EXHIBIT 10.48

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of the 10th
day of December, 2004, by and among (i) Sunrise of Lynn Valley Limited (“Lynn
Valley Owner”), Sunrise of Beacon Hill Limited (“Beacon Hill Owner”), Sunrise of
Mississauga Limited (“Mississauga Owner”), Sunrise of Markham Limited (“Markham
Owner”), Sunrise of Windsor Limited (“Windsor Owner”), Sunrise of Richmond Hill
Limited (“Richmond Hill Owner”) and Sunrise of Oakville Limited (“Oakville
Owner”) (Lynn Valley Owner, Beacon Hill Owner, Mississauga Owner, Markham Owner,
Windsor Owner, Richmond Hill Owner and Oakville Owner are hereinafter sometimes
referred to individually as “Facility Owner” and collectively as “Facility
Owners”), S.A.L. Operations B.H. Inc. (“BH Operator”), S.A.L. Operations
(Canada) Inc. (“Canada Operator”), and S.A.L. Operations B.N.S. Inc. (“BNS
Operator”) (BH Operator, Canada Operator and BNS Operator are hereinafter
sometimes referred to individually as a “Facility Operator” and collectively as
“Facility Operators”) (the Facility Owners and the Facility Operators are
hereinafter collectively referred to as the “Sellers”) and (ii) Sunrise Senior
Living, Inc., a Delaware corporation (“Sunrise” or “Purchaser”).

RECITALS:

     A.     Lynn Valley Owner owns the assisted living facility located in North
Vancouver, British Columbia, Canada known as Sunrise Assisted Living of Lynn
Valley, as more fully described on Exhibit A attached hereto and made a part
hereof (the “Lynn Valley Facility”).

     B.     Beacon Hill Owner owns the assisted living facility located in
Victoria, British Columbia, Canada known as Sunrise Assisted Living of Victoria,
as more fully described on Exhibit A (the “Beacon Hill Facility”).

     C.     Mississauga Owner owns the assisted living facility located in
Mississauga, Ontario, Canada known as Sunrise Assisted Living of Mississauga, as
more fully described on Exhibit A (the “Mississauga Facility”).

     D.     Markham Owner owns the assisted living facility located in Markham,
Ontario, Canada known as Sunrise of Unionville, as more fully described on
Exhibit A (the “Markham Facility”).

     E.     Windsor Owner owns the assisted living facility located in Windsor,
Ontario, Canada known as Sunrise Assisted Living of Windsor, as more fully
described on Exhibit A (the “Windsor Facility”).

     F.     Richmond Hill Owner owns the assisted living facility located in
Richmond Hill, Ontario, Canada known as Sunrise Assisted Living of Richmond
Hill, as more fully described on Exhibit A (the “Richmond Hill Facility”).

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     G.     Oakville Owner owns the assisted living facility located in
Oakville, Ontario, Canada known as Sunrise Assisted Living of Oakville, as more
fully described on Exhibit A (the “Oakville Facility”).

     H.     The assisted living facilities described in Recitals A through G are
individually referred to as a “Facility” and collectively as the “Facilities”.

     I.     Facility Operators have entered into certain operating leases (the
“Operating Leases”) with Facility Owners, pursuant to which Facility Operators
operate the Facilities.

     J.     Purchaser desires to purchase from Sellers substantially all of
Sellers’ assets, including the Facilities, and Sellers desire to sell such
assets to Purchaser in exchange for the Purchase Price (as hereinafter defined)
and in accordance with the terms and conditions set forth below.

     Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I
TERMINOLOGY

     1.1     Defined Terms. As used herein, the following terms shall have the
meanings indicated:

Affiliate: With respect to any specified person or entity, another person or
entity which, directly or indirectly controls, is controlled by, or is under
common control with, the specified person or entity.

Documents: This Agreement and all Exhibits hereto, and each other agreement,
certificate or instrument delivered pursuant to this Agreement.

First Additional Purchase Price Amount: The purchase price amount payable in
respect of the cash flows of the Operating Leases of the Facility Operators from
December 17, 2004 through the Closing Date, which shall be equal to the product
of (i) CAN$27,161 multiplied by (ii) the number of days elapsed from
December 17, 2004 through and including the earlier of (x) the Closing Date and
(y) December 31, 2004.

IPO: The initial public offering of units of Sunrise REIT, which offering is
anticipated to close prior to December 31, 2004.

IPO Closing: The time as of which units of Sunrise REIT first become marketable
on the Toronto Stock Exchange.

IPO Proceeds: The gross proceeds realized from the IPO, as shown on the first
page of the final prospectus for the IPO. For purposes of clarity, “IPO
Proceeds” excludes the proceeds from the exercise of any overallotment option.

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Licenses. All certificates, licenses, and permits issued by governmental
authorities in connection with the ownership, use, occupancy, operation, and
maintenance of the Facilities.

Lien: Any mortgage, 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 Personal Property
Security Act or comparable law of any jurisdiction.

Loss: With respect to any person or entity, any and all costs, obligations,
liabilities, demands, claims, settlement payments, awards, judgments, fines,
penalties, damages and reasonable out-of-pocket expenses, including court costs
and reasonable legal fees, whether or not arising out of a third-party claim.

Management Agreements: The agreements by and between each Facility Operator and
Manager.

Manager: Sunrise North Assisted Living, Limited, a New Brunswick corporation,
which is the manager of the Facilities under the Management Agreements.

Material Adverse Effect: A material adverse effect on the assets, business,
operations, financial condition or results of operations of the Facilities,
taken as a whole.

Net Proceeds: Fifty Nine Million Five Hundred Eighty-Three Thousand Four Hundred
Eleven Canadian Dollars (CAN$59,583,411).

Operating Leases: The leases by and between the Facility Owners, as landlords,
and the Facility Operators, as tenants.

Payoff Amount: One Hundred Four Million Six Hundred Thirty Five Thousand Three
Hundred Thirty-Nine Canadian Dollars (CAN$104,635,339).

Permitted Lien: Any statutory lien which secures a governmentally required
payment not yet due that arises, and is customarily discharged, in the ordinary
course of business.

Resident Deposits: All deposits or advances of any kind or nature from any
resident of any Facility.

Second Additional Purchase Price Amount: An increase in the amount of the
purchase price for the assets of the Facility Operators representing an increase
in the projected cash flows (and therefore an increase in the value) of the
Operating Leases of the Facility Operators as determined by the IPO, which shall
be equal to the product of: (i) 31.82%

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and (ii) the positive difference, if any, between (x) the product of A) 105.36%
and B) the IPO Proceeds and (y) CAN$229,847,560.

Sunrise REIT: The trust to be formed under Ontario law anticipated to be named
“Sunrise Senior Living Real Estate Investment Trust.”

Taxes: All Canadian federal, provincial, local and foreign taxes including,
without limitation, income, gains, transfer, unemployment, withholding, payroll,
social security, real property, personal property, excise, sales, use and
franchise taxes, levies, assessments, imposts, duties, licenses and registration
fees and charges of any nature whatsoever, including interest, penalties and
additions with respect thereto and any interest in respect of such additions or
penalties. The term “Taxes” excludes (i) impact fees or other similar exactions
levied or payable in connection with the development of any of the Facilities,
and (ii) any U.S. taxes assessed against individual partners in SALH with
respect to their investment therein.

Tax Return: Any return, filing, report, declaration, questionnaire or other
document required to be filed for any period with any taxing authority (whether
domestic or foreign) in connection with any Taxes (whether or not payment is
required to be made with respect to such document).

Title Insurer: First Canadian Title Insurance Company.

     1.2     Additional Defined Terms. As used herein, the following terms shall
have the meanings defined in the recitals or section indicated below:

     
Assignment Agreements
  Section 8.2(f)
Assumed Liabilities
  Section 2.3(b)
Breaching Party
  Section 10.6
Closing
  Section 8.1
Closing Date
  Section 8.1
Closing Notice
  Section 2.1
Closing Statement
  Section 8.2(e)
CRA
  Section 5.4(c)
CRA Clearance
  Section 5.7(c)
Cut-Off Time
  Section 2.5
Deposit
  Section 2.3(b)
Escrow Agent
  Section 2.3(b)
Excluded Assets
  Section 2.2(b)
Facility Agreements
  Section 2.2(a)(iii)
GST
  Section 5.7(f)
Implied Covenants
  Section 2.4(e)
Improvements
  Section 2.2(a)(i)
Indemnified Party
  Section 9.4(a)
Indemnifying Party
  Section 9.4(a)
Land
  Section 2.2(a)(i)

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Non-Breaching Party
  Section 10.6
Owned Assets
  Section 2.2(a)
Personal Property
  Section 2.2(a)
Purchase Price
  Section 2.3(a)
Real Property
  Section 2.2(a)(i)
Resident Agreements
  Section 2.2(a)(iii)
SALH
  Section 2.3(b)
Seller’s Warranties
  Section 2.4(d)
SSLII
  Section 8.7
SSLII Interests
  Section 8.7
Sunrise’s Cross Pre-Closing Obligat
  ions Section 2.5(b)
Sunrise’s Net Pre-Closing Benefit
  Section 2.5(c)
Sunrise’s Net Pre-Closing Payments
  Section 2.5(b)

ARTICLE II
PURCHASE AND SALE OF OWNED ASSETS

     2.1     Agreement. Sellers hereby agree to sell to Purchaser or its
designee (which designee may be Sunrise REIT or an entity controlled, directly
or indirectly, by Sunrise REIT), and Purchaser agrees to purchase, the Owned
Assets (as defined below and including, for certainty, the Facilities) from
Sellers, on the Closing Date, on and subject to the terms and conditions
hereinafter set forth. Sunrise will provide written notice of the Closing Date
(the “Closing Notice”) to Seller no less than fifteen (15) days prior to the
Closing Date. The Closing Notice will specify the Closing Date and the place at
which the Closing will take place.

     2.2     Owned Assets.

               (a)     Defined. The “Owned Assets” shall consist of all of the
assets of Sellers, whether tangible, intangible, contingent or otherwise, and
shall specifically include the following:

               (i)     Real Property.

        (A)     That certain real property consisting of land (“Land”) and all
buildings, structures, fixtures and other improvements (“Improvements”) located
thereon, such Land and Improvements being more particularly described as
follows:

                  Facility   Address   Units    
Beacon Hill
  920 Humboldt Street     93      

  Victoria, BC            
 
               
Lynn Valley
  940 Lynn Valley Road     92      

  North Vancouver, BC            

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Markham
  38 Swansea Road     82      

  Markham, ON            
 
               
Mississauga
  1273 and 1279 Burnhamthorpe            

  Road East     84      

  Mississauga, ON            
 
               
Oakville
  456 Trafalgar Road     87      

  Oakville, ON            
 
               
Richmond Hill
  9800 Yonge Street     70      

  Richmond Hill, ON            
 
               
Windsor
  5065 Riverside Drive East
Windsor, ON     84      

     The Land, Improvements and related real property (collectively, the “Real
Property”) are more fully described on Exhibit A shall be deemed to include and
be subject to all related permits, easements, Licenses (except to the extent
hereinafter expressly excluded, and only to the extent transferable under
applicable law), rights-of-way, rights and related appurtenances.

               (B)     All right, title and interest of the Facility Owners as
landlord (whether named as such therein, or by assignment or otherwise) in the
Operating Leases and any other leases and subleases regarding the Real Property
now existing or at any time hereafter made, and all amendments, modifications,
supplements, renewals and extensions thereof, together with any security
deposits made by the lessees thereunder.

