Exhibit 10.1

ASSET PURCHASE AGREEMENT

BETWEEN

SUMMER VISTA ASSISTED LIVING, LLC

AND

HARDCOURT DEVELOPMENT NO. 2, LLC,

AS SELLERS,

AND

CHP II PARTNERS, LP,

AS PURCHASER

DATED AS OF FEBRUARY 16, 2017

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TABLE OF CONTENTS

 

1.

 

DEFINITIONS

     1    

1.1

  

DEFINITIONS

     1  

2.

 

PURCHASE AND SALE, ASSETS AND LIABILITIES

     10    

2.1

  

PURCHASE AND SALE

     10    

2.2

  

DESCRIPTION OF THE ASSETS

     10    

2.3

  

EXCLUDED ASSETS

     11    

2.4

  

RETAINED LIABILITIES

     12    

2.5

  

ASSUMED LIABILITIES

     12  

3.

 

PURCHASE PRICE

     12    

3.1

  

PURCHASE PRICE

     12    

3.2

  

DEPOSIT

     13    

3.3

  

PAYMENT OF PURCHASE PRICE

     15    

3.4

  

ALLOCATION OF PURCHASE PRICE

     15  

4.

 

DUE DILIGENCE AND INSPECTION

     15    

4.1

  

RIGHT TO INSPECT

     15    

4.2

  

MATTERS RELATING TO TITLE

     17    

4.3

  

ASSIGNMENT AND ASSUMPTION OF FACILITY CONTRACTS, TENANT LEASES, AND LICENSES AND
PERMITS

     19    

4.4

  

INVENTORY

     19    

4.5

  

LICENSING

     19    

4.6

  

PURCHASER’S ELECTION WHETHER OR NOT TO PROCEED

     20    

4.7

  

RELEASE AND INDEMNIFICATION

     20    

4.8

  

IMMEDIATE NEEDS

     20  

 

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5.

 

REPRESENTATIONS AND WARRANTIES

     21    

5.1

  

SELLER’S REPRESENTATIONS AND WARRANTIES

     21    

5.2

  

PURCHASER’S REPRESENTATIONS AND WARRANTIES

     28  

6.

 

COVENANTS

     30    

6.1

  

CONFIDENTIALITY

     30    

6.2

  

ASSESSMENTS

     31    

6.3

  

CONDUCT OF THE BUSINESS

     31    

6.4

  

LICENSES AND PERMITS

     32    

6.5

  

TAX CONTESTS

     32    

6.6

  

NOTICES AND FILINGS

     33    

6.7

  

FURTHER ASSURANCES

     33    

6.8

  

ESTOPPEL CERTIFICATE

     34    

6.9

  

EXCLUSIVITY

     34    

6.10

  

BULK SALES

     34    

6.11

  

EMPLOYEES

     34    

6.12

  

POST-CLOSING AUDIT

     34    

6.13

  

NON-COMPETE AND RIGHT OF FIRST OFFER

     34    

6.14

  

NON-SOLICITATION

     35    

6.15

  

ACCESS TO INFORMATION

     35    

6.16

  

SELLERS REMITTANCE OF FUNDS

     36    

6.17

  

PURCHASER’S REMITTANCE OF FUNDS

     36    

6.18

  

TRANSITION OF FACILITY AND BUSINESS

     36  

7.

 

CLOSING CONDITIONS

     36    

7.1

  

PURCHASER’S CLOSING CONDITIONS

     36    

7.2

  

FAILURE OF ANY PURCHASER’S CLOSING CONDITION

     38    

7.3

  

SELLERS’ CLOSING CONDITIONS

     39    

7.4

   FAILURE OF SELLERS’ CLOSING CONDITIONS      39  

 

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8.

 

CLOSING

     40    

8.1

   CLOSING DATE      40    

8.2

   CLOSING ESCROW      40    

8.3

   SELLERS’ CLOSING DELIVERIES      40    

8.4

   PURCHASER’S CLOSING DELIVERIES      42  

9.

 

PRORATIONS AND EXPENSES

     43    

9.1

   CLOSING STATEMENT      43    

9.2

   PRORATIONS      43    

9.3

   CASH      45    

9.4

   EMPLOYEES      45    

9.5

   PURCHASER’S TRANSACTION COSTS      45    

9.6

   SELLERS’ TRANSACTION COSTS      45    

9.7

   ALLOCATION OF ACCOUNTS RECEIVABLE      45  

10.

 

DEFAULT AND REMEDIES

     47    

10.1

   SELLERS’ DEFAULT      47    

10.2

   PURCHASER’S DEFAULT      47    

10.3

   LIQUIDATED DAMAGES      47  

11.

 

RISK OF LOSS

     47    

11.1

   CASUALTY      47    

11.2

   CONDEMNATION      48    

11.3

   STOP ADMISSION ORDERS/HOLD ORDERS      48  

12.

 

SURVIVAL, INDEMNIFICATION AND RELEASE

     49    

12.1

   SURVIVAL      49    

12.2

   INDEMNIFICATION BY SELLER      49  

 

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12.3

  

INDEMNIFICATION BY PURCHASER

     49    

12.4

  

INDEMNIFICATION PROCEDURE

     49    

12.5

  

MATERIALITY

     50    

12.6

  

LIMITS ON SELLERS’ INDEMNIFICATION OBLIGATION

     50    

12.7

  

EXCLUSIVE REMEDY FOR INDEMNIFICATION LOSS

     51    

12.8

  

HOLDBACK

     51  

13.

 

TERMINATION

     51    

13.1

  

TERMINATION

     51  

14.

 

MISCELLANEOUS PROVISIONS

     51    

14.1

  

NOTICES

     51    

14.2

  

TIME IS OF THE ESSENCE

     52    

14.3

  

ASSIGNMENT

     52    

14.4

  

SUCCESSORS AND ASSIGNS

     53    

14.5

  

THIRD PARTY BENEFICIARIES

     53    

14.6

  

RULES OF CONSTRUCTION

     53    

14.7

  

SEVERABILITY

     54    

14.8

  

GOVERNING LAW, JURISDICTION AND VENUE

     54    

14.9

  

WAIVER OF JURY TRIAL

     54    

14.10

  

ATTORNEYS’ FEES

     54    

14.11

  

INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES

     55    

14.12

  

ENTIRE AGREEMENT

     55    

14.13

  

FURTHER ASSURANCES

     55    

14.14

  

EFFECT OF DELAY AND WAIVERS

     55    

14.15

  

AMENDMENTS, WAIVERS AND TERMINATION OF AGREEMENT

     55    

14.16

  

EXECUTION OF AGREEMENT

     55  

 

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14.17

   TAX DISCLOSURES      55    

14.18

   LIABILITY OF INTEREST-HOLDERS IN SELLERS AND PURCHASER AND THEIR AFFILIATES
     56    

14.19

   GOOD FAITH EFFORTS      56    

14.20

   POST-EXECUTION DISCLOSURES      56  

 

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List of Exhibits

Exhibit “A” – The Fee Premises

Exhibit “B” – Escrow Agreement

Exhibit “6.13” – ROFO Agreement

Exhibit “8.3.1” – Form of Seller’s Closing Certificate

Exhibit “8.3.2” – Form of Deed

Exhibit “8.3.3” – Form of Bill of Sale

Exhibit “8.3.4” – Form of Assignment and Assumption of Facility Contracts,
Licenses and Permits, Tenant Leases and Resident Agreements

Exhibit “8.3.5” – Form of Assignment and Assumption of Intellectual Property

Exhibit “8.3.11” – Form of Tenant and Resident Notices

Exhibit “8.3.15” – Form of Seller’s Certificate

Exhibit “8.4.3” – Form of Purchaser’s Closing Certificate

List of Schedules

Schedule 2.2.5 – Tenant Leases/Rent Roll

Schedule 2.2.6 – Intellectual Property

Schedule 2.2.7 – Facility Contracts

Schedule 2.2.8 – Licenses and Permits

Schedule 2.2.13 – Rent Roll

Schedule 2.3.2 – Third-Party Assets

Schedule 5.1.3 – Current Manager Assets

Schedule 5.1.9 – Litigation

Schedule 5.1.26 – Financial Statements

Schedule 5.1.28 – Form of Resident Agreement

 

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of February 16, 2017
(the “Effective Date”), by and between SUMMER VISTA ASSISTED LIVING, LLC, a
Florida limited liability company (“Summer Vista”), and HARDCOURT DEVELOPMENT
NO. 2, LLC, a Florida limited liability company (“Hardcourt”, collectively
Summer Vista and Hardcourt may hereinafter be referred to collectively as
“Sellers” and individually as a “Seller”), and CHP II PARTNERS, LP, a Delaware
limited partnership (“Purchaser”) (Sellers and Purchaser are at times
hereinafter referred to individually as a “Party” and collectively as the
“Parties”).

R E C I T A L S

A. Summer Vista owns and operates the senior living facility commonly known as
the “Summer Vista Assisted Living Community” (the “Facility”), and leases from
Hardcourt the Real Property (as defined below) from which the Facility is
operated. Summer Vista and Hardcourt are both wholly-owned subsidiaries of ALF
Investor Group, LLC, a Florida limited liability company (“ALF”).

B. Summer Vista entered into a Management Agreement dated November 1, 2014 with
SRI (as defined below) to operate the Facility on behalf of Summer Vista (the
“Current Management Agreement”).

C. Purchaser desires to purchase, and Sellers desire to sell, the Assets, as
defined herein, relating to the Facility on the terms and conditions set forth
in this Agreement.

NOW, THEREFORE, for valuable consideration, including the promises, covenants,
representations and warranties hereinafter set forth, the receipt and adequacy
of which are hereby acknowledged, the Parties, intending to be legally and
equitably bound, agree as follows.

1. DEFINITIONS

1.1 Definitions. In addition to the terms defined in the body of this Agreement,
the following terms will have the following meanings in this Agreement:

“Affiliate” means two entities are “Affiliates” if:

(a) one of the entities is a Subsidiary of the other entity;

(b) both of the entities are Subsidiaries of the same entity; or

(c) both of the entities are Controlled by the same Person.

“ALF” has the meaning set forth in the recitals of this Agreement.

“Agreement” has the meaning set forth in the first paragraph of this Agreement.

 

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“Applicable Laws” means (i) all federal, state, and local statutes, laws, common
law, rules, regulations, ordinances, codes, guidances, policies, or other legal
requirements of any Governmental Authority, stock exchange, board of fire
underwriters and similar quasi-governmental authority, and (ii) any judgment,
injunction, order or other similar requirement of any court or other
adjudicatory authority of competent jurisdiction, in effect at the time in
question and in each case to the extent the Person or property in question is
subject to the same.

“Assets” has the meaning set forth in Section 2.2 of this Agreement.

“Assumed Liabilities” has the meaning set forth in Section 2.5 of this
Agreement.

“Bankruptcy Code” has the meaning set forth in Section 5.1.16 of this Agreement.

“Books and Records” has the meaning set forth in Section 2.2.12 of this
Agreement.

“Business Day” means any day other than (i) a Saturday, Sunday or any United
States federal legal holiday, or (ii) any day on which banks in Florida are not
open for business.

“Business” means the assisted living and memory care facility currently being
operated by Summer Vista on the Real Property, or any portion thereof, and all
activities related thereto.

“Casualty” has the meaning set forth in Section 11.1 of this Agreement.

“Closing” has the meaning set forth in Section 8.1 of this Agreement.

“Closing Date” means the date on which the Closing takes place.

“Closing Escrow” has the meaning set forth in Section 8.2 of this Agreement.

“Closing Escrow Agreement” has the meaning set forth in Section 8.2 of this
Agreement.

“Closing Statement” has the meaning set forth in Section 9.1 of this Agreement.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any regulations, rulings and guidance issued by the Internal Revenue
Service.

“Condemnation” has the meaning set forth in Section 11.2 of this Agreement.

“Compete” has the meaning set forth in Section 6.13 of this Agreement.

“Consumables” has the meaning set forth in Section 2.2.4 of this Agreement.

“Contracts” means any written or oral indenture, mortgage, deed of trust, lease,
licensing agreement, contract, commitment, instrument or other legally binding
agreement with respect to the Business.

 

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“Control” means:

(a) the right to exercise, directly or indirectly, a majority of the votes which
may be voted at a meeting of (i) the shareholders of the corporation, in the
case of a corporation, (ii) the shareholders of the general partner, in the case
of a limited partnership, or (iii) the equity holders or other voting
participants of a Person that is not a corporation or limited partnership; or

(b) the right to elect or appoint, directly or indirectly, a majority of (i) the
directors of the corporation, in the case of a corporation, (ii) the directors
of the general partner, in the case of a limited partnership, or (iii) the
Persons who have the right to manage or supervise the management of the affairs
and business of a Person that is not a corporation or limited partnership,

(c) and “Controlled” has a corresponding meaning.

“Covered Person” has the meaning set forth in Section 6.13 of this Agreement.

“Crossover Claim” has the meaning set forth in Section 2.4 of this Agreement.

“Cut-Off Time” has the meaning set forth in Section 9.2 of this Agreement.

“Current Manager” means SRI Management, LLC, and its affiliates.

“Current Management Agreement” has the meaning set forth in the recitals of this
Agreement.

“Deed” means the deed to be delivered by Hardcourt to Purchaser pursuant to
Section 8.3.2.

“Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Duplantis” means Patrick Duplantis, in his capacity as a Director of each
Seller.

“Effective Date” has the meaning set forth in the opening paragraph of this
Agreement.

“Employees” means at the time in question all Persons employed full-time and
part-time by or for the benefit of Summer Vista or the Current Manager in
connection with the operation of the Business.

“Environmental Claims” means all claims for reimbursement, remediation,
abatement, removal, clean up, contribution, personal injury, property damage or
damage to natural resources made by any Governmental Authority or other Person
arising from or in connection with (i) the presence or actual or potential
spill, leak, emission, discharge or release of any Hazardous Materials over, on,
in, under or from the Real Property, or any portion thereof, or (ii) any
violation of any Environmental Laws with respect to the Assets.

“Environmental Laws” means all Applicable Laws relating to industrial hygiene or
to environmental or unsafe conditions or to human health including, but not
limited to, those relating to the generation, manufacture, storage, handling,
transportation, disposal, release,

 

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emission or discharge of Hazardous Materials, including those in connection with
the construction, fuel supply, power generation and transmission, waste disposal
or any other operations or processes relating to the Assets, including, without
limitation, the Real Property, or any portion thereof, and those relating to the
atmosphere, soil, surface and ground water, wetlands, stream sediments and
vegetation on, under, in or about the Assets, including, without limitation, any
portion of the Real Property.

“Environmental Liabilities” means all Liabilities under any Environmental Laws
arising from or in connection with the Assets, including, without limitation,
any obligations to manage, control, contain, remove, remedy, respond to, clean
up or abate any actual or potential presence, spill, leak, emission, discharge
or release of any Hazardous Materials, pollution, contamination or radiation
into any water, soil, sediment, air, Improvements or other environmental media.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time and any successor statute and any applicable regulations,
ratings and guidance issued pursuant thereto.

“Escrow Agent” means Title Company, acting in its capacity as escrow agent
pursuant to the terms hereof, or such other escrow agent as is mutually
acceptable to Sellers and Purchaser.

“Escrow Agreement” means the escrow agreement pursuant to which the Escrow
Amount will be held and disbursed after Closing, which escrow agreement shall be
in the form attached hereto as Exhibit “B”.

“Escrow Amount” shall mean the sum of SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($600,000.00) to be delivered at Closing by Sellers to Escrow Agent and to be
held in escrow for the periods and in the manner provided by the Escrow
Agreement.

“Exception Cure Period” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Excluded Assets” has the meaning set forth in Section 2.3 of this Agreement.

“Facility” has the meaning set forth in the recitals of this Agreement.

“Facility Contracts” has the meaning set forth in Section 2.2.7 of this
Agreement.

“FDIC” has the meaning set forth in Section 3.2.2 of this Agreement.

“Fee Premises” means that certain real property more particularly described as
such on Exhibit “A” attached hereto.

“First Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Fixtures” has the meaning set forth in Section 2.2.2 of this Agreement.

“GAAP” means United States generally accepted accounting principles, as in
effect from time to time, consistently applied on a basis consistent with the
application of such principles in the Financial Statements.

 

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“General Intangibles” has the meaning set forth in Section 2.2.11.

“Governmental Authority” or “Governmental Authorities” means any federal, state
or local government or other political subdivision thereof, including, without
limitation, any Person exercising executive, legislative, judicial, regulatory
or administrative governmental powers or functions, in each case to the extent
the same has jurisdiction over the Person or property in question.

“Hazardous Materials” means petroleum and petroleum products, flammable
explosives, radioactive materials (excluding radioactive materials in smoke
detectors), polychlorinated biphenyls, radon, lead/asbestos in any form,
hazardous waste, toxic or hazardous substances, molds, microbiological agents,
and other related materials whether in the form of a chemical, biologic,
element, natural agent, compound, solution, mixture or otherwise, all to the
extent identified, managed, regulated or governed by Environmental Law,
including, but not limited to, those materials defined under Environmental Laws
as “hazardous substances,” “extremely hazardous substances,” “hazardous
chemicals,” “hazardous materials,” “toxic substances,” “solid waste,” “toxic
chemicals,” “air pollutants,” “toxic pollutants,” “hazardous wastes,” “extremely
hazardous waste,” or “restricted hazardous waste”.

“Immediate Needs” has the meaning set forth in Section 4.8 of this Agreement.

“Improvements” means all buildings, structures, and improvements located on or
affixed to the Fee Premises, including all fixtures which constitute real
property under Applicable Law.

“Indemnification Loss” means, with respect to any Indemnitee, any Liability,
including, without limitation, reasonable attorneys’ fees and expenses and court
costs, incurred by such Indemnitee as a result of the act, omission or
occurrence in question.

“Indemnification Claim” has the meaning set forth in Section 12.4.1 of this
Agreement.

“Indemnitee” has the meaning set forth in Section 12.4.1 of this Agreement.

“Indemnitor” has the meaning set forth in Section 12.4.1 of this Agreement.

“Inspection Period” means the period beginning on the Effective Date and ending
at 5:00 p.m., Eastern Standard Time, on the forty-fifth (45th) day following the
Effective Date.

“Inspections” means any inspections, examinations, tests, investigations, or
studies of the Assets, including, without limitation, the Real Property, the
Improvements or the Business, conducted by or on behalf of Purchaser (or any
Affiliate thereof).

“Intellectual Property” means all works of authorship, including without
limitation, all literary works, pictorial, graphic and sculptural works,
architectural works, software, works of visual art, and any other work that may
be the subject matter of copyright protection and all worldwide registrations
thereof; any trademarks, service marks, property names (including, without
limitation, the names as defined in Section 5.1.30), brand names, trade dress,
trade names, designs and any other word, symbol, device, product configuration,
slogan or any combination thereof used to distinguish or identify goods or
services that may be the subject

 

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matter of trademark protection, including all worldwide applications and
registrations therefore and associated goodwill; any patents, invention
disclosures or inventions, including all processes, machines, manufactures and
compositions of matter, designs and any other invention that may be the subject
matter of patent protection, and all worldwide statutory or other legal
protection obtained or obtainable therein, including without limitation all
published and granted patents and pending applications and provisionals,
reissues, divisionals, renewals, extensions, continuations, and
continuations-in-part, design patents and industrial design registrations; all
domain names, URLs, websites, social media presence and accounts, and all data,
content, “look and feel”, operating and underlying code or software of all
websites; all trade secrets, proprietary information, data, and knowledge and
experience of a technical, commercial or administrative nature, including all
proprietary information, know-how, information processes, operating, maintenance
and other manuals, data and databases, computer programs, including all
documentation, design specifications, and flowcharts, operational and other
plans, schematics and drawings, customer data and lists, advertising, marketing
and product concepts and campaigns and other valuable or proprietary information
or data; and all worldwide statutory protection obtained or obtainable thereon
on all of the preceding; all rights to enforce, enjoin or sue, any claims,
judgments, causes of action or other legal and equitable rights and remedies
arising out of or related to any infringement, misappropriation or violation of
any of the foregoing; and all right, title and interest to claim royalties,
residuals, damages and other remuneration for use of any of the foregoing
rights.

“Liability” means any liability, obligation, damage, loss, cost or expense of
any kind or nature whatsoever, whether accrued or unaccrued, and “Liabilities”
has a corresponding meaning.

“Licenses and Permits” has the meaning set forth in Section 2.2.8 of this
Agreement.

“Licensing Approval Email” has the meaning set forth in Section 7.1.13 of this
Agreement.

“Licensing Approvals” has the meaning set forth in Section 4.5 of this
Agreement.

“Management Agreement” means the Management Agreement to be entered by Purchaser
and the Current Manager to operate the Facility effective as of the Closing Date

“New Report Defect” has the meaning set forth in Section 4.2.3 of this Agreement

“New Survey Defect” has the meaning set forth in Section 4.2.3 of this
Agreement.

“New Title Exception” has the meaning set forth in Section 4.2.3 of this
Agreement.

“Ordinary Course of Business” means the ordinary course of business consistent
with Sellers’ past custom and practice for the applicable Business (including
with respect to maintaining a sufficient supply of inventory), taking into
account the seasonality of the Business and such other facts and circumstances
in existence from time to time.

“Other Assets” has the meaning set forth in Section 2.2.15 of this Agreement.

 

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“Party” or “Parties” has the meaning set forth in the first paragraph of this
Agreement.

“Person” means any natural person, firm, corporation, general or limited
partnership, limited liability company, association, joint venture, trust,
estate, Governmental Authority or other legal entity, in each case whether in
its own or a representative capacity.

“Permitted Exception” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Personal Property” has the meaning set forth in Section 2.2.3 of this
Agreement.

“Plan” means a “plan” as that term is defined in Section 3(3) of ERISA or
Section 4975 of the Code.

“Plans and Specifications” has the meaning set forth in Section 2.2.9 of this
Agreement.

“Prorations” has the meaning set forth in Section 9.2 of this Agreement.

“Purchase Price” has the meaning set forth in Section 3.1 of this Agreement.

“Purchaser” has the meaning set forth in the opening paragraph of this
Agreement.

“Purchaser’s Closing Certificate” means that certain document, the form of which
is attached hereto as Exhibit “8.4.3”, to be delivered by Purchaser at Closing.

“Purchaser’s Closing Condition Failure” has the meaning set forth in Section 7.2
of this Agreement.

“Purchaser’s Closing Conditions” has the meaning set forth in Section 7.1 of
this Agreement.

“Purchaser’s Closing Deliveries” has the meaning set forth in Section 8.4 of
this Agreement.

“Purchaser’s Default” has the meaning set forth in Section 10.2 of this
Agreement.

“Purchaser’s Documents” has the meaning set forth in Section 5.2.2 of this
Agreement.

“Purchaser’s Due Diligence Reports” means all studies, reports and assessments
prepared by any Person for or on behalf of Purchaser and at Purchaser’s
direction (other than any internal studies, reports and assessments prepared by
any of Purchaser’s employees, attorneys or accountants) in connection with the
Inspections.

“Purchaser’s Indemnitees” means Purchaser and its Affiliates, and each of their
respective shareholders, members, partners, trustees, beneficiaries, directors,
officers and employees, and the successors, assigns, legal representatives,
heirs and devisees of each of the foregoing.

“Purchaser’s Inspectors” means any Person that conducted any Inspections for or
on behalf of Purchaser or any Affiliate thereof.

 

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“Real Property” means, collectively, the Fee Premises and the Improvements.

“Resident” means any person occupying a portion of the Facility pursuant to a
Resident Agreement.

“Resident Agreements” has the meaning set forth in Section 2.2.13 of this
Agreement.

“Retained Liabilities” has the meaning set forth in Section 2.4 of this
Agreement.

“ROFO Agreement” has the meaning set forth in Section 6.13 of this Agreement.

“Second Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Seller” or “Sellers” has the meaning set forth in the opening paragraph of this
Agreement.

“Sellers’ Closing Certificate” means that certain document, the form of which is
attached hereto as Exhibit “8.3.1”, to be delivered by each Seller at Closing.

“Sellers’ Closing Condition Failure” has the meaning set forth in Section 7.4 of
this Agreement.

“Sellers’ Closing Conditions” has the meaning set forth in Section 0 of this
Agreement.

“Sellers’ Closing Deliveries” has the meaning set forth in Section 8.3 of this
Agreement.

“Sellers’ Default” has the meaning set forth in Section 10.1 of this Agreement.

“Seller’s Documents” has the meaning set forth in Section 5.1.2 of this
Agreement.

“Sellers’ Due Diligence Materials” means all documents and materials provided by
Sellers to Purchaser, pursuant to this Agreement or otherwise, together with any
copies or reproductions of such documents or materials.

“Sellers’ Knowledge” means the actual knowledge of Duplantis after commercially
reasonable investigation, including inquiry of the Current Manager.

“Seller’s Indemnitees” means with respect to each Seller and its Affiliates, and
each of their respective shareholders, members, partners, trustees,
beneficiaries, directors, officers and employees, and the successors, assigns,
legal representatives, heirs and devisees of each of the foregoing.

“Subsidiary” means, in respect of any Person:

(a) any corporation of which more than 50% of the outstanding capital stock
having ordinary voting power to elect the majority of the board of directors of
such corporation is at the time directly or indirectly owned by (i) such Person,
(ii) such Person and one or more subsidiaries of such Person, or (iii) one or
more subsidiaries of such Person; or

 

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(b) any limited or general partnership, joint venture, limited liability company
or other entity as to which (i) such Person, (ii) such Person and one or more of
its subsidiaries, or (iii) one or more subsidiaries of such Person owns, more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies, or the power to elect the general
partner or managing partner (or equivalent thereof), of such limited or general
partnership, joint venture, limited liability company or other entity, as the
case may be.

“Survey Defects” has the meaning set forth in Section 4.2.1 of this Agreement.

“Survey” means the survey of the Real Property, or any portion thereof, to be
obtained by Purchaser, at Purchaser’s option, during the Inspection Period.

“Tax” or “Taxes” means any federal, state, local or foreign, real property,
personal property, sales, use, room, occupancy, ad valorem or similar taxes,
assessments, levies, charges or fees imposed by any Governmental Authority on
Seller with respect to any of the Assets, including without limitation, the
Business, including, without limitation, any interest, penalty or fine with
respect thereto, but expressly excluding any (i) federal, state, local or
foreign income, capital gain, gross receipts, capital stock, franchise, profits,
estate, gift or generation skipping tax, or (ii) transfer, documentary stamp,
recording or similar tax, levy, charge or fee incurred with respect to the
transactions described in this Agreement.

“Tenant Leases” has the meaning set forth in Section 2.2.5 of this Agreement.

“Third-Party Claim” means, with respect to the Person in question, any claim,
demand, lawsuit, arbitration or other legal or administrative action or
proceeding against the Person in question by any other Person that is not an
Affiliate of the Person in question.

