ASSET PURCHASE AGREEMENT

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                                                                    EXHIBIT 2.13

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of this 12th day of
January, 2006, is made and entered into by and between AHC ACQUISITIONS, INC., a
Delaware corporation ("Purchaser"), and the entities listed on Exhibit A-1
(collectively, "Seller").

                                    RECITALS

     A. Seller owns and operates certain assisted living, independent living and
skilled nursing facilities located in the States of Florida, Georgia and
Tennessee, together with the real property and all appurtenances thereto, all as
more particularly described on Exhibit B-1 (the "Owned Facilities"). Each Owned
Facility is licensed, to the extent required, for the number of nursing home
beds and assisted living units, respectively, as set forth on Exhibit B-1.

     B. Seller leases certain assisted living and independent living facilities
located in the States of Alabama, California, Delaware, Florida, Louisiana,
Ohio, Tennessee, Virginia and Washington, together with the real property and
all appurtenances thereto, all as more particularly described on Exhibit C-1
(the "Leased Facilities"). Each Leased Facility is licensed, to the extent
required, for the number of assisted living units as set forth on Exhibit C-1
(the Owned Facilities and the Leased Facilities are sometimes referred to herein
individually as a "Facility" and collectively as the "Facilities").

      C. The parties hereto desire to enter into this Agreement pursuant to which
Purchaser will purchase from Seller, and Seller will sell, convey, transfer and
assign to Purchaser, the following, hereinafter collectively referred to as the
"Assets":

                (i) Seller's fee simple title in and to the real property on
which the Owned Facilities are located (the "Owned Real Property"), and Seller's
leasehold estate and all other rights, title and interest of Seller (including
without limitation any options to purchase or rights of first refusal) in and to
the real property on which the Leased Facilities are located (the "Leased Real
Property", which together with the Owned Real Property, is sometimes referred to
herein collectively as the "Real Property");

               (ii) all buildings, structures, facilities, amenities, driveways,
walkways, parking lots and other improvements owned by Seller and located on the
Real Property (collectively, the "Improvements");

               (iii) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Real Property, any easements, rights of
way or other interests in, on, under or to, any land, highway, street, road or
right of way, open or proposed, in, under, across, abutting or benefiting the
Real Property, and any pending or future action for condemnation, eminent domain
or similar proceeding, or for any damage to the Real Property by reason of a
change of grade thereof, and all other accessions, appurtenant rights, and
privileges of Seller in and to the Real Property and the Improvements
(collectively, the "Appurtenances");

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               (iv) all furniture, fixtures, furnishings, vehicles and equipment
located at the Facilities (collectively, the "FF& E");

                (v) all supplies, inventory, consumables, perishable and
nonperishable food products, and other similar tangible property used in the
operation of the Real Property and the Facilities (collectively, the
"Inventory");

               (vi) all Tenant Leases and Personal Property Leases (as defined
in Section 2.10 below);

               (vii) the Assumed Contracts (as defined in Section 5.3 below);

               (viii) all Patient Care Contracts and all Residential Leases (as
defined in Section 2.7(b) below);

               (ix) to the extent Seller's interest is assignable pursuant to
applicable law and to the extent Purchaser in its sole discretion elects to
assume the same, all licenses, permits, approvals, provider agreements and
certificates of need (to the extent Purchaser or its nominee(s) elect(s) to
assume same);

               (x) all right, title and interest of Seller in and to any trade
names and all variations thereof, all architects and engineers plans and
specifications, all deposits, all marketing materials, telephone and facsimile
numbers relating to the Facilities (including all "800" numbers), all post
office box addresses associated with the Facilities, all software or other
computer programs used in the connection with the operation of the Facilities
which are by their terms assignable and all patient records and reports, and all
books and records of Seller relating to the Facilities and the operations
thereof; and

               (xi) any and all other items of tangible and intangible personal
property owned or leased by Seller and used in connection with the use,
operation and maintenance of the Real Property and the Facilities (collectively,
the "Personal Property"), and all goodwill of Seller associated with the
businesses operated at the Facilities (the "Business").

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises, and of the mutual
agreements, representations, warranties, conditions and covenants herein
contained, the parties hereto agree as follows:


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                                   ARTICLE I.
                                PURCHASE AND SALE

     1.1 Transfer of Assets. For the consideration hereinafter provided, Seller,
in accordance with the terms and subject to the conditions hereof, shall convey,
transfer and assign to Purchaser at Closing (as defined below), and Purchaser
shall purchase from Seller, the Assets. Notwithstanding anything to the contrary
contained herein, the Assets shall not include the following items
(collectively, the "Excluded Assets"):

          (a) All bank accounts, cash, cash equivalents, securities and accounts
receivable (but only to the extent relating to periods prior to the Closing),
(including third party settlements) prepaid accounts (subject to the provisions
of Section 10.5), real estate tax and insurance escrows under loans (but only to
the extent such escrows do not relate to periods prior to the Closing) and
choses of action;

           (b) All sums relating to Medicare or Medicaid rate adjustments
relating to periods prior to Closing;

          (c) Refunds, rebates and dividends paid in respect of workers
compensation or other insurance premiums paid by Seller relating to periods
prior to the Closing Date, and refunds and additional recoveries by or payments
to Seller from any person for services, goods or supplies which were provided by
such person to Seller prior to the Closing Date;

          (d) Seller's financial books and records, organizational documents,
minute books and other books and records relating to the maintenance and
operations of Seller as a legal entity;

          (e) Those certain contracts set forth on Schedule 1.1(e), which do not
include the Assumed Contracts (as defined in Section 1.6); and

          (f) Those additional items set forth on Schedule 1.1 attached hereto.

     1.2 Closing.

          (a) General. Unless this Agreement shall have been terminated pursuant
to an express right to terminate, as herein provided, the closing hereunder
shall occur at 10:00 a.m. EST on March 31, 2006; provided, however, the closing
may be extended as a result of the failure of the conditions precedent pursuant
to, and in accordance with, the provisions of Article VIII and IX and may also
be extended as to some of the Facilities pursuant to, and in accordance with,
the provisions of Section 12.18 of this Agreement, or as elsewhere provided in
this Agreement. The closing for any Facility hereunder is hereinafter referred
to as the respective "Closing" for such Facility, and the date on which such
Closing occurs is hereinafter referred to as the respective "Closing Date" for
such Facility. The parties agree that there may be multiple Closings and Closing
Dates pursuant hereto, and in each case in which such defined terms are used in
this Agreement, such terms shall refer to the respective Closing Date and
Closing for the respective Assets and Facilities for which the consummation of
the transactions contemplated


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hereby are occurring. All Closings hereunder shall be effective as of 11:59:59
p.m. on the respective Closing Date. On each Closing Date, all executed
documents required from Seller under Section 10.1(a) (the "Seller Documents")
and from Purchaser under Section 10.1(b) (the "Purchaser Documents") in order to
effectuate the consummation of the Closing with respect to the applicable
Facility shall be delivered to the offices of Williams Mullen P.C., Virginia
Beach, Virginia, or at such other date, time and place as the parties hereto may
determine by reasonable consent taking into account the relative location of the
parties and any lenders. In the event that there is more than one Closing
pursuant hereto, then the Purchase Price (as hereinafter defined) and the
Deposits (as hereinafter defined) shall be paid and applied pro rata in
accordance with Schedule 1.7 and all pro rations and adjustments shall be
applied only with respect to the portion of the Assets to which they relate, and
at Closing, the applicable cash portion of the Purchase Price shall be wire
transferred by Purchaser to the Escrow Agent, as defined below, on or before the
Closing Date. In addition, in the event that Seller's portion of the Purchase
Price is not delivered to Seller's account by 2:00 P.M. Eastern Standard Time on
or before the day after the Closing Date for the respective portion of the
Assets, then that respective portion of the Purchase Price shall be increased by
the Per Diem Amount for each day until Seller has received such funds by 2:00
P.M. Eastern Standard Time. The Per Diem Amount shall equal the product obtained
by multiplying (i) the difference obtained by subtracting the Assumed Debt (if
applicable) from the Purchase Price by (ii) seven percent (7%) divided by 365.

