Document:

Exhibit 10.42

 

ASSET PURCHASE
AGREEMENT

 

By and Among

 

AMERICAN REALTY CAPITAL VII, LLC

 

as
“Purchaser”

 

and

 

THE ALLEGRO AT ABACOA, L.L.C.,

THE ALLEGRO AT HELMWOOD, LLC,

COLLEGE HARBOR PROPERTIES, L.L.C.,

THE ALLEGRO AT WILLOUGHBY, L.L.C.,

THE ALLEGRO AT EAST LAKE, L.L.C.,
and

HARBOR TOWERS, L.L.C.

 

as
“Seller”

 

Property Names and Locations:

 

Allegro Jupiter 
– Jupiter, Florida

Allegro Stuart – Stuart, Florida

Allegro Elizabethtown – Elizabethtown, Kentucky

Allegro Tarpon Springs  – Tarpon Springs, Florida

Allegro St. Petersburg – St. Petersburg, Florida

 

Dated as of August 25, 2014

 

    	 

    	 

    

 

Table of
contents

 

	 	 	Page
	 	 	 
	ARTICLE 1 Definitions
    and Certain Rules of Construction	1
	 	 	 
	Section 1.1	Defined Terms	1
	Section 1.2	Certain Definitions	5
	Section 1.3	Rules of Construction	5
	 	 	 
	ARTICLE 2 Purchase and
    Sale of the Purchased Property	6
	 	 	 
	Section 2.1	Sale of Purchased Property	6
	Section 2.2	Purchased Property	6
	Section 2.3	Excluded Property	8
	Section 2.4	Title to Real Property and Surveys	8
	Section 2.5	Assumed Liabilities	11
	Section 2.6	Excluded Liabilities	11
	 	 	 
	ARTICLE 3 Purchase Price;
    Payment of Purchase Price; Allocation	12
	 	 	 
	Section 3.1	Purchase Price and Deposit	12
	Section 3.2	Payment of Purchase Price	13
	Section 3.3	Allocation of Purchase Price	13
	Section 3.4	Prorations	14
	 	 	 
	ARTICLE 4 Certain Other
    Covenants and Agreements	16
	 	 	 
	Section 4.1	Inspection and Due Diligence	16
	Section 4.2	Conduct of Business Prior to the Closing Date	18
	Section 4.3	Notification of Certain Matters	19
	Section 4.4	Employees; Accrued Vacation, Sick Pay, etc.	19
	Section 4.5	Confidentiality	20
	Section 4.6	Expenses and Taxes	21
	Section 4.7	Waiver of Bulk Sales and Indemnification	22
	Section 4.8	Exclusivity	22
	Section 4.9	Consents; Cooperation	22
	Section 4.10	Fines and Penalties	23
	Section 4.11	Further Assurances	24
	Section 4.12	Delivery of Schedules	24
	 	 	 
	ARTICLE 5 Closing	25
	 	 	 
	Section 5.1	Closing	25
	Section 5.2	Conditions to Seller’s Obligations	25
	Section 5.3	Conditions to Purchaser’s Obligations	25
	Section 5.4	Deliveries by Seller	26
	Section 5.5	Deliveries by Purchaser	28
	Section 5.6	Failure to Obtain Licenses and Permits	28
	Section 5.7	Non-Fulfillment of Closing Conditions	28
	Section 5.8	Post-Closing Actions	29
	Section 5.9	Termination During Due Diligence	29
	Section 5.10	No Partial Closing	30
	 	 	 
	ARTICLE 6 Representations
    and Warranties of Seller	30
	 	 	 
	Section 6.1	Organization and Standing	30
	Section 6.2	Valid and Binding Obligations	30
	Section 6.3	Title; Purchased Property Complete	30
	Section 6.4	Taxes and Tax Returns	31
	Section 6.5	Execution and Delivery	31

 

    	i

    	 

    

 

	Section 6.6	Contracts and Leases	31
	Section 6.7	Residency Agreements and Related Matters	32
	Section 6.8	Permits and Licenses	32
	Section 6.9	Insurance	32
	Section 6.10	Employees	33
	Section 6.11	Seller Benefit Plans	33
	Section 6.12	Litigation	34
	Section 6.13	Compliance with Laws	34
	Section 6.14	Financial Statements	35
	Section 6.15	Real Property	35
	Section 6.16	Environmental Matters	36
	Section 6.17	Brokers, Finders	36
	Section 6.18	FIRPTA	36
	Section 6.19	Solvency	36
	Section 6.20	Consent of Third Parties	37
	Section 6.21	No Governmental Approvals; Permits	37
	Section 6.22	Assessments	37
	Section 6.23	Title Encumbrances	37
	Section 6.24	Affordable Housing Units	37
	Section 6.25	Loans	37
	Section 6.26	No Other Warranties	37
	 	 	 
	ARTICLE 7
    Representations and warranties of Purchaser	38
	 	 	 
	Section 7.1	Organization and Standing	38
	Section 7.2	Execution and Delivery	38
	Section 7.3	Solvency	38
	Section 7.4	Consent of Third Parties	39
	Section 7.5	No Governmental Approvals	39
	Section 7.6	Brokers, Finders	39
	 	 	 
	ARTICLE 8 Indemnification	39
	 	 	 
	Section 8.1	Indemnification by Seller	39
	Section 8.2	Indemnification by Purchaser	39
	Section 8.3	Indemnification Limits; Survival	40
	Section 8.4	Procedures Regarding Third Party Claims	41
	Section 8.5	General Qualifications on Indemnification	42
	Section 8.6	Exclusivity	42
	Section 8.7	Effective Upon Closing	42
	 	 	 
	ARTICLE 9 Default and Termination	43
	 	 	 
	Section 9.1	No Default Termination	43
	Section 9.2	Default by Purchaser	43
	Section 9.3	Default by Seller	43
	Section 9.4	Survival; No Right to Damages	44
	 	 	 
	ARTICLE 10 Miscellaneous	44
	 	 	 
	Section 10.1	Access to Books and Records after Closing	44
	Section 10.2	Notices	45
	Section 10.3	Good Faith; Cooperation	46
	Section 10.4	Assignment; Exchange Cooperation; Successors in Interest	46
	Section 10.5	No Third Party Beneficiaries	46
	Section 10.6	Severability	46
	Section 10.7	Purchaser Records Rights	46
	Section 10.8	Controlling Law; Integration; Amendment; Waiver	47
	Section 10.9	Time	47
	Section 10.10	Survival	47

 

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	Section 10.11	Eminent Domain -
Condemnation	47
	Section 10.12	Risk Of Loss	47
	Section 10.13	Attorneys’ Fees	48
	Section 10.14	Covenant Not to Compete	48
	Section 10.15	Waiver of Jury Trial	48
	Section 10.16	Construction	48
	Section 10.17	Execution in Counterparts	48

 

Exhibits

 

	Exhibit	 	Description
	 	 	 
	Exhibit A	 	Escrow Agreement
	 	 	 
	Exhibit B	 	Post-Closing Escrow Agreement
	 	 	 
	Exhibit C	 	Deed
	 	 	 
	Exhibit D	 	Bill of Sale and Assignment
	 	 	 
	Exhibit E-1	 	Post-Closing Management Agreement
	 	 	 
	Exhibit E-2	 	Transition Period Sublease 
	 	 	 
	Exhibit E-3	 	Operations Transfer Agreement
	 	 	 	 
	Exhibit F	 	Assumption Agreement	 
	 	 	 
	Exhibit G	 	Requested Diligence Materials

 

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Schedules

 

	Schedule	 	Title
	 	 	 
	Schedule 1.1(a)	 	Assumed Contracts and Leases
	 	 	 
	Schedule 1.1(c)	 	Legal Description of Purchased Real Property
	 	 	 
	Schedule 2.2(c)	 	Prepaids and Deposits 
	 	 	 
	Schedule 2.2(d)	 	Vehicles Included in Purchased Personal Property
	 	 	 
	Schedule 2.2(g)	 	Facility Trade Names
	 	 	 
	Schedule 2.4(a)	 	Permitted Title Exceptions
	 	 	 
	Schedule 2.4(g)	 	Licenses, Leases Easements and Other Rights Related to Real Property
	 	 	 
	Schedule 3.3	 	Purchase Price Allocation
	 	 	 
	Schedule 5.4(n)	 	Third Party Consents
	 	 	 
	Schedule 6.3	 	Material Assets or Rights Not Included in Purchased Property
	 	 	 
	Schedule 6.5	 	Execution and Delivery – No Contravention
	 	 	 
	Schedule 6.6	 	Contracts and Leases
	 	 	 
	Schedule 6.7	 	Residency Agreements; Refunds and Deposits; Resident Details
	 	 	 
	Schedule 6.8	 	Permits and Licenses
	 	 	 
	Schedule 6.9	 	Insurance; Three Year Claim History
	 	 	 
	Schedule 6.10	 	Employees, etc.
	 	 	 
	Schedule 6.11	 	Benefit Plans

 

    	-iv-

    	 

    

  

	Schedule 6.12	 	Litigation, etc.
	 	 	 
	Schedule 6.13	 	Compliance with Laws
	 	 	 
	Schedule 6.14	 	Financial Statements
	 	 	 
	Schedule 6.15	 	Real Property Compliance
	 	 	 
	Schedule 6.16	 	Environmental Matters
	 	 	 
	Schedule 6.20	 	Third Party Consents
	 	 	 
	Schedule 6.21	 	Government Approvals
	 	 	 
	Schedule 6.22	 	Assessments
	 	 	 
	Schedule 6.23	 	Title Encumbrances
	 	 	 
	Schedule 6.25	 	Loans
	 	 	 
	Schedule 10.4	 	Permitted Special Purpose Entity Assignees

 

    	-v-

    	 

    

 

ASSET
PURCHASE AGREEMENT

 

THIS ASSET PURCHASE
AGREEMENT (the “Agreement”) is made and entered into this 25th day of August, 2014 (the “Effective
Date”), by and among AMERICAN REALTY CAPITAL VII, LLC, a Delaware limited liability company (“Purchaser”)
and THE ALLEGRO AT ABACOA, L.L.C., a Florida limited liability company, THE ALLEGRO AT HELMWOOD, LLC, a Kentucky
limited liability company, COLLEGE HARBOR PROPERTIES, L.L.C., a Florida limited liability company, THE ALLEGRO AT WILLOUGHBY,
L.L.C., a Florida limited liability company, THE ALLEGRO AT EAST LAKE, L.L.C., a Florida limited liability company,
and HARBOR TOWERS, L.L.C., a Florida limited liability company (collectively, the “Seller”).

 

Recitals:

 

Seller desires to
sell, transfer and assign to Purchaser, and Purchaser desires to purchase from Seller, substantially all of the assets, properties
and business of Seller, consisting of the Purchased Property described herein.

 

This Agreement sets
forth the terms and conditions to which the parties have agreed.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the premises and the mutual promises set forth below, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

ARTICLE
1

Definitions and

Certain Rules of Construction

 

Section 1.1           Defined
Terms. The following capitalized terms shall have the meanings specified in this section. Other terms are defined in the text
of this Agreement, and throughout this Agreement, those terms shall have the meanings respectively ascribed to them.

 

“Assumed
Contracts and Leases” are those contracts, leases and agreements listed on Schedule 1.1(a) attached hereto,
to the extent assignable and for which any necessary third party consents have been obtained by Purchaser.

 

“Assumed
Liabilities” are (i) all of Seller’s obligations and liabilities under the Assumed Contracts and Leases which
arise or accrue at any time after 11:59 PM on the date immediately preceding the Closing Date; (ii) all of Seller’s obligations
with respect to accrued vacation and sick pay for employees to the extent of Purchaser’s obligations pursuant to Section
4.4(d); (iii) all of Seller’s obligations and liabilities under Residency Agreements, which arise or accrue at any time
after 11:59 PM on the date immediately preceding the Closing Date; and (iv) the Prepaids and Deposits described on Schedule
2.2(c).

 

“Average
Occupancy” means the trailing 30-day average occupancy of the available units within the Facilities.

 

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“Business”
means all aspects of the operation of each Facility as an assisted living facility, memory care facility, skilled nursing facility
and/or independent living facility, as applicable.

 

“Closing”
means the consummation of the transactions contemplated by this Agreement with respect to a Facility. Neither party will need
to be present at Closing, it being anticipated that the parties will deliver all Closing documents and deliverables in escrow
to the Escrow Agent (as defined herein) (or if both Purchaser and Seller agree, to Purchaser’s and/or Seller’s counsel)
prior to the date of Closing.

 

“Closing
Date” shall have the meaning set forth in Section 5.1 hereof.

 

“Current
Manager” means the current manager of the Business which operates aspects of the Business on Seller’s behalf,
specifically, Love Management Company, LLC, a Missouri limited liability company d/b/a ALLEGRO MANAGEMENT COMPANY.

 

“Environmental
Laws” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
§ 9601 et seq., Hazardous Materials Transportation Act, 49 U.S.C. § 1802, the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq., the Toxic Substance Control Act of 1976, as amended, 15 U.S.C. § 2601
et seq., or any other federal, state, local or other governmental legislation, statute, law, code, rule, regulation
or ordinance identified by its terms as pertaining to the protection of the environment, including laws relating to the treatment,
storage or disposal of Hazardous Substances, in each case as in effect on the Effective Date.

 

“Facilities”
means collectively the facilities known as:

 

(i)          Allegro
Jupiter located in Jupiter, Florida and consisting of approximately 79 independent living units, 42 assisted living units and
24 memory care units (also individually referred to as the “Jupiter Facility”);

 

(ii)         Allegro
Stuart located in Stuart, Florida and consisting of approximately 106 independent living units, 53 assisted living units and 36
memory care units (also individually referred to as the “Stuart Facility”);

 

(iii)        Allegro
Elizabethtown located in Elizabethtown, Kentucky and consisting of approximately 54 assisted living units and 13 memory care units
(also individually referred to as the “Elizabethtown Facility”);

 

(iv)        
Allegro Tarpon Springs located in Tarpon Springs, Florida and consisting of approximately 92 assisted
living units (also individually referred to as the “Tarpon Springs Facility”); and

 

(v)         Allegro
St. Petersburg located in St. Petersburg, Florida and consisting of approximately 81 independent living units, 73 assisted living
units and 52 skilled nursing units (also individually referred to as the “St. Petersburg Facility”).

 

Each of the Facilities
is referred to individually herein as a “Facility.”

 

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“Government
Program” means the federal Medicare program, any state Medicaid program, and such
other similar federal, state, or local reimbursement or governmental programs for which any Facility is eligible.

 

“Hazardous
Substance” means petroleum, including crude oil or any fraction thereof, flammable explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, any material containing polychlorinated biphenyls, and any of the substances defined
as “hazardous substances” or “toxic substances” or otherwise identified and regulated under any Environmental
Laws.

 

“Holdback
Amount” means an amount equal to THREE MILLION DOLLARS ($3,000,000.00) at Closing, which is thereafter subject to reduction
in accordance with the terms of Section 3.2(c) below.

 

“Improvements”
means all buildings, facilities, and other improvements constructed on the Purchased Property as of the date of Closing.

 

“Intellectual
Property” means all trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, licenses,
domain names, mask works, patents, patent applications, information and proprietary rights and processes.

 

“IRC”
means the Internal Revenue Code of 1986, as amended, and any regulations or guidance issued thereunder.

 

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

 

“Material
Adverse Change” means any occurrence between the Effective Date and the Closing Date which results in a material adverse
change in the assets, financial condition, or results of operations of any Facility or the St. Petersburg Raw Land, taken as a
whole.

 

“Operator”
means the current, licensed operator of each Facility, specifically,

 

(vi)        The
Allegro at Abacoa, L.L.C. with respect to the Jupiter Facility;

 

(vii)       The
Allegro at Willoughby, L.L.C. with respect to the Stuart Facility;

 

(viii)      The
Allegro at Helmwood, LLC with respect to the Elizabethtown Facility;

 

(ix)         The
Allegro at East Lake, L.L.C. with respect to the Tarpon Springs Facility;

 

(x)          The
Allegro at College Harbor, L.L.C. with respect to the St. Petersburg Facility;

 

“PEO”
means College Harbor Staffing, L.L.C., with whom Seller or the Current Manager has entered into an agreement covering one or more
employees or workers providing services to the Facility.

 

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“Permitted
Encumbrances” means (i) liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings
and which are satisfied or discharged of record at or prior to Closing pursuant to Section 2.4(f) below; (ii) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar liens arising in the ordinary
course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith
and by appropriate proceedings and which are satisfied or discharged of record at or prior to Closing pursuant to Section 2.4(f)
below;  (iii) liens for property owner or shared facility assessments not yet due or which are being contested in good
faith and by appropriate proceedings and which are satisfied or discharged of record at or prior to Closing pursuant to Section
2.4(f) below; and (iv) the Permitted Title Exceptions.

 

“Plans”
shall have the meaning set forth in Section 6.11.

 

“Post-Closing
Manager” means the contemplated manager of the Business on the Purchaser’s behalf following the Closing. The Post-Closing
Manager shall be Love Management Company, LLC, a Missouri limited liability company d/b/a ALLEGRO MANAGEMENT COMPANY.

 

“Post-Closing
Management Agreement” means the management agreement entered into by Purchaser and the Post-Closing Manager for the
management of each Facility from and after Closing each in substantially the form mutually agreed upon by the parties during the
Due Diligence Period and attached hereto as Exhibit E-1.

 

“Purchased
Personal Property” is the Purchased Property other than the Real Property, including intangible Purchased Property.

 

“Purchased
Property” is the property of Seller to be sold to Purchaser pursuant to this Agreement as set forth in Section 2.2
hereof.

 

“Real Property”
shall mean:

 

(xi)         with
respect to the Jupiter Facility that certain parcel of real property located at 1031 Community Drive, Jupiter, Florida and more
particularly described in Schedule 1.1(c)(i) attached hereto;

 

(xii)        with
respect to the Stuart Facility that certain parcel of real property located at 3400 Southeast Aster Lane, Stuart, Florida and
more particularly described in Schedule 1.1(c)(ii) attached hereto; 

 

(xiii)       with
respect to the Elizabethtown Facility that certain parcel of real property located at 108 Diecks Drive, Elizabethtown, Kentucky
and more particularly described in Schedule 1.1(c)(iii) attached hereto;

 

(xiv)      with
respect to the Tarpon Springs Facility that certain parcel of real property located at 1755 East Lake Road, Tarpon Springs, Florida
and more particularly described in Schedule 1.1(c)(iv) attached hereto;

 

(xv)       with
respect to the St. Petersburg Facility that certain parcel of real property located at 4600 54th Avenue South, St.
Petersburg, Florida and more particularly described in Schedule 1.1(c)(v) attached hereto; and

 

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(xvi)      that
certain parcel of approximately 4.01 acres of unimproved real property located at 54th Ave South, St. Petersburg, Florida,
also identified in the Pinellas County, Florida property records as Parcel #10.32.16.24283.001.0101 and more particularly described
in Schedule 1.1(c)(vi) attached hereto (the “St. Petersburg Raw Land”). 

 

in each instance together
with all the buildings, fixtures, structures, and improvements thereon, and all easements and rights of way serving or benefiting
such property.

 

“Residency
Agreement” means any agreement between Seller and an individual contracting for such individual’s residency at
a Facility, including without limitation any admissions agreements for residents.

 

"Schedule"
means any of the attachments to this Agreement now or hereafter made and identified as a Schedule on pages (iv) and (v) of this
Agreement.

 

“Seller’s
Knowledge” means (a) the knowledge of Laurence A. Schiffer, Robert B. Karn, Douglas S. Schiffer, and Mary F.
Rieser, following reasonable inquiry, in connection with the execution of this Agreement and the preparation of Schedules to this
Agreement prior to Closing; and (b) in preparation for and during the process of Closing, the knowledge of Laurence A. Schiffer,
Robert B. Karn, Douglas S. Schiffer, and Mary F. Rieser, following reasonable inquiry of and consultation with the Community Director
of each Facility.

 

“Seller Parties”
means collectively the Seller, Current Manager and the Operators.

 

Section
1.2           Certain Definitions.  For purposes of this
Agreement:

 

“herein,”
“hereunder,” “hereof,” “hereinbefore,” “hereinafter”
and other equivalent words refer to this Agreement in its entirety and not solely to the particular portion of this Agreement
in which such word is used, and references to “this article,” “this section,” “this
paragraph,” “this subparagraph” or similar references to a specific part of this Agreement shall
refer to the particular article, section, paragraph, subparagraph or specific part in which such reference appears;

 

“party”
or “parties” means each or all, as appropriate, of the entities who have executed and delivered this Agreement,
each permitted successor or assign of a party, and when appropriate to effect the binding nature of this Agreement for the benefit
of another party, any other successor or assign of a party; and

 

“person”
means any individual, sole proprietorship, partnership, joint venture, corporation, estate, trust, unincorporated organization,
association, limited liability company, institution or other entity, including any that is a governmental authority.

 

Section
1.3           Rules of Construction.  For purposes of this
Agreement:

 

(a)          “including”
and any other words or phrases of inclusion shall not be construed as terms of limitation, so that references to “included”
matters shall be regarded as non-exclusive, non-characterizing illustrations; “copy” or “copies”
means that the copy or copies of the material to which it relates are true, correct and complete;

 

(b)          “shall,”
“will,” and “agrees” are mandatory, and “may” is permissive;

 

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(c)          titles
and captions of or in this Agreement are inserted only as a matter of convenience and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any of its provisions;

 

(d)          whenever
the context so requires, the singular includes the plural and the plural includes the singular, and the gender of any pronoun
includes the other gender;

 

(e)          each
Exhibit and Schedule referred to in this Agreement and each attachment to any of them or this Agreement is hereby incorporated
by reference into this Agreement and is made a part of this Agreement as if set out in full in the first place that reference
is made to it; and

 

(f)          every
covenant, term and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or
against any party hereto, regardless of which party was more responsible for the preparation of this Agreement.

 

ARTICLE
2

Purchase and Sale of the Purchased Property

 

Section 2.1           Sale
of Purchased Property.   Subject to the provisions of this Agreement, Seller shall sell all of the Purchased
Property to Purchaser, free and clear of all Liens and liabilities whatsoever, except for the Assumed Liabilities and the Permitted
Encumbrances.

 

Section 2.2           Purchased
Property.  The Purchased Property shall include all of the assets of Seller used in, arising from or related to
the Business as of the Closing Date other than Excluded Property, including the following:

 

(a)          all
inventory and supplies on hand at each Facility on the Closing Date (including food, beverages, office and kitchen supplies);

 

(b)          all
of Seller’s right, title and interest in and to the Assumed Contracts and Leases, to the extent assignable;

 

(c)          all
pre-paid amounts paid by a resident pursuant to any Residency Agreement for or attributable to the periods from and after the
Closing Date as well as any security deposits paid to Seller as of the Closing Date under the Residency Agreements (to the extent
such deposits can be transferred in accordance with applicable law) together with any interest thereon to the extent such interest
is or may be payable to the residents (or their respective representatives, successors, heirs or assigns) at any time following
the Closing Date each as more particularly described on Schedule 2.2(c) (collectively “Prepaids and Deposits”);

 

(d)          all
of Seller’s tangible personal property (including without limitation equipment, furniture, fixtures, signage and vehicles
used in, arising from or related to the Business (including without limitation the vehicles listed and described in Schedule
2.2(d), which schedule details the Facility where each vehicle is located and used ) as of the Closing Date;

 

(e)          the
Real Property as more particularly described on Schedule 1.1(c) attached hereto and the Facilities described herein;

 

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(f)          subject
to applicable laws and regulations, all transferable licenses, permits, certificates, approvals, and other governmental or regulatory
authorizations necessary for or incident to the ownership or operation of the Purchased Property in the manner in which they are
owned and operated by Seller as of the Closing Date;

 

(g)          to
the extent the same (x) relate to the period from and after the date Seller commenced operations in the Facility and (y) are within
the possession or reasonable control of Seller: all original books, records, accounts, files, logs, ledgers, journals, and other
documents and other materials of Seller (or copies thereof) including any electronic data stored on disc, tape or other electronic
format relating to the ownership, use, or management of the Facility or its operations (although Seller may retain copies thereof
for the preparation of tax returns, compliance with applicable laws, and other business purposes) (and expressly excluding from
such obligation to deliver any materials concerning Seller's organizational structure, financing, capitalization, balance sheet,
and any proprietary information concerning the development decision making template utilized in selecting the site or establishing
a unit mix prior to commencement of construction of the Facility);

 

(h)          all
marketing and promotional materials in Seller’s possession or control, which relate exclusively to the Business, if any,
or the services they provide, to the extent of Seller’s rights in such materials, including without limitation brochures,
renderings, photographs and signage (although Seller may retain copies thereof for compliance with applicable laws), provided
that such materials as may contain Intellectual Property described in Section 2.3(g) below may only be retained or utilized
by Purchaser during the period set forth in the Post-Closing Management Agreement.

 

(i)          all
warranties and guarantees regarding the installation, application, manufacture, composition and/or inspection of the Purchased
Property, and all other manufacturer and third-party warranties and guarantees relating to any of the Purchased Property, to the
extent such warranties and guarantees remain in effect and are assignable by Seller;

 

(j)          all
telephone and facsimile numbers of each Facility;

 

(k)          all
goodwill of the Business as a going concern;

 

(l)          all
records of all residents at each Facility as of the Closing Date, whether or not such resident was in occupancy prior to or on
the Closing Date in the possession or control of Seller or the Current Manager, to the extent transfer to Purchaser is not prohibited,
and subject to Section 10.1;

 

(m)          all
intangible personal property of Seller, including all registrations, applications and licenses therefor, that is not specifically
included in the Excluded Property, to the extent assignable and for which any third party consents required for such assignment
have been obtained;

 

(n)          all
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 the Improvements, make repairs, or deliver services to the Purchased Property other than (i) claims for
damages or other monetary loss incurred by Seller prior to the Closing Date and (ii) claims relating to Excluded Liabilities or
Excluded Property; and

 

(o)          any
other tangible or intangible assets, property or rights of any kind or nature not otherwise described above in this Section
2.2 and now owned or hereafter acquired between the Effective

 

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Date and the Closing
Date by Seller and used in connection with the operation of the Business (other than Excluded Property and rights relating solely
to the Excluded Liabilities).

 

To the extent any of
the foregoing Purchased Property is available in electronic format, Seller shall provide Purchaser with same in such electronic
format, in addition to physical copies of same.

 

Section 2.3           Excluded
Property.         “Excluded Property” means the following
categories of properties, which although they may currently form part of the Business, are excluded from the Purchased Property:

 

(a)          cash,
cash equivalents or other investments (other than the Prepaids and Deposits);

 

(b)          Seller’s
accounts receivable for rent or services provided prior to 11:59 p.m. on the date immediately preceding the Closing Date;

 

(c)          Seller’s
operating agreements, minute books, membership ledgers and income tax records;

 

(d)          any
rights of Seller with respect to federal, state or local tax refunds or credits;

 

(e)          the
Seller Plans, the assets and insurance policies relating to the Seller Plans, and any records relating thereto;

 

(f)          all
contracts of insurance and claims and interests in any insurance, insurance claims, escrows, revenues or right to indemnity from
third parties or other rights relating to the Excluded Liabilities;

 

(g)          all
rights to the trade names of the Facilities, including those names listed in Schedule 2.3(g) attached hereto, and
all derivations thereof, including without limitation all Intellectual Property related to such name and all derivations thereof,
and all other Intellectual Property owned by the Seller Parties and necessary to the conduct of the Business as now conducted
by Seller (provided, however, that the Post-Closing Management Agreements shall provide for use of all such rights and Intellectual
Property by Purchaser during the terms of such Post-Closing Management Agreements and for a period of three (3) months following
termination thereof);

 

(h)          Seller’s
rights and interests under this Agreement; 

 

(i)          security
deposits and utility deposits, to the extent not added to the Purchase Price at Closing pursuant to Section 3.2, and any
refunds due to Seller under its Agreement with its existing PEO.

 

Section 2.4           Title
to Real Property and Surveys.   At Closing, Seller agrees to convey marketable and insurable fee simple title to
the applicable Real Property to Purchaser by special warranty deed (the “Deed”), subject only to the Permitted
Encumbrances. The legal description of the Real Property to be contained in the Deed shall be the same legal description as is
attached hereto in the applicable subsection of Schedule 1.1(c). In the event the legal description as disclosed
by the Survey, as defined in Section 5.4(a), differs from the legal description in the applicable subsection of Schedule
1.1(c), or the Initial Commitment reveals any errors or omissions in the legal descriptions, then Seller shall also provide
a quitclaim deed utilizing such Survey legal description.

 

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(a)          Purchaser
shall promptly order, at Seller’s expense, Stewart Title Guaranty Company (“Title Company”), an ALTA
Form 2006 Commitment (or such other form as is acceptable to Purchaser), with such endorsements as Purchaser shall reasonably
require and with insurance coverage over any “gap” period (the “Initial Commitment”) for an owner’s
title insurance policy (the “Title Policy”) in an amount no less than the Purchase Price allocated to the Real
Property evidencing that Seller is vested with fee simple title to the Real Property, free and clear of all liens, encumbrances,
exceptions or qualifications whatsoever save and except for (a) those exceptions specified as permitted exceptions listed on Schedule
2.4(a) attached hereto (the “Permitted Title Exceptions”), (b) those exceptions evidenced in writing
as being otherwise acceptable to Purchaser in its sole discretion which shall thereafter be deemed Permitted Title Exceptions,
and (c) those exceptions to title which are to be discharged by Seller at or before closing. The Initial Commitment shall also
evidence that upon the execution, delivery and recordation of the deeds to be delivered at Closing and the satisfaction of all
requirements specified in Schedule B, Section 1 of the Initial Commitment, Purchaser shall acquire fee simple title to the Real
Property, subject only to the Permitted Title Exceptions.

 

(b)          If
Purchaser or its attorneys shall determine that the Initial Commitment does not meet the requirements specified above, or that
title to the Real Property is unsatisfactory to Purchaser for reasons other than the existence of Permitted Title Exceptions or
exceptions which are to be discharged by Seller at or before Closing, then Purchaser shall notify Seller by the end of the Due
Diligence Period (as herein defined) of those liens, encumbrances, exceptions or qualifications to title which either are not
Permitted Title Exceptions, are unsatisfactory to Purchaser or are not contemplated by this Agreement to be discharged by Seller
at or before Closing, and any such liens, encumbrances, exceptions or qualifications shall be hereinafter referred to as “Title
Defects.” 

 

(c)          Purchaser,
at Purchaser’s expense, may order an update to the surveys of the Real Property (the “Surveys”) previously
provided to Purchaser, and Seller hereby grants Purchaser and Purchaser’s agents the right to access the Real Property as
may be reasonably required to perform such work upon reasonable advance notice to Seller. The Surveys shall be prepared by a land
surveyor duly licensed and registered as such in the state the Real Property is located, (i) shall be certified by such surveyor
to Purchaser, Seller, each parties’ legal counsel and the Title Company, (ii) shall reference the Initial Commitment file
number, (iii) shall set forth the legal description of the Real Property precisely as it appears in the Initial Commitment (or
the Initial Commitment must be endorsed so that the insured legal description mirrors the legal description in the Surveys, if
applicable), (iv) shall identify whether or not each matter referenced in the Initial Commitment applies to the Real Property,
(v) shall depict the boundaries of each such item that is capable of being depicted on the Surveys, (vi) shall depict any Improvements
located upon the Real Property, (vii) shall show all easements, rights-of-way, setback lines, encroachments and other matters
affecting the use or development of the Real Property (viii) shall include the original signature and seal of the surveyor, and
(ix) shall be in a form satisfactory to the Title Company to eliminate the standard survey exceptions from the title insurance
policy to be issued at Closing. Purchaser shall notify Seller in writing within ten (10) business days after receipt
of the Surveys of any Title Defects identified on the Surveys specifying any matters shown on the Surveys which was not set forth
on the survey previously delivered to Purchaser and which adversely affect the title to the Real Property and the same shall thereupon
be deemed to be Title Defects hereunder.

 

(d)          Within
five (5) business days of receipt from Purchaser of a written notice of any Title Defects, together with a copy
thereof, Seller shall notify Purchaser as to whether it will cure such objection, and if it elects to cure any such objection,
it shall in good faith diligently endeavor to satisfy or correct, at Seller’s expense, such objection on or before the date
of Closing to the satisfaction of Purchaser and the Title Company in such a manner as to permit the Title Company to either endorse
the

 

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Initial Commitment or
to issue a replacement commitment to eliminate the Title Defect therefrom. Failure of Seller to give such notice within five (5)
business day period shall be deemed to be an election not to cure such objection. In the event Seller does not elect to satisfy
or cure any objection of which it is notified, then within five (5) business days after receipt of written notice of Seller’s
election, or within five (5) business days after the expiration of Seller’s five (5) business day notification period if
Seller fails to give any such notice, Purchaser shall by written notice to Seller elect one of the following:

 

(i)          to
accept Seller’s interest in the applicable Purchased Property subject to such objections, in which event such title and
survey objections shall become part of the Permitted Title Exceptions, and to close the transaction contemplated hereby in accordance
with the terms of this Agreement; 

 

(ii)         to
terminate this Agreement in its entirety and receive a refund of the Deposit; or 

 

(iii)        The
failure of Purchaser to give written notice of its election to either accept the Purchased Property subject to such objections
or to terminate this Agreement within the applicable five (5) business day period shall be deemed an election to terminate this
Agreement and to receive a refund of the Deposit.

 

(e)          In
the event Seller elects in writing to cure any title or survey objection and thereafter is unable, after acting diligently and
in good faith, to effect such cure, on or before the date of Closing, then Purchaser shall have, as its sole remedy, the options
described in Section 2.4(d) above. Seller shall have no obligation under this Section 2.4(e) to expend monies or
to institute litigation to cure Title Defects except those which may be satisfied solely by the payment of money prior to or at
Closing and arising by, through, or under Seller (and not as the result of Purchaser's actions or wrongful omissions). 

 

(f)          Notwithstanding
anything in this Agreement to the contrary, Seller covenants and agrees that at or prior to Closing, Seller shall (i) pay in full
and cause to be canceled and discharged or otherwise bond and discharge as liens against the Purchased Property all mechanics’
materialmen’s, repairmen’s, contractors’ or other similar Liens which encumber the Purchased Property as of
the date hereof created by, through or under Seller or which may be filed against the Purchased Property after the date hereof
created by, through or under Seller and on or prior to the Closing Date (ii) except as set forth in Section 2.4(h) below
pay in full all past due ad valorem taxes and assessments of any kind constituting a lien against the Purchased Property which
are due and payable, and (iii) pay in full or cause to be canceled and discharged all security deeds or other security instruments
encumbering the Purchased Property and all judgments which have attached to and become a lien against the Purchased 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, Purchaser shall be entitled to pay such reasonable amount to the holder thereof as may be required to pay and cancel
same, and to credit against the Purchase Price the amount so paid.

 

(g)          Except
as set forth on Schedule 2.4(g), Seller has not granted any license, lease, easement or other right relating to
the use or possession of the Real Property, (except (i) under the Residency Agreements entered into by Seller in the ordinary
course of business between the Effective Date and the Closing Date); or (ii) as may be set forth in the Title Commitment,
and Seller agrees that it shall not grant any such right prior to Closing without the prior written approval of Purchaser, which
may be withheld in Purchaser’s sole and absolute discretion. 

 

(h)          Seller
hereby discloses that it is currently contesting the ad valorem tax assessment for the Facility located in Jupiter, in accordance
with applicable law (the “Jupiter Tax Contest”). In the

 

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event the Jupiter Tax
Contest has not been resolved prior to Closing and to the extent the requirements of such proceeding did not require Seller make
prepayment of the taxes being contested, Seller shall escrow with Seller's or Buyer's counsel (as may be agreed by the parties)
an amount equal to 125% of the unpaid taxes at issue in the Jupiter Tax Contest (the “Jupiter Tax Escrow”)
pending resolution of the Jupiter Tax Contest proceeding. The Jupiter Tax Escrow shall secure Seller’s obligation under
this Agreement to satisfy taxes assessed against the Jupiter Facility with regard to tax periods prior to the year of Closing.
Upon completion of the Jupiter Tax Contest and presentation to the escrow holder of the Jupiter Tax Escrow funds of reasonable
evidence of the results thereof, the Jupiter Tax Escrow shall be disbursed within ten (10) days, first to satisfy any tax obligations
to governmental authorities arising from the resolution of the Jupiter Tax Contest and then the remainder of the Jupiter Tax Escrow
funds to Seller. For the avoidance of doubt, the Seller’s obligation to pay and indemnify Purchaser for ad valorem taxes
for the Jupiter Facility for tax years other than the year of Closing shall not be limited to the amount of funds in the Jupiter
Tax Escrow.

 

Section 2.5           Assumed
Liabilities.   Subject to the terms and conditions of this Agreement, on the Closing Date, Purchaser shall assume
and agrees to pay, perform or discharge only the Assumed Liabilities. Other than the Assumed Liabilities, Purchaser shall not
assume any of Seller’s debts, obligations or liabilities, of any kind or nature, including without limitation any civil
claims or other legal proceedings or legal or regulatory investigations or actions arising out of or during Seller’s ownership,
use, operation or management of the Business or any of the Purchased Property or the Excluded Property, all of which Seller shall
pay, perform and discharge when due. Nothing in this Section 2.5 shall be deemed to preclude either party from contesting
any liability or obligation in good faith through the appropriate process.

 

Section 2.6           Excluded
Liabilities.

 

All of Seller’s
debts, obligations and liabilities, other than the Assumed Liabilities, including any liability, obligation, claim, action, suit,
or proceeding pending as of the Closing Date, or any subsequent claim, action, suit, or proceeding arising out of or relating
to any such other event occurring prior to the Closing, with respect to the ownership or operation of its businesses prior to
the Closing Date, including, without limitation, any obligation of Seller described in Section 2.5 above and any obligations of
the Seller Parties for compliance with applicable federal, state, county, and local tax laws or regulations, including the obligations
under such laws for the payment of taxes and the filing of tax returns, under Part 6 of Title I of ERISA and Section 4980B of
the IRC, as amended (commonly known as “COBRA”), the Seller Plans, the Fair Labor Standards Act, Title VII
of the Civil Rights Act of 1964, the Occupational Safety and Health Act, the Age Discrimination in Employment Act of 1967, the
Americans With Disabilities Act, the Family and Medical Leave Act, or state worker’s compensation and unemployment compensation
laws, as now or hereafter amended, and any liabilities related to any overpayment (regardless of reason for such overpayment),
adjustment of payments received or non-compliance under any Government Program, are collectively referred to herein as the “Excluded
Liabilities.”

 

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ARTICLE
3

Purchase Price; Payment of Purchase Price; Allocation

 

Section 3.1           Purchase
Price and Deposit. 

 

(a)          Purchase
Price. Subject to any adjustments and prorations expressly provided for in this Agreement, including those described in Section
3.4 (collectively, “Adjustments”), the purchase price (the “Purchase Price”) for the
Purchased Property shall be a total of One Hundred Seventy-Two Million Five Hundred Thousand and No/100 U.S. Dollars ($172,500,000).

 

(b)          Deposit.
The parties acknowledge that within three (3) business days after the Effective Date, if the Closing has not occurred and
this Agreement has not been terminated in accordance with its terms, if Purchaser has not theretofore elected to terminate this
Agreement pursuant to Section 4.1, Purchaser shall deliver to Stewart Title Guaranty Company (or any other mutually acceptable
escrowee) (the “Escrow Agent”) Three Million and No/100 U.S. Dollars ($3,000,000) (the “Deposit”).
The term “Deposit” shall mean the Deposit, if and when the Deposit is made. The Escrow Agent shall hold the Deposit
in a non-interest bearing account pursuant to an escrow agreement in the form attached hereto as Exhibit A.

 

(c)          The
Deposit shall be paid and returned to Purchaser upon the occurrence of the circumstances described in Section 2.4(d)(ii),
Section 2.4(e), Section 4.10(b),  Section 5.9, Section 9.1, Section 9.3(d), Section 10.11
and Section 10.12 in each instance, upon proper written demand of Purchaser to Seller and the Escrow Agent stating
the reason for such termination and referencing the section of this Agreement providing Purchaser with the right to do so. Upon
receipt of such written demand by Seller, Seller and Purchaser shall direct the Escrow Agent, in writing, to pay and disburse
the Deposit immediately to Purchaser (whereupon this Agreement shall terminate and neither party shall have any further rights
or obligations hereunder, except as otherwise expressly provided herein).

 

(d)          The
Deposit shall be paid to Seller: (i) at the Closing, should the Closing occur, in partial satisfaction of the Purchase Price as
provided in Section 3.2(b) hereof; or (ii) as liquidated damages (and not as a penalty) under the circumstances described
in Section 9.2. In each such instance, Seller and Purchaser shall direct the Escrow Agent, in writing, to pay and disburse
the Deposit immediately to Seller (whereupon this Agreement shall terminate and neither party shall have any further right or
obligations hereunder, except as otherwise expressly provided herein). 

 

(e)          Without
limiting Purchaser’s other rights and remedies hereunder, Purchaser may terminate this Agreement for any reason or for no
reason whatsoever during the Due Diligence Period (as herein defined) with respect to all (but not less than all) of the Facilities
and the St. Petersburg Raw Land, and upon any such termination the Deposit shall be returned to Purchaser. 

 

(f)          For
all purposes under this Agreement, the portion of the Deposit attributable to each Facility (or, as applicable, the St. Petersburg
Raw Land) shall be equal to the pro-rata portion of the Deposit determined proportionally with respect to the portion of the Purchase
Price allocated to the applicable Facility or the St. Petersburg Raw Land pursuant to Section 3.3 below.

 

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Section 3.2           Payment
of Purchase Price.  The Purchase Price shall be paid by Purchaser, at Closing, as follows:

 

(a)          The
Purchase Price, as adjusted for any prorations pursuant to Section 3.4 below, and credits and additions described in Section
3.2(b) below, shall be paid at Closing by wire transfer in accordance with wire instructions provided by Seller at least three
(3) business days before Closing.

 

(b)          Purchaser
shall receive a credit against payment of the Purchase Price by the amount of (i) the Deposit, (ii) the accrued vacation
and sick pay amounts included in the Assumed Liabilities, and (iii) unless otherwise paid by Seller, the
amounts to be paid by Seller under Section 2.4(a) and Section 4.6(b) of this Agreement. If, at Purchaser’s
request, Seller leaves any of Seller’s security deposits or utility deposits in place following Closing, then the amount
of any such security deposit or utility deposit shall be added to the Purchase Price and paid to Seller pursuant to Section
3.2(a). 

 

(c)          Purchaser
shall deposit the Holdback Amount into an interest-bearing escrow account with the Escrow Agent pursuant to an Escrow Agreement
in substantially the form attached hereto as Exhibit B (the “Post-Closing Escrow Agreement”).
The funds held pursuant to the Post-Closing Escrow Agreement shall be available according to the terms of the Post-Closing Escrow
Agreement to secure any obligations of Seller to Purchaser hereunder, including without limitation Seller’s obligations
pursuant to Section 3.4(d) and Section 8.1 hereof. 

 

(i)          In
the absence of claims for specific identified unpaid liabilities or obligations of Seller which are within the purview of the
Post-Closing Escrow Agreement, the total anticipated unpaid exposure for which exceeds One Million Five Hundred Thousand Dollars
($1,500,000.00) in the aggregate, the Holdback Amount shall be reduced to One Million Five Hundred Thousand Dollars ($1,500,000.00)
at the end of the ninth (9th) calendar month following the Closing Date and the remainder of the initial undisbursed Holdback
Amount in excess of such amount shall be promptly released to Seller.

 

(ii)         The
total amount of the Holdback Amount theretofore undisbursed pursuant to the terms of the Post-Closing Escrow Agreement shall be
promptly released to Seller at the end of the fourteenth (14th) calendar month following the Closing Date, less any amounts claimed
by Purchaser prior to such distribution date, which shall be held in accordance with the terms of the Post-Closing Escrow Agreement
until finally adjudicated.

 

(d)          Purchaser
shall assume the Assumed Liabilities and the parties shall indemnify each other from any liability or obligation in connection
with the same in accordance with the terms of the assignment and assumption agreement attached hereto as Exhibit F.

 

Section
3.3           Allocation of Purchase Price.

