Common use of Buyer’s Due Diligence Clause in Contracts

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review Buyer shall have sixty (60) days from the Effective Date to complete Buyers Due Diligence (the “Due Diligence Period”); provided, however, that if Seller does not deliver the Due Diligence Items in the time frames set forth in Section 10(a)(v) below, the Due Diligence Period shall be extended on a day-by-day basis for each day of delay in delivery of the operating statements of Due Diligence Items beyond the Property for time periods set forth in Section 10(a)(v) below. During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and each Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which each Facility (or the receipt Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of each Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for each Facility; (vi) Inspection of the books and records of each Facility and that portion of the Seller’s books and records which pertain to the Facilities; (vii) Review of the Due Diligence Items, with as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facilities; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facilities, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State relating to the Facilities; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facilities in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 10(a)(v) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants whom shall also not disclose the Property Information to third parties; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facilities shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facilities shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facilities. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering each Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement indefinitely. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facilities to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to each Facility (the Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to any Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Dateexpiration of the Due Diligence Period, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit Critical Repairs shall be returned listed on a new Schedule 6(f) to Buyerbe attached to the Agreement. Seller shall make all Critical Repairs listed in the Inspection Report to such Facility at least ten (10) business days prior to the Closing, as Buyerat Seller’s sole cost and exclusive remedyexpense (not to exceed One Hundred Thousand Dollars ($100,000) per Facility (“Seller’s Critical Repair Cap”)). It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, shall be responsible for any reason Critical Repair costs for any Facility over the Seller’s Critical Repair Cap. Seller shall deliver to Buyer a completion letter or for no reason, similar notice documenting the completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall not be obligated to give any explanation to Seller constructed in connection therewitha workmanlike manner and in accordance with all applicable laws.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have sixty (60) days from the Effective Date to complete Buyers Due Diligence (the “Due Diligence Period”); provided, however, that if Seller does not deliver the Due Diligence Items in the time frames set forth in Section 10(a)(v) below, the Due Diligence Period shall be extended on a day-by-day basis for each day of delay in delivery of the Due Diligence Items beyond the time periods set forth in Section 10(a)(v) below. Seller shall obtain the consent of SHI to Buyer’s review of entry on the operating statements of Real Property and the Property for Facility as provided herein. During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) is a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Survey, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; (which x) Review of files maintained by the State relating to the Facility; (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Survey (or caused surveys) that it currently has in its possession; (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(aor for employees; and (xiv) herein)Review of the Option Agreement, the Exercise Notice (as defined below) and all amendments and modifications thereto. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 10(a)(v) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants whom shall also not disclose the Property Information to third parties; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement indefinitely. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facility to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to each Facility (the Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to any Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Dateexpiration of the Due Diligence Period, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit Critical Repairs shall be returned listed on a new Schedule 6(f) to Buyerbe attached to the Agreement. Seller shall make all Critical Repairs listed in the Inspection Report to such Facility at least ten (10) business days prior to the Closing, as Buyerat Seller’s sole cost and exclusive remedyexpense (not to exceed One Hundred Thousand Dollars ($100,000) (“Seller’s Critical Repair Cap”)). It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, shall be responsible for any reason Critical Repair costs for any Facility over the Seller’s Critical Repair Cap. Seller shall deliver to Buyer a completion letter or for no reason, similar notice documenting the completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall not be obligated to give any explanation to Seller constructed in connection therewitha workmanlike manner and in accordance with all applicable laws.

Buyer’s Due Diligence. Buyer shall be allowed have the right for a period ending at 5:00 pm Seattle time on December 13, 2006 (the “Contingency Period”), to inspect the Property and all books and records maintained by or for Sellers with respect to the Property and the operation thereof, and to conduct the following due diligence prior to purchasing such investigations, tests and studies (including without limitation environmental investigations, tests and studies, and zoning, land use, and building regulations affecting the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently Buyer may deem necessary or appropriate in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently its sole discretion in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. order to determine if Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether desires to purchase the Property. In The costs and expenses of such inspection, investigations, tests and studies shall be borne solely by Buyer. To facilitate Buyer’s inspection and review, Sellers agree that upon Buyer’s acceptance of this Agreement, Sellers shall furnish to Buyer the event the transaction contemplated herein does not close for any reason whatsoever, following information and documents and Buyer shall immediately return the environmental reports promptly acknowledge in writing to Seller.Sellers its receipt of each listed item: (fi) Buyer’s review a current rent roll, certified as true and correct to Sellers’ knowledge, and copies of existing leases and all amendments thereto; (ii) a copy of Sellers’ current title insurance policy; (iii) a copy of any environmental or hazardous waste inspection reports in Sellers’ possession; (iv) the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver ALTA Survey obtained by Sellers at the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt time of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase acquisition of the Property. Moreover, and any as built surveys and updates to the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items ALTA Survey in Sellers’ possession or control; (v) aerial and who are informed by the Buyer premises photographs of the confidential nature Land and Buildings in Sellers’ possession, if any; (vi) a copy of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items all “as-built” plans and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions specifications with respect to the Due Diligence Items. The Buyer agrees Buildings that Sellers possess, together with a copy of all engineering, soils, seismic and structural reports, if it or its Representatives commit any, in Sellers’ possession; (vii) a breach list of any all personal property, included in the Property, if any; (viii) a summary of the provisions of this Confidentiality Requirement, Seller shall have the right historic and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition current operating costs of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost itemized by year and expenseby month and by account; (ix) all assessments, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with all certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller)occupancy, and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary relevant permits required for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; ; (x) maintenance records, Service Contracts and (v) if other contracts or documents to which each Seller has audited financial statements with respect is a party that relate to the Propertyownership, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect operation, repair, maintenance or leasing of the Property Property. Additionally, during the Contingency Period, Sellers shall furnish to Buyer or make available to Buyer for a fiscal period prior review at Sellers’ offices such other documents, materials and information in Seller’s possession and relating to the Closing Date that was not completed Property as Buyer shall reasonably request. All information provided by Sellers to Buyer or obtained by Buyer relating to the Property in the course of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It its review shall be a condition precedent to the obligations of treated as confidential information by Buyer under this Agreement that Seller shall have complied in accordance with the covenants set forth in this subsection (h) as provisions of the Closing DateParagraph 30 hereof. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects Costs to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at update any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit such information shall be returned to borne by Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of obligation is is not conditioned on the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently Due Diligence as 17 defined in Seller’s Possession. (cthis section 7(A) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possessionbelow. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller This condition is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.Condition” if checked in the affirmative, 18 Sections 7 (A) through (C) shall apply; otherwise they do not. Buyer hereby acknowledges shall have calendar days following the receipt date of 19 Acceptance of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents RPA (which will be delivered or caused as defined in Section 23 herein) to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at complete Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the PropertyDiligence. Seller agrees to provide cooperate with 20 Buyer’s Due Diligence. Seller shall ensure that all necessary utilities (gas, power and water) and all operable pilot lights 21 are on for Buyer’s investigations and through the close of escrow. 23 A. PROPERTY INSPECTION/CONDITION: During the Due Diligence Period, Buyer access shall take such action 24 as Buyer deems necessary to determine whether the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to, whether the 25 Property is insurable to Buyer’s satisfaction, whether there are unsatisfactory conditions surrounding or otherwise affecting the immediate removal 26 Property (such as location of anything placed on flood zones, airport noise, noxious fumes or odors, environmental substances or hazards, whether 27 the Property in connection with such Tests. Copies is properly zoned, locality to freeways, railroads, places of worship, schools, golf courses, etc.) or any reports, letters or other written information generated as a result of such Tests shall be provided concerns 28 Buyer may have related to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of During such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this AgreementPeriod, Buyer shall give Seller written notice (“Notice have the right to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceedconduct, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Datenon-invasive/ non-destructive 29 inspections of all structural, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyerroofing, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretionmechanical, for any reason or for no reasonelectrical, plumbing, heating/air conditioning, water/well/septic, pool/spa, 30 survey, square footage, and shall not be obligated to give any explanation to Seller in connection therewith.other property or systems, through licensed and bonded contractors or other qualified

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s Buyer shall have until 5:00 p.m. (PST) on May 23, 2005 (the “Due Diligence Period”) to make such inquiries and review such documents regarding the market conditions, the financial and physical condition of the operating statements of Property, environmental matters, zoning, governmental compliance, financing and such other inquiries and documents as Buyer deems appropriate. Buyer shall have reasonable access to the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performingmaking, at Buyer’s sole cost and expense, studiessurveys, physical inspectionssoil tests, inspections and other investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without tenant interviews upon at least two twenty-four (224) business days hours prior telephone or written notice to Seller (which notice may be by telephone); provided, however, that (a) except as provided below, Buyer shall permit representatives of Seller to be present during any and Seller’s prior approval of all such Testssurveys, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited tests, inspections and investigations, (b) without obtaining Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole reasonable discretion. Invasive Tests hereunder include, but are (i) Buyer shall only conduct visual inspections, and (ii) Buyer shall not limited to make excavations or test borings, drill wxxxx, or engage in any tests activities in, on or testing beyond around the Property that damage the Property (provided, however, that nothing herein shall prohibit Buyer or any of its engineers or contractors from performing non-invasive activities such as a Phase I environmental site assessmentassessment or report, such as collecting testing for mold, moisture-related conditions, asbestos and asbestos containing materials, seismic evaluations, air quality tests or testing asbestos, water, radon, soil or air samplesany similar test which does not result in any material damage to the Property) and (c) Buyer’s investigation of the Property shall be subject to the rights of existing tenants. Buyer’s access is further conditioned on right of entry onto the Property shall be for the limited purpose of performing such surveys, tests, inspections and investigations, and tenant interviews and Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests shall have insurance in types and amounts satisfactory no right to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereofuse the Property for any other purpose until after the Closing. Buyer shall be required to conduct such Tests surveys, tests, inspections and investigations in a manner as not unreasonably disruptive to not disturb tenants or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect . Notwithstanding anything to the Propertycontrary contained herein, Seller shall promptly provide Buyer’s auditors request of California Casualty Management Company that Buyer have the opportunity to conduct one or more interviews and other meetings with a copy representatives of such audited financial statements. If after the Closing Date California Casualty Management Company without any representatives or agents of Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Datebeing present, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement provided that Seller shall have complied with the covenants set forth not be in this subsection (h) as default of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.if California Casualty Management Company refuses to

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have seventy-five (75) days from the period commencing from the date Buyer notifies Seller that it has received the requested Due Diligence material required to complete Buyer’s review of Due Diligence (the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date“Due Diligence Period”). (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and each Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which each Facility (or the receipt Seller, on behalf of such Facility) are a party, as set forth on Schedule 8.6 attached hereto; (ii) Obtain an environmental investigation (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of each Facility; (iv) Review of current Title Commitments, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for each Facility; (vi) Inspection of the books and records of each Facility and that portion of the Seller’s books and records which pertain to the Facilities; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Complete such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facilities; (ix) View resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facilities, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review files maintained by the State of Oregon relating to the Facilities; and (xi) Review all drawings, plans and specifications and all engineering reports for the Facilities in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will and/or the contents thereof or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facilities shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facilities shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facilities. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering each Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed, and Buyer shall provide copies of all final reports (except for appraisals or attorney-client communications) be disclosed by received from such third parties (the “Third Party Reports”) to Seller within ten (10) days of Buyer or by its Representativesreceiving the Third Party Reports. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or resulting from Buyer’s exercise of its right of inspection as provided for in connection with any Tests made this Section 6; provided, however, such indemnification shall not extend to matters merely discovered by Buyer and/ or the acts or omissions of Seller or any third party, except for the acts or omissions of Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the PropertyConsultants. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the Closing or earlier termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facilities to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on On or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1, 2008 (the “Approval Date”)last day of the Due Diligence Period, Buyer elects shall provide Seller with copies of all Third Party Reports and provide Seller with notice that: (i) The inspections and audits are not acceptable to proceed Buyer in its sole and absolute discretion and Buyer terminates this Agreement, and in such event, neither party shall have any further rights and obligations under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before except the Approval Date. Upon giving obligations which expressly survive the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement; or (ii) Provide Seller with written notice that the inspections and the Deposit shall be returned audits are acceptable to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered absolute discretion. (f) If this Agreement is terminated prior to Closing, for any reason or for no reason, and Buyer shall not be obligated to give any explanation promptly return to Seller in connection therewithor destroy all copies of the Due Diligence items.

