Purchase Agreement


     

    
      
        

      


      PURCHASE
        AND SALE AGREEMENT

       

      THIS
        PURCHASE AND SALE AGREEMENT
        (this
“Agreement”)
        is
        made and entered into this 16th
        day of
        December, 2005 by and between CLEVELAND
        SENIORCARE CORP.,
        an
        Indiana corporation (the “Seller”),
        and
OHI
        ASSET II (OH), LLC,
        a
        Delaware limited liability company (the “Buyer”).
        

       

      RECITALS

       

      WHEREAS,
        Seller
        is the owner of the eleven (11) healthcare facilities identified on Exhibit
        A
        attached
        hereto and made a part hereof as the “Facilities”
        (each
        being referred to herein individually as a “Facility”);
        and

       

      WHEREAS,
        Seller
        desires to sell, transfer, convey and assign to Buyer, and Buyer desires
        to
        acquire, assume and accept from Seller, certain property and assets associated
        with the Facilities (the “Property,”
        as
        further defined herein) on and subject to the terms and conditions contained
        in
        this Agreement; and

       

      WHEREAS,
        Buyer,
        after it acquires the Property, intends to sell or lease, as the case may
        be,
        the Property and the Facilities to CSC
        MSTR LSCO, L.L.C.,
        an Ohio
        limited liability Company (the “Tenant”),
        with
        any such lease to be pursuant to a master lease agreement (“Lease”),
        which
        shall contain such terms and conditions as the Buyer and Tenant shall agree,
        provided that such transactions or Lease shall have no effect on, nor be
        part of
        this Agreement; and 

       

      WHEREAS,
        simultaneous with the closing of the transactions contemplated by this Agreement
        and in connection with Buyer’s selling or leasing the Property and the
        Facilities to Tenant pursuant to the Lease, Seller and Tenant shall enter
        into
        and execute an Operations Transfer Agreement (“Transfer
        Agreement”),
        pursuant to which Seller shall transfer the operations of the Facilities
        to
        Tenant, and Tenant shall accept transfer of the operations of the
        Facilities;
        and

       

      WHEREAS,
        simultaneous with the closing of the transactions contemplated by this
        Agreement, in connection with Buyer’s selling or leasing of the Property and the
        Facilities to Tenant pursuant to the Lease, and in furtherance of the Transfer
        Agreement, Seller and Bedrock Slate and Gravel Pit, LLC, an Ohio limited
        liability company (“Wind
        Down Agent”),
        shall
        enter into and execute an Assignment and Assumption Agreement (“Assignment
        Agreement”),
        pursuant to which Seller shall sell, transfer, convey, and assign to Tenant
        and
        Tenant shall purchase, acquire, assume, and accept from Seller those certain
        assets and liabilities associated with the Facilities that are not otherwise
        sold, transferred, conveyed, assumed, or assigned to Buyer under this Agreement
        or to Tenant under the Transfer Agreement.

       

      WHEREAS,
        as a
        condition to Seller entering into this Agreement, the Assignment Agreement,
        and
        the Transfer Agreement, and in connection with Buyer’s leasing the Property to
        Tenant pursuant to the Lease, Tenant shall cause its affiliate, CommuniCare
        Health Services, Inc. (“CHS”) to execute and deliver a Guaranty (the
“Guaranty”), pursuant to which CHS will guaranty the obligations of Wind Down
        Agent under the Assignment Agreement.

       

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

       

      1.  Sale.
        Seller
        agrees to sell, convey, and assign to Buyer, and Buyer agrees to purchase
        and
        assume from Seller, for the Purchase Price (as hereinafter defined), and
        on the
        terms and conditions set forth in this Agreement, the Property (as hereinafter
        defined). For purposes of this Agreement, the term “Property”
        shall
        be deemed to mean on a collective basis:

       

      1.1.  The
        Land.
        The
        parcels of land legally described on Exhibit
        E
        attached
        hereto and made a part hereof, together with all rights, easements and interests
        appurtenant thereto including, but not limited to, any streets or other public
        ways adjacent to the Land and any water or mineral rights owned by Seller
        (collectively, the “Land”).

       

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

       

      1.3.  Personal
        Property.
        All
        tangible personal property located
        on or in the Land or Improvements or
        used
        in connection with the ownership, operation and
        maintenance of the Facilities (the “Personal
        Property”),
        including, but not limited, to, all, if any, building materials, supplies,
        hardware, and carpeting. The Personal Property does not include the
“Consumables”,
        which
        are hereby defined to be the inventory of food, dietary supplies, medical
        supplies, floor stock, maintenance supplies, paper goods, linens, laundry
        supplies and all other consumables, disposable items used in the operation
        of
        the Facilities, and other inventory maintained in connection with Seller’s
        ownership of the Facilities (the “Inventory”).
        It is
        understood and agreed that an inventory of all Consumables shall be taken
        effective as of the Closing Date and the value of the Consumables in excess
        of
        any state mandated requirement at the Seller’s cost, (the “Consumables
        Value”)
        shall
        be incorporated at Closing into the APBS (as defined in the Assignment
        Agreement) as an asset being acquired by the Wind Down Agent pursuant to
        the
        Assignment Agreement. 

       

      1.4.  Intangible
        Personal Property.
        Each
        and all of the following items of intangible property owned by Seller or
        utilized in
        connection with the ownership and operation of the Facilities (collectively,
        the
“Intangibles”):
        (i)
all
        right, title and
        interest in
        the
        identity or business of the Facilities as a going concern, including without
        limitation, any names or trade names by which the Facilities or any one or
        more
        of them may be known; (ii) to the extent assignable or transferable,
all
        right, title and
        interest in
        and to
        each and every guaranty and warranty concerning the Improvements and the
        Personal Property, including, without limitation, any roofing, air conditioning,
        heating, elevator or other guaranty or warranty relating to the construction,
        maintenance or replacement of the Improvements or any portion thereof;
        (iii) all
        right, title and
        interest in
        and to
        all guaranties and warranties given to Seller that have not expired (either
        on a
“claims made” or occurrence basis) in connection with the operation,
        construction, improvement, alteration or repair of the Improvements; (iv)
        to the
        extent assignable or transferable,
        all
        right, title and
        the
        interest in,
        to
        and under all governmental permits, licenses, authorizations, operating rights
        and approvals associated with the physical construction of the Improvements
        (not
        including any permits, licenses, authorizations or approvals associated with
        the
        operation of the Facilities as health care facilities or otherwise);
and
        (v)
        to
        the extent assignable or transferable, all
        right, title and
        interest in,
        to
        and under any certificate of need, operating rights from a governmental
        authority related to the construction and/or operation of any Facility or
        any of
        the Property for the use of a specified number of beds in a nursing facility,
        MR/DD facility, assisted living facility and/or rehabilitation hospital,
        and any
        other activities carried on by the Seller in the Facilities and/or the Property,
        or alteration of any such Facility or the Property or modification of services
        provided at such Facility
        or the
        Property.

