Document:

Exhibit 10.10

 

ASSIGNMENT AND ASSUMPTION OF PURCHASE AND SALE
AGREEMENT

 

THIS ASSIGNMENT
AND ASSUMPTION OF PURCHASE AND SALE AGREEMENT (this “Assignment”), dated as of December 31, 2013, is made by
and among THE FRESHWATER GROUP, INC., an Arizona corporation (“Assignor”), WATERMARK HARVARD SQUARE OWNER, LLC,
a Delaware limited liability company (“Harvard Square Owner”), and WATERMARK HARVARD SQUARE AP, LLC (together
with Harvard Square Owner, collectively, “Assignee”).

WHEREAS, Assignor
entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions (as amended from time to time, the “Purchase
Contract”) dated as of August 27, 2013, among Assignor, as purchaser, and Harvard Square, LLC and LDEV, LLC (collectively,
“Seller”), pursuant to which Assignor agreed to purchase, and Seller agreed to sell, the Property, as more particularly
described in the Purchase Contract; and

WHEREAS, in accordance
with the terms of Section 14 of the Purchase Contract, Assignor desires to assign, and Assignee desires to assume, all of
Assignor’s right, title and interest in, to and under the Purchase Contract.

NOW, THEREFORE,
in consideration of the foregoing and the mutual promises herein contained, and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

1.            
ASSIGNMENT AND ASSUMPTION.  In accordance with the terms of Section 14 of the Purchase Contract,
Assignor hereby sells, assigns, transfers and conveys all of Assignor’s right, title and interest in, to and under the Purchase
Contract to Assignee, without recourse, representation or warranty, and Assignee hereby accepts
Assignor’s interest in, to and under the Purchase Contract and assumes all of the duties, obligations and responsibilities
of Assignor thereunder.

2.            
SUCCESSORS AND ASSIGNS.  This Assignment shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective heirs, successors and assigns.

3.            
COUNTERPARTS; NO ORAL MODIFICATIONS. This Assignment may be executed in counterparts by .pdfs or facsimile signatures,
each of which shall be deemed an original, but all of which shall constitute one and the same instrument. This Assignment may not
be modified except pursuant to a written instrument executed by all of the parties hereto.

4.             
GOVERNING LAW.  This Assignment shall be governed by and construed in accordance with the laws of the State where
the Property (as defined in the Purchase Contract) is located.

 

[NO FURTHER TEXT ON THIS
PAGE]

 

    	 

    	 

    

IN WITNESS WHEREOF, Assignor
and Assignee have caused this Assignment to be executed as of the day and year first above written.

 

	 	ASSIGNOR:
	 	 	 	 
	 	THE FRESHWATER GROUP, INC.,
 an Arizona corporation
	 	 	 	 
	 	 	 	 
	 	By:  	/s/ David Freshwater
	 	 	Name:  	David Freshwater
	 	 	Title:	President
	 	 	 	 
	 	 	 	 
	 	ASSIGNEE:
	 	 	 	 
	 	WATERMARK HARVARD SQUARE OWNER, LLC,
 a Delaware limited liability company
	 	 	 	 
	 	 	 	 
	 	By:	/s/ David Barnes
	 	 	Name:	David Barnes
	 	 	Title:	Authorized Signatory
	 	 	 	 
	 	 	 	 
	 	WATERMARK HARVARD SQUARE AP, LLC,
 a Delaware limited liability company
	 	 	 	 
	 	 	 	 
	 	By:	/s/ David Barnes
	 	 	Name:	David Barnes
	 	 	Title:	Authorized Signatory

 

 

 

 

Signature Page to Assignment and Assumption
of PSA (Harvard Square)Exhibit 10.11

 

PURCHASE AND SALE AGREEMENT

 

AND JOINT ESCROW INSTRUCTIONS

 

BY AND AMONG

 

HARVARD SQUARE, LLC,

 

A WASHINGTON LIMITED LIABILITY COMPANY

 

AS “DEVELOPED LAND SELLER;”

 

LDEV, LLC,

 

A WASHINGTON LIMITED LIABILITY COMPANY

 

AS “UNDEVELOPED LAND SELLER”;

 

AND

 

THE FRESHWATER GROUP, INC.,

 

AN ARIZONA CORPORATION

 

AS “BUYER”

 

DATED AS OF AUGUST 27, 2013

 

    	 

    	 

    

  

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	Purchase and Sale	1
	2.	Purchase Price	2
	2.1      Deposit	3
	2.2      Balance of Purchase Price	3
	2.3      Independent Contract Consideration	3
	2.4      Financing	3
	3.	Title to Property	4
	3.1      Title Insurance	4
	3.2      Procedure for Approval of Title	4
	4.	Due Diligence Items	5
	4.1      Due Diligence Items	5
	5.	Inspections	5
	5.1      Procedure; Indemnity	5
	5.2      Approval	6
	6.	Escrow	7
	6.1      Opening of Escrow	7
	6.2      Closing Date	7
	6.3      Seller Deliveries	7
	6.4      Buyer Deliveries	9
	6.5      Post-Closing Deliverables	9
	6.6      Seller’s Costs	9
	6.7      Buyer’s Costs	10
	6.8      Prorations	10
	6.9      Duties of Escrow Holder	13
	7.	Seller Representations, Warranties, and Covenants	14
	7.1      Representations and Warranties	14
	7.2      Definition of “Seller’s knowledge”; Survival	20
	7.3      Covenants of Seller	21
	8.	Buyer Representations and Warranties	22
	8.1      Organization and Authorization	22
	8.2      No Conflicting Agreements	22
	8.3      Patriot Act Compliance	22
	9.	Conditions Precedent to Closing; Status of Employees at Closing	22
	9.1      Conditions Precedent	23
	9.2      Employees	24
	10.	Damage or Destruction	26
	11.	Eminent Domain	27
	12.	Notices	27
	13.	Remedies	28
	13.1     Seller Default	28
	13.2     Buyer Default	29
	13.3     Indemnity	29
	14.	Assignment	30

 

    	i

    	 

    

  

	15.	Interpretation and Applicable Law	30
	16.	Amendment	30
	17.	Attorneys’ Fees	30
	18.	Entire Agreement; Survival	30
	19.	Counterparts	30
	20.	Time Is of the Essence; Calculation of Time Periods	31
	21.	Real Estate Commission	31
	22.	Severability	31
	23.	Further Assurances	31
	24.	Exclusivity	31
	25.	Non-Solicitation	31
	26.	No Option; Binding Effect	32

 

EXHIBITS

 

	Exhibit A-1	Legal Description – Developed Land
	Exhibit A-2	Legal Description – Undeveloped Land
	Exhibit B	Deed
	Exhibit C	Bill of Sale, Assignment and Assumption Agreement
	Exhibit D	Purchase Agreement Guaranty
	Exhibit E	Non-Compete Agreement
	Exhibit F	Due Diligence Items
	Exhibit G	Rent Roll
	 	 
	SCHEDULES
	 	 
	Schedule 5.2.3	Service Contracts
	Schedule 7.1.6	Litigation
	Schedule 7.1.26	Current Permits

 

    	ii

    	

    

 

PURCHASE AND
SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS 

THIS PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Agreement”) is made and entered into as of August 27, 2013
(the “Effective Date”), by and between Harvard Square LLC, a Washington limited liability company (“Developed
Land Seller”); LDEV, LLC, a Washington limited liability company (“Undeveloped Land Seller”, and together
with Developed Land Seller, individually and collectively, “Seller” or “Sellers”); and The
Freshwater Group, Inc., an Arizona corporation (“Buyer”). Developed Land Seller, Undeveloped Land Seller and
Buyer are sometimes each individually referred to as a “Party” and collectively as the “Parties.”

 

IN CONSIDERATION of the
mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.            Purchase
and Sale.   Each Seller, as applicable, hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from
each Seller, subject to the terms and conditions of this Agreement, the following (collectively, the “Property”):

 

1.1           all
of Developed Land Seller’s fee simple interest in, to and under that certain real property known as Harvard Square, located
in the City and County of Denver, Colorado, inclusive of the real property more particularly described on Exhibit A-1
(the “Developed Land”);

 

1.2           all
of Undeveloped Land Seller’s fee simple interest in, to and under that certain adjacent undeveloped real property, inclusive
of the real property more particularly described on Exhibit A-2 (the “Undeveloped Land”)
(The Developed Land and the Undeveloped Land are collectively referred to as the “Land”);

 

1.3           all
of Seller’s right, title and interest in, to and under all privileges and easements appurtenant to the Land, including, without
limitation, all of Seller’s right, title and interest, if any, in and to all minerals, oil, gas and other hydrocarbon substances
in, on and under the Land, all development rights, air rights, water rights and water stock owned by Seller relating to the Land,
and all easements, rights of way or other appurtenances of Seller used in connection with the beneficial use and enjoyment of the
Land (collectively, the “Appurtenances”);

 

1.4           all
improvements and fixtures located on the Developed Land, including, without limitation, the seniors housing community (the “Community”),
and all other structures located on the Developed Land, all apparatus, equipment and appliances used in connection with the operation
or occupancy of the Community or the Developed Land, such as heating, air conditioning, and lighting systems and other facilities
used to provide any utility services, refrigeration, ventilation, garbage disposal, or other services on the Developed Land (collectively,
the “Improvements”, and together with the Land, and the Appurtenances, the “Real Property”);

 

1.5           all
of Developed Land Seller’s right, title and interest in and to all tangible personal property now or hereafter located on
or in, stored for future use with, or used in

 

    	1

    	

    

  

connection with, the Real
Property, excluding all tangible personal property owned or leased by the Residents and Tenants (each as defined below) or other
occupants of the Property (the “Personal Property”);

 

1.6           all
of Developed Land Seller’s right, title and interest in, to and under any agreement (including any lease) between a Resident
of the Community, on the one hand, and Developed Land Seller or its management company, as Developed Land Seller’s agent,
on the other hand (collectively, the “Residency Agreements”), and any real property leases relating to any premises
located at the Community other than the Residency Agreements (collectively, the “Non-Residency Leases”), including
any right, title and interest of Developed Land Seller in and to any subleases with respect thereto, and including all amendments
or modifications thereto or supplements thereof, covering all or any portion of the Community (such Residency Agreements and Non-Residency
Leases being referred to, collectively, as the “Leases”, and all persons or entities occupying the Real Property
or any part thereof pursuant to Residency Agreements, the “Residents” and all persons or entities occupying
the Real Property or any part thereof pursuant to the Non-Residency Leases, the “Tenants”), together with all
deposits held in connection with the Leases including, without limitation, all unapplied security deposits, prepaid rent, guaranties,
letters of credit and other similar charges and credit enhancements providing additional security for the Leases (“Security
Deposits”) as set forth on the Rent Roll (as defined herein);

 

1.7           to
the extent assignable, all right, title and interest in, to and under all intangible property now or hereafter owned by either
Seller and used in the ownership, use, operation, occupancy, maintenance or development of the applicable Real Property and Personal
Property, including without limitation all (a) licenses, permits, certificates, entitlements, approvals, authorizations and
other entitlements issued to or assigned to or otherwise for the benefit of either Seller (the “Permits”); (b) copies
of all reports, test results, environmental assessments, surveys, plans, specifications in either Seller’s possession (the
“Plans”); (c) warranties and guaranties, if any, held by either Seller from manufacturers, contractors,
subcontractors, suppliers and installers (“Warranties”); (d) trade names, trademarks, service marks, building
and property names and building signs, including without limitation, the name “Harvard Square” (the “Tradenames”)
used in connection with the Community, but excluding all marks owned by Developed Land Seller’s property manager (the “Property
Manager”) at the Community; (e) telephone numbers, domain names, e-mail addresses and other means of contact utilized
in connection with the Real Property; and (f) other intangible property related to the Real Property, excluding only intangible
property owned or leased by the Property Manager, Residents, Tenants or other occupants of the Property (collectively, the “Intangible
Property”); and

 

1.8           to
the extent approved by Buyer as set forth herein, all right, title and interest in, to and under the “Assigned Contracts”
(as defined in Section 5.2.3 below).

