Document:

Exhibit

Purchase and 
	
		
	Purchased Facilities:
	Option Properties:

	 
	 

	[Gladewater, Texas]
	[Austin, Texas]

	[Marble Falls, Texas]
	[New Braunfels, Texas]

	[San Antonio, Texas (Sonterra)]
	[Waxahachie, Texas]

	[San Antonio, Texas (West San Antonio)]
	[Garland, Texas]

	[McAllen, Texas]
	[Fort Worth, Texas]

	[Euless, Texas]
	 

	[Katy, Texas]
	 

PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of April 1, 2016, by and between Texas NHI Investors, LLC, a Texas limited liability company (the “Buyer”), and Gladewater Real Estate, LP, a Texas limited partnership, Firehole River Real Estate Holdings – Granite Mesa, Ltd, a Texas limited partnership, Firehole River Real Estate Holdings – Sonterra, Ltd, a Texas limited partnership, Firehole River Real Estate Holdings – West San Antonio, Ltd, a Texas limited partnership, RGV Real Estate Holdings, Ltd, a Texas limited partnership, Firehole River Real Estate Holdings – Euless, LP, a Texas limited partnership, and Firehole River Real Estate Holdings – Katy, LLC, a Texas limited liability company (individually and collectively, the “Seller”), and Legend Healthcare, LLC, a Texas limited liability company (the “Owner”).
RECITALS
WHEREAS, Seller is the owner of the Property (as defined below) or leasehold estate therein or holds an option to purchase the Property; and
WHEREAS, Seller desires to transfer (or cause to be transferred) to Buyer the Property and Seller’s rights as “Optionee” under each of the Option Agreements (as defined below), and Buyer desires to acquire the Property and the Seller’s rights as “Optionee” under the Option Agreements from Seller;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I 
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, (i) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (ii) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as at the time applicable; (iii) all references in this Agreement to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement; (iv) the word “including” shall have the same meaning as the phrase “including, without limitation,” and other phrases of similar import; and (v) the words “herein,” 

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“hereof’ and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.
Affiliate: As defined in the Lease.
Agreement Regarding Future Transactions: An agreement mutually satisfactory to Buyer and Seller, providing Buyer with a right of first offer and if the first offer is refused by Seller, a right of first refusal for any subsequent price reduction offered to the market, to enter into any transaction wherein Seller desires to acquire, lease, develop or mortgage a facility (except a transaction where existing owner or lender will remain a landlord or lender), or if Seller desires to do a sale leaseback transaction with an existing facility it operates, or to develop additional facilities. For purposes of this definition “facility” shall include any transitional rehabilitation center, skilled nursing facility or other type of senior housing or combination thereof.
Assignment of Option Agreements: One or more assignments assigning the rights of Seller as “Optionee” under the Option Agreements to Buyer and consented to by the Option Property Seller, as may be required.
Austin Lease: That certain Lease by and between Austin Dessau Road Property, LLC and Legend Oaks – Austin LLC dated May 21, 2009, as amended in February 2014.
Bill of Sale and Assignment: One or more bill(s) of sale and assignment substantially in the form attached hereto as Exhibit B, conveying the Personal Property from Seller to Buyer.
Change of Control: As defined in Section 2.1.
Closing: The transactions taking place pursuant to this Agreement and the Option Agreements on the Closing Date[s].
Closing Date: The date on which Buyer receives from Seller or Option Property Seller, as applicable, conveyance of good and marketable title to the Property, free and clear of all liens, claims and encumbrances (except Permitted Exceptions), which date shall be mutually acceptable to both parties (the “Closing Date”).  The actual Closing Date for the Option Property shall be in accordance with Section 7.1.1.
Code: The Internal Revenue Code of 1986, as amended.
Commercial Occupancy Arrangement: As defined in the Lease.
Condemnation: As defined in the Lease.
Consumables: All consumable goods and supplies, including inventories of food, beverages, medical supplies, or similar items utilized in connection with the operation and/or maintenance of the Purchased Facilities.
Current Facility Leases: Collectively, the operating leases for each of the respective Purchased Facilities currently in effect as follows:

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	(i)
	Lease between Legend Healthcare Gladewater LP, d/b/a Gladewater Nursing Home, as operator, and Gladewater Real Estate, LP, as lessor, having an effective date of February 9, 2006, as amended on November 1, 2011 (the “Gladewater Lease”);

		
	(ii)
	Lease between Legend Oaks-Granite Mesa LLC, as operator, and Firehole River Real Estate Holdings – Granite Mesa, Ltd, as lessor, having an effective date of November 1, 2014 (the “Granite Mesa Lease”);

		
	(iii)
	Lease between Legend Oaks – Sonterra LLC, as operator, and Firehole River Real Estate Holdings – Sonterra Ltd, as lessor, having an effective date of November 1, 2014 (the “Sonterra Lease”);

		
	(iv)
	Lease between Legend Oaks – West San Antonio LLC, as operator, and Firehole River Real Estate Holdings – West San Antonio, Ltd, as lessor, having an effective date of November 1, 2014 (the “West San Antonio Lease”);

		
	(v)
	Lease between Legend RGV McAllen, LP, d/b/a McAllen Transitional Care Center, as operator, and RGV Real Estate Holdings, Ltd, as lessor, having an effective date of April 11, 2007, as amended January 27, 2011 (the “McAllen Lease”);

		
	(vi)
	Lease between Legend Healthcare Euless LP, as operator, and Firehole River Real Estate Holdings – Euless, LP, as lessor having an effective date of December 30, 2008 (the “Euless Lease”); and

		
	(vii)
	Lease between Legend Oaks – Katy LLC, d/b/a Legend Oaks Healthcare & Rehab – Katy, as operator, and Firehole River Real Estate Holdings – Katy, LLC, as lessor, having an effective date of December 26, 2012, as amended March 28, 2013 (the “Katy Lease”).

Current Tenants: The tenants under the Current Facility Leases being Legend Healthcare Gladewater LP under the Gladewater Lease; Legend Oaks-Granite Mesa LLC under the Granite Mesa Lease; Legend Oaks – Sonterra LLC under the Sonterra Lease, Legend Oaks – West San Antonio LLC under the West San Antonio Lease, Legend RGV McAllen, LP under the McAllen Lease, Legend Healthcare Euless LP under the Euless Lease and Legend Oaks – Katy LLC under the Katy Lease.
Deed: One or more Warranty Deed(s) in form acceptable to Buyer, conveying the Property from Seller to the entity designated by Buyer.
Defect: As defined in Section 3.5(b).
Ensign: The Ensign Group, Inc., a Delaware corporation, or an affiliate of it.
Ensign Transaction: A transaction between Legend and Ensign in which the operations of Legend are transferred to Ensign.
Excluded Property: All of Seller’s and the Current Tenants’ Consumables, intellectual property, vehicles, any property to be conveyed in the Ensign Transaction, and accounts receivable.
Excluded Liabilities: As defined in Section 6.3.

