PURCHASE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made and entered into this 16 ^th day of December, 2005 by and between CLEVELAND SENIORCARE CORP. , an Indiana corporation (the “ Seller ”), and OHI ASSET II (OH), LLC , a Delaware limited liability company (the “ Buyer ”).

WHEREAS , Seller is the owner of the eleven (11) healthcare facilities identified on Exhibit A attached hereto and made a part hereof as the “ Facilities ” (each being referred to herein individually as a “ Facility ”); and

WHEREAS , Seller desires to sell, transfer, convey and assign to Buyer, and Buyer desires to acquire, assume and accept from Seller, certain property and assets associated with the Facilities (the “ Property ,” as further defined herein) on and subject to the terms and conditions contained in this Agreement; and

WHEREAS , Buyer, after it acquires the Property, intends to sell or lease, as the case may be, the Property and the Facilities to CSC MSTR LSCO, L.L.C. , an Ohio limited liability Company (the “ Tenant ”), with any such lease to be pursuant to a master lease agreement (“ Lease ”), which shall contain such terms and conditions as the Buyer and Tenant shall agree, provided that such transactions or Lease shall have no effect on, nor be part of this Agreement; and

WHEREAS , simultaneous with the closing of the transactions contemplated by this Agreement and in connection with Buyer’s selling or leasing the Property and the Facilities to Tenant pursuant to the Lease, Seller and Tenant shall enter into and execute an Operations Transfer Agreement (“ Transfer Agreement ”), pursuant to which Seller shall transfer the operations of the Facilities to Tenant, and Tenant shall accept transfer of the operations of the Facilities; and

WHEREAS , simultaneous with the closing of the transactions contemplated by this Agreement, in connection with Buyer’s selling or leasing of the Property and the Facilities to Tenant pursuant to the Lease, and in furtherance of the Transfer Agreement, Seller and Bedrock Slate and Gravel Pit, LLC, an Ohio limited liability company (“ Wind Down Agent ”), shall enter into and execute an Assignment and Assumption Agreement (“ Assignment Agreement ”), pursuant to which Seller shall sell, transfer, convey, and assign to Tenant and Tenant shall purchase, acquire, assume, and accept from Seller those certain assets and liabilities associated with the Facilities that are not otherwise sold, transferred, conveyed, assumed, or assigned to Buyer under this Agreement or to Tenant under the Transfer Agreement.

WHEREAS , as a condition to Seller entering into this Agreement, the Assignment Agreement, and the Transfer Agreement, and in connection with Buyer’s leasing the Property to Tenant pursuant to the Lease, Tenant shall cause its affiliate, CommuniCare Health Services, Inc. (“CHS”) to execute and deliver a Guaranty (the “Guaranty”), pursuant to which CHS will guaranty the obligations of Wind Down Agent under the Assignment Agreement.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are acknowledged hereby, the parties hereto agree to incorporate the above recitals into this Agreement as if fully rewritten herein and further agree as follows:

1.    Sale . Seller agrees to sell, convey, and assign to Buyer, and Buyer agrees to purchase and assume from Seller, for the Purchase Price (as hereinafter defined), and on the terms and conditions set forth in this Agreement, the Property (as hereinafter defined). For purposes of this Agreement, the term “ Property ” shall be deemed to mean on a collective basis:

1.1.    The Land . The parcels of land legally described on Exhibit E attached hereto and made a part hereof, together with all rights, easements and interests appurtenant thereto including, but not limited to, any streets or other public ways adjacent to the Land and any water or mineral rights owned by Seller (collectively, the “ Land ”).

1.2.    The Improvements . All improvements located on the Land, including, but not limited to, the Facilities, and all other structures, systems, fixtures and utilities associated with, and utilized in, the ownership and operation of the Facilities (all such improvements being collectively referred to as the “ Improvements ”).

1.3.    Personal Property . All tangible personal property located on or in the Land or Improvements or used in connection with the ownership, operation and maintenance of the Facilities (the “ Personal Property ”), including, but not limited, to, all, if any, building materials, supplies, hardware, and carpeting. The Personal Property does not include the “ Consumables ”, which are hereby defined to be the inventory of food, dietary supplies, medical supplies, floor stock, maintenance supplies, paper goods, linens, laundry supplies and all other consumables, disposable items used in the operation of the Facilities, and other inventory maintained in connection with Seller’s ownership of the Facilities (the “ Inventory ”). It is understood and agreed that an inventory of all Consumables shall be taken effective as of the Closing Date and the value of the Consumables in excess of any state mandated requirement at the Seller’s cost, (the “ Consumables Value ”) shall be incorporated at Closing into the APBS (as defined in the Assignment Agreement) as an asset being acquired by the Wind Down Agent pursuant to the Assignment Agreement.

