Document:

EX 10.5

    
      
        
          
            
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          EXHIBIT
            10.5

          

          

          

          

          

          

          PURCHASE
            AND SALE AGREEMENT

          

          by
            and among

          

          Town
            Village Leawood, LLC,

          Town
            Village Arlington, L.P.,

          Town
            Village Dallas, L.P.

          and

          Town
            Village Fort Worth, L.P.,

          collectively
            as Seller

          

          and

          

          ARC
            Cypress LLC,

          a
            Tennessee limited liability company,

          as
            Purchaser

           

          
            
               

            

            
              
              

              
                

              

            

            
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          INDEX

          

          
            	 	 	
                    Page
                      

                  
	
                    1.

                  	
                    Agreement

                  	
                    1

                  
	
                    2.

                  	
                    Property

                  	
                    1

                  
	
                    3.

                  	
                    Consideration

                  	
                    2

                  
	
                    4.

                  	
                    Earnest
                      Money

                  	
                    3

                  
	
                    5.

                  	
                    Purchaser's
                      Investigation

                  	
                    5

                  
	
                    6.

                  	
                    Warranties
                      and
                      Representations of Seller

                  	
                    8

                  
	
                    7.

                  	
                    Warranties
                      and
                      Representations of Purchaser

                  	
                    8

                  
	
                    8.

                  	
                    Additional
                      Covenants of
                      Seller

                  	
                    10

                  
	
                    9.

                  	
                    Condemnation
                      and
                      Casualty

                  	
                    10

                  
	
                    10.

                  	
                    Closing

                  	
                    11

                  
	
                    11.

                  	
                    Closing
                      Costs

                  	
                    13

                  
	
                    12.

                  	
                    Prorations
                      and Credits to
                      be Made at Closing

                  	
                    14

                  
	
                    13.

                  	
                    Indemnity

                  	
                    16

                  
	
                    14.

                  	
                    Remedies

                  	
                    16

                  
	
                    15.

                  	
                    Real
                      Estate
                      Commissions

                  	
                    18

                  
	
                    16.

                  	
                    Notices

                  	
                    18

                  
	
                    17.

                  	
                    Assignment

                  	
                    19

                  
	
                    18.

                  	
                    Effective
                      Date

                  	
                    19

                  
	
                    19.

                  	
                    Miscellaneous

                  	
                    19

                  

          

          

          EXHIBITS

          

          Exhibit
            A Legal
            Description of the Property

          Exhibit
            B Exceptions
            to Warranties and Representations

          Exhibit
            C Form
            of
            Special Warranty Deed

          Exhibit
            D Bill
            of
            Sale and Assignment

          Exhibit
            E Form
            of
            Residency Agreement

          

          Schedule
            I Property
            Information

           

          
            
               

            

            
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            PURCHASE
              AND SALE AGREEMENT

             

            THIS
              PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into by and
              among
Town
              Village Leawood, LLC
              (“Tract
              One Seller”), Town
              Village Arlington, L.P.
              (“Tract
              Two Seller”), Town
              Village Dallas, L.P.
              (“Tract
              Three Seller”) and Town
              Village Forth Worth, L.P.
              (“Tract
              Four Seller”), and ARC
              Cypress, LLC,
              a
              Tennessee limited liability company ("Purchaser"), as of the Effective
              Date (as
              hereinafter defined). Tract One Seller, Tract Two Seller, Tract Three
              Seller and
              Tract Four Seller are hereinafter collectively
              referred
              to as “Seller”.

             

            1.    Agreement.
              For and
              in consideration of the mutual benefits enjoyed by each of the parties
              to this
              Agreement and of the payment by Purchaser to Seller of One Hundred
              and No/100ths
              Dollars ($100.00) in cash, which payment shall be credited against
              the
              Consideration (as hereinafter defined) at Closing (as hereinafter defined)
              but
              which shall otherwise be nonrefundable to Purchaser, Seller agrees
              to sell and
              convey to Purchaser, and Purchaser agrees to purchase and accept conveyance
              of,
              the Property (as hereinafter defined) pursuant to the terms and conditions
              herein set forth.

            

            2.    Property.
              The
              property which is the subject of this Agreement (collectively, the
              "Property")
              is as follows: 

             

            
              	
                    	a.	
                      the
                        fee simple title in and to the four (4) tracts of land described
                        on
                        Exhibit A attached hereto, together with all of Seller's
                        right, title and
                        interest, if any, in and to all easements, tenements, hereditaments,
                        privileges, and appurtenances, in any way belonging or relating
                        to the
                        same (each of said tracts being individually referred to
                        herein as a
                        “Tract” and being collectively referred to as the “Land”);
                        

                    

            

             

            
              	
                    	b.	
                      To
                        the extent owned by the Seller, any and all oil, gas or other
                        minerals or
                        mineral rights relating to such Land or to the surface or
                        subsurface
                        thereof;

                    

            

             

            
              	
                    	c.	
                      Any
                        and all buildings, structures and other improvements presently
                        located
                        upon or affixed to the Land (collectively, the
                        "Improvements");

                    

            

             

            
              	
                    	d.	
                      All
                        personal property, fixtures, vehicles, buses and equipment
                        owned by Seller
                        which are located upon and used in connection with the ownership
                        or
                        operation of the Improvements or the Land (the
                        "Personalty");

                    

            

             

            
              	
                    	e.	
                      All
                        of Seller’s right, title and interest as landlord in any and all leases,
                        occupancy agreements, residency agreements and licenses granting
                        possessory rights in, on or covering the Land or the Improvements
                        (the
                        "Leases");

                    

            

             

            
              	
                    	f.	
                      To
                        the extent assignable, all of Seller’s right, title and interest in, if
                        any, and to all other agreements currently
                        in effect that
                        relate to the ownership, use, leasing, management, advertising,
                        security,
                        maintenance, or
                        operation of the Land, Improvements or Personalty, except
                        to the extent
                        the same are terminable by Seller at or before the Closing
                        with not more
                        than thirty-one (31) days prior written
                        notice

                    

            

             

             

            
              
                 

              

              
                
                

                
                  

                

              

              
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            pursuant
              to the terms thereof and constitute Rejected Agreements pursuant to
              Section 5(e)
              below (the "Property Agreements");
              

             

            
              	
                    	g.	
                      To
                        the extent assignable and relating solely
                        to
                        the ownership, development, use, maintenance or operation
                        of the Land,
                        Improvements, Personalty, Leases or Property Agreements,
                        all of Seller’s
                        right, title and interest, if any, in and to all (i) plans,
                        models,
                        drawings, specifications, surveys, engineering reports and
                        other technical
                        descriptions or materials that are in the possession of Seller
                        or its
                        representatives (the "Plans"); (ii) warranties, guaranties,
                        indemnities
                        and claims (the "Warranties"); (iii) certificates of occupancy,
                        certificates of compliance (including those relating to compliance
                        by the
                        Property with all laws, rules and regulations governing access
                        for the
                        handicapped), licenses, permits, franchises and similar rights
                        issued by
                        any federal, state or municipal authority (the "Permits");
                        (iv)
                        rights to use the name “Town Village” for the Improvements
                        only;
                        and (v) all other claims or causes of action in favor of
                        or for the
                        benefit of Seller (the "Intangibles"); and

                    

            

             

             

            
              	
                    	h.	
                      the
                        extent assignable, all of Seller’s right, title and interest in, if any,
                        any
                        other tangible or intangible asset of any kind or nature
                        primarily used in
                        connection with the ownership or operation of the Property
                        or the
                        Improvements that is not specifically identified as an Excluded
                        Asset (as
                        hereinafter defined).

                    

            

             

            The
              Property includes all of the assets owned by Seller and used in the
              operation of
              the Improvements except for the following, and only the following,
              assets and
              rights of Seller (the "Excluded Assets"), which shall not be sold,
              transferred,
              assigned or delivered to Purchaser:

            

            (a)    All
              cash
and
              receivables of
              the
              Seller;

            

            (b)    All
              documents, drafts and records received or prepared in connection with
              the
              planning and sale of the Property, including bids received from
              third-parties;

            

            (c)    the
              organizational documents and other partnership records and documents
              having to
              do with the organization of each Seller; and

            

            (d)    the
              rights that accrue, or will accrue, to the Seller under this
              Agreement  
              and any
              other agreements relating to the sale of the Property or otherwise  
              delivered in connection with this Agreement; and

             

            (e)    any
              rights under any Intangibles that Seller may need to defend itself 
              from, or
              enforce, claims or costs arising prior to the Closing Date.

            

            3.    Consideration.
              Seller
              agrees to accept and Purchaser agrees to pay as consideration for the
              sale of
              the Property (the "Consideration"), subject to the terms of this Agreement,
              One
              Hundred Forty-Six Million Two Hundred Eighty-Six Thousand Five Hundred
              and
              No/100ths Dollars ($146,286,500.00). The Consideration shall be allocated
              among
              the various Tracts as indicated on Exhibit
              A.

             

            
              
                 

              

              
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            The
              Consideration (less any credits thereto provided hereby) shall be payable
              at
              Closing by wire transfer or other immediately available funds. At Closing,
              Purchaser shall be entitled to a credit against the Consideration for
              the
              non-refundable consideration paid to Seller pursuant to Section 1 above,
              and the
              Earnest Money (as hereinafter defined) paid to Seller in accordance
              with the
              terms of this Agreement.

             

            Except
              for the liabilities, obligations or commitments specifically and expressly
              assumed by Purchaser in this Agreement or the Deed or the Bill of Sale,
              Purchaser shall not assume, or become responsible in any way for, any
              other
              liabilities, commitments or obligations of Seller, or any other liabilities
              or
              obligations that relate in any way to the Property or the ownership
              or operation
              of all or any portion of the Property prior to the Closing Date (each,
              an
              "Excluded Liability"). The Seller shall remain solely responsible for
              the
              Excluded Liabilities, and shall pay, discharge or satisfy the Excluded
              Liabilities as the same come due.

             

            4.    Earnest
              Money. 

             

            
              	
                    	a.	
                      On
                        or before the Close of Business one (1) day after the Effective
                        Date,
                        Purchaser shall deposit with Texas United Title, Inc., 901
                        South Mopac
                        Expressway, Building One, Suite 540, Austin, Texas 78746,
                        Attention:
                        Deedee King (the "Title Company"), the amount of Five Million
                        Five Hundred
                        Thousand Dollars ($5,500,000.00) as earnest money (together
                        with all
                        interest accrued thereon, the "Earnest Money"). The Earnest
                        Money shall be
                        applied against the Consideration at Closing but shall otherwise
                        be
                        nonrefundable to Purchaser unless Seller defaults or breaches
                        hereunder. Purchaser shall pay the Earnest Money in cash
                        (by means of wire
                        transfer). As used in this Agreement, the term "Close of
                        Business" shall
                        mean 5:00 p.m. in Austin, Texas on the date in question.
                        If Purchaser
                        fails to timely deliver the Earnest Money on or before the
                        Close of
                        Business on the date that the same is due and owing, Seller
                        shall have the
                        right to terminate this Agreement by notice thereof to Purchaser
                        at any
                        time prior to the receipt of such Earnest Money, and retain
                        so much of the
                        Earnest Money as Purchaser has delivered, as Seller's sole
                        remedy
                        hereunder, and thereupon this Agreement shall be null and
                        void and neither
                        party shall have any liability or obligation hereunder to
                        the other.
                        

                    

            

             

            
              	
                    	b.	
                      The
                        Title Company shall hold the Earnest Money in an escrow capacity
                        on behalf
                        of Purchaser and Seller, in accordance with the terms of
                        this Agreement.
                        In the event the Closing does not occur, the Title Company
                        shall disburse
                        the Earnest Money in accordance with this Agreement. The
                        Earnest Money
                        shall be deposited by the Title Company into a separate interest-bearing
                        account at a bank acceptable to Purchaser and Seller whose
                        accounts are
                        insured by the FDIC in the name of the Title Company as escrow
                        agent for
                        Purchaser and Seller but over which the Title Company shall
                        have sole
                        signature power. 

                    

            

             

            5.    Purchaser's
              Investigation.
              

             

            
              	
                    	a.	
                      Seller's
                        Title.
                        Purchaser acknowledges and confirms that it has heretofore
                        received a
                        Commitment of Title Insurance covering the Land prepared
                        by the Title
                        Company
                        (the
                        “Commitment”) pursuant to which First American Title Company or Fidelity
                        National Title Insurance Company commits to issue to Purchaser
                        an Owner’s
                        Policy of Title Insurance (the “Title Policy”) at Closing, subject only to
                        the following

                    

            

             

             

            
              
                 

              

              
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            matters:
              (i) the standard printed exception pertaining to restrictive covenants
              affecting
              the land described or referred to therein, unless there are no such
              restrictive
              covenants, in which event such exception shall be deleted; (ii) the
              standard
              printed exception pertaining to discrepancies, conflicts, or shortages
              in area
              or boundary lines, or any encroachments, or any overlapping of improvements;
              provided that, at Purchaser’s request and sole expense, the same may be modified
              to except only as to "shortages in area"; (iii) the standard printed
              exception
              for taxes for the year of closing and subsequent years, and subsequent
              assessments for prior years due to change in land usage or ownership,
              all of
              which will be assumed and paid by Purchaser; (iv) any discrepancies,
              conflicts,
              or shortages in area or boundary lines, or any encroachments or any
              overlapping
              of improvements and other matters that a true, correct and complete
              survey would
              reveal; provided, that at Purchaser’s request and sole expense, such exceptions
              shall be modified to reflect only matters shown on the Survey; (v)
              all
              governmental regulations and restrictions, including building and zoning
              ordinances; (vi) subject to the provisions of Section 5(e) hereof,
              any
              covenants, conditions, reservations, exceptions and easements, and
              all oil, gas
              and mineral conveyances and leases, if any, in effect and shown of
              record in the
              county clerk's office where the Property, or any part thereof, is located,
              and
              (viii) any other title exceptions permitted as Permitted Exceptions
              as provided
              in Section 5(e) hereof (collectively, “Permitted Exceptions”). Contemporaneously
              with the delivery of the Commitment, the
              Title
              Company Seller
              shall also
              deliver
              to
              Purchaser
              legible
              copies of all instruments identified in the Commitment. 

             

            
              	
                    	b.	
                      Survey.
                        Purchaser acknowledges and confirms that it has heretofore
                        received a
                        survey of each Tract
                        (collectively,
                        the “Survey). 

                    

            

             

            
              	
                    	c.	
                      Documents
                        Relating to the Property.
                        Seller
                        has delivered to Purchaser
                        (or caused to be posted on Seller's restricted access website)
                        the
                        documents and materials, to the extent the same exist and
                        are in Seller’s
                        actual possession, on Schedule I attached to this Agreement.
                        Seller shall
                        periodically deliver updated documents and materials on Schedule
                        I as
                        required by Section 10.

                    

            

             

            
              	
                    	d.	
                      On-Site
                        Inspections.
                        At all times prior to the Closing or the earlier termination
                        of this
                        Agreement, Purchaser shall have the right, at Purchaser's
                        expense, to
                        conduct all on-site inspections of the Property determined
                        by Purchaser to
                        be necessary or appropriate to determine whether the Property
                        is suitable
                        for Purchaser's intended use, including, without limitation,
                        the Phase I
                        (but not Phase II) testing and inspection of the Property
                        (and its
                        subsurface) for any environmental contamination and for its
                        suitability
                        for development, the taking of ground water and core samples,
                        soil tests,
                        topographical and fault studies, and all other surveys, studies,
                        tests and
                        analysis desired by Purchaser. Subject to the limitations
                        set forth
                        herein, Seller hereby grants to Purchaser and its designated
                        agents or
                        contractors the right to enter upon the Property to perform
                        such
                        inspections, tests and other studies; provided, that (i)
                        Purchaser shall
                        repair any physical damage to the Property resulting therefrom;
                        (ii)
                        Purchaser shall and hereby does indemnify and hold Seller
                        harmless from
                        and against any damage, claim, cause of action, liability,
                        cost
                        (including, without

                    

            

             

             

            
              
                 

              

              
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            limitation,
              reasonable attorneys' fees and court costs) or other obligation caused
              by
              Purchaser's entry upon or inspection of the Property; (iii) Purchaser
              shall not
              contact any tenants without Seller’s prior written consent and shall
              not
              interfere with the business or operations of any tenants at the Property,
              (iv)
              any such inspection, test or study shall be subject to written notice
              received
              by Seller at least 24 hours prior to the inspection, and (v) Seller
              shall have
              the right to have a representative present throughout any such inspection.
              The
              obligation of Purchaser to indemnify Seller under this Section 5(d)
              shall
              survive the Closing or any earlier termination of this Agreement.

             

            
              	
                    	e.	
                      Notice
                        of Objections.
                        Purchaser has no further objections to any matters reflected
                        on the most
                        recent Commitment or the most recent Survey,
                        and all such matters shall be considered "Permitted Exceptions,"
                        provided,
                        however, that Seller shall be obligated to remove any lien
                        securing a
                        liquidated amount agreed
                        to by Seller (“Monetary
                        Liens”) from the Consideration payable at Closing.
                        

                    

            

             

            On
              the
              Effective Date, Purchaser shall deliver a list of any and all of the
              Property
              Agreements and Brookdale Agreements (as hereinafter defined) which
              Purchaser
              desires that Seller terminate at Closing. Seller shall terminate prior
              to
              Closing any Property Agreements and Brookdale Agreements which Purchaser
              so
              elects to terminate to the extent (and only to the extent) the same
              are
              terminable upon not more than thirty-one (31) days prior written notice
              without
              the payment of any penalties or termination fees ("Rejected Agreements").
              

             

            
              	
                    	f.	
                      Intentionally
                        Omitted.

                    

            

             

            
              	
                    	g.	
                      Seller's
                        Property Documentation.
                        If the transaction contemplated hereby does not occur by
                        the Closing Date,
                        within ten (10) days after Seller's request, Purchaser shall
                        return to
                        Seller (at Seller's notice address provided in Section 16)
                        all documents
                        listed on Schedule I, Property Agreements, Brookdale Agreements
                        and Leases
                        (and any copies thereof) that Seller has physically delivered
                        to
                        Purchaser. Notwithstanding any provision of this Agreement,
                        no termination
                        of this Agreement shall terminate Purchaser's obligation
                        pursuant to the
                        foregoing sentence.

                    

            

             

            6.    Warranties
              and Representations of Seller.
              To
              induce Purchaser to enter into this Agreement and to purchase the Property,
              Seller makes the following representations and warranties, all of which
              are true
              and correct as of the Effective Date, and shall be true and correct
              in all
material
              respects on
              the
              Closing Date and shall survive for one (1) year after
              the
              Closing Date:

             

            
              	
                    	a.	
                      except
                        as disclosed on Exhibit
                        B
                        hereto, there is no litigation for which Seller has been
                        served relating
                        to the Property;

                    

            

             

            
              	
                    	b.	
                      except
                        as disclosed on Exhibit
                        B
                        hereto, Seller has received no notice (and has no other actual
                        knowledge)
                        of any pending or threatened condemnation or similar proceedings
                        affecting
                        the Property;

                    

            

             

             

            
              
                 

              

              
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                    	c.	
                      to
                        Seller’s actual knowledge (without inquiry or investigation), Seller
                        has,
                        during the period of Seller's ownership of the Property,
                        complied with all
                        applicable laws, ordinances, statutes, regulations, orders,
                        rules and
                        restrictions relating thereto, and, to Seller's actual knowledge
                        (without
                        inquiry or investigation), the Property and its existing
                        and prior uses
                        have not violated and do not violate the provisions of any
                        applicable
                        laws, ordinances, statutes, regulations, orders, rules or
                        restrictions
                        relating thereto;

                    

            

             

            
              	
                    	d.	
                      except
                        as disclosed on Exhibit
                        B
                        hereto or in the reports delivered by Seller to Purchaser
                        pursuant to
                        Section 5(c) above, (i) to Seller’s actual knowledge (without inquiry or
                        investigation), no toxic or hazardous substances or wastes
                        (as such terms
                        are defined under the Comprehensive Environment Response,
                        Compensation and
                        Liability Act of 1980, as amended, or the Resource Conservation
                        and
                        Recovery Act, as amended, or any other state or local statute
                        or
                        regulation) have been generated, stored, handled, disposed
                        of, located, or
                        released onto or from the Property in a manner or amount
                        that is in
                        violation of and requires remediation under applicable law,
                        nor have any
                        such materials or wastes been generated, stored, handled,
                        disposed of,
                        located or released on any real property contiguous or adjacent
                        to the
                        Property in a manner or amount that is in violation of and
                        requires
                        remediation under applicable law; and (ii) to Seller’s actual knowledge
                        (without inquiry or investigation), the Improvements do not
                        contain
                        asbestos, polychlorinated biphenyls, urea, formaldehyde,
                        lead-based paint,
                        radon gas or underground storage
                        tanks;

                    

            

             

            
              	
                    	e.	
                      Seller
                        has full power and authority to enter into this Agreement
                        and to assume
                        and perform all of its obligations hereunder, and the execution
                        and
                        delivery of this Agreement and the performance by Seller
                        of its
                        obligations hereunder requires no further action or approval
                        in order to
                        constitute this Agreement as a binding and enforceable obligation
                        of
                        Seller; and

                    

            

             

            
              	
                    	f.	
                      Seller
                        is not a "foreign person" as that term is defined in Section
                        1445 of the
                        Internal Revenue Code.

                    

            

             

            
              	
                    	g.	
                      Each
                        Rent Roll (as defined on Schedule I) sets forth a true, accurate
                        and
                        complete in all material respects list of
                        all Leases in effect with respect to the Property pursuant
                        to which any
                        person or entity leases or occupies space at the Land or
                        in the
                        Improvements. Seller
                        has delivered
                        to
                        Purchaser true, accurate and complete copies of all such
                        Leases. Seller
                        has not entered into, nor does it have any knowledge of,
                        any other
                        agreement not
                        set forth on the Rent Roll giving
                        any person or entity the right to use or occupy any part
                        of the Land or
                        the Improvements,
                        except Permitted Exceptions. 

                    

            

             

            
              	
                    	h.	
                      Seller
                        has delivered to Purchaser
                        a
                        complete list of all Property Agreements
                        and all Brookdale Agreements (as hereinafter defined), and
                        a complete
                        copy of each Property Agreement, including any modifications
                        thereto.
                        Except
                        as disclosed on Exhibit
                        B
                        hereto, Seller is not in material breach of, or default under,
                        any
                        Property Agreement.
                        Seller has advised Purchaser that Brookdale Cypress Management
                        LP
                        (“Brookdale”)
                        has entered into certain agreements that relate
                        to the ownership, use,

                    

            

             

             

            
              
                 

              

              
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            leasing,
              management, advertising, security, maintenance, or operation of the
              Land,
              Improvements or Personality
              (the
              “Brookdale Agreements”). Seller will use good faith efforts (which shall not
              include the payment of money) to obtain copies of the Brookdale Agreements
              for
              Purchaser's review, subject to Purchaser's execution of such confidentiality
              agreements as Brookdale may reasonably require. The Brookdale Agreements
              shall
              not, however, be included in, or constitute, Property Agreements. Seller
              represents and warrants that any Brookdale Agreements that encumbers
              or affects
              the Property in any way following the Closing or that will be binding
              upon the
              Purchaser following Closing will have been provided to Purchaser on
              or before
              the Effective Date. 

