Exhibit 10.2

Execution Copy

MEMBERSHIP INTEREST PURCHASE AGREEMENT

CARE INVESTMENT TRUST INC. (“Seller”)

And

NHI-BICKFORD RE, LLC (“Buyer”)

relating to the purchase and sale of 100% of the Membership Interests

of

CARE YBE SUBSIDIARY LLC (“Company”)

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (“Agreement”), dated as of June 24,
2013 (the “Effective Date”), among CARE INVESTMENT TRUST INC., a Maryland
corporation (“Seller”), CARE YBE SUBSIDIARY LLC, a Delaware limited liability
company (“Company”), and NHI-BICKFORD RE, LLC, a Delaware limited liability
company (“Buyer”).

WHEREAS, Seller is the record and beneficial owner of all of the issued and
outstanding membership interests (“Membership Interests”) of the Company; and

WHEREAS, Seller desires to sell the Membership Interests to Buyer, and Buyer
desires to purchase the Membership Interests from Seller, upon the terms and
subject to the conditions set forth in this Agreement; and

WHEREAS, the Company is the owner of the real properties (“Properties” or “Real
Property”) described on Exhibit A attached hereto and made a part hereof and
certain furniture, fixtures and equipment associated therewith (“FFE”), and the
Properties (together with the FFE and the rental income derived from the
“Leases” described on Exhibit B attached hereto and made a part hereof) are the
only assets of the Company; and

WHEREAS, the Company is the borrower under certain loans (collectively, the
“Fannie Loans”) evidenced by (a) a $74,589,000 Multi-Family Note dated June 26,
2008, and (b) a $7,638,400 Multi-Family Note dated September 30, 2008
(collectively, the “Fannie Notes”) which Fannie Notes shall remain an obligation
of the Company following the Closing Date; provided however that consummation of
the transactions described in this Agreement requires the consent of Fannie Mae
(“Fannie”) to the Acquisition (defined below) and resulting change of ownership
of the Company, and each party’s obligation to close the transactions described
herein is expressly subject to the consent of Fannie prior to the Closing Date;
and

WHEREAS, after completion of the transaction described herein, Buyer shall be
the sole Member of the Company and shall own 100% of all Membership Interests in
the Company.

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The Definitions applicable to this Agreement are set forth on Exhibit C attached
hereto and made a part hereof.

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ARTICLE II

PURCHASE AND SALE

2.1. Purchase and Sale of the Membership Interests. Upon the terms and subject
to the conditions of this Agreement, at the Closing, Seller shall sell,
transfer, assign and convey to Buyer, and Buyer shall purchase from Seller, the
Membership Interests, free and clear of all Liens. The purchase and sale of the
Membership Interests is referred to in this Agreement as the “Acquisition”.

2.2. Seller Documents, Fannie Consent.

(a) Prior to Closing, Seller agrees to make available to Buyer all relevant
documents, books, records, agreements, and information relating to the Company
and/or the Properties that are in Seller’s possession or control and are
reasonably requested by Buyer for inspection, audit and review, including,
without limitation, the “Seller Documents” described on Schedule 2.2 hereof.

(b) In accordance with and pursuant to the requirements of the documents
evidencing, governing and securing the Fannie Loans (the “Fannie Loan
Documents”), Buyer intends to seek the consent of Fannie to the Acquisition with
the Fannie Loans remaining in place. Buyer shall have until September 30, 2013
(the “Fannie Consent Period”) to obtain and deliver to Seller evidence that
Fannie has consented to the Acquisition at Closing with the Fannie Loan
Documents remaining in effect under the terms and conditions of this Agreement
and the Fannie Loan Documents (the “Fannie Consent”). The Fannie Consent will be
evidenced by an Assumption and Release Agreement in form mutually agreed to by
Fannie, Buyer and Seller with respect to each of the Fannie Loans (collectively,
the “Loan Assumption Agreements”), which Loan Assumption Agreements must include
a release, from and after Closing, of all existing guarantors from any
obligations and liabilities under any and all non-recourse carveout guaranties,
environmental guaranties or other guaranties of any kind whatsoever executed by
such existing guarantors in favor of Fannie (“Releases”). Prior to the Effective
Date, Buyer has submitted formal applications to Fannie for the Fannie Consent
(including the Releases). From and after the Effective Date, Buyer shall
exercise commercially reasonable and diligent efforts to obtain such consents
and to negotiate and agree upon the form of the Loan Assumption Agreements, and
Seller agrees to cooperate with Buyer with respect to Buyer’s efforts to obtain
the Fannie Consent and to negotiate and agree upon the form of the Loan
Assumption Agreements (including the Releases), but Seller shall not be
obligated to spend money or incur any new liability or retain any existing
liability in order to facilitate Buyer’s efforts to obtain the Fannie Consent or
the Loan Assumption Agreements (including the Releases). Buyer shall keep Seller
reasonably advised as to the status of Buyer’s efforts to obtain the Fannie
Consent. Without limiting the foregoing, Buyer shall notify Seller on or before
June 20, 2013 if Buyer does not reasonably expect to obtain the Fannie Consent
prior to June 30, 2013. If, after the exercise of commercially reasonable and
diligent efforts, Buyer fails to obtain the Fannie Consent and/or if Buyer,
Seller and Fannie fail to agree upon and execute the Loan Assumption Agreements
within the Fannie Consent Period, then Buyer or Seller shall each be entitled to
terminate this Agreement by giving notice of termination to the other party at
any time prior to the date the Fannie Consent is obtained, whereupon the Deposit
(as hereinafter defined) shall be returned to Buyer, and neither party shall
have any further rights or obligations hereunder, except

 

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for those rights and obligations that are specifically identified as surviving
the termination of this Agreement. Buyer shall be responsible for all costs
associated with obtaining the Fannie Consent and the Loan Assumption Agreements
(including the Releases), including, but not limited to, any consent fee imposed
by Fannie and Fannie’s attorneys’ fees.

2.3. Closing Date. The closing of the Acquisition (the “Closing”) shall take
place by mail or in person at such location as may be mutually agreed upon by
Buyer and Seller, at 10:00 a.m. on the later to occur of (i) June 30, 2013, or
(ii) five (5) business days following the date Buyer, Seller and Fannie indicate
that they have agreed upon the form of the Loan Assumption Agreements and are
ready and willing to execute the same upon the satisfaction of all other
conditions to Closing set forth in Article VIII, unless another time, date
and/or place is agreed to in writing by the parties. The date upon which the
Closing occurs is herein referred to as the “Closing Date”.

2.4. Consideration. The Purchase Price shall be $122,750,000.00, subject to
allocations, credits and adjustments described herein. The Purchase Price shall
be paid as follows:

(a) Buyer shall receive a credit for the total outstanding balance of all
principal and accrued interest with respect to the Fannie Loans.

(b) If any Tenant shall have paid to the Company the rent due under such
Tenant’s Lease for the month in which the Closing occurs, then Buyer shall
receive a credit at Closing equal to the portion of such rent that is allocable
to the period from and after the Closing Date. If any Tenant shall not have paid
to the Company the rent due under such Tenant’s Lease for the month in which the
Closing occurs, then the Purchase Price shall be increased by an amount equal to
the portion of such rent that is allocable to the period preceding the Closing
Date.

(c) Buyer shall pay the balance of the Purchase Price by in cash by wire
transfer.

(d) Buyer has previously delivered to First American Title Insurance Company, as
escrow agent (“Escrow Agent”), an earnest money deposit in the amount of
$613,750.00 (“Deposit”) in connection with the March 14, 2013 letter of intent.
Seller agrees to instruct Escrow Agent to return the Deposit to Buyer at
Closing, unless Buyer elects to apply the same to the Purchase Price (in which
event Buyer shall instruct Escrow Agent to deliver the Deposit to Seller at
Closing). The parties have executed the April 2, 2013 escrow letter agreement
(“Escrow Agreement”) which is incorporated herein by reference.

(e) In the event the Company or Seller holds any security deposits or escrow
funds of the Tenant Parties pursuant to the terms of the Leases and such funds
are held by the Company or Seller in an account that is a part of the Excluded
Assets, then Seller shall transfer, or shall cause the Company to transfer, the
balance of such security deposits or escrow funds to an account designated by
Buyer at Closing. The foregoing provisions shall not apply to any security
deposits or escrow funds held by Fannie or any servicer or agent with respect to
the Fannie Loans.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES PERTAINING TO THE COMPANY

The Company and Seller, jointly and severally, represent and warrant to Buyer as
follows:

3.1. Organization of the Company; Authorization and Enforceability.

(a) The Company is a limited liability company duly formed, validly existing and
in good standing under the Laws of the jurisdiction of its formation. The
Company is qualified to do business, and is in good standing, in each
jurisdiction in which it is required by Law to be so qualified. The Company
possesses the full limited liability company power and authority to enter into
and perform its obligations under this Agreement and each Ancillary Agreement to
which it is a party. The Company possesses the full limited liability company
power and authority: (i) to own, hold and use its Assets in the manner in which
such Assets are currently owned, held and used by the Company and in the manner
in which the Company proposes to own, hold and use such Assets, and (ii) to
conduct the Company Activities as such business is currently being conducted and
as the Company proposes to conduct such Company Activities. The Company does not
engage in any businesses other than the Company Activities.

(b) The Company does not have any Subsidiaries and does not own any securities
of any corporation or any other interest in any Person. There is no other Person
that may be deemed to be a predecessor of the Company.

(c) Schedule 3.1(c) sets forth, for the Company: (i) its exact legal name;
(ii) its business form, jurisdiction and date of formation; (iii) its federal
employer identification number; (iv) its headquarters address, telephone number
and facsimile number; (v) its members, managers and officers, indicating all
current title(s) of each individual; (vi) its registered agent and/or office in
its jurisdiction of formation (if applicable); (vii) all foreign jurisdictions
in which it is qualified or registered to do business, the date it so qualified
or registered, and its registered agent and/or office in each such jurisdiction
(if applicable); (viii) all fictitious, assumed or other names of any type that
are registered or used by it or under which it has done business at any time
since such Company’s date of formation; and (ix) any name changes,
recapitalizations, mergers, reorganizations or similar events since its date of
formation.

(d) Accurate and complete copies of the Company’s Organizational Documents, each
as amended to date, have been delivered to Buyer.

3.2. Authority: Non-Contravention.

(a) The Company has the limited liability company right, power and authority to
enter into, execute, deliver and perform its obligations under this Agreement
and each document to be executed at or prior to Closing in connection with this
Agreement (“Ancillary Agreement(s)”) to which it is a party, and the execution,
delivery and performance of this Agreement and each Ancillary Agreement to which
it is a party and the consummation of the transactions contemplated hereby and
thereby by the Company have been duly authorized by all necessary action on the
part of the Company. Assuming due authorization, execution and delivery by
Buyer, this Agreement and each Ancillary Agreement to which the Company is a

 

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party constitute the legal, valid and binding agreements of the Company,
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other equitable
remedies.

