Citigroup Global Markets Inc. 388 Greenwich Street, 19th Floor New York, New York 10013

In an amount not to exceed $3,055,000,000 (the “Maximum Loan Amount”). “Loan Amount” shall refer to the amount of the Loan actually funded by Lender.

Citigroup Global Markets Inc. (“CGMI”, on behalf of Citi; “Citi” means CGMI, Citibank, N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as may be appropriate to consummate the transactions contemplated hereby), JPMorgan Chase Bank, National Association (“JPM”), Barclays Bank plc, a public company registered in England and Wales (“Barclays”) and Column Financial, Inc. (“CF”)

The collateral shall consist of Borrower’s fee or leasehold interest in and to the properties set forth on Exhibit A (each, a “Property” and collectively, the “Properties”). The Properties shall include all of Borrower’s rights under all leases with third party tenants or affiliates, as certified by Borrower, as well as reciprocal easement agreements and other relevant agreements necessary or desirable to operate the Properties.

entry on the second LIBOR business day prior to the start of the next interest accrual period. The “Spread” shall be 310 bps, provided, that, the Spread is subject to flex (“Flex”) (as set forth in that certain Commitment Fee and Flex Letter, dated as of the date hereof, by and between Lender and NorthStar (the “Fee Letter”)).

Option B: The Interest Rate shall be fixed at a per annum rate equal to the greater of (a) the sum of (i) 275 basis points plus (ii) the value of the five (5) year “on the run” U.S. Treasury rate, rounded up to the nearest 1/1000^th of 1%; (b) the sum of (i) 275 basis points plus (ii) the value of the five (5) year “offer side” swap rate (as determined by Lender) rounded up to the nearest 1/1000^th of 1%; and (c) 4.45%; provided, that, the interest rate is subject to the Flex.

In all events the UK Loan (as hereinafter defined) will remain a floating rate loan with a maximum loan term of five (5) years.

For each of Option B and the Combo Option (as defined below), interest is payable monthly and shall be determined monthly on the basis of a 360 day year and the actual number of days elapsed. For each of Option B and the Combo Option, the Loan may consist of Subordinate Financing (hereinafter defined) and component notes, as determined by Lender, and individual coupon rates, which when blended in the aggregate shall equal the aggregate Interest Rate for the entire term of the Loan except in connection with principal prepayments in accordance with the loan documents and following the occurrence and continuance of an Event of Default.

Borrower has been deemed to have selected Option B, but as a condition precedent to the closing of the Loan, Borrower shall on or prior to 60 days before the anticipated closing date of the Loan (i) confirm that the Loan will be closed in accordance with Option B or (ii) select a Loan structure whereby between 10% and 35% of the Loan secured by the US assets (the “US Loan”) shall be a floating rate loan on the terms set forth in Floating Rate Component of Combo Option above and whereby the remainder of the Loan shall be a fixed rate loan on the terms set forth in Option B (the “Combo Option”). In no instance shall any portion of the fixed rate component of the Combo Option be subject to the Call Percentage (as defined below) of the US Loan which is subject to prepayment without a prepayment premium as set forth in Call Protection (Floating Rate Component of Combo Option) set forth below.

amount equal to the Loan Amount.

The form of such interest rate cap agreement shall be subject to Lender’s reasonable approval. The interest rate cap provider (or the guarantor of its obligations) will be required to have a long term senior unsecured debt or counterparty rating of no lower than A+/A2/A from Standard & Poor’s (or if Standard & Poor’s no longer rates interest rate cap providers, then the interest rate cap provider shall have an equivalent rating from DBRS (if rated by DBRS), Moody’s and Fitch (if rated by Fitch), respectively, as well as short term ratings (or, if no short term ratings exist, higher long term ratings) and other requirements (such as the counterparty not being on “Rating Watch Negative”) set forth in the Loan Documents.

At Borrower’s request, in lieu of purchasing an interest rate cap at closing, Borrower shall be permitted to reserve with Lender the amount necessary, in Lender’s reasonable discretion, to purchase an interest rate cap satisfying the conditions set forth in this Term Sheet; provided, that in all events, such interest rate cap shall be purchased prior to any securitization of the Loan or upon Lender’s request upon closing or following closing.

