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EXHIBIT 10.48 PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT (this Agreement) is dated as of the 10th day of December,
2004, by and among (i) Sunrise of Lynn Valley Limited (Lynn Valley Owner), Sunrise of Beacon Hill
Limited (Beacon Hill Owner), Sunrise of Mississauga Limited (Mississauga Owner), Sunrise of
Markham Limited (Markham Owner), Sunrise of Windsor Limited (Windsor Owner), Sunrise of
Richmond Hill Limited (Richmond Hill Owner) and Sunrise of Oakville Limited (Oakville Owner)
(Lynn Valley Owner, Beacon Hill Owner, Mississauga Owner, Markham Owner, Windsor Owner, Richmond
Hill Owner and Oakville Owner are hereinafter sometimes referred to individually as Facility
Owner and collectively as Facility Owners), S.A.L. Operations B.H. Inc. (BH Operator), S.A.L.
Operations (Canada) Inc. (Canada Operator), and S.A.L. Operations B.N.S. Inc. (BNS Operator)
(BH Operator, Canada Operator and BNS Operator are hereinafter sometimes referred to individually
as a Facility Operator and collectively as Facility Operators) (the Facility Owners and the
Facility Operators are hereinafter collectively referred to as the Sellers) and (ii) Sunrise
Senior Living, Inc., a Delaware corporation (Sunrise or Purchaser). RECITALS: A.     Lynn Valley Owner owns the assisted living facility located in North Vancouver, British
Columbia, Canada known as Sunrise Assisted Living of Lynn Valley, as more fully described on
Exhibit A attached hereto and made a part hereof (the Lynn Valley Facility). B.     Beacon Hill Owner owns the assisted living facility located in Victoria, British Columbia,
Canada known as Sunrise Assisted Living of Victoria, as more fully described on Exhibit A
(the Beacon Hill Facility). C.     Mississauga Owner owns the assisted living facility located in Mississauga, Ontario, Canada
known as Sunrise Assisted Living of Mississauga, as more fully described on Exhibit A (the
Mississauga Facility). D.     Markham Owner owns the assisted living facility located in Markham, Ontario, Canada known
as Sunrise of Unionville, as more fully described on Exhibit A (the Markham Facility). E.     Windsor Owner owns the assisted living facility located in Windsor, Ontario, Canada known
as Sunrise Assisted Living of Windsor, as more fully described on Exhibit A (the Windsor
Facility). F.     Richmond Hill Owner owns the assisted living facility located in Richmond Hill, Ontario,
Canada known as Sunrise Assisted Living of Richmond Hill, as more fully described on Exhibit
A (the Richmond Hill Facility). - 1 -




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G.     Oakville Owner owns the assisted living facility located in Oakville, Ontario, Canada known
as Sunrise Assisted Living of Oakville, as more fully described on Exhibit A (the Oakville
Facility). H.     The assisted living facilities described in Recitals A through G are individually referred
to as a Facility and collectively as the Facilities. I.     Facility Operators have entered into certain operating leases (the Operating Leases) with
Facility Owners, pursuant to which Facility Operators operate the Facilities. J.     Purchaser desires to purchase from Sellers substantially all of Sellers assets, including
the Facilities, and Sellers desire to sell such assets to Purchaser in exchange for the Purchase
Price (as hereinafter defined) and in accordance with the terms and conditions set forth below. Accordingly, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: ARTICLE I
TERMINOLOGY 1.1     Defined Terms. As used herein, the following terms shall have the meanings
indicated: Affiliate: With respect to any specified person or entity, another person or entity
which, directly or indirectly controls, is controlled by, or is under common control with,
the specified person or entity. Documents: This Agreement and all Exhibits hereto, and each other agreement,
certificate or instrument delivered pursuant to this Agreement. First Additional Purchase Price Amount: The purchase price amount payable in
respect of the cash flows of the Operating Leases of the Facility Operators from December
17, 2004 through the Closing Date, which shall be equal to the product of (i) CAN$27,161
multiplied by (ii) the number of days elapsed from December 17, 2004 through and including
the earlier of (x) the Closing Date and (y) December 31, 2004. IPO: The initial public offering of units of Sunrise REIT, which offering is
anticipated to close prior to December 31, 2004. IPO Closing: The time as of which units of Sunrise REIT first become marketable on
the Toronto Stock Exchange. IPO Proceeds: The gross proceeds realized from the IPO, as shown on the first page
of the final prospectus for the IPO. For purposes of clarity, IPO Proceeds excludes the
proceeds from the exercise of any overallotment option. - 2 -




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Licenses. All certificates, licenses, and permits issued by governmental
authorities in connection with the ownership, use, occupancy, operation, and maintenance of
the Facilities. Lien: Any mortgage, deed of trust, pledge, hypothecation, title defect, right of
first refusal, security or other adverse interest, encumbrance, claim, option, lien, lease
or charge 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
Personal Property Security Act or comparable law of any jurisdiction. Loss: With respect to any person or entity, 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 legal
fees, whether or not arising out of a third-party claim. Management Agreements: The agreements by and between each Facility Operator and
Manager. Manager: Sunrise North Assisted Living, Limited, a New Brunswick corporation, which
is the manager of the Facilities under the Management Agreements. Material Adverse Effect: A material adverse effect on the assets, business,
operations, financial condition or results of operations of the Facilities, taken as a
whole. Net Proceeds: Fifty Nine Million Five Hundred Eighty-Three Thousand Four Hundred
Eleven Canadian Dollars (CAN$59,583,411). Operating Leases: The leases by and between the Facility Owners, as landlords, and
the Facility Operators, as tenants. Payoff Amount: One Hundred Four Million Six Hundred Thirty Five Thousand Three
Hundred Thirty-Nine Canadian Dollars (CAN$104,635,339). Permitted Lien: Any statutory lien which secures a governmentally required payment
not yet due that arises, and is customarily discharged, in the ordinary course of business. Resident Deposits: All deposits or advances of any kind or nature from any resident
of any Facility. Second Additional Purchase Price Amount: An increase in the amount of the purchase
price for the assets of the Facility Operators representing an increase in the projected
cash flows (and therefore an increase in the value) of the Operating Leases of the Facility
Operators as determined by the IPO, which shall be equal to the product of: (i) 31.82% - 3 -




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and (ii) the positive difference, if any, between (x) the product of A) 105.36% and B) the
IPO Proceeds and (y) CAN$229,847,560. Sunrise REIT: The trust to be formed under Ontario law anticipated to be named
Sunrise Senior Living Real Estate Investment Trust. Taxes: All Canadian federal, provincial, 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, including interest, penalties and additions with respect thereto and any
interest in respect of such additions or penalties. The term Taxes excludes (i) impact
fees or other similar exactions levied or payable in connection with the development of any
of the Facilities, and (ii) any U.S. taxes assessed against individual partners in SALH with
respect to their investment therein. Tax Return: Any return, filing, report, declaration, questionnaire or other
document required to be filed for any period with any taxing authority (whether domestic or
foreign) in connection with any Taxes (whether or not payment is required to be made with
respect to such document). Title Insurer: First Canadian Title Insurance Company. 1.2     Additional Defined Terms. As used herein, the following terms shall have the
meanings defined in the recitals or section indicated below: Assignment Agreements
    
    Section 8.2(f)Assumed Liabilities
    
    Section 2.3(b)Breaching Party
    
    Section 10.6Closing
    
    Section 8.1Closing Date
    
    Section 8.1Closing Notice
    
    Section 2.1Closing Statement
    
    Section 8.2(e)CRA
    
    Section 5.4(c)CRA Clearance
    
    Section 5.7(c)Cut-Off Time
    
    Section 2.5Deposit
    
    Section 2.3(b)Escrow Agent
    
    Section 2.3(b)Excluded Assets
    
    Section 2.2(b)Facility Agreements
    
    Section 2.2(a)(iii)GST
    
    Section 5.7(f)Implied Covenants
    
    Section 2.4(e)Improvements
    
    Section 2.2(a)(i)Indemnified Party
    
    Section 9.4(a)Indemnifying Party
    
    Section 9.4(a)Land
    
    Section 2.2(a)(i)
 - 4 -




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Non-Breaching Party
    
    Section 10.6Owned Assets
    
    Section 2.2(a)Personal Property
    
    Section 2.2(a)Purchase Price
    
    Section 2.3(a)Real Property
    
    Section 2.2(a)(i)Resident Agreements
    
    Section 2.2(a)(iii)SALH
    
    Section 2.3(b)Sellers Warranties
    
    Section 2.4(d)SSLII
    
    Section 8.7SSLII Interests
    
    Section 8.7Sunrises Cross Pre-Closing Obligat
    
    ions Section 2.5(b)Sunrises Net Pre-Closing Benefit
    
    Section 2.5(c)Sunrises Net Pre-Closing Payments
    
    Section 2.5(b)
 ARTICLE II
PURCHASE AND SALE OF OWNED ASSETS 2.1     Agreement. Sellers hereby agree to sell to Purchaser or its designee (which
designee may be Sunrise REIT or an entity controlled, directly or indirectly, by Sunrise REIT), and
Purchaser agrees to purchase, the Owned Assets (as defined below and including, for certainty, the
Facilities) from Sellers, on the Closing Date, on and subject to the terms and conditions
hereinafter set forth. Sunrise will provide written notice of the Closing Date (the Closing
Notice) to Seller no less than fifteen (15) days prior to the Closing Date. The Closing Notice
will specify the Closing Date and the place at which the Closing will take place. 2.2     Owned Assets. (a)     Defined. The Owned Assets shall consist of all of the assets of Sellers, whether
tangible, intangible, contingent or otherwise, and shall specifically include the following: (i)     Real Property. (A)     That certain real property consisting of land (Land) and all buildings,
structures, fixtures and other improvements (Improvements) located thereon, such
Land and Improvements being more particularly described as follows: Facility
    
    Address
    
    UnitsBeacon Hill
    
    920 Humboldt Street
    
    
    93Victoria, BCLynn Valley
    
    940 Lynn Valley Road
    
    
    92North Vancouver, BC
 - 5 -




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Markham
    
    38 Swansea Road
    
    
    82Markham, ONMississauga
    
    1273 and 1279 BurnhamthorpeRoad East
    
    
    84Mississauga, ONOakville
    
    456 Trafalgar Road
    
    
    87Oakville, ONRichmond Hill
    
    9800 Yonge Street
    
    
    70Richmond Hill, ONWindsor
    
    5065 Riverside Drive East
Windsor, ON
    
    
    84
 The Land, Improvements and related real property (collectively, the Real Property)
are more fully described on Exhibit A shall be deemed to include and be subject to
all related permits, easements, Licenses (except to the extent hereinafter expressly
excluded, and only to the extent transferable under applicable law), rights-of-way, rights
and related appurtenances. (B)     All right, title and interest of the Facility Owners as landlord (whether named as
such therein, or by assignment or otherwise) in the Operating Leases and any other leases
and subleases regarding the Real Property now existing or at any time hereafter made, and
all amendments, modifications, supplements, renewals and extensions thereof, together with
any security deposits made by the lessees thereunder. (C)     All right, title and interest of the Facility Operators as tenant under the
respective Operating Leases. (ii)     Personal Property. (A)     Any and all furniture, fixtures, furnishings, machinery and equipment used in
connection with the Facilities, and all other personal property used in connection with the
Real Property and, as of the Closing Date, located upon the Real Property, if any. (B)     Goodwill, going concern, and all existing warranties and guaranties (express or
implied, but only to the extent transferable under applicable law or the applicable warranty
or guaranty agreement) issued to the Facility Owners or Facility Operators in connection
with the Improvements or the personal property described in paragraph (a)(ii)(A) above. - 6 -