 

(a)          With
respect to the individual Facilities and the St. Petersburg Raw Land, the Purchase Price shall be allocated as follows:

 

	Facility	 	Purchase Price Allocation	 
	Jupiter Facility	 	$	53,755,132	 
	Stuart Facility	 	 	66,722,874	 
	Elizabethtown Facility	 	 	8,743,402	 

  

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	Tarpon Springs Facility	 	 	17,732,405	 
	St. Petersburg Facility	 	 	22,546,188	 
	St. Petersburg Raw Land	 	 	3,000,000	 
	Total:	 	$	172,500,000	 

 

Any adjustments
to the Purchase Price provided herein that are attributable solely to one or more particular Facilities (or, as applicable, the
St. Petersburg Raw Land) shall result in a pro rata adjustment of the Purchase Price allocated to such Facilities (or, as applicable,
the St. Petersburg Raw Land).

 

(b)          Additionally,
the parties acknowledge that the transactions contemplated hereunder must be reported in accordance with Section 1060 of the IRC.
The parties shall report the transactions contemplated hereunder for all purposes in accordance with the purchase price allocation
set forth on Schedule 3.3 hereto, which schedule the parties acknowledge and agree will be completed during the
Due Diligence Period. The parties shall share information and cooperate to the extent necessary to permit the transactions to
be properly, timely, and consistently reported. 

 

(c)          During
the Due Diligence Period and as a condition to Seller's obligation to proceed to Closing, the parties shall in good faith agree
upon specific allocations of the Purchase Price amongst the following classifications of property and further allocated amongst
the entities comprising Seller: (i) Real Property (land, buildings, fixtures), (ii) tangible personal property, other than motor
vehicles, (iii) motor vehicles, and (iv) intangible personal property.

 

Section
3.4           Prorations.

 

(a)          The
following items shall be prorated between Seller and Purchaser as of 11:59 p.m. on the date immediately preceding the Closing
Date; prorations credited to Purchaser shall reduce the Purchase Price and prorations credited to Seller shall increase the Purchase
Price at Closing as follows:

 

(i)          city,
state, and county ad valorem taxes for the year in which the Closing occurs based on the ad valorem tax bills for the Purchased
Property, if then available for such year, or if not, then on the basis of the ad valorem tax bill for the Purchased Property
for the immediately preceding year. (If such proration is based on an ad valorem tax bill for the immediately preceding year and
should such proration prove to be inaccurate on receipt of the ad valorem tax bill for the Purchased Property for the year of
Closing, then either Seller or Purchaser, as applicable, may demand at any time after Closing a payment from the other party in
an amount sufficient to correct such malapportionment);

 

(ii)         sanitary
sewer taxes and utility charges, if any; provided, however, that Purchaser shall, prior to Closing, make arrangements
for its own utility services and accounts to the extent reasonably possible and sufficiently in advance of Closing so as to allow
the provider thereof to read all meters for utility charges as of the end of the last business day preceding the Closing Date
and terminate Seller's service without interruption of service to the Facility, in which case Seller shall be responsible for
and shall pay for all such charges first accruing or relating to the period prior to the Closing Date; 

 

(iii)        all
payment obligations under the Assumed Contracts and Leases; and

 

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(iv)        resident
rents and other revenues (including Prepaids and Deposits, if any).

 

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

 

(b)          Seller
shall receive all income from the Purchased Property attributable to the period prior to the Proration Date (as herein defined)
and shall, unless otherwise provided for in this Agreement, be responsible for all expenses of the Purchased Property attributable
to the period prior to 11:59 P.M. on the date immediately preceding the Closing Date (the “Proration Date”).
In the event Purchaser receives any payment from a resident for rent due for any period prior to the Proration Date or payment
of any other receivable of Seller, Purchaser shall forward such payment to Seller. For the first three (3) months following the
Proration Date, any payments received from a resident shall be allocated first to any current balances due from such resident
for the then-current month, and then toward the oldest sums due from such resident. After such three-month period, Purchaser may
allocate the entire amount of any payments received from a resident to current balances from such resident that have accrued subsequent
to the Proration Date and shall thereafter forward any additional amounts attributable to past-due amounts accruing prior to the
Proration Date to Seller. For clarity's sake with respect to the St. Petersburg Facility, the parties agree that amounts received
from third party payors such as Medicare and Medicaid shall be applied to the periods for which such payment is remitted as stated
thereon, and the amount thereof promptly forwarded to the party (Seller or Purchaser) entitled to the benefit of income from such
Facility for the period as to which such third party payment was paid.

 

(c)          Purchaser
shall receive all income from the Purchased Property attributable to the period from and after the Proration Date and shall, except
as otherwise provided for in this Agreement, be responsible for all expenses of the Purchased Property attributable to the period
from and after the Proration Date. In the event Seller or Seller’s affiliates receive any payment from a resident for rent
due (or any other payment due Purchaser) for any period from and after the Proration Date, Seller shall forward such payment to
Purchaser. 

 

(d)          The
parties agree that any amounts that may become due under this Section 3.4 shall be paid at Closing as can best be determined.
A post-Closing reconciliation of prorated items shall be made by the parties within ninety (90) days after the Closing Date and
any amounts due at that time shall be promptly forwarded to the respective party to whom such amounts are due 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 3.4 which cannot be determined within ninety (90) days after the Closing Date (such as, for example,
fiscal year-end real estate taxes) shall be reconciled as soon thereafter as such amounts can be determined. Purchaser and Seller
agree that each shall have the right to audit the records of the other in connection with any such post-Closing reconciliation.
Any payments made pursuant to this Section 3.4 shall be treated as a purchase price adjustment for income tax purposes.

 

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ARTICLE
4

Certain Other Covenants and Agreements

 

Section
4.1           Inspection and Due Diligence.

 

(a)          During
the Due Diligence Period, Purchaser (including its agents and representatives) shall be permitted to inspect the Business, the
Facilities, the St. Petersburg Raw Land and the Purchased Property. The “Due Diligence Period” for purposes
of this Agreement means a period extending until 5:00 p.m. Eastern on the fortieth (40th) day following the Effective
Date, or if such later day is not a business day, on the next business day following such day. The Purchaser shall not be entitled
to continue inspections after the expiration of the Due Diligence Period. Such inspections may include an independent appraisal
and environmental assessments (including Phase I assessments and Phase II assessments if Seller consents to any such Phase II
assessment which consent shall not be unreasonably withheld, conditioned or delayed), impact study and detailed architectural
and engineering inspections of buildings and mechanical systems located on the Real Property and any other inspections which may
reasonably be required by potential lenders or investors. Purchaser shall not conduct any drilling, boring, soil testing or other
physically intrusive inspections without Seller’s prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, if done in connection with any Phase II assessment. Seller shall allow Purchaser and its authorized
representatives reasonable access upon prior notice during normal business hours and during the Due Diligence Period to Seller’s
corporate level personnel, properties and records, shall permit examination and testing, and shall furnish Purchaser and its authorized
representatives such information concerning the Business, the Purchased Property, the Facilities and the St. Petersburg Raw Land
as Purchaser reasonably requests. Purchaser and its authorized representatives shall have the right to review and copy all such
books, accounts, records, agreements or other documents as it may reasonably deem advisable. Seller shall, upon reasonable request
by Purchaser, make available to Purchaser by electronic data room or otherwise, copies of all records, files, correspondence,
invoices, resident lists, supplier lists, blueprints, specifications, designs, drawings, business records and plans, operating
and financial data concerning the Seller's operations of the Facilities, environmental assessments, property reports, permits
and regulatory files and other data associated with or used by Seller in connection with its operation of the Business or its
operation of the Purchased Property, including without limitation all of the information requested in Exhibit G
of this Agreement to the extent Seller Parties or the Current Manager has possession and control of such information, and
in the form in which Seller maintains such information in the ordinary course of its business. Seller shall have no obligation
to prepare any summaries, abstracts, compilations or reports in connection with Purchaser’s investigation that Seller Parties
or the Current Manager do not maintain or compile in the ordinary course of Seller Parties’ or the Current Manager’s
business. For purposes of this Agreement, documents or information shall be deemed to have been “made available” to
Purchaser if copies have been delivered or viewed by Purchaser in tangible or electronic form, or if such documents or information
have been made available at each Facility or on an internet or electronic data site to which Seller has granted Purchaser or its
representatives access. Purchaser shall notify Seller in advance of any site visits by Purchaser or its contractors or representatives.
With regard to site visits:

 

(i)          Prior
to any site visits, Purchaser shall provide Seller with certificates of insurance evidencing the insurance coverage required pursuant
to Section 4.1(c) below;

 

(ii)         All
site visits shall be coordinated not less than seventy-two (72) hours in advance if access to the interior of a Facility is requested,
otherwise twenty-four (24) hours in advance;

 

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(iii)        All
site visits shall be coordinated through Douglas S. Schiffer or Seller’s counsel;

 

(iv)        Purchaser
shall not contact any Seller personnel, residents or service providers directly and Purchaser shall not discuss the Facility,
the Business, the pendency of the transactions contemplated by this Agreement, or this Agreement with Facility-level staff, including
without limitation the Community Director or Resident Services Director of any Facility; and

 

(v)         Seller
shall have the right, but not the obligation, to accompany Purchaser and Purchaser's representatives on any site visit.

 

(b)          Within
five (5) days of the Effective Date (the “Diligence Materials Due Date”), Seller shall provide (or shall have
provided) Purchaser with all of the materials in Seller’s or Manager’s possession or control listed in Exhibit
G of this Agreement (collectively, the “Requested Diligence Materials”). 

 

(i)          In
the event that Seller’s delivery of any Requested Diligence Materials is delayed beyond the Diligence Materials Due Date,
or in the event Purchaser has provided notice to Seller that any purported response to the requirements of this Section 4.1(b)
is insufficient in Purchaser’s reasonable discretion (which notice shall be specific in its description of allegedly
missing materials), the Due Diligence Period shall be extended by the total number of days which elapse between:

 

(1) the last
to occur of: (x) the Diligence Materials Due Date or (y) the date upon which Purchaser specifically identifies insufficiencies
in the Requested Diligence Materials provided by Seller; and

 

(2) the first
to occur of: (x) the date upon which all Requested Diligence Materials have actually been provided to Purchaser, or (y) the date
upon which Purchaser has been advised by Seller that such Requested Diligence Materials are not reasonably available to Seller,
as applicable).

 

(ii)         Seller's
delivery to Purchaser of a certificate signed by its Chief Financial Officer under oath that to the best of Seller's knowledge
all Requested Diligence Materials reasonably available to Seller have been made available to Purchaser shall be conclusive of
the occurrence of the Diligence Materials Due Date, in the absence of a knowing misrepresentation by Seller. 

 

(iii)        All
adjustments to the Due Diligence Period in accordance with this Section 4.1(b) shall be inclusive of the Diligence Materials
Due Date and the last applicable date of delivery, certification, or correction, as applicable.

 

(c)          Purchaser
shall pay all costs incurred for any such inspections of the Facilities, the St. Petersburg Raw Land, and the Purchased Property
initiated by Purchaser. Purchaser shall indemnify and hold Seller harmless from and against any and all claims for death of or
injury to persons or damage to property to the extent arising out of or as a result of the negligent or wrongful acts or omissions
of Purchaser, Purchaser’s contractors, agents, authorized representatives, or designees of Purchaser pursuant to the provisions
of this Section 4.1. Purchaser, as well as its consultants and contractors, shall at Seller’s

 

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request provide evidence
of sufficient insurance to protect Seller from any losses it might incur as a result of Purchaser’s activities incurred
in connection with such inspections.

 

(d)          The
parties hereto acknowledge that Seller may possess or have access to certain information subject to the Health Insurance Portability
and Accountability Act of 1996 and any regulations promulgated thereunder (“HIPAA”). Notwithstanding any other
provision of this Agreement, Seller shall have no obligation under this Agreement to disclose to Purchaser any information which
would violate or put Seller in a position of noncompliance with any city, county, state or federal privacy or security act, law,
or regulation or the provisions of HIPAA or which would result in Seller breaching any contractual provisions imposed on Seller
with respect to the requirements of HIPAA and/or any such city, county, state, or federal act, law or regulation.

 

(e)          Purchaser
may perform or cause to be performed a Phase I Environmental Site Assessment of any portion of the Real Property (the “Phase
I ESA”). Purchaser shall provide Seller with a copy of the Phase I ESAs within five (5) business days of completion
and receipt of each by Purchaser. Any subsequent amendments thereto will also be provided to Seller within five (5) business days
after completion and receipt by Purchaser thereof.

 

(f)          If
the Phase I ESA, or any update thereof, reveals areas of environmental concern that, in Purchaser’s sole opinion, warrant
further investigation, Purchaser may, at its discretion, request Seller’s consent to commence a Phase II Environmental Site
Assessment of the applicable portion of the Real Property (“Phase II ESA”; collectively, the “ESAs”).
A Phase II ESA consists of further investigation of recognized environmental conditions identified in the Phase I ESA including
sampling and analysis of soil and groundwater necessary to determine whether or not contamination has occurred. Seller’s
consent to conduct a Phase II ESA shall not be unreasonably withheld, conditioned or delayed. If Seller permits Purchaser to conduct
a Phase II ESA, Seller will be provided a copy of the Phase II ESA within five (5) days of completion and receipt by Purchaser.
Any subsequent amendments and/or reports relating to the Phase II ESA shall also be delivered to Seller and Purchaser.

 

(g)          The
costs of the Phase I ESA and the costs of the Phase II ESA and any updates thereof shall be paid by Purchaser. 

 

Section 4.2           Conduct
of Business Prior to the Closing Date.  Seller covenants and agrees with Purchaser that from the Effective Date
hereof through the Closing Date, except as otherwise expressly contemplated in this Agreement, unless Purchaser otherwise consents
in writing (which consent shall not be unreasonably withheld, conditioned or delayed) Seller shall, and shall cause the Operators
and Current Manager in their capacities as operators and managers of the Business to:

 

(a)          Use
good faith efforts to operate the Business in all material respects in the ordinary course of business in a commercially reasonable
manner, including (i) incurring expenses consistent with Seller Parties’ past practices in the operation of the Business
and (ii) using commercially reasonable efforts to preserve the Business’ present business operations, organization
and goodwill and its relationships with customers, employees, advertisers, suppliers and other contractors.

 

(b)          Operate
the Business and otherwise conduct business in all material respects in accordance with the terms or conditions of all applicable
licenses and permits, all applicable rules and regulations of the state or commonwealth in which each Facility is located, and
all other rules, regulations, laws, and orders of all governmental authorities having jurisdiction over any aspect of the operation
of the Business and all applicable insurance requirements.

 

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(c)          Maintain
the books, records, and financial statements for the Business consistent with past practices.

 

(d)          Timely
comply in all material respects with the Assumed Contracts and Leases.

 

(e)          Not
sell, lease, grant any rights in or to or otherwise dispose of or otherwise relinquish control of, or agree to sell, lease or
otherwise dispose of, the Purchased Property in whole or in part except for Residency Agreements entered into, amended, or terminated
in the ordinary course of business, and dispositions of assets that are in the ordinary course of business, and if material, are
replaced by similar assets of substantially equal or greater value and utility.

 

(f)          Take
commercially reasonable efforts to maintain the Purchased Property in the same condition as it exists as of the Effective Date,
except for ordinary wear and tear, in a manner consistent with past practices.

 

(g)          Not
default on any loans to Seller or secured by any Purchased Property which are not fully cured or satisfied at Closing.

 

(h)          Not
enter into any contracts (other than contracts which impose no obligation on Purchaser following the Closing or Residency Agreements
in the ordinary course of business), whether or not material, without the consent of Purchaser.

 

(i)          Not
make any alterations or improvements to the Real Property or make any capital expenditure with respect to the Real Property in
excess of $10,000 other than those that are currently budgeted for completion, or are required by law, necessary to preserve the
coverage under or comply with the terms of any insurance policy with respect to the Business or are in Seller’s business
judgment necessary to address emergency conditions or to maintain the goodwill and competitive standing of the Business.

 

(j)          Maintain
normal levels of inventory and supplies on hand for the Business (including medical supplies, food, beverages, office and kitchen
supplies), consistent with past practice and as necessary to comply with applicable laws and regulations.

 

(k)          Make
available to Purchaser copies of all internally generated monthly financial reports within a reasonable time following the close
of each accounting period during the Due Diligence Period for which they are generated.

 

(l)          Inform
Purchaser promptly regarding the resignation, termination or hiring of the Community Director or Resident Services Director, if
any, of any Facility.

 

Section 4.3           Notification
of Certain Matters.   Seller shall give prompt written notice to Purchaser, and Purchaser shall give prompt written
notice to Seller, to the extent either such party becomes aware of (i) the occurrence, or failure to occur, of any event that
would be likely to cause any of their respective representations or warranties contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the Closing Date, and (ii) any failure on their respective parts to
comply with or satisfy, in any material respect, any covenant, condition, or agreement to be complied with or satisfied by any
of them under this Agreement.

 

Section
4.4           Employees; Accrued Vacation, Sick Pay, etc.

 

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(a)          For
purposes of this Section 4.4, all references to employment by an entity include both direct employment by such entity,
employment by an affiliate of such entity, or employment through one or more employee leasing or similar arrangements that such
entity or its affiliate has entered into with a third party or by the PEO, and all references to Plans includes any such Plan
provided directly by the applicable entity, by their respective affiliates, or by any such employee leasing company under an agreement
with the above.

 

(b)          It
is anticipated by the parties that all Facility level employees of the Current Manager (who is also the Post-Closing Manager)
shall (at least initially) remain employed by the same company following the Closing. Accordingly, it is anticipated that all
Facility level employees shall remain participants in the current Seller Plans in accordance with the terms of the Seller Plans
and applicable law, including ERISA pursuant to the terms of the Post-Closing Management Agreements. Seller, Operator or the Current
Manager, as applicable, shall retain liability for all claims incurred by the Employees (and their enrolled dependents) under
the Seller Plans prior to the Closing Date. In accordance with the terms of the Post-Closing Management Agreement, Purchaser shall
be liable for all claims of the Employees (and their enrolled dependents) under the Seller Plans from and after the Closing Date.

 

(c)          Seller
shall be responsible for payment of all short- and long-term disability claims of Employees from disabilities arising prior to
the Closing Date, to the extent covered by Seller Plans. In accordance with the terms of the Post-Closing Management Agreement,
Purchaser shall be responsible for payment of all short- and long-term disability claims from disabilities of Employees incurred
on or after the Closing Date to the extent covered by the Seller Plans.

 

(d)          In
accordance with the terms of the Post-Closing Management Agreement and as shown on the Prorations Schedule, Purchaser shall be
responsible for all obligations to Employees with respect to vacation pay and sick pay accrued to the extent described on Schedule
6.10, as updated by the Seller through 11:59 PM on the date preceding the Closing Date. There shall be a clean cut-off
of payroll on the date preceding the Closing Date with respect to the Employees. Seller shall be responsible for, and shall pay
at Closing, all salary, wages, and other compensation, accrued with respect to the Employees in connection with the transaction
for services rendered to Seller through 11:59 P.M. on the date preceding the Closing Date. 

 

Section
4.5           Confidentiality.

 

(a)          Confidential
Information. Any and all non-public information of any type or description, including, but not limited to, financial statements
and projections of Seller, proprietary or trade secret information, whether written or verbal, or any information given to Purchaser
by Seller in connection with the transactions contemplated by this Agreement, is proprietary to Seller and confidential in nature,
and shall be treated as such by Purchaser, except with the prior written consent of Seller and except to the extent enforcement
of its terms and applicable law require public disclosure. This provision shall not apply following the Closing to any such information
pertaining to the Purchased Property or the Business, nor to any information that is or becomes publicly available through no
fault of Purchaser. Purchaser shall have the right to disclose any such information to its professional advisors, lenders, investors
and other third parties who need to know such information for the purposes of assisting Purchaser with the negotiation and consummation
of this Agreement, provided Purchaser advises such parties of their confidential obligations under this Agreement, and provided
Purchaser remains responsible for any violations by such parties. 

 

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(b)          Confidentiality
of Agreement. The terms of this Agreement shall remain confidential, except with the prior written consent of Seller and Purchaser
and except to the extent that enforcement of its terms or applicable law require public disclosure. Neither party shall make any
public announcement of the transactions contemplated herein without the express written approval of the other party, which approval
shall not be unreasonably withheld. This provision will not apply following the Closing; provided, however, that Seller shall
coordinate the timing of any public announcement made by Seller with Purchaser to allow Purchaser to comply with Securities and
Exchange Commission and other regulatory requirements applicable to Purchaser. Each party shall permit the other to review in
advance and comment on any public announcement of the Closing of the transactions contemplated herein. Notwithstanding the foregoing
to the contrary, Seller shall be permitted to disclose the existence of this Agreement and the pendency of the transactions contemplated
hereby in general terms in Seller Parties' internal communications to employees, staff, officers, and contractors and to Seller
Parties' then-current and prospective lenders and investors.

 

(c)          Return
of Confidential Information. Purchaser agrees that promptly upon the termination of this Agreement, whether by mutual termination
or otherwise (other than upon Closing), Purchaser shall cause all materials and property (originals and copies) of Seller to be
immediately returned to Seller, or, at Purchaser’s election, destroyed provided Purchaser provides written certification
of such destruction, provided that Purchaser shall be entitled to retain such information to the extent required in order to comply
with applicable law, regulation, bona fide document retention policy of Purchaser, or any public disclosure obligations promulgated
by the Securities and Exchange Commission applicable to Purchaser, or until any litigation between Purchaser and Seller arising
out of the termination of this Agreement has been finally resolved.

 

(d)          Agreed
Communication to Residents. Prior to Closing the parties shall agree in good faith upon the form of notice of the Closing
and assignment of their respective Residency Agreements to be provided to residents of the Facilities.

 

(e)          Survival
of Confidentiality. This Section 4.5 shall survive the Closing to the extent provided above and shall survive in the
event this Agreement is terminated prior to Closing.

 

(f)          Supersedes
Previous Agreements. The provisions of this Section 4.5 supersede any prior agreements between the parties relating
to confidentiality. 

 

Section
4.6           Expenses and Taxes.

 

(a)          Each
party shall pay its own expenses and costs incurred in connection with the negotiation and consummation of this Agreement and
the transactions contemplated by this Agreement.

 

(b)          Notwithstanding
the foregoing:

 

(i)          Purchaser
shall pay fees, sales and use taxes, and costs relating to the transfer of motor vehicles included in the Purchased Property;

 

(ii)         Seller
shall pay the real estate transfer tax, mansion taxes (if applicable) costs of recording the Deeds and all other filing and recording
costs unrelated to Purchaser's financing or ownership structure; 

 

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(iii)        Seller
shall pay the premiums or other costs attributable to the issuance of the Title Policy; 

 

(iv)        Purchaser
shall pay the cost of the Surveys;

 

(v)         Purchaser
shall pay all costs and expenses of the Escrow Agent selected by Purchaser (in its capacity as Escrow Agent only, and for the
avoidance of doubt, not in its capacity as the issuer of the Title Policy);

 

(vi)        Seller
shall pay any person who is entitled to any brokerage commission or finder’s fee in connection with any of the transactions
contemplated by this Agreement by reason of any act or omission of Seller, including the fees and commissions due to Vant-Age
Pointe Capital Management and Advisory, Inc. and KeyBanc Capital Markets Inc. and shall indemnify Purchaser and hold Purchaser
harmless against any claims for such commissions or finder’s fees; and

 

(vii)       Purchaser
shall pay any person who is entitled to any brokerage commission or finder’s fee in connection with any of the transactions
contemplated by this Agreement by reason of any act or omission of Purchaser, and shall indemnify Seller and hold Seller harmless
against any claims for such commissions or finder’s fees.

 

Section 4.7           Waiver
of Bulk Sales and Indemnification.  Purchaser hereby waives compliance by Seller and Seller hereby waives compliance
by Purchaser, with the requirements of any applicable bulk sales laws and similar laws, if and to the extent applicable. Seller
shall indemnify and hold harmless Purchaser from any and all claims, liabilities, or costs, including reasonable attorneys’
fees, arising out of the parties’ failure to comply with any bulk sales laws and similar laws applicable to the transactions
contemplated hereby as provided in Section 8.1. The foregoing indemnification shall survive the Closing.

 

Section 4.8           Exclusivity.
  During the period from the Effective Date to the Closing Date or sooner 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 Purchaser, concerning a potential transaction
involving the purchase and sale of the Business, any one or more Facilities, the St. Petersburg Raw Land, or any of the Purchased
Property, the purchase and sale of all or substantially all of the ownership interest of any one or more entities comprising the
Seller, or any transaction similar to the foregoing.

 

Section 4.9           Consents;
Cooperation.  Seller will use its reasonable good faith efforts prior to the Closing to obtain all consents that
may be required from third parties with respect to the Assumed Contracts and Leases and any of the other Purchased Property (other
than transfer of motor vehicle licenses, registrations, and tags) and Purchaser shall cooperate therewith. In the event Purchaser
desires any changes or modifications with regard to any of the Assumed Contacts or Leases, then Purchaser upon written notice
to Seller shall assume all responsibility for negotiating such modifications and obtaining any required consents in connection
therewith. Purchaser shall use its reasonable best efforts to diligently pursue the issuance or transfer of any of the governmental
licenses or permits required for Purchaser to operate the Business following the Closing, and Seller agrees to provide reasonable
cooperation and assistance to Purchaser in obtaining such licenses and permits. Notwithstanding the foregoing, (i) neither party
will be required to pay or commit to pay any amount to (or incur any liability or obligation to) a person or entity from whom
or which a consent may be required (other than payment by Seller of past due amounts under Assumed Contracts and Leases or past
due taxes, or payment by Purchaser of any fees or

 

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other costs imposed by governmental authorities
with respect to licenses and permits, or transfer fees, if any, required by the express terms of any Assumed Contracts and Leases)
or otherwise enter into or modify any agreement with such person or entity that involves any cost, liability or obligation, and
(ii) to the extent Purchaser determines, in its sole discretion, that the governmental licenses or permits required for the Purchaser
or its designee to operate the Business following the Closing will not be obtained by Purchaser or its designee prior to Closing,
Seller agrees to proceed to Closing and enter into a Transition Period Sublease (as defined herein) with Purchaser for the continued
operation of the Business by Seller or its affiliates, as applicable, until Purchaser or its designee obtains such licenses and
permits, and (iii) to the extent Purchaser has not obtained governmental licenses or permits required for the Purchaser or its
designee to operate the Business following the Closing within ninety (90) days of the expiration of the Due Diligence Period,
Seller and Purchaser agree to proceed to Closing and in connection therewith enter into a Transition Period Sublease for the continued
operation of the Business by Seller or its affiliates, as applicable, until Purchaser or its designee obtains such licenses and
permits, provided the term thereof shall not exceed the Post-Closing Management Agreement with the Post-Closing Manager for the
relevant Facilities and provided such Transition Sublease is permitted by law for all of the Business operations of each Facility.
Each of the parties have independently determined, based upon the advice of their own respective counsel, that the pre-merger
filing requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), do
not apply to the transactions contemplated under this Agreement.

 

Section 4.10         Fines
and Penalties. 

 

Seller covenants and agrees to cure
all violations and other deficiencies identified in writing by any federal, state, municipal, local or other governmental
or quasi-governmental authority (all such matters collectively the “Violations”)
relating to the Business, any Facility or Facilities, or the St. Petersburg Raw Land, pay
all penalties associated therewith and prepare and implement any plan of correction required
by any such authority. The Purchaser may stay any otherwise pending Closing in the event any uncured Violations exist until such
time as Seller has corrected any such Violations in full compliance with applicable laws, orders and directions to the extent
Seller is either obligated to cure or agrees in writing to cure the same in accordance with this Section 4.10. Penalties
and fines noticed to, levied upon, or outstanding against any Seller and/or any of the Facilities as of the Effective Date ("Existing
Fines") shall be the absolute obligation of the Seller and shall be paid at Closing
and as a condition to Purchaser's obligation to proceed to Closing. In the event the total to cure or discharge all Violations
other than Existing Fines would exceed a total cost to Seller of $250,000.00 or more in the aggregate, then Seller shall have
the right upon written notice to Purchaser to refuse to cure such Violations prior to Closing (other than the Existing Fines,
if any), whereupon, Purchaser may elect within ten (10) days following such notice of refusal from Seller to elect either to:

 

(a)          Accept
a credit of $250,000.00 at Closing from Seller for all Violations, other than the Existing Fines, have Seller pay the Existing
Fines, and proceed to Closing with no further adjustment of the Purchase Price or claim to any portion of the Holdback in connection
with such Violations, or 

 

(b)          Elect
to terminate this Agreement, in its entirety and receive a refund of the Deposit and, following any such termination, Seller
shall reimburse Purchaser for Purchaser’s actual third party expenses incurred by Purchaser in connection with its due diligence
on the Purchased Property; provided, however, such reimbursements shall not exceed Two Hundred Fifty Thousand and No/100 U.S.
Dollars ($250,000.00) in the aggregate for all Purchased Property.

 

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The
failure of Purchaser to give written notice of its election pursuant to Section 4.10(a) or Section 4.10(b) shall
within the applicable ten (10) day period shall be deemed an election to proceed under Section 4.10(a) above.

 

Section 4.11         Further
Assurances.  Each party covenants and agrees that, following the Closing, it will execute, deliver and acknowledge
(or cause to be executed, delivered and acknowledged), from time to time, at the reasonable request of the other party and without
further consideration, all such further instruments and take all such further action as may be reasonably necessary or appropriate
to transfer more effectively to Purchaser, or to perfect or record Purchaser’s title to or interest in the Purchased Property
or to enable Purchaser to use or otherwise to confirm or carry out the provisions and intent of this Agreement.

 

Section 4.12         Delivery
of Schedules.   Seller shall provide all Schedules required by this Agreement (other than those required by ARTICLE
7 hereof, which will be provided by Purchaser by the Schedule Due Date) within ten (10) days following the Effective Date
(the “Schedule Due Date”).

 

(a)          If
applicable, the Due Diligence Period shall be extended by the total number of days which elapse between: 

 

(i)          the
last to occur of (x) the Schedule Due Date or (y) the date upon which Purchaser specifically identifies insufficiencies in the
Schedules; and 

 

(ii)         the
first to occur of (x) the date upon which all required Schedules have actually been provided to Purchaser, (y) any insufficiently
completed Schedules have been corrected to Purchaser’s reasonable satisfaction, or (z) Seller's delivery to Purchaser of
a certificate signed by its Chief Financial Officer under oath that to the best of Seller's knowledge all Schedules have been
completed with all information reasonably available to Seller and been made available to Purchaser, which certificate shall be
conclusive of the occurrence of the Schedule Due Date, in the absence of a knowing misrepresentation by Seller.

 

All adjustments to the
Due Diligence Period in accordance with this Section 4.12 shall be inclusive of the Schedule Due Date and the last applicable
date of delivery, certification, or correction, as applicable.

 

(b)          Any
fact or item disclosed on any Schedule to this Agreement shall be deemed disclosed with regard to all other representations and
warranties to which such fact or item may reasonably apply to the extent such disclosure would provide notice to a reasonable
person that the information disclosed would also qualify, or constitute an exception to, such other representations and warranties.

 

(c)          Seller
may from time to time supplement and update such Schedules to reflect any changes since the date of delivery of the original Schedules
or any matters of which Seller first acquires Knowledge following the original delivery date of such Schedules. Any such updates
or supplements shall be deemed to amend the Schedules for all purposes retroactively to the Effective Date, except that (i) no
amendment to Schedules 1.1(a), 1.1(c), 2.4(a), and 4.4(b) may be made without Purchaser’s written consent,
and (ii) any amendments permitted above shall be disregarded (x) in determining if the conditions to Closing set forth in Section
5.3(a) or Section 5.3(d) below have been satisfied, and (y) for all purposes under this Agreement if Seller intentionally
omitted such information from the original Schedules.

 

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ARTICLE
5

Closing

 

Section 5.1           Closing.  The
Closing of the transactions contemplated by this Agreement shall occur remotely through escrow closing with Escrow Agent, upon
the exchange of signatures to the documents contemplated by this Agreement and the other required deliveries of each party hereto
described below on the later of (i) five (5) business days following the expiration of the Due Diligence Period, or (ii) ten (10)
business days following Purchaser’s receipt (or, as applicable, receipt by its affiliate or designee) of all governmental
approvals necessary for Purchaser to purchase and operate all of the Facilities, unless extended by mutual agreement of Purchaser
and Seller or pursuant to Section 9.3(b), Section 10.11, or Section 10.12.

 

Additionally, Purchaser shall be entitled
in its sole discretion to adjourn the scheduled date of Closing with respect to all of the Facilities and the St. Petersburg Raw
Land by up to thirty (30) calendar days. The date on which the Closing is scheduled to occur (as such date may be extended from
time to time pursuant to this Agreement) shall be the “Scheduled Closing Date” hereunder. The date on which
the Closing actually occurs shall be the “Closing Date” for purposes of this Agreement. Provided, however,
in no event shall the Closing Date be later than January 27, 2015, after affording Purchaser all adjournments and extensions permitted
in any provision of this Agreement (the "Outside Closing Date") and any provision of this Agreement which would
otherwise result in a Closing Date beyond the Outside Closing Date shall be automatically revised to result in a deadline for
Purchaser's obligation to proceed to Closing equal to the Outside Closing Date.

 

Section 5.2           Conditions
to Seller’s Obligations.  Except as may be waived in writing by Seller, Seller’s obligation to make
its deliveries at the Closing and to effect and consummate the transactions contemplated hereby shall be subject to the following
conditions:

 

(a)          Representations
and Warranties True and Correct. Purchaser’s representations and warranties contained in this Agreement, taken as whole,
shall be true in all material respects as of the Closing Date (except for representations and warranties made as of a specified
date, which shall have been true and correct as of such date with the same effect as though made on such date), and Purchaser
shall have executed and delivered to Seller at Closing a certificate confirming the foregoing.

 

(b)          Agreements
Complied With. Each of Purchaser’s covenants and agreements contained in this Agreement to be performed at or prior
to the Closing shall have been performed in all material respects at or prior to the Closing.

 

(c)          Deliveries
Made. At or prior to Closing, Purchaser shall have delivered to Seller or to the Escrow Agent for release to Seller upon Closing,
and where applicable shall have duly executed, all the documents, certificates and other instruments required to be delivered
at Closing in accordance with Section 5.5 or any other express provision of this Agreement.

 

Section 5.3           Conditions
to Purchaser’s Obligations.   Except as may be otherwise expressly set forth in this Agreement to the contrary
and/or waived in writing by Purchaser, Purchaser’s obligation to make its deliveries at the Closing and to effect and consummate
the transactions contemplated hereby shall be subject to the following conditions:

 

(a)          Representations
and Warranties True and Correct. Each of Seller’s representations and warranties contained in this Agreement, taken
as a whole, shall be true in all material respects as of the

 

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Closing Date with the
same effect as though made on such date (except for representations and warranties made as of a specified date, which shall have
been true and correct as of such date), and Seller shall have executed and delivered to Purchaser at Closing a certificate confirming
the foregoing.

 

(b)          Agreements
Complied With. Each of Seller’s covenants and agreements contained in this Agreement to be performed at or prior to
the Closing shall have been performed in all material respects at or prior to the Closing, and Seller shall have executed and
delivered to Purchaser at Closing a certificate confirming the foregoing.

 

(c)          Deliveries
Made. At or prior to Closing, Seller shall have delivered to Purchaser or to the Escrow Agent for release to Purchaser upon
Closing, and where applicable shall have duly executed, all the documents, certificates and other instruments required to be delivered
at Closing in accordance with Section 5.4 or any other express provision of this Agreement.

 

(d)          No
Material Adverse Change. No Material Adverse Change shall have occurred during the period between the Effective Date and the
Closing Date, and the Average Occupancy for the Facilities shall not have decreased below eighty-seven and one-half percent (87.5%)
of the total available units. 

 

(e)          Termination
of Existing Leases and/or Management Agreements. Any existing real property leases and/or management agreements, if any, relating
to the Purchased Property which are not Assumed Contracts and Leases or Residency Agreements shall have been terminated without
fee or cost to Purchaser, and Seller shall have provided Purchaser reasonable evidence of same.

 

(f)          No
Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction, or other order issued by any
court of competent jurisdiction, or other legal restraint or prohibition preventing the consummation of the transactions contemplated
hereby shall be in effect. No action shall have been taken nor any statute, rule, or regulation shall have been enacted by any
governmental agency that makes the consummation of the transactions contemplated hereby illegal.

 

Section 5.4           Deliveries
by Seller.  Seller shall deliver to Purchaser on or before the Closing the following for each Facility and (as applicable)
the St. Petersburg Raw Land:

 

(a)          Deed.
The Deed substantially in the form of Exhibit C attached hereto, duly executed by Seller. In addition, in the
event Purchaser elects to have a new survey of the applicable Real Property (the “Survey”) prepared, Seller
agrees to provide a quitclaim deed at closing conveying title to the applicable Real Property based on the metes and bounds description
shown on the Survey.

 

(b)          Bill
of Sale and Assignment. A bill of sale and assignment with Seller’s warranty of title in the form of Exhibit D
attached hereto (the “Bill of Sale and Assignment”) with respect to the Purchased Personal Property
located at the Facility, duly executed by Seller.

 

(c)          Other
Instruments. Such further instruments of conveyance and transfer as Purchaser may reasonably require to consummate the transactions
contemplated by this Agreement to vest all of the Business with respect to the applicable Facility in Purchaser and to facilitate
the transfer of such Business from Seller to Purchaser, including the assignment of the applicable Assumed Contracts and Leases
and of the Residency Agreements, in form(s) and substance reasonably acceptable to Purchaser and agreed upon by the parties during
the Due Diligence Period.

 

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(d)          Owner’s
Affidavit. An Owner’s Affidavit in a form acceptable to the Title Company to the extent required to issue the Title
Policy.

 

(e)          Releases.
Documents releasing or nullifying any title exceptions (or providing reasonable evidence of such release or nullification)
(relating to the applicable Real Property) which Seller is obligated to release or nullify pursuant to Section 2.4 hereof.

 

(f)          Resolutions.
A certified copy of the company resolutions authorizing consummation of this Agreement and authorizing Seller’s to execute
all documents necessary for Closing as provided herein.

 

(g)          Closing
Certificate. The certificates required pursuant to Section 5.3(a) and Section 5.3(b).

 

(h)          1099S.
A completed Form 1099S, or effective equivalent thereof, describing the sale of the applicable Purchased Property.

 

(i)          Withholding
Affidavit.  If a Withholding Affidavit is required by the Escrow Agent, Seller shall deliver the Withholding Affidavit
to the Escrow Agent prior to Closing.

 

(j)          Non-Foreign
Status Affidavit. A certificate of non-foreign status pursuant to Treasury Regulation Section 1.1445-2(b)(2) signed by Seller
under penalties of perjury stating Seller’s name, address and US taxpayer identification number and stating that Seller
is not a foreign person as defined by Section 1445(f)(3) of the IRC.

 

(k)          Good
Standing Certificate. A certificate of existence, certified by the Secretary of State of Florida and Kentucky (as applicable)
as of a date which is within fifteen (15) days of Closing, reflecting each entity comprising the Seller’s good standing
as a Florida or Kentucky (as applicable) limited liability company.

 

(l)          Rent
Roll. A true, correct, and complete updated Rent Roll certified by an officer of Seller, for the applicable Facility showing
each resident (without listing resident names) as of a date which is within three (3) business days prior to the Closing Date,
the unit, bed or room number of such resident, and the amount of the monthly fees to be paid by such resident (including room,
meal and other applicable monthly fees), the amount of security deposit, if any, date of Residency Agreement and the expiration
date of such Residency Agreement, if applicable. 

 

(m)          Operations
Transfer Agreement and Transition Period Sublease. An Operations Transfer Agreement, if applicable in form and substance mutually
agreed upon by the parties during the Due Diligence Period and attached as Exhibit E-3 (the “Operations
Transfer Agreement”) and the Transition Period Sublease, if applicable, in form and substance mutually agreed upon by
the parties during the Due Diligence Period and attached as Exhibit E-2 (the “Transition Period Sublease”).

 

(n)          Third
Party Consents. The third party consents listed on Schedule 5.4(n).

 

(o)          Title
Commitment. A title commitment in accordance with Section 2.4(a), subject only to the Permitted Title Exceptions and
endorsed by the Title Company.

 

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(p)          Books
and Records. Possession and control of books and records included as part of the Purchased Property which are not physically
located at the Real Property as of the Closing Date.

 

(q)          Escrow
Agreement. The Post-Closing Escrow Agreement, duly executed by Seller.

 

(r)          Post-Closing
Management Agreement. A Post-Closing Management Agreement duly executed by the applicable Post-Closing Manager. 

 

Section 5.5           Deliveries
by Purchaser.  Purchaser shall deliver to Seller on or before the Closing the following:

 

(a)          Payment
Items. The items described in Section 3.2 hereof representing payment of the Purchase Price.

 

(b)          Assumption
Agreement. An instrument of assumption of the Assumed Liabilities, substantially the form attached as Exhibit F.

 

(c)          Post-Closing
Escrow Agreement. The Post-Closing Escrow Agreement, duly executed by Purchaser.

 

(d)          Operations
Transfer Agreement and Transition Period Sublease. The Operations Transfer Agreement, if applicable, and the Transition Period
Sublease, if applicable.

 

(e)          Post-Closing
Management Agreement. A Post-Closing Management Agreement duly executed by the applicable Post-Closing Manager. 

 

Section 5.6           Failure
to Obtain Licenses and Permits.

 

In the event Purchaser shall not have
obtained all governmental licenses and permits required for Purchaser to operate the Facilities as independent living, assisted
living and memory care facilities, and skilled nursing facilities in the same manner in which the Seller Parties is currently
operating the Business, then Purchaser may elect in writing at any time prior to the Outside Closing Date to either:

 

(a)          Identify
with specificity which licenses or permits Purchaser lacks for each Facility and advise that Purchaser desires to terminate this
Agreement and receive a refund of the Deposit, in which event Seller shall have up to sixty (60) days within which to attempt
to obtain on behalf of Purchaser the identified licenses and permits with Purchaser's prompt and complete cooperation and at Purchaser's
sole cost and expense. Upon Seller's notice to Purchaser that Seller is unable or unwilling to obtain such licenses and permits
on Purchaser's behalf, this Agreement shall terminate and Purchaser shall be entitled to receive a refund of the Deposit.

 

(b)          Proceed
to Closing whereupon Seller shall enter into a Transition Period Sublease for any or all of the Facilities, effective as of the
Closing Date in accordance with Section 4.9 above (as requested by Purchaser).

 

Section 5.7           Non-Fulfillment
of Closing Conditions.   Notwithstanding anything in this Agreement to the contrary, the following shall apply exclusively
if any of the conditions in Section 5.2 or Section 5.3 are not fulfilled as of the Scheduled Closing Date:

 

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(a)          Except
as otherwise provided in the last sentence of this Section 5.7(a), if any of the conditions set forth in Section 5.2
 have not been fulfilled as of the Scheduled Closing Date, but all the conditions set forth in Section 5.3 have
been fulfilled or expressly waived by Purchaser, Seller may elect (i) to proceed to Closing and waive such failure for all purposes
hereunder; or (ii) terminate this Agreement, in which case the Deposit shall be disbursed to Seller as liquidated damages, and
Purchaser shall have no further liability to Seller except with respect to the surviving provisions described in ARTICLE 9.
Seller hereby waives any right to recover the balance of the Purchase Price, or any part thereof, and the right to pursue any
other remedy permitted at law or in equity against Purchaser. In no event under this Section 5.7 or otherwise shall Purchaser
be liable to Seller for any punitive, speculative or consequential damages. Notwithstanding the foregoing, if any of the conditions
in Section 5.3 or Section 5.4 are not satisfied, then Seller’s rights under this Section 5.7(a) are
subject to Purchaser’s rights under Section 5.7(b) below. 

 

(b)          If
any of the conditions set forth in Section 5.3 have not been fulfilled as of the Scheduled Closing Date, Purchaser may
elect:

 

(i)          to
proceed with Closing and waive such failure for all purposes hereunder;

 

(ii)         to
extend the Scheduled Closing Date for an additional thirty (30) days in order to provide Seller the opportunity to fulfill such
condition and if such condition is not fulfilled within such thirty (30) day additional period, Purchaser may terminate this Agreement,
in which case the Deposit shall be returned to Purchaser and except as set forth below, Seller shall reimburse Purchaser for Purchaser’s
actual third party expenses incurred by Purchaser in connection with its due diligence on the Purchased Property; provided, however,
such reimbursements shall not exceed Two Hundred Fifty Thousand and No/100 U.S. Dollars ($250,000.00) in the aggregate for all
Purchased Property, and after which Seller shall have no additional liability to Purchaser for such failure, except for the surviving
provisions described in ARTICLE 9; or 

 

(iii)        to
enforce specific performance. 

