Document:

Unassociated Document

    
      
        Exhibit
          10.73

          

          AMERICAN
            RETIREMENT CORPORATION

          

          RESTRICTED
            STOCK AGREEMENT

          

          This
            RESTRICTED STOCK AGREEMENT (the “Agreement”) is by and between American
            Retirement Corporation, a Tennessee corporation (the “Company”), and
            ________________ (the “Grantee”).

          

          Section
            1.
Restricted
            Stock Award.
            The
            Grantee is hereby granted the right to receive ________ shares (the “Restricted
            Stock”) of the Company’s common stock, par value $0.01 per share (the “Common
            Stock”), subject to the terms and conditions of this Agreement and the American
            Retirement Corporation 1997 Stock Incentive Plan (as amended, the “Plan”).
            Capitalized terms used but not otherwise defined herein shall have the
            meanings
            ascribed thereto in the Plan.

          

          Section
            2.
Vesting
            of the Award.
            Subject
            to Sections
            5
            and
9
            hereof,
            the shares of Restricted Stock granted pursuant to Section
            1
            hereof
            shall vest at such times and in the percentages set forth below:

          

          a. The
            shares
            of Restricted Stock granted hereunder shall vest, if at all, in three
            (3) equal
            tranches (each, a “Tranche”) on March 31, 2006, March 31, 2007 and March 31,
            2008 (each, a “Vesting Date”), such that a maximum of thirty-three and one-third
            percent (33 1/3%) of the shares of Restricted Stock granted hereunder
            may vest
            on each Vesting Date. Any unvested shares of any Tranche of Restricted
            Stock
            that do not vest on a Vesting Date pursuant to the remaining provisions
            of this
Section
            2
            shall be
            immediately forfeited and the Grantee shall have no further rights with
            respect
            to such shares of Restricted Stock. Notwithstanding anything herein to
            the
            contrary, no fractional shares shall be issuable upon any Vesting
            Date.

          

          b. The
            number
            of shares of any Tranche of Restricted Stock that shall vest on any Vesting
            Date
            shall be determined by the achievement or partial achievement of the
            following
            three performance measures:

          

          i. certain
            targets to be established for such Tranche by the Compensation Committee
            of the
            Company’s Board of Directors (the “Compensation Committee”) with respect to Same
            Community NOI Growth (as defined by the Compensation Committee in its
            sole and
            absolute discretion) for the fiscal year ending on the December 31 immediately
            preceding the Vesting Date for such Tranche.

          

          ii. certain
            targets to be established for such Tranche by the Compensation Committee
            with
            respect to Adjusted EBITDAR Growth (as defined by the Compensation Committee
            in
            its sole and absolute discretion) for the fiscal year ending on the December
            31
            immediately preceding the Vesting Date for such Tranche.

          

          iii. certain
            targets to be established for such Tranche by the Compensation Committee
            with
            respect to Cash Earnings Growth (as defined by the Compensation Committee
            in its
            sole and absolute discretion) for the fiscal year ending on the December
            31
            immediately preceding the Vesting Date for such Tranche.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
 

          c. Promptly
            following the establishment of the targets for each Tranche, the Compensation
            Committee will cause the targets to be distributed to the Grantee, along
            with a
            summary showing the method of calculating the number of shares to vest
            (if at
            all) in such Tranche upon the achievement or partial achievment of such
            targets.

          

          Section
            3.
Distribution
            of Restricted Stock.
            Certificates representing the shares of Restricted Stock that have vested
            under
Section
            2
            will be
            distributed to the Grantee as soon as practicable after each Vesting
            Date. The
            Certificates representing the Restricted Stock shall be subject to the
            restrictions on transfer set forth in Section
            6
            hereof.

          

          Section
            4.
Voting
            Rights and Dividends.
            Prior to
            the distribution of the Restricted Stock, certificates representing shares
            of
            Restricted Stock will be held by the Company (the “Custodian”) in the name of
            the Grantee. The Custodian will take such action as is necessary and
            appropriate
            to enable the Grantee to vote the Restricted Stock. All cash dividends
            received
            by the Custodian, if any, with respect to the Restricted Stock will be
            remitted
            to the Grantee. Stock dividends issued with respect to the Restricted
            Stock
            shall be treated as additional shares of Restricted Stock that are subject
            to
            the same restrictions and other terms and conditions that apply to the
            shares of
            Restricted Stock. Notwithstanding the foregoing, no voting rights or
            dividend
            rights shall inure to the Grantee following the forfeiture of the Restricted
            Stock pursuant to Section
            5
            or with
            respect to any shares of Restricted Stock that do not vest pursuant to
            Section
            2.

          

          Section
            5.
Termination.
            In the
            event that Grantee’s employment by the Company (or any Subsidiary or Affiliate
            of the Company) terminates for any reason, all shares of Restricted Stock
            that
            have not vested prior to the date of termination shall be immediately
            forfeited
            and Grantee shall have no further rights with respect to such shares
            of
            Restricted Stock. Notwithstanding the foregoing, if the Grantee dies
            while
            employed by the Company (or any Subsidiary or Affiliate of the Company)
            or if
            the Grantee’s employment is terminated by reason of Disability, the Grantee’s
            shares of Restricted Stock shall vest to the extent that the performance
            measures established for each fiscal year pursuant to Section
            2(b)
            are
            achieved (or partially achieved).

          

          Section
            6.
No
            Transfer or Pledge of Restricted Stock.
            No
            shares of Restricted Stock may be Transferred (as hereinafter defined)
            prior to
            the date such shares have vested, if at all, on any Vesting Date. Thereafter,
            the Grantee may not Transfer more than twenty-five percent (25%) of all
            of the
            Grantee’s vested Restricted Stock in any calendar quarter. In
            addition, any Transfer of vested Restricted Stock shall be subject to
            the
            Company’s determination that, after giving effect to such Transfer, the Grantee
            will remain in compliance with the provisions of any stock ownership
            policy
            applicable to the Grantee that is then in existence. As used herein,
            the term
“Transfer” shall mean any transfer, sale, conveyance, pledge, encumbrance,
            hypothecation or disposition of any kind, whether voluntary or
            involuntary.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
 

          Section
            7.
Tax
            Election.
            The
            Grantee may, but is not required to, elect to apply the tax rules of
            Section
            83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), to the
            issuance of the Restricted Stock. If the Grantee makes an affirmative
            election
            under Section 83(b) of the Code, the Grantee shall deliver a copy of
            such
            election to the Company in accordance with the requirements of the Code
            and the
            Regulations promulgated thereunder. The Grantee acknowledges that the
            decision
            to make, or refrain from making, an election to apply Section 83(b) of
            the Code
            is his individual decision, based upon the Grantee’s personal analysis and
            personal tax advice. The Grantee acknowledges that the Company has not
            attempted
            to influence the Grantee, or provided the Grantee with any advice, in
            connection
            with the Grantee’s determination of whether to make an election to apply Section
            83(b) of the Code. The Grantee is urged to consult with his individual
            tax
            advisors in making the determinations described in this section.

          

          Section
            8.
Tax
            Withholding.
            The
            Company may withhold from any distribution of Restricted Stock an amount
            of
            Common Stock equal to such federal, state or local taxes as shall be
            required to
            be withheld pursuant to any applicable law or regulation, unless the
            Company
            agrees to accept a payment of cash (or to withhold from other wages payable
            to
            Grantee) in the amount of such withholding taxes.

          

          Section
            9.
Change
            of Control.
            Upon the
            occurrence of a Change in Control or a Potential Change in Control, all
            Restricted Stock shall be deemed vested and the restrictions under the
            Plan and
            this Agreement with respect to the Restricted Stock, including the restriction
            on transfer set forth in Section
            6
            hereof,
            shall automatically expire and shall be of no further force or
            effect.

          

          Section
            10. Stock
            Subject to Award.
            In the
            event that the shares of Common Stock of the Company should, as a result
            of a
            stock split or stock dividend or combination of shares or any other change,
            redesignation, merger, consolidation, recapitalization or otherwise,
            be
            increased or decreased or changed into or exchanged for a different number
            or
            kind of shares of stock or other securities of the Company or of another
            corporation, the number of shares of Restricted Stock that have been
            awarded to
            Grantee shall be appropriately adjusted to reflect such action. If any
            such
            adjustment shall result in a fractional share, such fraction shall be
            disregarded.

          

          Section
            11. Stock
            Power.
            Concurrently with the execution of this Agreement, the Grantee shall
            deliver to
            the Company a stock power, endorsed in blank, relating to the shares
            of
            Restricted Stock. Such stock power shall be in a form satisfactory to
            the
            Company.

          

          Section
            12. Legend.
            Each
            certificate representing Restricted Stock shall bear a legend in substantially
            the following form:

          

          THIS
            CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
            THE TERMS
            AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER)
            CONTAINED IN THE AMERICAN RETIREMENT CORPORATION 1997 STOCK INCENTIVE
            PLAN (AS
            AMENDED, THE “PLAN”) AND THE RESTRICTED STOCK AGREEMENT (THE “AGREEMENT”)
            BETWEEN THE OWNER OF THE RESTRICTED STOCK REPRESENTED HEREBY AND AMERICAN
            RETIREMENT CORPORATION (THE “COMPANY”). THE RELEASE OF SUCH STOCK FROM SUCH
            TERMS AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS
            OF THE
            PLAN AND THE AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE COMPANY.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
 

          Section
            13. Restrictive
            Agreement.
            As a
            condition to the distribution of any vested shares of Restricted Stock,
            the
            Grantee (or his legal representative or estate or any third party transferee),
            if the Company so requests, will execute an agreement in form satisfactory
            to
            the Company in which the Grantee or such other recipient of the shares
            represents that he is acquiring the shares without a view to distribution
            thereof.

          

          Section
            14. No
            Right to Continued Employment.
            This
            Agreement shall not be construed as giving the Grantee the right to be
            retained
            in the employ of the Company (or any Subsidiary or Affiliate of the Company),
            and the Company (or any Subsidiary or Affiliate of the Company) may at
            any time
            dismiss the Grantee from employment, free from any liability or any claim
            under
            the Plan.

          

          Section
            15. Governing
            Provisions.
            This
            Agreement is made under and subject to the provisions of the Plan, and
            all of
            the provisions of the Plan are also provisions of this Agreement. If
            there is a
            difference or conflict between the provisions of this Agreement and the
            provisions of the Plan, the provisions of the Plan will govern. By signing
            this
            Agreement, the Grantee confirms that he or she has received a copy of
            the
            Plan.

          

          Section
            16. Miscellaneous.

          

          16.1
            Entire
            Agreement.
            This
            Agreement and the Plan contain the entire understanding and agreement
            between
            the Company and the Grantee concerning the Restricted Stock granted hereby,
            and
            supersede any prior or contemporaneous negotiations and understandings.
            The
            Company and the Grantee have made no promises, agreements, conditions,
            or
            understandings relating to the Restricted Stock, either orally or in
            writing,
            that are not included in this Agreement or the Plan.

          

          16.2
            Captions.
            The
            captions and section numbers appearing in this Agreement are inserted
            only as a
            matter of convenience. They do not define, limit, construe, or describe
            the
            scope or intent of the provisions of this Agreement.

          

          16.3
            Counterparts.
            This
            Agreement may be executed in counterparts, each of which when signed
            by the
            Company and the Grantee will be deemed an original and all of which together
            will be deemed the same Agreement.

          

          16.4
            Notice.
            Any
            notice or communication having to do with this Agreement must be given
            by
            personal delivery or by certified mail, return receipt requested, addressed,
            if
            to the Company, to the principal office of the Company, and, if to the
            Grantee,
            to the Grantee’s last known address provided by the Grantee to the
            Company.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
 

          16.5
            Amendment.
            This
            Agreement may be amended by the Company, provided that unless the Grantee
            consents in writing, the Company cannot amend this Agreement if the amendment
            will materially change or impair the Grantee’s rights under this Agreement and
            such change is not to the Grantee’s benefit.

          

          16.6
            Successors
            and Assignment.
            Each and
            all of the provisions of this Agreement are binding upon and inure to
            the
            benefit of the Company and the Grantee and their heirs, successors, and
            assigns.
            However, the Grantee may not Transfer this Agreement or the Grantee’s rights
            hereunder. Furthermore, the Grantee may Transfer the Restricted Stock
            distributed to the Grantee pursuant to this Agreement only as set forth
            in this
            Agreement.

          

          16.7
            Governing
            Law.
            This
            Agreement shall be governed and construed exclusively in accordance with
            the
            laws of the State of Tennessee applicable to agreements to be performed
            in the
            State of Tennessee.

          

          

          [Signature
            page to follow.]

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
 

          IN
            WITNESS
            WHEREOF, the Company and the Grantee have executed this Agreement to
            be
            effective as of September, __ 2005.

          

          AMERICAN
            RETIREMENT CORPORATION

          
 

          By:_________________________________

          Name:_______________________________

          Title:________________________________

          

          

          Grantee:

           

          ____________________________________

          Name:_______________________________Unassociated Document

    
      Exhibit
        10.74

       

      PURCHASE
        AND SALE AGREEMENT

       

       

      by
        and between

       

       

      EPOCH
        SL VI, INC.

      as
        Seller

       

      and

       

      AMERICAN
        RETIREMENT CORPORATION

      as
        Buyer

       

       

      Dated
        as of September 8, 2005

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      PURCHASE
        AGREEMENT

       

      TABLE
        OF CONTENTS

       

       

      
        
          	 	
                  Page

                
	
                  SECTION
                    1. PURCHASE AND SALE.

                	
                  1

                
	
                  1.1.

                	
                  Subject
                    Assets

                	
                  1

                
	
                  1.2.

                	
                  Excluded
                    Assets

                	
                  2

                
	
                  1.3.

                	
                  Assumed
                    Liabilities

                	
                  3

                
	
                  1.4.

                	
                  Excluded
                    Liabilities

                	
                  3

                
	 	 
	
                  SECTION
                    2. PURCHASE PRICE.

                	
                  3

                
	
                  2.1.

                	
                  Purchase
                    Price and Payment

                	
                  3

                
	
                  2.2.

                	
                  Prorations.

                	
                  4

                
	
                  2.3.

                	
                  Fees
                    and Expenses.

                	
                  5

                
	 	 
	
                  SECTION
                    3. REPRESENTATIONS AND WARRANTIES OF SELLER.

                	
                  6

                
	
                  3.1.

                	
                  Organization
                    and Power

                	
                  6

                
	
                  3.2.

                	
                  Authority
                    of Seller; Non-Contravention; Consents

                	
                  6

                
	
                  3.3.

                	
                  Real
                    Property

                	
                  7

                
	
                  3.4.

                	
                  Personal
                    Property.

                	
                  7

                
	
                  3.5.

                	
                  Taxes

                	
                  7

                
	
                  3.6.

                	
                  Residents

                	
                  7

                
	
                  3.7.

                	
                  Litigation

                	
                  7

                
	
                  3.8.

                	
                  Compliance
                    with Laws

                	
                  8

                
	
                  3.9.

                	
                  Facility
                    Employees

                	
                  8

                
	
                  3.10.

                	
                  Employee
                    Benefit Programs

                	
                  8

                
	
                  3.11.

                	
                  Environmental
                    Matters

                	
                  8

                
	
                  3.12.

                	
                  Finders
                    Fees

                	
                  8

                
	
                  3.13.

                	
                  Financial
                    Statements

                	
                  8

                
	 	 
	
                  SECTION
                    4. REPRESENTATIONS AND WARRANTIES OF BUYER.

                	
                  8

                
	
                  4.1.

                	
                  Organization
                    of Buyer

                	
                  8

                
	
                  4.2.

                	
                  Authority
                    of Buyer; Non-Contravention; Consents

                	
                  9

                
	
                  4.3.

                	
                  Litigation

                	
                  9

                
	
                  4.4.

                	
                  Financial
                    Ability

                	
                  9

                
	
                  4.5.

                	
                  Finders
                    Fees

                	
                  9

                
	
                	
                   

                
	
                  SECTION
                    5. COVENANTS.

                	
                  10

                
	
                  5.1.

                	
                  Conduct
                    of Business

                	
                  10

                
	
                  5.2.

                	
                  Authorization
                    from Others

                	
                  10

                
	
                  5.3.

                	
                  Notice
                    of Default

                	
                  10

                
	
                  5.4.

                	
                  Matters
                    Relating to Facility Employees.

                	
                  10

                
	
                  5.5.

                	
                  Access
                    to Book and Records

                	
                  11

                
	
                  5.6.

                	
                  Buyer
                    Approvals

                	
                  11

                
	
                  5.7.

                	
                  Consummation
                    of Agreement; Cooperation

                	
                  11

                
	
                  5.8.

