Exhibit 10.16

 

AGREEMENT OF SALE AND PURCHASE

 

THIS AGREEMENT OF SALE AND PURCHASE (this “Agreement”) is made as of the
Effective Date (hereinafter defined) by and between 6800 Preston Limited, a
Texas limited partnership (“Seller”) and Physicians Realty L.P., a Delaware
limited partnership or its assigns permitted by Section 9.18 hereof
(“Purchaser”).  In consideration of the agreements contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser hereby agree as follows:

 

RECITALS:

 

WHEREAS, Seller currently owns the Property (as hereinafter defined), and wishes
to sell the Property to Purchaser on the terms herein set forth, and Purchaser
wishes to purchase the Property on the terms herein set forth;

 

NOW, THEREFORE, in consideration of the premises, TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby, acknowledged, and the mutual undertakings of the parties
hereinafter set forth, it is hereby agreed by the parties as follows:

 

ARTICLE I

 

SALE AND PURCHASE

 

1.01                        Sale and Purchase.  Subject to the terms and
provisions of this Agreement, Seller agrees to convey unto Purchaser, and
Purchaser agrees to purchase from Seller, the property located at 6800 Preston
Road (the “Land”) located in the City of Plano, Collin County, Texas, which Land
is more particularly described and/or depicted on Exhibit “A” which is attached
hereto and incorporated herein by reference for all purposes, together with
(i) any and all rights of Seller in and to all rights and appurtenances
pertaining to the Land, including, without limitation, all roads, alleys,
easements, streets and ways adjacent to or serving the Land, strips and gores
and rights of ingress and egress thereto; (ii) any and all rights of Seller in
and to all improvements, structures and fixtures placed, constructed or
installed on the Land (the “Improvements”) (the Land and the Improvements being
sometimes collectively referred to as the “Real Property”); (iii) any and all
rights of Seller in and to all equipment, furnishings, materials, and other
tangible personal property placed or installed on or about the Real Property and
used as part of or in connection therewith, and any and all building and site
plans, construction specifications, prior surveys and similar items pertaining
to the Property (collectively, the “Personal Property”); (iv) all assignable
warranties and guaranties relating to the Real Property or the construction
thereof (collectively, the “Warranties”); (v) all statutory and contract rights
related to the construction, operation, ownership, maintenance, use, leasing,
service or management of the Real Property, and any other agreements which are a
part of the Property (but only to the extent assignable and only to the extent
Seller’s obligations thereunder are expressly assumed by Purchaser pursuant to
this Agreement) (collectively, the “Property Contracts”); and (vi) all of
Seller’s right, title and interest in and to that certain Lease Agreement dated
November 14, 2001, by and between Turner Windham L.L.C. and Meadowbrook Equities
Limited (as duly assigned to Seller) and Lifecare Hospitals of North Texas, L.P.
(“Lifecare”) as tenant, as amended by that certain First Amendment and
Assignment and Assumption of the

 

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Lease dated as of December 7, 2001, that certain Second Amendment to Lease
Agreement dated May 28, 2002, and that certain letter agreement representing the
Third Amendment to the Original Lease, dated June 7, 2012 (as amended the
“Lifecare Lease”), and if applicable, all security deposits, prepaid rentals,
and other refundable deposits and fees collected from the tenant under the
Lifecare Lease and, plus any interest accrued thereon; excluding, however, any
non-refundable deposits or fees paid by tenants to Seller thereunder
(collectively, the “Deposits”).

 

1.02                        Definition of Property.  The Land, Improvements,
Personal Property, Warranties and Property Contracts are sometimes referred to
collectively herein as the “Property.”

 

ARTICLE II

 

CONSIDERATION

 

2.01                        Sale Price.  The sale price (the “Sale Price”) to be
paid by Purchaser to Seller for the sale and conveyance of the Property shall be
payable in full in cash at the Closing and, subject to adjustment for prorations
as herein set forth, shall be the following sum:

 

EIGHTEEN MILLION TWO HUNDRED THOUSAND AND NO/100 DOLLARS

 

($18,200,000.00)

 

2.02                        Earnest Money.  Purchaser shall deposit Earnest
Money (as hereinafter defined) pursuant to this Agreement with First American
Title Insurance Company, Attention: Tammy Mervin, 648 N. Plankinton Avenue,
Suite 410, Milwaukee, Wisconsin 53203, fax 414-224-6188, office 414-203-4181,
tmervin@firstam.com (the “Escrow Agent”) or (the “Title Insurer”), in accordance
with the following provisions:

 

(a)                      Earnest Money.  Not later than three (3) business days
after the Effective Date, Purchaser shall deposit earnest money with the Escrow
Agent in the amount of FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($400,000.00) in
immediately available funds, which sum shall be invested by the Escrow Agent in
an interest-bearing account with a federally insured financial institution
pending disposition thereof in accordance with this Agreement (such sum and the
interest accrued thereon being hereinafter referred to collectively as the
“Earnest Money”).

 

If Purchaser does not terminate this Agreement pursuant to
Section 4.01(b) hereof on or before the expiration of the Feasibility Period,
then the Earnest Money shall be non-refundable after the expiration of the
Feasibility Period, except in the event of Seller’s default or as otherwise
expressly provided herein. If this Agreement is terminated after the expiration
of the Feasibility Period pursuant to any provision hereof for reasons other
than Seller’s default or as otherwise expressly provided herein, all of the
Earnest Money shall thereupon be remitted to Seller.

 

(b)                      Disbursement of Earnest Money.  In the event that the
sale of the Property is consummated as contemplated in this Agreement, then the
Earnest Money shall be

 

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applied to the Sale Price.  In the event that this Agreement is terminated prior
to consummation of the sale of the Property in accordance with this Agreement,
then the Earnest Money shall be delivered as provided herein or as otherwise
directed in writing by Purchaser and Seller.

 

(c)                                  Failure to Deposit Earnest Money.  A
failure by Purchaser to deposit the Earnest Money within the time period
specified above shall be a default by Purchaser hereunder.

 

(d)                                Disbursements of Earnest Money.  The Escrow
Agent shall not disburse the Earnest Money to either party hereto until and
unless either (i) the Escrow Agent has received a notice signed jointly by both
parties or a court order directing such disbursement or (ii) the Escrow Agent
has received a request for such disbursement signed by one of the parties and
has given the other party notice of such request not less than five (5) business
days prior to consummating such disbursement.

 

2.03                       Independent Consideration.  The sum of ONE HUNDRED
AND NO/100 DOLLARS ($100.00) of the Earnest Money is delivered to the Escrow
Agent for delivery by the Escrow Agent to Seller as independent consideration
(the “Independent Consideration”) for the execution of this Agreement by Seller.
The Independent Consideration is being paid to, and shall be retained by, Seller
as additional consideration for this Agreement and not as part of the Sale
Price. The Independent Consideration is deemed earned by Seller as of the
Effective Date and is non-refundable in all events.

 

ARTICLE III

 

TITLE AND SURVEY DOCUMENTS

 

3.01                       Title Commitment.  Seller shall, within twenty (20)
days after the Effective Date, at Seller’s sole cost and expense, cause to be
prepared and furnished to Purchaser a current title commitment (the “Title
Commitment”) issued by the Escrow Agent, effective as of a date which is on or
after the Effective Date, showing Seller as the record title owner of the Land,
by the terms of which the Escrow Agent, as agent for the Title Insurer, agrees
to issue to or for Purchaser a standard Texas form of owner’s policy of title
insurance (the “Title Policy”) at the Closing with respect to the Land in the
amount of the Sale Price, insuring Purchaser’s indefeasible title to the Land to
be good and indefeasible subject to the terms of such Title Policy and the
exceptions specified therein, together with copies of all documents and plats,
if any, which the Title Commitment specifies will be shown as exceptions on the
Title Policy upon issuance, including items listed in Schedule B and Schedule C
of the Title Commitment (the “Title Exception Documents”). The expenses of
obtaining the Title Policy shall be paid by Seller and Purchaser as hereinafter
provided.

 

3.02                       Survey.  Seller has heretofore delivered to Purchaser
a copy of its existing survey of (the “Existing Survey”).  Purchaser may, at
Purchaser’s sole cost and expense, cause the Existing Survey to be updated and
certified to current date (the “Survey”).

 

3.03                       Review of Title and Survey.  Purchaser shall have a
period of time (the “Title Review Period”) ending on the date that is five
(5) days prior to the expiration of the Feasibility Period in which to notify
Seller in writing of any objections Purchaser has to any matters shown

 

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on or in the Title Commitment, the Title Exception Documents or the Survey (or
Existing Survey as the case may be). All objections raised by Purchaser in the
manner herein provided are hereafter collectively called “Objections.” Seller
shall have the option, but not the obligation, to remedy or remove all
Objections (or agree irrevocably in writing to remedy or remove all such
Objections at or prior to the Closing) during the period of time (the “Cure
Period”) ending on the third (3rd) day after Seller’s receipt of notice of such
Objections. Except to the extent that Seller cures, or agrees in writing to
cure, such Objections during the Cure Period, Seller shall be deemed to have
elected not to cure such matters. In the event Seller is, or is deemed to be,
unable or unwilling to remedy or cause the removal of any Objections (or agree
irrevocably to do so at or prior to the Closing) within the Cure Period, then
either (i) this Agreement may be terminated in its entirety by or on behalf of
Purchaser by giving Seller written notice to such effect during the period of
time (the “Termination Period”) ending on the third (3rd) day following the end
of the Cure Period, whereupon the Escrow Agent shall return the Earnest Money to
Purchaser and the Escrow Agent shall be authorized to make such disbursements of
the Earnest Money without any further joinder or approval of Seller or
Purchaser, and thereafter all parties hereto or mentioned herein shall be
released and relieved of further obligations, liabilities or claims hereunder
(except as provided in this Agreement to the contrary); or (ii) any such
Objections may be waived by or on behalf of Purchaser, with Purchaser to be
deemed to have waived such Objections if notice of termination is not given
within the Termination Period.  Any title encumbrances or exceptions which are
set forth in the Title Commitment, the Title Exception Documents or the Survey
(or the Existing Survey) and to which Purchaser does not object on or prior to
the last day of the Title Review Period (or which are thereafter waived or
deemed to be waived by Purchaser) shall be deemed to be permitted exceptions
(collectively, the “Permitted Exceptions”) to the status of Seller’s title to
the Property.

 

Notwithstanding the foregoing, Seller shall remove or cure (a) consensual liens,
judgments or other encumbrances granted by Seller after the Effective Date
without Purchaser’s written consent, (b) any consensual liens granted by Seller
under a deed of trust or other security instrument securing indebtedness of
Seller, (c) any judgements or mechanic’s or materialmens’ liens arising by,
through or under Seller, and (d)  any unpaid ad valorem taxes and special
assessments for any years prior to the year of the Closing (matters described in
(a) through (d) are collectively referred to herein as “Non-Permitted Liens”). 
Notwithstanding anything herein to the contrary, the Permitted Exceptions shall
not include any Non-Permitted Liens.