       

      1.5.  Business
        Records.
        To the
        extent that the Seller has ownership and control, all of the following
        maintained by, issued to or held by Seller: books and records relating to
        the
        Facilities or the operation thereof, including, without limitation, files,
        invoices, forms, accounts, correspondence, patient records, technical,
        accounting and procedural manuals, employment records, actuarial studies,
        studies, reports or summaries relating to any environmental matters, and
        other
        books and records relating to the ownership, maintenance or operation of
        any of
        the Facilities or any of the Property, surveys, engineering or environmental
        reports and other studies, investigations or depictions of the Facilities
        or the
        Property (collectively, the “Business
        Records”)
        to the
        extent the Seller has the right under applicable law to convey or transfer
        them.
        Seller and Buyer acknowledge and agree that at the request and direction
        of
        Buyer, the Business Records shall be transferred, conveyed, and assigned
        to
        Tenant upon Closing in furtherance of Buyer’s selling or leasing of the Property
        and the Facilities to Tenant pursuant to the Lease and in accordance with
        the
        Transfer Agreement; provided Tenant shall be required to fulfill the Seller’s
        obligations thereunder. 

       

      1.6.  For
        purposes of this Agreement, the term “Provider Agreements” shall mean to the
        extent they are assignable, any provider agreements held by or issued to
        Seller
        or any Facility under which the Facilities are eligible to receive payment
        under
        (i) Title XVIII (“Medicare”),
        Title
        XIX (“Medicaid”)
        or any
        other governmental or quasi-governmental third party payor programs, (ii)
        any
        private or quasi-private healthcare reimbursement or private payor programs
        (including so-called “HMO” and “PPO” programs) (herein, “Third
        Party Payor Programs”),
        and
        (iii) any other agreement, arrangement, program or understanding with any
        federal, state or local governmental agency or organization or private
        organization pursuant to which the Facilities qualify for payment or
        reimbursement for medical or therapeutic care or other goods or services
        rendered or supplied to any resident.

       

      1.7.  Excluded
        Property.
        The
        Property shall not, however, include any of the following items (the
“Excluded
        Property”)
        or
        proceeds therefrom, that may be paid or otherwise realized after Closing:
        (i)
        any and all cash
        (including resident funds), bank deposits, escrows and other cash equivalents,
        certificates of deposits, marketable securities, cash deposits made by the
        Seller to secure contract obligations (except to the extent the Seller receives
        a credit therefor under any other provision of this Agreement), and all accounts
        receivable in connection with the Facilities accruing prior to the Closing
        Date,
        including, without limitation, any and all reimbursements which may be due
        under
        any Provider Agreements; (ii) any and all rights
        in
        and to claims or causes of action of the Seller against third parties
        (including, without limitation, for indemnification) with respect to, or
        which
        are made under or pursuant to, other Excluded Property; (iii)
        all
        prepaid expenses (and rights arising therefrom or related thereto) except
        to the
        extent taken into account in determining the prorations provided for under
        Section
        12;
        (iv)
        any
        employment agreements, the same to be assumed by Tenant in the Transfer
        Agreement; (v)
        except
        as set forth in Section
        14,
        any and
        all contracts of insurance, all coverages and proceeds thereunder and all
        rights
        in connection therewith, including, without limitation, rights arising from
        any
        refunds due with respect to insurance premium payments to the extent they
        relate
        to such insurance policies; and (v)
        any
        records relating to Excluded Property. 

       

      1.8.  Excluded
        Liabilities.
        In
        addition, notwithstanding anything to the contrary set forth in this Agreement,
        Buyer hereby does not agree to assume, pay, perform, satisfy or discharge
        any
        liability or obligation of Seller (the “Excluded
        Liabilities”).
        The
        term Excluded Liabilities shall include:
        (i) any
        liability or obligation of Seller accruing or arising prior to the Closing
        for
        breach of contract, personal injury or property damage (whether based on
        negligence, breach of warranty, strict liability or any other theory) caused
        by,
        arising out of or resulting from, directly or indirectly, any alleged or
        actual
        acts or omissions; (ii) any liability or obligation of the Seller accruing
        or
        arising prior
        to
        the Closing for money borrowed;
        (iii)
        any
        liability or obligation of Seller relating to that certain Promissory Note
        dated
        January 29, 1999 from Sycamore Holdings, LLC., a Delaware limited liability
        company, as payor, to Warren L. Wolfson and Ruth L. Wolfson, payees;
and
        (iv)
        any and all other liabilities and obligations of every kind of
        Seller.

       

      2.  Purchase
        Price.

       

      2.1.  Purchase
        Price.
        The
        total purchase price for the Property (the “Purchase
        Price”)
        to be
        paid to Seller by Buyer shall be equal to (A) the sum of (i) One Hundred
        Fourteen Million Two Hundred Fifty Thousand and no/100 Dollars
        ($114,250,000.00), and (ii) the Closing Fee of Seven Hundred Fifty Thousand
        and
        no/100 ($750,000.00) (“Prime
        Fee”) due
        and
        owing to Prime Care Management LLC (“Prime”)
        pursuant to the terms of that certain letter agreement between ZC Specialty
        Insurance Company (“Surety”)
        and
        Prime dated April 26, 2005,
        which shall be paid by Buyer directly to Prime, less (B) an adjustment for
        capital improvements and equipment lease buy-outs in the amount of $250,000,
        to
        be deducted from the cash portion of the Purchase Price and not from the
        Prime
        Fee.
        The
        Buyer will pay the Purchase Price at Closing by electronic wire transfer
        of
        immediately
        available funds to the Escrow Agent for disbursement in accordance with this
        Agreement. 