          Notwithstanding the foregoing, Seller may deliver all of the Seller
Documents required hereunder with respect to the Closing to the Title Company,
as escrow agent (the "Escrow Agent") and/or Purchaser's counsel on or before the
Closing Date (to hold in escrow in accordance with customary conveyancing
practices subject to the consummation of the Closing) by mail or overnight
courier.

          Notwithstanding the foregoing, Purchaser may deliver all of the
Purchaser Documents required hereunder with respect to the Closing to the Escrow
Agent and/or Seller's counsel on or before the Closing Date (to hold in escrow
in accordance with customary conveyancing practices subject to the consummation
of such Closing) by mail or overnight courier.

     1.3 Purchase Price. The purchase price for the Assets shall be One Hundred
Twenty-Three Million Nine Hundred and Seventy-Three Thousand Two Hundred and
Eighty-Five Dollars ($123,973,285.00), plus the actual book value of the
Inventory on Seller's books and records as of December 31, 2005, not to exceed
$189,150.00 in the aggregate, all subject to the prorations and further
adjustments as provided for in this Agreement; provided, however, that if the
Required Consents (as hereinafter defined) of the landlord(s) are not obtained
pursuant to the terms hereof so as to transfer, assign and convey the Leased
Facilities (excluding the Leased Facility in New Port Richey, Florida (the "NPR
Leased Facility")) to Purchaser, then the purchase price shall be reduced to One
Hundred Five Million Eight Hundred and Ninety Two Thousand and Sixty-Eight
Dollars ($105,892,068.00) for the Owned Properties and the NPR Leased Facility.
The purchase price payable by Purchaser at Closing shall be referred to herein
as the "Purchase Price." The Purchase Price will be allocated among the Assets
as provided for in Section 1.7; provided, however, to the extent there are
multiple Closing Dates pursuant hereto, the portion of the Purchase Price
applicable to the book value of the Inventory shall be based upon the actual
book value applicable to the Facilities being conveyed as of such Closing Date


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and, to the extent the $189,150.00 aggregate amount is reached prior to the
final Closing Date hereunder, the portion of the Purchase Price for Inventory at
the Closing for the remaining Facilities shall be zero.

          In connection with Seller's financing and/or operations of the
Facilities, Seller has made certain deposits which are held by third parties
(i.e., lenders, landlords and bond trustees), a list of which is set forth on
Schedule 1.3 (the "Third Party Deposits"). To the extent that Purchaser assumes
any of such loans, leases or similar financing, Purchaser shall be obligated
either to replace such Third Party Deposits or to pay to the Seller at the
Closing for Facilities to which such Third Party Deposits relate the amount of
such Third Party Deposits, which amounts shall be in addition to the Purchase
Price. Certain amounts listed as Third Party Deposits are subject to pro-ration
as more particularly described in Sections 10.3(b) and (c).

     1.4 Earnest Money. Purchaser has delivered to Escrow Agent (pursuant to its
standard form escrow agreement reasonably acceptable to Purchaser and Seller) an
earnest money deposit in the amount of Five Hundred Thousand Dollars ($500,000)
(the "Initial Deposit"). Within two (2) business days after the Effective Date,
Purchaser shall deliver to Escrow Agent an additional sum of Two Million Dollars
($2,000,000) (the "Additional Deposit"). The Initial Deposit, Additional
Deposit, and all interest accrued thereon shall be allocated among the
Facilities as provided in Section 1.7, and are sometimes hereinafter referred
to, both individually as applicable to the respective Facilities and
collectively as the context may require, the "Deposits". Escrow Agent shall hold
the Deposits in one or more interest bearing accounts mutually acceptable to
Seller and Purchaser.

          (a) In the event Closing occurs, the allocable portion of the Deposits
shall be applied against the allocable portion of the Purchase Price payable at
such Closing and Purchaser shall receive a credit therefor, subject to Section
12.18.

          (b) In the event this Agreement is terminated as a result of (i)
Seller's default under this Agreement (whether or not Purchaser is in default),
(ii) the failure to satisfy any condition to Closing contained in Article VIII
or Article IX or for any Deferred Facility pursuant to Section 12.18, except to
the extent such failure has been caused, directly or indirectly, by Purchaser's
failure to satisfy its covenants or obligations under Article V, which covenants
or obligations by their terms must be satisfied on or before Closing, or (iii)
termination of this Agreement in accordance with Section 11.1 other than
pursuant to Section 11.1(c)(A), then the Escrow Agent shall return the Deposits
or remaining portion thereof to Purchaser, and the parties shall have no further
liability hereunder (except as may be expressly provided herein to survive the
termination).

          (c) In the event Purchaser fails to complete Closing hereunder other
than as provided for in Section 1.4(b) above, then the Escrow Agent shall pay
the Deposits or remaining portion thereof to Seller, which payment of the
Deposits to Seller constitute Seller's full liquidated damages payment as
provided in Section 11.3(b) herein.

          Upon the disbursement of the Deposits pursuant to Sections 1.4 (b) or
(c) above, this Agreement shall be null and void and the parties shall have no
further obligation to the other except for those matters which specifically
survive such a termination.


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     1.5 Payment of Purchase Price. At each Closing, Purchaser shall pay the
respective portion of the Purchase Price, adjusted for any prorations, credits
and additions for the benefit of Purchaser or Seller as specified in this
Agreement, including, without limitation, a credit for any applicable Assumed
Debt, by wire transfer of immediately available federal funds to the Escrow
Agent.

     1.6 Assumed Liabilities. At each Closing, Purchaser shall NOT assume any
liabilities or obligations of Seller whatsoever, fixed or contingent, other than
liabilities and obligations assumed by Purchaser at such Closing pursuant hereto
with respect to the following to the extent such obligations and liabilities
relate to periods after such Closing: (a) the Assumed Debt relating to such
Facilities for such Closing if applicable set forth on Schedule 1.6 (other than
the FNMA indebtedness shown on such schedule), (b) the Assumed Contracts
relating to the Facilities for such Closing, (c) all Patient Care Contracts and
Residential Leases for such Facilities, (d) the Assumed Leases for such
Facilities, if applicable, and (e) the Assumed Facility Leases for such
Facilities, if applicable ((a) - (e) are sometimes collectively referred to
herein as the "Assumed Liabilities"). Seller shall retain and discharge in the
ordinary course all liabilities and obligations of Seller other than the Assumed
Liabilities.

     1.7 Allocation of Purchase Price. The Purchase Price and the Deposits shall
be allocated among the Assets at Closing as provided and as described on
Schedule 1.7 attached hereto. Seller and Purchaser each hereby covenant and
agree that neither will take a position on any income tax return, before any
governmental agency charged with the collection of any income tax, in any
judicial proceeding or otherwise with any Governmental Authority (as hereinafter
defined) that is any way inconsistent with the terms of this Section 1.7 and
Schedule 1.7.

                                   ARTICLE II.
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated herein, Seller represents and warrants
the following, each of which warranties and representations is material to and
is relied upon by Purchaser:

     2.1 Organization and Qualification. The entities that comprise Seller are
duly organized and validly existing and in good standing under the laws of each
of their respective states of organization, each with full corporate power and
authority to carry on its respective business as currently being conducted and
to own or lease and operate the Assets it owns or leases as and in the places
now owned, leased or operated, respectively.

     2.2 Authority; Binding Effect.

          (a) Seller has, and at each Closing will have, the full and
unrestricted corporate right, power and authority to execute, deliver and
perform this Agreement and to consummate the transactions and perform all
obligations contemplated hereby and in all agreements, instruments and documents
being or to be executed and delivered by Seller in connection with such
transactions ("Related Documents").


