EX 10.100.2 Joint Venture Purchase Sale Agreement


    PURCHASE
      AND SALE AGREEMENT

     

    THIS
      PURCHASE AND SALE AGREEMENT
      (this
“Agreement”)
      is
      made and entered into this ____ day of October, 2006 by and between PITA
      GENERAL CORPORATION,
      an
      Illinois corporation ( “PITA”)
      and
AHC
      TENANT, INC
      a
      Delaware Corporation (“Tenant”)
      (PITA
      and Tenant referred to collectively as “Seller”),
      each
      of the entities listed in Exhibit
      A
      attached
      hereto (“Licensees”)
      and
BREA
      EMERITUS LLC,
      a
      Delaware limited liability company (the “Buyer”).
      

     

    RECITALS

     

    WHEREAS,
      PITA is
      the owner of fee title to the twenty five (25) healthcare facilities identified
      on Exhibit
      B
      attached
      hereto and made a part hereof as the “Facilities”
(each
      being referred to herein individually as a “Facility”);
      and

     

    WHEREAS,
      PITA leased
      the Facilities to Tenant pursuant to a Master Lease dated July 16, 1999 (the
      “Master
      Lease”);
      and

     

    WHEREAS,
      Tenant
      has entered into Sublease Agreements (“Regulatory
      Subleases”)
      for
      each of the Facilities with the Licensees listed on Exhibit
      C attached
      hereto and made part hereof, which entities have secured and maintained the
      required licenses to operate the Facilities; and 

     

    WHEREAS,
      the
      Regulatory Subleases provide that, for income tax purposes, Tenant is the owner
      of all assets of the Facilities; and

     

    WHEREAS,
      the
      Regulatory Subleases terminate upon the termination of the Master Lease;
      and

     

    WHEREAS,
      the
      Licensees have entered into Consulting and Services Agreements (the
“C&S
      Agreements”)
      with
      management companies (“Managers”)
      listed
      on Exhibit
      D for
      the
      provision of designated services necessary for the operation of the Facilities;
      and

     

    WHEREAS,
      Seller
      desires to sell, transfer, convey and assign (and Licensees, by quitclaim
      instrument, desire to sell, transfer, convey and assign) to Buyer, and Buyer
      desires to acquire, assume and accept from Seller and Licensees (to the extent
      of any interest Licensees may have therein), certain land, personal property
      and
      other assets associated with the Facilities (the “Sale
      Assets,”
as
      further defined herein) and assume the “Assumed
      Obligations,”
as
      further defined herein, to the extent of their respective interests in the
      Sale
      Assets and Assumed Obligations, on and subject to the terms and conditions
      contained in this Agreement; and

     

    WHEREAS,
      simultaneous with the closing of the transactions contemplated by this
      Agreement, Tenant, the Licensees and the Managers shall enter into and execute
      one or more Operations Transfer Agreements (each a “Transfer
      Agreement”)
      with
      Buyer, in the form of Exhibit
      E
      (subject
      to any third party manager’s review and comment), pursuant to which Tenant, the
      Licensees, and Managers shall transfer the operations of the Facilities, and
      all
      of their respective rights, titles and interests therein and thereto, to Buyer
      or Buyer’s designee, and Buyer 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    shall
      accept transfer of the operations of the Facilities
      pursuant
      to the terms of the Transfer Agreements; and

     

    WHEREAS,
      simultaneous with the closing of the transactions contemplated by this
      Agreement, Seller and Licensees shall enter into and execute an Assignment
      and
      Assumption Agreement (the “Assignment
      and Assumption Agreement”),
      in
      the form of Exhibit
      F,
      pursuant to which Seller and Licensees shall sell, transfer, convey, and assign
      to Buyer and Buyer shall purchase, acquire, assume, and accept from Seller
      and
      Licensees, all of their respective right, title and interest in and to any
      assets (to the extent transferable) associated with the Facilities that are
      not
      otherwise sold, transferred, conveyed, assumed, or assigned to Buyer and Buyer
      shall assume and agree to pay the Assumed Obligations pursuant to the terms
      hereof.

     

    NOW,
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which are
      acknowledged hereby, the parties hereto agree to incorporate the above recitals
      into this Agreement as if fully rewritten herein and further agree as
      follows:

     

    1.  Sale.
      Seller
      agrees to sell, convey, and assign (and Licensees, by quitclaim instrument,
      agree to sell, convey and assign) to Buyer, and Buyer agrees to purchase from
      Seller and Licensees, for the Purchase Price (as hereinafter defined), and
      on
      the terms and conditions set forth in this Agreement, the Sale Assets (and,
      with
      respect to the Licensees, any interest they may have therein). The Licensees
      are
      conveying their interest in all of the Sale Assets, to the extent that the
      Licensees have any interest in the Sale Assets, as an accommodation to Buyer
      to
      eliminate any claim or allegation that Buyer is not obtaining title to the
      Sale
      Assets as provided for herein.

     

    1.1.  For
      purposes of this Agreement, the term “Sale
      Assets”
shall
      be deemed to mean on a collective basis:

     

    (a)  The
      Land.
      The
      parcels of land legally described on Exhibit
      G
      attached
      hereto and made a part hereof, together with all rights, easements and interests
      appurtenant thereto of Seller that run with the land including, but not limited
      to, any streets or other public ways adjacent to the Land and any water or
      mineral rights owned by Seller or Licensees (collectively, the “Land”)
      subject to the Permitted Encumbrances set forth in Schedule
      1.

     

    (b)  The
      Improvements.
      All
      improvements located on the Land,
      including, but not limited to, the Facilities, and all other structures,
      systems, fixtures and utilities associated with, and utilized in, the ownership
      and operation of the Facilities (all such improvements being collectively
      referred to as the “Improvements”
and,
      together with the Land, collectively referred to herein as the “Real
      Property”).

     

    (c)  Personal
      Property.
      All
      tangible personal property of
      Seller
      and Licensees (i) located
      on or in the Real
      Property or
      (ii)
      used in connection with the ownership, operation and
      maintenance of the Facilities (the “Personal
      Property”),
      including, but not limited, to, all, if any, building materials, supplies,
      hardware, and carpeting owned by Seller or Licensees and Seller’s and Licensees’
right, title and interest in and to any “Consumables”,
      which
      are hereby defined to be the inventory of 

     


    
      
         

      

      
        2

        
          

        

      

      
         

      

    


    food,
      dietary supplies, medical supplies, floor stock, maintenance supplies, paper
      goods, linens, laundry supplies and all other consumables, disposable items
      used
      in the operation of the Facilities as of the Closing (as defined herein), and
      other inventory maintained in connection with Seller’s and Licensees’ ownership
      and operation of the Facilities as of the Closing (the “Inventory”).
      

     

    (d)  Intangible
      Personal Property.
      Each
      and all of the following items of intangible property owned by Seller or
      Licensees and utilized in
      connection with the ownership and operation of the Facilities (collectively,
      the
“Intangibles”):
      (i)
      to the extent assignable or transferable, all
      right, title and
      interest
      of
      Seller and Licensees in
      and to
      each and every guaranty and warranty concerning the Improvements and the
      Personal Property, including, without limitation, any roofing, air conditioning,
      heating, elevator or other guaranty or warranty relating to the construction,
      maintenance or replacement of the Improvements or any portion thereof;
      (ii) all
      right, title and
      interest in
      and to
      all guaranties and warranties given to Seller or Licensees that have not expired
      (either on a “claims made” or occurrence basis) in connection with the
      operation, construction, improvement, alteration or repair of the Improvements;
      (iii) to the extent assignable or transferable,
      all
      right, title and
      the
      interest of
      Seller
      or Licensees in, to and under all governmental permits, licenses,
      authorizations, operating rights and approvals associated with the physical
      construction of the Improvements (not including any permits, licenses,
      authorizations or approvals associated with the operation of the Facilities
      as
      health care facilities or otherwise); (iv) to the extent assignable, the
      telephone numbers of each of the Facilities; and
      (v)
      to
      the extent assignable or transferable, all
      right, title and
      interest
      of
      Seller and Licensees in,
      to
      and under any certificate of need, operating rights from a governmental
      authority related to the construction and/or operation of any Facility for
      the
      use of a specified number of beds in a skilled nursing facility and/or assisted
      living facility, and any other activities carried on by Seller or Licensees
      in
      the Facilities, or alteration of any such Facility or modification of services
      provided at such Facility.
      Provided, however, the trade names and logos under which the Facilities have
      been operated or used by Seller and Licensees in connection with the operation
      of the Facilities are not part of the Sale Assets and all uses of them at the
      Facilities shall cease upon the Closing. 

     

    (e)  Business
      Records.
      To the
      extent that Seller and Licensees have ownership, control or the right to obtain
      copies thereof, all of the following maintained by, issued to or held by Seller
      or Licensees or used in connection with the operation, maintenance and use
      of
      the Facilities: books and records relating to the Facilities or the operation
      thereof, including, without limitation, files, invoices, forms, accounts,
      correspondence, patient records, technical, accounting and procedural manuals,
      employment records, actuarial studies, studies, reports or summaries relating
      to
      any environmental matters, and other books and records relating to the
      ownership, maintenance or operation of any of the Facilities or any of the
      Sale
      Assets, surveys, engineering or environmental reports and other studies,
      investigations or depictions of the Facilities or the Sale Assets (collectively,
      the “Business
      Records”)
      to the
      extent Seller or Licensees have the right under applicable law to convey or
      transfer them.

     


    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    


     

    (f)  Provider
      Agreements.
      All
      Provider Agreements and for purposes of this Agreement, the term “Provider
      Agreements”
shall
      mean, to the extent they are assignable, any provider agreements held by or
      issued to Seller or Licensees or any Facility under which the Facilities are
      eligible to receive payment under (i) Title XVIII (“Medicare”),
      Title
      XIX (“Medicaid”)
      or any
      other governmental or quasi-governmental third party payor programs, (ii) any
      private or quasi-private healthcare reimbursement or private payor programs
      (including so-called “HMO” and “PPO” programs) (herein, “Third
      Party Payor Programs”),
      and
      (iii) any other agreement, arrangement, program or understanding with any
      federal, state or local governmental agency or organization or private
      organization pursuant to which the Facilities qualify for payment or
      reimbursement for medical or therapeutic care or other goods or services
      rendered or supplied to any resident. Notwithstanding the above, the parties
      hereby acknowledge that Buyer intends to apply for its own Medicare and Medicaid
      provider numbers and, unless it notifies Seller and Licensees at least thirty
      (30) days prior to the Closing Date, the Buyer will not assume any of the
      Seller’s and Licensees’ Medicare and Medicaid Provider Agreements.

     

    (g)  Facility
      and Admission Agreements.
      All
      rights of Seller or Licensees in, to and under all contracts, leases,
      agreements, vehicle leases, commitments and other arrangements, and any
      amendments or modifications, used or useful in the operation of the Facilities
      as of the date hereof or made or entered into by Seller or Licensees between
      the
      date hereof and the Closing Date in compliance with this Agreement (the
“Facility
      Agreements”),
      including but not limited to occupancy, residency, lease, tenancy and similar
      written agreements entered into in the ordinary course of the Business with
      residents of the Facilities (“Admission
      Agreements”).
      

     

    1.2.  Excluded
      Sale Assets.
      Notwithstanding
      any provision of this Agreement to the contrary, the Sale Assets shall not
      include the following (collectively, the “Excluded
      Assets”),
      and
      any such Excluded Assets or proceeds therefrom that Buyer may have or obtain
      post-Closing shall be delivered promptly to Seller and Licensees:

     

    (a)  Any
      and
      all rights in and to claims or causes of action of Seller and Licensees against
      third parties (including, without limitation, for indemnification) with respect
      to, or which are made under or pursuant to, other Excluded Assets;

     

    (b)  Any
      and
      all accounts receivable arising or accruing in connection with the operation
      of
      the Facilities on or prior to the Closing Date and to the extent related to
      the
      period prior to the Closing Date (the “Retained
      Receivables”);

     

    (c)  Subject
      to Article 11,
      any and
      all rights of Seller or Licensees to coverage or benefits under any insurance
      policies in force as of the Closing Date with respect to any liabilities that
      may have arisen or accrued through the Closing Date;

     

    (d)  Any
      Inventory disposed of or consumed between the date hereof and the Closing Date
      in accordance with the terms and provisions of this Agreement;

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (e)  Any
      records relating to Excluded Assets and to liabilities
      other
      than the Assumed Obligations;

     

    (f)  Any
      and
      all cash, bank deposits and other cash equivalents, certificates of deposit,
      marketable securities and cash deposits made by Seller or Licensees to secure
      contract obligations accrued through the Closing Date;

     

    (g)  Personal
      property of Seller’s, the Licensees’ or the Managers’ officers or employees
      located in their respective personal offices at the Facilities;

     

    (h)  Originals
      of all financial and other records of Seller and Licensees (except records
      related to operation of the Facilities or to residents of the
      Facilities);

     

    (i)  All
      other
      assets of Seller and Licensees not located on or used in connection with the
      operation of the Facilities;

     

    (j)  All
      trade
      names, assumed names and logos under which any of the Facilities has been
      operated or used by Seller or Licensees in connection with the operation of
      any
      of the Facilities;
      and

     

    (k)  All
      operating procedure manuals, training manuals and proprietary business forms
      of
      Seller and Licensees.