Minimum NOI:

$244,400,000, which shall be based on in-place rent rolls and subject to adjustments to income as described below and expenses based on actual expenses (or if actual expenses cannot be determined, the budgeted expenses). Borrower may request that the Maximum Loan Amount be proportionately reduced if Lender’s underwritten NOI is less than $244,400,000, subject to all other requirements set forth herein.

Medical office buildings (“MOBs”) shall not comprise less than 49% of the total NOI with respect to Properties located in the United States. Hospitals shall not comprise more than 10% of the total NOI with respect to Properties located in the United States.

Minimum DSCR:

At closing, a minimum DSCR equal to 1.35x shall apply based upon Lender’s Underwritten Net Cash Flow and the actual debt service constant. NorthStar may request that the Maximum Loan Amount be proportionately reduced to meet the Minimum DSCR, subject to all other requirements set forth herein.

Minimum Debt Yield:

At closing, the Debt Yield shall equal no less than 8%; provided, that NorthStar may request that the Maximum Loan Amount be reduced to meet the Minimum Debt Yield. “Debt Yield” shall be based on Lender’s Net Operating Income and the anticipated Loan amount.

For purposes hereof “Net Operating Income” (or “NOI”) shall mean Gross Revenues minus Gross Expenses. “Gross Revenues” shall mean the sum of (a) total revenue from tenant leases during the most recent period including reimbursed expenses (excluding bankrupt tenants, tenants not in occupancy or tenants delinquent in paying rent for more

than 60 days (subject to customary exceptions)), annualized, plus (b) all income and proceeds received by Borrowers from the ownership, operation and use of the Properties excluding non-recurring items and non-cash items. “Gross Expenses” shall mean all ordinary costs and expenses related to the ownership, operation, maintenance and management of the Properties excluding any one time expenses, non-recurring items, depreciation and amortization, non-cash items, reserve deposits, debt service on the Loans, capital expenditures or capital reserves and any extraordinary or non-recurring items. For closing purposes, NOI shall be adjusted for actual leases in place based on the most recent rent roll and other customary adjustments such as market rent, market vacancy, market management fees and lease coverage ratios.

For purposes hereof, “Underwritten Net Cash Flow” shall mean NOI, with Gross Expenses being deemed to include amounts required to be deposited into the Lease Rollover Reserve and Replacement Reserve.

A maximum LTV equal to 75% shall apply based on a MAI’s appraised “As-Is” value pursuant to a FIRREA and USPAP appraisal and a maximum LTC equal to 75% based on Borrower’s allocated purchase costs; provided, that NorthStar may request that the Maximum Loan Amount be reduced to avoid exceeding the Maximum LTV/LTC.

All consideration (of whatever form) owed under the Acquisition Agreement (as defined in the Commitment Letter), less the actual Loan Amount.

The Loan shall close and the Loan Amount shall be funded in full on the “Closing Date” (as defined in the Acquisition Agreement), but subject to the Commitment Letter.

For the Floating Rate Component of the Combo Option, two years.

For Option B, five years. 

Extension Option:

For the Floating Rate Component of the Combo Option, Lender will grant Borrower three (3) maturity extension options for a period of twelve (12) months each (the “Extension Period”); provided, that, in addition to the customary conditions set forth in the Loan Documents, the following conditions are satisfied:

(i)     Borrower shall notify Lender of its election to extend the applicable maturity date as aforesaid not earlier than sixty (60) days and no later than thirty (30) days prior the applicable maturity date;

(ii)     no Event of Default exists or is continuing upon Borrower’s notice of extension and at the time of the Extension Period;

(iii)   at the time of each extension, Borrower obtains an interest rate cap agreement for the Extension Period as described above;

(iv)   the Properties achieve a Debt Yield of not less than (a) 8.5% with respect to the second Extension Period (provided, that, if the Debt Yield at closing is higher than 8%, then the Debt Yield test with respect to the second Extension Period shall be not less than the greater of (A) 8.5% and (B) the Debt Yield at closing) and (b) 9.0% with respect to the third Extension Period (provided, that, if the Debt Yield at closing is higher than 8%, then the Debt Yield test with respect to the third Extension Period shall be not less than the greater of (A) 9.0% and (B) 50 bps higher than the Debt Yield at closing). Borrower may prepay the Loan in accordance with the terms and conditions of the loan documents in order to achieve such Debt Yields;

(v)   with respect to the second Extension Period the Spread shall be increased by 25 bps; and

(vi)   each mezzanine loan shall be simultaneously extended with the mortgage loan in accordance with each applicable mezzanine loan agreement.