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(C)     The tangible and intangible property described in Sections 2.2(a)(ii)(A) and
2.2(a)(ii)(B) shall be referred to herein as the Personal Property. In no event shall the
Personal Property include any property owned by Manager, notwithstanding Managers use of
such property in connection with its management and administration of the Facilities. (iii)     Facility Agreements and Resident Agreements. All rights of the Sellers in, to
and under all contracts, leases, agreements, commitments and other arrangements, and any amendments
or modifications, used or useful in the operation of the Facilities as of the date hereof or made
or entered into by Sellers or Manager between the date hereof and the Closing Date in compliance
with this Agreement (the Facility Agreements), and all occupancy, residency, lease, tenancy and
similar written agreements entered into in the ordinary course of business with residents of the
Facilities, and all amendments, modifications, supplements, renewals, and extensions thereof
(Resident Agreements) and all Resident Deposits. (iv)     Records. True and complete copies (or, at Purchasers option, originals, so long
as the Purchaser provides copies to the Sellers) of all of the books, records, accounts, files,
logs, ledgers and journals pertaining to or used in the operation of the Facilities, including, but
not limited to, any electronic data stored on computer disks or tapes, and originals of any of the
foregoing that relate to the Facilities. (v)     Licenses. Any and all Licenses now held and used or useful in the operation of
the Facilities, and any renewals, extensions, amendments or modifications thereof, except to the
extent not transferable or assignable under applicable law, to the extent transferable under
applicable law. (vi)     Cash on Hand. All cash on hand of the Facility Owners and the Facility Operators
as of the Closing Date, other than any cash received or receivable under this Agreement. (vii)     Miscellaneous Assets. Any other tangible or intangible assets, properties or
rights of any kind or nature not otherwise described above in this Section 2.2 and now or
hereafter owned or leased by the Facility Owners and used in connection with the operation of the
Facilities, excluding only the Excluded Assets described below. (b)     Excluded Assets. Notwithstanding anything to the contrary herein, the Sellers are
not selling, and Purchaser shall not acquire, any of the Excluded Assets, defined for purposes
hereof as:  (i)
    The rights of Sellers under this Agreement and the other
Documents.(ii)
    The original (or, at Purchasers option, copies of) records
referred to in paragraph (a)(iv) above, as well as any other corporate and
accounting books and records of the Sellers. - 7 -




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(iii)
    The Purchase Price and any other payments received or
receivable hereunder. (c)     Assets Not Transferable. Nothing herein shall be construed as requiring or
permitting Sellers to assign or transfer to Purchaser any agreement or License that by its terms
cannot be assigned absent the consent of any third party (unless any required consent shall have
been obtained). If, notwithstanding the reasonable efforts of the parties pursuant to Section 5.4,
any such consent to assignment or transfer shall not have been obtained by the Closing Date, then
(i) the failure to have received such consent shall not constitute the failure of a condition
precedent to closing and (ii) the parties will continue to use reasonable efforts after the Closing
Date to obtain such consent. Until such consent shall have been obtained, for a period of up to
six months after the Closing Date, the applicable Seller shall, by itself or by its agents, at the
request and expense and under the direction of Purchaser, in the name of such Seller or otherwise
as Purchaser may reasonably specify and as may be permitted by law, take all actions as Purchaser
may reasonably request, at Purchasers sole expense, in order: (i) that the rights and obligations
of such Seller under any such contract or License shall be preserved, (ii) to facilitate the
performance of such Sellers obligations under such contract or License and (iii) to cause the
other party or parties to any such contract to perform its or their obligations thereunder (which
performance shall be for the sole benefit of Purchaser). 2.3     Purchase Price; Deposit. (a)     The aggregate amount of Purchasers payment to Sellers for the Owned Assets including the
Facilities (Purchase Price) shall be an amount equal to (A) the Net Proceeds, plus (B) the Payoff
Amount, plus (C) the First Additional Purchase Price Amount, plus (D) the Second Additional
Purchase Price Amount. The Purchase Price shall be paid on the Closing Date by wire transfer of
immediately available funds for disbursement to Sellers and to relevant lenders in accordance with
the allocations and wiring instructions to be set forth in the Closing Statement. (b)     As further consideration for the Owned Assets, Purchaser hereby agrees that on the Closing
Date, but effective as of and from the Cut-Off Time (as defined in Section 2.5), Purchaser shall
assume and indemnify and hold harmless each of the Sellers and each of their respective Affiliates
from and against all liabilities, indebtedness and obligations of Sellers of any kind or nature,
whether known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, due
or to become due, regardless of when asserted or incurred, excluding only the liabilities and
obligations of Sellers or their respective Affiliates arising pursuant to this Agreement, the other
Documents or the constituent documents of Sunrise Assisted Living Holdings, L.P. (SALH) (the
liabilities so assumed, the Assumed Liabilities). For certainty and without limitation, it is
agreed by the Purchaser that, as provided in Section 2.4(e) of this Agreement, any liabilities and
obligations of any of the Sellers arising out of the Implied Covenants shall be included in the
Assumed Liabilities. (c)     Upon execution of this Agreement by all parties hereto, Sunrise shall deposit, by wire
transfer of immediately available funds, with Torys LLP (Escrow Agent), Sixteen Million Canadian
Dollars (CAN$16,000,000) (the Deposit), in accordance with the - 8 -




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terms of the Escrow Agreement, dated of even date herewith, among Sunrise, the Sellers and Escrow
Agent. The Deposit shall be applied towards the Purchase Price on the Closing Date or paid to the
Sellers on December 31, 2004 if the Closing shall have not taken place by such date, except as
otherwise provided under Section 10.2(b). (d)     Purchaser and Sellers agree that CAN $152,224,138 of the Net Proceeds and the Payoff
Amount shall be allocated to the purchase of the Facilities and other assets from the Facility
Owners as follows (in Canadian Dollars): Amount
    
    Amount
    
    AmountNet Proceeds
    
    Allocated to
    
    Allocated to
    
    Allocated toand Payoff
    
    Lease
    
    Net Working
    
    Real PropertyAmount
    
    Receivables
    
    Capital
    
    & Other AssetsLynn Valley Owner
    
    CAN   $24,677,305
    
    CAN   $2,161,110
    
    CAN   $483,929
    
    CAN   $22,032,266Beacon Hill Owner
    
    CAN   $24,957,230
    
    CAN   $2,242,129
    
    CAN   $682,835
    
    CAN   $22,032,266Mississauga Owner
    
    CAN   $19,801,157
    
    CAN   $1,653,613
    
    CAN   $253,530
    
    CAN   $17,894,014Markham Owner
    
    CAN   $21,907,604
    
    CAN   $2,328,096
    
    CAN   $231,195
    
    CAN   $19,348,313Windsor Owner
    
    CAN   $20,036,220
    
    CAN   $1,798,097
    
    CAN   $778,782
    
    CAN   $17,459,341Richmond Hill
Owner
    
    CAN   $18,284,174
    
    CAN   $   952,514
    
    CAN   $881,469
    
    CAN   $16,450,191Oakville Owner
    
    CAN   $22,560,448
    
    CAN   $1,897,784
    
    CAN   $912,399
    
    CAN   $19,750,265Facility Owners
Total
    
    CAN $152,224,138
    
    CAN $13,033,343
    
    CAN $4,224,139
    
    CAN $134,966,656
 An amount equal to CAN$11,994,611 of the Net Proceeds, the Second Additional Purchase Price
Amount and the First Additional Purchase Price Amount shall be allocated to the purchase of the
Operating Leases and other assets of the Facility Operators in the following proportions: 27% to
BH Operator, 35% to Canada Operator and 38% to BNS Operator. Purchaser and Sellers agree to report
the transaction for all tax and financial reporting purposes consistently with such allocation. 2.4     As-Is, Where-Is, With All Faults Sale. Sunrise acknowledges and agrees as
follows: (a)     Sunrise has conducted (or has waived its right to conduct), and shall be entitled to
continue to conduct, such due diligence as Sunrise has deemed or shall deem necessary or
appropriate. Sunrise further acknowledges that Manager, a wholly-owned subsidiary of Sunrise, has
been managing the Facilities and Sunrise is, therefore, fully aware of the condition of the
Facilities and of the status of all their operations. Sunrise has had and will continue to have,
the right to conduct any inspections or investigations Sunrise desires with respect to the
Facilities. (b)     Except with respect to Sellers representations and warranties in Article - 9 -




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IV, the Owned Assets shall be sold, and Purchaser shall accept the Owned Assets and the Assumed
Liabilities on the Closing Date, AS IS, WHERE IS, WITH ALL FAULTS, with no right of setoff or
reduction in the Purchase Price. (c)     Without limiting the generality of the foregoing, Sellers advise Purchaser that certain of
the Owned Assets may be subject to restrictions as to their free transferability to Purchaser (all
such restrictions, the Transfer Restrictions), including without limitation:  (i)
    Certain contracts included among the
Owned Assets may contain explicit prohibitions on assignment
without the consent of the other party thereto, or may not be
assignable by operation of law absent such consent;(ii)
    To the extent the Owned Assets include
any Licenses, filing or registration with, or consent from, the
governmental authority issuing such Licenses may be required;(iii)
    Certain of the Owned Assets may be
subject to Liens other than those securing the indebtedness in
respect of which the Payoff Amount is to be paid;(iv)
    The Payoff Amount may not be sufficient
to discharge all Liens in respect of the indebtedness in
respect of which the Payoff Amount is to be paid;(v)
    The release of any Liens intended to be
discharged by the Payoff Amount may not occur simultaneously
with the Closing Date if the Payoff Amount is paid as of such
date; and(vi)
    Certain of the Owned Assets may not be
in the possession, custody or control of the Sellers. Purchaser specifically confirms its understanding that (1) Sellers have made no investigation as to
the existence of any Transfer Restrictions; (2) except as set forth in Section 5.4, Sellers shall
have no responsibility to cause the Transfer Restrictions to be satisfied, cured or discharged; (3)
the continuation of any Transfer Restrictions as of the Closing Date shall neither relieve
Purchaser of its obligations to consummate the transactions contemplated by this Agreement, nor
give Purchaser any right of counterclaim or setoff against any Seller; and (4) the provisions of
this paragraph (c) are an essential inducement to cause Sellers to enter into this Agreement. (d)     Except for Sellers representations and warranties in Article IV (Sellers Warranties),
Sellers have not made, nor shall Sellers be deemed to have made, any oral or written
representations, warranties, promises or guarantees (whether express, implied, statutory or
otherwise) to Sunrise with respect to the Owned Assets (including the Facilities), their value, or
any matter set forth, contained or addressed in the Documents (including, but not limited to, - 10 -