(b) Neither the execution, delivery and performance of this Agreement or the
Ancillary Agreements to which the Company is a party nor the consummation or
performance of any of the transactions contemplated hereby or thereby by the
Company and Seller will,, directly or indirectly (with or without notice or
lapse of time or both): (i) contravene, conflict with or result in a violation
of (A) any of the Organizational Documents of the Company, or (B) any resolution
adopted by the members, board or any committees thereof of Company;
(ii) contravene, conflict with or result in a violation of, or give any
Governmental Entity or other Person the right to challenge any of the
transactions contemplated hereby or to exercise any remedy or obtain any relief
under, any Judgment to which the Company is subject, or to Seller’s Knowledge,
any Law to which the Company is subject; (iii) contravene, conflict with or
result in a violation of any of the terms or requirements of, or give any
Governmental Entity the right to revoke, withdraw, suspend, cancel, terminate or
modify, any Authorization that is held by the Company; (iv) contravene, conflict
with or result in a violation or breach of, or result in a default under, any
provision of, any Contract to which the Company is a party or by which it is
bound; or (v) based on actions or inaction of Seller or its Affiliates, result
in the imposition or creation of any Lien upon or with respect to any Asset
owned or used by the Company, except in each such case where such contravention,
conflict, violation, breach, default or Lien would not reasonably be expected to
have a material adverse effect upon the Company or the Company Activities or
impair the ability of the Company to perform its obligations under this
Agreement; provided, however, that notwithstanding the foregoing, Seller makes
no representations or warranties as to the effect of the execution, delivery and
performance of this Agreement or the Ancillary Agreements to which it is a party
and/or the consummation or performance of the transactions contemplated hereby
or thereby by the Company and Seller upon (i) any Authorizations held by the
Tenants, Subtenants, Managers or any of their respective Affiliates
(collectively, the “Tenant Parties”) or by the Company with respect to the
Properties, (ii) the operations conducted by Tenant Parties at or within the
Properties, or (iii) any Contracts to which the Tenant Parties are a party.

(c) Except with respect to the approval of Fannie as required by the Acquisition
and the resulting change of control of the Company and except with respect to
any filings that Seller may be required to make with the Securities and Exchange
Commission, neither Seller nor the Company is or will be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution and delivery of this Agreement or the Ancillary
Agreements to which it is a party or the consummation or performance of any of
the transactions contemplated hereby or thereby, except in each such case where
the failure to make any such filing, give any such notice or obtain any such
Consent would not reasonably be expected to have a material adverse effect upon
the Company or the Company Activities or impair materially the ability of the
Company to perform its obligations under this Agreement; provided, however, that
notwithstanding the foregoing, Seller makes no representations or warranties as
to whether any such filing, notice or Consent may be required in connection with
(i) any Authorizations held by the Tenant Parties or by the Company with respect
to the Properties, (ii) the operations conducted by Tenant Parties at or within
the Properties, or (iii) any Contracts to which the Tenant Parties are a party.

 

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3.3. Membership Interests. The Membership Interests are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights. All of the
Membership Interests were issued in compliance with all applicable Laws. There
are no outstanding options, warrants or other rights of any kind to acquire any
additional membership interests of the Company or securities convertible into or
exercisable or exchangeable for, or which otherwise confer on the holder thereof
any right to acquire, any additional membership interests of the Company, nor is
the Company committed to issue any such option, warrant, right or security.
There are no restrictions on the transfer of the Membership Interests of the
Company except as may be imposed by the Fannie Loan Documents and/or applicable
federal and state securities laws. The Company does not have, directly or
indirectly, any equity interest in or control of any other corporation, joint
venture, partnership, limited liability company or other entity.

3.4. Fannie Loans. The Company is currently the “Borrower” under the Fannie
Loans, and Company and Seller make the following representations and warranties
in connection therewith:

(a) Fannie is the lender to whom Company makes payments.

(b) There exists no default under the terms of the Notes and the Fannie Loans
that has been caused by any act or omission of Seller or the Company; provided,
however, that Seller makes no representations or warranties as to whether any
act or omission of the Tenant Parties may have caused a default under the Fannie
Loans or whether a default has occurred under the provisions of the Fannie Loan
Documents relating to the condition and maintenance of the Properties. The
Company has not received any written notice from Fannie claiming that a default
has occurred under the Fannie Loan Documents

(c) The current aggregate principal balance of the Notes as of May 31, 2013 is
$78,890,774.70. There are no delinquent interest amounts, penalties, expenses or
any similar charges as of such date with respect to the Fannie Loans.

(d) The Fannie Loans are not cross-collateralized or cross-defaulted with any
other debt owed by Seller (or its Affiliates) with Fannie; provided, however,
that the Fannie Loans may be cross-collateralized and/or cross-defaulted with
each other.

(e) Based solely upon recent statements received by the Company from Fannie or
its servicer, Schedule 3.4 sets forth true and accurate balances as of May 31,
2013 with respect to any escrow, deposits and accounts held by Fannie with
respect to the Fannie Loan for taxes, insurance, replacement reserves, and other
funds as per the Fannie Loan Documents.

3.5. Excluded Assets. Schedule 3.5 contains a true, complete and accurate list
of all of the Company’s “Excluded Assets” that shall be returned or distributed
to Seller at or prior to Closing and the Company shall no longer own such
Excluded Assets (e.g., bank accounts, other accounts, certificates of deposit,
marketable securities, other investments, safe deposit boxes, lock boxes and
safes).

 

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3.6. No Undisclosed Liabilities. To Seller’s Knowledge, the Company has no
significant liabilities, debts, obligations or commitments of any nature
whatsoever, absolute or contingent, accrued or unaccrued, secured or unsecured,
matured or unmatured or otherwise (“Liabilities”), except for the obligations of
the Company under the Fannie Loan Documents, the Leases and the Permitted
Encumbrances (the “Assumed Liabilities”). For purposes of this Agreement,
“Excluded Liabilities” shall mean any Liability incurred in or related to the
operation of the business of the Company or the Company Activities prior to the
Closing Date other than (i) the Assumed Liabilities, (ii) Liabilities incurred
in connection with, or by virtue of, the operations conducted by Tenant Parties
at or within the Properties, (iii) Liabilities incurred by virtue of the
Company’s ownership of the Properties, and (iv) any Contracts to which the
Tenant Parties are a party. Prior to the Closing Date, all Excluded Liabilities,
if any, shall be conveyed to Seller and the Company shall no longer have any
obligation with respect to any such Excluded Liability following the acquisition
of the Membership Interests by the Buyer.

3.7. Rents and Receivables. The Company has no rents, income or receivables
other than the rents contractually owed under the Leases.

3.8. Taxes. Except as otherwise set forth on Schedule 3.8:

(a) The Company has at all times during its existence been treated as a
disregarded entity for federal income Tax purposes.

(b) All Tax Returns required to have been filed by the Company have been duly
and timely filed (or, if due between the date hereof and the Closing Date, will
be duly and timely filed), and each such Tax Return correctly and completely
reflects the Company’s liability for Taxes and all other information required to
be reported thereon. All Taxes owed by the Company (whether or not shown on any
Tax Return) have been timely paid (or, if due between the date hereof and the
Closing Date, will be duly and timely paid). The Company has adequately provided
for in its books of account and related records, and has set aside sufficient
cash reserves to cover, liabilities for all current Taxes not yet due and
payable.

(c) There is no action or audit currently proposed, threatened or pending
against, or with respect to, the Company in respect of any Taxes. The Company is
not the beneficiary of any extension of time within which to file any Tax
Return, and the Company has not made any requests for such extensions. No claim
has ever been made in writing by a Taxing Authority in a jurisdiction in which
the Company did not file Tax Returns that the Company was required to file Tax
Returns in such jurisdiction. There are no Liens with respect to Taxes on any of
the Membership Interests of the Company or its Assets.

(d) The Company has withheld and timely paid all Taxes required to have been
withheld and paid by the Company and has complied with all information reporting
and backup withholding requirements, including maintenance of required records
with respect thereto.

(e) There is no dispute or claim by a Taxing Authority concerning any liability
for Taxes of the Company for which notice has been provided, or which is
asserted or threatened, or which is otherwise known to the Company. Schedule
3.8(e) (i) lists all state and

 

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local income Tax Returns filed by the Company for taxable periods ended on or
after the year ended 2010, (ii) indicates those Tax Returns that have been
audited, and (iii) indicates those Tax Returns that currently are the subject of
audit. The Company has not waived (or is subject to a waiver of) any statute of
limitations in respect of Taxes or has agreed to (or is subject to) any
extension of time with respect to a Tax assessment or deficiency. The Company
has not received any ruling from or entered into any closing agreement with any
Taxing Authority that would be binding on Buyer.

(f) Seller is not a “foreign person” within the meaning of Section 1445 of the
Code.

3.9. Compliance with Law.

(a) To Seller’s Knowledge, the Company and has complied with, and is not in
violation of, any applicable Law to which the Company or the Company’s
Activities is or has been subject, except where the failure to comply with any
Law would not reasonably be expected to have a material adverse effect upon the
Company or the Company Activities or impair materially the ability of the
Company to perform its obligations under this Agreement; provided, however, that
notwithstanding the foregoing, Seller makes no representations or warranties as
to whether any act or omission of the Tenant Parties may have caused a violation
of Law with respect to the Properties or the operation thereof.

(b) Neither the Company nor any of its Affiliates has received notice regarding
any violation of, conflict with, or failure to comply with, any Law with respect
to the Properties.

3.10. Authorizations.

(a) The Company owns, holds or lawfully uses in the operation of its business
all Authorizations that are necessary for it to conduct its business and the
Company Activities as currently conducted or as proposed to be conducted. To
Seller’s Knowledge, such Authorizations are valid and in full force and effect
and none of such Authorizations has been withdrawn, revoked, suspended,
cancelled, subject to integrity review, or other regulatory action, nor is any
such withdrawal revocation, suspension, cancellation, integrity review, or other
action pending threatened in writing. Notwithstanding the foregoing, Seller
makes no such representations or warranties as to any Authorizations that are
necessary or useful in order for the Tenant Parties to operate their businesses
within or at the Properties.

(b) To Seller’s Knowledge, no event has occurred and no circumstances exist that
(with or without the passage of time or the giving of notice or both) would
reasonably be expected to result in a violation of, conflict with, failure on
the part of the Company to comply with the terms of, or the revocation,
withdrawal, termination, cancellation, suspension or modification of any
Authorization held by the Company; provided, however, that Seller makes no such
representations or warranties as to any Authorizations held by the Tenant
Parties in connection with the operation of their businesses within or at the
Properties.

(c) None of the Company and its Affiliates has received notice regarding any
violation of, conflict with, failure to comply with the terms of, or any
revocation, withdrawal,

 

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termination, cancellation, suspension or modification of, any Authorization as
it relates to the Company Activities. To Seller’s Knowledge, neither the Company
nor any Affiliate thereof is in default, and neither the Company nor any such
Affiliate has received notice of any claim of default, with respect to any
Authorization held by the Company; provided, however, that Seller makes no such
representations or warranties as to whether any default exists with respect to
any Authorizations held by the Tenant Parties in connection with the operation
of their businesses within or at the Properties.

(d) No Person other than the Company owns or has any proprietary, financial or
other interest (direct or indirect) in any Authorization the Company owns or
uses in the operation of its business or the Company Activities as currently
conducted or as proposed to be conducted; provided, however, that the Tenant
Parties may own or have an interest in Authorizations that are necessary or
useful in connection with the operation of their businesses within or at the
Properties.

3.11. Assets.

(a) The Company owns no Assets other than its interest in the Properties, the
FFE and the Leases.

(b) Seller and its Affiliates (other than the Company) do not have any interest
in the Company’s Assets (other than the indirect interest in the Company’s
Assets held by the Seller and certain of its Affiliates by virtue of Seller’s
ownership of the Membership Interests).

3.12. Real Property.

(a) The Properties described on Exhibit A constitute all of the real property
owned by the Company. The Company owns fee simple to the Real Property, free and
clear of all Encumbrances other than Permitted Encumbrances.

(b) The Properties are leased to the “Tenants” as described in the “Leases”
described on Exhibit B attached hereto and made a part hereof.

(c) Other than the Leases, the Permitted Encumbrances and the Fannie Loan
Documents, the Company has not entered into any leases, subleases, licenses,
concessions, rights of first refusal, right of first offer to purchase, or other
agreements, written or oral, granting to any party the right of use or occupancy
of any portion of the Real Property. Other than the Company or as described in
the Leases, the Permitted Encumbrances and the Fannie Loan Documents, the
Company is not aware of any parties in possession, entitled to assert or that
have asserted any right to possession of any portion of the Real Property.
Seller has made available to Buyer a correct and complete copy of each Lease,
together with all amendments, modifications, and extensions thereof.