       

      2.2.  Intentionally
        deleted.
        

       

      2.3.  Intentionally
        deleted. 

       

      2.4.  Allocation
        of the Purchase Price.
        The
        portion of the Purchase Price allocated to each Facility shall be mutually
        determined by the parties prior to Closing (“Allocated
        Purchase Price”).

       

      3.  Closing.
        The
        purchase and sale contemplated herein shall be consummated at the closing
        (“Closing”)
        as of
        the date hereof (the “Closing
        Date”).
        For
        the purposes of any pro-rations to be made pursuant to this Agreement, the
        Closing shall be effective as of 12:01 A.M. on the Closing
        Date.

       

      3.1.  BUYER
        ACKNOWLEDGEMENT. BUYER
        ACKNOWLEDGES AND AGREES THAT THE BUYER IS ACQUIRING THE PROPERTY ON AN “AS-IS
        WHERE-IS” BASIS, WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
        IMPLIED OTHER THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS AGREEMENT)
        BY
        SELLER AND IN EACH CASE SUBJECT ONLY TO PERMITTED ENCUMBRANCES. SELLER HAS
        NOT
        MADE NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
        (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER
        AS TO
        THE VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY
        OR
        FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
        REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
        RESPECT TO THE PROPERTY (OR ANY PART THEREOF), ANY USE OF THE PROPERTY, ANY
        BUSINESS OR BUSINESSES CONDUCTED THEREIN, THE VALUE OR FINANCIAL STATUS OF
        THE
        PROPERTY OR THE FACILITIES, AND SELLER SHALL NOT BE LIABLE FOR ANY LATENT,
        HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART
        THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. BUYER HAS OR PRIOR TO THE
        DATE
        HEREOF WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE PROPERTY,
        AND ANY
        AND ALL BUSINESSES OR OPERATIONS CONDUCTED THEREIN. IT IS UNDERSTOOD AND
        AGREED
        THAT BUYER IS PURCHASING THE PROPERTY AS SPECIFICALLY SET FORTH IN THIS
        AGREEMENT. SELLER HAS MADE NO REPRESENTATIONS AND WARRANTIES AND SHALL MAKE
        NO
        REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ANY OF THE BUSINESSES OR
        OPERATIONS CONDUCTED IN THE PROPERTY. BUYER REPRESENTS AND WARRANTS TO THE
        SELLER, WITHOUT ANY LIMITATION WHATSOEVER, THAT IT IS ENTERING INTO THIS
        AGREEMENT SOLELY ON THE BASIS OF THE RESULTS OF THEIR OWN INSPECTIONS, AND
        ALL
        RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN
        SELLER ON THE ONE HAND, AND BUYER, ON THE OTHER HAND, ARE TO BE BORNE BY
        BUYER.


       

      3.2.  Execution
        of the Transfer Agreement and Assignment Agreement.

       

      A.  On
        or
        before the Closing Date, and effective at the Closing, Seller shall execute
        and
        deliver, and Tenant and CALM OF CLEVELAND, LLC, an Ohio limited liability
        company (“Manager”),
        shall
        execute and deliver the Transfer Agreement.

       

      B.  On
        or
        before the Closing Date, and effective at the Closing, Seller shall execute
        and
        deliver, and Wind Down Agent shall execute and deliver the Assignment
        Agreement.

       

      4.  Intentionally
        omitted.

       

      4.1.  Intentionally
        omitted.
        

       

      4.2.  Intentionally
        omitted.

       

      4.3.  Licensure.
        

       

      A.  Intentionally
        omitted.

       

      B.  Tenant
        has submitted appropriate licensure applications for a change of ownership
        for
        the Facilities with the Ohio Department of Health (“ODH”),
        the
        Ohio Department of Job and Family Services (“ODJFS”),
        or
        the Ohio Department of Mental Retardation and Developmental Disabilities
        (“ODMR/DD”)
        whatever the case may be. On December 14, 2005, Tenant provided to Seller
        and
        Buyer an affirmative acknowledgement from ODH in a telephone call with a
        representative of ODH that ODH has approved Tenant or its designees licensure
        applications and that the Tenant or its designees will be permitted to operate
        the Facilities from and after the Closing Date. Seller and Buyer understand
        that
        the ODN and the ODMR/DD will not issue a license to Tenant until after the
        Closing. Seller shall permit Tenant to utilize its licenses from the Closing
        Date until Tenant obtains its own licenses from ODH and the ODMR/DD, provided,
        that Tenant shall indemnify and hold the Seller harmless from any and all
        liabilities, costs and expenses of any nature, kind and description arising
        after the Closing Date, whether from the ownership of the Property and the
        operation of any business or other activity in the Property, including providing
        any services to any person. Tenant has named the Seller as an additional
        insured
        on any and all insurance policies or other insurance activities covering
        the
        Property and any and all operations therein until such time as Tenant shall
        have
        received its own licenses from ODH and ODMR/DD.

       

      5.  Seller’s
        Representations and Warranties.
        Seller
        represents and warrants to the Buyer that the following matters are true
        as of
        the Closing Date:

       

      5.1.  Ownership.
        The
        Seller is the owner, in fee simple, of the Property, subject only to the
        Permitted Encumbrances. 

       

      5.2.  Status.
        Seller
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of Indiana. Seller is duly qualified to do business as
        a
        foreign corporation in the State of Ohio.

       

      5.3.  Authority.
        The
        execution and delivery of this Agreement and all documents to be executed
        by it
        pursuant to this Agreement by Seller, and the performance of this Agreement
        and
        all documents to be executed by it pursuant to this Agreement by Seller,
        have
        been duly authorized by Seller, and this Agreement is binding on Seller and
        enforceable against Seller in accordance with its terms except as enforceability
        may be restricted, limited or delayed by applicable bankruptcy or other laws
        affecting creditors’ rights generally and except as enforceability may be
        subject to general principles of equity. The execution of this Agreement
        and the
        consummation of the transactions contemplated in this Agreement do not and
        will
        not result in a breach of the terms and conditions of, nor constitute a default
        under or violation of, Seller's articles of incorporation, bylaws or any
        law,
        regulation, court order, or any mortgage, note, bond, indenture, agreement,
        license or other instrument or obligation to which Seller is now a party
        or by
        which any of portion of the Property may be bound or affected and that is
        material to Seller’s business. The Seller represents and warrants to the Buyer
        that (i) the holder of the debt evidenced by that certain Promissory Note
        dated
        as of January 29, 1999 in the original principal amount of $140,000,000 (the
        “Defeased
        Debt”)
        has
        consented to, and approved, Sellers request to permit the defeasance of the
        Defeased Debt and (ii) as of the Closing (which is also the time at which
        this
        Agreement is being delivered by the parties), the Defeased Debt has been
        defeased as required by the documents evidencing the Defeased Debt such that
        all
        liens and security interests encumbering any of the Property and securing
        the
        Defeased Debt have been released and discharged.

