Document:

EX-10.8

 Exhibit 10.8 

MANAGEMENT SERVICES AGREEMENT 
 by
and between 
 INTEGRATED SENIOR LIVING LLC 

(Management Company) 
 and 

CHP RAIDER RANCH TX TENANT CORP. 

(Tenant) 
 THE CLUB AT RAIDER RANCH

 THE ISLE AT RAIDER RANCH 

Lubbock, Texas 
 August 19,
2013 

 MANAGEMENT SERVICES AGREEMENT 

THIS MANAGEMENT SERVICES AGREEMENT, is made as of the 19th day of August, 2013 (the “Effective Date”) by and between CHP
Raider Ranch TX Tenant Corp., a Delaware corporation (“Tenant”), and Integrated Senior Living LLC, a Texas limited liability company (hereinafter “Management Company”). 

WITNESSETH: 

WHEREAS, CHP Partners, LP (“CHP”) entered into a Purchase and Sale Agreement with RR AL Care Group Limited Partnership and RR
IL Care Group Limited Partnership, dated as of July 3rd, 2013 (the “Purchase and Sale Agreement”), which shall be assigned by CHP to CHP Raider Ranch TX Owner, LLC (“Landlord”), pursuant to which Landlord shall acquire fee
title to that certain independent living facility known as “The Club at Raider Ranch” located at 6548 43rd Street, Lubbock, Texas 79407 and the adjacent assisted living facility known as
“The Isle at Raider Ranch” located at 6548 43rd Street, Lubbock, Texas 79407 (collectively, the “Facility”); and 

WHEREAS, Tenant and Landlord have entered into, or prior to the Commencement Date shall enter into, a lease agreement with respect to
the Facility; 
 WHEREAS, Tenant wishes to engage Management Company, and Management Company wishes to provide certain services to
Tenant during the term of this Agreement from and after the Commencement Date, as hereinafter defined, relating to the management of the Facility, on the terms and conditions set forth herein; 

NOW, THEREFORE, the parties hereto, intending to be legally bound, in consideration of the mutual provisions and covenants herein
contained, agree as follows: 
 ARTICLE 1. 

1.1 Definitions. The following terms shall have the meanings set forth below when capitalized herein: 

“Adjusted NOI” means an amount equal to NOI less the FF&E Reserve Payment. 

“Administrator” means such individual employed by Management Company, at the expense of the Facility as an Operating Expense.
The Administrator will be under the direct supervision of the Management Company, who is responsible for the daily management of the Facility. 

“Affiliate” means the following meaning: two entities are “Affiliates” if 

(a) one of the entities is a Subsidiary of the other entity; 

(b) both of the entities are Subsidiaries of the same entity; or 

(c) both of the entities are Controlled by the same Person. 

  
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 “Affiliated Agreement” means that certain Management Services Agreement by and
between Manager and CHP Town Village OK Tenant Corp. dated of even date herewith. 
 “Agreement” means this Management
Services Agreement, together with any amendments hereto entered into by the parties from time to time. 
 “Budget” shall
have the meaning set forth in Section 2.5. 
 “Business Day” means any day other than a Saturday, Sunday or
legal holiday in the State of Texas. 
 “Capital Expenditures” means certain expenses for renovations, replacements,
maintenance, alterations, improvements or renewals to the Facility that are typically classified as capital expenditures in accordance with GAAP; provided however, the parties acknowledge and agree that unit turnover costs shall not be deemed to be
Capital Expenditures. 
 “Commencement Date” means the date Landlord acquires title to the Facility pursuant to the
Purchase and Sale Agreement. 
 “Control” means: 

(a) the right to exercise, directly or indirectly, a majority of the votes which may be voted at a meeting of (i) the shareholders of the
corporation, in the case of a corporation, (ii) the shareholders of the general partner, in the case of a limited partnership, or (iii) the equity holders or other voting participants of a Person that is not a corporation or limited
partnership; or 
 (b) the right to elect or appoint, directly or indirectly, a majority of (i) the directors of the corporation, in
the case of a corporation, (ii) the directors of the general partner, in the case of a limited partnership, or (iii) a majority of the Persons who have the right to manage or supervise the management of the affairs and business of a Person
that is not a corporation or limited partnership, 
 (c) and “Controlled” has a corresponding meaning. 

“Effective Date” shall have the meaning set forth in the first paragraph of this Agreement. 

“Emergency and Evacuation Procedures” shall have the meaning set forth in Section 2.4. 

“Facility” shall have the meaning set forth in the recitals. For the avoidance of doubt, the entire swimming pool related to
the Club at Raider Ranch shall constitute a part of the Facility, notwithstanding that a portion of the swimming pool is located on land owned by an affiliate of Landlord. 

“Facility Mortgage” means any mortgage or deed of trust secured by the Facility. 

“Fiscal Year” means each calendar year during the Term. The period from the Commencement Date through December 31, 2013
shall be the first Fiscal Year. 

  
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 “Fixed Asset Supplies” means supply items necessary for the operation of the
Facility. 
 “FF&E Reserve” shall have the meaning set forth in Section 2.7. 

“FF&E Reserve Payment” means the amount equal to $500 multiplied by the total number of rental units on an annual basis
(but prorated for any partial Fiscal Year during the Term), and increasing on each Increase Date by three percent (3%) over the FF&E Reserve Payment for the prior year, and as may be further adjusted by Tenant and Management Company in
connection with the required amounts set forth in the approved Budget pursuant to the terms of Section 2.5. 

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

“HIPAA” shall have the meaning set forth in Section 8.12. 

“Increase Date” means October 1 of each Fiscal Year, with the first Increase Date being October 1, 2014. 

“Inventories” means inventories as defined by GAAP and provisions in storerooms, medical supplies, other merchandise intended
for sale, mechanical supplies, stationery and other expenses, supplies and similar items. 
 “Landlord” shall have the
meaning set forth in the recitals. 
 “Legal Requirements” means any (i) law, code, rule, ordinance or regulation
applicable to Tenant, Management Company and/or the Facility or the operation thereof; (ii) any order of any governmental authority having jurisdiction over Tenant, Management Company and/or the Facility or the operation thereof; and
(iii) any law, code, rule, regulation, bulletin, decision, ruling or opinion applicable to reimbursement by Medicare, Medicaid or any other governmental healthcare program for services or items rendered by the Facility. 

“Licenses” shall have the meaning set forth in Section 2.2. 

“Management Company” shall have the meaning set forth in the recitals. 

“Management Company Default” shall have the meaning set forth in Section 7.1. 

“Management Company Expenses” shall mean those expenses that unless otherwise approved as a part of the Budget, or
otherwise approved by Tenant, that shall be paid by Management Company, without reimbursement by Tenant: 
 (i) any expenses
for Management Company’s corporate office physical plant, equipment or supplies; 
 (ii) any overhead expense of
Management Company incurred in its general offices or salaries of any non-Facility specific executive personnel of Management Company, but excluding Management Company personnel allocated to initiatives for the Facility such as additional marketing
or special capital projects as contained in the Budget or approved in writing by the Tenant; 

  
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 (iii) salaries, wages, and expenses allocable to any personnel for activities
with regard to providing in-house accounting services; 
 (iv) any salaries, wages, and expenses for any corporate office
personnel located at the Facility; 
 (v) any computer time, equipment, payroll processing service or other expense used or
incurred in processing payroll as such expense relates to non-Facility specific Management Company personnel employed by the Management Company, the books and records of the Facility or in preparing any statements or reports (other than the annual
audits, tax returns and/or specialized reports required by outside agencies). Payroll processing charges relating to Management Company personnel who are employed at the Facility will be the responsibility of the Tenant. 

“Management Company Losses” shall have the meaning set forth in Section 8.1. 

“Management Fee” shall have the meaning set forth in Section 3.1. 

“Mortgagee” means the holder of any Facility Mortgage. 

“NOI” means Revenues less Operating Expenses. 

“Operating Account” shall have the meaning set forth in Section 2.7(a). 

“Operating Expenses” means any or all, as the context requires, of the following: (i) all costs and expenses incurred in
connection with the operation, management and maintenance of the Facility, including, without limitation, all administrative, financial reporting, and general expenses, expenses relating to employment of employees at the Facility (“at
cost” with no additional fee or mark-up including salaries, payroll taxes, benefits, cost of payroll, etc); (ii) advertising and business promotion expenses; (iv) Management Fees; (v) the cost of Inventories and Fixed Asset
Supplies consumed in the operation of the Facility; (vi) costs and expenses for preparation of claims and billing submissions and collection of Receivables and other monies; (vii) insurance costs; (viii) all real property and personal
property taxes and assessments; (ix) those costs and expenses that are expressly identified as Operating Expenses in this Agreement; (x) budgeted costs related to accounting software fees and Management Company’s server utilization
fees; (xi) costs incurred to prepare a unit for an incoming resident; (xiii) costs of maintenance and repairs not included in Capital Expenditures; (xiv) food; (xv) cost of compliance with Legal Requirements; (xvi) expenses
related to the provision of services including, except to the extent billed directly to the Resident, home health services; and (xvii) any other non capital costs and expenses incurred in connection with the operation of the Facility or as are
specifically provided for elsewhere in this Agreement. Operating Expenses shall not include any Management Company Expenses or deductions for interest for property debt service, or depreciation or amortization, income, taxes, franchise taxes or
similar taxes, or rent payable from Tenant to Landlord pursuant to the lease for the Facility, or costs relating to the Landlord’s or Tenant’s ownership structure (all of which shall be paid directly by Landlord or Tenant, as the case may
be). 

  
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 “Performance Threshold” means Three Million Six Hundred Nineteen Thousand Five
Hundred Twenty-Eight and No/100 Dollars ($3,619,528.00) during each Fiscal Year (and prorated for any partial Fiscal Year) during the Term, and increasing on each Increase Date by three percent (3%) over the previous year. 

“Person” means any natural person, firm, corporation, general or limited partnership, limited liability company, association,
joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity. 

“Purchase and Sale Agreement” shall have the meaning set forth in the recitals. 

“Receivables” shall mean all billed and unbilled accounts receivable, trade receivables, work in progress, notes receivable
and other receivables arising out of or related to the Facility. 
 “Revenues” means, for the applicable period of time,
but without duplication, all gross revenues and receipts of every kind derived by or for the benefit of Tenant, Management Company or their affiliates from operating or causing the operation of the Facility and all departments and parts thereof,
determined in accordance with GAAP for each accounting period (with the exception of any pass-through fees), including, but not limited to: income from both cash and credit transactions (after reasonable deductions for rent concessions or rebates
given, paid or returned in ordinary course of obtaining Revenues, bad debt allowance, discounts for prompt or cash payments, refunds and credit card payment fees) from rental or subleasing of every kind; community fees; monthly occupancy fees;
healthcare fees and ancillary service fees received pursuant to various agreements with residents of the Facility; license, lease and concession fees and rentals, off premises catering, if any, and parking; income from vending machines; proceeds, if
any, from business interruption (but only to the extent it reimburses Tenant for lost income and not for additional or other expenses) or other loss of income insurance; club membership fees; income from food and beverage and catering sales;
wholesale and retail sales of merchandise (other than proceeds from the sale of furnishings, fixtures and equipment no longer necessary to the operation of the Facility); and service charges, to the extent not distributed to Facility employees as
gratuities; all determined in accordance with GAAP; provided, however, that Revenues shall not include the following: (i) management fees or reimbursements paid by Tenant to Management Company pursuant to this Agreement; (ii) gross
receipts of revenue generated by lessees, sublessees, licensees or concessionaires and not paid to Tenant, Management Company or their affiliates; (iii) gratuities to Facility employees; (iv) federal, state or municipal excise, sales,
occupancy, use or similar taxes collected directly from residents or guests of the Facility or included as part of the sales price of any goods or services; (v) proceeds of any insurance policy (except for loss of income insurance as provided
above) or condemnation or other taking; (vi) any proceeds from any sale of the Facility or any other capital transaction; (vii) proceeds of any financing or refinancing of any debt encumbering the Facility or any portion thereof; (viii);
proceeds from the disposition of furnishings, fixtures and equipment or any capital asset no longer necessary for the operation of the Facility; (ix) interest received or accrued with respect to amounts deposited in any operating or reserve
accounts of the Facility; (x) security deposits until such time as the same are applied to current 

  
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fees due for services rendered for the Facility; (xi) awards of damages, settlement proceeds and other payments received by Tenant in respect of any litigation other than litigation to
collect fees due for services rendered from the Facility or otherwise compensating Tenant or Landlord for lost revenue; and (xii) payments under any policy of title insurance. Any community fees or deposits or other amounts that are refunded to
a resident shall be credited against Revenues during the month in which such refunds are made, if previously included in Revenues. 

“Subsidiary” means, in respect of any Person: 

(a) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect the majority of the board of
directors of such corporation is at the time directly or indirectly owned by (i) such Person, (ii) such Person and one or more subsidiaries of such Person, or (iii) one or more subsidiaries of such Person; or 

(b) any limited or general partnership, joint venture, limited liability company or other entity as to which (i) such Person,
(ii) such Person and one or more of its subsidiaries, or (iii) one or more subsidiaries of such Person owns, more than a 50% ownership, equity or similar interest or has power to direct or cause the direction of management and policies, or
the power to elect the general partner or managing partner (or equivalent thereof), of such limited or general partnership, joint venture, limited liability company or other entity, as the case may be. 

“Tenant” shall have the meaning set forth in the first paragraph of this Agreement. 

“Tenant Default” shall have the meaning set forth in Section 7.2. 

“Tenant Losses” shall have the meaning set forth in Section 8.2. 

“Term” shall have the meaning set forth in Section 2.1. 

1.2 Recitals. The recitals set forth above are hereby incorporated as if set forth herein in their entirety. 

ARTICLE 2. 
 OPERATING
TERMS AND APPOINTMENT AND EMPLOYMENT OF 
 MANAGEMENT COMPANY AS AGENT AND GENERAL MANAGEMENT COMPANY 

OF THE FACILITY 
 2.1
Term. The term of this Agreement shall commence on the Commencement Date and shall continue for a period of five (5) years thereafter subject to earlier termination as set forth in Article 7 hereof (the “Term”). 

2.2 Employment of Management Company. Tenant hereby appoints Management Company as the sole and exclusive manager of the
Facility and subject to Tenant’s ultimate responsibilities as the holder of the Licenses (as defined below) and in accordance with all Legal Requirements, Management Company agrees to act as the manager of the Facility. In connection therewith,
Management Company shall supervise, direct and control the day to day business activities and management of the Facility and all phases of its management in the name of and on 

  
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behalf of Tenant upon the terms and conditions hereinafter stated. Management Company shall be responsible for managing the Facility in a professional, competent and business-like manner, in
material compliance with all Legal Requirements and the terms and provisions of this Agreement. Management Company shall, subject to compliance of Tenant with its obligations hereunder, do all things as may be reasonably required to maintain and
preserve all necessary licenses, permits, authorizations, certifications and approvals to operate the Facility so as to comply with all applicable Legal Requirements (collectively, the “Licenses”); provided, however, and notwithstanding
any other provisions of this Agreement to the contrary, Management Company shall not be required to expend its own funds in performing any of its obligations herein other than general company matters of Management Company that would be a cost of
doing business of Management Company even if this Agreement did not exist (such as maintaining its limited liability company status in Texas, etc.) Except as provided for herein, Management Company makes no warranties, express or implied, and shall
not assume any financial or other responsibilities in connection with its obligations hereunder and shall not be obligated to contribute its own funds in connection with the management of the Facility. 

2.3 Retention of Legal Ownership by Tenant. Tenant shall at all times continue to exercise legal ownership and control over the
assets and operations of the Facility, and Management Company shall perform its responsibilities as described in this Agreement as agent to Tenant in accordance with written policies and directives adopted by Tenant. By entering into this Agreement,
Tenant does not delegate to Management Company any of the powers, duties, and responsibilities vested in the Tenant by Legal Requirements, or by its Articles of Organization or Operating Agreement. Management Company will propose written policies
and directives from time to time for adoption by the Tenant. Tenant, may, according to the terms of this Agreement (i) direct Management Company to implement existing policies and procedures at the Facility as approved by Management Company,
(ii) consent to the adoption of policies and procedures at the Facility recommended by Management Company, or (iii) adopt as the policies and procedures of the Facility the Tenant’s own proposals as approved by Management Company,
subject to any limitations stated herein. Whenever this Agreement calls for the approval of Tenant, such approval shall be expressed in writing, which may be by email, and executed by a duly authorized officer of Tenant. In the absence of any
requirement for Tenant consent, then Management Company shall be entitled, to the extent permitted by Legal Requirements, to rely upon its business judgment, consistent with the terms of this Agreement and the Budget, and act accordingly as agent
for the Tenant. Notwithstanding anything herein to the contrary, Tenant shall have all the requisite power and authority to operate the Facility as required by Legal Requirements. 

