikes, work stoppages or any asserted pending demands for collective bargaining
by any union or organization.

 

2.17        Environmental Matters. With respect to the Guarantor:

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(i)
          To the best of the knowledge of the Guarantor , it has
obtained all permits, licenses and other authorizations which are required under all Environmental Laws. To the best of the knowledge
of the Guarantor, it is in compliance, in all material respects, with the terms and conditions of all such permits, licenses and
authorizations, and is also in compliance, in all material respects, with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

 

(ii)
         Guarantor has not (A) received any notice, notification,
demand, request for information, citation, summons or order; or (B) has any knowledge of the issuance of any of the forgoing; or
(C) any knowledge of any complaint being filed or of any penalty being assessed or any investigation or review pending or threatened
by any governmental or other entity with respect to any alleged failure by any of them to have any permit, license or authorization
required in connection with the conduct of its business or with respect to any Environmental Laws, including without limitation,
Environmental Laws relating to the generation, treatment, storage, recycling, transportation, disposal or release of any Hazardous
Materials.

 

(iii)
        Other than as set forth in the Environmental Report,
no oral or written notification of a release of a Hazardous Material has been filed by or against, or received by, Guarantor and
no Property now or previously owned, leased or used by Guarantor including without limitation, the Properties, is listed or proposed
for listing on the Comprehensive Environmental Response, Compensation and Liability Inventory of Sites or National Priorities List
under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or on any similar state or
federal list of sites requiring investigation or clean-up.

 

(iv)
        To the best of the knowledge of
the Guarantor, there are no liens or encumbrances arising under or pursuant to any Environmental Laws on any of the Properties;
including without limitation, the Property, owned or leased by it, and no governmental actions have been taken or are in process
which could subject any of such Properties to such liens or encumbrances or, as a result of which Guarantor would be required to
place any notice or restriction relating to the presence of Hazardous Materials at the Property or any of the Properties owned
by it in any deed to the Property or such Properties.

 

(v)
         Except as set forth in the Environmental
Report, neither it nor, to the best knowledge of Guarantor, any previous owner, tenant, occupant or user of the Property or any
Properties owned, leased or used by Guarantor, has (i) engaged in or permitted any operations or activities upon or any use or
occupancy of such Property, or any portion thereof, for the purpose of or in any way involving the release, discharge, refining,
dumping or disposal (whether legal or illegal, accidental or intentional) of any Hazardous Materials on, under, or in or about
such Property, or (ii) transported or had transported any Hazardous Materials to such Property except to the extent such

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Hazardous
Materials are used, stored, transported and disposed of in compliance with, all Environmental Laws; (iii) engaged in or permitted
any operations or activities which would allow the facility to be considered a treatment, storage or disposal facility as that
term is defined in 40 CFR 264 and 265, or (iv) constructed, stored or otherwise located Hazardous Materials on, under, in or about
any such Property except to the extent commonly used in day-to-day operations of any such Property and, in such case, in compliance
with all Environmental Laws. Further, to the best knowledge of Guarantor, no Hazardous Materials have migrated from other properties
upon, about or beneath the Property or any other such Properties.

 

Section 3.      Conditions Precedent

 

The making of the Loan shall be subject to satisfaction
of all of the following conditions precedent:

 

3.1
          Approval of Bank Counsel. All
legal matters incident to the transactions hereby contemplated shall be reasonably satisfactory to counsel for the Bank.

 

3.2
          Proof of Action. The Bank shall
have received certified copies of all action taken by the Borrower and Guarantor to authorize the execution and delivery of this
Agreement, the Related Agreements and the Note and borrowing hereunder and such other papers as the Bank or its counsel shall reasonably
request.

 

3.3
         Related Agreements and Documents.
The Borrower and the Guarantor, as applicable, shall have delivered to the Bank the various agreements and documents described
under the heading “Related Agreements” in Schedule A hereto, or such agreements and documents as the Bank may
require with respect to such Loan, (herein referred to as the “Related Agreements”).

 

3.4
         No Event of Default. No event
has occurred or is continuing which, pursuant to the provisions of Section 6 with the lapse of time and/or the giving of a notice
as specified therein, would constitute an Event of Default.

 

3.5
         No Material Adverse Change. There
has been no material adverse change in the financial condition of the Borrower or Guarantor since the date of the latest financial
statement delivered to the Bank.

 

3.6
         Representations and Warranties.
That the representations and warranties contained in Sections 2.1 through 2.17 are true and complete in all material respects,
and that the Borrower and Guarantor shall have so certified to the Bank. Any request for a borrowing or request for a release of
funds from the capital improvements reserve account pursuant to the Capital Improvements Pledge Agreement of even date with this
Agreement, shall be deemed a certification by the Borrower and Guarantor as to the truth and accuracy of the representations and
warranties contained in Sections 2.1 through 2.17 as of the date of such request, in all material respects.

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3.7
         Establishment and Pledge of Reserve
Account. On the date of this Agreement, Borrower and Guarantor shall create and pledge a deposit account at the Bank in an
amount not less than $24,000.00 (the “Reserve Account”), as security for the payment of the Loan. Failure to
maintain such Reserve Account in accordance with the terms of the Pledge Agreement shall be an immediate Event of Default under
this Agreement, without any demand or notice by the Bank. The Reserve Account and pledge thereof shall be in form and content satisfactory
to Bank and its counsel.

 

3.8
         Other Conditions. Such other conditions
as Bank may reasonably require as set forth in the commitment letter from Bank to Borrower and Guarantor, including, without limitation,
payment of all required commitment or facility fees and loan transaction expenses, including all attorneys fees.

 

Section 4.      Affirmative Covenants

 

Each of the Borrower and Guarantor hereby covenants
and agrees that, as applicable to each such party, from the date hereof until payment in full of the Loans and the Note and the
termination of this Agreement, unless the Bank otherwise consents in writing, to:

 

4.1
         Financial Statements. Deliver
to the Bank

 

(a)
          Within
one hundred twenty (120) days after the close of each fiscal year, audited consolidated and consolidating financial statements
of the Borrower including a balance sheet as of the close of such fiscal year and statements of income and retained earnings and
source and application of funds for the year then ended, prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year or containing disclosure of the effect on financial position or results
of operations of any change in the application of accounting principles during the year and accompanied by a report, thereon, containing
an unqualified opinion of a firm of independent certified public accountants selected by the Borrower and reasonably acceptable
to the Bank;

 

(b)
          Within
one hundred twenty (120) days after the close of each fiscal year, consolidated and consolidating financial statements of the Guarantor
and, including a balance sheet as of the close of such fiscal year and statements of income and retained earnings and source and
application of funds for the year then ended, prepared in conformity with generally accepted accounting principles, applied on
a basis consistent with that of the preceding year or containing disclosure of the effect on financial position or results of operations
of any change in the application of accounting principles during the year and accompanied by a review thereof in accordance with
standards established by the American Institute of Certified Public Accountants and prepared by a firm of independent certified
public accountants selected by the Guarantor and reasonably acceptable to the Bank provided, however. if the consolidated
and consolidating financial statements of the Guarantor are not prepared

    	12

    	 

    

 

on a fully audited basis, the Guarantor shall also be
obligated to deliver to the Bank the Guarantor’s annual federal tax return within thirty (30) days after the filing thereof;

 

(c)
          Within forty-five (45) days after close
of each quarter of each fiscal year, internally prepared consolidated financial statements of the Borrower , including a balance
sheet as of the close of such period and statements of income and retained earnings for that portion of the fiscal year-to-date
then ended, prepared in conformity with generally accepted accounting principles, applied on a basis consistent with that of the
preceding period or containing disclosure of the effect on financial position or results of operations of any change in the application
of generally accepted accounting principles during the period, and certified by an officer of the Borrower as accurate, true and
complete;

 

(d)
          Within forty-five (45) days after close
of each quarter of each fiscal year, internally prepared consolidated financial statements of the Guarantor, including a balance
sheet as of the close of such period and statements of income and retained earnings for that portion of the fiscal year-to-date
then ended, prepared on a basis consistent with that of the preceding period or containing disclosure of the effect on financial
position or results of operations of any change in the application of generally accepted accounting principles during the period,
and certified by an officer of the Guarantor as accurate, true and complete;

 

(e)
          Within
thirty (30) days after the close of each fiscal year of the Guarantor, a copy of its annual budget for the next succeeding fiscal
year, and within fourteen (14) days after the adoption thereof, a copy of any revision to said annual budget by
the Guarantor;

 

(f)
          Together with the financial statements
required above, the Bank may require from time to time a certificate of compliance executed by the authorized signatory of the
Borrower or the Guarantor, as applicable, indicating that compliance with all Affirmative and Negative Covenants herein and, with
respect to all financial covenants, containing calculations indicating compliance therewith;

 

(g)
          Within thirty (30) days prior to the expiration
of any hazard insurance policy, liability insurance policy and/or workers’ compensation insurance policy, a certificate of
insurance evidencing the existence and continuing coverage of each such insurance policy held by the Borrower and applicable to
the Property and held by the Guarantor and applicable to the assisted living facility it operated on the Property and each in amounts
satisfactory to the Bank; [note – this will be needed annually and is a regulatory requirement applicable to the Bank]

 

(h)
          Promptly upon becoming aware of any Event
of Default, or any occurrence but for the giving of notice or the passage of time would constitute an Event of Default, but in
any event within five (5) days thereof, the Borrower and Guarantor, as applicable, shall notify the Bank thereof in writing; and