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the accuracy and completeness thereof). (e)      Notwithstanding the exclusion from the Assumed Liabilities of the liabilities and
obligations of the Sellers arising pursuant to the Documents, any liabilities and obligations of
any of the Sellers arising out of the Implied Covenants shall be included in the Assumed
Liabilities and consequently any Loss in connection therewith will be the subject matter of the
indemnity from the Purchaser provided in Section 9.2 of this Agreement. Implied Covenantsas
used in this Agreement means any covenants (including any releases), representations or warranties
in or arising as a result of the execution and delivery of the deeds contemplated in Section 8.3(a)
of this Agreement, including without limitation, as a result of any statutory provisions which may
be applicable thereto. (f)      Sunrise shall independently confirm to its satisfaction all information that it considers
material to its purchase of the Owned Assets (including the Facilities). In addition, Sunrise
expressly understands and acknowledges that it is possible that unknown liabilities may exist with
respect to the Facilities or be otherwise included among the Assumed Liabilities. Sunrise
explicitly took that possibility into account in determining and agreeing to the Purchase Price,
and a portion of such consideration, having been bargained for between parties with the knowledge
of the possibility of such unknown liabilities, is given in exchange for a full accord and
satisfaction and discharge of all such liabilities. Sunrise has also had all information necessary
to evaluate the value of the Owned Assets (including the Facilities) and their marketability.
Based on all such information and any other information Sunrise has desired to obtain and obtained,
Sunrise acknowledges that the Purchase Price is a fair price for the Owned Assets (including the
Facilities). Notwithstanding the foregoing, such acknowledgment is not intended to, and shall not
be construed to, (i) effect any contractual assumption of liability as to matters which are not
expressly assumed by Sunrise in this Agreement or the documents executed by the parties in
connection with the transactions contemplated in this Agreement, or (ii) affect or impair any
rights or remedies that Sunrise may have against Sellers as a result of a breach of any of Sellers
Warranties. (g)      Purchaser hereby waives any right pursuant to Part 4 of the Environmental Management Act,
SBC 2003, c.53 to receive or be provided with a site profile as contemplated therein. 2.5      Beneficial Ownership. (a)      General Statement. It is the intention of the parties to this Agreement that, as
of 12:00 a.m., September 1, 2004, Sunrise shall have accepted and assumed from Sellers all of the
benefits and burdens of operation of the Facilities. To the extent not expressly inconsistent with
the terms of this Agreement, the parties desire that all provisions of this Agreement be
interpreted so as to give effect, wherever possible, to the foregoing statement. For purposes of
this Agreement, the Cut-Off Time means 11:59 p.m., August 31, 2004. (b)      Expenditures; Capital Improvements. From the Cut-Off Time through the Closing
Date, if and to the extent any funds are needed to pay any expense of operation, maintenance or
repair, or to undertake any capital improvement, with respect to any Facility, or to satisfy any
liability (whether accrued or accruing) that either (1) is a liability of one of the - 11 -




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Sellers or (2) would, as of the Closing Date, be an Assumed Liability, Sunrise will advance such
funds to Sellers, in order to enable Sellers to pay such expense or capital cost or to satisfy such
liability. The parties confirm and acknowledge that the Purchase Price has already been adjusted
to give effect to Sellers obligations with regard to any such liabilities that accrued prior to
the Cut-Off Time. The aggregate amount payable by Sunrise hereunder is referred to as Sunrises
Gross Pre-Closing Obligations and the aggregate amount payable by Sunrise, net of any amounts
received in respect of clauses (i) through (iii) of paragraph (c) below, is referred to as
Sunrises Net Pre-Closing Payments. (c)      Revenues; Accounts Receivable; Proceeds. Sunrise will be entitled (i) to receive
all proceeds of insurance received after the Cut-Off Time arising out of any casualty, for repair,
replacement or rent loss; (ii) to collect and retain all accounts receivable arising from the
Facilities; and (iii) to retain all gross revenues received after the Cut-Off Time, to the extent
that the amounts set forth in clauses (i) through (iii) exceed the total amount of Sunrises Gross
Pre-Closing Obligations. Any such excess is referred to herein as Sunrises Net Pre-Closing
Benefit. (d)      Repayment. (i)      Sunrises Net Pre-Closing Payments will not be repayable by Sellers to Sunrise
except in the event of termination of this Agreement by Purchaser due to Sellers default
pursuant to Section 10.2(b)(i) hereof, in which event, and in addition to any other
remedies Purchaser may have hereunder, the amount of Sunrises Net Pre-Closing Payments
will be repaid to Sunrise on demand (after the date of termination) with interest at the
rate of twelve percent (12%) per annum from the date of date of each such payment. If
Closing occurs hereunder, any Sunrises Net Pre-Closing Payments will not be applied to the
Purchase Price or otherwise reduce the sums due to Sellers hereunder. (ii)      Sunrises Net Pre-Closing Benefit will not be repayable by Sunrise to Sellers
except in the event of termination of this Agreement by Sellers due to Purchasers default
pursuant to Section 10.2(a)(i) hereof, in which event, and in addition to any other
remedies Sellers may have hereunder, Sunrises Net Pre-Closing Benefit will be repaid to
Sellers on demand (after the date of termination) with interest at the rate of twelve
percent (12%) per annum from the date of accrual of each such benefit. If Closing occurs
hereunder, any Sunrise Net Pre-Closing Benefit will not increase the Purchase Price or
otherwise increase the sums due from Sunrise to Sellers hereunder. (e)     Rights and Obligations Personal to Sunrise. The rights and obligations of Sunrise
under this Section 2.5 are and will remain personal to Sunrise. No assignee of Sunrise will have
any liability to Sellers under this Section 2.5 nor be entitled to any benefit obtained by Sunrise
under this Section 2.5. - 12 -




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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUNRISE Sunrise represents and warrants to Sellers as follows: 3.1     Organization, Good Standing and Entity Authority. Sunrise is a corporation, duly
organized, validly existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate authority to own and operate its properties and carry on its business. 3.2     Authorization and Binding Effect of Documents. Purchaser (and its Affiliates)
have all requisite power and authority to enter into this Agreement (to the extent each is a
signatory hereto), and either have or will, as of the Closing Date, have all requisite power and
authority to enter into the other Documents to which they are a party and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this Agreement and each
of the other Documents by Purchaser and the consummation by Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action on the part of
Purchaser. This Agreement has been, and each of the other Documents at or prior to Closing will
be, duly executed and delivered by Purchaser. This Agreement constitutes (and each of the other
Documents, when executed and delivered, will constitute) the valid and binding obligation of
Purchaser enforceable against Sunrise in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of
creditors generally and to the exercise of judicial discretion in accordance with general
principles of equity, whether applied by a court of law or of equity. 3.3     Absence of Conflicts. The execution, delivery and performance by Purchaser of
this Agreement and the other Documents, and consummation by Purchaser of the transactions
contemplated hereby and thereby, do not and will not, to the best of Purchasers knowledge, (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, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, the provisions of any organizational
documents of Purchaser (or its Affiliates), any laws or regulations to which Sunrise (or its
Affiliates) is subject, or any indenture, mortgage, lease, loan agreement or other agreement or
instrument to which Purchaser (or its Affiliates) are subject. 3.4     Brokers or Finders Fees. No agent, broker, investment banker or other person or
firm acting on behalf of or under the authority of Purchaser or any Affiliate of Purchaser is or
will be entitled to any brokers or finders fee or any other commission or similar fee, directly
or indirectly, from Purchaser in connection with the transactions contemplated by this Agreement.
Purchaser agrees to indemnify and hold Sellers harmless from any Loss resulting from a breach of
this representation and warranty. Notwithstanding the provisions of Article IX below, such
agreement to indemnify shall survive the Closing without limitation. ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers represent and warrant to Sunrise as follows: 4.1     Organization and Good Standing. Each Seller that is a Facility Owner is a limited
company duly organized, validly existing and in good standing under the laws of Jersey, Channel - 13 -




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Islands. Each Facility Operator is a corporation duly organized, validly existing and in good
standing under the laws of the Province of New Brunswick, Canada. Sellers and the Facility
Operators have all requisite company or partnership power to own, operate and lease their
respective properties and carry on their respective businesses. 4.2     Authorization and Binding Effect of Documents. Sellers and their Affiliates
within the control of SALH have all requisite power and authority to enter into this Agreement (to
the extent each is a signatory hereto), and either have or will, as of the Closing Date, have all
requisite power and authority to enter into the other Documents to which Sellers are a party and to
consummate the transactions contemplated by this Agreement. The execution and delivery of this
Agreement and each of the other Documents by Sellers (and said Affiliates) and the consummation by
Sellers (and said Affiliates) of the transactions contemplated by this Agreement will be duly
authorized by all necessary company action on the part of such parties. This Agreement has been,
and each of the other Documents to which Sellers are a party at or prior to Closing will be, duly
executed and delivered by Sellers. This Agreement constitutes (and each of the other Documents,
when executed and delivered, will constitute) the valid and binding obligation of Sellers
enforceable against Sellers in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors
generally and to the exercise of judicial discretion in accordance with general principles of
equity, whether applied by a court of law or of equity. 4.3     Absence of Conflicts. The execution, delivery and performance by Sellers (and/or
their Affiliates) of this Agreement and the other Documents, and consummation by Sellers (and/or
their Affiliates) of the transactions contemplated hereby and thereby, do not and will not (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, (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 Sellers (and/or their Affiliates). 4.5     Brokers or Finders Fees. No agent, broker, investment banker, or other person
or firm acting on behalf of Sellers 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 Sellers in
connection with the transactions contemplated by this Agreement. Sellers agree to indemnify and
hold Sunrise, Sunrise REIT and their Affiliates harmless from any Loss resulting from a breach of
the representations and warranties set forth in this section. Notwithstanding the provisions of
Article IX below, such agreement to indemnify shall survive the Closing without limitation. ARTICLE V
OTHER COVENANTS 5.1      Notification of Certain Matters. Purchaser shall give prompt notice to Sellers,
and Sellers shall give prompt notice to Purchaser, of (i) the occurrence, or failure to occur, of
any event that would be likely to cause any of their respective representations or warranties
contained in this Agreement to be untrue or inaccurate in any material respect at any time from the
date hereof to the Closing Date, and (ii) any failure on their respective parts to comply with or
satisfy, - 14 -