     

    1.3.  Assumption
      of Obligations.
      Buyer
shall,
      at
      Closing, assume any
      and
      all responsibilities, liabilities and obligations of Seller and Licensees to
      pay, discharge and perform when due all liabilities and obligations of Seller
      or
      Licensees or Managers arising under the Facility Agreements that accrue or
      arise
      after Closing (collectively, the “Assumed
      Obligations”).
      The
      Assumed Obligations shall be prorated as of the Closing Date in accordance
      with
      Article 10.
      The
      parties hereby acknowledge that Buyer is not assuming any obligations or
      liabilities of Seller, Licensees or Managers that arose or accrued prior to
      the
      Closing Date except as specifically set forth herein.

     

    2.  Purchase
      Price.

     

    2.1.  Payment
      of Purchase Price. 

     

    (a)  The
      total
      purchase price for the Sale Assets (the “Purchase
      Price”)
      to be
      paid to Seller by Buyer shall be equal to the sum of One Hundred Ninety Million
      and no/100 Dollars ($190,000,000). It is expressly agreed and acknowledged
      that
      no portion of the Purchase Price shall be paid or payable to the Licensees
      or
      Managers.

     

    (b)  Buyer
      will pay the Purchase Price by (a) depositing, within one (1) business day
      of
      Buyer’s receipt of a fully executed copy of this Agreement, Fifteen Million and
      no/100 Dollars ($15,000,000) (together with any accrued interest thereon, the
      “Deposit”)
      with
      Chicago Title Insurance Company (the
      “Escrow
      Agent”)
      pursuant to the terms of the escrow agreement dated the date hereof between
      the
      Escrow Agent, Buyer and Seller and Licensees (the “Escrow
      Agreement”)
      and
      (b) paying the balance of the

     


    
      
         

      

      
        5

        
          

        

      

      
         

      

    


    Purchase
      Price at Closing by electronic wire transfer of immediately available funds
      to
      the Escrow Agent for disbursement to Seller in accordance with this Agreement.
      

     

    (c)  Subject
      to Article 7,
      the
      entire Deposit is non-refundable and will be released from escrow and disbursed
      by the Escrow Agent to Seller either (i) at Closing as payment of a portion
      of
      the Purchase Price or (ii) upon termination of this Agreement.

     

    2.2.  Allocation
      of the Purchase Price.
      The
      Purchase Price shall be allocated among each of the Facilities in accordance
      with Schedule 2.
      Seller
      and Buyer agree that the form of the transactions and the consideration provided
      for in this Agreement were arrived at on the basis of arm’s length negotiation
      between Seller and Licensees and Buyer, and shall be respected by each of them
      for federal, state, local and other tax reporting purposes, including filings
      on
      Internal Revenue Service Form 8594, and that neither of them will assert or
      maintain a position inconsistent with the forgoing. The Buyer and Seller and
      Licensees hereby agree and acknowledge that no portion of the Purchase Price
      is
      allocable to the Licensees or the Manager.

     

    3.  Closing.
      The
      consummation of the purchase and sale of the Sale Assets contemplated herein
      (“Closing”)
      shall
      occur at 3:00 p.m. Central time on December 1, 2006 (or December 15, 2006,
      if
      Buyer elects to change the Closing Date in accordance with Section 3.3),
      at the
      offices of the Escrow Agent, or at such other time or place or on such other
      date as is mutually agreed to by the parties (the “Closing
      Date”). 

     

    3.1.  BUYER
      ACKNOWLEDGEMENT. BUYER
      ACKNOWLEDGES AND AGREES THAT BUYER IS ACQUIRING THE SALE ASSETS ON AN “AS-IS
      WHERE-IS” BASIS AND ASSUMING THE ASSUMED OBLIGATIONS, WITHOUT REPRESENTATION,
      WARRANTY OR COVENANT (EXPRESS OR IMPLIED OTHER THAN THE EXPRESS REPRESENTATIONS
      CONTAINED IN THIS AGREEMENT) BY SELLER OR LICENSEE AND IN EACH CASE SUBJECT
      ONLY
      TO PERMITTED ENCUMBRANCES. SELLER AND LICENSEE HAVE NOT MADE NOR SHALL BE DEEMED
      TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED OTHER
      THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS AGREEMENT) OR SHALL BE DEEMED
      TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, USE, CONDITION,
      DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE SALE ASSETS (OR
      ANY
      PART THEREOF), THE ASSUMED OBLIGATIONS, OR ANY OTHER REPRESENTATION, WARRANTY
      OR
      COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE SALE ASSETS (OR
      ANY
      PART THEREOF), OTHER THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS
      AGREEMENT, ANY USE OF THE SALE ASSETS, ANY BUSINESS OR BUSINESSES CONDUCTED
      THEREIN, THE VALUE OR FINANCIAL STATUS OF THE SALE ASSETS OR THE FACILITIES,
      AND
      SELLER AND LICENSEE SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT
      THEREON OR THE FAILURE OF THE SALE ASSETS, OR ANY PART THEREOF, TO COMPLY WITH
      ANY LEGAL REQUIREMENT FROM AND AFTER THE CLOSING DATE. BUYER HAS OR PRIOR TO
      THE
      DATE HEREOF WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE SALE ASSETS,
      ASSUMED OBLIGATIONS, AND ANY AND ALL BUSINESSES OR OPERATIONS CONDUCTED THEREIN.
      IT IS UNDERSTOOD AND AGREED THAT BUYER IS PURCHASING THE SALE ASSETS AND
      ASSUMING THE 

     


    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    ASSUMED
      OBLIGATIONS AS SPECIFICALLY SET FORTH IN THIS AGREEMENT. SELLER AND LICENSEES
      HAVE MADE NO REPRESENTATIONS AND WARRANTIES AND SHALL MAKE NO REPRESENTATIONS
      AND WARRANTIES WITH RESPECT TO ANY OF THE BUSINESSES OR OPERATIONS CONDUCTED
      IN
      THE SALE ASSETS, OTHER THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS
      AGREEMENT. BUYER REPRESENTS AND WARRANTS TO SELLER AND LICENSEES, WITHOUT ANY
      LIMITATION WHATSOEVER, THAT IT IS ENTERING INTO THIS AGREEMENT SOLELY ON THE
      BASIS OF THE RESULTS OF BUYER’S OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE
      MATTERS DESCRIBED IN THIS SECTION 3.1,
      AS
      BETWEEN SELLER AND LICENSEES ON THE ONE HAND, AND BUYER, ON THE OTHER HAND,
      ARE
      TO BE BORNE BY BUYER. 

     

    3.2.  Consent
      Condition.
      Seller
      and Licensees acknowledge and agree that Buyer’s obligation to purchase the Sale
      Assets in accordance with the terms specified in this Agreement is subject
      to
      obtaining the consent of ZC Specialty Insurance Company (the “Surety”),
      which
      has issued a financial surety bond with respect to certain secured indebtedness
      that encumbers the Sale Assets (the “Secured
      Debt”),
      which
      consent Seller and Licensees represent and warrant, has been obtained on or
      before the date of this Agreement.

     

    3.3.  Licensure.
      Buyer
      shall be responsible for filing and obtaining all requisite Operator Licenses
      (as hereinafter defined) attributable to the change of ownership and operation
      of the Facilities and Buyer shall file, on or before October 16, 2006, all
      applications that Buyer reasonably believes are required to obtain the Operator
      Licenses. Obtaining all Operator Licenses necessary in Buyer’s reasonable
      opinion to operate the Facilities as of the Closing Date shall not be a
      condition precedent to the sale and assumption as set out herein.
      Buyer
      hereby agrees to use commercially reasonable efforts to obtain such Operator
      Licenses in an expeditious manner. However, if Buyer is unable, despite
      commercially reasonable efforts to comply with applicable agency requirements
      that may be completed pre-Closing, so as to assure Buyer that its license will
      be issued promptly after Closing, then the applicable Licensee and Buyer shall
      enter into a (i) Sale and Leaseback Agreement or (ii) Transition Services
      Agreement, as appropriate to facilitate any necessary regulatory approvals,
      for
      each Facility located in a state where licensing may not occur promptly after
      Closing. Subject to such minor and non-material economic changes as may be
      appropriate for each particular circumstance and as may be required by
      applicable regulatory authorities, the (i) Transition Services Agreement and
      (ii) Sale and Leaseback Agreement shall be substantially in the forms attached
      hereto as Exhibit
      U
      (“Sale
      and Leaseback Agreement”)
      and
Exhibit
      V
      (“Transition
      Services Agreement”) respectively.
      Notwithstanding anything contained herein to the contrary, in the event that
      Buyer, despite using commercially reasonable efforts, has not, on or before
      November 27, 2006, obtained Operator Licenses or satisfied all conditions
      necessary to obtain reasonable assurances from the applicable regulatory
      authorities that it will obtain Operator Licenses promptly after Closing and
      satisfaction or completion of customary post closing matters associated with
      obtaining such Operator Licenses as reasonably determined by Buyer, for at
      least
      sixteen (16) of the Facilities, then Buyer, in its sole discretion, may elect
      to
      change the Closing Date to December 15, 2006. For the avoidance of doubt,
      delivering a copy of the executed deed to the appropriate regulatory authority
      and/or a survey of a Facility by the requisite regulatory authority are examples
      of customary post closing matters. Buyer shall provide Seller and Licensees
      with
      notice that it is exercising its option to change the Closing Date on or before
      11:59 p.m. Central time, November 27, 2006.
      The
      immediately preceding sentence 

     


    
      
         

      

      
        7

        
          

        

      

      
         

      

    


    and
      the
      making of such election does not relieve Buyer of its obligation to close or
      give rise to any right to terminate this Agreement.

     

    3.4.  Westlake
      Facility Closing.
      The
      parties hereby acknowledge that the real property upon which the Cypress Gardens
      at Westlake in Westlake, Ohio (“Westlake
      Facility”) 
      is
      located (“Westlake
      Property”)
      is
      subject to that certain (i) Commissioner’s Deed dated February 28, 1995, and
      (ii) Foreclosure Sale Use Agreement dated February 28, 1995, as amended by
      that
      certain Amendment to Commissioner’s Deed and Foreclosure Sale Use Agreement
      dated June 30, 1999 (collectively, “HUD
      Agreement”).
      The
      HUD Agreement provides, among other things, that the Westlake Property may
      not
      be transferred without the prior written approval of the Department of Housing
      and Urban Development (“HUD”).
      In
      order to obtain HUD’s approval, the Buyer must obtain a “2530 Clearance” from
      HUD and submit (i) a written request to HUD to approve the sale, (ii) a copy
      of
      the HUD Agreement, and (iii) a copy of the Operator License in the name of
      the
      Buyer or, if the application for the Operator License is pending, then a copy
      of
      the applicable application, together with a statement from the State of Ohio
      licensing agency that the Buyer is authorized to operate the Westlake Facility
      under the existing Operator License pending issuance to Buyer of its Operator
      License (collectively, “HUD
      Conditions”).

     

    Buyer
      hereby agrees to diligently pursue in good faith the satisfaction of the HUD
      Conditions and Seller and Licensee hereby agree to cooperate and work with
      Buyer
      in good faith to satisfy the HUD Conditions until Buyer obtains HUD approval
      or
      provides Seller with a Westlake Termination Notice, as defined hereinafter
      below. However, in the event that Buyer, despite good faith efforts, has not
      satisfied the HUD Conditions and obtained HUD approval on or before the Closing
      Date, then, notwithstanding anything contained in this Agreement to the
      contrary, the Sale Assets and Assumed Obligations associated with or related
      to
      the Westlake Facility (collectively, “Westlake
      Facility Assets”)
      shall
      be excluded from the Closing. 

    


    In
      such
      event, (i) the Purchase Price shall be reduced by the amount of the Purchase
      Price allocated to the Westlake Facility Assets (“Westlake
      Facility Price”)
      in
      Schedule 2, (ii) the amount of the Deposit that may be applied against the
      reduced Purchase Price at Closing shall be an amount equal to the Deposit less
      a
      proportionate share of the Deposit allocable to the Westlake Facility Assets
      (“Westlake
      Facility Deposit”)
      and
      (iii) the Westlake Facility Deposit shall be held in escrow as more particularly
      described in the Escrow Agreement. In addition, at Closing, Buyer, or its
      designee, and Westlake Senior Care, LLC shall enter into a management agreement
      on such reasonable terms and conditions as are to be agreed by the parties
      pursuant to which Buyer or its designee shall operate and manage the Westlake
      Facility on an interim basis (the “Westlake
      Management Agreement”).
      Further, at the Westlake Facility Closing (as hereinafter defined), the parties
      shall make the prorations and adjustments provided in Article 10
      with
      respect to the Westlake Facility Assets.

