Document:

Unassociated Document

     

    Exhibit
10.1

       

      PURCHASE
AND SALE AGREEMENT

       

      By
And Among

       

      GREENTREE
ACQUISITION, LLC,

      a
Delaware limited liability company

      as
“Buyer”

       

      and

       

      GREENTREE
AT WESTWOOD, LLC,

      an
Indiana limited liability company

      as
“Seller”

       

      Dated
as of

       

      December
30, 2009

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE OF
CONTENTS

       

      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      
	
                    ARTICLE
      I TERMINOLOGY

                  	
                    1

                  
	
                    1.1

                  	
                    Defined
      Terms

                  	
                    1

                  
	
                    1.2

                  	
                    Additional
      Defined Terms

                  	
                    3

                  
	 
      	 
      
	
                    ARTICLE
      II PURCHASE AND SALE

                  	
                    4

                  
	
                    2.1

                  	
                    Property

                  	
                    4

                  
	
                    2.2

                  	
                    Assumption
      of Liabilities.

                  	
                    6

                  
	
                    2.3

                  	
                    Purchase
      Price

                  	
                    6

                  
	
                    2.4

                  	
                    Adjustment
      of Purchase Price.

                  	
                    6

                  
	 
      	 
      
	
                    ARTICLE
      III DUE DILIGENCE PERIOD

                  	
                    8

                  
	
                    3.1

                  	
                    Due
      Diligence Period

                  	
                    8

                  
	
                    3.2

                  	
                    Buyer’s
      Responsibilities

                  	
                    8

                  
	
                    3.3

                  	
                    Continuing
      Diligence and Inspection Rights

                  	
                    8

                  
	 
      	 
      
	
                    ARTICLE
      IV REPRESENTATIONS AND WARRANTIES OF SELLER

                  	
                    9

                  
	
                    4.1

                  	
                    Organization;
      Good Standing of Seller

                  	
                    9

                  
	
                    4.2

                  	
                    Consent
      of Third Parties

                  	
                    9

                  
	
                    4.3

                  	
                    Authority;
      Enforceability

                  	
                    9

                  
	
                    4.4

                  	
                    Absence
      of Conflicts

                  	
                    9

                  
	
                    4.5

                  	
                    No
      Judgments

                  	
                    9

                  
	
                    4.6

                  	
                    No
      Governmental Approvals

                  	
                    9

                  
	
                    4.7

                  	
                    Insurance

                  	
                    10

                  
	
                    4.8

                  	
                    Litigation

                  	
                    10

                  
	
                    4.9

                  	
                    Compliance
      with Laws

                  	
                    10

                  
	
                    4.10

                  	
                    Environmental
      Matters

                  	
                    10

                  
	
                    4.11

                  	
                    Assessments

                  	
                    10

                  
	
                    4.12

                  	
                    Property
      Agreements

                  	
                    11

                  
	
                    4.13

                  	
                    Licenses

                  	
                    11

                  
	
                    4.14

                  	
                    Resident
      Agreements

                  	
                    11

                  
	
                    4.15

                  	
                    Medicare;
      Medicaid

                  	
                    11

                  
	
                    4.16

                  	
                    Condemnation

                  	
                    11

                  
	
                    4.17

                  	
                    Condition
      of Property

                  	
                    11

                  
	
                    4.18

                  	
                    Independent
      Property

                  	
                    12

                  
	
                    4.19

                  	
                    Utilities
      Access

                  	
                    12

                  
	
                    4.20

                  	
                    Zoning

                  	
                    12

                  
	
                    4.21

                  	
                    FIRPTA

                  	
                    12

                  
	
                    4.22

                  	
                    Interests;
      Title

                  	
                    13

                  
	
                    4.23

                  	
                    Title
      Encumbrances

                  	
                    13

                  
	
                    4.24

                  	
                    Affordable
      Housing Units

                  	
                    13

                  
	
                    4.25

                  	
                    No
      New Survey Matters

                  	
                    13

                  
	
                    4.26

                  	
                    Loans

                  	
                    13

                  
	
                    4.27

                  	
                    Patriot
      Act Compliance

                  	
                    13

                  

          

        

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      TABLE OF CONTENTS
(cont’d)

       

      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	
                    4.28

                  	
                    Broker’s
      or Finder’s Fees

                  	
                    14

                  
	
                    4.29

                  	
                    Insolvency

                  	
                    14

                  
	 
      	 
      	 
      
	
                    ARTICLE
      V REPRESENTATIONS AND WARRANTIES OF BUYER

                  	
                    14

                  
	
                    5.1

                  	
                    Organization
      and Good Standing

                  	
                    14

                  
	
                    5.2

                  	
                    Authorization
      and Binding Effect of Documents

                  	
                    14

                  
	
                    5.3

                  	
                    Absence
      of Conflicts

                  	
                    14

                  
	
                    5.4

                  	
                    Consents

                  	
                    15

                  
	
                    5.5

                  	
                    Patriot
      Act Compliance

                  	
                    15

                  
	
                    5.6

                  	
                    Broker’s
      or Finder’s Fees

                  	
                    15

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VI OTHER COVENANTS

                  	
                    15

                  
	
                    6.1

                  	
                    Conduct
      of Business Prior to the Closing

                  	
                    15

                  
	
                    6.2

                  	
                    Notification
      of Certain Matters

                  	
                    16

                  
	
                    6.3

                  	
                    Title;
      Additional Documents

                  	
                    16

                  
	
                    6.4

                  	
                    Other
      Consents

                  	
                    17

                  
	
                    6.5

                  	
                    Inspection
      and Access

                  	
                    17

                  
	
                    6.6

                  	
                    Confidentiality.

                  	
                    17

                  
	
                    6.7

                  	
                    Publicity

                  	
                    18

                  
	
                    6.8

                  	
                    Reasonable
      Best Efforts

                  	
                    18

                  
	
                    6.9

                  	
                    Reports

                  	
                    18

                  
	
                    6.10

                  	
                    Post-Closing
      Obligations of Seller

                  	
                    18

                  
	
                    6.11

                  	
                    No
      Other Representations or Warranties.

                  	
                    18

                  
	
                    6.12

                  	
                    Noncompetition

                  	
                    19

                  
	
                    6.13

                  	
                    Exclusivity

                  	
                    19

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VII CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO
    CLOSE

                  	
                    19

                  
	
                    7.1

                  	
                    Accuracy
      of Representations and Warranties; Closing Certificate.

                  	
                    19

                  
	
                    7.2

                  	
                    Performance
      of Agreement

                  	
                    20

                  
	
                    7.3

                  	
                    No
      Adverse Change

                  	
                    20

                  
	
                    7.4

                  	
                    Conveyance
      of Property

                  	
                    20

                  
	
                    7.5

                  	
                    Title
      Insurance and Survey.

                  	
                    20

                  
	
                    7.6

                  	
                    Other
      Inspections

                  	
                    22

                  
	
                    7.7

                  	
                    Delivery
      of Closing Documents

                  	
                    22

                  
	
                    7.8

                  	
                    Licenses.

                  	
                    22

                  
	
                    7.9

                  	
                    Termination
      of Existing Management Agreement.

                  	
                    23

                  
	
                    7.10

                  	
                    Management
      Agreement

                  	
                    23

                  
	
                    7.11

                  	
                    Governmental
      Approvals.

                  	
                    23

                  
	
                    7.12

                  	
                    Third-Party
      Consents

                  	
                    23

                  
	
                    7.13

                  	
                    Guaranty.

                  	
                    23

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VIII CONDITIONS PRECEDENT TO THE  OBLIGATION OF SELLER TO
      CLOSE

                  	
                    23

                  
	
                    8.1

                  	
                    Accuracy
      of Representations and Warranties.

                  	
                    23

                  

          

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      TABLE OF CONTENTS
(cont’d)

      

      
        
          
            
              
                	 
      	 
      	
                        Page

                      
	 	 	 
	
                        8.2

                      	
                        Performance
      of Agreements

                      	
                        24

                      
	
                        8.3

                      	
                        Delivery
      of Closing Documents.

                      	
                        24

                      
	 
      	 
      	 
      
	
                        ARTICLE
      IX CLOSING

                      	
                        24

                      
	
                        9.1

                      	
                        Closing
      Date and Place.

                      	
                        24

                      
	
                        9.2

                      	
                        Deliveries
      of Seller

                      	
                        24

                      
	
                        9.3

                      	
                        Deliveries
      of Buyer

                      	
                        26

                      
	
                        9.4

                      	
                        Closing
      Costs

                      	
                        26

                      
	 
      	 
      	 
      
	
                        ARTICLE
      X INDEMNIFICATION

                      	
                        26

                      
	
                        10.1

                      	
                        General

                      	
                        26

                      
	
                        10.2

                      	
                        Indemnification
      by Seller

                      	
                        27

                      
	
                        10.3

                      	
                        Indemnification
      by Buyer

                      	
                        27

                      
	
                        10.4

                      	
                        Administration
      of Indemnification

                      	
                        27

                      
	 
      	 
      	 
      
	
                        ARTICLE
      XI DEFAULT AND TERMINATION

                      	
                        29

                      
	
                        11.1

                      	
                        Right
      of Termination

                      	
                        29

                      
	
                        11.2

                      	
                        Remedies
      upon Default.

                      	
                        29

                      
	
                        11.3

                      	
                        Specific
      Performance

                      	
                        30

                      
	
                        11.4

                      	
                        Obligations
      Upon Termination

                      	
                        30

                      
	
                        11.5

                      	
                        Termination
      Notice

                      	
                        30

                      
	
                        11.6

                      	
                        Sole
      and Exclusive Remedy

                      	
                        30

                      
	 
      	 
      	 
      
	
                        ARTICLE
      XII MISCELLANEOUS

                      	
                        31

                      
	
                        12.1

                      	
                        Further
      Actions

                      	
                        31

                      
	
                        12.2

                      	
                        Notices

                      	
                        31

                      
	
                        12.3

                      	
                        Entire
      Agreement

                      	
                        32

                      
	
                        12.4

                      	
                        Binding
      Effect; Benefits

                      	
                        32

                      
	
                        12.5

                      	
                        Assignment

                      	
                        32

                      
	
                        12.6

                      	
                        Governing
      Law

                      	
                        32

                      
	
                        12.7

                      	
                        Amendments
      and Waivers

                      	
                        33

                      
	
                        12.8

                      	
                        Joint
      and Several

                      	
                        33

                      
	
                        12.9

                      	
                        Severability

                      	
                        33

                      
	
                        12.10

                      	
                        Headings

                      	
                        33

                      
	
                        12.11

                      	
                        Counterparts

                      	
                        33

                      
	
                        12.12

                      	
                        References

                      	
                        33

                      
	
                        12.13

                      	
                        Seller
      Disclosure Letter

                      	
                        33

                      
	
                        12.14

                      	
                        Attorneys’
      Fees

                      	
                        33

                      
	
                        12.15

                      	
                        Section
      1031 Exchange/Tax Planning

                      	
                        34

                      
	
                        12.16

                      	
                        Casualty

                      	
                        34

                      
	
                        12.17

                      	
                        Condemnation

                      	
                        34

                      
	
                        12.18

                      	
                        Radon
      Gas

                      	
                        35

                      
	
                        12.19

                      	
                        Limited
      Liability

                      	
                        35

                      
	
                        12.20

                      	
                        Survival
      of Defined Terms

                      	
                        35

                      
	
                        12.21

                      	
                        Time
      of Essence

                      	
                        35

                      

              

            

          

        

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

      TABLE OF CONTENTS
(cont’d)

      

      
        
          
            
              	 
      	 
      	
                      Page

                    
	 
      	 
      	 
      
	
                      12.22

                    	
                      No
      Third-Party Beneficiary

                    	
                      35

                    
	
                      12.23

                    	
                      WAIVER
      OF JURY TRIAL

                    	
                      35

                    
	 
      	 
      
	
                      [Signature
      Page Follows]

                    	
                      7

                    

            

          

        

      

      

      EXHIBITS TO THIS
AGREEMENT

      

      
        
          
            
              	
                      EXHIBIT A-1

                    	
                      Form
      of Guaranty

                    
	
                      EXHIBIT B-1

                    	
                      Form
      of Earnout Agreement

                    
	
                      EXHIBIT C-1

                    	
                      Due
      Diligence Request
List

                    

            

          

        

      

      
        
           

        

        
          iv

          
            

          

        

        
           

        

      

      TABLE OF CONTENTS OF SELLER
DISCLOSURE LETTER

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              	
                                                                      SCHEDULES

                                                                    	 
      
	 
      	 
      
	
                                                                      Schedule 2.1(b)

                                                                    	
                                                                      Excluded
      Personal Property

                                                                    
	
                                                                      Schedule 2.1(c)

                                                                    	
                                                                      Excluded
      Property Agreements

                                                                    
	
                                                                      Schedule 2.2(b)

                                                                    	
                                                                      Assumed
      Obligations

                                                                    
	
                                                                      Schedule 4.2

                                                                    	
                                                                      Consents
      of Third Parties

                                                                    
	
                                                                      Schedule 4.5

                                                                    	
                                                                      Judgments

                                                                    
	
                                                                      Schedule 4.7

                                                                    	
                                                                      Seller’s
      Insurance

                                                                    
	
                                                                      Schedule 4.8

                                                                    	
                                                                      Litigation,
      Proceedings and Investigations

                                                                    
	
                                                                      Schedule 4.9

                                                                    	
                                                                      Compliance
      with Laws

                                                                    
	
                                                                      Schedule 4.10

                                                                    	
                                                                      Environmental
      Matters

                                                                    
	
                                                                      Schedule 4.14

                                                                    	
                                                                      Rent
      Roll and Resident Agreements

                                                                    
	
                                                                      Schedule 4.17

                                                                    	
                                                                      Condition
      of the Property

                                                                    
	
                                                                      Schedule 4.18

                                                                    	
                                                                      Independent
      Property

                                                                    
	
                                                                      Schedule 4.19

                                                                    	
                                                                      Utilities
      Access

                                                                    
	
                                                                      Schedule 4.22

                                                                    	
                                                                      Exceptions
      to Seller Ownership

                                                                    
	
                                                                      Schedule 4.23

                                                                    	
                                                                      Title
      Encumbrances

                                                                    
	
                                                                      Schedule 4.26

                                                                    	
                                                                      Loans

                                                                    
	 
      	 
      
	
                                                                      EXHIBITS

                                                                    	 
      
	 
      	 
      
	
                                                                      EXHIBIT A

                                                                    	
                                                                      Legal
      Description of the Property

                                                                    
	
                                                                      EXHIBIT B

                                                                    	
                                                                      List
      of Property Agreements

                                                                    
	
                                                                      EXHIBIT C

                                                                    	
                                                                      List
      of Licenses Required for the Property

                                                                    
	
                                                                      EXHIBIT D

                                                                    	
                                                                      Form
      of Seller’s Counsel Opinion

                                                                    
	
                                                                      EXHIBIT E

                                                                    	
                                                                      Rent
      Roll

                                                                    
	
                                                                      EXHIBIT F

                                                                    	
                                                                      Form
      Resident Agreement

                                                                    
	
                                                                      EXHIBIT G

                                                                    	
                                                                      Outstanding
      Citations

                                                                    
	
                                                                      EXHIBIT H

                                                                    	
                                                                      Form
      of Audit
Letter

                                                                    

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          v

          
            

          

        

        
           

        

      

      PURCHASE AND SALE
AGREEMENT

       

      THIS PURCHASE AND SALE
AGREEMENT (this “Agreement”) is dated
the 30th day of
December, 2009, by and among: GREENTREE ACQUISITION, LLC, a
Delaware limited liability company, or its successors or assigns (collectively,
the “Buyer”);
and GREENTREE AT WESTWOOD,
LLC, an Indiana limited liability company (the “Seller”).

       

      RECITALS:

       

      A.           Seller
is the owner of certain real, personal and intangible property constituting that
certain senior housing community known as GreenTree at Westwood, a 58 unit
assisted living facility located at 4895 Pine Ridge Dr., Columbus, Indiana,
47201.