1.4.    Intangible Personal Property . Each and all of the following items of intangible property owned by Seller or utilized in connection with the ownership and operation of the Facilities (collectively, the “ Intangibles ”): (i) all right, title and interest in the identity or business of the Facilities as a going concern, including without limitation, any names or trade names by which the Facilities or any one or more of them may be known; (ii) to the extent assignable or transferable, all right, title and interest in and to each and every guaranty and warranty concerning the Improvements and the Personal Property, including, without limitation, any roofing, air conditioning, heating, elevator or other guaranty or warranty relating to the construction, maintenance or replacement of the Improvements or any portion thereof; (iii) all right, title and interest in and to all guaranties and warranties given to Seller that have not expired (either on a “claims made” or occurrence basis) in connection with the operation, construction, improvement, alteration or repair of the Improvements; (iv) to the extent assignable or transferable, all right, title and the interest in, to and under all governmental permits, licenses, authorizations, operating rights and approvals associated with the physical construction of the Improvements (not including any permits, licenses, authorizations or approvals associated with the operation of the Facilities as health care facilities or otherwise); and (v) to the extent assignable or transferable, all right, title and interest in, to and under any certificate of need, operating rights from a governmental authority related to the construction and/or operation of any Facility or any of the Property for the use of a specified number of beds in a nursing facility, MR/DD facility, assisted living facility and/or rehabilitation hospital, and any other activities carried on by the Seller in the Facilities and/or the Property, or alteration of any such Facility or the Property or modification of services provided at such Facility or the Property.

1.5.    Business Records . To the extent that the Seller has ownership and control, all of the following maintained by, issued to or held by Seller: books and records relating to the Facilities or the operation thereof, including, without limitation, files, invoices, forms, accounts, correspondence, patient records, technical, accounting and procedural manuals, employment records, actuarial studies, studies, reports or summaries relating to any environmental matters, and other books and records relating to the ownership, maintenance or operation of any of the Facilities or any of the Property, surveys, engineering or environmental reports and other studies, investigations or depictions of the Facilities or the Property (collectively, the “ Business Records ”) to the extent the Seller has the right under applicable law to convey or transfer them. Seller and Buyer acknowledge and agree that at the request and direction of Buyer, the Business Records shall be transferred, conveyed, and assigned to Tenant upon Closing in furtherance of Buyer’s selling or leasing of the Property and the Facilities to Tenant pursuant to the Lease and in accordance with the Transfer Agreement; provided Tenant shall be required to fulfill the Seller’s obligations thereunder.

1.6.    For purposes of this Agreement, the term “Provider Agreements” shall mean to the extent they are assignable, any provider agreements held by or issued to Seller or any Facility under which the Facilities are eligible to receive payment under (i) Title XVIII (“ Medicare ”), Title XIX (“ Medicaid ”) or any other governmental or quasi-governmental third party payor programs, (ii) any private or quasi-private healthcare reimbursement or private payor programs (including so-called “HMO” and “PPO” programs) (herein, “ Third Party Payor Programs ”), and (iii) any other agreement, arrangement, program or understanding with any federal, state or local governmental agency or organization or private organization pursuant to which the Facilities qualify for payment or reimbursement for medical or therapeutic care or other goods or services rendered or supplied to any resident.

1.7.    Excluded Property . The Property shall not, however, include any of the following items (the “ Excluded Property ”) or proceeds therefrom, that may be paid or otherwise realized after Closing: (i) any and all cash (including resident funds), bank deposits, escrows and other cash equivalents, certificates of deposits, marketable securities, cash deposits made by the Seller to secure contract obligations (except to the extent the Seller receives a credit therefor under any other provision of this Agreement), and all accounts receivable in connection with the Facilities accruing prior to the Closing Date, including, without limitation, any and all reimbursements which may be due under any Provider Agreements; (ii) any and all rights in and to claims or causes of action of the Seller against third parties (including, without limitation, for indemnification) with respect to, or which are made under or pursuant to, other Excluded Property; (iii) all prepaid expenses (and rights arising therefrom or related thereto) except to the extent taken into account in determining the prorations provided for under „Section 12 ; (iv) any employment agreements, the same to be assumed by Tenant in the Transfer Agreement; (v) except as set forth in Section 14 , any and all contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including, without limitation, rights arising from any refunds due with respect to insurance premium payments to the extent they relate to such insurance policies; and (v) any records relating to Excluded Property.