2.4 Management Services to be Provided by Management Company. During the Term, Management Company shall, as agent and on behalf
of Tenant, manage all aspects of the day-to-day operation of the Facility. Management Company shall act in good faith and use its best reasonable efforts to perform its obligations hereunder. In connection therewith, to the extent permitted by Legal
Requirements and in accordance with the Budget, Management Company (either directly or through supervision of Management Company employees at the Facility): 
  

	 	(a)	 Select, employ, supervise, train and discharge as Facility employees, an adequate staff of housekeepers, maintenance, food service, activity, office
and other employees, including an Administrator (who may be replaced, 

  
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from time to time), and promote, direct, assign and discharge all such employees at Management Company’s sole discretion. All costs and expenses relating to Facility employees, including
compensation and benefits, shall constitute an Operating Expense to be paid or reimbursed at Management Company’s cost, without additional mark-up. Management Company shall provide for and maintain a basic employee training and testing program
with objective standards for all categories of employees which meets or exceeds all governmental and industry requirements for minimum levels of training and degrees of experience, all as specified in the employee, operating procedure or other
similar manual for the Facility, and will provide at least the State of Texas minimum required level of staffing for all categories of employees. Management Company shall provide for and maintain fidelity bonds and other appropriate protections with
respect to any person with access to funds belonging to the Facility. 

  

	 	(b)	Establish general salary scales, personnel policies and appropriate employee benefits for all Management Company employees. Employee benefits may include insurance benefits, incentive plans for key employees, and
holiday, vacation, personal leave and sick leave policy, consistent with the current policies of the Management Company; 

  

	 	(c)	Issue appropriate bills for services and materials furnished by the Facility and use its commercially reasonable efforts to collect Receivables and monies owed to the Facility; design and maintain customary accounting,
billing, resident and collection records; and prepare and file insurance, and any and all other necessary or desirable applications, reports and claims related to revenue production. All rates for services provided by Tenant and for the use of the
Facility, and any changes therein, shall be subject to approval through the Budget. Tenant expressly assigns, to the extent permitted by Legal Requirements, to Management Company the full right, power and authority as its agent to administer,
process and collect on Tenant’s behalf and in its name, all Receivables and monies owed to the Facility. Any and all refunds, volume discounts, rebates, reduced rates for timely payment, or other benefits derived from business done at, on or
through the Facility shall be credited to Tenant and not to Management Company; 

  

	 	(d)	Plan, supervise and conduct a program of regular maintenance and repair of the Facility. Management Company shall not make any additions to the Facility increasing or decreasing the square foot area, unit count, or
licensed bed capacity, without the prior written approval of Tenant. Management Company shall maintain a maintenance log of all repairs, replacements or improvements made to the Facility which are capitalized under generally accepted accounting
principles; 

  
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	 	(e)	Provide directly, or through contracts, all necessary services, food, beverages, cleaning and other supplies, equipment, furniture and furnishings for the operation and maintenance of for the account of Tenant. Unless
the consent of Tenant is otherwise obtained, all contracts or agreements entered into by Management Company for the account of the Tenant shall be for a term of one (1) year or less (unless for an amount of less than $10,000 in expected annual
compensation for certain contracts that customarily have a term of more than one year (such as elevator maintenance contracts)) and be less than $25,000 (or $50,000, provided such contract may be terminated by Tenant without fee or penalty upon no
more than thirty (30) days notice) in expected annual compensation, and shall provide for payments within the then current Budget. To the extent permitted by Legal Requirements and the terms offered by vendors, Management Company will offer to
the Facility the opportunity to participate in any group or volume purchasing contracts in which the Management Company may from time to time participate wherein such participation by the Facility, in the sole opinion of Management Company, is
deemed to be appropriate and practical, provided that if any such group or volume purchasing contract provides for an administrative fee payable to Management Company or its Affiliates, (i) such administrative fee shall be first disclosed to
Tenant before the Facility participates in such contract and (ii) Tenant shall have the right to disapprove the Facility’s participation in such contract. The Facility shall receive, pro rata if applicable, the financial benefits of any
purchasing contract concessions, discounts or rebates with respect to any such contracts in which it participates. Any contracts, the expense of which is not provided for in the Budget, will be subject to the approval of the Tenant.

  

	 	(f)	Administer, supervise and schedule resident and other services of the Facility as required under any residency agreement, including the provision of food, and other ancillary services; 

 

	 	(g)	Provide for the orderly payment of accounts payable, employee payroll, taxes, insurance premiums and all other customary obligations of the Facility, and timely file all applicable sales tax and/or personal property tax
returns for the Facility; 

  

	 	(h)	Institute standards and procedures for admitting and discharging residents, for charging residents for services and for collecting the charges from residents or third parties; 

 

	 	(i)	Furnish to the Facility any and all policy manuals needed for the operation of the Facility and propose revisions to said policy manuals as is needed from time to time to assure, to the best of Management Company’s
ability, that the Facility complies with all applicable Legal Requirements, provided that the foregoing does not constitute a guaranty of such compliance by Management Company. All manuals, procedures, guidelines, work product, and other materials
generated by Management Company, however, are and shall remain the physical and intellectual property of Management Company and shall remain the exclusive property of Management Company even upon the expiration or termination of this Agreement;

  
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	 	(j)	If requested by Tenant, procure, to the extent commercially available, the insurance set forth in Article 5 and Exhibit A or as may be required from time to time by a Mortgagee. 

 

	 	(k)	Negotiate and enter into, in the name of and on behalf of Tenant, such agreements, contracts and orders on a competitive price basis as it may deem necessary or advisable for the furnishing of services, concessions and
supplies for the operation and maintenance of the Facility, subject to the limitations set forth in Section 2.4(e). 

  

	 	(l)	Handle and settle all employee relations matters, provided however, that except as may be required by any Legal Requirements, without the prior participation and consent of Tenant, which may be withheld in its sole and
absolute discretion, Management Company shall not contact, recognize, initiate or respond formally to communication with any organized labor union regarding the Facility by any means including, without limitation, execution of any instrument which
recognizes any labor union with respect to Facility employees, any collective bargaining agreement, neutrality or any labor contract resulting therefrom non-voluntarily agree to collectively bargain with employees in any proposed bargaining unit at
the Facility; 

  

	 	(m)	Assist Tenant in obtaining or maintaining Licenses required by Legal Requirements for the operation of the Facility; 

  

	 	(n)	Maintain an accounting and internal control system using accounts and classifications consistent with those used in similar communities and as may be directed by Tenant from time to time, including suitable books and
records of control and accounts as are necessary or required in order to comply with all Legal Requirements; 

  

	 	(o)	Coordinate the provision of home health care and other ancillary services to residents of the Facility as Management Company may deem reasonable, necessary or desirable in connection with the management of the Facility;

  

	 	(p)	 Prepare and present to on-site personnel written emergency and evacuation procedures for the protection, warning, and safe and timely evacuation of
all residents, guests, invitees, and staff from the Facility (the “Emergency and Evacuation Procedures”). Management Company agrees to consult with insurance carrier loss prevention consultants if so required by Tenant, and to change such
Emergency and Evacuation Procedures if reasonably recommended by them; provided, that the Emergency and Evacuation 

  
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Procedures shall at all times comply with applicable governmental requirements. Management Company shall take such steps as it deems appropriate to assure the proper training of the Management
Company employees, and shall assure that all residents receive and are knowledgeable about such Emergency and Evacuation Procedures. 

  

	 	(q)	Management Company shall take such action as shall be necessary to ensure that the Facility and the management thereof by Management Company comply in all material respects with all Legal Requirements applicable to the
Facility or the management thereof by Management Company, including any Legal Requirements applicable to assisted living communities owned by for-profit organizations. Each party shall promptly provide to the other party within 10 (ten) days after
receipt, all notices, reports or correspondence from governmental agencies that assert deficiencies or charges against the Facility or that otherwise relate to the suspension, revocation, or any other action adverse to any License, all plans of
correction submitted in response thereto and all correspondence relating thereto. 

  

	 	(r)	Management Company shall take such action as may be necessary to comply promptly with any and all orders, evaluations, reports, or other Legal Requirements or, with Tenant’s prior consent, appeal or otherwise
contest any action taken by any governmental agency against the Facility. In connection with any such appeal, Tenant shall adequately secure and protect the Management Company from loss, cost, damage or expense by bond or other means reasonably
satisfactory to Management Company in order to contest by proper legal proceedings the validity of any such Legal Requirement. Notwithstanding the foregoing, Tenant shall have no obligation to secure and protect Management Company from any loss,
cost, damage or expense that arises directly out of Management Company’s breach of any of its covenants under this Agreement. Tenant, after having given its written approval, shall cooperate with Management Company with regard to the contest,
and Tenant shall pay all reasonable attorneys’ fees incurred with regard to the contest from the Operating Accounts. Counsel for any such contest shall be selected by Management Company and approved by Tenant. Management Company shall, with the
consent of Tenant and at Tenant’s cost and expense, process all third party payment claims for the services provided at the Facility, including, without limitation, consent to the exhaustion of all applicable administrative proceedings or
procedures, adjustments and denials by governmental agencies or their fiscal intermediaries as third party payors. 

  

	 	(s)	 To the extent modification of this Agreement is required to comply with Legal Requirements, Management Company and Tenant agree to make such
modification to cause this Agreement to comply with all Legal Requirements. Expenses incurred as the result of the noncompliance, cure and/or appeal shall be the responsibility of Tenant. Management Company,

  
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however, shall not take any action under this Section so long as Management Company has been informed that Tenant is contesting, or has affirmed its intention to contest any such order or
requirement, unless a failure to comply promptly with any such order or requirement would expose Management Company to civil or criminal liability. 

  

	 	(t)	Management Company immediately shall deliver to Tenant copies of all notices received by it or received at the Facility from any Mortgagee. 

 

	 	(u)	Oversee all capital projects involving Capital Expenditures set forth in the Approved Capital Budget provided however that for any major capital improvement, addition, or replacement wherein the estimated cost exceeds
$10,000 or involves more than one contractor with whom Tenant must directly contract, the Manager or Tenant may identify and contract with an independent consultant to provide construction planning and supervision of any such major capital
improvement project or addition, or the Tenant may authorize the Management Company to provide these services on reasonable terms mutually agreed to in advance by Tenant and Management Company. Except as otherwise approved in writing by an officer
or authorized representative of Tenant, all Capital Expenditures shall be made only in accordance with an Approved Capital Budget. In the event of any emergency requiring prompt action for the protection and safety of the Facility or the residents
and staff therein, in which it is not practicable to obtain prior approval from the Tenant or a representative of the Tenant, Management Company shall be entitled to take any required or necessary action without Tenant’s prior approval.
Management Company shall provide a report to Tenant as soon as practicable outlining the emergency situation and the actions taken. 

  

	 	(v)	Management Company shall establish and maintain records and procedures to account for any resident funds deposited with the Facility. One or more “Resident Trust Accounts” shall be established in accordance
with the terms hereof and all disbursements therefrom and records and procedures relating thereto shall conform with the requirements of third party reimbursement, licensure and all other applicable requirements and the terms hereof.

  

	 	(w)	Management Company shall maintain adequate systems and procedures governed by written policies and procedures covering all aspects of its operational and fiscal processes and sufficient to ensure that the
Facility’s assets and business are safeguarded in all material respects. 

  

	 	2.5	Budget. 

  

	 	(a)	The Approved Operating Budget and Approved Capital Budget for Fiscal Year 2013 is attached hereto as Exhibit B. 

  
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	 	(b)	For each Fiscal Year thereafter, Management Company shall submit to Tenant, at least 60 days prior to the beginning of such Fiscal Year during the Term, an annual budget covering the operations of, and proposed Capital
Expenditures to be made with respect to, the Facility containing the following items: 

 (i) A capital
expenditure budget (the “Proposed Capital Budget”) setting forth, on an accrual basis, an estimate of the Capital Expenditures to be incurred for the Facility, on a monthly basis for the next Fiscal Year. Tenant may approve or reject each
proposed Capital Expenditure, except those required by Legal Requirements. All Capital Expenditures shall be paid from the FF&E Reserve; provided, however, that Capital Expenditures that do not qualify under the Facility Mortgage for payment
from the FF&E Reserve shall be paid for from the Operating Account. Notwithstanding anything herein to the contrary, if and as required pursuant to any Facility Mortgage, the Proposed Capital Budget shall generally provide for at least $500 per
unit of Capital Expenditures for the Facility to be expended from the FF&E Reserve on a rolling twelve (12) month basis; 

(ii) An operating budget (the “Proposed Operating Budget”) setting forth, on an accrual basis, an estimate of the
following items for the Facility, on a monthly basis for the next Fiscal Year: 
 (a) unit occupancy; 

(b) Revenues; 

(c) Operating Expenses, including the costs for repairs and maintenance not included in Capital Expenditures 

(d) expenditures for advertising, promotion, and personnel training programs to be undertaken by Management Company; and 

(e) Management Fees. 
  

	 	(c)	 Tenant shall approve or disapprove of the Proposed Operating Budget and Proposed Capital Budget in writing to Management Company, detailing the basis
for disapproval, within thirty (30) days after receipt. If Tenant does not approve or disapprove of the Proposed Operating Budget or Proposed Capital Budget within such thirty (30) day period then Tenant shall be deemed to have approved
the Proposed Operating Budget or Proposed Capital Budget, as applicable. If Tenant disapproves the Proposed Operating Budget or Proposed Capital Budget, Management Company will resubmit the Proposed Operating Budget or Proposed Capital Budget within
fifteen (15) days after initial rejection. Tenant shall approve or disapprove any such resubmitted Proposed Operating Budget or Proposed Capital Budget within fifteen (15) days of its receipt thereof. The Tenant shall not unreasonably
withhold its approval of any Proposed 

  
 13 

	 	
Operating Budget or Proposed Capital Budget submitted by the Management Company. The Operating Budget and the Capital Budget as so finally approved by Tenant shall constitute the “Approved
Operating Budget” and the “Approved Capital Budget”, respectively, for purposes hereof. The Approved Operating Budget and the Approved Capital Budget shall be known collectively as the “Budget” for purposes hereof. Should
the budgeting process be delayed for any reason, until such delay is resolved Management Company will manage the Facility under the prior fiscal year’s Budget adjusted for the change in the Consumer Price Index from the year, and adjusting for
occupancy changes on a per resident day basis, except for uncontrollable Operating Expenses (taxes, insurance, utilities, etc.), which shall be increased to reflect the actual increase in the cost of such Operating Expenses. 

 

	 	(d)	An Approved Operating Budget shall constitute authorization for Management Company to expend funds to manage the Facility pursuant to such Approved Operating Budget, and Management Company may do so without further
approval. Management Company shall use its best efforts to adhere to the Approved Operating Budget providing, however, that Management Company may exceed the Approved Operating Budget for any given month provided the excess expenditure does not
exceed the greater of 10% or $10,000 for each operating expense functional line item of the Approved Operating Budget provided that aggregate Operating Expenses shall not exceed the total amount therefore set forth in the Operating Budget without
Tenant approval. 

  

	 	(e)	If at any time circumstances indicate that the Approved Operating Budget does not properly take into account the projected needs of the Facility, Management Company shall notify Tenant of the same and shall submit to
Tenant a proposed revision to the Approved Operating Budget which Tenant shall approve or disapprove within thirty (30) days after submission. If the proposed revision is disapproved by Tenant, Tenant and Management Company shall endeavor to
agree on a revised Approved Operating Budget. Once and if approved, Management Company’s authority as to any revised Approved Operating Budget is the same as that authorized for the original Approved Operating Budget. 

 

	 	(f)	The Approved Capital Budget shall constitute authorization for Management Company to make the Capital Expenditures contemplated thereby. If Management Company believes the purchase or installation of new or replacement
equipment or other capital items not contemplated by the Approved Capital Budget is or will be necessary or desirable, Management Company shall advise Tenant thereof, but shall cause such items to be purchased and installed only after obtaining the
prior written authorization of Tenant. 

  
 14 

	 	2.6	Reports to Tenant. 

  

	 	(a)	During the Term, Management Company shall deliver to Tenant the following statements for the Facility prepared in accordance with GAAP applied consistently from period to period (which shall be certified by an officer
of Management Company as being true and accurate in all material respects) by the fifteenth (15th) calendar day of the month, except for the Rent Roll which shall be submitted within the
fifth (5th) Business Day of the month, and except for those items set forth immediately below at Sections 2.6(a)(ii) and 2.6(a)(x) which shall be submitted within the
tenth (10th) calendar day of the month: 

 (i)
Balance sheet and income statement (in Microsoft Excel format or YARDI, to the extent compatible with Excel); 
 (ii) Trial
balance with 3 columns (balance forward, net debits/credit, and ending balance in Microsoft Excel format) 
 (iii) Rent Roll;

 (iv) Report of daily census for the month; 

(v) Marketing report in a form used for such reports by the Manager internally; 

(vi) Twelve month rolling cash flow projection; 

(vii) Detail of Management Fee calculations; 

(viii) Capital Expenditure reconciliation to the Approved Capital Budget; 

(ix) Disclosure of any material communications with regulatory agencies and state surveys; 

(x) Reconciliation Statement that sets forth any activity in the equity account of Tenant resulting from additional deposits
into or withdrawals from the FF&E Reserve or the Operating Account by Tenant or one of its Affiliates; 
 (xi) Most
recent sales tax and personal property tax filings, if and as applicable, with the monthly reporting submittals; and 
 (xii)
any other information relating to the Facility reasonably requested by Tenant. 
  

