Exhibit 10.1

ASSET PURCHASE AGREEMENT

BETWEEN

MIDAMERICA SURGERY INSTITUTE PROPERTIES II, LLC,

AS SELLER,

AND

CHP II PARTNERS, LP,

AS PURCHASER

Dated as of October 2, 2017

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TABLE OF CONTENTS

 

1.   DEFINITIONS    1   1.1   Definitions    1 2.   PURCHASE AND SALE, ASSETS
AND LIABILITIES    9   2.1   Purchase and Sale    9   2.2   Description of the
Assets    9   2.3   Excluded Assets    10   2.4   Retained Liabilities    11  
2.5   Assumed Liabilities    11 3.   PURCHASE PRICE    11   3.1   Purchase Price
   11   3.2   Deposit    11   3.3   Payment of Purchase Price    13   3.4  
Allocation of Purchase Price    13 4.   DUE DILIGENCE AND INSPECTION    13   4.1
  Right to Inspect    13   4.2   Matters Relating to Title    16   4.3  
Assignment and Assumption of Facility Contracts, Tenant Leases, and Transferred
Licenses and Permits    17   4.4   Purchaser’s Election Whether or Not to
Proceed    18   4.5   Release and Indemnification    18   4.6   No
Representation or Warranty by Seller    18 5.   REPRESENTATIONS AND WARRANTIES
   18   5.1   Seller’s Representations and Warranties    18   5.2   Purchaser’s
Representations and Warranties    24

 

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6.   COVENANTS      25     6.1   Confidentiality      25     6.2   Assessments
     26     6.3   Conduct of the Operations of the Property      26     6.4  
Tax Contests      27     6.5   Notices and Filings      28     6.6   Further
Assurances      28     6.7   Estoppel Certificates/SNDA      29     6.8  
Exclusivity      30     6.9   Bulk Sales      30     6.10   Employees      30  
  6.11   Post-Closing Audit      30     6.12   Non-Solicitation      31   7.  
CLOSING CONDITIONS      31     7.1   Purchaser’s Closing Conditions      31    
7.2   Failure of Any Purchaser’s Closing Condition      32     7.3   Seller’s
Closing Conditions      32     7.4   Failure of Seller’s Closing Conditions     
33   8.   CLOSING      34     8.1   Closing Date      34     8.2   Closing
Escrow      34     8.3   Seller’s Closing Deliveries      34     8.4  
Purchaser’s Closing Deliveries      36   9.   PRORATIONS AND EXPENSES      37  
  9.1   Closing Statement      37     9.2   Closing and Other Costs, Adjustments
and Prorations      37  

 

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  9.3   Proration Schedule      39     9.4   Re-Prorations      39     9.5  
Cash      39     9.6   Employees      39     9.7   Leasing Costs      39   10.  
DEFAULT AND REMEDIES      40     10.1   Seller’s Default      40     10.2  
Purchaser’s Default      40     10.3   Liquidated Damages      40   11.   RISK
OF LOSS      41     11.1   Casualty      41     11.2   Condemnation      41  
12.   SURVIVAL, INDEMNIFICATION AND RELEASE      42     12.1   Survival      42
    12.2   Indemnification by Seller      42     12.3   Indemnification by
Purchaser      42     12.4   Indemnification Procedure. Notice of
Indemnification Claim      43     12.5   Holdback      44     12.6  
Acknowledgements Concerning Representations and Warranties      44     12.7  
Disclaimers by Seller      44     12.8   Sale “As Is, Where Is”      45     12.9
  Seller Released from Liability      46     12.10   Survival      46   13.  
MISCELLANEOUS PROVISIONS      47     13.1   Notices      47  

 

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  13.2   Time is of the Essence      48     13.3   Assignment      48     13.4  
Successors and Assigns      48     13.5   Third Party Beneficiaries      48    
13.6   Rules of Construction      49     13.7   Severability      49     13.8  
Governing Law, Jurisdiction and Venue      49     13.9   WAIVER OF JURY TRIAL   
  50     13.10   Attorneys’ Fees      50     13.11   Incorporation of Recitals
Exhibits, and Schedules      50     13.12   No Other Agreements      50    
13.13   Further Actions      50     13.14   No Waiver      50     13.15  
Modifications      51     13.16   Counterpart and Electronic Execution      51  
  13.17   Required Disclosures      51     13.18   No Personal Liability      51
    13.19   Good Faith Efforts      51     13.20   Post-Execution Disclosures   
  51     13.21   No Recordation      51     13.22   Discharge of Obligations   
  52  

 

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LISTS OF EXHIBITS AND SCHEDULES

List of Exhibits

 

Exhibit A –    Property Exhibit 4.2.5 –    Assignment and Assumption of Ground
Lease Form Exhibit 8.3.1 –    Seller’s Closing Certificate Form Exhibit 8.3.2 –
   Deed Form Exhibit 8.3.3 –    Bill of Sale Form Exhibit 8.3.4 –    Assignment
and Assumption of Tenant Leases Form Exhibit 8.3.5 –    Assignment and
Assumption of Facility Contracts and Licenses and Permits Form Exhibit 8.3.6 –
   Assignment and Assumption of Intellectual Property Form Exhibit 8.3.13 –   
Holdback Escrow Agreement Form Exhibit 8.4.3 –    Purchaser’s Closing
Certificate Form

List of Schedules

 

Schedule 2.2.4 –    Personal Property Schedule 2.2.5 –    Tenant Leases Schedule
2.2.7 –    Facility Contracts Schedule 5.1.6 –    Litigation

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of October 2, 2017
(the “Effective Date”), by and between MIDAMERICA SURGERY INSTITUTE PROPERTIES
II, LLC, a Kansas limited liability company (“Seller”), and CHP II PARTNERS, LP,
a Delaware limited partnership ( “Purchaser”) (Seller and Purchaser are at times
hereinafter referred to individually as a “Party” and collectively as the
“Parties”).

R E C I T A L S

A. Seller is the owner of tenant’s ground lease interest in and to certain real
property improved as a medical office building containing approximately 38,496
square feet known as “Overland Park Medical Office Building”, located at 5525
West 119th Street, Overland Park, KS 66209 (the “MOB”).

B. Purchaser desires to purchase, and Seller desires to sell the Assets (as
defined herein) on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the provisions contained in this Agreement,
and intending to be legally bound hereby, the Parties agree as follows:

1. DEFINITIONS

1.1 Definitions. In addition to the terms defined in the body of this Agreement,
the following terms will have the following meanings in this Agreement:

“Affiliate” has the following meaning: two entities are “Affiliates” if

 

  (a) one of the entities is a Subsidiary of the other entity;

 

  (b) both of the entities are Subsidiaries of the same entity; or

 

  (c) both of the entities are Controlled by the same Person.

“Agreement” has the meaning set forth in the first paragraph of this Agreement.

“Applicable Law” means (i) all federal, state, and local statutes, laws, common
law, rules, regulations, ordinances, codes, guidances, policies, or other legal
requirements of any Governmental Authority, stock exchange, board of fire
underwriters and similar quasi-governmental authority, and (ii) any judgment,
injunction, restrictive covenant, declaration, order or other similar
requirement of any court or other adjudicatory authority of competent
jurisdiction in effect at the time in question and in each case to the extent
the Person or property in question is subject to the same.

“Assets” has the meaning set forth in Section 2.2 of this Agreement.

“Assumed Liabilities” has the meaning set forth in Section 2.5 of this
Agreement.

“Bankruptcy Code” has the meaning set forth in Section 5.1.14 of this Agreement.

 

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“Books and Records” has the meaning set forth in Section 2.2.12 of this
Agreement.

“Business Day” means any day other than a Saturday, Sunday or any United States
federal legal holiday.

“Casualty” has the meaning set forth in Section 11.1 of this Agreement.

“Closing” has the meaning set forth in Section 8.1 of this Agreement.

“Closing Date” means the date on which the Closing takes place.

“Closing Escrow” has the meaning set forth in Section 8.1 of this Agreement.

“Closing Escrow Agreement” has the meaning set forth in Section 8.2 of this
Agreement.

“Closing Statement” has the meaning set forth in Section 9.1 of this Agreement.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended from time to time.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any regulations, rulings and guidance issued by the Internal Revenue
Service.

“Condemnation” has the meaning set forth in Section 11.2 of this Agreement.

“Control” means:

(a) the right to exercise, directly or indirectly, a majority of the votes which
may be voted at a meeting of (i) the shareholders of the corporation, in the
case of a corporation, (ii) the shareholders of the general partner, in the case
of a limited partnership, or (iii) the equity holders or other voting
participants of a Person that is not a corporation or limited partnership; or

(b) the right to elect or appoint, directly or indirectly, a majority of (i) the
directors of the corporation, in the case of a corporation, (ii) the directors
of the general partner, in the case of a limited partnership, or (iii) a
majority of the Persons who have the right to manage or supervise the management
of the affairs and business of a Person that is not a corporation or limited
partnership,

(c) and “Controlled” has a corresponding meaning.

“Declaration” means that certain Declaration of Covenants, Restrictions and
Easements dated February 28, 2005 and recorded March 2, 2005 in Official Records
Book 200503, Page 937, Register of Deeds, Johnson County, Kansas, as amended by
that certain First Amendment to Declaration of Covenants, Restrictions and
Easements effectively dated February 28, 2005 and recorded July 20, 2005 in
Official Records Book 200507, Page 8859, Register of Deeds, Johnson County,
Kansas.

“Deed” means the deed to be delivered by Seller to Purchaser pursuant to
Section 8.3.2.

 

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“Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Effective Date” has the meaning set forth in the opening paragraph of this
Agreement.

“Employees” means at the time in question all Persons employed full-time or
part-time by or for the benefit of Seller or any property manager in connection
with the Property, if any.

“Environmental Claims” means all claims for reimbursement, remediation,
abatement, removal, clean up, contribution, personal injury, property damage or
damage to natural resources made by any Governmental Authority or other Person
arising from or in connection with (i) the presence or actual or potential
spill, leak, emission, discharge or release of any Hazardous Materials over, on,
in, under or from the Property, or any portion thereof, or (ii) any violation of
any Environmental Laws with respect to the Assets.

“Environmental Laws” means all Applicable Law relating to industrial hygiene or
to environmental or unsafe conditions or to human health including, but not
limited to, those relating to the generation, manufacture, storage, handling,
transportation, disposal, release, emission or discharge of Hazardous Materials,
including those in connection with the construction, fuel supply, power
generation and transmission, waste disposal or any other operations or processes
relating to the Assets, including, without limitation, the Property, or any
portion thereof, and those relating to the atmosphere, soil, surface and ground
water, wetlands, stream sediments and vegetation on, under, in or about the
Assets, including, without limitation, any portion of the Property.

“Environmental Liabilities” means all Liabilities under any Environmental Laws
arising from or in connection with the Assets, including, without limitation,
any obligations to manage, control, contain, remove, remedy, respond to, clean
up or abate any actual or potential presence, spill, leak, emission, discharge
or release of any Hazardous Materials, pollution, contamination or radiation
into any water, soil, sediment, air, Improvements or other environmental media.

“ERISA” means the Employee Retirement Income Security Act, as amended from time
to time and any regulations, ratings and guidance issued pursuant thereto.

“Escrow Agent” means Title Company, acting in its capacity as escrow agent
pursuant to the terms hereof, or such other escrow agent as is mutually
acceptable to Seller and Purchaser.

“Exception Cure Period” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Excluded Assets” has the meaning set forth in Section 2.3 of this Agreement.

“Facility Contracts” has the meaning set forth in Section 2.2.7 of this
Agreement.

“FDIC” has the meaning set forth in Section 3.2.2 of this Agreement.

“First Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Fixtures” has the meaning set forth in Section 2.2.3 of this Agreement.

 

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“Ground Lease” means that certain Ground Lease dated February 28, 2005 between
Ground Lessor, as lessor, and Seller, as lessee, as evidenced by that certain
Memorandum of Lease dated February 28, 2005 and recorded March 2, 2005 in
Official Records Book 200503, Page 938, Register of Deeds, Johnson County,
Kansas, as amended by that certain First Amendment to Ground Lease to Correct
Scrivener’s Error dated effective as of February 28, 2005, as further amended by
that certain Second Amendment to Ground Lease dated October 21, 2005.

“Ground Lessor” means Central Tennessee Hospital Corporation, a Tennessee
corporation.

“Governmental Authority” or “Governmental Authorities” means any federal, state
or local government or other political subdivision thereof, including, without
limitation, any Person exercising executive, legislative, judicial, regulatory
or administrative governmental powers or functions, in each case to the extent
the same has jurisdiction over the Person or property in question.

“Hazardous Materials” means petroleum and petroleum products, flammable
explosives, radioactive materials (excluding radioactive materials in smoke
detectors), polychlorinated biphenyls, radon, lead/asbestos in any form,
hazardous waste, toxic or hazardous substances, molds, microbiological agents,
and other related materials whether in the form of a chemical, biologic,
element, natural agent, compound, solution, mixture or otherwise, all to the
extent identified, managed, regulated or governed by Environmental Law,
including, but not limited to, those materials defined under Environmental Laws
as “hazardous substances,” “extremely hazardous substances,” “hazardous
chemicals,” “hazardous materials,” “toxic substances,” “solid waste,” “toxic
chemicals,” “air pollutants,” “toxic pollutants,” “hazardous wastes,” “extremely
hazardous waste,” or “restricted hazardous waste”.

“Holdback” has the meaning set forth in Section 12.5 of this Agreement.

“Holdback Escrow Agreement” has the meaning set forth in Section 8.3.13 of this
Agreement.

“Improvements” means all buildings, structures, and improvements located on or
affixed to the Property, including all fixtures which constitute real property
under Applicable Law.

“Indemnification Loss” means, with respect to any Indemnitee, any Liability,
including, without limitation, reasonable attorneys’ fees and expenses and court
costs, incurred by such Indemnitee as a result of the act, omission or
occurrence in question.

“Indemnification Claim” has the meaning set forth in Section 12.4 of this
Agreement.

“Indemnitee” has the meaning set forth in Section 12.4 of this Agreement.

“Indemnitor” has the meaning set forth in Section 12.4 of this Agreement.

 

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“Inspection Period” means the period beginning on the Effective Date of this
Agreement and ending at 5:00 p.m., Eastern Standard Time, on the thirtieth
(30th) day following such Effective Date.

“Inspections” means any inspections, examinations, tests, investigations, or
studies of the Assets, including, without limitation, the Property conducted by
or on behalf of Purchaser (or any Affiliate thereof).

“Intangible Assets” has the meaning set forth in Section 2.2.11 of this
Agreement.

“Intellectual Property” means all works of authorship, including without
limitation, all literary works, pictorial, graphic and sculptural works,
architectural works, software, works of visual art, and any other work that may
be the subject matter of copyright protection and all worldwide registrations
thereof; any trademarks, service marks, brand names, trade dress, trade names,
designs and any other word, symbol, device, product configuration, slogan or any
combination thereof used to distinguish or identify goods or services that may
be the subject matter of trademark protection, including all worldwide
applications and registrations therefore and associated goodwill; any patents,
invention disclosures or inventions, including all processes, machines,
manufactures and compositions of matter, designs and any other invention that
may be the subject matter of patent protection, and all worldwide statutory or
other legal protection obtained or obtainable therein, including without
limitation all published and granted patents and pending applications and
provisionals, reissues, divisionals, renewals, extensions, continuations, and
continuations-in-part, design patents and industrial design registrations; all
domain names, URLs, websites, and all data, content, “look and feel”, operating
and underlying code or software of all websites; all trade secrets, proprietary
information, data, and knowledge and experience of a technical, commercial or
administrative nature, including all proprietary information, know-how,
information processes, operating, maintenance and other manuals, data and
databases, computer programs, including all documentation, design
specifications, and flowcharts, operational and other plans, schematics and
drawings, customer data and lists, advertising, marketing and product concepts
and campaigns and other valuable or proprietary information or data; and all
worldwide statutory protection obtained or obtainable thereon on all of the
preceding; all rights to enforce, enjoin or sue, any claims, judgments, causes
of action or other legal and equitable rights and remedies arising out of or
related to any infringement, misappropriation or violation of any of the
foregoing; and all right, title and interest to claim royalties, residuals,
damages and other remuneration for use of any of the foregoing rights.

“Leasehold Interests” mean the tenant interests under the Ground Lease.

“Liability” means any liability, obligation, damage, loss, cost or expense of
any kind or nature whatsoever, whether accrued or unaccrued, and “Liabilities”
has a corresponding meaning.

“Licenses and Permits” has the meaning set forth in Section 4.1.1 of this
Agreement.

“MOB” has the meaning set forth in Recital A of this Agreement.

“New Survey Defect” has the meaning set forth in Section 4.2.2 of this
Agreement.

 

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“New Title Exception” has the meaning set forth in Section 4.2.2 of this
Agreement.

“Ordinary Course of Business” means the ordinary course of business consistent
with Seller’s past custom and practice for the applicable business, taking into
account the seasonality of the business and such other commercially reasonable
facts and circumstances in existence from time to time.

“Party” or “Parties” has the meaning set forth in the first paragraph of this
Agreement.

“Permitted Exception” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Person” means any natural person, firm, corporation, general or limited
partnership, limited liability company, association, joint venture, trust,
estate, Governmental Authority or other legal entity, in each case whether in
its own or a representative capacity.

“Personal Property” has the meaning set forth in Section 2.2.2 of this
Agreement.

“Plans and Specifications” has the meaning set forth in Section 2.2.9 of this
Agreement.

“Property” means that certain real property more particularly described as such
on Exhibit A attached hereto.

“Proration Date” has the meaning set forth in Section 9.2.4 of this Agreement.

“Proration Schedule” has the meaning set forth in Section 9.2.4 of this
Agreement.

“Prorations” has the meaning set forth in Section 9.2.4 of this Agreement.

“Purchase Price” has the meaning set forth in Section 3.1 of this Agreement.

“Purchaser” has the meaning set forth in the opening paragraph of this
Agreement.

“Purchaser’s Closing Condition Failure” has the meaning set forth in Section 7.2
of this Agreement.

“Purchaser’s Closing Conditions” has the meaning set forth in Section 7.1 of
this Agreement.

“Purchaser’s Closing Deliveries” has the meaning set forth in Section 8.4 of
this Agreement.