 

ARTICLE IV

 

FEASIBILITY; PROPERTY CONTRACTS

 

4.01                       Feasibility Study.  Purchaser shall be entitled to
conduct a feasibility study of the Property in accordance with the following
provisions:

 

(a)                                 Feasibility Period.  Purchaser’s feasibility
study of the Property may be conducted during the period of time (the
“Feasibility Period”) commencing on the Effective Date and ending at 5:00 p.m.,
Dallas, Texas time, on September 18, 2013.

 

(b)                                 Feasibility Determination.  The physical
condition and all other aspects of the Property (including appraisal,
environmental, economic and entitlements) shall meet the

 

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approval of Purchaser, in Purchaser’s sole judgment and discretion, based upon
on-site inspections of the Property, and other investigations and inquiries made
by Purchaser or Purchaser’s representatives during the Feasibility Period
including, but not limited to, a review of the Lifecare Lease.  Seller has
heretofore delivered a complete copy of the Lifecare Lease and guaranty thereof,
together with all amendments thereto. If Purchaser disapproves the condition or
any other aspect of the Property or this transaction as the result of such
feasibility study, for any reason or for no reason at all, Purchaser shall
notify Seller and the Escrow Agent in writing of such disapproval prior to the
termination of the Feasibility Period, and this Agreement shall thereupon be
terminated. In that event, the Earnest Money shall be returned to Purchaser and
the Escrow Agent shall be authorized to make such disbursements of the Earnest
Money without any further joinder or approval of Seller or Purchaser. If
Purchaser does not notify Seller and the Escrow Agent in writing prior to the
expiration of the Feasibility Period that Purchaser has disapproved the Property
and elected to terminate this Agreement as herein provided, then Purchaser shall
be deemed conclusively to have waived the right to terminate this Agreement
under the provisions of this Section 4.01(b).  Seller shall cooperate with
Purchaser to make the Property fully accessible to Purchaser and Purchaser’s
consultants for purposes of Purchaser’s inspections and tests during the
Feasibility Period, subject to the terms and conditions of the Lease.

 

(c)                                  Inspection Rights and Indemnity.  Subject
to the terms and conditions of the Lifecare Lease, Seller hereby grants to
Purchaser the right to enter upon the Property at any reasonable time during the
term of this Agreement prior to the Closing to make inspections thereof or for
other purposes incident to Purchaser’s requirements relative to the acquisition
and use of the Property. Purchaser, at any time and from time to time prior to
the Closing, may contract for the services of persons to perform one or more
environmental site audits on the Property for the purpose of determining whether
there exists on the Property any environmental condition which could reasonably
be expected to result in any liability, cost or expense to the owner, occupier
or operator of the Property arising under any state, federal or local law,
rule or regulation relating to hazardous materials.  On request, Purchaser shall
make the results of such audits fully available to Seller, which may at its
election participate under reasonable procedures in the direction of such
audits. The cost of performing such audits shall be paid by Purchaser.  Any
invasive testing shall be subject to Seller’s prior written consent not to be
unreasonably withheld or delayed.  The Property shall be restored substantially
to its present condition after any such tests, at Purchaser’s sole expense.
Purchaser hereby indemnifies Seller against and agrees to defend and hold Seller
harmless from all claims, costs, expenses, injuries, accidents or damage, and
shall repair any physical damage, to or on the Property, caused by Purchaser or
Purchaser’s inspecting agents during Purchaser’s inspections, which obligations
shall survive the Closing and any termination of this Agreement, any other
provision hereof to the contrary notwithstanding; provided, however, Purchaser
shall have no liability for any diminution in value of the Property as a result
of matters or conditions identified during its inspection of the Property and
the materials delivered or made available to Seller. Purchaser’s inspection
activities will be conducted upon reasonable advance notice to Seller and in a
manner which will result in the least possible interference with Lifecare.
Seller shall be entitled to require Purchaser’s agents and representatives to be
accompanied by Seller’s representatives during any inspection of the Property.
In no event shall Purchaser nor any agent or representative of Purchaser be
entitled to enter onto the Property for purposes of making any such inspections
until and unless Seller shall

 

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have been furnished with an appropriate certificate of insurance confirming that
Purchaser or such agent or representative has insurance in full force and effect
covering the activities of such persons on the Property in the amounts described
in that certain Temporary Access License between Seller and Purchaser.

 

(d)                                 Due Diligence Materials.  On or prior to the
Effective Date, Seller shall deliver or cause to be delivered to Purchaser
copies of the items listed on Schedule 4.01(d) attached hereto in Seller’s
possession or control.

 

(e)                                  Estoppel and SNDA.  On or before the
expiration of the Fesibility Period, Seller shall reasonably cooperate in Buyer
seeking to obtain, duly executed originals from LifeCare of: (i) a Subordination
Non-Disturbance and Attornment Agreement (“SNDA”) in the form attached hereto as
Exhiibt “G,” and (ii) a certificate in the form attached hereto as Exhibit “H”
(“Estoppel Certificate”).  If the Estoppel Certificate and SNDA have not been
delivered to Buyer in the required form or in a form otherwise acceptable to
Buyer within the aforesaid time period, then Buyer, at its option and sole
remedy, may terminate this Agreement in accordance with the provisions of
Section 4.01(b) above.

 

(f)                                   Waiver of Right of First Refusal.  On or
before the expiration of the Fesibility Period, Seller shall reasonably
cooperate in Buyer seeking to obtain, a duly executed original from LifeCare
waiving its right of first refusal to purchase the Property set forth in the
LifeCare Lease.  If the waiver has not been delivered to Buyer in the required
form or in a form otherwise acceptable to Buyer within the aforesaid time
period, then Buyer, at its option and sole remedy, may terminate this Agreement
in accordance with the provisions of Section 4.01(b) above.

 

4.02                       Property Contracts.  Purchaser shall not assume any
property management or leasing commission agreements entered into by Seller or
binding Seller and the Property at the Closing.  Seller shall remain solely
liable for such contracts and agreements and shall indemnify, defend and hold
Buyer harmless from and against the claims of any person or party making any
claim in connection with such contracts and agreements.  The provisions of this
Section 4.02 shall survive Closing.

 

ARTICLE V

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

5.01                        Representations, Warranties and Covenants of Seller.

 

(a)                                 Representations and Warranties.  Seller
makes the following warranties and representations that shall be true and
correct as of the Effective Date and on the Closing Date:

 

(1)                                 There is no litigation or proceeding pending
or, to Seller’s knowledge, threatened against or relating to Seller or the
Property.

 

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(2)                                  Seller is a limited partnership duly
organized and validly existing under the laws of the State of its organization
or formation, and Seller is properly authorized to do business in the State in
which the Property is located.  Seller is authorized and permitted to enter into
this Agreement and to perform all covenants and obligations of Seller hereunder,
and Seller’s right to execute this Agreement is not limited by any other
agreements.  The person signing this Agreement has been authorized by Seller to
do so.  The execution and delivery of this Agreement, the consummation of the
transaction described herein and compliance with the terms of this Agreement
will not conflict with, or constitute a default under, any agreement to which
Seller is a party or by which Seller or the Property is bound, or violate any
regulation, law, court order, judgment, or decree applicable to Seller or the
Property.

 

(3)                                 There are no attachments, executions,
assignments for the benefit of creditors, or voluntary or involuntary
proceedings under the Bankruptcy Code, 11 U.S.C. §101, et seq., or under any
other debtor relief laws contemplated by or pending or threatened against
Seller.

 

(4)                                  Seller is not a “foreign person” as that
term is defined in Section 1445 of the Internal Revenue Code of 1986, as
amended, and applicable regulations.

 

(5)                                 No person, corporation, or other entity
except Lifecare has, or on the Closing Date shall have, any right or option
granted by Seller (or any other right or option of which Seller is aware) to
acquire all or any portion of the Property.

 

(6)                                 Seller has not received from any
governmental authority written notice of any violation of any zoning, building,
fire or health code or any other statute, ordinance, rule or regulation
applicable (or alleged to be applicable) to the Property, or any part thereof, 
that have not been disclosed to Purchaser during the Feasibility Period and that
will not have been corrected prior to the Closing solely at Seller’s or
Lifecare’s expense.

 

(7)                                  Seller has all requisite power and
authority to own and operate the Property, to execute and deliver this
Agreement, and to carry out its obligations hereunder and the transactions
contemplated hereby.  This Agreement has been, and the documents contemplated
hereby will be, duly executed and delivered by Seller and constitute Seller’s
legal, valid and binding obligations, enforceable against Seller in accordance
with their terms.  The consummation by Seller of the sale of the Property is not
in violation of, or in conflict with, nor does it constitute a default under,
any term or provision of the organizational documents of Seller, or any of the
terms of any agreement or instrument to which Seller is or may be bound.

 

(8)                                  There are no existing leases, whether oral
or written, agreements of sale, options, rights of first refusal, rights of
first offer, tenancies, licenses or any other claims to possession or use
affecting Seller and the Property, except for the Lifecare Lease.  The LifeCare
Lease is in full force and effect and has not been further amended, modified or
supplemented.  LifeCare is in actual possession in the normal course and, to the
actual knowledge of Seller, is not in default thereunder.  LifeCare has not
asserted any claim of which Seller has notice which would in any way affect the
collection of rent from LifeCare, and no written notice of default or

 

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breach on the part of the landlord under the LifeCare Lease has been received by
Seller or its agents from LifeCare.

 

(b)                                 Covenants.  In order to induce Purchaser to
enter into this Agreement, Seller covenants and agrees as follows:

 

(1)                                  During the term of this Agreement,
(i) Seller shall not in any way affect the condition of the title of the
Property, without the prior written approval of the Purchaser and (ii) Seller
will perform its obligations under the Lifecare Lease, in accordance with good
and prudent business practices.  Seller may not amend, terminate or waive any
right under the Lifecare Lease without Purchaser’s consent.

 

(2)                                 Except as provided above, Seller will not
enter into any contract that will be an obligation affecting the Property after
the Closing, unless such contract has been disclosed to Purchaser during the
Feasibility Period and is of the type that is entered into in the ordinary
course of business and is terminable without cause and without the payment of
any termination penalty on not more than thirty (30) days’ prior notice.

 

(3)                                  Except as provided above, Seller will not,
without the prior written consent of Purchaser, further encumber or permit
encumbrance of the Property in any manner that will survive the Closing.

 

(4)                                 Seller shall promptly give written notice to
Purchaser of the occurrence of any event which affects the truth or accuracy in
any material respect of any representations or warranties made or to be made by
Seller under or pursuant to this Agreement.

