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Exhibit 10.1
 
PURCHASE AND SALE AGREEMENT

By And Among

THE OAKS BRADENTON, LLC,
a Delaware limited liability company
as “Buyer”

OAKS HOLDINGS, LLC,
a Florida limited liability company
as “Seller”

And

FIRST AMERICAN TITLE INSURANCE COMPANY,
a California corporation
as “Escrow Agent”

Dated as of

February [      ], 2009

 
 

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TABLE OF CONTENTS

     
Page
               
ARTICLE I TERMINOLOGY
1
 
1.1
Defined Terms
1
 
1.2
Additional Defined Terms
3
       
ARTICLE II PURCHASE AND SALE
5
 
2.1
Property
5
 
2.2
Assumption of Liabilities.
6
 
2.3
Purchase Price
6
 
2.4
Earnest Money Deposit
7
 
2.5
Adjustment of Purchase Price.
7
 
2.6
Escrow Agent.
8
       
ARTICLE III DUE DILIGENCE PERIOD
9
 
3.1
Due Diligence Period
9
 
3.2
Buyer’s Responsibilities
10
 
3.3
Continuing Diligence and Inspection Rights
10
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER
10
 
4.1
Organization; Good Standing of Seller
10
 
4.2
Organization; Good Standing of Landlord
10
 
4.3
Consent of Third Parties
10
 
4.4
Authority; Enforceability
10
 
4.5
Absence of Conflicts
11
 
4.6
No Judgments
11
 
4.7
No Governmental Approvals
11
 
4.8
Insurance
11
 
4.9
Litigation
11
 
4.10
Compliance with Laws
11
 
4.11
Environmental Matters
11
 
4.12
Assessments
12
 
4.13
Property Agreements
12
 
4.14
Licenses
12
 
4.15
Resident Agreements
12
 
4.16
Medicare; Medicaid
13
 
4.17
Condemnation
13
 
4.18
Condition of Property
13
 
4.19
Independent Property
13
 
4.20
Utilities Access
14
 
4.21
Zoning
14
 
4.22
FIRPTA
14
 
4.23
Interests; Title
14
 
4.24
Title Encumbrances
14
 
4.25
Affordable Housing Units
15

 
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TABLE OF CONTENTS (cont’d)

     
Page
                 
4.26
No New Survey Matters
15
 
4.27
Loans
15
 
4.28
Patriot Act Compliance
15
 
4.29
Broker’s or Finder’s Fees
15
 
4.30
Insolvency
15
 
4.31
Landlord’s Consent to Option Instruction
16
 
4.32
Compliance with Lease
16
       
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
16
 
5.1
Organization and Good Standing
16
 
5.2
Authorization and Binding Effect of Documents
16
 
5.3
Absence of Conflicts
17
 
5.4
Consents
17
 
5.5
Patriot Act Compliance
17
 
5.6
Broker’s or Finder’s Fees
17
       
ARTICLE VI OTHER COVENANTS
17
 
6.1
Conduct of Business Prior to the Closing
17
 
6.2
Notification of Certain Matters
18
 
6.3
Title; Additional Documents
19
 
6.4
Other Consents
19
 
6.5
Inspection and Access
19
 
6.6
Confidentiality.
19
 
6.7
Publicity
20
 
6.8
Reasonable Best Efforts
20
 
6.9
Reports
20
 
6.10
Post-Closing Obligations of Seller
20
 
6.11
No Other Representations or Warranties.
20
 
6.12
Noncompetition
21
 
6.13
Exclusivity
21
 
6.14
Exercise of Option and Delivery of Deed by Landlord
21
       
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE
21
 
7.1
Accuracy of Representations and Warranties; Closing Certificate.
21
 
7.2
Performance of Agreement
22
 
7.3
No Adverse Change
22
 
7.4
Conveyance of Real Property
22
 
7.5
Title Insurance and Survey.
22
 
7.6
Other Inspections
24
 
7.7
Delivery of Closing Documents
24
 
7.8
Licenses.
24
 
7.9
Termination of Existing Management Agreement.
25
 
7.10
Management Agreement
25

 
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TABLE OF CONTENTS (cont’d)

     
Page
                 
7.11
Governmental Approvals.
25
 
7.12
Third-Party Consents
25
 
7.13
Financing Contingency.
25
 
7.14
Guaranties.
26
       
ARTICLE VIII CONDITIONS PRECEDENT TO THE  OBLIGATION OF SELLER TO CLOSE
26
 
8.1
Accuracy of Representations and Warranties.
26
 
8.2
Performance of Agreements
26
 
8.3
Delivery of Closing Documents.
26
       
ARTICLE IX CLOSING
26
 
9.1
Closing Date and Place.
26
 
9.2
Deliveries of Seller
26
 
9.3
Deliveries of Buyer
28
 
9.4
Closing Costs
28
       
ARTICLE X INDEMNIFICATION
29
 
10.1
General
29
 
10.2
Indemnification by Seller
29
 
10.3
Indemnification by Buyer
29
 
10.4
Administration of Indemnification
30
       
ARTICLE XI DEFAULT AND TERMINATION
31
 
11.1
Right of Termination
31
 
11.2
Remedies upon Default.
32
 
11.3
Specific Performance
32
 
11.4
Obligations Upon Termination
33
 
11.5
Termination Notice
33
 
11.6
Sole and Exclusive Remedy
33
       
ARTICLE XII MISCELLANEOUS
33
 
12.1
Further Actions
33
 
12.2
Notices
33
 
12.3
Entire Agreement
35
 
12.4
Binding Effect; Benefits
35
 
12.5
Assignment
35
 
12.6
Governing Law
35
 
12.7
Amendments and Waivers
36
 
12.8
Joint and Several
36
 
12.9
Severability
36
 
12.10
Headings
36
 
12.11
Counterparts
36
 
12.12
References
36
 
12.13
Seller Disclosure Letter
36

 
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TABLE OF CONTENTS (cont’d)

     
Page
                 
12.14
Attorneys’ Fees
36
 
12.15
Section 1031 Exchange/Tax Planning
37
 
12.16
Casualty
37
 
12.17
Condemnation
37
 
12.18
Radon Gas
38
 
12.19
Limited Liability
38
 
12.20
Survival of Defined Terms
38
 
12.21
Time of Essence
38
 
12.22
No Third-Party Beneficiary
38
 
12.23
WAIVER OF JURY TRIAL
38

EXHIBITS TO THIS AGREEMENT

EXHIBIT A-1
Form of Guaranty

 
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TABLE OF CONTENTS OF SELLER DISCLOSURE LETTER

SCHEDULES

Schedule 2.1(b)
Excluded Personal Property

Schedule 2.1(c)
Excluded Property Agreements

Schedule 2.2(b)
Assumed Obligations

Schedule 4.3
Consents of Third Parties

Schedule 4.6
Judgments

Schedule 4.8
Seller’s Insurance

Schedule 4.9
Litigation, Proceedings and Investigations

Schedule 4.10
Compliance with Laws

Schedule 4.11
Environmental Matters

Schedule 4.15
Rent Roll and Resident Agreements

Schedule 4.18
Condition of the Property

Schedule 4.19
Independent Property

Schedule 4.20
Utilities Access

Schedule 4.23
Exceptions to Seller Ownership

Schedule 4.24
Title Encumbrances

Schedule 4.27
Loans

EXHIBITS

EXHIBIT A
Legal Description of the Property

EXHIBIT B
List of Property Agreements

EXHIBIT C
List of Licenses Required for the Property

EXHIBIT D
Form of Seller’s Counsel Opinion

EXHIBIT E
Rent Roll

EXHIBIT F
Form Resident Agreement

EXHIBIT G
Outstanding Citations

EXHIBIT H
Form of Audit Letter

 
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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated the [___] day of
February, 2009, by and among: THE OAKS BRADENTON, LLC, a Delaware limited
liability company, or its successors or assigns (collectively, the “Buyer”);
OAKS HOLDINGS, LLC, a Florida limited liability company (the “Seller” ”); and
FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation (“Escrow
Agent”).

RECITALS:

A.            Seller is the lessee of an assisted living facility known as
Windsor Oaks (the “Facility”), located at 2614 43rd Street West Bradenton,
Florida 34209, pursuant to a lease dated November 1, 2003 (the “Lease”) by and
between the Seller and HEALTH CARE REIT, INC., a Delaware corporation (the
“Landlord”).  The Lease relates to said assisted living facility, including all
furniture, fixtures, inventory, equipment and other personalty items owned by
the Landlord located therein.

B.             The Lease and the option letter given by Landlord to Seller dated
October 16, 2008 related thereto provides the Seller with an Option (the
“Option”) to purchase said assisted living facility and the real and personal
property associated therewith.

C.             Buyer desires to acquire, and Seller is willing to convey to
Buyer pursuant to the terms described herein (i) the above referenced real
property and personal property associated therewith owned by Landlord through
the exercise of its Option and (ii) other personal property associated therewith
owned by the Seller.

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

ARTICLE I
TERMINOLOGY

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

 Adjustment Amount:  The amount computed under Section 2.5 hereof.

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

 Applicable Law: Any federal, state, municipal, county, local, foreign or other
statute, law, ordinance, rule or regulation or any order, writ, injunction,
judgment, plan or decree of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, county, local, foreign or other.

 
 

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 Closing: The consummation of the purchase and sale of the Property in
accordance with the terms of this Agreement on the Closing Date or at such
earlier or later date and time as may be agreed upon by the parties.

 Code:  The Internal Revenue Code of 1986, as amended.

 Documents:  This Agreement, all Exhibits hereto, and all Exhibits and Schedules
contained in the Seller Disclosure Letter, and each other agreement, certificate
or instrument to be delivered pursuant to this Agreement.

 Due Diligence Period:  The period commencing on the Effective Date and ending
on March 31, 2009, during which time Buyer may, at reasonable times with prior
notice to Seller, (i) investigate the financial, legal, operational,
environmental and all other aspects of the Property as Buyer may desire, and
(ii) seek out sources of financing and/or investors, all in order to determine
whether to consummate the transactions contemplated by this Agreement or
terminate this Agreement.

 Effective Date:  The date first written above.

 Escrow Agent:  FIRST AMERICAN TITLE INSURANCE COMPANY, a California
corporation.

 GAAP:  Generally accepted accounting principles as applied in the United
States.

 Knowledge:  As used in this Agreement, the term “knowledge” when used to refer
to the knowledge of Seller shall mean the actual knowledge of any member,
manager, or officer of Seller, or any matter which any such person should have
knowledge of following inquiry to the Executive Director of the Facility or the
Chief Financial Officer of the Manager.

 Landlord: HEALTH CARE REIT, INC., a Delaware corporation.

 Licenses:  All certificates, licenses, and permits issued by governmental
authorities which are required to be held by an owner or tenant in connection
with the ownership, use, occupancy, operation, and maintenance of the Property
as an assisted living facility.

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

 Loss:  Any and all costs, obligations, liabilities, demands, claims, settlement
payments, awards, judgments, fines, penalties, damages and reasonable
out-of-pocket expenses, including court costs and reasonable attorneys’ fees,
whether or not arising out of a third-party claim.

 
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 Manager: LEGEND SENIOR LIVING, LLC, a Kansas limited liability company.

 Permitted Lien:  Any (i) statutory liens that secure a governmentally required
payment, including without limitation Taxes, not yet due, (ii) zoning
regulations and restrictive covenants and easements of record that do not
detract in any material respect from the present use of the Property and do not
materially and adversely affect, impair or interfere with the use of any
property affected thereby, (iii) public utility easements of record, in
customary form, to serve the Property, and (iv) any other condition of title as
may be approved by Buyer in writing prior to the end of the Due Diligence
Period.

 Post-Closing Licensee:  The Buyer, Tenant or their designee to whom all
Licenses will be transferred or otherwise obtained in accordance with Applicable
Law for the operation of the Property as an assisted living facility.

 Seller Disclosure Letter: The letter dated the same date as this Agreement
given by the Seller to the Buyer and containing the Exhibits and Schedules
referenced herein.

 Taxes:  All federal, state, local and foreign taxes including, without
limitation, income, gains, transfer, unemployment, withholding, payroll, social
security, real property, personal property, excise, sales, use and franchise
taxes, levies, assessments, imposts, duties, licenses and registration fees and
charges of any nature whatsoever, whether or not recorded, including interest,
penalties and additions with respect thereto and any interest in respect of such
additions or penalties, but excluding all transfer, conveyance, intangibles,
mortgage transfer, and documentary stamp taxes payable in connection with the
transactions contemplated by this Agreement.

 Tenant:  That entity chosen by Buyer to lease the Property upon purchase by the
Buyer.

 Title Insurer:  The Title Insurer is as follows:

First American Title Insurance Company
111 North Orange Avenue, Suite 1285
Orlando, Florida 32801
Phone: (407) 843-8674
Fax:  (888) 216-9921
Attn.:  Scott Brown
E-mail: scobrown@firstam.com

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

 
Accrued Employee Benefits
2.2
   
Agreement
Preamble
   
Assumed Obligations
Section 2.2(b)
 

 
3

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Buyer
Preamble
   
CERCLA
Section 4.11
   
Closing
Section 9.1
   
Closing Date
Section 9.1
   
Deed
Section 9.2(b)
   
Environmental Laws
Section 4.11
   
Escrowed Funds
Section 2.6
   
Extended Closing Date
Section 9.1
   
Governmental Payor Programs
Section 4.16
   
Guaranty
Section 7.14
   
Improvements
Section 2.1(a)
   
Indemnified Party
Section 10.4(a)
   
Indemnifying Party
Section 10.4(a)
   
Land
Section 2.1(a)
   
Management Agreement
Section 7.9
   
OFAC
Section 4.28
   
Patriot Act
Section 4.28
   
Permitted Buyer-Assignee
Section 12.5
   
Permitted Exception
Section 7.5(b)
   
Personal Property
Section 2.1(a)
   
Property
Section 2.1
   
Property Agreements
Section 2.1(c)
   
Proration Date
Section 2.5(a)
   
Proration Schedule
Section 2.5(a)
   
Purchase Price
Section 2.3
   
Real Property
Section 2.1(a)
   
Records
Section 6.10
   
Required Cure Items
Section 7.5(b)
   
Resident Agreements
Section 2.1(d)
   
Resident Deposits
Section 2.1(d)
   
SEC
Section 6.6(c)
   
Seller
Preamble
   
Survey
Section 7.5(e)
   
Title Commitment
Section 7.5(a)
   
Title Defect
Section 7.5(b)
   
Title Expenses
Section 9.4
   
Title Notice
Section 7.5(b)
   
Transaction Costs
Section 9.4
 

 
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ARTICLE II
PURCHASE AND SALE

2.1            Property.  Upon and subject to the terms and conditions provided
herein, at Closing, Seller will sell, transfer, assign and convey to Buyer, and
Buyer will purchase from Seller the following (collectively, the “Property”):

(a)            Real Property.  All of Seller’s right, title, and interest in and
to that certain parcel of real property consisting of land (“Land”) and all
buildings, structures, fixtures and other improvements (“Improvements”) located
thereon pursuant to the Option.  The Land is more particularly described on
Exhibit A of the Seller Disclosure Letter.  The Land and Improvements
(collectively, the “Real Property”) shall be deemed to include all licenses, and
all rights-of-way, beneficial easements and appurtenances related to the Real
Property.  