	 	(b)	 As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Management Company as
being true and accurate in all material respects) to be 

  
 15 

	 	
submitted to Tenant within fifteen (15) days after the end of each calendar quarter (other than the item to be delivered pursuant to Section 2.6(b)(i) which is to be submitted
within fifteen (15) days after the end of each February, May, August and December); 

   (i) All
balance sheet reconcilement; 
   (ii) Check register from the first day of the subsequent month to search for
unrecorded liabilities; 
   (iii) Certification executed by the CFO of Management Company in the form attached
hereto as Exhibit C; and 
   (iv) Management Company will cooperate in providing other reports as
reasonably requested by the Tenant. 
 If due to extraordinary circumstances, Management Company identifies expenditures after the last day
of the month which are in fact properly chargeable to that month but which are not reflected on statements submitted pursuant to this Section, Management Company shall promptly notify Tenant of said expenditures, if material. All statements required
by this Section shall be prepared in accordance with GAAP. 
  

	 	(c)	As an Operating Expense, Management Company shall prepare the following final reports consistent with GAAP (which shall be certified by an officer of Management Company as being true and accurate in all material
respects) and management status reports of the Facility, to be submitted to Tenant within seventy-five (75) days after the end of each Fiscal year: 

  (i) Balance sheet and income statement; 

  (ii) Revenues, Operating Expenses, and NOI, ; 

  (iii) Calculations of Management Fee; 

  (iv) Fixed asset additions; 

  (v) Capital expense reconciliation to the Approved Capital Budget; 

  (vi) Management Company will cooperate in providing other reports as reasonably requested by Tenant. 

 

	 	(d)	Management Company shall also provide any assistance as reasonably requested by the independent accountants for the Facility, selected by Tenant, in the preparation of audited financial statements for the Facility. Such
audited financial statements shall be prepared at Tenant’s expense in accordance with GAAP and delivered to Management Company and Tenant. 

  
 16 

	 	(e)	Management Company shall also provide the following services related to the monthly and annual reports: 

  (i) Management Company shall make available to Tenant for inspection and/or copying by Tenant upon request, all
books, records and financial data relating to the Facility in Management Company’s possession. Tenant shall notify the Management Company at least five (5) Business Days in advance of such inspection and shall conduct such inspection
during mutually agreeable business hours. 
 (ii) Management Company shall reasonably assist the Tenant and its accountants
in preparing and delivering to any lender any required monthly and annual reports. 
 (iii) Management Company shall provide
Tenant annually with information concerning any new competing community, and shall provide Tenant annually with any revisions to the Marketing Plan for the Facility, and an annual competitive analysis showing the Facility’s position in the
market with a survey of pertinent data of competing communities (to the extent requested by Tenant). 
 2.7 Bank Accounts and Cash
Balance. 
  

	 	(a)	Management Company shall deposit all Revenues received into a separate, segregated bank account (the “Operating Account”) established in Tenant’s name at a bank approved by Tenant and Management Company,
and shall supervise the disbursements from the Operating Account on behalf of Tenant of such amounts and at such times as the same are required in Management Company’s reasonable business judgment, and in accordance with the provisions of this
Agreement. Management Company shall discharge such supervisory responsibilities in accordance with reasonable and customary business standards and practices. All Operating Expenses shall be paid out of the Operating Account. The Management Fees
shall be paid out of the Operating Account. Tenant and Management Company shall specify the signatory or signatories of Management Company required on all checks or other documents of withdrawal submitted by Management Company on the Operating
Account. Funds in the Operating Accounts shall not be commingled with any other funds controlled by Management Company, unless approved by Tenant and will be disbursed only in accordance with this Agreement and, from time to time, upon the specific
instructions of Tenant. Management Company shall not withdraw any monies from the Operating Account to pay any item other than Operating Expenses permitted pursuant to the Approved Operating Budget or the Approved Capital Budget, as applicable,
including the Management Fee and all amounts due Management Company or its affiliates pursuant to any other agreement in respect of the Facility, or any emergency expenses pursuant to Section 2.4 hereof. 

  
 17 

	 	(b)	Landlord shall establish a reserve account (the “FF&E Reserve”) at a bank approved by Manager, such approval not to be unreasonably withheld or delayed. Each month during the Term, Management Company shall
transfer into the FF&E Reserve an amount equal to one twelfth (1/12) of the FF&E Reserve Payment. Transfers into the FF&E Reserve shall be made on or before the fifteenth
(15th) day of each month. Funds deposited into the FF&E Reserve shall be disbursed in accordance with the Approved Capital Budget. Manager and Tenant or Landlord shall each be signatories
on the FF&E Reserve. 

  

	 	(c)	All rights granted to Management Company under the terms of this Agreement, including the payment of Management Fees, are and shall be subordinate to the liens of lenders securing the current indebtedness of Tenant
(however, any Management Fees which are not paid due to the foregoing subordination provision shall accrue and Manager shall have the right to terminate this Agreement in accordance with the terms of Section 7.2(d)). 

 

	 	(d)	Tenant will maintain a minimum cash balance of $50,000 in the Operating Account. Tenant will also fund all reasonable cash requests of the Management Company to maintain the foregoing cash balance in the Operating
Account. Without limiting the foregoing, on the Commencement Date, Tenant will fund the Operating Account with $50,000. 

  

	 	2.8	Licenses, Permits and Certification. 

  

	 	(a)	Management Company, as agent of Tenant, shall assist Tenant in its application for and maintenance, in Tenant’s name of all Licenses from all governmental agencies which have jurisdiction over the Tenant and
operation of the Facility. 

  

	 	(b)	Neither Tenant nor Management Company shall knowingly take any action or fail to take any action which could reasonably be expected to cause a governmental authority having jurisdiction over the operation of the
Facility to institute any proceeding to suspend, rescind or revoke any License. 

  

	 	2.9	Intentionally deleted. 

 2.10 Quality Controls. Management Company
shall activate and maintain on a continuing basis, a quality assurance program which provides objective measurements of the quality of services provided at the Facility. In connection therewith, Management Company shall utilize such techniques (e.g.
resident interviews and periodic inspections) as Management Company may reasonably deem necessary to maintain the quality of the Facility. 

  
 18 

 2.11 Use of Management Company’s Personnel. Representatives of Management
Company shall visit the Facility as often as Management Company deems necessary. All out-of-pocket expenses arising from travel and lodging connected with such visitations shall be borne by the Management Company, except personnel that float between
properties and any travel beyond fifty (50) miles if such arrangement can be shown to reduce overall employment costs at the Facility and except that the actual cost of Management Company’s officers’ and employees’ air travel to
or from the Facility shall be paid as an Operating Expense from the Operating Account; provided however, (i) no other incidental costs of Management Company’s officers’ and employees’ related to such travel, such as but not
limited to the costs of ground travel, lodging and food, shall be an Operating Expense and (ii) in the event that the Management Company’s officers’ or employees’ conduct business unrelated to the management of the Facility
during such trip, then the Operating Expense for the air travel pursuant to this section shall be a portion of such costs representing a reasonable and equitable allocation of such costs to the Facility. 

2.12 Taxes. Any applicable income taxes of Tenant, any federal, state or local taxes, assessments or other governmental charges
imposed on the Facility are the obligations of Tenant, not of Management Company, and all of the foregoing, with the exception of any applicable income taxes (which shall be paid directly by Tenant), shall be paid out of the Operating Account of the
Facility. With the Tenant’s prior written consent, Management Company may, and at Tenant’s direction shall, contest the validity or amount of any such tax or imposition on the Facility in the same manner as described in
Section 2.4(a) hereof. Management Company, on behalf of Tenant, shall cause all Social Security and federal and state income tax withholding and other employee taxes related to the Management Company’s employees which may be due and
payable to be paid promptly from the Operating Account of the Facility before the payment of any other Operating Expenses therefrom. 
 2.13
Information Regarding the Facility. Management Company shall maintain and provide to Tenant, upon Tenant’s request or upon termination of this Agreement, a complete set of the following: 

 

	 	(a)	books and records of the Facility held by Management Company; 

  

	 	(b)	personal property relating to the Facility; 

  

	 	(c)	service contracts relating to the Facility; 

  

	 	(d)	all necessary records relating to the operation of the Facility and the personal property located at the Facility belonging to Tenant; 

 

	 	(e)	all licenses, permits, operating or occupancy certificates, employment contracts, service contracts, cooperation agreements, and transfer or transportation agreements, relating to the maintenance and operation of the
Facility; and 

  

	 	(f)	a copy of the Management Company’s documented crisis and/or disaster communication and management plan for the Facility in form and substance required by applicable Legal Requirements. 

  
 19 

 Management Company shall be responsible for the due and proper maintenance of all items on the
foregoing lists at the expense of Tenant. 
 Management Company, upon request by the Tenant, will make available for review at the corporate
offices of Management Company to the Tenant, all facility operational materials, including policy and procedure manuals and standard operational materials and other similar materials. Management Company agrees to change any policy and/or procedure
which violates any Legal Requirement. In addition, if Tenant requests any other change, Management Company and Tenant will work together to revise such operational policies and procedures but will not be required to implement changes which are based
solely on business considerations. Any and all changes in the standard management program of the Management Company will be documented and clearly expressed in the “Policies and Procedures Exceptions Manual” which will be maintained in the
Facility. This Manual and the standard operational materials, together, will comprise the “Facility Operational Materials.” 

ARTICLE 3. 
 MANAGEMENT
FEE 
 3.1 Management Fee. Management Company shall receive five percent (5%) of the gross collected Revenues
received each month (“Management Fee”). The Management Fee for each month shall be paid to the Management Company from the Operating Account of the Facility no later than fifteen (15) days following the end of that month. 

ARTICLE 4. 
 OTHER
TRANSACTIONS WITH MANAGEMENT COMPANY OR ITS AFFILIATES 
 4.1 Transactions with Management Company and Its Affiliates.
Notwithstanding anything else herein contained, Management Company shall not, without the prior written consent of Tenant after full disclosure by Management Company of such affiliation and interest, cause Tenant to enter into any contract with
Management Company or any Affiliate thereof for services required to be provided by Management Company under this Agreement, or pay any amount to Management Company or its Affiliates, other than Management Fees described in Article 3 hereof, or
reimbursement of bona fide expenses to unrelated third parties. 
 ARTICLE 5. 

INSURANCE 
 5.1
Insurance. Management Company shall procure and maintain (or Tenant shall procure and maintain, at Tenant’s election), as an Operating Expense and with the prior written approval of Tenant, insurance as required and set forth in
Exhibit A to this Agreement. As of the Commencement Date, Tenant or Landlord shall procure and maintain as an Operating Expense 

  
 20 

 
the property insurance required pursuant to this Agreement and Manager shall procure and maintain as an Operating Expense the liability insurance required pursuant to this Agreement. The carrier
and the amount of coverage of each policy of insurance shall be satisfactory to Tenant. Management Company shall be designated as a named insured with Tenant included as an additional insured and/or loss payee under each insurance policy procured by
Management Company. Tenant or Landlord may elect, in its sole discretion, to procure and maintain as an Operating Expense some or all insurance policies required and set forth on Exhibit A, except for Management Company’s Workers’
Compensation, Employer’s Liability, and Professional Liability insurance policies, upon thirty (30) days written notice to Management Company. In the event Tenant or Landlord elects to procure directly any of the required insurance
policies, then Tenant or Landlord shall be the named insured under each policy and Management Company shall be named as an additional insured. 

ARTICLE 6. 

REPRESENTATIONS AND WARRANTIES 

6.1 Representations and Warranties of Tenant. Tenant makes the following representations and warranties which are material
representations and warranties upon which Management Company relied as an inducement to enter into this Agreement: 
  

	 	(a)	Status of Tenant. Tenant is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware qualified in other jurisdictions where necessary in order to conduct its
business and has all necessary power to carry on its business as now being conducted, to operate its properties as now being operated, to carry on its contemplated business, to enter into this Agreement and to observe and perform its terms.

  

	 	(b)	Authority of Due Execution. Tenant has full power and authority to execute and deliver this Agreement and all related documents and to carry out the transactions contemplated herein; which actions will not with
the passing of time, the giving of notice, or both, result in a default under or a breach or violation of (i) the Tenant’s Articles of Organization or Operating Agreement; or (ii) any Legal Requirement, or any Facility Mortgage, note,
bond, indenture, agreement, lease, license, permit or other instrument or obligation to which Tenant is now a party or by which Tenant or any of its assets may be bound or affected. 

 

	 	(c)	Litigation. There is no litigation, claim, investigation, challenge or other proceeding pending or, to the knowledge of Tenant, threatened against Tenant, its properties or business which seeks to enjoin or
prohibit it from entering into this Agreement. 

  
 21 

 6.2 Representation and Warranties of Management Company. Management Company makes
the following representations and warranties which are material representations and warranties upon which Tenant relied as an inducement to enter this Agreement. 
  

	 	(a)	Status of Management Company. Management Company is a limited liability company duly organized and validly existing in good standing under the laws of the State of Texas, and has all necessary power to carry on
its business as now being conducted, to carry on its contemplated business, to enter into this Agreement and to observe and perform its terms. 

  

	 	(b)	Authority and Due Execution. Management Company has full power and authority to execute and to deliver this Agreement and all related documents and to carry out the transactions contemplated herein; which actions
will not with the passing of time, the giving of notice, or both, result in a default under or a breach or violation of (i) Management Company’s Articles of Organization or Operating Agreement, or (ii) any Legal Requirement, or any
Facility Mortgage, note, bond indenture, agreement, lease, license, permit or other instrument or obligation to which Management Company is now a party or by which Management Company or any of its assets may be bound or affected. This Agreement
constitutes a valid and binding obligation of Management Company, enforceable in accordance with its terms, except to the extent that is enforceability is limited by applicable bankruptcy, reorganization, insolvency, receivership or other laws of
general application or equitable principals related to or affecting the enforcement of creditor’s rights. 

  

	 	(c)	Litigation. There is no litigation, claim, investigation, challenge or other proceeding pending or, to the knowledge of Management Company, threatened against Management Company, its properties or business which
seeks to enjoin or prohibit it from entering into this Agreement. 

  

	 	(d)	Management Company is and shall at all times be an “eligible independent contractor” as defined in Section 856(d)(9) of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”) (and taking into account the restrictions on ownership of the Management Company by shareholders of CHP Healthcare Properties, Inc., and restrictions on ownership of CHP Healthcare Properties, Inc., by owners of the Management
Company set forth in Section 856(d)(3)), and Management Company will and shall cause the Facility to be managed in such a manner so that it qualifies as a “qualified health care facility” within the meaning of
Section 856(e)(6)(D) of the Code at all times. In the event that Tenant reasonably concludes that the terms of this Agreement will have any effect as to cause the rent under Tenant’s lease of the Facility to fail to qualify as “rents
from real property” within the meaning of Section 856(d) of the Internal Revenue Code, Management Company hereby agrees to enter into an amendment to this Agreement as proposed by Tenant modifying such terms in such a way as to cause rent
under Tenant’s lease of the Facility to so qualify as “rent from real property” in the reasonable opinion of Tenant and its counsel; provided however, no such modifications shall affect the amount of Management Fees or the practical
realization of the rights and benefits of the Management Company hereunder. 

  
 22 

	 	(e)	Ownership of Management Company. Attached hereto as Schedule 6.2(e) is a true and accurate organizational chart depicting the ownership structure of Management Company. 

ARTICLE 7. 
 TERMINATION

 7.1 Tenant Termination. Tenant shall have the right to terminate this Agreement, without paying any fee or penalty,
when and if one of the following events occur (hereinafter collectively referred to as “Management Company Default”), after which Tenant shall have the right – but not the obligation – to declare a termination of this Agreement
in accordance with the termination protocols set forth below: 
  

	 	(a)	appointment of a receiver or trustee to manage the assets of Management Company; 

  

	 	(b)	assignment for the benefit of creditors of the assets of Management Company; 

  

	 	(c)	suspension, termination or revocation of any material License, with no further opportunity to appeal or contest such suspension, termination or revocation; 

 

	 	(d)	Management Company’s gross negligence or willful misconduct; 

  

	 	(e)	any voluntary act of bankruptcy by Management Company, or any involuntary bankruptcy proceeding commenced against Management Company and not dismissed within sixty days of the commencement thereof; 

 

	 	(f)	Management Company’s breach of any provisions of this Agreement, where such breach has not been cured within thirty (30) days after the giving of written notice specifying the nature of the breach or such
longer period as may reasonably be required to diligently effect such cure; and/or 

  

	 	(g)	Any “Management Company Default” by Management Company under an Affiliated Agreement. 