                	
                  Further
                    Assurances

                	
                  11

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  5.9.

                	
                  Tanglewood
                    Matter

                	
                  11

                
	
                  5.10.

                	
                  Non-Solicitation
                    Agreement

                	
                  12

                
	 	 
	
                  SECTION
                    6. BUYER’S DUE DILIGENCE.

                	
                  12

                
	
                  6.1.

                	
                  Inspections

                	
                  12

                
	
                  6.2.

                	
                  Due
                    Diligence Materials

                	
                  12

                
	
                  6.3.

                	
                  Review
                    of Materials

                	
                  13

                
	
                  6.4.

                	
                  Inspection
                    Period

                	
                  13

                
	
                  6.5.

                	
                  Title
                    and Survey Review

                	
                  13

                
	
                  6.6.

                	
                  Required
                    State of Title

                	
                  14

                
	
                  6.7.

                	
                  Property
                    Sold “AS IS”.

                	
                  15

                
	 	 
	
                  SECTION
                    7. CONDITIONS TO CLOSING.

                	
                  16

                
	
                  7.1.

                	
                  Conditions
                    to the Obligations of the Parties

                	
                  16

                
	
                  7.2.

                	
                  Conditions
                    to the Obligations of Buyer

                	
                  16

                
	
                  7.3.

                	
                  Conditions
                    to Obligations of Seller

                	
                  16

                
	 	 
	
                  SECTION
                    8. CLOSING.

                	
                  17

                
	
                  8.1.

                	
                  Time
                    and Place of Closing

                	
                  17

                
	
                  8.2.

                	
                  Seller’s
                    Closing Deliveries

                	
                  17

                
	
                  8.3.

                	
                  Buyer’s
                    Closing Deliveries

                	
                  18

                
	
                  8.4.

                	
                  Delivery
                    of Deposit Escrow Amount

                	
                  19

                
	 	 
	
                  SECTION
                    9. TERMINATION OF AGREEMENT; RIGHT TO PROCEED; DEFAULT.

                	
                  19

                
	
                  9.1.

                	
                  Termination

                	
                  19

                
	
                  9.2.

                	
                  Effect
                    of Termination

                	
                  19

                
	
                  9.3.

                	
                  Right
                    to Proceed

                	
                  20

                
	
                  9.4.

                	
                  Buyer
                    Default

                	
                  20

                
	
                  9.5.

                	
                  Seller
                    Default

                	
                  20

                
	
                  9.6.

                	
                  Casualty

                	
                  20

                
	
                  9.7.

                	
                  Condemnation

                	
                  21

                
	 	 
	
                  SECTION
                    10. SURVIVAL.

                	
                  21

                
	
                  10.1.

                	
                  Survival
                    of Representations and Warranties

                	
                  21

                
	
                  10.2.

                	
                  Survival
                    of Covenants

                	
                  21

                
	 	 
	
                  SECTION
                    11. INDEMNIFICATION.

                	
                  21

                
	
                  11.1.

                	
                  Indemnification
                    by Seller

                	
                  21

                
	
                  11.2.

                	
                  Indemnification
                    by Buyer

                	
                  21

                
	
                  11.3.

                	
                  Limitations
                    on Indemnification

                	
                  22

                
	
                  11.4.

                	
                  Notice;
                    Defense of Claims.

                	
                  22

                
	 	
                   

                
	
                  SECTION
                    12. MISCELLANEOUS.

                	
                  24

                
	
                  12.1.

                	
                  Governing
                    Law; Consent to Jurisdiction; Waiver of Jury Trial

                	
                  24

                
	
                  12.2.

                	
                  Bulk
                    Sales Laws

                	
                  24

                
	
                  12.3.

                	
                  Notices

                	
                  24

                
	
                  12.4.

                	
                  Entire
                    Agreement

                	
                  25

                
	
                  12.5.

                	
                  Assignability;
                    Binding Effect

                	
                  26

                
	
                  12.6.

                	
                  Construction

                	
                  26

                
	
                  12.7.

                	
                  Execution
                    in Counterparts

                	
                  26

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  12.8.

                	
                  Amendments
                    and Waivers; Effect

                	
                  26

                
	
                  12.9.

                	
                  Third
                    Party Beneficiaries

                	
                  26

                
	
                  12.10.

                	
                  Time
                    of the Essence

                	
                  27

                
	
                  12.11.

                	
                  Use
                    of Proceeds to Clear Title

                	
                  27

                
	
                  12.12.

                	
                  Submission
                    not an Offer or Option

                	
                  27

                
	
                  12.13.

                	
                  Designee

                	
                  27

                
	
                  12.14.

                	
                  Severability

                	
                  27

                
	
                  12.15.

                	
                  Other
                    Remedies

                	
                  27

                
	
                  12.16.

                	
                  Specific
                    Performance

                	
                  27

                
	
                  12.17.

                	
                  Certain
                    Defined Terms

                	
                  28

                

        

         

      

       

       

      
        	Exhibits	
              
	
              	
              
	Exhibit
                A	List
                of Facilities
	Exhibit
                B	Legal
                Description of Land
	Exhibit
                C	Form
                of Deposit Escrow Agreement
	Exhibit
                D	Form
                of Bill of Sale
	Exhibit
                E	Form
                of Assignment and Assumption Agreement
	Exhibit
                F	Form
                of Indemnification Escrow Agreement
	Exhibit
                G	Form
                of FIRPTA Affidavit
	
              	
              
	Schedules	
              
	Schedule
                1.1(d)	Vehicles
	Schedule
                1.1(e)	Resident
                Agreements
	Schedule
                1.1(f)	Service
                Contracts
	Schedule
                1.1(g)	Permits
	Schedule
                1.2(i)	Excluded
                Software
	Schedule
                1.2(k)	Specified
                Excluded Assets
	Schedule
                1.3(b)	Specified
                Assumed Liabilities
	Schedule
                3.6	Residents
	Schedule
                3.7	Litigation
	Schedule
                3.9	Facility
                Employees
	Schedule
                3.10	Employee
                Benefit Plans
	Schedule
                5.4(a)	Amounts
                Relating to Certain Facility Employees
	Schedule
                6.2(b)	Preliminary
                Title Evidence
	
              	
              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      PURCHASE
        AND SALE AGREEMENT

       

      THIS
        PURCHASE AND SALE AGREEMENT (the “Agreement”),
        entered into as of September 8, 2005, is by and between EPOCH
        SL VI,
        Inc., a Delaware corporation (“Seller”),
        and
        American Retirement Corporation, a Tennessee corporation (“Buyer”).
        Capitalized terms used in this Agreement without definition shall have the
        meanings given to such terms in Section
        12.17
        hereof.

       

       

      W
        I T N
        E S S E T H

       

      WHEREAS,
        subject to the terms and conditions hereof, Seller desires to sell the
        facilities listed on Exhibit
        A
        attached
        hereto (each a “Facility”
and
        collectively, the “Facilities”)
        and the
        other Subject Assets (as defined below) related thereto; and

       

      WHEREAS,
        subject to the terms and conditions hereof, Buyer desires to purchase the
        Facilities and the other Subject Assets for the consideration specified
        herein;

       

      NOW,
        THEREFORE, in order to consummate said purchase and sale and in consideration
        of
        the mutual agreements set forth herein, the parties hereto agree as
        follows:

       

       

      SECTION
        1.
  PURCHASE
        AND SALE.

       

      1.1.  Subject
        Assets.
        Subject
        to the provisions of this Agreement, Buyer agrees to purchase from Seller
        and
        Seller agrees to sell, convey, transfer, assign and deliver to Buyer, at
        the
        Closing (as defined in Section
        8.1
        hereof),
        all of Seller’s right, title and interest to the properties, assets and
        businesses located at each of the Facilities of every kind and description,
        tangible and intangible, real, personal or mixed, and wherever located,
        including, without limitation, the following assets, but excluding all Excluded
        Assets (collectively, the “Subject
        Assets”):
        

       

      (a)  The
        land
        described in Exhibit
        B
        attached
        hereto (the “Land”)
        together with (i) all rights, privileges and easements appurtenant to the
        Land
        owned by Seller, including, without limitation, all minerals, oil, gas, and
        other hydrocarbon substances on and under the Land, as well as all development
        rights, air rights, water and water rights relating to the Land, any rights
        to
        any land lying in the bed of any existing dedicated street, road or alley
        adjoining the Land and to all strips and gores adjoining the Land, and any
        other
        easements, rights-of-way, or appurtenances used in connection with the
        beneficial use and enjoyment of the Land (collectively referred to as the
        “Appurtenances”);
        and
        (ii) all improvements and fixtures located on the Land (collectively, the
        “Improvements”;
        the
        Land, Appurtenances and Improvements are collectively referred to herein
        as the
“Real
        Property”);

       

      (b)  All
        fixed
        assets located at each Facility;

       

      (c)  All
        personal property and interests owned by Seller including furniture, office
        equipment, computers and commercially available computer software programs
        (but
        not the Excluded Software) that are loaded on such computers located at the
        Facilities, communications equipment, storage tanks, spare and replacement
        parts, fuel, inventory, and all other tangible property, in each, case located
        at each Facility (collectively, the “Personal
        Property”);

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 2

        

      

       

       

      (d)  The
        vehicles listed on Schedule
        1.1(d)
        (collectively, the “Vehicles”);

       

      (e)  The
        residency agreements, leases, supervisory care agreements or other occupancy
        agreements relating to the Facilities listed on Schedule
        1.1(e)
        (collectively, the “Resident
        Agreements”);

       

      (f)  The
        service contracts and maintenance agreements or other contracts relating
        to the
        use, operation or maintenance of the Facilities, to the extent assignable,
        in
        each case, as listed on Schedule 1.1(f)
        (collectively, the “Service
        Contracts”;
        the
        Resident Agreements and the Service Contracts are collectively referred to
        as
        the “Purchased
        Contracts”);

       

      (g)  All
        licenses and permits issued by Governmental Authorities relating to the
        ownership and operation of the Facilities, to the extent assignable, listed
        on
Schedule 1.1(g)
        (collectively, the “Permits”);

       

      (h)  With
        respect to each Facility, all bills and receipts, supplier information, rent
        rolls, resident lists, applications, records and resident files;
        and

       

      (i)  To
        the
        extent assignable, each Facility’s telephone numbers and telephone directory
        listings.

       

      1.2.  Excluded
        Assets.
        Notwithstanding
        the foregoing and anything to the contrary contained in this Agreement, the
        following assets are expressly excluded from the purchase and sale contemplated
        hereby and from the Subject Assets (collectively, the “Excluded
        Assets”)
        and, as
        such, are not included in the assets conveyed hereby:

       

      (a)  Seller’s
        cash and cash equivalents;

       

      (b)  Seller’s
        bank deposits and bank accounts;

       

      (c)  Seller’s
        prepaid expenses; 

       

      (d)  Seller’s
        accounts receivable; 

       

      (e)  Seller’s
        corporate franchise, general ledger, accounting records, Tax records, corporate
        seals, minute books, stock record books and such other records as have to
        do
        with the organization, maintenance and existence of Seller as a corporation;
        

       

      (f)  All
        books,
        records, files and papers, whether in hard copy or computer format, used
        by
        Seller in connection with the Facilities, including, without limitation,
        employee handbooks, business forms, sales and promotional literature, manuals
        and data, sales and purchase correspondence;

       

      (g)  Seller’s
        right, title and interest in and to each of (1) the name “EPOCH” or any
        derivation thereof; (2) all trade names, trademarks, service marks, symbols,
        logos and copyrights relating thereto, including, without limitation, all
        applications, registrations and renewals of any of the foregoing; and (3)
        all
        other proprietary and/or intellectual property rights relating to any of
        the
        foregoing (all of the items described in this clause (g) are collectively
        referred to as the “Brand”);

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (h)  Any
        items
        or materials, whether tangible or intangible, that contain, include, display
        or
        otherwise reference the Brand, including, without limitation, photographs,
        posters, pictures, representations, signs and promotional materials;

       

      (i)  Any
        of the
        computer software programs set forth on Schedule
        1.2(i)
        (collectively, the “Excluded
        Software”);

       

      (j)  Any
        right
        of Seller under this Agreement or any other agreement, instrument or document
        executed in connection with this Agreement to which Seller is a party;
        and

       

      (k)  The
        items
        set forth on Schedule
        1.2(k).

       

      1.3.  Assumed
        Liabilities.
        Subject
        to
        the provisions of this Agreement, from and after the Closing Date (as
        hereinafter defined), Buyer hereby assumes and agrees to pay, defend, discharge
        and perform as and when due and performable all of the following Liabilities
        (collectively, the “Assumed
        Liabilities”):

       

      (a)  All
        Liabilities under each Purchased Contract that first arise after the Closing
        Date or for which Buyer received a credit against the Purchase Price pursuant
        to
Section
        2.2
        ;
        and

       

      (b)  All
        Liabilities specified on Schedule
        1.3(b).
        

       

      1.4.  Excluded
        Liabilities.
        Notwithstanding
        the foregoing and anything to the contrary contained in this Agreement, except
        for the Assumed Liabilities, Buyer will not assume or be liable for any
        Liability of Seller resulting from, arising out of or otherwise relating
        to the
        Subject Assets, including any of the following (collectively, the “Excluded
        Liabilities”):

       

      (a)  Any
        Liability of Seller, or with respect to the Facilities, that is not specifically
        enumerated as an Assumed Liability;

       

      (b)  Any
        Liability of Seller under this Agreement or any other agreement, instrument
        or
        document executed in connection with this Agreement to which Seller is a
        party;
        and

       

      (c)  Any
        Liability relating to the Excluded Assets.

       

       

      SECTION
        2.
  PURCHASE
        PRICE.

       

      2.1.  Purchase
        Price and Payment.
        The
        purchase price for the Subject Assets (the “Purchase
        Price”)
        shall
        be the sum of: (i) US$138,000,000.00 (the “Cash
        Consideration”),
        as
        such amount is adjusted at the Closing as provided in Section
        2.2;
        and (ii)
        the assumption by Buyer of the Assumed Liabilities. Buyer shall cause the
        Cash
        Consideration to be paid as follows:

       

      (a)  Deposit.
        Simultaneously with the execution of this Agreement, Buyer shall deposit
        with
        Chicago Title Insurance Company (the “Deposit
        Escrow Agent”)
        the sum
        of US$5,000,000.00 of the Cash Consideration (such amount of the Cash
        Consideration is referred to as the “Deposit”)
        to
        secure Buyer’s obligations under this Agreement. The Deposit Escrow Agent shall
        maintain the Deposit in an interest bearing money market account with an
        FDIC
        insured bank and the Deposit and all interest thereon (collectively, the
        “Deposit
        Escrow Amount”)
        shall
        be maintained by the Deposit Escrow Agent in such account and shall be disbursed
        pursuant to the terms and conditions of this Agreement and the Deposit Escrow
        Agreement attached hereto as Exhibit
        C
        (the
“Deposit
        Escrow Agreement”).

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  Payment
        at Closing.
        On the
        Closing Date, the Cash Consideration shall be paid as follows: (i) Buyer
        shall
        pay the Cash Consideration (other than the Deposit Escrow Amount and the
        Closing
        Escrow Amount (as defined below)) by wire transfer of immediately available
        federal funds to an account maintained by or on behalf of Seller, such account
        to be designated by written notice to Buyer not later than two (2) Business
        Days
        prior to the Closing Date (the “Designated
        Account”);
        (ii)
        Buyer shall pay the sum of US$1,380,000.00 of the Cash Consideration (the
        “Closing
        Escrow Amount”)
        by wire
        transfer of immediately available federal funds into the account described
        in
        the Indemnification Escrow Agreement (as defined below) (such account, the
        “Closing
        Escrow Account”);
        and
        (iii) the Deposit Escrow Agent shall pay the Deposit Escrow Amount by wire
        transfer of immediately available federal funds to the Designated Account.
        The
        Closing Escrow Amount will be available to satisfy only those amounts, if
        any,
        owed by Seller to the Buyer Indemnified Parties under Section
        11
        and in
        accordance with the terms of this Agreement and the Indemnification Escrow
        Agreement substantially in the form of Exhibit
        F
        attached
        hereto (the “Indemnification
        Escrow Agreement”).