(d) The Company has not received notice from any Governmental Entity having the
power of eminent domain over the Real Property that such Governmental Entity has
commenced or intends to exercise the power of eminent domain or a similar power
with respect to all or any part of the Real Property. The Company has not
received notice from any Governmental Entity of any pending or threatened
condemnation, fire, health, safety, building,

 

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zoning or other land use regulatory proceedings, lawsuits or administrative
actions relating to any portion of the Real Property. Neither the Company nor
any of its Affiliates has received notice of any pending or threatened special
assessment proceedings affecting any portion of the Real Property. The Company
has not received notice from any Governmental Entity or third party alleging
that the Real Property or its present uses and operations of the Real Property
fail to comply with any Laws, covenants, conditions, restrictions, easements,
disposition agreements and similar matters. Neither the Seller nor the Company
nor its Affiliates have received any written notice or other written
communication from any Governmental Entity that remains uncured regarding any
actual, alleged, possible or potential violation of, or failure to comply with
any Law affecting the Real Property or the use or operation thereof.

(e) Neither the Seller nor the Company has received any written notice of any
pending or threatened plans to modify or realign any adjacent street or highway
or any eminent domain proceeding that would result in the taking of any portion
of any such property or that would adversely affect the current use, enjoyment
or value of any such property.

(f) Neither Seller nor the Company has received any written notice of any
pending or threatened public improvements which will result in special
assessments or taxes against the Real Property.

(g) The Company has not entered into any outstanding agreements, options, rights
of first offer or refusal, or other present, conditional or contingent rights in
favor of any Person to acquire all or any portion of the Real Property.

3.13. [INTENTIONALLY DELETED].

3.14. Absence of Certain Changes or Events Since the Balance Sheet Date. There
has not been any material adverse change in the condition (financial or
otherwise), operations, prospects or results of operations of the Company;
provided, however, that Seller makes no representation or warranty as to whether
there has occurred any material adverse change in the condition (financial or
otherwise), operations, prospects or results of operations of the Tenant Parties
or the Properties.

3.15. Material Contracts. The Company is not a party to any Material Contract
other than (i) the Fannie Loan Documents, (ii) the Permitted Encumbrances (to
the extent the Company is a party thereto), (iii) the Leases and any ancillary
documents related thereto, and (iv) any Contract listed on Schedule 3.15.
Neither the Company nor, to the Knowledge of Seller, any other party thereto is
in default in the performance, observance or fulfillment of any obligation,
covenant, condition or other term contained in any Material Contract; provided,
however, that Seller makes no representations or warranties as to whether any
act or omission of the Tenant Parties may have caused a default under any
Material Contract or whether a default has occurred under the provisions of any
Material Contract relating to the condition and maintenance of the Properties.
The Company has not given or received notice to or from any Person relating to
any such alleged or potential default under a Material Contract that has not
been cured.

3.16. Notice of Liens. Seller has not pledged, mortgaged, sold, conveyed,
assigned or liened the Membership Interests, and the Company has not received
any notice from Seller or

 

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any third party creditor that the Seller’s Membership Interests has been
pledged, mortgaged, sold, conveyed, assigned or liened, or that a charging order
has been issued against the Seller’s Membership Interests.

3.17. Regulatory Matters.

(a) No Governmental Entity has notified Seller, the Company or any Affiliate,
and Seller, the Company and their Affiliates have no Knowledge that the conduct
of the Company Activities was or is in violation of any applicable Law or the
subject of any investigation.

(b) Neither Seller, the Company, its Affiliates, nor any of its or their
officers, directors or employees has intentionally and knowingly made an untrue
statement of a material fact to any Governmental Entity with respect to the
Company or the Company’s Activities (whether in any submission to such
Governmental Entity or otherwise), or failed to disclose a material fact
required to be disclosed by the Company to any Governmental Entity with respect
to the Company or the Company Activities. Neither Seller, the Company, its
Affiliates nor any employee has received nor is aware of any basis for the
issuance of any notice to such effect.

3.18. Litigation.

(a) There is no known Proceeding (i) pending or threatened against or affecting
the Company, or to the Company’s Knowledge, the Properties or the Assets, or
(ii) that challenges or seeks to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement. To Seller’s Knowledge, no event has
occurred or agreement, contract or circumstances exist that may give rise or
serve as a basis for any such Proceeding. There is no Proceeding against any
current or former officer, member, manager or employee of the Company or its
Affiliates with respect to which the Company has or is reasonably likely to have
an indemnification obligation.

(b) There is no unsatisfied judgment, penalty or award against or affecting the
Company or any of its Properties or Assets. To Seller’s Knowledge, there is no
Order to which the Company or any of its Properties or Assets are subject.

3.19. Employee Benefits. The Company is not a party nor has or may in the future
have any liability, for the benefit of any present or former members, managers,
employees, contractors or consultants of the Company (collectively, “Company
Benefit Plans”). The Company does not have any intent or commitment to create,
modify or terminate any Company Benefit Plan.

3.20. Labor and Employment Matters. The Company has never had any employees.

3.21. Environmental.

(a) Neither Seller nor the Company has received notice of any pending or
threatened Environmental Actions against the Company.

 

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(b) The Company has not entered into any judgment, decree, order or other
similar requirement of or agreement with any Governmental Entity under any
Environmental Laws.

(c) The Company has not expressly assumed responsibility for or agreed to
indemnify or hold harmless any Person for any liability or obligation, arising
under or relating to Environmental Laws.

3.22. INTENTIONALLY DELETED.

3.23. Books and Records. At the Closing, all of the books and records of the
Company will be in the possession of the Company. At the Closing, Seller will
deliver, or cause to be delivered, to Buyer or its designee all of the minute
books of the Company.

3.24. Absence of Certain Business Practices. Neither Seller, the Company, its
Affiliates nor any officer, director, employee, agent or other representative of
the Company or any Person acting on their behalf have, in connection with the
Company Activities, made, directly or indirectly, any bribes, kickbacks, or
political contributions to obtain or retain business either within the United
States or abroad, to obtain favorable treatment in securing business or to
obtain special concessions, or to pay for favorable treatment for business
secured or for special concessions already obtained; provided, however, that
Seller makes no such representations or warranties as to whether any Tenant
Parties have taken any such actions in connection with the operation of their
businesses within or at the Properties.

3.25. Certain Business Relationships With Affiliates. No Affiliate of the
Company or Seller (a) has any claim or cause of action against any of the
Company, (b) owes any money to the Company or (c) is a party to any Contract
with the Company that will remain in effect after the Closing.

3.26. Brokers or Finders. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller or the Company.

3.27. Completeness of Disclosure. No representation or warranty made by Seller,
the Company or any officer of the Company in this Agreement or any certificate
delivered to Buyer pursuant hereto (a) Knowingly contains any untrue statement
of any fact; or (b) intentionally omits to state any fact that is necessary to
make the statements made, in the context in which made, not false or misleading
in substantial respect.

3.28. Business Purpose. The Company has no business activity or purpose, and has
never had any business activity or purpose, other than the ownership and leasing
of the Properties shown on Exhibit A and Exhibit B.

3.29. No Representation or Warranty by Seller; As-Is Sale. Buyer acknowledges
that, except as expressly set forth in this Agreement, Seller has not made and
does not make any warranty or representation regarding the truth, accuracy or
completeness of the Seller Documents (including without limitation all surveys,
environmental reports, zoning reports, engineering reports or other similar
reports prepared by third parties) or the source(s) thereof. Buyer further

 

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acknowledges that some if not all of the Seller Documents were prepared by third
parties other than Seller. Except as expressly set forth in this Agreement,
Seller expressly disclaims any and all liability for representations or
warranties, express or implied, statements of fact and other matters contained
in such information, or for omissions from the Seller Documents, or in any other
written or oral communications transmitted or made available to Buyer. Except
with respect to those matters that are the subject of the representations of
Seller contained herein, (i) Buyer shall rely solely upon its own investigation
with respect to the Company and the Properties, including, without limitation,
the Properties’ physical, environmental or economic condition, compliance or
lack of compliance with any Authorization or Law or any other attribute or
matter relating thereto and (ii) Buyer is accepting the Membership Interests and
the Properties “as-is, where-is, with all faults.” Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of the
Seller Documents and is providing the Seller Documents solely as an
accommodation to Buyer. Buyer acknowledges and agrees that, except for any
matters that are the subject of the representations, covenants or obligations of
Seller contained in this Agreement or in the Seller’s Closing Documents, Buyer
is not relying on (and Seller and each of its Affiliates do hereby disclaim and
renounce) any representations or warranties of any kind or nature whatsoever,
whether oral or written, express, implied, statutory or otherwise, from Seller
or its Affiliates. The provisions of this Section 3.29 shall survive the
termination of this Agreement and shall survive the Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES PERTAINING TO THE SELLER

Seller represents and warrants to Buyer as follows:

4.1. Enforceability; Authority. Assuming due authorization, execution and
delivery of this Agreement by Buyer, this Agreement constitutes the legal, valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to creditors’ rights generally, and (b) the availability of injunctive
relief and other equitable remedies. Upon the execution and delivery of each
other agreement to be executed or delivered by Seller at the Closing
(collectively, the “Seller Closing Documents”), and assuming due authorization,
execution and delivery by Buyer of each of the Seller Closing Documents to which
Buyer is a party , each of the Seller Closing Documents will constitute the
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
(x) bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to creditors’ rights generally, and (y) the availability
of injunctive relief and other equitable remedies. Seller has the right, power,
authority and legal capacity to execute and deliver this Agreement and the
Seller Closing Documents and to perform its obligations under this Agreement and
the Seller Closing Documents.

4.2. Conflict. Neither the execution, delivery and performance of this Agreement
or the Seller Closing Documents nor the consummation or performance of the
transactions contemplated hereby or thereby by Seller will, directly or
indirectly (with or without notice or lapse of time): (a) breach or give any
Governmental Entity or other Person the right to challenge any of the
transactions contemplated hereby or to exercise any remedy or obtain any relief
under

 

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any Order to which Seller may be subject or, to Seller’s Knowledge, any Law to
which Seller may be subject; (b) based on actions or inaction of Seller or its
Affiliates, result in the imposition or creation of any Lien upon or with
respect to the Membership Interests of Seller; (c) contravene, conflict with or
result in a violation or breach of any Contract of Seller in a manner that would
adversely affect the consummation of the transactions contemplated hereby, the
ability of Buyer to acquire the Membership Interests free and clear of all
Liens, or the ability of Buyer to receive the benefit of its bargain hereunder;
or (d) contravene, conflict with or result in a violation or breach of any of
the terms or requirements of, or give any Governmental Entity or other Person
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
Authorization that is held by such Seller that otherwise relates to the
Membership Interests, except in each such case where such contravention,
conflict, violation, breach, default or Lien would not reasonably be expected to
have a material adverse effect upon the Company or the Company Activities or
impair materially the ability of Seller to perform its obligations under this
Agreement; provided, however, that notwithstanding the foregoing, Seller makes
no representations or warranties as to the effect of the execution, delivery and
performance of this Agreement or the Ancillary Agreements to which it is a party
and/or the consummation or performance of the transactions contemplated hereby
or thereby by the Seller upon (i) any Authorizations held by the Tenant Parties
or by the Company with respect to the Properties, (ii) the operations conducted
by Tenant Parties at or within the Properties, or (iii) any Contracts to which
the Tenant Parties are a party.