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          (b) This Agreement and each Related Document, upon due execution and
delivery by Seller, will constitute the legal, valid, and binding obligation of
Seller, enforceable in accordance with its respective terms.

          (c) The consummation of the transactions contemplated herein has been
duly authorized and approved by the board of directors of each of Seller's
General Partners, respectively.

     2.3 Licenses. Schedule 2.3 sets forth all permits, licenses, Medicaid,
Medicare and other provider agreements and other authorizations issued and
required by Governmental Authorities in connection with the ownership,
maintenance and operation of the Facilities, including, without limitation, such
licenses required for the operations of the Facilities as assisted living and
skilled nursing facilities (collectively, the "Licenses"), and except as set
forth on Schedule 2.3, the Licenses are in good standing and Seller has not
received written notice that Seller is in violation of any restriction, rule or
regulation affecting possession and use thereof. Seller agrees to provide
Purchaser with copies of the existing Licenses promptly after the Effective Date
to the extent not previously provided. Seller is the holder of all the Licenses.

     2.4 Governmental Authorities. Except as set forth on Schedule 2.4 attached
hereto, Seller is not required to submit any notice, report or other filing with
any federal, state, municipal, foreign or other governmental or regulatory
authority (a "Governmental Authority" or "Governmental Authorities") in
connection with its execution or delivery of this Agreement or any of the
Related Documents or the consummation of the transactions contemplated hereby
and no consent, approval or authorization of any Governmental Authority is
required to be obtained by Seller in connection with the execution, delivery and
performance of this Agreement.

     2.5 Taxes. Except as set forth in Schedule 2.5 attached hereto, all real
property taxes and assessments, and all personal property taxes and assessments,
in connection with the Assets allocable to the period prior to Closing have been
paid or, by the time of each Assets' respective Closing, will be paid or
prorated between the parties hereto. In addition: (i) all income, sales, bed and
franchise taxes due and payable by Seller, if any, and all interest and
penalties thereon, if any, have been paid in full; (ii) all tax returns required
to be filed by Seller, if any (including, without limitation, all sales,
franchise and payroll tax returns and reports), have been properly and timely
filed, and correctly reflect the tax position of Seller, and all taxes
respectively due under such tax returns have been paid thereby or will be paid
in the ordinary course of Seller's business; (iii) Seller is not subject to a
claim for deficiency or other action in connection with any taxes; (iv) no tax
returns of Seller have been or are being examined by the Internal Revenue
Service or any state or local Governmental Authority; and (v) all tax returns
filed by Seller after the date hereof, covering periods prior to and including
each Closing Date, will be properly and timely filed (giving consideration for
allowable extensions) and all taxes respectively due under such tax returns will
be timely paid.

     2.6 No Defaults. Except as set forth on Schedule 2.6, the execution,
delivery and performance of this Agreement and any of the Related Documents by
Seller does not and will not:


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          (a) Conflict with or result in any breach of the provisions of, or
constitute a default under the articles of incorporation, bylaws, articles of
organization, or operating agreement, as the case may be, of any entity
comprising Seller;

          (b) Violate any restriction to which Seller is subject or, with or
without the giving of notice, the passage of time, or both, violate (or give
rise to any right of termination, cancellation or acceleration under) any
mortgage, deed of trust, license, lease, indenture or other material agreement
or instrument, whether oral or written, to which Seller is a party, or by which
it or the Assets are bound, which will not be satisfied, assigned or terminated
on or prior to each Closing as a result of the transactions contemplated in this
Agreement, or result in the termination of any such instrument or termination of
any provisions in such instruments that will have a Material Adverse Change on
the Facilities, individually or in the aggregate and result in the creation or
imposition of any lien, charge or encumbrance upon the Assets;

          (c) Create any liens or other encumbrances on the Assets in favor of
third parties;

          (d) Constitute a violation of any applicable rule, regulation, law,
statute, ordinance, or any judgment, decree, writ, injunction or order of
Governmental Authority; or

           (e) Result in the breach or violation of any of the warranties and
representations herein set forth by Seller.

     2.7 Contracts.

          (a) Schedule 2.7(a) attached hereto includes a true and correct list
as of the Effective Date of all outstanding contracts or agreements, except (i)
those contracts which are cancelable on thirty (30) days notice without penalty
or premium and which require annual payments of less than Four Thousand Dollars
($4,000) per contract and (ii) the Patient Care Contracts, the Residential
Leases, the Personal Property Leases and the Facility Leases (such contracts and
agreements, excluding (i) and (ii), collectively the "Contracts") whether
written or oral, relating to the Assets, and Seller has provided to Purchaser
true and complete copies of each such Contract. Seller has not received written
notice of any default, and to the knowledge of Seller, there is no default,
existing or continuing by Seller or any other party, under the terms of any
Contracts, and, to Seller's knowledge, each Contract is in full force and effect
and is valid and enforceable by Seller in accordance with its terms, assuming
the due authorization, execution and delivery thereof by each of the other
parties thereto.

          (b) Included on Schedule 2.7(b) are specimen patient admission
agreements ("Patient Care Contracts") and specimen residential leases
("Residential Leases") and a rent roll dated as of August 31, 2005 for each
Facility setting forth all such agreements in effect as of the Effective Date.
All Patient Care Contracts and all Residential Leases are terminable by the
patient or resident therein named upon thirty (30) days notice. Except set forth
on Schedule 2.7(b), all patients and residents of the Facilities have executed
Patient Care Contracts or Residential Leases and all Patient Care Contracts and
all Residential Leases do not vary in any material respect from the terms of the
specimen agreements attached hereto, were entered into on


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an arms' length basis and do not provide for payment of a single sum in exchange
for lifetime care or other prepaid services.

          (c) Schedule 2.7(c)(i) is list of all debt instruments (the "Debt
Documents") executed and delivered in connection with all indebtedness
outstanding with respect to the Assets and currently held or serviced by HUD,
FNMA, the IDAs and the Tax Exempt Issuers (as all such terms are defined in
Section 4.16 below). Except as set forth on Schedule 2.7(c)(ii) Seller hereby
represents and warrants that Seller is in compliance with all material
representations, warranties, covenants, requirements and conditions under the
Debt Documents.

     2.8 Title to Property and Related Matters.

          (a) Seller has received no written notice of and Seller has no
knowledge of (a) any violations of any covenants or restrictions against the
Assets, or (b) any violations of any zoning codes or ordinances or other laws,
rules or regulations of any Governmental Authorities applicable to the Assets.
Seller has no knowledge of any agreements, documents, or instruments which are
not recorded among the land records but which affect the title to any Facility.
Seller has good and marketable title to the Assets, free and clear of all
mortgages, liens, pledges, charges or encumbrances of like kind or character,
except for (i) the indebtedness evidenced by the Debt Documents; (ii) statutory
liens for taxes and other impositions which are not yet delinquent; (iii) the
matters defined as "Permitted Encumbrances" in Section 4.10(b) hereof, and
except for such encumbrances as will be cured or removed by Seller as of the
Closing for such portion of the Assets encumbered thereby.

          (b) Seller is the holder of valid and existing leasehold estates, as
lessee, of the Facilities constituting the Leased Facilities, for the terms set
forth in and pursuant to the terms of the leases (collectively, the "Facility
Leases") for the Leased Facilities. True and complete copies (including
amendments, if any) of the Facility Leases have been delivered to Purchaser and
are listed on Schedule 2.8(b). All of the Facility Leases are in full force and
effect, Seller is not in default under and Seller has not received written
notice of, and Seller does not have any knowledge of, any default or breach
under any of the Facility Leases by any party thereto. To the knowledge of
Seller, no event has occurred which with the giving of notice or lapse of time,
or both, would cause a breach or a default by any party under the Facility
Leases.