       

      5.4.  Notices
        of Violations.
        Buyer
        acknowledges that Manager manages the Facilities on Seller’s behalf and that
        Manager has been represented to Seller as being a wholly-owned affiliate
        of
        Tenant. Buyer further acknowledges and agrees that the knowledge of the Manager
        with respect to any representations and warranties contained in this Agreement
        or the Transfer Agreement will not be imputed to the Seller. To Seller’s
        knowledge, Seller has received no written notices, orders, demands or other
        directives from any governmental authorities pertaining to any uncured material
        violations of any applicable laws, ordinances, rules, regulations, codes,
        licenses, permits and authorizations pertaining to the operation of the
        Facilities other than those, if any, which are identified on Exhibit
        F,
        attached hereto.

       

      5.5.  Litigation.
        To the
        Seller’s knowledge, and except as disclosed on Exhibit
        G
        attached
        hereto and made a part hereof, there are no pending or threatened, judicial,
        municipal or administrative proceedings affecting the Property which would
        inhibit the Seller’s ability to transfer the Property as set forth in this
        Agreement or in which Seller is a party by reason of Seller’s ownership of the
        Property or any portion thereof in each case other than those that could
        reasonably be expected to have a Material Adverse Effect.

       

      5.6.  Operator
        Licenses and Provider Agreements.
        To
        Seller’s knowledge, Seller has been issued, and is in good standing with respect
        to, any and all permits, licenses, regulatory approvals, approvals, certificates
        of need, accreditations and comparable authorizations (collectively,
“Operator
        Licenses”)
        from
        all applicable governmental and quasi-governmental authorities (including,
        but
        not limited to, ODH, ODJFS, “ODMR/DD”, any applicable county board of mental
        retardation and developmental disabilities, the Center for Medicare and Medicaid
        Services and the Ohio Department of Industrial Relations, Division of Factory
        and Building Inspection, or any other governmental agency which has jurisdiction
        over any aspect of the Facilities or over the operation thereof) necessary
        for
        the use, operation and maintenance of the applicable Facility and the conduct
        of
        Seller’s business therein other than those the failure to have obtained or
        maintain could not reasonably be expected to have a Material Adverse Effect.
        Seller has obtained and to Seller’s knowledge, is in good standing with respect
        to any and all material Provider Agreements under which the Seller and/or
        the
        applicable Facility is entitled to receive payment or reimbursement under
        Medicare, Medicaid or any Third Party Payor Programs. 

       

      5.7.  No
        Reimbursement Audits or Appeals.
        To the
        Seller’s knowledge, there are no current, pending or outstanding Medicaid,
        Medicare or other Third Party Payor Programs’ audits or appeals pending at the
        Facilities other than those, if any, identified on Exhibit
        H,
        attached hereto.
        To the
        extent there are any audits or recoveries, the Seller shall have no
        responsibility or liability, the same to be assumed by the Tenant.

       

      5.8.  United
        States Person.
        The
        Seller is a “United States Person” within the meaning of Section 1445(f)(3)
        of the Internal Revenue Code of 1986, as amended.

       

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

       

      5.10.  Material
        Adverse Effect.
        The
        words “Material
        Adverse Effect”
        when
        utilized in this Section
        5
        shall
        mean only a material adverse effect with respect to the physical condition
        of
        the Facilities
        that
is
        caused
        by conditions beyond Seller’s control including, but not limited to Acts of God,
        wars, insurrections and/or any other cause beyond the reasonable control
        of the
        party whose performance is affected, taken as a whole, that exceeds Five
        Million
        Dollars ($5,000,000.00) in aggregate damage that is not covered by any
        applicable insurance, exclusive of any applicable insurance deductible.


       

      5.11.  Indemnification.
        Seller
        hereby agrees and does indemnify and hold the Buyer and Tenant harmless from
        and
        against any and all losses, damages, claims, causes of action, judgments,
        costs
        and expenses (including, reasonable fees of attorneys) (collectively,
“Losses”)
        that
        may be suffered or incurred by or asserted or awarded against Buyer arising
        out
        of any breach by Seller of any representations and warranties of Seller
        contained in this Agreement. The aggregate liability of the Seller to the
        Buyer
        or Tenant for indemnification under this Agreement shall be limited to an
        amount
        equal to $5,000,000 (the “Cap”).
        The
        Buyer shall take all reasonable steps to mitigate all liabilities and claims,
        including availing itself as reasonably directed by Seller of any defenses,
        limitations, rights of contribution, claims against third parties and other
        rights at law, and shall provide such evidence and documentation of the nature
        and extent of any liability as may be reasonably requested by the Seller.
        The
        Buyer and Tenant shall act in a commercially reasonable manner in addressing
        any
        liabilities that may provide the basis for an indemnifiable claim and shall
        respond to such liability in the same manner that it would respond to such
        liability in the absence of the indemnification provided for in this Agreement.
        Any request for indemnification of specific costs shall include invoices
        and
        supporting documents containing reasonably detailed information about the
        Losses
        for which indemnification is being sought. All payments made pursuant to
        this
Section
        5.12
        shall be
        treated as adjustments to the Purchase Price for the Facilities for income
        tax
        purposes. 

       

      Notwithstanding
        the foregoing, Buyer shall not be entitled to indemnification for any Losses
        until the aggregate amount of all Losses exceeds One Hundred Thousand Dollars
        ($100,000), and then only to the extent such Losses exceed $100,000. Moreover,
        a
        claim for indemnification shall only valid to the extent delivered from Buyer
        to
        Seller within twelve (12) months of the Closing Date. Seller shall defend
        any
        claims for which Buyer might be entitled to indemnification under this Agreement
        with counsel selected by Seller and reasonably acceptable to Buyer and any
        out
        of pocket expenses incurred by Seller in so defending shall be charged against
        the Cap and will be deemed to be Losses for which Buyer has received indemnity.
        Buyer will not settle any claim for which Buyer is or may be entitled to
        indemnity hereunder, without Seller’s prior consent so long as the Seller
        performs its indemnification and defense obligations with respect to such
        claims. Seller has the right to settle any such claim in its sole discretion
        so
        long as such settlement imposes no burdens, limitations or obligations on
        Buyer,
        and Buyer agrees to reasonably cooperate and assist Seller with any such
        defense
        or settlement discussions or arrangements. 