             

            
              	
                    	i.	
                      Seller
                        has delivered to Purchaser a schedule setting
                        forth the name, title,
                        payroll
                        and benefit
                        data
                        of
                        each person employed at the Land or in connection with the
                        ownership or
                        operation of the Improvements
                        by
                        Seller or Brookdale.

                    

            

             

            
              	
                    	j.	
                      The
                        Seller
                        has made available to Purchaser the
                        operating statements
                        of
                        each Seller at December 31, 2003,
                        December 31, 2004 and through November 30, 2005 (the “Financial
                        Statements”).
                        The Financial Statements
                        present fairly the results
                        of operation for
                        each property owned by
                        each Seller as of the dates thereof and for the period covered
                        thereby.

                    

            

             

            
              	
                    	k.	
                      Except
                        as disclosed on Exhibit
                        B,
                        Seller does
                        not have any actual knowledge of any material defect to the
                        physical
                        structure of any Improvement, ordinary wear and tear accepted.
                        

                    

            

             

            As
              used
              in this Agreement, references to "Seller's knowledge" and to "Seller's
              actual
              knowledge" refers to the knowledge of Tim Clark, Kenneth Aboussie or
              Brent
              Heath, who are the individuals employed by Seller who have the best
              knowledge
              about the Property. 

             

            
              	
                    	l.	
                      EXCEPT
                        AS
                        OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE
                        DEED,
                        SELLER
                        HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
                        ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING
                        (i) THE
                        NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
                        LIMITATION, THE
                        WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF AND
                        OF THE PROPERTY
                        FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY ELECT
                        TO CONDUCT
                        THEREON, AND THE EXISTENCE OF ANY ENVIRONMENTAL HAZARDS OR
                        CONDITION
                        THEREON (INCLUDING THE PRESENCE OF ASBESTOS) OR COMPLIANCE
                        WITH APPLICABLE
                        LAWS, RULES OR REGULATIONS; (ii) EXCEPT
                        FOR ANY WARRANTIES OF TITLE CONTAINED IN THE DEED TO BE DELIVERED
                        BY
                        SELLER AT CLOSING, THE
                        NATURE AND EXTENT OF ANY RIGHT-OF-WAY, LEASE, POSSESSION,
                        LIEN,
                        ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHERWISE;
                        AND (iii) THE
                        COMPLIANCE OF THE PROPERTY OR
                        ITS

                    

            

             

            
              
                 

              

              
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            OPERATION
              WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL OR OTHER
              BODY.
              PURCHASER ACKNOWLEDGES THAT IT WILL HAVE AN OPPORTUNITY TO INSPECT
              THE PROPERTY
              AND,
              THAT IT WILL BE RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY
              AND NOT
              ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. PURCHASER
              FURTHER
              ACKNOWLEDGES THAT ITS INFORMATION WITH RESPECT TO THE PROPERTY WILL
              BE OBTAINED
              FROM A VARIETY OF SOURCES, AND SELLER (x) HAS NOT MADE, AND WILL NOT
              MAKE, ANY
              INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION; AND
              (y) DOES NOT
              MAKE ANY REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF ANY
              SUCH
              INFORMATION. THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE
              ON AN "AS
              IS," "WHERE IS" BASIS AND "WITH ALL FAULTS", AND PURCHASER EXPRESSLY
              ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF SELLER HEREIN,
              EXCEPT
              AS OTHERWISE SPECIFIED HEREIN, SELLER MAKES NO WARRANTY OR REPRESENTATION,
              EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT
              NOT LIMITED
              TO, ANY WARRANTY OF CONDITION, HABITABILITY, MERCHANTABILITY, TENANTABILITY
              OR
              FITNESS FOR A PARTICULAR PURPOSE, IN RESPECT OF THE
              PROPERTY.

             

            7.    Warranties,
              Representations and Covenants of Purchaser.
              To
              induce Seller to enter into this Agreement and to sell the Property
              to
              Purchaser, Purchaser represents and warrants to Seller that Purchaser
              has been
              duly authorized to enter into this Agreement on the terms and conditions
              of this
              Agreement and that this Agreement is fully binding and enforceable
              against
              Purchaser. 

            

            8.    Additional
              Covenants of Seller.
              Seller
              covenants and agrees as follows:

             

            
              	
                    	a.	
                      Seller
                        shall not commit waste of the Property, shall operate and
                        manage the
                        Property in
                        the ordinary course and substantially the same as the Property
                        is being
                        operated and managed as of the Effective Date and in accordance
                        with
                        existing operating plans, and shall keep the Property in
                        substantially the
                        same state of repair and condition as its current condition,
                        reasonable
                        and ordinary wear and tear
                        excepted.

                    

            

             

            
              	
                    	b.	
                      Seller
                        shall keep, observe and perform its obligations under the
                        Leases, Property
                        Agreements, Permits, and Intangibles, and comply in all material
                        respects
                        with all federal, state and municipal laws, ordinances, rules,
                        regulations, restrictive covenants and orders relating to
                        the
                        Property.

                    

            

             

            
              	
                    	c.	
                      Seller
                        shall not sell, assign or transfer any of the Property, or
                        remove any item
                        of personal property from the Land or Improvements, except,
                        in each case,
                        for the purpose of repair or replacement or otherwise in
                        the ordinary
                        course of business. 

                    

            

             

             

            
              
                 

              

              
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                    	d.	
                      Seller
                        shall not enter into any new lease, agreement or contract
                        (other than
                        residency agreements) or amend any existing Property Agreement,
                        in each case
                        except in the ordinary course of
                        business.

                    

            

             

            
              	
                    	e.	
                      Seller
                        shall not enter into any residency agreement, except pursuant
                        to the form
                        of residency agreement attached hereto as Exhibit
                        E
                        in
                        the ordinary course of business and consistent with current
                        rental
                        practices. 

                    

            

             

            
              	
                    	f.	
                      Seller
                        shall not create, assume or permit to exist any lien, security
                        interest,
                        mortgage, deed of trust or encumbrance of any type, kind
                        or nature
                        whatsoever upon any of the Property, except for Permitted
Exceptions.

                    

            

             

            
              	
                    	g.	
                      Seller
                        shall not allow the levels of inventories, supplies and materials
                        to vary
                        materially from those customarily maintained, or defer delivery
                        of any
                        inventories, supplies or materials outside of the ordinary
                        course of
                        business.

                    

            

             

            
              	
                    	h.	
                      Seller
                        shall not defer any regularly
                        scheduled maintenance or capital replacement items, or fail
                        to repair or
                        replace any emergency repair item.

                    

            

             

            
              	
                    	i.	
                      Seller
                        shall pay all of its material
                        obligations and liabilities as they come
                        due.

                    

            

             

            
              	
                    	j.	
                      Within
                        twenty-two
                        (22) days following the end of each calendar month prior
                        to the Closing
                        Date, and as of the Closing Date, Seller shall deliver to
                        Purchaser a
                        Rent
                        Roll and operating statement that are
                        correct, complete and accurate in
                        all material aspects,
                        and any updated documents or materials on Schedule I, as
                        of the end of
                        each calendar month and as of the Closing
                        Date.

                    

            

             

            
              	
                    	k.	
                      Seller
                        shall
                        promptly notify the Purchaser of any fact, condition or occurrence
                        that
                        (i) causes or constitutes a breach of Seller's representations,
                        warranties
                        or covenants under this Agreement (or that would be reasonably
                        likely to
                        cause such a breach); and (ii) that would be reasonably likely
                        to
                        constitute a Material Adverse Change
                        (as hereinafter defined).

                    

            

             

            
              	
                    	l.	
                      The
                        Seller
                        shall afford to Purchaser and its accountants, counsel and
                        other
                        representatives full access, upon reasonable prior notice
                        during normal
                        business hours during the period prior to Closing, to the
                        Seller's
                        personnel, properties, books, records, agreements and commitments
                        relating
                        to the Land and Improvements or the operation thereof (other
                        than the
                        Excluded Assets); provided, that such access does not unreasonably
                        disrupt
                        the normal operations of the Seller; provided, further that
                        such access
                        does not include access to Brookdale's corporate records
                        or records
                        maintained at Brookdale's corporate office to which Seller
                        does not have
                        access.

                    

            

             

            
              	
                    	m.	
                      After
                        the
                        Closing, Purchaser and Seller shall (i) use commercially
                        reasonable
                        efforts to take, or cause to be taken, all actions and to
                        do, or cause to
                        be done, all things necessary, proper or advisable to consummate
                        and make
                        effective the transactions contemplated by this Agreement,
                        (ii) execute
                        any documents, agreements or instruments of conveyance that
                        may be
                        reasonably necessary to carry out
                        or

                    

            

             

            
              
                 

              

              
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            consummate
              the transactions contemplated hereby, and (iii) cooperate with each
              other in
              connection with the foregoing.

             

            9.    Condemnation
              and Casualty. 

             

            
              	
                    	a.	
                      In
                        the event any proceeding should be commenced for the taking
                        in
                        condemnation or under the power of eminent domain of all
                        or any
                        substantial portion of any of the Tracts comprising the Property
                        which
                        after such taking would not leave sufficient property within
                        such Tract to
                        continue the existing use of such Tract in substantially
                        the same manner
                        and with the same expected economic results (a "Condemnation
                        Proceeding"),
                        Seller shall promptly give written notice of, and full information
                        concerning, such Condemnation Proceeding to Purchaser and
                        shall thereafter
                        keep Purchaser fully informed concerning such Condemnation
                        Proceeding. If
                        a Condemnation Proceeding occurs prior to the Closing, Purchaser
                        shall
                        have the right to terminate this Agreement. Should Purchaser
                        terminate
                        this Agreement as a result of any such Condemnation Proceeding,
                        the
                        Earnest Money will
                        be delivered to Purchaser and both parties shall be released
                        from their
                        obligations hereunder, except for those obligations which
                        expressly
                        survive the Closing or any earlier termination of this
                        Agreement.

                    

            

             

            
              	
                    	b.	
                      If
                        Purchaser does not elect to terminate this Agreement as a
                        result of a
                        Condemnation Proceeding, and the Property is purchased by
                        Purchaser while
                        such Condemnation Proceeding is pending, then Purchaser shall
                        be
                        substituted for Seller as a defendant in such proceeding.
                        In the event
                        such Condemnation Proceeding is concluded while Seller is
                        still the owner
                        of the Property and Seller receives the condemnation award,
                        then the
                        Consideration with respect to such affected Tract (based
                        on that portion
                        of the Consideration allocated to the affected Tract as indicated
                        on
                        Exhibit A) shall be reduced by the amount of the condemnation
                        award which
                        is attributable thereto. If Seller has not received the condemnation
                        award
                        at the time of Closing, then the Consideration with respect
                        to such
                        affected Tract shall remain unchanged, and Seller shall assign
                        to
                        Purchaser all of the right, title and interest of Seller
                        in such
                        condemnation award. Seller agrees that Purchaser shall have
                        the right, at
                        Purchaser's expense, to participate in any Condemnation
                        Proceeding.

                    

            

             

            
              	
                    	c.	
                      Pending
                        Closing, the risk of damage or destruction of the Property
                        by reason of
                        any casualty, except as a result of Purchaser’s inspection activities,
                        shall be and remain in Seller. In the event the Improvements
                        are partially
                        destroyed by fire or other casualty pending the Closing and
                        the cost
                        associated with repairing any such damage is equal to or
                        greater than Five
                        Hundred Thousand and No/100ths Dollars ($500,000.00) in the
                        aggregate for
                        all Tracts, Seller shall immediately notify Purchaser of
                        such damage or
                        destruction and Purchaser shall have the option to either
                        (i) terminate
                        this Agreement by giving Seller written notice of such termination
                        within
                        five (5) days after Purchaser receives notice of such casualty
                        from
                        Seller, and the Earnest Money will
                        be delivered to Purchaser and the parties hereto shall be
                        relieved of
                        their obligations hereunder, except for those obligations
                        that expressly
                        survive the Closing or any earlier termination of this Agreement;
                        or
                        (ii)

                    

            

             

            
              
                 

              

              
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            proceed
              with Closing whereupon Purchaser shall be entitled to (x) a written
              assignment
              from Seller of all insurance proceeds due Seller with respect to such
              casualty
              and (y) a credit against the Consideration equal to all deductibles
              or
              self-insured retentions under Seller’s insurance policies. In the event the
              Improvements are partially destroyed by fire or other casualty pending
              Closing
              and the cost associated with repairing any such damage is less than
              Five Hundred
              Thousand and No/100ths Dollars ($500,000.00) in the aggregate for all
              Tracts,
              Seller shall immediately notify Purchaser of such damage or destruction
              and
              Purchaser shall proceed with Closing, whereupon Purchaser shall be
              entitled to a
              written assignment from Seller of all insurance proceeds, if any, due
              Seller
              with respect to such casualty,
              together with a credit against the Consideration equal to all deductibles
              or
              self-insured retentions under Seller’s insurance policies.

             

            10.    Closing. 

             

            
              	
                    	a.	
                      The
                        consummation of the purchase and sale of the Property ("Closing")
                        shall
                        take place at a time and place and on a date, all of which
                        shall be
                        mutually agreed upon in writing (the "Closing Date") no later
                        than the
                        Close of Business on February 28, 2006, and the Consideration
                        must have
                        been received by 1:00 p.m. Texas
                        time.

                    

            

             

            
              	
                    	b.	
                      At
                        the Closing, Seller shall deliver to Purchaser (or to the
                        Title Company in
                        escrow for delivery to Purchaser upon consummation of the
                        purchase and
                        sale provided for herein) the
                        following:

                    

            

             

            
              	 	
                      i

                    	
                      A
                        Special Warranty Deed for the Land (the "Deed") executed
                        by Seller in the
                        form attached hereto as Exhibit
                        C
                        (adjusted for state law changes for Land in states other
                        than Texas), but
                        properly completed in accordance with this Agreement, duly
                        acknowledged
                        and in form for recording, which Deed shall convey to Purchaser
                        good,
                        indefeasible and insurable fee simple title to the Land,
                        free and clear of
                        all liens, encumbrances, covenants, conditions, restrictions,
                        right-of-ways, easements and other matters affecting title,
                        except for the
                        Permitted Exceptions;

                    

            

             

            
              	 	
                      ii

                    	
                      A
                        bill of sale and assignment (the "Bill of Sale") duly executed
                        by Seller,
                        in the form attached hereto as Exhibit
                        D,
                        but properly completed in accordance with this Agreement,
                        conveying to
                        Purchaser (A) the Personalty; (B) the assignable Warranties,
                        if any; (C)
                        the Plans, Permits, and Intangibles; (D) the Leases (together
                        with any
                        security deposits); and (E) Seller’s interest under the Property
                        Agreements (other than Rejected Agreements) to be assigned
                        to Seller
                        hereunder; all free and clear of all liens and encumbrances
                        except for the
                        Permitted Exceptions;

                    

            

             

            
              	 	
                      iii

                    	
                      An
                        updated Rent Roll certified as being true and correct by
                        Seller as of the
                        Closing Date; 

                    

            

             

             

            
              
                 

              

              
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                      iv

                    	
                      All
                        certificates of title relating to vehicles
                        that are included in this sale,
                        and all keys and entrance cards used on any part of the
                        Property;

                    

            

             

            
              	 	
                      v

                    	
                      An
                        Owner's Policy of Title Insurance issued by First American
                        Title Company
                        or Fidelity National Title Insurance Company, in the face
                        amount of the
                        Consideration, insuring fee simple title to the Land to be
                        in Purchaser,
                        subject only to the Permitted Exceptions, and otherwise conforming
                        to the
                        requirements for the Commitment described above in Section
                        5(a);

                    

            

             

            
              	 	
                      vi

                    	
                      The
                        originals, or certified copies, of all Leases, Property Agreements,
                        plans,
                        permits and warranties in Seller’s possession or control which relate to
                        the Property; 

                    

            

             

            
              	 	
                      vii

                    	
                      Seller's
                        affidavit in a form reasonably acceptable to Purchaser and
                        Seller, as
                        required by Section 1445 of the Internal Revenue Code;
                        

                    

            

             

            
              	 	
                      viii

                    	
                      Possession
                        of the Property to Purchaser in accordance with the terms
                        of this
                        Agreement; and

                    

            

             

            
              	 	
                      ix

                    	
                      Evidence,
                        in form and content satisfactory to Purchaser and the Title
                        Company, that
                        the persons executing the instruments delivered at closing
                        on behalf of
                        Seller have the authority to bind Seller to perform its obligations
                        set
                        forth therein.

                    

            

             

            
              	
                    	c.	
                      Upon
                        Seller's delivery of the foregoing, Purchaser shall deliver
                        to Seller (or
                        to the Title Company in escrow for delivery to Seller) the
                        remaining
                        portion of the Consideration (less any credits to which Purchaser
                        is
                        entitled pursuant to the terms
                        hereof).

                    

            

             

            
              	
                    	d.	
                      In
                        addition
                        to any other condition to the Purchaser's obligations hereunder,
                        the
                        obligation of the Purchaser to
                        purchase and pay for the Property is subject to the satisfaction
                        on or
                        prior to the Closing Date of the following additional
                        conditions:

                    

            

             

            
              	
                    	(i)	
                      no
                        applicable law, ordinance, rule, regulation, injunction or
                        legal restraint
                        shall have been enacted, entered, promulgated, enforced or
                        issued by any
                        governmental entity or authority after the Effective Date
                        preventing the
                        consummation of the transactions contemplated by this Agreement
                        (Purchaser
                        represents and warrants to Seller that it has no actual knowledge
                        of any
                        such law, ordinance, rule, regulation, injunction or legal
                        restraint that
                        is currently in existence which would prevent Purchaser from
                        consummating
                        the transactions contemplated by this
                        Agreement);

                    

            

             

            
              	
                    	(ii)	
                      the
                        representations and warranties of the Seller in
                        this Agreement shall be true and correct in all material
                        respects as of
                        the Closing Date as though made on the Closing
                        Date;

                    

            

             

            
              	
                    	(iii)	
                      the
                        Seller shall
                        have performed or complied in all material respects with
                        all obligations
                        and covenants required by this Agreement to be performed
                        or complied with
                        by Seller
                        by
                        the time of the Closing;

                    

            

             

             

            
              
                 

              

              
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                    	(iv)	
                      all
                        management agreements relating to the Property shall have
                        been terminated
                        as of the Closing Date;

                    

            

             

            
              	
                    	(v)	
                      Purchaser
                        shall have hired the majority of the aggregate employees
                        at the
                        Improvements provided that Purchaser shall have made good
                        faith efforts to
                        hire such employees offering wage levels and benefit packages
                        that, on the
                        whole, are equal or better than their existing
                        levels;

                    

            

             

            
              	
                    	(vi)	
                      no
                        Material Adverse Change shall have occurred
                        and no event that would reasonably be expected to result
                        in a Material
                        Adverse Change shall have occurred. As
                        used herein, the term "Material Adverse Change" shall mean
                        a material
                        adverse change in the business, assets, financial condition,
                        operations or
                        prospects of the businesses operated on the Land or in the
                        Improvements.
                        

                    

            

             

            
              	
                    	e.	
                      In
                        addition to any other condition to the Seller's obligations
                        hereunder, the
                        obligation of the Seller to consummate the transactions contemplated
                        by
                        this Agreement is subject to the satisfaction on or prior
                        to the Closing
                        Date of the following additional
                        conditions:

                    

            

             

            
              	 	
                      i

                    	
                      No
                        applicable law, ordinance, rule, regulation or injunction
                        enacted,
                        entered, promulgated, enforced or issued by any governmental
                        entity or
                        authority, or other legal restraint or prohibition preventing
                        the
                        consummation of the transactions contemplated by this Agreement
                        shall be
                        in effect; 

                    

            

             

            
              	 	
                      ii

                    	
                      The
                        representations and warranties of the Purchaser in this Agreement
                        shall be
                        true and correct in all material respects as of the Closing
                        Date as though
                        made on the Closing Date; and

                    

            

             

            
              	 	
                      iii

                    	
                      The
                        Purchaser shall have performed or complied in all material
                        respects with
                        all obligations and covenants required by this Agreement
                        to be performed
                        or complied with by Purchaser by the time of the
                        Closing.

                    

            

             

            11.    Closing
              Costs. 

             

            
              	
                    	a.	
                      Seller
                        agrees to pay recording fees for the recordation of the instruments
                        conveying title to the Property; all of the cost of the Commitment,
                        Title
                        Policy and the Survey (excluding the costs of any modification
                        of the
                        survey exception or other endorsements, which shall be paid
                        by Purchaser
                        and any updates to the Survey; all charges for tax certificates;
                        all
                        charges for the preparation and recordation of any releases
                        or instruments
                        required to clear Seller's title for conveyance in accordance
                        with the
                        provisions of this Agreement; Seller's attorney's fees, except
                        as provided
                        in Section 14(c); and one half (1/2) of any escrow fee charged
                        by the
                        Title Company.

                    

            

             

             

            
              
                 

              

              
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                    	b.	
                      Purchaser
                        agrees to pay one half (1/2) of any escrow fee charged by
                        the Title
                        Company; all of the cost of any updates to the Survey; the
                        costs of
                        modifying the survey exception on the title insurance policy,
                        transfer
                        fees or taxes, documentation fees or taxes, stamp taxes,
                        the costs of any
                        recording fees which Seller is not obligated to pay pursuant
                        to (a) above;
                        and
                        Purchaser's attorneys' fees, due diligence fees and inspection
                        fees,
                        except as provided in Section
                        14(c).

                    

            

             

            All
              other
              costs, charges and expenses in connection with the Closing shall be
              allocated
              between Purchaser and Seller as specified in this Agreement, or absent
              such
              specification, in accordance with the customary practices in the County
              in which
              the applicable Tract is located.

             

            12.    Prorations
              and Credits to be Made at Closing. 

             

            
              	
                    	a.	
                      The
                        following prorations and credits are to be made as of 12:01
                        a.m. Austin,
                        Texas time on the Closing Date:

                    

            

             

            
              	 	
                      i

                    	
                      Rent.
                        Rent received by Seller under the Leases for the month in
                        which the
                        Closing occurs shall be apportioned as of the Closing Date
                        (with rent
                        attributable to the Closing Date credited to Purchaser).
                        With respect to any rent arrearage arising under the Leases,
                        after
                        Closing, Purchaser shall pay over to Seller any rent arrearage
                        actually
                        collected by Purchaser which is specifically applicable to
                        the month in
                        which Closing occurs and to any other month preceding the
                        Closing Date.
                        Purchaser shall use reasonable efforts to recover any rent
                        arrearage, but
                        shall not be required to evict any tenant. Seller shall be
                        permitted to
                        pursue its remedy for collection of any rent arrearages applicable
                        to
                        periods prior to the Closing Date, provided that Purchaser
                        shall incur no
                        cost, liability or expense in connection therewith, provided,
                        further,
                        that Seller shall not be permitted to enforce any other legal
                        or equitable
                        remedies specifically including commencing eviction procedures.
                        Purchaser
                        shall pay Seller an amount equal to all security deposits
                        required to be
                        held by Seller under the Leases.