          (c) All Facilities are supplied with such utilities as are necessary
for the operation of such Facilities as currently operated and for their
intended purposes.

          (d) Each of the Owned Facilities and the Leased Facilities abuts on
and has direct vehicular access to a public road, or has access to a public road
via a permanent irrevocable easement benefiting the Real Property upon which
such Facility is located, and Seller has no knowledge of, and has received no
notice that alleges any breach or default under any instrument creating such
easement or attempting to terminate or revoke such easement.

          (e) There are no pending rezoning or other pending land use compliance
actions affecting the Assets and Seller has not received written notice of and
has no knowledge of any threatened or contemplated rezoning or other land use
compliance actions affecting or which will affect the Assets. The current use of
each Leased Facility and Owned Facility is


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either lawfully permitted either as a currently conforming use or as a fully
legally "grandfathered use".

          (f) At the Closing and except for liabilities arising under the
contracts listed on Schedule 2.13, which liabilities will be paid by Seller or
if such contracts are assumed by Purchaser, credited to Purchaser pursuant to
Section 4.24, Seller shall not be indebted to any contractor, laborer, mechanic,
materialman, architect or engineer for work, labor or services performed or
rendered, or for materials supplied or furnished, in connection with the Assets
for which any such person could lawfully claim a lien against the Assets, and,
except with respect to amounts less than $20,000 and then only to the extent
Purchaser is indemnified or otherwise protected by bonding or title insurance
with respect to such matters and lien at the expense of Seller, in form and
substance satisfactory to Purchaser.

          (g) There are no condemnation or eminent domain proceedings pending,
or, to the knowledge of Seller, threatened or contemplated against the Assets or
any part thereof, or access thereto, and Seller has not received notice, oral or
written, of the desire of any public authority or other entity to take or use
the Assets or any part thereof. Between the date hereof and the Closing, Seller
will give Purchaser prompt written notice of any actual or any threatened or
contemplated condemnation of any part of the Assets of which it receives written
notice or obtains knowledge.

          (h) There are no parties (other than Seller) in possession of the
Assets, or any portion thereof, other than tenants under the Tenant Leases set
forth in Schedule 2.8(h) who are in possession of space to which they are
entitled and patients pursuant to the Patient Care Contracts and residents
pursuant to Residential Leases, all of whom (with additions and deletions as
experienced by Seller in the ordinary course of business) are set forth on the
rent rolls attached as part of Schedule 2.7(b).

           (i) There are no outstanding options or rights of first refusal to
purchase the Assets or any portion thereof or interest therein, other than
rights running in favor of Seller, all of which are being assigned as part of
the Assets.

     2.9 Hazardous Substances. For purposes of this Agreement, "Environmental
Laws" means the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. Section
6901 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), 42 U.S.C. Sections 9601 et seq., the Clean Water Act, 33
U.S.C. Section 1251 et seq., the Toxic Substances Control Act, the Occupational
Safety and Health Act, and all other applicable state, county, municipal,
administrative or other environmental, hazardous waste or substance, health
and/or safety laws, ordinances, rules, regulations, judgments, orders and
requirements of any Governmental Authority relating or pertaining to the (A) any
aspect of the environment, (B) preservation or reclamation of natural resources,
(C) the management, release and threatened release of Hazardous Substances, (D)
response actions and corrective actions regarding Hazardous Substances, (E) the
ownership, operation and maintenance of personal and real property which manages
or releases Hazardous Substances or at which Hazardous Substances are managed,
(F) common law torts, including so-called "toxic torts", and (G) environmental
or ecological conditions on, under or about the Assets, and all amendments and
regulations promulgated thereunder. For purposes of this Agreement, "Hazardous
Substance" shall mean, in


                                       10

<PAGE>

a regulated quantity, any and all substances, wastes, materials, pollutants,
contaminants, compounds, chemicals or elements which are defined or classified
as a "hazardous substance", "hazardous material", "toxic substance", "hazardous
waste", "pollutant", "contaminant" or words of similar import under any
Environmental Law, including without limitation all dibenzodioxins and
dibenzofurans, polychlorinated biphenyls (PCBs), petroleum hydrocarbon,
including crude oil or any derivative thereof, raw materials used or stored in
the Facility and building components including, but not limited to, friable
asbestos-containing materials which contain Hazardous Substances and mold of a
type or in amounts that may present a health hazard.

          (a) Except as set forth on Schedule 2.9(a), to Seller's knowledge, the
Assets do not contain any Hazardous Substance, except for Hazardous Substances
typically used in, and in quantities necessary for the day-to-day operation of,
the Facilities and which are commonly used in other similar facilities,
including but not limited to cleaning fluids, insecticides and medicines (the
"Common Products"), which Common Products have been used, transported, stored
and disposed of by Seller in compliance with all applicable Environmental Laws;

          (b) Except as set forth on Schedule 2.9(b), there is no pending or
threatened litigation or proceeding before any Governmental Authority in which
any person or entity alleges the presence, release or threat of release of any
Hazardous Substance or violation of Environmental Laws at a Facility;

          (c) Except as set forth on Schedule 2.9(c), Seller has not received
any notice of, and has no knowledge that, any Governmental Authority or employee
or agent thereof has determined, or threatens to determine, or is investigating,
that there is a presence, release or threat of release or placement on, in or
from the Assets, or the generation, transportation, storage, treatment, or
disposal at the Assets, of any Hazardous Substance. Seller shall notify
Purchaser promptly of its receipt of any such notice or knowledge after the
Effective Date;

          (d) Except as set forth on Schedule 2.9(d), Seller has owned and
operated the Assets in compliance with all applicable Environmental Laws, has
obtained all necessary permits under the Environmental Laws for Seller's
operations on the Assets, and has not used any of the Assets for the generation,
storage, manufacture, use, transportation, disposal or treatment of Hazardous
Substances, other than as described in Section 2.9(a) above;

          (e) Except as set forth on Schedule 2.9(e), there has been no
discharge of any Hazardous Substance on or from any of the Assets during the
time of Seller's ownership or occupancy thereof; and

          (f) Seller has delivered to Purchaser copies of all reports or tests
prepared for Seller in its possession, if any, with respect to the compliance of
the Facilities or the Real Property with the Environmental Laws and/or the
presence of Hazardous Substances on the Facilities or the Real Property.

     2.10 Leases. Schedule 2.10 attached hereto contains a true and correct list
of all leases (inclusive of all amendments) of all machinery, equipment and
other tangible property leased to Seller which are used at or relate primarily
to the Facilities (the "Personal Property Leases"), all


                                       11

<PAGE>

leases of space in the Facilities by Seller to third party service providers
(the "Tenant Leases" and collectively with the Personal Property Leases, the
"Leases"). Except as disclosed on Schedule 2.10, each Lease is in full force and
effect; all rents due on or before the date hereof under each Lease have been
timely paid and there has not been and there is no ongoing issue or dispute as
to past rental payments; in each case, Seller is landlord under the Tenant
Leases and the lessee identified on Schedule 2.10, has been in peaceable
possession since the commencement of the original term of such Lease and neither
Seller, nor, to the knowledge of Seller, any other party to such Lease is in
default in any respect thereunder; and no waiver, indulgence or postponement of
Seller's obligations thereunder has been granted by the lessor or of lessor's
obligations by Seller; and Seller has no knowledge or and has not received
written notice that there exists any occurrence, event, condition or act which,
upon the giving of notice or the lapse of time or both, would become a default
by Seller (or, to the knowledge of Seller, any lessor or tenant) under any such
Lease.

     2.11 Transfer of Assets. On each Closing Date, the Assets for which the
Closing is occurring, will be transferred to Purchaser pursuant to this
Agreement.