       

      6.  Buyer’s
        Representations and Warranties.
        Buyer
        represents and warrants to Seller that the following matters are true as
        of the
        Closing Date:

       

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

       

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

       

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

       

      7.  Intentionally
        omitted.
        

       

      8.  Intentionally
        omitted.
        

       

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

       

      9.1.  Deed.
        General
        warranty deeds for each Facility for the Land and Improvements comprising
        each
        such Facility, executed by Seller, in recordable form, conveying the Land
        and
        Improvements to Buyer free and clear of all liens, claims and encumbrances
        except for the Permitted Encumbrances. In this regard, the Seller will have
        no
        obligation to cure or otherwise remove or release any of the Permitted
        Encumbrances. As used herein, the term “Permitted Encumbrances” shall mean
        liens, encumbrances or right of others set forth on Schedule
        9.1
        to this
        Agreement.

       

      9.2.  Bill
        of Sale.
        The
        Bill of Sale, executed by Seller, assigning, conveying and warranting to
        Buyer,
        or the Buyer’s assignee, title to the Personal Property and Inventory, free and
        clear of all liens, claims and encumbrances except Permitted
        Encumbrances.

       

      9.3.  Transfer
        Agreement.
        The
        Transfer Agreement, executed by Seller. 

       

      9.4.  Assignment. The
        Assignment Agreement executed by Seller. 

       

      9.5.  Business
        Records.
        Copies
        of all of the Business Records in Seller’s possession or reasonable control, to
        the extent not already delivered to the Buyer or, at Buyer’s option,
        Tenant.

       

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

       

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

       

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

       

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

       

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

       

      9.11.  Discharges
        of Liens and Security Interests.
        Such
        discharges, releases and termination statements necessary to discharge, release
        and terminate all liens and security interests attached to the
        Property.

       

      9.12.  Possession
        of the Facilities.
        Seller
        will deliver possession of the Property to Buyer, subject to the terms of
        the
        Lease.

       

      9.13.  Other.
        Such
        other documents and instruments as may reasonably be required by Buyer, Tenant
        or the Title Insurer and that may reasonably be necessary or appropriate
        to
        consummate this transaction and to otherwise effect the agreements of the
        parties pursuant to this Agreement.

       

      For
        a
        period of six (6) months after Closing, the Seller shall execute and deliver
        to
        the Buyer, Tenant, the Wind Down Agent and/or the Title Company such further
        documents and instruments as shall be reasonably requested to effect this
        transaction and otherwise effect the agreements of the parties
        hereto.

       

      10.  Buyer’s
        Closing Deliveries.
        At
        Closing Buyer shall cause the following to be delivered to Seller in form
        reasonably acceptable to Seller:

       

      10.1.  Purchase
        Price.
        The
        Purchase Price, plus or minus prorations as agreed by the Buyer and Seller,
        shall be delivered to the Title Company in escrow for disbursement to
        Seller.

       

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

       

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

       

      10.4.  Other.
        Such
        other documents and instruments as may reasonably be required by Seller or
        the
        Title Insurer and that may reasonably be necessary or appropriate to consummate
        this transaction and to otherwise effect the agreements of the parties pursuant
        to this Agreement. The Buyer shall not withhold any funds from Closing
        whatsoever.

       

      For
        a
        period of six (6) months after Closing, the Buyer shall execute and deliver
        to
        the Seller and/or the Title Company such further documents and instruments
        as
        shall be reasonably requested to effect this transaction and otherwise effect
        the agreements of the parties hereto.

       

      11.  Tenant’s
        and Wind Down Agent’s Closing Deliveries.
        At
        Closing, Tenant and Wind Down Agent, as appropriate, shall cause the following
        to be delivered to Seller:

       

      11.1.  Transfer
        Agreement. The
        Transfer Agreement, executed by Tenant and Manager.

       

      11.2.  Assignment
        Agreement.
        The
        Assignment Agreement executed by the Wind Down Agent.

       

      11.3.  Certified
        Resolutions.
        Certified resolutions of the Tenant, the Manager and the Wind Down Agent,
        authorizing the transaction and an incumbency certificate.

       

      11.4.  Other.
        Such
        other documents and instruments as may reasonably be required by Seller,
        Buyer
        or the Title Insurer and that may reasonably be necessary or appropriate
        to
        consummate this transaction and to otherwise effect the agreements of the
        parties pursuant to this Agreement. 

       

      For
        a
        period of six (6) months after Closing, the Tenant and the Wind Down Agent
        shall
        execute and deliver to the Seller, the Buyer and/or the Title Company such
        further documents and instruments as shall be reasonably requested to effect
        this transaction and otherwise effect the agreements of the parties
        hereto.

       

      12.  Prorations
        And Adjustments.
        The
        parties to this Agreement have agreed that the Seller and the Wind Down Agent
        will settle most, if not all, of the items to be pro-rated by the Buyer and
        the
        Seller to this Agreement pursuant to the Assignment Agreement; provided,
        however, that the real estate taxes and assessments currently due and payable
        for the Facilities in Cuyahoga County for the period of January 1, 2005 thru
        June 30, 2005 shall be paid by the Seller at the Closing. To the extent that
        the
        Seller and the Wind Down Agent do not pro-rate or otherwise address such
        items
        pursuant to the Assignment Agreement, the
        following shall be prorated and adjusted between Seller and the Buyer as
        of the
        Closing Date, except as otherwise specified:

       

      12.1.  Revenues
        and Expenses.
        Except
        as
        otherwise provided in the Assignment Agreement, all
        revenues
        (including, but
        not
        limited to, payments due from the residents of the Facilities or under the
        Provider Agreements) and expenses related to the operation of the Facilities
        shall be prorated as of the Closing Date, with Seller entitled to such revenues
        and responsible for such expenses arising out of the operation of the Facilities
        for periods prior to the Closing Date, and Tenant, as the case may be, shall
        be
        entitled to the revenues and responsible for the expenses arising out of
        its
        operation of the Facilities on and after the Closing Date. 