                    

            

             

            
              	 	
                      ii

                    	
                      Tenant
                        Charges.
                        Where the Leases contain tenant obligations for taxes, common
                        area
                        expenses, operating expenses or additional charges of any
                        other nature,
                        and where Seller has collected any portion thereof in excess
                        of amounts
                        owed by tenants for such items for the period prior
                        to the Closing Date, then there shall be an adjustment and
                        credit given to
                        Purchaser on the Closing Date for such excess amounts collected.
                        Purchaser
                        shall apply all such excess amounts to the charges owed by
                        Purchaser for
                        such items for the period after the Closing Date and, if
                        required by the
                        Leases, shall rebate or credit tenants with any remainder.
                        If it is
                        determined that the amount collected during Seller’s ownership period
                        exceeded the tenants’ obligation to pay for such expenses incurred during
                        the same period by more than the amount previously credited
                        to Purchaser
                        at Closing, then Seller shall promptly pay to Purchaser the
                        deficiency
                        upon demand after the Closing. If Seller has collected less
                        than the
                        entire amounts due from tenants under the Leases, Purchaser
                        shall use
                        reasonable efforts to collect any such deficiency from the
                        tenants after
                        Closing and pay over to Seller any deficiency for periods
                        prior to Closing
                        actually collected by Purchaser.

                    

            

             

             

            
              
                 

              

              
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                      iii

                    	
                      Utility
                        Charges.
                        Utilities, except to the extent such utility charges are
                        billed to and
                        paid by tenants directly, shall be prorated based on the
                        last full month’s
                        bills. 

                    

            

             

            
              	 	
                      iv

                    	
                      Real
                        Estate Taxes and Special Assessments.
                        General real estate taxes shall be prorated as of Closing,
                        with taxes
                        assessed for
                        the
                        Closing Date, and for subsequent assessments for periods
                        preceding Closing
                        due to a change in land usage or ownership, to be paid by
                        Purchaser. If
                        tax bills have been issued and the actual amount of general
                        real estate
                        taxes for the calendar year in which Closing occurs can be
                        precisely
                        determined as of the Closing Date, Purchaser shall receive
                        as a credit
                        against the Consideration, an amount equal to Seller’s prorated portion of
                        such real estate tax amount. If tax bills have not been issued,
                        but the
                        tax rate for the calendar year in which the Closing occurs
                        ("Closing Year
                        Tax Rate") has been established, Purchaser shall receive
                        as a credit
                        against the Consideration, an amount equal to Seller’s prorated portion of
                        the product of the Closing Year Tax Rate multiplied by a
                        value to be
                        mutually agreed upon by Seller and Purchaser. If neither
                        the actual taxes
                        nor the Closing Year Tax Rate have been established as of
                        the Closing
                        Date, then such calculation shall be accomplished by multiplying
                        the sum
                        of a value to be mutually agreed upon by Seller and Purchaser
                        by the most
                        recent tax rate available, the prorated portion of which
                        sum shall be
                        credited to Purchaser against the Consideration. Purchaser
                        shall notify
                        Seller in writing promptly after the tax bills for the year
                        of closing are
                        available and the actual general real estate taxes for the
                        year of Closing
                        will be reprorated and the parties agree to make adjustment
                        between them
                        if the reproration results in any difference in the amount
                        credited to
                        either party at Closing. The party owing money to the other
                        party shall
                        promptly pay such money to the other party, together with
                        interest thereon
                        at the lesser of two percent (2%) over the "prime rate" (as
                        announced from
                        time to time in the Wall Street Journal) per annum or the
                        maximum rate
                        allowed by law, from the date the deficiency is determined
                        and each party
                        is notified if payment is not made within twenty (20) days
                        after delivery
                        of such notification. 

                    

            

             

            
              	 	
                      v

                    	
                      Other
                        Apportionments.
                        Amounts payable under the Property Agreements assigned by
                        Seller to
                        Purchaser hereunder, annual or periodic permit and/or inspection
                        fees
                        (calculated on the basis of the period covered), and liability
                        for other
                        Property operation and maintenance expenses and other recurring
                        costs
                        shall be apportioned as of the Closing
                        Date.

                    

            

             

            
              	 	
                      vi

                    	
                      Preliminary
                        Closing Adjustment.
                        Seller and Purchaser shall jointly prepare and approve a
                        preliminary
                        Closing adjustment on the basis of the Leases and other sources
                        of income
                        and expenses, and shall deliver such computation to the Title
                        Company
                        prior to Closing.

                    

            

             

            
              	 	
                      vii

                    	
                      Post-Closing
                        Reconciliation.
                        If any of the aforesaid prorations cannot be definitely calculated
                        on the
                        Closing Date, then they shall be estimated at the Closing
                        and definitely
                        calculated as soon after the Closing Date as feasible. As
                        soon as the
                        necessary information is available, either party may at its
                        cost
                        conduct

                    

            

             

             

            
              
                 

              

              
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            a
              post-Closing audit to determine the accuracy of all prorations made
              to the
              Consideration ("Post-Closing Audit"). Either party owing the other
              party a sum
              of money based on such subsequent proration(s) or the Post-Closing
              Audit shall
              promptly pay said sum to the other party, together with interest thereon
              at the
              rate of two percent (2%) over the "prime rate" (as announced from time
              to time
              in the Wall Street Journal) per annum from the Closing Date to the
              date of
              payment if payment is not made within ten (10) days after delivery
              of a bill
              therefor.

             

            
              	
                    	b.	
                      The
                        provisions of this Section 12 shall survive the
                        Closing.

                    

            

             

            13.    Indemnity. 

             

            
              	
                    	a.	
                      Purchaser
                        shall and hereby does indemnify Seller against, and agrees
                        to defend and
                        hold Seller harmless from, any and all third party obligations,
                        losses,
                        liabilities, claims, suits, debts, accounts, liens or encumbrances
                        and all
                        costs and expenses, including reasonable attorneys' fees
                        relating thereto,
                        that Seller may suffer or incur and that (i) result from
                        or relate to the
                        Property on or after the Closing Date and/or Purchaser's
                        ownership or
                        operation thereof on or after the Closing Date unless Seller,
                        rather than
                        Purchaser, is obligated therefor under other provisions of
                        this Agreement,
                        or (ii) result from, or arise out of, any breach of a representation,
                        warranty or covenant by Purchaser in this Agreement or in
                        any conveyance
                        document or agreement executed by Purchaser. If this Agreement
                        is assigned
                        to multiple Purchasers, then each such Purchaser shall only
                        be liable
                        under this Section 13(a) for matters relating to that portion
                        of the
                        Property it purchases.

                    

            

             

            
              	
                    	b.	
                      Seller
                        shall and hereby does indemnify Purchaser against, and agrees
                        to defend
                        and hold Purchaser harmless from, any and all third party
                        obligations,
                        losses, liabilities, claims, suits, debts, accounts, liens
                        and
                        encumbrances and all costs and expenses, including reasonable
                        attorney’s
                        fees relating thereto, that Purchaser may suffer or incur
                        and that (i)
                        result from or relate to the Property prior to the Closing
                        Date and/or
                        Seller’s ownership or operation thereof prior to the Closing Date,
                        (ii)
                        relate in any way to the Excluded Liabilities, or (iii) result
                        from, or arise out of, any breach of a representation, warranty
                        or
                        covenant by Seller in this Agreement or in any conveyance
                        document or
                        agreement executed by Seller.
                        Each Seller shall only be liable under this Section 13(b)
                        for matters
                        relating to that portion of the Property it
                        owns.

                    

            

             

            
              	
                    	c.	
                      The
                        provisions of this Section 13 shall survive the Closing and
                        any earlier
                        termination of this Agreement.

                    

            

             

            14.    Remedies. 

             

            
              	
                    	a.	
                      In
                        the event the purchase and sale of the Property is not consummated
                        because
                        of default by Purchaser (willful or otherwise) or in the
                        event of any
                        other breach or default by Purchaser hereunder, then Seller
                        may, as its
                        sole and exclusive remedy, terminate this Agreement and receive
                        the
                        Earnest Money as liquidated damages for Purchaser's breach,
                        Seller and
                        Purchaser hereby acknowledging that the actual damages incurred
                        by Seller
                        would be difficult if not impossible to
                        accurately

                    

            

             

             

            
              
                 

              

              
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            measure,
              that the Earnest Money constitutes a reasonable estimation of said
              damages and
              that the Earnest Money is not intended as a penalty. In such event,
              neither
              party hereto shall have any further rights, duties or obligations hereunder
              (other than the obligations hereunder which expressly are to survive
              the Closing
              or any earlier termination of this Agreement), all other damages and
              remedies,
              legal or equitable, being hereby waived by Seller. 

             

            
              	
                    	b.	
                      In
                        the event of a default hereunder by Seller, Purchaser shall
                        transmit
                        written notice of such default to Seller and Seller shall
                        have ten (10)
                        days from receipt of such notice to cure such default. Should
                        Seller fail
                        to timely cure such default, and provided all conditions
                        precedent to
                        Seller’s performance hereunder have been fully satisfied, Purchaser
                        shall
                        be entitled, as its sole and exclusive remedy, to either
                        (i) a return of
                        the Earnest Money, in which event this Agreement shall be
                        terminated and
                        neither party shall have any further rights, duties or obligations
                        hereunder (other than the obligations hereunder which expressly
                        are to
                        survive the Closing or any earlier termination of this Agreement),
                        all
                        other damages and remedies, legal or equitable, being hereby
                        waived by
                        Purchaser, or (ii) enforce specific performance of
                        this Agreement if
                        and only if Purchaser complies with all of the conditions
                        set forth in the
                        following sentences. Notwithstanding any provision in this
                        Agreement to
                        the contrary, it is specifically agreed and understood that
                        Purchaser will
                        not have the right to enforce specific performance of Seller’s obligations
                        under this Agreement or to place a lis pendens on the Property
                        or
                        otherwise encumber the Property in any way until and unless:
                        (1) Purchaser
                        timely tenders full performance under this Agreement by delivering
                        to the
                        Title Company, on or before the Closing Date, fully executed
                        originals of
                        all documents required to be executed by Purchaser under
                        the terms and
                        provisions of this Agreement, together with evidence which
                        is satisfactory
                        to demonstrate Purchaser’s ability to close the purchase of the Property
                        under this Agreement, which evidence shall consist of cash
                        or an
                        “Acceptable Financing Commitment” (hereinafter defined) or a combination
                        of cash and an Acceptable Financing Commitment in a total
                        amount
                        sufficient to cover the Consideration plus all expenses which
                        are required
                        to be paid by Purchaser under the terms and provisions of
                        this Agreement;
                        (2) despite such tender of full performance by Purchaser
                        at the Closing,
                        Seller fails or refuses to close the transaction evidenced
                        by this
                        Agreement; and (3) Purchaser institutes, within thirty (30)
                        days after the
                        scheduled date for Closing, an action in a court with jurisdiction
                        and in
                        the venue specified under this Agreement (the "Court"), seeking
                        to enforce
                        specific performance of Seller’s obligations under this Agreement.
                        Purchaser will be considered to have provided an “Acceptable Financing
                        Commitment” if Purchaser provides evidence which the Court determines
                        is
                        adequate to establish that Purchaser had, at the time for
                        the Closing, a
                        written financing commitment which was: (x) issued by a lending
                        institution which had adequate financial strength and adequate
                        readily
                        available funds to satisfy its obligations under the financing
                        commitment;
                        and (y) was in a form and with content providing adequate
                        assurance of
                        availability of funds for the Closing of the Property and
                        was not subject
                        to any material conditions or material requirements which
                        remained
                        unsatisfied, other than the consummation of the Closing under
                        this Agreement.

                    

            

             

             

            
              
                 

              

              
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                    	c.	
                      Should
                        either party employ an attorney to enforce any provisions
                        of this
                        Agreement or any other document executed by such party in
                        connection
                        herewith, or to recover the Earnest Money, the non-prevailing
                        party in any
                        such action shall pay to the prevailing party all reasonable
                        attorney's
                        fees expended or incurred by the prevailing party in connection
                        therewith.
                        The provisions of this Section 14 shall survive the Closing
                        or any earlier
                        termination of this Agreement. 

                    

            

             

            15.    Real
              Estate Commissions.
              Seller
              and Purchaser acknowledge and agree that CB Richard Ellis, Inc. (“CBRE”) is the
              only broker which may be entitled to a brokerage commission in connection
              with
              this Agreement and the transactions contemplated hereby; provided,
              however,
              nothing contained in this Agreement shall constitute any right or basis
              of CBRE
              to claim a brokerage commission against Seller or Purchaser in connection
              with
              the transactions contemplated by this Agreement (CBRE acknowledging
              and agreeing
              that same must be based upon a written document signed by Seller which
              is
              separate and distinct from this Agreement). At the Closing and only
              to the
              extent that the Closing occurs and subject to the terms of the separate
              and
              distinct writing referred to above, Seller agrees to pay any brokerage
              commission claimed or asserted by CBRE in connection with the transactions
              contemplated by this Agreement. Seller agrees to indemnify, defend
              and hold
              harmless Purchaser from and against any claim or assertion by CBRE
              or any third
              party for a brokerage commission or fee in connection with the transaction
              contemplated by this Agreement unless same is based upon an agreement
              or alleged
              agreement (written or oral) (other than this Agreement) executed or
              made by
              Purchaser or any affiliate, subsidiary or parent entity or Purchaser.
              Purchaser
              agrees to indemnify, defend and hold harmless Seller from and against
              any claim
              or assertion by any third party for a brokerage commission or fee in
              connection
              with the transactions contemplated by this Agreement which is based
              upon a
              written or oral agreement or alleged agreement (other than this Agreement)
              executed or made by Purchaser or any affiliate, subsidiary or parent
              entity of
              Purchaser. The obligations under this Section 15 shall survive the
              Closing or
              any earlier termination of this Agreement.

            

            16.    Notices.
              All
              notices, requests or permissions required or permitted to be given
              to either
              Purchaser or Seller under the terms of this Agreement shall be sufficient
              if
              they are in writing and (a) mailed registered or certified mail, return
              receipt
              requested, (b) delivered in person, (c) delivered by the facsimile
              transmission,
              provided that the facsimile is promptly confirmed by telephone, or
              (d) delivered
              by overnight delivery via a national courier service, as follows:

            

            To
              Purchaser:

            ARC
              Cypress, LLC

            111
              Westwood Place, Suite 200

            Brentwood,
              TN 37027

            Attn:
              Chief Executive Officer

            Facsimile
              No.: (615) 221-2269

            

            with
              a
              copy to:

            Bass,
              Berry & Sims, PLC

            315
              Deaderick Street, Suite 2700

            Nashville,
              TN 37238-3001

            Attn:
              T.
              Andrew Smith

            Facsimile
              No.: (615) 742-2766

             

            
              
                 

              

              
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            To
              Seller:

            c/o
              Cypress Senior Living, Inc.

            Cypress
              Real Estate Advisors, Inc. 

            501
              South
              Mopac Expressway, Suite 230

            Austin,
              Texas 78746 

            Attention:
              Mr. Kenneth Aboussie 

            Phone:
              512-494-8510

            Facsimile
              No.:
              512-494-8519

            

            with
              a
              copy to:

            CB
              Richard Ellis, Inc.

            600
              W.
              Broadway, Suite 2100

            San
              Diego, California 92101

            Attention:
              Ms. Lisa Widmier

            Phone:
              619-696-8304

            Facsimile
              No.: 619-232-2462

             

            with
              a
              copy to:

            Brett
              L.
              Hamilton

            Locke
              Liddell & Sapp LLP

            600
              Travis Street, Suite 3200

            Houston,
              Texas 77002

            Phone:
              713-226-1298

            Facsimile
              No.: 713-229-2557

             

            Mailed
              notices shall be deemed delivered and effective three (3) days following
              the
              date when placed in the United States mail, certified or registered
              mail, return
              receipt requested, postage prepaid, as evidenced by a valid postmark.
              Notices
              delivered by (i) personal delivery shall be effective upon delivery,
              (ii)
              overnight delivery shall be effective one (1) business day thereafter,
              or (iii)
              facsimile transmission shall be effective when sent.

             

            17.    Assignment.
              Purchaser shall not have the right to assign or otherwise transfer
              its interest
              in this Agreement without the prior written consent of Seller; provided,
              however, that Purchaser may assign this Agreement to a partnership
              or limited
              liability company in which Purchaser or an affiliate or Purchaser is
              the manager.
              In such event, and in the event of any other approved assignment, such
              assignee
              shall assume in writing all of the obligations of Purchaser under this
              Agreement.

            

            18.    Effective
              Date.
              The
              "Effective Date" of this Agreement shall be January 31, 2006. Execution
              hereof
              by Purchaser alone shall constitute only an offer to purchase. Upon
              execution of
              this Agreement by an authorized representative of Seller, after the
              execution by
              Purchaser and delivery of a fully executed copy hereof to Purchaser,
              this
              document shall become a binding Agreement.

            

            19.    Miscellaneous. 

             

            
              	
                    	a.	
                      This
                        Agreement shall be construed and interpreted in accordance
                        with the laws
                        of the State of Texas. Proper venue for any action arising
                        under or
                        relating to this Agreement shall be in Harris County, Texas.
                        

                    

            

             

             

            
              
                 

              

              
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                    	b.	
                      Time
                        is of the essence as to all matters contained in this
                        Agreement.

                    

            

             

            
              	
                    	c.	
                      If
                        the final day of any time period or limitation set out in
                        any provision of
                        this Agreement falls on a Saturday, Sunday or legal holiday
                        recognized by
                        the United States government or the State of Texas, then
                        and in such event
                        the time of such period or limitation shall be extended to
                        the next day
                        which is not a Saturday, Sunday or such legal
                        holiday.

                    

            

             

            
              	
                    	d.	
                      This
                        Agreement may be executed in any number of counterparts,
                        each of which,
                        when executed and delivered, shall be an original, but such
                        counterparts
                        shall together constitute one and the same
                        instrument.

                    

            

             

            
              	
                    	e.	
                      This
                        Agreement may not be modified or amended except by a subsequent
                        agreement
                        in writing signed by both Seller and Purchaser. Purchaser
                        and Seller may,
                        in their sole and absolute discretion, waive any of the conditions
                        herein
                        or any of the obligations of the other party hereunder, but
                        any such
                        waiver shall be effective only if in writing and signed by
                        the party
                        waiving such condition or
                        obligation.

                    

            

             

            
              	
                    	f.	
                      Except
                        as otherwise set forth in Section 17 hereof, this Agreement
                        shall be
                        binding upon and inure to the benefit of the parties hereto
                        and their
                        respective heirs, beneficiaries, successors, legal representatives
                        and
                        assigns.

                    

            

             

            
              	
                    	g.	
                      This
                        Agreement, including the exhibits, schedules, and attachments
                        attached
                        thereto (all of which shall be deemed incorporated into this
                        Agreement by
                        reference), constitutes the entire agreement and understanding
                        between the
                        parties hereto and supersedes all prior and contemporaneous
                        agreements and
                        understandings of the parties in connection therewith. No
                        statements,
                        agreements or understandings, representations, warranties
                        or conditions
                        not expressed in this Agreement shall be binding upon the
                        parties hereto,
                        or shall be effective to interpret, change or restrict the
                        provisions of
                        this Agreement unless such is in writing signed by the party
                        against whom
                        enforcement thereof is sought.

                    

            

             

            
              	
                    	h.	
                      If
                        any provision of this Agreement or application to any party
                        or
                        circumstances shall be determined by any court of competent
                        jurisdiction
                        to be invalid and unenforceable to any extent, the remainder
                        of this
                        Agreement or the application of such provision to such person
                        or
                        circumstances, other than those as to which it is so determined
                        invalid or
                        unenforceable, shall not be affected thereby, and each provision
                        hereof
                        shall be valid and shall be enforced to the fullest extent
                        permitted by
                        law.

                    

            

             

            
              	
                    	i.	
                      The
                        captions in this Agreement are inserted only as a matter
                        of convenience
                        and for reference and in no way define, limit or describe
                        the scope of
                        this Agreement or the scope or content of any of its provisions.
                        

                    

            

             

            
              	
                    	j.	
                      All
                        exhibits described herein and attached hereto are fully incorporated
                        into
                        this Agreement by this reference for all
                        purposes.

                    

            

             

             

            
              
                 

              

              
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                    	k.	
                      The
                        parties acknowledge that their attorneys have reviewed and
                        revised this
                        Agreement and that the normal rule of construction to the
                        effect that any
                        ambiguities are to be resolved against the drafting party
                        shall not be
                        employed in the interpretation of this Agreement or any amendments
                        or
                        exhibits hereto.

                    

            

             

            
              	
                    	l.	
                      This
                        Agreement shall not be recorded by Purchaser. Should Purchaser
                        record or
                        cause a copy of this Agreement to be recorded, the same shall
                        constitute
                        an event of default by Purchaser, whereupon this Agreement
                        shall terminate
                        and the Earnest Money shall be forfeited to
                        Seller.

                    

            

             

            
              	
                    	m.	
                      The
                        obligations and undertakings of the parties hereto shall
                        be performed
                        within the time specified, and failure to perform within
                        such time shall
                        constitute an event of default on the part of the party which
                        fails to
                        perform.

                    

            

             

            
              	
                    	n.	
                      Purchaser
                        recognizes, understands and agrees that pursuant to this
                        Agreement it will
                        become aware of certain confidential information regarding
                        Seller and the
                        ownership and operation of the Property. Purchaser agrees
                        that, except in
                        connection with a proceeding before a court of competent
                        jurisdiction or
                        other governmental or quasi governmental entity or as required
                        by
                        applicable law, it shall not disclose any such information
                        to any third
                        party or parties except to agents, employees or independent
                        contractors
                        advising or assisting Purchaser with the transaction contemplated
                        hereby,
                        potential or actual investors, potential and actual lenders
                        of all or a
                        portion of the Consideration and as otherwise expressly allowed
                        pursuant
                        to the terms and provision of this Agreement.

                    

            

             

            
              	
                    	o.	
                      Purchaser
                        acknowledges that it shall be responsible for confirming
                        the availability
                        of, and obtaining, any and all utility capacity, water, wastewater,
                        stormwater drainage, stormwater detention and sanitary stormwater
                        required
                        for the operation of the Property. 