       

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

       

      C.           Seller
has entered into that certain Management Services Agreement dated the
30th day of December,
2009 with Provision Living LLC, a Missouri limited liability company, as
manager (the “Existing Manager”).

       

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

       

      ARTICLE
I

      TERMINOLOGY

       

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

       

      Adjustment
Amount:  The amount computed under Section 2.4
hereof.

       

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

       

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

       

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

       

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

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

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

       

      Due Diligence
Period:  The period commencing on the Effective Date and ending
on December 31, 2009, during which time Buyer may, at reasonable times with
prior notice to Seller, (i) investigate the financial, legal, operational,
environmental and all other aspects of the Property as Buyer may desire, and
(ii) seek out sources of financing and/or investors, all in order to determine
whether to consummate the transactions contemplated by this Agreement or
terminate this Agreement.

       

      Earnout
Agreement:  That certain Earnout Agreement by and between Buyer
and Seller in substantially the form attached hereto as Exhibit
B-1, to be executed by Buyer and Seller at Closing.

       

      Effective
Date:  The date first written above.

       

      Existing
Manager:        PROVISION LIVING,
LLC, a Missouri limited liability company.

       

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

       

      Knowledge:  As
used in this Agreement, the term “knowledge” when used to refer to the knowledge
of Seller shall mean the actual knowledge of any member, manager, or officer of
Seller, or any matter which any such person should have knowledge of upon
reasonable inquiry.

       

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

       

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

       

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

       

      Manager: PROVISION
LIVING, LLC, a Missouri limited liability company.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

      Title
Insurer:    The Title Insurer is as follows:

       

      First
American Title Insurance Company

      111 North
Orange Avenue, Suite 1285

      Orlando,
Florida 32801

      Phone:
(407) 843-8674

      Fax:  (888)
216-9921

      Attn.:  Scott
Brown

      E-mail:
scobrown@firstam.com

      

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

       

      
        
          
            	
                    Accrued
      Employee Benefits

                  	
                    2.2

                  
	
                    Agreement

                  	
                    Preamble

                  
	
                    Assumed
      Obligations

                  	
                    Section
      2.2(b)

                  
	
                    Buyer

                  	
                    Preamble

                  
	
                    CERCLA

                  	
                    Section
      4.10

                  
	
                    Closing

                  	
                    Section
      9.1

                  
	
                    Closing
      Date

                  	
                    Section
      9.1

                  

          

        

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      
        
          	
                  Environmental
      Laws

                	
                  Section
      4.10

                
	
                  Extended
      Closing Date

                	
                  Section
      9.1

                
	
                  Governmental
      Payor Programs

                	
                  Section
      4.15

                
	
                  Guaranty

                	
                  Section
      7.13

                
	
                  Improvements

                	
                  Section
      2.1(a)

                
	
                  Indemnified
      Party

                	
                  Section
      10.4(a)

                
	
                  Indemnifying
      Party

                	
                  Section
      10.4(a)

                
	
                  Land

                	
                  Section
      2.1(a)

                
	
                  Management
      Agreement

                	
                  Section
      7.9

                
	
                  OFAC

                	
                  Section
      4.27

                
	
                  Patriot
      Act

                	
                  Section
      4.27

                
	
                  Permitted
      Buyer-Assignee

                	
                  Section
      12.5

                
	
                  Permitted
      Exception

                	
                  Section
      7.5(b)

                
	
                  Personal
      Property

                	
                  Section
      2.1(a)

                
	
                  Property

                	
                  Section
      2.1

                
	
                  Property
      Agreements

                	
                  Section
      2.1(c)

                
	
                  Proration
      Date

                	
                  Section
      2.4(a)

                
	
                  Proration
      Schedule

                	
                  Section
      2.4(a)

                
	
                  Purchase
      Price

                	
                  Section
      2.3

                
	
                  Real
      Property

                	
                  Section
      2.1(a)

                
	
                  Records

                	
                  Section
      6.10

                
	
                  Required
      Cure Items

                	
                  Section
      7.5(b)

                
	
                  Resident
      Agreements

                	
                  Section
      2.1(d)

                
	
                  Resident
      Deposits

                	
                  Section
      2.1(d)

                
	
                  SEC

                	
                  Section
      6.6(c)

                
	
                  Seller

                	
                  Preamble

                
	
                  Survey

                	
                  Section
      7.5(d)

                
	
                  Title
      Commitment

                	
                  Section
      7.5(a)

                
	
                  Title
      Defect

                	
                  Section
      7.5(b)

                
	
                  Title
      Expenses

                	
                  Section
      9.4

                
	
                  Title
      Notice

                	
                  Section
      7.5(b)

                
	
                  Transaction
      Costs

                	
                  Section
      9.4

                

        

      

       

      ARTICLE
II

      PURCHASE
AND SALE

       

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

       

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

      
        
           

        

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

       

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

       

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

       

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

       

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

       

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

       

      (h)           Any
and all rights of Seller or its Affiliates with respect to the use of (a) all
trade names, trademarks, service marks, copyrights, patents, jingles, slogans,
symbols, logos, inventions, computer software, operating manuals, designs,
drawings, plans and specifications, marketing brochures, the “GreenTree at
Westwood” name, logo, symbol, trademark and web site, or other proprietary
material, process, trade secret or trade right used by Seller or its Affiliates
in the operation of the Property and (b) all registrations, applications and
licenses for any of the foregoing. Notwithstanding the foregoing, Seller and its
Affiliates shall retain the right to use the “GreenTree” name and all other
items and rights listed in this subparagraph (h) at any properties other than
the GreenTree at Westwood Property.

      
        
           

        

        
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      2.2          Assumption of
Liabilities.

       

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

       

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

       

      (c)           Assumed
Obligations shall not include, and Buyer does not assume any liability related
to, any accrued wages, salary, vacation or other accrued paid time off or
benefits for the employees of the Property, including without limitation those
Employees who will continue to be employed at the Property after the Closing
(the “Accrued Employee
Benefits”), which shall be the responsibility of the Seller and the
remuneration of any party for, or payment of, any such Accrued Employee Benefits
shall not constitute an expense of the Facility under the existing management
agreement.

       

      2.3          Purchase
Price.  The purchase price for the Property shall be an amount
equal to FIVE MILLION ONE  HUNDRED FIFTY THOUSAND AND NO/100 U.S.
DOLLARS ($5,150,000.00), (the “Purchase Price”),
plus or minus (whichever is applicable) the Adjustment Amount which shall be
paid to Seller for the Purchased Property, all of which shall be paid by Buyer
at Closing via wire transfer of immediately available funds. The Purchase Price
may also be adjusted subsequent to Closing pursuant to the terms of the Earnout
Agreement.

       

      2.4          Adjustment of Purchase
Price.

       

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

       

      
        	
                 
      

              	
                (i)

              	
                Payments
      under Assumed Obligations, if any;

              

      

       

      
        
           

        

        
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                (ii)

              	
                The
      amount of the Accrued Employee
Benefits;

              

      

       

      
        	
                 
      

              	
                (iii)

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

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                Real
      property taxes.

              

      

       

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

       

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

       

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

       

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

       

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

       

      (f)          The
parties agree that any amounts that may become due under this Section 2.4 shall be
paid at Closing as can best be determined.  A post-Closing
reconciliation of pro-rated items shall be made by the Buyer and Seller within
ninety (90) days after Closing and any amounts due at that time shall be
promptly forwarded to the respective party in a lump sum payment.  Any
additional amounts which may become due after such determination shall be
forwarded at the time they are received.  Any amounts due under this
Section 2.4
which cannot be determined within ninety (90) days after Closing shall be
reconciled as soon thereafter as such amounts can be
determined.  Buyer and Seller agree that each shall have the right to
audit the records of the other for up to one (1) year following Closing in
connection with any such post-Closing reconciliation.

       

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

      
        
           

        

        
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      (h)          This
Section 2.4
shall survive the Closing for one (1) year.

       

      ARTICLE
III

      DUE
DILIGENCE PERIOD

       

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

       

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

       

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

      
        
           

        

        
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      ARTICLE
IV

      REPRESENTATIONS
AND WARRANTIES OF SELLER

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
           

        

        
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      4.7           Insurance.  Schedule 4.7 of the Seller Disclosure
Letter sets forth an accurate summary of all general liability, fire,
theft, professional liability and other insurance currently maintained with
respect to the Property.  Seller nor Existing Manager has taken any
action or failed to act in a manner, including the failure of Seller or Existing
Manager, to give any notice or information, which would limit or impair the
rights of Seller or Existing Manager under such insurance
policies.  Prior to Closing Seller will promptly notify Buyer of any
potential losses or claims that may be covered by the insurance and shall
provide Buyer with current loss runs within fifteen (15) days after the end of
each month from the Effective Date until the Closing.

       

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

       

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

       

      4.10        Environmental
Matters.  Except as identified on Schedule 4.10 of the Seller Disclosure
Letter, neither Seller nor Existing Manager has generated, stored or
disposed of any hazardous substance at or on the Property except in accordance
with Applicable Law, and neither Seller nor Existing Manager has knowledge of
any previous or present generation, storage, disposal or existence of any
hazardous substance at or on the Property other than in accordance with all
Applicable Laws.  The term “hazardous substance” shall mean “hazardous
waste,” “toxic substances,” “petroleum products,” “pollutants,” or other similar
or related terms as defined or used from time to time in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”) (42
U.S.C. §§ 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. § 6921, et seq.), similar state
laws, including Chapters 376 and 403, Florida Statutes, and regulations (the
“Environmental
Laws”) adopted thereunder.  Neither Seller nor
Existing Manager has filed or been required to file any notice reporting a
release of any hazardous substance into the environment, and no notice pursuant
to Section 103(a) or (c) of the CERCLA, 42 U.S.C. § 9601, et seq. or any other
Environmental Law has been or was required to be filed.  Neither
Seller nor Existing Manager has received any notice letter under any
Environmental Law or any notice or claim, and there is no investigation pending,
contemplated, or to Seller’s or knowledge threatened, to the effect that Seller
or Existing Manager is or may be liable for or as a result of the release or
threatened release of hazardous substance into the environment or for the
suspected unlawful presence of any hazardous waste on the
Property.  Seller agrees to indemnify and hold Buyer, Tenant, and
their Affiliates harmless from any Loss resulting from a breach of this Section
4.10.  Notwithstanding the provisions of ARTICLE X, the
agreement to indemnify in this Section 4.10 shall
survive the Closing for one (1) year.

       

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

       

      
        
           

        

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

       

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

       

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

       

      4.15        Medicare; Medicaid.
 Seller has not in
the past and currently is not receiving any payments under and has not in the
past and currently is not certified for participation in any governmental payor
programs relating to the Property, including but not limited to the Medicare and
Medicaid programs (“Governmental Payor
Programs”).

       

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

       

      4.17        Condition of
Property.

       

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

      
        
           

        

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

       

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

       

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

       

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

       

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

       

      
        
          
             

          

          
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    4.22        Interests;
Title.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    4.28         Broker’s or Finder’s
Fees.  No agent, broker, investment banker or other person or firm
acting on behalf of or under the authority of Seller or any Affiliate of Seller
is or will be entitled to any broker’s or finder’s fee or any other commission
or similar fee, directly or indirectly, in connection with the transactions
contemplated by this Agreement.  This Section 4.28 shall
survive the Closing or the expiration or any termination of this
Agreement.

    

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

     

    ARTICLE
V

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    ARTICLE
VI

    OTHER
COVENANTS

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    6.6          Confidentiality.

     

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

     

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    6.7          Publicity.  The
parties agree that no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party prior to Closing except as
required by Applicable Law.

     

    6.8          Reasonable Best
Efforts.  Subject to the terms and conditions of this
Agreement, each party will use its commercially reasonable efforts to take all
actions and to do all things necessary, proper or advisable and in its power to
satisfy any condition for which such party is responsible hereunder and to
consummate and make effective as soon as practicable the transactions
contemplated by this Agreement.

     

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

     

    6.10        Post-Closing Obligations of
Seller.  Following Closing, Seller shall use, and shall cause
Seller’s Affiliates to use, reasonable diligent efforts to cooperate with Buyer
and its Affiliates to (a) confirm that all Licenses are obtained and held by the
proper entity for operation of the Property, and (b) to the extent not
previously transferred to Buyer, to provide any records in Seller’s custody or
control which may be requested of Buyer by any authorized governmental
agency.  Further, upon Buyer’s request, for a period of one (1) year
after Closing, Seller shall make the operating statements and any and all books,
records, correspondence, financial data, leases, delinquency reports and all
other documents and matters maintained by Seller or its agents and relating to
receipts and expenditures pertaining to the Property for the three (3) most
recent full calendar years and the current calendar year (collectively, the
“Records”)
available to Buyer for inspection, copying and audit by Buyer's designated
accountants, and at Buyer's expense.  This Section 6.10 shall
survive the Closing for two (2) years.

    

    6.11        No Other Representations or
Warranties.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    ARTICLE
VII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF BUYER TO CLOSE

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

    

    7.5          Title Insurance and
Survey.

     

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

     

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

     

    
      
        
        

      

      
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    (c)    
      In the event (x) Buyer timely gives a Title
Notice to Seller and the Title Defects specified therein are not cured on or
before the Closing, (y) a Required Cure Item is not cured on or before the
Closing, or (z) if Seller does not timely notify Buyer that Seller will remove
Title Defects within the ten (10) days as specified above (in which case Buyer
shall make its election pursuant to this subsection (c) prior to the later of
March 31, 2009 or ten (10) days following the date of such Title Notice), Buyer
shall have the option to:

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    (g)           Title
Expenses (as herein defined) shall be paid by the parties in accordance with
Section 9.4
hereof.

     

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

     

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

     

    7.8          Licenses.

     

    (a)           To
the extent necessary and permitted or required by Applicable Laws, Seller shall
have completed the transfer and assignment of all the Licenses listed on Exhibit
C to the Post-Closing Licensee at or prior to the Closing.  To
the extent that any such Licenses are not transferable or assignable by Seller,
the Post-Closing Licensee shall have obtained, at the Buyer’s sole cost and
expense, in the Post-Closing Licensee’s own name, the Licenses, and Seller shall
reasonably cooperate with the Post-Closing Licensee in obtaining such Licenses
at or prior to Closing, at no cost to Seller.  The Post-Closing
Licensee shall diligently pursue all required Licenses.  If any
Licenses cannot be obtained by the Post-Closing Licensee at or prior to the
Initial Closing Date, Buyer shall have the right to extend the Closing as
provided for in Section
9.1.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
VIII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF SELLER TO CLOSE

     

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

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

    8.3          Delivery of Closing
Documents.

     

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

     

    ARTICLE
IX

    CLOSING

     

    9.1          Closing Date and
Place.

     

    (a)           Initial Closing
Date.  The Closing shall take place at
the offices of Foley & Lardner LLP, Orlando, Florida, on January 15, 2010 or
at such earlier or later date and time as may be agreed upon by the Buyer and
Seller (the “Closing
Date”). The
Closing shall be accomplished by the Buyer and Seller depositing the Closing
Documents into escrow with the Title Insurer and Buyer and Seller issuing their
respective instructions to the Title Insurer.

     

    (b)           First Extended Closing
Date.  Notwithstanding the foregoing, Buyer shall have the
option, by written notice to Seller, to extend the Closing beyond the Initial
Closing Date for up to thirty (30) additional days (the “First Extended Closing
Date”), provided that in order to exercise such extension option, Buyer
must pay Seller an extension fee equal to TWENTY FIVE THOUSAND AND NO/DOLLARS
($25,000.00), which extension fee shall nonrefundable and be applied to the
Purchase Price at Closing.

     

    (c)           Second Extended Closing
Date.  Notwithstanding the foregoing, Buyer shall have the
option, by written notice to Seller, to extend the Closing beyond the First
Extended Closing Date for up to thirty (30) additional days (the “Second Extended Closing
Date”), provided that in order to exercise such extension option, Buyer
must pay Seller an extension fee equal to TWENTY FIVE THOUSAND AND NO/DOLLARS
($25,000.00), which extension fee shall be nonrefundable and applied to the
Purchase Price at Closing.