       

      12.2.  Utilities.
        Water,
        electricity, sewer, gas, telephone and other utility charges not paid directly
        by the Seller, if any, based, to the extent practicable, on final meter readings
        and final invoices.

       

      12.3.  Taxes.
        All
        accrued general real estate, personal property and ad valorem taxes for the
        current year (January 1, 2005 through December 31, 2005) applicable to the
        Property shall be prorated on an accrual basis with the Seller responsible
        for
        each day of the year prior to Closing and with the Buyer responsible for
        each
        day of the year on and after Closing. As the tax bills for the current year
        may
        not be issued (in whole or in part, i.e. partial period tax bills may be
        issued)
        until 2006, such taxes shall be prorated for the Property for the period
        of
        January 1, 2004 through December 31, 2004. Prior to or at Closing, Seller
        shall
        pay or have paid all tax bills that are due and payable prior to or on the
        Closing Date and shall furnish evidence of such payment to Buyer and the
        Title
        Company.

       

      12.4.  Assessments.
        All
        assessments, general or special, shall be prorated as of the Closing Date,
        with
        Seller being responsible for any installments of assessments which are due
        prior
        to the Closing Date and Buyer being responsible for any installments of
        assessments which are due on or after the Closing Date.

       

      12.5.  Bed
        Taxes.
        All bed
        taxes due under Ohio Revised Code §§ 3721.50 - 3721.99 or provider franchise
        fees for the current year applicable to the Facilities shall be prorated
        on an
        accrual basis utilizing actual final tax bills, if available, with the Seller
        responsible for each day of the year prior to the Closing and with the Buyer
        responsible for each day of the year on and after the Closing. If such tax
        bills
        are not available, such taxes shall be prorated on the basis of the most
        currently available tax bills for the Facilities. Prior to or at Closing,
        Seller
        have paid all such tax bills that are due or will pay any amount accrued
        as of
        that date to the Buyer, by means of a credit against the Purchase Price due
        at
        Closing. 

       

      12.6.  General
        Proration Provisions. For
        purposes of calculating prorations, the Buyer at its direction and election
        or
        Tenant shall be deemed to be in title to the Property, and therefore entitled
        to
        the income therefrom and responsible for the expenses thereof, for the entire
        day upon which the Closing occurs. All such prorations shall be made on the
        basis of the actual number of days of the year and month that shall have
        elapsed
        as of the Closing Date. The amount of such prorations shall be adjusted in
        cash
        after Closing, as and when complete and accurate information becomes available.
        Seller and the Buyer agree to cooperate and use their good faith and diligent
        efforts to make such adjustments no later than thirty (30) days after the
        Closing, or as soon as is reasonably practicable if and to the extent that
        the
        required final proration information is not available within such thirty
        (30)
        day period. Items of income and expense for the period prior to the Closing
        Date
        will be for the account of Seller and items of income and expense for the
        period
        on and after the Closing Date will be for the account of the Buyer or its
        designee, all as determined by the accrual method of accounting. Bills received
        after Closing that relate to expenses incurred, services performed or other
        amounts allocable to the period prior to the Closing Date shall be paid by
        Seller. The obligations of the parties pursuant to this Section
        12
        shall
        survive the Closing and shall not merge into any documents of conveyance
        delivered at Closing.

       

      13.  
        Intentionally omitted.

       

      14.  Casualty
        and Condemnation.

       

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

       

      14.2.  Condemnation.

       

      A.  Intentionally
        omitted.

       

      B.  If
        prior
        to the Closing (a) less than substantially all of a Facility shall be taken
        by
        condemnation or eminent domain, (b) there is any material taking of land
        lying
        in the bed of any street or highway, open or proposed, in front of or adjoining
        all or any part of the Land, or (c) there is any change of grade or closing
        of
        any such street or highway abutting or adjacent to the Land, that in any
        such
        case would materially impair access to and from the Land or otherwise materially
        interfere with its occupancy and use as a skilled nursing facility, then
        the
        Buyer shall
        be
        entitled to no abatement of the Purchase Price by reason of such taking,
        change
        of grade, or closing, and the proceeds of, or right to any proceeds of, any
        award or payment in respect of such taking, change of grade, or closing are
        hereby assigned to the Buyer at the Closing.

       

      15.  Closing
        Expenses.
        Seller
        will pay at Closing, all closing costs and expenses, pertaining to the release
        of the indebtedness described on Exhibit
        I and
        of
        any mortgages, security interests or liens on the Property, including any
        fees
        or premiums of any nature, associated with prepayment of that indebtedness,
        the
        cost of an
        owner’s
        title
        insurance policy to be issued to Buyer at Closing with respect to the Property
        (excluding the cost of any endorsements thereto that may be requested by
        Buyer),
        the fees of Seller’s attorneys, and one-half (1/2) of any documentary and state,
        county and municipal transfer taxes relating to the instruments of conveyance
        contemplated herein and any escrows hereunder. In turn, the Buyer will be
        responsible for, and will pay at or prior to Closing, all closing costs and
        expenses related to its due diligence including, without limitation, the
        cost of
        any surveys or environmental site assessments procured by Buyer in connection
        with its due diligence, the fees of Buyer’s attorneys, the cost of procuring any
        endorsements to its owner’s
        title
        guaranty
        insurance policy
        , the
        cost of any title insurance policy to be issued to any lender providing
        financing for the Buyer’s acquisition of the Property, and all other costs and
        expenses associated with procuring such financing and one-half (1/2) of any
        documentary and state, county and municipal transfer taxes relating to the
        instruments of conveyance contemplated herein and any escrows hereunder.
        The
        Buyer and Seller will each pay one-half (1⁄2) of any closing or escrow fee that
        may be charged by the Escrow Agent.

       

      16.  Successors
        and Assigns. The
        terms, conditions and covenants of this Agreement shall be binding upon and
        shall inure to the benefit of the parties and their respective nominees,
        successors, beneficiaries and assigns.

