Exhibit 10.5

 

AGREEMENT OF SALE AND PURCHASE

 

FOUNDATION BARIATRIC REAL ESTATE OF SAN ANTONIO, LLLP (SELLER),

 

&

 

DOC-FSH SAN ANTONIO HOSPITAL, LLC (BUYER)

 

PROPERTY:                                                                    
9522 HUEBNER ROAD, SAN ANTONIO, TX

 

EFFECTIVE DATE:                          FEBRUARY 19, 2014

 

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TABLE OF CONTENTS

 

CONTENTS

 

PAGE

 

 

 

 

1.

Agreement to Sell and Purchase

 

1

2.

Purchase Price

 

2

3.

Closing

 

3

4.

Title

 

3

5.

Due Diligence Period

 

4

6.

Disclosure Materials

 

4

7.

Disclaimer

 

4

8.

Representations and Warranties of Seller

 

5

9.

Representations and Warranties of Buyer

 

6

10.

Conditions of Buyer’s Obligations

 

7

11.

Conditions of Seller’s Obligations

 

7

12.

Closing Documents

 

8

13.

Possession

 

9

14.

Prorations and Charges

 

9

15.

Condemnation; Rezoning; Historic Designation

 

9

16.

Default by Buyer

 

10

17.

Default by Seller

 

10

18.

Risk of Loss

 

11

19.

Brokerage

 

11

20.

Operation of the Property Prior to Closing

 

11

21.

Notice

 

12

22.

Indemnities; Waiver and Release

 

13

23.

Further Assurances

 

13

24.

Like Kind Exchanges

 

13

25.

Miscellaneous

 

14

26.

Non-Disclosure

 

15

27.

Attorneys’ Fees

 

15

28.

Waiver of Jury Trial

 

15

29.

Right of First Refusal

 

15

 

 

 

 

EXHIBIT “A”

-

LEGAL DESCRIPTION

EXHIBIT “B”

-

ESCROW AGREEMENT

EXHIBIT “C”

-

NON-FOREIGN PERSON CERTIFICATION

Schedule 1(b)

 

List of Equipment

Schedule 1(c)

 

List of Contract Rights

Schedule 1(f)

 

List of Licenses and Permits

Schedule 6

 

Disclosure Materials

 

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AGREEMENT OF SALE AND PURCHASE

 

THIS AGREEMENT OF SALE AND PURCHASE (this “Agreement”) is made effective as of
the 19th day of February, 2014 (the “Effective Date”) by and between FOUNDATION
BARIATRIC REAL ESTATE OF SAN ANTONIO, LLLP, a Texas limited liability limited
partnership (the “Seller”), and DOC-FSH San Antonio Hospital, LLC, a Wisconsin
limited liability company, or its assignee or nominee (“Buyer”).

 

RECITALS:

 

A.                                    Seller owns in fee simple the certain Real
Property (defined below), together with the improvements located thereon and
certain fixtures and equipment used in connection therewith;

 

B.                                    Buyer desires to purchase the Real
Property pursuant to the terms herein.

 

In consideration of the covenants and provisions contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.                                      Agreement to Sell and Purchase.  Seller
agrees to sell to Buyer, and Buyer agrees to purchase from Seller the Property,
subject to and in accordance with the terms and conditions of this Agreement. 
For the purposes of this Agreement, the term “Property” shall mean and include
the following:

 

(a)                         All of that certain real property legally described
in the attached Exhibit “A”, including, without limitation, the land, buildings,
improvements, fixtures (including, without limitation, the sprinkling, plumbing,
heating, cooling, ventilating, air conditioning, electrical, lighting and other
systems), easements and all other right, title and interest appurtenant and
otherwise relating thereto (collectively, the “Real Property”).

 

(b)                         To the extent assignable by Seller, all of Seller’s
right, title and interest in and to all building tenant leases (the “Leases”),
contracts and other agreements incident to the operation of the business
conducted on the Real Property, including, without limitation, management
contracts, on-site maintenance contracts, janitorial contracts, and leasing
commission agreements; all of which are listed on attached Schedule
1(b) (collectively, the “Contract Rights”).

 

(c)                          All of Seller’s right, title and interest in and to
all preliminary, final and proposed building plans and specifications relating
to the Real Property; and all surveys, structural reviews, grading plans,
topographical maps, architectural drawings and engineering, soils, seismic,
geologic, environmental, and architectural reports, studies, certificates, and
similar documents relating to the Real Property (collectively, the “Records and
Plans”).

 

(d)                         To the extent transferable or assignable by Seller,
all of Seller’s right, title and interest in and to all trade names, licenses,
permits, certificates of occupancy, approvals, dedications, subdivision maps,
and entitlements issued, approved or granted by governmental or
quasi-governmental entities or otherwise relating to the Property; and to the
extent transferable or assignable by Seller, any and all development rights and
other intangible rights, titles, interests, privileges, and appurtenances owned
by Seller and used in connection with the Seller’s

 

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ownership of the Property; all of which are listed on the attached Schedule
1(d) (collectively, the “Licenses and Permits”).