     

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

     

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

     

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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (k)          A
duly executed Guaranty from each of the Guarantors.

     

    (l)           Unaudited and unreviewed
historical financial statements and any other documents identified by Buyer that
are required to allow the Buyer to comply with any reporting, disclosure, or
filing requirements imposed upon the Buyer by the SEC with respect to the
transactions contemplated by this Agreement.  Additionally,
Seller shall provide Buyer, but without expense to Seller, with (a) an
audit letter in substantially the form as Exhibit
H attached to the Seller Disclosure Letter and made a part hereof, and
(b) copies of, or access to, such factual information as may be reasonably
requested by Buyer or its designated accountants, and in the possession or
control of Seller, to enable Buyer to file any filings required by the SEC in
connection with the purchase of the Property.

     

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

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (n)          The
Earnout Agreement, duly executed by the Buyer.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (g)          The
Earnout Agreement, duly executed by the Seller.

     

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

     

    9.4          Closing
Costs.  Buyer and Seller shall each pay their respective
attorneys’ fees and expenses.  All other due diligence and closing
costs (collectively, “Transaction Costs”)
shall be borne by Buyer; provided, however, that at
Closing, Buyer shall be entitled to a credit against the Purchase Price in an
amount equal to the sum of (a) all costs of the Title Insurer to issue an
owner’s title insurance policy, (b) survey costs, (c) one-half of the closing
fee charged by the Title Insurer and (d) one-half of the transaction fee charged
by the Manager which one-half shall not exceed $12,500.00.  Buyer shall pay all costs
associated with its loan; any lender title insurance charges; and charges for
any endorsements requested for the owner’s title insurance
policy.  The cost sharing referred to above shall occur only if the
closing occurs. If Closing does not occur for any reason the provisions of
Section 11.1 or 11.2, as applicable, shall determine each parties responsibility
for the costs incurred by the parties with respect to this
Agreement.

     

    ARTICLE
X

    INDEMNIFICATION

     

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

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    (d)           The
Accrued Employee Benefits.

     

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

     

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

     

    (b)           The
Assumed Obligations.

     

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

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    (f)           Notwithstanding
anything to the contrary in this Agreement, the right to pursue indemnification
as set forth in this ARTICLE X shall be
actionable or payable only if valid claims for Losses, if any, collectively
aggregate more than Fifty Thousand and No/100 U.S. Dollars ($50,000) (the “Floor”); provided, however, that the
foregoing limitation shall not apply in the case of fraud on the part of Buyer,
Seller or any of their respective Affiliates, or to any claims arising under
Section
10.2(b), Section 10.2(c),
Section
10.2(d), or Section 10.3(b)
(none of which shall be limited in any manner whatsoever).  In
addition, Buyer agrees to concurrently seek recovery against Seller, under any
insurance policies, the Title Policy and other applicable agreements, and Seller
shall not be liable to Buyer to the extent Buyer’s claim is actually satisfied
from any sums recovered from such insurance policies, Title Policy or other
applicable agreements.  FINALLY, IN NO EVENT SHALL EITHER
PARTY EVER BE LIABLE FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES OTHER THAN IN THE
EVENT OF FRAUD.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    ARTICLE
XI

    DEFAULT
AND TERMINATION

     

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

     

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

     

    (b)           By
written agreement of Seller and Buyer; 

     

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

     

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

     

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

     

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

     

    11.2        Remedies upon
Default.  

     

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

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    (b)           If
Buyer defaults on its obligation to close this transaction Seller’s exclusive
remedy shall be to terminate this Agreement and pay to Seller all actual
out-of-pocket costs incurred by Seller in pursuing the transaction contemplated
by this Agreement, including but not limited to one-half of the transaction fee
charged by the Manager, if any, which one-half shall not exceed $12,500.00 and
reasonable attorney fees; provided, however, that in no
event shall such amount for all costs exceed $20,000.00 in the
aggregate.  

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    ARTICLE
XII

    MISCELLANEOUS

     

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

     

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

     

    
      
        
          
            
              	
                      (a)    
       If to Seller, to:

                    	
                      GREENTREE
      AT WESTWOOD, LLC

                    
	 	 
      
	 
      	
                      c/o
      R. Lynn Greenwalt

                    
	 
      	
                      [1107
      North State Street

                    
	 
      	
                      Greenfield,
      Indiana 46140]

                    
	 
      	
                      Telephone:  317/462-8048

                    
	 
      	
                      Facsimile:  317/462-8064

                    
	 
      	
                      E-mail:  lgreenwalt@greenwaltcorp.com

                    
	 
      	 
      
	
                      with copies
      to:

                    	
                      Pritzke
      & Davis, LLP

                    
	 
      	
                      c/o
      Ronald R. Pritzke

                    
	 
      	
                      728
      N. State St.

                    
	 
      	
                      P.
      O. Box 39

                    
	 
      	
                      Greenfield,
      IN  46140

                    
	 
      	
                      Telephone:  317/462-3434

                    
	 
      	
                      Facsimile:  317/462-3494

                    
	 
      	
                      Email:  rpritzke@pritzkeanddavis.com

                    
	 
      	 
      
	
                      (b)     
      If to Buyer, to:

                    	
                      GREENTREE
      ACQUISITION, LLC

                    
	 
      	
                      c/o
      Cornerstone Growth & Income REIT, Inc.

                    
	 
      	
                      Attn:  Sharon
      C. Kaiser

                    
	 
      	
                      Chief
      Financial Officer

                    
	 
      	
                      1920
      Main Street, Suite 400

                    
	 
      	
                      Irvine,
      CA 92614

                    
	 
      	
                      Telephone
      No.:  949.263.4326

                    
	 
      	
                      Telecopy
      No.: 949.250.0592

                    
	 
      	 
      
	
                         with copies
      to:

                    	
                      Servant
      Healthcare Investments, LLC

                    
	 
      	
                      Attn:
      Kevin Maddron

                    
	 
      	
                      1000
      Legion Place, Ste. 1650

                    
	 
      	
                      Orlando,
      FL 32801

                    
	 
      	
                      Telephone
      No.: 407.999.7772

                    
	 
      	
                      Telecopy
      No.:
407.999.7759

                    

            

          

        

      

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    

    
      
        
          	
                    
      and:

                	
                  Michael
      A. Okaty, Esq.

                
	 
      	
                  Foley
      & Lardner LLP

                
	 
      	
                  111
      N. Orange Avenue, Suite 1800

                
	 
      	
                  Orlando,
      FL 32801

                
	 
      	
                  Telephone:  407-423-7656

                
	 
      	
                  Fax:  407-648-1743

                
	 
      	
                  E-mail:  mokaty@foley.com

                

        

      

    

    

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

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

     

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

     

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

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    12.18       Radon Gas.  The
following notice is incorporated into this Contract pursuant to the requirements
of Florida Statutes:

     

    Radon
Gas:  Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time.  Levels of radon that exceed
Federal and State guidelines have been found in buildings in
Florida.  Additional information regarding radon and radon testing may
be obtained from your County Public Health Unit.

     

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

     

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

     

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

     

    12.22       No Third-Party
Beneficiary.  Except
as provided in Section 12.24, the provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of the Buyer, Seller and Guarantor only and are not for the benefit of
any third party; and, accordingly, no third party shall have the right to
enforce the provisions of this Agreement or of the documents to be executed and
delivered at Closing.

     

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

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    12.24       Right of First
Refusal.  As additional consideration for Seller entering into
this Agreement, Buyer agrees to consider funding a memory care expansion on the
Real Property to the extent the market can support the need for same and the
financial pro forma is economically viable.  If the expansion is
approved by Buyer, in its sole and absolute discretion, then, so long as Buyer
is the owner of the Property, Greenwalt Development, Inc. shall have a right of
first refusal to act as developer on the expansion for market based
fee.  This Section 12.24 shall survive the Closing.

     

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

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

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

    

    
      
        
          	
                  BUYER:

                	 
      	
                  SELLER:

                
	 
      	 
      	 
      	 
      	 
      
	
                  GREENTREE
      ACQUISITION, LLC,

                  a
      Delaware limited liability company

                	 
      	
                  GREENTREE AT WESTWOOD,
      LLC, an

                  Indiana
      limited liability company

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  By:  

                	
                  GREENWALT DEVELOPMENT,
      INC.,

                     an
      Indiana corporation,

                
	
                  By:

                	
                       

                	 
      	 
      	
                     its
      Managing Member

                
	
                  Name:

                	
                       

                	 
      	 
      	 
      
	
                  Title:

                	
                       

                	 
      	 
      	 
      
	 
      	 
      	 
      	
                  By:  

                	
                       

                
	 
      	 
      	 
      	 
      	
                  R.
      Lynn Greenwalt

                
	 
      	 
      	 
      	 
      	
                  Chief
      Executive Officer

                

        

      

    

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    

    EXHIBIT
A-1

    

    FORM
OF GUARANTY

    

    GUARANTY
OF PURCHASE AND SALE AGREEMENT

     

    THIS GUARANTY OF PURCHASE AND SALE
AGREEMENT, dated as of February ____, 2009 (the “Guaranty”), is
executed by GREENWALT
DEVELOPMENT LLC, a Missouri limited liability company (the “Guarantor”), and
extended to GREENTREE
ACQUISITION, LLC, a Delaware limited liability company (the “Buyer”), for the
benefit of GREENTREE AT
WESTWOOD, LLC, a _________________ limited liability company (the “Seller”).

     

    RECITALS:

     

    WHEREAS, Buyer has agreed to
purchase, and Seller has agreed to sell and cause to be transferred to Buyer, an
assisted living facility known as GreenTree at Westwood (the “Facility”), located
at _____________________________________ and real and personal property
associated therewith pursuant to the terms and conditions of that certain
Purchase and Sale Agreement between Seller and Buyer dated of even date herewith
(the “Agreement”).

     

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

     

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

     

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

     

    
      	
              1.

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

            

    

     

    
      	
              2.

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

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              3.

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

            

    

     

    
      	
              4.

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

            

    

     

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

     

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

     

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

     

    
      
         

      

      
        Exhibit
A-1, Page 2

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    
      	
              5.

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

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    G.             Any
demand for payment under this Guaranty.

     

    
      	
              6.

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

            

    

     

    
      
         

      

      
        Exhibit
A-1, Page 3

        
          

        

      

      
         

      

    

    
      	
              7.

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

            

    

     

    
      	
              8.

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

            

    

     

    
      	
              9.

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

            

    

     

    
      	
              10.

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

            

    

     

    
      
         

      

      
        Exhibit
A-1, Page 4

        
          

        

      

      
         

      

    

    
      	
              11.

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

            

    

     

    
      	
              12.

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

            

    

     

    
      	
              13.

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

            

    

     

    
      	
              14.

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

            

    

     

    
      	
              15.

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

            

    

     

    
      
        
          
            	
                    to
      Guarantor:

                  	
                    GREENWALT
      DEVELOPMENT, LLC

                  
	 
      	 
      
	 
      	
                    and

                  
	 
      	 
      
	
                    to
      Buyer:

                  	
                    GREENTREE
      ACQUISITION, LLC

                  
	 
      	
                    c/o
      Cornerstone Growth & Income REIT, Inc.

                  
	 
      	
                    Attn:  Sharon
      C. Kaiser

                  
	 
      	
                    Chief
      Financial Officer

                  
	 
      	
                    1920
      Main Street, Suite 400

                  
	 
      	
                    Irvine,
      CA 92614

                  
	 
      	
                    Telephone
      No.:  949.263.4326

                  
	 
      	
                    Telecopy
      No.:    949.250.0592

                  

          

        

      

    

     

    
      
         

      

      
        Exhibit
A-1, Page 5

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  with copies
      to:

                	
                  Servant
      Healthcare Investments, LLC

                
	 
      	
                  Attn:
      Kevin Maddron

                
	 
      	
                  1000
      Legion Place, Ste. 1650

                
	 
      	
                  Orlando,
      FL 32801

                
	 
      	
                  Telephone
      No.: 407.999.7772

                
	 
      	
                  Telecopy
      No.: 407.999.7759

                
	 
      	 
      
	
                  and:

                	 
      
	 
      	 
      
	 
      	
                  Michael
      A. Okaty, Esq.

                
	 
      	
                  Foley
      & Lardner LLP

                
	 
      	
                  111
      N. Orange Avenue, Suite 1800

                
	 
      	
                  Orlando,
      FL 32801

                
	 
      	
                  Telephone:  407-423-7656

                
	 
      	
                  Fax:  407-648-1743

                
	 
      	
                  E-mail:  mokaty@foley.com

                

        

      

    

    

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

     

    
      	
              16.

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

            

    

     

    
      	
              17.

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

            

    

     

    
      
         

      

      
        Exhibit
A-1, Page 6

        
          

        

      

      
         

      

    

    
      	
              18.

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

            

    

     

    
      	
              19.

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

            

    

     

    
      	
              20.

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

            

    

     

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

     

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

     

    [Signature
Page Follows]

     

    
      
         

      

      
        Exhibit
A-1, Page 7

        
          

        

      

      
         

      

    

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

     

    
      
        	 
      	
                GREENWALT DEVELOPMENT, LLC,
      a Missouri limited liability company

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                            

              
	 
      	
                Name: 

              	 
      
	 
      	
                Its:

              	 
      

      

    

    

    STATE OF
FLORIDA

    COUNTY OF
___________________

    

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

     

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

    

    
      
        	 
      	
                     

              
	 
      	
                Signature
      of Notary

              
	 
      	 
      
	 
      	
                     

              
	 
      	
                Name of Notary (Typed, Printed or
      Stamped)

              

      

    

     

    
      
        
          	 
      	
                  Commission
      Number (if not legible on seal):___________ 

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

                

        

      

    

     

    STATE OF
___________

    COUNTY OF
________________

    

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

     

    
      
         

      

      
        Exhibit
A-1, Page 8

        
          

        

      

      
         

      

    

     

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

    

    
      	 
      	
                   

            
	 
      	
              Signature
      of Notary

            
	 
      	 
      
	 
      	
                   

            
	 
      	
              Name
      of Notary (Typed, Printed
      or Stamped)

            

    

     

    
      	 
      	
              Commission
      Number (if not legible on seal):___________ 

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

            

    

     

    
      
        
           

        

        
          Exhibit
A-1, Page 9

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
B-1

    

    EARNOUT
AGREEMENT

    

    THIS
EARNOUT AGREEMENT (“Agreement”) is
entered into this _____ day of ___________, 20__, (the “Effective Date”) by
and between GREENTREE AT WESTWOOD, LLC, a limited liability company “Seller”, and
GREENTREE ACQUISITION, LLC (“Buyer”), a Delaware
limited liability company.

    

    RECITALS

    

    A.           Seller
has this date sold to Buyer the Property (hereinafter defined) pursuant to a
Purchase and Sale Agreement among the Seller and Buyer of even date herewith
(the “Purchase
Agreement”).

     

    B.           The
Purchase Agreement provides that a portion of the purchase price for the
Property purchased under the Purchase Agreement is to be calculated and paid as
an earnout based upon Buyer’s NOI (hereinafter defined) for the Property over
the Term (hereinafter defined).

     

    C.           The
Seller and the Buyer have agreed that determination and payment of the earnout
contemplated by the Purchase Agreement as part of the purchase price for the
Property is to be in accordance with the terms of this Agreement.

     

    NOW,
THEREFORE, in consideration of the sale and purchase of the Property and of the
respective covenants and provisions herein contained, the Seller and the Buyer
hereby agree as follows:

     

    ARTICLE
I.

    DEFINITIONS

     

    For
purposes of this Agreement, the terms listed below have the following meanings
and any terms used but not defined herein shall have the meanings attributed
thereto in the Purchase Agreement:

    

    1.1           “Annualized NOI” means
an annualized number based on the NOI for the trailing six (6) month period
ending on the last day of the month prior to the date of receipt by the Buyer of
an Exercise Notice.