     2.12 Survey Reports, Etc. Seller has delivered to Purchaser true and
complete copies of all survey reports, waivers of deficiencies, plans of
correction, and any other investigation reports issued with respect to the
Facilities (collectively, "Licensing Surveys") for the three (3) year period
preceding September 30, 2005, and Seller shall also promptly deliver to
Purchaser any Licensing Surveys filed, arising, or involving the Facilities
between the Effective Date and the Closing Date for such Facilities. There are
no material deficiencies or violations noted in any Licensing Surveys, and
except as set forth on Schedule 2.12, Seller has remedied, discharged and
complied with all applicable plans of correction, such that there are no current
violations or deficiencies with respect to any of the Licenses.

     2.13 Capital Expenditures. Except as set forth in Schedule 2.13, and except
for routine expenditures for repairs and replacements in connection with the
ongoing maintenance and upkeep of the Facilities, which Seller completed prior
to December 31, 2005, Seller does not have any outstanding contracts for capital
expenditures relating to the Facilities, nor does it have any agreement,
obligations or commitments for capital expenditures relating to the Facilities,
including, without limitation, additions to property, plant, equipment or
intangible capital assets.

     2.14 Absence of Notices. Except as disclosed on Schedule 2.14, Seller has
not received any written notice, and has no knowledge, that any material
customer or supplier of Seller intends to discontinue, substantially alter
prices or terms to, or significantly diminish its relationship with the
Facilities as a result of the transaction contemplated hereby or otherwise.

     2.15 Patient Records. Except as provided on Schedule 2.15, Seller has
received no written notice, and has no knowledge: (a) that patient and resident
records used or developed in connection with the Business conducted at the
Facilities have not been maintained in accordance with any applicable federal,
state or local laws or regulations governing the preparation, maintenance of
confidentiality, transfer and/or destruction of such records, and (b) of any
material deficiency in the patient or resident records and other relevant
records of the Facilities used or developed in connection with the operation of
the Business conducted at the Facilities.


                                       12

<PAGE>

     2.16 Advance Payments and Patient Funds. The accounting for advance
payments and patient trust fund accounts provided to Purchaser by Seller
pursuant to the provisions of Section 10.3 hereof is complete and accurate in
all material respects.

     2.17 Medicare and Medicaid Participation.

          (a) Except as set forth on Schedule 2.17,

               (i) each of the Facilities that has historically received
Medicare or Medicaid reimbursement is eligible to receive payment without
restriction under Title XVIII ("Medicare") and Title XIX ("Medicaid") of the
Social Security Act and is a "provider" with valid and current provider
agreements and with one or more provider numbers with the federal Medicare and
all applicable state Medicaid and successor programs. For purposes of this
provision, Medicare, Medicaid, CHAMPUS, TRICARE and other federal, state or
local governmental reimbursement programs, or successor programs to any of the
above, are referred to as "Government Programs".

               (ii) each of the Facilities, if any, that has historically
received payments under CHAMPUS or TRICARE is or was, as the case may be, a
"provider" with valid provider agreements, as applicable, and with one or more
provider numbers with CHAMPUS and/or TRICARE, if still currently a "provider".

               (iii) to the extent that one or more of the Facilities
participated in Government Programs, each of the Facilities that participated
was/is in compliance with the conditions of participation of the Government
Programs in which they participated (or participate), in all respects.

               (iv) Seller currently holds such necessary licenses, agreements
and certificates pertaining to Medicare and Medicaid provider agreements entered
into with the State of Florida, the United States, and any municipality or other
Governmental Authority body that authorizes Seller to conduct its business at
the Facilities as presently operated.

          (b) All cost reports of Seller and the Facilities for the Government
Programs which are required to be filed on or prior to the date hereof have been
properly filed and are complete in all material respects, and there are no
outstanding overpayments, set offs or adjustments to any Government Programs
resulting from current or previous audits.

     2.18 Third Party Payor Reimbursement. All billing practices of Seller with
respect to the Facilities to all third party payors, including the Government
Programs and private insurance companies, have been in compliance with all
applicable laws, regulations and policies of such third party payors and
Government Programs in all material respects. Seller has received no written
notice that Seller has billed or received any payment or reimbursement in excess
of amounts permitted by applicable law, except to the extent cured or corrected
and all penalties or interest discharged in connection with such cure or
correction.

     2.19 Licensed Beds and Units. The number of licensed skilled nursing beds
and assisted living units at the Facilities is as set forth on Schedule 2.19.


                                       13

<PAGE>

     2.20 Intellectual Property. Other than (i) the rights to use certain names
associated with the Facilities, and (ii) any software or other computer programs
used in the connection with the operation of the Facilities, each of which
Seller is transferring to Purchaser subject to the applicable licenses
associated with such software programs and pursuant to the terms and provisions
of this Agreement, Seller has no other Intellectual Property of any kind other
than the trade names "Edwinola Retirement Community" and "Fairways Pines at Sun
N Lake", which Seller is retaining in connection with its continued ownership
and operation of the facilities to which such names relate. Such names and
software are listed on Schedule 2.20 attached hereto. For these purposes,
"Intellectual Property" shall mean, collectively, all: (i) United States or
foreign patents, patent applications, patent disclosures, and all renewals,
reissues, divisions, continuations, extensions or continuations-in-part thereof;
(ii) trademarks, service marks, trade dress, trade names, fictitious names,
corporate names, and registrations and applications for registration thereof;
and (iii) copyrights (registered or unregistered), registrations and
applications for registration thereof, including all renewals, derivative works,
enhancements, modifications, updates, new releases or other revisions thereof.

     2.21 Financial Statements. Seller has delivered to Purchaser the documents
listed on attached Schedule 2.21 certified by the chief financial officer of
Seller which contains: (i) copies of the following financial statements
(collectively, the "Financial Statements"): (a) individual Facility income
statements for the fiscal years ended 2002, 2003 and 2004; (b) individual
Facility income statements consolidated and consolidating balance sheet and
statements of income, changes in stockholders equity (the "Most Recent Financial
Statements") as of and for the eight (8) month period ended August 31, 2005 (the
"Most Recent Fiscal Month End") for the Seller. The Financial Statements
(including the notes thereto) have been prepared on the accrual basis of
accounting applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of Seller and Facilities as of such dates
and the results of operations of Seller and the Facilities for such periods;
(ii) a schedule of capital improvements to the Facilities for the fiscal years
ended 2002, 2003 and 2004; (iii) copies of Seller's audited financial
statements, for the periods ending December 31, 2002, 2003 and 2004 which
financial statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and which present fairly
the financial condition of Seller as of such dates and the results of operations
of Seller for such periods, and (iv) the rent roll which is true, complete and
accurate in all material respects through August 31, 2005 as set forth on
Schedule 2.7(b). During the term of this Agreement, Seller shall deliver to
Purchaser monthly individual Facility income statements and updated rent rolls
not later than the 15th day of the next succeeding calendar month. On not less
than five (5) business days prior written notice from Purchaser, Seller agrees
to provide Purchaser's auditors sufficient access to information and personnel
to obtain all of the information they reasonably require to prepare audited
financial statements of the Owned and Leased Facilities for fiscal years 2002,
2003, 2004 and 2005 and comparable unaudited interim financial statements from
January 1, 2006 through each Closing Date. Seller also agrees to cause an
executive officer of Seller with knowledge concerning the financial affairs of
the Owned and Leased Facilities to execute and deliver a representation letter
to Purchaser's auditors with respect to all financial information delivered to
Purchaser and its auditors, in a form and substance substantially similar to
what would have been executed and delivered to the auditors had Seller been
preparing audited financial statements for such time periods with respect to the
Owned and Leased Facilities.


