Exhibit
10.22

    


    PURCHASE
AND SALE AGREEMENT

     

    By
And Among

     

    HILLIARD
ALF, LLC,

    a
Delaware limited liability company

    as
“Buyer”

     

    and

     

    CARRIAGE
COURT HILLIARD, LLC,

    a
Delaware limited liability company

    


    and

     

    CARRIAGE
COURT HILLIARD LESSEE, LLC,

    a
Delaware limited liability company

    together
as “Seller”

     

    And

    


    LAWYERS
TITLE INSURANCE CORPORATION,

    a
Nebraska corporation

    as
“Escrow Agent”

    


    Dated
as of

     

    June
18, 2010

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      Execution
Copy

    

     

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	 	
                              Page

                            	 
	 	 	 	 	 
	
                              ARTICLE
      I TERMINOLOGY

                            	 	 	1	 
	
                              1.1

                            	
                              Defined
      Terms

                            	 	 	1	 
	
                              1.2

                            	
                              Additional
      Defined Terms

                            	 	 	4	 
	 	 	 	 	 
	
                              ARTICLE
      II PURCHASE AND SALE

                            	 	 	5	 
	
                              2.1

                            	
                              Property

                            	 	 	5	 
	
                              2.2

                            	
                              Assumption
      of Liabilities.

                            	 	 	6	 
	
                              2.3

                            	
                              Purchase
      Price

                            	 	 	7	 
	
                              2.4

                            	
                              Earnest
      Money Deposit

                            	 	 	7	 
	
                              2.5

                            	
                              Adjustment
      of Purchase Price.

                            	 	 	7	 
	
                              2.6

                            	
                              Escrow
      Agent.

                            	 	 	9	 
	 	 	 	 	 
	
                              ARTICLE
      III DUE DILIGENCE PERIOD

                            	 	 	9	 
	
                              3.1

                            	
                              Due
      Diligence Period

                            	 	 	9	 
	
                              3.2

                            	
                              Buyer’s
      Responsibilities

                            	 	 	10	 
	
                              3.3

                            	
                              Continuing
      Diligence and Inspection Rights

                            	 	 	10	 
	 	 	 	 	 
	
                              ARTICLE
      IV REPRESENTATIONS AND WARRANTIES OF SELLER

                            	 	 	10	 
	
                              4.1

                            	
                              Organization;
      Good Standing of Seller

                            	 	 	10	 
	
                              4.2

                            	
                              Consent
      of Third Parties

                            	 	 	10	 
	
                              4.3

                            	
                              Authority;
      Enforceability

                            	 	 	11	 
	
                              4.4

                            	
                              Absence
      of Conflicts

                            	 	 	11	 
	
                              4.5

                            	
                              No
      Judgments

                            	 	 	11	 
	
                              4.6

                            	
                              No
      Governmental Approvals

                            	 	 	11	 
	
                              4.7

                            	
                              Insurance

                            	 	 	11	 
	
                              4.8

                            	
                              Litigation

                            	 	 	11	 
	
                              4.9

                            	
                              Compliance
      with Laws

                            	 	 	12	 
	
                              4.10

                            	
                              Environmental
      Matters

                            	 	 	12	 
	
                              4.11

                            	
                              Assessments

                            	 	 	12	 
	
                              4.12

                            	
                              Property
      Agreements

                            	 	 	12	 
	
                              4.13

                            	
                              Licenses

                            	 	 	12	 
	
                              4.14

                            	
                              Resident
      Agreements

                            	 	 	13	 
	
                              4.15

                            	
                              Medicare;
      Medicaid.

                            	 	 	13	 
	
                              4.16

                            	
                              Condemnation

                            	 	 	14	 
	
                              4.17

                            	
                              Condition
      of Property

                            	 	 	14	 
	
                              4.18

                            	
                              Independent
      Property

                            	 	 	15	 
	
                              4.19

                            	
                              Utilities
      Access

                            	 	 	15	 
	
                              4.20

                            	
                              Zoning

                            	 	 	15	 
	
                              4.21

                            	
                              FIRPTA

                            	 	 	15	 
	
                              4.22

                            	
                              Interests;
      Title

                            	 	 	15	 
	
                              4.23

                            	
                              Title
      Encumbrances

                            	 	 	16	 
	
                              4.24

                            	
                              Affordable
      Housing Units

                            	 	 	16	 
	
                              4.25

                            	
                              No
      New Survey Matters

                            	 	 	16	 


                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
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    TABLE OF CONTENTS
(cont’d)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	 	 	 	
                                      Page

                                    	 
	 	 	 	 	 	 
	
                                      4.26

                                    	
                                      Loans

                                    	 	 	16	 
	
                                      4.27

                                    	
                                      Patriot
      Act Compliance

                                    	 	 	16	 
	
                                      4.28

                                    	
                                      Broker’s
      or Finder’s Fees

                                    	 	 	16	 
	
                                      4.29

                                    	
                                      Insolvency

                                    	 	 	17	 
	
                                      4.30

                                    	
                                      Due
      Diligence

                                    	 	 	17	 
	 	 	 	 	 
	
                                      ARTICLE
      V REPRESENTATIONS AND WARRANTIES OF BUYER

                                    	 	 	17	 
	
                                      5.1

                                    	
                                      Organization
      and Good Standing

                                    	 	 	17	 
	
                                      5.2

                                    	
                                      Authorization
      and Binding Effect of Documents

                                    	 	 	17	 
	
                                      5.3

                                    	
                                      Absence
      of Conflicts

                                    	 	 	17	 
	
                                      5.4

                                    	
                                      Consents

                                    	 	 	18	 
	
                                      5.5

                                    	
                                      Patriot
      Act Compliance

                                    	 	 	18	 
	
                                      5.6

                                    	
                                      Broker’s
      or Finder’s Fees

                                    	 	 	18	 
	 	 	 	 	 
	
                                      ARTICLE
      VI OTHER COVENANTS

                                    	 	 	18	 
	
                                      6.1

                                    	
                                      Conduct
      of Business Prior to the Closing

                                    	 	 	18	 
	
                                      6.2

                                    	
                                      Notification
      of Certain Matters

                                    	 	 	19	 
	
                                      6.3

                                    	
                                      Title;
      Additional Documents

                                    	 	 	19	 
	
                                      6.4

                                    	
                                      Other
      Consents

                                    	 	 	19	 
	
                                      6.5

                                    	
                                      Inspection
      and Access

                                    	 	 	20	 
	
                                      6.6

                                    	
                                      Confidentiality.

                                    	 	 	20	 
	
                                      6.7

                                    	
                                      Publicity

                                    	 	 	21	 
	
                                      6.8

                                    	
                                      Commercially
      Reasonable Efforts

                                    	 	 	21	 
	
                                      6.9

                                    	
                                      Reports

                                    	 	 	21	 
	
                                      6.10

                                    	
                                      Post-Closing
      Obligations of Seller

                                    	 	 	21	 
	
                                      6.11

                                    	
                                      No
      Other Representations or Warranties.

                                    	 	 	21	 
	
                                      6.12

                                    	
                                      Noncompetition

                                    	 	 	22	 
	
                                      6.13

                                    	
                                      Exclusivity

                                    	 	 	22	 
	
                                      6.14

                                    	
                                      Pre-Approved
      Capital Improvements

                                    	 	 	22	 
	 	 	 	 	 
	
                                      ARTICLE
      VII CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO
    CLOSE

                                    	 	 	22	 
	
                                      7.1

                                    	
                                      Accuracy
      of Representations and Warranties; Closing Certificate.

                                    	 	 	22	 
	
                                      7.2

                                    	
                                      Performance
      of Agreement

                                    	 	 	23	 
	
                                      7.3

                                    	
                                      No
      Adverse Change

                                    	 	 	23	 
	
                                      7.4

                                    	
                                      Conveyance
      of Property

                                    	 	 	23	 
	
                                      7.5

                                    	
                                      Title
      Insurance and Survey.

                                    	 	 	23	 
	
                                      7.6

                                    	
                                      Other
      Inspections

                                    	 	 	25	 
	
                                      7.7

                                    	
                                      Delivery
      of Closing Documents

                                    	 	 	25	 
	
                                      7.8

                                    	
                                      Licenses.

                                    	 	 	25	 
	
                                      7.9

                                    	
                                      Termination
      of Existing Management Agreement.

                                    	 	 	26	 
	
                                      7.10

                                    	
                                      Management
      Agreement

                                    	 	 	26	 
	
                                      7.11

                                    	
                                      Governmental
      Approvals.

                                    	 	 	26	 
	
                                      7.12

                                    	
                                      Third-Party
      Consents

                                    	 	 	26	 


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
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    TABLE OF CONTENTS
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                                        Page

                                      	 
	 	 	 	 	 	 
	
                                        7.13

                                      	
                                        Guaranty

                                      	 	 	26	 
	
                                        7.14

                                      	
                                        Financing
      Contingency

                                      	 	 	26	 
	
                                        7.15

                                      	
                                        Simultaneous
      Closing

                                      	 	 	26	 
	 	 	 	 	 
	
                                        ARTICLE
      VIII CONDITIONS PRECEDENT TO THE  OBLIGATION OF SELLER TO
      CLOSE

                                      	 	 	27	 
	
                                        8.1

                                      	
                                        Accuracy
      of Representations and Warranties

                                      	 	 	27	 
	
                                        8.2

                                      	
                                        Performance
      of Agreements

                                      	 	 	27	 
	
                                        8.3

                                      	
                                        Delivery
      of Closing Documents

                                      	 	 	27	 
	 	 	 	 	 
	
                                        ARTICLE
      IX CLOSING

                                      	 	 	27	 
	
                                        9.1

                                      	
                                        Closing
      Date and Place.

                                      	 	 	27	 
	
                                        9.2

                                      	
                                        Deliveries
      of Seller

                                      	 	 	27	 
	
                                        9.3

                                      	
                                        Deliveries
      of Buyer

                                      	 	 	29	 
	
                                        9.4

                                      	
                                        Closing
      Costs

                                      	 	 	29	 
	 	 	 	 	 
	
                                        ARTICLE
      X INDEMNIFICATION

                                      	 	 	30	 
	
                                        10.1

                                      	
                                        General

                                      	 	 	30	 
	
                                        10.2

                                      	
                                        Indemnification
      by Seller

                                      	 	 	30	 
	
                                        10.3

                                      	
                                        Indemnification
      by Buyer

                                      	 	 	30	 
	
                                        10.4

                                      	
                                        Administration
      of Indemnification

                                      	 	 	30	 
	 	 	 	 	 
	
                                        ARTICLE
      XI DEFAULT AND TERMINATION

                                      	 	 	32	 
	
                                        11.1

                                      	
                                        Right
      of Termination

                                      	 	 	32	 
	
                                        11.2

                                      	
                                        Remedies
      upon Default.

                                      	 	 	32	 
	
                                        11.3

                                      	
                                        Specific
      Performance

                                      	 	 	33	 
	
                                        11.4

                                      	
                                        Obligations
      Upon Termination

                                      	 	 	33	 
	
                                        11.5

                                      	
                                        Termination
      Notice

                                      	 	 	33	 
	
                                        11.6

                                      	
                                        Sole
      and Exclusive Remedy

                                      	 	 	33	 
	 	 	 	 	 
	
                                        ARTICLE
      XII MISCELLANEOUS

                                      	 	 	34	 
	
                                        12.1

                                      	
                                        Further
      Actions

                                      	 	 	34	 
	
                                        12.2

                                      	
                                        Notices

                                      	 	 	34	 
	
                                        12.3

                                      	
                                        Entire
      Agreement

                                      	 	 	35	 
	
                                        12.4

                                      	
                                        Binding
      Effect; Benefits

                                      	 	 	35	 
	
                                        12.5

                                      	
                                        Assignment

                                      	 	 	35	 
	
                                        12.6

                                      	
                                        Governing
      Law

                                      	 	 	36	 
	
                                        12.7

                                      	
                                        Amendments
      and Waivers

                                      	 	 	36	 
	
                                        12.8

                                      	
                                        Joint
      and Several

                                      	 	 	36	 
	
                                        12.9

                                      	
                                        Severability

                                      	 	 	36	 
	
                                        12.10

                                      	
                                        Headings

                                      	 	 	36	 
	
                                        12.11

                                      	
                                        Counterparts

                                      	 	 	36	 
	
                                        12.12

                                      	
                                        References

                                      	 	 	36	 
	
                                        12.13

                                      	
                                        Seller
      Disclosure Letter

                                      	 	 	36	 
	
                                        12.14

                                      	
                                        Attorneys’
      Fees

                                      	 	 	36	 


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
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    TABLE OF CONTENTS
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                              Page

                            	 
	 	 	 	 	 	 
	
                              12.15

                            	
                              Section
      1031 Exchange/Tax Planning

                            	 	 	37	 
	
                              12.16

                            	
                              Casualty

                            	 	 	37	 
	
                              12.17

                            	
                              Condemnation

                            	 	 	38	 
	
                              12.18

                            	
                              [Reserved.]