“Purchaser’s Default” has the meaning set forth in Section 10.2 of this
Agreement.

“Purchaser’s Documents” has the meaning set forth in Section 5.2.2 of this
Agreement.

“Purchaser’s Due Diligence Reports” means all studies, reports and assessments
prepared by any Person for or on behalf of Purchaser and at Purchaser’s
direction (other than any internal studies, reports and assessments prepared by
any of Purchaser’s employees, attorneys or accountants) in connection with the
Inspections.

 

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“Purchaser’s Indemnitees” means Purchaser and its Affiliates, and each of their
respective shareholders, members, partners, trustees, beneficiaries, directors,
officers and employees, and the successors, assigns, legal representatives,
heirs and devisees of each of the foregoing.

“Purchaser’s Inspectors” means any Person that conducted any Inspections for or
on behalf of Purchaser or any Affiliate thereof.

“Retained Liabilities” has the meaning set forth in Section 2.4 of this
Agreement.

“ROFR” has the meaning set forth in Section 5.1.12 of this Agreement.

“Second Deposit” has the meaning set forth in Section 3.2.1 of this Agreement.

“Seller” and “Seller” have the meanings set forth in the opening paragraph of
this Agreement.

“Seller’s Certificate” means that certain document, the form of which is
attached hereto as Exhibit 8.3.1, to be delivered by Seller at Closing.

“Seller’s Closing Condition Failure” has the meaning set forth in Section 7.4 of
this Agreement.

“Seller’s Closing Conditions” has the meaning set forth in Section 7.3 of this
Agreement.

“Seller’s Closing Deliveries” has the meaning set forth in Section 8.3 of this
Agreement.

“Seller’s Default” has the meaning set forth in Section 10.1 of this Agreement.

“Seller’s Documents” has the meaning set forth in Section 5.1.2 of this
Agreement.

“Seller’s Due Diligence Materials” means all documents and materials provided by
Seller to Purchaser, pursuant to this Agreement or otherwise, together with any
copies or reproductions of such documents or materials.

“Seller’s Indemnitees” means Seller and its Affiliates, and each of their
respective shareholders, members, partners, trustees, beneficiaries, directors,
officers and employees, and the successors, assigns, legal representatives,
heirs and devisees of each of the foregoing.

“Seller’s Knowledge” means the actual knowledge of Stephen Richards after
reasonable inquiry with Seller’s property manager for the Property; provided
that so qualifying Seller’s knowledge shall in no event give rise to any
personal liability on the part of Stephen Richards, or any other officer or
employee of Seller, on account of any breach of any representation or warranty
made by Seller herein.

“SNDAs” has the meaning set forth in Section 6.7 of this Agreement.

“Subsidiary” means, in respect of any Person:

(d) any corporation of which more than 50% of the outstanding capital stock
having ordinary voting power to elect the majority of the board of directors of
such corporation is at the time directly or indirectly owned by (i) such Person,
(ii) such Person and one or more subsidiaries of such Person, or (iii) one or
more subsidiaries of such Person; or

 

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(e) any limited or general partnership, joint venture, limited liability company
or other entity as to which (i) such Person, (ii) such Person and one or more of
its subsidiaries, or (iii) one or more subsidiaries of such Person owns, more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies, or the power to elect the general
partner or managing partner (or equivalent thereof), of such limited or general
partnership, joint venture, limited liability company or other entity, as the
case may be.

“Survey Defects” has the meaning set forth in Section 4.2.1 of this Agreement.

“Survey” means the survey of the Property, or any portion thereof, to be
obtained by Purchaser, at Purchaser’s option, during the Inspection Period.

“Taxes” means any federal, state, local or foreign, real property, personal
property, sales, use, room, occupancy, ad valorem or similar taxes, assessments,
levies, charges or fees imposed by any Governmental Authority on Seller with
respect to any of the Assets, including, without limitation, any interest,
penalty or fine with respect thereto, but expressly excluding any (i) federal,
state, local or foreign income, capital gain, gross receipts, capital stock,
franchise, profits, estate, gift or generation skipping tax, or (ii) transfer,
documentary stamp, recording or similar tax, levy, charge or fee incurred with
respect to the transactions described in this Agreement.

“Tenant Leases” has the meaning set forth in Section 2.2.5 of this Agreement.

“Third-Party Claim” means, with respect to the Person in question, any claim,
demand, lawsuit, arbitration or other legal or administrative action or
proceeding against the Person in question by any other Person which is not an
Affiliate of the Person in question.

“Third-Party Estoppels” has the meaning set forth in Section 6.7 of this
Agreement.

“Title Commitment” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Company” means First American Title Insurance Company, National
Commercial Services Division, whose address is 420 S. Orange Avenue, Suite 250,
Orlando, Florida 32801, Attention: Michael J. Moore, Esquire, Vice President and
Counsel – NCS Florida State Manager.

“Title Exceptions” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Notice” has the meaning set forth in Section 4.2.1 of this Agreement.

“Title Policy” has the meaning set forth in Section 4.2.4 of this Agreement.

 

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“Transferred Licenses and Permits” means Seller’s right, title and interests, if
any, in any licenses and permits which relate to the Leasehold Interest and/or
the Improvements that are assignable by Seller and that Buyer requests in
writing to be assigned to it at the Closing.

“Unpermitted Exceptions” has the meaning set forth in Section 4.2.1 of this
Agreement.

“Warranties” has the meaning set forth in Section 2.2.10 of this Agreement.

“WARN Act” means the Worker’s Adjustment and Retraining Notification Act, 29
U.S.C. §2101 et seq., and any similar state and local laws, as amended from time
to time, and any regulations, rules and guidance issued pursuant thereto.

2. PURCHASE AND SALE, ASSETS AND LIABILITIES

2.1 Purchase and Sale. Seller agrees to sell the Assets to Purchaser and
Purchaser agrees to buy the Assets from Seller, all in accordance with the terms
and conditions set forth in this Agreement.

2.2 Description of the Assets. In this Agreement, the term “Assets” means all of
the following, but expressly excluding the Excluded Assets:

2.2.1 Leasehold Interests. The Leasehold Interests.

2.2.2 Improvements. All Improvements.

2.2.3 Fixtures. All of Seller’s right, title and interest to any fixtures
located on, attached to and/or forming a part of the Property, other than those
which constitute the Improvements (the “Fixtures”)

2.2.4 Personal Property. All of Seller’s tangible personal property located at
the Property, including, without limitation, any and all furniture, equipment,
machinery, tools, and appliances, located at or used in connection with the
Property, a complete listing of which is attached as Schedule 2.2.4 (the
“Personal Property”).

2.2.5 Tenant Leases. All of Seller’s right, title and interest in and to all
leases, subleases, licenses, concessions and similar agreements granting to any
other Person the right to use or occupy any portion of the Property, a complete
listing of which is attached hereto as Schedule 2.2.5 (collectively, the “Tenant
Leases”) together with all security deposits held by Seller thereunder.

2.2.6 Intellectual Property. All of Seller’s right, title and interest (if any)
in and to any Intellectual Property related to the Property, including (if any)
all trade names and trademarks associated with the Property and Improvements.

2.2.7 Facility Contracts. To the extent assignable or transferable, all of
Seller’s right, title and interest in and to any contracts, including, but not
limited to, maintenance, service and supply contracts, and all other similar
agreements for goods or services which are applicable to the operation of the
Property (the “Facility Contracts”), which Facility Contracts are set forth in
Schedule 2.2.7, together with all deposits made or held by Seller thereunder.

 

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2.2.8 Transferred Licenses and Permits. All of Seller’s right, title and
interest in and to the Transferred Licenses and Permits together with any
deposits made by Seller thereunder.

2.2.9 Plans and Specifications. To the extent assignable or transferable, all of
Seller’s right, title and interest in and to any plans and specifications, blue
prints, architectural plans, and engineering diagrams which specifically relate
to the Property (the “Plans and Specifications”).

2.2.10 Warranties. To the extent assignable or transferable, all warranties and
guaranties held by Seller with respect to any of the Assets (the “Warranties”).

2.2.11 Intangible Assets. To the extent assignable or transferable, all of
Seller’s right, title and interest in and to any and all drawings, surveys,
environmental and soil reports, telephone and facsimile numbers listing in
directories, vendor and supplier lists and files, credit records, security codes
and any unexpired guaranties or warranties (collectively, the “Intangible
Assets”).

2.2.12 Books and Records. Copies of all of Seller’s books and records which
relate to the use, ownership or operation of any of the Assets, but expressly
excluding all documents and other materials which are legally privileged or
constitute attorney work product, any purchase and escrow agreements and
correspondence pertaining to Seller’s acquisition of the Property, market
studies, appraisals, any documents pertaining to any potential acquisition of
the Property by any past or prospective purchasers, and any third Person
purchase inquiries (the “Books and Records”).

2.2.13 Other Assets. All other assets, rights, and interest of Seller in and to
the Property, not constituting Excluded Assets.

2.3 Excluded Assets. Notwithstanding anything to the contrary in Section 2.2,
the following property, assets, rights and interests (the “Excluded Assets”) are
excluded from the Assets:

2.3.1 Third-Party Assets. Any fixtures, personal property or intellectual
property owned by tenants under Tenant Leases or Seller’s property manager.

2.3.2 Accounts Receivable. Seller’s accounts receivable and rents receivable
accruing prior to the Closing Date.

2.3.3 Organizational Documents. All Organizational Documents, minutes books,
stock registers and such other books and records of Sellers as pertain to the
ownership, organization or existence of Sellers.

2.3.4 Cash. All cash on hand and cash equivalents, including bank accounts,
money market funds and temporary cash investments.

 

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2.4 Retained Liabilities. The parties acknowledge that Purchaser is acquiring
the Assets only and, as such, Purchaser shall not have any obligations or
liabilities concerning or in any way relating to, arising or accruing from the
ownership or operation of the Property prior to Closing, unless the same are
explicitly assumed pursuant to the terms of this Agreement (“Retained
Liabilities”). The rights and obligations of the Parties under this Section 2.4
shall survive the Closing.

2.5 Assumed Liabilities. At Closing, Purchaser shall assume (i) all Liabilities
under the Ground Lease, Tenant Leases, Facility Contracts and Transferred
Licenses and Permits that are not Retained Liabilities and which arise or accrue
on or after the Closing Date, (ii) the payment of Taxes and assessments which
arise or accrue on or after the Closing Date, and (iii) any and all obligations
or liabilities concerning or in any way relating to, arising or accruing from
the ownership or operation of the Property or Assets arising on or after the
Closing or as a result of Purchaser’s acts or omissions (“Assumed Liabilities”).
The rights and obligations of the Parties under this Section 2.5 shall survive
Closing.

3. PURCHASE PRICE

3.1 Purchase Price. The purchase price for the Assets is Fourteen Million and
No/100 Dollars ($14,000,000.00) (the “Purchase Price”), which shall be adjusted
at Closing as expressly set forth in this Agreement.

3.2 Deposit.

3.2.1 Deposit. Within three (3) Business Days after the Effective Date,
Purchaser shall deliver to Escrow Agent the sum of TWO HUNDRED FIFTY THOUSAND
AND NO/100 Dollars ($250,000.00), which shall be held by the Escrow Agent as a
deposit under this Agreement (the “First Deposit”). Unless this Agreement is
terminated prior to the expiration of the Inspection Period, whereupon the First
Deposit shall be promptly returned by Escrow Agent to the Purchaser, Purchaser
shall, within three (3) Business Days following the expiration of the Inspection
Period, deposit with the Title Company an additional sum equal to TWO HUNDRED
FIFTY THOUSAND AND NO/100 Dollars ($250,000.00) (the “Second Deposit”) in good
funds either by certified bank or cashier’s check or by federal wire transfer.
The First Deposit and the Second Deposit (together totaling $500,000.00),
together with any interest earned thereon as provided herein, shall hereinafter
be referred to collectively as the “Deposit”.

3.2.2 Maintenance of Deposit. The Deposit shall be held by the Escrow Agent in
an interest-bearing account, under Purchaser’s taxpayer identification number of
36-4813948 pursuant to the terms and conditions of this Agreement with such
changes thereto as may be agreed to by Seller and Purchaser pursuant thereto.
The Deposit shall be fully refunded to Purchaser upon termination of this
Agreement by Purchaser prior to the expiration of the Inspection Period and
otherwise if this Agreement is terminated by Purchaser in accordance with any
right of Purchaser to do so under this Agreement. Otherwise, it shall be
non-refundable to Purchaser except as expressly provided in this Agreement. If
the Deposit is to be paid to Seller under the provisions of this Agreement,
Escrow Agent shall pay the Deposit to Seller in the manner and on the terms and

 

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conditions set forth herein. Escrow Agent shall not be responsible for any
penalties, or loss of principal or interest or any delays in the withdrawal of
the Deposit which may be imposed by the depository as a result of the making or
redeeming of the investment pursuant to the instructions of Purchaser and
Seller, nor shall Escrow Agent be liable for any loss or impairments of funds
while those funds are in the course of collection or while those funds are on
deposit in a financial institution if such a loss or impairment results from the
failure, insolvency or suspension of such financial institution. Escrow Agent is
not responsible for levies by taxing authorities based on the taxpayer
identification number used to establish the Account. Purchaser and Seller are
aware of the Federal Deposit Insurance Corporation (“FDIC”) coverage limits for
each individual depositor. Further, Purchaser and Seller understand that Escrow
Agent assumes no responsibility for any loss that occurs due to any individual
depositor’s account balance exceeding the amount, if any, insured by the FDIC,
and Purchaser and Seller will not hold Escrow Agent liable for any such loss.
Purchaser and Seller further understand that certain banking instruments are not
covered at all by FDIC insurance. The Deposit held by Escrow Agent shall be
subject to the provisions of Chapter 717, Florida Statutes.

3.2.3 Disbursement of Deposit to Seller. At Closing, Purchaser shall cause the
Escrow Agent to disburse the Deposit to Seller, and Purchaser shall receive a
credit against the Purchase Price in the amount of the Deposit.

3.2.4 Refund of Deposits to Purchaser. If this Agreement is terminated and
Purchaser is entitled to a refund of the Deposit under any express provision of
this Agreement, then the Escrow Agent shall disburse the Deposit to Purchaser no
later than two (2) Business Days after termination.

3.2.5 Forfeiture of Deposit. If Purchaser’s Default occurs and remains uncured
beyond any applicable cure period, upon the expiration of such cure period,
Purchaser shall forfeit the Deposit and Escrow Agent shall disburse the Deposit
to Seller no later than two (2) Business Days after the expiration of such cure
period. In such case, pursuant to Section 10.2, the Deposit shall be Seller’s
sole and exclusive remedy except as otherwise set forth in this Agreement, and
the Parties shall have no further rights or obligations under this Agreement,
except those which expressly survive such termination.

3.2.6 Disagreements Regarding Deposit. If Escrow Agent shall be unable to
determine at any time to whom the Deposit should be paid or if a dispute should
develop between Seller and Purchaser concerning the disposition of the Deposit,
then in any such event, Escrow Agent shall pay the Deposit in accordance with
the joint (or consistent) written instructions of Seller and Purchaser. In the
event that such joint (or consistent) written instructions shall not be received
by Escrow Agent within ten (10) days after Escrow Agent shall have served
written requests for such joint (or consistent) written instructions upon Seller
and Purchaser, Escrow Agent shall have the right to pay all of the Deposit into
a court of competent jurisdiction in Orlando, Florida, and to interplead Seller
and Purchaser in respect thereof; and, thereafter, Escrow Agent shall be
discharged of any further or continuing obligations in connection with the
Deposit.

 

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3.2.7 Escrow Agent’s Costs and Expenses. If costs and expenses (including
attorneys’ fees) are incurred by Escrow Agent because of litigation or any
dispute between Seller and Purchaser arising out of the holding of the Deposit,
the non-prevailing party in such dispute shall reimburse Escrow Agent for
reasonable costs and expenses incurred. Seller and Purchaser hereby agree and
acknowledge that Escrow Agent assumes no Liability in connection with the
holding or investment of the Deposit pursuant hereto, except for the negligence
or willful misconduct of Escrow Agent and its employees and agents. Escrow Agent
shall not be responsible for the validity, correctness or genuineness of any
document or notice referred to herein; and, in the event of any dispute under
this Agreement relating to the disposition of the Deposit, Escrow Agent may seek
advice from its own counsel and, provided that Escrow Agent tenders the Deposit
into a court of competent jurisdiction in Orlando, Florida, Escrow Agent shall
be fully protected in any action taken in good faith in accordance with the
opinion of Escrow Agent’s counsel. Seller and Purchaser hereby agree and
acknowledge that the Escrow Agent assumes no Liability in connection with the
holding or investment of the Deposit pursuant hereto, and Seller and Purchaser
hereby agree to indemnify and hold Escrow Agent harmless from and an all
liability, costs, damages, including court costs and attorney’s fees, which
Escrow Agent may in good faith sustain or incur in connection with this
Agreement, except for the gross negligence or willful misconduct of Escrow Agent
and its employees and agents.

3.3 Payment of Purchase Price.

3.3.1 Payment at Closing. At Closing, Purchaser shall pay to Seller (as directed
by Seller) by wire transfer an amount equal to the Purchase Price (as adjusted
pursuant hereto), less the Deposit.

3.3.2 Method of Payment. All amounts to be paid by Purchaser to Seller pursuant
to this Agreement shall be paid by wire transfer of immediately available U.S.
federal funds.

3.4 Allocation of Purchase Price. The Parties agree that the Purchase Price
shall be allocated between the Property and the Personal Property for federal,
state and local tax purposes as may be mutually determined by Purchaser and
Seller in their reasonable discretion prior to the expiration of the Inspection
Period.