                                       14

<PAGE>

     2.22 No Litigation. Except as set forth on Schedule 2.22 attached hereto,
there are no actions, suits, claims, governmental investigations or other legal
or administrative proceedings, or any orders decrees or judgments in progress,
pending or in effect, or, to the knowledge of Seller, threatened against or
relating to Seller, the Facilities, Seller's operation of the Facilities, any of
the Assets, or against or relating to the transactions contemplated by this
Agreement, and there are none pending in state courts, or in any federal courts,
or, to the knowledge of Seller, pending in other jurisdictions or threatened in
writing, at law or in equity, by or before any federal, state or municipal court
or other governmental agency, department, commission, board, bureau,
instrumentality or other Governmental Authority. The matters set forth on
Schedule 2.22 if decided adversely will not materially and adversely affect the
Assets, Seller, or Seller's operation of the Facilities or the Business.

     2.23 Compliance with Medicare and Medicaid Law.

          (a) Except as set forth on Schedule 2.23 attached hereto, there is no
litigation, claim, proceeding or investigation currently pending against Seller
or relating to the Facilities for any violation or alleged violation of, and
Seller has received no written notice, and Seller has no knowledge, of any
threat of any suit, action, claim, dispute, investigation, agency review or
other proceeding pursuant to or involving, (i) the False Claims Act, 31 U.S.C.
Sections 3729 et seq., (ii) the Civil Monetary Penalties Law, 42 U.S.C Section
1320a-7a, (iii) federal or state anti-kickback statutes, including but not
limited to 42 U.S.C. 1320a-7b, (iv) federal or state referral laws, including
but not limited to 42 U.S.C. Section 1395nn, (v) regulations promulgated
pursuant to any of the foregoing statutes, or (vi) any other federal or state
law or regulation of general applicability to health care fraud, governing or
regulating the management of health care providers, or governing or regulating
medical billing or reimbursement, including all applicable Medicare and Medicaid
statutes and regulations (collectively the "Medicare/Medicaid Laws").

          (b) Seller, and each of the Facilities have timely filed all forms,
applications, reports, statements, data and other information required to be
filed with federal, state or local entities under federal or state laws or
regulations in connection with the Medicare/Medicaid Laws, including but not
limited to cost reports required to be filed with respect to the Facilities, as
more fully set forth in Section 2.17 hereof.

          (c) The Facilities have the number of licensed skilled nursing beds
and certified beds as set forth in Schedule 2.19 and all billing to the
Government Programs has been consistent with these certification designations.

          (d) There are no outstanding bed taxes or other fees owing to state
licensing authorities or any of the Government Programs.

          (e) There are no outstanding Life Safety Code deficiencies for any of
the Facilities.

          (f) There are no outstanding waivers for any Life Safety Code
deficiencies.

          (g) There are no pending Medicare or Medicaid audits by any
Governmental Agency except as set forth on Schedule 2.23(g).


                                        15

<PAGE>

     2.24 Absence of Certain Changes or Events. Since September 1, 2005, all of
the parties comprising Seller have not:

          (a) Suffered any Material Adverse Change in the financial condition,
assets, or liabilities of the Facilities, or the operation of the Facilities,
individually or in the aggregate;

          (b) Other than in the ordinary course of business, consistent with
past practices, granted any increase in the compensation payable or to become
payable by Seller to any of its officers, employees or agents employed at the
Facilities (except compensation granted to new employees who are hired in the
ordinary course of business on substantially similar terms to existing employees
with comparable duties and experience);

          (c) Sold, transferred or otherwise disposed of, or agreed to sell,
transfer or otherwise dispose of, any assets relating to or in connection with
the Facilities having a fair market value at the time of sale, transfer or
disposition of $25,000 or more in the aggregate, or cancelled, or agreed to
cancel, any debts or claims relating primarily to the Facilities in the amount
of $10,000 or more in the aggregate; or

          (d) Made any change in any method of accounting or accounting practice
relating to the Facilities.

     2.25 Condition of Assets.

          (a) Except as set forth on Schedule 2.25, all of the Assets are in
Seller's possession or control and are located at or on the Leased Facilities or
the Owned Facilities.

           (b) Except as disclosed on Schedule 2.25, all of the Assets are, to
Seller's knowledge, in good repair and working order, subject to normal wear and
tear.

     2.26 Employee and Labor Relations. Except as provided under Schedule 2.26:

          (a) Compliance. Seller is in compliance with all federal, state or
other applicable laws, domestic or foreign, and all rules, regulations,
ordinances, orders and decrees of Governmental Authorities respecting employment
and employment practices concerning the Facilities (collectively "Employment
Laws").

          (b) No Claims. No legal claim in respect of application for
employment, employment, the terms or conditions of employment, the handling of
benefits or termination of employment of any person has been asserted or
threatened, against Seller or any of its subsidiaries, in connection with the
operation of the Facilities.

          (c) No Labor Actions. No labor strike, picketing action, dispute,
slowdown or stoppage, or unfair labor practices are actually pending or, to the
knowledge of Seller, threatened against, or involving, Seller or any of the
Facilities.

          (d) No Bargaining Agreements. Seller is not a party to any collective
bargaining agreement, and no collective bargaining agreement is currently being
negotiated by


                                       16

<PAGE>

Seller. To Seller's knowledge no petitions for representation have been filed
against any of the Facilities nor have any demands been made for recognition.

          (e) ETO. Under Seller's employment policies, Seller is not obligated
to pay employees for earned sick pay upon the termination of employment
regardless of the reason thereof and Seller does not accrue sick pay as an
obligation on its books and records. Seller's employment policies do not allow
or otherwise provide for personal days.

          (f) At-Will Employees. All employees at the Facilities are employees
of Seller and are employees-at-will.

          (g) WARN Compliance. Seller has taken, as required by law, any and all
actions necessary to comply with the Worker Adjustment and Retraining
Notification Act ("WARN"), or state statute of similar import, with respect to
any event of occurrence affecting the Facilities since the effective date of
WARN.

     2.27 Employee Benefit Employee Benefit Plans.

          (a) Except as disclosed on Schedule 2.27, Seller has never maintained
any defined benefit plan within the meaning of section 414(l) of the Internal
Revenue Code of 1986.

          (b) Except as disclosed on Schedule 2.27, Seller has never been
obligated to contribute to any multi-employer plan within the meaning of ERISA
Section 3(37).

          (c) Schedule 2.27 sets forth an accurate and complete list of all
Employee Benefit Plans (as defined hereinafter) and specifies which Seller
sponsors each of said Employee Benefit Plans. "Employee Benefit Plans" mean all
benefit plans and benefit arrangements in which Seller's employees at the
Facilities participate.

          (d) Each Employee Benefit Plan has, at all times, been maintained and
operated in compliance, in all material respects, with its terms and
requirements of all applicable Employee Benefit Plans, including, without
limitation, ERISA, as amended, and the Internal Revenue Code of 1986, as amended
(the "Code").

          (e) Seller shall remain responsible for maintaining all Employee
Benefit Plans in compliance with applicable law and Purchaser shall have no
obligation with respect to any of Seller's Employee Benefit Plans at any time.

     2.28 Inventory and Supplies. As of the Effective Date and at each
Facility's respective Closing, the Inventories are and will be in sufficient
quantity and condition for the normal operation of the Business at the
Facilities and in compliance with all requirements of Governmental Authorities.
At each Facility's respective Closing, the Inventories will be in substantially
the same quantity as on December 31, 2005.

     2.29 Professional Liability Insurance. Attached as Schedule 2.29 are either
copies of or a list of the certificates of the professional liability insurance
carried by Seller with respect to the Facilities, and upon request by Purchaser,
Seller shall make copies of any policies and provide same to Purchaser.


                                       17

<PAGE>

     2.30 Truth of Warranties, Representations, and Statements. All of the
statements, representations, and warranties made by Seller in this Agreement and
the statements and information set forth in the attached Schedules are true and
accurate in every material respect.

