Exhibit 10.36

 

ASSET PURCHASE AGREEMENT

 

By and Among

 

AMERICAN REALTY CAPITAL HEALTHCARE
TRUST II OPERATING PARTNERSHIP, L.P.

 

as “Purchaser”

 

and

 

PHBC REALTY, LLC,

PHDC REALTY, LLC,

PHMC REALTY, LLC,

PHCA REALTY, LLC,

PHEM REALTY, LLC,

PHGG REALTY, LLC,

PHBS REALTY, LLC,

PHGY REALTY, LLC,

PHKC CLEVELAND REALTY, LLC, and

PHKC SWOPE REALTY, LLC,

as “Seller”

 

Property Names and Locations:

 

Cassville Health Care and Rehab – Cassville, Missouri
Big Spring Care Center – Humansville, Missouri
Country Aire Retirement Estates – Lewistown, Missouri
Buffalo Prairie Care Center – Buffalo, Missouri
Edgewood Manor Nursing Home – Raytown, Missouri
Georgian Gardens – Potosi, Missouri
Golden Years – Harrisonville, Missouri
Gregory Ridge Living Center – Kansas City, Missouri
Parkway Health and Rehab – Kansas City, Missouri
Marshfield Care Center – Marshfield, Missouri

 

Dated as of July 2, 2014

 

 

 

  

Table of contents

 

    Page       ARTICLE 1 Definitions and Certain Rules of Construction 1      
Section 1.1 Defined Terms 1 Section 1.2 Certain Definitions. 6 Section 1.3 Rules
of Construction 6       ARTICLE 2 Purchase and Sale of the Purchased Property 7
      Section 2.1 Sale of Purchased Property 7 Section 2.2 Purchased Property 7
Section 2.3 Excluded Property 8 Section 2.4 Title to Real Property and Surveys 8
Section 2.5 Assumed Liabilities 11 Section 2.6 Excluded Liabilities 11      
ARTICLE 3 Purchase Price; Payment of Purchase Price; Allocation 12       Section
3.1 Purchase Price and Deposit 12 Section 3.2 Payment of Purchase Price. 13
Section 3.3 Allocation of Purchase Price 13 Section 3.4 Prorations 14      
ARTICLE 4 Certain Other Covenants and Agreements 16       Section 4.1 Inspection
and Due Diligence 16 Section 4.2 Conduct of Business Prior to the Closing Date
18 Section 4.3 Notification of Certain Matters 19 Section 4.4 Employees; Accrued
Vacation, Sick Pay, etc. 20 Section 4.5 Confidentiality 20 Section 4.6 Expenses
and Taxes 21 Section 4.7 Waiver of Bulk Sales and Indemnification 22 Section 4.8
Exclusivity 22 Section 4.9 Anti-Trust Review 22 Section 4.10 Fines and Penalties
22 Section 4.11 Further Assurances 23 Section 4.12 Delivery of Schedules 23    
  ARTICLE 5 Closing 24       Section 5.1 Closing 24 Section 5.2 Conditions to
Seller’s Obligations 24 Section 5.3 Conditions to Purchaser’s Obligations 24
Section 5.4 Deliveries by Seller 26 Section 5.5 Deliveries by Purchaser 27
Section 5.6 Non-Fulfillment of Closing Conditions 28 Section 5.7 Post-Closing
Actions 29 Section 5.8 Termination During Due Diligence 29       ARTICLE 6
Representations and Warranties of Seller 30       Section 6.1 Organization and
Standing 30 Section 6.2 Valid and Binding Obligations 30 Section 6.3 Title;
Purchased Property Complete 30 Section 6.4 Taxes and Tax Returns 30 Section 6.5
Execution and Delivery 31 Section 6.6 Contracts and Leases 31 Section 6.7
Residency Agreements and Related Matters 31

 

 

 

  

Section 6.8 Permits and Licenses 32 Section 6.9 Insurance 32 Section 6.10
Employees 32 Section 6.11 Litigation 33 Section 6.12 Compliance with Laws 33
Section 6.13 Financial Statements 34 Section 6.14 Real Property 34 Section 6.15
Environmental Matters 35 Section 6.16 Brokers, Finders 35 Section 6.17 FIRPTA 35
Section 6.18 Solvency 35 Section 6.19 Consent of Third Parties 36 Section 6.20
No Governmental Approvals; Permits 36 Section 6.21 Assessments 36 Section 6.22
Title Encumbrances 36 Section 6.23 Affordable Housing Units 36 Section 6.24
Loans 37 Section 6.25 No Other Warranties 37       ARTICLE 7 Representations and
warranties of Purchaser 37       Section 7.1 Organization and Standing 37
Section 7.2 Execution and Delivery 37 Section 7.3 Solvency 38 Section 7.4
Consent of Third Parties 38 Section 7.5 No Governmental Approvals 38 Section 7.6
Brokers, Finders 38       ARTICLE 8 Indemnification 38       Section 8.1
Indemnification by Seller 38 Section 8.2 Indemnification by Purchaser 39 Section
8.3 Indemnification Limits; Survival 39 Section 8.4 Procedures Regarding Third
Party Claims 40 Section 8.5 General Qualifications on Indemnification 41 Section
8.6 Exclusivity 42 Section 8.7 Effective Upon Closing 42       ARTICLE 9
Termination 43     ARTICLE 10 Miscellaneous 43       Section 10.1 Access to
Books and Records after Closing 43 Section 10.2 Notices 44 Section 10.3 Good
Faith; Cooperation 45 Section 10.4 Assignment; Exchange Cooperation; Successors
in Interest 45 Section 10.5 No Third Party Beneficiaries 45 Section 10.6
Severability 45 Section 10.7 Purchaser Records Rights 45 Section 10.8
Controlling Law; Integration; Amendment; Waiver 46 Section 10.9 Time 46 Section
10.10 Survival 46 Section 10.11 Eminent Domain - Condemnation 46 Section 10.12
Risk of Loss 47 Section 10.13 Attorneys’ Fees 47 Section 10.14 Covenant Not to
Compete 47 Section 10.15 Waiver of Jury Trial 47 Section 10.16 Construction 47
Section 10.17 Execution in Counterparts 48

 

-ii-

 

  

Exhibits

 

Exhibit   Description       Exhibit A   Escrow Agreement Exhibit B  
Post-Closing Escrow Agreement Exhibit C   Deed Exhibit D   Bill of Sale and
Assignment Exhibit E   Property Leases Exhibit F   Assumption Agreement

 

-iii-

 

  

Schedules

 

Schedule   Title       Schedule 1.1(a)   Assumed Liabilities      

Schedule 1.1(c)(i) and Schedule 1.1(c)(ii)

 

 

 

Legal Description of Purchased Real Property

 

      Schedule 2.4(a)   Permitted Title Exceptions       Schedule 2.4(g)  
Licenses, Leases Easements and Other Rights Related to Real Property      
Schedule 4.1(a)   Due Diligence Information       Schedule 5.4(m)   Third Party
Consents       Schedule 6.3   Material Assets or Rights Not Included in
Purchased Property       Schedule 6.5   Execution and Delivery – No
Contravention       Schedule 6.6   Contracts and Leases       Schedule 6.7  
Permits and Licenses       Schedule 6.8   Insurance; Three Year Claim History  
    Schedule 6.09   Employee Claims       Schedule 6.11   Litigation, etc.      
Schedule 6.12   Compliance with Laws       Schedule 6.13   Financial Statements
      Schedule 6.14   Real Property Compliance       Schedule 6.15  
Environmental Matters       Schedule 6.19   Third Party Consents

 

-iv-

 

  

Schedule 6.20   Government Approvals       Schedule 6.21   Assessments      
Schedule 6.22   Title Encumbrances       Schedule 6.24   Loans

 

-v-

 

  

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into this
2nd day of July, 2014 (the “Effective Date”), by and among AMERICAN REALTY
CAPITAL HEALTHCARE TRUST II OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (“Purchaser”) and PHBC REALTY, LLC, PHDC REALTY, LLC, PHMC REALTY,
LLC, PHCA REALTY, LLC, PHEM REALTY, LLC, PHGG REALTY, LLC, PHBS REALTY, LLC,
PHGY REALTY, LLC, PHKC CLEVELAND REALTY, LLC, and PHKC SWOPE REALTY, LLC, each a
Delaware limited liability company (collectively, the “Seller”).

 

Recitals:

 

Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires
to purchase from Seller, the Real Property (as defined herein) along with
certain other related assets consisting of the Purchased Property described
herein.

 

This Agreement sets forth the terms and conditions to which the parties have
agreed.

 

Agreements:

 

NOW, THEREFORE, in consideration of the premises and the mutual promises set
forth below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

 

ARTICLE 1
Definitions and
Certain Rules of Construction

 

Section 1.1   Defined Terms.  The following capitalized terms shall have the
meanings specified in this section. Other terms are defined in the text of this
Agreement, and throughout this Agreement, those terms shall have the meanings
respectively ascribed to them.

 

“Assumed Liabilities” means only the Seller’s obligations and liabilities listed
on Schedule 1.1(a) attached hereto and only to the extent such obligations and
liabilities arise or accrue at any time after 11:59 PM on the date immediately
preceding the Closing Date.

 

“Business” means all aspects of the operation of each Facility as a skilled
nursing facility.

 

“Closing” means the consummation of the transactions contemplated by this
Agreement with respect to the Facilities. Neither party will need to be present
at Closing, it being anticipated that the parties will deliver all Closing
documents and deliverables in escrow to the

 

 

 

 

Escrow Agent (as defined herein) (or if both Purchaser and Seller agree, to
Purchaser’s and/or Seller’s counsel) prior to the date of Closing.

 

“Closing Date” shall have the meaning set forth in Section 5.1 hereof.

 

“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.,
Hazardous Materials Transportation Act, 49 U.S.C. § 1802, the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Toxic Substance
Control Act of 1976, as amended, 15 U.S.C. § 2601 et seq., or any other federal,
state, local or other governmental legislation, statute, law, code, rule,
regulation or ordinance identified by its terms as pertaining to the protection
of the environment, including laws relating to the treatment, storage or
disposal of Hazardous Substances, in each case as in effect on the Effective
Date.

 

“Facilities” means collectively the facilities known as:

 

(i)          Cassville Health Care and Rehab located in Cassville, Missouri and
consisting of sixty (60) skilled nursing units (also individually referred to as
the Cassville Facility”); and

 

(ii)         Big Spring Care Center located in Humansville, Missouri and
consisting of sixty (60) skilled nursing units (also individually referred to as
the “Big Spring Facility”); and

 

(iii)        Country Aire Retirement Estates located in Lewistown, Missouri and
consisting of sixty (60) skilled nursing units and sixteen (16) licensed
residential care beds (also individually referred to as the “Country Aire
Facility”); and

 

(iv)        Buffalo Prairie Care Center located in Buffalo, Missouri and
consisting of sixty (60) skilled nursing units (also individually referred to as
the “Buffalo Facility”); and

 

(v)         Edgewood Manor Nursing Home located in Raytown, Missouri and
consisting of sixty-six (66) skilled nursing units (also individually referred
to as the “Edgewood Manor Facility”); and

 

(vi)        Georgian Gardens located in Potosi, Missouri and consisting of
one-hundred twenty (120) skilled nursing units (also individually referred to as
the “Georgian Gardens Facility”); and

 

(vii)       Golden Years located in Harrisonville, Missouri and consisting of
one-hundred thirty-two (132) skilled nursing units (also individually referred
to as the “Golden Years Facility”); and

 

2

 

  

(viii)      Gregory Ridge Living Center located in Kansas City, Missouri and
consisting of one-hundred sixteen (116) skilled nursing units (also individually
referred to as the “Gregory Ridge Facility”); and

 

(ix)         Parkway Health and Rehab located in Kansas City, Missouri and
consisting of ninety-seven (97) skilled nursing units, (also individually
referred to as the “Parkway Facility”); and

 

(x)          Marshfield Care Center located in Marshfield, Missouri and
consisting of seventy-seven (77) skilled nursing units (also individually
referred to as the “Marshfield Facility”) The Marshfield Facility includes both
a Facility known as the Marshfield Care Center and a facility known as
Marshfield Place.

 

Each of the Facilities is referred to individually herein as a “Facility.”

 

“Government Program” means the federal Medicare program, any state Medicaid
program, and such other similar federal, state, or local reimbursement or
governmental programs for which any Facility is eligible.

 

“Hazardous Substance” means petroleum, including crude oil or any fraction
thereof, flammable explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, any material containing polychlorinated biphenyls,
and any of the substances defined as “hazardous substances” or “toxic
substances” or otherwise identified and regulated under any Environmental Laws.

 

“Holdback Amount” means an amount equal to four percent (4.0%) of the Purchase
Price paid at Closing for each Facility.

 

“Improvements” means all buildings, facilities, and other improvements
constructed on the Purchased Property as of the date of Closing.

 

“IRC” means the Internal Revenue Code of 1986, as amended, and any regulations
or guidance issued thereunder.

 

“Lien” means any mortgage, deed to secure debt, deed of trust, pledge,
hypothecation, title defect, right of first refusal, security or other adverse
interest, encumbrance, claim, option, lien, lease or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
assets or property, including any agreement to give or grant any of the
foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.

 

“Material Adverse Change” means any occurrence between the Effective Date and
the Closing Date which results in a material adverse change in the Purchased
Assets or the financial condition or results of operations of the Facilities,
taken as a whole; provided, however, that

 

3

 

  

none of the following shall in any event be deemed a Material Adverse Change:
(i) any change resulting from changes in any law of regulation following the
Effective Date; (ii) any change resulting from announcement or pendency of the
transactions contemplated herein; (iii) any change made pursuant to the terms of
this Agreement or with Purchaser’s express written consent; or (iv) changes,
events or conditions affecting the United States economy as a whole or affecting
the industry in which the Seller operates, solely to the extent that Seller is
not materially disproportionately and adversely affected by such changes, events
or conditions as compared to other similarly situated operators in the state of
Missouri.

 

“Operator” means the current, licensed operator of each Facility, specifically,

 

(i)          PHBC, LLC, a Delaware limited liability company, with respect to
the Cassville Facility; and

 

(ii)         PHBS, LLC , a Delaware limited liability company, with respect to
the Big Spring Facility; and

 

(iii)        PHCA, LLC, a Delaware limited liability company, with respect to
the Country Aire Facility; and

 

(iv)        PHDC, LLC, a Delaware limited liability company, with respect to the
Buffalo Facility; and

 

(v)         PHEM, LLC, a Delaware limited liability company, with respect to the
Edgewood Manor Facility; and

 

(vi)        PHGG, LLC, a Delaware limited liability company, with respect to the
Georgian Gardens Facility; and

 

(vii)       PHGY, LLC, a Delaware limited liability company, with respect to the
Golden Years Facility; and

 

(viii)      PHKC CLEVELAND, LLC, a Delaware limited liability company, with
respect to the Gregory Ridge Facility; and

 

(ix)         PHKC SWOPE, LLC, a Delaware limited liability company, with respect
to the Parkway Facility; and

 

(x)          PHMC, LLC, a Delaware limited liability company, with respect to
the Marshfield Care Center portion of the Marshfield Facility; and

 

(xi)         PHMP, LLC, a Delaware limited liability company, with respect to
the Marshfield Place portion of the Marshfield Facility.

 

“Permitted Encumbrances” means (i) liens for taxes not yet due or which are
being contested in good faith and by appropriate proceedings and which are
satisfied or discharged of

 

4

 

  

record at or prior to Closing pursuant to Section 2.4(f) below; (ii) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar liens
arising through Seller in the ordinary course of business which are not overdue
for a period of more than thirty (30) days or which are being contested in good
faith and by appropriate proceedings and which are satisfied or discharged of
record at or prior to Closing pursuant to Section 2.4(f) below, and (iii) the
Permitted Title Exceptions.

 

“Purchased Personal Property” is the Purchased Property other than the Real
Property, including intangible Purchased Property.

 

“Purchased Property” is the property of Seller to be sold to Purchaser pursuant
to this Agreement as set forth in Section 2.2 hereof.

 

“Real Property” shall mean,

 

(i)          with respect to the Cassville Facility, that certain parcel of real
property located at 1300 Country Farm Road, Cassville, Missouri and more
particularly described in Schedule 1.1(c)(i) attached hereto; and

 

(ii)         with respect to the Big Spring Facility, that certain parcel of
real property located at 202 East Mill Street, Humansville, Missouri and more
particularly described in Schedule 1.1(c)(ii) attached hereto; and

 

(iii)        with respect to the Country Aire Facility, that certain parcel of
real property located at 18540 State Highway 16, Lewistown, Missouri and more
particularly described in Schedule 1.1(c)(iii) attached hereto; and

 

(iv)        with respect to the Buffalo Facility, that certain parcel of real
property located at 631 West Main Street, Buffalo, Missouri and more
particularly described in Schedule 1.1(c)(iv) attached hereto; and

 

(v)         with respect to the Edgewood Manor Facility, that certain parcel of
real property located at 11900 Jessica Lane, Raytown, Missouri and more
particularly described in Schedule 1.1(c)(v) attached hereto; and

 

(vi)        with respect to the Georgian Gardens Facility, that certain parcel
of real property located at 1 Georgian Gardens, Potosi, Missouri and more
particularly described in Schedule 1.1(c)(vi) attached hereto; and

 

(vii)       with respect to the Golden Years Facility, that certain parcel of
real property located at 2001 Jefferson Parkway, Harrisonville, Missouri and
more particularly described in Schedule 1.1(c)(vii) attached hereto; and

 

(viii)      with respect to the Gregory Ridge Facility, that certain parcel of
real property located at 7001 Cleveland Avenue, Kansas City, Missouri and more
particularly described in Schedule 1.1(c)(viii) attached hereto; and

 

5

 

  

(ix)         with respect to the Parkway Facility, that certain parcel of real
property located at 2323 Swope Parkway, Kansas City, Missouri and more
particularly described in Schedule 1.1(c)(ix) attached hereto; and

 

(x)          with respect to the Marshfield Facility, that certain parcel of
real property located at 820 South White Oak Road, Marshfield, Missouri and more
particularly described in Schedule 1.1(c)(x) attached hereto.

 

in each instance together with all the buildings, fixtures, structures, and
improvements thereon, and all easements and rights of way serving or benefiting
such property.

 

“Residency Agreement” means any agreement between Seller and an individual
contracting for such individual’s residency at a Facility, including without
limitation any admissions agreements for residents. The parties hereby
acknowledge that Seller is not a party to any Residency Agreement and has no
intention to become a party to any Residency Agreement.

 

“Seller’s Knowledge” means the actual knowledge of Ben Klein following
reasonable inquiry of and consultation with the Administrator of each Facility,
in connection with the execution of this Agreement and the preparation of
Schedules to this Agreement prior to Closing.

 

“Seller Parties” means collectively the Seller and the Operators.

 

Section 1.2  Certain Definitions. For purposes of this Agreement:

 

“herein,” “hereunder,” “hereof,” “hereinbefore,” “hereinafter” and other
equivalent words refer to this Agreement in its entirety and not solely to the
particular portion of this Agreement in which such word is used, and references
to “this article,” “this section,” “this paragraph,” “this subparagraph” or
similar references to a specific part of this Agreement shall refer to the
particular article, section, paragraph, subparagraph or specific part in which
such reference appears;

 

“party” or “parties” means each or all, as appropriate, of the entities who have
executed and delivered this Agreement, each permitted successor or assign of a
party, and when appropriate to effect the binding nature of this Agreement for
the benefit of another party, any other successor or assign of a party; and

 

“person” means any individual, sole proprietorship, partnership, joint venture,
corporation, estate, trust, unincorporated organization, association, limited
liability company, institution or other entity, including any that is a
governmental authority.

 

Section 1.3  Rules of Construction.  For purposes of this Agreement:

 

(a)          “including” and any other words or phrases of inclusion shall not
be construed as terms of limitation, so that references to “included” matters
shall be regarded as non

 

6

 

  

exclusive, non-characterizing illustrations; “copy” or “copies” means that the
copy or copies of the material to which it relates are true, correct and
complete;

 

(b)          “shall,” “will,” and “agrees” are mandatory, and “may” is
permissive;

 

(c)          titles and captions of or in this Agreement are inserted only as a
matter of convenience and in no way define, limit, extend or describe the scope
of this Agreement or the intent of any of its provisions;

 

(d)          whenever the context so requires, the singular includes the plural
and the plural includes the singular, and the gender of any pronoun includes the
other gender;

 

(e)          each Exhibit and Schedule referred to in this Agreement and each
attachment to any of them or this Agreement is hereby incorporated by reference
into this Agreement and is made a part of this Agreement as if set out in full
in the first place that reference is made to it; and

 

(f)          every covenant, term and provision of this Agreement shall be
construed simply according to its fair meaning and not strictly for or against
any party hereto, regardless of which party was more responsible for the
preparation of this Agreement.

 

ARTICLE 2
Purchase and Sale of the Purchased Property

 

Section 2.1  Sale of Purchased Property.   Subject to the provisions of this
Agreement, Seller shall sell all of the Purchased Property to Purchaser, free
and clear of all Liens and liabilities whatsoever, except for the Assumed
Liabilities and the Permitted Encumbrances.

 

Section 2.2  Purchased Property.   The Purchased Property shall include the
following:

 

(a)          all equipment, furniture, fixtures and signage of Seller affixed to
the Real Property;

 

(b)          the Real Property as more particularly described on Schedule 1.1(c)
attached hereto;

 

(c)          subject to applicable laws and regulations, all transferable
licenses, permits, certificates, approvals, and other governmental or regulatory
authorizations necessary for or incident to the ownership of the Real Property;

 

(d)          all warranties and guarantees regarding the installation,
application, manufacture, composition and/or inspection of the Real Property,
and all other manufacturer and third-party warranties and guarantees relating to
any of the Real Property, to the extent such warranties and guarantees remain in
effect and are assignable by Seller; and

 

7

 

  

(e)          all rights in and to any claims or causes of action to the extent
they are in the nature of enforcing a guaranty, warranty, or a contract
obligation to complete the Improvements, make repairs, or deliver services to
the Real Property other than (i) claims for damages or other monetary loss
incurred by Seller prior to the Closing Date and (ii) claims relating to
Excluded Liabilities or Excluded Property.