7.2 Management Company Termination. Management Company shall have the right to terminate this Agreement without receiving any
fee or payment, if and when one of the following events occur (hereinafter “Tenant Default”), after which Management Company shall have the right – but not the obligation – to declare a termination of this Agreement in accordance
with the termination protocols set forth below: 
  

	 	(a)	appointment of a receiver or trustee to manage the assets of Tenant; 

  
 23 

	 	(b)	assignment for the benefit of creditors of the assets of Tenant, except Management Company shall agree to enter into any agreements which may be required on behalf of the Mortgagee in order for the Landlord to obtain
financing, so long as the Management Fees and other amounts due to Management Company set forth herein are not materially affected; 

  

	 	(c)	any voluntary act of bankruptcy by Tenant, or any involuntary proceeding commenced against Tenant and not dismissed within sixty days of the commencement thereof; 

 

	 	(d)	failure by Tenant to pay Management Company in accordance with Article 3 hereof within ten (10) calendar days after such amount becomes due; and/or 

 

	 	(e)	Tenant’s breach of any provision of this Agreement, where such breach has not been cured within thirty (30) days after the giving of written notice specifying the nature of the breach or such longer period as
may reasonably be required to diligently effect such cure. 

 7.3 Performance Termination. Commencing with the
expiration of Fiscal Year 2014, in the event that Adjusted NOI does not equal or exceed the Performance Threshold, then the Tenant shall have the option to terminate this Agreement by providing a ninety (90) day written notice to the Management
Company. To terminate this Agreement, Tenant must deliver written notice of such election to Management Company no later than sixty (60) days following Tenant’s receipt of the annual financial reports for such Fiscal Year. 

7.4 Notwithstanding anything else herein contained, neither party shall have the right to terminate this Agreement as a result of any of the
reasons set forth in Section 7.1(f) or in Section 7.2(e) above, if the event is caused by strikes, other labor disturbances, fires, windstorm, earthquake, arbitrary and capricious action by third party payors, war or other state of
national emergency, terrorism, or acts of God, in which the negligence of the party seeking to avoid termination is not a materially contributing factor to the occurrence of such event. 

7.5 At any time during the Term, Tenant shall have the right to terminate this Agreement for any reason or for no reason upon sixty
(60) days prior written notice to Management Company and payment to the Management Company, upon the effective date of such termination, of an amount equal to the lesser of (i) the average of the Management Fee for the prior three
(3) months multiplied by twenty-four (24) or (ii) the average of the Management Fee for the prior three (3) months multiplied by the number of months remaining in the Term. 

7.6 Tenant has the option to terminate this Agreement in the event Landlord sells the Facility to an unaffiliated third party who does not
elect to assume this Agreement, which termination shall require at least sixty (60) days prior written notice to Management Company. In such event, Tenant shall not be obligated to pay any fee or penalty as a result of such termination. 

  
 24 

 7.7 Either party has the option to terminate this Agreement without payment of fee or penalty
upon 30 days prior written notice to the other upon the occurrence of either of the following events: 
  

	 	(a)	The Facility or any material portion thereof is damaged or destroyed to the extent that in the written opinion of an independent architect or engineer reasonably acceptable to both parties: (1) it is not
practicable or desirable to rebuild, repair or restore the Facility to its condition immediately preceding such damage within a period of six months; or (2) the conduct of normal operations of the Facility is interrupted for a period of six
months or more; or 

  

	 	(b)	Title to the temporary use of all or substantially all of the Facility is taken under the exercise of the power of eminent domain by the government authority or person, firm or corporation acting under governmental
authority which in the opinion of an independent architect or engineer reasonably acceptable to both parties, prevents or is likely to prevent the conduct of normal operations at the Facility for a period of at least six months. 

 

	 	(c)	If the termination occurs as a result of any of the events described in clause (a) of this Section 7.7, and if Tenant or any Affiliate thereof rebuilds, restores or otherwise rearranges the Facility and
recommences operations thereof, Tenant shall give Management Company the first option to manage the Facility under the same terms, conditions and fees as provided herein. 

7.8 Tenant, at the direction of a lender holding a first lien security instrument encumbering the Facility (“Lender”), or Lender
shall have the option to terminate this Agreement, without fee or penalty subject to the rights of the Management Company herein, upon ten (10) days’ prior written notice to the Management Company in connection with a foreclosure or
delivery of a deed in lieu that is related to any first lien security instrument held by Lender and encumbering the Facility, without any further obligation to the Management Company (except for any accrued management fees for previous periods which
have not been paid which shall be the obligation of Tenant but not Lender). 
 7.9 Automatic Termination. This Agreement shall
be deemed to be void ab initio in the event the Purchase and Sale Agreement terminates without Landlord acquiring the Facility. 
 7.10
Management Company’s Obligations After Termination or Expiration of Agreement. Upon the expiration or termination of this Agreement, Management Company shall, if requested: 

 

	 	(a)	deliver to Tenant, or such other person or persons designated by Tenant, copies of all books and records of the Facility and all funds in the possession of Management Company belonging to Tenant or received by
Management Company pursuant to the terms of this Agreement; 

  
 25 

	 	(b)	assign, transfer, or convey to Tenant, or such other person or persons designated by Tenant, all service contracts and personal property relating to or used in the operation and maintenance of the Facility, except any
personal property which was paid for and is owned by Management Company; and 

  

	 	(c)	remove, at Management Company’s expense, all signs that it may have placed at the Facility indicating that it is the Management Company of same and replace and restore the damage resulting therefrom.

 Upon any termination or the expiration pursuant to this Section, the obligations of the parties hereto (except those
specified as surviving) shall cease as of the date specified in the notice of termination, except that Management Company shall comply with the applicable provisions of this Section and shall be entitled to receive any and all compensation which may
be due Management Company hereunder through the effective date of such termination or expiration. 
 ARTICLE 8. 

MISCELLANEOUS COVENANTS 

8.1 Indemnification by Tenant. Subject to the limitations set forth in this Article 8, Tenant agrees to indemnify and hold
harmless Management Company from and after the Commencement Date against and with respect to any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and
reasonable attorneys’ fees and expenses, costs of litigation and costs of investigation (but not including any adjustments or credits expressly provided for in this Agreement) (together referred to as “Management Company Losses”):

  

	 	(a)	resulting from any breach of a representation or warranty contained in Section 6.1 of this Agreement; 

  

	 	(b)	resulting from gross negligence or willful misconduct of Tenant in exercising its duties and responsibilities hereunder; 

  

	 	(c)	Tenant’s uncured breach of this Agreement; 

  

	 	(d)	arising out of or resulting from the ownership, operation, use or control of the Facility at any time during the Term, including without limitation, any and all liabilities which relate to events occurring during the
Term, except for those caused by or arising out of the gross negligence or willful misconduct of Management Company and except to the extent subject to Management Company’s indemnity of Tenant provided in Section 8.2 below;

  

	 	(e)	arising out of or resulting from any claim asserted by or on behalf of any Facility Employee for any act or omission occurring at any time during the Term, except for those caused by or arising out of the gross
negligence or willful misconduct of Management Company and except to the extent subject to Management Company’s indemnity of Tenant provided in Section 8.2 below; or 

  
 26 

	 	(f)	directly arising out of Landlord’s or Tenant’s failure to initiate Capital Expenditures previously requested by Management Company that results in personal injury of a resident of the Facility, provided that
Management Company’s gross negligence or willful misconduct was not a contributing factor with respect to such injury. 

8.2 Indemnification by Management Company. Subject to the limitations set forth in this Article 8, Management Company hereby
agrees to indemnify and hold harmless Tenant at all times from and after the Commencement Date against and with respect to any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies,
including interest, penalties, and reasonable attorneys’ fees and expenses, costs of litigation and costs of investigation (but not including any adjustments or credits expressly provided for in this Agreement) (“Tenant Losses”): 

 

	 	(a)	resulting from a material breach of a representation or warranty contained in Section 6.2 of this Agreement; 

  

	 	(b)	resulting from gross negligence or willful misconduct of Management Company in exercising its duties and responsibilities hereunder; or 

 

	 	(c)	Management Company’s uncured material breach of this Agreement. 

 8.3 Additional
Covenants of Management Company. Management Company hereby makes the additional covenants set forth in this Section, which are material covenants and upon which Tenant relies as an inducement to enter into this Agreement: 

 

	 	(a)	 Assignment. Management Company may not assign its rights and obligations hereunder without Tenant’s prior approval, which shall not be
unreasonably withheld as more particularly set forth in this Section 8.3(a). For purposes of this Section 8.3(a), a change in fifty percent (50%) or more in the ownership or control, whether direct or indirect, of
Management Company, shall be deemed to be an effective assignment of this Agreement requiring Tenant’s prior approval. Tenant shall consent to such an assignment or change in the ownership or control of Management Company in the event that the
proposed transferee or the transferee’s owners (collectively, the “Transferee”) meets the following criteria: (a) the Transferee has the financial capacity that equals or exceeds that which Management Company has as of the date
of this Agreement; (b) such Transferee is known to be of good character and in good standing in its current business dealings; (c) such Transferee is experienced in the senior living facility industry; and (d) has all licenses and
industry approvals that a manager must hold to manage the Facility. For purposes of clarification, it shall not be deemed unreasonable for Tenant to withhold consent to any such transfer if the Transferee lacks, in Tenant’s reasonable opinion,
(x) the financial wherewithal, (y) the character (which determination may be 

  
 27 

	 	
made, in whole or in part, based on Tenant’s or its Affiliate’s past dealings with the intended transferee), or (z) the quality and relevant experience necessary to satisfy the
obligations of Tenant hereunder. Any proposed transferee shall be required to provide adequate assurances to Tenant: (l) that Revenues shall not decline substantially after the date of such transfer; (m) of the continuous operation of the
Facility in strict accordance with the requirements of this Agreement; and (n) of such other matters as Tenant may reasonably require at the time of such transfer. Notwithstanding the foregoing, any change in ownership or control that directly
results from the death of any person with a controlling interest in Management Company shall not be subject to this Section 8.3 provided that the individuals managing the day-to-day operations at the Facility remain substantially the
same following the transfer of ownership or control and the new controlling person or owner satisfies the criteria stated in items (x), (y), and (z) of this Section 8.3. Notwithstanding the foregoing, Management Company
shall use commercially reasonable efforts to provide written notice to Tenant in the event that there is any change in the ownership of Management Company, whether direct or indirect, regardless of whether such change constitutes a change of
more than fifty percent (50%) of the direct or indirect ownership of Management Company, which notice shall be delivered no later than five (5) Business Days following the effectuation of any such change. Management Company shall also
provide Tenant with an updated organizational chart showing the direct and indirect ownership interests in and to Management Company that is true, complete and correct within five (5) days of receipt of Tenant’s written request therefore.

  

	 	(b)	Tenant Assignment. Management Company acknowledges and agrees that Tenant may assign its rights and obligations under this Agreement without prior approval of Management Company to an Affiliate of Tenant or to a
third party in connection with the sale of the Facility. 

  

	 	(c)	Transfer of Residents. Management Company agrees that it will not, as long as it manages for Tenant under this Agreement, without the prior written consent of the Tenant, encourage or solicit the transfer of any
resident of the Facility to another facility in which Management Company has an interest which is not owned by Tenant, unless the physical or medical condition of the resident indicates that such a transfer would be appropriate. The Management
Company may, however, freely discuss and not inhibit such a transfer when the original basis for the subject resident to be admitted to the Tenant’s Facility was to acquire temporary accommodations until a room became available in another
facility where the resident prefers to live. 

  

	 	(d)	 Non-Compete. Management Company hereby covenants and agrees that, for a period commencing on the Effective Date and ending one (1) year
following the expiration or earlier termination of this Agreement, 

  
 28 

	 	
Management Company shall not, and shall cause all of its Subsidiaries and Affiliates (each, a “Covered Person”) not to, either (1) Compete, directly or indirectly, with the
Facility by engaging, in any capacity, in operating or managing a senior living facility within five (5) driving miles of the Facility or (2) specifically solicit any employees of the Facility for employment at other facilities owned or
controlled by a Covered Person (provided nothing herein shall prevent a Covered Person from hiring any employee of the Facility who responds to a Covered Person’s advertisement or other notice that is not specifically targeted at employees of
the Facility). For purposes of this provision, “Compete” means (i) to, directly or indirectly, conduct, facilitate, participate or engage in, or bid for or otherwise pursue a business, whether as a principal, sole proprietor, partner,
stockholder, or agent of, or consultant to or manager for, any Person, or (ii) to, directly or indirectly, have any ownership interest in any Person or business which conducts, facilitates, participates or engages in, or bids for or otherwise
pursues a business, whether as a principal, sole proprietor, partner, stockholder, or agent of, or consultant to or manager for, any such Person, in each case except as a passive investor with a non-controlling interest in such Person.
Notwithstanding the foregoing, this Section 8.3(d) shall not apply to or in any way prohibit or restrict any existing ownership interests or operations of a Covered Person as of the Effective Date. The parties recognize and acknowledge
that a breach of this Section 8.3(d) by Management Company or any of its Subsidiaries or Affiliates will cause irreparable and material loss and damage to Tenant and hereby consent to the granting by any court of competent jurisdiction
of an injunction or other equitable relief, without the necessity of posting a bond, cash or otherwise, and without the necessity of actual monetary loss being proved or Tenant’s establishing the inadequacy of any remedy at law, and order that
the breach or threatened breach of such provisions may be effectively restrained. The provisions of this Section 8.3(d) shall expressly survive the expiration or earlier termination of this Agreement. This provision, however, shall not
apply following any termination of this Agreement arising out of Section 7.2, Section 7.6 or if the Agreement is deemed void ab initio pursuant to Section 7.9. 

 

	 	(e)	 Non-Solicitation. Management Company agrees not to directly or indirectly solicit, divert or accept business from any customer, supplier,
distributor or manufacturer of or to the Facility to the detriment of Tenant or any Affiliate of Tenant, or otherwise interfere with the relationship between Tenant or any Affiliate of Tenant in connection with the Facility and any customer,
supplier, distributor or manufacturer of or to Tenant or any Affiliate of Tenant to the detriment of Tenant or any Affiliate of Tenant in connection with the Facility. The parties recognize and acknowledge that a breach of this
Section 8.3(e) by Management Company or any of its Subsidiaries or Affiliates will cause irreparable and material loss and damage to Tenant and hereby consent to the granting by any court of competent jurisdiction of an injunction or
other equitable relief, without 

  
 29 

	 	
the necessity of posting a bond, cash or otherwise, and without the necessity of actual monetary loss being proved or Tenant’s establishing the inadequacy of any remedy at law, and order
that the breach or threatened breach of such provisions may be effectively restrained. The provisions of and obligations under this Section 8.3(e) shall apply throughout the Term and shall expressly survive the expiration or earlier
termination of this Agreement for a period of one (1) year following such expiration or earlier termination. This provision, however, shall not apply following any termination of this Agreement arising out of Section 7.2,
Section 7.6 or if the Agreement is deemed void ab initio pursuant to Section 7.9. 