 

(c)          If
the Closing Conditions as set forth in Section 5.3 have not been satisfied on or before the Outside Closing Date, Purchaser
shall have the absolute right to terminate this Agreement, in which case the Deposit shall be returned to Purchaser. 

 

(d)          Both
parties hereby waive and release any right to special, punitive, multiplied or consequential damages, or lost profits, except
to the extent the same are included in a third-party judgment against the other party. 

 

Section 5.8           Post-Closing
Actions.  Seller shall promptly deliver to Purchaser the original of any mail or other communication received by
it after the Closing Date pertaining to the Purchased Property or the Business, and any payments to which Purchaser is entitled.
Purchaser shall promptly deliver to Seller the original of any mail or other communication received by Purchaser after the Closing
Date and addressed to Seller which does not pertain to the Purchased Property or the Business, or to any payments to which Seller
is entitled.

 

Section 5.9           Termination
During Due Diligence.  Notwithstanding anything herein to the contrary, Purchaser shall have the right to terminate
this Agreement at any time during the Due Diligence Period for any reason or for no reason whatsoever with respect to all (but
not less than all) of the Facilities and

 

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the St. Petersburg Raw Land. Upon any
such termination, the Deposit shall be returned to Purchaser, and the parties shall have no further liability or obligation to
one another arising from such termination except for the surviving provisions described in ARTICLE 9.

 

Section
5.10         No Partial Closing.

 

For purposes of clarity, it is hereby
agreed and acknowledged, that neither party shall have any obligation under any circumstances to proceed to Closing on less than
all of the Facilities.

 

ARTICLE
6

Representations and Warranties of Seller

 

The following representations
and warranties are given by the Seller and, as applicable, each representation and warranty related to Seller below shall be deemed
to have been given individually on behalf of each entity comprising the Seller. Each entity comprising the Seller hereby represents
and warrants, jointly and severally, to Purchaser that as of the Effective Date:

 

Section 6.1           Organization
and Standing.  Each entity comprising the Seller other than THE ALLEGRO AT HELMWOOD, LLC is a limited liability
company duly organized, validly existing, and in good standing under the laws of the State of Florida and has the requisite power
and authority to own, sell, lease and operate its properties and to carry on its businesses as now being conducted. THE ALLEGRO
AT HELMWOOD, LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of
the Commonwealth of Kentucky and has the requisite power and authority to own, sell, lease and operate its properties and to carry
on its businesses as now being conducted. Each entity comprising the Seller has the company power and authority to execute and
deliver this Agreement and to consummate the transactions and perform the obligations contemplated by the Agreement.

 

Section 6.2           Valid
and Binding Obligations.  The execution, delivery and performance of this Agreement and all other agreements and
instruments to be executed and delivered by Seller hereunder, and the consummation of the transactions contemplated by this Agreement,
have been duly authorized by all necessary company action of Seller. This Agreement constitutes, and all instruments required
to be executed and delivered by Seller before or at the Closing will constitute, the valid and binding obligations of Seller,
enforceable against Seller, in accordance with their respective terms. All persons who have executed this Agreement on behalf
of Seller have been duly authorized to do so by all necessary company action of Seller and all persons who execute instruments
required to be executed and delivered by Seller before or at the Closing shall have been duly authorized to do so by all necessary
company action of Seller.

 

Section 6.3           Title;
Purchased Property Complete.  Seller has good title to all of the Purchased Personal Property, and at the Closing,
Seller shall transfer the Purchased Personal Property to Purchaser, free and clear of all liabilities, liens and, encumbrances
except for the Assumed Liabilities and the Permitted Encumbrances. Seller has the unrestricted right to convey and assign the
Purchased Personal Property. Except for the Excluded Property or as otherwise set forth in Schedule 6.3, (i) the
Purchased Property comprises all material assets, rights or property used by the Seller Parties in the operation of the Business
as currently conducted, and (ii) to Seller’s Knowledge, all of the Personal Property is in good condition, working order
and repair (ordinary wear and tear excepted).

 

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Section 6.4           Taxes
and Tax Returns.   All Seller Parties have filed when due or will file when due in correct form all federal and
state income tax returns for all periods ending on or prior to the Closing Date which are required to be filed by the applicable
Seller Party on or prior to the Closing Date. Other than extensions to file any Seller Party’s tax returns, there are no
agreements by any Seller Party for the extension of time for the assessment of any tax. All federal, state, county and local taxes
due and payable by any Seller Party on or before the Effective Date have been paid and any taxes due and payable at any time between
the Effective Date through the Closing will be paid prior to Closing, and there are no federal, state or local tax liens pending
or threatened against Seller Party or the Purchased Property. Except for the Parent Company Review, there is no open audit of
any of Seller Party’s federal, state, local income, sales use or property tax returns pending, and no Seller Party has received
notice of the pendency of any such audit or examination. No Seller Party holds a certificate or other authorization issued by
any tax collection body for the purpose of avoiding the payment by such Seller Party of sales and use taxes upon such Seller Party’s
purchases of goods and services, nor has any Seller Party applied for such a certificate or other authorization. As used herein,
the "Parent Company Review," shall mean a current, open and routine audit by the Internal Revenue Service of
one or more recent federal tax filings by Allegro Senior Living, LLC, a Delaware limited liability company, which company is part
of the consolidated federal tax return customarily filed by the Seller.

 

Section 6.5           Execution
and Delivery.  Except as set forth in Schedule 6.5, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by this Agreement will:

 

(a)          violate
any provisions of the Articles of Organization or operating agreements of any Seller;

 

(b)          violate
any contract or agreement relating to borrowed money, or any judgment, order, injunction, decree or award against, or binding
upon Seller or upon the property or business of Seller, which violation would prevent, delay or materially hinder consummation
of the transactions contemplated by this Agreement;

 

(c)          result
in the creation of any material lien, charge or encumbrance upon any of the Purchased Property pursuant to the terms of any agreement
or instrument to which Seller is a party or by or to which Seller or any of the Purchased Property may be bound, subject or affected;

 

(d)          violate
any judgment, order, injunction, decree or award against, or binding upon, Seller or upon the Purchased Property or Business of
Seller; or

 

(e)          result
in any breach, violation, default or cancellation of any contract, agreement, mortgage, deed to secure debt, or lease to which
Seller is a party or by which Seller is bound or the Purchased Property is subject that could have a material adverse effect on
the Purchased Property or the operations of the Business.

 

Section 6.6           Contracts
and Leases.  Schedule 6.6 hereto sets forth all contracts, leases or agreements, including the Assumed Contracts
and Leases, to which any Seller Party is a party, written or oral, currently in effect that are material to the operation or management
of the Business or the ownership and use of the Purchased Property, other than the Residency Agreements described in Section
6.7, in each case identifying the applicable Facility to which such agreements relate. Each of the Assumed Contracts and Leases
is in full force and effect in accordance with its terms. Seller has made available to Purchaser true and correct copies of all
Assumed Contracts and Leases, including all material amendments or

 

    	31

    	 

    

 

modifications to same. Seller is not in
material breach, default or violation of any of the Assumed Contracts and Leases and, to Seller’s Knowledge, no other party
to any such contract or lease is in material breach, default or violation thereof. No event has occurred and no condition exists
that with the passage of time or the giving of notice, or both, would constitute a material default by Seller or, to Seller’s
Knowledge, by any other party to any Assumed Contracts and Leases.

 

Section 6.7           Residency
Agreements and Related Matters.  Schedule 6.7 is a rent roll for each Facility and identifies all of the
Residency Agreements currently in effect for said Facility (the “Rent Roll”). Except as noted on the Rent
Roll to the contrary:

 

(a)          each
of the Residency Agreements is in full force and effect in accordance with its terms; 

 

(b)          no
Seller Party is in material breach, default or violation of any Residency Agreement and, to Seller’s Knowledge, no other
party to any such contract is in material breach, default or violation thereof; 

 

(c)          no
event has occurred and no condition exists that, with the passage of time or the giving of notice, or both, would constitute a
material default by any Seller Party or, to Seller’s Knowledge, any other party to any Residency Agreement; 

 

(d)          Seller
has no obligation with respect to refund of any deposits, interest on deposits or similar obligations with respect to any Residency
Agreement; and

 

(e)          the
updated Rent Roll provided pursuant to Section 5.4(l) shall be true and correct in all material respects as of the date
thereof. 

 

Section 6.8           Permits
and Licenses.  Schedule 6.8 contains a complete list of all material governmental permits, licenses, certificates
and authorizations held by any Seller Party that relate to the ownership, use, operation or management of each Facility or the
St. Petersburg Raw Land, the Purchased Property and/or the Business (the “Permits and Licenses”).  Seller
has made available to Purchaser true and correct copies of all Permits and Licenses. The Permits and Licenses are in full force
and effect, and have not been revoked or rescinded, nor to Seller’s Knowledge has any governmental agency or authority threatened
to revoke or rescind any such Permit or License. To Seller’s Knowledge, each Seller Party is using, operating and managing
the Business and the Purchased Property in compliance with the terms and conditions of the Permits and Licenses, and except as
noted in periodic inspection or survey reports by agencies having jurisdiction over Seller, copies of which have been made available
to Purchaser, no Seller Party has received any written notice of any uncured deficiency or violation of any such term or condition
from any applicable government body or agency. Except for the Permits and Licenses shown on said Schedule 6.8, there
are no other material governmental permits, licenses, certificates or authorizations required for Seller to own, use, operate
or manage the Business as currently operated by the Seller Parties.

 

Section 6.9           Insurance.  Schedule
6.9 lists all policies of property and casualty insurance and liability insurance currently in effect and covering each
Facility, or the St. Petersburg Raw Land, the Business and/or the Purchased Property, copies of which have been made available
for review by Purchaser. Each such policy currently is in full force and effect and, to Seller’s Knowledge, Seller has not
taken or failed to take any action which would limit or impair any of Seller’s rights thereunder with respect to any matter
for which Purchaser could be held liable as a successor to Seller. Schedule 6.9 lists any pending, unresolved claims
under Seller’s policies of property and casualty or liability insurance, as well as all claims made and resolved within
the past three (3) years. Neither Seller nor any applicable policy-holder

 

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has not received written, or to Seller’s
Knowledge, oral, notice of any pending cancellation or nonrenewal of such policies.

 

Section 6.10         Employees.

 

All facility-level employees are employees
of either the Current Manager or the PEO and no Seller has any employees. Schedule 6.10 contains a complete and
correct list of Facility-level employees of the Current Manager or the PEO who perform services for the Business or any Facility
as of June 30, 2014, (including their respective positions, the Facility where they are employed, pay rates, bonus arrangements
(if any), dates of hire, and accrued vacation and sick pay as of June 30, 2014 (including the Community Director and any Resident
Services Director of each Facility Business) (collectively, the “Employees”). Except as described on Schedule
6.10, neither any Seller Party nor to Seller’s Knowledge, any Current Manager or the PEO, is a party to any employment
contract or other written agreement with any Employee. Neither any Seller Party nor to Seller’s Knowledge, the Current Manager
or the PEO, has made any binding promise or commitment to increase the compensation of any Employee after the Effective Date,
except as otherwise set forth on Schedule 6.10 hereto. Seller Parties, and to Seller’s Knowledge, the Current
Manager and PEO, have complied in all material respects with all laws and regulations dealing with employment of Employees. Schedule
6.10 provides a list and brief description of all litigation or administrative claims filed by Employees or former employees
who performed services for the Business against any Seller Party or the Current Manager during the past three (3) years, if any.
Except as otherwise set forth on Schedule 6.10 (i) no Seller Party is a party to any collective bargaining
agreement with respect to any employees, and (ii) to Seller’s Knowledge, there have been no efforts to organize a collective
bargaining agreement or any other type of union activity with respect to the employees of the Business within the last three (3)
years.

 

Section
6.11         Seller Benefit Plans. 

 

(a)          Schedule
6.11 sets forth a complete list of each “employee benefit plan,” as that term is defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) regardless of whether such plan is
subject to ERISA, and each bonus, deferred, or incentive compensation, stock purchase, stock option, severance, and termination
pay plan or program (the “Plans”), that is maintained or contributed to by any Seller Party, the Current Manager
[or PEO] for the benefit of Employees or pursuant to which any Seller Party or the Current Manager has any liability with respect
to Employees (“Seller Plans”). With respect to each of the Seller Plans, Seller has or will make available
to Purchaser (or will deliver to Purchaser prior to Closing) correct and complete copies of each of the following documents: (i)
the Plans and related trust or other funding documents (including all amendments thereto), (ii) the most recent Form 5500 annual
report, including all attachments thereto, filed with the Internal Revenue Service with respect to each such Plan, (iii) the most
recent trust report, if any, prepared with respect to each such Plan, and (iv) the summary plan description prepared for each
such Plan.

 

(b)          Each
Seller Plan has been administered and operated in material compliance with its terms and the applicable requirements of ERISA
and the IRC, including the requirement to file an annual report. No Seller Plan is intended to be qualified under Section 401
of the IRC as a “multiemployer plan” (within the meaning of Section 3(37) of ERISA). 

 

(c)          Except
as set forth on Schedule 6.11, there are no pending or, to Seller’s Knowledge, threatened claims of any Employees
(or former employees who provided services to the Business) against or otherwise involving any of the Seller Plans (other than
routine claims for benefits).

 

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(d)          There
are no Employees or former employees who provided services to the Business, who are entitled to (i) any pension benefit that is
unfunded, or (ii) any benefit to be paid after termination of employment other than required by Section 601 of ERISA, pursuant
to a Seller Plan intending to be qualified under Section 401(a) of the IRC, or identified as providing a benefit described in
this Section 6.11 or Schedule 6.11. Each Seller Plan that is an employee welfare benefit plan as defined
in Section 3(1) of ERISA is either unfunded or funded through an insurance company contract. There is no liability in the nature
of a retroactive rate adjustment or loss-sharing or similar arrangement with respect to any such Seller Plan.

 

(e)          Neither
any Seller Party, nor, to Seller’s Knowledge, any other person, including any fiduciary, has engaged in any “prohibited
transaction” as defined in Section 4975 of the IRC or Section 406 of ERISA that could subject any Seller Party, or any person
whom a Seller Party has an obligation to indemnify to any tax or penalty imposed under Section 4975 of the IRC or Section 502
of ERISA.

 

(f)          Neither
any Seller Party nor the Current Manager has at any time (x) maintained, contributed to, or been required to contribute or had
any liability (that has not been satisfied in full) to any Seller Plan subject to Title IV of ERISA, (y) incurred or expected
to incur any liability to the Pension Benefit Guaranty Corporation or otherwise under Title IV of ERISA, or (z) incurred or expected
to incur liability in connection with an “accumulated funding deficiency” within the meaning of Section 412 of the
IRC, whether or not waived.

 

Section 6.12         Litigation.  Except
as described on Schedule 6.12, there is no litigation, action, suit, or other proceeding currently pending, or to
Seller’s Knowledge, threatened against any Seller Party, or pending or threatened against any Current Manager, at law or
in equity, or before any federal, state, municipal, local or other governmental or quasi-governmental authority, or before any
arbitrator. To Seller’s Knowledge, there is no pending investigation of any Seller Party, Current Manager and/or any one
or more Facilities by any governmental or quasi-governmental authority. Seller is not subject to any judgment, injunction, order,
writ or decree of any court or other governmental or quasi-governmental authority or agency relating specifically to Seller or
to the ownership, operation or management of the Purchased Property, any Facility, the St. Petersburg Raw Land, and/or the operations
of the Business.

 

Section
6.13         Compliance with Laws.     Except as otherwise
noted on Schedule 6.13:

 

(a)          Each
Seller Party is in compliance in all material respects with all applicable laws, rules or regulations in connection with its ownership,
use, operation or management of the Purchased Property, each Facility, the St. Petersburg Raw Land, and the Business, including
without limitation all laws, rules and regulations related to Government Programs, and has not received notice of any violation
thereof which has not been cured as of the Effective Date.

 

(b)          There
are no pending or threatened (i) civil monetary penalties, terminations or exclusions from participation in any Government Programs
for any Facility, (ii) material payment denials, or (iii) other sanctions of a governmental authority against any Seller Party
or the Facilities. Seller and Business are in good standing in all applicable Government Programs. No Seller Party nor the Business
has any material liabilities to any third-party fiscal intermediary or carrier
administering the Government Programs,
directly to the Government Programs or any Governmental Authority, or to any other third-party payor for the recoupment of any
amounts previously paid by any such third-party fiscal intermediary, carrier, Government Program, or other third-party payor.
Except for industry standard reviews and audits, no Seller Party nor the Business has any pending or, to Seller’s Knowledge,
threatened investigations, audits, or other actions by any third-party fiscal intermediary or carrier
 

 

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administering the Government
Programs or any Governmental Authority, by the United States Department of Health and Human Services, any state Medicaid agency,
intermediary or carrier, or any third party to recoup, set-off, or suspend payments to, or demand a refund from, or terminate
provider agreements with, or asserting any claim, demand, penalty, fine, or other sanction with respect to any of the activities,
practices, policies, or claims of any Seller Party or the Business. No Seller Party, nor any party on behalf of any Seller Party
or any Facility has received any over-payment or unearned payment from any Government Program or knowingly submitted to any Government
Program any false or fraudulent claim for payment.

 

(c)          No
Seller Party nor the Business has knowingly engaged in any activities which are prohibited, or are cause for civil penalties or
mandatory or permissive exclusion from Medicare, Medicaid, or any other State Health Care Program or Federal Health Care Program
(as those terms are defined in 42 C.F.R. Section 1001.2) under 42 U.S.C. Sections 1320a-7, 1320-7a, 1320a-7b, or 1395nn, or the
Federal False Claims Act, 31 U.S.C. Section 3729, or the regulations promulgated pursuant to such statutes, nor has any Seller
Party, any Facility, or any employees or contractors of Seller or any Facility been excluded from participation in any such program.

 

(d)          Each
Seller Party has, and the Facilities have, complied with all applicable security and privacy standards regarding protected health
information under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology
for Economic and Clinical Health Act provisions of the American Recovery and Reinvestment Act of 2009, all applicable state privacy
laws, and with all applicable regulations promulgated under any such legislation.

 

(e)          No
Seller Party nor any Facility has submitted any claim to any Government Program in connection with any referrals that violated
any applicable self-referral Law, including the Federal Ethics in Patient Referrals Act, 42 U.S.C. Section 1395nn (the “Stark
Law”) or any applicable state self-referral Law.

 

(f)          Each
Seller Party has, and the Facilities have, complied with all disclosure requirements of all applicable self-referral Laws, including
the Stark Law and any applicable state self-referral law.

 

(g)          No
Seller Party nor any Facility has knowingly or willfully solicited, received, paid, or offered to pay any remuneration, directly
or indirectly, overtly or covertly, in cash or in kind, for the purpose of making or receiving any referral which violated any
applicable anti-kickback law, including the federal Anti-Kickback Statute, 42 U.S.C. Section 1320-7b(b) (known as the “Anti-Kickback
Statute”).

 

Section 6.14         Financial
Statements.  Financial statements pertaining to the operations of the Business for the period ended December 31,
2013 and for the six (6) months ended June 30, 2014 are attached hereto as Schedule 6.14 (the “Financial
Statements”). Except as otherwise set forth on Schedule 6.14, the Financial Statements have been
prepared consistently applied throughout the periods indicated and present fairly in all material respects the results of operations
and financial condition of the Business for the respective periods indicated. The monthly financial reports to be provided by
Seller pursuant to Section 4.2(k) will be based upon the books and records of the Seller Parties consistent with Seller’s
current reporting practice, and will present fairly in all material respects the information purported to be presented therein.

 

Section 6.15         Real
Property. To Seller’s Knowledge, and except as may be disclosed on Schedule 6.15, use of the Real
Property by the applicable Seller Parties complies in all material respects with

 

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applicable zoning and land use laws, rules
and regulations and with all applicable building codes, and no Seller Party has received written notice of any zoning, land use
or building code violation relative to the Real Property which has not been cured prior to the date hereof. To Seller’s
Knowledge (unless Seller is a party thereto), there is no pending litigation or dispute concerning the location of the lines and
corners of the Real Property. No Seller Party has received written notice of, and has no other Knowledge of, pending, threatened
or contemplated actions by any governmental authority or agency having the power of eminent domain, which might result in any
part of the Real Property being taken by condemnation or conveyed in lieu thereof. To Seller’s Knowledge, there is no claim
of adverse possession with respect to any part of the Real Property.

 

Section 6.16         Environmental
Matters.  Except as disclosed on Schedule 6.16, or in any environmental audit or inspection report
made available by Seller to Purchaser before the end of the Diligence Materials Due Date to Purchaser or the ESAs generated by
Purchaser’s environmental consultants, to Seller’s Knowledge: (a) no areas exist on the Real Property where Hazardous
Substances have been generated, disposed of, released, stored or found in violation of any Environmental Laws, and Seller has
no Knowledge and has received no notice of the existence of any such areas for the generation, storage or disposal of any Hazardous
Substances on the Real Property in violation of any Environmental Laws; (b) neither any Seller Party nor any of their respective
agents has violated in any material respect any of the applicable Environmental Laws relating to or affecting the Real Property;
(c) the Real Property is presently in compliance in all material respects with all Environmental Laws; (d) the Seller Parties
have obtained all material licenses, permits and/or other governmental or regulatory approvals necessary to comply with Environmental
Laws relating to their respective use of the Real Property, and the Seller Parties are in compliance in all material respects
with the terms and provisions of all such licenses, permits and/or other governmental or regulatory approvals; (e) no underground
storage tanks are currently located on the Real Property; (f) the Real Property has not been previously used as a landfill or
as a dump for garbage or refuse; and (g) no asbestos containing building material or lead based paint are present in any structures
located on the Real Property. Notwithstanding the generality of any of the other representations and warranties in this ARTICLE
6, this Section 6.16 contains the exclusive representations and warranties of Seller with respect to compliance with
Environmental Laws and the presence or absence of Hazardous Substances.

 

Section 6.17         Brokers,
Finders.  Other than Vant-Age Pointe Capital Management and Advisory, Inc. and KeyBanc Capital Markets Inc., whose
commissions and other charges shall be the sole responsibility of Seller, Seller has not retained any broker or finder in connection
with the transactions contemplated hereby so as to give rise to any claim against Purchaser for any brokerage or finder’s
commissions, fee, or similar compensation.

 

Section 6.18         FIRPTA.  Seller
is not a “foreign person” as that term is defined in the Internal Revenue Code of 1986, as amended, and the regulations
promulgated pursuant thereto, and Purchaser has no obligation under Internal Revenue Code Section 1445 to withhold and pay over
to the Internal Revenue Service any part of the amount realized by Seller in the transaction contemplated hereby (as such term
is defined in the regulations issued under IRC Section 1445).

 

Section 6.19         Solvency.  Seller
is not now insolvent, and will not be rendered insolvent by completion of the transactions contemplated herein. For purposes of
the preceding sentence, “insolvent” means, upon completion of the Closing, (i) that the fair market value of Seller’s
assets is less than the sum of Seller’s debts and other liabilities or (ii) Seller has inadequate cash flow to service its
debts as they come due. Upon the completion of the transactions contemplated herein, Seller will have adequate capital for the
purposes of engaging in any business or transaction in which Seller is or will engage.

 

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Section 6.20         Consent
of Third Parties.  Except as otherwise set forth on Schedule 6.20, no consent of any third party is required
as a condition to the entering into, performance or delivery of this Agreement by Seller, other than such consents as would not,
in any individual case or in the aggregate, have a material adverse effect upon Purchaser’s ability to complete the purchase
of the Purchased Property and operate the Business in the manner in which it is currently being operated by the Seller Parties.

 

Section 6.21         No
Governmental Approvals; Permits.  To Seller’s Knowledge, except as set forth on Schedule 6.21, and
the requirement for Purchaser to obtain the licenses and permits described in Schedule 6.8, 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 any Seller Party of this Agreement or the taking of any action contemplated by this Agreement, which has not been
obtained. Each of the Facilities is appropriately licensed, taking into account the levels of care and services provided at such
Facility and the requirements of applicable laws and regulations where the Facility is located. The Seller Parties have all permits,
licenses and authorizations necessary for the conduct of, or relating to the
legal use, ownership and operation of, the Facilities as now operated.
All permits, licenses and authorizations of each Seller Party are valid and in full force and effect. No
Seller Party has applied to reduce the number of licensed or certified beds of any of the Facilities or to move or transfer the
right to any or all of the licensed or certified beds of the Facilities to any other location or to amend or otherwise change
the Facilities and/or the number of beds approved by the applicable regulatory authorities, and there are no proceedings or actions
pending or contemplated to reduce the number of licensed or certified beds of any of the Facilities. 

 

Section 6.22         Assessments.
 Except as described on Schedule 6.22, to Seller’s Knowledge, there are no (i) special or other assessments
for public improvements or otherwise now affecting any of the Purchased Property, (ii) any pending or threatened special
assessments affecting the Purchased Property, or (iii) any contemplated improvements affecting any of the Purchased Property
that may result in special assessments affecting any of the Purchased Property.

 

Section 6.23         Title
Encumbrances.   Except as described on Schedule 6.23, Seller is not in default under any of its material
obligations under any recorded agreement, easement or instrument encumbering title to the Real Property, and to Seller’s
Knowledge, there is no default on the part of any other party thereto.

 

Section 6.24         Affordable
Housing Units.  No bedroom or unit at any Facility is leased or reserved for lease as an affordable housing unit or for
low or moderate income residents. No Facility is required to lease or reserve any unit or bedroom as an affordable housing unit
or bedroom or for low or moderate income residents pursuant to a presently existing agreement or requirement of law.

 

Section 6.25         Loans. 

 

 There are
no loans or debts secured by any of the Purchased Property except for (i) loans and debts described on Schedule 6.25,
or (ii) loans and debts reflected on the Title Policy.

 

Section 6.26         No
Other Warranties.  Except for the express representations and warranties of Seller contained in this ARTICLE 6
or in the Deed or Bill of Sale and Assignment, Purchaser acknowledges that Seller has not made, and Purchaser has not relied upon,
any other representation or warranty, express or

 

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implied, with respect to Seller, the Business,
the Purchased Property or the transactions contemplated herein.

 

ARTICLE 7

Representations and warranties of Purchaser

 

Purchaser hereby represents
and warrants to Seller as follows:

 

Section 7.1           Organization
and Standing.  Purchaser is a limited liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the requisite power and authority to own, lease and operate its properties and to carry
on its business as now being conducted. Purchaser has the company power and authority to execute and deliver this Agreement and
to consummate the transactions and to perform its obligations contemplated by this Agreement. Purchaser is, or on or prior to
the Closing will be, duly qualified to do business as a foreign limited liability company in the State of Florida and the Commonwealth
of Kentucky.

 

Section 7.2           Execution
and Delivery.  The execution and delivery of this Agreement, and the consummation of the transactions contemplated
by this Agreement, have been duly authorized by all necessary company action of Purchaser. This Agreement constitutes, and all
instruments required to be executed and delivered by Purchaser before or at the Closing will constitute, the valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms. All persons who have executed
this Agreement on behalf of Purchaser have been duly authorized to do so by all necessary company action of Purchaser and all
persons who execute instruments required to be executed and delivered by Purchaser before or at the Closing shall have been duly
authorized to do so by all necessary company action of Purchaser. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement will:

 

(a)          violate
any provisions of the articles of organization or operating agreement of Purchaser; 

 

(b)          violate
any contract or agreement relating to borrowed money, or any judgment, order, injunction, decree or award against, or binding
upon Purchaser or upon the property or business of Purchaser, which violation would prevent, delay or materially hinder consummation
of the transactions contemplated by this Agreement;

 

(c)          violate
any judgment, order, injunction, decree or award against, or binding upon, Purchaser; or

 

(d)          result
in any breach, violation, default or cancellation of any contract, agreement, mortgage, deed to secure debt, or lease to which
Purchaser is a party or by which Seller is bound and that could have a material adverse effect upon Purchaser’s ability
to consummate the transactions described herein.

 

Section 7.3           Solvency.  Purchaser
is not now insolvent, and will not be rendered insolvent by completion of the transactions contemplated herein. For purposes of
the preceding sentence, “insolvent” means, upon completion of the Closing, (i) that the fair market value of Purchaser’s
assets is less than the sum of Purchaser’s debts and other liabilities or (ii) Purchaser has inadequate cash flow to service
its debts as they come due. Upon the completion of the transactions contemplated herein, Purchaser will have adequate capital
for the purposes of engaging in the Business and any business or transaction in which Purchaser is or will engage.

 

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Section 7.4           Consent
of Third Parties.  Except for the licenses and permits described in Schedules 6.8 and 6.21, no consent
of any third party is required as a condition to the entering into, performance or delivery of this Agreement by Purchaser, other
than such consents as would not, in any individual case or in the aggregate, have a material adverse effect upon Purchaser’s
ability to consummate the transactions contemplated by this Agreement.

 

Section 7.5           No
Governmental Approvals.  To Purchaser’s knowledge, for the requirement for Purchaser or its designee to obtain
the licenses and permits described in Schedules 6.8 and 6.21, 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 Purchaser of
this Agreement or the taking of any action contemplated by this Agreement, which has not been obtained. Notwithstanding the foregoing,
Purchaser makes no representation or warranty regarding applicability of the HSR Act to the transactions contemplated herein.

 

Section 7.6           Brokers,
Finders. Purchaser has not retained any broker or finder in connection with the transactions contemplated hereby so as
to give rise to any valid claim against Seller for any brokerage or finder’s commission, fee, or similar compensation.

 

ARTICLE
8

Indemnification

 

Section 8.1           Indemnification
by Seller. Following the Closing, each entity comprising the Seller shall jointly and severally indemnify, hold harmless
and defend Purchaser from and against any and all losses, damages, costs, expenses, liabilities, obligations and claims of any
kind (including, without limitation, reasonable attorneys’ fees and other legal costs and expenses) (collectively, “Losses”)
which Purchaser may at any time suffer or incur, or become subject to, as a result of or in connection with:

 

(a)          any
breach or inaccuracy of any of the representations and warranties made by Seller in this Agreement as of the date made or reaffirmed
by Seller;

 

(b)          any
failure by Seller to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or
obligations under this Agreement;

 

(c)          the
Excluded Liabilities; 

 

(d)          the
failure to comply with applicable bulk sales laws; or

 

(e)          any
federal, state, or local income, payroll, sales and use, ad valorem or other taxes payable by Seller or for which Seller is liable
in connection with any period prior to the Closing Date, and any interest or penalties thereon.

 

Section 8.2           Indemnification
by Purchaser.  Following the Closing, Purchaser shall indemnify and hold harmless Seller from and against, and reimburse
Seller for, any and all Losses which Seller may at any time suffer or incur, or become subject to, as a result of or in connection
with:

 

(a)          any
breach or inaccuracy of any representations and warranties made by Purchaser in or pursuant to this Agreement;

 

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(b)          any
failure by Purchaser to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities
or obligations under this Agreement; or

 

(c)          the
Assumed Liabilities.

 

Section
8.3           Indemnification Limits; Survival.

 

(a)          Purchaser
Indemnification Limits; Survival. Purchaser shall not be entitled to any indemnification from Seller under Section 8.1(a)
or Section 8.1(b) unless and until the aggregate amount of indemnifiable claims of Purchaser under this Agreement exceeds
Fifty Thousand and No/100 U.S. Dollars ($50,000), excluding attorneys’ fees and costs (the “Seller Threshold”),
at which point Seller shall be liable for all indemnifiable claims of Purchaser under Section 8.1(a) and Section 8.1(b).
 Seller’s liability for indemnification under Section 8.1(a) and Section 8.1(b) shall not in any case exceed
Three Million and No/100 Dollars ($3,000,000.00), excluding attorneys’ fees and costs (the “Indemnification Cap”);
provided, however, that neither the Seller Threshold nor the Indemnification Cap shall apply in the case of: (i)
fraud on the part of Seller; (ii) any claims arising under Section 8.1(a) with respect to the representations and warranties
contained in Section 6.1, Section 6.2, Section 6.3, Section 6.5, Section 6.17, or Section
6.18 (Seller's liability for which shall be limited to the Purchase Price); or (iii) any claims arising under Section 8.1(c),
Section 8.1(d), or Section 8.1(e). All of Seller’s representations and warranties under this Agreement shall
survive for a period of fourteen (14) months following the Closing Date. Purchaser’s right to make any claim for indemnification
against Seller under Section 8.1(a), Section 8.1(b) and Section 8.1(d) shall expire at the end of the fourteenth
(14th) month following the Closing; provided, however, that any claim for which Purchaser has given written notice prior
to expiration of such fourteenth (14th) month anniversary shall survive until finally adjudicated; and further provided
that Purchaser’s right to make any claim for indemnification pursuant to Section 8.1(c) shall not expire
and any claim for indemnification pursuant to Section 8.1(e) shall survive for the applicable statute of limitations period
for collection of the applicable tax.

 

(b)          Seller
Indemnification Limits; Survival. Seller shall not be entitled to any indemnification from Purchaser under Section 8.2(a)
or Section 8.2(b) unless and until the aggregate amount of indemnifiable claims of Seller under this Agreement, exceeds
Fifty Thousand and No/100 U.S. Dollars ($50,000), excluding attorneys’ fees and costs (the “Purchaser Threshold”),
at which point Purchaser shall be liable for all indemnifiable claims of Seller under Section 8.2(a) and Section 8.2(b).
Purchaser’s liability for indemnification under Section 8.2(a) and Section 8.2(b) shall not in any case exceed
Three Million and No/100 Dollars ($3,000,000.00), excluding attorneys’ fees and costs (the “Purchaser Indemnification
Cap”); provided, however, that neither the Purchaser Threshold nor the Purchaser Indemnification Cap shall
apply in the case of: (i) fraud on the part of Purchaser; (ii) any claims arising under Section 8.2(a) with respect to
the representations and warranties contained in Section 7.1, Section 7.2, and Section 7.6 (Purchaser's liability
for which shall be limited to the Purchase Price); or (iii) any claims arising under Section 8.2(c). All of Purchaser’s
representations and warranties under this Agreement shall survive for a period of fourteen (14) months following the Closing Date,
provided, however, that any claim for which Seller has given written notice prior to expiration of such fourteen (14) month
anniversary shall survive until finally adjudicated; and further provided that Purchaser’s right to make any
claim for indemnification pursuant to Section 8.2(c) shall not expire.

 

(c)          For
purposes of determining the amount of Losses that are subject to indemnification hereunder with respect to any events, facts or
circumstances, after determining whether or not such facts, events or circumstances give rise to a breach of a representation
or warranty (after giving full effect to any qualifications as to materiality or similar standards, or of lack of “material
adverse effect,” contained in

 

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such representation
and warranty), the determination of the amount of Losses for such breach of representation and warranty, as it relates to such
facts, events or circumstances, shall be made without giving effect to any qualifications as to materiality or similar standards,
or the lack of “material adverse effect” contained in such representation or warranty.

 

(d)          Any
payments made pursuant to ARTICLE 8 of this Agreement shall be treated as a purchase price adjustment for income tax purposes.

 

Section 8.4           Procedures
Regarding Third Party Claims. The procedures to be followed by Purchaser and Seller with respect to indemnification hereunder
regarding claims by third parties shall be as follows:

 

(a)          Promptly
after receipt by Purchaser or Seller, as the case may be, of notice of the commencement of any action or proceeding or the assertion
of any claim by a third person, which the party receiving such notice has reason to believe may result in a claim by it for indemnity
pursuant to this Agreement, such person (the “Indemnified Party”) shall give notice of such action, proceeding
or claim to the party against whom indemnification is sought (the “Indemnifying Party”), setting forth in reasonable
detail the nature of such action or claim, including copies of any written correspondence from such third person to such Indemnified
Party.

 

(b)          The
Indemnifying Party shall be entitled, at its own expense, to assume and control such defense with counsel chosen by the Indemnifying
Party and approved by the Indemnified Party, which approval shall not be unreasonably withheld or delayed. The Indemnified Party
shall be entitled to participate in such defense after such assumption at the Indemnified Party’s own expense. Upon assuming
such defense, the Indemnifying Party shall have full rights to enter into any monetary compromise or settlement which is dispositive
of the matters involved; provided that such settlement is paid in full by the Indemnifying Party and will not have any continuing
material adverse effect upon the Indemnified Party.

 

(c)          With
respect to any action, proceeding or claim as to which the Indemnifying Party shall not have exercised its right to assume the
defense, the Indemnified Party may assume and control the defense of and contest such action, proceeding or claim with counsel
chosen by it. The Indemnifying Party shall be entitled to participate in the defense of such action, the cost of such participation
to be at its own expense. The Indemnifying Party shall be obligated to pay the reasonable attorneys’ fees and expenses of
the Indemnified Party to the extent that such fees and expenses relate to claims as to which indemnification is due under Section
8.1 or Section 8.2 hereof, as the case may be. The Indemnified Party shall have full rights to dispose of such action
and enter into any monetary compromise or settlement; provided, however, in the event that the Indemnified Party
shall settle or compromise any claims involved in the action insofar as they relate to, or arise out of, the same facts as gave
rise to any claim for which indemnification is due under Section 8.1 or Section 8.2 hereof, as the case may be,
it shall act reasonably and in good faith in doing so.

 

(d)          Both
the Indemnifying Party and the Indemnified Party shall cooperate fully with one another in connection with the defense, compromise
or settlement of any such claim, proceeding or action, including, without limitation, by making available to the other all pertinent
information and witnesses within its control.

 

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Section 8.5           General
Qualifications on Indemnification.  Notwithstanding any provision to the contrary, the indemnification rights set forth
in Section 8.1 and Section 8.2 shall be subject to the following:

 

(a)          The
liability of an Indemnifying Party with respect to any indemnification claim shall be reduced by the amount of any tax benefit
actually realized or any insurance proceeds received by Indemnified Party as a result of any damages, upon which such claim is
based, and shall include any tax detriment actually suffered by the Indemnified Party as a result of such damages. The amount
of such tax benefit or detriment shall be determined by taking into account the effect, if any, and to the extent determinable,
of timing differences resulting from the acceleration or deferral of items of gain or loss resulting from such damages.

 

(b)          Damages
shall include actual damages and shall not include any special, punitive, multiplied or consequential damages, or lost profits,
except to the extent the same are included in a third-party judgment against the Indemnified Party, the right to which is hereby
waived by both parties.

 

(c)          Upon
payment in full of any indemnification claim, the Indemnifying Party shall be subrogated to the extent of such payment to the
rights of the Indemnified Party against any person or entity with respect to the subject matter of such indemnification claim.

 

(d)          An
Indemnified Party may not recover for any losses otherwise indemnifiable under Section 8.1(a), Section 8.1(b), Section
8.2(a) or Section 8.2(b) if such Indemnified Party had actual (and not imputed) knowledge prior to Closing of the breach,
inaccuracy or failure giving rise to such losses. 

 

(e)          An
Indemnifying Party shall be relieved of its duty to indemnify an Indemnified Party hereunder if and to the extent the Indemnified
Party fails to use commercially reasonable efforts in good faith to mitigate its damages, including, but not limited to, failure
to give timely notice to its insurance carriers and to pursue recovery under applicable policies of insurance.

 

(f)          Any
amounts due to Purchaser from Seller pursuant to this ARTICLE 8 shall be paid first from the Holdback Amount in accordance
with the Escrow Agreement, until the Holdback Amount has been exhausted or released.

 

Section 8.6           Exclusivity.
 Following the Closing, in the absence of actual fraud on the part of either party (in which case the other party may
avail itself of statutory and common law remedies for fraud), the right to receive indemnification under this ARTICLE 8
shall be the sole and exclusive remedy of Purchaser or Seller for monetary damages of any kind with respect to the representations
and warranties contained in this Agreement (including any certificate certifying the truth or accuracy of any provision of this
Agreement) or conduct otherwise relating to the negotiation and consummation of the purchase and sale of the Purchased Property
and Business hereunder. This provision shall not, however, be deemed to limit either party's remedies for any breach of the other
party's post-closing obligations under the Post-Closing Management Agreement or any other document or instrument executed at Closing
which provides for performance by a party from and after Closing, including without limitation any breach of Section 10.7 hereof.

 

Section 8.7           Effective
Upon Closing.  The provisions of this ARTICLE 8 shall become effective upon completion of the Closing, and shall
have no force and effect prior to the Closing or if this Agreement is terminated prior to Closing.

 

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ARTICLE 9

Default and Termination

 

Section 9.1           No
Default Termination.

 

This Agreement and the transactions contemplated
hereby may be terminated at any time prior to Closing as follows:

 

(a)          in
its entirety by mutual written agreement of Seller and Purchaser;

 

(b)          in
its entirety 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 best efforts to lift), in each case permanently
restraining, enjoining, or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling,
or other action shall have become final and nonappealable; or

 

(c)          by
the Purchaser in its entirety if any Seller representations, warranties, covenants or agreements contained in this Agreement (other
than the conditions contained in Section 5.2 hereof) are untrue or become untrue in any material respect, which breach
cannot be or has not been cured within five (5) business days after the giving of written notice by the Purchaser to the Seller
specifying such breach. 

 

Upon termination of this Agreement prior
to Closing in accordance with this Section 9.1, except as otherwise expressly provided herein, Purchaser shall be entitled
to a refund of the Deposit and the parties shall have no further liability hereunder except that the following provisions of this
Agreement shall survive any such termination: Section 4.1(c), Section 4.5, and Section 4.6(b)(vi).

 

Section 9.2           Default
by Purchaser.

 

If any time prior to Closing Purchaser
defaults under this Agreement (and Seller has not defaulted under this Agreement) and all conditions precedent and contingencies
to Purchaser’s obligation have been satisfied, then as Seller’s sole and exclusive remedy, Escrow Agent (after first
giving Purchaser three (3) business days prior written notice) shall pay to Seller the Deposit. Purchaser and Seller acknowledge
that it is impossible to estimate precisely the damages which might be suffered by Seller upon Purchaser’s default and that
the Deposit represents a reasonable estimation of such damages. Seller’s retention of the Deposit is intended not as a penalty,
but as full liquidated damages as provided under state law. The right to receive and retain the Deposit as full liquidated damages
is Seller’s sole and exclusive remedy in the event of default hereunder by Purchaser (excluding, however, Purchaser’s
indemnity under Section 4.1(c) above), and Seller (except with respect to such indemnity) hereby covenants that Seller
shall not sue Purchaser: (a) for specific performance of this Agreement, or (b) to recover actual damages in excess of the Deposit.
The Deposit shall constitute the stipulated damages of Seller, and Purchaser shall thereupon be relieved of all further obligations
and liabilities arising out of this Agreement (except as otherwise specifically provided herein), it being agreed that the actual
damages of Seller are impossible to ascertain and said amount represent the reasonable damages of Seller.

 

Section 9.3           Default
by Seller.

 

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So long as Purchaser has not defaulted
under this Agreement and all conditions precedent and contingencies to Seller’s obligations hereunder have been satisfied,
in the event: (x) Seller breaches this Agreement in any material respect, or (y) any representation or warranty made by Seller
in this Agreement is untrue, false or incorrect in any material respect when made or reaffirmed by Seller, or (z) Seller shall
not have performed any of Seller’s obligations herein set forth in any material respect, then as Purchaser’s sole
and exclusive remedy, Purchaser shall be entitled to elect either to:

 

(a)          close
the transaction contemplated by this Agreement, thereby waiving such breach, default or failure, provided, however, Purchaser
may cure any breach, default, or failure of Seller, which is susceptible to cure by the payment of money and deduct from the Purchase
Price all sums so paid by Purchaser, together with all reasonable costs and expenses incurred by Purchaser in effecting such cure;

 

(b)          postpone
Closing hereunder for thirty (30) days, or such longer period of time as Purchaser may designate (subject to Seller’s approval
of such longer period, which approval shall not be unreasonably withheld or delayed), during which time any such breach, default
or failure shall be cured by Seller and if not then cured, Purchaser may (and shall) elect either to proceed under Section
9.3(a), Section 9.3(c), or Section 9.3(d) hereof;

 

(c)          seek
specific performance of this Agreement and of Seller’s obligations, duties and covenants hereunder; or

 

(d)          terminate
this Agreement and receive a refund of the Deposit, thereby waiving any right hereunder to seek damages. Provided, however, in
the event of a termination pursuant to this Section 9.3(d), Seller shall reimburse Purchaser for Purchaser’s actual
out of pocket third party expenses incurred by Purchaser in connection with its due diligence activities upon reasonable evidence
thereof within fifteen (15) days following notice of Purchaser's termination of this Agreement pursuant to this Section 9.3(d);
provided, however, such reimbursement by Seller shall not exceed a total of Two Hundred Fifty Thousand and No/100 U.S. Dollars
($250,000.00) in the aggregate.

 

Section 9.4           Survival;
No Right to Damages.