               (C)     All right, title and interest of the Facility Operators
as tenant under the respective Operating Leases.

     (ii)     Personal Property.

               (A)     Any and all furniture, fixtures, furnishings, machinery
and equipment used in connection with the Facilities, and all other personal
property used in connection with the Real Property and, as of the Closing Date,
located upon the Real Property, if any.

               (B)     Goodwill, going concern, and all existing warranties and
guaranties (express or implied, but only to the extent transferable under
applicable law or the applicable warranty or guaranty agreement) issued to the
Facility Owners or Facility Operators in connection with the Improvements or the
personal property described in paragraph (a)(ii)(A) above.

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               (C)     The tangible and intangible property described in
Sections 2.2(a)(ii)(A) and 2.2(a)(ii)(B) shall be referred to herein as the
“Personal Property.” In no event shall the Personal Property include any
property owned by Manager, notwithstanding Manager’s use of such property in
connection with its management and administration of the Facilities.

          (iii)     Facility Agreements and Resident Agreements. All rights of
the Sellers in, to and under all contracts, leases, agreements, commitments and
other arrangements, and any amendments or modifications, used or useful in the
operation of the Facilities as of the date hereof or made or entered into by
Sellers or Manager between the date hereof and the Closing Date in compliance
with this Agreement (the “Facility Agreements”), and all occupancy, residency,
lease, tenancy and similar written agreements entered into in the ordinary
course of business with residents of the Facilities, and all amendments,
modifications, supplements, renewals, and extensions thereof (“Resident
Agreements”) and all Resident Deposits.

          (iv)     Records. True and complete copies (or, at Purchaser’s option,
originals, so long as the Purchaser provides copies to the Sellers) of all of
the books, records, accounts, files, logs, ledgers and journals pertaining to or
used in the operation of the Facilities, including, but not limited to, any
electronic data stored on computer disks or tapes, and originals of any of the
foregoing that relate to the Facilities.

          (v)     Licenses. Any and all Licenses now held and used or useful in
the operation of the Facilities, and any renewals, extensions, amendments or
modifications thereof, except to the extent not transferable or assignable under
applicable law, to the extent transferable under applicable law.

          (vi)     Cash on Hand. All cash on hand of the Facility Owners and the
Facility Operators as of the Closing Date, other than any cash received or
receivable under this Agreement.

          (vii)     Miscellaneous Assets. Any other tangible or intangible
assets, properties or rights of any kind or nature not otherwise described above
in this Section 2.2 and now or hereafter owned or leased by the Facility Owners
and used in connection with the operation of the Facilities, excluding only the
“Excluded Assets” described below.

          (b)     Excluded Assets. Notwithstanding anything to the contrary
herein, the Sellers are not selling, and Purchaser shall not acquire, any of the
“Excluded Assets”, defined for purposes hereof as:

  (i)   The rights of Sellers under this Agreement and the other Documents.    
(ii)   The original (or, at Purchaser’s option, copies of) records referred to
in paragraph (a)(iv) above, as well as any other corporate and accounting books
and records of the Sellers.

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  (iii)   The Purchase Price and any other payments received or receivable
hereunder.

               (c)     Assets Not Transferable. Nothing herein shall be
construed as requiring or permitting Sellers to assign or transfer to Purchaser
any agreement or License that by its terms cannot be assigned absent the consent
of any third party (unless any required consent shall have been obtained). If,
notwithstanding the reasonable efforts of the parties pursuant to Section 5.4,
any such consent to assignment or transfer shall not have been obtained by the
Closing Date, then (i) the failure to have received such consent shall not
constitute the failure of a condition precedent to closing and (ii) the parties
will continue to use reasonable efforts after the Closing Date to obtain such
consent. Until such consent shall have been obtained, for a period of up to six
months after the Closing Date, the applicable Seller shall, by itself or by its
agents, at the request and expense and under the direction of Purchaser, in the
name of such Seller or otherwise as Purchaser may reasonably specify and as may
be permitted by law, take all actions as Purchaser may reasonably request, at
Purchaser’s sole expense, in order: (i) that the rights and obligations of such
Seller under any such contract or License shall be preserved, (ii) to facilitate
the performance of such Seller’s obligations under such contract or License and
(iii) to cause the other party or parties to any such contract to perform its or
their obligations thereunder (which performance shall be for the sole benefit of
Purchaser).

     2.3     Purchase Price; Deposit.

               (a)     The aggregate amount of Purchaser’s payment to Sellers
for the Owned Assets including the Facilities (“Purchase Price”) shall be an
amount equal to (A) the Net Proceeds, plus (B) the Payoff Amount, plus (C) the
First Additional Purchase Price Amount, plus (D) the Second Additional Purchase
Price Amount. The Purchase Price shall be paid on the Closing Date by wire
transfer of immediately available funds for disbursement to Sellers and to
relevant lenders in accordance with the allocations and wiring instructions to
be set forth in the Closing Statement.

               (b)     As further consideration for the Owned Assets, Purchaser
hereby agrees that on the Closing Date, but effective as of and from the Cut-Off
Time (as defined in Section 2.5), Purchaser shall assume and indemnify and hold
harmless each of the Sellers and each of their respective Affiliates from and
against all liabilities, indebtedness and obligations of Sellers of any kind or
nature, whether known or unknown, fixed, accrued, absolute or contingent,
liquidated or unliquidated, due or to become due, regardless of when asserted or
incurred, excluding only the liabilities and obligations of Sellers or their
respective Affiliates arising pursuant to this Agreement, the other Documents or
the constituent documents of Sunrise Assisted Living Holdings, L.P. (“SALH”)
(the liabilities so assumed, the “Assumed Liabilities”). For certainty and
without limitation, it is agreed by the Purchaser that, as provided in
Section 2.4(e) of this Agreement, any liabilities and obligations of any of the
Sellers arising out of the Implied Covenants shall be included in the Assumed
Liabilities.

               (c)     Upon execution of this Agreement by all parties hereto,
Sunrise shall deposit, by wire transfer of immediately available funds, with
Torys LLP (“Escrow Agent”), Sixteen Million Canadian Dollars (CAN$16,000,000)
(the “Deposit”), in accordance with the

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terms of the Escrow Agreement, dated of even date herewith, among Sunrise, the
Sellers and Escrow Agent. The Deposit shall be applied towards the Purchase
Price on the Closing Date or paid to the Sellers on December 31, 2004 if the
Closing shall have not taken place by such date, except as otherwise provided
under Section 10.2(b).

               (d)     Purchaser and Sellers agree that CAN $152,224,138 of the
Net Proceeds and the Payoff Amount shall be allocated to the purchase of the
Facilities and other assets from the Facility Owners as follows (in Canadian
Dollars):

                          Amount   Amount   Amount     Net Proceeds   Allocated
to   Allocated to   Allocated to     and Payoff   Lease   Net Working   Real
Property     Amount   Receivables   Capital   & Other Assets
Lynn Valley Owner
  CAN   $24,677,305   CAN   $2,161,110   CAN   $483,929   CAN   $22,032,266
Beacon Hill Owner
  CAN   $24,957,230   CAN   $2,242,129   CAN   $682,835   CAN   $22,032,266
Mississauga Owner
  CAN   $19,801,157   CAN   $1,653,613   CAN   $253,530   CAN   $17,894,014
Markham Owner
  CAN   $21,907,604   CAN   $2,328,096   CAN   $231,195   CAN   $19,348,313
Windsor Owner
  CAN   $20,036,220   CAN   $1,798,097   CAN   $778,782   CAN   $17,459,341
Richmond Hill Owner
  CAN   $18,284,174   CAN   $   952,514   CAN   $881,469   CAN   $16,450,191
Oakville Owner
  CAN   $22,560,448   CAN   $1,897,784   CAN   $912,399   CAN   $19,750,265

               
 
               
Facility Owners
Total
  CAN $152,224,138   CAN $13,033,343   CAN $4,224,139   CAN $134,966,656

An amount equal to CAN$11,994,611 of the Net Proceeds, the Second Additional
Purchase Price Amount and the First Additional Purchase Price Amount shall be
allocated to the purchase of the Operating Leases and other assets of the
Facility Operators in the following proportions: 27% to BH Operator, 35% to
Canada Operator and 38% to BNS Operator. Purchaser and Sellers agree to report
the transaction for all tax and financial reporting purposes consistently with
such allocation.

     2.4     As-Is, Where-Is, With All Faults Sale. Sunrise acknowledges and
agrees as follows:

               (a)     Sunrise has conducted (or has waived its right to
conduct), and shall be entitled to continue to conduct, such due diligence as
Sunrise has deemed or shall deem necessary or appropriate. Sunrise further
acknowledges that Manager, a wholly-owned subsidiary of Sunrise, has been
managing the Facilities and Sunrise is, therefore, fully aware of the condition
of the Facilities and of the status of all their operations. Sunrise has had and
will continue to have, the right to conduct any inspections or investigations
Sunrise desires with respect to the Facilities.

               (b)     Except with respect to Sellers’ representations and
warranties in Article

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IV, the Owned Assets shall be sold, and Purchaser shall accept the Owned Assets
and the Assumed Liabilities on the Closing Date, “AS IS, WHERE IS, WITH ALL
FAULTS”, with no right of setoff or reduction in the Purchase Price.

               (c)     Without limiting the generality of the foregoing, Sellers
advise Purchaser that certain of the Owned Assets may be subject to restrictions
as to their free transferability to Purchaser (all such restrictions, the
“Transfer Restrictions”), including without limitation:

  (i)   Certain contracts included among the Owned Assets may contain explicit
prohibitions on assignment without the consent of the other party thereto, or
may not be assignable by operation of law absent such consent;     (ii)   To the
extent the Owned Assets include any Licenses, filing or registration with, or
consent from, the governmental authority issuing such Licenses may be required;
    (iii)   Certain of the Owned Assets may be subject to Liens other than those
securing the indebtedness in respect of which the Payoff Amount is to be paid;  
  (iv)   The Payoff Amount may not be sufficient to discharge all Liens in
respect of the indebtedness in respect of which the Payoff Amount is to be paid;
    (v)   The release of any Liens intended to be discharged by the Payoff
Amount may not occur simultaneously with the Closing Date if the Payoff Amount
is paid as of such date; and     (vi)   Certain of the Owned Assets may not be
in the possession, custody or control of the Sellers.

Purchaser specifically confirms its understanding that (1) Sellers have made no
investigation as to the existence of any Transfer Restrictions; (2) except as
set forth in Section 5.4, Sellers shall have no responsibility to cause the
Transfer Restrictions to be satisfied, cured or discharged; (3) the continuation
of any Transfer Restrictions as of the Closing Date shall neither relieve
Purchaser of its obligations to consummate the transactions contemplated by this
Agreement, nor give Purchaser any right of counterclaim or setoff against any
Seller; and (4) the provisions of this paragraph (c) are an essential inducement
to cause Sellers to enter into this Agreement.

               (d)     Except for Sellers’ representations and warranties in
Article IV (“Sellers’ Warranties”), Sellers have not made, nor shall Sellers be
deemed to have made, any oral or written representations, warranties, promises
or guarantees (whether express, implied, statutory or otherwise) to Sunrise with
respect to the Owned Assets (including the Facilities), their value, or any
matter set forth, contained or addressed in the Documents (including, but not
limited to,

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the accuracy and completeness thereof).