     

    1.2           “Earnout Payment”
means the amount equal to (a) Annualized NOI divided by nine percent (9.00%),
less (b) the Purchase Price, less (c) the total of any and all Earnout Payments
previously made.

     

    1.3           “Exercise Notice” has
the meaning provided for in Section 2.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4           “FF&E Payment”
means $500 per residential unit at the Property per year.

     

    1.5           “Maximum Earnout
Payment” means ONE MILLION DOLLARS ($1,000,000).

     

    1.6           “NOI” has the meaning
provided for in Article III.

     

    1.7           “Payment Year” means
each of the consecutive twelve (12) month periods from the Effective Date to the
first (1st), second (2nd) and third (3rd) anniversaries of the Effective Date,
respectively.

     

    1.8           “Purchase Price” has
the meaning provided for in the Purchase Agreement.

     

    1.9           “Term” means the
period commencing on the Effective Date and continuing until the earlier to occur of
(a) thirty (30) days after the third anniversary of the Effective Date or (b)
the date when payments made under Section 2.1 equal the Maximum Earnout
Payment.

     

    ARTICLE
II.

    EARNOUT
PAYMENTS

     

    2.1           
Payment
Obligation.  Seller shall have the right to, not more than once
per Payment Year nor more than three times in the aggregate during the Term,
provide Buyer with written notice of Seller’s election to receive an Earnout
Payment (each an “Exercise Notice”) and
Buyer agrees to pay to Seller the Earnout Payment to which each such Exercise
Notice relates; provided, however, that in no
event whatsoever shall the sum of all Earnout Payments exceed the Maximum
Earnout Payment, and accordingly, any Earnout Payment may be reduced or withheld
entirely to the extent such Earnout Payment would cause all Earnout Payments to
exceed the Maximum Earnout Payment.  An Exercise Notice made within
thirty (30) days of a Payment Year shall be deemed to have been made within the
Payment Year.  Except as otherwise set forth herein and as limited
hereby, each Earnout Payment shall be paid to Seller within sixty (60) days
after receipt by Buyer of an Exercise Notice (the “Payment
Date”).  Provided, however, that if an objection is made pursuant to
Section 3.2 hereof, payment shall be deferred until a final determination
is made pursuant to said Section 3.2.  All Earnout Payments are
deemed earned as of the date of the Election Notice relating thereto and shall
become non-refundable as of the date of the Election Notice regardless of the
Payment Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.2           Tax
Consequences.  The parties agree that any payments hereunder
shall be treated as adjustments to the Purchase Price under the Purchase
Agreement.

     

    2.3           Right of
Offset.  Notwithstanding anything to the contrary, any Earnout
Payments due under this Agreement are subject to offset and credit for
obligations owing to the Buyer by the Seller under the Purchase Agreement and
for any sums that Buyer may be obligated to pay by reason of any failure to
comply with any bulk transfer laws in connection with the sale of assets under
the Purchase Agreement, including, without limitation, any sums payable for
taxes and unemployment compensation liability of the Seller.

     

    2.4           Term.  This
Agreement shall terminate, and the parties shall have no other obligations
hereunder, upon the expiration of the Term.

     

    ARTICLE
III.

    COMPUTATION
OF NOI

     

    3.1           Manner of
Computation.  For purposes of this Agreement, “NOI” for any
period shall mean the gross income from operations of the Property by the Buyer
less all operating expenses therefrom, including, without limitation, all
management fees and the FF&E Payment before interest, taxes (other than real
property taxes on the Property), depreciation and amortization.  NOI
shall be determined in accordance with generally accepted accounting principles
(“GAAP”).  In
determining NOI:

     

     (a)           NOI
shall be computed without regard to “extraordinary items” of gain or loss as
that term shall be defined in GAAP;

     

     (b)           NOI
shall not include any gains, losses or profits realized from the sale of any
assets other than in the ordinary course of business;

     

     (c)           NOI
shall not include any gains, losses, income or profit from any expansion to the
Property after the Effective Date; and

     

     (d)           During
the Term, the Buyer shall furnish Seller with monthly financial statements and a
preliminary, non-binding calculation of NOI within thirty (30) days of the last
day of each preceding month.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.2           Approval of
Determination.

     

     (a)           NOI,
as defined in Section 3.1 of this Agreement, shall be determined as
described in Section 3.1 by Buyer after receipt by Buyer of an Exercise
Notice.  Within thirty (30) days following receipt of an Exercise
Notice, Buyer shall provide Seller a report setting forth its computation of the
NOI and, unless Seller notifies Buyer within thirty (30) days after receipt of
such report that it objects to the computation of NOI set forth therein, the
report shall be binding and conclusive for the purposes of this
Agreement.  Seller shall have access to the books and records of Buyer
during regular business hours to verify the computation of NOI.

     

     (b)           If
Seller notifies Buyer in writing within thirty (30) days after receipt of the
report that it objects to the computation of NOI set forth therein, the amount
of NOI for the period to which such report relates shall be determined by
negotiation between Seller and the Buyer.  If Seller and the Buyer are
unable to reach agreement within thirty (30) business days after such
notification, the determination of the amount of NOI for the period in question
shall be submitted to a mutually agreeable third-party firm of independent
certified public accountants which neither the Buyer nor the Seller has a
relationship (“Special
Accountants”) for determination, whose determination shall be binding and
conclusive on the parties.  If the Special Accountants determine that
the NOI has been understated by five (5%) percent or more, then the Buyer shall
pay the Special Accountants’ fees, costs and expenses.  If NOI has not
been understated or has been understated by less than five (5%) percent, then
Seller shall pay the Special Accountants’ fees, costs and expenses.

     

     (c)           So
long as this Agreement continues in effect, Buyer shall provide to Seller, in
addition to any other reports required hereunder, the financial statements for
the Property within ten (10) business days following completion or receipt
thereof by Buyer.

     

    ARTICLE
IV.

    MISCELLANEOUS

     

    4.1           Benefit of
Parties.  All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective permitted successors and assigns.  This Agreement shall not
be assignable by either party.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.2           Entire
Agreement.  This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings between the parties with respect
thereto.

     

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

     

    4.4           Cooperation.  During
the Term, each party will cooperate with and assist the other party in taking
such acts as may be appropriate to enable all parties to effect compliance with
the terms of this Agreement and to carry out the true intent and purposes
hereof.  The parties agree that their dealings with regard to the
subject matter of this Agreement shall be accomplished in good faith and
according to the principal of fair dealing and as fiduciaries each to the
other.

     

    4.5           Conduct of
Business.  Buyer agrees to conduct its business in a
commercially reasonable manner and in the ordinary course of
business.  Buyer also agrees to conduct the Acquired Business in a
manner which will facilitate the determination of its NOI in the manner
contemplated by Article III.

     

    4.6           Notices.  All
notices, elections, requests, demands or other communications hereunder shall be
in writing and shall be deemed given at the time delivered personally or by fax
or upon receipt if deposited in the United States mail, certified or registered,
return receipt requested, postage prepaid addressed to the parties as follows
(or to such other person or place, written notice of which any party hereto
shall have given to the other):

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
              If
      to the Seller:

            	
              c/o
      R. Lynn Greenwalt

            	 
      
	 
      	
              1107
      North State Street

            	 
      
	 
      	
              Greenfield,
      Indiana 46140

            	 
      
	 
      	
              Telephone:  317/462-8048

            	 
      
	 
      	
              Facsimile:  317/462-8064

            	 
      
	 
      	 
      	 
      
	
              with
      a copy to:

            	
              Pritzke
      & Davis, LLP

            	 
      
	 
      	
              728
      N. State St.

            	 
      
	 
      	
              P.
      O. Box 39

            	 
      
	 
      	
              Greenfield,
      IN  46140

            	 
      
	 
      	
              Attn:  Ronald
      R. Pritzke

            	 
      
	 
      	
              Telephone:  317/462-3434

            	 
      
	 
      	
              Facsimile:  317/462-3494

            	 
      

    

    

    
      	
              If
      to the Buyer:

            	
              GreenTree
      Acquisition, LLC

            	 
      
	 
      	
              c/o
      Cornerstone Growth & Income REIT, Inc.

            	 
      
	 
      	
              Attn:  Sharon
      C. Kaiser

            	 
      
	 
      	
              Chief
      Financial Officer

            	 
      
	 
      	
              1920
      Main Street, Suite 400

            	 
      
	 
      	
              Irvine,
      CA 92614

            	 
      
	 
      	
              Telephone
      No.:  949.263.4326

            	 
      
	 
      	
              Telecopy
      No.: 949.250.0592

            	 
      
	 
      	 
      	 
      
	
              with
      a copy to:

            	
              Servant
      Healthcare Investments, LLC

            	 
      
	 
      	
              Attn:
      Kevin Maddron

            	 
      
	 
      	
              1000
      Legion Place, Ste. 1650

            	 
      
	 
      	
              Orlando,
      FL 32801

            	 
      
	 
      	
              Telephone
      No.: 407.999.7772

            	 
      
	 
      	
              Telecopy
      No.: 407.999.7759

            	 
      
	 
      	 
      	 
      
	
              with
      a copy to: 

            	
              Michael
      A. Okaty, Esq.

            	 
      
	 
      	
              Foley
      & Lardner LLP

            	 
      
	 
      	
              111
      N. Orange Ave., Suite 1800

            	 
      
	 
      	
              Orlando,
      FL 32801

            	 
      
	 
      	
              Fax:
      407-648-1743

            	 
      

    

    

    4.7           Waiver of
Compliance.  The party for whose benefit a warranty,
representation, covenant or conditions intended may, in writing, waive any
inaccuracies in the warranties, representations, covenants or conditions
contained in this Agreement or waive compliance with any of the foregoing and so
waive performance of any of the obligations of the other part hereto and any
defaults hereunder, provided, however, that such waiver shall not affect or
impair the waiving party’s rights in respect to any other warranty,
representation, covenant, condition or default hereunder.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    4.8           Headings and
Captions.  The captions of the Articles and Sections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any Article or Section hereof.

     

    4.9           Attorney
Fees.  In the event either party brings an action to enforce or
interpret any of the provisions of this Agreement, the “prevailing party” in
such action shall, in addition to any other recovery, be entitled to its
reasonable attorneys’ fees and expenses arising from such action and any appeal
or any bankruptcy action related thereto, whether or not such matter proceeds to
trial.  For purposes of this Section 4.9, “prevailing party” shall
mean, in the case of a person asserting a claim, such person is successful in
obtaining substantially all of the relief sought, and in the case of a person
defending against or responding to a claim, such person is successful in denying
substantially all of the relief sought.

     

    [signature
pages follow]

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have hereunto caused this Earnout Agreement to be
executed in multiple original counterparts as of the date set forth
above.

    

    
      
        
          
            
              
                	
                        BUYER:

                      
	 
      
	
                        GREENTREE
      ACQUISITION,   LLC,

                      
	
                        a
      Delaware limited liability company

                      
	 
      	 
      
	
                        By:

                      	 
      
	
                        Name:

                      	 
      
	
                        Title:

                      	 
      

              

            

          

        

      

    

    

    
      
        
          
            
              	
                      SELLER:

                    
	 
      
	
                      GREENTREE AT WESTWOOD, LLC,
      an Indiana limited liability company

                    
	 
      
	
                      BY:      
      

                    	
                      GREENWALT
      DEVELOPMENT, INC.,

                    
	 
      	
                      Managing
      Member

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	
                      R.
      Lynn Greenwalt,
CEO

                    

            

          

        

      

    

    
      
         

      

      
        8Unassociated Document

    Exhibit
10.2

     

    PURCHASE
AND SALE AGREEMENT

    

    By
And Between

    

    MVI
HEALTH CENTER, LP,

    a
Delaware limited partnership

    as
“Buyer”

    

    and

    

    SNF
MESA VISTA, LLC,

    a
Texas limited liability company

    as
“Seller”

    

    Dated
as of

    

    December
31, 2009

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                	 
      	 	
                        Page

                      
	 
      	 	 
      
	
                        ARTICLE I TERMINOLOGY

                      	 	
                        1

                      
	
                        1.1

                      	
                        Defined Terms

                      	 	
                        1

                      
	
                        1.2

                      	
                        Additional Defined Terms

                      	 	
                        3

                      
	 
      	 	 
      
	
                        ARTICLE II PURCHASE AND
SALE

                      	 	
                        4

                      
	
                        2.1

                      	
                        Property

                      	 	
                        4

                      
	
                        2.2

                      	
                        Assumption of Liabilities.

                      	 	
                        5

                      
	
                        2.3

                      	
                        Purchase Price

                      	 	
                        6

                      
	
                        2.4

                      	
                        Adjustment of Purchase
    Price.

                      	 	
                        6

                      
	
                        2.5

                      	
                        Earnest Money Deposit

                      	 	
                        7

                      
	
                        2.6

                      	
                        Escrow Agent.

                      	 	
                        7

                      
	 
      	 	 
      
	
                        ARTICLE III DUE DILIGENCE
      PERIOD

                      	 	
                        8

                      
	
                        3.1

                      	
                        Due Diligence Period

                      	 	
                        8

                      
	
                        3.2

                      	
                        Buyer’s Responsibilities

                      	 	
                        9

                      
	
                        3.3

                      	
                        Continuing Diligence and Inspection
      Rights

                      	 	
                        9

                      
	 
      	 	 
      
	
                        ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
      SELLER

                      	 	
                        9

                      
	
                        4.1

                      	
                        Organization; Good Standing of
      Seller

                      	 	
                        9

                      
	
                        4.2

                      	
                        Consent of Third Parties

                      	 	
                        10

                      
	
                        4.3

                      	
                        Authority; Enforceability

                      	 	
                        10

                      
	
                        4.4

                      	
                        Absence of Conflicts

                      	 	
                        10

                      
	
                        4.5

                      	
                        No Judgments

                      	 	
                        10

                      
	
                        4.6

                      	
                        No Governmental Approvals

                      	 	
                        10

                      
	
                        4.7

                      	
                        Insurance

                      	 	
                        10

                      
	
                        4.8

                      	
                        Litigation

                      	 	
                        10

                      
	
                        4.9

                      	
                        Compliance with Laws

                      	 	
                        11

                      
	
                        4.10

                      	
                        Environmental Matters

                      	 	
                        11

                      
	
                        4.11

                      	
                        Assessments

                      	 	
                        11

                      
	
                        4.12

                      	
                        Property Agreements

                      	 	
                        11

                      
	
                        4.13

                      	
                        Licenses

                      	 	
                        12

                      
	
                        4.14

                      	
                        Rent Roll

                      	 	
                        12

                      
	
                        4.15

                      	
                        Medicare; Medicaid

                      	 	
                        12

                      
	
                        4.16

                      	
                        Condemnation

                      	 	
                        13

                      
	
                        4.17

                      	
                        Condition of Property

                      	 	
                        13

                      
	
                        4.18

                      	
                        Independent Property

                      	 	
                        14

                      
	
                        4.19

                      	
                        Utilities Access

                      	 	
                        14

                      
	
                        4.20

                      	
                        Zoning

                      	 	
                        14

                      
	
                        4.21

                      	
                        FIRPTA

                      	 	
                        14

                      
	
                        4.22

                      	
                        Interests; Title

                      	 	
                        14

                      
	
                        4.23

                      	
                        Title Encumbrances

                      	 	
                        15

                      
	
                        4.24

                      	
                        Affordable Housing Units

                      	 	
                        15

                      
	
                        4.25

                      	
                        No New Survey Matters

                      	 	
                        15

                      

              

            

          

        

      

    

    
      
         

      

      
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    TABLE OF CONTENTS
(cont’d)

    

    
      
        
          
            
              
                
                  
                    	 
      	 
      	 	
                            Page

                          
	 
      	 
      	 	 
      
	
                            4.26

                          	
                            Loans

                          	 	
                            15

                          
	
                            4.27

                          	
                            Patriot Act Compliance

                          	 	
                            15

                          
	
                            4.28

                          	
                            Broker’s or Finder’s Fees

                          	 	
                            15

                          
	
                            4.29

                          	
                            Insolvency

                          	 	
                            15

                          
	 
      	 	 
      
	
                            ARTICLE V REPRESENTATIONS AND WARRANTIES OF
      BUYER

                          	 	
                            16

                          
	
                            5.1

                          	
                            Organization and Good
    Standing

                          	 	
                            16

                          
	
                            5.2

                          	
                            Consent of Third Parties

                          	 	
                            16

                          
	
                            5.3

                          	
                            Authorization and Binding Effect of
      Documents

                          	 	
                            16

                          
	
                            5.4

                          	
                            Absence of Conflicts

                          	 	
                            16

                          
	
                            5.5

                          	
                            Consents

                          	 	
                            16

                          
	
                            5.6

                          	
                            Patriot Act Compliance

                          	 	
                            17

                          
	
                            5.7

                          	
                            Broker’s or Finder’s Fees

                          	 	
                            17

                          
	 
      	 	 
      
	
                            ARTICLE VI OTHER COVENANTS

                          	 	
                            17

                          
	
                            6.1

                          	
                            Conduct of Business Prior to the
      Closing

                          	 	
                            18

                          
	
                            6.2

                          	
                            Notification of Certain
    Matters

                          	 	
                            18

                          
	
                            6.3

                          	
                            Title; Additional Documents

                          	 	
                            18

                          
	
                            6.4

                          	
                            Other Consents

                          	 	
                            18

                          
	
                            6.5

                          	
                            Inspection and Access

                          	 	
                            18

                          
	
                            6.6

                          	
                            Confidentiality.