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Financial Statements: As defined in Section 5.1.18.
First Amendment to Master Lease: The first amendment to the Lease dated October 31, 2011.
Flood Hazard Area: An area designated by the Federal Emergency Management Agency and/or the Secretary of Housing and Urban Development as having special flood hazards.
Governmental Authority: The United States, the state or commonwealth, county, parish, city and political subdivisions in which all or any portion of the Property is located or which exercise jurisdiction over all or any portion of the Property or use of any Purchased Facility thereon, and any court administrator, agency, department, commission, board, bureau or instrumentality or any of them which exercises jurisdiction over all or any portion of the Property or the construction or use of all or any portion of the Property.
Governmental Requirement: Any law, ordinance, order, rule, regulation, decree or similar edict of a Governmental Authority.
Guarantors: The Guarantors of the Lease pursuant to Guaranty Agreements, as amended, guarantying obligations under the lease.
Hazardous Substances: As defined in the Lease.
Health Care License: As defined in Section 3.10.
Holdback Amount: Fifteen Million and No/100 Dollars ($15,000,000.00) of the Purchase Price to be retained by Buyer in an unfunded escrow at closing.
Intangible Property: All Permits and other intangible property or any interest therein now or on the Closing Date owned or held by any Seller or their respective Affiliate and used in connection with the Property or any business or businesses now or hereafter conducted by Seller or their respective Affiliate and used thereon or with the use thereof, including all rights of Seller in and to all Plans and Specifications, leases, contract rights, agreements, water rights and reservations, zoning rights, business licenses, warranties and guaranties (including those relating to construction and/or fabrication) related to the Property or any part thereof; provided, however, that “Intangible Property” shall not include any of the Excluded Property.
Issuing Agency: As defined in Section 3.10.
Lease: That certain Master Lease by and between NHI of Paris, LLC, NHI of San Antonio, LLC, NHI of East Houston, LLC and NHI of Northwest Houston, LLC, collectively as Lessors and Firehole River Real Estate Holdings – Paris, LLC, SSA Real Estate, LLC, Firehole River Real Estate Holdings – East Houston, LLC and Firehole River Real Estate Holdings – Northwest Houston, LLC, collectively the Lessee, dated as of June 30, 2009 whereby the Paris Facility, the San Antonio Facility, the East Houston Facility and the Northwest Houston Facility (as defined in the Lease) were leased by Lessor to Lessee, as amended by the First Amendment to Master Lease whereby the Added Facilities (as defined in the First Amendment to Master Lease) were leased by Lessor to Lessee and as such Master Lease is to be amended by the Second Amendment to Master Lease.
Leased Property: As defined in the Lease.

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Lessee: The master lessee under the Lease and any sublessees under the Subleases.
Lessor: The lessor under the Lease.
New Braunfels Lease: That certain Lease by and between Bozeman Development, LLC and Legend Oaks – New Braunfels, LLC dated 2014 providing for the lease of the New Braunfels Facility.
Officer’s Certificate: A certificate of any entity signed by an officer duly authorized to do so by such entity.
Option Agreement or Option Agreements:  Individually any one of or collectively all of, (a) with respect to the New Braunfels Facility, the Option Agreement executed in August of 2014, between Bozeman Development, LLC and Legend Oaks – New Braunfels, LLC, (b) with respect to the Waxahachie Facility, the Option Agreement contained in the Lease between the parties, dated December 17, 2014, between J-D Waxahachie Realty, LLC and Legend Oaks – Waxahachie, LLC, (c) with respect to the Garland Facility, the Option Agreement dated March ___, 2015, between Bozeman Development, LLC and Legend Oaks – Garland, LLC, (d) with respect to the Fort Worth Facility, the Option Agreement dated March ___, 2015, between Clearlake Healthcare Realty, LLC and Legend Oaks – Fort Worth, LLC, and (e) with respect to the Austin Facility, the Option Agreement dated _______________, between Austin Dessau Road Property, LLC and Firehole River Real Estate Holdings – Austin, Ltd.
Option Property or Option Properties: Individually any one of or collectively all of, (a) the land and all related improvements, , any personal or other property described in the applicable Option Agreement,  fixtures and appurtenances of the facility located at 2468 FM 1101, New Braunfels, Comal County, Texas, which land is more particularly described on Exhibit C attached hereto (the “New Braunfels Facility”), (b) the land and all related improvements, personal property, any personal or other property described in the applicable Option Agreement, fixtures and appurtenances of the facility located at 151 Country Meadows Boulevard, Waxahachie, Ellis County, Texas, which land is more particularly described on Exhibit C (the “Waxahachie Facility”), (c) the land and all related improvements, personal property, any personal or other property described in the applicable Option Agreement, fixtures and appurtenances of the facility located at 2625 Belt Line Road, Garland, Dallas County, Texas, which land is more particularly described on Exhibit C (the “Garland Facility”), (d) the land and all related improvements, personal property, any personal or other property described in the applicable Option Agreement, fixtures and appurtenances of the facility located at 4200 Golden Triangle Boulevard, Fort Worth, Tarrant County, Texas, which land is more particularly described on Exhibit C (the “Fort Worth Facility”), and (e) the land and all related improvements, Personal Property, any personal or other property described in the applicable Option Agreement, fixtures and appurtenances of the facility located at 11020 Dessau Road, Austin, Travis County, Texas, which land is more particularly described on Exhibit C (the “Austin Facility”).
Option Property Seller: Individually and collectively, Austin Dessau Road Property, LLC, Bozeman Development, LLC, Clearlake Healthcare, LLC, and J-D Waxahachie Realty, LLC.
Option Purchase Price: The amount identified in each Option Agreement for each Option Property.