“Third-Party Estoppels” has the meaning set forth in Section 6.8 of this
Agreement.

“Title Commitment” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Company” means Fidelity National Title Insurance Company, whose address
is 2400 Maitland Center Parkway, Suite 2400, Maitland, Florida, 32751,
Attention: Sam Sobering.

“Title Exceptions” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Notice” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Policies” has the meaning set forth in Section 4.2.4 of this Agreement.

“Unpermitted Exceptions” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Warranties” has the meaning set forth in Section 2.2.10 of this Agreement.

“WARN Act” means the Worker’s Adjustment and Retraining Notification Act, 29
U.S.C. §2101 et seq., and any similar state and local laws, as amended from time
to time, and any regulations, rules and guidance issued pursuant thereto.

 

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2. PURCHASE AND SALE, ASSETS AND LIABILITIES

2.1 Purchase and Sale. Each Seller agrees to sell the Assets owned by such
Seller to Purchaser and Purchaser agrees to buy the Assets from Sellers, all in
accordance with the terms and conditions set forth in this Agreement.

2.2 Description of the Assets. In this Agreement, the term “Assets” means all of
the following, but expressly excluding the Excluded Assets:

2.2.1 Real Property. The Real Property;

2.2.2 Fixtures. All fixtures located on, attached to and/or forming a part of
the Real Property, other than those which constitute the Improvements (the
“Fixtures”);

2.2.3 Personal Property. All tangible personal property, including, without
limitation, any and all furniture, equipment, machinery, tools, and appliances,
located at the Real Property or used in connection with the Business (the
“Personal Property”);

2.2.4 Consumables. All food, liquor, wine, consumable supplies and inventories
of every kind owned by Sellers as of the Closing Date and located at and used in
connection with the operation of the Business (the “Consumables”);

2.2.5 Tenant Leases. All of Sellers’ right, title and interest in and to all
leases, subleases, licenses, concessions and similar agreements granting to any
other Person the right to use or occupy any portion of the Real Property (other
than the Resident Agreements), a complete listing of which is attached hereto as
Schedule 2.2.5, except to the extent rejected by Purchaser pursuant to
Section 4.3 hereof (the “Tenant Leases”), together with all security deposits
held by Seller thereunder;

2.2.6 Intellectual Property. Any and all Intellectual Property relating to the
Business, including, without limitation, the Intellectual Property identified on
Schedule 2.2.6;

2.2.7 Facility Contracts. To the extent assignable or transferable, all of
Sellers’ right, title and interest in and to any Contracts and any Contracts in
the name of Current Manager, a complete listing of which is attached hereto as
Schedule 2.2.7 (which listing shall include a notation as to any contracts
pursuant to which Duplantis has provided a guaranty), except to the extent
rejected by Purchaser pursuant to Section 4.3 (the “Facility Contracts”),
together with all deposits made or held by Seller thereunder; provided, however,
that if any Contracts are in the name of Current Manager, the same shall be
included in Schedule 2.2.7 as Facility Contracts and Seller shall cause Current
Manager to assign the same to Purchaser at Closing if requested by Purchaser;

2.2.8 Licenses and Permits. To the extent assignable or transferable, all of
Sellers’ right, title and interest in and to any licenses, permits, consents,
authorizations, approvals, registrations and certificates issued by any
Governmental Authority which are held by Sellers with respect to any of the
Assets, including, without limitation, all such licenses, permits, consents,
authorizations, approvals, registrations and certificates issued

 

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by any Governmental Authority necessary for the use, operation, or occupancy of
the Real Property (or any portion thereof) or the Business, a complete listing
of which is attached hereto as Schedule 2.2.8, except to the extent rejected by
Purchaser pursuant to Section 4.3 (the “Licenses and Permits”), together with
any deposits made by Sellers thereunder;

2.2.9 Plans and Specifications. To the extent assignable or transferable, all of
Sellers’ right, title and interest in and to any plans and specifications, blue
prints, architectural plans, engineering diagrams and similar items which
specifically relate to any portion of the Real Property (the “Plans and
Specifications”);

2.2.10 Warranties. To the extent assignable or transferable, all warranties and
guaranties held by Sellers with respect to any of the Assets (the “Warranties”);

2.2.11 Intangible Assets. To the extent assignable or transferable, all of
Sellers’ right, title and interest in and to any and all drawings, surveys,
environmental and soil reports, telephone and facsimile numbers listed in
directories, customer and supplier lists and files, guest lists, credit records,
labels, security codes, all records and sales and other customer data, and any
unexpired guaranties or warranties (the “General Intangibles”);

2.2.12 Books and Records. Copies of all of Sellers’ books and records which
relate to any of the Assets or the Business, but expressly excluding all
documents and other materials which are legally privileged or constitute
attorney work product or an Excluded Asset pursuant to Section 2.3.5 (the “Books
and Records”);

2.2.13 Resident Agreements. The interest of the Summer Vista in, to and under
all resident agreements or similar contracts granting to any other Person the
right to use or occupy any portion of the Real Property (other than Tenant
Leases), a complete listing of which is attached hereto as Schedule 2.2.13,
together with all security deposits held by Summer Vista thereunder (the
“Resident Agreements”); and

2.2.14 Goodwill.    Goodwill of the Business;

2.2.15 Other Assets. All other assets, rights, and interest of Sellers in and to
the Fee Premises, Improvements or Business, not constituting Excluded Assets
(the “Other Assets”).

2.3 Excluded Assets. Notwithstanding anything to the contrary in Section 2.2,
the following property, assets, rights and interests (the “Excluded Assets”) are
excluded from the Assets:

2.3.1 Cash. Except for deposits expressly included in Section 2.2, all cash on
hand or on deposit in any operating account or other account or reserve
maintained in connection with the Real Property or the Business;

2.3.2 Third-Party Assets. Any removable fixtures, personal property or
intellectual property owned by third-parties and more particularly set forth on
the attached Schedule 2.3.2;

 

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2.3.3 Accounts Receivable. Seller’s accounts receivable and rents receivable
accruing prior to the Cut-Off Time;

2.3.4 Unwanted Assets. Any other assets of Sellers that, notwithstanding their
inclusion within the definition of Assets, Purchaser specifically declines to
accept by written notice to Sellers prior to the expiration of the Inspection
Period; and

2.3.5 Certain Sellers Records. Sellers (i) tax and general accounting records in
connection with the Business and minute and corporate record books (but, as to
which Sellers agrees to give Purchaser reasonable access); and (ii) records of
employee payroll and benefits related to Persons hired or contracted for by
Purchaser or Current Manager;

2.4 Retained Liabilities. The parties acknowledge that Purchaser is acquiring
the Assets only and, as such, Purchaser shall not have any obligations or
liabilities concerning or in any way relating to, arising or accruing from the
ownership or operation of the Business prior to the Closing Date, unless the
same are explicitly assumed pursuant to the terms of this Agreement (“Retained
Liabilities”). Notwithstanding the foregoing, if an obligation or liability
concerns or in any way relates to, arises or accrues from the ownership or
operation of the Business both prior to the Closing Date and on and after the
Closing Date (“Crossover Claim”), then the term Retained Liability shall only
include the obligations and liabilities with respect to such Crossover Claim
which occurred prior to the Closing Date. For example, if a lawsuit alleging
damages and liability based upon a pattern of Resident treatment occurring
before and following the Closing Date results in a judgment against both Sellers
and Purchaser, Sellers’ Retained Liability shall be for the portion of such
damages allocable to the period prior to the Closing Date. The rights and
obligations of the Parties under this Section 2.4 shall survive the Closing.

2.5 Assumed Liabilities. At Closing, Purchaser shall assume (i) all Liabilities
under the Tenant Leases, Facility Contracts, Licenses and Permits and Resident
Agreements that are not Retained Liabilities and that arise or accrue on or
after the Closing Date, and (ii) the payment of Taxes and property owner
association assessments, if any, which arise or accrue on or after the Closing
Date (“Assumed Liabilities”). The rights and obligations of the Parties under
this Section 2.5 shall survive Closing.

3. PURCHASE PRICE

3.1 Purchase Price. The purchase price for the Assets is TWENTY-ONE MILLION FIVE
HUNDRED THOUSAND AND NO/100 Dollars ($21,500,000.00) (the “Purchase Price”),
subject to adjustment at Closing as expressly set forth in this
Agreement.    The amount of the Purchase Price allocated to the Real Property
pursuant to Section 3.4 shall be paid at Closing to Hardcourt, and the amount of
the Purchase Price allocated to any Assets other than the Real Property shall be
paid to Sellers as directed by Sellers in writing to Purchaser prior to Closing;
provided, however, that Sellers agree to provide a sufficient amount of the
Purchase Price to Summer Vista in order for the Escrow Amount to be able to be
deducted from the Purchase Price payable to Summer Vista pursuant to
Section 12.8.

 

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3.2 Deposit.

3.2.1 Deposit. Within two (2) Business Days after the Effective Date, Purchaser
shall deliver to Escrow Agent the sum of ONE HUNDRED FIFTY THOUSAND AND NO/100
Dollars ($150,000.00), which shall be held by the Escrow Agent as a deposit
under this Agreement (the “First Deposit”). Unless this Agreement is terminated
prior to the expiration of the Inspection Period, whereupon the First Deposit
shall be promptly returned by Escrow Agent to the Purchaser, Purchaser shall,
within three (3) Business Days following the expiration of the Inspection
Period, deposit with the Title Company an additional sum equal to ONE HUNDRED
FIFTY THOUSAND AND NO/100 Dollars ($150,000.00)(the “Second Deposit”) in good
funds either by certified bank or cashier’s check or by federal wire transfer.
The First Deposit and the Second Deposit (together totaling $300,000.00),
together with any interest earned thereon as provided herein, shall hereinafter
be referred to collectively as the “Deposit”.

3.2.2 Maintenance of Deposit. The Deposit shall be held by the Escrow Agent in
an interest-bearing account and the rate of interest shall be the rate provided
on the account by the applicable depository. All interest will accrue to
Purchaser and be reported to the Internal Revenue Service for the account of
Purchaser with the address provided herein and taxpayer identification number of
36-4813948. The Deposit shall be held by Escrow Agent pursuant to the terms and
conditions of this Agreement with such changes thereto as may be agreed to by
Seller and Purchaser pursuant thereto. The Deposit shall be fully refunded to
Purchaser upon termination of this Agreement by Purchaser prior to the
expiration of the Inspection Period and otherwise if this Agreement is
terminated by Purchaser in accordance with any right of Purchaser to do so under
this Agreement. Otherwise, it shall be non-refundable to Purchaser except as
expressly provided in this Agreement. If the Deposit is to be paid to Sellers
under the provisions of this Agreement, Escrow Agent shall pay the Deposit on
the terms and conditions set forth herein pro rata to Sellers in proportion the
Purchase Price is payable to each Seller pursuant to Section 3.1 in the manner
or as otherwise directed in writing by Sellers. Escrow Agent shall not be
responsible for any penalties, or loss of principal or interest or any delays in
the withdrawal of the Deposit which may be imposed by the depository as a result
of the making or redeeming of the investment pursuant to the instructions of
Purchaser and Sellers, nor shall Escrow Agent be liable for any loss or
impairments of funds while those funds are in the course of collection or while
those funds are on deposit in a financial institution if such a loss or
impairment results from the failure, insolvency or suspension of such financial
institution. Escrow Agent is not responsible for levies by taxing authorities
based on the taxpayer identification number used to establish the account.
Purchaser and Sellers are aware of the Federal Deposit Insurance Corporation
(“FDIC”) coverage limits for each individual depositor. Further, Purchaser and
Sellers understand that Escrow Agent assumes no responsibility for any loss that
occurs due to any individual depositor’s account balance exceeding the amount,
if any, insured by the FDIC, and Purchaser and Sellers will not hold Escrow
Agent liable for any such loss. Purchaser and Sellers further understand that
certain banking instruments are not covered at all by FDIC insurance. The
Deposit held by Escrow Agent shall be subject to the provisions of Chapter 717,
Florida Statutes.

 

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3.2.3 Disbursement of Deposit to Sellers. At Closing, Purchaser shall cause the
Escrow Agent to disburse the Deposit to Sellers as set forth in Section 3.2.2,
and Purchaser shall receive a credit against the Purchase Price in the amount of
the Deposit.

3.2.4 Refund of Deposit to Purchaser. The Deposit shall be nonrefundable to
Purchaser except in the case of a Sellers’ Default, the failure to occur of a
Purchaser’s Closing Condition, or as otherwise expressly set forth herein.
Subject to Section 3.2.6, in any instance where Purchaser has the discretion to
elect to terminate this Agreement, and in fact does elect to terminate this
Agreement, Escrow Agent shall return the Deposit to Purchaser no later than two
(2) Business Days after notice of such termination is given to Escrow Agent by
Purchaser.

3.2.5 Forfeiture of Deposit. Subject to Section 3.2.6, and in accordance with
Section 10.2, if Purchaser’s Default occurs and remains uncured beyond any
applicable cure period, upon the expiration of such cure period and Sellers
election to terminate this Agreement pursuant to Section 10.2, Purchaser shall
forfeit the Deposit and Escrow Agent shall disburse the Deposit to Seller no
later than two (2) Business Days after the expiration of such cure period. In
such case, pursuant to Section 10.2, the Deposit shall be Sellers’ sole and
exclusive remedy, and the Parties shall have no further rights or obligations
under this Agreement, except those which expressly survive such termination.

3.2.6 Disagreements Regarding Deposit. If Escrow Agent shall be unable to
determine at any time to whom the Deposit should be paid or if a dispute should
develop between Sellers and Purchaser concerning the disposition of the Deposit,
then in any such event, Escrow Agent shall pay the Deposit in accordance with
the joint (or consistent) written instructions of Sellers and Purchaser. In the
event that such joint (or consistent) written instructions shall not be received
by Escrow Agent within ten (10) Business Days after Escrow Agent shall have
served written requests for such joint (or consistent) written instructions upon
Sellers and Purchaser, Escrow Agent shall have the right to pay all of the
Deposit into a court of competent jurisdiction in Orlando, Florida and to
interplead Sellers and Purchaser in respect thereof; and, thereafter, Escrow
Agent shall be discharged of any further or continuing obligations in connection
with the Deposit.

3.2.7 Escrow Agent’s Costs and Expenses. If costs and expenses (including
attorneys’ fees) are incurred by Escrow Agent because of litigation or any
dispute between Sellers and Purchaser arising out of the holding of the Deposit,
the non-prevailing party in such dispute shall reimburse Escrow Agent for
reasonable costs and expenses incurred. Sellers and Purchaser hereby agree and
acknowledge that Escrow Agent assumes no Liability in connection with the
holding or investment of the Deposit pursuant hereto, except for the negligence
or willful misconduct of Escrow Agent and its employees and agents. Escrow Agent
shall not be responsible for the validity, correctness or genuineness of any
document or notice referred to herein; and, in the event of any dispute under
this Agreement relating to the disposition of the Deposit, Escrow Agent may seek
advice from its own counsel and, provided that Escrow Agent tenders the Deposit
into a court of competent jurisdiction in Orlando, Florida, Escrow Agent shall
be fully protected in any action taken in good faith in accordance with the
opinion of Escrow Agent’s counsel. Sellers and Purchaser hereby agree and
acknowledge that the Escrow

 

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Agent assumes no Liability in connection with the holding or investment of the
Deposit pursuant hereto, and Sellers and Purchaser hereby agree to indemnify and
hold Escrow Agent harmless from and against all Liability, costs, damages,
including court costs and attorney’s fees, which Escrow Agent may in good faith
sustain or incur in connection with this Agreement, except for the gross
negligence or willful misconduct of Escrow Agent and its employees and agents.

3.3 Payment of Purchase Price.

3.3.1 Payment at Closing. At Closing, Purchaser shall pay to Sellers by wire
transfer an amount equal to the Purchase Price (as set forth in Section 3.1 and
adjusted pursuant hereto), less the Deposit (as allocated among Sellers pursuant
to Section 3.2) and the Escrow Amount (as allocated among Sellers pursuant to
Section 12.8). Purchaser shall cause the wire transfer of funds to be received
by Escrow Agent no later than 5:00 p.m. (Eastern Time) on the Closing Date.

3.3.2 Payment of Escrow Amount. At Closing, Purchaser shall deliver by wire
transfer of funds the Escrow Amount to the Escrow Agent pursuant to the Escrow
Agreement.

3.3.3 Method of Payment. All amounts to be paid by Purchaser to Sellers pursuant
to this Agreement shall be paid by wire transfer of immediately available U.S.
federal funds.

3.4 Allocation of Purchase Price. The Parties agree that the Purchase Price
shall be allocated between the Real Property and the Personal Property for
transfer tax purposes as determined by Purchaser in Purchaser’s sole and
absolute discretion. Except as set forth in the preceding sentence, each Party
shall allocate the Purchase Price among the Assets as determined by such Party
in its sole and absolute discretion; provided, however, in no event shall any
Party allocate less than seventy percent (70%) of the Purchase Price to the Real
Property; provided, further, in no event shall any Party allocate more than FIVE
THOUSAND AND NO/100 DOLLARS ($5,000.00) to the noncompetition provision set
forth in Section 6.1.3 of this Agreement.

4. DUE DILIGENCE AND INSPECTION

4.1 Right to Inspect. At all times prior to Closing, Purchaser and Purchaser’s
Inspectors shall, subject to reasonable advance notice to the Sellers, have the
right to enter upon the Real Property and to perform, at Purchaser’s expense,
such Inspections of and concerning the Assets, and other tests, studies, reviews
and investigations, as Purchaser may deem appropriate. Purchaser shall have the
right to meet and interview upon two (2) Business Days’ notice, with the Sellers
present if Sellers so elect, any managers or employees of the Facility to
discuss the Business, including the revenues, expenses, operation and physical
condition of the Assets. In addition, Purchaser shall have the right, but not
the obligation, to contact such Governmental Authorities as it may elect in
connection with the transactions contemplated by this Agreement. Purchaser shall
undertake commercially reasonable efforts to ensure that the Inspections shall
not unreasonably interfere with the operation of the Business. To the extent in
any Seller’s

 

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possession or control, within three (3) Business Days of the Effective Date
Sellers shall furnish to Purchaser copies of all information with respect to the
Assets, each of which will be a true, correct and complete copy of the document
it purports to be, including but not limited to the following:

(i) All Warranties which are still in effect to which Seller may be entitled to
make a claim;

(ii) All Licenses and Permits;

(iii) The most recent real estate tax statements with respect to the Real
Property, if any;

(iv) Surveys, engineering and architectural plans, drawings and specifications
relating to the Real Property (or any portion thereof), as applicable,
including, without limitation, the Plans and Specifications;

(v) All Contracts;

(vi) Copies of the Books and Records;

(vii) All Tenant Leases and all agreements for real estate commissions,
brokerage fees, finder’s fees or other compensation payable in connection
therewith which will be binding on Purchaser;

(viii) A copy of each form of Resident Agreement currently in effect;

(ix) Three (3) years of certified or audited Facility-level financial statements
for the Facility; and

(x) All other information and documentation that Purchaser may reasonably
request in writing regarding the Assets.

From the Effective Date through Closing, Sellers shall cooperate with Purchaser
in the conduct of its inspections and review of the Assets and shall answer any
questions of Purchaser and provide updates of the rent rolls and other financial
information provided as set forth above or otherwise in the Agreement as the
same are produced or at the request of Purchaser and in any event five
(5) Business Days prior to Closing. Purchaser and Purchaser’s Inspectors shall
take all reasonable precautions to minimize the impact on the Assets of any
Inspections. With respect to physical Inspections of the Assets to be conducted
by Purchaser (e.g., environmental inspections), Purchaser shall retain
professional third-party consultants to complete such Inspections and shall
require such third-party consultants to maintain liability insurance coverage
for their activities that is consistent with liability insurance coverage
customarily maintained by similar professional third-party consultants. Such
third-party consultants will be notified of and advised to comply with the
confidentiality provisions set forth in this Agreement. If Purchaser or
Purchaser’s Inspectors intend to take any sample from the Real Property in
connection with any physical investigations permitted herein, then Purchaser
shall give reasonable advance notice to the Sellers to enable Sellers to have
the opportunity to simultaneously obtain a similar sample in

 

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order to allow Sellers, if Sellers so choose, to perform their own analysis.
Purchaser shall, immediately after any entry, inspection or test, restore the
Assets, in all material respects and at its sole cost, to the condition which
existed immediately prior thereto (to the extent practicable), including
replacing paving and landscaping. The foregoing restoration obligations of
Purchaser shall survive the Closing or earlier termination of this Agreement.

4.2 Matters Relating to Title.

4.2.1 State of Title. Purchaser may obtain a current title commitment (the
“Title Commitment”) with respect to the Real Property, together with legible
copies of all title exception documents.    Purchaser may also obtain, at its
own cost, Surveys during the Inspection Period. Within ten (10) Business Days
after the date of receipt by Purchaser of the Title Commitment and Surveys, but
in any event prior to the expiration of the Inspection Period, Purchaser may
submit to Sellers a written Notice from Purchaser (“Title Notice”) specifying
any alleged defects in or objections to the title shown in the Title Commitment
or the Survey. Any matters to which Purchaser objects in the Title Notice shall
constitute “Title Exceptions”, and any survey defects to which Purchaser objects
in the Title Notice shall constitute “Survey Defects” (the Title Exceptions and
Survey Defects shall collectively be referred to as the “Unpermitted
Exceptions”). Sellers shall notify Purchaser in writing within five (5) Business
Days of receiving the Title Notice (the “Exception Cure Period”) whether
Hardcourt will cure any Unpermitted Exceptions set forth in the Title Notice
and, if Hardcourt elects to cure such Unpermitted Exceptions, Hardcourt shall do
so at its own expense (the failure to so notify Purchaser within such five
(5) Business Days being deemed an election to cure such Unpermitted Exceptions).
Upon Purchaser’s failure to timely object, all matters shown on the Title
Commitment or on the Surveys shall not need to be cured by Hardcourt (each a
“Permitted Exception”). Any matter which Hardcourt elects not to cure shall also
be deemed a Permitted Exception unless Purchaser elects to terminate this
Agreement by written notice to Sellers within ten (10) days after Purchaser
receives written notice of Hardcourt’s election not to cure such objection in
which case the Deposit shall be refunded to Purchaser in accordance with
Section 3.2.4 and Sellers shall have no obligation to reimburse Purchaser for
any out-of-pocket expenses incurred by Purchaser in connection with the
transactions contemplated by this Agreement. If Hardcourt elects to cure any or
all of the Unpermitted Exceptions, but is unable to complete the cure of such
Unpermitted Exceptions before Closing, Purchaser shall have the right, in its
absolute discretion, to elect, upon written notice to Sellers, to either
(a) defer the Closing Date for a reasonable period not exceeding sixty (60) days
to give Hardcourt an opportunity, to either (i) cure such Unpermitted
Exceptions, or (ii) if Purchaser, in its sole and absolute discretion agrees to
accept affirmative title insurance coverage with respect to such Unpermitted
Exceptions, provide the Title Company such assurances as the Title Company
requires to insure Purchaser against any loss arising from such Unpermitted
Exceptions, or (b) to proceed pursuant to Section 4.2.2 below. Failure by
Purchaser to deliver the notice referred to in the immediately preceding
sentence shall be deemed an election under (b) above.

4.2.2 Failure of Title. If on the Closing Date title to the Fee Premises and
Improvements are not insurable by the title company or are subject to any
Unpermitted

 

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Exceptions, Purchaser may elect, as its sole right and remedy, either (i) to
take such title to the interests as can be conveyed, with no abatement of the
Purchase Price (except for abatement to the extent of monetary liens of a
definite, fixed and ascertainable amount), or (ii) to terminate this Agreement
and proceed pursuant to Section 10.1 below; provided, however, notwithstanding
anything to the contrary in this Agreement, including, but not limited to,
Section 7.2, in no event shall Sellers be required to reimburse Purchaser for
any of Purchaser’s out-of-pocket expenses incurred by Purchaser in connection
with the transactions contemplated by this Agreement if (x) this Agreement is
terminated pursuant to Section 4.2.2(ii) due to the Fee Premises and
Improvements not being insurable by the title company (unless such inability is
caused by Sellers’ intentional actions or omissions that were not approved by
Purchaser) or (y) the title company is not able to issue a title policy for the
Real Property pursuant to Section 7.1.4 (unless such inability is caused by
Sellers’ intentional actions or omissions that were not approved by Purchaser)
or (z) this Agreement is terminated pursuant to Section 4.2.2(ii) on the basis
of a New Title Exception or New Survey Defect not created by, through or under
Seller.

4.2.3 Updated Title Commitment, Surveys, and Third Party Reports. If prior to
Closing any update of the Title Commitment discloses any Title Exception that
arose after the Effective Date and was not created by, through or under
Purchaser which is not disclosed in the original Title Commitment previously
obtained by Purchaser (a “New Title Exception”), or any update of the Surveys
obtained by Purchaser discloses any Survey Defect that arose after the Effective
Date and was not created by, through or under Purchaser which is not disclosed
in the Surveys previously obtained by Purchaser (a “New Survey Defect”) or any
updated third-party report obtained by Purchaser discloses a material and
adverse change in the condition of the Facility that arose after the Effective
Date as a result of Sellers’ gross negligence or willful misconduct (a “New
Report Defect”), upon written objection from Purchaser, Sellers shall remove or
cure such New Title Exception, New Survey Defect or New Report Defect at or
prior to Closing. In the event that Sellers fail to remove or cure such New
Title Exception, New Survey Defect or New Report Defect at or prior to Closing,
Purchaser shall be entitled to proceed under Section 4.2.2 above. Other than
those easements contemplated hereby, no Seller will create or permit to exist
any New Title Exception or New Survey Defect.

4.2.4 Title Policies. At Closing, Hardcourt shall take such steps as may be
necessary to cause the Title Company to issue an owner’s title insurance policy
to Purchaser and a loan policy to Purchaser’s lender, as applicable, subject
only to the applicable Permitted Exceptions (the “Title Policies”).

4.2.5 Conveyance of the Fee Premises and Improvements. At Closing, Hardcourt
shall convey the Fee Premises and Improvements to Purchaser subject only to the
Permitted Exceptions (provided, however, the Deed shall not list as a Permitted
Exception any exception for any matters appearing solely on the Survey and not
otherwise appearing in the public records of Escambia County, Florida).

 

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4.3 Assignment and Assumption of Facility Contracts, Tenant Leases, and Licenses
and Permits.