4.3. Consents. Except for the Fannie Consent and such other notices and Consents
as have been given or obtained prior to the date hereof, Seller is not required
to give any notice to or obtain any Consent from any Person in connection with
Seller’s execution and delivery of this Agreement or any of the Seller Closing
Documents, the consummation of the contemplated transactions or the performance
of such Seller’s obligations under this Agreement and the Seller Closing
Documents, except where the failure to give any such notice or obtain any such
Consent would not reasonably be expected to have a material adverse effect upon
the Company or the Company Activities or impair materially the ability of Seller
to perform its obligations under this Agreement; provided, however, that
notwithstanding the foregoing, Seller makes no representations or warranties as
to whether any such notice or Consent may be required in connection with (a) any
Authorizations held by the Tenant Parties or by the Company with respect to the
Properties, (b) the operations conducted by Tenant Parties at or within the
Properties, or (c) any Contracts to which the Tenant Parties are a party.

4.4. Legal Proceedings. There are no pending or to Seller’s Knowledge threatened
Proceedings by or against Seller (a) that relate to or may affect any of the
Membership Interests of Seller; or (b) that challenge, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the contemplated transactions, and there are no known facts or circumstances
that could form the basis for the successful institution and prosecution of any
such Proceeding.

4.5. Brokers or Finders. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller or the Company.

 

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4.6. Ownership of Membership Interests. Seller has good and marketable title to
the Membership Interests owned by Seller, free and clear of all Liens. Seller
has not pledged, assigned, conveyed, mortgaged, or granted a security interest
or lien in, the Membership Interests to any third party. Seller owns 100% of the
Membership Interests. Seller owns and has always owned 100% of the outstanding
equity of the Company, and the Company has never had any other owner of any
membership interests, equity interests, rights of first refusal, options or
warrants to purchase units or any similar type of equity ownership in the
Company. The Membership Interests to be conveyed to Buyer constitute all of the
membership interests and other interests in the Company (owned by Seller or
otherwise). Seller has not granted a currently effective power of attorney or
proxy to any Person with respect to all or any part of the Membership Interests
owned by Seller. Except for this Agreement, Seller is not a party to or bound by
any agreement, undertaking or commitment to sell, transfer, assign, exchange,
purchase or otherwise acquire any membership interests of the Company. Upon
transfer of the Membership Interests to the Buyer, the Buyer will receive valid
title to the Membership Interests, free and clear of any Liens (other than any
Liens that attach as a result of the Buyer’s ownership thereof).

4.7. Completeness of Disclosure. No representation or warranty made by Seller in
this Agreement or any certificate delivered to Buyer pursuant hereto
(a) Knowingly contains any untrue statement of any fact; or (b) intentionally
omits to state any fact that is necessary to make the statements made, in the
context in which made, not false or misleading in any respect.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

5.1. Organization and Good Standing. Buyer is a limited liability company duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization, has all requisite limited liability company
power to own, lease and operate its properties and to carry on its business as
now being conducted.

5.2. Authority and Enforceability. Buyer has the requisite power and authority
to enter into this Agreement and to consummate the Acquisition. The execution
and delivery of this Agreement and the consummation of the Acquisition have been
duly authorized by all necessary limited liability company action on the part of
Buyer. This Agreement has been duly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by Seller, constitutes the
valid and binding obligation of Buyer, enforceable against it in accordance with
its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to creditors’ rights generally, and (b) the availability of injunctive
relief and other equitable remedies.

5.3. No Conflicts; Authorizations.

(a) The execution and delivery of this Agreement by Buyer does not, and the
consummation of the Acquisition by Buyer will not, (i) violate the provisions of
any of the Organizational Documents of Buyer, (ii) violate any Contract to which
Buyer is a party, (iii) to

 

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the knowledge of Buyer, violate any Law of any Governmental Entity applicable to
Buyer on the date hereof, or (iv) to the knowledge of Buyer, result in the
creation of any Liens upon any of the assets owned or used by Buyer, except in
each such case where such violation or Lien would not reasonably be expected to
impair materially the ability of Buyer to perform its obligations under this
Agreement or consummate the Acquisition.

(b) No Authorization or Order of, registration, declaration or filing with, or
notices to any Governmental Entity is required by Buyer in connection with the
execution and delivery of this Agreement and the consummation of the
Acquisition, except for such Authorizations, Orders, registrations,
declarations, filings and notices the failure to obtain or make, which would not
reasonably be expected to impair materially the ability of Buyer to perform its
obligations under this Agreement or consummate the Acquisition.

5.4. Availability of Funds. Assuming approval of the continuation of the Fannie
Loan with the Company following the Closing, Buyer has cash available or has
existing borrowing facilities that together are sufficient to enable it to
consummate the Acquisition.

5.5. Brokers or Finders. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer or any Affiliate of Buyer.

ARTICLE VI

COVENANTS OF SELLER

6.1. Conduct of Business. During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the
Closing, except with the prior written consent of Buyer, Seller shall cause the
Company to:

(a) maintain its limited liability company existence, pay its debts and Taxes
when due, pay or perform other obligations when due, and carry on its business
in the usual, regular and ordinary course in a manner consistent with past
practice;

(b) maintain its books and records in accordance with past practice;

(c) promptly notify Buyer of any event or occurrence of which Seller or the
Company becomes aware that is not in the ordinary course of business;

6.2. Negative Covenants. Except as expressly provided in this Agreement or with
the prior written consent of the Buyer, Company will not (and Seller and its
Affiliates will not, with respect to the Company), without the prior written
consent of Buyer:

(a) adopt or propose any amendment to the Organizational Documents of the
Company;

(b) issue or authorize for issuance any ownership interests or other security,
or make any change in any issued and outstanding ownership interests or other
security, or redeem, purchase or otherwise acquire, directly or indirectly, any
ownership interests, equity interest or other security;

 

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(c) (i) modify or increase the compensation (including bonus opportunities) or
benefits payable or to become payable by the Company to any of its current or
former directors, employees, contractors or consultants, (ii) grant any
severance or termination pay, or (iii) enter into any employment, consulting,
severance or termination agreement or arrangement with any of its current or
former directors, key employees, contractors or consultants;

(d) establish, adopt or enter into any Company Benefit Plan or any collective
bargaining, thrift, compensation or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any current or former directors, employees,
contractors or consultants of the Company;

(e) sell, lease, transfer or assign any Property or Asset of the Company;

(f) assume, incur or guarantee any Indebtedness, or modify the terms of any
existing Indebtedness (except as contemplated by Section 2.2);

(g) mortgage, pledge or permit to become subject to Liens (other than Permitted
Liens) any Property or Asset of the Company;

(h) make any loans, advances or capital contributions to, or investments in, any
Person;

(i) cancel any debts or waive any claims or rights of substantial value;

(j) (i) amend, modify or terminate, or waive, release or assign any rights
under, any Material Contract, (ii) enter into any Contract which, if in effect
on the date hereof, would have been required to be a Material Contract, or
(iii) otherwise take any action or engage in any transaction that is material to
the Company;

(k) make any filings or registrations, with any Governmental Entity, except
routine filings and registrations made in the ordinary course of business;

(l) be party to (i) any merger, acquisition, consolidation, recapitalization,
liquidation, dissolution or similar transaction involving the Company or
(ii) any purchase or sale of all or any substantial portion of the Assets or
ownership interests or other securities of the Company or any of the Properties;

(m) make any changes in its accounting methods, principles or practices;

(n) make any material election relating to Taxes (except such that are
consistent with past practice), take any action that would cause the Company to
no longer be treated as a disregarded entity for federal income tax purposes, or
settle or compromise any material Liabilities for Taxes;

 

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(o) make any change in material Tax accounting or reporting methods, except as
may have been required as a result of a change of Law;

(p) take any action or omit to do any act which action or omission will cause it
to breach any obligation contained in this Agreement or cause any representation
or warranty of Seller or the Company not to be true and correct as of the
Closing Date;

(q) take any actions outside the ordinary course of business; or

(r) agree or otherwise commit, whether in writing or otherwise, to do any of the
foregoing.

6.3. Access to Information. Seller shall, and shall cause the Company to, afford
to Buyer’s officers, directors, employees, accountants, counsel, consultants,
advisors and agents (“Representatives”) free and full access to and the right to
inspect, during normal business hours, all of the Real Property, properties,
Assets, records, Contracts and other documents related to the Company and shall
permit them to consult with the officers, employees, accountants, counsel and
agents for the purpose of making such investigation of the Company as Buyer
shall desire to make. Seller shall furnish to Buyer all such documents and
copies of documents and records and information with respect to the Company and
copies of any working papers relating thereto as Buyer may request, all to the
extent the foregoing items are within the possession or control of Seller or the
Company. Without limiting the foregoing, Seller shall permit Buyer and its
Representatives to conduct environmental due diligence, investigations and
examinations of the Company and the Real Property, including the collecting and
analysis of samples of indoor or outdoor air, surface water, groundwater or
surface or subsurface soils, provided that (i) Buyer must give Seller and
Manager reasonable prior telephone or written notice of any and all inspections
or tests, and with respect to any intrusive inspection or test (i.e., core
sampling) must obtain Seller’s prior written consent (which consent will not be
unreasonably withheld or conditioned), and (ii) Buyer shall not interfere with
the operations of the Tenant Parties. Buyer shall bear the cost of all
inspections or tests and shall indemnify and hold Seller and the Company
harmless from and against all claims, damages, injuries, accidents, losses and
expenses relating to the activities of Buyer and its Representatives pursuant to
this Section 6.3.

6.4. Intercompany Arrangements; Indebtedness: Release of Liens.

(a) Prior to the Closing, Seller shall, in consultation with Buyer, settle all
accounts that are unpaid as of the Closing Date between the Company, on the one
hand, and Seller or any Affiliate of the Company or Seller, on the other.

(b) Prior to the Closing, except for obligations of the Company with respect to
the Leases, the Permitted Encumbrances and the Fannie Loans, Seller shall
extinguish (i) all Indebtedness of the Company, and (ii) all guarantees by the
Company of any Indebtedness of Seller or any Affiliate of the Company or Seller.

(c) Prior to the Closing, Seller shall have caused to be released all Liens in
and upon any of the Membership Interests.

 

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(d) Neither Seller nor the Company shall be subject to any intercompany
agreements (including service and referral agreements and any other Contracts)
or any contracts with related entities, on the Closing Date, and all such
agreements and contracts shall be terminated, evidenced in a manner satisfactory
to the Buyer.

6.5. Confidentiality. From and after the Closing, Seller will, and will cause
its Affiliates, to hold, and will use its reasonable best efforts to cause their
respective Representatives to hold, in confidence any and all information,
whether written or oral, concerning the Company, except to the extent that
Seller can show that such information (a) is in the public domain through no act
of Seller taken after the Closing or (b) is lawfully acquired by Seller after
the Closing from sources that are not prohibited from disclosing such
information by a legal, contractual or fiduciary obligation; provided, however,
that Seller and its Affiliates shall be entitled to disclose such information to
the extent reasonably necessary to enforce Seller’s rights under this Agreement
or perform its obligations under this Agreement, the Seller’s Closing Documents
or under applicable Law or to perform any other legal, contractual or fiduciary
obligation of Seller. If Seller or any of their Representatives are compelled to
disclose any such information by judicial or administrative process or by other
requirements of Law, Seller shall promptly notify Buyer in writing and shall
disclose only that portion of such information that Seller is advised by its
counsel in writing is legally required to be disclosed; provided that Seller
shall exercise their reasonable best efforts to obtain an appropriate protective
order or other reasonable assurance that confidential treatment will be accorded
such information.

6.6. [INTENTIONALLY DELETED].