               (e)      Notwithstanding the exclusion from the Assumed
Liabilities of the liabilities and obligations of the Sellers arising pursuant
to the Documents, any liabilities and obligations of any of the Sellers arising
out of the Implied Covenants shall be included in the Assumed Liabilities and
consequently any Loss in connection therewith will be the subject matter of the
indemnity from the Purchaser provided in Section 9.2 of this Agreement. “Implied
Covenants” as used in this Agreement means any covenants (including any
releases), representations or warranties in or arising as a result of the
execution and delivery of the deeds contemplated in Section 8.3(a) of this
Agreement, including without limitation, as a result of any statutory provisions
which may be applicable thereto.

               (f)      Sunrise shall independently confirm to its satisfaction
all information that it considers material to its purchase of the Owned Assets
(including the Facilities). In addition, Sunrise expressly understands and
acknowledges that it is possible that unknown liabilities may exist with respect
to the Facilities or be otherwise included among the Assumed Liabilities.
Sunrise explicitly took that possibility into account in determining and
agreeing to the Purchase Price, and a portion of such consideration, having been
bargained for between parties with the knowledge of the possibility of such
unknown liabilities, is given in exchange for a full accord and satisfaction and
discharge of all such liabilities. Sunrise has also had all information
necessary to evaluate the value of the Owned Assets (including the Facilities)
and their marketability. Based on all such information and any other information
Sunrise has desired to obtain and obtained, Sunrise acknowledges that the
Purchase Price is a fair price for the Owned Assets (including the Facilities).
Notwithstanding the foregoing, such acknowledgment is not intended to, and shall
not be construed to, (i) effect any contractual assumption of liability as to
matters which are not expressly assumed by Sunrise in this Agreement or the
documents executed by the parties in connection with the transactions
contemplated in this Agreement, or (ii) affect or impair any rights or remedies
that Sunrise may have against Sellers as a result of a breach of any of Sellers’
Warranties.

               (g)      Purchaser hereby waives any right pursuant to Part 4 of
the Environmental Management Act, SBC 2003, c.53 to receive or be provided with
a site profile as contemplated therein.

     2.5      Beneficial Ownership.

               (a)      General Statement. It is the intention of the parties to
this Agreement that, as of 12:00 a.m., September 1, 2004, Sunrise shall have
accepted and assumed from Sellers all of the benefits and burdens of operation
of the Facilities. To the extent not expressly inconsistent with the terms of
this Agreement, the parties desire that all provisions of this Agreement be
interpreted so as to give effect, wherever possible, to the foregoing statement.
For purposes of this Agreement, the “Cut-Off Time” means 11:59 p.m., August 31,
2004.

               (b)      Expenditures; Capital Improvements. From the Cut-Off
Time through the Closing Date, if and to the extent any funds are needed to pay
any expense of operation, maintenance or repair, or to undertake any capital
improvement, with respect to any Facility, or to satisfy any liability (whether
accrued or accruing) that either (1) is a liability of one of the

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Sellers or (2) would, as of the Closing Date, be an Assumed Liability, Sunrise
will advance such funds to Sellers, in order to enable Sellers to pay such
expense or capital cost or to satisfy such liability. The parties confirm and
acknowledge that the Purchase Price has already been adjusted to give effect to
Sellers’ obligations with regard to any such liabilities that accrued prior to
the Cut-Off Time. The aggregate amount payable by Sunrise hereunder is referred
to as “Sunrise’s Gross Pre-Closing Obligations” and the aggregate amount payable
by Sunrise, net of any amounts received in respect of clauses (i) through
(iii) of paragraph (c) below, is referred to as “Sunrise’s Net Pre-Closing
Payments.”

               (c)      Revenues; Accounts Receivable; Proceeds. Sunrise will be
entitled (i) to receive all proceeds of insurance received after the Cut-Off
Time arising out of any casualty, for repair, replacement or rent loss; (ii) to
collect and retain all accounts receivable arising from the Facilities; and
(iii) to retain all gross revenues received after the Cut-Off Time, to the
extent that the amounts set forth in clauses (i) through (iii) exceed the total
amount of Sunrise’s Gross Pre-Closing Obligations. Any such excess is referred
to herein as “Sunrise’s Net Pre-Closing Benefit”.

               (d)      Repayment.

               (i)      Sunrise’s Net Pre-Closing Payments will not be repayable
by Sellers to Sunrise except in the event of termination of this Agreement by
Purchaser due to Sellers’ default pursuant to Section 10.2(b)(i) hereof, in
which event, and in addition to any other remedies Purchaser may have hereunder,
the amount of Sunrise’s Net Pre-Closing Payments will be repaid to Sunrise on
demand (after the date of termination) with interest at the rate of twelve
percent (12%) per annum from the date of date of each such payment. If Closing
occurs hereunder, any Sunrise’s Net Pre-Closing Payments will not be applied to
the Purchase Price or otherwise reduce the sums due to Sellers hereunder.

               (ii)      Sunrise’s Net Pre-Closing Benefit will not be repayable
by Sunrise to Sellers except in the event of termination of this Agreement by
Sellers due to Purchaser’s default pursuant to Section 10.2(a)(i) hereof, in
which event, and in addition to any other remedies Sellers may have hereunder,
Sunrise’s Net Pre-Closing Benefit will be repaid to Sellers on demand (after the
date of termination) with interest at the rate of twelve percent (12%) per annum
from the date of accrual of each such benefit. If Closing occurs hereunder, any
Sunrise Net Pre-Closing Benefit will not increase the Purchase Price or
otherwise increase the sums due from Sunrise to Sellers hereunder.

               (e)     Rights and Obligations Personal to Sunrise. The rights
and obligations of Sunrise under this Section 2.5 are and will remain personal
to Sunrise. No assignee of Sunrise will have any liability to Sellers under this
Section 2.5 nor be entitled to any benefit obtained by Sunrise under this
Section 2.5.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUNRISE

     Sunrise represents and warrants to Sellers as follows:

     3.1     Organization, Good Standing and Entity Authority. Sunrise is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate authority to own
and operate its properties and carry on its business.

     3.2     Authorization and Binding Effect of Documents. Purchaser (and its
Affiliates) have all requisite power and authority to enter into this Agreement
(to the extent each is a signatory hereto), and either have or will, as of the
Closing Date, have all requisite power and authority to enter into the other
Documents to which they are a party and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
each of the other Documents by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of Purchaser. This Agreement has been, and each
of the other Documents at or prior to Closing will be, duly executed and
delivered by Purchaser. This Agreement constitutes (and each of the other
Documents, when executed and delivered, will constitute) the valid and binding
obligation of Purchaser enforceable against Sunrise in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and to the
exercise of judicial discretion in accordance with general principles of equity,
whether applied by a court of law or of equity.

     3.3     Absence of Conflicts. The execution, delivery and performance by
Purchaser of this Agreement and the other Documents, and consummation by
Purchaser of the transactions contemplated hereby and thereby, do not and will
not, to the best of Purchaser’s knowledge, (i) conflict with or result in any
breach of any of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in a violation of, (iv) give any third party the
right to modify, terminate or accelerate any obligation under, the provisions of
any organizational documents of Purchaser (or its Affiliates), any laws or
regulations to which Sunrise (or its Affiliates) is subject, or any indenture,
mortgage, lease, loan agreement or other agreement or instrument to which
Purchaser (or its Affiliates) are subject.

     3.4     Broker’s or Finder’s Fees. No agent, broker, investment banker or
other person or firm acting on behalf of or under the authority of Purchaser or
any Affiliate of Purchaser is or will be entitled to any broker’s or finder’s
fee or any other commission or similar fee, directly or indirectly, from
Purchaser in connection with the transactions contemplated by this Agreement.
Purchaser agrees to indemnify and hold Sellers harmless from any Loss resulting
from a breach of this representation and warranty. Notwithstanding the
provisions of Article IX below, such agreement to indemnify shall survive the
Closing without limitation.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS

     Sellers represent and warrant to Sunrise as follows:

     4.1     Organization and Good Standing. Each Seller that is a Facility
Owner is a limited company duly organized, validly existing and in good standing
under the laws of Jersey, Channel

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Islands. Each Facility Operator is a corporation duly organized, validly
existing and in good standing under the laws of the Province of New Brunswick,
Canada. Sellers and the Facility Operators have all requisite company or
partnership power to own, operate and lease their respective properties and
carry on their respective businesses.

     4.2     Authorization and Binding Effect of Documents. Sellers and their
Affiliates within the control of SALH have all requisite power and authority to
enter into this Agreement (to the extent each is a signatory hereto), and either
have or will, as of the Closing Date, have all requisite power and authority to
enter into the other Documents to which Sellers are a party and to consummate
the transactions contemplated by this Agreement. The execution and delivery of
this Agreement and each of the other Documents by Sellers (and said Affiliates)
and the consummation by Sellers (and said Affiliates) of the transactions
contemplated by this Agreement will be duly authorized by all necessary company
action on the part of such parties. This Agreement has been, and each of the
other Documents to which Sellers are a party at or prior to Closing will be,
duly executed and delivered by Sellers. This Agreement constitutes (and each of
the other Documents, when executed and delivered, will constitute) the valid and
binding obligation of Sellers enforceable against Sellers in accordance with its
terms subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and to the
exercise of judicial discretion in accordance with general principles of equity,
whether applied by a court of law or of equity.

     4.3     Absence of Conflicts. The execution, delivery and performance by
Sellers (and/or their Affiliates) of this Agreement and the other Documents, and
consummation by Sellers (and/or their Affiliates) of the transactions
contemplated hereby and thereby, do not and will not (i) conflict with or result
in any breach of any of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in a violation of, (iv) give any third party the
right to modify, terminate or accelerate any obligation under, the provisions of
the articles of organization or operating agreement of Sellers (and/or their
Affiliates).

     4.5     Broker’s or Finder’s Fees. No agent, broker, investment banker, or
other person or firm acting on behalf of Sellers or under its authority is or
will be entitled to any broker’s or finder’s fee or any other commission or
similar fee, directly or indirectly, from Sellers in connection with the
transactions contemplated by this Agreement. Sellers agree to indemnify and hold
Sunrise, Sunrise REIT and their Affiliates harmless from any Loss resulting from
a breach of the representations and warranties set forth in this section.
Notwithstanding the provisions of Article IX below, such agreement to indemnify
shall survive the Closing without limitation.

ARTICLE V
OTHER COVENANTS

     5.1      Notification of Certain Matters. Purchaser shall give prompt
notice to Sellers, and Sellers shall give prompt notice to Purchaser, of (i) the
occurrence, or failure to occur, of any event that would be 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,

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in any material respect, any covenant, condition or agreement to be complied
with or satisfied by any of them under this Agreement.

     5.2     Publicity. The parties agree that no public release or announcement
concerning the transactions contemplated hereby shall be issued by any party
without the prior written consent of the other party, except as required by law
or applicable regulations, and except as required by Sunrise REIT or Sunrise in
connection with the IPO or Sunrise’s securities disclosures. Sellers hereby
acknowledge prior receipt of a draft of the IPO prospectus, it being understood
that Sellers shall have no right to comment thereon.