    	13

    	 

    

 

 

(i)
          Promptly upon the Bank’s written request,
such other information about the financial condition and operations of the Borrower or Guarantor, as the Bank may, from time to
time, reasonably request, including but not limited to, occupancy reports

 

4.2
         General Affirmative Covenants.
Borrower and Guarantor shall:

 

(a)
          Promptly advise the Bank of the commencement
of litigation or a receipt of a threat of litigation, including arbitration proceedings and any proceedings before any governmental
agency, which might have a material adverse effect upon the condition, (financial, operating or otherwise,) of the Borrower or
Guarantor, as applicable, or where the amount involved is $100,000.00 or more unless an insurance company has agreed to
accept responsibility for the claim under a policy of insurance and has agreed to assume the defense of the litigation or
proceeding;

 

(b)
        Promptly advise the Bank of the commencement of litigation
or a receipt of a threat of litigation or other claim, including arbitration proceedings and any proceedings before any governmental
agency, or which involves any claim or controversy with respect to any membership interest in the Borrower or Guarantor, as applicable;

 

(c)
         Continue to conduct its business consistent
with the manner in which it is presently conducted;

 

(d)
         Maintain its existence and pay all taxes
before the same become delinquent;

 

(e)
         Notify the Bank of any event causing material
loss or unusual depreciation in any material asset and the amount of same;

 

(f)
          Comply with all laws, ordinances, rules
or regulations, applicable to it, of all federal, state or municipal governmental authorities, instrumentalities or agencies including,
without limitation, the Employee Retirement Income Security Act of 1974, as amended, the United States Occupational Safety and
Health Act of 1970, as amended, the Environmental Laws, the laws and regulations relating to the Healthcare Programs and all federal,
state, county and municipal laws, ordinances, rules and regulations relating to the environment or the employment of labor, as
such may be amended; and

 

(g)
         Give prompt written notice to Bank (but
in any event within fifteen (15) days) of its knowledge thereof:

 

(i)
          any material dispute that may
arise with any governmental regulatory body or law enforcement;

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(ii)
        any labor controversy resulting
or reasonably likely to result in a strike or work stoppage;

 

(iii)
       any proposal by any public
authority to acquire any asset or all or any portion of its business;

 

(iv)
        any proposed or actual change
to its name, trade names, identities or corporate structure;

 

(v)
        any change in its place of business
or the location of assets from its present place of business and/or locations; or

 

(vi)
       any other matter which has
resulted or is reasonably likely to result in a material adverse change in its financial condition or operations;

 

(h)
      Keep its properties insured against
fire and other hazards (so called “All Risk” coverage) in amounts and with companies satisfactory to the Bank to the
same extent and covering such risks as is customary in the same or a similar business, but in no event in an amount less than the
lesser of (i) the total indebtedness or (ii) the amount necessary to avoid any co-insurance penalty which policies shall name the
Bank as mortgagee and loss payee as its interest may appear. Such All Risk property insurance coverage shall provide for a minimum
of thirty (30) days’ written cancellation notice to the Bank;

 

(i) 
       Maintain public liability coverage
against claims for personal injuries, death or property damage in an amount deemed reasonable by the Bank, which policy shall name
the Bank as an additional insured;

 

(j) 
        Maintain, or cause to be maintained,
all worker’s compensation, employment or similar insurance as may be required by applicable law;

 

(k)

       Deliver copies of all insurance policies to the Bank and in the event of any loss or damage to the Collateral, give immediate
written notice to the Bank and to its insurers of such loss or damage and shall promptly file its proofs of loss with said insurers.
By their signatures hereon, each of the Borrower and Guarantor, as applicable, hereby irrevocably appoints the Bank to act as its
attorney-in-fact for the in making, adjusting and settling claims under such policies of insurance or endorsing its name on any
drafts drawn by insurers of the Collateral (as defined in the Security Agreements executed by each of the Borrower and Guarantor
which are a part of the Related Agreements) or any other document to effect collection. Each of the Borrower and Guarantor hereby
jointly and severally, indemnifies the Bank against any loss or damage to Collateral not insured by Borrower or Guarantor, as applicable,
and for any deficiency in any effective insurance coverage required to be maintained by Borrower or Guarantor, as applicable, pursuant
to this Loan Agreement or any Related Agreement, which indemnification obligation shall constitute part of the Obligations, as
defined in the

    	15

    	 

    

 

Security Agreements executed by the Borrower and Guarantor which are a part of the Related Agreements;

 

(l)
        Permit the Bank to enter its premises and inspect and
to make copies of its books and records upon reasonable notice during normal business hours;

 

(m)
       Maintain all operating accounts of the
Guarantor at the Bank and comply with all of the terms of any agreement governing any such accounts; and

 

(n)
       The Guarantor shall maintain or cause
all health care professionals and physicians employed to maintain at all times (i) malpractice insurance for each such health
care professional and physician employed by the Guarantor (ii) all licenses required to practice medicine in the State of
Connecticut and (iii) accreditation with at least one of the managed care companies, issuers of indemnity contracts and other
third party payors listed on Schedule 4.2.

 

4.3
        Pledge of Reserve Account. The
Reserve Account shall be pledged and maintained at all times at the Bank in an amount not less than $24,000.00, as security for
the payment of the Loan, with no attachment, execution, lien or claim to such deposit account by any other party;; and

 

4.4
       Additional Health Care Covenants.
Borrower and Guarantor shall:

 

(a)
        keep adequate records and books of account
with respect to its business activities in which proper entries are made in accordance with GAAP reflecting all its financial transactions,
including proper records as to all Accounts and the pertinent service dates, billing dates and aggregate billed and unbilled Accounts
and the collection rates with respect to Accounts; and, cause to be prepared and furnished to Bank the following (all to be kept
and prepared in accordance with GAAP consistently applied, unless its certified public accountants concur in any changes therein
and such changes are disclosed to Bank and are consistent with then generally accepted accounting principles):

 

(i)
        promptly after the sending, filing or receiving
thereof, as the case may be, copies of any reports that are sent or received from any governmental agency or authority or to any
of its members or equity holders, including any regular, periodic and special reports, cost reports, audits or registration statements;
and

 

(ii)
       such other data and information (financial and
otherwise) as Bank, from time to time, may reasonably request, bearing upon or related to the Collateral or the Borrower’s or Guarantor’s
financial condition and/or results of operations;

 

(b)
        notify Bank in writing:

    	16

    	 

    

  

 

(i)
         promptly upon receipt of notice thereof, of any
pending or threatened litigation affecting Borrower or Guarantor, whether or not the claim is considered by Borrower or such Guarantor
to be covered by insurance, and of the institution of any suit or administrative proceeding or any governmental audit, which may
materially and adversely affect Borrower’s or Guarantor’s operations, financial condition or business or Bank’s security
interest in the Collateral; and

 

(ii)
         promptly upon learning thereof, of any labor
dispute to which Borrower or Guarantor may become a party, any strikes or walkouts relating to any officer or other facilities,
and the expiration of any labor contract to which Borrower or Guarantor is a party or by which Borrower or Guarantor is bound;

 

(c)          file all federal, state and local tax
returns and other reports Borrower or Guarantor is required by law to file, maintain adequate reserves for the payment of all taxes,
assessments, governmental charges and levies imposed upon it, its income or its profits, or upon the Property or any Properties
or assets belonging to it, and pay and discharge all such taxes, assessments, governmental charges and levies prior to the date
on which penalties attach thereto, except where the same are being contested in good faith by appropriate proceedings and provided
that in such event reserves satisfactory to the Bank (whether book, cash or otherwise) shall have been established with respect
to each such claim being contested; and

 

(d)         comply, in all material respects,
with all laws, ordinances, governmental rules and regulations to which it is subject, including, without limitation, with respect
to public health, quality assurance or Environmental Law; comply, in all material respects, and shall obtain and maintain each
license, permit, provider number, franchise or other governmental authorization necessary to the ownership of the Property of its
assets or properties or to the conduct of its business, the failure of which to obtain and maintain could reasonably materially
and adversely affect the business, prospects, profits, Properties or condition (financial or otherwise) of Borrower or the Guarantor,
and, specifically addition, the Guarantor shall comply, in all material respects, with all laws, ordinances, governmental rules
and regulations with respect to its status or operations as a healthcare facility, a health care provider or institution and with
all Healthcare Programs and all contracts relating thereto or monies due thereunder, including without limitation maintaining full
eligibility to participate therein and to seek reimbursement through such programs and shall obtain and maintain each license,
permit, provider number, franchise or other governmental authorization necessary to continue its business as presently conducted
or contemplated;

 

4.5          Corrective Actions. The Borrower
and Guarantor, in consideration of Bank entering into the making of any Loan to Borrower and disbursing the proceeds thereof, hereby,
jointly and severally agree that, if requested by the Bank or other holder of any Note evidencing any Loan, any guaranty agreement
or other evidence of indebtedness resulting from or contemplated in said Loan or Note, to promptly execute and fully

    	17

    	 

    

 

cooperate
in adjusting for clerical errors set forth in, the Note, the Loan or the Related Agreements as deemed necessary or desirable in
the reasonable discretion of Bank or such holder. Failure by the Borrower or Guarantor to promptly comply with any such request,
but in any event within five (5) business days or the making of any such request shall constitute an Event of Default hereunder
and under each Related Agreement.