 

(a)          Except
as expressly set forth herein, upon termination of this Agreement prior to Closing in accordance with Section 9.1, Section
9.2, or Section 9.3 above, and except as otherwise expressly provided herein, following which termination the parties
shall have no further liability under this Agreement, provided, however, that the following provisions of this Agreement
shall survive any such termination: Section 4.1(c), Section 4.5, and Section 4.6(b)(vi).

 

(b)          Except
as expressly set forth herein to the contrary, neither party shall have any right to seek damages for or on account of this Agreement
or the breach hereof.

 

ARTICLE
10

Miscellaneous

 

Section 10.1         Access
to Books and Records after Closing. Following the Closing, Purchaser shall give Seller or its authorized representatives
access, during normal business hours and upon prior notice, to such books and records constituting or relating to the Purchased
Property as shall be reasonably requested by Seller in connection with the preparation and filing of the party’s tax returns,
to comply with regulatory requirements, to defend or discharge the Excluded Liabilities, or for any other valid business purpose,
and to make extracts and copies of such books

 

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and records. Purchaser agrees to retain
all books and records included as part of the Purchased Property for at least two (2) years following the Closing Date.

 

Section 10.2         Notices.
   All notices, requests, demands and other communications under this Agreement shall be in writing and shall
be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given,
(ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, and electronic confirmation
of receipt is obtained promptly after completion of transmission, or if sent via electronic mail (e.g. email) with receipted
delivery, (iii) on the day after delivery to FedEx or similar overnight courier, or (iv) on the tenth (10th) day after
mailing, if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, return receipt requested,
postage prepaid and properly addressed, to the party as follows:

 

 

	If to Purchaser:	 	American Realty Capital VII, LLC
	 	 	Attn: Edward M Weil., Jr.
	 	 	405 Park Avenue, 2nd Floor
	 	 	New York, New York 10022
	 	 	Email:  mweil@arlcap.com
	 	 	 
	With a copy (which will not constitute 	 	Jesse Galloway
	notice) to:	 	American Realty Capital VII, LLC
	 	 	405 Park Avenue, 14th Floor
	 	 	New York, New York 10022
	 	 	Email: jgalloway@arlcap.com
	 	 	 
	With a copy (which will not constitute 	 	Michael A. Okaty
	notice) to:	 	Foley & Lardner LLP
	 	 	111 North Orange Avenue, Suite 1800 
	 	 	Orlando, Florida  32801
	 	 	Email:  mokaty@foley.com
	 	 	 
	If to Seller:	 	Allegro
	 	 	c/o Allegro Senior Living, LLC
	 	 	212 South Central Avenue
	 	 	Suite 201
	 	 	Attention Laurence A. Schiffer, CEO
	 	 	St. Louis, MO 63105
	 	 	Email: lschiffer@lovesavings.net
	 	 	 
	With a copy (which will not constitute 	 	Theresa Marie Kenney, Esq., B.C.S.
	notice) to:	 	Duss, Kenney, Safer, Hampton & Joos, P.A.
	 	 	4348 Southpoint Boulevard, Suite 101
	 	 	Jacksonville, Florida 32216
	 	 	Email: tkenney@jaxfirm.com
	 	 	 
	 	 	And
	 	 	 
	 	 	Allegro
	 	 	c/o Allegro Senior Living, LLC
	 	 	212 South Central Avenue, Suite 301

 

    	45

    	 

    

  

	 	 	Attention Robert B. Karn, CFO
	 	 	St. Louis, MO 63105
	 	 	Email:  rkarn@allegroliving.com

 

Any party may change the address to which
notices are to be sent to it by giving written notice of such change of address to the other parties in the manner herein provided
for giving notice. Notice given by a party's attorney in accordance with this Section 10.2 shall (a) constitute notice
from said party, and (b) not be considered an improper direct contact from the sending attorney to a "person known to be
represented by counsel".

 

Section 10.3         Good
Faith; Cooperation. The parties shall in good faith undertake to perform their obligations in this Agreement, to satisfy
all conditions and to cause the transactions contemplated by this Agreement to be carried out promptly in accordance with its
terms. The parties shall cooperate fully with each other and their respective representatives in connection with any actions required
to be taken as part of their respective obligations under this Agreement.

 

Section 10.4         Assignment;
Exchange Cooperation; Successors in Interest. Neither Purchaser nor Seller may assign any of their respective rights
hereunder, except with the prior written consent of the other (which shall not be unreasonably withheld or delayed); provided,
however, that without additional consent from Seller prior to the Closing Purchaser may assign its rights under this Agreement
in whole or in part, to any affiliate or related entity of Purchaser, including without limitation the special purpose entities
identified in Schedule 10.4 attached hereto. Any such assignee shall be deemed to have made the same representations
to Seller. This Agreement is binding upon the parties and their respective successors or assigns and inures to the benefit of
the parties and their permitted successors and assigns. Any assignment of this Agreement shall not serve to release AMERICAN REALTY
CAPITAL VII, LLC, a Delaware limited liability company from any obligation or liability hereunder nor shall any partial assignment
of this Agreement serve to limit the Seller's rights or remedies hereunder or Seller's recourse to the entirety of the Deposit
for and on account of any breach of this Agreement by any Purchaser.

 

Section 10.5         No
Third Party Beneficiaries. The parties do not intend to confer any benefit under this Agreement on anyone other than
the parties, and nothing contained in this Agreement shall be deemed to confer any such benefit on any other person, including
any current or former employee or agent of Seller or any dependent or beneficiary of any of them.

 

Section 10.6         Severability. Any
determination by any court of competent jurisdiction of the invalidity of any provision of this Agreement that is not essential
to accomplishing its purposes shall not affect the validity of any other provision of this Agreement, which shall remain in full
force and effect and which shall be construed as to be valid under applicable law.

 

Section 10.7         Purchaser
Records Rights. Upon Purchaser’s request, for a period of one (1) year after Closing, Seller shall make the financial
statements, including balance sheets, income statements, stockholders’ equity statements and cash flow statements and related
notes prepared in accordance with United States generally accepted accounting standards, 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, expenditures, contributions and distributions reasonably necessary to complete an audit pertaining to the Purchased
Property for the three (3) most recent full calendar years and the interim period of the current calendar year (collectively,
the “Records”) available to Purchaser and/or its auditors for inspection, copying and audit by Purchaser’s
designated accountants, and at Purchaser’s expense. Seller shall provide Purchaser and/or its auditors, but without expense
to Seller,

 

    	46

    	 

    

  

with copies of, or access to, such factual
and financial information as may be reasonably requested by Purchaser or its designated accountants, and in the possession or
control of Seller, to enable Purchaser to file any filings required by the Securities and Exchange Commission (the “SEC”)
in connection with the purchase of the Purchased Property. Seller understands and acknowledges that Purchaser is required to file
audited financial statements related to the Purchased Property with the SEC within seventy-one (71) days of the Closing Date and
agrees to provide any records and requested reasonable representations and/or certifications to the Purchaser’s auditors,
on a timely basis to facilitate Purchaser’s timely submission of such audited financial statements. The provisions of this
Section 10.7 shall survive Closing.

 

Section
10.8         Controlling Law; Integration; Amendment; Waiver.

 

(a)          This
Agreement shall be governed by and construed in accordance with the laws and case decisions of the State of Florida applicable
to contracts made and to be performed therein.

 

(b)          This
Agreement and the other contracts, documents and instruments to be delivered pursuant to this Agreement supersede all prior negotiations,
agreements, information memoranda, letters of intent and understandings between the parties with respect to their subject matter,
whether written or oral, constitute the entire agreement of the parties with respect to their subject matter, and may not be altered
or amended except in writing signed by Purchaser and Seller. Neither of the parties has made or relied upon any representation,
warranty or assurances in connection with the transactions contemplated hereunder other than those expressly made herein.

 

(c)          The
failure of any party at any time or times to require performance of any provision of this Agreement shall in no manner affect
its right to enforce the same, and no waiver by any party of any provision (or of a breach of any provision) of this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed or construed either as a further or continuing waiver
of any such provision or breach or as a waiver of any other provision (or of a breach of any other provision) of this Agreement.

 

Section 10.9        Time. Time
is of the essence with respect to this Agreement.

 

Section 10.10      Survival. For
the avoidance of doubt and notwithstanding anything contrary in this Agreement, Section 1.3, Section 4.5, Section
4.6, Section 4.7, Section 4.9, Section 4.11, Section 5.8, ARTICLE 8, and ARTICLE 10
of this Agreement shall survive the Closing of this Agreement.

 

Section 10.11     Eminent
Domain - Condemnation. If, prior to Closing, all or portion of Real Property comprising at least five percent (5%) of
the Real Property associated with any Facility or the St. Petersburg Raw Land, as applicable, is subject to an eminent domain
or condemnation proceeding, Seller, immediately upon learning thereof, shall give written notice to Purchaser. Thereafter, Purchaser
shall have a period of thirty (30) days within which to elect, by written notice to Seller, to terminate this Agreement in its
entirety. Upon any such termination, the entire Deposit shall be returned to Purchaser, and the Agreement shall become null and
void in its entirety. If no such election is timely made, Purchaser shall be deemed to have waived its rights under this paragraph,
except that, if the transaction contemplated hereby closes, Purchaser shall be entitled to the proceeds or the right to negotiate,
settle and collect the proceeds of such condemnation award, and Seller shall execute and deliver all documents reasonably requested
of Seller in order to effectuate this section.

 

Section 10.12      Risk
Of Loss. Seller assumes all risks and liability for loss, damage, destruction or injury by fire, storm, accident or any
other casualty to the Real Property from all causes until the Closing

 

    	47

    	 

    

  

has been consummated. In the event of
any damage or destruction prior to Closing at any Facility with an estimated repair cost of greater than one and one-half percent
(1.5%) of the Purchase Price allocated to such Facility pursuant to Section 3.3(a) hereof, Purchaser shall have the option exercisable
by written notice to Seller within thirty (30) days after Purchaser is notified of such casualty, to terminate this Agreement
by notice thereof to Seller, in which case the parties shall have no further rights or obligations under the Agreement and the
entire Deposit shall be returned to Purchaser; or Purchaser may elect to close this transaction and, in such event Purchaser shall
be entitled to receive the full amount of any proceeds of such insurance payable on account of loss, damage or destruction after
the date hereof and Seller shall be liable for the payment to Purchaser of all deductibles under applicable insurance policies.
Seller covenants to execute such assignments, drafts and other instruments as may be required to effectuate this Section 10.12
hereof.

 

Section 10.13         Attorneys’
Fees.  In the event either party brings an action to enforce or interpret any of the provisions of this Agreement, the
“prevailing party” in such action shall, in addition to any other recovery, be entitled to its reasonable attorneys’
fees and expenses arising from such action and any appeal or any bankruptcy action related thereto, whether or not such matter
proceeds to court. For purposes of this Agreement, “prevailing party” shall mean, in the case of a person asserting
a claim, such person is successful in obtaining substantially all of the relief sought, and in the case of a person defending
against or responding to a claim, such person is successful in denying substantially all of the relief sought.

 

Section 10.14         Covenant
Not to Compete.  For a period of three (3) years following the Closing, each party comprising the Seller agrees that
neither it nor any its affiliates, or other entities which any party comprising the Seller controls, is controlled by or is under
common control with, shall, directly or indirectly, develop, own, invest in, finance, manage or franchise any facility similar
to the Business within a radius of five (5) miles from any portion of the Real Property. For the avoidance of doubt and without
limitation, any facility operating as an assisted living facility and/or memory care facility, an independent living facility,
and/or a skilled nursing facility shall be deemed to be similar to the Business for purposes of this Section 10.14. The
provisions of this Section 10.14 shall survive Closing.

 

Section 10.15         Waiver
of Jury Trial.  The parties agree that no party to this Agreement shall seek a jury trial in any lawsuit, proceeding,
counterclaim or other litigation based upon, or arising out of, this Agreement or the dealings or the relationship between them.

 

Section 10.16         Construction.
This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact
that it may have been prepared by counsel for one of the parties, it being recognized that both Seller and Purchaser have contributed
with the advice of counsel to the preparation of this Agreement.

 

Section 10.17         Execution
in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
This Agreement may be executed by counterpart signatures and all counterpart signature pages shall constitute a part of this Agreement.
Delivery of a counterpart hereof via facsimile transmission or by electronic mail transmission, including but not limited to an
Adobe file format document (also known as a PDF file), shall be as effective as delivery of a manually executed counterpart hereof.

 

[ Signatures commence on the
following page. ]

 

    	48

    	 

    

 

IN WITNESS WHEREOF,
each of the parties hereto has signed and sealed this Asset Purchase Agreement as of the day and year first above written.

 

	 	SELLER:
	 	 
	 	THE ALLEGRO AT ABACOA, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO
	 	 	 	 
	 	THE ALLEGRO AT HELMWOOD, LLC
	 	a Kentucky limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO
	 	 	 	 
	 	COLLEGE HARBOR PROPERTIES, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	its sole managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO
	 	 	 	 
	 	THE ALLEGRO AT WILLOUGHBY, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO

 

    	 

    	 

    

  

	 	THE ALLEGRO AT EAST LAKE, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	its sole managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO
	 	 	 	 
	 	HARBOR TOWERS, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC
	 	 	its sole managing member
	 	 	 	 
	 	 	By:	/s/ Laurence A. Schiffer
	 	 	Print Name: 	Laurence A. Schiffer
	 	 	Print Title:	Chairman/CEO
	 	 	 	 
	 	PURCHASER:
	 	 	 	 
	 	AMERICAN REALTY CAPITAL VII, LLC,
	 	a Delaware limited liability company
	 	 	 	 
	 	 	By:	/s/ Edward M. Weil, Jr.
	 	 	Print Name: 	Edward M. Weil, Jr.
	 	 	Print Title:	President

 

SIGNATURE
PAGE TO

ASSET PURCHASE
AGREEMENT

 

    	 

    	 

    

 

Exhibit
A

 

Escrow Agreement

 

[ See attached. ]

 

    	 

    	 

    

  

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this “Agreement”)
is made effective as of the ____ day of August, 2014 (the “Effective Date”), by and among AMERICAN
REALTY CAPITAL VII, LLC, a Delaware limited liability company (“Purchaser”) and THE ALLEGRO AT
ABACOA, L.L.C., a Florida limited liability company, THE ALLEGRO AT HELMWOOD, LLC, a Kentucky limited liability company,
COLLEGE HARBOR PROPERTIES, L.L.C., a Florida limited liability company, THE ALLEGRO AT WILLOUGHBY, L.L.C., a Florida
limited liability company, THE ALLEGRO AT EAST LAKE, L.L.C., a Florida limited liability company, and HARBOR TOWERS,
L.L.C., a Florida limited liability company (collectively, the “Seller”), and Stewart
Title Guaranty Company, as escrow agent (“Escrow Agent”). Each party to this Agreement is
sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS:

 

A.           Purchaser
and Seller are parties to that certain Asset Purchase Agreement dated as of the ___ day of August, 2014 (the “Purchase
Agreement”), pursuant to which Purchaser has agreed to purchase from Seller certain skilled nursing facilities and
related assets located in the State of Florida and the State of Kentucky, as more particularly described therein.

 

B.           Purchaser
has deposited with the Escrow Agent certain Escrowed Funds described herein. The Parties intend that the Escrow Agent shall hold
and disburse the Escrowed Funds in accordance with the terms of this Agreement.

 

NOW THEREFORE, for and in consideration
of the execution of this document and the mutual promises and covenants made herein, the receipt and sufficiency of which are
hereby mutually acknowledged, the Parties agree as follows:

 

1.          Each
of the Recitals above is true and correct and is hereby incorporated by reference.

 

2.          ESCROWED
FUNDS

 

(a)        Escrowed
Funds. Purchaser has deposited with the Escrow Agent and Escrow Agent hereby acknowledges receipt of Three Million and No/100
U.S. Dollars ($3,000,000) (the “Escrowed Funds”). The Escrow Agent shall hold and disburse the Escrowed
Funds in accordance with the terms of this Agreement.

 

3.          ESCROW
AGENT

 

(a)                    Appointment
of Escrow Agent. Seller and Purchaser hereby appoint the Escrow Agent, with a mailing address of One Washington Mall, Suite
1400 Boston, MA 02108,

 

    	 

    	 

    

  

as the Escrow Agent
hereunder to receive, hold and disburse the Escrowed Funds, and to otherwise perform the duties of the Escrow Agent pursuant to
this Agreement. Escrow Agent hereby accepts its appointment as the escrow agent and agrees to receive, hold and disburse the Escrowed
Funds in accordance with the terms of this Agreement and will not disburse or otherwise transfer any portion of the Escrowed Funds
to any person other than pursuant to the express provisions hereof.

 

(b)          Escrow
Agent Responsibilities. The Escrow Agent executes this Agreement solely for the purpose of accepting the escrow created hereby,
on the terms and conditions set forth in it, and undertakes to perform the duties, but only the duties, specifically set forth
herein. Escrow Agent shall hold the Escrowed Funds in a single non-interest bearing account with Stewart Title Guaranty Company.
The account shall be in the name of Escrow Agent but shall not be the property of the Escrow Agent. Escrow Agent shall have no
liability for any loss which may result from any failure of the institution in which the Escrowed Funds are placed; provided,
however, that notwithstanding anything herein to the contrary, in the event of a loss resulting from the failure of the
financial institution in which the Escrowed Funds are placed, Seller and Purchaser shall have the same remedies generally available
to depositors of the financial institution, including, without limitation, all remedies available at law or in equity. The Escrow
Agent is not required to secure the performance of its duties by bond or otherwise. Seller and Purchaser hereby release the Escrow
Agent from all liability for any punitive, incidental, consequential, or other damages or obligations to them for any act or omission
by the Escrow Agent or any of its agents, partners, or employees performed in good faith in the exercise of its or their best
judgment and in a manner reasonably believed by it or them to be authorized or within the duties, rights, powers, privileges,
or direction conferred on the Escrow Agent by this Agreement, except for willful misconduct, negligence, tortious conversion of
any Escrowed Funds or documents, instruments or items, if any, delivered to the Escrow Agent hereunder, or breach of this Agreement
by the Escrow Agent. Without limiting the generality of the foregoing, the responsibilities of the Escrow Agent are further defined,
limited, and qualified by the following:

 

(1)         the
duties and obligations of the Escrow Agent will be determined solely by the express provisions of this Agreement, and this Agreement
is not to be interpreted or construed to impose on the Escrow Agent any implied duties, covenants, or obligations;

 

(2)         the
Escrow Agent may execute any of its rights, powers, or responsibilities under this Agreement either directly or by or through
its agents, partners, employees, or attorneys, and it will not be liable for any error of judgment made in good faith by an authorized
agent, partner, employee, or attorney of it, unless it is proven that the Escrow Agent was negligent in ascertaining the pertinent
facts or in employing or supervising the agent, partner, or employee;

 

(3)         the
Escrow Agent will not be liable to any person with respect to any action taken, suffered, or omitted by it in accordance with
this Agreement or in accordance with written instructions signed by Seller and Purchaser or an order issued by a court of competent
jurisdiction, except to the extent arising as a result of Escrow Agent’s negligence, willful misconduct or breach of this
Agreement;

 

    	 

    	 

    

  

(4)         the
Escrow Agent may rely on any document given to it pursuant to this Agreement without verifying the authenticity of it, the genuineness
of any signature on it, or the authority of the person signing the document or purporting to give it to the Escrow Agent, and
the Escrow Agent is not obligated to examine or pass upon the validity, execution, binding effect, or sufficiency of either this
Agreement or any amendment or supplement to it, so long as the Escrow Agent shall in good faith believe the same to be genuine,
to have been signed or presented by the person or parties purporting to sign the same and to conform to the provisions of this
Agreement;

 

(5)         the
Escrow Agent will be free from any liability when acting in good faith in accordance with any written advice or opinion received
from legal counsel, an independent certified public accountant, or other expert rendering advice or an opinion within his area
of expertise, except to the extent arising as a result of Escrow Agent’s negligence, willful misconduct or breach of this
Agreement;

 

(6)         nothing
in this Agreement will be deemed to impose on the Escrow Agent any liability to any person as a result of any failure of the Escrow
Agent to qualify to do business or to act as a fiduciary or otherwise in any jurisdiction; and

 

(7)         the
Escrow Agent is not under any duty to give the Escrowed Funds held in escrow by it pursuant to this Agreement any greater degree
of care than it gives its own similar property, and the Escrow Agent makes no representation as to the value, validity or genuineness,
of any document or instrument delivered to it.

 

(c)          Disbursement
of Escrowed Funds.

 

(1)         Upon
Closing. Upon Closing (as defined in the Purchase Agreement) of the transactions contemplated by the Purchase Agreement, Purchaser
and Seller shall jointly deliver to the Escrow Agent irrevocable wire transfer instructions and the Escrow Agent shall release
and deliver the Escrowed Funds to the parties identified in such instructions in accordance with such instructions. Such instructions
may be delivered via facsimile.

 

(2)         Upon
Termination of Purchase Agreement. The Escrow Agent shall immediately disburse the Escrowed Funds (i) to Purchaser or Seller,
as provided in joint written instructions from Purchaser and Seller to the Escrow Agent, which instructions are delivered
pursuant to Section 3.1(c) or 3.1(d) of the Purchase Agreement or (ii) to Purchaser, in the event that Purchaser terminates the
Purchase Agreement pursuant to Section 3.1(e) of the Purchase Agreement.

 

(3)         Pursuant
to Court Order. The Escrowed Funds shall be paid in accordance with a final order of a court of competent jurisdiction, from
which no appeal has been taken and appeal time expired or, if taken, has become final.

 

(d)          Escrow
Controversy. If a controversy arises before, during, or after the term of this Agreement with respect to the Escrowed Funds
or other documents, instruments or items, if any, delivered to the Escrow Agent hereunder, or the application of any of them,
the Escrow Agent may do either or both of the following: (i) withhold further performance by it pursuant to Section 3(c)(1) or
(2) above until the Escrow Agent receives the joint written

 

    	 

    	 

    

  

instructions of Seller
and Purchaser, in which case the Escrow Agent may act in accordance with such joint written instructions, or (ii) commence or
defend any action or proceeding for or in the nature of interpleader. If a suit or proceeding for or in the nature of interpleader
is brought by or against it, the Escrow Agent may deliver all funds, if any, and other property held by it under this Agreement
into the registry of the court and thereupon will be released and discharged from all further obligations and responsibilities
under this Agreement.

 

(e)          Reimbursement
and Indemnification of Escrow Agent. Purchaser and Seller shall indemnify the Escrow Agent and hold it harmless, upon demand,
from all cost, loss, damage, expense, and liability (including reasonable legal fees and expenses and amounts paid in settlement)
suffered or incurred by it in connection with, or arising out of, the escrow under this Agreement, including any attributable
to a suit or proceeding for or in the nature of interpleader brought by or against the Escrow Agent, except to the extent arising
as a result of Escrow Agent’s negligence, willful misconduct or breach of this Agreement. Other than the foregoing, Escrow
Agent shall not be entitled to any fee or compensation for the services rendered hereunder.

 

(f)          Discretion
of Escrow Agent to File an Interpleader Action in the Event of Dispute. If any Parties to this Agreement shall be in disagreement
about the interpretation of this Agreement, or about their rights and obligations, or the propriety of any action contemplated
by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an action of interpleader in a court of
competent jurisdiction (as “Court”) and deposit the Escrowed Funds or other documents, instruments or items, if any,
delivered to the Escrow Agent hereunder in the registry of the Court. The Escrow Agent shall be indemnified for all costs, including
reasonable attorneys’ fees and costs incurred by it, in connecting with the aforesaid interpleader action, and the Escrow
Agent shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment or other
appropriate order in the interpleader action is received.

 

The Escrow Agent, in the event it is in
doubt about its duties and obligations hereunder as Escrow Agent, shall also have the right, but not the duty, to so notify in
writing Seller and Purchaser and, thereafter, the Escrow Agent shall not be obligated to deliver or release any of the Escrowed
Funds or other documents, instruments or items, if any, delivered to the Escrow Agent hereunder unless: (i) Seller and Purchaser
have jointly directed the Escrow Agent to deliver the Escrowed Funds or other documents, instruments or items, if any, delivered
to the Escrow Agent hereunder, or (ii) a final order by a court of competent jurisdiction, from which no appeal has been taken
and appeal time expired or, if taken, has become final, to which Escrow Agent, Purchaser and Seller are all parties, has been
entered directing the Escrow Agent to take certain action with respect to the Escrowed Funds or other documents, instruments or
items, if any, delivered to the Escrow Agent hereunder.

 

(g)          Resignation
of Escrow Agent. The Escrow Agent may resign upon thirty (30) days written notice to Seller and Purchaser. If a successor
escrow agent is not appointed by Seller and Purchaser within this thirty (30) day period, the Escrow Agent may, but shall have
no duty to, petition a Court 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 Sections
3(c)(1) or (2) above 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 Seller and
Purchaser. The Escrow Agent may be removed, with or without cause, by the Purchaser and Seller acting jointly at any time by providing
written notice to the Escrow Agent.

 

4.          GENERAL
PROVISIONS

 

(a)                Notices.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given (i) on the date of service if served personally on the party to whom notice is to be given, (ii) on the day of transmission
if sent via electronic mail (e.g. email), (iii) on the day after (provided, however, with respect to notices, requests,
demands and other communications given to Purchaser, five (5) days after) delivery to FedEx or similar overnight courier, or (iv)
on the tenth day after (provided, however, with respect to notices, requests, demands and other communications given to Purchaser,
fifteen (15) days after) mailing, if mailed to the party to whom notice is to be given, by first-class mail, registered or certified,
return receipt requested (or, if to Purchaser, via airmail), postage prepaid and properly addressed, to the party as follows:

 

	 	American Realty Capital VII, LLC
	If to Purchaser:	Attn: Edward M Weil., Jr.
	 	405 Park Avenue, 2nd Floor
	 	New York, New York 10022
	 	Email: mweil@arlcap.com
	 	 
	With a copy (which will not	Jesse Galloway
	constitute notice) to:	American Realty Capital VII, LLC
	 	405 Park Avenue, 14th Floor
	 	New York, New York 10022
	 	Email: jgalloway@arlcap.com
	 	 
	With a copy (which will not	Foley & Lardner LLP
	constitute notice) to:	Attn:  Michael A. Okaty
	 	Taylor C. Pancake
	 	111 North Orange Avenue
	 	Suite 1800
	 	Orlando, Florida  32801
	 	Email: tpancake@foley.com
	 	 
	If to Seller:	Allegro
	 	c/o Allegro Senior Living, LLC
	 	212 South Central Avenue
	 	Suite 201
	 	Attention Laurence A. Schiffer, CEO

 

    	 

    	 

    

  

	 	St. Louis, MO 63105
	 	 
	With a copy	Theresa Marie Kenney, Esq., B.C.S.
	(which will not	Duss, Kenney, Safer, Hampton & Joos,
	constitute notice) to:	P.A.
	 	4348 Southpoint Boulevard, Suite 101
	 	Jacksonville, Florida 32216
	 	 
	If to Escrow Agent:	Stewart Title
    Guaranty Company
	 	National Title
    Services
	 	One Washington
    Mall – Suite 1400
	 	Boston, MA 02108
	 	Telephone:(607)
    933-2415
	 	Facsimile:(607) 727-8372

 

Any party may change the address to which
notices are to be sent to it by giving written notice of such change of address to the other parties in the manner herein provided
for giving notice.

 

(b)          Representations.
The Parties do hereby expressly acknowledge, warrant and represent to one another that:

 

(1)         the
terms and conditions of this Agreement were agreed to only after due consideration and consultation with their respective attorneys,
or in the absence of consideration and consultation with an attorney, only after sufficient time to consider and consult an attorney;

 

(2)         the
Parties are competent and were not fraudulently induced, coerced or intimidated to agree to the terms and conditions of this Agreement,
and this Agreement is supported by good and sufficient consideration; and

 

(3)         no
promise, representation, inducement, agreement or warranty other than those specifically set forth herein has been made or relied
upon by the Parties in agreeing to the terms and conditions of this Agreement.

 

(c)          Attorneys’
Fees and Costs. If subsequent to the effective date of this Agreement, litigation should arise among the Parties concerning
this Agreement or its enforcement, the prevailing Party or Parties in such litigation shall be entitled to collect in such action
from the non-prevailing Party or Parties all costs of such litigation, including reasonable attorney’s fees.

 

(d)          Entire
Agreement. This Agreement constitutes the entire and integrated agreement among the Parties and sets forth all promised, covenants,
agreements, conditions and understandings among the Parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous negotiations, representations, understandings, inducements, conditions and agreements, expressed or implied,
or written with respect to the subject matter thereof; provided, however, that as between Purchaser and Seller, this Agreement
does not supersede or amend the Purchase Agreement or modify any of the rights and obligations of the

 

    	 

    	 

    

  

parties thereunder.
This Agreement may not be modified, amended, altered or supplemented, except by written instrument signed by the Parties or their
successors in interest.

 

(e)          Severability.
If any provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any
Party or substantially increase the burden of any Party (as determined by such Party), shall be held to be invalid or unenforceable
to any extent, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement.

 

(f)          Counterparts.
To facilitate execution, this Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
This Agreement may be executed by counterpart signatures and all counterpart signature pages shall constitute a part of this Agreement.
Delivery of a counterpart hereof via facsimile transmission or by electronic mail transmission, including but not limited to an
Adobe file format document (also known as a PDF file), shall be as effective as delivery of a manually executed counterpart hereof.

 

(g)          Governing
Law; Venue. This Agreement shall be interpreted and enforced under the laws of State of New York. The parties (a) hereby irrevocably
and unconditionally submit to the jurisdiction of the federal and state courts in and for New York County, New York for the purpose
of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action
or other proceeding arising out of or based upon this Agreement except in the federal and state courts in and for New York County,
New York, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in
or by such courts.

 

(h)          Successors/Assigns.
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

 

(i)          No
Assignment. This Agreement is not assignable by the Escrow Agent without the prior written consent of Seller and Purchaser.

 

[signatures on following
pages]

 

    	 

    	 

    

  

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date and year first above written.

 

	 	SELLER:
	 	 	 	 
	 	THE ALLEGRO AT ABACOA, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its
	 	 	sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	THE ALLEGRO AT HELMWOOD, LLC
	 	a Kentucky limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its
	 	 	sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	COLLEGE HARBOR PROPERTIES, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its
	 	 	sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	THE ALLEGRO AT WILLOUGHBY, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its
	 	 	sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 

 

[Signatures
Continue on the Following Page]

 

    	 

    	 

    

 

	 	THE ALLEGRO AT EAST LAKE, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	HARBOR TOWERS, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 

 

	 	PURCHASER:
	 	 	 
	 	AMERICAN REALTY CAPITAL VII, LLC a
	 	Delaware limited liability company
	 	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 
	 	 	 
	 	Escrow
    Agent:
	 	 
	 	Stewart
    Title Guaranty Company,
	 	as escrow agent 
	 	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT B

 

Post-Closing Escrow Agreement

 

[ See attached. ]

 

    	 

    	 

    

  

POST-CLOSING
ESCROW AGREEMENT

 

This Post-Closing Escrow Agreement (“Agreement”)
is entered into this ___ day of September, 2014 (the “Effective Date”), by and among (i) AMERICAN
REALTY CAPITAL VII, LLC, a Delaware limited liability company, (“ARC”) and its permitted assignees
ARHC ALJUPFL01, LLC, ARHC ALSTUFL01, LLC, ARHC ALTSPFL01, LLC, ARHC ALSPGFL01, LLC, ARHC ALELIKY01,
LLC, and ARHC LDSPGFL01, LLC each a Delaware limited liability company (ARC and all such parties collectively
the “Purchaser”), (ii) THE ALLEGRO AT ABACOA, L.L.C., a Florida limited liability company, THE
ALLEGRO AT HELMWOOD, LLC, a Kentucky limited liability company, COLLEGE HARBOR PROPERTIES, L.L.C., a Florida limited
liability company, THE ALLEGRO AT WILLOUGHBY, L.L.C., a Florida limited liability company, THE ALLEGRO AT EAST LAKE,
L.L.C., a Florida limited liability company, and HARBOR TOWERS, L.L.C., a Florida limited liability company (collectively,
the “Seller”), and (iii) Stewart
Title Guaranty Company, as escrow agent (“Escrow Agent”). Each party to this Agreement is
sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS:

 

A.           Purchaser
and Seller are parties to that certain Asset Purchase Agreement dated as of the 25th day of August, 2014, as amended
(the “Purchase Agreement”), pursuant to which Purchaser has agreed to purchase from the Seller the assets
comprising the assisted living facilities identified therein and located in Florida and Kentucky.

 

B.           Seller
and Purchaser have agreed to deposit the Holdback Amount, as defined in the Purchase Agreement with the Escrow Agent
to hold as Escrowed Funds described herein and pursuant to the terms of this Agreement.

 

NOW THEREFORE, for and in consideration
of the execution of this document and the mutual promises and covenants made herein, the receipt and sufficiency of which are
hereby mutually acknowledged, the Parties agree as follows:

 

Each of the Recitals
above is true and correct and is hereby incorporated by reference.

 

Article
I.

ESCROW AGENT

 

1.1.          Appointment
of Escrow Agent. The Seller and Purchaser hereby appoint the Escrow Agent, with a mailing address One Washington Mall, Suite
1400 Boston, MA 02108 as

 

    	 

    	 

    

  

the Escrow Agent hereunder to receive,
hold and disburse the Escrowed Funds, and to otherwise perform the duties of the Escrow Agent pursuant to this Agreement. Escrow
Agent hereby accepts its appointment as the escrow agent and agrees to receive, hold and disburse the Escrowed Funds (as defined
below) in accordance with the terms of this Agreement and will not disburse or otherwise transfer any portion of the Escrowed
Funds to any person other than pursuant to the express provisions hereof.

 

1.2.          Establishment
of Escrow Fund. Contemporaneously with the execution of this Agreement, and as a requirement of the Closing (as defined in
the Purchase Agreement), Purchaser shall deposit immediately available funds equal to the Holdback Amount (together with all earnings
thereon, hereinafter referred to as the “Escrowed Funds”) with the Escrow Agent, in accordance with
Section 3.2(c) of the Purchase Agreement.

 

1.3.          Escrow
Agent Responsibilities. The Escrow Agent executes this Agreement solely for the purpose of accepting the escrow created hereby,
on the terms and conditions set forth in it, and undertakes to perform the duties, but only the duties, specifically set forth
herein. Escrow Agent shall hold the Escrowed Funds in an interest bearing account with Stewart Title Guaranty Company. The Escrowed
Funds shall be kept invested in (a) direct thirty-day or less obligations of the United States of America or thirty-day or less
obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America, or (b)
with the prior written consent of Seller and Purchaser, in any institutional money market fund or depository money market offered
by the Escrow Agent, including any institutional money market fund or depository money market managed by the Escrow Agent or any
of its affiliates. The account shall be held in a national financial institution reasonably acceptable to both Seller and Purchaser
in the name of Escrow Agent but shall not be the property of the Escrow Agent. Escrow Agent shall have no liability for any loss
which may result from any failure of the institution in which the Escrowed Funds are placed; provided, however,
that notwithstanding anything herein to the contrary, in the event of a loss resulting from the failure of the financial institution
in which the Escrowed Funds are placed, Seller and Purchaser shall have the same remedies generally available to depositors of
the financial institution, including, without limitation, all remedies available at law or in equity, and such loss shall not
affect Purchaser’s obligations of payment pursuant to the Purchase Agreement. The Escrow Agent is not required to secure
the performance of its duties by bond or otherwise. The Seller and Purchaser hereby release the Escrow Agent from all liability
for any punitive, incidental or consequential damages to them for any act or omission by the Escrow Agent or any of its agents,
partners, or employees performed in good faith in the exercise of its or their best judgment and in a manner reasonably believed
by it or them to be authorized or within the duties, rights, powers, privileges, or direction conferred on the Escrow Agent by
this Agreement, except for willful misconduct, negligence, tortious conversion of any Escrowed Funds or documents, instruments
or items, if any, delivered to the Escrow Agent hereunder, or breach of this Agreement by the Escrow Agent. Without limiting the
generality of the foregoing, the responsibilities of the Escrow Agent are further defined, limited, and qualified by the following:

 

    	 

    	 

    

  

(a)          the
duties and obligations of the Escrow Agent will be determined solely by the express provisions of this Agreement, and this Agreement
is not to be interpreted or construed to impose on the Escrow Agent any implied duties, covenants, or obligations;

 

(b)          the
Escrow Agent may execute any of its rights, powers, or responsibilities under this Agreement either directly or by or through
its agents, partners, employees, or attorneys, provided that the Escrow Agent will be liable for any act or omission by any such
agent, partner, employee, or attorney of it to the same extent it would have been liable had it committed or allowed such act
or omission;

 

(c)          the
Escrow Agent will not be liable to any person with respect to any action taken, suffered, or omitted by it in accordance with
this Agreement or in accordance with written instructions signed by the Seller and Purchaser or an order issued by a court of
competent jurisdiction, except to the extent arising as a result of Escrow Agent’s negligence, willful misconduct or breach
of this Agreement;

 

(d)          the
Escrow Agent may rely on any document given to it pursuant to this Agreement without verifying the authenticity of it, the genuineness
of any signature on it, or the authority of the person signing the document or purporting to give it to the Escrow Agent, and
the Escrow Agent is not obligated to examine or pass upon the validity, execution, binding effect, or sufficiency of either this
Agreement or any amendment or supplement to it, so long as the Escrow Agent shall in good faith believe the same to be genuine,
to have been signed or presented by the person or parties purporting to sign the same and to conform to the provisions of this
Agreement;

 

(e)          the
Escrow Agent will be free from any liability when acting in good faith in accordance with any written advice or opinion received
from legal counsel, an independent certified public accountant, or other expert rendering advice or an opinion within his area
of expertise, except to the extent arising as a result of Escrow Agent’s negligence, willful misconduct or breach of this
Agreement;

 

(f)          nothing
in this Agreement will be deemed to impose on the Escrow Agent any liability to any person as a result of any failure of the Escrow
Agent to qualify to do business or to act as a fiduciary or otherwise in any jurisdiction; and

 

(g)          the
Escrow Agent is not under any duty to give the Escrowed Funds held in escrow by it pursuant to this Agreement any greater degree
of care than it gives its own similar property, and the Escrow Agent makes no representation as to the value, validity or genuineness,
of any document or instrument delivered to it.

 

1.4.          Disbursement
of Escrowed Funds.

 

(a)          From
time to time on or before the end of the day that is fourteen (14) months after the Effective Date (provided, however, that if
such date is a weekend day or a day on which banks in New York, New York are ordinarily closed, the next following day that is
not a weekend day or a day on which banks in New York, New York are ordinarily closed (a

 

    	 

    	 

    

  

“Business
Day”)) (the applicable date, the “Final Disbursement Date”), Purchaser may give notice
(a “Notice”) to Seller and the Escrow Agent specifying in reasonable detail the nature and dollar amount
of any indemnifiable claim (a “Claim”) Purchaser may have under the Purchase Agreement. Purchaser may
only deliver a Notice if it determines in good faith that the Claim is adequately supported by fact and permitted under the Purchase
Agreement. Within fifteen (15) Business Days after receipt by Seller and Escrow Agent of the Notice regarding such a Claim, Seller
may give notice to Purchaser and Escrow Agent disputing any Claim (a “Counter Notice”), if Seller determines
in good faith that Seller has objection to the Claim that is adequately supported by fact and permitted under the Purchase Agreement.
If a Counter Notice is timely given, the Claim shall be resolved as provided in Section 1.4(b). If no Counter Notice is timely
given, then at the end of such fifteen (15) day period, Escrow Agent shall pay to Purchaser the dollar amount of the Claim set
forth in the Notice from (and only to the extent of) the Escrowed Funds. The Escrow Agent shall not inquire into or consider whether
a Claim complies with the requirements of the Purchase Agreement.

 

(b)          If
a Counter Notice is timely given with respect to a Claim, Escrow Agent shall make payment with respect to such claim only in accordance
with (i) joint written instructions of Seller and Purchaser, or (ii) a final order of a court of competent jurisdiction, from
which no appeal has been taken and appeal time expired or, if taken, has become final.

 

(c)          On
the first Business Day after the Final Disbursement Date, the Escrow Agent shall pay and distribute to the Seller the amount remaining
after subtracting from the balance of the Escrowed Funds as of the end of the Final Disbursement Date (or if the Final Disbursement
Date is not a Business Day, the immediately preceding Business Day) the aggregate dollar amount of any Claims (as shown in the
Notices of such Claims) timely delivered and remaining pending as of the Final Disbursement Date.

 

(d)          At
any time, the Escrow Agent shall pay part or all of the Escrowed Funds in accordance with a final order of a court of competent
jurisdiction, from which no appeal has been taken and appeal time expired or, if taken, has become final.

 

1.5.          Escrow
Controversy. If a controversy arises before, during, or after the term of this Agreement with respect to the Escrowed Funds
or other documents, instruments or items, if any, delivered to the Escrow Agent hereunder, or the application of any of them,
the Escrow Agent may do either or both of the following: (i) withhold further performance by it under Section 1.4(b), (c) or (d)
above until the Escrow Agent receives the joint written instructions of Seller and Purchaser, in which case the Escrow Agent may
act in accordance with such joint written instructions, or (ii) commence or defend any action or proceeding for or in the nature
of interpleader. If a suit or proceeding for or in the nature of interpleader is brought by or against it, the Escrow Agent may
deliver all funds, if any, and other property held by it under this Agreement into the registry of the court and thereupon will
be released and discharged from all further obligations and responsibilities under this Agreement.

 

1.6.          Reimbursement
and Indemnification of Escrow Agent. Purchaser and Seller shall indemnify the Escrow Agent and hold it harmless, upon demand,
from all cost, loss, damage,

 

    	 

    	 

    

  

expense, and liability (including reasonable
legal fees and expenses and amounts paid in settlement) suffered or incurred by it in connection with, or arising out of, the
escrow under this Agreement, including any attributable to a suit or proceeding for or in the nature of interpleader brought by
or against the Escrow Agent, except to the extent arising as a result of Escrow Agent’s negligence, willful misconduct or
breach of this Agreement. Other than the foregoing, Escrow Agent shall not be entitled to any fee or compensation for the services
rendered hereunder.

 

1.7.          Discretion
of Escrow Agent to File an Interpleader Action in the Event of Dispute. If any Parties to this Agreement shall be in disagreement
about the interpretation of this Agreement, or about their rights and obligations, or the propriety of any action contemplated
by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an action of interpleader in a Court (defined
below) and deposit the Escrowed Funds or other documents, instruments or items, if any, delivered to the Escrow Agent hereunder
in the registry of the Court. The Escrow Agent shall be indemnified for all costs, including reasonable attorneys’ fees
and costs incurred by it, in connecting with the aforesaid interpleader action, and the Escrow Agent shall be fully protected
in suspending all or part of its activities under this Agreement until a final judgment or other appropriate order in the interpleader
action is received. The exclusive venue for all actions under this Agreement shall be a court of competent jurisdiction in Orange
County, Florida (a “Court”).

 

The Escrow Agent, in the event it is in
doubt about its duties and obligations hereunder as Escrow Agent, shall also have the right, but not the duty, to so notify in
writing the Seller and Purchaser and, thereafter, the Escrow Agent shall not be obligated to deliver or release any of the Escrowed
Funds or other documents, instruments or items, if any, delivered to the Escrow Agent hereunder unless: (i) the Seller and Purchaser
have jointly directed the Escrow Agent to deliver the Escrowed Funds or other documents, instruments or items, if any, delivered
to the Escrow Agent hereunder, or (ii) a final order by a court of competent jurisdiction, from which no appeal has been taken
and appeal time expired or, if taken, has become final, to which Escrow Agent, Purchaser and Seller are all parties, has been
entered directing the Escrow Agent to take certain action with respect to the Escrowed Funds or other documents, instruments or
items, if any, delivered to the Escrow Agent hereunder.

 

1.8.          Resignation
of Escrow Agent. The Escrow Agent may resign upon thirty (30) days written notice to the Seller and Purchaser. If a successor
escrow agent is not appointed by the Seller and Purchaser within this thirty (30) day period, the Escrow Agent may, but shall
have no duty to, petition a Court 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 under Section 1.4(b), (c) or (d) above 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 Purchaser. The Escrow Agent may be removed,
with or without cause, by the Purchaser and Seller acting jointly at any time by providing written notice to the Escrow Agent.

 

Article
II.

