PURCHASE
AND SALE AGREEMENT


 


By And Among


 


SENTIO-SLR BOSTON PORTFOLIO, LLC,


 


a Delaware limited liability company


 


as
“Buyer”;


 


BAY VIEW OF BOSTON ASSOCIATES LIMITED
PARTNERSHIP


 


a Massachusetts limited partnership


 


as
“Seller”; and


 


STEWART TITLE GUARANTY COMPANY






as
“Escrow Agent”


 


Dated as of


 


September 18, 2013


 




    	 



    	 



    

 


TABLE OF CONTENTS


 





	 	 	Page
	 	 	 
	ARTICLE I TERMINOLOGY	2
	1.1	Defined Terms	2
	1.2	Additional Defined Terms	5
	 	 	 
	ARTICLE II PURCHASE AND SALE	6
	2.1	Property	6
	2.2	Assumption of Liabilities	8
	2.3	Purchase Price	9
	2.4	Earnest Money Deposit	9
	2.5	Adjustment of Purchase Price	9
	2.6	Escrow Agent.	11
	 	 	 
	ARTICLE III DUE DILIGENCE PERIOD	12
	3.1	Due Diligence Period	12
	3.2	Buyer’s Responsibilities	13
	3.3	Continuing Diligence and Inspection Rights	13
	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER	13
	4.1	Organization; Good Standing	13
	4.2	Consent of Third Parties	13
	4.3	Authority; Enforceability	13
	4.4	Absence of Conflicts	13
	4.5	No Judgments	14
	4.6	No Governmental Approvals	14
	4.7	Insurance	14
	4.8	Litigation	14
	4.9	Compliance with Laws	14
	4.10	Environmental Matters	15
	4.11	Assessments	15
	4.12	Property Agreements	15
	4.13	Licenses	15
	4.14	Resident Agreements	15
	4.15	Medicare; Medicaid	16
	4.16	Condemnation	16
	4.17	Condition of Property	16
	4.18	Independent Property	16
	4.19	Full Disclosure	16
	4.20	Utilities Access	17
	4.21	Zoning	17
	4.22	FIRPTA	17
	4.23	Interests; Title	17
	4.24	Title Encumbrances	17
	4.25	Affordable Housing Units	17
	4.26	No New Survey Matters	17


 




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TABLE OF CONTENTS (cont’d)


 


	 	 	Page
	 	 	 
	4.27	Loans	17
	4.28	Patriot Act Compliance	18
	4.29	Broker’s or Finder’s Fees	18
	4.30	Insolvency	18
	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER	18
	5.1	Organization and Good Standing	18
	5.2	Authorization and Binding Effect of Documents	19
	5.3	Absence of Conflicts	19
	5.4	Consents	19
	5.5	Patriot Act Compliance	19
	5.6	Broker’s or Finder’s Fees	19
	5.7	Financial Capacity	19
	 	 	 
	ARTICLE VI OTHER COVENANTS	20
	6.1	Conduct of Business Prior to the Closing	20
	6.2	Notification of Certain Matters	21
	6.3	Title; Additional Documents	21
	6.4	Other Consents	21
	6.5	Inspection and Access	21
	6.6	Confidentiality	22
	6.7	Publicity	22
	6.8	Commercially Reasonable Efforts	22
	6.9	Reports	23
	6.10	Post-Closing Obligations of Seller	23
	6.11	No Other Representations or Warranties	23
	6.12	Noncompetition	23
	6.13	Exclusivity	23
	6.14	Employees	24
	 	 	 
	ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE	24
	7.1	Accuracy of Representations and Warranties; Closing Certificate	24
	7.2	Performance of Agreement	25
	7.3	No Adverse Change	25
	7.4	[Reserved.]	25
	7.5	[Reserved.]	25
	7.6	Title Insurance and Survey	25
	7.7	Other Inspections	27
	7.8	Delivery of Closing Documents	27
	7.9	Licenses	28
	7.10	Termination of Existing Leases & Management Agreements	29
	7.11	Governmental Approvals	29
	7.12	Third-Party Consents	29


 




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TABLE OF CONTENTS (cont’d)


 


	 	 	Page
	 	 	 
	7.15	Management Agreement	29
	7.16	Operating Agreement	29
	 	 	 
	ARTICLE VIII CONDITIONS PRECEDENT TO THE  OBLIGATION OF SELLER TO CLOSE	29
	8.1	Accuracy of Representations and Warranties	29
	8.2	Performance of Agreements	30
	8.3	Delivery of Closing Documents	30
	8.4	Management Agreement	30
	8.5	Operating Agreement	30
	8.6	Mortgage Release	30
	 	 	 
	ARTICLE IX CLOSING	30
	9.1	Closing Date and Place	30
	9.2	Deliveries of Seller	30
	9.3	Deliveries of Buyer	32
	9.4	Closing Costs	32
	 	 	 
	ARTICLE X INDEMNIFICATION	32
	10.1	General	32
	10.2	Indemnification by Seller	33
	10.3	Indemnification by Buyer	33
	10.4	Administration of Indemnification	33
	 	 	 
	ARTICLE XI DEFAULT AND TERMINATION	35
	11.1	Right of Termination	35
	11.2	Remedies upon Default	36
	11.3	Specific Performance	36
	11.4	Obligations Upon Termination	37
	11.5	Termination Notice	37
	11.6	Sole and Exclusive Remedy	37
	 	 	 
	ARTICLE II MISCELLANEOUS	37
	12.3	Further Actions	37
	12.4	Notices	37
	12.5	Entire Agreement	38
	12.6	Binding Effect; Benefits	38
	12.7	Assignment	39
	12.8	Governing Law	39
	12.9	Amendments and Waivers	39
	12.10	Joint and Several	39
	12.11	Severability	39
	12.12	Headings	39
	12.13	Counterparts	39
	12.14	References	40


 




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TABLE OF CONTENTS (cont’d)


 


	 	 	Page
	 	 	 
	12.15	Schedules and Exhibits	40
	12.16	Attorneys’ Fees	40
	12.17	Section 1031 Exchange/Tax Planning	40
	12.18	Casualty	40
	12.19	Condemnation	41
	12.20	Limited Liability	41
	12.21	Survival of Defined Terms	41
	12.22	Time of Essence	42
	12.23	No Third-Party Beneficiary	42
	12.24	WAIVER OF JURY TRIAL	42


  




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	SCHEDULES	 
	 	 
	Schedule 2.1(a)	Excluded Real Property
	Schedule 2.1(h)	Excluded Intellectual Property
	Schedule 2.1A	Excluded Property
	Schedule 2.2(a)	Existing Mortgage
	Schedule 2.2(c)	Assumed Obligations
	Schedule 2.3	Purchase Price Allocation
	Schedule 4.2	Consents of Third Parties
	Schedule 4.4	Conflicts
	Schedule 4.5	Judgments
	Schedule 4.6	Governmental Approvals
	Schedule 4.7	Seller’s Insurance
	Schedule 4.8	Litigation
	Schedule 4.9	Compliance with Laws
	Schedule 4.10	Environmental Matters
	Schedule 4.14	Exceptions to Rent Roll
	Schedule 4.15	Provider Agreements
	Schedule 4.17	Condition of the Property
	Schedule 4.18	Independent Property
	Schedule 4.20	Utilities Access
	Schedule 4.23	Exceptions to Seller Ownership
	Schedule 4.24	Title Encumbrances
	Schedule 4.25	Affordable Housing Units
	Schedule 4.27	Loans
	Schedule 4.29	Broker’s or Finder’s Fees
	Schedule 7.12	Required Consents
	 	 
	EXHIBITS	 
	 	 
	EXHIBIT A	Legal Description of the Property
	EXHIBIT B	List of Required Due Diligence Items for The Property
	EXHIBIT B-1	Due Diligence Items To Be Delivered by 5 Days after Effective Date
	EXHIBIT B-2	Due Diligence Items To Be Delivered by 5 Days Prior to Closing
	EXHIBIT C	List of Property Agreements
	EXHIBIT D	List of Licenses Required for the Property
	EXHIBIT E	Evidence of Zoning for the Property
	EXHIBIT F	Rent Roll
	EXHIBIT G	Form Resident Agreement
	EXHIBIT H	Outstanding Citations
	EXHIBIT I	Form of Management Agreement
	EXHIBIT I-1	Form of Operating Agreement
	EXHIBIT I-2	Form of Bill of Sale
	EXHIBIT J	Form of Audit Letter
	EXHIBIT K	 Form of Guaranty
	EXHIBIT L	 Form of Opinion Letter from Seller’s Counsel
	EXHIBIT L-1	 Form of Opinion Letter from Buyer’s Counsel
	EXHIBIT M	 Form of Pooling Agreement



 



    	 



    	 



    

 


PURCHASE
AND SALE AGREEMENT


 


THIS PURCHASE AND
SALE AGREEMENT (this “Agreement”) is dated the 18th day of September, 2013, by and among: SENTIO-SLR
BOSTON PORTFOLIO, LLC, a Delaware limited liability company, or its successors or assigns (the “Buyer”);
BAY VIEW OF BOSTON ASSOCIATES LIMITED PARTNERSHIP a Massachusetts limited partnership (“Seller”) and
STEWART TITLE GUARANTY COMPANY (the “Escrow Agent”).