                    

            

             

            
              	
                    	p.	
                      Either
                        party may consummate the purchase or sale (as applicable)
                        of the Property
                        as part of a so-called like kind exchange (an “Exchange”) pursuant to §
                        1031 of the Internal Revenue Code of 1986, as amended (the
“Code”),
                        provided that: (a) the Closing shall not be delayed or affected
                        by reason
                        of the Exchange nor shall the consummation or accomplishment
                        of an
                        Exchange be a condition precedent or condition subsequent
                        to the
                        exchanging party’s obligations under this Agreement; (b) the exchanging
                        party shall effect its Exchange through an assignment of
                        this Agreement,
                        or its rights under this Agreement, to a qualified intermediary;
                        (c)
                        neither party shall be required to take an assignment of
                        the purchaser
                        agreement for relinquished or replacement property or be
                        required to
                        acquire or hold title to any real property for purposes of
                        consummating an
                        Exchange desired by the other party; and (d) the exchanging
                        party shall
                        pay any additional costs that would not otherwise have been
                        incurred by
                        the non-exchanging party had the exchanging party not consummated
                        the
                        transaction through an Exchange. Such right and option shall
                        be applicable
                        to all or any portion of the Property. Neither party shall
                        by this
                        Agreement or acquiescence to an Exchange desired by the other
                        party have
                        its rights under this Agreement affected or diminished in
                        any manner or be
                        responsible for

                    

            

             

            
              
                 

              

              
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            compliance
              with or be deemed to have warranted to the exchanging party that its
              Exchange in
              fact complies with § 1031 of the Code.

             

            
              	
                    	q.	
                      Except
                        as required by applicable law, the parties (which for purposes
                        of this
                        Section 19(q) shall include any brokers referenced in Section
                        15 above)
                        hereby agree that there shall be no public announcement or
                        disclosure of
                        this Agreement or the transactions contemplated hereby without
                        the mutual
                        consent of Seller and Purchaser as to the form, content,
                        manner and timing
                        of such disclosure; provided, however, that the foregoing
                        shall not apply
                        to disclosures by Purchaser to: (i) potential lenders; (ii)
                        potential
                        tenants or purchasers of all or any portion of the property;
                        or (iii) any
                        representatives, agents or advisers of Purchaser; provided,
                        further, that
                        the foregoing shall not apply to disclosures by Seller to:
                        (i) any
                        representatives, contractors, agents or advisers of Seller.
                        The provisions
                        of this Section 19(q) shall survive the Closing or any earlier
                        termination
                        of this Agreement. 

                    

            

             

            
              	
                    	r.	
                      Nothing
                        in this Agreement shall be construed or interpreted to impose
                        any
                        responsibility or liability on Purchaser to any third parties,
                        whether as
                        a successor to Seller or under any other legal or equitable
                        principle, for
                        any negligent or tortious acts or omissions of Seller, its
                        lessees,
                        managers, operators or employees, prior to the Closing Date.
                        Seller shall
                        retain any and all liability and responsibility to third
                        parties for its
                        negligent and tortious acts or omissions prior to the Closing
                        Date.
                        Nothing in this Agreement shall be construed or interpreted
                        to impose any
                        responsibility or liability on Seller to any third parties,
                        whether as a
                        prior owner or under any other legal or equitable principle,
                        for any
                        negligent or tortious acts or omissions of Purchaser, its
                        lessees,
                        managers, operators or employers, on or after the Closing
                        Date. Purchaser
                        shall retain any and all liability and responsibility to
                        third parties for
                        its negligent and tortious acts or omissions on or after
                        the Closing Date.
                        

                    

            

             

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            IN
              WITNESS WHEREOF, this Agreement has been executed by the parties hereto
              as of
              the date set forth below, but shall be effective as of the Effective
              Date.

             

            TRACT
              ONE SELLER:

            

            TOWN
              VILLAGE LEAWOOD, LLC, 

            a
              Delaware limited liability company

            

            By:       
              Cypress
              Senior Limited Partnership,

            a
              Delaware limited partnership

            Managing
              Member

            

            By:  
              Cypress
              Senior Living Partner, Inc., 

            a
              Maryland corporation

            General
              Partner

            

              By:___________________________________

              Name:________________________________

              Title:_________________________________

            

            

            TRACT
              TWO SELLER:

            

            TOWN
              VILLAGE ARLINGTON, L.P., 

            a
              Delaware limited partnership

            

            By:  
              Cypress
              Senior Living Partner, Inc., 

            a
              Maryland corporation

            General
              Partner

            

            By:___________________________________

            Name:________________________________

            Title:_________________________________

            

            

            TRACT
              THREE SELLER:

            

            TOWN
              VILLAGE DALLAS, L.P., 

            a
              Delaware limited partnership

            

            By:  
              Cypress
              Senior Living Partner, Inc., 

            a
              Maryland corporation

            General
              Partner

            

            By:___________________________________

            Name:________________________________

            Title:_________________________________

             

            
              
                 

              

              
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            TRACT
              FOUR SELLER:

             

            TOWN
              VILLAGE FT. WORTH, L.P., 

            a
              Delaware limited partnership

            

            By:  
              Cypress
              Senior Living Partner, Inc., 

            a
              Maryland corporation 

            General
              Partner

            

            

            By:___________________________________

            Name:________________________________

            Title:_________________________________

             

            

            BROKER:

            

            CB
              Richard Ellis, Inc.

            

            By:__________________________________

            Name:_______________________________

            Title:________________________________

            

            

            

            PURCHASER:

            

            ARC
              Cypress LLC,

            a
              Tennessee limited liability company

            

            

            By:___________________________________

            Name:________________________________

            Title:_________________________________

            Date:__________________________,
              2006

             

            
              
                 

              

              
                -24-

                
                  

                

              

              
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                  Contents

              

               

            

            The
              undersigned, as escrow agent, hereby acknowledges receipt of a fully
              executed
              original of this Agreement. In the event the Earnest Money to be held
              by the
              undersigned in accordance with the terms of this Agreement is not received
              on or
              before the Close of Business on any date when the same is due and owing,
              the
              undersigned agrees to notify each of the parties hereto.

             

             

            TEXAS
              UNITED TITLE, INC.

             

             

            By:__________________________________

            Name:________________________________

            Title:_________________________________

            Date:_________________________________

             

             

            
              
                 

              

              
                -25-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              A

            

            DESCRIPTION
              OF THE PROPERTY

            

            Tract
              One: a tract of land described in Exhibit “A-1” attached hereto. Consideration
              Allocation: $35,253,190

            

            Tract
              Two: a tract of land described in Exhibit “A-2” attached hereto. Consideration
              Allocation: $25,613,180 

            

            Tract
              Three: a tract of land described in Exhibit “A-3” attached hereto. Consideration
              Allocation: $58,464,430

            

            Tract
              Four: a tract of land described in Exhibit “A-4” attached hereto. Consideration
              Allocation: $26,955,700

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  to Table of
                  Contents

              

            

            

            EXHIBIT
              B

            

            EXCEPTIONS
              TO WARRANTIES AND REPRESENTATIONS

            

            
              	
                    	1.	
                      Roof
                        and truss repair at Town Village Ridgmar in Ft. Worth
                        (Seller agrees that the costs of such repairs, which are
                        estimated to be
                        $187,000 in the aggregate, are the responsibility of, and
                        will be paid by,
                        Seller, whether such repairs are completed before or after
                        the Closing
                        Date. If such repairs are not completed by the Closing Date,
                        Purchaser
                        shall be entitled to reasonable assurances that the unpaid
                        costs to
                        complete such repairs will be paid by Seller.)

                    

            

            

            
              	
                    	2.	
                      Town
                        Village North - Emergency call system "dead zones." The cost
                        of any work,
                        if any, necessary to remedy such "dead zones" shall be the
                        responsibility
                        of, and will be paid by, Purchaser.

                    

            

             

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              C

            

            SPECIAL
              WARRANTY DEED

             

            
              	THE STATE OF TEXAS 	§	 

              	 	
                      §

                    	
                      KNOW
                        ALL PERSONS BY THESE PRESENTS:

                    

              	COUNTY OF _________ 	§	 

            

             

             

            THAT,
              ______________________________, a __________ corporation ("Grantor"),
              for and in
              consideration of the sum of Ten and No/100ths Dollars ($10.00) in hand
              paid to
              Grantor by _____________________________, a ________________ ________________
              ("Grantee"), the receipt of which is hereby acknowledged by Grantor,
              and other
              good and valuable consideration paid and agreed and secured to be paid
              to
              Grantor by Grantee in the manner set forth below, the sufficiency of
              which
              consideration is hereby acknowledged by Grantor, has GRANTED, BARGAINED,
              SOLD,
              and CONVEYED and by these presents does GRANT, BARGAIN, SELL, and CONVEY
              unto
              said Grantee, its successors and assigns, subject to the Permitted
              Exceptions
              described below, all of that certain real property located in __________
              County,
              Texas, more particularly described on Exhibit A attached hereto, and
              all of
              Grantor's right, title and interest, if any, in and to all easements,
              tenements,
              hereditaments, privileges and appurtenances in any way belonging to
              the
              foregoing (collectively, the "Appurtenances"), including, without limitation,
              (i) any land to the midpoint of the bed of any highway, street, road
              or avenue,
              open or proposed, in front of, abutting or adjoining such land, (ii)
              any land
              lying in or under the bed of any creek, stream, bayou or river running
              through,
              abutting or adjacent to such land, (iii) any riparian, appropriative,
              or other
              water rights of Grantor appurtenant to such land and relating to surface
              or
              subsurface waters, (iv) any oil, gas or other minerals or mineral rights
              relating to such land or to the surface or subsurface thereof which
              are owned by
              Seller, (v) any strips, gores or pieces of property abutting, bounding
              or which
              are adjacent or contiguous to such land, and (vi) all easements, right-of-ways,
              rights of ingress or egress and reversionary interests benefiting such
              land (all
              such land, water rights, mineral rights, easements and other appurtenant
              rights
              being herein referred to collectively as the "Property").

            

            This
              conveyance is made by Grantor and accepted by Grantee expressly subject
              to those
              matters more particularly described on Exhibit B attached hereto and
              incorporated herein for all purposes (the "Permitted Exceptions"),
              to the
              extent, but only to the extent, the same are valid and subsisting and
              affect the
              Property.

            

            TO
              HAVE
              AND TO HOLD the Property, together with all and singular the rights
              and
              appurtenances thereto in anywise belonging, unto Grantee, its successors
              and
              assigns forever; and, subject to the above described Permitted Exceptions,
              Grantor does hereby bind itself and its successors, to WARRANT AND
              FOREVER
              DEFEND all and singular the Property unto Grantee, its successors and
              assigns,
              against every person whomsoever lawfully claiming or to claim the same
              or any
              part thereof by, through or under Grantor, but not otherwise. Notwithstanding
              anything contained herein to the contrary, however, with respect to
              the

             

            
              
                 

              

              
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            Appurtenances,
              Grantor is hereby only granting, bargaining, selling and conveying
              all of
              Grantor’s right, title and interest in and to the same without warranty (whether
              statutory, express or implied).

            

            This
              Deed
              is delivered pursuant to that certain Purchase and Sale Agreement dated
              ____________, 200__ (the “Purchase Agreement”). 

            

            EXCEPT
              AS
              OTHERWISE SET FORTH HEREIN OR IN THE PURCHASE AGREEMENT,
              GRANTOR
              HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
              ORAL OR
              WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING (i) THE
              NATURE AND
              CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER,
              SOIL AND
              GEOLOGY, AND THE SUITABILITY THEREOF AND OF THE PROPERTY FOR ANY AND
              ALL
              ACTIVITIES AND USES WHICH GRANTEE MAY ELECT TO CONDUCT THEREON, AND
              THE
              EXISTENCE OF ANY ENVIRONMENTAL HAZARDS OR CONDITIONS THEREON (INCLUDING
              THE
              PRESENCE OF ASBESTOS) OR COMPLIANCE WITH APPLICABLE LAWS, RULES OR
              REGULATIONS;
              (ii) EXCEPT
              FOR ANY WARRANTIES OF TITLE CONTAINED IN THIS DEED, THE
              NATURE AND EXTENT OF ANY RIGHT-OF-WAY, LEASE, POSSESSION, LIEN, ENCUMBRANCE,
              LICENSE, RESERVATION, CONDITION OR OTHERWISE; AND (iii) THE COMPLIANCE
              OF THE
              PROPERTY OR ITS OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS
              OF ANY
              GOVERNMENTAL OR OTHER BODY. GRANTEE ACKNOWLEDGES THAT IT HAS INSPECTED
              THE
              PROPERTY AND IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY
              AND NOT
              ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY GRANTOR. GRANTEE FURTHER
              ACKNOWLEDGES THAT ITS INFORMATION WITH RESPECT TO THE PROPERTY WAS
              OBTAINED FROM
              A VARIETY OF SOURCES, AND GRANTOR (x) HAS NOT MADE ANY INDEPENDENT
              INVESTIGATION
              OR VERIFICATION OF SUCH INFORMATION; AND (y) DOES NOT MAKE ANY REPRESENTATIONS
              AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. THE SALE OF
              THE PROPERTY
              AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS," "WHERE IS" BASIS AND
              "WITH ALL
              FAULTS", AND GRANTEE EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION
              OF THE DEEDS
              OF GRANTOR HEREIN, EXCEPT AS OTHERWISE SPECIFIED HEREIN, GRANTOR MAKES
              NO
              WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION
              OF LAW,
              INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
              MERCHANTABILITY, TENANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
              IN RESPECT
              OF THE PROPERTY.

            

            Real
              estate ad valorem taxes and all other taxes, assessments and standby
              fees
              against the Property for the year 20____ have been prorated between
              Grantor and
              Grantee as of the date hereof, and by Grantee’s acceptance of this deed, Grantee
              assumes and agrees to pay prior to delinquency thereof such ad valorem
              taxes.

             

            
              
                 

              

              
                -2-

                
                  

                

              

              
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            EXECUTED
              on this the ___ day of ____________, 20__, but effective for all purposes
              as of
              ______________, 20__.

            

            GRANTOR:

            

            ________________________________,
              

            a
              _____________________

            

            By:_______________________________

            Name:_____________________________

            Title:______________________________

            

            Address
              of Grantee:

            

            _______________________________

            _______________________________

            _______________________________

            

             

            
              
                	THE STATE OF TEXAS 	§	 

                	 	
                        §

                      	
                      

                	COUNTY OF _________ 	§	 

              

               

            

            This
              instrument was acknowledged before me on _______________________, by
              ______________, _________ of _____________________, a________________,
              on behalf
              of said __________________.

            

            

            ____________________________

            Notary
              Public in and for the

            State
              of
              ___________

            My
              Commission Expires:________

             

            
              
                 

              

              
                -3-

                
                  

                

              

              
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            EXHIBIT
              A

            

            TO
              SPECIAL WARRANTY DEED

            

            Legal
              Description

             

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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            EXHIBIT
              B

            

            TO
              SPECIAL WARRANTY DEED

            

            Permitted
              Exceptions

            

            1.    Any
              discrepancies, conflicts or shortages in area or boundary lines, or
              any
              encroachments, or any overlapping of improvements, and all other matters
              that a
              true, correct and complete survey would reveal.

            

            2.    Taxes
              and
              assessments for current and subsequent years not yet due and payable
              and
              subsequent assessments for the current and prior years due to a change
              in land
              usage or ownership.

            

            3.    [Others
              to conform to final Title Commitment]

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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            EXHIBIT
              D

            

            BILL
              OF SALE AND ASSIGNMENT

            

            
               

              
                	THE STATE OF _________	§	 

                	 	
                        §

                      	
                        KNOW
                          ALL PERSONS BY THESE PRESENTS:

                      

                	COUNTY OF _________ 	§	 

              

               

            

            THAT
              _________________________, a ____________ ("Grantor"), for an in consideration
              of the sum of Ten and No 100ths Dollars ($10.00) cash and other good
              and
              valuable consideration paid to Grantor by __________________________,
              a
              ______________ ___________________ ("Grantee"), the receipt and sufficiency
              of
              which are hereby acknowledged, has granted, sold, and conveyed, and
              by these
              presents does grant, sell, and convey unto Grantee, its successors
              and assigns,
              the following (collectively, the “Assigned Property”):

            

            [Conform
              to finalized APA]

            

            1.    Personal
              Property.
              All
              items of furniture, fixtures, vehicles, buses, equipment and tangible
              personal
              property owned by Grantor and located on or within or used in connection
              with
              the ownership or operation of the improvements located on that certain
              real
              property located in ____________ County, ______________ consisting
              of
              ________________ acres, more or less, comprised of the parcel more
              particularly
              described on Exhibit A attached hereto and incorporated herein (such
              land and
              improvements being collectively referred to herein as the "Project,"
              and all of
              such items and personal property being collectively referred to herein
              as the
              "Personal Property");

            

            2.    Leases.
              All of
              Grantor's right, title and interest as lessor or landlord in and under
              all
              leases, occupancy agreements, residency agreements and licenses agreements
              granting possessory rights in, on or covering the Project (the "Leases"),
              which
              leases and agreements are more particularly described on Exhibit B
              attached
              hereto;

            

            3.    Property
              Agreements.
              All of
              the Grantor's right, title and interest as owner of the Project, to
              the extent
              Grantor's interest is assignable, in and to the agreements relating
              to the
              ownership, use, membership, leasing, management, advertising, security,
              maintenance, construction or operation of the Project or the Personal
              Property,
              which agreements are more particularly described on Exhibit C attached
              hereto
              and incorporated herein (the "Property Agreements"); 

            

            4.    Intangibles.
              To the
              extent assignable and relating solely to the ownership, development,
              use or
              projected use, maintenance or operation of the Project, Personal Property,
              Leases or Property Agreements, all of Seller's right, title and interest
              in and
              to all (i) plans, models, drawings, specifications, surveys, engineering
              reports
              and other technical descriptions or materials that are in the possession
              of
              Grantor or its representatives (the "Plans"); (ii) warranties, guaranties,
              indemnities and claims (the "Warranties"); (iii) certificates
              of occupancy, certificates of compliance (including those relating
              to compliance
              by the Project with all laws, rules and regulations governing access
              for the
              handicapped), licenses,
              permits, franchises and similar rights issued by any federal, state
              or municipal
              authority and issued solely for the benefit of the Project or improvements
              to be
              constructed on the above-described land (the "Permits"); (iv)
              rights
              to use the name “Town Village” for the Project only;
              and (v)
all
              other
              claims or causes of action (the "Intangibles"); and

             

            
              
                 

              

              
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            5.    Miscellaneous.
              To the
              extent assignable, all of Grantor's right, title and interest in, if
              any, any
              other tangible or intangible asset of any kind or nature primarily
              used in
              connection with the ownership or operation of the Property or the Improvements
              that is not specifically identified as an Excluded Asset.

            

            Capitalized
              terms used but not otherwise defined herein shall have the meanings
              ascribed
              thereto in that certain Purchase and Sale Agreement among Grantor (and
              others),
              as Seller, and Grantee, as Purchaser, with an effective date of January
              __,
              2006.

            

            TO
              HAVE
              AND TO HOLD the Personal Property, Leases, Property Agreements, Plans,
              Warranties, Permits, and Intangibles, together with all and singular
              the rights
              and appurtenances thereto in anywise belonging, unto the said Grantee,
              its
              successors and assigns, forever, and Grantor does hereby bind itself
              and its
              successors to WARRANT and FOREVER DEFEND title to the Personal Property,
              Leases,
              Property Agreements, Plans, Warranties, Permits and Intangibles unto
              said
              Grantee, its successors and assigns, against the lawful claims of any
              and all
              persons lawfully claiming or to claim the same or any part thereof.

            

            This
              transfer is made subject only to the liens, encumbrances, and security
              agreements affecting the Project and/or Grantor's interest in the Project
              set
              forth on Exhibit D attached hereto and made a part hereof.

            

            GRANTOR
              HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
              ORAL OR
              WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING (i) THE
              NATURE AND
              CONDITION OF THE ASSIGNED PROPERTY, INCLUDING WITHOUT LIMITATION, THE
              SUITABILITY THEREOF OR COMPLIANCE WITH ALL APPLICABLE LAWS, RULES OR
              REGULATIONS; (ii) EXCEPT FOR ANY WARRANTIES OF TITLE CONTAINED IN THIS
              BILL OF
              SALE, THE NATURE AND EXTENT OF ANY LEASE, POSSESSION, LIEN, ENCUMBRANCE,
              LICENSE, RESERVATION, CONDITION OR OTHERWISE; AND (iii) THE COMPLIANCE
              OF THE
              ASSIGNED PROPERTY OR ITS OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS
              OF
              ANY GOVERNMENTAL OR OTHER BODY. GRANTEE ACKNOWLEDGES THAT IT HAS INSPECTED
              THE
              ASSIGNED PROPERTY AND IS RELYING SOLELY ON ITS OWN INVESTIGATION OF
              THE ASSIGNED
              PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY GRANTOR.
              GRANTEE FURTHER ACKNOWLEDGES THAT ITS INFORMATION WITH RESPECT TO THE
              ASSIGNED
              PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES, AND GRANTOR (x) HAS
              NOT MADE
              ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION;
              AND (y) DOES
              NOT MAKE ANY REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF
              SUCH
              INFORMATION. THE SALE OF THE ASSIGNED PROPERTY AS PROVIDED FOR HEREIN
              IS MADE ON
              AN "AS IS," "WHERE IS" BASIS AND "WITH ALL FAULTS", AND GRANTEE EXPRESSLY
              ACKNOWLEDGES THAT, IN CONSIDERATION OF THE DEEDS OF GRANTOR HEREIN,
              EXCEPT AS
              OTHERWISE SPECIFIED HEREIN, GRANTOR MAKES NO WARRANTY OR REPRESENTATION,
              EXPRESS
              OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED
              TO, ANY
              WARRANTY OF CONDITION, HABITABILITY, MERCHANTABILITY, TENANTABILITY
              OR FITNESS
              FOR A PARTICULAR PURPOSE, IN RESPECT OF THE ASSIGNED
              PROPERTY.

             

            
              
                 

              

              
                -2-

                
                  

                

              

              
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            IN
              WITNESS WHEREOF, Grantor has executed this Bill of Sale and Assignment
              as of the
              _____ day of ___________, 20__.

            

            GRANTOR:

            

            ___________________________________
              , 

            a
              _______________________

            

            By:_________________________________

            Name:______________________________

            Title:_______________________________

            

             

            
              
                	THE STATE OF TEXAS 	§	 

                	 	
                        §

                      	
                      

                	COUNTY OF _________ 	§	 

              

               

            

            This
              instrument was acknowledged before me on _______________________, by
              ______________, ____________ of _________________, a _________________,
              on
              behalf of said ______________.