                          	 	
                            19

                          
	
                            6.7

                          	
                            Publicity

                          	 	
                            20

                          
	
                            6.8

                          	
                            Reasonable Best Efforts

                          	 	
                            20

                          
	
                            6.9

                          	
                            Reports

                          	 	
                            20

                          
	
                            6.10

                          	
                            Post-Closing Obligations of
      Seller

                          	 	
                            20

                          
	
                            6.11

                          	
                            No Other Representations or
      Warranties.

                          	 	
                            20

                          
	
                            6.12

                          	
                            Noncompetition

                          	 	
                            20

                          
	
                            6.13

                          	
                            Exclusivity

                          	 	
                            21

                          
	
                            6.14

                          	
                            Loan Guaranties

                          	 	
                            21

                          
	 
      	 	 
      
	
                            ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION
      OF BUYER TO CLOSE

                          	 	
                            21

                          
	
                            7.1

                          	
                            Accuracy of Representations and Warranties;
      Closing Certificate.

                          	 	
                            21

                          
	
                            7.2

                          	
                            Performance of Agreement

                          	 	
                            21

                          
	
                            7.3

                          	
                            No Adverse Change

                          	 	
                            21

                          
	
                            7.4

                          	
                            Conveyance of Property

                          	 	
                            21

                          
	
                            7.5

                          	
                            Title Insurance and Survey.

                          	 	
                            22

                          
	
                            7.6

                          	
                            Delivery of Closing
    Documents

                          	 	
                            25

                          
	
                            7.7

                          	
                            Licenses.

                          	 	
                            25

                          
	
                            7.8

                          	
                            Financing Contingency.

                          	 	
                            25

                          
	
                            7.9

                          	
                            Governmental Approvals.

                          	 	
                            26

                          
	
                            7.10

                          	
                            Third-Party Consents

                          	 	
                            26

                          
	
                            7.11

                          	
                            Amended and Restated Lease Agreement and Lease
      Guaranty.

                          	 	
                            26

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
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                      ARTICLE VIII CONDITIONS PRECEDENT TO
      THE  OBLIGATION OF SELLER TO CLOSE

                    	 	
                      26

                    
	
                      8.1

                    	
                      Accuracy of Representations and
      Warranties.

                    	 	
                      26

                    
	
                      8.2

                    	
                      Performance of Agreements

                    	 	
                      26

                    
	
                      8.3

                    	
                      Delivery of Closing
    Documents.

                    	 	
                      26

                    
	 
      	 
      	 	 
      
	
                      ARTICLE IX CLOSING

                    	 	
                      27

                    
	
                      9.1

                    	
                      Closing Date and Place.

                    	 	
                      27

                    
	
                      9.2

                    	
                      Deliveries of Seller

                    	 	
                      27

                    
	
                      9.3

                    	
                      Deliveries of Buyer

                    	 	
                      29

                    
	
                      9.4

                    	
                      Closing Costs

                    	 	
                      29

                    
	 
      	 
      	 	 
      
	
                      ARTICLE X INDEMNIFICATION

                    	 	
                      30

                    
	
                      10.1

                    	
                      General

                    	 	
                      30

                    
	
                      10.2

                    	
                      Indemnification by Seller

                    	 	
                      30

                    
	
                      10.3

                    	
                      Indemnification by Buyer

                    	 	
                      30

                    
	
                      10.4

                    	
                      Administration of
      Indemnification

                    	 	
                      30

                    
	 
      	 
      	 	 
      
	
                      ARTICLE XI DEFAULT AND
      TERMINATION

                    	 	
                      32

                    
	
                      11.1

                    	
                      Right of Termination

                    	 	
                      32

                    
	
                      11.2

                    	
                      Remedies upon Default.

                    	 	
                      33

                    
	
                      11.3

                    	
                      Specific Performance

                    	 	
                      33

                    
	
                      11.4

                    	
                      Obligations Upon
Termination

                    	 	
                      33

                    
	
                      11.5

                    	
                      Termination Notice

                    	 	
                      34

                    
	
                      11.6

                    	
                      Sole and Exclusive Remedy

                    	 	
                      34

                    
	 
      	 	 
      
	
                      ARTICLE XII MISCELLANEOUS

                    	 	
                      34

                    
	
                      12.1

                    	
                      Further Actions

                    	 	
                      34

                    
	
                      12.2

                    	
                      Notices

                    	 	
                      34

                    
	
                      12.3

                    	
                      Entire Agreement

                    	 	
                      36

                    
	
                      12.4

                    	
                      Binding Effect; Benefits

                    	 	
                      36

                    
	
                      12.5

                    	
                      Assignment

                    	 	
                      36

                    
	
                      12.6

                    	
                      Governing Law

                    	 	
                      36

                    
	
                      12.7

                    	
                      Amendments and Waivers

                    	 	
                      36

                    
	
                      12.8

                    	
                      Joint and Several

                    	 	
                      36

                    
	
                      12.9

                    	
                      Severability

                    	 	
                      36

                    
	
                      12.10

                    	
                      Headings

                    	 	
                      36

                    
	
                      12.11

                    	
                      Counterparts

                    	 	
                      37

                    
	
                      12.12

                    	
                      References

                    	 	
                      37

                    
	
                      12.13

                    	
                      Seller Disclosure Letter

                    	 	
                      37

                    
	
                      12.14

                    	
                      Attorneys’ Fees

                    	 	
                      37

                    
	
                      12.15

                    	
                      Section 1031 Exchange/Tax
      Planning

                    	 	
                      37

                    
	
                      12.16

                    	
                      Casualty

                    	 	
                      38

                    
	
                      12.17

                    	
                      Condemnation

                    	 	
                      38

                    
	
                      12.18

                    	
                      Limited Liability

                    	 	
                      38

                    

            

          

        

      

    

    
      
         

      

      
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                      12.19

                    	
                      Survival of Defined Terms

                    	 	
                      39

                    
	
                      12.20

                    	
                      Time of Essence

                    	 	
                      39

                    
	
                      12.21

                    	
                      No Third-Party Beneficiary

                    	 	
                      39

                    
	
                      12.22

                    	
                      WAIVER OF JURY TRIAL

                    	 	
                      39

                    

            

          

        

      

    

    

    EXHIBITS TO THIS
AGREEMENT

    

    
      	
              EXHIBIT
      A-1

            	
              Legal
      Description of the Property

            

    

    
      	
              EXHIBIT
      B-1

            	
              Due
      Diligence Request List

            

    

    
      	
              EXHIBIT
      C-1

            	
              Form
      of Amended and Restated Lease
Agreement

            

    

    
      	
              EXHIBIT
      D-1

            	
              Form
      of Lease Guaranty

            

    

    
      	
              EXHIBIT
      E-1

            	
              Form
      of Assignment and Assumption
Agreement

            

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    TABLE OF CONTENTS OF SELLER
DISCLOSURE LETTER

     

    SCHEDULES

    

    
      	
              Schedule 2.1(b)

            	
              Personal
      Property

            

    

    
      	
              Schedule 2.1(d)

            	
              Licenses

            

    

    
      	
              Schedule 4.7

            	
              Seller’s
      Insurance

            

    

    
      	
              Schedule 4.8

            	
              Litigation

            

    

    
      	
              Schedule 4.14

            	
              Rent
      Roll

            

    

    
      	
              Schedule 4.17

            	
              Condition
      of the Property

            

    

    

    EXHIBITS

     

    
      	
              EXHIBIT
      A

            	
              Legal
      Description of the Property

            

    

    
      	
              EXHIBIT
      B

            	
              List
      of Property Agreements

            

    

    
      	
              EXHIBIT
      C

            	
              List
      of Licenses Required for the
Property

            

    

    
      	
              EXHIBIT
      D

            	
              Form
      of Seller’s Counsel Opinion and Buyer’s Counsel
  Opinion

            

    

    
      	
              EXHIBIT
      E

            	
              Rent
      Roll

            

    

    
      	
              EXHIBIT
      F

            	
              Outstanding
      Citations

            

    

    
      	
              EXHIBIT
      G

            	
              Form
      of Audit Letter

            

    

    

      
        
           

        

        
          v

          
            

          

        

        
           

        

      

      PURCHASE AND SALE
AGREEMENT

       

      THIS PURCHASE AND SALE
AGREEMENT (this “Agreement”) is dated
the 31st day of
December, 2009 (the “Effective Date”), by
and between: MVI HEALTH CENTER,
LP, a Delaware limited partnership, or its successors or assigns (the
“Buyer”); and
SNF MESA VISTA, LLC, a
Texas limited liability company (the “Seller”).

       

      RECITALS:

       

      A.           Seller
is the owner of certain real, personal and intangible property constituting that
certain senior housing community known as Mesa Vista Inn Health Center, a 144
bed skilled nursing center located at 5756 N. Knoll Drive, San Antonio,
Texas  78130.

       

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

       

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

       

      ARTICLE
I

      TERMINOLOGY

       

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

       

      Adjustment
Amount:  The amount computed under Section 2.4
hereof.

       

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

       

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

       

      Buyer Ownership
Period:  Any period of time following Closing during which
Buyer or any of its Affiliates owns the Property or the Facility.

       

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

       

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

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

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

       

      Due Diligence
Period:  The period commencing on the Effective Date and ending
on December 31, 2009, during which time Buyer may, at reasonable times with
prior notice to Seller, (i) investigate the financial, legal, operational,
environmental and all other aspects of the Property as Buyer may desire, and
(ii) seek out sources of financing and/or investors, all in order to determine
whether to consummate the transactions contemplated by this Agreement or
terminate this Agreement.

       

      Escrow
Agent:  The Title Agent.

       

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

       

      Knowledge:  As
used in this Agreement, the term “knowledge” when used to refer to the knowledge
of Seller shall mean the actual knowledge of Robert S. Hicks, Lew Little, Jr.
and Steve Wood as of the Effective Date and the Closing or any matter which any
such person would have knowledge of upon inquiry of the executive director of
the Facility.

       

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

       

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

       

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

       

      Permitted
Exceptions:  Any (i) statutory liens that secure a
governmentally required payment, including without limitation Taxes, not yet
due, (ii) zoning regulations and restrictive covenants and easements of record
that do not detract in any material respect from the present use of the Property
and do not materially and adversely affect, impair or interfere with the use of
any property affected thereby, (iii) public utility easements of record,
and (iv) any other condition of title as may be approved by Buyer in writing
prior to Closing or as may be deemed approved by Buyer pursuant to the express
terms of Section
7.5.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Property Agreements:
All contracts, leases, agreements, commitments and other arrangements, and any
amendments, modifications, supplements, renewals and extensions thereof, used or
useful in the operation of the Property made or entered into by Seller or Tenant
as of the Effective Date, or between the Effective Date and the Closing in
compliance with this Agreement.

       

      Resident Agreements:
All occupancy, residency, leases, tenancy and similar written agreements entered
into with residents of the Property, including any amendments, modifications,
supplements, renewals and extensions thereof.

       

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

       

      Seller Ownership
Period:  Any period of time prior to Closing during which
Seller, Tenant or any of their respective Affiliates owned, operated or leased
the Property or the Facility.

       

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

       

      Tenant:  PM
Management – Babcock NC, LLC, a Texas limited liability company.

       

      Title
Agent:   The Title Agent is as follows:

       

      Heritage
Title Company of Austin, Inc.

      410
Congress Avenue, Suite 1500

      Austin,
Texas   78701

      Phone:
(512) 505-5000

      Fax:  (512)
505-5024

      Attn.:
Jennifer Ramburg

      E-mail:
jramberg@heritage-title.com

      

      Title
Insurer:   First American Title Insurance
Company

      

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

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
          
            	
                    Agreement

                  	
                    Preamble

                  
	
                    Amended
      and Restated Lease Agreement

                  	
                    Section
      7.11

                  
	
                    Assumed
      Obligations

                  	
                    Section
      2.2(b)

                  
	
                    Buyer

                  	
                    Preamble

                  
	
                    CERCLA

                  	
                    Section
      4.10

                  
	
                    Closing

                  	
                    Section
      9.1

                  
	
                    Initial
      Closing Date

                  	
                    Section
      9.1

                  
	
                    Environmental
      Laws

                  	
                    Section
      4.10

                  
	
                    Extended
      Closing Date

                  	
                    Section
      9.1

                  
	
                    Governmental
      Payor Programs

                  	
                    Section
      4.15

                  
	
                    Guaranty

                  	
                    Section
      7.11

                  
	
                    Improvements

                  	
                    Section
      2.1(a)

                  
	
                    Indemnified
      Party

                  	
                    Section
      10.4(a)

                  
	
                    Indemnifying
      Party

                  	
                    Section
      10.4(a)

                  
	
                    Land

                  	
                    Section
      2.1(a)

                  
	
                    Lease
      Guaranty

                  	
                    Section
      7.11

                  
	
                    Lease
      Guarantor

                  	
                    Section
      7.11

                  
	
                    OFAC

                  	
                    Section
      4.27

                  
	
                    Patriot
      Act

                  	
                    Section
      4.27

                  
	
                    Permitted
      Buyer-Assignee

                  	
                    Section
      12.5

                  
	
                    Permitted
      Exception

                  	
                    Section
      7.5(b)

                  
	
                    Personal
      Property

                  	
                    Section
      2.1(a)

                  
	
                    Property

                  	
                    Section
      2.1

                  
	
                    Proration
      Date

                  	
                    Section
      2.4(a)

                  
	
                    Proration
      Schedule

                  	
                    Section
      2.4(a)

                  
	
                    Purchase
      Price

                  	
                    Section
      2.3

                  
	
                    Real
      Property

                  	
                    Section
      2.1(a)

                  
	
                    Records

                  	
                    Section
      6.10

                  
	
                    Required
      Cure Items

                  	
                    Section
      7.5(b)

                  
	
                    SEC

                  	
                    Section
      6.6(c)

                  
	
                    Seller

                  	
                    Preamble

                  
	
                    Survey

                  	
                    Section
      7.5(e)

                  
	
                    Title
      Commitment

                  	
                    Section
      7.5(a)

                  
	
                    Title
      Defect

                  	
                    Section
      7.5(b)

                  
	
                    Title
      Notice

                  	
                    Section
      7.5(b)

                  
	
                    Transaction
      Costs

                  	
                    Section
      9.4

                  

          

        

      

       

      ARTICLE
II

      PURCHASE
AND SALE

       

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

       

      (a)           Real
Property.  All of Seller’s right, title, and interest in and to
that certain parcel of real property consisting of land (“Land”) and all
buildings, structures, fixtures and other improvements (“Improvements”)
located thereon.  The Land is more particularly described on Exhibit
A-1 attached hereto and made a part hereof.  The Land and
Improvements (collectively, the “Real Property”) shall
be deemed to include all rights-of-way, beneficial easements and appurtenances
related to the Real Property.  