4. DUE DILIGENCE AND INSPECTION

4.1 Right to Inspect.

4.1.1 At all times prior to Closing, Purchaser and Purchaser’s Inspectors shall,
subject to at least one (1) business day’s prior notice to Seller’s property
manager, Bonne J. Piccirilli, (Telephone: 816-412-8420, E-Mail:
bpiccirilli@blockllc.com) (except that for any invasive testing permitted herein
or any requested tenant interview at least two (2) business day’s prior notice
shall be provided), have the right to enter upon the Property at reasonable
times and to perform, at Purchaser’s expense, such Inspections of and concerning
the Assets, as Purchaser may reasonably deem appropriate. Upon one (1)

 

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Business Days’ notice, Purchaser shall have the right to meet and interview
Persons involved in the management and operation of the Property to discuss the
business operations, including the revenues, expenses, operation and physical
condition of the Assets, and shall have the one-time right to meet and interview
tenant representatives (provided, however, Purchaser shall have the right to
conduct follow-ups with tenants if reasonably required by Purchaser). In
addition, Purchaser shall have the right, but not the obligation, to contact
such Governmental Authorities as it may elect in connection with the
transactions contemplated by this Agreement. The Inspections shall not
unreasonably interfere with the operation of the applicable Property or the
tenant’s operations thereon. Purchaser shall allow Seller the opportunity to
participate in any communication with a tenant or Governmental Authority and to
be present for any physical Inspections of the Assets, but such right to have a
Seller representative present shall not cause a material delay in any such
communications or Inspections. Within three (3) Business Days following the
Effective Date, to the extent in Seller’s possession or reasonable control,
Seller shall furnish to Purchaser, or make available to Purchaser via an
electronic “war room,” all information with respect to the Assets, each of which
will be, to Seller’s Knowledge (except for any documents delivered by Seller
pursuant to Sections 5.1.9, 5.1.10, 5.1.13, and 5.1.23, which are being
furnished by Seller without a “Seller’s Knowledge” qualifier), a true, correct
and complete copy of the document it purports to be, including but not limited
to the following (collectively, “Seller Disclosure Materials”):

(i) All Warranties which are still in effect to which Seller may be entitled to
make a claim;

(ii) All licenses and permits relating to Seller’s ownership of the Leasehold
Interests and Improvements (the “Licenses and Permits”);

(iii) The most recent real estate tax statements with respect to the Property,
if any;

(iv) The surveys, engineering and architectural plans, drawings and
specifications relating to the Property, as applicable, including, without
limitation, the Plans and Specifications;

(v) All contracts affecting the Assets in any material respect;

(vi) Copies of the Books and Records;

(vii) The Ground Lease and all Tenant Leases and all agreements for real estate
commissions, brokerage fees, finder’s fees or other compensation payable in
connection therewith which will be binding on Purchaser after the Closing;

(viii) Three (3) years of certified financial statements for the MOB; and,

 

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(ix) All other information and documentation that Purchaser may reasonably
request in writing regarding the Assets so long as such information and
documentation is in Seller’s possession or control, and is not proprietary.

From the Effective Date through Closing, Seller shall reasonably cooperate with
Purchase, at Purchaser’s expense, in the conduct of its Inspections of the
Assets and shall answer any reasonable questions of Purchaser and provide
updates of the rent rolls and other financial information provided as set forth
above or otherwise in the Agreement as the same are produced or at the request
of Purchaser and in any event five (5) Business Days prior to Closing. Purchaser
and Purchaser’s Inspectors shall take all reasonable precautions to not
interfere with Seller’s operations of the Assets, make reasonable commercial
efforts to minimize the impact on the Property of any Inspections and coordinate
with Seller regarding communications with Seller’s employees and Governmental
Authorities relating to the Inspections. With respect to physical Inspections of
the Assets to be conducted by Purchaser (e.g., environmental Inspections),
Purchaser shall retain professional third-party consultants to complete such
Inspections and shall require such third-party consultants to maintain liability
insurance coverage for their activities that is consistent with liability
insurance coverage customarily maintained by similar professional third-party
consultants, provided that in all events such liability insurance shall be in an
amount at least equal to One Million Dollars ($1,000,000) combined single limit.
Upon Seller’s request, Purchaser shall provide evidence of such insurance
coverage. Such insurance shall (a) name Seller and Ground Lessor as additional
insureds, (b) contain a provision that the insurance provided thereunder shall
be primary and noncontributing with any other insurance available to Seller, and
(c) otherwise be in a form and substance reasonably satisfactory to the Seller
(which approval Seller agrees to provide within one (1) business day following
receipt of evidence of insurance and, if Seller fails to respond within one
(1) business day, such failure to respond shall be deemed approval by Seller).
Notwithstanding the foregoing, Seller agrees to reasonably co-operate with
Purchaser if, after commercially reasonable efforts, Purchaser is unable to
cause a third-party consultant to strictly comply with the insurance
requirements set forth herein so long as such third-party consultant otherwise
provides insurance which is generally consistent with insurance coverage
customarily maintained by similar professional third-party consultants. Such
third-party consultants will be notified of and advised to comply with the
confidentiality provisions set forth in this Agreement. If Purchaser or
Purchaser’s Inspectors intend to undertake or perform any “Phase II”
environmental studies or other invasive or destructive testing, sampling or
studies, Purchaser shall first obtain Seller’s written approval, such approval
not to be unreasonably withheld, conditioned or delayed. Purchaser shall,
immediately after any entry, inspection or test, restore the Assets, in all
material respects and at its sole cost, to the condition which existed
immediately prior thereto (to the extent practicable), including replacing
paving and landscaping. If a lien is placed against the Property as a result of
Purchaser’s inspections, Purchaser shall use commercially reasonable efforts to
pay or cause to be removed such liens within ten (10) days of written notice
thereof, but in any event such lien shall be paid or caused to be removed by
Purchaser or Inspecting Parties within thirty (30) days of written notice
thereof. The foregoing restoration obligations of Purchaser shall survive the
Closing or earlier termination of this Agreement. In the event this Agreement is
terminated by Purchaser pursuant to the terms hereof and, at the time of
termination, any lien placed against the Property as a result of Purchaser’s
inspections remains in place, Escrow Agent may retain such portion of the
Deposit as is required to satisfy such lien until such time as the lien is
released. In the event the transaction contemplated by this

 

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Agreement is not consummated, Purchaser shall return to Seller any and all due
diligence materials provided by Seller to Purchaser hereunder. All Inspections
shall be performed in accordance with all applicable laws. Subject to any
limitations imposed by any third party consultant, Purchaser shall promptly,
following Seller’s written request, provide Seller with full and complete copies
of all reports, studies, surveys and other written materials developed by or
provided to Purchaser in connection with all inspections, tests and studies
conducted by or on behalf of Purchaser.

4.2 Matters Relating to Title.

4.2.1 State of Title. Purchaser may obtain a current title commitment (the
“Title Commitment”) with respect to the Property from the Title Company,
together with legible copies of all title exception documents. Purchaser may
also obtain, at its own cost, the Survey during the Inspection Period. Within
ten (10) Business Days after the date of receipt by Purchaser of the Title
Commitment and Survey (but in any event, five (5) calendar days prior to the
expiration of the Inspection Period), Purchaser may submit to Seller a written
Notice from Purchaser (“Title Notice”) specifying any alleged defects in or
objections to the title shown in the Title Commitment or any of the Survey. Any
matters to which Purchaser objects in the Title Notice shall constitute “Title
Exceptions”, and any survey defects to which Purchaser objects in the Title
Notice shall constitute “Survey Defects” (the Title Exceptions and Survey
Defects shall collectively be referred to as the “Unpermitted Exceptions”).
Seller shall notify Purchaser in writing within five (5) Business Days of
receiving the Title Notice (the “Exception Cure Period”) whether Seller will
cure any Unpermitted Exceptions set forth in the Title Notice and, if Seller
elects to cure such Unpermitted Exceptions, Seller shall do so at its own
expense (the failure to so notify Purchaser within such five (5) Business Days
being deemed an election not to cure such Unpermitted Exceptions). Upon
Purchaser’s failure to timely object, all matters shown on the Title Commitment
or on the Survey shall thereafter be deemed a “Permitted Exception”. Any matter
which Seller elects or is deemed to have elected not to cure shall also be
deemed a Permitted Exception unless Purchaser elects to terminate this Agreement
by written notice to Seller within five (5) Business Days after Purchaser
receives written notice of Seller’s election not to cure such objection or
Seller is deemed to have elected not to cure such Unpermitted Exception. If
Seller elects to cure any or all of the Unpermitted Exceptions, but is unable to
complete the cure of such Unpermitted Exceptions before Closing, Purchaser shall
have the right, in its absolute discretion, to elect, upon written notice to
Seller within five (5) Business Days of written notice from Seller that Seller
is unable to cure such Unpermitted Exceptions, to either (A) proceed to the
Closing in which event any such Unpermitted Exceptions shall be deemed to be
Permitted Exceptions; or (B) to proceed pursuant to Section 4.2.2. Failure by
Purchaser to deliver the notice referred to in the immediately preceding
sentence shall be deemed an election under (B) above and failure of Seller to
cure any default it has elected to cure hereunder shall be an Event of Default.
Notwithstanding anything to the contrary in this Agreement, the Ground Lease and
the Declaration shall be Permitted Exceptions.

4.2.2 Failure of Title. If on the Closing Date the Leasehold Interests and
Improvements are not insurable or are subject to any Unpermitted Exceptions,
Purchaser

 

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may elect, as its sole right and remedy, either (i) to take such title to such
interests as can be conveyed, with no abatement of the Purchase Price (except
for abatement to the extent of monetary liens of a definite, fixed and
ascertainable amount not in excess of the Purchase Price), or (ii) to terminate
this Agreement and proceed pursuant to Article 10 below.

4.2.3 Updated Title Commitment and Survey. If prior to Closing any update of the
Title Commitment discloses any Title Exception which is not disclosed in a Title
Commitment previously obtained by Purchaser and does not arise by, through or
under Purchaser (a “New Title Exception”), or any update of the Survey obtained
by Purchaser discloses any Survey Defect which is not disclosed in the Survey
previously obtained by Purchaser (a “New Survey Defect”), Purchaser shall notify
Seller of any objections thereto within five (5) days of receipt of such Title
Commitment or Survey. If Purchaser sends such an objection, the Parties shall
have the same rights and obligations with respect to such matters as apply to
Unpermitted Exception under Section 4.2.1. Seller will not, during the term of
this Agreement, create or permit to exist any New Title Exception or New Survey
Defect without Purchaser’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.

4.2.4 Title Policy. At Closing, Purchaser shall take such steps as may be
necessary to cause the Title Company to issue a standard leasehold’s title
insurance policy to Purchaser (the “Title Policy”) and a standard loan title
insurance policy to Purchaser’s lender, as applicable, subject only to the
applicable Permitted Exceptions.

4.2.5 Conveyance of the Leasehold Interests and Improvements. At Closing Seller
shall convey the Leasehold Interests via the form of Assignment and Assumption
of Ground Lease attached hereto as Exhibit 4.2.5 and the Improvements to
Purchaser via the Deed, subject only to the Permitted Exceptions (provided,
however, neither Assignment nor Deed shall list as a Permitted Exception any
exception for any matters appearing solely on the Survey and not otherwise
appearing in the public records of Johnson County, Kansas).

4.3 Assignment and Assumption of Facility Contracts, Tenant Leases, and
Transferred Licenses and Permits. On the Closing Date, the Tenant Leases shall
be assigned by Seller and assumed by Purchaser as of the Closing Date pursuant
to the assignment and assumption agreement described in Section 8.3.4 and the
Facility Contracts and Transferred Licenses and Permits shall be assigned by
Seller and assumed by Purchaser as of the Closing Date pursuant to the
assignment and assumption agreement described in Section 8.3.5. Notwithstanding
the foregoing, on or before the termination of the Inspection Period, Purchaser
shall identify in writing to Seller (i) which Facility Contracts it agrees to
assume, and (ii) any such Facility Contracts it does not agree to assume, and
Seller shall retain such Facility Contracts as Retained Liabilities or terminate
such disapproved Facility Contracts at its sole cost and expense as of the
Closing Date. Notwithstanding anything to the contrary, Purchaser shall not be
responsible for the obligations under any Facility Contracts that it does not
expressly approve in writing during the Inspection Period and assume in the
assignment and assumption.

 

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4.4 Purchaser’s Election Whether or Not to Proceed. If Purchaser determines in
its sole discretion for any reason, or no reason at all, that it does not desire
to acquire the Assets and Purchaser notifies Seller and the Escrow Agent of such
determination in writing prior to the expiration of the Inspection Period, then
the Deposit shall be returned to Purchaser, this Agreement shall be of no
further force or effect, and the Parties hereto shall have no further
obligations to the other (except for any obligations or liabilities that
expressly survive termination of this Agreement). In any instance where
Purchaser has the discretion to elect to terminate this Agreement, and in fact
does elect to terminate this Agreement pursuant to this Article 4, Escrow Agent
shall return the Deposit to Purchaser without further instructions, consent or
written authorization by Seller. This provision shall constitute the mutual
escrow instructions to Escrow Agent and Escrow Agent shall be entitled and
required to rely upon such instructions to return the Deposit to Purchaser
without consent or further action by Seller.

4.5 Release and Indemnification. Purchaser (for itself and all Purchaser’s
Indemnitees) hereby releases Seller’s Indemnitees for any Indemnification Loss
incurred by any Purchaser Indemnitee arising from or in connection with the
Inspections, except to the extent resulting from the gross negligence or willful
misconduct of Seller’s Indemnitee. Purchaser shall indemnify, save, insure pay,
defend and hold harmless Seller’s Indemnitees in accordance with Article 12 from
and against any Indemnification Loss incurred by Seller’s Indemnitee arising
from or in connection with the Inspections, except to the extent resulting from
the gross negligence or willful misconduct of Seller’s Indemnitee.

4.6 No Representation or Warranty by Seller. Purchaser acknowledges that, except
as expressly set forth in this Agreement, Seller has not made and does not make
any warranty or representation regarding the truth, accuracy or completeness of
the Property Seller’s Due Diligence Materials or the source(s) thereof.
Purchaser further acknowledges that, except as expressly set forth in this
Agreement, some if not all of the Seller’s Due Diligence Materials were prepared
by third parties other than Seller. Except as expressly set forth in this
Agreement, Seller expressly disclaims any and all liability for representations
or warranties, express or implied, statements of fact and other matters
contained in such information, or for omissions from the Seller’s Due Diligence
Materials, or in any other written or oral communications transmitted or made
available to Purchaser. Except as expressly set forth in this Agreement
including Seller’s representations and warranties in Section 5.1 Purchaser shall
rely solely upon its own investigation with respect to the Property and Assets,
including, without limitation, the Property’s Asset’s physical, environmental or
economic condition, compliance or lack of compliance with any ordinance, order,
permit or regulation or any other attribute or matter relating thereto. Seller
has not undertaken any independent investigation as to the truth, accuracy or
completeness of the Seller’s Due Diligence Materials and are providing the
Seller’s Due Diligence Materials solely as an accommodation to Purchaser.

5. REPRESENTATIONS AND WARRANTIES

5.1 Seller’s Representations and Warranties. To induce Purchaser to enter into
this Agreement and to consummate the transactions described in this Agreement,
Seller hereby makes the representations and warranties in this Section 5.1, upon
which Seller acknowledges and agrees that Purchaser is entitled to rely, and as
of Closing shall provide a certificate reconfirming that all such
representations and warranties remain true and correct as of the Closing Date,
except as updated in accordance with Section 13.20.

 

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5.1.1 Organization and Power. Seller is duly formed, validly existing, in good
standing in the jurisdiction of its incorporation or formation, and is qualified
to do business in the State of Kansas.

5.1.2 Authority and Binding Obligation. (i) Seller has obtained the approval of
its members of this Agreement and the transactions described herein and has full
power and authority to execute and deliver this Agreement and all other
documents to be executed and delivered by it pursuant to this Agreement (the
“Seller’s Documents”), and to perform all obligations required of it under this
Agreement and each of Seller’s Documents; (ii) the execution and delivery by
Seller of this Agreement and, when executed and delivered, Seller’s Documents,
and the performance by Seller of its obligations under this Agreement and, when
executed and delivered, each of Seller’s Documents, have been duly and validly
authorized by all necessary limited liability company action by Seller; and
(iii) this Agreement and, when executed and delivered, Seller’s Documents
constitutes, or will constitute, legal, valid and binding obligations of Seller
enforceable against Seller in accordance with its and their terms, except to the
extent Purchaser itself is in default hereunder or thereunder.

5.1.3 Consent and Approvals; No Conflicts. Subject to the recording of Seller’s
Documents, as appropriate, (i) no filing with, and no permit, authorization,
consent or approval of, any Governmental Authority or other Person is necessary
for execution or delivery by Seller of any of Seller’s Documents, or the
performance by Seller of any of its obligations under this Agreement or any of
Seller’s Documents or the consummation by Seller of the transactions described
in this Agreement, except to the extent such permit, authorization, consent or
approval (a) has been or will be obtained by Seller prior to or at Closing or
(b) obtaining such permit, authorization, consent or approval is Purchaser’s
responsibility hereunder. There is no agreement to which Seller is a party or,
to Seller’s Knowledge, that is binding on Seller which is in conflict with this
Agreement. There is no Applicable Law or action or proceeding pending or, to
Seller’s Knowledge, threatened against Seller or relating to the Property or the
Assets, which challenges or impairs Seller’s ability to execute or perform its
obligations under this Agreement.

5.1.4 Condemnation. Seller has not received any written notice of any pending
condemnation proceeding or other proceeding in eminent domain, and to Seller’s
Knowledge, no such condemnation proceeding or eminent domain proceeding is
threatened affecting the Property, or any portion thereof.

5.1.5 Compliance with Applicable Law. Seller has not received any written notice
of, any violation of any provision of Applicable Law (including, but not limited
to, the Americans with Disabilities Act, COBRA, and Environmental Laws), with
respect to the ownership, operation, use, maintenance or condition of the
Property which has not been cured or dismissed with prejudice.

 

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5.1.6 Litigation. Except as set forth on Schedule 5.1.6, Seller has not (i) been
served or threatened in writing with any court filing in any litigation with
respect to any Assets in which Seller is named a party which has not been
resolved, settled or dismissed and which could result in a material or adverse
impact on the Assets or Seller’s title to any of the Assets or (ii) received
written notice of any claim, charge or complaint from any Governmental Authority
pursuant to any administrative, arbitration, or similar adjudicatory proceeding
with respect to any Assets which has not been resolved, settled or dismissed.