            

            _______________________________

            Notary
              Public in and for the

            State
              of
              ____________

            My
              Commission Expires:_________

             

            
              
                 

              

              
                -3-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              A

            

            TO
              BILL OF SALE AND ASSIGNMENT

            

            

            (a)    Legal
              Description

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              B

            

            TO
              BILL OF SALE AND ASSIGNMENT

             

            (b)    Leases

             

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              C

            

            TO
              BILL OF SALE AND ASSIGNMENT

            

            

            Property
              Agreements

             

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  Contents

              

            

            

            EXHIBIT
              D

            

            TO
              BILL OF SALE AND ASSIGNMENT

            

            Permitted
              Encumbrances

             

            

            (to
              follow upon review of Title Commitments)

             

             

            
              
                 

              

              
                -1-

                
                  

                

              

              
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                  Contents

              

            

            

            SCHEDULE
              I

            

            Property
              Information

            

            

            Financial
              Information

            Monthly
              Income Statements (Trailing 12 months)

            Current
              Tenant Rent Rolls (“Rent Roll”)

            Property
              Tax Annual Assessments/Property Tax Amounts

            Accounts
              Receivable Listing

            Utility
              Account Numbers/Deposits

            

            Property

            General
              Information (i.e., address, construction dates, site data, square
              footage)

            Floorplans

            Apartment
              Mix/List of Combined Units

            Title
              Commitments

            Existing
              Surveys

            

            Operations

            Residency
              Agreements (sample)

            Monthly
              Billing Statement (sample)

            Major
              Service Contracts/Warranty Agreements
              (with
              Brookdale, or with Seller)

            Capital
              Leases

            Licenses,
              Permits and Registrations

            Governmental
              Notices

            Certificates
              of Occupancy

            

            Marketing

            Marketing
              Brochure

            Current
              Marketing Rents

            Monthly
              Occupancy History (2002-2005 YTD)

            Analysis/Map
              of Surrounding Competition

            Market
              Demographic Overview

            

            Environmental

            Existing
              Environmental Reports (if available)

            Existing
              Geotechnical Reports (if available)

            

            Other

            Description
              of Existing Insurance Coverage

            Listing
              of Pending Litigation

             

            
              
                 

              

              
                -1-EX 10.6

    
       

      
        
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            to Table of
            Contents

           

        

      

      EXHIBIT
        10.6

      

      

      

      

      

      

      ASSET
        PURCHASE AGREEMENT

      

      BY
        AND BETWEEN

      

      Allen
        Park Two, Inc.

      

      and

      

      Allen
        Park Three, Inc.

      collectively,
        as Sellers

      

      AND

      

      ARC
        Sweet Life Shawnee, LLC

      as
        Buyer

      

      

      Dated
        as of March 22, 2006

       

      
        
           

        

        
          
          

          
            

          

        

        
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            to Table of
            Contents

        

      

      

      TABLE
        OF CONTENTS

      

      
        	
                ARTICLE
                  I. PURCHASE AND
                  SALE OF ASSETS

              	
                5

              
	
                1.1
                  Purchase and Sale of
                  Assets

              	
                5

              
	
                1.2
                  Excluded Assets from
                  Purchase and Sale of Assets

              	
                6

              
	
                1.3
                  Assumption of
                  Liabilities

              	
                7

              
	 	 
	
                ARTICLE
                  II.
                  CONSIDERATION

              	
                7

              
	
                2.1
                  Purchase
                  Price

              	
                7

              
	
                2.2
                  Payment of Purchase
                  Price

              	
                7

              
	
                2.3
                  Adjustment to
                  Purchase Price

              	
                8

              
	
                2.4
                  Assigned
                  Contracts

              	
                9

              
	 	 
	
                ARTICLE
                  III. CLOSING;
                  OBLIGATIONS OF THE PARTIES

              	
                9

              
	
                3.1
                  Closing
                  Date

              	
                9

              
	
                3.2
                  Obligations of the
                  Parties at the Closing.

              	
                9

              
	
                3.3
                  Confidentiality

              	
                11

              
	 	 
	
                ARTICLE
                  IV.
                  REPRESENTATIONS AND WARRANTIES BY SELLER

              	
                11

              
	
                4.1
                  Organization and
                  Good Standing

              	
                11

              
	
                4.2
                  Authorization

              	
                12

              
	
                4.3
                  No
                  Violation

              	
                12

              
	
                4.4
                  Assets

              	
                12

              
	
                4.5
                  Title to Properties;
                  Encumbrances

              	
                12

              
	
                4.6
                  Trademarks,
                  Etc

              	
                12

              
	
                4.7
                  Compliance with
                  Applicable Law

              	
                13

              
	
                4.8
                  Litigation

              	
                13

              
	
                4.9
                  Employees and Fringe
                  Benefit Plans

              	
                13

              
	
                4.10
                  Environmental
                  Matters

              	
                14

              
	
                4.11
                  Labor
                  Matters

              	
                15

              
	
                4.12
                  Contracts; No
                  Breach

              	
                15

              
	
                4.13
                  Professional
                  Fees

              	
                16

              
	
                4.14
                  Consents and
                  Approvals

              	
                16

              
	
                4.15
                  Residency
                  Agreements

              	
                16

              
	
                4.16
                  Licenses

              	
                16

              
	
                4.17
                  Financial
                  Statements and Reports

              	
                16

              
	
                4.18
                  Tax
                  Matters

              	
                17

              
	
                4.19
                  Insurance

              	
                17

              
	
                4.20
                  Affiliated
                  Transactions

              	
                17

              
	
                4.21
                  Insolvency

              	
                17

              
	
                4.22
                  Absence of
                  Changes

              	
                17

              
	
                4.23
                  Full
                  Disclosure

              	
                17

              
	
                4.24
                  Medicare/Medicaid
                  Participation

              	
                18

              
	 	 
	
                ARTICLE
                  V.
                  REPRESENTATIONS, WARRANTIES AND COVENANTS BY BUYER

              	
                18

              
	
                5.1
                  Organization and
                  Good Standing

              	
                18

              
	
                5.2
                  Authorization

              	
                18

              
	
                5.3
                  No
                  Violation

              	
                18

              

      

       

       

      
        
           

        

        
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                5.4
                  Professional
                  Fees

              	
                19

              
	
                5.5
                  Consents and
                  Approvals

              	
                19

              
	
                5.6
                  Litigation

              	
                19

              
	
                5.7
                  Access to
                  Records

              	
                19

              
	
                5.8
                  Further
                  Assurances

              	
                19

              
	
                5.9
                  Taxes

              	
                19

              
	
                5.10
                  Accounts
                  Receivable

              	
                19

              
	 	 
	
                ARTICLE
                  VI. COVENANTS AND
                  AGREEMENTS OF SELLER

              	
                20

              
	
                6.1
                  Conduct of Business
                  Pending the Closing

              	
                20

              
	
                6.2
                  Access; Further
                  Assurances

              	
                21

              
	
                6.3
                  Schedules

              	
                21

              
	
                6.4
                  Consents and
                  Approvals

              	
                21

              
	
                6.5
                  Survey and Title
                  Insurance

              	
                21

              
	
                6.6
                  Taxes

              	
                22

              
	
                6.7
                  Additional Financial
                  Information

              	
                22

              
	
                6.8
                  Closing
                  Conditions

              	
                22

              
	
                6.9
                  Interim Operating
                  Reporting

              	
                22

              
	
                6.10
                  Tail
                  Insurance

              	
                22

              
	
                6.11
                  Exclusive
                  Negotiations

              	
                23

              
	
                6.12
                  No Public
                  Statement

              	
                23

              
	
                6.13
                  Non-Compete
                  Agreement

              	
                23

              
	
                6.14
                  Additional Design
                  Information

              	
                23

              
	 	 
	
                ARTICLE
                  VII. CONDITIONS
                  TO BUYER’S OBLIGATIONS

              	
                23

              
	
                7.1
                  Representations and
                  Warranties; No Material Adverse Change

              	
                23

              
	
                7.2
                  Performance by
                  Seller

              	
                24

              
	
                7.3
                  Certificate of
                  Seller

              	
                24

              
	
                7.4
                  Opinions of Seller’s
                  Counsel

              	
                24

              
	
                7.5
                  Seller’s Consents
                  and Approvals

              	
                24

              
	
                7.6
                  Litigation

              	
                24

              
	
                7.7
                  Title
                  Insurance

              	
                24

              
	
                7.8
                  Buyer’s Consents and
                  Approvals

              	
                25

              
	
                7.9
                  Environmental
                  Audit

              	
                25

              
	
                7.10
                  Engineering
                  Report

              	
                25

              
	
                7.11
                  Inspection Period;
                  Termination of Certain Conditions

              	
                25

              
	
                7.12
                  Development
                  Agreement

              	
                25

              
	
                7.13
                  Option
                  Agreements

              	
                25

              
	 	 
	
                ARTICLE
                  VIII. CONDITIONS
                  TO SELLER’S OBLIGATIONS

              	
                26

              
	
                8.1
                  Representations and
                  Warranties

              	
                26

              
	
                8.2
                  Performance by
                  Buyer

              	
                26

              
	
                8.3
                  Certificate of
                  Buyer

              	
                26

              
	
                8.4
                  Development
                  Agreement

              	
                26

              
	
                8.5
                  Option
                  Agreements

              	
                26

              
	 	 
	
                ARTICLE
                  IX. RISK OF LOSS;
                  CASUALTY

              	
                26

              
	 	 
	
                ARTICLE
                  X.
                  CONDEMNATION

              	
                27

              
	 	 
	
                ARTICLE
                  XI.
                  INDEMNIFICATION

              	
                27

              
	
                11.1
                  Indemnification by
                  Seller

              	
                27

              

      

       

       

      
        
           

        

        
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                11.2
                  Indemnification by
                  Buyer

              	
                28

              
	
                11.3
                  Procedure

              	
                28

              
	
                11.4
                  Limitations on
                  Indemnification

              	
                29

              
	 	 
	
                ARTICLE
                  XII. SURVIVAL OF
                  REPRESENTATIONS

              	
                29

              
	
                12.1
                  Survival of
                  Representations

              	
                29

              
	
                12.2
                  Statements as
                  Representations

              	
                29

              
	
                12.3
                  Remedies
                  Cumulative

              	
                29

              
	 	 
	
                ARTICLE
                  XIII.
                  TERMINATION OF AGREEMENT PRIOR TO CLOSING

              	
                30

              
	 	 
	
                ARTICLE
                  XIV.
                  MISCELLANEOUS

              	
                30

              
	
                14.1
                  Schedules

              	
                30

              
	
                14.2
                  Real Estate
                  Broker

              	
                30

              
	
                14.3
                  Expenses

              	
                31

              
	
                14.4
                  Assignability;
                  Parties in Interest

              	
                31

              
	
                14.5
                  Entire Agreement;
                  Amendments

              	
                31

              
	
                14.6
                  Headings

              	
                31

              
	
                14.7
                  Severability

              	
                31

              
	
                14.8
                  Notices

              	
                31

              
	
                14.9
                  Governing
                  Law

              	
                32

              
	
                14.10
                  Counterparts

              	
                32

              
	
                14.11
                  Pre-Closing
                  Negligent or Tortious Acts

              	
                32

              

      

      

      Exhibits

      A: Land

      B: Forms
        of
        Special Warranty Deeds

      C: Form
        of
        Bill of Sale

      D: Form
        of
        Closing Escrow Agreement

      E: Terms
        of
        Development Agreement

      F: Excluded
        Land

       

      
        
           

        

        
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      ASSET
        PURCHASE AGREEMENT

      

      This
        Asset Purchase Agreement (this “Agreement”) is made and entered into as of the
        22nd day of March, 2006, by and between Allen Park Two, Inc., a Kansas
        corporation having its principal office in Olathe, Kansas, and Allen Park
        Three,
        Inc., a Kansas corporation having its principal place office in Olathe, Kansas
        (individually and collectively and jointly and severally “Seller”), and ARC
        Sweet Life Shawnee, LLC, a Tennessee limited liability company, having its
        principal office in Brentwood, Tennessee (together with its permitted assignees,
        “Buyer”).

      

      RECITALS

      

      WHEREAS,
        Seller currently owns and operates those certain senior living facilities
        identified on Exhibit
        A
        hereto
        (each, a “Facility” and collectively, the “Facilities”);

      

      WHEREAS,
        Seller desires to sell to Buyer at the Closing (as hereinafter defined),
        and
        Buyer desires to purchase from Seller, all of the Assets (as hereinafter
        described) that comprise the Facilities, upon and subject to the terms and
        conditions contained herein;

      

      NOW,
        THEREFORE, IN CONSIDERATION of the promises and of the mutual representations,
        warranties and covenants that are made and to be performed by the respective
        parties, it is agreed as follows:

      

      ARTICLE
        I.

      PURCHASE
        AND SALE OF ASSETS

      

      1.1    Purchase
        and Sale of Assets.
        Subject
        to the terms and conditions hereof, at the Closing, Seller shall sell, transfer,
        convey, assign and deliver to Buyer, and Buyer shall purchase, acquire and
        accept from Seller, all of Seller’s right, title and interest in the assets,
        tangible or intangible, used or useful in, or directly or indirectly relating
        to, the Facilities, including without limitation, the following-described
        assets, wherever located (collectively, the “Assets”):

      

      (a)    Those
        certain tracts of land on which each Facility is located, which land is more
        particularly described on Exhibit
        A
        attached
        hereto (the “Land”), together with all easements, hereditaments, appurtenances,
        rights of way, privileges and rights benefiting the same;

      

      (b)    All
        fixed
        assets, improvements, buildings, construction-in-progress, stored construction
        materials (on or off-site), machinery, equipment, fixtures, furniture,
        furnishings, plant or office equipment, computer hardware or software, medical
        or nursing equipment, inventories, medical supplies, operating supplies and
        materials and vehicles, related to or connected with the ownership, use,
        occupancy or operation of the Facilities (collectively, the “Fixed Assets”),
        including the Fixed Assets described in Schedule
        1.1(b);

       

      (c)    The
        residency agreements, admission agreements, or similar agreements or
        arrangements with residents of the Facilities (collectively, the “Residency
        Agreements”), including the Residency Agreements described in Schedule
        1.1(c);

       

      
        
           

        

        
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      (d)    Deposits
        of any kind held for, on account of, on behalf of or with respect to either
        (i)
        residents of the Facilities; or (ii) potential residents of the Facilities
        (including, without limitation, future residency agreement deposits, escrow
        deposits and waiting list deposits) (collectively, the “Resident Deposits”),
        including the Resident Deposits described in Schedule
        1.1(d);

      

      (e)    All
        contracts and agreements relating directly or indirectly to the construction,
        ownership, use, occupancy or operation of the Facilities that have been
        designated by Buyer on Schedule
        1.1(e)
        as
        Assigned Contracts pursuant to Section
        2.4
        hereof
        (collectively, together with the Residency Agreements, the “Assigned
        Contracts”); 

      

      (f)    All
        operating data and records related to the ownership, use, occupancy or operation
        of the Facilities, including books, records, sales and sales promotional
        data,
        advertising and marketing materials (including camera-ready art), prospect
        lists, operating handbooks, manuals and procedures, medical records and medical
        information concerning residents of the Facilities, supplier lists, business
        plans and reference catalogs (collectively, the “Records”);

      

      (g)    All
        trademarks, trade names, service marks and registered user entries relating
        to
        the ownership, use, occupancy or operation of the Facilities (including,
        but not
        limited to, all of Seller’s right, title and interest in and to the names “The
        Sweet Life,” “The Sweet Life at Shawnee,” and “The Sweet Life at Rosehill” and
        any similar names or derivations thereof), and all of Seller’s right, title and
        interest in any application for any of the foregoing, and, to the extent
        transferable, all of Seller’s right, title and interest under permits, licenses,
        franchises and similar authorizations used by Seller in connection with the
        use,
        ownership, occupancy or operation of the Facilities (collectively, the
“Rights”);

      

      (h)    All
        of
        Seller’s right to the telephone numbers used by the Facilities and to the
        telephone listings in the local telephone directories;

      

      (i)    The
        goodwill of the Facilities and the businesses conducted by Seller on the
        Land;
        and

      

      (j)    Any
        and
        all other real and personal property, and tangible or intangible assets,
        of
        Seller located on the Land, or relating to the construction, use, ownership,
        occupancy or operation of the Facilities or the operation of the businesses
        conducted by Seller on the Land. 

      

      1.2    Excluded
        Assets from Purchase and Sale of Assets.
        Notwithstanding the foregoing, Seller shall retain all of Seller’s right, title
        and interest in the following described assets (collectively, the “Excluded
        Assets”):

      

      (a)    All
        cash
        and cash equivalents; 

      

      (b)    All
        accounts and notes receivable

       

      
        
           

        

        
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      (c)    Those
        certain tracts of land more particularly described on Exhibit
        F
        attached
        hereto (the “Excluded Land”); and

      

      (d)    All
        contracts and agreements that are not listed on Schedule
        1.1(e)
        (collectively, the “Excluded Contracts”).

      

      1.3    Assumption
        of Liabilities.
        At
        Closing, Buyer will assume, and agree to pay, discharge and perform when
        lawfully due, the following (collectively, the “Assumed Liabilities”): (i) ad
        valorem real property taxes respecting the Land for the year in which the
        Closing occurs; (ii) all liabilities or obligations of Seller under the Assigned
        Contracts that are listed on Schedules
        1.1(c)
        and
1.1(e),
        but
        only to the extent that they arise after Closing and do not relate to matters
        occurring prior to Closing and excluding all liabilities and obligations
        under
        the Excluded Contracts and the Excluded Land; (iii) all liabilities relating
        to
        the refund of any Resident Deposits, but only to the extent that such Resident
        Deposits are transferred to Buyer or Buyer receives a credit therefor at
        Closing; and (iv) the Employee (as hereinafter defined) expenses described
        in
Section
        2.3,
        but
        only to the extent that Buyer receives a credit therefor at Closing. Except
        as
        set forth in the preceding sentence, Buyer will not assume, and the Assets
        shall
        be transferred free and clear of, any debts, liabilities, obligations, expenses,
        taxes, contracts, liens, encumbrances (other than the hereinafter described
        Permitted Exceptions) or commitments of any kind, character or description,
        whether accrued, absolute, contingent or otherwise, and whether or not reflected
        or reserved against in Seller’s books of accounts or records. Pursuant to
Article
        XI
        hereof,
        Seller will indemnify Buyer against, and hold it harmless from, any such
        obligations and liabilities, other than the Assumed Liabilities.

      

      ARTICLE
        II.

      CONSIDERATION

      

      2.1    Purchase
        Price.
        Subject
        to the adjustments set forth in Section
        2.3,
        the
        purchase price (“Purchase Price”) for the Assets shall be Twenty-nine Million
        Five Hundred Thousand Dollars ($29,500,000.00).

      

      2.2    Payment
        of Purchase Price.
        The
        Purchase Price shall be paid as follows:

      

      (a)    Thirty
        Thousand Dollars ($30,000.00) (the “Earnest Money”), which has been paid to
        First American Title Insurance Company as escrow agent (“Escrow Agent”), which
        amount (together with interest thereon) shall be credited against the Purchase
        Price at the Closing.

      

      (b)    At
        the
        Closing, Buyer shall pay Two Million Dollars ($2,000,000.00) (the “Holdback
        Amount”) to a national banking association as the closing escrow agent pursuant
        to the terms of the escrow agreement in the form attached hereto as Exhibit
        D
        (the
“Closing Escrow Agreement”) as security for Seller’s obligations and liabilities
        under this Agreement.

       

      
        
           

        

        
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      (c)    At
        the
        Closing, Buyer shall pay to Seller the balance of the Purchase Price in
        immediately available funds, either by wire transfer or cash, subject to
        a
        credit for the Earnest Money (together with interest thereon) and the Holdback
        Amount, and further subject to the adjustments required by Section
        2.3
        hereof.

      

      The
        Earnest Money shall be at all times held by the Escrow Agent in an
        interest-bearing account, and any reference to the “Earnest Money” shall also be
        deemed to include such interest. Seller, Buyer and the Escrow Agent have
        entered
        into a mutually-satisfactory escrow agreement prior to the deposit of the
        Earnest Money with the Escrow Agent. The costs of the escrow arrangement
        with
        Escrow Agent shall be split equally between Buyer and Seller.

      

      2.3    Adjustment
        to Purchase Price.
        At the
        Closing, the following adjustments shall be made as of 11:59 p.m. on the
        day
        immediately preceding the Closing Date (as hereinafter defined), and shall
        be
        added to or deducted from the Purchase Price, as the case may be:

      

      (a)    Real
        and
        personal property ad valorem taxes upon the Assets assessed for the year
        in
        which the Closing occurs (regardless of when due and payable) shall be prorated
        as of the Closing Date, and the portion allocable to Seller shall be deducted
        from the Purchase Price. If the amount of such taxes for the year in which
        the
        Closing occurs cannot reasonably be determined, the apportionment shall be
        based
        at the Closing upon a reasonable estimation thereof, which shall be based
        upon
        the amount of such taxes for the immediately preceding tax year, together
        with
        any reasonably anticipated changes thereto. Any back taxes (including penalties
        and interest) assessed for any year prior to the year in which the Closing
        occurs shall be paid in full by Seller at the Closing, and shall be
        affirmatively insured against by the Title Company (as hereinafter defined)
        in a
        manner satisfactory to Buyer. Special assessments, if any, due and payable
        prior
        to, or contemporaneously with, the Closing shall be paid by Seller at the
        Closing.

      

      (b)    All
        salaries, wages, compensation, employee benefits, unemployment taxes,
        withholding taxes, FICA payments, and vested or accrued sick, vacation or
        holiday pay, for all personnel employed in the operation, use, ownership
        or
        maintenance of the Facilities (collectively, the “Employees”) shall be prorated
        as of the Closing Date, and the portion allocable to Seller shall be deducted
        from the Purchase Price. Buyer shall assume responsibility for payment of
        such
        amounts as and when they become due.

      

      (c)    All
        utility expenses incurred in the operation or ownership of the Facilities
        prior
        to and including the Closing Date (including, without limitation, water,
        sewer,
        gas, electricity, telephone or other utility charges) shall be paid by Seller
        at
        the Closing, and shall not be assumed by Buyer; provided, however, that,
        to the
        extent that it is not reasonably practicable to pay such utility expenses
        (or
        any of them) at Closing, the amount thereof shall be prorated, and the portion
        allocable to Seller shall be deducted from the Purchase Price.

       

      
        
           

        

        
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      (d)    All
        prepaid resident fees and other prepaid items constituting revenues from
        the
        operation of the Facilities shall be prorated as of the Closing Date and
        the
        portion allocable to Buyer shall be deducted from the Purchase Price. All
        prepaid items constituting expenses of or from the operation of the Facilities
        shall be prorated as of the Closing Date and the portion allocable to Buyer
        shall be added to the Purchase Price; provided, however, that such prepaid
        expenses shall be added to the Purchase Price only to the extent that such
        expenses actually benefit the Facilities and the Buyer following the Closing
        Date.

      

      (e)    Without
        duplicating any other adjustments pursuant to this Section
        2.3,
        all
        Assumed Liabilities shall be prorated as of the Closing Date, and the portion
        thereof accruing prior to the Closing Date shall either be paid by Seller
        at
        Closing from the Purchase Price or shall be deducted from the Purchase
        Price.