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

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

       

      (c)           Records.  True
and complete copies of all the books, records, accounts, files, logs, ledgers,
journals and architectural, mechanical and electrical plans and specifications
in the possession or control of Seller or its Affiliates pertaining to or used
in connection with the Property, however such data is stored.

       

      (d)           Licenses.  The
Licenses and any renewals, extensions, amendments or modifications thereof
listed on Schedule
2.1(d) of the Seller Disclosure Letter.

       

      (e)           Claims and Causes of
Action.  Any and all of the rights of Seller and its Affiliates
in and to any claims or causes of action to the extent they are in the nature of
enforcing a guaranty, warranty, or a contract obligation to complete
improvements, make repairs, or deliver services to the Property.

       

      (f)           Intellectual
Property.  Any and all rights of Seller or its Affiliates with
respect to the use of (a) all trade names, trademarks, service marks,
copyrights, patents, jingles, slogans, symbols, logos, inventions, computer
software, operating manuals, designs, drawings, plans and specifications,
marketing brochures, the “MESA VISTA INN” name, logo, symbol, trademark and web
site, or other proprietary material, process, trade secret or trade right used
by Seller or its Affiliates in the operation of the Property and (b) all
registrations, applications and licenses for any of the
foregoing.  

       

      2.2         Assumption of
Liabilities.

       

      (a)           Buyer
is assuming no liabilities attributable to the operation or ownership of the
Property which accrued or occurred on or prior to the Closing, all of which
Seller shall pay, discharge and perform, or cause to be paid, discharged and
performed by Tenant in accordance with the Amended and Restated Lease Agreement,
when due. Specifically, without limiting the foregoing, Buyer shall not assume
(a) any claim, action, suit, or proceeding pending as of the Closing or any
subsequent claim, action, suit, or proceeding arising out of or relating to any
event occurring prior to Closing, with respect to the manner in which Seller
conducted its businesses on or prior to the Closing (b) any liability for Taxes
other than real property taxes for the year in which the Closing occurs (such
taxes being prorated as of Closing as hereinafter provided), or (c) any
liability under any Property Agreements.

       

      (b)           Buyer
acknowledges that, effective as of the Closing, Buyer shall assume and undertake
to pay, discharge, and perform only the liabilities and obligations of Seller
under the Lease as amended and modified by, and only to the extent provided for
in, the Amended and Restated Lease Agreement and, subject to the obligations of
the Tenant under the Amended and Restated Lease Agreement, the License listed on
Schedule 2.1(d)
of the Seller Disclosure Letter, to the extent such liabilities and obligations
arise during and relate to the period from and after the Closing (collectively,
the “Assumed
Obligations”).

       

      
        
          
          

        

        
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      2.3           Purchase
Price.  The purchase price for the Property shall be an amount
equal to THIRTEEN  MILLION AND NO/100 U.S. DOLLARS
($13,000,000.00), (the “Purchase Price”),
plus or minus (whichever is applicable) the Adjustment Amount which shall be
paid to Seller for the Purchased Property, all of which shall be paid by Buyer
at Closing via wire transfer of immediately available funds.

       

      2.4         Adjustment of Purchase
Price.

       

      (a)           All
income and expenses (including prepaid expenses) of the Property that are not
the obligation of the Tenant under the Amended and Restated Lease Agreement
shall be prorated on a daily basis between Seller and Buyer as of 11:59 p.m., on
the date (the “Proration Date”)
immediately preceding the Closing.  Such items to be prorated shall
include, without limitation:

       

      
        	
                 
      

              	
                (i)

              	
                Rent
      and other payments under the Amended and Restated Lease Agreement;
      and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                Real
      property taxes.

              

      

       

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

       

      (b)           To
the extent not otherwise provided for under the Amended and Restated Lease
Agreement, any escrow accounts held by any utility companies, and any cash
deposits made by Seller or Seller’s Affiliates prior to Closing to secure
obligations under Assumed Obligations shall be either paid to Seller or, if
assigned to Buyer, Seller shall receive a credit at Closing for any such
deposits.

       

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

       

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

       

      
        
          
          

        

        
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      (e)           The
parties agree that any amounts that may become due under this Section 2.4 shall be paid at
Closing as can best be determined.  A post-Closing reconciliation of
pro-rated items shall be made by the Buyer and Seller within ninety (90) days
after Closing and any amounts due at that time shall be promptly forwarded to
the respective party in a lump sum payment.  Any additional amounts
which may become due after such determination shall be forwarded at the time
they are received.  Any amounts due under this Section 2.4 which cannot be
determined within ninety (90) days after Closing shall be reconciled as soon
thereafter as such amounts can be determined.  Buyer and Seller agree
that each shall have the right to audit the records of the other for up to one
(1) year following Closing in connection with any such post-Closing
reconciliation.

       

      (f)           This
Section 2.4 shall survive the
Closing.

       

      2.5       Earnest Money
Deposit. Within two (2) business days after the Effective Date, Buyer
shall deposit TWENTY FIVE THOUSAND AND NO/100 U.S. DOLLARS ($25,000.00) (the
“Earnest Money
Deposit”) with Escrow Agent. 

       

      (a)           In
the event of a termination of this Agreement pursuant to Sections 11.1(b), 11.1(c), 11.1(e), or 11.2(a)(i) below,
$1,000.00 of the Earnest Money shall be immediately paid to Seller as
consideration for the execution of this Agreement (the “Independent Contract
Consideration”), and the balance of the Earnest Money Deposit shall be
immediately paid to Buyer.  In the event this Agreement is determined
to be unenforceable or void as a mutually binding contract by reason of the
existence of any condition, the indefiniteness of any provision, the lack of
mutuality, or any approval, election or discretion of Buyer with respect to any
contingency or other matter, then such fee shall be considered adequate
consideration for, and this Agreement shall be construed as, an option of Buyer
to purchase the Property enforceable in accordance with the terms set forth
herein.

       

      (b)           The
Earnest Money Deposit shall be nonrefundable to the Buyer and shall be paid to
Seller immediately upon a termination of this Agreement pursuant to Sections 11.1(d) or 11.2(b)
below.

       

      (c)           Upon
Closing, the Earnest Money Deposit shall be applied to the Purchase
Price.

       

      2.6         Escrow Agent.

       

      (a)           By
its execution and delivery of this Agreement, Escrow Agent agrees to be bound by
the terms and conditions in Section 2.5 of this Agreement
to the extent applicable to its duties, liabilities and obligations as “Escrow
Agent.”  Escrow Agent shall hold and dispose of the funds deposited
with the Escrow Agent pursuant to this Agreement (“Escrowed Funds”) in
accordance with the terms of this Agreement.  Escrow Agent shall incur
no liability in connection with the safekeeping or disposition of the Escrowed
Funds for any reason other than Escrow Agent’s breach of contract, willful
misconduct or gross negligence.  Escrow Agent shall be reimbursed by
Buyer and Seller, jointly and severally, for all out-of-pocket costs and
expenses incurred in connection with its obligations hereunder.  If
Escrow Agent is in doubt as to its duties or obligations with regard to the
Escrowed Funds, or if the Escrow Agent receives conflicting instructions from
Buyer and Seller with respect to the Escrowed Funds, the Escrow Agent shall not
be required to disburse the Escrowed Funds and may, at its option, continue to
hold the Escrowed Funds until both Buyer and Seller agree as to their
disposition, or until a final judgment is entered by a court of competent
jurisdiction directing their disposition, or the Escrow Agent may interplead the
Escrowed Funds in accordance with the laws of the State of
Florida.  Escrow Agent shall not be responsible for the preservation
of principal or any interest on the Escrowed Funds except as is actually earned,
or for the loss of any interest or principal resulting from the withdrawal of
the Escrowed Funds prior to the date interest is posted
thereon.  

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      ARTICLE
III

      DUE
DILIGENCE PERIOD

       

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

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      3.2           Buyer’s
Responsibilities.  In conducting any inspections,
investigations or tests of the Property, Buyer shall (i) not unreasonably
disturb the tenants or interfere with their use of the Property; (ii) not
materially or unreasonably interfere with the operation and maintenance of the
Property; (iii) not materially damage any part of the Property or any
personal property owned or held by any tenant or any third party; (iv) not
injure or otherwise cause bodily harm to Seller or its agents, guests, invitees,
contractors and employees or any tenants or their guests or invitees;
(v) comply in all material respects with all Applicable Laws; and
(vi) not permit any Liens to attach to the Property by reason of the
exercise of its rights hereunder.  If Buyer’s inspections and
investigations result in any material damage to the any part of the Property,
Buyer shall promptly repair and restore the Property to its former
condition.  Buyer shall be responsible for, and shall defend,
indemnify and hold Seller and the Property harmless from and against, any and
all claims, demands, injuries, damages, costs, expenses (including reasonable
attorney's fees), liens or liabilities incurred by, or asserted against, Seller
or the Property arising as the direct result of, or in any way directly arising
out of the activities with respect to Buyer's inspections and investigations of
the Property. The provisions of this Section shall survive the Closing or the
termination of this Agreement.

       

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

       

      ARTICLE
IV

      REPRESENTATIONS
AND WARRANTIES OF SELLER 

       

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

       

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

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      4.2         Consent of Third
Parties.  No consent or approval of any third party is required
as a condition to the entering into, performance or delivery of this Agreement
by Seller other than such consent as has been previously obtained.

       

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

       

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

       

      4.5         No
Judgments.  There are no judgments presently outstanding and
unsatisfied against the Property, the Seller or any of Seller’s
assets.

       

      4.6         No Governmental
Approvals.  No order, permission, consent, approval,
license, authorization,
registration or validation of, or filing with, or exemption by, any governmental
agency, commission, board or public authority is required to authorize, or is
required in connection with the execution, delivery and performance by Seller of
this Agreement or the taking of any action contemplated by this Agreement, which
has not been obtained.

       

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

       

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

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      4.9         Compliance with
Laws.  Except
with respect to environmental matters which are specifically addressed in Section 4.10 below, the
Property is presently, and has been during the Seller Ownership Period, used and
operated by Seller, and to Seller’s Knowledge was constructed, in compliance in
all respects with, and in no way in violation of, any Applicable Law affecting
the Property or any part thereof.  Neither Seller nor Tenant has
received notice of any such violation.

       

      4.10       Environmental
Matters.  Neither
Seller nor Tenant has generated, stored or disposed of any hazardous substance
at or on the Property except in accordance with Applicable Law, and neither
Seller nor Tenant has Knowledge of any previous or present generation, storage,
disposal or existence of any hazardous substance at or on the Property other
than in accordance with all Applicable Laws.  The term “hazardous
substance” shall mean “hazardous waste,” “toxic substances,” “petroleum
products,” “pollutants,” or other similar or related terms as defined or used
from time to time in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (“CERCLA”) (42 U.S.C.
§§ 1801, et
seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6921, et seq.), similar state
laws and regulations (the “Environmental Laws”)
adopted thereunder.  Neither Seller nor
Tenant has filed or been required to file any notice reporting a release of any
hazardous substance into the environment, and no notice pursuant to Section
103(a) or (c) of the CERCLA, 42 U.S.C. § 9601, et seq. or any other
Environmental Law has been or was required to be filed.  Neither
Seller nor Tenant has received any notice letter under any Environmental Law or
any notice or claim, and there is no investigation pending, contemplated, or to
Seller’s or knowledge threatened, to the effect that Seller or Tenant is or may
be liable for or as a result of the release or threatened release of hazardous
substance into the environment or for the suspected unlawful presence of any
hazardous waste on the Property.  Seller agrees to indemnify and hold
Buyer and its Affiliates harmless from any Loss resulting from a breach of this
Section 4.10.  Notwithstanding
the provisions of ARTICLE X, the
agreement to indemnify in this Section 4.10 shall survive
the Closing without limitation.

       

      4.11       Assessments.  There
are no special or other assessments for public improvements or otherwise now
affecting the Property, no pending or threatened special assessments affecting
the Property, and no contemplated improvements affecting the Property that may
result in special assessments affecting the Property.

       

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

       

      
        
          
          

        

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

       

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

       

      4.15       Medicare;
Medicaid.

       

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

       

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

       

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

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

      4.17       Condition of
Property.

       

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

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

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

     

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

     

    4.19        Utilities
Access.  The Real Property has water supply, storm and sanitary
sewer facilities, access to telephone, gas and electricity connections, fire
protection, drainage, means of ingress and egress to and from public highways
and, without limitation, other public utilities, all sufficient for normal
operations.  The parking facilities located on the Property comply
with all Applicable Laws or meet requisite exceptions or variances to such
laws.  All public utilities are installed and operating, and all
installation and connection charges have been paid in full.  All
streets and roads necessary for access to and full utilization of the Property,
and every part thereof, have been built, completed, dedicated, and accepted for
maintenance and public use by the appropriate governmental authorities or are
otherwise owned and maintained by local governments for public
use.  There is no fact or condition existing that would result or
could result in the termination or reduction of the current access from the
Property to the existing roads and highways or to sewer or other utility
services presently serving the Property.

     

    4.20        Zoning.  The
current use of the Property is permitted under the applicable municipal zoning
ordinances, or special exceptions, variances, or conditions thereto, and the
Property complies, to the extent required (including any waiver or
grandfathering), with all conditions, restrictions and requirements of such
zoning ordinances and all amendments thereto.

     

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

     

    4.22        Interests; Title.

     

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

     

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

    
      
         

      

      
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    4.23        Title
Encumbrances.  Seller is not in default under any of its
material obligations under any recorded agreement, easement or instrument
encumbering title to the Property, and there is no material default on the part
of any other party thereto.

     

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

     

    4.25        No New Survey
Matters.  Since the dates of the most recent surveys for the
Real Property obtained by Seller and provided to Buyer prior to Closing, no new
survey matters have arisen in connection with the Real Property which would
otherwise be required under the applicable ALTA/ACSM standards to be shown
thereon.

     

    4.26        Loans.  Except
for the loans secured by Liens against the Property as set forth in the Title
Commitment, there are no loans on the Property.

     

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

     

    4.28        Broker’s or Finder’s
Fees.    No agent, broker, investment banker or other
person or firm acting on behalf of or under the authority of Seller or any
Affiliate of Seller is or will be entitled to any broker’s or finder’s fee or
any other commission or similar fee, directly or indirectly, in connection with
the transactions contemplated by this Agreement.  This Section 4.28 shall
survive the Closing or the expiration or any termination of this
Agreement.

    

    4.29        Insolvency.  Neither
Seller nor any of its Affiliates have not (i) commenced a voluntary case or
had entered against them a petition for relief under any Applicable Law relative
to bankruptcy, insolvency, or other relief for debtors, (ii) caused,
suffered or consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator, or similar official in any federal, state or foreign
judicial or nonjudicial proceeding to hold, administer, and/or liquidate all or
substantially all of their respective assets, (iii) had filed against them
any involuntary petition seeking relief under any Applicable Law relative to
bankruptcy, insolvency, or other relief to debtors which involuntary petition is
not dismissed within sixty (60) days, or (iv) made a general assignment for
the benefit of creditors.

    
      
         

      

      
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    ARTICLE
V

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

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

     

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

     

    5.2          Consent of Third
Parties.  No consent or approval of any third party is required
as a condition to the entering into, performance or delivery of this Agreement
by Buyer other than such consent as has been previously obtained.