 

To the extent any of the foregoing Purchased Property is available in electronic
format, Seller shall provide Purchaser with same in such electronic format, in
addition to physical copies of same.

 

Section 2.3  Excluded Property. “Excluded Property” means any and all assets of
the Seller not constituting the Purchased Assets, including without limitation
the following categories of properties:

 

(a)          cash, cash equivalents or other investments;

 

(b)          Seller’s accounts receivable for rent or services, whether provided
prior to or after the Closing Date;

 

(c)          Seller’s operating agreements, minute books, membership ledgers and
income tax records;

 

(d)          any rights of Seller with respect to federal, state or local tax
refunds or credits;

 

(e)          any Seller plans, the assets and insurance policies relating to any
Seller plans, and any records relating thereto;

 

(f)          all contracts of insurance and claims and interests in any
insurance, insurance claims, escrows, revenues, refunds or right to indemnity
from third parties or other rights relating to the Excluded Liabilities;

 

(g)          Seller’s rights and interests under this Agreement;

 

(h)          security deposits and utility deposits, to the extent not added to
the Purchase Price at Closing pursuant to Section 3.2; and

 

(i)          all Residency Agreements, if any.

 

Section 2.4  Title to Real Property and Surveys.   At Closing, Seller agrees to
convey marketable and insurable fee simple title to the applicable Real Property
to Purchaser by special warranty deed (the “Deed”), subject only to the
Permitted Encumbrances. The legal description of the Real Property to be
contained in the Deed shall be the same legal description as is attached hereto
in the applicable subsection of Schedule 1.1(c). In the event the legal
description as disclosed by the Survey, as defined in Section 5.4(a), differs
from the legal description in the applicable subsection of Schedule 1.1(c), or
the Initial Commitment reveals

 

8

 

  

any errors or omissions in the legal descriptions, then Seller shall also
provide a quitclaim deed utilizing such Survey legal description.

 

(a)          Purchaser shall promptly order from Stewart Title Guaranty Company
(“Title Company”), an ALTA Form 2006 Commitment (or such other form as is
acceptable to Purchaser), with such endorsements as Purchaser shall reasonably
require and with insurance coverage over any “gap” period (the “Initial
Commitment”) for an owner’s title insurance policy (the “Title Policy”) in an
amount no less than the Purchase Price allocated to the Real Property evidencing
that Seller is vested with fee simple title to the Real Property, free and clear
of all liens, encumbrances, exceptions or qualifications whatsoever save and
except for (a) those exceptions specified as permitted exceptions listed on
Schedule 2.4(a) attached hereto (the “Permitted Title Exceptions”), (b) those
exceptions evidenced in writing as being otherwise acceptable to Purchaser in
its sole discretion which shall thereafter be deemed Permitted Title Exceptions,
and (c) those exceptions to title which are to be discharged by Seller at or
before closing. The Initial Commitment shall also evidence that upon the
execution, delivery and recordation of the deeds to be delivered at Closing and
the satisfaction of all requirements specified in Schedule B, Section 1 of the
Initial Commitment, Purchaser shall acquire fee simple title to the Real
Property, subject only to the Permitted Title Exceptions. The cost of the Title
Policy shall be shared equally by the parties provided, however, that Seller
shall bear the entire costs of any endorsements obtained at Purchaser’s election
to address Title Defects and Purchaser shall bear the entire cost of all other
title endorsements.

 

(b)          If Purchaser or its attorneys shall determine that the Initial
Commitment does not meet the requirements specified above, or that title to the
Real Property is unsatisfactory to Purchaser for reasons other than the
existence of Permitted Title Exceptions or exceptions which are to be discharged
by Seller at or before Closing, then Purchaser shall notify Seller within
forty-five (45) days after the Effective Date of those liens, encumbrances,
exceptions or qualifications to title which either are not Permitted Title
Exceptions, are unsatisfactory to Purchaser or are not contemplated by this
Agreement to be discharged by Seller at or before Closing, and any such liens,
encumbrances, exceptions or qualifications shall be hereinafter referred to as
“Title Defects.”

 

(c)          Purchaser, at Purchaser’s expense, may order surveys of the Real
Property (the “Surveys”) and Seller hereby grants Purchaser and Purchaser’s
agents the right to access the Real Property as may be reasonably required to
perform such work. The Surveys shall be prepared by a land surveyor duly
licensed and registered as such in the state the Real Property is located, (i)
shall be certified by such surveyor to Purchaser, Seller, each parties’ legal
counsel and the Title Company, (ii) shall reference the Initial Commitment file
number, (iii) shall set forth the legal description of the Real Property
precisely as it appears in the Initial Commitment (or the Initial Commitment
must be endorsed so that the insured legal description mirrors the legal
description in the Surveys, if applicable), (iv) shall identify whether or not
each matter referenced in the Initial Commitment applies to the Real Property,
(v) shall depict the boundaries of each such item that is capable of being
depicted on the Surveys, (v) shall depict any Improvements located upon the Real
Property, (vi) shall show all easements, rights-of-way,

 

9

 

  

setback lines, encroachments and other matters affecting the use or development
of the Real Property (vii) shall include the original signature and seal of the
surveyor, and (viii) shall be in a form satisfactory to the Title Company to
eliminate the standard survey exceptions from the title insurance policy to be
issued at Closing. Purchaser shall notify Seller in writing within ten (10)
business days after receipt of the Surveys of any Title Defects identified on
the Surveys specifying any matters shown on the Surveys which was not set forth
on any survey previously delivered to Purchaser and which adversely affect the
title to the Real Property and the same shall thereupon be deemed to be Title
Defects hereunder.

 

(d)          Within ten (10) business days of receipt from Purchaser of a
written notice of any Title Defects, together with a copy thereof, Seller shall
notify Purchaser as to whether it will cure such objection, and if it elects to
cure any such objection, it shall in good faith diligently endeavor to satisfy
or correct, at Seller’s expense, such objection on or before the date of Closing
to the satisfaction of Purchaser and the Title Company in such manner to permit
the Title Company to either endorse the Initial Commitment or to issue a
replacement commitment to eliminate the Title Defect therefrom. If Purchaser
identifies more than one Title Defect, Seller shall elect to cure or not to cure
as to each individual Title Defect and need not elect to cure all or refuse to
cure all. Failure of Seller to give such notice as to a particular Title Defect
within such ten (10) business day period shall be deemed to be an election not
to cure such objection. In the event Seller does not elect to satisfy or cure
any objection of which it is notified, then within five (5) business days after
receipt of written notice of Seller’s election, or within five (5) business days
after the expiration of Seller’s ten (10) business day notification period if
Seller fails to give any such notice, Purchaser shall by written notice to
Seller elect one of the following:

 

(i)          to accept Seller’s interest in the applicable Real Property subject
to such objections, in which event such title and survey objections shall become
part of the Permitted Title Exceptions, and to close the transaction
contemplated hereby in accordance with the terms of this Agreement; or

 

(ii)         to terminate this Agreement in its entirety and receive a refund of
the Deposit.

 

The failure of Purchaser to give written notice of its election to either accept
the Real Property subject to such objections or to terminate this Agreement
within the applicable five (5) business day period shall be deemed an election
to terminate this Agreement and to receive a refund of the Deposit.

 

(e)          In the event Seller elects in writing to cure any title or survey
objection and thereafter is unable, after acting diligently and in good faith,
to effect such cure, on or before the date of Closing, then Purchaser shall
have, as its sole remedy, the options described in Section 2.4(d) above. Seller
shall have no obligation under this Section 2.4(e) to expend monies or to
institute litigation to cure Title Defects except those which may be satisfied
solely by the payment of money prior to or at Closing.

 

10

 

  

(f)            Notwithstanding anything in this Agreement to the contrary,
Seller covenants and agrees that at or prior to Closing, Seller shall (i) pay in
full and cause to be canceled and discharged or otherwise bond and discharge as
liens against the Real Property all mechanics’ materialmen’s, repairmen’s,
contractors’ or other similar Liens which encumber the Real Property as of the
date hereof created by, through or under Seller or which may be filed against
the Real Property after the date hereof created by, through or under Seller and
on or prior to the Closing Date (ii) pay in full all past due ad valorem taxes
and assessments of any kind constituting a lien against the Real Property which
are due and payable, and (iii) pay in full or cause to be canceled and
discharged all security deeds or other security instruments encumbering the
property and all judgments which have attached to and become a lien against the
Real Property by, through or under Seller. In the event Seller fails to cause
such liens and encumbrances to be paid and canceled at or prior to Closing,
Purchaser shall be entitled to pay such reasonable amount to the holder thereof
as may be required to pay and cancel same, and to credit against the Purchase
Price the amount so paid.

 

(g)          Except as set forth on Schedule 2.4(g), Seller has not granted any
license, lease, easement or other right relating to the use or possession of the
Real Property (except (i) under the Residency Agreements previously entered into
by Seller and the Residency Agreements entered into by Seller in the ordinary
course of business between the Effective Date and the Closing Date; or (ii) as
may be set forth in the Title Commitment), and Seller agrees that it shall not
grant any such right prior to Closing (other than Residency Agreements in the
ordinary course of business, which shall not require Purchaser approval) without
the prior written approval of Purchaser, which may be withheld in Purchaser’s
absolute discretion.

 

Section 2.5           Assumed Liabilities.   Subject to the terms and conditions
of this Agreement, on the Closing Date, Purchaser shall assume and agrees to
pay, perform or discharge only the Assumed Liabilities. Other than the Assumed
Liabilities, Purchaser shall not assume any of Seller’s debts, obligations or
liabilities, of any kind or nature, including without limitation any civil
claims or other legal proceedings or legal or regulatory investigations or
actions arising out of or during Seller’s ownership, use, operation or
management of any of the Purchased Property or the Excluded Property, all of
which Seller shall pay, perform and discharge when due. Nothing in this Section
2.5 shall be deemed to preclude either party from contesting any liability or
obligation in good faith through the appropriate process.

 

Section 2.6           Excluded Liabilities.

 

All of Seller’s debts, obligations and liabilities, other than the Assumed
Liabilities, including any liability, obligation, claim, action, suit, or
proceeding pending as of the Closing Date, or any subsequent claim, action,
suit, or proceeding arising out of or relating to any such other event occurring
(i) prior to the Closing with respect to ownership of the Real Property, and/or
(ii) prior to or after the Closing with respect to the operation of the
Facilities, including, without limitation, any obligation of the Seller Parties
for compliance with applicable federal, state, county, and local tax laws or
regulations, including the obligations under such laws for the payment of taxes
and the filing of tax returns, under Part 6 of Title I of ERISA and Section
4980B of the IRC, as amended (commonly known as “COBRA”), any “employee benefit

 

11

 

  

plan,” as that term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) regardless of whether such plan is
subject to ERISA, and each bonus, deferred, or incentive compensation, stock
purchase, stock option, severance, and termination pay plan or program (the
“Plans”) maintained by or on behalf of any Seller Party, the Fair Labor
Standards Act, Title VII of the Civil Rights Act of 1964, the Occupational
Safety and Health Act, the Age Discrimination in Employment Act of 1967, the
Americans With Disabilities Act, the Family and Medical Leave Act, or state
worker’s compensation and unemployment compensation laws, as now or hereafter
amended, and any liabilities related to any overpayment (regardless of reason
for such overpayment), adjustment of payments received or non-compliance under
any Government Program, are collectively referred to herein as the “Excluded
Liabilities;” provided, however, that actions commenced following the Closing
under the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et. seq.
or similar state law seeking remedial action with regard to the Purchased
Property, shall not be deemed an Excluded Liability and Seller shall have no
liability with respect to any such action.

 

ARTICLE 3
Purchase Price; Payment of Purchase Price; Allocation

 

Section 3.1           Purchase Price and Deposit.

 

(a)          Purchase Price. Subject to any adjustments and prorations expressly
provided for in this Agreement, including those described in Section 3.4
(collectively, “Adjustments”), the purchase price (the “Purchase Price”) for the
Purchased Property shall be a total of Fifty-Two Million and No/100 U.S. Dollars
($52,000,000).

 

(b)          Deposit. The parties acknowledge that within three (3) business
days after the Effective Date, Purchaser shall deliver to Stewart Title Guaranty
Company (or any other mutually acceptable escrowee) (the “Escrow Agent”) One
Million and No/100 U.S. Dollars ($1,000,000) (the “Deposit”). The term “Deposit”
shall mean the Deposit, if and when the Deposit is made, plus any additional
amounts deposited as a result of the requirements of Section 5.1 hereof. The
Escrow Agent shall hold the Deposit in a non-interest bearing account pursuant
to an escrow agreement in the form attached hereto as Exhibit A.

 

(c)          The Deposit shall be paid and returned to Purchaser upon the
occurrence of the circumstances described in Section 2.4(d)(ii), Section 5.6(b),
Section 5.6(c), Section 5.6(d), Section 5.8, ARTICLE 9(a), ARTICLE 9(b), ARTICLE
9(d), ARTICLE 9(e), Section 10.11 and Section 10.12 in each instance, upon
proper written demand of Purchaser to Seller and the Escrow Agent stating the
reason for such termination and referencing the section of this Agreement
providing Purchaser with the right to do so. Upon receipt of such written demand
by Seller, Seller and Purchaser shall direct the Escrow Agent, in writing, to
pay and disburse the Deposit immediately to Purchaser (whereupon this Agreement
shall terminate and neither party shall have any further rights or obligations
hereunder, except as otherwise expressly provided herein).

 

12

 

  

(d)          The Deposit shall be paid to Seller: (i) at the Closing, should the
Closing occur, in partial satisfaction of the Purchase Price as provided in
Section 3.2(b) hereof; or (ii) as liquidated damages (and not as a penalty)
under the circumstances described in Section 5.6(a). In each such instance,
Seller and Purchaser shall direct the Escrow Agent, in writing, to pay and
disburse the Deposit immediately to Seller (whereupon this Agreement shall
terminate and neither party shall have any further right or obligations
hereunder, except as otherwise expressly provided herein). The parties hereby
agree that the Deposit amount constitutes a reasonable forecast of the damages
that would be sustained by Seller in such event.

 

(e)          Without limiting Purchaser’s other rights and remedies hereunder,
Purchaser may terminate this Agreement for any reason or for no reason
whatsoever during the Due Diligence Period (as herein defined) and upon any such
termination the Deposit shall be returned to Purchaser.

 

Section 3.2  Payment of Purchase Price.  The Purchase Price shall be paid by
Purchaser, at Closing, as follows:

 

(a)          The Purchase Price, as adjusted for any prorations pursuant to
Section 3.4 below, and credits and additions described in Section 3.2(b) below,
shall be paid at Closing by wire transfer in accordance with wire instructions
provided by Seller at least three (3) business days before Closing.

 

(b)          Purchaser shall receive a credit against payment of the Purchase
Price by the amount of (i) the Deposit, (ii) unless otherwise paid by Seller,
the amounts to be paid by Seller under Section 2.4(a) and Section 4.6(b) of this
Agreement. If, at Purchaser’s request, Seller leaves any of Seller’s security
deposits or utility deposits in place following Closing, then the amount of any
such security deposit or utility deposit shall be added to the Purchase Price
and paid to Seller pursuant to Section 3.2(a).

 

(c)          Purchaser shall deposit the Holdback Amount into an
interest-bearing escrow account with the Escrow Agent pursuant to an Escrow
Agreement in substantially the form attached hereto as Exhibit B (the
“Post-Closing Escrow Agreement”). The funds held pursuant to the Post-Closing
Escrow Agreement shall be available according to the terms of the Post-Closing
Escrow Agreement to secure any obligations of Seller to Purchaser pursuant to
Section 3.4(d) and Section 8.1 hereof. The Holdback Amount shall be released to
Seller at the end of the fourteenth (14th) calendar month following the Closing
Date, less any amounts claimed by Purchaser prior to such distribution dates,
which shall be held in accordance with the terms of the Post-Closing Escrow
Agreement until finally adjudicated.

 

(d)          Purchaser shall assume the Assumed Liabilities.

 

Section 3.3  Allocation of Purchase Price.  With respect to the individual
Facilities, the Purchase Price shall be allocated as follows:

 

13

 

  

Facility   Purchase Price Allocation       Cassville Facility   $3,500,000.00
Big Spring Facility   $5,700,000.00 Country Aire Facility   $5,300,000.00
Buffalo Facility   $5,300,000.00 Edgewood Manor Facility   $2,300,000.00
Georgian Gardens Facility   $7,300,000.00 Golden Years Facility   $10,900,000.00
Gregory Ridge Facility   $3,100,000.00 Parkway Facility   $6,000,000.00
Marshfield Facility   $2,600,000.00 Total:   $52,000,000.00

 

Any adjustments to the Purchase Price provided herein that are attributable
solely to a particular Facility shall result in an adjustment of the Purchase
Price allocated to such Facility. Any adjustments to the Purchase Price provided
herein that are attributable to one or more Facilities shall result in a
pro-rata adjustment (determined in accordance with the proportional amount of
Purchase Price allocated to each Facility) of the Purchase Price allocated to
each Facility with respect to which such adjustment is attributable.

 

(b)          Additionally, the parties acknowledge that the transactions
contemplated hereunder must be reported in accordance with Section 1060 of the
IRC. The parties shall report the transactions contemplated hereunder for all
purposes in accordance with the purchase price allocation set forth in Section
3.3 hereto. The parties shall share information and cooperate to the extent
necessary to permit the transactions to be properly, timely, and consistently
reported.

 

Section 3.4  Prorations.

 

(a)          The following items shall be prorated between Seller and Purchaser
as of 11:59 p.m. on the date immediately preceding the Closing Date; prorations
credited to Purchaser shall reduce the Purchase Price and pro-rations credited
to Seller shall increase the Purchase Price at Closing as follows:

 

(i)          city, state, and county ad valorem taxes for the year in which the
Closing occurs based on the ad valorem tax bills for the Real Property, if then
available for such year, or if not, then on the basis of the ad valorem tax bill
for the Real Property for the immediately preceding year. (If such proration is
based on an ad valorem tax bill for the immediately preceding year and should
such proration prove to be inaccurate on receipt of the ad valorem tax bill for
the Real Property for the year of Closing, then either Seller or Purchaser, as
applicable, may demand at any time after Closing a payment from the other party
in an amount sufficient to correct such malapportionment); and

 

14

 

  

(ii)         sanitary sewer taxes and utility charges, if any except to the
extent that any such accounts remain in the name of and are the responsibility
of any one or more Seller Parties following Closing; provided, however, that
Purchaser may elect, prior to Closing, to require that the meters for all
utility charges be read and terminated as of the end of the last business day
preceding the Closing Date, in which case Seller shall be responsible for and
shall pay for all such charges first accruing or relating to the period prior to
the Closing Date.

 

Purchaser and Seller shall direct the Escrow Agent to prepare a proposed
schedule (the “Proration Schedule”) prior to Closing, including the items listed
above and any other items the parties determine necessary. Such Proration
Schedule shall include all applicable expenses with regard to the Purchased
Property. Seller and Purchaser will use all reasonable efforts to finalize and
agree upon the Proration Schedule at least two (2) business days prior to
Closing.

 

(b)          Seller shall receive all income from the Purchased Property
attributable to the period prior to the Proration Date and shall, unless
otherwise provided for in this Agreement, be responsible for all expenses of the
Purchased Property attributable to the period prior to 11:59 P.M. on the date
immediately preceding the Closing Date (the “Proration Date”). To the extent any
payments from residents are the property of the Seller, in the event Purchaser
receives any payment from a resident for rent or other amounts due for any
period prior to or after Closing or payment of any other receivable of Seller,
Purchaser shall forward such payment to Seller.

 

(c)          Purchaser shall receive all income from the Purchased Property
attributable to the period from and after the Proration Date and shall, except
as otherwise provided for in this Agreement, be responsible for all expenses of
the Purchased Property attributable to the period from and after the Proration
Date.

 

(d)          The parties agree that any amounts that may become due under this
Section 3.4 shall be paid at Closing as can best be determined. A post-Closing
reconciliation of prorated items shall be made by the parties within ninety (90)
days after the Closing Date and any amounts due at that time shall be promptly
forwarded to the respective party to whom such amounts are due in a lump sum
payment. Any additional amounts which may become due after such determination
shall be forwarded at the time they are received. Any amounts due under this
Section 3.4 which cannot be determined within ninety (90) days after the Closing
Date (such as, for example, fiscal year-end real estate taxes) shall be
reconciled as soon thereafter as such amounts can be determined. Purchaser and
Seller agree that each shall have the right to audit the records of the other in
connection with any such post-Closing reconciliation. Any payments made pursuant
to this Section 3.4 shall be treated as a purchase price adjustment for income
tax purposes.

 

15

 

 

ARTICLE 4
Certain Other Covenants and Agreements

 

Section 4.1  Inspection and Due Diligence.