 

Section 5.      Negative Covenants

 

Each of the Borrower and Guarantor covenants
and agrees that, until payment is made in full of the Loan and the Note and the performance of all of its other obligations hereunder,
unless the Bank otherwise consents in writing:

 

5.1          Restrictions. Neither the Borrower
nor Guarantor shall:

 

(a)           Incur or permit to exist any liens or
other encumbrances on any of its assets except (i) in favor of Bank, (ii) pledges or deposits in connection with or to
secure worker’s compensation, unemployment insurance, pensions, or other employee benefits; (iii) liens or encumbrances on
the Property permitted by the Bank as “Permitted Encumbrances” under the Bank’s mortgage on the Property or as
set forth on Schedule 5.1(a) under the heading “Permitted Liens and Leases”; and/or (iv) tax liens which
are being contested in good faith and against which the Borrower or Guarantor, as applicable, has maintained reserves (bond, cash,
book or otherwise) satisfactory to the Bank, nor shall the Borrower nor Guarantor make or enter into any contract or agreement
with any other lender, entity or third party the effect of which is to restrict the Borrower from granting a security interest
to the Bank or otherwise creating a lien or encumbrance on any of its assets in favor of the Bank; or

 

(b)        Merge, consolidate, acquire any other
business or material assets, other than in the ordinary course of business as presently conducted, or dispose of any material asset;
or

 

(c)         Suffer to exist any indebtedness or obligation
for borrowed money or issue any guaranties of the obligations of any other person or entity except for (i) the Loan, and (ii) trade
payables incurred in the ordinary course of its business; or

 

(d)         Suffer to exist any judgment against
it or any of its assets or any of its membership interests that is not subject to a mandatory stay, or bonded, pending appeal;
or

 

(e)         Form or dispose of any Subsidiary or
Affiliate; or

 

(f)         With respect to ERISA, engage in any
“prohibited transaction”, incur any “accumulated funding deficiency”, terminate any pension plan so as to create
any lien on any of its assets, or otherwise not be in full compliance therewith; or

    	18

    	 

    

 

 

(g)         Guarantee, become obligated
to pay or otherwise assure any obligation of any other party; or

 

(h)         Issue, sell, redeem or repurchase any
of its membership interests or make any distribution or pay any indebtedness owing by it to any of its members, subsidiaries, affiliates
or other holders of equity interests or debentures, except as specifically permitted by the Bank in writing, provided, however,
that so long as no event of default has occurred, transfers of membership interests may be made as follows:

 

(1)
         by Stephan Bowman and/or Mark Franchione may make transfers to other members of Guarantor,
family members of members of Guarantor, provided that such transfers do not exceed 49% of the aggregate initial holdings and
are made to trusts or entities created for the benefit of members of Guarantor or their family members for tax and estate planning
and that Stephan Bowman and Mark Franchione retain actual voting control of all of the voting interests of each such
entity created by them; and

 

(2)          by NorthStar Realty Healthcare,
LLC (’NRH”), as the owner of all of the membership interests of the Borrower, shall be permitted, without the
consent of the Bank, but following written notification to the Bank, to transfer its ownership interests in the Borrower in favor
of (i) NorthStar Healthcare Income, Inc, a Maryland corporation, a public non-traded real estate investment trust (“NHI”),
or (ii) any Affiliate of NorthStar Realty Finance Corp., a Maryland corporation. There are no restrictions on the ability of NRH
to transfer its ownership interests in other entities (other than the Borrower) to NHI; and

 

(3)         the Borrower shall have the
right to make distributions to its members so long as no Event of Default has occurred hereunder provided (a) such written request
shall be accompanied by a certificate of the manager of the Borrower and/or the Guarantor, as the case may be, certifying that
no default has occurred, both before the making of any such distribution and after giving effect thereto, and, in addition, showing
the calculations that prove compliance with Sections 5.2 and 5.3 hereof, both before the making of any such distribution and after
giving effect to such distribution and (b) the prior written consent of the Bank has been issued (which may be based upon, among
other things, the Bank’s concurrence with the facts and calculations in the certificate), which consent will be deemed to
have been given after seven (7) Business Days after the date of the submission of the request provided such request is accompanied
by the fully completed certificate from the Borrower or the Guarantor, as the case may be; and

 

(4)         the Guarantor shall have the
right to make distributions to its members so long as no Event of Default has occurred and remains uncured within the time limits,
if any, provided therefor; or

    	19

    	 

    

 

 

(i)          Except as provided in 5.1(h) hereof,
make any change in its management of the Guarantor (whether of the manager(s) or members of the limited liability company) or of
any of the members or the senior management of the Guarantor or in the Management Contract with PHMC of CT, LLC, a New York
limited liability company, without the prior written consent of Bank, which consent shall not be unreasonably withheld or delayed;
or

 

(j)          Change its name or its principal place
of business from that set forth above or change the nature of its business from that conducted on the date hereof; or

 

(k)         Make or consent to a change in the membership
or other ownership interests in the Borrower or Guarantor, except as permitted in Section 5.1 (h) hereof or in the method
of accounting for any of them (including, without limitation, the basis of application of generally accepted accounting principles)
or in its tax elections under the Internal Revenue Code, as applicable; or

 

(l)          Make any payment on any indebtedness
subordinated to the Bank, if any, in violation of any subordination agreement or other agreement relating thereto.

 

5.2         Average Occupancy Rate. The Guarantor
shall not permit the Average Occupancy Rate to be less than eighty-seven and one-half percent (87.5%). “Average
Occupancy Rate” shall mean, for each period measured, the quotient, expressed as a percentage, of the “average
resident count” divided by the total number of occupied beds in the assisted living facility on the Property; and
the term “average resident count” means, for each period measured, the quotient of the total number of residents living
in the assisted living facility on the Property for each day of the period measured divided by the total number of days in such
period measured. The Bank shall test Borrower’s compliance under this subsection quarterly, calculated on a year to date
basis, commencing June 30, 2013 and at the end of each fiscal quarter thereafter until December 31, 2013 and commencing December
31, 2013, the Bank shall test Borrower’s compliance quarterly but the calculation shall then be based on the prior four (4)
fiscal quarters, provided, however, the Bank may test compliance at any time if the Bank reasonably believes that an Event
of Default has otherwise occurred or if an event has occurred that with the giving of a notice or the lapse of time would constitute
such an Event of Default.

 

5.3         Debt
Service Coverage Ratio. The Borrower shall not permit its Debt Service Coverage Ratio to fall below 1.25 to 1.0 at any
time, as determined in accordance with generally accepted accounting principles consistently applied. “Debt Service Coverage
Ratio” shall mean, for any period, a ratio in which (a) the numerator is the pre-tax “net rental income”
for the applicable period less all distributions for such period and (b) the denominator is the total principal amount due
for the applicable period, whether or not paid, plus the total amount of interest due for the applicable period, whether or not
paid; and in calculating “net rental income”, extraordinary and/or non-recurring income and expenses shall be excluded.
The Bank shall test Borrower’s compliance under this subsection quarterly, calculated on a year to date basis,

    	20

    	 

    

 

commencing
September 30,  2013 and as at the end of each fiscal quarter thereafter until September 30, 2014 and commencing September 30,
2014 the Bank shall test Borrower’s compliance quarterly but the calculation shall then be based on the prior four (4) fiscal
quarters, provided, however, the Bank may test compliance at any time if the Bank reasonably believes that an Event of Default
has otherwise occurred or if an event has occurred that with the giving of a notice or the lapse of time would constitute such
an Event of Default. The Borrower shall have the right to cure any default with respect to this covenant once during the life of
the Loan, provided the Borrower shall complied with Section 4.1(f) hereof and the Bank concurs that the action taken cures the
default under this Section 5.3.

 

5.4          Transactions with Subsidiaries and
Affiliates. Neither Borrower nor Guarantor shall enter into, or be a party to, any transaction with any Subsidiary or Affiliate
(including, without limitation, transactions involving the purchase, sale or exchange of property, the rendering of services or
the sale of stock, membership interests or other interests) except in the ordinary course of business pursuant to the reasonable
requirements of the Borrower or such Guarantor and upon fair and reasonable terms no less favorable to the Borrower or such Guarantor
than said entity would obtain in a comparable arm’s-length transaction with a person other than a Subsidiary or an Affiliate.