                            	 	 	38	 
	
                              12.19

                            	
                              Limited
      Liability

                            	 	 	38	 
	
                              12.20

                            	
                              Survival
      of Defined Terms

                            	 	 	38	 
	
                              12.21

                            	
                              Time
      of Essence

                            	 	 	38	 
	
                              12.22

                            	
                              No
      Third-Party Beneficiary

                            	 	 	38	 
	
                              12.23

                            	
                              WAIVER
      OF JURY TRIAL

                            	 	 	38	 


                    

                  

                

              

            

          

        

      

    

    


    EXHIBITS TO THIS
AGREEMENT

    


    
      
        	
                EXHIBIT
      A-1

              	
                Form
      of Escrow Holdback Agreement

              
	
                EXHIBIT
      B-1

              	
                Due
      Diligence Request List

              
	
                EXHIBIT
      C-1

              	
                Form
      of Guaranty

              


      

    

     

    
      
         


      

      
        iv

        
          

        

      

      
         


      

    

     

    TABLE OF CONTENTS OF SELLER
DISCLOSURE LETTER

     

    SCHEDULES

     

    
      
        	
                Schedule
      A.1.1

              	
                Pre-Approved
      Capital Improvements

              
	
                Schedule
      2.1(b)

              	
                Excluded
      Personal Property

              
	
                Schedule
      2.1(c)

              	
                Excluded
      Property Agreements

              
	
                Schedule
      2.2(b)

              	
                Assumed
      Obligations

              
	
                Schedule
      4.2

              	
                Consents
      of Third Parties

              
	
                Schedule
      4.5

              	
                Judgments

              
	
                Schedule
      4.7

              	
                Seller’s
      Insurance

              
	
                Schedule
      4.8

              	
                Litigation,
      Proceedings and Investigations

              
	
                Schedule
      4.9

              	
                Compliance
      with Laws

              
	
                Schedule
      4.10

              	
                Environmental
      Matters

              
	
                Schedule
      4.14

              	
                Rent
      Roll and Resident Agreements

              
	
                Schedule
      4.17

              	
                Condition
      of the Property

              
	
                Schedule
      4.18

              	
                Independent
      Property

              
	
                Schedule
      4.19

              	
                Utilities
      Access

              
	
                Schedule
      4.22

              	
                Exceptions
      to Seller Ownership

              
	
                Schedule
      4.23

              	
                Title
      Encumbrances

              
	
                Schedule
      4.26

              	
                Loans

              


      

    

    


    EXHIBITS

     

    
      
        	
                EXHIBIT
      A

              	
                Legal
      Description of the Property

              
	
                EXHIBIT
      B

              	
                List
      of Property Agreements

              
	
                EXHIBIT
      C

              	
                List
      of Licenses Required for the Property

              
	
                EXHIBIT
      D

              	
                Form
      of Seller’s Counsel Opinion

              
	
                EXHIBIT
      E

              	
                Rent
      Roll

              
	
                EXHIBIT
      F

              	
                Form
      Resident Agreement

              
	
                EXHIBIT
      G

              	
                Outstanding
      Citations

              
	
                EXHIBIT
      H

              	
                Form
      of Audit Letter

              


      

    

     

    
      
         


      

      
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    Execution
Copy

     

    PURCHASE AND SALE
AGREEMENT

     

    THIS PURCHASE AND SALE
AGREEMENT (this “Agreement”) is dated
the 18th day of
June, 2010, by and among: HILLIARD ALF, LLC, a
Delaware limited liability company, or its successors or assigns (collectively,
the “Buyer”);
CARRIAGE COURT HILLIARD,
LLC, a
Delaware limited liability company and CARRIAGE COURT HILLIARD LESSEE,
LLC, a Delaware limited liability company (together, the “Seller”); and LAWYERS TITLE INSURANCE
CORPORATION, a Nebraska corporation (“Escrow
Agent”).

     

    RECITALS:

     

    A.           Seller
is the owner of certain real, personal and intangible property constituting that
certain senior housing community known as Carriage Court of Hilliard located at
3570 Heritage Club Drive, Hilliard, Ohio 43026.

     

    B.           Buyer
desires to acquire, and Seller is willing to convey to Buyer pursuant to the
terms described herein the above referenced real property and personal
property.

     

    C.           Seller
has entered into that certain Management Agreement dated July 31, 2009 with Good
Neighbor Care Centers, LLC, an Oregon limited liability company, as manager (the
“Existing
Manager”).

     

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

     

    ARTICLE
I

    TERMINOLOGY

     

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

     

    Accrued Employee
Benefits:  Shall mean any accrued wages, salary, vacation or
other accrued paid time off or benefits for the employees of the Property,
including without limitation those employees who will continue to be employed at
the Property after the Closing.

     

    Adjustment
Amount:  The amount computed under Section 2.5
hereof.

     

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

     

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

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

    Due Diligence
Period:  The period commencing on the Effective Date and ending
on July 12, 2010, during which time Buyer may, at reasonable times with prior
notice to Seller, (i) investigate the financial, legal, operational,
environmental and all other aspects of the Property as Buyer may desire, and
(ii) seek out sources of financing and/or investors, all in order to determine
whether to consummate the transactions contemplated by this Agreement or
terminate this Agreement.

     

    Effective
Date:  The date first written above.

     

    Escrow Agent: LAWYERS
TITLE INSURANCE CORPORATION, a Nebraska corporation.

     

    Escrow Holdback
Agreement:  That certain Escrow Holdback Agreement by and among
Buyer, Seller, LAWYERS TITLE
INSURANCE CORPORATION, a Nebraska corporation, as Escrow Agent thereunder
and the other parties thereto, in substantially the form attached hereto as
Exhibit
A-1.

     

    Existing
Manager:   Good Neighbor Care Centers LLC, an Oregon
limited liability company.

     

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

     

    Knowledge:  As
used in this Agreement, the term “knowledge” when used to refer to the knowledge
of Seller shall mean the actual knowledge of any member, manager, or officer of
Seller, or any matter which any such person should have knowledge of upon
reasonable inquiry which, for purposes hereof, shall mean consultation with the
Manager and the executive director of the assisted living facility operated upon
the Property.

     

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

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    


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

     

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

     

    Manager: Good
Neighbor Care Centers, LLC, an Oregon limited liability company.

     

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

     

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

     

    Pre-Approved Capital
Improvements:  The alterations and improvements described on
Schedule 1.1 to the Seller Disclosure Letter.

     

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

     

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

     

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

     

    Title
Insurer:  The Title Insurer is as follows:

     

     Lawyers
Title Insurance Corporation

     830
E. Main Street, Suite 1600


    
      
         


      

      
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     Richmond,
Virginia 23219

     Phone:
(804) 521-5738

     Fax:  (804)
521-5756

     Attn.:  R.
Chris Newman

     E-mail:
chris.newman@ctt.com

    


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

     

    
      
        
          	
                  Accrued
      Employee Benefits

                	
                  2.2

                
	
                  Agreement

                	
                  Preamble

                
	
                  Assumed
      Obligations

                	
                  Section
      2.2(b)

                
	
                  Buyer

                	
                  Preamble

                
	
                  CERCLA

                	
                  Section
      4.10

                
	
                  Closing

                	
                  Section
      9.1

                
	
                  Closing
      Date

                	
                  Section
      9.1

                
	
                  Earnest
      Money Deposit

                	
                  Section
      2.4

                
	
                  Environmental
      Laws

                	
                  Section
      4.10

                
	
                  Escrowed
      Funds

                	
                  Section
      2.6

                
	
                  Governmental
      Payor Programs

                	
                  Section
      4.15

                
	
                  Guaranty

                	
                  Section
      7.14

                
	
                  Improvements

                	
                  Section
      2.1(a)

                
	
                  Indemnified
      Party

                	
                  Section
      10.4(a)

                
	
                  Indemnifying
      Party

                	
                  Section
      10.4(a)

                
	
                  Land

                	
                  Section
      2.1(a)

                
	
                  Management
      Agreement

                	
                  Section
      7.9

                
	
                  OFAC

                	
                  Section
      4.27

                
	
                  Patriot
      Act

                	
                  Section
      4.27

                
	
                  Permitted
      Buyer-Assignee

                	
                  Section
      12.5

                
	
                  Permitted
      Exception

                	
                  Section
      7.5(b)

                
	
                  Personal
      Property

                	
                  Section
      2.1(a)

                
	
                  Property

                	
                  Section
      2.1

                
	
                  Property
      Agreements

                	
                  Section
      2.1(c)

                
	
                  Proration
      Date

                	
                  Section
      2.5(a)

                
	
                  Proration
      Schedule

                	
                  Section
      2.5(a)

                
	
                  Purchase
      Price

                	
                  Section
      2.3

                
	
                  Real
      Property

                	
                  Section
      2.1(a)

                
	
                  Records

                	
                  Section
      6.10

                
	
                  Required
      Cure Items

                	
                  Section
      7.5(b)

                
	
                  Resident
      Agreements

                	
                  Section
      2.1(d)

                
	
                  Resident
      Deposits

                	
                  Section
      2.1(d)

                
	
                  SEC

                	
                  Section
      6.6(c)

                
	
                  Seller

                	
                  Preamble

                
	
                  Survey

                	
                  Section
      7.5(d)

                
	
                  Title
      Commitment

                	
                  Section
      7.5(a)

                
	
                  Title
      Defect

                	
                  Section
      7.5(b)

                
	
                  Title
      Expenses

                	
                  Section
      7.5(g)

                
	
                  Title
      Notice

                	
                  Section
      7.5(b)

                
	
                  Transaction
      Costs

                	
                  Section
      9.4

                


        

      

    

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    ARTICLE
II

    PURCHASE
AND SALE

     

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

     

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

     

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


     

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

     

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

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

    (h)         Intellectual
Property.  With
the exception of any intellectual property described in Schedule 2.1(b) of
the Seller Disclosure Letter, the
following (the “Intellectual
Property”):

     

    
      	
               
      

            	
              (i)

            	
              any
      and all rights of Seller or its Affiliates with respect to the use of (a)
      all trade names, trademarks, service marks, copyrights, patents, jingles,
      slogans, symbols, logos, inventions, computer software, operating manuals,
      designs, drawings, plans and specifications, marketing brochures, or other
      proprietary material, process, trade secret or trade right used by Seller
      or its Affiliates in the operation of the Property, and (b) all
      registrations, applications and licenses for any of the foregoing;
      and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              a
      perpetual, exclusive, irrevocable, royalty-free license to use the
      “Carriage Court of Hilliard” name, logo, symbol, and
      trademark.

            


    

     

    2.2         Assumption of
Liabilities.

     

    (a)         Buyer
is assuming no liabilities attributable to the operation or ownership of the
Property which accrued or occurred on or prior to the Closing, all of which
Seller shall pay, discharge and perform when due. Specifically, without limiting
the foregoing, Buyer shall not assume (a) any claim, action, suit, or proceeding
pending as of the Closing or any subsequent claim, action, suit, or proceeding
arising out of or relating to any event occurring prior to Closing, with respect
to the manner in which Seller conducted its businesses on or prior to the
Closing (b) any liability for Taxes other than real property taxes from and
after Closing and Subject to Section 9.4, any
transfer taxes or personal property taxes assumed by the Buyer as part of the
Closing, or (c) any liability under any Property Agreements, except for the
Assumed Obligations listed in Schedule 2.2(b) of
the Seller Disclosure Letter and the Accrued Employee Benefits.