 

(a)          Prior to Closing, Purchaser (including its agents and
representatives) shall be permitted to inspect the Facility and the Purchased
Property. The “Due Diligence Period” for purposes of this Agreement means a
period commencing on the Effective Date an extending until 5:00 p.m. Eastern on
the forty-fifth (45th) day following the Effective Date, or if such day is not a
business day, on the next business day following such day. The Purchaser shall
be entitled to continue all such inspections during and after the Due Diligence
Period. Such inspections may include an independent appraisal and environmental
assessments (including Phase I assessments and Phase II assessments if Seller
consents to any such Phase II assessment which consent shall not be unreasonably
withheld, conditioned or delayed), impact study and detailed architectural and
engineering inspections of buildings and mechanical systems located on the Real
Property and any other inspections which may reasonably be required by potential
lenders or investors. Purchaser shall not conduct any drilling, boring, soil
testing or other physically intrusive inspections without Seller’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed, if done in connection with any Phase II assessment. Seller shall allow
Purchaser and its authorized representatives reasonable access upon prior notice
during normal business hours and until the Closing to Seller’s executive
personnel, properties and records, shall permit examination and testing, and
shall furnish Purchaser and its authorized representatives such information
concerning the Purchased Property and the Facility as Purchaser reasonably
requests. Purchaser and its authorized representatives shall have the right to
review and copy all such books, accounts, records, agreements or other documents
as it may reasonably deem advisable. Seller shall, upon reasonable request by
Purchaser, make available to Purchaser by electronic data room or otherwise,
copies of all records, files, correspondence, invoices, resident lists, supplier
lists, blueprints, specifications, designs, drawings, business records and
plans, operating and financial data, environmental assessments, property
reports, permits and regulatory files and other data associated with or used by
Seller in connection with its operation of the Business or its ownership or
operation of the Purchased Property, including without limitation all of the
information requested on attached Schedule 4.1(a) of this Agreement to the
extent Seller Parties has possession and control of such information, and in the
form in which Seller maintains such information in the ordinary course of its
business. Seller shall have no obligation to prepare any summaries, abstracts,
compilations or reports in connection with Purchaser’s investigation that Seller
Parties do not maintain or compile in the ordinary course of any Seller Party’s
business. For purposes of this Agreement, documents or information shall be
deemed to have been “made available” to Purchaser if copies have been delivered
or viewed by Purchaser in tangible or electronic form, or if such documents or
information have been made available at the Facility or on an internet or
electronic data site to which Seller has granted Purchaser or its
representatives access. Purchaser shall notify Seller in advance of any site
visits by Purchaser or its contractors or representatives. All site visits and
contacts with Seller personnel shall be coordinated through Ben Klein, or
Seller’s counsel, and Purchaser shall not contact any Seller

 

16

 

  

personnel, residents or service providers directly. If any inspection or test
disturbs the Purchased Property, Purchaser will restore the Property to the same
condition as existed prior to any such inspection or test, and such obligation
to restore the Property shall survive any termination of this Agreement.

 

(b)          Within five (5) business days of the Effective Date (the “Diligence
Materials Due Date”), Seller shall provide Purchaser with all of the materials
in possession or control of the Seller Parties listed on attached Schedule
4.1(a) of this Agreement (collectively, the “Requested Diligence Materials”). In
the event that Seller’s delivery of any Requested Diligence Materials is delayed
beyond the Diligence Materials Due Date, or in the event Purchaser has provided
notice to Seller within give (5) business days of receipt that any purported
response to the requirements of this Section 4.1(b) is insufficient in
Purchaser’s reasonable discretion, the Due Diligence Period shall be extended by
the total number of days which elapse between the Diligence Materials Due Date
and the date upon which all Requested Diligence Materials have actually been
provided to Purchaser or Purchaser has been advised by Seller that such
Diligence Materials are not available to Seller, or, as applicable, any
insufficient response to the requirements of this Section 4.1(b) has been
corrected to Purchaser’s reasonable satisfaction (inclusive of the Diligence
Materials Due Date and the last applicable date of delivery or correction, as
applicable).

 

(c)          Intentionally omitted.

 

(d)          Purchaser shall pay all costs incurred for any such inspections of
the Facilities and the Purchased Property initiated by Purchaser. Purchaser
shall indemnify and hold Seller harmless from and against any and all claims for
death of or injury to persons or damage to property to the extent arising out of
or as a result of the acts or omissions of Purchaser, Purchaser’s authorized
representatives, or designees of Purchaser pursuant to the provisions of this
Section 4.1. Purchaser, as well as its consultants and contractors, shall at
Seller’s request provide evidence of insurance, sufficient in Seller’s
reasonable discretion, to protect Seller from any losses it might incur as a
result of Purchaser’s activities incurred in connection with such inspections.

 

(e)          The parties hereto acknowledge that Seller may possess or have
access to certain information subject to the Health Insurance Portability and
Accountability Act of 1996 and any regulations promulgated thereunder (“HIPAA”).
Notwithstanding any other provision of this Agreement, Seller shall have no
obligation under this Agreement to disclose to Purchaser any information which
would violate or put Seller in a position of noncompliance with any city,
county, state or federal privacy or security act, law, or regulation or the
provisions of HIPAA or which would result in Seller breaching any contractual
provisions imposed on Seller with respect to the requirements of HIPAA and/or
any such city, county, state, or federal act, law or regulation.

 

(f)          Purchaser may perform or cause to be performed a Phase I
Environmental Site Assessment of any portion of the Real Property (the “Phase I
ESA”). Purchaser shall provide Seller with a copy of the Phase I ESAs within
five (5) business days of completion and receipt

 

17

 

  

of each by Purchaser. Any subsequent amendments thereto will also be provided to
Seller within five (5) business days after completion and receipt by Purchaser
thereof.

 

(g)          If the Phase I ESA, or any update thereof, reveals areas of
environmental concern that, in Purchaser’s sole opinion, warrant further
investigation, Purchaser may, at its discretion, request Seller’s consent to
commence a Phase II Environmental Site Assessment of the applicable portion of
the Real Property (“Phase II ESA”; collectively, the “ESAs”). A Phase II ESA
consists of further investigation of recognized environmental conditions
identified in the Phase I ESA including sampling and analysis of soil and
groundwater necessary to determine whether or not contamination has occurred.
Seller’s consent to conduct a Phase II ESA shall not be unreasonably withheld,
conditioned or delayed. If Seller permits Purchaser to conduct a Phase II ESA,
Seller will be provided a copy of the Phase II ESA within five (5) business days
of completion and receipt by Purchaser. Any subsequent amendments and/or reports
relating to the Phase II ESA shall also be delivered to Seller and Purchaser.

 

(h)          The costs of the Phase I ESA and the costs of the Phase II ESA and
any updates thereof shall be paid by Purchaser.

 

Section 4.2 Conduct of Business Prior to the Closing Date.  Seller covenants and
agrees with Purchaser that from the Effective Date hereof through the Closing
Date, except as otherwise expressly contemplated in this Agreement, unless
Purchaser otherwise consents in writing (which consent shall not be unreasonably
withheld, conditioned or delayed) Seller shall, and shall cause the Operators in
their capacities as the operators of the Facilities to:

 

(a)          Use good faith efforts to operate the Facilities in all material
respects in the ordinary course of business in a commercially reasonable manner,
including (i) incurring expenses consistent with the Seller Parties’ past
practices in the operation of the Facilities and (ii) using commercially
reasonable efforts to preserve the present business operations of each Facility
and the applicable goodwill and relationships with customers, employees,
advertisers, suppliers and other contractors related to each Facility.

 

(b)          Operate the Facilities and otherwise conduct business in all
material respects in accordance with the terms or conditions of all applicable
licenses and permits, all applicable rules and regulations of the State of
Missouri, and all other rules, regulations, laws, and orders of all governmental
authorities having jurisdiction over any aspect of the operation of the
Facilities and all applicable insurance requirements; provided, however, that
the foregoing shall not impose on Seller any obligation to make unbudgeted
capital improvements or repairs, or to incur any cost or expense in order to
comply with any of the foregoing to the extent a Seller Party was not in
compliance as of the Effective Date, except to the extent a Seller Party is
ordered to do so by a governmental authority having jurisdiction over the Seller
Parties.

 

(c)          Maintain the books, records, and financial statements of the Seller
Parties consistent with past practices.

 

18

 

  

(d)          Timely comply in all material respects with all contracts and
agreements with third-parties related to the operation of the Facilities.

 

(e)          Not sell, lease, grant any rights in or to or otherwise dispose of
or otherwise relinquish control of, or agree to sell, lease or otherwise dispose
of, the Purchased Property in whole or in part except for Residency Agreements
entered into in the ordinary course, dispositions of assets that are in the
ordinary course of business, and if material, are replaced by similar assets of
substantially equal or greater value and utility.

 

(f)          Take commercially reasonable efforts to maintain the Purchased
Property in the same condition as it exists as of the Effective Date, except for
ordinary wear and tear, in a manner consistent with past practices.

 

(g)          Not default on any loans to Seller which are not fully cured or
satisfied at Closing.

 

(h)          Not enter into any material contracts outside the ordinary course
of business (other than contracts approved by Purchaser or Residency Agreements
in the ordinary course of business); provided that Seller shall not enter into
any contract which would survive Closing and be binding on the Purchaser or
represent a financial obligation of any Operator in excess of in excess of
$10,000 per year (other than Residency Agreements in the ordinary course of
business), whether or not material, without the consent of Purchaser as provided
above.

 

(i)          Not make any alterations or improvements to the Real Property or
make any capital expenditure with respect to the Real Property in excess of
$10,000 other than those that are currently budgeted for completion, or are
required by law, necessary to preserve the coverage under or comply with the
terms of any insurance policy with respect to the Purchased Property or are in
Seller’s business judgment necessary to address emergency conditions or to
maintain the goodwill and competitive standing of the Business.

 

(j)          Maintain normal levels of inventory and supplies on hand for each
Facility (including medical supplies, food, beverages, office and kitchen
supplies), consistent with past practices and as necessary to comply with
applicable laws and regulations.

 

(k)          Make available to Purchaser copies of all internally generated
monthly financial reports.

 

(l)          Inform Purchaser promptly regarding the resignation, termination or
hiring of the Executive Director or Assistant Director, if any, of any Facility.

 

Section 4.3  Notification of Certain Matters. Seller shall give prompt written
notice to Purchaser, and Purchaser shall give prompt written notice to Seller,
to the extent either such party becomes aware of (i) the occurrence, or failure
to occur, of any event that

 

19

 

  

would be reasonably likely to cause any of their respective representations or
warranties contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Closing Date, and (ii)
any failure on their respective parts to comply with or satisfy, in any material
respect, any covenant, condition, or agreement to be complied with or satisfied
by any of them under this Agreement.

 

Section 4.4  Employees; Accrued Vacation, Sick Pay, etc.

 

(a)          At the Closing, Operator shall, at Operator’s expense, continue the
employment to at least ninety percent (90%) of the active and full-time
employees who perform services for the Facility (collectively, the “Employees”)
for at least a thirty (30) day period following the Closing Date (subject to the
Operator’s right to terminate an individual for cause) on terms substantially
equivalent or better in the aggregate to the compensation and benefit levels
provided to such Employees as of the Closing Date.

 

(b)          Seller shall be responsible for complying with the continuation
health care coverage requirements of COBRA with respect to any individual who
became a “qualified beneficiary” as of or prior to the Closing Date, including
as a result of this transaction.

 

(c)          Seller shall pay any severance costs payable with respect to the
termination of employment by (or on behalf of) Seller of any Employee, including
Employees whose employment is continued by the Operator, pursuant to any
severance policies or plans or required by law, including the WARN Act (if
applicable).

 

(d)          Seller and Operator shall refrain from taking any action following
the Closing with respect to any employees that are terminated or otherwise not
retained post-Closing that would subject Purchaser or Operator to liability
under the WARN Act and shall fully indemnify Purchaser from any such liability.

 

Section 4.5  Confidentiality.

 

(a)          Confidential Information. Any and all non-public information of any
type or description, including, but not limited to, financial statements and
projections of Seller, proprietary or trade secret information, whether written
or verbal, or any information given to Purchaser by Seller in connection with
the transactions contemplated by this Agreement, is proprietary to Seller and
confidential in nature, and shall be treated as such by Purchaser, except with
the prior written consent of Seller and except to the extent enforcement of its
terms and applicable law require public disclosure. This provision shall not
apply following the Closing to any such information pertaining to the Purchased
Property, nor to any information that is or becomes publicly available through
no fault of Purchaser. Purchaser shall have the right to disclose any such
information to its professional advisors, lenders, investors and other third
parties who need to know such information for the purposes of assisting
Purchaser with the negotiation and consummation of this Agreement, provided
Purchaser advises such parties of their confidential obligations under this
Agreement, and provided Purchaser remains responsible for any violations by such
parties.

 

20

 

  

(b)        Confidentiality of Agreement. The terms of this Agreement shall
remain confidential, except with the prior written consent of Seller and
Purchaser and except to the extent that enforcement of its terms or applicable
law require public disclosure. Neither party shall make any public announcement
of the transactions contemplated herein without the express written approval of
the other party, which approval shall not be unreasonably withheld. This
provision will not apply to Purchaser following any Closing. Purchaser shall
permit Seller to review in advance and comment on any public announcement of the
Closing of the transactions contemplated herein.

 

(c)        Return of Confidential Information. Purchaser agrees that promptly
upon the termination of this Agreement, whether by mutual termination or
otherwise (other than upon Closing), Purchaser shall cause all materials and
property (originals and copies) of Seller to be immediately returned to Seller,
or, at Purchaser’s election, destroyed provided Purchaser provides written
certification of such destruction, provided that Purchaser shall be entitled to
retain such information to the extent required in order to comply with
applicable law, regulation, bona fide document retention policy of Purchaser, or
any public disclosure obligations promulgated by the Securities and Exchange
Commission any applicable to Purchaser, or until any litigation between
Purchaser and Seller arising out of the termination of this Agreement has been
finally resolved.

 

(d)        Survival of Confidentiality. This Section 4.5 shall survive the
Closing to the extent provided above and shall survive in the event this
Agreement is terminated prior to Closing.

 

(e)        Supersedes Previous Agreements. The provisions of this Section 4.5
supersede any prior agreements between the parties relating to confidentiality.

 

Section 4.6  Expenses and Taxes.

 

(a)        Each party shall pay its own expenses and costs incurred in
connection with the negotiation and consummation of this Agreement and the
transactions contemplated by this Agreement.

 

(b)        Notwithstanding the foregoing:

 

(i)           Seller shall pay one hundred percent (100%) of the real estate
transfer tax (other than any applicable city transfer taxes) and the costs of
recording any title clearing instruments and fifty percent (50%) of any charge
of the Escrow Agent for their services as escrow agent;

 

(ii)         Seller shall pay one hundred percent (100%) of any applicable city
transfer taxes, if any;

 

(iii)        The cost of the issuance of the title commitment and the Title
Policy or other costs attributable to the title search shall be shared equally
by Seller and Purchaser,

 

21

 

  

provided, however, that Seller shall bear the entire costs of any endorsements
obtained at Seller’s election to address Title Defects and Purchaser shall bear
the entire cost of all other title endorsements;

 

(iv)        Purchaser shall pay one hundred percent (100%) of any costs
attributable the Surveys and fifty percent (50%) of any charge of the Escrow
Agent for their services as escrow agent; and

 

(v)         Seller shall pay any person who is entitled to any brokerage
commission or finder’s fee in connection with any of the transactions
contemplated by this Agreement by reason of any act or omission of Seller, and
shall indemnify Purchaser and hold Purchaser harmless against any claims for
such commissions or finder’s fees as provided in Section 8.1. Purchaser shall
pay any person who is entitled to any brokerage commission or finder’s fee in
connection with any of the transactions contemplated by this Agreement by reason
of any act or omission of Purchaser, and shall indemnify Seller and hold Seller
harmless against any claims for such commissions or finder’s fees.

 

Section 4.7 Waiver of Bulk Sales and Indemnification.   Purchaser hereby waives
compliance by Seller and Seller hereby waives compliance by Purchaser, with the
requirements of any applicable bulk sales laws and similar laws, if and to the
extent applicable. Seller shall indemnify and hold harmless Purchaser from any
and all claims, liabilities, or costs, including reasonable attorneys’ fees,
arising out of the parties’ failure to comply with any bulk sales laws and
similar laws applicable to the transactions contemplated hereby as provided in
Section 8.1. The foregoing indemnification shall survive the Closing.

 

Section 4.8 Exclusivity.  During the period from the Effective Date to the
Closing Date or termination of this Agreement according to the terms hereof,
Seller shall not take any action, directly or indirectly, to encourage, initiate
or engage or participate in discussions or negotiations with, or provide any
information to, any party other than Purchaser, concerning a potential
transaction involving the purchase and sale of the Business, any one or more
Facilities or any of Purchased Property, the purchase and sale of all or
substantially all of the ownership interest of any one or more entities
comprising the Seller, or any transaction similar to the foregoing.

 

Section 4.9 Anti-Trust Review.  Each of the parties have independently
determined, based upon the advice of their own respective counsel, that the
pre-merger filing requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (“HSR Act”), do not apply to the transactions
contemplated under this Agreement.

 

Section 4.10  Fines and Penalties.

 

Seller covenants and agrees to cure all violations and other deficiencies with
scope or severity equal or greater than a “G” level identified in writing by any
federal, state, municipal, local or other governmental or quasi-governmental
authority (all such matters collectively the “Violations”) relating to the
Facilities, pay all penalties associated therewith and prepare and

 

22

 

  

implement any plan of correction required by any such authority. The Purchaser
may stay any otherwise pending Closing in the event any material, uncured
Violations exist until such time as Seller has corrected any such material
Violations in full compliance with applicable laws, orders and directions.

 

Section 4.11 Further Assurances. Each party covenants and agrees that, following
the Closing, it will execute, deliver and acknowledge (or cause to be executed,
delivered and acknowledged), from time to time, at the reasonable request of the
other party and without further consideration, all such further instruments and
take all such further action as may be reasonably necessary or appropriate to
transfer more effectively to Purchaser, or to perfect or record Purchaser’s
title to or interest in the Purchased Property or to enable Purchaser to use or
otherwise to confirm or carry out the provisions and intent of this Agreement.

 

Section 4.12 Delivery of Schedules. Seller shall provide all Schedules required
by this Agreement (other than those required by ARTICLE 7 hereof, which will be
provided by Purchaser by the Schedule Due Date) within ten (10) days following
the Effective Date (the “Schedule Due Date”). If applicable, the Due Diligence
Period shall be extended by the total number of days which elapse between the
Schedule Due Date and the date upon which all required Schedules have actually
been provided to Purchaser, or, as applicable, any insufficiently completed
Schedules have been corrected to Purchaser’s reasonable satisfaction (inclusive
of the Schedule Due Date and the last applicable date of delivery or correction,
as applicable). Any fact or item disclosed on any Schedule to this Agreement
shall be deemed disclosed with regard to all other representations and
warranties to which such fact or item may reasonably apply to the extent such
disclosure would provide notice to a reasonable person that the information
disclosed would also qualify, or constitute an exception to, such other
representations and warranties. Seller may from time to time supplement and
update such Schedules to reflect any changes since the date of delivery of the
original Schedules or any matters of which Seller first acquires Knowledge
following the original delivery date of such Schedules. Any such updates or
supplements shall be deemed to amend the Schedules for all purposes
retroactively to the Effective Date, except that (i) no amendment to Schedules
1.1(a) and 2.4(a) may be made without Purchaser’s written consent, and (ii) any
amendments permitted above shall be disregarded (x) in determining whether the
conditions to Closing set forth in Section 5.3(a) or Section 5.3(e) below have
been satisfied, and (y) for all purposes under this Agreement if Seller
intentionally omitted such information from the original Schedules.
Notwithstanding the foregoing, if Purchaser has the right to terminate this
Agreement pursuant to Sections 5.6(b), (c) or (d) and does not exercise such
right as a result of such update to such schedules within ten (10) business days
thereof, then such update to the disclosure schedules shall be deemed to have
amended the appropriate schedule as of the Effective Date, to have qualified the
representations and warranties contained in Section 6 as applicable, as of the
Effective Date, and to have cured any misrepresentation or breach of warranty
that otherwise might have existed hereunder by reason of the existence of such
matter.

 

23

 

  

ARTICLE 5
Closing

 

Section 5.1   Closing.  The Closing of the transactions contemplated by this
Agreement shall occur remotely, upon the exchange of signatures to the documents
contemplated by this Agreement and the other required deliveries of each party
hereto described below on such date as mutually agreed by the parties, or the
date that is the later of (i) five (5) business days following the expiration of
the Due Diligence Period, or (ii) ten (10) business days following the execution
of a Property Leases between the applicable Operators and Purchaser unless
extended by mutual agreement of Purchaser and Seller or pursuant to Section 5.6,
Section 10.11, or Section 10.12. Additionally, Purchaser shall be entitled in
its sole discretion to adjourn the scheduled date of Closing with respect to the
Facilities by written notice to Seller for up to thirty (30) business days. The
date on which the Closing is scheduled to occur (as such date may be extended
from time to time pursuant to this Agreement) shall be the “Scheduled Closing
Date” hereunder. The date on which the Closing actually occurs for each Facility
shall be the “Closing Date” for purposes of this Agreement with respect to such
Facility.

 

Section 5.2   Conditions to Seller’s Obligations.   Except as may be waived in
writing by Seller, Seller’s obligation to make its deliveries at the Closing and
to effect and consummate the transactions contemplated hereby shall be subject
to the following conditions:

 

(a)          Representations and Warranties True and Correct. Each of
Purchaser’s representations and warranties contained in this Agreement, taken as
whole, shall be true in all material respects as of the Closing Date (except for
representations and warranties made as of a specified date, which shall have
been true and correct as of such date with the same effect as though made on
such date), and Purchaser shall have executed and delivered to Seller at Closing
a certificate confirming the foregoing.

 

(b)          Agreements Complied With. Each of Purchaser’s covenants and
agreements contained in this Agreement to be performed at or prior to the
Closing shall have been performed in all material respects at or prior to the
Closing.

 

(c)          Deliveries Made. At or prior to Closing, Purchaser shall have
delivered to Seller or to the Escrow Agent for release to Seller upon Closing,
and where applicable shall have duly executed, all the documents, certificates
and other instruments required to be delivered at Closing in accordance with
Section 5.5 or any other express provision of this Agreement.

 

Section 5.3  Conditions to Purchaser’s Obligations.  Subject to Section 5.6,
except as may be waived in writing by Purchaser, Purchaser’s obligation to make
its deliveries at the Closing and to effect and consummate the transactions
contemplated hereby shall be subject to the following conditions:

 

(a)          Representations and Warranties True and Correct. Each of Seller’s
representations and warranties contained in this Agreement, taken as a whole,
shall be true in

 

24

 

  

all material respects as of the Closing Date with the same effect as though made
on such date (except for representations and warranties made as of a specified
date, which shall have been true and correct as of such date), and Seller shall
have executed and delivered to Purchaser at Closing a certificate confirming the
foregoing.