 

(c)                                  Survival of Representations and
Warranties.  If any of the foregoing warranties and representations proves to be
untrue or incorrect in any material respect prior to the Closing, Purchaser
shall either: (1) terminate this Agreement by written notice delivered to
Seller, in which event the Earnest Money will be promptly refunded to Purchaser,
and thereafter neither Seller nor Purchaser will have any further duties or
obligations hereunder, except as otherwise expressly provided herein, or
(2) proceed to the Closing, thereby waiving any further claim as to such untruth
or inaccuracy.  The representations and warranties set forth in this Agreement
will be true, accurate and correct in all material respects upon the execution
of this Agreement and on and as of the Closing Date, and will survive the
Closing for a period of six (6) months.

 

5.02                        Representations and Acknowledgments of Purchaser. 
Purchaser hereby represents and acknowledges that:

 

(a)  Except as otherwise provided herein, Purchaser has not relied, and is not
relying, on any information, document, sales brochures, or other literature,
maps or sketches, projections, pro formas, statements, representations,
guarantees, or warranties (whether expressed or implied, or oral or written, or
material or immaterial) that may have been given by, or made by, or on behalf
of, Seller.

 

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(b)  Purchaser has had and will have, pursuant to this Agreement, an adequate
opportunity to make such legal, factual, and other inquiries and investigations
as it deems necessary, desirable, or appropriate with respect to the Property. 
Those inquiries and investigations of Purchaser may include, but are not limited
to, contracts pertaining to the Property, the physical components of all
portions of the Property, the condition of the Property, the existence of any
hazardous substances or organisms on the Property, the state of facts that an
accurate survey and inspection would show, the present and future zoning
ordinances, resolutions, and regulations of the city, county, and state where
the Property is located, and the value and marketability of the Property.

 

(c)  Purchaser is a limited partnership duly organized and validly existing
under the laws of the State of its organization or formation, and Purchaser is
or will be properly authorized to do business in the State in which the Property
is located.  Purchaser is authorized and permitted to enter into this Agreement
and to perform all covenants and obligation of Purchaser hereunder, and
Purchaser’s right to execute this Agreement is not limited by any other
agreements. The person signing this Agreement has been authorized by Purchaser
to do so.  The execution and delivery of this Agreement, the consummation of the
transaction described herein and compliance with the terms of this Agreement
will not conflict with, or constitue a default under, any agreement to which
Purchaser is a party or by which Purchaser or the Property is bound, or violate
any regulation, law, court order, judgment, or decree applicable to Purchaser or
the Property.

 

5.03                        Deceptive Trade Practices-Consumer Protection Act -
Waiver of Consumer Rights.  It is the intent of Seller and Purchaser that the
rights and remedies with respect to the transaction contemplated by this
Agreement shall be governed by legal principles other than the Texas Deceptive
Trade Practices-Consumer Protection Act. Purchaser acknowledges and agrees that
(a) it has knowledge and experience in financial and business matters that
enable it to evaluate the merits and risks of the transaction contemplated by
this Agreement, (b) Purchaser and Seller are not in significantly disparate
bargaining positions with respect to this Agreement, and (c) both Purchaser and
Seller have been represented by legal counsel of independent selection.
Accordingly, Purchaser hereby waives the provisions of Chapter 17, Subchapter E,
Section 17.41-17.63, inclusive (other than Section 17.555, which is not waived)
of the Texas Business and Commerce Code, generally known as the “Texas Deceptive
Trade Practices-Consumer Protection Act,” a law that gives consumers special
rights and protections. After consultation with an attorney of Purchaser’s own
selection, Purchaser voluntarily consents to this waiver.  Purchaser
acknowledges that the attorney with whom Purchaser has consulted was not
directly or indirectly identified, suggested or selected by Seller or an agent
of Seller.

 

5.04                        DISCLAIMER.  OTHER THAN AS EXPRESSLY PROVIDED HEREIN
AND IN THE DOCUMENTS TO BE EXECUTED AT THE CLOSING, THE SALE OF THE PROPERTY IS
MADE ON AN “AS IS, WHERE IS AND WlTH ALL FAULTS” BASIS, AND PURCHASER EXPRESSLY
ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF SELLER, SELLER MAKES NO
WARRANTY OR REPRESENTATION (OTHER THAN AS EXPRESSLY PROVIDED HEREIN AND IN THE
DOCUMENTS TO BE EXECUTED AT THE CLOSING), EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY

 

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WARRANTY OF CONDITION, TITLE (OTHER THAN THE SPECIAL WARRANTY OF TITLE WITH
RESPECT TO THE LAND), HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF. PURCHASER
ACKNOWLEDGES THAT THE FOREGOING DISCLAIMER PROVISIONS REPRESENT THE RESULTS OF
SPECIFIC NEGOTIATIONS BETWEEN THE PARTIES AND THAT SELLER WOULD NOT BE WILLING
TO SELL THE PROPERTY TO PURCHASER FOR THE SALE PRICE AND ON THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT UNLESS SUCH DISCLAIMER PROVISIONS WERE
INCLUDED IN THIS AGREEMENT. THE FOREGOING DISCLAIMER PROVISIONS SHALL SURVIVE
THE CLOSING AND SHALL, AT THE ELECTION OF SELLER, BE REPEATED IN THE DEED AND
OTHER INSTRUMENTS EXECUTED AND DELIVERED BY SELLER AT THE CLOSING.

 

ARTICLE VI

 

CLOSING

 

6.01                         Closing Date and Time.  Provided that all of the
conditions of this Agreement shall have theretofore been satisfied, the closing
(the “Closing”) of the purchase and sale of the Property shall be conducted at
the offices of the Escrow Agent (or at such other location as shall be mutually
agreeable to Seller and Purchaser) at 10:00 a.m., Dallas, Texas time, on or
before ten (10) days after expiration of the Feasibility Period or on such
earlier date as Purchaser shall designate by at least five (5) days advance
notice to Seller, but in no event later than September 27, 2013.  The date on
which the Closing actually occurs is referred to herein as the “Closing Date.”

 

6.02                        Seller’s Closing Matters.  At the Closing, Seller
shall do the following:

 

(a)                                 Special Warranty Deed.  Execute, acknowledge
and deliver to Purchaser a special warranty deed (the “Deed”) substantially in
the form attached hereto as Exhibit “C” conveying to Purchaser good and
indefeasible title in fee simple to the Real Property, subject only to the
Permitted Exceptions;

 

(b)                                Bill of Sale.  Execute and deliver to
Purchaser a blanket conveyance, bill of sale and assignment (the “Bill of Sale”)
substantially in the form attached hereto as Exhibit “D” conveying, transferring
and assigning to Purchaser title to all Personal Property, Warranties and
Property Contracts;

 

(c)                                 Assignment of Leases.  Execute and deliver
to Purchaser an assignment and assumption of leases including, but not limited
to, the Lifecare Lease (the “Assignment of Leases”) substantially in the form
attached hereto as Exhibit “E” assigning all of Seller’s interest in, to and
under the Leases, including the Lifecare Lease and the Deposits;

 

(d)                                 Non-foreign Person Affidavit.  Execute and
deliver an affidavit in form and substance reasonably satisfactory to Purchaser
confirming that Seller is not a foreign person or entity within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended;

 

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(e)                                 Evidence of Authority.  Deliver to Purchaser
such evidence of Seller’s authority to consummate the sale of the Property as
Purchaser or the Escrow Agent may reasonably request;

 

(f)                                  Keys.                 Deliver all keys to
all locks on the Property in the possession of Seller;

 

(g)                                 Other Information.  Deliver all plans,
specifications, mechanical, electrical and plumbing layouts, operating manuals,
and other similar information in the possession of Seller and related to the
Property;

 

(h)                                 Possession of Property.  Deliver possession
of the Property to Purchaser subject to the Leases and the Permitted Exceptions;

 

(i)                                   Other Items.  Execute and/or deliver any
and all other items contemplated by the terms of this Agreement or reasonably
required by Purchaser or its legal counsel or by the Escrow Agent;

 

(j)                                    Title Policy.  Cause the Title Policy to
be issued to or for Purchaser containing only the Permitted Exceptions and the
standard printed exceptions therein, except:

 

(1)                                 the exception relating to restrictions
affecting the Property shall be deleted, except for such restrictions as may be
included in the Permitted Exceptions;

 

(2)                                  the exception relating to discrepancies,
conflicts or shortages in area or boundary lines or any encroachment or
overlapping of improvements that a survey may show shall, if permitted by the
Title Insurer, be amended to read “shortages in area” only, but the additional
premium for such amendment and cost for updated Survey to permit such
endorsement shall be at Purchaser’s sole cost and expense;

 

(3)                                 the exception as to the lien for taxes and
assessments will be limited to the year in which each Closing occurs; and

 

(4)                                  any exception for “parties in possession”
will be limited to the rights of tenants, as tenants only, pursuant to the
Leases.

 

(k)                                 Tenant Notification Letter.  Execute and
deliver to Purchaser a letter (the “Tenant Notification Letter”) dated as of the
Closing Date, in the form attached hereto Exhibit “F” evidencing the assumption
by Purchaser of the landlord’s duties and obligations under the Lifecare Lease,
accruing on or after the Closing Date, and, immediately after the Closing, the
Title Company shall deliver each such Tenant Notification Letter to Purchaser,
and Purchaser shall deliver each such Tenant Notification Letter to the
applicable tenant; and

 

(l)                                    Leases.  Original copies, or conforming
copies, of all Leases and contracts affecting the Property

 

6.03                        Purchaser’s Closing Matters.  At the Closing,
Purchaser shall do the following:

 

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(a)                                 Sale Price.  Deliver the Sale Price to the
Escrow Agent by Federal Reserve System wire transfer or other immediately
available good funds;

 

(b)                                Evidence of Authority.  Deliver such evidence
of authority to close the purchase of the Property pursuant to this Agreement as
the Escrow Agent reasonably requests;

 

(c)                                  Assignment of Leases.  Execute and deliver
to Seller the Assignment of Leases;

 

(d)                                 Tenant Notification Letter.  Execute and
deliver to Seller the Tenant Notification Letter; and

 

(e)                                  Other Items.  Execute, acknowledge where
required and/or deliver any and all other items contemplated by the terms of
this Agreement or reasonably required by Seller or its legal counselor by the
Escrow Agent.

 

6.04                       Closing Costs.  Any escrow fee and expenses charged
by the Escrow Agent shall be paid equally by Seller and Purchaser. Seller shall
pay (a) all costs for title curative matters it agreed to undertake; and (b) its
share of the prorations described below. Purchaser shall pay; (a) all basic
premium costs for the Title Policy, with Purchaser to pay for any modifications
or endorsements (including, without limitation, the additional premium for
modifying the printed survey exception, if requested by Purchaser); (b) the cost
of recording the Deed for the Real Property; (c) all costs for the updated
Survey; and (d) its proportionate share of the prorations described below. Each
party shall be responsible for the payment of its own attorneys’ fees incurred
in connection with this Agreement and all other expenses which such party
incurs. Additionally, any expenses, charges and fees of the Closing, not
specifically allocated herein or incurred by a specific party, shall be borne by
the parties in accordance with general custom in Dallas County, Texas, or, if no
such custom exists, shall be borne equally between the parties.