 


RECITALS:


 


A.           Seller
owns that certain 39-unit assisted living and memory care facility known as Compass on the Bay located at 1380 Columbia Road, Boston,
Massachusetts and certain real and personal property associated therewith (the “Compass Facility”).


 


B.            Buyer
desires to acquire, and Seller is willing to convey to Buyer, the Compass Facility and certain real and personal property associated
therewith pursuant to the terms described herein.


 


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.


 




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


 


Documents:
This Agreement, all Exhibits and Schedules hereto, 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 6:00 PM Eastern Time on the date which is thirty (30) days
after the Effective Date, during which time Buyer may, at reasonable times with prior notice to Seller, investigate the financial,
legal, operational, environmental and all other aspects of the Property as Buyer may desire. Buyer acknowledges that Seller has
either produced all items requested by Buyer as described on Exhibit B hereto (or Buyer has waived its right to receive
such items), except for those items described on Exhibit B-1 hereto which Seller shall produce for, or make available
to, Buyer within ten (10) days after the Effective Date. Seller shall also produce for Buyer those items listed on Exhibit
B-2 at least fifteen (15) days prior to the Closing.


 


Effective
Date: The date first written above.


 


Equity
Contribution Amount: The funds required to be contributed by Seller to the Buyer pursuant to the Joint Venture Agreement, which
constitutes five percent (5%) of the funds (exclusive of any financing obtained by the Buyer) necessary to consummate the transactions
contemplated by this Agreement. For the avoidance of doubt, the Seller’s Equity Contribution Amount shall be calculated by
(a) determining the total transaction costs associated with Closing the acquisition contemplated by this Agreement, (b) subtracting
any financing obtained by the Buyer, and (c) multiplying the difference by five percent (5%). The Seller’s Equity Contribution
Amount shall be mutually agreed upon by the parties no later than five (5) days prior to the Closing.


 


Existing
Manager: Shall mean Senior Living Residences, LLC.


 


GAAP:
Generally accepted accounting principals 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, officer, employee, or consultant of Seller, including Existing Manager, or any matter which any
such person should have knowledge of upon reasonable inquiry.


 


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 and memory care
facility.


 




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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.


 


Other
Assets: The Resident Agreements, Resident Deposits, Property Agreements, Intellectual Property and all other property and assets
included within the definition of "Property" in Section 2.1 of this Agreement other than Real Property, Personal Property
and Excluded Property.


 


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, (iv) the Existing Mortgages,
and (v) 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 and memory care facility.


 


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 established by Buyer to lease the Property upon purchase by the Buyer. 


 


Title
Insurer:      The Title Insurer is as follows:


 


Stewart Title Guaranty Company


c/o Terrance Miklas

One Washington Mall- Suite 1400


Boston, MA 02108

O 617-933-2415 | M 617-293-8171 | F 617-727-8372

TMiklas@stewart.com


 




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


 


	Agreed Upon Title Defects	Section 7.6(b)
	Agreement	Preamble
	Assumed Obligations	Section 2.2(c)
	Buyer	Preamble
	Cap	Section 10.4(f)
	CERCLA	Section 4.10
	Closing Date	Section 9.1
	Compass Facility	Recital A
	Compass Village Purchase Agreement	Section 11.1(h)
	Earnest Money Deposit	Section 2.4
	Environmental Laws	Section 4.10
	Escrow Agent	Preamble
	Escrowed Funds	Section 2.6
	Existing Mortgage	Section 2.2(a)
	Excluded Property	Section 2.1A
	Floor	Section 10.4(f)
	Guarantor	Section 7.14
	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)
	Mortgage Holder	Section 6.14
	Mortgage Release	Section 6.14
	OFAC	Section 4.28
	Patriot Act	Section 4.28
	Permitted Buyer-Assignee	Section A.12.7
	Permitted Exception	Section 7.6(b)
	Personal Property	Section 2.1(a)
	Post-Closing Adjustment Amounts	Section 2.5(f)
	Preliminary Adjustment Amount	Section 2.5(f)
	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
	Rent Roll	Section 4.14
	Required Cure Items	Section 7.6(b)
	Resident Agreements	Section 2.1(d)
	Resident Deposits	Section 2.1(d)
	SEC	Section 6.6(c)
	Seller	Preamble
	Standish Village Purchase Agreement	Section 11.1(h)
	Survey	Section 7.6(d)
	Title Commitment	Section 7.6(a)
	Title Defect	Section 7.6(b)
	Title Notice	Section 7.6(b)
	Transaction Costs	Section 9.4
	Transition Period Sublease	Section 7.9(c)


 




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ARTICLE II

PURCHASE AND SALE


 


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


 


(a)          Real
Property. All of Seller’s right, title, and interest in and to that certain parcel of real property consisting of land
(“Land”) and all buildings, structures, fixtures and other improvements (“Improvements”)
located thereon. The Land is more particularly described on Exhibit A attached to this Agreement. 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, other than as set forth on Schedule 2.1(a).


 


(b)          Personal
Property. Except as otherwise expressly set forth herein, 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”).


 


(c)          Property
Agreements. 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(c).


 


(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”).


 




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(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 to the extent that same may be legally assignable


 


(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 after the Closing;
provided, however, that all rights, claims and causes of action referred to in this section shall remain the property of Seller
to the extent same relate to, or entitle recovery by Seller as a result of Seller’s ownership of, the Property during the
time period prior to the Closing.


 


(h)          Intellectual
Property. Except as set forth in Schedule 2.1(h), any and all rights of Seller, if any, with respect to the use of (a)
all trade names, trademarks, service marks, copyrights, patents, jingles, slogans, symbols, logos, inventions, computer software,
operating manuals, designs, drawings, plans and specifications, marketing brochures, the “Compass on the Bay”
names, logos, symbols, trademarks and web sites, 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;
provided, however, that except as provided in this Agreement, Seller makes no representation or warranty as to its rights, if any,
in such Intellectual Property, it being intended that Seller convey to Buyer all such rights that Seller may have in the intellectual
property without warranty or representation as to such rights. Buyer acknowledges that an affiliate of Seller owns the service
mark described in U.S. Patent and Trademark Office Reg. Number 4,268,574 (the “Registered Mark”) and that the
Registered Mark is expressly excluded from the Intellectual Property being conveyed by Seller to Buyer; provided, however, that
upon request of Buyer, Seller shall cause a Licensing Agreement in the form as is annexed to Schedule 2.1(h), to
be executed by the holder of the Registered Mark so as to permit Buyer to utilize such Registered Mark in accordance with the Licensing
Agreement.


 


2.1A      Excluded
Assets.   Expressly excluded from the property and assets being conveyed by Seller to Buyer pursuant hereto are (i) cash and
cash equivalents of Seller, (ii) all accounts receivable, and any other receivable or claim of the Seller arising from any action
by Seller prior to the Closing including, but not limited to, providing services to residents, billed and unbilled, recorded or
unrecorded, accrued and existing with respect to services up to the Closing Date; (iii) the personal property listed on Schedule
2.1(A) attached hereto and made a part hereof; (iv) Seller’s bank accounts and intercompany accounts; (v) life insurance
policies, if any, of officers and other employees of Seller or affiliates and other insurance policies relating to the Standish
Facility, including any and all rights of Seller to make claims or receive any proceeds thereunder; (vi) all refunds or credits,
if any, of income taxes and other tax refunds or abatements due to or from Seller and accrued prior to the Closing Date; (vii)
all corporate records of Seller and all financial and tax records of Seller is required to maintain by law; (viii) vehicles, if
any, used in connection with the Standish Facility; (ix) vendor and utility deposits and prepaid expenses including prepaid expenses
relating to insurance and taxes, to the extent that Buyer has not reimbursed Seller for such amounts at the Closing as an Adjustment;
and (x) insurance proceeds and settlements, if any, related to the time prior to the Closing (collectively, the “Excluded
Assets”).