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Option Transfer Purchase Price: If the Ensign Transaction closes on or before May 31, 2016, the Option Transfer Purchase Price shall be $2,750,000.00 per Option Property. If the Ensign Transaction does not close on or before May 31, 2016, the Option Transfer Purchase Price shall be $17,750,000.00 per option property, less the Option Purchase Price for each Option Property. Notwithstanding the foregoing, the Option Transfer Purchase Price for the Austin Facility shall be $0.00.
Organizational Documents: Collectively, as applicable, the articles or certificate of incorporation, articles or certificate of limited partnership, articles of organization, certificate of limited liability company, bylaws, partnership agreement, operating agreement, trust agreement, statement of partnership, fictitious business name filings and all other organizational documents relating to the creation, formation and/or existence of a business entity, together with resolutions of the board of directors, partner or member consents, trustee certificates, incumbency certificates and all other documents or instruments approving or authorizing the transactions contemplated hereby and the Exhibits hereto.
OSHA: As defined in Section 5.1.31.
Permits: All permits, licenses, approvals, entitlements and other authorizations issued by Governmental Authorities (including certificates of occupancy) required in connection with the ownership, planning, development, construction, use, operation and/or maintenance of each Facility for its Primary Intended Use, and all amendments, modifications, supplements, general conditions and addenda thereto, other than any licenses or permits included within the definition of Excluded Property.
Permitted Exceptions: Collectively, (i) liens for taxes, assessments and governmental charges not yet past due and payable or delinquent, (ii) the Permitted Exceptions under the Option Agreements, and (iii) such other title exceptions as Buyer may approve in writing in its sole and absolute discretion.
Personal Property: All Intangible Property and all tangible personal property of every kind and nature located at, upon or about, or affixed or attached to, or installed in each Purchased Facility or used or to be used in connection with and incorporated into or otherwise relating to such Purchased Facility or its ownership, planning, development, construction, operation and/or maintenance, including the following:
		
	(i)
	All equipment, machinery, fixtures, furniture and furnishings and other tangible personal property, including all components thereof, now or on the Closing Date located in, on or used in connection with each Purchased Facility, including all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air cooling and air conditioning systems, apparatus, sprinkler systems, fire and theft protection equipment, built-in oxygen and vacuum systems, tools, repair parts, appliances and communications equipment, to the extent any of the foregoing items are not conveyed from Seller to Buyer as part of the Purchased Facilities pursuant to the Deed; and

		
	(ii)
	Those specific items of tangible personal property described on Exhibit B attached to the Bill of Sale and Assignment.

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Notwithstanding the foregoing, “Personal Property” shall not include any of the Excluded Property.
Plans and Specifications: All drawings (including final and complete “as-builts”), plans, specifications, blueprints, maps, studies, structural reviews, surveys (including “as-built”) and engineering, soil, seismic, geologic, architectural and other reports relating to the Property.
Primary Intended Use: As defined in the Lease with respect to each Purchased Facility.
Property: Collectively, the Purchased Facilities and the Option Properties or, where applicable, the Purchased Facilities and the Option Properties together with the Personal Property.
Purchase Option: As defined in Section 7.1.1.
Purchase Price: Subject to the Holdback Amount, One Hundred Eight Million and No/100 Dollars ($108,000,000.00) as the aggregate purchase price for all of the Purchased Facilities (including Seller’s rights as “Optionee” under each of the Option Agreements) and allocated as set forth on Exhibit D attached hereto.
Purchased Facility or Purchased Facilities: Individually any one of or collectively all of, (a) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 1201 Farm to Market Road 2685, in the City of Gladewater, County of Upshaw, State of Texas, which land is more particularly described on Exhibit A attached hereto (the “Gladewater Facility”), (b) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 14014 Max Copeland Drive, in the City of Marble Falls, County of Burnet, State of Texas, which land is more particularly described on Exhibit A (the “Marble Falls Facility”), (c) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 18514 Sonterra Place, in the City of San Antonio, County of Bexar, State of Texas, which land is more particularly described on Exhibit A (the “Sonterra Facility”), (d) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 222 Bertetti Drive, in the City of San Antonio, County of Bexar, State of Texas, which land is more particularly described on Exhibit A (the “West San Antonio Facility”), (e) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 2109 South K Center Street, in the City of McAllen, County of Hidalgo, State of Texas, which land is more particularly described on Exhibit A (the “McAllen Facility”), (f) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 900 Westpark Way in the City of Euless, County of Tarrant, State of Texas, which land is more particularly described on Exhibit A (the “Euless Facility”) and (g) the land and all related improvements, Personal Property, fixtures and appurtenances of the facility located at 21727 Provincial Boulevard in the City of Katy, County of Harris, State of Texas, which land is more particularly described on Exhibit A (the “Katy Facility”).
Resident and/or Patient Agreements: Any and all leases, rental and occupancy agreements, lease commitments, admission and payment documents, reservation agreements and concessions, all deposits made thereunder, all guaranties of any of the foregoing, and any and all patient and/or resident trust accounts, in each case with respect to the Property.
Second Amendment to Master Lease: The second amendment to the Lease of even date herewith under which the Lease is amended to include Seller as Lessee, and to add Buyer as the 

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Lessor and to add the Purchased Facilities to the Leased Property thereunder, all in such form as is acceptable to Buyer.
State: The State in which the Property is located.
Sublease: The subleases between the operators of the Purchased Facilities and the Lessee.
Title Insurer: Texas Investors Title Company.
Title Policy: Texas Investors Title Company.
Transaction Documents: Collectively, this Agreement, the Option Agreements, the Assignments of the Option Agreements, the Deed, the Bill of Sale and Assignment, the Agreement Regarding Future Transactions, the Lease, and such other documents as are reasonably necessary to effectuate the closing of the purchase and sale transactions described herein.
ARTICLE II     
TERMS OF SALE AND LEASEBACK
Section 2.1    Sale. On the Closing Date, subject to the conditions of this Agreement, Seller agrees to sell, transfer and convey or cause to be conveyed to Buyer, and Buyer agrees to purchase and acquire, the applicable Property and Seller’s rights as “Optionee” under each of the Option Agreements for the Purchase Price, subject to the Holdback Amount. Seller shall cause each Property (or Seller’s rights as “Optionee” under each Option Agreement) to be transferred, conveyed and assigned to the affiliate of Buyer designated on Exhibit E attached hereto.  The allocated Purchase Price less the Holdback Amount (Holdback Amount only applicable for the  Closing of the Purchased Facilities) shall be paid to Seller in cash on the applicable Closing Date by wire transfer or such other method as Buyer and Seller may agree upon.  The Holdback Amount shall be held by Buyer in an unfunded escrow at closing.  The Holdback Amount shall be paid and distributed to Seller upon Ensign becoming the Lessee under the Lease (the “Change of Control”).  If the Change of Control does not occur on or before June 30, 2016, or as extended by the Seller and Buyer in writing, Buyer shall not be obligated to fund the Holdback Amount and will only do so in its absolute and sole discretion.  For purposes of the Closing, the Purchase Price shall be allocated to the Purchased Facilities as apportioned as set forth on Exhibit D attached hereto.
Section 2.2    Closing. The Closing shall be held at such location as Buyer and Seller may agree upon or through an escrow or sub-escrow with Title Insurer. In the event that the Closing is to take place through an escrow or sub-escrow, the parties shall mutually execute and deliver to Title Insurer, as escrow holder, joint escrow and/or recording instructions consistent with this Agreement on or prior to the Closing Date. In the event of any conflict between the provisions of this Agreement or any such escrow and/or recording instructions or any general instructions required by Title Insurer to be executed by Buyer and Seller in connection therewith, the provisions of this Agreement shall control. If the Closing of the Purchased Facilities does not take place on or prior to June 30, 2016, Buyer may terminate this Agreement in its sole and absolute discretion and exercise any remedies provided hereunder or by law.
Section 2.3    Conveyance. On the Closing Date, subject to the terms and conditions of this Agreement, the following shall occur: (i) Legend Healthcare Gladewater LP shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction 