       

      2.2.  Prorations.

       

      (a)  Prorations
        of Real Estate and Personal Property Taxes.
        All real
        and personal property Taxes attributable to the calendar year in which the
        Closing occurs shall be prorated and adjusted as of 11:59 p.m. Eastern Time
        on
        the day before the Closing Date as an adjustment at the Closing (regardless
        of
        whether such Taxes and special assessments are then due and payable or
        delinquent). If the real estate or personal property Tax statements for the
        fiscal year during which the Closing Date occurs are not finally determined,
        then the real estate or personal property Tax figures for the immediately
        prior
        fiscal year shall be used for the purposes of prorating real estate and personal
        property Taxes on the Closing Date, with a further adjustment to be made
        after
        the Closing Date as soon as such real estate or personal property Tax figures
        are finalized. All real estate special assessments shall be paid in full
        prior
        to Closing or out of Closing proceeds. Any real estate or personal property
        Tax
        refunds or proceeds (including interest thereon) on account of a favorable
        determination resulting from a challenge, protest, appeal or similar proceeding
        relating to real estate or personal property Taxes and assessments relating
        to
        the Real Property (i) for all Tax periods occurring prior to the applicable
        Tax
        period in which the Closing occurs shall be retained by and paid exclusively
        to
        Seller and (ii) for the applicable Tax period in which the Closing occurs
        shall
        be prorated as of the Closing Date after reimbursement to Seller and Buyer,
        as
        applicable, for all fees, costs and expenses (including reasonable attorneys’
and consultants’ fees) incurred by Seller or Buyer, as applicable, in connection
        with such proceedings such that Seller shall retain and be paid that portion
        of
        such real estate or personal property Tax refunds or proceeds as is applicable
        to the portion of the applicable Tax period prior to the Closing Date and
        Buyer
        shall retain and be paid that portion of such real estate or personal property
        Tax refunds or proceeds as is applicable to the portion of the applicable
        Tax
        period from and after the Closing Date. Seller shall not settle any real
        estate
        or personal property Tax protests or proceedings relating to a time period
        subsequent to Closing without the consent of Buyer, which consent shall not
        be
        unreasonably withheld, conditioned or delayed. After the Closing, Buyer shall
        be
        responsible for and control any real estate or personal property Tax protests
        or
        proceedings for any period for which such Taxes are adjusted between the
        parties
        under this Agreement and for any later period. Buyer and Seller shall use
        commercially reasonable efforts to cooperate in pursuit of any such proceedings
        and in responding to reasonable requests of the other for information concerning
        the status of and otherwise relating to such proceedings; provided,
        however,
        that
        neither party shall be obligated to incur any out-of-pocket fees, costs or
        expenses in responding to the requests of the other.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  Prorations
        of Service Contracts.
        Prepaid
        or unpaid amounts under any Service Contract shall be prorated and adjusted
        as
        of the Closing Date. 

       

      (c)  Utilities.
        Seller
        shall cause all meters for electricity, gas, water, sewer or other utility
        usage
        at each Facility to be read on the Closing Date, and Seller shall pay all
        charges for such utility charges which have accrued on or prior to the Closing
        Date. If the utility companies are unable or refuse to read the meters on
        the
        Closing Date, all charges for such utility charges to the extent unpaid shall
        be
        prorated and adjusted as of the Closing Date based on the most recent bills
        therefor. If the meters cannot be read as of the Closing Date and, therefore,
        the most recent bill is used to prorate and adjust as of the Closing Date
        as an
        adjustment at the Closing, then to the extent that the amount of such prior
        bill
        proves to be more or less than the actual utility charges for the period
        in
        question, a further adjustment shall be made after the Closing Date as soon
        as
        the actual charges for such utilities are available.

       

      (d)  Prorations
        of Income and Expenses.
        Collected rents and other charges for the then current and any future period
        and
        security or other forms of deposits (the full amount thereof and other charges
        with interest earned thereon, if any), service charges, and all other incidental
        expenses and charges paid by tenants of the Facilities under the Resident
        Agreements, in each case to the extent collected for the current period and
        any
        future periods, shall be apportioned, adjusted and prorated as of the Closing
        Date. 

       

      (e)  Estimates.
        In the
        event, on the Closing Date, the precise figures necessary for any of the
        foregoing adjustments are not capable of determination, then, those adjustments
        shall be made on the basis of good faith estimates of Seller and Buyer using
        currently available information, and final adjustments shall be made within
        90
        days after the Closing Date to the extent precise figures are determined
        or
        become available.

       

      (f)  Adjustment
        Payments.
        The net
        amount of all adjustments to be made under this Section
        2.2
        shall be
        paid on the Closing Date in immediately available funds. All post-closing
        adjustments shall be made in immediately available funds.

       

      (g)  Calculation
        of Prorations.
        All
        apportionments and prorations made hereunder shall be made based on the number
        of days of ownership of each Facility in the period applicable to the
        apportionment, with (1) Seller entitled to income and responsible for expenses
        for the period ending on the day immediately preceding the Closing Date and
        (2)
        Buyer entitled to income and responsible for expenses for the period beginning
        on the Closing Date and thereafter. Prorations of annual payments shall be
        made
        based on the number of days of ownership in the applicable annual
        period.

       

      2.3.  Fees
        and Expenses.

       

      (a)  Each
        of
        the parties will bear its own expenses in connection with the negotiation
        and
        the consummation of the transactions contemplated by this
        Agreement.

       

      (b)  Buyer
        and
        Seller shall split equally (i) all sales, use, excise, real property and
        other
        transfer Taxes and charges applicable to the transfer of the Subject Assets
        to
        Buyer as contemplated by this Agreement, and all costs of obtaining or
        transferring permits, registrations, applications and other tangible and
        intangible properties incurred in connection with the transfer of the Subject
        Assets to Buyer; and (ii) all recording charges and fees applicable to the
        recordation of deeds and other instruments of transfer relating to the sale
        of
        the Facilities.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (c)  Buyer
        and
        Seller shall each pay fifty percent (50%) of any escrow fees in connection
        with
        the transactions contemplated by this Agreement.

       

      (d)  Buyer
        and
        Seller shall split equally the title insurance premiums for the title policies
        to be issued at Closing pursuant to the title commitments obtained by Buyer
        pursuant to Section 6.2; provided, that Buyer shall pay for any endorsements
        that it elects to obtain and for any title policies in favor of Buyer’s
        lenders.

       

      (e)  Buyer
        shall pay for any surveys it obtains in connection with the transactions
        contemplated by this Agreement.

       

      (f)  Buyer
        shall pay any mortgages or other similar Taxes in connection with the
        transactions contemplated by this Agreement.

       

       

      SECTION
        3.
  REPRESENTATIONS
        AND WARRANTIES OF SELLER.

       

      For
        purposes of this Section
        3,
        the
        terms “Knowledge”,
        “to
        Seller’s Knowledge”
and
        words of similar import means the actual knowledge of each Laurence Gerber,
        President and Chief Executive Officer of Seller, Joanna Cormac Burt, the
        Chief
        Operating Officer and Senior Vice President of Seller, Beth Anderson, Director
        of Acquisitions of Seller, and Debora Pfaff, Senior Vice President and Chief
        Financial Officer of Seller. Seller hereby represents and warrants to Buyer
        as
        follows: 

       

      3.1.  Organization
        and Power

       

      .
        Seller
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of Delaware, and has all corporate power and authority
        to own
        or lease its properties and to carry on its business as currently conducted.
        Seller is duly qualified to do business as a foreign corporation and is in
        good
        standing in each jurisdiction where the character of the property owned or
        leased by it or the nature of its activities makes such qualification necessary,
        except for those jurisdictions where the failure to be so qualified would
        not,
        individually or in the aggregate, have a Material Adverse Effect.

       

      3.2.  Authority
        of Seller; Non-Contravention; Consents

       

      (a)  Seller
        has
        the full corporate power and authority to enter into this Agreement and each
        agreement, document and instrument to be executed and delivered by Seller
        pursuant to this Agreement and to perform the transactions contemplated hereby
        and thereby. The execution, delivery and performance by Seller of this Agreement
        and each such other agreement, document and instrument to which Seller is
        a
        party have been duly authorized by all necessary corporate action of Seller,
        and
        no other corporate action on the part of Seller is required in connection
        therewith. This Agreement and each agreement, document and instrument executed
        and delivered by Seller pursuant to this Agreement constitutes, or when executed
        and delivered will constitute, valid and binding agreements of Seller,
        enforceable against Seller in accordance with their terms, except to the
        extent
        such enforceability may be limited by applicable bankruptcy, insolvency,
        or
        similar Laws affecting creditors’ rights generally or is subject to general
        principles of equity.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  The
        execution, delivery and performance by Seller of this Agreement:

       

      (i)  does
        not
        violate any provision of the organizational documents of Seller;

       

      (ii)  does
        not
        violate any Laws applicable to Seller, or require Seller to obtain any approval,
        consent, or make any filing with, any Governmental Authority that has not
        been
        obtained or made; and

       

      (iii)  does
        not
        and will not result in (1) a breach of, constitute a default under, accelerate
        any obligation under, or give rise to a right of termination of, any indenture
        or loan or credit agreement or any other agreement, contract, instrument,
        mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction,
        decree, determination or arbitration award to which Seller is a party or
        by
        which its properties are bound other than where any of the foregoing (either
        individually or in the aggregate) do not have a Material Adverse Effect,
        or (2)
        the creation or imposition of any Lien on any of the Subject Assets that
        will
        not be removed or discharged (or authorized for discharge) at the
        Closing.

       

      3.3.  Real
        Property

      (a)  All
        of the
        Real Property owned by Seller relating to the Facilities is described on
        Exhibit
        B.

       

      (b)  Seller
        has
        not received any written notice from any Governmental Authority of any violation
        of any Law issued with respect to any of the Facilities that has not been
        corrected heretofore. Seller has not received any written notice of any pending
        or threatened condemnation of all or any portion of any of the Real
        Property.

       

      3.4.  Personal
        Property. 

       

      (a)  Seller
        has
        good and marketable title to, or in the case of leased personal property
        has
        valid leasehold interests in, all Personal Property. None of the Personal
        Property is subject to any Liens other than (i) Permitted Liens and (ii)
        Liens
        to be released or otherwise discharged at or before Closing.

       

      (b)  All
        leases
        of Personal Property are in good standing and are valid, binding and enforceable
        in accordance with their respective terms.

       

      3.5.  Taxes.
        Seller
        is not a “foreign person” within the meaning of Section 1445 of the Code and
        Treasury Regulations Section 1.1445-2.

       

      3.6.  Residents. 
        Schedule
        3.6
        sets
        forth a complete and accurate list of all residents of the Facilities as
        of the
        date specified in such schedule.

       

      3.7.  Litigation.
        Except
        as set forth in Schedule
        3.7,
        there is
        no litigation or governmental or administrative proceeding or investigation
        pending or, to Seller’s Knowledge, threatened against Seller which may have a
        Material Adverse Effect or which would prevent or hinder the consummation
        of the
        transactions contemplated by this Agreement. 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
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      3.8.  Compliance
        with Laws.
        Seller
        has not received any written notice of (i) a violation by Seller of any Law
        to
        which Seller is subject or (ii) any alleged violation by Seller of any Law
        to
        which Seller is subject, which, in either case, would have a Material Adverse
        Effect. Seller has delivered or otherwise made available to Buyer and/or
        its
        representatives true and accurate copies of the most recent health service
        agency surveys or inspection reports for each Facility.

       

      3.9.  Facility
        Employees. 
        Schedule
        3.9
        sets
        forth a list of all employees (both full- and part-time) of Seller working
        at
        the Facilities and includes the following information with respect to each
        such
        employee: (i) the name of such employee and the date as of which such
        employee was originally hired by Seller, and whether the employee is on an
        active or inactive status; (ii) an indication of which Facility such employee
        works; (iii) such employee’s title; and (iv) such employee’s
        annualized compensation as of the date of this Agreement, including base
        salary,
        vacation and/or paid time off accrual amounts, bonus potential (if any),
        severance pay potential, and any other compensation forms. The employees
        set
        forth on Schedule
        3.9
        are
        collectively referred to as the “Facility
        Employees”.
        Except
        for any employee handbook or policy maintained by or behalf of Seller, no
        Facility Employee is subject to a written employment agreement.

       

      3.10.  Employee
        Benefit Programs.
         Schedule
        3.10
        lists all
        stock or cash option plans, restricted stock plans, bonus or incentive award
        plans, severance pay policies or agreements, deferred compensation agreements,
        supplemental income arrangements, vacation plans, and all other employee
        benefit
        plans, agreements, and arrangements maintained by Seller for the benefit
        of the
        Facility Employees.

       

      3.11.  Environmental
        Matters.
         Seller
        has
        provided or otherwise made available to Buyer or its representatives copies
        of
        the most recent environmental site assessments commissioned by Seller regarding
        each of the Facilities.

       

      3.12.  Finders
        Fees.
         Seller has not incurred or become liable for any broker’s commission,
        finder’s fee or advisor’s fee relating to or in connection with the transactions
        contemplated by this Agreement other than a broker’s fee due to CLW Health Care
        Services Group pursuant to a separate agreement with Seller, which shall
        be paid
        by Seller.

       

      3.13.  Financial
        Statements.
        Seller
        has
        made available to Buyer (i) the unaudited statements of income for each Facility
        for the fiscal years ended December 31, 2003 and December 31, 2004 (the
“Annual
        Financial Statements”),
        and
        (ii) the unaudited statements of income for each Facility for the seven-month
        period ended July 31, 2005 (the “Interim
        Financial Statements,”
and
        together with the Annual Financial Statements, the “Financial
        Statements”).
        The
        Financial Statements (i) present fairly in all material respects the financial
        condition and results of operations of the Facilities for the periods covered
        thereby; (ii) have been prepared in accordance with generally accepted
        accounting principles in the United States of America consistently applied,
        except that (A) the Interim Financial Statements are subject to normal recurring
        year-end adjustments (which will not be material in the aggregate); (B) the
        Financial Statements do not contain footnotes; and (C) the Financial Statements
        have been adjusted for market-rate management fees and terms.

       

      SECTION
        4.
  REPRESENTATIONS
        AND WARRANTIES OF BUYER.

       

      Buyer
        hereby represents and warrants to Seller as follows:

       

      4.1.  Organization
        of Buyer.
         Buyer is a corporation, duly organized, validly existing and in good
        standing under the laws of the State of Tennessee, and has all power and
        authority to own or lease its properties and to carry on its business as
        currently conducted. Buyer is duly qualified to do business as a foreign
        entity
        and is in good standing in each jurisdiction where the character of the property
        owned or leased by it or the nature of its activities makes such qualification
        necessary, except for those jurisdictions where the failure to be so qualified
        would not, individually or in the aggregate, have a material adverse effect
        on
        Buyer.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
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      4.2.  Authority
        of Buyer; Non-Contravention; Consents

       

      (a)  Buyer
        has
        the full power and authority to enter into this Agreement and each agreement,
        document and instrument to be executed and delivered by Buyer pursuant to
        this
        Agreement and to perform the transactions contemplated hereby and thereby.
        The
        execution, delivery and performance by Buyer of this Agreement and each such
        other agreement, document and instrument to which Buyer is a party have been
        duly authorized by all necessary action of Buyer, and no other action on
        the
        part of Buyer is required in connection therewith. This Agreement and each
        agreement, document and instrument executed and delivered by Buyer pursuant
        to
        this Agreement constitutes, or when executed and delivered will constitute,
        valid and binding agreements of Buyer, enforceable against Buyer in accordance
        with their terms, except to the extent such enforceability may be limited
        by
        applicable bankruptcy, insolvency, or similar Laws affecting creditors’ rights
        generally or is subject to general principles of equity.

       

      (b)  The
        execution, delivery and performance by Buyer of this Agreement:

       

      (i)  does
        not
        violate any provision of the organizational documents of Buyer;

       

      (ii)  does
        not
        violate any Laws applicable to Buyer, or require Buyer to obtain any approval,
        consent, or make any filing with, any Governmental Authority that has not
        been
        obtained or made; and

       

      (iii)  does
        not
        and will not result in a breach of, constitute a default under, accelerate
        any
        obligation under, or give rise to a right of termination of, any indenture
        or
        loan or credit agreement or any other agreement, contract, instrument, mortgage,
        Lien, lease, permit, authorization, order, writ, judgment, injunction, decree,
        determination or arbitration award to which Buyer is a party or by which
        its
        properties are bound other than where any of the foregoing (either individually
        or in the aggregate) do not have a material adverse effect on
        Buyer.

       

      4.3.  Litigation.
        There is
        no litigation or governmental or administrative proceeding or investigation
        pending or, to its knowledge, threatened against Buyer which would prevent
        or
        hinder the consummation of the transactions contemplated by this
        Agreement.

       

      4.4.  Financial
        Ability.
        Buyer
        has
        unencumbered cash funds and other available financing in an amount equal
        to the
        sum of the Cash Consideration plus amounts sufficient to satisfy any other
        monetary obligations of Buyer under this Agreement. The consummation of the
        transactions contemplated by this Agreement are not subject, to or otherwise
        conditioned upon, Buyer and/or any Affiliate of Buyer obtaining financing
        of any
        kind from any source.