5.1.7 Taxes. All Taxes which would be delinquent if unpaid at Closing will be
paid in full or prorated at Closing as part of the prorations pursuant to
Article 9; provided, however, that if any Taxes are payable in installments,
such representation and warranty shall apply only to such installments which
would be delinquent if unpaid at Closing. Seller has not received any written
notice for an audit or delinquency of any Taxes with respect to any Assets which
has not been resolved or completed. To Seller’s Knowledge, there are no
outstanding unpaid municipal assessment notices against the Assets. Seller is
not currently contesting any Taxes with respect to any Assets. All state and
local Tax returns and Tax reports required to be filed by Seller with respect to
the Assets on or before the date hereof have been timely filed with the
appropriate governmental agencies. All Taxes and other assessments and levies
which Seller is required by law to withhold or to collect with respect to the
Assets have been duly withheld and collected, and have been paid over to the
proper governmental authorities and agencies to the extent due and payable.
Other than extensions to file any Seller’s tax returns, there are no agreements
by Seller for the extension of time for the assessment of any Tax.

5.1.8 Licenses and Permits. To Seller’s Knowledge, Seller has made, or will
make, available to Purchaser a true and complete copy of the Licenses and
Permits that are necessary for the ownership and operation of the Assets. Seller
shall close or caused to be closed any open building permits or open notices of
violation prior to Closing.

5.1.9 Ground Lease. To Seller’s Knowledge, the Ground Lease is in full force and
effect and neither Seller nor Ground Lessor is in breach or default under any
obligation thereunder, or any provision thereof. Seller has received no written
notice of default under the Ground Lease nor has Seller served upon Ground
Lessor written notice of default by Ground Lessor under the Ground Lease. Other
than the Ground Lease or Permitted Exceptions, there are no additional
agreements between Seller and Ground Lessor that will be binding on Purchaser
after the Closing. Seller has provided to Purchaser a true, correct, and
complete copy of the Ground Lease and all amendments thereto.

5.1.10 Tenant Leases. Schedule 2.2.5 sets forth a true, correct and complete
list and rent roll with respect to the Tenant Leases, and Seller has made
available to Purchaser for review a copy of each of the Tenant Leases in
Seller’s possession, which are true, correct and complete copies of the Tenant
Leases in all material respects. Neither Seller nor, to Seller’s Knowledge, any
tenant is in breach or default of any Tenant Leases and Seller has not given nor
received any written notice of any breach or default under any of the Tenant
Leases which has not been cured. No rents due under any of the

 

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Tenant Leases are presently assigned, hypothecated or encumbered by Seller,
other than in connection with any mortgage encumbering the Property which shall
be satisfied prior to or in connection with the Closing. Except as set forth in
Schedule 2.2.5, no tenants are entitled to any rebates, rent concessions or free
rent and there are no unpaid brokerage commissions or unpaid landlord
obligations for tenant improvements in connection with the current term of
occupancy or any extension thereof of tenants under the Tenant Leases. Except as
set forth on Schedule 2.2.5, no rent under any of the Tenant Leases has been
prepaid (except for rental for the current month and payments that are required
to be made in advance pursuant to the terms and provisions of the Tenant Leases
and except for prepayments set forth in the Tenant Leases). No tenant has
notified Seller in writing of its intent to terminate its Tenant Lease prior to
expiration of the term of such Tenant Lease. Prior to Closing, Seller will
deliver to Purchaser an updated rent roll signed by a representative of Seller
which shall contain information current as of no earlier than five (5) Business
Days prior to Closing and shall replace Schedule 2.2.5 for all purposes under
this Agreement.

5.1.11 Possession. Except pursuant to the Permitted Exceptions, Tenant Leases,
and Facility Contracts, no Person other than Seller has any license, lease or
other right pursuant to an agreement signed by or on behalf of Seller or
Seller’s property manager relating to the use or possession of the Property or
any part thereof.

5.1.12 Purchase Rights. To Seller’s Knowledge, there are no options or other
agreements of any kind, whereby any Person other than Purchaser will have
acquired or will have any right to acquire title or interest to all or any
portion of the Assets, and to Seller’s Knowledge, there are no purchase
contracts, options or other agreements of any kind, whereby any Person will have
any right to acquire title or interest to all or any portion of the Assets,
except for the except for the right of first refusal held by Ground Lessor and
Las Encinas Hospital, a California corporation, under the Declaration (the
“ROFR”).

5.1.13 Facility Contracts. Schedule 2.2.7 sets forth a true, correct and
complete list of the Facility Contracts. The copies heretofore delivered to
Purchaser are true, correct and complete in all material respects. To Seller’s
Knowledge, no party to the Facility Contracts is in breach or default under any
material obligation thereunder or any provisions thereof and each of the
Facility Contracts is in full force and effect in accordance with its terms.
With respect to any Persons whose consent is required as a condition to Seller’s
assignment of the Facility Contracts to Purchaser at Closing, Seller covenants
to employ diligent, good faith efforts to obtain such consent(s) in writing (in
a form reasonably acceptable to Purchaser) prior to the Closing Date.

5.1.14 Bankruptcy. Seller is not insolvent within the meaning of Title 11 of the
United States Code, as amended (the “Bankruptcy Code”), and Seller is able to
repay its debts as they become due. Seller has not filed or taken any action to
file a voluntary petition, case or proceeding under any section or chapter of
the Bankruptcy Code, or under any similar law or statute of the United States or
any state thereof, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of its debts and no such petition, case or
proceeding has been filed against it which has not

 

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been dismissed, vacated or stayed on appeal and Seller has not been adjudicated
as a bankrupt or insolvent or consented to, nor filed an answer admitting or
failing reasonably to contest an allegation of bankruptcy or insolvency. Seller
has not sought, or consented to or acquiesced in, the appointment of any
receiver, trustee, liquidator or other custodian of it or a material part of its
assets, and Seller has not made or taken any action to make a general assignment
for the benefit of creditors or an arrangement, attachment or execution has been
levied and no tax lien or other governmental or similar lien has been filed,
against it or a material part of its properties, which has not been duly and
fully discharged prior to the date hereof.

5.1.15 Labor and Employment Matters. Seller is not a party to any collective
bargaining agreement or relationship with any labor union that affects the
Assets.

5.1.16 Construction Contracts. There are no outstanding contracts made by Seller
for the construction or repair of any Improvements, and Seller shall discharge
and have released of record or bonded all mechanic’s, builder’s or materialman’s
liens, if any, arising from any labor or materials furnished to any portion of
the Property prior to the Closing to the extent any such lien is not bonded over
pursuant to Applicable Law.

5.1.17 Insurance Policies. Seller has not received written notice from any
insurance carrier of defects or inadequacies in the Assets which, if
uncorrected, would result in a termination of insurance coverage or a material
increase in the premiums charged therefor. Seller shall maintain uninterrupted
insurance coverage through the Closing Date.

5.1.18 Environmental Condition of Property. To Seller’s Knowledge, there are no
underground storage tanks on the Property and the Property does not contain any
Hazardous Materials (other than any Hazardous Materials situated at the Property
in the Ordinary Course of Business or the ordinary course of business of any
tenant or other occupant of the Property which are stored, held, used and
disposed of in compliance with Environmental Laws) and there are no
Environmental Claims, Environmental Liabilities or violations of Environmental
Laws in respect of the Property.

5.1.19 Management Agreements. As of the Closing Date, there will be no
management agreements with respect to the Assets, other than those approved in
writing by Purchaser prior to Closing. Seller’s existing management agreement
for the Assets shall be terminated by Seller effective as of the Closing Date.

5.1.20 Compliance with Of-Record Matters. Seller has not received, nor given,
any written notice, nor does Seller have any knowledge, of any material
violation of any easement, restriction, covenant, declaration or other matter of
record which has not been cured or dismissed and there exists no breach or
default with respect to any such matter.

5.1.21 Finders and Investment Brokers. Other than Holliday Fenoglio Fowler,
Seller has not dealt with any Person who has acted, directly or indirectly, as a
broker, finder, financial adviser or in such other capacity for or on behalf of
Seller in connection with the transactions contemplated by this Agreement in a
manner which would entitle such Person to any fee or commission in connection
with this Agreement or the transactions contemplated by this Agreement. Seller
shall be solely responsible for all amounts owing to Holliday Fenoglio Fowler
with respect to this transaction.

 

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5.1.22 Foreign Person. Seller is a “United States person” (as defined in
Section 7701(a)(30)(B) or (C) of the Code) for the purposes of the provisions of
Section 1445(a) of the Code.

5.1.23 Financial Statements. The profit and loss statements for the Property
which were provided to Purchaser: (i) are true and complete copies of the profit
and loss statements for such periods prepared by Seller in the ordinary course
of its business operations with respect to the Property; (ii) have been prepared
using an accrual method of accounting; and (iii) present fairly, in all material
respects, the operation results of the Property for the periods covered by such
income statements, subject to standard year-end adjustments for any year to date
income statements and financial notes and qualifications to such statements. No
later than five (5) Business Days prior to Closing, Seller will deliver to
Purchaser then-current profit and loss statements for the Property.

5.1.24 ERISA. Neither (i) any assets of Seller, nor (ii) any funds to be used by
Seller with respect to the transactions contemplated pursuant to this Agreement,
are, or at the Closing will be, pursuant to ERISA or the Code, considered for
any purpose of ERISA or Section 4975 of the Code to be assets of a Plan. Seller
is not executing this Agreement and will not be performing its obligations or
exercising its rights or remedies under the Agreement on behalf of or for the
benefit of any Plan. For the purposes hereof the following terms shall have the
following meanings: “Code” shall mean the Internal Revenue Code of 1986, as
amended; “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended (and any successor statute and any applicable regulations or guidance
promulgated thereunder); and “Plan” shall mean a “plan” as that term is defined
in Section 3(3) of ERISA or Section 4975 of the Code.

5.1.25 Intellectual Property. To Seller’s Knowledge, Seller does not own,
license or control any Intellectual Property in connection with the Property,
including without limitation the name “Overland Park Medical Office Building”.
Seller has not received written notification of any claims or actions by any
party disputing or challenging Seller’s right to use the name “Overland Park
Medical Office Building” or any variation thereof.

5.1.26 Prohibited Persons and Transactions. Purchaser is currently in compliance
with and shall at all times during the term of this Agreement (including any
extension thereof) remain in compliance with the regulations of Office of
Foreign Assets Control (“OFAC”) (including those named on OFAC’s Specially
Designated Nationals and Blocked Persons List) and any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action relating thereto.

 

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5.1.27 Restriction of Access. Seller has no knowledge of any current federal,
state, county or municipal plans to materially restrict or materially change
access to any part of the Property from any highway or road leading directly to
or abutting any part of the Property.

5.2 Purchaser’s Representations and Warranties. To induce Seller to enter into
this Agreement and to consummate the transactions described in this Agreement,
Purchaser hereby makes the representations and warranties in this Section 5.2,
upon which Purchaser acknowledges and agrees that Seller are entitled to rely,
and as of Closing shall provide a certificate reconfirming that all such
representations and warranties remain true and correct as of the Closing Date,
except as updated in accordance with Section 13.20.

5.2.1 Organization and Power. Purchaser is duly incorporated or formed (as the
case may be), validly existing and in good standing in the laws of the
jurisdiction of its incorporation or formation, and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as currently being conducted.

5.2.2 Authority and Binding Obligation. Purchaser has full power and authority
to execute and deliver this Agreement and to perform all obligations of
Purchaser arising under this Agreement. Subject to Purchaser obtaining approval
from its Board of Directors during the Inspection Period, Purchaser has full
power and authority to execute and deliver all other documents to be executed
and delivered by Purchaser pursuant to this Agreement (the “Purchaser’s
Documents”), and to perform all obligations of Purchaser arising under each of
Purchaser’s Documents. The execution and delivery by the signer on behalf of
Purchaser of this Agreement and, when executed and delivered, each of
Purchaser’s Documents, and the performance by Purchaser of its obligations under
this Agreement, and when executed and delivered, each of Purchaser’s Documents,
has been, or will be, duly and validly authorized by all necessary actions by
Purchaser. This Agreement and, when executed and delivered, each of Purchaser’s
Documents, constitutes, or will constitute, legal, valid and binding obligations
of Purchaser, enforceable against Purchaser in accordance with its and their
terms, except to the extent Seller is in default thereunder. Unless Purchaser
terminates this Agreement prior to the end of the Inspection Period as provided
for herein, following the expiration of the Inspection Period, Purchaser shall
be deemed to have represented that it has obtained all necessary Board
approvals.

5.2.3 Consents and Approvals; No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any Governmental Authority or other
Person is necessary for the execution or delivery by Purchaser of this Agreement
or the performance by Purchaser of any of its obligations under this Agreement.
Other than Purchaser’s Board of Director approval referenced in Section 5.2.2.
above, no filing with, and no permit, authorization, consent or approval of, any
Governmental Authority or other Person is necessary for the execution or
delivery by Purchaser of any of Purchaser’s Documents, the performance by
Purchaser of any of its obligations under any of Purchaser’s Documents, or the
consummation by Purchaser of the transactions contemplated by this Agreement or
any of Purchaser’s Documents. Upon receipt of Board of Director approval by
Purchaser, neither the execution and delivery by Purchaser

 

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of any of Purchaser’s Documents, nor the performance by Purchaser of any of its
obligations under any of Purchaser’s Documents, nor the consummation by
Purchaser of the transactions described in this Agreement, will: (A) violate any
provision of the organizational or governing documents of Purchaser; (B) violate
any Applicable Law to which Purchaser is subject; or (C) result in a violation
or breach of or constitute a default under any contract, agreement or other
instrument or obligation to which Purchaser is a party or by which any of
Purchaser’s properties are subject. Unless Purchaser terminates this Agreement
prior to the end of the Inspection Period as provided for herein, following the
expiration of the Inspection Period, Purchaser shall be deemed to have
represented that it has obtained all necessary Board approvals.

5.2.4 Finders and Investment Brokers. Purchaser has not dealt with any Person
who has acted, directly or indirectly, as a broker, finder, financial adviser or
in such other capacity for or on behalf of Purchaser in connection with the
transactions described by this Agreement in any manner which would entitle such
Person to any fee or commission in connection with this Agreement or the
transactions described in this Agreement.

5.2.5 Prohibited Persons and Transactions. Purchaser is currently in compliance
with and shall at all times during the term of this Agreement (including any
extension thereof) remain in compliance with the regulations of OFAC (including
those named on OFAC’s Specially Designated Nationals and Blocked Persons List)
and any statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action relating
thereto.

6. COVENANTS

6.1 Confidentiality.

6.1.1 Disclosure of Confidential Information. The Parties acknowledge and agree
that the existence of this Agreement, the terms of this Agreement and any other
information disclosed in Seller’s Due Diligence Materials, Purchaser’s Due
Diligence Reports or any other documents, materials, data or other information
with respect to the Assets which is not generally known to the public shall be
confidential except to the extent already within the public domain or as
otherwise required by Applicable Law (including but not limited to in connection
with public disclosure obligations required by the United States Securities and
Exchange Commission). Notwithstanding the foregoing, Purchaser may reveal and
deliver Seller’s Due Diligence Materials, Purchaser’s Due Diligence Reports, and
all other documents, information, and materials concerning the Property to its
agents, representatives, lenders, investors, principals, and Affiliates. Nothing
herein shall restrict or limit Seller or Purchaser from communicating with
tenants, lenders, contract parties, owners associations, or government officials
or bodies in connection with obtaining estoppels or other required consents or
approvals, as may be reasonably necessary to consummate the transactions
contemplated under this Agreement, or Purchaser from contacting Seller’s company
officials, property engineers and architects, and other third-party consultants
assisting Purchaser in its investigation of the Assets, subject to
Section 6.1.3. Nothing herein shall restrict Purchaser from

 

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communicating the existence and progress of the transactions contemplated by
this Agreement to its agents, representatives, potential managers, lenders,
investors, principals or affiliates. Nothing herein shall restrict or limit
Seller from communicating the existence and progress of the transactions
contemplated by this Agreement to their lenders.

6.1.2 Public Announcements. Prior to Closing, no Party shall have the right to
make a public announcement regarding the transactions described in this
Agreement without the prior approval of the other Party. Seller and Purchaser
shall approve the timing, form and substance of any such public announcement,
which approval shall not be unreasonably withheld, conditioned or delayed,
except if a Party is required to make a public announcement under Applicable
Law, in which case no such approval by any other Party shall be required.
Following Closing, each Party shall have the right to make a public announcement
regarding the transactions described in this Agreement without the necessity of
approval by the other Party.

6.1.3 Communication with Governmental Authorities. Purchaser and its
representatives and consultants shall have the right to review building
department, health department and other local Governmental Authority records
with respect to the Assets and the operation of the Property and request written
or verbal confirmation of zoning and any other compliance by the Assets with any
Applicable Law. Purchaser and its representatives and consultants shall have the
right to contact Governmental Authorities to pursue the issuance of any Licenses
and Permits desired by Purchaser.

6.2 Assessments. Any assessments by any Governmental Authority or as a result of
any bonds for improvements or other work at any portion of the Property that
pertain to the period prior to Closing shall be the responsibility of and paid
by Seller, but if assessed in installments, only to the extent relating to the
period prior to Closing, and Seller shall indemnify, save, insure, pay, defend
and hold Purchaser harmless from and against any claims therefor any Liability
arising therefrom. Any assessments by any Governmental Authority or as a result
of any bonds for improvements or other work at any portion of the Property that
pertain to the period on and after the Closing shall be the responsibility of
and paid by Purchaser, but if assessed in installments, only to the extent
relating to the period on or after the Closing, and Purchaser shall indemnify,
save, insure, pay, defend and hold Seller harmless from and against any claims
therefor any Liability arising therefrom. The obligations under this Section 6.2
shall survive Closing.

6.3 Conduct of the Operations of the Property.

6.3.1 Operation, Maintenance and Repair in Ordinary Course of Business. From the
Effective Date until Closing or earlier termination of this Agreement, Seller
shall conduct the operations of the Property in the Ordinary Course of Business
including, without limitation, (i) performing maintenance and repairs to the
Property in the Ordinary Course of Business provided, that Seller shall have no
obligation to make any capital improvement (unless required pursuant to the
terms of a Tenant Lease); and (ii) maintaining insurance coverage consistent
with Seller’s risk management policies in place as of the date hereof; and
(iii) replacing and/or repairing Personal Property in the

 

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Ordinary Course of Business. Seller shall maintain the Assets in accordance with
the Ordinary Course of Business (such obligation to include the maintenance of
Seller’s casualty and liability insurance policies in the Ordinary Course of
Business), subject to reasonable wear and tear and further subject to
destruction by casualty or eminent domain provided, that Seller shall have no
obligation to make any capital improvement (unless required pursuant to the
terms of a Tenant Lease). Purchaser shall have the right to inspect the Assets
prior to Closing to determine if any Seller has breached the covenants of such
Seller in this Section 6.3.1. Seller in all material respects shall comply with
the terms conditions and requirements under the Facility Contracts, Tenant
Leases, and Licenses and Permits, and shall continue to make all payments due
thereunder prior to delinquency (whether or not Purchaser shall assume the
same). Seller shall not sell, remove or otherwise dispose of any Assets other
than in the Ordinary Course of Business.

