EXHIBIT 10.1

PURCHASE AND SALE AGREEMENT

BETWEEN

EACH PARTY LISTED AS A “SELLER” ON SCHEDULE I

AS SELLER

EACH PARTY LISTED AS AN “EXISTING OPERATOR” ON SCHEDULE I

AS EXISTING OPERATOR

AND

EACH PARTY LISTED AS A “PURCHASER” ON SCHEDULE I

AS PURCHASER

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TABLE OF CONTENTS
ARTICLE I DEFINED TERMS
1

 
 
 
 
ARTICLE II PURCHASE AND SALE & PURCHASE PRICE
1

 
 
 
 
 
2.1
Purchase and Sale
1

 
 
 
 
 
2.2
Purchase Price
2

 
 
 
 
 
2.3
Escrow Provisions
3

 
 
 
 
ARTICLE III PURCHASER DILIGENCE/PROPERTY CONTRACTS
4

 
 
 
 
 
3.1
Seller Deliveries
4

 
 
 
ARTICLE IV DUE DILIGENCE; TITLE
5

 
 
 
 
 
4.1
Inspection of the Property
5

 
 
 
 
 
4.2
Title Documents
7

 
 
 
 
 
4.3
Permitted Exceptions
7

 
 
 
 
 
4.4
Existing Security Documents/Monetary Liens
8

 
 
 
 
 
4.5
Title Review and Objection; Subsequently Disclosed Exceptions
8

 
 
 
 
 
4.6
Occupancy Rates
9

 
 
 
 
ARTICLE V CLOSING
10

 
 
 
 
 
5.1
Closing Date
10

 
 
 
 
 
5.2
Seller and Existing Operator Closing Deliveries
10

 
 
 
 
 
5.3
Purchaser Closing Deliveries
12

 
 
 
 
 
5.4
Originals; Document Delivery
13

 
 
 
 
 
5.5
Closing Prorations and Adjustments
13

 
 
 
 
 
5.6
Post-Closing Adjustments
17

 
 
 
 
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
18

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6.1
Seller’s Representations
18

 
 
 
 
 
6.2
Representations and Warranties of Purchaser
30

 
 
 
 
ARTICLE VII ADDITIONAL COVENANTS/AGREEMENTS OF SELLER AND PURCHASER
32

 
 
 
 
 
7.1
Interim Operations
32

 
 
 
 
 
7.2
Healthcare Approvals
32

 
 
 
 
 
7.3
Other Consents and Satisfaction of Conditions
33

 
 
 
 
 
7.4
Taxes.
33

 
 
 
 
 
7.5
MSA.
34

 
 
 
 
 
7.6
No Shop.
34

 
 
 
 
 
7.7
No Disposition of Property.
34

 
 
 
 
 
7.8
Financial Information.
34

 
 
 
 
 
7.9
Reserved.
34

 
 
 
 
 
7.10
Reserved.
34

 
 
 
 
 
7.11
Resident Records.
34

 
 
 
 
 
7.12
Recoupment Claims.
35

 
 
 
 
 
7.13
Surveys; Resolution of Audit Deficiencies; Cooperation.
35

 
 
 
 
 
7.14
Medicaid Provider Agreements.
35

 
 
 
 
 
7.15
Residents Rents; Accounts Receivable.
36

 
 
 
 
 
7.16
Reserved.
37

 
 
 
 
 
7.17
Reserved.
37

 
 
 
 
 
7.18
Pre-Closing Access.
38

 
 
 
 
 
7.19
Reserved.
38

 
 
 
 
 
7.20
Approvals and Consents.
38

 
 
 
 
 
7.21
Reserved.
38

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7.22
Information Systems, Records in Electronic Form, Software and Data
38

 
 
 
 
 
7.23
Changes in Representations and Warranties.
38

 
 
 
 
 
7.24
Further Documentation.
39

 
 
 
 
 
7.25
Operations Transfer.
39

 
 
 
 
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING
39

 
 
 
 
 
8.1
Purchaser’s Conditions to Closing
39

 
 
 
 
 
8.2
Seller’s Conditions to Closing
41

 
 
 
ARTICLE IX INDEMNIFICATION & SURVIVAL PROVISIONS
42

 
 
 
 
 
9.1
Effective Date; Survival
42

 
 
 
 
 
9.2
Indemnification by Seller
43

 
 
 
 
 
9.3
Indemnification by Purchaser
43

 
 
 
 
 
9.4
Limitations on Indemnification
44

 
 
 
 
 
9.5
Indemnification Procedures
44

 
 
 
 
 
9.6
Tax Treatment
47

 
 
 
 
 
9.7
Exclusive Remedy
47

 
 
 
 
 
9.8
Manner of Payment
48

 
 
 
 
 
9.9
Brokerage
48

 
 
 
 
ARTICLE X DEFAULT AND REMEDIES
48

 
 
 
 
 
10.1
Purchaser Default
48

 
 
 
 
 
10.2
Seller Default
49

 
 
 
 
 
10.4
Post-Closing Default
50

 
 
 
 
ARTICLE XI CASUALTY; EMINENT DOMAIN
50

 
 
 
 
 
11.1
Damage
50

 
 
 
 
 
11.2
Closing
51

 
 
 
 
 
11.3
Repairs
51

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11.4
Eminent Domain
51

 
 
 
 
ARTICLE XII MISCELLANEOUS
52

 
 
 
 
 
12.1
Binding Effect of Agreement
52

 
 
 
 
 
12.2
Exhibits; Schedules; Annexes
52

 
 
 
 
 
12.3
Assignability
52

 
 
 
 
 
12.4
Captions
52

 
 
 
 
 
12.5
Number and Gender of Words
52

 
 
 
 
 
12.6
Notices
52

 
 
 
 
 
12.7
Governing Law and Venue
54

 
 
 
 
 
12.8
Entire Agreement
54

 
 
 
 
 
12.9
Amendments
54

 
 
 
 
 
12.10
Severability
54

 
 
 
 
 
12.11
Multiple Counterparts/Facsimile Signatures
54

 
 
 
 
 
12.12
Construction
55

 
 
 
 
 
12.13
Confidentiality/Press Releases
55

 
 
 
 
 
12.14
Time of the Essence
56

 
 
 
 
 
12.15
Waiver
56

 
 
 
 
 
12.16
Time Periods
56

 
 
 
 
 
12.17
No Personal Liability of Officers, Trustees or Directors
56

 
 
 
 
 
12.18
No Recording
56

 
 
 
 
 
12.19
Relationship of Parties
56

 
 
 
 
 
12.20
Reserved
56

 
 
 
 
 
12.21
Multiple Parties
56

 
 
 
 
 
12.22
WAIVER OF JURY TRIAL
57

 
 
 
 
 
12.23
Appointment of Seller’ Agent
57

iv

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12.24
Attorneys’ Fees
58

 
 
 
 
 
12.3
Reserved
58

 
 
 
 
 
12.3
Bulk Transfer Tax Clearance
58

 
 
 
 
 
12.3
Audit  58
 

v

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EXHIBITS AND SCHEDULES

EXHIBITS
Exhibit A
Legal Description
Exhibit B
Form of Indemnity Escrow Agreement
Exhibit C
Reserved
Exhibit D
Form of Bill of Sale
Exhibit E
Form of General Assignment and Assumption
Exhibit F
Form of Assignment and Assumption of Resident Agreements
Exhibit G
Form of Certification of Non-Foreign Status
Exhibit H
Reserved
Exhibit I
Form of Guaranty
Exhibit J
Form of Resident Notification
Exhibit K
Form of Access Agreement
Exhibit L
Property Contracts List
Exhibit M
Bring-Down Certificate
Exhibit N
Assigned Contracts
Exhibit O
Third-Party Reports
Exhibit P
Management Agreements
Exhibit Q
Other Seller Deliveries
Exhibit R
Non-Compete Agreement

SCHEDULES
Schedule I
Seller; Purchaser; Facility Names and Addresses
Schedule II
Separate Facilities
Schedule 5.6
Current Assessed Values
Schedule 6.1.3
Condemnation; Proceedings
Schedule 6.1.7(b)
Notices of Violations
Schedule 6.1.8(b)
Leased Personal Property
Schedule 6.1.8(k)
Commercial Leases
Schedule 6.1.11
Required Consents
Schedule 6.1.12(a)
Permits and Operating Licenses
Schedule 6.1.12(b)
Third Party Payor Programs
Schedule 6.1.12(d)
Deficiencies or Violations
Schedule 6.1.12(g)
Corporate Integrity Agreements
Schedule 6.1.14
Property Statements
Schedule 6.1.15(a)
Regulated Quantities of Hazardous Substances
Schedule 6.1.15(b)
Litigation Regarding Hazardous Substances
Schedule 6.1.15(c)
Notices Regarding Hazardous Substances
Schedule 6.1.15(d)
Noncompliance with Environmental Laws
Schedule 6.1.15(e)
Discharge of Hazardous Substances
Schedule 6.1.15(f)
Environmental Reports
Schedule 6.1.15(h)
Underground Storage Tanks
Schedule 6.1.24
Licensed Beds

vi

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Schedule 6.1.25
Intellectual Property
Schedule 6.1.29
List of Insurance Policies
Schedule 12.13-A
Form of Representations Letter
Schedule 12.27-B
Form of Audit Letter
Attachment 1.1
Healthcare Approvals

ANNEXES
Annex 1
Defined Terms

vii

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of the 2nd day of August, 2017 (the “Effective Date”), by and among (i) each
party listed as a “Seller” on Schedule I attached hereto and made a party hereof
(individually or collectively, as the context requires, “Seller”), (ii) each
party listed as “Existing Operator” on Schedule I attached hereto and made a
party hereof (individually or collectively, as the context requires, “Existing
Operator”), each of Seller and Existing Operator having a principal address at
c/o Fortress Investment Group, 1345 Avenue of the Americas, New York, New York
10105 and (iii) each party listed as a “Purchaser” on Schedule I, having a
principal address at c/o Griffin-American Healthcare REIT IV, Inc., 18191 Von
Karman Avenue, Suite 300, Irvine, CA 92612 (individually or collectively, as the
context requires, “Purchaser”).

NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:

RECITALS

Seller owns the real property identified on Schedule I, as more particularly
described in Exhibit A attached hereto and made a part hereof, together with the
Facilities (as hereinafter defined) located thereon and identified on Schedule
I, together with certain other personal property, and each Seller leases same to
an Existing Operator. Existing Operator also owns certain tangible and
intangible property relating to the use and operation of the Facility it leases
from a Seller. Seller and Existing Operator each desires to sell, and Purchaser
desires to purchase, such real property, the Facilities and certain related
property, on the terms and conditions set forth below.

ARTICLE I
DEFINED TERMS

Unless otherwise defined herein, any term with its initial letter capitalized in
this Agreement shall have the meaning set forth in Annex 1 attached hereto and
made a part hereof.

ARTICLE II
PURCHASE AND SALE & PURCHASE PRICE

2.1    Purchase and Sale. Seller and Existing Operator each agrees to sell and
convey the Property to Purchaser (or one or more entities formed, owned or
controlled by Purchaser for the purpose of acquiring all or a portion of the
Property) and Purchaser agrees (for itself or on behalf of those entities
formed, owned or controlled by Purchaser for the purpose of acquiring all or a
portion of the Property) to purchase the Property from Seller and Existing
Operator, all in accordance with the terms and conditions set forth in this
Agreement. Notwithstanding anything to the contrary contained herein, Seller and
Existing Operator shall not sell, assign, transfer, convey or deliver to
Purchaser, and Purchaser shall not purchase, and the Property shall not include
any of the Seller’s or Existing Operator’s right, title and interest in the
Excluded Assets. Upon Closing, neither Purchaser nor any Affiliate thereof shall
assume any liabilities of Seller or Existing Operator in connection with the
Facilities or the Transactions other than the Assumed Liabilities. Seller and
Existing Operator shall retain and discharge when

1

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due all liabilities and obligations of Seller and Existing Operator,
respectively, and Purchaser is not responsible for and does not assume, and
shall not have any obligation to pay, perform, satisfy or discharge any
liability or obligation of any kind or nature, including, without limitation,
any claims, lawsuits, liabilities, obligations or debts of Seller and/or
Existing Operator, whether contractual, statutory, judicially created or
constitutional, including, without limitation, malpractice or other tort claims,
statutory, regulatory or administrative claims, penalties, taxes, fines,
assessments, deficiencies and/or claims of state or federal agencies, whether
civil or criminal, fraud-based claims, or claims of breach of contract, except
to the extent expressly and unambiguously expressed herein to the contrary, that
arises from, out of, or relates to Seller’s or Existing Operator’s ownership or
operation of the Facilities or Property or any activity of Seller or Existing
Operator prior to the Closing Date or conduct of Seller or Existing Operator
after the Closing Date (“Excluded Liabilities”). Without limiting the generality
of the foregoing provisions, in no event shall the Assumed Liabilities include
any obligations of Seller or Existing Operator relating to third-party payor
programs, including, without limitation, any Governmental Programs, arising,
accruing, or relating to the time period before the Closing Date.

2.2    Purchase Price. The total purchase price (“Purchase Price”) for the
Property shall be an amount equal to Seventy Million and no/100 Dollars
($70,000,000), subject to prorations and/or adjustments required by this
Agreement, payable by or on behalf of Purchaser as follows:

2.2.1    Within three (3) Business Days following the execution of this
Agreement, and as a condition to the effectiveness and enforceability of this
Agreement, Purchaser shall deliver to the Los Angeles, California office of
First American Title Insurance Company (“Escrow Agent” or “Title Company”) a
deposit in the amount of One Million Seven Hundred Eight-Seven Thousand Two
Hundred Thirty-Four and no/100 Dollars ($1,787,234.00) (together with income and
interest accrued thereon, the “Deposit”) by wire transfer of immediately
available funds.

2.2.2    The balance of the Purchase Price for the Property, subject to
prorations and/or adjustments required by this Agreement, shall be paid to and
received by Escrow Agent by wire transfer of immediately available funds no
later than 10:00 a.m. (Pacific) on the Closing Date, and Escrow Agent shall
disburse all funds it receives from the parties in connection with the Closing
pursuant to the Closing Statement; provided, however, that a portion of such
Purchase Price so paid to the Escrow Agent equal to One Million Seven Hundred
Eight-Seven Thousand Two Hundred Thirty-Four and no/100 Dollars ($1,787,234.00)
will be deposited into an escrow account for the eighteen (18) month period
following the Closing Date as a non-exclusive source of funds to satisfy any
Seller Indemnifiable Damages (together with the Indemnity Escrow provided for in
Section 2.2.2 of the Separate PSA, the “Indemnity Escrow”), it being understood
that one hundred percent (100%) of the Indemnity Escrow then remaining in such
escrow account, less the amount of any Seller Indemnifiable Damages (defined
below) against the Indemnity Escrow that are outstanding as of said date or
other amounts reserved in respect of any claim for indemnification pursuant to
Article IX, will be released to Seller within five (5) Business Days after the
eighteen (18) month anniversary of the Closing. The conditions for the release
or distribution of the Indemnity Escrow are more particularly set forth in that
certain Indemnity Escrow Agreement, which shall be executed and delivered by
Purchaser,

2

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Seller and the Escrow Agent at the Closing, in the form attached hereto as
Exhibit B (the “Indemnity Escrow Agreement”).

2.2.3    Seller shall be responsible for any prepayment penalties or fees
associated with the pay-off of any debt encumbering the Land or any of the other
Property.

2.2.4     Solely for the purposes of calculating real estate transfer taxes or
similar taxes imposed with respect to the Transactions, or as otherwise
necessary or appropriate in connection with the consummation of the Transactions
and the performance of each party’s obligations under this Agreement, each of
Seller, Existing Operator and Purchaser shall agree prior to Closing to
allocations of the Purchase Price and Deposit between and among the Facilities.
Notwithstanding the foregoing, each of Seller, Existing Operator and Purchaser
agrees to file federal, state and local Tax Returns based on each party’s own
determination of the proper allocations of the Purchase Price, each bearing its
own consequences of any discrepancies.

2.2.5    All currency amounts set forth in this Agreement are expressed in
United States Dollars.

2.2.6    The provisions of this Section 2.2 shall survive the Closing.

2.3    Escrow Provisions. Escrow Agent has agreed to hold the Deposit and the
Indemnity Escrow and act as escrow agent in connection with the Transactions in
accordance with the terms of this Agreement, the Indemnity Escrow Agreement, and
any other escrow agreement or instructions executed by Escrow Agent and the
parties hereto.

(a)    Upon receipt of the Deposit, Escrow Agent shall deliver to Seller and
Purchaser written notice confirming Escrow Agent’s receipt of the Deposit, the
date on which Escrow Agent received the Deposit and that the Deposit has been
deposited as required by this Agreement. Escrow Agent shall invest the Deposit
in a money market account reasonably satisfactory to Purchaser, and shall
promptly provide Purchaser and Seller with confirmation of the investments made.

(b)    If Closing occurs, Escrow Agent shall deliver the Deposit to Seller at
Closing and the same shall be credited against the Purchase Price. If for any
reason Closing does not occur, Escrow Agent shall deliver the Deposit to Seller
or Purchaser only upon receipt of a written demand therefor from such party,
except where this paragraph expressly provides for notice only from Purchaser.
Subject to the last sentence of this clause (b), if for any reason the Closing
does not occur and either party makes a written demand (the “Demand”) upon the
Escrow Agent for payment of the Deposit, the Escrow Agent shall give written
notice to the other party of the Demand within one Business Day after receipt of
the Demand. If the Escrow Agent does not receive a written objection from the
other party to the proposed payment within five (5) Business Days after the
giving of such notice by Escrow Agent, the Escrow Agent is hereby authorized to
make the payment set forth in the Demand. If the Escrow Agent does receive such
written objection within such period, the Escrow Agent shall continue to hold
such amount until otherwise directed by written instructions signed by Seller
and Purchaser or a final judgment of a court. Notwithstanding the foregoing
provisions of this clause (b) if Purchaser

3

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delivers a notice to Escrow Agent stating that Purchaser has terminated this
Agreement on or prior to the expiration of the Due Diligence Period, a copy of
which notice shall be simultaneously delivered to Seller and Existing Operator,
then Escrow Agent shall immediately return the Deposit to Purchaser without the
necessity of delivering any notice to, or receiving any notice from Seller, and
Escrow Agent shall do so notwithstanding any objection by Seller.

(c)    The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that the Escrow Agent
shall not be deemed to be the agent of either of the parties, and that the
Escrow Agent shall not be liable to either of the parties for any action or
omission on its part taken or made in good faith, and not in disregard of this
Agreement, but shall be liable for its negligent acts and for any liabilities
(including reasonable attorneys’ fees, expenses and disbursements) incurred by
Seller or Purchaser resulting from the Escrow Agent’s mistake of law respecting
the Escrow Agent’s scope or nature of its duties. Seller and Purchaser shall
jointly and severally indemnify and hold the Escrow Agent harmless from and
against all liabilities (including reasonable attorneys’ fees, expenses and
disbursements) incurred in connection with the performance of the Escrow Agent’s
duties hereunder, except with respect to actions or omissions taken or made by
the Escrow Agent in bad faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent. The Escrow Agent has executed this
Agreement in the place indicated on the signature page hereof in order to
confirm that the Escrow Agent has received and shall hold the Deposit in escrow,
and shall disburse the Deposit pursuant to the provisions of this Section 8.

(d)    Purchaser and Seller, together, shall have the right to terminate the
appointment of Escrow Agent hereunder by giving to it notice of such
termination, specifying the date upon which such termination shall take effect
and designating a replacement Escrow Agent, who shall sign a counterpart of this
Agreement. Upon demand of such successor Escrow Agent, the Deposit shall be
turned over and delivered to such successor Escrow Agent, who shall thereupon be
bound by all of the provisions hereof. Escrow Agent may resign at will and be
discharged from its duties or obligations hereunder by giving notice in writing
of such resignation specifying a date when such resignation shall take effect;
provided, however, that (i) prior to such resignation a substitute escrow agent
is approved in writing by Seller and Purchaser, which approval shall not be
unreasonably withheld or delayed, or (ii) Escrow Agent shall deposit the Deposit
with a court of competent jurisdiction. After such resignation, Escrow Agent
shall have no further duties or liability hereunder.

ARTICLE III
PURCHASER DILIGENCE/PROPERTY CONTRACTS

3.1    Seller Deliveries. Seller, Existing Operator and Manager has delivered,
or otherwise made available, to Purchaser, or within ten (10) Business Days
following the execution of this Agreement Seller and Existing Operator will (and
Seller will use commercially reasonable efforts to cause Manager to) deliver or
make available to Purchaser (including by providing at the Property or by
granting access to the Data Site to Purchaser), each of the following items set
forth in this Article III (all diligence information contemplated by this
Article III, collectively, the “Seller’s Deliveries”) to the extent such items
are in Seller’s, Existing Operator’s or Manager’s control or possession or
available to Seller, Existing Operator or Manager:

4

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3.1.1    Title/Survey. Each Title Commitment and the related Title Documents (as
such terms are defined in Section 4.2) and the most recent survey in Seller’s
possession with respect to the Land and Improvements for each of the Facilities
(collectively, the “Existing Surveys”).

3.1.2     Property Contracts. A copy of each of the Property Contracts.

3.1.3     Rent Roll. A Rent Roll for each Facility.

3.1.4     Licensing Surveys. A copy of all Licensing Surveys completed from and
after August 1, 2013 which are currently in the possession or reasonable control
of Seller.

3.1.5    Property Statements. A copy of the Property Statements for each of the
Facilities.

3.1.6    Resident Agreements. The form(s) of Resident Agreement(s) (including
all addendum and annexes) used at each of the Facilities (collectively, the
“Resident Agreement Form”).

3.1.7    Operating Licenses. A copy of the Operating Licenses and other material
required Permits owned or held by or issued to Seller or Manager relating to the
Facilities or the Property (or any portion thereof).

3.1.8    Third Party Reports. The Third Party Reports listed on Exhibit O.

3.1.9    Facility Employees List. A list of all property-level employees engaged
in the operation of the Facilities (the “Facility Employees”), along with wage
and status information, has been made available to Purchaser prior to the
Effective Date. Any PTO (as defined in the MTA) due at Closing pursuant to the
MTA shall be included as a debit to Seller and a credit to Purchaser on the
Closing Statement.

3.1.10    Other Seller Deliveries. To the extent available to, or in the control
or possession of Seller, Existing Operator or any of their respective Affiliates
or Manager, those other materials requested on the Purchaser’s due diligence
request list attached as Exhibit Q.

ARTICLE IV
DUE DILIGENCE; TITLE

4.1    Inspection of the Property.

4.1.1.    From the Effective Date until the date that is forty-five (45) days
following the Effective Date (the “Inspection Period”), and thereafter until the
Closing or earlier termination of this Agreement, Purchaser and an Affiliate of
Meridian Senior Living, LLC (“JV Partner”), and their respective Affiliates, and
their and their respective Affiliates’ employees, representatives, agents,
consultants, engineers, appraisers, counsel, accountants, independent
contractors and other authorized representatives (collectively, the “Purchaser
Parties”) may enter upon the Property, upon Seller’s prior consent, which
consent may not be unreasonably withheld, conditioned or delayed, for the
purposes of performing, at Purchaser’s

5

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sole cost and expense, investigations, inspections, tests, surveys, studies and
analyses thereon so that the Purchaser Parties will have the opportunity to
conduct a comprehensive due diligence review of the Property and the businesses
conducted thereon, including for the purpose of (i) reviewing Resident Agreement
files (subject to confidentiality restrictions required by applicable law), (ii)
meeting with and interviewing the Manager’s Facility Management personnel and
such other personnel at each of the Facilities as Seller and Existing Operator
may approve (such approval not to be unreasonably withheld, conditioned or
delayed), and Seller and Existing Operator shall use commercially reasonable
efforts to cause Manager to provide the Purchaser Parties with all such access.
Seller and Existing Operator shall, and shall use commercially reasonable
efforts to cause Manager to, furnish such additional financial and operating
data and other information that is in their or Manager’s control or possession
(or which is available thereto) as the Purchaser Parties shall from time to time
reasonably request. Seller, Existing Operator and Manager shall each be entitled
to have a representative present during the entry by any of the Purchaser
Parties onto the Property and in all meetings, calls or other contacts or
communications with the their respective personnel. Purchaser shall (and shall
cause each of the other Purchaser Parties to) at all times (x) not cause damage,
loss, liability, cost or expense to Seller, any Facility (or any other portion
of the Property) or any Resident or tenant of any Facility, and (y) not
unreasonably interfere with or disturb Manager’s operations or any Resident or
tenant of the Facility. To the extent of any damage caused by Purchaser or any
other Purchaser Party to any Facility or any other portion of the Property,
Purchaser shall indemnify Seller from and against, and promptly reimburse Seller
for, the cost of restoration of (or at Seller’s demand, promptly restore) such
Facility to its condition immediately preceding Purchaser Parties’ entry onto
the Property, and shall keep the Property free and clear of any mechanic’s liens
or materialmen’s liens arising as a result of such entry, inspections and
investigations. Purchaser shall indemnify, defend, and hold Seller, Existing
Operator, Manager and their respective Affiliates harmless for, from, and
against any and all claims and liabilities, including costs and expenses for
loss, injury to or death of any of the Purchaser Parties (waiving all
limitations under workers’ compensation), and any loss, damage to or destruction
of any property owned, leased or otherwise used by Seller, Existing Operator,
Manager or others (including claims or liabilities for loss of use of any
property) resulting from the entry of any of the Purchaser Parties upon the
Property pursuant to this Section 4.1.1, provided that (i) such obligation shall
be subject in all respects to recoveries received by or available to Seller,
Existing Operator and Manager pursuant to policies of casualty insurance
maintained by them, it being the intent of the parties that such policies shall
be the first source of recovery for any casualty event, and (ii) Purchaser’s
indemnification obligations under this Section 4.1.1 expressly excludes (A) any
damage, claims, liability, losses or expenses caused by Seller, Existing
Operator, Manager, or any of their agents, employees or representatives, (B) the
mere discovery of or existence of any pre-existing condition on the Property
(including, without limitation, any pre-existing environmental contamination),
and (C) and consequential, punitive or special damages or lost profits.
Purchaser’s indemnity obligation set forth in this Section 4.1.1 shall survive
the termination of this Agreement and Closing, and shall not be subject to the
terms and limitations set forth in Article IX.