4.3.1 On the Closing Date, the Facility Contracts, Tenant Leases, and Licenses
and Permits approved by Purchaser during the Inspection Period, together with
the Resident Agreements, shall be assigned by Sellers and assumed by Purchaser
as of the Closing Date pursuant to the “Assignment and Assumption” (as described
in Section 8.3.4), with the respective Seller being responsible for the payment
of any fee or other charge imposed by any party in connection with such
transfer. Notwithstanding the foregoing, on or before the termination of the
Inspection Period, Purchaser shall identify to Sellers in writing which Facility
Contracts, Tenant Leases, and Licenses and Permits it agrees to assume, and the
respective Seller shall retain, as Retained Liabilities, all Liability for all
other instruments that would be deemed Facility Contracts, Tenant Leases, or
Licenses and Permits, but for Purchaser’s failure to approve the same.
Notwithstanding the foregoing, Purchaser agrees to assume the Facility Contracts
with Cox Communications and its affiliates for internet, phone, video and other
services provided by Cox Communications and its affiliates, and any Facility
Contract guaranteed by Duplantis, so long as true, correct and complete copies
of the same are provided to Purchaser for review during the Inspection Period.
With respect to any equipment lease that Purchaser agrees to assume, it shall be
a condition to such assumption that at least five (5) Business Days prior to the
Closing Date, the appropriate Seller will obtain and deliver to Purchaser
written statements from the equipment lessors which demonstrate to Purchaser’s
satisfaction that (i) all payments under such equipment lease are current and
that there are no charges owed, and (ii) Purchaser shall not be responsible for
the payment of any charges, penalties or other costs relating to damage,
destruction or loss of such equipment, or a breach or violation of the terms of
such equipment leases that occurred or became due prior to said Closing Date,
and such Seller agrees to pay the same upon five (5) days written demand by
Purchaser or equipment lessor. Notwithstanding anything to the contrary,
Purchaser shall not be responsible for the obligations under any Contracts,
Tenant Leases, and Licenses and Permits that it does not expressly approve in
writing during the Inspection Period and assume in the Assignment and
Assumption.

4.3.2 Purchaser and Sellers hereby agree to utilize commercially reasonable
efforts to have Duplantis, unconditionally and irrevocably, released as a
guarantor of any liability or obligation of Sellers occurring on or after the
Closing Date under any Facility Contract arising out of or related to any
guaranty, if any, of such Facility Contract by Duplantis. In the event that
Duplantis is not so released and thereafter is required to make any payment
pursuant to Duplantis’ guaranty, if any, of any Facility Contract, then
Purchaser agrees to indemnify and hold harmless Duplantis from, and against, any
payment for any such liability or obligation occurring on or after the Closing
Date.

4.4 Inventory. After the Effective Date, Purchaser and its representatives shall
be permitted to enter the Real Property, with the Sellers present if Sellers so
elect, for the purpose of taking an inventory of all Personal Property related
to the Business.

4.5 Licensing. The Parties acknowledge that due to the nature of the Business,
certain regulatory approvals, licenses and authorizations must be obtained from
certain Governmental Authorities prior to Closing (collectively, the “Licensing
Approvals”). Purchaser shall use good faith efforts to facilitate the Licensing
Approvals in favor of Purchaser or

 

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Purchaser’s designated Affiliate, and Sellers shall, or shall cause the Current
Manager, to cooperate with all such efforts by Purchaser and additionally use
good faith efforts to effectuate the transfer of any existing regulatory
approvals, licenses and/or authorizations assigned from Sellers to Purchaser, to
the extent allowed under Applicable Law and/or necessitated by the Current
Management Agreement. Each Seller solely responsible for the payment of any
assessments, fines, penalties, charges or other costs in connection with such
Seller’s licenses which arise prior to the Closing Date. Prior to the expiration
of the Inspection Period, each Seller shall utilize commercially reasonable
efforts deliver to Purchaser evidence reasonably satisfactory to Purchaser that
all existing licenses of such Seller are in good standing and that any
assessments, fines, penalties or other charges have been paid and resolved. This
Section 4.5 shall survive Closing.

4.6 Purchaser’s Election Whether or Not to Proceed. If Purchaser determines in
its sole discretion for any reason, or no reason at all, that it does not desire
to acquire the Assets and Purchaser notifies Sellers and the Escrow Agent of
such determination in writing prior to the expiration of the Inspection Period,
then the Deposit shall be returned to Purchaser, this Agreement shall be of no
further force or effect, and the Parties hereto shall have no further
obligations to the other (except for any obligations or Liabilities that
expressly survive termination of this Agreement). Upon the expiration of the
Inspection Period, the Deposit shall be nonrefundable to Purchaser except in the
case of a Sellers’ Default, the failure to occur of a Purchaser’s Closing
Condition, or as otherwise expressly set forth herein. In any instance where
Purchaser has the discretion to elect to terminate this Agreement (in whole or
in part), and in fact does elect to terminate this Agreement pursuant to this
Article 4, Escrow Agent shall return the Deposit to Purchaser in accordance with
Section 3.2.4.

4.7 Release and Indemnification. Purchaser (for itself and all Purchaser’s
Indemnitees) hereby releases Seller’s Indemnitees for any Indemnification Loss
incurred by any Purchaser Indemnitee arising from or in connection with the
Inspections, except to the extent resulting from the gross negligence or willful
misconduct of any Seller’s Indemnitee. Purchaser shall indemnify, save, insure
pay, defend and hold harmless Seller’s Indemnitees in accordance with Article 12
from and against any Indemnification Loss incurred by any Seller’s Indemnitee
arising from or in connection with the Inspections, except to the extent
resulting from the gross negligence or willful misconduct of any Seller’s
Indemnitee. This Section 4.7 shall survive Closing.

4.8 Immediate Needs. In the event that the Inspections identify any condition
with respect to the Assets which constitute, in the Purchaser’s Inspector’s
reasonable opinion, deferred maintenance or conditions which require prompt
repairs to correct so as to either (a) bring the Assets into compliance with
Applicable Law, (b) to prevent risk of harm to people or property, or (c) to
prevent further degradation of the condition of any of the Assets (collectively,
the foregoing conditions are hereinafter referred to at times as the “Immediate
Needs”), Sellers shall either (i) escrow at Closing such amounts as are required
by Purchaser, in Purchaser’s reasonable discretion, to correct such Immediate
Needs (with any amounts remaining after the correction of such Immediate Needs
being returned to Sellers), (ii) correct such Immediate Needs to Purchaser’s
reasonable satisfaction prior to Closing; provided, however, that if the cost of
such Immediate Needs exceeds $215,000 and Seller declines to correct or escrow
for correction of Immediate Needs exceeding $215,000, Purchaser may elect to
either (x) terminate this

 

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Agreement or (y) proceed to Closing without the correction of such additional
Immediate Needs. Purchaser shall notify Seller in writing of all Immediate Needs
prior to the expiration of the Inspection Period and shall work in good faith
with Seller to determine if Purchaser’s assessment of any condition as an
Immediate Needs is incorrectly characterized. In the event that Purchaser does
not provide Sellers with written notice of any Immediate Needs prior to the
expiration of the Inspection Period, Purchaser shall be deemed to have
determined that there are no Immediate Needs. If Purchaser elects to terminate
this Agreement upon the Sellers refusal to correct or escrow for more than
$215,000 of Immediate Needs, Escrow Agent shall return the Deposit to Purchaser
in accordance with Section 3.2.4. In the event that Sellers fails to either
(y) escrow the amounts which Sellers agreed to escrow pursuant to this
Section 4.8, or (z) correct any Immediate Needs which they agreed to correct
pursuant to this Section 4.8, then Purchaser shall be entitled to terminate this
Agreement and proceed pursuant to Section 10.1 below.

5. REPRESENTATIONS AND WARRANTIES

5.1 Seller’s Representations and Warranties. To induce Purchaser to enter into
this Agreement and to consummate the transactions described in this Agreement,
Sellers, jointly and severally, hereby make the representations and warranties
in this Section 5.1, upon which Sellers acknowledge and agree that Purchaser is
entitled to rely, and as of Closing shall provide a certificate reconfirming
that all such representations and warranties remain true and correct as of the
Closing Date.

5.1.1 Organization and Power. Each Seller is duly formed, validly existing, in
good standing in the jurisdiction of its formation, and is qualified to do
business in the jurisdictions in which the Assets such Seller owns are located
and has all requisite power and authority to own its respective Assets and
conduct its business as currently owned and conducted.

5.1.2 Authority and Binding Obligation. (i) Each Seller has full power and
authority to execute and deliver this Agreement and all other documents to be
executed and delivered by it pursuant to this Agreement (the “Seller’s
Documents”), and to perform all obligations required of by such Seller under
this Agreement and each of Seller’s Documents, (ii) the execution and delivery
by each Seller of this Agreement and, when executed and delivered, Seller’s
Documents, and the performance by each Seller of its obligations under this
Agreement and, when executed and delivered, each of Seller’s Documents, have
been duly and validly authorized by all necessary action by such Seller,
(iii) this Agreement and, when executed and delivered, Seller’s Documents
constitutes, or will constitute, legal, valid and binding obligations of each
Seller enforceable against such Seller in accordance with its and their terms,
except to the extent Purchaser itself is in default hereunder or thereunder; and
(iv) all persons who have executed this Agreement on behalf of each Seller have
been duly authorized to do so by all necessary company action of such Seller and
all persons who execute instruments required to be executed and delivered by
each Seller before or at the Closing, including the Seller’s Documents, shall
have been duly authorized to do so by all necessary company action of each
Seller.

 

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5.1.3 Title to the Assets. Except for Facility Contracts in the name of the
Current Manager which are set forth on Schedule 2.2.7 or other Assets owned or
in the name of the Current Manager, a schedule of which is attached hereto as
Schedule 5.1.3, Sellers own all of the Assets, including, but not limited to the
Fee Premises and the Improvements, subject to the applicable Permitted
Exceptions, free and clear of all liens, mortgages, security interests, adverse
claims, and all encumbrances (other than those that will be released or assumed
upon Closing).

5.1.4 Ownership of Assets. The Assets, together with the Excluded Assets,
constitute all interests in all assets owned or controlled by Sellers, any of
their Affiliates which are located at or used in connection with the operation
of the Business, other than the Facility Contracts held in the name of the
Current Property Manager.

5.1.5 Real Property. To Sellers’ Knowledge, Sellers’ use of the Real Property
complies in all material respects with applicable zoning and land use laws,
rules and regulations and with all applicable building codes, and Sellers have
not received written notice of any zoning, land use or building code violation
relative to the Real Property which has not been cured prior to the date hereof.
To Sellers’ Knowledge (unless Seller is a party thereto), there is no pending
litigation or dispute concerning the location of the lines and corners of the
Real Property. To Sellers’ Knowledge, there is no claim of adverse possession
with respect to the Real Property.

5.1.6 Consents and Approvals; No Conflicts. Subject to the recording of Seller’s
Documents, as appropriate, (a) no filing with, and no permit, authorization,
consent or approval of, any Governmental Authority or other Person is necessary
for execution or delivery by a Seller of any of such Seller’s Documents, or the
performance by a Seller of any of its obligations under this Agreement or any of
Seller’s Documents or the consummation by such Seller of the transactions
described in this Agreement, except to the extent (i) such permit,
authorization, consent or approval has been or will be obtained by a Seller
prior to or at Closing or (ii) obtaining such permit, authorization, consent or
approval is Purchaser’s responsibility hereunder, and (b) neither the execution
and delivery by a Seller of this Agreement or any of such Seller’s Documents,
nor the performance by a Seller of any of its obligations under this Agreement
or any of such Seller’s Documents, nor the consummation by a Seller of the
transactions described in this Agreement, will (i) violate any provision of such
Seller’s organizational or governing documents, (ii) violate any Applicable Law
to which such Seller is subject, (iii) result in a violation or breach of, or
constitute a default under any of the Contracts that affect such Seller or any
of the Assets in any respect, or (iv) result in the creation or imposition of
any lien or encumbrance on any of the Assets or any portion thereof.

5.1.7 Condemnation. Sellers have not received any written notice of any pending
condemnation proceeding or other proceeding in eminent domain and, to Sellers’
Knowledge, no such condemnation proceeding or eminent domain proceeding is
threatened affecting any of the Real Property, or any portion thereof.

5.1.8 Compliance with Applicable Law. Neither Seller has received notice of and
to Sellers’ Knowledge, there is no, and in the last two (2) years there has not
been,

 

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any violation of any provision of Applicable Law (including, but not limited to,
the Americans with Disabilities Act, the WARN Act, COBRA, and those of
environmental agencies), with respect to the ownership, operation, use,
maintenance or condition of the Assets.

5.1.9 Litigation. Except as set forth on Schedule 5.1.9, there is no litigation,
action, suit or other proceeding currently pending, or to Sellers’ Knowledge,
threatened against Sellers or the Facility, at law or in equity, or before any
Governmental Authority or any arbitrator. To the Sellers’ Knowledge, there is no
pending investigation of Sellers or the Facility by any Governmental Agency.
Sellers are not subject to any judgment, injunction, order, writ or decree of
any court of Governmental Agency relating specifically to Sellers or to the
ownership, operation or management of the Facility or the Business.

5.1.10 Taxes. All Taxes which would be delinquent if unpaid at Closing will be
paid in full or prorated at Closing as part of the Prorations pursuant to
Article 9; provided, however, that if any Taxes are payable in installments,
such representation and warranty shall apply only to such installments which
would be delinquent if unpaid at Closing. Sellers have not received any written
notice for an audit or delinquency of any Taxes with respect to any Assets which
has not been resolved or completed. There are no outstanding unpaid municipal
assessment notices against the Assets. Sellers are not currently contesting any
Taxes with respect to any Assets. To Sellers’ Knowledge, all state and local tax
returns and tax reports required to be filed by Sellers with respect to the
Assets on or before the date hereof have been timely filed with the appropriate
Governmental Authorities in all jurisdictions in which such returns and reports
are required to be filed, and all of such returns were true, correct and
complete in all material respects as filed. To Sellers’ Knowledge, all state,
and local income, franchise, sales, use, property, excise, payroll and other
Taxes (including interest and penalties and including estimated Tax installments
where required to be filed and paid) due from or with respect to the Assets
prior to the date hereof have been fully paid, and appropriate accruals have
been made on the books of Sellers for taxes not yet due and payable. To Sellers’
Knowledge, all Taxes and other assessments and levies which Sellers are required
by law to withhold or to collect with respect to the Assets have been duly
withheld and collected, and have been paid over to the proper Governmental
Authorities to the extent due and payable. To Sellers’ Knowledge, there are no
outstanding or pending claims, deficiencies or assessments for Taxes due and
payable, interest or penalties with respect to the Assets by Sellers for any
taxable period, including any tax liens on the Assets. Other than extensions to
file any Seller’s tax returns, there are no agreements by any Seller for the
extension of time for the assessment of any tax.

5.1.11 Licenses and Permits. Sellers have made available, or will make available
no later than within the first five (5) days of the Inspection Period, to
Purchaser a true and complete copies of the Licenses and Permits that are
necessary for the ownership and operation of the Assets. A complete listing of
the Licenses and Permits is attached hereto as Schedule 2.2.8. Sellers have not
received any written notice from any Governmental Authority or other Person of
(i) any violation, suspension, revocation or non-renewal of any Licenses and
Permits that has not been cured or dismissed, or (ii) any failure by

 

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Seller to obtain any Licenses and Permits that are necessary for or relate to
the ownership and/or operation of the Assets that has not been cured or
dismissed. Sellers shall close or cause to be closed any open building permits
or open notices of violation prior to Closing.

5.1.12 Tenant Leases. Schedule 2.2.5 sets forth a true, correct and complete
list of the Tenant Leases, and Sellers have made available, or will make
available no later than within the first five (5) days of the Inspection Period,
to Purchaser a copy of each of the Tenant Leases in Sellers’ possession, which
are true, correct and complete copies of the Tenant Leases in all material
respects. Sellers have not given nor received any written notice of any breach
or default under any of the Tenant Leases that has not been cured. Except as set
forth in Schedule 2.2.5, there are no unpaid brokerage commissions or unpaid
landlord obligations for tenant improvements in connection with the current term
of occupancy or any extension thereof of tenants under the Tenant Leases and to
Sellers’ Knowledge, no tenants are entitled to any rebates, rent concessions or
free rent. No rents due under any of the Tenant Leases are presently assigned,
hypothecated or encumbered by Sellers, other than in connection with any
mortgage encumbering the Real Property which shall be satisfied prior to or in
connection with the Closing. There are no unpaid brokerage commissions or unpaid
landlord obligations for tenant improvements in connection with the current term
of occupancy of tenants under the Tenant Leases. No rent under any of the Tenant
Leases has been prepaid (except for rental for the current month and payments
that are required to be made in advance pursuant to the terms and provisions of
the Tenant Leases and except for prepayments set forth in the Tenant Leases). No
tenant has notified Seller in of its intent to terminate its Tenant Lease prior
to expiration of the term of such Tenant Lease. To Sellers’ Knowledge, no party
to the Tenant Leases in breach or default under any material obligation
thereunder.

5.1.13 Possession. Except pursuant to the Permitted Exceptions, Tenant Leases
and Resident Agreements, no Person other than the Summer Vista has any license,
lease or other right relating to the use or possession of the Real Property or
any part thereof.

5.1.14 Purchase Rights. There are no options or other agreements of any kind,
whereby any Person other than Purchaser will have acquired or will have any
right to acquire title or interest to all or any portion of the Assets, and
there are no purchase contracts, options or other agreements of any kind,
whereby any Person will have acquired or will have any right to acquire title or
interest to all or any portion of the Assets.

5.1.15 Facility Contracts. Schedule 2.2.7 sets forth a true, correct and
complete list of the Facility Contracts. Sellers have made available, or will
make available no later than within the first five (5) days of the Inspection
Period, to Purchaser true, correct and complete copies of all Facility Contracts
to which either Seller is a party, including all material amendments or
modifications to same. Sellers have made available, or will make available
during the Inspection Period, to Purchaser true, correct and complete copies of
all Facility Contracts to which Current Manager is a party, including all
material amendments or modifications to same. To Sellers’ Knowledge, no party to
the

 

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Facility Contracts is in breach or default under any obligation thereunder or
any provisions thereof. To Sellers’ Knowledge, no event has occurred and no
condition exists that with the passage of time or the giving of notice, or both,
would constitute a material default by any Seller or, to Sellers’ Knowledge, by
any other party to a Facility Contract. Each of the Facility Contracts is in
full force and effect in accordance with its terms. Except as set forth on
Schedule 2.2.7, no consent of any Person is required as a condition to the
Sellers’ assignment of the Contracts to Purchaser at Closing. With respect to
any Persons whose consent is required as a condition to Sellers’ assignment of
the Facility Contracts to Purchaser at Closing, Sellers covenants to employ
diligent, good faith efforts to obtain such consent(s) in writing (in a form
reasonably acceptable to Purchaser) and to deliver same to Purchaser prior to
the expiration of the Inspection Period and, if Sellers fail to obtain such
written consent(s) prior to the expiration of the Inspection Period, Sellers
shall continue such efforts thereafter until the Closing Date. If by the Closing
Date any such consent has not been obtained, Purchaser and Sellers shall work
together and reasonably cooperate following Closing to obtain such consents and,
if still unable to obtain such consent, Sellers shall use their reasonable
efforts to provide for the Purchaser the benefits under any such Facility
Contract without such arrangement causing a breach or violation of such Facility
Contract.

5.1.16 Bankruptcy. Sellers are not insolvent within the meaning of Title 11 of
the United States Code, as amended (the “Bankruptcy Code”), and Sellers are able
to repay its debts as they become due. Sellers have not filed or taken any
action to file a voluntary petition, case or proceeding under any section or
chapter of the Bankruptcy Code, or under any similar law or statute of the
United States or any state thereof, relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of its debts and no such
petition, case or proceeding has been filed against Sellers which have not been
dismissed, vacated or stayed on appeal and Sellers has not been adjudicated as a
bankrupt or insolvent or consented to, nor filed an answer admitting or failing
reasonably to contest an allegation of bankruptcy or insolvency. Sellers have
not sought, or consented to or acquiesced in, the appointment of any receiver,
trustee, liquidator or other custodian of it or a material part of its assets,
and Sellers have not made or taken any action to make a general assignment for
the benefit of creditors or an arrangement, attachment or execution has been
levied and no tax lien or other governmental or similar lien has been filed,
against Sellers or a material part of its properties, which has not been duly
and fully discharged prior to the date hereof.

5.1.17 Labor and Employment Matters. Sellers are not a party to any collective
bargaining agreement or relationship with any labor union that affects any of
the Assets. During the three (3) years preceding the date hereof, the Business
has not experienced any labor disputes or labor trouble. To Sellers’ Knowledge,
there are no union organizing activities, strikes, work stoppages or slow-downs
in respect of the Business, nor, to Sellers’ Knowledge, have Sellers been asked
within the past twelve (12) months by any Person to negotiate in connection with
entering into any collective bargaining agreement or other contract or written
understanding with a labor union or organization or any other Person
representing or seeking to represent any Employees. To Sellers’ Knowledge, there
are no outstanding claims or actions or threatened claims or actions, by any
current or former employee of the Business against Sellers or the Business.

 

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5.1.18 Construction Contracts. There are no outstanding Contracts made by
Sellers for the construction or repair of any Improvements, and Sellers shall
discharge and have released of record or bonded all mechanic’s, builder’s or
materialman’s liens, if any, arising from any labor or materials furnished to
any portion of the Real Property prior to the Closing to the extent any such
lien is not bonded over pursuant to Applicable Law.

5.1.19 General Condition of Assets. The Assets are in good working order and
repair, except for normal wear and tear and are mechanically and structurally
sound and free from material defects in materials and workmanship as such are
maintained in the Ordinary Course of Business.

5.1.20 Insurance Policies. Sellers have not received written notice from any
insurance carrier of defects or inadequacies in the Assets which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor. Sellers shall maintain uninterrupted
insurance coverage through the Closing Date.

5.1.21 Environmental Condition of Real Property. To Sellers’ Knowledge, there
are no underground storage tanks on any portion of the Real Property and the
Real Property does not contain any Hazardous Materials (other than any Hazardous
Materials situated at the Real Property in the Ordinary Course of Business or
the ordinary course of business of any tenant or other occupant of the Real
Property which are stored, held, used and disposed of in compliance with
Environmental Laws) and, to Sellers’ Knowledge, there are not any Environmental
Claims or Environmental Liabilities in violation of Environmental Laws in
respect of the Real Property, or any portion thereof.

5.1.22 Management Agreements. Except for the Management Agreement to be executed
at Closing, as of the Closing Date, there will be no management agreements with
respect to the Assets, including, but not limited to, the Current Management
Agreement.

5.1.23 Compliance with Of-Record Matters. Seller has not received, nor given,
any written notice, and to Sellers’ Knowledge is not aware, of any material
violation of any recorded instrument encumbering or relating to any of the
Assets which has not been cured or dismissed, nor does there exist any breach or
default with respect to any of those recorded instruments.

5.1.24 Finders and Investment Brokers. Sellers have not dealt with any Person
who has acted, directly or indirectly, as a broker, finder, financial adviser or
in such other capacity for or on behalf of it in connection with the
transactions contemplated by this Agreement in a manner which would entitle such
Person to any fee or commission in connection with this Agreement or the
transactions contemplated by this Agreement.

5.1.25 Foreign Person. Each Seller is a “United States Person” (as defined in
Section 7701(a)(30)(B) or (C) of the Code) for the purposes of the provisions of
Section 1445(a) of the Code.

 

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5.1.26 Financial Statements. Summer Vista’s financial statements pertaining to
the operation of the Business for calendar year 2016 are attached hereto as
Schedule 5.1.25 (the “Financial Statements”). Except as set forth on Schedule
5.1.25, the Financial Statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied throughout
the period indicated, and present fairly in all material respects the results of
operations and financial condition of the Business for the respective period
indicated.

5.1.27 ERISA. Neither (a) any assets of Sellers, including the Assets, nor
(b) any funds to be used by Sellers with respect to the transactions
contemplated pursuant to this Agreement, are, or at the Closing will be,
pursuant to ERISA or the Code, considered for any purpose of ERISA or
Section 4975 of the Code to be assets of a Plan. Sellers are not executing this
Agreement nor will they be performing their obligations or exercising their
rights or remedies under this Agreement on behalf of or for the benefit of any
Plan. Neither the execution nor delivery of this Agreement by Sellers, nor the
performance by Sellers of its obligations or the exercise of its rights or
remedies under this Agreement, nor any transaction contemplated under this
Agreement, is or will be a “prohibited transaction” within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

5.1.28 Resident Agreements. Schedule 2.2.13 sets forth a true, correct and
complete list and rent roll with respect to the Resident Agreements and Sellers
have made available to Purchaser a copy of each of the Resident Agreements in
Sellers’ possession or control, which are true, correct and complete copies of
the Resident Agreements in all material respects. Sellers have not given nor
received any written notice of any breach or default under any of the Resident
Agreements, which has not been cured. Except as set forth in Schedule 2.2.13, to
Sellers’ Knowledge, no Residents are entitled to any rebates, rent concessions
or free rent. There are no unpaid brokerage commissions or unpaid referral fees
due in connection with any of the Resident Agreements. No amounts due under any
of the Resident Agreements are presently assigned, hypothecated or encumbered by
Seller, other than in connection with any mortgage encumbering any of the Real
Property which shall be satisfied in connection with the Closing. No amounts
owing under any of the Resident Agreements has been prepaid (except for rental
for the current month and payments that are required to be made in advance
pursuant to the terms and provisions of the Resident Agreements). No Resident
has notified Seller in writing of its intent to terminate its Resident Agreement
prior to expiration of the term of such Resident Agreement. The attached
Schedule 2.2.13 accurately summarizes all the existing Resident Agreements,
their material terms and their current payment status. Attached as Schedule
5.1.28 is a true and correct copy of the form of Resident Agreement used by
Sellers at the Facilities and there have not been any material changes to such
form. Prior to Closing, Seller will deliver to Purchaser updated information
current as of no earlier than five (5) Business Days prior to Closing on an
updated Schedule 2.2.13 signed by a representative of Sellers which shall
replace Schedule 2.2.13 for all purposes under this Agreement.

5.1.29 Intellectual Property. To Sellers’ Knowledge, Sellers own all rights in,
and has all rights necessary to transfer, the Intellectual Property to be
transferred hereunder.

 

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5.1.30 Name. Summer Vista operates the Business under the name “Summer Vista
Assisted Living Community”, and neither Seller has received notification of any
claims or actions by any party disputing or challenging Summer Vista’s right to
use such names.

5.1.31 Patriot Act. Sellers, its officers, shareholders, and principals, shall
not transfer the proceeds obtained as a result of this Agreement to any Person
that is listed on the Office of Foreign Assets Control list as “Terrorists” or
“Specially Designated Nationals and Blocked Persons”, or otherwise be in
violation of the International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2001.