6.3.2 Facility Contracts, Tenant Leases and Licenses and Permits. From the
expiration of the Inspection Period until Closing or earlier termination of this
Agreement, Seller shall not, (i) without Purchaser’s prior written consent,
which shall not be unreasonably withheld, conditioned or delayed, amend, extend,
renew or terminate any of the existing Facility Contracts, Tenant Leases or
Licenses and Permits except in the Ordinary Course of Business, or (ii) without
Purchaser’s prior written consent in its sole discretion procure any new
contract that will be binding on Seller or the Property after the Closing,
Tenant Leases or licenses and permits, except, in each instance, in the Ordinary
Course of Business, or in the event that Seller is required to act on an
emergency basis to enter into any such contract to prevent material damages to
the Assets or the operation of the Property. Notwithstanding the foregoing, from
the Effective Date until the Closing or earlier termination of this Agreement,
should Seller enter into any amendment, extension, renewal or termination of any
of the existing Facility Contracts, Tenant Leases or Licenses and Permits or
enter into any new contracts, tenant leases or licenses and permits, whether or
not in the Ordinary Course of Business, without Purchaser’s prior written
consent, or should Seller become aware of any contracts or licenses and permits
that were not previously disclosed to Purchaser, Seller shall immediately
disclose the same to Purchaser in writing, and Purchaser shall have the right
take an assignment of such new, amended, extended or renewed contracts, tenant
leases and licenses and permits at Closing pursuant to the terms of this
Agreement. If Purchaser elects not to take an assignment of any such new,
amended, extended or renewed contract, tenant lease, license, or permit, such
contract, tenant lease, license or permit shall be deemed a Retained Liability
of Seller.

6.3.3 Title. From the Effective Date until the Closing or earlier termination of
this Agreement, Seller shall not intentionally through any act or omission
create any Title Exception which materially or adversely affects any portion of
the Property.

6.4 Tax Contests.

6.4.1 Taxable Period Terminating Prior to Closing Date. Seller shall retain the
right, at its sole cost and expense, to commence, continue and settle any
proceeding to contest any Taxes for any taxable period which terminates prior to
the Closing Date, and shall be entitled to any refunds or abatements of Taxes
awarded in such proceedings;

 

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provided, however, Seller shall indemnify and hold Purchaser harmless from and
against any Indemnification Loss incurred by Purchaser as a result of any Seller
exercising its rights to so contest any Taxes under this Section 6.4.1. This
Section 6.4.1 shall survive the Closing.

6.4.2 Taxable Period Including the Closing Date. Seller shall have the right to
commence, continue and settle any proceeding to contest any Taxes for any
taxable period which includes the Closing Date. Notwithstanding the foregoing,
if Purchaser desires to contest any Taxes for such taxable period and Seller has
not commenced any proceeding or process to contest any such Taxes for such
taxable period, Purchaser, may request Seller to do so (but Seller shall have no
obligation to do so). If Seller desires to contest such Taxes, Seller shall
provide written notice to Purchaser within ten (10) days after receipt of
Purchaser’s request confirming that Seller will contest such Taxes, in which
case Seller shall proceed to contest such Taxes, and Purchaser shall not have
the right to contest such Taxes. If Seller fails to provide such written notice
confirming that Seller will contest such Taxes within such ten (10) day period,
Purchaser shall have the right to contest such Taxes, at Purchaser’s sole cost
and expense, and Seller shall reasonably cooperate with respect to any such
contest made by Purchaser. Any refunds or abatements awarded in such proceedings
shall be used first to reimburse the Party contesting such Taxes for the
reasonable costs and expenses incurred by such Party in contesting such Taxes,
and the remainder of such refunds or abatements shall be prorated between Seller
and Purchaser (subject to the terms of the Tenant Leases) as of the Closing
Date, and the Party receiving such refunds or abatements promptly shall pay such
prorated amount due to the other Party. This Section 6.4.2 shall survive the
Closing.

6.4.3 Cooperation. Seller and Purchaser shall use commercially reasonable
efforts to cooperate with the Party contesting the Taxes (at no cost or expense
to the Party not contesting the Taxes other than any de minimis cost or expense
or any cost or expense which the requesting Party agrees in writing to
reimburse) and to execute and deliver any documents and instruments reasonably
requested by the Party contesting the Taxes in furtherance of the contest of
such Taxes. This Section 6.4.3 shall survive the Closing.

6.5 Notices and Filings. Seller and Purchaser shall use commercially reasonable
efforts to cooperate with each other (at no cost or expense to the Party whose
cooperation is requested, other than any de minimis cost or expense or any cost
or expense which the requesting Party agrees in writing to reimburse) to provide
written notice to any Person under any Facility Contracts, the Ground Lease,
Tenant Leases, or Licenses and Permits and to effect any required registrations
or filings with any Governmental Authority or other Person, regarding the change
in ownership of the Assets.

6.6 Further Assurances. From the Effective Date until the Closing or termination
of this Agreement, Seller and Purchaser shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate the transactions
described in this Agreement, including, without limitation, (i) obtaining all
necessary consents, approvals and authorizations required to be obtained from
any Governmental Authority or other Person under this Agreement or Applicable
Law, and (ii) effecting all registrations and filings required under this
Agreement or Applicable Law. After

 

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Closing, Seller and Purchaser shall use commercially reasonable efforts (at no
cost or expense to such Party, other than any de minimis cost or expense or any
cost or expense which the requesting Party agrees in writing to reimburse) to
further effect the transactions contemplated in this Agreement.

6.7 Estoppel Certificates/SNDA. Seller shall use commercially reasonable efforts
to obtain estoppel certificates (the “Third-Party Estoppels”) and deliver the
same to Purchaser at least three (3) Business Days prior to the Closing Date
from, the following (collectively, the “Required Third-Party Estoppels”):
(i) tenant estoppels from Mid-America Surgery Institute, LLC, a Kansas limited
liability company, and Women’s Clinic of Johnson County, Inc., a Kansas
corporation (collectively, “Major Tenants”), for their respective Tenant Leases
at the MOB; and (ii) a landlord estoppel from Ground Lessor. Seller shall
additionally use good faith efforts to obtain prior to Closing tenant estoppels
from all other tenants at the MOB and Third-Party Estoppels from any other third
party reasonably required by Purchaser as a result of its due diligence
regarding the Assets. Seller shall also use commercially reasonable efforts to
obtain and deliver to Purchaser at least three (3) Business Days prior to the
Closing Date subordination, non-disturbance and attornment agreements from the
Major Tenants (the “SNDAs”). Additionally, Seller shall use good faith efforts
to obtain and deliver to Purchaser prior to Closing subordination,
non-disturbance and attornment agreements from all other tenants at the MOB. The
forms of all tenant estoppels and subordination, non-disturbance and attornment
agreements required pursuant to this Section shall be as reasonably required by
Purchaser’s lender, subject to the terms of the Ground Lease and Tenant Leases,
as applicable, and Purchaser shall use commercially reasonable efforts to
provide the forms to Seller within fifteen (15) days of the Effective Date.
Seller acknowledges that if required by the Title Company, Purchaser’s draft of
the landlord estoppel from Ground Lessor may include a written waiver of the
ROFR but Seller does not warrant or agree that any such written waiver will be
approved by Ground Lessor. Seller further agrees that Purchaser’s draft tenant
estoppel from Mid-America Surgery Institute, LLC may include language which
grants a royalty and cost-free license to Purchaser (or its assignee) for the
use of the name “Mid America Surgery Institute” in marketing materials, U.S.
Securities and Exchange Commission filings, and other similar public notices and
filings, but Seller does not warrant or agree that any such license will be
approved by Mid-America Surgery Institute, LLC. In no event shall Seller be in
default hereunder for its failure to obtain any or all of the Third-Party
Estoppels or SNDAs (so long as Seller used commercially reasonable efforts to
obtain such Third-Party Estoppels or SNDAs), but the delivery of Third-Party
Estoppels and SNDAs from the Major Tenants shall be a condition precedent to
Purchaser’s obligation (which may be waived by Purchaser in writing specifically
waiving such requirement) to acquire the Assets. If, after using commercially
reasonable efforts, Seller cannot cause the Major Tenants to execute Third-Party
Estoppels and SNDAs reasonably acceptable to Purchaser and acceptable to
Purchaser’s lender at least three (3) Business Days prior to the Closing Date,
Seller may extend the Closing Date for up to thirty (30) days to allow Seller
additional time to obtain Third-Party Estoppels and SNDAs from such Major
Tenants. If Seller cannot cause such Major Tenants and Ground Lessor to execute
Third-Party Estoppels and SNDAs at least three (3) Business Days prior to the
Closing Date (as the same may have been extended pursuant to the previous
sentence), Purchaser shall have the right to either (i) terminate this Agreement
by delivering written notice to Seller of its election of the same, or
(ii) proceed to the Closing notwithstanding Seller’s failure to deliver the
missing Third-Party Estoppels and SNDAs, in which event Seller shall provide an
estoppel certificate for any Tenant Lease for

 

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which Seller failed to obtain an executed Third-Party Estoppel. If Purchaser
terminates this Agreement in accordance with the foregoing, the Deposit shall be
promptly delivered to Purchaser, and, provided that Seller used good faith,
commercially reasonable efforts to comply with the terms of this Section,
thereafter neither Party shall have any further rights or obligations hereunder,
except as specifically provided in this Agreement.

6.8 Exclusivity. Seller covenants and agrees to refrain during the term of this
Agreement from making, accepting, encouraging or soliciting or otherwise
pursuing any other offer or proposal or agreement regarding the sale of the
Assets or any portion thereof or any interest therein, and will deal exclusively
with Purchaser in good faith toward the completion of the transaction
contemplated herein unless this Agreement shall be terminated as provided
herein.

6.9 Bulk Sales. Seller, at no expense to Purchaser, shall comply with all
applicable “bulk sales laws” in a timely manner, taking into account the timing
of the Closing.

6.10 Employees. At Closing, Seller shall terminate all of its Employees. With
respect to wages and benefits of Employees, Seller shall be solely responsible
for all wages, salaries, bonuses, employment taxes, withholding taxes, and all
accrued vacation days, sick days and personal days accruing prior to the Closing
Date in its capacity as Seller. Purchaser shall never be or be deemed the
employer of any Employee and shall not be liable to any Employee for any wages,
salaries, bonuses, vacation days, sick days or personal days in which said
Employee may have acquired an accrued or vested right by virtue of their
employment. Seller shall and hereby agree to indemnify, save, defend, pay,
insure and hold Purchaser harmless from and against any Liability for wages,
salaries, bonuses, accrued vacation days, sick days and personal days to be paid
to Employees. Seller shall remain liable for and hereby agree to indemnify,
save, defend, pay, insure and hold Purchaser harmless from and against any
Liability arising out of or relating to medical, pension, welfare benefits,
other employee benefits or other fringe benefits (hereinafter collectively
referred to as “benefits”) due to Employees under plans in which employees of
Seller participate whether prior to or after Closing, and all payments due on
the plans providing such benefits. Seller shall also remain responsible for and
hereby agrees to indemnify, save, defend, pay, insure and hold Purchaser
harmless from and against any loss, cost, damage, claims, expense or Liability
arising out of or relating to any Seller’s failure to pay (a) any Employee of
Seller’s wages, salary, bonuses, employment taxes, accrued vacation pay, sick
days and personal days, and withholding taxes, (b) benefits, whenever due,
provided under plans in which Employees of Seller participate, (c) liability
under Section 4980B, Part 6 of Title I of ERISA or Title IV of ERISA and
(d) liability under the WARN Act.

6.11 Post-Closing Audit. If requested by Purchaser, and to the extent required
by any Applicable Law, regulations and statutes governing Purchaser or any of
its investors, partners or members, Seller acknowledges and agrees to assist
Purchaser in conducting, no later than seventy-five (75) days following the
Closing Date, an audit of property-level financials for the Property as
specified by Rule 3-05 of Regulation S-X of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, provided such
audit shall be at the sole cost and expense of Purchaser. In connection
therewith, Seller agrees to provide to the auditors any and all data and
financial information in the possession of Seller which are reasonably necessary
or required by the auditors in connection with their preparation and conducting
of the foregoing audit. The rights and obligations of Purchaser and Seller under
this Section 6.11 shall survive Closing.

 

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6.12 Non-Solicitation. Seller, on behalf of itself and its Affiliates and
Subsidiaries, agrees that Seller and its Affiliates and Subsidiaries, shall not
directly or indirectly solicit, divert or accept business from any tenant under
any of the Tenant Leases, prospective tenant of the MOB, or otherwise interfere
with the relationship between Purchaser or any Affiliate of Purchaser and any
tenant or prospective tenant of any portion of the Real Property.
Notwithstanding the foregoing, general public advertisements by Seller or its
Subsidiaries or its Affiliates shall not be deemed a violation or breach of this
Section 6.12. The Parties recognize and acknowledge that a breach of this
Section 6.12 by Seller or any of its Subsidiaries will cause irreparable and
material loss and damage to Purchaser and hereby consent to the granting by any
court of competent jurisdiction of an injunction or other equitable relief,
without the necessity of posting a bond, cash or otherwise, and without the
necessity of actual monetary loss being proved or Purchaser’s establishing the
inadequacy of any remedy at law, and order that the breach or threatened breach
of such provisions may be effectively restrained. The provisions of this
Section 6.12 shall expressly survive the Closing and shall terminate on the
third (3rd) anniversary of the Closing Date.

7. CLOSING CONDITIONS

7.1 Purchaser’s Closing Conditions. Purchaser’s obligations to close the
transactions described in this Agreement are subject to the satisfaction at or
prior to Closing (or such other time as specified below) of the following
conditions precedent (the “Purchaser’s Closing Conditions”):

7.1.1 Seller’s Closing Deliveries. All of the Seller’s Closing Deliveries shall
have been delivered to Purchaser or deposited with Escrow Agent in the Closing
Escrow, to be delivered to Purchaser at the Closing.

7.1.2 Representations and Warranties. The representations and warranties of
Seller in this Agreement shall be true and correct in all material respects as
of the Closing (or as such other date to which such representation and
warranties expressly were made).

7.1.3 Covenants and Obligations. The covenants and obligations of Seller in this
Agreement shall have been performed in all material respects.

7.1.4 Title Policy. The Title Company shall have irrevocably committed to issue
the Title Policy pursuant to Section 4.2.4 with all standard exceptions deleted,
all requirements for issuance of each such Title Policy satisfied and deleted,
with all endorsements reasonably required by Purchaser.

7.1.5 Change in Environmental Condition of Property. No event shall have
occurred following the Effective Date and prior to the Closing Date which would
result in a violation of any Environmental Law.

7.1.6 Adverse Proceedings. No litigation or other court action shall have been
commenced seeking to obtain an injunction or other relief from such court to
enjoin the

 

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consummation of the transactions described in this Agreement, and no preliminary
or permanent injunction or other order, decree or ruling shall have been issued
by a court of competent jurisdiction or by any Governmental Authority, would
make illegal or invalid or otherwise prevent the consummation of the
transactions described in this Agreement.

7.1.7 Adverse Law. No Applicable Law shall have been enacted that would make
illegal or invalid or otherwise prevent the consummation of the transactions
described in this Agreement.

7.1.8 Estoppel Certificates/SNDAs. Seller shall have delivered or caused to be
delivered all executed Required Third-Party Estoppels and SNDAs as required by
Section 6.7 hereof.

7.1.9 Ground Lessor Actions. Ground Lessor shall have consented in writing to
the assignment of the Ground Lease by Seller to Purchaser (which consent shall
be in a form reasonably approved by Purchaser). Additionally, prior the
expiration of the Inspection Period, Seller shall have obtained from Ground
Lessor and Las Encinas Hospital, a California corporation, a written waiver of
the ROFR or said parties shall be deemed to have waived the ROFR pursuant to the
terms thereof.

7.2 Failure of Any Purchaser’s Closing Condition. Subject to Section 6.7, any of
Purchaser’s Closing Conditions is not satisfied at Closing (a “Purchaser’s
Closing Condition Failure”), and Seller fails to cure such condition failure
within five (5) days after written notice is delivered by Purchaser to Seller
(excepting a failure to deliver Seller’s Closing Deliveries at Closing for which
there shall be no notice or cure period) then Purchaser shall have the right
(unless such Purchaser’s Closing Condition Failure was within the discretion or
control of Purchaser), in Purchaser’s absolute discretion, to either
(i) terminate this Agreement by providing written notice to Seller, in which
case the Deposit shall be refunded to Purchaser in accordance with
Section 3.2.4, and the Parties shall have no further rights or obligations under
this Agreement, except as set forth herein below and except with respect to
those which expressly survive such termination, or (ii) waive the Purchaser’s
Closing Condition and complete the transactions set out herein, in which event
Seller shall have no liability for any Purchaser’s Closing Condition Failure. If
Purchaser terminates this Agreement pursuant to clause (i) above and if such
termination is by reason of a Purchaser’s Closing Condition Failure (other than
Sections 7.1.4, 7.1.5, 7.1.6, 7.1.7, 7.1.8, or 7.1.9 (provided Seller shall have
used commercially reasonable efforts to cause the satisfaction of such
Purchaser’s Closing Conditions), then Seller shall reimburse Purchaser for all
reasonable out-of-pocket expenses incurred by Purchaser in connection with the
transactions contemplated by this Agreement (not to exceed $60,000) within
fifteen (15) days following the termination date.