 

2.            Purchase
Price.   The total Purchase Price of the Property shall be Thirty-One Million Five Hundred Thousand and No/100 Dollars ($31,500,000)
(“Purchase Price”) as allocated on the Allocation Schedule attached hereto and adjusted by the prorations and
adjustments provided elsewhere in this Agreement, and the Purchase Price shall be payable as follows:

 

    	2

    	

    

  

2.1           Deposit.   Within three (3) business days following the mutual execution and exchange of this Agreement, Buyer shall deposit into Escrow (as
defined below) the amount of Two Hundred Thousand and No/100 Dollars ($200,000) (the “Initial Deposit”), in
the form of a wire transfer payable to First American Title Insurance Company (“Escrow Holder”). Unless this
Agreement shall have been terminated pursuant to the provisions hereof prior thereto, no later than three (3) business days following
the expiration of the “Due Diligence Period” (as hereinafter defined), Buyer shall deposit with Escrow Holder additional
cash or other immediately available funds in the amount of Five Hundred Fifty Thousand and No/100 Dollars ($550,000) (the “Additional
Deposit”, and together with the Initial Deposit and all interest accrued thereon, the “Deposit”).
Escrow Holder shall deposit the Deposit in a non-commingled trust account and shall invest the Deposit in an insured, interest
bearing money market accounts, certificates of deposit, United States Treasury Bills or such other instruments as directed by Buyer
and reasonably acceptable to Seller and interest thereon shall be credited to Buyer’s account and deemed to be part of the
Deposit. In the event of the consummation of the purchase and sale of the Property as contemplated hereunder, the Deposit shall
be paid to Seller and credited against the Purchase Price on the Closing Date. In the event the sale of the Property is not consummated
because of (a) a Seller default, (b) the termination of this Agreement by Buyer in accordance with any right to so terminate provided
herein, or (c) the failure of any of Buyer’s Closing Conditions (as defined below) to occur, then the Deposit shall be immediately
and automatically paid over to Buyer without the need for any further action by either Party hereto. The sole remedy for a failure
by Buyer to make the Initial Deposit or the Additional Deposit as and when required hereunder shall be for Seller to terminate
this Agreement.

 

2.2           Balance
of Purchase Price.   On or before the Closing Date, Buyer shall deposit with the Escrow Holder to be held in Escrow the balance
of the Purchase Price, as adjusted by the prorations and adjustments provided for in this Agreement, in immediately available funds
by wire transfer made payable to Escrow Holder.

 

2.3           Independent
Contract Consideration.   Notwithstanding anything in this Agreement to the contrary, One Hundred and No/100 Dollars ($100.00)
of the Deposit is delivered to the Escrow Holder for delivery to Seller as “Independent Contract Consideration”,
and the Deposit is reduced by the amount of the Independent Contract Consideration so delivered to Seller, which amount has been
bargained for and agreed to as consideration for Seller’s execution and delivery of this Agreement.

 

2.4           Financing.   Following the execution of this Agreement, Buyer shall apply for and thereafter shall use commercially reasonable efforts to obtain
for the Property, at Buyer’s sole cost and expense, a loan from an institutional lender for new mortgage financing for the
Property on current, commercially customary terms (the “Financing”). If Buyer is unable to obtain the Financing
as of Closing, Buyer shall have the right to terminate this Agreement, in its sole discretion, by giving written notice of such
election on or prior to the Closing Date, in which event the Deposit shall be returned forthwith to Buyer provided Seller receives
the termination notice within sixty (60) days after the Effective Date (the “Financing Contingency Deadline”).
Any termination of this Agreement by Buyer solely under this Section 2.4 after the Financing Contingency Deadline shall entitle
Seller to receive and retain the Deposit as compensation for the termination but Buyer’s right to terminate under this Section
2.4 is without prejudice to

 

    	3

    	

    

 

 

Buyer’s other rights
to terminate this Agreement as set forth in this Agreement and to have its Deposit refunded to the extent expressly set forth herein.

 

3.            Title
to Property.

 

3.1           Title
Insurance.   At the Closing, each Seller shall convey to Buyer fee simple title to its portion of the Real Property by a duly
executed and acknowledged Deed (as defined in Section 6.3.1 below). A condition to Buyer’s obligations under this Agreement
is the issuance by First American Title Insurance Company whose address is 777 South Figueroa Street, 4th Floor, Los Angeles, California
90017 (Attention: Maurice Neri) (the “Title Company”) to Buyer of a 2006 ALTA Extended Coverage Owner’s
Policy of Title Insurance (with the general exceptions deleted) insuring fee simple title to the Real Property in Buyer with liability
in the amount of the Purchase Price, subject only to such exceptions as Buyer shall have approved pursuant to Section 3.2 below
(the “Permitted Exceptions”), and without survey exceptions (the “Title Policy”); provided,
however, Buyer agrees to accept the Title Policy without creditor’s rights coverage. The Title Policy shall provide full
coverage against all labor, mechanics’ and materialmen’s liens, and contain such endorsements as Buyer may reasonably
require, including any endorsements required as a condition to Buyer’s approval of any title exceptions pursuant to Section
1.6 below (the “Endorsements”). Notwithstanding anything in this Agreement to the contrary, and notwithstanding
any approval or consent given or deemed given by Buyer hereunder, Seller covenants to cause to be released and reconveyed from
the Property, and to remove as exceptions to title on or prior to the Closing Date all labor, materialmen’s and mechanics’
liens, mortgages, deeds of trust and other monetary encumbrances, assessments and/or indebtedness, except for real estate taxes
and assessments not yet due or payable (the “Pre-Disapproved Exceptions”).

 

3.2           Procedure
for Approval of Title.   Seller shall, no later than five (5) days following the Effective Date (the “Title Delivery
Date”), provide to Buyer a title insurance commitment for the Property (the “Commitment”), together
with access to all of the recorded items identified as exceptions therein (the “Title Documents”). Within five
(5) business days following the Effective Date, Seller shall furnish Buyer with a copy of the most recent survey of the Real Property
in Seller’s possession (the “Prior Survey”, and if no New Survey is obtained, the “Survey”),
and on or before the expiration of the Due Diligence Period, Buyer may at its option obtain a current as-built survey (a “New
Survey”, and collectively with the Prior Survey, the “Survey”) of any or all of the Land and the Improvements
by a registered land surveyor. Buyer shall pay all costs and expenses incurred in obtaining a New Survey. Buyer shall have forty
five (45) days after the Effective Date to review and approve, in writing, the condition of the title to the Real Property (“Title
Review Period”). If the Title Documents or the Survey reflect or disclose any defect, exception or other matter that
is unacceptable to Buyer (each, a “Title Defect”, and collectively, the “Title Defects”),
then Buyer shall provide Seller with written notice of Buyer’s objections no later than the conclusion of the Title Review
Period; provided, however, that if Buyer shall fail to notify Seller in writing within the Title Review Period either that
the condition of title is acceptable or of any specific objections to the state of title, then Buyer shall be deemed to have objected
to all exceptions to title or other conditions or matters which are described in the Title Documents or shown on the Survey. Seller
may, at its sole option, elect, by written notice given to Buyer within five (5) days following the conclusion of the Title Review
Period (“Seller’s Notice Period”), to cure or remove, or agree to cure and

 

    	4

    	

    

 

remove by Closing,
the Title Defects; provided, however, Seller shall in all events have the obligation to (i) act in good faith in making
such election and curing any Title Defects that Seller elects to cure, (ii) specifically remove the Pre-Disapproved Exceptions,
and (iii) remove any Title Defect that attaches to the Property subsequent to the conclusion of the Title Review Period.
The failure of Seller to deliver written notice electing to cure any or all such objected to exceptions during Seller’s
Notice Period shall be deemed an election by Seller not to cure such exceptions. In the event Seller elects (or is deemed to have
elected) not to cure or remove any objection, or in any event Seller fails to cure or remove any objection which Seller agrees
or is required to cure, then Buyer shall be entitled, as Buyer’s sole and exclusive remedies, either to (i) terminate
this Agreement and obtain a refund of the Deposit or (ii) waive any Title Defects that Seller has not elected to cure and
close this transaction as otherwise contemplated herein. The failure of Buyer to provide written notice to Seller within ten (10)
days following the expiration of Seller’s Notice Period waiving any Title Defects Seller has not elected to cure shall be
deemed an election by Buyer to waive its objections as to all Title Defects that are (x) not Pre-Disapproved Exceptions and (y)
Seller has not agreed to release or cure. If at any time prior to the Closing Date, Buyer receives a new, updated or supplemental
Commitment or Survey (including the initial version of the Survey) and such new, updated or supplemental Commitment or Survey
discloses one or more Title Defects that are not Permitted Exceptions (in each case, a “New Title Defect”)
and any New Title Defect is unacceptable to Buyer, Buyer may, within five (5) business days after receiving such initial version,
new, updated or supplemental Commitment or Survey, as the case may be, deliver to Seller another written notice of Buyer’s
objections with respect to any New Title Defect only and the process described in this Section shall apply thereto. If any of
the time periods set forth in this Section 3.2 extend beyond the expiration of the Due Diligence Period, Buyer shall nevertheless
be afforded any rights (including termination of this Agreement and return of the Deposit) on the terms set forth in this Section.

 

4.            Due
Diligence Items.

 

4.1           Due
Diligence Items.   Seller shall, on or before three (3) business days after the Effective Date (the “Delivery Date”),
deliver or otherwise make available to Buyer all of the information regarding the Property as Buyer shall reasonably request, including
any preliminary title reports, a detailed delinquency report (“Delinquency Report”), copies of existing licenses
and permits (including without limitation any assisted living facility license required to operate the Community the “License”),
and such other items as are set forth on Exhibit F (collectively, the “Due Diligence Items”). With respect
to the Due Diligence Items listed on Exhibit F which are listed as being “N/A”, it is acknowledged that such
items are not currently in Seller’s possession and accordingly, Buyer is not expecting such items to be provided by Seller
during the Due Diligence Period; provided, however, to the extent that such items become available to Seller during the term of
this Agreement, Seller agrees that it will deliver such items to Buyer at such time. Developed Land Seller has attached hereto
as Exhibit G the rent roll for the Community as of the end of July 2013 (“Rent Roll”).

 

5.            Inspections.

 

5.1           Procedure;
Indemnity.   Buyer, at its sole expense, shall have the right to conduct feasibility, environmental, engineering and physical
studies of the Property at any time during the period beginning on the Effective Date and expiring on the later of (i) the date
forty-

 

    	5

    	

    

  

five (45) days after the
Effective Date or (ii) the expiration of the Title Review Period (the “Due Diligence Period”); provided,
however, if the Due Diligence Items are not delivered on the Delivery Date or if the Title Documents and Survey are not delivered
by the Title Delivery Date, Buyer may, by written notice delivered prior to the conclusion of the original Due Diligence Period,
extend the Due Diligence Period for a period equal to the associated delay in delivery of such materials beyond the applicable
Delivery Date but in no event to a date more than seventy five (75) days after the Effective Date. Buyer and its duly authorized
agents or representatives shall be permitted to enter upon the Property at all reasonable times during the Due Diligence Period
in order to conduct Resident/Tenant interviews (Resident/Tenant interviews will be conducted after notice to and approval by Seller,
not to be unreasonably withheld, conditioned or delayed), engineering studies, soil tests and any other inspections and/or tests
that Buyer may deem necessary or advisable (collectively, the “Inspections”). Buyer agrees to promptly discharge
any liens that may be imposed against the Property as a result of Buyer’s Inspections and to defend, indemnify and hold Seller
harmless from all claims, suits, losses, costs, expenses (including without limitation court costs and attorneys’ fees),
liabilities, judgments and damages (collectively, “Claims”) incurred by Seller as a result of any Inspections
performed by Buyer, except for any Claims against Seller based upon any pre-existing conditions merely discovered by Buyer or any
obligations and liabilities of Seller.