       

      17.  Survival.
        Notwithstanding
        any provision of this Agreement to the contrary, the obligations of the parties
        under Sections
        5,
        6,
        11, 12, 20,
        22.8, and
        22.9
        shall
        survive Closing and the delivery of any conveyance documentation for a period
        of
        one (1) year; and the provisions of Sections
        4.1, 20 and 22.8
        shall
        survive any termination of this Agreement for a period of one (1) year. This
        Agreement and the obligation to close contained herein shall not be terminated
        except as expressly permitted herein. 

       

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

       

      if
        to
        Seller:  Cleveland
        SeniorCare Corp.

      10401
        North Meridian Street, Suite 122

      Indianapolis,
        Indiana 46290

      Attention:
        Jay L. Hicks

      Facsimile:
        (317) 630-3159

      


      with
        a
        copy to:  Bose
        McKinney & Evans LLP

      600
        East
        96th
        Street,
        Suite 500

      Indianapolis,
        Indiana 46240

      Attention:
        James C. Carlino

      Facsimile:
        (317) 223-0328

      


      if
        to
        Buyer:  OHI
        Asset
        II (OH), LLC

      9690
        Deereco Road, Suite 100

      Timonium,
        Maryland 21093

      Attention:
        Daniel J. Booth

      Facsimile:
        (410) 427-8824

      


      with
        a
        copy to:  Myers
        Nelson Dillon & Shierk, PLLC

      125
        Ottawa Ave., N.W., Suite 270

      Grand
        Rapids, Michigan 49503

      Attention:
        Mark E. Derwent

      Facsimile:
        (616) 233-9642

      


      if
        to the
        Tenant, Manager or Wind Down Agent:

      


      CommuniCare
        Family of Companies

      4700
        Ashwood Drive, Suite 200

      Cincinnati,
        Ohio 45241

      Attention:
        Charles R. Stoltz, Chief Financial Officer

      Facsimile:
        (513) 530-1359

      


      With
        a
        copy to: Benesch,
        Friedlander, Coplan & Aronoff LLP

      2300
        BP
        Tower

      200
        Public Square

      Cleveland,
        Ohio 44114

      Attention:
        Harry M. Brown

      Facsimile:
        (216) 363-4588

      


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

      


      Notices
        shall be deemed properly delivered and received (i) the same day when personally
        delivered; or (ii) one day after deposit with Federal Express or other
        commercial overnight courier; or (iii) the same day when sent by confirmed
        facsimile.

       

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

       

      20.  Brokerage.
        Each
        party hereto represents and warrants to the other that it has dealt with
        no
        brokers or finders in connection with this transaction other than Marcus
&
        Millichap (the “Broker”)
        and
        that the fee or commission which may be due to the Broker under this Agreement
        shall be payable by the Seller. Seller hereby indemnifies, protects and defends
        and holds Buyer harmless from and against any and all losses resulting from
        the
        claims of any other broker, finder, or other such party, claiming by, through
        or
        under the acts or agreements of Seller. Likewise, Buyer hereby indemnifies,
        protects and defends and holds Seller harmless from and against any and all
        losses resulting from the claims of any broker, finder or other such party,
        claiming by, through or under the acts or agreements of Buyer. The obligations
        of the parties pursuant to this Section
        20
        shall
        survive the Closing. 

       

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

       

      22.  Miscellaneous.

       

      22.1.  Entire
        Agreement.
        This
        Agreement constitutes the entire understanding between the parties with respect
        to the transaction contemplated herein, and all prior or contemporaneous
        oral
        agreements, understandings, representations and statements, and all prior
        written agreements, understandings, letters of intent and proposals, in each
        case with respect to the transaction contemplated herein, are hereby superseded
        and rendered null and void and of no further force and effect and are merged
        into this Agreement. Neither this Agreement nor any provisions hereof may
        be
        waived, modified, amended, discharged or terminated except by an instrument
        in
        writing signed by the party against which the enforcement of such waiver,
        modification, amendment, discharge or termination is sought, and then only
        to
        the extent set forth in such instrument.

       

      22.2.  Legal
        Holidays.
        If any
        date herein set forth for the performance of any obligations by Seller or
        Buyer
        or for the delivery of any instrument or notice as herein provided should
        be on
        a Saturday, Sunday or legal holiday, the compliance with such obligations
        or
        delivery shall be deemed acceptable on the next business day following such
        Saturday, Sunday or legal holiday. As used herein, the term “legal
        holiday”
        means
        any state or federal holiday for which financial institutions or post offices
        are generally closed for observance thereof in the State of Ohio.

       

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

       

      22.4.  Knowledge.
        The
        parties acknowledge that the day to day operations of the Facilities have
        not
        been managed by Seller but by a management company under contract with Seller.
        Whenever any statement herein is made “to Seller’s knowledge” or words of
        similar intent or effect of any party or representative, such person shall
        make
        such statement only if such facts and other information which, as of the
        date
        the representation is given, are actually known to the party making such
        statement, which with respect to Seller means the knowledge of the President
        and
        Treasurer, without any independent investigation.

       

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

       

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

       

      22.7.  Conflict.
        Notwithstanding there may have been a letter of interest executed by the
        parties, the Buyer and Seller agree that the letter of interest and anything
        contained therein shall have absolutely no effect upon or in any fashion
        have
        any influence on this Agreement, to the extent the parties have recognized
        that
        letter of interest has been incorporated into this Agreement and it is of
        no
        further use, effect or value whatsoever. 

       

      22.8.  Confidential
        Information.
        The
        parties acknowledge that the transaction described herein and any information
        obtained by Buyer or its attorneys, partners, accountants, consultants, lenders
        or investors (collectively, the "Permitted
        Outside Parties")
        in the
        conduct of its due diligence is of a confidential nature and shall not be
        disclosed except to Permitted Outside Parties or as required by law. In
        connection with the negotiation of this Agreement and the preparation for
        the
        consummation of the transactions contemplated hereby, each party acknowledges
        that it will have access to confidential information relating to the other
        party. Each party shall treat such information as confidential, preserve
        the
        confidentiality thereof, and not duplicate or use such information, except
        deliveries to Permitted Outside Parties in connection with the transactions
        contemplated hereby. In the event of the termination of this Agreement for
        any
        reason whatsoever, Buyer shall return to Seller, all documents, work papers,
        engineering and environmental studies and reports and all other materials
        (including all copies thereof obtained from Seller or Broker in connection
        with
        the transactions contemplated hereby), and each party shall use its best
        efforts, including instructing its employees and others who have had access
        to
        such information, to keep confidential and not to use any such information.
        The
        provisions of this Section
        22.8 shall
        survive the Closing. Notwithstanding the foregoing, the Seller acknowledges
        that
        the Buyer has informed the Seller that the Buyer is obligated under federal
        securities laws to publicly announce the entry of the Buyer into this Agreement
        and to file this Agreement, together with a description thereof, with the
        Securities and Exchange Commission, and the Seller consents to such announcement
        and filing. 