 

2.                                      Purchase Price.  The purchase price for
the Property is Eighteen Million Eight Hundred Fifty-Nine Thousand and 00/100
Dollars ($18,859,000.00) (the “Purchase Price”), payable by Buyer as follows:

 

(a)                         Ten Thousand and 00/100 Dollars ($10,000.00) (the
“Initial Deposit”) by wire transfer payable to First American Title Insurance
Company (“Escrow Agent”), which sum shall be delivered to Escrow Agent within
three (3) business days following the Effective Date.  The Initial Deposit shall
be held in a segregated interest bearing, federally insured account, by Escrow
Agent in accordance with the Escrow Agreement attached hereto as Exhibit “B”
(the “Escrow Agreement”) and this Agreement pending consummation of this
transaction. Any interest earned on the Deposit (as defined below) shall be paid
to Buyer unless Seller shall be entitled to the Deposit by reason of a default
by Buyer, in which case such interest shall be paid to Seller.  Seller’s Federal
Tax I.D. Number is 20-3793948.

 

(b)                         Ten Thousand and 00/100 Dollars ($10,000.00) (the
“Additional Deposit” and, collectively with the Initial Deposit, the “Deposit”)
by wire transfer to the Escrow Agent within three (3) business days following
the satisfactory completion of the Due Diligence Period. The Additional Deposit
shall be held in the same manner and in accordance with the same conditions as
the Initial Deposit pursuant to Section 2(a) hereinabove.  Upon satisfactory
completion of the Due Diligence Period, the Deposit shall become non-refundable,
except in the case of a default by Seller, in which case the Deposit, together
with interest thereon, shall be returned to Buyer. Except in the case of the
payment of the Deposit to Seller at the Closing in accordance with the terms
hereof, Escrow Agent shall not disburse any part of the Deposit without
providing five (5) business days prior written notice of such disbursement to
both Buyer and Seller.

 

(c)                          The balance of the Purchase Price (the Purchase
Price minus the Deposit), subject to adjustments pursuant to this Agreement,
including, but not limited to, those adjustments set forth in Section 14 of this
Agreement, shall be paid to Seller at Closing (as defined below) by Buyer
assuming the existing loan of Seller with Legacy Bank in the amount outstanding
principal balance, accrued interest and late charges, if any, on the Closing
Date and the balance of the Purchase Price in cash by wire transfer of
immediately available federal funds.

 

3.                                      Closing.  Closing (“Closing”) shall be
held on February 14, 2014 (the “Closing Date”); provided, however, Buyer shall
have the right to extend the Closing Date for up to (30) calendar days upon
written notice to Seller.  The Closing shall be an escrow closing with the
Escrow Agent acting as the closing escrow agent. It is agreed that the time of
Closing and the obligation of Seller to deliver the Deed (as defined below) to
Buyer at Closing are of the essence of this Agreement.

 

4.                                      Title.  Buyer has ordered a title
insurance commitment (the “Title Commitment”) from Escrow Agent.

 

(a)                         The Title Commitment shall be prepared in accordance
with the current ALTA Form, or Texas equivalent, with the First American Title
Insurance Company (the “Title Company”, agreeing to issue, upon recording of the
Deed an ALTA owner’s title insurance policy to Buyer (“Title Policy”), and an
ALTA Lender’s title insurance policy, or Texas equivalent, issued to Buyer’s
lender(s), if applicable, in the amount of the Purchase Price insuring title to
the Real Property to be in the condition called for by this Agreement.   Seller
shall cause the Escrow Agent at or prior to Closing to down date the Title
Commitment to the

 

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date and time of the recording of the Deed and provide a “title mark-up” showing
the final form of the title insurance policy to be issued, which mark-up shall
obligate the Escrow Agent to issue the final title insurance policy in such
form.  The title mark-up and Title Policy shall be free from the standard
requirements and exceptions, to the extent removable in Texas, and shall be
subject only to the liens, encumbrances or exceptions reasonably approved by
Buyer.

 

(b)                         Title Defects. Within five (5) business days of
Buyer’s receipt of the latter of the Title Commitment or the Survey (as defined
in Section 5 below), but in no event prior to the expiration of the Due
Diligence Period, Buyer shall object in writing to any condition of title not
satisfactory to Buyer, in Buyer’s sole discretion (hereinafter referred to as a
“Title Defect”). Any items to which Buyer does not object within such five
(5) business day period shall be deemed to be acceptable to Buyer.  If any
objection is made, Seller shall have until prior to Closing in which to exercise
commercially reasonable efforts to correct such Title Defects.  Seller’s
commercially reasonable efforts requirement in this paragraph shall, without
limitation, obligate Seller to cure any and all monetary liens caused by
Seller.  If the Title Defect cannot be corrected prior to Closing despite
Seller’s commercially reasonable efforts, or as otherwise extended by agreement
of Buyer and Seller, Buyer may, at its option (a) declare this Agreement null
and void and the Escrow Agent shall promptly return the Deposit, together with
all accrued interest, to Buyer, or (b) elect to accept such title as Seller is
able to convey and proceed to Closing.  If Buyer fails to notify Seller that
Buyer is terminating this Agreement pursuant to this Section within five
(5) business days after the expiration of the five (5) business day period
described above, Buyer shall be deemed to have selected option (b) in the
previous sentence.