     

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

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    2.3         Purchase
Price.  The
purchase price for the Property shall be an amount equal to SEVENTEEN MILLION
FIVE  HUNDRED THOUSAND AND NO/100 U.S. DOLLARS ($17,500,000.00), (the “Purchase Price”),
plus or minus (whichever is applicable) the Adjustment Amount which shall be
paid to Seller for the Purchased Property, all of which shall be paid by Buyer
at Closing via wire transfer of immediately available funds.

     

    2.4         Earnest Money
Deposit.  Buyer
has deposited FIFTY THOUSAND AND NO/100 U.S. DOLLARS ($50,000.00) (the “Earnest Money
Deposit”) with Escrow Agent.  The Earnest Money Deposit shall
be refunded to Buyer in the event of a termination of this Agreement for any
reason other than pursuant to Sections 11.1(d) or
11.2(b)
below.  The Earnest Money Deposit shall be nonrefundable to the Buyer
in the event there is a termination of this Agreement pursuant to Sections 11.1(d) or
11.2(b)
below.  Upon Closing, the Earnest Money Deposit shall be applied to
the Purchase Price.

     

    2.5         Adjustment of Purchase
Price.

     

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

     

    
      	
               
      

            	
              (i)

            	
              Payments
      under Assumed Obligations, if any;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              The
      amount of the Accrued Employee
Benefits;

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Real
      property taxes, which for the year 2010 shall be pro-rated based upon the
      actual 2010 tax amounts, if available and, if not available, then upon the
      assessed value for 2010 as of the Proration Date and applying either (a)
      the applicable 2010 tax rate(s) or (b) to the extent the 2010 tax rate(s)
      is or are unavailable, the 2009 tax
rate(s).

            


    

     

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

     

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

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    


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

     

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

     

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

     

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

     

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

     

    (h)           The
Seller shall receive a credit for, and Buyer shall pay at Closing, the amount of
any escrow reserve accounts funded in connection with the HUD financing of the
Property which accounts are assigned to and assumed by Buyer as of the Closing;
provided, however, Buyer shall
not be obligated pursuant to this Section 2.5(h)until
Seller has disclosed and HUD or RED Capital (the lender) has confirmed the
amounts of such accounts and Buyer has expressly further agreed to assume and
pay for them at Closing.  As of Closing Seller hereby transfers,
assigns and releases any rights in or interest to said escrow reserve
accounts.

     

    (i)        
   This Section 2.5 shall
survive the Closing.

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    2.6         Escrow
Agent.

     

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

     

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

     

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

     

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

     

    ARTICLE
III

    DUE
DILIGENCE PERIOD

     

    3.1         Due Diligence
Period.  During
the Due Diligence Period, Buyer shall have the right to a complete physical
inspection of the Property as the Buyer deems appropriate to review and evaluate
the Property, the nature and extent of the Property, and operations of the
Property, and all rights and liabilities related thereto.  In
consideration of the execution of this Agreement, Seller agrees to cause to be
provided to or made available to Buyer, at no cost to Buyer, all items requested
on the attached Exhibit
B-1, via electronic mail submission or electronic data room, in an
electronic format from which Buyer can generate an accurate and complete paper
copy that is both legible and suitable for inspection and
review.  Buyer may request that other items be provided by Seller in
addition to those already requested or provided, which items shall be mutually
agreed upon by the Buyer and Seller in their reasonable
discretion.  During the Due Diligence Period, Buyer shall have
reasonable access to the Property at all reasonable times during normal business
hours for the purpose of conducting reasonably necessary tests, including
surveys and architectural, engineering, geotechnical and environmental
inspections and tests, provided that, when practicable, (a) Buyer will give
Seller prior notice of any such inspection or test and (b) all such tests
shall be conducted by Buyer in compliance with Buyer’s responsibilities set
forth in Section
3.2 below.  If Closing occurs, the parties have agreed to share
certain expenses as provided in Section 9.4
below.

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

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

     

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

     

    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    The
Seller hereby represents and warrants to the Buyer as of the Effective Date and
as of the Closing as follows, which representations and warranties shall survive
Closing for eighteen (18) months years:

     

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

     

    4.2         Consent of Third
Parties.  Except
as otherwise set forth on Schedule 4.2 of the Seller Disclosure
Letter, no consent or approval of any third party is required as a
condition to the entering into, performance or delivery of this Agreement by
Seller other than such consent as has been previously obtained.

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

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

     

    4.4         Absence of
Conflicts.  Subject
to obtaining the consents and approvals described on Schedule 4.2 of the Seller Disclosure
Letter, and in Section 7.14 below,
neither the execution, delivery or performance of this Agreement will
(i) conflict with or result in any breach of any of the terms, conditions
or provisions of, (ii) constitute a default under, (iii) result in a
violation of, or (iv) give any third party the right to modify, terminate,
or accelerate any obligation under, the provisions of the articles of
organization or operating agreement of Seller and/or its Affiliates, any
indenture, mortgage, lease, loan agreement or other agreement or instrument to
which Seller and/or its Affiliates is bound or affected, the Property Agreements
or any Applicable Law.

     

    4.5         No
Judgments.  Except
as set forth on Schedule 4.5 of the Seller Disclosure
Letter, there are no judgments presently outstanding and unsatisfied
against the Property, the Seller or any of Seller’s assets.

     

    4.6         No Governmental
Approvals.  Except
as contemplated under Section 4.13 and
Section 7.14
below, no order, permission, consent, approval, license, authorization,
registration or validation of, or filing with, or exemption by (collectively and
individually “Governmental
Approval”), any governmental agency, commission, board or public
authority is required to authorize, or is required in connection with the
execution, delivery and performance by Seller of this Agreement or the taking of
any action contemplated by this Agreement, which has not been obtained. There
are no conditions or circumstances existing which would prevent Buyer from
obtaining any necessary Governmental Approval for the ownership or operation of
the Property as an assisted living facility.

     

    4.7         Insurance.  Schedule 4.7 of the Seller Disclosure
Letter sets forth an accurate summary of all general liability, fire,
theft, professional liability and other insurance currently maintained with
respect to the Property.  Neither Seller nor Existing Manager has
taken any action or failed to act in a manner, including the failure of Seller
or Existing Manager, to give any notice or information, which would limit or
impair the rights of Seller or Existing Manager under such insurance
policies.  Prior to Closing Seller will promptly notify Buyer of any
potential losses or claims that may be covered by the insurance and shall
provide Buyer with current loss runs within fifteen (15) days after the end of
each month from the Effective Date until the Closing.

     

    4.8         Litigation.  Except
as set forth on Schedule 4.8 of the Seller Disclosure
Letter, there is no pending or, to Seller’s Knowledge, considered or
threatened judgment, litigation, proceeding, investigation or inquiry (by any
person, governmental or quasi-governmental agency or authority or otherwise):
(i) to which Seller or the Property is a party, including without limitation,
litigation brought by Seller against any third party, or (ii) to which the
Existing Manager is a party, including without limitation, litigation brought by
Manager against any third party related to the Property.

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    4.9         Compliance with
Laws.  Except
as provided on Schedule 4.9 of the Seller Disclosure
Letter, the Property has been and is presently used and operated by
Seller, and to Seller’s knowledge was constructed, in compliance in all respects
with, and in no way in violation of, any Applicable Law affecting the Property
or any part thereof.  Neither Seller nor Existing Manager has received
notice of any such violation.

     

    4.10       Environmental
Matters.  Except
as identified on Schedule 4.10 of the Seller Disclosure
Letter, neither Seller nor Existing Manager has generated, stored or
disposed of any hazardous substance at or on the Property except in accordance
with Applicable Law, and neither Seller nor Existing Manager has Knowledge of
any previous or present generation, storage, disposal or existence of any
hazardous substance at or on the Property other than in accordance with all
Applicable Laws.  The term “hazardous substance” shall mean “hazardous
waste,” “toxic substances,” “petroleum products,” “pollutants,” or other similar
or related terms as defined or used from time to time in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”) (42
U.S.C. §§ 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. § 6921, et seq.), similar state
laws and regulations (the “Environmental Laws”)
adopted thereunder.  Neither Seller nor
Existing Manager has filed or been required to file any notice reporting a
release of any hazardous substance into the environment, and no notice pursuant
to Section 103(a) or (c) of the CERCLA, 42 U.S.C. § 9601, et seq. or any other
Environmental Law has been or was required to be filed.  Neither
Seller nor Existing Manager has received any notice letter under any
Environmental Law or any notice or claim, and there is no investigation pending,
contemplated, or to Seller’s Knowledge threatened, to the effect that Seller or
Existing Manager is or may be liable for or as a result of the release or
threatened release of hazardous substance into the environment or for the
suspected unlawful presence of any hazardous waste on the
Property.  Seller agrees to indemnify and hold Buyer, Tenant, and
their Affiliates harmless from any Loss resulting from a breach of this Section
4.10.  Notwithstanding the provisions of ARTICLE X, the
agreement to indemnify in this Section 4.10 shall
survive the Closing.

     

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

     

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

     

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

     

    
      
         


      

      
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    4.14       Resident
Agreements.  Except
as otherwise noted on Schedule 4.14 of the Seller Disclosure
Letter, the rent roll attached hereto as Exhibit
E of the Seller Disclosure Letter (the “Rent Roll”) is true
and complete, and no Resident Agreement currently in effect with respect to the
Property contains any material financial concession from the standard form of
Resident Agreement for the Property attached to the Seller Disclosure Letter as
Exhibit
F.  Seller is not in default under any of its material
obligations under any Resident Agreement or any lease, and, except as set forth
on Schedule
4.14 of the
Seller Disclosure Letter, Seller has no knowledge of any material default
on the part of any other party thereto.  All of the Resident
Agreements identified on the Rent Roll are currently in full force and effect as
of the date of the Rent Roll.

     

    4.15       Medicare;
Medicaid.

     

    (a)           Seller
is receiving payment under Titles XVIII and XIX of the Social Security Act
and is certified for participation in those governmental payor programs (“Governmental Payor
Programs”), including but not limited to the Medicare and Medicaid
programs, and is a party to valid participation agreements for payment by the
Governmental Payor Programs, which agreements are in full force and
effect.  True and correct copies of such agreements shall be delivered
to Buyer, to the extent not prohibited by Applicable Law.  Without
limiting the generality of the foregoing, the facilities, equipment, staffing
and operations of Seller and Existing Manager satisfy all material conditions of
participation in the Governmental Payor Programs.  Neither Seller nor
Existing Manager has received notice of pending, threatened or possible
investigation by, or loss of participation in, any Governmental Payor Programs,
and there is no basis for any such notice.

     

    (b)           There
are no pending or threatened material claims (including potential penalties) by
any of such Governmental Payor Programs against Seller or Existing Manager, and
neither Seller nor Existing Manager has been subject to loss of waiver of
liability for utilization review denials with respect to any such Governmental
Payor Programs during the past two (2) years.

     

    (c)           All
billing practices of Seller and Existing Manager with respect to Governmental
Payor Programs and private insurance companies have been in compliance with
Applicable Laws, and neither Seller nor Existing Manager has billed or received
any payment or reimbursement in excess of amounts allowed by Applicable
Laws.

     

    (d)           Neither
Seller nor Existing Manager has (i) offered or paid any remuneration, in
cash or in kind, to, or made any financial arrangements with, any past, present
or potential customers, past or present suppliers, patients, medical staff
members, contractors or third-party payors of Seller in order to obtain business
or payments from such persons other than in the ordinary course of business;
(ii) given or agreed to give, or is aware that there has been made or that
there is any agreement to make, any gift or gratuitous payment of any kind,
nature or description (whether in money, property or services) to any customer
or potential customer, supplier or potential supplier, contractor, third
party-payor or any other person other than in connection with promotional or
entertainment activities in the ordinary course of business; (iii) made or
agreed to make, or is aware that there has been made or that there is any
agreement to make, any contribution, payment or gift of funds or property to, or
for the private use of, any governmental official, employee or agent where
either the contribution, payment or gift or the purpose of such contribution,
payment or gift is or was illegal under Applicable Laws; (iv) established
or maintained any unrecorded fund or asset for any purpose or made any
misleading, false or artificial entries on any of its books or records for any
reason; or (v) made, or agreed to make, or is aware that there has been
made or that there is any agreement to make, any payment to any person with the
intention or understanding that any part of such payment would be used for any
purpose other than that described in the documents supporting such
payment.