7.3 Seller’s Closing Conditions. Seller’s obligations to close the transactions
contemplated in this Agreement are subject to the satisfaction at or prior to
Closing of the following conditions precedent, as applicable (the “Seller’s
Closing Conditions”):

7.3.1 Receipt of the Purchase Price. Purchaser shall have (i) paid to Seller or
deposited with Escrow Agent with irrevocable written direction to disburse the
same to Seller, the Purchase Price (as allocated, and as adjusted for prorations
pursuant to Article 9) and (ii) delivered irrevocable written direction to
Escrow Agent to disburse the Deposit to Seller.

 

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7.3.2 Purchaser’s Closing Deliveries. All of Purchaser’s Closing Deliveries
shall have been delivered to Seller or deposited with Escrow Agent in the
Closing Escrow, to be delivered to the Seller at the Closing.

7.3.3 Representations and Warranties. The representations and warranties of
Purchaser in this Agreement shall be true and correct in all material respects
as of the Closing (or as of such other date to which such representation or
warranty expressly is made).

7.3.4 Covenants and Obligations. The applicable covenants and obligations of
Purchaser in this Agreement shall have been performed in all material respects.

7.3.5 Adverse Proceedings. No litigation or other court action shall have been
commenced by a third-party seeking to obtain an injunction or other relief from
such court to enjoin the consummation of the transactions described in this
Agreement, and no preliminary or permanent injunction or other order, decree or
ruling shall have been issued by a court of competent jurisdiction or by any
Governmental Authority, would make illegal or invalid or otherwise prevent the
consummation of the transactions described in this Agreement.

7.3.6 Adverse Law. No Applicable Law shall have been enacted that would make
illegal or invalid or otherwise prevent the consummation of the transactions
described in this Agreement.

7.3.7 Ground Lessor Actions. Ground Lessor shall have consented in writing to
the assignment of the Ground Lease by Seller to Purchaser (which consent shall
be in a form reasonably approved by Purchaser). Additionally, prior the
expiration of the Inspection Period, Ground Lessor and Las Encinas Hospital, a
California corporation, shall have provided a written waiver of, or be deemed to
have waived, the ROFR.

7.4 Failure of Seller’s Closing Conditions. If any of Seller’s Closing
Conditions is not satisfied at Closing (a “Seller’s Closing Condition Failure”),
and Purchaser fails to cure such condition failure within five (5) days after
written notice from Seller to Purchaser of such failure (excepting a failure to
deliver the Purchase Price or Purchaser Closing Deliveries at Closing for which
there shall be no cure period) then Seller shall have the right, in Seller’s
absolute discretion (unless such Seller’s Closing Condition Failure was within
the discretion or control of Seller), to either (i) terminate this Agreement by
providing written notice to Purchaser, in which case the Deposit shall be
disbursed to Seller in accordance with Section 3.2.5 (unless such termination is
as a result of Seller’s Closing Condition under Sections 7.3.5 or 7.3.6
(provided Purchaser shall have used commercially reasonable efforts to cause the
satisfaction of such Seller’s Closing Condition), in which case the Deposit
shall be returned to Purchaser) and the Parties shall have no further rights or
obligations under this Agreement, except those which expressly survive the
termination, or (ii) complete the transactions set out herein, without prejudice
to any right or remedy of Seller.

 

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8. CLOSING

8.1 Closing Date. If both Purchaser’s Closing Conditions and Seller’s Closing
Conditions have been satisfied pursuant to Article 7, and subject to any
Purchaser’s or Seller’s extension rights as set forth in this Agreement, the
closing of the transactions described in this Agreement (the “Closing”) shall
occur on the date which is fifteen (15) days following the expiration of the
Inspection Period. The Parties shall accomplish the Closing “by mail” with
Escrow Agent (the “Closing Escrow”).

8.2 Closing Escrow. In connection with closing this transaction via a Closing
Escrow, prior to or at the Closing, the Parties may enter into any supplemental
escrow instructions as may be desired by Seller, Purchaser and Escrow Agent with
respect to the Closing Escrow in form and substance reasonably acceptable to
Seller, Purchaser and the Escrow Agent (together, the “Closing Escrow
Agreement”) which shall not in any event be in contravention of the terms and
conditions of this Agreement. The Closing Escrow Agreement shall provide that
(a) the Purchase Price to be paid by Purchaser pursuant to Section 3.3 shall be
deposited with Escrow Agent, (b) all of the documents required to be delivered
by Seller and Purchaser at Closing pursuant to this Agreement shall be deposited
with Escrow Agent, and (c) at Closing, the Purchase Price (as adjusted pursuant
to Article 9) and the Deposit shall be disbursed to Seller and the documents
deposited into the Closing Escrow shall be delivered to Seller and Purchaser (as
the case may be) pursuant to the Closing Escrow Agreement.

8.3 Seller’s Closing Deliveries. At Closing, Seller shall deliver or cause to be
delivered to Purchaser, or deposited with Escrow Agent in the Closing Escrow to
be delivered to Purchaser at Closing, or (with the approval of Purchaser, acting
reasonably) otherwise to be delivered or made available to Purchaser upon
Closing, all of the following documents, each of which shall have been duly
executed by the Seller and acknowledged (if required), and other items, set
forth in this Section 8.3 (the “Seller’s Closing Deliveries”), as follows:

8.3.1 Closing Certificate. A closing certificate substantially in the form
attached hereto as Exhibit 8.3.1.

8.3.2 Deed. A special warranty deed (the “Deed”) with respect to the
Improvements located on the Property (only) substantially in the form attached
hereto as Exhibit 8.3.2, conveying all of such Improvements to Purchaser, free
and clear of all liens restrictions and encumbrances, subject only to Permitted
Exceptions.

8.3.3 Bill of Sale. A Bill of Sale with respect to the Property substantially in
the form attached hereto as Exhibit 8.3.3, transferring the Fixtures, Personal
Property, Plans and Specifications, Warranties, Intangible Assets, Books and
Records and all other assets, all other assets, rights, and interest of Seller
in and to the Property, not constituting Excluded Assets to Purchaser.

8.3.4 Assignment and Assumption of Ground Lease and Tenant Leases. For the
Ground Lease, an Assignment and Assumption of Ground Lease in substantially the
form attached hereto as Exhibit 4.2.5 and for each of the Tenant Leases, an
Assignment and Assumption of Tenant Leases in substantially the form attached
hereto as Exhibit 8.3.4 transferring Seller’s interest as landlord thereunder to
Purchaser.

 

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8.3.5 Assignment and Assumption of Facility Contracts and Licenses and Permits.
An Assignment and Assumption of Facility Contracts and Licenses and Permits with
respect to the Property substantially in the form attached hereto as Exhibit
8.3.5, assigning the Facility Contracts and Licenses and Permits to Purchaser;

8.3.6 Assignment and Assumption of Intellectual Property. An Assignment and
Assumption of Intellectual Property with respect to the Property substantially
in the form attached hereto as Exhibit 8.3.6 assigning the Intellectual Property
to Purchaser.

8.3.7 Title Requirements. Such agreements, affidavits or other documents as may
be reasonably and customarily required by the Title Company from Seller and
reasonably approved by Seller to issue the Title Policy, including an affidavit
from Seller in favor of the Title Company which shall be sufficient to delete
the standard exceptions from the Title Policy. Additionally, Seller agrees to
use commercially reasonable efforts to obtain such other documents as may be
required by the Title Company to issue a Title Policy without exception for the
ROFR as to the sale and purchase contemplated by this Agreement.

8.3.8 Other Declarations. Any transfer tax declarations or other documents
required under Applicable Law in connection with the conveyance of the Assets.

8.3.9 FIRPTA Certificates. An affidavit from Seller with respect to compliance
with the Foreign Investment in Real Property Tax Act (Internal Revenue Code Sec.
1445, as amended) and the regulations issued thereunder and any similar state
tax requirements.

8.3.10 Closing Statement. The Closing Statement prepared pursuant to
Section 9.1.

8.3.11 Authority Documents. Such resolutions, and incumbency certificates as
required by the Title Company to evidence the capacity and authority of any
Person signing on behalf of Seller.

8.3.12 Tenant Notices. Executed written notices, to be delivered post-Closing by
Purchaser, from Seller to each tenant under the Tenant Leases advising such
tenants of the transaction.

8.3.13 Holdback Escrow Agreement. A Holdback Escrow Agreement substantially the
form attached hereto as Exhibit 8.3.13 (the “Holdback Escrow Agreement”).

8.3.14 Possession and Keys. Possession of the Property free and clear of all
parties in possession, except tenants in possession pursuant to the Tenant
Leases or as set forth in the Permitted Exceptions, and duplicates of or access
information for all keys, codes and other security devices relating to the
Improvements and the Property in Seller’s possession or control.

 

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8.3.15 Property Related Deliveries. On the Closing Date, (1) originals, or
copies if originals are not available, of the Ground Lease and Tenant Leases;
and (2) in addition, to the extent the foregoing have not heretofore been
delivered to Purchaser, Seller shall cause to be delivered to Purchaser: (i) any
plans and specifications for the Improvements in Seller’s possession or control;
(ii) all unexpired warranties and guarantees which Seller has received in
connection with any work or services performed with respect to, or equipment
installed in, the Improvements; (iii) originals, or copies if originals are not
available, of all Facility Contracts that will be assigned to Purchaser and
remain in effect after Closing; (v) copies of all Licenses and Permits that will
be assigned to Purchaser; (vi) copies of all Books and Records, whether kept in
paper or electronic form; (vii) duplicates of all keys and lock combinations
relating to the Assets and (ix) copies of all other materials necessary for the
continuity of operations at the Property, together with all files, advertising
and promotional information and materials.

8.3.16 Other Documents. Such other documents and instruments as may be
reasonably requested by Purchaser or the Title Company in order to consummate
the transactions described in this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Seller or result in any new or additional obligation, covenant,
representation or warranty of Seller under this Agreement beyond those expressly
set forth in this Agreement).

8.4 Purchaser’s Closing Deliveries. At Closing, Purchaser shall deliver or cause
to be delivered to Seller or deposited with Escrow Agent in the Closing Escrow
to be delivered to Seller all of the following, each of which, to the extent
applicable, shall have been duly executed by Purchaser and acknowledged (if
required), and other items, set forth in this Section 8.4 (the “Purchaser’s
Closing Deliveries”):

8.4.1 Purchase Price. The Purchase Price (as adjusted for prorations pursuant to
Article 9 and with respect to the Deposit) in the form of immediately available
funds delivered by wire transfer, to be paid by Purchaser.

8.4.2 Disbursement Letter. A letter of direction or email to Escrow Agent
directing Escrow Agent to disburse the Deposit to Seller.

8.4.3 Closing Certificate. A closing certificate substantially in the form
attached hereto as Exhibit 8.4.3.

8.4.4 Counterpart Execution Documents. A counterpart of each of the documents
and instruments to be delivered by Seller under Section 8.3 which require
execution by Purchaser;

8.4.5 Other Documents. Such other documents and instruments as may be reasonably
requested by Seller or the Title Company in order to consummate the transactions
described in this Agreement (provided, however, no such additional document
shall expand any obligation, covenant, representation or warranty of Purchaser
or result in any new or additional obligation, covenant, representation or
warranty of Purchaser under this Agreement beyond those expressly set forth in
this Agreement).

 

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9. PRORATIONS AND EXPENSES

9.1 Closing Statement. No later than the day prior to Closing, the Parties shall
jointly prepare or cause the Escrow Agent to prepare prior to Closing a closing
statement (the “Closing Statement”), which shall set forth their best estimate
of the amounts of the items to be adjusted and prorated under this Agreement.
The Closing Statement shall be approved and executed by the Parties at Closing,
and such adjustments and Prorations shall be final with respect to the items set
forth in the Closing Statement, except to the extent any such items shall be
re-prorated after the Closing as expressly set forth in Section 9.2.

9.2 Closing and Other Costs, Adjustments and Prorations. The Closing costs shall
be allocated and other closing adjustments and prorations made between Seller
and Purchaser as follows:

9.2.1 Seller Closing Costs. Seller shall be charged with the following items,
all of which shall be paid by Seller at the Closing, and if and only if the
Closing occurs: (i) costs of removing any lien, assessment or encumbrance
required to be discharged by Seller hereunder in order to convey the Leasehold
Interests as herein provided, including, without limitation, any prepayment
penalties, defeasance costs, or fees incurred in connection therewith;
(ii) legal fees and expenses of Seller; (iii) one-half (1/2) of the Closing fees
charged by the Title Company; (iv) the cost of any title premiums, fees, and
expenses charged by the Title Company for issuance of the Title Commitment and
Title Policy; and (v) such other costs as are typically borne by a seller in the
jurisdiction where the Property are located.

9.2.2 Purchaser Closing Costs. Purchaser shall be charged with the following
items in addition to the Purchase Price payable to Seller at Closing: (i) fees
and expenses of Purchaser’s counsel; (ii) Purchaser’s third-party inspection,
review and other acquisition costs, including, but not limited to, appraisal,
survey, environmental assessment, and property condition assessments; (iii) the
costs or premiums charged by the Title Company to issue any endorsements to the
Title Policy or to upgrade the Title Policy for extended coverage which
Purchaser may request; (iv) one-half (1/2) of the Closing fees charged by the
Title Company; (v) all recording fees for the recording of the Deed and
Assignment and Assumption of Ground Lease; (vi) any mortgage tax, title
insurance fees and expenses for any loan title insurance policies, recording
charges or other amounts payable in connection with any new financing obtained
by Purchaser; and (vii) such other costs as are typically borne by purchasers in
the jurisdiction where the Property are located.

9.2.3 Assessments and Roll-Back Taxes. Certified, confirmed and ratified special
assessments liens due and payable before the Closing Date that relate solely to
period prior to the Closing Date are to be paid by Seller. Seller shall also pay
and be responsible for any “rollback” taxes or retroactively assessed taxes
which arise out of or relate to any prior use of the Property by Seller. All
other special assessment liens due and payable on or after the Closing Date
shall be paid by Purchaser.

 

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9.2.4 Proration of Income and Expenses. All income and expenses (including
prepaid expenses) with respect to the Assets shall be prorated on a daily basis
between Seller and Purchaser (the “Prorations”) as of 11:59:59 p.m. local time
for the Property on the date immediately preceding the Closing Date (the
“Proration Date”). In accordance with the terms of this Section 9.2.4, such
items to be prorated shall include: (a) Rents and other income received by
Seller as of the Proration Date, if any, including prepaid rents; (b) any
amounts prepaid, accrued or due and payable under the Facility Contracts;
(c) utility charges, if any; (d) payments under agreements assigned to
Purchaser, if any; (e) Taxes; and (f) Payments under any leases of personal
property used in connection with the operation of the Property, to the extent
such leases remain in place at Closing.

(a) Any escrow accounts held by any utility companies, and any cash deposits
made by Seller prior to Closing to secure obligations under contracts which will
continue after Closing, shall be either paid to Seller or, if assigned to
Purchaser, Seller shall receive a credit at Closing for any such deposits.

(b) Seller shall receive all income from the Property attributable to the period
prior to the Proration Date and shall, except as otherwise provided for in this
Agreement, be responsible for all expenses of the Property attributable to the
period prior to the Proration Date. In the event Purchaser receives any payment
for rent due for any period prior to the Proration Date or payment of any other
receivable attributable to the period prior to the Proration Date, Purchaser
shall forward such payment to Seller. Payments received from a tenant shall be
allocated first to any current balances due from such party.

(c) Purchaser shall receive all income from the Property attributable to the
period from and after the Proration Date and shall, except as otherwise provided
for in this Agreement, be responsible for all expenses of the Property
attributable to the period from and after the Proration Date. In the event
Seller receives any payment for rent due for any period from and after the
Proration Date, Seller shall forward such payment to Purchaser. In addition, in
the event any Seller has received any pre-paid rent from a tenant for any period
from and after the Proration Date, Seller shall forward such pre-paid rent to
Purchaser.

(d) If the amount of any Taxes prorated hereunder are not ascertainable on the
Closing Date, the proration for such Taxes shall be based on the most recent
available bill; provided, however, that after the Closing, Seller and Purchaser
shall re-prorate the Taxes and pay any deficiency or excess in the original
proration to the applicable Party promptly upon receipt of the actual bill for
the relevant taxable period.

(e) Purchaser shall receive a credit for all security deposits with respect to
Tenant Leases that are not transferred by Seller to Purchaser. Purchaser shall
not receive a credit for any security deposits held by Seller that are
transferred to Purchaser at Closing. Purchaser shall also receive a credit for
any outstanding abated rent due with respect to the Tenant Leases. Purchaser
shall additionally receive a credit for the “Tenant Improvement Allowance” due
to Women’s Clinic of Johnson County, Inc., a Kansas corporation, under the
applicable Tenant Lease, which credit shall be in the amount of thirty-four
thousand dollars ($34,000).

 

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(f) The Parties shall use commercially reasonable efforts to obtain readings for
all utilities as of the Proration Date. If readings cannot be obtained as of the
Closing Date, the cost of such utilities shall be prorated between Seller and
Purchaser by estimating such cost on the basis of the most recent bill for such
service; provided, however, that after the Closing, the Parties shall re-prorate
the amount for such utilities and pay any deficiency in the original Proration
to the applicable Party promptly upon receipt of the actual bill for the
relevant billing period. Seller shall receive a credit for all deposits
transferred to Purchaser or which remain on deposit for the benefit of Purchaser
with respect to such utility contracts.

9.3 Proration Schedule. Seller shall prepare a proposed schedule (the “Proration
Schedule”) including the items listed above and any other items the parties
determine necessary. Such Proration Schedule shall include all applicable income
and expenses with regard to the Property. Seller and Purchaser will use all
reasonable efforts to finalize and agree upon the Proration Schedule at least
two (2)  Business Days prior to Closing.

9.4 Re-Prorations. Any amounts that may become due under this Article 9 shall be
paid at Closing as can best be determined. A post-closing reconciliation of
prorated items shall be made within ninety (90) days after Closing and any
amounts due at that time shall be promptly forwarded to the respective Party in
a lump sum payment. Any additional amounts that may become due after such
determination shall be forwarded at the time they are received. Any amounts due
under this Article 9 which cannot be determined within ninety (90) days after
Closing (such as, for example, fiscal year end real estate taxes) shall be
reconciled as soon as such amounts can be determined. Seller agrees that
Purchaser shall have the right to audit the records of Seller in connection with
any such post-closing reconciliation. Purchaser agrees that Seller shall have
the right to audit the records of Purchaser in connection with any post-closing
reconciliation.