 

5.                                      Due Diligence Period. For the purposes
of this Agreement “Due Diligence Period” shall be the period commencing on the
Effective Date and terminating on the Closing Date.  During the Due Diligence
Period, Seller shall allow Buyer to conduct its inspection and review of the
Property at times convenient to the Seller.  The physical condition and all
other aspects of the Property (including appraisal, environmental, leases,
economic and entitlements) shall meet the approval of Buyer, in Buyer’s sole
judgment and discretion, based upon on-site inspections of the Property, and
other investigations and inquiries made by Buyer or Buyer’s representatives
during the Due Diligence Period including, but not limited to, a review of the
Leases.  If Buyer disapproves the condition or any other aspect of the Property
or this transaction as the result of such due diligence, for any reason or for
no reason at all, Buyer shall notify Seller and the Escrow Agent in writing of
such disapproval prior to the termination of the Due Diligence Period, and this
Agreement shall thereupon be terminated. In that event, the Earnest Money shall
be returned to Buyer and the Escrow Agent shall be authorized to make such
disbursements of the Earnest Money without any further joinder or approval of
Seller or Buyer. If Buyer does not notify Seller and the Escrow Agent in writing
prior to the expiration of the Due Diligence Period that Buyer has disapproved
the Property and elected to terminate this Agreement as herein provided, then
Buyer shall be deemed conclusively to have waived the right to terminate this
Agreement under the provisions of this Section 5.  Seller shall cooperate with
Buyer to make the Property fully accessible to Buyer and Buyer’s consultants for
purposes of Buyer’s inspections and tests during the Due Diligence Period.

 

6.                                      Disclosure Materials.  Seller has
previously provided Buyer with the items listed on Schedule 6 attached hereto
and incorporated by reference herein that are in Seller’s possession or control.
Buyer may request additional information from Seller, and if such additional
information

 

3

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is in Seller’s possession, Seller will make its best good-faith efforts to
provide such information to Buyer.  All materials or information provided by
Seller hereunder are referred to herein as the “Disclosure Materials”. Buyer
understands and agrees that the Disclosure Materials and all material
incorporating same shall be kept in confidence and shall not be revealed to
outside parties other than (i) to the extent such information is otherwise
available in the public domain, (ii) to its agents, representatives, lenders,
investors, principals, affiliates subject to the confidentiality provisions
hereof, or (iii) as otherwise required by law.  Should the proposed transaction
not be completed, Buyer will immediately return to Seller all Disclosure
Materials previously provided to Buyer.

 

7.                                      Disclaimer.  Buyer agrees that, except
as and to the extent provided in the representations and warranties contained in
this Agreement and the Deed, Buyer is purchasing the Property in “AS IS”, “WHERE
IS”, “WITH ALL FAULTS” condition, and without any other warranties,
representations or guarantees, either express or implied, of any kind, nature,
or type whatsoever from, or on behalf of, Seller.  Without in any way limiting
the generality of the immediately preceding sentence, Buyer further acknowledges
and agrees that, in entering into this Purchase Agreement and closing the
transaction contemplated hereunder, except as set forth in Section 8:

 

(a)                         Seller and its affiliates, and their officers,
directors, employees and agents, expressly disclaim, have not made and will not
make, any warranties or representations, express or implied, with respect to the
Property or any portion thereof, the physical condition or repair or disrepair
thereof (whether patent or latent), the value, profitability or marketability
thereof or the title thereto, or of any of the appurtenances, facilities or
equipment thereon.

 

(b)                         Seller and its affiliates, and their officers,
directors, employees and agents, expressly disclaim, have not made and will not
make, any warranties, express or implied, of merchantability, habitability or
fitness for a particular use.

 

(c)                          Buyer has not relied upon any statement or
representation by or on behalf of Seller unless such statement or representation
is specifically set forth in this Purchase Agreement.

 

8.                                        Representations and Warranties of
Seller.  Seller hereby represents and warrants to Buyer as follows:

 

(a)        Seller is a Texas limited liability limited partnership, duly
organized and validly existing under the laws of the State of Texas. Seller has
complete power and authority to enter into this Purchase Agreement and all other
agreements to be executed and delivered by Seller pursuant to the terms and
provisions hereof, to perform its obligations hereunder and thereunder, and to
consummate the transaction contemplated hereby.

 

(b)                         Seller has not received written notice from any
governmental authority of any action, suit or proceeding pending or, to the
knowledge of Seller, threatened in eminent domain or for condemnation against or
affecting the Real Property or any portion thereof or relating to or arising out
of the ownership of the Property, in any court or before or by any federal,
state, county or municipal department, commission, board, bureau or agency or
other governmental instrumentality.

 

(c)                          Seller has not granted and/or entered into any of
first refusal, right to repurchase or option to purchase the Property with or in
favor of any third party, which would or

 

4

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could prevent Seller from consummating the sale of the Property to Buyer
pursuant to this Agreement.

 

(d)                         No proceeding in bankruptcy has ever been instituted
by or against Seller nor has Seller ever made an assignment for the benefit of
creditors.

 

(e)                          No representation, statement or warranty by Seller
contained in this Agreement or in any exhibit or schedule attached hereto
contains or will contain any untrue statements or omits or will omit a material
fact necessary to make the statement of fact therein recited not misleading.

 

(f)                           Neither the execution and delivery of this
Agreement, nor compliance with the terms and conditions of this Agreement by
Seller, nor the consummation of the sale and conveyance of the Property to
Buyer, constitutes or will constitute a violation or breach of the Registration
of a Limited Liability Limited Partnership or the limited liability limited
partnership agreement of Seller, as the same may have been amended from time to
time, or of any agreement or other instrument to which Seller is a party, to
which it is subject or by which it is bound, except the Legacy Bank loan related
to the Property which is being assumed by Buyer.