 




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2.1B.      Structure
of Transaction. The parties acknowledge that Seller will be a member of Buyer pursuant to a certain Limited Liability Company
Agreement of Sentio-SLR Boston Portfolio, LLC (the “Joint Venture Agreement”) by and between Seller and Sentio Boston,
LLC (“Sentio”). Although the transaction contemplated by this Agreement is structured so that the Buyer is purchasing
a 100% ownership in the Compass Facility, the substance of the transaction is that notwithstanding the conveyance by the Seller
to the Buyer of the one hundred percent (100%) ownership in the Compass Facility, Seller is retaining a five per cent (5%) ownership
interest in the Compass Facility as a result of its capital contribution to the Buyer pursuant to, and subject to, the provisions
of the Joint Venture Agreement. Accordingly, the parties hereto acknowledge and agree that it is the intention of the parties,
and Seller’s objective, that the conveyance of the Compass Facility by Seller be deemed, for tax purposes: (a) to be a sale
of only a ninety-five per cent (95%) interest (the “Conveyed Interest”) in the Compass Facility; (b) a retention of
a five per cent (5%) interest (the “Retained Interest”) by Seller therein; and (c) a contribution of such Retained
Interest to the Buyer pursuant to the Joint Venture Agreement so as to constitute as to such Retained Interest a tax-deferred contribution
of property to a partnership in exchange for an interest in the partnership (i.e. Seller’s member interest in Buyer) pursuant
to the requirements of Section 721 of the Internal Revenue Code of 1986, as amended. Buyer agrees to cooperate with the Seller,
at no additional cost or expense to Buyer, in structuring the transaction to achieve this objective. Buyer agrees that all funds,
proceeds and other property received by Seller on account of the Conveyed Interest as well as other assets owned by Seller but
not required to be contributed to Buyer pursuant to the Joint Venture Agreement (all such funds, proceeds and other property as
described in this sentence to be referred to as the “Conveyed Interest Proceeds”) may be distributed to Seller’s
members and other persons without any claim whatsoever by Buyer as to such Conveyed Interest Proceeds.


 


2.2          Assumption
of Liabilities.


 


(a)          Buyer
acknowledges that, effective as of the Closing, Buyer shall assume and undertake to pay, discharge, and perform the liabilities
and obligations of Seller from and after Closing and pursuant to the terms of an assumption agreement acceptable to Buyer, under
the existing loans secured by the Property identified on Schedule 2.2(a) (collectively, the “Existing Mortgage”).


 


(b)          Other
than the Existing Mortgage, 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 (i) 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 (ii) any liability for Taxes other than real property taxes from and
after Closing, or (iii) any liability under any Property Agreements, except for the Assumed Obligations listed in Schedule 2.2(c).


 




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(c)          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(c) (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”).


 


2.3          Purchase
Price. The purchase price for the Property shall be an amount equal to ELEVEN MILLION SEVEN HUNDRED THOUSAND AND NO/100 U.S.
DOLLARS ($11,700,000.00), (the “Purchase Price”), plus or minus (whichever is applicable) the Adjustment
Amount, and shall be paid by Buyer to Seller at Closing as follows:


 


(a)     By
the grant to Seller of an equity interest of five percent (5%) in Buyer; and


 


(b)     in
cash via wire transfer of immediately available funds in an amount equal to (i) the Purchase Price, as adjusted, and reduced by
(ii) Seller’s Equity Contribution Amount.


 


Prior to the expiration of the Due Diligence
Period, Buyer and Seller shall agree upon an allocation of the Purchase Price for local, state and federal tax purposes; which
allocation will specify the Purchase Price for the Property by Real Property, Personal Property and Other Assets. The agreed allocation
will be attached to this Agreement in the form shown on Schedule 2.3.


 


2.4          Earnest
Money Deposit. Buyer will, within five (5) days after the Effective Date deposit FIFTY EIGHT THOUSAND FIVE HUNDRED AND NO/100
U.S. DOLLARS ($58,500.00), and, within two (2) business days after the expiration of the Due Diligence Period so long as Buyer
has not terminated this Agreement, an additional FIFTY EIGHT THOUSAND FIVE HUNDRED AND NO/100 U.S. DOLLARS ($58,500.00) (the “Earnest
Money Deposit”) with Escrow Agent. The Earnest Money Deposit will be refunded to Buyer if Buyer terminates this Agreement
prior to the expiration of the Due Diligence Period as permitted under Section 11.1(a). After the expiration of the Due Diligence
Period, the Earnest Money Deposit will be non-refundable to Buyer and will be paid to Seller if this Agreement is terminated for
any reason other than Buyer's termination of this Agreement under Section 11.1(b), Section 11.1(c), Section 11.1(e),
Section 11.1(f) or Section 11.2(a)(i). 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;



 


		(ii)	The amount of Accrued Employee Benefits;



 




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



 


		(iv)	Real property taxes, which for the fiscal year 2014 shall
be pro-rated based upon the actual year fiscal 2014 tax amounts, if available, and if not, available, then upon the actual assessed
value for fiscal year 2014, but to the extent the actual assessed value for fiscal year 2014 is unavailable, the actual assessed
value for fiscal year 2013 and applying either (a) the fiscal year 2014 tax rate if known, or (b) to the extent the fiscal year
2014 tax rate is unavailable, the fiscal year 2013 tax rate. Should actual taxes for the current year vary from estimated taxes,
each party shall have the right to demand and receive from the other a re-proration of taxes and reimbursement for the prorated
amount or variation thereof. Any capital expenditure escrow accounts held by the Mortgage Holder and related to the Existing Mortgage.



 


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.


 


(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) or transfer
such resident escrow or trust account under any Property Agreement to Buyer, whereupon Buyer shall be solely responsible for such
resident escrow or trust account so transferred to Buyer. With respect to any cash security or other deposits actually held by
Seller pursuant to the Property Agreements (i.e., other than amounts held in a resident escrow or trust account), at Closing, Seller
shall credit Buyer for all such deposits (to the extent such security or other deposits have not been applied against delinquent
amounts owing under such Property Agreements as provided therein).


 


(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.


 




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(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
(such amount, the “Preliminary Adjustment Amount”). 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. Any amounts due under this Section 2.5
after the Closing shall be referred to as the “Post-Closing Adjustment Amounts”. 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, if any, and any other obligations as otherwise
expressly agreed by the Buyer and Seller.


 


(h)          This
Section 2.5 shall survive the Closing.


 


2.6         Escrow
Agent.


 


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


 




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


 


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


 


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


 


ARTICLE III

DUE DILIGENCE PERIOD


 


3.1          Due
Diligence Period. During the Due Diligence Period, Buyer shall have the right to a complete physical inspection of the Property
as the Buyer deems appropriate to review and evaluate the Property, the nature and extent of the Property, and operations of the
Property, and all rights and liabilities related thereto. In consideration of the execution of this Agreement, Seller 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,
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 acknowledges receipt as of the date hereof of all
items listed on Exhibit B, other than those items listed on the attached Exhibit B-1. Buyer may request
that other items be provided by Seller in addition to those specifically listed in Exhibit B, which items shall be
mutually agreed upon by the Buyer and Seller in their reasonable discretion; provided, however, that neither Buyer’s request
for such additional items nor Seller’s agreement to provide those additional items shall extend or enlarge the Due Diligence
Period. 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. In the course of its investigation of the Property, Buyer may make inquiries to third parties
such as Existing Manager, parties to Property Agreements and municipal, local and other government officials and representatives;
provided that Buyer shall not contact any parties to Property Agreements (other than the applicable Seller or the Existing Manager)
without Seller’s prior written consent (not to be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing,
Buyer may contact and file permit applications with any governmental authorities required to obtain the permits and approvals described
in Section 7.8(a) hereof. Seller shall cooperate with Buyer’s due diligence during normal business hours so long as Buyer
gives at least twenty-four (24) hours’ notice to Seller, conducts such due diligence during normal business hours and is
not disruptive to the operation of Seller’s business at the Property.


 




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


 


3.3          Continuing
Diligence and Inspection Rights. Following the expiration of the Due Diligence Period, and prior to the Closing or any earlier
termination of this Agreement, at reasonable times and upon reasonable notice, Buyer or Buyer’s agent(s), consultants, or
other retained professionals shall have the right, at Buyer’s expense, to perform or complete such further inspections and
assessments of the Property as Buyer deems necessary or desirable to comply with Buyer’s internal requirements or the requirements
of Buyer’s lenders, investors, or members, including, without limitation, further inspection of environmental and structural
aspects, assessments of the compliance of the Property with all Applicable Laws, and customary pre-closing walk-throughs. Notwithstanding
the foregoing, all such inspections and assessments by Buyer shall be subject to the terms and conditions of Section 3.2
above and shall not extend Buyer’s rights to terminate this Agreement pursuant to Section 11.1(a) hereof.


 


ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER


 


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


 


4.1          Organization;
Good Standing. Seller is validly existing and in good standing under the laws of the State of Massachusetts, 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. Seller has the full right, power
and authority and has obtained any and all consents required to enter into this Agreement, all of the documents to be delivered
by Seller at the Closing and to consummate or cause to be consummated the transactions contemplated hereby.


 


4.2          Consent
of Third Parties. Except for the approval of the “Lender” and “HUD” (as those terms are defined in
Schedule 2.2(a) hereof under the Existing Mortgage and except as otherwise set forth on Schedule 4.2, no consent or approval
of any third party is required as a condition to the entering into, performance or delivery of this Agreement by Seller other than
such consent as has been previously obtained.


 


4.3          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.


 




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4.4          Absence
of Conflicts. Subject to obtaining the consents and approvals under the Existing Mortgage and as described on Schedule 4.2
and the payment in full of the existing mortgage on the Property at the Closing, 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, 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 set forth on Schedule 4.6, No order, permission, consent, approval, license,
authorization, registration or validation of, or filing with, or exemption by, any governmental agency, commission, board
or public authority is required to authorize, or is required in connection with the execution, delivery and performance by Seller
of this Agreement or the taking of any action contemplated by this Agreement, which has not been obtained.