4.1.2    Purchaser shall have the right at any time prior to 5:00 p.m. (Pacific)
on the day of the expiration the Inspection Period, in its sole and absolute
discretion, to terminate this Agreement in its entirety for any reason or for no
reason whatsoever. If Purchaser fails to deliver to Seller a written notice
exercising its right to terminate this Agreement pursuant to this

6

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Section 4.1.2 prior to 5:00 p.m. (Pacific) on the day of the expiration the
Inspection Period, then Purchaser shall be deemed to have waived such
termination right and this Section 4.1.2 shall be of no further force and
effect. If Purchaser delivers to Seller a written election to terminate this
Agreement pursuant to this Section 4.1.2 prior to 5:00 p.m. (Pacific) on the day
of the expiration of the Inspection Period, the Escrow Agent shall promptly
return the Deposit to Purchaser and this Agreement shall terminate automatically
and be of no further force or effect and the parties hereto shall have no
further obligation to the other except for those obligations specifically
surviving the termination of this Agreement. Notwithstanding any provision of
this Agreement to the contrary: (i) a termination notice delivered pursuant to
this Section shall be valid for all purpose if transmitted via facsimile, email
or other electronic means to the facsimile number or email address referenced in
Section 12.6 of this Agreement, and (ii) Escrow Agent is hereby directed to, and
in all instances shall, promptly return the Deposit to Purchaser as directed in
such termination notice without being required to obtain, and without obtaining,
the consent of Seller or Existing Operator, it being the intent of the parties
that a termination notice timely delivered pursuant to this Section shall be
deemed valid.

4.2    Title Documents. Prior to the Effective Date, Seller has caused to be
delivered to Purchaser, with respect to each Facility, a standard form
commitment or preliminary title report (each a “Title Commitment”), together
with copies of all instruments identified as exceptions therein (together with
each Title Commitment, collectively, the “Title Documents”).

4.3    Permitted Exceptions. Each Deed delivered with respect to each of the
Facilities and the related Property pursuant to this Agreement shall convey good
and marketable fee simple title to the applicable Real Property, subject only to
the following, all of which shall be deemed “Permitted Exceptions” with respect
to such Facility and such related Property:

4.3.1    All matters shown in the Title Commitments and Title Documents and the
Existing Surveys (including in any Title Updates, subject to the terms of
Section 4.5), other than the following:

(a) judgment liens, tax liens (except for the lien of real estate taxes for the
current year not yet due and payable as of the Closing Date, which shall be a
Permitted Exception, subject to apportionment as provided elsewhere in this
Agreement), broker’s liens, any mechanic’s, materialmen’s or similar liens, or
any other liens which can be removed by the payment of a fixed and ascertainable
sum of money (other than Permitted Spring Haven Liens (as defined below)), in
each case to the extent not caused by Purchaser or Purchaser’s Consultants
(each, a “Monetary Lien”),

(b) the standard exception regarding the rights of parties in possession, except
to the extent limited to those parties in possession pursuant to the Resident
Agreements and the Commercial Leases existing as of the Closing Date, and

(c) the standard exception pertaining to taxes and assessments, except to the
extent limited to taxes and assessments for the current year not yet due and
payable as of the Closing Date.

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4.3.2    All Resident Agreements; and all Commercial Leases existing as of the
Closing Date that Purchaser elects in writing to assume;

4.3.3    Applicable zoning and governmental regulations and ordinances; and

4.3.4    Any matters, defects in or objections to title to the Property, or
title exceptions or encumbrances, arising by, through, under, on behalf of or
due to the fault of Purchaser, its Affiliates or Purchaser’s Consultants.

4.3.5    Mechanic’s, materialmen’s or similar liens arising out of the Current
Capital Repair of the Spring Haven Facility to the extent permitted under
Section 3 of the Access Agreement (“Permitted Spring Haven Liens”).

Seller and Existing Operator shall transfer and convey all of their respective
interests in and to the Operating Assets owned by each of them to or as directed
by Purchaser, free and clear of all liens, encumbrances and adverse claims.

4.4    Existing Security Documents/Monetary Liens. It is understood and agreed
that any deed of trust and/or mortgage recorded against the Property or any
portion thereof which secures any indebtedness for borrowed money and/or any
related security agreement or instrument with respect to such indebtedness
(each, a “Mortgage”) shall not be deemed a Permitted Exception, and shall be
paid off, satisfied, discharged and/or cured at or prior to Closing. In
addition, Seller shall cause each Monetary Lien (other than Permitted Spring
Haven Liens) to be Removed at or prior to Closing. If Seller fails or refuses to
so Remove any Mortgage or Monetary Lien (other than Permitted Spring Haven
Liens) against the Property at or prior to Closing, Purchaser may elect to
satisfy same and deduct such costs from the Purchase Price.

4.5    Title Review and Objection; Subsequently Disclosed Exceptions.

4.5.1    Purchaser may order any updates, continuations of, and supplements to,
any of the Title Commitments or Existing Surveys (each, a “Title Update”) at
Purchaser’s sole cost and expense. Purchaser shall instruct the Title Company
and any surveyor to simultaneously deliver directly to Purchaser and Seller (and
their respective counsel referenced in Section 12.6 of this Agreement) copies of
each Title Update (including tax and departmental searches) ordered by Purchaser
or otherwise issued by the Title Company or any surveyor, and copies of all
underlying documentation referenced as an exception as soon as available.

4.5.2    Before the expiration of the Inspection Period, Purchaser may furnish
to Seller a written statement (the “Title Objection Notice”) specifying any
defects in or objection to the title to and/or the survey of any of the Real
Property (the “Objections”). Seller shall notify Purchaser within five (5)
Business Days after receipt of the Objections whether Seller will cure the
Objections. If Seller does not respond within said (5) Business Days day period,
Seller shall be deemed to have elected not to cure the Objections. In that case,
or if Seller states in its written response to the Title Objection Notice that
Seller will not cure the Objections, Purchaser shall have the right, by written
notice given to Seller within five (5) Business Days after receipt of Seller’s
notice, either to (a) waive the Objections and close title without abatement or
reduction of the Purchase Price, or (b) terminate this Agreement and obtain a
refund of the

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Deposit, and if Purchaser fails to timely elect one of either subclause (a) or
(b), Purchaser shall be deemed to have elected the waiver under subclause (a).
If Purchaser fails to deliver the Title Objection Notice to Seller before the
end of the Inspection Period, then Purchaser shall be deemed to have elected to
waive its right to make Objections (other than with respect to any New Exception
as set forth in Section 4.5.3). If Purchaser elects to terminate this Agreement
by the aforementioned Title Objection Notice, the Deposit shall be immediately
returned to Purchaser, and upon such return, except as expressly provided
herein, this Agreement and all rights and obligations of the respective parties
hereunder shall be null and void.

4.5.3    If at any time following the end of the Inspection Period but prior to
the Closing any Title Update discloses any additional item(s) (i) not caused by
or the result of any act or omission or fault of Purchaser, Purchaser’s
Affiliate(s) or any Purchaser Party and (ii) which were not disclosed in a prior
Title Update previously delivered to Purchaser and which are not Permitted
Exceptions (each, a “New Exception”), Purchaser shall have the right to send a
notice to Seller within five (5) Business Days of its receipt of such Title
Update specifying any defects in or objection to the title to and/or the survey
of any of the Real Property (the “Update Objections”) and the terms of Section
4.5.2 shall apply with respect to any such Update Objections.

4.5.4    Notwithstanding any provision of this Agreement to the contrary,
neither Seller nor Existing Operator shall create, place, grant, convey, or
otherwise voluntarily cause or otherwise consent to any liens, encumbrances or
restrictions affecting the Real Property, or any part thereof, being created,
suffered to be placed or recorded against the title to the Real Property, nor
will Seller or Existing Operator during said period convey any interest in the
Property to anyone other than Purchaser without Purchaser’s prior written
consent, which consent Purchaser may withhold in its absolute discretion.

4.6    Occupancy Rates.    Within five (5) Business Days of the end of the
calendar month ending immediately prior to the expiration of the Inspection
Period, Seller and/or Existing Operator shall deliver to Purchaser an updated
Rent Roll for the Facilities and the Separate Facilities, considered as a whole
(the “Aggregate Facilities”), together with a calculation of the average monthly
occupancy rate of the Aggregate Facilities for the three-month period ending on
the last day of such immediately preceding calendar month (the “Updated Average
Occupancy Rate”). In the event that the Updated Average Occupancy Rate of the
Aggregate Facilities as set forth with such Rent Roll is more than 5% lower than
the occupancy rate of the Aggregate Facilities calculated based upon the Rent
Rolls for the Aggregate Facilities for the month ending immediately prior to the
Effective Date, Purchaser shall have the right at any time prior to 5:00 p.m.
(Eastern) on the fourteenth (14th) day following expiration of the Inspection
Period (the “Rent Roll Review Period”), in its sole and absolute discretion, to
terminate this Agreement in its entirety. If Purchaser fails to deliver to
Seller a written notice exercising its right to terminate this Agreement
pursuant to this Section 4.6 prior to the expiration of the Rent Roll Review
Period, then Purchaser shall be deemed to have waived such termination right,
and this Section 4.6 shall be of no further force and effect. If Purchaser
delivers to Seller a written election to terminate this Agreement pursuant to
this Section 4.6 prior to the expiration of the Rent Roll Review Period, the
parties shall provide written instructions to the Escrow Agent directing the
Escrow Agent to return the Deposit to Purchaser, and this Agreement shall
terminate automatically and be of no further force or effect,

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and the parties hereto shall have no further obligation to the other except for
those obligations specifically surviving the termination of this Agreement.

ARTICLE V
CLOSING

5.1    Closing Date. Subject to the terms of this Agreement and satisfaction (or
waiver) of the conditions to Closing set forth in Article VIII and unless this
Agreement shall have been terminated pursuant to an express right to terminate
as herein provided, the closing hereunder related to the purchase and sale of
the Property (the “Closing”) shall occur at 10:00 a.m. Eastern Time on October
1, 2017, or such earlier date as may be mutually agreed to by the parties (the
“Closing Date”). The Closing Date may be extended by Seller, Existing Operator
or Purchaser in the event that the conditions to Closing set forth in Sections
8.1.8 and 8.2.6 have not been satisfied by the Closing Date, but in no event
shall the Closing occur after November 1, 2017 (the “Outside Closing Date”);
provided, however, the parties hereto acknowledge that their respective
intention is to have a Closing Date which is the first (1st) day of a calendar
month following the date on which all such conditions to Closing are so
satisfied or waived. The Closing will be effective for accounting purposes as of
12:01 a.m. Eastern Time on the Closing Date, such that the Closing Date will be
a day of income and expense to Purchaser. The Closing shall occur on the Closing
Date through escrow with Escrow Agent, whereby Seller, Existing Operator,
Purchaser and their respective attorneys need not be physically present at the
Closing and may deliver documents by overnight air courier or other means.
Subject to the terms of Section 8.2 and Section 10.1 hereof, if the Closing does
not occur on or prior to the Outside Closing Date (as the same may be extended
as provided above), this Agreement shall terminate and the Deposit shall be
returned to Purchaser.

5.2    Seller and Existing Operator Closing Deliveries. Seller and Existing
Operator, as applicable or requested by Purchaser, shall and they shall use
commercially reasonable efforts to cause the Manager to, as applicable or as
requested by Purchaser, execute and deliver to Escrow Agent (or cause to be
delivered to Escrow Agent) each of the following items on or before the Business
Day immediately preceding the Closing Date:

5.2.1    A Deed conveying each parcel of Land and the related Improvements and
other real property to the Purchaser or its designated Affiliate, subject to the
Permitted Exceptions. If the legal description of the Land set forth on the
Existing Surveys or in any of the Title Update differs from the legal
description of the Land set forth on the deed by which Seller acquired title, a
quit claim deed conveying the Land and the related Improvements to the Purchaser
or its designated Affiliate, subject to the Permitted Exceptions utilizing such
alternate legal description;

5.2.2    A Bill of Sale from each of Seller and Existing Operator in the form
attached as Exhibit D conveying the Fixtures and Tangible Personal Property
owned by each of them to the Purchaser or its designated Affiliate;

5.2.3    A General Assignment and Assumption in the form attached as Exhibit E
(the “General Assignment”).

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5.2.4    An Assignment and Assumption of Resident Agreements in the form
attached as Exhibit F (the “Resident Agreements Assignment”).

5.2.5    A certificate in the form of Exhibit M attached hereto (the “Bring Down
Certificate”).

5.2.6    The closing statement prepared by the Title Company, which shall
include such prorations and adjustments calculated in accordance with the terms
of this Agreement (the “Closing Statement”).

5.2.7    A title affidavit reasonably acceptable to Seller and the Title
Company, or an indemnity in favor of the Title Company, in each case sufficient
to enable the Title Company to delete the standard exceptions to the title
insurance policy to be issued pursuant to the Title Commitment.

5.2.8    A certification of Seller’s non-foreign status pursuant to Section 1445
of the Internal Revenue Code of 1986, as amended (the “Code”), in the form of
Exhibit G attached hereto.

5.2.9    With respect to any Land and Improvements (and related real property),
any applicable sales tax, real property transfer tax forms and returns, transfer
declaration, ownership information or other similar disclosure forms or reports
required by the laws of the State where such Land and Improvements is located or
any other Governmental Authority.

5.2.10    Resolutions, certificates of good standing, and such other
organizational documents as the Title Company or Purchaser shall reasonably
require evidencing Seller’s and Existing Operator’s authority to consummate the
Transactions.

5.2.11    An updated Rent Roll for each Facility effective as of a date no more
than three (3) Business Days prior to the Closing Date; provided, however, that
the content of such updated Rent Roll shall in no event expand or modify the
conditions to Purchaser’s obligations to close the Transactions as specified
under Section 8.1.

5.2.12    An updated Property Contracts List effective as of a date no more than
three (3) Business Days prior to the Closing Date; provided, however, that the
content of such updated Property Contracts List shall in no event expand or
modify the conditions to Purchaser’s obligations to close the Transactions as
specified under Section 8.1.

5.2.13    Such notices, transfer disclosures, affidavits or other similar
documents that are required by applicable law to be executed by Seller and/or
Existing Operator or otherwise reasonably necessary in order to consummate the
Transactions.

5.2.14    Evidence reasonably satisfactory to Purchaser that Seller and Existing
Operator have obtained “tail coverage” for all commercial general liability and
professional liability policies described on Schedule 6.1.29.

5.2.15    The Indemnity Escrow Agreement.

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5.2.16     Originals or true, correct and complete copies, to the extent in the
Seller’s or Existing Operator’s possession, of all of the Assigned Contracts,
Resident Agreements, and Permits, to the extent such Permits are, with or
without consent, assignable or transferable (other than Excluded Permits).

5.2.17    A guaranty in the form of Exhibit I, executed by NIC 4 Florida Owner
LLC (the “Guaranty”), guaranteeing the payment by Seller and Existing Operator
of any Seller Indemnifiable Damages payable to Purchaser pursuant to Section 9.2
hereof, subject to the terms and limitations specified therein.

5.2.18    Evidence reasonably acceptable to Purchaser of the termination of (i)
the Management Agreements and (ii) all leases between Seller and Existing
Operator with respect to the Facilities.

5.2.19    The Access Agreement executed by Seller.

5.2.20    Duly executed Non-Competition and Non-Solicitation Agreements (the
“Non-Compete Agreement”) from each Seller and Existing Operator and their
respective ultimate parent entity in favor of the Purchaser, in such form
attached hereto as Exhibit R.

5.2.21    Reserved.

5.2.23    Reserved.

5.2.24    Reserved.

5.2.25    Such additional assignments in form reasonably acceptable to Purchaser
of all Property that is intangible property, including, without limitation,
documents, chattel paper, instruments, contract rights, goodwill, going concern
value, general intangibles and Intellectual Property, but excluding the Excluded
Assets, to the extent necessary to convey the same to Purchaser at Closing
pursuant to the terms hereof.

5.2.26    A satisfaction, waiver and release of all liens that Financial Advisor
may have in connection with a claim for commissions or other compensation due to
the Closing of the transaction contemplated by this Agreement, and in form and
substance reasonably acceptable to Title Company Insurer and which will permit
Title Company to issue its title insurance policy to Buyer without exception for
and insuring against such Financial Advisor claims.

5.2.27    An updated list of Facility Employees.

5.2.28    Any other documents reasonably required by the Title Company to
effectuate the Transactions.

5.3    Purchaser Closing Deliveries. Except for the balance of the Purchase
Price, which is to be delivered at the time specified in Section 2.2.2,
Purchaser shall execute and deliver to Escrow Agent (or cause to be delivered to
Escrow Agent) each of the following items on or before the Business Day
immediately preceding the Closing Date:

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5.3.1    The full Purchase Price (with credit for the Deposit), plus or minus
the adjustments or prorations required by this Agreement.

5.3.2    Purchaser’s counterpart signature to the Closing Statement.

5.3.3    A countersigned counterpart of the General Assignment.

5.3.4    A countersigned counterpart of the Resident Agreements Assignment.

5.3.5    An executed certificate in the form of the Bring Down Certificate.

5.3.6    Notification letters to all Residents prepared and executed by
Purchaser in the form attached hereto as Exhibit J, which shall be delivered to
all Residents by Purchaser immediately after Closing, and in any event not more
than seven (7) days following issuance of the Operating Licenses solely for the
provision of assisted living services.

5.3.7    Resolutions, certificates of good standing, and such other
organizational documents as the Title Company or Seller shall reasonably require
evidencing Purchaser’s authority to consummate the Transactions.

5.3.8    Such notices, transfer disclosures, affidavits or other similar
documents that are required by applicable law to be executed by Purchaser or
otherwise reasonably necessary in order to consummate the Transactions.

5.3.9    Reserved.

5.3.10    Purchaser’s and Escrow Agent’s countersigned counterparts to the
Indemnity Escrow Agreement.

5.3.11    The Access Agreement executed by Purchaser.

5.3.12    The Non-Compete Agreement executed by Purchaser.

5.3.13    Any other documents reasonably required by the Title Company to
effectuate the Transactions.

5.4    Originals; Document Delivery. Each of Seller, Existing Operator and
Purchaser shall provide the number of duplicate originals of the documents
referenced above in Section 5.2 and Section 5.3 as the other party may
reasonably request. Additionally, at the request of a party’s counsel, in
advance of Closing, attorneys for the parties shall exchange electronic copies
of executed Closing documents (to be held in trust pending Closing) to enable
counsel to confirm that all required Closing documents have been executed and
delivered.

5.5    Closing Prorations and Adjustments.

5.5.1    General. All customarily proratable items, including, without
limitation, collected rents, operating expenses, real and personal property
taxes and other operating expenses and fees (collectively, “Proratable Items”),
shall be prorated as of 11:59 p.m. (Local

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Time) on the day immediately prior to the Closing Date in accordance with the
proration schedule agreed upon by Seller and Purchaser prior to Closing, the
parties agreeing that Seller and Existing Operator shall be responsible and
charged for all of the Proratable Items attributable to the period up to the
Closing Date (and credited for any amounts paid by Seller or Existing Operator
attributable to the period on or after the Closing Date) and Purchaser shall be
responsible and charged for all of the Proratable Items attributable to the
period on and after the Closing Date.

5.5.2    Operating Expenses. All of the operating, maintenance, taxes (other
than real estate taxes), and other expenses incurred in operating the Property,
and any other costs incurred in the ordinary course of business for the
management and operation of the Property, shall be prorated on an accrual basis.
Seller and/or Existing Operator shall pay all such expenses accruing prior to
the Closing Date and Purchaser shall pay all such expenses accruing from and
after the Closing Date.

5.5.3    Utilities. A proration for utilities shall be made based upon the most
recently ascertainable bills. Seller and/or Existing Operator shall be entitled
to the return of any deposit(s) posted by it with any utility company. Seller
and Existing Operator shall notify each utility company serving the Property to
terminate their respective account, effective as of the Closing. Neither Seller
nor Existing Operator shall have no responsibility or liability for Purchaser’s
failure to arrange utility service for the Property in name directed by
Purchaser as of the Closing.

5.5.4    Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures for the year in which the Closing occurs to the extent the
same are available; provided, however, that in the event that actual figures
(whether for the assessed value of the Property or for the tax rate) for the
year of Closing are not available at the Closing Date, the proration shall be
made using figures from the preceding year or based on a prior installment
payment for such calendar year, but such figures shall be subject to adjustment
as provided in Section 5.6.

5.5.5    Property Contracts. Purchaser shall assume at Closing the obligations
arising from and after the Closing Date under the Assigned Contracts, subject to
the proration of operating expenses pursuant to Section 5.5.2.

5.5.6    Resident Agreements/Commercial Leases. All collected rent (whether
fixed monthly rentals, additional rentals, escalation rentals, retroactive
rentals, operating cost pass-throughs or other sums and charges payable by
Residents under the Resident Agreements), and any income and revenues from any
portion of the Property (including in connection with any Commercial Lease)
shall be prorated as of 11:59 p.m. (Local Time) on the day immediately prior to
the Closing Date on the basis of the actual number of days of the month (or
year, as applicable) which shall have elapsed as of the Closing Date. Purchaser
shall receive all collected rent, income and revenues attributable to dates from
and after the Closing Date. Existing Operator shall receive all collected rent,
income and revenues attributable to dates prior to the

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Closing Date. Notwithstanding the foregoing, no prorations shall be made in
relation to rents which have not been collected as of the Closing Date (the
“Uncollected Rents”). No adjustments shall be made in Existing Operator’s favor
for rents which have accrued and are unpaid as of the Closing, but Purchaser
shall pay Existing Operator such accrued Uncollected Rents as and when collected
by Purchaser. Purchaser agrees to bill Residents and tenants of the Property for
all Uncollected Rents and to take reasonable actions (which shall not include an
obligation to commence legal action) to collect Uncollected Rents. Purchaser’s
collection of rents shall be applied in the following order of priority: (i)
first, in payment of rent for the month in which the Closing Date occurs, with
such amounts being prorated between Purchaser and Existing Operator based upon
the number of days each owned the Property during the month in which the Closing
occurs (it being the intent of the parties that, if the Closing Date is the
first day of a calendar month, then Purchaser shall receive the entirety of the
rents received with respect to said month), (ii) second, in payment of rents for
any month which commenced after the Closing, but only to the extent payments of
rents for such month are then currently due, and (iii) third, in payment of
rents for months preceding the month in which the Closing occurs. After the
Closing, Existing Operator shall continue to have the right, but not the
obligation, in its own name, to demand payment of and to collect Uncollected
Rents owed to Existing Operator by any current or former Resident or tenant,
which right shall include, without limitation, the right to continue or commence
legal actions or proceedings and the delivery of the Resident Agreements
Assignment shall not constitute a waiver by Existing Operator of such right. If
Existing Operator receives rents with respect to the period of time form and
after the Closing Date, it shall immediately pay same to or as directed by
Purchaser.

5.5.7    Insurance. No proration shall be made in relation to insurance
premiums. Insurance policies will not be assigned to Purchaser.

5.5.8    Closing Costs.

(a)    Seller and Existing Operator shall be responsible for payment of the
following Transactions costs: (i) fees of Seller’s and Existing Operator’s
attorneys, accountants and other consultants (ii) one-half of the fees and
expenses for the Escrow Agent; (iii) all state, city, county and municipal
recording fees and all related charges and costs in connection with recording of
the deeds delivered pursuant to Section 5.2.1; (iv) real estate transfer taxes,
deed taxes, stamp taxes or similar taxes imposed with respect to the
Transactions, and any sales taxes imposed upon the portion of the Purchase Price
allocated to transferred personal property included in the Property; (v) the
cost of Third-Party reports prepared by or for Seller or Existing Operator prior
to the date of this Agreement; (vi) all fees (including defeasance fees),
charges and expenses imposed or assessed in connection with the payoff or
prepayment of all loans secured by a mortgage or deed of trust encumbering the
Property; and (vii) all costs and expenses incurred by Seller and Existing
Operator in connection with its cooperation with Purchaser or Purchaser’s
affiliate relating to Purchaser’s or its affiliates applications for, and the
issuance of, any and all Operating Licenses. In addition to the foregoing,
Seller and Existing Operator shall pay all fees, charges and related costs in
connection with the assignment of any Assigned Contract to Purchaser, the
removal of any Facility from any National Contract, or the termination of any
utility service for a Facility. Notwithstanding anything to the contrary
contained in this Agreement, neither Seller nor Existing Operator shall have any
obligation to assign to Purchaser any Property Contract if Seller or Existing
Operator (as applicable) and Purchaser have been

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unable to obtain any consent to such assignment required by the terms of such
Property Contract and, in such case of the failure to obtain any such required
consent to assign any Property Contract, the parties shall consummate the
Transactions by excluding such Property Contract from the Assigned Contracts
without any reduction in the Purchase Price.