 

(g)                          The execution and delivery of this Agreement have
been approved by Seller, and no further action is required on the part of Seller
to consummate the transaction contemplated hereby. The person(s) executing this
Agreement on behalf of Seller shall have all requisite authority to execute this
Agreement, and this Agreement, as executed, is valid, legal and binding upon
Seller.  There are no proceedings pending or threatened by or against Seller in
bankruptcy, insolvency or reorganization in any state or federal court.

 

(h)                         There exists no default by Seller under any of the
Leases, nor have any written notices of default been sent to any tenants or
received by Seller relating to any default which, as of the date hereof, remains
uncured or has not been waived, and, to the best knowledge and belief of Seller,
there exists no state of facts which, with the giving of notice or lapse of time
or both, would constitute a default under the Leases or which has given rise to
a current dispute between Seller and the tenants under their respective Leases.

 

Seller agrees that the truthfulness of each of the foregoing representations and
warranties is a condition precedent to the performance by Buyer of its
obligations under this Agreement, and that all of the same are for Buyer’s sole
benefit and reliance.  Upon the breach of any of the representations and
warranties set forth in this Section 8 by Seller, Buyer may terminate this
Agreement, and, as its sole remedy receive back the Deposit, and Buyer shall
have no further obligations hereunder, or Buyer may, at its option, elect to
close the purchase of the Property in accordance with the provisions of this
Agreement, and waive any rights or remedies which Buyer may have by virtue of
the breach of any such representation or warranty.  This Section 8 shall survive
the Closing for a period of six (6) months.

 

9.                                      Representations and Warranties of
Buyer.  Buyer hereby represents and warrants to Seller as follows:

 

(a)                         Buyer is a limited liability company duly organized
and in good standing under the laws of the State of Wisconsin.  Buyer has
complete power and authority to enter into this Agreement and all other
agreements to be executed and delivered by Buyer pursuant to the

 

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terms and provisions hereof, to perform its obligations hereunder and
thereunder, and to consummate the transaction contemplated hereby.

 

(b)                         This Agreement constitutes the legal, valid and
binding obligation of Buyer enforceable in accordance with the terms hereof. 
Neither the execution of this Agreement nor the Closing and the consummation of
the transaction contemplated hereby will constitute a violation or breach by
Buyer of its organizational documents or any applicable laws.

 

(c)                          The consent of any lender or other person or entity
to which Buyer has an obligation is not required in connection with the
execution and delivery of this Agreement by Buyer and the consummation of the
transactions contemplated hereby.

 

(d)                         No proceeding in bankruptcy has ever been instituted
by or against Buyer, nor has Buyer ever made an assignment for the benefit of
creditors.

 

(e)                          That neither Buyer nor any affiliate of Buyer: 
(i) is a Blocked Party; (ii) is owned or controlled by, or is acting, directly
or indirectly, for or on behalf of any Blocked Party; or (iii) has instigated,
negotiated, facilitated, executed or otherwise engaged in this Agreement,
directly or indirectly, on behalf of any Blocked Party.  Buyer shall immediately
notify Seller if any of the foregoing warranties and representations become
untrue during the Term.  For purposes of this Agreement, “Blocked Party” shall
mean any party or nation that (a) is listed on the Specially Designated
Nationals and Blocked Persons List maintained by the Office of Foreign Asset
Control, Department of the U.S. Treasury (“OFAC”) pursuant to Executive Order
No. 13224, 66 Fed. Reg. 49079 (Sept. 24, 2001) or other similar requirements
contained in the rules and regulations of OFAC (the “Order”) or in any enabling
legislation or other Executive Orders in respect thereof (the Order and such
other rules, regulations, legislation or orders are collectively called the
“Orders”) or on any other list of terrorists or terrorist organizations
maintained pursuant to any of the rules and regulations of OFAC or pursuant to
any other applicable Orders (such lists are collectively referred to as the
“Lists”); or (b) has been determined by competent authority to be subject to the
prohibitions contained in the Orders.

 

Buyer agrees that the truthfulness of each of the foregoing representations and
warranties is a condition precedent to the performance by Seller of its
obligations under this Agreement, and that all of the same are for Seller’s sole
benefit and reliance.  Upon the breach of any of the representations and
warranties set forth in this Section 9 by Buyer, Seller may terminate this
Agreement whereupon the Deposit shall be disbursed to Seller and Seller shall be
deemed to have waived all other rights and remedies that Seller may have by
virtue of the breach of any such representation or warranty.  This Section 9
shall survive the Closing for a period of six (6) months.

 

10.                               Conditions of Buyer’s Obligations.  The
obligations of Buyer under this Agreement to purchase the Property from Seller
is contingent on the satisfaction of the following conditions on or before the
Closing (any one of which may be waived in whole or in part by Buyer within each
condition’s time period):

 

(a)        At Closing, all of the representations and warranties by Seller set
forth in this Agreement shall be true and correct in all material respects as
though such representations and warranties were made at and as of Closing.

 

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(b)                         Seller shall have materially performed and complied
with all covenants and agreements contained herein which are to be performed and
complied with by Seller at or prior to the Closing.

 

Unless all of the foregoing conditions contained in this Section 10 are
satisfied and completed prior to or at Closing, Buyer, at its election (in its
sole discretion), may, either:  (i) extend the date for Closing until such
conditions are satisfied, provided that such Closing may not be extended by more
than thirty (30) calendar days without the written agreement of the Seller; or
(ii) terminate this Agreement and have the Deposit refunded together with
accrued interest; or (iii) waive in writing the satisfaction of any such
condition or conditions, in which event this Agreement shall be read as if such
condition or conditions no longer existed.