    


    The
      closing with respect to the Westlake Facility Assets (“Westlake
      Facility Closing”)
      shall
      be extended until the fifth business day after the date that Buyer obtains
      HUD
      approval (“Westlake
      Facility Closing Date”).
      The
      purchase price for the Westlake Facility Assets shall be equal to the Westlake
      Facility Price and shall be paid to Seller at the Westlake Facility Closing
      in
      the manner provided in Section 2.1.
      The
      parties shall provide the applicable closing deliveries at the Westlake Facility
      Closing in accordance with the terms and conditions of this Agreement. The
      representations and warranties made by Sellers, Licensees and Buyers in this
      


    
      
         

      

      
        8

        
          

        

      

      
         

      

    


    Agreement
      with respect to (i) the Westlake Facility Assets and (ii) the authority to
      consummate the Westlake Facility Closing shall be true in all material respects
      as of the Westlake Facility Closing Date. Sellers, Licensees and Buyers shall
      continue to comply with the interim operating covenants and other pre-closing
      agreements contained herein with respect to the Westlake Facility until the
      Westlake Facility Closing Date. Closing expenses with respect to the Westlake
      Facility Closing shall be allocated between the parties as provided in Article
      13.
      If the
      Westlake Facility Closing does not occur solely due to Buyer’s default under
      this Agreement, Seller shall be entitled to retain the Westlake Facility
      Deposit, which shall not be considered liquidated damages pursuant to Section
      7.4 hereof, and Seller shall have such additional remedies as are available
      at
      law or in equity.

    


    Notwithstanding
      anything contained herein to the contrary, in the event that Buyer has not
      obtained HUD approval within one hundred twenty (120) days after the Closing
      Date, then Buyer may, in its sole discretion, at anytime thereafter until it
      receives HUD approval provide Seller and Licensees with notice that it no longer
      desires to purchase the Westlake Facility Assets (“Westlake
      Termination Notice”)
      and
      the balance of the Deposit shall be promptly returned to Buyer in accordance
      with the terms and conditions of the Escrow Agreement; provided, that Buyer
      or
      its designee shall continue to operate and manage the Westlake Facility pursuant
      to the terms of the Westlake Management Agreement until the Westlake Facility
      is
      sold to a third party. In such event, Seller will use good faith efforts to
      sell
      the Westlake Facility as promptly as practicable; provided, that Sellers shall
      not be obligated to sell the Westlake Facility for an amount that is less than
      the Westlake Facility Price.

    


    3.5.  California
      Facilities.
      The
      parties hereby acknowledge that the Manager (“California
      Manager”)
      for
      the Facilities located in California (“California
      Facilities”)
      is
      named in the applicable Operator License for each such California Facility.
      Accordingly, such California Manager must be a party to any Sale and Leaseback
      Agreement or Transition Services Agreement described in Section 3.3 with respect
      to any California Facility. In the event that the California Manager refuses
      to
      sign any such agreement and enter into a reasonable management agreement, Buyer,
      in its sole discretion, upon notice to Seller and Licensees may elect to delay
      Closing with respect to the Sale Assets and Assumed Obligations associated
      with
      or related to the California Facilities (collectively, “California
      Facility Assets”)
      until
      such time as Buyer has obtained the Operator Licenses (“California
      Operator Licenses”)
      for
      the California Facilities (“Delayed
      California Closing”).
      

     

    In
      the
      event of a Delayed California Closing, (i) the Purchase Price shall be reduced
      by the amount of the Purchase Price allocated to the California Facility Assets
      (“California
      Facility Price”)
      in
      Schedule 2, (ii) the amount of the Deposit that may be applied against the
      reduced Purchase Price at Closing shall be an amount equal to the Deposit less
      a
      proportionate share of the Deposit allocable to the California Facility Assets
      (“California
      Facility Deposit”)
      and
      (iii) the California Facility Deposit shall be held in escrow as more
      particularly described in the Escrow Agreement. In addition, at the California
      Facility Closing (as hereinafter defined), the parties shall make the prorations
      and adjustments provided in Article 10
      with
      respect to the California Facility Assets.

    


    The
      closing with respect to the California Facility Assets (“California
      Facility Closing”)
      shall
      be extended until the fifth business day after the date that Buyer obtains
      the



    
      
         

      

      
        9

        
          

        

      

      
         

      

    


    California
      Operator Licenses (“California
      Facility Closing Date”).
      The
      purchase price for the California Facility Assets shall be equal to the
      California Facility Price and shall be paid to Seller at the California Facility
      Closing in the manner provided in Section 2.1.
      The
      parties shall provide the applicable closing deliveries at the California
      Facility Closing in accordance with the terms and conditions of this Agreement.
      The representations and warranties made by Sellers, Licensees and Buyers in
      this
      Agreement with respect to (i) the California Facility Assets and (ii) the
      authority to consummate the California Facility Closing shall be true in all
      material respects as of the California Facility Closing Date. Sellers, Licensees
      and Buyers shall continue to comply with the interim operating covenants and
      other pre-closing agreements contained herein with respect to the California
      Facilities until the California Facility Closing Date. Closing expenses with
      respect to the California Facility Closing shall be allocated between the
      parties as provided in Article 13.
      If the
      California Facility Closing does not occur solely due to Buyer’s default under
      this Agreement, Seller shall be entitled to retain the California Facility
      Deposit, which shall not be considered liquidated damages pursuant to Section
      7.4 hereof, and Seller shall have such additional remedies as are available
      at
      law or in equity.

    


    3.6.  Kansas
      Facility.
      The
      parties hereby acknowledge that the Manager (“Kansas
      Manager”)
      for
      the Facility located in Overland Park, Kansas (“Kansas
      Facility”)
      is
      named in the applicable Operator Licenses for the Kansas Facility. Accordingly,
      the Kansas Manager must be a party to any Sale and Leaseback Agreement or
      Transition Services Agreement described in Section 3.3 with respect to Kansas
      Facility. In the event that the Kansas Manager refuses to sign any such
      agreement, Buyer, in its sole discretion, upon notice to Seller and Licensees
      may elect to either (i) retain the Kansas Manager to manage the Kansas Facility
      for a period of time post-Closing until the applicable Operator Licenses have
      been obtained, or (ii) delay Closing with respect to the Sale Assets and Assumed
      Obligations associated with or related to the Kansas Facility (“Kansas
      Facility Assets”)
      until
      such time as Buyer has obtained the Operator Licenses (“Kansas
      Operator Licenses”)
      for
      the Kansas Facility (“Delayed
      Kansas Closing”).
      Further, in the event that a Sale and Leaseback Agreement or Transition Services
      Agreement described in Section 3.3 is found to be impermissible under applicable
      regulatory requirements, then Buyer, in its sole discretion, upon notice to
      Seller and Licensees may elect to have a Delayed Kansas Closing.

     

    In
      the
      event of a Delayed Kansas Closing, (i) the Purchase Price shall be reduced
      by
      the amount of the Purchase Price allocated to the Kansas Facility Assets
      (“Kansas
      Facility Price”)
      in
      Schedule 2, (ii) the amount of the Deposit that may be applied against the
      reduced Purchase Price at Closing shall be an amount equal to the Deposit less
      a
      proportionate share of the Deposit allocable to the Kansas Facility Assets
      (“Kansas
      Facility Deposit”)
      and
      (iii) the Kansas Facility Deposit shall be held in escrow as more particularly
      described in the Escrow Agreement. In addition, at the Kansas Facility Closing
      (as hereinafter defined), the parties shall make the prorations and adjustments
      provided in Article 10
      with
      respect to the Kansas Facility Assets.

    


    The
      closing with respect to the Kansas Facility Assets (“Kansas
      Facility Closing”)
      shall
      be extended until the fifth business day after the date that Buyer obtains
      the
      Kansas Operator Licenses (“Kansas
      Facility Closing Date”).
      The
      purchase price for the Kansas Facility Assets shall be equal to the Kansas
      Facility Price and shall be paid to Seller at the Kansas Facility Closing in
      the
      manner provided in Section 2.1.
      The
      parties shall provide the applicable closing deliveries at the Kansas Facility
      Closing in accordance with the terms and conditions of this 

     


    
      
         

      

      
        10

        
          

        

      

      
         

      

    


    Agreement.
      The representations and warranties made by Sellers, Licensees and Buyers in
      this
      Agreement with respect to (i) the Kansas Facility Assets and (ii) the authority
      to consummate the Kansas Facility Closing shall be true in all material respects
      as of the Kansas Facility Closing Date. Sellers, Licensees and Buyers shall
      continue to comply with the interim operating covenants and other pre-closing
      agreements contained herein with respect to the Kansas Facility until the Kansas
      Facility Closing Date. Closing expenses with respect to the Kansas Facility
      Closing shall be allocated between the parties as provided in Article
13.
      If the
      Kansas Facility Closing does not occur solely due to Buyer’s default under this
      Agreement, Seller shall be entitled to retain the Kansas Facility Deposit,
      which
      shall not be considered liquidated damages pursuant to Section 7.4 hereof,
      and
      Seller shall have such additional remedies as are available at law or in
      equity.

     

    3.7.  Colorado
      Facilities.
      In the
      event that a Sale and Leaseback Agreement or Transition Services Agreement
      described in Section 3.3 is found to be impermissible under applicable
      regulatory requirements, then Buyer, in its sole discretion, upon notice to
      Seller and Licensees, may elect to delay the Closing (“Delayed
      Colorado Closing”)
      with
      respect to the Sale Assets and Assumed Obligations (“Colorado
      Facility Assets”)
      associated with or related to the Facilities located in the State of Colorado
      (“Colorado
      Facilities”).
      

     

    In
      the
      event of a Delayed Colorado Closing, (i) the Purchase Price shall be reduced
      by
      the amount of the Purchase Price allocated to the Colorado Facility Assets
      (“Colorado
      Facility Price”)
      in
      Schedule 2, (ii) the amount of the Deposit that may be applied against the
      reduced Purchase Price at Closing shall be an amount equal to the Deposit less
      a
      proportionate share of the Deposit allocable to the Colorado Facility Assets
      (“Colorado
      Facility Deposit”)
      and
      (iii) the Colorado Facility Deposit shall be held in escrow as more particularly
      described in the Escrow Agreement. In addition, at the Colorado Facility Closing
      (as hereinafter defined), the parties shall make the prorations and adjustments
      provided in Article 10
      with
      respect to the Colorado Facility Assets.

    


    The
      closing with respect to the Colorado Facility Assets (“Colorado
      Facility Closing”)
      shall
      be extended until the fifth business day after the date that Buyer obtains
      the
      Colorado Operator Licenses (“Colorado
      Facility Closing Date”).
      The
      purchase price for the Colorado Facility Assets shall be equal to the Colorado
      Facility Price and shall be paid to Seller at the Colorado Facility Closing
      in
      the manner provided in Section 2.1.
      The
      parties shall provide the applicable closing deliveries at the Colorado Facility
      Closing in accordance with the terms and conditions of this Agreement. The
      representations and warranties made by Sellers, Licensees and Buyers in this
      Agreement with respect to (i) the Colorado Facility Assets and (ii) the
      authority to consummate the Colorado Facility Closing shall be true in all
      material respects as of the Colorado Facility Closing Date. Sellers, Licensees
      and Buyers shall continue to comply with the interim operating covenants and
      other pre-closing agreements contained herein with respect to the Colorado
      Facility until the Colorado Facility Closing Date. Closing expenses with respect
      to the Colorado Facility Closing shall be allocated between the parties as
      provided in Article 13.
      If the
      Colorado Facility Closing does not occur solely due to Buyer’s default under
      this Agreement, Seller shall be entitled to retain the Colorado Facility
      Deposit, which shall not be considered liquidated damages pursuant to Section
      7.4 hereof, and Seller shall have such additional remedies as are available
      at
      law or in equity.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    


    4.  Seller’s
      and Licensees’ Representations and Warranties.
      Seller
      and Licensees represent, warrant and covenant to Buyer that the following
      matters are true as of the date hereof and shall be true in all material
      respects as of the Closing Date:

     

    4.1.  Ownership.
      PITA is
      the owner, in fee simple, of the Real
      Property,
      and
      together with Tenant and Licensees, has good and marketable title to the
      remainder of the Sale Assets, subject only to the Permitted Encumbrances.


     

    4.2.  Status.
      PITA is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Illinois and Tenant is a corporation duly organized,
      validly existing and in good standing under the laws of the State of Delaware.
      Each Licensee is a limited liability company duly organized and validly existing
      and in good standing under the laws of the State of Indiana as set forth in
      Exhibit
      A.
      PITA,
      Tenant and the Licensees are duly qualified to do business as a foreign
      corporation or limited liability company in the states in which the Facilities
      are located.