      

      It
        is the
        intention of the parties that the Transactions (as hereinafter defined) be
        treated as being economically effective as of the Closing Date, with all
        profit,
        income, revenues, costs and expenses relating to the operation of the Facilities
        on and after the Closing Date, accruing to the benefit or detriment of Buyer;
        provided, however, that nothing in this Section
        2.3
        shall
        affect or impair Seller’s indemnity obligations under Article
        XI
        for
        matters occurring or arising prior to the Closing Date. All adjustments and
        allocations shall be made in cash at the Closing. Where adjustments are based
        on
        estimates, such estimates shall be made reasonably and in good faith to
        approximate (exactly as possible) expected results; but there shall be
        readjustments between Seller and Buyer as soon as practicable after such
        actual
        figures are available. Buyer shall prepare a detailed summary of such
        adjustments, allocations and, if applicable, readjustments.

      

      2.4    Assigned
        Contracts.
        On or
        before the expiration of the Inspection Period, Buyer shall determine, in
        its
        sole and absolute discretion, which Contracts (as hereinafter defined) will
        be
        assumed by Buyer, and will provide Seller with Schedule
        1.1(e)
        specifically identifying such contracts to be included as Assigned
        Contracts.

      

      ARTICLE
        III.

      CLOSING;
        OBLIGATIONS OF THE PARTIES

      

      3.1    Closing
        Date.
        The
        closing (the “Closing”) of the transactions contemplated hereby (the
“Transactions”) shall take place on or before May 15, 2006 or such earlier date
        as the parties shall mutually agree (the “Closing Date”). The Closing shall be
        conducted at the offices of Bass, Berry & Sims PLC in Nashville, Tennessee,
        or at such other place as Buyer chooses.

      

      3.2    Obligations
        of the Parties at the Closing.

      

      (a)    At
        the
        Closing and subject to the conditions set forth in Article
        VII,
        Buyer
        shall deliver (or cause to be delivered) to Seller:

      

      (i)    the
        consideration as specified in Section
        2.1
        hereof;

      

      (ii)    the
        Closing Escrow Agreement, duly executed by Buyer;

       

      
        
           

        

        
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      (iii)    the
        Development Agreement as described in Sections
        7.12
        and
8.4
        hereof,
        duly executed by Buyer;

      

      (iv)    the
        Option Agreement as described in Sections
        7.13
        and
8.5
        hereof,
        duly executed by Buyer;

      

      (v)    a
        copy of
        the resolutions of the member of Buyer, certified by Buyer’s Secretary,
        authorizing the execution, delivery and performance of this Agreement and
        the
        other documents referred to herein to be executed by Buyer, and the consummation
        of the Transactions;

      

      (vi)    a
        certificate of Buyer certifying as to the accuracy in all material respects
        of
        Buyer’s representations and warranties at and as of the Closing and that Buyer
        has performed and complied with in all material respects all of the terms,
        provisions and conditions to be performed and complied with by Buyer at or
        before the Closing; and

      

      (vii)    such
        other certificates and documents as Seller or its counsel may reasonably
        request
        (including an express assumption of the Assumed Liabilities).

      

      (b)    At
        the
        Closing and subject to the conditions set forth in Article
        VIII,
        Seller
        will deliver (or cause to be delivered) to Buyer:

      

      (i)    special
        warranty deeds, substantially in the forms set forth on Exhibit
        B,
        subject
        to the Permitted Exceptions;

      

      (ii)    a
        bill of
        sale in the form set forth on Exhibit
        C,
        and
        endorsements, assignments, motor vehicle titles and other good and sufficient
        instruments of conveyance and transfer (in form and substance reasonably
        satisfactory to Buyer), as shall be effective to vest in Buyer all of Seller’s
        right, title and interest in the Assets; 

      

      (iii)    all
        of
        the Assigned Contracts (including the Residency Agreements) and the
        Records;

      

      (iv)    the
        Closing Escrow Agreement, duly executed by Seller;

      

      (v)    the
        Development Agreement as described in Sections
        7.12
        and
8.4
        hereof,
        duly executed by Seller;

      

      (vi)    the
        Option Agreement as described in Sections
        7.13
        and
8.5
        hereof,
        duly executed by Seller;

      

      (vii)    a
        copy of
        the resolutions of the Board of Directors and shareholders of Seller, certified
        by Seller’s Secretary, authorizing the execution, delivery and performance of
        this Agreement and the other documents referred to herein to be executed
        by
        Seller, and the consummation of the Transactions;

       

      
        
           

        

        
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      (viii)    a
        certificate of Seller certifying as to the accuracy in all material respects
        of
        Seller’s representations and warranties at and as of the Closing and that Seller
        has performed and complied with in all material respects all of the terms,
        provisions and conditions to be performed and complied with by Seller at
        or
        before the Closing;

      

      (ix)    the
        opinion of Kevin L. Bennett, legal counsel for Seller (“Seller’s Counsel”), the
        terms of which are substantially as set forth in Section
        7.4
        hereof;

      

      (x)    all
        required releases and consents from any creditors of Seller that are necessary
        or appropriate for Buyer to obtain good, valid and marketable title to the
        Assets subject only to the Permitted Exceptions (as hereinafter
        defined);

      

      (xi)    a
        Non-Compete Agreement as described in Section
        6.13
        (the
“Non-Compete Agreement”); and

      

      (xii)    such
        other certificates and documents as Buyer or its counsel may reasonably request
        (including, but not limited to, a FIRPTA affidavit).

      

      3.3    Confidentiality.
        Between
        the date of this Agreement and the Closing, Buyer and Seller will maintain
        in
        confidence, and will cause the directors, officers, employees, agents and
        advisors of Buyer and Seller to maintain in confidence, and not use to the
        detriment of another party, any written, oral or other information obtained
        from
        the other in connection with this Agreement or the Transactions, unless (i)
        such
        information is already known to such party or to others not bound by a duty
        of
        confidentiality or such information becomes publicly available through no
        fault
        of such party; (ii) the use of such information is necessary or appropriate
        in
        making any filing or obtaining any consent or approval required for the
        consummation of the Transactions; (iii) the furnishing or use of such
        information is required by or necessary or appropriate in connection with
        legal
        proceedings or any debt or equity financing undertaken by Buyer; or (iv)
        the
        furnishing or use of such information is required by Law (as hereinafter
        defined).

      

      If
        the
        Transactions are not consummated, each party will return or destroy as much
        of
        such written information as the other party may reasonably request. Whether
        or
        not the Closing takes place, Seller waives any cause of action, right or
        claim
        arising out of the access of Buyer or its representatives to any trade secrets
        or other confidential information of the Seller except for the intentional
        competitive misuse by Buyer of such trade secrets or confidential
        information.

      

      ARTICLE
        IV.

      REPRESENTATIONS
        AND WARRANTIES BY SELLER

      

      Seller
        hereby represents and warrants to Buyer as follows:

      

      4.1    Organization
        and Good Standing.
        Each of
        Sellers is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Kansas and has full power and authority to
        own
        the Assets as they are now owned and to carry on its business as its business
        is
        now being conducted.

       

      
        
           

        

        
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      4.2    Authorization.
        Seller
        has full power and authority to enter into this Agreement, perform its
        obligations hereunder and carry out the Transactions. Seller has taken all
        action required by law, its charter or bylaws and otherwise to authorize
        the
        execution and delivery by Seller hereof and the consummation by Seller of
        the
        Transactions. This Agreement constitutes, and each of the other agreements
        to be
        executed by Seller in connection with the Transactions upon execution and
        delivery of such agreements will constitute, legal, valid and binding agreements
        and obligations of Seller, enforceable against Seller in accordance with
        their
        respective terms.

      

      4.3    No
        Violation.
        The
        execution and delivery hereof by Seller does not, and the consummation of
        the
        Transactions will not (i) violate any provision of the charter or bylaws
        of
        Seller; (ii) violate any provision of, or result in the creation of any lien
        or
        security interest upon the Assets under, any agreement, indenture, instrument,
        lease, security agreement, mortgage or lien relating to the Assets to which
        Seller is a party or by which any of the Assets are bound; (iii) violate
        any
        order, arbitration award, judgment, writ, injunction, decree, statute, rule
        or
        regulation relating to the Assets applicable to Seller; or (iv) violate any
        other contractual or legal obligation or restriction relating to the Assets
        or
        to which Seller is subject. 

      

      4.4    Assets.
        The
        Assets constitute all the assets owned, leased or used by Seller in the
        operation of, or related to, the Facilities. Schedule
        1.1(b)
        hereof
        contains an accurate and complete description of all material Fixed Assets.
        None
        of the Land is currently the subject of any eminent domain, condemnation
        or
        similar proceeding, and, to Seller’s knowledge, no such proceeding is
        threatened. Seller is now in possession of the Land, there is no adverse
        claim
        against the Land and there are no pending or, to Seller’s knowledge, threatened
        proceedings which might interfere with Buyer’s quiet enjoyment of the Land. All
        of the Assets (other than intangible assets) are in good operating condition
        and
        repair.

      

      4.5    Title
        to Properties; Encumbrances.
        Seller
        has good, valid and marketable title to the Assets, and none of the Assets
        is
        subject to any mortgage, pledge, lien, security interest, conditional sale
        agreement, encumbrance or charge of any kind, except (i) liens that are to
        be
        satisfied at or prior to the Closing; (ii) liens for current taxes not yet
        due;
        (iii) rights of residents of the Facilities under the Residency Agreements
        described on Schedule
        1.1(c);
        (iv)
        the provisions of all applicable zoning laws; and (v) the matters set forth
        on
        the Title Commitment that is referred to in Section
        6.5
        hereof
        and that Buyer approves pursuant to the procedures set forth in such
Section
        6.5
        (collectively, the “Permitted Exceptions”).

      

      4.6    Trademarks,
        Etc.
        With
        respect to the conduct of the business of Seller conducted at the Facilities,
        Seller does not own or use any trademarks, tradenames, copyrights or service
        marks, and with respect thereto, Seller has not received any notice or claim
        of
        conflict with the asserted rights of others. Seller is not required to pay
        any
        royalty, license fee or similar type of compensation in connection with the
        conduct of the business of Seller.

       

      
        
           

        

        
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      4.7    Compliance
        with Applicable Law.
        With
        respect to the operation of the Facilities and the ownership of the Assets,
        Seller has in the past duly complied and is presently duly complying in all
        material respects with all applicable laws, ordinances, procedures, judgments
        and decrees of all governmental authorities (federal, state, local or
        otherwise), including without limitation all Healthcare Laws (as hereinafter
        defined). Seller has not received any notice of, or notice of any investigation
        of, and Seller is not aware of, any possible material violation of any
        applicable laws, whether statutory or otherwise, rules, regulations, orders,
        ordinances, procedures, judgments and decrees of all governmental authorities
        (federal, state, local or otherwise) (collectively, “Laws”), including without
        limitation any Healthcare Laws, relating to or affecting the operation of
        the
        Facilities or the Assets. As used herein, “Healthcare Laws” means the following
        laws, regulations, rules or directives relating to the regulation of the
        health
        care industry or to payment for services rendered by healthcare providers:
        (i)
        the federal Medicare statutes (which include, but are not limited to, 42
        U.S.C.
§§ 1320, 1320a-7s, 1320a-7b, 1395nn, 42 U.S.C. § 1395u), the Federal
        False Claims Act (31 U.S.C. § 3729-33), and, with respect to each of the
        above, any ordinance, rule, regulation or order; (ii) any prohibition on
        the
        making of any false claim, false statement or misrepresentation of material
        facts to any third party payor (including commercial payors) or any governmental
        agency that administers a federal or state health care program (including,
        but
        not limited to Medicare); and (iii) the licensure, certification or registration
        requirements related to health care facilities, services or
        equipment.

      

      4.8    Litigation.
        Except
        as set forth on Schedule
        4.8,
        there
        are no suits, actions or proceedings pending or, to the knowledge of Seller,
        threatened against, affecting or involving the Assets, the Facilities or
        Seller
        or that would affect Seller’s ability to perform its obligations
        hereunder.

      

      4.9    Employees
        and Fringe Benefit Plans.

      

      (a)    Schedule
        4.9
        hereof
        sets forth the names, ages, duties and titles of all Employees, together
        with
        all the hourly wages, salaries, bonuses, compensation, benefits, severance
        pay,
        unemployment taxes, withholding taxes, FICA payments and vested or accrued
        vacation, holiday and sick pay, for all Employees. Except as specifically
        set
        forth on Schedule
        4.9
        hereof,
        Seller has not received written notification, and has no reason to believe,
        that
        any Employee presently plans to terminate his or her employment, whether
        because
        of the Transactions or otherwise. Except as specifically set forth on
Schedule
        4.9
        hereof,
        all Employees are terminable at will.

       

      
        
           

        

        
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      (b)    Schedule
        4.9
        hereof
        contains a summary of the terms of each employment, bonus, deferred
        compensation, pension, stock option, stock appreciation right, profit-sharing
        or
        retirement plan, arrangement or practice and each other agreement or fringe
        benefit plan, arrangement or practice, affecting the Employees in any way.
        Copies of each such agreement or plan have heretofore been delivered to Buyer
        by
        Seller. Seller does not have any commitment, whether formal or informal,
        and
        Buyer will not have any obligation following the Closing arising out of any
        agreement or action of Seller or any plan in effect prior to Closing, to:
        (i)
        create any additional such agreement, plan, arrangement or practice; (ii)
        modify
        or change any such agreement, plan, arrangement or practice; or (iii) maintain
        for any period of time any such agreement, plan, arrangement or practice,
        except
        as accurately and completely described in Schedule
        4.9
        hereof.
Schedule
        4.9
        hereof
        contains an accurate and complete description of the funding policies (and
        commitments, if any) of Seller with respect to each such existing plan,
        arrangement or practice.

      

      (c)    Except
        as
        specifically set forth on Schedule
        4.9,
        Seller
        has no employee benefit plans.

      

      (d)    With
        respect to the operation of the Facilities, Seller has complied in all material
        respects with all applicable federal, state and local Laws relating to
        employment and/or employment relationships, including, without limitation,
        wage-related Laws, anti-discrimination Laws, workers compensation, and employee
        safety Laws.

      

      (e)    Schedule
        4.9
        hereof
        contains an accurate and complete description of Seller’s workers compensation
        experience since the Facilities were first opened for business.

      

      4.10    Environmental
        Matters.

      

      (a)    Seller
        has not received any notice that any federal, state or local permits, licenses
        and authorizations required for the use and operation of the Facilities have
        not
        been obtained or are not presently in effect.

      

      (b)    Except
        as
        specifically set forth in Schedule
        4.10
        hereof,
        the Land has not been used by Seller or, to the best of Seller’s knowledge, by
        any other person at any time to handle, treat, store or dispose of any hazardous
        or toxic waste or substance, except for the handling, treatment, storage
        or
        disposal of any such waste or substance by Seller in the ordinary course
        of its
        business and in compliance in all material respects with all applicable Laws.
        The Land, including all soils, ground waters and service waters located on,
        in,
        under or (to the best of Seller’s knowledge) adjacent to the Land, is not
        contaminated with Hazardous Materials. As used herein, the term “Hazardous
        Materials” means gasoline, motor oil, fuel oil, waste oil, other petroleum or
        petroleum-based products, asbestos, polychlorinated biphenyls (“PCBs”) and any
        chemical, material or substance to which exposure is prohibited, limited
        or
        regulated by any federal, state, county, local or regional authority or which,
        even if not so regulated, is known to pose a hazard to health and safety,
        including but not limited to substances and materials defined or designated
        as
“hazardous substances,” “hazardous materials” or “toxic substances” under
        applicable federal, state or local Law.

       

      
        
           

        

        
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      (c)    There
        are
        no consent decrees or outstanding violations affecting the Land regarding
        environmental and land use matters, including, but not limited to, matters
        affecting the emission of air pollutants, the discharge of water pollutants,
        the
        management, storage, disposal, treatment or release of Hazardous Materials
        or
        noise.

      

      (d)    Seller
        is
        not aware of and has not received any notice of any claimed, threatened or
        alleged violations with respect to the ownership or operation of the Land
        or any
        adjacent property under any federal, state or local environmental Law, permit,
        license or authorization.

      

      (e)    Seller
        is
        not aware of and has not received any notice of any violation of any federal,
        state and local Laws, permits, licenses and authorizations relating to
        environmental compliance and control in connection with Seller’s operations on
        the Land.

      

      (f)    There
        are
        no pending, nor has Seller become aware of or received any notice of any
        threatened, lawsuits or administrative proceedings affecting the Land with
        respect to environmental compliance, control or liability.

      

      4.11    Labor
        Matters.
        There
        are no collective bargaining agreements in effect between Seller and labor
        unions or organizations representing any of the Employees. Since Seller has
        owned the Facilities, there has been no written request for collective
        bargaining or for an employee election from any Employee or union, or the
        National Labor Relations Board. Except to the extent set forth in Schedule
        4.11
        hereof,
        (i) Seller is in compliance in all material respects with all federal, state
        and
        local Laws respecting employment and employment practices, terms and conditions
        of employment and wages and hours, and is not engaged in any unfair labor
        practice; (ii) there is no unfair labor practice complaint against Seller
        pending or, to Seller’s knowledge, threatened before the National Labor
        Relations Board or the United States Department of Labor; (iii) there is
        no
        labor strike, dispute, slowdown or stoppage relating to the Facilities in
        progress or, to Seller’s knowledge, threatened against or involving Seller; (iv)
        no question concerning representation has been raised or, to Seller’s knowledge,
        is threatened respecting the Employees; (v) no grievance or arbitration
        proceeding relating to the Facilities is pending and, to Seller’s knowledge, no
        claim therefor exists; and (vi) Seller has not since the Facilities opened
        experienced any labor strike, dispute, slowdown, stoppage or other labor
        difficulty relating thereto other than routine disputes with individual
        employees.

      

      4.12    Contracts;
        No Breach.
        Schedule
        4.12
        contains
        a complete list of all contracts and agreements relating directly or indirectly
        to the construction, ownership, use, occupancy or operation of the Facilities
        (collectively, the “Contracts”). Seller has delivered to Buyer true and complete
        copies of each of the Contracts, and there have been no amendments or
        modifications thereto. Each Contract is in full force and effect and constitutes
        a valid and binding obligation of, and is legally enforceable against Seller
        and, to the knowledge of Seller, the other party(ies) thereto; there are
        no
        cancellations thereof threatened in writing or outstanding material disputes
        thereunder, and Seller has not breached in any material respect any provision
        of, nor does there exist any default by Seller in any material respect under,
        or
        event (including the execution and delivery hereof and the consummation of
        the
        Transactions) which is, or with the giving of notice or the passage of time
        or
        both would become, a breach or default by Seller in any material respect
        under
        the terms of any Contract.

       

      
        
           

        

        
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      4.13    Professional
        Fees.
        Seller
        has not done anything to cause Buyer to be liable for, or to allow the Assets
        to
        be subject to, any liability or obligation for investment banking, brokerage,
        finders, agents or other fees, commissions, expenses or charges (including
        Seller’s attorneys’ fees) in connection with the negotiation, preparation,
        execution or performance hereof or the consummation of the Transactions.
        Seller
        shall defend and indemnify Buyer, and save Buyer harmless from, any damages
        or
        expenses incurred by Buyer on account of the foregoing liabilities or
        obligations, and such agreement shall survive the Closing or the earlier
        termination of this Agreement. 

      

      4.14    Consents
        and Approvals.
        Seller
        has obtained (or will obtain prior to the Closing) all consents, approvals,
        authorizations or orders of third parties, including governmental authorities,
        necessary for the authorization, execution and performance hereof by Seller
        (collectively, “Seller’s Approvals”).

      

      4.15    Residency
        Agreements.
        Schedule
        1.1(c)
        hereof
        contains a list of the Residency Agreements, including the name of each
        resident, the monthly sums due from each resident and any Resident Deposits
        related to such resident. There is no resident of the Facilities that is
        not a
        party to, and subject to, a Residency Agreement. Except for name, identification
        number, date, unit number, term and the monthly sums due from each resident
        and
        deposits, all Residency Agreements are in the general form that has heretofore
        been delivered to Buyer by Seller. Except as disclosed on Schedule
        1.1(c)
        hereof,
        Seller is not aware of any material dispute, breach, default or event of
        default
        under or with respect to any Residency Agreement. Each Residency Agreement
        is
        assignable by Seller, without the consent of the resident that is a party
        thereto.

      

      4.16    Licenses.
        Schedule
        4.16
        hereof
        contains a description of all licenses, permits, certificates of need, approvals
        and authorizations that Seller currently has, and that are necessary, required
        or appropriate, with respect to the operation of the Facilities. Without
        limiting the generality of the foregoing, the Facilities are appropriately
        and
        duly licensed for the number of assisted living units and for the number
        of
        skilled nursing units at each such Facility.

      

      4.17    Financial
        Statements and Reports.
        The
        Seller’s financial statements as of and for each of the fiscal years ended
        December 31, 2003, 2004 and 2005 and as of and for the one (1) month ended
        January 31, 2006, copies of which have previously been delivered to Buyer,
        (i)
        are true, correct, complete and accurate in all material respects; (ii) have
        been prepared by Seller and its advisors in accordance with generally accepted
        accounting principles consistently applied (except for the items set forth
        on
Schedule
        4.17);
        and
        (iii) fairly present in all material respects the financial condition and
        results of the operation of the Facilities, except in the case of interim
        financial statements that such interim financial statements are subject to
        year-end adjustments, which adjustments will not be material.

       

      
        
           

        

        
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      4.18    Tax
        Matters.
        Seller
        has duly filed all tax reports and returns required to be filed by it and
        has
        duly paid all taxes and other charges due or claimed to be due from it by
        federal, state or local taxing authorities (including without limitation,
        those
        due in respect of its properties, income, franchises, licenses, sales and
        payrolls); and true and correct copies of all federal tax reports and returns
        relating to such taxes and other charges for the period since January 1,
        2001
        have been heretofore delivered to Buyer. The liabilities for taxes contained
        in
        the financial statements and carried on the books of Seller are adequate
        to
        cover all tax liabilities as of the date of this Agreement other than normal
        tax
        accruals occurring since January 31, 2006 in the ordinary course of business.
        Since January 31, 2006, Seller has not incurred any tax liabilities other
        than
        in the ordinary course of business; there are no tax liens (other than liens
        for
        current taxes not yet due) upon any properties or assets of Seller (whether
        real, personal or mixed, tangible or intangible) and, except as reflected
        in the
        financial statements, there are no pending or threatened questions or
        examinations relating to, or claims asserted for, taxes or assessments against
        Seller and there is no basis for any such question or claim. Seller has not
        granted or been requested to grant any extension of the limitation period
        applicable to any claim for taxes or assessments with respect to
        taxes. 

      

      4.19    Insurance.
        Schedule
        4.19
        sets
        forth a true and complete list of all policies of property, fire, casualty,
        liability, life, worker’s compensation, libel and slander and other forms of
        insurance of any kind relating to the Assets or the business or operations
        of
        the Facilities and owned or held by Seller as of the date hereof. All such
        policies are: (a) in full force and effect; and (b) valid, outstanding, and
        enforceable policies and the policy holder is not in default in any material
        respect thereunder.