 

11.                               Conditions of Seller’s Obligations.  The
obligations of Seller under this Agreement contingent on the satisfaction of the
following conditions on or before the Closing (any one of which may be waived in
whole or in part by Seller within each condition’s time period):

 

(a)                         At Closing, all of the representations and
warranties by Buyer set forth in this Agreement shall be true and correct in all
material respects as though such representations and warranties were made at and
as of Closing.

 

(b)                         Buyer shall have materially performed and complied
with all covenants and agreements contained herein which are to be performed and
complied with by Buyer at or prior to the Closing.

 

Unless all of the foregoing conditions contained in this Section 11 are
satisfied and completed prior to or at Closing, Seller, at its election (in its
sole discretion), may, either:  (i) extend the date for Closing until such
conditions are satisfied, provided that such Closing may not be extended by more
than thirty (30) calendar days without the written agreement of the Buyer, or
(ii) terminate this Agreement and have the Deposit released to Seller together
with accrued interest; or (iii) waive in writing the satisfaction of any such
condition or conditions, in which event this Agreement shall be read as if such
condition or conditions no longer existed.

 

12.                               Closing Documents.  At the Closing, in
addition to the documents required under other sections of this Agreement,
Seller shall execute and deliver, as appropriate, the following to Buyer, or
Buyer’s designee(s):

 

(a)                         A special warranty deed to the Real Property,
expressly warranting that the Real Property is good, indefeasible, in fee
simple, duly executed and acknowledged by Seller and in proper form for
recording, (the “Deed”).

 

(b)                         An assignment and assumption of the Leases (“Lease
Assignment”) in form satisfactory to the Buyer and Seller duly executed and
acknowledged, assigning to Buyer all of Seller’s right, title and interest in
and to the Leases with a complete release of Seller and an indemnity in favor of
Seller for pre-closing and post-closing liabilities.

 

(c)                          A Non-foreign Person Certification in the form
attached hereto as Exhibit”C”, as required under Section 1445 of the Internal
Revenue Code.

 

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(d)                     A quitclaim assignment in form and substance mutually
satisfactory to Seller and Buyer, duly executed by Seller, assigning to Buyer
all of Seller’s right, title and interest in and to the Contract Rights,
Licenses and Permits, Records and Plans, Guarantees if any and Warranties and
any other permits, licenses, plans, authorizations and approvals relating to
ownership of the Property.

 

(e)                          A certificate certifying that the representations
and warranties of Seller, as set forth in this Agreement, are true and correct
in all material respects as of the Closing and shall survive Closing for a
period of six (6) months.

 

(f)                           An affidavit of title in favor of the Title
Company, together with such other affidavits as are reasonably required by
Buyer’s title insurer, in the forms used by such title insurance company.

 

(g)                          A owner’s policy of title insurance using the most
current ALTA Policy Form, or Texas equivalent, or a binding, unconditioned
“mark-up” of the Title Commitment, each or either showing title to the Property
to be in the condition required by Section 4 hereof.

 

(h)                         A Closing Statement accurately setting forth the
financial terms of this transaction and a summary of the Purchase Price (the
“Closing Statement”).

 

(i)                             Such other documents as may be reasonably
required to consummate this transaction in accordance with this Agreement.

 

13.                               Possession.  Possession of the Property shall
be given to Buyer at Closing.

 

14.                               Prorations and Charges.

 

(a)                         The building tenants are currently responsible under
the terms of their respective Leases for the payment of all taxes and
assessments on the Real Property and such tenants shall remain responsible for
all real estate taxes and assessments through the day prior to Closing and after
Closing.  Buyer and Seller agree that there shall be no proration at Closing for
real estate taxes and assessments.

 

(b)                         At Closing, Seller shall pay to Buyer all security
deposits under the Leases, together with any interest accrued thereon, as well
as any other funds paid to Seller on account of additional rent items not yet
due and payable by Seller, such as tax and insurance escrows.  Seller shall make
such payment in the form of a credit against the Purchase Price in favor of
Buyer.

 

(c)                          Unless otherwise set forth herein, Buyer and Seller
shall each be solely liable for its own costs and expenses (including attorney
fees) incurred in connection with the preparation of this Agreement and the
preparation for and closing of the contemplated transaction.  Buyer will be
solely responsible for all costs and expenses relating to its due diligence
review of the Property and its financing.  Buyer shall be responsible for the
cost of recording the Deed.  Seller shall be responsible for all transfer taxes
assessed in connection with the transactions contemplated herein. Seller and
Buyer will each be responsible for one-half of any escrow fees.  Seller will be
responsible all recording fees, except the recording fees associated with the
Deed and those recording fees relating to Buyer’s financing, which shall be the
sole responsibility of Buyer).  Seller will be responsible for any abstract
costs to bring the abstract

 

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current.  Buyer will be solely liable for the title insurance premium required
for a standard ALTA title policy, or Texas equivalent, and Buyer will be solely
responsible for any premium associated with any endorsements thereto or
non-standard title coverage.  All costs not specifically allocated herein shall
be allocated in accordance with local custom, as advised by the Escrow Agent.

 

(d)                         All rights, privileges, income, rents, liabilities,
obligations, expenses and costs relating to the assignment and transfer of the
Contract Rights, Records and Plans, Guarantees if any and Warranties and
Licenses and Permits shall be paid by Seller at Closing.