       

      4.5.  Finders
        Fees.
        Buyer
        has not incurred or become liable for any broker’s commission, finder’s fee or
        advisor’s fee relating to or in connection with the transactions contemplated by
        this Agreement other than a fee due to Cohen & Steers Capital Advisors LLC,
        which shall be paid by Buyer.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      SECTION
        5.
  COVENANTS.

       

      5.1.  Conduct
        of Business.
        From the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        except as otherwise contemplated by this Agreement or with the prior written
        consent of Buyer, such consent not to be unreasonably withheld, delayed or
        conditioned, Seller shall, with respect to each Facility:

       

      (a)  Conduct
        the business of such Facility in the ordinary course consistent with past
        practices;

       

      (b)  Use
        commercially reasonable efforts to preserve intact the business organization
        and
        goodwill associated with such Facility; 

       

      (c)  Refrain
        from making any change in the compensation payable or to become payable to
        any
        employees, agents or independent contractors of such Facility other than
        compensation changes made by Seller in the ordinary course of business;
        and

       

      (d)  Refrain
        from entering into any additional Service Agreements after the date hereof
        that
        are not terminable upon no more than 60 days notice without
        penalty.

       

      5.2.  Authorization
        from Others.
        From the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        except as otherwise expressly set forth in this Agreement, each party hereto
        shall use its commercially reasonable efforts to obtain all authorizations,
        consents and permits of others required to permit the consummation of the
        transactions contemplated by this Agreement. 

       

      5.3.  Notice
        of Default.
        From the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        each party shall give written notice to the other party promptly after the
        occurrence of any event which would cause or constitute a material breach
        or
        material default of any of the representations, warranties or covenants set
        forth in this Agreement.

       

      5.4.  Matters
        Relating to Facility Employees. 

       

      (a)  On
        or
        immediately prior to the Closing Date, (i) Seller shall terminate all Facility
        Employees and (ii) Buyer shall offer employment on an at-will basis to all
        such
        terminated Facility Employees. The parties hereto agree that Seller shall
        be
        responsible for making any applicable severance payments to such employees
        in
        respect of such terminations of employment in accordance with Seller’s
        employment policies and plans. Such terminations and offers may be conditioned
        upon consummation of the transactions contemplated hereby. Buyer shall assume
        all accrued (vested or unvested) vacation, personal time-off, and sick leave
        for
        those Facility Employees accepting employment with Buyer, and shall receive
        a
        corresponding credit therefor against the Cash Consideration in an amount
        equal
        to the amounts set forth on Schedule
        5.4(a),
        which
        Seller shall deliver to Buyer within three (3) Business Days prior to the
        Closing Date and which shall set forth, with respect to each Facility Employee
        that is being hired by Buyer on or after the Closing Date, the amount of
        accrued
        (vested or unvested) vacation, personal time-off and sick leave for such
        Facility Employee.

       

      (b)  Seller
        agrees that, for a period of one (1) year after the Closing Date, it shall
        not
        solicit for employment any Facility Employee or employ any Facility Employee,
        in
        each case, which accepted an offer of employment with Buyer (as contemplated
        by
Section
        5.4(a)
        above)
        and was actually employed by Buyer on or after the Closing Date.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (c)  If
        within
        90 days after the Closing Date, Buyer terminates the employment of any Facility
        Employee that Buyer employs, a Facility Employee resigns from his employment
        with Buyer or the employment of any Facility Employee otherwise ceases, and
        in
        connection with such termination, resignation or cessation, as the case may
        be,
        Buyer pays to such Facility Employee an amount less than the amount which
        Buyer
        is assuming hereunder with respect to such Facility Employee (as set forth
        on
Schedule
        5.4(a)),
        then
        Buyer shall pay to Seller the difference of such amounts.

       

      5.5.  Access
        to Book and Records.
        For a
        period of six (6) years following the Closing Date, each party hereto shall
        afford the other party hereto (and such other party’s officers, directors,
        employees, attorneys, accountants and other authorized representatives of
        such
        party and its Affiliates) access, in a manner reasonably designed to minimize
        disruption to the operations of such party, upon reasonable notice and during
        normal business hours, to each party’s general ledger, accounting and financial
        records and minute books, whether in hard copy or computer format, and each
        party, its Affiliates and their respective officers, directors, employees,
        attorneys, accountants and other authorized representatives shall be permitted
        to make abstracts from, or copies of, all such items.

       

      5.6.  Buyer
        Approvals.
        Within
        ten (10) Business Days after the date hereof, Buyer shall file complete
        applications with the applicable Governmental Authorities to receive all
        approvals, permits, licenses, certificates and consents required by applicable
        Law for Buyer’s acquisition and operation of the Facilities from and after the
        Closing Date (collectively, the “Buyer
        Approvals”).
        Buyer
        shall diligently seek to obtain and maintain all Buyer Approvals. Buyer shall
        keep Seller apprised of the status of the application process for all Buyer
        Approvals. Buyer hereby acknowledges and agrees that Seller has the right
        to
        contact such Governmental Authorities to discuss the status of such
        applications.

       

      5.7.  Consummation
        of Agreement; Cooperation.

       

      (a)  From
        the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        each of Seller and Buyer shall use their respective best efforts to perform
        and
        fulfill all conditions and obligations on its parts to be performed and
        fulfilled under this Agreement, to the end that the transactions contemplated
        by
        this Agreement shall be fully carried out.

       

      (b)  From
        the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        each party hereto shall cooperate with all reasonable requests of the other
        party and such other party’s counsel in connection with the consummation of the
        transaction contemplated hereby.

       

      5.8.  Further
        Assurances.
        Each of
        the parties hereto agrees to, after the Closing, execute and deliver such
        other
        documents, certificates, agreements and other writings and to take such other
        actions as may be reasonably necessary or desirable in order to consummate
        or
        implement expeditiously the transactions contemplated by this Agreement and
        to
        vest in Buyer the Subject Assets.

       

      5.9.  Tanglewood
        Matter.
        From the
        date hereof until the earlier of the Closing Date or the date on which this
        Agreement is terminated (or deemed terminated) in accordance with Section
        9
        hereof,
        the following shall occur: (i) as soon as it is made available to Seller,
        Seller
        shall deliver to Buyer a copy the final written report of Stone Glazing
        Consulting regarding certain rain water infiltration matters relating to
        the
        Facility located in Houston, Texas (the “Tanglewood
        Report”);
        (ii)
        to the extent the Tanglewood Report expressly recommends that repairs are
        necessary at the Facility located in Houston, Texas solely on account of
        rain
        water infiltration at such Facility (the “Tanglewood
        Matter”),
        Seller
        shall solicit bids for such repair work indicated in the Tanglewood Report;
        (iii) to the extent practicable, Seller shall commence making such repairs;
        (iv)
        if such repairs have been completed prior to Closing, the Cash Consideration
        shall be increased dollar-for-dollar for the amounts of such repairs in excess
        of US$500,000.00; and (v) if such repairs have not been completed prior to
        Closing, Seller shall pay for up to US$500,000.00 of such repairs (less any
        amounts that Seller has actually paid or has been otherwise invoiced on account
        of such repairs on or to the Closing Date). In connection with the payment
        for
        such post-Closing repairs, Buyer shall provide Seller with written notice
        of
        such repairs and written information providing reasonable detail regarding
        the
        nature and substance of such repairs. The obligation to make payments for
        such
        post-Closing repairs set forth in this Section
        5.9
        shall be
        null and void and shall be of no further force or effect from and after the
        date
        that is one year after the Closing Date. Seller shall keep Buyer informed
        as to
        the status of such repairs relating to the Tanglewood Matter, and Seller
        and
        Buyer shall reasonably cooperate with each other regarding matters relating
        to
        the Tanglewood Matter.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      5.10.  Non-Solicitation
        Agreement.
        From the
        date hereof until the earliest to occur of (1) the Closing Date, (2) the
        date on
        which this Agreement is terminated (or deemed terminated) in accordance with
        Section
        9
        hereof or
        (3) the date that is 30 days after the date hereof, Seller will not (and
        will
        not permit any Affiliate or any other person acting for or on behalf of Seller
        or of any Affiliate thereof): (i) offer for sale the Facilities or the Subject
        Assets (or any portion thereof) or any ownership interest of Seller; (ii)
        solicit offers to buy all or any portion of the Facilities or the Subject
        Assets
        or any ownership interest of Seller; (iii) hold discussions with any party
        (other than Buyer) looking toward such an offer or solicitation or looking
        toward a merger, business combination or consolidation of Seller; or (iv)
        enter
        into any agreement with any party (other than Buyer) with respect to the
        sale or
        other disposition of the Facilities or the Subject Assets (or any portion
        thereof) or any ownership interest in Seller or with respect to any merger,
        consolidation, business combination or similar transaction involving Seller.
        

       

      SECTION
        6.
  BUYER’S
        DUE DILIGENCE.

       

      6.1.  Inspections.
        Seller
        agrees that between, the date of this Agreement and the Closing Date, Buyer
        and
        its authorized agents or representatives shall be entitled to enter the
        Facilities during normal business hours upon reasonable advance notice to
        Seller
        (which may be oral) to make such physical, structural and mechanical
        investigations, studies and tests including, without limitation, surveys
        and
        engineering studies, as Buyer deems necessary or advisable. Notwithstanding
        anything contained in this Agreement, Buyer shall not conduct or allow any
        so-called Phase II Environmental Testing or other invasive testing of soil
        or
        groundwater on or under the Facilities without first obtaining Seller’s written
        consent. Buyer acknowledges that it has performed its business assessment
        (the
“Business
        Assessment”)
        of the
        Facilities with respect to the locale of the Facilities, the leasing market
        for
        the Facilities and the financial status and operating revenues with respect
        to
        each Facility in connection with its determination of the Purchase Price
        (including but not limited to rental rates, leasing costs, vacancy and
        absorptions rates, land values, replacement costs, maintenance and operating
        costs, financing costs, etc.) and has satisfied itself with respect to such
        Business Assessment prior to the date of this Agreement.

       

      6.2.  Due
        Diligence Materials.

       

      (a)  Seller
        also agrees to provide or make available to Buyer information and materials
        reasonably requested by Buyer in the possession of Seller within five (5)
        Business Days of Buyer’s written request of same. Seller shall, during normal
        business hours, upon reasonable advance notice to Seller (which may be oral)
        make all books, records, plans, building specifications, contracts, agreements
        or other instruments or documents contained in Seller’s files relating to the
        operation and maintenance of the Facilities available to Buyer. 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  Seller
        has
        delivered or otherwise made available to Buyer and/or its representatives
        the
        title insurance policies described in Schedule
        6.2(b),
        together
        with copies of the recorded documents referenced therein (collectively, the
        “Existing
        Title Policies”),
        and
        the surveys described in Schedule
        6.2(b)
        (the
“Existing
        Surveys”;
        the
        Existing Title Policies and the Existing Surveys being collectively referred
        to
        herein as the “Preliminary
        Title Evidence”).
        The
        Preliminary Title Evidence represents the most recent title policies and
        surveys
        of the Facilities available to Seller.

       

      6.3.  Review
        of Materials.
        Buyer
        shall have the right to commence and actively pursue such due diligence as
        it
        may deem prudent, including, without limitation, the following due diligence
        items with respect to the Facilities:

       

      (a)  Obtain
        and
        review engineering reports on structural condition of the mechanical
        systems;

       

      (b)  Obtain
        and
        review environmental reports on oil, hazardous waste, and asbestos;

       

      (c)  Review
        of
        applicable zoning and other land use controls, and other permits, licenses,
        permissions, approvals and consents;

       

      (d)  A
        physical
        examination of the Facilities and each and every component thereof;
        and

       

      (e)  An
        examination of title and survey matters.

       

      6.4.  Inspection
        Period.
        Buyer
        shall notify Seller no later than 5:00 p.m. Eastern Time on the date that
        is
        five (5) Business Days after the date hereof (such date is referred to as
        the
“Inspection
        Period Expiration”)
        of the
        results of its physical diligence. In the event that Buyer’s physical due
        diligence shall reveal any material physical, mechanical or structural defects
        at a single Facility (other than any physical, mechanical or structural defects
        arising from or otherwise relating to the Tanglewood Matter) which are estimated
        to exceed an amount equal to 1% of the Cash Consideration to repair or replace,
        Buyer may elect, by written notice to Seller and the Deposit Escrow Agent
        (which
        notice shall state the nature of the physical, mechanical or structural defect),
        on or before the Inspection Period Expiration, and, if Seller has failed
        to cure
        or otherwise remedy such physical, mechanical or structural defect within
        10
        Business Days after the date on which Seller received such notice, not to
        proceed with the transaction described herein, in which event the Deposit
        Escrow
        Agent is hereby required to return the Deposit Escrow Amount in accordance
        with
        the Deposit Escrow Agreement and this Agreement shall be null and void without
        recourse to either party hereto except for any provisions that expressly
        survive
        termination of this Agreement. Buyer shall have no right to terminate this
        Agreement for reasons related to its Business Assessment of the Facilities,
        including but not limited to a change in the market assumptions utilized
        by
        Buyer in its analysis of the Facilities.

       

      6.5.  Title
        and Survey Review

       

      (a)  Buyer
        shall, prior to the Inspection Period Expiration, review the Preliminary
        Title
        Evidence. Prior to the Inspection Period Expiration Buyer will make such
        written
        objections to Seller (“Initial
        Title Objections”)
        to the
        form and/or contents of the Preliminary Title Evidence (other than objections
        to
        any Permitted Liens, which Buyer shall not have the right to object to) as
        Buyer
        may wish. Buyer’s failure to make Initial Title Objections with respect to a
        particular matter within such time period will constitute a waiver of any
        right
        to object with respect to a particular matter of Preliminary Title Evidence.
        Any
        matter shown on the Preliminary Title Evidence and not so objected to by
        Buyer
        shall be a “Permitted
        Exception”
        hereunder. 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  Prior
        to
        the earlier of (i) the day that is five (5) Business Days after Buyer’s receipt
        of the Final Title Evidence (as hereinafter defined) or (ii) the date that
        is 21
        days after the date hereof (the “Final
        Title Inspection Date”),
        Buyer
        shall also cause to be prepared for its behalf title insurance commitments
        relating to the Facilities, including such affirmative insurance and
        endorsements as Buyer may desire. Buyer may also cause to be prepared an
        ALTA/ACSM as built survey of the Real Property, certified to Buyer, the title
        insurance company, and any lender of Buyer. Such title commitments and surveys
        being referred to as the “Final
        Title Evidence”.
        Prior
        to the Final Title Inspection Date, Buyer will make such written objections
        to
        Seller (the “Final
        Title Objections”;
        the
        Final Title Objections and the Initial Title Objections being referred to
        collectively as the “Title
        Objections”)
        to the
        form and content of the Final Title Evidence as Buyer may wish, provided,
        however,
        that,
        except for the Initial Title Objections, Buyer shall not have the right to
        object with respect to matters shown on the Preliminary Title Evidence or
        with
        respect to any Permitted Liens. Buyer’s failure to make Final Title Objections
        with respect to a particular matter within such time period will constitute
        a
        waiver of any right to object with respect to particular matter of Final
        Title
        Evidence. Any matter shown on the Final Title Evidence and not so objected
        to by
        Buyer shall also be a “Permitted
        Exception”
        hereunder.

       

      (c)  Seller
        will have until the Closing to cure the Title Objections, and shall use
        reasonable efforts to cure any and all Title Objections, other than Liens
        of an
        ascertainable amount created by Seller and mechanic’s or materialman’s Liens
        arising on or after Seller acquired title to the respective Facility
        (“Monetary
        Liens”)
        which
        Seller shall remove or cure by payment of funds from Closing or, with respect
        to
        mechanic’s Liens or materialman’s Liens by bonding off. At Seller’s election,
        the Closing shall be extended for a period of up to thirty (30) days to permit
        Seller to cure any such Title Objections (the “Cure
        Period”).
        Seller
        shall remove any encumbrances or exceptions to title which are created by,
        through or under Seller after the effective date of each title insurance
        commitments obtained by Buyer and which are not consented to by Buyer under
        the
        terms hereof. Buyer shall have the right to a dollar-for-dollar adjustment
        under
Section
        2.1(i)
        in favor
        of Buyer in the amount of any Monetary Liens which are unsatisfied and which
        have not been bonded over on the Closing Date. If the Title Objections are
        not
        cured prior to Closing, Buyer will have the option as its sole and exclusive
        remedy to (i) terminate this Agreement and receive a refund of the Deposit
        Escrow Amount in accordance with the Deposit Escrow Agreement or (ii) proceed
        to
        close without a reduction in the Purchase Price for any Title Objections
        uncured
        by Seller.