  

	 	(f)	 Right of First Opportunity. Management Company hereby covenants and agrees that, for a period commencing on the Effective Date and ending one
(1) year following the expiration or earlier termination of this Agreement, Management Company shall not, and shall cause any Covered Person not to develop, acquire or lease a senior living facility within five (5) driving miles of the
Facility (a “Competitive Property”) without first offering Tenant an opportunity to co-invest in the Competitive Property as set forth in this paragraph. If a Covered Person desires to develop, own, or lease a Competitive Property,
Management Company shall deliver the following notices to Tenant: (1) written notice to Tenant promptly upon any Covered Person commencing substantive analysis, planning and or underwriting activities with respect to the potential development,
acquisition or leasing of a Competitive Property (the “Competitive Property Notice”), including a detailed written description of the Competitive Property or, in the case of a potential development of a Competitive Property, a detailed
written description of the proposed location of such Competitive Property and a general description, to the extent available, of the type, size and scope of the Competitive Property to be developed, and (2), upon finalizing the terms of the proposed
investment in the Competitive Property that was subject to the Competitive Property Notice, written notice of such proposed investment including a detailed written description thereof (the “Investment Notice”), not less than thirty
(30) days prior to the day on which the proposed investment is expected to close after commercially reasonable efforts by the applicable Covered Person to coordinate its process to give the Tenant maximum knowledge and information regarding
such potential Competitive Property investment, together with any and all investment memoranda, investment summaries, projections, pro forma financial statements and other materials reasonably required to evaluate the proposed investment, including
those that may be reasonably requested by the Tenant after its receipt of the Investment Notice (collectively, the “Investment Materials”). Following delivery of an Investment Notice, Tenant shall have the right, exercisable by delivering
written notice to the Management Company within twenty (20) days after their receipt of the Investment Notice (the “Response Period”), to elect to, or to have an Affiliate, invest with such Covered Person (which investment shall be in
place of any investment otherwise to have been 

  
 30 

	 	
made by any third party(ies)). In such event, the investment shall have the economic terms provided in the Investment Notice (which shall be no worse than the most favored terms provided prior to
the expiration of the Response Period to any other unaffiliated potential or actual investor with respect to such potential Competitive Property investment). Throughout the Response Period, Management Company agrees to negotiate in good faith with
the Tenant regarding the terms of and all other matters relating to such Competitive Property investment. If Tenant delivers written notice to the Management Company stating that it and/or its Affiliates have elected not to invest in the Competitive
Property, or if the Tenant fails to deliver a written notice to the Management Company by the expiration of the Response Period stating that it and/or its Affiliates have elected to invest in the Competitive Property, then the Covered Person shall
have the right to pursue the Competitive Property with a third party other than the Tenant and/or its Affiliates, so long as the economic terms of the investment do not demonstrably change favorably to the investor by more than seven percent
(7%) (and if the terms do so change, a new right of first opportunity to Tenant shall be triggered hereunder). Tenant’s election (or deemed election) not to invest in a Competitive Property shall not be deemed an election by Tenant with
respect to any future Competitive Property, and the Tenant’s right with respect to any such future Competitive Property shall be subject to the requirements of this Section 8.3(f). This provision, however, shall not apply following
any termination of this Agreement arising out of Section 7.2, Section 7.6, or if the Agreement is deemed void ab initio pursuant to Section 7.9. 

8.4 Additional Covenants of Tenant. Tenant hereby makes the additional covenants set forth in this Section, which are material
covenants and upon which Management Company relies as an inducement to enter into this Agreement: 
  

	 	(a)	Tenant will cooperate with Management Company in every reasonable respect and will furnish Management Company with all information required by it for the performance of its services hereunder and will permit Management
Company to examine and copy any data in the possession or control of Tenant affecting Management Company and/or operation of the Facility and will in every way cooperate with Management Company to enable Management Company to perform its services
hereunder. 

  

	 	(b)	Tenant will examine documents submitted by Management Company and render decisions pertaining thereto, when required, promptly to avoid unreasonable delay in the progress of Management Company’s work. Tenant agrees
that it will not unreasonably fail to execute and deliver all applications and other documents that may be deemed by Management Company to be necessary or proper to be executed by Tenant in connection with the Facility, subject to the limitations in
this Agreement with respect to the Budget and other rights of Tenant. 

  
 31 

	 	(c)	Tenant acknowledges that Management Company retains all ownership and other rights in all proprietary systems, manuals, materials, trade names, branding and other information, in whatever form, developed by Management
Company in the performance of its services hereunder (other than any trademarks, trade names or other intellectual property acquired by Tenant or Landlord in connection with the acquisition of the Facility), and nothing contained in this Agreement
shall be construed as a license or transfer of such information either during the Term or thereafter. Upon termination of this Agreement all such proprietary systems manuals, materials and other information in whatever form shall be removed from the
Facility by Management Company. 

  

	 	(d)	Tenant shall comply with all Legal Requirements which are applicable to Tenant provided that Tenant, at its sole expense and without cost to Management Company, shall have the right to contest by proper legal
proceedings the validity, so far as applicable to it, of any such Legal Requirement, provided that such contest shall not result in a suspension of operations of the Facility. Notwithstanding the foregoing, however, Tenant shall not be deemed to be
in breach of the covenant contained in this clause (d) if Tenant’s failure to so comply is the result of a failure by Management Company to comply with any of its obligations under this Agreement. 

8.5 Binding Agreement. The terms, covenants, conditions, provisions and agreements herein contained shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns. 
 8.6 Relationship of Parties. Nothing contained in
this Agreement shall constitute or be construed to be or to create a partnership, joint venture or lease between Tenant and Management Company with respect to the Facility. Management Company shall have no right or authority, express or implied, to
commit or otherwise obligate Tenant in any manner whatsoever except to the extent specifically provided in this Agreement. 
  

	 	8.7	Notices. 

  

	 	(a)	 If Management Company shall desire the approval of Tenant to any matter, Management Company will give written notice by mail or email to Tenant that
it requests such approval, specifying in the notice the matter as to which approval is requested and reasonable detail respecting the matter. If Tenant shall not respond negatively in writing by mail or email and to the notice within 10 days after
the sending thereof (unless some other period for response is specified in this Agreement), Management Company may send a second such notice in such fashion to Tenant. If Tenant shall not respond negatively in writing by mail or email to the second
notice within five days after the sending thereof (unless some other period for response is specified in this Agreement), Tenant shall be deemed to have approved the matter referred to in the notice. Any

  
 32 

	 	
provisions hereto to the contrary notwithstanding in emergency situations (as determined by Management Company), Management Company shall not be required to seek or obtain Tenant’s approval
for any actions or omissions which Management Company, in its sole judgment, deems necessary or appropriate to respond to such situations, provided Management Company promptly thereafter reports such action or omission to Tenant in writing, by mail
and by email. 

  

	 	(b)	All notices, demands and requests contemplated hereunder by either party to the other shall be in writing and shall be delivered by hand, transmitted by overnight courier or mailed, postage prepaid, registered or
certified mail, return receipt requested: 

  

	 	(i)	To Tenant, by addressing the same to: 

 CHP Raider Ranch TX Tenant Corp. 

c/o CNL Healthcare Properties, Inc. 

CNL Center at City Commons 
 450
South Orange Avenue, 12th Floor 
 Orlando, Florida 32801-3736 

Attn: Holly J. Greer, Esq., SVP and General Counsel 

With a copy to: 
 Lowndes
Drosdick Doster Kantor and Reed, P.A. 
 215 North Eola Drive 

Post Office Box 2809 
 Orlando,
Florida 32802-2809 
 Attn: William T. Dymond, Jr., Esq. 
  

	 	(ii)	To Management Company, by addressing the same to: 

 Integrated Senior Living LLC 

3110 W. Southlake Blvd. 
 Suite
120 
 Southlake, Texas 76092 

Attn: Mr. Richard E. Simmons 

and 
 South Bay Partners, Ltd.

 5307 East Mockingbird Lane 

Suite 1010 
 Dallas, Texas 75206

 Attention: Mr. Charles D. Hammonds 

  
 33 

 With a copy to: 

Arent Fox LLP 
 1717 K Street,
N.W. 
 Washington, D.C. 20036-5342 

Attn: Kenneth S. Jacob, Esq. 

or to such other address or to such other person as may be designated by notice given from time to time during the Term by one party to the
other. Any notice hereunder shall be deemed given three (3) days after mailing, if given by mailing in the manner provided above, or on the next Business Day following the date delivered or transmitted if given by hand or overnight courier.

 8.8 Entire Agreement: This Agreement contains the entire agreement between the parties hereto with respect to the subject
matter and no prior oral or written, and no contemporaneous oral representations or agreements between the parties with respect to the subject matter of this Agreement shall be of force and effect. Any additions, amendments or modifications to this
Agreement shall be of no force and effect unless in writing and signed by both Tenant and Management Company. 
 8.9 Governing
Law. This Agreement has been executed and delivered in the State of Texas and all of the terms and provisions hereof and the rights and obligations of the parties hereto shall be construed and enforced in accordance with the laws thereof.

 8.10 Captions and Headings. The captions and headings throughout this Agreement are for convenience and reference only, and
the words contained therein shall in no way be held or deemed to define, limit, describe, explain, modify, amplify or add to the interpretation, construction or meaning of any provision of or the scope or intent of this Agreement nor in any way
affect this Agreement. 
 8.11 Non-Recourse Nature of Tenant’s Obligation. Notwithstanding anything else herein
contained, the obligations of Tenant hereunder shall be limited to its interest in the Facility and the revenues thereof and Receivables and accounts related thereto, and Management Company shall have no right to proceed against any other assets of
Tenant to satisfy any obligation of Tenant. No officer, director, or member of Tenant shall have any personal liability hereunder. 
 8.12
HIPAA Compliance. The parties agree that, to the extent required by Legal Requirements, the services provided under this Agreement will comply in all material respects with all federal and state-mandated regulations, rules, or orders
applicable to the services provided herein, including but not limited to regulations promulgated under Title II, Subtitle F of the Health Insurance Portability and Accountability Act (Public Law 104-91) (“HIPAA”). 

8.13 Additional Reports. In connection with Tenant’s responsibility to maintain effective internal controls over financial
reporting and the Tenant’s requirements for complying with the Sarbanes Oxley Act of 2002, Management Company hereby agrees to provide, as an Operating Expense, access and reasonable assistance as may be requested by Tenant that will

  
 34 

 
allow Tenant to conduct activities necessary to satisfy its responsibilities, as previously outlined, including, without limitation, the activities stipulated by the Public Company Accounting
Oversight Board in its 2004-1, or other similarly promulgated guidance by other regulatory agencies. Management Company hereby agrees to provide, at Tenant’s request and as an Operating Expense, (i) evidence of Management Company
documented policies regarding “whistleblower” procedures and regarding the reporting of fraud or misstatements involving Facility financial reporting, and (ii) access for the Tenant to conduct such procedures as Tenant reasonably
considers necessary to make a determination that Management Company has maintained an effective system of internal controls over financial reporting. In addition to the foregoing, Management Company shall provide Tenant with access to the books and
records of the Facility in order to perform miscellaneous other internal audit procedures as deemed reasonably appropriate by Tenant. Notwithstanding the other terms, covenants and conditions of this Section 8.13, the parties acknowledge
and agree that Management Company shall have no responsibility or obligation with regard to Tenant’s obligations stipulated by the Public Company Accounting Oversight Board or under the Sarbanes Oxley Act of 2002, except to comply with requests
which may be made by Tenant under this Section 8.13. 
 (Signature Page to Follow) 

  
 35 

 IN WITNESS WHEREOF, the parties hereto have executed, sealed and delivered this Agreement through
their duly authorized representatives, as of the day and year first above written. 
  

							
	TENANT:	 		 	CHP RAIDER RANCH TX TENANT CORP., a Delaware corporation
				
		 		 	By:	 	/s/ Tracey B. Bracco
		 		 	Name:	 	Tracey B. Bracco
		 		 	Title:	 	Vice President
			
	MANAGEMENT COMPANY:	 		 	INTEGRATED SENIOR LIVING LLC, a Texas limited liability company
				
		 		 	By:	 	/s/ Craig W. Spaulding
		 		 	Name:	 	Craig W. Spaulding
		 		 	Title:	 	Manager

  
 S-1 

Signature Page to Management Services Agreement (Raider Ranch) 

 EXHIBIT A 

REQUIRED INSURANCE 

[Intentionally Omitted] 

EXHIBIT B 
 2013
Approved Operating Budget 
 [Intentionally Omitted] 

2013 Approved Capital Budget 

[Intentionally Omitted] 

EXHIBIT C 

QUARTERLY CERTIFICATION 

[Intentionally Omitted] 

SCHEDULE 6.2(E) 

MANAGEMENT COMPANY ORGANIZATIONAL CHART 

[Intentionally Omitted]EX-10.9

 Exhibit 10.9 

DEVELOPMENT SERVICES AGREEMENT 

This Development Services Agreement (“Agreement”) is made and entered into as of the 19th day of August, 2013, by and
between CHP RAIDER RANCH TX SENIOR HOUSING OWNER, LLC, a Delaware limited liability company (“Owner”), and SOUTH BAY PARTNERS, LTD., a Texas limited partnership (“South Bay”). 

R E C I T A L S: 

A. Owner is acquiring real property consisting of tracts of vacant land with a street address of 6548 43rd Street, Lubbock, Texas 79407 (hereinafter referred to as the “Property”), which is in proximity to The Club at Raider Ranch and The Isle at Raider Ranch senior living facilities in
Lubbock, Texas, to construct on the Property a senior living housing project comprised of certain villas and/or a stand-alone independent senior living facility to be constructed in phases (collectively, the “Project”); 

B. Owner wishes to employ the services of South Bay for the furnishing of services to and for the benefit of Owner in connection with the
development of the Project; and 
 C. The parties hereto desire to enter into this Agreement to evidence the respective rights and
obligations of the parties with respect to the development of the Project. 
 NOW, THEREFORE, for and in consideration of the premises, the
mutual covenants and agreements contained herein and Ten and No/100 Dollars ($10.00) and other good and valuable consideration received by each of the parties hereto, Owner and South Bay hereby agree as follows: 

1. Commencement Date and Term. This Agreement shall become effective on the date, if any, that Owner acquires the Property
(“Effective Date”) and shall continue until the date that all Phases (hereinafter defined) have been constructed upon the Property, there are no further Phases contemplated to be developed on the Property, and the Owner accepts the
completion of the final “punch list” required to be performed by the general contractor employed to construct all Phases (or, if later, the date on which the services described in Section 4 have been completed), subject to the rights
of Owner and South Bay to terminate this Agreement as provided herein. A “Phase” shall mean each portion of the Project with its own Development Budget (as defined in Section 4(d)). This Agreement shall be void ab initio
if that certain Purchase and Sale Agreement between Raider Ranch, LP, and CHP Partners, LP dated as of July 3, 2013 terminates without Owner acquiring the Property. 

2. Appointment and Acceptance; Standard of Care. Owner hereby appoints South Bay to act as an agent for Owner with respect to the
services to be rendered hereunder, and South Bay hereby accepts such appointment subject to the terms and conditions herein set forth. South Bay shall perform its services hereunder in accordance with the standard of care used by development
managers that provide services similar to the services provided for herein for projects of a type, size, and quality similar to the proposed Project in the same market area as the Property (the “Standard of Care”). South Bay’s
breach of the Standard of Care in connection with its services hereunder will constitute a breach of this Agreement. 

 3. Communications and Cooperation with Owner. 

(a) South Bay shall keep Owner fully informed on a regular basis regarding all material matters relating to the proposed
Project and the development and construction thereof. Without limitation, South Bay shall: 
 (i) within ten (10) days
after receipt of notice by South Bay, notify Owner of any filing of a construction lien claim against the Property, or similar lien or encumbrance against any materials or equipment incorporated or to be incorporated into the Project or any funds
related to the Project (any of the foregoing, a “Lien”). 
 (ii) within ten (10) days after receipt of
notice by South Bay, advise Owner of any complaints, claims, or disputes of which South Bay is aware that are asserted by or against the proposed Project or the construction thereof. 

(iii) regularly communicate with Owner regarding the progress of the proposed Project and the construction thereof. 

(iv) within ten (10) days following the end of each month, prepare and deliver to Owner a written report (a
“Monthly Progress Report”) on development of the Project (but only during such time that construction of any Phase is underway) for the prior month in a form approved by Owner, which shall include an accrual-basis balance
sheet/trial balance sheet, a weekly check register through the end of the preceding month, and such other information and updates as shall be reasonably requested by Owner. 

(b) South Bay shall cooperate in good faith with Owner’s requests in connection with the services to be provided
hereunder. South Bay shall also use diligent efforts to implement Owner’s policies, procedures, and decisions that are adopted or made in connection with the design, development, and construction of the Project upon notice from Owner. South Bay
shall respond within ten (10) days to any written questions or requests from Owner regarding matters related to such services or the Project. 

(c) South Bay shall notify Owner of any regular meetings of the development team and any other appropriate parties during the
course of development and construction of the Project at least ten (10) days (or as soon thereafter as is reasonably practicable) prior to such meetings and South Bay shall permit attendance by Owner and agents and representatives of Owner at
such meetings. South Bay shall also meet with representatives of Owner (together with development team members and others, if any, that Owner may designate) at such times as Owner may reasonably request. 

  
 2 

 (d) South Bay shall maintain books and records for the Project, including
originals (or copies thereof to the extent originals are not available) of all contracts, change orders (including, without limitation, Material Change Orders (hereinafter defined)), drawings, plans, specifications, and the like, and at Owner’s
request, make the same available to Owner at all reasonable times. To the extent applicable, the accounting records constituting a part of such documents shall be maintained in a professional and businesslike manner, in accordance with customary
development practices. In addition, at Owner’s request, South Bay shall use commercially reasonable efforts to cause the general contractor to make the shop drawings and product data available to Owner at all reasonable times. 