5.1.32 Existing Use. To Seller’s knowledge, the Real Property, the use thereof
for the existing Business, and the condition thereof do not violate in any
material respect any applicable deed restrictions, zoning or subdivision
regulations, urban redevelopment plans, local, state or federal environmental
law or regulation or any building code or fire code applicable to any of the
Assets and are not designated by any Governmental Authority to be in a flood
plain area. To Sellers’ Knowledge, there are no conditions or state of facts
which would preclude, materially limit or materially restrict the use of the
Assets for the Business.

5.1.33 Restriction of Access. To Sellers’ Knowledge, there are no current
federal, state, county or municipal plans to materially restrict or materially
change access to any part of the Real Property from any highway or road leading
directly to or abutting any part of the Real Property.

5.1.34 Medicare and Medicaid. No payments under Medicare, Medicaid or other
similar Governmental Authority payor programs have been received by Sellers or,
to Seller’s knowledge, the Current Manager.

5.1.35 Call Systems. Summer Vista utilizes and maintains life safety pendants or
other forms of similar call systems at the Facility, all of which are in proper
working order and sufficient in number to serve the residents at the Facility.

5.1.36 Additional Land. Neither Seller nor any Affiliate of either Seller owns
any commercial property within a seven (7) mile radius of the Facility.

5.1.37 Community/Entrance Fees. No refundable “community fees”, “entrance fees”
or similar charges have been or are charged to Residents of the Facility.

5.1.38 Affordable Housing Units. The Facility is not required to lease or
reserve any unit or bedroom as an affordable housing unit or bedroom for low or
moderate income residents pursuant to any written agreement binding on Sellers.

5.2 Purchaser’s Representations and Warranties. To induce Sellers to enter into
this Agreement and to consummate the transactions described in this Agreement,
Purchaser hereby makes the representations and warranties in this Section 5.2,
upon which Purchaser acknowledges and agrees that Sellers are entitled to rely,
and as of Closing shall provide a certificate reconfirming that all such
representations and warranties remain true and correct as of the Closing Date.

 

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5.2.1 Organization and Power. Purchaser is duly incorporated or formed (as the
case may be), validly existing and in good standing in the laws of the
jurisdiction of its incorporation or formation, and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as currently being conducted.

5.2.2 Authority and Binding Obligation. Purchaser has full power and authority
to execute and deliver this Agreement and to perform all obligations of
Purchaser arising under this Agreement. Subject to Purchaser obtaining approval
from its board of directors during the Inspection Period, Purchaser has full
power and authority to execute and deliver all other documents to be executed
and delivered by Purchaser pursuant to this Agreement (the “Purchaser’s
Documents”), and to perform all obligations of Purchaser arising under each of
the Purchaser’s Documents. The execution and delivery by the signer on behalf of
Purchaser of this Agreement and, when executed and delivered, each of the
Purchaser’s Documents, and the performance by Purchaser of its obligations under
this Agreement, and when executed and delivered, each of the Purchaser’s
Documents, has been, or will be, duly and validly authorized by all necessary
actions by Purchaser. This Agreement and, when executed and delivered, each of
the Purchaser’s Documents, constitutes, or will constitute, legal, valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with its and their terms, except to the extent Seller is in default thereunder.
Unless Purchaser terminates this Agreement prior to the end of the Inspection
Period as provided for herein, following the expiration of the Inspection
Period, Purchaser shall be deemed to have represented that it has obtained all
necessary board of directors approvals.

5.2.3 Consents and Approvals; No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any Governmental Authority or other
Person is necessary for the execution or delivery by Purchaser of this Agreement
or the performance by Purchaser of any of its obligations under this Agreement.
Subject to Purchaser obtaining the approval of its board of directors during the
Inspection Period, no filing with, and no permit, authorization, consent or
approval of, any Governmental Authority or other Person is necessary for the
execution or delivery by Purchaser of any of the Purchaser’s Documents, the
performance by Purchaser of any of its obligations under any of the Purchaser’s
Documents, or the consummation by Purchaser of the transactions contemplated by
this Agreement or any of the Purchaser’s Documents. With approval of Purchaser’s
board of directors, neither the execution and delivery by Purchaser of any of
the Purchaser’s Documents, nor the performance by Purchaser of any of its
obligations under any of the Purchaser’s Documents, nor the consummation by
Purchaser of the transactions described in this Agreement, will: (a) violate any
provision of the organizational or governing documents of Purchaser; (b) violate
any Applicable Law to which Purchaser is subject; or (c) result in a violation
or breach of or constitute a default under any contract, agreement or other
instrument or obligation to which Purchaser is a party or by which any of
Purchaser’s properties are subject except, in the case of the immediately
preceding clauses (b) and (c), where such violation, breach or default would not
have a material adverse effect on the Purchaser’s ability to consummate the
transactions contemplated hereby and by the Purchaser’s Documents.

 

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5.2.4 Finders and Investment Brokers. Purchaser has not dealt with any Person
who has acted, directly or indirectly, as a broker, finder, financial adviser or
in such other capacity for or on behalf of Purchaser in connection with the
transactions described by this Agreement in any manner which would entitle such
Person to any fee or commission in connection with this Agreement or the
transactions described in this Agreement.

6. COVENANTS

6.1 Confidentiality.

6.1.1 Disclosure of Confidential Information. The Parties acknowledge and agree
that the existence of this Agreement, the terms of this Agreement and any other
information disclosed in Sellers’ Due Diligence Materials, Purchaser’s Due
Diligence Reports or any other documents, materials, data or other information
with respect to the Assets which is not generally known to the public shall be
confidential except to the extent already within the public domain or as
otherwise required by Applicable Law (including but not limited to in connection
with public disclosure obligations required by the United States Securities and
Exchange Commission). Notwithstanding the foregoing, Purchaser may reveal and
deliver Sellers’ Due Diligence Materials, Purchaser’s Due Diligence Reports, and
all other documents, information, and materials concerning the Facility to its
agents, representatives, lenders, investors, principals, and Affiliates. Nothing
herein shall restrict or limit Sellers or Purchaser from communicating with
tenants, lenders, contract parties, owners’ associations, or Governmental
Authorities in connection with obtaining estoppels or other required consents or
approvals, as may be reasonably necessary to consummate the transactions
contemplated under this Agreement, or Purchaser from contacting Sellers’ company
officials, property engineers and architects, and other third-party consultants
assisting Purchaser in its investigation of the Assets, subject to
Section 6.1.3. Nothing herein shall restrict Purchaser from communicating the
existence and progress of the transactions contemplated by this Agreement to its
agents, representatives, potential managers, lenders, investors, principals or
affiliates. Nothing herein shall restrict or limit Sellers from communicating
the existence and progress of the transactions contemplated by this Agreement to
their lenders.

6.1.2 Public Announcements. Prior to Closing, no Party shall have the right to
make a public announcement or disclosure regarding the transactions described in
this Agreement without the prior approval of the other Party. Sellers and
Purchaser shall approve the timing, form and substance of any such public
announcement or disclosure, which approval shall not be unreasonably withheld,
conditioned or delayed, except if a Party is required to make a public
announcement or disclosure under Applicable Law, in which case no such approval
by any other Party shall be required but each Party shall utilize commercially
reasonable efforts to allow the other Party to review such announcement or
disclosure. Following Closing, each Party shall have the right to make a public
announcement or disclosure regarding the transactions described in this
Agreement without the necessity of approval by the other Party.

 

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6.1.3 Communication with Governmental Authorities. Purchaser and its
representatives and consultants shall have the right to review building
department, health department and other local Governmental Authority records
with respect to the Assets and the operation of the Business and request written
or verbal confirmation of zoning and any other compliance by the Assets with any
Applicable Laws. Purchaser and its representatives and consultants shall have
the right to contact Governmental Authorities to pursue the issuance of any
Licenses and Permits desired by Purchaser.

6.2 Assessments. Any assessments (or installments thereof) for improvements or
other work at any portion of the Real Property incurred prior to Closing shall
be the responsibility of and paid by Sellers and Sellers shall indemnify, save,
insure, pay, defend and hold Purchaser harmless from and against any claims
therefor any Liability arising therefrom. The obligations under this Section 6.2
shall survive Closing.

6.3 Conduct of the Business.

6.3.1 Operation, Maintenance and Repair in Ordinary Course of Business. From the
Effective Date until Closing or earlier termination of this Agreement, Sellers
shall conduct the Business in the Ordinary Course of Business including, without
limitation, (a) performing maintenance and repairs and making capital
improvements to the Real Property in the Ordinary Course of Business; and
(b) maintaining insurance coverage consistent with Sellers’ risk management
policies in place as of the date hereof; and (c) replacing and/or repairing
Personal Property in the Ordinary Course of Business. Summer Vista shall
maintain the Assets and maintain adequate supplies and inventory in accordance
with the Ordinary Course of Business (such obligation to include the maintenance
of Seller’s casualty and liability insurance policies in the Ordinary Course of
Business), subject to reasonable wear and tear and further subject to
destruction by casualty or eminent domain. Purchaser shall have the right to
inspect the Assets prior to Closing to determine if either Seller has breached
its covenants in this Section 6.3.1. Sellers shall in all material respects
comply with the terms conditions and requirements under the Contracts, Tenant
Leases, and Licenses and Permits, and shall continue to make all payments due
thereunder prior to delinquency (whether or not Purchaser shall assume the
same). Sellers shall not sell, remove or otherwise dispose of any Assets other
than in the Ordinary Course of Business.

6.3.2 Facility Contracts, Tenant Leases, Resident Agreements and Licenses and
Permits. From the Effective Date until Closing or earlier termination of this
Agreement, Sellers shall not, (a) without Purchaser’s prior written consent,
which shall not be unreasonably withheld, conditioned or delayed, amend, extend,
renew or terminate any of the existing Facility Contracts, Licenses and Permits,
Tenant Leases or Resident Agreements except in the Ordinary Course of Business,
or (b) without Purchaser’s prior written consent in its sole discretion procure
any new Contract, Tenant Leases, Licenses and Permits or Resident Agreements,
except, in each instance, in the Ordinary Course of Business, or in the event
that Sellers are required to act on an emergency basis to enter

 

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into any such Contract to prevent material damages to the Assets or the
operation of the Business. Notwithstanding the foregoing, from the Effective
Date until the Closing or earlier termination of this Agreement, should Sellers
enter into any such new Contracts, Tenant Leases, Licenses and Permits or
Resident Agreements, whether or not in the Ordinary Course of Business, or
should Sellers become aware of any Contracts or Licenses and Permits or Resident
Agreements that were not previously disclosed to Purchaser, Sellers shall
immediately disclose the same to Purchaser in writing, and Purchaser shall have
the right take an assignment of such Contracts, Tenant Leases, Licenses and
Permits at Closing pursuant to the terms of this Agreement, but shall be
required to take an assignment at Closing of such new Resident Agreements so
long as the same are entered into on Sellers’ standard form of Resident
Agreement and at rates at or above those charged to other Residents of the
Facility. If Purchaser elects not to take an assignment of any such new
Contracts, Tenant Leases, and Licenses and Permits, such Contracts, Tenant
Leases, and Licenses and Permits shall be deemed Retained Liabilities of
Sellers.

6.3.3 Interim Reports. From the Effective Date until Closing (or termination of
this Agreement), Summer Vista shall cause the Current Manager to provide
Purchaser with copies of all monthly financial reports and rent rolls for the
Facility which are otherwise provided to Summer Vista under the Current
Management Agreement.

6.3.4 Title. From the date of this Agreement until the Closing or earlier
termination of this Agreement, Sellers shall not create any Title Exception
which adversely affects any portion of the Real Property.

6.4 Licenses and Permits. Purchaser shall be responsible for facilitating the
transfer of all transferred Licenses and Permits from Sellers to Purchaser or
Purchaser’s designee, and Purchaser shall be responsible for obtaining all other
new licenses and permits (to the extent the existing Licenses and Permits are
not transferable). Purchaser shall, at its sole cost and expense, promptly
submit all necessary applications and other materials to the appropriate
Governmental Authority and take such other actions to effect the transfer of the
transferred Licenses and Permits or issuance of new licenses and permits as of
the Closing, and Sellers shall reasonably cooperate with Purchaser to cause the
transferred Licenses and Permits to be transferred or new licenses and permits
to be issued to Purchaser. This Section 6.4 shall survive the Closing.

6.5 Tax Contests.

6.5.1 Taxable Period Terminating Prior to Closing Date. Sellers shall retain the
right, at its sole cost and expense, to commence, continue and settle any
proceeding to contest any Taxes for any taxable period which terminates prior to
the Closing Date, and shall be entitled to any refunds or abatements of Taxes
awarded in such proceedings; provided, however, Sellers shall indemnify and hold
Purchaser harmless from and against any Indemnification Loss incurred by
Purchaser as a result of Sellers exercising its rights to so contest any Taxes
under this Section 6.5.1. This Section 6.5.1 shall survive the Closing.

 

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6.5.2 Taxable Period Including the Closing Date. Sellers shall have the right to
commence, continue and settle any proceeding to contest any Taxes for any
taxable period which includes the Closing Date. Notwithstanding the foregoing,
if Purchaser desires to contest any Taxes for such taxable period prior to
Closing and neither Seller has commenced any proceeding or process to contest
any such Taxes for such taxable period, Purchaser, may request a Seller to do
so. If a Seller desires to contest such Taxes, such Seller shall provide written
notice to Purchaser within ten (10) days after receipt of Purchaser’s request
confirming that such Seller will contest such Taxes, in which case such Seller
shall proceed to contest such Taxes, and Purchaser shall not have the right to
contest such Taxes. If such Seller fails to provide such written notice
confirming that such Seller will contest such Taxes within such ten (10) day
period, Purchaser shall have the right to contest such Taxes, and such Seller
shall reasonably cooperate with respect to any such contest made by Purchaser.
Any refunds or abatements awarded in such proceedings shall be used first to
reimburse the Party contesting such Taxes for the reasonable costs and expenses
incurred by such Party in contesting such Taxes, and the remainder of such
refunds or abatements shall be prorated between such Seller and Purchaser as of
the Cut-Off Time, and the Party receiving such refunds or abatements promptly
shall pay such prorated amount due to the other Party. This Section 6.5.2 shall
survive the Closing.

6.5.3 Cooperation. Sellers and Purchaser shall use commercially reasonable
efforts to cooperate with the Party contesting the Taxes (at no cost or expense
to the Parties not contesting the Taxes other than any de minimis cost or
expense or any cost or expense which the requesting Party agrees in writing to
reimburse) and to execute and deliver any documents and instruments reasonably
requested by the Party contesting the Taxes in furtherance of the contest of
such Taxes. This Section 6.5.3 shall survive the Closing.

6.6 Notices and Filings. Sellers and Purchaser shall use commercially reasonable
efforts to cooperate with each other (at no cost or expense to the Parties whose
cooperation is requested, other than any de minimis cost or expense or any cost
or expense which the requesting Party agrees in writing to reimburse) to provide
written notice to any Person under any Facility Contracts, Tenant Leases,
Licenses and Permits or Resident Agreements and to effect any required
registrations or filings with any Governmental Authority or other Person,
regarding the change in ownership of the Assets.

6.7 Further Assurances. From the Effective Date until the Closing or termination
of this Agreement, Sellers and Purchaser shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate the transactions
described in this Agreement, including, without limitation, (a) obtaining all
necessary consents, approvals and authorizations required to be obtained from
any Governmental Authority or other Person under this Agreement or Applicable
Law, and (b) effecting all registrations and filings required under this
Agreement or Applicable Law. After Closing, Sellers and Purchaser shall use
commercially reasonable efforts (at no cost or expense to such Party, other than
any de minimis cost or expense or any cost or expense which the requesting Party
agrees in writing to reimburse) to further effect the transactions contemplated
in this Agreement.

 

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6.8 Estoppel Certificate. Sellers shall obtain estoppel certificates and deliver
the same to Purchaser as of or prior to the Closing Date, from any third party
required by Purchaser as a result of its due diligence regarding the Assets (the
“Third-Party Estoppels”), in forms reasonably satisfactory to Purchaser and
indicating Seller is in compliance with its obligations under the agreement
which is the subject of such estoppel certificate, including, without
limitation, estoppel certificates regarding Personal Property used in the
operation of the Business and any Facility Contracts.

6.9 Exclusivity. Sellers covenant and agree to refrain during the term of this
Agreement from making, accepting, encouraging or soliciting or otherwise
pursuing any other offer or proposal or agreement regarding the sale of the
Assets or any portion thereof or any interest therein, and will deal exclusively
with Purchaser in good faith toward the completion of the transactions
contemplated herein unless this Agreement shall be terminated as provided
herein.

6.10 Bulk Sales. Sellers shall, at no expense to Purchaser, comply with all
applicable “bulk sales laws” in a timely manner, taking into account the timing
of the Closing.

6.11 Employees. Seller has no employees at the Facility and all Employees at the
Facility are employees of SRM Management Group, LLC, an affiliate of Current
Manager, and leased to Summer Vista. Sellers and Purchaser agree that all
Employees shall remain employees of Current Manager after Closing. Sellers shall
be solely responsible to Current Manager for amounts owed to Current Manager
with respect to the Employees for all time periods prior to the Closing Date,
including any amounts owed to Current Manager in connection with all Employees’
wages, salaries, bonuses, employment taxes, withholding taxes accruing prior to
the Closing Date, and all accrued vacation days, sick days and personal days
accruing prior to the Closing Date. Any unpaid amounts owed to Current Manager
with respect to amounts owed to Employees for wages, salaries, bonuses,
employment taxes, withholding taxes prior to the Closing Date, and all accrued
vacation days, sick days and personal days accruing prior to the Closing Date
shall paid to Current Manager by Sellers at Closing.

6.12 Post-Closing Audit. If requested by Purchaser, and to the extent required
by any Applicable Law, regulations and statutes governing Purchaser or any of
its investors, partners or members, Sellers acknowledge and agree to assist the
Purchaser in conducting, no later than seventy-five (75) days following the
Closing Date, an audit of financial statements for the Facility as specified by
Rule 3-05 of Regulation S-X of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, provided such audit shall be at the
sole cost and expense of Purchaser. In connection therewith, Sellers agree to
obtain and provide to the auditors any and all data and financial information in
the possession of Sellers which are reasonably necessary or required by the
auditors in connection with their timely preparation and conducting of the
foregoing audit. The rights and obligations of Purchaser and Sellers under this
Section 6.12 shall survive Closing.

6.13 Non-Compete and Right of First Offer. Sellers agree that for the period
commencing on the Closing Date and ending on the third (3rd) anniversary of the
Closing Date, Sellers shall not, and shall not cause or permit any of their
Subsidiaries or Affiliates (each, a “Covered Person”) to, engage directly or
indirectly, in any capacity, in any activities that

 

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Compete with the business of developing, owning, operating, leasing or managing
an assisted living or memory care facility within seven (7) miles of the
Facility. For purposes of this provision, “Compete” means (a) to, directly or
indirectly, conduct, facilitate, participate or engage in, or bid for or
otherwise pursue an assisted living or memory care facility, whether as a
principal, sole proprietor, partner, stockholder, or agent of, or consultant to
or manager for, any Person or in any other capacity, or (b) to, directly or
indirectly, have any ownership interest in any Person or business which
conducts, facilitates, participates or engages in, or bids for or otherwise
pursues an assisted living or memory care facility, whether as a principal, sole
proprietor, partner, stockholder, or agent of, or consultant to or manager for,
any Person or in any other capacity. Notwithstanding the foregoing, this
Section 6.13 shall not apply to or in any way prohibit or restrict any existing
ownership interests or operations of a Covered Person as of the day of Closing.
Further, Sellers agree to enter into a Right of First Offer Agreement in the
form attached hereto as Exhibit 6.13 (the “ROFO Agreement”) to purchase any new
independent living community developed by Sellers or any of their Subsidiaries
or Affiliates within seven (7) miles of the Facility. The parties recognize and
acknowledge that a breach of this Section 6.13 by Sellers or any of its
Subsidiaries or Affiliates will cause irreparable and material loss and damage
to Purchaser and hereby consent to the granting by any court of competent
jurisdiction of an injunction or other equitable relief, without the necessity
of posting a bond, cash or otherwise, and without the necessity of actual
monetary loss being proved or Purchaser’s establishing the inadequacy of any
remedy at law, and order that the breach or threatened breach of such provisions
may be effectively restrained. The provisions of this Section 6.11 shall
expressly survive the Closing.

6.14 Non-Solicitation. Sellers agree not to directly or indirectly solicit,
divert or accept business from any Resident or employee of the Business, or
otherwise interfere with the relationship between Purchaser or any Affiliate of
Purchaser and any Resident, employee, customer, supplier, distributor or
manufacturer of or to the Business. The Parties recognize and acknowledge that a
breach of this Section 6.14 by Sellers or any of its Subsidiaries or Affiliates
will cause irreparable and material loss and damage to Purchaser and hereby
consent to the granting by any court of competent jurisdiction of an injunction
or other equitable relief, without the necessity of posting a bond, cash or
otherwise, and without the necessity of actual monetary loss being proved or
Purchaser’s establishing the inadequacy of any remedy at law, and order that the
breach or threatened breach of such provisions may be effectively restrained.
The provisions of this Section 6.14 shall expressly survive the Closing and
shall terminate on the third (3rd) anniversary of the Closing Date.

6.15 Access to Information. The Parties acknowledge that after Closing each
Party may need access to information or documents in the control or possession
of the other Party for the purposes of concluding the transactions herein
contemplated, tax returns or audits and other legal requirements, or the
prosecution or defense of third party claims. Accordingly, each Party shall
keep, preserve and maintain in the ordinary course of business, and as required
by legal requirements and relevant insurance carriers, all books, records
(including Resident records), documents and other information in the possession
or control of such Party and relevant to the foregoing purposes at least until
the expiration of any applicable statute of limitations or extensions thereof.
Each Party shall cooperate fully with, and make available for inspection and
copying by, the other Party, its employees, agents, counsel and accountants
and/or governmental authorities, upon written request and at the expense of the
requesting Party, such books, records

 

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documents and other information to the extent reasonably necessary to facilitate
the foregoing purposes. In addition, each Party shall cooperate with, and shall
permit and use its best efforts to cause its respective former and present
directors, officers, partners and employees to cooperate with, the other Party
on and after Closing in furnishing information, evidence, testimony and other
assistance in connection with any action, proceeding, arrangement or dispute of
any nature with respect to the subject matters of this Agreement, including, if
applicable, information related to periods prior to the Closing Date. The
exercise by a Party of any right of access granted herein shall not materially
interfere with the business operations of the other Party and shall be subject
to the confidentiality provisions in Section 6.1.

6.16 Sellers Remittance of Funds. From and after the Closing Date, Sellers shall
promptly transfer and deliver to Purchaser any cash or other property, if any,
that Sellers may receive related to the operation of the Assets for the period
from and after the Closing Date other than the Excluded Assets.

6.17 Purchaser’s Remittance of Funds. From and after the Closing Date, Purchaser
shall promptly transfer and deliver to Sellers any cash or other property, if
any, that Purchaser may receive related to the Excluded Assets, including
without limitation payments received that related to the operation of the
Facility prior to the Closing Date.

6.18 Transition of Facility and Business. Sellers shall use and shall cause the
Current Manager to use commercially reasonable, good faith efforts to transition
the Facility and Business to Purchaser during the period commencing on the date
that is twenty (20) days prior to the anticipated Closing Date and terminating
on the date that is thirty (30) days after Closing. Upon Purchaser’s request,
Sellers and Purchaser shall use commercially reasonable, good faith efforts to
negotiate the form of a transition services agreement within ten (10) days of
the Purchaser’s request therefor. Purchaser consents to Summer Vista entering
into an agreement with the Current Manager for services to be performed
post-Closing by the Current Manager on behalf of Summer Vista in connection with
services to be performed in transitioning the Facility and the Business to
Purchaser and various services required post-Closing but related to the
operation of the Business pre-Closing (so long as Current Manager’s providing
such services does not adversely impact the Business/Facility).

7. CLOSING CONDITIONS

7.1 Purchaser’s Closing Conditions. Purchaser’s obligations to close the
transactions described in this Agreement are subject to the satisfaction at or
prior to Closing of the following conditions precedent (the “Purchaser’s Closing
Conditions”):

7.1.1 Sellers’ Closing Deliveries. All of the Sellers’ Closing Deliveries shall
have been delivered to Purchaser or deposited with Escrow Agent in the Closing
Escrow, to be delivered to Purchaser at the Closing;

7.1.2 Representations and Warranties. The representations and warranties of
Sellers in this Agreement shall be true and correct in all material respects as
of the Closing (or as such other date to which such representation and
warranties expressly were made);

 

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7.1.3 Covenants and Obligations. The covenants and obligations of Sellers in
this Agreement shall have been performed in all material respects;

7.1.4 Title Policies. The Title Company shall have irrevocably committed to
issue the Title Policy pursuant to Section 4.2.4 with all standard exceptions
deleted (other than those that are within Purchaser’s control or discretion),
all requirements for issuance of the Title Policy satisfied and deleted, with
all endorsements reasonably required by Purchaser, and Sellers shall have
satisfied all Schedule B-I requirements within Sellers’ control or discretion;

7.1.5 Change in Environmental Condition of Property. No event shall have
occurred following the Effective Date and prior to the Closing Date which would
result in a violation of any Environmental Law;

7.1.6 Adverse Change in Facility Operations and Performance.    There shall not
have been a material and adverse change to the operation and performance of the
Facility from and after the Effective Date, which for purposes of this provision
shall mean: (a) a reduction in resident count of five percent (5%) or more;
(b) an decrease in average monthly gross revenues over the period between the
Effective Date and Closing compared against the same length of time preceding
the Effective Date of five percent (5%) or more; (c) an increase in monthly
operating expenses of five percent (5%) or more over the period between the
Effective Date and Closing compared against the same length of time preceding
the Effective Date; (d) the loss of staff over a period of time between the
Effective Date and the Closing Date at a rate of five percent (5%) of more
higher than during the same length of time preceding the Effective Date, which
loss of staff cannot include the loss of one or more of the following positions:
executive director, nursing/clinical director, food/beverage director, marketing
director, or facility services manager (or their equivalents); or (e) the
existence of any governmental ruling or order which prevents the admission of
new residents to the Facility.