     

    
      
         


      

      
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    Neither
Seller, Existing Manager, nor any partner, member, director, officer or employee
thereof, is a party to any contract, lease agreement or other arrangement
(including any joint venture or consulting agreement) with any physician, health
care facility, hospital, nursing facility, home health agency or other person
who is in a position to make or influence referrals to or otherwise generate
business for Seller or Existing Manager, or otherwise influence the affairs of
the Seller or Existing Manager, to provide services, lease space, lease
equipment or engage in any other venture or activity that is prohibited by law
or that did not provide commercially reasonable terms with fair market value
consideration for the goods, property, services or use of money provided,
exchanged or acquired thereunder at the time entered into.

     

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

     

    4.17       Condition of
Property.

     

    (a)           Real
Property.  Except as described on Schedule 4.17 of the Seller Disclosure
Letter, with regard to the Real Property Seller has no Knowledge of:
(i) material structural defects, (ii) insect or rodent infestation,
(iii) existing roof leaks, (iv) leaks in the foundation, or
(v) toxic mold or mold-related problems.  In addition, to
Seller’s Knowledge, all mechanical and utility systems servicing the Real
Property are in good condition and proper working order, free of material
defects and in substantial compliance with all Applicable Laws.

     

    (b)           Personal
Property.  Except as described on Schedule 4.17 of the Seller Disclosure
Letter: (i) the Personal Property comprises all material assets, rights
or property used in the operation of the assisted living facility located on the
Real Property and constitutes all of the personal property used or required for
the operation of the Property as an assisted living facility, and (ii) to
Seller’s Knowledge, all of the Personal Property is in good condition, working
order and repair (ordinary wear and tear excepted).

     

    (c)           Intellectual
Property.  Except as described on Schedule 4.17 of the Seller Disclosure
Letter, the Intellectual Property
comprises all material assets, rights or property used in the operation of the
assisted living facility located on the Real Property and constitutes all of the
intellectual property used
or required for the operation of the Property as an assisted living
facility.

     

    
      
         


      

      
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    4.18       Independent
Property.  Except
as described on Schedule 4.18 of the Seller Disclosure
Letter, the Property is an independent unit which does not rely on
facilities (other than facilities of public utility, sewer and water companies)
located on any property not included in the Property (i) to fulfill any
zoning, building code, or other municipal or governmental requirement, or
(ii) for structural support or the furnishing of any essential building
systems or utilities, including, but not limited to, electric, plumbing,
mechanical, heating, ventilating and air conditioning systems.  To
Seller’s Knowledge no building or other improvements not included in the
Property relies on any part of the Property to fulfill any zoning, building
code, or other municipal or governmental requirement or for structural support
or the furnishing of any essential building systems or utilities.

     

    4.19       Utilities
Access.  Except
as described on Schedule 4.19 of the Seller Disclosure
Letter, the Real Property has water supply, storm and sanitary sewer
facilities, access to telephone, gas and electricity connections, fire
protection, drainage, means of ingress and egress to and from public highways
and, without limitation, other public utilities, all sufficient for normal
operations.  The parking facilities located on the Property comply
with all Applicable Laws or meet requisite exceptions or variances to such
laws.  All public utilities are installed and operating, and all
installation and connection charges have been paid in full.  All
streets and roads necessary for access to and full utilization of the Property,
and every part thereof, have been built, completed, dedicated, and accepted for
maintenance and public use by the appropriate governmental authorities or are
otherwise owned and maintained by local governments for public
use.  Seller does not have knowledge of any fact or condition existing
that would result or could result in the termination or reduction of the current
access from the Property to the existing roads and highways or to sewer or other
utility services presently serving the Property.

     

    4.20       Zoning.  Except
as provided on Schedule 4.9 of the Seller Disclosure
Letter, to Seller’s Knowledge the current use of the Property is
permitted under the applicable municipal zoning ordinances, or special
exceptions, variances, or conditions thereto, and the Property complies, to the
extent required (including any waiver or grandfathering), with all conditions,
restrictions and requirements of such zoning ordinances and all amendments
thereto.

     

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

     

    4.22       Interests;
Title.

     

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

     

    (b)           Title to Personal
Property.  Except as described on Schedule 4.22 of the Seller Disclosure
Letter, Seller owns one hundred percent (100%) of the ownership interest
in the Personal Property, free and clear of all Liens except Permitted
Exceptions and Permitted Liens. Except as described on Schedule 4.22 of the Seller Disclosure
Letter, all Personal Property is owned free and clear of any Lien, except
for Personal Property that is leased as disclosed on Schedule 4.22 of the Seller Disclosure
Letter. There are no outstanding options or other rights to purchase or
otherwise acquire any ownership interest in the Personal
Property.  

     

    
      
         


      

      
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    4.23       Title
Encumbrances.  Except
as described on Schedule 4.23 of the Seller Disclosure
Letter, Seller is not in default under any of its material obligations
under any recorded agreement, easement or instrument encumbering title to the
Property, and Seller has no knowledge of any material default on the part of any
other party thereto.

     

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

     

    4.25       No New Survey
Matters.  Since
the dates of the most recent surveys for the Real Property obtained by Buyer
pursuant to Section
7.5(d)) no new survey matters have arisen in connection with the Real
Property which would otherwise be required under the applicable ALTA/ACSM
standards to be shown thereon.

     

    4.26       Loans.  Except
as described on Schedule 4.26 of the Seller Disclosure
Letter, there are no loans on the Property.

     

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

     

    4.28       Broker’s or Finder’s
Fees.  Seller
utilized the services of Senior Living Investment Brokerage in this transaction
and has an agreement with said broker entitling Senior Living Investment
Brokerage to certain fees and costs (if any).  Seller shall be solely
responsible for all fees and costs due to Senior Living Investment Brokerage and
agrees to indemnify and hold Buyer and its Affiliates harmless from any claims
made by Senior Living Investment Brokerage arising out of this
transaction.  No other agent, broker, investment banker of other
person or firm acting on behalf of or under the authority of Seller or any
Affiliates of Seller will be entitled to any fee or commission directly or
indirectly in connection with the transactions contemplated by this
Agreement.  This Section 4.28 shall
survive the Closing or the expiration or any termination of this
Agreement.


    
      
         


      

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

     

    4.30       Due
Diligence.  Seller
has provided Buyer with complete and accurate originals or copies of all items
requested on Exhibit
B-1.

     

    ARTICLE
V

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Seller as of the Effective Date and as of the Closing
as follows, which representations and warranties shall survive Closing for
eighteen (18) months:

     

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

     

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

     

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

     

    
      
         


      

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

     

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

     

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

     

    ARTICLE
VI

    OTHER
COVENANTS

     

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

     

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

     

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

     

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

     

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

     

    
      
         


      

      
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    (e)           Not
sell, lease, grant any rights in or to or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, the Property in whole or in part, except to
residents of the facility in the ordinary course of business using a form of
resident agreement agreed upon by Seller and Buyer.

     

    (f)           Take
commercially reasonable efforts to maintain the Personal Property currently in
use in reasonably good operating condition and repair, except for ordinary wear
and tear, in a manner consistent with past practices.

     

    (g)           Perform
all covenants, terms, and conditions and make all payments in a timely fashion,
under any loans listed on Schedule 4.26 of the Seller Disclosure
Letter.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         


      

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

     

    6.6         Confidentiality.

     

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

     

    (b)           Confidentiality of
Agreement.  Seller and Buyer will not disclose the terms or
existence of this Agreement to any third party without the prior written consent
of the other party or its agents, except that Seller and Buyer may disclose such
terms to their respective attorneys, accountants, consultants, engineers, other
advisers, members, shareholders, lenders, HUD, Seller’s Affiliates’ lenders and
related investors, the Buyer’s potential investors or lenders, and as required
by Applicable Law or by Section 7.8 without
such prior written consent.  This Section 6.6(b) shall
survive as to both Seller and Buyer following Closing or in the event this
Agreement is terminated prior to Closing.   Notwithstanding
anything provided herein to the contrary, Buyer is expressly permitted to
disclose the existence of this Agreement to the Manager and is permitted to
conduct discussions with Manager regarding Manager’s cooperation with Buyer in
the form of a post-closing lease or management agreement between Buyer and
Manager.

     

    
      
         


      

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

     

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

     

    6.7         Publicity.  The
parties agree that no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party prior to Closing except as
required by Applicable Law.  Buyer and Seller will jointly prepare and
approve announcements to staff and residents.

     

    6.8         Commercially Reasonable
Efforts.  Subject
to the terms and conditions of this Agreement, each party will use its
commercially reasonable efforts to satisfy any condition for which such party is
responsible hereunder and to consummate and make effective as soon as
practicable the transactions contemplated by this Agreement.

     

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

     

    6.10       Post-Closing Obligations of
Seller.  Following
Closing, Seller shall use, and shall cause Seller’s Affiliates to use,
reasonable diligent efforts to cooperate with Buyer and its Affiliates to (a)
confirm that all Licenses are obtained and held by the proper entity for
operation of the Property, and (b) to the extent not previously transferred to
Buyer, to provide any records in Seller’s custody or control which may be
requested of Buyer by any authorized governmental agency.  Further,
upon Buyer’s request, for a period of one (1) year after Closing, Seller shall
make the operating statements and any and all books, records, correspondence,
financial data, leases, delinquency reports and all other documents and matters
maintained by Seller or its agents and relating to receipts and expenditures
pertaining to the Property for the three (3) most recent full calendar years and
the current calendar year (collectively, the “Records”) available to Buyer for
inspection, copying and audit by Buyer's designated accountants, and at Buyer's
expense.  Additionally, following Closing and upon Buyer’s request,
Seller shall provide Buyer, but without expense to Seller, with (a) an audit
letter in substantially the form as Exhibit H attached to the Seller Disclosure
Letter and made a part hereof, and (b) copies of, or access to, such factual
information as may be reasonably requested by Buyer or its designated
accountants, and in the possession or control of Seller, to enable Buyer to file
any filings required by the SEC in connection with the purchase of the
Property.  This Section 6.10 shall
survive the Closing.

    


    6.11       No Other Representations or
Warranties.

     

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

     

    
      
         


      

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

     

    6.12       Noncompetition.  From
the Closing through the second anniversary of the Closing, Seller and Seller’s
Affiliates shall not directly or indirectly (unless acting in accordance with
Buyer’s written consent) own, manage, operate, finance or participate in the
ownership, management, operation or financing of, or permit its name to be used
by or in connection with, any competitive business or enterprise located within
a five (5) mile radius of the Real Property.  For purposes of this
Section 6.12,
the term “competitive
business or enterprise” shall mean an assisted living
facility.  This Section 6.12 shall
survive Closing.

     

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

     

    6.14       Pre-Approved Capital
Improvements.  The
Pre-Approved Capital Improvements shall be completed to the reasonable
satisfaction of the Buyer at no cost or expense to Buyer.  This Section 6.14 shall
survive Closing.

     

    ARTICLE
VII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF BUYER TO CLOSE

     

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

     

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

     

    
      
         


      

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

     

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

     

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

    


    7.5         Title Insurance and
Survey.

     

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

     

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

     

    
      
         


      

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

     

    
      	
               
      

            	
              (i)

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

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    
      	
               
      

            	
              (iii)

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

            


    

     

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

     

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

     

    
      
         


      

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

     

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

     

    (g)           All
Title Expenses shall be paid by the parties in accordance with Section 9.4 hereof.
“Title Expenses” shall include all costs and expenses of obtaining the Survey
and Title Commitment, together with any endorsements required by any lender
financing the Buyer’s acquisition of the Property.  “Title Expenses”
shall exclude any costs and expenses incurred or required to be incurred to cure
any Title Defects or Required Cure Items.