Buyer’s Due Diligence. As of the Effective Date, the Buyer shall be allowed agrees to conduct use its best efforts to further develop the following due diligence prior Software Products, to purchasing market the Property:Software Products, to increase demand for the Software Products and to make the Software Products a financially successful line of business. (a) Buyer’s review For a period of two years following the Effective Date, the Buyer agrees that, should the Buyer fail to achieve the goals set forth in the plan attached hereto as Schedule 5.13 ("Breach"), such Breach shall create an option ("Option") for the Seller to require the Buyer to transfer to the Seller all of the operating statements of Buyer's right title and interest in the Software Products along with any updates or derivative works created based upon the Software Products, the Collateral Material, the Intellectual Property for and the previous two right to receive Software Products Licensing Revenue with respect to any existing contract (2) calendar years as well as collectively, the current calendar year-to-date"Collateral"). (b) Buyer’s review At any time after the Option is created until two years after the Effective Date, the Seller may exercise the Option after a Breach by providing the Buyer written notice that the Buyer must cure the Breach within sixty (60) days. If the Buyer cures the Breach, then the Option shall not be exercisable. If the Buyer does not cure the Default or the Breach within sixty (60) days from the date of copies the notice, then the Buyer shall deliver to the Seller the Collateral and an executed document assigning the Collateral to the Seller. Such transfer of a current rent roll and any tenant leasesthe Collateral shall satisfy the obligations under the Note only to the extent of the value of the Collateral as of the date of the transfer. If Seller fails to exercise the Option within two years after the date of this Agreement, and any amendments and modifications thereto, currently in Seller’s Possessionthen the option shall cease to exist. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items Seller exercises the Option, the Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) indemnify, defend and further that the Due Diligence Items will be kept confidential at all times by Buyer hold Seller and its agentsSeller's shareholders, directors, officers, employees and representatives (collectively the “Representatives”; agents, and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential respective heirs, administrators, successors and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt assigns of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase each of the Property. Moreoverforegoing, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirementclaim, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liabilitydamage, loss, costliability, damagejudgment, fine, penalty, assessment, settlement, cost or expense (including, without limitation, attorney’s reasonable expenses of investigation, reasonable attorneys' fees and costs) which Seller may sustain other reasonable legal costs and expenses incident to any of the foregoing or incur by reason to the enforcement of this Section, whether or not suit is brought or, if brought, whether or not such suit is successful in whole or in part arising out of or relating to, arising from or out of any the Collateral in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with which the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision principal event giving rise thereto occurred subsequent to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed Effective Date and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of date the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and transfers the foregoing covenant shall survive Closing. It shall be a condition precedent Collateral to the obligations Seller or which result from or arise out of any action or inaction subsequent to the Effective Date of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as or any director, officer, employee or agent of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. As provided in Paragraph 6(a) hereof, Meridian, at Meridian's sole expense, shall provide Buyer shall be allowed to conduct with the following due diligence prior to purchasing the Propertydocumentation: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date.Phase I Environmental Study; (b) Buyer’s review Copies of copies of a current rent roll and any tenant all existing leases, and any amendments and modifications thereto, currently in Seller’s Possession.; (c) Buyer’s review of copies of any site plans Seller certified income and building drawings and specifications currently in Seller’s Possession ..expense operating statements on the property for calendar year 1996; (d) Buyer’s review Any title work previously done by or on behalf of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements.; (e) Buyer’s review of certain environmental Surveys, engineering reports prepared for Seller and currently any other material information relating to the building in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller.'s possession; (f) Buyer’s review Copies of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, contracts with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Testsservice providers, including, but not limited to, those more particularly set forth in Exhibit "D"; and (g) City of Reading Code Enforcement Office inspection of the Real Property satisfactory to the immediate removal Buyer. In the event that any of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) foregoing documentation reveals conditions which Seller may sustain or incur by reason of or in connection with any Tests made are deemed by Buyer or Buyer’s agents or contractors relating to or in connection with be unsatisfactory, then the PropertyBuyer shall, or entries by Buyer or its agents or contractors onto within 45 days of the Property. Notwithstanding any provision date of the Agreement, deliver written notification thereof to the contrary in Seller and thereupon, at Buyer's sole option, Buyer may declare this Agreement, in writing, to be null and void and all Deposit Monies, together with all interest thereon, shall thereupon be returned forthwith to Buyer with no further obligations or liabilities on either party. If no such declaration is submitted by the indemnity obligations Buyer within said 45 day period, this contingency will be waived and all other terms and conditions will remain in full effect. In addition, Buyer shall designate, in writing, the items set forth in Exhibit "B" that shall constitute the Personal Property, and shall deliver such designation to Seller within twenty (20) days of Buyer under this Agreement shall survive any termination the date of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession deliver all of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Personal Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that however, Seller's failure to deliver all of the Personal Property to Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated an event of default hereunder, nor shall it affect Buyer's obligation to give any explanation pay the full Purchase Price, so long as Seller delivers substantially all of the Personal Property to Seller in connection therewithBuyer at the time of Closing.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s Buyer shall have until October 13, 2004 to make such inquiries and review such documents regarding market conditions, the financial and physical condition of the operating statements of Property, zoning, governmental compliance, financing and such other inquiries and documents as Buyer deems appropriate (the "Due Diligence Period") Notwithstanding the foregoing, Buyer shall have until September 30, 2004 to make such inquiries and review such documents regarding environmental and engineering matters. Buyer shall have reasonable access to the Property for the previous two purpose of making, at Buyer's sole cost and expense, surveys, soil tests, inspections and other investigations on business days upon at least twenty-four (224) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in hours prior written notice to Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice conduct such inspections in a manner not disruptive to tenants or to the operation of the Property. Buyer shall not contact any tenant at the Property or any governmental authority with respect to the Property without Seller's consent, which consent shall not be unreasonably withheld, delayed or conditioned, and, in the case of any contact with any tenant, without a representative of Seller no less than being present. Seller shall also make available for inspection by Buyer copies of all reports, leases, correspondence, contracts, studies, permits, warranties, litigation files, and other items respecting the Property as Seller currently has in its immediate possession. In addition to the foregoing, within three (3) business days prior to after the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticedate hereof, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports deliver to Buyer for informational purposes only and Buyer shall not rely on copies of such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that following respecting the Property as Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller currently has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, its or in Seller’s its property management company’s, manager's possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, control: (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase most recent survey of the Property; (ii) the covenants Tenant Leases and a schedule of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreementsecurity deposits with respect thereto; (iii) Buyer shall be permitted to disclose such information as may be recommended the Service Contracts; (iv) operating statements for the previous three (3) years; (v) a current rent roll; (vi) an inventory list of Personal Property; (vii) the real and personal property tax bills for the previous three (3) years; (viii) the utility bills for the previous twelve (12) months; (ix) environmental reports; (x) engineering reports; (xi) notices of violations or claims by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commissionthird parties; and (ivxii) any duty such other documents or reports in Seller's possession as reasonably requested by Buyer during the Due Diligence Period. Buyer shall undertake such inspections and reviews with commercially reasonable diligence and effort. Buyer shall maintain commercial general liability insurance with a reputable insurer licensed in the state in which the Property is located, with a Best's rating of confidentiality set forth A10 or better, providing minimum limits of liability of One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000) aggregate, with an umbrella excess liability policy in this Agreement minimum amount of Five Million Dollars ($5,000,000) per occurrence bodily injury/property and Five Million Dollars ($5,000,000) aggregate damage/occurrence, which policy or policies shall terminate upon Closingname Seller as additional insured and Buyer shall provide Seller with a copy of said insurance certificate. The Buyer hereby releases shall provide notice to Seller not less than fifteen (15) days prior to cancellation of said insurance policy. Any phase I environmental report and discharges any asbestos survey shall be conducted at Buyer's expense by consultants selected by Buyer and all claims it may have against Seller reasonably acceptable to Seller. Additionally, on or its consultant arising out of before the delivery expiration of the Due Diligence Items Period, Buyer shall notify Seller in writing if Buyer elects not to the Buyer or assume at Closing any inaccuracy of the Due Diligence Items unless otherwise expressly provided Service Contracts, and in this Agreement. Furthersuch event, the Buyer hereby agrees to indemnify Seller shall give notice of termination of such disapproved Service Contract(s) and hold Seller harmless from shall pay any and all claims arising out fees of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated compensation due thereunder as a result of such Tests termination. (b) On or before the expiration of the Due Diligence Period, Buyer shall be provided have the right to terminate this Agreement for any reason in Buyer's sole discretion by delivering to Seller if written notice of its decision to terminate this Agreement. If Buyer elects to terminate this Agreement, Escrow Agent shall return all documents and funds, except for the sale contemplated by this Agreement does not close for Nonrefundable Deposit in accordance with Section 2(b) herein) and, previously deposited into escrow to the party so depositing same and neither party shall have any reason. further liability to the other hereunder, except as otherwise provided herein. (c) Buyer shall (i) indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, lossclaims, costdemands, damagedamages or expenses of any kind, including reasonable attorneys' fees, caused, directly or indirectly, by, or expense in any manner relating to, such entry upon the Property or the making of such tests and investigations or for any damages to the Property caused thereby and (includingii) restore the Property as nearly as practicable to the condition existing immediately prior to the performance of such tests and investigations. This subsection 5(c) shall survive the termination of, without limitationor the closing of the transactions contemplated by, attorney’s fees and coststhis Agreement for forty-five (45) which Seller may sustain or incur by reason of or days. Notwithstanding anything to the contrary in connection with any Tests made the foregoing, the mere discovery by Buyer in the course of its tests and investigations of a condition existing on the Property at such time shall not cause Buyer to be liable for the cure or remediation of the same except to the extent Buyer’s agents 's negligence or contractors relating willful misconduct shall cause such condition to become aggravated or except to the extent the need for remediation is caused by Buyer's negligence or willful misconduct (other than due to its discovery of such condition or any reporting arising therefrom). (d) If the Closing does not take place for any reason whatsoever, Buyer shall not, directly or indirectly, disclose to any person or party (other than counsel, accountants, advisors, investors, lenders, and the like) or use in any manner any non-public information of Seller acquired by Buyer with respect to Seller or the Property, except as may be required by law. Upon termination of this Agreement for any reason other than Closing, Buyer shall return to Seller within ten (10) days after such termination any and all documents, information and property of Seller in Buyer's possession or control and, if requested by Seller, shall also deliver to Seller copies of all third-party surveys, tests and investigations prepared by or for the benefit of Buyer in connection with the Property, or entries Property requested by Buyer or its agents or contractors onto Seller provided Seller pays one-half (1/2) of Buyer's actual out-of-pocket costs incurred in obtaining the Propertysame. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement This subsection 5(d) shall survive any the termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreementfor one (1) year. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have sixty (60) days from the Effective Date to complete Buyer’s review Due Diligence (the “Due Diligence Period”); provided, however, that if Seller does not deliver the Due Diligence Items in the time frames set forth in Section 10(a)(v) below, the Due Diligence Period shall be extended on a day-by-day basis for each day of delay in delivery of the operating statements of Due Diligence Items beyond the Property for time periods set forth in Section 10(a)(v) below. During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State relating to the Facility; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 10(a)(v) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by resulting from Buyer or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facility to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6. Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to the Facility (the Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to the Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed the expiration of the Due Diligence Period, and the Critical Repairs shall be listed on or before 5:00 p.m. Central Standard Time on a new Schedule 6(f) to be attached to the Approval Date, this Agreement shall immediately terminate (except for Agreement. For the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination purposes of this AgreementSection 6(f), the term “Critical Repairs” means any observed deficiencies that require action as a result of the following: (i) existing or potentially unsafe (health & safety) conditions; (ii) material building code violations; and/or (iii) a condition that has the potential to result in, or contribute to, the failure of a critical element or system failure within one (1) year, or a significant escalation if left uncorrected. Seller shall make all Critical Repairs listed in the Inspection Report to such Facility at least ten (10) business days prior to the Closing, at Seller’s sole cost and expense. Seller shall deliver to Buyer a completion letter or similar notice documenting the Deposit completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall be returned to Buyer, as Buyer’s sole constructed in a workmanlike manner and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithaccordance with all applicable laws.