 

5.2          Approval.

 

5.2.1           Buyer
shall have until the conclusion of the Due Diligence Period to approve or disapprove of the Inspections, Due Diligence Items and
the economic feasibility of the Property. If Buyer shall fail to deliver a written notice to Seller and Escrow Holder within the
Due Diligence Period approving Buyer’s due diligence in Buyer’s sole and absolute discretion, this Agreement shall
thereupon be automatically terminated, Buyer shall not be entitled to purchase the Property, Seller shall not be obligated to sell
the Property to Buyer and the Parties shall be relieved of any further obligation to each other with respect to the Property. Upon
termination, Escrow Holder shall, without any further action required from any Party, return all documents and funds, including
the Deposit, to the Party who deposited same and no further duties shall be required of Escrow Holder.

 

5.2.2           Notwithstanding
anything to the contrary contained herein, Buyer hereby agrees that in the event this Agreement is terminated for any reason, then
Buyer shall promptly and at its sole expense return to Seller all Due Diligence Items which have been delivered by Seller to Buyer
in connection with Buyer’s inspection of the Property within five (5) business days following the termination of this Agreement.

 

5.2.3           On
or before the expiration of the Due Diligence Period Buyer may deliver a written notice to Seller (the “Contracts Notice”)
identifying those service contracts, vending machine, telecommunications and other facilities leases, utility contracts, maintenance
contracts, management contracts, leasing contracts, equipment leases, brokerage and leasing commission agreements and other agreements
or rights related to the construction, ownership, use, operation, occupancy, maintenance, repair or development of each Property
(collectively, the “Service Contracts”) listed on Schedule 5.2.3 that Seller shall assign to Buyer and that
Buyer shall assume as of the Closing Date (such designated Service Contracts shall be collectively referred to herein as the “Assigned
Contracts”). All Assigned Contracts shall be

 

    	6

    	

    

  

listed on a Schedule to the
“Assignment Agreement” (as hereinafter defined). All Service Contracts that are not Assigned Contracts (the “Terminated
Contracts”) shall be terminated at Closing by Seller whereupon the Terminated Contracts shall not be assigned to, or
assumed by, Buyer. To the extent that any Terminated Contracts require payment of a penalty or premium for cancellation, Seller
shall be solely responsible for the payment of any such cancellation fees or penalties. Notwithstanding the foregoing, Buyer shall
be solely responsible for the payment of any such cancellation fees or penalties with respect to AT&T Wireless/ New Cingular
Wireless, Comcast, Pitney Bowes and Tyco/SymplexGrinnell. If Buyer fails to deliver the Contracts Notice on or before the expiration
of the Due Diligence Period, all Service Contracts will be Terminated Contracts.

 

6.            Escrow.

 

6.1           Opening
of Escrow. The sale of the Property shall be consummated through an escrow (“Escrow”) to be opened with
Escrow Holder within two (2) business days after the execution of this Agreement by Seller and Buyer. This Agreement shall constitute
the joint escrow instructions between the Parties, with such further consistent instructions as Escrow Holder shall require in
order to clarify its duties and responsibilities. If Escrow Holder shall require further Escrow instructions, Escrow Holder may
prepare such instructions on its usual form. Such further instructions shall, so long as not inconsistent with the terms of this
Agreement, be promptly signed by Buyer and Seller and returned to Escrow Holder within three (3) business days after receipt thereof.
In the event of any conflict between the terms and conditions of this Agreement and any further Escrow instructions, the terms
and conditions of this Agreement shall control.

 

6.2           Closing
Date. The consummation of the purchase and sale of the Property (the “Closing”) shall occur on the first
business day of a month following the date that is fifteen (15) days after the expiration of the Due Diligence Period; provided,
however, that so long as Buyer is using commercially reasonable efforts to procure the “Required Governmental Approvals”
(as hereinafter defined), Buyer shall have the right to extend the “Closing Date” (as hereinafter defined) until the
date five (5) business days after Buyer has procured all such Required Governmental Approvals, but in no event beyond the date
that is ninety (90) days after the expiration of the Due Diligence Period (the “Outside Closing Date”). In the
event Buyer terminates this Agreement due to a failure to procure the Required Governmental Approvals by the Outside Closing Date,
the Deposit shall be immediately and automatically paid over to Buyer without the need for any further action by either Party hereto.
The date upon which the Closing shall actually occur is referred to as the “Closing Date”.

 

6.3           Seller
Deliveries. No later than one (1) business day prior to the Closing Date (or such earlier date as is specified in any subsection
below), Seller shall deliver to Escrow Holder the following:

 

 6.3.1           One
(1) original Special Warranty Deed, in the form attached hereto as Exhibit B (the “Developed Land Deed”),
for the Developed Land, duly executed and acknowledged by Developed Land Seller and in proper form for recording, conveying fee
title to the Developed Land to Buyer, and one (1) original Special Warranty Deed in the same form (the “Undeveloped Land
Deed”, and together with the Developed Land Deed, individually and

 

    	7

    	

    

 

 

collectively, the “Deed”
or “Deeds”), for the Undeveloped Land, duly executed and acknowledged by Undeveloped Land Seller and in proper
form for recording, conveying fee title to the Undeveloped Land to Buyer;

 

6.3.2           Assignment
Agreement.   Two (2) originals of a Bill of Sale, Assignment and Assumption Agreement in the form attached hereto as Exhibit
C (the “Assignment Agreement”), duly executed by each Seller;

 

6.3.3           Transferor’s
Certification of Non-Foreign Status.   One (1) original certification as to Developed Land Seller’s non-foreign status
which complies with the provisions of Section 1445(b)(2) of the Internal Revenue Code of 1986, as amended, any regulations promulgated
thereunder (“Internal Revenue Code”), and any revenue procedures or other officially published announcements
of the Internal Revenue Service or the U.S. Department of the Treasury in connection therewith (“Developed Land Seller
FIRPTA”) and one (1) original certification as to Undeveloped Land Seller’s non-foreign status which complies with
the provisions of Section 1445(b)(2) of the Internal Revenue Code, and any revenue procedures or other officially published announcements
of the Internal Revenue Service or the U.S. Department of the Treasury in connection therewith (“Undeveloped Land Seller
FIRPTA”, and together with the Developed Land Seller FIRPTA, the “FIRPTAs”;

 

6.3.4           Residents/Tenant
Notice.   One (1) original letter, in a form approved by Buyer, duly executed by Developed Land Seller (and, to the extent requested
by Buyer, either counter-signed by Buyer or attaching an additional letter from Buyer), advising the Residents and Tenants of the
change in ownership of the Community (provided that the Parties agree that this notice shall be sent out at such earlier date as
is required by applicable law, to the extent required);

 

6.3.5           Rent
Roll; Delinquency Report.   At least three (3) business days prior to Closing, one (1) original updated Rent Roll and updated
Delinquency Report, each certified by Developed Land Seller as being true and accurate as of the Closing Date;

 

6.3.6           Title
Documents.   Such other documents and instruments, executed and properly acknowledged by either or both Sellers, as Title Company
may require from Seller in order to issue the Title Policy;

 

6.3.7           Purchase
Agreement Guaranty.   Two (2) originals of a Purchase Agreement Guaranty in the form attached hereto as Exhibit D (the
“Purchase Agreement Guaranty”), duly executed by Lytle Enterprises, LLC;

 

6.3.8           Non-Compete
Agreement.   Two (2) originals of a Non-Competition Agreement in the form attached hereto as Exhibit E (the “Non-Compete
Agreement”), duly executed by each Seller and the principals thereof;

 

6.3.9           Closing
Statement.   A customary Closing Statement prepared by Escrow Holder and approved by Seller showing the payment of the Purchase
Price by Buyer, all prorations and credits and the balance payable to Seller;

 

    	8

    	

    

  

6.3.10         Other
Documents.   Such other documents as may be required by this Agreement or as may reasonably be required to carry out the terms
and intent of this Agreement, provided that such documents shall not increase Seller’s liability or result in a material
expense to Seller.

 

6.4         Buyer
Deliveries.   No later than one (1) business day prior to the Closing Date, Buyer shall deliver to Escrow Holder the following:

 

6.4.1           Purchase
Price.   The balance of the Purchase Price, as adjusted by the prorations and adjustments provided for in this Agreement;

 

6.4.2           Assignment
Agreement.   Two (2) originals of the Assignment Agreement, duly executed by Buyer;

 

6.4.3           Non-Compete
Agreement.   Two (2) originals of the Non-Compete Agreement, duly executed by Buyer;

 

6.4.4           Title
Documents.   On or before the Closing Date, such other documents as the Title Company may require from Buyer in order to issue
the Title Policy;

 

6.4.5           Closing
Statement.   A customary Closing Statement prepared by Escrow Holder and approved by Buyer showing the payment of the Purchase
Price by Buyer, all prorations and credits and the balance payable to Seller; and

 

6.4.6           Other
Documents.   Such other documents as may be required by this Agreement or as may reasonably be required to carry out the terms
and intent of this Agreement, such as the Real Property Transfer Declaration (form TD 1000), provided that such documents shall
not increase Buyer’s liability or result in a material expense to Buyer.

 

6.5         Post-Closing
Deliverables.   Within one (1) business day after the Closing Date, Seller shall deliver to Buyer or make available to Buyer
at the Property the following:

 

6.5.1           Keys.   All keys to all buildings and other improvements located on the Property, combinations to any safes thereon, and security devices
therein in Seller’s possession;

 

6.5.2           Contracts.   The original Leases, Assigned Contracts, Permits, Plans and Warranties; and

 

6.5.3           Records.   All records and files relating to the management or operation of the Property that are in Seller’s possession, including,
without limitation, all Resident and Tenant files (including correspondence), employee files, property tax bills, and any existing
calculations used to prepare statements of rental increases under the Leases.

 

6.6         Seller’s
Costs.   Seller shall pay the following:

 

6.6.1           One-half
(1⁄2) of Escrow Holder’s fee, costs and expenses;

 

    	9

    	

    

  

6.6.2           All
realty transfer, recordation and documentary fees and taxes imposed on the Deeds, the conveyance of the Property or the transaction
contemplated by this Agreement (including any sales or other tax related to the transfer of the Personal Property);

 

6.6.3           The
premium cost for the Title Policy (including extended coverage) for the Property;

 

6.6.4           All
costs incurred in connection with the prepayment, satisfaction or reconveyance of any loan encumbering the Property or any portion
thereof, including, without limitation, all prepayment, reconveyance and recording fees, penalties or charges, and any legal fees
associated therewith, and any other document(s) required by the Title Company in order to release Title Defects or New Title Defects;

 

6.6.5           All
costs associated with the cure of any Title Defect and/or New Title Defect identified in Section 3.2 above that Seller
has agreed to remove (collectively, “Curative Endorsements”);

 

6.6.6           All
real estate commissions due in connection with this transaction pursuant to Section 22 below;

 

6.6.7           Seller’s
attorneys’ fees; and

 

6.6.8           All
other costs customarily borne by sellers of real property in the City and County of Denver, Colorado.

 

The provisions of this Section 6.6
shall survive the termination of this Agreement.

 

6.7         Buyer’s
Costs.   Buyer shall pay the following:

 

6.7.1           One-half
(1⁄2) of Escrow Holder’s fees, costs and expenses;

 

6.7.2           The
cost of the Survey and the Endorsements (other than the Curative Endorsements);

 

6.7.3           Buyer
attorneys’ fees; and

 

6.7.4           All
other costs customarily borne by buyers of real property in the City and County of Denver, Colorado.

 

The provisions of this Section 6.7
shall survive the termination of this Agreement.

