NorthStar Healthcare Income

The General Partner and its affiliates are expressly permitted to engage in business activities substantially similar or identical to those of the Partnership, including competing investments, without any obligation to offer such opportunities to the Partnership or limited partners.

“the General Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities substantially similar or identical to those of the Partnership. None of the Partnership, Limited Partners or any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any such business ventures, interests or activities, and the General Partner shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures, interests and activities to the Partnership or any Limited Partner”

When conflicts arise between the General Partner's stockholders and Limited Partners, the General Partner is authorized to resolve them in favor of its stockholders, at its sole and absolute discretion.

“any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or the Limited Partner shall be resolved in favor of the stockholders. The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General Partner has acted in good faith.”

The Special Limited Partner, which holds the 15% promote interest in the operating partnership after the 6.75% hurdle, is an affiliate of the Advisor. This creates a structural conflict of interest between the advisor-affiliate's economic incentive and the interests of common limited partners.

“The Partnership issued Special Limited Partnership Units to an Affiliate of the Advisor in exchange for the cash contribution reflected on Exhibit A hereto and for services performed or to be performed for the Partnership and its Subsidiaries, and admitted such Person as the Special Limited Partner. The Special Limited Partner shall be entitled to certain distributions as provided in Section 5.2 and certain preferential allocations of items of income and gain under Section 5.1.”

The Special Limited Partner holding the 15% promote interest is an affiliate of the Advisor, creating a related-party conflict: the Advisor-affiliated entity benefits from the promote structure while also directing day-to-day operations of the fund.

“The Partnership issued Special Limited Partnership Units to an Affiliate of the Advisor in exchange for the cash contribution reflected on Exhibit A hereto and for services performed or to be performed for the Partnership and its Subsidiaries, and admitted such Person as the Special Limited Partner.”