GENERAL PROVISIONS 

 

2.1.          Notices.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given (i) on the date of service if served personally on the party to whom notice is to be given, (ii) on the day of transmission
if sent via facsimile transmission to the facsimile number given below, and electronic confirmation of receipt is obtained promptly
after completion of transmission, (iii) on the day after delivery to FedEx or similar overnight courier, or (iv) on the tenth
day after mailing, if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, return
receipt requested, postage prepaid and properly addressed, to the party as follows:

 

	If to Purchaser:	 	American Realty Capital Healthcare Trust
	 	 	II Operating Partnership, L.P. 
	 	 	c/o American Realty Capital
	 	 	Attn: Edward M Weil., Jr.
	 	 	405 Park Avenue, 2nd Floor
	 	 	New York, New York 10022
	 	 	 
	 	 	 
	With a copy (which will not 	 	Jesse C. Galloway, General Counsel
	constitute notice) to:	 	405 Park Avenue, 14th Floor
	 	 	New York, New York 10022
	 	 	 
	 	 	 
	With a copy (which will not 	 	Taylor C. Pancake
	constitute notice) to:	 	Foley & Lardner LLP
	 	 	111 North Orange Avenue, Suite 1800 
	 	 	Orlando, Florida  32801
	 	 	E-mail: tpancake@foley.com
	 	 	 
	If to Seller:	 	Allegro
	 	 	c/o Allegro Senior Living, LLC
	 	 	212 South Central Avenue
	 	 	Suite 201
	 	 	Attention Laurence A. Schiffer, CEO
	 	 	St. Louis, MO 63105
	 	 	 
	With a copy (which will not 	 	Theresa Marie Kenney, Esq., B.C.S.
	constitute notice) to:	 	Duss, Kenney, Safer, Hampton & Joos, P.A.
	 	 	4348 Southpoint Boulevard, Suite 101

 

    	 

    	 

    

  

	 	 	Jacksonville, Florida 32216
	 	 	 
	If to Escrow Agent:	 	Stewart Title Guaranty
    Company
	 	 	National Title Services
	 	 	One Washington Mall – Suite 1400
	 	 	Boston, MA 02108
	 	 	Attention:    	Annette Labrecque Comer
	 	 	Telephone:  	(607) 933-2415
	 	 	Facsimile:     	(607) 727-8372
	 	 	Email:           	acomer@stewart.com

 

Any party may change the address to which notices are to be
sent to it by giving written notice of such change of address to the other parties in the manner herein provided for giving notice.
Notice given by a party’s attorney in accordance with this Section 2.1 shall (a) constitute notice from said party, and
(b) not be considered an improper direct contact from the sending attorney to a “person known to be represented by counsel”.

 

2.2.          Representations.
 The Parties do hereby expressly acknowledge, warrant and represent to one another that:

 

(a)          the
terms and conditions of this Agreement were agreed to only after due consideration and consultation with their respective attorneys,
or in the absence of consideration and consultation with an attorney, only after sufficient time to consider and consult an attorney;

 

(b)          the
Parties are competent and were not fraudulently induced, coerced or intimidated to agree to the terms and conditions of this Agreement,
and the Escrow Agreement is supported by good and sufficient consideration; and

 

(c)          no
promise, representation, inducement, agreement or warranty other than those specifically set forth herein has been made or relied
upon by the Parties in agreeing to the terms and conditions of this Agreement.

 

2.3.          Attorneys’
Fees and Costs. If subsequent to the Effective Date, litigation should arise among the Parties concerning this Agreement or
its enforcement, the prevailing Party or Parties in such litigation shall be entitled to collect in such action from the non-prevailing
Party or Parties all costs of such litigation, including reasonable attorney’s fees.

 

2.4.          Entire
Agreement. This Agreement constitutes the entire and integrated agreement among the Parties and sets forth all promised, covenants,
agreements, conditions and understandings among the Parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous negotiations, representations, understandings, inducements, conditions and agreements, expressed or implied,
or written with respect to the subject matter thereof; provided, however, that as between Purchaser and Seller, this Agreement
does not

 

    	 

    	 

    

  

supersede or amend the Purchase Agreement
or modify any of the rights and obligations of the parties thereunder. This Agreement may not be modified, amended, altered or
supplemented, except by written instrument signed by the Parties or their successors in interest.

 

2.5.          Severability.
If any provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any
Party or substantially increase the burden of any Party (as determined by such Party), shall be held to be invalid or unenforceable
to any extent, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement.

 

2.6.          Counterparts.
To facilitate execution, this Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
This Agreement may be executed by counterpart signatures and all counterpart signature pages shall constitute a part of this Agreement.
Delivery of a counterpart hereof via facsimile transmission or by electronic mail transmission, including but not limited to an
Adobe file format document (also known as a PDF file), shall be as effective as delivery of a manually executed counterpart hereof.

 

2.7.          Governing
Law; Venue. This Agreement shall be interpreted and enforced under the laws of the State of Florida. The parties (a) hereby
irrevocably and unconditionally submit to the jurisdiction of the federal and state courts in and for Orange County, Florida for
the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any
suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts in and for
Orange County, Florida, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such
suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced
in or by such courts.

 

2.8.          Successors/Assigns.
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto,
to the extent permitted by the Purchase Agreement.

 

2.9.          No
Assignment. This Agreement is not assignable by the Escrow Agent without the prior written consent of the Seller and Purchaser.

 

    	 

    	 

    

  

[signatures on following
pages]

 

    	 

    	 

    

  

IN WITNESS WHEREOF, the Parties
have caused this Post-Closing Escrow Agreement to be executed as of the date first set forth above.

 

	 	SELLER:
	 	 	 	 
	 	THE ALLEGRO AT ABACOA, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, a
	 	 	Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	THE ALLEGRO AT HELMWOOD, LLC
	 	a Kentucky limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	a Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	COLLEGE HARBOR PROPERTIES, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, a
	 	 	Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 

 

[Signatures
Continue on the Following Page]

 

    	 

    	 

    

 

	 	THE ALLEGRO AT WILLOUGHBY, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, a
	 	 	Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	THE ALLEGRO AT EAST LAKE, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, a
	 	 	Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 
	 	 	 	 
	 	HARBOR TOWERS, L.L.C.,
	 	a Florida limited liability company
	 	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, a
	 	 	Delaware limited liability company, its sole
	 	 	managing member
	 	 	 	 
	 	 	By:	 
	 	 	Print Name:	 
	 	 	Print Title:	 

 

[Signatures Continue on the Following
Page]

 

    	 

    	 

    

  

	 	PURCHASER:
	 	 	 
	 	AMERICAN REALTY CAPITAL VII, LLC a
	 	Delaware limited liability company
	 	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 
	 	 	 
	 	ARHC ALJUPFL01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ARHC ALSTUFL01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ARHC ALTSPFL01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ARHC ALSPGFL01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[Signatures
Continue on the Following Page]

 

    	 

    	 

    

  

	 	ARHC ALELIKY01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ARHC LDSPGFL01, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Escrow Agent:
	 	 	 
	 	Stewart Title Guaranty
    Company,
	 	as escrow agent
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

  

EXHIBIT C

 

Deed

 

[ See attached. ]

 

    	 

    	 

    

  

Prepared by and return to:

 

Michael Okaty

Foley & Lardner LLP

111 North Orange Avenue, Suite 1800

Orlando, Florida 32801

 

Parcel ID No.:_____________

 

SPECIAL WARRANTY DEED

 

THIS SPECIAL WARRANTY
DEED, is given this _____ day of August, 2014, by [THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES], LLC, a [Florida/Kentucky]
limited liability company, whose mailing address is [212 South Central Avenue, Suite 301, St. Louis, MO 63105] (“Grantor”)
to ARHC [__________], LLC, a Delaware limited liability company whose mailing address is 405 Park Avenue, 15th Floor, New
York, New York 10022 (“Grantee”).

 

WITNESSETH:

 

That Grantor, for
and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, by these presents does hereby grant, bargain, sell and convey unto Grantee, its successors
and assigns, all of Grantor's right, title and interest in and to that certain tract or parcel of land situate, lying and being
in the County of [_________], State of [Florida/Kentucky], as more particularly described on Exhibit A attached hereto
and by this reference incorporated herein (the “Property”), together with all buildings, structures, improvements
and fixtures located thereon, as well as all and singular the rights of ways, easement rights, hereditaments and appurtenances
belonging thereto, subject only to those matters set forth on Exhibit B hereto (the “Permitted Encumbrances”);

 

TO HAVE AND TO HOLD the Property,
together with the improvements thereon and the rights, easements, privileges and appurtenances thereunto belonging or appertaining,
unto Grantee, its successors and assigns, in fee simple forever.

 

AND Grantor,
for itself and its successors, hereby fully warrants to Grantee, its successor and assigns, title to the Property and that Grantor
will forever defend the Property against all persons lawfully claiming by, through or under Grantor but against no other, subject
to all covenants, restrictions, reservations, easements, conditions and rights appearing of record.

 

    	 

    	 

    

  

IN WITNESS WHEREOF,
Grantor has caused these presents to be executed in its name the day and year first above written.

 

	Signed, sealed and delivered	[___________________], LLC,
	in the presence of:	a Florida/Kentucky limited liability company

 

	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	a Delaware limited liability
	 	 	company,  its sole managing member

 

	 	 	By:	 
	Name:	 	 	Name:	 
	 	 	Its:	 
	 	 	 	 
	 	 	 	 
	Name:	 	 	 	 

 

STATE OF ______________

COUNTY OF _____________

 

This
instrument was acknowledged before me this _______ day of __________, 2014, by _________________, as ____________ of ALLEGRO SENIOR
LIVING, LLC, A Delaware limited liability company, as sole and managing member of [________________], LLC,
a Florida/Kentucky limited liability company, on behalf of the company. He is [ ] personally known to me, or [ ] has produced
a __________ driver’s license as identification.

 

________________________________

Print Name:______________________________

Notary Public, State
of _____________

Commission No.:__________________________

My Commission Expires:____________________

 

    	 

    	 

    

 

EXHIBIT A

 

    	 

    	 

    

 

EXHIBIT B

 

    	 

    	 

    

 

 

EXHIBIT D

 

Bill of Sale and
Assignment

 

[ See attached.
]

 

    	 

    	 

    

 

BILL OF SALE

 

THIS BILL OF SALE,
effective as of ______ ___, 2014, is furnished by [THE ALLEGRO AT ______/COLLEGE HARBOR
PROPERTIES], LLC, a [Florida/Kentucky] limited liability company (“Seller”), to ARHC [________],
LLC, a Delaware limited liability company (“Purchaser”) which is the assignee of certain rights
and obligations of AMERICAN REALTY CAPITAL VII, a Delaware limited liability company (“ARC”), pursuant
to that certain Asset Purchase Agreement by and between Seller, ARC and affiliates of the Seller, dated as of August __, 2014
(the “Purchase Agreement”). All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.

 

In consideration of
payment by ARC of the Purchase Price described in the Purchase Agreement and other good and valuable consideration, the receipt
and sufficiency of which Seller hereby acknowledges, Seller hereby sells, conveys, transfers, assigns and delivers to Purchaser
and its successors and assigns, all of Seller's right, title and interest in and to the Purchased Personal Property located on
or relating to the Facility known as [_____________], free and clear of all Liens and liabilities whatsoever, except for the Assumed
Liabilities and Permitted Encumbrances.

 

EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THE PURCHASE AGREEMENT, SELLER IS CONVEYING THE PURCHASED PERSONAL PROPERTY "AS IS" WITH NO ADDITIONAL
REPRESENTATIONS OR WARRANTIES WHATSOEVER.

 

This Bill of Sale
is subject to the terms of the Purchase Agreement, and nothing contained herein shall be deemed to modify, alter or amend the
terms and provisions of the Purchase Agreement. In the event of any inconsistency or conflict between the terms of the Purchase
Agreement and the terms of this Bill of Sale, the terms of the Purchase Agreement shall prevail.

 

This Bill of Sale
may be executed in multiple counterparts, each of which, taken together, shall constitute one original.

 

[Signature Page Follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, Seller has caused
this Bill of Sale to be executed and delivered under seal as of the day and year first above written.

 

	PURCHASER:	 	SELLER:
	 	 	 
	ARHC [__________], LLC, a Delaware limited liability company	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	By:	 	 	By:	ALLEGRO SENIOR LIVING, LLC,
	 	 	 		its sole managing member
	Name:	 	 	 	
	 	 	 	 	By:	 
	Title:	 	 	 	Name:	 
	 	 	 	 	Title:	 

 

    	 

    	 

    

 

ACKNOWLEDGEMENT OF BILL OF SALE

 

Each of the undersigned, which also comprise
the cumulative “Seller” under the Purchase Agreement, acknowledges the Bill of Sale by [PH__] REALTY, LLC to
which this Acknowledgement is attached and represents and warrants that it has no ownership or interest in any of the Purchased
Personal Property conveyed thereby.

 

	 	SELLER:
	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[signatures continue on next page]

 

    	 

    	 

    

 

	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC,
    a [Florida/Kentucky] limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

    	 

    	 

    

 

EXHIBIT E-1

 

Post-Closing Management Agreement

 

[ See attached. ]

 

    	 

    	 

    

 

 

MANAGEMENT
AGREEMENT

 

BY AND
BETWEEN

 

ARHC [______________]
TRS, LLC,

a Delaware limited liability company

 

AS TENANT

 

[SELLER
LICENSEE]

 

AS SUBTENANT

 

And

 

Allegro
management company

 

AS MANAGER

 

FOR [FACILITY
NAME], [FACILITY CITY], [FLORIDA/KENTUCKY]

 

DATED AS OF SEPTEMBER ____, 2014

 

    	 

    	 

    

 

index

 

	SECTION	 	CAPTION	 	PAGE
	Article I DEFINITIONS	 	1
	 	 	 	 	 
	1.01.	 	Accounting Period	 	1
	1.02.	 	Affiliate	 	1
	1.03.	 	Agreement	 	1
	1.04.	 	Annual Financial Report	 	1
	1.05.	 	Applicable Laws	 	1
	1.06.	 	Approved Operating Budget	 	2
	1.07.	 	Annual Operating Budget	 	2
	1.08.	 	Capital Budget	 	2
	1.09.	 	Cash Flow	 	2
	1.10.	 	Commencement of Management Services	 	2
	1.11.	 	Control	 	2
	1.12.	 	Eligible Independent Contractor	 	2
	1.13.	 	Entity	 	2
	1.14.	 	Environment	 	3
	1.15.	 	Event of Default	 	3
	1.16.	 	Excess Cash Flow	 	3
	1.17.	 	Expert	 	3
	1.18.	 	Facility	 	3
	1.19.	 	Facility Expenses	 	3
	1.20.	 	FF&E	 	6
	1.21.	 	FF&E Reserve	 	6
	1.22.	 	FF&E Reserve Expenditures	 	6
	1.23.	 	FF&E Reserve Payment	 	6
	1.24.	 	Fiscal Year	 	6
	1.25.	 	Force Majeure Event	 	6
	1.26.	 	GAAP	 	6
	1.27.	 	GDP Deflator	 	6
	1.28.	 	Government Agency	 	7
	1.29.	 	Hazardous Substances	 	7
	1.30.	 	Home Office Employees	 	7
	1.31.	 	Incentive Fee	 	7
	1.32.	 	Intellectual Property	 	8
	1.33.	 	Inventories	 	8
	1.34.	 	Lease Agreement	 	8
	1.35.	 	Legal Requirements	 	8
	1.36.	 	Licensee	 	8
	1.37.	 	Management Services	 	8
	1.38.	 	Manager	 	8
	1.39.	 	Marketing Budget	 	8
	1.40.	 	Marketing Services	 	8
	1.01.	 	Net Facility Revenues	 	8
	1.02.	 	Net Operating Income	 	9
	1.03.	 	Non-Routine Capital Expenditures	 	9
	1.04.	 	Operating Fee	 	9

 

    	 

    	 

    

 

	1.05.	 	Owner	 	9
	1.06.	 	Permitted Use	 	9
	1.07.	 	Person	 	9
	1.08.	 	Repairs and Equipment Estimate	 	9
	1.09.	 	Residents	 	9
	1.10.	 	State	 	9
	1.11.	 	Subtenant	 	9
	1.12.	 	Sublease	 	9
	1.13.	 	Targeted NOI	 	9
	1.14.	 	Tenant	 	9
	1.15.	 	Term	 	9
	1.16.	 	Total Casualty	 	10
	1.17.	 	Total Facility Revenues	 	10
	1.18.	 	Unsuitable for Its Permitted Uses	 	10
	1.19.	 	Working Capital	 	10
	 	 	 	 	 
	Article II APPOINTMENT oF MANAGER AND PRIMARY
    GoAL OF AGREEMENT	 	10
	 	 	 	 	 
	2.01.	 	Appointment of Manager	 	10
	2.02.	 	Goals	 	10
	 	 	 	 	 
	Article III OPERATING
    FEES	 	11
	 	 	 	 	 
	3.01.	 	Operating Fee	 	11
	3.02.	 	Incentive Fee	 	11
	3.03.	 	Special Agreement Concerning the Revenues
from the Sale of Alcoholic Beverages	 	12
	3.04.	 	Construction Management	 	13
	3.05.	 	No Other Fees	 	13
	 	 	 	 	 
	Article IV
    DUTIES AND RIGHTS OF MANAGER	 	13
	 	 	 	 	 
	4.01.	 	Authority of Manager Right of Possession	 	13
	4.02.	 	Marketing Services	 	14
	4.03.	 	Hiring and Training of Staff	 	14
	4.04.	 	Operation Services Duties	 	14
	4.05.	 	Manager’s Home Office Employees	 	17
	4.06.	 	Personnel Administration	 	17
	4.07.	 	Purchasing	 	17
	4.08.	 	Occupancy Agreements	 	18
	4.09.	 	Working Capital	 	18
	4.10.	 	Expense Allocations	 	18
	4.11.	 	Deposit and Disbursement of Funds	 	18
	4.12.	 	Licenses and Permits	 	18
	 	 	 	 	 
	Article V OPERATING
    PROFITs, CREDITS AND COLLECTIONS, AND PROCEDURE FOR HANDLING RECEIPTS AND OPERATING CAPITAL	 	19
	 	 	 	 	 
	5.01.	 	Total Facility Revenues	 	19
	5.02.	 	Total Facility Revenues Priority	 	19
	5.03.	 	Credits and Collections	 	19

 

    	 

    	 

    

 

	 	 	 	 	 
	Article VI FINANCIAL
    RECORDS	 	20
	 	 	 	 	 
	6.01.	 	Accounting and Financial Records	 	20
	6.02.	 	Reports	 	20
	6.03.	 	Access	 	20
	6.04.	 	Rights of Owner to Perform Accounting
    Functions	 	20
	 	 	 	 	 
	Article VII ANNUAL OPERATING
    BUDGET	 	21
	 	 	 	 	 
	7.01.	 	Annual Operating Budget; Approved
    Operating Budget	 	21
	 	 	 	 	 
	Article VIII OTHER FINANCIAL
    MATTERs	 	22
	 	 	 	 	 
	8.01.	 	Charges	 	22
	8.02.	 	Tax Status	 	22
	8.03.	 	Employee Withholding	 	22
	8.04.	 	Reservation Deposit Accounts	 	22
	 	 	 	 	 
	Article IX GENERAL COVENANTS
    AND TENANT AND MANAGER OBLIGATIONS	 	22
	 	 	 	 	 
	9.01.	 	Licensee’s Obligations	 	22
	9.02.	 	Quiet Enjoyment	 	23
	9.03.	 	Manager’s Obligations	 	23
	9.04.	 	Covenant Not To Compete	 	23
	9.05.	 	Covenants Not to Hire	 	23
	 	 	 	 	 
	Article X REPAIRS, MAINTENANCE
    AND REPLACEMENTS	 	23
	 	 	 	 	 
	10.01.	 	Routine Repairs and Maintenance	 	23
	10.02.	 	Repairs and Equipment	 	23
	10.03.	 	Building Alterations, Improvements,
Renewals and Replacements	 	25
	 	 	 	 	 
	Article XI
    REPRESENTATIONS, WARRANTIES AND GENERAL COVENANTS OF MANAGER	 	25
	 	 	 	 	 
	11.01.	 	Representations, Warranties and Covenants
    of Manager	 	25
	 	 	 	 	 
	Article XII INSURANCE	 	27
	 	 	 	 	 
	12.01.	 	General Insurance Requirements	 	27
	 	 	 	 	 
	Article XIII TERMINATION
    OF AGREEMENT; REMEDIES	 	27
	 	 	 	 	 
	13.01.	 	General Termination	 	27
	13.02.	 	Elective Termination	 	28
	13.03.	 	Termination on Sale of Facility	 	28
	13.04.	 	Termination During Initial Term	 	28
	13.05.	 	Performance Termination	 	28
	13.06.	 	Termination on Change in Control of
    Manager	 	29
	13.07.	 	Transition upon Termination	 	29
	 	 	 	 	 
	Article XIV LEGAL ACTIONS,
    GOVERNING LAW, LIABILITY OF MANAGER AND INDEMNITY	 	29
	 	 	 	 	 
	14.01.	 	Legal Actions	 	29
	14.02.	 	Legal Fees and Costs	 	29
	14.03.	 	Choice of Law	 	29
	14.04.	 	Liability of Manager	 	29
	14.05.	 	Indemnity	 	30
	14.06.	 	Notice of Claim or Suit	 	31
	14.07.	 	Survival of Indemnity	 	31
	 	 	 	 	 
	Article XV Regulatory
    and Contractual Requirements	 	31

 

    	 

    	 

    

 

	 	 	 	 	 
	15.01.	 	Regulatory and Contractual Requirements	 	31
	15.02.	 	Equal Employment and Equal Housing
    Opportunity	 	32
	15.03.	 	Hazardous Substances	 	32
	 	 	 	 	 
	Article XVI INTELLECTUAL
    PROPERTY	 	32
	 	 	 	 	 
	16.01.	 	Name of Facility	 	32
	16.02.	 	Intellectual Property	 	32
	 	 	 	 	 
	Article XVII DAMAGE
    AND CONDEMNATION	 	32
	 	 	 	 	 
	17.01.	 	Damage and Repair	 	32
	17.02.	 	Condemnation	 	33
	 	 	 	 	 
	Article XVIII MISCELLANEOUS PROVISIONS	 	33
	 	 	 	 	 
	18.01.	 	Additional Assurances	 	33
	18.02.	 	Consents, Approval and Discretion	 	33
	18.03.	 	No Brokerage	 	33
	18.04.	 	Notices	 	34
	18.05.	 	Severability	 	34
	18.06.	 	Gender and Number	 	35
	18.07.	 	Division and Heading	 	35
	18.08.	 	Confidentiality of Information	 	35
	18.09.	 	Right to Perform	 	35
	18.10.	 	Assignment	 	35
	18.11.	 	Limitation of Liability	 	35
	18.12.	 	Right to Inspect	 	36
	18.13.	 	Entire Agreement/Amendment/Waiver	 	36
	18.14.	 	Expert Decisions	 	36
	18.15.	 	Arbitration	 	37
	18.16.	 	WAIVER OF JURY TRIAL.	 	37

    	 

    	 

    

LIST OF
EXHIBITS

 

	EXHIBIT A	Description of Real Property
	EXHIBIT B	Approved Operating Budget
	EXHIBIT C	Insurance Requirements
	EXHIBIT D	Quarterly Certification
	EXHIBIT E	Assumed Employee Obligations

 

    	 

    	 

    

 

MANAGEMENT
AGREEMENT

 

THIS MANAGEMENT AGREEMENT (“Agreement”)
is executed effective as of the [____] day of September, 2014 (the “Effective Date”), by and among LOVE
MANAGEMENT COMPANY, LLC, a Missouri limited liability company d/b/a Allegro management
company (“Manager”); [SELLER LICENSEE ENTITY] (“Subtenant”); and ARHC
[_____________] TRS, LLC, a Delaware limited liability company (“Tenant”).

 

WHEREAS, Subtenant is the sublessee
of certain real property located in the city of [_______________], Florida as further described in Exhibit A attached
hereto and made a part hereof, on which is situated a facility known as THE ALLEGRO AT _________ (the “Facility”
as further defined in Section 1.18 herein); and

 

WHEREAS, Subtenant wishes to appoint
Manager as manager of the Facility and Manager desires to operate the Facility, all subject to and upon the terms and conditions
herein set forth;

 

NOW, THEREFORE, the parties hereto
agree as follows:

 

Article
III.

DEFINITIONS

 

The following terms shall have the meanings
set forth below when used in this Agreement.

 

3.1.          Accounting
Period. The term “Accounting Period” means and refers to a calendar month.

 

3.2.          Affiliate.
The term “Affiliate” shall mean, with respect to any Person, any Person directly or indirectly Controlling, Controlled
by or under common Control with any such Person.

 

3.3.          Agreement.
The terms “Agreement” and this “Agreement” shall mean this Management Agreement between Subtenant, Tenant
and Manager, and any amendments thereto as may be from time to time agreed to in writing by the parties.

 

3.4.          Annual
Financial Report. The term “Annual Financial Report” shall have the meaning given such term in Section 4.04(k)(i).

 

3.5.          Applicable
Laws. The term “Applicable Laws” shall mean all applicable laws, statutes, regulations, rules, ordinances,
codes, licenses, permits and orders, from time to time in existence, of all courts of competent jurisdiction and Government Agencies,
and all applicable judicial and administrative and regulatory decrees, judgments and orders, including common law rulings and
determinations of any kind, including, without limitation, those relating to (i) damage to, or the protection of real or
personal property, (ii) human health and safety (except those requirements which, by definition, are solely the responsibility
of employers), (iii) the Environment, including, without limitation, all valid and lawful requirements of courts and other
Government Agencies pertaining to reporting, licensing, permitting, investigation, remediation and removal of underground improvements
(including, without limitation, treatment or storage tanks, or water, gas or oil wells), or emissions, discharges, releases or
threatened releases of Hazardous Substances, chemical substances, pesticides, petroleum or petroleum products, pollutants, contaminants
or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the Environment, or relating
to the manufacture, processing, distribution, use,

 

    	1

    	 

    

 

treatment, storage, disposal,
transport or handling of Hazardous Substances, underground improvements (including, without limitation, treatment or storage tanks,
or water, gas or oil wells), or pollutants, contaminants or hazardous or toxic substances, materials or wastes, whether solid,
liquid or gaseous in nature, or (iv) accessibility for the disabled or handicapped, including, but not limited to, any applicable
provisions of The Architectural Barriers Act of 1968, The Rehabilitation Act of 1973, The Fair Housing Act of 1988, The Americans
With Disabilities Act, the accessibility code(s), if any, of the State in which the Facility is located, the laws described in
Section 15.02, and all regulations and guidelines lawfully promulgated under any of the foregoing, as the same may be amended
from time to time.

 

3.6.          Approved
Operating Budget. The "Approved Operating Budget" shall be the Annual Operating Budget approved pursuant to Section
7.01.

 

3.7.          Annual
Operating Budget. The term “Annual Operating Budget” shall have the meaning given to such term in Section 7.01.

 

3.8.          Capital
Budget. The term “Capital Budget” shall be the Capital Budget included in the Approved Operating Budget.

 

3.9.          Cash
Flow. The term “Cash Flow” shall mean all Total Facility Revenues in excess of Facility Expenses.

 

3.10.        Commencement
of Management Services. The term “Commencement of Management Services” shall mean the date of this Agreement.

 

3.11.        Control.
The term “Control” (including the correlative meanings of the terms “Controlling”, “Controlled by”,
and “under common control with” as used with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of such Person whether through the Ownership of voting
securities, by contract, or otherwise.

 

3.12.        Eligible
Independent Contractor. The term “Eligible Independent Contractor” shall mean any person or entity designated
as manager of the Facility, but only if (a) such person or entity does not own (either actually or constructively through related
parties, as determined under Section 856(d)(3) of the Internal Revenue Code), directly or indirectly, more than thirty five percent
(35%) of the shares of American Realty Capital Healthcare Trust II, Inc., (b) not more than thirty five percent (35%) of the total
combined voting power of such person or entity’s stock or thirty five percent (35%) of the total shares of all classes of
stock of such person or entity (in the case of a corporation), or not more than thirty five percent (35%) of the interests in
such person or entity’s assets or net profits (in the case of entities other than corporations) is owned (again, either
actually or constructively through related parties, as determined under Section 856(d)(3) of the Internal Revenue Code), by American
Realty Capital Healthcare Trust II, Inc., and (c) at the time such person or entity enters into the Management Agreement with
respect to the Facility to operate the same, such person or entity is actively engaged in the trade or business of operating Qualified
Health Care Properties for any person or entity who is not a “related person” (within the meaning of Section 856(d)(9)(A)
of the Internal Revenue Code) with respect to the Tenant and/or any of the Tenant’s Affiliates.

 

3.13.        Entity.
The term Entity shall mean any corporation, general or limited partnership, limited liability company, partnership, stock company
or association, joint venture, association, company, trust, bank, trust company, land trust, business trust, cooperative, any
government or agency or political subdivision thereof or any other entity that is not a natural person.

 

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3.14.      Environment.
The term “Environment” shall mean soil, surface waters, ground waters, land, streams, sediments, surface or subsurface
strata and ambient air.

 

3.15.      Event
of Default. The term “Event of Default” means the occurrence of any default and the expiration of any applicable
cure period set forth herein.

 

3.16.      Excess
Cash Flow. The term “Excess Cash Flow” shall mean the amount, if any, that is left after deducting from Total
Facility Revenues for a Fiscal Year (or any period thereof) the amount necessary to pay the following amounts (including all amounts
accrued pursuant to the second paragraph of Section 5.02 below), in the following order, for that Fiscal Year (or applicable period
thereof) (i) Facility Expenses (which shall include the Operating Fee but excluding Facility Expenses of the type described in
Section 1.19(k)) and (ii) payment to the FF&E Reserve as provided herein, except to the extent the same exceeds $500 per unit
per year.

 

3.17.      Expert.
The term “Expert” shall mean an independent, nationally recognized assisted living facility consulting firm or individual
who is qualified to resolve the issue in question, and who is appointed in each instance by agreement of the parties or, failing
agreement, each party shall select one (1) such nationally recognized consulting firm or individual and the two (2)
respective firms and/or individuals so selected shall select another such nationally recognized consulting firm or individual
to be the Expert. Each party agrees that it shall not appoint an individual to select or to be an Expert hereunder if the individual
is, as of the date of appointment or within six (6) months prior to such date, employed by such party, either directly or
as a consultant, in connection with any other matter. In the event that either party calls for an Expert determination pursuant
to the terms hereof, the parties shall have ten (10) days from the date of such request to agree upon an Expert and, if they fail
to agree, each party shall have an additional ten (10) days to make its respective selection of a firm or individual, and
within ten (10) days of such respective selections, the two (2) respective firms and/or individuals so selected shall select another
such nationally recognized consulting firm or individual to be the Expert. If either party fails to make its respective selection
of a firm or individual within the ten (10) day period provided for above, then the other party’s selection shall be the
Expert. Also, if the two (2) respective firms and/or individuals so selected shall fail to select a third nationally recognized
consulting firm or individual to be the Expert, then such Expert shall be appointed by the American Arbitration Association and
shall be a qualified person having at least ten (10) years recent professional experience as to the subject matter in question.
Prior to the actual occurrence of a dispute hereunder, upon request by either party, the parties shall in good faith select and
agree upon the firm or individual who will perform the duties of the Expert hereunder with respect to one, some or all of the
issues that may be referred to an Expert pursuant to the provisions of this Agreement; provided that at any time after such pre-approval
of an Expert, upon the request of either party based upon a reasonable objection to such Expert, the parties shall in good faith
discuss the replacement of such Expert with respect to one, some or all of the issues that may be referred to such Expert hereunder.

 

3.18.      Facility.
The term “Facility” shall mean the facility located on the real property located in [_______________], [Kentucky/Florida],
as further described on attached Exhibit A.

 

3.19.      Facility
Expenses. The term “Facility Expenses” shall mean for the requisite period, the sum of the following items:

 

(i)          The
cost of operating the Facility incurred in accordance with this Agreement, including, without limitation, compensation, fringe
benefits, payroll taxes and other costs relating to employees of Licensee or the Manager (the foregoing costs shall not include
salaries and other employee costs of any personnel of the Manager who do not work at the Facility on a regular basis, unless such

 

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persons are replacing
or supplementing the services of Facility level employees at a time of need for such assistance (i.e., in the event of emergency,
absence, vacancy, or unusual demand levels, or other atypical circumstances);

 

(ii)         Departmental
expenses incurred at departments within the Facility; administrative and general expenses; the cost of marketing, advertising
and business promotion incurred by the Facility in accordance with the Marketing Budget; heat, light, and power; software license
fees and computer line charges at the Facility;

 

(iii)        Facility
license fees (prorated amongst applicable license terms);

 

(iv)        Except
to the extent funded from the FF&E Reserve, the cost of FF&E and Inventories consumed in the operation of the Facility;

 

(v)         A
reasonable reserve for uncollectible accounts receivable as determined by the Manager;

 

(vi)        To
the extent provided in the Approved Operating Budget or otherwise approved in writing by Tenant and Licensee, all costs and fees
of independent professionals or other third parties who are retained by the Manager to perform services required or permitted
hereunder;

 

(vii)       To
the extent provided in the Approved Operating Budget or otherwise approved in writing by Tenant and Licensee, all costs and fees
of technical consultants and operational experts who are retained or employed by the Manager for specialized services (including,
without limitation, quality assurance inspectors) and the cost of attendance by employees of the Facility at training and manpower
development programs sponsored by the Manager;

 

(viii)      Payments
made into the FF&E Reserve, up to $500 per unit, per calendar year;

 

(ix)         Any
applicable sales tax;

 

(x)          The
Operating Fee paid to Manager, and such other costs and expenses incurred by Manager or its Affiliates or employees in connection
with the Facility as are specifically provided for elsewhere in this Agreement (but expressly excluding any Construction Management
Fee payable to Manager or any fee for construction management services payable to any third party to the extent either arise from
payments from the FF&E Reserve for capital expenditures in excess of $500 per unit, per calendar year);

 

(xi)         Costs
and expenses incurred by the Expert in performing its duties under Section 18.14 of the Agreement;

 

(xii)        Any
premium or deductible on any of the insurance policies maintained by Manager under Article XII below;

 

(xiii)       All
other costs and expenses treated as Facility Expenses under this Agreement or under the Lease Agreement or included in the Approved
Operating Budget; and

 

(xiv)       Certain
expenses incurred by Manager with respect to multiple Facilities, including the Facility, and allocated to the Facility in accordance
with Section 4.10.

 

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Except as expressly set forth in an Approved
Operating Budget or expressly permitted in this Agreement or otherwise expressly approved by Tenant, the term “Facility
Expenses” shall not include:

 

		a)	Any employee claim which is not
                                         covered by insurance, if the claim arose as a result of the gross negligence or intentional
                                         misconduct of the Manager, or its Home Office Employees or officers;

 

		b)	Costs incurred by Manager for salary
                                         and wages, payroll taxes, workers' compensation, bonus compensation, incentive compensation,
                                         retirement plan payments, travel expenses and other benefits payable to Manager's corporate
                                         office employees or divisional or regional supervisor employees (including, without limitation,
                                         non-incentive stock option grants and any bonus compensation to such employees);

 

		c)	Costs and expenses incurred by Manager
                                         for stock options plans or stock award programs provided to personnel and staff unless
                                         approved by Tenant in writing or included as part of the Approved Budget;

 

		d)	Costs incurred by Manager for in-house
                                         accounting and reporting systems, software or services, or any pro rata charge thereof,
                                         furnished by Manager under this Agreement, as distinguished from third party accounting
                                         and reporting costs (as for example, the annual auditing costs of accountants) and third
                                         party software (such as Yardi);

 

		e)	Costs incurred by Manager for forms,
                                         papers, ledgers and other supplies, equipment, copying and telephone of any kind used
                                         in Manager's office at any location other than the Facility;

 

		f)	Costs incurred by Manager for political
                                         contributions;

 

		g)	Costs attributable to losses which
                                         are covered by the indemnity obligations of Manager pursuant to Section 14.05 of this
                                         Agreement;

 

		h)	Costs incurred by Manager for training
                                         and hiring expenses related to Home Office Employees or divisional supervisory employees,
                                         including but not limited to employment and employment agency fees;

 

		i)	Costs incurred by Manager for advertising
                                         expenses of Manager other than costs of marketing the Facility for lease or occupancy,
                                         or costs of employment ads for positions at the Facility;

 

		j)	Costs incurred by Manager for any
                                         in-house risk manager, architect, engineer, accountant or other professional advisor
                                         or consultant employed by Manager (as distinct from third parties engaged for the performance
                                         of such services) except for allocations for services rendered directly to the Facility;

 

		k)	Costs incurred by Manager for dues
                                         of Manager or any of its employees (except those employees located at the Facility) in
                                         professional

 

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	 	 	organizations or for any
                                         of Manager's employees participating in industry conventions or meetings (except those
                                         employees located at the Facility);

  

		l)	Payments made into the FF&E
                                         Reserve in excess of $500 per unit, per calendar year; and

 

		m)	Any costs and expenses incurred
                                         in management of properties or facilities not operated by Tenant.

 

3.20.      FF&E.
The term “FF&E” shall mean all items of personal property, as defined under the Model Uniform Commercial Code,
including, but not limited to: (a) all equipment, machinery, fixtures, and other items of property, now or hereafter permanently
affixed to or incorporated into the Facility, including, without limitation, all furnaces, boilers, heaters, electrical equipment,
heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling
and air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, all of which, to the maximum
extent permitted by law, are hereby deemed by the parties hereto to constitute real estate, together with all replacements, modifications,
alterations and additions thereto; (b) all furniture, furnishings, movable walls or partitions, computers or trade fixtures
or other personal property of any kind or description used or useful in Licensee’s business on or in the Facility, and all
modifications, replacements, alterations and additions to such personal property, except those incurred in normal resident turnover
which shall be a Facility Expense; (c) all linen, china, glassware, tableware, uniforms and similar items, whether used in
connection with public space or Licensee rooms; and (d) “Property and Equipment,” “P&E,” and
“FF&E” (as such terms are customarily used and defined in the most broad and inclusive sense), as well as all
other items included within the category of Inventory.

 

3.21.      FF&E
Reserve. The term “FF&E Reserve” shall mean the reserve established pursuant to Section 10.02(a). All amounts
in the FF&E Reserve shall be the property of the Licensee.

 

3.22.      FF&E
Reserve Expenditures. The term “FF&E Reserve Expenditures” shall mean the expenditures from the FF&E
Reserve pursuant to Article X below.

 

3.23.      FF&E
Reserve Payment. The term “FF&E Reserve Payment” shall mean the reserve payment required pursuant to Section
10.02(e).

 

3.24.      Fiscal
Year. The term “Fiscal Year” shall mean the calendar year, and the period, if any, from January 1st
to the end of the Term in the calendar year in which the Term expires.

 

3.25.      Force
Majeure Event. The term “Force Majeure Event” means any circumstance at the Facility which is not in the reasonable
control of either party hereto, caused by any of the following: strikes, lockouts; acts of God; acts of war; acts of terrorism;
civil commotion; fire or any other casualty; governmental action; or other similar cause or circumstance which is not in the reasonable
control of either party hereto. Neither lack of financing nor general economic and/or market factors is a Force Majeure Event.

 

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3.26.      GAAP.
The term “GAAP” shall mean Generally Accepted Accounting Principles as adopted by the American Institute of Certified
Public Accountants.

 

3.27.      GDP
Deflator. The term “GDP Deflator” shall mean the “Gross Domestic Product Implicit Price Deflator”
issued from time to time by the United States Bureau of Economic Analysis of the Department of Commerce, or if the aforesaid GDP
Deflator is not at such time so prepared and published, any comparable index selected by Manager and reasonably satisfactory to
Licensee and Tenant (a “Substitute Index”), then prepared and published by an agency of the government of the United
States, appropriately adjusted for changes in the manner in which such index is prepared and/or year upon which such index is
based. Except as otherwise expressly stated herein, whenever a number or amount is required to be “adjusted by the GDP Deflator,”
or similar terminology, such adjustment shall be equal to the percentage increase or decrease in the GDP Deflator which is issued
for the month in which such adjustment is to be made (or, if the GDP Deflator for such month is not yet publicly available, the
GDP Deflator for the most recent month for which the GDP Deflator is publicly available) as compared to the GDP Deflator which
was issued for the month in which the Commencement of Management Services occurred.

 

3.28.      Government
Agency. The term “Government Agency” shall mean any legislative body, court, agency, authority, board (including,
without limitation, health and long term care, environmental protection, planning and zoning), bureau, commission, department,
office or instrumentality of any nature whatsoever of any governmental or quasi-governmental unit of the United States or the
State or any county or any political subdivision of any of the foregoing, whether now or hereafter in existence, having jurisdiction
over Manager or the Facility or any portion thereof.

 

3.29.      Hazardous
Substances. The term “Hazardous Substances” shall mean any substance:

 

(i)          the
presence of which requires or may hereafter require notification, investigation or remediation under any federal, state or local
statute, regulation, rule, ordinance, order, action or policy; or

 

(ii)         which
is or becomes defined as a “hazardous waste”, “hazardous material” or “hazardous substance”
or “pollutant” or “contaminant” under any present or future federal, state or local statute, regulation,
rule or ordinance or amendments thereto including, without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.)
and the regulations promulgated thereunder; or

 

(iii)        which
is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any Government Agency; or

 

(iv)        the
presence of which on the Facility causes or materially threatens to cause an unlawful nuisance upon the real property described
in Exhibit A or to adjacent properties or poses or materially threatens to pose a hazard to the Facility or to the health
or safety of persons on or about the Facility; or

 

(v)         without
limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic compounds; or

 

(vi)        without
limitation, which contains polychlorinated biphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or

 

    	7

    	 

    

 

(vii)       without
limitation, which contains or emits radioactive particles, waves or material; or

 

(viii)      without
limitation, constitutes materials which are now or may hereafter be subject to regulation pursuant to the Material Waste Tracking
Act of 1988, or any Applicable Laws promulgated by any Government Agency.

 

3.30.      Home
Office Employees. The term “Home Office Employees” shall mean those employees defined in Section 4.05.

 

3.31.      Incentive
Fee. The term “Incentive Fee” shall have the meaning given to such term in Section 3.02.

 

3.32.      Intellectual
Property. The term “Intellectual Property” shall mean (i) all computer software (and any associated source
codes) developed and owned by Manager or an Affiliate of Manager; (ii) all manuals, instructions, policies, procedures and directives
developed and issued by Manager to its employees at the Facility or to Licensee’s employees at the Facility regarding the
procedures and techniques to be used in operation of the Facility; and (iii) the “Allegro” name used as part of the
name of the Facility. The term “Intellectual Property” does not include the data and information stored or maintained
on the Intellectual Property described in subsection (i) above.

 

3.33.      Inventories.
The term “Inventories” shall mean all inventories, as such term is customarily used and defined in its most broad
and inclusive sense including, but not limited to, all inventories of food, beverages and other consumables held by Manager for
sale or use at or from the Facility, and soap, cleaning supplies, paper supplies, operating supplies, china, glassware, silver,
linen, uniforms, building and maintenance supplies, spare parts and attic stock, medical supplies, drugs and all other such goods,
wares and merchandise held by Manager for sale to or for consumption by Residents of the Facility and all such other goods returned
to or repossessed by Manager.

 

3.34.      Lease
Agreement. The term “Lease Agreement” shall mean the Lease Agreement of even date herewith between the Owner,
as the landlord thereunder, and the Tenant, as tenant thereunder, with respect to the Facility.

 

3.35.      Legal
Requirements. The term “Legal Requirements” shall mean all federal, state, county, municipal and other governmental
statutes, codes, laws, rules, orders, writs, regulations, ordinances, judgments, decrees and injunctions affecting the Facility
or the maintenance, construction, alteration or operation thereof, whether now or hereafter enacted or in existence, including,
without limitation, (a) all permits, licenses, authorizations, certificates and regulations necessary to operate the Facility
for its Permitted Use, and (b) Applicable Laws.

 

3.36.      Licensee.
The term “Licensee” shall mean the Entity holding the State license to operate the Facility for its Permitted Use,
who shall be the Subtenant until the expiration or earlier termination of the Sublease, and thereafter shall be the Tenant.

 

3.37.      Management
Services. The term “Management Services” shall mean the operational and personnel administration services described
in this Agreement, which shall commence upon the date of this Agreement.

 

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3.38.      Manager.
The term “Manager” shall mean LOVE MANAGEMENT COMPANY, LLC, a Missouri limited liability company d/b/a Allegro
management company.

 

3.39.      Marketing
Budget. The term “Marketing Budget” shall be the Marketing Budget included in the Approved Operating Budget.