     

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

     

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

     

    7.8         Licenses.

     

    (a)           To
the extent necessary and permitted or required by Applicable Laws, Seller shall
have completed the transfer and assignment of all the Licenses listed on Exhibit
C to the Post-Closing Licensee at or prior to the Closing.  To
the extent that any such Licenses are not transferable or assignable by Seller,
the Post-Closing Licensee shall have obtained, at the Buyer’s sole cost and
expense, in the Post-Closing Licensee’s own name, the Licenses, and Seller
shall, and shall cause Existing Manager to, reasonably cooperate with the
Post-Closing Licensee in obtaining such Licenses at or prior to
Closing.  The Seller shall, or shall cause Existing Manager to,
diligently pursue all required Licenses.

     

    
      
         


      

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

     

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

     

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

     

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

     

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

     

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

     

    7.13       Guaranty.  The
Seller shall have caused OAKSHIRE PROPERTIES FUND V, LLC, a Delaware limited
liability company (the “Guarantor”) to
execute and deliver a guaranty of the Seller’s obligations to the Buyer
hereunder, including without limitation all obligations contained in ARTICLE X and ARTICLE XI hereof, in
the form attached as Exhibit
C-1 to this Agreement (the “Guaranty”).

     

    7.14       Financing
Contingency.  Buyer
shall have obtained approval from HUD for assumption of the financing secured by
the Property on terms as are satisfactory to Buyer in its sole discretion (the
“HUD
Approval”).

     

    7.15       Simultaneous
Closing.  CHATTANOOGA
ALF, LLC shall have previously or simultaneously with the Closing hereunder,
close on the purchase of that certain assisted living facility known as The
Terrace at Mountain Creek pursuant that certain Purchase and Sale Agreement by
and among CHATTANOOGA ALF, LLC, an Affiliate of Buyer and THE TERRACE AT
MOUNTAIN CREEK, LLC an Affiliate of Seller.

     

    
      
         


      

      
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    ARTICLE
VIII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF SELLER TO CLOSE

     

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

     

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

     

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

     

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

     

    ARTICLE
IX

    CLOSING

     

    9.1         Closing Date and
Place.

     

    (a)           Initial Closing
Date.  The Closing shall take place on
the date which is ten (10) business days following the satisfaction of all
conditions to Closing contained in ARTICLE VII and ARTICLE VIII but in no event
later than November 15, 2010, or at such earlier or later date and time as may
be expressly agreed upon in writing by the Buyer and Seller (the “Closing Date”). The Closing shall be
accomplished by the Buyer and Seller depositing the Closing Documents into
escrow with the Title Insurer and Buyer and Seller issuing their respective
instructions to the Title Insurer without the need for attending in person
unless the parties mutually agree otherwise.

     

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

     

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

     

    
      
         


      

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

     

    (c)           A
warranty deed, bill of sale (with general warranty of title) and other
instruments of transfer and conveyance transferring the Property to Buyer free
of all Liens other than the Permitted Exceptions and Permitted
Liens.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (k)           Unaudited
and unreviewed historical financial statements and any other documents
identified by Buyer that are required to allow the Buyer to comply with any
reporting, disclosure, or filing requirements imposed upon the Buyer by the SEC
with respect to the transactions contemplated by this
Agreement.  

     

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

     

    
      
         


      

      
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    (m)          The
Escrow Holdback Agreement, duly executed by Buyer and the Escrow Agent
thereunder.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (g)           The
Escrow Holdback Agreement, duly executed by the Seller and Escrow Agent
thereunder.

     

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

     

    9.4         Closing
Costs.  Buyer
and Seller shall each pay (a) their respective attorneys’ fees and expenses and
(b) any broker commissions due to any broker engaged by such party
respectively.  All other due diligence and closing costs
(collectively, “Transaction Costs”)
shall be borne by Buyer and Seller equally.  Buyer shall pay all costs and
expenses associated with obtaining the HUD Approval.  The cost sharing
referred to above shall occur only if the closing occurs. If Closing does not
occur for any reason the provisions of Section 11.1 or 11.2, as applicable,
shall determine each parties responsibility for the costs incurred by the
parties with respect to this Agreement.

     

    
      
         


      

      
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    ARTICLE
X

    INDEMNIFICATION

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (b)           The
Assumed Obligations.

     

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

     

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

     

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

     

    
      
         


      

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

     

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

     

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

     

    (f)          
Notwithstanding anything to the contrary in this Agreement, the right to pursue
indemnification as set forth in this ARTICLE X shall be
actionable or payable only if valid claims for Losses, if any, collectively
aggregate more than Fifty Thousand and No/100 U.S. Dollars ($50,000) (the “Floor”) and in no
event shall either party be liable for any amount in excess of Two Hundred Fifty
Thousand and No/100 U.S. Dollars ($250,000) (the “Cap”); provided, however, that the
foregoing Floor and Cap shall not apply in the case of fraud on the part of
Buyer, Seller or any of their respective Affiliates, or to any claims arising
under Section
10.2(a) (with respect to breaches of the representations and warranties
contained in Sections 4.1, 4.2, 4.3, 4.4, 4.6, 4.9, 4.10, 4.13, 4.15, 4.21, 4.22, 4.27, 4.28, and 4.29), 10.2(b), Section 10.2(c), or
Section 10.3(b)
(none of which shall be limited in any manner whatsoever).  In
addition, Buyer agrees to concurrently seek recovery against Seller, under any
insurance policies, the Title Policy and other applicable agreements, and Seller
shall not be liable to Buyer to the extent Buyer’s claim is actually satisfied
from any sums recovered from such insurance policies, Title Policy or other
applicable agreements.  FINALLY, IN NO EVENT SHALL EITHER
PARTY EVER BE LIABLE FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES OTHER THAN IN THE
EVENT OF FRAUD.

     

    
      
         


      

      
        31

        
          

        

      

      
         


      

    

     

    ARTICLE
XI

    DEFAULT
AND TERMINATION

     

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

     

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

     

    (b)           By
written agreement of Seller and Buyer;

     

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

     

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

     

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

     

    In the
event this Agreement is terminated pursuant to this Section 11.1 or
pursuant to any other express provision of this Agreement for any reason other
than a default by the Seller or Buyer hereunder, then (i) this Agreement shall
be of no further force or effect as of the date of delivery of such written
notice of termination, (ii) the Buyer and Seller shall equally share the
cancellation charges, if any, of the Escrow Agent and Title Insurer, (iii) no
party shall have any further rights or obligations hereunder other than pursuant
to any provision hereof which expressly survives the termination of this
Agreement and (iv) all Escrowed Funds shall be released to the party entitled to
the same in accordance with Section 2.4
hereof.

     

    11.2       Remedies upon
Default.

     

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

     

    
      
         


      

      
        32

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (i)

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

            


    

     

    
      	
               
      

            	
              (ii)

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

            


    

     

    (b)         If
Buyer defaults on its obligation to close this transaction Seller’s exclusive
remedy shall be to terminate this Agreement.

     

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

     

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

     

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

     

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

     

    
      
         


      

      
        33

        
          

        

      

      
         


      

    

     

    ARTICLE
XII

    MISCELLANEOUS

     

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

     

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

     

    
      
        
          
            
              	
                      (a)

                    	
                      If
      to Seller, to:

                    	
                      c/o:
      Oakshire Properties Fund V, LLC

                    
	 
      	 
      	
                      Attn:
      Doug Federspiel

                    
	 
      	 
      	
                      402
      E. Yakima Ave., 15th
      Floor

                    
	 
      	 
      	
                      Yakima,
      WA  98901

                    
	 
      	 
      	
                      Telephone
      No.:  (509) 965-4240

                    
	 
      	 
      	
                      Telecopy
      No.:

                    
	 	 	 
	 
      	
                      with copies
      to:

                    	
                      Jim
      Wilkinson, President

                    
	 
      	 
      	
                      Wilkinson
      Corporation

                    
	 
      	 
      	
                      402
      E. Yakima Ave., 15th
      Floor

                    
	 
      	 
      	
                      Yakima,
      WA  98901

                    
	 
      	 
      	
                      Telephone
      No.:  (509) 965-4240

                    
	 
      	 
      	
                      Telecopy
      No.

                    
	 
      	 
      	 
      
	
                      (b)

                    	
                      If
      to Buyer, to:

                    	
                      HILLIARD
      ALF, LLC

                    
	 
      	 
      	
                      c/o
      Cornerstone Healthcare Plus REIT, Inc.

                    
	 
      	 
      	
                      Attn:  Sharon
      C. Kaiser

                    
	 
      	 
      	
                      Chief
      Financial Officer

                    
	 
      	 
      	
                      1920
      Main Street, Suite 400

                    
	 
      	 
      	
                      Irvine,
      CA 92614

                    
	 
      	 
      	
                      Telephone
      No.:  949.263.4326

                    
	 
      	 
      	
                      Telecopy
      No.:    949.250.0592

                    
	 
      	 
      	 
      
	 
      	
                      with copies
      to:

                    	
                      Servant
      Healthcare Investments, LLC

                    
	 
      	 
      	
                      Attn:
      John Mark Ramsey

                    
	 
      	 
      	
                      1000
      Legion Place, Ste. 1750

                    
	 
      	 
      	
                      Orlando,
      FL 32801

                    
	 
      	 
      	
                      Telephone
      No.: 407.999.7772

                    
	 
      	 
      	
                      Telecopy
      No.:   407.999.7759

                    
	 
      	 
      	 
      
	 
      	
                      and:

                    	
                      Michael
      A. Okaty, Esq.

                    
	 
      	 
      	
                      Foley
      & Lardner LLP

                    
	 
      	 
      	
                      111
      N. Orange Avenue, Suite 1800

                    
	 
      	 
      	
                      Orlando,
      FL 32801

                    


            

          

        

      

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      
        	 	 
      	
                Telephone:  407-423-7656

              
	 
      	 
      	
                Fax:  407-648-1743

              
	 
      	 
      	
                E-mail:  mokaty@foley.com

              
	 
      	 
      	 
      
	
                (c)

              	
                If
      to Escrow Agent, to:

              	 
      
	 	 	 
	 
      	 
      	
                Lawyers
      Title Insurance Corporation

              
	 
      	 
      	
                c/o
      R. Chris Newman

              
	 
      	 
      	
                830
      E. Main Street, Suite 1600

              
	 
      	 
      	
                Richmond,
      Virginia 23219

              
	 
      	 
      	
                Phone:
      (804) 521-5738

              
	 
      	 
      	
                Fax:  (804)
      521-5756

              
	 
      	 
      	
                E-mail:
      chris.newman@ctt.com

              


      

    

     

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

     

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

     

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

     

    12.5         Assignment.  This
Agreement may not be assigned by any party prior to Closing without the written
consent of the Buyer and Seller, which consent may be given or withheld in each
such party’s sole and absolute discretion, except that Buyer may assign this
Agreement and its rights hereunder without the consent of Seller (i) to an
Affiliate of Buyer, (ii) to a partnership in which Buyer or any Affiliate of
Buyer is a general partner, (iii) a limited liability company in which Buyer or
any Affiliate of Buyer is a manager or managing member or (iv) any other lawful
entity entitled to do business in the state in which the Property is located
provided such entity is controlled by, controlling or under the common control
with Buyer or any Affiliate of Buyer (each, a “Permitted
Buyer-Assignee”).  In the event of such an assignment to a
Permitted Buyer-Assignee, Buyer shall not be released from any of its duties,
covenants, obligations or representations and warranties under this Agreement
and, from and after any such assignment, Buyer and such Permitted Buyer-Assignee
shall be jointly and severally liable under this Agreement, and from and after
any such assignment, the term “Buyer” shall be deemed to mean such Permitted
Buyer-Assignee under any such assignment.

     

    
      
         


      

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

     

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

     

    12.8         Joint and
Several.  CARRIAGE COURT HILLIARD, LLC
and CARRIAGE COURT HILLIARD
LESSEE, LLC shall be jointly and severally liable for performing all
obligations of Seller under this Agreement.