     

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

     

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

     

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

    
      
         

      

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

     

    5.7          Broker’s or Finder’s
Fees.  No agent, broker, investment banker, or other person or
firm acting on behalf of Buyer or any of its Affiliates or under its authority,
is or will be entitled to any broker’s or finder’s fee or any other commission
or similar fee, directly or indirectly, from Buyer or any of its Affiliates in
connection with the transactions contemplated by this Agreement.  This
Section 5.7
shall survive the Closing or the expiration or any termination of this
Agreement.

     

    ARTICLE
VI

    OTHER
COVENANTS

     

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

     

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

     

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

     

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

     

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

     

    (e)           Not
sell, lease, grant any rights in or to or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, the Property in whole or in part, except to
residents of the facility in the ordinary course of business using the current
forms of resident agreement utilized by Tenant and copies of which has been
provided to Buyer.

    
      
         

      

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

     

    (g)           Perform
all covenants, terms, and conditions and make all payments in a timely fashion,
under any loans secured by the Property.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    6.6          Confidentiality.

     

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

     

    (b)           Confidentiality of
Agreement.  Seller and Buyer will not disclose the economic
terms or existence of this Agreement to any third party without the prior
written consent of the other party, except that Seller and Buyer may disclose
such terms to their respective attorneys, accountants, consultants, engineers,
other advisers, members, shareholders, Seller’s existing lender, Buyer’s
potential investors or lenders, and as required by Applicable Law or by Section 7.7 without
such prior written consent.  This
Section
6.6(b) shall survive as to both Seller and
Buyer following Closing or in the event this Agreement is terminated prior to
Closing. Notwithstanding anything provided herein to the
contrary, Buyer and Seller are each expressly permitted to disclose the
existence of this Agreement to the Tenant, the Lease Guarantors and the Loan
Guarantors and are permitted to conduct discussions therewith regarding the form
of Amended and Restated Lease Agreement and the Lease Guarantor regarding the
form of Lease Guaranty.

     

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

     

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

    
      
         

      

      
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    6.7          Publicity.  The
parties agree that no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party prior to Closing except as
required by Applicable Law.

     

    6.8          Reasonable Best
Efforts.  Subject to the terms and conditions of this
Agreement, each party will use its commercially reasonable efforts to take all
actions and to do all things necessary, proper or advisable and in its power to
satisfy any condition for which such party is responsible hereunder and to
consummate and make effective as soon as practicable the transactions
contemplated by this Agreement.

     

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

     

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

    

    6.11        No Other Representations or
Warranties.

     

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

     

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

     

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

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

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

     

    6.14        Loan
Guaranties  The Loan Guarantors shall provide the Loan
Guaranties. This Section 6.14 shall survive Closing.

     

    ARTICLE
VII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF BUYER TO CLOSE

     

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

     

    7.1          Accuracy of Representations
and Warranties; Closing Certificate.  Except for any changes
permitted by the terms of this Agreement or consented to in writing by Buyer,
each of the representations and warranties made by Seller in this Agreement or
in any certificate delivered pursuant to Section 9.2 shall be
true and correct in all respects when made and shall be true and correct in all
respects at and as of the Closing as though such representations and warranties
were made or given on and as of the Closing.  In the event the Seller
provides Buyer with revisions to the Schedules and Exhibits contained in the
Seller Disclosure Letter after the Effective Date and prior to Closing, then the
condition to Buyer’s obligation to close contained in this Section 7.1 shall not
be deemed satisfied unless Buyer agrees to such revisions. In the event Buyer
proceeds to close without terminating this Agreement as a result of such
revisions, then such condition shall be deemed waived.

     

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

     

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

     

    7.4          Conveyance of
Property.  The Seller shall have conveyed to Buyer the Property
subject to the payment of the Purchase Price and the other conditions to the
Seller’s obligation to close contained in A.ARTICLE
VIII.

     

    
      
         

      

      
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    7.5          Title Insurance and
Survey.

     

    (a)           Seller
has provided Buyer with a commitment for an owner’s policy of title insurance
(the “Title
Commitment”) issued by the Title Insurer covering fee simple title to the
Property, in which the Title Insurer shall agree to insure, in the amount of the
Purchase Price, good and indefeasible title to the Property free from the
Schedule B standard printed exceptions and all other exceptions except for (i)
exceptions which, under applicable state rules and regulations, cannot be
deleted or modified and (ii) Permitted Exceptions, with such endorsements as
Buyer shall reasonably require and with insurance coverage over any “gap”
period.  Seller shall provide, or cause to be provided, to Buyer
complete, legible copies of all instruments noted as exceptions therein, and
shall be delivered promptly to Buyer upon receipt by Seller.

     

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

     

    (c)           In
the event Buyer timely gives a Title Notice to Seller and the Title Defects
specified therein are not cured on or before the Closing and Seller does not
timely notify Buyer that Seller will remove Title Defects within the applicable
time period as specified above,  Buyer shall have the option, as
Buyer’s sole and exclusive remedy, either to:

     

    
      	
               
      

            	
              (i)

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

            

    

    
      
         

      

      
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              (ii)

            	
              by
      giving Seller written notice of Buyer’s election, terminate this Agreement
      and receive a refund of the Earnest Money Deposit (less the Independent
      Contract Consideration), in which event no party shall have any further
      rights or obligations to the other hereunder, except for such rights and
      obligations that, by the express terms hereof, survive any termination of
      this Agreement.

            

    

     

    If Buyer
fails to give notice of its election of option (ii) within fifteen (15) days
after receipt by Seller of the Title Notice, Buyer will be deemed to have
accepted such Title Defect(s) or Required Cure Item(s) as Permitted
Exceptions.  However, if the Closing is extended pursuant to Section
9.1(b), Buyer obtains an updated Title Commitment reflecting additional items
not reflected on the original Title Commitment and Buyer provides an updated
Title Notice to Seller with respect to such additional items, then if Buyer
fails to give notice of its election of option (ii) above within fifteen (15)
days after receipt by Seller of such updated Title Notice, Buyer will be deemed
to have accepted such Title Defect(s) or Required Cure Item(s) as Permitted
Exceptions.  Notwithstanding the foregoing, nothing contained in
section shall limit the right of the Buyer to pursue any and all remedies
provided in Section
11.2 of this Agreement as a result of Seller’s default other than with
respect to this subsection (c).  If the Title Defect is the
encroachment of the building over the setback as identified on the survey and in
the Title Notice and so long as either of the parties is actively pursuing the
correction of such defect, then the fifteen (15) day period provided for above
in this paragraph shall, with respect to such Title Defect only, be extended
during the time when either such party is pursuing such correction, not to
exceed the Extended Closing Date.  Both parties agree to use their
best efforts in pursuing the correction of such Title Defect.

     

    (d)           In
the event (x) Buyer timely gives a Title Notice to Seller, and Seller gives
timely notice that Seller will cure and remove Title Defects, and such Title
Defects specified therein are not cured on or before the Closing, or (y) if
Seller does cure and remove a Required Cure Item on or before the Closing, Buyer
shall have the option, as Buyer’s sole and exclusive remedy, either
to:

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              by
      giving Seller written notice of Buyer’s election, pay any sum necessary to
      cure the Title Defect(s) Seller agreed to cure and remove or the Required
      Cure Item(s), as applicable, and deduct such amount from the Purchase
      Price in an amount not to exceed $150,000;
or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              by
      giving Seller written notice of Buyer’s election, terminate this Agreement
      and receive a refund of the Earnest Money Deposit (less the Independent
      Contract Consideration), in which event no party shall have any further
      rights or obligations to the other hereunder, except for such rights and
      obligations that, by the express terms hereof, survive any termination of
      this Agreement.

            

    

    
      
         

      

      
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    If Buyer
fails to give notice of its election of option (ii) or (iii) within fifteen (15)
days after receipt by Seller of the Title Notice, Buyer will be deemed to have
accepted such Title Defect(s) or Required Cure Item(s) as Permitted
Exceptions. However, if the Closing
is extended pursuant to Section 9.1(b), Buyer obtains an updated Title
Commitment reflecting additional items not reflected on the original Title
Commitment and Buyer provides an updated Title Notice to Seller with respect to
such additional items, then if Buyer fails to give notice
of its election of option (ii) or (iii) above within fifteen (15) days after
receipt by Seller of such updated Title Notice, Buyer will be deemed to have
accepted such Title Defect(s) or Required Cure Item(s) as Permitted Exceptions.
Notwithstanding the foregoing, nothing contained in section shall limit the
right of the Buyer to pursue any and all remedies provided in Section 11.2 of this
Agreement as a result of Seller’s default other than with respect to (x), (y),
or (z) above in this subsection (d).  If the Title Defect is the
encroachment of the building over the setback as identified on the survey and in
the Title Notice and so long as either of the parties is actively pursuing the
correction of such defect, then the fifteen (15) day period provided for above
in this paragraph shall, with respect to such Title Defect only, be extended
during the time when either such party is pursuing such correction, not to
exceed the Extended Closing Date.  Both parties agree to use their
best efforts in pursuing the correction of such Title Defect.

     

    (e)           Seller
has previously provided Buyer with copies of the most current existing boundary
survey for the Property.  Buyer may order one or more boundary surveys
for the Property (the “Survey”) prepared by
a registered land surveyor or surveyors satisfactory to Buyer.  Each
Survey shall (i) be completed in accordance with Buyer’s reasonable survey
requirements, and shall be certified to Buyer, the Title Insurer and any Lender
of Buyer by such surveyor; (ii) have one perimeter description for the
Property; (iii) show all easements, rights-of-way, setback lines,
encroachments and other matters affecting the use or development of the
Property; and (iv) disclose on the face thereof the gross and net acreage
of the Property.  It is agreed that Buyer's failure to obtain such
Survey shall not extend the time within which Buyer shall give the Title Notice
as provided above, and Buyer shall not be entitled to object to any matter
subject to the receipt of the Survey.   In the event Buyer
obtains a Survey of the Property other than the Survey provided by Seller to
Buyer, Buyer shall provide a copy of such Survey to Seller promptly after
Buyer's receipt of same.

     

    (f)       
    Notwithstanding anything in this Agreement to the
contrary, Seller covenants and agrees that at or prior to Closing, Seller shall
(i) pay or cause to be paid in full or cause to be canceled and discharged or
otherwise bond and discharge as liens against the Property all mechanics’,
materialmen’s, repairmen’s, contractors’ or other similar Liens which encumber
the Property as of the Effective Date created by, through or under Seller or
which may be filed against the Property after the Effective Date created by,
through or under Seller and on or prior to the Closing (ii) pay or cause to be
paid in full all past due ad valorem taxes and assessments of any kind
constituting a lien against the Property which are due and payable, and (iii)
pay or cause to be paid in full, or cause to be canceled and discharged all
security deeds or other security instruments encumbering the property and
created by or through Seller, except to the extent Buyer assumes any of the
obligations secured by such instruments, and all judgments which have attached
to and become a lien against the Property by, through or under
Seller.  In the event Seller fails to cause such liens and
encumbrances to be paid or released at or prior to Closing, Buyer shall be
entitled to the remedies provided for in A.7.5(c).

    
      
         

      

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

     

    (h)           Title
expenses shall be paid by the parties in accordance with Section 9.4
hereof.

     

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

     

    7.7          Licenses.

     

    (a)           To
the extent necessary and permitted or required by Applicable Laws, Seller shall
have completed the transfer and assignment of all the Licenses listed on Exhibit
C to the Buyer at or prior to the Closing.  To the extent that
any such Licenses are not transferable or assignable by Seller, the Buyer shall
have obtained, at the Buyer’s sole cost and expense, in the Buyer’s own name,
the Licenses, and Seller shall reasonably cooperate with the Buyer in obtaining
such Licenses at or prior to Closing, at no cost to Seller.  The Buyer
shall diligently pursue all required Licenses.  If any Licenses cannot
be obtained by the Buyer at or prior to the Initial Closing Date, Buyer shall
have the right to extend the Closing as provided for in Section
9.1.

     

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

     

    (c)           Sections 7.7(a) and
(b) shall survive Closing.

     

    7.8          Financing
Contingency.  Buyer shall have obtained a binding commitment in
a form acceptable to Buyer in its sole discretion from Plains Capital Bank
(“Lender”) for
financing secured by the Property in an amount not less than SEVEN MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($7,500,000) with a term of not less than
five (5) years, payments based on a twenty (20) year amortization, a fixed rate
of interest not to exceed seven percent (7.00%) and such other terms as are
satisfactory to Buyer in its sole discretion (the “Loan”).  The
guarantors of the existing loan secured by the Property (“Loan Guarantors”)
shall provide guaranties as additional security for the Loan on the terms
required by the Lender and approved  by the Loan Guarantors (or deemed
approved by the Loan Guarantors if not objected to in writing to Buyer prior to
Closing) (the “Loan
Guaranties”).

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

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

     

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

     

    7.11        Amended and Restated Lease
Agreement and Lease Guaranty.  Effective as of Closing, (a) the
existing lease between Seller and Tenant (the “Lease”) shall
be  amended and restated in the form attached as Exhibit
C-1 to this Agreement (the “Amended and Restated Lease
Agreement”), and (b) simultaneously therewith, the Lease shall be
assigned by Seller to Buyer at the Closing, and the Buyer shall assume from
Seller, Seller’s obligations thereunder solely to the extent such obligations
arise during and relate to the period from and after the Closing and solely to
the extent provided for in the Amended and Restated Lease
Agreement.  Seller shall cause any existing security deposit on the
existing lease to be transferred to Buyer by credit of the amount thereof
against the Purchase Price at Closing. Harden Healthcare, LLC, a Texas limited
liability company (“Lease Guarantor”),
shall execute and deliver a guaranty of Tenant’s obligations under the Amended
and Restated Lease Agreement in the form attached as Exhibit
D-1 to this Agreement (the “Lease
Guaranty”).

     

    ARTICLE
VIII

    CONDITIONS
PRECEDENT TO THE

    OBLIGATION
OF SELLER TO CLOSE

     

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

     

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

     

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

     

    8.3          Delivery of Closing
Documents.

     

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

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    ARTICLE
IX

    CLOSING

     

    9.1          Closing Date and
Place.

     

    (a)           Initial Closing
Date.  The Closing shall take place at
the offices of the Title Agent in Austin, Texas, on December 31, 2009 or at such
earlier or later date and time as may be agreed upon by the Buyer and Seller
(the “Initial Closing
Date”). At
Closing, Buyer shall deliver to the Title Company by wire transfer or other
immediately available funds acceptable to the Title Company the Purchase
Price.  It is expressly agreed that the funding of the Purchase Price
and the release of the net proceeds thereof to Seller shall, unless otherwise
agreed by Buyer and Seller, occur not later than 12:00 p.m., local Austin, on
the Initial Closing Date.

     

    (b)           Extended Closing
Date.  Notwithstanding the foregoing, if any of Buyer’s
conditions to Closing set forth in Article VII hereof are not satisfied or
otherwise waived by Buyer as of the Initial Closing Date, then Buyer shall have
the option, by written notice to Seller, to extend the Closing beyond the
Initial Closing Date until the date which is five (5) business days following
the date that all such conditions to Closing set forth in Article VII hereof are
satisfied, but in no event to exceed sixty (60) days beyond December 31, 2009
(the “Extended Closing
Date”).

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    (g)           Duplicate
counterpart originals of the Assignment and Assumption Agreement for the Lease
and Licenses from Seller, duly executed by Seller and joined by the Tenant in
the form attached hereto as Exhibit
E-1.

     

    (h)           All
third-party consents described in Section
7.10.

     

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

     

    (j)
           A duly
executed non-competition side letter agreement in a form acceptable to
Buyer.

     

    (k)           Duly
executed counterpart originals of the Amended and Restated Lease Agreement
executed by the Tenant.

     

    (l)
           Unaudited and unreviewed
historical financial statements and any other documents identified by Buyer that
are required to allow the Buyer to comply with any reporting, disclosure, or
filing requirements imposed upon the Buyer by the SEC with respect to the
transactions contemplated by this Agreement.  Additionally,
Seller shall provide Buyer, but without expense to Seller, with (a) an
audit letter in substantially the form as Exhibit
G attached to the Seller Disclosure Letter and made a part hereof, and
(b) copies of, or access to, such factual information as may be reasonably
requested by Buyer or its designated accountants, and in the possession or
control of Seller, to enable Buyer to file any filings required by the SEC in
connection with the purchase of the Property.