       

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

       

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

       

      22.11.  Guaranty.
        Simultaneously with the execution of this Agreement, CHS shall execute and
        deliver the Guaranty.

       

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

       

      [Signature
        Page to Follow]

      


       


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

       

      


      
        	 	
                SELLER:

                 

                CLEVELAND
                  SENIORCARE CORP.

                 

                 

                By:
                  /s/
                  Jay L. Hicks

                 

                Name:
                  Jay
                  L. Hicks

                 

                Its:
                  President

              
	 	 
	 	
                BUYER:

                 

                OHI
                  ASSET II (OH), LLC

                 

                By:
                  Omega Healthcare Investors, Inc., its sole member

                 

                 

                By:
                  /s/Daniel
                  J. Booth

                 

                Name:
                  Daniel
                  J. Booth

                 

                Its:
                  COO

              


      

      



      
        
          
            Signature
              Page - of
              2

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            Signature
              Page to

            Agreement
              of Purchase and Sale

          

        

      


      The
        undersigned are joining in the execution of this Agreement for the express
        purpose of agreeing to the terms, conditions and provisions of Sections 1.3,
        3.2, 4.3B, 5.11, 11, 12, 18, 22.8, 22.9 and 22.11 and for no other purpose.
        

       

      


       

      
        	 	
                TENANT:

                 

                CSC
                  MSTR LSCO, LLC

                 

                 

                 

                By:
                  /s/
                  Charles R. Stoltz 

                Name:
                  Charles
                  R. Stoltz 

                Its:
                  Chief
                  Financial Officer 

              
	 	
                MANAGER:

                 

                CALM
                  OF CLEVELAND, LLC

                 

                 

                 

                By:
                  /s/
                  Charles R. Stoltz 

                Name:
                  Charles
                  R. Stoltz 

                Its:
                  Chief
                  Financial Officer 

              
	 	
                WIND
                  DOWN AGENT:

                 

                BEDROCK
                  SLATE AND GRAVEL PIT, LLC

                 

                 

                 

                By:
                  /s/
                  Charles R. Stoltz 

                Name:
                  Charles
                  R. Stoltz 

                Its:
                  Chief
                  Financial Officer 

              


      

      


       

      



      
        
          
            Signature
              Page - of
              2

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          Signature Page toAgreement of Purchase
            and
            Sale

        

      



      SCHEDULE
        OF EXHIBITS

       

      


       

      
        	
                Exhibit
                  A

              	
                List
                  of the Facilities

              
	
                Exhibit
                  B

              	
                Omitted

              
	
                Exhibit
                  C

              	
                Omitted

              
	
                Exhibit
                  D

              	
                Omitted

              
	
                Exhibit
                  E

              	
                Legal
                  Descriptions of the Land

              
	
                Exhibit
                  F

              	
                Pending
                  Legal Notices

              
	
                Exhibit
                  G

              	
                Pending
                  Litigation

              
	
                Exhibit
                  H

              	
                Reimbursement
                  Audits and Appeals 

              
	
                Exhibit
                  I

              	
                Indebtedness
                  to be Paid Off and Released at Closing

              
	
                Schedule
                  9.1

              	
                Permitted
                  Encumbrances

              


      

      


      


      


      


      



      
        
          
            


          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      



      Exhibit
        A

      List
        of
        Facilities

      


      
        	 	
                Facility
                  Name

              	
                Street

              	
                City

              	
                State

              	
                Zip

              	
                County

              	
                #
                  of Beds

              
	
                1.

              	
                Aristocrat
                  Berea

              	
                255
                  Front Street

              	
                Berea

              	
                OH

              	
                44017

              	
                Cuyahoga

              	
                225
                  

              
	
                2.

              	
                Candlewood
                  Park

              	
                1835
                  Belmore Ave

              	
                Cleveland
                  

              	
                OH

              	
                44112

              	
                Cuyahoga

              	
                134
                  

              
	
                3.

              	
                Falling
                  Water

              	
                18840
                  Falling Water

              	
                Strongsville

              	
                OH

              	
                44136

              	
                Cuyahoga

              	
                139
                  

              
	
                4.

              	
                Grande
                  Pointe Health Care

              	
                3
                  Merit Drive

              	
                Richmond
                  Heights

              	
                OH

              	
                44143

              	
                Cuyahoga

              	
                166
                  

              
	
                5.

              	
                Greenbrier
                  

              	
                6455
                  Pearl Road

              	
                Parma
                  Heights

              	
                OH

              	
                44130

              	
                Cuyahoga

              	
                68
                  

              
	
                6.

              	
                Greenbrier
                  HCC

              	
                6455
                  Pearl Road

              	
                Parma
                  Heights

              	
                OH

              	
                44130

              	
                Cuyahoga

              	
                196
                  

              
	
                7.

              	
                Ohio
                  Extended Care Facility

              	
                3364
                  Kolbe Road

              	
                Lorain

              	
                OH

              	
                44053

              	
                Lorain

              	
                192
                  

              
	
                8.

              	
                Pebble
                  Creek

              	
                670
                  Jarvis Road

              	
                Akron
                  

              	
                OH

              	
                44319

              	
                Summit

              	
                191
                  

              
	
                9.

              	
                Pine
                  Grove

              	
                5608
                  Pearl Road 

              	
                Parma

              	
                OH

              	
                44129

              	
                Cuyahoga

              	
                22
                  

              
	
                10.

              	
                Pine
                  Valley Care Center

              	
                4360
                  Brecksville Road

              	
                Richfield

              	
                OH

              	
                44286

              	
                Summit

              	
                97
                  

              
	
                11.

              	
                Wyant
                  Woods

              	
                200
                  Wyant Road

              	
                Akron

              	
                OH

              	
                44313

              	
                Summit

              	
                180
                  

              
	 	 	 	 	 	 	 	
                1,610
                  

              


      

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Exhibit
        F

      Pending
        Legal Notices

      


      None.