 

Section 6.      Defaults, Remedies

 

6.1         Defaults. Any or all of the loans,
notes or other indebtedness of the Borrower shall, at the sole option of Bank, and notwithstanding any inconsistent provision in
any note or other instrument evidencing, governing, guarantying or securing any loans, be immediately due and payable, without
notice or demand, upon the occurrence of any of the following, (herein “Events of Default”):

 

(a)          (i) Failure by the Borrower to make due
payment of the principal of or interest on the Note prior to the same becoming delinquent in accordance with the terms thereof,
or (ii) failure by the Borrower beyond any applicable grace period with respect thereto to make due payment of any other loans
or other indebtedness, if any, due to the Bank prior to the same becoming delinquent in accordance with the terms thereof, or (iii)
failure by the Borrower beyond any applicable grace period with respect thereto to make due payment of any other fee or liability,
whether direct of contingent (under guaranty agreements, reimbursement agreements, interest rate protection agreements, account
agreements or otherwise) owing by the Borrower to the Bank, whether now existing or hereinafter incurred, whether direct or contingent,
or (iv) failure by the Borrower or Guarantor beyond any applicable grace period with respect thereto to pay any other amount due
to the Bank, including, without limitation, items which are returned, reversed, refunded or charged back for insufficient funds
or for any other reason to any account of the Borrower at the Bank; or

 

(b)         Failure of Borrower or Guarantor beyond
any applicable grace period with respect thereto to perform any covenant, act, duty or obligation, as required by this

    	21

    	 

    

 

Agreement,
any Related Agreement or the occurrence of any act restricted by this Agreement, any Related Agreement or any other agreement between
Borrower or Guarantor and the Bank beyond any grace period provided therefor, or, if no such grace period is specifically provided,
then within 30 days following such failure provided that the Borrower or Guarantor, as the case may be, has complied with the provisions
of Section 4.1 (h) hereof; or

 

(c)         If any representation and/or warranty
made by the Borrower or Guarantor to the Bank shall be untrue in any material respect when or as of the date made; or

 

(d)         Failure beyond any applicable grace period
with respect thereto of Borrower or Guarantor to furnish financial information or to permit the inspection of books or record;
or

 

(e)         Any of the following: (i) Uninsured
loss, or unauthorized sale of or encumbrance on, any material property of the Borrower or Guarantor or (ii) the issuance of
any judgment not being appealed or otherwise stayed within thirty (30) days after rendered or any levy, seizure garnishment or
injunction upon or against the Borrower or Guarantor or any property of, or any membership interest in, the Borrower or Guarantor,
or (iii) any attachment or foreign attachment upon or against the Borrower or Guarantor or any membership interest in the
Borrower or Guarantor or in any of their property that is not removed by bond or otherwise released within thirty (30) days after
the Borrower has received notice thereof; or

 

(f)         The Borrower or Guarantor shall (i) apply
for or consent to the appointment of a receiver, trustee or liquidator of all or a substantial part of any of its assets; (ii)
be unable, or admit in writing its inability, to pay its debts as they mature; (iii) file or consent to the filing of any
petition, case, arrangement, reorganization, or the like under any insolvency or bankruptcy law, or the adjudication of it as a
bankrupt, or the making of an assignment for the benefit of creditors or the consenting to any form of arrangement for the satisfaction,
settlement or delay of debt or the appointment of a receiver for all or any part of its properties; or (iv) any action shall be
taken by the Borrower or Guarantor for the purpose of effecting any of the foregoing; or

 

(g)         An order, judgment or decree shall be
entered, or a case shall be commenced, against the Borrower or Guarantor, without the application, approval or consent of the Borrower
or Guarantor by any court of competent jurisdiction, approving a petition or permitting the commencement of a case seeking reorganization
or liquidation of the Borrower or Guarantor or appointing a receiver, trustee or liquidator of the Borrower or Guarantor or of
all or a substantial part of the assets of the Borrower or Guarantor, and Borrower or Guarantor, by any act, indicates its approval
thereof, consent thereto, or acquiescence therein, or such order, judgment, decree or case shall continue unstayed (by appeal or
otherwise) and in effect for any period of sixty (60) consecutive days; or

    	22

    	 

    

 

 

(h)         The failure by the Borrower or Guarantor
to pay its debts as they mature or where the fair market value of its assets is not in excess of its liabilities, or the business
failure, appointment of a receiver, trustee, custodian or similar fiduciary, assignment for the benefit of creditors by or against
Borrower or Guarantor or the making by either Borrower or Guarantor of any offer of settlement, extension or composition to their
respective unsecured creditors generally; or

 

(i)           If the Borrower or Guarantor shall dissolve
or liquidate, or be dissolved or liquidated, or cease to legally exist, or merge or consolidate, or be merged or consolidated with
or into any other entity or corporation; or

 

(j)           Failure
by the Borrower or by Guarantor to pay any other indebtedness or obligation as and when due, or if any such other indebtedness
or obligation shall be accelerated, or if there exists any event of default under any instrument, document or agreement governing,
evidencing or securing such other indebtedness or obligation or which may cause the loss by the Borrower or Guarantor of any material
right, including, without limitation, any restriction in the Assisted Living Services Agency license of the Guarantor or other
restriction that would prevent it from operating the facility at 91 East Main Street,
Clinton, CT; or

 

(k)         If, at any time, the Bank believes in
good faith that there is a material change in the condition or affairs (financial or otherwise) of the Borrower or Guarantor that
materially impairs the Bank’s security or materially increases its risk.

  

(l)         If the Borrower or Guarantor ceases
to conduct its business as now conducted or is enjoined, restrained or in any way prevented by court, governmental or administrative
order from conducting all or any material part of its business affairs; or

 

(m)         Without the prior written permission
of Bank, any owner of any membership interest in the Borrower or in Guarantor pledges, hypothecates or otherwise grants a security
interest, or other lien, whether voluntary or involuntary, to any party in said membership interest, except as otherwise permitted
under this Agreement.

 

6.2         Remedies. Upon the occurrence
of any Event of Default, the Bank may declare the then outstanding principal balance and all interest accrued on the Note and all
applicable penalties and surcharges and the Loan and all other indebtedness or liabilities of the Borrower and/or the Guarantor
to the Bank, if any, to be forthwith due and payable, whereupon the same shall become forthwith due and payable, all of the foregoing
without presentment or demand for payment, notice of nonpayment, protest or any other notice or demand of any kind, all of which
are expressly waived by the Borrower and by Guarantor. Further, the Bank may exercise any and all remedies available to it hereunder,
under any Related Agreement, under law or at equity, without any additional notice or demand of any kind. The exercise of any remedy
shall not preclude the exercise of any other remedy, all of which may be exercised at any time.

    	23

    	 

    

 

 

6.3         Allocation of Payments. After
the occurrence of an Event of Default, Borrower and Guarantor and any other surety hereby agrees and acknowledges that the Bank
may apply and reapply any and all payments received by the Bank against any indebtedness hereunder, under the Note or under any
Related Agreement owing by Borrower or by Guarantor or other surety in such order as the Bank may elect, in its sole discretion,
notwithstanding any direction as to such application by the Borrower, such Guarantor or other surety or by any trustee in bankruptcy
or other representative of such party.

 

Section 7.      Miscellaneous

 

7.1         Waivers.

 

(a)         Borrower and Guarantor hereby waives presentment,
demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, collateral received or
delivered or other action taken in reliance hereon and all other demands and notices of any description (other than the notices
expressly required by this Agreement or any of the Related Agreements).

 

(b)         With respect to this Agreement, the Note,
the Related Agreements, the Loan and any Collateral, the Borrower and Guarantor assents to any extension or postponement of the
time of payment or any other indulgence, to any substitution, exchange or release of the collateral securing the Note or the Loan,
to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payments thereon
and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Bank may deem
advisable.

 

(c)         The Bank shall not be deemed to have waived
any of its rights upon or under the Loan or the Note unless such waiver be in writing and signed by the Bank. No delay or omission
on the part of the Bank in exercising any right shall operate as a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right on any future occasion.

 

(d)         All rights and remedies of the Bank with
respect to this Agreement, the Note, the Loan, any collateral securing the Note or the Loan, whether evidenced hereby or by any
other agreement instrument or document, shall be cumulative and may be exercised singularly or concurrently.

 

(e)          THE BANK, THE BORROWER AND GUARANTOR
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING HEREAFTER INSTITUTED BY OR AGAINST THE BORROWER IN RESPECT
OF THIS AGREEMENT, THE NOTE OR ANY RELATED AGREEMENT.

 

(f)          THE BORROWER AND GUARANTOR HEREBY ACKNOWLEDGE
THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A

    	24

    	 

    

 

PART IS A COMMERCIAL TRANSACTION, AND EACH HEREBY WAIVES ITS RIGHT TO NOTICE
AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT
TO ANY PREJUDGMENT REMEDY WHICH BANK OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

 

(g)
        (i)           The Borrower hereby gives Bank a lien and right of setoff for all its
indebtedness or liabilities due to the Bank or any affiliate of Webster Financial Corporation upon and against all the
deposits, credits, collateral and property of Borrower, now or hereafter in the possession, custody, safekeeping or control
of Bank or any affiliate of Webster Financial Corporation or in transit to any of them. Bank may, upon the occurrence of an
Event of Default hereunder or the occurrence of any event which with the giving of a notice or the lapse of time would
constitute and Event of Default, apply or set-off the same, or any part thereof, to any Loan of Borrower, even though
unmatured.

 

          (ii)     The Guarantor hereby gives Bank a
lien and right of setoff for all its indebtedness or liabilities due to the Bank or any affiliate of Webster Financial Corporation
upon and against all the deposits, credits, collateral and property of Guarantor, now or hereafter in the possession, custody,
safekeeping or control of Bank or any affiliate of Webster Financial Corporation or in transit to any of them. Bank may, upon the
occurrence of an Event of Default hereunder or the occurrence of any event which with the giving of a notice or the lapse of time
would constitute and Event of Default, apply or set-off the same, or any part thereof, to any Loan of the Guarantor, even though
unmatured.

 

(h)         The Borrower and Guarantor hereby agree
that Bank shall have the right at any time and from time to time to verify credit information supplied by the Borrower and/or Guarantor.