(b)    Purchaser shall be responsible for payment of the following Transactions
costs (and shall reimburse Seller, at Closing, to the extent such costs are paid
by Seller prior to Closing): (i) all fees of Purchaser’s attorneys, accountants
and other consultants; (ii) all fees, costs and expenses in connection with
Purchaser’s due diligence, (iii) all costs for any Third-Party Reports prepared
at Purchaser’s request for purposes of this transaction (excluding the cost of
Third-Party Reports prepared by or for Seller or Existing Operator prior to the
date of this Agreement); (iv) premiums for each Title Policy and all
endorsements to any such policy; (v) all state, city, county and municipal
recording fees and all related charges and costs in connection with recording of
any mortgage against any of the Facilities; (vi) mortgage taxes, intangibles
taxes or similar taxes imposed on mortgages given by Purchaser with respect to
the Transactions; (vii) one-half of the fees and expenses for the Escrow Agent;
(viii) fees and expenses for the investment of the Deposit; (ix) except as
provided in Section 5.5.8(a), all costs and expenses in connection with, or
relating to, any Purchaser’s applications for, and the issuance of, any and all
Operating Licenses (including the preparation of the same); and (x) any and all
costs, expenses and fees incurred in connection with, or relating to, the
preparation of any statements, reports or filings with or required by the
Securities and Exchange Commission as a result of the Transactions (or the
status of Purchaser or any of its Affiliates as a public company).

5.5.9    Resident Deposits. The amount of any refundable deposits held (and not
yet applied) by Seller or Existing Operator as of the Closing Date, pursuant to
the terms of any Resident Agreements, shall be a credit to the cash to be paid
by Purchaser at the Closing, or paid as otherwise directed by Purchaser.

5.5.10    Possession. Possession of the Property, subject to the Resident
Agreements, Assigned Contracts, and Permitted Exceptions, shall be delivered to
Purchaser at the Closing upon release from escrow of all items to be delivered
by Purchaser pursuant to the terms of Section 5.3. Seller and Existing Operator
shall make available to Purchaser at the Property (or at such other location
agreed upon by the parties) on the Closing Date originals or copies of the
Resident Agreements, Assigned Contracts, lease files, warranties, guaranties,
operating manuals, keys and access codes to the property, and Seller’s and
Existing Operator’s books and records (other than proprietary information) that
are in the possession of Seller or Existing Operator or are located at the
Facilities (collectively, “Seller’s Property-Related Files and Records”)
exclusively relating to the Property. Purchaser agrees, for the applicable
period required by law, but in no event less than one (1) year after the Closing
(the “Records Hold Period”), to (a) provide and allow Seller and Existing
Operator reasonable access, upon reasonable prior written notice and during
standard business hours, to Seller’s Property-Related Files and Records for
purposes of inspection and copying thereof (which shall be at Seller’s and
Existing Operator’s sole cost and expense), and (b) reasonably maintain and
preserve Seller’s Property-Related Files and Records. If at any time during the
two (2) year period following the Records Hold Period, Purchaser desires to
dispose of Seller’s Property-Related Files and Records, Purchaser shall first
provide Seller not less than thirty (30) days’ prior written notice (the
“Records Disposal Notice”). Seller shall have a period of thirty (30) days after
receipt of

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the Records Disposal Notice, upon reasonable prior written notice and during
standard business hours, to enter the Property (or such other location where
such records are then stored) and remove or copy those of Seller’s
Property-Related Files and Records that Seller desires to retain (which shall be
at Seller’s sole cost and expense).

5.5.11    Capital Expenditure Adjustment. Seller has commenced a certain
plumbing project at the Facility located at 1225 Havendale Blvd NW, Winter
Haven, FL 33881 (the “Spring Haven Facility”), of which Seller has previously
notified Purchaser (the “Current Capital Repair”). To the extent that the
Current Capital Repair is not completed by Seller prior to the Closing, Seller
shall be responsible for completion of the Current Capital Repair following the
Closing, at Seller’s sole cost and expense, and the Seller and Purchaser at
Closing shall enter into an Access Agreement in the form of Exhibit K attached
hereto (the “Access Agreement”), pursuant to which Seller and its
representatives, agents, employees and contractors shall be permitted to enter
the Spring Haven Facility for the purposes of completing the Current Capital
Repair.

5.5.12    Advance Payments.

(a)    If the Closing occurs at calendar month end, then Purchaser shall receive
a credit at the Closing equal to 100% of the resident fees billed and collected
by Seller, Existing Operator and Manager in advance for the calendar month after
the Closing occurs, subject to the reconciliation process set forth in Section
5.6.

(b)    If the Closing occurs other than at calendar month end, Purchaser shall
receive a credit at the Closing equal to the following, subject to the
reconciliation process set forth in Section 5.6:

(i)    For the calendar month in which the Closing occurs, a credit equal to
Purchaser’s pro rata share of the amount of the total fees billed and collected
by Seller, Existing Operator and Manager in advance for such calendar month; and

(ii)    For the calendar month after the Closing occurs, to the extent that
Seller, Existing Operator and Manager have billed and collected for that
calendar month in advance, a credit equal to 100% of the resident fees so billed
and collected.

5.6    Post-Closing Adjustments. To the extent applicable, Seller and Purchaser,
acting in good faith, shall reconcile with each other within ninety (90) days of
the later of (i) the Closing Date or (ii) the date an allocated amount becomes
fixed and ascertainable (provided that in no event shall such date be later than
six (6) months following the Closing Date), the amounts prorated and adjusted
pursuant to this Article V using any new or updated information, including the
reconciliation of estimated amounts with actual amounts, the correction of any
errors and the inclusion of any items which should have been included at the
Closing. Notwithstanding anything to the contrary contained herein, Seller’s
obligations for real estate and personal property taxes shall be based on the
assessed value set forth on Schedule 5.6. All adjustments to be made based on
the mutual agreement of the parties shall be paid to the party entitled to the
benefit of such adjustment within thirty (30) days after the final determination
thereof. In the event the parties have not agreed with respect to all
adjustments

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required to be made pursuant to this Section 5.6 within thirty (30) days
following expiration of such ninety (90) day period, upon application by any
such party, a certified public accountant reasonably acceptable to the parties
shall determine any such adjustments which have not theretofore been agreed to
between such parties. The charges of such accountant shall be split equally by
the parties, unless one party prevails in all matters relating to such dispute,
in which case the party that is not the prevailing party shall pay all charges
of such accountant. All adjustments to be made as a result of the final results
of the adjustments shall be paid to the party entitled to the benefit of such
adjustment within thirty (30) days after the final determination thereof.
Notwithstanding anything to the contrary contained in this Agreement, (i) in the
event that, following the Closing, Purchaser shall receive a refund of real
estate taxes which relates to any period of time all or partly prior to the
Closing (whether such refund is made by direct payment or in the form of a
credit against future real estate tax obligations), such refund (net of the
reasonable, out-of-pocket costs of obtaining such refund, which shall be
apportioned in the same percentages as the refund itself) shall be apportioned
between the parties in proportion to the amount of time that each party owned
the Property during the tax period to which the refund relates, and (ii) subject
to the requirements of clause (i), neither party shall have any obligation to
re-adjust any items after the expiration of the periods set forth in this
Section 5.6.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER

The disclosure schedules attached hereto (the “Disclosure Schedules”) are
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in this Agreement to which such sections and
subsections of the Disclosure Schedules relate. An exception to a representation
or warranty in this Article VI set forth in the Disclosure Schedules effectively
modifies the corresponding representation or warranty in this Article VI;
provided that any fact or condition disclosed in any section of the Disclosure
Schedules in such a way as to make its relevance to a representation or
representations made elsewhere in this Article VI reasonably apparent on its
face shall be deemed to be an exception to such representation or
representations notwithstanding the omission of a reference or cross reference
thereto. Any fact or item disclosed in any section of the Disclosure Schedules
shall not be deemed, solely by reason of such inclusion, to be material.

6.1    Seller’s Representations. Each Seller and Existing Operator, jointly and
severally with all other Sellers and Existing Operators, represents and warrants
to Purchaser the following, as of the Effective Date and as of the Closing, each
of which representations and warranties is material to and is relied upon by
Purchaser:

6.1.1    Each of Seller and Existing Operator (collectively, the “Sale
Participants”) is validly existing and in good standing under the laws of the
state of its formation, and is duly licensed and qualified to do business and is
in good standing in each jurisdiction in which the properties owned, leased or
operated by it or the operation of its business as currently conducted makes
such licensing or qualification necessary; and has the full and unrestricted
entity power and authority to carry on its business as it is currently being
conducted and to own, lease and operate its assets as and in the places they
have been and now are owned, leased or operated, to execute this Agreement and
each other agreement, contract, instrument, certificate or other document
contemplated hereby or by the Transactions (including,

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without limitation, the MTA) (the “Transaction Documents”) to which it is a
party or is otherwise bound (and, in the case of Seller, to sell and convey the
Property), and has taken all corporate, partnership, limited liability company
or equivalent entity actions and obtained all organizational approvals required
for the execution and delivery of the Transaction Documents to which it is a
party or is otherwise bound, and the consummation of the Transactions. Each Sale
Participant’s execution, delivery and compliance with or fulfillment of the
terms and conditions hereof and of the other Transaction Documents to which it
is a party or is otherwise bound will not (i) conflict with or result in any
breach of the provisions of, or constitute a default under the articles of
incorporation, bylaws, articles of organization, operating agreement,
partnership agreement or other governing organizational or charter documents, as
the case may be, of such Sale Participant, (ii) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute a default
under, any contract or instrument to which such Sale Participant is a party or
by which such Sale Participant or its assets is or are otherwise bound, or
result in the termination of any such contract or instrument or termination of
any provisions or rights in respect of any of the Property, or result in the
creation or imposition of any lien, charge or encumbrance upon the Property,
(iii) result in a violation or breach, in any material respect, of any legal
requirement applicable to such Sale Participant or by which such Sale
Participant or its assets is or are otherwise bound, (iv) create any liens or
other encumbrances on the Property, (v) result in the breach or violation of any
of the warranties and representations made herein or in any other Transaction
Document by or on behalf of such Sale Participant, or (vi) result in the loss of
any rights, privileges, authorizations or benefits afforded or intended by any
of the Property or the Permits. This Agreement is, and the other Transaction
Documents to which a Sale Participant is a party shall be, when executed and
delivered thereby, a valid and binding agreement, enforceable against such Sale
Participant in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency and other laws affecting the rights of creditors
generally and equitable principles and except that equitable remedies may be
granted only in the discretion of a court of competent jurisdiction.

6.1.2    Seller is not a “foreign person,” as that term is used and defined in
the Internal Revenue Code, Section 1445, as amended.

6.1.3    Other than as described on Schedule 6.1.3, there are no actions,
claims, proceedings, litigation or governmental investigations or condemnation
actions or other legal or administrative proceedings, or any orders, decrees or
judgments in progress, pending or in effect, or to Seller’s Knowledge or
Existing Operator Knowledge, threatened against any Sale Participant, the
Facilities or the Property or against or relating to the Transactions, which if
decided adversely, would reasonably be expected to materially and adversely
affect the Facilities or the Property or any Sale Participant’s ownership,
operation or management thereof, or the Transactions (including the consummation
thereof pursuant to the terms of the Transaction Documents).

6.1.4    Exhibit L (the “Property Contracts List”) sets forth a true and correct
list, as of the Effective Date, of all outstanding contracts, leases or other
agreements, whether written or oral, to which any Sale Participant is a party
and relating to the Property or the ownership, operation or management of the
Facilities, excluding (i) the Residency Agreements, (ii) any contract, lease or
other agreement which is cancellable without penalty on thirty (30) days or less
notice, (iii) any contract, lease or other agreement which is entered into in
the

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ordinary course of business consistent with past practice, is not material to
the ownership, operation or management of the Facilities and does not require
the expenditure of more than Fifty Thousand and no/100 Dollars ($50,000.00) per
year (either individually or together with any related agreements), and (iv) any
of the insurance policies listed in Schedule 6.1.29 (or the renewal of any such
policies) (such contracts and agreements, but expressly excluding those
described in clauses (i) – (iv), collectively, the “Material Contracts”). Other
than matters reflected in the Title Documents, the Property Contracts List, the
Permits identified on Schedule 6.1.12(a), the Resident Agreements and the
insurance policies listed in Schedule 6.1.29, no Sale Participant is party to or
bound by any contract, agreement, lease, license, sublicense or other
arrangement material to the use, ownership, management, operation, leasing,
maintenance or repair of the Facilities and the Property. Seller and Existing
Operator have made available to Purchaser complete and correct copies of each of
the Material Contracts. Neither any Sale Participant nor, to Seller’s Knowledge
or Existing Operator Knowledge, any other party is in default under any of the
Material Contracts, no Sale Participant has received notice of any default
thereunder, and each Material Contract is in full force and effect and is valid
and enforceable by Sale Participants party thereto in accordance with its terms.

6.1.5    A rent roll for each Facility (each, a “Rent Roll”) as of a date not
more than thirty (30) days prior to the Effective Date has been made available
to Purchaser, which Rent Roll is true, correct and complete in all material
respects.

6.1.6    Seller and Existing Operator have made available to Purchaser true and
complete copies of the Resident Agreement Form, and all Resident Agreements with
respect to any Facility are consistent in all material respects with the
applicable form of the Resident Agreement Form and all Residents (or their
authorized agents) have executed Resident Agreements as of the Effective Date.
All Resident Agreements comply in all material respects with all Laws,
including, without limitation, all required regulatory standards of any
Governmental Authorities with regulatory jurisdiction over the Facilities and
all Third Party Payor Programs. All Resident Agreements were entered into on an
arms’ length basis, do not provide for payment of a single sum in exchange for
lifetime care or other prepaid services and do not contain any provisions that
prohibit or limit the right to raise monthly occupancy or other fees or rents
payable thereunder for more than twelve (12) months after the initial occupancy
date under such Resident Agreement. True, correct and complete copies of all
Resident Agreements are located at the Facility to which they relate (to the
extent necessary to comply in all material respects with all Laws) and, subject
to Section 4.1.1 hereof, access to all Resident Agreements has been or will be
provided to Purchaser as part of its due diligence review.

6.1.7    (a)    Reserved.

(b)    Each Sale Participant and Manager is currently conducting, and to the
Sellers’ Knowledge and Existing Operator Knowledge, has at all times since
August 1, 2013 conducted, and between the Effective Date and the Closing, will
conduct its operation of the Facilities, in material compliance with all Laws,
including, without limitation, all Healthcare Laws, all applicable local, state
and federal building codes, fire codes, life safety codes and other similar
regulatory requirements and no waivers of such physical plant standards exist at
any Facility.

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(c)    Other than as described on Schedule 6.1.7(b), no Facility has been cited
for any deficiency that resulted or would reasonably be expected to result in a
denial of payment for new admissions, civil monetary penalty, termination, final
revocation or cancellation of any Permit or termination or other restriction of
a Medicaid Provider Agreement, and none of the Sale Participants or Manager has
received written notice from any Governmental Authority with jurisdiction over
the Facilities or the Property, and no Seller or Existing Operator has
Knowledge, (i) that any such actions will or may be taken or that any Sale
Participant, Manager or any Facility is under investigation or review with
respect to the foregoing, or (ii) of any violation of any Laws, ordinances or
regulations applicable to the Facilities or the Property that remains uncured or
unresolved as of the Effective Date. No Sale Participant nor Manager has
received any written notice or communication from any Governmental Authority
alleging, and no Seller or Existing Operator has Knowledge of, any violation of
accreditation, professional, trade, industry, ethical or other applicable
standards by any Sale Participant, Manager or the Facilities.

6.1.8    (a)    Except as set forth on Title Commitments and Existing Surveys,
the Seller and Existing Operator are the holders of good and marketable fee
simple title to the Real Property Assets, which in each case will, on or before
the Closing Date, be free and clear of all Monetary Liens and without exception
to title other than for the Permitted Exceptions. Existing Operator has
continuously operated the Facilities during the period of their ownership by
Seller and using no names other than (i) the legal names and/or trade names of
the Existing Operator and (ii) the Facility names identified on Schedule I.
Except for those agreements, documents and instruments that have been delivered
by Seller or Existing Operator to Purchaser, to Seller’s and the Existing
Operator’s Knowledge, there are no unrecorded agreements, documents or
instruments that materially affect the title to any Real Property Assets other
than the Permitted Exceptions.

(b)    Except for items leased by the Sale Participants and listed on Schedule
6.1.8(b), one or more of the Seller or Existing Operator owns title to all
Operating Assets that are personal property free and clear of all mortgages,
security interests, liens or other encumbrances, other than any Monetary Liens,
which Seller and Existing Operator shall pay and discharge in full prior to or
at the Closing.

(c)    The Facilities are supplied with such utilities as are necessary for the
ownership, operation and management of such Facilities as currently operated and
for their intended purposes. All utility bills and deposits due and payable to
any utility provider have been or will be timely paid in the ordinary course of
business by Existing Operator.

(d)    Reserved.

(e)    Neither Seller nor Existing Operator has received any written notice or
has Knowledge of any existing, pending or, to Seller’s Knowledge or Existing
Operator Knowledge, threatened zoning, building code or other moratorium
proceedings, or similar matters which would reasonably be expected to materially
and adversely affect the ability to operate the Facilities as currently
operated. Except as disclosed in the Title Documents, (i) neither Seller nor
Existing Operator has submitted or received written notice from any Governmental
Authority that any other Person has submitted, in each case as of the Effective
Date, an application for the

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creation of any special taxing district affecting the Property (or any part
thereof), or annexation thereby, or inclusion therein and (ii) neither Seller
nor Existing Operator has received written notice on or prior to the Effective
Date that any Governmental Authority has commenced or intends to commence
construction of any special or off-site improvements or has imposed or increased
or intends to impose or increase any special or other assessment against the
Property (or any part thereof).

(f)    Reserved.

(g)    Neither Seller nor Existing Operator has received any written notice of
any condemnation or eminent domain proceedings pending nor, to the Knowledge of
Seller and Existing Operator, are any such proceedings threatened or
contemplated against the Property or any part thereof.

(h)    There are no parties other than a Sale Participant in possession of the
Property, or any portion thereof, pursuant to lease, management agreement or
otherwise, other than Residents pursuant to Resident Agreements and any tenants
under any Commercial Leases.

(i)    Reserved.

(j)    The Property and the National Contracts constitute all of the assets
necessary and sufficient to conduct the ownership, operation and management of
the Facilities in the manner that such operations have been conducted and as
required by Law. Except for the Property and the National Contracts, there are
no other assets which are used in connection with the ownership, operation and
management of the Facilities.

(k)    The only Commercial Leases are those referenced in Schedule 6.1.8(k) of
this Agreement. Each Commercial Lease is in full force and effect. Seller or
Existing Operator is “landlord” or “lessor” under each Commercial Lease and is
entitled to assign to (or as directed by) Purchaser, without the consent of any
party, each Commercial Lease. Neither Seller nor Existing Operator is in default
under any respective Commercial Lease, and there exists no condition or
circumstance or written notice of any condition or circumstance which, with the
passage of time, would constitute a default under any Commercial Lease by any
party. No tenant under a Commercial Lease has asserted any claim of default,
offset or other defense in respect of Seller’s or Existing Operator’s
obligations under the Commercial Leases.

6.1.9    No Sale Participant has (a) made a general assignment for the benefit
of creditors, (b) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by its creditors, (c) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller’s or Existing Operator assets, which remains pending as of the Effective
Date, (d) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets, which remains pending as of the Effective
Date, or (e) made an offer of settlement, extension or composition to its
creditors generally.

6.1.10    Except as disclosed in the Title Documents, no Sale Participant has
granted any option or right of first refusal or first opportunity to any party
to acquire any fee or ground leasehold interest in any portion of the Property
or any interest therein.

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6.1.11    Other than as described on Schedule 6.1.11 (the “Required Consents”),
no consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Authority is required to be obtained or made by
any Sale Participant in connection with the execution and delivery of this
Agreement or the other Transaction Documents to which it is a party or by which
it is bound, or the consummation of the Transactions.

6.1.12    (a) Existing Operator has all Operating Licenses and other material
Permits required by applicable Healthcare Laws to operate the Facilities as
currently operated. Set forth on Schedule 6.1.12(a) is a true, correct and
complete list of all of the Operating Licenses and other material required
Permits owned or held by or issued to Seller, Existing Operator or Manager as of
the Effective Date relating to the Facilities or the Property (or any portion
thereof). There is no action pending or, to Seller’s Knowledge or Existing
Operator Knowledge, threatened in writing by or before any Governmental
Authority to revoke, cancel, rescind, restrict, modify, suspend or refuse to
renew any of the Operating Licenses or other material required Permits set forth
on Schedule 6.1.12(a). True, correct and complete copies of all the Operating
Licenses and other material required Permits set forth on Schedule 6.1.12(a)
have been furnished to Purchaser. As of the Effective Date, neither Seller,
Existing Operator nor Manager has received written notice from any Governmental
Authority asserting a material violation of the terms of any such Operating
License or such other material required Permit set forth on Schedule 6.1.12(a)
or threatening to revoke, cancel, rescind, restrict, modify, suspend or not
renew the terms of any such Operating License or other material required
Permits. Each Operating License and Permit set forth on Schedule 6.1.12(a) (i)
has not (A) been transferred to any location other than the applicable Facility
or (B) been pledged as collateral security, and (ii) is free from restrictions
or known conflicts that would materially impair the use or operation of the
applicable Facility as intended. Such Operating Licenses and Permits are valid
and in full force and effect. Since August 1, 2013, no Sale Participant or
Manager has taken any action to rescind, withdraw, revoke, amend, modify,
supplement or otherwise alter the nature, tenor or scope of any such Operating
License or Permit or applicable Third Party Payor Program participation other
than non-material alterations effected in the ordinary course of the business
consistent with past practice. Seller and Existing Operator are the sole holders
of all the Operating Licenses and Permits with respect to each Facility, and,
except for Manager, acting pursuant to the Management Agreements, and tenants
under Commercial Leases disclosed to Purchaser prior to the Effective Date,
there is no other person or entity that operates, manages or leases any
Facility. To the Knowledge of Seller and Existing Operator, each Facility
Employee who is required by Law to hold a Permit to deliver health care services
to Residents (including the performance of diagnostic services such as x-ray or
lab services) holds such Permit and is performing only those services which are
permitted by such Permit.

(b)    As of the Effective Date, each of the Sale Participants, as applicable,
is certified for participation in, and party to, valid provider agreements for
payment by Medicaid for the provision of assisted living services. All
Governmental Programs in which any of the Sale Participants has participated
since August 1, 2013 are listed on Schedule 6.1.12(b) (each a “Third Party Payor
Program”) and Manager, with respect to the Facilities, has participated in no
such programs except as listed on Schedule 6.1.12(b). As of the Effective Date,
except as set forth on Schedule 6.1.12(b)], (i) each of the Sale Participants,
as applicable, is in good standing in each Third Party Payor Program, (ii) there
is no existing or pending revocation, suspension, termination, probation,
restriction, limitation, or non-renewals proceedings by any Third Party

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Payor Program of which any of the Sale Participants has received written notice
under any Third Party Payor Program (and, to Seller’s Knowledge or Existing
Operator Knowledge, none of the foregoing has been threatened to any Sale
Participant in writing by any Governmental Authority), and (iii) none of the
Sale Participants or Manager, with respect to the Facilities, has been excluded
from participation in any Third Party Payor Program; and as of the Effective
Date, none of the Sale Participants or Manager, with respect to the Facilities,
has any material liabilities to any third party fiscal intermediary or carrier
administering the Governmental Programs, directly to the Governmental Programs
or any Governmental Authority, or to any other Payor for the recoupment of any
amounts previously paid to any of the Sale Participants or any predecessor by
any such third party fiscal intermediary, carrier, Governmental Program or other
Payor. None of the Sale Participants or Manager, with respect to the Facilities,
has received written notice of any dispute from any Governmental Authority or
Government Program regarding any such claims, other than with respect to
adjustments in the ordinary course of business. None of the Sale Participants or
Manager, with respect to the Facilities, has received written notice of
currently scheduled audits or violations with respect to any claims, and, to the
Knowledge of Seller or Existing Operator, no such audits or violations are
threatened. There are no facts or circumstances which could reasonably be
expected to give rise to any material disallowance under such claims. Each of
the Sale Participants, as applicable, is now and has been in material compliance
with all applicable conditions of participation and all applicable conditions of
payment for all Government Programs in which it participates or participated.
None of the Sale Participants is required file costs reports under any Third
Party Payor Program.

(c)    Reserved.

(d)    True, correct and complete copies of all surveys involving the Facilities
(Licensing Surveys, Audits or otherwise) completed from and after August 1, 2013
have been delivered or made available to Purchaser, along with true, correct and
complete copies of all Governmental Authority reports, Licensing Surveys,
Audits, statements of deficiencies, plans of correction and any other written
investigation notices, warnings, waivers, related correspondence or reports
filed, issued, sent and received with respect to the Facilities or provider
agreements of Governmental Authorities (collectively, “Governmental
Correspondence”), and, except as set forth in Schedule 6.1.12(d), there have
been no deficiencies or violations noted in any Governmental Correspondence for
which a plan of correction has not been, or would not reasonably be expected to
be, accepted. The Sale Participants have remedied, discharged and complied in
all material respects with all applicable plans of correction or other
requirements.

(e)    Neither any Facility, Seller, Existing Operator, Manager, nor any of
their respective current or former directors, officers, employees, contractors,
or agents has been or is currently suspended, excluded or debarred from
contracting with the United States federal or any state government or from
participating in any Federal Health Care Program (as defined in 42 USC
§ 1320a-7b(f)) or is subject to an investigation or proceeding by any
Governmental Authority that has resulted in or could reasonably be expected to
result in such suspension, exclusion, or debarment; nor has any Facility,
Seller, Existing Operator, Manager, or any of their respective current or former
directors, officers, employees or agents received notice of any impending or
potential exclusion or listing. Neither any Facility nor Seller, Existing
Operator or Manager has been subject to sanction pursuant to 15 U.S.C. §41 et
seq. or 42 U.S.C. §1320a-7a or 1320a-8, or been charged with or convicted of a
crime described at 42 U.S.C. §1320a-7b, and

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no such sanction or proceeding is pending or, to the Knowledge of Seller or
Existing Operator, threatened.