     

    4.3.  Authority.
      The
      execution and delivery of this Agreement and all documents to be executed by
      it
      pursuant to this Agreement by Seller and/or Licensees, and the performance
      of
      this Agreement and all documents to be executed by it pursuant to this Agreement
      by Seller and/or Licensees, have been duly authorized by Seller and/or
      Licensees, and this Agreement is binding on Seller and Licensees and enforceable
      against Seller and Licensees in accordance with its terms except as
      enforceability may be restricted, limited or delayed by applicable bankruptcy
      or
      other laws affecting creditors’ rights generally and except as enforceability
      may be subject to general principles of equity. The execution of this Agreement
      and the consummation of the transactions contemplated in this Agreement do
      not
      and will not result in a breach of the terms and conditions of, nor constitute
      a
      default under or violation of, Seller’s or Licensees’ articles of incorporation,
      bylaws or any law, regulation, court order, or any mortgage, note, bond,
      indenture, agreement, license or other instrument or obligation to which Seller
      or Licensees are now a party or by which any of portion of the Sale Assets
      may
      be bound or affected and that is material to Seller’s and Licensees’ business.
      At the Closing, the Seller and Licensees shall cause the Secured Debt to be
      prepaid in full and all liens and security interests encumbering any of the
      Sale
      Assets and securing the Secured Debt shall be released and discharged in
      full.

     

    4.4.  Notices
      of Violations.
      Except
      as set forth on Exhibit
      H,
      since
      April 1, 2003, and except as set forth on Exhibit
      H to
      Seller’s and Licensees’ knowledge prior to April 1, 2003, Seller and Licensees
      have not received any written notices, orders, demands or other directives
      from
      any governmental authorities or quasi-governmental authorities or their agents
      and contractors pertaining to any uncured material violations of any applicable
      laws, ordinances, rules, regulations, codes, licenses, permits and
      authorizations pertaining to the operation of the Facilities, including but
      not
      limited to all applicable federal and state health
      care laws, rules and regulations, including, without limitation those relating
      to the payment or receipt of illegal remuneration, including 42 U.S.C.
§ 1320a-7b(b) (the Medicare/Medicaid anti-kickback statute), 42 U.S.C.
§ 1395nn (the Stark Statute), 42 U.S.C. § 1320a-7a, 42 U.S.C.
§ 1320a-7b(a), 42 U.S.C. § 1320a-7b(c), and applicable state
      anti-kickback laws.
      Notwithstanding
      anything herein to the contrary, Seller shall be responsible for any
      (i) fines
      or
      penalties relating to periods prior to Closing or (ii) post-Closing capital
      expenditures in excess of $2,500, that are required solely in 

     


    
      
         

      

      
        12

        
          

        

      

      
         

      

    


    connection
      with the OSHA inspection of September 26, 2006 - October 3, 2006 of the Facility
      located in Denver, Colorado, as disclosed in Exhibit H hereto.

     

    4.5.  Litigation.
      To
      Seller’s and Licensees’ knowledge, and except as disclosed on Exhibit
      I
      attached
      hereto and made a part hereof, there are no pending or currently threatened
      in
      writing, judicial, municipal or administrative proceedings affecting the Sale
      Assets or in which Seller or Licensees are parties by reason of Seller’s or
      Licensees’ ownership of the Sale Assets or any portion thereof in each case
      other than those that could not reasonably be expected to have a material effect
      on Seller and Licensees or the Facilities, nor that will have any material
      effect on the Facilities from and after the Closing Date.

     

    4.6.  Operator
      Licenses and Provider Agreements.
      Except
      as disclosed in Exhibit
      H,
      the
      Licenses have been issued, and, to Seller’s and Licensees’ knowledge, are in
      good standing with respect to, any and all permits, licenses, regulatory
      approvals, approvals, certificates of need, accreditations and comparable
      authorizations (collectively, “Operator
      Licenses”)
      from
      all applicable governmental and quasi-governmental authorities that have
      jurisdiction over any aspect of the Facilities or over the operation thereof)
      necessary for the use, operation and maintenance of the applicable Facility
      in
      the current use and the conduct of Seller’s and Licensees’ business therein. The
      Licensees have obtained and, to Seller’s and Licensees’ knowledge, are in good
      standing with respect to any and all material Provider Agreements under which
      the Seller or Licensees and/or the applicable Facility is entitled to receive
      payment or reimbursement under Medicare, Medicaid or any Third Party Payor
      Programs.
      To the
      best knowledge of Seller and Licensees all Operator Licenses and Provider
      Agreements are in full force and effect and Seller and Licensees have complied
      with such Agreements in all material respects.

     

    4.7.  No
      Reimbursement Audits or Appeals.
      To
      Seller’s and Licensees’ knowledge, there are no current, pending or outstanding
      Medicaid, Medicare or other Third Party Payor Programs’ investigations, audits
      or appeals pending at the Facilities other than those, if any, identified on
      Exhibit
      J
      attached
      hereto.

     

    4.8.  Cost
      Reports.
      Except
      as set forth in Exhibit
      K,
      any and
      all Medicare cost reports for all applicable Facilities that were due after
      April 1, 2003, and to Seller’s and Licensees’ knowledge prior to April 1, 2003,
      have been filed with the appropriate government agency or contractor by the
      required filing date. Except as indicated on Exhibit
      K,
      to the
      Seller’s and Licensees’ knowledge there have been no determined overpayments
      between Seller and Licensees, on the one hand, and any Medicare fiscal
      intermediary, on the other hand, regarding the filed cost reports of a Facility
      other than with respect to adjustments thereto made in the ordinary course
      of
      business.

     

    4.9.  Penalties
      or Exclusion from Government Programs.
      Since
      April 1, 2003, and to Seller’s and Licensees’ knowledge prior thereto, neither
      Seller or Licensees nor any senior management, officers or directors have been
      (i) excluded from participating in any federal health care program (as defined
      in 42 U.S.C. §1320a-7b (f)), (ii) subject to sanction pursuant to 42 U.S.C.
§1320a-7a or 1320a-8, or (iii) convicted of a crime described at 42 U.S.C.
§1320a-7b.

     

    4.10.  Compliance
      Program.
      Except
      as set forth in Exhibit
      L,
      (a)
      Seller and Licensees are not a party to a Corporate Integrity Agreement with
      the
      Office of Inspector General of the 

     


    
      
         

      

      
        13

        
          

        

      

      
         

      

    


    Department
      of Health and Human Services, and (b) Seller and Licensees have no ongoing
      reporting obligations pursuant to any settlement agreement entered into with
      any
      governmental authority.

     

    4.11.  United
      States Person.
      PITA,
      Tenant and each Licensee are each a “United States Person” within the meaning of
      Section 1445(f)(3) of the Internal Revenue Code of 1986, as
      amended.

     

    4.12.  Taxes
      and Tax Returns.
      Seller
      and Licensees have taken any and all actions pursuant to applicable federal
      and
      state tax laws relating to the timely filing of any and all federal, state,
      local and foreign tax returns and have paid of any and all applicable tax
      liabilities, as required, the nonpayment of which could result in a lien being
      placed against the Sale Assets. Seller and Licensees have paid (or shall pay
      as
      required) all taxes imposed against Seller and Licensees with respect to which
      Buyer could be held liable under applicable law, or the Sale Assets, or any
      part
      of it, could be subject to liens or claims, with respect to any period on or
      prior to the Closing Date, under applicable law. 

     

    4.13.  Bankruptcy/Dissolution
      Event.
      No
“Bankruptcy/Dissolution Event” (as defined below) has occurred with respect to
      (a) Seller; (b) Tenant, or (b) any Licensee. “Bankruptcy/Dissolution
      Event”
means
      the occurrence of any of the following: (a) the commencement of a case under
      Title 11 of the U.S. Code, as now constituted or hereafter amended, or under
      any
      other applicable federal or state bankruptcy law or other similar law; (b)
      the
      appointment of a trustee or receiver of any property interest; (c) an assignment
      for the benefit of creditors; (d) an attachment, execution or other judicial
      seizure of a substantial property interest; (e) the taking of, failure to take,
      or submission to any action indicating an inability to meet its financial
      obligations as they accrue; or (f) a dissolution or liquidation, death or
      incapacity. 

     

    4.14.  Personal
      Property.
      Exhibit
      M
      sets
      forth a complete list of all Personal Property with an original aggregate cost
      of Ten Thousand Dollars ($10,000) or more that Seller or Licensees acquired
      after April 1, 2003, and Seller or Licensees hold good title to, and the entire
      right, title, and interest in and to, the Personal Property, free and clear
      of
      any and all leases, liens, encumbrances, or other liabilities except as set
      forth in Exhibit
      N.

     

    4.15.  Operating
      Statements.
      Attached hereto as Exhibit
      O
      are
      financial statements for the Facilities (the “Operating
      Statements”).
      To
      the best knowledge of Seller and Licensees, the Operating Statements are full,
      true and correct in all material respects and have been prepared in accordance
      with standard accounting practices, consistently applied, and no material
      adverse change has occurred since the respective dates thereof with the
      exception that the interim Operating Statements do not include any footnote
      disclosures or any customary year-end adjustments.

     

    4.16.  Tenant
      Leases.
      Exhibit
      P
      is a
      full, true and correct rent roll and lease summary (the “Rent
      Roll”)
      for
      each of the Facilities as of the date specified therein, which sets forth all
      Admission Agreements with respect to the Facilities. Except as set forth in
      the
      Rent Roll, each Admission Agreement is in full force and effect, and the term
      of
      the same and the obligation to pay rent thereunder has commenced and the tenant
      thereunder is in full possession and actual 

     


    
      
         

      

      
        14

        
          

        

      

      
         

      

    


    occupancy
      thereof. All brokerage commissions with respect to the Admission Agreements
      have
      been paid in full or will have been paid in full prior to the Closing Date
      and
      there are and will be no commissions payable with respect to renewals,
      extensions or expansions of or under any Admission Agreements.

     

    4.17.  Existing
      Agreements.
      There
      are no agreements or understandings (whether written or oral) relating to the
      Facilities, except for the Permitted Encumbrances, the Admission Agreement,
      the
      Master Lease, the Regulatory Subleases and the Facility Agreements. All Facility
      Agreements with respect to or affecting the Facilities are listed and described
      in Exhibit
      Q
      which
      will reasonably be expected to have liabilities or obligations thereunder
      involving more than Ten Thousand Dollars ($10,000) in
      the
      aggregate within any 12 month period from and after the Closing
      Date.

     

    4.18.  Hazardous
      Materials.
      To the
      best knowledge of Seller and Licensees, Exhibit
      S
      is a
      list of all environmental reports (the “Environmental
      Reports”)
      obtained by Seller and Licensees or in Seller’s and Licensees’ possession or
      control with respect to the Facilities. Except as set forth in the Environmental
      Reports, to the best knowledge of Seller and Licensees, there are (and have
      been) no Hazardous Materials (as hereinafter defined) installed or stored in
      or
      otherwise existing at, on, in or under the Facilities in violation of any
      applicable federal, state and local laws, ordinances, rules, regulations, and
      other governmental requirements applicable to any of the Facilities. The term
      “Hazardous
      Material”
shall
      mean asbestos, petroleum products, and any other hazardous waste or substance
      which has, as of the date hereof, been determined to be hazardous or a pollutant
      by the U.S. Environmental Protection Agency, the U.S. Department of
      Transportation, or any instrumentality authorized to regulate substances in
      the
      environment which has jurisdiction over the Facilities.

     

    4.19.  ERISA.
       
      Seller
      and Licensees are not, and no portion of the Property is an asset of, an
“employee benefit plan” as defined in Section 3(3) of the Employee Retirement
      Income Security Act of 1974, as amended (“ERISA”) (whether or not subject to
      ERISA, and including, without limitation, governmental and foreign plans),
      a
      plan subject to Section 4975 of Internal Revenue Code of 1986, as amended,
      or an
      entity that is deemed to hold plan assets of any of the foregoing by reason
      of
      investment by an employee benefit plan or other plan in such
      entity.

     

    4.20.  COBRA.
      Seller
      and Licensees are in compliance with all currently applicable Consolidated
      Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
      requirements respecting current or former employees. Seller and Licensees do
      not
      provide any retiree medical benefits to former employees.

     

    4.21.  Limitation
      of Liability.
      Buyer’s
      exclusive post-Closing remedy for any damages hereunder shall be a claim or
      action for breach of contract, or a breach of a representation or warranty.
      The
      maximum aggregate amount of damages recoverable against Seller and Licensees
      with respect to any and all breaches, performance, non-performance, acts or
      omissions hereunder will not exceed in the aggregate an amount equal to
      $2,500,000. Notwithstanding
      the foregoing, Buyer shall not be entitled to any payment of damages until
      the
      aggregate amount of all such damages exceeds One Hundred Thousand Dollars
      ($100,000), and then only to the extent such damages exceed $100,000. Moreover,
      a claim or action for damages shall only be valid to the extent brought by
      Buyer
      in accordance with the provisions of this Agreement prior to the first


     


    
      
         

      

      
        15

        
          

        

      

      
         

      

    


    anniversary
      of the Closing Date (or, if applicable pursuant to Sections 3.4 or 3.5 hereof,
      with respect to Westlake Facility Assets or California Facility Assets, the
      Westlake Facility Closing Date or the California Facility Closing Date,
      respectively).
      On the
      Closing Date, Surety or Centre Solutions (US) Limited shall execute a guaranty
      in favor of Buyer guaranteeing Seller’s and Licensees’ potential post-Closing
      liability under this Agreement
      (“Guaranty”). 