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have sixty (60) days from the Effective Date to complete Buyer’s due diligence review of the operating statements of Property (the Property for “Due Diligence Period”). During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Obtain an environmental investigation (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current Title Commitment, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Complete such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) View resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review files maintained by the State of Oregon relating to the Facility; and (xi) Review all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and PURCHASE AND SALE AGREEMENT Gateway / Summit Healthcare REIT, Inc. (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(aor for employees. (xiv) hereinSuccessful negotiation of Lease with Sapphire Health Services (“New Operator”), Buyer’s tenant. (xv) Successful negotiation of Operations Transfer Agreement between Seller’s operating entity and New Operator (“Operations Transfer Agreement”). The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 10(a)(v) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same the Due Diligence Items to Buyer. (b) Buyer hereby agrees and acknowledges that: (i) Buyer agrees to hold in confidence and will not disclose the Due Diligence Items and/or the contents thereof or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants and Buyer shall use commercially reasonable efforts to ensure that the Due Diligence Items will be relied upon at are held in confidence by Buyer’s own risk Consultants; (except ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the extent otherwise truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly set forth contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and further that investigations at the Due Diligence Items will Facility shall be kept confidential at all times conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and a Phase I Environmental Audit covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed, and Buyer shall provide copies of all final reports (except for appraisals or attorney-client communications) be disclosed by received from such third parties (the “Third Party Reports”) to Seller within ten (10) days of Buyer or by its Representativesreceiving the Third Party Reports. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or resulting from Buyer’s exercise of its right of inspection as provided for in connection with any Tests made this Section 6; provided, however, such indemnification shall not extend to matters merely discovered by Buyer and/ or the acts or omissions of Seller or any third party, except for the acts or omissions of Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the PropertyConsultants. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the Closing or earlier termination of this Agreement Agreement. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Real Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect Facility to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement condition in respect of the Property for a fiscal period which they existed immediately prior to the Closing Date that was not completed as of the Closing Datesuch audit or inspection. PURCHASE AND SALE AGREEMENT Gateway / Summit Healthcare REIT, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection Inc. (he) as of the Closing Date. If on On or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1, 2008 (the “Approval Date”)last day of the Due Diligence Period, Buyer elects shall provide Seller with copies of all Third Party Reports and provide Seller with notice that: (i) The inspections and audits are not acceptable to proceed Buyer in its sole and absolute discretion and Buyer terminates this Agreement, and in such event, neither party shall have any further rights and obligations under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before except the Approval Date. Upon giving obligations which expressly survive the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement; or (ii) Provide Seller with written notice that the inspections and the Deposit shall be returned audits are acceptable to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered absolute discretion. (f) If this Agreement is terminated prior to Closing, for any reason or for no reason, and Buyer shall not be obligated to give any explanation promptly return to Seller in connection therewithor destroy all copies of the Due Diligence items.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have sixty (60) days from the Effective Date to complete Buyer’s due diligence review of the operating statements of Property (the Property for “Due Diligence Period”). During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Obtain an environmental investigation (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current Title Commitment, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Complete such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) View resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations; and (which x) Review files maintained by the State of Oregon, if applicable, relating to the Facility; and (xi) Review all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(aor for employees; and (xiv) hereinSuccessful negotiation of the Post Closing Lease with Seller or Seller’s affiliate, as operator (“Operator”), and Buyer. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 10(a)(v) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same the Due Diligence Items to Buyer. (b) Buyer hereby agrees and acknowledges that: (i) Buyer agrees to hold in confidence and will not disclose the Due Diligence Items and/or the contents thereof or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants and Buyer shall use commercially reasonable efforts to ensure that the Due Diligence Items will be relied upon at are held in confidence; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer’s own risk ; (except iii) Seller has not undertaken any independent investigation as to the extent otherwise truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly set forth contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and further that investigations at the Due Diligence Items will Facility shall be kept confidential at all times conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and a Phase I Environmental Audit covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed, and Buyer shall provide copies of all final reports (except for appraisals or attorney-client communications) be disclosed by received from such third parties (the “Third Party Reports”) to Seller within ten (10) days of Buyer or by its Representativesreceiving the Third Party Reports. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or resulting from Buyer’s exercise of its right of inspection as provided for in connection with any Tests made this Section 6; provided, however, such indemnification shall not extend to matters merely discovered by Buyer and/ or the acts or omissions of Seller or any third party, except for the acts or omissions of Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the PropertyConsultants. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the Closing or earlier termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facility to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on On or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1, 2008 (the “Approval Date”)last day of the Due Diligence Period, Buyer elects shall provide Seller with copies of all Third Party Reports and provide Seller with notice that: (i) The inspections and audits are not acceptable to proceed Buyer in its sole and absolute discretion and Buyer terminates this Agreement, and in such event, neither party shall have any further rights and obligations under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before except the Approval Date. Upon giving obligations which expressly survive the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement; or (ii) Provide Seller with written notice that the inspections and the Deposit shall be returned audits are acceptable to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered absolute discretion. (f) If this Agreement is terminated prior to Closing, for any reason or for no reason, and Buyer shall not be obligated to give any explanation promptly return to Seller in connection therewithor destroy all copies of the Due Diligence items.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have forty-five (45) days from the Effective Date to complete Buyer’s review of Due Diligence (the operating statements of “Due Diligence Period”). During the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and each Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase commercially reasonable due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which each Facility (or the receipt Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of each Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for each Facility; (vi) Inspection of the books and records of each Facility and that portion of the Seller’s books and records which pertain to the Facilities; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facilities; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facilities, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State relating to the Facilities; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facilities in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth herein, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. Any extension of the Due Diligence Period pursuant to this paragraph shall also extend the Closing Date as agreed by the parties. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facilities shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facilities shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facilities. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering each Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of the deed Real Property and the transfer of title pursuant Facilities to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (terminate this Agreement, and in such event, the “Approval Date”)Initial Deposit shall be refunded to Buyer, Buyer elects to proceed and neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third-party inspection report with respect to each Facility (the “Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to any Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed the expiration of the Due Diligence Period, and the Critical Repairs shall be listed on or before 5:00 p.m. Central Standard Time on a new Schedule 6(f) to be attached to the Approval Date, this Agreement shall immediately terminate (except for Agreement. For the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination purposes of this AgreementSection 6(f), the term “Critical Repairs” means any observed deficiencies that require action as a result of the following: (i) existing or potentially unsafe (health & safety) conditions; (ii) material building code violations; and/or (iii) a condition that has the potential to result in, or contribute to, the failure of a critical element or system failure within one (1) year, or a significant escalation if left uncorrected. Seller shall make all Critical Repairs listed in the Inspection Report to such Facility at least ten (10) business days prior to the Closing, at Seller’s sole cost and expense. Seller shall deliver to Buyer a completion letter or similar notice documenting the Deposit completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall be returned to Buyer, as Buyer’s sole constructed in a workmanlike manner and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithaccordance with all applicable laws.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice have ninety (90) days from the period commencing from the date Buyer notifies Seller that it has received the requested Due Diligence materials required to Seller no less than three complete Buyers Due Diligence (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice“Due Diligence Period”), Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) are a party, as set forth on Schedule 8.6 attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State and/or the Texas Department of Aging and Disability Services (“DADS”) relating to the Facility; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its managers, officers, partners, employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, costdamages and liabilities, damage, or expense (including, including without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of Real Property and Facility to the deed and the transfer of title pursuant condition in which they existed immediately prior to this Agreementsuch audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon written notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force be terminated prior to Closing, Buyer shall promptly return or destroy all copies of the Due Diligence Items and effectdeliver any reports concerning the Property to Seller. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to the Facility (the “Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to the Facility, Buyer shall provide Seller with written notice of the same prior to the expiration of the Due Diligence Period, and the Critical Repairs shall be listed on a new Schedule 6(f) to be attached to the Agreement. Seller shall notify Buyer of the estimated cost of making the Critical Repairs. So long as the total cost of all Critical Repairs does not provide exceed One Hundred Thousand and No/100 Dollars ($100,000.00), Seller shall make all Critical Repairs listed in the Notice Inspection Report to Proceed on the Facility, at Seller’s sole cost and expense, within six months following the Closing. Upon completion of the Critical Repairs, Seller shall deliver to Buyer a completion letter or before 5:00 p.m. Central Standard Time similar notice documenting the completion of the Critical Repairs (the “Critical Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the Critical Repairs. If the estimated total cost of all Critical Repairs listed on the Approval DateInspection Report exceeds $100,000.00, this Agreement Buyer shall immediately terminate have the option of (except for i) waiving the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of requirement that the Critical Repairs be made or (ii) terminating this Agreement) and , in which case the Deposit Deposits shall be returned to Buyer, as Buyer’s sole Buyer shall promptly return or destroy all copies of the Due Diligence Items and exclusive remedy. It is understood and agreed that Buyer may refuse or fail deliver any reports concerning the Property to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reasonSeller, and the parties shall not be obligated have no further obligation to give any explanation to Seller in connection therewiththe other except those agreements that specifically survive termination of this Agreement, including the Confidentiality Agreement.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review Buyer shall have sixty (60) days from the Effective Date to complete Buyers Due Diligence (the “Due Diligence Period”); provided, however, that if Seller does not deliver the Due Diligence Items in the time frames set forth in Section 10(a)(v) below, the Due Diligence Period shall be extended on a day-by-day basis for each day of delay in delivery of the operating statements of Due Diligence Items beyond the Property for time periods set forth in Section 10(a)(v) below. During the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) are a party, as set forth on Schedule 8.6 attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State relating to the Facility; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants whom shall also not disclose the Property Information to third parties; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement indefinitely. Following any audit or inspection as provided for herein, Buyer shall return the delivery of Real Property and Facility to the deed and the transfer of title pursuant condition in which they existed immediately prior to this Agreementsuch audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to the Facility (the “Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to the Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Dateexpiration of the Due Diligence Period, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit Critical Repairs shall be returned listed on a new Schedule 6(f) to Buyerbe attached to the Agreement. Seller shall make all Critical Repairs listed in the Inspection Report to the Facility at least ten (10) business days prior to the Closing, as Buyerat Seller’s sole cost and exclusive remedyexpense (not to exceed One Hundred Thousand Dollars ($100,000) (“Seller’s Critical Repair Cap”)). It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, shall be responsible for any reason Critical Repair costs over the Seller’s Critical Repair Cap. Seller shall deliver to Buyer a completion letter or for no reason, similar notice documenting the completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall not be obligated to give any explanation to Seller constructed in connection therewitha workmanlike manner and in accordance with all applicable laws.