(f)    Neither Seller, Existing Operator, Manager or any of their respective
current or former directors, officers, employees, agents have solicited,
received, paid, or offered to pay any illegal remuneration, directly or
indirectly, overtly or covertly, in cash or in kind, for any referral or
generation of business in violation of any applicable Healthcare Law.

(g)    Except as disclosed on Schedule 6.1.12(g), neither Seller, Existing
Operator, Manager or any Facility is: (i) a party to a corporate integrity
agreement with the Office of the Inspector General of the Department of Health
and Human Services, (ii)  the subject of any investigation, program-integrity
review, or audit disclosed in writing and currently being conducted by any
federal, state, or local Governmental Authority, (iii) a defendant or named
party in any unsealed qui tam/False Claims Act litigation, (iv) a party to a
consent decree, judgment, order, or settlement with any Governmental Authority
that (A) requires the payment of money by Seller, Existing Operator, Manager or
any Facility to any Governmental Authority or third party, (B) requires any
recoupment of money from Seller, Existing Operator, Manager or any Facility by
any Governmental Authority or third party, or (C) prohibits any activity
currently conducted by Seller, Existing Operator, Manager or any Facility, (v)
subject to any actual settlement agreement or corporate integrity agreement or
certification of compliance agreement with any Governmental Authority, or (vi)
subject to any mandatory or discretionary exclusion or suspension from federal
or state health care program participation.

(h)    Neither Seller, Existing Operator, Manager, nor any Facility has: (i) 
had any security or data breaches compromising or otherwise involving Protected
Health Information (as such term is defined in HIPAA) that are required to be
reported to any Governmental Authority in accordance with HIPAA or (ii) received
any written communication from any Governmental Authority alleging that Seller,
Existing Operator, Manager, nor any Facility is not in compliance in all
material respects with HIPAA that has not been resolved, and no event has
occurred that required, or now requires, Seller, Existing Operator, Manager, or
any Facility to provide notification to any Governmental Authority under any
state privacy and/or breach notification law.

(i)    Reserved

(j)    There are no ongoing obligations with respect to any funding received in
connection with the Facilities under the federal Hill-Burton Act.

(k)    Reserved.

(l)     Seller or Existing Operator is the sole party owning and/or in control
of all certificate of need rights or bed rights, if any, administered under any
Healthcare Laws related to the ownership, operation, maintenance, management,
use, regulation, development, expansion or construction of a health care
facility at or on the Property.

6.1.13    Each Facility is managed by Manager pursuant to the Management
Agreements. No Sale Participant has any employees and, to Seller’s and Existing
Operator’s Knowledge, all Facility Employees are employed by Manager or
Manager’s Affiliates.

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6.1.14    True, correct and complete copies of the Property Statements have been
previously provided to Purchaser. The Property Statements are accurate and
complete and the Financial Statements contained therein have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and fairly present the financial
condition of Seller and Existing Operator and the results of operations for the
Facilities, as applicable, as of the respective dates indicated therein. Except
and to the extent reflected or reserved against in the Most Recent Financial
Statements, as of the date of such Most Recent Financial Statements, Seller and
Existing Operator have no any material liabilities or obligations of any nature,
whether accrued, absolute, contingent, or otherwise, due or to become due, other
than obligations of future performance arising in the ordinary course of
business under executory contracts (but only to the extent not relating any
breach or default by any party under any such executory contract).

6.1.15    (a)    To Seller or Existing Operator’s Knowledge and except as
disclosed in the Third Party Reports or on Schedule 6.1.15(a), the Property does
not contain any regulated quantity of any Hazardous Substance. Notwithstanding
the above, there may be the presence of Hazardous Substances typically used in,
and in quantities necessary for the day-to-day operation of, the Facilities and
which are commonly used in other similar facilities, such as, but not limited
to, cleaning fluids, insecticides, pharmaceuticals and medicines, which have
been used, transported, stored and disposed of by Seller and Existing Operator
in material compliance with all applicable Environmental Laws.

(b)    Except as provided in the Third Party Reports or on Schedule 6.1.15(b),
there is no pending or to Seller’s or Existing Operator’s Knowledge, threatened
litigation or proceeding before any Governmental Authority in which any Person
alleges the unlawful presence, release or threat of release of any Hazardous
Substance on or emanating from the Property or violation of Environmental Laws
at the Facilities.

(c)    Except as provided in the Third Party Reports or on Schedule 6.1.15(c),
no Sale Participant has received any notice that any Governmental Authority or
employee or agent thereof has determined, or threatens to determine, or is
investigating, that there is an unlawful presence, release or threat of release
on, in or from the Property of any Hazardous Substance, or the generation,
transportation, storage, treatment or disposal at the Property, of any Hazardous
Waste.

(d)    Except as provided in the Third Party Reports or on Schedule 6.1.15(d),
Seller has owned and Seller and Existing Operator have operated the Property in
material compliance with all applicable Environmental Laws, has obtained all
necessary licenses, permits and other authorizations under the Environmental
Laws for the operation of the Property, and has not used any of the Property for
the generation, storage, manufacture, use, transportation, disposal or treatment
of Hazardous Wastes.

(e)    Except as disclosed in the Third-Party Reports or Schedule 6.1.15(e),
there has been no discharge of any Hazardous Substance on or from the Property
that would trigger any reporting, assessment or remedial obligations under
Environmental Laws during the time of Seller’s ownership or occupancy thereof.

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(f)    Seller and Existing Operator have delivered to Purchaser copies of the
Third-Party Reports and all other reports or tests in the possession of any Sale
Participant with respect to (i) the compliance of the Property with
Environmental Laws and (ii) the release or threatened release of Hazardous
Substances on, in or from the Facilities or the Land, each of which is listed on
Schedule 6.1.15(f).

(g)    Reserved.

(h)    Except as disclosed in the Third-Party Reports or Schedule 6.1.15(h), to
Seller’s and Existing Operator’s Knowledge, no underground storage tanks are or
were present on the Land.

(i)    Notwithstanding anything in this Agreement to the contrary, this Section
6.1.15 sets forth the Seller’s and Existing Operator’s sole representations and
warranties with respect to compliance with Environmental Laws and the matters
set forth in this Section 6.1.15.

6.1.16    Reserved.

6.1.17    All real and personal property taxes and assessments with respect to
the Property and Facilities and allocable to the period prior to the Closing
have been paid or, by the time of Closing, will be paid by Seller, or such taxes
will be prorated between the parties as contemplated in Section 5.4.4. None of
the Sale Participants nor any of their respective Affiliates has received any
written notice for an audit or delinquency of Taxes which has not been resolved
or completed. No Sale Participant is currently contesting any Taxes with respect
to any Facility. All federal, state and other Tax Returns and Tax reports
required to be filed by any of the Sale Participants or their respective
Affiliates on or before the Closing Date have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
and reports are required to be filed, and all of such Tax Returns were true,
correct and complete as filed to the extent required by applicable Laws. All
Taxes (whether or not reflected on a Tax Return, and including interest and
penalties and including estimated Tax installments where required to be filed
and paid) of the Sale Participants due and payable prior to the Closing Date
have been fully and timely paid. All Taxes and other assessments and levies
which any of the Sale Participants or their respective Affiliates is required by
Law to withhold or to collect have been duly withheld and collected, and have
been paid over to the proper Governmental Authority to the extent due and
payable. There are no outstanding or pending claims, deficiencies or assessments
of Taxes due and payable, interest or penalties with respect to any of the Sale
Participants or their respective Affiliates for any taxable period.

6.1.18     Reserved.

6.1.19    Each of the Sale Participants is in material compliance with the
requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001),
and other similar requirements contained in the rules and regulations of the
Office of Foreign Property Control, Department of the Treasury (“OFAC”) and in
any enabling legislation or other Executive Orders or regulations in respect
thereof (the foregoing, the “Orders”). No Sale Participant nor any Affiliate
thereof (a) is listed on the Specially Designated Nationals and Blocked Person
List maintained by OFAC or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of OFAC or
pursuant to

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any other applicable Orders (such lists are collectively referred to as the
“Lists”), (b) is a Person who has been determined by any competent authority to
be subject to the prohibitions contained in the Orders; or (c) is owned or
controlled by (including, without limitation, by virtue of such Person being a
director or owning voting shares or interests), or acts for or on behalf of, any
Person on the Lists or any other Person who has been determined by any competent
authority to be subject to the prohibitions contained in the Orders.

6.1.20    Other than, (a) as provided in Section 5.5.11, and (b) for ordinary
course repair or maintenance projects that the Sale Participants or Manager may
undertake with respect to the Facilities, no Sale Participant or Manager has any
outstanding contracts for capital expenditures relating to the Facilities, nor
does any Sale Participant have any agreement, obligation or commitment for
capital expenditures relating to the Facilities, including, without limitation,
additions to property, plant, equipment or tangible capital Property.

6.1.21    No Sale Participant has received any notice, and Seller and Existing
Operator have no Knowledge, that any vendor or supplier of the Facilities
intends to discontinue, substantially alter prices or terms to, or significantly
diminish its relationship with the Facilities, either as a result of the
transactions contemplated hereby or otherwise.

6.1.22    Each Sale Participant’s and Manager’s Books and Records (a) are
complete and correct in all material respects, (b) have been maintained in all
material respects in accordance with Law (including but not limited to HIPAA)
governing the preparation, maintenance of confidentiality, transfer and
destruction of such records, and (c) there is no material deficiency in such
Books and Records.

6.1.23    Reserved.

6.1.24    Each Facility is duly licensed as an assisted living facility as
required under Law. The total number of licensed beds/units (including any beds
designated under any licensure classification) at each Facility as of the Date
of Execution is as set forth on Schedule 6.1.24. As of the Effective Date, there
is no application pending, submitted by any Sale Participant or Manager, to
reduce the number of licensed beds at any Facility or to amend or otherwise
materially change the number of beds approved by any applicable Governmental
Authority. To Seller’s and Existing Operator’s Knowledge, there are no
proceedings or actions pending or contemplated to reduce the number of licensed
beds of any Facility. Schedule 6.1.24 also identifies for each Facility the
number of beds which are certified for participation in the Medicaid program
(and each applicable waiver program thereunder) and the licensure category or
categories maintained by such Facility. Since August 1, 2013, the number of
Residents at any Facility has not exceeded the licensed capacity for such
Facility.

6.1.25    Schedule 6.1.25 lists all Intellectual Property owned, licensed or
used by Seller or Existing Operator in the ownership, operation and management
of the Facilities, and Seller or Existing Operator owns or licenses or has the
sole right to use all of such Intellectual Property. Since August 1, 2013, no
claims have been asserted and no claims are pending or, to Seller’s or Existing
Operator’s Knowledge, threatened by any person or entity, as to the use of any
such Intellectual Property or challenging or questioning the validity or
effectiveness of any state or federal registration of such Intellectual Property
and no Sale Participant nor Manager has

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received any notice of such claim or knows of any valid basis for such claim. To
Seller’s and Existing Operator’s Knowledge, each Sale Participant’s use of the
Intellectual Property (and Purchaser’s or JV Partner’s continued use thereof
following the Closing in the same manner) does not and will not infringe the
rights of any person or entity.

6.1.26    Since March 31, 2017, no Sale Participant has:

(a)    Reserved;

(b)    Reserved;

(c)    Other than in the ordinary course of business, consistent with past
practices, sold, transferred or otherwise disposed of, or agreed to sell,
transfer or otherwise dispose of, any Property related to or connected with the
Facilities having a fair market value at the time of sale, transfer or
disposition of Twenty-Five Thousand and no/100 Dollars ($25,000.00) or more in
the aggregate, or cancelled, or agreed to cancel, any debts or claims relating
primarily to the Facilities in the amount of Ten Thousand and no/100 Dollars
($10,000.00) or more in the aggregate;

(d)    Made any change in any method of accounting or accounting practice
relating to the Facilities;

(e)    To Seller’s and Existing Operator’s Knowledge, imposed any encumbrance,
other than a Monetary Lien or a Permitted Exception, upon any of the Property;
or

(f)    Entered into any contract to do any of the foregoing, or any taken action
or omission that would reasonably be expected to result in any of the foregoing.

6.1.27    Reserved.

6.1.28    As of the Effective Date and at the Closing, the Inventory will be in
sufficient quantity and condition for the normal ownership, operation and
management of the Facilities in material compliance with Law and all
requirements of Governmental Authorities and consistent with past practices.

6.1.29    Attached as Schedule 6.1.29 is a list of insurance policies carried
and insurance coverages maintained by Seller and Existing Operator with respect
to the Property and the Facilities.

6.1.30    No Related Party of any Sale Participant: (i) has any contractual or
other claim, express or implied, or of any kind whatsoever against any Sale
Participant that would reasonably be expected to materially adversely effect the
Property or prevent the transactions contemplated herein; (ii) has any interest
in the Facilities or any of the Property; or (iii) is engaged in any other
transaction involving or relating to the ownership, operation or management of
the Facilities or the Property.

6.1.31    Reserved.

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6.1.32    When delivered pursuant to the terms of Section 7.15.2, the Accounts
Receivable Schedule shall be true, complete and accurate in all material
respects.

6.1.33    No representation, warranty or covenant made by or on behalf of any
Sale Participant in this Agreement, the Schedules or the Exhibits attached to
this Agreement, or any of the other Transaction Documents delivered pursuant to
Section 5.2 to which such Sale Participant is a party or is otherwise bound
contains an untrue statement of a material fact or omits to state a material
fact required to be stated herein or therein or is necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.

6.2    Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller and Existing Operator the following, as of the Effective Date
and as of the Closing, each of which representations and warranties is material
to and is relied upon by Seller and Existing Operator:

6.2.1    Purchaser is validly existing and in good standing under the laws of
the state of its formation, and is duly licensed and qualified to do business
and is in good standing in each jurisdiction in which the properties owned,
leased or operated by it or the operation of its business as currently conducted
makes such licensing or qualification necessary; and has the full and
unrestricted entity power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its assets as and in the
places they have been and now are owned, leased or operated, to execute this
Agreement and each other Transaction Document to which it is a party or is
otherwise bound, and has taken all corporate, partnership, limited liability
company or equivalent entity actions required for the execution and delivery of
the Transaction Documents to which it is a party or is otherwise bound, and the
consummation of the Transactions.

6.2.2    Purchaser’s execution, delivery and compliance with or fulfillment of
the terms and conditions hereof and of the other Transaction Documents to which
it is a party or is otherwise bound will not (i) conflict with or result in any
breach of the provisions of, or constitute a default under the articles of
incorporation, bylaws, articles of organization, operating agreement,
partnership agreement or other governing organizational or charter documents, as
the case may be, of Purchaser, (ii) conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default under, any contract
or instrument to which Purchaser is a party or by which Purchaser or its assets
is or are otherwise bound, (iii) result in a violation or breach of any legal
requirement applicable to Purchaser or by which Purchaser or its assets is or
are otherwise bound, or (iv) result in the breach or violation of any of the
warranties and representations made herein or in any other Transaction Document
by or on behalf of Purchaser. This Agreement is, and the other Transaction
Documents to which Purchaser is a party shall be, when executed and delivered
thereby, a valid and binding agreement, enforceable against Purchaser in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and
equitable principles and except that equitable remedies may be granted only in
the discretion of a court of competent jurisdiction. Purchaser has obtained all
required organizational approvals required for the execution and consummation of
this Agreement and the other Transaction Documents, and all transactions
contemplated hereby and thereby, to which they are a party or are otherwise
bound.

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6.2.3    There are no actions, claims, proceedings, litigation or governmental
investigations or condemnation actions or other legal or administrative
proceedings, or any orders, decrees or judgments in progress, pending or in
effect, or to Purchaser’s Knowledge, threatened against Purchaser, which, if
decided adversely, would reasonably be expected to (i) materially and adversely
restrain Purchaser’s ability to consummate the Transactions, or (ii) would or
would reasonably be expected to declare illegal, invalid or non-binding any of
Purchaser’s obligations or covenants to Seller and Existing Operator hereunder.

6.2.4    Purchaser is not a Prohibited Person.

6.2.5    To Purchaser’s Knowledge, the funds transferred by Purchaser to Seller
and Existing Operator under this Agreement are not the property of, or
beneficially owned, directly or indirectly, by a Prohibited Person or the
proceeds of specified unlawful activity as defined by 18 U.S.C. § 1956(c)(7).

6.2.6    Other than for the Healthcare Approvals, no consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with any applicable Governmental Authority is required to be obtained or
made by Purchaser in connection with the execution and delivery of this
Agreement, or the consummation of the Transactions, which Purchaser has not
already obtained or made.

6.2.7    No representation, warranty or covenant made by Purchaser in this
Agreement, the Schedules or the Exhibits attached to this Agreement, or any of
the other Transaction Documents delivered pursuant to Section 5.3 to which
Purchaser is a party or is otherwise bound contains an untrue statement of a
material fact or omits to state a material fact required to be stated herein or
therein or is necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.

6.2.8    EXCEPT AS EXPRESSLY PROVIDED IN THE “SELLER’S REPRESENTATIONS” OR AS IS
EXPRESSLY REPRESENTED AND WARRENTED IN THE MTA BY MANAGER, PURCHASER
ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON: (I)
PURCHASER’S INDEPENDENT INSPECTION AND INVESTIGATION OF THE PROPERTY BASED ON
PURCHASER’S EXTENSIVE EXPERIENCE IN AND KNOWLEDGE OF REAL PROPERTIES AND
ASSISTED LIVING FACILITY OPERATIONS IN THE VICINITY OF THE REAL PROPERTY; (II)
THE OPINIONS AND ADVICE CONCERNING THE PROPERTY OF CONSULTANTS AND\OR AGENTS
ENGAGED BY PURCHASER; AND (III) THE REPRESENTATIONS AND WARRANTIES BY EACH SALE
PARTICIPANT AND MANAGER IN THIS AGREEMENT OR THE MTA TO WHICH THEY ARE A PARTY.

UPON THE CLOSING DATE, EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY IN THIS
AGREEMENT OR THE MTA, PURCHASER SHALL ACCEPT THE PROPERTY, IN THEIR “AS IS”,
“WHERE IS” CONDITION OR STATUS AS OF THE CLOSING DATE AND WITHOUT ANY
REPRESENTATION OR WARRANTY OTHER THAN THOSE SET FORTH HEREIN OR IN THE MTA
REGARDING THEIR CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY,
OR COMPLIANCE WITH LAWS, ORDINANCES OR REGULATIONS, OR WITH ANY OTHER WARRANTY,

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EXPRESS OR IMPLIED BY LAW OR OTHERWISE. PURCHASER ACKNOWLEDGES AND AGREES THAT,
EXCEPT FOR “SELLER’S REPRESENTATIONS”, NEITHER SELLER NOR EXISTING OPERATOR IS
MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER WITH RESPECT TO THE PROPERTY.

ARTICLE VII
ADDITIONAL COVENANTS/AGREEMENTS OF SELLER AND PURCHASER

7.1    Interim Operations. For the period from the Effective Date until the
Closing Date, Seller and Existing Operator shall (and they shall use
commercially reasonable efforts to cause Manager to) use commercially reasonable
efforts to operate, maintain and manage the Facilities and the remainder of the
Property in the ordinary course consistent with past practice; provided,
however, that, except as Purchaser in its sole discretion otherwise approves, in
advance, in writing, or as otherwise expressly required hereunder, Seller and
Existing Operator shall (and they shall use commercially reasonable efforts to
cause Manager to): (i) operate, maintain and manage the Facilities and the
remainder of the Property in a manner consistent with all Laws; (ii) maintain
the Property in good order and condition (normal wear and tear excepted) to the
extent required to operate the Facilities consistent with past practices and in
material compliance with all Laws; (iii) materially comply with all Laws with
respect to the Property and the operation of the Facilities; (iv) timely pay all
payments due on or before the Closing Date under, and otherwise maintain and
comply with, all Material Contracts and all Resident Agreements; (v) keep in
full force and effect (and renew as applicable) present insurance policies
through the Closing Date; (vi) maintain in good standing all material Permits;
(vi) not enter into any contracts, agreements or leases (or amendments thereto)
which would have had to be disclosed on any scheduled hereto had they been in
effect prior to the Effective Date; and (viii) except as expressly permitted
hereunder, not take any action that would cause any of the changes, events or
conditions described in Section 6.1.26 hereto.

7.2    Healthcare Approvals. Purchaser will use commercially reasonable efforts
to obtain or satisfy or cause to be obtained or satisfied, as applicable, all
Healthcare Approvals promptly following the date hereof. Without limiting the
foregoing, as soon as practicable, but in no event later than ten (10) Business
Days following the Effective Date, and subject to Seller and Existing Operator
having provided such documents and information as reasonably requested by
Purchaser in connection with same, Purchaser shall use commercially reasonable
efforts to submit or cause to be submitted filings, notifications, applications,
and/or submissions with AHCA to initiate obtaining the Healthcare Approvals.
Without limiting the foregoing or any of the other provisions of this Section
7.2, Purchaser shall act in good faith and exercise all due diligence to
expeditiously procure all Healthcare Approvals, subject to Seller’s and Existing
Operator’s reasonable cooperation in connection therewith. Purchaser shall
dedicate and devote reasonable resources toward obtaining all Healthcare
Approvals, and shall timely make all required submissions and deliveries to AHCA
in connection therewith and promptly respond to all requests of AHCA. Seller and
Existing Operator agree to cooperate with Purchaser, as reasonably requested by
Purchaser, in connection with Purchaser’s efforts to obtain all Healthcare
Approvals. Purchaser agrees to promptly notify, consult with, and keep Seller
reasonably advised as to the status of the matters contemplated above in this
Section 7.2. Notwithstanding anything to the contrary contained in this
Agreement, Purchaser shall be

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responsible for all costs and expenses related to its obtaining the Healthcare
Approvals, other than the costs of Seller and Existing Operator incurred by
providing the cooperation stated herein. For its part, Seller and Existing
Operator shall file with AHCA written notices of the transactions and changes of
ownership and operations contemplated hereby in accordance with Fla. Stat. Ann
§§ 408.807(1) & 409.907(6)(b) (regarding notices from transferors), including
the timing requirements set forth therein. Each of the Healthcare Approvals will
be deemed to have been obtained upon the occurrence of any of the following
events (each, an “Approval Event”): (i) receipt of the Required Operating
Licenses, (ii) the receipt of confirmation from AHCA or its applicable subagency
in writing or verbally (if such verbal confirmation is confirmed in a writing to
AHCA or such subagency) that the parties are authorized to proceed with the
Transactions and changes of ownership and operations contemplated hereby (each
such confirmation, an “Agency Confirmation”) or (iii) where AHCA or such
applicable subagency has failed to respond to a written communication seeking
the Required Operating Licenses or Agency Confirmation, upon a subsequent
written communication to AHCA or such subagency affirmatively stating that no
further action by the parties hereto is required prior to the consummation of
the transactions and changes of ownership and operations contemplated hereby and
in which AHCA or such subagency is notified that the parties hereto are
proceeding with same as disclosed unless the parties are informed otherwise by
AHCA or such subagency prior to the Closing. Following an Approval Event and
prior to Closing, the condition to obtain or satisfy or cause to be obtained or
satisfied, as applicable, all Healthcare Approvals will no longer be deemed
satisfied as to such Healthcare Approval if (i) AHCA or its applicable subagency
provides written or verbal withdrawal of authorization (if such verbal
withdrawal of authorization is confirmed in a writing to AHCA or such subagency)
to proceed with the transactions and changes of ownership and operations
contemplated hereby or (ii) in a situation where such condition was previously
believed to be satisfied, AHCA or such subagency notifies either party in
writing or verbally (if such verbal notification is confirmed in a writing to
AHCA or such subagency) that (A) formal or additional filings are required for
AHCA or such subagency to provide authorization to proceed with the transactions
and changes of ownership and operations contemplated hereby, or (B) that the
matter requires further consideration or review before AHCA or such subagency
will provide such authorization.

7.3    Reserved.

7.4    Taxes. Seller and Existing Operator shall timely file all federal, state
and local Tax Returns and, to the extent applicable, estimates and reports, and
pay all amounts then due for all taxes for all periods through and including the
Closing Date to the extent due and payable and otherwise to the extent necessary
to transfer the Property and the Facilities in accordance with the terms of this
Agreement. Furthermore, Seller and Existing Operator shall give all required
notices and make all required filings, on behalf of itself and Buyer when
required, of the transactions contemplated hereby. In addition, Purchaser,
Seller and Existing Operator shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with Tax matters related
to the Property, including any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon the
other party’s request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.

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7.5    MSA. Seller’s and Existing Operator’s obligations to use commercially
reasonable efforts to cause the Manager to perform certain specified actions
under this Agreement shall include enforcing all applicable terms and all of
Manager’s applicable obligations contained in the Management Agreements.

7.6    No Shop. At no time between the Effective Date and the Closing Date shall
Seller, Existing Operator or any of its officers, directors, employees, agents
or Affiliates (or any of their respective agents), directly or indirectly,
solicit, initiate, encourage, participate in any negotiation or discussion,
enter into any agreement in respect of the Property, the Facilities or any
Seller or Existing Operator, or cooperate with any person or entity regarding
any Acquisition Proposal. The term “Acquisition Proposal” shall mean any
proposal (other than a proposal by Purchaser) for the acquisition of all or a
substantial portion of the equity interests or assets of any Facility, any
Property or any Seller or Existing Operator, or for a merger, consolidation or
other business combination pursuant to which any other person or entity would
acquire any Facility, any Property or any Seller or Existing Operator, or any
substantial equity interest in any Facility, the Property or Seller or Existing
Operator. Seller and Existing Operator each represents and warrants that, prior
to the Effective Date, they have ceased and caused to be terminated all
discussions or negotiations with any parties other than Purchaser with respect
to any Acquisition Proposal, and has terminated access of any such parties to
any information with regard to the Property and the Facilities, and any such
parties have returned any such information previously made available by or on
behalf of Seller or Existing Operator.