     

    5.  Buyer’s
      Representations and Warranties.
      Buyer
      represents, warrants and covenants to Seller and Licensees that the following
      matters are true as of the date hereof and shall be true in all material
      respects as of the Closing Date:

     

    5.1.  Authority.
      The
      execution and delivery of this Agreement by Buyer, and the performance of this
      Agreement by Buyer, has been duly authorized by Buyer, and this Agreement is
      binding on Buyer and enforceable against Buyer in accordance with its terms
      except as enforceability may be restricted, limited or delayed by applicable
      bankruptcy or other laws affecting creditors’ rights generally and except as
      enforceability may be subject to general principles of equity. 

     

    5.2.  Capacity.
      Buyer
      is a limited liability company duly organized, validly existing and in good
      standing under the laws of the State of Delaware. Buyer has the requisite power
      and authority to enter into this Agreement, perform its obligations hereunder
      and to conduct its business or operations as now being conducted.

     

    5.3.  Qualification.
      Neither
      Buyer nor any of its respective representatives, officers, directors, partners,
      members, agents or employees has been disqualified from participating in either
      the Medicare or Medicaid programs or under any Third Party Payor Programs.
      Without limitation of the foregoing, neither Buyer nor any of its respective
      officers, directors or managing employees or other employees or agents, or
      other
      persons required to be identified (Medicare Form 855) has engaged in any
      activities which are prohibited under criminal law, or are cause for civil
      penalties or mandatory or permissive exclusion from Medicare, or any other
      state
      health care program.

     

    5.4.  Availability
      of Funds.
      Buyer
      has, or at Closing will have, the credit facilities or cash in amounts equal
      to
      the Purchase Price and will at the Closing have immediately available funds
      in
      cash, which are sufficient to pay the balance of the Purchase Price and to
      pay
      any other amounts payable pursuant to this Agreement and to consummate the
      transactions contemplated by this Agreement. If
      Buyer
      is relying on financing to consummate the purchase of the Sale Assets, failure
      to obtain any such financing shall not excuse Buyer’s performance
      hereunder.

     

    5.5.  Sale
      Assets.
      Buyer’s
      agreement to acquire the Sale Assets “as-is where-is”, as more particularly
      provided in Section 3.1
      hereof,
      includes, subject to Section 8.1,
      Buyer’s
      acceptance of the state of title to the Land and matters of survey as disclosed
      in the title commitments, title policies and surveys previously obtained by
      and/or provided to Buyer and any updates thereto including, without limitation,
      the Permitted Encumbrances.

     

    5.6.  Hart-Scott-Rodino.
      Buyer
      has
      determined that no filings are required under the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended ("HSR Act") in connection with the
      transactions contemplated by this Agreement on the basis that the acquiring
      person (as 

     


    
      
         

      

      
        16

        
          

        

      

      
         

      

    


    defined
      in the HSR Act and Rules) does not meet the jurisdictional threshold under
      Section 7A(a)(2)(B)(ii)(II).  Buyer indemnifies and holds the Seller and
      Licensees harmless from and against any losses, costs, expenses, attorneys’
fees, fines, or penalties which any of the Licensees or Seller may incur,
      suffer, sustain, or become subject to as the result of any claim or
      determination that Seller was required to file Hart-Scott-Rodino applications
      with the Federal Trade Commission and the Department of Justice.

     

    6.  Conduct
      Prior to Closing.
      During
      the period commencing on the date of this Agreement and ending on the Closing
      Date:

     

    6.1.  Continued
      Operations.
      Seller
      and Licensees will operate the Facilities only in the ordinary course of
      business consistent with past practices and with due regard to the proper
      maintenance and repair of the Sale Assets, to the end that the Sale Assets,
      and
      any inventory levels, will be maintained substantially in the same condition
      as
      they were in at the date of this Agreement, ordinary wear and tear, insured
      casualty loss and taking by eminent domain excepted. 

     

    6.2.  Admission
      Agreements.
      Seller
      and Licensees will continue to actively market (including the placing of
      advertisements in accordance with its past business practices) and offer the
      Facilities for lease in the same manner as prior hereto pursuant to its current
      business practices and in accordance with the current market rent schedule
      provided to Buyer prior to the date of this Agreement Date subject to certain
      leasing incentives offered by Seller and Licensees from time to time disclosed
      on Exhibit
      Q,
      provided that no leasing incentives to new residents that are not consistent
      with Exhibit
      Q that
      are
      to remain in effect after Closing may be given without Buyer’s consent. For the
      avoidance of doubt, Seller and Licensees have not in the past accepted (i)
      the
      advance payment of rent, (ii) any lump sum payment, or (iii) an extraordinarily
      large security deposit from any resident in exchange for a reduced monthly
      rental payment.

     

    6.3.  Facility
      Agreements.
      Seller
      and Licensees shall not enter into any additional Facility Agreements (other
      than Admission Agreements) nor
      shall
      Seller and Licensees amend or extend any Facility Agreements without the prior
      consent of Buyer with the exception of those Facility Agreements entered into,
      extended or amended in the ordinary course of business and consistent with
      past
      business practices. Seller and Licensees shall terminate as of the Closing
      Date
      any Facility Agreement which is objected to by Buyer in writing at least ten
      (10) days prior to the Closing Date, provided (i) such Facility Agreements
      can
      be terminated in accordance with their respective terms and (ii) Buyer agrees
      in
      writing to pay the cost of any termination fee or other expense incurred by
      Seller or Licensees in terminating such Facility Agreement. Notwithstanding
      anything contained herein to the contrary, Seller and Licensees may not (i)
      extend or amend any existing Facility Agreement disclosed on Exhibit
      R
      or (ii)
      enter into a new Facility Agreement that would have been required to be
      disclosed on Exhibit
      R
      without
      Buyer’s written consent, which cannot be unreasonably withheld, conditioned or
      delayed, with the exception of any extended or amended Facility Agreement or
      a
      new Facility Agreement that is entered into in the ordinary course of business
      and consistent with the past business practices of Seller and Licensees, and
      that can be terminated upon thirty (30) days’ advance written notice without
      penalty.

     

    6.4.  Seller’s
      and Licensees’ Insurance.
      Seller
      and Licensees shall maintain their existing insurance policies for the
      Facilities through the Closing Date. 

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    6.5.  Termination
      of Agreements.
      Except
      to the extent expressly requested by Buyer in writing to the contrary, Seller,
      Tenant and Licensees, as applicable, shall cause the Master Lease, each
      Regulatory Sublease, and each of the C&S Agreements, to be terminated as of
      Closing. To the extent that the Master Lease, any Regulatory Sublease, or any
      C&S Agreement, or any memorandum thereof has been recorded, Seller, Tenant
      and Licensee, as applicable, shall cause a release of same to be recorded on
      the
      Closing Date. 

     

    7.  Termination.

     

    7.1.  Right
      to Terminate.
      Notwithstanding anything herein to the contrary, this Agreement and the
      transactions contemplated hereby may be terminated at any time prior to the
      Closing:

     

    (a)  by
      the
      written consent of Buyer, Seller and Licensees;

     

    (b)  by
      Seller
      or Licensees, if there has been (i) a material breach by Buyer in its obligation
      to proceed to Closing pursuant to the terms of this Agreement (all conditions
      to
      such obligation having been satisfied in all material respects or waived by
      Buyer);

     

    (c)  by
      Buyer,
      if there has been a material breach by Seller or Licensees of any of the
      representations, warranties, covenants or agreements made by Seller or Licensees
      in this Agreement, following written notice from Buyer, and Seller or Licensees
      failing to cure any such material breach within ten (10) days of receipt of
      such
      notice, results in a material adverse change in the business, results of
      operation, assets or financial condition of Seller and Licensees, collectively
      and taken as a whole, or as a result thereof causes a material adverse impact
      on
      the condition, value or operations of the Facilities or Buyer’s investment
      therein, each as determined from the perspective of a reasonable person in
      Buyer’s position of such material breach by Buyer;

     

    (d)  by
      Buyer,
      pursuant to Article 11
      hereof;
      or 

     

    (e)  by
      prompt
      notice given in accordance with Article 16,
      by
      Seller and Licensees if the Closing shall not have occurred at or before 11:59
      p.m. on December 1, 2006, or 11:59 p.m. on December 15, 2006, if the Closing
      Date is changed pursuant to Section 3.3;
      provided, however, that the right to terminate this Agreement under this Section
      7.1(e)
      shall
      not be available to Seller and Licensees if their failure to fulfill any of
      their material obligations under this Agreement have been the cause of or
      resulted in the failure of the Closing to occur on or prior to the aforesaid
      date.

     

    7.2.  Certain
      Effects of Termination.
      In the
      event of the termination of this Agreement by either Seller and Licensees or
      Buyer as provided in Section 7.1:

     

    (a)  each
      party, if so requested by the other party, will return promptly every document
      furnished to it by the other party (or any subsidiaries, division, associate
      or
      affiliate of such other party) in connection with the transactions contemplated
      hereby, whether so obtained before or after the execution of this Agreement,
      and
      any copies thereof (except for copies of documents publicly available) which
      may
      have been made, 

     


    
      
         

      

      
        18

        
          

        

      

      
         

      

    


    and
      will
      use reasonable efforts to cause its representatives and any representatives
      of
      financial institutions and investors and others to whom such documents were
      furnished promptly to return such documents and any copies thereof any of them
      may have made; 

     

    (b)  solely
      with respect to any termination of this Agreement by Buyer pursuant to Section
      7.1(c)
      or
      Section 7.1(d),
      upon
      termination of this Agreement, Buyer shall be entitled to the return of its
      Deposit thereon plus, in the event the termination of this Agreement is pursuant
      to Section 7.1(c)
      and as
      liquidated damages, the cost of any reasonable expenses incurred and paid by
      Buyer to a third party in connection with this transaction (in all other
      instances of termination the Deposit shall be paid to Seller); and 

     

    (c)  the
      Confidentiality Agreement (as defined herein) shall remain in
      effect.

     

    7.3.  Remedies.
      Notwithstanding any termination right granted in Section 7.1,
      in the
      event of the non-fulfillment of any condition to a party’s closing obligations,
      in the alternative; such party may elect to do one of the
      following:

     

    (a)  proceed
      to close despite the non-fulfillment of any closing condition, it being
      understood that consummation of the Closing shall be deemed a waiver of a breach
      of any representation, warranty or covenant and of such party’s rights and
      remedies with respect thereto to the extent that such party shall have actual
      knowledge of such breach and the Closing shall nonetheless occur;

     

    (b)  decline
      to close, and terminate this Agreement as provided in Section 7.1;
      

     

    (c)  with
      respect to Seller and Licensees only, seek the remedy described in Section
      7.4;
      or

     

    (d)  with
      respect to Buyer only, seek specific performance of this Agreement.

     

    7.4.  LIQUIDATED
      DAMAGES.
      IF THE
      CLOSING DOES NOT OCCUR SOLELY DUE TO BUYER’S DEFAULT UNDER THIS AGREEMENT (ALL
      CONDITIONS TO BUYER’S OBLIGATIONS HAVING BEEN SATISFIED OR WAIVED), IT WOULD BE
      IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY
      SUFFER. THEREFORE, THE PARTIES HAVE AGREED THAT A REASONABLE ESTIMATE OF THE
      TOTAL DETRIMENT THAT SELLER WOULD SUFFER IN SUCH EVENT IS AND SHALL BE THE
      RIGHT
      TO RETAIN THE DEPOSIT TOGETHER WITH ANY AND ALL INTEREST THEREON AS
      LIQUIDATED DAMAGES, AS SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT.
      SUCH LIQUIDATED DAMAGES ARE NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN
      THE
      MEANING OF APPLICABLE LAWS. THE PARTIES EXPRESSLY ACKNOWLEDGE THAT BUYER’S
      FAILURE OR INABILITY TO OBTAIN THE NECESSARY OPERATOR LICENSES IS NOT A
      CONDITION TO BUYER’S OBLIGATION TO CLOSE FOR PURPOSES OF THIS ARTICLE
7.