6.7. Notification of Certain Matters. Seller and the Company shall give prompt
notice to Buyer of (a) any fact, event or circumstance known to it that
individually or taken together with all other facts, events and circumstances
known to it, has had or is reasonably likely to have, individually or in the
aggregate, a material adverse effect on the condition (financial or otherwise),
operations, prospects or results of operations of the Company, or that would
cause or constitute a breach of any of its representations, warranties,
covenants or agreements contained herein, (b) any fact, event or circumstance
known to it that individually or taken together with all other facts, events and
circumstances known to it, has had or is reasonably likely to result in the
failure of any condition precedent to Buyer’s obligations, (c) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the Acquisition, (d) any notice
or other communication from any Governmental Entity in connection with the
Acquisition, or (e) any Proceedings commenced relating to the Company that, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.18; provided, however, that (i) the delivery of
any notice pursuant to this Section 6.7 shall not limit or otherwise affect any
remedies available to Buyer or prevent or cure any misrepresentations, breach of
warranty or breach of covenant, and (ii) disclosure by Seller shall not be
deemed to amend or supplement any Schedule or constitute an exception to any
representation or warranty.

6.8. [INTENTIONALLY DELETED].

6.9. Exclusivity. Except with respect to this Agreement and the transactions
contemplated hereby, Seller agrees that it will not, and it will cause the
Company and its and

 

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their respective directors, officers, employees, Affiliates and other agents and
Representatives (including any investment banking, legal or accounting firm
retained by it or any of them and any individual member or employee of the
foregoing) (each, an “Agent”) not to: (a) initiate, solicit or seek, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including any proposal or offer to its stockholders or any of them) with
respect to a merger, acquisition, consolidation, recapitalization, liquidation,
dissolution, equity investment or similar transaction involving, or any purchase
of all or any substantial portion of the assets or any ownership interests of,
the Company (any such proposal or offer being hereinafter referred to as a
“Proposal”); (b) engage in any negotiations concerning, or provide any
confidential information or data to, or have any substantive discussions with,
any person relating to a Proposal; (c) otherwise cooperate in any effort or
attempt to make, implement or accept a Proposal; or (d) enter into Contract with
any Person relating to a Proposal. Seller shall notify Buyer immediately if any
inquiries, proposals or offers related to a Proposal are received by, any
confidential information or data is requested from, or any negotiations or
discussions related to a Proposal are sought to be initiated or continued with,
Seller or the Company or any of their respective directors, officers, employees
and Affiliates or, to its knowledge, any other Agent. Seller and the Company
shall, and shall cause their respective Representatives to, immediately cease
and terminate any discussion, negotiation or other activity with any third party
heretofore conducted by Seller, the Company, any of their respective Affiliates
and any Agent of the foregoing with respect to any Proposal.

6.10. Release. Notwithstanding anything contained in this Agreement, the
Ancillary Agreements or any other document or agreement contemplated hereby and
thereby to the contrary, Seller, on behalf of Seller and their respective
successors and assigns and Affiliates, as of the Closing, hereby releases and
forever discharges the Company for and from any Losses that Seller ever had, now
has, or hereafter can, shall or may have against the Company, upon or by reason
of any matter, cause or thing whatsoever from the beginning of time through the
Closing Date.

ARTICLE VII

COVENANTS OF BUYER AND SELLER

7.1. Regulatory Approvals. Buyer shall promptly apply for, and take all
reasonably necessary actions to obtain or make, as applicable, all
Authorizations, Orders, declarations and filings with, and notices to, any
Governmental Entity or other Person required to be obtained or made by Buyer
and/or the Tenant Parties for the consummation of the Acquisition and the
transactions contemplated by this Agreement. Seller shall cooperate with and
promptly furnish information (to the extent such information is within the
possession or control of Seller) to Buyer necessary in connection with any
requirements imposed upon Buyer and/or the Tenant Parties in connection with the
consummation of the Acquisition. Buyer shall be responsible for all filing and
other similar fees payable in connection with such filings, and for any local
counsel fees.

(a) Buyer and Seller shall use their commercially reasonable efforts to obtain
promptly any clearance required under any applicable Laws for the consummation
of this Agreement and the transactions contemplated hereby. Buyer and Seller
shall keep the other apprised of the status of any communications with, and any
inquiries or requests for additional information from any other Governmental
Entities and shall comply promptly with any such

 

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inquiry or request. Notwithstanding the foregoing, (i) Buyer shall not be
required to (A) consent to the divestiture, license or other disposition or
holding separate (through the establishment of a trust or otherwise) of any of
its or its Affiliates’ assets or (B) consent to any other structural or conduct
remedy or enter into any settlement or agree to any Order regarding antitrust
matters respecting the transactions contemplated by this Agreement and
(ii) Buyer and its Affiliates shall have no obligation to contest,
administratively or in court, any ruling, order or other action of any
Governmental Entity or any other Person respecting the transactions contemplated
by this Agreement; provided that that each of Buyer and Seller shall both
promptly respond to any Governmental Entity to any request for additional
information.

(b) Buyer and Seller shall instruct their respective counsel to cooperate with
each other and use commercially reasonable efforts to facilitate and expedite
the identification and resolution of any issues arising under applicable Laws at
the earliest practicable dates. Such commercially reasonable efforts and
cooperation include counsel’s undertaking (i) to keep each other appropriately
informed of communications from and to personnel of the reviewing Governmental
Entity, and (ii) to confer with each other regarding appropriate contacts with
and response to personnel of such Governmental Entity.

7.2. Public Announcements. Buyer and Seller shall each be permitted to issue any
press release or otherwise make any public statement with respect to the
transactions contemplated by this Agreement; provided that Buyer and Seller
shall consult with each other before issuing, and give each other a reasonable
time to comment on such release or announcement in advance of such issuance.
Both Buyer and Seller may make internal announcements regarding the Acquisition
to their respective employees.

7.3. Tax Matters.

(a) Allocation of Taxes Between Buyer and Seller; Preparation of Tax Returns.

(i) The Seller shall bear the burden of Taxes arising out of the operations of
the Company or the ownership of the Assets with respect to transactions or
periods (or portions thereof) ending on or prior to the Closing Date, and Buyer
shall bear the burden of Taxes arising out of the operations of the Company or
the ownership of the Assets with respect to transactions or periods (or portions
thereof) beginning after the Closing Date. Neither the Company nor the Buyer
shall bear the burden of any Taxes arising out of the operations of Seller’s
Affiliates (other than the Company).

(ii) Except as provided in (iii) below, in the case of Taxes of the Company for
a taxable period of the Company that includes, but does not end on, the Closing
Date, the allocation of such Taxes between the Buyer and Seller shall be made on
the basis of an interim closing of the books as of the end of the Closing Date.

(iii) In the case of any Taxes of the Company that are imposed on a periodic
basis and are payable for a taxable period that includes, but does not end on,
the Closing Date (e.g., ad valorem property taxes), the portion of such Tax
which relates to the portion of such taxable period ending on the Closing Date
shall be deemed to be the

 

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amount of such Tax for the entire taxable period multiplied by a fraction, the
numerator of which is the number of days in the taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
taxable period.

(iv) All Tax Returns of the Company for taxable periods that include the Closing
Date shall be prepared in accordance with the Company’s past practices unless
otherwise required by Law.

(b) Cooperation in Filing Tax Returns. Buyer and Seller shall, and shall each
cause its subsidiaries and Affiliates to, provide to the other such cooperation
and information, as and to the extent reasonably requested, in connection with
the filing of any Tax Return of the Company, or in any audit, litigation or
other proceeding with respect to Taxes of the Company.

(c) Carryovers, Refunds, and Related Matters.

(i) Any refund of Taxes (including any interest thereon) that relates to the
Company and that is attributable to a period after the Closing Date shall be the
property of the Company, as applicable, and shall be retained by the Company (or
promptly paid by Seller to the Company if any such refund (or interest thereon)
is received by Seller or any of their respective Affiliates).

(ii) If (A) after the Closing Date, the Company receives a refund of any Tax
that is attributable to a period ending on or before the Closing Date, (B) the
Tax was paid by (1) Seller on or after the Closing Date or (2) Seller or the
Company prior to the Closing Date, then the Buyer or the Company, as the case
may be, promptly shall pay or cause to be paid to Seller the amount of such
refund together with any interest thereon, but net of any Taxes imposed on the
Company with respect to the receipt of such refund.

(iii) In applying Section 7.3(c)(i) and Section 7.3(c)(ii), any refund of Taxes
(including any interest thereon) for a taxable period that includes but does not
end on the Closing Date shall be allocated between the period ending on or
before the Closing Date and the period ending after the Closing Date in
accordance with Section 7.3(a).

(d) Tax Treatment of the Buy-Sell of the Membership Interests. For federal
income and applicable state income Tax purposes, Seller will be treated as
selling the Assets of the Company and Buyer will be treated as buying the Assets
of the Company.

7.4. Casualty. From the date hereof until the Closing Date, in the event that
there is any damage to or loss of any of the Properties (whether by fire, theft,
vandalism or other cause or casualty) that entitles the Tenant of such Property
to terminate its Lease with respect to such Property pursuant to the terms of
such Lease, Buyer, at its sole option, may elect to terminate this Agreement in
its entirety. Notwithstanding, if Buyer does not elect to terminate this
Agreement (or does not have the option to terminate this Agreement) following
such damage or loss, any insurance proceeds with respect to the damage or loss
shall be used and applied as required by the terms of the applicable Lease and
the Fannie Loan Documents and may not be expended for any other purpose prior to
Closing.

 

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7.5. Condemnation. From the date hereof until the Closing Date, in the event
that there is any condemnation of any of the Properties, the Purchase Price
shall be reduced by the amount of such condemnation proceeds received by the
Company prior to the Closing Date (but not including any amounts belonging to
the Tenants pursuant to the terms of the Leases) but the reduction shall be
offset by any amounts received by Buyer for such condemnation; provided,
however, in the event of any pending, threatened or contemplated condemnation or
eminent domain proceeding which Buyer reasonably determines to have a material
adverse impact on the business of the Company, Buyer at its sole option, may
elect to terminate this Agreement in its entirety.

7.6. Title Work and Surveys; Title Policies; Environmental Inspections.

(a) Title Work. Seller furnished to Buyer certain existing title work (the
“Existing Title Work”) on or before the execution of this Agreement. No material
Liens have been placed on the Properties by the Company since the date of the
most recent Existing Title Work with respect to each Property. Following
execution of this Agreement, Buyer may obtain, at Buyer’s option and at Buyer’s
expense, commitments from the title insurance company issuing the Existing Title
Work (the “Title Company”) to issue (i) updates to the Existing Title Work or
(ii) new policies of owner’s title insurance for any Properties (or portion
thereof) as to which there is no Existing Title Work, together with legible
copies of all exceptions to title referenced therein (the “New Title Work”).
Buyer shall furnish Seller with copies of any material documents resulting from
the New Title Work promptly following receipt of same.

(b) Surveys. Seller furnished to Buyer certain existing Surveys (the “Existing
Surveys”) on or before the execution of this Agreement. Following execution of
this Agreement, Buyer may obtain, at Buyer’s option and at Buyer’s expense,
(i) updates to the Existing Surveys or (ii) current, as-built surveys for those
Properties (or portions thereof) as to which there are no Existing Surveys (the
“New Surveys”). The New Surveys shall contain the surveyor’s ALTA/ACSM
certification to Buyer, Seller, the Company and the Title Company. Buyer shall
furnish Seller with copies of any New Surveys promptly following receipt of such
surveys.

(c) [INTENTIONALLY DELETED]

(d) Title Policy. At the Closing, Buyer may obtain, at Buyer’s option and at
Buyer’s expense, a current ALTA Form Owner’s Policy of Title Insurance (the
“Title Policy”) for the Real Property issued by the Title Company. Buyer shall
pay all premiums, costs and expenses of the Title Policy.