7.7    No Disposition of Property. Except for Fixtures and Tangible Personal
Property depleted and/or replaced in the ordinary course, Seller and Existing
Operator shall not (and shall use commercially reasonable efforts to cause
Manager not to) sell, lease or otherwise dispose of or distribute any of the
Property, and, to the extent inventory is depleted in the ordinary course,
Seller and Existing Operator shall (and shall use commercially reasonable
efforts to cause Manager to), in the ordinary course and to the extent
consistent with past practices, restock and replenish any portion of such
inventory consumed or used between the Effective Date and the Closing Date with
Property of comparable quality and quantity.

7.8    Financial Information. From the Effective Date and through the Closing,
Seller and Existing Operator shall deliver to Purchaser not later than the
thirtieth (30th) day of the next succeeding calendar month (i)
internally-prepared, unaudited monthly individual Facility financial statements
(including a balance sheet and detailed income statement) showing current month
and year-to-date data; (ii) accounts receivable aging; (iii) month and
year-to-date capital expenditures; and (iv) updated resident rolls. The
financial statements delivered by Seller and Existing Operator pursuant to this
Section shall be prepared on a basis consistent with the Financial Statements.

7.9    Reserved.

7.10    Reserved.

7.11    Resident Records.

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7.11.1    From and after the Closing, Purchaser shall cause the JV Partner to
retain possession of all Resident Records for the period of time required by Law
but no less than 10 years from the date of discharge of any Resident, and,
subject to Law, shall provide reasonable access thereto to Seller and Existing
Operator during such period in connection with a valid business purpose and upon
reasonable advance notice and to permit Seller and Existing Operator to obtain
copies thereof, upon request. Prior to the Closing, Seller and Existing Operator
may, subject to Law, make copies of any Resident Records.

7.11.2    At least ten (10) Business Days prior to the Closing Date, Existing
Operator shall (and shall use commercially reasonable efforts to cause Manager
to) deliver to Purchaser and JV Partner customer data consisting of the names of
all Residents, the names and addresses of the Residents’ responsible parties and
such further information as Purchaser or JV Partner may reasonably require in
order for the JV Partner to be able to assume full operation of the Facilities
and full accounting functions in connection therewith on the Closing Date.

7.11.3    Prior to the Closing, subject to any restrictions under Law, Seller
and Existing Operator may make copies, at its expense, of any Books and Records.

7.12    Recoupment Claims. Seller and Existing Operator, on the one hand, and
Purchaser on the other each hereto agree (and each shall use commercially
reasonable efforts to cause Manager and the JV Partner, respectively) to notify
the other within five (5) business days after receipt of any notice of any
Governmental Authority or its agent with respect to any of the following,
relating to periods prior to the Closing: (i) an alleged Medicaid overpayment,
or any other recoupment or adjustment to reimbursement, (ii) an alleged
underpayment of any tax or assessment, or (iii) any other governmental or
Third-Party Payor claims relating to an adjustment to reimbursement or an
assessment (collectively “Recapture Claim”). For the avoidance of doubt, the
failure to provide notification of a Recapture Claim within the foregoing
timeframe shall in no way affect a party’s rights to indemnification with
respect thereto. In the event Seller, Existing Operator or Manager fails to
pursue any issue or issues relating to appeal of a Recapture Claim relating to
an adjustment to reimbursement or an assessment, Purchaser may (and may permit
the JV Partner to) pursue an appeal of such issue or issues and Seller and
Existing Operator shall (and they shall use commercially reasonable efforts to
cause Manager to) reasonably cooperate in such appeal.

7.13    Surveys; Resolution of Audit Deficiencies; Cooperation. Seller and
Existing Operator shall (and they shall use commercially reasonable efforts to
cause Manager to) provide to Purchaser, within two (2) Business Day of receipt
by them, any items related to or included in any Licensing Surveys and Audits
with respect to the Facilities between the Effective Date and the Closing Date.

7.14    Medicaid Provider Agreements.

7.14.1    For any periods following the Closing that Purchaser is not yet able
to bill under their Medicaid Agreements, or any waiver agreements thereunder
(collectively, the “Medicaid Provider Agreements”), Purchaser shall not bill
under Seller’s or Existing Operator’s Medicaid Provider Agreements unless
permitted to do so by AHCA. Seller and Existing Operator shall (and, as
applicable, shall use commercially reasonable efforts to cause

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Manager to) forward to Purchaser periodically (and in any event, no less
frequently than monthly) any payments received with respect to the Medicaid
Provider Agreements for services provided by Purchaser or its Affiliates
following the Closing Date.

7.14.2    Seller and Existing Operator shall (and, as applicable, shall use
commercially reasonable efforts to cause Manager to) deliver to Purchaser a
list, sorted by Facility, of all transfer agreements, whether oral or written,
between any Facility, on the one hand, and hospitals, on the other hand
(“Transfer Agreements”), together with a true and complete copy of each such
written Transfer Agreement in Seller’s, Existing Operator’s or Manager’s
possession, relating to transfer arrangements currently in place. In addition,
Seller and Existing Operator shall (and, as applicable, shall use commercially
reasonable efforts to cause Manager to) deliver to Purchaser a list, sorted by
Facility, of all Medicaid Provider Agreements, whether oral or written, between
any Facility, on the one hand, and Third Party Payor Programs, on the other
hand, together with a true and complete copy of each such written Medicaid
Provider Agreements in Seller’s, Existing Operator’s or Manager’s possession,
relating to Third Party Payor Programs currently in place.

7.15    Residents Rents; Accounts Receivable.

7.15.1    Prior to the Closing, except as provided in this Section 7.15,
Existing Operator shall (or shall use commercially reasonable efforts to cause
Manager to) bill the Residents in the ordinary course of business for amounts
due under Residency Agreements and the JV Partner shall (and Purchaser shall
cause the JV Partner to) assume responsibility for the billing of such amounts
on and after the Closing. The parties acknowledge that private-pay Residents are
billed monthly in advance on or about the last day of the preceding calendar
month. Existing Operator shall (or shall use commercially reasonable efforts to
cause Manager to) bill private-pay Residents for the calendar month ending prior
to the Closing, but not for any calendar month after the Closing. JV Partner
shall (and Purchaser shall cause the JV Partner to) bill Residents for those
private pay items that are billed in arrears (including, if applicable, for
items such as haircuts, guest meals, therapy services and other similar items)
attributable to the calendar month of the Closing; provided, however Existing
Operator shall (or they shall use commercially reasonable efforts to cause
Manager to) bill Residents for such items for the calendar month immediately
preceding the Closing. Regardless of which party bills the Residents or Third
Party Payor Programs and regardless of when received, the portion of all
Resident rents and service fees allocable to the time period before the Closing
shall be allocated to Existing Operator, and the portion thereof allocable to
the time period on and after the Closing shall be allocable to Purchaser and the
JV Partner, as applicable, and will be accounted for as part of the
reconciliation process set forth in Section 5.6.

7.15.2    Not earlier than five (5) days prior to the Closing, Existing Operator
shall (or they shall use commercially reasonable efforts to cause Manager to)
deliver to JV Partner a schedule that accurately reflects in all material
respects all of the outstanding Accounts Receivable with respect to the
Facilities as of such date (the “Accounts Receivable Schedule”). As soon as
practicable after the Closing, Existing Operator and the JV Partner shall (and
Seller, Existing Operator and Purchaser shall use commercially reasonable
efforts to cause Manager and the JV Partner, respectively, to) collectively
update and finalize the Accounts Receivable Schedule as of the day prior to the
Closing Date.

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7.15.3    To the extent permitted by law and the applicable Third Party Payor
Program, the JV Partner in the name and on behalf of Existing Operator shall
(and Purchaser shall cause the JV Partner to) bill Third Party Payor Programs
and applicable Government Authorities for services provided by Existing Operator
or Manager, as applicable, for the last full calendar month ended prior to the
Closing. Commencing the first calendar day after Closing, the JV Partner shall
(and Purchaser shall cause the JV Partner to) be responsible for and agrees to
use its commercially reasonable efforts to maximize collection of the Accounts
Receivables on behalf of and for the account of Existing Operator, and Existing
Operator shall (and shall use commercially reasonable efforts to cause Manager
to) cooperate reasonably with the JV Partner in connection with the same. Within
ten (10) Business Days of receipt, Existing Operator shall (or shall use
commercially reasonable efforts to cause Manager to) deliver to the JV Partner
copies of any correspondence and documents relating to the Accounts Receivables
of Existing Operator not previously available for delivery. Within ten (10)
Business Days of receipt, the JV Partner shall (and Purchaser shall cause the JV
Partner to) deliver to Existing Operator copies of any and all correspondence
and documents relating to its Accounts Receivables not previously provided
thereto. The JV Partner shall have no obligation to and shall not engage any
third party to pursue collection activities.

7.15.4    Seller and Existing Operator shall retain all rights in and title to
all of their respective Accounts Receivable. The JV Partner, on the one hand,
and Seller or Existing Operator, on the other hand, shall (and Purchaser and
Seller/ Existing Operator shall use commercially reasonable efforts to cause the
JV Partner and Manager, respectively, to) each deliver periodically (and in any
event, no less frequently than monthly) to the other any payments actually
received by such party with respect the other parties Accounts Receivable.
Seller and Existing Operator shall (and they shall use commercially reasonable
efforts to cause Manager to) notify the JV Partner prior to engaging any third
party to pursue collection activities with respect to such Accounts Receivable.
For the period from the Effective Date until the Closing Date, Seller and
Existing Operator may continue their respective past practices, including
eviction practices, with respect to the collection of delinquent rents and
service fees of Residents.

7.15.5    Reserved.

7.15.6    Reserved.

7.15.7    Reserved.

7.15.8    Each party agrees that they will use commercially reasonable efforts
to (and Purchaser and Seller/Existing Operator shall use commercially reasonable
efforts to cause the JV Partner and Manager, respectively, to) provide each
other with any information reasonably required to enable either party to
complete its billing to Residents and Third Party Payor Programs.

7.16    Reserved.

7.17    Reserved.

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7.18    Pre-Closing Access. Subject to prior notice to Seller (which may be by
email), during the one (1) week period prior to the Closing Date, Seller and
Existing Operator agree to (and shall use commercially reasonable efforts to
cause Manager to) permit the employees and representatives of the JV Partner to
be present at the Facilities at scheduled times to, as applicable and reasonably
desired by the JV Partner, commence installation of time clocks, computers,
billing, accounting and security systems, and do such other things as may be
reasonably necessary to effect an orderly transition of the Facilities (provided
that the parties agree to conduct such activities in a manner so as to not
disrupt the operations of the Facilities in any material manner).

7.19    Reserved.

7.20    Approvals and Consents. Prior to the Closing Date, and without limiting
the other provisions of this Agreement, Seller/Existing Operator and Purchaser
will (and they shall use commercially reasonable efforts to cause Manager and
the JV Partner, respectively, to) take all corporate and other action and
exercise their respective commercially reasonable efforts to fulfill their
respective obligations hereunder. In addition, Existing Operator shall (and
shall use commercially reasonable efforts to cause Manager to) use its
respective commercially reasonable efforts to obtain in writing, at its cost and
expense and in form and substance reasonably satisfactory to Purchaser as
promptly as possible, all Required Consents (other than the Healthcare Approvals
which under Section 7.2 are the responsibility of Purchaser) and Purchaser shall
(and shall cause the JV Partner to) reasonably cooperate with Seller’s and
Existing Operator’s efforts to obtain such consents.

7.21    Reserved.

7.22    Information Systems, Records in Electronic Form, Software and Data.
Seller and Existing Operator shall use commercially reasonable efforts to
transfer all of their transferrable, non-proprietary software licenses and all
current data in fully operational form for use by the JV Partner as of the
Closing Date. At least ten (10) days prior to the Closing Date, Seller and
Existing Operator shall provide the JV Partner and its representatives with
access to Seller’s and Existing Operator’s hardware and transferrable,
non-proprietary software so that JV Partner can train its representatives in the
operation of such hardware and software.

7.23    Changes in Representations and Warranties.

7.23.1    Throughout the period from the Effective Date through and including
the Closing Date, Seller and Existing Operator shall give Purchaser prompt
written notice of (a) any representation and warranty made by them in this
Agreement which they hereafter learn was inaccurate or incorrect when originally
made, (b) any event, change or occurrence arising after the Effective Date which
would make any representation or warranty of Seller or Existing Operator
inaccurate or incorrect as of the time of such event, change or occurrence, and
(c) any event, change or occurrence arising after the Effective Date which is
reasonably anticipated to prevent Seller and Existing Operator from remaking any
representation or warranty set forth herein at Closing. The giving of any such
notices shall not limit or modify any rights of Purchaser hereunder arising in
the case of a breach of a representation or warranty by Seller or Existing
Operator.

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7.23.2    Throughout the period from the Effective Date through and including
the Closing Date, Purchaser shall give Seller prompt written notice of (a) any
representation and warranty made by Purchaser in this Agreement which Purchaser
hereafter learns was inaccurate or incorrect when originally made, (b) any
event, change or occurrence arising after the Effective Date which would make
any representation or warranty of Purchaser materially inaccurate or incorrect
as of the time of such event, change or occurrence, and (c) any event, change or
occurrence arising after the Effective Date which is reasonably anticipated to
prevent Purchaser from remaking any representation or warranty set forth herein
at Closing. The giving of any such notices shall not limit or modify any rights
of Seller hereunder arising in the case of a breach of a representation or
warranty by Purchaser.

7.24    Further Documentation.

7.24.1    Seller and Existing Operator agree that following the Closing Date,
upon the reasonable request by Purchaser, they will (and they use commercially
reasonable efforts to cause Manager to so) do, execute, acknowledge and deliver,
or cause to be done, executed, acknowledged and delivered, all such further
acts, deeds, assignments, transfers, conveyances and assurances as may be
reasonably required to fully assign, grant, transfer, convey, assure and confirm
to Purchaser (or designee thereof), all of the Property sold to the Purchaser
(or designee thereof) pursuant to this Agreement or to transition the operations
of the Facilities to the JV Partner; provided, however, that neither Seller nor
Existing Operator shall be required to assume any additional obligations or
liabilities beyond those assumed thereby under this Agreement and the other
agreements, certificates, instruments and other documents contemplated hereby or
by the Transactions.

7.24.2    Purchaser agrees that following the Closing Date, upon request by
Seller, Purchaser will (and will cause the JV Partner to so) do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, all such further acts, documents and assurances as may be reasonably
required, without enlarging or extending any obligations or liability of
Purchaser under this Agreement in any manner and without (except to the extent
required by this Agreement) requiring the expenditure of any funds by Purchaser
or the JV Partner which are not reimbursed by Seller or Existing Operator, to
fully consummate the transactions contemplated by this Agreement.

7.25    Management Transfer. Each of Seller, Existing Operator and Purchaser
agrees that (a) Manager, on the one hand, and the JV Partner, on the other hand,
shall use commercially reasonable efforts to enter into a Management Transfer
Agreement with respect to the Facilities on terms reasonably acceptable to each
of Manager and JV Partner (the “MTA”) no later than ten (10) Business Days after
the Effective Date, and (b) each of Seller, Existing Operator and Purchaser
shall use its commercially reasonable efforts to cause Manager and JV Partner to
comply with their obligations thereunder.

ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING

8.1    Purchaser’s Conditions to Closing. Purchaser’s obligation to consummate
the Transactions shall be subject to and conditioned upon the satisfaction and

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fulfillment of the following conditions precedent, provided Purchaser may, at
its sole option, waive any or all of these conditions, in whole or in part, in
writing or otherwise as provided in this Agreement:

8.1.1    All of the documents required to be delivered by or on behalf of Seller
and/or Existing Operator to Purchaser at the Closing pursuant to the terms and
conditions of Section 5.2 shall have been delivered in accordance with the terms
thereof;

8.1.2     Each of Seller’s Representations shall be true and correct in all
material respects (except those representations and warranties which are
qualified as to materiality, which shall be true and correct in all respects) on
and as of the Closing Date, with the same effect as though made on such date;

8.1.3    Subject to Purchaser’s payment of all title insurance premiums and
fees, the Title Company is irrevocably committed to issue a current ALTA owner’s
form of title insurance policy, or irrevocable and unconditional binder to issue
the same, with extended coverage for the Land and Improvements in the amount of
the Purchase Price, dated, or updated to, the date of the Closing, insuring, or
committing to insure, at its ordinary premium rates, Purchaser’s good and
marketable title in fee simple to the Land and Improvements and otherwise in
such form and with such endorsements as provided in the title commitment
approved by Purchaser pursuant to this Agreement, subject only to the Permitted
Exceptions;

8.1.4    Seller and each other Sale Participant shall have performed, in all
material respects, each of the covenants to be performed hereunder or under any
other Transaction Document to which such Person is a party or otherwise bound on
or prior to the Closing Date;

8.1.5    Neither Seller nor Existing Operator shall have filed for protection
under applicable bankruptcy or insolvency Laws or otherwise be a debtor in any
bankruptcy proceeding;

8.1.6    There shall not be in force any order, decree, judgment or injunction
of any Governmental Authority enjoining or prohibiting the consummation of the
Transactions or declaring illegal, invalid or nonbinding any of the material
covenants or obligations of the Seller or Existing Operator hereunder; and there
shall not be any pending litigation or, to the Knowledge of Purchaser, Seller or
Existing Operator, any litigation threatened in writing, which, if adversely
determined, would restrain the consummation of any of the Transactions or
declare illegal, invalid or nonbinding any of the material covenants or
obligations of the Seller or Existing Operator hereunder;

8.1.7    None of the following shall have occurred: (i) receipt by Seller,
Existing Operator or Purchaser of notice from AHCA or other Governmental
Authority of a termination, revocation, rescission, suspension, or refusal to
renew any Operating License or other Healthcare Approval or material Permit,
(ii) receipt by Seller, Existing Operator or Purchaser of notice from AHCA of a
so-called “fast-track” decertification or a survey finding of immediate jeopardy
at either Facility; or (iii) the imposition of a ban on admissions to either
Facility;

8.1.8     Purchaser shall have obtained the Healthcare Approvals in form and
substance reasonably acceptable to Purchaser, and Seller shall have provided
AHCA written

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notices of the transactions and changes of ownership and operations contemplated
hereby in accordance with the last sentence of Section 7.2;

8.1.9    The closing of the transactions contemplated by the Separate PSA shall
have occurred simultaneously with the Closing under this Agreement;

8.1.11    There shall not have occurred a Material Adverse Effect; and

8.1.12    (i) Manager shall have performed, in all material respects, each of
the covenants to be performed by Manager under the MTA prior to the Closing, and
(ii) each of Manager’s representations and warranties in the MTA shall be true
and correct in all material respects (except those representations and
warranties which are qualified as to materiality, which shall be true and
correct in all respects) on and as of the Closing Date, with the same effect as
though made on such date.

Subject to the terms of Section 4.5, if any condition set forth in this Section
8.1 is not satisfied at or prior to the Outside Closing Date (except with
respect to Section 8.1.3, Section 8.1.6 and Section 8.1.8 by reason of a default
by Purchaser hereunder or with respect to Section 8.1.9 by reason of a default
by Purchaser or its Affiliates under the Separate PSA), Purchaser may (a) waive
any of the foregoing conditions and proceed to Closing with no offset or
deduction from the Purchase Price, (b) terminate this Agreement, in which case
Purchaser shall receive a return of the Deposit from the Escrow Agent and
neither party shall have any further obligation or liability to the other except
with respect to those provisions of this Agreement which expressly survive a
termination of this Agreement, or (c) if such failure constitutes a default by
Seller and/or Existing Operator hereunder, exercise any of its remedies pursuant
to Section 10.2.

8.2    Seller’s Conditions to Closing. Seller’s and Existing Operator’s
obligation to close under this Agreement shall be subject to and conditioned
upon the satisfaction and fulfillment of the following conditions precedent,
provided Seller and Existing Operator may, at their sole option, waive any or
all of these conditions, in whole or in part, in writing or otherwise as
provided in this Agreement:

8.2.1    All of the documents and funds required to be delivered by Purchaser to
Seller or Escrow Agent at the Closing pursuant to the terms and conditions of
Section 5.3 shall have been so delivered;

8.2.2    Each of the representations and warranties of Purchaser contained
herein shall be true and correct in all material respects (except those
representations and warranties which are qualified as to materiality, which
shall be true and correct in all respects) on and as of the Closing Date with
the same effect as though made on such date;

8.2.3    Purchaser shall have performed, in all material respects, each of the
covenants to be performed hereunder or under any other Transaction Document to
which Purchaser is a party or otherwise bound on or prior to the Closing Date;

8.2.4    Purchaser shall not have filed for protection under applicable
bankruptcy or insolvency Laws or otherwise be a debtor in any bankruptcy
proceeding;

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8.2.5    There shall not be in force any order, decree, judgment or injunction
of any Governmental Authority enjoining or prohibiting the consummation of the
Transactions or declaring illegal, invalid or nonbinding any of the material
covenants or obligations of the Purchaser hereunder; and there shall not be any
pending litigation or, to the Knowledge of either Purchaser or Seller, any
litigation threatened in writing, which, if adversely determined, would restrain
the consummation of any of the Transactions or declare illegal, invalid or
nonbinding any of the material covenants or obligations of the Purchaser
hereunder;

8.2.6    Purchaser shall have obtained the Healthcare Approvals; and

8.2.7    The closing of the transactions contemplated by the Separate PSA shall
have occurred simultaneously with the Closing under this Agreement.

8.2.8 (i) JV Partner shall have performed, in all material respects, each of the
covenants to be performed by JV Partner under the MTA prior to the Closing, and
(ii) each of JV Partner’s representations and warranties in the MTA shall be
true and correct in all material respects (except those representations and
warranties which are qualified as to materiality, which shall be true and
correct in all respects) on and as of the Closing Date, with the same effect as
though made on such date.

Subject to the terms of Section 4.5, if any condition set forth in this Section
8.2 is not satisfied at or prior to the Outside Closing Date (except with
respect to Section 8.2.5 or Section 8.2.6 by reason of a default by Seller
hereunder or with respect to Section 8.2.7 by reason of a default by Seller or
its Affiliates under the Separate PSA), Seller may (a) waive any of the
foregoing conditions (other than the condition set forth in Section 8.2.6) and
proceed to Closing, (b) terminate this Agreement, in which case Seller shall be
entitled to receive and retain the Deposit from the Escrow Agent and neither
party shall have any further obligation or liability to the other except with
respect to those provisions of this Agreement which expressly survive a
termination of this Agreement, or (c) if such failure constitutes a default by
Purchaser hereunder, exercise any of its remedies pursuant to Section 10.1.

ARTICLE IX
INDEMNIFICATION & SURVIVAL PROVISIONS

9.1    Effective Date; Survival. All of the Seller’s Representations and the
Purchaser’s Representations are made as of the Effective Date and shall be
deemed remade as of the Closing Date pursuant to Seller’s Bring Down Certificate
and Purchaser’s Bring Down Certificate, as applicable. All of the Seller’s
Representations and the Purchaser’s Representations and Manager’s
representations and warranties under the MTA shall survive Closing for a period
of eighteen (18) months after the Closing Date (the “Outside Claim Date”) except
for (a) claims as to which notice has been given prior to such date and which
are pending on such date, (b) claims based upon representations and warranties
set forth in Sections 6.1.1 and 6.1.8(b) hereof or Seller’s and Existing
Operator’s indemnification obligations with respect to Program Reimbursements,
and claims based upon representations and warranties set forth in Sections
6.2.1, or 6.2.2 or the first sentence of Section 9.9, and claims based on
Manager’s

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representations and warranties under Sections 4.1 and 4.2 of the MTA or JV
Partner’s representations and warranties under Sections 3.1 and 3.2 of the MTA
(collectively, the “Fundamental Representations”), which shall survive without
limitation, and (c) claims based upon representations and warranties set forth
in Sections 6.1.15 or 6.1.17 and claims based on Manager’s representations and
warranties under Section 4.4 of the MTA, which shall survive until the
expiration of the applicable statute of limitations. The covenants contained in
this Agreement shall survive the Closing until performed in accordance with
their terms (unless and to the extent performance thereof of properly waived).
Any claim by Seller, Existing Operator or Purchaser with respect to any breach
of the Seller’s Representations or the Purchaser’s Representations or Manager’s
representations and warranties under the MTA, respectively, shall be effective
and valid only if made after Closing in writing (specifying in reasonable
detail, to the extent then known, the nature of the claim and the factual and
legal basis for any such claim, and the provisions of this Agreement upon which
such claim is made) against the other party on or prior to the Outside Claim
Date. Notwithstanding anything to the contrary contained herein, no individual
claim pursuant to Sections 9.2(i) or 9.3(i) shall be permitted hereunder unless
the amount of such claim (or series of related claims) shall exceed Twenty Five
Thousand and no/100 Dollars ($25,000.00) (any such claim, a “De Minimis Claim”),
other than claims in respect of a breach of or inaccuracy in a Fundamental
Representation.