     5.3     Material Adverse Change. Sellers and Purchaser will promptly notify
the other party of any event of which Sellers or Purchaser, as the case may be,
obtains knowledge which has had or could reasonably be expected to have a
Material Adverse Effect. It is specifically understood that the occurrence of
any event which has had or could reasonably be expected to have a Material
Adverse Effect shall not, of itself, give rise to grounds for termination of
this Agreement or otherwise result in the failure of a condition to Closing.

     5.4     Reasonable Best Efforts; Further Assurances.

               (a)      Subject to the terms and conditions of this Agreement,
each party will use its reasonable best efforts to take all action and to do all
things necessary, proper or advisable to satisfy any condition hereunder in its
power to satisfy and to consummate and make effective as soon as practicable the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, Sellers agree to use reasonable efforts to assist Purchaser in
procuring any necessary consents, filings or other efforts to remove or satisfy
any of the Transfer Restrictions, it being understood that Purchaser bears the
responsibility for identifying any such Transfer Restrictions, shall be
principally responsible for addressing the same and bears the risk that the same
shall not have been removed or satisfied prior to Closing;

               (b)      From time to time before, at and after the Closing, each
party, at its expense and without further consideration, will execute and
deliver such documents as reasonably requested by the other party in order more
effectively to consummate the transactions contemplated hereby.

               (c)      Except as otherwise expressly set forth herein:
(1) Purchaser shall be responsible for paying any out-of-pocket expenditures,
including legal fees, filing costs and similar expenses paid by Purchaser or
Sellers (at Purchaser’s request) in the course of removing any Transfer
Restrictions; (2) Sellers shall not be required to take any actions that would
increase their liability resulting from this transaction beyond the scope of
liability contemplated by this Agreement; and (3) Sellers shall not be required
to take any actions inconsistent with the provisions of this Agreement.

     5.5      No Recordation. Sellers and Purchaser each agree that neither this
Agreement nor any memorandum or notice hereof shall be recorded and Purchaser
agrees (a) not to file any notice of pendency or other instrument (other than a
judgment) against the Facilities or any portion thereof in connection herewith
and (b) to indemnify Sellers against all liabilities

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(including reasonable attorneys’ fees, expenses and disbursements) incurred by
Sellers by reason of the filing by Purchaser of such notice of pendency or other
instrument. Notwithstanding the foregoing, if the same is permitted pursuant to
applicable laws, Purchaser shall be entitled to record a notice of lis pendens
or certificate of pending litigation if Purchaser is entitled to seek (and is
actually seeking) specific performance of this Agreement by Sellers in
accordance with the terms of Section 10.3 hereof.

     5.6      Personal Property Levels. From the date hereof until the Closing
Date, Sunrise will cause to continue to manage and operate the Facilities
consistent with prior practice, including maintaining levels of Personal
Property on hand at the Facilities materially in keeping with the levels
previously maintained.

     5.7       Taxes.

               (a)      Purchaser shall prepare and timely file all Tax Returns
for calendar year 2004 of the Facility Owners and Facility Operators due on or
after the date of this Agreement, subject to giving Sellers a period of not less
than fifteen (15) days prior to their due date for review and comment (it being
understood that the Tax Returns so delivered shall not be unreasonably rejected
by Sellers). Except as set forth in the following sentence, Purchaser shall
timely pay any Tax due with respect to such Tax Returns as well as any services
or sales Taxes payable in connection with the transactions contemplated by this
Agreement. SALH (or its equity holders) shall pay all income Taxes of the
Facility Owners and Facility Operators due solely as a result of the
transactions contemplated by this Agreement (including any Canadian withholding
taxes resulting from distributions of proceeds from the Facility Owners or
Facility Operators (or their respective successors) to SALH) and any operating
taxes of the Facility Owners and Facility Operators until August 31, 2004,
except any Taxes arising as a result of a payment to a Seller under Section
2.5(b). Purchaser shall be entitled to any Tax refunds related to such Tax
Returns, except for Taxes paid as a result of the transactions contemplated by
this Agreement and any operating taxes of the Facility Owners and Facility
Operators until August 31, 2004, which shall be paid to Sellers.

               (b)      Sellers and Purchaser consent to, and shall provide
cooperation with, SALH in timely filing Internal Revenue Service Forms 8832
(Entity Classification Election) on or immediately after the Closing Date to
treat the Sellers as disregarded entities for U.S. federal income tax purposes
under U.S. Treasury regulations under Section 7701 of the Internal Revenue Code
of 1986, as amended, with such election to be made effective (i) for the
Facility Owners as of the date of execution of this Agreement by the parties
hereto, (ii) for the Nova Scotia unlimited liability companies that will be the
successors to the Facility Operators as of the Closing Date and (iii) for the
British Virgin Islands companies that will be the successors to the Facility
Owners as of their dates of formation. Sellers and Purchaser further consent to,
and shall provide cooperation with, (1) SALH in causing each of the Facility
Operators to continue as Nova Scotia corporations and to then be arranged to
form Nova Scotia unlimited liability companies that are wholly-owned by SALH
with such continuation and arrangement to be made effective within three
(3) business days prior to the Closing Date, and (2) SALH in causing the
Facility Owners to continue as one or more newly formed British Virgin Islands
companies that are wholly-owned by SALH with such continuation to be made
effective as soon as is practicable

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following (x) the Closing Date and (y) the withdrawal of SSLII from SALH as
described in Section 8.7. Purchaser acknowledges that Sellers need to be assured
that the Closing will occur within the foregoing three-business-day period
relating to the continuation and arrangement of the Facility Operators because
the continuation and arrangement will be the taxable event for US tax purposes
(i.e., a liquidation). The presently anticipated timetable for certain of the
continuations, arrangements and elections described above, and for the
approvals, release of proceeds, liquidations and dissolutions set forth in
paragraphs (c) and (e) below, is attached hereto as Exhibit G. Such Exhibit may
from time to time be modified or supplemented by consent of the parties, such
consent not to be unreasonably withheld, conditioned or delayed. Sellers agree
that the responsibility for preparing the documents to effect such
continuations, arrangements and elections, and the costs relating to the
preparation and filing of such documents, shall be borne by SALH.

               (c)      Prior to Closing, Purchaser shall diligently work with
Sellers to obtain, at Sellers’ expense, all tax clearance certificates necessary
from any governmental authority to effectuate the transactions contemplated by
this Agreement including but not limited to the distribution of the Net
Proceeds, First Additional Purchase Price Amount and Second Additional Purchase
Price Amount. Without limiting the generality of the foregoing, Purchaser and
Sellers shall use their best efforts to obtain approval of the CRA for the
transactions contemplated hereby such that no withholding will be required in
connection with the transactions contemplated hereby (the “CRA Clearance”) and
that the sales proceeds distributed by the Facility Operators shall not be
subject to a withholding Tax rate in excess of the applicable US/Canada treaty
rate in effect for those ultimate indirect investors in SALH (as identified in a
written notice to Sunrise by a majority in interest of the Class B Limited
Partners in SALH on or prior to the Closing Date), it being understood and
acknowledged that obtaining such approval shall not be a condition precedent to
Purchaser’s obligation to consummate the transactions. The Parties will
co-operate to direct a portion of the Purchase Price to the CRA as of the
Closing in an amount sufficient to satisfy the CRA’s estimate of Tax liabilities
to become due, to permit the receipt of the CRA Clearance prior to the release
of funds to Sellers at the Closing. Any sales proceeds withheld at Closing for
payment of such Taxes but not required for the payment of such Taxes will be
released as directed by SALH. In the event that the CRA Clearance shall not have
been obtained by the Closing Date, Purchaser shall co-operate with Sellers to
implement a suitable alternative structure (elected by Sellers) for payment of
the Purchase Price; provided that no such alternative shall (1) be inconsistent
with applicable law (including Canadian tax law) or (2) require Purchaser to
expend any sums.

               (d)     Sellers and Purchaser shall timely provide the other with
such cooperation and assistance as may reasonably be requested by the other in
connection with the preparation of any Tax Return, any audit or other
examination by any Taxing Authority, or any judicial or administrative
proceedings relating to liability for Taxes including such reasonable
cooperation (including the provision or filing of certificates) that would
reduce any Tax payable as a result of the Closing.

               (e)      SALH shall be responsible for preparing any documents
and taking any actions to cause SALH and the Sellers to be liquidated and
dissolved. It is understood that the officers and directors of Purchaser and
Sellers shall make themselves reasonably available to execute any documents
required to be delivered in connection with such liquidations and

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dissolutions. The parties will co-operate to determine the best time for each
such liquidation and dissolution, subject to Section 5.7(g) below, but in no
event prior to the time designated by SALH, and further, the Sellers shall not
be liquidated prior to the expiration of the one-year period for survival of
representations and warranties contemplated by Section 9.1 (assuming no claim
for indemnity pursuant to Article IX shall then be pending). SALH shall be
responsible for the costs required to maintain the Sellers in existence during
this period, except as provided under Section 5.7(g) below. Until the earlier of
(x) the liquidation of SALH or (y) December 31, 2006, Purchaser (or its
Affiliate) will continue to provide accounting services to SALH consistent with
past practice for the purposes of the maintenance, liquidation and dissolution
of existing entities as contemplated by this Section 5.7(e). SALH will obtain an
acknowledgement and release from its Class B Limited Partners and Thomas Moak
(and will use reasonable efforts to obtain a similar acknowledgement and release
from its Class A Limited Partners) in connection with the distribution of
proceeds to such partners, to the effect that the amount so distributed
represents payment in full of all amounts to which such partners are entitled.

               (f)      The Sellers and Purchaser will jointly execute an
election under Section 167 of the Excise Tax Act (Canada) in the form prescribed
by that Act and the Purchaser will file it with the CRA on or before the date
required by that Act so that the Goods and Services Tax (“GST”) imposed under
Part IX of that Act is not payable in respect of the purchase and sale of the
Owned Assets contemplated by this Agreement. The Purchaser will indemnify the
Sellers for any tax, penalty and interest that may be assessed against the
Sellers as a result of a failure by the Purchaser to file the election on or
before the date required by that Act or as a result of a determination that the
election was not available for any reason other than the inaccuracy of any
representation or warranty made by the Sellers pursuant to this Agreement. The
Purchaser confirms that it is registered for GST purposes, and will make its GST
registration number available to the Sellers upon request. The Purchaser further
confirms that it will self-assess and pay all GST, Ontario Retail Sales Tax and
British Columbia Social Services Tax resulting from the transactions
contemplated by this Agreement.

               (g)      Subject to arriving at definitive agreements as
contemplated by Exhibit I below, the Lynn Valley Owner and the Beacon Hill Owner
(as the same may be continued or merged in accordance with Section 5.7(b) above)
will not be dissolved in consequence of the transactions contemplated by this
Agreement and will continue to hold registered title to the Lynn Valley Facility
and the Beacon Hill Facility, respectively, notwithstanding the transfer of
beneficial ownership of such Facilities to Purchaser or its designee at the
Closing. Purchaser shall be solely responsible for the costs of maintaining the
corporate existence of the Lynn Valley Owner and the Beacon Hill Owner under
this Section 5.7(g). Sellers and Purchaser shall cooperate in effecting the
foregoing nominee arrangement, including without limitation the execution of
customary agreements to effect the arrangements and transaction steps listed on
Exhibit I.