       

      6.6.  Required
        State of Title.
        At the
        Closing, Seller shall convey to Buyer (or to Buyer’s nominee) fee simple title
        to all of the Real Property free and clear of any and all tenancies and other
        occupancies, Liens, encumbrances, conditions, easements, assessments,
        restrictions and other conditions, except for the following:

       

      (a)  The
        Lien,
        if any, for real estate Taxes not yet due and payable or for any municipal
        betterments assessed after the date hereof;

       

      (b)  The
        Resident Agreements;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (c)  The
        Permitted Exceptions and Permitted Liens; and

       

      (d)  Provisions
        of existing building zoning Laws.

       

      6.7.  Property
        Sold “AS IS”.

       

      (a)  Buyer
        acknowledges, represents and warrants that, except as expressly provided
        in this
        Agreement, (i) any information (“Information”)
        supplied or made available by or on behalf of Seller, whether written or
        oral,
        including, by way of example only and not limitation, in the form of maps,
        surveys, plats, soil reports, engineering studies, environmental studies,
        market
        studies, valuation reports, inspection reports, plans, specifications, or
        any
        other information whatsoever, without exception, pertaining to the Facilities
        and the other Subject Assets, any and all records, rent rolls, and other
        documents pertaining to the use and occupancy of the Facilities, income thereof,
        the cost and expenses of maintenance thereof, and any and all other matters
        concerning the condition, suitability, integrity, marketability, compliance
        with
        law, or other attributes or aspects of the Facilities, or a part thereof,
        is
        furnished to Buyer solely as a courtesy; (ii) THE INFORMATION IS PROVIDED,
        AND
        THE FACILITIES AND THE OTHER SUBJECT ASSETS ARE PURCHASED, ON AN AS-IS-WHERE-IS
        BASIS, AND SELLER MAKES NO REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING
        BY
        OPERATION OF LAW OR OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY
        OF CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO
        THE
        INFORMATION OR ANY FACILITY; and (iii) no representations, whether written
        or
        oral, have been made by or on behalf of Seller, or its agents, employees
        or
        representatives in order to induce Buyer to enter into this Agreement. Without
        limiting the generality of the foregoing, Buyer acknowledges, warrants and
        represents to Seller that neither Seller nor its agents, employees or
        representatives have made any representations or statements, whether written
        or
        oral, to Buyer concerning the investment potential, operation or resale of
        the
        Facilities at any future date, at a profit or otherwise, nor has Seller or
        its
        agents, employees or representatives rendered any advice or expressed any
        opinion to Buyer regarding any Tax consequences of ownership of the Facilities
        or the other Subject Assets.

       

      (b)  Buyer
        acknowledges, represents and warrants that as of the Closing Date, Buyer
        will be
        familiar with the Facilities and the other Subject Assets and will have made
        such independent investigations as Buyer deems necessary or appropriate
        concerning the Facilities and the other Subject Assets. If Buyer elects to
        proceed with the purchase of the Facilities and the other Subject Assets,
        any
        objections which Buyer may have with respect to the Facilities and the other
        Subject Assets shall be waived by Buyer. Except as expressly provided in
        this
        Agreement, Seller makes no representations or warranties and specifically
        disclaims any representation, warranty, or guaranty, oral or written, past,
        present or future with respect to the physical condition or any other aspect
        of
        the Facilities and the other Subject Assets, including, without limitation,
        the
        structural integrity of any Improvements, the manner, construction, condition,
        and state of repair or lack of repair of any of any Improvements, the conformity
        of any Improvements to any plans or specifications for the Facilities,
        including, but not limited to, any plans and specifications that may have
        been
        or which may be provided or otherwise made available to Buyer, the conformity
        of
        the Facilities to past, current or future applicable zoning or building code
        requirements or the compliance with any other Laws, the financial earning
        capacity or history or expense history of the operation of the Facilities
        and
        the other Subject Assets, the nature and extent of any right-of-way, lease,
        possession, Lien, license, reservation, condition, or otherwise, the existence
        of soil instability, past soil repairs, soil additions or conditions of soil
        fill, susceptibility to landslides, sufficiency of undershoring, sufficiency
        of
        drainage, whether a Facility is located wholly or partially in a flood plain
        or
        a flood hazard boundary or similar area, the existence or non-existence of
        hazardous waste or other toxic materials of any kind (including, without
        limitation, asbestos) or any other matter affecting the stability or integrity
        of the Land and/or the Improvements.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      SECTION
        7.
  CONDITIONS
        TO CLOSING.

       

      7.1.  Conditions
        to the Obligations of the Parties.
        The
        obligations of each party hereto to consummate the Closing are subject to
        the
        satisfaction that no judgment, injunction, order, ruling or decree issued
        by any
        Governmental Authority restraining, enjoining or otherwise prohibiting the
        consummation of the transactions contemplated by this Agreement shall have
        been
        issued and then be in effect (provided that the parties hereto shall use
        commercially reasonable efforts to have any such judgment, order, injunction,
        decree or ruling vacated or lifted), nor shall there have been any Law enacted,
        enforced or deemed applicable to the transactions contemplated by this Agreement
        which makes the consummation thereof illegal. 

       

      7.2.  Conditions
        to the Obligations of Buyer.
        The
        obligation of Buyer to consummate this Agreement and the transactions
        contemplated hereby are subject to the fulfillment, prior to or at the Closing,
        of the following further conditions precedent, any of which may be waived
        by
        Buyer in its sole and absolute discretion:

       

      (a)  Representations;
        Warranties; Covenants.
        Each of
        the representations and warranties of Seller contained in Section
        3
        hereof
        shall be true and correct in all material respects as though made on and
        as of
        the Closing; Seller shall, on or before the Closing, have performed in all
        material respects all of its obligations hereunder which by the terms hereof
        are
        to be performed on or before the Closing; and Seller shall have delivered
        to
        Buyer a certificate of the President of Seller dated as of the Closing to
        such
        effect

       

      (b)  Deliveries.
        Seller
        shall have delivered (or caused to be delivered) the items described in
Section
        8.2
        hereof.

       

      (c)  Buyer
        Approvals.
        Buyer
        shall have obtained all Buyer Approvals, or reasonably satisfactory evidence
        that all Buyer Approvals will be obtained in the future with an effective
        date
        as of the Closing Date in accordance with local custom or practice, all of
        which
        shall be in form and substance reasonably satisfactory to Buyer.

       

      7.3.  Conditions
        to Obligations of Seller.
        The
        obligation of Seller to consummate this Agreement and the transactions
        contemplated hereby are subject to the fulfillment, prior to or at the Closing,
        of the following further conditions precedent, any of which may be waived
        by
        Seller in its sole and absolute discretion:

       

      (a)  Representations;
        Warranties; Covenants.
        Each of
        the representations and warranties of Buyer contained in Section
        4
        hereof
        shall be true and correct in all material respects as though made on and
        as of
        the Closing; Buyer shall, on or before the Closing, have performed in all
        material respects all of its obligations hereunder which by the terms hereof
        are
        to be performed on or before the Closing; and Buyer shall have delivered
        to
        Seller a certificate of the President of Buyer dated as of the Closing to
        such
        effect.

       

      (b)  Buyer
        Approvals.
        Buyer
        shall have obtained all Buyer Approvals, or reasonably satisfactory evidence
        that all Buyer Approvals will be obtained in the future with an effective
        date
        as of the Closing Date in accordance with local custom or practice, all of
        which
        shall be in form and substance reasonably satisfactory to Seller.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (c)  Deliveries.
        Buyer
        shall have delivered (or caused to be delivered) the items described in
Section
        8.3
        hereof.

       

       

      SECTION
        8.
  CLOSING.

       

      8.1.  Time
        and Place of Closing.
        The
        closing of the purchase and sale provided for in this Agreement (the
“Closing”)
        shall
        be held at the offices of Goodwin Procter LLP at Exchange Place, Boston,
        Massachusetts at a date and time fixed by mutual agreement of Buyer and Seller
        provided that such date shall be not later than the later of (a) the date
        that
        is 60 days after the date hereof, or (b) within five (5) Business Days after
        the
        date on which the conditions set forth in Section
        7
        have been
        satisfied or otherwise waived (the “Closing
        Date”).
        The
        Closing shall be effective as of 12:01 a.m. Eastern Time on the Closing Date.
        

       

      8.2.  Seller’s
        Closing Deliveries.
        On the
        Closing Date, Seller shall deliver, or cause to be delivered, at its expense
        each of the following items to Buyer or its counsel:

       

      (a)  Deeds.
        A deed
        in the customary form required for each jurisdiction in which each Facility
        is
        located (with covenants of title against grantor’s acts (e.g., special
        warranty)), executed and acknowledged by Seller, conveying to Buyer fee-simple
        title to the Real Property, as provided in Section
        6.6
        (individually and collectively, the “Deed”);

       

      (b)  Bill
        of
        Sale.
        A bill
        of sale substantially in the form of Exhibit
        D
        attached
        hereto (the “Bill
        of Sale”),
        executed and acknowledged by Seller;

       

      (c)  Assignment
        and Assumption Agreement.
        An
        assignment and assumption agreement substantially in the form of Exhibit
        E
        attached
        hereto (the “Assignment
        and Assumption Agreement”),
        executed and acknowledged by Seller;

       

      (d)  Indemnification
        Escrow Agreement.
        The
        Indemnification Escrow Agreement, duly executed by each of Seller and the
        Closing Escrow Agent;

       

      (e)  Certificates
        of Title; Leases.
        Certificates of title and leases (if applicable) for the Vehicles;

       

      (f)  FIRPTA.
        An
        affidavit of Seller substantially in the form of Exhibit
        G
        attached
        hereto;

       

      (g)  Termination
        of Management Agreements.
        Terminations, effective as of the Closing Date, of any existing management
        agreements with respect to any Facility;

       

      (h)  Title
        Affidavits.
        Customary affidavits sufficient for the title company to delete any exceptions
        for parties in possession, mechanic’s or materialmen’s Liens from Buyer’s title
        policy and such other affidavits relating to such title policy as the title
        company may reasonably request;

       

      (i)  Authority.
        A
        certificate by the Secretary of Seller certifying as to (i) the incumbency
        of
        the signatories authorized to execute the closing documents required to be
        executed by Seller on behalf of Seller and (ii) the resolutions adopted by
        the
        board of directors and stockholders of Seller approving of the sale of the
        Subject Assets as contemplated hereby;

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (j)  Closing
        Statement.
        A
        counterpart original closing statement duly executed by Seller setting forth
        the
        Cash Consideration, the closing adjustments (determined as provided in
Section
        2.2
        hereof)
        and the application of the Cash Consideration as adjusted (the “Closing
        Statement”);

       

      (k)  Rent
        Roll.
        A rent
        roll, certified by Seller as of a date that is within five (5) Business Days
        of
        the Closing Date, containing the following information with respect to each
        Facility: (i) the name of each resident at such Facility; (ii) the date rent
        has
        been paid through with respect to such resident; (iii) monthly minimum rent
        for
        such resident; (iv) estimated additional charges, if any with respect to
        such
        resident; and (v) the amount of any security deposit held on behalf of such
        resident;

       

      (l)  Tenant
        Notices.
        Notices
        to residents of each Facility regarding the purchase and sale of the such
        Facility as contemplated by this Agreement;

       

      (m)  Keys.
        Keys to
        all locks on Facilities in Seller’s possession or control, if any;

       

      (n)  Tax
        Forms.
        Any and
        all transfer Tax returns, declarations of value or other documents required
        under applicable Law or necessary for recordation of the Deed; and

       

      (o)  Other.
        Such
        other instruments as Buyer may reasonably request to effectuate the transaction
        contemplated by this Agreement without additional Liability or expense to
        Seller, provided that all such requests are received by Seller no later than
        two
        (2) Business Days before the Closing Date. 

       

      8.3.  Buyer’s
        Closing Deliveries.
        On the
        Closing Date, Buyer shall deliver, or cause to be delivered, at its expense
        each
        of the following to Seller or its counsel:

       

      (a)  Assignment
        and Assumption Agreement.
        The
        Assignment and Assumption Agreement, executed and acknowledged by
        Buyer;

       

      (b)  Indemnification
        Escrow Agreement.
        The
        Indemnification Escrow Agreement, duly executed by each of Buyer and the
        Closing
        Escrow Agent.

       

      (c)  Closing
        Statement.
        The
        Closing Statement, executed by Buyer;

       

      (d)  Cash
        Consideration.
        The Cash
        Consideration (other than the Deposit Escrow Amount and the Closing Escrow
        Amount) has been delivered into the Designated Account;

       

      (e)  Closing
        Escrow Amount.
        The
        Closing Escrow Amount has been delivered into the Closing Escrow
        Account.

       

      (f)  Other.
        Such
        other instruments as Seller may reasonably request to effectuate the transaction
        contemplated by this Agreement without additional Liability or expense to
        Buyer,
        provided that all such requests are received by Buyer no later than two (2)
        Business Days before the Closing Date.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      8.4.  Delivery
        of Deposit Escrow Amount.
        On the
        Closing Date, the Deposit Escrow Agent shall deliver or cause to be delivered
        the Deposit Escrow Amount to Seller pursuant to the terms of the Deposit
        Escrow
        Agreement.

       

       

      SECTION
        9.
  TERMINATION
        OF AGREEMENT; RIGHT TO PROCEED; DEFAULT.

       

      

      9.1.  Termination.
        This
        Agreement may be terminated as follows:

       

      (a)  at
        any
        time before Closing, by written agreement of Buyer and Seller;

       

      (b)  by
        Seller,
        if the Closing shall not have been consummated on or before December 15,
        2005,
        by means of a written notice to Buyer, provided
        that such
        termination right shall not be available to Seller if Seller has failed to
        fulfill its obligations under this Agreement or if Seller’s actions or omissions
        have been a significant cause of the Closing not occurring on or before such
        date; 

       

      (c)  by
        Seller,
        on the one hand, or Buyer, on the other hand, by means of a written notice
        to
        the non-terminating party, if there shall be any Law that makes consummation
        of
        the transactions contemplated hereby illegal or otherwise prohibited, or
        if
        consummation of the transactions contemplated hereby would violate any
        nonappealable final order, decree or judgment of any Governmental Authority
        having competent jurisdiction, provided
        that such
        termination right shall not be available to any party unless such party shall
        have used its commercially reasonable efforts to oppose any such order, decree
        or judgment; 

       

      (d)  by
        Buyer
        (provided that it is not then in material breach of any representation,
        warranty, covenant or agreement contained in this Agreement) by means of
        a
        written notice to Seller if there has been a material breach by Seller of
        any
        representation, warranty, covenant or agreement set forth in this Agreement,
        which breach (1) would result in a failure to satisfy the closing
        conditions contained in Section
        7.2(a)
        and
        (2) has not been cured within ten (10) Business Days following receipt by
        Seller of notice of such breach; 

       

      (e)  by
        Seller
        (provided that it is not then in material breach of any representation,
        warranty, covenant or agreement contained in this Agreement) by means of
        written
        notice to Buyer if there has been a material breach by Buyer of any
        representation, warranty, covenant or agreement set forth in the Agreement,
        which breach (1) would result in a failure to satisfy the closing
        conditions contained in Section
        7.3(a)
        and (2)
        has not been cured within ten (10) Business Days following receipt by Buyer
        of
        notice of such breach; 

       

      (f)  by
        Seller
        pursuant to Section
        9.4
        hereof by
        means of a written notice to Buyer; or

       

      (g)  by
        Buyer
        pursuant to Section
        9.5
        hereby by
        means of a written notice to Seller.

       

      
        9.2.  Effect
          of Termination.
          Except
          as otherwise expressly provided herein, if this Agreement is terminated
          as
          permitted by Section 9.1,
          such
          termination shall be without Liability of any party hereto (or any stockholder,
          director, officer, employee, agent, consultant or representative of such
          party)
          to the other party hereto, provided
          that,
          subject to the provisions of Section
          9.4,
          nothing
          herein shall relieve any party from any Liability for any willful material
          breach of this Agreement. The provisions of Sections 2.3
          (Fees and
          Expenses), 9.2
          (Effect
          of Termination), 12.1
          (Governing Law; Consent to Jurisdiction; Waiver of Jury Trial), Section
          12.6
          (Construction) and Section
          12.16
          (Specific
          Performance) shall survive any termination hereof pursuant to Section
          9.1.
          In the
          event that this Agreement is terminated pursuant to Sections
          9.1(a),
          (b),
          (c),
          (d)
          or
(g),
          the
          Deposit Escrow Agent shall return the Deposit Escrow Amount to Buyer pursuant
          to
          the terms of the Deposit Escrow Agreement.