(b)            Personal Property.  All furnishings, machinery, equipment,
vehicles, supplies, inventory, linens, medicine, foodstuffs, consumable and
other personal property of any type or description, including, without
limitation, all beds, chairs, sofas, wheelchairs, tables, kitchen and laundry
equipment associated with and present at the Property (collectively, the
“Personal Property”), with the exception of any personal property described in
Schedule 2.1(b) of the Seller Disclosure Letter. 

(c)            Property Agreements.  Unless specifically excluded and listed on
Schedule 2.1(c) of the Seller Disclosure Letter, all rights of Seller in, to and
under all contracts, leases, agreements, commitments and other arrangements, and
any amendments, modifications, supplements, renewals and extensions thereof,
used or useful in the operation of the Property made or entered into by Seller
as of the Effective Date, or between the Effective Date and the Closing in
compliance with this Agreement (the “Property Agreements”).  Notwithstanding the
foregoing, Property Agreements expressly excludes any contracts, leases,
agreements, commitments and other arrangements, and any amendments,
modifications, supplements, renewals and extensions entered into by Seller after
the Effective Date and prior to the Closing in breach of Section 6.1, and any
Property Agreements for which consents to the assignment thereof to the Buyer
have not been obtained as of the Closing, unless waived by Buyer.  Buyer shall
have no obligation under the Property Agreements unless such Property Agreements
are listed on Schedule 2.2(b) of the Seller Disclosure Letter.

(d)            Resident Agreements.  All rights of Seller in, to and under all
occupancy, residency, leases, tenancy and similar written agreements entered
into in the ordinary course of business with residents of the Property,
including any amendments, modifications, supplements, renewals and extensions
thereof (“Resident Agreements”), and all deposits, initial service fees and
advances of any kind or nature from any resident of the Property (“Resident
Deposits”).

(e)            Records.  True and complete copies of all the books, records,
accounts, files, logs, ledgers, journals and architectural, mechanical and
electrical plans and specifications pertaining to or used in the operation of
the Property, however such data is stored.

(f)             Licenses.  Any and all Licenses now held in the name of the
Seller, or any Affiliate(s) of the Seller, and any renewals, extensions,
amendments or modifications thereof.

 
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(g)            Claims and Causes of Action.  Rights in and to any claims or
causes of action to the extent they are in the nature of enforcing a guaranty,
warranty, or a contract obligation to complete improvements, make repairs, or
deliver services to the Property.

(h)            Any and all rights of Seller or its Affiliates with respect to
the use of (a) all trade names, trademarks, service marks, copyrights, patents,
jingles, slogans, symbols, logos, inventions, computer software, operating
manuals, designs, drawings, plans and specifications, marketing brochures, the
“Oaks” name, logo, symbol, trademark and web site, or other proprietary
material, process, trade secret or trade right used by Seller or its Affiliates
in the operation of the Property and (b) all registrations, applications and
licenses for any of the foregoing.  Buyer shall not acquire any rights from
Seller to the name “Windsor.” Notwithstanding the foregoing, Buyer and
Post-Closing Licensee are hereby granted a royalty-free, non-exclusive license
to use the “Windsor” name after the Closing for so long as the Manager remains
the manager of the Facility and for a reasonable transition period
thereafter.  The last sentence of this Section 2.1(h) shall survive the Closing.

2.2            Assumption of Liabilities.

(a)            Buyer is assuming no liabilities attributable to the operation or
ownership of the Property which accrued or occurred on or prior to the Closing,
all of which Seller shall pay, discharge and perform when due. Specifically,
without limiting the foregoing, Buyer shall not assume (a) any claim, action,
suit, or proceeding pending as of the Closing or any subsequent claim, action,
suit, or proceeding arising out of or relating to any event occurring prior to
Closing, with respect to the manner in which Seller conducted its businesses on
or prior to the Closing (b) any liability for Taxes other than real property
taxes from and after Closing, or (c) any liability under any Property
Agreements, except for the Assumed Obligations listed in Schedule 2.2(b) of the
Seller Disclosure Letter.

(b)            Buyer acknowledges that, effective as of the Closing, Buyer shall
assume and undertake to pay, discharge, and perform only the liabilities and
obligations of Seller under the Property Agreements listed in Schedule 2.2(b) of
the Seller Disclosure Letter (but not the Property Agreements which are entered
into after the Effective Date hereof not in compliance with this Agreement or
Property Agreements for which consents to the assignment thereof to the Buyer
hereunder have not been obtained as of the Closing), to the extent such
liabilities and obligations arise during and relate to any period from and after
the Closing (collectively, the “Assumed Obligations”).

(c)            Assumed Obligations shall not include, and Buyer does not assume
any liability related to, any accrued vacation or other accrued paid time off or
benefits for the employees of the Property, including without limitation those
Employees who will continue to be employed at the Property after the Closing
(the “Accrued Employee Benefits”), which shall be the responsibility of the
Seller and/or Manager and the remuneration of any party for, or payment of, any
such Accrued Employee Benefits shall not constitute an expense of the Facility
under the Management Agreement (as herein defined).

2.3            Purchase Price.  The purchase price for the Property shall be an
amount equal to FOUR MILLION FIVE HUNDRED THOUSAND AND NO/100 U.S. DOLLARS
($4,500,000.00), (the “Purchase Price”), plus or minus (whichever is applicable)
the Adjustment Amount, of which: (a) ONE MILLION NINE-HUNDRED SEVENTEEN THOUSAND
FIVE HUNDRED AND NO/100 U.S. DOLLARS ($1,917,500.00) shall be paid to Landlord
for the purchase of the Real Property pursuant to the terms of the Option and
the Option Instruction, and (b) the balance of TWO MILLION FIVE-HUNDRED EIGHTY
TWO THOUSAND FIVE HUNDRED AND NO/100 U.S. DOLLARS ($2,582,500.00) shall be paid
to Seller as consideration for assignment of the Option and for the Purchased
Property other than the Real Property, all of which shall be paid by Buyer at
Closing via wire transfer of immediately available funds.

 
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2.4            Earnest Money Deposit. Upon expiration of the Due Diligence
Period and provided Buyer has not terminated this Agreement, Buyer shall deposit
ONE HUNDRED THOUSAND AND NO/100 U.S. DOLLARS ($100,000.00) (the “Earnest Money
Deposit”) with Escrow Agent.

(a)            The Earnest Money Deposit shall be refunded to Buyer in the event
of a termination of this Agreement pursuant to Sections 11.1(b), 11.1(c),
11.1(e), or 11.2(a)(i) below.

(b)            The Earnest Money Deposit shall be nonrefundable to the Buyer in
the event there is a termination of this Agreement pursuant to Sections 11.1(d)
or 11.2(b) below.

(c)            Upon Closing, the Earnest Money Deposit shall be applied to the
Purchase Price.

2.5            Adjustment of Purchase Price.

(a)            All income and expenses (including prepaid expenses) of the
Property shall be prorated on a daily basis between Seller and Buyer as of 11:59
p.m., on the date (the “Proration Date”) immediately preceding the
Closing.  Such items to be prorated shall include, without limitation:

 
(i)
Payments under Assumed Obligations, if any;

 
(ii)
The amount of the Accrued Employee Benefits;

 
(iii)
Utility charges, if any, based on utility charges for the month immediately
preceding the Closing; and

 
(iv)
Real property taxes.

Buyer and Seller shall prepare a proposed schedule (the “Proration Schedule”)
prior to Closing, that shall include the items listed above and any other
applicable income and expenses with regard to the Property.  Seller and Buyer
will use all reasonable efforts to finalize and agree upon the Proration
Schedule at least two (2) business days prior to Closing.

(b)            Any escrow accounts held by any utility companies, and any cash
deposits made by Seller or Seller’s Affiliates prior to Closing to secure
obligations under Assumed Obligations shall be either paid to Seller or, if
assigned to Buyer, Seller shall receive a credit at Closing for any such
deposits.

 
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(c)            With respect to any amounts held by Seller in a resident escrow
or trust account under any Property Agreement, at or promptly following Closing,
Seller shall return the same to the depositor thereof (to the extent the amounts
held in any such accounts have not been applied against amounts owing by the
depositor thereof in accordance with the terms of the applicable Property
Agreement).

(d)            Seller shall receive all income from and shall be responsible for
all expenses of the Property attributable to the period prior to the Proration
Date, unless otherwise provided for in this Agreement.  In the event Buyer
receives any payment from a tenant for rent due for any period prior to the
Proration Date or payment of any other receivable of Seller, Buyer shall forward
such payment to Seller.

(e)            Buyer shall receive all income from and shall be responsible for
all expenses of the Property attributable to the period from and after the
Proration Date, unless otherwise provided for in this Agreement.  In the event
Seller or Seller’s Affiliates receive any payment from a tenant for rent due for
any period from and after the Proration Date, Seller shall forward such payment
to Buyer.

(f)             The parties agree that any amounts that may become due under
this Section 2.5 shall be paid at Closing as can best be determined.  A
post-Closing reconciliation of pro-rated items shall be made by the Buyer and
Seller within ninety (90) days after Closing and any amounts due at that time
shall be promptly forwarded to the respective party in a lump sum payment.  Any
additional amounts which may become due after such determination shall be
forwarded at the time they are received.  Any amounts due under this Section 2.5
which cannot be determined within ninety (90) days after Closing shall be
reconciled as soon thereafter as such amounts can be determined.  Buyer and
Seller agree that each shall have the right to audit the records of the other
for up to one (1) year following Closing in connection with any such
post-Closing reconciliation.

(g)            Buyer shall receive a credit towards the Purchase Price for any
obligations as otherwise expressly agreed by the Buyer and Seller.

(h)            This Section 2.5 shall survive the Closing.

2.6            Escrow Agent.

(a)            By its execution and delivery of this Agreement, Escrow Agent
agrees to be bound by the terms and conditions in Section 2.4 of this Agreement
to the extent applicable to its duties, liabilities and obligations as “Escrow
Agent.”  Escrow Agent shall hold and dispose of the funds deposited with the
Escrow Agent pursuant to this Agreement (“Escrowed Funds”) in accordance with
the terms of this Agreement.  Escrow Agent shall incur no liability in
connection with the safekeeping or disposition of the Escrowed Funds for any
reason other than Escrow Agent’s breach of contract, willful misconduct or gross
negligence.  Escrow Agent shall be reimbursed by Buyer and Seller, jointly and
severally, for all out-of-pocket costs and expenses incurred in connection with
its obligations hereunder.  If Escrow Agent is in doubt as to its duties or
obligations with regard to the Escrowed Funds, or if the Escrow Agent receives
conflicting instructions from Buyer and Seller with respect to the Escrowed
Funds, the Escrow Agent shall not be required to disburse the Escrowed Funds and
may, at its option, continue to hold the Escrowed Funds until both Buyer and
Seller agree as to their disposition, or until a final judgment is entered by a
court of competent jurisdiction directing their disposition, or the Escrow Agent
may interplead the Escrowed Funds in accordance with the laws of the State of
Florida.  Escrow Agent shall not be responsible for the preservation of
principal or any interest on the Escrowed Funds except as is actually earned, or
for the loss of any interest or principal resulting from the withdrawal of the
Escrowed Funds prior to the date interest is posted thereon.

 
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(b)            The Escrow Agent may resign upon written notice to the Seller and
Buyer.  If a successor escrow agent is not appointed by the Seller and Buyer
within this thirty (30) day period, the Escrow Agent may, but shall have no duty
to, petition a court of competent jurisdiction to name a successor.  If no
successor escrow agent is appointed within thirty (30) days after such written
notice, the Escrow Agent may withhold performance by it pursuant to Section
2.6(a) until such time as a successor escrow agent is appointed and, at such
time, the Escrow Agent shall deliver the Escrowed Funds or other documents,
instruments or items, if any, delivered to the Escrow Agent hereunder to any
such successor escrow agent; provided, however, the Escrow Agent shall act in
accordance with any joint written instructions from the Seller and Buyer.

(c)            The Escrow Agent may be removed, with or without cause, by the
Buyer and Seller acting jointly at any time by providing written notice to the
Escrow Agent.

(d)            This Section 2.6 shall survive the Closing or the expiration or
any termination of this Agreement.

ARTICLE III
DUE DILIGENCE PERIOD

3.1            Due Diligence Period.  During the Due Diligence Period, Buyer
shall have the right to a complete physical inspection of the Property as the
Buyer deems appropriate to review and evaluate the Property, the nature and
extent of the Property, and operations of the Property, and all rights and
liabilities related thereto.  In consideration of the execution of this
Agreement, Seller has provided certain requested items to facilitate such review
and evaluation.  Buyer may request that other items be provided by Seller in
addition to those already provided, which items shall be mutually agreed upon by
the Buyer and Seller in their reasonable discretion.  During the Due Diligence
Period, Buyer shall have reasonable access to the Property at all reasonable
times during normal business hours for the purpose of conducting reasonably
necessary tests, including surveys and architectural, engineering, geotechnical
and environmental inspections and tests, provided that, when practicable, (a)
Buyer will give Seller prior notice of any such inspection or test and (b) all
such tests shall be conducted by Buyer in compliance with Buyer’s
responsibilities set forth in Section 3.2 below.  If Closing occurs, the parties
have agreed to share certain expenses as provided in Section 9.4
below.  Otherwise, except as otherwise expressly set forth herein, Buyer shall
bear its own cost of all such inspections or tests.

 
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3.2            Buyer’s Responsibilities.  In conducting any inspections,
investigations or tests of the Property, Buyer shall (i) not unreasonably
disturb the tenants or interfere with their use of the Property; (ii) not
materially or unreasonably interfere with the operation and maintenance of the
Property; (iii) not materially damage any part of the Property or any personal
property owned or held by any tenant or any third party; (iv) not injure or
otherwise cause bodily harm to Seller or its agents, guests, invitees,
contractors and employees or any tenants or their guests or invitees; (v) comply
in all material respects with all Applicable Laws; and (vi) not permit any Liens
to attach to the Property by reason of the exercise of its rights hereunder.

3.3            Continuing Diligence and Inspection Rights.  Following the
expiration of the Due Diligence Period, and prior to the Closing or any earlier
termination of this Agreement, at reasonable times and upon reasonable notice,
Buyer or Buyer’s agent(s), consultants, or other retained professionals shall
have the right, at Buyer’s expense, to perform or complete such further
inspections and assessments of the Property as Buyer deems necessary or
desirable to comply with Buyer’s internal requirements or the requirements of
Buyer’s lenders, investors or members, including, without limitation, further
inspection of environmental and structural aspects, assessments of the
compliance of the Property with all Applicable Laws, and customary pre-closing
walk-throughs; provided, however, that nothing in this Section 3.3 shall extend
the Due Diligence Period.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer as of the Effective Date
and as of the Closing as follows:

4.1            Organization; Good Standing of Seller.  Seller is a limited
liability company, validly existing and in good standing under the laws of the
State of Florida, and is duly qualified to do business in the State of Florida,
with all requisite company power and authority to carry on its business in the
manner and in the location in which such business has been and is now being
conducted, to execute and deliver this Agreement, and to perform its obligations
hereunder.

4.2            Organization; Good Standing of Landlord.  To Sellers’ knowledge,
Landlord is a corporation, validly existing and in good standing under the laws
of the State of Delaware, and is duly qualified to do business in the State of
Florida, with all requisite company power and authority to carry on its business
in the manner and in the location in which such business has been and is now
being conducted, to execute and deliver the Deed.