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ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER TO CLOSE

     Purchaser’s obligations to close the transactions contemplated in this
Agreement and to acquire the Owned Assets (including the Facilities) pursuant to
the terms of this Agreement are subject to the satisfaction, on or prior to the
Closing Date or such earlier date specified, of each of the following
conditions, unless waived by Purchaser in writing:

     6.1      Accuracy of Representations and Warranties. The representations
and warranties of Sellers contained in this Agreement or in any other Document
shall be true and correct in all material respects on the date hereof, and at
the Closing Date with same effect as though made at such time, except for
changes permitted hereunder.

     6.2      Delivery of Closing Documents. No later than five (5) business
days prior to the Closing Date, Sellers shall have delivered, or caused to be
delivered, each of the documents required to be delivered pursuant to
Section 8.3.

ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO CLOSE

     The obligations of Sellers to close the transactions contemplated in this
Agreement and to transfer the Owned Assets (including the Facilities) pursuant
to the terms of this Agreement are subject to the satisfaction, on or prior to
the Closing Date, or such earlier date specified, of each of the following
conditions, unless waived by Sellers in writing:

     7.1      Accuracy of Representations and Warranties. The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects on the date hereof, and at the Closing Date
with the same effect as though made at such time, except for changes permitted
hereunder.

     7.2      Delivery of Closing Documents. No later than five (5) business
days prior to the Closing Date, Purchaser shall have delivered, or caused to be
delivered, each of the documents required to be delivered pursuant to
Section 8.2.

ARTICLE VIII
CLOSING

     8.1      Time and Place. Closing of the purchase of the Owned Assets
(including the Facilities) pursuant to this Agreement (the “Closing”) shall take
place at such location within Toronto, Ontario, as Sunrise may designate in the
Closing Notice on or before the earlier of (x) the IPO Closing, (y) December 31,
2004, or (z) such earlier date as may be specified in the Closing Notice (the
“Closing Date”). Time is of the essence of the terms of this Section.

     8.2      Documents to be Delivered to Sellers by Sunrise. No later than
five (5) business days prior to the Closing Date, Purchaser shall deliver or
cause to be delivered to Sellers (or to

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Escrow Agent for delivery to Sellers at the Closing) the following, duly
executed and acknowledged, where applicable, and in each case in form and
substance reasonably satisfactory to Sellers or in the form attached hereto as
an Exhibit:

               (a)      Governmental certificates, dated as of a date as near as
practicable to the date of their delivery, showing that Sunrise is in good
standing in its jurisdiction of organization.

               (b)      A certificate of the Secretary or Assistant Secretary of
Sunrise attesting as to the incumbency of each officer who executes this
Agreement and any of the other Documents, certifying that resolutions and
consents necessary for Sunrise to act in accordance with the terms of this
Agreement have been adopted or obtained (with copies thereof attached) and to
similar customary matters.

               (c)      Such additional information and materials as Sellers
shall have reasonably requested to evidence the satisfaction of the conditions
to Purchaser’s obligations hereunder, including without limitation, evidence
that all consents and approvals required under, and subject to the
qualifications of, this Agreement as a condition to Seller’s obligation to close
hereunder have been obtained.

               (d)      The As-Is Certificate of Sunrise in the form attached
hereto as Exhibit B.

               (e)      Closing Statement. The Closing Statement in the form
attached hereto as Exhibit C (the “Closing Statement”).

               (f)      Assignment Agreements. Assignment and assumption
agreements in the forms attached hereto as Exhibit D (collectively, the
“Assignment Agreements”), executed by Purchaser.

     8.3      Deliveries to Sunrise by Sellers. No later than five (5) business
days prior to the Closing Date, Sellers deliver or cause to be delivered to
Sunrise (or to Escrow Agent for delivery to Sunrise at the Closing), the
following, duly executed and acknowledged, where applicable, and in each case in
form and substance reasonably satisfactory to Sunrise or such other party or in
the form attached hereto as an Exhibit:

               (a)      Deeds conveying fee title to each of the Facilities in,
executed by the Facility Owners named therein in the form attached hereto as
Exhibit F, subject to the implementation of the penultimate sentence of
Section 5.7(g) regarding title holding as nominees.

               (b)      Bills of Sale as to all Personal Property in the form
attached hereto as Exhibit E, executed by the Facility Owners and the Facility
Operators.

               (c)      The Assignment Agreements, executed by the applicable
Facility Owners and the Facility Operators.

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               (d)     Governmental certificates from a governmental authority
in the Province of New Brunswick, being the jurisdiction of formation of the
Facility Operators, dated as of a date as near as practicable to the date of
their delivery, showing that the Facility Operators are duly incorporated, are
not dissolved and have filed their Annual Reports and paid their filing fees to
date or that no Annual Report or filing fee is due until a date subsequent to
the date of such certificate. Governmental Certificates, dated as of a date as
near as practicable to the date of their delivery, showing that the Facility
Owners are duly organized and in good standing in their respective jurisdictions
of formation, or such reasonably equivalent “good standing certificates” as are
commonly made available for Jersey limited companies.

               (e)     A certificate of the Secretary or Assistant Secretary of
each of the Sellers attesting as to the incumbency of each officer of Sellers
who executes this Agreement and any of the other Documents and to similar
customary matters.

               (f)     Terminations (or assignments, at Purchaser’s option) of
the Operating Leases executed by Facility Owners and Facility Operators.

               (g)     Such additional information, assignments, conveyances and
materials as Purchaser shall have reasonably requested to evidence the
satisfaction of the conditions to its obligations hereunder, including, without
limitation, any (i) resignations of officers, directors or partners from
Facility Owners and Facility Operators or any other entities, and (ii) removal
of signatories on bank accounts or other financial accounts.

               (h)     The Closing Statement.

     8.4     Purchase Price. On or before the Closing Date, provided that all
conditions precedent to closing have been satisfied or otherwise waived, Sunrise
(or an Affiliate) shall deposit the Purchase Price, less the amount of the
Deposit, with the Title Company or Escrow Agent or other settlement agent for
payment on the Closing Date to Sellers (and with respect to the Payoff Amount
component of the Purchase Price, to relevant lenders).

     8.5     Closing Costs. Purchaser shall pay its attorneys’ fees and
expenses. Irrespective of whether the transactions contemplated by this
Agreement are consummated (other than in the case of a termination of this
Agreement by Purchaser due to Sellers’ default pursuant to Section 10.2(b) or
Section 10.6 hereof), Purchaser shall also pay SALH an amount equal to
CAN$850,000 in respect of the fees and expenses incurred by Sellers in
connection with the structuring of the transactions contemplated hereby, the
preparation and delivery of this Agreement and the Documents and the
consummation of the transactions contemplated hereby (such amount to be
disbursed by SALH as it sees fit). The foregoing CAN$850,000 payment will be
reduced by payments made by Purchaser at Sellers’ request prior to the Closing
Date (including such payments made prior to the date of this Agreement). All
costs of the Title Insurer to insure title, and the cost of owner’s title
insurance policies, all GST, county or state transfer or recording taxes, if
any, and costs associated with licensing or removing or satisfying any of the
Transfer Restrictions will be paid by Purchaser.

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     8.6     SALH Wind-Up and Dissolution. Notwithstanding anything set forth in
this agreement to the contrary, SALH shall be responsible for the out-of-pocket
costs of winding up and dissolution of SALH, the Facility Owners and the
Facility Operators (and their respective successors) in accordance with the
terms of the constituent documents of SALH.

     8.7     Withdrawal of SSLII from SALH. Purchaser’s Affiliate, Sunrise
Senior Living Investments, Inc., a Virginia corporation (“SSLII”), is the
General Partner and the sole Class C Limited Partner in SALH. The general and
limited partnership Interests in SALH held by SSLII are hereinafter referred to
as the “SSLII Interests.” Immediately following Closing, Purchaser shall cause
the withdrawal of SSLII from SALH and the assignment of the SSLII Interests, for
no additional consideration, by SSLII to an Affiliate of Sellers designated by
Sellers, pursuant to an Assignment and Withdrawal Agreement in the form attached
hereto as Exhibit H. Following such assignment and withdrawal, SSLII shall have
no further rights or obligations under the partnership agreement and other
constituent documents of SALH, its being understood and acknowledged that the
foregoing withdrawal and release of SSLII shall not limit or otherwise affect
the rights and obligations of Purchaser under this Agreement, including without
limitation Purchaser’s obligation to cooperate in the wind-up and dissolution of
SALH and to provide post-Closing accounting services to SALH in accordance with
Section 5.7. Promptly following the assignment of the SSLII Interest and the
withdrawal of SSLII from SALH, SLH shall file and prosecute in Delaware (and any
other appropriate jurisdiction) a partnership name change to remove the
reference to “Sunrise Assisted Living” from SALH’s corporate and trade names.

ARTICLE IX
INDEMNIFICATION

     9.1     Survival. All representations, warranties, covenants and agreements
in this Agreement or any other Document will survive the Closing for a period of
one (1) year, except that the covenants set forth in Section 5.7 will extend
until sixty (60) days after the expiration of the applicable statute of
limitations. Except as expressly set forth in Article X, the rights to
indemnification set forth in this Article IX shall be exclusive of all other
rights to monetary damages that any party (or the party’s successors or assigns)
would otherwise have by statute or common law in connection with the
transactions contemplated by this Agreement or any other Document.

     9.2     Indemnification by Sunrise. Sunrise will indemnify, defend, and
hold harmless Sellers and their respective officers, directors, employees,
Affiliates, successors and assigns from and against, and pay or reimburse each
of them for and with respect to, any Loss relating to, arising out of or
resulting from any of the following:

               (a)     Any breach by Sunrise of any of its representations,
warranties, covenants or agreements in this Agreement or any other Document; or

               (b)     The operation of the Facilities after the Cut-Off Time,
including without limitation any of the Assumed Liabilities or any Taxes
relating to the Owned Assets after the Cut-Off Time.

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     9.3     Indemnification by Sellers. Sellers shall indemnify and hold
harmless Purchaser and its officers, directors, employees, agents,
representatives, Affiliates, successors and assigns from and against, and pay or
reimburse each of them for and with respect to any Loss relating to, arising out
of or resulting from any breach by Sellers of any of their representations,
warranties, covenants or agreements in this Agreement or any other Document.

     9.4     Administration of Indemnification. For purposes of administering
the indemnification provisions set forth in Sections 9.2 and 9.3 the following
procedure shall apply:

               (a)     Whenever a claim shall arise for indemnification under
this Article, the party entitled to indemnification (the “Indemnified Party”)
shall reasonably promptly give written notice to the party from whom
indemnification is sought (the “Indemnifying Party”) setting forth in reasonable
detail, to the extent then available, the facts concerning the nature of such
claim and the basis upon which the Indemnified Party believes that it is
entitled to indemnification hereunder.

               (b)     In the event of any claim for indemnification resulting
from or in connection with any claim by a third party, the Indemnifying Party
shall be entitled, at its sole expense, either (i) to participate in defending
against such claim or (ii) to assume the entire defense with counsel which is
selected by it and which is reasonably satisfactory to the Indemnified Party
provided that (A) the Indemnifying Party agrees in writing that it does not and
will not contest its responsibility for indemnifying the Indemnified Party in
respect of such claim or proceeding and (B) no settlement shall be made and no
judgment consented to without the prior written consent of the Indemnified
Party, which shall not be unreasonably withheld. If, however, (i) the claim,
action, suit or proceeding would, if successful, result in the imposition of
damages for which the Indemnifying Party would not be solely responsible, or
(ii) representation of both parties by the same counsel would otherwise be
inappropriate due to actual or potential differing interests between them, then
the Indemnifying Party shall not be entitled to assume the entire defense and
each party shall be entitled to retain counsel who shall cooperate with one
another in defending against such claim. In the case of Clause (i) of the
preceding sentence, the Indemnifying Party shall be obligated to bear only that
portion of the expense of the Indemnified Party’s counsel that is in proportion
to the damages indemnifiable by the Indemnifying Party compared to the total
amount of the third-party claim against the Indemnified Party.