9.2    Indemnification by Seller. Subject to the other provisions of this
Article IX, after the Closing, Seller and Existing Operator shall indemnify and
hold harmless Purchaser, the JV Partner and their respective Affiliates, and
their and their respective Affiliates’ members, managers, partners, directors,
officers, shareholders, employees and agents (hereinafter referred to
individually as a “Purchaser Indemnified Person” and collectively as “Purchaser
Indemnified Persons”) from and against any and all Damages suffered by any of
the Purchaser Indemnified Persons (without duplication) resulting from or
arising out of (i) any breach of or inaccuracy in any of the Seller’s
Representations or any of the representations of Manager under the MTA, (ii) any
Sale Participant’s or Manager’s breach of or failure to perform when due any
covenant required to be performed thereby under this Agreement, the MTA or any
other Transaction Document to which such Sale Participant or Manager is a party
or otherwise bound, (iii) the ownership, operation or management of any of the
Facilities by any Sale Participant or its Affiliate, including any manager
engaged by Seller, Existing Operator or their respective Affiliate pursuant to
any Operating License in the name of Seller, Existing Operator or their
respective Affiliate, or any operator or manager engaged by Seller, Existing
Operator or their respective Affiliate, or (iv) any Excluded Asset or Excluded
Liability (collectively, “Seller Indemnifiable Damages”).

9.3    Indemnification by Purchaser. Subject to the other provisions of this
Article IX, after the Closing, Purchaser shall indemnify and hold harmless
Seller, Existing Operator and their respective Affiliates, and their respective
members, managers, partners, directors, officers, shareholders, employees and
agents (hereinafter referred to individually as a “Seller Indemnified Person”
and collectively as “Seller Indemnified Persons”) from and against any and all
Damages suffered by any of the Seller Indemnified Persons (without duplication)
resulting from or arising out of (i) any breach of or inaccuracy in any of the
Purchaser Representations or any of the representations of JV Partner under the
MTA, (ii) Purchaser’s or JV Partner’s breach of or failure to perform when due
any covenant required to be performed thereby under this Agreement, the MTA or
any other Transaction Document to which

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Purchaser or JV Partner is a party or otherwise bound, and (iii) the ownership,
operation or management of any of the Facilities by Purchaser, its Affiliate or
any manager engaged by Purchaser or its Affiliate, pursuant to any Operating
License in the name of Purchaser, its Affiliate or any operator or manager
engaged by Purchaser or its Affiliate (collectively, “Purchaser Indemnifiable
Damages”).

9.4    Limitations on Indemnification. Notwithstanding anything to the contrary
contained in this Agreement:

9.4.1    Other than claims in respect of a breach of or inaccuracy in a
Fundamental Representation, (i) in no event shall Seller or Existing Operator be
liable, or required to make any payment pursuant to Section 9.2(i), for any
Seller Indemnifiable Damages suffered by any of the Purchaser Indemnified
Persons (a) for any De Minimis Claims, and (b) unless and until the aggregate
dollar amount of all such Seller Indemnifiable Damages (together with all
damages indemnifiable pursuant to Section 9.2(i) of the Separate PSA, as well as
any De Minimis Claims) exceeds Five Hundred Eighty Five Thousand and no/100
Dollars ($585,000.00) (such amount, the “Basket Amount”), and then only to the
extent of such excess and (ii) the maximum aggregate liability of Seller and
Existing Operator in respect of all claims or rights of action against Seller
and/or Existing Operator arising under or pursuant to Section 9.2(i) of this
Agreement (together with all damages indemnifiable pursuant to Section 9.2(i) of
the Separate PSA) shall be limited to, and not exceed, Six Million and no/100
Dollars ($6,000,000.00) (the “Liability Cap”). Notwithstanding the foregoing, if
the Separate PSA is terminated, but the Closing occurs under this Agreement, the
Basket Amount and the Liability Cap shall be adjusted to Three Hundred
Forty-Eight Thousand Five Hundred Eleven and no/100 Dollars ($348,511.00) and
Three Million Five Hundred Seventy-Four Thousand Four Hundred Sixty-Eight and
no/100 Dollars ($3,574,468.00), respectively.

9.4.2    Other than claims in respect of a breach of or inaccuracy in a
Fundamental Representation, (i) in no event shall Purchaser be liable for, or
required to make any payment pursuant to Section 9.3(i), for any Purchaser
Indemnifiable Damages suffered by the Seller Indemnified Persons (a) for any De
Minimis Claims, and (b) unless and until the aggregate dollar amount of all such
Purchaser Indemnifiable Damages under this Agreement (together with all similar
damages indemnifiable pursuant to Section 9.3(i) of the Separate PSA, but
excluding De Minimis Claims) exceeds the Basket Amount, and then only to the
extent of such excess, and (ii) the maximum aggregate liability of Purchaser in
respect of all claims or rights of action against Purchaser arising under or
pursuant to Section 9.3(i) of this Agreement (together with all similar damages
indemnifiable pursuant to Section 9.3(i) of the Separate PSA) shall be limited
to, and not exceed, the Liability Cap.

9.5    Indemnification Procedures. The party or parties making a claim for
indemnification under this Article IX shall be, for purposes of this Agreement,
referred to as the “Indemnified Person” and the party or the parties against
whom such claims are asserted under this Article IX shall be, for purposes of
this Agreement, referred to as the “Indemnifying Person.” All claims by any
Indemnified Person under this Article IX for Third Party Claims shall be
asserted and resolved as follows:

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9.5.1    In the event of any claim, demand, suit, action, arbitration,
investigation, inquiry or proceeding brought by a third party against any
Indemnified Person which is covered by the indemnification provisions of this
Article IX (in each such case, a “Third Party Claim”), the Indemnified Person
shall promptly cause written notice of the assertion of such Third Party Claim
to be forwarded to the Indemnifying Person (a “Notice of Third Party Claim”).
The failure of the Indemnified Person to deliver promptly to the Indemnifying
Person a Notice of Third Party Claim shall not release, waive or otherwise
affect the Indemnifying Person’s obligations with respect thereto except to the
extent that the Indemnifying Person is actually prejudiced as a result of such
failure. Subject to Section 9.5.2, the Indemnifying Person on behalf of the
Indemnified Person shall have the right to elect to assume control of the
defense of any Third Party Claim with counsel reasonably acceptable to the
Indemnified Person. The costs and expenses incurred by the Indemnifying Person
in connection with such defense (including reasonable out-of-pocket attorneys’
fees, other professionals’ and experts’ fees and court or arbitration costs)
shall be paid by the Indemnifying Person (subject to the Basket Amount and
Liability Cap, as applicable). In the event of a conflict of interest between
the Indemnifying Person and the Indemnified Person as to any matter for which
indemnification is required hereunder, the Indemnified Person may engage counsel
of its own choice to participate in such defense (which counsel shall be
reasonably satisfactory to the Indemnifying Party) and at the expense of the
Indemnifying Person (which expense shall be subject to the Basket Amount and the
Liability Cap, as applicable), in the defense of any Third Party Claim.

9.5.2    With respect to the defense of any Third Party Claim, the Indemnifying
Person shall not be entitled to continue control of such defense and shall pay
the costs and expenses incurred by the Indemnified Person in connection with
such defense if the Indemnifying Person fails to assume control of the defense
or materially fails to defend such claim.

9.5.3    If the Indemnifying Person has the right to and does elect to defend
any Third Party Claim, the Indemnifying Person shall: (i) conduct the defense of
such Third Party Claim actively and diligently and keep the Indemnified Person
reasonably informed of material developments in the Third Party Claim at all
stages thereof and (ii) to the extent practicable, permit the Indemnified Person
and its counsel to confer with the Indemnifying Person regarding the conduct of
the defense thereof. Purchaser, Seller and Existing Operator will make available
to each other and each other’s counsel and accountants, without charge, all of
their and their Affiliates’ books and records relating or responsive to the
Third Party Claim, and each party (at its own expense) will render to the other
party such assistance as may be reasonably required in order to ensure the
proper and adequate defense thereof and shall furnish such records, information
and testimony and attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested by the other party in
connection therewith; provided, however, the Indemnified Person shall not have
an obligation to disclose any information or documents, that are proprietary,
subject to confidentiality restrictions (unless the recipient of such
information signs a confidentiality agreement reasonably acceptable to the
disclosing Indemnified Person), or privileged (including pursuant to any
attorney-client privilege). The Indemnified Person and the Indemnifying Person
shall render, and shall cause their respective employees to render, to each
other, at the sole cost and expense of the Indemnifying Person (with costs and
expenses being subject to the Liability Cap) such other assistance and
cooperation as may reasonably be required to ensure the proper and adequate
defense of such claim or demand.

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9.5.4    If the Indemnifying Person has the right to and does elect to defend
any Third Party Claim, the Indemnifying Person shall have the right to enter
into any settlement of a Third Party Claim without the consent of the
Indemnified Person provided that (i) no amount in excess of the Basket Amount
(if applicable) is payable by such Indemnified Person in connection with such
settlement, (ii) such settlement does not involve any injunctive or other
equitable relief or the contractual equivalent thereof binding upon such
Indemnified Person, and (iii) such settlement expressly and unconditionally
releases such Indemnified Person from all liabilities and obligations with
respect to such claim, with prejudice; provided, further, that no settlement by
the Indemnifying Person of a Third Party Claim shall limit or reduce the right
of the Indemnified Person to indemnity hereunder for all Damages they may incur
arising out of or resulting from the Third Party Claim to the extent such
Indemnified Person is otherwise entitled to be indemnified pursuant to this
Article IX.

9.5.5    Subject to the limitations set forth in this Article IX, if an
Indemnified Person wishes to make an indemnification claim under this Article IX
that is not a Third Party Claim, such Indemnified Person shall deliver a written
notice (an “Indemnification Claim Notice”) to the Indemnifying Person
(i) stating that an Indemnified Person has paid, incurred, suffered or
sustained, or reasonably anticipates that it may pay, incur, suffer or sustain
Damages, and (ii) specifying in reasonable detail (to the extent then known) any
Damages and the basis upon which indemnification is sought hereunder. The
Indemnified Person may update an Indemnification Claim Notice from time to time
to reflect any new information discovered with respect to the claim set forth in
such Indemnification Claim Notice. Except to the extent confidential or subject
to any privilege protection or other disclosure restriction, following the
delivery of an Indemnification Claim Notice, the Indemnified Person shall
provide the Indemnifying Person and its representatives and agents with such
documents and records as they may reasonably require, and reasonable access to
such personnel or representatives (including but not limited to the individuals
responsible for the matters that are subject of the Indemnification Claim
Notice) as they may reasonably require, for the purposes of investigating or
resolving any disputes or responding to any matters or inquiries raised in the
Indemnification Claim Notice.

9.5.6    If no Indemnifying Person shall object in writing within the 30-day
period after receipt of an Indemnification Claim Notice by delivery of a written
notice of objection containing a reasonably detailed description of the facts
and circumstances supporting an objection to the applicable indemnification
claim (an “Indemnification Claim Objection Notice”), such failure to so object
shall be an irrevocable acknowledgment by the Indemnifying Parties that the
Indemnified Person is entitled to the full amount of the claim for Damages set
forth in such Indemnification Claim Notice. In the event such indemnification
claim arises under Section 9.2 hereof or of any Separate PSA, Purchaser, Seller
and Existing Operator shall promptly, but in any event within five (5) days of
the expiration of such thirty (30) day period, deliver joint instructions to the
Escrow Agent instructing Escrow Agent to promptly release from the Indemnity
Escrow to the Purchaser Indemnified Person an amount equal to the Damages set
forth in such Indemnification Claim Notice. For any such indemnification claim
that is not to be recovered from the Indemnity Escrow, or if the amount held in
the Indemnity Escrow, if any, is insufficient to satisfy in whole the amount
owed to a Purchaser Indemnified Person in accordance with this Agreement, then
the Indemnifying Person shall, promptly, but in any event

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within five (5) days of the expiration of such thirty (30) day period, pay to
the Indemnified Person the amount of such shortfall in cash.

9.5.7    In the event that an Indemnifying Person shall deliver an
Indemnification Claim Objection Notice in accordance with Section 9.5.6 within
thirty (30) days after delivery of such Indemnification Claim Notice, such
Indemnifying Person and the Indemnified Person shall attempt to agree upon the
rights of the respective parties with respect to each of such claims. If such
Indemnifying Person and the Indemnified Person should so agree, and the
indemnification claim arises under Section 9.2 hereof or any Separate PSA,
Purchaser, Seller and Existing Operator shall promptly, but in any event within
five (5) days of such agreement, deliver joint instructions to the Escrow Agent
instructing Escrow Agent to promptly release from the Indemnity Escrow to the
Purchaser Indemnified Person an amount equal to the Damages that the parties
have agreed are due to such Indemnified Person pursuant to such indemnification
claim. For any such indemnification claim that is not to be recovered from the
Indemnity Escrow, or if the amount held in the Indemnity Escrow, if any, is
insufficient to satisfy in whole the amount owed to a Purchaser Indemnified
Person in accordance with this Agreement, then the Indemnifying Person shall,
promptly, but in any event within five (5) days after the date of such
agreement, pay to the Indemnified Person the amount of such shortfall in cash.

9.5.8    If no such agreement can be reached after good faith negotiation during
the thirty (30) day period after delivery of an Indemnification Claim Objection
Notice or if one party determines at any time during such thirty (30) day period
that such negotiations are unlikely to result in any such agreement, the
indemnification claim shall be resolved pursuant a suit, action or other
proceeding brought in accordance with Section 12.7.

9.5.9    In respect of any Damages for which indemnification may be sought
pursuant to this Article IX, in calculating amounts payable to an Indemnified
Person, the amount of any Indemnified Damages shall be determined net of (i) any
tax benefit actually realized by such Indemnified Person on account of such
Damages, (ii) payments recovered by such Indemnified Person under any insurance
policy with respect to such Damages (net of costs of collection), and (iii) any
net prior recovery by such Indemnified Person from any third party with respect
to such Damages.

9.5.10    In respect of any Damages for which indemnification may be sought
pursuant to this Article IX, the Indemnified Person shall (and shall cause its
Affiliates to) (a) use commercially reasonable efforts to pursue all legal
rights and remedies available in order to minimize the Damages to which it may
be entitled to indemnification under this Agreement except to the extent that
the Indemnified Person believes that the taking of such action would have
material and adverse consequences for the Indemnified Person, and (b) select the
lowest cost remedy available consistent with good business practice. The terms
of Section 9.5 are not intended to modify in any manner the limitations on
liability set forth in Section 9.4.

9.6    Tax Treatment. For all tax purposes, the parties agree to treat indemnity
payments made pursuant to this Agreement as an adjustment to the Purchase Price.

9.7    Exclusive Remedy. Subject to Section 10.4, Purchaser, Seller and Existing
Operator acknowledge and agree that from and after the Closing, the rights
granted to

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the parties in the indemnification provisions of this Article IX shall be the
exclusive rights and remedy of Purchaser (and all other Purchaser Indemnified
Persons) and Seller and Existing Operator (and all other Seller Indemnified
Persons) under this Agreement other than for claims arising our of or relating
to fraud.

9.8    Manner of Payment. Any indemnification payments made by Seller, Existing
Operator or Purchaser pursuant to this Article IX shall be effected by wire
transfer of immediately available funds to the accounts designated by the other
party, within five (5) days after the final determination thereof.

9.9    Brokerage. Seller, Existing Operator and Purchaser each represents and
warrants to the other that it has not dealt with or utilized the services of any
real estate broker, investment banker, sales person or finder in connection with
this Agreement, other than the services of Greystone in its capacity as
financial advisor to Seller and Existing Operator (“Financial Advisor”). Seller
shall pay any and all fees that may be due and payable to Financial Advisor in
connection with the Transactions pursuant to a separate agreement with Financial
Advisor. Each party agrees to indemnify, hold harmless, and, if requested in the
sole and absolute discretion of the indemnitee, defend (with counsel approved by
the indemnitee) the other party from and against any breach of the terms of this
Section 9.9 and any Damages relating to brokerage commissions and finder’s fees
arising from or attributable to the acts or omissions of the indemnifying party.

ARTICLE X
DEFAULT AND REMEDIES

10.1    Purchaser Default. Prior to Closing, if Purchaser or any of its
Affiliates party to the Separate PSA, as applicable, (a) defaults on its
obligations to (x) deliver to Seller or Existing Operator or their Affiliates
party to the Separate PSA, as applicable, the documents specified under Section
5.3 hereunder or under Section 5.3 of the Separate PSA, respectively, or (y)
deliver the Purchase Price in accordance with Article II hereunder or under
Article II of the Separate PSA and consummate the Transactions (as defined
herein and in the Separate PSA) on the Closing Date, or (b) defaults, in any
material respect, with respect to any of its representations, warranties or
obligations under this Agreement or under the Separate PSA, and such default
continues for more than ten (10) Business Days after written notice from Seller
(each, a “Purchaser Default”), then Seller and Existing Operator shall have the
right, as their sole and exclusive remedy (Seller and Existing Operator hereby
expressly waive any and all other remedies available to them at law, in equity
or otherwise) to (i) terminate this Agreement immediately, in which case
Purchaser shall be deemed to forfeit the Deposit to Seller and Existing Operator
and the Escrow Agent shall deliver the Deposit to Seller and Existing Operator,
or (ii) if Purchaser is willing to proceed with the Closing, waive such default
and any and all other remedies available to them at law, in equity or otherwise
rights available to them and proceed with the Closing of the Transaction. Upon a
termination of this Agreement, neither Purchaser, Seller nor Existing Operator
shall have any further rights, obligations or liabilities hereunder, except as
otherwise expressly provided herein. SELLER, EXISTING OPERATOR AND PURCHASER
AGREE THAT (A) ACTUAL DAMAGES DUE TO PURCHASER’S DEFAULT HEREUNDER WOULD BE
DIFFICULT AND INCONVENIENT TO ASCERTAIN AND THAT SUCH AMOUNT IS NOT A PENALTY
AND IS FAIR AND

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REASONABLE IN LIGHT OF ALL RELEVANT CIRCUMSTANCES, (B) THE AMOUNT SPECIFIED AS
LIQUIDATED DAMAGES IS NOT DISPROPORTIONATE TO THE DAMAGES THAT WOULD BE SUFFERED
AND THE COSTS THAT WOULD BE INCURRED BY SELLER AND/OR EXISTING OPERATOR AS A
RESULT OF HAVING WITHDRAWN THE PROPERTY FROM THE MARKET, AND (C) PURCHASER
DESIRES TO LIMIT ITS LIABILITY UNDER THIS AGREEMENT TO THE AMOUNT OF THE DEPOSIT
PAID IN THE EVENT PURCHASER FAILS TO COMPLETE CLOSING. SELLER, EXISTING OPERATOR
AND PURCHASER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES LIMIT THE
AMOUNT OF DAMAGES DUE TO SELLER AND EXISTING OPERATOR AND THE REMEDIES AVAILABLE
TO SELLER AND EXISTING OPERATOR, AND SHALL BE SELLER’S AND EXISTING OPERATOR’S
EXCLUSIVE REMEDY PRIOR TO CLOSING AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY
ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS COVENANTS OR ITS
OBLIGATION TO CONSUMMATE THE TRANSACTIONS. UNDER NO CIRCUMSTANCES SHALL SELLER
OR EXISTING OPERATOR SEEK OR BE ENTITLED TO RECOVER DAMAGES PRIOR TO CLOSING
(INCLUDING ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT
DAMAGES), ALL OF WHICH SELLER AND EXISTING OPERATOR SPECIFICALLY WAIVE, FROM
PURCHASER FOR ANY BREACH BY PURCHASER OF ITS COVENANTS, PURCHASER’S
REPRESENTATIONS OR ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT.

10.2    Seller Default. Prior to Closing, if Seller and/or Existing Operator or
any of their Affiliates party to the Separate PSA defaults on its obligations
hereunder or under the Separate PSA, as applicable, to deliver to Escrow Agent
the deliveries specified under Section 5.2 hereunder or under Section 5.2 of the
Separate PSA on the date required by the terms of this Agreement or the Separate
PSA or, defaults in any material respect with respect to any of its
representations, warranties, covenants or obligations under this Agreement or
the Separate PSA, and such default continues for more than ten (10) Business
Days after written notice from Purchaser, then Purchaser shall have the right to
(a) terminate this Agreement, whereupon (i) the Deposit shall be returned to
Purchaser, and (ii) Seller and Existing Operator shall pay to Purchaser all
documented out-of-pocket costs and expenses incurred by Purchaser and JV Partner
in connection with this Agreement and the Transaction (taken in the aggregate
with all costs and expenses incurred hereunder and under each Separate PSA),
including without limitation their reasonable attorneys’ fees and expenses
(which obligations shall survive such termination) up to a maximum aggregate
amount of Three Hundred Thousand and no/100 Dollars ($300,000.00) (inclusive of
reasonable attorney’s fees and expenses incurred in connection with the Separate
PSA), or (b) subject to the conditions below, seek specific performance of
Seller’s and Existing Operator’s obligation to consummate the Transactions
pursuant to this Agreement. Purchaser may seek specific performance of Seller’s
and Existing Operator’s obligation to close on the sale of the Property pursuant
to this Agreement only if, as a condition precedent to initiating such
litigation for specific performance, Purchaser shall (x) not otherwise be in
default under this Agreement beyond the applicable notice and cure periods, and
(y) file suit therefor with the court on or before the 90th day after the
delivery of written notice of the default. If Purchaser fails to file an action
for specific performance within such 90 day period, then Purchaser shall be
deemed to have elected to terminate this Agreement in accordance with subsection
(a) above. SELLER, EXISTING OPERATOR AND PURCHASER

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AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES
DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER’S
EXCLUSIVE REMEDY PRIOR TO CLOSING AGAINST SELLER AND EXISTING OPERATOR BOTH AT
LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER AND/OR EXISTING
OPERATOR OF ITS COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS.
UNDER NO CIRCUMSTANCES SHALL PURCHASER SEEK OR BE ENTITLED TO RECOVER DAMAGES
PRIOR TO CLOSING (INCLUDING ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR
INDIRECT DAMAGES), ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER OR
EXISTING OPERATOR FOR ANY BREACH BY SELLER OR EXISTING OPERATOR OF ITS
PRE-CLOSING COVENANTS, SELLER’S REPRESENTATIONS OR ITS OTHER OBLIGATIONS UNDER
THIS AGREEMENT.

10.3    Termination of Separate PSA. In the event that the Separate PSA is
terminated by any party thereto, Seller, Existing Operator and Purchaser shall
each have the right to terminate this Agreement (provided that if no Purchaser
Default exists hereunder and under the Separate PSA, upon such termination the
Deposit shall be returned to Purchaser, and (Seller and Existing Operator shall
pay to Purchaser all documented out-of-pocket costs and expenses incurred by
Purchaser and JV Partner in connection with this Agreement and the Transaction
(taken in the aggregate with all costs and expenses incurred hereunder and under
each Separate PSA), including without limitation their reasonable attorneys’
fees and expenses (which obligations shall survive such termination) up to a
maximum aggregate amount of Three Hundred Thousand and no/100 Dollars
($300,000.00) (inclusive of reasonable attorney’s fees and expenses incurred in
connection with the Separate PSA)).

10.4    Post-Closing Defaults. The parties agree that irreparable damage would
result and that the parties would not have any adequate remedy at law if any of
the provisions of this Agreement to be performed at any time from and after
Closing were not performed in accordance with their specific terms or were
otherwise breached or threatened to be breached from and after Closing. It is
accordingly agreed that the parties shall be entitled to equitable relief,
without the proof of actual damages, including in the form of an injunction or
injunctions or orders for specific performance, in addition to all other
remedies available to the parties at law or in equity as a remedy for any such
post-Closing breach or threatened breach, in the courts specified in Section
12.7 hereof. Each party agrees (a) not to object to any attempt by the other
party to obtain any such equitable remedy (provided, that it is understood that
clause (a) of this sentence is not intended to, and shall not, preclude any
party from litigating on the merits the substantive claim to which such remedy
relates) and (b) to waive any requirement for the security or posting of any
bond in connection with any such equitable remedy.

ARTICLE XI
CASUALTY; EMINENT DOMAIN

11.1    Damage. Until Closing, the risk of loss or damage to the Property shall
be borne by Seller; provided that, this Section shall in no event expand of
modify Seller’s obligations under Section 7.1 to operate, maintain and manage
the Property prior to the Closing

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Date in the ordinary course consistent with past practices and in material
compliance with Laws. In the event that any Property is damaged or destroyed by
fire or other casualty prior to Closing, Seller shall promptly provide Purchaser
with written notice of such occurrence, whereupon the parties shall promptly
ascertain the cost to repair or replace same by hiring a mutually acceptable
contractor to estimate same. If the costs of repair or replacement of such fire
or casualty exceeds ten percent (10%) of the allocated value to the Property
taken as a whole, then Purchaser shall have the right to terminate this
Agreement and, at Purchaser’s election, the Separate PSA by giving Seller
written notice of its intention to do so, such notice by Purchaser to Seller to
be given not later than ten (10) Business Days after Purchaser shall have
received notice of such costs (whereupon this Agreement and, if so elected by
Purchaser, the Separate PSA shall terminate and be of no further force or effect
whatsoever except with respect to those rights and obligations, if any, which
specifically survive such termination). If Purchaser elects not to terminate
this Agreement, then the parties shall consummate the Transactions in accordance
with the terms of this Agreement, subject to the terms of Section 11.2 below.

11.2    Closing. In the event of a casualty as set forth in Section 11.1, if
Purchaser elects not to terminate the Agreement, then the parties shall
consummate the Transactions in accordance with the terms of this Agreement for
the full Purchase Price, notwithstanding any such damage, destruction or
casualty, in which case Seller and Purchaser shall, at Closing, execute and
deliver an assignment and assumption (in a form reasonably and mutually agreed)
of Seller’s rights and obligations with respect to the insurance claim related
to such damage, destruction or casualty, and thereafter Purchaser shall receive
all insurance proceeds pertaining to such claim, plus a credit against the
Purchase Price at Closing in the amount of any deductible payable by Seller in
connection therewith, less (i) any out-of-pocket costs incurred by Seller in
pursuing or collecting such insurance claim and (ii) any amounts which may
already have been spent by Seller for Repairs.