4.3            Consent of Third Parties.  Except as otherwise set forth on
Schedule 4.3 of the Seller Disclosure Letter, no consent or approval of any
third party is required as a condition to the entering into, performance or
delivery of this Agreement by Seller other than such consent as has been
previously obtained.

4.4            Authority; Enforceability.  The execution and delivery of this
Agreement has been duly authorized by Seller, and this Agreement constitutes the
valid and binding obligation and agreement of Seller, enforceable against Seller
in accordance with its terms.

 
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4.5            Absence of Conflicts.  Subject to obtaining the consents and
approvals described on Schedule 4.3 of the Seller Disclosure Letter, neither the
execution, delivery or performance of this Agreement will (i) conflict with or
result in any breach of any of the terms, conditions or provisions of, (ii)
constitute a default under, (iii) result in a violation of, or (iv) give any
third party the right to modify, terminate, or accelerate any obligation under,
the provisions of the articles of organization or operating agreement of Seller
and/or its Affiliates, any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which Seller and/or its Affiliates is bound or
affected, the Property Agreements or any Applicable Law.

4.6            No Judgments.  Except as set forth on Schedule 4.6 of the Seller
Disclosure Letter, there are no judgments (i) presently outstanding and
unsatisfied against the Property, the Seller or any of Seller’s assets or, (ii)
to Seller’s knowledge, presently outstanding and unsatisfied against Landlord or
any of its assets other than the Property.

4.7            No Governmental Approvals.  Except as contemplated under Section
7.8(a) below, no order, permission, consent, approval, license, authorization,
registration or validation of, or filing with, or exemption by, any governmental
agency, commission, board or public authority is required to authorize, or is
required in connection with the execution, delivery and performance by Seller of
this Agreement or the taking of any action contemplated by this Agreement, which
has not been obtained.

4.8            Insurance.  Schedule 4.8 of the Seller Disclosure Letter sets
forth an accurate summary of all general liability, fire, theft, professional
liability and other insurance currently maintained with respect to the
Property.  Neither Seller, Manager nor, to Seller’s knowledge Landlord, has
taken any action or failed to act in a manner, including the failure of Seller,
Manager or Landlord, to give any notice or information, which would limit or
impair the rights of Seller, Landlord or Manger under such insurance
policies.  Prior to Closing Seller will promptly notify Buyer of any potential
losses or claims that may be covered by the insurance.

4.9            Litigation.  Except as set forth on Schedule 4.9 of the Seller
Disclosure Letter, there is no pending or, to Seller’s knowledge, considered or
threatened judgment, litigation, proceeding, investigation or inquiry (by any
person, governmental or quasi-governmental agency or authority or otherwise):
(i) to which Seller or the Property is a party, including without limitation,
litigation brought by Seller against any third party, (ii) to which Landlord is
a party, including without limitation, litigation brought by Landlord against
any third party, relating to or which may otherwise materially adversely affect
the Property, or (iii) to which the Manager is a party, including without
limitation, litigation brought by Manager against any third party.

4.10          Compliance with Laws.  Except as provided on Schedule 4.10 of the
Seller Disclosure Letter, the Property has been and is presently used and
operated by Seller, and to Seller’s knowledge was constructed, in compliance in
all respects with, and in no way in violation of, any Applicable Law affecting
the Property or any part thereof.  Neither the Seller nor the Manager has
received notice of any such violation.

4.11          Environmental Matters.  Except as identified on Schedule 4.11 of
the Seller Disclosure Letter, neither Seller, Manager nor, to the Seller’s
knowledge, the Landlord has generated, stored or disposed of any hazardous
substance at or on the Property except in accordance with Applicable Law, and
neither Seller, Manager nor, to Seller’s knowledge, Landlord has knowledge of
any previous or present generation, storage, disposal or existence of any
hazardous substance at or on the Property other than in accordance with all
Applicable Laws.  The term “hazardous substance” shall mean “hazardous waste,”
“toxic substances,” “petroleum products,” “pollutants,” or other similar or
related terms as defined or used from time to time in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”) (42 U.S.C. §§ 1801, et seq.), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. § 6921, et seq.), similar state laws, including
Chapters 376 and 403, Florida Statutes, and regulations (the “Environmental
Laws”) adopted thereunder.  Neither Seller, Manager nor, to Seller’s knowledge,
the Landlord has filed or been required to file any notice reporting a release
of any hazardous substance into the environment, and no notice pursuant to
Section 103(a) or (c) of the CERCLA, 42 U.S.C. § 9601, et seq. or any other
Environmental Law has been or was required to be filed.  Neither Seller, Manager
nor, to Seller’s knowledge, Landlord has received any notice letter under any
Environmental Law or any notice or claim, and there is no investigation pending,
contemplated, or to Seller’s or knowledge threatened, to the effect that Seller,
Landlord or Manager is or may be liable for or as a result of the release or
threatened release of hazardous substance into the environment or for the
suspected unlawful presence of any hazardous waste on the Property.  Seller
agrees to indemnify and hold Buyer, Tenant, and their Affiliates harmless from
any Loss resulting from a breach of this Section 4.11.  Notwithstanding the
provisions of ARTICLE X, the agreement to indemnify in this Section 4.11 shall
survive the Closing without limitation.

 
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4.12          Assessments.  There are no special or other assessments for public
improvements or otherwise now affecting the Property, no pending or, to Seller’s
knowledge, threatened special assessments affecting the Property, and no
contemplated improvements affecting the Property that may result in special
assessments affecting the Property.

4.13          Property Agreements.  The Property Agreements listed on Exhibit B
of the Seller Disclosure Letter are in full force and effect and are all of the
agreements relating to or affecting the Property.  Seller is not in default of
any of its obligations under any of the Property Agreements, and Seller has no
knowledge of any default on the part of any other party thereto.

4.14          Licenses.  Exhibit C of the Seller Disclosure Letter is a true and
complete list of all Licenses held by the Seller.  The Licenses listed on
Exhibit C are valid and no material violations exist with respect to such
Licenses.  No other Licenses are required to be held by the Seller for the
lawful ownership, use, occupancy, operation and maintenance of the Property as
an assisted living facility.  No applications, complaints or proceedings are
pending or, to the knowledge of Seller, contemplated or threatened which may (i)
result in the revocation, modification, non-renewal or suspension of any License
or of the denial of any pending applications, (ii) the issuance of any cease and
desist order, or (iii) the imposition of any fines, forfeitures, or other
administrative actions with respect to the Property or its operation.  A list of
all unsatisfied or otherwise outstanding citations with respect to the Property
or its operation is shown on Exhibit G of the Seller Disclosure Letter.

4.15          Resident Agreements.  Except as otherwise noted on Schedule 4.15
of the Seller Disclosure Letter, the rent roll attached hereto as Exhibit E of
the Seller Disclosure Letter (the “Rent Roll”) is true and complete, and no
Resident Agreement currently in effect with respect to the Property contains any
material financial concession from the standard form of Resident Agreement for
the Property attached to the Seller Disclosure Letter as Exhibit F.  Seller is
not in default under any of its material obligations under any Resident
Agreement or any lease, and, except as set forth on Schedule 4.15 of the Seller
Disclosure Letter, Seller has no knowledge of any material default on the part
of any other party thereto.  All of the Resident Agreements identified on the
Rent Roll are currently in full force and effect as of the date of the Rent
Roll.

 
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4.16          Medicare; Medicaid.  Except for the Seller’s participation in the
Florida Nursing Home Diversion program (the “Florida Diversion Program”), Seller
has not in the past and currently is not receiving any payments under and has
not in the past and currently is not certified for participation in any
governmental payor programs relating to the Property, including but not limited
to the Medicare and Medicaid programs (“Governmental Payor Programs”).  The
Seller is currently and has previously at all times been in compliance with the
requirements, terms, rules, and regulations relating to the Florida Diversion
Program and the Network Provider Agreement with Independent Living Systems, LLC
related thereto dated May 1, 2008 and any modifications, amendments, or
supplements thereof.

4.17          Condemnation.  Neither Seller, Manager nor, to Seller’s knowledge,
Landlord has received any written notice of any pending or contemplated
condemnation, eminent domain or similar proceeding, with respect to all or any
portion of the Property.

4.18          Condition of Property.

(a)            Real Property.  Except as described on Schedule 4.18 of the
Seller Disclosure Letter, with regard to the Real Property  to Seller’s
Knowledge (i) there are no material structural defects, (ii) there is no insect
or rodent infestation, (iii) the roof is free of leaks, (iv) there are no leaks
in the foundation, (v) there are no toxic mold or mold-related problems, and
(vi) all mechanical and utility systems servicing the Real Property are in good
condition and proper working order, free of material defects and in substantial
compliance with all Applicable Laws.

(b)            Personal Property.  Except as described on Schedule 4.18 of the
Seller Disclosure Letter: (i) the Personal Property comprises all material
assets, rights or property used in the operation of the assisted living facility
located on the Real Property and constitutes all of the personal property used
or required for the operation of the Property as an assisted living facility,
and (ii) to Seller’s Knowledge, all of the Personal Property is in good
condition, working order and repair (ordinary wear and tear excepted).

4.19          Independent Property.  Except as described on Schedule 4.19 of the
Seller Disclosure Letter, the Property is an independent unit which does not
rely on facilities (other than facilities of public utility, sewer and water
companies) located on any property not included in the Property (i) to fulfill
any zoning, building code, or other municipal or governmental requirement, or
(ii) for structural support or the furnishing of any essential building systems
or utilities, including, but not limited to, electric, plumbing, mechanical,
heating, ventilating and air conditioning systems.  To Seller’s Knowledge no
building or other improvements not included in the Property relies on any part
of the Property to fulfill any zoning, building code, or other municipal or
governmental requirement or for structural support or the furnishing of any
essential building systems or utilities.

 
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4.20          Utilities Access.  Except as described on Schedule 4.20 of the
Seller Disclosure Letter, the Real Property has water supply, storm and sanitary
sewer facilities, access to telephone, gas and electricity connections, fire
protection, drainage, means of ingress and egress to and from public highways
and, without limitation, other public utilities, all sufficient for normal
operations.  To Seller’s Knowledge, the parking facilities located on the
Property comply with all Applicable Laws or meet requisite exceptions or
variances to such laws.  All public utilities are installed and operating, and
all installation and connection charges have been paid in full.  To Seller’s
Knowledge, all streets and roads necessary for access to and full utilization of
the Property, and every part thereof, have been built, completed, dedicated, and
accepted for maintenance and public use by the appropriate governmental
authorities or are otherwise owned and maintained by local governments for
public use.  Seller does not have knowledge of any fact or condition existing
that would result or could result in the termination or reduction of the current
access from the Property to the existing roads and highways or to sewer or other
utility services presently serving the Property.

4.21          Zoning.  Except as provided on Schedule 4.10 of the Seller
Disclosure Letter, to Seller’s Knowledge the current use of the Property is
permitted under the applicable municipal zoning ordinances, or special
exceptions, variances, or conditions thereto, and the Property complies, to the
extent required (including any waiver or grandfathering), with all conditions,
restrictions and requirements of such zoning ordinances and all amendments
thereto.

4.22          FIRPTA.  Seller is not a “foreign person” within the meaning of
Section 1445 of the Code and the Regulations issued thereunder.

4.23          Interests; Title.

(a)            Title to Real Property. To Seller’s Knowledge, Landlord owns one
hundred percent (100%) of the ownership interest in the Real Property, free and
clear of all Liens except Permitted Exceptions and Permitted Liens.  Except for
the Option, to Seller’s Knowledge, there are no outstanding options or other
rights to purchase or otherwise acquire any ownership interest in the
Property.  

(b)            Title to Personal Property.  Except as described on Schedule 4.23
of the Seller Disclosure Letter, Seller owns one hundred percent (100%) of the
ownership interest in the Personal Property, free and clear of all Liens except
Permitted Exceptions and Permitted Liens. Except as described on Schedule 4.23
of the Seller Disclosure Letter, all Personal Property is owned free and clear
of any Lien, except for Personal Property that is leased as disclosed on
Schedule 4.23 of the Seller Disclosure Letter. There are no outstanding options
or other rights to purchase or otherwise acquire any ownership interest in the
Personal Property.  

4.24          Title Encumbrances.  Except as described on Schedule 4.24 of the
Seller Disclosure Letter, Seller is not in default under any of its material
obligations under any recorded agreement, easement or instrument encumbering
title to the Property, and Seller has no knowledge of any material default on
the part of any other party thereto.

 
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4.25          Affordable Housing Units.  No bedroom or unit in the Property is
leased or reserved for lease as an affordable housing unit or for low- or
moderate-income residents.  The Property is not required to lease or reserve any
unit or bedroom as an affordable housing unit or bedroom or for low-income or
moderate-income residents pursuant to a presently existing agreement or
Applicable Law.

4.26          No New Survey Matters.  To Seller’s Knowledge, since the dates of
the most recent surveys for the Real Property obtained by Buyer pursuant to
Section 7.5(e)) no new survey matters have arisen in connection with the Real
Property which would otherwise be required under the applicable ALTA/ACSM
standards to be shown thereon.

4.27          Loans.  Except as described on Schedule 4.27 of the Seller
Disclosure Letter, there are no loans on the Property.

4.28          Patriot Act Compliance.  Patriot Act Compliance of Seller.  To the
extent applicable to Seller, to Seller’s knowledge Seller has complied in all
material respects with the International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (the “Patriot Act”) and the regulations
promulgated thereunder, and the rules and regulations administered by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”), to the extent
such laws are applicable to Seller.  To Seller’s Knowledge Seller is not
included on the List of Specially Designated Nationals and Blocked Persons
maintained by the OFAC, nor is it a resident in, or organized or chartered under
the laws of, (A) a jurisdiction that has been designated by the U.S. Secretary
of the Treasury under Section 311 or 312 of the Patriot Act as warranting
special measures due to money laundering concerns or (B) any foreign country
that has been designated as non-cooperative with international anti-money
laundering principles or procedures by an intergovernmental group or
organization, such as the Financial Action Task Force on Money Laundering, of
which the United States is a member and with which designation the United States
representative to the group or organization continues to concur.

4.29          Broker’s or Finder’s Fees.  CLW Health Care Services Group (“CLW”)
is the sole agent, broker, investment banker or other person or firm acting on
behalf of or under the authority of Seller, Landlord or any Affiliate of Seller
or Landlord, and to Seller’s Knowledge is the only person that will be entitled
to any broker’s or finder’s fee or any other commission or similar fee, directly
or indirectly, in connection with the transactions contemplated by this
Agreement.  The Seller shall pay all fees and commissions owed to CLW in
connection with the transactions contemplated by this Agreement.  This Section
4.29 shall survive the Closing or the expiration or any termination of this
Agreement.

4.30          Insolvency.

(a)            Insolvency of Landlord.  To Seller’s knowledge, Landlord and its
Affiliates have not (i) commenced a voluntary case or had entered against them a
petition for relief under any Applicable Law relative to bankruptcy, insolvency,
or other relief for debtors, (ii) caused, suffered or consented to the
appointment of a receiver, trustee, administrator, conservator, liquidator, or
similar official in any federal, state or foreign judicial or nonjudicial
proceeding to hold, administer, and/or liquidate all or substantially all of
their respective assets, (iii) had filed against them any involuntary petition
seeking relief under any Applicable Law relative to bankruptcy, insolvency, or
other relief to debtors which involuntary petition is not dismissed within sixty
(60) days, or (iv) made a general assignment for the benefit of creditors.