9.5 Cash. All cash on hand, escrow and reserve accounts of Seller, accounts
receivable and accounts payable, indebtedness or liabilities for the period
prior to the Closing Date shall remain the property or responsibility, as
applicable, of Seller. Seller shall be responsible for the payment of all
expenses on account of services and supplies furnished to and for the benefit of
the Assets through and including the day preceding the Closing Date and
Purchaser shall be responsible for the payment of all expenses on account of
services and supplies furnished to and for the benefit of the Assets from and
including the Closing Date.

9.6 Employees. If applicable, Seller will comply with the notice requirements
under the COBRA or any similar federal, state or local legislation with respect
to any Employees terminated by Seller in connection with this transaction. It is
expressly understood and agreed that Purchaser is not and shall not be
responsible or liable, directly or indirectly, for payment of any benefits,
severance liability, compensation, pay or other obligations, of whatever nature,
due or alleged to be due to any Employee of Seller attributable to any time
period up to, upon and after Closing.

9.7 Leasing Costs. Except as set forth in Section 9.2.4(e), Seller agrees to pay
or discharge at or prior to Closing all leasing commissions, costs for tenant
improvements, lease buyout costs, moving allowances, design allowances, legal
fees and other costs, expenses and allowances incurred in order to induce a
tenant to enter into a Lease or Lease renewal or

 

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extension (collectively, “Leasing Costs”) that are due and payable prior to
Closing with respect to Leases in force as of or prior to the Effective Date.
Additionally, as of Closing, Purchaser shall assume Seller’s obligations for
(a) Leasing Costs that are due and payable after Closing with respect to Leases
in force as of or prior to the Effective Date, and (b) Leasing Costs incurred
with respect to Leases and Lease renewals and extensions executed subsequent to
the Effective Date.

10. DEFAULT AND REMEDIES

10.1 Seller’s Default. If, at or any time prior to Closing, Seller fails to
perform in any material respect any of its covenants or obligations under this
Agreement which breach or default is not caused in whole or in part by a
Purchaser’s Default (and, if such failure is other than a failure to deliver
Seller’s Closing Deliveries (for which there shall be no notice or cure period),
Seller fails to cure such condition failure within five (5) days after written
notice of such failure is delivered by Purchaser to Seller) (a “Seller’s
Default”), and no material Purchaser’s Default has occurred which remains
uncured, Purchaser may elect, as its sole and exclusive remedy, to (a) terminate
this Agreement by providing written notice to Seller, in which case the Deposit
shall be refunded to Purchaser in accordance with Section 3.2.4, Seller shall
reimburse Purchaser for all reasonable, actual, third party out-of-pocket
expenses (not to exceed $60,000.00) incurred by Purchaser in connection with the
transactions contemplated by this Agreement within fifteen (15) days following
the termination date, and the Parties shall have no further rights or
obligations under this Agreement, except those which expressly survive such
termination, or (b) waive such default and proceed to Closing without any
reduction in or setoff against the Purchase Price, or (c) obtain a court order
for specific performance. IN NO EVENT SHALL SELLER’S DIRECT OR INDIRECT MEMBERS,
PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR
AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY
LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON
LAW, STATUTE, EQUITY OR OTHERWISE.

10.2 Purchaser’s Default. If at any time prior to Closing, Purchaser fails to
perform in any material respect any of its covenants or obligations under this
Agreement which breach or default is not caused in whole or in part by a
Seller’s Default (and, if such failure is other than a failure to deliver
Purchaser’s Closing Deliveries (for which there shall be no notice or cure
period), Purchaser fails to cure such condition failure within five (5) days
after written notice of such failure is delivered by Seller to Purchaser) (a
“Purchaser’s Default”), and no material Seller’s Default has occurred which
remains uncured, then Seller may elect, as its sole and exclusive remedy, to
(a) terminate this Agreement by providing written notice to Purchaser, in which
case the Deposit shall be disbursed to Seller as liquidated damages in
accordance with Section 3.2.5, and the Parties shall have no further rights or
obligations under this Agreement, except those which expressly survive such
termination or (b) waive such default and proceed to Closing without any
reduction in or setoff against the Purchase Price.

10.3 Liquidated Damages. The Parties acknowledge and agree that if this
Agreement is terminated pursuant to Section 10.2, the damages that Seller would
sustain as a result of such termination would be difficult if not impossible to
ascertain. Accordingly, the Parties agree that

 

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Seller shall retain the Deposit as full and complete liquidated damages (and not
as a penalty) as Seller’s sole and exclusive remedy for such termination;
provided, however, that in addition to the Deposit, Seller shall retain all
rights and remedies under this Agreement with respect to those obligations of
Purchaser which expressly survive such termination. Notwithstanding anything in
this Section 10.3 to the contrary, in the event of Purchaser’s Default or a
termination of this Agreement, Seller shall have all remedies available at law
or in equity in the event Purchaser or any party related to or affiliated with
Purchaser is asserting any claims or right to the Property that would otherwise
delay or prevent Seller from having clear, indefeasible and marketable title to
the Property.

11. RISK OF LOSS

11.1 Casualty. If at any time after the Effective Date and prior to Closing or
earlier termination of this Agreement, the Assets or any portion thereof are
damaged or destroyed by fire or any other casualty ( a “Casualty”), Seller shall
give written notice of each such Casualty to Purchaser promptly after the
occurrence of such Casualty, and if such Casualty caused the Assets and Property
to be damaged or destroyed such that the cost of repair or replacement is
reasonably likely to exceed Five Hundred Thousand and NO/100 Dollars
($500,000.00), Purchaser shall have the right to elect, by providing written
notice to Seller within thirty (30) days after Purchaser’s receipt of Seller’s
written notice of such Casualty, to (a) terminate this Agreement in its
entirety, or (b) proceed to Closing, without terminating this Agreement, in
which case the Seller shall (i) provide Purchaser with a credit against the
Purchase Price in an amount equal to the applicable insurance deductible, and
(ii) transfer and assign to Purchaser all of the Seller’s right, title and
interest in and to all proceeds from all casualty, business interruption, lost
profits, and other applicable insurance policies maintained by Seller with
respect to the Assets, except those proceeds specifically payable in connection
with and allocable to business interruption and lost profits and costs incurred
by Seller for the period prior to the Closing to the extent assignable and if
such proceeds are not assignable, Purchaser shall receive a credit against the
Purchase Price at Closing in an amount equal to the amount of such proceeds. If
Purchaser fails to provide written notice of its election to Seller within such
thirty (30) day time period, then Purchaser shall be deemed to have elected to
proceed to Closing pursuant to clause (b) of the preceding sentence. If the
Closing is scheduled to occur within Purchaser’s thirty (30) day election
period, the Closing Date shall, upon Purchaser’s election, be postponed until
the date which is five (5) Business Days after the expiration of such thirty
(30) day election period. In the event that Purchaser terminates this Agreement
pursuant to this Section 11.1, the Deposit shall be returned to Purchaser. In
the event that Seller proceeds to restore the affected Assets prior to Closing,
such work shall be subject to Purchaser’s approval, not to be unreasonably
withheld, conditioned or delayed.

11.2 Condemnation. If, at any time after the Effective Date and prior to Closing
or the earlier termination of this Agreement, any Governmental Authority
commences any condemnation proceeding or other proceeding in eminent domain with
respect to all or any portion of the Property (a “Condemnation”), Seller shall
give written notice of such Condemnation to Purchaser promptly after Seller
receives notice of such Condemnation, and if such Condemnation would give any
tenant under its Tenant Lease the right to terminate any such Tenant Lease, then
Purchaser shall have the right to elect, by providing written notice to Seller
within thirty (30) days after Purchaser’s receipt of Seller’s written notice of
such Condemnation,

 

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to (i) terminate this Agreement in its entirety or (ii) proceed to Closing,
without terminating this Agreement, in which case Seller shall assign to
Purchaser all of any such Seller’s right, title and interest in all proceeds and
awards from such Condemnation. If Purchaser fails to provide written notice of
its election to Seller within such time period, then Purchaser shall be deemed
to have elected to proceed to Closing pursuant to clause (ii) of the preceding
sentence. If the Closing is scheduled to occur within Purchaser’s thirty
(30) day election period, the Closing shall, upon Purchaser’s election, be
postponed until the date which is five (5) Business Days after the expiration of
such thirty (30) day election period. In the event that Purchaser terminates
this Agreement (or a portion thereof) pursuant to this Section 11.2, the Deposit
shall be returned to Purchaser.

12. SURVIVAL, INDEMNIFICATION AND RELEASE

12.1 Survival. The representations and warranties, covenants and obligations
(including without limitations obligations of defense and indemnification) of
Seller and Purchaser shall survive Closing or termination of this Agreement
until the date which is twelve (12) months after the Closing Date (the “Survival
Period”). Each party shall have the right to bring an action against the other
on the breach of a representation or warranty or covenant hereunder or in the
documents delivered by Seller at the Closing, but only on the following
conditions: (i) the party bringing the action for breach first learns of the
breach after Closing and files such action within the Survival Period, and
(ii) neither party shall have the right to bring a cause of action for a breach
of a representation or warranty or covenant unless the damage to such party on
account of such breach (individually or when combined with damages from other
breaches) equals or exceeds Twenty-Five Thousand and No/100 Dollars ($25,000).
If the threshold set forth in the immediately preceding sentence is met, Seller
shall be liable to indemnify Purchaser for the entire amount of Buyer’s damages
including the initial $25,000.00. Neither party shall have any liability after
Closing for the breach of a representation or warranty or covenant hereunder of
which the other party hereto had actual knowledge as of Closing. Notwithstanding
any other provision of this Agreement, any agreement contemplated by this
Agreement, or any rights which Purchaser might otherwise have at law, equity, or
by statute, whether based on contract or some other claim, Purchaser agrees that
any liability of Seller to Purchaser will be limited to Three Hundred Fifty
Thousand and No/100 Dollars ($350,000). The provisions of this Section 12.1
shall survive the Closing. Any breach of a representation or warranty or
covenant that occurs prior to Closing shall be governed by Article 10.
Notwithstanding the foregoing, the Retained Liabilities of Seller shall not be
subject to the Survival Period.

12.2 Indemnification by Seller. Subject to the limitations set forth in this
Article 12 and any other express provision of this Agreement, Seller shall
indemnify, save, insure, pay, defend and hold harmless Purchaser’s Indemnitees
from and against any Indemnification Loss incurred by any Purchaser’s Indemnitee
to the extent resulting from (i) any breach of any representation or warranty of
Seller in this Agreement, (ii) any breach by Seller of any of its covenants or
obligation under this Agreement, and (iii) any Retained Liabilities.

12.3 Indemnification by Purchaser. Subject to the limitations set forth in this
Article 12, Purchaser shall indemnify, defend and hold harmless Seller’s
Indemnitees from and against any Indemnification Loss incurred by Seller’s
Indemnitee to the extent resulting from (i) any breach of any representation or
warranty of Purchaser in this Agreement, (ii) any breach by Purchaser of any of
its covenants or obligations under this Agreement, and (iii) any Assumed
Liabilities.

 

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12.4 Indemnification Procedure. Notice of Indemnification Claim. If any of
Seller’s Indemnitees or Purchaser’s Indemnitees (as the case may be) (each, an
“Indemnitee”) is entitled to defense or indemnification under any other
provision in this Agreement (each, an “Indemnification Claim”), the Party
required to provide defense indemnification to such Indemnitee (the
“Indemnitor”) shall not be obligated to defend, indemnify and hold harmless such
Indemnitee unless and until such Indemnitee provides written notice to such
Indemnitor promptly after such Indemnitee has actual knowledge of any facts or
circumstances on which such Indemnification Claim is based or a Third-Party
Claim is made on which such Indemnification Claim is based, describing in
reasonable detail such facts and circumstances or Third-Party Claim with respect
to such Indemnification Claim.

12.4.1 Resolution of Indemnification Claim Not Involving Third-Party Claim. If
the Indemnification Claim does not involve a Third-Party Claim and is disputed
by the Indemnitor, the dispute shall be resolved by litigation or other means of
alternative dispute resolution as the Parties may agree in writing.

12.4.2 Resolution of Indemnification Claim Involving Third-Party Claim. If the
Indemnification Claim involves a Third-Party Claim, the Indemnitor shall have
the right (but not the obligation) to assume the defense of such Third-Party
Claim, at its cost and expense, and shall use good faith efforts consistent with
prudent business judgment to defend such Third-Party Claim, provided that
(i) the counsel for the Indemnitor who shall conduct the defense of the
Third-Party Claim shall be reasonably satisfactory to the Indemnitee (unless
selected by Indemnitor’s insurance company, in which case Indemnitee shall have
no such approval rights), (ii) the Indemnitee, at its cost and expense, may
participate in, but shall not control, the defense of such Third-Party Claim,
and (iii) the Indemnitor shall not enter into any settlement or other agreement
which requires any performance by the Indemnitee, other than the payment of
money which shall be paid by the Indemnitor. The Indemnitee shall not enter into
any settlement agreement with respect to the Indemnification Claim, without the
Indemnitor’s prior written consent. If the Indemnitor elects not to assume the
defense of such Third-Party Claim, the Indemnitee shall have the right to retain
the defense of such Third-Party Claim and shall use good faith efforts
consistent with prudent business judgment to defend such Third-Party Claim in an
effective and cost-efficient manner.

12.4.3 Accrual of Indemnification Obligation. Notwithstanding anything to the
contrary in this Agreement, the Indemnitee shall have no right to
indemnification against the Indemnitor for any Indemnification Claim which
(i) does not involve a Third-Party Claim but is disputed by Indemnitor until
such time as such dispute is resolved by written agreement or by a final,
non-appealable order of court of competent jurisdiction or (ii) which involves a
Third-Party Claim until such time as such Third-Party Claim is concluded,
including any appeals with respect thereto in the case of a claim in litigation.

 

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12.5 Holdback. Seller agrees to escrow the sum of $350,000.00 of Seller’s net
closing proceeds with the Escrow Agent (the “Holdback”) as security for the
indemnity obligations hereunder. If no Indemnification Claim has been made six
(6) months following the Closing Date, then Escrow Agent shall release one-half
of the Holdback to Seller. If no Indemnification Claim has been made as of the
end of the first anniversary of the Closing Date, then Escrow Agent shall
release the balance of the Holdback to Seller. Seller, Purchaser and Escrow
Agent shall execute the Holdback Escrow Agreement concerning the Holdback and
the disbursement thereof.

12.6 Acknowledgements Concerning Representations and Warranties.

12.6.1 Acknowledgment by Purchaser. To the extent that any representation or
warranty of Seller made herein is, to Purchaser’s knowledge as of the Closing
Date, inaccurate, then (a) Purchaser shall not be able to seek indemnification
for any damage arising from such inaccurate representation or warranty, (b) any
such representation or warranty by Seller shall be deemed amended to the extent
necessary to make it consistent with Purchaser’s knowledge, and (c) Purchaser
shall be deemed to have waived its right to indemnification with respect to the
breach of such representations or warranties to the extent of Purchaser’s actual
knowledge.

12.6.2 Acknowledgment by Seller. To the extent that any representation or
warranty of Purchaser made herein is, to Seller’s Knowledge as of the Closing
Date, inaccurate, then (a) Seller shall not be able to seek indemnification for
any damage arising from such inaccurate representation or warranty, (b) any such
representation or warranty by Purchaser shall be deemed amended to the extent
necessary to make it consistent with Seller’s Knowledge, and (c) Seller shall be
deemed to have waived its right to indemnification with respect to the breach of
such representations or warranties to the extent of Seller’s actual knowledge.

12.7 Disclaimers by Seller. Except as expressly set forth in this Agreement, it
is understood and agreed that Seller and Seller’s agents or employees have not
at any time made and are not now making, and they specifically disclaim, any
warranties, representations or guaranties of any kind or character, express or
implied, with respect to the Property and Assets, including, but not limited to,
warranties, representations or guaranties as to (a) matters of title (other than
Seller’s special warranty of title to be contained in the Deed),
(b) environmental matters relating to the Property, the Assets or any portion
thereof, including, without limitation, the presence of Hazardous Materials in,
on, under or in the vicinity of the Property or Assets, (c) geological
conditions, including, without limitation, subsidence, subsurface conditions,
water table, underground water reservoirs, limitations regarding the withdrawal
of water, and geologic faults and the resulting damage of past and/or future
faulting, (d) whether, and to the extent to which the Property or Assets or any
portion thereof is affected by any stream (surface or underground), body of
water, wetlands, flood prone area, flood plain, floodway or special flood
hazard, (e) drainage, (f) soil conditions, including the existence of
instability, past soil repairs, soil additions or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any undershoring, (g) the
presence of endangered species or any environmentally sensitive or protected
areas, (h) zoning or building entitlements to which the Property or any portion
thereof may be subject, (i) the availability of any utilities to the Assets or
Property or any portion thereof

 

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including, without limitation, water, sewage, gas and electric, (j) usages of
adjoining property, (k) access to the Assets or Property or any portion thereof,
(l) the value, compliance with the plans and specifications, size, location,
age, use, design, quality, description, suitability, structural integrity,
operation, title to, or physical or financial condition of the Property or any
portion thereof, or any income, expenses, charges, liens, encumbrances, rights
or claims on or affecting or pertaining to the Assets, Property or any part
thereof, (m) the condition or use of the Assets or Property or compliance of the
Assets or Property with any or all past, present or future federal, state or
local ordinances, rules, regulations or laws, building, fire or zoning
ordinances, codes or other similar laws, (n) the existence or non-existence of
underground storage tanks, surface impoundments, or landfills, (o) any other
matter affecting the stability and integrity of the Assets or Property, (p) the
potential for further development of the Assets or Property, (q) the
merchantability of the Assets or Property or fitness of the Assets or Property
for any particular purpose, (r) the truth, accuracy or completeness of any
Seller Disclosure Materials or portion thereof produced or provided by any party
other than Seller, (s) tax consequences, or (t) any other matter or thing with
respect to the Assets or Property.