Amortization:

Interest-only with respect to each of Option B and the Combo Option.

Call Protection (Floating Rate Component of Combo Option):

For the Floating Rate Component of the Combo Option, from the Closing Date through and including the twenty-fourth (24^th) payment date following the Closing Date (the “Open Prepayment Date”), Borrower shall be permitted to prepay the Loan and the mezzanine loan subject to the payment of a spread maintenance premium. Notwithstanding the foregoing, from the Closing Date through the Open Prepayment Date, Borrower shall be permitted to prepay an amount not to exceed the Call Percentage of the US Loan through Property releases without the payment of a spread maintenance premium. “Call Percentage” shall mean (i) if 15% or less of the US Loan is a floating rate loan at closing, the percentage of the US Loan that is a floating rate loan at closing or (ii) if more than 15% of the US Loan is a floating rate loan at closing, 15%.

After the Open Prepayment Date, provided there is no event of default, the Loan shall be pre-payable in whole or in part at any time on thirty (30) days prior written notice without prepayment fee or premium.

Voluntary prepayments (except in connection with a Property release) may be made, at Borrower’s option, to the mezzanine loans, pro rata without a corresponding prepayment of the mortgage loan subject to payment of a spread maintenance premium prior to the Open

Prepayment Date. Notwithstanding the foregoing, any prepayment made in connection with a Property release must be made pro rata between the mortgage loan and any mezzanine loans subject to payment of a spread maintenance premium prior to the Open Prepayment Date (except as expressly set forth above).

All repayments shall include interest on the amount being repaid through the end of the applicable interest accrual period.

For Option B, except in connection with a partial defeasance in connection with a property release in accordance with the Defeasance provisions as set forth below and Property Release Provisions as set forth below, Borrower shall have no right to prepay all or any portion of the Loan except during the last six (6) months of the Loan term (last seven (7) payments including the maturity date) during which the Loan may be prepaid in full, but not in part (which prepayment in full shall include a simultaneous prepayment in full of the mortgage loan and each mezzanine loan). All repayments shall include interest on the amount being repaid through the end of the applicable interest accrual period.

Defeasance (Option B):

For Option B, in accordance with the applicable terms and conditions of the loan documents, the Loan may be defeased in its entirety (or in part in connection with satisfaction of the Property Release Provisions as set forth below) after the earlier to occur of (i) three (3) years from the closing date of the Loan or (ii) two (2) years after the date of the securitization of the last portion of the Loan.

Operating Reserves:

Commencing at closing and continuing on a monthly basis thereafter, an escrow for annual taxes, insurance, ground rent and other assessments, if any, will be required to be made with Lender. Interest on the Operating Reserves will be for the benefit of Borrower.

After due diligence, if it is determined in Lender’s reasonable discretion that the tenants at one or more Properties are paying taxes, insurance premiums and/or ground rent directly to the applicable taxing authorities or other third parties, as applicable, on or prior to their respective due dates pursuant to the terms of their leases, then no deposit shall be required to be made by Borrower into the Operating Reserves with respect to such Properties.

Commencing at closing and continuing on a monthly basis thereafter, an escrow for tenant improvement and leasing commission costs equal to $1.25 per square foot for each MOB Property will be required to be made with Lender. Interest on the Lease Rollover Reserves will be for the benefit of Borrower; provided, that no deposit shall be required to be made into the Lease Rollover Reserve if the Debt Yield is greater than 10%.

leases at the Properties and (ii) any outstanding tenant improvement allowances and/or leasing commissions due in connection with any lease at the Properties.

Commencing at closing and continuing on a monthly basis thereafter, an escrow for replacement reserves equal to (i) $0.30 per square foot with respect to each MOB Property, (ii) $300 per bed with respect to each senior housing Property and each assisted living facility Property, (iii) $500 per bed with respect to each skilled nursing facility Property and (iv) $1000 per bed with respect to each hospital Property (or such higher amount recommended by a property condition report) will be required to be made with Lender. Interest on the Replacement Reserves will be for the benefit of Borrower.