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         


      

      
        36

        
          

        

      

      
         


      

    


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

     

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

     

    
      
         


      

      
        37

        
          

        

      

      
         


      

    

     

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

     

    12.18       [Reserved.]

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          	BUYER:	 
      	
                                                                                                                                                  SELLER:

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	 
      
	
                                                                                                                                                  HILLIARD
      ALF, LLC, a Delaware

                                                                                                                                                  limited
      liability company

                                                                                                                                                	 
      	
                                                                                                                                                  CARRIAGE
      COURT HILLIARD, LLC, a

                                                                                                                                                  Delaware
      limited liability company

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 	
                                                                                                                                                  By:

                                                                                                                                                	
                                                                                                                                                  CGI
      Healthcare Operating

                                                                                                                                                  Partnership,
      L.P., sole member

                                                                                                                                                	 
      	 
      	
                                                                                                                                                  By:
      WILKINSON CORPORATION, a

                                                                                                                                                  Washington
      corporation, its Manager

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 	 	
                                                                                                                                                  By:

                                                                                                                                                	
                                                                                                                                                  Cornerstone
      Healthcare Plus

                                                                                                                                                	 	 	
                                                                                                                                                  By:

                                                                                                                                                	
                                                                                                                                                  /s/
      James T. Wilkinson

                                                                                                                                                
	 	 	 	Operating
      Partnership, L.P.,	 	 	 	
                                                                                                                                                  Jim
      Wilkinson, President

                                                                                                                                                
	 	 	 	
                                                                                                                                                  sole
      general partner

                                                                                                                                                	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 
      	 
      	
                                                                                                                                                  By:

                                                                                                                                                	
                                                                                                                                                  Cornerstone
      Healthcare

                                                                                                                                                  Plus
      REIT, Inc., sole

                                                                                                                                                  general
      partner

                                                                                                                                                	 
      	
                                                                                                                                                  CARRIAGE
      COURT HILLIARD LESSEE,

                                                                                                                                                  LLC,
      a Delaware limited liability
  company

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 	 	 	 	 	
                                                                                                                                                  By:
      WILKINSON CORPORATION, a

                                                                                                                                                
	 	 	 	 	      
                                                                                                                                                  By:

                                                                                                                                                	/s/
      Terry G. Roussel	 	 	
                                                                                                                                                  Washington
      corporation, its Manager

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	Terry
      G. Roussel	 
      	 
      	 
      	 
      
	 	 
      	 
      	 
      	 
      	President
      and Chief	 
      	 
      	
                                                                                                                                                  By:

                                                                                                                                                	
                                                                                                                                                  /s/
      James T. Wilkinson

                                                                                                                                                
	 	 
      	 
      	 
      	 
      	Executive
      Officer  	 
      	 
      	 
      	
                                                                                                                                                  Jim
      Wilkinson,
President

                                                                                                                                                


                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      ESCROW
AGENT:

    

    


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

     

    LAWYERS
TITLE INSURANCE CORPORATION

     

    
      
        
          
            	
                    By:

                  	/s/
      R. Chris Newman
	
                    Name: 

                  	
                    R. Chris Newman

                  
	
                    Title:

                  	
                    Sr. Commercial Title
  Officer

                  


          

        

      

    

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    EXHIBIT
A-1

     

    Form
of Escrow Holdback Agreement

     

    ESCROW
HOLDBACK AGREEMENT

    


    This ESCROW HOLDBACK AGREEMENT
("Agreement")
is made as of the _____ day of ___________, 2010 by CARRIAGE COURT HILLIARD, LLC,
a Delaware limited liability company and CARRIAGE COURT HILLIARD LESSEE, LLC,
a Delaware limited liability
company (together the "Hilliard Seller"),
THE TERRACE AT MOUNTAIN
CREEK, a Washington limited liability company (“Chattanooga Seller”
and, together with Hilliard Seller the “Sellers” and each a
“Seller”),
HILLIARD ALF, LLC, a
Delaware limited liability company ("Hilliard
Buyer"), CHATTANOOGA
ALF,
LLC, a Delaware limited liability company ("Chattanooga Buyer"
and, together with Hilliard Buyer, the “Buyers” and each a
“Buyer”), and
LAWYERS TITLE INSURANCE
CORPORATION, a Nebraska (“Escrow
Agent”).

    


    1.    
        Recitals.

    


    (a)           As
of even date herewith, Hilliard Seller has sold to Hilliard Buyer that certain
senior housing facility known as Carriage Court of Hilliard located in Hilliard,
Ohio (the “Facility”) pursuant
to the terms of that certain Purchase and Sale Agreement dated June 18, 2010
between Hilliard Seller and Hilliard Buyer (the “Hilliard Purchase
Agreement”);

    


    (b)           As
of even date herewith, Buyer and Good Neighbor Care Centers, LLC (“Manager”) have
entered into that certain Management Agreement whereby Manager shall provide
management services for the Facility from and after the date
hereof;

    


    (c)           As
of even date herewith, Chattanooga Seller has sold to Chattanooga Buyer that
certain senior housing facility known as Terrace at Mountain Creek located in
Chattanooga, Tennessee pursuant to the terms of that certain Purchase and Sale
Agreement dated June 18, 2010 between Chattanooga Seller and Chattanooga Buyer
(the “Chattanooga Purchase Agreement”
and, together with the Hilliard Purchase Agreement, the “Purchase
Agreements”);

    


    (d)           Section
9.2(m) of each of the Purchase Agreements requires that Sellers deliver this
Agreement and the Escrow Funds as a condition precedent to the acquisition of
the Facility by Buyer; and

    


    (e)           Hilliard
Seller has simultaneously deposited Five Hundred Thousand and No/100 Dollars
($500,000.00) (the “Escrow Funds”) with
Escrow Agent, to be governed by the terms of this Agreement.

    


    2.          
  Definitions.   The
following terms shall have the definitions set forth below:

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    (a)           The
term "Gross Revenue," as
used in this Agreement, means all revenues collected from the operation of the
Facility, whatever source, including, without limitation, rental income from
residents, space rentals, service fee income, food income, assisted living
income, guest fees, and other income generated from the operation of the
Facility, net of any refunds of previously collected revenues. Gross Revenue
shall exclude insurance proceeds (except for rent loss proceeds), condemnation
awards, and security deposits (unless forfeited by the resident). In calculating
Gross Revenues for any one month period, only the amounts actually received
during the month in question shall be taken into account (and not any accrued
rentals that are not paid).

     

    (b)           The
term “Facility Operating
Expenses” shall mean all reasonable and customary costs and expenses that
are paid with respect to the Facility, whether paid directly by Buyer or
reimbursed to Manager; provided, however, for the
purposes of calculating Facility Operating Expenses under this Agreement,
Facility Operating Expenses shall be deemed to exclude the following: (i) debt
service on mortgage loans encumbering the Facility, (ii) expenditures normally
capitalized under generally accepted accounting principles (“GAAP”), (iii)
amortization and depreciation, (iv) reserves (including an FF&E reserve of
$500 per residential unit at the Facility per year), (v) taxes (other than
property taxes), and (vi) audit fees incurred by Buyer.  In
calculating Facility Operating Expenses for any one month period, expenses for
the Facility that are attributable to longer periods of time shall be
appropriately pro-rated and allocated to that month (for example, 1/12th of an
annual tax payment, 1/4th of a
quarterly service agreement payment, etc.).

     

    (c)           The
term “Net Operating
Income” or “NOI”
shall mean Gross Revenues less all Facility Operating Expenses.  NOI
shall be computed without regard to “extraordinary items” of gain or loss as
defined by GAAP, and shall not include any gains, losses or profits realized
from the sale of any assets other than in the ordinary course of business or any
gains, losses, income or profit from any expansion to the Facility after the
date hereof.

     

    (d)           The
term “Minimum Return
Threshold” shall mean One Million Six Hundred Fifty Thousand and
No/100ths ($1,650,000.00), which amount shall be increased by two and
three-fourths percent (2.75%) on each anniversary of the first calendar quarter
following the date hereof.

     

    (e)           The
term “Expiration Date”
shall mean earlier to occur of the following ((i) Escrow Agent has disbursed all
of the Escrow Funds to Buyers pursuant to the terms of this Agreement; (ii) the
Facility has generated an annualized NOI equal to at least one hundred fifteen
percent (115%) of the Minimum Return Threshold then in effect for a minimum of
two (2) consecutive calendar quarters; or (iii) the date which is two (2) years
following the first day of the first calendar quarter following the date of this
Agreement.

    


    3.           Escrow
Funds

     

    (a)           Contemporaneously
with the execution hereof, Hilliard Seller has deposited with Escrow Agent the
Escrow Funds.  Escrow Agent shall hold the Escrow Funds in escrow and
disburse the Escrow Funds only as set forth below.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    (b)           Escrow
Agent hereby acknowledges receipt of the Escrow Funds and covenants and agrees
to hold the Escrow Funds in escrow as provided above and, subject to Section
3(d) below, disburse the Escrow Funds to Buyer within ten (10) days following
receipt of a Payment Request in an amount equal to the portion of the Escrow
Funds set forth on such Payment Request.

    


    (c)           The
Escrow Funds shall be held in an interest bearing account and any interest
accrued thereon shall be added to and become part of the Escrow Funds payable in
accordance herewith.

    


    (d)           If
Escrow Agent receives a written notice from either Seller within ten (10) days
following receipt of a Payment Request objecting to such Payment Request (a
“Dispute
Notice”), then Escrow Agent shall withhold such delivery until Buyers and
such Seller resolve the objection and Escrow Agent receives either written
instructions signed by both parties or a court order directing a delivery of the
Escrow Funds.  Buyers and such Seller agree to send to the other a
duplicate copy of any written notice sent to the Escrow Agent with respect to
the subject matter of this Escrow Agreement.

     

    ARTICLE
XIII

     

    (e)           In
no event shall Sellers’ liability to Buyers pursuant to this Agreement exceed
the amount of the Escrow Funds, regardless of the actual NOI for the Facility
for the Term hereof.  The foregoing shall in no way reduce, eliminate
or modify Sellers’ obligations to Buyers under the Purchase
Agreements.

     

    (f)           In
no event shall the balance of the Escrow Funds be less than, and Sellers are
hereby jointly and severally obligated to replenish and maintain the Escrow
Funds to equal or exceed, Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) at all times during the Survival Period.  For purposes
of this Section 3(f), the “Survival Period” means the period of time commencing
on the date hereof and continuing until the later of (1) the date
that is eighteen (18) months following the date hereof, and (2) if a Payment
Request has been submitted within eighteen (18) months following the date
hereof, then the date on which the amount of such Payment Request has been paid
to the applicable Buyer or, if a Dispute Notice has been issued with respect to
such Payment Request, then on the date such dispute has been resolved in
accordance with the terms hereof and any payments due in connection with such
dispute resolution have been made.

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    4.       
     Quarterly NOI Statements;
Disbursements.

     

    (a)           Manager
shall prepare and deliver to Hilliard Buyer and Hilliard Seller a quarterly
(based on calendar quarters) report setting forth the annualized NOI for the
Facility (the “NOI
Statement”) for each calendar quarter (or portion thereof) following the
date hereof and until the Expiration Date.  Each NOI Statement shall
include (i) a calculation of the actual year to date NOI for the Facility ending
as of the last day of the preceding calendar quarter, and (ii) a calculation of
the annualized NOI for each quarter for the previous rolling two (2) calendar
quarter period ending as of the last day of the preceding calendar
quarter.

     

    (b)           Schedule
1 attached hereto sets forth the “Quarter Threshold” and the cumulative “Annual
Threshold” for each calendar quarter for two calendar years following the date
hereof.  In the event that any quarterly NOI Statement sets forth an
actual NOI for such calendar quarter in excess of the applicable Quarter
Threshold, Hilliard Buyer shall not be entitled to any disbursement from the
Escrow Funds for such calendar quarter.  In the event that a quarterly
NOI Statement sets forth an actual NOI for such calendar quarter less than the
applicable Quarter Threshold, then Hilliard Buyer shall be entitled to a
disbursement from the Escrow Funds in an amount equal to the difference between
the actual NOI and the applicable Quarter Threshold.