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in any material respect, any covenant, condition or agreement to be complied with or satisfied
by any of them under this Agreement. 5.2     Publicity. The parties agree that no public release or announcement concerning
the transactions contemplated hereby shall be issued by any party without the prior written consent
of the other party, except as required by law or applicable regulations, and except as required by
Sunrise REIT or Sunrise in connection with the IPO or Sunrises securities disclosures. Sellers
hereby acknowledge prior receipt of a draft of the IPO prospectus, it being understood that Sellers
shall have no right to comment thereon. 5.3     Material Adverse Change. Sellers and Purchaser will promptly notify the other
party of any event of which Sellers or Purchaser, as the case may be, obtains knowledge which has
had or could reasonably be expected to have a Material Adverse Effect. It is specifically
understood that the occurrence of any event which has had or could reasonably be expected to have a
Material Adverse Effect shall not, of itself, give rise to grounds for termination of this
Agreement or otherwise result in the failure of a condition to Closing. 5.4     Reasonable Best Efforts; Further Assurances. (a)      Subject to the terms and conditions of this Agreement, each party will use its reasonable
best efforts to take all action and to do all things necessary, proper or advisable to satisfy any
condition hereunder in its power to satisfy and to consummate and make effective as soon as
practicable the transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, Sellers agree to use reasonable efforts to assist Purchaser in procuring any
necessary consents, filings or other efforts to remove or satisfy any of the Transfer Restrictions,
it being understood that Purchaser bears the responsibility for identifying any such Transfer
Restrictions, shall be principally responsible for addressing the same and bears the risk that the
same shall not have been removed or satisfied prior to Closing; (b)      From time to time before, at and after the Closing, each party, at its expense and without
further consideration, will execute and deliver such documents as reasonably requested by the other
party in order more effectively to consummate the transactions contemplated hereby. (c)      Except as otherwise expressly set forth herein: (1) Purchaser shall be responsible for
paying any out-of-pocket expenditures, including legal fees, filing costs and similar expenses paid
by Purchaser or Sellers (at Purchasers request) in the course of removing any Transfer
Restrictions; (2) Sellers shall not be required to take any actions that would increase their
liability resulting from this transaction beyond the scope of liability contemplated by this
Agreement; and (3) Sellers shall not be required to take any actions inconsistent with the
provisions of this Agreement. 5.5      No Recordation. Sellers and Purchaser each agree that neither this Agreement nor
any memorandum or notice hereof shall be recorded and Purchaser agrees (a) not to file any notice
of pendency or other instrument (other than a judgment) against the Facilities or any portion
thereof in connection herewith and (b) to indemnify Sellers against all liabilities - 15 -




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(including reasonable attorneys fees, expenses and disbursements) incurred by Sellers by reason of
the filing by Purchaser of such notice of pendency or other instrument. Notwithstanding the
foregoing, if the same is permitted pursuant to applicable laws, Purchaser shall be entitled to
record a notice of lis pendens or certificate of pending litigation if Purchaser is entitled to
seek (and is actually seeking) specific performance of this Agreement by Sellers in accordance with
the terms of Section 10.3 hereof. 5.6      Personal Property Levels. From the date hereof until the Closing Date, Sunrise
will cause to continue to manage and operate the Facilities consistent with prior practice,
including maintaining levels of Personal Property on hand at the Facilities materially in keeping
with the levels previously maintained. 5.7       Taxes. (a)      Purchaser shall prepare and timely file all Tax Returns for calendar year 2004 of the
Facility Owners and Facility Operators due on or after the date of this Agreement, subject to
giving Sellers a period of not less than fifteen (15) days prior to their due date for review and
comment (it being understood that the Tax Returns so delivered shall not be unreasonably rejected
by Sellers). Except as set forth in the following sentence, Purchaser shall timely pay any Tax due
with respect to such Tax Returns as well as any services or sales Taxes payable in connection with
the transactions contemplated by this Agreement. SALH (or its equity holders) shall pay all income
Taxes of the Facility Owners and Facility Operators due solely as a result of the transactions
contemplated by this Agreement (including any Canadian withholding taxes resulting from
distributions of proceeds from the Facility Owners or Facility Operators (or their respective
successors) to SALH) and any operating taxes of the Facility Owners and Facility Operators until
August 31, 2004, except any Taxes arising as a result of a payment to a Seller under Section
2.5(b). Purchaser shall be entitled to any Tax refunds related to such Tax Returns, except for
Taxes paid as a result of the transactions contemplated by this Agreement and any operating taxes
of the Facility Owners and Facility Operators until August 31, 2004, which shall be paid to
Sellers. (b)      Sellers and Purchaser consent to, and shall provide cooperation with, SALH in timely
filing Internal Revenue Service Forms 8832 (Entity Classification Election) on or immediately after
the Closing Date to treat the Sellers as disregarded entities for U.S. federal income tax purposes
under U.S. Treasury regulations under Section 7701 of the Internal Revenue Code of 1986, as
amended, with such election to be made effective (i) for the Facility Owners as of the date of
execution of this Agreement by the parties hereto, (ii) for the Nova Scotia unlimited liability
companies that will be the successors to the Facility Operators as of the Closing Date and (iii)
for the British Virgin Islands companies that will be the successors to the Facility Owners as of
their dates of formation. Sellers and Purchaser further consent to, and shall provide cooperation
with, (1) SALH in causing each of the Facility Operators to continue as Nova Scotia corporations
and to then be arranged to form Nova Scotia unlimited liability companies that are wholly-owned by
SALH with such continuation and arrangement to be made effective within three (3) business days
prior to the Closing Date, and (2) SALH in causing the Facility Owners to continue as one or more
newly formed British Virgin Islands companies that are wholly-owned by SALH with such continuation
to be made effective as soon as is practicable - 16 -




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following (x) the Closing Date and (y) the withdrawal of SSLII from SALH as described in
Section 8.7. Purchaser acknowledges that Sellers need to be assured that the Closing will occur
within the foregoing three-business-day period relating to the continuation and arrangement of the
Facility Operators because the continuation and arrangement will be the taxable event for US tax
purposes (i.e., a liquidation). The presently anticipated timetable for certain of the
continuations, arrangements and elections described above, and for the approvals, release of
proceeds, liquidations and dissolutions set forth in paragraphs (c) and (e) below, is attached
hereto as Exhibit G. Such Exhibit may from time to time be modified or supplemented by
consent of the parties, such consent not to be unreasonably withheld, conditioned or delayed.
Sellers agree that the responsibility for preparing the documents to effect such continuations,
arrangements and elections, and the costs relating to the preparation and filing of such documents,
shall be borne by SALH. (c)      Prior to Closing, Purchaser shall diligently work with Sellers to obtain, at Sellers
expense, all tax clearance certificates necessary from any governmental authority to effectuate the
transactions contemplated by this Agreement including but not limited to the distribution of the
Net Proceeds, First Additional Purchase Price Amount and Second Additional Purchase Price Amount.
Without limiting the generality of the foregoing, Purchaser and Sellers shall use their best
efforts to obtain approval of the CRA for the transactions contemplated hereby such that no
withholding will be required in connection with the transactions contemplated hereby (the CRA
Clearance) and that the sales proceeds distributed by the Facility Operators shall not be subject
to a withholding Tax rate in excess of the applicable US/Canada treaty rate in effect for those
ultimate indirect investors in SALH (as identified in a written notice to Sunrise by a majority in
interest of the Class B Limited Partners in SALH on or prior to the Closing Date), it being
understood and acknowledged that obtaining such approval shall not be a condition precedent to
Purchasers obligation to consummate the transactions. The Parties will co-operate to direct a
portion of the Purchase Price to the CRA as of the Closing in an amount sufficient to satisfy the
CRAs estimate of Tax liabilities to become due, to permit the receipt of the CRA Clearance prior
to the release of funds to Sellers at the Closing. Any sales proceeds withheld at Closing for
payment of such Taxes but not required for the payment of such Taxes will be released as directed
by SALH. In the event that the CRA Clearance shall not have been obtained by the Closing Date,
Purchaser shall co-operate with Sellers to implement a suitable alternative structure (elected by
Sellers) for payment of the Purchase Price; provided that no such alternative shall (1) be
inconsistent with applicable law (including Canadian tax law) or (2) require Purchaser to expend
any sums. (d)     Sellers and Purchaser shall timely provide the other with such cooperation and assistance
as may reasonably be requested by the other in connection with the preparation of any Tax Return,
any audit or other examination by any Taxing Authority, or any judicial or administrative
proceedings relating to liability for Taxes including such reasonable cooperation (including the
provision or filing of certificates) that would reduce any Tax payable as a result of the Closing. (e)      SALH shall be responsible for preparing any documents and taking any actions to cause SALH
and the Sellers to be liquidated and dissolved. It is understood that the officers and directors
of Purchaser and Sellers shall make themselves reasonably available to execute any documents
required to be delivered in connection with such liquidations and - 17 -




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dissolutions. The parties will co-operate to determine the best time for each such liquidation and
dissolution, subject to Section 5.7(g) below, but in no event prior to the time designated by SALH,
and further, the Sellers shall not be liquidated prior to the expiration of the one-year period for
survival of representations and warranties contemplated by Section 9.1 (assuming no claim for
indemnity pursuant to Article IX shall then be pending). SALH shall be responsible for the costs
required to maintain the Sellers in existence during this period, except as provided under Section
5.7(g) below. Until the earlier of (x) the liquidation of SALH or (y) December 31, 2006, Purchaser
(or its Affiliate) will continue to provide accounting services to SALH consistent with past
practice for the purposes of the maintenance, liquidation and dissolution of existing entities as
contemplated by this Section 5.7(e). SALH will obtain an acknowledgement and release from its
Class B Limited Partners and Thomas Moak (and will use reasonable efforts to obtain a similar
acknowledgement and release from its Class A Limited Partners) in connection with the distribution
of proceeds to such partners, to the effect that the amount so distributed represents payment in
full of all amounts to which such partners are entitled. (f)      The Sellers and Purchaser will jointly execute an election under Section 167 of the Excise
Tax Act (Canada) in the form prescribed by that Act and the Purchaser will file it with the CRA on
or before the date required by that Act so that the Goods and Services Tax (GST) imposed under
Part IX of that Act is not payable in respect of the purchase and sale of the Owned Assets
contemplated by this Agreement. The Purchaser will indemnify the Sellers for any tax, penalty and
interest that may be assessed against the Sellers as a result of a failure by the Purchaser to file
the election on or before the date required by that Act or as a result of a determination that the
election was not available for any reason other than the inaccuracy of any representation or
warranty made by the Sellers pursuant to this Agreement. The Purchaser confirms that it is
registered for GST purposes, and will make its GST registration number available to the Sellers
upon request. The Purchaser further confirms that it will self-assess and pay all GST, Ontario
Retail Sales Tax and British Columbia Social Services Tax resulting from the transactions
contemplated by this Agreement. (g)      Subject to arriving at definitive agreements as contemplated by Exhibit I below,
the Lynn Valley Owner and the Beacon Hill Owner (as the same may be continued or merged in
accordance with Section 5.7(b) above) will not be dissolved in consequence of the transactions
contemplated by this Agreement and will continue to hold registered title to the Lynn Valley
Facility and the Beacon Hill Facility, respectively, notwithstanding the transfer of beneficial
ownership of such Facilities to Purchaser or its designee at the Closing. Purchaser shall be
solely responsible for the costs of maintaining the corporate existence of the Lynn Valley Owner
and the Beacon Hill Owner under this Section 5.7(g). Sellers and Purchaser shall cooperate in
effecting the foregoing nominee arrangement, including without limitation the execution of
customary agreements to effect the arrangements and transaction steps listed on Exhibit I. - 18 -