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Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the Gladewater Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); (ii) Legend Oaks-Granite Mesa LLC shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the Marble Falls Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); (iii) Legend Oaks – Sonterra LLC shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the Sonterra Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); (iv) Legend Oaks – West San Antonio LLC shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the West San Antonio Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); (v) Legend RGV McAllen, LP shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the McAllen Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); (vi) Legend Healthcare Euless LP shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the Euless Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions); and (vii) Legend Oaks – Katy LLC shall deliver the Deed and the Bill of Sale and Assignment and such other instruments (including all other Transaction Documents) as shall be necessary to convey, assign and grant to Buyer good and marketable title to the Katy Facility, free and clear of all liens, claims and encumbrances (except for Permitted Exceptions). Each party shall also execute and deliver such instruments and take such actions as either party may reasonably request in order to effectuate the purposes of this Agreement. Without limiting the foregoing, the parties agree that, for the Purchased Facilities, on the Closing Date:
(a)    The Deed shall be sufficient to convey good and indefeasible fee simple title to the Property (other than the Personal Property), and shall be duly executed, acknowledged and in recordable form. The Deed shall include (if applicable) the appropriate State and/or county real estate transfer tax declaration of real estate value or other tax affidavit as may be required by the jurisdiction in which the Property is located. The Deed shall be deemed to include all appurtenances to the Property conveyed thereby and any existing improvements located on the Property.
(b)    The Bill of Sale and Assignment shall also be sufficient to convey good and marketable title to the Personal Property and shall be duly executed. In addition, Seller or Option Property Seller, as applicable, will execute or obtain and deliver to Buyer on the Closing Date all other proper instruments for the conveyance of such title to the Personal Property.
(c)    Lessor and Lessee shall execute the Second Amendment to Master Lease.
(d)    Seller and Buyer shall execute the Assignment of Option Agreement for the Austin Facility.

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(e)    Seller and Buyer shall execute the Agreement Regarding Future Transactions.
(f)    Seller shall deliver, (i) a “FIRPTA” certificate in form and substance satisfactory to Buyer and in conformance with Section 1445(b)(2) of the Code, to the effect that Seller is not a foreign person, and (ii) such other affidavits or certificates as may be reasonably required by Buyer to the effect that Buyer is not required to withhold taxes from the payment of sale proceeds to Seller under any other applicable State, commonwealth, local or other tax laws.
(g)    Buyer and Seller shall execute a closing settlement statement in form and substance satisfactory to Buyer and Seller.
(h)    All other Transaction Documents, other than the Assignment of the Option Agreements for Option Properties other than the Austin Facility, shall be executed and delivered by all parties thereto.
Section 2.4    Prorations. There shall be no adjustment between Buyer or Seller for taxes, assessments, water charges, utilities, receivables or rents, if any, premiums on existing insurance policies, if any, or any other items relating to the Purchased Facilities, it being understood by the parties that Seller, as Lessee under the Lease, shall be obligated to pay the same under the terms thereof from and after the Closing Date.
Section 2.5    Title and Survey Objections. To the extent the title commitments, surveys, lien searches, environmental reports or zoning reports disclose any defects or other matters to which Buyer objects (any such defect or other matter being referred to as a “Defect”), then the Buyer shall provide such written objection to Seller within ten (10) business days of the later of the receipt of the last of these reports or the execution date of this Agreement. Seller shall have ten (10) business days to cause each such Defect to be removed or resolved in a manner acceptable to Buyer. If Seller is unable or unwilling to remove or resolve such Defects, then, at the option of Buyer, Buyer may: (i) terminate this Agreement, in which event any earnest money shall be refunded to Buyer immediately upon request, all rights and obligations of the parties under this Agreement shall expire, and this Agreement shall become null and void; or (ii) waive such satisfaction and performance and consummate the purchase and sale of the Property. Notwithstanding the foregoing, if, as the result of any intentional act or failure to act of Seller after the date of this Agreement, a Defect is created, Seller shall provide written notice of such Defect to Buyer and Seller shall have a reasonable time to cure such Defect. If Seller fails to cure such Defect after a reasonable cure period, but in no event greater than ten (10) business days after the date Seller gained knowledge of the Defect, such failure shall constitute a default by Seller under this Agreement, in which event Buyer shall be entitled to any and all remedies available under this Agreement or at law or in equity.
Section 2.6    Costs.
2.6.1    Seller’s Costs. Seller shall pay or cause to be paid:
(a)    any and all State, municipal or other documentary, transfer, stamp, sales, use or similar taxes payable in connection with the delivery of any instrument or document provided in or contemplated by this Agreement or the Exhibits hereto, 