     

    (c)           Hilliard
Buyer and Chattanooga Buyer shall each be entitled to a disbursement from the
Escrow Funds to satisfy any obligations owing thereto by either of the Sellers
under either Purchase Agreement.

     

    5.        
    Reserved.

     

    6.        
    Disbursements from
Escrow

     

    (a)           In
the event either Buyer is entitled to a disbursement from the Escrow Funds in
accordance with Section 4 above, such Buyer shall deliver to Sellers and Escrow
Agent a notice setting forth the amount due to such Buyer together with
reasonable substantiating documentation (a “Payment
Request”).

     

     (b)           In
the event either Seller delivers a Dispute Notice pursuant to Section 3(d)
above, such Seller and Buyers shall attempt to resolve any differences with
respect to the parties’ obligations hereunder for a period of ten (10) business
days following receipt of the Dispute Notice.  In the event the
parties are not able to resolve the amount due to such Buyer within such ten
(10) business day period, then the determination of such Buyer’s rights with
respect to the Escrow Funds shall be submitted to arbitration pursuant to
Section 7 below.

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    7.            Arbitration.    In
the event that a dispute pursuant to Section 6 above may be resolved by
arbitration, the arbitration shall be conducted in Yakima County, Washington, as
provided in this Section 7.  The party desiring such arbitration shall
give written notice thereof to the other specifying the dispute to be
arbitrated.  Within ten (10) days after the date on which the
arbitration procedure is invoked as provided in this Agreement, each party shall
appoint an experienced arbitrator and notify the other party of the arbitrator’s
name and address.  The two arbitrators so appointed shall appoint a
third experienced arbitrator.  If the three arbitrators to be so
appointed are not appointed within twenty (20) days after the date the
arbitration procedure is invoked as provided in this Agreement, then the
arbitrator or arbitrators, if any, who have been selected shall proceed to carry
out the arbitration.  The arbitrator(s) selected shall furnish Sellers
and Buyers with a written decision within ten (10) days after the date of
selection of the last of the arbitrators to be so selected. Any decision so
submitted shall be signed by a majority of the arbitrators, if more than two
have been selected.  If only two arbitrators have been selected and
they are unable to agree, then either Sellers or Buyers shall be entitled to
apply to the presiding judge of the U.S. District Court for the Eastern District
of the State of Washington (“Court”) for the
selection of a third arbitrator who shall be selected from a list of names of
experienced arbitrators submitted by Sellers or from a list of names so
submitted by Buyers, as the case may be, unless both Sellers and Buyers submit
lists of names, in which case the Court, in its sole discretion, shall select
the arbitrator from the lists.  Each arbitrator so appointed shall be
an independent certified public accountant.  In designating
arbitrators and in deciding the dispute, with the then prevailing rules of the
American Arbitration Association (or any successor organization) and in
accordance with applicable Ohio law, subject, however, to such limitations as
may be placed on them by the provisions of this Agreement.  The
decision of the arbitrators shall be final and binding upon the parties, and
judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.

    


    8.      
     Term. The term of
this Agreement (the “Term”) shall commence
as of the date hereof and shall expire as of the date in which any payments to
the Buyers are made with respect to all Payment Requests or, if a Dispute Notice
is issued by either Seller, then following resolution of such dispute in
accordance with the terms hereof and payment of any amounts due to be paid in
accordance with such resolution.  Any Escrow Funds held by Escrow
Agent as of the expiration of the Term shall be returned to Hilliard
Seller.  Neither party shall have any liability hereunder following
the expiration of the Term of this Agreement.

    


    9.        
   No
Assignment.  Neither party to this Agreement shall have the
right to assign their rights and benefits under this Agreement without the prior
written consent of the other party which may be withheld in either party’s sole
and absolute discretion.

    


    10.           Successors.  Each
party’s obligations under this Agreement shall be binding on their successors
and permitted assigns.

    


    11.           Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Ohio.

    


    12.           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, and all of which together will constitute one and the same
instrument.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    13.           Notices.  Any
notice, request, demand, consent, approval and other communications under this
Agreement shall be in writing, and shall be deemed duly given or made at the
time and on the date when received by facsimile (provided that the sender of
such communication shall orally confirm receipt thereof by the appropriate
parties and send a copy of such communication to the appropriate parties within
one (1) business day of such facsimile) or when personally delivered as shown on
a receipt therefor (which shall include delivery by a nationally recognized
overnight delivery service such as Federal Express, UPS Next Day Air, or
Airborne Express), to the address for each party set forth below.  Any
party, by written notice to the other in the manner herein provided, may
designate an address different from that set forth below.

    


    
      
        
          
            
              	
                      If to
      Buyers:

                    	
                      HILLIARD
      ALF, LLC

                    
	 
      	
                      c/o
      Cornerstone Healthcare Plus REIT, Inc.

                    
	 
      	
                      1920
      Main Street, Suite 400

                    
	 
      	
                      Irvine,
      CA  92614

                    
	 
      	
                      Attn:  Sharon
      C. Kaiser

                    
	 
      	
                      Chief
      Financial Officer

                    
	 
      	
                      Telephone
      No.:  949.263.4326

                    
	 
      	
                      Telecopy
      No.:    949.250.0592

                    
	 
      	
                      (a)

                    
	 	 
	 
      	
                      And,

                    
	 
      	 
      
	 
      	
                      CHATTANOOGA
      ALF, LLC

                    
	 
      	
                      c/o
      Cornerstone Healthcare Plus REIT, Inc.

                    
	 
      	
                      Attn:  Sharon
      C. Kaiser

                    
	 
      	
                      Chief
      Financial Officer

                    
	 
      	
                      1920
      Main Street, Suite 400

                    
	 
      	
                      Irvine,
      CA 92614

                    
	 
      	
                      Telephone
      No.:  949.263.4326

                    
	 
      	
                      Telecopy
      No.:    949.250.0592

                    


            

          

        

      

    

     

    
      
        
          	
                  with a copy
      to:

                	
                  Servant
      Healthcare Investments, LLC

                
	 
      	
                  Attn:
      John Mark Ramsey

                
	 
      	
                  1000
      Legion Place, Ste. 1750

                
	 
      	
                  Orlando,
      FL 32801

                
	 
      	
                  Telephone
      No.:   407.999.7772

                
	 
      	
                  Telecopy
      No.:     407.999.7759

                


        

      

    

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      with a copy
      to:

                                    	
                                      Michael
      A. Okaty, Esq.

                                    
	 
      	
                                      Foley
      & Lardner LLP

                                    
	 
      	
                                      111
      North Orange Avenue

                                    
	 
      	
                                      Suite
      1800

                                    
	 
      	
                                      Orlando,
      Florida 32801

                                    
	 
      	
                                      Telephone
      No.:  407-244-3229

                                    
	 
      	
                                      Telecopy
      No.:    407-648-1743

                                    
	 
      	 
      
	
                                      If to
      Sellers:

                                    	
                                      c/o:
      Oakshire Properties Fund V, LLC

                                    
	 
      	
                                      Attn:
      Doug Federspiel

                                    
	 
      	
                                      402
      E. Yakima Ave., 15th Floor

                                    
	 
      	
                                      Yakima,
      WA  98901

                                    
	 
      	
                                      Telephone
      No.:  (509) 965-4240

                                    
	 
      	
                                      Telecopy
      No.:

                                    
	 
      	 
      
	 
      	
                                      And,

                                    
	 
      	 
      
	 
      	
                                      c/o:
      Wilkinson Properties Fund VII, LLC

                                    
	 
      	
                                      Attn:
      Doug Federspiel

                                    
	 
      	
                                      402
      E. Yakima Ave., 15th Floor

                                    
	 
      	
                                      Yakima,
      WA  98901

                                    
	 
      	
                                      Telephone
      No.:  (509) 965-4240

                                    
	 
      	
                                      Telecopy
      No.:

                                    
	 
      	 
      
	
                                      with a copy
      to:

                                    	
                                      Jim
      Wilkinson, President

                                    
	 
      	
                                      Wilkinson
      Corporation

                                    
	 
      	
                                      402
      E. Yakima Ave., 15th Floor

                                    
	 
      	
                                      Yakima,
      WA  98901

                                    
	 
      	
                                      Telephone
      No.:  (509) 965-4240

                                    
	 
      	
                                      Telecopy
      No.

                                    
	 
      	 
      
	
                                      If
      to Escrow Agent:

                                    	
                                      Lawyers
      Title Insurance Corporation

                                    
	 
      	
                                      830
      E. Main Street, Suite 1600

                                    
	 
      	
                                      Richmond,
      Virginia 23219

                                    
	 
      	
                                      Attn:  R.
      Chris Newman

                                    
	 
      	
                                      Telephone
      No.:  (804) 521-5738

                                    
	 
      	
                                      Telecopy
      No.:  (804)
521-5756

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    14.           Escrow
Agent.  Escrow Agent hereby accepts its designation as Escrow
Agent hereunder and agrees to hold and disburse the Escrow Funds as herein
provided.  Escrow Agent shall not be liable for any acts taken in good
faith, shall only be liable for its willful default or gross negligence, and
may, in its sole discretion, rely upon the oral or written notices,
communications, orders or instructions given by the parties
hereto.  Escrow Agent’s only responsibility with respect to the Escrow
Funds shall be to use its reasonable and diligent efforts to hold and to
disburse the same in accordance with this Agreement.  In the event of
a dispute sufficient in the discretion of Escrow Agent to justify its doing so,
Escrow Agent shall be entitled to tender the Escrow Funds into the registry or
custody of any court of competent jurisdiction, together with such legal
proceedings as it deems appropriate, and thereupon to be discharged from all
further duties under this Agreement.  Any such legal action may be
brought in any such court as Escrow Agent shall determine to have jurisdiction
thereof.  Buyer and Seller hereby agree to indemnify and hold harmless
Escrow Agent against any and all losses, claims, damages, liabilities and
expenses, including, without limitation, reasonable costs of investigation and
counsel fees and disbursements which may be imposed upon Escrow Agent or
incurred by it in connection with its acceptance of this appointment as Escrow
Agent hereunder or the performance of its duties hereunder including, without
limitation, any litigation arising from this Agreement or involving the subject
matter hereof; provided, however, that if
Escrow Agent shall be found guilty of willful default or gross negligence under
this Agreement, then, in such event, Escrow Agent shall bear all such losses,
claims, damages and expenses.  Escrow Agent shall be discharged from
all further duties under this Agreement upon the disbursement of the Escrow
Funds as provided herein.

    


    [Signature
page follows]


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

    


    IN WITNESS WHEREOF, the
undersigned have executed, sealed and delivered this Escrow Holdback Agreement
on the ____ day of __________, 2010.