 

(b)          Agreements Complied With. Each of Seller’s covenants and agreements
contained in this Agreement to be performed at or prior to the Closing shall
have been performed in all material respects at or prior to the Closing, and
Seller shall have executed and delivered to Purchaser at Closing a certificate
confirming the foregoing.

 

(c)          Deliveries Made. At or prior to Closing, Seller shall have
delivered to Purchaser or to the Escrow Agent for release to Purchaser upon
Closing, and where applicable shall have duly executed, all the documents,
certificates and other instruments required to be delivered at Closing in
accordance with Section 5.4 or any other express provision of this Agreement.

 

(d)          Licenses and Permits. Purchaser shall have obtained any
governmental licenses, permits or approvals required for Purchaser to own the
Real Property and lease the Facilities to the Operators.

 

(e)          No Material Adverse Change. (i) No Material Adverse Change shall
have occurred during the period between the Effective Date and the Closing Date,
(ii) the occupancy for the Facilities shall not have decreased by more than
eight percent (8%) below occupancy thereof (considered in the aggregate) as of
the end of the Due Diligence Period, and (iii) the occupancy for any Facility
shall not have decreased by more than twelve percent (12%) below occupancy
thereof as of the end of the Due Diligence Period.

 

(f)          Termination of Existing Leases. Any existing real property leases,
if any, relating to the Purchased Property which are not Residency Agreements or
which have not otherwise been approved by Purchaser in writing to continue
post-Closing shall have been terminated without fee or cost to Purchaser, and
Seller shall have provided Purchaser reasonable evidence of same.

 

(g)          No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction, or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect. No
action shall have been taken nor any statute, rule, or regulation shall have
been enacted by any governmental agency that makes the consummation of the
transactions contemplated hereby illegal.

 

(h)          Planned Capital Expenditures and Renovations. During the Due
Diligence Period Seller and Purchaser shall agree upon the capital expenditure
and renovation projects for the Facilities that must be completed prior to
Closing. For the avoidance of doubt, all such capital expenditures and
renovation projects shall be completed at Seller’s expense prior to Closing.

 

25

 

  

Section 5.4   Deliveries by Seller.   Seller shall deliver to Purchaser on or
before the Closing the following:

 

(a)          Deed. The Deed substantially in the form of Exhibit C attached
hereto, duly executed by Seller. In addition, in the event Purchaser elects to
have a new survey of the applicable Real Property (the “Survey”) prepared,
Seller agrees to provide a quitclaim deed at closing conveying title to the
applicable Real Property based on the metes and bounds description shown on the
Survey.

 

(b)          Bill of Sale and Assignment. A bill of sale and assignment in the
form of Exhibit D attached hereto (the “Bill of Sale and Assignment”) with
respect to the Purchased Personal Property located at the Facilities, if any,
duly executed by Seller.

 

(c)          Other Instruments. Such further instruments of conveyance and
transfer as Purchaser may reasonably require to consummate the transactions
contemplated by this Agreement to vest all of the Purchased Property in
Purchaser and to facilitate the transfer of such Purchased Property from Seller
to Purchaser, in form and substance reasonably acceptable to Purchaser.

 

(d)          Owner’s Affidavit. An Owner’s Affidavit in a form acceptable to the
Title Company to the extent required to issue the Title Policy.

 

(e)          Releases. Documents releasing or nullifying any title exceptions
(or providing reasonable evidence of such release or nullification) (relating to
the applicable Real Property) which Seller is obligated to release or nullify
pursuant to Section 2.4 hereof or, with respect to liens held by institutional
lenders, a written payoff letter with the release or discharge of such lien to
be provided after Closing in accordance with customary conveyancing practices.

 

(f)          Resolutions. A certified copy of the company resolutions
authorizing consummation of this Agreement and authorizing each entity
comprising Seller to execute all documents necessary for Closing as provided
herein.

 

(g)          Closing Certificate. The certificates required pursuant to Section
5.3(a) and Section 5.3(b).

 

(h)          1099S. A completed Form 1099S, or effective equivalent thereof,
describing the sale of the applicable Purchased Property.

 

(i)          Withholding Affidavit. If a Withholding Affidavit is required by
the Escrow Agent, Seller shall deliver the Withholding Affidavit to the Escrow
Agent prior to Closing.

 

(j)          Non-Foreign Status Affidavit. A certificate of non-foreign status
pursuant to Treasury Regulation Section 1.1445-2(b)(2) signed by Seller under
penalties of perjury stating Seller’s name, address and US taxpayer
identification number and stating that Seller is not a foreign person as defined
by Section 1445(f)(3) of the IRC.

 

26

 

  

(k)          Good Standing Certificate. A certificate of existence, certified by
the Secretary of State of Missouri as of a date which is within fifteen (15)
days of Closing, reflecting each Seller’s good standing as a limited liability
company.

 

(l)          Rent Roll. A true, correct, and complete rent roll for the
applicable Facility listing each resident as of a date which is within three (3)
business days prior to the Closing Date, the unit, bed or room number of such
resident, and the amount of the monthly fees to be paid by such resident
(including room, meal and other applicable monthly fees), the amount of security
deposit, if any, date of Residency Agreement and the expiration date of such
Residency Agreement, if applicable.

 

(m)          Executed Property Leases. Lease Agreements, in form and substance
attached as Exhibit E for each Facility (each a “Property Lease” and together
the “Property Leases”) duly executed by the applicable Operator.

 

(n)          Third Party Consents. The third party consents listed on Schedule
5.4(m).

 

(o)          Books and Records. Possession and control of books and records
included as part of the Purchased Property, if any, which are not physically
located at the Real Property as of the Closing Date.

 

(p)          Opinion of Counsel. An opinion of Seller’s counsel confirming the
issued and valid status of any governmental licenses, permits or approvals
required for each Operator to operate the applicable Facility and compliance
with any governmental and/or regulatory licensing, notice and/or approval
requirements applicable to the transactions contemplated by this Agreement
(including the change in ownership of the Real Property and the Purchaser’s
lease of the Real Property to the Operators post-Closing) (provided that
Purchaser shall pay one-half (50%) of Seller’s actual costs to deliver such
opinions up to a total maximum amount of $5,000.00).

 

(q)          Title Commitment. A title commitment in accordance with Section
2.4(a), subject only to the Permitted Title Exceptions and endorsed by the Title
Company.

 

(r)          Escrow Agreement. The Post-Closing Escrow Agreement, duly executed
by Seller.

 

Section 5.5   Deliveries by Purchaser. Purchaser shall deliver to Seller on or
before the Closing the following:

 

(a)          Payment Items. The items described in Section 3.2 hereof
representing payment of the Purchase Price.

 

(b)          Assumption Agreement. If applicable, an instrument of assumption of
the Assumed Liabilities, substantially the form attached as Exhibit F.

 

27

 

  

(c)          Escrow Agreement. The Post-Closing Escrow Agreement, duly executed
by Seller.

 

(d)          Property Leases. The Property Leases executed by each Purchaser.

 

(e)          Good Standing Certificate. A certificate of existence, certified by
the applicable Secretary of State as of a date which is within fifteen (15) days
of Closing; reflecting each Purchaser's good standing as a limited liability
company.

 

(f)          Closing Certificate. The certificates required pursuant to Section
5.3(a) and Section 5.3(b).

 

Section 5.6   Non-Fulfillment of Closing Conditions. Notwithstanding anything in
this Agreement to the contrary, the following shall apply exclusively if any of
the conditions in Sections Section 5.2 and Section 5.3 are not fulfilled as of
the Scheduled Closing Date:

 

(a)          If any of the conditions set forth in Section 5.2 have not been
fulfilled as of the Scheduled Closing Date, but all the conditions set forth in
Section 5.3 have been fulfilled or expressly waived by Purchaser, Seller may
elect (i) to proceed to Closing and waive such failure for all purposes
hereunder; or (ii) terminate this Agreement, in which case the Deposit shall be
disbursed to Seller as liquidated damages, and Purchaser shall have no further
liability to Seller except with respect to the surviving provisions described in
ARTICLE 9. If Seller elects to terminate this Agreement, Seller hereby waives
any right to recover the balance of the Purchase Price, or any part thereof, and
the right to pursue any other remedy permitted at law or in equity against
Purchaser. In no event under this Section 5.6 or otherwise shall Purchaser be
liable to Seller for any punitive, speculative or consequential damages.

 

(b)          If the conditions set forth in Section 5.3(a), Section 5.3(b),
Section 5.3(c), Section 5.3(d), Section 5.3(f), Section 5.3(g) or Section 5.3(h)
have not been fulfilled as of the Scheduled Closing Date, but all the conditions
set forth in Section 5.2 have been fulfilled or expressly waived by Purchaser
(other than those conditions that would be fulfilled upon Closing, including
without limitation payment of Purchase Price by Purchaser, provided Purchaser is
otherwise able to fulfill such conditions upon Closing), Purchaser may elect:
(i) to proceed with the Closing and waive any such failure to fulfill one or
more of such requirements for all purposes hereunder; or (ii) to extend the
Scheduled Closing Date for an additional thirty (30) days in order to provide
Seller the opportunity to fulfill such condition and if such condition is not
fulfilled within such thirty (30) day additional period Purchaser may terminate
this Agreement, in which case the Deposit shall be returned to Purchaser and
Seller shall reimburse Purchaser for Purchaser’s actual third party expenses
incurred by Purchaser in connection with its due diligence on the Purchased
Property; provided, however, such reimbursements shall not exceed One-Hundred
Fifty Thousand and No/100 U.S. Dollars ($150,000), and after which Seller shall
have no additional liability to Purchaser for such failure, except for the
surviving provisions described in ARTICLE 9. In no event under this

 

28

 

  

Section 5.6 or otherwise shall Seller be liable to Purchaser for any punitive,
speculative or consequential damages.

 

(c)          If the conditions set forth in or Section 5.3(e) have not been
fulfilled as of the Scheduled Closing Date, but all the conditions set forth in
Section 5.2 have been fulfilled or expressly waived by Purchaser (other than
those conditions that would be fulfilled upon Closing, including without
limitation payment of Purchase Price by Purchaser, provided Purchaser is
otherwise able to fulfill such conditions upon Closing), Purchaser may elect (i)
to proceed with Closing and waive such failure for all purposes hereunder; (ii)
to immediately terminate this Agreement, in which case the Deposit shall be
returned to Purchaser and Seller shall reimburse Purchaser for Purchaser’s
actual third party expenses incurred by Purchaser in connection with its due
diligence on the Purchased Property; provided, however, such reimbursements
shall not exceed One-Hundred Fifty Thousand and No/100 U.S. Dollars ($150,000),
and after which Seller shall have no additional liability to Purchaser for such
failure, except for the surviving provisions described in ARTICLE 9; (iii)
extend the Scheduled Closing Date for an additional thirty (30) days in order to
provide Seller the opportunity to fulfill such condition and if such condition
is not fulfilled within such thirty (30) day additional period, the entire
Deposit shall be returned to Purchaser and Seller shall reimburse Purchaser for
Purchaser’s actual third party expenses incurred by Purchaser in connection with
its due diligence on the applicable Purchased Property; provided, however, such
reimbursements shall not exceed One-Hundred Fifty Thousand and No/100 U.S.
Dollars ($150,000), and after which Seller shall have no additional liability to
Purchaser for such failure, except for the surviving provisions described in
ARTICLE 9. In no event under this Section 5.6 or otherwise shall Seller be
liable to Purchaser for any punitive, speculative or consequential damages.

 

(d)          If the Closing Conditions set forth in Section 5.3 have not been
satisfied before December 1, 2014, Purchaser shall have the absolute right to
terminate this Agreement, in which case the Deposit shall be returned to
Purchaser.

 

Section 5.7   Post-Closing Actions.   Seller shall promptly deliver to Purchaser
the original of any mail or other communication received by it after the Closing
Date pertaining to the Purchased Property, and any payments to which Purchaser
is entitled. Purchaser shall promptly deliver to Seller the original of any mail
or other communication received by Purchaser after the Closing Date and
addressed to Seller which does not pertain to the Purchased Property, and any
payments to which Seller is entitled.

 

Section 5.8   Termination During Due Diligence.  Notwithstanding anything herein
to the contrary, Purchaser shall have the right to terminate this Agreement in
its entirety at any time during the Due Diligence Period for any reason or for
no reason whatsoever. Upon any such termination, the Deposit shall be returned
to Purchaser, and the parties shall have no further liability or obligation to
one another arising from such termination except for the surviving provisions
described in ARTICLE 9.

 

29

 

 

ARTICLE 6
Representations and Warranties of Seller

 

The following representations and warranties are given by the Seller and, as
applicable, each representation and warranty related to Seller below shall be
deemed to have been given individually on behalf of each entity comprising the
Seller. Each entity comprising the Seller hereby represents and warrants,
jointly and severally, to Purchaser that as of the Effective Date:

 

Section 6.1  Organization and Standing.   Each entity comprising the Seller is a
limited liability company duly organized, validly existing, and in good standing
under the laws of the State of Delaware and has the requisite power and
authority to own, sell, lease and operate its properties and to carry on its
businesses as now being conducted. Each entity comprising the Seller has the
company power and authority to execute and deliver this Agreement and to
consummate the transactions and perform the obligations contemplated by the
Agreement. Each entity comprising the Seller is duly qualified to do business as
a foreign limited liability company in the State of Missouri.

 

Section 6.2  Valid and Binding Obligations. The execution, delivery and
performance of this Agreement and all other agreements and instruments to be
executed and delivered by Seller hereunder, and the consummation of the
transactions contemplated by this Agreement, have been duly authorized by all
necessary company action of Seller. This Agreement constitutes, and all
instruments required to be executed and delivered by Seller before or at the
Closing will constitute, the valid and binding obligations of Seller,
enforceable against Seller, in accordance with their respective terms. All
persons who have executed this Agreement on behalf of Seller have been duly
authorized to do so by all necessary company action of Seller and all persons
who execute instruments required to be executed and delivered by Seller before
or at the Closing shall have been duly authorized to do so by all necessary
company action of Seller.

 

Section 6.3  Title; Purchased Property Complete.  Seller has good title to all
of the Purchased Personal Property, and at the Closing, Seller shall transfer
the Purchased Property to Purchaser, free and clear of all liabilities, liens
and, encumbrances except for the Assumed Liabilities and the Permitted
Encumbrances. Seller has the unrestricted right to convey and assign the
Purchased Property. Purchaser acknowledges with respect to the Real Property,
that Purchaser will rely solely upon (i) Seller’s warranties contained in the
Deed and (ii) Purchaser’s owner’s policy of title insurance, and that Seller
gives no other warranty regarding title to the Real Property.

 

Section 6.4  Taxes and Tax Returns.  All Seller Parties have filed when due or
will file when due in correct form all federal and state income tax returns for
all periods ending on or prior to the Closing Date which are required to be
filed by the applicable Seller Party on or prior to the Closing Date. Other than
extensions to file any Seller Party’s tax returns, there are no agreements by
any Seller Party for the extension of time for the assessment of any tax. All
federal, state, county and local taxes due and payable by any Seller Party on or
before the Effective Date have been paid and any taxes due and payable at any
time between the

 

30

 

  

Effective Date through the Closing will be paid prior to Closing, and there are
no federal, state or local tax liens pending or threatened against Seller Party
or the Purchased Property. There is no open audit of any of Seller Party’s
federal, state, local income, sales use or property tax returns pending, and no
Seller Party has received notice of the pendency of any such audit or
examination. No Seller Party holds a certificate or other authorization issued
by any tax collection body for the purpose of avoiding the payment by such
Seller Party of sales and use taxes upon such Seller Party’s purchases of goods
and services, nor has any Seller Party applied for such a certificate or other
authorization.

 

Section 6.5   Execution and Delivery.   Except as set forth in Schedule 6.5,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement will:

 

(a)          violate any provisions of the certificates of formation or
operating agreements of Seller;

 

(b)          violate any contract or agreement relating to borrowed money, or
any judgment, order, injunction, decree or award against, or binding upon Seller
or upon the property or business of Seller, which violation would prevent, delay
or materially hinder consummation of the transactions contemplated by this
Agreement;

 

(c)          result in the creation of any material lien, charge or encumbrance
upon any of the Purchased Property pursuant to the terms of any agreement or
instrument to which Seller is a party or by or to which Seller or any of the
Purchased Property may be bound, subject or affected;

 

(d)          violate any judgment, order, injunction, decree or award against,
or binding upon, Seller or upon the Purchased Property; or

 

(e)          result in any breach, violation, default or cancellation of any
contract, agreement, mortgage, deed to secure debt, or lease to which Seller is
a party or by which Seller is bound or the Purchased Property is subject that
could have a Material Adverse Effect on the Purchased Property.

 

Section 6.6  Contracts and Leases.  Schedule 6.6 hereto sets forth all
contracts, leases or agreements to which Seller is a party, written or oral,
currently in effect that are material to the ownership and use of the Purchased
Property, other than the Residency Agreements, in each case identifying the
applicable Facility to which such agreements relate. Each of such contracts is
in full force and effect in accordance with its terms. Seller is not in material
breach, default or violation of any such contracts and, to Seller’s Knowledge,
no other party to any such contract or lease is in material breach, default or
violation thereof.

 

Section 6.7   Residency Agreements and Related Matters. Schedule 6.7 contains a
list of all of the Residency Agreements currently in effect.  Each of the
Residency Agreements is in full force and effect in accordance with its terms.
Seller has made available to

 

31

 

  

Purchaser true and correct copies of all Residency Agreements, including all
material amendments or modifications to same. No Seller Party is in material
breach, default or violation of any Residency Agreement and, to Seller’s
Knowledge, no other party to any such contract is in material breach, default or
violation thereof. No event has occurred and no condition exists that, with the
passage of time or the giving of notice, or both, would constitute a material
default by any Seller Party or, to Seller’s Knowledge, any other party to any
Residency Agreement. Except as otherwise noted on Schedule 6.7, Seller has no
obligation with respect to refund of any deposits, interest on deposits or
similar obligations with respect to any Residency Agreement. The rent roll
provided pursuant to Section 5.4(l) is true and correct in all material respects
as of the date thereof.

 

Section 6.8  Permits and Licenses.  Schedule 6.8 contains a complete list of all
material governmental permits, licenses, certificates and authorizations held by
any Seller Party that relate to the ownership, use, operation or management of
the Purchased Property (the “Permits and Licenses”).  Seller shall make
available to Purchaser true and correct copies of all Permits and Licenses
before the end of the Diligence Materials Due Date. The Permits and Licenses are
in full force and effect, and have not been revoked or rescinded, nor to
Seller’s Knowledge has any governmental agency or authority threatened to revoke
or rescind any such Permit or License. To Seller’s Knowledge, each Seller Party
is using, operating and managing the Purchased Property in material compliance
with the terms and conditions of the Permits and Licenses, and except as noted
in periodic inspection or survey reports by agencies having jurisdiction over
the Seller Parties, copies of which shall be made available to Purchaser before
the end of the Diligence Materials Due Date and promptly when received
thereafter, no Seller Party has received no written notice of any uncured
deficiency or violation of any such term or condition from any applicable
government body or agency. Except for the Permits and Licenses shown on said
Schedule 6.8, there are to Seller’s Knowledge no other material governmental
permits, licenses, certificates or authorizations required for Seller to own,
use, operate or manage the Purchased Property as currently operated by the
Seller Parties.

 

Section 6.9  Insurance.  Schedule 6.9 lists all of Seller’s policies of property
and casualty insurance and liability insurance currently in effect and covering
the Facilities and operation thereof by the Seller Parties, copies of which will
be made available for review by Purchaser prior to the end of the Diligence
Materials Due Date.  Each such policy currently is in full force and effect and,
to Seller’s Knowledge, no Seller Party has not taken or failed to take any
action which would limit or impair any Seller Party’s rights thereunder with
respect to any matter for which Purchaser could be held liable as a successor to
Seller. Schedule 6.9 lists any pending, unresolved claims under Seller Party’s
policies of property and casualty or liability insurance, as well as all claims
made and resolved within the past three (3) years. Seller has not received
written, or to Seller’s Knowledge, oral, notice of any pending cancellation or
nonrenewal of such policies.

 

Section 6.10  Employees.

 

Seller and Operator have complied in all material respects with all laws and
regulations dealing with employment of Employees. Schedule 6.10 provides a list
and brief description of all

 

32

 

  

litigation or administrative claims filed by Employees or former employees who
performed services for the Business against Seller or Operator during the past
three (3) years, if any.

 

Section 6.11  Litigation. Except as described on Schedule 6.11, there is no
litigation, action, suit, or other proceeding currently pending, or to Seller’s
Knowledge, threatened against any Seller Party, at law or in equity, or before
any federal, state, municipal, local or other governmental or quasi-governmental
authority, or before any arbitrator. To Seller’s Knowledge, there is no pending
investigation outside the ordinary course of business of any Seller Party or
Facility by any governmental or quasi-governmental authority. Seller is not
subject to any judgment, injunction, order, writ or decree of any court or other
governmental authority or agency relating specifically to Seller or to the
ownership, operation or management of the Purchased Property and/or the
operations of the Business.

 

Section 6.12  Compliance with Laws. Except as otherwise noted on Schedule 6.12: 

 

(a)          Each Seller Party is in compliance in all material respects with
all applicable laws, rules or regulations in connection with its ownership, use,
operation or management of the applicable Facility, including without limitation
all laws, rules and regulations related to Government Programs and has not
received notice of any violation thereof which has not been cured as of the
Effective Date.