1.8.    Excluded Liabilities . In addition, notwithstanding anything to the contrary set forth in this Agreement, Buyer hereby does not agree to assume, pay, perform, satisfy or discharge any liability or obligation of Seller (the “ Excluded Liabilities ”). The term Excluded Liabilities shall include: (i) any liability or obligation of Seller accruing or arising prior to the Closing for breach of contract, personal injury or property damage (whether based on negligence, breach of warranty, strict liability or any other theory) caused by, arising out of or resulting from, directly or indirectly, any alleged or actual acts or omissions; (ii) any liability or obligation of the Seller accruing or arising prior to the Closing for money borrowed; (iii) any liability or obligation of Seller relating to that certain Promissory Note dated January 29, 1999 from Sycamore Holdings, LLC., a Delaware limited liability company, as payor, to Warren L. Wolfson and Ruth L. Wolfson, payees; and (iv) any and all other liabilities and obligations of every kind of Seller.

2.    Purchase Price .

2.1.    Purchase Price . The total purchase price for the Property (the “ Purchase Price ”) to be paid to Seller by Buyer shall be equal to (A) the sum of (i) One Hundred Fourteen Million Two Hundred Fifty Thousand and no/100 Dollars ($114,250,000.00), and (ii) the Closing Fee of Seven Hundred Fifty Thousand and no/100 ($750,000.00) (“ Prime Fee ”)   due and owing to Prime Care Management LLC (“ Prime ”) pursuant to the terms of that certain letter agreement between ZC Specialty Insurance Company (“ Surety ”) and Prime dated April 26, 2005, which shall be paid by Buyer directly to Prime, less (B) an adjustment for capital improvements and equipment lease buy-outs in the amount of $250,000, to be deducted from the cash portion of the Purchase Price and not from the Prime Fee. The Buyer will pay the Purchase Price at Closing by electronic wire transfer of immediately available funds to the Escrow Agent for disbursement in accordance with this Agreement. 

2.2.    Intentionally deleted .

2.3.    Intentionally deleted. 

2.4.    Allocation of the Purchase Price . The portion of the Purchase Price allocated to each Facility shall be mutually determined by the parties prior to Closing (“ Allocated Purchase Price ”).

3.    Closing . The purchase and sale contemplated herein shall be consummated at the closing (“ Closing ”) as of the date hereof (the “ Closing Date ”). For the purposes of any pro-rations to be made pursuant to this Agreement, the Closing shall be effective as of 12:01 A.M. on the Closing Date.

3.1.    BUYER ACKNOWLEDGEMENT .   BUYER ACKNOWLEDGES AND AGREES THAT THE BUYER IS ACQUIRING THE PROPERTY ON AN “AS-IS WHERE-IS” BASIS, WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED OTHER THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS AGREEMENT) BY SELLER AND IN EACH CASE SUBJECT ONLY TO PERMITTED ENCUMBRANCES. SELLER HAS NOT MADE NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF), ANY USE OF THE PROPERTY, ANY BUSINESS OR BUSINESSES CONDUCTED THEREIN, THE VALUE OR FINANCIAL STATUS OF THE PROPERTY OR THE FACILITIES, AND SELLER SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. BUYER HAS OR PRIOR TO THE DATE HEREOF WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE PROPERTY, AND ANY AND ALL BUSINESSES OR OPERATIONS CONDUCTED THEREIN. IT IS UNDERSTOOD AND AGREED THAT BUYER IS PURCHASING THE PROPERTY AS SPECIFICALLY SET FORTH IN THIS AGREEMENT. SELLER HAS MADE NO REPRESENTATIONS AND WARRANTIES AND SHALL MAKE NO REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ANY OF THE BUSINESSES OR OPERATIONS CONDUCTED IN THE PROPERTY. BUYER REPRESENTS AND WARRANTS TO THE SELLER, WITHOUT ANY LIMITATION WHATSOEVER, THAT IT IS ENTERING INTO THIS AGREEMENT SOLELY ON THE BASIS OF THE RESULTS OF THEIR OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN SELLER ON THE ONE HAND, AND BUYER, ON THE OTHER HAND, ARE TO BE BORNE BY BUYER.

3.2.    Execution of the Transfer Agreement and Assignment Agreement.

A.    On or before the Closing Date, and effective at the Closing, Seller shall execute and deliver, and Tenant and CALM OF CLEVELAND, LLC, an Ohio limited liability company (“ Manager ”), shall execute and deliver the Transfer Agreement.

B.    On or before the Closing Date, and effective at the Closing, Seller shall execute and deliver, and Wind Down Agent shall execute and deliver the Assignment Agreement.