 


4.7          Insurance.
Schedule 4.7 sets forth an accurate summary of all general liability, fire, theft, professional liability and other insurance
maintained with respect to the Property, currently and for the last three (3) years. Neither Seller, nor to Seller’s Knowledge,
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.
Seller shall provide Buyer with current loss runs within fifteen (15) days after the end of each month from the Effective Date
until the Closing. Prior to Closing Seller will promptly notify Buyer of any potential losses or claims that may be covered by
the insurance of which Seller has Knowledge.


 


4.8          Litigation.
Except as set forth on Schedule 4.8, 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)
to which Seller or the Property is a party, including without limitation, litigation brought by Seller against any third party.


 


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


 




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4.10        Environmental
Matters. Neither Seller nor Existing Manager has generated, stored or disposed of any hazardous substance at or on the Property,
and, except as set forth in Schedule 4.10, Seller has no 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, to Seller’s Knowledge, 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, to Seller’s Knowledge, 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 without limitation.


 


4.11        Assessments.
There are no special or other assessments for public improvements or otherwise now affecting the Property, now 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 C hereto 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 D attached hereto is a true and complete list of all Licenses held by the Seller. The Licenses listed on
Exhibit D are valid and to Seller’s Knowledge no material violations exist with respect to such Licenses. To
Seller’s Knowledge, 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 and memory care 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
H.


 


4.14        Resident
Agreements. Except as otherwise noted on Schedule 4.14, the rent roll attached hereto as Exhibit F (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 hereto as Exhibit
G. Seller is not in default under any of its material obligations under any Resident Agreement or any lease, and, except
as set forth on the Rent Roll, Seller has no Knowledge of any material default on the part of any other party thereto. All of the
Resident Agreements identified on the Rent Roll are currently in full force and effect as of the date of the Rent Roll.


 




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4.15        Medicare;
Medicaid. Except as set forth in Schedule 4.15, no portion of the income from any Property is attributable to Medicare,
Medicaid or any public or private third party payor or other program, except for certain payment from private insurers pursuant
to long-term care policies. To Seller’s Knowledge, all billing practices of Seller and Existing Manager with respect to private
insurance companies have been in compliance with all Applicable Laws.


 


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


 


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


 


4.18        Independent
Property. Except as described on Schedule 4.18, 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. 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        Full
Disclosure. To the Seller’s Knowledge, none of the representations or warranties in this Agreement by Seller, any descriptive
information concerning the Property set forth in this Agreement, or any Schedule or Exhibit attached hereto and referenced
herein contains any untrue statement of a fact or omits to state a fact necessary to make the statements of fact contained therein
not misleading.


 




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4.20        Utilities
Access. Except as described on Schedule 4.20, the Real Property has adequate water supply, storm and sanitary sewer
facilities, adequate access to telephone, gas and electricity connections, adequate fire protection,
drainage, means of ingress and egress to and from public highways and, without limitation, other public utilities. Except as described
on Schedule 4.20, 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 has no Knowledge of any fact or condition existing that
would result or could result in the termination or reduction of the current access from the Property to the existing roads and
highways or to sewer or other utility services presently serving the Property.


 


4.21        Zoning.
Except as provided on Schedule 4.9, 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. Evidence
of such compliance for the Property is contained on Exhibit E.


 


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


 


4.23        Interests;
Title. Except as described on Schedule 4.23, Seller owns one hundred percent (100%) of the ownership interest in the
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.


 


4.24        Title
Encumbrances. Except as described on Schedule 4.24, 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.


 


4.25        Affordable
Housing Units. Except as described on Schedule 4.25, 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. Except as described on Schedule 4.25, the Property
is not required to lease or reserve any unit or bedroom as an affordable housing unit or bedroom or for low-income or moderate-income
residents pursuant to a presently existing agreement or Applicable Law.


 


4.26        No
New Survey Matters. Since the dates of the most recent surveys for the Real Property (complete and accurate copies of which
have been or will be provided to Buyer pursuant to Section 7.6(d)), to Seller’s Knowledge, no new survey matters have
arisen in connection with the Real Property which would otherwise be required under the applicable ALTA/ACSM standards to be shown
thereon.


 


4.27        Loans.
Except for the Existing Mortgage, and as otherwise described on Schedule 4.27, there are no loans secured by the Property.


 




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4.28        Patriot
Act Compliance. 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.


 


4.29        Broker’s
or Finder’s Fees. Except as provided on Schedule 4.29, no agent, broker, investment banker or other person or
firm acting on behalf of or under the authority of Seller or any Affiliate of Seller is or will be entitled to any broker’s
or finder’s fee or any other commission or similar fee, directly or indirectly, in connection with the transactions contemplated
by this Agreement. This Section 4.29 shall survive the Closing or the expiration or any termination of this Agreement.


 


4.30        Insolvency.
Neither Seller nor any of its Affiliates have, and to Seller’s Knowledge, Existing Manager has 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 non-judicial 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.


 


ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER


 


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


 


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


 




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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 or operating agreement of Buyer and/or its Affiliates, any indenture,
mortgage, lease, loan agreement or other agreement or instrument to which Buyer and/or its Affiliates is bound or affected, or
any Applicable Law to which Buyer and/or its Affiliates is subject.


 


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


 


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


 


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


 


5.7          Financial
Capacity. Buyer represents and warrants that Buyer, or an Affiliate thereof, has the requisite financial capacity to complete
the transactions contemplated hereby and to pay to Seller all amounts due hereunder.


 




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5.8          Suitability.   Buyer
has no Knowledge of any facts that would deem it not suitable or qualified to own or operate the Standish Facility or obtain all
licenses and governmental approvals with respect thereto.


 


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 D.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




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(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. If, prior to Closing, either Buyer or Seller obtains Knowledge of any matter
that causes the representations or warranties of the other party contained in this Agreement to be untrue or inaccurate in any
material respect, such party shall promptly notify the other party thereof in writing.


 


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 in existence and assignable or transferable, relating to the Property shall be transferred by Seller to, and shall
be held and owned by, Buyer. The acceptance of the deed by the Buyer or its nominee as the case may be, shall be deemed to be a
full performance and discharge of Sellers obligations hereunder with regard to delivery of Title to the Property as required by
this Agreement.


 


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


 


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


 




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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, attorneys, accountants, consultants, other advisers, representatives
and agents, or as otherwise required by Applicable Law. Buyer and Seller further agree that if the transactions contemplated hereby
are not consummated and this Agreement is terminated, each will return all such documents and instruments and all copies thereof
in their possession to the other party. This Section 6.6(a) shall only survive Closing as to Seller (and not Buyer) but
shall survive as to both Seller and Buyer in the event this Agreement is terminated prior to 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, the Buyer’s potential investors or
lenders, and as required by Applicable Law or by Section 7.9 without such prior written consent. This
Section 6.6(b) shall survive Closing and shall survive in the event this Agreement is terminated prior to Closing with
respect to the Seller. 


 


(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.
Seller agrees that no public release or announcement concerning the transactions contemplated hereby shall be issued by any party
without the prior written consent of Buyer, except as required by Applicable Law.


 


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.


 




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


 


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


 


6.11        No
Other Representations or Warranties.


 


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


 


(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.
After 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 a period of two (2) years after the Closing. For purposes of this Section 6.12, the term “competitive
business or enterprise” shall mean a nursing home, continuing care, memory care or assisted living facility. This Section
6.12 shall survive Closing. Buyer does acknowledge and consent to Seller’s Affiliate’s ownership and operation
after the Closing of the property known as “Compass on the Bay”, located at 1380 Columbia Road, Boston, Massachusetts,
and further agrees that the ownership and operation of that property shall not be deemed a breach of this Section 6.12.


 


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.


 




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6.14 Existing Mortgages.
The parties shall use their respective commercially reasonable efforts and cooperate with each other to obtain from the current
holder (the “Mortgage Holder”) of the Existing Mortgage approval of Buyer’s assumption of the Existing
Mortgage at Closing and a full release (the “Mortgage Release”) of Seller as of the Closing Date from all obligations
under the Existing Mortgage arising from and after Closing (the “Released Mortgage Obligations”), including
by cooperating with the Mortgage Holder’s requests for due diligence information and legal opinions, to the extent reasonable
and customary. Notwithstanding anything in this Agreement to the contrary, from and after the Effective Date, Buyer shall be permitted
to discuss the assumption of the Existing Mortgage and the Mortgage Release directly with the Mortgage Holder. Buyer shall contact
the Mortgage Holder regarding, and apply for approval of, the assumption of the Existing Mortgage no later than ten (10) business
days after the Effective Date. Buyer shall be responsible for paying all fees, costs and expenses related to the assumption of
the Existing Mortgage and the Mortgage Release, including all assumption fees and costs charged by the Mortgage Holder, but specifically
excluding the fees and expenses of Seller’s counsel and other advisors, which fees and expenses shall be the sole responsibility
of Seller. The immediately prior sentence shall survive termination of this Agreement.