11.3    Repairs. To the extent that Seller elects to commence any Repairs prior
to Closing, then Seller shall be entitled to receive and apply available
insurance proceeds to pay the costs of such Repairs completed or installed prior
to Closing, with Purchaser being responsible for completion of such Repairs
after Closing. To the extent that any Repairs have been commenced prior to
Closing, then the Assigned Contracts shall include, and Purchaser shall assume
at Closing, all construction and other contracts entered into by Seller in
connection with such Repairs; provided, however, that (except in the event of
emergency (including any threatened material loss to or at the Property or
threatened bodily injury to persons) on or about any Property, as determined in
Seller’s sole discretion) Seller will consult with Purchaser prior to entering
into any such contract if Purchaser would, or could reasonably be expected to,
have to assume such contract. Notwithstanding the foregoing, Seller retains the
sole right and authority to pursue any Repair and/or enter into any such
contract.

11.4    Eminent Domain. In the event that, at the time of Closing, all or any
material portion of any Facility is (or previously, but after the Effective
Date, has been) acquired, or may or will be acquired, by any Governmental
Authority by the powers of eminent domain or transfer in lieu thereof, Seller
shall promptly provide Purchaser with written notice of such occurrence, and
Purchaser shall have the right to terminate this Agreement and, at Purchaser’s
election, the Separate PSA, by giving Seller written notice of its intention to
do so, such notice by Purchaser to Seller to be given not later than ten (10)
Business Days after Purchaser shall

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have received notice from Seller of such aforesaid occurrence (whereupon this
Agreement and, if so elected, the Separate PSA shall terminate and be of no
further force or effect whatsoever except with respect to those rights and
obligations, if any, which specifically survive termination of this Agreement).
If Purchaser elects not to terminate this Agreement, then the parties shall
consummate the Transactions in accordance with the terms of this Agreement for
the full Purchase Price and Purchaser shall have all rights to, and receive the
full benefit of, any condemnation award.

ARTICLE XII
MISCELLANEOUS

12.1    Binding Effect of Agreement. This Agreement shall not be binding on any
party hereto until executed by both Purchaser, Seller and Existing Operator.
Escrow Agent’s execution of this Agreement shall not be a prerequisite to the
effectiveness of this Agreement. Subject to the terms of Section 12.3, this
Agreement shall be binding upon and inure to the benefit of Seller, Existing
Operator and Purchaser, and their respective successors and permitted assigns.

12.2    Exhibits; Schedules; Annexes. All Exhibits, Schedules and Annexes,
whether or not annexed hereto, are a part of this Agreement for all purposes.

12.3    Assignability. Purchaser may assign its rights under this Agreement to
one or more Affiliates thereof; provided, however, that no such assignment shall
relieve Purchaser of any of its obligations hereunder. Purchaser may assign this
Agreement in part with respect to any one Property to facilitate the acquisition
of the Property by a separate entity formed by Purchaser with respect to the
Property.

12.4    Captions. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

12.5    Number and Gender of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.

12.6    Notices. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing, and shall be (a) personally
delivered; (b) sent by a nationally-recognized overnight delivery service; (c)
sent by certified or registered mail, return receipt requested; or (d) sent by
electronic delivery with an original copy thereof transmitted to the recipient
by one of the means described in subsections (a) through (c) no later than 3
Business Days thereafter. All notices shall be deemed effective when actually
received; provided, however, that if the notice was sent by overnight courier or
mail as aforesaid and is affirmatively refused or cannot be delivered during
customary business hours by reason of a change of address with respect to which
the addressor did not have either knowledge or written notice delivered in
accordance with this paragraph, then the first attempted delivery shall be
deemed to constitute delivery. Each party shall be entitled to change its
address for notices from time to time by delivering to the other party notice
thereof in the manner herein provided for the

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delivery of notices. All notices shall be sent to the addressee at its address
set forth following its name below:
To Purchaser:
c/o Griffin-American Healthcare REIT IV, Inc.
18191 Von Karman Avenue, Suite 300
Irvine, CA 92612
Attention: Brooks Barton
Email: bbarton@ahinvestors.com 
 
 
with a copy to:
Arnall Golden Gregory LLP
171 17th Street, NW, Suite 2100
Atlanta, GA 30363
Attn.: Steven A. Kaye, Esq.
Fax No.: 404-873-8101
Email: steven.kaye@agg.com 
 
 
To Seller and Existing Operator:
c/o Fortress Investment Group LLC
1345 Avenue of the Americas
New York, New York 10105
Attn: Max Luce
Facsimile: 917-639-9638
Email: mluce@fortress.com
 
 
with a copy to:
c/o Fortress Investment Group LLC
1345 Avenue of the Americas
New York, New York 10105
Attn: Ivy Hernandez
Facsimile: 917-639-9638
Email: ihernandez@fortress.com  
 
 
with a copy to:
Williams Mullen
200 South 10th Street, Suite 1600
Richmond, Virginia 23219
Attention: Robert C. Dewar
Email: rdewar@williamsmullen.com 

Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
 
First American Title Insurance Company
777 South Figueroa Street, 4th Floor
Los Angeles, CA 90017
Attention: Brian M. Serikaku
Email: bmserikaku@firstam.com

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Unless specifically required to be delivered to the Escrow Agent pursuant to the
terms of this Agreement, no notice hereunder must be delivered to the Escrow
Agent in order to be effective so long as it is delivered to the other party in
accordance with the above provisions.

12.7    Governing Law and Venue. This Agreement shall be construed and enforced
in accordance with the laws of the State of New York, without giving effect to
any principles regarding conflict of laws to the extent such principles would
require or permit the application of the laws of another jurisdiction. Each of
Purchaser, Seller and Existing Operator shall submit to the exclusive
jurisdiction of the state courts of the State of New York in New York County and
to the jurisdiction of the United States District Court for the Southern
District of New York for the purposes of each and every suit, action or other
proceeding arising out of or based upon this Agreement or the subject matter
hereof brought by the parties, it being expressly understood and agreed that
this consent to jurisdiction shall be self-operative and no further instrument
or action, other than service of process in one of the manners specified in this
Agreement or as otherwise permitted by such law, shall be necessary in order to
confer jurisdiction upon a party in any such court. Each of Purchaser, Seller
and Existing Operator shall waive, and agree not to assert, by way of motion, as
a defense, or otherwise, in any suit, action or proceeding brought in any such
court, any claim that either Purchaser, Seller or and Existing Operator is not
subject personally to the jurisdiction of the above-named courts, that
Purchaser’s, Seller’s or and Existing Operator’s property is exempt or immune
from attachment or execution, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or the subject matter hereof may not be enforced
in or by such court, and further agrees to waive, to the fullest extent
permitted under applicable law, the benefit of any defense that would hinder,
fetter or delay the levy, execution or collection of any amount to which Seller,
and Existing Operator Purchaser or their successors or permitted assigns are
entitled pursuant to the final judgment of any court having jurisdiction.

12.8    Entire Agreement. This Agreement embodies the entire agreement between
the parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and contracts, whether
written or oral.

12.9    Amendments. This Agreement shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, the signature of the
Escrow Agent shall not be required as to any amendment of this Agreement other
than an amendment of Section 2.3.

12.10    Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

12.11    Multiple Counterparts/Facsimile Signatures. This Agreement may be
executed in a number of identical counterparts. This Agreement may be executed
by facsimile signatures or electronic delivery of signatures which shall be
binding on the parties hereto.

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12.12    Construction. No provision of this Agreement shall be construed in
favor of, or against, any particular party by reason of any presumption with
respect to the drafting of this Agreement; both parties, being represented by
counsel, having fully participated in the negotiation of this instrument.

12.13    Confidentiality/Press Releases. Each party hereto agrees that this
Agreement, the provisions of this Agreement, all understandings, agreements and
other arrangements between and among the parties, and all other non-public
information received from or otherwise relating to, the Property (or any portion
thereof), Purchaser, Seller and/or and Existing Operator or their respective
Affiliates shall be, and be kept, confidential, and shall not be disclosed or
otherwise released to any other Person (other than by any party to such party’s
Affiliates, provided that such party shall be responsible and liable to the
other party for any breach of this Section 12.13 by its Affiliates), without the
written consent of Purchaser, Seller and Existing Operator, as applicable. Any
non-public information obtained by Purchaser in the course of its inspection of
the Property, and any Seller’s Deliveries or Third Party Reports, in each case
that is proprietary to and maintained as confidential by Seller (including,
without limitation, Licensing Surveys and any information regarding Seller’s
operating results from the Property) shall be confidential and Purchaser shall
be prohibited from making public or disclosing such information to any other
Person, without Seller’s prior written authorization, which may be granted or
denied in Seller’s sole discretion. Notwithstanding the foregoing, the
obligations of the parties hereunder shall not apply in the following instances:

12.13.1    the disclosure of confidential information to any of such party’s
lessors, lenders, Governmental Authorities, Purchaser Parties and other third
parties to the extent necessary in order to consummate the Transactions;

12.13.2    to the extent that the disclosure of information otherwise determined
to be confidential is required by legal requirements (other than as addressed by
paragraph (iv) below), provided that (A) prior to disclosing such confidential
information, such disclosing party shall notify the other party thereof, which
notice shall include the basis upon which such disclosing party believes the
information is required to be disclosed; and (B) such disclosing party shall, if
requested by the other party, provide commercially reasonable cooperation with
the other party to protect the continued confidentiality thereof;

12.13.3    the disclosure of confidential information to any financial and other
professional advisors, shareholders, investors, lessors and lenders (both actual
and potential) of a party who agree to hold confidential such information
substantially in accordance with the terms of this Section 12.13 or who are
otherwise bound by a duty of confidentiality to such party, provided that the
disclosing party shall be responsible and liable to the other party for any
breach of the confidentiality terms of this Section 12.13 by such advisor;

12.13.4    Purchaser (or any of its Affiliates) shall have the right to disclose
such confidential information as is required to be disclosed by any regulations
or securities exchange listing rules applicable to Purchaser (or any of its
Affiliates), including in connection with Purchaser’s (or any of its
Affiliates’) quarterly earnings results or financing activities or otherwise
pursuant to the Registered Company’s SEC Filings that relate to the Audited
Years and the stub period; and

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12.13.5    Seller and Existing Operator (or any of their Affiliates) shall have
the right to disclose such confidential information to their shareholders as
part of ordinary course updates regarding the Transaction; provided that, such
disclosure is aggregated with a Sale Participant’s other businesses and
operations and not presented in a transaction specific format, and shall not
include (a) the identity of Purchaser, the JV Partner or any of their
Affiliates, (b) the specific Facilities that are the subject of this Agreement
or (c) the specific terms of this Agreement.
 
12.14    Time of the Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Agreement and any aspect thereof.

12.15    Waiver. No delay or omission to exercise any right or power accruing
upon any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Agreement
shall be established by conduct, custom, or course of dealing and all waivers
must be in writing and signed by the waiving party.

12.16    Time Periods. In computing any period of time pursuant to this
Agreement, the day of the act or event from which the designated period of time
begins to run will not be included. Should the last day of a time period
contemplated by this Agreement fall on a day other than a Business Day, the next
Business Day thereafter shall be considered the end of the time period. All
references to a period of days herein shall be deemed to refer to calendar days
unless the term “Business Day” is used.

12.17    No Personal Liability of Officers, Trustees or Directors. Each party
acknowledges that this Agreement is entered into by the Sale Participants and
Purchaser and agrees that none of the individual officers, trustees, directors,
managers, or members of the Indemnified Persons shall have any personal
liability under this Agreement or any document executed in connection with the
Transactions, except in cases of fraud, fraudulent transfer, willful misconduct
or gross negligence.

12.18    No Recording. Purchaser shall not cause or allow this Agreement or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller’s prior written
consent, which consent may be withheld at Seller’s sole discretion. If Purchaser
records this Agreement or any other memorandum or evidence thereof, Purchaser
shall be in default of its obligations under this Agreement.

12.19    Relationship of Parties. Purchaser, Seller and Existing Operator
acknowledge and agree that the relationship established between the parties
pursuant to this Agreement is only that of a seller and a purchaser of property.
Neither Purchaser, on the one hand, nor Seller or Existing Operator, on the
other, is, nor shall either hold itself out to be, the agent, employee, joint
venturer or partner of the other party.

12.20    Reserved.

12.21    Multiple Parties.

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12.21.1 As used in this Agreement, the term “Purchaser” includes all entities
acquiring any interest in the Property at the Closing. In the event that
“Purchaser” has any obligations or makes any covenants, representations or
warranties under this Agreement, the same shall be made jointly and severally by
all entities being a Purchaser hereunder. If Seller delivers notice to one
Purchaser hereunder, such notice shall be deemed delivered to each Purchaser.

12.21.2 As used in this Agreement, the term “Seller” includes all entities
selling an interest in the Land and Improvements at the Closing. In the event
that “Seller” has any obligations or makes any covenants, representations or
warranties under this Agreement, the same shall be made jointly and severally by
all entities being a Seller hereunder.

12.21.3 As used in this Agreement, the term “Existing Operator” includes all
entities currently operating the Facilities as tenants of a Seller. In the event
that “Existing Operator” has any obligations or makes any covenants,
representations or warranties under this Agreement, the same shall be made
jointly and severally by all entities being an Existing Operator hereunder.

12.22    WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY
ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO AND ACCEPT THIS
AGREEMENT AND SHALL SURVIVE THE CLOSING OF TERMINATION OF THIS AGREEMENT.

12.23    Appointment of Seller’ Agent. Each Seller and Existing Operator hereby
appoints Ivy Hernandez (“Seller’ Agent”), as its agent and attorney-in-fact, on
its behalf and on behalf of each of its Affiliates in accordance with the terms
of this Section 12.23, and hereby authorize the Seller’ Agent (i) to perform all
acts which, by the provisions of this Agreement are to be performed by such
Seller or Existing Operator; (ii) to waive on behalf of each of them any of the
provisions of this Agreement and to execute and deliver such amendments on
behalf of each of them to this Agreement as the Seller’ Agent, in its sole
judgment, shall deem necessary or advisable; (iii) to execute and deliver
documents pursuant to this Agreement as the Seller’ Agent, in its sole judgment,
shall deem necessary or advisable, including any amendments to any such
agreements; (iv) to execute and give all notices, requests and other
communications required, permitted or contemplated under this Agreement as
Seller’ Agent, in its sole judgment, shall deem necessary or advisable; (v) to
consent, dispute, compromise, adjust, settle, litigate, appeal or otherwise deal
with any and all set-offs, claims breaches, obligations, liabilities,
assessments, suits, actions, proceedings, liens, charges, encumbrances, orders,
judgments and decrees with respect to this Agreement or to refrain so to do as
Seller’ Agent shall, in its sole judgment, deem necessary or advisable; (vi) to
delegate all or any of its power or authority under this Agreement to any person
or entity, as Seller’ Agent, in its sole judgment, shall deem necessary or
advisable; (vii) to expend such amounts in the exercise of its rights and powers
and in the performance of its duties hereunder as Seller’ Agent shall, in its
sole judgment, deem necessary or advisable; and (viii) generally to act for and
on behalf of each of them in all matters connected with this Agreement, with the
same force and effect as though such an act had been taken by any of them
personally. Each Seller and Existing Operator agrees with Purchaser that

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the Seller’ Agent shall be the sole and exclusive person with legal capacity and
standing to contest, dispute, compromise, adjust, settle, litigate, appeal or
otherwise deal with Purchaser with respect to the indemnification of the
Purchaser Indemnified Persons as set forth in Article IX of this Agreement. This
appointment and power-of-attorney shall be a special power-of-attorney coupled
with an interest, shall be irrevocable and shall survive the dissolution, death,
disability or incapacity of any of the Seller or Existing Operator. Each Seller
and Existing Operator further agrees that Purchaser may deal solely with the
Seller’ Agent as the exclusive representative of such Seller and Existing
Operator with reference to the matters set forth in this Agreement, that the
actions of the Seller’ Agent are binding on each Seller and Existing Operator
and such Seller’s Affiliates, and its and their respective successors and
assigns, and that Purchaser has no duty to ascertain if the Seller’ Agent is
properly carrying out its obligations under this Agreement.

12.24    Attorneys’ Fees. In any action between Purchaser, on the one hand, and
Seller and/or Existing Operator, on the other hand, as a result of a party’s
failure to perform or a default under this Agreement, the prevailing party shall
be entitled to recover from the other party, and the other party shall pay to
the prevailing party, the prevailing party’s attorneys’ fees, expenses and court
costs incurred in such action.

12.25    Reserved.

12.26    Bulk Transfer Tax Clearance. Seller and Existing Operator agree to act
in good faith and with reasonable diligence to apply for, obtain and (upon
receipt) deliver to Purchaser all statutorily required tax clearance
certificates, evidencing the payment of certain taxes and assessments, at or as
soon after the Closing Date as is reasonably possible.

12.27    Audit. Seller and Existing Operator acknowledges that (a) Purchaser and
its intended assignee(s) are or may be affiliated with a publicly registered
company (“Registered Company”) promoted by Purchaser or its Affiliates; and (b)
it has been advised that Purchaser or such assignee(s) may be required to make
certain filings with the Securities and Exchange Commission (the “SEC Filings”)
that relate to the most recent three (3) pre-acquisition fiscal years (the
“Audited Years”) and the current fiscal year through the date of acquisition
(the “stub period”) for the Facilities. To assist the assignee(s) in preparing
the SEC Filings, and notwithstanding anything to the contrary in this Section
12.13, Seller and Existing Operator covenants to provide (and to use
commercially reasonable efforts to cause Manager to provide, as necessary) said
assignee(s) with the following, to the extent it is in the possession or control
of, or is available to, Seller, Existing Operator or Manager, until the first
anniversary of the Closing: (i) access to bank statements for the Audited Years
and stub period; (ii) rent roll as of the end of the Audited Years and stub
period; (iii) operating statements for the Audited Years and stub period; (iv)
access to the general ledger for the Audited Years and stub period; (v) cash
receipts schedule for each month in the Audited Years and stub period; (vi)
access to invoices for expenses and capital improvements in the Audited Years
and stub period; (vii) accounts payable ledger and accrued expense
reconciliations; (viii) check register for the 3-months following the Audited
Years and stub period; (ix) all leases and 5-year lease schedules; (x) copies of
all insurance documentation for the Audited Years and stub period; (xi) copies
of accounts receivable aging as of the end of the Audited Years and stub period
along with an explanation for all accounts over 30 days past due as of the end
of the Audited Years and stub period; (xii) a

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signed representation letter in the form attached hereto as Schedule 12.13-A
(the “Representation Letter”), and (xiii) to the extent necessary, a signed
audit letter in the form attached hereto as Schedule 12.27-B (the “Audit
Letter”). Seller and Existing Operator also agrees to deliver (and to use
commercially reasonable efforts to cause Manager to deliver, as necessary) a
signed Representation Letter and signed Audit Letter to Purchaser within five
(5) business days prior to Closing, and such delivery shall be a condition to
Closing. Seller and Existing Operator also agree to reasonably cooperate (and to
use commercially reasonable efforts to cause Manager to cooperate, as necessary)
with Purchaser to obtain a comfort letter, as may be requested by Purchaser.
    

[Remainder of Page Intentionally Left Blank]

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NOW, THEREFORE, the parties hereto have executed this Agreement as of the date
first set forth above.
Seller:
NIC 5 SPRING HAVEN OWNER LLC,
a Delaware limited liability company
 
 
By:
/s/ Jane Ryu
Name:
Jane Ryu
Title
Chief Executive Officer

NIC 5 LAKE MORTON PLAZA OWNER LLC,
a Delaware limited liability company
 
 
By:
/s/ Jane Ryu
Name:
Jane Ryu
Title
Chief Executive Officer

NIC 5 RENAISSANCE RETIREMENT OWNER
LLC, a Delaware limited liability company
 
 
By:
/s/ Jane Ryu
Name:
Jane Ryu
Title
Chief Executive Officer

NIC 5 FOREST OAKS OWNER LLC,
a Delaware limited liability company
 
 
By:
/s/ Jane Ryu
Name:
Jane Ryu
Title
Chief Executive Officer

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

Existing Operator:
NIC 5 SPRING HAVEN LEASING LLC,
a Delaware limited liability company
 
 
By:
/s/ Ivy Hernandez
Name:
Ivy Hernandez
Title
Vice President

NIC 5 LAKE MORTON PLAZA LEASING LLC,
a Delaware limited liability company
 
 
By:
/s/ Ivy Hernandez
Name:
Ivy Hernandez
Title
Vice President

NIC 5 RENAISSANCE RETIREMENT LEASING
LLC, a Delaware limited liability company
 
 
By:
/s/ Ivy Hernandez
Name:
Ivy Hernandez
Title
Vice President

NIC 5 FOREST OAKS LEASING LLC,
a Delaware limited liability company
 
 
By:
/s/ Ivy Hernandez
Name:
Ivy Hernandez
Title
Vice President

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

Purchaser:
GAHC4 CENTRAL FL SENIOR HOUSING
PORTFOLIO, LLC, a Delaware limited liability
company
 
 
By:
/s/ Brian S. Peay
Name:
Brian S. Peay
Title
Authorized Signatory

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

Escrow Agent (for purposes of agreeing to the terms of Sections 2.2.2, 2.3 and
4.1.2 of this Agreement)
First American Title Insurance Company
 
 
 
 
By:
/s/ Brian M. Serikaku
Name:
Brian M. Serikaku
Title
Escrow Officer

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

ANNEX 1

DEFINED TERMS

“Access Agreement” shall mean the meaning set forth in Section 5.5.11.

“Accounts Receivable” means, collectively, accounts receivable, credit balances
with regard to the Medicare Program and Medicaid Program, and unbilled work in
process.

“Accounts Receivable Schedule” shall mean the meaning set forth in Section
7.15.2.

“Affiliate” shall mean, with respect to any Person, any other Person which
Controls, is Controlled by or is under common Control with the first Person.

“Aggregate Facilities” shall have the meaning set forth in Section 4.6.

“Agreement” shall have the meaning set forth in the introductory paragraph.

“AHCA” means the State of Florida, Agency for Health Care Administration.

“ALF” means Assisted Living Facility.

“Assigned Contract” means each Commercial Lease and each other Property Contract
set forth on Exhibit N attached hereto, which exhibit Purchaser shall deliver to
Seller no later than the expiration of the Inspection Period, and which Assigned
Contracts are subject to receipt of any required consent.

“Assumed Liabilities” shall mean only the following (a) liabilities and
obligations assumed by Purchaser pursuant hereto with respect to the Assigned
Contract to the extent such obligations and liabilities relate to periods from
and after Closing, and (b) such other liabilities as Purchaser may elect to
assume in its sole and absolute discretion.

“Audit” shall mean any written surveys and other Governmental Authority reports,
statements of deficiencies, plans of correction, audits and any other
investigation notices, warnings, waivers, related correspondence or reports
filed, issued, sent by or to each Sale Participant, or received by any Sale
Participant, with respect to any Medicaid Provider Agreement.

“Basket Amount” shall have the meaning set forth in Section 9.4.1.

“Business” means the business of the Facility as conducted on the Effective
Date, including, without limitation, licensed ALF operations.

“Business Day” means any day other than a Saturday or Sunday or Federal holiday
or legal holiday in the State of New York.

ANNEX I-1

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“Closing” means the consummation of the purchase and sale and related
transactions contemplated by this Agreement with respect to the Facilities in
accordance with the terms and conditions of this Agreement.

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

“Closing Statement” shall have the meaning set forth in Section 5.2.6.

“CMS” means United States Department of Health and Human Services (“HHS”),
Centers for Medicare and Medicaid Services.

“Code” shall have the meaning set forth in Section 5.2.8.

“Commercial Lease” means all real property leases, subleases and other occupancy
contracts, whether or not of record, to which Seller is a party and which
provide for the use or occupancy of space or facilities at any Facility or any
portion of the Property and which are in force as of the Closing Date, other
than any Resident Agreement with any Resident.

“Control” shall mean, as applied to any Person, the possession, directly or
indirectly, of the power to direct the management and policies of that Person,
whether through ownership, voting control, by contract or otherwise.

“Current Capital Repair” shall have the meaning set forth in Section 5.5.11.

“Damages” means all actions, suits, proceedings, governmental investigations,
injunctions, demands, charges, claims, judgments, awards, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in settlement,
liabilities, obligations, taxes, liens, losses, fees and expenses (including
court costs and reasonable and documented out-of-pocket attorneys’ and
accountants’ fees and expenses (but excluding costs of investigation));
provided, however, Damages specifically excludes punitive, incidental,
consequential, special or indirect damages, including without limitation
business interruption, loss of future revenue, profits or income, or loss of
business reputation or diminution in value.

“Data Site” means the data room titled “Project Vice.”

“Deed” shall mean a special warranty deed (or the equivalent in the applicable
jurisdiction).

“De Minimis Claim” shall have the meaning set forth in Section 9.1.

“Disclosure Schedules” shall have the meaning set forth in Article VI.