 

15.                               Condemnation; Rezoning; Historic Designation.

 

(a)                         If prior to Closing, Seller receives actual notice
that any such eminent domain or condemnation proceeding is commenced or any
change is made, or proposed to be made to: (i) any portion or all of the
Property; (ii) the current means of ingress and egress to the Property; or
(iii) to the roads or driveways adjoining the Property, Seller agrees
immediately to notify Buyer in writing thereof.  Buyer then shall have the
right, at Buyer’s option, to terminate this Agreement by giving written notice
to Seller prior to Closing.  If Buyer elects to terminate this Agreement
pursuant to the terms set forth in this Section 15, then the Deposit shall be
immediately returned to Buyer together with all accrued interest, Buyer and
Seller shall be released from any further liability hereunder and this Agreement
shall be null and void.  If Buyer does not so terminate this Agreement, Buyer
shall proceed to Closing hereunder as if no such proceeding had commenced and
will pay Seller the full Purchase Price in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in and to any
compensation for such condemnation.  Seller shall not negotiate or settle any
claims for compensation prior to Closing, and Buyer shall have the sole right
(in the name of Buyer or Seller or both) to negotiate for, to agree to, and to
contest all offers and awards.

 

(b)                         If, prior to closing, Seller receives actual notice
that the Real Property (and/or any improvement located thereon) or any portion
thereof is or will be designated as a historic structure or other historic
designation, or is threatened, commenced or finalized, or there is a threatened,
commenced or finalized rezoning of the Real Property, Seller shall promptly
notify Buyer, and Buyer may elect to terminate this Agreement prior to Closing,
in which event the Deposit and all accrued interest thereon shall be returned
forthwith to Buyer, Buyer and Seller shall be released from any further
liability hereunder and this Agreement shall be null and void. If Buyer does not
elect to terminate this Agreement, this Agreement shall remain in full force and
effect and at Closing Seller shall assign to Buyer all Seller’s right, title and
interest in and to any dollars paid by the governmental authority (if any) in
connection with the rezoning of the Real Property or historic designation.

 

16.                               Default by Buyer.  If Buyer, without the right
to do so and in default of its obligations hereunder, fails to complete Closing
as to the Property), or if it is discovered prior to Closing that any of the
representations and warranties set forth in Section 9 are materially untrue or
materially misleading, then Seller shall have the right, as its sole and
exclusive remedy for such failure, to either, (i) terminate this Agreement by
delivering written notice thereof to Buyer on or before the Closing, whereupon
Escrow Agent shall promptly pay over the Deposit to Seller, and the parties
shall have no further liability or obligations to each other except as specified
herein; or (ii) waive such default and proceed to Closing without any increase
in the Purchase Price, or

 

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(iii) Seller may exercise any remedies available to it at law or in equity.  The
parties agree that it would be impracticable and extremely difficult to
ascertain the actual damages suffered by Seller as a result of Buyer’s failure
to complete the purchase of the Property pursuant to this Agreement, and that
under the circumstances existing as of the date of this Agreement, the
liquidated damages provided for in this Section represent a reasonable estimate
of the damages which Seller will incur as a result of such failure.  The parties
acknowledge that the payment of such liquidated damages is not intended as a
forfeiture or penalty under any legal or equitable theory, but is intended to
constitute liquidated damages to Seller.

 

17.                               Default by Seller.  If Seller defaults in the
performance of any obligation contained in this Agreement or, without the right
to do so and in default of its obligations hereunder, fails to complete Closing
as to the Property, or if it is discovered prior to Closing that any of the
representations and warranties set forth in Section 8 are materially untrue or
materially misleading, then Buyer shall have the right, as its sole and
exclusive remedy for such failure, to either (i) terminate this Purchase
Agreement by delivering written notice thereof to Seller, whereupon Escrow Agent
shall promptly return the Deposit to Buyer, and Seller shall reimburse Buyer for
all reasonable, actual, third party out-of-pocket expenses incurred by Buyer in
connection with the transactions contemplated by this Agreement (not to exceed
$100,000),  and the parties shall have no further liability or obligations to
each other except as specified herein; (ii) waive such default and proceed to
Closing without any reduction in or setoff against the Purchase Price; or
(iii) Buyer may exercise any remedies available to it at law or in equity.  The
parties agree that it would be impracticable and extremely difficult to
ascertain the actual damages suffered by Buyer as a result of Seller’s failure
to complete the purchase of the Property pursuant to this Agreement, and that
under the circumstances existing as of the date of this Agreement, the
liquidated damages provided for in this Section represent a reasonable estimate
of the damages which Buyer will incur as a result of such failure.  The parties
acknowledge that the payment of such liquidated damages is not intended as a
forfeiture or penalty under any legal or equitable theory, but is intended to
constitute liquidated damages to Buyer.