     Notwithstanding anything else to the contrary herein, any reference in this
Agreement to "knowledge," of Seller shall be deemed to mean the actual knowledge
of George P. Wagner, Jr., Alan D. Parrish, William Filippone and each of
Seller's regional vice presidents after due inquiry by such persons of the
resident directors and executive directors of the Facilities, all in their
representative capacities as employees, officers or directors of Seller and not
in their individual capacities.

     PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT EXCEPT WITH RESPECT TO THE
FOREGOING REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE II ABOVE, OR
THAT WHICH MAY BE EXPRESSLY SET FORTH ELSEWHERE IN THIS AGREEMENT (IF AT ALL) OR
IN THE SELLER DOCUMENTS OR RELATED DOCUMENTS, THE ASSETS ARE TO BE CONVEYED BY
SELLER TO PURCHASER IN "AS-IS, WHERE-IS" CONDITION WITHOUT WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AS TO ZONING, PHYSICAL CONDITION,
ENVIRONMENTAL CONDITION, SUITABILITY FOR A PARTICULAR PURPOSE OR ANY OTHER
MATTER WHATSOEVER.

                                  ARTICLE III.
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated herein, Purchaser represents and warrants the
following, each of which warranties and representations is material to and is
relied upon by Seller:

     3.1 Corporate Organization; Etc. Purchaser is a corporation duly organized
and validly existing under the laws of the State of Delaware with full power and
authority to own all of its properties and assets and to carry on its business
as it is now being conducted.

     3.2 Authorization, Binding Effect. Purchaser has, and at each Closing will
have, the full and unrestricted right, power and authority to execute, deliver
and perform this Agreement and to consummate the transactions and perform all
obligations contemplated hereby and in all agreements, instruments and documents
being or to be executed and delivered by Purchaser in connection with such
transactions. The consummation of the transactions contemplated herein have been
duly authorized and approved by all necessary corporate action of Purchaser.
This Agreement and each such other agreement, instrument and document, upon due
execution and delivery by Purchaser, will constitute the legal, valid, and
binding obligation of Purchaser, enforceable in accordance with its terms.

     3.3 No Violation. Purchaser is not subject to or obligated under any
certificate of incorporation, bylaw, law, or rule or regulation of any
Governmental Authority, or any agreement or instrument, or any license,
franchise or permit, or subject to any order, writ, injunction or decree which
would be in any material respect breached or violated by the execution, delivery
or performance of this Agreement.


                                       18

<PAGE>

     3.4 No Litigation. Purchaser is not a party to, or defending or subject to,
any investigation, litigation, arbitration or other legal proceeding, nor is any
such legal proceeding threatened, which would, have a Material Adverse Change on
Purchaser's ability to execute, deliver and perform this Agreement and the
documents and transactions contemplated hereby.

     3.5 Truth of Warranties, Representations, and Statements. All of the
statements, representations, and warranties made by Purchaser in this Agreement
are true and accurate in every material respect.

                                   ARTICLE IV.
                               COVENANTS OF SELLER

     From the date hereof and until the respective Closing for each of the
Facilities and to the extent thereafter as contemplated herein, except as
otherwise consented to or approved by Purchaser in writing, Seller covenants and
agrees as follows:

     4.1 Regular Course of Business. Seller shall (a) operate the Facilities in
a manner substantially consistent with applicable requirements of all
Governmental Authorities, Seller's past practices and industry standards for
operation of assisted living, independent living and skilled nursing facilities
(with the understanding that Seller shall not be required to make any capital
expenditures except (i) as provided for in Seller's 2005 budget and which have
not been completed as of the execution of this Agreement, or (ii) as needed on
an emergency basis or as otherwise required to maintain the Facility or
Facilities in a good operating condition or (iii) as required under Section
4.24); (b) maintain the Assets in good order and repair, reasonable wear and
tear excepted and otherwise in sufficient repair, order, and condition,
sufficient to satisfy the representations and warranties as to the condition and
quantity of the Assets set forth in Article II: (c) comply with all applicable
laws, rules, regulations and requirements with respect to the Assets and the
operation thereof, including without limitation all required regulatory
standards of any Governmental Authorities with regulatory jurisdiction over the
Facilities and compliance with all Governmental Programs; (d) timely pay all
rents and other payments due on or before the Closing under, and use its
commercially reasonable efforts to otherwise maintain and comply with, all
Assumed Debt, all Assumed Contracts, all Tenant Leases, all Personal Property
Leases, all Facility Leases, all Patient Care Contracts and all Residential
Leases without change except as expressly provided herein; (e) not make any
changes or modifications in any Assumed Contracts, Tenant Leases, Personal
Property Leases, Facility Leases, Patient Care Contracts, Residential Leases and
Debt Documents or incur any further obligations or surrender any rights
thereunder other than as routinely occur in the ordinary course of business; (f)
not enter into any agreements or leases which would have had to be disclosed on
any schedule hereto had such agreements or leases been entered into prior to the
Effective Date other than as terminable, without penalty, upon advance notice of
thirty (30) days or less; (g) keep in full force and effect present insurance
policies through the Closing Date or other comparable insurance coverage; and
(h) use its commercially reasonable efforts to maintain in good standing all
Licenses necessary to operate the Facilities and to maintain all goodwill of
patients, residents, employees and vendors.

     4.2 Borrowing. Seller shall not create or permit to become effective any
mortgage, pledge, lien, encumbrance or charge of any kind upon the Assets other
than the Permitted Liens.


                                       19

<PAGE>

     4.3 Full Access and Disclosure.

          (a) Seller shall, upon reasonable prior notice, afford to Purchaser
and its counsel, accountants, environmental consultants, engineers, appraisers
and other authorized representatives reasonable access during business hours to
the Facilities, and all computer systems, books and records in any way relating
to the Assets and/or the Facilities, including, but not limited to, the roof,
all equipment (fixed and movable), heating and cooling systems, and any and all
vehicles, financial data and records, operating data and other information
reasonably requested, including the most recent financial statements, cost
reports, inspection reports, plans of correction with respect to Licensing
Surveys (all with respect to the past three (3) years), current room rates
(including dates and amounts of increases), census data and patient mix, payroll
information, Medicaid reports, employment agreements, personnel policies,
occupancy agreements with patients, leases, and all contracts, agreements,
correspondence and other documents relating to outside contractors, vendors,
consultants, or other outside parties relating to the Facilities and to which
any one or more of the Facilities are now or may become a party in order that
Purchaser may have full opportunity to make such reasonable investigations of
the Assets and the Facilities as Purchaser shall desire to make. Such access
shall include the right to meet with all personnel, subject to Purchaser's
obligation to comply with the confidentiality provisions set forth in this
Agreement. Purchaser shall provide Seller with at least two (2) days' advance
notice by telephone of the date, time, place and expected attendees for any
visits to the Facilities. Seller shall furnish such additional financial and
operating data and other information as Purchaser and its representatives shall
from time to time reasonably request, and Seller shall supplement or amend any
information, written or otherwise, previously delivered or otherwise disclosed
to Purchaser with respect to any matter hereafter arising which, if existing or
occurring at the Effective Date, would have been required to be set forth or
disclosed.

          (b) Purchaser hereby agrees to indemnify and hold harmless Seller
against: (i) any physical damages or physical injuries associated with
completion of such inspections or investigations resulting from the actual
negligence of Purchaser or its agent, and (ii) claims by third parties for
monies due incidental to such inspections or investigations, which undertaking
shall survive the termination of this Agreement or the conveyance of the Assets
by Seller to Purchaser for the period of one (1) year. Purchaser further
undertakes that any damage occasioned to the Real Property, Personal Property or
the Facilities caused by such inspections or investigations shall be cured by
restoring the Real Property, Personal Property or portion of the Facilities
disturbed or damaged back to its pre-entry and pre-disturbed state. Purchaser's
parent company, Alterra Healthcare Corporation, is executing this Agreement for
the sole purpose of guarantying the obligations and covenants of Purchaser under
this Section 4.3(b).