     

    8.  Seller’s
      and Licensees’ Closing Deliveries.
      At
      Closing (or such other times as may be specified below), Seller and/or Licensees
      shall deliver or cause to be delivered to Buyer or its designees the following,
      in form and substance reasonably acceptable to Buyer:

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    8.1.  Deed.
      A
      limited
      warranty deed which shall be the equivalent of an Illinois special warranty
      deed, provided Buyer’s local counsel reasonably approves the form of the limited
      warranty deed and the form is consistent with the form of limited warranty
      deed
      that is customary for such jurisdiction, for each Facility’s Real Property,
      executed by Seller, in recordable form, conveying that Facility’s Real
      Property
      to Buyer
      free and clear of all liens, claims and encumbrances except for the Permitted
      Encumbrances. In this regard, and except as specifically provided herein, Seller
      and Licensees will have no obligation to cure or otherwise remove or release
      any
      of the Permitted Encumbrances. As used herein, the term “Permitted
      Encumbrances”
shall
      mean covenants, conditions, restrictions, easements, liens, encumbrances, rights
      of others and other title exceptions set forth on Schedule
      1 
      to this
      Agreement and encroachments and/or other matters disclosed on a survey of each
      Facility’s Real Property provided to Buyer that Buyer does not object to within
      ten (10) business days of receipt of such survey, however, Buyer shall have
      no
      right to object to survey matters that do not materially and adversely affect
      the use of the particular Facility but
      shall
      specifically exclude any title matters first arising or appearing of record
      after the date of this Agreement that could materially and adversely affect
      Purchaser’s use of the Facility, and all construction financing, mortgages,
      deeds of trust and monetary liens (including liens for delinquent taxes,
      mechanics’ liens and judgment liens) affecting each Facility’s Real Property and
      all indebtedness secured thereby, including the Secured Debt (collectively,
      the
“Existing
      Liens”)
      to be
      fully satisfied, released and discharged of record on or prior to the Closing
      Date so that Buyer shall take title to each Facility’s Real Property free of the
      same. The parties acknowledge that there are a number of Permitted Encumbrances
      that a title company (“Title
      Insurer”)
      will
      customarily remove or insure over with affidavits from Seller and/or Licensees,
      clarifications from the Surveyor, or otherwise. In particular, the parties
      have
      designated with an asterisk those Permitted Encumbrances listed on Schedule
      1
      that the
      parties reasonably believe the Title Insurer will remove or insure over as
      an
      exception to the title policy (“Designated
      Permitted Exceptions”).
      Seller and Licensees agree to use commercially reasonable efforts to work with
      the Title Insurer to exclude or insure over the Designated Permitted Exceptions
      from the title policy to be issued to Buyer, including executing affidavits
      that
      are customary in such transactions, pursuing estoppel certificates and other
      matters that Seller and Licensee customarily perform to remove as exceptions
      to
      a title policy. However, Buyer hereby expressly acknowledges that the removal
      of
      any such Designated Permitted Exceptions is not a condition to
      Closing.

     

    8.2.  Assignment
      and Assumption Agreement.
      The
      Assignment and Assumption Agreement, executed by Seller and Licensees,
      assigning, conveying and warranting to Buyer, or Buyer’s assignee, title to the
      Personal Sale Assets and Inventory, free and clear of all liens, claims and
      encumbrances except Permitted Encumbrances and the Assumed
      Obligations.

     

    8.3.  Transfer
      Agreement(s).
      The
      Transfer Agreement(s), executed by Licensee and Manager. 

     

    8.4.  Business
      Records.
      Copies,
      or to the extent available, originals, of all of the Business Records in
      Seller’s and Licensees’ possession or reasonable control, to the extent not
      already delivered to Buyer.

     

    8.5.  Keys.
      Keys to
      all locks located in the Improvements, to the extent in Seller’s and Licensees’
possession or reasonable control.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    8.6.  ALTA
      Statement.
      If
      required by the Escrow Agent in order to issue the title policies, an affidavit
      of title, ALTA (or comparable) statements, executed by Seller and Licensees
      and
      in form and substance acceptable to the Escrow Agent.

     

    8.7.  Closing
      Statement.
      A
      closing statement conforming to the proration and other relevant provisions
      of
      this Agreement (the “Closing
      Statement”).

     

    8.8.  Entity
      Transfer Certificate.
      Entity
      Transfer Certification confirming that Seller and Licensees are a “United States
      Person” within the meaning of Section 1445 of the Internal Revenue Code of
      1986, as amended.

     

    8.9.  Certified
      Resolutions.
      Certified resolutions of Seller and Licensees authorizing the transaction and
      incumbency certificate.

     

    8.10.  Discharges
      of Liens and Security Interests.
      Such
      discharges, releases and termination statements or agreements necessary to
      discharge, release and terminate all leases, liens and security interests
      attached to the Sale Assets, including the Master Lease and the Regulatory
      Subleases, other than the Assumed Obligations and Permitted
      Encumbrances.

     

    8.11.  Possession
      of the Facilities.
      Seller
      and Licensees will deliver possession of the Sale Assets to Buyer.

     

    8.12.  Other.
      Such
      other documents and instruments as may reasonably be required by Buyer, Tenant
      or the Title Insurer and that may reasonably be necessary or appropriate to
      consummate this transaction and to otherwise effect the agreements of the
      parties pursuant to this Agreement. For a period of six (6) months after
      Closing, Seller and Licensees shall execute and deliver to Buyer and/or the
      Title Insurer such further documents and instruments as shall be reasonably
      requested to effect this transaction and otherwise effect the agreements of
      the
      parties hereto including, but not limited to, customary title affidavits and
      estoppel certificates necessary to have the Designated Permitted Exceptions
      excluded from the title policy. Seller will reimburse Buyer for any reasonable
      costs and expenses incurred and paid by Buyer to a third party within 180 days
      after the Closing Date, in an amount not to exceed Fifteen Thousand Dollars
      ($15,000), for work associated with causing the Title Insurer to exclude or
      insure over any Designated Permitted Exceptions from the title
      policy.

     

    8.13.  Guaranty.
      The
      Guaranty executed in accordance with Section 4.21.

     

    8.14.  Sale
      and Leaseback Agreements; Transition Services
      Agreements.
      Any
      Sale and Lease Back Agreement or Transition Services Agreements executed in
      accordance with Section 3.3.

     

    9.  Buyer’s
      Closing Deliveries.
      At
      Closing Buyer shall cause the following to be delivered to Seller and Licensees
      in form reasonably acceptable to Seller and Licensees with respect to those
      Sale
      Assets and Assumed Obligations subject to the Closing:

     

    9.1.  Purchase
      Price.
      The
      balance of the Purchase Price shall be paid in accordance with Article
2
      hereof.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    9.2.  Assignment
      and Assumption Agreement.
      The
      Assignment and Assumption Agreement executed by Buyer assuming the Assumed
      Obligations.

     

    9.3.  Closing
      Statement.
      A
      closing statement conforming to the proration and other relevant provisions
      of
      this Agreement.

     

    9.4.  Certified
      Resolutions.
      Certified resolutions of Buyer authorizing the transaction and an incumbency
      certificate.

     

    9.5.  Other.
      Such
      other documents and instruments as may reasonably be required by Seller and
      Licensees or the Title Insurer and that may reasonably be necessary or
      appropriate to consummate this transaction and to otherwise effect the
      agreements of the parties pursuant to this Agreement. Buyer shall not withhold
      any funds from Closing whatsoever. For a period of six (6) months after Closing,
      Buyer shall execute and deliver to Seller and Licensees and/or the Title Insurer
      such further documents and instruments as shall be reasonably requested to
      effect this transaction and otherwise effect the agreements of the parties
      hereto.

     

    9.6.  Transfer
      Agreement(s). The
      Transfer Agreement(s), executed by Tenant and Manager, and Buyer.

     

    10.  Prorations
      And Adjustments. 

     

    10.1.  Real
      Estate Taxes.
      All
      real estate taxes and assessments accruing on the Facilities in respect to
      the
      current fiscal year of the applicable taxing authority in which the Closing
      Date
      occurs (the “Current
      Tax Year”)
      shall
      be prorated between Seller and Buyer as of the Closing Date. Such real estate
      taxes and assessments shall be prorated on a per diem basis based upon the
      number of days in the Current Tax Year prior to the Closing Date (which shall
      be
      allocated to Seller) and the number of days in the Current Tax Year on and
      after
      the Closing Date (which shall be allocated to Buyer). In addition to its
      pro-rata portion for the Current Tax Year, Seller shall be responsible for
      real
      estate taxes, assessments, and special assessments on the Facilities payable
      in
      respect to periods prior to the Current Tax Year, provided, however, if the
      tax
      bill from any prior year is not yet due and payable, Seller shall give Buyer
      a
      proration credit therefor. Upon the Closing Date and subject to the adjustment
      provided for above, Buyer shall be responsible for real estate taxes and
      assessments on the Facilities payable in respect to the Current Tax Year, all
      periods after the Current Tax Year, and all periods prior to the Current Tax
      Year, to the extent Seller gave Buyer a credit therefor.

     

    10.2.  Rents.
      All
      rentals and other resident charges, including any community fees and
      reimbursements including reimbursements received from private, governmental
      or
      otherwise, received in respect to the month in which the Closing Date occurs
      (the “Current
      Month”),
      shall
      be prorated on a per diem basis based upon the number of days in the Current
      Month, including the Closing Date and Buyer shall be entitled to pro-rated
      portions for the remaining days in the Current Month. All rentals and other
      resident charges received by Buyer from a resident after the Closing Date shall
      be applied: first, to any rent due for a resident for the Current Month; second,
      to any accrued and unpaid rent of such resident for the month immediately
      preceding the Current Month; third, to any rent of the resident that has accrued
      after the Current Month; and fourth, to the balance of any accrued and unpaid
      rent of such resident. Consistent with Section 10.3,
      Buyer


     


    
      
         

      

      
        22

        
          

        

      

      
         

      

    


    shall
      promptly remit to Seller its share of any rentals and other resident charges
      received after the Closing Date in accordance with the proration set forth
      above. Buyer shall use commercially reasonable efforts to collect such amounts
      for the benefit of Seller. No person or entity (other than Buyer) shall
      institute an action against any resident for delinquent rentals and other
      resident charges attributable to periods prior to the Current Month prior to
      90
      days after the Closing Date (“Restricted
      Collection Period”).
      After
      the expiration of the Restricted Collection Period, Seller and/or Licensees
      may
      undertake efforts to collect any remaining uncollected Retained Receivables.
      In
      no event shall Seller and Licensees be entitled to take any action against
      a
      resident which would result in a termination of any Admission Agreement or
      the
      resident’s right of occupancy thereunder.

     

    10.3.  Accounts
      Receivable.
      To the
      extent permitted by law, Buyer shall use commercially reasonable efforts to
      collect on Seller’s and Licensees’ behalf, all Retained Receivables relating to
      outstanding invoices that remain unpaid as of the Closing Date in accordance
      with Seller’s and Licensees’ customary practices for the collection of such
      amounts and shall remit any amounts received therefor to an account designated
      by Seller and Licensees on a weekly basis. Notwithstanding the
      foregoing: 

     

    (a)  Third
      Party Payments.
      Prior
      to the Closing Date, Licensees will contact the applicable Medicaid agent for
      all applicable Facilities and request that the agent mail or wire transfer
      such
      Medicaid payments directly to Licensees for all periods up to and including
      the
      Closing Date, it being understood that the applicable Medicaid agent will pay
      Buyer for services rendered after it receives its Operator Licenses and any
      applicable approvals required by Medicaid. Additionally, Licensees will contact
      the applicable regional offices for the Centers for Medicaid & Medicaid
      Services regarding Licensees’ electronic fund transfer of Medicare payments and
      request that all amounts due Licensees for services provided on or before the
      Closing Date be paid directly to Licensees, it being understood that the
      applicable Medicare intermediary will pay Buyer for services rendered after
      it
      receives any applicable approvals required by Medicare. Following Closing,
      Buyer
      shall promptly notify Licensees of receipt of any Medicaid or Medicare vendor
      payments that relate to the Facilities and that include any dates of service
      up
      to and including the Closing Date and Buyer shall promptly remit such funds
      to
      Licensees and Licensees shall promptly notify Buyer of receipt of any Medicaid
      or Medicare vendor payments that relate to the Facilities and that include
      any
      dates of service after the Closing Date and Seller and Licensees shall promptly
      remit such funds to Buyer, it being understood that Licensees’ obligation to
      remit Medicaid or Medicare vendor payments is not triggered until Buyer has
      obtained all applicable Medicare and Medicaid approvals necessary to receive
      such funds.

     

    (b)  Private
      Pay Payments.
      Prior
      to the Closing Date, Seller and Licensees shall prepare and send to the private
      pay residents, patients or consumers their private pay invoices and any payments
      from a third party for all periods through and including the Closing Date,
      with
      instructions notifying the private pay residents or responsible party to make
      any such payment payable to Seller or such other party as Seller directs.