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any agreement or commitment described or referred to herein or the transactions contemplated herein, together with interest and penalties, if any, thereon;
(b)    all expenses of or related to the issuance of the title insurance commitment and policy, chain of title reports, and all escrow fees and charges;
(c)    the charges for or in connection with the recording and/or filing of any instrument or document provided herein or contemplated by this Agreement or any agreement or document described or referred to herein;
(d)    any and all broker’s fees or similar fees claimed by any party acting by or on behalf of Seller in connection with the transactions contemplated herein;
(e)    all expenses of any surveys, property condition, geotechnical and environmental reports and all other out-of-pocket costs incurred by Buyer in connection with the transaction contemplated hereby; and
(f)    Buyer’s or its Affiliates’ legal fees and expenses incurred in connection with the transactions contemplated hereunder and the Exhibits hereto.
Section 2.7    Second Amendment To Master Lease. The Second Amendment To Master Lease shall modify the original Lease as set forth on Exhibit F attached hereto.
ARTICLE III     
CONDITIONS TO THE OBLIGATION OF BUYER TO CLOSE
The obligations of Buyer hereunder are subject to the satisfaction or waiver by Buyer of the conditions set forth below. Should any condition set forth in this Article III not be fulfilled or waived on the Closing Date to the satisfaction of Buyer, Buyer may, at its option, without waiving any rights provided in this Agreement, terminate this Agreement by delivering notice of such termination to Seller prior to Closing, and thereafter be relieved of all obligations hereunder. If Buyer fails to terminate this Agreement prior to Closing, all conditions set forth in this Article III will be deemed to have been satisfied or waived by Buyer; provided, however, that in no event shall any such deemed satisfaction or waiver be deemed to limit or release Seller, Owner, or Lessee from any damages or liabilities resulting from a breach of any express representations, warranties or covenants of Seller, Owner, or Lessee hereunder or under the other Transaction Documents.  This entire Article III shall only apply to the Purchased Facilities.  Notwithstanding the foregoing, in the event an Option Property Seller doesn’t fulfill the obligations set forth in this Article III for each Option Property, regardless of such Option Property Seller’s obligations under the applicable Option Agreement, Seller shall be responsible for any expenses incurred by Buyer as a result thereof and Buyer may deduct any such expenses from the applicable Option Transfer Purchase Price.
Section 3.1    Performance. Owner, Seller, Lessee, and their respective Affiliates shall have performed each and all of the covenants and obligations required to be performed by them on or prior to the Closing hereunder and under the Transaction Documents.
Section 3.2    Representations and Warranties; Officer’s Certificates. Each and all of the representations and warranties of Owner, Seller, and Lessee under the Transaction Documents, shall be true and correct on, and as of the Closing Date, as though given as of the Closing Date, and Owner, Seller, and Lessee shall have delivered to Buyer officer’s certificates to that effect.

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Section 3.3    Default. No event shall have occurred that would constitute a default, or which with notice or the lapse of time, or both, would constitute such a default, by Owner, Seller, and/or Lessee under the Transaction Documents.
Section 3.4    Recordation and Costs. Seller shall (a) have made arrangements for the Deed and any other Transaction Documents that, in Buyer’s discretion should be recorded (including Uniform Commercial Code financing statements and/or fixture filings), to be recorded or filed for recordation in the manner required by the laws of the State or any other applicable state, and (b) pay, or arrange to be paid, all costs and fees to be paid by Seller pursuant to Section 2.5, and such arrangements shall be satisfactory to Buyer and its counsel in all respects.
Section 3.5    Title Insurance.
(g)    Buyer shall have received, at Seller’s expense, a commitment from Title Insurer satisfactory to Buyer and its counsel for a policy of title insurance showing good and indefeasible title to the Property in fee simple vested in Buyer as of the Closing, subject only to the Permitted Exceptions. Such policy (the “Title Policy”), when issued, shall:
(i)    be in current Texas promulgated form;
		
	(ii)
	be issued in an amount equal to the Purchase Price; and

(iii)    include such endorsements as Buyer may reasonably require.
(h)    Seller shall provide an owner’s affidavit to the Title Insurer sufficient to remove such standard exceptions that can be removed with an owner’s affidavit.
Section 3.6    Survey. Buyer shall have received, at Seller’s expense, and approved, with respect to each Facility, a final “as-built” ALTA survey completed in accordance with the Minimum Standard Detail requirements for ALTA/ACSM Land Title Surveys, with additional Title A survey requirements, jointly established and adopted by ALTA and ACSM in 1999 that meet the requirements of a Class A Survey as defined therein, certified within thirty (30) days of the Closing Date (or such other form of survey which is in form and substance satisfactory to Buyer). Such survey(s) shall be in form and substance satisfactory to Buyer. Seller shall also deliver to Buyer copies of the floor plans for each Facility.
Section 3.7    Option Agreements. Seller shall have obtained all consents required to assign the Option Agreements to Buyer in accordance with the terms of this Agreement.    
Section 3.8    Termination of Current Facility Leases. Current Tenants shall have executed agreements to terminate the Current Facility Leases effective upon the effective date and time of the Second Amendment To Master Lease.
Section 3.9    Environmental Report. Buyer shall have received, at Seller’s expense, a written Phase I (and Phase II if Buyer deems such report to be necessary) environmental report from a qualified geotechnical or engineering firm acceptable to Buyer, in form and substance satisfactory to Buyer, concerning the presence, handling, treatment and disposal of Hazardous Substances on, in or under each Purchased Facility and disclosing (a) the results of a review of prior uses of such Facility disclosed by local public records, including a chain of title report from the 

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Title Insurer, in form and substance satisfactory to Buyer, showing all previous owners and lessees of such Facility from 1940 to the present; (b) contacts with local officials to determine whether any records exist with respect to the disposal of Hazardous Substances on such Facility; (c) if recommended by such engineering or geotechnical firm or required by Buyer, soil samples and groundwater samples consistent with good engineering practice; and (d) reasonable evaluations of the surrounding areas for sensitive environmental receptors such as drinking water wells or aquifers, hospitals and schools, and evidence regarding the use and/or historical use of such areas.
Section 3.10    Entitlements. Buyer shall have received and approved, with respect to each Facility, evidence satisfactory to it that (a) the Facility complies in all respects with all zoning laws and ordinances, (b) the Facility and/or Lessee holds all licenses, permits, accreditations, authorizations and certifications from all applicable Governmental Authorities required for the operation thereof for its Primary Intended Use and for all other uses (if any) contemplated under the Lease, including the applicable license (the “Health Care License”), from the Texas Department of Human Services (the “Issuing Agency”); (c) the Facility is not subject to, or threatened with, any hold on admissions or other sanction and there are no outstanding, or threatened, notices of deficiency resulting from any survey of the Facility which have not been fully responded to with an acceptable plan of correction with which the Facility is being operated in compliance; and (d) the Facility is, to the extent applicable, (A) duly certified as a provider under the Medicare and Medicaid programs and (B) in compliance in all material respects with all Governmental Requirements, including rules and regulations relating to Medicare/Medicaid fraud and abuse practices and all insurance requirements.
Section 3.11    Condemnation; Casualty. No Condemnation shall be pending or threatened with respect to the Property or any portion thereof and no casualty shall have occurred with respect to the Property or any portion thereof.
Section 3.12    Financial Condition.
3.12.1    Buyer shall have received and approved (a) financial statements for each of Owner, Seller, and Lessee and their consolidated Affiliates, and (b) operating statements for each Facility, in each case for the years ended December 31, 2013, December 31, 2014, December 31, 2015 and the most current year to date 2016.
3.12.2    Buyer shall have received evidence satisfactory to it that no material adverse change in the financial condition, census, business, or prospects of any Purchased Facility or of Owner, Seller; Lessee, and their respective Affiliates has occurred from December 31, 2013 through the Closing;
3.12.3    Buyer shall have received and approved UCC searches against Owner, Seller, and Lessee showing no liens on the Property; and
3.12.4    Buyer shall have received and approved all pending or threatened litigation or governmental proceedings seeking to enjoin, challenge or collect material damages in connection with Seller, Lessee or any Purchased Facility.
Section 3.13    Proceedings. Buyer shall have reviewed and approved all corporate, limited liability company, partnership and other proceedings to be taken by Owner, Seller, and Lessee in connection with the transactions contemplated hereunder and under the other Transaction 