 

3.40.      Marketing
Services. The term “Marketing Services” shall have that meaning given such term in Section 4.02.

 

3.41.      Net
Facility Revenues. The term “Net Facility Revenues” shall mean for the applicable period of time, Total Facility
Revenues for such period (i) less the cost of rent and similar incentives provided to Residents and prospective Residents during
such period, (ii) less the cost of bad debt expenses incurred during such period, and (iii) plus the amount of bad debt recoveries
received during such period.

 

3.42.      Net
Operating Income. The term “Net Operating Income” for any period shall mean Total Facility Revenues for such
period less Facility Expenses (other than Facility Expenses of the type described in Section 1.19(j)) for such period.

 

3.43.      Non-Routine
Capital Expenditures. The term “Non-Routine Capital Expenditures” shall have the meaning given to such term
in Section 10.03(a).

 

3.44.      Operating
Fee. The term “Operating Fee” shall have the meaning given such term in Section 3.01.

 

3.45.      Owner.
The term “Owner” shall mean ARHC [___________], LLC, a Delaware limited liability company.

 

3.46.      Permitted
Use. The term “Permitted Use” shall mean use as an independent and/or assisted living facility [FOR
COLLEGE HARBOR ONLY and for skilled nursing] and for such other uses as may be necessary or incidental to such use, with
appropriate amenities for the same, and for no other purpose that has not been approved in writing by Tenant, Owner and Manager.

 

3.47.      Person.
The term “Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal representatives,
successors and assigns of such Person where the context so admits.

 

3.48.      Repairs
and Equipment Estimate. The term “Repairs and Equipment Estimate” shall have the meaning given to such term
in Section 10.02(e).

 

3.49.      Residents.
The term “Resident” or "Residents" shall have the meaning given such term in Section 2.02(c).

 

3.50.      State.
The term “State” shall mean the [Commonwealth of Kentucky/State of Florida] and any regulatory agencies within the
State with overview authority or other authority over the Facility, unless otherwise specifically indicated.

 

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3.51.      Subtenant.
The term “Subtenant” shall mean ____________________________, a __________ ______________.

 

3.52.      Sublease.
The term “Sublease” shall mean the Transition Period Sublease of even date herewith between the Tenant and the Subtenant.

 

3.53.      Targeted
NOI. The term “Targeted NOI” shall mean the total targeted Excess Cash Flow for a given Fiscal Year (or any
period thereof) as reflected in the Approved Operating Budget for such Fiscal Year.

 

3.54.      Tenant.
The term “Tenant” shall mean ARHC [_____________] TRS, LLC, a Delaware limited liability company.

 

3.55.     Term.
The “Term” of this Agreement shall be the period beginning on the date of Commencement of Management Services and
ending at 11:59 p.m. on the day before the second (2nd) anniversary of such date (the "Initial Term"), subject to earlier
termination as permitted under the terms of this Agreement. Unless either party provides notice to the other party of termination
at least thirty (30) days prior to the end of the Initial Term of this Agreement or any extended term of this Agreement, the Term
shall automatically extend for successive one-year periods following the expiration of the Initial Term (each a “Renewal
Term”).

 

3.56.      Total
Casualty. The term “Total Casualty” shall mean any fire or other casualty which renders the Facility Unsuitable
for its Permitted Uses.

 

3.57.      Total
Facility Revenues. The term “Total Facility Revenues” shall mean for the applicable period of time, but without
duplication, all gross revenues and receipts of every kind received or derived by or for the benefit of Licensee, Manager or their
Affiliates from operating or causing the operation of the Facility and all parts thereof; provided, however, that
Total Facility Revenues shall not include the following: the Operating Fee paid by Licensee to Manager pursuant to this Agreement
(which, for the avoidance of doubt, shall be based upon Total Facility Revenues and treated as a Facility Expense); gratuities
to Facility employees; federal, state or municipal excise, sales, occupancy, use or similar taxes collected directly from Residents
or included as part of the sales price of any goods or services, and which are remitted to the appropriate Government Agency;
insurance proceeds (except loss of income insurance); condemnation proceeds; and any proceeds from the sale of the Facility or
from the refinancing of any debt encumbering the Facility; proceeds from the disposition of furnishings, fixtures and equipment
no longer necessary for the operation of the Facility, which shall be deposited in the FF&E Reserve; and interest which accrues
on amounts deposited in the FF&E Reserve. Any deposits or other amounts that are refunded to a Resident shall be credited
against Total Facility Revenues during the month in which such refunds are made, if previously included in Total Facility Revenues.

 

3.58.       Unsuitable
for Its Permitted Uses. The term “Unsuitable for its Permitted Uses” shall mean a state or condition of the
Facility such that following any damage or destruction involving the Facility, the Facility cannot be operated in the reasonable
judgment of Manager (after conferring with Licensee, Tenant and Owner) on a commercially practical basis for its Permitted Use.

 

3.59.      Working
Capital. The term “Working Capital” means assets that are reasonably necessary and used for the day-to-day
operation of the Facility, including, without limitation,

 

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amounts sufficient for
the maintenance of petty cash funds, amounts deposited in operating bank accounts, accounts receivables, prepaid expenses, and
funds required to maintain Inventories and pay all Facility Expenses as they become due, less accounts payable and accrued current
liabilities.

 

Article
IV.

APPOINTMENT oF MANAGER AND PRIMARY GoAL OF AGREEMENT

 

4.1.        Appointment
of Manager. Licensee hereby appoints Manager and Manager hereby accepts appointment, subject to the terms and conditions
of this Agreement, as the sole and exclusive manager for the daily operation and management of the Facility during the Term. Except
as otherwise provided herein, Manager shall have responsibility and complete and full control and discretion in the operation,
direction, management and supervision of the Facility, subject only to the limitations expressed herein. Manager accepts said
appointment and agrees to manage the Facility during the Term of this Agreement in accordance with the terms and conditions hereinafter
set forth. Notwithstanding any provision of this Agreement to the contrary, Licensee shall, to the extent required by Legal Requirements,
retain ultimate authority and responsibility for the operation of the Facility, and Manager shall act in accordance with Licensee’s
written instructions, if given pursuant to the authority retained by Licensee in this sentence.

 

4.2.        Goals.
Manager shall, consistent with the then-current Approved Operating Budget and to the extent funds are made available, take all
commercially reasonable steps to:

 

(i)          Have
the Facility operated and maintained the way it was previously operated and maintained by Manager or its Affiliates;

 

(ii)         Establish
and maintain programs to promote the most effective utilization of the Facility’s services;

 

(iii)        Provide
quality services to residents of the Facility (the “Residents”) in a manner consistent with the form of resident agreement
in use from time to time at the Facility in accordance with Section 4.08 below and the Approved Operating Budget;

 

(iv)        Establish
appropriate marketing programs and maintain a public image of excellence for the Facility;

 

(v)         Maintain
a well-trained and sufficient number of quality staffing of the Facility;

 

(vi)        Operate
the Facility on a sound financial basis;

 

(vii)       Institute
and maintain a sound financial accounting system for the Facility;

 

(viii)      Institute
and maintain adequate internal fiscal controls through proper budgeting, accounting procedures, and timely financial reporting;

 

(ix)         Prevent
loss of Total Facility Revenues from the Facility and establish sound Cash Flow through sound billing and collection procedures
and methods;

 

(x)          Conform
operations at the Facility to all applicable Legal Requirements; and

 

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(xi)         Maintain
the Facility in a first-class condition and repair.

 

Article
V.

OPERATING FEES

 

5.1.        Operating
Fee. As compensation for the services to be rendered by Manager in accordance with this Agreement, unless an Event of Default
by Manager has occurred and is continuing, during the Term Licensee shall pay to Manager on a monthly basis in accordance with
Section 5.01 an operating fee (the “Operating Fee”) equal to five percent (5.0%) of the Net Facility Revenues.
The Operating Fee for the month during which the Commencement of Management Services occurs and for the month during which the
expiration of the Term occurs shall be prorated based on the number of days in the month including the date of the Commencement
of Management Services and the date the Term expires. The Operating Fee for the month during which the Commencement of Management
Services occurs shall be due in the first month after the month in which the Commencement of Management Services occurs.

 

The Operating Fee will
cover the cost of Manager’s supervision and general overall management of the Facility, including Manager’s overhead
costs and its Home Office Employees’ salaries and fringe benefits and all necessary travel and incidental expenses of management
in accordance with Article IV (except as otherwise provided in Section 1.19(a) above and Section 4.05 below) (except for allocable
costs described in Section 4.10, which shall be Facility Expenses).

 

5.2.        Incentive
Fee. As additional compensation for services to be rendered by Manager, beginning in the first full Fiscal Year following
the Effective Date (i.e., beginning on January 1, 2015), an incentive fee shall be paid to Manager equal to twenty percent (20%)
of any Excess Cash Flow over Targeted NOI (the “Incentive Fee”) for each Fiscal Year. For these purposes, Excess
Cash Flow shall mean the amount, if any, that is left after deducting from Total Facility Revenues for the applicable Fiscal Year
the amount necessary to pay the following amounts (including all amounts accrued pursuant to the second paragraph of Section 5.02
below), in the following order, for that Fiscal Year (i) Facility Expenses (which shall include the Operating Fee) and (ii) payment
to the FF&E Reserve a contribution of up to $500 per unit (without duplication to the extent such contribution has been reflected
in the determination of Facility Expenses) as provided herein. Any Incentive Fee for a Fiscal Year shall be payable after the
Annual Financial Report for that Fiscal Year has been accepted pursuant to Section 6.01 below. For the avoidance of doubt, any
remaining Excess Cash Flow after payment of the Incentive Fee in accordance with this Agreement shall be paid to Tenant.

 

5.3.        Special
Agreement Concerning the Revenues from the Sale of Alcoholic Beverages. [DOES NOT APPLY TO HELMWOOD]. Manager is currently the
holder of a license issued by the Florida Department of Professional Regulation, Division of Alcohol and Tobacco (the "Division")
to sell alcoholic beverages at the Facility. The parties agree as follows concerning the sale of alcoholic beverages at the Facility:

 

		(a)	All
                                         sales of alcoholic beverages at the Facility shall only be accomplished in strict accordance
                                         with applicable law.

 

		(b)	Until and unless Licensee obtains
                                         a license for the sale of alcoholic beverages, (and unless the Licensee, Manager and
                                         Tenant agree to

 

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	 	 	discontinue the sale of
                                         alcoholic beverages at the Facility) at all times both this Agreement and the Sublease
                                         shall remain in full force and effect, Manager agrees that Manager shall retain its license
                                         for the sale of alcoholic beverages at the Facility existing as of the Effective Date.

 

		(c)	In the event that anytime during
                                         the term of this Agreement, the Division determines that Manager must be a co-licensee
                                         with Licensee in connection with the sale of alcoholic beverages at the Facility, at
                                         Licensee's sole cost and expense, Manager shall take all reasonable and necessary steps
                                         to join in such application, provide all certifications and documentation required for
                                         Manager's inclusion as a co-licensee for the beverage license for the Facility, and to
                                         satisfy the requirements imposed upon Manager as a co-licensee for the beverage license
                                         for the Facility.

 

		(d)	At anytime during the term of this
                                         Agreement that either: (i) there is a Sublease in place, or (ii) Licensee is not
                                         the holder of a valid license to sell alcoholic beverages at the Facility and Manager
                                         does hold such a license:

 

(1) Manager
shall be entitled to retain one hundred percent (100%) of the income received from the sale of alcoholic beverages at the Facility
and

 

(2) the costs
of purchase of alcoholic beverages for resale by the Facility shall not be included in Facility Expenses and shall be paid by
Manager from Manager's own funds.

 

		(e)	For the sake of clarity, at anytime
                                         during the term of this Agreement, both (i) there is no Sublease in place with regard
                                         to the Facility, and (ii) Licensee holds a license from the Division authorizing the
                                         sale of alcoholic beverages from the Facility (regardless of whether Manager is a co-licensee
                                         thereon), the provisions of paragraph 3.03(d) above shall not apply and (x) income from
                                         the sale of alcoholic beverages shall be included in Total Facility Revenues, and (z)
                                         the costs of purchase of alcoholic beverages for resale by the Facility shall be included
                                         in Facility Expenses.

 

		(f)	At the time of changeover between
                                         the provisions of paragraph 3.03(d) and 3.03(e) above, the parties shall make reasonable
                                         and equitable adjustments amongst themselves with regard to the party making payment
                                         for purchases of alcoholic beverages for resale.

 

		(g)	Upon the termination of this Agreement
                                         for any reason, Manager shall be removed from the alcoholic beverage license for the
                                         Facility within three (3) business days following the last day of the term of this Agreement.

 

5.4.       Construction
Management. Licensee shall have the option of supervising all capital improvement or other construction management projects at
or involving the Facility or requesting

 

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Manager to supervise the
same on a case by case basis. For any supervision of capital improvement projects or other construction management services at
or involving the Facility:

 

		(a)	as
                                         to which capital improvement project Licensee has delegated supervision to Manager; and

 

		(b)	either, (i) the cost of which individual
                                         project exceeds $300,000.00 or (ii) the scope of which capital improvement project reasonably
                                         necessitates true construction management services (as reasonably recommended to Licensee
                                         by Manager or as determined by Licensee),

 

Tenant/Licensee shall
pay and Manager shall receive an additional fee equal to five percent (5%) of the total cost of the project (the “Construction
Management Fee”) in the event Manager agrees to undertake (either directly or through an Affiliate) to provide such construction
management services. For any individual capital improvement project or other construction project at or involving the Facility,
the cost of which does not exceed $300,000.00 or the scope of which does not reasonably require professional construction management
services, Manager shall receive no additional fee. In addition, Manager shall not be entitled to any additional fee for construction
projects where Licensee has elected to self-supervise or to hire another construction management professional to oversee the project.

 

5.5.        No
Other Fees. Except for any Termination Fee or Early Termination Fee and any other compensation expressly set forth in this
Agreement, the fees detailed in this Article III shall be Manager’s only compensation under this Agreement.

 

Article
VI.

DUTIES AND RIGHTS OF MANAGER

 

6.1.        Authority
of Manager Right of Possession. Subject to the limitations in the last sentence of Section 2.01 above, Facility operations
shall be under the supervision and control of Manager who, except as otherwise specifically provided in this Agreement, shall
be responsible for the proper and efficient operation of the Facility. To the fullest extent permitted by Legal Requirements,
Manager shall have discretion and control, free from interference, interruption or disturbance, in all matters relating to day-to-day
management and operation of the Facility, including, without limitation, the following: fees and charges for providing accommodations,
food services, and related services to Residents and their guests (subject to Licensee’s rights under Section 8.01 below);
supervision of Resident care; credit policies; food and beverage services; employment policies; executing, modifying and terminating
licenses and concessions for commercial space within the Facility in accordance with Section 4.04 hereof (provided that the term
of any such license or concession shall not extend beyond the Term of this Agreement); receipt, holding and disbursement of funds;
maintenance of bank accounts; procurement of inventories, supplies and services; promotion and publicity; and, generally, all
activities necessary for the operation of the Facility.

 

6.2.        Marketing
Services. Manager shall provide the following services (the “Marketing Services”):

 

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(i)          Prepare
the marketing plan and marketing strategy for the Facility, and the Marketing Budget, which shall be part of the Annual Operating
Budget, revised annually at the time of submission of the Annual Operating Budget, and (as approved) part of the Approved Operating
Budget.

 

(ii)         Direct
the marketing efforts for the Facility in accordance with the Approved Operating Budget.

 

(iii)        Plan
and implement community outreach, public relations and special events programs.

 

6.3.        Hiring
and Training of Staff. Subject to the limitations in the last sentence of Section 2.01 above, Manager shall be solely responsible
for the hiring of all Facility staff. All personnel hired for purposes of operating and maintaining the Facility shall be employed
and paid by Manager, and the salaries, costs and benefits of such employees shall be Facility Expenses. The salaries, costs and
benefits of the employees shall be competitive with the community in which the Facility is located and generally commensurate
with the salaries, costs and benefits paid by Manager or its Affiliates at the other comparable facilities it owns or manages,
to the extent provided for in the Approved Operating Budget. Manager may retain the services of a professional employer organization
(PEO) reasonably acceptable to Licensee to provide payroll benefits, administration and other employment-related services. The
form of the agreement between Manager and the PEO shall be subject to Licensee’s approval. The cost of the PEO shall be
a Facility Expense. The PEO shall not be deemed an agent or representative of Licensee, Tenant or Owner for purposes of this Agreement.

 

6.4.        Operation
Services Duties. As Manager of the Facility, Manager shall implement all aspects of the operation of the Facility in accordance
with the terms of this Agreement, and to the fullest extent permitted by Legal Requirements, shall have responsibility and commensurate
authority for all such activities. In addition to any other duties set forth in this Agreement, and subject to the limitations
contained in this Agreement, Manager shall:

 

(i)          On
behalf of Licensee, enter into all contracts, leases and agreements required in the ordinary course of business for the supply,
operation, maintenance and service of the Facility (including but not limited to food procurement, trash removal, pest control
and elevator maintenance) and, subject to adequate funds being available, pay the costs of all such services when due. Manager
shall obtain the written consent of Licensee before entering into any contract, lease or agreement in excess of $15,000 per year,
or with a term of more than twelve (12) months that may not be terminated by Manager without penalty on no more than thirty (30)
days written notice, except those specifically set forth in the Approved Operating Budget or authorized by Section 4.08 below.
Notwithstanding the foregoing, Manager shall obtain Licensee’s written consent on any proposed resident lease whose proposed
terms are less than 85% of the approved Leasing Guidelines. If Manager requests the written consent of Licensee to a contract,
lease or agreement pursuant to the immediately preceding sentence, in accordance with the notice requirements in Section 18.04
below, then the Licensee shall be conclusively deemed to have given such written consent if Licensee has not, within ten (10)
business days after its receipt of such written notice from Manager, given Manager written notice, in accordance with the requirements
of Section 18.04 below, objecting to such contract, lease or agreement.

 

(ii)         Purchase
such Inventories as are necessary to operate and maintain the Facility in a proper manner.

 

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(iii)        Recruit,
hire, supervise and train all employees to be employed at the Facility.

 

(iv)        Provide
care to Residents of the Facility as provided for in the resident agreement agreed to by the Manager, on behalf of Licensee, in
accordance with Section 4.08 below, and such Residents.

 

(v)         Subject
to the limitations in Section 8.01 below, set all resident fees, and make a diligent and commercially reasonable effort to collect
such fees.

 

(vi)        Oversee
and manage all day-to-day operations of the Facility.

 

(vii)       Subject
to the limitations in Section 5.03 below, collect all amounts included in Total Facility Revenues and deposit them in the “operations”
bank account described in Section 4.11 below.

 

(viii)      Provide
Licensee with periodic operational updates (e.g. quarterly conference calls or as reasonably requested) as to lease-up status,
market conditions, collection matters, budget variances and similar matters.

 

(ix)         As
a Facility Expense, prepare and deliver to Licensee the following statements for the Facility prepared consistently from period
to period (which reports shall be certified by the accounting supervisor of Manager, and either of the president or chief operating
officer of the Manager, as fairly presenting the financial position and results of operations of the Facility at the dates and
for the periods presented in the reports) by the fifth (5th) business day of each calendar month during the Term (provided, however,
that the Manager agrees to use commercially reasonable efforts to provide the same by the fifth (5th) calendar day
of each month):

 

		a)	Balance sheet and income statement
                                         (in Microsoft Excel format) (which balance sheet and income statement shall be consistent
                                         with GAAP);

 

		b)	Trial balance with 3 columns (balance
                                         forward, net debits/credit, and ending balance in Microsoft Excel format);

 

		c)	Rent roll;

 

		d)	Report of daily census for the month;

 

		e)	Marketing report;

 

		f)	Accounts receivable and aging schedule
                                         (with comments regarding status of collections) for any Residents with an outstanding
                                         balance greater than thirty (30) days and greater than $500.00;

 

		g)	Detail of Operating Fee calculations;

 

		h)	Capital expenditure reconciliation
                                         to the approved capital budget in the Approved Budget;

 

		i)	Disclosure of any material communications
                                         relating to the Facility with regulatory agencies and state surveys;

 

		j)	Most recent sales tax filings with
                                         the monthly reporting submittals to help validate to our tax department that you are
                                         current with filings;

 

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		k)	Manager expenses allocated to the
                                         Facility as Facility Expenses pursuant to Section 4.10;

 

		l)	All balance sheet reconcilements;

 

		m)	A month-to-month income statement
                                         variance analysis based upon actual financial performance; and

 

		n)	Any other information in Manager’s
                                         possession or control relating to the Facility reasonably requested by Licensee or Tenant.

 

(x)          As
a Facility Expense, prepare the following reports (which reports shall be certified by an officer of Manager as fairly presenting
the financial position and results of operations of the Facility at the dates and for the periods presented in the reports) and
management status reports of the Facility, to be submitted to Licensee within twenty (20) days after the end of each February,
May, August and December.

 

		a)	Signed Certification statement in
                                         the form attached hereto as Exhibit D executed by the controller, chief
                                         financial officer or president of Manager; and

 

		b)	Manager will cooperate in providing
                                         other reports as reasonable and necessary which are requested by the Tenant.

 

(xi)        As
a Facility Expense, prepare the following annual reports (which reports shall be certified by the accounting supervisor of Manager,
and either of the president or chief operating officer of the Manager as fairly presenting the financial position and results
of operations of the Facility at the dates and for the periods presented in the reports) and management status reports of the
Facility, to be submitted to Licensee within seventy-five (75) days after the end of each calendar year, and each of which to
be subject to an audit, at Tenant's cost, by a firm of accountants selected by Licensee, at Licensee’s expense.

 

		a)	Balance sheet and income statement
                                         (which balance sheet and income statement shall be prepared in accordance with GAAP)
                                         (the “Annual Financial Report”);

 

		b)	Revenues, Facility Expenses, Excess
                                         Cash Flow and Net Operating Income;

 

		c)	Calculations of the Operating Fee;

 

		d)	Capital expense reconciliation to
                                         the capital budget in the Approved Budget;

 

		e)	Communications with any regulatory
                                         agencies relating to the Facility; and

 

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		f)	Manager will cooperate in providing
                                         other reports as reasonable and necessary which are requested by the Tenant.

 

(xii)        As
a Facility Expense, file and pay all applicable sales, personal property and real estate taxes imposed upon the Facility or the
activities conducted therein.

 

6.5.        Manager’s
Home Office Employees. As part of the provision of the services provided by Manager, Manager shall from time to time make
its employees who are not working directly at the Facility (the “Home Office Employees”) available to Licensee
and Manager’s onsite management staff for consultation and advice related to the Facility. Home Office Employees include
Manager’s home office staff and staff at other facilities managed by Manager and its Affiliates with experience in areas
such as, without limitation, accounting, budgeting, finance, human resources, marketing, food service and purchasing. Licensee
may reasonably request such services, but the decision to provide Home Office Employees shall be within the reasonable discretion
of Manager unless they were provided by Manager or its Affiliates under their prior management of the Facility. Except as otherwise
provided in Section 4.10, the services of Home Office Employees shall be provided at no additional charge to Licensee. Should
Licensee request a type, form or level of service that Home Office Employees have not previously provided to the Facility under
Manager or its Affiliates prior management thereof at no additional cost, Manager shall, in its sole discretion, either (i) provide
such services by Home Office Employees for an additional cost to be agreed to in advance by Licensee, which cost shall be a Facility
Expense, or (ii) make a diligent and commercially reasonable effort to locate and contract for such services from outside consultants,
the cost of which shall be a Facility Expense.

 

6.6.        Personnel
Administration. The personnel at the Facility shall be employed by Manager, and the salaries, costs and benefits of such
employees shall be Facility Expenses. Manager shall be responsible for recruiting, hiring, training, promoting, assigning, supervising
and discharging the personnel of the Facility and shall be responsible for the formulation, implementation, modification and administration
of wage scales, rates of compensation, employee insurance, employee taxes, in-service training, attendance at seminars or conferences,
staffing schedules, job descriptions and personnel policies with respect to the personnel of the Facility in accordance with the
Approved Operating Budget and in accordance with all Applicable Laws, including, without limitation, the laws set forth in Section
15.02. Licensee acknowledges and agrees that certain liabilities consisting of vacation pay, sick leave and obligations for quarterly
bonuses accrued while such employees were employed by the Facility’s prior owner as set forth on Exhibit E
shall be assumed by the Manager for the account of the Licensee and the Facility, and the costs of such items shall be a Facility
Expense in the Accounting Periods in which such amounts are paid to the respective employees.

 

6.7.        Purchasing.
Manager shall use, on behalf of the Facility, such purchasing systems and procedures developed by or otherwise available to Manager
or its Affiliates for all items that are consistent with the Approved Operating Budget. In furtherance thereof, Manager shall
utilize, to the extent that they offer competitive prices, any national purchasing contracts that Manager or its Affiliates may
from time to time have in effect with suppliers of equipment and supplies. Any purchase by Manager made pursuant to or otherwise
ancillary to this Agreement shall be made with Manager acting as agent for and at the expense of the Facility or Licensee. Licensee
acknowledges that Manager is not a merchant and thus is not making any representations or

 

    	18

    	 

    

 

warranties with respect
to the goods or services purchased by Manager for use at the Facility, implied or otherwise. Manager shall fully disclose to Tenant
and Licensee in writing any material interest of Manager and/or Affiliate in any vendor and Manager shall establish to Tenant’s
and Licensee’s reasonable satisfaction that the purchase or contract was made after a competitive selection process and
at a fair market price.

 

6.8.        Occupancy
Agreements. Manager shall act as agent for Licensee in executing resident agreements and occupancy agreements, but Manager
shall not enter into such agreement for a duration of more than one year, or any such agreement with terms less than eight-five
percent (85%) of the Leasing Guidelines, without the prior consent of Licensee and Tenant, which shall not be unreasonably withheld,
and which shall be granted or denied by Licensee and Tenant within five (5) business days after Manager’s request. The form
of all resident agreements and occupancy agreements, and any material amendment thereto, shall be subject to Licensee’s
written consent which shall not be unreasonably withheld or delayed.

 

6.9.        Working
Capital. Licensee shall provide Working Capital for the Facility in an amount necessary to satisfy the reasonable needs
of the Facility and Manager’s operation and management thereof, as set forth in the Approved Operating Budget. Under no
circumstances shall Manager have the obligation to advance its own funds if there is insufficient Working Capital. If Manager
provides written notice to Tenant and Licensee of a deficiency in Working Capital and submits an estimate of additional Working
Capital that is needed, Licensee shall provide such additional Working Capital to Manager no later than ten (10) business days
after Licensee’s receipt of a written request for same. In the event Tenant or Licensee disputes Manager’s request
for additional Working Capital by written notice delivered to Manager within such ten (10) business day period, the dispute shall
be submitted to the Expert as provided in Section 18.14 below, and Licensee’s duty to fund such additional Working Capital
shall be tolled until such time as the Expert renders its decision. Manager will manage the Working Capital of the Facility prudently
and in accordance with the Approved Operating Budget. Manager shall review and analyze the Working Capital needs of the Facility
on a continuing basis. If Manager reasonably determines that there is excess Working Capital, such excess shall be returned to
Tenant.

 

6.10.      Expense
Allocations. Manager may allocate to the Facility, as a Facility Expense, a portion of certain out-of-pocket expenditures
which benefit two or more of the facilities managed by Manager provided that such expenditures actually provide benefit to the
Facility and are either included in an Approved Budget or otherwise approved in writing, in advance, by Tenant.

 

6.11.      Deposit
and Disbursement of Funds. Manager shall open an "operations" bank account in which all receipts and monies arising
from the operation of the Facility will be deposited and from which all Facility Expenses will be paid. The CFO, Chairman, President
and any Vice President of the Manager shall be the only signatories on this "operations" bank account.

 

6.12.      Licenses
and Permits. In addition to any other duties set forth in this Agreement, and subject to the limitations contained in this
Agreement, Manager shall cause to be applied for, and use commercially reasonable efforts to obtain and maintain, all licenses
and permits required of Licensee or Manager in connection with the management and operation of the Facility, other than the Facility
License (as herein defined). Manager shall also take all action requested by

 

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Tenant and Licensee to
allow Tenant to make initial applications for, and to prepare and submit any renewals or similar updates required to allow Licensee
to maintain and comply with requirements related to, the Facility License.

 

For purposes of this Agreement, “Facility
License” means the Assisted Living Facility License issued by the Agency for Health Care Administration for the State.

 

Article
VII.

OPERATING PROFITs, CREDITS AND COLLECTIONS, AND

PROCEDURE FOR HANDLING RECEIPTS AND OPERATING CAPITAL

 

7.1.        Total
Facility Revenues. Manager shall be responsible for taking all commercially reasonable steps to collect all Total Facility
Revenues and fees billed to Residents and to the extent Total Facility Revenues and Working Capital are available, for paying
Facility Expenses as agreed in the Approved Operating Budget. The Operating Fee will be paid from the Total Facility Revenues
as Facility Expenses and will appear as such on the profit and loss report required by Section 6.01 below, and subject to available
funds and the provisions of this Agreement relating to payment of the Operating Fee, Manager is entitled to cause payment of the
Operating Fee based upon the Total Facility Revenues for the previous Accounting Period to be paid by the fifth (5th)
calendar day of the current Accounting Period.

 

7.2.        Total
Facility Revenues Priority. During each Accounting Period, the following items shall be paid from Total Facility Revenues,
if available, in the following order: (a) Facility Expenses (which shall include the Operating Fee unless an Event of Default
by Manager has occurred and is continuing), and (b) one-twelfth (1/12) of the FF&E Reserve Payment. The Incentive Fee shall
be payable from Excess Cash Flow as provided in Section 3.02 above. Any remaining Excess Cash Flow, after payment of the Incentive
Fee, shall be payable to Tenant.

 

In the event there is insufficient Total
Facility Revenues to pay all such Facility Expenses in full, any unpaid amounts shall accrue and shall be payable, in the order
set forth above, in any subsequent Accounting Period, to the extent Total Facility Revenues are available in such subsequent Accounting
Period to make such payment, in whole or in part, after application of Total Facility Revenues in the then current Accounting
Period to pay the amounts coming due in such then current Accounting Period in full, in the order set forth above in this Section
5.02.

 

7.3.        Credits
and Collections. Manager shall install credit and collection policies and procedures, and Manager shall institute reasonable
steps necessary to effectuate monthly billing by the Facility, and the collection of accounts and monies owed to the Facility.
This also includes the institution by Manager of legal proceedings in the name of Licensee, the Manager (solely in its capacity
as Manager of the Facility) and/or the Facility, if authorized by Licensee and Tenant in writing or consistent with Manager's
credit and collection policies approved by Licensee and Tenant, to collect such accounts or to enforce the rights of Licensee
as creditor under any contract in connection with the rendering of any service or the purchase of any goods, if, necessary in
Licensee’s judgment after Manager has made a diligent and commercially reasonable effort to collect such accounts or to
enforce such rights without the institution of such legal proceedings. Any and all reasonable costs and/or fees charged by third
parties in

 

    	20

    	 

    

 

connection with the collections
and/or enforcement set forth in this Section 5.03, including, without limitation, attorneys’ fees, shall be included in
Facility Expenses as a legal expense.

 

It being agreed and understood by the
parties that for the Term of this Agreement as the same may be extended or sooner terminated, Licensee expressly appoints Manager,
to the extent permitted by applicable law, as its agent to administer, process and collect, on Licensee’s behalf and in
its name, any third party receivables. Manager shall have the right to enforce Licensee’s rights as creditor under any contract
relating to the Facility or in connection with rendering any services at the Facility for the purposes of collecting accounts
receivable and monies owed to the Facility.

 

Article
VIII.

FINANCIAL RECORDS

 

8.1.        Accounting
and Financial Records. Manager shall, at its own expense, establish and administer accounting procedures and controls and
systems for the development, preparation and safekeeping of records and books of accounting relating to the business and financial
affairs of the Facility, including payroll, accounts receivable and accounts payable. Such records shall be in accordance with
Manager's accounting records consistently maintained for the other facilities owned or managed by Manager or its Affiliates and,
to the extent applicable, in accordance with GAAP. Notwithstanding the foregoing, the Manager agrees to make use of the MRI Accounting
System to be provided by Tenant for financial accounting and reporting purposes.

 

8.2.        Reports.
Manager shall keep Owner, Tenant and Licensee informed as to the financial status, condition, and operation of the Facility and
as to any State or local reporting requirements in connection with the licenses and permits necessary for Manager to operate the
Facility and shall provide the reports required pursuant to Sections 4.04(i), (j) and (k) hereof. At the written request
of Owner, Tenant or Licensee, Manager shall make a commercially reasonable effort to provide to any third party identified in
such written request with any non-proprietary information described in such written request that is in Manager's possession or
under its control, and within the time frame set forth in such written request. In addition to the other reports required of the
Manager hereunder, Manager shall also comply with on a timely basis, or provide Licensee, Tenant, and Owner with all information
within the Manager’s control necessary for Licensee, Tenant and/or Owner to comply on a timely basis, with all reporting
requirements imposed upon the Licensee, Owner, Tenant, Manager, or with respect to the Facility in general by any loan agreement,
agreement for the assumption of debt, mortgage, deed to secure debt or similar instrument evidencing a loan secured by the Facility,
provided copies of such agreements have been provided to Manager.

 

8.3.        Access.
Owner, Tenant and Licensee shall have the right at its expense at all reasonable times to audit, examine, and make copies of books
of account maintained by Manager with respect to the Facility. Such right may be exercised through any agent or employee designated
by Owner, Tenant or Licensee or by an independent public accountant designated by Owner or Tenant. Further, at the end of the
Term of this Agreement, or upon the earlier termination of this Agreement, as provided herein, copies of all books and records
kept for the Facility, including all records kept on electronic media, and accounts and funds belonging to the Facility, are to
be promptly delivered to Licensee in a form readable by generally available

 

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software. Manager shall
either locate or keep copies of books of account and other records maintained by the Manager with respect to the Facility at the
Facility.

 

8.4.        Rights
of Owner to Perform Accounting Functions. Notwithstanding the foregoing provisions of this Article VI, or any other provision
of this Agreement to the contrary, Owner shall have the right, exercisable by written notice to Manager and Licensee, to perform
(or retain a third party to perform), all accounting functions that would otherwise be required to be performed by Manager under
this Agreement, such as, without limitation, billing, payables, operating expense calculations, annual reporting and the like.
If Owner exercises this right, its written notice to Licensee and Manager shall describe the accounting functions that Owner has
decided to perform, and starting thirty (30) days after the date of such written notice, Manager shall no longer be obligated
to perform the accounting functions described in such written notice. The cost of all such accounting functions thereafter performed
by Owner shall be payable as a Facility Expense.

 

Article
IX.

ANNUAL OPERATING BUDGET

 

9.1.        Annual
Operating Budget; Approved Operating Budget. The Approved Operating Budget for the period from the Commencement of Management
Services through December 31, 2014 is attached hereto as Exhibit B.

 

Not later than sixty (60) days before
the end of each Fiscal Year after the Commencement of Management Services during the Term, Manager shall prepare in advance and
deliver to Tenant and Licensee for approval by Tenant and Licensee, which shall not be unreasonably withheld or delayed, a capital
expenditure and operations budget for the next Fiscal Year for the Facility (in which each proposed expenditure will be designated
either as required or desirable), setting forth an estimate of Total Facility Revenues and Facility Expenses, together with an
explanation of anticipated changes to resident charges, payroll rates and positions, non-wage cost increases, and all other factors
differing from the current Fiscal Year. The budget, as proposed (the “Annual Operating Budget”), shall be considered
by Tenant and Licensee and, in consultation between Tenant, Licensee and Manager, the budget for the Facility for the ensuing
Fiscal Year will be prepared by the Manager with the final contents of the budget to be determined mutually by Tenant, Licensee
and Manager, and once so determined shall be the Approved Operating Budget for the ensuing Fiscal Year. If there is a delay in
the preparation of the proposed Annual Operating Budget, or if Tenant and Licensee shall fail to approve the proposed Annual Operating
Budget, Manager shall operate under the expired Approved Operating Budget (increased, but not decreased, by the GDP Deflator)
until a new budget is approved. If consensus cannot be reached between the parties as to the Approved Operating Budget within
sixty (60) days of Tenant’s and Licensee’s receipt of the proposed Annual Operating Budget, the matter shall be submitted
to the Expert pursuant to Section 18.14 below, to determine whether Tenant and Licensee unreasonably withheld or delayed its approval
of the proposed Annual Operating Budget or, if Tenant’s withholding or delay of approval was reasonable, to determine the
Approved Operating Budget, and such determination shall be final and binding on the parties. If the Expert determines that Tenant
and/or Licensee unreasonably withheld or delayed such approval, the proposed Annual Operating Budget shall be deemed the Approved
Operating Budget. The Approved Operating Budget shall include an exhibit detailing the proposed rental amounts by unit type, concessions,
projected absorption and other material terms (the “Leasing Guidelines”).

 

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Manager shall make a diligent and commercially
reasonable effort to operate the Facility as provided herein so that the actual Total Facility Revenues, costs, and Facility Expenses
of the operation and maintenance of the Facility during any applicable Fiscal Year shall be consistent with the Approved Operating
Budget. Manager shall give Licensee, Tenant and Owner prompt written notice if it determines that Facility Expenses included in
the Approved Operating Budget during any Fiscal Year will be exceeded by more than 10% in the aggregate, and of the steps that
Manager intends to take as part of its diligent and commercially reasonable efforts to bring Facility Expenses into compliance
with the Approved Operating Budget. Except as otherwise expressly provided for in this Agreement and except for expenditures relating
to the health and safety of Residents or Facility employees, Manager shall not make expenditures for any item aggregating materially
in excess of the amount budgeted, defined as more than the greater of five percent (5%) and Ten Thousand and NO/100 Dollars ($10,000.00)
and for work undertaken by vendors with whom Manager and its Affiliates have a national agreement or relationship, Twenty Five
Thousand Dollars ($25,000) of the total expense sum of each operating expense category as set forth in the Approved Operating
Budget (which categories shall be as follows: (i) marketing expenses, (ii) administration expenses, (iii) utilities,
(iv) operating and maintenance expenses, (v) taxes and insurance, and (vi) elderly/congregate expenses), without
prior written approval of Tenant and Licensee. Except when necessitated by an Emergency, all expenditures of a capital nature
which are over Five Thousand Dollars ($5,000.00) not otherwise expressly included in the Approved Operating Budget shall also
require prior written approval of Tenant and Licensee. Tenant and Licensee further reserve the right to require Manager to obtain
three (3) competitive bids for any capital projects in excess of Five Thousand Dollars ($5,000.00) (unless such items are
for emergency repairs).

 

Article
X.

OTHER FINANCIAL MATTERs

 

10.1.      Charges.
The overall rate structure of the Facility included in the Approved Operating Budget was approved by Licensee. Manager will recommend,
as part of the proposed Annual Operating Budget (and at such other times as determined by Manager, subject to reasonable approval
of Tenant and Licensee) changes to the overall rate structure of the Facility, including, without limitation, residency room charges,
charges for all ancillary services, and charges for supplies, and special services performed by Facility personnel. All such charges
shall take into account the financial obligations of the Facility, the level of rates at other comparable facilities, and the
importance of providing housing and services at competitive rates, all considered in a manner most likely to achieve the goals
set forth in Section 2.02 above.

 

10.2.      Tax
Status. Manager is obligated to prepare the necessary data for any Federal and State taxes related to the Facility, including
real estate taxes, sales tax and personal property taxes, and submit such data to Tenant and Licensee within the time periods
specified by State and Federal regulations so that Tenant and Licensee may prepare Federal and State tax returns for submission.
Manager shall not be responsible for the preparation of Tenant’s or Licensee’s Federal or State tax returns, or the
collection or payment of any taxes (including interest or penalties thereon) payable with respect to the ownership or operation
of the Facility or any income or asset of Tenant, Licensee, or Owner (other than payment as a Facility Expense of all real and
personal property taxes on the Facility, and of all sales tax on purchases paid as a Facility Expense). Manager shall not be obligated
to contest Taxes imposed with regard to the

 

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Facility, but shall provide
reasonable assistance to any efforts by Licensee, Tenant, or Owner to do so, subject to reimbursement of Manager's reasonable
expenses in connection with rendering such assistance.

 

10.3.      Employee
Withholding. Manager shall use its reasonable efforts to comply with all applicable local, State and Federal requirements
concerning the withholding of taxes from employee wages.

 

10.4.      Reservation
Deposit Accounts. If elected by Manager and in accordance with all applicable laws, Manager may hold unearned deposits or reservation
fees paid by or on behalf of prospective Residents of the Facility ("Reservation Deposits") in a bank account established
therefor until and unless such Reservation Deposits are deemed earned or nonrefundable to the paying party. The account information
concerning any bank account established for Reservation Deposits shall be a trust account established by Manager for the benefit
of the Licensee and reasonable information concerning said accounts and the funds held therein shall be included in the monthly
reports provided to Licensee and Tenant pursuant to this Agreement.

 

Article
XI.

GENERAL COVENANTS AND

TENANT AND MANAGER OBLIGATIONS

 

11.1.      Licensee’s
Obligations. Licensee hereby agrees to perform all obligations of Licensee as set forth herein and to cooperate with all
commercially reasonable requests by Manager to fund, operate and license the Facility.

 

11.2.      Quiet
Enjoyment. Licensee covenants that, so long as Licensee has not terminated this Agreement by reason of (i) an Event of
Default by Manager under this Agreement or (ii) the exercise by Licensee of any right of Licensee to terminate this Agreement
under any other provision of this Agreement, and subject to Licensee’s rights to enter and inspect and/or repair the Facility
as provided herein, and to Licensee’s rights under the last sentence of Section 2.01 above, Manager shall quietly hold,
occupy and enjoy the Facility throughout the Term hereof free from hindrance or ejection by Licensee or Tenant or other party
claiming under, through or by right of Tenant.

 

11.3.      Manager’s
Obligations. Manager hereby agrees to perform all obligations of Manager as set forth herein.

 

11.4.      Covenant
Not To Compete. In addition to any agreement concerning competition governing Manager or its Affiliates under Section 10.14
of that certain Asset Purchase Agreement dated August 25, 2014, during the Term and for a period of two (2) years thereafter (the
“Non-Compete Period”), Manager shall not, and shall not permit any Affiliate, directly or indirectly, to develop,
own, invest in, finance, manage or franchise any facility engaged in a business similar to the business engaged in by the Facility
on the expiration or earlier termination of this Agreement and located within a five (5) mile radius from the Facility. For
the avoidance of doubt and without limitation, any facility operating as a skilled nursing, assisted living facility, memory care
facility, and/or independent living facility shall be deemed to be similar to the business engaged in by the Facility for purposes
of this Section 9.04. This Section shall survive the termination of this Agreement.

 

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11.5.      Covenants
Not to Hire. It is expressly understood and agreed by Manager that, during the Term and for a period of eighteen (18) months
thereafter, Manager shall not, and shall not permit any Affiliate, directly or indirectly, to offer to employ, induce to terminate
the employment of, attempt to hire, or in any way contact regarding employment, any person employed by the Tenant or Owner, or
any person employed at the Facility for any other facility or business, without the written consent of the Tenant or Owner, as
applicable. Nothing herein shall prevent Manager from promoting or transferring Facility level employees to Home Office Employees
or to allow Facility employees to transfer and work at any other facility managed by Manager.

 

Article
XII.

REPAIRS, MAINTENANCE AND REPLACEMENTS

 

12.1.      Routine
Repairs and Maintenance. Subject to the limitations in Article XVII below and subject to the availability of funds and
the Approved Operating Budget, Manager shall, keep the Facility in good order and repair, and shall promptly make, or contract
with third parties on behalf of Licensee to make, all necessary and appropriate repairs and replacements thereto of every kind
and nature, whether interior or exterior, structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen or arising
by reason of a condition existing prior to the commencement of the Term and whether or not necessitated by wear, tear, obsolescence
or defects, latent or otherwise, and shall use all reasonable precautions to prevent damage or injury to the Facility. The cost
of such maintenance, repairs and alterations that are not paid from the FF&E Reserve shall be paid from Total Facility Revenues
and treated as a Facility Expense in determining Cash Flow.

 

12.2.      Repairs
and Equipment.

 

(i)          Manager
shall establish a reserve account (the “FF&E Reserve”) in a bank designated by Owner and approved by Manager,
Tenant, and Licensee, to cover the cost of FF&E Reserve Expenditures. Unless Manager has committed an uncured Event of Default
under this Agreement, and provided that Manager has not received written notice from Owner or Tenant that Manager may not draw
on such FF&E Reserve, Manager may draw on the FF&E Reserve to pay such FF&E Reserve Expenditures.