 

6.8          Prorations.

 

6.8.1           Items
to Be Prorated.   The following shall be prorated between Seller and Buyer as of the Closing Date with Buyer being deemed the
owner of the Property as of the Closing Date and with Buyer receiving credit for or charged with the entire day of the Closing.
Except as hereinafter expressly provided, all prorations shall be done on the basis of the actual number of days in the year in
which Closing occurs for the actual number of days elapsed

 

    	10

    	

    

  

to the Closing Date or the
actual number of days in the month in which the Closing occurs and the actual number of days elapsed in such month to the Closing
Date, as applicable:

 

(a)          Taxes
and Assessments.   Seller shall pay, on or prior to Closing, any and all delinquent real estate and personal property taxes and
assessments with respect to the Property. General real estate and personal property taxes and assessments that are due or accrue
during the year in which the Closing occurs shall be prorated as of the Closing Date; provided, however, that Seller shall
pay on or before Closing the full amount of any bonds or assessments against the Property, including interest payable therewith,
and including any bonds or assessments that may be payable after the Closing Date that are a result of or relate to the construction
or operation of any Improvements or any public improvements that serve only the Property. If after the Closing there is any retroactive
increase in the real or personal property taxes or assessments imposed on the Property: (i) if such increase relates to the
tax year in which the Closing occurred, then such increase shall be prorated by Seller and Buyer on a per diem basis based on their
respective periods of ownership during the period to which such increase applies, (ii) if such increase relates to any tax
year subsequent to the tax year which the Closing occurred, then such increase shall be the obligation of Buyer, and (iii) if
such increase relates to any tax year prior to the tax year in which the Closing occurred, then such increase shall be the obligation
of Seller. The prorations shall be based upon the most recently issued tax bill for the Property. If the most recent tax bill is
not for the current tax year, then the Parties shall reprorate within ninety (90) days of the receipt of the tax bill for the current
tax year.

 

(b)          Rents.   Buyer will receive a credit at Closing for all rents collected by Developed Land Seller prior to the Closing Date and allocable
to the period from and after the Closing Date based upon the actual number of days in the month. No credit shall be given Developed
Land Seller for accrued and unpaid rent or any other non-current sums due from Residents or Tenants until these sums are paid,
and Developed Land Seller shall retain the right to collect any such rent provided Developed Land Seller does not sue to evict
any tenants or terminate any Leases. Buyer shall cooperate with Developed Land Seller after the Closing Date to collect any rent
under the Leases which has accrued as of the Closing Date; provided, however, Buyer shall not be obligated to sue any Residents
or Tenants or exercise any legal remedies under the Leases or to incur any expense over and above its own regular collection expenses.
All payments collected from Residents and Tenants after the Closing Date shall first be applied to the month in which the Closing
occurs, then to any rent due to Buyer for the period after the Closing Date through the month in which such payment was made, and
finally to any rent due to Developed Land Seller for the period prior to Closing Date.

 

(c)          Operating
Expenses.   All operating expenses (including all charges under the Assigned Contracts and agreements assumed by Buyer) shall
be prorated, and as to each service provider, operating expenses payable or paid to such service provider in respect to the billing
period of such service provider in which the Closing occurs (the “Current Billing Period”), shall be prorated
on a per diem basis based upon the number of days in the Current Billing Period prior to the Close Date and the number of days
in the Current Billing Period from and after the Closing Date, and assuming that all charges are incurred uniformly during the
Current Billing Period. If actual bills for the Current Billing Period are unavailable as of the Closing Date, then such proration
shall be made on an estimated basis based upon the most recently issued bills, subject to readjustment upon receipt of actual bills.

 

    	11

    	

    

  

(d)          Security
Deposits; Prepaid Rents.   All deposits, including, without limitation, all prepaid rentals, damage, and other tenant charges
and security deposits (including any portion thereof which may be designated as prepaid rent) under Leases, if and to the extent
that such deposits are in Developed Land Seller’s actual possession or control and have not been otherwise applied by Developed
Land Seller to any obligations of any Residents or Tenants under the Leases and any interest earned thereon which by law or the
terms of the Leases could be required to be paid or refunded to Residents or Tenants, shall be assigned to Buyer and either delivered
to Buyer or, at Buyer’s option, credited to Buyer against the Purchase Price, and upon the Closing Date, Buyer shall assume
full responsibility for all security deposits to be refunded to the Residents and Tenants under the Leases (to the extent the same
are required to be refunded by the terms of such Leases or applicable). To the extent that any free rent, abatements or other unexpired
concessions under any Leases (collectively, “Abatements”) apply to any period after the Closing Date, Buyer
shall be entitled to a credit against the Purchase Price for the amount of any such Abatements based on actual rents as set forth
in the Rent Roll. In the event that any security deposits are in a form other than cash (the instrument constituting such security
deposits shall be known as, the “Non-Cash Security Deposits”), Developed Land Seller will, at Closing, cause
Buyer to be named as beneficiary under the Non-Cash Security Deposits. Buyer will not receive a credit against the Purchase Price
for such Non-Cash Security Deposits. In the event that Buyer cannot be named the beneficiary under the Non-Cash Security Deposits
as of the Closing Date, a cash escrow equal to the amount of the Non-Cash Security Deposit will be established at the Closing until
the Non-Cash Security Deposits are reissued in Buyer’s name. Prior to such time of reissue, Buyer shall be entitled to draw
from such cash escrow in the event the terms of the relevant lease entitle Buyer, as landlord, to draw on the Non-Cash Security
Deposit.

 

(e)          Utility
Charges.   Utility charges for which Seller is liable, if any, shall be prorated at Closing on the basis of the most recent meter
reading occurring prior to Closing (dated not more than fifteen (15) days prior to the Closing Date) or, if unmetered, on the basis
of a current bill for each such utility.

 

(f)          Employee
Costs.   Except for “Accrued Employee Benefits” (as hereinafter defined), for which Buyer shall receive a credit
at Closing, there shall be no adjustment for wages, vacation pay, pension and welfare benefits and other fringe benefits of all
persons employed by Developed Land Seller or Property Manager; it being the intent of the parties that Buyer shall have no liability
or obligation with respect to any employee of Seller or the Property Manager prior to Closing, except as expressly set forth in
Section 9.2. With respect to only those employees who are to be-hired by Buyer, Buyer shall provide a credit to Developed Land
Seller at Closing for such employees’ benefits which relate to the period from and after the Closing Date through the end
of the calendar month in which Closing occurs, which benefits are to be maintained by Developed Land Seller in accordance with
Section 9,.2 hereof.

 

(g)          Leasing
Costs.   Developed Land Seller shall pay all tenant improvement allowances and leasing commissions with respect to premises leased
by the Residents and Tenants pursuant to the Leases in effect prior to the Closing Date, to the extent that such tenant improvement
allowances and leasing commissions are unpaid as of the Closing Date.

 

    	12

    	

    

  

6.8.2           Calculation;
Reproration.   Escrow Holder shall prepare and deliver to Buyer no later than three (3) business days prior to the Closing Date
an estimated closing statement which shall set forth all costs payable, and the prorations and credits provided for in this Agreement.
Any item which cannot be finally prorated because of the unavailability of information shall be tentatively prorated on the basis
of the best data then available and adjusted when the information is available in accordance with this subsection. The Parties
shall attempt in good faith to reconcile any differences or disputes regarding such estimated closing statement no later than one
(1) business day before the Closing Date. The estimated closing statement as adjusted as aforesaid and approved in writing by the
Parties (which shall not be withheld if prepared in accordance with this Agreement) shall be referred to herein as the “Closing
Statement”. If the prorations and credits made under the Closing Statement shall prove to be incorrect or incomplete
for any reason, then either Party shall be entitled to an adjustment to correct the same; provided, however, that any adjustment
shall be made, if at all, within ninety (90) days after the Closing Date, and if a Party fails to request an adjustment to the
Closing Statement by a written notice delivered to the other Party within the applicable period set forth above (such notice to
specify in reasonable detail the items within the Closing Statement that such Party desires to adjust and the reasons for such
adjustment), then the prorations and credits set forth in the Closing Statement shall be binding and conclusive against such Party.

 

6.8.3           Items
Not Prorated.   Seller and Buyer agree that (a) on the Closing Date, the Property will not be subject to any financing arranged
by Seller; (b) none of the insurance policies relating to the Property will be assigned to Buyer and Buyer shall be responsible
for arranging for its own insurance as of the Closing Date; and (c) utilities, including telephone, electricity, water and
gas, shall be read on the Closing Date and Buyer shall be responsible for all the necessary actions needed to arrange for utilities
to be transferred to the name of Buyer on the Closing Date, including the posting of any required deposits and Seller shall be
entitled to recover and retain from the providers of such utilities any refunds or overpayments to the extent applicable to the
period prior to the Closing Date, and any utility deposits which it or its predecessors may have posted. Accordingly, there will
be no prorations for debt service, insurance or utilities. In the event a meter reading is unavailable for any particular utility,
such utility shall be prorated in the manner provided in Section 6.8.2 above.

 

6.8.4           Indemnification.   Buyer and Seller shall each indemnify, protect, defend and hold the other harmless from and against any claim in any way arising
from the matters for which the other receives a credit or otherwise assumes responsibility pursuant to this Section 6.8.

 

6.8.5           Survival.   This Section 6.8 shall survive the Closing.

 

6.9         Duties
of Escrow Holder.   Escrow Holder’s Obligations at Closing. Escrow Holder shall undertake the following at or promptly
after Closing:

 

6.9.1           If
necessary, Escrow Holder is authorized and instructed to insert the Closing Date as the effective date of any documents conveying
interests herein or which are to become operative as of the Closing Date;

 

    	13

    	

    

 

 

6.9.2           Cause
the Deeds and any other recordable instruments which the Parties so direct to be recorded in the Official Records of the Recorder
of the County in which the Property is located. If permitted by applicable law, Escrow Holder is hereby instructed not to affix
the amount of the documentary transfer tax on the face of the Deeds, but to pay on the basis of a separate affidavit of the applicable
Seller not made a part of the public record;

 

6.9.3           Cause
each non-recorded document to be delivered to the Party acquiring rights thereunder, or for whose benefit such document was obtained,
unless there are sufficient fully executed counterparts so that each Party executing the same can receive its own fully executed
counterpart;

 

6.9.4           Deliver
the Title Policy to Buyer as soon as practicable; and

 

6.9.5           Deliver
to Seller the Purchase Price, as adjusted by the prorations and adjustments provided for in this Agreement, and such other funds,
if any, as may be due to Seller by reason of credits under this Agreement.

 

6.9.6           Comply
with all applicable federal, state and local reporting and withholding requirements relating to the close of the transactions contemplated
herein. Without limiting the generality of the foregoing, to the extent the transactions contemplated by this Agreement involve
a real estate transaction within the purview of Section 6045 of the Internal Revenue Code, Escrow Holder shall have sole responsibility
to comply with the requirements of Section 6045 of the Internal Revenue Code (and any similar requirements imposed by state or
local law). For purposes hereof, Developed Land Seller’s and Undeveloped Land Seller’s tax identification numbers are,
respectively: 91-1728584 and 20-4460522. Escrow Holder shall defend, indemnify and hold Buyer, Seller and their counsel free and
harmless from and against any and all liability, claims, demands, damages and costs, including reasonable attorneys’ fees
and other litigation expenses, arising or resulting from the failure or refusal of Escrow Holder to comply with such reporting
requirements.

 

7.            Seller
Representations, Warranties, and Covenants.

 

7.1          Representations
and Warranties.   Each Seller, as indicated, hereby represents and warrants as of the date hereof and as of the Closing Date
as follows:

 

7.1.1           Organization
and Authorization.   Each Seller is a limited liability company, duly formed and validly existing under the laws of the State
of Washington and, to the extent required under applicable law, authorized to do business in the State of Colorado. Each Seller
has full power and authority to enter into this Agreement, to perform their respective obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and all documents contemplated
hereby by each Seller have been duly and validly authorized by all necessary action on the part of the each Seller and all required
consents and approvals have been duly obtained and will not result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, agreement or instrument to which either Seller is a Party or otherwise bound. This Agreement is
a legal, valid and binding obligation of each Seller, enforceable against each Seller in accordance

 

    	14

    	

    

  

with its terms, subject to
the effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting the rights
of creditors generally.