7.1.7 Adverse Proceedings. No litigation or other court action shall have been
commenced seeking to obtain an injunction or other relief from such court to
enjoin the consummation of the transactions described in this Agreement, and no
preliminary or permanent injunction or other order, decree or ruling shall have
been issued by a court of competent jurisdiction or by any Governmental
Authority, would make illegal or invalid or otherwise prevent the consummation
of the transactions described in this Agreement;

7.1.8 Adverse Law. No Applicable Law shall have been enacted that would make
illegal or invalid or otherwise prevent the consummation of the transactions
described in this Agreement;

7.1.9 Facility Contracts. There shall be no material default by Sellers under
any of the Facility Contracts;

7.1.10 Escrow Amount. Sellers shall have irrevocably directed Escrow Agent in
writing to fund the Escrow Amount from the funds delivered to Escrow Agent by
Purchaser as part of the Purchase Price. The Escrow Amount shall be held in
escrow by Escrow Agent pursuant to the terms of the Escrow Agreement in the form
attached hereto as Exhibit “B” to be entered into by and between Sellers,
Purchaser and Escrow Agent; and

 

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7.1.11 Management Agreement. The Current Manager shall have executed, at
Closing, the Management Agreement, together with all ancillary and related
documents associated therewith;

7.1.12 No Stop Admission Orders/Hold Orders. There shall be no governmental
ruling or order which prevents the admission of new residents to the Facility.

7.1.13 Licensing Approvals. Purchaser shall have received evidence from the
appropriate licensing authority that all documents and information required for
the issuance of the Licensing Approvals have been provided to such licensing
authority and that the Licensing Approvals are being processed (which evidence
shall be in the form of an electronic mail transmission from such licensing
authority confirming the same (the “Licensing Approval Email”)); provided,
however, that if the Licensing Approval Email is not delivered within the
Closing timeframe set forth herein, the Closing Date may be extended by
Purchaser for a reasonable amount of time not to exceed sixty (60) days until
the Licensing Approval Email is delivered.

7.1.14 Non-Healthcare Licenses and Permits. Purchaser or the Current Manager
shall have received all Licenses and Permits necessary for the operation of the
Facility, after having expended good faith, commercially reasonably efforts to
obtain the same; and,

7.1.15 Termination of Management Agreements. All management agreements with
respect to the Facility, including but not limited to the Current Management
Agreement, shall have been terminated by Sellers.

7.1.16 Termination of Single Facility Lease. The Single Facility Lease and
Security Agreement dated as of September 30, 2015 by and between Sellers shall
have been terminated by Sellers.

7.2 Failure of Any Purchaser’s Closing Condition. If any of Purchaser’s Closing
Conditions is not satisfied at Closing (a “Purchaser’s Closing Condition
Failure”), and, as applicable, Sellers fail to cure such condition failure
within fifteen (15) days after written notice is delivered by Purchaser to
Sellers (excepting a failure to deliver Sellers’ Closing Deliveries at Closing
for which there shall be no notice or cure period) then Purchaser shall have the
right (unless such Purchaser’s Closing Condition Failure was solely within the
discretion or control of Purchaser), in Purchaser’s absolute discretion, to
either (i) terminate this Agreement by providing written notice to Seller, in
which case the Deposit shall be refunded to Purchaser in accordance with
Section 3.2.4, and the Parties shall have no further rights or obligations under
this Agreement, except as set forth herein below and except with respect to
those which expressly survive such termination, or (ii) complete the
transactions set out herein, without prejudice to any right or remedy of
Purchaser in respect thereof. If Purchaser terminates this Agreement pursuant to
clause (i) above and if such termination is by reason of a Purchaser’s

 

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Closing Condition Failure under Sections 7.1.1, 7.1.2, 7.1.3, 7.1.9, 7.1.10,
7.1.11, 7.1.15 and/or 7.1.16 but not any Purchaser’s Closing Condition Failure
under Sections 7.14, 7.1.5, 7.1.6, 7.1.7, 7.1.8, 7.1.12, 7.1.13, or 7.1.14
(unless caused by Seller’s intentional actions or omissions with respect to
Sections 7.1.4, 7.1.5, 7.1.6, 7.1.7, or 7.1.12 that were not approved by
Purchaser), then Sellers shall reimburse Purchaser for all reasonable
out-of-pocket expenses incurred by Purchaser in connection with the transactions
contemplated by this Agreement within fifteen (15) Business Days of being
provided an invoice setting forth in detail such reasonable out-of-pocket
expenses.

7.3 Sellers’ Closing Conditions. Sellers’ obligations to close the transactions
contemplated in this Agreement are subject to the satisfaction at or prior to
Closing of the following conditions precedent, as applicable (the “Sellers’
Closing Conditions”):

7.3.1 Receipt of the Purchase Price. Purchaser shall have (i) paid to Sellers or
deposited with Escrow Agent with irrevocable written direction to disburse the
same to Sellers, the Purchase Price (as allocated, and as adjusted for
Prorations pursuant to Article 9, including, without limitation, with respect to
the Deposit), less the Escrow Amount and (ii) delivered irrevocable written
direction to Escrow Agent to disburse the Deposit to Sellers;

7.3.2 Purchaser’s Closing Deliveries. All of the Purchaser’s Closing Deliveries
shall have been delivered to Seller or deposited with Escrow Agent in the
Closing Escrow, to be delivered to the Seller at the Closing;

7.3.3 Representations and Warranties. The representations and warranties of
Purchaser in this Agreement shall be true and correct in all material respects
as of the Closing (or as of such other date to which such representation or
warranty expressly is made);

7.3.4 Covenants and Obligations. The applicable covenants and obligations of
Purchaser in this Agreement shall have been performed in all material respects;

7.3.5 Adverse Proceedings. No litigation or other court action shall have been
commenced by a third-party seeking to obtain an injunction or other relief from
such court to enjoin the consummation of the transactions described in this
Agreement, and no preliminary or permanent injunction or other order, decree or
ruling shall have been issued by a court of competent jurisdiction or by any
Governmental Authority, that would make illegal or invalid or otherwise prevent
the consummation of the transactions described in this Agreement;

7.3.6 Adverse Law. No Applicable Law shall have been enacted that would make
illegal, invalid, or otherwise prevent the consummation of the transactions
described in this Agreement.

7.4 Failure of Sellers’ Closing Conditions. If any of Sellers’ Closing
Conditions are not satisfied at Closing (a “Sellers’ Closing Condition
Failure”), and, as applicable, Purchaser fails to cure such condition failure
within fifteen (15) days after written notice from Sellers to Purchaser of such
failure (excepting a failure to deliver the Purchase Price

 

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at Closing for which there shall be no cure period) then Sellers shall have the
right, in Sellers’ absolute discretion (unless Sellers’ Closing Condition
Failure was within the discretion or control of Sellers), to either
(i) terminate this Agreement by providing written notice to Purchaser, in which
case the Deposit shall be disbursed to Sellers in accordance with Section 3.2.5
(unless such termination is as a result of Sellers’ Closing Condition Failure
under Sections 7.3.5 or 7.3.6 which was not caused by Purchaser’s intentional
actions or omissions unless such intentional actions or omissions were approved
by Sellers) provided and the Parties shall have no further rights or obligations
under this Agreement, except those which expressly survive the termination, or
(ii) complete the transactions set out herein, without prejudice to any right or
remedy of Seller.

8. CLOSING

8.1 Closing Date. If both the Purchaser’s Closing Conditions and the Sellers’
Closing Conditions have been satisfied pursuant to Article 7, and subject to the
Purchaser’s extension rights as set forth in Section 7.1.13 hereof, the closing
shall occur on a date of Purchaser’s choosing (but with at least three
(3) Business Days’ notice to Seller) (the “Closing”) within thirty (30) days
following the expiration of the Inspection Period, but no earlier than March 15,
2017; provided, however, that Purchaser may elect to extend the outside date for
the Closing by up to sixty (60) days by providing Sellers with notice and
depositing an additional Two Hundred Thousand and No/100 Dollars ($200,000.00)
with Escrow Agent and which shall become a part of the Deposit, no fewer than
three (3) Business Days prior to the original outside date for Closing. The
Closing shall occur “by mail”.

8.2 Closing Escrow. If the Parties agree to effect the Closing through an escrow
(the “Closing Escrow”), then, prior to the Closing, the Parties shall enter into
a closing escrow agreement with the Escrow Agent with respect to the Closing
Escrow in form and substance reasonably acceptable to Seller, Purchaser and the
Escrow Agent (the “Closing Escrow Agreement”) pursuant to which (a) the Purchase
Price to be paid by Purchaser pursuant to Section 3.3.1 shall be deposited with
Escrow Agent, (b) all of the documents required to be delivered by Sellers and
Purchaser at Closing pursuant to this Agreement shall be deposited with Escrow
Agent, and (c) at Closing, the Purchase Price and the Deposit shall be disbursed
to the Sellers as set forth in Section 3.3.1 and the documents deposited into
the Closing Escrow shall be delivered to the Sellers and Purchaser (as the case
may be) pursuant to the Closing Escrow Agreement.

8.3 Sellers’ Closing Deliveries. At Closing, Sellers shall deliver or cause to
be delivered to Purchaser, or deposited with Escrow Agent in the Closing Escrow
to be delivered to Purchaser at Closing, or (with the approval of Purchaser,
acting reasonably) otherwise to be delivered or made available to Purchaser upon
Closing, all of the following documents, each of which shall have been duly
executed by the appropriate Seller and acknowledged (if required), and other
items, set forth in this Section 8.3 (the “Sellers’ Closing Deliveries”), as
follows:

8.3.1 Sellers’ Closing Certificate. Delivery of the Sellers’ Closing
Certificate, the form of which is attached hereto as “Exhibit “8.3.1”;

8.3.2 Deed. Deed substantially in the form attached hereto as Exhibit “8.3.2”,
conveying the Fee Premises and the Improvements to Purchaser or its designee,
free and

 

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clear of all liens restrictions and encumbrances, subject only to Permitted
Exceptions (provided, however, the Deed shall not list as a Permitted Exception
any exception for any matters appearing solely on the Survey and not otherwise
appearing in the public records of Escambia County, Florida);

8.3.3 Bill of Sale. A Bill of Sale substantially in the form attached hereto as
Exhibit “8.3.3”, transferring the Fixtures, Personal Property, Consumables,
Plans and Specifications, Warranties, General Intangibles, Books and Records and
the Other Assets to Purchaser or its designee;

8.3.4 Assignment and Assumption. An Assignment and Assumption of Facility
Contracts, Licenses and Permits, Tenant Leases and Resident Agreements
substantially in the form attached hereto as Exhibit “8.3.4”, assigning the
Facility Contracts, Licenses and Permits, Tenant Leases and Resident Agreements
to Purchaser or its designee;

8.3.5 Assignment and Assumption of Intellectual Property. An Assignment and
Assumption of Intellectual Property substantially in the form attached hereto as
Exhibit “8.3.5” assigning the Intellectual Property to Purchaser or its
designee;

8.3.6 Title Requirements. Such agreements, affidavits or other documents as may
be reasonably required by the Title Company from Sellers to issue the Title
Policies;

8.3.7 Other Declarations. Any transfer tax declarations or other documents
required under Applicable Law in connection with the conveyance of the Assets;

8.3.8 FIRPTA Certificates and Title Affidavits. An affidavit from ALF with
respect to compliance with the Foreign Investment in Real Property Tax Act
(Internal Revenue Code Sec. 1445, as amended) and the regulations issued
thereunder and any similar state tax requirements and an affidavit from
Hardcourt in favor of the Title Company which shall be sufficient to delete the
standard exceptions that are within Hardcourt’s control or discretion from the
Title Policy;

8.3.9 Closing Statement. The Closing Statement prepared pursuant to Section 9.1;

8.3.10 Authority Documents. Such resolutions, and incumbency certificates as
required to evidence the capacity and authority of any Person signing on behalf
of Sellers;

8.3.11 Tenant and Resident Notices. Executed written notices substantially in
the form attached hereto as Exhibit “8.3.11”, to be delivered post-Closing, from
Summer Vista to each tenant under the Tenant Leases and each Resident advising
such tenants and Residents of the transaction.

8.3.12 Estoppel Certificates. All Third-Party Estoppels;

8.3.13 Intentionally Left Blank.

 

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8.3.14 Escrow Agreement. The Escrow Agreement;

8.3.15 Sellers’ Certificate. Delivery of the Sellers’ Certificate, the form of
which is attached hereto as Exhibit “8.3.15”;

8.3.16 ROFO Agreement. The ROFO Agreement.

8.3.17 Possession and Keys. Possession of the Real Property free and clear of
all parties in possession, except parties in possession pursuant to the Tenant
Leases and Resident Agreements, and duplicates of or access information for all
keys, codes and other security devices relating to the Real Property;

8.3.18 Property Related Deliveries. On the Closing Date, (a) originals, or
copies if originals are not available, of all Tenant Leases and Resident
Agreements; and (b) in addition, to the extent the foregoing have not heretofore
been delivered to Purchaser, Sellers shall cause to be delivered to Purchaser:
(i) any Plans and Specifications for the Improvements in Sellers’ possession or
control; (ii) all unexpired Warranties and guarantees which Sellers have
received in connection with any work or services performed with respect to, or
equipment installed in, the Improvements; (iii) originals, or copies if
originals are not available, of all Facility Contracts that will be assigned to
Purchaser and remain in effect after Closing; (iv) copies of all Licenses and
Permits that will be assigned to Purchaser; (v) copies of all Books and Records,
whether kept in paper or electronic form; (vi) duplicates of all keys and lock
combinations relating to the Assets and (vii) copies of all other materials
necessary for the continuity of Business, together with all files, advertising
and promotional information and materials; and

8.3.19 Other Documents. Such other documents and instruments as may be
reasonably requested by Purchaser or the Title Company in order to consummate
the transactions described in this Agreement.

8.4 Purchaser’s Closing Deliveries. At Closing, Purchaser shall deliver or cause
to be delivered to Sellers or deposited with Escrow Agent in the Closing Escrow
to be delivered to Sellers all of the following, each of which, to the extent
applicable, shall have been duly executed by Purchaser and acknowledged (if
required), and other items, set forth in this Section 8.4 (the “Purchaser’s
Closing Deliveries”):

8.4.1 Purchase Price. The Purchase Price (as adjusted for Prorations pursuant to
Article 9, including, without limitation, with respect to the Deposit), less the
Escrow Amount, in the form of immediately available funds delivered by wire
transfer, to be paid by Purchaser;

8.4.2 Disbursement Letter. A letter of direction to Escrow Agent directing
Escrow Agent to disburse the Deposit to the Sellers;

8.4.3 Closing Certificate. A closing certificate substantially in the form
attached hereto as Exhibit “8.4.3”;

 

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8.4.4 Counterpart Execution Documents. A counterpart of each of the documents
and instruments to be delivered by Sellers under Section 8.3 which require
execution by Purchaser;

8.4.5 Escrow Agreement. The Escrow Agreement;

8.4.6 Escrow Amount. The Escrow Amount delivered by wire transfer to the Escrow
Agent pursuant to the Escrow Agreement;

8.4.7 ROFO Agreement. The ROFO Agreement; and

8.4.8 Other Documents. Such other documents and instruments as may be reasonably
requested by Sellers or the Title Company in order to consummate the
transactions described in this Agreement.

9. PRORATIONS AND EXPENSES

9.1 Closing Statement. No later than the day prior to Closing, the Parties,
through their respective employees, agents or representatives, jointly shall
make such examinations, audits and inventories of the Assets as may be necessary
to make the adjustments and Prorations to the Purchase Price as set forth in
Section 9.2, or any other provisions of this Agreement. Based upon such
examinations, audits and inventories, the Parties shall jointly prepare prior to
Closing a closing statement (the “Closing Statement”), which shall set forth
their best estimate of the amounts of the items to be adjusted and prorated
under this Agreement. The Closing Statement shall be approved and executed by
the Parties at Closing, and such adjustments and Prorations shall be final with
respect to the items set forth in the Closing Statement, except to the extent
any such items shall be re-prorated after the Closing as expressly set forth in
Section 9.2.

9.2 Prorations. Items of revenue and expense with respect to the Assets,
including those set forth in this Section 9.2, shall be prorated between the
Parties (the “Prorations”) as of 11:59:59 p.m. on the day preceding the Closing
Date (the “Cut-Off Time”), or such other time expressly provided in this
Section 9.2, so that the Closing Date is a day of income and expense for
Purchaser.

9.2.1 Taxes. All Taxes and assessments shall be prorated as of the Cut-Off Time
between Sellers and Purchaser. If the amount of any such Taxes is not
ascertainable on the Closing Date, the Proration for such Taxes shall be based
on the portion of the Purchase Price allocated to the Real Property pursuant to
Section 3.4.1 and utilizing the millage rate as set forth on Hardcourt’s 2016
Notice of Ad Valorem Taxes and Non-Ad Valorem Assessments with allowance made
for the maximum allowable discount for early payment; provided, however, that
after the Closing, Sellers and Purchaser shall re-prorate the Taxes and pay any
deficiency or excess in the original Proration to the applicable Party promptly
upon receipt of the actual bill for the relevant taxable period. Any additional
Taxes in the nature of “roll back” taxes or relating to the year of Closing
arising out of a change in the use of any portion of the Real Property or a
change in ownership shall be paid by Sellers when due and payable, and Sellers
will indemnify Purchaser from and against any and all such Taxes, which
indemnification obligation will survive the Closing.

 

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9.2.2 Tenant Leases and Resident Agreements. Any rents and other amounts
prepaid, accrued or due and payable under any Tenant Leases or Resident
Agreements shall be prorated as of the Cut-Off Time between Summer Vista and
Purchaser. Purchaser shall receive a credit for all security deposits that are
not transferred by Summer Vista to Purchaser. Purchaser shall not receive a
credit for any security deposits held by Summer Vista that are transferred to
Purchaser at Closing.

9.2.3 Facility Contracts. Any amounts prepaid, accrued or due and payable under
the Facility Contracts (other than for utilities which proration is addressed
separately in Section 9.2.5) shall be prorated as of the Cut-Off Time between
Summer Vista and Purchaser. Purchaser shall receive a credit for all deposits
held by Summer Vista under the Facility Contracts (together with any interest
thereon) which are not transferred to Purchaser, and Purchaser thereafter shall
be obligated to refund or apply such deposits in accordance with the terms of
such Facility Contracts. Summer Vista shall receive a credit for all deposits
made by Summer Vista under the Facility Contracts (together with any interest
thereon) which are transferred to Purchaser or remain on deposit for the benefit
of Purchaser.

9.2.4 Licenses and Permits. All amounts prepaid, accrued or due and payable
under any Licenses and Permits transferred to Purchaser shall be prorated as of
the Cut-Off Time between Sellers and Purchaser. Sellers shall receive a credit
for all deposits made by Sellers under the Licenses and Permits (together with
any interest thereon) which are transferred to Purchaser or which remain on
deposit for the benefit of Purchaser.

9.2.5 Utilities. All utility services shall be prorated as of the Cut-Off Time
between Summer Vista and Purchaser. The Parties shall use commercially
reasonable efforts to obtain readings for all utilities as of the Cut-Off Time.
If readings cannot be obtained as of the Closing Date, the cost of such
utilities shall be prorated between Summer Vista and Purchaser by estimating
such cost on the basis of the most recent bill for such service; provided,
however, that after the Closing, the Parties shall re-prorate the amount for
such utilities and pay any deficiency in the original Proration to the
applicable Party promptly upon receipt of the actual bill for the relevant
billing period. Summer Vista shall receive a credit for all deposits transferred
to Purchaser or which remain on deposit for the benefit of Purchaser with
respect to such utility contracts.

9.2.6 Re-Prorations. Except as set forth in Section 9.2.1, if during the ninety
(90) day period following the Closing Date, any Party in its reasonable
discretion believes the any of the Prorations as reflected on the Closing
Statement are not based on actual or accurate figures, such Party shall have the
right to request that such Prorations be re-prorated, and upon such request the
Parties agree in good faith to endeavor to accomplish such re-proration as soon
as practicable following such request.    Any re-prorations shall be made in the
same manner contemplated in this Section 9.2. This subparagraph shall survive
Closing.

 

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9.3 Cash. Except as otherwise provided in this Agreement, all cash on hand,
escrow and reserve accounts of Sellers, accounts receivable and accounts
payable, indebtedness or Liabilities for the period prior to the Closing Date
shall remain the property or responsibility, as applicable, of Sellers. Sellers
shall be responsible for the payment of all expenses on account of services and
supplies furnished to and for the benefit of the Assets or Business through and
including the day preceding the Closing Date and Purchaser shall be responsible
for the payment of all expenses on account of services and supplies furnished to
and for the benefit of the Assets or Business from and including the Closing
Date.

9.4 Employees. If applicable, Sellers will comply with the notice requirements
under the WARN Act, COBRA or any similar federal, state or local legislation
with respect to any Employees terminated by Sellers in connection with the
transactions contemplated by this Agreement. It is expressly understood and
agreed that Purchaser is not and shall not be responsible or liable, directly or
indirectly, for payment of any benefits, severance liability, compensation, pay
or other obligations, of whatever nature, due or alleged to be due to any
Employee of Sellers attributable to any time period up to Closing.

9.5 Purchaser’s Transaction Costs. In addition to the other costs and expenses
to be paid by Purchaser as set forth elsewhere in this Agreement, Purchaser
shall pay for the following items in connection with the transaction
contemplated by this Agreement: (a) the fees and expenses incurred by Purchaser
for Purchaser’s Inspectors or otherwise in connection with the Inspections;
(b) the fees and expenses of Purchaser’s attorneys, accountants and consultants;
(c) the fees and expenses for the Survey; (d) all transfer, sales or similar tax
and recording charges payable in connection with the conveyance of the Assets
other than the Real Property; (e) any mortgage tax, title insurance fees and
expenses for any loan title insurance policies and any extended coverages or
endorsements requested by Purchaser to the Title Policy, recording charges or
other amounts payable in connection with any new financing obtained by
Purchaser; (f) any governmental fees or expenses payable for the assignment,
transfer or conveyance of any Licenses and Permits and (g) one half (1/2) of the
fees and expenses for the Escrow Agent.

9.6 Sellers’ Transaction Costs. Sellers shall pay, as agreed between Sellers,
for the following items in connection with the transaction contemplated by this
Agreement: (a) the fees and expenses of Sellers’ attorneys, accountants, and
consultants; and (b) all transfer, sales or similar tax and recording charges
payable in connection with the conveyance of the Real Property; (c) any
governmental fees or expenses payable for the assignment, transfer or conveyance
of any Facility Contracts, Tenant Leases, and Resident Agreements; (d) title
insurance fees and expenses for the Title Commitment and Title Policy (including
search fees); and (e) one half (1/2) of the fees and expenses for the Escrow
Agent.

9.7 Allocation of Accounts Receivable. The accounts receivable of the Facility
shall be handled in the following manner:

9.7.1 On the Closing Date, Summer Vista shall provide Purchaser with a schedule
setting forth by Resident the outstanding accounts receivable of the Facility as
of the Closing Date and showing dates of service related to each such
outstanding account receivable (the “Pre-Closing Date AR”). Summer Vista, on the
one hand, and Purchaser, on the other hand, shall retain or remit any payments
received by it on the accounts receivable of the Facility in a manner consistent
with Section 9.7.

 

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9.7.2 If such payments either specifically indicate on the accompanying
remittance advice that they relate to the Pre-Closing Date AR, they shall either
be retained by Summer Vista if received by Summer Vista, or if they have been
received by Purchaser, they shall be remitted to Summer Vista, along with the
applicable remittance advice, promptly, but in no event more than ten (10) days,
after receipt thereof;

9.7.3 If such payments either specifically indicate on the accompanying
remittance advice that they relate to the services rendered or goods sold on or
after the Closing Date, they shall be retained by Purchaser, if received by
Purchaser, or if they have been received by Summer Vista, they shall be remitted
to Purchaser promptly, but in no event more than ten (10) days, after receipt
thereof;

9.7.4 If such payments do not indicate on the accompanying remittance advice the
period to which the payment applies (a “Non-Designated Payment”), the Parties
shall assume that each Non-Designated Payment relates to the newest outstanding
unpaid receivables and, based on such assumption, the portion thereof which
relates to services provided or goods sold on or after the Closing Date shall be
retained by Purchaser, or if received by Summer Vista, remitted to Purchaser
within ten (10) days after Summer Vista’s receipt thereof, and the remaining
balance, if any, shall be retained by Summer Vista or, if received by Purchaser,
remitted to Summer Vista.

9.7.5 In furtherance and not in limitation of the foregoing, the Parties have
further agreed that (i) if any payment received by Purchaser on or after the
Closing Date relates solely to the period prior to the Closing Date, it shall be
remitted by Purchaser to Summer Vista (ii) if any such payment received by
Purchaser on or after the Closing Date relates solely to the period from and
after the Closing Date, it shall be retained by Purchaser and deposited in
accordance with its routine banking practices and (iii) if any such payment
received by Purchaser on or after the Closing Date relates to periods both prior
to and from and after the Closing Date, it shall be deposited by Purchaser in
accordance with its routine banking practices, with the applicable portion
thereof remitted to Summer Vista in accordance with the terms of Section 9.7.

9.7.6 Summer Vista acknowledges and agrees that Purchaser’s only obligation
under Section 9.7 shall be to forward payments on the Pre-Closing Date AR if and
as received by Purchaser and that Purchaser shall have no affirmative obligation
to attempt to collect the Pre-Closing Date AR under this Agreement. Purchaser
acknowledges that Summer Vista may continue to invoice Residents for the
Pre-Closing Date AR, but Summer Vista agrees not to pursue any other collection
efforts against Residents.

9.7.7 Summer Vista and Purchaser shall each have the right, upon request and
during normal business hours, to inspect the books and records of the other
Party to ensure their compliance with their obligations under this
Section 9.7. In the event that in connection with any such inspection or
otherwise, the parties mutually determine that any payment hereunder was
misapplied by the Parties, the Party which erroneously received said payment
shall remit the same to the other within ten (10) days after said determination
is made.

 

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10. DEFAULT AND REMEDIES

10.1 Sellers’ Default. If, at or any time prior to Closing, Sellers fail to
perform in any material respect any of their covenants or obligations under this
Agreement which breach or default is not caused in whole or in part by a
Purchaser’s Default or a Purchaser’s Closing Conditions Failure, Sellers fail to
cure such material breach within fifteen (15) days after written notice of the
same is delivered by Purchaser to the Sellers (a “Sellers’ Default”), and no
material Purchaser’s Default has occurred which remains uncured, Purchaser may
elect, as its sole and exclusive remedy, to (a) terminate this Agreement by
providing written notice to Sellers, in which case the Deposit shall be refunded
to Purchaser in accordance with Section 3.2.4, Sellers shall reimburse Purchaser
for all reasonable, actual, third party out-of-pocket expenses incurred by
Purchaser in connection with the transactions contemplated by this Agreement,
and the Parties shall have no further rights or obligations under this
Agreement, except those which expressly survive such termination, or (b) waive
such default and proceed to Closing without any reduction in or setoff against
the Purchase Price except for the amounts needed to remove any liens or permit
transfer of licenses, which costs may be offset from the Purchase Price, or
(c) obtain a court order for specific performance.