 

(b)          There are no pending or threatened (i) civil monetary penalties,
terminations or exclusions from participation in any Government Programs for any
Facility, (ii) material payment denials, or (iii) other sanctions of a
governmental authority against any Seller Party or the Facilities. Seller and
Business are in good standing in all applicable Government Programs. No Seller
Party nor the Business has any material liabilities to any third-party fiscal
intermediary or carrier administering the Government Programs, directly to the
Government Programs or any Governmental Authority, or to any other third-party
payor for the recoupment of any amounts previously paid by any such third-party
fiscal intermediary, carrier, Government Program, or other third-party payor.
Except for industry standard reviews and audits, no Seller Party nor the
Business has any pending or, to Seller’s knowledge, threatened investigations,
audits, or other actions by any third-party fiscal intermediary or carrier
administering the Government Programs or any Governmental Authority, by the
United States Department of Health and Human Services, any state Medicaid
agency, intermediary or carrier, or any third party to recoup, set-off, or
suspend payments to, or demand a refund from, or terminate provider agreements
with, or asserting any claim, demand, penalty, fine, or other sanction with
respect to any of the activities, practices, policies, or claims of any Seller
Party or the Business. To Seller’s Knowledge, no Seller Party, nor any party on
behalf of any Seller Party or any Facility has received any over-payment or
unearned payment from any Government Program or, to Seller’s Knowledge,
submitted to any Government Program any false or fraudulent claim for payment.

 

(c)          No Seller Party nor the Business has, to Seller’s Knowledge,
engaged in any activities which are prohibited, or are cause for civil penalties
or mandatory or permissive

 

33

 

  

exclusion from Medicare, Medicaid, or any other State Health Care Program or
Federal Health Care Program (as those terms are defined in 42 C.F.R. Section
1001.2) under 42 U.S.C. Sections 1320a-7, 1320-7a, 1320a-7b, or 1395nn, or the
Federal False Claims Act, 31 U.S.C. Section 3729, or the regulations promulgated
pursuant to such statutes, nor has any Seller Party, any Facility, or any
employees or contractors of Seller or any Facility been excluded from
participation in any such program.

 

(d)          Each Seller Party has, and the Facilities have, complied with all
applicable security and privacy standards regarding protected health information
under the Health Insurance Portability and Accountability Act of 1996, as
amended by the Health Information Technology for Economic and Clinical Health
Act provisions of the American Recovery and Reinvestment Act of 2009, all
applicable state privacy laws, and with all applicable regulations promulgated
under any such legislation.

 

(e)          No Seller Party nor any Facility has submitted any claim to any
Government Program in connection with any referrals that violated any applicable
self-referral Law, including the Federal Ethics in Patient Referrals Act, 42
U.S.C. Section 1395nn (the “Stark Law”) or any applicable state self-referral
Law.

 

(f)          Each Seller Party has, and the Facilities have, complied with all
disclosure requirements of all applicable self-referral Laws, including the
Stark Law and any applicable state self-referral law.

 

(g)          No Seller Party nor any Facility has knowingly or willfully
solicited, received, paid, or offered to pay any remuneration, directly or
indirectly, overtly or covertly, in cash or in kind, for the purpose of making
or receiving any referral which violated any applicable anti-kickback law,
including the federal Anti-Kickback Statute, 42 U.S.C. Section 1320-7b(b) (known
as the “Anti-Kickback Statute”).

 

Section 6.13  Financial Statements.  The financial statements of the Seller
Parties for the period ended December 31, 2013 and for the five (5) months ended
May 31, 2014 are attached hereto as Schedule 6.13 (the “Financial Statements”).
 Except as otherwise set forth on Schedule 6.13, the Financial Statements have
been prepared consistently applied throughout the periods indicated and present
fairly in all material respects the results of operations and financial
condition of the Seller for the respective periods indicated. The monthly
financial reports to be provided to Purchaser pursuant to Section 4.2(k) will be
based upon the books and records of the Seller Parties consistent with Seller’s
current reporting practice, and will present fairly in all material respects the
information purported to be presented therein.

 

Section 6.14  Real Property.  To Seller’s Knowledge, and except as may be
disclosed on Schedule 6.14, the current use of the Real Property by the Seller
Parties complies in all material respects with applicable zoning and land use
laws, rules and regulations and with all applicable building codes, and no
Seller Party has received written notice of any

 

34

 

  

zoning, land use or building code violation relative to the Real Property which
has not been cured prior to the date hereof. To Seller’s Knowledge (unless
Seller is a party thereto), there is no pending litigation or dispute concerning
the location of the lines and corners of the Real Property. No Seller Party has
received written notice of, and has no other Knowledge of, pending, threatened
or contemplated actions by any governmental authority or agency having the power
of eminent domain, which might result in any part of the Real Property being
taken by condemnation or conveyed in lieu thereof. To Seller’s Knowledge, there
is no claim of adverse possession with respect to any part of the Real Property.

 

Section 6.15 Environmental Matters.  Except as disclosed on Schedule 6.15, or in
any environmental audit or inspection report made available by Seller before the
end of the Diligence Materials Due Date to Purchaser or the ESAs generated by
Purchaser’s environmental consultants, to Seller’s Knowledge: (a) no areas exist
on the Real Property where Hazardous Substances have been generated, disposed
of, released, stored or found in violation of any Environmental Laws, and Seller
has no Knowledge and has received no notice of the existence of any such areas
for the generation, storage or disposal of any Hazardous Substances on the Real
Property in violation of any Environmental Laws; (b) neither any Seller Party
nor any of their respective agents has violated in any material respect any of
the applicable Environmental Laws relating to or affecting the Real Property;
(c) the Real Property is presently in compliance in all material respects with
all Environmental Laws; (d) the Seller Parties have obtained all material
licenses, permits and/or other governmental or regulatory approvals necessary to
comply with Environmental Laws relating to their respective use of the Real
Property, and the Seller Parties are in compliance in all material respects with
the terms and provisions of all such licenses, permits and/or other governmental
or regulatory approvals; (e) no underground storage tanks are currently located
on the Real Property; (f) the Real Property has not been previously used as a
landfill or as a dump for garbage or refuse; and (g) no asbestos containing
building material or lead based paint are present in any structures located on
the Real Property. Notwithstanding the generality of any of the other
representations and warranties in this ARTICLE 6, this Section 6.15 contains the
exclusive representations and warranties of Seller with respect to compliance
with Environmental Laws and the presence or absence of Hazardous Substances.

 

Section 6.16  Brokers, Finders.  Seller has not retained any broker or finder in
connection with the transactions contemplated hereby so as to give rise to any
claim against Purchaser for any brokerage or finder’s commissions, fee, or
similar compensation.

 

Section 6.17  FIRPTA.  Seller is not a “foreign person” as that term is defined
in the Internal Revenue Code of 1986, as amended, and the regulations
promulgated pursuant thereto, and Purchaser has no obligation under Internal
Revenue Code Section 1445 to withhold and pay over to the Internal Revenue
Service any part of the amount realized by Seller in the transaction
contemplated hereby (as such term is defined in the regulations issued under IRC
Section 1445).

 

Section 6.18  Solvency.  Seller is not now insolvent, and will not be rendered
insolvent by completion of the transactions contemplated herein. For purposes of
the

 

35

 

  

preceding sentence, “insolvent” means, upon completion of the Closing, (i) that
the fair market value of Seller’s assets is less than the sum of Seller’s debts
and other liabilities or (ii) Seller has inadequate cash flow to service its
debts as they come due. Upon the completion of the transactions contemplated
herein, Seller will have adequate capital for the purposes of engaging in any
business or transaction in which Seller is or will engage.

 

Section 6.19  Consent of Third Parties.  Except as otherwise set forth on
Schedule 6.19, no consent of any third party is required as a condition to the
entering into, performance or delivery of this Agreement by Seller, other than
such consents as would not, in any individual case or in the aggregate, have a
material adverse effect upon Purchaser’s ability to complete the purchase of the
Purchased Property or the ability of the Operators to operate the Facilities
post-Closing in substantially the manner the Facilities are currently being
operated.

 

Section 6.20  No Governmental Approvals; Permits.  Except as set forth in on
Schedule 6.20, no order, permission, consent, approval, license, authorization,
registration or validation of, or filing with, or exemption by, any governmental
agency, commission, board or public authority is required to authorize, or is
required in connection with the execution, delivery and performance by Seller of
this Agreement or the taking of any action contemplated by this Agreement, which
has not been obtained.

 

Section 6.21  Assessments. Except as described in Schedule 6.21, to Seller’s
Knowledge, there are no (i) special or other assessments for public improvements
or otherwise now affecting any of the Purchased Property, (ii) any pending or
threatened special assessments affecting the Purchased Property, or (iii) any
contemplated improvements affecting any of the Purchased Property that may
result in special assessments affecting any of the Purchased Property. Each of
the Facilities is appropriately licensed, taking into account the levels of care
and services provided at such Facility and the requirements of applicable laws
and regulations where the Facility is located. Each of the Facilities is
certified and participates as a provider in the Medicare and Medicaid
reimbursement programs. The Operators have all permits, licenses and
authorizations necessary for the conduct of, or relating to the legal use,
ownership and operation of, the Facilities as now operated. All permits,
licenses and authorizations of the Seller Parties are valid and in full force
and effect.

 

Section 6.22  Title Encumbrances.   Except as described on Schedule 6.22, Seller
is not in default under any of its material obligations under any recorded
agreement, easement or instrument encumbering title to the Real Property, and to
Seller’s Knowledge, there is no default on the part of any other party thereto.

 

Section 6.23 Affordable Housing Units.  No bedroom or unit at any Facility is
leased or reserved for lease as an affordable housing unit or for low or
moderate income residents. No Facility is required to lease or reserve any unit
or bedroom as an affordable housing unit or bedroom or for low or moderate
income residents pursuant to a presently existing agreement or requirement of
law.

 

36

 

 

Section 6.24  Loans. There are no loans or debts secured by any of the Purchased
Property except for (ii) loans and debts described on Schedule 6.24, or (iii)
loans and debts reflected on the Title Policy.

 

Section 6.25   No Other Warranties.  

Except for the express representations and warranties of Seller contained in
this ARTICLE 6 or in the Deed or Bill of Sale and Assignment, Purchaser
acknowledges that Seller has not made, and Purchaser has not relied upon, any
other representation or warranty, express or implied, with respect to Seller,
the Business, the Purchased Property or the transactions contemplated herein.

 

ARTICLE 7
Representations and warranties of Purchaser

 

Purchaser hereby represents and warrants to Seller as follows:

 

Section 7.1   Organization and Standing.  Purchaser is a limited partnership
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Purchaser has
the partnership power and authority to execute and deliver this Agreement and to
consummate the transactions and to perform its obligations contemplated by this
Agreement. Purchaser is, or on or prior to the Closing will be, duly qualified
to do business as a foreign limited liability company in the State of Missouri.

 

Section 7.2   Execution and Delivery.  The execution and delivery of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, have been duly authorized by all necessary partnership action of
Purchaser. This Agreement constitutes, and all instruments required to be
executed and delivered by Purchaser before or at the Closing will constitute,
the valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms. All persons who have executed this
Agreement on behalf of Purchaser have been duly authorized to do so by all
necessary company action of Purchaser and all persons who execute instruments
required to be executed and delivered by Purchaser before or at the Closing
shall have been duly authorized to do so by all necessary company action of
Purchaser. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement will:

 

(a)          violate any provisions of the certificate of partnership or
partnership agreement of Purchaser;

 

(b)          violate any contract or agreement relating to borrowed money, or
any judgment, order, injunction, decree or award against, or binding upon
Purchaser or upon the property or business of Purchaser, which violation would
prevent, delay or materially hinder consummation of the transactions
contemplated by this Agreement;

 

37

 

  

(c)          violate any judgment, order, injunction, decree or award against,
or binding upon, Purchaser; or

 

(d)          result in any breach, violation, default or cancellation of any
contract, agreement, mortgage, deed to secure debt, or lease to which Purchaser
is a party or by which Seller is bound and that could have a material adverse
effect upon Purchaser’s ability to consummate the transactions described herein.

 

Section 7.3  Solvency.  Purchaser is not now insolvent, and will not be rendered
insolvent by completion of the transactions contemplated herein. For purposes of
the preceding sentence, “insolvent” means, upon completion of the Closing, (i)
that the fair market value of Purchaser’s assets is less than the sum of
Purchaser’s debts and other liabilities or (ii) Purchaser has inadequate cash
flow to service its debts as they come due. Upon the completion of the
transactions contemplated herein, Purchaser will have adequate capital for the
purposes of any business or transaction in which Purchaser is or will engage.

 

Section 7.4  Consent of Third Parties.  Except for the licenses and permits
described in Section 5.3(d), no consent of any third party is required as a
condition to the entering into, performance or delivery or this Agreement by
Purchaser, other than such consents as would not, in any individual case or in
the aggregate, have a material adverse effect upon Purchaser’s ability to
consummate the transactions contemplated by this Agreement.

 

Section 7.5   No Governmental Approvals.  To Purchaser’s knowledge, except for
the requirement for Purchaser to obtain the licenses and permits described in
Section 5.3(d), no order, permission, consent, approval, license, authorization,
registration or validation of, or filing with, or exemption by, any governmental
agency, commission, board or public authority is required to authorize, or is
required in connection with the execution, delivery and performance by Purchaser
of this Agreement or the taking of any action contemplated by this Agreement,
which has not been obtained.

 

Section 7.6   Brokers, Finders.  Purchaser has not retained any broker or finder
in connection with the transactions contemplated hereby so as to give rise to
any valid claim against Seller for any brokerage or finder’s commission, fee, or
similar compensation.

 

ARTICLE 8
Indemnification

 

Section 8.1   Indemnification by Seller. Following the Closing, each entity
comprising the Seller shall jointly and severally indemnify, hold harmless and
defend Purchaser from and against any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including, without limitation,
reasonable attorneys’ fees and other legal costs and expenses) (collectively,
“Losses”) which Purchaser may at any time suffer or incur, or become subject to,
as a result of or in connection with:

 

38

 

  

(a)          any breach or inaccuracy of any of the representations and
warranties made by Seller in this Agreement;

 

(b)          any failure by Seller to carry out, perform, satisfy and discharge
any of its covenants, agreements, undertakings, liabilities or obligations under
this Agreement;

 

(c)          the Excluded Liabilities;

 

(d)          the failure to comply with applicable bulk sales laws; or

 

(e)          any federal, state, or local income, payroll, sales and use, ad
valorem or other taxes payable by Seller or for which Seller is liable in
connection with any period prior to the Closing Date, and any interest or
penalties thereon.

 

Section 8.2  Indemnification by Purchaser.  Following the Closing, Purchaser
shall indemnify and hold harmless Seller from and against, and reimburse Seller
for, any and all Losses which Seller may at any time suffer or incur, or become
subject to, as a result of or in connection with:

 

(a)          any breach or inaccuracy of any representations and warranties made
by Purchaser in or pursuant to this Agreement;

 

(b)          any failure by Purchaser to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities or
obligations under this Agreement; or

 

(c)          the Assumed Liabilities.

 

Section 8.3  Indemnification Limits; Survival.  Purchaser Indemnification
Limits; Survival. Purchaser shall not be entitled to any indemnification from
Seller under Section 8.1(a) or Section 8.1(b) unless and until the aggregate
amount of indemnifiable claims of Purchaser under this Agreement exceeds
Twenty-Five Thousand Dollars ($25,000) (the “Seller Threshold”), at which point
Seller shall be liable for all indemnifiable claims of Purchaser under Section
8.1(a) and Section 8.1(b). Seller’s liability for indemnification under Section
8.1(a) and Section 8.1(b) shall not in any case exceed five percent (5%) of the
total Purchase Price (the “Indemnification Cap”); provided, however, that
neither the Seller Threshold nor the Indemnification Cap shall apply in the case
of: (i) fraud on the part of Seller; (ii) any claims arising under Section
8.1(a) with respect to the representations and warranties contained in Section
6.1, Section 6.2, Section 6.3, Section 6.5, Section 6.16, or Section 6.17 (which
shall be limited to the Purchase Price); or (iii) any claims arising under
Sections Section 8.1(c), Section 8.1(d), or Section 8.1(e). All of Seller’s
representations and warranties under this Agreement shall survive for a period
of twenty-four (24) months following the Closing Date. Purchaser’s right to make
any claim for indemnification against Seller under Section 8.1(a), Section
8.1(b) and Section 8.1(d) shall expire at the end of the twenty-fourth (24th)
month following the Closing; provided, however, that any claim for which
Purchaser has given written notice prior to expiration of such twenty-four (24)
month

 

39

 

  

anniversary shall survive until finally adjudicated; and further provided that
Purchaser’s right to make any claim for indemnification pursuant to Section
8.1(c) and/or Section 8.1(e) shall survive for the applicable statute of
limitations period for collection of the applicable tax.

 

(b)          Seller Indemnification Limits; Survival. Seller shall not be
entitled to any indemnification from Purchaser under Sections Section 8.2(a) or
Section 8.2(b) unless and until the aggregate amount of indemnifiable claims of
Seller under this Agreement, Twenty-Five Thousand Dollars ($25,000) (the
“Purchaser Threshold”), at which point Purchaser shall be liable for all
indemnifiable claims of Seller under Section 8.2(a) and Section 8.2(b).
Purchaser’s liability for indemnification under Section 8.2(a) and Section
8.2(b) shall not in any case exceed five percent (5%) of the total Purchase
Price (the “Purchaser Indemnification Cap”); provided, however, that neither the
Purchaser Threshold nor the Purchaser Indemnification Cap shall apply in the
case of: (i) fraud on the part of Purchaser; (ii) any claims arising under
Section 8.2(a) with respect to the representations and warranties contained in
Sections Section 7.1, Section 7.2, and Section 7.6 (which shall be limited to
the Purchase Price); or (iii) any claims arising under Section 8.2(c). All of
Purchaser’s representations and warranties under this Agreement shall survive
for a period of twenty-four (24) months following the Closing Date.

 

(c)          For purposes of determining the amount of Losses that are subject
to indemnification hereunder with respect to any events, facts or circumstances,
after determining whether or not such facts, events or circumstances give rise
to a breach of a representation or warranty (after giving full effect to any
qualifications as to materiality or similar standards, or of lack of “material
adverse effect,” contained in such representation and warranty), the
determination of the amount of Losses for such breach of representation and
warranty, as it relates to such facts, events or circumstances, shall be made
without giving effect to any qualifications as to materiality or similar
standards, or the lack of “material adverse effect” contained in such
representation or warranty.

 

(d)          Any payments made pursuant to ARTICLE 8 of this Agreement shall be
treated as a purchase price adjustment for income tax purposes.

 

(e)          For purposes of this Section 8.3, the total Purchase Price shall be
deemed to mean the Purchase Price, as adjusted in accordance with the terms of
this Agreement, for each Facility for which a Closing has occurred hereunder.

 

Section 8.4   Procedures Regarding Third Party Claims.   The procedures to be
followed by Purchaser and Seller with respect to indemnification hereunder
regarding claims by third parties shall be as follows:

 

(a)          Promptly after receipt by Purchaser or Seller, as the case may be,
of notice of the commencement of any action or proceeding or the assertion of
any claim by a third person, which the party receiving such notice has reason to
believe may result in a claim by it for indemnity pursuant to this Agreement,
such person (the “Indemnified Party”) shall give notice of such action,
proceeding or claim to the party against whom indemnification is sought (the

 

40

 

  

“Indemnifying Party”), setting forth in reasonable detail the nature of such
action or claim, including copies of any written correspondence from such third
person to such Indemnified Party.

 

(b)          The Indemnifying Party shall be entitled, at its own expense, to
assume and control such defense with counsel chosen by the Indemnifying Party
and approved by the Indemnified Party, which approval shall not be unreasonably
withheld or delayed. The Indemnified Party shall be entitled to participate in
such defense after such assumption at the Indemnified Party’s own expense. Upon
assuming such defense, the Indemnifying Party shall have full rights to enter
into any monetary compromise or settlement which is dispositive of the matters
involved; provided that such settlement is paid in full by the Indemnifying
Party and will not have any continuing material adverse effect upon the
Indemnified Party.

 

(c)          With respect to any action, proceeding or claim as to which the
Indemnifying Party shall not have exercised its right to assume the defense, the
Indemnified Party may assume and control the defense of and contest such action,
proceeding or claim with counsel chosen by it. The Indemnifying Party shall be
entitled to participate in the defense of such action, the cost of such
participation to be at its own expense. The Indemnifying Party shall be
obligated to pay the reasonable attorneys’ fees and expenses of the Indemnified
Party to the extent that such fees and expenses relate to claims as to which
indemnification is due under Section 8.1 or Section 8.2 hereof, as the case may
be. The Indemnified Party shall have full rights to dispose of such action and
enter into any monetary compromise or settlement; provided, however, in the
event that the Indemnified Party shall settle or compromise any claims involved
in the action insofar as they relate to, or arise out of, the same facts as gave
rise to any claim for which indemnification is due under Section 8.1 or Section
8.2 hereof, as the case may be, it shall act reasonably and in good faith in
doing so.

 

(d)          Both the Indemnifying Party and the Indemnified Party shall
cooperate fully with one another in connection with the defense, compromise or
settlement of any such claim, proceeding or action, including, without
limitation, by making available to the other all pertinent information and
witnesses within its control.

 

Section 8.5   General Qualifications on Indemnification.  Notwithstanding any
provision to the contrary, the indemnification rights set forth in Section 8.1
and Section 8.2 shall be subject to the following:

 

(a)          The liability of an Indemnifying Party with respect to any
indemnification claim shall be reduced by the amount of any tax benefit actually
realized received by Indemnified Party as a result of any damages, upon which
such claim is based, and shall include any tax detriment actually suffered by
the Indemnified Party as a result of such damages. The amount of such tax
benefit or detriment shall be determined by taking into account the effect, if
any, and to the extent determinable, of timing differences resulting from the
acceleration or deferral of items of gain or loss resulting from such damages.

 

41

 

  

(b)          In no event shall any Indemnifying Party be liable to any
Indemnified Party for (nor shall any claimed indemnification amounts include)
any punitive, incidental, consequential, special or indirect damages, including
loss of future revenue or income, loss of business reputation or opportunity or
lost profits relating to the breach or alleged breach of this Agreement, or
diminution of value or any damages based on any type of multiple.