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      9.3.  Right
        to Proceed.

       

      (a)  Anything
        in this Agreement to the contrary notwithstanding, if any of the conditions
        specified in Section
        7.2
        hereof
        have not been satisfied, Buyer shall have the right to proceed with the
        transactions contemplated hereby, provided,
        that,
        if Buyer
        proceeds with the transactions contemplated hereby, then Seller shall have
        no
        Liability to Buyer or any other Person on account of Seller’s failure to satisfy
        such conditions in Section
        7.2
        and the
        failure to satisfy such conditions shall be irrevocably waived. 

       

      (b)  Anything
        in this Agreement to the contrary notwithstanding, if any of the conditions
        specified in Section
        7.3
        hereof
        have not been satisfied, Seller shall have the right to proceed with the
        transactions contemplated hereby, provided,
        that,
        if
        Seller proceeds with the transactions contemplated hereby, then Buyer shall
        have
        no Liability to Seller or any other Person on account of Buyer’s failure to
        satisfy such conditions in Section
        7.3
        and the
        failure to satisfy such conditions shall be irrevocably waived.

       

      9.4.  Buyer
        Default.
        Anything
        in this Agreement to the contrary notwithstanding, if all of the conditions
        set
        forth in Section 7.2
        have been
        satisfied and Buyer defaults in its obligation to close hereunder, then Seller
        shall have the right, in its sole discretion, to (i) terminate this Agreement
        and (ii) receive the Deposit Escrow Amount as liquidated damages, in lieu
        of all
        other remedies available to Seller at Law or in equity for such default.
        Seller
        and Buyer agree that the damages resulting to Seller as a result of such
        default
        by Buyer as of the date of this Agreement are difficult or impossible to
        ascertain and the liquidated damages set forth in the preceding sentence
        constitute Buyer’s and Seller’s reasonable estimate of such
        damages.

       

      9.5.  Seller
        Default.
        Anything
        in this Agreement to the contrary notwithstanding, if all of the conditions
        set
        forth in Section
        7.3
        have been
        satisfied and Seller defaults in its obligations to close hereunder, then,
        within 90 days after the date of such default, Buyer shall have the right,
        in
        its sole discretion, to take any and all legal actions necessary to compel
        Seller’s specific performance hereunder (it being acknowledged that damages at
        Law would be an inadequate remedy), and to consummate the transaction
        contemplated by this Agreement in accordance with the provisions of this
        Agreement. 

       

      9.6.  Casualty.
        If any
        of the Facilities is damaged by fire or any other casualty (the cost for
        repair
        of which is reasonably estimated to exceed an amount equal to 5% of the Cash
        Consideration) and are not substantially restored to the condition immediately
        prior to such casualty before the Closing Date, Buyer shall have the following
        elections:

       

      (a)  to
        acquire
        the Facilities in their then condition and pay the Purchase Price without
        regard
        to the casualty, in which event Seller shall pay over or assign to Buyer,
        at
        Closing, (i) all amounts recovered or recoverable by Seller on account of
        any
        insurance as a result of such casualty, less amounts reasonably expended
        by
        Seller for partial restoration; and (ii) an amount of money equal to Seller’s
        deductible; or

       

      (b)  to
        terminate this Agreement in which event the Deposit Escrow Agent shall return
        the Deposit Escrow Amount to Buyer pursuant to the terms of the Deposit Escrow
        Agreement, this Agreement shall terminate and neither Seller nor Buyer shall
        have any recourse against the other.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      9.7.  Condemnation. If
        any
        portion of or interest in a Facility shall be taken or is in the process
        of
        being taken by exercise of the power of eminent domain or if any governmental
        authority notifies Seller prior to the Closing Date of its intent to take
        or
        acquire any portion of or interest in a Facility (each an “Eminent
        Domain Taking”),
        Seller
        shall give notice promptly to Buyer of such event and Buyer shall purchase
        the
        Subject Assets (including any Facility which is the subject of an Eminent
        Domain
        Taking) and pay the Cash Consideration without deduction or credit on account
        of
        such Eminent Domain Taking, and Seller shall pay over or assign to Buyer
        on
        delivery of the deed all awards recovered or recoverable by Seller on account
        of
        such Eminent Domain Taking, less any amounts reasonably expended by Seller
        in
        obtaining such award.

       

      SECTION
        10.   SURVIVAL.

       

      10.1.  Survival
        of Representations and Warranties.
        Each of
        the representations and warranties set forth in Sections
        3
        and
4
        hereof
        are material, shall be deemed to have been relied upon by the applicable
        party,
        shall survive the execution and delivery of this Agreement and the Closing
        for a
        period of 180 days after the Closing Date, regardless of any investigation
        and
        shall not merge in the performance of any obligation by either party
        hereto.

       

      10.2.  Survival
        of Covenants.
        The
        respective covenants, agreements and obligations of the parties hereto
        (exclusive of their respective representations and warranties which shall
        survive as indicated in Section 10.1
        above)
        set forth in this Agreement are material, shall be deemed to have been relied
        upon by the other party and shall, except as otherwise expressly set forth
        herein, survive the execution and delivery of this Agreement and the Closing
        regardless of any investigation and shall not merge in the performance of
        any
        obligation by either party hereto.

       

       

      SECTION
        11.   INDEMNIFICATION.

       

      11.1.  Indemnification
        by Seller.
        Seller
        shall indemnify and hold harmless Buyer, its Affiliates and their respective
        officers, directors, members, partners and employees (individually, a
“Buyer
        Indemnified Party”
and
        collectively, the “Buyer
        Indemnified Parties”)
        from
        and against and in respect of any damages, liabilities, losses, Taxes, fines,
        penalties, costs, and expenses (including, without limitation, reasonable
        fees
        of attorneys, accountants and consultants), whether or not arising out of
        third-party claims and including all amounts paid in investigation, defense
        or
        settlement of the foregoing (“Losses”),
        which
        may be sustained or suffered by any Buyer Indemnified Party arising out of
        or
        based upon any of the following matters:

       

      (a)  any
        breach
        of any representation, warranty or covenant made by Seller in this Agreement,
        or
        by reason of any claim, action or proceeding asserted or instituted growing
        out
        of any matter or thing constituting such a breach; and

       

      (b)  any
        Excluded Liability.

       

      11.2.  Indemnification
        by Buyer.
        Buyer
        shall indemnify and hold harmless Seller, its Affiliates and their respective
        officers, directors, members, partners and employees (individually a
“Seller
        Indemnified Party”
and
        collectively the “Seller
        Indemnified Parties”)
        from
        and against any Losses which may be sustained or suffered by any Seller
        Indemnified Party arising out of or based upon any of the following
        matters:

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (a)  any
        breach
        of any representation, warranty or covenant made by Buyer in this Agreement,
        or
        by reason of any claim, action or proceeding asserted or instituted growing
        out
        of any matter or thing constituting such a breach; and

       

      (b)  any
        Assumed Liability.

       

      11.3.  Limitations
        on Indemnification.

       

      (a)  Notwithstanding
        the provisions of Sections 11.1
        and
11.2:
        (i) Seller shall not be liable for Losses under Section 11.1(a)
        hereof
        unless the aggregate amount of such losses for which the Buyer Indemnified
        Parties are entitled to be indemnified pursuant to such Section 11.1(a)
        exceeds
        US$500,000.00 (the “Seller
        Deductible”),
        at
        which time Seller shall be liable for all Losses sustained by the Buyer
        Indemnified Parties in excess of the Seller Deductible, subject to the other
        limitations set forth in this Section 11.3;
        (ii) Buyer shall not be liable for Losses under Section 11.2(a)
        hereof
        unless the aggregate amount of such Losses for which the Seller Indemnified
        Parties are entitled to be indemnified pursuant to such Section 11.2(a)
        exceeds
        US$500,000.00 (the “Buyer
        Deductible”),
        at
        which time Buyer shall be liable for all Losses sustained by the Seller
        Indemnified Parties in excess of the Buyer Deductible, subject to the other
        limitations set forth in this Section 11.3;
        (iii) the aggregate maximum liability of Seller for Losses under
Section 11.1
        shall not
        exceed the Closing Escrow Amount; and (iv) the aggregate maximum liability
        of Buyer for Losses under Section 11.2
        shall not
        exceed US$1,380,000.00. Nothing contained in this Agreement shall
        (x) prevent any Person from pursuing remedies as may be available to it
        under applicable Law in the event of (A) any party’s failure to comply with
        its indemnification obligations hereunder or (B) a case of fraud, or
        (y) limit the ability of a party to seek injunctive or similar relief
        pursuant to Section 12.16.
        The
        amount of Losses shall be reduced by any Tax benefit actually realized and
        any
        insurance proceeds received, in each case, by a party (or its Affiliates)
        seeking indemnification under this Section
        11.

       

      (b)  Except
        in
        the case of fraud or as otherwise expressly provided in this Agreement, from
        and
        after the Closing, the sole and exclusive remedy with respect to any and
        all
        Losses relating to the subject matter of this Agreement shall be pursuant
        to the
        indemnification provisions set forth in this Section
        11
        and the
        provisions of the Indemnification Escrow Agreement. Following the Closing,
        except in the case of fraud, the Liability of Seller under this Section
        11
        for any
        Losses and the right of the Buyer Indemnified Parties to seek indemnification
        for Losses under this Section
        11
        shall, in
        each case, be limited solely and exclusively to the Closing Escrow
        Amount.

       

      (c)  Payment
        of
        the Closing Escrow Amount out of the Closing Escrow Account shall be governed
        by
        the terms and conditions of the Indemnification Escrow Agreement.

       

      11.4.  Notice;
        Defense of Claims.

       

      (a)  Any
        party
        seeking indemnification under Sections 11.1
        or
11.2
        hereof
        (the “Indemnified
        Party”)
        shall
        give prompt written notice to the party against whom indemnity is sought
        (the
“Indemnifying
        Party”)
        of
        (i) the assertion of any claim by the Indemnified Party or (ii) the
        assertion by any Person of any claim, action, suit or proceeding alleging
        facts
        that, if proven true, would constitute a misrepresentation or breach of warranty
        by a party hereto; provided,
        that,
        the
        omission to so notify the Indemnifying Party promptly will not relieve the
        Indemnifying Party from any liability or obligation hereunder except to the
        extent that the Indemnifying Party shall have been actually prejudiced as
        a
        result of the failure or delay in giving such notice. Such notice shall state
        the information then available regarding the amount and nature of such claim,
        liability or expense and shall specify the provision or provisions of this
        Agreement under which the liability or obligation is asserted.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

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      (b)  With
        respect to third party claims, if within 20 days after receiving the notice
        described in clause (a) above, the Indemnifying Party gives written notice
        to the Indemnified Party stating that it disputes and intends to defend against
        such claim, liability or expense at its own cost and expense, then counsel
        for
        the defense shall be selected by the Indemnifying Party (subject to the consent
        of the Indemnified Party which consent shall not be unreasonably withheld,
        delayed or conditioned), and the Indemnified Party shall not be required
        to make
        any payment with respect to such claim, liability or expense as long as the
        Indemnifying Party is conducting a good faith and diligent defense at its
        own
        expense; provided,
        however,
        that the
        assumption of defense of any such matters by the Indemnifying Party shall
        relate
        solely to the claim, liability or expense that is subject or potentially
        subject
        to indemnification hereunder. The Indemnifying Party shall have the right,
        with
        the consent of the Indemnified Party, which consent shall not be unreasonably
        withheld, delayed or conditioned, to settle all indemnifiable matters related
        to
        claims by third parties which are susceptible to being settled provided the
        Indemnifying Party’s obligation to indemnify the Indemnified Party therefor will
        be fully satisfied. The Indemnifying Party shall keep the Indemnified Party
        apprised of the status of the claim, liability or expense and any resulting
        suit, proceeding or enforcement action, shall furnish the Indemnified Party
        with
        all documents and information that the Indemnified Party shall reasonably
        request and shall consult with the Indemnified Party prior to acting on major
        matters, including settlement discussions. Notwithstanding anything herein
        stated, the Indemnified Party shall at all times have the right to fully
        participate in such defense at its own expense directly or through counsel;
        provided,
        however,
        if the
        named parties to the action or proceeding include both the Indemnifying Party
        and the Indemnified Party and representation of both parties by the same
        counsel
        would be inappropriate under applicable standards of professional conduct,
        the
        expense of separate counsel for the Indemnified Party (selected by the
        Indemnified Party) shall be paid by the Indemnifying Party. If no such notice
        of
        intent to dispute and defend is given by the Indemnifying Party, or if such
        diligent good faith defense is not being or ceases to be conducted, the
        Indemnified Party shall, at the expense of the Indemnifying Party, undertake
        the
        defense of (with counsel selected by the Indemnified Party), and shall have
        the
        right to compromise or settle (exercising reasonable business judgment),
        such
        claim, liability or expense. If such claim, liability or expense is one that
        by
        its nature cannot be defended solely by the Indemnifying Party, then the
        Indemnified Party shall make available all information and assistance that
        the
        Indemnifying Party may reasonably request and shall cooperate with the
        Indemnifying Party in such defense. 

       

      (c)  With
        respect to non-third party claims, if within 20 days after receiving the
        notice
        described in clause (a) above, the Indemnifying Party does not give written
        notice to the Indemnified Party that it contests such indemnity claim, the
        amount of indemnity payable for such claim shall be as set forth in the
        Indemnified Party’s written notice. If the Indemnifying Party provides written
        notice to the Indemnified Party within such 20-day period that it contests
        such
        indemnity, the Indemnified Party and the Indemnifying Party shall attempt
        in
        good faith to reach an agreement with regard thereto within 30 days after
        delivery of the Indemnifying Party’s written notice. If the Indemnified Party
        and the Indemnifying Party cannot reach agreement within such 30-day period,
        the
        matter shall be submitted to a mutually agreeable third party for binding
        arbitration. If the parties cannot reach agreement with respect to the selection
        of such third party, the matter shall be submitted to J.A.M.S./ENDISPUTE
        for
        binding arbitration in Boston, Massachusetts under the rules of practice
        and
        procedure of such organization in such city. In any event, the costs of such
        arbitration shall be split equally between the Indemnified Party and the
        Indemnifying Party.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 24

        

      

       

       

      SECTION
        12.   MISCELLANEOUS.

       

      12.1.  Governing
        Law; Consent to Jurisdiction; Waiver of Jury Trial.

       

      (a)  This
        Agreement shall be construed under and governed by the internal laws of The
        Commonwealth of Massachusetts without regard to its conflict of Laws
        provisions.

       

      (b)  For
        the
        purposes of establishing the parties’ rights hereunder, each party hereto hereby
        irrevocably and unconditionally consents to submit to the exclusive jurisdiction
        of the courts of the Commonwealth of Massachusetts located in the City of
        Boston
        and of the courts of the United States of America located in the City of
        Boston,
        and each party hereto agrees not to commence any action, suit, proceeding
        or
        appeal relating thereto except in such courts. Each party hereto hereby
        irrevocably and unconditionally waives any objection to the laying of venue
        of
        any action, suit or proceeding arising out of this Agreement or the transactions
        contemplated hereby in accordance with the foregoing sentence, and hereby
        further irrevocably and unconditionally waives and agrees not to plead or
        claim
        in any such court that any such action, suit or proceeding brought in any
        such
        court has been brought in an inconvenient forum.

       

      (c)  EACH
        PARTY
        HERETO HEREBY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
        PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE)
        ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED
        DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENT OR ACTION
        RELATED HERETO OR THERETO.

       

      12.2.  Bulk
        Sales Laws.
        Buyer
        waives compliance by Seller with the provisions of any applicable bulk sales
        with the transfer of the Subject Assets under this Agreement.

       

      12.3.  Notices.
        Any
        notice, request, demand or other communication required or permitted hereunder
        shall be in writing and shall be deemed to have been duly given: (i) on
        the date of delivery, if personally delivered by hand; (ii) upon the third
        day
        after such notice is deposited in the United States mail, if mailed by
        registered or certified mail, postage prepaid, return receipt requested;
        (iii) upon the date scheduled for delivery if such notice is sent by a
        nationally recognized overnight express courier; or (iv) on the date of
        transmission, if such notice is sent by facsimile transmission, provided
        that the
        sender receives written confirmation of receipt (which may be the automatic
        confirmation printed by the sender’s fax machine).
        All
        notices to a party will be sent to the addresses set forth below or to such
        other address or person as such party may designate by notice to each other
        party hereunder:

       

       

      TO
        SELLER:                  
        Epoch
        Senior Living

      51
        Sawyer
        Road

      Suite
        500

      Waltham,
        MA 02453

      Attn:
        Laurence Gerber and Beth Anderson

      Fax:
        (781)
        398-7669

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 25

        

      

       

       

      with
        a
        copies to:

       

      Goodwin
        Procter LLP

      Exchange
        Place

      Boston,
        MA
        02109

      Attn:
        Andrew C. Sucoff, Esq.