 
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(b)            Insolvency of Seller.  Seller and its Affiliates have not (i)
commenced a voluntary case or had entered against them a petition for relief
under any Applicable Law relative to bankruptcy, insolvency, or other relief for
debtors, (ii) caused, suffered or consented to the appointment of a receiver,
trustee, administrator, conservator, liquidator, or similar official in any
federal, state or foreign judicial or nonjudicial proceeding to hold,
administer, and/or liquidate all or substantially all of their respective
assets, (iii) had filed against them any involuntary petition seeking relief
under any Applicable Law relative to bankruptcy, insolvency, or other relief to
debtors which involuntary petition is not dismissed within sixty (60) days, or
(iv) made a general assignment for the benefit of creditors.

4.31          Landlord’s Consent to Option Instruction.  As of Closing (but not
as of the Effective Date) the Landlord has consented to the Seller’s instruction
(the “Option Instruction”) pursuant to the terms of the Option, directing the
Landlord to convey the Property directly to Buyer, and no consent or approval of
any third party is required as a condition to Seller’s exercise of the Option or
the conveyance of the Property from Landlord to Buyer other than Landlord’s
consent.  The Seller and the Landlord are full compliance with all of the terms,
conditions, and requirements related to the exercise of the Option under the
Lease and all other related documents related to the Option.

4.32          Compliance with Lease.  The Lease is in full force and effect and
has not been amended or modified by any oral or written agreement.  To Seller’s
Knowledge Landlord and Seller are each currently in full compliance with all of
the terms of the Lease and no default or event of default has occurred, and no
circumstances exist which could result in a default or event of default
thereunder.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as of the Effective Date and as of the
Closing as follows:

5.1            Organization and Good Standing.  Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware.  Buyer has all requisite corporate power to own, operate,
and lease the Property and carry on business as it is now being conducted and as
the same will be conducted following the Closing.  As of the Closing, Buyer will
be registered to do business under the laws of the State of Florida.

5.2            Authorization and Binding Effect of Documents.  The execution and
delivery of this Agreement has been duly authorized by Buyer, and this Agreement
constitutes the valid and binding obligation and agreement of Buyer, enforceable
in accordance with its terms (subject to the effect of bankruptcy, insolvency
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditor’s rights and remedies generally, and to limitations imposed by general
principles of equity, whether applied by a court of law or of equity).

 
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5.3            Absence of Conflicts.  Neither the execution and delivery of this
Agreement, nor compliance with the terms and provisions hereof, will (i)
conflict with or result in any breach of any of the terms, conditions or
provisions of, (ii) constitute a default under, (iii) result in a violation of,
or (iv) give any third party the right to modify, terminate, or accelerate any
obligation under, the provisions of the articles of organization and any
applicable limited liability company agreement or operating agreement of Buyer
and/or its Affiliates, any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which Buyer and/or its Affiliates is bound or
affected, or any Applicable Law to which Buyer and/or its Affiliates is subject.

5.4            Consents.  The execution, delivery and performance by Buyer
and/or its Affiliates of this Agreement and the other Documents, and
consummation by Buyer and/or its Affiliates of the transactions contemplated
hereby and thereby, do not and will not require the authorization, consent,
approval, exemption, clearance or other action by or notice or declaration to,
or filing with, any court or administrative or other governmental body, or the
consent, waiver or approval of any other person or entity, excluding consents
that Seller is obligated to obtain under Section 7.12 below.

5.5            Patriot Act Compliance.  To the extent applicable to Buyer, to
Buyer’s actual knowledge upon reasonable inquiry, Buyer has complied in all
material respects with the Patriot Act and the regulations promulgated
thereunder, and the rules and regulations administered by OFAC, to the extent
such laws are applicable to Buyer.  Buyer is not included on the List of
Specially Designated Nationals and Blocked Persons maintained by the OFAC, nor
is it a resident in, or organized or chartered under the laws of, (A) a
jurisdiction that has been designated by the U.S. Secretary of the Treasury
under Section 311 or 312 of the Patriot Act as warranting special measures due
to money laundering concerns or (B) any foreign country that has been designated
as non-cooperative with international anti-money laundering principles or
procedures by an intergovernmental group or organization, such as the Financial
Action Task Force on Money Laundering, of which the United States is a member
and with which designation the United States representative to the group or
organization continues to concur.

5.6            Broker’s or Finder’s Fees.  No agent, broker, investment banker,
or other person or firm acting on behalf of Buyer or any of its Affiliates or
under its authority, is or will be entitled to any broker’s or finder’s fee or
any other commission or similar fee, directly or indirectly, from Buyer or any
of its Affiliates in connection with the transactions contemplated by this
Agreement.  This Section 5.6 shall survive the Closing or the expiration or any
termination of this Agreement.

ARTICLE VI
OTHER COVENANTS

6.1            Conduct of Business Prior to the Closing.  Seller covenants and
agrees that from the Effective Date through the Closing, unless Buyer otherwise
consents in writing, Seller and its Affiliates shall:

(a)            Operate the Property in the ordinary course of business,
including (i) incurring expenses consistent with the past practices, (ii) using
commercially reasonable efforts to preserve the Property’s present business
operations, organization and goodwill and its relationships with residents,
customers, employees, advertisers, suppliers and other contractors, and (iii)
maintaining the Licenses listed on Exhibit C of the Seller Disclosure Letter.

 
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(b)            Operate the Property and otherwise conduct business in accordance
with the terms or conditions of the Licenses listed on Exhibit C of the Seller
Disclosure Letter, all Applicable Laws having jurisdiction over any aspect of
the operation of the Property and all applicable insurance requirements.

(c)            Maintain the books and records for the Property.

(d)            Timely comply in all material respects with the Property
Agreements.

(e)            Not sell, lease, grant any rights in or to or otherwise dispose
of, or agree to sell, lease or otherwise dispose of, the Property in whole or in
part, except to residents of the facility in the ordinary course of business
using a form of resident agreement agreed upon by Seller and Buyer.
 
(f)             Take commercially reasonable efforts to maintain the Personal
Property currently in use in reasonably good operating condition and repair,
except for ordinary wear and tear, in a manner consistent with past practices.

(g)            Perform all covenants, terms, and conditions and make all
payments in a timely fashion, under any loans listed on Schedule 4.27 of the
Seller Disclosure Letter.

(h)            Not amend or modify the Property Agreements or take or fail to
take any action thereunder outside the ordinary course of Seller’s business.

(i)             Subject to Section 12.16 below, not make any alterations or
improvements to the Property or make any capital expenditure with respect to the
Property in excess of ONE HUNDRED THOUSAND AND NO/100 U.S. DOLLARS ($100,000.00)
other than those that are required by Applicable Law or that are necessary to
preserve the coverage under or comply with the terms of any insurance policy
with respect to the Property.

(j)             Not enter into any agreement which calls for annual payments in
excess of TEN THOUSAND AND NO/100 U.S. DOLLARS ($10,000.00) or for a term in
excess of one year, unless such agreement can be terminated upon not more than
sixty (60) days prior written notice without the payment of any termination fee
or penalty payment.

(k)            Provide the Buyer with a current Rent Roll on the first day of
each month.

6.2            Notification of Certain Matters.  Seller shall give prompt
written notice to Buyer, and Buyer shall give prompt written notice to Seller,
of (i) the occurrence, or failure to occur, of any event that would be likely to
cause any of its respective representations or warranties contained in this
Agreement to be untrue or inaccurate in any material respect at any time from
the Effective Date to the Closing, and (ii) any failure to comply with or
satisfy, in any material respect, any covenant, condition, or agreement to be
complied with or satisfied under this Agreement.

 
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6.3            Title; Additional Documents.  At the Closing, Seller or Landlord,
as their interests may appear, shall transfer and convey to Buyer good and
indefeasible fee simple title to the Property, free and clear of any Liens
except Permitted Exceptions and Permitted Liens.  At the Closing, all warranties
and guaranties, to the extent assignable or transferable, relating to the
Property shall be transferred by Seller to and shall be held and owned by Buyer.

6.4            Other Consents.  Seller shall obtain the consents or waivers to
the transactions contemplated by this Agreement required under the Property
Agreements.

6.5            Inspection and Access.  Seller shall, commencing on the Effective
Date of this Agreement, open the assets, books, accounting records,
correspondence and files of Seller (to the extent related to the operation of
the Property) for examination by Buyer, its officers, attorneys, accountants and
agents, with the right to make copies of such books, records and files or
extracts therefrom.  Such access will be available to Buyer during normal
business hours, upon notice, in such manner as will not unreasonably interfere
with the conduct of the business of the Property.  Seller will make available to
Buyer such additional data and other available information regarding the
Property as Buyer may reasonably request.  Those books, records and files which
relate to the Property that are not transferred to Buyer shall be preserved and
maintained by Seller for two (2) years after the Closing, or such greater amount
of time required by Applicable Law, and those books, records and files relating
to the Property the possession of which is being transferred to Buyer hereunder
shall be maintained and preserved by Buyer for a period of two (2) years after
the Closing, or such greater amount of time required by Applicable Law.

6.6            Confidentiality.

(a)            Confidential Information.  Any and all nonpublic information,
documents, and instruments delivered to Buyer by Seller or its agents or
Affiliates and any and all nonpublic information, documents, and instruments
delivered to Seller by Buyer or its agents or Affiliates, including, without
limitation, this Agreement, the Documents and all agreements referenced herein,
are of a confidential and proprietary nature.  Buyer and Seller agree that prior
to Closing, each will maintain the confidentiality of all such confidential
information, documents or instruments delivered to each by the other party or
its agents in connection with the negotiation of, or in compliance with, this
Agreement, and only disclose such information, documents, and instruments to
their duly authorized officers, directors, representatives and agents, or as
otherwise required by Applicable Law.  Buyer and Seller further agree that if
the transactions contemplated hereby are not consummated and this Agreement is
terminated, each will return all such documents and instruments and all copies
thereof in their possession to the other party.  This Section 6.6(a) shall
survive as to both Seller and Buyer in the event this Agreement is terminated
prior to Closing and shall survive as to Seller (and not Buyer) following
Closing.

(b)            Confidentiality of Agreement.  Seller and Buyer will not disclose
the terms or existence of this Agreement to any third party without the prior
written consent of the other party or its agents, except that Seller and Buyer
may disclose such terms to their respective attorneys, accountants, consultants,
engineers, other advisers, members, shareholders, the Buyer’s potential
investors or lenders, and as required by Applicable Law or by Section 7.8
without such prior written consent.  This Section 6.6(b) shall survive as to
both Seller and Buyer following Closing or in the event this Agreement is
terminated prior to Closing.

 
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(c)            Permitted Uses of Information.  Notwithstanding the forgoing,
nothing in this Section 6.6 shall prevent the Buyer from making any disclosure
regarding this Agreement to the Securities and Exchange Commission (the “SEC”)
necessary to comply with any reporting, disclosure, or filing requirements
imposed upon the Buyer by the SEC.

(d)            Irreparable Harm.  Seller and Buyer recognize that any breach of
this Section 6.6  would result in irreparable harm to the other party;
therefore, the Seller or the Buyer shall be entitled to an injunction to
prohibit any such breach or anticipated breach, without the necessity of proving
actual damages or posting a bond, cash or otherwise, in addition to all of other
legal and equitable remedies.

6.7            Publicity.  The parties agree that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
any party prior to Closing except as required by Applicable Law.

6.8            Reasonable Best Efforts.  Subject to the terms and conditions of
this Agreement, each party will use its commercially reasonable efforts to take
all actions and to do all things necessary, proper or advisable and in its power
to satisfy any condition for which such party is responsible hereunder and to
consummate and make effective as soon as practicable the transactions
contemplated by this Agreement.

6.9            Reports.  Seller shall file on a current and timely basis until
the Closing, all reports and documents required to be filed with respect to the
Licenses.  True and complete copies of all such reports filed as of the
Effective Date and continuing through the Closing shall be promptly supplied to
Buyer by Seller.

6.10          Post-Closing Obligations of Seller.  Following Closing, Seller
shall use, and shall cause Seller’s Affiliates to use, reasonable diligent
efforts to cooperate with Buyer and its Affiliates to (a) confirm that all
Licenses are obtained and held by the proper entity for operation of the
Property, and (b) to the extent not previously transferred to Buyer, to provide
any records in Seller’s custody or control which may be requested of Buyer by
any authorized governmental agency.  Further, upon Buyer’s request, for a period
of one (1) year after Closing, Seller shall make the operating statements and
any and all books, records, correspondence, financial data, leases, delinquency
reports and all other documents and matters maintained by Seller or its agents
and relating to receipts and expenditures pertaining to the Property for the
three (3) most recent full calendar years and the current calendar year
(collectively, the “Records”) available to Buyer for inspection, copying and
audit by Buyer's designated accountants, and at Buyer's expense.  This Section
6.10 shall survive the Closing.

6.11          No Other Representations or Warranties.

(a)            Buyer agrees that, except for the representations and warranties
made by Seller and expressly set forth in this Agreement, neither the Seller nor
any of its Affiliates or its respective representatives have made (and shall not
be construed as having made) to Buyer or any representatives thereof any
representation or warranty of any kind.

 
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(b)            Seller agrees that, except for the representations and warranties
made by Buyer and expressly set forth in this Agreement, neither Buyer nor any
of its Affiliates or its representatives have made (and shall not be construed
as having made) to Seller or to any of Seller’s Affiliates or any respective
representatives thereof any representation or warranty of any kind.

6.12          Noncompetition.  Except as expressly provided herein, from the
Closing through the second anniversary of the Closing, Seller and Seller’s
Affiliates shall not directly or indirectly (unless acting in accordance with
Buyer’s written consent) own, manage, operate, finance or participate in the
ownership, management, operation or financing of, or permit its name to be used
by or in connection with, any competitive business or enterprise located within
a five (5) mile radius of the Real Property.  For purposes of this Section 6.12,
the term “competitive business or enterprise” shall mean an assisted living
facility but shall expressly not include the facility known as Windsor of
Bradenton located at 2800 60th Avenue W., Bradenton, FL 34207.  This Section
6.12 shall survive Closing.

6.13          Exclusivity.  From and after the Effective Date to the Closing or
termination of this Agreement according to the terms hereof, Seller shall not
take any action, directly or indirectly, to encourage, initiate or engage or
participate in discussions or negotiations with, or provide any information to,
any party, other than Buyer, concerning a potential transaction involving
the  purchase and sale of the Property, the purchase and sale of all or
substantially all of the ownership interest of Seller, or any transaction
similar to the foregoing.

6.14          Exercise of Option and Delivery of Deed by Landlord.  Seller shall
(a) take all action necessary with respect to the exercise of the Option,
including but not limited to all actions required pursuant to the terms of the
Lease and the other documents related to the Option, (b) comply with the terms
of the Lease and maintain in full force and effect and not default under the
Lease, and (c) deliver the Deed to Buyer.