 

7.2         Notices. All notices, requests or
demands to or upon a party to this Agreement shall be given or made by the other party hereto in writing. Any notice to any party
shall be deemed to have been given if mailed, by certified or registered mail, postage prepaid, return receipt requested, or if
delivered by nationally recognized, overnight air courier service, return receipt requested, charges prepaid, to the Borrower or
Guarantor at the address appearing in the first paragraph of this Agreement, or at such other address as such party shall have
specified by notice to the other party.

Any notice to the Bank shall in addition, be mailed to:

Webster Bank, National Association

CityPlace II,

185 Asylum Street

Hartford, Connecticut 06103 

Attention: Manager, Health Care Division

 

with a copy to

    	25

    	 

    

 

Webster Bank, National Association

145 Bank Street

Waterbury, Connecticut 06702

Attention: General Counsel

 

Any
notice to the Borrower shall in addition, be mailed to:

NorthStar Realty Healthcare, LLC

2 Bethesda Metro Center, Suite 1300

Bethesda, MD 20814

Attn: Doug Bath, Chief Investment Officer

 

and to

 

Arent Fox LLP

1717 K Street, N.W.

Washington, DC 20036-5342

Attn: Kimberly Wachen, Esq.

Fax: (202) 857-6395

 

No other method of giving any notice, request
or demand is hereby precluded.

 

7.3         Expenses. The Borrower and Guarantor
will pay all expenses arising out of the preparation, administration, amendment, protection, collection and/or other enforcement
of this Agreement, the Related Agreements, any Collateral now or hereafter pledged or granted to secure the Loan or security interest
granted thereunder and the Note (including, without limitation, reasonable counsels’ fees).

 

7.4         Compliance. The determination
of the compliance by the Borrower and Guarantor with all covenants contained in this Agreement or the Note shall be based on the
application of generally accepted accounting principles employed as of the date of this Agreement unless otherwise subsequently
and specifically agreed to in writing by the Bank.

 

7.5         Stamp Tax. The Borrower will pay
any stamp or other tax which becomes payable in respect of the Note, this Agreement or the Related Agreements.

 

7.6         Definitions.
If used herein (a) the term “Prime Rate” shall mean the rate announced from time to time by the Bank as its Prime
Rate and does not necessarily represent the lowest or best rate being charged to any customer. If the Prime Rate shall be discontinued
or does not reflect the cost of funds of the Bank or for any other reason shall not be available for determining the Prime Rate,
then the Bank shall select a substitute method of determining the Prime Rate and shall notify the Borrower and the Guarantor of
such selection, which method shall, in Bank’s estimation, yield a rate of return to the Bank substantially equivalent to
the rate of return that the Bank would have expected to receive if the Prime Rate still had been available for that purpose; (b)
the term “Subsidiary” shall mean any corporation or other entity, a majority of whose

    	26

    	 

    

 

outstanding stock having
ordinary voting powers for the election of directors or other membership or equity interests having ordinary voting powers, shall
at any time be owned or controlled by the Borrower, Guarantor or one or more of its respective Subsidiaries; (c) the term “Guarantor”
shall mean Peregrine Way of CT, LLC and any other present or future guarantor, endorser
or surety of any obligation of the Borrower or Guarantor to the Bank; (d) the term “Affiliate” shall mean any
person, or corporation which directly or indirectly controls, or is controlled by, or is under common control with the Borrower
or Guarantor, as applicable,; and (e) “Collateral” shall mean any and all collateral now or hereafter existing
or pledged or granted to Bank by the Borrower and/or Guarantor to secure the Note or the Loan or any other indebtedness of the
Borrower or Guarantor to the Bank or any guaranty, endorsement of, or other suretyship arrangement with respect to any Note, Loan
or other indebtedness of the Borrower or Guarantor to the Bank. For purposes of Section 7.6(d) hereof, control shall be deemed
to exist if any person, entity or corporation, or combination thereof shall have possession, directly or indirectly, of the power
to direct the management or policies of the Borrower or of any person, entity, or corporation who would not otherwise be deemed
an Affiliate hereunder and shall include any holder or group of holders possessing 5% or more of any stock or other interest in
the Borrower or any Affiliate and in any person, entity or corporation, whether such holding is direct or indirect.

 

7.7         Schedules and Exhibits. Schedule
A, Schedule 2.1, Schedule2.2, Schedule 2.3, Schedule 2.6, Schedule 2.7, Schedule 2.8,
Schedule 4.2 Schedule 5.1(a) and Schedule 5.1(d) and any other Schedule and Exhibit which is attached hereto
is and shall constitute a part of this Agreement.

 

7.8         Connecticut Law. This Agreement,
the Note, the Related Agreements and any other agreement or documents relating thereto and the rights and obligations of the parties
hereunder and thereunder shall be construed and interpreted in accordance with the law of Connecticut. The Borrower and Guarantor
hereby acknowledge that the underlying transactions to which this Agreement and the Related Agreements relate concerns the making,
now or in the future of loans and advances to the Borrower and that said obligations of the Borrower and Guarantor are primarily
to be performed in the State of Connecticut. The Borrower and Guarantor agrees that the execution of this Agreement and the Related
Agreements and the rights and obligations of the parties hereunder and thereunder shall be deemed to have a Connecticut situs and
the Borrower and Guarantor shall be subject to the personal jurisdiction of the courts of the State of Connecticut with respect
to any action the Bank, its successors or assigns, may commence hereunder. Accordingly, the Borrower and Guarantor hereby specifically
and irrevocably consents to the jurisdiction of the courts of the State of Connecticut with respect to all matters concerning this
Agreement, the Related Agreements, the Note or the enforcement of any of the foregoing.

 

7.9         Survival of Representations. All
representations, warranties, covenants and agreements herein contained or made in writing in connection with this Agreement and
the security interests and rights herein contained shall survive the execution and delivery of the Note, shall continue in full
force and effect until all amounts payable on

    	27

    	 

    

 

account of the Note, the Loan, the Related Agreements and this Agreement shall have
been paid in full and this Agreement has been terminated.

 

7.10       Severability. If any provision
of this Agreement is invalid or unenforceable under applicable law, such provision is and will be totally ineffective to that extent,
but the remaining provisions of this Agreement shall be unaffected.

 

7.11       Modifications. Any modification,
consent or waiver of any provision of this Agreement shall be at the sole discretion of the party granting the same. No modification
or amendment hereof or consent to the breach of any term hereof shall be effective unless same shall be in writing and signed by
the parties hereto. A facsimile signature of any party hereto shall be deemed to be effective as an original signature of such
party.

 

7.12      Replacement Notes. Upon receipt of an affidavit
of an officer of Bank as to the loss, theft, destruction or mutilation of the Note or any other security document which is not
of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such
Note or other security document, Borrower will issue, in lieu thereof, a replacement Note or other security document in the same
principal amount thereof and otherwise of like tenor.

 

7.13       Successors and Assigns. Sales and
Participations.

 

(a)         This Agreement shall be binding upon
and shall inure to the benefit of the Borrower, the Bank and their respective successors and assigns.

 

(b)         The Bank shall have the unrestricted
right at any time or from time to time, and without Borrower’s or Guarantor’s consent, to assign all or any portion of its rights
and obligations hereunder to one or more banks or other financial institutions (each an “Assignee”), and Borrower
and Guarantor agrees that it shall execute, or cause to be executed, such documents, including without limitation, amendments to
this Agreement and to any other documents (without any substantive changes therein), instruments and agreements executed in connection
herewith as Bank shall deem necessary to effect the foregoing. In addition, at the request of Bank and any such Assignee, Borrower
shall issue one or more new promissory notes, as applicable, to any such Assignee and, if Bank has retained any of its rights and
obligations hereunder following such assignment, to Bank, which new promissory notes shall be issued in replacement of, but not
in discharge of, the liability evidenced by the promissory note held by Bank prior to such assignment and shall reflect the amount
of the respective commitments and loans held by such assignment and shall reflect the amount of the respective commitments and
loans held by such Assignee and Bank after giving effect to such assignment. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by Bank in connection with such assignment, and the payment by Assignee
of the purchase price agreed to by Bank, and such Assignee, such Assignee shall be a party to this Agreement and shall have all
of the rights and obligations of Bank hereunder (and under any and all other guaranties,

    	28

    	 

    

 

documents, instruments and agreements
executed in connection herewith) to the extent that such rights and obligations have been assigned by Bank pursuant to the assignment
documentation between Bank and such Assignee, and Bank shall be released from its obligations hereunder and thereunder to a corresponding
extent. The Borrower shall not be charged any expense incurred by the Bank with respect to any such assignment. The Bank shall
indemnify the Borrower for any payment required to be made by the Borrower by a court of competent jurisdiction as a result of
the presentment of the original promissory note for payment, provided that the Bank is afforded the right to contest and defend
any such action or suit.

 

(c)         Bank shall have the unrestricted right
at any time and from time to time, and without the consent of or notice of Borrower or Guarantor, to grant to one or more banks
or other financial institutions (each, a “Participant”) participating interests in Bank’s obligation to lend hereunder
and/or any or all of the loans held by Bank hereunder. In the event of any such grant by Bank of a participating interest to a
Participant, whether or not upon notice to Borrower, Bank shall remain responsible for the performance of its obligations hereunder
and Borrower shall continue to deal solely and directly with Bank in connection with Bank’s rights and obligations hereunder. In
furtherance of the foregoing, Bank may furnish any information concerning Borrower in its possession from time to time to prospective
Assignees and Participants, provided that Bank shall require any such prospective Assignee or Participant to agree in writing to
maintain the confidentiality of such information.