Buyer’s Due Diligence. 6.1 During the period commencing on the Effective Date and ending at 5:00 p.m. (Central Time) on November 15, 2016 (the “Due Diligence Period”), subject to the provisions of Section 6.2 herein, and upon at least forty-eight (48) hours’ notice delivered to Xxx Xxxxxx, Seller will permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects and engineers designated by Buyer and representatives of Buyer (collectively, the “Buyer’s Consultants”) access to, and entry upon the Real Property and the Facilities, so long as Buyer’s Consultants are accompanied by Seller or its agents, to perform its normal and customary due diligence. Due diligence, whether at the Facilities or otherwise, shall be allowed to conduct include, without limitation, the following due diligence prior to purchasing the Propertyfollowing: (a) Buyer’s review Review of the operating statements Leases, contracts (“Contracts”) and agreements to which the Facilities (or the Seller, on behalf of the Property for Facilities) are a party or which are related to the previous two (2ownership or operation of the Facilities as set forth on Schedule 6.1(a) calendar years as well as the current calendar year-to-date.attached hereto; (b) Buyer’s review of copies of Environmental investigations (including a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession.Phase 1 Environmental Audit); (c) Buyer’s review Inspection of copies the physical structure of any site plans and building drawings and specifications currently in Seller’s Possession ..the Facilities; (d) BuyerReview of current Title Commitments, as defined in Section 16.1 herein, and underlying documents referenced therein; (e) Review of land title Surveys that Seller currently has in its possession, as defined in Section 16 herein, for the Facilities; (f) Inspection of the books and records of the Facilities and that portion of the Seller’s books and records which pertain to the Facilities; (g) Review of the Due Diligence Items, as described in Schedule 6.1(g) attached hereto; (h) Such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Facilities; (i) Resident files, agreements, and any other documentation regarding the residents of the Facilities, which review will in all events be subject to all applicable laws, rules and regulations concerning the review of copies medical records and other types of patient records; and (j) Files maintained by the State of Texas or its subdivisions and/or the U.S. Department of Health and Human Services, or other governmental agencies relating to the Facilities and the operation thereof (collectively, the “Governmental Authorities”). 6.2 Notwithstanding the foregoing provisions of this Subsection, Seller shall deliver all Due Diligence Items listed in Schedule 6.1(g) within ten (10) business days of the Effective Date (the “Production Period”), as specified in Schedule 6.1(g). In the event Seller fails to deliver all Due Diligence Items listed in Schedule 6.1(g) within ten (10) business days of the Effective Date, then the Due Diligence Period will be deemed extended on a day-to-day basis until Seller completes such delivery of the Due Diligence Items to Buyer. 6.3 Promptly upon request by Seller, at the conclusion of the Production Period, Buyer shall acknowledge and affirm that, to its knowledge, it has received all Due Diligence Items listed on Schedule 6.1(g) or provide Seller with written notice delivered by Buyer to Seller at the address set forth in Section 18 herein of any maintenance and service agreements currently in force and in Seller’s Possessionsuch Due Diligence Items Buyer has yet to receive (“Additional Due Diligence Notice”). Should Seller reasonably disagree with Buyer as to whether additional Due Diligence items are due, Seller shall provide written have the right to terminate this Agreement by providing notice to Seller no less than Buyer (the “Diligence Disagreement Notice”) within one (1) business day after receipt of the Additional Due Diligence Notice; provided, however, that, notwithstanding the foregoing, for a period of three (3) business days prior following delivery to Buyer of the Diligence Disagreement Notice, Buyer may deliver written notice to Seller that Buyer has revoked its Additional Due Diligence Notice, in which event the Diligence Disagreement Notice shall be deemed cancelled and this Agreement shall not be terminated. Following delivery of the Diligence Disagreement Notice, and provided Buyer does not timely deliver a revocation thereof pursuant to this Section 6.3, the Deposit shall be returned to Buyer in accordance with this Agreement and this Agreement shall be deemed terminated. Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items listed in Schedule 6.1(g), then the Due Diligence Period will be deemed extended for a period equal to the Approval Date number of those agreements business days from Seller’s receipt of the Additional Due Diligence Notice from Buyer wishes to assume. In the absence until Seller completes delivery of such notice, Seller shall terminate all agreementsidentified Due Diligence Items to Buyer. (e) 6.4 Reviews, inspections and investigations at the Facilities will be conducted by Buyer in such manner so as not to disrupt the operation of the Facilities. Furthermore, Buyer will not inform anyone, including any employee, agent or resident of the Facilities, of Buyer’s review of certain environmental purpose in visiting the Facilities. 6.5 Buyer may, at its sole cost, obtain third party engineering and physical condition reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports Phase I Environmental Audits covering the Facilities certified to Buyer for informational purposes only and Buyer shall not rely on such prepared by an engineering and/or environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. consultants (f“Consultants”) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same acceptable to Buyer; provided that such documents and other items are in Seller’sprovided, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and no inspection by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk Consultants will involve the taking of samples or other physically invasive procedures (except to such as a Phase II environmental audit) without the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall will not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (including, without limitation, attorney’s fees damages and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulationsliabilities, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with attorneys’ fees incurred in connection therewith) arising out of or resulting from Buyer’s auditors exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification will not extend to any pre-existing conditions existing or discovered by Buyer as a result of said activities and/or the preparation acts or omissions of such audited financial statements (it being understood and agreed that Seller or any third party, except for the foregoing covenant shall survive the Closing). Without limiting the generality acts or omissions of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statementsConsultants. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations The indemnification obligation of Buyer under this Section 6 will survive the Closing or earlier termination of this Agreement that Seller shall have complied with for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer will return the covenants set forth Real Property and the Facilities to the condition in this subsection (h) as which they existed immediately prior to such audit or inspection. 6.6 If the results of the Closing Date. If foregoing inspections and audits are acceptable to Buyer in its sole and absolute discretion, Buyer may, upon written notice to Seller given on or before 5:00 p.m. (Central Standard Time Time) on October 1the last day of the Due Diligence Period approve all of such matters described in this Section 6. Failure by Buyer to deliver such notice of approval in a timely manner will be deemed to constitute Buyer’s disapproval of the matters described in this Section 6 and termination of this Agreement as to the Facilities, 2008 (the “Approval Date”)and in such event, Buyer elects to proceed neither party will have any further rights and obligations under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time except for obligations which expressly survive the termination of this Agreement. If this Agreement is terminated prior to 5:00 p.m. Central Standard Time the expiration of the Due Diligence Period, (a) Buyer will promptly return all copies of Seller’s documents (other than copies retained for the purpose of complying with audit or compliance procedures) and deliver to Seller any reports obtained by Buyer that relate to the Facilities or the Real Property (excluding any proprietary materials and materials subject to the attorney-client and/or work product privilege), and (b) Escrow Agent will promptly return (i) to Buyer the refundable portion of the Deposit and all interest accrued thereon, and (ii) to Seller and Buyer, all documents deposited by them respectively, which are then held by Escrow Agent. 6.7 Seller hereby covenants and agrees that, prior to the Closing, Seller shall (at its sole cost and expense) cause to be completed all material capital improvements and material Facilities renovations, subject to a cap of Twelve Thousand Five Hundred Dollars ($12,500.00) per Facility, identified in writing by Buyer and delivered to Seller on or before the Approval Dateexpiration of the Due Diligence Period. Upon giving The Parties agree that the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations term “material” means any repair related item that affects licensure of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithFacility.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice have until 12.00 p.m. Washington, DC time Friday, November 18, 2005 (the "STUDY PERIOD") to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made perform a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase feasibility study of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items at Buyer's sole cost and who are informed by the Buyer of the confidential nature of the Due Diligence Items. Howeverexpense, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreementincluding, (i) Buyer may disclose the Due Diligence Items but not limited to, review and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review approval of the physical and environmental characteristics and condition of the Property and performance of marketing and feasibility studies, structural and engineering investigations, auditing of books and records of the Property, financial analyses and verification of existing zoning. Seller agrees to provide Buyer and its agents and representatives, upon at least two (2) business days advance written notice, reasonable access to the Property during normal business hours, subject to the rights of tenants, and at the property manager's office to all books, records, files, financial data, leases and contracts relating to the Property (except Seller's corporate or partnership records, financial projections, budgets, appraisals, accounting and tax records and similar proprietary, confidential or privileged documents, reports and records and internally prepared memoranda and reports) and to reasonably cooperate in such examinations and to cause the property manager to reasonably cooperate in such examinations following the Agreement Effective Date for the purpose of performing, at Buyer’s 's sole cost and expense, the above-referenced studies, physical inspections, investigations and tests on the Property (collectively, the “Tests”"TESTS") provided that no such Tests tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and if any such Tests are invasive Seller’s 's prior approval of such Tests, which approval shall not be unreasonably withheldin Seller's sole and absolute discretion. Seller’s execution The parties acknowledge that Buyer may be required to perform a historical audit of the Property in order to comply with Item 3-14 of Regulation S-X promulgated under the Securities Act of 1933 and the Securities Exchange Act of 1934 (the "3-14 Report") and Seller shall take commercially reasonable efforts to allow Buyer's auditors access to all of Property's books and records and the certified operating statements and property management balance sheet for the Property for three (3) calendar years prior to the date of the acquisition of the Property to enable Buyer to comply with any such regulations applicable to Buyer. Such books and records shall include the detailed general ledger of profits and loss, accounts receivable records, rent rolls and lease agreements. Buyer's access rights shall continue until the earlier to occur of (i) the date Buyer gives Seller notice of termination of this Agreement or (ii) the successful completion of the audit and the filing of the 3-14 Report with the Securities and Exchange Commission, but in no event any later than ninety (90) days after Closing. Notwithstanding anything herein to the contrary, Buyer shall constitute its not need Seller's further consent to a non-invasive conduct Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereofstudies. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property or the rights of the tenants at the Property and upon completion of such Tests, Buyer agrees at its sole cost to promptly restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate prompt removal of anything placed on the Property in connection with such Tests. Copies Seller shall have the right to have a representative of Seller present at all times while Buyer is performing any reportssuch Tests, letters or other written information generated as a result meeting with any tenant and otherwise conducting its feasibility study. Prior to Buyer's entering the Property to conduct the inspections and tests described above, Buyer shall obtain and maintain, and shall cause each of such Tests its contractors and agents to each obtain and maintain (and shall be provided deliver to Seller if evidence thereof), at Buyer's sole cost and expense, general liability insurance, from an insurer reasonably acceptable to Seller, in the sale contemplated amount of at least One Million and No/100 Dollars ($1,000,000.00) combined single limit for personal injury and property damage per representation, occurrence, such policies to name Seller as an additional insured party, which insurance shall provide coverage against any claim for personal liability or property damage caused by this Agreement does not close for any reasonBuyer or its agents, representatives, employees or contractors in connection with such inspections and tests. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), protect, and hold Seller and its agents, servants, attorneys, officers, partners, shareholders, consultants, contractors, directors, tenants, members, representatives and employees (collectively, the "SELLER PARTIES") harmless from and against any and all liability, loss, cost, expense, claim, damage, or expense (including, without limitation, mechanic's and materialmen's liens and reasonable attorney’s 's fees and costs) of any kind or nature whatsoever which any of the Seller Parties may sustain or incur by reason of or in connection with any Tests made by Buyer Buyer, or Buyer’s agents any of its employees, consultants, engineers, agents, representatives or contractors (collectively, the "BUYER'S DESIGNEES") relating to or in connection with the Property, or entries by Buyer or its agents or contractors any of Buyer's Designees onto the PropertyProperty or during the conduct of any of the feasibility studies. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. This Section 5(a) shall survive any termination of this Agreement or Closing hereunder. (hb) If for any reason whatsoever Buyer has advised Seller determines that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of any aspect thereof is unsuitable for Buyer's acquisition, Buyer shall have the right to terminate this Agreement by giving written notice thereof to Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as expiration of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statementStudy Period, and if Buyer gives such notice of termination within the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to ProceedStudy Period, this Agreement shall continue in full force and effectterminate. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement is terminated pursuant to the foregoing provisions of this section, then neither party shall immediately terminate have any further rights or obligations hereunder (except for any obligations pursuant to the indemnity obligations other provisions of Buyer to Seller under this Agreement which survive a termination), Buyer shall survive termination deliver to Seller copies of this Agreement) all of the Tests and shall return all Due Diligence Materials previously delivered by Seller to Buyer and thereafter the Deposit shall be returned to Buyer, as Buyer’s sole Buyer and exclusive remedyeach party shall bear its own costs incurred hereunder. It is understood and agreed that If Buyer may refuse or fail fails to give Seller a Notice notice of termination prior to Proceed in its sole and unfettered discretionthe expiration of the Study Period, for any reason or for no reason, and Buyer shall not be obligated deemed to give any explanation have elected to Seller in connection therewithproceed with the purchase of the Property pursuant to the terms hereof.

Buyer’s Due Diligence. Buyer shall be allowed to conduct Buyer's obligation is is not conditioned on the following due diligence prior to purchasing the Property: (aBuyer's Due Diligence as 17 defined in this section 7(A) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possessionbelow. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller This condition is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “"Due Diligence Items.” Condition" if checked in the affirmative, 18 Sections 7 (A) through (C) shall apply; otherwise they do not. Buyer hereby acknowledges shall have 12 calendar days following the receipt date of 19 Acceptance of the RPA (as defined in Section 23 herein) to complete Buyer's Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the PropertyDiligence. Seller agrees to provide cooperate with 20 Buyer's Due Diligence. Seller shall ensure that all necessary utilities (gas, power and water) and all operable pilot lights 21 are on for Buyer's investigations and through the close of escrow. 23 A. PROPERTY INSPECTION/CONDITION: During the Due Diligence Period, Buyer access shall take such action 24 as Buyer deems necessary to determine whether the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to, whether the 25 Property is insurable to Buyer's satisfaction, whether there are unsatisfactory conditions surrounding or otherwise affecting the immediate removal 26 Property (such as location of anything placed on flood zones, airport noise, noxious fumes or odors, environmental substances or hazards, whether 27 the Property in connection with such Tests. Copies is properly zoned, locality to freeways, railroads, places of worship, schools, golf courses, etc.) or any reports, letters or other written information generated as a result of such Tests shall be provided concerns 28 Buyer may have related to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of During such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this AgreementPeriod, Buyer shall give Seller written notice (“Notice have the right to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceedconduct, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Datenon-invasive/ non-destructive 29 inspections of all structural, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyerroofing, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretionmechanical, for any reason or for no reasonelectrical, plumbing, heating/air conditioning, water/well/septic, pool/spa, 30 survey, square footage, and shall not be obligated to give any explanation to Seller in connection therewith.other property or systems, through licensed and bonded contractors or other qualified

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice have seventy-five (75) days from the period commencing from the date Buyer notifies Seller that it has received the requested Due Diligence material required to Seller no less than three complete Buyers Due Diligence (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice“Due Diligence Period”), Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and the Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which the receipt Facility (or the Seller, on behalf of the Facility) are a party, as set forth on Schedule 8.6 attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of the Facility; (iv) Review of current Title Commitment, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facility; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the State relating to the Facility; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth in Subsection (a)(vii) above, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and(iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facility shall be kept confidential scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at all times the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and its agentsphysical condition reports and Phase I Environmental Audits covering the Facility, employees and representatives certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Buyer shall return the delivery of Real Property and Facility to the deed and the transfer of title pursuant condition in which they existed immediately prior to this Agreementsuch audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (terminate this Agreement and receive a refund of the “Approval Date”)Deposit, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to the Facility (the “Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to the Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Dateexpiration of the Due Diligence Period, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit Critical Repairs shall be returned listed on a new Schedule 6(f) to Buyerbe attached to the Agreement. Seller shall make all Critical Repairs listed in the Inspection Report to the Facility at least ten (10) business days prior to the Closing, as Buyerat Seller’s sole cost and exclusive remedyexpense. It is understood Upon completion of the Critical Repairs, Seller shall deliver to Buyer a completion letter or similar notice documenting the completion of the Critical Repairs (the “Critical Repair Completion Notice”) executed by Seller and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithSeller’s contractor and/or architect who performed and/or supervised the construction of the Critical Repairs.