After due diligence, if it is determined in Lender’s reasonable discretion that pursuant to the terms of their leases the tenants at one or more Properties are responsible for the costs incurred in connection with making any replacements or repairs identified in a property condition report, then no deposit shall be required to be made by Borrower into the Replacement Reserves with respect to such Properties.

If deferred maintenance items are identified by Lender’s engineer, Borrower will be required to escrow funds equal to 125% of such costs. The Loan Documents will set forth the time periods in which Borrower shall be required to complete repairs. Interest in the Deferred Maintenance Reserve will be for the benefit of Borrower.

After due diligence, if it is determined in Lender’s reasonable discretion that pursuant to the terms of their leases the tenants at one or more Properties are responsible for the costs incurred in connection with any deferred maintenance items identified by Lender’s engineer, then no deposit shall be required to be made by Borrower into the Deferred Maintenance Reserve with respect to such Properties.

determined by Lender prior to the closing of the Loan) sufficient to correct or collateralize such defects, environmental conditions or shortfalls (not to exceed the allocated loan amount for the Properties in question). In the event that the issue is not curable by the payment of money, or the amount required is not determinable, the amount of the Special Reserves shall be an amount reasonably agreed upon by Borrower and Lender prior to the closing of the Loan not to exceed the allocated loan amount for the Properties in question. At Borrower's election, the Properties in question may be removed from the Properties for the Loan with a commensurate reduction in the Loan Amount. Borrower and Lender shall cooperate reasonably and in good faith to establish a mechanism for the release and use of the funds from the Special Reserves to address the issues for which the same is established. The Special Reserves shall serve as collateral for the Loan, shall be under the dominion and control of Lender, and shall be held in an interest-bearing account with all interest accruing for the benefit of Borrower. Special Reserves shall be capped at $35,000,000 (the “Special Reserves Cap”). To the extent that the allocated loan amounts based on Lender’s underwriting (“Property ALA”) attributable to such defects, environmental conditions or shortfalls exceed the amount of the Special Reserves Cap, then all excess cash flow shall be deposited into the Special Reserves until such time as the amount in excess of the Special Reserve Cap has been reserved.

event a Lockbox Event described in clause (a), (b), or (c) below shall exist, cash flow shall be applied in Lender’s sole discretion and may be held by Lender as additional collateral for the Loan.

For purposes hereof, a “Lockbox Event” shall mean (a) an event of default (“Default Trigger”), or (b) the bankruptcy or insolvency of Borrower, or (c) the bankruptcy or insolvency of Property Manager (“Property Manager Trigger”), or (d) if the Debt Yield based on Lender’s underwritten Net Operating Income falls below (I) 7.3% during the initial term of the Loan and during the first Extension Period, (II) 7.7% during the second Extension Period and (III) 8.1% during the third Extension Period, each calculated on a trailing three (3) month basis, as defined in the Loan Documents (“DY Trigger”).

Borrower shall have the right three (3) times (in the aggregate) to cure a Lockbox Event as follows: (A) if a Lockbox Event exists solely by reason of a Default Trigger, the curing and acceptance of such cure by Lender of the applicable event of default (in its sole discretion), or (B) if a Lockbox Event exists solely by reason of a Property Manager Trigger, within sixty (60) days of the occurrence of such Property Manager Trigger, (i) the replacement of such manager with a qualified manager reasonably acceptable to Lender pursuant to a management agreement reasonably acceptable to Lender or (ii) solely with respect to an involuntary bankruptcy not consented to or colluded in by Property Manager, the dismissal of such bankruptcy, or (C) if a Lockbox Event exists solely by reason of a DY Trigger, the achievement of a Debt Yield based on underwritten cash flow for two (2) consecutive quarters of at least equal to or higher than each applicable DY Trigger on a trailing three (3) month basis as reasonably determined by Lender. In no event shall Borrower have the right to cure a Lockbox Event occurring by reason of a Borrower bankruptcy unless such bankruptcy was involuntary and was not consented to or colluded in by Borrower or its affiliates, in which event Borrower shall be permitted to cure such Lockbox Event occurring as a result of such involuntary bankruptcy within ninety (90) days of the commencement thereof.