10.2 Purchaser’s Default. If at any time prior to Closing, Purchaser fails to
perform in any material respect any of its covenants or obligations under this
Agreement which breach or default is not caused in whole or in part by a
Sellers’ Default or a Sellers’ Closing Conditions Failure, Purchaser fails to
cure such condition failure within fifteen (15) days after written notice of
such failure is delivered by Sellers to Purchaser (a “Purchaser’s Default”), and
no material Sellers’ Default has occurred which remains uncured, then Sellers
may elect, as their sole and exclusive remedy, to (a) terminate this Agreement
by providing written notice to Purchaser, in which case the Deposit shall be
disbursed to Sellers in accordance with Section 3.2.3, and the Parties shall
have no further rights or obligations under this Agreement, except those which
expressly survive such termination or (b) waive such default and proceed to
Closing without any reduction in or setoff against the Purchase Price.

10.3 Liquidated Damages. The Parties acknowledge and agree that if this
Agreement is terminated pursuant to Section 7.4 and Section 10.2, the damages
that Sellers would sustain as a result of such termination would be difficult if
not impossible to ascertain. Accordingly, the Parties agree that Sellers shall
retain the Deposit as full and complete liquidated damages (and not as a
penalty) as Sellers’ sole and exclusive remedy for such termination; provided,
however, that in addition to the Deposit, Sellers shall retain all rights and
remedies under this Agreement with respect to those obligations of Purchaser
which expressly survive such termination.

11. RISK OF LOSS

11.1 Casualty. If, at any time after the Effective Date and prior to Closing or
earlier termination of this Agreement, the Assets or any portion thereof are
damaged or destroyed by fire or any other casualty (a “Casualty”), Sellers shall
give written notice of each such Casualty to Purchaser promptly after the
occurrence of such Casualty and Purchaser shall have the right to elect, by
providing written notice to Sellers within thirty (30) days after Purchaser’s
receipt of the Sellers’ written notice of such Casualty, to (a) terminate this
Agreement in its

 

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entirety, (b) extend the Closing Date for a reasonable period of time determined
by Purchaser to provide Sellers with the opportunity to restore the Assets to
their condition prior to such Casualty prior to Closing, or (c) proceed to
Closing, without terminating this Agreement, in which case Sellers shall
(i) provide Purchaser with a credit against the Purchase Price in an amount
equal to the greater of: (y) the applicable insurance deductible plus any
uninsured amount of the repair or restoration cost, and (z) the reasonable
estimated costs for the repair or restoration of the Real Property, as
applicable, required by such Casualty, and (ii) transfer and assign to Purchaser
all of the Sellers’ right, title and interest in and to all proceeds from all
casualty, business interruption, lost profits, and other applicable insurance
policies maintained by Sellers with respect to the Assets, except those proceeds
specifically payable in connection with and allocable to business interruption
and lost profits and costs incurred by Sellers for the period prior to the
Closing to the extent assignable, and if such proceeds are not assignable,
Purchaser shall receive a credit against the Purchase Price at Closing in an
amount equal to the amount of such proceeds. If Purchaser fails to provide
written notice of its election to Sellers within such thirty (30) day time
period, then Purchaser shall be deemed to have elected to proceed to Closing
pursuant to clause (c) of this preceding sentence. If the Closing is scheduled
to occur within Purchaser’s thirty (30) day election period, the Closing Date
shall, upon Purchaser’s election, be postponed until the date that is five
(5) Business Days after the expiration of such thirty (30) day election period.
In the event that Purchaser terminates this Agreement pursuant to this
Section 11.1, the Deposit shall be returned to Purchaser.

11.2 Condemnation. If, at any time after the Effective Date and prior to Closing
or the earlier termination of this Agreement, any Governmental Authority
commences any condemnation proceeding or other proceeding in eminent domain with
respect to all or any portion of the Real Property (a “Condemnation”), Sellers
shall give written notice of such Condemnation to Purchaser promptly after
Sellers receive notice of such Condemnation and Purchaser shall have the right
to elect, by providing written notice to Sellers within thirty (30) days after
Purchaser’s receipt of the Sellers’ written notice of such Condemnation, to
(a) terminate this Agreement in its entirety, or (b) proceed to Closing, without
terminating this Agreement, in which case the Sellers shall assign to Purchaser
all of Sellers’ right, title and interest in all proceeds and awards from such
Condemnation. If Purchaser fails to provide written notice of its election to
Sellers within such time period, then Purchaser shall be deemed to have elected
to proceed to Closing pursuant to clause (b) of the preceding sentence. If the
Closing is scheduled to occur within Purchaser’s thirty (30) day election
period, the Closing shall, upon Purchaser’s election, be postponed until the
date which is five (5) Business Days after the expiration of such thirty
(30) day election period. In the event that Purchaser terminates this Agreement
(or a portion thereof) pursuant to this Section 11.2, the Deposit shall be
returned to Purchaser.

11.3 Stop Admission Orders/Hold Orders. If the Facility is subject to any
governmental ruling or order which prevents the admission of new residents to
the Facility, notwithstanding anything contained in this Agreement to the
contrary, Purchaser shall be permitted to contact and work directly with any
Governmental Authorities necessary to assess the situation and develop a plan to
permit admissions to commence again upon the Closing Date.

 

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12. SURVIVAL, INDEMNIFICATION AND RELEASE

12.1 Survival. The representations and warranties, covenants and obligations
(including without limitation obligations of defense and indemnification) of
Sellers and Purchaser shall survive Closing or earlier termination of this
Agreement until the date which is twelve (12) months after the Closing Date.
Sellers acknowledge and agree that, notwithstanding the fact that the
indemnification obligation contemplated by Section 12.2 below may not accrue
prior to the expiration of the twelve (12) month period contemplated by this
Section 12.1, the expiration of such twelve (12) month period shall in no way
limit Sellers’ indemnification obligation provided that Seller is notified of
any such potential indemnification claim prior to the expiration of such twelve
(12) month period. Notwithstanding the foregoing, the Retained Liabilities of
Sellers shall not be subject to a limitation on survival.

12.2 Indemnification by Sellers. Subject to the limitations set forth in this
Article 12 and any other express provision of this Agreement, Sellers shall
indemnify, save, insure, pay, defend and hold harmless Purchaser’s Indemnitees
from and against any Indemnification Loss incurred by any Purchaser’s Indemnitee
to the extent resulting from (a) any breach of any representation or warranty of
a Seller in this Agreement, (b) any breach by a Seller of any of its covenants
or obligation under this Agreement, (c) any Retained Liabilities, and (d) any
breach of representation, warranty, covenant or obligation of a Seller in any
Seller’s Document.

12.3 Indemnification by Purchaser. Subject to the limitations set forth in this
Article 12, Purchaser shall indemnify, defend and hold harmless Seller’s
Indemnitees from and against any Indemnification Loss incurred by Seller’s
Indemnitee to the extent resulting from (a) any breach of any representation or
warranty of Purchaser in this Agreement, (b) any breach by Purchaser of any of
its covenants or obligations under this Agreement, (c) any Assumed Liabilities
and (d) any breach of representation, warranty, covenant or obligation of
Purchaser in any Purchaser’s Document.

12.4 Indemnification Procedure.

12.4.1 Notice of Indemnification Claim. If any of Seller’s Indemnitees or
Purchaser’s Indemnitees (as the case may be) (each, an “Indemnitee”) is entitled
to defense or indemnification under any other provision in this Agreement (each,
an “Indemnification Claim”), the Party required to provide defense or
indemnification to such Indemnitee (the “Indemnitor”) shall not be obligated to
defend, indemnify and hold harmless such Indemnitee unless and until such
Indemnitee provides written notice to such Indemnitor promptly after such
Indemnitee has actual knowledge of any facts or circumstances on which such
Indemnification Claim is based or a Third-Party Claim is made on which such
Indemnification Claim is based, describing in reasonable detail such facts and
circumstances or Third-Party Claim with respect to such Indemnification Claim.

12.4.2 Resolution of Indemnification Claim Not Involving Third-Party Claim. If
the Indemnification Claim does not involve a Third-Party Claim and is disputed
by the Indemnitor, the dispute shall be resolved by litigation or other means of
alternative dispute resolution as the Parties may agree in writing.

 

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12.4.3 Resolution of Indemnification Claim Involving Third-Party Claim. If the
Indemnification Claim involves a Third-Party Claim, the Indemnitor shall have
the right (but not the obligation) to assume the defense of such Third-Party
Claim, at its cost and expense, and shall use good faith efforts consistent with
prudent business judgment to defend such Third-Party Claim, provided that
(a) the counsel for the Indemnitor who shall conduct the defense of the
Third-Party Claim shall be reasonably satisfactory to the Indemnitee (unless
selected by Indemnitor’s insurance company, in which case Indemnitee shall have
no such approval rights), (b) the Indemnitee, at its cost and expense, may
participate in, but shall not control, the defense of such Third-Party Claim,
and (c) the Indemnitor shall not enter into any settlement or other agreement
which requires any performance by the Indemnitee, other than the payment of
money which shall be paid by the Indemnitor. The Indemnitee shall not enter into
any settlement agreement with respect to the Indemnification Claim, without the
Indemnitor’s prior written consent. If the Indemnitor elects not to assume the
defense of such Third-Party Claim, the Indemnitee shall have the right to retain
the defense of such Third-Party Claim and shall use good faith efforts
consistent with prudent business judgment to defend such Third-Party Claim in an
effective and cost-efficient manner.

12.4.4 Accrual of Indemnification Obligation. Notwithstanding anything to the
contrary in this Agreement, the Indemnitee shall have no right to
indemnification against the Indemnitor for any Indemnification Claim which
(a) does not involve a Third-Party Claim but is disputed by Indemnitor until
such time as such dispute is resolved by written agreement or by a final,
non-appealable order of court of competent jurisdiction or (b) which involves a
Third-Party Claim until such time as such Third-Party Claim is concluded,
including any appeals with respect thereto in the case of a claim in litigation.

12.5 Materiality.Notwithstanding any other provision of this Article 12 to the
contrary, Sellers shall not be required to indemnify Purchaser’s Indemnitees,
and Purchaser shall not be required to indemnify Sellers’ Indemnitees, pursuant
this Article 12 unless the amount of indemnification claims an Indemnitor is
otherwise obligated to pay (but for this Section 12.5) to all Indemnitees
exceeds Twenty-Five Thousand Dollars ($25,000), individually or in the
aggregate; provided that in the event such amount exceeds Twenty-Five Thousand
Dollars ($25,000), the Indemnitor shall be obligated to pay the entire amount
without deduction of the first Twenty-Five Thousand Dollars ($25,000).

12.6 Limits on Sellers’ Indemnification Obligation.

12.6.1 Except for Retained Liabilities and Indemnification Claims based on
fraud, gross negligence or willful misconduct, Sellers shall not be liable to
Purchaser’s Indemnitees for any Indemnifications Claims in excess of the
Purchase Price in the aggregate.

12.6.2 Summer Vista agrees to indemnify and hold Hardcourt harmless from and
against any Third Party Claim that is a Crossover Claim relating to negligence
or abuse in connection with the care of a Resident.

 

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12.7 Exclusive Remedy for Indemnification Loss.Except for Indemnification Claims
based on fraud, gross negligence or willful misconduct, for which the Indemnitee
shall have the right to pursue all remedies available at law or equity, the
indemnification provisions in this Article 12 shall be the sole and exclusive
remedy of any Indemnitee with respect to any claim for Indemnification Loss
arising from or in connection with this Agreement.

12.8 Holdback.Sellers agree to escrow the Escrow Amount as security for the
indemnity obligations hereunder. At the Closing, the Escrow Amount shall be
deducted from the Purchase Price payable to Summer Vista pursuant to
Section 3.1, and Sellers, Purchaser and Escrow Agent shall execute the Escrow
Agreement attached hereto as Exhibit “B” and incorporated herein by reference.

13. TERMINATION

13.1 Termination. This Agreement may be terminated and the transaction
contemplated hereby abandoned:

13.1.1 By mutual consent of the Purchaser and the Sellers at any time prior to
the Closing for any reason;

13.1.2 by either the Sellers or Purchaser, if any court or other Governmental
Authority has issued a final and non-appealable order, decree or ruling
permanently restraining, enjoining or otherwise prohibiting the consummation of
the sale and purchase of the Assets contemplated by this Agreement; or

13.1.3 As otherwise set forth in this Agreement.

14. MISCELLANEOUS PROVISIONS

14.1 Notices.

14.1.1 Method of Delivery. Any notice pursuant to this Agreement shall be given
in writing by (a) personal delivery, (b) reputable overnight delivery service
with proof of delivery, (c) United States Mail, postage prepaid, registered or
certified mail, return receipt requested, or (d) legible facsimile transmission
with a confirmation sheet or e-mail, sent to the intended addressee at the
address set forth below, or to such other address or to the attention of such
other Person as the addressee shall have designated by written notice sent in
accordance herewith. Any notice so given shall be deemed to have been given upon
receipt or refusal to accept delivery, or, in the case of facsimile transmission
or e-mail, as of the date of the facsimile transmission or e-mail provided that
an original of such facsimile is also sent to the intended addressee by means
described in clauses (a), (b) or (c) above. Unless changed in accordance with
the preceding sentence, the addresses for notices given pursuant to this
Agreement shall be as follows:

 

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If to Sellers:             

Summer Vista Assisted Living, LLC

Hardcourt Development No. 2, LLC

2131 Banquos Trail

Pensacola, Florida 32503

Attention: Patrick Duplantis, Director

Telephone No.: (813) 240-0125

Facsimile No.: None

Email: pduplantis49@gmail.com

with a copy to:   

Hightower Law Firm    

119 North Palafox Street

Pensacola, FL 32502    

Attention: David E. Hightower, Esquire

Telephone No.: (850) 549-3812

Facsimile No.:    (850) 607-2663

E-Mail: david@htowerlaw.com

If to Purchaser:   

CHP II Partners, LP

c/o CNL Healthcare Properties II, Inc.

450 South Orange Avenue, 14th Floor

Orlando, Florida 32801

Attention: Chief Financial Officer and

Assistant General Counsel

Telephone No.: (407) 650-1000

Facsimile No.: (407) 540-2576

E-Mail: kevin.maddron@cnl.com

E-Mail: tracey.bracco@cnl.com

with a copy to:   

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

215 North Eola Drive

Orlando, Florida 32801

Attention: John D. Ruffier, Esquire

Telephone No.: (407) 843-4600

Facsimile No.: (407) 843-4444

E-Mail: john.ruffier@lowndes-law.com

14.1.2 Receipt of Notices. All notices sent by a Party (or its counsel as
contemplated below) under this Agreement shall be deemed to have been received
by the Party to whom such notice is sent upon (a) delivery to the address,
facsimile number or e-mail address of the recipient Party, provided that such
delivery is made prior to 5:00 p.m. (local time for the recipient Party) on a
Business Day, otherwise the following Business Day, or (b) the attempted
delivery of such notice if (i) such recipient Party refuses delivery of such
notice, or (ii) such recipient Party is no longer at such address, facsimile
number or e-mail address, and such recipient Party failed to provide the sending
Party with its current address, facsimile number or e-mail address pursuant to
Section 14.1.3.

14.1.3 Change of Address. The Parties and their respective counsel shall have
the right to change their respective address, facsimile number or e-mail address
for the purposes of this Section 14.1 by providing a notice of such change in
address, facsimile number or e-mail address as required under this Section 14.1.

 

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14.1.4 Delivery by Party’s Counsel. The Parties agree that the attorney for a
Party shall have the authority to deliver notices on such Party’s behalf to the
other Parties hereto.

14.2 Time is of the Essence. Time is of the essence in this Agreement; provided,
however, that notwithstanding anything to the contrary in this Agreement, if the
time period for the performance of any covenant or obligation, satisfaction of
any condition or delivery of any notice or item required under this Agreement
shall expire on a day other than a Business Day, such time period shall be
extended automatically to the next Business Day.

14.3 Assignment. Neither Purchaser nor Sellers shall assign this Agreement or
any interest therein to any Person, without the prior written consent of the
other Parties which consent may be withheld in each other Party’s sole
discretion, except however, Purchaser shall have the right to designate any
wholly-owned Subsidiary or any CNL Financial Group-affiliated or sponsored
entity to receive title or may assign this Agreement, in whole or in part, to
one or more Affiliates of Purchaser by providing written notice to Seller no
later than three (3) Business Days prior to Closing. In the event of a split of
the interests being conveyed pursuant to an assignment, Sellers agree to enter
into all reasonable and necessary documentation necessary to memorialize such a
transaction.

14.4 Successors and Assigns. This Agreement shall be binding upon the Parties
hereto and their respective heirs and permitted successors, and assigns, each of
whom shall be entitled to enforce performance and observance of this Agreement,
to the same extent as if such heirs, successors, and assigns, were parties,
hereto.

14.5 Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies on any Person other than (a) the Parties and their respective
successors and permitted assigns, (b) any Indemnitee to the extent such
Indemnitee is expressly provided any right of defense or indemnification in this
Agreement and (c) Duplantis.

14.6 Rules of Construction. The following rules shall apply to the construction
and interpretation of this Agreement:

(i) Singular words shall connote the plural as well as the singular, and plural
words shall connote the singular as well as the plural, and the masculine shall
include the feminine and the neuter, as the context may require.

(ii) All references in this Agreement to particular articles, sections,
subsections or clauses (whether in upper or lower case) are references to
articles, sections, subsections or clauses of this Agreement. All references in
this Agreement to particular exhibits or schedules (whether in upper or lower
case) are references to the exhibits and schedules attached to this Agreement,
unless otherwise expressly stated or clearly apparent from the context of such
reference.

(iii) The headings in this Agreement are solely for convenience of reference and
shall not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.

 

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(iv) Each Party and its counsel have reviewed and revised (or requested
revisions of) this Agreement and have participated in the preparation of this
Agreement, and therefore any rules of construction requiring that ambiguities
are to be resolved against the Party which drafted the Agreement or any exhibits
hereto shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto.

(v) The terms “sole discretion” and “absolute discretion” with respect to any
determination to be made a Party under this Agreement shall mean the sole and
absolute discretion of such Party, without regard to any standard of
reasonableness or other standard by which the determination of such Party might
be challenged.

14.7 Severability. If any provision of this Agreement is ultimately determined
to be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, in the event no such limiting construction is
possible, such invalid or unenforceable provision shall be deemed severed from
the Agreement without affecting the validity of any other provision hereof if
the essential provisions of this Agreement for each Party remain valid, binding
and enforceable.

14.8 Governing Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and interpreted in accordance with, the laws of the State of Florida.
Purchaser and Seller agree to exclusively submit to the jurisdiction of Florida
in connection with any claims or controversy arising out of this Agreement and
that venue for such actions shall exclusively be in Escambia County, Florida.
Seller (for itself and all Seller’s Indemnitees) and Purchaser (for itself and
all Purchaser’s Indemnitees) hereby submit to jurisdiction and consent to venue
in such courts, and waive any defense based on forum non conveniens, provided
that any Party may seek injunctive relief or specific performance with respect
to any of the Assets in the courts of the State in which such Assets are
situated and may incorporate a claim against Sellers with respect to any claim
for injunctive relief or specific performance.

14.9 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, ANY
RIGHT THAT EITHER PARTY OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR
ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF
CONDUCT, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS
AGREEMENT.

14.10 Attorneys’ Fees. In connection with any disputes or actions arising out of
the transactions contemplated by this Agreement, or the breach, enforcement or
interpretation of this Agreement, the substantially prevailing Party shall be
entitled to recover, from the Party not substantially prevailing, all reasonable
costs and attorney, paralegal and expert fees incurred by the substantially
prevailing Party before trial, at trial, at retrial, on appeal, at all hearings
and rehearings, and in all administrative, bankruptcy and reorganization
proceedings.

 

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14.11 Incorporation of Recitals, Exhibits and Schedules. The recitals to this
Agreement, and all exhibits and schedules referred to in this Agreement are
incorporated herein by such reference and made a part of this Agreement. Any
matter disclosed in any schedule to this Agreement shall be deemed to be
incorporated in all other schedules to this Agreement.

14.12 Entire Agreement. This Agreement and the agreements to be executed and
delivered in connection therewith set forth the entire understanding and
agreement of the Parties hereto and shall supersede any other agreements and
understandings (written or oral) between the Parties on or prior to the
Effective Date with respect to the transactions described in this Agreement.

14.13 Further Assurances. Each of the Parties covenants and agrees to do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, any and all such further acts, instruments, papers and documents
as may be reasonably necessary to carry out and effectuate the intent and
purposes of this Agreement.

14.14 Effect of Delay and Waivers. No delay or omission to exercise any right or
power accruing prior to or upon any breach, omission, or failure of performance
hereunder shall impair any such right or power, or shall be construed to be a
waiver thereof, and any such right or power may be exercised from time to time
and as often as may be deemed expedient. In the event of any breach of any
provision contained in this Agreement, thereafter waived by another Party, such
waiver shall be limited to the particular waiving Party and to the particular
breach in question and no other. No waiver or release of any term or provision
of this Agreement shall be established by conduct, custom, or course of dealing,
but solely by a document in writing duly authorized and executed by the waiving
or releasing Party.

14.15 Amendments, Waivers and Termination of Agreement. No amendment or
modification to any terms or provisions of this Agreement, waiver of any
covenant, obligation, breach or default under this Agreement or termination of
this Agreement, shall be valid unless in writing, executed, and delivered by
each of the Parties.

14.16 Execution of Agreement. A Party may deliver executed signature pages to
this Agreement by facsimile transmission or electronic mail transmission of a
portable document format document to any other Party, which transmitted
signature page shall be deemed to be an original executed signature page. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which counterparts together shall constitute one
agreement with the same effect as if the Parties had signed the same signature
page.

14.17 Tax Disclosures. Notwithstanding anything in this Agreement to the
contrary, in order to avoid any potential application of Section 1.6011-4(b)(3)
of the Treasury Regulations, Purchaser and Sellers (and each employee,
representative, or other agent of Purchaser and Sellers) may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all

 

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materials of any kind (including opinions or other tax analyses) that are
provided to Purchaser or Sellers relating to such tax treatment and tax
structure. For purposes hereof, “tax structure” means any fact that may be
relevant to understanding the federal income tax treatment of the transaction.

14.18 Liability of Interest-Holders in Sellers and Purchaser and their
Affiliates. Nothing contained in this Agreement shall be construed to create or
impose any Liabilities or obligations and no such Liabilities or obligations
shall be imposed on any of the shareholders, beneficial owners, direct or
indirect, officers, directors, trustees, employees or agents of Sellers or
Purchaser or their respective Affiliates for the payment or performance of the
obligations or Liabilities of Sellers or Purchaser.

14.19 Good Faith Efforts. The Parties agree to use commercially reasonable,
good-faith efforts to effectuate the transactions contemplated by this
Agreement.

14.20 Post-Execution Disclosures. The Parties agree that the Party or Parties
charged with providing a schedule to this Agreement shall update such schedule
promptly (but in any event within five (5) Business Days) after any change in
condition or state of facts which would render any such schedule incomplete or
inaccurate. In the event that Sellers update any schedule during the period
commencing on the date which is two (2) Business Days prior to the expiration of
the Inspection Period and ending upon the expiration of the Inspection Period,
the Inspection Period shall be extended for two (2) Business Days. If Sellers
update any schedule from and after the expiration of the Inspection Period,
Purchaser shall have the right to terminate this Agreement on or before the date
that is (2) Business Days after the date of such update of the schedule, and
such termination shall be treated for all purposes as a termination by Purchaser
prior to the expiration of the Inspection Period.

[Remainder of page intentionally left blank;

Signatures on following pages]

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed and
delivered in its name by a duly authorized officer as of the date first set
forth above.

 

SELLER:

SUMMER VISTA ASSISTED LIVING, LLC,

a Florida limited liability company

By:   /s/ Name:   Patrick Duplantis Title:   Director HARDCOURT DEVELOPMENT NO.
2, LLC, a Florida limited liability company By:   /s/ Name:   Patrick Duplantis
Title:   Director

 

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PURCHASER: CHP II PARTNERS, LP, a Delaware limited partnership   By: CHP II GP,
LLC, a Delaware limited liability company, its General Partner     By: CNL
Healthcare Properties II, Inc., a Maryland corporation, its Managing Member    
    By:   /s/         Name:   Tracey B. Bracco         Title:   Vice President

 

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The undersigned hereby joins in the execution of this Agreement for the purposes
of acknowledging and accepting its obligations as Escrow Agent hereunder:

 

ESCROW AGENT: FIDELITY NATIONAL TITLE INSURANCE COMPANY By:   /s/ Name:   Sam
Sobering Title:   AVP

 

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EXHIBIT “A”

THE FEE PREMISES

Lot 2, New Hope Place, a replat of a portion of Mallory Heights Unit #3 and
subdivision of a portion of Section 16, Township 1 South, Range 29 West, City of
Pensacola, Escambia County, Florida as recorded in Plat Book 19 at page 17 of
the public records of said County.

 

EXHIBIT “A” - 1

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EXHIBIT “B”

ESCROW AGREEMENT

 

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) dated [                    ], 2017 (the
“Closing Date”) is among CHP II [                    ], LLC, a Delaware limited
liability company (“Purchaser”), SUMMER VISTA ASSISTED LIVING, LLC, , a Florida
limited liability company (“Summer Vista”), and HARDCOURT DEVELOPMENT NO. 2,
LLC, a Florida limited liability company (“Hardcourt” together Hardcourt and
Summer Vista may hereinafter be referred to collectively as “Seller”), and
FIDELITY NATIONAL TITLE INSURANCE COMPANY, as escrow agent (“Escrow Agent”).

This is the escrow agreement referred to in that certain Asset Purchase
Agreement by and between Seller and CHP II Partners, LP, dated February     ,
2017, as assigned to Purchaser by that certain Assignment and Assumption of
Asset Purchase Agreement between CHP II Partners, LP and Purchaser (as amended
and assigned from time to time, the “Purchase Agreement”). Capitalized terms
used in this Agreement without definition shall have the respective meanings
given to them in the Purchase Agreement.

The parties, intending to be legally bound, hereby agree as follows:

1. ESTABLISHMENT OF ESCROW.

(a) As of the Closing Date, Summer Vista has deposited with Escrow Agent an
amount equal to Six Hundred Thousand and No/100 Dollars ($600,000.00) in
immediately available funds (as increased by any earnings thereon and as reduced
by any disbursements, amounts withdrawn under Section 5(j), or losses on
investments, the “Escrow Fund”). Escrow Agent hereby acknowledges receipt
thereof.

(b) Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and
disburse the Escrow Fund pursuant to the terms and conditions hereof.