 

7.1.2           No
Conflicting Agreements.   The execution and delivery by each Seller of, and the performance of and compliance by each Seller
with, the terms and provisions of this Agreement, do not (a) conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, either Seller’s organizational documents, or any other agreement or instrument
to which either Seller is a Party or by which all or any part of the Property is bound, (b) violate any restriction, requirement,
covenant or condition to which all or any part of the Property is bound, (c) constitute a violation of any applicable code, resolution,
law, statute, regulation, ordinance or rule applicable to either Seller or the Property, (d) constitute a violation of any judgment,
decree or order applicable to either Seller or specifically applicable to the Property, or (e) require the consent, waiver or approval
of any third Party.

 

7.1.3           Title.   Each Seller has good, marketable and indefeasible title to its portion of the Property, subject to the Permitted Exceptions. There
are no outstanding rights of first refusal, rights of first offer, rights of reverter, purchase options or other similar rights
or options relating to the Property or any interest therein. There are no unrecorded or undisclosed documents or other matters
which affect title to the Property. Subject to the Leases, each Seller has enjoyed the continuous and uninterrupted quiet possession,
use and operation of its portion of the Property, without material complaint or objection by any person.

 

7.1.4           FIRPTA.   Each Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code.

 

7.1.5           Employees.

 

 (a)          Following
the Closing Date, Buyer shall have no obligation to employ or continue to employ any individual employed by either Seller or Property
Manager or either of their respective affiliates in connection with the Property. All of the “Community Employees”
(as hereinafter defined) are at-will, common law employees of Developed Land Seller.

 

 (b)          (i)
Neither Seller nor the Property Manager has agreed to recognize any union, works council or other collective bargaining unit, nor
has any union, works council or other collective bargaining unit been certified as representing any “Community Employees”
(as hereinafter defined), and (ii) to the knowledge of each Seller, there is no organizational effort being made or threatened
by or on behalf of any labor union or works council with respect to Community Employees. There is no labor strike, slowdown, work
stoppage, material grievance or lockout actually pending or, to the knowledge of each Seller, threatened against either Seller
or the Property Manager.

 

 (c)          As
of the date hereof there is no filed complaint or lawsuit filed by or with respect to any Community Employee pending against either
Seller or the Property Manager with respect to violation of any federal, state or local law relating to employment matters.

 

    	15

    	

    

  

7.1.6           Litigation.   Except as set forth on Schedule 7.1.6 attached hereto (i) there are no actions or suits, or any proceedings or investigations
by any governmental agency or regulatory body pending against either of the Sellers or the Property; (ii) no HIPDB adverse action
reports have been issued to either of the Sellers or the Community; (iii) neither Seller has received notice of any threatened
actions, suits, proceedings or investigations against either of the Sellers or the Community at law or in equity, or before any
governmental board, agency or authority which, if determined adversely, would materially and adversely affect the Community or
title to the Community (or any part thereof), the right to operate the Community as presently operated; (iv) there are no unsatisfied
or outstanding judgments against either of the Sellers or the Community; (v) there is no labor dispute materially and adversely
affecting the operation or business conducted by either of the Sellers or the Community; and (vi) neither Seller has knowledge
of any facts or circumstances which might reasonably form the basis for any such action, suit or proceeding.

 

7.1.7           Compliance
with Laws and Environmental Conditions.   Except as expressly set forth in the Due Diligence Items, to Seller’s knowledge
the Property is not in violation in any material respect of any laws, orders, rules or regulations, ordinances or codes of any
kind or nature whatsoever (collectively, “Laws”) including, without limitation, (i) laws relating to “Hazardous
Materials” (as hereinafter defined) (“Environmental Laws”) (ii) laws relating to the Property or the ownership,
operation or licensure thereof (including, without limitation, building, fire, health, occupational safety and health, zoning and
land use, planning and environmental laws, orders, rules and regulations); (iii) any covenants, conditions, restrictions or agreements
affecting or relating to the ownership, use or occupancy of the Property; or (iii) any order, writ, regulation or decree relating
to any matter referred to in (i) or (ii) above. With respect to the Property, except to the extent set forth in the Due Diligence
Items, if at all: (a) to Seller’s knowledge, there have been no releases or threatened releases of Hazardous Materials on,
from or under the Property during either Seller’s ownership of its portion of the Property, except in compliance with all
Environmental Laws; (b) no Hazardous Materials have been or are being used, generated, stored or disposed of at the Property during
either Seller’s period of ownership of its portion of the Property, except in compliance with all Environmental Laws; (c)
intentionally deleted; (d) no permit is or has been required from the Environmental Protection Agency or any similar agency or
department of any state or local government for the use or maintenance of any Improvements; (e) to Seller’s knowledge, underground
storage tanks on or under the Property, if any, have been and currently are being operated in compliance with all applicable Environmental
Laws; (f) any closure, abandonment in place or removal of an underground storage tank on or from the Property was performed, to
Seller’s knowledge, in compliance with applicable Environmental Laws, and any such tank had no release contaminating the
Property or, if there had been a release, the release was remediated in compliance with applicable Environmental Laws to the satisfaction
of regulatory authorities; and (g) no summons, citation or inquiry has been made by any such environmental unit, body or agency
or a third party demanding any right of recovery for payment or reimbursement for costs incurred under CERCLA or any other Environmental
Laws, and the Property is not subject to the lien of any such agency. Developed Land Seller has been informed by a building inspector
that there may be asbestos in the building. Neither Seller makes any representations and provides no warranties whatsoever with
respect any potential asbestos at the Property. “Disposal” and “release” shall have the meanings
set forth in CERCLA. For purposes of this Agreement, “Hazardous Materials” are substances defined as: “toxic
substances”, “toxic materials”,

 

    	16

    	

    

 

 

“hazardous waste”,
“hazardous substances”, “pollutants”, or “contaminants” as those terms are defined in the Resource,
Conservation and Recovery Act of 1976, as amended (42 U.S.C. § 6901, et seq.), the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. § 1801, et seq.), the Toxic Substances Control Act
of 1976, as amended (15 U.S.C. § 2601, et seq.), the Clean Air Act, as amended (42 U.S.C. § 1251,
et seq.) and any other federal, state or local law, statute, ordinance, rule, regulation, code, order, approval, policy
and authorization relating to health, safety or the environment; asbestos or asbestos-containing materials; lead or lead-containing
materials; oils; petroleum-derived compounds; pesticides; or polychlorinated biphenyls. During each Seller’s period of ownership
of its portion of the Property, no part of the Property was used by either of the Sellers, and to Seller’s knowledge, no
part of the Property has been used, either during or prior to Seller’s ownership of the Property, or by any other person
or entity, for the storage, manufacture or disposal of Hazardous Materials, except for the use and storage of routine cleaning
and other supplies used in the normal operation of the Community in accordance with applicable laws and as may be disclosed in
the Due Diligence Items.

 

7.1.8           Unpaid
Claims.   There are no unpaid bills, claims, or liens in connection with any construction or repair of the Property except for
those that will be paid in the ordinary course of business prior to the Closing Date or which have been bonded over or the payment
of which has otherwise been adequately provided for to the satisfaction of Buyer.

 

7.1.9           Intentionally
Deleted.

 

7.1.10         Zoning.   To Seller’s knowledge, the zoning of the Property permits the current building and use of the Property.

 

7.1.11         Leases.   As of the date of this Agreement there are no Residency Agreements or other Leases other than those described on the Rent Roll.
To Seller’s knowledge, the Rent Roll is true, accurate and complete in all material respects as of the date hereof. Except
as otherwise specifically set forth in the Rent Roll:

 

 (a)          to
Seller’s knowledge, the Leases are in full force and effect and none of them has been modified, amended or extended;

 

 (b)          excluding
notices of late rent payments, Seller has neither sent written notice to any Resident or Tenant of the Community under a Lease,
nor received any written notice from any such Resident or Tenant, claiming that such Resident or Tenant, or Developed Land Seller,
as the case may be, is in default, in any material respect which default remains uncured;

 

 (c)          there
are no Security Deposits or other deposits under any Leases other than those set forth in the Rent Roll; and

 

 (d)          no
leasing commission shall be due for any period subsequent to the Closing other than for lease extensions, expansions or renewals
exercised after the Closing, which commissions shall be paid by Buyer.

 

    	17

    	

    

  

7.1.12         Condemnation
Proceedings.   There are no presently pending or, to either Seller’s knowledge, contemplated proceedings to condemn or
assess the Property or any part of it, or any utilities, sewers, roadways or other public improvements serving the Property.

 

7.1.13         Utilities.   To Seller’s knowledge, all water, sewer, gas, electric, telephone and drainage facilities, and all other utilities required
by law or by the normal operation of the Property are connected to the Property and are adequate to service the Property in its
present use and normal usage by the Residents, Tenants and occupants of the Property. There is no pending or, to the knowledge
of Seller, threatened governmental or third-party proceeding directly involving either Seller which would impair or result in the
termination of such utility availability.

 

7.1.14         Permits.   To Seller’s knowledge, each Seller has all material licenses, permits (including, without limitation, all building permits,
occupancy permits and facility licenses), easements and rights-of-way which are required in order to continue the present use of
the Property and ensure adequate vehicular and pedestrian ingress and egress to the Property. To Seller’s knowledge, except
as otherwise disclosed to Buyer in writing, each Seller holds all material government authorizations, if any, necessary for the
operation of the Property in accordance with its current uses.

 

7.1.15         Service
Contracts.   Except for the Leases set forth on the Rent Roll (and those Leases that may be subsequently entered into pursuant
to Section 7.3.3 below and the Service Contracts set forth on Schedule 5.2.3, neither Seller has entered into
any agreements, written or oral, relating to the management, leasing, operation, maintenance and/or improvement of the Property
or any portion thereof that would bind Buyer after the Closing Date. Neither Seller has delivered or received any notice alleging
any default in the performance or observance of any of the covenants, conditions or obligations to be kept, observed or performed
under any of the Service Contracts which alleged default remains uncured. Seller has delivered or made available to Buyer a true,
correct and complete copy of each of the Service Contracts (including all amendments thereto).

 

7.1.16         Personal
Property.    Developed Land Seller has good title to all the Personal Property and the execution and delivery
to Buyer of the Assignment Agreement shall vest good title to all of the Personal Property in Buyer, free and clear of liens,
encumbrances and adverse claims.

 

7.1.17         Affordable
Housing Units.   To Seller’s knowledge, the Property is not subject to any restriction or covenant requiring that any units
in the Facility be leased or reserved for lease as an affordable housing unit or for low or moderate income residents.

 

7.1.18         Rights.   Neither Seller has, except by operation of law, sold, transferred, conveyed, or entered into any agreement regarding “air
rights”, “excess floor area ratio”, or other rights or restrictions relating to the Property except as may otherwise
be disclosed as an exception set forth in the Title Policy for the Property.

 

7.1.19         Due
Diligence Items.   The Due Diligence Items provided to Buyer do not contain, to Seller’s knowledge, any material inaccuracies.
Seller has provided or

 

    	18

    	

    

  

made available to Buyer all
of the Due Diligence Items in its possession or control and has not intentionally hidden from Buyer or destroyed any documents
which Seller reasonably believes would be material to Buyer’s decision to waive the Due Diligence contingency set forth in
Section 5 above.

 

7.1.20         Patriot
Act Compliance.   To the extent applicable to each Seller, each Seller has complied with the International Money Laundering Abatement
and Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) and the regulations promulgated
thereunder, and the rules and regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”), to the extent such Laws are applicable to either Seller. Neither Seller is included on the List of
Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered under
the laws of, (A) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of
the Patriot Act as warranting special measures due to money laundering concerns or (B) any foreign country that has been designated
as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization,
such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation
the United States representative to the group or organization continues to concur.

 

7.1.21         Completion
Obligations.   On the Closing Date, there will be no written or oral contract made by either Seller for any improvements, including
capital improvements, to the spaces covered by the Leases, to the Property, or for offsite improvements related to the Property,
which have not been fully completed and paid for or a credit given to Buyer at Closing in the amount sufficient to complete the
improvement.