Buyer’s Due Diligence. Buyer shall be allowed have the right for a period ending at 5:00 pm Seattle time on December 13, 2006 (the “Contingency Period”), to inspect the Property and all books and records maintained by or for Sellers with respect to the Property and the operation thereof, and to conduct the following due diligence prior to purchasing such investigations, tests and studies (including without limitation environmental investigations, tests and studies, and zoning, land use, and building regulations affecting the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently Buyer may deem necessary or appropriate in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently its sole discretion in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. order to determine if Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether desires to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverThe costs and expenses of such inspection, Buyer investigations, tests and studies shall immediately return the environmental reports to Seller. (f) be borne solely by Buyer. To facilitate Buyer’s review of the documents inspection and other items listed on Exhibit N attached hereto and made a part hereofreview, it being agreed Sellers agree that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Sellerof Buyer’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution acceptance of this Agreement Agreement, Sellers shall constitute its consent furnish to a non-invasive Phase I environmental site assessment being performed on Buyer the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types following information and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto documents and hereby made a part hereof. Buyer shall be required promptly acknowledge in writing to conduct such Tests in Sellers its receipt of each listed item: (i) a manner current rent roll, certified as true and correct to not disturb or interfere with the Sellers’ knowledge, and copies of existing leases and all amendments thereto; (ii) a copy of Sellers’ current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies title insurance policy; (iii) a copy of any reports, letters environmental or other written information generated as a result hazardous waste inspection reports in Sellers’ possession; (iv) the ALTA Survey obtained by Sellers at the time of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason acquisition of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, and any as built surveys and updates to the ALTA Survey in Sellers’ possession or entries by Buyer or its agents or contractors onto control; (v) aerial and premises photographs of the Land and Buildings in Sellers’ possession, if any; (vi) a copy of all “as-built” plans and specifications with respect to the Buildings that Sellers possess, together with a copy of all engineering, soils, seismic and structural reports, if any, in Sellers’ possession; (vii) a list of all personal property, included in the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery if any; (viii) a summary of the deed historic and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager current operating costs of the Property, itemized by year and by month and by account; (ix) in respect all assessments, all certificates of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information occupancy, and supporting documentation as are necessary relevant permits required for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; ; (x) maintenance records, Service Contracts and (v) if other contracts or documents to which each Seller has audited financial statements with respect is a party that relate to the Propertyownership, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect operation, repair, maintenance or leasing of the Property Property. Additionally, during the Contingency Period, Sellers shall furnish to Buyer or make available to Buyer for a fiscal period prior review at Seller’s offices such other documents, materials and information in Seller’s possession and relating to the Closing Date that was not completed Property as Buyer shall reasonably request. All information provided by Sellers to Buyer or obtained by Buyer relating to the Property in the course of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It its review shall be a condition precedent to the obligations of treated as confidential information by Buyer under this Agreement that Seller shall have complied in accordance with the covenants set forth in this subsection (h) as provisions of the Closing DateParagraph 30 hereof. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects Costs to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at update any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit such information shall be returned to borne by Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have forty-five (45) days from the Effective Date to complete Buyer’s review of Due Diligence (the operating statements of “Due Diligence Period”). During the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeDue Diligence Period, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and each Facility to Buyer for informational purposes only perform its normal and Buyer shall customary due diligence, upon not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within less than five (5) days after prior notice to Seller and only in the Agreement Datepresence of a designated representative of Seller and shall only be accomplished in a manner designed to minimize any disruption or interference of the normal and customary activities at the Facility including, to without limitation, the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’sfollowing (collectively, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which each Facility (or the receipt Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of each Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for each Facility; (vi) Inspection of the books and records of each Facility and that portion of the Seller’s books and records which pertain to the Facilities; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facilities; (ix) In accordance and with HIPPA and to the Exception Documents extent allowable thereunder, review of resident files, agreements, and any other documentation regarding the residents of the Facilities, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (which x) Review of files maintained by the Wisconsin Department of Health and Family Services relating to the Facilities; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facilities in the possession of or readily available to Seller; and (xii) Seller will be delivered furnish copies of any environmental reports, property condition reports, title reports and ALTA Surveys (or caused surveys) that it currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) on or before the time set forth herein, data and information and by accepting then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller completes such delivery of same Buyer hereby acknowledges that the Due Diligence Items to Buyer. (b) Buyer agrees and acknowledges that: (i) Buyer will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that not disclose the Due Diligence Items will or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facilities shall be kept confidential scheduled with Seller upon five (5) days prior notice. Reviews, inspections and investigations at all times the Facilities shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facilities and shall only be conducted in the presence of a designated representative of the Seller and under no circumstances may Buyer or any of its agents, representatives be permitted to discuss or speak with employees and representatives or residents of the Facilities without the prior approval of Seller in its reasonable discretion. (collectively d) Within the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential Period, Buyer may, at its sole cost, obtain third party engineering and physical condition reports and Phase I Environmental Audits covering each Facility, certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall not, involve the taking of samples or other physically invasive procedures (such as a Phase II environmental audit) without Seller’s the prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representativeswithheld. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement Agreement. Following any audit or inspection as provided for herein, Buyer shall promptly return the delivery of the deed Real Property and the transfer of title pursuant Facilities to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Buyer’s election, a third party inspection report with respect to each Facility (the Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to any Facility, Buyer does shall provide Seller with written notice of the same not provide less than five (5) business days prior to the Notice expiration of the Due Diligence Period, and the Critical Repairs shall be listed on a new Schedule 6(f) to Proceed on or before 5:00 p.m. Central Standard Time on be attached to the Approval DateAgreement. Upon receipt of such notice, this Agreement Seller shall immediately terminate notify Buyer by written notice prior to the expiration of the Due Diligence Period of Seller’s election to (except i) make such Critical Repairs prior to Closing, provided however, Seller’s obligation to pay for the indemnity obligations costs of Buyer to Seller under this Agreement which such Critical Repairs shall survive termination of this Agreementnot exceed One Hundred Thousand Dollars ($100,000) total in the aggregate (the “Critical Repair Cap”); or (ii) not make the Critical Repairs, and at Closing the Deposit Purchase Price shall be returned reduced by the lesser of the following amounts: (A) the amount of the Critical Repair Cap, or (B) the cost of the Critical Repairs. If Seller elects to Buyermake such Critical Repairs, as BuyerSeller shall make the Critical Repairs listed in the Inspection Report to the Facility at least ten (10) business days prior to the Closing. Seller shall deliver to Buyer a completion letter or similar notice documenting the completion of the repairs (the “Repair Completion Notice”) executed by Seller and Seller’s sole contractor and/or architect who performed and/or supervised the construction of the repairs. The Critical Repairs shall be constructed in a workmanlike manner and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithaccordance with all applicable laws.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer shall have forty-five (45) days from the Effective Date to complete Buyer’s review Due Diligence (the “Due Diligence Period”); provided, however, Buyer, at Buyer’s election, shall have the right to extend the Due Diligence Period to January 8, 2021, by providing e-mail notice to the Seller at least one (1) business day prior to the expiration of the operating statements of Due Diligence Period at the Property for the previous two (2) calendar years as well as the current calendar yeare-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently mail address listed in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s PossessionSection 17 below. Buyer shall provide Upon reasonable prior written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such noticeSeller, Seller shall terminate all agreements. permit the officers, employees, directors, agents, consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives of Buyer (e) collectively, the “Buyer’s review of certain environmental reports prepared for Seller Consultants”) access to, and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports entry upon the Real Property and each Facility to Buyer for informational purposes only perform its normal and Buyer shall not rely on such environmental reports in determining whether to purchase customary due diligence, including, without limitation, the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverfollowing (collectively, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges ”): (i) Review of vendor contracts (“Contracts”) and leases (“Leases”) to which each Facility (or the receipt Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Inspection of the physical structure of each Facility; (iv) Review of current PTR, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of ALTA Surveys, as defined in Section 14 herein, for each Facility; (vi) Inspection of the books and records of each Facility and that portion of the Seller’s books and records which pertain to the Facilities; (vii) Review of the Due Diligence Items, with as described in Schedule 6(a)(vii) attached hereto, to be provided by Seller within five (5) business days following the exception Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Title Commitment Facilities; (ix) Review of resident files, agreements, and any other documentation regarding the Exception Documents residents of the Facilities, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; (which x) Review of files maintained by the State of Georgia and/or the Georgia Health and Social Services Department relating to the Facilities; (xi) Review of all drawings, plans and specifications and all engineering reports for the Facilities in the possession of or readily available to Seller; (xii) Seller will be delivered furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or caused surveys) that Seller currently has in its possession; and (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to be delivered pursuant paragraph 4(a) herein)or for employees. The Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items contain confidential materiallisted in Schedule 6(a)(vii) to the extent in Seller’s possession and control on or before the time set forth herein, data then the Due Diligence Period shall be deemed extended on a day-to-day basis until Seller delivers written notice to Buyer stating that all Due Diligence Items listed in Schedule 6(a)(vii) that are in Seller’s possession have been delivered to Buyer. (b) Buyer agrees and information and by accepting delivery of same acknowledges that: (i) Buyer hereby acknowledges that will not disclose the Due Diligence Items will be relied upon at or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s own risk organization, other than Buyer’s Consultants whom shall also not disclose the Property Information to third parties; (except ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the extent otherwise truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly set forth contained in this Agreement, Seller has not made and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the information set out in or disclosed by the Property Information. (c) All due diligence activities of Buyer at the Facilities shall be scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and further that investigations at the Due Diligence Items will Facilities shall be kept confidential conducted by Bxxxx in such manner so as not to disrupt the operation of the Facilities. (d) Buyer may, at all times its sole cost, obtain third party engineering and physical condition reports and Phase I Environmental Audits covering each Facility, certified to Buyer, prepared by Buyer and its agentsan engineering and/or environmental consultants, employees and representatives who are adequately insured, acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (collectively such as a Phase II environmental audit) without the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (of Seller, which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or Notwithstanding anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or Consultant’s exercise of its agents or contractors onto the Property. Notwithstanding any provision to the contrary right of inspection as provided for in this AgreementSection 6; provided, however, such indemnification shall not extend to matters merely discovered by Bxxxx and/ or the indemnity obligations acts or omissions of Seller or any third party. The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of twelve (12) months. Following any audit or inspection as provided for herein, Bxxxx shall return the delivery of the deed Real Property and the transfer of title pursuant Facilities to this Agreementthe condition in which they existed immediately prior to such audit or inspection. (he) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect If the results of the Property in compliance with the policies of Buyer foregoing inspections and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide audits are not acceptable to Buyer such financial information in its sole and supporting documentation as are necessary for Buyer’s auditors absolute discretion, Buyer may, upon notice to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (terminate this Agreement, and in such event, the “Approval Date”)Initial Deposit shall be refunded to Buyer, Buyer elects to proceed and neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effectbe terminated prior to Closing, upon Seller’s request, Bxxxx shall promptly return or destroy all copies of the Due Diligence Items. (f) During the Due Diligence Period, Buyer shall obtain, at Bxxxx’s election, a third party inspection report with respect to each Facility (the Inspection Report”). If the Inspection Report recommends any critical repairs (the “Critical Repairs”) be made to any Facility, Buyer does not shall provide Seller with written notice of the Notice same prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Dateexpiration of the Due Diligence Period, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit Critical Repairs shall be returned listed on a new Schedule 6(f) to Buyerbe attached to the Agreement. Seller shall make all Critical Repairs listed in the Inspection Report to such Facility at least ten (10) business days prior to the Closing, as Buyerat Seller’s sole cost and exclusive remedyexpense. It is understood Seller shall deliver to Buyer a completion letter or similar notice documenting the completion of the Critical Repairs (the “Repair Completion Notice”) executed by Sxxxxx and Sxxxxx’s contractor and/or architect who performed and/or supervised the construction of the repairs, along with releases of liens from all contractors and materialmen involved with the Critical Repairs. The Critical Repairs shall be constructed in a workmanlike manner and in accordance with all applicable laws. As an alternative to making the Critical Repairs prior to Closing, Seller may elect to credit the cost and expense of performing Critical Repairs against the Purchase Price, in an amount to be mutually agreed that upon between Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewithduring the Due Diligence Period.