 


6.14        Employees.
To the extent that Seller has employees, the Buyer or its designee has the right, but not the obligation, to make offers of employment
to all of the employees of the Seller to commence effective upon the Closing. Seller agrees to terminate all employees who accept
employment with Buyer or its designee as of the Closing and shall satisfy all accrued payroll and benefits obligations thereto
as of the Closing other than the Accrued Employee Benefits. Buyer acknowledges that Seller has disclosed to Buyer that as of the
Effective Date, Seller has no employees.


 


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 shall be deemed to include only that information contained therein on the date such Schedules and Exhibits
are acknowledged pursuant to Section 12.15, and shall be deemed to exclude any information disclosed to Buyer pursuant to
Section 6.2 or otherwise.


 




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


 


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


 


7.4          [Reserved.]


 


7.5          [Reserved.]


 


7.6          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 7.6(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 earlier
of five (5) days before 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, within ten (10)
days after receipt of any such Title Notice, notify Buyer whether Seller will take the action necessary to remove the Title Defects.
On or before the Closing, Seller shall provide Buyer with reasonable evidence of removal of the items it notifies Buyer that it
will cure (the “Agreed Upon Title Defects”). 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): (w) 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 (x) all mortgages, security deeds,
and other security instruments, except for the Existing Mortgages, (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) the Agreed Upon Title Defects specified 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 five (5) 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 amount reasonably necessary but not to exceed $250,000.00
to cure the items set forth in Section 7.6(b)(w) above, or $100,000.00 to cure any Agreed Upon Title Defects other than Required
Cure Items (such amounts so paid to be hereinafter referred to as the “Cure Amount”), and deduct such Cure
Amount from the Purchase Price; or



 


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



 


Notwithstanding the foregoing,
nothing contained in section shall limit the right of the Buyer to pursue any and all remedies provided in Section 11.2
of this Agreement as a result of Seller’s default; provided, however, that the inability of Seller, having used commercially
reasonable efforts to cure Title Defects or Required Cure Items other than monetary encumbrances shall not be deemed to be a breach
by Seller of this Agreement.


 




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(d)          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) for the Existing Mortgage, 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 otherwise 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. Buyer acknowledges that instruments discharging mortgages and other monetary encumbrances may be recorded after the Closing
in accordance with conveyancing practices customary in Boston, Massachusetts.


 


(e)          Seller
has provided Buyer with a copy of the most recent existing boundary survey 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.
Buyer acknowledges that it has received delivery of the survey entitled “Land Title Survey in Boston, MA (South Boston) Prepared
for Bay View of Boston Associates, L.P., 1380 Columbia Road Boston, Massachusetts 02127” by Hancock Associates with most
recent update February 28, 2012 as well as the Surveyor’s Report with Surveyor’s Report Addendum dated February 28,
2012 and deems the matters shown thereon as acceptable to Buyer. At Closing, the Title Insurer shall be prepared to issue a title
insurance policy in accordance with the Title Commitment, with all endorsements reasonably required by Buyer and with coverage
over any “gap” period.


 


(f)           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.


 


7.7          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.


 


7.8          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.


 




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7.9          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 D 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 Post-Closing
Licensee shall diligently pursue all required Licenses. If any Licenses cannot be obtained by the Post-Closing Licensee at or prior
to the Closing Date other than due to the fault of Buyer, Buyer shall have the right to extend the Closing until the earlier of:
(i) ten (10) business days after the procurement of such Licenses; or (ii) for a period of one hundred eighty (180) days.


 


(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 performance 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 as a result of the existence of such matters described
in Section 7.9 (b)(i) or (ii), 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) but only if there exists such matters as are described in Section 7.9 (b)(i) or (ii).


 


(c)          If
any of the Licenses cannot be obtained by the Post-Closing Licensee at or prior to the Closing, alternative arrangements that are
reasonably satisfactory to Buyer, Seller, and Tenant shall have been implemented to assure that the Post-Closing Licensee shall,
to the extent permitted by Applicable Laws, rules and regulations, have the benefit of such Licenses, and Seller and the Post-Closing
Licensee shall cooperate and use their respective commercially reasonable efforts to obtain the Licenses for the Post-Closing Licensee
or to complete the transfer and assignment of the Licenses by Seller, whichever is applicable, as contemplated in the foregoing
sentences promptly after the Closing. For example, but not by way of limitation, in the event the required Licenses have not been
transferred, issued or re-issued as of the Closing with respect to the Property, as required by Applicable Law and regulations,
Seller, Tenant and the Buyer shall enter into a sublease (the “Transition Period Sublease”), on terms and conditions
mutually acceptable to the parties thereto, so that the Property may continue to be operated on and after the Closing pending the
transfer, issuance or re-issuance of such required Licenses. This subsection shall survive the Closing until the earlier to occur
of (i) the issuance of the Licenses to Buyer or Tenant, or (ii) the termination of the Transition Period Sublease, if any.


 


(d)          Sections
7.9(a) and (b) shall survive Closing.


 




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


 


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


 


7.12        Third-Party
Consents. Seller shall have obtained the consents to assignment, waivers and similar instruments described on Schedule 7.12
hereto, which schedule shall be agreed upon and completed by the parties prior to the expiration of the Due Diligence Period.


 


7.13        Loan
Assumption Approval. Buyer shall have obtained approval for assumption of the Existing Mortgage on terms that are reasonably
acceptable to Buyer on terms that, in the aggregate are substantially similar to the current terms of the Existing Mortgage, other
than interest rates, which shall reflect current market rates and Buyer’s credit profile and which shall include the Mortgage
Release.


 


7.14        Guaranty.
The Seller shall have caused Senior Living Residences, LLC (the “Guarantor”) to execute and deliver and 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 K to this Agreement (the “Guaranty”).


 


7.15        Management
Agreement. No later than ten (10) days after the Effective Date, Buyer and Manager shall have entered into that certain agreement
(the “Management Agreement”) for the continued management of the Property by the Manager, in the form set forth
as Exhibit I hereto.


 


7.16        Joint-Venture
Agreement. No later than Closing, Buyer, or its designee, and Seller, or its designee, shall have entered into the Joint Venture
Agreement governing the operation of Buyer in the form set forth as Exhibit I-1 hereto.


 


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.


 




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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.


 


8.4          Management
Agreement. No later than ten (10) days after the Effective Date, Buyer and Manager shall have entered into the Management Agreement.


 


8.5          Operating
Agreement. No later than Closing, Buyer, or its designee, and Seller, or its designee, shall have entered into the Joint Venture
Agreement.


 


8.6        
Mortgage Release. The Mortgage Holder shall have agreed to the Mortgage Release on terms that are reasonably acceptable
to Sellers.


 


ARTICLE IX

CLOSING


 


9.1          Closing
Date and Place. The Closing shall take place on the date which is five (5) business days following the satisfaction
of all conditions to Closing contained in ARTICLE VII and ARTICLE VIII, 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”) but in no event later
than February 28, 2014. 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.


 


(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
quitclaim deed and a bill of sale (with general warranty of title but disclaimers of warranty other than as to title) in the form
of bill of sale as is annexed hereto as Exhibit I-2 and other instruments of transfer and conveyance transferring the Property
held or owned by Seller (or Seller’s Affiliates) to Buyer free of all Liens other than the Permitted Exceptions and Permitted
Liens.


 




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(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 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 hereto as Exhibit L, regarding the due organization, good standing,
power and authority, and due execution of this Agreement and all other Documents by Seller.


 


(j)           Assurance
from the appropriate regulatory officials confirming that the Licenses listed on Exhibit D are all that is required
to operate the Property as an assisted living and memory care facility in the State of Massachusetts, that there are no material
violations or defaults under such Licenses, and that the sale of the Property will not cause such Licenses to be revoked.


 


(k)          A
Transition Period Sublease, if applicable, duly executed by Seller.


 


(l)           Any
audited, historical financials and any representation from Seller related to matters related thereto (including, without limitation
a representation that such audited financials have been prepared in accordance with GAAP) required to allow the Buyer to comply
with any reporting, discloser, or filing requirements imposed upon the Buyer by the Securities and Exchange Commission with respect
to the transactions contemplated by this Agreement. Additionally, Seller shall provide Buyer, but without expense to Seller, with
(a) an audit letter in substantially the form as Exhibit J attached hereto 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.


 


(m)         A
Pooling Agreement, in the form attached hereto as Exhibit M, duly executed by Seller and its Affiliates.


 


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


 




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


 


(a)          The
Purchase Price in accordance with Section 2.3, subject to the adjustments under Section 2.4.


 


(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)           Opinions
from counsel for Buyer in the form attached hereto as Exhibit L-1, regarding the due organization, good standing,
power and authority, and due execution of this Agreement and all other Documents by Buyer.


 


(g)          A
Pooling Agreement, in the form attached hereto as Exhibit M, duly executed by Buyer and its Affiliates.


 


(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 (b) broker fees and commissions
engaged by such party, respectively, and (c) except as set forth below, due diligence costs. Notwithstanding anything herein to
the contrary, Seller and Buyer shall equally share the cost of all transfer, conveyance, intangible, and documentary stamp taxes,
all costs of the Title Insurer to insure title, and the cost of owner’s title insurance policies (collectively, the “Transaction
Costs”).