 

18.                               Risk of Loss.  Seller shall bear the risk of
all loss or damage to the Property from all causes until Closing.  If at any
time prior to Closing any portion of the Property is destroyed or damaged as a
result of fire or any other casualty whatsoever, Seller shall promptly give
written notice thereof to Buyer and Buyer shall have the right:  (i) to
terminate this Agreement by written notice to Seller, whereupon Escrow Agent
shall return the Deposit (with any accrued interest) to Buyer, and thereafter
this Agreement shall be void and neither party shall have any further rights or
obligations hereunder except as specified herein; or (ii) to proceed with this
Agreement and to notify Seller that, at Buyer’s sole option, Seller either
shall:  (A) use any available insurance proceeds to restore the Property prior
to Closing to its condition as of the Effective Date; or (B) in lieu of
restoration, prior to Closing, clear the site of debris and depositall remaining
insurance proceeds in escrow with Escrow Agent and such funds, together with
interest thereon, shall be disbursed to Buyer at Closing.  All unpaid claims and
rights in connection with any such losses shall be assigned to Buyer at Closing
without in any manner affecting the Purchase Price.

 

19.                               Brokerage.  Buyer represents and warrants to
Seller and Seller represents and warrants to Buyer that each dealt with no
broker, agent, finder or other intermediary in connection with this sale and
purchase. Buyer and Seller hereby agree to indemnify and hold each other
harmless from and against any and all claims, liabilities, costs and expenses,
including, without limitation, reasonable attorneys’ fees, incurred as a result
of any claims that may be made against either party by any person claiming a
commission, brokerage fee or other compensation in consequence of the
transaction evidenced by this Agreement.

 

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20.                               Operation of the Property Prior to Closing. 
Prior to Closing:

 

(a)                         Seller shall comply with all of the obligations of
landlord under the Leases and all other agreements and contractual arrangements
affecting the Property by which Seller is bound.

 

(b)                         Seller shall promptly notify Buyer of Seller’s
receipt of any notice from the building tenants alleging that Seller is in
default of its obligations under any of the Leases or any permit or agreement to
which Seller is a party, affecting the Property, or any portion or portions
thereof.

 

(c)                          From and after the expiration of the Due Diligence
Period, no contract for or on behalf of or affecting the Property shall be
negotiated or entered into by Seller which cannot be terminated by Seller prior
to Closing without charge, cost, penalty or premium.

 

(d)                         From and after the expiration of the Due Diligence
Period until Closing, Seller shall maintain the Contract Rights, Records and
Plans, Guarantees if any and Warranties, and Licenses and Permits in full force
and effect as applicable and shall not terminate, modify or waive any provision
thereof. Seller shall not enter into any new contracts or agreements relating to
the Property without Buyer’s prior written consent.

 

21.                               Notice.  All notices, requests and other
communications under this Agreement shall be in writing and shall be delivered:
(i) in person; or (ii) by registered or certified mail, return receipt
requested; or (iii) by recognized overnight delivery service providing positive
tracking of items (for example, Federal Express); or (iv) by facsimile
transmission (so long as one of methods (i), (ii) or (iii) are simultaneously
utilized) addressed as follows or at such other address of which Seller or Buyer
shall have given notice as herein provided:

 

If intended for Seller:

 

Foundation Bariatric Real Estate of San Antonio, LLLP

14000 N. Portland Ave., Suite 203

Oklahoma City, OK 73134

Attn:                    Robert M. Byers

Fax:                       405-608-1802

 

If intended for Buyer:

 

DOC-FSH San Antonio Hospital, LLC

c/o Physicians Realty L.P.

250 E. Wisconsin Ave., Suite 1900

Milwaukee, WI  53202

Fax:  414-978-6550

 

All such notices, requests and other communications shall be deemed to have been
sufficiently given for all purposes hereof only upon receipt by the party to
whom such notice is sent. Notices by the parties may be given on their behalf by
their respective attorneys.

 

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22.                               Indemnities; Waiver and Release.

 

(a)                         Seller Indemnification. Seller agrees to indemnify
and hold harmless Buyer from and against, and to reimburse Buyer with respect to
any and all claims, demands, causes of action, losses, damages, liabilities,
costs and expenses (including reasonable attorneys’ fees and court costs)
asserted against or incurred by Buyer by reason of or arising out of a breach of
any representation, warranty or covenant of Seller set forth in this Agreement.
Subject to the provisions of the Lease Assignment, the foregoing shall survive
the Closing for a period of six (6) months.

 

(b)                                 Buyer Indemnification. Buyer agrees to
indemnify and hold harmless Seller from and against, and to reimburse Seller
with respect to any and all claims, demands, causes of action, losses, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees and court
costs) asserted against or incurred by Seller by reason of or arising out of a
breach of any representation, warranty or covenant of Buyer set forth in this
Agreement. The foregoing shall survive the Closing for a period of six
(6) months.

 

(c)                                  Mutual Waiver and Release.  Buyer and
Seller, on behalf of their respective affiliates, successors, assigns, heirs,
representatives, agents, independent contractors, and officers, hereby waive,
release, and discharge each other and each of their respective affiliates,
successors, assigns, heirs, representatives, insurers, attorneys, agents,
independent contractors, and officers of and from all claims, counterclaims,
expenses, attorney’s fees, obligations, and liability of any kind whatsoever,
whether such claims were asserted or may have been asserted, whether presently
known or unknown, including, but not limited to claims arising out of or
relating to their relationship to each other prior to the Closing of this
transaction, including, without limitation, their landlord/tenant relationship,
and any actions or omissions, or alleged breach of contract arising between them
prior to the date of this Agreement, and further including, but not limited to,
any claims which were asserted or which may have been asserted by and between
the parties prior to Closing.  Notwithstanding this waiver and release, the
parties retain their rights to enforce the terms of this Agreement.