 

(c)          Payments by an Indemnifying Party pursuant to this Section 8.4
pursuant to Section 8.1 or Section 8.2 shall be limited to the amount of any
liability or damage that remains after deducting therefrom any insurance
proceeds and any indemnity, contribution or other similar payment received or
reasonably expected to be received by the Indemnified Party in respect of any
such claim. The Indemnified Party shall use its commercially reasonable efforts
to recover under insurance policies or indemnity, contribution or other similar
agreements for any losses prior to seeking indemnification under this Agreement.

 

(d)          Upon payment in full of any indemnification claim, the Indemnifying
Party shall be subrogated to the extent of such payment to the rights of the
Indemnified Party against any person or entity with respect to the subject
matter of such indemnification claim.

 

(e)          An Indemnified Party may not recover for any losses otherwise
indemnifiable under Section 8.1(a), Section 8.1(b), Section 8.2(a) or Section
8.2(b) if such Indemnified Party had actual (and not imputed) knowledge prior to
Closing of the breach, inaccuracy or failure giving rise to such losses.

 

(f)          An Indemnifying Party shall be relieved of its duty to indemnify an
Indemnified Party hereunder if and to the extent the Indemnified Party fails to
use commercially reasonable efforts in good faith to mitigate its damages,
including, but not limited to, failure to give timely notice to its insurance
carriers and to pursue recovery under applicable policies of insurance.

 

(g)          Any amounts due to Purchaser from Seller pursuant to this ARTICLE 8
shall be paid first from the Holdback Amount in accordance with the Escrow
Agreement, until the Holdback Amount has been exhausted or released.

 

Section 8.6   Exclusivity.   Following the Closing, in the absence of actual
fraud on the part of Seller (in which case Purchaser may avail itself of
statutory and common law remedies for fraud), the right to receive
indemnification under this ARTICLE 8 shall be the sole and exclusive remedy of
Purchaser or Seller for monetary damages of any kind with respect to this
Agreement (including any certificate certifying compliance with, or the truth or
accuracy of, any provision of this Agreement) or conduct otherwise relating to
the negotiation and consummation of the purchase and sale of the Purchased
Property hereunder.

 

Section 8.7   Effective Upon Closing.  The provisions of this ARTICLE 8 shall
become effective upon completion of the Closing, and shall have no force and
effect prior to the Closing or if this Agreement is terminated prior to Closing.

 

42

 

 

ARTICLE 9
Termination

 

This Agreement and the transactions contemplated hereby may be terminated at any
time prior to Closing as follows:

 

(a)          in its entirety by mutual written agreement of Seller and
Purchaser;

 

(b)          by Purchaser as and to the extent permitted pursuant to Section
2.4(d)(ii), Section 5.6(b), Section 5.6(c), Section 5.6(d), Section 5.8, Section
10.11 and Section 10.12;

 

(c)          by Seller as and to the extent permitted pursuant to Section
5.6(a);

 

(d)          if a court of competent jurisdiction or other governmental agency
shall have issued an order, decree, or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining, or otherwise prohibiting
the transactions contemplated by this Agreement, and such order, decree, ruling,
or other action shall have become final and nonappealable; or

 

(e)          by the Purchaser in its entirety if the Seller shall have breached
any of its representations, warranties, covenants or agreements contained in
this Agreement (other than the conditions contained in Section 5.2 hereof),
which breach cannot be or has not been cured within five (5) business days after
the giving of written notice by the Purchaser to the Seller specifying such
breach.

 

Upon termination of this Agreement prior to Closing, except as otherwise
expressly provided herein, the parties shall have no further liability hereunder
except that the following provisions shall survive any such termination: Section
4.1(d), Section 4.5, Section 4.6(b)(v) and Section 4.7. In the event of any
termination of this Agreement pursuant to subsection ARTICLE 9(e) above, the
Deposit shall be returned to Purchaser and Purchaser shall be entitled to
reimbursement by Seller of all of its costs and expenses related to the
potential acquisition of the Facilities, including without limitation legal fees
and fees paid to third parties related to Purchaser’s due diligence review of
the Facilities provided, however, such reimbursements shall not exceed
One-Hundred Fifty Thousand and No/100 U.S. Dollars ($150,000).

 

ARTICLE 10
Miscellaneous

 

Section 10.1   Access to Books and Records after Closing.  Following the
Closing, Purchaser shall give Seller or its authorized representatives access,
during normal business hours and upon prior notice, to such books and records
constituting or relating to the Purchased Property as shall be reasonably
requested by Seller in connection with the preparation and filing of the party’s
tax returns, to comply with regulatory requirements, to defend or

 

43

 

  

discharge the Excluded Liabilities, or for any other valid business purpose, and
to make extracts and copies of such books and records. Purchaser agrees to
retain all books and records included as part of the Purchased Property for at
the later of (a) one (1) year following the Closing Date, or (b) as required by
applicable law.

 

Section 10.2   Notices.  All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is to be given, (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission, or if sent via
electronic mail (e.g. email), (iii) on the day after delivery to FedEx or
similar overnight courier, or (iv) on the tenth (10th) day after mailing, if
mailed to the party to whom notice is to be given, by first-class mail,
registered or certified, return receipt requested, postage prepaid and properly
addressed, to the party as follows:

 

If to Purchaser:

American Realty Capital Healthcare Trust II Operating Partnership, L.P.

Attn: Edward M Weil., Jr.

405 Park Avenue, 2nd Floor

New York, New York 10022

Email: mweil@arlcap.com

 

With a copy (which will not constitute notice) to:

Jesse Galloway

American Realty Capital Healthcare Trust II Operating Partnership, L.P.

405 Park Avenue, 14th Floor

New York, New York 10022

Email: jgalloway@arlcap.com

 

With a copy (which will not constitute notice) to:

Foley & Lardner LLP

Attn: Michael A. Okaty

Taylor C. Pancake

111 North Orange Avenue

Suite 1800

Orlando, Florida 32801

Email: tpancake@foley.com

 

 

If to Seller:

c/o Platinum Health Care, LLC

Attn: Ben Klein

7444 Long Avenue  

Skokie, IL 60077

Email: bklein@plthc.com

 

 

44

 

  

With a copy (which will not constitute notice) to:

Gutnicki LLP

Attn: Abraham A. Gutnicki

Stacy J. Flanigan

4711 Golf Road, Suite 200

Skokie, IL 60076

Email: sflanigan@gutnicki.com

 

Any party may change the address to which notices are to be sent to it by giving
written notice of such change of address to the other parties in the manner
herein provided for giving notice.

 

Section 10.3   Good Faith; Cooperation.  The parties shall in good faith
undertake to perform their obligations in this Agreement, to satisfy all
conditions and to cause the transactions contemplated by this Agreement to be
carried out promptly in accordance with its terms. The parties shall cooperate
fully with each other and their respective representatives in connection with
any actions required to be taken as part of their respective obligations under
this Agreement.

 

Section 10.4   Assignment; Exchange Cooperation; Successors in Interest.
 Neither Purchaser nor Seller may assign any of their respective rights
hereunder, except with the prior written consent of the other (which shall not
be unreasonably withheld or delayed); provided, however, that prior to the
Closing Purchaser may assign its rights under this Agreement, in whole or in
part, to any affiliate or related entity of Purchaser, including without
limitation the special purpose entities identified in Schedule 10.4 attached
hereto. Any such assignee shall be deemed to have made the same representations
to Seller. This Agreement is binding upon the parties and their respective
successors or assigns and inures to the benefit of the parties and their
permitted successors and assigns.

 

Section 10.5   No Third Party Beneficiaries. The parties do not intend to confer
any benefit under this Agreement on anyone other than the parties, and nothing
contained in this Agreement shall be deemed to confer any such benefit on any
other person, including any current or former employee or agent of Seller or any
dependent or beneficiary of any of them.

 

Section 10.6   Severability. Any determination by any court of competent
jurisdiction of the invalidity of any provision of this Agreement that is not
essential to accomplishing its purposes shall not affect the validity of any
other provision of this Agreement, which shall remain in full force and effect
and which shall be construed as to be valid under applicable law.

 

Section 10.7   Purchaser Records Rights.  Upon Purchaser’s request, for a period
of one (1) year after Closing, Seller shall make the operating statements and
any and all books, records, correspondence, financial data, leases, delinquency
reports and all other documents and matters maintained by Seller or its agents
and relating to receipts and expenditures reasonably necessary to complete an
audit pertaining to the Purchased Property for

 

45

 

  

the three (3) most recent full calendar years and the interim period of the
current calendar year (collectively, the “Records”) available to Purchaser for
inspection, copying and audit by Purchaser’s designated accountants, and at
Purchaser’s expense. Seller shall provide Purchaser, but without expense to
Seller, with copies of, or access to, such factual and financial information as
may be reasonably requested by Purchaser or its designated accountants, and in
the possession or control of Seller, to enable Purchaser to file any filings
required by the Securities and Exchange Commission (the “SEC”) in connection
with the purchase of the Purchased Property. Seller understands and acknowledges
that Purchaser is required to file audited financial statements related to the
Purchased Property with the SEC within seventy-one (71) days of the Closing Date
and agrees to provide any records on a timely basis to facilitate Purchaser’s
timely submission of such audited financial statements. The provisions of this
Section 10.7 shall survive Closing.

 

Section 10.8    Controlling Law; Integration; Amendment; Waiver.

 

(a)          This Agreement shall be governed by and construed in accordance
with the laws and case decisions of the State of Missouri applicable to
contracts made and to be performed therein.

 

(b)          This Agreement and the other contracts, documents and instruments
to be delivered pursuant to this Agreement supersede all prior negotiations,
agreements, information memoranda, letters of intent and understandings between
the parties with respect to their subject matter, whether written or oral,
constitute the entire agreement of the parties with respect to their subject
matter, and may not be altered or amended except in writing signed by Purchaser
and Seller. Neither of the parties has made or relied upon any representation,
warranty or assurances in connection with the transactions contemplated
hereunder other than those expressly made herein.

 

(c)          The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect its
right to enforce the same, and no waiver by any party of any provision (or of a
breach of any provision) of this Agreement, whether by conduct or otherwise, in
any one or more instances shall be deemed or construed either as a further or
continuing waiver of any such provision or breach or as a waiver of any other
provision (or of a breach of any other provision) of this Agreement.

 

Section 10.9     Time.  Time is of the essence with respect to this Agreement.

 

Section 10.10  Survival.  For the avoidance of doubt and notwithstanding
anything contrary in this Agreement, Section 1.3, Section 4.5, Section 4.6,
Section 4.7, Section 4.9, Section 4.11, Section 5.7, ARTICLE 8, and ARTICLE 10
of this Agreement shall survive the Closing of this Agreement.

 

Section 10.11   Eminent Domain - Condemnation. If, prior to Closing, all or
portion of Real Property comprising at least five percent (5%) of the Real
Property

 

46

 

  

associated with any Facility is subject to an eminent domain or condemnation
proceeding, Seller, immediately upon learning thereof, shall give written notice
to Purchaser. Thereafter, Purchaser shall have a period of thirty (30) days
within which to elect, by written notice to Seller, to terminate this Agreement
in its entirety. Upon any such termination the Deposit shall be returned to
Purchaser, and the Agreement shall become null and void in its entirety. If no
such election is timely made, Purchaser shall be deemed to have waived its
rights under this paragraph, except that, if the transaction contemplated hereby
closes, Purchaser shall be entitled to the proceeds or the right to negotiate,
settle and collect the proceeds of such condemnation award, and Seller shall
execute and deliver all documents reasonably requested of Seller in order to
effectuate this section.

 

Section 10.12  Risk of Loss.   Seller assumes all risks and liability for loss,
damage, destruction or injury by fire, storm, accident or any other casualty to
the Real Property from all causes until the Closing has been consummated. In the
event of any damage or destruction prior to Closing with an estimated repair
cost of greater than Fifty Thousand and No/100 U.S. Dollars ($50,000) for any
Facility, Purchaser shall have the option exercisable by written notice to
Seller within thirty (30) days after Purchaser is notified of such casualty, to
terminate this Agreement in which case the parties shall have no further rights
or obligations under the Agreement and the Deposit shall be returned to
Purchaser; or Purchaser may elect to close this transaction and, in such event
Purchaser shall be entitled to receive the full amount of any proceeds of such
insurance payable on account of loss, damage or destruction after the date
hereof and Seller shall be liable for the payment to Purchaser of all
deductibles under applicable insurance policies. Seller covenants to execute
such assignments, drafts and other instruments as may be required to effectuate
this section.

 

Section 10.13  Attorneys’ Fees.  In the event either party brings an action to
enforce or interpret any of the provisions of this Agreement, the “prevailing
party” in such action shall, in addition to any other recovery, be entitled to
its reasonable attorneys’ fees and expenses arising from such action and any
appeal or any bankruptcy action related thereto, whether or not such matter
proceeds to court. For purposes of this Agreement, “prevailing party” shall
mean, in the case of a person asserting a claim, such person is successful in
obtaining substantially all of the relief sought, and in the case of a person
defending against or responding to a claim, such person is successful in denying
substantially all of the relief sought.

 

Section 10.14   Intentionally Omitted.  Waiver of Jury Trial.

 

The parties agree that no party to this Agreement shall seek a jury trial in any
lawsuit, proceeding, counterclaim or other litigation based upon, or arising out
of, this Agreement or the dealings or the relationship between them.

 

Section 10.16   Construction.

 

This Agreement shall not be construed more strictly against one party than
against the other merely by virtue of the fact that it may have been prepared by
counsel for one of the parties, it

 

47

 

  

being recognized that both Seller and Purchaser have contributed with the advice
of counsel to the preparation of this Agreement.

 

Section 10.17  Execution in Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original. This
Agreement may be executed by counterpart signatures and all counterpart
signature pages shall constitute a part of this Agreement. Delivery of a
counterpart hereof via facsimile transmission or by electronic mail
transmission, including but not limited to an Adobe file format document (also
known as a PDF file), shall be as effective as delivery of a manually executed
counterpart hereof.

 

[ Signatures contained on the following page. ]

 

48

 

  

IN WITNESS WHEREOF, each of the parties hereto has signed and sealed this Asset
Purchase Agreement as of the day and year first above written.

 

  SELLER:       PHBC REALTY, LLC,         By: /s/ Benjamin M. Klein   Title:
Manager         PHDC REALTY, LLC,       By: /s/ Benjamin M. Klein   Title:
Manager         PHMC REALTY, LLC,         By: /s/ Benjamin M. Klein   Title:
Manager         PHCA REALTY, LLC,         By: /s/ Benjamin M. Klein   Title:
Manager         PHEM REALTY, LLC,         By: /s/ Benjamin M. Klein   Title:
Manager         PHGG REALTY, LLC         By: /s/ Benjamin M. Klein   Title:
Manager         PHBS REALTY, LLC         By: /s/ Benjamin M. Klein   Title:
Manager

 

 

 

  

  PHGY REALTY, LLC,         By: /s/ Benjamin M. Klein   Title: Manager        
PHKC CLEVELAND REALTY, LLC         By: /s/ Benjamin M. Klein   Title: Manager  
      PHKC SWOPE REALTY, LLC,         By: /s/ Benjamin M. Klein   Title: Manager

 

  PURCHASER:       AMERICAN REALTY CAPITAL
HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited
partnership           By: American Realty Capital Healthcare Trust
II, Inc., a Maryland corporation,     its general partner                    
By: /s/ Edward M. Weil, Jr.     Name: Edward M. Weil, Jr.     Title:   President

 

SIGNATURE PAGE TO
ASSET PURCHASE AGREEMENT

 

2

 

 

Exhibit A

 

Escrow Agreement

 

[ See attached. ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:     [____________] ASSISTED LIVING, LLC, an Iowa limited liability
company         By:     Title:           PURCHASER:       ARHC [__________],
LLC,   a Delaware limited liability company         By:     Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company       By:     Name:     Title:           [________] ASSISTED LIVING LLC
  an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company       By:    
Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company       By:  
  Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company       By:     Name:     Title:           [________] ASSISTED
LIVING LLC   an Iowa limited liability company       By:     Name:     Title:  
        [________] ASSISTED LIVING LLC   an Iowa limited liability company      
By:     Name:     Title:  

 

2

 

  

EXHIBIT B

 

Post-Closing Escrow Agreement

 

[ See attached. ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:     [____________] ASSISTED LIVING, LLC, an Iowa limited liability
company         By:     Title:           PURCHASER:       ARHC [__________],
LLC,   a Delaware limited liability company         By:     Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company         By:     Name:     Title:           [________] ASSISTED LIVING
LLC   an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company       By:    
Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company       By:  
  Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company       By:     Name:     Title:           [________] ASSISTED
LIVING LLC   an Iowa limited liability company       By:     Name:     Title:  
        [________] ASSISTED LIVING LLC   an Iowa limited liability company      
By:     Name:     Title:  

 

2

 

  

EXHIBIT C

 

Special Warranty Deed

 

[ See attached. ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:     [____________] ASSISTED LIVING, LLC, an Iowa limited liability
company         By:     Title:           PURCHASER:       ARHC [__________],
LLC,   a Delaware limited liability company         By:     Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company         By:     Name:     Title:           [________] ASSISTED LIVING
LLC   an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company         By:  
  Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company       By:  
  Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company         By:     Name:     Title:           [________] ASSISTED
LIVING LLC   an Iowa limited liability company         By:     Name:     Title:
          [________] ASSISTED LIVING LLC   an Iowa limited liability company    
  By:     Name:     Title:  

 

2

 

  

EXHIBIT D

 

Bill of Sale and Assignment

 

[ See attached. ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:     [____________] ASSISTED LIVING, LLC, an Iowa limited liability
company         By:     Title:           PURCHASER:         ARHC [__________],
LLC,   a Delaware limited liability company         By:     Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company         By:     Name:     Title:           [________] ASSISTED LIVING
LLC   an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company       By:    
Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company         By:
    Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company       By:     Name:     Title:           [________] ASSISTED
LIVING LLC   an Iowa limited liability company         By:     Name:     Title:
          [________] ASSISTED LIVING LLC   an Iowa limited liability company    
    By:     Name:     Title:  

 

2

 

  

EXHIBIT E

 

Form of Property Leases

 

[ See attached. ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:     [____________] ASSISTED LIVING, LLC,
an Iowa limited liability company         By:     Title:           PURCHASER:  
    ARHC [__________], LLC,   a Delaware limited liability company         By:  
  Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company         By:     Name:     Title:           [________] ASSISTED LIVING
LLC   an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company       By:    
Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company       By:  
  Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company       By:     Name:     Title:           [________] ASSISTED
LIVING LLC   an Iowa limited liability company       By:     Name:     Title:  
        [________] ASSISTED LIVING LLC   an Iowa limited liability company      
By:     Name:     Title:  

 

2

 

 

EXHIBIT F

 

Assumption Agreement

 

[ See attached ]

 

3

 

  

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective
_______ __, 2014, by and between by [________] ASSISTED LIVING LLC, an Iowa
limited liability company (the “Seller”) and ARHC [________] LLC, a Delaware
limited liability company (the “Purchaser”) which is the assignee of certain
rights and obligations of AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (“ARC”), pursuant to that
certain Asset Purchase Agreement by and between Seller, ARC, and certain
affiliates of Seller, dated as of August 1, 2014 (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

RECITALS

 

A.           Seller or its predecessors-in-title have heretofore entered into
certain leases with tenants permitting occupancy or use of residential units or
other space located on that certain real property (the “Property”), being more
particularly described on Exhibit ”A” attached hereto and made a part hereof for
all purposes, which leases in effect as of the date hereof are listed on Exhibit
B attached hereto (the “Leases”);

 

C.           Seller or its predecessors-in-title have heretofore entered into
certain contracts and agreements relating to the operation and maintenance of
the Property that Purchaser has agreed to assume, which contracts and agreements
(the “Contracts”) are listed on Exhibit “C” attached hereto and made a part
hereof for all purposes; and

 

D.           Subject to the terms of this Agreement, Purchaser desires to
purchase and assume from Seller, and Seller desires to sell and assign to
Purchaser, (i) Seller’s right, title and interest as lessor under the Leases,
(ii) all right, title and interest of Seller in, to and under the Contracts and
(iii) all other Assumed Liabilities related to the Property (the “Property
Assumed Liabilities”.

 

AGREEMENT:

 

In consideration of the Seller’s consummation of the transactions described in
the Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which the Purchaser hereby acknowledges, the parties hereto
agree as follows:

 

1.          Subject to the terms of this Agreement, Seller does hereby assign,
transfer, set over, deliver and convey unto Purchaser, and the Purchaser, for
itself and for its successors and assigns, hereby accepts, assumes and agrees to
pay, perform or discharge, as the case may be, (a) all of Seller’s right, title
and interest under (i) the Leases, all guaranties of such Leases, and all rents,
revenues, income, profits, and receipts due under the Leases or otherwise
receivable by the owner of the Property for use or occupancy of any of the
Property allocable to the period from and after the date hereof and (ii) the
Contracts and (b) all other Property Assumed Liabilities.

 

4

 

  

2.          Except for the Property Assumed Liabilities, the Purchaser shall not
assume or incur, and the Seller shall remain liable to pay, perform or
discharge, all liabilities and obligations of the Seller of every kind.

 

3.          The undertakings of the Purchaser referred to in this Agreement
shall not in any way limit the Purchaser’s right of recourse as set forth in the
Purchase Agreement for any breach of the covenants, representations or
warranties of the Seller contained therein. Nothing herein shall prevent the
Purchaser from contesting with a third party in good faith any of the Property
Assumed Liabilities.

 

4.          This Agreement is subject to the terms of the Purchase Agreement,
and nothing contained herein shall be deemed to modify, alter or amend the terms
and provisions of the Purchase Agreement. In the event of any inconsistency or
conflict between the terms of the Purchase Agreement and the terms of this
Agreement, the terms of the Purchase Agreement shall prevail.

5.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT,
SELLER IS CONVEYING THE LEASES, CONTRACTS AND OTHER PROPERTY ASSUMED LIABILITIES
WITH NO ADDITIONAL REPRESENTATIONS OR WARRANTIES WHATSOEVER.