4.    Intentionally omitted .

4.1.    Intentionally omitted.

4.2.    Intentionally omitted.

4.3.    Licensure .

A.    Intentionally omitted.

B.    Tenant has submitted appropriate licensure applications for a change of ownership for the Facilities with the Ohio Department of Health (“ ODH ”), the Ohio Department of Job and Family Services (“ ODJFS ”), or the Ohio Department of Mental Retardation and Developmental Disabilities (“ ODMR/DD ”) whatever the case may be. On December 14, 2005, Tenant provided to Seller and Buyer an affirmative acknowledgement from ODH in a telephone call with a representative of ODH that ODH has approved Tenant or its designees licensure applications and that the Tenant or its designees will be permitted to operate the Facilities from and after the Closing Date. Seller and Buyer understand that the ODN and the ODMR/DD will not issue a license to Tenant until after the Closing. Seller shall permit Tenant to utilize its licenses from the Closing Date until Tenant obtains its own licenses from ODH and the ODMR/DD, provided, that Tenant shall indemnify and hold the Seller harmless from any and all liabilities, costs and expenses of any nature, kind and description arising after the Closing Date, whether from the ownership of the Property and the operation of any business or other activity in the Property, including providing any services to any person. Tenant has named the Seller as an additional insured on any and all insurance policies or other insurance activities covering the Property and any and all operations therein until such time as Tenant shall have received its own licenses from ODH and ODMR/DD.

5.    Seller’s Representations and Warranties . Seller represents and warrants to the Buyer that the following matters are true as of the Closing Date:

5.1.    Ownership . The Seller is the owner, in fee simple, of the Property, subject only to the Permitted Encumbrances.

5.2.    Status . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Indiana. Seller is duly qualified to do business as a foreign corporation in the State of Ohio.

5.3.    Authority . The execution and delivery of this Agreement and all documents to be executed by it pursuant to this Agreement by Seller, and the performance of this Agreement and all documents to be executed by it pursuant to this Agreement by Seller, have been duly authorized by Seller, and this Agreement is binding on Seller and enforceable against Seller in accordance with its terms except as enforceability may be restricted, limited or delayed by applicable bankruptcy or other laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity. The execution of this Agreement and the consummation of the transactions contemplated in this Agreement do not and will not result in a breach of the terms and conditions of, nor constitute a default under or violation of, Seller's articles of incorporation, bylaws or any law, regulation, court order, or any mortgage, note, bond, indenture, agreement, license or other instrument or obligation to which Seller is now a party or by which any of portion of the Property may be bound or affected and that is material to Seller’s business. The Seller represents and warrants to the Buyer that (i) the holder of the debt evidenced by that certain Promissory Note dated as of January 29, 1999 in the original principal amount of $140,000,000 (the “ Defeased Debt ”) has consented to, and approved, Sellers request to permit the defeasance of the Defeased Debt and (ii) as of the Closing (which is also the time at which this Agreement is being delivered by the parties), the Defeased Debt has been defeased as required by the documents evidencing the Defeased Debt such that all liens and security interests encumbering any of the Property and securing the Defeased Debt have been released and discharged.

5.4.    Notices of Violations . Buyer acknowledges that Manager manages the Facilities on Seller’s behalf and that Manager has been represented to Seller as being a wholly-owned affiliate of Tenant. Buyer further acknowledges and agrees that the knowledge of the Manager with respect to any representations and warranties contained in this Agreement or the Transfer Agreement will not be imputed to the Seller. To Seller’s knowledge, Seller has received no written notices, orders, demands or other directives from any governmental authorities pertaining to any uncured material violations of any applicable laws, ordinances, rules, regulations, codes, licenses, permits and authorizations pertaining to the operation of the Facilities other than those, if any, which are identified on Exhibit F , attached hereto.

5.5.    Litigation . To the Seller’s knowledge, and except as disclosed on Exhibit G attached hereto and made a part hereof, there are no pending or threatened, judicial, municipal or administrative proceedings affecting the Property which would inhibit the Seller’s ability to transfer the Property as set forth in this Agreement or in which Seller is a party by reason of Seller’s ownership of the Property or any portion thereof in each case other than those that could reasonably be expected to have a Material Adverse Effect.

5.6.    Operator Licenses and Provider Agreements . To Seller’s knowledge, Seller has been issued, and is in good standing with respect to, any and all permits, licenses, regulatory approvals, approvals, certificates of need, accreditations and comparable authorizations (collectively, “ Operator Licenses ”) from all applicable governmental and quasi-governmental authorities (including, but not limited to,