 

23.                               Further Assurances.  After Closing, at Buyer’s
sole cost and expense, Seller shall execute, acknowledge and deliver, for no
further consideration, all assignments, transfers, deeds and other documents as
Buyer may reasonably request to vest in Buyer and perfect Buyer’s right, title
and interest in and to the Property.

 

24.                               Like Kind Exchanges.  Buyer or Seller may
elect to exchange the Property for other real estate of a like kind in
accordance with Section 1031 of the Internal Revenue Code of 1986 as amended
(the “Code”).  To the extent possible, the provisions of this Section shall be
interpreted consistently with this intent.  To exercise any rights under this
Section, the party electing to exchange the Property shall provide the other
with a written statement stating its intent to enter into an exchange at least
five days prior to Closing.  Either party’s election to exchange, rather than
sell or buy, the Property for other real estate of a like kind shall be at no
cost or liability to the other.

 

25.                               Miscellaneous.

 

(a)                         The “captions” or “headings” in this Agreement are
inserted for convenience of reference only and in no way define, describe or
limit the scope or intent of this Agreement or any of the provisions hereof.

 

(b)                         Neither Buyer nor Seller shall assign this Agreement
or any interest therein without the prior written consent of the other party
which consent may be withheld in the

 

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other party’s sole discretion; provided, however, that no such assignment will
relieve Buyer from any of its duties or obligations under this Agreement.

 

(c)                          This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and permitted
assigns.

 

(d)                         This Agreement, including the exhibits attached
hereto, contains the entire agreement as to the Property between Seller and
Buyer; and there are no other terms, obligations, covenants, representations,
statements or conditions, oral or otherwise, of any kind whatsoever concerning
this sale and purchase.  This Agreement shall not be altered, amended, changed
or modified except in writing executed by the parties hereto.

 

(e)                          This Agreement shall be construed in accordance
with the internal laws of the State of Texas, without giving effect to its
conflicts of laws provisions.

 

(f)                           All parties to this Agreement having participated
fully and equally in the negotiation and preparation hereof, this Agreement
shall not be more strictly construed, or any ambiguities within this Agreement
resolved, against either party hereto.  It is the intent of Buyer and Seller
that this Agreement be binding on both parties and not illusory. Thus, wherever
this Agreement grants Buyer or Seller discretion, which might otherwise make
this Agreement illusory, the party exercising its discretion must act reasonably
according to commercial standards.

 

(g)                          Time is of the essence of this Agreement and Buyer
and Seller hereby agree that the times provided for in this Agreement are
reasonable times for each party to complete its respective obligations.

 

(h)                         This Agreement may be executed or amended in
counterparts, all of which taken together shall constitute one and the same
instrument.

 

(i)                             If any of the terms or conditions contained
herein shall be declared to be invalid or unenforceable by a court of competent
jurisdiction, then the remaining provisions and conditions of this Agreement, or
the application of such to persons or circumstances other than those to which it
is declared invalid or unenforceable, shall not be affected thereby and shall
remain in full force and effect and shall be valid and enforceable to the full
extent permitted by law.

 

(j)                            After the Closing, at the request of Buyer and at
Buyer’s expense, Seller shall make available to Buyer the historical financial
information in Seller’s possession regarding the operation of the Property to
the extent required by Buyer in order to prepare stand-alone audited financial
statements for such operations in accordance with generally accepted accounting
principles, as of the end of fiscal year 2013, and any required subsequent date
or period, and to cooperate (at Buyer’s expense) with Buyer and any auditor
engaged by Buyer for such purpose.

 

26.                               Non-Disclosure.  Seller and Buyer each agree
that it will not issue any press release, advertisement or other public
communication with respect to this Agreement or the transactions contemplated
hereby without the prior written consent of the other party except to

 

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the extent required by law, which consent shall not be unreasonably withheld,
conditioned or delayed.  Seller and Buyer hereby agree to indemnify and hold
harmless the other party in the event that either party fails to comply with the
terms and conditions of this Section 26.  The provisions of this Section 26
shall survive the Closing or any termination of this Agreement

 

27.                               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
prevailing party shall be entitled to recover, from the party not prevailing,
all reasonable out of pocket costs and attorney, paralegal and expert fees
incurred by the prevailing party before trial, at trial, at retrial, on appeal,
at all hearings and rehearings, and in all administrative, bankruptcy and
reorganization proceedings.

 

28.                               Waiver of Jury Trial.  THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT ANY PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS PURCHASE 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.

 

(Signatures contained on following pages.)

 

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IN WITNESS WHEREOF, intending to be legally bound, the parties have caused this
Agreement to be duly executed, under seal.

 

SELLER:

 

 

 

FOUNDATION BARIATRIC REAL ESTATE OF SAN ANTONIO, LLLP,

 

a Texas limited liability limited partnership

 

 

 

By:

BAH, LLC,

 

 

a Delaware limited liability company, its General Partner

 

 

 

 

 

 

 

By:

/s/ Robert M. Byers

 

 

 Robert M. Byers, Manager

 

 

 

 

 

 

 

Date:

2/19/14

 

 

 

 

 

BUYER:

 

 

 

DOC-FSH San Antonio Hospital, LLC,

a Wisconsin limited liability company

 

 

 

By: Physician’s Realty L.P., its Manager

 

 

 

By: Physician’s Realty Trust, its General Partner

 

 

 

 

 

By:

/s/ John T. Thomas

 

 

 John T. Thomas, President and

 

 

 Chief Executive Officer

 

 

 

Date:

2/19/14

 

 

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