[Signature Page Follows]

 

5

 

  

IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be executed and delivered under seal as of the day and year first above written.
This Agreement may be executed in multiple counterparts, each of which, taken
together, shall constitute one original.

 

  SELLER:       [____________] ASSISTED LIVING, LLC, an Iowa limited liability
company         By:     Title:           PURCHASER:       ARHC [__________],
LLC,   a Delaware limited liability company         By:     Title:  

 

[signatures continue on next page]

 

6

 

  

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise the cumulative “Seller” under the
Purchase Agreement, acknowledges the Assumption Agreement by [________] ASSISTED
LIVING LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed
thereby.

 

  SELLER:       [________] ASSISTED LIVING LLC   an Iowa limited liability
company       By:     Name:     Title:           [________] ASSISTED LIVING LLC
  an Iowa limited liability company       By:     Name:     Title:          
[________] ASSISTED LIVING LLC   an Iowa limited liability company       By:    
Name:     Title:  

 

[signatures continue on next page]

 

 

 

  

  [________] ASSISTED LIVING LLC   an Iowa limited liability company         By:
    Name:     Title:           [________] ASSISTED LIVING LLC   an Iowa limited
liability company       By:     Name:     Title:         [________] ASSISTED
LIVING LLC   an Iowa limited liability company       By:     Name:     Title:  
        [________] ASSISTED LIVING LLC   an Iowa limited liability company      
By:     Name:     Title:  

 

 

 

  

SCHEDULE 1.1(A)

Assumed Liabilities

 

None.

 

 

 

  

SCHEDULE 1.1(C)(I)

Legal Description of Cassville Facility

 

1300 Country Farm Road
Cassville, MO

CASSVILLE HEALTHCARE AND REHAB

 

A tract of land described as follows: Beginning at a point 60 feet West of the
Northeast corner of the Northeast Quarter of the Northwest Quarter, Section 29,
Township 23. Range 27, thence West 440 feet, thence South 575 feet, thence East
440 feet, thence North 575 feet to the point of beginning all in the Northeast
Quarter of the Northwest Quarter of Section 29, Township 23, Range 27, Barry
County, Missouri, subject to that part, if any, in streets, roadways, highways
or other public right-of-ways.

 

 

 

  

SCHEDULE 1.1(C)(II)

Legal Description of Big Spring Facility

 

202 East Mill Street
Humansville, MO

BIG SPRING CARE CENTER

 

A part of the Northeast Quarter of the Southeast Quarter of Section 16 and part
of the Northwest Quarter of the Southwest Quarter of Section 15 in Township 35
Range 24 being also a part of Block 13 of Fisher and Beaty's Addition to the
Town of Humansville, Polk County Missouri being more particularly described as
follows:

 

Commencing at the Southeast corner of the Northeast Quarter of the Southeast
Quarter of said Section 16, thence North along the East line of said Section 16,
755.1 feet to the South line of Mill Street thence South 79 degrees 23 minutes
00 seconds West along the South line of Mill Street 62.8 feet to the point of
beginning of the tract herein described, thence South 79 degrees 23 minutes 00
seconds West continuing along the South line of Mill Street 420.14 feet, thence
South 12 degrees 19 minutes 00 seconds East 449.10 feet to the centerline of
Brush Creek, thence South 85 degrees 28 minutes 00 seconds East along said
centerline 194.00 feet, thence North 87 degrees 46 minutes 37 seconds East
continuing along said centerline 234.63 feet, thence North 11 degrees 57 minutes
50 seconds West 534.00 feet to the point of beginning, subject to that part, if
any, in streets, roadways, highways or other public right-of-ways.

 

 

 

  

SCHEDULE 1.1(C)(III)

Legal Description of Country Aire Facility

 

18540 State Highway 16
Lewistown, MO

COUNTRY AIRE RETIREMENT ESTATES

 

A tract of land situated in the Northeast Quarter of Section Sixteen (16),
Township Sixty-one (61) North, Range Eight (8) West, Lewis County, Missouri, and
being more particularly described as follows:

 

Commencing at a found iron pipe marking the Northwest corner of said Northeast
Quarter; thence along the West line of said Northeast Quarter, South 01 degree
03 minutes East, a distance of 1536.17 feet to a found rod, said rod being the
the true point of beginning of the description herein; to wit: thence continuing
along said West line, South 01 degree 03 minutes East, a distance of 1040.52
feet to the North line of Missouri Route 16; thence along said North line, North
87 degrees 57 minutes East, a distance of 400.00 feet thence leaving said North
line, North 01 degree 03 minutes West, a distance of 1033.52 feet thence South
88 degrees 57 minutes West, a distance of 400.0 feet to the point of beginning,
subject to that part, if any, in streets, roadways, highways or other public
right-of-ways.

 

 

 

  

SCHEDULE 1.1(C)(IV)

Legal Description of Buffalo Facility

 

631 West Main Street
Buffalo, MO

 

BUFFALO PRAIRIE CARE CENTER

 

TRACT I:

 

Commencing at the Southeast Corner of Lot 13, WILLIAMS ADDITION TO THE CITY OF
BUFFALO, Missouri; thence along the South line of said Lot 13, North 88 degrees
13 minutes 40 seconds West 175.00 feet to the point of beginning; thence
continuing along the said South line North 88 degrees 13 minutes 40 seconds West
219.00 feet; thence North 4 degrees 05 minutes 00 seconds West 456.41 feet to
the North line of Lot 14 of Williams Addition; thence along said North line
South 88 degrees 13 minutes 40 second East 335.73 feet; thence parallel with the
East line of said Lot 13, South 1 degree 09 minutes 40 seconds West 304.05 feet
to the Northeast Corner of a tract described in Book 221, Page 1381, Dallas
County Recorder's office; thence along the North line of said tract North 88
degrees 13 minutes 40 seconds West 75.00 feet; thence along the West line of
said tract South 1 degree 09 minutes 40 seconds West 150.00 feet to the point of
beginning, except any part thereof deeded, taken or used for road or highway
purposes. All in Dallas County, Missouri.

 

TRACT II:

 

All of Lot 12 of MADDUX RE-SURVEY OF WILLIAMS ADDITION TO THE CITY OF BUFFALO,
Dallas County, Missouri, except any part thereof deeded, taken, or used for road
or street purposes.

 

TRACT III:

 

The East 335.73 feet of the following described tract, being that part of the
South Half of Benton Street as shown on the plat of WILLIAMS ADDITION, lying
East of a line drawn from the Southwest Corner of Lot 12 MADDUX RESURVEY to the
Northwest Corner of that certain tract of land described in Book 247, at Page
1560:Commencing at the Southeast Corner of Lot 13 WILLIAMS ADDITION to Buffalo,
Missouri, thence along the South Line of said Lot 13 North 88 degrees 13 minutes
40 seconds West 394.00 feet; thence North 4 degrees 05 minutes West 456.41 feet
to the North Line of Lot 14 Williams Addition; thence along said North Line
South 88 degrees 13 minutes 40 seconds East 335.73 feet, for a true point of
beginning, thence North 1 degree 09 minutes 40 seconds East 20.00 feet to the
South Line of MADDUX RESURVEY; thence North 88 degrees 13 minutes 40 seconds
West, along the South Line of MADDUX RESURVEY, 607.32 feet to the East
Right-of-Way of Hickory Street, thence along said Right-of-Way South 1 degree 09
minutes 40 seconds West 20.00 feet to the Northwest Corner of said Lot 14
Williams Addition; thence South 88 degrees 13 minutes 40 seconds East along said
North Line 607.32 feet to the point of beginning.

 

 

 

  

SCHEDULE 1.1(C)(V)

Legal Description of Edgewood Manor Facility

11900 Jessica Lane
Raytown, MO

 

EDGEWOOD MANOR NURSING HOME

 

All that part of the Northwest Quarter of the Southwest Quarter of Section 15,
Township 48, Range 32, in Raytown, Jackson County, Missouri, described as
follows: Commencing at the Northeast corner of said Quarter Quarter Section;
thence South 2 degrees 05 minutes 05 seconds East along the East line of said
Quarter Quarter Section, a distance of 344.10 feet; thence North 90 degrees 00
minutes 00 seconds West, parallel to the North line of said Quarter Quarter
Section, a distance of 33.02 feet to a point on the West line of Westridge Road,
as now established, and the true point of beginning of the tract of land to be
herein described; thence continuing South 90 degrees 00 minutes 00 seconds West
parallel to said North line, a distance of 428.00 feet; thence South 0 degrees
00 minutes 00 seconds West, a distance of 295.79 feet, to a point on the North
line of Jessica Lane, as now established; thence Southeasterly along the North
line of said Jessica Lane, along a curve to the right having an initial tangent
bearing of South 73 degrees 05 minutes 11 seconds East and a radius of 950.00
feet, an arc distance of 43.58 feet; thence South 70 degrees 27 minutes 28
seconds East continuing along the North line of said Jessica Lane a distance of
98.49 feet; thence Southeasterly continuing along the North line of said Jessica
Lane, along a curve to the right, tangent to the last described course, having a
radius of 525.00 feet, an arc distance of 251.61 feet; thence South 42 degrees
59 minutes 54 seconds East, continuing along the North line of said Jessica
Lane, a distance of 37.12 feet; thence Southeasterly continuing along the North
line of said Jessica Lane, along a curve to the left, tangent to the last
described course, having a radius of 100.00 feet, an arc distance of 85.67 feet;
thence North 87 degrees 54 minutes 55 seconds East, continuing along the North
line of said Jessica Lane, a distance of 2.92 feet to a point on the West line
of said Westridge Road; thence North 2 degrees 05 minutes 05 seconds West along
the West line of said Westridge Road, a distance of 538.22 feet, to the point of
beginning, subject to that part, if any, in streets, roadways, highways or other
public right-of-ways.

 

Also described as:

 

All that part of the Northwest Quarter of the Southwest Quarter of Section 15,
Township 48, Range 32, in Raytown, Jackson County, Missouri, described as
follows: Commencing at the Northeast corner of said Quarter Quarter Section;
thence South 2 degrees 05 minutes 05 seconds East along the East line of said
Quarter Quarter Section, a distance of 344.10 feet; thence South 90 degrees 00
minutes 00 seconds West, parallel to the North line of said Quarter Quarter
Section, a distance of 33.02 feet, to a point on the West right-of-way line of
Westridge Road, as now established, and the true point of beginning of the tract
of land to be herein described; thence continuing South 90 degrees 00 minutes 00
seconds West parallel to said North line, a distance of 428.00 feet; thence
South 0 degrees 00 minutes 00 seconds West, a distance of 295.79 feet, to a
point on the North right-of-way line of Jessica Lane, as now established; thence
Southeasterly along the North right-of-way line of said Jessica Lane, along a
curve to the right having an initial tangent bearing of South 73 degrees 05
minutes 11 seconds East and a radius of 950.00 feet, a central angle of 2
degrees 37 minutes 41 seconds, an arc distance of 43.58 feet; thence South 70
degrees 27 minutes 28 seconds East, continuing along the North right-of-way line
of said Jessica Lane, a distance of 98.49 feet; thence

 

 

 

  

Southeasterly continuing along the North right-of-way line of said Jessica Lane,
along a curve to the right, tangent to the last described course, having a
radius of 525.00 feet, a central angle of 27 degrees 27 minutes and 34 seconds,
an arc distance of 251.61 feet; thence South 42 degrees 59 minutes 54 seconds
East, continuing along the North right-of-way line of said Jessica Lane, a
distance of 37.12 feet; thence Southeasterly continuing along the North
right-of-way line of said Jessica Lane, along a curve to the left, tangent to
the last described course, having a radius of 100.00 feet, a central angle of 49
degrees 05 minutes and 11 seconds, an arc distance of 85.67 feet; thence North
87 degrees 54 minutes 55 seconds East, continuing along the North right-of-way
line of said Jessica Lane, a distance of 2.92 feet to a point on the West
right-of-way line of said Westridge Road; thence North 2 degrees 05 minutes 05
seconds West along the West right-of-way line of said Westridge Road, a distance
of 538.22 feet, to the point of beginning, subject to that part, if any, in
streets, roadways, highways or other public right-of-ways.

 

 

 

  

SCHEDULE 1.1(C)(VI)

Legal Description of Georgian Gardens Facility

 

1 Georgian Gardens
Potosi, MO

 

GEORGIAN GARDENS

 

TRACT I:

 

All that part of U.S. Survey No. 3311, described as follows: Commencing at the
Northeast corner of U.S. Survey 3311, Township 37 North, Range 2 East, said
corner presently marked by a M.S.L.S. Aluminum Monument and more particularly
located by Missouri State Coordinates 763,522.489 N and 422,296.400 E; thence
West 285.47 feet; thence South 1023.13 feet to an iron rod set on the South
right-of-way line of Missouri Route A "8", being the true point of beginning;
thence along said right-of-way line, North 83 degrees 06 minutes 54 seconds West
200.00 feet to a point from which an old iron rod within the right-of-way of
Missouri Route A "8" bears North 12 degrees 31 minutes 06 seconds East 3.90
feet; thence leaving said right-of-way line South 12 degrees 31 minutes 06
seconds West 665.58 feet to an iron rod with cap set in concrete; thence South
77 degrees 39 minutes 37 seconds East 500.00 feet to a point from which as iron
rod with cap set in concrete bears South 77 degrees 39 minutes 37 seconds East
180.00 feet; thence North 12 degrees 20 minutes 23 seconds East 200.00 feet to a
point; thence North 19 degrees 19 minutes 24 seconds West 569.30 feet to the
true point of beginning, being and situated in Washington County, Missouri,
subject to that part, if any, in streets, roadways, highways or other public
right-of-ways.

 

TRACT II:

 

A portion of USS 3311, Township 37 North, Range 2 East, 5th PM, lying and
situated in Washington County, Missouri and more particularly described as
follows, to-wit: Commencing at the Northeast corner of USS #3311, Township 37
North, Range 2 East, said corner presently marked by a stone pile and more
particularly located by Missouri State Coordinates 763522.489 and 422296.400
East; thence East 189.15 feet to a point thence South 1098.44 feet to the point
of beginning the land hereby surveyed, being also the Northeast corner of said
land and marked by an iron pin with cap which was set on the South Right of Way
Line of Missouri Rt. "A" (8) and more particularly located by Missouri State
Coordinates 76242,050 North and 422485.548 East; thence along said Right of Way
Line North 80 degrees 20 minutes 07 seconds West, 382.53 feet to a point; thence
North 82 degrees 20 minutes 20 seconds West, 298.88 feet to an iron pin; thence
leaving said South Right of Way Line, South 12 degrees 20 minutes 23 seconds
West, 669.46 feet to an iron pin with cap; thence South 77 degrees 39 minutes 37
seconds East, 680.00 feet to an iron pin with cap; thence North 12 degrees 20
minutes 23 seconds East, 711.69 feet to the True Point of Beginning, subject to
that part, if any, in streets, roadways, highways or other public right-of-ways.

EXCEPTING all that part conveyed to Mid-America Georgian Nursing L.P. by a
Special Warranty Deed recorded in Book 235 Page 235.

 

 

 

  

TRACT II BEING ALSO DESCRIBED AS:

 

Commencing at the Northeast corner of USS #3311, Township 37 North, Range 2
East, said corner presently marked by a stone pile and more particularly located
by Missouri State Coordinates 763,522.489 N and 422,296.400 E; thence East
189.15 feet and South 1098.44 feet to the point of beginning, being presently
marked by an iron rod on the South Right of Way line of Missouri Route (A) 8 and
more particularly located by Missouri State Coordinates 762,424.050 N and
422,485.548 E; thence along said Right of Way Line North 80 degrees 20 minutes
07 seconds West 382.53 feet to a point; thence North 82 degrees 20 minutes 20
seconds West 98.88 feet to a point; thence leaving said South Right of Way,
South 19 degrees 19 minutes 24 seconds East, 569.30 feet to a point; thence
South 12 degrees 20 minutes 23 seconds West, 200.00 feet to a point; thence
South 77 degrees 39 minutes 37 seconds East, 180.00 feet to an iron rod with
cap, set in concrete; thence North 12 degrees 20 minutes 23 seconds East, 711.69
feet to the true point of beginning, being situated in Washington County,
Missouri, subject to that part, if any, in streets, roadways, highways or other
public right-of-ways.

 

SURVEYOR'S DESCRIPTION OF TRACTS I & II, MORE PARTICULARLY DESCRIBED AS:

 

A portion of USS 3311, Township 37 North, Range 2 East, 5th PM, lying and
situated in Washington County, Missouri and more particularly described as
follows, to-wit; Commencing at the Northeast Corner of USS #3311, Township 37
North, Range 2 East, said corner presently marked by a stone pile and more
particularly located by Missouri State Coordinates 763522.489 and 422296.400
East: thence East 189.15 feet to a point thence South 1098.44 feet to the point
of beginning the land hereby surveyed. Being also the Northeast Corner of said
land and marked by an iron pin with cap which was set on the South Right of Way
line of Missouri Route "A" (8) and more particularly located by Missouri State
Coordinates 76242.050 North and 422485.548 East; thence along said Right of Way
line North 80 degrees 20 minutes 07 seconds West, 382.53 feet to a point; thence
North 82 degrees 20 minutes 20 seconds West 299.37 feet to an iron pin; thence
leaving said South Right of Way line, South 12 degrees 31 minutes 06 seconds
West, 665.58 feet to an iron pin with cap; thence South 77 degrees 39 minutes 37
seconds East, 680.00 feet to an iron pin with cap; thence North 12 degrees 20
minutes 23 seconds East, 711.69 feet to the true point of beginning, subject to
that part, if any, in streets, roadways, highways or other public right-of-ways.

 

The above description described the same property in Warranty Deed recorded in
Book 256, Page 935, Book 256, Page 937, and Book 235, Page 235 of the Washington
County, Missouri Records.

 

 

 

  

SCHEDULE 1.1(C)(VII)

Legal Description of Golden Years Facility

 

2001 Jefferson Parkway
Harrisonville, MO

 

GOLDEN YEARS

 

TRACT I:

 

Part of the West half of the Southwest Quarter of Section 34, Township 45, Range
31, in the City of Harrisonville, Cass County, Missouri, described as follows:
From the Southwest corner of the Southwest Quarter of Section 34, aforesaid, run
thence North along the West line of Section 34, 1795.65 feet; thence South 89
degrees 33 minutes 13 seconds East, along the South line of the Cass County Rest
Home 40 acre tract, 591.27 feet to the true point of beginning of the tract to
be described; continuing thence South 89 degrees 33 minutes 13 seconds East,
413.26 feet to the Southeast corner of said Cass County 40 acre tract; thence
North 0 degrees 21 minutes 00 seconds West along the East line thereof, 531.23
feet; thence West 410 feet; thence South 528 feet to the point of beginning,
subject to that part, if any, in streets, roadways, highways or other public
right-of-ways.

 

Also an easement for access over a strip of land 50 feet in width and 25 feet
either side of the following described centerline:From the Southwest corner of
the Southwest Quarter of Section 34, Township 45, Range 31, in Cass County,
Missouri, run thence North along the West line of Section 34, 2179.77 feet to
the true point of beginning of the centerline to be described; thence South 87
degrees 22 minutes 00 seconds East, 591.88 feet to a point on the West line of
the above described tract, said centerline following the approximate location of
the existing driveway centerline.

 

TRACT II:

 

Part of the West half of the Southwest Quarter of Section 34, Township 45, Range
31, in the City of Harrisonville, Cass County, Missouri, described as follows:
From the Southwest corner of the Southwest Quarter of Section 34, aforesaid run
thence North, along the West line of Section 34, 1795.65 feet; thence South 89
degrees 33 minutes 13 seconds East, 1004.53 feet to the Southeast corner of that
tract conveyed to the County of Cass in Deed Book 187, Page 216, of the County
Records; thence North 0 degrees 21 minutes 00 seconds West, along the East line
of said tract, 531.23 feet to the true point of beginning of the tract to be
described; continuing thence North 0 degrees 21 minutes 00 seconds West, 200
feet; thence West 408.78 feet; thence South 200 feet; thence East 410 feet to
the point of beginning, subject to that part, if any, in streets, roadways,
highways or other public right-of-ways.

 

 

 

 

SCHEDULE 1.1(C)(VIII)

Legal Description of Gregory Ridge Facility

7001 Cleveland Avenue
Kansas City, MO

GREGORY RIDGE LIVING CENTER

TRACT I:

Part of the Southeast Quarter of the Northeast Quarter of Section 10, Township
48, Range 33, in Kansas City, Jackson County, Missouri, described as follows:
Commencing at a point 792 feet North and 30 feet East of the Southwest corner of
the Southeast Quarter of the Northeasterly Quarter of Section 10, Township 48,
Range 33, said point being the intersection of the East line of Cleveland Avenue
and the South line of vacated 70th Street, run South along said East line of
Cleveland Avenue 284 feet to a point that is 120 feet North of the North line of
Gregory Boulevard, thence East parallel with the South line of said Quarter
Quarter Section 100 feet to the point of beginning; thence South 120 feet to the
North line of Gregory Boulevard; thence East along said North Boulevard line
84.50 feet to the point of its intersection with the West line of vacated
Mersington Avenue; thence North along said vacated street line 120 feet; and
thence West 84.50 feet to the point of beginning, subject to that part, if any,
in streets, roadways, highways or other public right-of-ways.

TRACT II:

Part of the Southeast Quarter of the Northeast Quarter of Section 10, Township
48, Range 33, in Kansas City, Jackson County, Missouri, described as follows:
Beginning at a point 792 feet North and 30 feet East of the Southwest corner of
the Southeast Quarter of the Northeast Quarter of Section 10, Township 48, Range
33, said point being the intersection of the East line of Cleveland Avenue and
the South line of vacated 70th Street, run South along said East line of
Cleveland Avenue 284 feet to a point that is 120 feet North of the North line of
Gregory Boulevard; thence East parallel with the South line of said Quarter
Quarter Section 184.50 feet to the West line of vacated Mersington Avenue;
thence North along said vacated street 284 feet to the point of its intersection
with the South line of vacated 70th Street; and thence West along said vacated
street line 184.50 feet to the point of beginning, subject to that part, if any,
in streets, roadways, highways or other public right-of-ways.