 


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.


 




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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, 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 Seller of any of its representations, warranties, covenants or agreements in this Agreement or any other Document;
and


 


(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.


 


(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
ownership, operation or control of the Property after the Closing, including the Assumed Obligations, but excluding any obligations,
indebtedness or liabilities to the extent of any Adjustment Amount credited to Seller.


 


(c)          Claims
by any party other than the person(s) designated on Schedule 4.29 claiming to have represented Buyer or Seller as broker
or agent in connection with the transactions contemplated by this Agreement.


 


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.


 




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(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 or delayed. If, however, (x) the claim, action, suit or proceeding would, if successful, result in the imposition of damages
for which the Indemnifying Party would not be solely responsible, or (y) representation of both parties by the same counsel would
otherwise be inappropriate due to actual or potential differing interests between them, then the Indemnifying Party shall not be
entitled to assume the entire defense and each party shall be entitled to retain counsel who shall cooperate with one another in
defending against such claim. In the case of clause (x), the Indemnifying Party shall be obligated to bear only that portion of
the expense of the Indemnified Party’s counsel that is in proportion to the damages indemnifiable by the Indemnifying Party
compared to the total amount of the third-party claim against the Indemnified Party. In the case of clause (y), the Indemnifying
Party shall pay all costs of defense of both itself and the actual out-of-pocket costs of the Indemnified Party.


 


(c)          If
the Indemnifying Party does not choose to defend against a claim by a third party, the Indemnified Party may defend in such manner
as it deems appropriate or settle the claim (after giving notice thereof to the Indemnifying Party), provided that no settlement
shall be made, and no judgment consented to, without the prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld or delayed. 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 indefinitely.


 




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(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 TWENTY FIVE THOUSAND and No/100
U.S. Dollars ($25,000.00) (the “Floor”), provided, however, that the foregoing limitation shall
not apply in the case of fraud on the part of Buyer, Seller or any of their respective Affiliates, or to any claims arising under
Section 10.2(b), Section 10.2(c), Section 10.3(b) or
Section 10.3(c), (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.


 


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;
or


 


(b)          By
written agreement of Seller and Buyer; or


 


(c)          By
Buyer if, as of the Closing or such earlier date as specified in this Agreement, all conditions in ARTICLE VIII, other than Section
8.4 and/or 8.5, have been met, but all conditions in ARTICLE VII have not been met, or as specifically provided
for in Sections 7.6, 11.2(a), 12.18 and 12.19; provided, however, that nothing contained in this Section
11.1(c) shall limit Buyer’s rights pursuant to Section 11.2 below in the event that Seller is in default;


 


(d)          By
Seller if, as of Closing or such earlier date as specified in this Agreement, all conditions in ARTICLE VII, other than
Section 7.15 and/or 7.16, have been met but all conditions in ARTICLE VIII have not been met or 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 in the event that Buyer is in default; 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.


 


(f)           By
Buyer if Buyer obtains Knowledge of any matter that causes any material representation or warranty of the Seller contained herein
to be untrue or inaccurate in any material respect; provided, however, that prior to termination Buyer gives written notice to
Seller specifying the material representation or warranty of the Seller contained herein that Buyer alleges to be untrue or inaccurate
in any material respect.


 




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(g)          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.


 


(h)          In
addition to this Agreement, Buyer and Standish Village Oaktree SLR, LLC, an affiliate of Seller, have also executed that certain
Purchase and Sale Agreement dated as of the Effective Date for the purchase of that certain facility known as “Standish Village”
(the “Standish Village Purchase Agreement”). Any default hereunder shall be deemed a default under the Standish
Village Purchase Agreement and any default under the Standish Village Purchase Agreement shall be deemed a default under this Agreement.


 


11.2        Remedies
upon Default.


 


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


 


		(i)	If specific performance is unavailable, terminate this
Agreement, receive a refund of the Earnest Money Deposit and 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
and receive the Earnest Money Deposit as liquidated damages.


 


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 12.16.


 




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


 


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


 


11.6        Sole
and Exclusive Remedy. Seller and Buyer each acknowledge and agree that prior to the Closing, such party’s sole and exclusive
remedy with respect to any and all claims made prior to the Closing for any breach or liability under this Agreement or otherwise
relating to the subject matter of this Agreement and the transactions contemplated hereby shall be solely in accordance with, and
limited to, Sections 2.4, 11.1, 11.2 and 11.3. The foregoing shall in no manner limit the rights and
obligations of the parties provided in ARTICLE X from and after the Closing. In addition, in no event shall the provisions
of this ARTICLE XI limit the non-prevailing party’s obligation to pay the prevailing party’s attorneys’
fees and costs pursuant to Section 12.16 hereof.


 


ARTICLE II

MISCELLANEOUS


 


12.3        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.


 


12.4        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) or sent by registered or certified
mail, first class, postage prepaid, addressed as follows:


 


If to Seller,
to:


 


Bay View of Boston
Associates Limited


Partnership, LLC

c/o
Robert F. Larkin and


Peter G. Mullin


Senior Living Residences,
LLC


388 East Eighth Street


South Boston, MA 02127


Telephone: 617-269-3757


Facsimile: 617.268.1380


E-mail: PMullin@slr-usa.com


 




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with copies to:


 


Mark J. Coltin, Esq.


101 Merrimac Street, Suite 810


P.O. Box 9601


Boston, MA 02114-9601


Telephone: 617-482-0060


Facsimile: 866-508-2524


Email: mark@coltinlaw.com


 


If to Buyer, to:


 


SENTIO-SLR BOSTON
PORTFOLIO, LLC


Attn: John Mark Ramsey


Attn: Scott Larche


189 S. Orange Ave., Suite 1700


Orlando, Florida 32801


Telephone: 407-999-2426


Fax: (407) 999-5210


 


with copies
to:


 


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


 


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, and (iii) if so delivered by courier, on the date received.


 


12.5        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.


 


12.6        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.


 




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12.7        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.


 


12.8        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 Suffolk County,
Massachusetts.


 


12.9        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.


 


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


 


12.11      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.


 


12.12      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.


 


12.13      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.


 




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12.14      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.


 


12.15      Schedules
and Exhibits. Each Schedule and Exhibit 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. The Schedules and Exhibits not attached hereto as of the Effective
Date will be prepared and mutually agreed to by the parties within five (5) business days of the Effective Date. The parties agree
to cooperate and act in good faith during the preparation of such documents.


 


12.16      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 12.16, “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.


 


12.17      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.


 


12.18      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 12.18.
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
12.18 shall survive the expiration or any termination of this Agreement.


 




    	40



    	 



    

 


12.19      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 12.19, 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 12.19 shall survive the expiration or any termination of this Agreement.


 


12.20      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.


 


12.21      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.


 




    	41



    	 



    

 


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


 


12.23      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.


 


12.24      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.


 


(The remainder of this page is intentionally
left blank.)


 




    	42



    	 



    

 


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


 





	BUYER:	 	SELLER:
	 	 	 	 	 
	SENTIO-SLR BOSTON PORTFOLIO, 	 	BAY VIEW OF BOSTON
	LLC	 	ASSOCIATES LIMITED
	a Delaware limited liability company	 	PARTNERSHIP
	 	 	 	 	 
	 	 	 	By its General Partner
	By:	/s/ John Mark Ramsey	 	SENIOR LIVING RESIDENCES, INC.
	Name: John Mark Ramsey	 	 	 
	Title: Authorized Signatory	 	By: 	/s/ Robert F. Larkin
	 	 	 	Name: Robert F. Larkin, Jr.
	 	 	 	Title: President and Treasurer
	 	 	 	 	 
	 	 	 	ESCROW AGENT:
	 	 	 	 	 
	 	 	 	Stewart Title Guaranty
	 	 	 	Company
	 	 	 	 	 
	 	 	 	By: 	/s/ Joseph P. Sullivan
	 	 	 	Name: Joseph P. Sullivan
	 	 	 	Title: Underwriting Counsel







 







    	 



    	 



    

 


Schedule 2.1(a)


Excluded Real Property


 


None.


 




    	2



    	 



    

 


Schedule 2.1(h)


Excluded Intellectual Property


 


The service mark, owned
by an affiliate of Seller, described in U.S. Patent and Trademark Office Reg. Number 4,268,574 (the “Registered Mark”)
referring to “Compass Memory Support” as well as the right to use the word, “Compass”, in connection with
rental and management of housing to persons with memory impairment and related conditions.


 




    	3



    	 



    

 


Schedule 2.1A


Excluded Property


 


None.