 

6.05.                     Prorations.  Prorations shall be made as follows on
the Closing Date:

 

(a)                                 Current Ad Valorem Taxes.  As real and
personal property ad valorem taxes pertaining to the Property are payable by
Lifecare pursuant to the Leases, there shall be no proration of the same.

 

(b)                                 Other Taxes and Assessments.  Except as
otherwise provided in subsection (a) above, all special taxes or assessments to
the Closing Date (excluding installments due after the Closing Date with respect
to special assessments which are payable in installments) and all ad valorem
taxes for periods prior to the tax year in which the Closing occurs not payable
by Lifecare shall be paid in full by Seller on or before Closing.

 

(c)                                 Utilities Charges and Deposits.  Water and
sewer service charges, and charges for all other utilities, if any, including,
without limitation, steam, electricity and gas are payable by Lifecare and shall
not be prorated..

 

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(d)                                Leasing Costs.  Seller agrees to pay or
discharge at or prior to the Closing all leasing commissions under any leasing
commission agreements, costs for tenant improvements, legal fees and other costs
and expenses (collectively, “Leasing Costs”) that are due with respect to the
Leases.

 

(e)                                 Deposits.  The amount of Deposits paid under
the Leases and not theretofore applied, shall be credited to Purchaser against
the Sale Price on the Closing Date.  Purchaser shall assume at the Closing the
obligation to pay the Deposits, to the extent that such Deposits are credited to
Purchaser at the Closing. Seller shall give Purchaser written notice prior to
applying any Deposits to past due rents or any other tenant default after the
Effective Date.

 

(f)                                   Post-Closing Adjustments.  Seller shall,
on or before the Closing, furnish to Purchaser and the Escrow Agent all
information reasonably available to Seller which is necessary to compute the
foregoing prorations. To the extent possible, the amount of any adjustment
described in this section shall be estimated and paid at the Closing based upon
the best information available to Purchaser and Seller at the time, and shall be
adjusted as soon thereafter as may be reasonably practicable when final billings
are available or when such amounts may be determined with reasonable certainty.
The foregoing obligations shall survive the Closing for a period of three
(3) months, any other provision hereof to the contrary notwithstanding.

 

6.06.                     Indemnifications.  Except as otherwise provided
herein, Seller shall pay all costs and liabilities relating to the Property that
arise out of or are attributable to the period of Seller’s ownership of the
Property prior to the Closing Date not payable by Lifecare pursuant to the
Lifecare Lease, and shall indemnify, defend and hold harmless Purchaser from
such costs and liabilities and from all reasonable attorney’s fees expended by
Purchaser in connection therewith.  Except as otherwise provided herein,
Purchaser shall pay all costs and liabilities relating to the Property that
arise out of or are attributable to the period from and after the Closing Date
not payable by Lifecare pursuant to the Lifecare Lease, and shall indemnify,
defend and hold harmless Seller from such costs and liabilities and from all
reasonable attorney’s fees expended by Seller in connection therewith.  The
terms and provisions of this Section shall survive the Closing.

 

ARTICLE VII

 

REMEDIES

 

7.01                        Purchaser’s Remedies.  In the event that Seller
fails or refuses to comply with its obligations hereunder, Purchaser not being
in default hereunder, the following options shall be available to be exercised
by or on behalf of Purchaser, as Purchaser’s sole and exclusive remedies: (a) to
terminate this Agreement by giving Seller timely written notice of such election
prior to or at the Closing, and thereupon this Agreement shall terminate, and
Purchaser shall be entitled to the immediate return of the Earnest Money, and
all parties hereto or mentioned herein shall be relieved and released of all
further obligations, claims and liabilities hereunder; (b) to waive, prior to or
at the Closing, the applicable objection or condition and proceed to close the
transaction contemplated hereby in accordance with the remaining terms hereof;
or (c) to enforce specific performance of Seller’s obligations under this
Agreement; provided, however, that any such action for specific performance must
be instituted, if at all, within thirty (30) days after the

 

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breach or alleged breach by Seller and, if such action is not so instituted
within such period of time, then Purchaser shall be deemed conclusively to have
waived the right to institute such action and to have elected to pursue the
other remedies provided hereinabove; and provided further, however, that no
action for specific performance may be instituted by Purchaser against Seller
with respect to any breach of a representation and warranty or failure of any
condition due to any cause not reasonably within the control of Seller,
Purchaser’s remedies in such event being limited to termination or waiver as
described above.

 

7.02                        Seller’s Remedies.  If Purchaser fails or refuses to
perform Purchaser’s obligations pursuant to this Agreement, Seller not being in
default hereunder, Seller shall be entitled to the following remedies (a) to
enforce specific performance of Purchaser’s obligations under this Agreement; or
(b) to terminate this Agreement by written notice to Purchaser and the Escrow
Agent, in which event Seller shall be entitled to receive the proceeds of the
Earnest Money as liquidated damages and not as a penalty in full satisfaction of
Seller’s claim (including attorneys’ fees) against Purchaser. Seller and
Purchaser agree that it is difficult to determine the actual amount of Seller’s
damages arising out of Purchaser’s breach but the amount of the Earnest Money is
a liquidated amount of damages to which the parties have agreed in a sincere
effort to make the damages certain.

 

ARTICLE VIII

 

RISK OF LOSS

 

8.01                         Risk of Loss in General.  Risk of loss until the
Closing Date shall be borne by Seller and Purchaser as provided in the Leases
while the same is still in force and, if applicable, thereafter borne as
provided below.  In the event that damage, loss or destruction of the Property
or any part thereof, by fire or other casualty, or through condemnation or sale
in lieu thereof, occurs prior to the actual closing of the transaction
contemplated hereby, then Purchaser shall have the option to:  (i) close the
transaction contemplated hereby and take an assignment of and receive in cash
all insurance or condemnation proceeds payable as a result of such casualty loss
or condemnation, and receive a credit against the Sale Price in the amount of
any deductible applicable to such insurance coverage, or, if such proceeds are
not made available by the holder or holders of any indebtedness secured by liens
against the Property, to receive a credit against the Sale Price in the amount
of such casualty loss or condemnation proceeds together with any deductible
amount applicable thereto; or (ii) terminate this Agreement by giving Seller
timely written notice of such election prior to or at the Closing, and thereupon
this Agreement shall terminate, and Purchaser shall be entitled to the immediate
return of the Earnest Money, and all parties hereto or mentioned herein shall be
relieved and released of all further obligations, claims and liabilities
hereunder except as otherwise expressly provided herein.

 

ARTICLE IX

 

MISCELLANEOUS

 

9.01                        Escrow Instructions.  In the event either party
hereto becomes entitled to the Earnest Money as liquidated damages, or upon
termination of this Agreement in accordance with its terms, Purchaser and Seller
covenant and agree to deliver a letter of instruction to the Escrow

 

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Agent directing the disbursement of the Earnest Money to the party entitled
thereto. In the event either party hereto fails or refuses to sign or deliver
such an instruction letter when the other party is entitled to a disbursement of
the Earnest Money, then the party so failing or refusing to sign or deliver such
letter shall pay, upon the final order of a court with appropriate jurisdiction
stating that such other party is entitled to a disbursement of the Earnest
Money, all reasonable attorneys fees and court costs incurred by the party so
entitled to the Earnest Money in connection with its recovery thereof.

 

9.02                        Integration.  This Agreement constitutes the entire
and final expression of the agreement of the parties hereto and supersedes all
prior agreements and understandings of the parties, either oral or written,
including, without limitation, that certain Temporary Access License, and that
certain confidentiality agreement dated June 3, 2013 (collectively, the “Other
Agreements”). There are no other agreements, oral or written, between the
parties regarding the Property.

 

9.03                        Modification.  This Agreement can be amended only by
written agreement signed by the parties hereto and by reference made a part
hereof.

 

9.04                        Binding Effect.  This Agreement shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
heirs, personal representatives, successors and assigns.

 

9.05                       Notices.  Any notice, communication, request, demand,
reply or advice (severally and collectively referred to as “Notice”) in this
Agreement required or permitted to be given, made or accepted must be in
writing. Notice may, unless otherwise specifically provided herein, be given or
served (a) by depositing the same in a receptacle regularly maintained and
serviced by the United States Postal Service, postage pre-paid, registered or
certified, and addressed to the party to be notified, with return receipt
requested, (b) by delivering the same to such party, or an agent of such party,
in person or by commercial delivery service or (c) by regular mail, facsimile
transmission (with electronic confirmation), telegram or other commercially
reasonably means (including electronic mail) addressed to the party to be
notified. Notice sent by registered or certified mail in the manner hereinabove
described shall be effective on the earlier of the third (3rd) business day
after such deposit or the actual receipt thereof.  Notice given by delivery
service shall be effective upon delivery or attempted delivery and notice given
in any other manner shall be effective only if and when received by the party to
be notified.  For the purposes of Notice, the addresses of the parties shall,
until changed as provided below, be as follows:

 

Seller:                                                                                                             
6800 Preston Limited

Attention:  James M. Eidson, Jr.

3116 Purdue Avenue

Dallas, Texas 75225

Telephone:  (214) 559-6100

Facsimile:   1 (866) 823-3111

Email: jeidson@precedentllc.com

 

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With a copy to:                                                            Bryan
C. Birkeland

Jackson Walker L.L.P.

901 Main Street, Suite 6000

Dallas, Texas 75202

Telephone: (214) 953-5934

Facsimile:   (214) 661-6605

Email: bbirkeland@jw.com

 

Purchaser:                                                                                      
Physicians Realty L.P.

250 East Wisconsin, Suite 1900

Milwaukee, WI 53202-6613

Attention: John Thomas

Telephone: (414) 978-6494

Facsimile:

Email: jtt@docreit.com

 

With a copy to:                                                           
Bradley D. Page

Davis & Kuelthau

111 E. Kilbourn Avenue, Suite 1400

Milwaukee, WI 53202-6613

Telephone: (414) 225-1424

Facsimile:  (414) 278-3624

Email: bpage@dkattorneys.com

 

The parties hereto shall have the right from time to time to change their
respective addresses, and each shall have the right to specify as its address
any other address within the United States of America, by not less than ten
(10) days prior written notice to the other party.

 

9.06                       Brokerage Commissions.  Seller represents to Buyer
that Seller has engaged the brokerage services of Newmark Grubb Knight Frank
(“Broker”) and that Seller shall be solely responsible for all fees, costs,
commissions and any and all other amounts due and payable to Broker, which shall
be paid to Broker per the terms of Exclusive Listing Agreement dated May 21,
2013.  Seller shall deliver an executed broker’s lien affidavit from Broker on
or before Closing.  Additionally, each party shall indemnify, defend and hold
the other party harmless from and against the payment of any commission to any
person or entity claiming, or alleging to claim, by, through or under the
indemnifying party.