     

    10.4.  Operating
      Expenses.
      All
      operating expenses (including all charges under Facility Agreements assumed
      by
      Buyer hereunder) payable or paid to each such service provider 

     


    
      
         

      

      
        23

        
          

        

      

      
         

      

    


    in
      respect to the billing period of such service provider in which the Closing
      Date
      occurs (the “Current
      Billing Period”),
      shall
      be prorated on a per diem basis based upon the number of days in the Current
      Billing Period prior to the Closing Date (which shall be allocated to Seller
      and
      Licensees) and the number of days in the Current Billing Period on and after
      the
      Closing Date (which shall be allocated to Buyer), and assuming that all charges
      are incurred uniformly during the Current Billing Period. Any amounts which
      have
      been prepaid by Seller and Licensees to a service provider or other contract
      party shall be prorated between Buyer and Seller and Licensees. At Closing,
      Buyer shall provide Seller and Licensees with a credit for the amount of such
      prepayment which is attributable to the term of such Service Contract which
      has
      not expired. If actual bills for the Current Billing Period are unavailable
      as
      of the Closing Date, then such proration shall be made on an estimated basis
      based upon the most recently issued bills, subject to readjustment upon receipt
      of actual bills.

     

    10.5.  Security
      Deposits; Prepaid Rents; Resident Inducements.
      Buyer
      shall receive a credit against the Purchase Price for (a) prepaid rentals and
      other resident charges, including any community fees for periods after the
      Current Month, and (b) any security deposits (including any portion thereof
      which may be designated as prepaid rent) made under Admission Agreements (and
      if
      applicable laws or any agreements require a landlord to be accountable for
      interest on such security deposits, any accrued interest owed thereon at the
      applicable legal rate). 

     

    10.6.  Calculation.
      The
      prorations and credits shall be made on the basis of a written statement
      approved by Buyer and Seller and Licensees. In the event any prorations or
      credits made under this Article 10
      shall
      prove to be incorrect for any reason, then any party shall be entitled to an
      adjustment to correct the same. Any item which cannot be finally prorated
      because of the unavailability of information shall be tentatively prorated
      on
      the basis of the best data then available and re-prorated when the information
      is available. Notwithstanding the foregoing, any re-proration shall be made,
      if
      at all, within ninety (90) days after the Closing Date (except with respect
      to
      taxes and assessments, in which case such re-proration shall be made within
      thirty (30) days after the information necessary to perform such re-proration
      is
      available).

     

    10.7.  Items
      Not Prorated.
      Seller
      and Licensees and Buyer agree that (a) none of the insurance policies relating
      to the Facilities will be assigned to Buyer (and Seller and Licensees shall
      pay
      any cancellation fees or minimum earned premiums resulting from the termination
      of such policies) and Buyer shall be responsible for arranging for its own
      insurance as of the Closing Date; (b) utilities, including telephone,
      electricity, water and gas, shall be read on the Closing Date to the extent
      reasonably feasible; and (c) the Facilities will not be subject to any existing
      liens, other than those items listed as Permitted Encumbrances. Accordingly,
      there will be no prorations for insurance or utilities. Notwithstanding the
      foregoing, in the event a meter reading is unavailable for any particular
      utility, such utility shall be prorated in the manner provided in Section
10.4
      above.

     

    11.  Casualty
      and Condemnation. 

     

    11.1.  Casualty.
      If
      prior
      to the Closing one or more of the Facilities shall be damaged by fire or other
      casualty, then Buyer shall take the Sale Assets as is and Seller and Licensees
      hereby assign all insurance proceeds (including casualty and business
      interruption insurance), or the right to receive the same, and the rights to
      any
      other claims arising as a result of the damage, 

     


    
      
         

      

      
        24

        
          

        

      

      
         

      

    


    and
      Buyer
      shall receive a credit at Closing equal to any deductible or uninsured amount
      related to such casualty. Notwithstanding the foregoing, if such casualty is
      a
      Material Event (as defined below), then Buyer, at its option, may terminate
      this
      Agreement by written notice to Seller and Licensees given on or before the
      Closing Date, and upon such termination, the Deposit shall be returned to Buyer
      and the parties shall have no further liability or obligation hereunder. As
      used
      in this Article 11,
      a
“Material
      Event”
means
      either of the following: (a) a casualty resulting in damage or destruction
      to
      one or more of the Facilities, if the cost to restore the Facilities to the
      condition immediately prior to such casualty is reasonably estimated to exceed
      Twenty Million Dollars ($20,000,000); or (b) a taking or condemnation which
      would impede access to one or more Facilities, reduce available parking below
      that required by, or in general cause a violation of, any applicable law,
      Admission Agreement or Facility Agreement, or result in a condemnation award
      (“Condemnation
      Award”)
      reasonably estimated to exceed Twenty Million Dollars ($20,000,000). Further,
      in
      the event of (i) a casualty resulting in damage or destruction to a Facility
      and
      the cost to restore the Facility to the condition immediately prior to such
      casualty is reasonably estimated to be in excess of Seven Hundred Fifty Thousand
      Dollars ($750,000) or (ii) there is a condemnation with respect to a Facility
      that a reasonable result would be a Condemnation Award in excess of Seven
      Hundred Fifty Thousand Dollars ($750,000), then Buyer, at its option, may elect
      not to purchase the Facility subject to the casualty or condemnation and the
      Purchase Price of the Sale Assets will be reduced by the amount of the Purchase
      Price allocated to such Facility as determined in accordance with Section
2.2.

     

    11.2.  Condemnation.
      If prior
      to the Closing (a) less than substantially all of a Facility shall be taken
      by
      condemnation or eminent domain, (b) there is any material taking of land lying
      in the bed of any street or highway, open or proposed, in front of or adjoining
      all or any part of the Land, or (c) there is any change of grade or closing
      of
      any such street or highway abutting or adjacent to the Land, that in any such
      case would materially impair access to and from the Land or otherwise materially
      interfere with its occupancy and use as an assisted living or skilled nursing
      facility, then Buyer shall
      be
      entitled to no abatement of the Purchase Price by reason of such taking, change
      of grade, or closing, and the proceeds of, or right to any proceeds of, any
      award or payment in respect of such taking, change of grade, or closing are
      hereby assigned to Buyer at the Closing. Notwithstanding the foregoing, if
      such
      taking is a Material Event, then Buyer, at its option, may terminate this
      Agreement by written notice to Seller and Licensees given on or before the
      Closing Date, and upon such termination, the Deposit shall be returned to Buyer
      and the parties shall have no further liability or obligation
      hereunder.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    12.  Employees.

     

    12.1.  WARN
      Act.
      In the
      event any notice or payments to any employee employed at the Facilities by
      Seller or Licensees as of the day immediately preceding the Closing Date
      (“Facility
      Employee”)
      is
      required under the Worker Adjustment Retraining Notification Act (the
“WARN
      Act”)
      or
      other applicable plant closure law due either to actual or constructive
      termination of employment, such notice or payments shall be the sole
      responsibility of Seller and Licensees, at Seller’s and Licensees’ sole cost and
      expense. Seller and Licensees, subject to Section 4.21,
      agrees
      to indemnify and hold Buyer harmless from any and all liabilities, costs or
      expenses associated with or arising from any WARN Act requirements. Anything
      to
      the contrary notwithstanding, this Agreement shall not be deemed to create
      or
      grant to any Facility Employee any third party beneficiary rights or claims
      or
      any cause of action of any kind or nature.

     

    12.2.  Facility
      Employees.
      With
      respect to the Facility Employees, Seller and Licensees shall be solely
      responsible for all wages, salaries, bonuses, employment taxes, withholding
      taxes, and all accrued vacation days, sick days and personal days accruing
      prior
      to Closing. Effective upon Closing, employment of all employees working at
      the
      Facilities shall be terminated by Seller and Licensees. On or before the day
      that is ten (10) days after the date of this Agreement, Seller or Licensees
      shall provide Buyer with a list of all employees at the Facilities and other
      pertinent information including copies of employee files with respect to such
      employees and the terms of employment of such employees, as requested by Buyer,
      provided, however, Seller and Licensees shall not be required to provide Buyer
      with any information in any employment file which violates Seller’s and
      Licensees’ responsibility to such employee under any existing law and the
      disclosure of confidential information which is not available for disclosure
      without the express written consent of the employee. Buyer, or its affiliates,
      shall hire all such terminated employees (“Terminated
      Employees”).
      Notwithstanding the above, Buyer may elect not to hire up to 49 Terminated
      Employees (such employees hired by Buyer, or its affiliate, as applicable,
      being
      referred to herein as the “Retained
      Employees”).

     

    12.3.  Health
      Insurance.
      Buyer
      shall be responsible for providing all eligible Retained Employees with health
      care coverage on and after the Closing Date sufficient to extinguish any rights
      a Retained Employee may have to continuation of health care coverage under
      Seller’s and Licensees’ health care plans including, but not limited to, COBRA
      insurance coverage, if a Retained Employee so elects such coverage.

     

    12.4.  Other
      Benefits. On
      the
      Closing Date, the Parties shall agree as to the amount of accrued vacation
      pay,
      sick pay, paid leave time or other similar benefits owed to Facility Employees
      pursuant to established plans, programs, practices and arrangements accrued
      prior to the Closing Date. On and after the Closing Date, Seller and Licensees
      shall be solely responsible for the payment of any and all vacation pay, sick
      pay, paid leave time or other similar benefit owed to Facility Employees
      pursuant to established plans, programs, practices and arrangements accrued
      prior to the Closing Date.

     

    12.5.  Post
      Closing Liability.
      Neither
      Buyer, nor any affiliate of Buyer, shall have any obligation to continue the
      employment of any Facility Employee and, subject to the terms of this Article
      12,
      shall
      not be liable to any employee for any wages, salaries, bonuses, vacation days,
      sick days or personal days in which said Facility Employee may have acquired
      an
      accrued or 

     


    
      
         

      

      
        26

        
          

        

      

      
         

      

    


    vested
      right by virtue of, or in connection with, their employment by Seller and
      Licensees. Seller and Licensees shall and hereby agree to indemnify and save
      Buyer, and its affiliates, harmless from and against any liability for wages,
      salaries, bonuses, accrued vacation days, sick days and personal days to be
      paid
      to Facility Employees on account of services rendered prior to Closing.
      Notwithstanding anything to the contrary herein contained, there shall be no
      apportionment or proration of medical, pension, welfare benefits, other employee
      benefits or other fringe benefits (hereinafter collectively referred to as
      “benefits”)
      and
      Seller and Licensees shall remain liable for and hereby indemnifies and saves
      Buyer, and its affiliates, harmless from and against all benefits due to
      Facility Employees under plans in which Facility Employees participate prior
      to
      Closing, and all payments due on the plans providing such benefits. Seller
      and
      Licensees shall also remain responsible for and hereby indemnifies and saves
      Buyer, and its affiliates, harmless from any severance pay which may become
      due
      to any of the Facility Employees whose employment ends at or prior to Closing
      as
      a result of this transaction, whether due to Seller’s and Licensees’ employment
      policies or as a matter of law. Seller and Licensees agree to give all affected
      Facility Employees written notice of termination of participation of employees
      working at the Facilities in any applicable 401(K) or other pension or
      retirement plan affecting the employees.

     

    12.6.  Advertising.
      Seller
      and Licensees will renew or maintain their yellow pages, assign those to Buyer,
      work with Buyer to transition the ads in a timely manner. Nothing in this
      Section 12.6
      shall be
      construed to imply that Buyer has the right to use any of Seller’s or Licensees’
trade names or trademarks

     

    13.  Closing
      Expenses.
      Seller
      and Licensees will pay at Closing, all closing costs and expenses, pertaining
      to
      the release of the Existing Liens, including any fees or premiums of any nature,
      associated with prepayment of the Existing Liens. Each party shall pay their
      own
      attorneys’ fees and expenses. Buyer shall be responsible for its due diligence
      costs, including, without limitation, its environmental site assessments. The
      parties shall share equally any closing or escrow fee that may be charged by
      the
      Escrow Agent and the cost of any surveys. Seller and Licensees shall pay the
      cost of an
      owner’s
      extended
      coverage title insurance policy to be issued to Buyer at Closing with respect
      to
      the Sale Assets (excluding the cost of any endorsements thereto that may be
      requested by Buyer). All other costs and expenses associated with procuring
      any
      documentary, deed or transfer taxes and any fees or stamp duties imposed by
      any
      applicable state, county and municipalities in connection with the execution
      and
      delivery of the instruments of conveyance (collectively “Transfer
      Taxes”),
      shall
      be shared between the parties equally. Prior to Closing, Parties shall determine
      responsibility for Transfer Taxes in excess of $800,000.00 and Parties expressly
      acknowledge that mortgage taxes are not included in the definition of Transfer
      Taxes and are to be borne solely by Buyer.