 

(ii)         Within
five (5) business days following the Effective Date, Licensee shall deposit into the FF&E Reserve a sum equal to $250.00 for
each unit in the Facility as an initial deposit.

 

(iii)        Throughout
the Term, Licensee shall transfer into the FF&E Reserve an amount equal to the FF&E Reserve Payment required by Section
10.02(e) below. All amounts transferred into the FF&E Reserve shall be paid from Total Facility Revenues.

 

(iv)        Manager
shall from time to time make expenditures from the FF&E Reserve, up to the balance in the FF&E Reserve, to pay for: (i)
replacements, renewals and additions to the Facility’s FF&E; and (ii) repairs, alterations, improvements and additions,
whether routine, non-routine or major, to the Facility, including, without limitation, those which are normally capitalized under
GAAP such as repairs, alterations, improvements, renewals, replacements and additions to the structure, the exterior façade,
the mechanical, electrical, heating, ventilating, air conditioning, plumbing and vertical transportation elements of the Facility,
which expenditures Manager believes should be made for the Facility. No expenditures shall be made in excess of said balance without
the written approval of

 

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Licensee and Tenant. At
the end of each Fiscal Year, any amounts remaining in the FF&E Reserve shall be carried forward to the next Fiscal Year. Proceeds
from the sale of FF&E no longer necessary to the operation of the Facility shall be deposited in the FF&E Reserve, as
shall any interest which accrues on amounts placed in the FF&E Reserve. Neither: (x) proceeds from the disposition of FF&E,
nor (y) interest which accrues on amounts held in the FF&E Reserve, shall either (aa) result in any reduction in the required
contributions to the FF&E Reserve, or (bb) be included in Total Facility Revenues. Manager shall provide Licensee, Tenant
and Owner, within thirty (30) days after the end of each month, with an itemized statement setting forth all expenditures made
from the FF&E Reserve through the end of such month during the current Fiscal Year.

 

(v)         The
amount of the annual FF&E Reserve Payment shall be equal to $500 per year for each residential unit.

 

The contributions
for the FF&E Reserve Payment are estimates based upon Manager’s prior experience with the Facility. As the Facility
ages, these amounts may not be sufficient to keep the FF&E Reserve at the levels necessary to make the replacements and renewals
to the Facility’s FF&E, or to make the repairs to the Facility buildings of the nature described in Section 10.02(d),
which are required to maintain the Facility in a first-class condition. If any estimate of any such costs (a “Repairs and
Equipment Estimate”) prepared in good faith by Manager exceeds the available funds in the FF&E Reserve, the anticipated
deficit amount shall be included in the proposed annual Operating Budget for the ensuing year, and if included in the Approved
Operating Budget for that ensuing year, in accordance with Article VII, the payment of the special addition to the FF&E
Reserve will be treated as a Facility Expense.

 

(vi)        Any
failure or refusal by Licensee to fund the amounts necessary to maintain the Facility in appropriate condition within a thirty
(30) day period after Manager’s request therefor may be submitted by Manager to the Expert, pursuant to Section 18.14 below,
to determine whether such failure or refusal was unreasonably withheld or delayed, and if the Expert determines that such failure
or refusal was unreasonably withheld or delayed, Licensee shall be deemed to have approved and shall be obligated to fund such
amounts.

 

12.3.      Building
Alterations, Improvements, Renewals and Replacements.

 

(i)          Manager
shall prepare an annual estimate in the Capital Budget of the expenses necessary for major repairs, alterations, improvements,
renewals and replacements (which repairs, alterations, improvements, renewals and replacements are not among those referred to
in Section 10.02(c)) to the structure or exterior facade of the Facility, or to the mechanical, electrical, heating, ventilating,
air conditioning, plumbing, or vertical transportation elements of the Facility buildings which expenditures, together with all
other repair, maintenance and replacement expenditures to the Facility which are classified as capital expenditures under GAAP
and are not among those referred to in Section 10.02(d), are, to the extent approved by Licensee and Tenant in the Capital
Budget, collectively referred to as “Non-Routine Capital Expenditures”. Manager shall submit such Capital Budget to
Licensee and Tenant as part of the proposed Annual Operating Budget for Licensee’s and Tenant’s approval pursuant
to Section 7.01 above.

 

(ii)         Manager
shall be authorized to use funds in the FF&E Reserve without receiving Licensee’s and Tenant’s prior consent,
to the extent required, in Manager’s reasonable business judgment, for reasonable assessment, remedial and preventive action
(i) as a result of Legal Requirements or as otherwise required for the continued safe and orderly operation of the Facility, (ii)
due to an emergency threatening the Facility, its Residents, patients, guests, invitees or employees, (iii) because the continuation
of a given condition will subject Licensee, Owner, Tenant or Manager to civil or criminal

 

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liability, or (iv) to
undertake appropriate assessment, remedial and preventive actions sufficient to meet any guidelines or regulations adopted by
applicable Government Agencies in connection with any material adverse change to the Facility, such as material changes to any
environmental condition, including, without limitation, bio-contaminants such as mold, including, with respect to mold contamination,
the removal of the mold, abatement of the underlying cause of the mold (including water intrusion), and repair of any leaks associated
with water damage at the Facility. Manager shall, as soon as reasonably practical under the circumstances, notify Licensee, Tenant
and Owner of the existence of any such condition, and of any action that Manager has taken and any costs it has paid or incurred
utilizing the FF&E Reserve under this Section 10.03(b). Manager shall cooperate with Licensee and Tenant in the pursuit of
any such action, and Licensee and Tenant shall have the right to participate therein. Licensee shall replenish the FF&E Reserve
of the Facility, to the extent funds from the FF&E Reserve were used in connection with any such remedial action within thirty
(30) days after Licensee’s receipt of written notice from Manager of the amount of such costs.

 

(iii)        The
cost of all Non-Routine Capital Expenditures referred to in Section 10.03(a) shall be paid, to the extent reasonably possible
(given the requirement, set forth hereinabove that the FF&E at the Facility be replaced in accordance with good, first-class
standards), from the FF&E Reserve, and Licensee shall pay such costs from its own funds only to the extent there are not adequate
funds for such purpose in the FF&E Reserve only to the extent they have been approved in writing by Licensee and Tenant and
in advance of any costs being incurred, except as provided in this Section 10.03.

 

Article
XIII.

REPRESENTATIONS, WARRANTIES AND

GENERAL COVENANTS OF MANAGER 

 

13.1.      Representations,
Warranties and Covenants of Manager. Manager hereby represents and warrants to Licensee and Tenant as follows:

 

(i)          Organization.
Manager is a Missouri limited liability company duly organized, validly existing and in good standing under the laws of the State
of Missouri, and is qualified to do business in the State.

 

(ii)         Authorization;
No Violation of Laws or Agreements. Manager has full power and authority, and has taken all requisite limited liability company
action, to enter into and perform under this Agreement and all other agreements and documents contemplated by or related to this
Agreement to which Manager is a party. Nothing in the articles of organization or operating agreement of Manager, as amended,
or any other agreement, instrument, decree, proceeding, law or regulation (except as specifically referred to in or contemplated
by this Agreement) by or to which Manager is bound or subject would prohibit or inhibit Manager from consummating this Agreement
on the terms and conditions herein contained. Upon execution and delivery, this Agreement and any agreement or document to be
executed by Manager pursuant hereto shall constitute a legal, valid and binding obligation of Manager in accordance with its terms.

 

(iii)        Eligible
Independent Contractor. From and following the Commencement of Management Services, Manager shall at all times be an Eligible
Independent Contractor, and Manager will and shall cause the Facility to be operated in such a manner so that it qualifies as
a “qualified health care facility” within the meaning of Section 856(e)(6)(D) of the Internal Revenue Code at all
times, including, without limitation, implementation of any steps identified by the Tenant from time to time with respect to maintaining
such status. In the event that the Tenant reasonably determines that the terms of this Agreement will have any effect as to cause
the rent under the Lease Agreement to fail to qualify as “rents from real property” within the meaning of Section
856(d) of the Internal Revenue Code, Manager

 

    	27

    	 

    

 

hereby agrees to enter
into a reasonable amendment to this Agreement as proposed by Tenant modifying such terms in such a way as to cause rent under
the Lease Agreement to so qualify as “rent from real property” in the reasonable opinion of Tenant and its counsel;
provided however, no such modifications shall affect the amount of Operating Fees or Incentive Fees or the material terms of any
rights or obligations of Manager hereunder.

 

(iv)        Exclusion.
Manager represents and warrants to Licensee and Tenant that neither Manager nor any of its owners, officers, directors, managers,
or, to its knowledge, employees are excluded (each an “Exclusion”) from participation in any federal health
care programs, as defined under 42 U.S.C. 1320a-7b(f), or in any form of state Medicaid program (each a “Health Care
Program”), and to Manager’s knowledge, there are no pending or threatened governmental investigations that may
lead to such Exclusion. Manager agrees to notify Licensee and Tenant of the commencement of any such Exclusion or investigation
within seven (7) business days of Manager’s first learning of it. Tenant shall have the right to terminate this Agreement
after giving Manager not less than sixty (60) days prior written notice of such election after learning of any such investigation
which may result, with reasonable probability, in Manager’s exclusion. Manager agrees to notify Tenant of the status of
any investigation that may result in Manager’s Exclusion. In the event of Manager’s Exclusion, Tenant shall have the
right to terminate this Agreement effective as of the earlier to occur of the following: (i) sixty (60) days after notice from
Tenant of such termination or (ii) the date on which Tenant shall enter into an agreement with a replacement Manager. In the event
Tenant shall give notice to Manager following Manager’s Exclusion under this Section 11.01(d), Tenant agrees to use its
best efforts in good faith to enter into an agreement with a replacement Manager as soon as possible following Tenant’s
notice. Manager agrees to indemnify Licensee and Tenant and save it harmless from any penalty, loss, cost or damage Licensee and
Tenant may incur as a result of Manager’s Exclusion.

 

Article
XIV.

INSURANCE

 

14.1.      General
Insurance Requirements. Manager and Tenant, as indicated as Primarily Responsible Insured on Exhibit C, shall,
at all times during the Term, keep the Facility and all property located therein or thereon, insured against the risks and in
the amounts as provided on attached Exhibit C, shall name Licensee and Owner, and either Tenant or Manager, as applicable,
as additional insureds on such policies as set forth on Exhibit C and upon Commencement of Management Services shall
provide Manager with a certificate of insurance reflecting such insurance coverage, and Manager shall pay as a Facility Expense
all premiums and deductibles on all of the insurance policies maintained by Manager and approved by Licensee and Tenant under
this Article XII.

 

Licensee, Tenant and Manager may agree
upon new required insurance coverage limits and policies from time to time provided that any adjustments thereto shall also be
approved in writing, in advance by Owner. Licensee, Tenant and Owner will also discuss and agree with Manager from time to time
whether, in light of any new or different coverages, Manager rather than Tenant, or Licensee, Tenant and/or Owner rather than
Manager, as applicable, should assume primary responsibility for any particular insurance coverage under this Article XII.

 

It is the intention of the parties hereto
to secure the broadest and most cost-effective insurance available to cover Owner, Tenant and Manager in the protection, operation
and enhancement of the Facility, which is usually accomplished when both principal parties are insured under the same policies.
Thus Manager or Owner, as applicable, is (1) to be included as an additional

 

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named insured under the general liability
insurance covering inherent and operational hazards associated with the management of the Facility, and (2) to receive a waiver
of all direct damage insurers' rights of subrogation against Manager or Owner, as applicable, under all direct damage insurance
policies covering the Facility. Manager's insurance is intended to cover Manager for claims against Manager not covered under
Owner's or Tenant’s policies, and in respect to such claims, to include Owner and Tenant as an additional insured and waive
Manager's insurer's rights of subrogation against Owner and Tenant.

 

Article
XV.

TERMINATION OF AGREEMENT; REMEDIES

 

15.1.      General
Termination. This Agreement shall terminate at the end of the Term. Manager may sooner terminate this Agreement if Licensee
or Tenant causes a default under any material provision of this Agreement to occur and fails to cure such default within ten (10)
business days after written notice in the case of a monetary default, or within thirty (30) days after written notice in the event
of a non-monetary default. Licensee may terminate this Agreement if Manager causes a default under any material provision of this
Agreement to occur and fails to cure such default within ten (10) business days after written notice in the case of a monetary
default or within thirty (30) business days after written notice in the case of a non-monetary default. This Agreement may also
be sooner terminated by Licensee if Manager causes the licenses for operation of the Facility at any time to be terminated or
revoked resulting in cessation of operations at the Facility.

 

(i)          If
this Agreement is terminated by Licensee as the result of an uncured Event of Default by Manager or the cessation of operations
at the Facility pursuant to the preceding sentence, then no Termination Fee or Early Termination Fee shall apply and Manager shall
be compensated for its Management Services only through the date of termination by payment of the monthly Operations Fee through
the date of termination.

 

(ii)         If
this Agreement is terminated by Manager as the result of an Event of Default by Licensee or Tenant, then Manager shall be entitled
to receive (i) if such termination occurs during the Initial Term, an Early Termination Fee in accordance with Section 13.04 below,
or (i) if such termination occurs during a Renewal Term, a Termination Fee in accordance with Section 13.02 below. In addition
upon the termination of this Agreement by Manager as the result of an Event of Default by Licensee or Tenant, the provisions of
Section 13.07 below shall not apply, and Owner, Tenant, and Licensee shall cease and desist all use of Manager's policies,
procedures, proprietary software and all use of any derivation of the name "Allegro" upon the date of such termination
of this Agreement.

 

15.2.      Elective
Termination. During any Renewal Term, this Agreement is further subject to termination for any reason and without cause
at the election of Tenant upon at least ninety (90) days prior written notice to Manager. In the event of any termination of this
Agreement pursuant to this Section 13.02 (an “Elective Termination”) by Tenant, Tenant shall pay Manager a
termination fee equal to three (3) times the average monthly Operating Fee earned by Manager during the six (6) months prior to
the termination of the Agreement (the “Termination Fee”). [NOTE THAT FOR ALLEGRO ST. PETERSBURG AND ALLEGRO
ELIZABETHTOWN, TERMINATION UNDER THIS SECTION 13.02 WILL BE AVAILABLE AFTER THE FIRST 12 MONTHS OF THE AGREEMENT.]

 

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15.3.      Termination
on Sale of Facility. During any Renewal Term, Tenant shall provide Manager at least thirty (30) days prior written notice
of any proposed closing of the sale by Owner of the Facility to a third party who is not an Affiliate of Owner and shall give
prompt written notice of any postponement of such closing. Tenant shall have the right, exercisable by written notice to Manager
within thirty (30) days prior to any such closing, to terminate this Agreement on the closing of the sale by Owner of the Facility
upon payment to Manager of a Termination Fee in accordance with Section 13.02 above. In addition upon the termination of this
Agreement as the result of a sale of the Facility, the provisions of Section 13.07 below shall not apply, and Owner, Tenant,
and Licensee shall cease and desist all use of Manager's policies, procedures, proprietary software and all use of any derivation
of the name "Allegro" upon the date of such termination of this Agreement.

 

15.4.      Termination
During Initial Term. Termination of this Agreement by Tenant or Licensee during the Initial Term hereof for any reason other than
Manager's material default under this Agreement shall require payment of an early termination fee determined as follows:

 

		(a)	The
                                         greater of (x) Three (3) or (y) the number of months remaining in the unexpired Initial
                                         Term of this Agreement [[NOTE THAT FOR ALLEGRO ST. PETERSBURG AND ALLEGRO ELIZABETHTOWN,
                                         TERMINATION UNDER THIS SECTION 13.04 AFTER THE FIRST 12 MONTHS OF THE AGREEMENT SHALL
                                         BE LIMITED TO (x) above], multiplied by

 

		(b)	the average monthly Operating Fee
                                         earned by Manager during the six (6) months prior to the proposed date of termination
                                         of the Agreement.

 

(the "Early
Termination Fee").

 

15.5.      Performance
Termination. If at any time Net Operating Income for any trailing twelve-month period falling within the term of this Agreement
is less than the ninety (90%) of the Net Operating Income budgeted for such period in the applicable Approved Operating Budget
(without taking into account any reduction in Net Operating Income solely attributable to a Force Majeure Event), Tenant shall
have the right to immediately terminate this Agreement without any Termination Fee or payment of any fee that accrues after the
date of such termination, provided that written notice of such termination is given to Manager by Tenant within (120) days from
the end of the calendar month in which any such shortfall was calculated.

 

15.6.      Termination
on Change in Control of Manager. In the event that there is a change in the parties who Control the Manager, then Tenant
shall have the right, exercisable within thirty (30) days following the applicable event, with such termination to be effective
thirty (30) days following Tenant’s delivery of its notice of termination, to terminate this Agreement without any Termination
Fee, Early Termination Fee, or payment of any fee that accrues after the date of such termination.

 

15.7.      Transition
upon Termination. Upon termination of this Agreement for any reason, Manager agrees to cooperate in a commercially reasonable
manner, at Licensee’s expense, in transferring Manager’s rights and obligations with respect to the Facility to Licensee
or a successor manager. Such cooperation shall include but not be limited to (i) transfer of Facility-specific service contracts
in Manager’s name, including without limitation, lease agreements to vehicles leased (which shall be assumed by Tenant or
its designee) (if any), (ii) transfer of title to vehicles owned by Manager on behalf of Facility, if any, to Tenant or its designee,
and (iii)

 

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transfer of computer data
in non-proprietary machine readable format and the transfer of any documents housed in Manager’s corporate headquarters
relating to the Facility (or copies of such documents if Manager is required by law to maintain the originals), in each case without
any additional fee or payment to Manager. The fees and expenses to prepare and file the title transfers and those fees and taxes
payable to governmental authorities in connection with the transfer of the motor vehicles to Tenant in accordance with subparagraph
(ii) above shall be paid by Tenant. Except as expressly set forth in this Article XIII to the contrary, Licensee shall have the
right to use Manager’s proprietary software and operational procedures, together with any derivation of the “Allegro”
name used as the Facility’s name or to otherwise market the Facility at the time of termination, for a transitional period
of ninety (90) days after termination of this Agreement. This Section 13.07 shall survive the termination of this Agreement.

 

Article
XVI.

LEGAL ACTIONS, GOVERNING LAW,

LIABILITY OF MANAGER AND INDEMNITY

 

16.1.      Legal
Actions. Legal counsel for Manager, Licensee, and Tenant shall cooperate in the defense or prosecution of any action affecting
the Facility. Manager shall not institute any legal action affecting the Facility, other than routine collection matters in the
ordinary course of operations and in accordance with established collection and credit policies and procedures, without the written
consent of Licensee, which consent shall not be unreasonably withheld, conditioned or delayed. Manager shall promptly forward
all legal notices to Licensee, Tenant and Owner that relate to the Facility.

 

16.2.      Legal
Fees and Costs. In the event either party elects to incur legal expenses to enforce or interpret any provision of this
Agreement against the other party to this Agreement, the prevailing party shall be entitled to recover such legal expenses, including,
without limitation, reasonable attorney’s fees, costs and necessary disbursements, in addition to any other relief to which
such party shall be entitled.

 

16.3.      Choice
of Law. The parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State,
without regard to concepts of choice of laws.

 

16.4.      Liability
of Manager.

 

(i)          Standard
of Care. Manager agrees to exercise, with respect to all services provided by Manager under or pursuant to this Agreement, a high
and qualified standard of care, skill, and diligence such as is at least comparable to that at other facilities having the same
Permitted Use owned or managed by the Manager or its Affiliates and as is reasonably necessary for the maintenance of any license
or permit required for the Facility to be operated for its Permitted Uses in accordance with all applicable Legal Requirements.
Manager agrees to make a diligent and commercially reasonable effort to maximize the occupancy of the Facility.

 

(ii)         Other
Persons. Neither party shall be responsible for the acts or omissions of the other party’s contractors, subcontractors or
employees, or of any persons representing the other party and performing any services for or in connection with the Facility,
or any consultants or other persons engaged by the other party with respect thereto, except and only to the extent a party is
supervising, or legally should be supervising the same, and a party shall be responsible only for the performance of such party’s
obligations hereunder in accordance with the terms hereof.

 

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(iii)        Non-Recourse.
In the event that Manager makes any claim against the Facility, Licensee and/or Tenant, Manager’s recourse shall be limited
to the provisions of this Agreement and to the Licensee’s and Tenant’s right, title and interest in and to the Facility
and in Total Facility Revenues. Manager shall have no recourse to Affiliates, shareholders, directors, officers, employees, or
members of the Licensee and/or Tenant. In the event that the Licensee and/or Tenant makes any claim against the Manager, Licensee
and/or Tenant shall have no recourse to Affiliates, directors, officers, employees, members or managers of the Manager.

 

16.5.      Indemnity.
Manager will defend, indemnify and hold Licensee, Tenant and Owner (and any Affiliate, their respective directors, officers, shareholders,
members, employees and agents) harmless from and against any claims, losses, expenses, costs, suits, actions, proceedings, demands
or liabilities that are asserted against, or sustained or incurred by them as a direct result of Manager’s material breach
of this Agreement or as a result of legal actions or regulatory violations arising from the gross negligence, fraud, or willful
misconduct of Manager, its Home Office Employees and/or officers (including without limitation any grossly negligent or wrongful
intentional failure of Manager to adequately supervise Facility-level employees or enforce applicable policies and procedures
with respect to Facility-level employees), or because of any loss, cost, liability and damage (including, without limitation,
engineers’ and reasonable attorneys’ fees and expenses, and the cost of litigation) arising from the placing of Hazardous
Substances, in violation of any Legal Requirements, including those governing the Environment, on or in the Facility by Manager's
Home Office Employees and/or officers during the Term. If and, to the extent any claim is not covered by insurance carried under
this Agreement, Manager will defend, at its expense, any actions brought directly against the Manager as a result of its gross
negligence, fraud or willful misconduct, in managing and/or operating the Facility, or arising from the placing of Hazardous Substances,
in violation of any Legal Requirements, on or in the Facility by Manager's Home Office Employees and/or officers. Tenant will
defend, indemnify, and hold Manager harmless, from and against any and all claims, expenses, losses, costs, suits, actions, proceedings,
demands, or liabilities (including, without limitation, engineers’ and reasonable attorneys’ fees and expenses, and
the cost of litigation) that are asserted against, or sustained or incurred by Manager in the proper performance of Manager’s
duties under this Agreement or otherwise while acting properly within the scope of the agency established by the parties to this
Agreement, or arising under or in connection with Tenant’s breach of this Agreement, or the gross negligence or willful
misconduct of Tenant, its employees, contractors, managers, representatives or agents, or Tenant’s written instructions
to Manager given pursuant to the authority retained by Licensee in the last sentence of Section 2.01 above. The scope of the foregoing
indemnities includes any and all costs and expenses properly incurred in connection with any proceedings to defend any indemnified
claim, or to enforce the indemnity, or both. Recovery upon an indemnity contained in this Agreement shall be reduced dollar-for-dollar
by any applicable insurance collected by the indemnified party with respect to the claims covered by such indemnity. For clarity,
it being intended in this Section 14.05 that Manager be indemnified by Tenant for the negligent or wrongful intentional actions
and omissions of Manager's Facility-level employees which do not arise as a direct result of Manager’s material breach of
this Agreement or as a result of legal actions or regulatory violations arising from the gross negligence, fraud, or willful misconduct
of Manager, its Home Office Employees and/or officers, including without limitation any grossly negligent or wrongful intentional
failure of Manager to adequately supervise Facility-level employees or enforce applicable policies and procedures with respect
to Facility-level employees.

 

    	32

    	 

    

 

16.6.      Notice
of Claim or Suit. Manager shall promptly notify Owner, Licensee and Tenant of any claim, action, proceeding or suit instituted
or threatened against Owner, Licensee or Tenant and relating to the Facility or this Agreement, of which Manager receives notice
or of which Manager acquires knowledge. Licensee shall promptly notify Owner and Manager of any claim, action, proceeding or suit
instituted or threatened against Manager, or against Owner or Tenant and relating to the Facility or this Agreement, of which
Licensee receives notice or of which Tenant acquires knowledge. In the event either Tenant, Licensee, Owner or Manager is made
a party to any action for damages or other relief against which such party has been indemnified, as provided in Section 14.05
above, the indemnifying party shall at its own expense using counsel reasonably approved by the indemnified party, diligently
defend the indemnified party, pay all costs in such litigation or, at the option and expense of the indemnified party, the indemnified
party at its expense may nonetheless engage its own counsel in connection with its own defense or settlement of said litigation
in which event the indemnifying party shall cooperate with indemnified party and make available to the indemnified party all information
and data in the indemnifying party’s custody or under its control which the indemnified party reasonably deems necessary
or desirable for such defense. In the event the indemnified party is required to secure its own counsel due to a conflict in the
interests of the indemnifying party and the indemnified party in any action for damages or other relief against which the indemnifying
party has indemnified the indemnified party, the indemnifying party shall pay all of the indemnified party’s reasonable
attorney’s fees and costs thereafter incurred in such litigation. The indemnifying party is required to and shall approve
a settlement agreement for any such claim or suit as requested by the indemnified party and which is consistent with applicable
insurance company requirements and within insured limits and any deductible, unless the indemnifying party posts a bond or other
security acceptable to the indemnified party for any potentially uninsured liability amounts.

 

16.7.      Survival
of Indemnity Terms. This Article XIV shall survive the termination of this Agreement.

 

Article
XVII.

Regulatory and Contractual Requirements

 

17.1.      Regulatory
and Contractual Requirements. Subject to the availability of funds from Tenant or from Total Facility Revenues and in accordance
with the Approved Operating Budget, Manager shall cause all things to be done in and about the Facility reasonably necessary to
comply with the requirements of any Legal Requirements (subject to the limitations in the next paragraph) or board of fire underwriters
respecting the use of the Facility or the construction, maintenance, or operation thereof. Manager shall maintain all Federal,
State and local government permits and licenses needed for its management and operation of the Facility for its Permitted Use
in the State.

 

The parties understand
and agree that certain deficiencies or situations of noncompliance with various Legal Requirements (such as building codes, OSHA,
ADA and the like) are likely to occur from time to time in the normal course of business operations. Such occurrences will not
constitute a breach or Event of Default of Manager hereunder, provided that, (i) they are not materially beyond the general experience
of similar facility operations located in the State in terms of scope, seriousness, or frequency, and (ii) Manager takes all reasonable
actions in a timely manner after acquiring knowledge or receiving notice of such to cure such deficiencies or situations of non-compliance.
The costs (including any fines for non-compliance) of curing such deficiencies or circumstances of non-compliance shall

 

    	33

    	 

    

 

constitute Facility Expenses
unless incurred by reason of Manager’s willful failure, gross negligence or Event of Default hereunder.

 

17.2.      Equal
Employment and Equal Housing Opportunity. Without limitation of any provision set forth herein, Manager expressly agrees
to abide by any and all Applicable Laws, including, without limitation, (i) all applicable Federal and/or State equal employment
opportunity statutes, rules and regulations, including, without limitation, Title II of the Civil Rights Act of 1964, the Equal
Pay Act of 1963, the National Labor Relations Act, the Fair Labor Standard Act, the Rehabilitation Act of 1983, and the Occupational
Safety and Health Act of 1970, all as may be from time to time modified or amended, and (ii) all applicable Federal and/or State
equal housing opportunity statutes, rules and regulations, all as may be from time to time modified or amended.

 

17.3.      Hazardous
Substances. Manager shall not place, or authorize or instruct any of the Manager’s employees, representatives, or
agents, to place any Hazardous Substances on or in the Facility in violation of any Legal Requirements, including any Legal Requirements
governing the Environment. Manager shall remove, at Manager’s expense (and not as a Facility Expense or subject to reimbursement
by Owner or Tenant) any Hazardous Substances placed on or in the Facility in violation of this Section 15.03.

 

Article
XVIII.

INTELLECTUAL PROPERTY

 

18.1.      Name
of Facility. During the Term of this Agreement, the Facility shall be known as “[NAME OF FACILITY],”
with such additional identification as may be necessary and agreed to by Tenant and Manager to provide local identification.

 

18.2.      Intellectual
Property. All Intellectual Property shall at all times be proprietary to Manager or its Affiliates, and shall be the exclusive
property of Manager or its Affiliates. During the Term of this Agreement, Manager shall be entitled to take all reasonable steps
to ensure that any Intellectual Property of a confidential nature remains confidential. Upon termination, except as otherwise
provided in Section 13.07 above, all Intellectual Property shall be removed from the Facility by Manager, without compensation
to Tenant. Manager shall arrange for license agreements between any Affiliate of Manager owning any of the Intellectual Property
used by Manager in the operation of the Facility and Licensee, which license agreement shall be in strict accordance with the
terms of this Agreement.

 

Article
XIX.

DAMAGE AND CONDEMNATION

 

19.1.      Damage
and Repair

 

(i)          If,
during the Term, the Facility suffers a Total Casualty, this Agreement shall terminate effective as of the date of such Total
Casualty.

 

(ii)         If,
during the Term, the Facility is damaged by fire, casualty or other cause, but not to the extent of a Total Casualty, Manager
shall have the right to discontinue operating the Facility or any

 

    	34

    	 

    

 

portion thereof to the
extent it reasonably deems necessary to comply with applicable Legal Requirements or for the damaged portion of the Facility to
be safely repaired and/or replaced by Tenant or Owner.

 

(iii)        Termination
of this Agreement pursuant to this Section 17.01 shall not require payment by Tenant/Licensee of any Termination Fee or Early
Termination Fee.

 

19.2.      Condemnation

 

(i)          In
the event all or substantially all of the Facility shall be taken in any eminent domain, condemnation, compulsory acquisition,
or similar proceeding by any competent authority for any public or quasi-public use or purpose, or in the event a portion of the
Facility shall be so taken, but the result is that it is unreasonable to continue to operate the Facility for its Permitted Use
pursuant to this Agreement, in accordance with the standards required by this Agreement, in the mutual reasonable judgment of
Owner, Tenant and Manager, this Agreement shall terminate effective as of the date of such taking or similar proceeding.

 

(ii)         In
the event a portion of the Facility shall be taken by the events described in Section 17.02(a), or the entire Facility is affected
but on a temporary basis, and the result is not to make it unreasonable to continue to operate the Facility for its Permitted
Use pursuant to this Agreement, in the mutual reasonable judgment of Owner, Tenant and Manager, this Agreement shall not terminate.
Manager shall have the right to discontinue operating the Facility or any portion thereof to the extent it reasonable deems necessary
to comply with applicable Legal Requirements or for the remaining portion thereof to be safely restored by Tenant or Owner.

 

(iii)        In
the event of any proceeding described in Section 17.02(a) or (b), Manager shall have no claim to any portion of the award and
no claim for damages arising out of any taking, except for any claim Manager may have for the taking of Manager's personal property
located in or about the Facility.

 

(iv)        Termination
of this Agreement pursuant to this Section 17.02 shall not require payment by Tenant/Licensee of any Termination Fee or Early
Termination Fee.

 

Article
XX.

MISCELLANEOUS PROVISIONS

 

20.1.      Additional
Assurances. The provisions of this Agreement shall be self-operative and shall not require further agreement by the parties
except as may be herein specifically provided to the contrary; provided, however, at the request of either party,
the party requested shall execute such additional instruments and take such additional acts as the requesting party may reasonably
deem necessary to effectuate this Agreement.

 

20.2.      Consents,
Approval and Discretion. Except as expressly provided herein to the contrary, whenever this Agreement requires any consent
or approval to be given by either party or either party must or may exercise discretion, the parties agree that such consent or
approval shall not be unreasonably withheld or delayed and such discretion shall be reasonably exercised, in good faith.

 

20.3.      No
Brokerage. Each party represents to the other that it has not engaged a broker in connection with this transaction, and
agrees to defend, indemnify, and hold the other party harmless from any claim made by a broker through the indemnifying party.

 

    	35

    	 

    

 

20.4.      Notices.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the party to whom notice is to be given, (ii) on the day
of transmission if sent via facsimile transmission to the facsimile number given below, and electronic confirmation of receipt
is obtained promptly after completion of transmission, or if sent via electronic mail (e.g. email) with receipted delivery,
(iii) on the day after delivery to FedEx or similar overnight courier, or (iv) on the tenth (10th) day after mailing,
if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, return receipt requested,
postage prepaid and properly addressed, to the party as follows:

 

	 

        OWNER:

         
	c/o
                                         American Realty Capital Healthcare Trust II Operating Partnership, L.P.

        Attn: Judi Stillman

        200 Dryden Road

        Suite 1100

        Dresher, PA 19025

         
	copy
                                         to:

         

        American Realty Capital Healthcare
        Trust II, Inc.

        Attn: Jesse Galloway

        405 Park Ave, 14th Floor

        New York, NY

        Telephone: (212) 415-6542

        Facsimile: (212)
        421-5799
	And
                                         to:

         

        Foley & Lardner LLP

        111 North Orange Avenue

        Suite 1800

        Orlando, FL 32801-2386

        Attn: Taylor Pancake, Esq.

        Telephone: (407) 423-7656

        Facsimile: (407) 648-1743

         

	TENANT:

         
	c/o
                                         American Realty Capital

        Healthcare Trust II

        Operating Partnership, L.P.

        Attn: Judi Stillman

        200 Dryden Road

        Suite 1100

        Dresher, PA 19025

         
	copy
                                         to:

         

        American Realty Capital Healthcare
        Trust II, Inc.

        Attn: Jesse Galloway

        405 Park Ave, 14th Floor

        New York, NY

        Telephone: (212) 415-6542

        Facsimile: (212)
        421-5799
	And
                                         to:

         

        Foley & Lardner LLP

        111 North Orange Avenue

        Suite 1800

        Orlando, FL 32801-2386

        Attn: Taylor Pancake, Esq.

        Telephone: (407) 423-7656

        Facsimile: (407) 648-1743

         

 

    	36

    	 

    

 

	MANAGER:

         
	Allegro
                                         Management Company

        212 South Central Avenue

        Suite 301

        Attention: President

        St. Louis, MO 63105

        Telephone: 314.512.8704

        Facsimile: 314.512 _____

        mrieser@allegroliving.com
	copy
                                         to:

         

        Allegro Senior Living, LLC

        212 South Central Avenue

        Suite 301

        Attention: Robert B. Karn, CFO

        St. Louis, MO 63105

        Telephone: 314.512.8788

        Facsimile: 314.512 _____

        rkarn@allegroliving.com

         
	And
                                         to:

         

        Theresa Marie Kenney, Esq., B.C.S.

        Duss, Kenney, Safer, Hampton &
        Joos, P.A.

        4348 Southpoint Boulevard, Suite 101

        Jacksonville, Florida 32216

        Telephone: 904.543.4300

        Facsimile: 904.543.4301

        Email: tkenney@jaxfirm.com

 

or to such other address and to the attention
of such other person as either party may from time to time designate in writing. Notice given by a party's attorney in accordance
with this Section 18.04 shall (a) constitute notice from said party, and (b) not be considered an improper direct contact from
the sending attorney to a "person known to be represented by counsel".

 

20.5.      Severability.
If any term or provision of this Agreement or the application thereof to any person or circumstance is held to be invalid or unenforceable
for any reason, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.

 

20.6.      Gender
and Number. Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine,
feminine, and neuter, and the number of all words herein shall include the singular and plural.

 

20.7.      Division
and Heading. The divisions of this Agreement into sections and subsections and the use of captions and headings in connection
therewith are solely for convenience and shall have no legal effect whatsoever in construing the provisions of this Agreement.

 

20.8.      Confidentiality
of Information. Manager, Subtenant and Tenant agree to keep confidential and not to use or to disclose to others, except
as expressly consented to in writing by the other party or required by law, the terms of this Agreement, or any and all of their
respective secrets or confidential technology, proprietary information, customer lists, or trade secrets, or any other confidential
matter or confidential items ascertained through their association with each other. Manager, Subtenant and Tenant further agree
that should Manager cease to be the manager of the Facility, Manager and Subtenant will return to Tenant any Facility information
of any kind pertaining to the Facility or to Residents of the Facility, and Tenant will return to Manager any and all of Manager’s
confidential information obtained by Tenant. All funds related to and accounts opened on behalf of the Facility also will be returned
to Tenant.

 

    	37

    	 

    

 

20.9.      Right
to Perform. In the event that Licensee or Manager shall fail to perform any duty or fulfill any obligation hereunder to
the material detriment of the other and after the passage of any applicable cure periods set forth in this Agreement, Licensee
or Manager, in addition to any rights or remedies available to it under law, shall have the right, but not the obligation to perform
any such duty or fulfill any such obligation, but in no way obligating the party beyond any termination period allowable hereunder.

 

20.10.    Assignment.

 

(i)          Manager
shall not have any right to assign this Agreement without the prior written consent of Tenant and Owner, which may be granted
or withheld in Tenant and Owner’s sole discretion.

 

(ii)         When
Tenant notifies the Manager and the Subtenant in writing that the licenses to operate the Facility for its Permitted Use have
been issued by the State to the Tenant, then on the date such notice is received by the Manager all of the Subtenant’s rights
and obligations under this Agreement shall be automatically assigned by Subtenant to Tenant, Tenant shall assume all obligations
of the Licensee thereafter arising hereunder and Subtenant (i) shall have no liability for any such obligations, and (ii) shall
be deemed to no longer be a party to this Agreement.

 

(iii)        Licensee
and Manager shall at Owner’s written request assign this Agreement as security, and shall agree to subordinate their respective
rights herein, to the holder of any mortgage granted by Owner on the Facility. Such assignment and/or subordination shall be in
a commercially reasonable form approved by Owner and the holder of such mortgage.

 

20.11.    Limitation
of Liability. To the maximum extent permitted by applicable law, no shareholder, member, manager, officer, director, employee,
agent or Affiliate of any party to this Agreement shall have any personal liability with respect to the liabilities or obligations
of such party under this Agreement or any document executed by such party pursuant to this Agreement. This Section shall survive
the termination of this Agreement.

 

20.12.    Right
to Inspect. Owner, Licensee and the holder of any mortgage on the Facility and their agents shall have the right to enter
upon the Facility or any portion thereof at any reasonable time to inspect the same, including but not limited to, the operation,
sanitation, safety, maintenance and use of the same, and to assure itself that Manager is in full compliance with its obligations
under this Agreement (but Owner, Licensee and the holder of any such mortgage shall not thereby assume any responsibility for
the performance of any of Manager’s obligations hereunder, nor any liability arising from the improper performance thereof).
In making any such inspections, neither Owner nor Licensee nor the holder of any such mortgage shall unduly interrupt or interfere
with the conduct of Manager’s business. Provided, however, that for routine visits to the Facility, Owner, Licensee and/or
any mortgagee shall endeavor to provide Manager with reasonable advance notice of planned visits.

 

20.13.    Entire
Agreement/Amendment/Waiver. With respect to the subject matter hereof, this Agreement supersedes all previous contracts
and constitutes the entire Agreement between the parties, and no party shall be entitled to benefits other than those specified
herein. As between the parties, no oral statements or prior written material not specifically incorporated herein shall be of
any force and effect. The parties specifically acknowledge that in entering into and executing this Agreement, the parties rely
solely upon the representations and agreements contained in this Agreement and no others. All prior representations or agreements
not expressly incorporated herein, whether written or verbal, are superseded, and no changes in or additions to this Agreement
shall be recognized unless and until made in writing and signed by both parties

 

    	38

    	 

    

 

hereto, and consented
to by the Owner, and no waiver of any of the provisions of this Agreement shall be enforceable unless such waiver is in writing
and signed by the party against whom the waiver is sought to be enforced. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

 

20.14.    Expert
Decisions. Where this Agreement expressly calls for a matter to be referred to an Expert or in other circumstances in which
the parties agree in writing to refer a matter to an Expert, for determination, the following provisions shall apply:

 

(i)          Unless
specifically stated to the contrary, the use of the Expert shall be the exclusive remedy of the parties and neither party shall
attempt to adjudicate any dispute in any other forum.  The decision of the Expert shall be final and binding on the
parties and shall not be capable of challenge, whether by arbitration, in court or otherwise;

 

(ii)         Each
party shall be entitled to make written submissions to the Expert, and if a party makes any submission it shall also provide a
copy to the other party and the other party shall have the right to comment on such submission. The parties shall make available
to the Expert all books and records relating to the issue in dispute and shall render to the Expert any assistance requested of
the parties. The costs of the Expert and the proceedings shall be treated as a Facility Expense;

 

(iii)        Each
party shall bear its own respective attorneys fees and costs in connection with any matter referred to the Expert in accordance
with this Agreement and any submissions by a party to the Expert;

 

(iv)        The
Expert shall make its decision with respect to the matter referred for determination in accordance with industry standards (including
compliance with the requirements of any quality assurance program) and determining whether the matter at issue is necessary to
satisfy such standards; and

 

(v)         The
terms of engagement of the Expert shall include an obligation on the part of the Expert to: (i) notify the parties in writing
of his or her decision within forty-five (45) days from the date on which the Expert has been selected (or such other period
as the parties may agree or as set forth herein); and (ii) establish a timetable for the making of submissions and replies.

 

20.15.    Arbitration.
In the event of any dispute, controversy or claim arising out of or in connection with, or relating to, this Agreement or any
breach or alleged breach hereof (each, a “Dispute”) that is not referred to an Expert, the parties shall in all events
and prior to submitting any Dispute to an arbitrator for resolution hereunder, meet in person and attempt in good faith to resolve
the Dispute. Any Dispute that is not resolved after a meeting of the parties shall, upon the request of any party involved, be
submitted to, and settled by, arbitration in the State, by a single arbitrator pursuant to the commercial arbitration rules then
in effect of the American Arbitration Association (or at any time or at any other place or under any other form of arbitration
mutually acceptable to the parties so involved) and pursuant to the U.S. Federal Arbitration Act; provided, however, that
any party may apply to a court of competent jurisdiction to obtain an injunction or other interim relief, provided such party
simultaneously submits such matter to Arbitration for a final determination on the merits. Any award rendered shall be final and
conclusive upon the parties and a judgment thereon may be entered in the highest court of the forum, state or federal, having
jurisdiction.

 

    	39

    	 

    

 

20.16.    WAIVER
OF JURY TRIAL. WITHOUT LIMITING THE INTENDED EFFECT OF SECTION 18.15 above, THE
PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED UPON THIS AGREEMENT OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

 

[Signature Page Follows.]

 

    	40

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have caused this
Management Agreement to be executed under seal by their duly authorized offices, all as of the day and year first above written.

 

	 	TENANT:
	 	 
	 	ARHC [___________] TRS, LLC, 
	 	a Delaware limited liability company
	 	 
	 	By:_______________________________________ 
	 	Print Name:________________________________
	 	Print Title:  ________________________________
	 	 
	 	SUBTENANT:
	 	 
	 	_________________________________________, a
	 	______________________________
	 	 
	 	By:_______________________________________
	 	Print Name:________________________________
	 	Print Title:  ________________________________
	 	 
	 	MANAGER:
	 	 
	 	LOVE MANAGEMENT COMPANY, LLC, a
    Missouri Limited Liability Company d/b/a ALLEGRO MANAGEMENT COMPANY
	 	 
	 	By:_______________________________________ 
	 	Mary F. Rieser, President

 

JOINDER

 

By its signature below, the undersigned
Owner joins in this Agreement to the extent that this Agreement confers rights on the Owner.

 

	 	OWNER:
	 	 
	 	ARHC [___________], LLC, 
	 	a Delaware limited liability company
	 	 
	 	By:_______________________________________
	 	Print Name:________________________________
	 	Print Title:  ________________________________

 

    	41

    	 

    

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

    	 

    	 

    

 

EXHIBIT “B”

APPROVED OPERATING BUDGET

 

    	 

    	 

    

 

EXHIBIT “C”

INSURANCE REQUIREMENTS

 

	 	Property Coverage
	 	 
	Primarily Responsible Insured:	Tenant
	 	 
	Risks Covered:	Special Form Coverage including Earthquake and Flood
	 	 
	Property, Interest Insured:	Building
	 	Business Personal Property
	 	Business Income & Extra Expense (60%
    of 12 month revenues)
	 	Extended Period of Indemnity – 180 days
	 	Builder’s Risk & Course of Construction
    for new building projects and renovations
	 	Valuable Papers and Records
	 	Ordinance/Law A - Full Limits  Ordinance/Law
    B&C – 10% Bldg Limit
	 	Debris Removal
	 	Equipment Breakdown
	 	Property values should be based on full
    insurable values
	 	 
	Deductibles:	$10,000 per occurrence
	 	 
	Valuation:	 
	Real and Personal Property	Replacement cost waiving co-insurance or Agreed Value
	 	 
	Property of others	Amount of Company liability imposed by law or assumed by contract

 

{continued on next page}

 

    	 

    	 

    

 

 

	 	Liability Coverage
	 	 
	Primarily Responsible Insured:	Manager
	 	 
	Limits of Liability:	 
	Bodily Injury	$1,000,000 per occurrence
	Property Damage	$3,000,000 aggregate
	Deductible Maximum	$25,000
	 	 
	Abuse Liability Included
	Employers Liability Included
	Employee Benefit Liability Included
	Liquor Liability Included
	Professional Liability Included at same limits
	 	 
	Commercial Auto Liability incl. Hired/Non-Owned  	$1,000,000
	 	 
	Employment Practice Liability 	$1,000,000 
	 	 
	Employee Dishonesty 	$1,000,000
	Monies & Securities (inside/outside premise)	$25,000
	 	 
	Excess Liability 	$5,000,000
	 	 
	Environmental Liability 	$1,000,000 per occurrence
	   	 	$3,000,000 aggregate
	 	 	 

    	 

    	 

    

 

EXHIBIT “D”

QUARTERLY CERTIFICATION

 

[Date]

 

TO:

 

Attn:

 

Re:         Quarter
Ending ____________ for the ____________________ Facility.