any commercially reasonable method permitted to a REMIC trust) exceeds or would exceed 125% immediately after the release of any applicable individual Property, a prepayment of the principal balance of the Loan by an amount not less than the greater of (i) the Release Price or (ii) the least of one (1) of the following amounts: (A) only if the released individual Property is sold, the net proceeds of an arm’s length sale of the released individual Property to an unrelated person, (B) the fair market value of the released individual Property at the time of the release, or (C) an amount such that the LTV after the release of the applicable individual Property is not greater than the LTV of the Properties immediately prior to such release, unless Lender receives an opinion of counsel that, if (ii) is not followed, the securitization will not fail to maintain its status as a REMIC trust as a result of the release of the applicable individual Property; (5) payment to Lender of the then current market fee being assessed by the Loan servicer for such releases in addition to any reasonable legal fees or other reasonable out-of pocket costs incurred by Lender or the Loan servicer to effect the release; (6) payment of all recording charges, filing fees, taxes or other expenses payable in connection therewith; (7) with respect to the Floating Rate Component of Combo Option, payment of a spread maintenance premium (if applicable as described above) and with respect to Option B, satisfaction of the Defeasance conditions as described above; and (8) such other matters typically required for transactions of this nature.

Any non-MOB Property that is operated by an affiliate of Borrower (each, an “Affiliate Operated Property”) shall be financed through an OpCo/PropCo structure whereby one or more indirect subsidiaries of NorthStar will be established for purposes of operating the business at each Affiliate Operated Property (“OpCo”) and one or more indirect subsidiaries of NorthStar will be established for purposes of owning each such Affiliate Operated Property (“PropCo”) and will act as Borrower under the Loan. The PropCo will master lease each Affiliate Operated Property to OpCo under a single master lease. The master lease between PropCo and OpCo shall be in form and substance reasonably satisfactory to Lender, including rent and customary bankruptcy protections such as anti-cherry picking provisions, and shall be fully subordinate to the Loan. If required by the rating agencies, Borrower shall be required to deliver a true lease opinion related to the master lease in form and substance reasonably satisfactory to Lender.

Single Purpose Entity:

Documents (individually, a “Loan Party and collectively, the “Loan Parties”) and in connection therewith shall provide Lender with customary opinions including corporate existence, due authorization, enforceability, validity, and bankruptcy remoteness/non-consolidation regarding the Loan Documents, Borrower, OpCo, NorthStar, Indemnitor and any affiliated entities who are parties to the Loan Documents, and which opinions shall be from counsel reasonably satisfactory to Lender. In addition, Borrower and OpCo will each be required to have at least two independent directors. The independent directors are required to be professional directors provided by a nationally recognized corporate services company. The parent company of OpCo (“Parent TRS”) will not be required to be organized as a special purpose entity but will be subject to certain negative covenants related to restrictions on indebtedness, prohibited activities and equity transfers.

Assumption of the Loan on a one-time basis is permitted pursuant to customary assumption provisions, including, without limitation, that (i) Lender shall be paid an assumption fee equal to $750,000, (ii) the proposed transferee shall satisfy rating agency requirements, (iii) Borrower shall have delivered to Lender a rating agency confirmation with respect to such assumption and (iv) each mezzanine lender shall have approved such assumption (which approval shall not be unreasonably withheld). In addition, the following transactions are permitted and shall not be deemed assumptions for purposes of the preceding sentence: (i) transfers of direct and/or indirect interests in Borrower shall be permitted in accordance with transfer requirements customarily required by lenders on loans similar to the Loan as set forth in the Loan Documents and (ii) changes in the indirect ownership of Borrower and/or reorganization of the indirect owners of Borrower that result in Borrower’s indirect owner becoming a public company pursuant to an initial public offering in accordance with transfer requirements customarily required by Lenders on loans similar to the Loan as set forth in the Loan Agreement, including, without limitation, that Indemnitor shall continue to satisfy the requirements set forth in this Term Sheet and shall continue to own a direct or indirect interest in Borrower (or Borrower shall provide a replacement guaranty from a replacement guarantor reasonably acceptable to Lender), the shares of the common stock of such indirect owner from such initial public offering are listed on a nationally recognized securities exchange and the public company resulting from such initial public offering shall have corporate leverage of no greater than 75%, and a market capitalization (debt and equity) of not less than $3,000,000,000, upon the closing of such initial public offering.