               (c)     If the Indemnifying Party does not choose to defend
against a claim by a third party, the Indemnified Party may defend in such
manner as it deems appropriate or settle the claim (after giving notice thereof
to the Indemnifying Party) on such terms as the Indemnified Party may deem
appropriate, and the Indemnified Party shall be entitled to periodic
reimbursement of defense expenses incurred and prompt indemnification from the
Indemnifying Party in accordance with this Article.

               (d)     Failure or delay by an Indemnified Party to give a
reasonably prompt notice of any claim (if given prior to expiration of any
applicable survival period) shall not release, waive or otherwise affect an
Indemnifying Party’s obligations with respect to the claim, except to the extent
that the Indemnifying Party can demonstrate actual loss or prejudice as a result
of such failure or delay.

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               (e)     The provisions of this Section 9 shall survive the
Closing hereunder indefinitely (except to the extent a shorter period of time is
expressly indicated above).

ARTICLE X
DEFAULT AND TERMINATION

     10.1     Covenant to Close. Sunrise hereby covenants and agrees that
whether or not Sunrise REIT closes on an IPO, and whether or not Sunrise has
obtained the CRA Clearance described in Section 5.7(c), Sunrise shall be
obligated to close on the transactions contemplated by this Agreement, including
the purchase of the Facilities in accordance with the terms of this Agreement,
no later than December 31, 2004.

     10.2     Remedies upon Default.

               (a)     If, at any time prior to the Closing, Purchaser
materially defaults on any of its obligations hereunder, and such default
continues for ten (10) business days after written notice thereof specifying
such default, Sellers may, by serving notice in writing to Sunrise in the manner
provided in this Agreement, either:

  (i)   Terminate this Agreement and declare it null and void, in which event
the Escrow Agent will promptly deliver the Deposit to Sellers in accordance with
the Escrow Agreement, and Sellers will be entitled to pursue Purchaser for any
monetary damages in excess of the Deposit; or     (ii)   Consummate the
transactions contemplated by this Agreement in the same manner as if there had
been no such defaults without any increase in the Purchase Price; provided that
the foregoing shall not waive any right of the Sellers to indemnity for any such
defaults pursuant to Article IX.

From and after the Closing, the provisions of this Section 10.2(a) shall be
inapplicable and Sellers’ recourse shall be limited to the provisions of
Article IX.

               (b)     If, at any time prior to the Closing, any Seller
materially defaults on any of its obligations hereunder, and such default
continues for ten (10) business days after written notice thereof specifying
such default, Purchaser may, by serving notice in writing to Sellers in the
manner provided in this Agreement, either:

  (i)   Terminate this Agreement and declare it null and void, in which event
the Escrow Agent will promptly deliver the Deposit to Purchaser in accordance
with the Escrow Agreement, and Purchaser will be entitled to pursue Seller for
any monetary damages; or     (ii)   Consummate the transactions contemplated by
this Agreement in the same manner as if there had been no such defaults without
any reduction in the

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      Purchase Price; provided that the foregoing shall not waive any right of
Purchaser to indemnity for any such defaults pursuant to Article IX.

From and after the Closing, the provisions of this Section 10.2(b) shall be
inapplicable and Purchaser’s recourse shall be limited to the provisions of
Article IX.

     10.3     Specific Performance; Liquidated Damages.

               (a)     Sellers understand that, subject only to the satisfaction
of the conditions set forth in Article VII, the obligation to sell the Owned
Assets (including the Facilities) to Purchaser on the Closing Date is
unconditional, and that time is of the essence.

               (b)     If, notwithstanding the satisfaction of the conditions
set forth in Article VII, Sellers fail to consummate the transactions
contemplated by this Agreement as of the Closing Date, then, at Purchaser’s
option, either:

  (i)   Sellers specifically agree that Purchaser will be entitled to
enforcement of this Agreement by a decree of specific performance or injunctive
relief requiring Sellers to fulfill their obligations under this Agreement to
sell the Facilities to Purchaser or its designee; or     (ii)   Purchaser may,
by serving notice in writing to Sellers and Escrow Agent in the manner provided
in this Agreement, cause the Escrow Agent to return the Deposit to Purchaser,
and in addition recover liquidated damages from Sellers in the amount of Twenty
Million US Dollars (US$20,000,000), Sellers and Purchaser hereby acknowledging
and agreeing that the monetary damages which Purchaser would suffer as a result
of such default and termination would be difficult, if not impossible, to
determine and that the liquidated damages provided for herein are a fair and
reasonable estimation of such damages.

     10.4     Obligations Upon Termination. Upon termination of this Agreement,
each party shall thereafter remain liable for breach of this Agreement prior to
such termination. If this Agreement is terminated by mutual consent without any
breach by either party hereto, each of the parties shall be liable and
responsible for any costs incurred by it in connection with the transactions
contemplated by this Agreement.

     10.5     Termination Notice. Each notice given by a party to terminate this
Agreement shall specify the Section of Article X pursuant to which such notice
is given. If at the time a party gives a termination notice, such party is
entitled to give such notice pursuant to more than one Section of Article X, the
Section pursuant to which such notice is given and termination is effected shall
be deemed to be the section or sections specified in such notice provided that
the party giving such notice is at such time entitled to terminate this
Agreement pursuant to the specified section.

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     10.6     Notice of Breach; Sellers’ Right to Cure. If, prior to the
Closing, Purchaser obtains actual knowledge that any of Sellers’ Warranties is
untrue, inaccurate or incorrect in any material respect, Purchaser shall give
Sellers written notice thereof within five (5) business days of obtaining such
knowledge (but, in any event, prior to the Closing). If, prior to the Closing,
Sellers obtains actual knowledge that any of Purchaser’s Warranties are untrue,
inaccurate or incorrect in any material respect, Sellers shall give Purchaser
written notice thereof within five (5) business days of obtaining such knowledge
(but, in any event, prior to the Closing). In either such event, Sellers or
Purchaser, as the case may be (the “Breaching Party”), shall have the right to
cure such misrepresentation or breach and shall be entitled to an adjournment of
the Closing (not to extend beyond the IPO Closing or December 31, 2004,
whichever is earlier) for the purpose of such cure. If the Breaching Party is
unable to so cure any misrepresentation or breach, then Purchaser or Sellers, as
the case may be (the “Non-Breaching Party”), as its sole remedy for any and all
such materially untrue, inaccurate or incorrect material representations or
warranties, shall elect either (a) to waive such misrepresentations or breaches
of representations and warranties by the Breaching Party and consummate the
purchase and sale of the Owned Assets (including the Facilities), without any
reduction of or credit against the Purchase Price, or (b) to terminate this
Agreement by written notice given to the Breaching Party, whereupon (1) this
Agreement shall be terminated and (2) the Non-Breaching Party shall be entitled
to pursue the Breaching Party for any monetary damages.

     10.7     Limitation on Sellers’ Liability. Anything in this Agreement to
the contrary notwithstanding, the maximum aggregate liability of Sellers for
breaches of Sellers’ Warranties shall be limited to Twenty Million US Dollars
(US$20,000,000). Notwithstanding the foregoing, however, if the Closing occurs,
Purchaser hereby expressly waives, relinquishes and releases any right or remedy
available to it at law, in equity, under this Agreement or otherwise to make a
claim against Sellers for damages that Purchaser may incur, or to rescind this
Agreement, as the result of any of Sellers’ Warranties being untrue, inaccurate
or incorrect if: (a) Purchaser knew or is deemed to know that such
representation or warranty was untrue, inaccurate or incorrect at the time of
the Closing, or (b) Purchaser’s damages as a result of such representations or
warranties being untrue, inaccurate or incorrect are reasonably estimated to
aggregate less than US$500,000.00.

ARTICLE XI
MISCELLANEOUS

     11.1     Notices. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
courier (including overnight delivery service) or sent by registered or
certified mail, first class, postage prepaid, addressed as follows:

               (a)     If to Sellers, to:

Sprout Group
One Madison Avenue, 7th Floor
New York, NY 10010
Attn: Janet Hickey

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and to:

DLJ Real Estate Capital Partners
Eleven Madison Avenue, 16th Floor
New York, NY 10010
Attn: Steven Carter

with a copy to:

Michael Flynn, Esq.
Sonnenschein Nath & Rosenthal LLP
1221 Avenue of the Americas
New York, New York 10020

and to:

Sunrise Senior Living Investments, Inc.
c/o Sunrise Senior Living, Inc.
7902 Westpark Drive
McLean, Virginia 22102
Attention: John Gaul, General Counsel

with a copy to:

Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102

               (b) If to Sunrise REIT, to:

Sunrise Senior Living Real Estate Investment Trust
7900 Westpark Drive, Seventh Floor
McLean, Virginia 22102
Attention: Douglas MacLatchy

with a copy to:

Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102

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               (c)     If to Sunrise:

Sunrise Senior Living, Inc.
7902 Westpark Drive
McLean, Virginia 22102
Attention: John Gaul, General Counsel

with a copy to:

Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102

               (d)     If to Title Insurer, to:

First Canadian Title Insurance Company
2235 Sheridan Garden Drive
Oakville, ON L6J 7Y5
Attention: Mr. Paul Miron

               (e)     If to Escrow Agent, to:

Torys, LLP
79 Wellington Street West
Suite 3000, TD Center
Box 270
Toronto, ON M5K 1N2
Attention: Paul M. Kennedy, Esq.

or such other address as a party may from time to time notify the other party in
writing (as provided above). Any such notice, demand or communication shall be
deemed to have been given (i) if so mailed, as of the close of the third
business day following the date so mailed, and (ii) if delivered by courier, on
the date received.

     11.2     Entire Agreement. This Agreement (which is confirmed to include
all the Exhibits hereto) and the other Documents constitute the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersede any prior negotiations, agreements, understandings or arrangements
between the parties hereto with respect to the subject matter hereof.

     11.3     Binding Effect; Benefits. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Except to the
extent specified herein, nothing in this Agreement, express or implied, shall
confer on any person other than the parties hereto and their respective

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successors or permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.

     11.4     Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by either party without the
prior written consent of the other party, provided that Sunrise may assign all
of its rights under this Agreement to an Affiliate or to Sunrise REIT or an
entity controlled, directly or indirectly, by Sunrise REIT, provided that
(i) the representations and warranties of Sunrise hereunder shall be true and
correct in all material respects as applied to the assignee, (ii) Sunrise shall
execute and deliver to Sellers a written instrument in form and substance
satisfactory to Sellers within their reasonable judgment in which Sunrise agrees
to continue to be liable for performance of all of Sunrise’s obligations so to
be assigned under this Agreement, and (iii) Sunrise and the assignee shall
deliver such other documents and instruments as reasonably requested by Sellers,
including appropriate certified resolutions of the boards of directors of
Sunrise and the assignee. Sellers acknowledge and agree that Sunrise (or its
assignee) may designate that the Facilities be sold on the Closing Date to one
or more designees without such designees actually being assignees of this
Agreement or assuming any obligations of Sunrise hereunder.