 

Dear __________________:

 

The undersigned, as
___________________ of [______________________], the manager of the ______________________ Facility, hereby certifies to __________________
that the following statements are true and correct:

 

1) To the knowledge
of the undersigned, the consolidated income statement and balance sheet (the “Reports”) of the Facility delivered
on ___________ fairly present the financial position and results of operations of the Facility at the dates and for the periods
presented in the Reports, with respect to the matters addressed by such Reports, all in accordance with United States GAAP consistently
applied (subject to normal year-end adjustments).

 

2) The undersigned
is not aware of any significant deficiencies or material weaknesses in Manager’s design or operation of internal control
over financial reporting which are reasonably likely to adversely affect Manager’s ability to record, process, summarize
and report financial information with respect to the Facility.

 

3) The undersigned
is not aware of any material fraud that involves management or other employees who have a significant role in Manager’s
internal control over financial reporting.

 

	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 

 

    	 

    	 

    

 

EXHIBIT “E”

ASSUMED EMPLOYEE OBLIGATIONS

 

PTO Balance                                     $[________________]

 

    	 

    	 

    

 

EXHIBIT E-2

 

Transition Period
Sublease

 

[ See attached.
]

 

    	 

    	 

    

 

TRANSITION
PERIOD SUBLEASE

 

THIS
TRANSITION PERIOD SUBLEASE (this “Sublease”) dated [_______] ___, 2014, (the “Effective
Date”), is made by and between ARHC [__________] TRS, LLC, a Delaware limited liability company (herein called
“Sublessor”) and [ALLEGRO OPERATOR] (herein called “Sublessee”).

 

Recitals:

 

R-1.          Sublessee
(together with certain of its affiliates) has on the Effective Date sold its interest in certain real property and improvements
situated in the [State of Florida/Commonwealth of Kentucky] (the “State”), including [a skilled nursing/assisted
living and/or memory care facility] (the “Facility”) as more particularly described on Exhibit A
attached hereto and by this reference incorporated herein (said real property, including the land and all improvements thereon,
is referred to herein as the “Premises”) to ARHC [__________], LLC, a Delaware limited liability company
(“Landlord”).

 

R-2.          Landlord
has leased the Premises to Sublessor, as tenant, under a Lease dated as of the Effective Date (the “Lease”).

 

R-3.          Sublessee
currently holds certain Licenses (as defined in Section 5.4 below) necessary for the operation of the Facility.

 

R-4.          Sublessor
is in the process of obtaining its own licenses, but has not done so by the date of the sale.

 

R-5.          Sublessee
wishes to Sublease the Premises from the Sublessor so that its Licenses can allow the Facility to remain in operation until such
time as Sublessor obtains licenses in its name.

 

R-6.          Simultaneous
with the execution of this Sublease, Sublessee is entering into an agreement for management of the Facility (the “Management
Agreement”) with [LOVE MANAGEMENT COMPANY, LLC, a Missouri limited liability company doing business as “ALLEGRO
MANAGEMENT COMPANY”] (“Manager”).

 

R-7.          In
accordance with the terms of the Management Agreement, upon Sublessor’s written notice to Sublessee of Sublessor’s
receipt of its own licenses, the Management Agreement shall automatically be assigned by Sublessee to Sublessor and Sublessee
shall cease to be a party thereto. Upon such assignment, any agreements with Residents (as defined in the Management Agreement)
entered into by Manager on behalf of Sublessee pursuant to the terms of the Management Agreement shall automatically be assigned
by Sublessee to Sublessor and Sublessee shall cease to be a party thereto. Notwithstanding the foregoing, promptly following the
occurrence of such automatic assignments the parties shall execute and deliver (a) a blanket assignment of both the Resident Agreements
and the Management Agreement, and (b) a termination of this Sublease.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt of sufficiency of which are mutually agreed, and the premises
and the mutual covenants herein contained, the parties hereto agree as follows:

 

    	 

    	 

    

 

ARTICLE 11Premises.
Sublessor hereby subleases the Premises to Sublessee and Sublessee subleases the Premises from Sublessor for the Term (hereinafter
defined) and pursuant to all of the conditions set forth herein.

 

ARTICLE 12Term.

 

Section
12.1         Term. The term of this Sublease (“Term”)
shall commence on the Effective Date and shall expire (the “Expiration Date”) on the earliest to occur of

 

(a)          the
date on which Sublessee and Sublessor by mutual written agreement elect to terminate this Sublease;

 

(b)          the
date on which Sublessor notifies Sublessee in writing that the State has issued to the Sublessor the Sublessor’s own licenses;

 

(c)          the
date upon which the Management Agreement is terminated in accordance with its terms;

 

(d)          the
date on which this Sublease is terminated pursuant to any provision hereof; or

 

(e)          one
(1) year following the Effective Date.

 

Sublessor and Sublessee
shall each give the other prompt written notice upon receipt of notice from the State that it has issued or otherwise confirmed
the approval for the issuance of the Licenses to Sublessor. Further, any and all costs of maintaining the Licenses shall be paid
by the Manager as a Facility Expense under the Management Agreement.

 

Section
12.2         Surrender. On the Expiration Date, or on any sooner termination
of the Term, Sublessee shall surrender the Premises to Sublessor or to Sublessor’s designee in its then-current condition,
except to the extent otherwise provided in Sections 7 or 13 below.

 

ARTICLE 13Rent.
Notwithstanding the independent sufficiency and receipt by the parties of the consideration recited above, Sublessee shall be
obligated to pay to Sublessor, as fixed rent, the sum of Ten Dollars ($10) per year (the “Rent”), payable on
the Effective Date, receipt of which is hereby acknowledged by Sublessee.

 

ARTICLE 14Use.

 

Section
14.1         Use. The Premises shall be used and occupied in accordance
with the terms of the Management Agreement.

 

Section
14.2         Condition of Premises. Sublessee hereby accepts the Premises
in its condition existing as of the Effective Date, subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Premises, and any encumbrances, covenants or restrictions of record, and
accepts this Sublease subject thereto and to all matters disclosed thereby. Sublessee acknowledges that neither Sublessor nor
Sublessor’s agent has made any representation or warranty as to the present or future suitability of the Premises for the
conduct of Sublessee’s business. Sublessor

 

    	 

    	 

    

 

acknowledges
that Sublessee shall have no obligation to maintain, repair or restore the condition of the Premises at any time during the term
of the Sublease, and that upon termination of the Sublease, Sublessee shall surrender the Premises to Sublessor in “as is”
condition, without further obligation or liability with respect to the Premises, unless such damage was caused by Sublessee’s
gross negligence or intentional misconduct.

 

ARTICLE 15Operation
of Facility.

 

Section
15.1         Operation of Facility. The Sublessee agrees that it shall
permit the Manager to operate the Facility and keep the Premises in good order, condition and repair, in accordance with Manager’s
obligations under the terms of the Management Agreement. Sublessor agrees that except as provided in the last sentence of this
Section 5.1, Sublessee shall have no obligation or liability with respect to Manager’s performance or nonperformance of
such obligations, but at Sublessor’s written request, Sublessee will direct Manager to perform such obligations. Notwithstanding
any provision of this Sublease to the contrary, Sublessee shall, to the extent required by applicable law, retain ultimate authority
and responsibility for the operation of the Facility.

 

Section
15.2         Financial Obligations. From the effective date of the Management
Agreement, until such time as Sublessee ceases to be a party thereto as provided in Recital R-7 above, all financial obligations
imposed on the Sublessee pursuant to the Management Agreement that are not paid by the Manager as a Facility Expense shall be
paid by Sublessor to Sublessee from Sublessor’s own funds. Notwithstanding the foregoing, to enforce such imposition of
financial obligations on the Sublessor, Sublessee shall give Sublessor written notice of such financial obligation(s) providing,
in reasonable detail, the nature and estimated cost thereof. Sublessor shall, within ten (10) business days after receipt of such
notice disburse such required funds to Sublessee, or if Sublessor disputes its obligation to disburse such funds, it shall give
Sublessee notice of such dispute within such ten (10) business-day period. To the extent reasonably possible, Sublessor shall
identify disputed items on a line item basis. Sublessee shall have no obligation to disburse its own funds during the period of
such dispute regardless of the consequences.

 

Section
15.3         Deposit and Disbursement of Funds. Sublessee shall remit
to Sublessor all monies received by Sublessee in connection with the operation of the Facility within five (5) days receipt thereof.
This Section 5.3 shall survive the termination of this Sublease.

 

Section
15.4         Licenses and Approvals. Sublessee shall use its commercially
reasonable efforts to maintain in effect at all times during the term hereof all certificates of need, accreditations, registrations,
facility or other operating licenses and other consents of regulatory authorities necessary for the operation of the Facility,
including the licenses listed on Exhibit B attached hereto, (collectively, the “Licenses”) which
are necessary and appropriate to operate the Facility as presently operated as of the date of this Sublease. Sublessee shall use
commercially reasonable efforts to refrain from any and all conduct which has the effect of jeopardizing any License of the Facility,
provided that Sublessee shall have absolutely no obligation to utilize its own funds in the course thereof. All costs and expenses
incurred by Sublessee necessary in maintaining the Licenses or to comply with any rules, regulations, requirements or laws associated

 

    	 

    	 

    

 

therewith shall
be paid to Sublessee by the Manager as a Facility Expense within ten (10) business days of Sublessor’s receipt of a written
request with documentation for the same, and if not so paid within such ten (10) business day period, shall thereafter accrue
interest at ten percent (10%) per annum. Sublessor shall diligently and in good faith pursue the prompt issuance of Licenses in
Sublessor’s own name, with the understanding that it is the mutual desire of Sublessor and Sublessee for Sublessor to procure
such Licenses as promptly as is commercially practicable.

 

Section
15.5         Limitations on Authority of Sublessee. Except as expressly
provided herein or as otherwise required by applicable law or the requirements of any of the Licenses, Sublessee shall have no
right, authority or obligation to take any action with respect to the Premises without the prior written consent of Sublessor.
To the extent action or payment is required by Sublessee as Licensee under the Management Agreement, Sublessee (vis a vis Sublessor)
shall be excused from the same in the event and to the extent Sublessor does not both authorize the same and provide any required
funds therefor.

 

Section
15.6         Records. Sublessee, through the Manager, shall retain all
financial and other records of the Facility during the Term of this Sublease, in accordance with applicable rules and regulations
promulgated by Federal and State governmental authorities and relevant accreditation agencies and organizations governing the
Facility, and otherwise in accordance with industry practice. All costs associated with same shall be paid by Manager as a Facility
Expense, and at Sublessor’s written request, Sublessee shall direct the Manager to pay such costs.

 

    	 

    	 

    

 

ARTICLE 16Insurance.
The Manager shall be responsible for maintaining insurance in accordance with the terms of the Management Agreement. On or before
the commencement of the Term, Sublessee shall be named (and certificates of insurance shall be furnished to Sublessee confirming
that Sublessee has been named) as an additional insured on all professional and commercial general liability insurance policies
required by the Management Agreement with respect to the Premises. Such commercial general liability insurance shall be primary
to any and all separate insurance policies maintained by Manager related to the Facility.

 

ARTICLE 17Damage,
Destruction. If the Premises are damaged or destroyed during the Term of this Sublease and as a result the Management Agreement
is terminated pursuant to the terms of the Management Agreement, this Sublease shall terminate on the date the Management Agreement
is terminated as a result thereof. Provided that such damage or destruction is not the result of damage caused by Sublessee’s
gross negligence or intentional misconduct, Sublessee shall have no obligation to repair or restore the Premises and or replace
any personal property, furniture, fixtures or equipment as a result of any damage to or destruction of the Premises.

 

ARTICLE 18Real
Property Taxes. Manager shall be responsible for the payment as a Facility Expense of all real property and any other taxes
on or with respect to the Facility, pursuant to the terms of the Management Agreement, and at Sublessor’s written request,
Sublessee shall direct the Manager to pay such taxes.

 

ARTICLE 19Utilities.
Manager shall be responsible for the payment as a Facility Expense all water, gas, heat, light, power, telephone and other utilities
and services supplied to the Premises pursuant to the terms of the Management Agreement, and at Sublessor’s written request,
Sublessee shall direct the Manager to pay for such utilities and services.

 

ARTICLE 20Assignment
and Subletting.

 

Section
20.1         Assignment and Subletting. Sublessee shall not voluntarily
or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Sublessee’s
interest in this Sublease or in the Premises, without Sublessor’s prior written consent, which consent may be withheld in
Sublessor’s sole and absolute discretion.

 

Section
20.2         No Waiver. The acceptance of rent by Sublessor from any other
person shall not be deemed to be a waiver by Sublessor of any provision hereof. Consent to one assignment or subletting shall
not be deemed consent to any subsequent assignment or subletting.

 

ARTICLE 21Defaults;
Remedies.

 

Section
21.1         Default by Sublessee. The occurrence of any one or more of
the following events shall constitute a material default and breach of this Sublease by Sublessee:

 

(a)          The
failure by Sublessee to observe or perform any of the covenants, conditions or provisions of this Sublease to be observed or performed
by Sublessee where such failure shall continue for a period of thirty (30) days after written notice thereof from Sublessor to

 

    	 

    	 

    

 

Sublessee or such longer
period as shall reasonably be required to cure the same with the exercise of due diligence.

 

(b)          (i)
The making by Sublessee of any general arrangement or assignment for the benefit of creditors; (ii) Sublessee becomes a “debtor”
as defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case of a petition filed against Sublessee, the same
is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of
Sublessee’s assets located at the Premises or of Sublessee’s interest in this Sublease, where possession is not restored
to Sublessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Sublessee’s
assets located at the Premises or of Sublessee’s interest in this Sublease, where such seizure is not discharged within
30 days. Provided, however, in the event that any provision of this paragraph 11.1(c) is contrary to any applicable law, such
provision shall be of no force or effect.

 

Section
21.2         Remedies of Sublessor. In the event of any such material
default or breach by Sublessee, Sublessor may at any time thereafter, with reasonable prior written notice of not less than thirty
(30) days except for a default under Section 11.1(b) above, as Sublessor’s sole right and remedy by reason of such default
or breach, terminate Sublessee’s right to possession of the Premises by any lawful means, in which case this Sublease shall
terminate and Sublessee shall immediately surrender possession of the Premises to Sublessor.

 

Section
21.3         Default by Sublessor. The occurrence of any one or more of
the following events shall constitute a default and breach of this Sublease by Sublessor:

 

(a)          A
default under the Management Agreement by Sublessee arising from the failure or refusal of Sublessor to perform its obligations
under this Sublease.

 

(b)          The
failure by Sublessor to observe or perform any of the covenants, conditions or provisions of this Sublease to be observed or performed
by Sublesseor where such failure shall continue for a period of thirty (30) days after written notice thereof from Sublessee to
Sublessor or such longer period as shall reasonably be required to cure the same with the exercise of due diligence.

 

Section
21.4         Remedies of Sublessee. In the event of any such material
default or breach by Sublessor, Sublessee may at any time thereafter, with reasonable prior written notice of not less than thirty
(30) days, as Sublessee’s sole right and remedy by reason of such default or breach, terminate this Sublease and surrender
possession of the Premises to Sublessor. The restrictions on Sublessee's remedies hereunder shall not apply to matters for which
Sublessee is entitled to indemnity from Sublessor pursuant to Paragraph 12(a) below.

 

Section
21.5         No right to Damages. Except as expressly set forth in Paragraph
12 below to the contrary, both parties hereby waive and release any right to damages for or on account of the breach of this Sublease.

 

    	 

    	 

    

 

ARTICLE 22Indemnity.

 

(a)          Sublessor
shall and hereby agrees to indemnify and save and hold Sublessee (and all of its officers, employees, agents, affiliates and directors)
harmless from and against and reimburse Sublessee for any and all claims, causes of action, costs, expenses, judgments and awards
(including, without limitation, reasonable attorney’s fees based upon service rendered at hourly rates) incurred by or asserted
against Sublessee to the extent occasioned by or resulting, directly or indirectly from its status as subtenant hereunder or the
operation of the Premises, unless arising out of Sublessee’s (i) breach of this Sublease, (ii) affirmative act in breach
of the Management Agreement (unless Sublessee took such action at the written direction of Sublessor, such action was approved
in writing by the Sublessor, or such breach was caused by Sublessor’s breach of its obligations under Section 5.2 above),
or (iii) gross negligence, fraud or intentional misconduct. This obligation shall survive the expiration or termination of this
Sublease.

 

(b)          Sublessee
shall and hereby agrees to indemnify and save and hold Sublessor (and all of its officers, employees, agents, affiliates and directors)
harmless from and against and reimburse Sublessor for any and all claims, causes of action, costs, expenses, judgments and awards
(including, without limitation, reasonable attorney’s fees based upon service rendered at hourly rates) incurred by or asserted
against Sublessor to the extent occasioned by or resulting, directly or indirectly, from Sublessee’s breach of this Sublease
or the affirmative act of Sublessee in breach of the Management Agreement (unless Sublessee took such action at the written direction
of the Sublessor, such action was approved in writing by the Sublessor, or such breach was caused by Sublessor’s breach
of its obligations under Section 5.2 above), or Sublessee’s gross negligence, fraud or intentional misconduct. This obligation
shall survive the expiration or termination of this Sublease.

 

(c)          An
indemnifying party shall be relieved of its duty to indemnify an indemnified party hereunder if and to the extent the indemnified
party fails to use commercially reasonable efforts in good faith to mitigate its damages, including, but not limited to, failure
to give timely notice to its insurance carriers and to pursue recovery under applicable policies of insurance. Damages afforded
an indemnified party pursuant to this Paragraph 12 shall include actual damages suffered by such indemnified party as a result
of the matters indemnified against and shall not include any special, punitive, multiplied or consequential damages, or lost profits,
except to the extent the same are included in a third-party judgment against the indemnified party, the right to which is hereby
waived by both parties.

 

    	 

    	 

    

 

ARTICLE 23Condemnation.
If all or substantially all of the Premises are taken under the power of eminent domain, or sold under the threat of the exercise
of said power (all of which are herein called “condemnation”), and the Management Agreement is terminated as a result
thereof, then this Sublease shall terminate as of the date the Management Agreement is terminated as a result thereof. Any award
for the taking of all or any part of the Premises under the power of eminent domain, or under threat of the exercise of such power
shall be paid to Landlord. Sublessor and Sublessee shall have no claim to any portion of such award. Sublessee shall have no obligation
to repair or restore the Premises as a result of any taking of the Premises or any part thereof.

 

ARTICLE 24Brokers.
Sublessor and Sublessee each represent and warrant to the other that it has not employed any broker, agent or finder relating
to this Sublease. Sublessor shall indemnify and hold Sublessee harmless, and Sublessee shall indemnify and hold Sublessor harmless,
from and against any claim for brokerage or other commission arising from or out of any breach of the indemnitor’s representation
and warranty. This indemnification shall survive the expiration or termination of this Sublease.

 

ARTICLE 25Severability.
The invalidity of any provision of this Sublease as determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.

 

ARTICLE 26Incorporation
of Prior Agreements; Amendments. This Sublease contains all agreements of the parties with respect to the Sublease of the
Premises during the Term mentioned herein. This Sublease may only be modified in writing signed by the parties in interest at
the time of the modification.

 

ARTICLE 27Notices.
Any notice, request, demand, consent, approval and other communications under this Agreement shall be in writing, and shall be
deemed duly given or made at the time and on the date when received by electronic mail transmission or facsimile (provided that
the sender of such communication shall orally confirm receipt thereof by the appropriate parties and send a copy of such communication
to the appropriate parties within one (1) business day of any such e-mail or facsimile) or when personally delivered as shown
on a receipt therefor (which shall include delivery by a nationally recognized overnight delivery service), to the address for
each party set forth below. Any party, by written notice to the other in the manner herein provided, may designate an address
different from that set forth below. Notice given by a party's attorney in accordance with this Section 17 shall (a) constitute
notice from said party, and (b) not be considered an improper direct contact from the sending attorney to a "person known
to be represented by counsel".

 

	If
to Sublessor:
	American Realty Capital VII, LLC

        Attn: Edward M Weil., Jr.

        405 Park Avenue, 2nd Floor

        New York, New York 10022

         

	with a copy(which will not constitute
        notice) to:

         
	Jesse Galloway

        American Realty Capital VII, LLC

        405 Park Avenue, 14th Floor

        

         

 

    	 

    	 

    

 

	 	New York, New York 10022
	 	 
	with a copy (which will not constitute notice) to:	Michael A. Okaty

        Foley & Lardner LLP

        111 North Orange Avenue, Suite 1800

        Orlando, Florida 32801

         

	If to Sublessee:	Allegro

        c/o Allegro Senior Living, LLC

        212 South Central Avenue

        Suite 201

        Attention Laurence A. Schiffer, CEO

        St. Louis, MO 63105

         

	with a copy (which will not constitute notice) to:	Theresa Marie Kenney, Esq., B.C.S.

        Duss, Kenney, Safer, Hampton & Joos, P.A.

        4348 Southpoint Boulevard, Suite 101

        Jacksonville, Florida 32216

         

        And to:

         

        Allegro

        c/o Allegro Senior Living, LLC

        212 South Central Avenue, Suite 301

        Attention Robert B. Karn, CFO

        St. Louis, MO 63105

        

 

ARTICLE 28Holding
Over. If Sublessee, with or without Sublessor’s consent, remains in possession of the Premises or any part thereof after
the expiration of the Term hereof, such occupancy shall be a tenancy at sufferance upon all the provisions of this Sublease pertaining
to the obligations of Sublessee.

 

ARTICLE 29Binding
Effect. Subject to any provisions hereof restricting assignment or subletting by Sublessee and subject to the provisions of
Section 10, this Sublease shall bind the parties, their personal representatives, successors and assigns.

 

Section
29.1         Governing Law; Venue. This Sublease shall be interpreted
and enforced under the laws of the State, without regard to concepts of choice of laws The parties (a) hereby irrevocably and
unconditionally submit to the jurisdiction of the federal and state courts in and for the state and county in which the Premises
is located for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not
to commence any suit, action or other proceeding arising out of or based upon this Sublease except in the federal and state courts
in and for the state and county in which the Premises is located, and (c) hereby waive, and agree not to assert, by way of motion,
as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or

 

    	 

    	 

    

 

proceeding is
improper or that this Sublease or the subject matter hereof may not be enforced in or by such courts.

 

    	 

    	 

    

 

ARTICLE 30Sublessor’s
Access. Sublessor and its officers, employees and agents shall have the right to enter the Premises at any time so long as
such entry by Sublessor complies with the requirements of the Management Agreement concerning access to the Premises by Sublessee
as Licensee thereunder.

 

ARTICLE 31Limitation
of Liability. To the maximum extent permitted by applicable law, no shareholder, member, director, manager, officer or employee
of either party to this Agreement shall have any personal liability with respect to the liabilities or obligations of such party
under this Agreement.

 

ARTICLE 32Consent
to Assignment and Subordination. Sublessee hereby consents to any assignment of this Sublease or the Sublessor’s rights
hereunder to any lender that finances the purchase of the Premises by Landlord. Sublessee further agrees to subordinate its interest
in the Premises to such lender and to execute a subordination agreement in favor of any such lender in a form reasonably acceptable
thereto.

 

ARTICLE 33Counterparts.
This Sublease may be executed in any number of counterparts, each of which shall be deemed an original. This Sublease may be executed
by counterpart signatures and all counterpart signature pages shall constitute a part of this Sublease. Delivery of a counterpart
hereof via facsimile transmission or by electronic mail transmission, including but not limited to an Adobe file format document
(also known as a PDF file), shall be as effective as delivery of a manually executed counterpart hereof.

 

ARTICLE 34Management
Agreement. Sublessee agrees that it will not consent to any amendment to the Management Agreement without Sublessor’s
consent which may be granted or withheld in Sublessor’s sole discretion. Except to the extent prohibited by applicable law,
Sublessee further agrees that it shall not grant any approval or consent required of the Licensee under the Management Agreement
without Sublessor’s consent which may not be unreasonably withheld or delayed if Licensee’s consent under the Management
Agreement may not be unreasonably withheld or delayed. Sublessee further agrees that Sublessor, in Sublessee’s name, but
at Sublessor’s expense, shall have the right to enforce any of Manager’s obligations under the Management Agreement,
except to the extent prohibited by applicable law. Sublessee further agrees that, without the prior written consent or request
of Sublessor it shall not terminate the Management Agreement.

 

ARTICLE 35WAIVER
OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT TO ANY LITIGATION BASED UPON THIS AGREEMENT OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS SUBLEASE AND
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS SUBLEASE.

 

ARTICLE 36RADON
GAS. The following notice is given pursuant to
Florida Statutes Section 404.056: “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 health department.”

 

SUBLESSOR AND SUBLESSEE HAVE CAREFULLY
READ AND REVIEWED THIS SUBLEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS SUBLEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS SUBLEASE IS EXECUTED, THE TERMS OF THIS SUBLEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF SUBLESSOR AND SUBLESSEE WITH RESPECT TO THE PREMISES.

 

[Signature Page Follows.]

 

    	 

    	 

    

NOW WHEREFORE, the parties hereto
have executed this Transition Period Sublease as of the date first set forth above.

 

	 	 	 	SUBLESSOR:
	 	 	 	 
	 	 	 	ARHC [___________] TRS, LLC, a Delaware limited liability
    company
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 	 	 	 	 
	Witnesses:	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name:	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name:	 	 	 
	 	 	 	 
	 	 	 	SUBLESSEE:
	 	 	 	 
	 	 	 	[ALLEGRO OPERATOR]
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name:	 
	 	 	 	Title:	 
	 	 	 	 
	Witnesses:	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name:	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name:	 	 	 

 

    	 

    	 

    

 

EXHIBIT A

 

DESCRIPTION OF REAL PROPERTY

 

    	 

    	 

    

 

EXHIBIT B

 

LICENSES

 

    	 

    	 

    

 

EXHIBIT E-3

 

Operations Transfer
Agreement

 

[ INTENTIONALLY
OMITTED ]

 

    	 

    	 

    

 

EXHIBIT F

 

Assumption Agreement

 

[ See attached.
]

 

    	 

    	 

    

ASSUMPTION AGREEMENT

 

THIS ASSUMPTION AGREEMENT
is made effective _______ __, 2014, (the “Closing Date”) by and between by [THE
ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES], LLC, a [Florida/Kentucky] limited liability company (“Seller”)
and ARHC [________] LLC, a Delaware limited liability company (the “Purchaser”)
which is the assignee of certain rights and obligations of AMERICAN REALTY CAPITAL VII, LLC, a Delaware limited liability company
(“ARC”), pursuant to that certain Asset Purchase Agreement by and between Seller, ARC, and certain other
parties, dated as of August ___, 2014 (the “Purchase Agreement”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings ascribed to them in the Purchase Agreement.

 

In consideration of
the Seller’s consummation of the transactions described in the Purchase Agreement, and other good and valuable consideration,
the receipt and sufficiency of which the Purchaser hereby acknowledges, the Purchaser, for itself and for its successors and assigns,
hereby assumes and agrees to pay, perform or discharge, as the case may be, all of the Assumed Liabilities, including without
limitation, those matters described on Composite Exhibit A attached hereto.

 

Except for the Assumed
Liabilities, the Purchaser shall not assume or incur, and the Seller shall remain liable to pay, perform or discharge, all liabilities
and obligations of the Seller of every kind.

 

The undertakings of
the Purchaser referred to in this Assumption Agreement shall not in any way limit the Purchaser’s right of recourse as set
forth in the Purchase Agreement for any breach of the covenants, representations or warranties of the Seller contained therein.
Nothing herein shall prevent the Purchaser from contesting with a third party in good faith any of the Assumed Liabilities.

 

This Assumption Agreement
is subject to the terms of the Purchase Agreement, and nothing contained herein shall be deemed to modify, alter or amend the
terms and provisions of the Purchase Agreement. In the event of any inconsistency or conflict between the terms of the Purchase
Agreement and the terms of this Assumption Agreement, the terms of the Purchase Agreement shall prevail.

 

[Signature Page Follows]

 

    	 

    	 

    

IN WITNESS WHEREOF,
the Purchaser and the Seller have caused this Assumption Agreement to be executed and delivered under seal as of the day and year
first above written. This Assumption Agreement may be executed in multiple counterparts, each of which, taken together, shall
constitute one original.

 

	 	SELLER:
	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky] limited liability
    company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	PURCHASER:
	 	 
	 	ARHC [__________], LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

ACKNOWLEDGEMENT OF ASSUMPTION AGREEMENT

 

Each of the undersigned, which also comprise
the cumulative “Seller” under the Purchase Agreement, acknowledges the Assumption Agreement by [THE
ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES], LLC to which this Acknowledgement is attached and represents and warrants
that it has no ownership or interest in any of the Assumed Liabilities conveyed thereby.

 

	 	SELLER:
	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky]
    limited liability company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky] limited liability
    company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky] limited liability
    company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[signatures continue on next page]

 

    	 

    	 

    

 

	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky] limited liability
    company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	[THE ALLEGRO AT ______/COLLEGE HARBOR PROPERTIES],  LLC, a [Florida/Kentucky] limited liability
    company
	 	 	 
	 	By:	ALLEGRO SENIOR LIVING, LLC, its sole managing member
	 	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

    	 

    	 

    

 

COMPOSITE EXHIBIT A TO ASSUMPTION AGREEMENT

 

As used herein the “Assumed Liabilities”
are:

 

(i) all of Seller’s obligations
and liabilities under the Assumed Contracts and Leases described on Schedule 1.1(a) attached hereto and incorporated herein
by reference, to the extent the same arise or accrue at any time after 11:59 PM on the date immediately preceding the Closing
Date;

 

(ii) all of Seller’s obligations
with respect to accrued vacation and sick pay for employees to the extent of Purchaser’s obligations pursuant to Schedule
4.4(d) attached hereto and incorporated herein by this reference; and

 

(iii) the Prepaids and Deposits described
on Schedule 2.2(c) attached hereto an incorporated herein by this reference.

 

    	 

    	 

    

 

EXHIBIT G

 

Due Diligence
Materials

 

[ See attached.
]

 

    	 

    	 

    

Due Diligence Materials

 

		1.	A complete copy of all commercial leases affecting the Properties
                                         and all amendments thereto and of all material correspondence relating thereto.

 

		2.	A copy of the forms of resident agreements for each of the
                                         Properties and a resident census (without resident names).

 

		3.	A copy of all surveys and site plans of the Properties, including,
                                         without limitation, any as built surveys obtained or delivered to tenants of the Properties
                                         in connection with its construction.

 

		4.	A copy of all architectural plans and specifications and construction
                                         drawings for improvements located on the Properties.

 

		5.	A copy of Seller's title insurance policies relating to the
                                         Properties.

 

		6.	A-copy-of-the-certificate-of-occupancy and-zoning-reports-in-Seller's-possession-for-the-Properties
                                         and of all governmental permits and approvals.

 

		7.	A copy of all existing environmental, engineering and physical
                                         condition reports in Seller's possession for the Properties.

 

		8.	The operating budgets and operating statements of the Properties
                                         for the thirty-six (36) month period immediately preceding the Purchase and Sale Agreement
                                         effective date or such shorter period from the commencement of rent under the leases.

 

		9.	Copies of each Property's real estate tax bills and all utility
                                         bills for the current and prior two (2) tax years.

 

		10.	All service contracts and insurance policies which affect
                                         the Properties, if any.

 

		11.	A copy of all inspections of and warranties relating to the
                                         improvements constructed on the Properties and systems serving the Properties, including
                                         without limitation any structural slab, roof, electrical, plumbing, heating, air conditioning
                                         and elevator inspections and warranties.

 

		12.	A written inventory of all items of personal property, if
                                         any, to be conveyed to Buyer.

 

		13.	Updated set of current financials of the Properties through
                                         June 30, 2014.

 

		14.	Complete copy of any feasibility study completed by the senior
                                         housing operator, if any.

 

		15.	Operator records of payor-mix for patients/residents at the
                                         Properties.

 

		16.	A copy of all primary and secondary state licenses or regulatory
                                         permits for the Properties.

 

		17.	A copy of any third-party accreditation (i.e. Joint Commission)
                                         which affect the Properties, if any.

 

		18.	A copy of all Medicare and Medicaid provider agreements and
                                         provider numbers for the Properties.

 

		19.	A copy
                                         of all Medicare and Medicaid cost reports for the previous three years, if applicable.

 

    	 

    	 

    

 

		20.	A copy of any certificate of need documentation for each
                                         Property, if any.

 

		21.	A copy of all licensing inspection reports (whether performed
                                         on an annual basis or otherwise) from state regulators related to operation of each Property
                                         as an assisted living facility for the past five (5) years, and a summary of actions
                                         taken to correct deficiencies identified in any such reports.

 

		22.	A copy of all regulatory correspondence
                                         relating to enforcement actions imposed or threatened

                                         for the past five (5) years.

 

		23.	A copy of any consent order imposed
                                         on the Properties.

 

		24.	A copy of all regulatory correspondence
                                         relating to any physical plant or life safety code deficiencies for the Properties.

 

		25.	A copy of any documents relating
                                         to a waiver of life safety code or physical plant requirements for the Properties.

 

		26.	Summary of all capital expenditures
                                         for the thirty-six (36) month period immediately preceding the Purchase and Sale Agreement
                                         effective date.

 

		27.	All pest control inspection reports
                                         of the Properties for the preceding thirty-six (36) months.

 

		28.	Copy of any ADA Survey report
                                         for the Properties.

 

		29.	Copies of all maintenance and service reports for the Properties
                                         for the preceding thirty-six (36) months.Ex1043

Exhibit 10.43

FIRST AMENDMENT TO SENIOR SECURED                                                                REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “Amendment”) made as of the _____ day of September, 2014, by and among AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Borrower”), AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC., a Maryland corporation (“Guarantor”), KEYBANK NATIONAL ASSOCIATION (“KeyBank”), individually and as Agent for itself and the other Lenders from time to time a party to the Credit Agreement (as hereinafter defined) (KeyBank, in its capacity as Agent, is hereinafter referred to as “Agent”), and THE OTHER “LENDERS” WHICH ARE SIGNATORIES HERETO (hereinafter referred to collectively as the “Lenders”).
W I T N E S S E T H:
WHEREAS, Borrower, Agent and certain of the Lenders entered into that certain Senior Secured Revolving Credit Agreement dated as of March 21, 2014 (the “Credit Agreement”); and
WHEREAS, Borrower has requested that the Agent and the Lenders make certain modifications to the terms of the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to make such modifications subject to the execution and delivery by Borrower and Guarantor of this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby covenant and agree as follows:
1.Definitions.  All the terms used herein which are not otherwise defined herein shall have the meanings set forth in the Credit Agreement.
2.    Modification of the Credit Agreement.  Borrower, the Lenders and Agent do hereby modify and amend the Credit Agreement as follows:
(a)    By inserting the following definitions in §1.1 of the Credit Agreement, in the appropriate alphabetical order:
“Distribution Limit.  See §8.7(a).”; 
“Dividend Limit Waiver Period.  See §8.7(a).”; and 
“Increased Distributions Limit Period.  See §8.7(a).”
(b)    By deleting in its entirety the first (1st) sentence of §8.7(a) of the Credit Agreement and inserting in lieu thereof the following new sentence: 
“(a)    The Borrower shall not pay any Distribution to the partners, members or other owners of the Borrower, and REIT shall not pay any Distribution to 

1

its partners, members or other owners of REIT, to the extent that the aggregate amount of such Distributions paid in any fiscal quarter, when added to the aggregate amount of all other Distributions paid in the same fiscal quarter and the preceding three (3) fiscal quarters, exceeds ninety-five percent (95%) of such Person’s Modified FFO for such period (the “Distribution Limit”) (provided that (X) during the time period commencing on April 1, 2014 and ending on September 30, 2014 (the “Dividend Limit Waiver Period”), Borrower or REIT may make Distributions in excess of the Distribution Limit so long as all Distributions made by Borrower or REIT during the Dividend Limit Waiver Period consist solely of cash dividends at such Person’s normal rate consistent with past practice paid on account of Equity Interests of REIT or its Subsidiaries which are then outstanding, (Y) during the time period commencing on October 1, 2014 and ending on March 31, 2015 (the “Increased Distributions Limit Period”), the Distribution Limit shall be increased to one hundred twenty-five percent (125%) of such Person’s Modified FFO and any Distributions paid by Borrower or REIT to their respective partners, members or other owners before the Increased Distributions Limit Period shall not be considered in the calculation of the limitations contained in this §8.7(a)(Y), it being agreed that during the Increased Distributions Limit Period, the aggregate amount of such permitted Distributions shall be determined by using only the quarters elapsed from October 1, 2014 and annualizing such amount in a manner reasonably acceptable to Agent, and (Z) upon the expiration of the Increased Distributions Limit Period, the Distribution Limit shall return to ninety-five percent (95%) of such Person’s Modified FFO and any Distributions paid by Borrower or REIT to their respective partners, members or other owners during the Dividend Limit Waiver Period or the Increased Distributions Limit Period shall not be considered in the calculation of the limitations contained in this §8.7(a) for the period commencing April 1, 2015 and continuing thereafter, it being agreed that until three (3) fiscal quarters following April 1, 2015 have occurred, the aggregate amount of such permitted Distributions shall be determined by using the quarters elapsed from April 1, 2015 and annualizing such amount in a manner reasonably acceptable to Agent); provided that the limitations contained in this §8.7(a) shall not preclude the Borrower or REIT from making Distributions in an amount equal to the minimum distributions required under the Code to maintain the REIT Status of REIT, as evidenced by a certification of the principal financial officer or accounting officer of REIT containing calculations in detail reasonably satisfactory in form and substance to the Agent.”  
3.    References to Credit Agreement.  All references in the Loan Documents to the Credit Agreement shall be deemed a reference to the Credit Agreement as modified and amended herein.  
4.    Consent and Acknowledgment of Borrower and Guarantor.  By execution of this Amendment, the Guarantor hereby expressly consents to the modifications and amendments relating to the Credit Agreement as set forth herein, and Borrower and Guarantor hereby acknowledge, represent and agree that (a) the Credit Agreement, as modified and amended herein, and the other 

2

Loan Documents remain in full force and effect and constitute the valid and legally binding obligation of Borrower and Guarantor, as applicable, enforceable against such Persons in accordance with their respective terms, (b) that the Guaranty extends to and applies to the Credit Agreement as modified and amended herein, and (c) that the execution and delivery of this Amendment does not constitute, and shall not be deemed to constitute, a release, waiver or satisfaction of Borrower’s or the Guarantor’s obligations under the Loan Documents.
5.    Representations and Warranties.  Borrower and Guarantor represent and warrant to Agent and the Lenders as follows:
(a)    Authorization.  The execution, delivery and performance of this Amendment and the transactions contemplated hereby (i) are within the authority of Borrower and Guarantor, (ii) have been duly authorized by all necessary proceedings on the part of the Borrower and Guarantor, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which Borrower or Guarantor is subject or any judgment, order, writ, injunction, license or permit applicable to Borrower or Guarantor, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, articles of incorporation or other charter documents or bylaws of, or any agreement or other instrument binding upon, Borrower or Guarantor or any of their respective properties, (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of Borrower or Guarantor and (vi) do not require the approval or consent of any Person other than those already obtained and delivered to the Agent.
(b)    Enforceability.  This Amendment is the valid and legally binding obligations of Borrower and Guarantor enforceable in accordance with the respective terms and provisions hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity.
(c)    Governmental Approvals.  The execution, delivery and performance of this Amendment and the transactions contemplated hereby do not require the approval or consent of, or any filing or registration with, or the giving of any notice to, any court, department, board, governmental agency or authority other than those already obtained, and filings after the date hereof of disclosures with the SEC, or as may be required hereafter with respect to tenant improvements, repairs or other work with respect to any Real Estate.
(d)    Reaffirmation of Representations and Warranties.  Each of the representations and warranties made by or on behalf of the Borrower, the Guarantor or any of their respective Subsidiaries contained in the Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement is true and correct in all material respects as of the date hereof, with the same effect as if made at and as of the date hereof, except to the extent of changes resulting from transactions permitted by the Loan Documents (it being understood and agreed that, with respect to any representation or warranty which by its terms is made as of a specified date, such representation or warranty is reaffirmed hereby only as of such specified date).  To the extent that any of the representations and warranties contained in the Credit Agreement, any other Loan Document or in any document or instrument 

3

delivered pursuant to or in connection with the Credit Agreement is qualified by “Material Adverse Effect” or any other materiality qualifier, then the qualifier “in all material respects” contained in this Paragraph 5(d) shall not apply with respect to any such representations and warranties.
6.    No Default.  By execution hereof, the Borrower and the Guarantor certify that, immediately after giving effect to this Amendment, there exists no Default or Event of Default as of the date of this Amendment.
7.    Waiver of Claims.  Borrower and Guarantor acknowledge, represent and agree that none of such Persons has any defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever arising on or before the date hereof with respect to the Loan Documents, the administration or funding of the Loan or the Letters of Credit or with respect to any acts or omissions of Agent or any Lender, or any past or present officers, agents or employees of Agent or any Lender pursuant to or relating to the Loan Documents, and each of such Persons does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action arising on or before the date hereof, if any.
8.    Ratification.  Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Credit Agreement as modified and amended herein.  Nothing in this Amendment or any other document delivered in connection herewith shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantor under the Loan Documents.
9.    Effective Date.  This Amendment shall be deemed effective and in full force and effect as of the date hereof upon (a) the execution and delivery of this Amendment by Borrower, Guarantor, Agent and the Majority Lenders, and (b) evidence that the Borrower shall have paid all fees due and payable with respect to this Amendment.  The Borrower shall pay the reasonable fees and expenses of Agent in connection with this Amendment in accordance with Section 15 of the Credit Agreement.  
10.    Amendment as Loan Document.  This Amendment shall constitute a Loan Document.
11.    Counterparts.  This Amendment may be executed in any number of counterparts which shall together constitute but one and the same agreement.
12.    MISCELLANEOUS.  THIS AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors, successors-in-title and assigns as provided in the Credit Agreement.  
[Signatures Begin On Next Page]

4

IN WITNESS WHEREOF, the parties hereto have hereto set their hands and affixed their seals as of the day and year first above written.
BORROWER:
AMERICAN REALTY CAPITAL HEALTHCARE TRUST II OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By: AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC., a Maryland corporation, its general partner
By:       /s/ Edward M. Weil           
Name:  Edward M. Weil     
Title:    President

REIT:

AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC., a Maryland corporation

By:       /s/ Edward M. Weil                       
Name:  Edward M. Weil     
Title:    President

[Signatures Continue on Following Page]

KeyBank/American Realty Capital Healthcare Trust II Operating Partnership, L.P. –                                      Signature Page to First Amendment to Senior Secured Revolving Credit Agreement

LENDERS:

KEYBANK NATIONAL ASSOCIATION, individually as a Lender and as the Agent
By:    /s/ Wayne D. Horvath     
Name: Wayne D. Horvath 
Title: Senior Vice President

REGIONS BANK
By:    /s/ David Blevins     
Name: David Blevins 
Title: Vice President

JPMORGAN CHASE BANK, N.A.
By:    /s/ Rita Lai     
Name: Rita Lai 
Title: Authorized Signer

CAPITAL ONE, NATIONAL ASSOCIATION
By:    /s/ Daniel Moore     
Name: Daniel Moore 
Title: Authorized Signatory

KeyBank/American Realty Capital Healthcare Trust II Operating Partnership, L.P. –                                      Signature Page to First Amendment to Senior Secured Revolving Credit Agreement

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