      

      4.20    Affiliated
        Transactions.
        Except
        as set forth on Schedule
        4.20,
        (a)
        none of the Assigned Contracts has, nor will any have, as a party thereto
        an
        affiliate of Seller, and (b) there are no, and during the immediately preceding
        two (2) years, there have been no other transactions or arrangements between
        Seller and its affiliates. 

      

      4.21    Insolvency.
        Seller
        is not insolvent and has the ability to pay all of its debts as they become
        due,
        and further is not involved in, and is not contemplating, any bankruptcy,
        reorganization or insolvency proceeding of any kind.

      

      4.22    Absence
        of Changes.
        Except
        as described on Schedule
        4.22,
        since
        January 31, 2006, Seller has conducted the business and operations of the
        Facilities in the ordinary course of business. Since such date, there has
        not
        been any material adverse change in the operations, business, financial affairs
        or prospects of the Facilities or the condition of the Assets and no event
        has
        occurred that is likely to result in such a material adverse
        change.

      

      4.23    Full
        Disclosure.
        This
        Agreement and all other documents and information furnished to Buyer by Seller
        do not, and will not, include any untrue statement of a material fact or
        omit to
        state any material fact necessary to make the statements made, and to be
        made,
        not misleading.

       

      
        
           

        

        
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      4.24    Medicare/Medicaid
        Participation.
        The
        Facilities are fully licensed by the State of Kansas and are in good standing
        as
        health care providers under the Medicare program as administered by the federal
        government. The Facilities have no Medicaid patients and have never participated
        in a Medicaid program. Each Facility is qualified for participation in the
        Medicare program, is in compliance in all material respects with the conditions
        of participation or coverage in such program, and has received all material
        certifications, approvals or qualifications necessary for participation therein.
        Seller has heretofore provided to Buyer true, correct and complete copies
        of all
        provider agreements relating to the Medicare or any other federal or state
        healthcare program. Each Seller’s billing practices during the last five (5)
        years to all third party payors, including the Medicare program and private
        or
        commercial insurance companies, have been in compliance in all material respects
        with all laws, regulations and policies applicable to such third party payors
        and the Medicare program, including all Healthcare Laws. Neither Seller has
        billed or received during the last five (5) years any payment or reimbursement
        in excess of amounts allowed by Law, including Healthcare Laws. Neither Seller
        has received within the last five (5) years written notice from the Medicare
        program, or any other third party payor program, of any pending or threatened
        investigations or surveys, and no such investigations or surveys are pending,
        threatened or imminent.

      

      ARTICLE
        V.

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS BY BUYER

      

      Buyer
        hereby represents and warrants to Seller, and covenants, as
        follows:

      

      5.1    Organization
        and Good Standing.
        Buyer
        is a limited liability company duly organized, validly existing and in good
        standing under the laws of the State of Tennessee.

      

      5.2    Authorization.
        Buyer
        has full power and authority to enter into this Agreement, perform its
        obligations hereunder and carry out the Transactions. Buyer has taken all
        action
        required by law, its articles of organization or operating agreement and
        otherwise to authorize the execution and delivery by Buyer hereof and the
        consummation by Buyer of the Transactions. This Agreement constitutes the
        legal,
        valid and binding agreement and obligation of Buyer, enforceable against
        Buyer
        in accordance with its terms. 

      

      5.3    No
        Violation.
        The
        execution and delivery hereof by Buyer does not, and the consummation of
        the
        Transactions will not, (i) violate any provision of the articles of organization
        or operating agreement of Buyer; (ii) subject to obtainment of Buyer’s Approvals
        (as hereinafter defined), violate any order, arbitration award, judgment,
        writ,
        injunction, decree, statute, rule or regulation relating to Buyer; or (iii)
        subject to obtainment of Buyer’s Approvals, violate any contractual obligation
        relating to Buyer or its properties.

       

      
        
           

        

        
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      5.4    Professional
        Fees.
        Buyer
        has not done anything to cause Seller to be liable for, or to allow the Assets
        to be subject to, any liability or obligation for investment banking, brokerage,
        finders, agents or other fees, commissions, expenses or charges (including
        Buyer’s attorneys’ fees) in connection with the negotiation, preparation,
        execution or performance hereof or the consummation of the Transactions.
        Buyer
        shall defend and indemnify Seller, and save Seller harmless from, any damages
        or
        expenses incurred by Seller on account of the foregoing liabilities or
        obligations and such agreement shall survive the Closing or the earlier
        termination of this Agreement.

      

      5.5    Consents
        and Approvals.
        Buyer
        has obtained (or will obtain prior to the Closing) all consents, approvals,
        licenses, authorizations or orders of third parties, including governmental
        authorities, necessary for the authorization, execution and performance hereof
        by Buyer, or necessary to permit Buyer to continue to operate the Facilities
        following Closing in the manner that it is currently being operated
        (collectively, “Buyer’s Approvals”). Buyer shall initiate such action as is
        necessary to obtain all of Buyer’s Approvals, and shall pursue the same with
        reasonable diligence.

      

      5.6    Litigation.
        There
        are no suits, actions or proceedings against Buyer that would affect Buyer’s
        ability to perform its obligations hereunder.

      

      5.7    Access
        to Records.
        Following the Closing, Buyer shall provide Seller with reasonable access
        to the
        Records for Seller’s use in preparing any tax returns or otherwise in connection
        with tax matters or for any other proper business purpose relating to Seller’s
        prior ownership of the Facilities.

      

      5.8    Further
        Assurances.
        At any
        time and from time to time after the Closing, at Seller’s request and without
        further consideration, Buyer will execute and deliver such instruments, and
        take
        such other actions as Seller may reasonably deem necessary and advisable
        in
        order to confirm more effectively Buyer’s assumption of the Assumed
        Liabilities.

      

      5.9    Taxes.
        At
        Closing, Buyer shall pay all personal property sales and use taxes that may
        be
        due to any jurisdiction or governmental authority as a result of the
        Transactions. 

      

      5.10    Accounts
        Receivable.
        For a
        period of one hundred twenty (120) days after Closing, Buyer shall use its
        ordinary and customary efforts to provide billing services on behalf of Seller
        with respect to Seller’s accounts receivable for a fee equal to two percent (2%)
        of receivables collected. Buyer’s billing services provided in this Section
        5.10
        shall be
        based exclusively on the information provided in Seller’s books and records and
        shall not in any way constitute a guarantee of collection. In the event that
        Buyer (or any of its assignees) receives payment of any receivables relating
        to
        the Facilities, Buyer shall remit such payment to Seller within five (5)
        business days of Buyer’s receipt thereof.

       

      
        
           

        

        
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      ARTICLE
        VI.

      COVENANTS
        AND AGREEMENTS OF SELLER

      

      Between
        the date hereof and the Closing Date, Seller shall fulfill the following
        covenants and agreements unless otherwise specifically consented to by Buyer
        in
        writing:

      

      6.1    Conduct
        of Business Pending the Closing.

      

      (a)    Seller
        will take such action as may reasonably be necessary to maintain, preserve,
        renew and keep in full force and effect the existence, rights and franchises
        of
        Seller necessary in connection with the Facilities, and to continue to operate
        the Facilities in the ordinary course of business. 

      

      (b)    Seller
        will not do or omit to do any act, or knowingly permit any act or omission
        to
        act, which may cause a breach of Seller’s obligations in any material respect of
        any contract, commitment or obligation of Seller with respect to the Facilities,
        or any breach in any material respect of any representation, warranty, covenant
        or agreement made by Seller herein.

      

      (c)    Seller
        will duly comply in all material respects with all Laws applicable to the
        business and operations of the Facilities and all Laws governing or relating
        to
        the valid consummation of the Transactions.

      

      (d)    Seller
        will not (i) grant any increase in the wages or salary of any Employee except
        normal wage or salary increases for Employees in the ordinary course of business
        and consistent with past practice; (ii) by means of any bonus or pursuant
        to any
        plan or arrangement or otherwise, except in the ordinary course of business
        and
        consistent with past practice, increase by any amount or to any extent the
        benefits or compensation of any Employee; (iii) enter into any employment
        agreement, sales agency or other contract or arrangement with respect to
        the
        performance of personal services that affects the Facilities except in the
        ordinary course of business; (iv) enter into or extend any labor contract
        with
        any hourly-paid employees or any union; or (v) agree to take any such
        action.

      

      (e)    Seller
        will not terminate or modify any Assigned Contract except in the ordinary
        course
        of business.

      

      (f)    Seller
        will not enter into any Residency Agreement except in accordance with the
        form
        of Residency Agreement approved by Buyer and in accordance with the fee schedule
        attached hereto as Schedule
        6.1(f).

      

      (g)    Seller
        will not enter into any transaction outside the ordinary course of business
        in
        connection with the Assets.

      

      (h)    Seller
        will use commercially reasonable efforts not in any way materially to impair
        the
        value of the Assets or the business conducted at the Facilities.

      

      (i)    Seller
        will not enter into any agreement to do any of the foregoing.

       

      
        
           

        

        
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      6.2    Access;
        Further Assurances.

      

      (a)    After
        the
        execution hereof and continuing until the Closing or the earlier termination
        of
        this Agreement, Seller shall permit Buyer and its counsel, accountants,
        engineers and other representatives full access during normal business hours
        to
        all of the Employees and the Assets (including, without limitation, the right
        to
        conduct any physical count of inventory or otherwise be present at or
        participate in any such occurrence at any time prior to the Closing), and
        will
        furnish Buyer and its representatives during such period all such information
        concerning the Assets and such copies of such documents relating thereto
        as
        Buyer or its representatives may reasonably request.

      

      (b)    At
        any
        time and from time to time after the Closing, at Buyer’s request and without
        further consideration, Seller will execute and deliver such other instruments
        of
        sale, transfer, conveyance, assignment, delivery or confirmation, and take
        such
        action, including the provision of reasonable transition services, as Buyer
        may
        reasonably deem necessary or desirable in order more effectively to transfer,
        convey and assign to Buyer, to place Buyer in possession and control of,
        and to
        confirm Buyer’s good title to, the Assets, and to assist Buyer in exercising all
        rights and enjoying all benefits with respect thereto.

      

      6.3    Schedules.
        Seller
        shall have the continuing obligation to supplement or amend promptly the
        Schedules hereof with respect to any matter hereafter arising or discovered
        that, if existing or known at the date hereof, would have been required to
        be
        set forth or described in the Schedules hereof.

      

      6.4    Consents
        and Approvals.
        Seller
        shall initiate such action as is necessary to obtain all of Seller’s Approvals,
        and shall pursue the same with reasonable diligence.

      

      6.5    Survey
        and Title Insurance.
        Seller,
        at its expense, shall furnish to Buyer (i) a title insurance commitment covering
        the Land in the amount of the Purchase Price (the “Title Commitment”) from First
        American Title Insurance Company (in such capacity, the “Title Company”),
        together with legible copies of all documents constituting exceptions to
        Seller’s title as reflected in the Title Commitment; and (ii) as-built plans and
        current survey of the Land (the “Survey”). The form of the Title Commitment and
        the title policy(ies) to be issued pursuant thereto shall be the most recent
        ALTA Form and shall be reasonably acceptable to Buyer in all respects. The
        Survey shall be in a form that is reasonably acceptable to Buyer and shall
        be
        certified to Buyer and the Title Company. Buyer shall have until ten (10)
        days
        from the date on which Buyer receives the Title Commitment (including copies
        of
        the documents referred to therein) and the Survey, within which to object
        in
        writing to any exceptions or defects shown on the Title Commitment or the
        Survey. Any items which Buyer does not object to within such ten (10) day
        period
        shall be deemed to be Permitted Exceptions. If Buyer gives Seller notice
        of
        objection to any such title or survey exceptions or defects, Seller shall
        attempt to cure such objection by eliminating it or having it modified to
        the
        reasonable satisfaction of Buyer. Seller shall be entitled to extend the
        Closing
        for a period of up to thirty (30) days in order to cure any such objection.
        If
        any such objection is not so cured or satisfied by Seller subject to such
        extension, Buyer shall have the right to terminate this Agreement, in which
        case
        the entire Earnest Money shall be returned to Buyer (notwithstanding anything
        herein that may be to the contrary) and neither party shall have any further
        rights, obligations or duties hereunder, except for such rights, obligations
        or
        duties that by their terms expressly survive such termination. If Seller
        does so
        cure or satisfy any such objection subject to such extension, then this
        Agreement shall continue in effect. Buyer shall have the right by written
        notice
        delivered to Seller at any time to waive any title objections that it may
        have
        made and thereby to preserve this Agreement in effect.

       

      
        
           

        

        
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      6.6    Taxes.
        Except
        as set forth in Section
        5.9
        hereof,
        Seller will be responsible for, and hereby agrees to assume and pay, all
        transfer, documentary, stamp, sales, use and similar taxes, levies, impositions
        or assessments that may be due to any jurisdiction or governmental body as
        the
        result of the sale and transfer of the Assets.

      

      6.7    Additional
        Financial Information.
        Within
        fifteen (15) days following the end of each calendar month prior to the Closing
        Date, Seller will deliver to Buyer true and complete copies of the unaudited
        balance sheets and the related unaudited statements of income of, or relating
        to, the Assets and the Facilities for each month then ended, together with
        the
        notes, if any, related thereto, which presentation shall be true, correct
        and
        complete, shall have been prepared from and in accordance with the books
        and
        records of the Assets and the Facilities and which shall fairly present the
        financial position and results of operations of the Assets and the Facilities
        as
        of the date and for the period indicated.

      

      6.8    Closing
        Conditions.
        Between
        the date of this Agreement and the Closing Date, Seller will use its best
        efforts to cause the conditions specified in Articles
        7
        and
8
        hereof
        over which either Seller or any affiliate of Seller has control to be satisfied
        as soon as reasonably practicable, but in all events before the Closing
        Date.

      

      6.9    Interim
        Operating Reporting.
        During
        the period from the date of this Agreement to the Closing, Seller shall cause
        its officers to confer on a frequent and regular basis with one or more
        representatives of Buyer to report operational matters in respect of the
        Assets
        and the Facilities and to report the general status of on-going operations.
        Seller shall notify Buyer in writing of any adverse change in the financial
        position or earnings of the Assets or the Facilities after the date hereof
        and
        prior to the Closing and any unexpected emergency or other unanticipated
        change
        in the Facilities and of any governmental complaints, investigations or
        adjudicatory proceedings (or communications indicating that the same may
        be
        contemplated) or of any other such matter and shall keep Buyer fully informed
        of
        such events and permit its representatives to participate in all discussions
        relating thereto.

      

      6.10    Tail
        Insurance.
        Seller
        will obtain “tail” insurance, in form and substance acceptable to the Buyer, to
        insure against professional liabilities of the Facilities relating to all
        periods prior to the Closing to convert such prior liability insurance into
        occurrence coverage, the cost thereof to be paid for by the Seller. The minimum
        coverage under such “tail” insurance shall be $1,000,000.00 per occurrence and
        $2,000,000.00 in the aggregate.

       

      
        
           

        

        
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      6.11    Exclusive
        Negotiations.
        Prior
        to the Closing and so long as this Agreement is in effect, neither Seller
        nor
        any of its affiliates or agents will solicit offers from, or negotiate with,
        any
        other party for the purpose of selling, or entering into a joint venture
        or
        similar arrangement relating to, the Facilities or the Assets (or any ownership
        interest in any entity owning any of the Facilities or the Assets). During
        this
        period, Seller will not engage in any transaction not in the ordinary course
        of
        business without prior notice to Buyer, and will report to Buyer all material
        adverse changes in the Facilities and all material developments not in the
        ordinary course of Seller’s business.

      

      6.12    No
        Public Statement.
        Whether
        before or after Closing, neither Seller nor any of its affiliates will issue
        any
        press release or other public statement relating to this Agreement or the
        Transactions, without first obtaining the prior written approval of
        Buyer.

      

      6.13    Non-Compete
        Agreement.
        Neither
        Seller nor any of its affiliates shall, directly or indirectly, engage or
        invest
        in, own, manage, operate, finance, control or participate in the ownership,
        management, operation, financing or control of, be employed by, associated
        with
        or in any manner connected with, lend Seller’s or any of its affiliates’ name or
        any similar name to, lend Seller’s or any of its affiliates’ credit to or render
        services or advice to, any business whose products, services or activities
        compete in whole or in part with the products, services or activities of
        the
        Facilities, within a twenty (20) mile radius of any of the Facilities and
        for a
        period of three (3) years from the date of Closing. Notwithstanding the
        foregoing, the restrictions contained in this Section
        6.13
        shall
        not apply to Seller’s or any of its affiliates’ development of three (3)
        properties to be located in Independence, Missouri, St. Louis, Missouri and
        Kansas City, Missouri, respectively. Buyer and Seller shall negotiate in
        good
        faith a non-competition agreement (“Non-Compete Agreement”) that will
        incorporate the terms of this Section
        6.13
        to be
        delivered at Closing.

      

      6.14    Additional
        Design Information.
        Prior
        to the expiration of the Inspection Period (as hereinafter defined), Seller
        shall deliver to Buyer evidence acceptable to Buyer of any and all waivers
        that
        Seller received in the design and construction of the Facilities.

      

      ARTICLE
        VII.

      CONDITIONS
        TO BUYER’S OBLIGATIONS

      

      All
        obligations of Buyer hereunder are subject to the fulfillment, prior to the
        Closing, of each of the following conditions:

      

      7.1    Representations
        and Warranties; No Material Adverse Change.
        The
        representations and warranties made by Seller herein and the statements
        contained in the Schedules hereof or in any instrument, list, certificate
        or
        writing delivered by Seller pursuant hereto shall be true in all material
        respects when made and at and as of the time of the Closing as though such
        representations and warranties were made at and as of the Closing. During
        the
        period from January 31, 2006 (i.e., the date of the latest of Seller’s financial
        statements delivered to Buyer) to the Closing Date, there shall not have
        been
        any material adverse change in the physical condition, financial condition,
        results of operations, business or prospects of the Facilities.

       

      
        
           

        

        
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      7.2    Performance
        by Seller.
        Seller
        shall have performed and complied with, in all material respects, all covenants,
        agreements, deliveries, obligations and conditions required hereby to be
        so
        complied with or performed.

      

      7.3    Certificate
        of Seller.
        Seller
        shall have delivered to Buyer a certificate, dated the Closing Date, certifying
        as to the fulfillment of the conditions specified in Sections
        7.1
        and
7.2
        hereof.

      

      7.4    Opinions
        of Seller’s Counsel.
        Buyer
        shall have received an opinion or opinions of Seller’s Counsel, dated the
        Closing Date, in form and substance reasonably satisfactory to Buyer and
        Buyer’s
        Counsel, substantially to the effect that:

      

      (a)    Each
        of
        Sellers is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Kansas, and has full power and authority to
        enter
        hereunto and to carry out the Transactions.

      

      (b)    This
        Agreement and all deeds, bills of sale and other agreements entered into
        in
        connection herewith have been duly executed and delivered by Seller, and
        are the
        valid, binding and enforceable obligations of Seller and any
        successor-in-interest to Seller subject to commercially reasonable
        qualifications that are reasonably acceptable to Buyer’s Counsel. 

      

      Such
        opinion shall also cover such other matters that are incident to the
        Transactions as Buyer or Buyer’s Counsel may reasonably request.

      

      7.5    Seller’s
        Consents and Approvals.
        Buyer
        shall have received proof reasonably acceptable to it that Seller has obtained
        all of Seller’s Approvals. 

      

      7.6    Litigation.
        On the
        date of the Closing, Seller shall not be a party to, nor will there otherwise
        be
        pending or threatened, any judicial, administrative or other action, proceeding
        or investigation that, if adversely determined, might, in the reasonable
        opinion
        of Buyer, have a material adverse effect upon the Assets or the Transactions;
        and there shall be no lawsuits pending against Seller or Buyer seeking to
        enjoin, prohibit, restrain or otherwise prevent the Transactions.

      

      7.7    Title
        Insurance.
        At the
        Closing, Seller at its expense shall furnish to Buyer an Owner’s Policy of Title
        Insurance issued by the Title Company pursuant to the Title Commitment or
        a
“mark-up” of the Title Commitment, insuring good, marketable and indefeasible
        fee simple title to the Land in Buyer in the amount of the Purchase Price,
        subject only to the Permitted Exceptions (which shall not include any of
        the
        standard printed exceptions other than the exceptions for (i) real property
        taxes for the year of Closing not yet due and payable; and (ii) rights of
        tenants in possession pursuant to the Residency Agreements described on
Schedule
        1.1(c)).

       

      
        
           

        

        
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      7.8    Buyer’s
        Consents and Approvals.
        Buyer
        shall have obtained any and all Buyer’s Approvals necessary to permit it to
        continue to operate the Assets as they are now being operated.

      

      7.9    Environmental
        Audit.
        Buyer
        at its expense shall have obtained environmental inspections, audits or reports
        with respect to the Land (collectively the “Environmental Audit”). The
        Environmental Audit must be acceptable to Buyer, in its sole discretion,
        in all
        respects. Without limiting the generality of the foregoing, the Environmental
        Audit must show that (i) no chemical, substance or material, that is regulated
        by any federal, state, regional or local authority or that is known to pose
        a
        hazard to health or safety, has been released, as that term is defined in
§101
        of CERCLA, 42 U.S.C. §9601(22), upon the Land; and (ii) none of the improvements
        on the Land contain asbestos or PCBs. Within ten (10) days of the date hereof,
        Seller agrees to furnish copies of any existing reports that Seller may have
        in
        its possession.

      

      7.10    Engineering
        Report.
        Buyer
        at its expense shall have obtained a report of an engineer acceptable to
        Buyer
        (the “Engineering Report) providing that the buildings, structures and
        improvements located on the Land (and all of the mechanical and operating
        systems incorporated in the Fixed Assets) are (i) structurally fit and sound;
        (ii) fit for their intended purpose; (iii) in good repair, condition and
        working
        order, normal wear and tear accepted; and (iv) in compliance in all material
        respects with all applicable building and zoning Laws, all applicable safety,
        fire and health Laws and all other Laws relating to the use and occupancy
        of the
        improvements on the Land for their intended purpose. Within ten (10) days
        of the
        date hereof, Seller agrees to furnish copies of any existing reports that
        Seller
        may have in its possession. 

      

      7.11    Inspection
        Period; Termination of Certain Conditions.
        During
        the period commencing on the date hereof and ending on March 29, 2006 (the
        “Inspection Period”), Buyer shall conduct its investigation of the Facilities,
        the Assets and the operation and financial affairs of the Facilities. On
        or
        before the expiration of the Inspection Period, Buyer, in its sole and absolute
        discretion, for any reason whatsoever, by notice to Seller on or before
        expiration of the Inspection Period, shall have the right, at its option,
        to
        terminate this Agreement on or before such date. If Buyer fails to give such
        notice prior to the expiration of the Inspection Period, then this Agreement
        shall remain in full force and effect. If Buyer gives such notice prior to
        the
        expiration of the Inspection Period, then this Agreement shall be terminated,
        whereupon Escrow Agent shall deliver the Earnest Money to Buyer.