4. Administrative and Management Services. South Bay shall provide for Owner such services with respect to the Property as set forth
herein. South Bay’s services shall be performed on behalf of Owner and shall consist of the duties set forth below. Subject to the provisions of Section 5, South Bay is authorized to and shall perform the following: 

(a) In connection with the pre-development phase of the Project: 

(i) Consult with the Owner to determine the nature and scope of the Project. 

(ii) Coordinate and supervise the obtaining of all planning and building approvals and other permits required for the
construction of the Project, and any subdivision or re-platting required in connection thereto. Not less than ten (10) days prior to the commencement of work on any Phase, South Bay shall prepare and deliver to Owner a schedule of all building
approvals and other permits required to complete such Phase and include an update to such schedule in each Monthly Progress Report. 

(iii) Arrange for the preparation, subject to the approval of Owner, of boundary line surveys, ALTA surveys, as built surveys,
topographic surveys, soil tests, and other similar surveys and tests related to the usability of the Property and the development of the Project, and advise Owner of any unexpected or important results that could have a material effect on the
development and construction of the Project, and recommend to Owner appropriate actions. 
 (iv) Negotiate with federal,
state, and local authorities regarding all site-related utility, traffic and transportation issues. 
 (v) At the appropriate
time, recommend to Owner and engage, in accordance with the terms and conditions of this Agreement, one or more contractors to assist in the relevant pre-development or pre-construction services, without prejudicing the selection of the principal
general contractor. 
 (b) Negotiate in the name of and on behalf of Owner, and submit to Owner for its approval and
execution the following: 
 (i) one or more construction contracts with general contractor(s) (each, a
“Contractor”) to construct each Phase upon the Property, which construction contract(s) shall be on the standard AIA form of agreement on a stipulated sum or guaranteed maximum price basis, with such modifications thereto as are
requested or approved by Owner (each, a “General Construction Contract”); 

  
 3 

 (ii) one or more contracts with architects (each, an
“Architect”) for the design of each Phase upon the Property (each an “Architect’s Contract”); 

(iii) one or more contracts with engineering and professional firms (each, an “Engineering Firm”) for the
design of each Phase (each, an “Engineering Contract”); and 
 (iv) those contracts with other professionals
(“Professionals”) that are reviewed and approved by Owner pursuant to Section 5(a) herein below, in connection with the design and construction of each Phase (each an “Other Contract,” and collectively with
each General Construction Contract, Architect’s Contract and Engineering Contract, the “Owner’s Development Agreements”). 

It is acknowledged and agreed that this Agreement contemplates that South Bay will handle all day-to-day matters under Owner’s Development
Agreements and shall administer Owner’s rights and obligations under Owner’s Development Agreements. Accordingly, where permitted, in the context of each Owner’s Development Agreement, South Bay shall be identified as
“Owner’s Representative” or such similar term, appointing South Bay as the party to receive and deliver notices from and to the counterparty of such Owner’s Development Agreement on Owner’s behalf and empowering South Bay to
enforce Owner’s rights under such Owner’s Development Agreement. Owner shall look solely to each Contractor, Architect, Engineering Firm, and Professional for the content of the services performed by such Contractors, Architects,
Engineering Firms and Professional (and the professionals and service providers engaged and/or supervised by such parties) under the Owner’s Development Agreements; provided however, the immediately preceding clause shall in no way limit
the liability of South Bay for its failure to comply with its obligations under this Agreement. 
 (c) Negotiate and enter
into such other contracts as South Bay shall deem necessary or required in connection with the design, planning, and construction of each Phase on the Property in accordance with the approved Development Budget (each, individually, a “South
Bay Development Agreement” and collectively, the “South Bay Development Agreements”). 
 (d)
Prepare budgets for the development of the Property for the period from the Effective Date to the date of issuance of certificate(s) of occupancy for the final Phase by the applicable authority of the municipality in which the Property is situated
and periodically update the budgets, subject to Owner’s approval, including the pre-development budget, the construction budget and a composite budget (the “Development Budget”) accounting for all development costs including
hard and soft costs, reserves for operating shortfalls during the lease-up of the Project, a cost overrun contingency, legal fees and the Development Fee, but which shall exclude South Bay’s overhead and

  
 4 

 
corporate office costs. After the Owner and South Bay have finalized a Development Budget, it shall be attached to this Agreement as Exhibit “B”. Notwithstanding any language to
the contrary herein, Owner and South Bay acknowledge that there will be multiple Development Budgets, one for each Phase, with Phase I contemplated to include a stand-alone independent living facility and multiple villas and with the Phase I
Development Budget to be the first Development Budget to be attached to this Agreement as Exhibit “B”. All references to the contingency line item or words to like effect shall mean the contingency line item(s) in the Development
Budget. 
 (e) Supervise Architect in the preparation of architectural plans, drawings and specifications for the Project.

 (f) Arrange and supervise the preparation by Architect of a schematic design set, pricing set and construction set of
drawings. 
 (g) Supervise the Engineering Firm in the preparation of a civil site plan, drawings, and specifications for the
Project. 
 (h) Supervise the procurement of bids for the development and construction of the Project, provided that
(i) all bid documents, including forms of agreements between Owner and the Contractor and other ancillary forms, will require Owner’s prior approval, (ii) South Bay shall notify Owner in writing twenty (20) days in advance of
when an agreement will be needed to be included in a bid package, to give Owner adequate time to prepare a form of agreement for inclusion in the bid package, and (iii) if Owner elects not to provide a form of agreement, South Bay shall
nevertheless cause the proposed form of agreement to conform to any requirements of Owner. Notwithstanding the foregoing, with respect to bids for subcontracts under the General Construction Contract(s) with a Contractor, South Bay’s only
obligation shall be to ensure that such General Construction Contract contains provisions with respect to the foregoing requirements. 

(i) Use diligent efforts to keep the development and construction costs from exceeding the Development Budget as a whole and on
a line item basis (subject to South Bay’s rights to make certain reallocations within the Development Budget as expressly provided in Section 4(o) of this Agreement), including developing and implementing a procedure or system of cost
control and track actual and projected costs. 
 (j) Assign to the development and construction of the Project such staff as
may be reasonably required to perform its services hereunder in accordance with the Standard of Care and to monitor the timely completion of the Project, including a project manager, all of whom must be actively involved in development and
construction of the Project at all times during the course of the development and construction of the Project, and must visit the Property with sufficient frequency so that South Bay may perform its services hereunder in accordance with the Standard
of Care. 

  
 5 

 (k) Establish (subject to Owner’s approval), direct, coordinate, administer,
monitor and supervise the performance of the other members of the Project development team, including the Contractor, Architect, Engineering Firm or other Professional, or any subcontractors and use commercially reasonable efforts to ensure that
activities and services performed by such parties are in material conformance with the terms of the applicable contracts and the Requirements (hereinafter defined). South Bay shall notify Owner within ten (10) days of South Bay learning that
the services performed by any other members of the Project development team, including, without limitation, the Contractor, Architect, Engineering Firm, Professional or any subcontractors are not in material conformance with the terms of the
applicable contracts or the Requirements. Further, South Bay shall use commercially reasonable efforts to ensure that any corrections to any work that is deficient or out of compliance with the applicable contracts or the Requirements is timely made
by or on behalf of the Contractor. 
 (l) Ensure that Architect is inspecting the Property to determine whether the Project
is being constructed in accordance with the site plan and construction drawings and specifications. 
 (m) Recommend and
advise Owner concerning possible Material Change Orders (hereinafter defined) and cost savings where appropriate and enter into other change orders in accordance with the provisions of Section 6. 

(n) Prepare and deliver to Owner a construction and critical path schedule (including a detailed draw down and trade sequencing
schedule with projected date(s) that each Phase will be completed) and updates thereto delivered with each Monthly Progress Report and as necessary to reflect any material changes thereto. 

(o) Prepare and compile any Draw Request as hereinafter defined and reallocation (a “Reallocation”) of line items in
the Development Budget (both to account for those line items having excess funds and reallocation of contingency line items to other line items that require excess funds), including review and approval of each pay application from the Contractor and
other parties that contracted to perform services and/or supply materials to the development and/or construction of any Phase. South Bay shall deliver and provide Owner with each Draw Request for review, approval, and submission to Project Lender
pursuant to Section 6(b)(ii) of this Agreement. With respect to each Reallocation, South Bay shall provide a copy for Owner’s review and approval (such approval to be deemed given if Owner fails to give notice of disapproval within twenty
(20) days of receipt thereof). Notwithstanding the foregoing, South Bay shall, without Owner’s approval but subject to any limits set forth in any documents evidencing a loan to Owner for the development and construction of a Phase (any
such loan, a “Project Financing”), be entitled to reallocate any contingency line items or cost savings realized under any line items to cover any overages in any other line items in the Development Budget other than overages
(i) for Hard Costs (hereinafter defined) covered under a guaranteed maximum price construction contract or a stipulated price construction contract with the general contractor, or (ii) caused by the gross negligence, willful or wanton
misconduct, fraud, intentional misrepresentation, criminal conduct, bad faith or a knowing violation of law (“Bad Conduct”) or negligence of South Bay or its affiliates, but otherwise South Bay shall have no authority to, and shall
not, permit an expenditure to exceed the amount specified for that expenditure in the Development Budget without the consent of Owner. 

  
 6 

 (p) Arrange for insurance for the development and construction of each Phase of
the Project as reasonably requested by Owner, and/or, if applicable, the lender providing the Project Financing (the “Project Lender”), all of which insurance costs, to the extent not payable by the applicable Contractor, Architect,
Engineering Firm, or other Professional under an Owner’s Development Agreement or South Bay Development Agreement, shall be included in the applicable Development Budget and paid by Owner. Notwithstanding the foregoing, any professional
liability insurance obtained by South Bay shall be at the sole cost and expense of South Bay and shall not be included within any Development Budget, it being understood and acknowledged that South Bay, by execution of this Agreement, has not agreed
to maintain, nor is South Bay required hereby to maintain, any professional liability insurance. 
 (q) Process and use its
commercially reasonable efforts to obtain all necessary site and zoning approvals and licenses, other than healthcare related licenses, if any, for each Phase and for the use and operation of the Project for its primary intended uses as set forth in
the recitals or as otherwise communicated to South Bay by Owner. 
 (r) Facilitate for Owner and the Project Lender a written
construction inspection report of the status of the development of the Project, in a form approved by Owner and any Project Lender, to be provided monthly with the Monthly Progress Report or more frequently, and if required by the Project Lender
prepared by an independent construction inspection consultant (“Consultant”) to be selected by the Project Lender. 

(s) Prepare and deliver to Owner other design or construction cost estimates and reports as required by Owner, including
monthly progress reports, on the progress and cost of construction and, if requested by Owner, make recommendations as to the drawing of funds from any Project Lender to cover the cost of design and construction of the Project. 

(t) Cooperate with Manager in connection with the Marketing Services (as hereinafter defined). 

(u) Use its diligent and commercially reasonable efforts to accomplish the timely completion of the construction of each Phase
in accordance with the plans and specifications and the time schedules for such completion to be approved by Owner. 
 (v)
Coordinate with Architect the issuance of a Certificate of Substantial Completion (as contemplated under AIA Form B141) for each Phase and supervise and conduct with the Architect and general contractor a final inspection of each Phase in the
presence of Owner. Following such final inspection, South Bay shall prepare, in concert with Architect and the general contractor, a final report describing the final punch list items and, after approval thereof by Owner (which approval shall not be
unreasonably withheld, conditioned, or delayed), supervise the general contractor and/or subcontractors, as appropriate, in the satisfaction of such final punch list items in accordance with the terms of this Agreement. 

  
 7 

 (w) Implement any decisions of the Owner made in connection with the design,
development and construction of the Project or any policies and procedures relating thereto. 
 (x) Provide Owner with other
reasonable services in connection with the construction of the Project thereon as are customarily provided by a development manager, and as may be mutually agreed to by Owner and South Bay. 

(y) Assist Owner in complying with the Requirements and use diligent efforts to cause the Project to comply with Requirements,
including using diligent efforts to cause the development team and other contractors, subcontractors, and other consultants that perform work or services for the Project to comply with the Requirements in connection with their work or services.
South Bay shall also itself comply with the Requirements when performing its services hereunder, and without limitation shall at its own expense maintain at all times during the term of this Agreement all licenses, permits, and other certifications
required under applicable laws to perform its services hereunder. “Requirements” means the requirements of this Agreement, the Development Budget, any business plan, any applicable construction schedule, all insurance requirements,
any site plans, any construction drawings and specifications for the Project, applicable laws, all permits issued in connection with the development and construction of the Project, any agreements or other documents to which Owner may be bound that
are disclosed or available to South Bay, and the requirements of any Project Lender, collectively, as the foregoing may be amended or supplemented. 

(z) Use commercially reasonable efforts to ensure that all contract documents for the Project require that all materials and
equipment installed during in the Project will be new unless otherwise specified. 
 (aa) Deliver any additional reports or
deliveries reasonably required by Project Lender (provided, however, that any material third-party costs borne by South Bay on account of such reporting obligations shall be paid or reimbursed by Owner to South Bay within thirty (30) days of
Owner’s receipt of an invoice therefor from South Bay). 
 (bb) Make all payments to service providers required to
develop each Phase to Final Completion (as hereinafter defined) subject to South Bay’s receipt of cost advances and reimbursements which Owner is required to fund pursuant to Section 7 hereof. Further, South Bay shall, subject to South
Bay’s receipt of cost advances and reimbursements which Owner is required to fund pursuant to Section 7 hereof, make all payments required to all third parties in conformity with the requirements of the construction lien law of the State
of Texas so that the Project remains free of mechanics’ liens or any similar claim arising in equity. 

  
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 5. Limitations and Restrictions. Notwithstanding any other provision of this Agreement to
the contrary, South Bay shall not bind or attempt to bind Owner or incur any obligation on behalf of Owner except as herein otherwise specifically provided. Notwithstanding any provisions of this Agreement, South Bay shall not take any action,
expend any sum, make any decision, give any consent, approval or authorization or incur any obligation with respect to any of the following matters unless and until the same has been approved in writing by Owner: 

(a) Approval of all material construction and architectural contracts and all material architectural plans, specifications and
drawings and/or major alteration of any improvements contemplated thereby except for agreements for which Owner provides an express written delegation of approval rights to South Bay. For purposes hereof a material contract or agreement is one in
which the costs to be incurred thereunder exceed $100,000 or more than one (1) year in duration if not cancellable on thirty (30) days’ notice without penalty. 

(b) Any Material Change Order (hereinafter defined). 

(c) Expending more than what South Bay in good faith believes to be the fair, reasonable market value at the time and place of
contracting for any goods purchased or leased, or services engaged on behalf of Owner, or otherwise, in connection with the Project. 

(d) Except in connection with any change order permitted hereunder, modification of the final Owner approved drawings and
specification or Development Budget. 
 (e) Subject to Section 4(n), authorize any expenditure that will exceed the
applicable line item in the Development Budget. 
 (f) Owner shall approve or disapprove the matters set forth in this
Section 5 within ten (10) business days of its receipt of the request for its approval. Any failure by Owner to approve or disapprove the matters set forth in this Section 5 within such ten (10) business day period shall increase
the Project construction schedule by the length of Owner’s delay beyond ten (10) business days in responding to the request for approval. 

6. Change Orders. 

(a) A “Material Change Order” shall be defined as any change order that with respect to any single change involves an
amount in excess of $10,000 or with respect to all changes in the aggregate an amount in excess of $50,000. 
 (b) South Bay
may at any time and from time to time request or propose a Material Change Order (each, a “Developer-Initiated Material Change Order”). Likewise, Owner may at any time and from time to time direct a Material Change Order which Material
Change Order may be based partly or entirely upon the recommendations of South Bay or at Owner’s direction (each, an “Owner-Initiated Material Change Order”). Any Developer-Initiated Material
Change Order or Owner-Initiated Material Change Order shall be governed by the following provisions of this Section 6. 

  
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 (i) Upon South Bay’s receipt of notice from Owner indicating an
Owner-Initiated Material Change Order and at South Bay’s volition in the case of a Developer-Initiated Change Order, South Bay shall, or shall cause the general contractor, to prepare and furnish to Owner a signed statement (each, a
“Material Change Order Proposal”) setting forth South Bay’s or the general contractor’s, as the case may be, best estimate together with supporting documentation therefor (including contractor proposals and all other
support used as the basis for its estimate) of the increase in Development Budget resulting from the proposed Material Change Order. 

(ii) Owner shall render a decision with respect to a Material Change Order within ten (10) days (subject to extension, not
to exceed an aggregate approval period of twenty (20) days, if there is a Project Financing and Project Lender requires in excess of ten (10) days to approve the Material Change Order) of its receipt of such Material Change Order Proposal.
Any failure by Owner to approve or disapprove the Material Change Order proposal within such ten (10) day period shall increase the Project construction schedule by the length of Owner’s delay beyond ten (10) days in responding to the
Material Change Order Proposal. If Owner approves the Material Change Order Proposal, then South Bay shall, or shall cause Contractor to, prepare and deliver to Owner for execution a written Material Change Order authorization (each, a
“Material Change Order Authorization”) that shall (i) authorize and order the accomplishment of the proposed Material Change Order as set forth in such Material Change Order Proposal, and (ii) authorize the budget
adjustment as set forth in such Material Change Order Proposal (and the Development Budget shall be adjusted by the amount of such budget adjustment). 