The Properties will be managed by a manager reasonably acceptable to Lender (the “Property Manager”) under property management agreements reasonably acceptable to Lender. The Property Manager may be removed by Lender in its sole discretion upon (i) an event of default under the Loan Documents or management agreement, or (ii) an insolvency or bankruptcy of the Property Manager.

None permitted to be incurred by Borrower during the term of the Loan, except as provided in the Loan Documents.

Borrower will be required to maintain, and provide evidence of, property, casualty and liability insurance with respect to the Properties and Borrower (including, if required, windstorm, flood and earthquake insurance) with no exclusion for acts of terrorism (or if there is an exclusion for terrorism Borrower will obtain terrorism insurance), along with assisted-living specific insurance for Parent TRS/OpCo such as professional liability/general liability insurance, in each case, reasonably acceptable to Lender. Insurers must have claims-paying ratings not lower than A from the rating agencies specified in the loan documents; provided, however, for multi-layered policies, (A) if four (4) or less insurance companies issue the insurance policies, then at least 75% of the insurance coverage represented by the policies must be provided by insurance companies with a claims paying ability rating of “A” or better (and the equivalent) from rating agencies specified in the loan documents, with no carrier below “BBB” (and the equivalent) from rating agencies specified in the loan documents, or (B) if five (5) or more insurance companies issue the insurance policies, then at least sixty percent (60%) of the insurance coverage represented by the policies must be provided by insurance companies with a claims paying ability rating of “A” or better (and the equivalent) from rating agencies specified in the loan documents, with no carrier below “BBB” (and the equivalent) from rating agencies specified in the loan documents. If TRIPRA is not reauthorized, Borrower shall only be required to purchase such terrorism insurance as is available for a premium of not less than two times the then-current cost of the casualty and liability insurance.

Non-recourse to Borrower with Lender’s standard carve-outs in a form substantially similar to those set forth on Exhibit B hereto (the “Recourse Carveouts”). In addition, each of the Loan Documents will be non-recourse to the corporate general partners/managing members or other controlling members/key principals of Borrower; provided, however, that Borrower shall deliver at closing a separate guaranty from Indemnitor covering the Recourse Carveouts.

At all times during the term of the Loan, Indemnitor shall be required to maintain a minimum net worth of $400,000,000.00 (exclusive of the Properties).

Security:

to mezzanine endorsements to owner’s title insurance policies with respect to each of the Properties and (c) UCC Plus or Eagle-9 policies for each mezzanine loan, in each case, in form and substance reasonably satisfactory to Lender (subject to the Special Reserves) and from a national title insurance company or companies reasonably approved by Lender.

Borrower shall provide Lender with copies of (or other reasonably satisfactory evidence of) all material licenses, permits and certificates of occupancy, in each case to the extent applicable, including those necessary for the use and operation of each of the Properties as senior housing, assisted living facilities, skilled nursing facilities or as hospitals.

Borrower shall provide Lender with copies of all ground leases and ground lease estoppel certificates in a form reasonably acceptable to Lender (subject to that certain Commitment Letter by and between NorthStar and Lender (the “Commitment Letter”) with respect to each Property in which Borrower has a leasehold interest. Any failure to deliver any ground lease estoppel certificates for any Property in which Borrower has a leasehold interest shall be addressed as set forth in the Commitment Letter.

Tranching/Conversion of Loan:

Lender shall have the right to have the mortgage loan secured by pledges of equity in the Borrower and Borrower shall be responsible for the payment of all out-of-pocket costs and expenses related to such pledges of equity.

To the extent any of the Properties are located in the United Kingdom (such Properties being hereinafter referred to as the “UK Properties”), Lender reserves the right to create a separate loan secured by the UK Properties (the “UK Loan”). At Lender’s election, the UK Loan may be denominated in U.S. Dollars (“USD”), Euros (“EUR”) or British Pound Sterlings (“GBP”). Lender shall use reasonable efforts to denominate the UK Loan in GBP. With respect to the UK Properties, Lender may require Borrower to put in place certain currency hedges deemed reasonably necessary by Lender and for Borrower to satisfy other customary loan closing conditions for loans secured by UK Properties. In addition, Lender may require that the Interest Rate benchmarks and the time periods for such benchmarks be adjusted. Lender agrees to work with Borrower to manage costs of any such agreements, including by considering in good faith to eliminate some of the need for such currency hedges by making a portion of the Loan be denominated in EUR or GBP to the extent it does not adversely impact Lender’s exit strategy. Borrower shall be responsible for the payment of all out-of-pocket costs and expenses related to the UK Loan. The UK Loan may be governed by the laws of the United Kingdom. In addition, Lender reserves the right to have the UK Loan be recourse to the Indemnitor. Lender agrees to cooperate with Borrower to establish a separate cash management arrangement and appropriate other financial tests with respect to any portion of the Loan that is secured solely by the UK Properties. Any tranching and/or conversion of the Loan before the closing thereof will be conducted in a manner that does not impair or delay the funding of the Loan or result in additional conditions to the funding of the Loan.