(e) Environmental Inspections. Seller has provided Buyer with certain existing
environmental reports (the “Existing Environmental Reports”) on or before the
execution of this Agreement. Following the execution of this Agreement (the
“Environmental Inspection Period”), Buyer and Buyer’s agents, representatives
and contractors shall have the right to enter upon the Real Property for the
purpose of conducting such tests, assessments, evaluations and investigations as
Buyer may determine in its sole discretion, in order to evaluate and determine
the current environmental condition of the Real Property, including without
limitation, at Buyer’s cost and expense, Phase I or Phase II environmental
assessments of any

 

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Real Property and updates of any existing Phase I or Phase II assessments in
order to bring them current under AAI standards for CERCLA (the “New
Environmental Reports”), all at Buyer’s cost and expense; provided, however,
that any such tests or inspections shall be conducted in accordance with the
provisions of Section 6.3 above.

7.7. Rule 3-05 or Rule 3-14 Audit. Seller acknowledges that under either Rule
3-05 or Rule 3-14 of Regulation S-X, Buyer is required to provide certain
information in connection with reports Buyer is required to file with the
Securities and Exchange Commission. Accordingly, Seller agrees to (a) allow
Buyer and Buyer’s representatives, at Buyer’s sole cost and expense, to perform
an audit of the Company’s operations of and at the Properties to the extent
required under either Rule 3-05 or Rule 3-14 of Regulation S-X (hereinafter a
“Rule 3-05 or 3-14 Audit”), (b) make available to Buyer and Buyer’s
representatives for inspection and audit at the Company’s offices the Company’s
books and records relating solely to the Company’s operations that are
reasonably requested by Buyer for any full or partial years reasonably necessary
to complete the Rule 3-05 or 3-14 Audit, and (c) sign the management
representation letter to be provided by the Buyer’s independent auditors. In
connection with the foregoing, Buyer shall give Seller no less than three
(3) Business Days’ prior written notice of Buyer’s plans to inspect and audit
such books and records. Notwithstanding the foregoing, neither the Company nor
Seller shall be required to (a) prepare or compile any materials, (b) incur any
third party costs or expenses in connection with the Rule 3-05 or 3-14 Audit,
(c) provide any books, records or materials that could reasonably be expected to
be books, records or materials in the possession or control of the Tenant
Parties, (d) provide any books, records or materials that are not within the
possession or control of the Company or Seller, or (d) make any representations
or warranties with respect to such information beyond a customary management
representation letter signed by the Company reasonably requested by any
accounting firm engaged by the Buyer to deliver its auditors report with respect
to the Rule 3-05 or Rule 3-14 Audit. Buyer acknowledges and agrees that the
foregoing accounting and financial materials to be provided by the Company does
not include any information or materials related to the period prior to the
acquisition of the Properties by the Company and is to be limited solely to
information regarding the Properties after they were placed into operation by
the Company. Seller acknowledges that the Rule 3-05 or Rule 3-14 Audit may
require Buyer to perform a Rule 3-05 or 3-14 Audit both after the Effective Date
and after the Closing and Seller agrees that Seller’s obligations under this
Section 7.7 shall survive the Closing for a period of one year following the
Closing Date. Any Rule 3-05 or 3-14 Audit shall be completed as soon as
reasonably possible and Buyer and Buyer’s representatives shall use commercially
reasonable best efforts not to interfere with Seller’s or the Company’s ability
to conduct its business. Upon written request by Seller, copies of all Rule 3-05
or 3-14 Audits shall be promptly provided to Seller at no cost to Seller.

7.8. Further Assurances. Subject to the terms of this Agreement, each of Buyer
and Seller shall execute such documents and other instruments and take such
further actions as may be reasonably required to carry out the provisions hereof
and consummate the Acquisition.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1. Conditions to Obligations of Buyer and Seller. The obligations of Buyer and
Seller to consummate the Acquisition are subject to there being no temporary
restraining order,

 

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preliminary or permanent injunction or other Law or Order in effect preventing
the consummation of the Acquisition. No Law shall have been enacted or shall be
deemed applicable to the Acquisition which makes the consummation of the
Acquisition illegal.

8.2. Conditions to Obligation of Buyer. The obligation of Buyer to consummate
the Acquisition is subject to the satisfaction (or waiver by Buyer in its sole
discretion) of the following further conditions:

(a) Each representation and warranty of the Company and the Seller contained in
this Agreement (i) shall have been true and correct in all respects (in the case
of representations and warranties qualified by materiality) or in all material
respects (in the case of representations and warranties not qualified by
materiality) as of the date of this Agreement and (ii) shall be true and correct
in all respects (in the case of representations and warranties qualified by
materiality) or in all material respects (as in the case of representations and
warranties not qualified by materiality) as of the Closing Date with the same
force and effect as if made on the Closing Date, in each case except for those
representations and warranties which address matters only as of an earlier date
(which representations shall have been true and correct in all respects (in the
case of representations and warranties qualified by materiality) or in all
material respects (as in the case of representations and warranties not
qualified by materiality) as of such particular date) and Buyer shall have
received a certificate dated the Closing Date signed on behalf of Seller to such
effect.

(b) Seller and the Company shall have performed or complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied by Seller and/or the Company or its Affiliates at or prior
to the Closing Date. Buyer shall have received a certificate dated the Closing
Date signed on behalf of Seller and the Company to such effect.

(c) [INTENTIONALLY DELETED]

(d) [INTENTIONALLY DELETED]

(e) There shall have been no material adverse change in the condition (financial
or otherwise), operations, prospects or results of operations of the Company.

(f) No Proceeding shall be pending or threatened before any court or other
Governmental Entity (i) seeking to prevent consummation of any of the
transactions contemplated by this Agreement, (ii) seeking to impose any material
limitation on the right of Buyer to own the Membership Interests and to control
the Company or (iii) seeking to restrain or prohibit Buyer’s ownership or
operation (or that of its Subsidiaries or Affiliates) of all or any material
portion of the Properties, business or assets of the Company, or compel Buyer or
any of its Subsidiaries or Affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company, or of Buyer or its
Affiliates. No such Order shall be in effect.

(g) Buyer shall have received a written opinion from legal counsel to Seller,
addressed to Buyer, dated as of the Closing Date, in the form attached hereto as
Exhibit D.

 

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(h) (i) All statutory and regulatory consents and approvals which are required
under the Laws shall have been obtained; and (ii) all consents and approvals of
third parties to the Contracts set forth on Schedule 8.2(h) shall have been
obtained shall be in full force and effect and shall not be subject to any
condition that has not been satisfied.

(i) Seller shall have delivered to Buyer evidence, satisfactory to Buyer and in
recordable form, of the release of all Liens (if any) with respect to the
property and assets of the Company (other than the Permitted Encumbrances and
the Liens securing the Fannie Loans).

(j) Seller shall have delivered to Buyer a properly executed and acknowledged
certificate of non-foreign status as described in Treas. Reg.
Section 1.11445-2(b)(2).

(k) Seller shall have delivered to Buyer duly signed withdrawals of the
Member(s) and resignations, effective as of the Closing, of all managers of the
Company as managers (and, if requested by Buyer prior to Closing, of officers of
their positions as officers).

(l) Full execution and delivery of all closing and conveyance documents
including, without limitation, the following:

(1) Assignment of Membership Interest

(2) Termination of Option Agreement dated Jun 10, 2011 between Seller, EBY
Realty Group, L.L.C., Great Plains Assisted Living, L.L.C., and Bickford Senior
Living Group, L.L.C.

(3) Termination of Pledge Agreement dated June 26, 2008, as amended and the
release of all liens and UCCs in connection therewith.

(4) Certificates of good standing of the Company from the state of Company’s
organization as well as from each state where it is qualified to do business.

(m) The Fannie Consent (including the Releases) shall have been obtained and the
same shall be in form reasonably satisfactory to Seller and the Loan Assumption
Agreements shall be fully executed and delivered by all parties thereto.

8.3. Conditions to Obligation of Seller. The obligation of Seller to consummate
the Acquisition is subject to the satisfaction (or waiver by Seller in its sole
discretion) of the following further conditions:

(a) Each representation and warranty of Buyer contained in this Agreement
(i) shall have been true and correct in all respects (in the case of
representations and warranties qualified by materiality) or in all material
respects (in the case of representations and warranties not qualified by
materiality) as of the date of this Agreement and (ii) shall be true and correct
in all respects (in the case of representations and warranties qualified by
materiality) or in all material respects (in the case of representations and
warranties not qualified by materiality) as of the Closing Date with the same
force and effect as if made on the Closing Date, except for those

 

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representations and warranties which address matters only as of an earlier date
(which representations shall have been true and correct in all respects (in the
case of representations and warranties qualified by materiality) or in all
material respects (in the case of representations and warranties not qualified
by materiality) as of such particular date) and Seller shall have received a
certificate dated the Closing Date signed on behalf of Buyer to such effect.

(b) Buyer shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied
with by Buyer at or prior to the Closing Date, and Seller shall have received a
certificate signed on behalf of Buyer by an authorized officer of Buyer to such
effect.

(c) No Proceeding shall be pending or threatened before any court or other
Governmental Entity or other Person wherein an unfavorable Order would
(i) prevent consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation. No such Order shall be in effect.

(d) The Fannie Consent (including the Releases) shall have been obtained and the
same shall be in form reasonably satisfactory to Seller and the Loan Assumption
Agreements shall be fully executed and delivered by all parties thereto.

(e) Delivery by Buyer of the balance of the Purchase Price in accordance with
the provisions of Section 2.4(b) above.

ARTICLE IX

TERMINATION

9.1. Termination.

(a) This Agreement may be terminated and the Acquisition abandoned at any time
prior to the Closing:

(i) by mutual written consent of Buyer and Seller;

(ii) by Buyer or Seller if:

(A) the Closing does not occur on or before September 30, 2013, provided that
the right to terminate this Agreement under this Section 9.1(a)(ii)(A) shall not
be available to any party whose breach of a representation, warranty, covenant
or agreement under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date; or

(B) a Governmental Entity shall have issued an Order or taken any other action,
in any case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Acquisition, which Order or other action is final and
non-appealable;

 

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(iii) by Buyer if:

(A) any condition to the obligations of Buyer hereunder becomes incapable of
fulfillment other than as a result of a breach by Buyer of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Buyer; or

(B) there has been a breach by Seller of any representation, warranty, covenant
or agreement contained in this Agreement, or any representation or warranty of
Seller shall have become untrue, in either case such that the conditions set
forth in Section 8.2(a) or Section 8.2(b) would not be satisfied.

(iv) by Seller if:

(A) any condition to the obligations of Seller hereunder becomes incapable of
fulfillment other than as a result of a breach by Seller of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Seller; or

(B) there has been a breach by Buyer of any representation, warranty, covenant
or agreement contained in this Agreement or any representation or warranty of
Buyer shall have become untrue, in either case such that the conditions set
forth in Section 8.3(a) or Section 8.3(b) would not be satisfied.

(b) The party desiring to terminate this Agreement pursuant to
Section 9.1(a)(ii), (a)(iii) or (a)(iv) shall give written notice of such
termination to the other party hereto.

9.2. Effect of Termination. In the event of termination of this Agreement as
provided in Section 9.1, this Agreement shall immediately become null and void
and, other than in the case of fraud or willful misrepresentation, there shall
be no liability or obligation on the part of Buyer or Seller or their respective
officers, directors, managers, stockholders, members or Affiliates, except as
set forth in Section 9.3; provided that the provisions of Section 6.5
(Confidentiality), Section 7.2 (Public Announcements) and Section 9.3 (Remedies)
and Article XI of this Agreement shall remain in full force and effect and
survive any termination of this Agreement.