     11.5     Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Delaware without
regard to its principles of conflicts of laws, provided, however, that, in the
event Purchaser or Sellers breach this agreement and such breach relates to a
particular Facility, neither Purchaser nor Sellers shall be precluded from
exercising any rights or remedies which it may have under the laws of the
jurisdiction in which such Facility is located.

     11.6     Amendments and Waivers. No term or provision of this Agreement may
be amended, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against whom the enforcement of such amendment,
waiver, discharge or termination is sought. Any waiver shall be effective only
in accordance with its express terms and conditions.

     11.7     Severability. Any provision of this Agreement which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such unenforceability without invalidating the remaining
provisions hereof, and any such unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto hereby waive any
provision of law now or hereafter in effect which renders any provision hereof
unenforceable in any respect.

     11.8     Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

     11.9     Counterparts. This Agreement may be executed in any number of
counterparts, and by any party on separate counterparts, each of which shall be
an original, and all of which together shall constitute one and the same
instrument.

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     11.10     References. All references in this Agreement to Articles and
Sections are to Articles and Sections contained in this Agreement unless a
different document is expressly specified.

     11.11     Exhibits. Unless otherwise specified herein, each Exhibit
referred to in this Agreement is attached hereto, and each such Exhibit is
hereby incorporated by reference and made a part hereof as if fully set forth
herein.

     11.12     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.

     11.13     Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN
ANY PROCEEDINGS BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THE TRANSACTION, THIS AGREEMENT, THE
PROPERTY OR THE RELATIONSHIP OF SELLERS AND PURCHASER HEREUNDER. THE PROVISIONS
OF THIS SECTION SHALL SURVIVE THE CLOSING (AND NOT BE MERGED THEREIN) OR ANY
EARLIER TERMINATION OF THIS AGREEMENT.

     11.14     Facsimile Signatures. Signatures to this Agreement transmitted by
telecopy shall be valid and effective to bind the party so signing. Each party
agrees to promptly deliver an execution original to this Agreement with its
actual signature to the other party, but a failure to do so shall not affect the
enforceability of this Agreement, it being expressly agreed that each party to
this Agreement shall be bound by its own telecopied signature and shall accept
the telecopied signature of the other party to this Agreement.

[SIGNATURE PAGES FOLLOW]

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     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above.

     

  PURCHASER:
 
   

  SUNRISE SENIOR LIVING, INC.,
a Delaware corporation
 
   

  By:      /s/ Thomas B. Newell     
Name:      Thomas B. Newell     
Title:       President                      

        

      

 

[ADDITIONAL SIGNATURE PAGES FOLLOW]

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  SELLERS:
 
   

  SUNRISE OF LYNN VALLEY LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  SUNRISE OF BEACON HILL LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  SUNRISE OF MISSISSAUGA LIMITED
 
   

  By:       /s/ Thomas M. Moak           
Name:       Thomas M. Moak           
Title:       Chief Executive Officer   
 
   

  SUNRISE OF MARKHAM LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   

 

[ADDITIONAL SIGNATURE PAGES FOLLOW]

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  SUNRISE OF WINDSOR LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  SUNRISE OF RICHMOND HILL LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  SUNRISE OF OAKVILLE LIMITED
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  S.A.L. OPERATIONS B.H. INC.
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:      Chief Executive Officer   
 
   

  S.A.L. OPERATIONS (CANADA) INC.
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   
 
   

  S.A.L. OPERATIONS B.N.S. INC.
 
   

  By:       /s/ Thomas M. Moak          
Name:       Thomas M. Moak          
Title:       Chief Executive Officer   

 

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EXHIBIT LIST

                      Exhibit A   Municipal Addresses and Legal Description    
 
                            Lynn Valley Facility         Beacon Hill Facility  
      Mississauga Facility         Markham Facility         Windsor Facility    
    Richmond Hill Facility         Oakville Facility
 
                    Exhibit B   Form of Sunrise’s As-Is Certificate    
 
                    Exhibit C   Form of Closing Statement    
 
                    Exhibit D   Form of Assignment Agreements    
 
                            D-1      Assignment of Contracts and Assumption of
Contracts         D-2      Assignment of Landlords’ Interest in Leases        
D-3      Assignment of Tenants’ Interest in Leases
 
                    Exhibit E   Form of Bill of Sale    
 
                    Exhibit F   Forms of Deed    
 
                            F-1      Lynn Valley Facility         F-2
     Beacon Hill Facility         F-3      Mississauga Facility         F-4
     Markham Facility         F-5      Windsor Facility         F-6
     Richmond Hill Facility         F-7      Oakville Facility
 
                    Exhibit G   Transaction Timeline    
 
                    Exhibit H   Assignment and Withdrawal Agreement    
 
                    Exhibit I   Agreements Regarding Nominees    

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EXHIBIT A
TO
PURCHASE AND
SALE AGREEMENT

Municipal Address and Legal Description

                 
British Columbia
                               
Facility
    Municipal Address     Legal Description                  
Beacon Hill
    920 Humboldt Street
Victoria, BC     Lot A, of Lots 338, 339, 340, 341, 342, 343,
1231, 1232, 1233 and 1234, Victoria City, Plan 27547
Except Part in Plan 42102    
 
                             
Lynn Valley
    940 Lynn Valley Road
North Vancouver, BC     Lot 3, Block 13, District Lot 2025, Group 1,
New Westminster District, Plan LMP47707    
 
               

          

                       
Ontario
                                           
Facility
    Municipal Address     PIN     Legal Description                        
Markham
    38 Swansea Road
Unionville, ON     02964-0011 (LT)     Parcel 127-1, Section 65M2520
being Block 127 on Plan 65M2520, Town of Markham    

          02964-0008 (LT)     Part of Lot 10, Concession 6,
Town of Markham as described in R638202    

          02964-0009 (LT)     Part of Lot 10, Concession 6,
Town of Markham as described in MA98105    

          02964-0010 (LT)     Part of Lot 10, Concession 6,
Town of Markham as described in MA41774    
 
                                         
Mississauga
    1273 & 1279
Burnhamthorpe
Road East
Mississauga, ON     13307-0326 (LT)     Part of Lots 44 & 45, Plan 381,
designated as Part 5 on Plan 43R-23740,
City of Mississauga    

          13307-0322 (LT)     Part of Lots 45, 46 & 47, Plan 381,
designated as Part 4 on Plan 43R-23740,
City of Mississauga    

          13307-0320 (LT)     Part of Lot 48, Plan 381,
designated as Part 3 on Plan 43R-23740,
City of Mississauga    

A-1

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Ontario
                                         
  Facility
    Municipal Address     PIN     Legal Description                        
Oakville
    456 Trafalgar Road
Oakville, ON     24816-0097 (LT)     Part of Lots 13 & 14, Conc 3 south of
Dundas Street,
designated as Parts 6 & 7 on Plan 20R-13457, Town of Oakville    

          24816-0345 (LT)     Part of Blocks 117 & 118, Plan 62, designated as
Parts 5, 6 & 7 on Plan 20R-12743, Town of Oakville    

          24816-0099 (LT)     Part of Old Mill Road closed by By-law 2000-035,
designated as Parts 8, 9 & 10 on Plan 20R-13457, Town of Oakville              
         
Richmond Hill
    9800 Yonge Street
Richmond Hill, ON     03156-0501 (LT)     Block 3 on Plan 65M2368, save and
except Part 1 on
plan 65R-10347 and parts 2 & 3 on plan 65R-23458, Town of Richmond Hill        
               
Windsor
    5065 Riverside
Drive East
Windsor, ON     01086-0167 (LT)     Part of Lot 111, Conc 1 Sandwich East
designated as
Parts 1, 2 & 3 on Plan 12R-10366, City of
Windsor    

          01086-0172 (LT)     Part of Lot 111, Conc 1 Windsor designated as
Part 10 on Plan 12R-17731, City of Windsor    

 

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EXHIBIT B
TO
PURCHASE AND
SALE AGREEMENT

Form of Sunrise’s As-Is Certificate

Form of Purchaser’s As-Is Certificate and Agreement

PURCHASER’S AS-IS CERTIFICATE AND AGREEMENT

     THIS PURCHASER’S AS-IS CERTIFICATE AND AGREEMENT (this “Agreement”), is
made as of                             , 2004 by Sunrise Senior Living, Inc., a
Delaware corporation (“Sunrise or Purchaser”) to and for the benefit of
                                      (“Seller”).

RECITALS

     WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement,
dated as of                             , 2004, by and among Purchaser and
certain Sellers specified therein, Sunrise Senior Living, Inc., a Delaware
corporation (“Sunrise”), (the “Purchase Agreement”), Sellers agreed to sell to
Purchaser, inter alia, the Owned Assets, as more particularly described in the
Purchase Agreement. Initially capitalized terms not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Purchase
Agreement; and

     WHEREAS, the Purchase Agreement requires, inter alia, that, as a condition
precedent to Sellers’ obligations under the Purchase Agreement, Purchaser shall
execute and deliver this Agreement to Seller at Closing.

     NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Purchaser hereby certifies and agrees as follows:

     1. For purposes of this Agreement, the following terms shall have the
following meanings:

     “Purchaser’s Representatives” shall mean Purchaser and Sunrise REIT, as
well as any direct or indirect owner of any beneficial interest in Purchaser or
Sunrise REIT, and any officers, directors, employees, agents, representatives
and attorneys of Purchaser or Sunrise REIT, or any such direct or indirect owner
of any beneficial interest (but only those officers, directors, employees,
agents, representatives and attorneys that are engaged in the Due Diligence for
or other services in connection with the transactions contemplated by the
Purchase Agreement).

     “deemed to know” (or words of similar import) shall have the following
meaning:

  (a)   Purchaser shall be “deemed to know” of the existence of a fact or
circumstance to the extent that:

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  (i)   any Purchaser’s Representative knows of such fact or circumstance, or  
  (ii)   such fact or circumstance is disclosed by the Purchase Agreement, any
documents executed by Seller for the benefit of Purchaser in connection with the
Closing, or any Documents actually delivered to Purchaser.

  (b)   Purchaser shall be “deemed to know” that any Sellers’ Warranty is
untrue, inaccurate or incorrect to the extent that:

  (i)   any Purchaser’s Representative has actual, conscious knowledge of
information which is inconsistent with such Sellers’ Warranty, or     (ii)   the
Purchase Agreement, any documents executed by Sellers for the benefit of
Purchaser in connection with the Closing, or any Documents actually delivered to
Purchaser contains information which is inconsistent with such Sellers’
Warranty.

     “Documents” shall mean the documents and instruments applicable to the
Facilities or any portion thereof that Seller or any of the other Seller Parties
deliver or make available to Purchaser or Purchaser’ Representatives prior to
Closing or which are in the possession of or otherwise obtained by Purchaser or
Purchaser’s Representatives prior to Closing.

     “Due Diligence” shall mean examinations, inspections, investigations,
tests, studies, analyses, appraisals, evaluations and/or investigations with
respect to the Owned Assets, the Documents, and other information and documents
regarding the Owned Assets, including, without limitation, examination and
review of title matters, applicable land use and zoning laws and other laws
applicable to the Owned Assets, the physical condition of the Owned Assets, and
the economic status of the Owned Assets.