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ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER TO CLOSE Purchasers obligations to close the transactions contemplated in this Agreement and to
acquire the Owned Assets (including the Facilities) pursuant to the terms of this Agreement are
subject to the satisfaction, on or prior to the Closing Date or such earlier date specified, of
each of the following conditions, unless waived by Purchaser in writing: 6.1      Accuracy of Representations and Warranties. The representations and warranties of
Sellers contained in this Agreement or in any other Document shall be true and correct in all
material respects on the date hereof, and at the Closing Date with same effect as though made at
such time, except for changes permitted hereunder. 6.2      Delivery of Closing Documents. No later than five (5) business days prior to the
Closing Date, Sellers shall have delivered, or caused to be delivered, each of the documents
required to be delivered pursuant to Section 8.3. ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO CLOSE The obligations of Sellers to close the transactions contemplated in this Agreement and to
transfer the Owned Assets (including the Facilities) pursuant to the terms of this Agreement are
subject to the satisfaction, on or prior to the Closing Date, or such earlier date specified, of
each of the following conditions, unless waived by Sellers in writing: 7.1      Accuracy of Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement shall be true and correct in all material respects on the
date hereof, and at the Closing Date with the same effect as though made at such time, except for
changes permitted hereunder. 7.2      Delivery of Closing Documents. No later than five (5) business days prior to the
Closing Date, Purchaser shall have delivered, or caused to be delivered, each of the documents
required to be delivered pursuant to Section 8.2. ARTICLE VIII
CLOSING 8.1      Time and Place. Closing of the purchase of the Owned Assets (including the
Facilities) pursuant to this Agreement (the Closing) shall take place at such location within
Toronto, Ontario, as Sunrise may designate in the Closing Notice on or before the earlier of (x)
the IPO Closing, (y) December 31, 2004, or (z) such earlier date as may be specified in the Closing
Notice (the Closing Date). Time is of the essence of the terms of this Section. 8.2      Documents to be Delivered to Sellers by Sunrise. No later than five (5) business
days prior to the Closing Date, Purchaser shall deliver or cause to be delivered to Sellers (or to - 19 -




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Escrow Agent for delivery to Sellers at the Closing) the following, duly executed and
acknowledged, where applicable, and in each case in form and substance reasonably satisfactory to
Sellers or in the form attached hereto as an Exhibit: (a)      Governmental certificates, dated as of a date as near as practicable to the date of their
delivery, showing that Sunrise is in good standing in its jurisdiction of organization. (b)      A certificate of the Secretary or Assistant Secretary of Sunrise attesting as to the
incumbency of each officer who executes this Agreement and any of the other Documents, certifying
that resolutions and consents necessary for Sunrise 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)      Such additional information and materials as Sellers shall have reasonably requested to
evidence the satisfaction of the conditions to Purchasers obligations hereunder, including without
limitation, evidence that all consents and approvals required under, and subject to the
qualifications of, this Agreement as a condition to Sellers obligation to close hereunder have
been obtained. (d)      The As-Is Certificate of Sunrise in the form attached hereto as Exhibit B. (e)      Closing Statement. The Closing Statement in the form attached hereto as
Exhibit C (the Closing Statement). (f)      Assignment Agreements. Assignment and assumption agreements in the forms attached
hereto as Exhibit D (collectively, the Assignment Agreements), executed by Purchaser. 8.3      Deliveries to Sunrise by Sellers. No later than five (5) business days prior to
the Closing Date, Sellers deliver or cause to be delivered to Sunrise (or to Escrow Agent for
delivery to Sunrise at the Closing), the following, duly executed and acknowledged, where
applicable, and in each case in form and substance reasonably satisfactory to Sunrise or such other
party or in the form attached hereto as an Exhibit: (a)      Deeds conveying fee title to each of the Facilities in, executed by the Facility Owners
named therein in the form attached hereto as Exhibit F, subject to the implementation of
the penultimate sentence of Section 5.7(g) regarding title holding as nominees. (b)      Bills of Sale as to all Personal Property in the form attached hereto as Exhibit
E, executed by the Facility Owners and the Facility Operators. (c)      The Assignment Agreements, executed by the applicable Facility Owners and the Facility
Operators. - 20 -




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(d)     Governmental certificates from a governmental authority in the Province of New Brunswick,
being the jurisdiction of formation of the Facility Operators, dated as of a date as near as
practicable to the date of their delivery, showing that the Facility Operators are duly
incorporated, are not dissolved and have filed their Annual Reports and paid their filing fees to
date or that no Annual Report or filing fee is due until a date subsequent to the date of such
certificate. Governmental Certificates, dated as of a date as near as practicable to the date of
their delivery, showing that the Facility Owners are duly organized and in good standing in their
respective jurisdictions of formation, or such reasonably equivalent good standing certificates
as are commonly made available for Jersey limited companies. (e)     A certificate of the Secretary or Assistant Secretary of each of the Sellers attesting as
to the incumbency of each officer of Sellers who executes this Agreement and any of the other
Documents and to similar customary matters. (f)     Terminations (or assignments, at Purchasers option) of the Operating Leases executed by
Facility Owners and Facility Operators. (g)     Such additional information, assignments, conveyances and materials as Purchaser shall
have reasonably requested to evidence the satisfaction of the conditions to its obligations
hereunder, including, without limitation, any (i) resignations of officers, directors or partners
from Facility Owners and Facility Operators or any other entities, and (ii) removal of signatories
on bank accounts or other financial accounts. (h)     The Closing Statement. 8.4     Purchase Price. On or before the Closing Date, provided that all conditions
precedent to closing have been satisfied or otherwise waived, Sunrise (or an Affiliate) shall
deposit the Purchase Price, less the amount of the Deposit, with the Title Company or Escrow Agent
or other settlement agent for payment on the Closing Date to Sellers (and with respect to the
Payoff Amount component of the Purchase Price, to relevant lenders). 8.5     Closing Costs. Purchaser shall pay its attorneys fees and expenses.
Irrespective of whether the transactions contemplated by this Agreement are consummated (other than
in the case of a termination of this Agreement by Purchaser due to Sellers default pursuant to
Section 10.2(b) or Section 10.6 hereof), Purchaser shall also pay SALH an amount equal to
CAN$850,000 in respect of the fees and expenses incurred by Sellers in connection with the
structuring of the transactions contemplated hereby, the preparation and delivery of this Agreement
and the Documents and the consummation of the transactions contemplated hereby (such amount to be
disbursed by SALH as it sees fit). The foregoing CAN$850,000 payment will be reduced by payments
made by Purchaser at Sellers request prior to the Closing Date (including such payments made prior
to the date of this Agreement). All costs of the Title Insurer to insure title, and the cost of
owners title insurance policies, all GST, county or state transfer or recording taxes, if any, and
costs associated with licensing or removing or satisfying any of the Transfer Restrictions will be
paid by Purchaser. - 21 -




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8.6     SALH Wind-Up and Dissolution. Notwithstanding anything set forth in this
agreement to the contrary, SALH shall be responsible for the out-of-pocket costs of winding up and
dissolution of SALH, the Facility Owners and the Facility Operators (and their respective
successors) in accordance with the terms of the constituent documents of SALH. 8.7     Withdrawal of SSLII from SALH. Purchasers Affiliate, Sunrise Senior Living
Investments, Inc., a Virginia corporation (SSLII), is the General Partner and the sole Class C
Limited Partner in SALH. The general and limited partnership Interests in SALH held by SSLII are
hereinafter referred to as the SSLII Interests. Immediately following Closing, Purchaser shall
cause the withdrawal of SSLII from SALH and the assignment of the SSLII Interests, for no
additional consideration, by SSLII to an Affiliate of Sellers designated by Sellers, pursuant to an
Assignment and Withdrawal Agreement in the form attached hereto as Exhibit H. Following
such assignment and withdrawal, SSLII shall have no further rights or obligations under the
partnership agreement and other constituent documents of SALH, its being understood and
acknowledged that the foregoing withdrawal and release of SSLII shall not limit or otherwise affect
the rights and obligations of Purchaser under this Agreement, including without limitation
Purchasers obligation to cooperate in the wind-up and dissolution of SALH and to provide
post-Closing accounting services to SALH in accordance with Section 5.7. Promptly following the
assignment of the SSLII Interest and the withdrawal of SSLII from SALH, SLH shall file and
prosecute in Delaware (and any other appropriate jurisdiction) a partnership name change to remove
the reference to Sunrise Assisted Living from SALHs corporate and trade names. ARTICLE IX
INDEMNIFICATION 9.1     Survival. All representations, warranties, covenants and agreements in this
Agreement or any other Document will survive the Closing for a period of one (1) year, except that
the covenants set forth in Section 5.7 will extend until sixty (60) days after the expiration of
the applicable statute of limitations. Except as expressly set forth in Article X, the rights to
indemnification set forth in this Article IX shall be exclusive of all other rights to
monetary damages that any party (or the partys successors or assigns) would otherwise have by
statute or common law in connection with the transactions contemplated by this Agreement or any
other Document. 9.2     Indemnification by Sunrise. Sunrise will indemnify, defend, and hold harmless
Sellers and their respective officers, directors, employees, Affiliates, successors and assigns
from and against, and pay or reimburse each of them for and with respect to, any Loss relating to,
arising out of or resulting from any of the following: (a)     Any breach by Sunrise of any of its representations, warranties, covenants or agreements
in this Agreement or any other Document; or (b)     The operation of the Facilities after the Cut-Off Time, including without limitation any
of the Assumed Liabilities or any Taxes relating to the Owned Assets after the Cut-Off Time. - 22 -




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9.3     Indemnification by Sellers. Sellers shall indemnify and hold harmless Purchaser
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 breach by Sellers of any of their representations, warranties,
covenants or agreements in this Agreement or any other Document. 9.4     Administration of Indemnification. For purposes of administering the
indemnification provisions set forth in Sections 9.2 and 9.3 the following procedure shall
apply: (a)     Whenever a claim shall arise for indemnification under this Article, the party entitled to
indemnification (the Indemnified Party) shall reasonably promptly give written notice to the
party from whom indemnification is sought (the Indemnifying Party) setting forth in reasonable
detail, to the extent then available, the facts concerning the nature of such claim and the basis
upon which the Indemnified Party believes that it is entitled to indemnification hereunder. (b)     In the event of any claim for indemnification resulting from or in connection with any
claim by a third party, the Indemnifying Party shall be entitled, at its sole expense, either (i)
to participate in defending against such claim or (ii) to assume the entire defense with counsel
which is selected by it and which is reasonably satisfactory to the Indemnified Party provided that
(A) the Indemnifying Party agrees in writing that it does not and will not contest its
responsibility for indemnifying the Indemnified Party in respect of such claim or proceeding and
(B) no settlement shall be made and no judgment consented to without the prior written consent of
the Indemnified Party, which shall not be unreasonably withheld. If, however, (i) 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 (ii) 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 (i) of the preceding sentence, 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. (c)     If the Indemnifying Party does not choose to defend against a claim by a third party, the
Indemnified Party may defend in such manner as it deems appropriate or settle the claim (after
giving notice thereof to the Indemnifying Party) on such terms as the Indemnified Party may deem
appropriate, and the Indemnified Party shall be entitled to periodic reimbursement of defense
expenses incurred and prompt indemnification from the Indemnifying Party in accordance with this
Article. (d)     Failure or delay by an Indemnified Party to give a reasonably prompt notice of any claim
(if given prior to expiration of any applicable survival period) 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. - 23 -