9.3. Remedies. Any party terminating this Agreement pursuant to Section 9.1
shall have the right to recover damages sustained by such party as a result of
any breach by the other party of any representation, warranty, covenant or
agreement contained in this Agreement or fraud or willful misrepresentation;
provided, however, that the party seeking relief is not in breach of any
representation, warranty, covenant or agreement contained in this Agreement
under circumstances which would have permitted the other party to terminate the
Agreement under Section 9.1. Upon any termination of this Agreement other than a
termination pursuant to Section 9.1(a)(iv)(B), the Buyer and Seller shall direct
the Escrow Agent to return the Deposit to Buyer within three (3) Business Days
of such termination. Upon any termination of this

 

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Agreement pursuant to Section 9.1(a)(iii)(B), Seller shall reimburse Buyer for
all actual out of pocket costs for third party reports, reasonable legal fees
and other reasonable and customary due diligence and transaction costs incurred
by Buyer or its Affiliates in connection with this transaction.

ARTICLE X

INDEMNIFICATION

10.1. Survival.

(a) All representations and warranties contained in this Agreement, or in any
Schedule, certificate or other document delivered pursuant to this Agreement,
shall survive the Closing for a period of one (1) year.

(b) The covenants and agreements which by their terms do not contemplate
performance after the Closing Date shall not survive the Closing. The covenants
and agreements which by their terms contemplate performance after the Closing
Date shall survive the Closing according to the terms of such covenant (or if no
specific term is stated, for the period of one (1) year).

(c) The obligation to pay or otherwise satisfy any Excluded Liability or the
obligation to pay Taxes allocable to the party in question pursuant to
Section 7.3(a) shall survive indefinitely.

(d) The period for which a representation or warranty, covenant or agreement
survives the Closing is referred to herein as the “Applicable Survival Period.”
In the event a Notice of Claim for indemnification under Section 10.2 is given
within the Applicable Survival Period, the representation or warranty, covenant
or agreement that is the subject of such indemnification claim (whether or not
formal legal action shall have been commenced based upon such claim) shall
survive with respect to such claim until such claim is finally resolved. The
Indemnitor shall indemnify the Indemnitee for all Losses (subject to the
limitations set forth herein, if applicable) that the Indemnitee may incur in
respect of such claim, regardless of when incurred.

10.2. Indemnification by Seller and the Company.

(a) Seller (and, prior to the Closing, the Company) shall indemnify and defend
Buyer and its Affiliates (including, following the Closing, the Company) and
their respective stockholders, members, managers, officers, directors,
employees, agents, successors and assigns (the “Buyer Indemnitees”) against, and
shall hold them harmless from, any and all losses, damages, claims (including
third party claims), charges, interest, penalties, Taxes, diminution in value,
costs and expenses (including legal, consultant, accounting and other
professional fees, costs of sampling, testing, investigation, removal, treatment
and remediation of contamination and fees and costs incurred in enforcing rights
under this Section 10.2) (collectively, “Losses”) resulting from, arising out
of, or incurred by any Buyer Indemnitee in connection with, or otherwise with
respect to:

(i) the failure of any representation and warranty or other statement by Seller
or the Company contained in this Agreement or any Ancillary Agreement executed
by Seller or the Company in connection with the transactions contemplated by
this Agreement, to be true and correct in all respects as of the date of this
Agreement or as of the Closing Date;

 

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(ii) any breach of any covenant or agreement of Seller or the Company contained
in this Agreement or any Ancillary Agreement executed by Seller or the Company
in connection with the transactions contemplated by this Agreement; or

(iii) any fees, expenses or other payments incurred or owed by Seller or the
Company to any agent, broker, investment banker or other firm or person retained
or employed by it in connection with the transactions contemplated by this
Agreement;

(iv) any failure to pay or otherwise satisfy any Excluded Liability;

provided that this Section 10.2 shall not apply with respect to any Loss
relating to Taxes to the extent that indemnification payments for such Loss have
been made pursuant to Section 10.7. Any and all Losses hereunder shall bear
interest from the date incurred until paid at the rate of 8% per annum.

10.3. Indemnification Procedures for Third Party Claims.

(a) In the event that Buyer (“Indemnitee” for purposes of this Section) receives
notice of the assertion of any claim or the commencement of any Proceeding by a
third party in respect of which indemnity may be sought under the provisions of
this Article X (“Third Party Claim”), the Indemnitee shall promptly notify the
Indemnitor in writing (“Notice of Claim”) of such Third Party Claim. Failure or
delay in notifying the Indemnitor will not relieve the Indemnitor of any
liability it may have to the Indemnitee, except and only to the extent that such
failure or delay causes actual harm to the Indemnitor with respect to such Third
Party Claim. The Notice of Claim shall set forth the amount, if known, or, if
not known, an estimate of the foreseeable maximum amount of claimed Losses
(which estimate shall not be conclusive of the final amount of such Losses) and
a description of the basis for such Third Party Claim.

(b) Subject to the further provisions of this Section 10.3, the Indemnitor will
have ten (10) days (or less if the nature of the Third Party Claim requires)
from the date on which the Indemnitor received the Notice of Claim to notify the
Indemnitee that the Indemnitor will assume the defense or prosecution of such
Third Party Claim and any litigation resulting therefrom with counsel of its
choice (reasonably satisfactory to the Indemnitee) and at its sole cost and
expense (a “Third Party Defense”); provided, however, that if the Indemnitor
assumes the Third Party Defense in accordance with the foregoing, Indemnitor
shall nonetheless have the right to discontinue such Third Party Defense if
Indemnitor later in good faith determines that such Third Party Claim is not
within the scope of its indemnity obligation hereunder and provides Indemnitee
with written notice of such determination and a reasonably detailed explanation
setting forth the basis of its conclusion. Any Indemnitee shall have the right
to employ separate counsel in any such Third Party Defense and to participate
therein, but the fees

 

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and expenses of such counsel shall not be at the expense of the Indemnitor
unless the applicable Third Party Claim is properly within the scope of
Indemnitor’s indemnity obligation under Sections 10.1 and 10.2 above and (a) the
Indemnitor shall have failed, within the time after having been notified by the
Indemnitee of the existence of the Third Party Claim as provided in the first
sentence of this paragraph (b), to assume the defense of such Third Party Claim,
(c) the Indemnitor shall have improperly discontinued its Third Party Defense
pursuant to the foregoing provisions, or (d) the employment of such counsel at
Indemnitor’s cost has been specifically authorized in writing by the Indemnitor,
which authorization shall not be unreasonably withheld.

(c) The Indemnitor will not be entitled to assume the Third Party Defense if:

(i) the Third Party Claim seeks, in addition to or in lieu of monetary damages,
any injunctive or other equitable relief;

(ii) the Third Party Claim relates to or arises in connection with any criminal
proceeding, action, indictment, allegation or investigation;

(iii) the Third Party Claim relates to or arises in connection with any
Environmental Action or actions with respect to intellectual property;

(iv) under applicable standards of professional conduct, a conflict on any
significant issue exists between the Indemnitee and the Indemnitor in respect of
the Third Party Claim;

(v) the Indemnitee reasonably believes an adverse determination with respect to
the Third Party Claim would be detrimental to or injure the Indemnitee’s
reputation or future business prospects;

(vi) the Indemnitor has failed or is failing to vigorously prosecute or defend
such Third Party Claim; or

(vii) the Indemnitor fails to provide reasonable assurance to the Indemnitee of
its financial capacity to prosecute the Third Party Defense and provide
indemnification in accordance with the provisions of this Agreement.

(d) If by reason of the Third Party Claim a Lien, attachment, garnishment or
execution is placed upon any of the property or assets of the Indemnitee, the
Indemnitor, if it desires to exercise its right to assume such Third Party
Defense, must furnish a satisfactory indemnity bond or other security
satisfactory to the Indemnitee, in its sole but reasonable discretion, to obtain
the prompt release of such Lien, attachment, garnishment or execution.

(e) If the Indemnitor assumes a Third Party Defense and unless and until
Indemnitor elects to discontinue such Third Party Defense, it will take all
steps necessary in the defense, prosecution, or settlement of such claim or
litigation and will hold all Indemnitees harmless from and against all Losses
caused by or arising out of such Third Party Claim to the extent such Third
Party Claim is properly within the scope of the Indemnitor’s indemnity
obligations under this Article X. The Indemnitor will not consent to the entry
of any judgment or enter into any settlement except with the written consent of
the Indemnitee (which consent shall

 

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not be unreasonably withheld, conditioned or delayed); provided that the consent
of the Indemnitee shall not be required if all of the following conditions are
met: (i) the terms of the judgment or proposed settlement include as an
unconditional term thereof the giving to the Indemnitees by the third party of a
release of the Indemnitees from all liability in respect of such Third Party
Claim, (ii) there is no finding or admission of (a) any violation of Law by the
Indemnitees (or any Affiliate thereof), (b) any violation of the rights of any
Person and (c) no effect on any other Proceeding or claims of a similar nature
that may be made against the Indemnitees (or any Affiliate thereof), and
(iii) the sole form of relief is monetary damages which are paid in full by the
Indemnitor. The Indemnitor shall conduct the defense of the Third Party Claim
actively and diligently, and the Indemnitee will provide reasonable cooperation
in the defense of the Third Party Claim. The Indemnitee will not consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnitor (not to be
unreasonably withheld or delayed). Notwithstanding the foregoing, the Indemnitee
shall have the right to pay or settle any such Third Party Claim, provided that
in such event it shall waive any right to indemnity therefor by the Indemnitor
for such claim unless the Indemnitor shall have consented to such payment or
settlement (such consent not to be unreasonably withheld or delayed) and agreed
to indemnify Indemnitee therefor. If the Indemnitor is not reasonably conducting
the Third Party Defense in good faith and Indemnitee gives notice of such
failure to Indemnitor and the same continues for beyond a reasonable period of
time for Indemnitor to cure such behavior, the Indemnitee shall have the right
to consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnitor and the Indemnitor shall reimburse the Indemnitee promptly for all
Losses incurred in connection with such judgment or settlement to the extent the
applicable Third Party Claim is properly within the scope of Indemnitor’s
indemnity obligations under this Article X.

(f) In the event that (i) an Indemnitee gives Notice of Claim to the Indemnitor
and the Indemnitor fails or elects not to assume a Third Party Defense which the
Indemnitor had the right to assume under this Section 10.3, (ii) the Indemnitor
is not entitled to assume the Third Party Defense pursuant to this Section 10.3,
or (iii) the Indemnitor assumes such Third Party Defense but later elects to
discontinue such Third Party Defense, the Indemnitee shall have the right, with
counsel of its choice, to defend, conduct and control the Third Party Defense,
at the sole cost and expense of the Indemnitor (in the event such Third Party
Defense is properly within the scope of Indemnitor’s indemnity obligations under
this Article X). In each case, the Indemnitee shall conduct the Third Party
Defense actively and diligently, and the Indemnitor will provide reasonable
cooperation in the Third Party Defense. The Indemnitee shall have the right to
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim on such terms as it may deem appropriate; provided,
however, that the amount of any settlement made or entry of any judgment
consented to by the Indemnitee without the consent of the Indemnitor shall not
be determinative of the validity of the claim, except with the consent of the
Indemnitor (not to be unreasonably withheld or delayed). Notwithstanding
Section 11.6 hereof, in connection with any Third Party Claim, the Indemnitor
hereby consents to the nonexclusive jurisdiction of any court in which a
Proceeding in respect of a Third Party Claim is brought against any Indemnitee
for purposes of any claim that the Indemnitee may have under this Article X with
respect to such Proceeding or the matters alleged therein and agrees that
process may be served on the Indemnitor with respect to such a claim anywhere in
the world. If the Indemnitor does not elect to assume a Third Party Defense
which it has the right to assume hereunder, the Indemnitee shall have no
obligation to do so.