     

    (m)          Such
additional information, materials, affidavits and certificates as Buyer shall
reasonably request to evidence the satisfaction of the conditions to Seller’s
obligations hereunder, including without limitation, evidence that all consents
and approvals required as a condition to Buyer’s obligation to close hereunder
have been obtained, title affidavits, such affidavits and indemnities as the
Title Insurer may reasonably require to issue the Title Insurance policies, the
gap coverage and all endorsements and any other documents expressly required by
this Agreement to be delivered by Seller at Closing, or as may be reasonably
required by the Title Insurer at Seller’s sole cost and expense; provided, however, that to the
extent such items are required solely to issue any modifications, deletions or
endorsements requested by Buyer to the Title Insurance other than Required Cure
Item(s), then the cost thereof shall be borne equally by the parties pursuant to
Section 9.4 and
the parties shall each be separately and severally obligated for one-half (1/2)
of the obligations and liabilities under any indemnities required for such
requested modifications, deletions or endorsements other than Required Cure
Item(s).

     

    (n)           The
original of the Lease Guaranty, duly executed by the Lease
Guarantor.

     

    (o)           The
originals of the Loan Guaranties, duly executed by the Loan
Guarantors.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    (c)           A
duplicate counterpart original of the Assignment and Assumption Agreement for
the Lease and Licenses from Seller, duly executed by Buyer in the form attached
hereto as Exhibit
E-1.

     

    (d)           A
duly executed counterpart original of the Restated and Amended Lease Agreement
executed by Buyer.

     

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

     

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

     

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

     

    (h)           A
duly executed non-competition side letter agreement in a form acceptable to
Buyer.

     

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

     

    9.4          Closing
Costs.  Buyer and Seller shall each pay their respective
attorneys’ fees and expenses.  Seller shall pay all fees and expenses
associated with the payoff of the existing loan secured by the
Property.  All closing costs, including, without limitation, all costs
of title insurance, survey (collectively, “Transaction Costs”)
shall be borne equally by Buyer and Seller.  The cost sharing referred
to above shall occur only if the closing occurs.  If Closing does not
occur for any reason the provisions of Section 11.1 or 11.2, as applicable,
shall determine each parties responsibility for the costs incurred by the
parties with respect to this Agreement.

    
      
         

      

      
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    ARTICLE
X

    INDEMNIFICATION

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (b)           The
Assumed Obligations;

     

    (c)           The
ownership, operation or control of the Property during any Buyer Ownership
Period; and

     

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

     

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

    
      
         

      

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

     

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

     

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

     

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

     

    (e)           The
right to pursue indemnification as set forth in Sections 10.2(a) (other than
with respect to a breach of the representations contained in Section 4.15) and
10.3(a) shall survive the Closing hereunder for a period of eighteen (18) months
following the Closing, and the right to pursue indemnification as set forth in
all other Sections of this ARTICLE X shall
survive the Closing hereunder indefinitely.

    
      
         

      

      
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    (f)           Notwithstanding
anything to the contrary in this Agreement, the right to pursue indemnification
as set forth in this ARTICLE X shall be
actionable or payable only if valid claims for Losses, if any, collectively
aggregate more than Fifty Thousand and No/100 U.S. Dollars ($50,000) (the “Floor”); provided, however, that the
foregoing limitation shall not apply in the case of fraud on the part of Buyer,
Seller or any of their respective Affiliates, or to any claims arising under
Section 10.2(a)
(with respect to a breach of the representations contained in Section A.4.15),
Section
10.2(b), Section 10.2(c),
Section
10.3(b),
Section
A.10.3(c) or Section
A.10.3(d)
(none of which shall be limited in any manner whatsoever).  In
addition, Buyer agrees to concurrently seek recovery against Seller, under any
insurance policies, the Title Policy and other applicable agreements, and Seller
shall not be liable to Buyer to the extent Buyer’s claim is actually satisfied
from any sums recovered from such insurance policies, Title Policy or other
applicable agreements.  FINALLY, IN NO EVENT SHALL EITHER
PARTY EVER BE LIABLE FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES WITH RESPECT TO
ANY DEFAULT UNDER THIS AGREEMENT OR ANY AGREEMENT OR DOCUMENTS EXECUTED AT
CLOSING OTHER THAN IN THE EVENT OF FRAUD.

     

    ARTICLE
XI

    DEFAULT
AND TERMINATION

     

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

     

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

     

    (b)           By
written agreement of Seller and Buyer;

     

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

     

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

     

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

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

     

    11.2       Remedies upon
Default.

     

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

     

    
      	
               
      

            	
              (i)

            	
              Terminate
      this Agreement, receive from Seller reimbursement of all actual
      third-party out-of-pocket expenses incurred by Buyer in pursuing the
      transactions contemplated by this Agreement and pursue all legal remedies
      available at law against Seller for Buyer’s actual damages arising from
      Seller’s default hereunder; provided the total amount of such
      reimbursement and actual damages shall not exceed $65,000.00; provided, however, that
      the foregoing limitation on damages shall not apply in the event of a
      breach of Sections 6.6 or
      6.7;
      or

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    (b)           If
Buyer defaults on its obligation to close this transaction Seller’s exclusive
remedy shall be to terminate this Agreement, retain the Earnest Money Deposit
and receive from Seller reimbursement of all actual third-party out-of-pocket
expenses incurred by Seller in pursuing the transactions contemplated by this
Agreement and pursue all legal remedies available at law against Buyer for
Seller’s actual damages arising from Buyer’s default hereunder; provided the
total amount of such reimbursement and actual damages shall not exceed
$40,000.00, in addition to the return of the Earnest Money Deposit; provided, however, that the
foregoing limitation on damages shall not apply in the event of a breach of
Sections 6.6 or
6.7.

     

    11.3       Specific
Performance.  Seller specifically agrees that Buyer shall be
entitled, in the event of a default by Seller, to enforcement of this Agreement
by a decree of specific performance or injunctive relief requiring Seller to
fulfill its obligations under this Agreement.  If Buyer elects to
pursue an action for specific performance, and if Buyer is unable to obtain
specific performance as the result of the actions of Seller or its Affiliates
making specific performance impossible, then Buyer shall be entitled to seek
such other relief to which Buyer may be entitled, including an action of its
actual monetary damages.

     

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

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

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

     

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

     

    ARTICLE
XII

    MISCELLANEOUS

     

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

     

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

     

    
      
        	
                (a)

              	
                If
      to Seller, to:

              	
                SNF
      MESA VISTA, LLC

              
	 
      	 
      	
                c/o
      Capstar Partners, LLC

              
	 
      	 
      	
                1703
      West Fifth Street, Suite 800

              
	 
      	 
      	
                Austin,
      Texas  78703

              
	 
      	 
      	
                Telephone:  512-634-4942

              
	 
      	 
      	
                Facsimile:   512-524-3325

              
	 
      	 
      	
                E-mail:  bhanson@hardenhealthcare.com

              
	 
      	 
      	 
      
	
                with copies
      to:

              	
                Ed
      McHorse

              
	 
      	 
      	
                Graves,
      Dougherty, Hearon & Moody

              
	 
      	 
      	
                401
      Congress Avenue, Suite 2200

              
	 
      	 
      	
                Austin,
      Texas  78701

              
	 
      	 
      	
                Telephone:  (512)
      480-5750

              
	 
      	 
      	
                Facsimile:   (512)
      480-5850

              
	 
      	 
      	
                E-mail:
      emchorse@gdhm.com

              

      

    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    (b)

                  	
                    If
      to Buyer, to:

                  	
                    MVI
      HEALTH CENTER, LP

                  
	 
      	 
      	
                    c/o
      Cornerstone Growth & Income REIT, Inc.

                  
	 
      	 
      	
                    Attn:  Sharon
      C. Kaiser, Chief Financial Officer

                  
	 
      	 
      	
                    1920
      Main Street, Suite 400

                  
	 
      	 
      	
                    Irvine,
      CA 92614

                  
	 
      	 
      	
                    Telephone
      No.:  949.263.4326

                  
	 
      	 
      	
                    Telecopy
      No.:    949.250.0592

                  
	 
      	 
      	 
      
	 
      	
                    with copies
      to:

                  	
                    Servant
      Healthcare Investments, LLC

                  
	 
      	 
      	
                    Attn:
      Kevin Maddron

                  
	 
      	 
      	
                    1000
      Legion Place, Ste. 1650

                  
	 
      	 
      	
                    Orlando,
      FL 32801

                  
	 
      	 
      	
                    Telephone
      No.:  407.999.7772

                  
	 
      	 
      	
                    Telecopy
      No.:    407.999.7759

                  
	 
      	 
      	 
      
	 
      	
                    and:

                  	
                    Michael
      A. Okaty, Esq.

                  
	 
      	 
      	
                    Foley
      & Lardner LLP

                  
	 
      	 
      	
                    111
      N. Orange Avenue, Suite 1800

                  
	 
      	 
      	
                    Orlando,
      FL 32801

                  
	 
      	 
      	
                    Telephone:  407-423-7656

                  
	 
      	 
      	
                    Fax:  407-648-1743

                  
	 
      	 
      	
                    E-mail:  mokaty@foley.com

                  
	 
      	 
      	 
      
	
                    (c)

                  	
                    If
      to Title Agent or Escrow Agent, to:

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Heritage
      Title Company of Austin, Inc.

                  
	 
      	 
      	
                    Attn.:
      Jennifer Ramburg

                  
	 
      	 
      	
                    410
      Congress Avenue, Suite 1500

                  
	 
      	 
      	
                    Austin,
      Texas   78701

                  
	 
      	 
      	
                    Telephone:
      (512) 505-5000

                  
	 
      	 
      	
                    Fax:  (512)
      505-5024

                  
	 
      	 
      	
                    E-mail:
      jramberg@heritage-title.com

                  

          

        

      

    

    

    or such
other address as a party may from time to time notify the other parties in
writing (as provided above).  Any such notice, demand or communication
shall be deemed to have been given (i) if so sent by facsimile, upon receipt as
evidenced by the sender’s written confirmation of receipt, (ii) if so mailed, as
of the third (3rd)
business day after deposit in the mail, assuming actual receipt, (iii) if
emailed, when sent (provided that e-mail does not constitute delivery of any
communication that is a required notice or demand hereunder), and (iv) if so
delivered by courier, on the first (1st)
business day after the date delivered to the courier, assuming actual
receipt.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

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

     

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

     

    12.5       Assignment.  This
Agreement may not be assigned by any party prior to Closing without the written
consent of the Buyer and Seller, which consent may be given or withheld in each
such party’s sole and absolute discretion, except that Buyer may assign this
Agreement and its rights hereunder without the consent of Seller to an Affiliate
of Buyer (a “Permitted
Buyer-Assignee”).  In the event of such an assignment to a
Permitted Buyer-Assignee, Buyer shall not be released from any of its duties,
covenants, obligations or representations and warranties under this Agreement
and, from and after any such assignment, Buyer and such Permitted Buyer-Assignee
shall be jointly and severally liable under this Agreement, and from and after
any such assignment, the term “Buyer” shall be deemed to mean such Permitted
Buyer-Assignee under any such assignment.

     

    12.6       Governing
Law.  This Agreement shall in all respects be governed by and
construed in accordance with the laws of the state of Texas without regard to
its principles of conflicts of laws.  Venue for any dispute shall be
in Bexar County, Texas.

     

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

     

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

     

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

     

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

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

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

     

    12.17     Condemnation.  The
risk of any loss or damage to the Property by condemnation before the Closing
shall continue to be borne by Seller.  In the event any condemnation
proceeding is commenced or threatened, Seller shall promptly give Buyer written
notice thereof (in any event within five (5) days after Seller first has
knowledge of the occurrence of same), together with such reasonable details with
respect thereto as to which Seller may have knowledge.  If, prior to
Closing, there is a material taking by eminent domain at the Property, and as
Buyer’s sole and exclusive remedy with respect to such condemnation (but without
waiving any of Buyer’s rights hereunder, including, without limitation its
rights in A.ARTICLE
XI, arising as a result of a Seller default), either: (i) terminate this
Agreement by notice to Seller on or before the earlier of the Closing or the
tenth (10th) day
after receipt of such notice described above, in which event the Earnest Money
shall be returned to Buyer and, except as otherwise provided herein, no party
shall have any further liability to the party under this Agreement; or (ii)
proceed to Closing.  If Buyer elects to proceed and to consummate the
purchase despite said material taking, or if there is less than a material
taking prior to Closing, there shall be no reduction in or abatement of the
Purchase Price and Buyer shall be required to purchase the Property in
accordance with the terms of this Agreement, and Seller shall assign to Buyer,
without representation of warranty by or recourse against Seller, all of
Seller’s right, title and interest in and to any award made or to be made in the
condemnation proceeding (in which event Buyer shall have the right to
participate in the adjustment and settlement of any insurance claim relating to
said damage).  For the purpose of this Section 12.17, the
term “material”
shall mean any taking of in excess of five percent (5%) of the square footage of
the Property or ten percent (10%) of the Real Property associated with the
Property.  The parties’ obligations, if any, under this Section 12.17 shall
survive the expiration or any termination of this Agreement.

     

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

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

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

     

    12.20     Time of
Essence.  Time shall be of the essence with respect to all
matters contemplated by this Agreement. If the expiration of any time period set
forth herein falls on a Saturday, Sunday or legal holiday, such time period
shall be deemed to expire on the next day which is not a Saturday, Sunday or
legal holiday.   The last day of any period of time described
herein shall be deemed to end at 5:00 p.m., local Austin, Texas
time.

     

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

     

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

     

    (Signature
pages follow)

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              	
                      SELLER:

                    
	 
      
	
                      SNF MESA VISTA, LLC, a
      Texas limited liability company

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                        

                    
	 
      	 
      	 
      
	
                      BUYER:

                    
	 
      
	
                      MVI
      HEALTH CENTER, LP,

                    
	
                      a
      Delaware limited partnership

                    
	 
      	 
      	 
      
	
                      BY:

                    	
                      MVI
      Health Center GP, LLC,

                    
	 
      	
                      a
      Delaware limited liability company,

                    
	 
      	
                      as
      its General Partner

                    
	 
      	 
      
	
                      BY:

                    	
                      CGI
      Healthcare Operating Partnership,

                    
	 
      	
                      L.P.,
      a Delaware limited partnership,

                    
	 
      	
                      as
      its sole Member

                    
	 
      	 
      
	
                      BY:

                    	
                      Cornerstone
      Growth & Income Operating

                    
	 
      	
                      Partnership,
      L.P., a Delaware limited partnership,

                    
	 
      	
                      as
      its General Partner

                    
	 
      	 
      
	
                      BY:

                    	
                      Cornerstone
      Growth & Income REIT, Inc.,

                    
	 
      	
                      a
      Maryland corporation,

                    
	 
      	
                      as
      its General Partner

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                        

                    
	 
      	 
      	
                      Terry
      G. Roussel, President and

                    
	 
      	 
      	
                      Chief
      Executive
Officer

                    

            

          

        

      

    

    

    
      
        	
                LOAN
      GUARANTORS:

              
	
                (solely
      for purposes of Section 6.14 and

              
	
                Section
      7.8 only)

              
	 
      
	
                  

              
	 
      
	
                  

              
	 
      
	
                  

              

      

    

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    
      ACKNOWLEDGEMENT
OF RECEIPT OF AGREEMENT

    

    

    The undersigned acknowledges receipt of
the foregoing Purchase and Sale Agreement executed by Seller and Buyer this
31st
day of December, 2009.

    

    
      
        	
                HERITAGE
      TITLE COMPANY OF AUSTIN, INC.

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              

      

    

    
      
         

      

      
        41

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