Common use of Leasing of the Properties Clause in Contracts

Leasing of the Properties. Each of the Members acknowledges that each Property that is not an Operating Property is leased on a “triple net” basis to a third party by the Venture or its applicable Subsidiary. With respect to each Property that is an Operating Property, at the election of the Managing Member, the Operating Lease for any Operating Property shall be (or shall be amended and restated so that it is substantially) in the form of Exhibit H attached hereto and shall contain such other terms and conditions as the Members may determine in accordance with the provisions of this Agreement; provided, that (i) the initial amount of base rent and, if applicable, percentage rent payable under any Operating Lease shall be determined by the Managing Member based on a transfer pricing study performed by an independent accounting firm selected by the Managing Member with respect to the applicable Property, (ii) the Managing Member shall be permitted at any time to increase (or add) the base rent and percentage rent payable under any Operating Lease, (iii) the Managing Member shall be permitted at any time to otherwise modify the base rent and, if applicable, percentage rent payable under any Operating Lease based a new or updated transfer pricing study, and (iv) the Managing Member shall be permitted at any time to modify any of the other terms and conditions of an Operating Lease if the Managing Member determines, in good faith, that such modification is necessary or desirable to better assure the status of the Managing Member or certain direct or indirect members of the Managing Member as a REIT (provided, that the Managing Member shall use reasonable efforts to ensure that any such modifications, to the extent practicable, have no material adverse effect on the Administrative Member). The Administrative Member makes no representations or warranties as to whether any modifications to any Operating Lease made by the Managing Member pursuant to the authority granted in the previous sentence shall assure the status of the Managing Member or certain direct or indirect members of the Managing Member as a REIT.

Leasing of the Properties. Each In connection with the acquisition by a Subsidiary of any Property (other than undeveloped land until it is developed and ready to be placed in operation), such Subsidiary shall enter into a lease for such Property, as lessor, to the Operating Venture or a subsidiary thereof, as lessee, as a senior housing facility that will be treated as a “qualified health care property” as defined in Section 856(e)(6)(D) of the Members acknowledges that each Property that is not Code (each, an “Operating Property is leased on a “triple net” basis to a third party by the Venture or its applicable SubsidiaryLease”). With respect to each Property that is an Operating Property, at the election of the Managing Member, the The Operating Lease for any Operating such Property shall be (or shall be amended and restated so that it is substantially) substantially in the form of Exhibit H attached hereto and shall contain such other terms and conditions as the Members may determine in accordance with the provisions of this AgreementAgreement and agree with the applicable lessee; provided, that that, subject to agreement with the applicable lessee, (i) the initial amount of base rent and, if applicable, percentage rent payable under any Operating Lease shall be determined by the Managing NorthStar Member based on a transfer pricing study performed by an independent accounting firm selected by the Managing NorthStar Member with respect to the applicable Property, (ii) the Managing NorthStar Member shall be permitted at any time to increase (or add) the base rent and percentage rent payable under any Operating Lease, (iii) the Managing NorthStar Member shall be permitted at any time to otherwise modify the base rent and, if applicable, percentage rent payable under any Operating Lease based a new or updated transfer pricing study, and (iv) the Managing NorthStar Member shall be permitted at any time to modify any of the other terms and conditions of an Operating Lease if the Managing NorthStar Member determines, in good faith, that such modification is necessary or desirable to better assure the status of the Managing Member or certain direct or indirect members of the Managing Member any REIT Entity as a REIT (provided, that the Managing NorthStar Member shall use reasonable efforts to ensure that any such modifications, to the extent practicable, have no material adverse effect on the Administrative Member). The Administrative Member makes no representations or warranties as to whether any modifications to any Operating Lease made by the Managing NorthStar Member pursuant to the authority granted in the previous sentence shall assure the status of the Managing Member or certain direct or indirect members of the Managing Member any REIT Entity as a REIT.