 

7.1.22         Certificate
of Need; Operator License.   To Seller’s knowledge, a certificate of need (C.O.N.) is not required in connection with the
current operation of any building or any other structure or business located on the Land; however, a License is required to operate
the Community, and Developed Land Seller will provide a copy of an unexpired License to Buyer by the Delivery Date.

 

7.1.23         No
Redemption.   Upon conveyance of the Property to Buyer, neither of the Sellers, nor anyone claiming by, through or under them
shall have any right of redemption in the Property, and each Seller and all such persons or entities will be estopped from asserting
any claim to or right of redemption against the Property.

 

7.1.24         Parties
in Possession.   There are no parties in possession of the Property or any portion thereof other than each Seller and the Residents
and any tenants under any Leases.

 

7.1.25         Financial
Statements.   Seller has delivered to Buyer copies of the financial statements of each Seller and the Community that, to Seller’s
knowledge, are true, correct and complete in all material respects, on a consolidated basis to the extent applicable, as of and
for the fiscal years ended December 31, 2010, 2011, 2012 and 2013 (through June) (the “Financial Statements”).
To Seller’s knowledge, the Financial Statements fairly present the

 

    	19

    	

    

  

financial position of each
Seller and the Property as of the respective dates and the results of operations for the periods then ended in conformance with
Seller’s accounting practices applied on a basis consistent with prior periods. To Seller’s knowledge, no material
adverse change has occurred since the furnishing of the Financial Statements. To Seller’s knowledge, the Financial Statements
do not contain any untrue statement or omission of a material fact and are not misleading in any material respect.

 

7.1.26         Licenses.   As of the date hereof, the governmental permits, licenses and approvals (including the License) listed on Schedule 7.1.26
are held by Developed Land Seller or Property Manager (collectively, the “Current Permits”). Developed Land
Seller has not received (either directly or delivered to Developed Land Seller by the Property Manager) since January 1, 2009 any
written notice from a governmental authority (including without limitation, the Colorado Department of Public Health and Environment
and the Colorado Department of Public Safety) alleging any violation under any Current Permits that has not been previously remedied
or stating any intention to cancel, terminate, suspend, or not renew any of the Current Permits. There are no open or outstanding
plans of correction with respect to the Property.

 

7.1.27         Health
Regulatory Compliance.

 

 (a)          To
Seller’s knowledge, no Resident fees are paid to Developed Land Seller by Medicare or Medicaid reimbursement. Developed Land
Seller makes no representation or warranty herein with respect to any governmental assistance or third party payor program that
may make any payment to any resident or such resident’s family (and not to Developed Land Seller). To Seller’s knowledge,
Developed Land Seller has not received written notice that any action, proceeding, or investigation in connection with Medicare,
Medicaid or other public or private third-party payor or other programs is pending or threatened against Developed Land Seller
or any of Seller’s Affiliates in connection with the Community.

 

 (b)          To
Seller’s knowledge, Developed Land Seller has complied in all material respects with all applicable security and privacy
standards regarding protected health information under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)
and, since January 1, 2001, with all applicable regulations promulgated under HIPAA and all applicable state privacy laws.

 

 (c)          Sellers
have not applied for or received a waiver from any applicable regulations relating to the Property, the Community or its operations.
Seller maintains all insurance, including, without limitation, professional liability insurance required in connection with all
Licenses for the Property.

 

7.2           Definition
of “Seller’s knowledge”; Survival.   As used in this Agreement, the phrases “Seller’s knowledge”
or “to the knowledge of Seller” means the actual knowledge of Charles S. Lytle and Jill Ashton; provided that within
fifteen (15) days of the Effective Date, Charles S. Lytle or Jill Ashton shall consult with and discuss the representations and
warranties set forth in Section 7.1 with the General Manager and any information communicated to Charles S. Lytle or Jill Ashton
by the General Manager during such consultation which renders any of the representations or warranties to be materially inaccurate
shall be in turn communicated to

 

    	20

    	

    

  

Buyer in writing prior to
the expiration of such fifteen (15) day period and the representation and warranty shall be deemed modified to reflect the information
communicated to Buyer by Seller or the General Manager. The foregoing representations and warranties of each Seller are made by
each Seller, as appropriate, as of the date hereof and again as of the Closing Date, shall survive the Closing for a period of
eighteen (18) months and shall not be merged as of the Closing Date hereunder.

 

7.3          Covenants
of Seller.   Each Seller, as applicable, hereby covenants from and after the Effective Date and through the Closing Date as follows:

 

7.3.1           Seller
Insurance.   To cause to be in force professional liability insurance as required by applicable regulations, fire and extended
coverage insurance upon the Property, and public liability insurance with respect to damage or injury to persons or property occurring
on the Property in at least such amounts, and with the same deductibles, as are maintained by Seller on the date hereof.

 

7.3.2           Maintenance.   To maintain any building constituting an Improvement on the Property in the same physical condition as it was at the date of Buyer’s
inspection, reasonable wear and tear excepted, and to perform all normal maintenance from and after the Effective Date in the same
fashion as prior to the Effective Date.

 

7.3.3           Leasing.   To not enter into any new Non-Residency Lease with respect to the Property, without Buyer’s prior written consent. The exercise
of a mandatory renewal option, shall not be considered a new Lease. Developed Land Seller shall not, subsequent to the expiration
of the Due Diligence Period, without Buyer’s prior written consent, (a) enter into any new Residency Agreement for a unit
with a first-time tenant unless the Residency Agreement is for a period of no more than one year and has an effective rental rate
consistent with Developed Land Seller’s current practice; or (b) enter into, amend, renew or extend any Residency Agreement
with an existing unless the residency agreement is for a period of not more than one year and has an effective rental rate for
the amended, renewal or extension term consistent with Developed Land Seller’s current practice; (c) terminate any Residency
Agreement except by reason of a default by the Resident thereunder or by reason of the provisions contained in the Residency Agreement,
or (d) enter into, modify or amend any Leases that are not Residency Agreements.

 

7.3.4           Liens.   To not sell, assign, or convey any right, title, or interest whatsoever in or to the Property, or create or permit to attach any
lien, security interest, easement, encumbrance, charge, or condition affecting the Property (other than the Permitted Exceptions).

 

7.3.5           Agreements.   To not, without Buyer’s written approval (a) amend, modify, renew, extend or waive any right under any Service Contract,
or (b) enter into any service, operating or maintenance agreement affecting the Property that would survive the Closing except
for such agreements that may be cancelled or terminated by Seller, without penalty, by notice of thirty (30) days or less.

 

    	21

    	

    

  

7.3.6           Obligations.   To fully and timely comply in all material respects with all obligations to be performed by it under all of the Leases, Service
Contracts, Permits, Warranties licenses, approvals and laws, regulations and orders applicable to the Property.

 

7.3.7           Notices.   To provide Buyer with copies of (a) any default letters sent to or received from Residents or Tenants, and (b) any copies
of correspondence received from a Resident or Tenant that it is discontinuing operations at the Property or seeking to re-negotiate
its lease, and (c) notices of bankruptcy filings received with respect to any Resident or Tenant.

 

7.3.8           Operations.   To operate the Property from and after the date hereof in substantially the same manner as prior thereto.

 

7.3.9           Terminated
Contracts.   To terminate the Terminated Contracts as of the Closing Date.

 

7.3.10         Required
Government Approvals.   Developed Land Seller shall cooperate with and do all things reasonably practicable to assist Buyer in
its efforts to obtain all of the regulatory approvals and licenses of Governmental Authorities necessary to operate the Community
(collectively, the “Required Governmental Approvals”); provided, however, that, neither Developed Land Seller
nor Buyer, their affiliates shall be required to make payments or incur any other liability to pursue or secure any such Required
Governmental Approvals beyond any required application fees incurred in connection with obtaining such Required Governmental Approvals
(which application fees shall be Buyer’s responsibility). Developed Land Seller further agrees to assist Buyer in any post-Closing
transition with respect to the Required Government Approvals for a period up to sixty (60) days after the Closing Date subject
to the same foregoing limitations.

 

8.            Buyer
Representations and Warranties.   Buyer hereby represents and warrants to Seller as of the date hereof that:

 

8.1           Organization
and Authorization.   Buyer is a corporation duly organized and validly existing under the laws of the State of Arizona. Buyer
has full power and authority to enter into this Agreement, to perform this Agreement and to consummate the transactions contemplated
hereby. This Agreement is a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting
the rights of creditors generally.

 

8.2           No
Conflicting Agreements.   The execution, delivery and performance of this Agreement and all documents contemplated hereby by
Buyer have been duly and validly authorized by all necessary action on the part of Buyer and all required consents and approvals
have been duly obtained and will not result in a breach of any of the terms or provisions of, or constitute a default under, any
indenture, agreement or instrument to which Buyer is a Party or otherwise bound. To Buyer’s knowledge, Buyer’s acquisition
of the Property will not cause any violation by Buyer or its members of the requirements of ERISA.

 

    	22

    	

    

  

8.3           Patriot
Act Compliance.   To the extent applicable to Buyer, Buyer has complied in all material respects with the Patriot Act and the
regulations promulgated thereunder, and the rules and regulations administered by OFAC, to the extent such Laws are applicable
to Buyer. Buyer is not included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is
a resident in, or organized or chartered under the laws of (A) a jurisdiction that has been designated by the U.S. Secretary
of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns, or
(B) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or
procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which
the United States is a member and with which designation the United States representative to the group or organization continues
to concur.

 

9.           Conditions
Precedent to Closing; Status of Employees at Closing.

 

9.1          Conditions
Precedent.   The obligation of Buyer to purchase the Property pursuant to this Agreement shall, at the option of Buyer, be subject
to the fulfillment, on or before the Closing Date, of all of the conditions set forth in this Section 9.1 (“Buyer’s
Closing Conditions”), any or all of which may be waived by Buyer in its sole and absolute discretion:

 

9.1.1           Representations,
Warranties and Covenants.   All of the representations and warranties of each Seller set forth in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the Closing Date, and each Seller shall have fully complied
with all of its duties and obligations contained in this Agreement.

 

9.1.2           Title.   There shall be no change in the matters reflected in the Title Documents, and there shall not exist any encumbrance or Title Defect
affecting the Property not described in the Title Documents except for the Permitted Exceptions or matters to be satisfied as of
the Closing Date.

 

9.1.3           Title
Policy.   On the Closing Date, the Title Company shall be unconditionally obligated and prepared, subject to the payment of the
applicable title insurance premium and other related charges, to issue to Buyer the Title Policy in accordance with the requirements
of Section 3.2.

 

9.1.4           Management
Agreements and Employees.   Any management agreement or leasing agreement affecting the Community shall be terminated by Developed
Land Seller and any and all termination fees incurred as a result thereof shall be the sole obligation of Developed Land Seller.
Buyer has no obligation to hire any existing employees (including any employees of Developed Land Seller or Property Manager) at
the Community.

 

9.1.5           Zoning.   There shall be no change in the zoning classification or the zoning ordinances or regulations affecting the Property from that
existing as of the conclusion of the Due Diligence Period.

 

9.1.6           Adverse
Actions.   Except as disclosed in the Due Diligence Items, on the Closing Date, no action or proceeding shall have been instituted
or be threatened before any court or governmental authority (a) that relates to the Property and materially and

 

    	23

    	

    

  

adversely affects the Property
after the Closing Date, or (b) that seeks to restrain or prohibit, or to obtain substantial damages in respect of, or which
is related to or arises out of, this Agreement or the consummation of the transactions contemplated herein, unless Seller has demonstrated,
to Buyer’s reasonable satisfaction, that any costs and liabilities to be incurred in connection with such matters are fully
covered by Seller’s insurance (subject to commercially reasonable deductibles paid Seller) and Seller provides a written
commitment to assign all proceeds therefrom to Buyer and add Buyer as an additional insured party under such insurance policy.