 

9.07                        Time.  Time is of the essence in all things
pertaining to the performance of this Agreement.

 

9.08                        Survival of Obligations.  Except as expressly
provided in this Agreement, the terms, conditions, warranties, representations,
obligations and rights set forth herein shall be deemed terminated at the time
of the Closing, and shall merge into the various documents executed and
delivered at the time of the Closing.

 

9.09                        APPLICABLE LAW; VENUE.  THE CONSTRUCTION,
ENFORCEMENT, INTERPRETATION AND VALIDITY OF THIS AGREEMENT SHALL BE GOVERNED BY

 

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THE LAWS OF THE STATE OF TEXAS. THE OBLIGATIONS OF THE PARTIES ARE PERFORMABLE,
AND VENUE FOR ANY LEGAL ACTION ARISING OUT OF THIS AGREEMENT SHALL LIE, IN
DALLAS COUNTY, TEXAS.

 

9.10                        Headings.  The headings which have been used
throughout this Agreement have been inserted for convenience of reference only
and do not constitute matters to be construed in interpreting this Agreement.

 

9.11                        Terminology.                  Words of any gender
used in this Agreement shall be held and construed to include any other gender
and words in the singular number shall be held to include the plural, and vice
versa, unless the context requires otherwise. The words “herein,” “hereof,”
“hereunder” and other similar compounds of the word “here” when used in this
Agreement shall refer to the entire Agreement and not to any particular
provision or section. The words “include” and “including” shall be deemed to be
followed by the phrase “without limitation” unless otherwise qualified.

 

9.12                        Construction of Agreement.  This Agreement shall not
be construed more strictly against one party than against the other merely by
virtue of the fact that it may have been prepared by legal counsel for one of
the parties, it being recognized that both Seller and Purchaser have contributed
substantially and materially to the preparation of this Agreement.

 

9.13                        Severability.  If anyone or more of the provisions
of this Agreement, or the applicability of any such provision to a specific
situation, shall be held invalid or unenforceable, such provision shall be
modified to the minimum extent necessary to make it or its application valid and
enforceable, and the validity and enforceability of all other provisions of this
Agreement and all other applications of any such provision shall not be affected
thereby.

 

9.14                        Counterpart Execution.  This Agreement may be
executed in several counterparts, each of which shall be fully executed as an
original and all of which together shall constitute one and the same
instrument.  A facsimile or electronically transmitted signature shall be
regarded for all purposes as the original.

 

9.15                       Further Acts.  In addition to the acts recited in
this Agreement to be performed by Seller and Purchaser, Seller and Purchaser
agree to perform or cause to be performed, without cost or expense, at the
Closing or after the Closing any and all such further acts as may be reasonably
necessary to consummate the transactions contemplated hereby.

 

9.16                       Litigation.  In the event of litigation between the
parties with respect to the Property, this Agreement, the Earnest Money, the
performance of the obligations hereunder or the effect of a termination under
this Agreement, the losing party shall pay all costs and expenses incurred by
the prevailing party in connection with such litigation, including reasonable
attorneys’ fees and expenses and court costs (which prevailing party need not
recover damages).

 

9.17                       Benefit.  This Agreement is for the benefit only of
the parties hereto or their respective heirs, personal representatives,
successors and permitted assigns, and no other person

 

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or entity shall be entitled to rely hereon, receive any benefit here from or
enforce against any party hereto any provision hereof.

 

9.18                       Assignment.  Purchaser may not assign this Agreement
without the consent of the Seller, which consent Seller shall have no obligation
to grant. Notwithstanding the foregoing, Purchaser may assign or otherwise
transfer its interest under this Agreement to a wholly owned affiliate of
Purchaser or to entity formed and owned by Purchaser or under common ownership
control by Purchaser’s parent for the purpose of taking title to the Property. 
In the event of any such assignment, Purchaser shall not be relieved of any
duties and obligations hereunder.

 

9.19                       Form of Instruments.  Except as otherwise provided
herein, all instruments to be furnished hereunder shall be prepared in such form
as is reasonably acceptable to the party receiving such instrument.

 

9.20                        Tenders of Performance.  All tenders of performance
shall be made at the Closing and at or before the time specified for the
Closing.

 

9.21                        Legal Holidays and Business Days.  If any date
herein set forth for the performance of any obligations by Seller or Purchaser
or for the delivery of any instrument or notice as herein provided should be on
a Saturday, Sunday or legal holiday, the compliance with such obligations or
delivery shall be deemed acceptable on the next business day following such
Saturday, Sunday or legal holiday. As used herein, the term “legal holiday”
means any federal holiday for which financial institutions or post offices in
Dallas, Texas are generally closed for observance thereof. As used herein, the
term “business day” shall mean a day which is not a Saturday, Sunday or legal
holiday.

 

9.22                       Nonwaiver.  Except as otherwise specifically provided
for hereunder, no party shall be deemed to have waived any of its rights
hereunder unless such waiver is in writing and signed by the party waiving such
right. Except as otherwise specifically provided for hereunder, no delay or
omission by any party in exercising any right shall operate as a waiver of such
right or of any other right.  A waiver on anyone occasion shall not be construed
as a bar to, or waiver of, any right or remedy on any future occasion. Except as
otherwise provided in Sections 7.01 and 7.02 hereof, all rights and remedies,
whether evidenced hereby or by any other agreement, instrument or paper, will be
cumulative and may be exercised separately or concurrently.

 

9.23                       Like-Kind Exchange.  Either party shall have the
right to elect to consummate the transaction contemplated by this Agreement by
means of a tax-free, like-kind exchange. It is understood that any such exchange
shall be accomplished through a separate intermediary and that the other party
would not be obligated to step into the chain of title of the replacement
property or to incur any cost or assume any obligation in connection with any
such exchange beyond the costs and obligations directly related to the
acquisition of the Property, and in no event shall the Closing be postponed due
to any such like-kind exchange.

 

9.24                       Effective Date; Acceptance.  The effective date (the
“Effective Date”) of this Agreement shall be the date that the Escrow Agent
receives and receipts one or more counterparts of this Agreement which have been
signed by both Seller and Purchaser.  If the

 

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Effective Date has not occurred on or before August 22, 2013, neither party
shall have any obligations to the other except as expressly survive pursuant to
the Other Agreements.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts (each of which is to be deemed an original for all purposes) by the
parties hereto on the respective date appearing below each party’s signature to
be effective on the Effective Date.

 

 

SELLER:

 

 

 

6800 Preston Limited, a Texas limited partnership

 

By Plano DeSoto Partners I, LLC,

 

Its sole general partner

 

 

 

 

 

By:

/s/ James M. Eidson

 

 

James M. Eidson, Jr., Manager

 

 

 

 

Date:

August 21, 2013

 

 

 

 

 

PURCHASER:

 

 

 

Physicians Realty, L.P.,

 

a Delaware limited partnership

 

 

 

By:

/s/ John T. Thomas

 

 

Name:

 

 

 

Title:

President and Chief Executive Officer

 

 

 

 

Date:

August 21, 2013

 

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ESCROW AGENT RECEIPTS

 

The undersigned Escrow Agent acknowledges receipt of this Agreement of Sale and
Purchase and agrees to be bound by the terms of this Agreement this
               day of August, 2013.

 

 

FIRST AMERICAN TITLE

 

INSURANCE COMPANY

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

The undersigned Escrow Agent acknowledges receipt of the Earnest Money this
             day of August, 2013.

 

 

FIRST AMERICAN TITLE

 

INSURANCE COMPANY

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Notice to Escrow Agent. Upon receipt of counterparts of this Agreement of Sale
and Purchase, please deliver a certified copy of a dated and executed copy of
this Agreement to each of the addressees in Section 9.05 hereof.

 

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EXHIBIT “A”

 

PROPERTY DESCRIPTION

 

[g190161ki05i001.gif]

 

--------------------------------------------------------------------------------

 

EXHIBIT “B”

 

INTENTIONALLY OMITTED

 

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EXHIBIT “C”

 

SPECIAL WARRANTY DEED

 

THE STATE OF TEXAS

§

 

 

§

KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF

§

 

 

                                                                        , a
                                                                        
(“Grantor”), for and in consideration of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, has GRANTED, BARGAINED, SOLD, and CONVEYED and by these
presents does GRANT, BARGAIN, SELL, AND CONVEY unto
                                                              , a
                                                                        
(“Grantee”) the real property in                      County, Texas, fully
described in Exhibit A hereto and all improvements located thereon, together
with (i) any and all rights, titles, powers, privileges, easements, licenses,
rights-of-way and interests appurtenant to the land, and (ii) all rights,
titles, powers, privileges, licenses, easements, rights-of-way and interests, if
any, of Grantor, either at law or in equity, in possession or in expectancy, in
and to any land lying in the streets, highways, roads, alleys, rights-of-way or
sidewalks, open or proposed, in front of, above, over, under, through or
adjoining the land and in and to any strips or gores of land estate adjoining
the land described herein (collectively, the “Property”).

 

This Special Warranty Deed and the conveyance hereinabove set forth is executed
by Grantor and accepted by Grantee subject to the matters described in Exhibit B
hereto, to the extent the same are validly existing and applicable to the
Property (collectively, the “Permitted Exceptions”).  This conveyance is also
being made by Grantor and accepted by Grantee subject to taxes for the year
20      , the payment of which Grantee assumes.

 

TO HAVE AND TO HOLD the Property, together with all and singular the rights and
appurtenances thereunto in anywise belonging, unto Grantee, its successors and
assigns forever, and Grantor does hereby bind itself, its successors and
assigns, to WARRANT AND FOREVER DEFEND all and singular the title to the
Property unto the said Grantee, its successors and assigns against every person
whomsoever lawfully claiming or to claim the same or any part thereof by,
through, or under Grantor but not otherwise, subject to the Permitted
Exceptions.

 

GRANTOR AND GRANTEE EXPRESSLY AGREE THAT THE PROPERTY IS SOLD ON AN “AS IS”
BASIS ONLY WITH ALL FAULTS OF ANY KIND, INCLUDING ENVIRONMENTAL (WHETHER ABOVE,
WITHIN OR UNDER THE SUBJECT PROPERTY).  GRANTOR EXPRESSLY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE FITNESS, ENVIRONMENTAL COMPLIANCE,
AREA, CONDITION, QUALITY, QUANTITY, CHARACTER, SIZE, DESCRIPTION,
MERCHANTABILITY OR HABITABILITY OF THE PROPERTY OR OTHERWISE.  GRANTEE WAIVES
ALL WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED.  GRANTEE WILL NOT RELY
ON ANY STATEMENTS, REPRESENTATIONS OR DOCUMENTS EXCEPT BASED ON ITS INDEPENDENT
INVESTIGATION.

 

1

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Grantee acknowledges that Grantor would have required a substantially higher
purchase price if warranties or representations were required, other than as
contained herein, and that the consideration paid as represented by the purchase
price reflects the value of the Property without any representations or
warranties.