Notwithstanding any provision to the contrary, the failure by Lender to convert or elect to convert any portion of the Loan before closing to components or subordinate financing, or the failure by Lender to create or elect to create the UK Loan before closing, shall not abrogate or modify in any way Lender’s obligation herein and under the Commitment Letter to close and fund the Loan on the Closing Date.

provide (A) on a monthly basis, operating statements showing, among other things, monthly and year-to-date operating statements (including capital expenditures), noting net operating income, gross income, and operating expenses and (B) on a quarterly basis (i) a comparison of budgeted income and expenses and the actual income and expenses for such calendar quarter and the year-to-date and (ii) a calculation reflecting the Debt Yield as of the last day of such calendar quarter and (C) any other reporting items customarily required by lenders on loans similar to the Loan. All financial statements shall be prepared in accordance with GAAP or such other accounting basis reasonably acceptable to Lender; provided, that following a securitization of the Loan, the monthly reporting requirements set forth above will only be required on a quarterly basis.

Indemnitor shall be required to provide within one hundred and twenty (120) days of year-end Indemnitor’s annual audited financial statements audited (without footnotes) by either a “Big 4” CPA firm, Grant Thornton LLP or another CPA firm reasonably acceptable to Lender and prepared in accordance with GAAP that contain statements of income and expenses and cash flow and a balance sheet for Indemnitor. Indemnitor shall also be required to provide, together with the foregoing financial statements, a certification of net worth. Indemnitor shall provide unaudited quarterly financial statements (without footnotes) within forty-five (45) days of the end of each of the first three (3) fiscal quarters of each fiscal year that include a balance sheet and a statement of income and loss as well as a certification of net worth. The absence of footnotes in Indemnitor’s statement shall not detract from presenting accurate and complete financial information regarding Indemnitor.

An affiliate of NorthStar may acquire Subordinate Financing in the form of mezzanine debt, provided that an intercreditor agreement among such Borrower affiliate and Lender and/or other Lender documents shall include restrictions regarding the rights of such Borrower affiliate and the exercise of remedies by such Borrower affiliate, in each case with respect to such purchased interests and the remaining portions of the Loan.

Lender and Borrower acknowledge that no broker was involved in arranging, placing or brokering the subject financing.

Borrower consents to Lenders disclosure of the Properties, Borrower’s and its intermediate affiliates’ or principal’s, Indemnitor’s, NorthStar’s, OpCo’s and the Properties’ operating and financial statements in connection with any (i) securitization or (ii) any sale or other disposition of the Loan, subject in this clause (ii) to customary confidentiality protections.

Following the closing of the Loan, Borrower shall, upon request, provide Lender with such information (in order for Lender to sell the Loan, participation interests thereof, creation of Subordinate Financing or to securitize the Loan) regarding the Properties, the Borrower, the Mezzanine Borrower, if any, the Property Manager and their respective affiliates as Lender may reasonably request in order to (i) comply with disclosure laws, (ii) satisfy rating agency inquiries, (iii) satisfy requests from investors or any other interested parties, including any subordinate lender, and (iv) provide the marketplace with such information as is required in similar transactions. If necessary following the closing of the Loan, Borrower agrees to execute (and cause any Mezzanine Borrower to execute) additional documents in connection with the Loan, or loans made to affiliates of Borrower, which have no adverse economic effect (other than to a de minimis extent) on Borrower or affiliates thereof with respect to the loans and do not otherwise increase the obligations (other than to a de minimis extent) or decrease the rights (other than to a de minimis extent) of Borrower or its affiliates. In addition, at Lender’s request, Borrower shall review and comment on any fact in any prospectus, prospectus supplement, private placement memorandum, or similar offering memorandum or offering circular used in connection with a securitization of the Loan in the sections entitled “Risk Factors,” “Special Considerations,” “Description of the Mortgages,” “Description of the Mortgage Loans and Mortgaged Properties,” “The Manager,” “The Borrower” and “Certain Legal Aspects of the Mortgage Loan” (the “Covered Disclosure Information”). Without limitation of the foregoing, Borrower agrees to cooperate with Lender in connection with any other sale or disposition of the Loan (including, without limitation, splitting the Loan into one or more pari passu components each evidenced by a separate note). Indemnitor shall indemnify, subject to customary exceptions, Lender and certain other securitization parties in connection with any material misstatement or material omission of fact in connection with the Covered Disclosure Information which is based upon any information provided by, or on behalf of Borrower to Lender or the rating agencies in connection with a securitization.