ARTICLE VII
CONDITIONS PRECEDENT TO THE
OBLIGATION OF BUYER TO CLOSE

Buyer’s obligation to close pursuant to the terms of this Agreement is subject
to the satisfaction, on or prior to the Closing, of each of the following
conditions, unless waived by Buyer in writing:

7.1            Accuracy of Representations and Warranties; Closing
Certificate.  Except for any changes permitted by the terms of this Agreement or
consented to in writing by Buyer, each of the representations and warranties
made by Seller in this Agreement or in any certificate delivered pursuant to
Section 9.2 that is qualified as to knowledge or materiality shall be true and
correct in all respects when made and shall be true and correct in all respects
at and as of the Closing as though such representations and warranties were made
or given on and as of the Closing, and each of such representations and
warranties that is not qualified as to knowledge or materiality shall be true
and correct when made and shall be true and correct in all material respects at
and as of the Closing as though such representations and warranties were made or
given on and as of the Closing.  For purposes of determining whether the
representations and warranties made by the Seller pursuant to this Agreement are
true and correct at and as of the Closing, the Schedules and Exhibits contained
in the Seller Disclosure Letter shall be deemed to include only that information
contained therein on the date such Schedules and Exhibits are acknowledged
pursuant to Section 12.13, and shall be deemed to exclude any information
disclosed to Buyer pursuant to Section 6.2 or otherwise.

 
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7.2            Performance of Agreement.  Seller and its Affiliates shall have
performed in all material respects all of their covenants, agreements and
obligations required by this Agreement to be performed or complied with by them
prior to or upon the Closing.

7.3            No Adverse Change.  No change or development shall have occurred
which has or is likely to materially affect the Property, its use or its value.

7.4            Conveyance of Real Property.  The Landlord shall have conveyed to
Buyer the Real Property.

7.5            Title Insurance and Survey.

(a)            Within five (5) days after the execution of this Agreement, Buyer
shall order commitments for owner’s policies of title insurance (the “Title
Commitment”) issued by the Title Insurer covering fee simple title to the
Property, in which the Title Insurer shall agree to insure, in such amount as
Buyer deems adequate, merchantable title to such interests free from the
Schedule B standard printed exceptions and all other exceptions except for (i)
exceptions which, under applicable state rules and regulations, cannot be
deleted or modified and (ii) Permitted Exceptions, with such endorsements as
Buyer shall reasonably require and with insurance coverage over any “gap”
period.  Such Title Commitments shall have attached thereto complete, legible
copies of all instruments noted as exceptions therein, and shall be delivered
promptly to Buyer upon receipt by Seller.

(b)            If (i) any of the Title Commitments reflect any exceptions to
title other than Permitted Liens which are not acceptable to Buyer in Buyer’s
sole discretion, or (ii) the Survey to be obtained by Buyer pursuant to Section
7.5(e) below discloses anything not acceptable to Buyer in Buyer’s sole
discretion, or (iii) at any time prior to the Closing, title to Landlord’s
interests in the Property is encumbered by any exception to title other than
Permitted Liens, which was not on the initial Title Commitment for the Property
and is not acceptable to Buyer in Buyer’s sole discretion (any such exception or
unacceptable statement of fact being referred to herein as a “Title Defect”),
then Buyer shall, on or before the later of the end of the Due Diligence Period
or ten (10) days following receipt of such Title Commitment, as the case may be,
give Seller written notice of such Title Defect (the “Title Notice”).  Such
Title Notice shall include a copy of the relevant Title Commitment and copies of
the exceptions.  Any exception to title that is (x) disclosed in the Title
Commitment, or (y) identified on a Survey, which, in either case, is not
identified as a Title Defect in the Title Notice, shall be deemed to be a
“Permitted Exception” for purposes of this Agreement.  Seller shall have the
right, but not the obligation, within ten (10) days after receipt of any such
Title Notice, to notify Buyer that Seller or Landlord, as applicable, will take
the action necessary to remove such Title Defect.  If Seller elects to so notify
Buyer, then, on or before the Closing, Seller shall provide Buyer with
reasonable evidence of such removal.  Notwithstanding anything contained herein
to the contrary, the following items (the “Required Cure Items”) must be cured
prior to or at Closing (with either Seller or Landlord having the right to apply
the portion of the Purchase Price allocated to either such party pursuant to
Section 2.3 hereof, or a portion thereof, for such purpose): (x) all mortgages,
security deeds, and other security instruments, (y) all past Taxes, and (z) all
judgments against the Seller or Landlord, which may constitute a Lien.

 
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(c)            In the event (x) Buyer timely gives a Title Notice to Seller and
the Title Defects specified therein are not cured on or before the Closing, (y)
a Required Cure Item is not cured on or before the Closing, or (z) if Seller
does not timely notify Buyer that Seller will remove Title Defects within the
ten (10) days as specified above (in which case Buyer shall make its election
pursuant to this subsection (c) prior to the later of March 31, 2009 or ten (10)
days following the date of such Title Notice), Buyer shall have the option to:

(d)            In the event Buyer timely gives a Title Notice to Seller and the
Title Defects specified therein are not cured on or before the Closing, if
Seller does not timely notify Buyer that Seller will remove Title Defects within
the ten (10) days as specified above, or in the event a Required Cure Item is
not cured on or before the Closing, Buyer shall have the option to:

 
(i)
accept Landlord’s interest in the Real Property subject to such Title Defect(s)
or Required Cure Item(s), in which event such Title Defect(s) or Required Cure
Item(s) shall become part of the Permitted Exceptions, and to close the
transaction contemplated hereby in accordance with the terms of this Agreement;

 
(ii)
pay any sum necessary to cure the Title Defect(s) or Required Cure Item(s) and
deduct such amount from the Purchase Price; or

 
(iii)
by giving Seller written notice of Buyer’s election, to terminate this Agreement
and receive a refund of the Earnest Money Deposit, in which event no party shall
have any further rights or obligations to the other hereunder, except for such
rights and obligations that, by the express terms hereof, survive any
termination of this Agreement.  If Buyer elects to proceed with the Closing
without giving notice of its election of this option (ii), it will be deemed to
have accepted such Title Defect(s) or Required Cure Item(s)as Permitted
Exceptions.

Notwithstanding the foregoing, nothing contained in section shall limit the
right of the Buyer to pursue any and all remedies provided in Section 11.2 of
this Agreement as a result of Seller’s default.

(e)            Seller has previously provided Buyer with copies of any existing
boundary surveys for the Property.  Buyer may, at Buyer’s expense, order one or
more boundary surveys for the Property (the “Survey”) prepared by a registered
land surveyor or surveyors satisfactory to Buyer.  Each Survey shall (i) be
completed in accordance with Buyer’s reasonable survey requirements, and shall
be certified to Buyer, the Title Insurer and any Lender of Buyer by such
surveyor; (ii) have one perimeter description for the Property; (iii) show all
easements, rights-of-way, setback lines, encroachments and other matters
affecting the use or development of the Property; and (iv) disclose on the face
thereof the gross and net acreage of the Property.

 
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(f)             Notwithstanding anything in this Agreement to the contrary,
Seller covenants and agrees that at or prior to Closing, Seller shall (i) pay or
cause to be paid in full and cause to be canceled and discharged or otherwise
bond and discharge as liens against the Property all mechanics’, materialmen’s,
repairmen’s, contractors’ or other similar Liens which encumber the Property as
of the Effective Date created by, through or under Seller or which may be filed
against the Property after the Effective Date created by, through or under
Seller and on or prior to the Closing Date (ii) pay or cause to be paid in full
all past due ad valorem taxes and assessments of any kind constituting a lien
against the Property which are due and payable, and (iii) pay or cause to be
paid in full, or cause to be canceled and discharged all security deeds or other
security instruments encumbering the property and created by or through Seller,
except to the extent Buyer assumes any of the obligations secured by such
instruments, and all judgments which have attached to and become a lien against
the Property by, through or under Seller.  In the event Seller fails to cause
such liens and encumbrances to be paid and canceled at or prior to Closing,
Buyer shall be entitled to pay such amount to the holder thereof as may be
required to pay and cancel same, and to credit the amount so paid against the
Purchase Price allocated to the Buyer pursuant to Section 2.3
hereof.  Notwithstanding the foregoing, nothing contained in section shall limit
the right of the Buyer to pursue any and all remedies provided in Section 11.2
of this Agreement as a result of Seller’s default.

(g)            At Closing, the Title Insurer shall be prepared to issue a title
insurance policy in accordance with the Title Commitment, with all endorsements
reasonably required by Buyer and with coverage over any “gap” period.

(h)            Title Expenses (as herein defined) shall be paid by the parties
in accordance with Section 9.4 hereof.

7.6            Other Inspections.  Prior to the Closing, at reasonable times and
upon reasonable notice, Buyer or Buyer’s agent(s), consultants, or other
retained professionals shall have the right, at Buyer’s expense, to perform or
complete such inspections and assessments of the Property as Buyer deems
necessary or desirable, including, without limitation, environmental and
structural aspects, and assessments of the compliance of the Property with all
Applicable Laws.  Buyer shall cause its inspectors and/or consultants to deliver
to Seller at Seller’s sole cost and expense a copy of each such inspection
report at the time such report(s) are delivered to Buyer.

7.7            Delivery of Closing Documents.  Seller shall have delivered or
caused to be delivered to Buyer on the Closing each of the Documents required to
be delivered pursuant to Section 9.2.

7.8            Licenses.

(a)            So long as this Agreement remains in effect Buyer and Seller will
timely and diligently implement and complete the Florida Change of Ownership
Process (“CHOW”) required by the Bureau of Long Term Care Services (the
“Bureau”) of the Florida Agency for Health Care Administration.  As required by
the CHOW, Seller will file with the Bureau its written notice of intent to sell
community at least sixty (60) days prior to Closing.  Similarly at least sixty
(60) days prior to Closing Buyer shall submit to the Bureau its required
application in accordance with the application and checklist prescribed by the
Bureau and available at
http://ahca.myflorida.com/MCHQ/Long_Term_Care/Assisted_living/alf.shtml.  Upon
Closing, Buyer will present closing documents to the Bureau, and Seller and
Buyer shall take any other action required to cause the Bureau to issue Buyer a
provisional license, with the Standard/Permanent license being issued within six
months thereafter, all as contemplated by the CHOW.  Seller shall, and shall
cause Manager to, reasonably cooperate with the Post-Closing Licensee in
obtaining such Licenses at or prior to Closing, at no cost to Seller.  The
Post-Closing Licensee shall diligently pursue all required Licenses.

 
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(b)            In the event the regulatory authorities (i) assert that there are
violations and require repairs or alterations to be made to cure such
violations, or (ii) assess fines as a result of operational issues and require
such fines to be paid prior to issuing Licenses to the Post-Closing Licensee or
prior to confirming to Buyer that the Licenses are in place, no material
violations exist, and the Property is in good standing, the Seller’s performing
of all such required repairs and alterations at Seller’s expense and payment of
any and all such fines by Seller shall be a condition to Buyer’s Closing.  If
any operational changes are required by such regulatory authorities as a
condition to issuing Licenses, Seller’s implementing such action at Seller’s
expense shall be a material obligation and condition to Closing.  If Seller
fails to take such foregoing actions, Buyer shall have the remedy available
under Section 11.2(a).

(c)            Sections 7.8(a) and (b) shall survive Closing.

7.9            Termination of Existing Management Agreement.  Buyer shall have
received evidence from Seller, satisfactory to Buyer in its sole discretion,
that any existing management agreement between the Manager and the Seller has
been terminated without fee or cost to Buyer.

7.10          Management Agreement.  Buyer and Manager shall have entered into
an agreement (the “Management Agreement”) for the continued management of the
Property by the Manager, in form and substance reasonably acceptable to Buyer.

7.11          Governmental Approvals.  Seller shall have obtained all
authorizations, consents, orders, or approvals of, shall have made all
declarations or filings with, and shall have allowed the expiration of waiting
periods imposed by, any governmental agencies necessary for the consummation of
the transactions contemplated by this Agreement.

7.12          Third-Party Consents.  Seller shall have obtained such consents to
assignment, waivers and similar instruments as Buyer reasonably determines are
necessary to permit the assignment of the Property Agreements, in form and
substance reasonably satisfactory to Buyer.

7.13          Financing Contingency.  On or before Closing, Buyer shall have
obtained financing for all or a portion of the Purchase Price at such an amount
and under such terms as are acceptable to Buyer.  Notwithstanding the last
paragraph of Section 11.1, if Buyer terminates the Agreement because of the
failure of this contingency, Seller will be reimbursed for all actual,
reasonable, out-of-pocket expenses incurred by Seller with third parties in
negotiating and performing this Agreement.

 
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7.14          Guaranty.  The Seller shall have caused Windsor Senior Living, LLC
(the “Guarantor”) to execute and deliver a guaranty of the Seller’s obligations
to the Buyer hereunder, including without limitation all obligations contained
in ARTICLE X and ARTICLE XI hereof, in the form attached as Exhibit A-1 to this
Agreement (the “Guaranty”).

ARTICLE VIII
CONDITIONS PRECEDENT TO THE
OBLIGATION OF SELLER TO CLOSE

The obligation of the Seller to close pursuant to the terms of this Agreement is
subject to the satisfaction, on or prior to the Closing, of each of the
following conditions, unless waived by Seller in writing:

8.1            Accuracy of Representations and Warranties.  The representations
and warranties of Buyer contained in this Agreement shall be true and correct in
all material respects on the Effective Date and as of the Closing with the same
effect as though made at such time, except for changes that are not materially
adverse to Seller.

8.2            Performance of Agreements.  Buyer shall have performed in all
material respects all of its covenants, agreements, and obligations required by
this Agreement and each of the other Documents to be performed or complied with
by it prior to or upon the Closing.

8.3            Delivery of Closing Documents.

 Buyer shall have delivered or caused to be delivered to Seller on the Closing
each of the Documents required to be delivered pursuant to Section 9.3.

ARTICLE IX
CLOSING

9.1            Closing Date and Place.

 The Closing shall take place on May 1, 2009 or at such earlier or later date
and time as may be agreed upon by the Buyer and Seller (the “Closing
Date”).  Parties need not attend the Closing in person and may instead close
from their respective, remote locations through the exchange of executed
documents and the closing deliverables required hereunder.

9.2            Deliveries of Seller.  At the Closing, Seller shall deliver or
cause to be delivered to Buyer the following, in each case in form and substance
reasonably satisfactory to Buyer:

(a)            A governmental certificate, dated as of a date as near as
practicable to the Closing, showing that Seller (i) is duly organized and in
good standing in the state of organization of Seller, and (ii) is qualified to
do business in the state in which the Property is located.

 
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(b)            A quit claim deed (or its equivalent) and a quit claim bill of
sale and other instruments of transfer and conveyance transferring the Property
held or owned by Landlord (or Landlord’s Affiliates) to Buyer free of all Liens
other than the Permitted Exceptions and Permitted Liens; provided, however,
that, in the event the title insurance company will not issue an owner’s policy
for the Property pursuant to a quitclaim deed from Landlord, a limited warranty
deed from Landlord transferring the Property held or owned by Landlord shall be
delivered.  The quit claim deed or limited warranty deed, as applicable, to be
delivered pursuant to this Section 9.2(b) is referred to herein as the “Deed.”

(c)            A certificate of the secretary (or the equivalent thereto if
none) of Seller attesting as to the incumbency of each manager, officer, and
authorized representative of Seller who executes this Agreement and any of the
other Documents, certifying that resolutions and consents necessary for Seller
to act in accordance with the terms of this Agreement have been adopted or
obtained (with copies thereof attached) and to similar customary matters.

(d)            A bill of sale (with general warranty of title) and other
instruments of transfer and conveyance transferring the Property held or owned
by Seller (or Seller’s Affiliates) to Buyer free of all Liens other than the
Permitted Exceptions and Permitted Liens.

(e)            A certificate of non-foreign status under Section 1445 of the
Code, complying with the requirements of the Income Tax Regulations promulgated
pursuant to such Section.

(f)             A certificate that the conditions specified in Sections 7.1 and
7.2 are satisfied as of the Closing.