 

Grantee represents that it is knowledgeable in commercial real estate matters,
specifically properties similar to the Property.  Grantee represents and
covenants it carefully inspected the Property and consulted with competent
professionals before determining to proceed with the purchase.  Grantee did not
rely on any statements, facts or representations, oral or written or written
materials provided by Grantor to Grantee.  Grantee represents to Grantor that
its purchase of the Property is made with full knowledge of its current
condition, that Grantee has extensively inspected the Property and is fully
familiar with its defects and, considering the foregoing, Grantee desires to
purchase the Property with full knowledge of its condition and defects.

 

Grantee’s address is: 
                                                                                          .

 

EXECUTED to be effective as of the              day
of                              , 2013.

 

 

GRANTOR:

 

 

 

 

 

, a

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

2

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ACKNOWLEDGEMENT:

 

THE STATE OF                     

§

 

§

COUNTY OF

§

 

This instrument was acknowledged before me on the       day of
                            , 2013, by
                                                                      ,
                                                      of
                                                                      , a
                                                      , on behalf of said
                                                                        .

 

 

Notary Public, State of

 

My Commission Expires:

 

EXHIBITS:

 

A - Property Description

B - Permitted Exceptions

 

3

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EXHIBIT “D”

 

BLANKET CONVEYANCE, BILL OF SALE, AND ASSIGNMENT

 

THE STATE OF TEXAS

§

 

 

§

KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF

§

 

 

This BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT (this “Assignment”) is
executed by                                                               , a
                                                                         
(“Seller”), in favor of                                               , a
                                               (“Purchaser”).

 

RECITALS:

 

A.                                    Seller and
                                           (“Original Purchaser”) entered into
that certain Agreement of Purchase and Sale dated as of
                                  , 20     (as amended, the “Contract”), in
which Seller agreed to sell and Original Purchaser agreed to purchase the real
property more particularly described in Exhibit A attached to the Contract (the
“Land”), together with all improvements of any kind and nature located, in, on
or under the Land (the “Improvements” and, together with the Land, collectively,
the “Real Property”).

 

B.                                    Original Purchaser assigned its interest
in the Contract to Purchaser pursuant to that certain Assignment of Agreement of
Purchase and Sale dated as of                           , 20    .

 

C.                                    Pursuant to the Contract, Seller has
agreed to assign to Purchaser all of Seller’s right, title and interest, if any,
in and to the Property (as hereinafter defined).

 

NOW, THEREFORE, for and in consideration of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller hereby agrees as follows:

 

1.                                      Property Defined.  As used herein, the
term “Property” shall mean all of Seller’s right, title and interest in and to
the following property:

 

a.                                      Personal Property.  All equipment,
furnishings, materials, and other tangible personal property placed or installed
on or about the Real Property and used as part of or in connection therewith,
and any and all building and site plans, construction specifications, prior
surveys and similar items pertaining to the Property, including, without
limitation, the items listed on Schedule A attached hereto.

 

b.                                      Warranties.  All assignable warranties
and guaranties relating to the Real Property or the construction thereof.

 

c.                                       Property Contracts.  All statutory and
contract rights related to the construction, operation, ownership, maintenance,
use, leasing, service or management of the

 

1

--------------------------------------------------------------------------------

 

Real Property, and any other agreements which are a part of the Real Property
(but only to the extent assignable), each such contract being listed on Schedule
B attached hereto.

 

2.                                      Assignment.  Seller hereby assigns,
sells and transfers to Purchaser all of Seller’s right, title and interest in
and to the Property.

 

TO HAVE AND TO HOLD the same unto Purchaser, and Purchaser’s successors and
assigns, forever free, clear and discharged of all former grants, charges,
taxes, judgments, mortgages, liens and encumbrances of whatsoever nature,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof.

 

SELLER AND BUYER EXPRESSLY AGREE THAT THE PROPERTY IS GRANTED, SOLD AND CONVEYED
BY SELLER AND ACCEPTED BY BUYER ON AN “AS IS” BASIS ONLY.  BUYER HAS EXAMINED
AND HAS DETERMINED THAT ALL ASPECTS OF THE CONDITION OF THE PROPERTY ARE
SATISFACTORY TO BUYER.  SELLER EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AND
REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE STATE OF THE PROPERTY, ITS AREA,
CONDITION, QUALITY, QUANTITY, CHARACTER, SIZE, DESCRIPTION OR SUITABILITY OR
FITNESS FOR ANY USE OR PURPOSE, WHETHER EXISTING OR CONTEMPLATED, EXCEPT FOR
WARRANTIES OF TITLE AS SPECIFICALLY SET FORTH IN THIS BILL OF SALE AND
ASSIGNMENT OF LEASES AND RENTS AND THE SPECIAL WARRANTY DEED.

 

3.                                      Attorneys’ Fees.  If any action or
proceeding is commenced by either party to enforce its rights under this
Assignment, the prevailing party in such action or proceeding shall be entitled
to recover all reasonable costs and expenses incurred in such action or
proceeding, including reasonable attorneys’ fees and costs, in addition to any
other relief awarded by the court.

 

4.                                      Applicable Law.  This Assignment shall
be governed by and interpreted in accordance with the laws of the State of
Texas.

 

5.                                      Titles and Section Headings.  Titles of
sections and subsections contained in this Assignment are inserted for
convenience of reference only, and neither form a part of this Assignment or are
to be used in its construction or interpretation.

 

6.                                      Binding Effect.  This Assignment shall
be binding upon and inure to the benefit of the parties hereto and their
respective transferees, successors and assigns.

 

2

--------------------------------------------------------------------------------

 

EXECUTED to be effective as of the        day of                             ,
20      .

 

 

SELLER:

 

 

 

                                                                                                      ,
a

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

3

--------------------------------------------------------------------------------

 

ACKNOWLEDGEMENT:

 

THE STATE OF

§

 

§

COUNTY OF

§

 

This instrument was acknowledged before me on the            day
of              , 20      , by
                                                                        ,
                                                      of
                                                                        , a
                                                      , on behalf of said
                                                                        .

 

 

Notary Public, State of

 

 

My Commission Expires:

 

4

--------------------------------------------------------------------------------

 

EXHIBIT “E”

 

ASSIGNMENT AND ASSUMPTION OF LEASES

 

THE STATE OF TEXAS

§

 

 

§

KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF

§

 

 

This ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is entered into by
and between                                                               , a
                                                                        
(“Assignor”), and                                               , a
                                               (“Assignee”).

 

RECITALS:

 

A.                                    Assignor and
                                                   (“Original Assignee”) entered
into that certain Agreement of Purchase and Sale dated as of
                                  , 20       (as amended, the “Contract”), in
which Assignor agreed to sell and Original Assignee agreed to purchase the real
property more particularly described in Exhibit A attached to the Contract,
together with all improvements of any kind and nature located thereon
(collectively, the “Property”).

 

B.                                    Original Assignee assigned its interest in
the Contract to Assignee pursuant to that certain Assignment of Agreement of
Purchase and Sale dated as of                           , 20    .

 

C.                                    Assignor or Assignor’s predecessors in
interest have entered into those certain leases or rental agreements described
on Schedule A attached hereto and made a part hereof relating to the leasing of
space at the Property and all of the rights, interests, benefits and privileges
of the landlord thereunder (the “Leases”).

 

D.                                    Assignor is the present owner of all
rights, title, and interest of the landlord under the Leases.

 

E.                                     Assignor desires to transfer and assign
all of Assignor’s right, title and interest as the landlord in and to the Leases
and, to the extent Assignee has not received a credit therefor under the
Contract, all prepaid rents and security and other deposits held by Assignor
under the Leases and not credited or returned to tenants, subject to all of the
terms conditions, reservations and limitations set forth in the Leases.

 

NOW, THEREFORE, for and in consideration of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor and Assignee hereby agree as follows:

 

1.                                      Assignment.  Assignor hereby ASSIGNS,
TRANSFERS and DELIVERS unto Assignee the Leases and, to the extent Assignee has
not received a credit therefor under the Contract, all security deposits,
prepaid rentals, cleaning fees and other refundable deposits and fees collected
from tenants under the Leases or otherwise and whether held as security for the

 

1

--------------------------------------------------------------------------------

 

performance of the obligations of a tenant or tenants under the Leases,  plus
any interest accrued thereon (excluding, however, any non-refundable deposits or
fees paid by tenants under the Leases to Assignor, either pursuant to the Leases
or otherwise), each to the extent not credited or returned to tenants, subject
to all of the terms conditions, reservations and limitations set forth in the
Leases.

 

2.                                      Assumption.  Assignee hereby assumes and
agrees to perform all of the terms, covenants, and conditions required to be
performed on the part of the landlord accruing under the Leases on and after the
date hereof in accordance with the terms thereof.

 

3.                                      Indemnities.  Assignor covenants and
agrees to indemnify, defend and hold harmless Assignee from and against any and
all losses, liabilities, claims, or causes of action existing in favor of or
asserted by any tenant under the Leases arising out of or related to Assignor’s
failure to perform any of the obligations of the landlord accruing or arising
under the Leases prior to the date hereof or because of any other breach of the
landlord under the Leases accruing or arising during the period prior to the
date hereof.  Assignee covenants and agrees to indemnify, defend and hold
harmless Assignor from and against any and all losses, liabilities, claims, or
causes of action existing in favor of or asserted by any tenant under the Leases
arising out of or related to Assignee’s failure to perform any of the
obligations of the landlord accruing or arising under the Leases on or after the
date hereof or because of any other breach of the landlord under the Leases
accruing or arising during the period on or after the date hereof.

 

4.                                      Attorneys’ Fees.  If any action or
proceeding is commenced by either party to enforce its rights under this
Assignment, the prevailing party in such action or proceeding shall be entitled
to recover all reasonable costs and expenses incurred in such action or
proceeding, including reasonable attorneys’ fees and costs, in addition to any
other relief awarded by the court.

 

5.                                      Applicable Law.  This Assignment shall
be governed by and interpreted in accordance with the laws of the State of
Texas.

 

6.                                      Titles and Section Headings.  Titles of
sections and subsections contained in this Assignment are inserted for
convenience of reference only, and neither form a part of this Assignment or are
to be used in its construction or interpretation.

 

7.                                      Binding Effect.  This Assignment shall
be binding upon and inure to the benefit of the parties hereto and their
respective transferees, successors and assigns.

 

2

--------------------------------------------------------------------------------

 

EXECUTED to be effective as of the       day of                           ,
20      .

 

 

ASSIGNOR:

 

 

 

 

 

                                                                                                      ,
a

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ASSIGNEE:

 

 

 

 

 

                                                                                                      ,
a

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

SCHEDULES:

 

A - Rent Roll

 

3

--------------------------------------------------------------------------------

 

EXHIBIT “F”

 

TENANT NOTIFICATION LETTER

 

                         , 20    

 

                                              

                                              

 

Dear                                 :

 

You are hereby notified that
                                                                        , a
                                                       (“Seller”), the current
owner of                                                            located at
                                       in                             ,
                           County, Texas (the “Property”), and the current
owners of the landlord’s interest in your lease in the Property, has sold the
Property to                                               , a
                                               (“New Owner”), as of the above
date.  In connection with such sale, Seller has assigned and transferred its
interest in your lease and any and all security deposits thereunder or relating
thereto to New Owner, and New Owner has assumed and agreed to perform all of the
landlord’s obligations under your lease (including any obligations set forth in
your lease to repay or account for any security deposits thereunder) from and
after such date.