 

9.1.7           Bankruptcy.   As of the Closing Date, Seller shall not have commenced (within the meaning of any Bankruptcy Law) a voluntary case, nor shall
there have been commenced against Seller an involuntary case, nor shall Seller have consented to the appointment of a Custodian
of it or for all or any substantial part of its property, nor shall a court of competent jurisdiction have entered an order or
decree under any Bankruptcy Law that is for relief against Seller in an involuntary case or appoints a Custodian of Seller for
all or any substantial part of its property. The term “Bankruptcy Law” means Title 11, U.S. Code, or any similar
state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.

 

9.1.8           Warranties.   Seller shall have caused all warranties and guaranties from manufacturers, contractors, subcontractors, suppliers and installers
to be assigned to Buyer effective as of the Closing Date, to the extent such warranties and guaranties are assignable.

 

9.1.9           Required
Governmental Approvals.   All Required Governmental Approvals shall have been obtained by Buyer and shall be in full force and
effect. Buyer shall have filed and submitted to the appropriate governmental authorities complete applications for all Required
Governmental Approvals by the expiration of the Due Diligence Period. If Buyer fails to file and submit such applications by the
expiration of the Due Diligence Period, Seller shall have the right to terminate this Agreement in which case the Deposit shall
be returned to Buyer.

 

9.1.10         ERISA.   Buyer shall be satisfied that its acquisition of the Property will not cause any violation by Buyer or its members of the requirements
of ERISA.

 

9.2          Employees

 

9.2.1           All
employees are employees of Developed Land Seller (“Community Employees”). Developed Land Seller has provided
Buyer with a complete and accurate list of Community Employees by position and the annual salary, benefit entitlements (if any)
and other compensation payable to each Community Employee. All of the Community Employees are at-will, common law employees of
Developed Land Seller.

 

9.2.2           Developed
Land Seller shall cause Property Manager to terminate, on Developed Land Seller’s behalf, all employees employed at the Community
(including without limitation the General Manager of the Community) effective as of the Closing Date and take such other action
as may be required by any applicable laws, rules, regulations and orders so that Buyer shall have no liability for any matter concerning
any employee which

 

    	24

    	

    

  

accrued and relates to the
period occurring prior to Closing, except for accrued vacation, sick time and other accrued paid time off (“Accrued Employee
Benefits”) related to any employee hired by Buyer at Closing, if any, with respect to which Buyer receives a credit in
accordance with the provisions of Section 6.8.1(f) hereof, and the transactions contemplated by this Agreement shall not result
in the payment or accelerate any payment to any Community Employees. In the event Buyer hires any Community Employees, then neither
Developed Land Seller nor Property Manager shall have any liability for any matter concerning any employee which accrued and relates
to a period occurring from and after Closing. Buyer has no obligation to hire any Community Employees. With respect to all Community
Employees that are to be terminated at Closing, Developed Land Seller shall cause Property Manager to maintain all of such employees’
benefits through the end of the calendar month in which the Closing occurs, and the cost thereof shall be prorated in accordance
with Section 6.8.1(f) hereof.

 

9.2.3           Notwithstanding
any provision hereof to the contrary, Buyer shall have the right to meet with the General Manager, marketing/sales director or
any other department director of the Community at any reasonable time after the Effective Date of this Agreement to discuss operational
and other issues concerning the Community (but not employment arrangements or offers of employment until after the expiration of
the Due Diligence Period) and to review the Community’s books and records. In addition, from and after the expiration of
the Due Diligence Period, Buyer (and its prospective property manager) may meet with any employee of the Community to discuss employment
arrangements and operational and other issues concerning the Community with any employee and Buyer’s property manager may,
but shall have no obligation to, make offers of employment to any employee contingent upon Closing occurring hereunder and otherwise
upon such terms and conditions of employment, compensation and benefits as Buyer shall determine in its sole discretion.

 

9.2.4           As
of the Closing Date, there will be no filed complaint or lawsuit filed by or with respect to any Community Employee pending against
Developed Land Seller or the Property Manager with respect to violation of any federal, state or local Law relating to employment
matters that, either individually or in the aggregate, would reasonably be expected to materially and adversely affect the ability
of Developed Land Seller (or, following the Closing, Purchaser) to own or operate the Community or to continue to conduct the business
currently conducted at the applicable Community, or the ability of Developed Land Seller to consummate the transactions contemplated
hereby.

 

9.2.5           The
parties do not believe the provisions of the Workers Adjustment and Retraining Notification Act (the “WARN Act”)
apply to this transaction and do not expect to incur any such liability as a result of actions taken or not taken prior to the
Closing. Developed Land Seller shall indemnify and hold harmless Buyer from any loss, liabilities, debt, costs (including, but
not limited to, attorneys’ fees) or any other amounts that Buyer may incur due to “employment losses”, as defined
in the WARN Act, which occur prior to Closing; however, Developed Land Seller shall have no liability hereunder for “employment
losses” which occur as a result of the termination of employees by Buyer after the Closing Date.

 

9.2.6           Neither
Developed Land Seller nor Property Manager has any current liability, contingent or otherwise under Title IV of ERISA. Within the
six (6) years preceding the Closing Date, neither Developed Land Seller nor Property Manager (nor any

 

    	25

    	

    

  

ERISA Affiliate of Developed
Land Seller or Property Manager) has been a party to, or made any contributions to, any “multiemployer plan” within
the meaning of Section 4001(a)(3) of ERISA, or any plan subject to Title IV of ERISA or Section 412 of the Code. “Seller
Employee Benefit Plan” means any employee benefit plan, as defined in Section 3(3) of ERISA, or any other material benefit
arrangement (including any employment or consulting agreement, any arrangement providing for insurance coverage or workers’
compensation benefits, any incentive or deferred bonus arrangement, any arrangement providing termination allowance, severance
pay, salary continuation for disability or other leave of absence, supplemental unemployment benefits, lay-off, reduction in force
or similar benefits, any stock option or equity compensation plan, any deferred compensation plan, any compensation policy or practice
(including, without limitation sick and vacation pay policies or practices), any educational assistance arrangements or policies,
any plan governed by Section 125 of the Code, any fringe benefit (including, without limitation, company cars) and any change of
control arrangements or policies) that is sponsored or contributed to by Developed Land Seller, by Property Manager or by an ERISA
Affiliate of Developed Land Seller or Property Manager (or that has been maintained by such Person within the preceding six (6)
years) covering Community Employees or former employees of Developed Land Seller or Property Manager (but only with respect to
the Community Employees or former employees at the Community) or any of their ERISA Affiliates. “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended. “ERISA Affiliate” means any person and/or such
person’s subsidiaries or Affiliates or any trade or business (whether or not incorporated) that is under common control with
such person or such person’s subsidiaries or Affiliates or that is treated as a single employer with such person or such
person’s subsidiaries or Affiliates under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.

 

9.2.7           Seller
agrees to comply with the non-compete provisions set forth in the Non-Compete Agreement attached hereto as Exhibit E.

 

9.2.8           The
provisions of this Section 9.2 shall survive the Closing or earlier termination of this Agreement.

 

10.         Damage
or Destruction.   In the event that the Property should be damaged or destroyed by fire or any other casualty prior to the
Closing Date, then Seller shall promptly provide Buyer with written notice of such casualty. If the cost of repairing such damage,
as estimated by an architect or contractor retained pursuant to the mutual agreement of the Parties (the “Cost of Repairs”),
is (a) less than $250,000, then the Closing shall proceed as scheduled and (i) Seller shall cause all collected insurance
proceeds, plus the cash amount of all associated deductibles, to be paid over to Buyer (or credited against the Purchase Price)
at Closing, (ii) Seller shall assign to Buyer all right, title and interest in and to all claims and proceeds Seller may have
with respect to all policies of insurance relating to the Property at Closing, and (iii) Seller shall pay over to Buyer all
insurance proceeds collected after the Closing by Seller promptly upon receipt thereof; or (b) greater than $250,000, then
Buyer may in its discretion either (i) elect to terminate this Agreement, in which case the Deposit shall be returned to Buyer
without any further action required from either Party, Buyer and Seller shall each be liable for one-half of any escrow fees or
charges and neither Party shall have any further obligation to the other except for any obligations which expressly survive termination
of this Agreement, or (ii) proceed as scheduled and (i) Seller shall cause all collected insurance proceeds, plus the
cash amount of all associated deductibles, to be paid over to Buyer (or credited against the Purchase

 

    	26

    	

    

  

Price) at Closing, (ii) Seller
shall assign to Buyer all right, title and interest in and to all claims and proceeds Seller may have with respect to all policies
of insurance relating to the Property at Closing, and (iii) Seller shall pay over to Buyer all insurance proceeds collected
after the Closing by Seller promptly upon receipt thereof. In the event that the casualty is uninsured, Buyer may terminate this
Agreement unless Buyer receives a credit against the Purchase Price equal to the Cost of Repairs. The foregoing notwithstanding,
in the event any casualty results in the cancellation of, or rental abatement under, any Lease, Buyer shall have the option to
terminate this Agreement without regard to the Cost of Repairs. Any notice required to terminate this Agreement pursuant to this
Section shall be delivered no later than thirty (30) days following Buyer’s receipt of Seller’s notice of such casualty.
The provisions of this Section 10 shall survive the Closing.

 

11.         Eminent
Domain.   If, before the Closing Date, proceedings are commenced for the taking by exercise of the power of eminent domain
of all or a material part of the Property which, as reasonably determined by Buyer, would render the Property unacceptable to Buyer
or unsuitable for Buyer’s intended use, Buyer shall have the right, by giving written notice to Seller within sixty (60)
days after Seller gives notice of the commencement of such proceedings to Buyer, to terminate this Agreement, in which event this
Agreement shall automatically terminate, the Deposit shall be returned to Buyer without any further action required from either
Party, Buyer and Seller shall each be liable for one-half of any escrow fees or charges and neither Party shall have any continuing
obligations hereunder. If, before the Closing Date, proceedings are commenced for the taking by exercise of the power of eminent
domain of less than a material part of the Property, or if Buyer has the right to terminate this Agreement pursuant to the preceding
sentence but Buyer does not exercise such right, then this Agreement shall remain in full force and effect and, on the Closing
Date, the condemnation award (or, if not theretofore received, the right to receive such portion of the award) payable on account
of the taking shall be assigned, or paid to, Buyer. Seller shall give written notice to Buyer within three (3) business days after
Seller’s receiving notice of the commencement of any proceedings for the taking by exercise of the power of eminent domain
of all or any part of the Property. The foregoing notwithstanding, in the event the taking results in the cancellation of, or rent
abatement under, any Lease, Buyer shall have the option to terminate this Agreement. The provisions of this Section 11 shall
survive the Closing.

 

12.         Notices.   All notices, demands, or other communications of any type given by any Party hereunder, whether required by this Agreement or in
any way related to the transaction contracted for herein, shall be void and of no effect unless given in accordance with the provisions
of this Section 12. All notices shall be in writing and delivered to the person to whom the notice is directed, either (a) in
person, (b) by United States Mail, as a registered or certified item, return receipt requested, (c) by electronic mail,
or (d) by a nationally recognized overnight delivery service. Notices transmitted to the then designated facsimile number
of the Party intended to be given notice shall be deemed received upon electronic verification of receipt by the sending machine,
notices sent by a nationally recognized overnight delivery service shall be deemed received on the next business day and notices
delivered by certified or registered mail shall be deemed delivered three (3) days following posting. Notices shall be given to
the following addresses:

 

    	27

    	

    

  

	 	Seller:	RC Manager, Inc.
	 	 	10500 NE 8th Street, Suite 1700
	 	 	Bellevue, WA  98004
	 	 	Attention:  Jill Ashton
	 	 	Telephone:  (425) 533-0793
	 	 	 
	 	With a copy to:	Perkins Coie, LLP
	 	 	108855 NE 4th Street, Suite 700
	 	 	Bellevue, WA  98004
	 	 	Attention:  Craig H. Shrontz
	 	 	Telephone:  (425) 635-1404
	 	 	 
	 	Buyer:	The Freshwater Group, Inc.
	 	 	Attention:  Carl Mittendorff
	 	 	2020 W. Rudasill Road
	 	 	Tucson, Arizona  85704
	 	 	Email:  carl@thefreshwatergroup.com
	 	 	 
	 	With a copy to:	Cox, Castle & Nicholson LLP
	 	 	Attention:  Kevin Kinigstein, Esq.
	 	 	2049 Century Park East, 28th Floor
	 	 	Los Angeles, California  90067
	 	 	Telephone:  (310) 277-4222
	 	 	E-mail:  kkinigstein@coxcastle.com
	 	 	 
	 	If to Escrow Holder:	First American Title Insurance Company
	 	 	777 S. Figueroa Street, Suite 400
	 	 	Los Angeles, California 90017
	 	 	Attention:  Mr. Maurice Neri
	 	 	Phone:  (213) 271-1737
	 	 	Fax:  (714) 361-3603
	 	 	E-mail:  mneri@firstam.com

 

With respect to any notice sent by
email, to constitute effective notice, the “subject line” of such notice must state “Formal Notice under Purchase
and Sale Agreement”, and the sender of such notice shall use reasonable efforts to confirm that such email was received (such
as a request for a confirmation email or a follow-up confirmation call).