“Environmental Laws” means the Resource Conservation and Recovery Act (RCRA), 42
U.S.C. Section 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. Sections 9601 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Toxic Substances Control
Act (15 U.S.C. §2601 et seq.), the Clean Air Act (42 U.S.C. §7401 et seq.), the
Safe Water Drinking Act (42 U.S.C. §300(f) et seq.), the Occupational Safety and
Health Act, and all other applicable state, county, municipal,

ANNEX I-2

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administrative, environmental, Hazardous Waste or Hazardous Substance, health
and safety laws, ordinances, rules, regulations, judgments, orders and
requirements of any Governmental Authority relating or pertaining to (A)
protection of the environment, (B) the preservation or reclamation of natural
resources, (C) the management, release and threatened release of Hazardous
Substances, (D) response actions and corrective actions regarding Hazardous
Substances, (E) the ownership, operation or maintenance of personal and real
property where Hazardous Wastes are stored, managed, generated, treated or
disposed of and releases of Hazardous Substances, (F) common law torts relating
the Hazardous Substances, including so-called “toxic torts”, and (G)
environmental or ecological conditions on, under or about the Property, all as
in effect as of the Effective Date and on the Closing Date.

“Escrow Agent” shall have the meaning set forth in Section 2.2.1.

“Excluded Assets” means (i) receivables accruing prior to the Closing, (ii)
Excluded Permits, (iii) any Property Contracts (other than the Assigned
Contracts), (iv) cash or other funds (other than petty cash on hand at the
Facilities and deposits paid by Residents or pursuant to Commercial Leases),
whether in house “banks,” or on deposit in bank accounts or in transit for
deposit, (v) refunds, rebates, claims, proceeds and awards, or any interest
thereon, for periods or events occurring prior to the Closing Date, (vi) utility
deposits, (vii) insurance or other prepaid items, (viii) Seller’s proprietary
books and records, (ix) Seller’s proprietary or non-transferrable software, and
(x) any right, title or interest in or to the Seller Marks.

“Excluded Liabilities” shall have the meaning set forth in Section 2.1.

“Excluded Permits” means those Permits which, under applicable law, are
nontransferable.

“Existing Operator’s Knowledge” or words of similar import in this Agreement,
shall be deemed to refer exclusively to matters within the actual knowledge of
Max Luce, Associate, Ivy Hernandez, Senior Vice President, and Jane Ryu, Vice
President of Asset Management (“Seller Knowledge Individuals”) upon reasonable
investigation with respect to the representations and warranties contained in
this Agreement (including due inquiry of relevant Facility Management).

“Existing Surveys” shall have the meaning set forth in Section 3.1.1.

“Facilities” shall mean the facilities identified on Schedule I, and each a
“Facility”.

“Facility Employees” shall have the meaning set forth in Section 3.1.9.

“Facility Management” means the following personnel with respect to each
Facility: all “home office” management personnel of Manager and the executive
director/administrator of each Facility, the director of nursing at each
Facility, the social services director at each Facility, the director of
rehabilitation services at each Facility, the head reimbursement person at each
Facility, the head sales person at each Facility and the head maintenance person
at each Facility (in each case, to the extent such positions exist).

“Financial Advisor” shall have the meaning set forth in Section 9.9.

ANNEX I-3

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

“Fixtures and Tangible Personal Property” means all right, title and interest of
Seller or Existing Operator in and to all fixtures, furniture, furnishings,
fittings, equipment, office equipment, machinery, apparatus, appliances,
supplies, automobiles, vans, buses or other vehicles and all other articles of
tangible personal property located on the Land or in the Improvements as of the
Closing Date, to the extent transferable, and related to, used exclusively in
connection with the ownership, operation or management of any of the Facilities,
including but not limited to all supplies, inventory, consumables, linens,
pharmaceutical products and other medical goods and supplies, perishable and
nonperishable food products, and other similar tangible property; provided,
however, that the term “Fixtures and Tangible Personal Property” specifically
excludes (i) assets that are not owned or leased by Seller or Existing Operator
(including, without limitation, assets owned or leased by any Resident, tenant,
guest, employee or other person furnishing goods or services to the Property),
and (ii) assets owned by Seller or Existing Operator but not primarily related
to, used in connection with, and which are not necessary, for the business or
the ownership, operation or management of any of the Facilities. In addition,
the term “Fixtures and Tangible Personal Property” specifically excludes (i) all
mobile and personal communication devices, including, without limitation all
cellular phones, smartphones, tablets, phablets, netbooks and check and credit
card scanning devices and (ii) desktop, laptop and peripheral computers and data
storage devices together with related electronic devices, accessories, printers
(other than any copier machines owned or leased by Seller or Existing Operator),
monitors and keyboards other than computer equipment necessary to operate
security or gate systems at the Property.

“General Assignment” shall have the meaning set forth in Section 5.2.3.

“Governmental Authority” means, individually and collectively, any federal,
state, municipal, local or foreign government, including each of their
respective branches, departments, agencies, Commissions, boards, bureaus,
courts, instrumentalities or other government appointed, quasi-governmental or
regulatory authority, reporting entity or agency, domestic, foreign or
supranational, including without limitation AHCA and CMS.

“Governmental Program” means any Federal, state or local governmental
reimbursement programs administered through a Governmental Authority or
contractor thereof (including a Governmental Program Payor), including without
limitation the Medicaid program or any successor program.

“Governmental Program Payor” means a Payor which has a contract with a
Governmental Authority to arrange for the provision of health care and/or
related services to Governmental Program beneficiaries, and who receives
reimbursement from a Governmental Authority to do so, and without limitation
includes Payors under such contracts with AHCA for the Medicaid program.

“Governmental Program Payor Contract” means an agreement between Seller and a
Governmental Program Payor.

“Hazardous Substance” means any and all substances, wastes, materials,
pollutants, contaminants, compounds, chemicals or elements which are defined or
classified as a “hazardous substance”, “hazardous material”, “toxic substance”,
“Hazardous Waste”, “pollutant”,

ANNEX I-4

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

“contaminant” or words of similar import under any Environmental Law, including,
without limitation, all dibenzodioxins and dibenzofurans, polychlorinated
biphenyls (PCBs), petroleum hydrocarbon, including crude oil or any derivative
thereof, any radioactive material, raw materials used or stored at the
Facilities or building components that are regulated by Environmental Laws,
including asbestos-containing materials in any form, radon gas and mold of a
type or in amounts that may present a health hazard.

“Hazardous Waste” is as defined in the Resource Conservation and Recovery Act
(RCRA), 42 U.S.C. Section 6901 et seq., and any equivalent state laws where the
Facilities and Property are located.

“Healthcare Approvals” means (a) the issuance of all Operating Licenses listed
on Attachment 1.1 to this Annex 1 by AHCA or its applicable subagencies
(collectively, the “Required Operating Licenses”) or (b) written assurance from
AHCA or its applicable subagencies with respect to the Required Operating
Licenses authorizing the parties to proceed with the transactions and changes of
ownership and operations contemplated hereby.

“Healthcare Laws” means any and all federal, state, and locals Laws, including
regulations, rules, judgments, orders, manuals, program transmittals, and
official guidance from any Government Authorities, relating to healthcare
regulatory matters, including 42 U.S.C. §§ 1320a-7, 7a, and 7b, which are
commonly referred to as the “Federal Fraud Statutes”; 42 U.S.C. § 1395nn, which
is commonly referred to as the “Stark Statute”; 31 U.S.C. §§ 3729-3733, which is
commonly referred to as the “federal False Claims Act”; the Program Fraud Civil
Remedies Act, 31 U.S.C. §§ 3801-3812; the Anti-Kickback Act of 1986, 41 U.S.C.
§§ 8701-8707; HIPAA and its implementing regulations at 45 C.F.R. Parts 160, 162
and 164 and any other rules or regulations promulgated thereunder and similar
state laws; 18 U.S.C. § 1347; the Patient Protection and Affordable Care Act of
2010 (Public Law 111-148); Government Programs; any federal, state, or local
statute or regulation relevant to false statements or claims, or the respective
state-law counterparts of any of the foregoing; and all applicable federal,
state, and local licensing, certificate of need, corporate practice of medicine,
and fee-splitting Laws applicable to the health care items and services that the
Seller or the Facilities provide.

“HIPAA” means collectively, and as may from time-to time maybe amended, the (i)
Health Insurance Portability and Accountability Act of 1996 (the “Act”), (ii)
applicable provisions of the Health Information Technology for Economic and
Clinical Health Act as incorporated in the American Recovery and Reinvestment
Act of 2009, and (iii) their accompanying regulations, including the Privacy
Rule and the Security Rule. The “Privacy Rule” means the Standards for Privacy
of Individually Identifiable Health Information at 45 CFR, part 160 and part
164, subparts A and E, and it provides Federal law privacy protections for an
individual’s protected health information (“PHI”) held by entities subject to
HIPAA requirements (each, a “covered entity”) such describes patient rights with
respect to their PHI. The Security Rule means the HIPAA Security Standards (45
C.F.R. Parts 160, 162, and 164), and requires covered entities and their
business associates that use PHI to use administrative, physical, and technical
safeguards to assure the confidentiality, integrity, and availability of
electronic PHI.

ANNEX I-5

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“Improvements” means Seller’s fee simple title in and to all buildings,
structures, facilities, amenities, driveways, walkways, parking lots and other
improvements located on the Land.

“Indemnified Person” shall have the meaning set forth in Section 9.5.

“Indemnifying Person” shall have the meaning set forth in Section 9.5.

“Inspection Period” shall have the meaning set forth in Section 4.1.1.

“Intellectual Property” means, collectively, all: (i) United States or foreign
patents, patent applications, patent disclosures and all renewals, reissues,
divisions, continuations, extensions or continuations-in-part thereof; (ii)
trademarks, service marks, trade dress, trade names, fictitious names, corporate
names and registrations and applications for registration thereof; and (iii)
copyrights (registered or unregistered), registrations and applications for
registration thereof, including all renewals, derivative works, enhancements,
modifications, updates, new releases or other revisions thereof.

“Land” means all of those certain tracts of land and all other rights, title and
interest of Seller in and to the parcels of real property described on Exhibit
A, and all rights, privileges and appurtenances pertaining thereto.

“Law” or “Laws” means all applicable local, Federal and state laws, statutes,
rules, regulations, ordinances and any amendments thereto, as well as each, any,
and all legal directives, orders, and any amendments thereto, of all local,
Federal, state and other governmental and regulatory bodies, including any
Governmental Authority, administrative tribunals, and courts which have
jurisdiction over the operation and conduct of the Business.

“Licensing Surveys” shall mean survey reports, waivers of deficiencies, plans of
correction, investigation notices, any other investigation reports and similar
correspondence or documentation issued by the applicable Governmental Authority
with respect to any Facility in respect of any Operating Licenses.

“Management Agreements” means, collectively, those certain Management Agreements
more particularly described on Exhibit P attached hereto, as they may have been
amended, restated or otherwise modified from time to time.

“Manager” means Holiday AL NIC Management, LLC and its Affiliates.

“Material Adverse Effect” means any result, occurrence, fact, event, change or
effect that, individually or in the aggregate with other such results,
occurrences, facts, events, changes, or effects, has had or would have a
materially adverse effect on (a) the business, affairs, assets, results of
operations or financial condition of the Facilities and the Separate Facilities,
taken as a whole, or (b) the ability of Seller, Existing Operator and the
Manager to consummate the Transactions; provided, however, that for purposes of
clause (a) “Material Adverse Effect” shall not include any event, circumstance,
change or effect to the extent arising out of or resulting from (i) any failure
of Seller or Existing Operator to meet any projections or forecasts (it being
understood and agreed that any event, circumstance, change or effect giving rise
to such failure

ANNEX I-6

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shall be taken into account in determining whether there has been a Material
Adverse Effect), (ii) any events, circumstances, changes or effects that affect
the senior living industry in the United States generally, (iii) any changes in
the United States or global economy or capital, financial or securities markets
generally, including changes in interest or exchange rates, (iv) any changes in
the applicable laws in the geographic regions in which Seller and Existing
Operator operate or own or lease properties, (v) the commencement, escalation or
worsening of a war or armed hostilities or the occurrence of acts of terrorism
or sabotage, (vi) the negotiation, execution or announcement of this Agreement,
or the consummation or anticipation of the Transactions (including the identity
of the Purchaser and the impact of any of the foregoing on relationships,
contractual or otherwise, with tenants, suppliers, lenders, investors, future
partners or employees), (vii) the taking of any action permitted by the terms of
this Agreement, or the failure to take any action expressly prohibited by, this
Agreement, or the taking of any action at the written request or with the prior
written consent of Purchaser, (viii) earthquakes, hurricanes or other natural
disasters, (ix) any damage or destruction of the Property (or any portion
thereof) that is substantially covered by insurance, or (x) changes in law or
generally accepted accounting principles, which in the case of each of clauses
(ii), (iii), (v) and (x) do not disproportionately affect Seller and Existing
Operator, taken as a whole, relative to other participants in the senior living
industry in the United States, and in the case of clauses (iv) and (viii) do not
disproportionately affect Seller and Existing Operator, taken as a whole,
relative to other participants in the senior living industry in the geographic
regions in which Seller and Existing Operator operate or own or lease
properties.

“Material Contracts” shall have the meaning set forth in Section 6.1.4.

“Medicaid” means the Florida Medicaid Program as administered by the AHCA.

“Miscellaneous Property Assets” means all right, title and interest of Seller in
and to (a) all Intellectual Property related to, used in connection with, or
necessary for, the ownership, operation or management of any of the Facilities,
including all of Seller’s or Existing Operator’s rights in and to the Facility
names identified in Schedule I, but excluding the Seller Marks (b) all telephone
and facsimile numbers relating to the Facilities (including all “800” numbers)
and all e-mail addresses and domain names associated with the Facilities, (c)
all post office box addresses associated with the Facilities; and all
non-proprietary and transferable software or other computer programs related to,
used in connection with, or necessary for, the ownership, operation or
management of any of the Facilities, (d) all books, data and records (including
electronic versions thereof) maintained in connection with the ownership,
operation or management of any of the Facilities, (e) all warranties, plans,
drawings, customer lists, prospect lists, petty cash on hand at the Facilities,
transferable non-proprietary software, and all other items of intangible
personal property maintained in any form or format, relating to the ownership,
operation or management of the Property or the Facilities, and (f) all goodwill
associated with the businesses operated at the Facilities.

“Monetary Lien” shall have the meaning set forth in Section 4.3.1.

“Mortgage” shall have the meaning set forth in Section 4.4.

“MTA” shall have the meaning set forth in Section 7.25.

ANNEX I-7

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“National Contract” means any national contracts entered into by Seller,
Existing Operator, Manager or any Affiliate of Seller relating to the Property
and other facilities that are not included in the Property.

“New Exception” shall have the meaning set forth in Section 4.5.3.

“Notice of Third Party Claim” shall have the meaning set forth in Section 9.5.1.

“Operating Assets” means (a) all rights, title, interest and privileges of
Seller or Existing Operator, whether legally or beneficially held, in and to any
and all Assigned Contracts, Resident Agreements, and Permits, to the extent such
Permits are, with or without consent, assignable or transferable (other than
Excluded Permits), and (b) all right, title and interest of Seller or Existing
Operator in and to the Miscellaneous Property Assets, but specifically excluding
the Excluded Assets.

“Operating Licenses” means the Permits required by AHCA in order to operate the
Facilities, and all certificates of need (if any) or certificates of authority
required by AHCA to operate the Facilities.

“Outside Claim Date” shall have the meaning set forth in Section 9.1.

“Payor” means any third party, which is not a Governmental Authority, and which
provides for reimbursement to Seller for health care and/or    services rendered
or to be rendered to a Resident, and without limitation includes a health
insurer, a health maintenance organization, and any managed care organization
not licensed as either of the foregoing, and which includes any Governmental
Program Payor.

“Permits” means all healthcare permits, licenses, agreements, provider numbers,
approvals, certificates, certifications, accreditation and authorizations issued
by or required by any Governmental Authority, necessary to own, operate or
manage (including post-Closing to the extent permitted) the Facilities as
currently operated in the ordinary course, including, without limitation, those
agreements necessary for the Facilities to secure reimbursement for ALF and
related services from any Governmental Program, including without limitation
provider agreements with and provider numbers under the Medicaid (including its
fiscal intermediaries) program, and from any Payor, including without limitation
any Governmental Program Payor.

“Permitted Exceptions” shall have the meaning set forth in Section 4.3.

“Program Reimbursements” means any deficiencies, recoupments, reimbursements,
audit adjustments, disallowances, unresolved claims or disputes or other amounts
owed or alleged to be owed to any Governmental Authorities or any other third
parties under any Provider Agreements or Third Party Payor Programs.

“Prohibited Person” means any of the following: (a) a person or entity that is
listed in the Annex to, or is otherwise subject to the provisions of, Executive
Order No. 13224 on Terrorist Financing (effective September 24, 2001) (the
“Executive Order”); (b) a person or entity owned or controlled by, or acting for
or on behalf of any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (c) a person or

ANNEX I-8

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entity that is named as a “specially designated national” or “blocked person” on
the most current list published by the U.S. Treasury Department’s Office of
Foreign Assets Control (“OFAC”) at its official website,
http://www.treas.gov/offices/enforcement/ofac; (d) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or (e) a person or entity that is affiliated with any person or entity
identified in clause (a), (b), (c) and/or (d) above.

“Property” means (a) the Real Property Assets, and (b) the Operating Assets, but
specifically excluding the Excluded Assets.

“Property Contracts” means all contracts, agreements, equipment leases, purchase
orders, maintenance, service, and similar contracts, regardless of whether
entered into by Seller, Existing Operator, Manager or an Affiliate of either,
which relate exclusively to the ownership, maintenance, on-going repair and/or
operation of the Property (or any portion thereof), whether or not assignable by
their terms, including any Commercial Lease, but specifically excluding (i) any
Resident Agreements, (ii) National Contracts, and (iii) any property management
contract for the Property.

“Property Contracts List” shall have the meaning set forth in Section 6.1.4.

“Property Statements” shall mean (i) the consolidated income statements and
balance sheets for Seller for the calendar years ended 2015 and 2016
(collectively, the “Year-End Financial Statements”); (ii) the unaudited,
consolidated income statements and balance sheets as of and for the three (3)
month period ended March 31, 2017 (the “Most Recent Financial Statements”;
collectively, with the Year-End Financial Statements, the “Financial
Statements”); and (iii) a schedule of capital improvements to each Facility that
were completed in the fiscal years ended 2015 and 2016 and the period covered by
the Most Recent Financial Statements, in each case identified in Schedule
6.1.14, including the notes and schedules thereto, if applicable.

“Proratable Items” shall have the meaning set forth in Section 5.5.1.

“Purchase Price” means the consideration to be paid by Purchaser to Seller for
the purchase of the Property pursuant to Section 2.2.

“Purchaser” shall have the meaning set forth in the introductory paragraph.

“Purchaser Indemnified Persons” shall have the meaning set forth in Section 9.2.

“Purchaser Parties” shall have the meaning set forth in Section 4.1.1.

“Purchaser’s Consultants” shall mean any consultant, engineer or inspector
retained by Purchaser.

“Purchaser’s Knowledge” or words of similar import in this Agreement, shall be
deemed to refer exclusively to matters within the actual knowledge of Danny
Prosky upon reasonable investigation with respect to any of the representations
and warranties contained in this Agreement.

ANNEX I-9

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“Purchaser’s Representations” means the representations and warranties set forth
in Section 6.2.

“Real Property Assets” means (a) the Land and Improvements, (b) all right, title
and interest of Seller in and to any alleys, strips or gores adjoining the Land,
any easements, rights of way or other interests in, on, under or to, any land,
highway, street, road or right of way, open or proposed, in, under, across,
abutting or benefiting the Land, and any pending or future action for
condemnation, eminent domain or similar proceeding, or for any damage to the
Land or Improvements by reason of a change of grade thereof, and all other
accessions, appurtenant rights and privileges of Seller in and to the Land and
the Improvements, (c) and all right, title and interest of Seller and Existing
Operator in and to the Fixtures and Tangible Personal Property, and (d) all
right, title and interest of Seller in and to the books, records, documents,
surveys, reports, drawings, plans, specifications, diagrams, environmental
assessments and other architectural or engineering work product related to the
Land and Improvements, but specifically excluding the Excluded Assets.

“Records Disposal Notice” shall have the meaning set forth in Section 5.5.10.

“Records Hold Period” shall have the meaning set forth in Section 5.5.10.

“Related Party” means, with respect to any Person, any of the shareholders,
members or partners of such Person, and any officers, managers or directors of
such Person, as well as any immediate family member of any such shareholders,
members, partners, officers, managers or directors, or any Affiliate of the
foregoing.

“Remove” shall mean, with respect to any matter disclosed in the Title
Documents, that Seller causes the Title Company to remove or affirmatively
insure over such matter as an exception to the applicable Title Policy for the
benefit of Purchaser, whether such removal or insurance is made available, at
the sole discretion of Seller, in consideration of payment, bonding, indemnity
of Seller or otherwise (provided that in the case of a mortgage or security
interest granted by Seller, “Remove” shall mean the delivery by the holder
thereof of a recordable cancellation or release or a payoff letter satisfactory
to the Title Company unconditionally obligating such holder to release or cancel
upon repayment at Closing of the loan secured thereby).

“Rent Roll” shall have the meaning set forth in Section 6.1.5.

“Rent Roll Review Period” shall have the meaning set forth in Section 4.6.

“Repairs” means demolition, restoration and/or replacement of all or any portion
of any Facility and the related Property that is reasonably necessary for the
continued operation of the any Facility as an assisted living facility.

“Required Consents” shall have the meaning set forth in Section 6.1.11.

“Resident” means any person or entity entitled to occupy any portion of the
Property under a Resident Agreement.

ANNEX I-10

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“Resident Agreement Form” shall have the meaning set forth in Section 3.1.6.

“Resident Agreements” means all leases, subleases and other occupancy contracts,
whether or not of record which provide for the use or occupancy of residential
space or facilities in any Facility and which are in force as of the Closing
Date.

“Resident Agreements Assignment” shall have the meaning set forth in Section
5.2.4.

“Seller” shall have the meaning set forth in the introductory paragraph.

“Seller Indemnifiable Damages” shall have the meaning set forth in Section 9.2.

“Seller Indemnified Persons” shall have the meaning set forth in Section 9.3.

“Seller Marks” means all words, phrases, slogans, materials, proprietary
software, proprietary systems, trade secrets, proprietary information and lists,
and other Intellectual Property owned or used by Seller, Existing Operator,
Manager, or any Affiliate of Seller, Existing Operator or Manager in the
marketing, operation or use of the Property (or in the marketing, operation or
use of any other properties managed by the Manager or owned by Seller, Existing
Operator or an Affiliate of either Manager, Existing Operator or Seller), except
that the “Seller Marks” shall not include the Facility names identified on
Schedule I and all trade names, service marks, and trademarks owned or used by
Seller or Existing Operator and related to, used in connection with, or
necessary for, the ownership, operation or management of any of the Facilities.

“Seller’s Deliveries” shall have the meaning set forth in Section 3.1.

“Seller’s Knowledge” or words of similar import in this Agreement, shall be
deemed to refer exclusively to matters within the actual knowledge of the Seller
Knowledge Individuals upon reasonable investigation with respect to the
representations and warranties contained in this Agreement (including due
inquiry of Facility Management).

“Seller’s Property-Related Files and Records” shall have the meaning set forth
in Section 5.5.10.

“Seller’s Representations” means the representations and warranties of Seller
and/or Existing Operator set forth in Section 6.1, in each case as modified by
the Disclosure Schedules in accordance with the first paragraph of Article VI
and the representations of NIC 4 Florida Owner LLC in the Guaranty.

“Senior Living Facility” shall mean, with respect to each Facility, the type of
facility identified in Schedule 6.1.12(a).

“Separate Facilities” shall mean the facilities identified on Schedule II.

“Separate PSA” shall mean that certain Purchase and Sale Agreement dated as of
even date herewith by and among certain Affiliates of Purchaser and certain
Affiliates of Seller pursuant to which such Affiliates of Seller shall sell, and
such Affiliates of Purchaser shall

ANNEX I-11

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purchase, the real property and certain related assets of the Separate
Facilities, on the terms and conditions set forth therein.

“Spring Haven Facility” shall have the meaning set forth in Section 5.5.11.

“Tax” shall mean all federal, state, local and foreign taxes including, without
limitation, income, gains, unemployment, withholding, payroll, social security,
real property, personal property, excise, sales, use and franchise taxes,
levies, assessments, imposts, duties, licenses and registration fees and charges
of any nature whatsoever, including interest, penalties and additions with
respect thereto and any interest in respect of such additions or penalties.

“Tax Return” shall mean any return, filing, report, form, statement,
declaration, questionnaire or other document filed or required to be filed for
any period with any taxing authority (whether domestic or foreign) in connection
with the calculation, determination, assessment, collection, or administration
of any Taxes whether or not payment is required to be made with respect to such
document).

“Third Party Claim” shall have the meaning set forth in Section 9.5.1.

“Third Party Reports” means any reports, studies or other information prepared
or compiled for Seller or Purchaser by any consultant or other third-party in
connection with Purchaser’s investigation of the Property including, without
limitation, the Third Party Reports identified on Exhibit O attached hereto.

“Title Commitment” shall have the meaning set forth in Section 4.2.

“Title Company” shall have the meaning set forth in Section 2.2.1.

“Title Documents” shall have the meaning set forth in Section 4.2.

“Title Policy” means, with respect to each Facility, a standard American Land
Title Association owner’s title insurance policy for the Land and Improvements
issued by the Title Company pursuant to the applicable Title Commitment, using
the current policy jacket customarily provided by the Title Company, in an
amount equal to that portion of the Purchase Price allocated to real property
relating to such Facility, subject only to the Permitted Exceptions.

“Title Update” shall have the meaning set forth in Section 4.5.

“Transaction Documents” shall have the meaning set forth in Section 6.1.1.

“Transactions” means any and all transactions contemplated by the terms of this
Agreement.

“Uncollected Rents” shall have the meaning set forth in Section 5.5.6.

“Updated Average Occupancy Rate” shall have the meaning set forth in Section
4.6.

“Update Objections” shall have the meaning set forth in Section 4.5.3.

ANNEX I-12