 

Accordingly, (a) all your obligations under the lease from and after the date
hereof, including your obligation to pay rent, shall be performable to and for
the benefit of New Owner, its successors and assigns, (b) your insurance policy
or policies required to be maintained by you under the lease shall be amended to
name New Owner as an additional insured (please provide a certificate of
insurance evidencing such coverage within thirty (30) days after the date of
this letter), and (c) all the obligations of the landlord under the lease,
including any obligations to repay or account for any security deposits
hereunder, shall be the binding obligation of New Owner and its successors and
assigns.  Unless and until you are otherwise notified in writing by New Owner,
the address of New Owner for all purposes under your lease is as set forth on
Exhibit A hereto.

 

Additionally, effective immediately, [Insert Name Of Management Company], is no
longer the manager of
                                                          .  The new manager is
                                                  .

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

1

--------------------------------------------------------------------------------

 

 

SELLER:

 

 

 

                                                                                                      ,
a

 

                                                                 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEW OWNER:

 

 

 

                                                                                                      ,
a

 

                                                                 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

EXHIBITS:

 

 

 

A - Address of New Owner

 

 

2

--------------------------------------------------------------------------------

 

EXHIBIT A

 

ADDRESS OF NEW OWNER

 

For All Notices:                                                 

 

 

 

 

 

 

 

Attention:

 

 

Telephone:       -      -

 

 

Telecopy:       -      -

 

3

--------------------------------------------------------------------------------

 

EXHIBIT “G”

 

SNDA

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

This Subordination, Non-Disturbance and Attornment Agreement (the “Agreement”)
is dated as of the            day of August, 2013, between REGIONS BANK, an
Alabama state banking corporation, as Administrative Agent (“Agent”), and
LIFECARE HOSPITALS OF NORTH TEXAS, L.P., a Texas limited partnership (“Tenant”).

 

RECITALS

 

A.                                    Tenant is the tenant under that certain
Lease Agreement, dated November 14, 2001 (the “Lease”), with 6800 Preston
Limited, a Texas limited partnership (“Landlord”), as successor landlord to
Turner Windham, L.L.C., a Louisiana limited liability company, and Meadowbrook
Equities Limited, a Texas limited partnership, as amended by First Amendment and
Assignment and Assumption of Lease Agreement dated December 7, 2001, Second
Amendment to Lease Agreement dated May 28, 2002, and Third Amendment to the
Lease dated June 7, 2012, for the premises described in the Lease (the
“Premises”) located on that certain real property known as the LifeCare
Hospitals of Plano located at 6800 Preston Road in the City of Plano, Collin
County, Texas, and more particularly described in Exhibit A attached hereto and
made a part hereof (such building, including the Premises, is hereinafter
referred to as the “Property”).

 

B.                                    This Agreement is being entered into in
connection with a mortgage loan (the “Loan”) being made by Agent and certain
other lenders to Landlord, to be secured by, among other things, a first
mortgage or deed of trust on the Property (the “Mortgage”) to be recorded with
the registry or clerk of the county in which the Property is located.

 

C.                                    Tenant acknowledges that Agent will rely
on this Agreement in making the Loan to Landlord.

 

AGREEMENT

 

For mutual consideration, including the mutual covenants and agreements set
forth below, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.                                      Tenant agrees that the Lease is and
shall be subject and subordinate to the Mortgage and to all present or future
advances under the obligations secured thereby and all renewals, amendments,
modifications, consolidations, replacements and extensions of the secured
obligations and the Mortgage, to the full extent of all amounts secured by the
Mortgage from time to time.  Said subordination is to have the same force and
effect as if the Mortgage and such renewals, modifications, consolidations,
replacements and extensions thereof had been executed, acknowledged, delivered
and recorded prior to the Lease, any amendments or modifications thereof and any
notice thereof.

 

1

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2.                                      Agent agrees that, if the Agent
exercises any of its rights under the Mortgage, including an entry by Agent
pursuant to the Mortgage or a foreclosure of the Mortgage, Agent shall not
disturb Tenant’s right of quiet possession of the Premises under the terms of
the Lease so long as Tenant is not in default beyond any applicable grace period
of any term, covenant or condition of the Lease.

 

3.                                      Tenant agrees that, in the event of a
foreclosure of the Mortgage by Agent or the acceptance of a deed in lieu of
foreclosure by Agent or any other succession of Agent to fee ownership, Tenant
will attorn to and recognize Agent as its landlord under the Lease for the
remainder of the term of the Lease (including all extension periods which have
been or are hereafter exercised) upon the same terms and conditions as are set
forth in the Lease, and Tenant hereby agrees to pay and perform all of the
obligations of Tenant pursuant to the Lease.

 

4.                                      Tenant agrees that, in the event Agent
succeeds to the interest of Landlord under the Lease, Agent shall not be:

 

(a)                                 liable for any act or omission of any prior
Landlord (including, without limitation, the then defaulting Landlord), except
for defaults related to Landlord’s repair and/or maintenance obligations under
the Lease which are continuing at the time Agent succeeds to the interest of
Landlord under the Lease, or

 

(b)                                 subject to any defense or offsets which
Tenant may have against any prior Landlord (including, without limitation, the
then defaulting Landlord), or

 

(c)                                  bound by any payment of rent or additional
rent which Tenant might have paid for more than one month in advance of the due
date under the Lease to any prior Landlord (including, without limitation, the
then defaulting Landlord), except to the extent such monies are actually
received by Agent, or

 

(d)                                 bound by any obligation to make any payment
to Tenant which was required to be made prior to the time Agent succeeded to any
prior Landlord’s interest, or

 

(e)                                  accountable for any monies deposited with
any prior Landlord (including security deposits), except to the extent such
monies are actually received by Agent, or

 

(f)                                   bound by any surrender, termination or
material amendment or modification of the Lease made without the consent of
Agent to the extent such surrender, termination or material amendment or
modification of the Lease was not provided for under the terms of the Lease
(i.e. options to extend or terminate).

 

5.                                      Tenant agrees that, notwithstanding any
provision hereof to the contrary, the terms of the Mortgage shall continue to
govern with respect to the disposition of any insurance proceeds or eminent
domain awards, and any obligations of Landlord to restore the real estate of
which the Premises are a part shall, insofar as they apply to Agent, be limited
to insurance proceeds or eminent domain awards received by Agent after the
deduction of all costs and expenses incurred in obtaining such proceeds or
awards.

 

2

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6.                                      Tenant hereby agrees to give to Agent
copies of all written notices of Landlord default(s) under the Lease in the same
manner as, and whenever, Tenant shall give any such notice of default to
Landlord, and no such notice of default shall be deemed given to Landlord unless
and until a copy of such notice shall have been so delivered to Agent.  Agent
shall have the right to remedy any Landlord default under the Lease, or to cause
any default of Landlord under the Lease to be remedied, and for such purpose
Tenant hereby grants Agent such additional period of time as may be reasonable
to enable Agent to remedy, or cause to be remedied, any such default in addition
to the period given to Landlord for remedying, or causing to be remedied, any
such default.  Tenant shall accept performance by Agent of any term, covenant,
condition or agreement to be performed by Landlord under the Lease with the same
force and effect as though performed by Landlord.  No Landlord default under the
Lease shall exist or shall be deemed to exist (i) as long as Agent, in good
faith, shall have commenced to cure such default within the above referenced
time period and shall be prosecuting the same to completion with reasonable
diligence, subject to force majeure, or (ii) if possession of the Premises is
required in order to cure such default, or if such default is not susceptible of
being cured by Agent, as long as Agent, in good faith, shall have notified
Tenant that Agent intends to institute proceedings under the Mortgage, and,
thereafter, as long as such proceedings shall have been instituted and shall be
prosecuted with reasonable diligence.  In the event of the termination of the
Lease by reason of any default thereunder by Landlord, upon Agent’s written
request, given within thirty (30) days after any such termination, Tenant,
within fifteen (15) days after receipt of such request, shall execute and
deliver to Agent or its designee or nominee a new lease of the Premises for the
remainder of the term of the Lease upon all of the terms, covenants and
conditions of the Lease.  Agent shall have the right, without Tenant’s consent,
to foreclose the Mortgage or to accept a deed in lieu of foreclosure of the
Mortgage or to exercise any other remedies under the Mortgage.

 

7.                                      Tenant hereby consents to the assignment
of leases and rents in the Mortgage from Landlord to Agent in connection with
the Loan.  Tenant acknowledges that the interest of the Landlord under the Lease
is to be assigned to Agent solely as security for the purposes specified in said
assignments, and Agent shall have no duty, liability or obligation whatsoever
under the Lease or any extension or renewal thereof, either by virtue of said
assignments or by any subsequent receipt or collection of rents thereunder,
unless Agent shall specifically undertake such liability in writing or unless
Agent or its designee or nominee becomes, and then only with respect to periods
in which Agent or its designee or nominee becomes, the fee owner of the
Premises.  Tenant agrees that upon receipt of a written notice from Agent of a
default by Landlord under the Loan, Tenant will thereafter, if requested by
Agent, pay rent to Agent in accordance with the terms of the Lease.

 

8.                                      The Lease shall not be assigned by
Tenant, modified, amended or terminated (except a termination that is permitted
in the Lease without Landlord’s consent) without Agent’s prior written consent
in each instance.

 

9.                                      Any notice, election, communication,
request or other document or demand required or permitted under this Agreement
shall be in writing and shall be deemed delivered on the earlier to occur of
(a) receipt or (b) the date of delivery, refusal or nondelivery indicated on the
return receipt, if deposited in a United States Postal Service Depository,
postage prepaid, sent certified or registered mail, return receipt requested, or
if sent via a recognized

 

3

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commercial courier service providing for a receipt, addressed to Tenant or
Agent, as the case may be, at the following addresses:

 

If to Tenant:

 

LifeCare Hospitals of North Texas, L.P.

 

 

 

 

 

Attention: Administrator

 

 

 

 

 

5340 Legacy Drive — Suite 150

 

 

 

 

 

Plano, TX 75024

 

 

 

with a copy to:

 

LifeCare Management Services, L.L.C.

 

 

 

 

 

Attention: Erik Pahl

 

 

 

 

 

5340 Legacy Drive — Suite 150

 

 

 

 

 

Plano, TX 75024

 

If to Agent:

 

Regions Bank

 

 

 

 

 

                                

 

 

                                 

 

 

Attention:                   

 

10.                               The term “Agent” as used herein includes any
successor or assign of the named Agent herein, including without limitation, any
co-lender at the time of making the Loan, any purchaser at a foreclosure sale
and any transferee pursuant to a deed in lieu of foreclosure, and their
successors and assigns, and the terms “Tenant” and “Landlord” as used herein
include any successor and assign of the named Tenant and Landlord herein,
respectively; provided, however, that such reference to Tenant’s or Landlord’s
successors and assigns shall not be construed as Agent’s consent to any
assignment or other transfer by Tenant or Landlord.