 

7.14        Counterparts. This Agreement
may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

 

7.15        Joint and Several Liability.
This Agreement shall bind jointly and severally the Borrower and Guarantor and their respective personal representatives, heirs,
successors and assigns.

 

7.16         Exculpation. Notwithstanding
anything to the contrary herein, no direct or indirect member, shareholder, partner, principal, affiliate, officer, director agent
or representative of any of the Borrower or Guarantor, shall have any personal liability for the repayment of the Note or other
amounts payable under this Agreement or any Related Agreement and no judgment shall be sought, obtained or enforced against any
such person with respect thereto.

 

7.17         Counterparts, Electronic Communications.
(a) This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute
but one and the same instrument; and

    	29

    	 

    

 

 

(b)         The Bank and the Borrower hereby agree
to the conduct of transactions by electronic means and that each hereby agrees that each will accept “electronic signatures”
(as defined in the Connecticut Uniform Electronic Transactions Act – Chapter 15 of the Connecticut General Statutes) on all
notices, certificates and communications as original signatures and entitled to full recognition as original signatures.

 

7.18       Patriot Act Notice. The Bank hereby notifies
the Borrower and Guarantor that it is subject to the U.S.A. Patriot Act (Title 111 of PUB. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”) and that pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower and other information that will allow the Bank to identify the Borrower
in accordance with the Patriot Act. The Borrower and Guarantor hereby consent to the Bank’s sharing of such information,
and all other information in the possession of the Bank, to the extent required by any law, regulation or guideline applicable
to the Bank.

 

7.19       Indemnification. In consideration
of the Bank’s execution and delivery of this Agreement and making of the Loan hereunder and in addition to all other obligations
of Borrower under this Agreement, the Borrower and Guarantor hereby agrees to defend, protect, indemnify and hold harmless the
Bank and its successors, assigns, officers, directors, employees and agents (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and
all actions, causes of action, suits, claims, actual losses, costs, penalties, fees, liabilities and actual damages and expenses
in connection therewith (irrespective of whether any such Indemnitees are a party to any action for which indemnification hereunder
is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnifiable Liabilities”) reasonably
incurred by the Indemnitees or any of them as a result of, or arising out of, or relating to (a) the execution, delivery, performance
or enforcement of this Agreement and the other Related Agreements and any instrument, document or agreement executed pursuant hereto;
(b) the Bank’s status as lender to, or creditor of, the Borrower or of Guarantor; or (c) the operation of the Borrower’s
business from and after the date hereof, provided that neither the Borrower nor Guarantor shall be required to indemnify any Indemnitee
for any Indemnifiable Liabilities resulting from such Indemnitee’s own gross negligence or willful misconduct. To the extent that
the foregoing undertaking by the Borrower or Guarantor may be unenforceable for any reason, the Borrower and Guarantor shall make
the maximum contribution to the payment and satisfaction of each of the Indemnifiable Liabilities which is permissible under applicable
law.

 

7.20        Termination of this Agreement.
Except as set forth in Section 7.19 hereof and other indemnification provisions contained in the Related Agreements, this Agreement
shall terminate upon the full and final payment of the Loan and the Note and the satisfaction of all payment and performance of
all monetary obligations of the Borrower to the Bank hereunder, under any Note or under any Related Agreement or other instrument,
agreement or document by or between the Borrower and the Bank. Notwithstanding the termination of this Agreement, the provisions
of this Agreement

    	30

    	 

    

 

shall continue to govern the rights and obligations of the parties with respect to the performance by the parties
of the agreements set forth or contemplated in this Agreement and in the Related Agreements and to any and all transactions which
were the subject of this Agreement.

 

THE BALANCE OF THIS PAGE
IS INTENTIONALLY LEFT BLANK

SIGNATURE PAGES TO FOLLOW

 

    	31

    	 

    

 

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

 

 

WEBSTER BANK, NATIONAL ASSOCIATION

 

 

By: /s/ Elizabeth B. Shelley_______

       Name: Elizabeth B. Shelley

       Its: Senior Vice President

 

 

 

[Signatures continued on next page]

    	 

    	 

    

 

 

 
	 	 	BORROWER:
	 	 	 
	 	 	NRFC CLINTON HOLDINGS, LLC
	 	 	a Delaware limited liability company
	 	 	 	 	 	 	 	 
	 	 	By:	NORTHSTAR REALTY HEALTHCARE,

LLC, a Delaware limited liability company, 

its sole member
	 	 	 	 	 	 	 	 
	 	 	 	By:	NRFC HEALTHCARE HOLDING
	 	 	 	 	COMPANY, LLC, a Delaware limited 

liability company, its sole common
member
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	NRFC SUB-REIT CORP.,
	 	 	 	 	 	a Maryland corporation, itssole member
	 	 	 	 	 	 	 	 
	 	 	 	 	 	By:	/s/ Ronald J. Lieberman
	 	 	 	 	 	 	Executive Vice President,
	 	 	 	 	 	 	General Counsel and
	 	 	 	 	 	 	Secretary

 

 

 

 

[Signatures continued on next page]

    	 

    	 

    

GUARANTOR:

 

PEREGRINE
WAY OF CT, LLC, a New York company

 

 

By:  /s/ Mark D. Farchione___________

Mark D. Farchione

Vice PresidentExhibit 10.19

 

COMMERCIAL TERM NOTE

 

	$7,875,000.00	June
    3, 2013

 

 

FOR VALUE
RECEIVED, the undersigned, NRFC CLINTON HOLDINGS, LLC, (herein called “Borrower”), a Delaware
limited liability company, having its chief executive offices and principal places of business at NorthStar Realty Finance, 399
Park Avenue, 18th floor, New York, New York 10022, Attn: Ronald J. Lieberman, Esq., Executive Vice President and General Counsel,
promises to pay to the order of WEBSTER BANK, NATIONAL ASSOCIATION (hereinafter sometimes referred to as “Holder”
or “Bank”), a national association, organized and existing under the laws of the United States of America, its successors
and assigns, at its office at 145 Bank Street, Waterbury, Connecticut, or at such other place as the Holder hereof may designate
in writing, the principal sum of SEVEN MILLION EIGHT HUNDRED SEVENTY-FIVE THOUSAND and 00/100 ($7,875,000.00) DOLLARS, together
with interest thereon as set forth below The Borrower shall also pay all taxes levied or assessed upon said sum against said payee
or the Holder of this Note (other than income taxes) and shall pay all costs, expenses and reasonable attorneys' fees (whether
or not proceedings are instituted or court appearance is made on behalf of the Holder hereof) incurred (i) in the collection of
all or part of this Note, (ii) in connection with any litigation or controversy arising from or connected with this Note or the
collateral securing this Note, or (iii) with respect to any act to protect, enforce, amend, modify or release any rights or remedies
of the Holder hereof with regard to or against the Borrower, or any endorser and/or guarantor or the collateral securing this
Note.

 

The Borrower shall use the proceeds of the advance
made hereunder for commercial purposes, provided that no part of such proceeds will be used, in whole or in part, for the
purpose of (i) acquiring any consumer or household goods or (ii) purchasing or carrying any “margin security” as such
term is defined in Regulation U of the Board of Governors of the Federal Reserve System or (iii) acquiring substantially all of
the stock or assets of any other firm, corporation or entity.

 

In the event that a payment date falls on a
day that is not a Business Day, such payment shall be due on the next Business Day.

 

The Borrower shall maintain all of its operating
accounts at the Bank.

 

In addition to the foregoing, this Note has
been executed subject to the following terms and conditions:

 

    	 

    	 

    

(1)           Repayment.

 

(a)          Repayment Schedule.
The unpaid principal balance of this Note shall be repayable as set forth on Schedule 1 attached hereto, plus accrued interest
as set forth in Paragraph 2 below on the unpaid balance, and the final payment to consist of the entire unpaid principal balance
plus accrued interest thereon. The first of said payments of principal plus interest is to be made on July 1, 2013, and the remainder
of said payments are payable on the first day of each succeeding month, with the final payment in the amount of the then entire
unpaid principal balance of this Note to be made on June 1, 2018 (the “Maturity Date”). If not sooner paid, the entire
principal balance hereof and all interest hereon shall be due and payable on the Maturity Date. In the event a payment hereunder
is due on a Saturday, Sunday or legal holiday, payment shall be due on the succeeding business day. All amounts owing under this
Note and interest thereon shall be payable in legal tender of the United States of America. The Bank is authorized, but not required,
to charge any payment due hereunder to any account of the Borrower at the Bank.

 

(b)          Evidence of Debt. The
Bank will enter an appropriate notation on its books and records evidencing the interest rate applicable to the outstanding balance
hereof, each repayment on account of the principal thereof, and the amount of interest paid. The Borrower agrees that, in the absence
of manifest error, the books and records of the Bank shall constitute prima facie evidence of the amount owing to the Bank pursuant
to this Note.

 

(2)           Interest.