      

      7.12    Development
        Agreement.
        Seller
        shall have executed a development agreement, mutually acceptable to Seller
        and
        Buyer, in a usual and customary form that will include the basic terms set
        forth
        on Exhibit
        E
        attached
        hereto (the “Development Agreement”).

      

      7.13    Option
        Agreements.
        Seller
        shall have executed option agreements, in a form and on such terms as are
        mutually acceptable to Seller and Buyer, pursuant to which Seller shall grant
        Buyer an option to purchase the Excluded Land (the “Option
        Agreement”).

       

      
        
           

        

        
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ARTICLE
        VIII.

      CONDITIONS
        TO SELLER’S OBLIGATIONS

      

      All
        obligations of Seller hereunder are subject to the fulfillment, prior to
        or at
        the Closing, of each of the following conditions:

      

      8.1    Representations
        and Warranties.
        The
        representations and warranties made by Buyer herein or in any instrument,
        list,
        certificate or writing delivered by Buyer pursuant hereto shall be true in
        all
        material respects when made and at and as of the time of the Closing as though
        such representations and warranties were made at and as of the
        Closing.

      

      8.2    Performance
        by Buyer.
        Buyer
        shall have performed and complied with, in all material respects, all covenants,
        agreements, obligations, deliveries and conditions required hereby to be
        so
        complied with or performed.

      

      8.3    Certificate
        of Buyer.
        Buyer
        shall have delivered to Seller a certificate, dated the Closing Date, certifying
        as to the fulfillment of the conditions specified in Sections
        8.1
        and
8.2
        hereof.

      

      8.4    Development
        Agreement.
        Buyer
        shall have executed a development agreement, mutually acceptable to Seller
        and
        Buyer, in a usual and customary form that will include the basic terms set
        forth
        on Exhibit
        E
        attached
        hereto (the “Development Agreement”).

      

      8.5    Option
        Agreements.
        Buyer
        shall have executed option agreements, in a form and on such terms as are
        mutually acceptable to Seller and Buyer, pursuant to which Seller shall grant
        Buyer an option to purchase the Excluded Land (the “Option
        Agreement”).

      

      ARTICLE
        IX.

      RISK
        OF LOSS; CASUALTY

      

      Seller
        shall bear any risk of loss to the Assets prior to the Closing. In the event
        of
        a fire or other casualty prior to the Closing that shall cause damage to
        the
        Assets or any part thereof in excess of One Hundred Fifty Thousand and No/100
        Dollars ($150,000) in the aggregate, and Seller elects not to repair such
        damage, Buyer shall have the option of terminating this Agreement, in which
        event neither party shall have any further rights, obligations or duties
        hereunder, except for such rights, obligations or duties that by their terms
        expressly survive such termination. Seller shall give Buyer immediate written
        notice of the occurrence of such damage together with either (i) Seller’s
        commitment to repair such damage subject to reasonable extension of the Closing;
        or (ii) Seller’s statement that Seller has elected not to undertake such repair.
        If Seller elects not to repair such damage, Buyer shall have a period of
        fifteen
        (15) days following receipt of the foregoing notice to elect to terminate
        this
        Agreement or accept an assignment of insurance proceeds and proceed with
        the
        Closing. In the event that the damage is valued at One Hundred Fifty Thousand
        and No/100 Dollars ($150,000) or less in the aggregate, Buyer shall proceed
        with
        the Closing and shall be entitled to the proceeds of all insurance resulting
        from such damage.

       

      
        
           

        

        
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      ARTICLE
        X.

      CONDEMNATION

      

      If
        all or
        any part of the Assets shall be condemned or otherwise taken through the
        power
        of eminent domain, or any proceedings therefor commenced, prior to the Closing,
        Buyer may elect:

      

      (a)    In
        the
        case of condemnation resulting in damage in excess of One Hundred Fifty Thousand
        and No/100 Dollars ($150,000) in the aggregate, to terminate and completely
        void
        this Agreement, which shall relieve both Buyer and Seller of all duties and/or
        obligations hereunder, except for such rights, obligations or duties that
        by
        their terms expressly survive such termination; or

      

      (b)    In
        all
        condemnation cases, to purchase the Assets under the terms hereof and require
        Seller to assign to Buyer all of Seller’s interest in and to any condemnation
        award.

      

      Buyer’s
        election under this Article
        X
        shall be
        in writing to Seller and shall be made at any time within fifteen (15) days
        of
        delivery of Seller’s written notice to Buyer of any such taking or the
        commencement of any such action.

      

      ARTICLE
        XI.

      INDEMNIFICATION

      

      11.1    Indemnification
        by Seller.
        Seller
        shall defend, indemnify and hold harmless Buyer, each of Buyer’s shareholders,
        partners, affiliates, officers, directors, employees, agents, successors
        and
        assigns (collectively, “Buyer’s Indemnified Persons”) and shall reimburse
        Buyer’s Indemnified Persons for, from and against each claim, loss, liability,
        damage and reasonable costs and expenses (including, without limitation,
        settlement costs, interest, penalties, reasonable costs of preparation and
        investigation, and the reasonable fees, disbursements and expenses of attorneys,
        accountants and other professional advisors) (collectively, “Losses”), directly
        or indirectly relating to, resulting from or arising out of:

      

      (a)    Any
        untrue representation, misrepresentation, breach of warranty or nonfulfillment
        of any covenant, agreement or other obligation by or of Seller contained
        herein,
        in any Schedule hereof or in any certificate, document or instrument delivered
        to Buyer pursuant hereto;

      

      (b)    Any
        cost,
        obligation, expense or liability, incurred by Buyer in connection with or
        resulting directly or indirectly from the presence of any Hazardous Material
        in
        the soil, surface water or ground water of, or originating from, the Land
        that
        exists on the Closing Date; 

      

      (c)    Any
        cost,
        obligation, expense or liability (except for Assumed Liabilities) resulting
        from, arising out of, or relating to the ownership or operation of the
        Facilities prior to the Closing Date;

       

      
        
           

        

        
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      (d)    Any
        obligation or liability of Seller, whether arising before or after the Closing,
        except for the Assumed Liabilities, and any and all loss, liability or damage
        suffered or incurred by Buyer by reason of the failure by Seller to comply
        with
        applicable bulk sales Laws;

      

      (e)    Any
        attempt (whether or not successful) by any person to cause or require any
        of
        Buyer’s Indemnified Persons to pay or discharge any debt, obligation, liability,
        or commitment, the existence of which would entitle such Buyer’s Indemnified
        Persons to indemnification pursuant to the foregoing clauses of this
Section
        11.1
        or would
        constitute a breach of any representation, warranty or agreement under this
        Agreement of Seller; and

      

      (f)    Any
        other
        Loss incidental to any of the foregoing.

      

      11.2    Indemnification
        by Buyer.
        Effective after the Closing, Buyer shall defend, indemnify and hold harmless
        Seller and each of Seller’s shareholders, partners, affiliates, officers,
        directors, employees, agents, successors and assigns (collectively, “Seller’s
        Indemnified Persons”) and shall reimburse Seller’s Indemnified Persons for, from
        and against Losses directly or indirectly relating to, resulting from or
        arising
        out of:

      

      (a)    Any
        materially untrue representation, material misrepresentation, breach in any
        material respect of warranty or nonfulfillment in any material respect of
        any
        covenant, agreement or other obligation by or of Buyer contained herein or
        in
        any certificate, document or instrument delivered to Seller pursuant
        hereto;

      

      (b)    Any
        cost,
        expense or liability resulting from or relating solely to the operation of
        the
        Facilities after the Closing;

      

      (c)    Any
        cost,
        expense or liability from Buyer’s failure to discharge the Assumed Liabilities
        as the same became due; and

      

      (d)    Any
        other
        Loss incidental to the foregoing.

      

      11.3    Procedure.
        The
        indemnified party shall promptly notify the indemnifying party or parties
        in
        writing of any claim, demand, action or proceeding for which indemnification
        will be sought under Section
        11.1
        or
11.2
        hereof,
        and, if such claim, demand, action or proceeding is a third-party claim,
        demand,
        action or proceeding, the indemnifying party will have the right at its expense
        to assume the defense thereof using counsel reasonably acceptable to the
        indemnified party. The indemnified party shall have the right to participate,
        at
        its own expense, with respect to any such third-party claim, demand, action
        or
        proceeding. In connection with any such third-party claim, demand, action
        or
        proceeding, Buyer and Seller shall cooperate with each other and provide
        each
        other access to relevant books and records in their possession. No such
        third-party claim, demand, action or proceeding shall be settled without
        the
        prior written consent of the indemnified party. If a firm written offer is
        made
        to settle any such third-party claim, demand, action or proceeding, the
        indemnifying party proposes to accept such settlement and the indemnified
        party
        refuses to consent to such settlement, then: (i) the indemnifying party or
        parties shall be excused from, and the indemnified party shall be solely
        responsible for, all further defense of such third-party claim, demand, action
        or proceeding; and (ii) the maximum liability of the indemnifying party or
        parties relating to such third-party claim, demand, action or proceeding
        shall
        be the amount of the proposed settlement if the amount thereafter recovered
        from
        the indemnified party(ies) on such third-party claim, demand, action or
        proceeding is greater than the amount of the proposed settlement.

       

      
        
           

        

        
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      11.4    Limitations
        on Indemnification.
        Notwithstanding the foregoing provisions of Section
        11.1,
        except
        in the event of fraud, intentional misrepresentation or intentional wrongdoing
        by Seller, (i) Seller shall not be liable, pursuant to Section
        11.1(a)
        for any
        Losses suffered by any Buyer’s Indemnified Persons until the aggregate of all
        Losses claimed by Buyer’s Indemnified Persons thereunder exceeds, on a
        cumulative basis, an amount equal to $25,000.00, and then only to the extent
        of
        any such excess; and (ii) the aggregate liability of Seller pursuant to
Section
        11.1(a)
        for
        Losses suffered by Buyer’s Indemnified Persons shall in no event exceed
        $5,000,000.00. Any indemnification claim made pursuant to Section
        11.1(a)
        or
Section
        11.2(a)
        shall be
        forever barred unless the applicable Buyer’s Indemnified Persons or the Seller’s
        Indemnified Persons, respectively, delivers a written notice of any claim,
        demand, action or proceeding to Seller or Buyer, respectively, in accordance
        with the procedures set forth in Section
        11.3
        prior to
        the date which is eighteen (18) months from the Closing Date. The time limits
        set forth in this Section
        11.4
        shall
        not apply to any claims based on fraud, intentional misrepresentation or
        intentional wrongdoing, which claims may be made any time prior to the
        expiration of the applicable statute of limitations governing those
        claims.

      

      The
        provisions of this Article
        XI
        shall
        survive the Closing and the execution of all closing documents.

      

      ARTICLE
        XII.

      SURVIVAL
        OF REPRESENTATIONS

      

      12.1    Survival
        of Representations.
        The
        representations, warranties and covenants by the parties contained herein
        shall
        survive the Closing until the date which is eighteen (18) months from the
        Closing Date and any investigation at any time made by or on behalf of any
        party
        hereto.

      

      12.2    Statements
        as Representations.
        All
        statements contained in any certificate, Schedule, list, document or other
        writing delivered pursuant hereto or in connection with the Transactions
        shall
        be deemed representations and warranties for all purposes hereof.
        Notwithstanding anything herein to the contrary, any disclosures in the
        Schedules shall be deemed adequate to disclose an exception to a representation
        or warranty made in this Agreement to the extent that such representation
        or
        warranty is specifically identified in such Schedule.

      

      12.3    Remedies
        Cumulative.
        Except
        as specifically set forth in Article
        XIII
        hereof,
        the remedies provided herein shall be cumulative, and shall not preclude
        the
        assertion by any party hereto of any other rights or the seeking of any other
        remedies against any other party hereto.

       

      
        
           

        

        
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      ARTICLE
        XIII.

      TERMINATION
        OF AGREEMENT PRIOR TO CLOSING

      

      Without
        limiting the provisions of Article
        XIII
        hereof,
        this Agreement may be terminated at any time prior to the Closing:

      

      (a)    By
        mutual
        agreement of Seller and Buyer.

      

      (b)    By
        Buyer,
        if Seller has defaulted hereunder or if a condemnation or casualty has occurred
        that authorizes Buyer to terminate this Agreement pursuant to Article
        IX
        or
X
        hereof,
        or if any of the conditions set forth in Article
        VII
        hereof
        have not been fulfilled prior to the Closing or pursuant to the provisions
        of
Section
        6.5
        hereof.
        In the event that Buyer terminates this Agreement in accordance with this
        Subsection (b), Buyer shall be entitled to an immediate refund of all of
        the
        Earnest Money (including any interest thereon).

      

      (c)    By
        Seller, if Buyer has defaulted hereunder or if any of the conditions set
        forth
        in Article
        VIII
        hereof
        have not been fulfilled prior to or at the Closing. Notwithstanding Section
        12.3
        hereof,
        in the event that Seller terminates this Agreement pursuant to this Subsection
        (c), Seller shall be entitled to receive the Earnest Money as agreed upon
        liquidated damages as Seller’s sole and exclusive remedy, and the parties shall
        be relieved from any further liability hereunder.

      

      In
        the
        event Buyer terminates this Agreement pursuant to Subsection (b) above, Buyer
        shall be entitled, in addition to the refund of Earnest Money as provided
        in
        said Subsection (b), and to either (i) compel Seller to convey the Assets
        by a
        suit for specific performance and to recover all costs incidental to such
        suit,
        including reasonable attorney’s fees, or (ii) pursue any other remedies
        available at law or equity.

      

      ARTICLE
        XIV.

      MISCELLANEOUS

      

      14.1    Schedules.
        The
        Schedules and all exhibits and documents referred to in or attached to this
        Agreement are integral parts of this Agreement as if fully set forth herein
        and
        all statements appearing therein shall be deemed to be representations. To
        the
        extent necessary, each Schedule hereto shall be updated by Seller and approved
        by Buyer prior to Closing.

      

      14.2    Real
        Estate Broker.
        Seller
        and Buyer acknowledge that (a) Burton Real Estate, located at 2122 Oaklawn
        Drive, Chillicothe, Missouri 64601 (“Real Estate Broker”) is assisting Seller as
        a transaction broker and is not acting as an agent for either party, (b)
        disclosure of this relationship has been previously made verbally to both
        parties, (c) both parties have received a Kansas Real Estate Commission Broker
        Disclosure Form, and (d) Real Estate Broker will be compensated by Seller,
        at
        Seller’s sole expense, pursuant to a separate Transaction Brokerage Agreement
        between Seller and Real Estate Broker.

       

      
        
           

        

        
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      14.3    Expenses.
        Except
        to the extent set forth in Article
        XI,
        all
        fees and expenses incurred by Seller, including, without limitation, legal
        fees
        and expenses, in connection herewith will be borne by Seller. Except to the
        extent set forth in Article
        XI,
        all
        fees and expenses incurred by Buyer, including, without limitation, legal
        fees
        and expenses, in connection herewith will be borne by Buyer.

      

      14.4    Assignability;
        Parties in Interest.

      

      (a)    Upon
        written notice to Seller, Buyer may assign all of its rights hereunder to
        any
        other person or entity without the necessity of obtaining Seller’s consent,
        provided that such assignee shall assume all of Buyer’s duties, obligations and
        undertakings hereunder. No such assignment shall release Buyer from any of
        its
        liabilities, undertakings and obligations hereunder that accrue prior to
        or at
        Closing. 

      

      (b)    Seller
        may not assign, transfer or otherwise dispose of any of its rights hereunder
        without the prior written consent of Buyer.

      

      (c)    All
        the
        terms and provisions hereof shall be binding upon, shall inure to the benefit
        of
        and shall be enforceable by the respective successors, successors-in-interest,
        assigns and legal representatives of the parties hereto.

      

      14.5    Entire
        Agreement; Amendments.
        This
        Agreement, including the exhibits, Schedules, lists and other documents and
        writings, referred to herein, or delivered pursuant hereto, which form a
        part
        hereof, contains the entire understanding of the parties with respect to
        its
        subject matter. There are no restrictions, agreements, promises, warranties,
        covenants or undertakings other than those expressly set forth herein. This
        Agreement supersedes all prior agreements and understandings between the
        parties
        with respect to its subject matter. This Agreement may be amended only by
        a
        written instrument duly executed by both parties. Any condition to a party’s
        obligations hereunder may be waived, but only by a written instrument signed
        by
        the party entitled to the benefits thereof. The failure or delay of either
        party
        at any time or times to require performance of any provision or to exercise
        its
        rights with respect to any provision hereof shall in no manner operate as
        a
        waiver of or affect such party’s right at a later time to enforce the
        same. 

      

      14.6    Headings.
        The
        section and paragraph headings contained herein are for reference purposes
        only
        and shall not affect in any way the meaning or interpretation
        hereof.

      

      14.7    Severability.
        The
        invalidity of any term hereof shall not affect any other term hereof, which
        shall remain in full force and effect.

      

      14.8    Notices.
        All
        notices, requests, claims, demands and other communications hereunder shall
        be
        in writing and shall be deemed to have been duly given if mailed (registered
        or
        certified mail, postage prepaid, return receipt requested) as
        follows:

       

      
        
           

        

        
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      If
        to
        Seller:

      

      Allen
        Park Two, Inc.

      Allen
        Park Three, Inc.

      10590
        South Glenview Lane

      Olathe,
        Kansas 66061

      Attn:
        Mark Parkinson

      

      If
        to
        Buyer:

      

      ARC
        Sweet
        Life Shawnee, LLC

      111
        Westwood Place, Suite 200

      Brentwood,
        Tennessee 37027

      Attn:
        Chief Executive Officer

      with
        a
        copy to:

      

      T.
        Andrew
        Smith, Esq.

      Bass,
        Berry & Sims PLC

      315
        Deaderick Street, Suite 2700

      Nashville,
        Tennessee 37238

      

      or
        to
        such other address as either party may have furnished to the other in writing
        in
        accordance herewith, except that notices of change of address shall only
        be
        effective upon receipt.

      

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

      

      14.10    Counterparts.
        This
        Agreement may be executed simultaneously in one or more counterparts, with
        the
        same effect as if the signatories executing the several counterparts had
        executed one counterpart, provided, however, that the several executed
        counterparts shall together have been signed by Buyer and Seller. All such
        executed counterparts shall together constitute one and the same
        instrument.

      

      14.11    Pre-Closing
        Negligent or Tortious Acts.
        Nothing
        in this Agreement shall be construed or interpreted to impose any responsibility
        or liability on Buyer to any third parties, whether as a successor to Seller
        or
        under any other legal or equitable principle, for any negligent or tortious
        acts
        or omissions of Seller, its lessees, managers, operators or employees, prior
        to
        the Closing Date. Seller shall retain all liability and responsibility under
        the
        terms of this Agreement to third parties for their negligent and tortious
        acts
        or omissions prior to the Closing Date.

      

      [Signature
        page to follow.]

       

      
        
           

        

        
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      IN
        WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
        duly
        authorized officers of Buyer and Seller on the date first above
        written.

       

      BUYER:

       

      ARC
        SWEET LIFE SHAWNEE, LLC

       

      By:_______________________________________

      Name:_____________________________________

      Title:______________________________________

       

       

      SELLERS:

       

      ALLEN
        PARK TWO, INC.

      By:_______________________________________

      Name:_____________________________________

      Title:______________________________________

       

       

      ALLEN
        PARK THREE, INC.

       

      By:_______________________________________

      Name:_____________________________________

      Title:______________________________________

       

       

      
        
           

        

        
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      Exhibit
        A

      

      Description
        of Land

      

      
        	 	
                ·

              	
                All
                  real property and the improvements located thereon, including without
                  limitation the senior residential facility currently known as “The Sweet
                  Life at Shawnee,” located at 11400 W. 65th
                  Street, Shawnee, Kansas 66203.

              

      

      
        	 	
                ·

              	
                All
                  real property and the improvements located thereon, including without
                  limitation the senior residential facility currently known as “The Sweet
                  Life at Rosehill,” located at 12802 Johnson Drive, Shawnee, Kansas
                  66216.

              

      

      

      [This
        Exhibit will be amended to include a legal description of the Land to conform
        to
        the title and survey to be obtained by Seller pursuant to Section 6.5
        above.]

       

      
        
           

        

        
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      Exhibit
        B

      

      Form
        of Special Warranty Deed

       

       

       

      
        
           

        

        
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      Exhibit
        C

       

      Form
        of Bills of Sale

       

       

      
        
           

        

        
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      Exhibit
        D

      

      Form
        of Closing Escrow Agreement

       

       

       

      
        
           

        

        
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      Exhibit
        E

       

      Terms
        of Development Agreement

      

      
        	 	
                ·

              	
                Buyer
                  will engage Seller as developers for three (3) senior living
                  communities—one (1) of which will be developed in Leawood, Kansas and two
                  (2) of which do not have specific locations
                  yet.

              

      

      
        	 	
                ·

              	
                In
                  consideration for its services, Seller shall be paid a development
                  fee
                  equal to five percent (5%) of the aggregate cost of land, building
                  and
                  FF&E for each project. In the event that a project is developed on
                  land already owned by Buyer or one of its affiliates, Buyer and
                  Seller
                  will agree on a reasonable value for the land for purposes of calculating
                  Seller’s development fee.

              

      

      
        	 	
                ·

              	
                For
                  each community that is not developed, Buyer will pay Seller
                  $300,000.

              

      

      
        	 	
                ·

              	
                Buyer
                  will have exclusivity for Seller’s services, except for Seller’s existing
                  agreement with a Texas group to develop up to three (3) communities
                  in
                  Missouri. Seller’s exclusivity under the Development Agreement will remain
                  in effect until such time as the three (3) communities are developed
                  and
                  thereafter for so long as Seller continues to develop projects
                  for Buyer
                  or its affiliates that have a value of at least $20
                  million.

              

      

       

      
 

      
        
           

        

        
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      Exhibit
        F

      

      Description
        of Excluded Land

      

      
        	 	
                ·

              	
                All
                  real property and improvements located thereon, consisting of
                  approximately four (4) acres and located immediately west of that
                  certain
                  facility known as “The Sweet Life at Rosehill,” which is located at 12802
                  Johnson Drive, Shawnee, Kansas 66216 and is owned by Allen Park
                  Three,
                  Inc.

              

      

      
        	 	
                ·

              	
                All
                  real property and improvements located thereon, consisting of
                  approximately two (2) acres and located immediately east of that
                  certain
                  facility known as “The Sweet Life at Shawnee,” which is located at 11400
                  W. 65th
                  Street, Shawnee, Kansas 66203 and is owned by Allen Park Two,
                  Inc.

              

      

      

      [This
        Exhibit will be amended to include an accurate legal description of the Excluded
        Land based on a property description in a current title or survey.]

       

      
        
           

        

        
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