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Documents and the Exhibits hereto and thereto and all documents and certificates incident thereto, including the Organizational Documents of Seller, and Lessee and such other documents and certificates as Buyer or its counsel shall reasonably request.
Section 3.14    Records. Buyer shall have reviewed, to the extent in the possession or control of Seller, originals (or copies thereof certified to Buyer) of all documents or other instruments relating to the Intangible Property, all operating reports and such other records pertaining to the Property as Buyer shall reasonably request.
Section 3.15    Insurance. Buyer shall have received certificates with respect to, and copies of the policies of, the insurance required to be carried by Lessee under the Lease, together with evidence satisfactory to Buyer that the premiums therefor due on or prior to the Closing Date have been paid in full.
Section 3.16    Transaction Documents. (a) Lessee shall have executed and delivered to Lessor two (2) counterpart originals of each of the Second Amendment to Master Lease and amended any and all security agreements, escrow agreements, guaranty and other agreements that were executed in connection with the Lease, (b) Seller shall have executed and delivered the applicable Deed, properly acknowledged and otherwise in recordable form, and the Bill of Sale and Assignment to Buyer, (c) Seller and Option Property Seller shall have executed and delivered to an executed Assignment of Option Agreements for the Austin Facility to Buyer, (d) Seller shall have executed and delivered the Agreement Regarding Future Transactions to Buyer, and (e) all other Transaction Documents, other than the Assignment of the Option Agreements for Option Properties other than the Austin Facility, shall have been duly executed, acknowledged (if applicable) and delivered by and to all appropriate parties thereto.
Section 3.17    Due Diligence. Buyer shall be satisfied with the completion of such other due diligence items as are customary in a transaction of this type.
ARTICLE IV     
CONDITIONS TO THE OBLIGATION OF SELLER TO CLOSE
The obligations of Seller hereunder are subject to the satisfaction or waiver by Seller of the conditions set forth below. Should any condition set forth in this Article IV not be fulfilled or waived on the Closing Date to the satisfaction of Seller, Seller may, at its option, without waiving any rights provided in this Agreement, terminate this Agreement by delivering notice of such termination to Buyer prior to Closing, and thereafter be relieved of all obligations hereunder. If Seller fails to terminate this Agreement prior to Closing, all conditions set forth in this Article IV will be deemed to have been satisfied or waived by Seller; provided, however, that in no event shall any such deemed satisfaction or waiver be deemed to limit or release Buyer from any damages or liabilities resulting from a breach of any express representations, warranties or, covenants of Buyer hereunder or under the other Transaction Documents.  This entire Article IV shall only apply to the Purchased Facilities.
Section 4.1    Performance. Buyer and its Affiliates shall have performed each and all of the covenants and obligations required to be performed by them on or prior to the Closing hereunder and under the other Transaction Documents;

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Section 4.2    Representations and Warranties. Each and all of the representations and warranties of Buyer hereunder shall be true and correct on and as of the Closing Date, as though given as of the Closing Date; and
Section 4.3    Transaction Documents. (a) Buyer shall have executed and delivered to Seller or Lessee (as applicable) two (2) counterpart originals of the Second Amendment to Master Lease, (b) Buyer shall have executed and delivered to Seller the Bill of Sale and Assignment, (c) Buyer shall have executed and delivered to Seller the Agreement Regarding Future Transactions, and (d) all other Transaction Documents, other than the Assignment of the Option Agreements for Option Properties other than the Austin Facility, shall have been executed, acknowledged (if applicable) and delivered by and to all appropriate parties thereto.
ARTICLE V     
REPRESENTATIONS AND WARRANTIES
Section 5.1    By Owner and Seller. Without limiting the representations and warranties of Owner, Seller, Lessee, or their respective Affiliates under the other Transaction Documents, Owner and Seller each jointly and severally represents and warrants as follows as of the Closing Date.  For purposes of this Section 5.1, the terms Purchased Facility and Purchased Facilities shall be deemed to include each Option Property and the representations and warranties contained in this Section 5.1 shall be deemed made as of April 1, 2016 for each Option Property:
5.1.1    Each of Owner, Seller, and Lessee, as applicable, is duly organized, validly existing and, to the extent applicable, in good standing under the laws of its state of organization/formation (and with respect to Lessee, is qualified to do business and is in good standing in the State), has full power, authority and legal right to execute and deliver and to perform and observe the provisions of the Transaction Documents to which it is a party, and otherwise carry out the transactions contemplated thereunder.
5.1.2    This Agreement has been, and on the Closing Date, the other Transaction Documents and all other documents to be executed by Owner, Seller or Lessee hereunder or thereunder will have been, duly authorized, executed and delivered by Seller or Lessee (as applicable) and constitute and will constitute the valid and binding obligations of Owner, Seller or Lessee (as applicable) enforceable against it/them in accordance with their respective terms.
5.1.3    Each of Owner, Seller, and Lessee is solvent, has timely and accurately filed all tax returns required to be filed by it, and is not in default in the payment of any taxes levied or assessed against it or any of its assets, or subject to any judgment, order, decree, rule or regulation of any Governmental Authority which would, in each case or in the aggregate, adversely affect its condition, financial or otherwise, or its prospects, any Purchased Facility or the transactions contemplated hereunder or the Exhibits hereto.
5.1.4    No consent, approval or other authorization of, or registration, declaration or filing with, any Governmental Authority is required for the due execution and delivery of this Agreement, any of the other Transaction Documents or any other documents to be executed by Owner, Seller or Lessee, hereunder, or for the performance by or the validity or enforceability thereof against Seller or Lessee, other than the recording or filing for recordation of the Deed.