 

(a)          Interest Rates, Payment
of Interest. So long as no Event of Default has occurred, each advance hereunder shall bear interest at a rate per annum equal
to the LIBOR Rate (as hereinafter defined) plus two hundred seventy-five (275) basis points for an Interest Period of one (1) month
(herein a “LIBOR Advance. Interest shall be calculated on the basis of a 360 day year and actual days elapsed and shall
be payable monthly in arrears beginning on the first (1st) day of the month following the execution of this Note and
continuing thereafter on the first day of each succeeding month, and on the last day of the Interest Period applicable thereto,
until the principal balance shall be paid in full. The Bank is authorized, but not required, to charge any payment due hereunder
to any account of the Borrower at the Bank.

 

(b)          Interest Periods. Each
Interest Period of a LIBOR Advance shall commence on the first day of each month and shall end on the last day of such month as
the Borrower may select so long as no Event of Default has occurred provided that:

 

(i)          all payment dates herein shall
be subject to and adjusted in accordance with the “Following Business Day Convention”. The Following Business Day Convention
shall mean the convention for adjusting any relevant date if it would otherwise fall on a day that is not a Business Day and provides
that, in such event, such date shall be adjusted to the first

    	 

    	 

    

 

following day that is a Business Day, except that if such
following day shall be a day in the following month, such date shall be adjusted to the immediately preceding Business Day; and

 

(ii)         any Interest Period which begins
on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period is to end,
shall (subject to clause (i) above) end on the last day of such calendar month; and

 

(iii)        any interest period which
would end after the Maturity Date shall end on the Maturity Date.

 

(3)           Additional Charges.

 

(a)          Additional Payments.
If the Bank shall deem applicable to this Note, any requirement of any law of the United States of America, any regulation, order,
interpretation, ruling, official directive or guideline (whether or not having the force of law) of the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation or any other board or governmental
or administrative agency of the United States of America which shall impose, increase, modify or make applicable thereto or cause
to be included in, any reserve, special deposit, calculation used in the computation of regulatory capital standards, assessment
or other requirement which imposes on the Bank any cost that is attributable to the maintenance hereof, then, and in each such
event, the Bank shall notify the Borrower thereof and the Borrower shall pay the Bank, within thirty (30) days of receipt of such
notice, such amount as will compensate the Bank for any such cost, which determination may be based upon the Bank's reasonable
allocation of the aggregate of such costs resulting from such events. In the event any such cost is a continuing cost, a fee payable
to the Bank may be imposed upon the Borrower periodically for so long as any such cost is deemed applicable to the Bank, in an
amount reasonably determined by the Bank to be necessary to compensate the Bank for any such cost. The determination by any Bank
of the existence and amount of any such cost shall, in the absence of manifest error, be conclusive.

 

(b)          Indemnity. Borrower
shall have the right to prepay this Note, in whole or in part, at the end of any Interest Period, without penalty of any kind.
Borrower shall have the right to prepay this Note, in whole or in part, at any other time upon payment to the Bank of a yield maintenance
fee (the “Yield Maintenance Fee”) equal to any “Net Loss” that the Bank sustains or incurs as a result of such
prepayment. As used herein, the term “Net Loss” means the present value of the interest charged by the Bank at the contract
rate on the principal amount of this Note being prepaid from the date of such prepayment until the end of the next applicable Interest
Period, less the present value of the interest (at the “Reinvestment Rate”, as defined below on the principal amount
then prepaid for the period of time from the date of prepayment until the end of the next applicable Interest Period. The “Reinvestment
Rate” means the rate available to the Bank for the investment in U.S. Treasury obligations of the principal amount prepaid
with

    	 

    	 

    

 

maturities closest to, or coterminus with, the end of
the next applicable Interest Period.

 

(c)          Application of Payments.
Any such prepayment shall be credited first to fees and expenses then due and then to interest due to the date of prepayment and
lastly to installments due hereunder in the inverse order of their maturity and shall not affect the obligation to pay the regular
installments required hereunder.

 

(d)          Late Charge. The Borrower
shall pay a “late charge” equal to five (5%) percent of any installment of principal or interest, or of any other amount
due to the Bank which is not paid within ten (10) days of the due date thereof or, in the case of the final installment due hereunder,
thirty (30) days after the Maturity Date, to defray the extra expense involved in handling such delinquent payment. The minimum
late charge shall be Fifty ($50.00) Dollars.

 

(e)          Default
Rate. Notwithstanding any provision contained in this Note to the contrary, from the date of the occurrence of any Event of
Default under this Note, whether before or after judgment has been rendered hereon and until collection in full, or after maturity
or demand for payment, interest shall accrue at the variable rate equal to the greater of (i) five (5) percentage points
in excess of the Prime Rate or (ii) five (5) percentage points per annum greater than the otherwise applicable LIBOR Rate on the
outstanding principal balance of this Note, regardless of whether or not there has been an acceleration of the payment of principal
and interest as herein set forth. Such amount shall become an additional part of the unpaid balance.

 

(f)          Expenses. Borrower further
promises to pay to the Bank, as incurred, and as an additional part of the unpaid principal balance, all reasonable costs, expenses
and reasonable attorneys' fees incurred (i) in the preparation, protection, modification, collection, defense or enforcement of
all or part of this Note or any guaranty hereof, or (ii) in the foreclosure or enforcement of any mortgage or security interest
which may now or hereafter secure either the debt hereunder or any guaranty thereof, or (iii) with respect to any action taken
to protect, defend, modify or sustain the lien of any such mortgage or security agreement, or (iv) with respect to any litigation
or controversy arising from or connected with this Note or any mortgage or security agreement or collateral which may now or hereafter
secure this Note, or (v) with respect to any act to protect, defend, modify, enforce or release any of its rights or remedies with
regard to, or otherwise effect collection of, any collateral which may now or in the future secure this Note or with regard to
or against Borrower or any endorser, guarantor or surety of this Note.

 

(4)           Basis For Determining Interest Rate Inadequate or Unfair.
In the event that the Bank shall have determined that by reason of circumstances affecting the interbank Eurodollar market, adequate
and reasonable means do not exist for determining the LIBOR Rate or Eurodollar deposits in the relevant amount and for the relevant
maturity are not available to the Bank in the interbank Eurodollar market, with respect to a proposed LIBOR Advance, the Bank shall
give the Borrower notice of such determination within one (1) Business Day. If such notice is given, then the interest rate on
any outstanding LIBOR Advances shall be converted to the Prime Rate on the last Business Day of the then

    	 

    	 

    

 

current Interest Period. Until such notice has been withdrawn, the
Bank shall have no obligation to make LIBOR Advances or maintain outstanding LIBOR Advances and the Borrower shall not have the
right to borrow at the LIBOR Rate.

 

(5)           Definitions.

 

(a)          “Business Day” shall
mean any day on which commercial banks are open for domestic and international business including dealings in Dollar deposits in
London, England and New York, New York and Hartford, Connecticut but excluding any date on which such commercial banks are required
or permitted by law to close.

 

(b)          “Interest Period”
with respect to any LIBOR Advance shall mean a one (1) month period commencing on the first day of each month and ending on the
last day of the applicable month, subject to the provisions of Paragraph 2 (b) hereof,

 

(c)          “LIBOR Advance” shall
have the meaning set forth in paragraph 2 (a) hereof.

 

(d)          “LIBOR Rate” shall
mean the rate quoted by the Bank two (2) Business Days prior to an Interest Period for the offering by the Bank to prime commercial
banks in the inter-bank Eurodollar market of dollar deposits for a period equal to the Interest Period and in an amount equal to
the requested advance. Such LIBOR Rate shall be increased by the maximum marginal reserve percentage as prescribed by the Board
of Governors of the Federal Reserve System for determining the reserve requirement for Webster Bank, National Association for Eurodollar
deposits having a maturity equal to the Interest Period. If the LIBOR Rate shall be discontinued or does not reflect the cost of
funds of the Holder or for any other reason shall not be available for determining the LIBOR Rate, then Holder shall select a substitute
method of determining the LIBOR Rate and shall notify Borrower of such selection, which method shall, in Holder's reasonable estimation,
yield a rate of return to Holder substantially equivalent to the rate of return that Holder would have expected to receive if the
LIBOR Rate still had been available for that purpose.

 

(e)          “Prime Rate” shall
mean the interest rate announced from day to day by Webster Bank, National Association as its Prime Rate. The Prime Rate is not
necessarily the lowest or most favorable lending rate that the Bank charges its customers. Any change in the interest rate under
this Note resulting from a change in the Prime Rate shall become effective immediately upon the date on which such change in the
Prime Rate shall be adopted by the Holder hereof. If the Prime Rate shall be discontinued or does not reflect the cost of funds
of the Holder or for any other reason shall not be available for determining the Prime Rate, then Holder shall select a substitute
method of determining the Prime Rate and shall notify Borrower of such selection, which method shall, in Holder's reasonable estimation,
yield a rate of return to Holder substantially equivalent to the rate of return that Holder would have expected to receive if the
Prime Rate still had been available for that purpose.

 

    	 

    	 

    

(6)           Optional Prepayment.

 

(a)          The Borrower may prepay any
LIBOR Advance in whole or in part from time to time, without premium or penalty but with accrued interest on the principal being
prepaid to the date of such repayment only on the last Business Day of the then current Interest Period with respect thereto.
In the event that any prepayment of a LIBOR Advance is required or permitted on a date other than the last Business Day of the
then current Interest Period with respect thereto the Borrower shall indemnify the Bank therefor in accordance with paragraph 3
hereof.