2. INVESTMENT OF FUNDS. Except as Purchaser and Seller may from time to time
jointly instruct Escrow Agent in writing, the Escrow Fund shall be invested from
time to time, to the extent reasonably possible, in United States Treasury bills
having a remaining maturity of ninety (90) days or less and repurchase
obligations secured by such United States Treasury bills, with any remainder
being deposited and maintained in a money market deposit account with any bank
or trust company organized under the laws of the United States of America or the
laws of any state thereof which has a long term debt rating from Moody’s
Investor’s Service, Inc. or from Standard & Poor’s Corporation of at least an
“AAA” rating or as to which Seller and Purchaser shall have otherwise given
their consent, until disbursement of the entire Escrow Fund. Escrow Agent is
authorized to liquidate in accordance with its customary procedures any portion
of the Escrow Fund consisting of investments to provide for payments required to
be made under this Agreement.

 

EXHIBIT “B” - 1

--------------------------------------------------------------------------------

3. CLAIMS.

(a) From time to time on or before [                    ], 20     [INSERT DATE
THAT IS DAY PRIOR TO ANNIVERSARY OF CLOSING DATE], Purchaser may give notice to
Seller and Escrow Agent specifying in reasonable detail the nature and dollar
amount of any Indemnification Claim it or any Purchaser’s Indemnitees may have
under Article 12 of the Purchase Agreement. Any notice under the preceding
sentence is referred to herein as a “Notice” and any claim for payment from the
Escrow Fund under the preceding sentence is referred to herein as a “Claim.” If
Seller gives notice to Purchaser and Escrow Agent disputing any Claim (a
“Counter Notice”) within ten (10) Business Days following receipt by Escrow
Agent of the Notice regarding such Claim, such Claim shall be resolved as
provided in Section 3(b). If no Counter Notice is received by Escrow Agent
within such ten (10) Business Day period, then the dollar amount claimed by
Purchaser as set forth in its Notice shall be deemed established for purposes of
this Agreement and the Purchase Agreement and, at the end of such ten
(10) Business Day period, Escrow Agent shall pay to Purchaser the dollar amount
claimed in the Notice from (and only to the extent of) the Escrow Fund;
provided, however, no payment shall be made by Escrow Agent to Purchaser until
the amount of Claims exceeds $25,000, individually or in the aggregate;
provided, further, that in the event the amount of Claims exceeds $25,000,
individually or in the aggregate, Escrow Agent shall pay the entire amount
without deduction of the first $25,000. Escrow Agent shall not inquire into or
consider whether a Claim complies with the requirements of the Purchase
Agreement.

(b) If a Counter Notice is given with respect to a Claim, Escrow Agent shall
make payment with respect thereto only in accordance with (i) joint written
instructions of Purchaser and Seller or (ii) a final, nonappealable order of a
court of competent jurisdiction. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to Escrow Agent to the
effect that the order is final and nonappealable. Escrow Agent shall act on such
court order and legal opinion without further question.

4. TERMINATION OF ESCROW. On [                    ], 20     [INSERT DATE THAT IS
SIX MONTHS AFTER CLOSING DATE], Escrow Agent shall pay and distribute to Summer
Vista an amount equal to (a) Three Hundred Thousand and No/100 Dollars
($300,000.00) (b) less (i) any Claims paid out of the Escrow Fund as of such
date and less (ii) any amounts unpaid but under a Notice of Claim as of such
date. Notwithstanding the foregoing, if (i) there have been Claims exceeding
$25,000.00, individually or in the aggregate, paid out of the Escrow Fund or
(ii) Escrow Agent has received any Notice of any Claims exceeding $25,000.00,
individually or in the aggregate, from Purchaser which are then pending or
(iii) the sum of any paid and pending Claims exceeds $25,000.00, individually or
in the aggregate, no amounts shall be disbursed from the Escrow Fund pursuant to
the preceding sentence. On [                    ], 20     [INSERT DATE THAT IS
DAY PRIOR TO TERMINATION OF ESCROW], Escrow Agent shall pay and distribute the
then amount of the Escrow Fund to Summer Vista, unless it has received any
Notices of Claims from Purchaser which are then pending, in which case an amount
equal to one hundred percent (100%) of the aggregate dollar amount of such
Claims (as shown in the Notices of such Claims) shall be retained by Escrow
Agent in the Escrow Fund (and the balance paid to Summer Vista) until the
earlier of: (i) the period for receipt of a Counter Notice has passed without
receipt of such Counter Notice (at which time the balance of the Escrow Fund
shall be delivered to Purchaser), or (ii) Escrow Agent receives joint written
instructions of Purchaser and Seller or a final, nonappealable order of a court
of competent jurisdiction as contemplated by Section 3(b).

 

EXHIBIT “B” - 2

--------------------------------------------------------------------------------

5. DUTIES OF ESCROW AGENT.

(a) Escrow Agent shall not be under any duty to give the Escrow Fund held by it
hereunder any greater degree of care than it gives its own similar property and
shall not be required to invest any funds held hereunder except as directed in
this Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.

(b) Escrow Agent shall not be liable for actions or omissions hereunder, except
for its own gross negligence or willful misconduct and, except with respect to
claims based upon such gross negligence or willful misconduct, the other parties
hereto shall jointly and severally indemnify and hold harmless Escrow Agent (and
any successor Escrow Agent) from and against any and all losses, liabilities,
claims, actions, damages and expenses, including reasonable attorneys’ fees and
disbursements, arising out of and in connection with this Agreement. Without
limiting the foregoing, Escrow Agent shall in no event be liable in connection
with its investment or reinvestment of any cash held by it hereunder in good
faith, in accordance with the terms hereof, including, without limitation, any
liability for any delays (not resulting from its gross negligence or willful
misconduct) in the investment or reinvestment of the Escrow Fund or any loss of
interest incident to any such delays.

(c) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.

(d) Escrow Agent may act pursuant to the advice of counsel with respect to any
matter relating to this Agreement and shall not be liable for any action taken
or omitted by it in good faith in accordance with such advice.

(e) Escrow Agent does not have any interest in the Escrow Fund deposited
hereunder but is serving as escrow holder only and has only possession thereof.
Any payments of income from the Escrow Fund shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide Escrow Agent with appropriate Internal Revenue Service Forms
W-9 for tax identification number certification, or nonresident alien
certifications. This Section 5(e) and Section 5(b) shall survive notwithstanding
any termination of this Agreement or the resignation of Escrow Agent.

(f) Escrow Agent makes no representation as to the validity, value, genuineness
or collectability of any security or other document or instrument held by or
delivered to it.

 

EXHIBIT “B” - 3

--------------------------------------------------------------------------------

(g) Escrow Agent shall not be called upon to advise any party as to the wisdom
in selling or retaining or taking or refraining from any action with respect to
the Escrow Fund.

(h) Escrow Agent (and any successor Escrow Agent) may at any time resign as such
by delivering the Escrow Fund to any successor Escrow Agent jointly designated
by the other parties hereto in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of and from any and all
further obligations arising in connection with this Agreement. The resignation
of Escrow Agent will take effect on the earlier of (i) the appointment of a
successor (including a court of competent jurisdiction) or (ii) the day which is
thirty (30) days after the date of delivery of its written notice of resignation
to the other parties hereto. If, at that time, Escrow Agent has not received a
designation of a successor Escrow Agent, Escrow Agent’s sole responsibility
after that time shall be to retain and safeguard the Escrow Fund until receipt
of a designation of successor Escrow Agent or a joint written disposition
instruction by the other parties hereto or a final, nonappealable order of a
court of competent jurisdiction.

(i) In the event of any disagreement between the other parties hereto resulting
in adverse claims or demands being made in connection with the Escrow Fund or in
the event that Escrow Agent is in doubt as to what action it should take
hereunder, Escrow Agent shall be entitled to retain the Escrow Fund until Escrow
Agent shall have received (i) a final, nonappealable order of a court of
competent jurisdiction directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing delivery of the Escrow
Fund, in which event Escrow Agent shall disburse the Escrow Fund in accordance
with such order or agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to Escrow Agent to the
effect that the order is final and nonappealable. Escrow Agent shall act on such
court order and legal opinion without further question.

(j) Purchaser and Seller shall pay Escrow Agent compensation (as payment in
full) for the services to be rendered by Escrow Agent hereunder in the amount of
five hundred dollars ($500) at the time of execution of this Agreement and agree
to reimburse Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its counsel). Any such
compensation and reimbursement to which Escrow Agent is entitled shall be borne
fifty percent (50%) by Summer Vista and fifty percent (50%) by Purchaser. Any
fees or expenses of Escrow Agent or its counsel that are not paid as provided
for herein may be taken from any property held by Escrow Agent hereunder.

(k) No printed or other matter in any language (including, without limitation,
prospectuses, notices, reports and promotional material) that mentions Escrow
Agent’s name or the rights, powers or duties of Escrow Agent shall be issued by
the other parties hereto or on such parties’ behalf unless Escrow Agent shall
first have given its specific written consent thereto.

6. LIMITED RESPONSIBILITY. This Agreement expressly sets forth all the duties of
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations shall be read into this Agreement against Escrow Agent.
Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Agreement and any other agreement executed by
Escrow Agent.

 

EXHIBIT “B” - 4

--------------------------------------------------------------------------------

7. OWNERSHIP FOR TAX PURPOSES. Seller agrees that, for purposes of federal and
other taxes based on income, Summer Vista will be treated as the owner of the
Escrow Fund and that Summer Vista will report all income, if any, that is earned
on, or derived from, the Escrow Fund as its income in the taxable year or years
in which such income is properly includible and pay any taxes attributable
thereto.

8. NOTICES. All notices, consents, waivers and other communications required or
permitted under this Agreement shall be in writing and shall be delivered as
required under Section 13.1 of the Purchase Agreement to the addresses specified
therein, with the address of the Escrow Agent being as follows:

Fidelity National Title Insurance Company

2400 Maitland Center Parkway, Suite 200

Maitland, Florida 32751

Attention: Mr. Sam Sobering

9. JURISDICTION; SERVICE OF PROCESS. Any proceeding arising out of or relating
to this Agreement may be brought in the courts of the State of Florida, County
of Escambia, or, if it has or can acquire jurisdiction, the United States
District Court in and for the Northern District of Florida (Pensacola Division),
and each of the parties irrevocably submits to the exclusive jurisdiction of
each such court in any such proceeding and waives any objection it may now or
hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the proceeding shall be heard and determined only in any such court
and agrees not to bring any proceeding arising out of or relating to this
Agreement in any other court. Process in any proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.

10. EXECUTION OF AGREEMENT. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile or e-mail transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in
lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or e-mail shall be deemed to be their original
signatures for any purposes whatsoever.

11. SECTION HEADINGS, CONSTRUCTION. The headings of sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation.

12. WAIVER. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given

 

EXHIBIT “B” - 5

--------------------------------------------------------------------------------

by a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.

13. ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter and constitutes
(along with the documents referred to in this Agreement) a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by Purchaser, Seller and Escrow Agent.

14. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
Florida without regard to conflicts of law principles that would require the
application of any other Law.

[Signatures appear on following pages]

 

EXHIBIT “B” - 6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.

 

SELLER: SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited liability company
By:  

 

Name:   Patrick Duplantis Title:   Director HARDCOURT DEVELOPMENT NO. 2, LLC, a
Florida limited liability company By:  

 

Name:   Patrick Duplantis Title:   Director

 

EXHIBIT “B” - 7

--------------------------------------------------------------------------------

[Signature Page to Escrow Agreement]

 

PURCHASER: CHP II [                    ], LLC, a Delaware limited liability
company By:  

 

Name:  

 

Title:  

 

 

EXHIBIT “B” - 8

--------------------------------------------------------------------------------

[Signature Page to Escrow Agreement]

 

ESCROW AGENT: FIDELITY NATIONAL TITLE INSURANCE COMPANY By:  

 

Name:  

 

Title:  

 

 

EXHIBIT “B” - 9

--------------------------------------------------------------------------------

EXHIBIT 6.13

RIGHT OF FIRST OFFER

THIS RIGHT OF FIRST OFFER AGREEMENT (this “Agreement”) is made
on                             , 2017 (the “Effective Date”) by and between
SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited liability company and
HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited liability company (together,
“Offeror”) and CHP II PARTNERS, LLC, a Delaware limited liability company, or
its assigns (“Offeree”). Offeror and Offeree are, at times, each individually
referred to herein as a “Party” and, together, as the “Parties”.

W I T N E S S E T H

WHEREAS, Offeror and Offeree (by assignment) are parties to that certain Asset
Purchase Agreement dated                             , 2017 (as amended and
assigned from time to time, the “Purchase Agreement”) pursuant to which Offeree
agreed to purchase certain property more particularly described on Exhibit “A”
attached hereto (the “Benefitted Property”) from Offeror; and

WHEREAS, the execution of this Agreement was a material inducement to Offeree to
enter into the Purchase Agreement and consummate the purchase of the Benefitted
Property; and

WHEREAS, Offeror was, and will continue to be, benefitted by the consummation of
the transactions contemplated by the Purchase Agreement; and

WHEREAS, Offeror has agreed to grant to Offeree certain rights of first offer
pursuant to the terms and provisions of this Agreement.

NOW THEREFORE, for and in consideration of the premises hereof and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor and Grantee hereby agree as follows:

1. Definitions; Incorporation. All capitalized terms shall have the meaning
ascribed to them in this Agreement. If any capitalized term is not defined
herein, such term shall have the meaning ascribed to it in the Purchase
Agreement. All exhibits referenced in this Agreement are hereby incorporated
herein and made a part hereof by this reference.

2. Terms of Rights of First Offer.

(a) For three (3) calendar years following the Effective Date, if Offeror (which
for purposes of this Agreement shall include any “Affiliate” of Offeror, as such
term is defined in the Purchase Agreement) desires to market any independent
living facility (each a “Facility”) located within seven (7) miles of the
Benefitted Property to a third and unaffiliated party, Offeror shall first offer
the Facility to Offeree, in writing and in accordance with the provisions of
Section 3 (the “ROFO Notice”). The ROFO Notice shall set forth the material
business terms of such proposal including, without limitation, Offeror’s
proposed sales price. During the forty-five (45) day period following
immediately after Offeree’s receipt of the ROFO Notice (the “Negotiation
Period”), Offeror and Offeree shall each use good faith, commercially reasonable
efforts to

 

EXHIBIT “6.13 ” - 1

--------------------------------------------------------------------------------

negotiate and reach an agreement on the purchase price for the Facility and
enter into a letter of intent which sets forth the terms of such purchase.
Offeror and Offeree acknowledge and agree that the form of purchase agreement to
be used with respect to the sale and purchase of the Facility or Land in
connection therewith shall be substantially similar to the Purchase Agreement.

(b) In the event that Offeror and Offeree do not enter into a letter of intent
with respect to the purchase and sale of the Facility prior to the expiration of
the Negotiation Period, or if such a letter of intent is executed but the sale
contemplated thereby is not consummated in accordance therewith, for twelve
(12) months from the expiration of the Negotiation Period, Offeror shall have
the right, but not the obligation, to market the Facility for sale thereafter.
If the Offeror fails to sell the Facility within twelve (12) months following
the expiration of the Negotiation Period, and the Offeror wishes to continue
marketing the Facility for sale, then the Parties shall repeat the process set
forth in Paragraph 2(a) above.

(c) During the twelve (12) month period following expiration of the Negotiation
Period, Offeror may enter into a contract to sell a Facility, provided that:
(i) the terms and conditions of the contract, other than the purchase price, are
not materially worse than those set forth in the ROFO Notice, (ii) the purchase
price of the contract is not less than ninety-eight percent (98%) of the price
offered in the ROFO Notice. However, if either of the foregoing conditions is
violated, then Offeree shall be obligated to provide Offeree with a new ROFO
Notice with the new proposed contract terms and the process set forth in
Paragraph 2(a) above shall be repeated.

3. Notices. Any notices or other communications permitted or required to be
given hereunder shall be in writing and shall be delivered by both electronic
mail transmission and one of the following forms of delivery: (a) personally, in
which case notice shall be deemed delivered upon receipt or refusal of delivery;
or (b) by reputable overnight delivery service, in which case notice shall be
deemed delivered on the date of deposit with such courier. Any notice so given
shall be deemed to have been given upon receipt or refusal to accept delivery.
Unless changed in accordance with the preceding sentence, the addresses for
notices given pursuant to this Agreement shall be as follows:

 

If to Offeror:   

Summer Vista Assisted Living, LLC

Hardcourt Development No. 2, LLC

2131 Banquos Trail

Pensacola, Florida 32503

Attention: Patrick Duplantis, Director

Telephone No.: (813) 240-0125

Facsimile No.: None

Email: pduplantis49@gmail.com

 

EXHIBIT “6.13” - 2

--------------------------------------------------------------------------------

with a copy to:   

Hightower Law Firm    

119 North Palafox Street

Pensacola, FL 32502    

Attention: David E. Hightower, Esquire

Telephone No.: (850) 549-3812

Facsimile No.:    (850) 607-2663

E-Mail: david@htowerlaw.com

If to Offeree:   

CHP II Partners, LP

c/o CNL Healthcare Properties II, Inc.

450 South Orange Avenue, 14th Floor

Orlando, Florida 32801

Attention: Chief Financial Officer and

Assistant General Counsel

Telephone No.: (407) 650-1000

Facsimile No.: (407) 540-2576

E-Mail: kevin.maddron@cnl.com

E-Mail: tracey.bracco@cnl.com

with a copy to:   

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

215 North Eola Drive

Orlando, Florida 32801

Attention: John D. Ruffier, Esquire

Telephone No.: (407) 843-4600

Facsimile No.: (407) 843-4444

E-Mail: john.ruffier@lowndes-law.com

Notice shall be deemed to have been given upon actual receipt by the intended
recipient.

4. Miscellaneous.

(a) This Agreement sets forth the entire understanding and agreement of the
Parties hereto with respect to the matters set forth herein, and shall supersede
any other agreements and understandings (written or oral) between the Parties on
or prior to the Effective Date with respect to the transactions described in
this Agreement.

(b) No Party shall be deemed to have waived the exercise of any right which it
holds under this Agreement unless such waiver is made expressly and in writing.
No delay or omission by any Party in exercising any right shall be deemed a
waiver of its future exercise. No waiver made as to any instance involving the
exercise of any right shall be deemed a waiver as to any other instance, or any
other right.

(c) This Agreement shall be given effect and construed by application of the law
of the State of Florida. Any action arising hereunder shall be brought in the
courts of Escambia County, Florida.

 

EXHIBIT “6.13” - 3

--------------------------------------------------------------------------------

(d) No determination that any provision of this Agreement is invalid or
unenforceable in any instance shall affect the validity or enforceability of any
other such provision, or that provision in any circumstance not controlled by
such determination. Each provision shall be valid and enforceable to the fullest
extent allowed by, and shall be construed wherever possible as being consistent
with, applicable law.

(e) Time shall be of the essence of this Agreement.

(f) This Agreement may be signed in counterparts, all of which when taken
together shall constitute the one and same original. The exchange of copies of
this Agreement and of signature pages by electronic mail shall constitute
effective execution and delivery of this Agreement as to the Parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
Parties transmitted by electronic mail shall be deemed to be their original
signatures for all purposes.

(g) Each Party hereby acknowledges that all Parties participated equally in the
negotiation and drafting of this Agreement and that, accordingly, no court
construing this Agreement shall construe it more stringently against one party
than against the other.

(h) Offeror and Offeree represent and warrant to each other that neither has
dealt with any broker or agent in the negotiation of this Agreement. Offeree
agrees to indemnify and hold Offeror harmless from any and all costs or
liability for compensation claimed by any broker or agent employed by Offeree or
claiming to have been engaged by Offeree in connection with this Agreement.
Offeror agrees to indemnify and hold Offeree harmless from any and all costs or
liability for compensation claimed by any broker or agent employed by Offeror or
claiming to have been engaged by Offeror in connection with this Agreement.

(i) Offeror and Offeree hereby represent and warrant to each other that all
consents or approvals required for the execution, delivery and performance of
this Agreement have been obtained and that each party (including its signatory)
has the right and authority to enter into and perform its covenants contained in
this Agreement.

(j) This Agreement shall not be recorded by either Party.

(k) This Agreement shall not be amended, and no obligation of a party shall be
waived, except by written instrument signed by both of the Parties.

 

EXHIBIT “6.13” - 4

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been executed in manner and form
sufficient to bind them as of the date and year first above written.

 

Signed, sealed and delivered in the presence of:       OFFEROR:

 

                                                                      

Name:                                                          

 

                                                                      

Name:                                                          

 

     

 

SUMMER VISTA ASSISTED LIVING, LLC,

a Florida limited liability company

 

By:_____________________________

Name: Patrick Duplantis

Title: Director

 

                                                                      

Name:                                                          

 

                                                                      

Name:                                                          

     

HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited liability company

 

By:_____________________________

Name: Patrick Duplantis

Title: Director

STATE OF FLORIDA

COUNTY OF                                             

The foregoing instrument was acknowledged before me this              day of
                , 2017 by [                            ], as
[                            ] of [                            ],
a                                                         , on behalf of the
                            . He is personally known to me or has produced
                                                          as identification.

 

(NOTARY SEAL)                                                                 
  

 

      Signature of Notary Public       Typed or Printed Name of Notary      
Commission No.:       My Commission Expires:

 

EXHIBIT “6.13” - 5

--------------------------------------------------------------------------------

Signed, sealed and delivered in the presence of:       OFFEROR:

 

                                                                      

Name:                                                          

 

                                                                      

Name:                                                          

 

     

 

CHP II PARTNERS, LP, a Delaware limited partnership

 

By: CHP II GP, LLC, a Delaware limited liability company, its General Partner

 

By: CNL Healthcare Properties II, Inc., a Maryland corporation, its Managing
Member

 

By:_____________________________

Name:

Title:

STATE OF FLORIDA

COUNTY OF ORANGE

The foregoing instrument was acknowledged before me this          day of
                , 2017 by [                            ], as
[                            ] of CNL HEALTHCARE PROPERTIES, INC., a Maryland
corporation and the Managing Member of CHP GP, LLC, a Delaware limited liability
company and the General Partner of CHP PARTNERS, LP, a Delaware limited
partnership, on behalf of the corporation. He/She is personally known to me or
has produced                                                           as
identification.

 

(NOTARY SEAL)                                                                 
  

 

      Signature of Notary Public       Typed or Printed Name of Notary      
Commission No.:       My Commission Expires:

 

EXHIBIT “6.13” - 6

--------------------------------------------------------------------------------

EXHIBIT “A”

Legal Description of the Land

Lot 2, New Hope Place, a replat of a portion of Mallory Heights Unit #3 and
subdivision of a portion of Section 16, Township 1 South, Range 29 West, City of
Pensacola, Escambia County, Florida as recorded in Plat Book 19 at page 17 of
the public records of said County.

 

EXHIBIT “6.13” - 7

--------------------------------------------------------------------------------

EXHIBIT “8.3.1”

FORM OF SELLERS’ CLOSING CERTIFICATE

——  

SELLERS’ CLOSING CERTIFICATE

THIS SELLERS’ CLOSING CERTIFICATE (this “Certificate”) is made and entered into
as of the              day of                     , 2017, by SUMMER VISTA
ASSISTED LIVING, LLC, , a Florida limited liability company and HARDCOURT
DEVELOPMENT NO. 2, LLC, a Florida limited liability company (together,
“Sellers”), to and in favor of CHP II [                            ], LLC, a
Delaware limited liability company (“Purchaser”), pursuant to Section 8.3.1 of
that certain Asset Purchase Agreement, dated as of                         ,
2017, by and between Sellers and Purchaser, as assignee of CHP II PARTNERS, LP
(the “Agreement”), with respect to the purchase and sale of the Assets, as
defined in the Agreement.

The undersigned, on behalf of Sellers, hereby certifies as follows:

1. I am the duly elected, qualified and acting Director of Sellers, and I have
been duly authorized to execute and deliver this Certificate on behalf of
Sellers.

2. The representations and warranties set forth in Section 5.1 of the Agreement
are true and correct as of the date hereof.

3. Sellers performed all of their covenants and obligations under the Agreement
as of the date hereof.

IN WITNESS WHEREOF, Sellers executed this Certificate as of the day and year
first above written.

 

SELLERS:

 

SUMMER VISTA ASSISTED LIVING, LLC,

a Florida limited liability company

 

By: _____________________________

Name: Patrick Duplantis

Title: Director

 

EXHIBIT “8.3.1” - 1

--------------------------------------------------------------------------------

HARDCOURT DEVELOPMENT NO. 2, LLC,

a Florida limited liability company

 

By: _____________________________

Name: Patrick Duplantis

Title: Director

 

EXHIBIT “8.3.1” - 2

--------------------------------------------------------------------------------

EXHIBIT “8.3.2”

FORM OF DEED

——  

This instrument was prepared

by and should be returned to:

[                                         ]

[                                         ]

[                                         ]

[                                         ]

SPECIAL WARRANTY DEED

THIS SPECIAL WARRANTY DEED, made and executed as of the              day of
                     2017 by HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited
liability company, having a mailing address at 2131 Banquos Trail, Pensacola,
Florida 32503 (hereinafter referred to as the “Grantor”) to and in favor of CHP
II [                        ], LLC, a Delaware limited liability company, whose
address is c/o CNL Healthcare Properties II, Inc., 450 South Orange Avenue,
Suite 1400, Orlando, Florida 32801, Attention: General Counsel and Senior Vice
President (hereinafter referred to as the “Grantee”);

W I T N E S S E T H:

That the Grantor, for and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by these presents grants, bargains, sells, alienates,
remises, releases, conveys, and confirms unto the Grantee that certain piece,
parcel or tract of land situated in Escambia County, Florida particularly
described as follows, to wit: SEE EXHIBIT “A” (hereinafter referred to as the
“Subject Property”);

TOGETHER WITH all the tenements, hereditaments, easements and appurtenances,
including riparian rights, if any, thereto belonging or in anywise appertaining;

TO HAVE AND TO HOLD the Subject Property in fee simple forever;

AND the Grantor hereby covenants with and warrants to the Grantee that the
Grantor is lawfully seized of the Subject Property in fee simple; that the
Grantor has good right and lawful authority to sell and convey the Subject
Property; and that the Grantor fully warrants the title to the Subject Property
and will defend the same against the lawful claims of all persons claiming by,
through or under the Grantor, but against none other;

THE conveyance made herein, however, is expressly made SUBJECT TO ad valorem
real property taxes and assessments for the year 2017 and thereafter, not yet
due and payable, and the easements and restrictions described on EXHIBIT “B”
attached hereto, the reference to which shall not operate to reimpose or modify
the same.

 

EXHIBIT “8.3.2” - 1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Grantor has caused these presents to be executed and
delivered in manner and form sufficient to bind it as of the day and year first
above written.