(iii) South Bay hereby acknowledges that no Material Change Orders shall be permitted hereunder without approval by Owner and
that South Bay shall not proceed with any proposed Material Change Order, or allow any contractor to proceed with any proposed Material Change Order, unless and until the Owner has approved the same. 

(c) Any change order other than a Material Change Order shall be in writing and may be entered into by South Bay on behalf of Owner or Owner
on its own, provided that with respect to change orders entered into by South Bay on behalf of Owner such change order will not (i) violate any Requirements, (ii) result in a deviation from or modification to the Development Budget (after
giving effect to the other anticipated expenditures in that line item, but allowing for permitted deviations, including deviations pursuant to Section 4(n)), (iii) create a reasonably foreseeable risk of adversely affecting the progress of
the construction of the Project or the schedule related thereto, (iv) affect the number of villas or units, as applicable, or (v) materially affect the square footage of villas or units, as applicable, and the party initiating the same
shall promptly provide the other party with a copy of any such Change Order and notice of any budget adjustment on account thereof. Neither Owner nor South Bay shall initiate or approve a non-written change order. 

  
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 7. South Bay’s Fee, Cost Advances/Reimbursements, Promoted Interest Payments and
Management Agreement. 
 (a) Development Fee. In consideration of the services to be rendered by South Bay
hereunder, Owner shall pay to South Bay an amount (“Development Fee”) equal to four percent (4%) of the total Approved Development Costs (hereinafter defined) of each Phase. “Approved Development Costs” shall
mean the development costs set forth in each Development Budget, specifically excluding land acquisition costs, as last approved prior to the commencement of construction of each Phase, plus any costs incurred due to a change in the scope of the
development and construction of the Project requested or initiated by Owner, or due to upgrades in the scope (including those due to legal Requirements) approved by Owner and which were not necessitated by South Bay’s fault. The Development Fee
shall be payable as follows: 
 (i) The Development Fee shall be paid to South Bay in three components: (1) an initial
fee (the “Initial Development Fee”) in an amount equal to twenty percent (20%) of such Development Fee; (2) a portion of the fee (the “Monthly Development Fee”) in an amount equal, in the aggregate, to
seventy percent (70%) of such Development Fee; and (3) the final portion of the fee (the “Final Development Fee”) equal to ten percent (10%) of such Development Fee. 

(ii) The Initial Development Fee shall be paid upon the groundbreaking of construction of each Phase. 

(iii) The Monthly Development Fee shall be paid in equal monthly installments, on the fifteenth (15th) day of each calendar month (or concurrently with any construction draws under the Project Financing) during the period commencing one month after the payment of the Initial Development Fee and
continuing for the estimated number of months to complete construction of the applicable Phase. Notwithstanding anything to the contrary in the foregoing, the Monthly Development Fee shall be no less than Ten Thousand Dollars ($10,000); provided,
however, that if Owner elects to proceed with the construction of a stand-alone senior living facility (as contrasted to villas) on the Property, the Development Fee shall be appropriately reconciled such that South Bay shall receive an aggregate
Development Fee of total Project costs (including all Phases previously completed with respect to which South Bay provided services hereunder), excluding land acquisition costs, of four percent (4%) of total Project costs (including all Phases
previously completed with respect to which South Bay provided services hereunder). Owner may revise the period during which the Monthly Development Fee is paid based upon a more current estimation of the time to complete construction as reasonably
determined by Owner and may amortize the remaining portion of the Monthly Development Fee over the remaining portion of such revised period. If South Bay is terminated under this Agreement, South Bay shall no longer be entitled to receive any
portion of the Monthly Development Fee. 

  
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 (iv) The Final Development Fee for an applicable Phase shall be funded into a
development fee holdback account (“DHA”) thirty (30) days after Final Completion (as hereinafter defined) of the applicable Phase with its own Development Budget. The DHA for an applicable Phase shall be released to South Bay
when the operations of the applicable Phase (i.e., net operating income after a FF&E reserve payment of $500/unit in the first year of operations and increasing at three percent (3%) per annum) support a debt service coverage ratio of
1.10:1.00 for a trailing six (6) month period. Notwithstanding the foregoing, if (i) there is no Project Financing, then an imputed debt of sixty-five percent (65%) loan to value, 30 year amortization, and the interest rate most
recently offered by Fannie Mae and/or Freddie Mac for similar projects will be used, and (ii) if an entire Phase is sold by Owner to a third party not under common control with Owner, the DHA for such Phase shall be released to South Bay.
“Final Completion” means the stage in the progress of the construction of the applicable Phase, after substantial completion when all of the following have been accomplished: (i) the construction of the applicable Phase,
including all “punch list” items, has been completed, and (ii) without limitation, the following have been delivered to Owner (and, as applicable, the Project Lender): 

a) Final and unconditional lien waivers from the Contractor and all other contractors and all subcontractors and materialmen performing work
or supplying materials in connection with the development and construction of the applicable Phase, as well as from any consultants, subconsultants, or trust funds that have lien rights at that time (or, if any of these persons refuse to provide a
final unconditional lien waiver, adequate security in the form of a surety bond, letter of credit, or other collateral or commitment that is sufficient to discharge any claim by that person if established and is reasonably satisfactory to Owner).

 b) If requested by Owner, an ALTA as built completion survey in form reasonably acceptable and certified to Owner and a title company
designated by Owner. 
 c) All evidence of final completion required by Project Lender under the loan documents governing the Project
Financing. 
 d) All maintenance and operating instructions and manufacturer warranties for the applicable Phase. 

e) Written consent (or confirmation of no objection) to applicable final payment from all sureties (if any) that issued bonds in connection
with the construction of the applicable Phase. 
 f) Evidence or certification of satisfaction of all construction and completion
obligations in any guarantees or similar undertakings entered into in connection with any Project Financing or the obtaining of any permits for the for the applicable Phase. 

  
 12 

 g) Any remaining permits required under Requirements, required to operate the for the applicable
Phase for its intended use and which relate to the physical construction of the for the applicable Phase, or otherwise contemplated in this Agreement in connection with the applicable Phase, including the issuance of a final certificate of occupancy
for the applicable Phase, in all cases with no conditions other than those that are reasonably acceptable to Owner. 
 (b)
Cost Advances/Reimbursements and Cost Savings. South Bay shall be advanced and/or reimbursed for any and all costs incurred in connection with the Project including but not limited to architectural costs, engineering costs, market studies and
legal costs if and to the extent such costs are set forth in a Development Budget. All requests for cost advances and/or reimbursement shall be submitted to Owner as follows: 

(i) Owner’s Equity Funding. If cost advances and/or reimbursements are to be funded by Owner, then South Bay shall
submit a request for cost advance and/or reimbursement (an “Owner Cost Request”) to Owner in a form approved by Owner in its reasonable discretion for review and, absent any Owner objection to the matters contained therein, South
Bay shall be paid within twenty (20) days of receipt by Owner. In the event that Owner objects to any item set forth in the Owner Cost Request, then Owner shall (i) provide written notice (an “Objection Notice”) to South
Bay of such within the aforementioned twenty (20) day period (failure to deliver such notice being deemed a waiver by Owner to object to such Cost Request) and (ii) fund those items set forth in such Owner Cost Request that are not found
to be objectionable. Upon delivery of an Objection Notice by Owner, South Bay and Owner shall each use commercially reasonable efforts to resolve the objection set forth in such Objection Notice. 

(ii) Project Lender Funding. If cost advances and/or reimbursements are to be funded by any Project Financing, South
Bay shall submit a draw request (a “Draw Request”) in the form required by Project Lender, for review by Owner. Within ten (10) days of receipt of a Draw Request from South Bay, Owner shall either (i) submit such Draw
Request to Project Lender for payment pursuant to the draw procedures under the governing loan documents or (ii) deliver written notice (a “Draw Objection”) objecting to such Draw Request to South Bay (failure to deliver such
Draw Objection being deemed a waiver by Owner to object to such Draw Request). In the event that Owner delivers a Draw Objection to South Bay per clause (ii) of this subparagraph, then South Bay shall deliver a revised Draw Request to Owner for
review within ten (10) days of delivery of such Draw Objection, in which event the review procedure described above in clauses (i) and (ii) of this subparagraph shall apply with respect to such revised Draw Request. In the event that
the Project Lender objects to a Draw Request submitted to Lender by Owner pursuant to clause (i) of this subparagraph (a “Project Lender Objection”), then South Bay shall submit a revised Draw Request to Owner within ten
(10) days of receipt of notice of such Project Lender Objection and in such event the review procedure described above in clauses (i) and (ii) of this subparagraph shall apply with respect to such Draw Request. 

  
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 It is acknowledged and agreed that it is the intent of Owner and South Bay that all Owner Cost
Requests and Draw Requests proper for funding (e.g., for a payment due under an Owner’s Development Agreement or a South Bay Development Agreement, the cost of which is in a Development Budget) be funded by Owner to South Bay within twenty
(20) days of submission to Owner of the Owner Cost Request or Draw Request, as the case may be, by South Bay. Without limiting the foregoing, if a Project Lender fails to fund a Draw Request which is appropriate for payment under the provisions
of this Agreement, Owner shall make the required payment to South Bay within sufficient time to allow South Bay to make the payment provided for in the Draw Request when due to the applicable contractor; provided however, in no event shall Owner be
obligated to make the payment contemplated by the immediately preceding clause prior to the date that is twenty (20) days after the initial submission of such Draw Request to Owner pursuant to Section 7(b)(ii) above. Further, in no event
shall Owner be required to make such payment if Project Lender’s delay in funding pursuant to such Draw Request is attributable to South Bay’s failure to use commercially reasonable efforts in preparing and submitting a Draw Request that
complies in all material respects with the requirements of Project Lender. 
 (c) Any savings resulting from development of
any Phase at a cost below the cost established for such Phase in the Development Budget will accrue to the benefit of Owner. 

(d) Promoted Interest Payment. In connection with each Phase, South Bay shall have the opportunity to earn a promoted
interest payment as set forth on Exhibit “C” (the “Promoted Interest”). If there is a default by South Bay pursuant to Section 10 which is not cured within any applicable notice and cure periods, or this
Agreement is terminated by South Bay, pursuant to Section 9(b) (failure of groundbreaking to occur within twelve months of Effective Date), the Promoted Interest shall terminate and South Bay shall lose its right to any Promoted Interest which
may have accrued. In all other instances, South Bay’s rights to the Promoted Interest and distributions on account thereof shall survive the termination of this Agreement. 

(e) Management Agreement. It is acknowledged and agreed that the parties contemplate that upon substantial completion of
each Phase, such Phase shall be added as part of the “Facility” by amending the Management Services Agreement (the “Management Agreement”) with Integrated Senior Living LLC (the “Manager”) under which The
Club at Raider Ranch and The Isle at Raider Ranch senior living facilities are managed. Further, prior to the substantial completion of a Phase, Manager hereby agrees to provide certain Pre-Opening Services (as hereinafter defined), to the extent
provided in the applicable Development Budget and paid to Manager, through the date on which each Phase commences operations. “Pre-Opening Services” shall include: 

(i) Recruiting, training, and employing staff required for the Phase; 

(ii) Negotiating concession contracts and leases for the Phase, to the extent required; 

  
 14 

 (iii) Promoting and advertising the Phase, including opening celebrations and
related activities; 
 (iv) Equipping the Phase with the initial inventories required for the operation of the Phase; and

 (v) In general, rendering such other miscellaneous services incidental to the preparation and organization of the
Phase’s operations as may be reasonably required for the Phase to be adequately staffed and capable of operating on the opening date contemplated by the construction schedule, including the development and implementation of marketing and sales
programs, accounting and budgeting controls and similar operation items. 
 8. Guaranties. Prior to groundbreaking on each
Phase, Craig W. Spaulding (the “Completion Guarantor”) shall provide a completion guarantee in customary form reasonably acceptable to the Completion Guarantor of completion of the applicable Phase (the “Completion
Guaranty”). The Completion Guaranty will be conditioned upon Owner performing its obligations under this Agreement. Completion Guarantor’s liability under the Completion Guaranty shall not be duplicative of South Bay’s liability
under its indemnity in Section 11(b). 
 9. Default by Owner and Termination. 

(a) In the event of default by Owner hereunder, South Bay shall give Owner written notice of default and an opportunity to cure
such default as follows: 
 (i) With respect to a monetary default, Owner shall have fifteen (15) days to cure; and 

(ii) With respect to a nonmonetary default, Owner shall have thirty (30) days to cure provided that if the breach is not
susceptible to cure within thirty (30) days, if Owner commences to cure said nonmonetary default within said thirty (30) day period and, thereafter, diligently causes such default to be cured, such period shall be extended for an
additional sixty (60) days. 
 (b) South Bay may, by notice to Owner, terminate this Agreement if groundbreaking of
construction of Phase I of the Project does not occur within twelve (12) months after the Effective Date. 
 (c) The
cure period shall commence upon delivery of written notice of default in accordance with the notice provision set forth in Section 14(a). 

(d) In the event the default is not timely cured, South Bay may terminate this Agreement and/or bring suit for actual damages
actually incurred by South Bay (but not for indirect, incidental or consequential damages) as South Bay’s sole and exclusive remedies hereunder subject to the indemnities in Section 11(a). 

  
 15 

 10. Default by South Bay and Termination. 

(a) Owner may by notice to South Bay terminate this Agreement, if any of the following events occurs: 

(i) any breach by South Bay under this Agreement, if, with respect to a monetary default, the breach is not cured within
fifteen (15) days, and with respect to a nonmonetary default, the breach is not cured with thirty (30) days, provided that if the breach is not susceptible to cure within thirty (30) days, if South Bay commences to cure said
nonmonetary default within said thirty (30) day period and, thereafter, diligently causes such default to be cured, such period shall be extended for an additional sixty (60) days. Any cure period hereunder shall commence upon delivery of
written notice of default in accordance with the notice provision set forth in Section 14(a); 
 (ii) a failure by
Guarantor to make payments required under the Completion Guaranty if such failure is not cured within fifteen (15) days after delivery of written notice of default in accordance with the notice provision set forth in Section 14(a); 

(iii) with respect to South Bay, there is (a) a case under Title 11 of the U.S. Code, as now constituted or hereafter
amended, or under any other applicable federal or state bankruptcy law or other similar law, (b) the appointment of (or a proceeding to appoint), (c) an attachment, execution or other judicial seizure of (or a proceeding to attach, execute
or seize) a substantial property interest, (d) an assignment for the benefit of creditors or (e) insolvency, dissolution or liquidation; provided, however, that an event described in clause (a), (b) or (c) shall not be included
if the same is (1) involuntary and not at any time consented to, (2) contested within thirty (30) days of commencement and thereafter diligently and continuously contested and (3) dismissed or set aside, as the case may be,
within ninety (90) days of commencement; 
 (iv) South Bay or any of its affiliates engage in Bad Conduct in connection
with the Project; or 
 (v) South Bay suspends or discontinues its services hereunder without Owner’s prior approval and
for reasons other than Owner’s failure to pay amounts due to South Bay under this Agreement or Owner’s default or material breach hereunder, and fails to recommence such services within ten (10) days after receipt of notice from
Owner. 
 (b) Owner may, by notice to South Bay, terminate this Agreement if any of the following events occurs: 

(i) if there are one or more delays in the original construction schedule for any Phase that in the aggregate exceed 120 days
for such Phase (except to the extent caused by a change in the schedule imposed or approved by Owner, other delay caused by Owner, or delay caused by force majeure), except that Owner shall exercise any termination under this Section 10(b)(i)
with respect to a given delay no later than 60 days following the later of (i) Owner’s receipt of written notice from South Bay of the delay or (ii) the end of the delay; 

  
 16 

 (ii) the failure by South Bay, in the good faith judgment of Owner, to provide
effective management of the development and construction of the Project pursuant to this Agreement if such failure (i) has or is expected to have a material and adverse effect upon Owner or the Project, and (ii) is not cured within the
cure period applicable under this Agreement. 
 (c) In the event of termination under this Section 10, Owner shall pay
South Bay within thirty (30) days after the date of termination the portion of the Monthly Development Fee that has accrued as of the date of the termination and remains unpaid, except that in the case of a termination under Section 10(a),
the foregoing payments will be reduced by expenses, losses, damages, and liabilities incurred by Owner or its affiliates that arise out of South Bay’s default. No portion of the Final Development Fee that has not been paid as of the termination
date will be payable in connection with a termination of this Agreement under Sections 10(a) or 10(b). 
 (d) Upon the
termination (whether by expiration of time or otherwise) of this Agreement, South Bay shall promptly (a) surrender and deliver to Owner any space in the Property or Project occupied by South Bay clean and free of debris and South Bay’s
personal property, (b) deliver to Owner or to Owner’s designee any funds of Owner held by South Bay with respect to the development and construction of the Project, (c) upon Owner’s request, deliver to Owner or its designee all
records and keys in South Bay’s possession or control in connection with the Project, (d) assign any and all of South Bay’s rights and/or warranties under the South Bay Development Agreements to Owner, and (e) furnish all
information and, at Owner’s sole cost and expense, take all action as Owner may reasonably require (including cooperating with a new developer for such time as may be required by Owner) to effectuate an orderly, efficient, and systematic
transfer of South Bay’s duties and obligations under this Agreement to a new person designated by Owner. South Bay shall deliver to Owner a final accounting of development and construction of the Project up to and including the effective date
of the termination within fifteen (15) days after that effective date. South Bay may, at South Bay’s expense, retain a copy of any records, subject to Section 14(k). 