(g)            A true, correct and complete Rent Roll for the Property five (5)
days prior to Closing, certified by Seller, listing each resident as of the
Closing, the unit, bed or room number of such resident, the amount of monthly
fees to be paid by such resident, the amount of security deposit, the date of
the Resident Agreement, and the expiration date of such Resident Agreement.

(h)            Assignments of the Property Agreements and Licenses from Seller,
duly executed by Seller.

(i)             All third-party consents described in Section 7.12.

(j)             Opinions from counsel for Seller in the form attached to the
Seller Disclosure Letter as Exhibit D, regarding the due organization, good
standing, power and authority, and due execution of this Agreement and all other
Documents by Seller.

(k)            The Management Agreement, duly executed by the Manager.

(l)             A duly executed Guaranty from each of the Guarantors.

(m)           Unaudited and unreviewed historical financial statements and any
other documents identified by Buyer that are required to allow the Buyer to
comply with any reporting, disclosure, or filing requirements imposed upon the
Buyer by the SEC with respect to the transactions contemplated by this
Agreement.  Additionally, Seller shall provide Buyer, but without expense to
Seller, with (a) an audit letter in substantially the form as Exhibit H attached
to the Seller Disclosure Letter and made a part hereof, and (b) copies of, or
access to, such factual information as may be reasonably requested by Buyer or
its designated accountants, and in the possession or control of Seller, to
enable Buyer to file any filings required by the SEC in connection with the
purchase of the Property.  

 
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(n)            Such additional information, materials, affidavits and
certificates as Buyer shall reasonably request to evidence the satisfaction of
the conditions to Seller’s obligations hereunder, including without limitation,
evidence that all consents and approvals required as a condition to Buyer’s
obligation to close hereunder have been obtained, title affidavits, such
affidavits and indemnities as the Title Insurer may reasonably require to issue
the Title Insurance policies, the gap coverage and all endorsements and any
other documents expressly required by this Agreement to be delivered by Seller
at Closing, or as may be reasonably required by the Title Insurer.

9.3            Deliveries of Buyer.  At the Closing, Buyer shall deliver or
cause to be delivered to Seller the following, in each case in form and
substance reasonably satisfactory to Seller:

(a)            The Purchase Price in accordance with Section 2.3, subject to the
adjustments under Section 2.5.

(b)            A certificate that the conditions specified in Sections 8.1 and
8.2. are satisfied as of the Closing.

(c)            An agreement by Buyer assuming the Assumed Obligations.

(d)            A governmental certificate, dated as of a date as near as
practicable to the Closing, showing that Buyer is (i) duly organized and in good
standing in the state of its formation, and (ii) is qualified to do business in
the state where the Property is located.

(e)            A certificate of the secretary (or the equivalent thereto if
none) of Buyer attesting as to the incumbency of each officer or authorized
representative of Buyer who executes this Agreement and/or any of the other
Documents, certifying that resolutions and consents necessary for Buyer to act
in accordance with the terms of this Agreement have been adopted or obtained
(with copies thereof attached) and to similar customary matters.

(f)             The Management Agreement, duly executed by the Buyer.

(g)            Such additional information and materials as Seller shall have
reasonably requested to evidence the satisfaction of the conditions to its
obligations hereunder.

9.4            Closing Costs.  Buyer and Seller shall each pay their respective
attorneys’ fees and expenses.  All other due diligence and closing costs except
for costs directly related to Buyer’s financing (collectively, “Transaction
Costs”) shall be shared by Seller and Buyer with each paying fifty percent (50%)
of all such costs, including without limitation documentary stamp tax on the
Deed, all costs associated with the Survey, appraisals of the Property,
environmental inspections and reports, termite inspections, and all recording
fees and expenses associated with the Deed; provided, however, that two-thirds
(2/3) of all costs of the Title Insurer to issue an owner’s title insurance
policy without endorsements (collectively, the “Title Expenses”) shall be paid
by Buyer and one-third (1/3) of such Title Expenses shall be paid by
Seller.  Buyer shall pay all costs associated with its loan; any lender title
insurance charges; and charges for any endorsements requested for the owner’s
title insurance policy.  The cost sharing referred to above shall occur only if
the closing occurs.  If Closing does not occur for any reason the provisions of
Section 11.1 or 11.2, as applicable, shall determine each parties responsibility
for the costs incurred by the parties with respect to this Agreement.  Any
reimbursement of Seller expenses shall not reduce any entitlement Seller may
have to the Escrowed Funds.

 
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ARTICLE X
INDEMNIFICATION

10.1          General.  The rights to indemnification set forth in this ARTICLE
X and the other rights described in this Agreement shall be in addition to all
other rights to monetary damages that any party (or the party’s successors or
permitted assigns) would otherwise have by Applicable Law in connection with the
transactions contemplated by this Agreement or any other Document; provided,
however, that neither party shall have the right to be compensated more than
once for the same monetary damage.

10.2          Indemnification by Seller.  From and after Closing, Seller shall
indemnify, defend, and hold harmless Buyer, Tenant, and each of their officers,
directors, employees, Affiliates, successors and assigns from and against, and
pay or reimburse each of them for and with respect to, any Loss relating to,
arising out of or resulting from any of the following:

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

(b)            The ownership, operation or control of the Property prior to the
Closing, including without limitation, any and all liabilities which relate to
events occurring prior to the Closing, regardless of when they are asserted or
whether such was disclosed to Buyer and regardless of whether such was a breach
of any representation, warranty, or covenant by Seller, except for (i) Assumed
Obligations, and (ii) obligations, indebtedness or liabilities to the extent of
any Adjustment Amount credited to the Buyer; and

(c)            Claims by CLW or any other party claiming to have represented
Seller or Landlord as broker or agent in connection with the transactions
contemplated by this Agreement.

(d)            The Accrued Employee Benefits.

10.3          Indemnification by Buyer.  From and after Closing, Buyer shall
indemnify, defend and hold harmless Seller and its officers, directors,
employees, agents, representatives, Affiliates, successors and assigns from and
against, and pay or reimburse each of them for and with respect to any Loss
relating to, arising out of or resulting from any of the following:

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

 
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(b)            The Assumed Obligations.

10.4          Administration of Indemnification.  For purposes of administering
the indemnification provisions set forth in Section 10.2 and Section 10.3, the
following procedure shall apply:

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

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

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

(d)            Failure or delay by an Indemnified Party to give a reasonably
prompt notice of any claim shall not release, waive or otherwise affect an
Indemnifying Party’s obligations with respect to the claim, except to the extent
that the Indemnifying Party can demonstrate actual Loss or prejudice as a result
of such failure or delay.  Notwithstanding anything to the contrary contained
herein, the parties agree that no indemnification right or obligation shall
apply to the extent any such Loss or expense is paid to an Indemnified Party by
an insurance company.

 
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(e)            The right to pursue indemnification as set forth in Sections
10.2(a) and 10.3(a) shall survive the Closing hereunder for a period of eighteen
(18) months following the Closing, and the right to pursue indemnification as
set forth in all other Sections of this ARTICLE X shall survive the Closing
hereunder indefinitely.

(f)             Notwithstanding anything to the contrary in this Agreement, the
right to pursue indemnification as set forth in this ARTICLE X shall be
actionable or payable only if valid claims for Losses, if any, collectively
aggregate more than Fifty Thousand and No/100 U.S. Dollars ($50,000) (the
“Floor”), and Seller’s aggregate liability to Buyer for indemnification pursuant
to Section 10.2(a), and Buyer’s aggregate liability to Seller for
indemnification pursuant to Section 10.3(a), respectively, shall not exceed an
amount equal to ten percent (10%) of the Purchase Price (the “Cap”); provided,
however, that (i) the foregoing limitations (both the Floor and the Cap) shall
not apply in the case of fraud on the part of Buyer, Seller or any of their
respective Affiliates, or to any claims arising under Section 10.2(b), Section
10.2(c), Section 10.2(d), or Section 10.3(b) (none of which shall be limited in
any manner whatsoever), and (ii) the Cap shall not apply (but the Floor shall
apply) to any claims arising under Section 10.2 with respect to the
representations and warranties contained in ARTICLE IV (which shall be limited
to the Purchase Price) or Section 10.3 (with respect to the representations and
warranties contained in ARTICLE V (which shall be limited to the Purchase
Price).  In addition, Buyer agrees to concurrently seek recovery against Seller,
under any insurance policies, the Title Policy and other applicable agreements,
and Seller shall not be liable to Buyer to the extent Buyer’s claim is actually
satisfied from any sums recovered from such insurance policies, Title Policy or
other applicable agreements.  FINALLY, IN NO EVENT SHALL EITHER PARTY EVER BE
LIABLE FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES OTHER THAN IN THE EVENT OF
FRAUD.

ARTICLE XI
DEFAULT AND TERMINATION

11.1          Right of Termination.  This Agreement may be terminated prior to
Closing as follows:

(a)            By Buyer, in its sole and absolute discretion, at any time during
the Due Diligence Period for any reason or for no reason whatsoever;

(b)            By written agreement of Seller and Buyer;

(c)            By Buyer if, as of the Closing or such earlier date as specified
in this Agreement, all conditions in ARTICLE VII have not been met, or as
specifically provided for in Sections 7.5, 11.2(a)(i), 12.16, and 12.17;
provided, however, that nothing contained in this Section 11.1(c) shall limit
Seller’s rights pursuant to 11.2 below;

(d)            By Seller if, as of Closing or such earlier date as specified in
this Agreement, all conditions in ARTICLE VII have been met but the conditions
in ARTICLE VIII have not been met and Buyer defaults on its obligation to close
this transaction; provided, however, that nothing contained in this Section
11.1(d) shall limit Seller’s rights pursuant to 11.2 below; or

 
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(e)            By Seller or Buyer if a court of competent jurisdiction or other
governmental agency shall have issued an order, decree, or ruling or taken any
other action (which order, decree, or ruling the parties hereto shall use their
diligent efforts to lift), in each case permanently retraining, enjoining, or
otherwise prohibiting the transactions contemplated by this Agreement, or
otherwise determining that the consummation of such transactions would be
unlawful, and such order, decree or ruling shall have become final and
nonappealable.

In the event this Agreement is terminated pursuant to this Section 11.1 or
pursuant to any other express provision of this Agreement for any reason other
than a default by the Seller or Buyer hereunder, then (i) this Agreement shall
be of no further force or effect as of the date of delivery of such written
notice of termination, (ii) the Buyer and Seller shall equally share the
cancellation charges, if any, of Escrow Agent and Title Insurer, (iii) the Buyer
and Seller shall equally share responsibility for all Transaction Costs incurred
through termination, and shall reimburse each other to the extent the out-of
pocket payments of either Buyer or Seller exceed fifty percent (50%) of the
total Transaction Costs incurred through termination (iv) no party shall have
any further rights or obligations hereunder other than pursuant to any provision
hereof which expressly survives the termination of this Agreement, and (v) all
Escrowed Funds shall be released to the party entitled to the same in accordance
with Section 2.4 hereof.

11.2          Remedies upon Default.

(a)            If Seller defaults on any of Seller’s obligations hereunder, and
such default continues for ten (10) days after written notice thereof specifying
such default, Buyer may serve notice in writing to the Seller in the manner
provided in this Agreement, and either:

 
(i)
Terminate this Agreement, receive from Seller reimbursement of all actual
third-party out-of-pocket expenses incurred by Buyer in pursuing the
transactions contemplated by this Agreement, and pursue all legal remedies
available at law against Seller for Buyer’s actual damages arising from Seller’s
default hereunder; or

 
(ii)
Waive any such conditions, title objections or defaults and consummate the
transaction contemplated by this Agreement in the same manner as if there had
been no title objections, conditions or defaults without any reduction in the
Purchase Price and without any further claim against the Seller therefor and, if
necessary, pursue an action for specific performance.

(b)            If Buyer defaults on its obligation to close this transaction,
Seller may terminate this Agreement and Seller’s exclusive remedy shall be to
retain the Earnest Money Deposit and to receive from Buyer reimbursement of all
actual third-party out-of-pocket expenses incurred by Seller in pursuing the
transactions contemplated by this Agreement.

11.3          Specific Performance.  Seller specifically agrees that Buyer shall
be entitled, in the event of a default by Seller, to enforcement of this
Agreement by a decree of specific performance or injunctive relief requiring
Seller to fulfill its obligations under this Agreement.  If Buyer pursues an
action for specific performance and prevails, Buyer shall not be entitled to any
monetary damages, except as set forth in Section 12.14.

 
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11.4          Obligations Upon Termination.  Except as otherwise provided
herein, if this Agreement is terminated, each of the parties shall bear its own
costs incurred in connection with the transactions contemplated by this
Agreement.

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

11.6          Sole and Exclusive Remedy.  Seller and Buyer each acknowledge and
agree that prior to the Closing, such party’s sole and exclusive remedy with
respect to any and all claims made prior to the Closing for any breach or
liability under this Agreement or otherwise relating to the subject matter of
this Agreement and the transactions contemplated hereby shall be solely in
accordance with, and limited to, Sections 2.4, 11.1, 11.2 and 11.3.  The
foregoing shall in no manner limit the rights and obligations of the parties
provided in ARTICLE X from and after the Closing.  In addition, in no event
shall the provisions of this ARTICLE XI limit the non-prevailing party’s
obligation to pay the prevailing party’s attorneys’ fees and costs pursuant to
Section 12.14 hereof.

ARTICLE XII
MISCELLANEOUS

12.1          Further Actions.  From time to time before, at and after the
Closing, each party will execute and deliver such other documents as reasonably
requested by the Buyer, Seller, or Escrow Agent to consummate the transactions
contemplated hereby.

12.2          Notices.  All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered by
facsimile (with written confirmation of receipt), by courier (including
overnight delivery service), by email (as to communications that are not
required notices or demands hereunder), or sent by registered or certified mail,
first class, postage prepaid, addressed as follows:

 
(a)
If to Seller, to:
Oaks Holdings, LLC

c/o Stephen D. Russell
269 S. Osprey Ave.
Suite 200
Sarasota, FL 34236
Telephone:  (941) 953-3757
Facsimile:  (941) 953-4306
E-mail:  peterussell@sdrdevelopment.com

 
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with copies to:
F. Thomas Hopkins

Icard Merrill
2033 Main Street, Suite 600
Sarasota, FL 34237
Telephone:  (941) 953-8109
Facsimile:  (941) 366-6384
E-mail:  thopkins@icardmerrill.com

 
and:
Timothy J. Buchanan

7309 E. 21st Street, Suite 110
Wichita, Kansas  67206
Telephone:  316-616-6211
Facsimile:  316-616-6210
Email:  tim.buchanan@legendseniorliving.com
tim.buchanan@legendseniorliving.com

 
(b)
If to Buyer, to:
The Oaks Bradenton, LLC

c/o Cornerstone Growth & Income REIT, Inc.
Attn:  Sharon C. Kaiser
Chief Financial Officer
1920 Main Street, Suite 400
Irvine, CA 92614
Telephone No.:  949.263.4326
Telecopy No.:    949.250.0592

 
with copies to:
Servant Healthcare Investments, LLC

Attn: Kevin Maddron
1000 Legion Place, Ste. 1650
Orlando, FL 32801
Telephone No.:   407.999.7772
Telecopy No.:     407.999.7759

 
and:
Michael A. Okaty, Esq.