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5.1.5    Except as set forth on Schedule 5.1.5, there are no claims, actions, proceedings or investigations, including Condemnation proceedings or tax audits, pending on the Purchased Facilities and, or to Seller’s knowledge on the Option Properties or, to Seller’s knowledge, threatened, against or affecting Owner, Seller, or Lessee, for the Property or the use or operation of the Property as a skilled nursing facility, assisted living, dementia or residential facility (including, without limitation, disputes with tenants, employees, managers, residents, holders of deeds of trust, mortgagees, governmental authorities, utility companies, contractors, adjoining land owners, or suppliers of goods or services), or for or involving revocation of any existing Permits issued to Seller or in respect of the Property or which are otherwise required to operate the Project or to obtain reimbursement of expenses or costs.
5.1.6    The execution and delivery of this Agreement, the other Transaction Documents and all other documents to be executed by Owner, Seller or Lessee hereunder, compliance with the provisions hereof and thereof and the consummation of the transactions contemplated hereunder and thereunder will not result in (a) a material breach or violation of (i) any Governmental Requirement, (ii) the Organizational Documents of Owner, Seller or Lessee; (iii) any judgment, order or decree of any Governmental Authority binding upon Seller or Lessee; or (iv) any agreement or instrument to which Owner, Seller or Lessee is a party or by which it is bound; (b) the acceleration of any obligation of Seller or Lessee; or (c) the creation of any lien, encumbrance or other matter affecting title (other than the Lease and the Permitted Exceptions) to the Property.
5.1.7    The Option Agreements have not been amended or modified, other than the amendments which allow for the assignment of the Option Agreements to National Health Investors, Inc., or its affiliate.  The Option Agreements remain in full force and effect.
5.1.8    Seller has obtained all consents, permits, licenses, approvals and authorizations from Governmental Authorities or other third parties which are necessary to permit the conveyance of the Purchased Facilities in accordance with the provisions of this Agreement.
5.1.9    To the best of Seller’s knowledge, each Purchased Facility and Option Property is in compliance with all applicable zoning ordinances and the Permitted Exceptions.
5.1.10    To the extent necessary to operate each Purchased Facility and any Option Property that has received its license to operate for its Primary Intended Use and/or to receive governmental and/or private payor reimbursements, each Purchased Facility is (a) duly certified as a provider under the Medicare and Medicaid programs (if applicable), (b) in compliance in all material respects with all Governmental Requirements, and (c) not subject to, or threatened with, any hold on admissions or other sanction and there are no outstanding or threatened notices of material deficiencies resulting from any survey of the Purchased Facility which have not been fully responded to with an acceptable plan of correction under which the Purchased Facility is being operated in compliance.
5.1.11    As of the Closing, all managed care contracts and all Medicare and Medicaid participation agreements for each Purchased Facility and Option Facility if it has received its license to operate, if any, will be in full force and effect and no action will have been taken to revoke, cancel, suspend or modify any of such agreements.

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5.1.12    (a) There are no underground tanks located on the Property, there are no Hazardous Substances currently located on the Property (except to the extent the existence thereof does not violate applicable Environmental Laws), and, to the knowledge of Seller, no such tanks have ever been located on the Property and no such Hazardous Substances (except to the extent the existence thereof does not violate applicable Environmental Laws) have ever been present, used, stored, treated, released from or disposed of or on the Property (b) no enforcement, cleanup, removal or other governmental or regulatory actions have, at any time, to the knowledge of Seller, been instituted or threatened with respect to the Property; (c) there is no current or, to the best of Seller’s knowledge, prior violation of, or state of noncompliance with, any environmental law relating to Hazardous Substances with respect to the Property; (d) no claims have been made or, to the best of Seller’s knowledge, threatened by any third party with respect to the Property relating to damage, contribution, cost recovery, compensation, loss or injury resulting from or related to any Hazardous Substance; and (e) to the best of Seller’s knowledge, there are no current, and have been no, businesses engaged in the storage, treatment or disposal of Hazardous Substances (except to the extent the existence thereof does not violate applicable Environmental Laws) on any property adjacent to any Property.
5.1.13    To the best of Seller’s knowledge, no portion of the Property is located within an area of special risk with respect to natural or man-made disasters or hazards, including any Flood Hazard Area.
5.1.14    To the best of Seller’s knowledge, there are no adverse geological or soil conditions affecting the Property or any portion thereof.
5.1.15    All public utilities, including telephone, gas, electric power, sanitary and storm sewer and water, are available for connection at the boundaries of each Purchased Facility.
5.1.16    Except as set forth on the survey, the Property has access to a publicly dedicated roadway. To the best of Seller’s knowledge, there are no encroachments onto the Property nor is anything place on the Property encroaching on any adjoining property.
5.1.17    The Current Tenants are in possession of the Purchased Facilities under the Current Facility Leases. For purposes of this Section 5.1.17, “Current Tenants” shall be deemed to include Legend Oaks – New Braunfels, LLC and Legend Oaks – Austin, LLC and the “Current Facility Leases” shall be deemed to include the New Braunfels Lease and the Austin Lease.
5.1.18    Each of Owner, Seller, and Lessee has delivered to Buyer: (a) copies of the financial statements for itself and its consolidated Affiliates for the years ended December 31, 2013, December 31, 2014 and December 31, 2015, and (b) unaudited operating statements for each Purchased Facility for the period ended January 31, 2016 (collectively, the “Financial Statements”), and the Financial Statements are true, correct and complete in all material respects, have been prepared from and in accordance with the books and records of Owner, Seller and Lessee, and the Facilities, as applicable, and fairly present the financial position and results of operations of Owner, Seller or Lessee and each Purchased Facility, respectively, at the date(s) and for the period(s) indicated.
5.1.19    Since December 31, 2012, there has been no material adverse change in the financial condition of Owner, Seller, Lessee or their respective Affiliates taken as a whole, and since 