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##### 



(e)     The provisions of this Section 9 shall survive the Closing hereunder indefinitely (except
to the extent a shorter period of time is expressly indicated above). ARTICLE X
DEFAULT AND TERMINATION 10.1     Covenant to Close. Sunrise hereby covenants and agrees that whether or not
Sunrise REIT closes on an IPO, and whether or not Sunrise has obtained the CRA Clearance described
in Section 5.7(c), Sunrise shall be obligated to close on the transactions contemplated by this
Agreement, including the purchase of the Facilities in accordance with the terms of this Agreement,
no later than December 31, 2004. 10.2     Remedies upon Default. (a)     If, at any time prior to the Closing, Purchaser materially defaults on any of its
obligations hereunder, and such default continues for ten (10) business days after written notice
thereof specifying such default, Sellers may, by serving notice in writing to Sunrise in the manner
provided in this Agreement, either:  (i)
    Terminate this Agreement and declare it null and void, in which
event the Escrow Agent will promptly deliver the Deposit to Sellers in
accordance with the Escrow Agreement, and Sellers will be entitled to pursue
Purchaser for any monetary damages in excess of the Deposit; or(ii)
    Consummate the transactions contemplated by this Agreement in
the same manner as if there had been no such defaults without any increase in
the Purchase Price; provided that the foregoing shall not waive any right of
the Sellers to indemnity for any such defaults pursuant to Article IX. From and after the Closing, the provisions of this Section 10.2(a) shall be inapplicable and
Sellers recourse shall be limited to the provisions of Article IX. (b)     If, at any time prior to the Closing, any Seller materially defaults on any of its
obligations hereunder, and such default continues for ten (10) business days after written notice
thereof specifying such default, Purchaser may, by serving notice in writing to Sellers in the
manner provided in this Agreement, either:  (i)
    Terminate this Agreement and declare it null and void, in which
event the Escrow Agent will promptly deliver the Deposit to Purchaser in
accordance with the Escrow Agreement, and Purchaser will be entitled to pursue
Seller for any monetary damages; or(ii)
    Consummate the transactions contemplated by this Agreement in
the same manner as if there had been no such defaults without any reduction in
the - 24 -




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##### 



Purchase Price; provided that the foregoing shall not waive any right of
Purchaser to indemnity for any such defaults pursuant to Article IX. From and after the Closing, the provisions of this Section 10.2(b) shall be inapplicable and
Purchasers recourse shall be limited to the provisions of Article IX. 10.3     Specific Performance; Liquidated Damages. (a)     Sellers understand that, subject only to the satisfaction of the conditions set forth in
Article VII, the obligation to sell the Owned Assets (including the Facilities) to Purchaser on the
Closing Date is unconditional, and that time is of the essence. (b)     If, notwithstanding the satisfaction of the conditions set forth in Article VII, Sellers
fail to consummate the transactions contemplated by this Agreement as of the Closing Date, then, at
Purchasers option, either:  (i)
    Sellers specifically agree that Purchaser will be entitled to
enforcement of this Agreement by a decree of specific performance or injunctive
relief requiring Sellers to fulfill their obligations under this Agreement to
sell the Facilities to Purchaser or its designee; or(ii)
    Purchaser may, by serving notice in writing to Sellers and
Escrow Agent in the manner provided in this Agreement, cause the Escrow Agent
to return the Deposit to Purchaser, and in addition recover liquidated damages
from Sellers in the amount of Twenty Million US Dollars (US$20,000,000),
Sellers and Purchaser hereby acknowledging and agreeing that the monetary
damages which Purchaser would suffer as a result of such default and
termination would be difficult, if not impossible, to determine and that the
liquidated damages provided for herein are a fair and reasonable estimation of
such damages. 10.4     Obligations Upon Termination. Upon termination of this Agreement, each party
shall thereafter remain liable for breach of this Agreement prior to such termination. If this
Agreement is terminated by mutual consent without any breach by either party hereto, each of the
parties shall be liable and responsible for any costs incurred by it in connection with the
transactions contemplated by this Agreement. 10.5     Termination Notice. Each notice given by a party to terminate this Agreement
shall specify the Section of Article X 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 Section of Article X, the Section pursuant to which such notice is given and
termination is effected shall be deemed to be the section or sections 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. - 25 -




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10.6     Notice of Breach; Sellers Right to Cure. If, prior to the Closing, Purchaser
obtains actual knowledge that any of Sellers Warranties is untrue, inaccurate or incorrect in any
material respect, Purchaser shall give Sellers written notice thereof within five (5) business days
of obtaining such knowledge (but, in any event, prior to the Closing). If, prior to the Closing,
Sellers obtains actual knowledge that any of Purchasers Warranties are untrue, inaccurate or
incorrect in any material respect, Sellers shall give Purchaser written notice thereof within five
(5) business days of obtaining such knowledge (but, in any event, prior to the Closing). In either
such event, Sellers or Purchaser, as the case may be (the Breaching Party), shall have the right
to cure such misrepresentation or breach and shall be entitled to an adjournment of the Closing
(not to extend beyond the IPO Closing or December 31, 2004, whichever is earlier) for the purpose
of such cure. If the Breaching Party is unable to so cure any misrepresentation or breach, then
Purchaser or Sellers, as the case may be (the Non-Breaching Party), as its sole remedy for any
and all such materially untrue, inaccurate or incorrect material representations or warranties,
shall elect either (a) to waive such misrepresentations or breaches of representations and
warranties by the Breaching Party and consummate the purchase and sale of the Owned Assets
(including the Facilities), without any reduction of or credit against the Purchase Price, or (b)
to terminate this Agreement by written notice given to the Breaching Party, whereupon (1) this
Agreement shall be terminated and (2) the Non-Breaching Party shall be entitled to pursue the
Breaching Party for any monetary damages. 10.7     Limitation on Sellers Liability. Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of Sellers for breaches of Sellers Warranties
shall be limited to Twenty Million US Dollars (US$20,000,000). Notwithstanding the foregoing,
however, if the Closing occurs, Purchaser hereby expressly waives, relinquishes and releases any
right or remedy available to it at law, in equity, under this Agreement or otherwise to make a
claim against Sellers for damages that Purchaser may incur, or to rescind this Agreement, as the
result of any of Sellers Warranties being untrue, inaccurate or incorrect if: (a) Purchaser knew
or is deemed to know that such representation or warranty was untrue, inaccurate or incorrect at
the time of the Closing, or (b) Purchasers damages as a result of such representations or
warranties being untrue, inaccurate or incorrect are reasonably estimated to aggregate less than
US$500,000.00. ARTICLE XI
MISCELLANEOUS 11.1     Notices. All notices, demands or other communications given hereunder shall be
in writing and shall be sufficiently given if delivered by courier (including overnight delivery
service) or sent by registered or certified mail, first class, postage prepaid, addressed as
follows: (a)     If to Sellers, to: Sprout Group
One Madison Avenue, 7th Floor
New York, NY 10010
Attn: Janet Hickey - 26 -




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##### 



and to: DLJ Real Estate Capital Partners
Eleven Madison Avenue, 16th Floor
New York, NY 10010
Attn: Steven Carter with a copy to: Michael Flynn, Esq.
Sonnenschein Nath & Rosenthal LLP
1221 Avenue of the Americas
New York, New York 10020 and to: Sunrise Senior Living Investments, Inc.
c/o Sunrise Senior Living, Inc.
7902 Westpark Drive
McLean, Virginia 22102
Attention: John Gaul, General Counsel with a copy to: Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102 (b) If to Sunrise REIT, to: Sunrise Senior Living Real Estate Investment Trust
7900 Westpark Drive, Seventh Floor
McLean, Virginia 22102
Attention: Douglas MacLatchy with a copy to: Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102 - 27 -




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(c)     If to Sunrise: Sunrise Senior Living, Inc.
7902 Westpark Drive
McLean, Virginia 22102
Attention: John Gaul, General Counsel with a copy to: Wayne G. Tatusko, Esq.
Watt, Tieder, Hoffar & Fitzgerald, L.L.P.
8405 Greensboro Drive, Suite 100
McLean, Virginia 22102 (d)     If to Title Insurer, to: First Canadian Title Insurance Company
2235 Sheridan Garden Drive
Oakville, ON L6J 7Y5
Attention: Mr. Paul Miron (e)     If to Escrow Agent, to: Torys, LLP
79 Wellington Street West
Suite 3000, TD Center
Box 270
Toronto, ON M5K 1N2
Attention: Paul M. Kennedy, Esq. or such other address as a party may from time to time notify the other party in writing (as
provided above). Any such notice, demand or communication shall be deemed to have been given (i)
if so mailed, as of the close of the third business day following the date so mailed, and (ii) if
delivered by courier, on the date received. 11.2     Entire Agreement. This Agreement (which is confirmed to include all the Exhibits
hereto) 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. 11.3     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 and 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 their
respective - 28 -




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##### 



successors or permitted assigns any rights, remedies, obligations or liabilities under or by reason
of this Agreement. 11.4     Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by either party without the prior written consent of the
other party, provided that Sunrise may assign all of its rights under this Agreement to an
Affiliate or to Sunrise REIT or an entity controlled, directly or indirectly, by Sunrise REIT,
provided that (i) the representations and warranties of Sunrise hereunder shall be true and correct
in all material respects as applied to the assignee, (ii) Sunrise shall execute and deliver to
Sellers a written instrument in form and substance satisfactory to Sellers within their reasonable
judgment in which Sunrise agrees to continue to be liable for performance of all of Sunrises
obligations so to be assigned under this Agreement, and (iii) Sunrise and the assignee shall
deliver such other documents and instruments as reasonably requested by Sellers, including
appropriate certified resolutions of the boards of directors of Sunrise and the assignee. Sellers
acknowledge and agree that Sunrise (or its assignee) may designate that the Facilities be sold on
the Closing Date to one or more designees without such designees actually being assignees of this
Agreement or assuming any obligations of Sunrise hereunder. 11.5     Governing Law. This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of Delaware without regard to its principles of conflicts
of laws, provided, however, that, in the event Purchaser or Sellers breach this
agreement and such breach relates to a particular Facility, neither Purchaser nor Sellers shall be
precluded from exercising any rights or remedies which it may have under the laws of the
jurisdiction in which such Facility is located. 11.6     Amendments and Waivers. No term or provision of this Agreement may be amended,
waived, discharged or terminated orally but only by an instrument in writing signed by the party
against whom the enforcement of such amendment, waiver, discharge or termination is sought. Any
waiver shall be effective only in accordance with its express terms and conditions. 11.7     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 law
now or hereafter in effect which renders any provision hereof unenforceable in any respect. 11.8     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. 11.9     Counterparts. This Agreement may be executed in any number of counterparts, and
by any party on separate counterparts, each of which shall be an original, and all of which
together shall constitute one and the same instrument. - 29 -