Buyer’s Due Diligence. Seller has heretofore provided Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: with (a) Buyer’s review a Rent Roll with respect to those Leases in effect as of the operating statements last day of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. June, 2014, and (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possessionthe Financial Data. Buyer shall provide written notice to Seller no less than Within three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Execution Date, to the extent that Seller has not previously delivered same provided, Seller shall, at the sole expense of Seller, deliver to Buyer; provided that such Buyer (in electronic format to the extent feasible) and updated Rent Roll and the documents and listed on Schedule 1 attached hereto other items are in Seller’s, or in Seller’s property management company’s, possession or control than any Confidential Materials (hereafter the “Seller’s PossessionSeller Deliveries”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of In addition, during the Due Diligence Items, with the exception of the Title Commitment and the Exception Documents Period (which A) Seller will be delivered make or caused cause to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy made available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performingcopying, at Buyer’s sole cost and expense, studies, physical inspections, investigations the Leases and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to any other on-site property files of Seller and Seller’s property manager (other than Confidential Materials) and (B) will allow Buyer’s Representatives and Buyer’s consultants and contractors and the respective agents and employees of Buyer's consultants and contractors (collectively, the “Entering Parties”) access to the Real Property upon reasonable prior approval notice at reasonable times for the purpose of conducting non-invasive physical tests and inspections of the Real Property; provided (i) such Testsaccess does not unreasonably interfere with the operation of the Real Property or the rights of tenants, which approval (ii) Buyer shall coordinate with Seller and Seller’s property manager prior to each visit to the Property by any Entering Parties; (iii) the Entering Parties shall not contact any tenant; (iv) except as otherwise set forth below, after the expiration of the Due Diligence Period Buyer’s Representatives shall not be unreasonably withheldpermitted to perform any further testing or other physical evaluation of the Real Property prior to Closing; and (v) Seller or its designated representative shall have the right to pre-approve and be present during any physically invasive testing of the Real Property, and to be present during any other testing or entry by any Entering Parties. SellerUpon the completion of any tests or inspections, Buyer hereby agrees to immediately restore, at Buyer’s execution sole cost and expense, the Property to the same condition existing immediately prior to Buyer’s exercise of its rights pursuant to this Agreement, provided that in no event shall Buyer have any obligation to restore the Property or repair any damage to the Property that is not caused (including by exacerbation) by Buyer or Buyer’s Consultants. The provisions of the preceding sentence shall survive after the termination of this Agreement shall constitute its consent until April 7, 2015. Prior to a non-invasive Phase I environmental site assessment being performed on such time as any Entering Parties enter the Property. All forms , Buyer shall (i) obtain or cause each of invasive Tests are prohibited without its consultants or contractors to obtain a policy of commercial general liability insurance with limits of not less than $1,000,000 combined single limit for personal injury and property damage, which policy of insurance shall name Seller and Seller’s prior written consentproperty manager as additional insureds and shall be issued by an insurance company reasonably acceptable to Seller, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing and (ii) provide Seller with certificates of insurance listing evidencing such insurance policy, which certificate shall provide for ten (10) days prior written notice to Seller as an of cancellation or material change in such insurance policy. Notwithstanding the foregoing to the contrary, in the event additional insured on all insurance policies evidencing that inspections or non-invasive testing is either required by Buyer’s agents lender or contractors performing said Tests have insurance otherwise reasonably requested by Buyer following expiration of the Due Diligence Period, Seller shall permit Buyer to access the Property for such purpose following at least one (1) business day prior notice from Buyer together with the reason for such requested access. LEGAL02/34919558v5 All tests and inspections of the Real Property shall be at Buyer’s sole expense and shall be in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereofaccordance with applicable Laws. Buyer shall cause each of Buyer’s Representatives to be required to conduct such Tests in a manner as to not disturb or interfere with the current use aware of the Property terms of this Agreement as it relates to the conduct of Buyer’s Due Diligence and upon completion the obligations of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reasonparties hereunder. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and keep the Real Property fully protected against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason liens of every character arising out of or in connection with Buyer's Due Diligence. In the event that a lien is placed on the Real Property or any Tests made part thereof as a result of Buyer's Due Diligence, Buyer shall immediately notify Seller of such lien. Buyer shall take action, at Buyer's expense, to have any such lien removed or discharged from the Real Property within thirty (30) days after the filing thereof. If Buyer shall fail to so remove or discharge such lien within such thirty (30) day period, Seller may, but shall not be obligated to, discharge the same either by Buyer paying the amount claimed to be due or Buyer’s agents or contractors relating to by procuring the discharge of such lien by depositing in court a bond in the amount ordered by the court or in connection with such other manner as is or may be permitted by law, and Buyer shall reimburse and indemnify Seller in respect thereof. Buyer, for itself and all of the Propertyother Entering Parties, hereby waives and releases Seller and each of the Seller Parties from all claims resulting directly or entries indirectly from entrance upon or inspection of the Real Property by Buyer or its agents or contractors onto the Property. Notwithstanding any provision Entering Parties (other than due to the contrary in this Agreement, the indemnity obligations sole negligence or willful misconduct of Buyer under this Agreement any Seller Parties). This waiver and release shall survive any the termination of this Agreement or the delivery of the deed and the transfer of title pursuant to this AgreementClosing (as applicable). (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property:CONDITION OF THE PROPERTY (a) Section 4.1 Buyer’s review of the operating statements of the Property for the previous two (2) calendar years as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll Inspections and any tenant leases, and any amendments and modifications thereto, currently in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s PossessionDue Diligence. Buyer shall provide written notice to Seller no less than three acknowledges that commencing on the Effective Date and continuing for a period which will expire at 11:59 p.m. Eastern Standard Time on the Closing Date (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoever, Buyer shall immediately return the environmental reports to Seller. (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (5) days after the Agreement Date, to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Period”), Buyer hereby acknowledges the receipt shall conduct its examinations, inspections, testing, studies and investigations of the Property and Cowboys Ownership Interests, information regarding the Property and the Cowboys Ownership Interests and such documents applicable to the Property and the Cowboys Ownership Interests, including, without limitation, the documents that Seller delivers or makes available, as set forth in Section 4.2 below (collectively, the “Due Diligence ItemsDiligence”). In addition, the Buyer shall have the right, but not the obligation, to contact (i) any Governmental Entity as it may elect in connection with this transaction including, without limitation, City of Lewisville, City of Mansfield and the exception Army Corps of Engineers, (ii) owner’s associations, club members or club membership board, if applicable and as appropriate; provided, however, that for contact under clauses (i) and (ii) above, Buyer shall have first given Seller forty-eight (48) hours advance notice, and Seller shall have the opportunity to have a representative present during any such communication. Except for any limitations as may be imposed by Section 4.5 below, Buyer may conduct such due diligence activities, inspections, and studies of the Title Commitment Property and the Exception Documents Cowboys Ownership Interests as it deems necessary or appropriate, and examine and investigate to its full satisfaction all facts, circumstances, and matters relating to the Property and the Cowboys Ownership Interests (which will be delivered including the physical condition and use, availability and adequacy of utilities, access, zoning, compliance with applicable laws, environmental conditions, engineering and structural matters), title and survey matters, and any other matters it deems necessary or caused to be delivered pursuant paragraph 4(a) herein)appropriate for purposes of consummating this transaction. The Due Diligence Items contain confidential material, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except to the extent otherwise expressly set forth in this Agreement) and further that the Due Diligence Items will be kept confidential at all times by Buyer and its agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective investors and lenders, and others who need to know such information for the purpose of assisting Buyer in connection with the possible purchase of the Property; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to the Securities and Exchange Commission; and (iv) any duty of confidentiality set forth in this Agreement shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against Seller or its consultant arising out of the delivery of the Due Diligence Items to the Buyer or any inaccuracy of the Due Diligence Items unless otherwise expressly provided in this Agreement. Further, the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising out of Buyer’s actions with respect to the Due Diligence Items. The Buyer agrees that if it or its Representatives commit a breach of any of the provisions of this Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests . Seller shall be conducted without at least two (2) business days prior telephone reasonably assist Buyer in obtaining third party consents or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Tests, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale contemplated by this Agreement does not close for any reason. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), and hold Seller harmless from and against any and all liability, loss, cost, damage, or expense (including, without limitation, attorney’s fees and costs) which Seller may sustain or incur by reason of or in connection with any Tests made by Buyer or Buyer’s agents or contractors relating to or in connection with the Property, or entries by Buyer or its agents or contractors onto the Property. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations of Buyer under this Agreement shall survive any termination of this Agreement or the delivery of the deed and the transfer of title pursuant approvals related to this Agreementtransaction. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property as necessary to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of the operation of the Property; and (v) if Seller has audited financial statements with respect to the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect of the Property for a fiscal period prior to the Closing Date that was not completed as of the Closing Date, then Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If on or before 5:00 p.m. Central Standard Time on October 1, 2008 (the “Approval Date”), Buyer elects to proceed under this Agreement, Buyer shall give Seller written notice (“Notice to Proceed”) at any time prior to 5:00 p.m. Central Standard Time on or before the Approval Date. Upon giving the Notice to Proceed, this Agreement shall continue in full force and effect. If Buyer does not provide the Notice to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, for any reason or for no reason, and shall not be obligated to give any explanation to Seller in connection therewith.