     “Hazardous Materials” shall mean any substance, chemical, waste or material
that is or becomes regulated by any federal, state or local governmental
authority because of its toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including, without limitation,
methane and other landfill gasses, asbestos or any substance containing more
than 0.1 percent asbestos, the group of compounds known as polychlorinated
biphenyls, flammable explosives, oil, petroleum or any refined petroleum
product.

     “Liabilities” shall mean, collectively, any and all problems, conditions,
losses, costs, damages, claims, liabilities, expenses, demands or obligations of
any kind or nature whatsoever.

     “Property Documents” shall mean, collectively, (a) leases, (b) contracts,
and (c) any other documents or instruments which constitute, evidence or create
any portion of the Real Property.

     “Seller Parties” shall mean and include, collectively, (a) Sellers;
(b) their counsel; (c) any direct or indirect owner of any beneficial interest
in Sellers; (d) any officer, director, employee, or agent of Sellers, their
counsel, or any direct or indirect owner of any beneficial interest in

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Sellers; and (e) any other entity or individual affiliated or related in any way
to any of the foregoing.

     “Sellers’ Warranties” shall mean Sellers’ representations and warranties
set forth in (a) the Purchase Agreement and (b) any documents executed by Seller
for the benefit of Purchaser in connection with the Closing, as the same may be
deemed modified or waived by Purchaser pursuant to the terms of the Purchase
Agreement.

     2. Purchaser acknowledges and agrees that, prior to the date hereof (the
date of Closing under the Purchase Agreement): (a) without limiting any rights
or remedies that Purchaser may have against Sellers as a result of a breach of
any of Sellers’ Warranties, Purchaser had access to, the Facilities and all
books, records and files of the Manager of the Facilities; (b) Purchaser has
conducted (or has waived its right to conduct) all Due Diligence (including Due
Diligence with respect to Hazardous Materials) as Purchaser considered necessary
or appropriate; (c) Purchaser has reviewed, examined, evaluated and verified the
results of its Due Diligence to the extent it deems necessary or appropriate
with the assistance of such experts as Purchaser deemed appropriate; (d)
Purchaser has determined to its satisfaction the assignability of any Documents
to be assigned as part of the transactions contemplated in the Purchase
Agreement; and (e) except for, and only to the extent of, Sellers’ Warranties,
is acquiring the Interests based exclusively upon its own Due Diligence and its
awareness of the conditions of the Owned Assets and of the status of all of the
operations of the Facilities.

     3. Purchaser acknowledges and agrees that, except for, and only to the
extent of, Sellers’ Warranties:

  (a)   The Facilities are being sold, and Purchaser is accepting possession of
the Facilities on the date hereof, “AS IS, WHERE IS, WITH ALL FAULTS”, with no
right of setoff or reduction in the Purchase Price.     (b)   None of the Seller
Parties have or shall be deemed to have made any verbal or written
representations, warranties, promises or guarantees (whether express, implied,
statutory or otherwise) to Purchaser with respect to the Owned Assets, their
value, any matter set forth, contained or addressed in the Documents (including,
but not limited to, the accuracy and completeness thereof) or the results of
Purchaser’s Due Diligence.     (c)   Purchaser has confirmed independently all
information that it considers material to its purchase of the Owned Assets.    
(d)   Purchaser is not relying on (and Sellers and each of the other Seller
Parties does hereby disclaim and renounce) any representations or warranties of
any kind or nature whatsoever, whether oral or written, express, implied,
statutory or otherwise, from Sellers or any other Seller Parties, as to:

  (i)   the operation or performance of the Owned Assets, the income potential,
economic status, uses, or the merchantability, habitability or fitness of any

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      portion of the Owned Assets for a particular purpose;     (ii)   the
physical condition of the Real Property or the condition or safety of the
Facilities or any component thereof, including, but not limited to, plumbing,
sewer, heating, ventilating and electrical systems, roofing, air conditioning,
foundations, soils and geology, including Hazardous Materials, lot size, or
suitability of the Facilities or any component thereof for a particular purpose;
    (iii)   the presence or absence, location or scope of any Hazardous
Materials in, at, about or under the Real Property;     (iv)   whether the
appliances, if any, plumbing or utilities are in working order;     (v)   the
habitability or suitability for occupancy of any structure and the quality of
its construction;     (vi)   whether the improvements are structurally sound, in
good condition, or in compliance with applicable Laws;     (vii)   the accuracy
of any statements, calculations or conditions stated or set forth in the
Documents, other books and records concerning the Owned Assets, or any of
Sellers’ offering materials with respect to the foregoing;     (viii)   the
dimensions of the Facilities or the accuracy of any floor plans, square footage,
lease abstracts, sketches, or revenue or expense projections related to the
Facilities;     (ix)   the locale of the Facilities, the leasing market for the
Facilities, or the market assumptions Purchaser utilized in its analysis of the
Facilities and determination of the value of the Facilities and the Purchase
Price (such as rental rates, leasing costs, vacancy and absorption rates, land
values, replacement costs, maintenance and operating costs, financing costs,
etc.);     (x)   whether the Facilities are or would likely constitute a target
of terrorist activity or other acts of war;     (xi)   the ability of Purchaser
to obtain any and all necessary governmental approvals or permits for
Purchaser’s intended use and development of the Real Estate and the Facilities;
    (xii)   the leasing status of the Facilities or the intentions of any
parties with respect to the negotiation and/or execution of any lease for any
portion of the Property; and     (xiii)   Sellers’ ownership of any portion of
the Owned Assets.

B-4

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     (e)      Except as set forth in the Purchase Agreement, Sellers are under
no duty to make any affirmative disclosures or inquiry regarding any matter
which may or may not be known to either Seller or any of the other Seller
Parties, and Purchaser, for itself and for its successors and assigns, hereby
specifically waives and releases Sellers and each of the other Seller Parties
from any such duty that otherwise might exist.

     4.      Without limiting any rights or remedies that Purchaser may have
against Sellers as a result of a breach of any of Sellers’ Warranties, any
repairs or work required by Purchaser are the sole responsibility of Purchaser,
and Purchaser agrees that there is no obligation on the part of Seller to make
any changes, alterations or repairs to the Real Property or the Facilities,
including, without limitation, to cure any violations of Law, comply with the
requirements of any insurer or otherwise. Purchaser is solely responsible for
obtaining any certificate of occupancy or any other approval or permit necessary
for the transfer or occupancy of the Real Property and the Facilities and for
any repairs or alterations necessary to obtain the same, all at Purchaser’s sole
cost and expense.

     5.      Without limiting any rights or remedies that Purchaser may have
against Seller as a result of a breach of any of Sellers’ Warranties and except
as expressly provided hereinbelow in this Section 5, Purchaser, for Purchaser
and Purchaser’s successors and assigns, hereby releases Sellers and each of the
other Seller Parties from, and waives any and all Liabilities against Sellers
and each of the other Seller Parties for or attributable to or in connection
with the Owned Assets, whether arising or accruing before, on or after the date
hereof and whether attributable to events or circumstances which have heretofore
or may hereafter occur, including, without limitation, the following:

               (a)      any and all statements or opinions heretofore or
hereafter made, or information furnished, by the Seller Parties to Purchaser or
any of Purchaser’s Representatives;

               (b)      any and all Liabilities with respect to the structural,
physical, or environmental condition of the Real Property or the Facilities;

               (c)      any and all Liabilities relating to the release of or
the presence, discovery or removal of any Hazardous Materials in, at, about or
under the Real Property, or for, connected with or arising out of any and all
claims or causes of action based upon CERCLA (Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§9601 et seq., as
amended by SARA (Superfund Amendment and Reauthorization Act of 1986) and as may
be further amended from time to time), the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. §§6901 et seq., or any related claims or causes of action
or any other federal, state or municipal based statutory or regulatory causes of
action for environmental contamination at, in, about or under the Real Property;

               (d)      any and all tort claims made or brought with respect to
the Real Property, the Facilities or the use or operation thereof;

B-5

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               (e)      any implied or statutory warranties or guaranties of
fitness, merchantability or any other statutory or implied warranty or guaranty
of any kind or nature regarding or relating to any portion of the Owned Assets;
and

               (f)      any and all Liabilities relating to the condition or
status of the Facility Owners’ title to the Facilities.

Nothing contained in the covenants of this Agreement, including, but not limited
to, the release and waiver set forth in this Section 5 is intended or shall be
construed to affect or impair any rights or remedies that Purchaser may have
against Sellers as a result of a breach of any of Sellers’ Warranties; nor is
such release and waiver intended to, and such release and waiver shall not be
construed to, effect any contractual assumption of liability as to matters which
were are not expressly assumed by Purchaser in the documents executed by
Purchaser in connection with the transactions contemplated by the Purchase
Agreement.

     6.      Purchaser expressly understands and acknowledges that it is
possible that unknown Liabilities may exist with respect to the Facilities or be
otherwise included among the Assumed Liabilities and that Purchaser explicitly
took that possibility into account in determining and agreeing to buy the Owned
Assets and pay the Purchase Price, and that a portion of such consideration,
having been bargained for between parties with the knowledge of the possibility
of such unknown Liabilities has been given in exchange for a full accord and
satisfaction and discharge of all such Liabilities. Purchaser has also had all
information necessary to evaluate the value of the Owned Assets and their
respective marketability. Based on all such information and any other
information Purchaser has desired to obtain, Purchaser acknowledges that the
Purchase Price is a fair price for the Owned Assets.

     7.      Purchaser acknowledges and agrees that the provisions of this
Agreement were a material factor in Sellers’ agreement to sell the Owned Assets
and to accept the Purchase Price and, while Sellers have made the Documents
available to Purchaser and cooperated with Purchaser, Sellers are unwilling to
sell the Owned Assets unless Sellers and the other Seller Parties are expressly
released as set forth in Section 5.

     8.      This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

     9.      If any term or provision of this Agreement or the application
thereof to any persons or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.

     10.      This Agreement is in addition to and in no way replaces or is in
lieu of the covenants, representations and warranties set forth in the Purchase
Agreement, including but not limited to those in Section 2.4 thereof.

B-6

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          IN WITNESS WHEREOF, Purchaser has executed this Agreement as of the
date first set forth hereinabove.

            PURCHASER:

SUNRISE SENIOR LIVING, INC., a
Delaware corporation
      By:           Name:           Title:        

B-7

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EXHIBIT C
TO
PURCHASE AND
SALE AGREEMENT

Form of Closing Statement

 

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EXHIBIT D
TO
PURCHASE AND
SALE AGREEMENT

Forms of Assignment Agreements

     
D-1
  Assignment of Contracts and Assumption of Contracts
D-2
  Assignment of Landlord’s Interest in Leases
D-3
  Assignment of Tenants’ Interest in Leases

 

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EXHIBIT E
TO
PURCHASE AND
SALE AGREEMENT

Form of Bill of Sale

 

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EXHIBIT F
TO
PURCHASE AND
SALE AGREEMENT

Forms of Deed

     
F-1
F-2
F-3
F-4
F-5
F-6
F-7
  Lynn Valley Facility
Beacon Hill Facility
Mississauga Facility
Markham Facility
Windsor Facility
Richmond Hill Facility
Oakville Facility

 

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EXHIBIT G
TO
PURCHASE AND
SALE AGREEMENT

Transaction Timeline

 

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EXHIBIT H
TO
PURCHASE AND
SALE AGREEMENT

Assignment and Withdrawal Agreement

 

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EXHIBIT I
TO
PURCHASE AND
SALE AGREEMENT

Agreements Regarding Nominees