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##### 



11.10     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. 11.11     Exhibits. Unless otherwise specified herein, each Exhibit referred to in this
Agreement is attached hereto, and each such Exhibit is hereby incorporated by reference and made a
part hereof as if fully set forth herein. 11.12     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 court. For purposes of this Agreement, 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. 11.13     Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY PROCEEDINGS
BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THE TRANSACTION, THIS AGREEMENT, THE PROPERTY OR THE RELATIONSHIP OF SELLERS AND PURCHASER
HEREUNDER. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE CLOSING (AND NOT BE MERGED THEREIN) OR
ANY EARLIER TERMINATION OF THIS AGREEMENT. 11.14     Facsimile Signatures. Signatures to this Agreement transmitted by telecopy
shall be valid and effective to bind the party so signing. Each party agrees to promptly deliver
an execution original to this Agreement with its actual signature to the other party, but a failure
to do so shall not affect the enforceability of this Agreement, it being expressly agreed that each
party to this Agreement shall be bound by its own telecopied signature and shall accept the
telecopied signature of the other party to this Agreement. [SIGNATURE PAGES FOLLOW] - 30 -




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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed
as of the date first written above. PURCHASER:SUNRISE SENIOR LIVING, INC.,
a Delaware corporationBy:/s/ Thomas B. Newell
Name:Thomas B. Newell
Title: President
    [ADDITIONAL SIGNATURE PAGES FOLLOW] - 31 -




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##### 



SELLERS:SUNRISE OF LYNN VALLEY LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerSUNRISE OF BEACON HILL LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerSUNRISE OF MISSISSAUGA LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerSUNRISE OF MARKHAM LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive Officer
  [ADDITIONAL SIGNATURE PAGES FOLLOW] - 32 -




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SUNRISE OF WINDSOR LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerSUNRISE OF RICHMOND HILL LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerSUNRISE OF OAKVILLE LIMITEDBy: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerS.A.L. OPERATIONS B.H. INC.By: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title:Chief Executive OfficerS.A.L. OPERATIONS (CANADA) INC.By: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive OfficerS.A.L. OPERATIONS B.N.S. INC.By: /s/ Thomas M. Moak
Name: Thomas M. Moak
Title: Chief Executive Officer
  - 33 -




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##### 



EXHIBIT LIST Exhibit A
    
    Municipal Addresses and Legal DescriptionLynn Valley FacilityBeacon Hill FacilityMississauga FacilityMarkham FacilityWindsor FacilityRichmond Hill FacilityOakville FacilityExhibit B
    
    Form of Sunrises As-Is CertificateExhibit C
    
    Form of Closing StatementExhibit D
    
    Form of Assignment AgreementsD-1      Assignment of Contracts and Assumption of ContractsD-2      Assignment of Landlords Interest in LeasesD-3      Assignment of Tenants Interest in LeasesExhibit E
    
    Form of Bill of SaleExhibit F
    
    Forms of DeedF-1      Lynn Valley FacilityF-2      Beacon Hill FacilityF-3      Mississauga FacilityF-4      Markham FacilityF-5      Windsor FacilityF-6      Richmond Hill FacilityF-7      Oakville FacilityExhibit G
    
    Transaction TimelineExhibit H
    
    Assignment and Withdrawal AgreementExhibit I
    
    Agreements Regarding Nominees
 - 34 -




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EXHIBIT A
TO
PURCHASE ANDSALE AGREEMENT Municipal Address and Legal Description  British
ColumbiaFacility
    
    
    Municipal Address
    
    
    Legal DescriptionBeacon Hill
    
    
    920 Humboldt Street
Victoria, BC
    
    
    Lot A, of Lots 338, 339, 340, 341,
342, 343, 1231, 1232, 1233 and 1234,
Victoria City, Plan 27547 Except
Part in Plan 42102Lynn Valley
    
    
    940 Lynn Valley Road
North Vancouver, BC
    
    
    Lot 3, Block 13, District Lot 2025, Group 1, New Westminster District,
Plan LMP47707
   OntarioFacility
    
    
    Municipal Address
    
    
    PIN
    
    
    Legal DescriptionMarkham
    
    
    38 Swansea Road
Unionville, ON
    
    
    02964-0011 (LT)
    
    
    Parcel 127-1,
Section 65M2520
being Block 127 on
Plan 65M2520, Town
of Markham02964-0008 (LT)
    
    
    Part of Lot 10,
Concession 6, Town
of Markham as
described in
R63820202964-0009 (LT)
    
    
    Part of Lot 10,
Concession 6, Town
of Markham as
described in
MA9810502964-0010 (LT)
    
    
    Part of Lot 10,
Concession 6, Town
of Markham as
described in
MA41774Mississauga
    
    
    1273 & 1279
Burnhamthorpe
Road East
Mississauga, ON
    
    
    13307-0326 (LT)
    
    
    Part of Lots 44 &
45, Plan 381,
designated as Part
5 on Plan
43R-23740, City of
Mississauga13307-0322 (LT)
    
    
    Part of Lots 45, 46
& 47, Plan 381,
designated as Part
4 on Plan
43R-23740, City of
Mississauga13307-0320 (LT)
    
    
    Part of Lot 48,
Plan 381,
designated as Part
3 on Plan
43R-23740, City of
Mississauga
 A-1




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##### 



OntarioFacility
    
    
    Municipal Address
    
    
    PIN
    
    
    Legal DescriptionOakville
    
    
    456 Trafalgar Road
Oakville, ON
    
    
    24816-0097 (LT)
    
    
    Part of Lots 13 &
14, Conc 3 south of
Dundas Street,
designated as Parts
6 & 7 on Plan
20R-13457, Town of
Oakville24816-0345 (LT)
    
    
    Part of Blocks 117
& 118, Plan 62,
designated as Parts
5, 6 & 7 on Plan
20R-12743, Town of
Oakville24816-0099 (LT)
    
    
    Part of Old Mill
Road closed by
By-law 2000-035,
designated as Parts
8, 9 & 10 on Plan
20R-13457, Town of
OakvilleRichmond Hill
    
    
    9800 Yonge Street
Richmond Hill, ON
    
    
    03156-0501 (LT)
    
    
    Block 3 on Plan
65M2368, save and
except Part 1 on
plan 65R-10347 and
parts 2 & 3 on plan
65R-23458, Town of
Richmond HillWindsor
    
    
    5065 Riverside
Drive East
Windsor, ON
    
    
    01086-0167 (LT)
    
    
    Part of Lot 111,
Conc 1 Sandwich
East designated as
Parts 1, 2 & 3 on
Plan 12R-10366,
City ofWindsor01086-0172 (LT)
    
    
    Part of Lot 111,
Conc 1 Windsor
designated as Part
10 on Plan
12R-17731, City of
Windsor
  A-2




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EXHIBIT B
TO
PURCHASE ANDSALE AGREEMENT Form of Sunrises As-Is Certificate Form of Purchasers As-Is Certificate and Agreement PURCHASERS AS-IS CERTIFICATE AND AGREEMENT THIS PURCHASERS AS-IS CERTIFICATE AND AGREEMENT (this Agreement), is made as of ,
2004 by Sunrise Senior Living, Inc., a Delaware corporation (Sunriseor Purchaser) to and for the
benefit of (Seller). RECITALS WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement, dated as of
, 2004, by and among Purchaser and certain Sellers specified therein, Sunrise
Senior Living, Inc., a Delaware corporation (Sunrise), (the Purchase Agreement), Sellers agreed
to sell to Purchaser, inter alia, the Owned Assets, as more particularly described in the Purchase
Agreement. Initially capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement; and WHEREAS, the Purchase Agreement requires, inter alia, that, as a condition precedent to
Sellers obligations under the Purchase Agreement, Purchaser shall execute and deliver this
Agreement to Seller at Closing. NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser
hereby certifies and agrees as follows: 1. For purposes of this Agreement, the following terms shall have the following meanings: Purchasers Representatives shall mean Purchaser and Sunrise REIT, as well as any
direct or indirect owner of any beneficial interest in Purchaser or Sunrise REIT, and any officers,
directors, employees, agents, representatives and attorneys of Purchaser or Sunrise REIT, or any
such direct or indirect owner of any beneficial interest (but only those officers, directors,
employees, agents, representatives and attorneys that are engaged in the Due Diligence for or other
services in connection with the transactions contemplated by the Purchase Agreement). deemed to know (or words of similar import) shall have the following meaning:  (a)
    Purchaser shall be deemed to know of the existence of a fact or circumstance
to the extent that: B-1




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##### 



(i)
    any Purchasers Representative knows of such fact or
circumstance, or(ii)
    such fact or circumstance is disclosed by the Purchase
Agreement, any documents executed by Seller for the benefit of Purchaser in
connection with the Closing, or any Documents actually delivered to Purchaser.  (b)
    Purchaser shall be deemed to know that any Sellers Warranty is untrue,
inaccurate or incorrect to the extent that:  (i)
    any Purchasers Representative has actual, conscious knowledge
of information which is inconsistent with such Sellers Warranty, or(ii)
    the Purchase Agreement, any documents executed by Sellers for
the benefit of Purchaser in connection with the Closing, or any Documents
actually delivered to Purchaser contains information which is inconsistent with
such Sellers Warranty. Documents shall mean the documents and instruments applicable to the Facilities or
any portion thereof that Seller or any of the other Seller Parties deliver or make available to
Purchaser or Purchaser Representatives prior to Closing or which are in the possession of or
otherwise obtained by Purchaser or Purchasers Representatives prior to Closing. Due Diligence shall mean examinations, inspections, investigations, tests, studies,
analyses, appraisals, evaluations and/or investigations with respect to the Owned Assets, the
Documents, and other information and documents regarding the Owned Assets, including, without
limitation, examination and review of title matters, applicable land use and zoning laws and other
laws applicable to the Owned Assets, the physical condition of the Owned Assets, and the economic
status of the Owned Assets. Hazardous Materials shall mean any substance, chemical, waste or material that is or
becomes regulated by any federal, state or local governmental authority because of its toxicity,
infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or reactivity, including,
without limitation, methane and other landfill gasses, asbestos or any substance containing more
than 0.1 percent asbestos, the group of compounds known as polychlorinated biphenyls, flammable
explosives, oil, petroleum or any refined petroleum product. Liabilities shall mean, collectively, any and all problems, conditions, losses,
costs, damages, claims, liabilities, expenses, demands or obligations of any kind or nature
whatsoever. Property Documents shall mean, collectively, (a) leases, (b) contracts, and (c) any
other documents or instruments which constitute, evidence or create any portion of the Real
Property. Seller Parties shall mean and include, collectively, (a) Sellers; (b) their counsel;
(c) any direct or indirect owner of any beneficial interest in Sellers; (d) any officer, director,
employee, or agent of Sellers, their counsel, or any direct or indirect owner of any beneficial
interest in B-2