Foley & Lardner LLP
111 N. Orange Avenue, Suite 1800
Orlando, FL 32801
Telephone:  407-423-7656
Fax:  407-648-1743
E-mail:  mokaty@foley.com

 
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(c)
If to Escrow Agent, to:

First American Title Insurance Company
c/o Scott Brown
111 North Orange Avenue, Suite 1285
Orlando, Florida 32801
Phone: (407) 843-8674
Fax:  (888) 216-9921
E-mail: scobrown@firstam.com

or such other address as a party may from time to time notify the other parties
in writing (as provided above).  Any such notice, demand or communication shall
be deemed to have been given (i) if so sent by facsimile, upon receipt as
evidenced by the sender’s written confirmation of receipt, (ii) if so mailed, as
of the date delivered, (iii) if emailed, when sent (provided that e-mail does
not constitute delivery of any communication that is a required notice or demand
hereunder), and (iv) if so delivered by courier, on the date received.

12.3          Entire Agreement.  This Agreement and the other Documents
constitute the entire agreement and understanding between the parties with
respect to the subject matter hereof and supersede any prior negotiations,
agreements, understandings, or arrangements between the parties hereto with
respect to the subject matter hereof.

12.4          Binding Effect; Benefits.  Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors or permitted assigns.  Except to the
extent specified herein, nothing in this Agreement, express or implied, shall
confer on any person other than the parties hereto and any Indemnified Party and
their respective successors or permitted assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.

12.5          Assignment.  This Agreement may not be assigned by any party prior
to Closing without the written consent of the Buyer and Seller, which consent
may be given or withheld in each such party’s sole and absolute discretion,
except that Buyer may assign this Agreement and its rights hereunder without the
consent of Seller (i) to an Affiliate of Buyer, (ii) to a partnership in which
Buyer or any Affiliate of Buyer is a general partner, (iii) a limited liability
company in which Buyer or any Affiliate of Buyer is a manager or managing member
or (iv) any other lawful entity entitled to do business in the state in which
the Property is located provided such entity is controlled by, controlling or
under the common control with Buyer or any Affiliate of Buyer (each, a
“Permitted Buyer-Assignee”).  In the event of such an assignment to a Permitted
Buyer-Assignee, Buyer shall not be released from any of its duties, covenants,
obligations or representations and warranties under this Agreement and, from and
after any such assignment, Buyer and such Permitted Buyer-Assignee shall be
jointly and severally liable under this Agreement, and from and after any such
assignment, the term “Buyer” shall be deemed to mean such Permitted
Buyer-Assignee under any such assignment.  Nothing herein shall preclude a party
from implementing an exchange under Section 12.15 below subject to the terms
thereof.

12.6          Governing Law.  This Agreement shall in all respects be governed
by and construed in accordance with the laws of the state in which the Real
Property is located without regard to its principles of conflicts of
laws.  Venue for any dispute shall be in Manatee County, Florida.

 
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12.7          Amendments and Waivers.  No term or provision of this Agreement
may be amended, waived, discharged, or terminated orally, except by an
instrument in writing signed by: (i) Buyer and Seller with respect to any
provision contained herein; and (ii) Buyer, Seller, and Escrow Agent with
respect to Section 2.6 hereof.  Any waiver shall be effective only in accordance
with its express terms and conditions.

12.8          Joint and Several.  If there is more than one Seller hereunder,
Seller shall be jointly and severally liable with the other Seller for
performing all obligations of Seller under this Agreement.

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

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

12.11        Counterparts.  This Agreement may be executed and accepted in one
or more counterparts for the convenience of the parties, each of which will be
deemed an original and all of which, taken together, shall constitute one and
the same instrument.  Delivery of a counterpart hereof via facsimile
transmission or by electronic mail transmission shall be as effective as
delivery of a manually executed counterpart hereof.

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

12.13        Seller Disclosure Letter.  The Seller Disclosure Letter delivered
by the Seller to Buyer pursuant to this Agreement, and each Schedule and Exhibit
comprising the Seller Disclosure Letter referred to in this Agreement, shall be
deemed to be attached hereto and incorporated by reference even though it may be
maintained separately from this Agreement or completed after the Effective Date
so long as it is acknowledged as a Schedule or an Exhibit to this Agreement by
the parties hereto as of Closing.  Any item disclosed hereunder (including in
the Schedules and Exhibits hereto) shall be deemed disclosed for all purposes
hereof irrespective of the specific representation or warranty to which it is
explicitly referenced.

12.14        Attorneys’ Fees.  In the event either party brings an action to
enforce or interpret any of the provisions of this Agreement, the “prevailing
party” in such action shall, in addition to any other recovery, be entitled to
its reasonable attorneys’ fees and expenses arising from such action and any
appeal or any bankruptcy action related thereto, whether or not such matter
proceeds to trial.  For purposes of this Section 12.14, “prevailing party” shall
mean, in the case of a person asserting a claim, such person is successful in
obtaining substantially all of the relief sought, and in the case of a person
defending against or responding to a claim, such person is successful in denying
substantially all of the relief sought.

 
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12.15        Section 1031 Exchange/Tax Planning.  If requested by either Buyer
or Seller, the other party shall cooperate in permitting the other to accomplish
an exchange under Section 1031 of the Code or to restructure this transaction in
a way which is more advantageous for tax purposes; provided, however, that such
exchange or restructuring shall not modify any underlying financial or other
material terms of this Agreement, shall not delay the Closing, shall not relieve
Buyer or Seller of any liability for their respective obligations hereunder, and
shall not result in any other party incurring any greater cost or expense that
it otherwise would if any such exchange had not been elected.

12.16        Casualty.  The risk of any loss or damage to the Property by fire
or other casualty before the Closing shall continue to be borne by
Seller.  Seller shall promptly give Buyer written notice of any fire or other
casualty (in any event within five (5) days after Seller first has knowledge of
the occurrence of same), which notice shall include a description thereof in
reasonable detail and an estimate of the cost of time to repair.  If (i) any
portion of the Property is damaged by fire or casualty after the Effective Date
and is not repaired and restored substantially to its original condition prior
to Closing, or (ii) at the time of Closing the estimated cost of repairs as to
the Property is ONE HUNDRED THOUSAND U.S. DOLLARS ($100,000.00) or less, as
determined by an independent adjuster selected by Seller, Buyer shall be
required to purchase the Property in accordance with this Agreement, and Buyer
shall, at Buyer’s option, either: (x) receive a credit at Closing of the
estimated cost or repairs to the Property, as determined by the aforesaid
independent adjuster, plus any reasonably estimated lost revenue following
Closing arising from such fire or casualty; or (y) receive from Seller at
Closing (I) an assignment, without representation of warranty by or recourse
against Seller, of all insurance claims and proceeds with respect thereto, plus
(II) an amount equal to Seller’s insurance deductible, plus (III) a credit for
the amount of any reasonably estimated lost revenue following Closing arising
from such fire or casualty.  If the estimated cost of repairing such damage to
the Property is more than ONE HUNDRED THOUSAND U.S. DOLLARS ($100,000.00), as
determined by such independent adjuster, Buyer may, at its sole option: (x)
terminate this Agreement by notice to Seller on or before the earlier of the
Closing or the tenth (10th) day after receipt of such notice described above, in
which event no party shall have any further liability to the party under this
Agreement; or (y) proceed to Closing as provided in this Section 12.16.  In no
event shall the amount of insurance proceeds assigned to Buyer under this
subparagraph (plus the amount of the deductible) exceed the lesser of (i) the
cost of repair or (ii) the Purchase Price.  The parties’ obligations, if any,
under this Section 12.16 shall survive the expiration or any termination of this
Agreement.

12.17        Condemnation.  The risk of any loss or damage to the Property by
condemnation before the Closing shall continue to be borne by Seller.  In the
event any condemnation proceeding is commenced or threatened, Seller shall
promptly give Buyer written notice thereof (in any event within five (5) days
after Seller first has knowledge of the occurrence of same), together with such
reasonable details with respect thereto as to which Seller may have
knowledge.  If, prior to Closing, there is a material taking by eminent domain
at the Property, this Agreement shall become null and void at Buyer’s option,
and upon receipt by Seller of the written notice of an election by Buyer to
treat this Agreement as null and void, this Agreement shall be deemed null and
void. If Buyer elects to proceed and to consummate the purchase despite said
material taking, or if there is less than a material taking prior to Closing,
there shall be no reduction in or abatement of the Purchase Price and Buyer
shall be required to purchase the Property in accordance with the terms of this
Agreement, and Seller shall assign to Buyer, without representation of warranty
by or recourse against Seller, all of Seller’s right, title and interest in and
to any award made or to be made in the condemnation proceeding (in which event
Buyer shall have the right to participate in the adjustment and settlement of
any insurance claim relating to said damage).  For the purpose of this Section
12.17, the term “material” shall mean any taking of in excess of five percent
(5%) of the square footage of the Property or ten percent (10%) of the Real
Property associated with the Property.  The parties’ obligations, if any, under
this Section 12.17 shall survive the expiration or any termination of this
Agreement.

 
37

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12.18        Radon Gas.  The following notice is incorporated into this Contract
pursuant to the requirements of Florida Statutes:

Radon Gas:  Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time.  Levels of radon that exceed Federal
and State guidelines have been found in buildings in Florida.  Additional
information regarding radon and radon testing may be obtained from your County
Public Health Unit.

12.19        Limited Liability.  No past, present, or future member, partner,
shareholder, director, officer of employee of any party to this Agreement shall
have any liability or obligation of any nature whatsoever in connection with or
under this Agreement or Document contemplated hereby or in connection with the
transactions contemplated by this Agreement or any such other agreement.

12.20        Survival of Defined Terms.  Where this Agreement provides that a
term or provision shall survive the Closing or the expiration or earlier
termination of this Agreement, any defined terms contained in ARTICLE I that are
used in such surviving term or provision shall also survive.

12.21        Time of Essence.  Time shall be of the essence with respect to all
matters contemplated by this Agreement.

12.22        No Third-Party Beneficiary.  The provisions of this Agreement and
of the documents to be executed and delivered at Closing are and will be for the
benefit of the Buyer, Seller, Guarantor and Escrow Agent only and are not for
the benefit of any third party; and, accordingly, no third party shall have the
right to enforce the provisions of this Agreement or of the documents to be
executed and delivered at Closing.

12.23        WAIVER OF JURY TRIAL.  EACH PARTY HEREBY AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THIS AGREEMENT, OR ANY OTHER DOCUMENT RELATED TO THIS
AGREEMENT, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY EACH PARTY, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE.  ANY PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH PARTY HERETO.

 
38

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39

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the Effective Date.

BUYER:
 
SELLER:
           
THE OAKS BRADENTON, LLC, a Delaware limited liability company
 
OAKS HOLDINGS, LLC, a Florida limited liability company
                 
By: 
LAWRENCE ALF INVESTMENTS, LLC, a Florida limited liability company, its Manager
By:
         
Name:
         
Title:
                             
By: 
           
Stephen D. Russell, a Manager
                               
By:
           
Timothy Buchanan, a Manager

 
 

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ESCROW AGENT:

The undersigned Escrow Agent hereby accepts the foregoing Purchase and Sale
Agreement and agrees to act as Escrow Agent thereunder.

FIRST AMERICAN TITLE INSURANCE COMPANY

By:
   
Name:
   
Title:
   

 
 

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EXHIBIT A-1

FORM OF GUARANTY

GUARANTY OF PURCHASE AND SALE AGREEMENT

THIS GUARANTY OF PURCHASE AND SALE AGREEMENT, dated as of February ____, 2009
(the “Guaranty”), is executed by WINDSOR SENIOR LIVING, LLC, a Florida limited
liability company (the “Guarantor”), and extended to THE OAKS BRADENTON, LLC, a
Delaware limited liability company (the “Buyer”), for the benefit of OAKS
HOLDINGS, LLC, a Florida limited liability company (the “Seller”).

RECITALS:

WHEREAS, Buyer has agreed to purchase, and Seller has agreed to sell and cause
to be transferred to Buyer, an assisted living facility known as Windsor Oaks
(the “Facility”), located at 2614 43rd Street West Bradenton, Florida 34209 and
real and personal property associated therewith pursuant to the terms and
conditions of that certain Purchase and Sale Agreement between Seller and Buyer
dated of even date herewith (the “Agreement”).

WHEREAS, without this Guaranty, Buyer would be unwilling to enter into the
Agreement with the Seller or to consummate the transactions contemplated
therein.

WHEREAS, because of the direct benefit to Guarantor, as an affiliate of Seller,
from the transaction described in the Agreement, and as an inducement to Buyer
to enter into the Agreement, Guarantor agrees to guarantee to Buyer the
obligations of Seller pursuant to the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the benefits received by Guarantor as a
result of the Buyer’s execution of and performance under the Agreement, and for
other good and valuable consideration given by Seller to Guarantor, the receipt
and sufficiency of which is hereby acknowledged by Guarantor, Guarantor hereby
covenants and agrees as follows:

1.
Guaranty of Payment.  Guarantor hereby unconditionally guarantees to Buyer the
payment, when due, of all Seller Obligations.  For the purposes hereof, the term
“Seller Obligations” shall include any and all payment, reimbursement, and
indemnity obligations of Seller to Buyer pursuant to the Agreement, including
without limitation, all obligations of the Seller pursuant to Article X or
Article XI of the Agreement, as such Seller Obligations may be modified,
amended, increased, or extended from time to time without notice to, or the
consent of, the Guarantor.  The guaranty of Guarantor, as set forth in this
section, is a guaranty of payment.

2.
Subordination.  All rights and claims of Guarantor now or hereafter existing
including, without limitation, rights to distributions or dividends from the
Seller (collectively the “Guarantor Claims”) against Seller or any of Seller’s
property which Seller now owns or shall acquire in the future or hereafter
existing shall be subordinate and subject in right of payment to the prior
payment in full of the Seller Obligations to Buyer.  No Guarantor’s Claims
shall, in any event, be payable from Seller to Guarantor while any amount owed
to Buyer by Seller is outstanding pursuant to the Agreement.

 
 

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3.
Guarantor Waivers. Guarantor hereby waives and agrees not to assert or take
advantage of (a) any right or claim of right to cause a marshalling of any of
Seller’s assets or the assets of any other party now or hereafter held as
security for the Seller Obligations; (b) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any Guarantor, any
other guarantor of the Seller Obligations, or Seller or any other person or
entity, or the voluntary or involuntary dissolution of Seller or Guarantor, or
the failure of Buyer to file or enforce a claim against the estate (either in
administration, bankruptcy, or any other proceeding) of Seller or any other
person or entity; (c) any defense based on the failure of Buyer to give notice
of the existence, creation, or incurring of any new or additional Seller
Obligations, or of any action or non-action on the part of any other person
whomsoever, or any modification, amendment, increase, or extension of the terms
of the Agreement, or the Seller Obligations, in connection with any obligation
hereby guaranteed; (d) any defense based upon an election of remedies by Buyer
which destroys or otherwise impairs any subrogation rights of Guarantor or any
other guarantor of the Seller Obligations or the right of Guarantor to proceed
against Seller or any other guarantor for reimbursement, or both; (e) any
defense based upon failure of Buyer to commence an action against Seller; (f)
any defense based upon acceptance of this Guaranty by Buyer; (g) any defense
based upon the invalidity or unenforceability of the Agreement or any of the
Seller Obligations; (h) any defense based upon the failure of Buyer to perfect
any security or to extend or renew the perfection of any security; and (i) any
other legal or equitable defenses whatsoever to which Guarantor might otherwise
be entitled other than to the extent related to the underlying merits of whether
or not a Seller Obligation exists.