 

11.                               If any provision of this Agreement is held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be deemed modified to the extent necessary to be enforceable, or if such
modification is not practicable, such provision shall be deemed deleted from
this Agreement, and the other provisions of this Agreement shall remain in full
force and effect, and shall be liberally construed in favor of Agent.

 

12.                               Neither this Agreement nor any of the terms
hereof may be terminated, amended, supplemented, waived or modified orally, but
only by an instrument in writing

 

4

--------------------------------------------------------------------------------

 

executed by the party against which enforcement of the termination, amendment,
supplement, waiver or modification is sought.

 

This Agreement shall be construed in accordance with the laws of the state of in
which the Property is located.

 

The person executing this Agreement on behalf of Tenant is authorized by Tenant
to do so and execution hereof is the binding act of Tenant enforceable against
Tenant.

 

5

--------------------------------------------------------------------------------

 

Witness the execution hereof as of the date first above written.

 

 

 

AGENT:

 

 

 

REGIONS BANK,

 

an Alabama state banking corporation,

 

as Administrative Agent

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

LIFECARE HOSPITALS OF NORTH TEXAS, L.P.,

 

a Texas limited partnership:

 

 

 

 

By:

LifeCare Holding Company of Texas, L.L.C.,

 

 

a Nevada limited liability company,

 

 

its General Partner

 

 

 

 

 

 

By:

LifeCare Management Services, L.L.C.,

 

 

 

a Louisiana limited liability company,

 

 

 

its Manager

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

6

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The undersigned Landlord hereby consents to the foregoing Agreement and confirms
the facts stated in the foregoing Agreement.

 

 

 

LANDLORD:

 

 

 

 

 

6800 PRESTON LIMITED, a Texas limited partnership

 

 

 

 

 

 

By:

Plano Desoto Partners I, LLC,

 

 

a Texas limited partnership, its sole

 

 

general partner

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

7

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STATE OF                                                                  

)

 

 

) SS.

 

COUNTY OF                                                               

)

 

 

On                                             , 20      , personally appeared
the above-named                                                            , the
                                             of REGIONS BANK, an Alabama state
banking corporation, and acknowledged the foregoing to be the free act and deed
of said corporation, before me.

 

 

 

 

 

Notary Public

 

My commission expires:                             

STATE OF                                                                  

)

 

 

) SS.

 

COUNTY OF                                                               

)

 

 

On                                       , 20       personally appeared the
above-named                                       , the
                                              , of
                                         and acknowledged the foregoing to be
the free act and deed of said                           , before me.

 

 

 

 

 

Notary Public

 

My commission expires:                                

STATE OF                                                                 

)

 

 

) SS.

 

COUNTY OF                                                             

)

 

 

On                                             , 20       personally appeared
the above-named                                                 , the
                                      , of
                                                   and acknowledged the
foregoing to be the free act and deed of said                         , before
me.

 

 

 

 

 

Notary Public

 

My commission expires:                                        

 

8

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EXHIBIT “H”

 

ESTOPPEL

 

ESTOPPEL CERTIFICATE

 

This Certificate is given to REGIONS BANK, an Alabama state banking corporation,
as administrative agent for itself as a lender and certain other lenders (the
“Agent”) and PHYSICIANS REALTY L.P., a Delaware limited partnership (the
“Purchaser”), by LIFECARE HOSPITALS OF NORTH TEXAS, L.P., a Texas limited
partnership (the “Tenant”), with the understanding that Agent and its counsel
will rely on this Certificate in connection with a loan (the “Loan”) to be
secured by a mortgage or deed of trust on that certain real property commonly
known as the LifeCare Hospitals of Plano located at 6800 Preston Road in the
City of Plano, Collin County, Texas (the “Property”).

 

Tenant hereby certifies as follows:

 

The undersigned is the Tenant under that certain Lease Agreement, dated
November 14, 2001, as amended (the “Lease”), between 6800 Preston Limited, a
Texas limited partnership (Landlord), as assignee of Turner Windham, L.L.C., a
Louisiana limited liability company, and Meadowbrook Equities Limited, a Texas
limited partnership, as landlord, and Tenant, as tenant.  A true, correct and
complete copy of the Lease, together with any amendments, modifications and
supplements thereto, is attached hereto.  The Lease is the entire agreement
between Landlord (or any affiliated party) and Tenant (or any affiliated party)
pertaining to the Premises (as defined in Section 1(t) of the Lease).  There are
no amendments, modifications, supplements, arrangements, side letters or
understandings, oral or written, of any sort, of the Lease, except the First
Amendment and Assignment and Assumption of Lease Agreement dated as of
December 7, 2001, the Second Amendment to Lease Agreement dated as of May 28,
2002, the Acceptance of Premises Memorandum dated as of December 6, 2002, and
the Third Amendment to the Lease dated as of June 7, 2012.

 

Lease terms: The commencement date of the term of the Lease (the “Lease Term”)
is January 1, 2013. The expiration date of the term of the Lease is December 31,
2022.  The monthly rent (“Monthly Rent”) for the Lease Term is as follows:

 

Time Period

 

Monthly Rent Amount

 

 

 

January 1, 2013 through December 31, 2013

 

$

118,750.00

 

 

 

January 1, 2014 through December 31, 2014

 

$

122,312.50

 

 

 

January 1, 2015 through December 31, 2015

 

$

125,981.88

 

 

 

January 1, 2016 through December 31, 2016

 

$

129,761.33

 

 

 

January 1, 2017 through December 31, 2017

 

$

133,654.17

 

 

 

January 1, 2018 through December 31, 2018

 

$

137,663.80

 

 

 

January 1, 2019 through December 31, 2019

 

$

141,793.71

 

 

 

January 1, 2020 through December 31, 2020

 

$

146,047.52

 

 

 

January 1, 2021 through December 31, 2021

 

$

150,428.95

 

 

 

 

January 1, 2022 through December 31, 2022

 

$

154,941.82

 

1

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Monthly Rent is due and payable to Landlord on the first day of each calendar
month during the Lease Term.  Tenant is responsible for paying all Basic
Operating Costs, as defined in Section 10 of the Lease, which includes, among
other things, the following:

 

(a)         Costs of leasing or purchasing all supplies, tools, non-capital
equipment and materials used in the operation, maintenance and repair of the
Premises;

 

(b)         cost of all utilities for the Premises, including the cost of water
and power, sewage, heating, lighting, air conditioning and ventilation for the
Premises;

 

(c)          cost of all maintenance and service agreements for the Premises and
surrounding grounds, including, but not limited to, janitorial service, security
service, equipment leasing, energy management system leasing, landscape
maintenance, alarm service, window cleaning, metal finishing and elevator
maintenance;

 

(d)         cost of all insurance required to by maintained by Tenant;

 

(e)          all impositions and association dues and assessments attributable
to the Premises or its operation; and

 

(f)           cost of repairs and general maintenance for the Premises
(excluding such repairs and general maintenance paid by insurance proceeds or by
Tenant or other third parties).

 

No rent has been prepaid except for the current month.  All rent has been paid
through August 31, 2013. Tenant has paid a security deposit of Eighty-Three
Thousand Three Hundred Thirty-Three and 33/100 Dollars ($83,333.33).

 

Tenant does not have any right or option to: renew or extend the term of the
Lease, or to expand into any additional space, or to terminate the Lease in
whole or in part prior to the expiration of the term, or to purchase all or any
part of the Property or the Premises, except under Section 5 of the Lease,
Tenant shall have two (2) options (each a “Renewal Option”) to extend the term
of the Lease for a period of five (5) additional years each (each a “Renewal
Term”), upon the terms and conditions set forth in the Lease.

 

The Lease has been duly executed and delivered by, and is a binding obligation
of, Tenant, and the Lease is in full force and effect.

 

Tenant has unconditionally accepted the Premises and is satisfied with all the
work done by and required of Landlord; Tenant has taken possession and is in
occupancy of the Premises and is open for business; Monthly Rent payments have
commenced, and all tenant improvements in the Premises have been completed by
Landlord; and as of the date hereof Tenant is not aware of any defect in the
Premises.

 

All obligations of Landlord under the Lease have been performed, and Landlord is
not in default under the Lease.  There are no offsets or defenses that Tenant
has against the full enforcement of the Lease by Landlord.  No free periods of
rent, tenant improvements, contributions or other concessions have been granted
to Tenant; Landlord is not reimbursing Tenant or paying Tenant’s rent
obligations under any other lease; and Tenant has not advanced any funds for or
on behalf of Landlord for which Tenant has a right of deduction from, or set off
against, future rent payments.

 

2

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Tenant is not in default under the Lease.  Tenant has not assigned, transferred
or hypothecated the Lease or any interest therein or subleased all or any
portion of the Premises.  Tenant is not insolvent and is able to pay its debts
as they mature.  Tenant has not declared bankruptcy or similar insolvency
proceeding, and has no present intentions of doing so, no such proceeding has
been commenced against Tenant seeking such relief, and Tenant has no knowledge
that any such proceeding is threatened.

 

Tenant hereby acknowledges and agrees that Tenant’s rights under the Lease shall
be subject and subordinate to Agent’s rights under any mortgage, deed of trust
or similar agreement given by Landlord in connection with the Loan.  Tenant
shall attorn to and accept performance by Agent of any covenant, agreement or
obligation of Landlord contained in the Lease with the same force and effect as
if performed by Landlord.  In no event, however, shall Agent be obligated to
perform any such covenant, agreement, or obligation of Landlord under the Lease.

 

The terms “Agent” and “Purchaser” as used herein includes any successor or
assign of the named Agent and/or Purchaser, and the term “Landlord” as used
herein includes any successor or assign of the named Landlord.  The person
executing this Estoppel Certificate is authorized by Tenant to do so and
execution hereof is the binding act of Tenant enforceable against Tenant.

 

August       , 2013.

 

 

 

TENANT:

 

 

 

LIFECARE HOSPITALS OF NORTH TEXAS, L.P.,

 

a Texas limited partnership:

 

 

 

By:

LifeCare Holding Company of Texas, L.L.C.,

 

 

a Nevada limited liability company,

 

 

its General Partner

 

 

 

 

 

By:

LifeCare Management Services, L.L.C.,

 

 

 

a Louisiana limited liability company,

 

 

 

its Manager

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

3

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Schedule 4.01(d)

 

Disclosure Materials

 

1. Existing Survey

2. LifeCare Lease

3. Property Tax Bills (2011 and 2012)

4. Property Insurance Certificates

5. Phase I Environmental Report

6. Certificate of Occupancy (shell)

 

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