 

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(g) Each party to this Agreement shall use its commercially reasonable efforts
to cooperate and to cause its employees to cooperate with and assist the
Indemnitee or the Indemnitor, as the case may be, in connection with any Third
Party Defense, including attending conferences, discovery proceedings, hearings,
trials and appeals and furnishing records, information and testimony, as may
reasonably be requested; provided that each party shall use its best efforts, in
respect of any Third Party Claim of which it has assumed the defense, to
preserve the confidentiality of all confidential information and the
attorney-client and work-product privileges.

10.4. Indemnification Procedures for Non-Third Party Claims. In the event of a
claim for which the Indemnitees are entitled to indemnification pursuant to the
provisions of this Article X that does not involve a Third Party Claim being
asserted against it, the Indemnitee shall send a Notice of Claim to the
Indemnitor. The Notice of Claim shall set forth the amount, if known, or, if not
known, an estimate of the foreseeable maximum amount of claimed Losses (which
estimate shall not be conclusive of the final amount of such Losses) and a
description of the basis for such claim. The Indemnitor will have thirty
(30) days from receipt of such Notice of Claim to provide written notice to
Indemnitee that it disputes the claim. If Indemnitor does not dispute the claim
and if the amount of the Losses is known and not disputed, the amount of such
Losses will be immediately due and payable from Indemnitor to Indemnitee.

10.5. [INTENTIONALLY DELETED].

10.6. No Contribution. Seller acknowledges and agrees that, upon and following
the Closing, the Company shall not have any liability or obligation to
indemnify, save or hold harmless or otherwise pay, reimburse or make Seller
whole for or on account of any indemnification or other claims made by any Buyer
Indemnitee hereunder. Seller shall have no right of contribution against the
Company or any of its Affiliates with respect to any such indemnification or
other claim.

10.7. Tax Indemnification. From and after the Closing Date, Seller shall be
responsible for, shall pay or cause to be paid, and shall indemnify, defend and
hold harmless each Tax Indemnitee against, and reimburse such Tax Indemnitee for
any Taxes that are an obligation of Seller pursuant to Section 7.3(a).

10.8. Procedures Relating to Indemnification of Tax Claims.

(a) If any Taxing Authority or other Person asserts a Tax Claim, then the party
hereto first receiving notice of such Tax Claim promptly shall provide written
notice of such Tax Claim to the other party hereto; provided that the failure of
Buyer to give such prompt notice to Seller of any such Tax Claim shall not
relieve Seller of any of its obligations under this Section 10.8 unless Seller
is prejudiced by such failure. Such notice shall specify in reasonable detail
the basis for such Tax Claim and shall include a copy of any relevant
correspondence received from the Taxing Authority or other Person.

 

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(b) Seller shall have the right to defend or prosecute, at its sole cost,
expense and risk, only those Tax Claims with respect to Taxes for which it is
responsible as set forth in Section 10.7. In order to defend or prosecute any
such Tax Claim, Seller shall notify Buyer that it elects to defend or prosecute
such Tax Claim (“Election Notice”) within thirty (30) days after (i) the date on
which Seller received notice of any such Tax Claim from Buyer (with respect to
Tax Claims as to which Buyer first received notice from a Taxing Authority or
any other Person), or (ii) the date on which Seller delivered to Buyer notice of
any such Tax Claim (with respect to Tax Claims as to which Seller first received
notice from a Taxing Authority or any other Person). With respect to any Tax
Clam as to which Seller has provided an Election Notice to Buyer, Seller shall
defend or prosecute such Tax Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by Seller to a Final
Determination; provided that Seller shall not, without the prior written consent
of Buyer, enter into any compromise or settlement of such Tax Claim that would
result in any Tax detriment to any Tax Indemnitee. Seller shall inform Buyer of
all material developments and events relating to such Tax Claim (including
providing to Buyer copies of all written materials relating to such Tax Claim),
and Buyer or its authorized representatives shall be entitled, at the expense of
Buyer, to attend, but not participate in or control, all conferences, meetings
and proceedings relating to such Tax Claim.

(c) If, with respect to any Tax Claim, Seller fails to deliver an Election
Notice to Buyer within the period provided in Section 10.8(b) or fails
diligently to defend or prosecute such Tax Claim to a Final Determination, then
Buyer shall at any time thereafter have the right (but not the obligation) to
defend or prosecute such Tax Claim, and the reasonable costs of such defense or
prosecution shall become a part of the Tax Claim.

10.9. Tax Treatment of Indemnification Payments. Except as otherwise required by
applicable Law, the parties shall treat any indemnification payment made
hereunder as an adjustment to Purchase Price.

10.10. Other Rights and Remedies Not Affected. The indemnification rights of the
parties under this Article X are independent of and in addition to such rights
and remedies as the parties may have at Law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including the right to seek
specific performance, rescission or restitution, none of which rights or
remedies shall be affected or diminished hereby.

ARTICLE XI

MISCELLANEOUS

11.1. Notices. Any notice, request, demand, waiver, consent, approval or other
communication that is required or permitted hereunder shall be in writing and
shall be deemed given (a) on the date established by the sender as having been
delivered personally, (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier, (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next business day, or
(d) on the fifth day after the date mailed, by certified or registered mail,
return receipt requested, postage prepaid. Such communications, to be valid,
must be addressed as follows:

If to Buyer, to:

NHI-Bickford RE, LLC

13795 S. Murlen Road, Suite 301

Olathe, Kansas 66062

Attn: Brian Heinrichs

Facsimile: (913) 782-4851

And

NHI-Bickford RE, LLC

Attn: John M. Brittingham

Harwell Howard Hyne Gabbert & Manner, P.C.

333 Commerce Street, Suite 1500

Nashville, Tennessee 37201

Facsimile: (615) 251-1059

 

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With a required copy to:

Jay T. Shadwick

11040 Oakmont

Overland Park, Kansas 66210

Facsimile: (913) 498-3538

If to Seller, to:

Care Investment Trust Inc.

780 Third Avenue, 21st Floor

New York, New York 10017

Attn: Torey Riso, Jr.

Facsimile: (212) 446-1409

With a required copy to:

Bass, Berry & Sims PLC

The Tower at Peabody Place

100 Peabody Place, Suite 900

Memphis, TN 38103

Attn: John A. Good

Facsimile: (888) 543-4644

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain); provided, however, that any notice sent by
facsimile shall also be sent contemporaneously by private courier. If more than
one method for sending notice as set forth above is used, the earliest notice
date established as set forth above shall control.

 

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11.2. Amendments and Waivers.

(a) Any provision of this Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.

(b) No failure or delay by any party in exercising any right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

(c) To the maximum extent permitted by Law, (i) no waiver that may be given by a
party shall be applicable except in the specific instance for which it was given
and (ii) no notice to or demand on one party shall be deemed to be a waiver of
any obligation of such party or the right of the party giving such notice or
demand to take further action without notice or demand.

11.3. Expenses. Seller and Buyer shall bear their own costs and expenses in
connection with this Agreement and the transactions contemplated by this
Agreement, including all legal, accounting, financial advisory, consulting and
all other fees and expenses of third parties, whether or not the Acquisition is
consummated.

11.4. Successors and Assigns. This Agreement may not be assigned by either party
hereto without the prior written consent of the other party; provided that,
without such consent, Buyer may transfer or assign, in whole or in part or from
time to time, to one or more of its Affiliates, any of its rights or obligations
hereunder, but no such transfer or assignment will relieve Buyer of its
obligations hereunder. Subject to the foregoing, all of the terms and provisions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.

11.5. Governing Law. This Agreement and the Exhibits and Schedules hereto shall
be governed by and interpreted and enforced in accordance with the Laws of the
State of Kansas, without giving effect to any choice of Law or conflict of Laws
rules or provisions (whether of the State of Kansas or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction other than the
State of Kansas.

11.6. Consent to Jurisdiction. Each party irrevocably submits to the exclusive
jurisdiction of (a) Kansas, and (b) the United States District Court for Kansas
for the purposes of any Proceeding arising out of this Agreement or any
Ancillary Agreement or any transaction contemplated hereby or thereby. Each
party agrees that service of any process, summons, notice or document by U.S.
registered mail to such party’s respective address set forth above shall be
effective service of process for any Proceeding in Kansas with respect to any
matters to which it has submitted to jurisdiction in this Section 11.6. Each
party irrevocably and unconditionally waives any objection to the laying of
venue of any Proceeding arising out of this Agreement or

 

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any Ancillary Agreement or the transactions contemplated hereby or thereby in
Kansas, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such Proceeding brought in any such
court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF OR THEREOF.

11.7. Counterparts. This Agreement may be executed in counterparts, and either
party hereto may execute any such counterpart, each of which when executed and
delivered shall be deemed to be an original and both of which counterparts taken
together shall constitute but one and the same instrument. This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by the other party hereto. The parties agree that the delivery of this
Agreement may be effected by means of an exchange of facsimile signatures with
original copies to follow by mail or courier service.

11.8. Third Party Beneficiaries. No provision of this Agreement is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder; except that in the case of Article X hereof, the other Indemnitees
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, are intended third party beneficiaries of such sections
and shall have the right to enforce such sections in their own names.

11.9. Entire Agreement. This Agreement and the documents, instruments and other
agreements specifically referred to herein or delivered pursuant hereto set
forth the entire understanding of the parties hereto with respect to the
Acquisition. All Schedules referred to herein are intended to be and hereby are
specifically made a part of this Agreement. Any and all previous agreements and
understandings between or among the parties regarding the subject matter hereof,
whether written or oral, are superseded by this Agreement.

11.10. Captions. All captions contained in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement.

11.11. Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

11.12. Specific Performance. Buyer and Seller each agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed by them in accordance with the terms hereof and that each party shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at Law or equity.

 

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11.13. Interpretation.

(a) The meaning assigned to each term defined herein shall be equally applicable
to both the singular and the plural forms of such term and vice versa, and words
denoting either gender shall include both genders as the context requires. Where
a word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.

(b) The terms “hereof”, “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement.

(c) When a reference is made in this Agreement to an Article, Section,
paragraph, Exhibit or Schedule, such reference is to an Article, Section,
paragraph, Exhibit or Schedule to this Agreement unless otherwise specified.

(d) The word “include”, “includes”, and “including” when used in this Agreement
shall be deemed to be followed by the words “without limitation”, unless
otherwise specified.

(e) A reference to any party to this Agreement or any other agreement or
document shall include such party’s predecessors, successors and permitted
assigns.

(f) Reference to any Law means such Law as amended, modified, codified, replaced
or reenacted, and all rules and regulations promulgated thereunder.

(g) The parties have participated jointly in the negotiation and drafting of
this Agreement. Any rule of construction or interpretation otherwise requiring
this Agreement to be construed or interpreted against any party by virtue of the
authorship of this Agreement shall not apply to the construction and
interpretation hereof.

(h) All accounting terms used and not defined herein shall have the respective
meanings given to them under GAAP.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.

 

      CARE INVESTMENTS TRUST INC.       By:  

/s/ Torey Riso

      Name:   Salvatore (“Torey”) V. Riso, Jr.       Title:   President and
Chief Executive Officer Witness:  

/s/ Danielle DePalma

            NHI-BICKFORD RE, LLC       By: NHI PROPCO, LLC, its managing member
      By:  

/s/ J. Justin Hutchens

        Name: J. Justin Hutchens         Title:   President Witness:  

/s/ Kristin S. Gaines

            CARE YBE SUBSIDIARY LLC       By:  

/s/ Torey Riso

      Name:   Salvatore (“Torey”) V. Riso, Jr.       Title:   President and
Chief Executive Officer Witness:  

/s/ Danielle DePalma

     

 

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