4.
Consent to Buyer’s Actions or Inactions.  Guarantor consents that Buyer may, at
any time and from time to time, before or after any default by Seller pursuant
to the Agreement, without reducing the liability of Guarantor hereunder and with
or without further notice to or assent from Guarantor:

A.            Waive or delay the exercise of any of its rights or remedies
against Seller or any other person or entity, including without limitation, any
guarantor guaranteeing payment of any portion of the Seller Obligations;
notwithstanding any waiver or delay, Buyer shall not be precluded from further
exercise of any of its rights, powers or privileges expressly provided for
herein or otherwise available, it being understood that all such rights and
remedies are cumulative;

B.             Waive or extend the time of Seller’s or any other guarantor’s
performance of any and all terms, provisions and conditions set forth in the
Agreement;

C.             Release Seller or any other person or entity, including without
limitation any other guarantor guaranteeing the payment of any portion of the
Seller Obligations, from their obligations to repay all or any portion of the
Seller Obligations;
 
Exhibit A-1, Page 2
 
 
 

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D.             Proceed against Guarantor without first proceeding against or
joining Seller or any other guarantor guaranteeing payment of any portion of the
Seller Obligations;

E.             Modify, amend, increase, or extend any of the Seller Obligations
or the terms of the Agreement; and

F.             Generally deal with Seller or other person or party as Buyer may
see fit.

 Guarantor shall remain bound under this Guaranty notwithstanding any such
exchange, release, surrender, subordination, waiver (whether or not such waiver
is oral or written), delay, proceeding, renewal, extension, modification, act or
failure to act, or other dealings or events described in Subsections A through F
above, even if done without notice or consent from Guarantor.

5.
Waiver of Notice.  Guarantor waives all notices whatsoever with respect to the
Agreement, this Guaranty, and the Seller Obligations, including, but not limited
to, notice of:

A.            Buyer’s acceptance of this Guaranty or its intention to act, or
its action, in reliance hereon;

B.             Presentment and demand for payment of any Seller Obligations or
any portion thereof;

C.             Protest and notice of dishonor or non-payment with respect to any
Seller Obligations or any portion thereof;

D.             Any default by Seller or any pledgor, grantor of security, or any
other guarantor guaranteeing the payment of any portion of the Seller
Obligations;

E.             Any modification, amendment, increase, or extension of any Seller
Obligations or the terms of the Agreement;

F.             Any other notices to which Guarantor may otherwise be entitled;
and

G.             Any demand for payment under this Guaranty.

6.
Primary Liability of Guarantor.  Guarantor agrees that this Guaranty may be
enforced by Buyer without the necessity at any time of resorting to or
exhausting any other security or collateral, and Guarantor hereby waives any
rights to require Buyer to proceed against Seller or any other guarantor or to
require Buyer to pursue any other remedy or enforce any other right.  Guarantor
further agrees that Guarantor shall have no right of subrogation, reimbursement
or indemnity whatsoever, nor any right of recourse to security for the Seller
Obligations against the Seller or any other guarantor, unless and until all of
the Seller Obligations have been paid in full to Buyer or otherwise satisfied to
Buyer’s satisfaction.  Guarantor further agrees that nothing contained herein
shall prevent Buyer from exercising any other rights available to it under the
Agreement or any instrument of security if the Seller fails to timely perform
the obligations of Seller thereunder, and the exercise of the aforesaid rights
shall not constitute a discharge of any of Guarantor’s obligations hereunder; it
being the purpose and intent of Guarantor that Guarantor’s obligations hereunder
shall be absolute, independent and unconditional under any and all
circumstances.  Neither Guarantor’s obligations under this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of Seller or any other guarantor or by
reason of Seller’s or any other guarantor’s bankruptcy, insolvency, death, or
dissolution.

 
Exhibit A-1, Page 3
 
 
 

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7.
Subrogation Rights.  Guarantor irrevocably waives any present or future right to
which Guarantor is or becomes entitled to be subrogated to Buyer’s rights
against Seller or to seek contribution, reimbursement, indemnification, or the
like from Seller on account of this Guaranty or to assert any other claim or
right of action against Seller on account of, arising under, or relating to this
Guaranty.

8.
Cost of Enforcement.  In the event that the Seller Obligations or this Guaranty
are not paid when due, or should it be necessary for Buyer to enforce any other
of its rights under the Agreement or this Guaranty, Guarantor will pay to Buyer,
in addition to payment of all Seller Obligations, all costs of collection or
enforcement, including reasonable attorneys’ fees, paralegals’ fees, legal
assistants’ fees, costs and expenses, whether incurred with respect to
collection, litigation, bankruptcy proceedings, interpretation, dispute,
negotiation, trial, appeal, defense of actions instituted by a third party
against Buyer arising out of or related to the Agreement, enforcement of any
judgment based on this Guaranty, or otherwise, whether or not a suit to collect
such amounts or to enforce such rights is brought or, if brought, is prosecuted
to judgment.

9.
Term of Guaranty; Warranties.  Notwithstanding any statute of limitations
applicable hereto, this Guaranty shall continue in full force and effect until
all outstanding Seller Obligations are fully paid, and all obligations of Seller
pursuant to the Agreement and Guarantor pursuant to this Guaranty are performed
and discharged.  This Guaranty covers the Seller Obligations whether presently
outstanding or arising subsequent to the date hereof.  Guarantor warrants and
represents to Buyer, (i) that this Guaranty is binding upon and enforceable
against Guarantor, its successors and assigns in accordance with its terms, (ii)
that the execution and delivery of this Guaranty does not violate any applicable
laws or constitute a breach of any agreement to which Guarantor is a party, and
(iii) that except as may have been specifically disclosed to Buyer in writing,
there is no litigation, claim, action or proceeding pending, or, to the best
knowledge of Guarantor, threatened against Guarantor which would adversely
affect the financial condition of Guarantor or its ability to fulfill its
obligations hereunder.  Guarantor agrees to promptly inform Buyer of the adverse
determination of any litigation, claim, action or proceeding or the institution
of any litigation, claim, action or proceeding against Guarantor which does or
could adversely affect the financial condition of Guarantor or its ability to
fulfill its obligations hereunder.

10.
Additional Liability of Guarantor.  If Guarantor is or becomes liable for any
indebtedness owing by Seller to Buyer by endorsement or otherwise than under
this Guaranty, such liability shall not be in any manner impaired or reduced
hereby but shall have all and the same force and effect it would have had if
this Guaranty had not existed and Guarantor’s liability hereunder shall not be
in any manner impaired or reduced thereby.

 
Exhibit A-1, Page 4
 
 
 

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11.
Cumulative Rights.  All rights of Buyer hereunder or otherwise arising under the
Agreement or any documents executed in connection with or as security for the
Seller Obligations are separate and cumulative and may be pursued separately,
successively or concurrently, or not pursued without affecting, reducing or
limiting any other right of Buyer and without affecting, reducing, or impairing
the liability of Guarantor.

12.
Pronouns; Captions; Severability. The pronouns used in this instrument shall be
construed as masculine, feminine or neuter as the occasion may require.  Use of
the singular includes the plural, and vice versa.  Captions are for reference
only and in no way limit the terms of this Guaranty.  Invalidation of any one or
more of the provisions of this Guaranty shall in no way affect any of the other
provisions hereof, which shall remain in full force and effect.  Use of the term
“include” or “including” is always without limitation.  “Person” or “party”
means any natural person or artificial entity having legal capacity.

13.
Buyer Assigns.  This Guaranty is intended for and shall inure to the benefit of
Buyer and its successors or assignees, and each and every reference herein to
Buyer shall include and refer to each and every successor or assignee of Buyer
at any time holding or owning any part of or interest in any part of the Seller
Obligations.  Guarantor expressly waives notice of transfer or assignment, and
agrees that the failure of the Buyer to give notice will not affect the
liabilities of Guarantor hereunder.

14.
Application of Payments.  Buyer may apply any payments received by it from any
source against that portion of the Seller Obligations it deems appropriate in
such priority and fashion as it may deem appropriate.

15.
Notices.  Except as otherwise provided in this Guaranty, all notices or other
communications under this Guaranty shall be sent by hand, by overnight courier,
or by registered or certified mail, postage prepaid, to the parties at the
following addresses:

 
to Guarantor:
WINDSOR SENIOR LIVING, LLC

c/o Stephen D. Russell
269 S. Osprey Ave., Suite 200
Sarasota, FL 34236
Telephone No.  941-953-3757
Telecopy No.:  941-953-4306

and

c/o Timothy Buchanan
7309 E. 21st Street, Suite 110
Wichita, KS 67206
Telephone No.:  346-616-6211
Telecopy No.:  346-616-6210
 
Exhibit A-1, Page 5
 
 
 

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to Buyer:
The Oaks Bradenton, LLC

c/o Cornerstone Growth & Income REIT, Inc.
Attn:  Sharon C. Kaiser
Chief Financial Officer
1920 Main Street, Suite 400
Irvine, CA 92614
Telephone No.:  949.263.4326
Telecopy No.:    949.250.0592

 
with copies to:
Servant Healthcare Investments, LLC

Attn: Kevin Maddron
1000 Legion Place, Ste. 1650
Orlando, FL 32801
Telephone No.:   407.999.7772
Telecopy No.:     407.999.7759

and:

Michael A. Okaty, Esq.
Foley & Lardner LLP
111 N. Orange Avenue, Suite 1800
Orlando, FL 32801
Telephone:  407-423-7656
Fax:  407-648-1743
E-mail:  mokaty@foley.com

This section shall not be construed in any way to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.

16.
Conflict of Law.  This Guaranty shall be construed, interpreted, enforced and
governed by and in accordance with the laws of the State of Florida.

17.
Submission to Jurisdiction.  Guarantor irrevocably and unconditionally (a)
agrees that any suit, action or other legal proceeding arising out of or
relating to this Guaranty may be brought, at the option of Buyer, in a court of
competent jurisdiction in Manatee County, Florida or any United States District
Court having jurisdiction in Manatee County, Florida; (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding; and (c)
waives any and all personal rights under the laws of any state to object to the
laying of venue of any such suit, action or proceeding in Manatee County,
Florida.  Nothing contained herein, however, shall prevent Buyer from bringing
an action or exercising any rights against any security or against Guarantor
personally, and against any property of Guarantor, within any other state or
jurisdiction.  Initiating such proceeding or taking such action in any other
state shall in no event constitute a waiver of the agreement contained herein
that the law of the State of Florida shall govern the rights and obligations of
Guarantor and Buyer hereunder or of the submission herein made by Guarantor to
personal jurisdiction within the State of Florida.  The aforesaid means of
obtaining personal jurisdiction are not intended to be exclusive but are
cumulative and in addition to all other means of obtaining personal jurisdiction
and perfecting service of process now or hereafter provided by the law of the
State of Florida.

 
Exhibit A-1, Page 6
 
 
 

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18.
Oral Modification Ineffective.  Any amendment to or modification of this
Guaranty, and any waiver of any provision hereof, shall be in writing and shall
require the prior written approval of the Buyer as evidenced by the handwritten,
non-electronic signature of the Buyer affixed by the Buyer to a paper
document.  This Guaranty shall be irrevocable by Guarantor until all outstanding
Seller Obligations are fully paid, and all obligations of Seller pursuant to the
Agreement are performed and discharged, at which time Buyer will terminate this
Guaranty.  This Guaranty shall continue in full force and effect unless and
until discharged or released by Buyer pursuant to a written instrument properly
executed by the Buyer.

19.
Counterparts.  This Guaranty may be executed in separate counterparts, each of
which shall constitute an original and both of which, when taken together, shall
be constituted one Guaranty.

20.
Mandatory Arbitration.  Any controversy or claim between or among the parties
hereto including but not limited to those arising out of or relating to this
Guaranty or any related agreements or instruments, including any claim based on
or arising from an alleged tort, shall be determined by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law) and the “Special Rules” set forth below.  In the event of
any inconsistency, the Special Rules shall control.  Judgment upon any
arbitration award may be entered in any court having jurisdiction.  Any party to
this Guaranty may bring an action, including a summary or expedited proceeding,
to compel arbitration of any controversy or claim to which this agreement
applies in any court having jurisdiction over such action.

H.            Special Rules.  The arbitration shall be conducted in Bradenton,
Florida, and administered by the American Arbitration Association.  All
arbitration hearings will be commenced within ninety (90) days of the demand for
arbitration; further, the arbitrator shall only, upon a showing of cause, be
permitted to extend the commencement of such hearing for up to an additional
sixty (60) days.

I.               Reservation of Rights.  Nothing in this Guaranty shall be
deemed to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Guaranty; or (ii) limit
the right of the Buyer hereto (a) to exercise self help remedies such as (but
not limited to) setoff, or (b) to foreclose against any real or personal
property collateral, or (c) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief or the appointment of a
receiver.  The Buyer may exercise such self help rights, foreclose upon such
property, or obtain such provisional or ancillary remedies before, during or
after the pendency of any arbitration proceeding brought pursuant to this
Guaranty.  Neither this exercise of self help remedies nor the institution or
maintenance of an action for foreclosure or provisional or ancillary remedies
shall constitute a waiver of the right of any party, including the claimant in
any such action, to arbitrate the merits of the controversy or claim occasioning
resort to such remedies.
 
Exhibit A-1, Page 7
 
 
 

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[Signature Page Follows]
 
Exhibit A-1, Page 8
 
 
 

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IN WITNESS WHEREOF, Guarantor has executed this GUARANTY OF PURCHASE AND SALE
AGREEMENT as of the day and year first above written.

 
WINDSOR SENIOR LIVING, LLC, a Florida limited liability company
                         
By:
     
Name:
Stephen D. Russell
 
Its:
Managing Member
                 
By:
     
Name:
Timothy Buchanan
 
Its:
Managing Member

STATE OF FLORIDA
COUNTY OF SARASOTA

I HEREBY CERTIFY that on this day before me, an officer duly authorized in the
State and County aforesaid to take acknowledgements, personally appeared Stephen
D. Russel, a Managing Member of WINDSOR SENIOR LIVING, LLC, a Florida limited
liability company, who [___] is personally known to me or [___] produced
___________________ as identification, and that he acknowledged executing the
same, freely and voluntarily, for the uses and purposes therein expressed.

WITNESS my hand and official seal in the County and State last aforesaid this
____ day of _________________________, 2009.

     
Signature of Notary
         
Name of Notary (Typed, Printed or Stamped)
         
Commission Number (if not legible on seal):_____
 
My Commission Expires (if not legible on seal):__________

 
Exhibit A-1, Page 9
 
 
 

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STATE OF KANSAS
COUNTY OF SEDGWICK

I HEREBY CERTIFY that on this day before me, an officer duly authorized in the
State and County aforesaid to take acknowledgements, personally appeared Timothy
Buchanan, a Managing Member of WINDSOR SENIOR LIVING, LLC, a Florida limited
liability company, on behalf of the company, who [___] is personally known to me
or [___] produced ___________________ as identification, and that he
acknowledged executing the same, freely and voluntarily, for the uses and
purposes therein expressed.

WITNESS my hand and official seal in the County and State last aforesaid this
____ day of _________________________, 2009.

     
Signature of Notary
         
Name of Notary (Typed, Printed or Stamped)
         
Commission Number (if not legible on seal):_____
 
My Commission Expires (if not legible on seal):__________

 
 
Exhibit A-1, Page 10

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