      Fax:
        (617)
        227-8591

       

      New
        World
        Realty Management, LLC

      60
        Cuttermill Road

      Suite
        612

      Great
        Neck, NY 11021

      Attn:
        Seth
        Lipsay and Frank Adipietro

      Fax:
        (516)
        465-2801

      

      Paul,
        Hastings, Janofsky & Walker LLP

      Park
        Avenue Tower

      75
        East
        55th Street

      New
        York,
        NY 10022

      Attn:
        Gregg Miller, Esq.

      Fax:
        (212)
        230-7667

      

       

      TO
        BUYER:                   
        American
        Retirement Corporation

      111
        Westwood Place

      Suite
        200

      Brentwood,
        TN 37027

      Attn:
        W.E.
        Sheriff

      Fax:
        (615)
        221-2269

       

      with
        a
        copy to:

       

      Bass,
        Berry & Sims

      315
        Deaderick Street

      AmSouth
        Center, Suite 2700

      Nashville,
        TN 37238

      Attn:
        T.
        Andrew Smith

      Fax:
        (616)
        742-2766

      

       

      Any
        notice
        given hereunder may be given on behalf of any party by such party’s counsel or
        other authorized representatives.

       

      12.4.  Entire
        Agreement.
        This
        Agreement, including the Schedules and Exhibits referred to herein and the
        other
        writings specifically identified herein or contemplated hereby, is complete,
        reflects the entire agreement of the parties with respect to its subject
        matter,
        and supersedes all previous written or oral negotiations, commitments and
        writings. No promises, representations, understandings, warranties and
        agreements have been made by any of the parties hereto except as referred
        to
        herein or in such Schedules and Exhibits or in such other writings; and all
        inducements to the making of this Agreement relied upon by either party hereto
        have been expressed herein or in such Schedules or Exhibits or in such other
        writings.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 26

        

      

       

       

      12.5.  Assignability;
        Binding Effect.
        Buyer
        shall not assign this Agreement or its rights hereunder to any individual
        or
        entity without the prior written consent of Seller, which consent Seller
        may
        grant or withhold in its sole and absolute discretion, and any such assignment
        shall be null and void ab initio.
        Subject
        to the foregoing, this Agreement shall be binding upon and enforceable by,
        and
        shall inure to the benefit of, the parties hereto and their respective
        successors and assigns.

       

      12.6.  Construction.
        The
        parties hereto agree that they have been represented by counsel during the
        negotiation and execution of this Agreement and the other documents and
        instruments contemplated thereby and, therefore, waive the application of
        any
        Law or rule of construction providing that ambiguities in an agreement or
        other
        document will be construed against the party drafting such agreement or
        document. Unless the context of this Agreement otherwise requires, (i) words
        of
        any gender include each other gender; (ii) words using the singular or plural
        number also include the plural or singular number, respectively; (iii) the
        terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this
        entire Agreement; (iv) the terms “Section” refers to the Section of this
        Agreement; (v) the word “including” shall mean “including, without limitation;”
(vi) the word “or” shall be disjunctive but not exclusive; and (vii) the word
“agreement” shall mean any contract, commitment or other agreement, whether oral
        or written, that is legally binding. The table of contents and headings
        contained in this Agreement are for reference purposes only and shall not
        affect
        in any way the meaning or interpretation of this Agreement. References to
        agreements and other documents shall be deemed to include all subsequent
        amendments and other modifications thereto. References to statutes shall
        include
        all regulations promulgated thereunder and references to statutes or regulations
        shall be construed as including all statutory and regulatory provisions
        consolidating, amending or replacing the statute or regulation. The Schedules
        and Exhibits to this Agreement are a material part hereof and shall be treated
        as if fully incorporated into the body of the Agreement. Whenever this Agreement
        refers to a number of days, such number shall refer to calendar days unless
        Business Days are specified, and shall be counted from the day immediately
        following the date from which such number of days are to be counted.

       

      12.7.  Execution
        in Counterparts.
        For the
        convenience of the parties and to facilitate execution, this Agreement may
        be
        executed in two or more counterparts, each of which shall be deemed an original,
        but all of which shall constitute one and the same document. For the purposes
        of
        executing this Agreement, (a) a document signed and transmitted by facsimile
        machine or telecopier shall be treated as an original document; (b) the
        signature of any party on such document shall be considered as an original
        signature; (c) the document transmitted (or the document of which the page
        containing the signature or signatures of one of more parties is transmitted)
        shall have the same effect as a counterpart thereof containing original
        signatures; and (d) at the request of a party, each party who executed a
        document and transmitted such document by facsimile machine or telecopier,
        shall
        provide such original document to the other party. No party may raise as
        a
        defense to the enforcement of this Agreement or any other document required
        to
        be delivered in accordance with its terms, including any amendment thereof,
        that
        a facsimile machine or telecopier was used to transmit a signature of that
        party
        or another party on the Agreement, other document, or amendment.

       

      12.8.  Amendments
        and Waivers; Effect.
        This
        Agreement may not be amended or modified, nor may compliance with any condition
        or covenant set forth herein be waived, except by a writing duly and validly
        executed by each party hereto, or in the case of a waiver, the party waiving
        compliance. No failure or delay by any party hereto in exercising any right,
        power or privilege hereunder shall operate as a waiver thereof nor shall
        any
        single or partial exercise thereof preclude any other or further exercise
        thereof or the exercise of any other right, power or privilege. 

       

      12.9.  Third
        Party Beneficiaries.
        Except
        as otherwise expressly provided in this Agreement, this
        Agreement is for the sole benefit of the parties hereto and their permitted
        successors and assigns and nothing herein, express or implied, is intended
        to or
        shall confer upon any other Person any legal or equitable right, benefit
        or
        remedy of any nature whatsoever under or by reason of this Agreement. The
        Buyer
        Indemnified Parties and the Seller Indemnified Parties are express third
        party
        beneficiaries of this Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 27

        

      

       

       

      12.10.  Time
        of
        the Essence.
        Time is
        of the essence of this Agreement.

       

      12.11.  Use
        of
        Proceeds to Clear Title.
        To
        enable Seller to make conveyance as herein provided, Seller may, at the time
        of
        Closing, use the Purchase Price or any portion thereof to clear the title
        of any
        or all encumbrances or interests, provided that provision reasonably
        satisfactory to Buyer’s attorney is made for prompt recording of all instruments
        so procured in accordance with conveyancing practice in the jurisdiction
        in
        which a Facility is located.

       

      12.12.  Submission
        not an Offer or Option.
        The
        submission of this Agreement or a summary of some or all of its provisions
        for
        examination or negotiation by Buyer or Seller does not constitute an offer
        by
        Seller or Buyer to enter into an agreement to sell or purchase the Facilities,
        and neither party shall be bound to the other with respect to any such purchase
        and sale until a definitive agreement satisfactory to Buyer and Seller in
        their
        sole discretion is executed and delivered by both Seller and Buyer.

       

      12.13.  Designee.
        In order
        to comply with information reporting requirements of Section 6045(e) of the
        Code
        and the Treasury Regulations, the parties agree (i) to execute an IRS Form
        1099-S Designation Agreement at or prior to the Closing to designate the
        Title
        Company (the “Designee”)
        as the
        party who shall be responsible for reporting the contemplated sale of the
        Subject Assets to the Internal Revenue Service (the “IRS”)
        on IRS
        Form 1099-S; (ii) to provide the Designee with the information necessary
        to
        complete Form 1099-S; (iii) that the Designee shall not be liable for the
        actions taken under this Agreement, or for the consequences of those actions,
        except as they may be the result of gross negligence or willful misconduct
        on
        the part of the Designee; and (iv) that the Designee shall be indemnified
        by the
        parties for any costs or expenses incurred as a result of the actions taken
        hereunder, except as they may be the result of gross negligence or willful
        misconduct on the part of the Designee. The Designee shall provide all parties
        to this transaction with copies of the IRS Forms 1099-S filed with the IRS
        and
        with any other documents used to complete IRS Form 1099-S.

       

      12.14.  Severability.
        In the
        event that any provision of this Agreement, or the application thereof, becomes
        or is declared by a court of competent jurisdiction to be illegal, void or
        unenforceable, the remainder of this Agreement will continue in full force
        and
        effect and the application of such provision to other Persons or circumstances
        will be interpreted so as reasonably to effect the intent of the parties
        hereto.
        The parties further agree to replace such void or unenforceable provision
        of
        this Agreement with a valid and enforceable provision that will achieve,
        to the
        extent possible, the economic, business and other purposes of such void or
        unenforceable provision.

       

      12.15.  Other
        Remedies.
        Except
        as otherwise provided herein, any and all remedies herein expressly conferred
        upon a party will be deemed cumulative with and not exclusive of any other
        remedy conferred hereby, or by Law or equity upon such party, and the exercise
        by a party of any one remedy will not preclude the exercise of any other
        remedy.

       

      12.16.  Specific
        Performance.
        The
        parties hereto agree that irreparable damage would occur in the event that
        any
        of the provisions of this Agreement were not performed in accordance with
        their
        specific terms or were otherwise breached. It is accordingly agreed that
        the
        parties shall be entitled to seek an injunction or injunctions to prevent
        breaches of this Agreement and to enforce specifically the terms and provisions
        hereof in any court of the United States of America or any state having
        jurisdiction, this being in addition to any other remedy to which they are
        entitled at Law or in equity. Notwithstanding the foregoing to the contrary,
        the
        provisions of Section
        9.4
        shall
        control over any inconsistent provisions of this Section
        12.16.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 28

        

      

       

       

      12.17.  Certain
        Defined Terms.
        For
        purposes of the Agreement, the following terms have the following
        meanings:

       

      “Affiliate”
means,
        with respect to any Person, any other Person that directly, or indirectly
        through one or more intermediaries, controls or is controlled by, or is under
        common control with, the Person specified, where “control”
means
        the possession, directly or indirectly, of the power to direct the management
        and policies of a Person whether through the ownership of voting securities
        or
        otherwise. For all purposes of this Agreement, East-West HR LLC and its members,
        directors and officers shall all be deemed Affiliates of Seller.

      

      “Business
        Day”
means
        any day of the year on which national banking institutions in The Commonwealth
        of Massachusetts are open to the public for conducting business and are not
        required to close.

      

      “Closing
        Escrow Agent”
means
        Chicago Title Insurance Company.

      

      “Code”
means
        the Internal Revenue Code of 1986, as amended.

      

      “Governmental
        Authority”
means
        any government, any governmental entity, department, commission, agency,
        board,
        authority, official, and any regulatory, administrative or other body or
        instrumentality, and any court, tribunal, or judicial or arbitral body, whether
        multinational, national, United States federal, state or local.

      

      “Law”
or
        “Laws”
means
        all laws, statutes, ordinances, rules, regulations, orders, decrees, common
        law
        and other requirements having the force of law promulgated by any Governmental
        Authority, including, without limitation, treaty provisions (including, without
        limitation, all directives and regulations thereunder), which are applicable
        to
        a specified Person, in each case, whether multinational, national, United
        States
        federal, state or local, or arising out of or under international treaty
        or
        compact (including, without limitation, all directives and regulations
        thereunder).

      

      “Liability”
or
        “Liabilities”
mean
        any
        liability, debt, obligation, deficiency, Tax, penalty, assessment, fine,
        claim,
        cause of action or other loss, fee, cost or expense of any kind or nature
        whatsoever, whether asserted or unasserted, absolute or contingent, known
        or
        unknown, accrued or unaccrued, liquidated or unliquidated, and whether due
        or to
        become due and regardless of when asserted.

      

      “Lien”
means,
        with respect to any asset, any mortgage, lien, license, pledge, charge, security
        interest, restriction or encumbrance of any kind in respect of such
        asset.

      

      “Material
        Adverse Effect”
means
        a
        material adverse effect on (a) the business, condition (financial or other),
        assets, liabilities or results of operations of Seller or (b) the ability
        of the Seller to perform its obligations pursuant to this Agreement and to
        consummate the transactions contemplated hereby in a timely manner.

      

      “Permitted
        Liens”
means
        (i) Liens for Taxes or other governmental charges, assessments or levies
        which
        are not delinquent, (ii) landlord’s, mechanic’s, carrier’s, workmen’s,
        repairmen’s or other similar Liens arising or incurred in the ordinary course of
        business consistent with past practice which do not materially detract from
        the
        value of the property encumbered thereby, (iii) minor imperfections of title,
        conditions, easements and reservations of rights, including easements and
        reservations of, or rights of others for, rights of way, sewers, electric
        lines,
        telegraph and telephone lines and other similar purposes, encroachments,
        covenants and restrictions including such matters disclosed on the existing
        owner’s title policies (not including Monetary Liens); and (iv) subject to the
        provisions of Section
        2.2(a)
        hereof,
        any inchoate Liens for ad valorem
        Taxes.
        Notwithstanding the foregoing, as of the Closing Date, no Monetary Lien shall
        be
        considered to be a Permitted Lien.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Purchase
            and Sale Agreement - Page 29

        

      

      
 

      “Person”
means
        an
        individual, corporation, partnership, association, trust or other entity
        or
        organization, including, without limitation, any Governmental
        Authority.

      

      “Tax”,
        “Taxes”
and
        “Taxation”
means
        all multinational, national, United States federal, state and local net income,
        alternative or add-on minimum, estimated, gross income, gross receipts, sales,
        use, ad valorem,
        value
        added, transfer, franchise, capital profits, lease, service, license,
        withholding, payroll, employment, excise, severance, stamp, occupation, premium,
        property, environmental, business or windfall profit taxes, customs duties
        and
        other taxes, governmental fees and other like assessments and charges of
        any
        kind whatsoever (including Tax liabilities incurred or borne as a transferee
        or
        successor, or by contract or otherwise), together with all interest, penalties,
        additions to tax and additional amounts with respect thereto. 

       

      “Treasury
        Regulations”
means
        the regulations, including proposed regulations and temporary regulations,
        promulgated by the U.S. Department of the Treasury under the Code, as
        amended.

       

       

       

      [Remainder
        of Page Intentionally Left Blank]

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Signature
            Page to Purchase and Sale Agreement

        

      

      

      IN
        WITNESS
        WHEREOF the parties hereto have caused this Agreement to be executed as of
        the
        date set forth above by their duly authorized representatives.

       

       

       

      
        	 	SELLER: 
	 	 	 
	 	EPOCH
                SL VI, INC. 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	BUYER: 
	 	 	 
	 	AMERICAN
                RETIREMENT CORPORATION 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      EXHIBIT
        A

       

      List
        of Facilities

       

      

      
        	
                Facility

              
	
                 

                1. Denver
                  Project located in Denver, Colorado 

              
	
                 

                2. Tucson
                  Project located in Tucson, Arizona

              
	
                 

                3. Roswell
                  Project located in Roswell, Georgia 

              
	
                 

                4. Houston
                  Project located in Houston, Texas 

              
	
                 

                5. Sun
                  City Project located in Sun City, Arizona 

              
	
                 

                6. Overland
                  Park Project located in Overland Park, Kansas 

              
	
                 

                7. Las
                  Vegas Project located in Las Vegas, Nevada 

              
	
                 

                8. Minnetonka
                  Project located in Minnetonka,
                  Minnesota

              

      

       

       

      
        
          
          

        

        
          Exhibit
            A

          
            

          

        

        
          
          

        

      

      
 

      EXHIBIT
        B

       

      Legal
        Description of Land

       

      (attached)

       

       

       

      
        
          Exhibit
            B

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      EXHIBIT
        C

       

      Form
        of Deposit Escrow Agreement

       

      Escrow
        Officer:

      Escrow
        No.:

      Phone
        No.:

      Facsimile
        No.:

      Date:
        

       

      
        	TO:	
                Chicago
                  Title Insurance Company (“Title
                  Company”)

              
	
              	Suite
                805 
	 	75
                Federal Street 
	 	Boston,
                MA 02110

      

       

      The
        amount
        of US$5,000,000.00 (such amount, together with interest, if any, earned thereon
        is collectively referred to as the “Escrow
        Deposit”)
        is
        being deposited in escrow with the Title Company by American Retirement
        Corporation (the “Buyer”)
        under
        that certain Purchase and Sale Agreement (as the same may be amended from
        time
        to time, the “Agreement”)
        dated
        September 8, 2005, by and between Buyer and Epoch SL VI, Inc. (the “Seller”).