     

    14.  Successors
      and Assigns. The
      terms, conditions and covenants of this Agreement shall be binding upon and
      shall inure to the benefit of the parties and their respective nominees,
      successors, beneficiaries and assigns. Buyer shall be entitled to assign this
      Agreement in whole or in part, to any affiliate of Buyer, or designate a
      separate affiliate to take title with respect to each of the Facilities.
      Notwithstanding the above, any such assignment shall not relieve or release
      Buyer of any of its obligations or liabilities under this
      Agreement.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    15.  Survival.
      Notwithstanding
      any provision of this Agreement to the contrary, the obligations of the parties
      under
      Articles
4,
      5,
      10,
      12,
      18,
      and
20
      and
      Section 8.12
      shall
      survive the Closing. 

     

    16.  Notices.
      Any
      notice, demand or request which may be permitted, required or desired to be
      given in connection therewith shall be given in writing and directed to Seller
      and Licensees and Buyer as follows:

     

    if
      to
      Seller or  PITA
      General Corporation and AHC Tenant, Inc.

    Licensees:  10401
      North Meridian Street, Suite 122

    Indianapolis,
      Indiana 46290

    Attention:
      Jay L. Hicks

    Facsimile:
      (317) 630-3159

    Telephone:
      (317) 630-3156

    


    with
      a
      copy to:  Bose
      McKinney & Evans LLP

    2700
      First Indiana Plaza

    135
      N.
      Pennsylvania Street

    Indianapolis,
      Indiana 46204

    Attention:
      Brantley Wright

    Facsimile:
      (317) 223-0306

    Telephone:
      (317) 684-5306

    if
      to
      Buyer: The
      Blackstone Group 

    345
      Park
      Avenue

    New
      York,
      New York 10154

    Attention:
      David A. Roth 

    Facsimile:
      (212) 583-5202

    Telephone:
      (212) 583-5885

    


    with
      a
      copy to: Pircher,
      Nichols & Meeks

    900
      North
      Michigan Avenue

    Suite
      1050

    Chicago,
      Illinois 60611  

    Attention:
      Real Estate Notices (JDL)

    Facsimile:
      (312) 915-3348

    Telephone:
      (312) 915-3111

    


    with
      a
      copy to:  Emeritus
      Corporation

    3131
      Elliott Avenue, #500

    Seattle,
      Washington 98121

    Attention:
      Eric Mendelsohn

    Facsimile:
      (206) 357-7388

    Telephone:
      (206) 301-4493

    



    
      
         

      

      
        28

        
          

        

      

      
         

      

    


    with
      a
      copy to:  Foster
      Pepper LLC

    1111
      Third Avenue, Suite 3400

    Seattle,
      Washington 98101

    Attention:
      Laura McClellan

    Facsimile:
      (206) 749-1917

    Telephone:
      (206) 447-2871

    


    or
      to
      such other address as either party may hereunder designate in
      writing.

    


    Notices
      shall be deemed properly delivered and received (i) the same day when personally
      delivered; or (ii) one day after deposit with Federal Express or other
      commercial overnight courier; or (iii) the same day when sent by confirmed
      facsimile. Any notice to be sent a party hereto may be sent by such party’s
      attorney.

     

    17.  Benefit.
      This
      Agreement is for the benefit only of the parties hereto and their nominees,
      successors, beneficiaries and assignees and no other person or entity shall
      be
      entitled to rely hereon, receive any benefit herefrom or enforce against any
      party hereto any provision hereof. There are no third party
      beneficiaries.

     

    18.  Brokerage.
      Buyer
      hereby represents, covenants, and warrants to Seller and Licensees that it
      has
      not employed any broker, agent or finder in connection with the transaction
      contemplated herein and agrees to indemnify Seller and Licensees against any
      claim for any commission made by any broker claiming to have been retained
      by
      Buyer. Sellers agree to pay the brokerage commission due to Marcus &
Millichap in connection with the transaction contemplated herein and hereby
      represent, covenant and warrant to Buyer that they have not employed any other
      broker, agent or finder in connection with the transaction contemplated herein,
      and agree to indemnify Buyer against any claim for any commission made by any
      broker, including Marcus & Millichap, claiming to have been retained by
      Sellers. The foregoing indemnities shall survive the Closing.

     

    19.  Reasonable
      Efforts.
      Seller
      and Licensees and Buyer shall use their reasonable, diligent and good faith
      efforts, and shall cooperate with and assist each other in their efforts, to
      obtain such consents and approvals of third parties (including, but not limited
      to, governmental authorities and the Licenses), to the transaction contemplated
      hereby, and to otherwise perform as may be necessary to effectuate transfer
      the
      Sale Assets to Buyer in accordance with this Agreement.

     

    20.  Miscellaneous.

     

    20.1.  Entire
      Agreement.
      This
      Agreement and the Confidentiality Agreement constitute the entire understanding
      between the parties with respect to the transaction contemplated herein, and
      all
      prior or contemporaneous oral agreements, understandings, representations and
      statements, and all prior written agreements, understandings, letters of intent
      and proposals, in each case with respect to the transaction contemplated herein,
      are hereby superseded and rendered null and void and of no further force and
      effect and are merged into this Agreement. Neither this Agreement, the
      Confidentiality Agreement nor any provisions hereof or thereof may be waived,
      modified, amended, discharged or terminated except by an instrument in


     


    
      
         

      

      
        29

        
          

        

      

      
         

      

    


    writing
      signed by the party against which the enforcement of such waiver, modification,
      amendment, discharge or termination is sought, and then only to the extent
      set
      forth in such instrument. Except as expressly set forth in this Agreement,
      Buyer
      shall have no obligation to make any payments to or on behalf of Seller and
      Licensees in connection with the transaction contemplated by this
      Agreement.

     

    20.2.  Construction.
      This
      Agreement shall not be construed more strictly against one party than against
      the other merely by virtue of the fact that it may have been prepared by counsel
      for one of the parties, it being recognized that each of Seller, Licensees
      and
      Buyer have contributed substantially and materially to the preparation of this
      Agreement. The headings of various sections in this Agreement are for
      convenience only, and are not to be utilized in construing the content or
      meaning of the substantive provisions hereof.

     

    20.3.  Knowledge.
      The
      parties acknowledge that the day to day operations of the Facilities have not
      been managed by Seller and Licensees but by a management company under contract
      with a Licensee. Whenever any statement herein is made “to Seller’s and
      Licensees’ knowledge” or words of similar intent or effect of any party or
      representative, such person shall make such statement only if such facts and
      other information which, as of the date the representation is given, are
      actually known to the party making such statement, which with respect to Seller
      and Licensees means the knowledge of the President, Jay Hicks, and Treasurer,
      Robert N. Davies, without any independent investigation, other than consultation
      with the executive directors of each of the Facilities who are identified on
      Exhibit
      T.

     

    20.4.  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Illinois.

     

    20.5.  Partial
      Invalidity.
      The
      provisions hereof shall be deemed independent and severable, and the invalidity
      or partial invalidity or enforceability of any one provision shall not affect
      the validity of enforceability of any other provision hereof, provided that
      the
      intent and content of this Agreement are not substantially altered.

     

    20.6.  Conflict.
      Notwithstanding there may have been a letter of interest executed by the
      parties, Buyer and Seller and Licensees agree that the letter of interest and
      anything contained therein shall have absolutely no effect upon or in any
      fashion have any influence on this Agreement. 

     

    20.7.  Confidential
      Information; Publicity.
      The
      parties agree to continue to be bound by the terms and provisions of that
      certain Confidentiality and Non-Disclosure Agreement dated as of July 27, 2006
      (the “Confidentiality
      Agreement”). The
      Confidentiality Agreement is hereby incorporated into this Agreement by
      reference and made a part of this Agreement and shall survive the execution
      of
      this Agreement notwithstanding the terms thereof. If a conflict arises between
      the provisions of this Agreement and the provisions of the Confidentiality
      Agreement, the provisions of the Confidentiality Agreement shall control.
Except
      as
      otherwise required by law or applicable stock exchange rules, press releases
      and
      other publicity concerning this transaction shall be made only with the prior
      agreement of Seller and Licensees and Buyer (and in any event, the parties
      shall
      use all reasonable efforts to consult and agree with each other with respect
      to
      the content of any such required press release or other publicity). Except
      as
      otherwise 

     


    
      
         

      

      
        30

        
          

        

      

      
         

      

    


    required
      by law or applicable stock exchange rules, no such press releases or other
      publicity shall state the amount of the Purchase Price.

     

    20.8.  Consent
      to Jurisdiction.
      The
      parties hereto irrevocably agree that all actions or proceedings in any way,
      manner or respect arising out of or from or related to this Agreement shall
      be
      litigated in Courts having situs within the State of Illinois. The parties
      hereby consent and submit to the jurisdiction of any local, state or federal
      courts located within Ohio and consent that all such service of process be
      made
      by certified mail directed to the party at the address stated herein and service
      so made shall be deemed to be completed upon actual receipt thereof. The parties
      hereby waive any right they may have to transfer or change the venue of any
      litigation brought in accordance herewith.

     

    20.9.  Waiver
      of Trial by Jury.
      The
      parties hereto knowingly, voluntarily and intentionally waive (to the fullest
      extent permitted by applicable law) any right they may have to a trial by jury
      of any dispute arising under or relating to this Agreement and agree that any
      such dispute shall be tried before a judge sitting without a jury.

     

    20.10.  Time
      of Essence.
      Time is
      of the essence of this Agreement and each and all of its
      provisions.

     

    


    


    


    [remainder
      of page intentionally left blank]

    


    


    
      
         

      

      
        31

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Purchase and Sale Agreement on the date first
      above written.

     

    


    


    


    PITA
      GENERAL CORPORATION,
      an
      Illinois corporation

    


    By:__
      /s/
      Jay L. Hicks_________

    Name:
      Jay
      L. Hicks

    Title:
      President

    


    


    


    


    


    AHC
      TENANT, INC.,
      a
      Delaware corporation

    


    


    By:_
      /s/
      Jay L. Hicks ____________

    Name:
      Jay
      L. Hicks

    Title:
      President

    


    


    


    


    


    BREA
      EMERITUS LLC,
      a
      Delaware limited liability company

    


    


    By:_/s/
      Raymond R. Brandstrom_______

    Name:
      Raymond R. Brandstrom

    Title:
      Authorized Signatory


    
      
         

      

      
         

        
          

        

      

      
         

        
          


        

      

    



    
      	
               

              LICENSEES

               

              Boynton
                Village SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ____________

              Jay
                Hicks, President

            
	
               

              Brea
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks __________

              Jay
                Hicks, President

            
	
               

              Charlotte
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            
	
               

              Citrus
                Heights SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            
	
               

              Cobb
                County SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks __________

              Jay
                Hicks, President

            
	
               

              Colorado
                Springs SeniorCare, LLC 

               

              By:
                ____________________________

              Jay
                Hicks, President

            
	
               

              Decatur
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Denver
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks ______________

              Jay
                Hicks, President

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    
      	
               

               

               

               

              Dunedin
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Emerson
                SeniorCare, LLC 

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Fulton
                County SeniorCare, One, LLC 

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Fulton
                County SeniorCare, Two, LLC

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            
	
               

              Mesa
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ______________

              Jay
                Hicks, President

            
	
               

              Overland
                Park SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Palmer
                Ranch SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Peoria
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _______________

              Jay
                Hicks, President

            
	
               

              Reno
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    
      	
               

               

              Roanoke
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ____________

              Jay
                Hicks, President

            
	
               

              Sarasota
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ___________

              Jay
                Hicks, President

            
	
               

              Sun
                City West SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ______________

              Jay
                Hicks, President

            
	
               

              Tucson
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            
	
               

              Wayne
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks _____________

              Jay
                Hicks, President

            
	
               

              West
                Orange SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ______________

              Jay
                Hicks, President

            
	
               

              Westlake
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ______________

              Jay
                Hicks, President

            
	
               

              Whittier
                SeniorCare, LLC

               

              By:
                /s/ Jay L. Hicks ____________

              Jay
                Hicks, President

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    List
      of Schedules and Exhibits

    


    Schedule
      1 Permitted
      Encumbrances

    Schedule
      2 Allocation
      of the Purchase Price

    


    Exhibit
      A Licensees

    Exhibit
      B Facilities

    Exhibit
      C Regulatory
      Subleases

    Exhibit
      D Management
      Companies

    Exhibit
      E Transfer
      Agreement

    Exhibit
      F Assignment
      and Assumption Agreement

    Exhibit
      G Legal
      Descriptions

    Exhibit
      H Facility
      Violations

    Exhibit
      I Litigation

    Exhibit
      J Audits/Appeals

    Exhibit
      K Cost
      Reports

    Exhibit
      L Compliance
      Program

    Exhibit
      M Personal
      Property

    Exhibit
      N Personal
      Property Encumbrances

    Exhibit
      O Operating
      Statements

    Exhibit
      P Rent
      Roll

    Exhibit
      Q Leasing
      Incentive Programs

    Exhibit
      R Facility
      Agreements

    Exhibit
      S Environmental
      Reports

    Exhibit
      T Facilities’
      Directors

    Exhibit
      U Transition
      Services Agreement

    Exhibit
      V Sale
      and
      Leaseback Agreement