 




    	4



    	 



    

 


Schedule 2.2(a)


Existing Mortgage


 


The term, “Existing
Mortgage” is defined as follows: The loan (the “Loan”) evidenced by Promissory Note dated as of March 1, 2012
in the original principal amount of $4,010,200.00 given by Bay View of Boston Associates Limited Partnership, a Massachusetts limited
partnership with an address of 1380 Columbia Rd., Boston, MA 02127 (“Seller”) to Love Funding Corporation, a Virginia
corporation, with a place of business at 1250 Connecticut Ave., Northwest, Suite 310, Washington, DC 20036 (“Lender”)
as secured by Mortgage given by Seller to Lender dated as of March 1, 2002 recorded with the Suffolk Registry District of the Land
Court as Document Number 201200801803 noted on Certificate of Title Number 107145, Book 531, Page 145, and at the Suffolk County
Registry of Deeds, Book 49284, Page 284. The Loan is insured by the U. S. Department of Housing and Urban Development (“HUD”)
pursuant to the National Housing Act, as amended, is subject to such contractual and other requirements imposed by HUD and the
Lender in connection with all documents executed and delivered by Seller in connection with the closing of the Loan, including,
but not limited to, a certain Regulatory Agreement for Multifamily Housing Projects executed by Seller, dated March 1, 2012 and
recorded with the Suffolk County Registry of Deeds, Book 49284, Page 292, as well as all statutes, rules and regulations with regard
to HUD insured loans such as the Loan. Reference is hereby made to the closing binder with regard to the Loan, which has been produced
to Buyer


 




    	5



    	 



    

 


Schedule 2.2 (c )


 


Assumed Obligations


 


		1.	Proia Snow Removal and Landscaping Services



 


		2.	Tyco Fire Alarm System Inspection Agreement



 


		3.	Simplex Grinnel (Tyco) Fire Suppression Equipment
Maintenance Agreement



 


		4.	ADT Security Camera Service Agreement



 


		5.	Dictronics Copier lease



 


		6.	Avaya Business Communications Telephone Equipment
Lease



 


		7.	Touchtown TV Activities Electronic Bulletin Board



 


		8.	Air Duct Services and Restoration Maintenance Agreement
(Kitchen Hood cleaning)



 


		9.	Pest Control Agreement – Waltham Services,
Inc.



 


		10.	Mass. Waste Rubbish Removal Contract



 


		11.	Power Products Electric Generator Maintenance and
Testing Contract



 


		12.	Health Care Insights, LLC Nutrition Counseling
Agreement



 


		13.	Comcast of Boston Cable Communications Cable TV
Agreement



 


		14.	Steri-Safe Medical Waste Removal Service Agreement



 


		15.	Residency Agreements in effect at time of closing



 


		16.	Harbor PACE (Elder Service Plan)



 


		17.	Existing Mortgage (see Schedule 2.2(a) which is
incorporated herein by reference)



 


		18.	Lawhorn Irrigation equipment service contract



 


		19.	Med Assets Group Purchasing Agreement



 


		20.	Wind River kitchen grease trap servicing contract



 


		21.	Cintas Document Management Services agreement



 


		22.	Hess Electric Contract dated April 11, 2012



 


		23.	Direct Energy Services, LLC Commercial Natural
Gas Services Agreement dated May 4, 2012



 




    	 



    	 



    

 


Schedule 2.3

Purchase Price Allocation


 


	Facility	 	Real Property	 	 	Personal Property	 	 	Other Assets	 	Total	 
	Compass	 	$	___________	 	$	___________	 	$	___________	 	$	11,700,000	 



 




    	2



    	 



    

 


Schedule 4.2

Consents of Third Parties


 


None other than Consent
of “Lender” and “HUD” in connection with the “Loan”, as those terms are defined in Schedule
2.2(a)


 




    	 



    	 



    

 


Schedule 4.4

Conflicts


 


None.


 




    	2



    	 



    

 


Schedule 4.5

Judgments


 


None.


 




    	 



    	 



    

 


Schedule 4.6

Governmental Approvals


 


Massachusetts Executive
Office of Elder Affairs Change of Ownership Certification Application will be required per provisions of 651 CMR 12.03(7).


 


Approval of HUD concerning
the Existing Loan as set forth in Sections 4.2 of this Agreement.


 




    	2



    	 



    

 


Schedule 4.7

Seller’s Insurance





 


Bay View
of Boston Associates, LP


Compass on
the Bay


 


Commercial
General/Professional Liability:


 


$1,000,000
per occurrence/$3,000,000 aggregate General Liability


 


$1,000,000
per occurrence/$3,000,000 aggregate Professional Liability


 


$1,000,000
per occurrence/$1,000,000 aggregate Employee Benefits Liability


 


	12/1/10 to 12/1/11	American Empire Surplus Lines	10CG61033
	 	 	 
	12/1/11 to 12/1/12	American Empire Suplus Lines	11CG65813
	 	 	 
	12/1/12 to 12/1/13	American Empire Surplus Lines	12CG72623


 


Business
Auto Liability


 


$1,000,000
Combined Single Limit (Bodily injury and Property Damage)


 


Comprehensive
Deductible: $500; Collision Deductible: $500


 


	12/1/10 to 6/20/11	American Empire Surplus Lines	10CG61033
	 	(Hired/Nonowned only)	 
	 	 	 
	6/20/11 to 6/20/12	One Beacon America Insurance	390001175
	 	 	 
	6/20/12 to 12/1/12	Travelers Indemnity	BA-OC319032
	 	 	 
	12/1/12 to 12/1/13	Travelers Indemnity	BA-OC319032


 


Crime
Bond


 


Employee
Dishonesty $600,000; Forgery & Alteration $600,000; Deductible $6,000 


 


	12/1/10 to 12/1/11	The Hartford	08BDDBQ0227
	 	 	 
	12/1/11 to 12/1/12	The Hartford	08BDDBQ0227
	 	 	 
	12/1/12 to 12/1/13	The Hartford	08BDDBQ0227





 




    	 



    	 



    

 


Schedule 4.8

Litigation


 


None


 




    	2



    	 



    

 


Schedule 4.9


Compliance with Laws


 


None


 




    	 



    	 



    

 


Schedule 4.10


Environmental Matters


 


None


 






    	2



    	 



    

 


Schedule 4.14

Exceptions to Rent Roll


 


None


 




    	3



    	 



    

 


Schedule 4.15

Provider Agreements


 


Compass on the Bay
receives Medicare and Medicaid payments through its role as a provider of services to the Program for All-Inclusive Care for the
Elderly (PACE).


 




    	4



    	 



    

 


Schedule 4.17

Condition of the Property


 


None.


 




    	5



    	 



    

 


Schedule 4.18

Independent Property


 


None.


 




    	 



    	 



    

 


Schedule 4.20


Utilities Access


 


None


 



    	 



    	 



    

 


Schedule 4.23

Exceptions to Seller Ownership


 


None


 




    	2



    	 



    

 


Schedule 4.24

Title Encumbrances


 


None


 




    	 



    	 



    

 


Schedule 4.25

Affordable Housing Units


 


None




    	2



    	 



    

 


Schedule 4.27

Loans


 


None other than the
Existing Mortgage


 




    	 



    	 



    

 


Schedule
4.29

Broker’s or Finder’s Fees


 


Upon passing of title
a broker’s commission will be due to The Seniors Group, Allen, TX.


 




    	 



    	 



    

 


Schedule
7.12

Required Consents


 


Only such consents and approvals
required in connection with the Existing Mortgage.


 




    	2



    	 



    

 


EXHIBIT A


 


Legal Description of the Property


 


See Attached Description


 




    	A-1



    	 



    

  


EXHIBIT
A


Legal
Description


 


PARCEL
1 (REGISTERED)


 


The land with
the building(s) thereon, if any, located in that part of Boston, Suffolk County, Massachusetts known as South Boston, bounded and
described as follows:


 


	Northerly	by Lot 4 as shown on the plan hereinafter mentioned, 46.17 feet;
	 	 
	Easterly	by land now or formerly of The First National Bank of Boston, 201.58 feet;
	 	 
	Southerly	by Columbia Road, 43.85 feet; and
	 	 
	Westerly	by Lot 2 as shown on said plan 192.06 feet


 


Said land is
shown as Lot 3 on a subdivision plan drawn by Boston Survey Consultants, Greulich, Surveyor, dated September 12, 1974 as modified
and approved by the Court, filed in the Land Registration Office as plan No.l0272-D, a copy of a portion of which is filed with
Certificate of Title No. 86227.


 


PARCEL
2 (UNREGISTERED)


 


The land with
the building(s) thereon, if any, located in that part of Boston, Suffolk County, Massachusetts known as South Boston, bounded and
described as follows:


 


	Northerly	by East Eighth Street, 150 feet;
	 	 
	Easterly	in part by land of owners unknown, used as a passageway called Mount Washington Place, and in part by land now or formerly of Tufts, 250 feet;
	 	 
	Southerly	by Columbia Road, 150 feet; and
	 	 
	Westerly	by land of Simonds Saw and Steel Company, 250 feet


 


NOTE: As herein
used “recorded” shall mean “recorded with the Suffolk District Registry of Deeds” and “filed”
shall mean “filed with the Suffolk District Registry of Deeds.” (Title reference: Book 18169, Page 342.