     4.4 Consents. Seller shall use its commercially reasonable efforts to
obtain, on or prior to each Closing, all applicable consents necessary for
Seller to fulfill their obligations to consummate the transactions contemplated
hereby.

     4.5 Compliance With Laws. Seller shall comply in all material respects with
all applicable laws, rules, regulations and requirements of all Governmental
Authorities, in conjunction with the execution, delivery and performance of this
Agreement and the transactions contemplated hereby.


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     4.6 Taxes. Seller shall file federal, state, local, and, to the extent
applicable, estimates and reports and pay all amounts then due, for all periods
through and including each Closing Date to the extent necessary to transfer the
Assets to Purchaser in accordance with the terms of this Agreement.

     4.7 No Disposition of Assets. Seller shall not sell, lease or otherwise
dispose of or distribute any of the Assets or properties related thereto or
necessary for operation of the Facilities and, to the extent depleted in the
ordinary course, Seller shall restock and replenish any portion of the Assets
consumed or used during the term of this Agreement.

     4.8 Further Documentation. Seller agrees that for a two (2) year period of
time following the final Closing hereunder, upon request by Purchaser, it will
do, execute, acknowledge, and deliver, or cause to be done, executed,
acknowledged, and delivered, all such further acts, deeds, assignments,
transfers, conveyances and assurances as may be reasonably required, without
enlarging or extending any liability of Seller beyond what is otherwise
contemplated by this Agreement in any manner and without requiring the
expenditure of funds by Seller, in order to more fully assign, grant, transfer,
convey, assure and confirm to Purchaser, or to its successors and assigns, or
for aiding and assisting in collecting and reducing to possession, any or all of
the Assets to be sold to Purchaser pursuant to this Agreement or transitioning
the operations of the Facilities to Purchaser.

     4.9 Confidentiality. Seller will use its commercially reasonable efforts to
keep confidential all information relating to the terms of this Agreement and
all information relating to Purchaser, its officers and directors (other than
information which is a matter of public knowledge or which has heretofore been
or is hereafter published in any publication for public distribution or filed as
public information with any Governmental Authority) and such information shall
not at any time be used for the advantage of Seller or its representatives,
except as otherwise contemplated by this Agreement, or disclosed to third
parties (including employees at the Facilities) by Seller or its
representatives.

     4.10 Title Insurance and Survey; Governmental Approvals.

          (a) Seller has provided to Purchaser a copy of all currently effective
title insurance policies and plats and surveys in its possession that relate to
the Real Property.

           (b) Seller has obtained and provided to Purchaser: (i) updated ALTA
as-built real property surveys for each of the Facilities (each a "Survey" and
collectively the "Surveys"), and (ii) title commitment for each of the
Facilities (each a "Title Commitment" and collectively the "Title Commitments"),
issued by Land America through its national office in Orlando, Florida ("Title
Company"), which contain commitments of the Title Company to issue to Purchaser
title insurance policies on extended coverage 1970 or 1992 ALTA Owners Policy
forms, in form and substance reasonably acceptable to Purchaser (each a "Title
Policy" and collectively the "Title Policies") insuring the fee simple interest
of Purchaser in the Owned Facilities and valid leasehold estates in the Leased
Facilities, together with copies of all recorded exceptions to title referred to
therein (the "Exception Documents"). Each Title Commitment is or shall be in the
amount allocated to the Facilities and the Real Property and Improvements for
the applicable Facility as set forth on Schedule 1.7. Seller will cause all
standard exceptions (the


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"Standard Title Exceptions") to be deleted from the policies at the Closing,
including without limitation, executing Seller's affidavits, gap indemnities and
the like other than exceptions for such itemized matters shown on the Surveys to
which Purchaser does not object pursuant to the provisions hereof. Purchaser is
delivering to Seller a notice simultaneously herewith, approving or disapproving
in writing the Title Commitments and Surveys with respect to the Facilities (the
"Title Notice"), with any such notice of disapproval specifying the Exception
Documents or other matters to which Purchaser objects. The failure of Purchaser
to disapprove any matter reflected in the Title Reports or Survey with respect
to any Facility in the Title Notice shall be deemed a waiver by Purchaser of any
right to object to any matter so shown; provided, however, Seller shall be
unconditionally obligated to pay any outstanding indebtedness evidenced by, and
cause the release of any lien, mortgage, deed of trust, judgment, FiFa or other
encumbrance capable of being released through or as a result of the payment of
money (collectively, "Monetary Encumbrances") other than the Assumed Debt,
irrespective of whether Purchaser objects to same. Notwithstanding the
foregoing, Purchaser shall not have the right to disapprove any of the
following, all of which shall be deemed to be "Permitted Encumbrances"
hereunder: (A) matters created or consented to in separate written consent by
Purchaser, and (B) the Assumed Liabilities. Upon receipt of the Title Notice
from Purchaser disapproving any encumbrance or other matter reflected in the
Title Commitment or Survey with respect to any Facility, Seller shall have ten
(10) business days from the date of such notice in which to cure the same (which
cure may be effected by payment and discharge of the objectionable item or by
causing the Title Company to remove the same as an exception or affirmatively
insure over such item provided such affirmative insurance shall be reasonably
satisfactory to Purchaser and sufficient, in Purchaser's reasonable judgment, to
adequately address Purchaser's concerns with respect to such matter) and in the
event Seller shall fail or refuse to do so within said ten (10) business day
period, Purchaser shall have five (5) business days thereafter in which to
advise Seller in writing of Purchaser's election (x) to make such payments as
are necessary to effect releases of such claims Seller is not prepared to cure
and to proceed to Closing or (y) to terminate this Agreement in accordance with
Article XI with respect to the Facility or Facilities encumbered with such
objectionable lien, encumbrance or other matter, in which case the Purchase
Price shall be reduced by the amount allocated to such Facility as set forth on
Schedule 1.7 or (z) extend the Closing Date for such Facility in accordance with
the provisions of Section 12.18 to enable Purchaser and/or Seller to so cure.
Seller shall pay, or cause to be paid, all Monetary Encumbrances affecting or
recorded against the Facilities other than the Assumed Debt. In the event that
any update to any Title Commitment prior to or on the Closing Date for any
Facility reveals any new matter not previously shown or disclosed on the prior
Title Commitment for such Facility, then Purchaser shall have the same rights of
objection, termination and extension of the Closing Date, and Seller the same
obligations of cure, as set forth above. Notwithstanding the foregoing,
Purchaser shall have no right to object to title to the unimproved .72 acre
tract lying adjacent to the Jackson, Tennessee facility, although Purchaser may
in its sole discretion elect to not take title to such unimproved tract at the
Closing for the Jackson, Tennessee facility and, in such case, there shall be no
reduction in the applicable Purchase Price and then such tract shall be deemed
an Excluded Asset.

          (c) Purchase has completed Purchaser's environmental due diligence of
the Assets and Purchaser is simultaneously herewith delivering to Seller a
notice objecting to certain environmental conditions at the Assets. Seller shall
have ten (10) business days from the date of Seller's receipt of such notice in
which to advise Purchaser whether or not Seller will cure the


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same prior to Closing, and if Seller fails or refuses to do so within said ten
(10) business day period, Purchaser shall have five (5) business days thereafter
in which to advise Seller in writing of Purchaser's election (x) to waive the
matters to which Purchaser objected and to proceed to Closing or (y) to
terminate this Agreement in accordance with Article XI with respect to the
Facility identified in such Purchaser's notice, in which case the Purchase Price
shall be reduced by the amount allocated to such Facility as set forth on
Schedule 1.7 or (z) extend the Closing Date for such Facility in accordance with
the provisions of Section 12.18 to enable Purchaser and/or Seller to so cure the
environmental condition.

     4.