11. Indemnity. 

(a) Owner hereby indemnifies, defends, and holds South Bay, its partners, members, directors, officers, agents, and employees
harmless of and from all actual damages, including attorneys’ fees and expenses incurred, paid or suffered by South Bay and claims asserted against South Bay, its partners, members, directors, officers, agents, and employees to the extent
arising out of or relating to (i) any breach by Owner of a requirement under this Agreement, or (ii) any Bad Conduct of Owner in connection with any matter related to this Agreement or the development and construction of the Project
(except where arising out of the negligence or willful misconduct of South Bay or any of its employees, its partners, members, directors, officers, or agents). 

  
 17 

 (b) South Bay hereby indemnifies, defends, and holds Owner, its partners,
members, directors, officers, agents, and employees harmless of and from all actual damages, including attorneys’ fees and expenses incurred, paid, or suffered by Owner and claims asserted against Owner, its partners, members, directors,
agents, and employees to the extent arising out of or relating to (i) any breach by South Bay of a requirement under this Agreement or (ii) any Bad Conduct of South Bay in connection with any matter related to this Agreement or the
development and construction of the Project (except where arising out of the negligence or willful misconduct of Owner or any of its employees, its partners, members, directors, or agents). 

12. Key Principals. Craig W. Spaulding, an individual, shall at all times during the term of this Agreement, if alive,
(a) be an active member of South Bay, (b) maintain decision making control with respect to South Bay, and (c) hold, directly or indirectly, at least a fifty-one percent (51%) equity interest in South Bay, provided, that any
interests owned by or held in trust for members of Craig W. Spaulding’s family shall be deemed owned by Craig W. Spaulding. 

13. Conveyance by Owner. The parties acknowledge and agree that Owner anticipates conveying each Phase to an entity
under common control with Owner upon substantial completion of each Phase. Such conveyance shall be conditioned upon such entity under common control with Owner assuming the obligations under this Agreement concerning the payment of the Promoted
Interest to South Bay. Further, South Bay covenants and agrees to cooperate in connection with such conveyance and in connection with the transitioning of the Phase to management by Manager under the Management Agreement. 

14. Miscellaneous. 

(a) All notices, approvals and other communications provided for in this Agreement shall be in writing and may be delivered
(i) personally, (ii) by United States registered or certified mail, postage prepaid, (iii) by Federal Express or other reputable courier service regularly providing evidence of delivery (with charges paid by the party sending the
notice), or (iv) by facsimile or as a PDF or similar attachment to an email, provided that such telecopy or email attachment shall be followed within one (1) business day by delivery of such notice pursuant to clause (i), (ii) or
(iii) above. Any such notice to a party shall be addressed to the following address (subject to the right of a party to designate a different address for itself by notice similarly given): 

TO SOUTH BAY: 
 South Bay
Partners, Ltd. 
 5307 East Mockingbird Lane 

Suite 1010 
 Dallas, Texas 75206

 Attention: Craig Spaulding 

Office: 214-800-2855 
 Telecopier:
214-370-2699 
 Email: cspaulding@southbayltd.com 

  
 18 

 With Copy To: 

Arent Fox LLP 
 1717 K Street, NW

 Washington, DC 20036 

Attention: Kenneth S. Jacob, Esq. 

Office: 202-775-5750 
 Telecopier:
202-857-6395 
 Email: kenneth.jacob@arentfox.com 

TO OWNER: 
 CHP Raider
Ranch TX Senior Housing Owner, LLC 
 c/o CNL Healthcare Properties, Inc. 

CNL Center at City Commons 
 450
South Orange Avenue, 12th Floor 
 Orlando, Florida 32801-3736 

Attention: Holly J. Greer, Esq., SVP and General Counsel and 

Joseph T. Johnson, SVP and Chief Financial Officer 

Office: 407-540-7500 
 Telecopier:
407-540-2544 
 E-mail: Holly.Greer@cnl.com 

E-mail: Joseph.Johnson@cnl.com 

With Copy To: 
 Lowndes, Drosdick,
Doster, Kantor & Reed, P.A. 
 215 N. Eola Drive 

Orlando, FL 32801 
 Attention:
William T. Dymond, Jr., Esq. 
 Office: 407-418-4600 

Telecopier: 407-843-4444 
 E-mail:
William.Dymond@lowndes-law.com 
 TO MANAGER (only to be given with respect to matters relating to Section 7(e)
(Management Agreement)): 
 Integrated Senior Living LLC 

3110 W. Southlake Blvd. 
 Suite
120 
 Southlake, Texas 76092 

Attn: Mr. Richard E. Simmons 

  
 19 

 And 

South Bay Partners, Ltd. 
 5307
East Mockingbird Lane 
 Suite 1010 

Dallas, Texas 75206 
 Attention:
Mr. Charles D. Hammonds 
 With a copy to: 

Arent Fox LLP 
 1717 K Street,
N.W. 
 Washington, D.C. 20036-5342 

Attn: Kenneth S. Jacob, Esq. 

Service of any such notice or other communications so made shall be deemed effective on the day of actual delivery (whether accepted or
refused) as evidenced by printed confirmation if by facsimile (provided that if any notice or other communication to be delivered by facsimile or email attachment as provided above cannot be transmitted because of a problem affecting the receiving
party’s facsimile machine or computer, the deadline for receiving such notice or other communication shall be extended through the next business day), as shown by the addressee’s return receipt if by certified mail, and as confirmed by the
courier service if by courier; provided, however, that if such actual delivery occurs after 5:00 p.m. (local time where received) or on a non business day, then such notice or communication so made shall be deemed effective on the first business day
after the day of actual delivery. Except as expressly provided above with respect to certain email attachments, no communications via electronic mail shall be effective to give any notice, request, direction, demand, consent, waiver, approval or
other communications hereunder. 
 (b) If any term or provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to the persons or circumstances other than those as to which it is held invalid or unenforceable, shall not
be affected thereby; and, each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 

(c) This Agreement contains the entire agreement between the parties hereto with respect to the matters herein contained, and
any agreement hereafter made shall be ineffective to effect any change or modification, in whole or in part, unless such agreement is in writing and signed by the party against whom enforcement of the change or modification is sought. 

(d) Neither Owner nor South Bay may assign all or part of this Agreement without the prior written approval of the party. This
Agreement shall be binding upon and inure to the benefit of Owner and South Bay, as well as to their respective successors and assigns, where permitted hereby. 

  
 20 

 (e) Should any claim, action, or proceeding be commenced between the parties
arising out of or relating to the development and construction of the Project or this Agreement, the party prevailing in that claim, action, or proceeding will be entitled to recover from the non-prevailing party its reasonable attorneys’ fees
and other expenses incurred in connection with that claim, action, or proceeding. 
 (f) South Bay shall perform its services
with integrity, and shall disclose and avoid conflicts of interest. South Bay represents that it has not and shall not pay or receive any contingent fees or gratuities to or from any other party in connection with its services hereunder, to secure
preferential treatment or otherwise. South Bay shall deal at arm’s length with all third parties, including affiliates of South Bay and any other persons with which South Bay or its affiliates have a significant relationship. Other than in
connection with agreements or other arrangements between entities controlled by either Craig Spaulding or Richard E. Simmons, if any affiliates of South Bay or any of these other persons may become involved in the development and construction of the
Project, South Bay shall promptly disclose the affiliation or other relationship to Owner, and shall not permit the involvement unless Owner consents in writing. 

(g) Time is of the essence of this Agreement. 

(h) THIS AGREEMENT HAS BEEN MADE AND EXECUTED IN, AND SHALL BE GOVERNED BY THE LAWS OF, THE STATE OF TEXAS. 

(i) Nothing contained herein shall be deemed to create a joint venture, partnership, or similar relationship between the
parties. 
 (j) This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same
agreement. Facsimile copies of this Agreement shall be deemed originals for purposes of determining the enforceability of this Agreement. 

(k) Except as Owner may otherwise agree in writing, South Bay shall keep confidential and shall not disclose to any person any
non-public information relating to the Project, the Property, or Owner, except that South Bay may disclose this information (a) to its officers, employees, attorneys, accountants and representatives involved in this Agreement, (b) to the
Project development team and others who are under direct or indirect contract with the Owner or South Bay, and their officers and employees, who need to know the information to perform their work in connection with the Project, (c) to
government officials who need to know the content of the information to issue approvals or administer applicable laws, and (d) as required by applicable laws. South Bay shall not issue any public announcement or press release relating to the
Project without Owner’s specific prior written consent. This Section 14(k) will survive the termination of this Agreement for one year. 

(l) In connection with any litigation arising out of or relation to the developmental and construction of the Project, the
services to be provided hereunder, or this Agreement, the parties waive all rights to have the dispute resolved in a trial by jury. 

  
 21 

 (m) This Agreement does not (a) confer any rights or remedies on any person
other than the signatory parties to this Agreement and their respective successors and permitted assigns; (b) relieve or discharge the obligation or liability of any third persons to any party; or (c) otherwise create any third party
beneficiary rights. 
 [Remainder of Page Intentionally Left Blank] 

  
 22 

 EXECUTED as of the date first above written. 

 

			
	 OWNER:
  

CHP RAIDER RANCH TX SENIOR
 HOUSING OWNER, LLC,

a Delaware limited liability company

		
	By:	 	/s/ Tracey B. Bracco
	Name: Tracey B. Bracco
	Title: Vice President

 [Remainder of page intentionally left blank] 

 

  
 S-1 

Signature Page to Development Services Agreement 

					
	 SOUTH BAY:
  

SOUTH BAY PARTNERS, LTD.,
 a Texas limited
partnership

		
	By:	 	SBP Interests, L.L.C.,
		 	its General Partner
		 		 	
		 	By:	 	 /s/ Craig W. Spaulding

		 		 	Craig W. Spaulding, Manager

  

  
 S-2 

Signature Page to Development Services Agreement 

  

			
	MANAGER:
	  
 INTEGRATED SENIOR LIVING LLC, a Texas limited liability
company, only with respect to its covenants and obligations contained in Section 7(e) of this Agreement

		
	By:	 	/s/ Craig W. Spaulding
	Name: Craig W. Spaulding
	Title: Manager

  

  
 S-3 

Signature Page to Development Services Agreement 

 Exhibit “A” 

[Intentionally Omitted] 

Exhibit “B” 

Development Budget(s) 

[Intentionally Omitted] 

 Exhibit “C” 

Promoted Interest 
 1. Provided
that NOI (as hereinafter defined) for a Phase (specifically including capital event proceeds) meets or exceeds the Stabilized NOI Threshold (hereinafter defined) for three consecutive months and is continuing on the date that South Bay requests
calculation of the Promoted Interest payment for such Phase pursuant to Section 3, South Bay shall receive (to the extent triggered under Section 3 of this Exhibit “C”) a Promoted Interest payment for such Phase equal to the sum
of the amounts calculated under Sections 1.a. and b: 
 a. (i) After Owner’s member(s) has achieved a twelve percent
(12%) leveraged internal rate of return (“IRR”) (IRR is defined according to the XIRR function in Microsoft Excel) on its contributed capital, a payment equal to twenty percent (20%) of the First Level Amount (hereinafter
defined) to South Bay until a fifteen percent (15%) IRR on its contributed capital has been achieved by Owner; 
 (ii) Thereafter, a
payment equal to thirty percent (30%) of the Second Level Amount (hereinafter defined) to South Bay. 
 b. An additional amount equal
to the sum of (i) the excess of (x) the hypothetical amount of tax (including but not limited to Federal and State (if any) income tax, net investment income tax, and employment tax) imposed on any amount of the Promoted Interest payable
to South Bay under this Agreement and treated as service income assuming the highest marginal Federal and State, if any, income tax rate applicable to an individual living in the State of Texas over (y) the hypothetical amount of tax (including
but not limited to Federal and State, if any, income tax, net investment income tax, and employment tax) imposed on any amount of the Promoted Interest payable to South Bay under this Agreement if such amount was treated as a distribution of
partnership profits to a partner in a partnership assuming the highest marginal Federal and State, if any, income tax rate applicable to an individual living in the State of Texas, plus (ii) an amount to cover the taxes due on the amount
determined under this Section 1.b. Such amount calculated under this Section 1.b is intended to compensate South Bay for the difference between the Promoted Interest being characterized as an interest in partnership profits owned by a
partner in the partnership and it being characterized as a payment for services and shall be interpreted accordingly. 
 2. a. “Stabilized NOI
Threshold” shall mean the NOI level at which the parties agree constitutes a Phase is stabilized, an amount which shall be agreed upon by the parties on a Phase by Phase basis prior to the substantial completion of each Phase. 

b. “Distributable Amount” shall mean the aggregate amount distributed and distributable by Owner to its member(s) on account
of all operating cash flow and capital event proceeds (which shall be deemed to include as hypothetical capital event proceeds, the value of a Phase determined by appraisal pursuant to Section 3.b.) from a Phase through the date on which the
Promoted Interest payment is calculated. 

  
 EXHIBIT C-1 

 c. “First Level Amount” means the greater of (i) zero or (ii) the
Distributable Amount less the dollar amount necessary for Owner’s member(s) to achieve a twelve percent (12%) IRR. 
 d.
“Second Level Amount” means the greater of (i) zero or (ii) the Distributable Amount less the dollar amount necessary for Owner’s member(s) to achieve a fifteen percent (15%) IRR. 

e. “NOI” shall be calculated for each Phase in the same fashion as set forth in the Management Agreement, with
“Revenues” and “Operating Expenses” being those Revenues and Operating Expenses that are specifically attributable and/or allocable to the Phase for which the Promoted Interest is to be calculated. 

3. South Bay shall be permitted to request the calculation of the Promoted Interest for a Phase upon a capital event occurring with respect to such Phase
(i.e., sale or refinancing of the applicable Phase (excluding individual villa sales, construction financings, and any conveyance of the Phase to a party under common control with Owner)) or at any time during the first five years after the opening
of the applicable Phase, subject to the NOI for such Phase having reached the Stabilized NOI Threshold for three (3) consecutive months and at such time: 

a. If the trigger for the Promoted Interest calculation is a capital event, the capital event proceeds component of the Distributable Amount
(absent a request by South Bay to use the appraisal process set forth below) shall be established by the proceeds of all capital events to date. 

b. If the trigger for the Promoted Interest is South Bay’s request or if South Bay elects to use the appraisal process in the case of a
capital event, South Bay will select between the following appraisers: Integra Realty Services, Salus Valuation Group, Inc. and Cushman or Wakefield (the “Appraiser”). The value determined by the Appraiser (the “South Bay
Appraised Value”) less an implied two percent (2%) cost of sale will establish hypothetical capital event proceeds for the Phase provided that the value of an portion(s) of the Phase previously sold shall be determined based on the actual
sale proceeds received by Owner for such portion(s) of the Phase. Owner shall make payment of the Promoted Interest to South Bay within thirty (30) days of receipt of a written notice from South Bay requesting payment of the Promoted Interest,
which notice, to be effective, shall include a complete copy of the appraisal prepared by the Appraiser and the calculation and supporting documentation used by South Bay to determine NOI. Owner shall have the right to object to either (1) the
South Bay Appraised Value or (2) the methodology for the calculation of NOI, by delivery of written counter-notice to South Bay within the aforementioned thirty (30) day period (failure to deliver such written counter-notice being deemed a
waiver by Owner to object to such matters). Upon delivery of such counter-notice, Owner shall have the right to engage a different Appraiser should it disagree with the appraisal submitted by South Bay and/or to prepare and recommend an alternative
methodology for calculating NOI. Owner and South Bay will then (1) work in good faith to reach an agreed upon value for the Phase and/or calculation of NOI or (2) submit the question to an independent third party for resolution. 

  
 EXHIBIT C-2

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