 




    	A-2



    	 



    

 


EXHIBIT
B


 


 List
of Required Due Diligence Items


for
the Property


 


	 	#	Description
	 	1.02 FINANCIAL STATEMENTS & BUDGETS
	 	1.02.04	Property level certified and audited (if available) financials for 3 years and last quarter - P&L, Balance Sheet, Cash Flows, etc.
	 	1.02.06	2013 Operating budgets
	 	1.02.07	Unaccrued & unpaid brokers commissions prior to purchase
	 	1.02.09	3 years historical capital expenditures
	 	1.02.10	Planned capex for 2013 and beyond
	 	1.02.11	Debt schedule
	 	1.02.13	Schedule of current discounts, programs, amounts and expiration
	 	1.02.14	Current accounts receivables report
	 	1.02.15	Current accounts payable report
	 	1.02.16	General Ledger for prior 2 years and YTD
	 	1.02.17	Schedule of occupancy for the past 3 years
	 	1.02.18	Copy of utility bills for the previous 12 months
	 	1.02.19	Bank Statements for the previous 12 months
	 	1.02.20	Current Billing Statement for each resident
	 	1.02.21	Schedule of Security Deposits
	 	1.03 LEGAL AND REGULATORY COMPLIANCE	 
	 	1.03.01	Litigation and other claims occurring, pending or threatened during the last 3 years and reserves accrued for such items (inclusive of closing date)
	 	1.03.03	Health inspection report
	 	1.03.04	Boiler certificates
	 	1.03.05	Elevator certificates
	 	1.03.06	Fire inspection report
	 	1.03.07	Underground storage tanks registration
	 	1.03.08	Copy of assisted living EOEA Certificate
	 	1.03.09	CHOW/Explanation and timing on change of ownership requirements
	 	1.03.10	Most recent 2 prior years regulatory surveys, statements of deficiencies and plan of correction
	 	 	 	 


 




    	B-1



    	 



    

 


	 	1.04 INSURANCE POLICIES AND/OR CERTIFICATES	 
	 	1.04.01	Property / casualty - all risk (100% replacement value)
	 	1.04.02	Liability - public and comprehensive (general, professional and worker's comp.)

Limits: $1,000,000 / $3,000,000
	 	1.04.04	Business interruption/rental income (12 mos.)
	 	1.04.05	Flood (if in Flood Hazard zone) with Flood Zone Certificate
	 	1.04.06	Earthquake
	 	1.04.07	Insurance claim history (past 3 years)
	 	1.04.08	Proof of insurance coverages required to be maintained by Tenant under lease(s) or Manager under management agreement
	 	1.05 REAL ESTATE RELATED	 
	 	1.05.03	Existing Project Acquisition Documents (including prior contracts and appraisals)
	 	1.05.10.01	Sublease(s)
	 	1.05.14.01	Prior survey
	 	1.05.15.01	Prior Title Insurance Policy
	 	1.05.17.01	Existing Environmental Reports (including Asbestos)
	 	1.05.22	Property Photos
	 	1.05.23	Property System Documentation:
	 	1.05.23.1	Fire alarm system, age and copy of last inspection
	 	1.05.23.2	Call system, age and warranty
	 	1.05.24	Notice of any building code, parking or other violations
	 	1.05.25	Existing radon reports
	 	1.06 TAXES AND ASSESSMENTS	 
	 	1.06.01	Real property tax bill and assessment
	 	1.06.02	Evidence of payment of current personal property taxes
	 	1.06.03	Evidence of payment of current intangible property taxes
	 	1.06.04	Evidence of payment of current condominium assessment or CAM fees
	 	1.06.05	Income Tax Returns for 2 yrs for Tenant / Operator
	 	1.06.06	Income Tax Returns for 3 yrs for Guarantor
	 	1.07 BUILDING / ENGINEERING / ARCHITECTURAL	 
	 	1.07.01	Certificate of occupancy
	 	1.07.02	Site plans
	 	1.07.03	Engineering Schematics


 




    	B-2



    	 



    

 


	 	1.07.04	Architectural plans
	 	1.07.05	Elevation renderings
	 	1.07.06	Electrical plans
	 	1.07.07	Mechanical / HVAC renderings
	 	1.07.08	Interior renderings / plans
	 	1.07.09	Unit renderings / plans
	 	1.07.10	Breakout of livable and non-livable square footage
	 	1.07.11	Existing roofing or other structural studies
	 	1.08 MANAGEMENT AND OPERATIONS	 
	 	1.08.02	Certified Rent Roll
	 	1.08.03	List of furniture, fixtures & equipment (FF&E) (inception through current)
	 	1.08.04	Schedule of any personal property
	 	1.08.05	Service / Vendor Contracts
	 	1.08.07	Schedule of preventative maintenance
	 	1.08.08	Emergency management plan (Disaster Recovery)
	 	1.08.09	Medical/biological/hazardous waste handling agreements
	 	1.08.10	Resident Agreement
	 	1.08.11	Information on the Manager (list of properties under management, management bios, etc.)
	 	1.08.12	Resident/Family/Employee Satisfaction Surveys
	 	1.08.13	List of all 1099 employees
	 	1.08.14	Schedule of rent concessions or any other discounted services by resident
	 	1.08.15	Schedule of worker's comp claims history for the last 3 years
	 	1.08.16	Schedule of related party transactions
	 	1.08.17	Schedule of approved home health care vendors registered to operate in the building
	 	1.08.18	Most recent competitor survey
	 	1.09 CORPORATE AND LEGAL FOR THE SELLER	 
	 	1.09.01	Litigation, liens, claims or encumbrances affecting the property currently or at any time during the past three years.
	 	1.09.03	Federal EIN
	 	1.10 CORPORATE AND LEGAL FOR MANAGER	 
	 	1.10.01	Litigation, liens, claims or encumbrances affecting the Manager currently or at any time during the past three years.
	 	1.10.03	Federal EIN


 




    	B-3



    	 



    

 


EXHIBIT
B-1


 


List
of Due Diligence Items


Not
Yet Delivered


 




    	B-4



    	 



    

 


EXHIBIT C


 


List of Property Agreements


 


		1.	Proia Snow Removal and Landscaping Services



 


		2.	Tyco Fire Alarm System Inspection Agreement



 


		3.	Simplex Grinnel (Tyco) Fire Suppression Equipment
Maintenance Agreement



 


		4.	ADT Security Camera Service Agreement



 


		5.	Dictronics Copier lease



 


		6.	Avaya Business Communications Telephone Equipment
Lease



 


		7.	Touchtown TV Activities Electronic Bulletin Board



 


		8.	Air Duct Services and Restoration Maintenance Agreement
(Kitchen Hood cleaning)



 


		9.	Pest Control Agreement – Waltham Services,
Inc.



 


		10.	Mass. Waste Rubbish Removal Contract



 


		11.	Power Products Electric Generator Maintenance and
Testing Contract



 


		12.	Health Care Insights, LLC Nutrition Counseling
Agreement



 


		13.	Comcast of Boston Cable Communications Cable TV
Agreement



 


		14.	Steri-Safe Medical Waste Removal Service Agreement



 


		15.	Residency Agreements in effect at time of closing



 


		16.	Harbor PACE (Elder Service Plan)



 


		17.	Existing Mortgage (see Schedule 2.2(a) which is
incorporated herein by reference)



 


		18.	Lawhorn Irrigation equipment service contract



 


		19.	Med Assets Group Purchasing Agreement



 


		20.	Wind River kitchen grease trap servicing contract



 


		21.	Cintas Document Management Services agreement



 


		22.	Hess Electric Contract dated April 11, 2012



 


		23.	Direct Energy Services, LLC Commercial Natural
Gas Service Agreement dated May 4, 2012



 




    	C-1



    	 



    

 


EXHIBIT D


 


List of Licenses Required for the
Property


 


Massachusetts Executive
Office of Elder Affairs Certification


 




    	D-1



    	 



    

 


EXHIBIT E





 


Evidence of Zoning for the Property


 


See previous submission
in electronic form.


 




    	E-1



    	 



    

 


EXHIBIT F


 


Certified Rent Roll


 




    	F-1



    	 



    

 


EXHIBIT G


 


Form Resident Agreement


 




    	G-1



    	 



    

 


EXHIBIT H


 


Outstanding Citations


 


None




    	H-1



    	 



    

 


EXHIBIT I


 


Form of Management Agreement


 




    	I-1



    	 



    

 


EXHIBIT I-1


 


Form of Operating Agreement


 




    	L-1



    	 



    

 


EXHIBIT I-2


 


Form of Bill of Sale


 




    	L-1



    	 



    

 


EXHIBIT J


 


Form of Audit Letter


 




    	L-1



    	 



    

 


EXHIBIT K


 


Form of Guaranty 


 




    	L-1



    	 



    

 


EXHIBIT L


 


Form of Opinion Letter from Seller’s
Counsel


 


TO BE SUPPLIED PRIOR TO THE CLOSING


 




    	L-1



    	 



    

 


EXHIBIT L-1


 


Form of Opinion Letter from Buyer’s
Counsel


 


TO BE SUPPLIED PRIOR TO THE CLOSING


 




    	L-1



    	 



    

 


EXHIBIT M


 


TRANSITION PERIOD SUBLEASE


 


TO BE SUPPLIED PRIOR TO THE CLOSING, IF
NEEDED


 




    	L-1