TRACT III:

Lots 118, 119, 120, 121, 122, 123, 124, 125 and 126, SWOPELAND, a subdivision of
land in Kansas City, Jackson County, Missouri, together with all of vacated 70th
Street, to the full width thereof, lying South of Lot 118, Swopeland, and East
of the Southward prolonged West line of Lot 118, Swopeland, and all of vacated
Mersington Avenue to the full width thereof, lying West of Lots 119 to 126
inclusive, Swopeland, and North of the North line of Gregory Boulevard, said
streets were vacated by Ordinance No. 32471 passed April 7, 1966 and recorded as
Document No. 1966B0548942 in Book B5889 at Page 94.

TRACT IV:

Lot 116, SWOPELAND, a subdivision in Kansas City, Jackson County, Missouri.

TRACT V:

Lot 117, SWOPELAND, a subdivision in Kansas City, Jackson County, Missouri.

TRACT VI:

Lot 115, SWOPELAND, a subdivision in Kansas City, Jackson County, Missouri.

TRACT VII:

 

 

 

  

All of vacated 70th Street to the full width thereof lying South of Lot 117,
SWOPELAND, from the Southward prolongation of the East line of Lot 117, to the
East line of Cleveland Avenue, said vacated 70th Street located in Kansas City,
Jackson County, Missouri and vacated by Ordinance 32471 passed 04/07/1966, as
Document No. 1966B0548942 in Book B5889 at Page 94.

 

 

 

  

SCHEDULE 1.1(C)(IX)

Legal Description of Parkway Facility

2323 Swope Parkway
Kansas City, MO

PARKWAY HEALTH AND REHAB.

Part of Lots 11 through 19, both inclusive; part of Lots 96 through 99, both
inclusive, and Lots 113 and 114, PROSPECT HILL, a subdivision in Kansas City,
Jackson County, Missouri, together with part of vacated 48th Street adjacent to
said Lots, all being more particularly described as follows: Beginning at the
Northeast corner of said Lot 11; thence North 59 degrees 48 minutes 34 seconds
West along the Northeasterly line of said Lots 11 through 18, a distance of
420.00 feet to the Northwesterly corner of said Lot 18, said point also being on
the Easterly right-of-way line of the Bruce R. Watkins Drive (U.S. Highway No.
71) as established; thence North 88 degrees 25 minutes 11 seconds West along
said Easterly right-of-way line, a distance of 62.65 feet to a point on the
Westerly line of said Lot 19 that is 30.00 feet South of the Northwest corner
thereof, as measured along said Westerly line; thence South 30 degrees 11
minutes 26 seconds West, continuing along said Easterly right-of-way line and
along the Northwesterly line of said Lot 19, a distance of 54.75 feet; thence
South 22 degrees 06 minutes 51 seconds East, continuing along said Easterly
right-of-way line, a distance of 40.90 feet; thence Southeasterly continuing
along said Easterly right-of-way line; along a curve to the left having a
initial tangent bearing of South 31 degrees 29 minutes 31 seconds East, a radius
of 944.93 feet, and a central angle of 7 degrees 59 minutes 49 seconds, an arc
distance of 131.89 feet; thence South 86 degrees 47 minutes 43 seconds East,
continuing along said Easterly right-of-way line, a distance of 52.12 feet;
thence South 48 degrees 36 minutes 47 seconds East continuing along said
Easterly right-of-way line, a distance of 193.76 feet, thence South 43 degrees
22 minutes 23 seconds East, continuing along said Easterly right-of-way line, a
distance of 73.11 feet, thence South 46 degrees 25 minutes 38 seconds East,
continuing along said Easterly right-of-way line, a distance of 173.66 feet, to
its intersection with the Westerly right-of-way line of Wabash Avenue, as now
established; thence Northeasterly along said Westerly right-of-way line, along a
curve to the right, having an initial tangent bearing of North 21 degrees 26
minutes 11 seconds East, a radius of 250.00 feet and a central angle of 8
degrees 45 minutes 15 seconds, an arc distance of 38.20 feet; thence North 30
degrees 11 minutes 26 seconds East, continuing along said Westerly right-of-way
line, a distance of 35.83 feet, to a point on the centerline of vacated 48th
Street; thence North 59 degrees 48 minutes 34 seconds West, along said
centerline, a distance of 127.37 feet; thence Northwesterly, continuing along
said centerline along a curve to the left, tangent to the last described course,
having a radius of 125.00 feet and a central angle of 8 degrees 43 minutes 26
seconds, an arc distance of 19.03 feet, to a point that is 25.00 feet
Southwesterly of the Southeast corner of said Lot 11, as measured radially to
said centerline; thence North 21 degrees 28 minutes 00 seconds East, along said
radial line a distance of 25.00 feet to the Southeast corner of said Lot 11;
thence North 30 degrees 11 minutes 26 seconds East, along the Southeasterly line
of said Lot 11, a distance of 141.74 feet (Plat 141.68 feet) to the point of
beginning, subject to that part, if any, in streets, roadways, highways or other
public right-of-ways.

 

 

 

 

SCHEDULE 1.1(C)(X)

Legal Description of Marshfield Facility

800 South White Oak Road
Marshfield, MO

MARSHFIELD CARE CENTER

All of the South-half of the following described property: A part of the
Northwest Quarter of the Southwest Quarter of Section 10, Township 30 North,
Range 18 West described as beginning at a point 20 rods South of the Northwest
corner of the Northwest Quarter of the Southwest Quart, running thence East 40
rods; thence South 40 rods; thence West 40 rods; thence North 40 rods to the
place of beginning all being in Webster County, Missouri, subject to that part,
if any, in streets, roadways, highways or other public right-of-ways.

Being also:

A part of the Northwest Quarter of the Southwest Quarter of Section 10, Township
30 North, Range 18 West, City of Marshfield, Webster County, Missouri, being
more particularly described as follows: Commencing at the Northwest corner of
the Northwest Quarter of the Southwest Quarter of said Section 10; thence along
the West line of said Southwest Quarter, South 00 degrees 00 minutes 00 seconds
West, a distance of 660.00 feet to the point of beginning; thence South 89
degrees 25 minutes 54 seconds East, a distance of 659.61 feet; thence South 00
degrees 00 minutes 00 seconds West, a distance of 330.03 feet; thence North 89
degrees 25 minutes 54 seconds West, a distance of 659.61 feet to a point on the
West line of the Southwest Quarter of said Section 10; thence along said West
line, North 00 degrees 00 minutes 00 seconds East, a distance of 330.03 feet to
the point of beginning, subject to that part, if any, in streets, roadways,
highways or other public right-of-ways.

 

 

 

 

SCHEDULE 2.4(A)

Permitted Title Exceptions

Permitted Encumbrances for Cassville Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Deed in favor of Barry Electric Cooperative, as more fully set forth
in the instrument recorded in Book 196 at Page 111.

3.          Right of Way Easement granted to The Gas Service Company as more
fully set forth in the instrument recorded in Book 232, Page 178.

4.          Right of Way Agreement granted to The Gas Service Company as more
fully set forth in the instrument recorded in Book 232 at Page 179.

5.          Right of Way granted to Southwestern Bell Telephone as more fully
set forth in the instrument recorded in Book 251 at Page 29E.

6.          Easement granted to Southwestern Bell Telephone Company as more
fully set forth in the instrument recorded in Book 251 at Page 33.

7.          Commissioner’s Deed, as more fully set forth in the instrument
recorded in Book 273 at Page 203.

8.          Easement granted to Southwestern Bell Telephone as more fully set
forth in the instrument recorded in Book 279 at Page 320.

9.          Sewer Agreement, as more fully set forth in the instrument recorded
in Book 296 at Page 193.

10.        Easement granted to J.L. Jackson and Elma Jackson, his wife as more
fully set forth in the instrument recorded in Book 334 at Page 71.

11.         Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

Permitted Encumbrances for Big Spring Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Building lines, easements and restrictions shown on the plat of
Fisher and Beaty’s Addition to the Town of Humansville.

3.          Easement granted to The Empire District Electric Company as more
fully set forth in the instrument recorded in Book 565 at Page 1019.

4.          The following matters regarding the watercourse known as Brush
Creek:

a.           Any past or future change in the bed or banks of said watercourse
which forms a boundary of the land.

b.           Any dispute arising over the location of the old bed or banks of
said watercourse.

c.           Any variance between the boundary line of said watercourse as
originally conveyed and the current boundary thereof as now located, used or
occupied.

d.           Rights of upper and/or lower riparian owners in and to the free and
unobstructed flow of water of said watercourse and other riparian rights,
whether or not shown by the public records, such as fishing, boating, swimming
or other similar activity.

e.           Riparian water rights.

5.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may

 

 

 

  

be produced from the Land, together with all rights, privileges, and immunities
relating thereto, whether or not appearing in the Public Records.

Permitted Encumbrances for Country Aire Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Right of Way granted to State of Missouri as more fully set forth in
the instrument recorded in Book 177 at Page 146.

3.          Easement granted to Northeast Missouri Electric Power Cooperative as
more fully set forth in the instrument recorded in Book 194 at Page 314.

4.          Easement granted to Southwestern Bell Telephone Company as more
fully set forth in the instrument recorded in Book 217, at Page 47.

5.          Easement granted to Great River Gas Company as more fully set forth
in the instrument recorded in Book 253 at Page 617.

6.          Right of Way Easement granted to Northeast Missouri Electric Power
Cooperative as more fully set forth in the instrument recorded in Book 273 at
Page 3264.

7.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

8.          Those matters found on plan of land prepared by American Surveying &
Mapping, Inc. dated July 9, 2014, last revised July 24, 2014, identified as
Drawing Name: 18450 State Route 16, Lewistown, MO.dwg as follows:

a.           Subject’s wood fence crosses northerly property line by a width of
31.19’ for a length of 311.73’ as shown.

Permitted Encumbrances for Buffalo Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Building lines, easements and restrictions shown on the plat of
WILLIAMS ADDITION.

3.          Building lines, easements and restrictions shown on the plat of
MADDRUX RE-SURVEY OF WILLIAMS ADDITION.

4.          Easement granted to City of Buffalo, Missouri as more fully set
forth in the instrument recorded in Book 266 at Page 88.

5.          Easement reservation granted to the City of Buffalo, Missouri as
more fully set forth in the instrument recorded in Book 268 at Page 1797.

6.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

7.          Those matters found on plan of land prepared by American Surveying &
Mapping Inc. dated July 9, 2014, last revised July 25, 2014 and identified as
Drawing Name: 631 W. Main St., Buffalo, MO, as follows:

a.           Neighbor’s building crosses the easterly line of tract II of
subject property by a width of 3.91’ for a length of 12.24’ as shown.

b.           Subject’s asphalt drive crosses the northerly line of tract III by
a width of 7.46’ for a length of 53.73’ as shown.

c.           Public sidewalk crosses the southerly line of Tract I by a width of
1.46’ for a length of 219.00’ as shown.

 

 

 

  

Permitted Encumbrances for Edgewood Manor Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Easement granted to Missouri Public Service, a division of Utilicorp
United, Inc., a Delaware corporation as more fully set forth in the instrument
recorded as Document No. 199810007389 in Book 13136 at Page 2185.

3.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

Permitted Encumbrances for Georgian Gardens Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Abutter’s rights of direct to Highway relinquished by instrument
recorded in Book 116 at Page 16.

3.          Ordinance/Resolution by the City of Potosi establishing a benefit
district for Ordinance No. 667.

4.          Right of way Agreement to Arkansas-Missouri Power Company, as more
fully set forth in the instrument recorded in Book 161, Page 203.

5.          Private Survey Record Page 415 and recorded on 9/5/1980.

6.          Roadway Easement granted to Mid-America Georgian Nursing LP as more
fully set forth in the instrument recorded in Book 174 at Page 747 and Book 235
at Page 235 and in Book 256 at Page 937.

7.          Easement for a gas line granted to the City of Potosi, Mo. as more
fully set forth in the instrument recorded in Book 178, Page 71.

8.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

Permitted Encumbrances for Golden Years Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Electrical line Easement granted to the City of Harrisonville,
Missouri as more fully set forth in the instrument recorded in Book 870 at Page
187.

3.          Easement for ingress and egress, as more fully set forth in the
instrument recorded as Document No. 09654 in Book 958 at Page 44.

4.          Utility Easement granted to City of Harrisonville, Missouri as more
fully set forth in the instrument recorded as Document No. 03475 in Book 1032 at
Page 263.

5.          Utility Easement granted to City of Harrisonville, Missouri as more
fully set forth in the instrument recorded as Document No. 007065 in Book 1088
at Page 251.

6.          Any inaccuracy in the area, square footage, or acreage of land
described in Schedule A or attached plat, if any.

7.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

 

 

 

  

8.          Those matters found on plan of land prepared by American Surveying &
Mapping Inc. dated July 9, 2014, last revised July 28, 2014 and identified as
Drawing Name: 2001 Jefferson Parkway Harrisonville, MO.dwg, as follows:

a.           Building resides on a portion of an electrical easement for a
length of 133.69 feet as shown.

Permitted Encumbrances for Gregory Ridge Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Building lines, easements and restrictions shown on the plat
SWOPELAND recorded 08/12/1924 in Plat Book K22 and Page 4.

3.          Sewer Easement granted to Kansas City as more fully set forth in the
instrument recorded as Document No. 1923A0103071 in Book B-2379 at Page 127.

4.          Restrictions as set forth in Warranty Deed, as more fully set forth
in the instrument recorded as Document No. 1924A0196716 in Book B-2471 at Page
507.

5.          Restrictions as set forth in Warranty Deed, as more fully set forth
in the instrument recorded as Document No. 1925A0236178 in Book B-2557 at Page
354 and recorded as Document No. 1925A0250927 in Book B-2642 at Page 18 and
recorded as Document No. 1925A0251923 in Book B-2643 at Page 17.

6.          Easement granted to Kansas City Power and Light Company as more
fully set forth in the instrument recorded as Document No. 1964B0478743 in Book
B5689 at Page 90.

7.          Easements, if any, for public utilities, pipelines or facilities
installed in any portion of the vacated street or alley, lying within the land,
together with the right of ingress and egress to repair, maintain, replace and
remove the same, as reserved in ordinance no. 32471 recorded 04/07/1966, as
Document No. 1966B0548942 in Book B5889 at Page 94.

8.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

Permitted Encumbrances for Parkway Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Building lines, easements and restrictions shown on the plat of
PROSPECT HILL recorded 05/08/1906 in Plat Book K13 and Page 89.

3.          Abutters’ Rights and easements as conveyed to the State of Missouri,
acting by and through the Missouri Highway and Transportation Commission, as
more fully set forth in the instrument designated “General Warranty Deed”
recorded as Document No. 1992K1006560 in Book K2202 at Page 24 and in instrument
recorded as Document No. 1992K1006561 in Book K2202 at Page 27.

4.          Easements, if any, for public utilities, pipelines or facilities
installed in any portion of the vacated street or alley, lying within the land,
together with the right of ingress and egress to repair, maintain, replace and
remove the same, as reserved in ordinance number 920842 recorded 08/10/1992, as
Document No. 1992K1037054 in Book K2276 at Page 2079.

5.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

 

 

 

  

6.          Those matters on a plan of land prepared by American Surveying &
Mapping Inc. dated July 16, 2014, last revised July 24, 2014 and identified as
Project No. 1400826 as follows:

a.           Chain link fencing crosses boundary by at most 2.7’.

b.           Building encroaches over rear building set back by at most 9.1’.

c.           Building encroaches over front building setback at most 2.4’.

Permitted Encumbrances for Marshfield Facility

1.          Taxes 2014 and subsequent years, which are not yet due and payable.

2.          Minerals of whatsoever kind, subsurface and surface substances,
including but not limited to coal, lignite, oil, gas, uranium, clay, rock, sand
and gravel in, on, under and that may be produced from the Land, together with
all rights, privileges, and immunities relating thereto, whether or not
appearing in the Public Records.

 

 

 

  

SCHEDULE 2.4(G)

Licenses, Leases Easements and Other Rights Related to Real Property

None.

 

 

 

 

SCHEDULE 4.1(A)

Due Diligence Information

Provided directly to Seller.

 

 

 

  

SCHEDULE 5.4(M)

Third Party Consents

None.

 

 

 

  

SCHEDULE 6.5

Execution and Delivery – No Contravention

None.

 

 

 

  

SCHEDULE 6.6

Contracts and Leases

None.

 

 

 

  

SCHEDULE 6.7

Residency Agreements and Related Matters

None.

 

 

 

 

 

SCHEDULE 6.8

Permits and Licenses

A.           Medicare enrollment confirmation;

B.           Medicaid enrollment confirmation; and

C.           Licenses from the State of Missouri to operate each of the
following facilities:

(i)          facility with sixty (60) skilled nursing beds commonly known as
Cassville Health Care and Rehab, located in Cassville, Missouri;

(ii)         facility with sixty (60) skilled nursing beds commonly known as Big
Spring Care Center, located in Humansville, Missouri;

(iii)        facility with sixty (60) skilled nursing beds and sixteen (16)
licensed residential care beds commonly known as Country Aire Retirement
Estates, located in Lewistown, Missouri;

(iv)        facility with sixty (60) skilled nursing beds commonly known as
Buffalo Prairie Care Center, located in Buffalo, Missouri;

(v)         facility with sixty-six (66) skilled nursing beds commonly known as
Edgewood Manor Nursing Home, located in Raytown, Missouri;

(vi)        facility with one-hundred twenty (120) skilled nursing beds commonly
known as Georgian Gardens, located in Potosi, Missouri;

(vii)       facility with one-hundred thirty-two (132) skilled nursing beds
commonly known as Golden Years, located in Harrisonville, Missouri;

(viii)      facility with one-hundred sixteen (116) skilled nursing beds
commonly known as Gregory Ridge Living Center, located in Kansas City, Missouri;

(ix)         facility with ninety-seven (97) skilled nursing units commonly
known as Parkway Health and Rehab, located in Kansas City, Missouri; and

(x)          facility with seventy-seven (77) skilled nursing beds commonly
known as Marshfield Care Center, located in Marshfield, Missouri.

 

 

 

  

SCHEDULE 6.9

Insurance; Three Year Claim History

 

See attached.

 

 

 

 

Schedule 6.10

Employee Claims

 

(i)Edgewood Manor Facility:

a.Debra Hawthorne, June 2013, filed with Missouri Commission on Human Rights:
Alleged termination based on age, race and retaliation

 

 

(ii)Gregory Ridge Facility:

a.Tammy Thomas, January 2013, filed with Missouri Commission on Human Rights:
Alleged termination based on sex/pregnancy and retaliation

b.Ebele Egbuniwe, November 2011, filed with EEOC: Alleged termination based on
pregnancy/sex

 

 

(iii)Parkway Facility:

a.Robbe Turner, May 2013, filed with Missouri Commission on Human Rights:
Alleged termination based on sex and sexual orientation.

b.Shamone Hill, May 2013, filed with EEOC: Alleged termination based on
disability and religion

 

 

(iv)Cassville Facility:

a.Maria Benetiz, February 2012, filed with EEOC: Alleged failure to accommodate
disability and discrimination based on national origin

 

 

 

 

SCHEDULE 6.11

Litigation, etc.

 

(i)Pending law suit against PHCA, LLC – Lewis County Circuit Court, filed on
10/20/2011 (CC Wrongful Death)

 

 

(ii)Pending law suit against PHKC Cleveland, LLC – Jackson County Circuit Court,
filed on 11/19/2013 (CC Employment Discrimination 213.111)

 

 

(iii)Pending law suit against PHKC Swope, LLC – Jackson County Circuit Court,
filed on 08/13/2013 (CC Wrongful Death)

 

 

(iv)Pending law suit against PHGG, LLC and PHGG Realty, LLC – Washington County
Circuit Court, filed on 10/21, 2013; transferred to St. Francois County Circuit
Court, filed 05/22/2014 (CC Wrongful Death)

 

 

 

  

SCHEDULE 6.12

Compliance with Laws

None.

 

 

 

  

SCHEDULE 6.13

Financial Statements

See attached.

 

 

 

 

SCHEDULE 6.14

Real Property Compliance

None.

 

 

 

  

SCHEDULE 6.15

Environmental Matters

None.

 

 

 

  

SCHEDULE 6.19

Third Party Consents

None.

 

 

 

  

SCHEDULE 6.20

Government Approvals

(i)          A submission of a notice letter to the Missouri Department of
Health and Senior Services notifying it of all changes in the licensure
materials and information currently on file for each Facility (i.e., change in
ownership of the Real Property; names of new holders of liens on the Real
Property; list of Purchaser’s affiliates; and lease terminations).

(ii)         Amendments to Medicare enrollment materials including disclosure of
information about any new lenders (including mortgage lenders) with a five
percent (5%) or more security interest in the Medicare provider or any of its
property or assets.

 

 

 

  

SCHEDULE 6.21

Assessments

None.

 

 

 

  

SCHEDULE 6.22

Title Encumbrances

None.

 

 

 

 

 

SCHEDULE 6.24

Loans

None.

 

 

 

  

SCHEDULE 10.4

Purchaser’s Special Purpose Entities

 

Purchased Real Property   Special Purpose Entity       Cassville Health Care and
Rehab   ARHC CHCASMO01, LLC       Buffalo Prairie Care Center   ARHC BPBUFMO01,
LLC       Marshfield Care Center   ARHC MCMSHMO01, LLC       Country Aire
Retirement Estates   ARHC CALEWMO01, LLC       Edgewood Manor Nursing Home  
ARHC EMRAYMO01, LLC       Georgian Gardens   ARHC GGPOTMO01, LLC       Big
Spring Care Center   ARHC BSHUMMO01, LLC       Golden Years   ARHC GYHSVMO01,
LLC       Gregory Ridge Living Center   ARHC GRKCYMO01, LLC       Parkway Health
and Rehab   ARHC PHKCYMO01, LLC