Borrower and Lender shall cooperate to update the existing third-party reports for each Property, including, but not limited to, a customary zoning report or reliance letter for each Property, a Phase I (and, if recommended by the Phase I report, Phase II) environmental report, a structural engineering report and a USPAP and MAI FIRREA-compliant appraisal. If any of the reports indicate any legal violations or other deficiencies, the Loan shall be funded in the full amount provided for herein and the deficiencies shall be addressed as described in the “Special Reserves” section above.

the Loan, which shall be paid by Borrower)), including, but not limited to, third party and diligence reports, fees of Lender’s Counsel (as defined in the Commitment Letter), local and appropriate specialty counsel, counsel of the co-lenders with respect to co-lender issues in an amount not to exceed $50,000 in the aggregate, counsel to any purchasers of the mezzanine loans in an amount not to exceed $250,000 in the aggregate, Borrower’s counsel, fees of the insurance consultant and accountants, contract underwriting fees, site inspection fees and fees associated with Borrower’s cooperation hereunder, irrespective of whether the Loan closes (provided, that, Borrower shall not be responsible for the fees of other counsel to Lender except as specifically set forth above).

$3,000,000.00. The Good Faith Deposit less out-of-pocket expenses incurred by Lender shall be refunded to Borrower if, despite Borrower’s commercially reasonable efforts, a closing does not occur. Otherwise, Lender shall retain the Good Faith Deposit as liquidated damages to Lender for its losses and damages related to the failure of the Loan to close. Borrower and Lender acknowledge and agree that such losses and damages are difficult, if not impossible, to ascertain and that the amount of the Good Faith Deposit constitutes a reasonable estimate thereof.

To help fight the funding of terrorism and money laundering activities, pursuant to The U.S. PATRIOT Act, Lender obtains, verifies, and records information that identifies each person and entity with whom we are a non-affiliate that enter into a business relationship. Pursuant to The U.S. PATRIOT Act, when you enter into the business relationship, verification will include (but is not limited to) name, address, corporate tax identification number, date of birth, (applicable to an individual), and other information that will allow us to identify you. We may also ask to see corporate resolutions or other identifying documents from you.

Borrower shall warrant, represent and covenant in the Loan Documents that neither Borrower, Indemnitor nor any of their respective affiliated entities are or will be an entity or person (i) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 24, 2001 ("EO13224"); (ii) whose name appears on the United States Treasury Department's Office of Foreign Assets Control ("OFAC") most current list of "Specifically Designed National and Blocked Persons," (iii) who commits, threatens to commit or supports "terrorism", as that term is defined in EO 13224; or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in (i) –(iv) above are herein referred to as a “Prohibited Person”). Borrower shall also covenant and agree in the Loan Documents that neither Borrower, Indemnitor nor any of their respective affiliated entities will (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, (ii) engage in or conspire to engage in any transaction that evades or avoids or that the purpose of

evading or avoiding any of the prohibitions of EO 13224. Borrower will further covenant and agree in the Loan Documents to deliver to Lender any such certification or other evidence as may be requested by Lender in its sole and absolute discretion, confirming that (i) neither Borrower or Indemnitor is a Prohibited Person and (ii) neither Borrower nor Indemnitor has engaged in any business transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person.

Borrower shall disclose to Lender the names of any investors (individuals or entities) which hold 10% or more of Borrower (whether directly or indirectly) together with any tax identification numbers and other such identification numbers or information required by Lender to complete its internal investor due diligence prior to closing.