Buyer’s Due Diligence. Buyer shall be allowed to conduct the following due diligence prior to purchasing the Property: (a) Buyer’s review of the operating statements of the Property for the previous two (2) calendar years Subject to extension as well as the current calendar year-to-date. (b) Buyer’s review of copies of a current rent roll and any tenant leases, and any amendments and modifications thereto, currently provided below in Seller’s Possession. (c) Buyer’s review of copies of any site plans and building drawings and specifications currently in Seller’s Possession .. (d) Buyer’s review of copies of any maintenance and service agreements currently in force and in Seller’s Possession. Buyer shall provide written notice to Seller no less than three (3) business days prior to the Approval Date of those agreements Buyer wishes to assume. In the absence of such notice, Seller shall terminate all agreements. (e) Buyer’s review of certain environmental reports prepared for Seller and currently in Seller’s Possession as described on Exhibit J hereto. Seller is providing such environmental reports to Buyer for informational purposes only and Buyer shall not rely on such environmental reports in determining whether to purchase the Property. In the event the transaction contemplated herein does not close for any reason whatsoeverthis Section 6, Buyer shall immediately return the environmental reports to Seller. have ninety (f) Buyer’s review of the documents and other items listed on Exhibit N attached hereto and made a part hereof, it being agreed that Seller shall deliver the documents and other items listed on Exhibit N to Buyer within five (590) days after from the Agreement Date, Effective Date to the extent that Seller has not previously delivered same to Buyer; provided that such documents and other items are in Seller’s, or in Seller’s property management company’s, possession or control complete Buyers Due Diligence (hereafter “Seller’s Possession”). The items referred to above in Section 4 and Subsections 5(a)-(f) (including all documents and other items listed on Exhibit N shall be collectively referred to as the “Due Diligence Items.” Buyer hereby acknowledges the receipt of the Due Diligence ItemsPeriod”), with the exception of the Title Commitment and the Exception Documents (which will be delivered or caused to be delivered pursuant paragraph 4(a) herein). The Due Diligence Items contain confidential materialand, data and information and by accepting delivery of same Buyer hereby acknowledges that the Due Diligence Items will be relied upon at Buyer’s own risk (except subject to the extent otherwise expressly set forth in this Agreement) and further that requirements of Section 6(c), Seller shall permit the Due Diligence Items will be kept confidential at all times by Buyer and its officers, employees, directors, agents, employees and representatives (collectively the “Representatives”; and the confidentiality requirement set forth in this Section is referred to herein as the “Confidentiality Requirement.” The Due Diligence Items will be kept confidential and shall not, without Seller’s prior written consent (which consent shall not be unreasonably withheld or delayed) be disclosed by the Buyer or by its Representatives. If such consent is granted, the information shall not be disclosed prior to Seller’s receipt of an Acknowledgment and Disclaimer Agreement from the person or entity to whom the Information is being disclosed in substantially similar form as that which Buyer executed in connection with its potential purchase of the Property. Moreover, the Buyer agrees to reveal the Due Diligence Items only to those of its Representatives who need to know the Due Diligence Items and who are informed by the Buyer of the confidential nature of the Due Diligence Items. However, notwithstanding the foregoing provisions or anything else to the contrary contained in this Agreement, (i) Buyer may disclose the Due Diligence Items and related information to its affiliates, consultants, attorneys, accountants, prospective lenders, appraisers, architects, investors and lendersengineers designated by Buyer and representatives of Buyer (collectively, the “Buyer’s Consultants”) access to, and others who need entry upon the Real Property and the Facility to know such information for perform its normal and customary due diligence, including, without limitation, the purpose following (collectively, the “Due Diligence Items”): (i) Review of assisting Buyer in connection with vendor contracts (“Contracts”) and leases (“Leases”) to which the possible purchase Facility (or the Seller, on behalf of the Property; Facility) are a party, as set forth on Schedule 8(f) attached hereto; (ii) the covenants of confidentiality set forth herein shall not be applicable to any information published by Seller as public knowledge or otherwise available in the public domain without breach of this Agreement; Conduct environmental investigations (including a Phase 1 Environmental Audit); (iii) Buyer shall be permitted to disclose such information as may be recommended by legal counsel for Buyer in order to comply with all financial reporting, securities laws and other legal requirements applicable to Buyer, including any required disclosures to Inspection of the Securities and Exchange Commission; and physical structure of the Facility; (iv) Review of current Title Commitment, as defined in Section 14 herein, and underlying documents referenced therein; (v) Review of Surveys, as defined in Section 14 herein, for the Facility; (vi) Inspection of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility; (vii) Review of the items described in Schedule 6(a)(vii) attached hereto, which are in Seller’s possession or control, to be provided by Seller within ten (10) business days following the Effective Date; (viii) Conduct such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of the Facility; (ix) Review of resident files, agreements, and any duty other documentation regarding the residents of confidentiality the Facility, which review shall in all events be subject to all applicable laws, rules and regulations concerning the review of medical records and other types of patient records; and (x) Review of files maintained by the State relating to the Facility; and (xi) Review of all drawings, plans and specifications and all engineering reports for the Facility in the possession of, or readily available to, Seller; and (xii) Review of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or surveys) that Seller currently has in its possession. (xiii) Review copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to or for employees. Notwithstanding the foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items listed in Schedule 6(a)(vii) that are in Seller’s possession or control on or before the time set forth in this Agreement Subsection (a)(vii) above, then Buyer give Seller written notice of such failure and the Due Diligence Period shall terminate upon Closing. The Buyer hereby releases and discharges any and all claims it may have against be deemed extended on a day-to-day basis until Seller or its consultant arising out of the completes such delivery of the Due Diligence Items to Buyer; provided, however, that in no event shall the Due Diligence Period be extended beyond the one hundred twentieth (120th) day after the Effective Date). (b) Buyer or any inaccuracy of agrees and acknowledges that: (i) Buyer will not disclose the Due Diligence Items unless otherwise or any other materials received from Seller pursuant to this Agreement (the “Property Information”) or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of Buyer’s organization, other than Buyer’s Consultants; (ii) the Property Information is delivered to Buyer solely as an accommodation to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters set out in or disclosed by the Property Information; and (iv) except as expressly provided contained in this Agreement. Further, Seller has not made and does not make any warranties or representations of any kind or nature regarding the Buyer hereby agrees to indemnify and hold Seller harmless from any and all claims arising truth, accuracy or completeness of the information set out of Buyer’s actions with respect to in or disclosed by the Due Diligence ItemsProperty Information. The Buyer agrees that if it or its Representatives commit a breach of any of Property Information is “Confidential Information” as the provisions of this term is defined in the Confidentiality Requirement, Seller shall have the right and remedy to institute proceedings to obtain immediate injunctive relief for any breach or threatened breach hereof, it being hereby acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Seller and its affiliates and that money damages will not provide an adequate remedy to Seller and its affiliates. This stipulation with respect to damages incurred by Seller upon a breach of this Confidentiality Requirement by the Buyer shall be limited to use Agreement referenced in an action for injunctive relief. Further, nothing herein shall be construed to limit any other remedy available to Seller. (g) Buyer’s review of the physical and environmental characteristics and condition of the Property. Seller agrees to provide Buyer access to the Property following the Agreement Date for the purpose of performing, at Buyer’s sole cost and expense, studies, physical inspections, investigations and tests on the Property (the “Tests”) provided that no such Tests shall be conducted without at least two (2) business days prior telephone or written notice to Seller and Seller’s prior approval of such Tests, which approval shall not be unreasonably withheld. Seller’s execution Section 25 of this Agreement shall constitute its consent to a non-invasive Phase I environmental site assessment being performed on the Property. All forms of invasive Tests are prohibited without Seller’s prior written consent, which consent may be granted or withheld in Seller’s sole discretion. Invasive Tests hereunder include, but are not limited to any tests or testing beyond a Phase I environmental site assessment, such as collecting or testing asbestos, water, radon, soil or air samples. Buyer’s access is further conditioned on Buyer providing Seller with certificates of insurance listing Seller as an additional insured on all insurance policies evidencing that Buyer’s agents or contractors performing said Tests have insurance in types and amounts satisfactory to Seller as determined by Seller in its reasonable discretion as more specifically set forth on Exhibit H attached hereto and hereby made a part hereof. Buyer shall be required to conduct such Tests in a manner as to not disturb or interfere with the current use of the Property and upon completion of such Testsprotected and, Buyer agrees at its sole cost to restore the Property to the condition it was in immediately prior to such Tests, including, but not limited to the immediate removal of anything placed on the Property in connection with such Tests. Copies of any reports, letters or other written information generated as a result of such Tests shall be provided to Seller if the sale transaction contemplated by this Agreement does not close for any reason, all documents containing Property Information shall be returned to Seller or destroyed in accordance with its terms. (c) All due diligence activities of Buyer at the Facility shall be scheduled with Seller upon two (2) business days prior notice. Reviews, inspections and investigations at the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of the Facility. (d) Buyer may, at its sole cost, obtain third party engineering and physical condition reports and Phase I Environmental Audits covering the Facility, certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (such as a Phase II environmental audit) without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed. Notwithstanding anything to the contrary contained in this Agreement, Buyer shall indemnify, defend (with counsel reasonably satisfactory acceptable to Seller), ) and hold Seller and its employees and agents, and each of them, harmless from and against any and all liabilitylosses, lossclaims, cost, damage, or expense (includingdamages and liabilities, without limitation, attorney’s attorneys’ fees and costsincurred in connection therewith) which Seller may sustain or incur by reason arising out of or in connection with any Tests made by Buyer resulting from Buyer’ or Buyer’s agents or contractors relating Consultant’s exercise of its right of inspection as provided for in this Section 6; provided, however, such indemnification shall not extend to or in connection with the Property, or entries matters merely discovered by Buyer and/ or its agents the acts or contractors onto the Propertyomissions of Seller or any third party. Notwithstanding any provision to the contrary in this Agreement, the indemnity obligations The indemnification obligation of Buyer under this Agreement Section 6 shall survive any the termination of this Agreement for a period of two (2) years. Following any audit or inspection as provided for herein, Buyer shall immediately and without demand return the delivery of Real Property and Facility to the deed and the transfer of title pursuant to this Agreement. (h) Buyer has advised Seller that Buyer must cause to be prepared up to three (3) years of audited financial statements condition in respect of the Property in compliance with the policies of Buyer and certain laws and regulations, including, without limitation, Securities and Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to cooperate with Buyer’s auditors in the preparation of such audited financial statements (it being understood and agreed that the foregoing covenant shall survive the Closing). Without limiting the generality of the preceding sentence (i) Seller shall, during normal business hours, allow Buyer’s auditors reasonable access which they existed immediately prior to such books and records maintained by Seller (and Seller’s manager of the Property) in respect of the Property audit or inspection so as necessary not to prepare such audited financial statements; (ii) Seller shall use reasonable efforts to provide to Buyer such financial information and supporting documentation as are necessary for Buyer’s auditors to prepare audited financial statements; (iii) if Buyer or its auditors require any information that is in the possession of the party from which Seller purchased the Property, Seller shall contact such prior owner of the Property and use commercially reasonable efforts to obtain from such party the information requested by Buyer; (iv) Seller will make available for interview by Buyer and Buyer’s auditors the manager of the Property or other agents or representatives of Seller responsible for the day-to-day operation of the Property and the keeping of the books and records in respect of interfere with the operation of the Property; and Facility. (ve) if Seller has audited financial statements with respect to If the Property, Seller shall promptly provide Buyer’s auditors with a copy of such audited financial statements. If after the Closing Date Seller obtains an audited financial statement in respect results of the Property for a fiscal period prior foregoing inspections and audits are not acceptable to the Closing Date that was not completed as of the Closing DateBuyer in its sole and absolute discretion, then Buyer may, upon notice to Seller shall promptly provide Buyer with a copy of such audited financial statement, and the foregoing covenant shall survive Closing. It shall be a condition precedent to the obligations of Buyer under this Agreement that Seller shall have complied with the covenants set forth in this subsection (h) as of the Closing Date. If given on or before 5:00 p.m. Central Standard Time (Pacific Time) on October 1the last day of the Due Diligence Period, 2008 (the “Approval Date”)terminate this Agreement, Buyer elects to proceed and in such event, neither party shall have any further rights and obligations under this Agreement, except for obligations which expressly survive the termination of this Agreement. Failure of Buyer shall give Seller to deliver written notice (“Notice to Proceed”) at any time of approval prior to 5:00 p.m. Central Standard Time (Pacific Time) on or before the Approval Datelast day of the Due Diligence Period shall be deemed to constitute Buyer’s disapproval of the matters described in this Section 6(a). Upon giving the Notice to Proceed, If this Agreement shall continue in full force and effect. If Buyer does not provide the Notice be terminated prior to Proceed on or before 5:00 p.m. Central Standard Time on the Approval Date, this Agreement shall immediately terminate (except for the indemnity obligations of Buyer to Seller under this Agreement which shall survive termination of this Agreement) and the Deposit shall be returned to Buyer, as Buyer’s sole and exclusive remedy. It is understood and agreed that Buyer may refuse or fail to give a Notice to Proceed in its sole and unfettered discretion, Closing for any reason or for no reason, upon Seller’s request, Buyer shall promptly return or destroy all copies of the Due Diligence Items, all electronic copies of all Due Diligence Items and shall not be obligated to give all summaries and notes prepared by referencing any explanation to Seller in connection therewithDue Diligence Items.