 

Signed, sealed and delivered in the

presence of

    GRANTOR:

    

    HARDCOURT DEVELOPMENT NO. 2, LLC, a Name:  

 

    Florida limited liability company        

 

    By:  

 

Name:  

 

    Name:   Patrick Duplantis       Title:   Director

STATE OF FLORIDA

COUNTY OF ___________________

The foregoing instrument was acknowledged before me this              day of
                    , 2017 by [                ], as [                ] of
[            ], a                 , on behalf of the                 . He is
personally known to me or has produced                      as identification.

 

(NOTARY SEAL)

  

 

  

Signature of Notary Public

 

  

Typed or Printed Name of Notary

  

Commission No.:

  

My Commission Expires:

 

EXHIBIT “8.3.2” - 2

--------------------------------------------------------------------------------

EXHIBIT “A”

LEGAL DESCRIPTION

Lot 2, New Hope Place, a replat of a portion of Mallory Heights Unit #3 and
subdivision of a portion of Section 16, Township 1 South, Range 29 West, City of
Pensacola, Escambia County, Florida as recorded in Plat Book 19 at page 17 of
the public records of said County.

 

EXHIBIT “8.3.2” - 3

--------------------------------------------------------------------------------

EXHIBIT “B”

PERMITTED EXCEPTIONS

[To contain Permitted Exceptions; provided, however, the Deed shall not list as
a Permitted Exception any exception for any matters appearing solely on the
Survey and not otherwise appearing in the public records of Escambia County,
Florida.]

 

EXHIBIT “8.3.2” - 4

--------------------------------------------------------------------------------

EXHIBIT “8.3.3”

FORM OF BILL OF SALE

——  

BILL OF SALE

THIS BILL OF SALE (“Bill of Sale”) is made and entered into on this             
day of                     , 2017 (the “Effective Date”), by and between SUMMER
VISTA ASSISTED LIVING, LLC, , a Florida limited liability company and HARDCOURT
DEVELOPMENT NO. 2, LLC, a Florida limited liability company (together, “Sellers”
and individually a “Seller”), and CHP II [                                    ],
LLC, a Delaware limited liability company (“Purchaser”).

RECITALS

WHEREAS, Sellers and CHP II Partners, LP entered into that certain Asset
Purchase Agreement, effectively dated as of         ,             2017 (as
amended and assigned from time to time, the “Purchase Agreement”) and unless
otherwise defined herein, all capitalized terms have the meanings ascribed to
such terms in the Purchase Agreement; and

WHEREAS, CHP II Partners, LP assigned its interest in the Purchase Agreement to
Purchaser pursuant to that certain Assignment and Assumption of Asset Purchase
Agreement dated as of the Effective Date; and

WHEREAS, in connection with the sale and purchase of the Assets, each Seller
agreed to sell, transfer and convey to Purchaser all of the Fixtures, Personal
Property, Consumables, Plans and Specifications, Warranties, General
Intangibles, Books and Records and the Other Assets owned by such Seller
(collectively the “Conveyed Assets”).

IN CONSIDERATION OF the receipt of TEN DOLLARS ($10.00) and other good and
valuable consideration in hand paid by Purchaser to Sellers, the receipt and
sufficiency of which are hereby acknowledged and confessed by Sellers, Sellers
and Purchaser do hereby agree as follows:

AGREEMENTS

1. Recitals. The foregoing recitals are true, correct and by this reference
incorporated herein.

2. Conveyed Assets. Each Seller hereby sells, convey, assign, transfer, set
over, and deliver to Purchaser, its successors and assigns, all of the Conveyed
Assets owned by such Seller free and clear of all liens all liens, mortgages,
security interests, adverse claims, and all encumbrances, and Purchaser hereby
purchases and accepts all of the Conveyed Assets, as of the Closing Date.

 

EXHIBIT “8.3.3” - 1

--------------------------------------------------------------------------------

3. Subject to Terms and Conditions of Purchase Agreement. This Bill of Sale
shall be subject to the terms and conditions set forth in the Purchase Agreement
and nothing contained in this Bill of Sale shall be construed to limit,
terminate or expand the representations, warranties and covenants set forth in
the Purchase Agreement.

4. Binding Effect. This Bill of Sale shall be binding upon and inure to the
benefit of Purchaser, Sellers and their respective successors and assigns.

5. Governing Law. This Bill of Sale shall be subject to and governed by the laws
of the State of Florida.

6. Counterparts. A party hereto may deliver executed signature pages to this
Bill of Sale by facsimile transmission or other electronic submission to the
other party hereto, which facsimile copy or electronic copy shall be deemed to
be an original executed signature page. This Bill of Sale may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which counterparts together shall constitute one agreement with the same effect
as if the parties hereto had signed the same signature page.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON FOLLOWING PAGES]

 

EXHIBIT “8.3.3” - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Sellers and Purchaser have caused this Bill of Sale to be
executed effective as of the date first above written.

 

SELLERS:

 

SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited liability company

By:                                          
                                                       

Name: Patrick Duplantis

Title: Director

HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited liability company By:
                                         
                                                       

Name: Patrick Duplantis

Title: Director

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

EXHIBIT “8.3.3” - 3

--------------------------------------------------------------------------------

PURCHASER:

 

CHP II [                        ], LLC, a Delaware limited liability company

By:  

 

Name: Title:

 

EXHIBIT “8.3.3” - 4

--------------------------------------------------------------------------------

EXHIBIT “8.3.4”

FORM OF ASSIGNMENT AND ASSUMPTION OF FACILITY CONTRACTS, LICENSES AND PERMITS,
TENANT LEASES AND RESIDENT AGREEMENTS

——  

ASSIGNMENT AND ASSUMPTION OF FACILITY CONTRACTS, LICENSES AND PERMITS, TENANT
LEASES, AND RESIDENT AGREEMENTS

THIS ASSIGNMENT AND ASSUMPTION OF FACILITY CONTRACTS, LICENSES AND PERMITS,
TENANT LEASES, AND RESIDENT AGREEMENTS (this “Assignment”) is made and entered
into on this              day of                  2017, (the “Effective Date”)
by and between SUMMER VISTA ASSISTED LIVING, LLC, , a Florida limited liability
company and HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited liability
company (together, “Assignors” and individually an “Assignor”) and CHP II
[                    ], LLC, a Delaware limited liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignors and CHP II Partners, LP entered into that certain Asset
Purchase Agreement, effectively dated as of                 , 2017 (as amended
and assigned from time to time, the “Purchase Agreement”) and unless otherwise
defined herein, all capitalized terms have the meanings ascribed to such terms
in the Purchase Agreement; and

WHEREAS, CHP II Partners, LP assigned its interest in the Purchase Agreement to
Assignee pursuant to that certain Assignment and Assumption of Asset Purchase
Agreement dated as of the Effective Date; and

WHEREAS, Assignors are the owners of the Conveyed Assets (as defined herein);
and

WHEREAS, in connection with the sale and purchase of the Assets, each Assignor
agreed to assign all of the Conveyed Assets owned by such Assignor to Assignee,
and Assignee has agreed to assume from Assignors all of Assignors’ Liabilities
with respect to the Conveyed Assets arising or accruing on or after the
Effective Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
agree as follows:

1. Recitals. The foregoing recitals are true, correct and by this reference
incorporated herein.

2. Assignment. Each Assignor hereby assigns, sells, transfers, conveys, and
delivers to Assignee ll of the following tangible and intangible assets
(collectively, the “Conveyed Assets”) owned by such Assignor:

 

EXHIBIT “8.3.4” - 1

--------------------------------------------------------------------------------

(a) All Facility Contracts to the extent listed on Exhibit A attached hereto,
together with any and all security deposits associated with or otherwise
relating to such Facility Contracts;

(b) To the extent assignable/transferable under applicable law, all Licenses and
Permits to the extent listed on Exhibit B attached hereto;

(c) All Tenant Leases to the extent listed on Exhibit C attached hereto; and

(d) All Resident Agreements to the extent listed on Exhibit D attached hereto,
together with any and all security deposits associated with or otherwise
relating to such Resident Agreements.

3. Assumption. Assignee hereby accepts the assignment, sale, transfer,
conveyance, and delivery of the Conveyed Assets. Assignee hereby assumes all
Liabilities of Assignors with respect to the Conveyed Assets which arise or
accrue on or after the Effective Date, and agrees to perform all obligations of
Assignors with respect to the Conveyed Assets which are to be performed or which
become due on or after the Effective Date.

4. Subject to Terms and Conditions of Purchase Agreement. This Assignment shall
be subject to the terms and conditions set forth in the Purchase Agreement and
nothing contained in this Assignment shall be construed to limit, terminate or
expand the representations, warranties and covenants set forth in the Purchase
Agreement.

5. Further Assurances. Assignors covenant with Assignee and Assignee covenants
with Assignors that each will execute or procure any additional documents
necessary to establish the rights of the other hereunder.

6. Counterparts. A party hereto may deliver executed signature pages to this
Assignment by facsimile or other electronic transmission to the other party
hereto, which facsimile or electronic copy shall be deemed to be an original
executed signature page. This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one agreement with the same effect as if
the parties hereto had signed the same signature page.

7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of Assignors, Assignee and their respective successors and assigns.

8. Governing Law. This Assignment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Florida.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON FOLLOWING PAGES]

 

EXHIBIT “8.3.4” - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Assignors and Assignee have caused this Assignment to be
executed effective as of the day first above written.

 

ASSIGNORS:

 

SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited liability company

By:                                          
                                                       

Name: Patrick Duplantis

Title: Director

HARDCOURT DEVELOPMENT NO. 2, LLC,

a Florida limited liability company

By:                                         
                                                           

Name: Patrick Duplantis

Title: Director

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

EXHIBIT “8.3.4” - 3

--------------------------------------------------------------------------------

ASSIGNEE:

 

CHP II [                            ], LLC, a

Delaware limited liability company

By:                                          
                                    Name:
                                                                          Title:
                                                                           

 

EXHIBIT “8.3.4” - 4

--------------------------------------------------------------------------------

EXHIBIT A

FACILITY CONTRACTS

 

EXHIBIT “8.3.4” - 5

--------------------------------------------------------------------------------

EXHIBIT B

LICENSES AND PERMITS

 

EXHIBIT “8.3.4” - 6

--------------------------------------------------------------------------------

EXHIBIT C

TENANT LEASES

 

EXHIBIT “8.3.4” - 7

--------------------------------------------------------------------------------

EXHIBIT D

RESIDENT AGREEMENTS

 

EXHIBIT “8.3.5” - 1

--------------------------------------------------------------------------------

EXHIBIT “8.3.5”

FORM OF ASSIGNMENT AND ASSUMPTION OF INTELLECTUAL PROPERTY

——  

ASSIGNMENT AND ASSUMPTION OF INTELLECTUAL PROPERTY

THIS ASSIGNMENT AND ASSUMPTION OF INTELLECTUAL PROPERTY (this “Assignment”) is
made and entered into as of the              day of                     , 2017
(the “Effective Date”), by and between SUMMER VISTA ASSISTED LIVING, LLC, a
Florida limited liability company and HARDCOURT DEVELOPMENT NO. 2, LLC, a
Florida limited liability company (together, “Assignors” and individually an
“Assignor”), and CHP II [                    ], LLC, a Delaware limited
liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignors and CHP II Partners, LP entered into that certain Asset
Purchase Agreement, effectively dated as of                     , 2017 (as
amended and assigned from time to time, the “Purchase Agreement”) and unless
otherwise defined herein, all capitalized terms have the meanings ascribed to
such terms in the Purchase Agreement; and

WHEREAS, CHP II Partners, LP assigned its interest in the Purchase Agreement to
Purchaser pursuant to that certain Assignment and Assumption of Asset Purchase
Agreement dated as of the Effective Date; and

WHEREAS, Assignors are the owners of the Conveyed Intellectual Property (as
defined herein); and

WHEREAS, in connection with the sale and purchase of the Assets, Assignors
agreed to assign all of the Intellectual Property relating to the Business owned
by such Assignor to Assignee (the “Conveyed Intellectual Property”), and
Assignee has agreed to assume from Assignor all of Assignors’ Liabilities with
respect to the Conveyed Intellectual Property arising or accruing on or after
the Effective Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
agree as follows:

1. Recitals. The foregoing recitals are true, correct and by this reference
incorporated herein.

2. Assignment. Assignors hereby assign, sell, transfer, convey and deliver to
Assignee, effective as of the Effective Date, all of the Conveyed Intellectual
Property.

3. Assumption. Assignee hereby accepts the assignment, sale, transfer,
conveyance, and delivery of the Conveyed Intellectual Property and hereby
assumes all obligations and liabilities of Assignors under the Conveyed
Intellectual Property which arise or accrue on or after

 

EXHIBIT “8.3.5” - 1

--------------------------------------------------------------------------------

the Effective Date, and agrees to perform all obligations of Assignors with
respect to the Conveyed Intellectual Property which are to be performed or which
become due on or after the Effective Date.

4. Subject to Terms and Conditions of Purchase Agreement. This Assignment shall
be subject to the terms and conditions set forth in the Purchase Agreement and
nothing contained in this Assignment shall be construed to limit, terminate or
expand the representations, warranties and covenants set forth in the Purchase
Agreement.

5. Further Assurances. Assignors covenant with Assignee and Assignee covenants
with Assignor that each will execute or procure any additional documents
necessary to establish the rights of the other hereunder.

6. Counterparts. A party hereto may deliver executed signature pages to this
Assignment by facsimile or other electronic transmission to the other party
hereto, which facsimile or electronic copy shall be deemed to be an original
executed signature page. This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one agreement with the same effect as if
the parties hereto had signed the same signature page.

7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of Assignors, Assignee and their respective successors and assigns.

8. Governing Law. This Assignment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Florida.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON FOLLOWING PAGES]

 

EXHIBIT “8.3.5” - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Assignor and Assignee have executed this Assignment as
of the date set forth above.

 

ASSIGNORS:

 

SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited liability company

 

By:  

 

Name:   Patrick Duplantis Title:   Director

 

HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited liability company

 

By:  

 

Name:   Patrick Duplantis Title:   Director

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

EXHIBIT “8.3.5” - 3

--------------------------------------------------------------------------------

ASSIGNEE:

 

CHP II [                        ], LLC, a

Delaware limited liability company

 

By:  

 

Name:  

 

Title:  

 

 

EXHIBIT “8.3.5” - 4

--------------------------------------------------------------------------------

Exhibit 8.3.11

Form of Tenant and Resident Notices

NOTICE OF SALE OF THE COMMUNITY

AND ASSIGNMENT OF RESIDENT AGREEMENTS [AND LEASES]

[Insert Date]

Summer Vista Assisted Living Community

3450 Wimbledon Drive

Pensacola, Florida 32504

 

  RE: Sale of Summer Vista Assisted Living Community (the “Community”) and

    Assignment of the Community Resident Agreements [and Leases]

Dear Residents [and Tenants]:

We are writing to notify you that, as of the date hereof:

1. The Community has been sold to subsidiaries of CNL Healthcare Properties II,
Inc. (“CHP”), and the rights and obligations of the Community under your
Resident Agreement have been assigned to CHP II [                    ], which is
one of the subsidiaries of CHP.

2. Future payments to the Community should be made payable to
[“                    ”] and should be delivered to the onsite business office
or mailed to the following address:[                    ].

[3. Any refundable deposit relating to your Resident Agreement has been
transferred to [                    ], who will be responsible for such deposit
as set forth in your Resident Agreement.]

Thank you for your understanding. It has been an honor to serve you.

 

Sincerely,

 

SUMMER VISTA ASSISTED LIVING,

LLC, a Florida limited liability company

 

By:  

 

Name:   Patrick Duplantis Title:   Director

 

EXHIBIT “8.3.11” - 1

--------------------------------------------------------------------------------

EXHIBIT “8.3.15”

FORM OF SELLERS’ CERTIFICATE

——  

Sellers’ Certificate

This SELLERS’ CERTIFICATE (the “Certificate”) dated                     , 2017,
is being delivered by SUMMER VISTA ASSISTED LIVING, LLC, , a Florida limited
liability company and HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited
liability company (together, “Sellers” and individually a “Seller”), to CNL
Healthcare Properties II, Inc., a Maryland corporation (“CNL”), and its
applicable subsidiaries, in connection with the acquisition being closed on the
date hereof (the “Transaction”), which Transaction is set forth in that certain
(i) Asset Purchase Agreement, dated as of                 , 2017, by and among
Seller, as Seller, and CHP II Partners, LP, as purchaser, as Purchaser’s
interest in such agreement has been assigned by CHP II    Partners, LP to CHP II
[                    ], LLC, a Delaware limited liability company (“Purchaser”),
by Assignment and Assumption of Asset Purchase Agreement of even date herewith
(as amended and assigned, the “Purchase Agreement”, capitalized but undefined
terms in this Certificate have the meaning ascribed to them in the Purchase
Agreement which is incorporated herein by reference), and (ii) those certain
agreements, documents, instruments, certificates, assignments, assumptions,
deeds, bills of sale, estoppels, affidavits, notices, terminations and releases
executed and delivered between Seller (and its applicable affiliates) and
Purchaser (and its applicable affiliates) in connection with the closing of the
transactions set forth in the Purchase Agreement (collectively with the Purchase
Agreement, the “Transaction Documents”).

After investigation and consultation with all necessary parties, a review of the
relevant Transaction Documents and additional relevant documents and records,
the undersigned, on behalf of Sellers, hereby certifies, warrants and represents
to CNL as follows:

1. I am the duly elected or appointed, qualified and acting representative of
Sellers, and I have been duly authorized to execute and deliver this Certificate
on behalf of Sellers.

2. To Sellers’ Knowledge, neither CNL, nor any subsidiary of CNL, nor any
officer, director, manager, employee, agent, representative or consultant of CNL
or any subsidiary of CNL, or any immediate family member of any of the foregoing
(each, a “CNL Party”) has, or has ever had, any direct or indirect ownership or
beneficial interest in Sellers, any Affiliate of Sellers or any entity having an
ownership or beneficial interest in Sellers or any Affiliate of Sellers. To
Sellers’ Knowledge, neither Sellers nor any of their Affiliates, nor any of
their officers, directors, managers, employees, agents, representatives or
consultants, or any immediate family member of any of the foregoing (each, a
“Seller Party”), have any agreements (whether oral or written), or intends to
have any agreements (whether oral or written), for any dealings or arrangements
with any CNL Party that will result in any CNL Party having any direct or
indirect ownership or beneficial interest in Sellers or any Affiliate of
Sellers.

3. To Sellers’ Knowledge, no CNL Party possesses, or has ever possessed,
directly or indirectly, the power to direct or cause the direction of the
management of Sellers or any

 

EXHIBIT “8.3.15” - 1

--------------------------------------------------------------------------------

Affiliate of Sellers, whether through the ownership of voting securities, by
contract or otherwise. To Sellers’ Knowledge, no Seller Party has any agreements
(whether oral or written), or intends to have any agreements (whether oral or
written), for any dealings or arrangements with any CNL Party that will result
in any CNL Party having any power to direct or cause the direction of the
management of Sellers or any Affiliate of Sellers, whether through the ownership
of voting securities, by contract or otherwise.

4. To Sellers’ Knowledge, no CNL Party is currently, or within the last five
(5) years has been, an officer, director or manager, nor to Sellers’ Knowledge
an employee, agent, representative or consultant of, such Seller. To Sellers’
Knowledge, no Seller Party has any employment, consulting or similar agreements
or arrangements (whether oral or written), or intends to have any employment,
consulting or similar agreements or arrangements (whether oral or written) or
arrangements (whether oral or written), with any CNL Party.

5. To Sellers’ Knowledge, other than as set forth in the Transaction Documents,
there are no, and there have not been any, agreements (written or oral),
understandings (written or oral), payments, contributions, significant gifts,
transfers of interests, personal loans or other consideration made, exchanged or
promised, or to be made, exchanged or promised, between or from any Seller Party
and or to any CNL Party with respect to negotiation and consummation of the
Transactions.

6. To Sellers’ Knowledge, with respect to the business to be operated by a third
party tenant as a result of the consummation of the Transaction, no Seller Party
has any agreements (whether oral or written), or intends to have any agreements
(whether oral or written), for any dealings or arrangements with any CNL Party
that will result in the payment of any sum of money, transfer of any interest or
any other type of consideration to any CNL Party other than as set forth in the
Transaction Documents.

7. Sellers understand that CNL, its securities counsel, its tax counsel and its
accountants are relying on this Certificate with respect to CNL’s reporting and
other requirements under the rules and regulations of the Securities and
Exchange Commission, including, without limitation, the Sarbanes-Oxley Act of
2002.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

EXHIBIT “8.13.15” - 2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date
first written above.

 

SELLERS:

 

SUMMER VISTA ASSISTED LIVING, LLC, a

Florida limited liability company

 

By:  

 

Name:   Patrick Duplantis Title:   Director

 

HARDCOURT DEVELOPMENT NO. 2, LLC, a

Florida limited liability company

 

By:  

 

Name:   Patrick Duplantis Title:   Director

 

EXHIBIT “8.3.15” - 3

--------------------------------------------------------------------------------

EXHIBIT “8.4.3”

FORM OF PURCHASER’S CLOSING CERTIFICATE

——  

PURCHASER’S CLOSING CERTIFICATE

THIS PURCHASER’S CLOSING CERTIFICATE (“Certificate”) is made and entered into as
of the             _ day of                     , 2017, by CHP II
                    ], LLC, a Delaware limited liability company (“Purchaser”),
to and in favor of SUMMER VISTA ASSISTED LIVING, LLC, a Florida limited
liability company and HARDCOURT DEVELOPMENT NO. 2, LLC, a Florida limited
liability company (together, “Sellers”), pursuant to Section 8.4.3 of that
certain Asset Purchase Agreement, dated as of                 , 2017, by and
between Sellers and Purchaser, as assignee of CHP II PARTNERS, LP (the
“Agreement”), with respect to the purchase and sale of the Assets, as defined in
the Agreement.

The undersigned, on behalf of Purchaser, hereby certifies as follows:

1. I am the duly elected, qualified and acting                      of
Purchaser, and I have been duly authorized to execute and deliver this
Certificate on behalf of Purchaser.

2. The representations and warranties set forth in Section 5.2 of the Agreement
are true and correct as of the date hereof.

3. Purchaser performed all of its covenants and obligations under the Agreement
as of the date hereof.

IN WITNESS WHEREOF, Purchaser executed this Certificate as of the day and year
first above written.

 

PURCHASER:

 

CHP II [                    ], LLC, a Delaware limited liability company

By:  

 

Name:  

 

Title:  

 

 

SCHEDULE 8.4.3 - 1

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SCHEDULE 2.2.5

TENANT LEASES

 

1) Genesis Eldercare Rehabilitation Services – therapy services

 

2) Janie Ladner – beauty/barber services

 

3) Single Facility Lease and Security Agreement between Hardcourt and Summer
Vista

 

SCHEDULE 2.2.5 - 1

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SCHEDULE 2.2.6

INTELLECTUAL PROPERTY

 

1) Any rights to use the name “Summer Vista Assisted Living Community”

 

2) www.summervista.com

 

3) Summer Vista Assisted Living Community Logo set forth below:

 

LOGO [g340466g0222234923786.jpg]

 

SCHEDULE 2.2.6 - 1

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SCHEDULE 2.2.7

FACILITY CONTRACTS

 

1) Assisted Living Locators – referral network

 

2) Baptist Hospital, Inc. – laboratory services

 

3) Cox Business – phone, internet, video, etc. services

 

4) Guardian Pharmacy of NWFL – pharmaceutical products and services

 

5) Northwest Florida – Senior Resource Guide – advertising

 

6) Pensacola Magazine – advertising agreement

 

7) Pro Health – Drug Testing (not an official agreement; e-mail format only)

 

8) Reliable Copy Products (Dex Imaging) – copier/printer services

 

9) Shred-it – office services

 

10) Taylor Linen Services – uniforms

 

11) Universal Waste Management – bio-waste disposal

 

12) Waste Management Inc. of Florida – non-hazardous waste services

 

13) Wells Fargo Lease Agreement (five years) – 2016 Ford Bus Lease (Guaranteed
by Superior Residences, Inc., an affiliate of the Current Manager).

 

14) Management Agreement – SRI

 

15) Green Procedures, Inc. – lawn maintenance

 

16) Advance Fire Protection Services, Inc. – fire alarm maintenance

 

17) OTIS Maintenance – elevator maintenance

 

18) Knox Pest Control, Inc. – pest control

 

19) McKesson Medical Supply

 

20) US Foods (Guaranteed by Duplantis)

 

21) Supreme Paper

 

22) FSI Group

 

SCHEDULE 2.2.7 - 1

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23) Gulf Coast Produce

 

24) Flowers Baking Company

 

25) Hershey’s Ice Cream

 

26) Cawley

 

27) Kesco

 

28) Buffalo Rock Company

 

29) Reinhart

 

30) Duncan McCall

 

SCHEDULE 2.2.7 - 2

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SCHEDULE 2.2.8

LICENSES AND PERMITS

 

1) Department of Business and Professional Regulation – Two Permits, Elevator
Operation

 

2) Florida Department of Health – Operating Permit, Food Hygiene, ALF

 

3) Florida Department of Health – Operating Permit, Group Care, ALF

 

4) Northwest Florida Water Management (construction of well)

 

5) State of Florida, AHCA, AL – Standard License and Professional, ECC/LNS
License

 

6) Fire Alarm and Life Safety System Inspection Certificate

 

7) Sprinkler Inspection Certificate

 

SCHEDULE 2.2.8 - 1

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SCHEDULE 2.2.13

RESIDENT AGREEMENTS/RENT ROLL

See attached list of Resident and Rent Roll as of 1/16/2017.

 

SCHEDULE 2.2.13 - 1

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SCHEDULE 2.3.2

THIRD-PARTY ASSETS

1) All removable fixtures and personal property located within the space leased
to Genesis Eldercare Rehabilitation Services and intellectual property owned by
Genesis Eldercare Rehabilitation Services

2) All removable fixtures, personal property or intellectual property owned by
Janie Ladner located within the space leased to Janie Ladner

3) All removable fixtures and personal property owned by Residents and located
in or just outside residents’ personal rooms

 

SCHEDULE 2.3.2 - 1

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SCHEDULE 5.1.3

CURRENT MANAGER ASSETS

None.

 

SCHEDULE 5.1.3 - 1

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SCHEDULE 5.1.9

LITIGATION

Continuing Writ of Garnishment Against Salary or Wages – Latasha Knight (served
February 13, 2017)

 

SCHEDULE 5.1.9 - 1

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SCHEDULE 5.1.26

FINANCIAL STATEMENTS

See attached financial statements for calendar year 2016.

NOTE: The Facility did not open until mid-February 2016.

 

SCHEDULE 5.1.26 - 1

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SCHEDULE 5.1.28

FORM OF RESIDENT AGREEMENT

See Attached.

 

SCHEDULE 5.1.28 - 1