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##### 



Sellers; and (e) any other entity or individual affiliated or related in any way to any of the
foregoing. Sellers Warranties shall mean Sellers representations and warranties set forth in
(a) the Purchase Agreement and (b) any documents executed by Seller for the benefit of Purchaser in
connection with the Closing, as the same may be deemed modified or waived by Purchaser pursuant to
the terms of the Purchase Agreement. 2. Purchaser acknowledges and agrees that, prior to the date hereof (the date of Closing under
the Purchase Agreement): (a) without limiting any rights or remedies that Purchaser may have
against Sellers as a result of a breach of any of Sellers Warranties, Purchaser had access to, the
Facilities and all books, records and files of the Manager of the Facilities; (b) Purchaser has
conducted (or has waived its right to conduct) all Due Diligence (including Due Diligence with
respect to Hazardous Materials) as Purchaser considered necessary or appropriate; (c) Purchaser has
reviewed, examined, evaluated and verified the results of its Due Diligence to the extent it deems
necessary or appropriate with the assistance of such experts as Purchaser deemed appropriate; (d)
Purchaser has determined to its satisfaction the assignability of any Documents to be assigned as
part of the transactions contemplated in the Purchase Agreement; and (e) except for, and only to
the extent of, Sellers Warranties, is acquiring the Interests based exclusively upon its own Due
Diligence and its awareness of the conditions of the Owned Assets and of the status of all of the
operations of the Facilities. 3. Purchaser acknowledges and agrees that, except for, and only to the extent of, Sellers
Warranties:  (a)
    The Facilities are being sold, and Purchaser is accepting possession of the
Facilities on the date hereof, AS IS, WHERE IS, WITH ALL FAULTS, with no right of
setoff or reduction in the Purchase Price.(b)
    None of the Seller Parties have or shall be deemed to have made any verbal or
written representations, warranties, promises or guarantees (whether express, implied,
statutory or otherwise) to Purchaser with respect to the Owned Assets, their value, any
matter set forth, contained or addressed in the Documents (including, but not limited
to, the accuracy and completeness thereof) or the results of Purchasers Due Diligence.(c)
    Purchaser has confirmed independently all information that it considers
material to its purchase of the Owned Assets.(d)
    Purchaser is not relying on (and Sellers and each of the other Seller
Parties does hereby disclaim and renounce) any representations or warranties of any
kind or nature whatsoever, whether oral or written, express, implied, statutory or
otherwise, from Sellers or any other Seller Parties, as to:  (i)
    the operation or performance of the Owned Assets, the income
potential, economic status, uses, or the merchantability, habitability or
fitness of any B-3




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portion of the Owned Assets for a particular purpose;(ii)
    the physical condition of the Real Property or the condition or
safety of the Facilities or any component thereof, including, but not limited
to, plumbing, sewer, heating, ventilating and electrical systems, roofing, air
conditioning, foundations, soils and geology, including Hazardous Materials,
lot size, or suitability of the Facilities or any component thereof for a
particular purpose;(iii)
    the presence or absence, location or scope of any Hazardous
Materials in, at, about or under the Real Property;(iv)
    whether the appliances, if any, plumbing or utilities are in
working order;(v)
    the habitability or suitability for occupancy of any structure
and the quality of its construction;(vi)
    whether the improvements are structurally sound, in good
condition, or in compliance with applicable Laws;(vii)
    the accuracy of any statements, calculations or conditions
stated or set forth in the Documents, other books and records concerning the
Owned Assets, or any of Sellers offering materials with respect to the
foregoing;(viii)
    the dimensions of the Facilities or the accuracy of any floor plans, square
footage, lease abstracts, sketches, or revenue or expense projections related
to the Facilities;(ix)
    the locale of the Facilities, the leasing market for the
Facilities, or the market assumptions Purchaser utilized in its analysis of the
Facilities and determination of the value of the Facilities and the Purchase
Price (such as rental rates, leasing costs, vacancy and absorption rates, land
values, replacement costs, maintenance and operating costs, financing costs,
etc.);(x)
    whether the Facilities are or would likely constitute a target
of terrorist activity or other acts of war;(xi)
    the ability of Purchaser to obtain any and all necessary
governmental approvals or permits for Purchasers intended use and development
of the Real Estate and the Facilities;(xii)
    the leasing status of the Facilities or the intentions of any
parties with respect to the negotiation and/or execution of any lease for any
portion of the Property; and(xiii)
    Sellers ownership of any portion of the Owned Assets. B-4




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(e)
    Except as set forth in the Purchase Agreement, Sellers are under no duty to make
any affirmative disclosures or inquiry regarding any matter which may or may not be
known to either Seller or any of the other Seller Parties, and Purchaser, for itself
and for its successors and assigns, hereby specifically waives and releases Sellers and
each of the other Seller Parties from any such duty that otherwise might exist. 4.      Without limiting any rights or remedies that Purchaser may have against Sellers as a result
of a breach of any of Sellers Warranties, any repairs or work required by Purchaser are the sole
responsibility of Purchaser, and Purchaser agrees that there is no obligation on the part of Seller
to make any changes, alterations or repairs to the Real Property or the Facilities, including,
without limitation, to cure any violations of Law, comply with the requirements of any insurer or
otherwise. Purchaser is solely responsible for obtaining any certificate of occupancy or any other
approval or permit necessary for the transfer or occupancy of the Real Property and the Facilities
and for any repairs or alterations necessary to obtain the same, all at Purchasers sole cost and
expense. 5.      Without limiting any rights or remedies that Purchaser may have against Seller as a result
of a breach of any of Sellers Warranties and except as expressly provided hereinbelow in this
Section 5, Purchaser, for Purchaser and Purchasers successors and assigns, hereby releases
Sellers and each of the other Seller Parties from, and waives any and all Liabilities against
Sellers and each of the other Seller Parties for or attributable to or in connection with the Owned
Assets, whether arising or accruing before, on or after the date hereof and whether attributable to
events or circumstances which have heretofore or may hereafter occur, including, without
limitation, the following: (a)      any and all statements or opinions heretofore or hereafter made, or information
furnished, by the Seller Parties to Purchaser or any of Purchasers Representatives; (b)      any and all Liabilities with respect to the structural, physical, or environmental
condition of the Real Property or the Facilities; (c)      any and all Liabilities relating to the release of or the presence, discovery or
removal of any Hazardous Materials in, at, about or under the Real Property, or for,
connected with or arising out of any and all claims or causes of action based upon CERCLA
(Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
§§9601 et seq., as amended by SARA (Superfund Amendment and Reauthorization Act of 1986) and
as may be further amended from time to time), the Resource Conservation and Recovery Act of
1976, 42 U.S.C. §§6901 et seq., or any related claims or causes of action or any other
federal, state or municipal based statutory or regulatory causes of action for environmental
contamination at, in, about or under the Real Property; (d)      any and all tort claims made or brought with respect to the Real Property,
the Facilities or the use or operation thereof; B-5




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(e)      any implied or statutory warranties or guaranties of fitness, merchantability or
any other statutory or implied warranty or guaranty of any kind or nature regarding or
relating to any portion of the Owned Assets; and (f)      any and all Liabilities relating to the condition or status of the Facility Owners
title to the Facilities. Nothing contained in the covenants of this Agreement, including, but not limited to, the release
and waiver set forth in this Section 5 is intended or shall be construed to affect or
impair any rights or remedies that Purchaser may have against Sellers as a result of a breach of
any of Sellers Warranties; nor is such release and waiver intended to, and such release and waiver
shall not be construed to, effect any contractual assumption of liability as to matters which were
are not expressly assumed by Purchaser in the documents executed by Purchaser in connection with
the transactions contemplated by the Purchase Agreement. 6.      Purchaser expressly understands and acknowledges that it is possible that unknown
Liabilities may exist with respect to the Facilities or be otherwise included among the Assumed
Liabilities and that Purchaser explicitly took that possibility into account in determining and
agreeing to buy the Owned Assets and pay the Purchase Price, and that a portion of such
consideration, having been bargained for between parties with the knowledge of the possibility of
such unknown Liabilities has been given in exchange for a full accord and satisfaction and
discharge of all such Liabilities. Purchaser has also had all information necessary to evaluate the
value of the Owned Assets and their respective marketability. Based on all such information and any
other information Purchaser has desired to obtain, Purchaser acknowledges that the Purchase Price
is a fair price for the Owned Assets. 7.      Purchaser acknowledges and agrees that the provisions of this Agreement were a material
factor in Sellers agreement to sell the Owned Assets and to accept the Purchase Price and, while
Sellers have made the Documents available to Purchaser and cooperated with Purchaser, Sellers are
unwilling to sell the Owned Assets unless Sellers and the other Seller Parties are expressly
released as set forth in Section 5. 8.      This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns. 9.      If any term or provision of this Agreement or the application thereof to any persons or
circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforced to the fullest extent permitted by law. 10.      This Agreement is in addition to and in no way replaces or is in lieu of the covenants,
representations and warranties set forth in the Purchase Agreement, including but not
limited to those in Section 2.4 thereof. B-6




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IN WITNESS WHEREOF, Purchaser has executed this Agreement as of the date first set forth
hereinabove. PURCHASER:
SUNRISE SENIOR LIVING, INC., a 
Delaware corporationBy:Name:Title: B-7




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EXHIBIT C
TO
PURCHASE ANDSALE AGREEMENT Form of Closing Statement




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EXHIBIT D
TO
PURCHASE ANDSALE AGREEMENT Forms of Assignment Agreements D-1
    
    Assignment of Contracts and Assumption of ContractsD-2
    
    Assignment of Landlords Interest in LeasesD-3
    
    Assignment of Tenants Interest in Leases




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EXHIBIT E
TO
PURCHASE ANDSALE AGREEMENT Form of Bill of Sale




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EXHIBIT F
TO
PURCHASE ANDSALE AGREEMENT Forms of Deed F-1
F-2
F-3
F-4
F-5
F-6
F-7
    
    Lynn Valley Facility
Beacon Hill Facility
Mississauga Facility
Markham Facility
Windsor Facility
Richmond Hill Facility
Oakville Facility




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EXHIBIT G
TO
PURCHASE ANDSALE AGREEMENT Transaction Timeline




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EXHIBIT H
TO
PURCHASE ANDSALE AGREEMENT Assignment and Withdrawal Agreement




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EXHIBIT I
TO
PURCHASE ANDSALE AGREEMENT Agreements Regarding Nominees