 

13.         Remedies.

 

13.1         Seller
Default.   If either Seller defaults in performing any covenants or agreements to be performed by such Seller under this Agreement
or if either Seller breaches any representations or warranties made by such Seller in this Agreement, following notice to Seller
and five (5) business days thereafter during which period such Seller may cure the default, Buyer may, in its sole and absolute
discretion, avail itself of any and all rights and remedies available at law or in equity, including without limitation the right
to terminate this Agreement and recover all damages proximately caused by such Seller’s breach or default and the right to
continue this

 

    	28

    	

    

  

Agreement pending Buyer’s
action for specific performance and/or damages hereunder, and no such remedy shall be deemed exclusive or to preclude the pursuit
of any other remedy. Notwithstanding the foregoing, Buyer must file its specific performance action within six (6) months after
the date of the notice of default, but a failure to do so does not limit Buyer’s other remedies set forth herein. Any damages
to which Buyer is entitled shall include without limitation all due diligence costs, title, escrow, legal and inspection fees and
any other expenses reasonably incurred by Buyer in connection with the performance of its due diligence review of the Property,
including, without limitation, environmental and engineering consultants’ fees and the fees incurred in connection with the
preparation and negotiation of this Agreement, but shall exclude any consequential or indirect damages except in the case of fraud
or willful misconduct. The foregoing notwithstanding, no right to cure shall extend the Closing.

 

13.2         Buyer
Default.   In the event the sale of the Property is not consummated solely because of a default under this Agreement on the part
of Buyer following notice to Buyer and five (5) days thereafter during which period Buyer may cure the default, Seller may declare
this Agreement terminated, in which case the Deposit shall be paid to and retained by Seller as liquidated damages. The Parties
have agreed that Seller’s actual damages, in the event the sale of the Property is not consummated solely because of a default
by Buyer, would be extremely difficult or impracticable to determine. Therefore, by placing their initials below, the Parties acknowledge
that the Deposit has been agreed upon, after negotiation, as the Parties’ reasonable estimate of Seller’s damages and
as Seller’s sole and exclusive remedy against Buyer, at law or in equity, in the event the sale of the Property is not consummated
solely because of a default under this Agreement on the Party of Buyer and each Party shall thereupon be relieved of all further
obligations and liabilities, except any which survive termination.

 

INITIALS: Seller __________           Buyer
__________

 

13.3        Indemnity.

 

13.3.1           Seller
shall hold harmless, indemnify and defend Buyer, its successors and assigns and their respective agents, employees, officers, trustees,
members and retirants and the Property and the Community from and against any and all obligations, liabilities, claims, liens or
encumbrances, demands, losses, damages, causes of action, judgments, costs and expenses asserted by third parties (including attorneys’
fees), whether direct, contingent or consequential and no matter how arising (“Losses and Liabilities”) in any
way (i) related to the Property and/or the Community and arising or occurring prior to the Closing; (ii) related to or arising
from any act, conduct, omission, contract or commitment of either of the Sellers or Property Manager or their respective employees
related to the Property; or (iii) resulting from any breach of representation or warranty or other breach or default by either
of the Sellers under this Agreement.

 

13.3.2           Except
for Losses and Liabilities arising directly or indirectly from or out of a circumstance resulting from a breach of any of either
Seller’s representations or warranties, or which shall have arisen out of any aspect of the Property or the Community, its
management or operations prior to Closing, Buyer shall hold harmless, indemnify and defend Seller, their successors and assigns
and their respective agents, employees, officers and partners, from and against any and all Losses and Liabilities asserted by
third parties in any way (i) related

 

    	29

    	

    

  

to the Property or the Community
and arising or occurring after the Closing; (ii) related to or arising from any act, conduct, omission, contract or commitment
of Buyer related to the Property; or (iii) resulting from any breach of representation or warranty or other breach or default
by Buyer under this Agreement.

 

14.         Assignment.   Neither Seller shall assign any of its right, title, claim or interest in, to or under this Agreement. Buyer may assign any or
all of its rights and obligations under this Agreement (or directly deed the Land and assign all of the Property) to any one or
more persons or entities upon notice to Seller; provided, however, that absent the express agreement of Seller, no such
assignment shall release Buyer from its liabilities hereunder. For the avoidance of doubt, any provisions herein which state that
all or any portion of the Property shall be assigned or transferred “to Buyer” shall be deemed to mean “to Buyer
or its designee”.

 

15.         Interpretation
and Applicable Law.   This Agreement shall be construed and interpreted in accordance with the laws of the State where the
Property is located. Where required for proper interpretation, words in the singular shall include the plural; the masculine gender
shall include the neuter and the feminine, and vice versa. The terms “successors and assigns” shall include the heirs,
administrators, executors, successors, and assigns, as applicable, of any Party hereto.

 

16.         Amendment.   This Agreement may not be modified or amended, except by an agreement in writing signed by the Parties. The Parties may waive any
of the conditions contained herein or any of the obligations of the other Party hereunder, but any such waiver shall be effective
only if in writing and signed by the Party waiving such conditions and obligations.

 

17.         Attorneys’
Fees.   In the event a dispute arises concerning the performance, meaning or interpretation of any provision of this Agreement
or any document executed in connection with this Agreement, the prevailing party in such dispute shall be awarded any and all costs
and expenses incurred by the prevailing party in enforcing, defending or establishing its rights hereunder or thereunder, including,
without limitation, court costs and attorneys and expert witness fees. In addition to the foregoing award of costs and fees, the
prevailing party shall also be entitled to recover its attorneys’ fees incurred in any post judgment proceedings to collect
or enforce any judgment.

 

18.         Entire
Agreement; Survival.   This Agreement, including all Exhibits and Schedules attached hereto, constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings
of the Parties in connection therewith. No representation, warranty, covenant, agreement, or condition not expressed in this Agreement
shall be binding upon the Parties hereto nor shall affect or be effective to interpret, change, or restrict the provisions of this
Agreement. The obligations of the Parties hereunder and all other provisions of this Agreement shall survive the Closing or earlier
termination of this Agreement, except as expressly limited herein.

 

19.         Counterparts.   This Agreement may be executed in any number of counterparts, all of which when taken together shall constitute the entire agreement
of the Parties.

 

    	30

    	

    

  

20.         Time
Is of the Essence; Calculation of Time Periods.   Time is of the essence in this Agreement as to each provision in which
time is an element of performance. Unless otherwise specified, in computing any period of time described herein, the day of the
act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed
is to be included, except that if such last day falls upon a Saturday, Sunday, or legal holiday under the Federal law or laws of
the State(s) where the Property is located, then such period shall run until the end of the next day that is neither a Saturday,
Sunday, or legal holiday under Federal law or the laws of the State(s) where the Property is located. The last day of any period
of time described herein shall be deemed to end at 11:59 p.m. Los Angeles, California time.

 

21.         Real
Estate Commission.   Seller and Buyer each represent and warrant to the other that neither Seller nor Buyer has contacted
or entered into any agreement with any real estate broker, agent, finder or any other Party in connection with this transaction,
and that neither Party has taken any action which would result in any real estate broker’s, finder’s or other fees
or commissions being due and payable to any Party with respect to the transaction contemplated hereby, except that Seller will
pay a commission to VantAge Pointe Capital Management and Advisory, Inc. (“Broker”) under the terms of a separate
agreement between Seller and Broker. Such commission shall be payable on the Closing Date from the proceeds of the Purchase Price
deposited by Buyer. Each Party hereby indemnifies and agrees to hold the other Party harmless from any loss, liability, damage,
cost, or expense (including reasonable attorneys’ fees) resulting to the other Party by reason of a breach of the representation
and warranty made by such Party in this Section.

 

22.         Severability.   If any provision of this Agreement, or the application thereof to any person, place, or circumstance, shall be held by a court
of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied
to other persons, places and circumstances shall remain in full force and effect.

 

23.         Further
Assurances.   Each Party will, whenever and as often as it shall be requested to do so by the other Party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered any and all such further conveyances, assignments, approvals,
consents and any and all other documents and do any and all other acts as may be necessary to carry out the intent and purpose
of this Agreement. The provisions of this Section 23 shall survive the Closing.

 

24.         Exclusivity.   Until the Closing Date or the date that this Agreement is terminated, neither Seller shall enter into any contract, or enter into
or continue any negotiations, to sell the Property to any person or entity other than Buyer, nor will either Seller solicit proposals
from, or furnish any non-public information to, any person or entity other than each Seller’s agents, attorneys and lenders
and Buyer regarding the possible sale of the Property.

 

25.         Non-Solicitation.   For the period beginning on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date, Developed Land Seller
covenants agrees that it shall not, nor shall it permit any of its Affiliates, or its successors and assigns, directly or indirectly,
call on or solicit any Resident or Tenant of the Property for the purpose of leasing space to such Resident or Tenant at another
property managed, operated or otherwise controlled

 

    	31

    	

    

  

by Developed Land Seller
or its Affiliates. For the purposes of this Section 25, the term (a) “Affiliate” means any corporation,
limited liability company, partnership, joint venture or other entity, regardless of how organized or identified, which is directly
or indirectly controlled by Developed Land Seller, and (b) “control” means, when used with respect to any person, the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person,
whether through the ownership of voting securities, by contract, or otherwise, and the terms “controlling” and “controlled”
have correlative meanings. The provisions of this Section 25 shall survive the Closing.

 

26.         No
Option; Binding Effect.   The submission of this Agreement for examination and review does not constitute an option to purchase
the Property, an offer to sell the Property or an agreement to purchase and sell. This Agreement shall have no binding effect and
will only be effective upon Seller’s and Buyer’s execution and mutual receipt of the others executed version of this
Agreement. Escrow Agent’s execution of this Agreement shall not be a prerequisite to the effectiveness of this Agreement.

 

[Remainder of page intentionally left blank;

Signatures begin on following page]

 

    	32

    	

    

  

SIGNATURE PAGE to PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

 

SELLER:

 

HARVARD SQUARE, LLC, a Washington limited liability
company

 

	By:	RC Manager, Inc., a Washington corporation and its Manager
	 	 	 
	By:	/s/ Charles S. Lytle	 
	Name:	Charles S. Lytle	 
	Its:	President	 

 

UNDEVELOPED LAND SELLER:

 

LDEV, LLC, a Washington limited liability company

 

By: RC Manager, Inc., a Washington corporation
and its Manager

 

	By:	/s/ Charles S. Lytle	 
	Name:	Charles S. Lytle	 
	Its:	President	 

 

BUYER:

 

THE FRESHWATER GROUP, INC.,

an Arizona corporation

 

	By:	/s/ Carl Mittendorf	 
	Name:	Carl Mittendorf	 
	Its:	Chief Investment Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}]]