12.8 Sale “As Is, Where Is”. Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Assets “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent expressly
provided otherwise in this Agreement and any document executed by Seller and
delivered to Purchaser at Closing. Except as expressly set forth in this
Agreement, Purchaser has not relied and will not rely on, and Seller has not
made and is not liable for or bound by, any express or implied warranties,
guarantees, statements, representations or information pertaining to the Assets
or relating thereto (including specifically, without limitation, property
information packages distributed with respect to the Assets) made or furnished
by Seller, or any property manager, real estate broker, agent or third party
representing or purporting to represent Seller, to whomever made or given,
directly or indirectly, orally or in writing. Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that,
except as expressly set forth in this Agreement, it is relying solely on its own
expertise and that of Purchaser’s consultants in purchasing the Assets and shall
make an independent verification of the accuracy of any documents and
information provided by Seller. Purchaser will conduct such inspections and
investigations of the Assets as Purchaser deems necessary, including, but not
limited to, the physical and environmental conditions thereof, and shall rely
upon same. By failing to terminate this Agreement prior to the expiration of the
Inspection Period, Purchaser acknowledges that Seller has afforded Purchaser a
full opportunity to conduct such investigations of the Assets as Purchaser
deemed necessary to satisfy itself as to the condition of the Assets and the
existence or non-existence or curative action to be taken with respect to any
Hazardous Materials on or discharged from the Assets, and will rely solely upon
same and not upon any information provided by or on behalf of Seller or its
agents or employees with respect thereto, other than such representations,
warranties and covenants of Seller as are expressly set forth in this Agreement.
Upon Closing, except as otherwise expressly set forth in this Agreement,
Purchaser shall assume the risk that adverse matters, including, but not limited
to, adverse physical or construction defects or adverse environmental, health or
safety conditions, may not have been revealed by Purchaser’s inspections and
investigations. Purchaser hereby represents and warrants to Seller that:
(a) Purchaser is represented by legal counsel in connection with the transaction
contemplated by this Agreement; and (b) Purchaser is purchasing the Property for
business, commercial, investment or other similar purpose and not for use as
Purchaser’s residence. Purchaser waives any and all rights or remedies it may
have or be entitled to, deriving from disparity in size or from any significant
disparate bargaining position in relation to Seller.

 

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12.9 Seller Released from Liability. Purchaser acknowledges that it will have
the opportunity to inspect the Property and Assets during the Inspection Period,
and during such period, observe its physical characteristics and existing
conditions and the opportunity to conduct such investigation and study on and of
the Property and adjacent areas as Purchaser deems necessary. Except for the
Retained Liabilities and Seller’s express representations, warranties and
covenants contained in this Agreement including those representations and
covenants which expressly survive closing, upon Closing Purchaser shall be
deemed to FOREVER RELEASE AND DISCHARGE Seller from all responsibility and
liability, including without limitation, liabilities and responsibilities for
the lessor’s obligations under the Tenant Leases relating to the physical,
environmental or legal compliance status of the Assets or Property, whether
arising before or after the Effective Date, and liabilities under the
Comprehensive Environmental Response, Compensation and Liability Act Of 1980 (42
U.S.C. Sections 9601 et seq.), as amended (“CERCLA”), regarding the condition,
valuation, salability or utility of the Assets or Property, or its suitability
for any purpose whatsoever (including, but not limited to, with respect to the
presence in the soil, air, structures and surface and subsurface waters, of
Hazardous Materials or other materials or substances that have been or may in
the future be determined to be toxic, hazardous, undesirable or subject to
regulation and that may need to be specially treated, handled and/or removed
from the Property under current or future federal, state and local laws,
regulations or guidelines, and any structural and geologic conditions,
subsurface soil and water conditions and solid and hazardous waste and Hazardous
Materials on, under, adjacent to or otherwise affecting the Property). Except
for the Retained Liabilities and Seller’s express representations, warranties
and covenants contained in this Agreement including those representations and
covenants which expressly survive closing, by Closing this transaction,
Purchaser will be deemed to have WAIVED any and all objections and complaints
(including, but not limited to, federal, state and local statutory and common
law based actions, and any private right of action under any federal, state or
local laws, regulations or guidelines to which the Tenant Property is or may be
subject, including, but not limited to, CERCLA) concerning the physical
characteristics and any existing conditions of the Property, including, without
limitation, the lessor’s obligations under the Leases relating to the physical,
environmental or legal compliance status of the Tenant Property, whether arising
before or after the Effective Date. Except for the Retained Liabilities and
Seller’s express representations, warranties and covenants contained in this
Agreement including those representations and covenants which expressly survive
closing, by Closing this transaction, Purchaser further hereby assumes the risk
of changes in applicable laws and regulations relating to past, present and
future environmental conditions on the Tenant Property and the risk that adverse
physical characteristics and conditions, including, without limitation, the
presence of Hazardous Materials or other contaminants, may not have been
revealed by its investigation.

12.10 Survival. The terms and conditions of this Section 12 shall expressly
survive the Closing. Purchaser acknowledges and agrees that the disclaimers and
other agreements set forth herein are an integral part of this Agreement and
that Seller would not have agreed to sell the Assets to Purchaser for the
Purchase Price without the disclaimers and other agreements set forth above.

 

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13. MISCELLANEOUS PROVISIONS

13.1 Notices.

13.1.1 Method of Delivery. Any notice pursuant to this Agreement shall be given
in writing by (a) personal delivery, (b) reputable overnight delivery service
with proof of delivery, (c) United States Mail, postage prepaid, registered or
certified mail, return receipt requested, or (d) e-mail, sent to the intended
addressee at the address set forth below, or to such other address or to the
attention of such other Person as the addressee shall have designated by written
notice sent in accordance herewith. Any notice so given shall be deemed to have
been given upon receipt or refusal to accept delivery, or, in the case of
e-mail, as of the date of the e-mail, provided that such e-mail is also sent to
the intended addressee by means described in clauses (a), (b) or (c) above.
Unless changed in accordance with the preceding sentence, the addresses for
notices given pursuant to this Agreement shall be as follows:

 

If to Seller:   

MidAmerica Surgery Institute Properties II, LLC

c/o Parr Brown Gee & Loveless

101 South 200 East, Suite 700

Salt Lake City, UT 84111

Attention: Stephen Richards

Telephone No.: (801) 201-5855

E-Mail: slrichards82@gmail.com

with a copy to:   

Parr Brown Gee & Loveless

101 South 200 East, Suite 700

Salt Lake City, Utah 84111

Attention: Barton L. Gertsch, Esq.

Telephone No.: (801) 532-7840

E-Mail: bgertsch@parrbrown.com

If to Purchaser:   

CHP II Partners, LP

c/o CNL Healthcare Properties II, Inc.

450 South Orange Avenue, 14th Floor

Orlando, Florida 32801

Attention: Chief Financial Officer and

General Counsel

Telephone No.: (407) 650-1000

Facsimile No.: (407) 540-2576

E-Mail: kevin.maddron@cnl.com

E-Mail: tracey.bracco@cnl.com

with a copy to:   

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

215 North Eola Drive

Post Office Box 2809

Orlando, Florida 32802

Attention: John D. Ruffier, Esquire and

Richard E. Englebright Jr., Esq.

Telephone No.: (407) 843-4600

E-Mail: john.ruffier@lowndes-law.com

E-Mail: richard.englebright@lowndes-law.com

 

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13.1.2 Receipt of Notices. All Notices sent by a Party (or its counsel as
contemplated below) under this Agreement shall be deemed to have been received
by the Party to whom such Notice is sent upon (a) delivery to the address or
e-mail address of the recipient Party, provided that such delivery is made prior
to 5:00 p.m. (local time for the recipient Party) on a Business Day, otherwise
the following Business Day, or (b) the attempted delivery of such Notice if
(i) such recipient Party refuses delivery of such Notice, or (ii) such recipient
Party is no longer at such address or e-mail address, and such recipient Party
failed to provide the sending Party with its current address or e-mail address
pursuant to Section 13.1.3.

13.1.3 Change of Address. The Parties and their respective counsel shall have
the right to change their respective address or e-mail address for the purposes
of this Section 13.1 by providing a Notice of such change in address or e-mail
address as required under this Section 13.1.

13.1.4 Delivery by Party’s Counsel. The Parties agree that the attorney for a
Party shall have the authority to deliver Notices on such Party’s behalf to the
other Parties hereto.

13.2 Time is of the Essence. Time is of the essence in this Agreement; provided,
however, that notwithstanding anything to the contrary in this Agreement, if the
time period for the performance of any covenant or obligation, satisfaction of
any condition or delivery of any Notice or item required under this Agreement
shall expire on a day other than a Business Day, such time period shall be
extended automatically to the next Business Day.

13.3 Assignment. Neither Purchaser nor Seller shall assign this Agreement or any
interest therein to any Person, without the prior written consent of the other
Party which consent may be withheld in the other Party’s sole discretion, except
however, Purchaser shall have the right to designate any wholly-owned Subsidiary
or any CNL Financial Group-affiliated or sponsored entity to receive title or
may assign this Agreement, in whole or in part, to one or more Affiliates of
Purchaser by providing written notice to Seller no later than three (3) Business
Days prior to Closing. In the event of a split of the interests being conveyed
pursuant to an assignment, Seller agrees to enter into all reasonable and
necessary documentation necessary to memorialize such a transaction.

13.4 Successors and Assigns. This Agreement shall be binding upon the Parties
hereto and their respective heirs and permitted successors, and assigns, each of
whom shall be entitled to enforce performance and observance of this Agreement,
to the same extent as if such heirs, successors, and assigns, were parties,
hereto.

13.5 Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies on any Person other than (i) the Parties and their respective
successors and permitted assigns, and (ii) any Indemnitee to the extent such
Indemnitee is expressly provided any right of defense or indemnification in this
Agreement.

 

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13.6 Rules of Construction. The following rules shall apply to the construction
and interpretation of this Agreement:

13.6.1 Singular words shall connote the plural as well as the singular, and
plural words shall connote the singular as well as the plural, and the masculine
shall include the feminine and the neuter, as the context may require.

13.6.2 All references in this Agreement to particular articles, sections,
subsections or clauses (whether in upper or lower case) are references to
articles, sections, subsections or clauses of this Agreement. All references in
this Agreement to particular exhibits or schedules (whether in upper or lower
case) are references to the exhibits and schedules attached to this Agreement,
unless otherwise expressly stated or clearly apparent from the context of such
reference.

13.6.3 The headings in this Agreement are solely for convenience of reference
and shall not constitute a part of this Agreement nor shall they affect its
meaning, construction or effect.

13.6.4 Each Party and its counsel have reviewed and revised (or requested
revisions of) this Agreement and have participated in the preparation of this
Agreement, and therefore any rules of construction requiring that ambiguities
are to be resolved against the Party which drafted the Agreement or any exhibits
hereto shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto.

13.6.5 The terms “sole discretion” and “absolute discretion” with respect to any
determination to be made a Party under this Agreement shall mean the sole and
absolute discretion of such Party, without regard to any standard of
reasonableness or other standard by which the determination of such Party might
be challenged.

13.7 Severability. If any provision of this Agreement is ultimately determined
to be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, in the event no such limiting construction is
possible, such invalid or unenforceable provision shall be deemed severed from
the Agreement without affecting the validity of any other provision hereof if
the essential provisions of this Agreement for each party remain valid, binding
and enforceable.

13.8 Governing Law, Jurisdiction and Venue. This Agreement shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
Kansas. Purchaser and Seller agree to exclusively submit to the jurisdiction of
Kansas in connection with any claims or controversy arising out of this
Agreement and that venue for such actions shall exclusively be in Johnson
County, Kansas. Seller (for itself and all Seller’s Indemnitees) and Purchaser
(for itself and all Purchaser’s Indemnitees) hereby submit to jurisdiction and
consent to venue in such courts, and waive any defense based on forum non
conveniens, provided that any Party may seek injunctive relief or specific
performance with respect to any of the Assets in the courts of the

 

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State in which such Assets are situated and may incorporate a claim against
Seller of such Assets with respect to any claim for injunctive relief or
specific performance.

13.9 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, ANY
RIGHT THAT EITHER PARTY OR THEIR HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR
ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR IN RESPECT OF ANY COURSE OF
CONDUCT, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS
AGREEMENT.

13.10 Attorneys’ Fees. In connection with any disputes or actions arising out of
the transactions contemplated by this Agreement, or the breach, enforcement or
interpretation of this Agreement, the substantially prevailing party shall be
entitled to recover, from the party not substantially prevailing, all reasonable
costs and attorney, paralegal and expert fees incurred by the substantially
prevailing party before trial, at trial, at retrial, on appeal, at all hearings
and rehearings, and in all administrative, bankruptcy and reorganization
proceedings.

13.11 Incorporation of Recitals Exhibits, and Schedules. The recitals to this
Agreement, and all exhibits and schedules referred to in this Agreement are
incorporated herein by such reference and made a part of this Agreement. Any
matter disclosed in any schedule to this Agreement shall be deemed to be
incorporated in all other schedules to this Agreement.

13.12 No Other Agreements. This Agreement and the agreements to be executed and
delivered in connection therewith set forth the entire understanding and
agreement of the Parties hereto and shall supersede any other agreements and
understandings (written or oral) between the Parties on or prior to the
Effective Date with respect to the transactions described in this Agreement.

13.13 Further Actions. Each of the Parties covenants and agrees to do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, any and all such further acts, instruments, papers and documents as
may be reasonably necessary to carry out and effectuate the intent and purposes
of this Agreement.

13.14 No Waiver. No delay or omission to exercise any right or power accruing
prior to or upon any breach, omission, or failure of performance hereunder shall
impair any such right or power, or shall be construed to be a waiver thereof,
and any such right or power may be exercised from time to time and as often as
may be deemed expedient. In the event of any breach of any provision contained
in this Agreement, thereafter waived by another Party, such waiver shall be
limited to the particular waiving Party and to the particular breach in question
and no other. No waiver or release of any term or provision of this Agreement
shall be established by conduct, custom, or course of dealing, but solely by a
document in writing duly authorized and executed by the waiving or releasing
Party.

 

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13.15 Modifications. No amendment or modification to any terms or provisions of
this Agreement, waiver of any covenant, obligation, breach or default under this
Agreement or termination of this Agreement, shall be valid unless in writing and
executed and delivered by each of the Parties.

13.16 Counterpart and Electronic Execution. A Party may deliver executed
signature pages to this Agreement by e-mail pdf file to any other Party, which
pdf shall be deemed to be an original executed signature page. This Agreement
may be executed in any number of counterparts, each of which shall be deemed an
original and all of which counterparts together shall constitute one agreement
with the same effect as if the Parties had signed the same signature page.

13.17 Required Disclosures. Notwithstanding anything in this Agreement to the
contrary, in order to avoid any potential application of Section 1.6011-4(b)(3)
of the Treasury Regulations, Purchaser and Seller (and each employee,
representative, or other agent of Purchaser and Seller) may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to Purchaser or
Seller relating to such tax treatment and tax structure. For purposes hereof,
“tax structure” means any fact that may be relevant to understanding the federal
income tax treatment of the transaction.

13.18 No Personal Liability. Nothing contained in this Agreement shall be
construed to create or impose any liabilities or obligations and no such
liabilities or obligations shall be imposed on any of the shareholders,
beneficial owners, direct or indirect, officers, directors, trustees, employees
or agents of Seller or Purchaser or their respective Affiliates for the payment
or performance of the obligations or liabilities of Seller or Purchaser.

13.19 Good Faith Efforts. The Parties agree to use commercially reasonable,
good-faith efforts to effectuate the transactions contemplated by this
Agreement.

13.20 Post-Execution Disclosures. The Parties agree that the Party or Parties
charged with providing an exhibit or schedule to this Agreement or
representation or warranty contained in this Agreement may update such exhibits,
schedules, representations and warranties promptly (but in any event within five
(5) Business Days) after any change in condition or state of facts which would
render any such exhibit, schedule, representation or warranty incomplete or
inaccurate. In the event that Seller updates any exhibit, schedule,
representation or warranty during the period commencing on the date which is two
(2) Business Days prior to the expiration of the Inspection Period and ending
upon the expiration of the Inspection Period, the Inspection Period shall be
extended for two (2) Business Days. If Seller updates any exhibit, schedule,
representation or warranty from and after the expiration of the Inspection
Period, Purchaser shall have the right to terminate this Agreement on or before
the date that is (2) Business Days after the date of such update of the exhibit,
schedule, representation or warranty, and such termination shall be treated for
all purposes as a termination by Purchaser prior to the expiration of the
Inspection Period.

13.21 No Recordation. Without the prior written consent of both Seller and
Purchaser, there shall be no recordation of either this Agreement or any
memorandum hereof, or any

 

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affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum or affidavit by a Party without the prior written consent of the
other Party shall constitute a default hereunder by recording Party, whereupon
the non-defaulting Party shall have the remedies set forth in Article 10 hereof.
In addition to any such remedies, the defaulting Party shall be obligated to
execute an instrument in recordable form releasing this Agreement or memorandum
or affidavit, and the Parties obligations pursuant to this Section 13.21 shall
survive any termination of this Agreement as a surviving obligation.

13.22 Discharge of Obligations. Following Closing, each Party shall be deemed to
be in full performance and discharge of every representation and warranty made
by the Parties herein and every agreement and obligation on the part of either
Party to be performed pursuant to the provisions of this Agreement, except those
which are herein specifically stated to survive Closing.

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Signatures on following pages]

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed and
delivered in its name by a duly authorized officer as of the date first set
forth above.

 

SELLER: MIDAMERICA SURGERY INSTITUTE PROPERTIES II, LLC, a Kansas limited
liability company By:   /s/ Stephen L. Richards Name: Stephen L. Richards Title:
Chairman of the Board

[Remainder of page intentionally left blank;

Signatures continue on following page]

Seller Signature Page

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Purchaser: CHP II PARTNERS, LP, a Delaware limited partnership By:   CHP II GP,
LLC, a Delaware limited liability company, its General Partner  

By:

 

CNL Healthcare Properties II, Inc., a

Maryland corporation, its Managing

Member

    By: /s/ Tracey B. Bracco     Name: Tracey B. Bracco     Title: Vice
President

Purchaser Signature Page

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The undersigned hereby joins in the execution of this Agreement for the purposes
of acknowledging and accepting its obligations as Escrow Agent hereunder:

 

ESCROW AGENT:

FIRST AMERICAN TITLE INSURANCE

COMPANY

By:   /s/ Rachael Yenque Name: Rachael Yenque Title: Senior Commercial Closer

Escrow Agent Signature Page