       

      As
        escrowee, you are hereby directed to hold, deal with and dispose of the Escrow
        Deposit in accordance with the following terms and conditions (the “Escrow
        Instructions”):

       

      1. You
        are to
        hold the Escrow Deposit until: (i) you are in receipt of a joint order by
        the
        undersigned Seller and Buyer as to the disposition of the Escrow Deposit;
        or
        (ii) you are in receipt of a written demand (the “Demand”)
        from
        either Seller or Buyer for the payment of the Escrow Deposit or any portion
        thereof. Upon receipt of any Demand (other than a Demand from Buyer as provided
        in Section 6.4 of the Agreement prior to the Inspection Period Expiration),
        you
        are directed to so notify the other party, enclosing a copy of the Demand.
        If
        within five (5) days after the non-demanding party has received or is deemed
        to
        have received your notice of your receipt of the Demand, you have not received
        from the non-demanding party its notice of objection to the Demand, then
        you are
        to disburse the Escrow Deposit as requested by the Demand. If within said
        five-day period you receive from the non-demanding party its notice of objection
        to the Demand, then you are to continue to hold the Escrow Deposit until
        you are
        in receipt of a joint order as aforesaid, but after sixty (60) days you may
        deposit the Escrow Deposit with a court of competent jurisdiction.

       

      2. Notwithstanding
        the foregoing, as escrowee, you are hereby expressly authorized and directed
        to
        regard and to comply with and obey any and all orders, judgments or decrees
        entered or issued by any court having jurisdiction over the subject matter
        hereof, and provided you obey or comply with any such order, judgment or
        decree
        of any court, you shall not be liable to either of the parties hereto or
        any
        other person or entity by reason of such compliance, notwithstanding any
        such
        order, judgment or decree be entered without jurisdiction or be subsequently
        reversed, modified, annulled, set aside or vacated. In case of any suit or
        proceeding regarding the Escrow Instructions, to which you are or may at
        any
        time be a party, the undersigned Seller and Buyer agree that the non-prevailing
        party shall pay to you upon demand all reasonable costs and expenses incurred
        by
        you in connection herewith.

       

       

      
        
          
          

        

        
          Exhibit
            C - Page
            1

          
            

          

        

        
          
          

        

      

       

       

      3. Any
        escrow
        fee to be charged by you is to be borne equally by the undersigned Seller
        and
        Buyer.

       

      4. As
        escrowee, you shall invest the Escrow Deposit in an interest-bearing savings
        or
        money market account or short term U.S. Treasury Bills or similar cash
        equivalent securities, as the undersigned Buyer may direct. Any interest
        earned
        on the Escrow Deposit, after you deduct your customary investment charges,
        shall
        in all events be for Buyer’s benefit.

       

      5. All
        notices or other communications hereunder shall be in writing and shall be
        personally delivered or sent by overnight courier (such as Federal Express),
        by
        facsimile transmission or by first class United States Mail, postage prepaid,
        registered or certified (return receipt requested) to the respective addresses
        for Seller and Buyer as provided for in the Agreement and for escrowee as
        provided herein. A notice is given on the date it is personally delivered,
        sent
        by overnight courier or facsimile transmission, or deposited with the United
        States Mail for delivery as aforesaid. A notice is received on the date it
        is
        personally delivered, the day after sent if sent by overnight courier or
        facsimile transmission or, if sent by mail as aforesaid, on the date noted
        on
        the return receipt.

       

      6. The
        Escrow
        Instructions are being entered into to implement the Agreement and shall
        not
        (nor be deemed to.) amend, modify or supersede the Agreement or act as a
        waiver
        of any rights, obligations or remedies set forth therein; provided, however,
        that you may rely solely upon the Escrow Instructions.

       

      7. The
        duties
        of the Title Company shall be determined solely by the express provisions
        of the
        Escrow Instructions and are purely ministerial in nature. If there is any
        dispute between the parties hereto as to whether or not the Title Company
        is
        obligated to disburse or release the funds held under and pursuant to the
        Escrow
        Instructions, the Title Company shall not be obligated to make such disbursement
        or delivery, but in such event shall hold the funds until receipt by the
        Title
        Company of an authorization in writing signed by all persons having an interest
        in said dispute, directing the disposition of the funds, or in the absence
        of
        such authorization, the Title Company shall hold the funds until a final
        determination of the rights of the parties in an appropriate proceeding (a
        “Final
        Determination”).
        If
        such written authorization is not given, or proceedings for such determination
        are not begun and diligently continued, the Title Company may, but is not
        required to, retain counsel and bring an appropriate action or proceeding
        for
        leave to deposit the funds pending such determination. The Title Company
        shall
        be reimbursed for all costs and expenses incurred by it in connection with
        such
        action or proceeding, including reasonable attorneys’ fees and disbursements, by
        the parties hereto. Upon delivery of the funds as provided herein, the Title
        Company shall have no further liability hereunder. If threatened with
        litigation, the Title Company is hereby authorized by the undersigned to
        interplead all interested parties in any court of competent jurisdiction
        and to
        deposit the funds with the clerk of the court, and thereupon the Title Company
        shall be fully relieved and discharged of any further responsibility under
        the
        Escrow Instructions.

      

      8. 
        The Title
        Company shall not be liable for any mistake of fact or error of judgment
        or any
        acts or omissions of any kind unless caused by its willful misconduct or
        gross
        negligence. The parties hereto each release the Title Company from liability
        for
        any act done or omitted to be done by the Title Company in good faith (and
        without gross negligence or willful misconduct) in the performance of its
        obligations and duties hereunder. The Title Company shall be entitled to
        rely on
        any instrument or signature believed by it to be genuine and may assume that
        any
        person purporting to give any writing, notice, or instruction in connection
        with
        the Escrow Instructions is duly authorized to do so by the party on whose
        behalf
        such writing, notice, or instruction is given.

       

       

      
        
          
          

        

        
          Exhibit
            C -
            Page 2

          
            

          

        

        
          
          

        

      

       

       

      9. 
        The
        undersigned hereby jointly and severally indemnify the Title Company for
        and
        hold it harmless against any loss, liability, or expense incurred without
        negligence or bad faith on the part of the Title Company arising out of or
        in
        connection with the acceptance of or the performance of its duties under
        the
        Escrow Instructions, as well as the costs and expenses, including reasonable
        attorneys' fees and disbursements, of defending against any claim or liability
        arising under the Escrow Instructions.

      

      10. 
        The
        Escrow Instructions may be executed in any number of counterparts, each of
        which
        shall be deemed an original but all of which together shall constitute one
        and
        the same instrument.

      

      11.
         The
        Escrow
        Instructions may not be changed or modified except as agreed in a writing
        signed
        by each of the parties hereto. The Escrow Instructions shall be binding upon
        and
        inure to the benefit of the parties and their respective heirs, successors
        and
        assigns.

      
 

       

      [Remainder
        of Page Intentionally Left Blank]

      
 

      
        
          
          

        

        
          Exhibit
            C - Page
            3

          
            

          

        

        
          
          

        

      

       

      

      Agreed
        and
        Acknowledged this ____ day of September, 2005.

       

      
         

        
          	 	SELLER: 
	 	 	 
	 	EPOCH
                  SL VI, INC. 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	BUYER: 
	 	 	 
	 	AMERICAN
                  RETIREMENT CORPORATION 
	 	 	 
	 	By:	 
	 	 	 
	 	 	 
	 	
                	 
	 	ESCROW
                  AGENT:
	 	CHICAGO
                  TITLE INSURANCE COMPANY
	 	 	 
	 	By:	 
	 	 	David
                  J. Buczkowski
	 	 	Assistant
                  Vice President and Commercial
	 	 	Underwriting
                  Counsel 

        

         

      

       

      
        
          
          

        

        
          Exhibit
            C -
            Page 4

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
        D

       

      Form
        of Bill of Sale

       

      EPOCH
        SL VI,
        Inc., a Delaware corporation (“Seller”),
        for
        good and valuable consideration paid to it, receipt and sufficiency of which
        is
        hereby acknowledged, and notwithstanding that the following property may
        be
        conveyed by separate and specific transfer documents, by these presents,
        does
        hereby sell, convey, transfer, assign and deliver unto American Retirement
        Corporation, a Tennessee corporation (“Buyer”),
        pursuant to the Purchase and Sale Agreement by and between Seller and Buyer
        dated as September __, 2005 (as the same may have been amended from time
        to
        time, the “Purchase
        Agreement”),
        all of
        its rights, title and interest in and to the Subject Assets (as defined in
        the
        Purchase Agreement).

       

      TO
        HAVE AN
        TO HOLD, the Subject Assets unto Buyer and its successors and assigns, to
        and
        for its or their use forever,

       

      If
        requested, Seller shall execute and deliver such other documents, certificates,
        agreements and other writings and take such other actions as may be reasonably
        necessary or desirable in order to consummate or implement expeditiously
        the
        transactions contemplated by the Purchase Agreement and to vest in Buyer
        the
        Subject Assets.

       

      IN
        WITNESS
        WHEREOF, Seller has caused this Bill of Sale to be signed by its duly authorized
        officer as of ____________, 2005.

       

       

      
        
           

          
            	 	SELLER: 
	 	 	 
	 	EPOCH
                    SL VI, INC. 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

          

          
 

        

      

       

      [Remainder
        of Page Intentionally Left Blank]

      
 

      
        
          
          

        

        
          Exhibit
            D -
            Page 1

          
            

          

        

        
          
          

        

      

      

       

      
        	
                STATE
                  OF 

              	 	
                )

              	 
	
              	
              	
                )

              	
                SS.

              
	
                COUNTY
                  OF 

              	 	
                )

              	 

      

      

       

      I,
        _____________________, a notary public in and for said County, in the State
        aforesaid, DO HEREBY CERTIFY that ______________________ personally known
        to me
        to be the __________________ of _______________________________________,
        a
        _________, and personally known to me to be the same person whose name is
        subscribed to the foregoing instrument, appeared before me this day in person
        and acknowledged that as such _____________, he/she signed and delivered
        the
        said instrument, pursuant to authority, given by the Board of Directors of
        said
        corporation as his/her free and voluntary act, and as the free and voluntary
        act
        of said corporation, for the uses and purposes herein set forth.

       

      GIVEN
        under my hand and official seal this _____ day of ___________,2005.

       

      
         

        
          	 	Notary
                  Public
	 	 	 
	 	 
	 	My
                  Commission Expires:	 
	 	 	 

        

      

       

       

      
        
          
          

        

        
          Exhibit
            D -
            Page 2

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
        E

      

      Form
        of Assignment and Assumption Agreement

      

      This
        Assignment and Assumption Agreement (the “Agreement”)
        is
        entered into as of the ___ day of _________, 2005, by and between EPOCH
        SL VI,
        Inc., a Delaware corporation (“Assignor”),
        and
        American Retirement Corporation, a Tennessee corporation (“Assignee”).

      

      W
        I T N E
        S S E T H:

      

      WHEREAS,
        this Agreement is being delivered pursuant to a Purchase and Sale Agreement
        by
        and between Assignor and Assignee dated as of September __, 2005 (as the
        same
        may have been amended from time to time, the “Purchase
        Agreement”)
        by
        which Assignor is selling to Assignee substantially all of the assets of
        Assignor’s business; and

      

      WHEREAS,
        Assignee has agreed to assume certain specified liabilities and obligations
        of
        Assignor as described below.

      

      NOW,
        THEREFORE, in consideration of the mutual representations, warranties, covenants
        and agreements contained in the Purchase Agreement and for other good and
        valuable consideration set forth in the Purchase Agreement, the receipt and
        sufficiency of which are hereby acknowledged and accepted, and upon the terms
        and subject to the conditions set forth in the Purchase Agreement, Assignor
        does
        hereby sell, convey, transfer, assign and deliver to Assignee all of the
        Subject
        Assets and Assignee does hereby assume the Assumed Liabilities. Capitalized
        terms used in this Agreement without definition shall have the meanings given
        to
        such terms in the Purchase Agreement. This Agreement is subject to all of
        the
        terms and conditions of the Purchase Agreement, as such Purchase Agreement
        may
        be amended from time to time.

      

      This
        Agreement shall be binding upon and inure to the benefit of the parties hereto
        and their respective successors and permitted assigns.

      

      This
        Agreement may be executed in any number of counterparts, all of which taken
        together shall constitute one and the same instrument.

      

      

      

      [Remainder
        of Page Intentionally Left Blank]

       

       

      
        
          
          

        

        
          Exhibit
            E -
            Page 1

          
            

          

        

        
          
          

        

      

       

       

      IN
        WITNESS
        WHEREOF the parties hereto have caused this Agreement to be executed as of
        the
        date set forth above by their duly authorized representatives.

       

      
         

        
          	 	SELLER: 
	 	 	 
	 	EPOCH
                  SL VI, INC. 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	BUYER: 
	 	 	 
	 	AMERICAN
                  RETIREMENT CORPORATION 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

        

         

      

       

      
        
          
          

        

        
          Exhibit
            E -
            Page 2

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
        F

       

      Form
        of Indemnification Escrow Agreement

       

      (Attached)

      
 

      
        
          
          

        

        
          Exhibit
            F

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
        G

       

      Form
        of FIRPTA Affidavit

       

      Section
        1445 of the Internal Revenue Code of 1986, as amended, provides that a
        transferee of a United States real property interest must withhold tax if
        the
        transferor is a foreign person. To inform the Transferee (hereinafter defined)
        that withholding of tax is not required upon the disposition of a United
        States
        real property interest by Epoch SL VI, Inc., a Delaware corporation (the
        “Transferor”),
        to
        American Retirement Corporation, a Tennessee corporation (the “Transferee”),
        the
        undersigned, being first duly sworn upon oath, does hereby depose and say,
        and
        does hereby certify the following on behalf of the Transferor:

       

      1. 
The
        undersigned is the ____________________ of the Transferor and is familiar
        with
        the business of the Transferor;

       

      2. 
The
        Transferor is not a foreign person; that is, the Transferor is not a nonresident
        alien, a foreign corporation, foreign partnership, foreign trust or foreign
        estate (as all such terms are defined in the Internal Revenue Code of 1986,
        as
        amended, and United States Treasury Department Income Tax Regulations in
        effect
        as of the date hereof);

       

      3. 
The
        Transferor is a corporation duly organized, validly existing and in good
        standing under the laws of the State of Delaware;

       

      4. 
The
        Transferor’s United States employer identification number is
        __________;

       

      5. 
The
        Transferor’s office address and principal place of business is
        ___________________; and

       

      6. 
This
        certificate and affidavit is made to induce the Transferee to consummate
        the
        transactions contemplated by the Transferor and Transferee.

       

      The
        Transferor understands that this affidavit and certification may be disclosed
        to
        the United States Internal Revenue Service by the Transferee and that any
        false
        statement contained herein could be punished by fine, imprisonment, or
        both.

       

      Under
        penalties of perjury, the undersigned declares that he has examined this
        affidavit and certificate, and to the best of the undersigned’s knowledge and
        belief, it is true, correct and complete. The undersigned further declares
        that
        he has authority to sign this affidavit and certificate on behalf of the
        Transferor.

       

      

      
        
          
          

        

        
          Exhibit
            G - Page
            1

          
            

          

        

        
          
          

        

      

       

       

      This
        affidavit and certificate is executed and delivered as of the ___ day of
        _______________, 2005.

       

       

      
        	 	 
	 	
                a

              	 
	 	 	 	 
	 	
                By:

              	 	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 

      

       

      
         

        
          	
                  STATE
                    OF 

                	 	
                  )

                	 
	
                	
                	
                  )

                	
                  SS.

                
	
                  COUNTY
                    OF 

                	 	
                  )

                	 

        

        
 

      

      I,
        _____________________, a notary public in and for said County, in the State
        aforesaid, DO HEREBY CERTIFY that ______________________ personally known
        to me
        to be the __________________ of _______________________________________,
        a
        _________, and personally known to me to be the same person whose name is
        subscribed to the foregoing instrument, appeared before me this day in person
        and acknowledged that as such _____________, he/she signed and delivered
        the
        said instrument, pursuant to authority, given by the Board of Directors of
        said
        corporation as his/her free and voluntary act, and as the free and voluntary
        act
        of said corporation, for the uses and purposes herein set forth.

       

      GIVEN
        under my hand and official seal this _____ day of ___________,2005.

       

      
         

        
          	 	Notary
                  Public
	 	 	 	 
	 	 
	 	
                   

                	 	 
	 	My
                  Commission Expires:	 
	 
	 

        

      

       

       

      
        
          
          

        

        
          Exhibit
            G -
            Page 2

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