    


    
      
        
          	 
      	
                  SELLERS:

                
	 
      	 
      
	 
      	
                  CARRIAGE
      COURT HILLIARD, LLC, a

                
	 
      	
                  Delaware
      limited liability
company

                


        

      

    

    


    
      
        
          	 
      	
                  By: WILKINSON
      CORPORATION, an

                
	 
      	 
      
	 
      	
                  Its
      Manager

                


        

      

    

    


    
      
        
          
            	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Jim
      Wilkinson,
President

                  


          

        

      

    

    


    
      
        	 
      	
                CARRIAGE
      COURT HILLIARD LESSEE,

              
	 
      	
                LLC,
      a Delaware limited liability
company

              


      

    

    


    
      
        
          	 
      	
                  By: WILKINSON
      CORPORATION, an

                
	 
      	 
      
	 
      	
                  Its
      Manager

                


        

      

    

    


    
      
        
          	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Jim
      Wilkinson, President

                


        

      

    

    


    
      
        	 
      	
                THE
      TERRACE AT MOUNTAIN CREEK,

              
	 
      	
                LLC, a Washington
      limited liability company

              


      

    

    


    
      
        
          
            
              	 
      	
                      By:
      WILKINSON PROPERTIES FUND VII,

                    
	 
      	
                      LLC, a Washington
      limited liability company,

                    
	 
      	
                      its
      sole member

                    
	 
      	 
      
	 
      	
                      By: OAKSHIRE U.S.A.,
      LLC, a Washington

                    
	 
      	
                      limited
      liability company, its Manager

                    
	 
      	 
      
	 
      	
                      By: WILKINSON
      CORPORATION, a

                    
	 
      	
                      Washington
      corporation, its sole member

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Jim
      Wilkinson,
President

                    


            

          

        

      

    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

    


    
      
        	 
      	
                BUYERS:

              
	 
      	 
      
	 
      	
                HILLIARD ALF, LLC, a
      Delaware limited

              
	 
      	
                liability
      company

              


      

    

    


    
      
        	 
      	
                By:

              	
                CGI
      Healthcare Operating Partnership,

              
	 
      	 
      	
                L.P.,
      sole member

              
	 
      	 
      	 
      
	 
      	 
      	
                By:

              	
                Cornerstone
      Healthcare Plus Operating

              
	 
      	 
      	 
      	
                Partnership,
      L.P., sole general partner

              
	 
      	 
      	 
      
	 
      	 
      	 
      	
                By:

              	
                Cornerstone
      Healthcare Plus

              
	 
      	 
      	 
      	 
      	
                REIT,
      Inc., sole general partner

              


      

    

    


    
      
        
          	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Terry
      G. Roussel

                
	 
      	 
      	
                  President
      and Chief Executive

                
	 
      	 
      	
                  Officer

                


        

      

    

    


    
      
        	 
      	
                CHATTANOOGA ALF, LLC, a
      Delaware

              
	 
      	
                limited
      liability company

              


      

    

    


    
      
        	 
      	
                By:

              	
                CGI
      Healthcare Operating Partnership,

              
	 
      	 
      	
                L.P.,
      sole member

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                By:

              	
                Cornerstone
      Healthcare Plus Operating

              
	 
      	 
      	 
      	
                Partnership,
      L.P., sole general partner

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                By:

              	
                Cornerstone
      Healthcare Plus

              
	 
      	 
      	 
      	 
      	
                REIT,
      Inc., sole general partner

              


      

    

    


    
      
        
          	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Terry
      G. Roussel

                
	 
      	 
      	
                  President
      and Chief

                
	 
      	 
      	
                  Executive
      Officer

                


        

      

    

    


    
      
        	 
      	
                ESCROW
      AGENT:

              
	 
      	 
      
	 
      	
                LAWYERS
      TITLE INSURANCE

              
	 
      	
                CORPORATION, a Nebraska
      corporation

              


      

    

     

    
      
        
          
            
              	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	
                      R. Chris Newman

                    	 
      
	 
      	
                      Title:

                    	 
      


            

          

        

      

    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    

    


    Manager
hereby joins in the execution of this Escrow Holdback Agreement solely for the
purposes of acknowledging its obligations to deliver the NOI Statements in
accordance with the terms of this Agreement:

    


    
      
        
          
            
              
                	 
      	
                        MANAGER:

                      
	 
      	 
      
	 
      	
                        GOOD NEIGHBOR CARE CENTERS,
      LLC,
      an

                      
	 
      	
                        Oregon
      limited liability company

                      
	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	
                        Name: 

                      	 
      
	 
      	
                        Title:

                      	 
      


              

            

          

        

      

    


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    SCHEDULE
1

     

    
      
        
          
            
              
                
                  
                    	CLOSING
      DATE ASSUMPTION	 	
                            1-Aug-10

                          
	 	 	 	 
	
                            Quarter

                          	 	
                            Threshold

                          	 
	 
      	 	 
      	 	
                            Quarter

                          	 	 	
                            Annualized

                          	 
	 
      	 	 
      	 	 	 	 	 	 
	
                            1-Oct-10

                          	 	
                            31-Dec-10

                          	 	 	412,500	 	 	 	412,500	 
	
                            1-Jan-11

                          	 	
                            31-Mar-11

                          	 	 	412,500	 	 	 	825,000	 
	
                            1-Apr-11

                          	 	
                            30-Jun-11

                          	 	 	412,500	 	 	 	1,237,500	 
	
                            1-Jul-11

                          	 	
                            30-Sep-11

                          	 	 	412,500	 	 	 	1,650,000	 
	 
      	 	 
      	 	 	 	 	 	 	 	 
	
                            1-Oct-11

                          	 	
                            31-Dec-11

                          	 	 	423,844	 	 	 	423,844	 
	
                            1-Jan-12

                          	 	
                            31-Mar-12

                          	 	 	423,844	 	 	 	847,688	 
	
                            1-Apr-12

                          	 	
                            30-Jun-12

                          	 	 	423,844	 	 	 	1,271,531	 
	
                            1-Jul-12

                          	 	
                            30-Sep-12

                          	 	 	423,844	 	 	 	1,695,375	 


                  

                

              

            

          

        

      

    


    
      
         


      

      
        Exhibit
A-1, Page 1

        
          

        

      

      
         


      

    


    EXHIBIT
B-1

     

    Due
Diligence Request List

     

    
      
        
           


        

        
          Exhibit
B-1, Page 1

          
            

          

        

        
           


        

      

    

     

    EXHIBIT
C-1

     

    Form
of Guaranty

     

    GUARANTY
OF PURCHASE AND SALE AGREEMENT

     

    THIS GUARANTY OF PURCHASE AND SALE
AGREEMENT, dated as of June 18, 2010 (the “Guaranty”), is
executed by OAKSHIRE PROPERTIES
FUND V, LLC, a Delaware limited liability company (the “Guarantor”), and
extended to HILLIARD ALF,
LLC, a Delaware limited liability company (the “Buyer”), for the
benefit of CARRIAGE COURT
HILLIARD, LLC, a Delaware limited
liability company and CARRIAGE
COURT HILLIARD LESSEE, LLC, a Delaware limited liability company (together, the “Seller”).

     

    RECITALS:

     

    WHEREAS, Buyer has agreed to
purchase, and Seller has agreed to sell and cause to be transferred to Buyer, an
assisted living facility known as Carriage Court of Hilliard (the “Facility”), located
at 3570 Heritage Club Drive, Hilliard, Ohio 43026 and real and personal property
associated therewith pursuant to the terms and conditions of that certain
Purchase and Sale Agreement between Seller and Buyer dated of even date herewith
(the “Agreement”).

     

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

     

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

     

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

     

    
      	
              1.

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

            


    

     

    
      	
              2.

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

            


    


    
      
         


      

      
        Exhibit
C-1, Page 1

        
          

        

      

      
         


      

    

     

    
      	
              3.

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

            


    

     

    
      	
              4.

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

            


    

     

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

     

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

     

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


    
      
         


      

      
        Exhibit
C-1, Page 2

        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

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

     

    
      	
              5.

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

            


    

     

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

     

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

     

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

     

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

     

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

     

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

     

    G.             Any
demand for payment under this Guaranty.

     

    
      	
              6.

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

            


    


    
      
         


      

      
        Exhibit
C-1, Page 3

        
          

        

      

      
         


      

    

     

    
      	
              7.

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

            


    

     

    
      	
              8.

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

            


    

     

    
      	
              9.

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

            


    

     

    
      	
              10.

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

            


    


    
      
         


      

      
        Exhibit
C-1, Page 4

        
          

        

      

      
         


      

    

     

    
      	
              11.

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

            


    

     

    
      	
              12.

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

            


    

     

    
      	
              13.

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

            


    

     

    
      	
              14.

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

            


    

     

    
      	
              15.

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

            


    

     

    
      
        	
              	
                to
      Guarantor:

              	
                OAKSHIRE
      PROPERTIES FUND V, LLC

              


      

      
        	
                 
      

              	
                c/o:
      Oakshire Properties Fund V, LLC

              


      

      
        	
                 
      

              	
                Attn:
      Doug Federspiel

              


      

      
        	
                 
      

              	
                402
      E. Yakima Ave., 15th Floor

              


      

      
        	
                 
      

              	
                Yakima,
      WA  98901

              


      

      
        	
                 
      

              	
                Telephone
      No.:  (509) 965-4240

              


      

      
        	
                 
      

              	
                Telecopy
      No.:

              


      

      


      
        	
              	
                with copies
      to:

              	
                Jim
      Wilkinson, President

              


      

      
        	
                 
      

              	
                Wilkinson
      Corporation

              


      

      
        	
                 
      

              	
                402
      E. Yakima Ave., 15th Floor

              


      

      
        	
                 
      

              	
                Yakima,
      WA  98901

              


      

      
        	
                 
      

              	
                Telephone
      No.:  (509) 965-4240

              


      

      
        	
                 
      

              	
                Telecopy
      No.

              


      

    


    
      
         


      

      
        Exhibit
C-1, Page 5

        
          

        

      

      
         


      

    

     

    
      
        	
                 
      

              	
                to
      Buyer:

              	
                HILLIARD
      ALF, LLC

              


      

      
        	
                 
      

              	
                c/o
      Cornerstone Growth & Income REIT,
Inc.

              


      

      
        	
                 
      

              	
                Attn:  Sharon
      C. Kaiser

              


      

      
        	
                 
      

              	
                Chief
      Financial Officer

              


      

      
        	
                 
      

              	
                1920
      Main Street, Suite 400

              


      

      
        	
                 
      

              	
                Irvine,
      CA 92614

              


      

      
        	
                 
      

              	
                Telephone
      No.:  949.263.4326

              


      

      
        	
                 
      

              	
                Telecopy
      No.:    949.250.0592

              


      

      


      
        	
              	
                with copies
      to:

              	
                Servant
      Healthcare Investments, LLC

              


      

      
        	
                 
      

              	
                Attn:
      John Mark Ramsey

              


      

      
        	
                 
      

              	
                1000
      Legion Place, Ste. 1650

              


      

      
        	
                 
      

              	
                Orlando,
      FL 32801

              


      

      
        	
                 
      

              	
                Telephone
      No.:   407.999.7772

              


      

      
        	
                 
      

              	
                Telecopy
      No.:     407.999.7759

              


      

    

     

    and:

    


    
      	
               
      

            	
              Michael
      A. Okaty, Esq.

            


    

    
      	
               
      

            	
              Foley
      & Lardner LLP

            


    

    
      	
               
      

            	
              111
      N. Orange Avenue, Suite 1800

            


    

    
      	
               
      

            	
              Orlando,
      FL 32801

            


    

    
      	
               
      

            	
              Telephone:  407-423-7656

            


    

    
      	
               
      

            	
              Fax:  407-648-1743

            


    

    
      	
               
      

            	
              E-mail:  mokaty@foley.com

            


    

    


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

     

    
      	
              16.

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

            


    

     

    
      	
              17.

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

            


    


    
      
         


      

      
        Exhibit
C-1, Page 6

        
          

        

      

      
         


      

    

     

    
      	
              18.

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

            


    

     

    
      	
              19.

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

            


    

     

    
      	
              20.

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

            


    

     

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

     

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


    
      
         


      

      
        Exhibit
C-1, Page 7

        
          

        

      

      
         


      

    

     

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

     

    
      
        
          	 
      	
                  OAKSHIRE
      PROPERTIES FUND V, LLC,

                
	 
      	
                  a
      Delaware limited liability company

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Its:

                


        

      

    

    


    STATE OF
_____________________

    COUNTY OF
___________________

    


    I HEREBY CERTIFY that on this
day before me, an officer duly authorized in the State and County aforesaid to
take acknowledgements, personally appeared
________________________________________________ who [___] is personally known
to me or [___] produced ___________________ as identification, and that he
acknowledged executing the same, freely and voluntarily, for the uses and
purposes therein expressed.

     

    WITNESS my hand and official
seal in the County and State last aforesaid this ____ day of ________________,
20__.

    


    
      
        
          
            	 
      	 
      
	 
      	
                    Signature
      of Notary

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    Name of Notary (Typed, Printed or
      Stamped)

                  


          

        

      

    

    


    
      
        	 
      	
                Commission
      Number (if not legible on seal):_________

              
	 
      	
                My
      Commission Expires (if not legible on
  seal):__________

              


      

    


    
      
         


      

      
        Exhibit
C-1, Page 8