 

(b)          All such prepayments shall
be applied first to fees and expenses then due hereunder, then to interest on the unpaid principal balance accrued to the date
of prepayment and last to the principal balance then due thereunder in the inverse order of principal installments due and shall
not excuse the payment of any regularly scheduled installment.

 

(7)           Incorporation
of Loan Agreement, Guaranty. This Note is governed by and is subject to all of the terms of a Commercial Loan Agreement dated
of even date herewith (the “Loan Agreement”) between the Borrower and Webster Bank, National Association which is incorporated
herein by reference and sets forth additional obligations of the Borrower and rights, including acceleration rights, of Webster
Bank, National Association. This Note is entitled to the benefits of a Guaranty Agreement executed by PEREGRINE WAY OF
CT, LLC and any present or future endorser, guarantor or surety of any obligation of the Borrower to the Bank (herein each
a “Guarantor” and collectively the “Guarantors”).

 

(8)           Events of Default. Each of the following shall constitute
an “Event of Default” hereunder:

 

(a)          Failure by Borrower to pay
or perform any of its liabilities or obligations to Bank (whether under this Note, the Loan Agreement, or any other note, guaranty,
document, instrument or agreement evidencing, securing or governing any obligation of the Borrower under any note or guaranty or
otherwise) when due to be paid or performed after giving effect to any applicable grace or cure period set forth in this Note or
in any other Related Agreement (as defined in the Loan Agreement); or

 

(b)          Failure by Borrower to comply
with the terms of, or the occurrence of default under, this Note, the Loan Agreement or any Related Agreement, or under any other
mortgage, pledge or security agreement or other agreement or document which may now or hereafter govern, evidence or secure this
Note or any guaranty of this Note, beyond any applicable grace or cure period, or if any Guarantor shall fail to comply with the
terms of his Guaranty Agreement; or

 

(c)          If there occurs any material
uninsured loss of any collateral which may now or hereafter secure this Note or to a material portion of the property or assets
of the Borrower;

    	 

    	 

    

 

(d)          If, at any time, the Bank believes
in good faith that there is a material change in the condition or affairs (financial or otherwise) of the Borrower or Guarantor
that materially impairs the Bank’s security or materially increases its risk.

 

(e)          The occurrence of any default
in the payment of principal or interest on any material obligation for borrowed money beyond any grace period provided with respect
thereto, the effect of which default is to cause or permit the holder of such obligation to accelerate such obligation so that
it is or may become due and payable immediately or prior to its date of maturity.

 

(9)           Acceleration. Upon the occurrence of any Event of
Default hereunder which has not been cured or waived), all amounts outstanding hereunder, together with accrued interest thereon
and charges incurred with respect thereto, shall become immediately due and payable, at the option of the Bank and any obligation
of the Bank to advance hereunder shall terminate, all without demand, presentment, protest or notice of any kind, all of which
are hereby waived by the Borrower.

 

(10)          Set-off. Upon the occurrence of an Event of Default
hereunder, the Bank is hereby authorized at any time from time to time, without notice to the Borrower (any such notice being expressly
waived by the Borrower) to set-off and apply any and all deposits (general or special, time or demand, provisional or final), credits,
collateral and property at any time held by, in transit to or in the safekeeping, custody or control of, the Bank or any entity
under the control of Webster Financial Corporation (and shall include any other obligation at any time owing by the Bank or any
entity under the control of Webster Financial Corporation to or for the credit or the account of the Borrower) against any and
all of the obligations of the Borrower now or hereafter existing hereunder, irrespective of whether or not the Bank shall have
made any demand hereunder and although such obligations may be contingent and unmatured.

 

(11)          Rights of Bank. In addition to any rights the Bank
may have hereunder or under any other instrument, document or agreement which may now or hereafter evidence, govern or secure this
Note, the Bank shall have all the rights of a creditor under the laws of the State of Connecticut and the case law interpreting
the same. Nothing contained herein shall be construed as limited or restricting any rights the Bank may have, whether statutory
or otherwise, including, without limitation, all rights of set-off as may exist under law.

 

(13)          Patriot Act Notice. The Bank hereby notifies the
Borrower that it is subject to the U.S.A. Patriot Act (Title 111 of PUB. L. 107-56 ) (the “Patriot Act”) and that pursuant
to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower and
other information that will allow the Bank to identify the Borrowers in accordance with the Patriot Act. The Borrower hereby consents
to the Bank’s sharing of such information, and all other information in the possession of the Bank, to the extent required
by any law, regulation or guideline applicable to the Bank.

 

(14)          PREJUDGMENT REMEDY WAIVER. BORROWER HEREBY WAIVES
THE RIGHT IT MAY HAVE TO PRIOR NOTICE OF AND A HEARING ON THE RIGHT OF ANY HOLDER OF THIS NOTE TO A PREJUDGMENT REMEDY, WHICH REMEDY
ENABLES SAID HOLDER BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT

    	 

    	 

    

 

OR REPLEVIN TO DEPRIVE ANY OF THEM OF, OR AFFECT THE USE, POSSESSION
OR ENJOYMENT BY ANY OF THEM OF, ANY OF THEIR PROPERTY AT ANY TIME PRIOR TO JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION
WITH THIS NOTE.

 

(15)          WAIVER OF TRIAL BY JURY. BORROWER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING HEREAFTER INSTITUTED BY OR AGAINST BORROWER IN RESPECT OF THIS NOTE OR ANY
GUARANTY OR ENDORSEMENT OF THIS NOTE.

 

(16)          Waivers. The Borrower hereby waives presentment for
payment, protest and notice of dishonor, and hereby agrees to any extension or delay in the time for payment or enforcement, to
renewal of this Note and to any substitution or release of any collateral, all without notice and without any affect on its liabilities.
Any delay on the part of the Holder hereof in exercising any right hereunder or under any mortgage or security agreement which
may secure this Note shall not operate as a waiver. The rights and remedies of the Holder hereof shall be cumulative and not in
the alternative, and shall include all rights and remedies granted herein, in any document referred to herein, and under all applicable
laws. The provisions of this Note shall bind the heirs, executors, administrators, assigns and successors of Borrower and shall
inure to the benefit of Bank, its successors and assigns.

 

(17)          Acknowledgement of Copy, Authorization. Borrower
acknowledges receipt of a copy of this Note. The Bank is hereby authorized, but not required, to charge any amount due under this
Note to any account of the Borrower at the Bank.

 

(18)          Connecticut Law. This Note and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with the law of Connecticut.

 

(19)          Severability. If any provision of this Note is deemed
void, invalid or unenforceable under applicable law, such provision is and will be deemed to be totally ineffective to that extent,
but the remaining provisions shall be deemed unaffected and shall remain in full force and effect to the fullest extent consistent
with applicable law.

 

(20)          Survival. The obligations of the Borrower under Paragraph
3 shall survive the payment of this Note.

 

(21)          Usury Savings Clause. No payment of interest or
other consideration made or agreed to be made by Borrower pursuant to this Note or any other instrument referring to or securing
this Note shall, at any time, be deemed to have been computed at an interest rate in excess of the maximum rate of interest permissible
by law, if any. In the event such payments of interest or other consideration provided for in this Note or any other instrument
referring to or securing this Note shall result in payment of an effective rate of interest which, for any period of time, is in
excess of the limit of the usury law or any other law applicable to the loan evidenced hereby, all sums in excess of those lawfully
collectible as interest for the period in question shall, without further agreement or notice between or by any party or parties
hereto, be applied to the principal balance immediately upon receipt of such monies by Bank with the same force and effect as though
Borrower had specifically designated, and Bank had agreed to accept, such extra payments as a

    	 

    	 

    

 

principal payment, without premium or penalty. If the principal
balance has been fully paid, any such excess amount shall be refunded to Borrower. This provision shall control over every other
obligation of Borrower hereunder and under the Loan Documents.

 

(22)          Exculpation. Notwithstanding anything to the contrary
herein, no direct or indirect member, shareholder, partner, principal, affiliate, officer, director agent or representative of
the Borrower shall have any personal liability for the repayment of the indebtedness evidenced by this Note and no judgment shall
be sought, obtained or enforced against any such person with respect thereto.

 

 

THE BALANCE OF THIS PAGE
IS INTENTIONALLY LEFT BLANK

SIGNATURE PAGES TO FOLLOW

 

    	 

    	 

    

IN
WITNESS WHEREOF, NRFC CLINTON HOLDINGS, LLC has hereunto set its hand and seal as of this 3rd day of June,
2013.

 

 

	 	NRFC
CLINTON HOLDINGS, LLC,
	 	 	A Delaware limited liability company
	 	 	 	 	 	 	 	 
	 	 	By:	NORTHSTAR REALTY HEALTHCARE,
LLC,
	 	 	 	a Delaware limited liability company
	 	 	 	 	 	 	 	 
	 	 	 	By:	NRFC HEALTHCARE HOLDING
	 	 	 	 	COMPANY, LLC,
	 	 	 	 	a Delaware limited liability company
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	NRFC SUB-REIT CORP.,
	 	 	 	 	 	a Maryland corporation
	 	 	 	 	 	 	 	 
	 	 	 	 	 	By:	/s/ Ronald J. Lieberman
	 	 	 	 	 	 	Executive Vice President,
	 	 	 	 	 	 	General Counsel and
	 	 	 	 	 	 	Secretary

    	Signature Page to Commercial Term Note

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