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December 31, 2012, there has been no material adverse change in the financial condition of any Purchased Facility from that disclosed in the operating statements.
5.1.20    Each of Owner, Seller, and Lessee has delivered to Buyer copies of all of its Organizational Documents. Such Organizational Documents are true, correct and complete in all material respects.
5.1.21    Neither this Agreement nor any certificate, statement or other document furnished or to be furnished to Buyer by or on behalf of Owner, Seller, or Lessee in connection with the transactions contemplated hereunder and the Exhibits hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading.
5.1.22    Buyer is not required to withhold taxes from the payment of sale proceeds to Seller under the Code or any applicable State, commonwealth, local or other tax laws.
5.1.23    Seller is not a foreign person for purposes of Section 1445 of the Code.
5.1.24    Seller has good, marketable and insurable fee simple title to the Purchased Facilities, and such title will, as of the Closing Date, be free and clear of all mortgages and security interests, leases judgments, and other encumbrances except for the Permitted Exceptions.
5.1.25    Seller owns all of the Personal Property, and such ownership will, as of the Closing Date, be free and clear of all liens, claims, security interests, leases and rights of others. None of the Personal Property is leased by or to Seller, except for the property listed in Schedule 5.1.25. The Personal Property includes all furniture, fixtures, machinery, equipment and other personal property used or useful in the operation of the Purchased Facilities and is sufficient for the operation of the Purchased Facilities as it has been operated and managed heretofore.
5.1.26    Neither Owner, Seller, nor Lessee, nor any Affiliate of Seller or Lessee, is retaining any contiguous or adjacent property to any Purchased Facility or any Option Property.
5.1.27    Except as set forth in the Lease, there are no Commercial Occupancy Arrangements affecting the Property (or any portion thereof), and there is no other Person (as defined in the Lease) in possession or occupancy of the Property (or any portion thereof) nor are there any other persons who have possessory rights to the Property, except for patients or residents of the Purchased Facilities.
5.1.28    The Purchase Price represents fair and adequate consideration for the Property.
5.1.29    The sale of the Property on the terms and conditions set forth in this Agreement, together with the other transactions contemplated herein, are the result of arm’s length transactions among Seller and Buyer and/or their respective Affiliates.
5.1.30    Other than the Permitted Exceptions and Current Facility Leases and Option Agreements, there are no leases, contracts or agreements in effect with respect to the Property which will survive the Closing and be binding upon Buyer or the Property.

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5.1.31    The Property and its current operation and use materially comply with all applicable municipal, county, state and federal laws, regulations, ordinances and orders and with all applicable municipal health and building laws and regulations (including, without limitation, the building and life safety codes), except to the extent that the failure to comply therewith would not have a material adverse effect on the business, property, condition (financial or otherwise) or operation thereof. There are no outstanding deficiencies or work orders with respect to the Property of any authority having jurisdiction over the Property requiring conformity to any applicable statute, regulation, ordinance or bylaw. No Seller has received written or oral notice from any licensing or certifying agency supervising or having authority over the Purchased Facilities requiring it to be reworked or redesigned or additional furniture, fixtures, equipment or inventory to be provided at any Purchased Facility so as to conform to or comply with any existing and applicable law, code or standard. The Purchased Facilities are and have been maintained and operated in compliance with the Occupational Safety and Health Act of 1970 (“OSHA”) and any similar state statute and the rules and regulations promulgated thereunder. None of Seller or, to the knowledge of the Seller, its respective predecessors in interest are or have been subject to an investigation by the U. S. Department of Labor, litigation over compliance with such rules and regulations or any fine, penalty or citation relating to or arising out of a violation or alleged violation of OSHA and any similar state statute and such rules and regulations.
5.1.32    To the best of Seller’s knowledge, there are no structural, mechanical or other conditions of the Purchased Facilities that would have an adverse effect on the ability of Buyer to operate the Purchased Facilities after Closing on a consistent basis with Seller’s operation of the Purchased Facilities prior to Closing. The Personal Property is in good condition and working order, normal wear and tear excepted.
5.1.33    Seller has maintained insurance policies that insure the Purchased Facilities and the other Personal Property continuously since the date Seller or any of its affiliates first owned or operated the Purchased Facilities. Such insurance policies are written on an occurrence basis, against physical damage, general liability, professional liability and worker’s compensation.
5.1.34    Seller has not: (a) made any contributions, payments or gifts to or for the private use of any governmental official, employee or agent where either the payment or the purpose of such contribution, payment or gift is illegal under the laws of the United States or the jurisdiction in which made, (b) established or maintained any unrecorded fund or asset for any purpose or made any false or artificial entries on its books, (c) given or received any payments or other forms of remuneration in connection with the referral of patients that would violate the Medicare/Medicaid Anti-kickback Law, Section 1128(b) of the Social Security Act, 42 USC Section 1320a-7b(b), or any analogous state statute, or (d) made any payments to any person with the intention or understanding that any part of such payment was to be used for any purpose other than that described in the documents supporting the payment.
5.1.35    Since the date of the most recent Financial Statements, there has not been any material adverse change in the business, assets, condition (financial or otherwise) of the Purchased Facilities, and Seller has caused the Purchased Facilities to be operated in the ordinary course and in substantially the same manner as previously operated.
5.1.36    WITH RESPECT TO THE CONDITION OF THE PROPERTY, BUYER AGREES THAT EXCEPT WITH RESPECT TO THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY MADE IN THIS AGREEMENT, BUYER IS RELYING ON ITS 

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OWN INSPECTIONS, EXAMINATIONS AND INVESTIGATIONS IN MAKING THE DECISION TO PURCHASE THE PROPERTY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY CONTAINED IN THIS AGREEMENT AND ANY WARRANTY OF TITLE SET FORTH IN THE DEEDS TO BE DELIVERED AT CLOSING, IT IS UNDERSTOOD AND AGREED THAT SELLERS ARE NOT MAKING AND SPECIFICALLY DISCLAIM ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY. EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT OR ANY WARRANTY OF TITLE SET FORTH IN THE DEEDS TO BE DELIVERED AT CLOSING, BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLERS OR ANY AGENT OF SELLERS. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLERS SHALL SELL, CONVEY, AND ASSIGN TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS,” WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLERS, ANY AGENT OF SELLERS OR ANY THIRD PARTY. THE TERMS AND CONDITIONS OF THIS PARAGRAPH SHALL EXPRESSLY SURVIVE THE CLOSING, NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL BE INCORPORATED INTO THE DEED.
Section 5.2    By Buyer. Buyer represents and warrants as follows:
5.2.1    Buyer is duly formed, validly existing and, to the extent applicable, in good standing under the laws of the state of its organization/formation; is, or will be on the Closing Date, duly qualified and authorized to do business in the State to the extent such qualification is required to perform its obligations hereunder or under any Transaction Document to which it is a party; and has or will have on the Closing Date, full power, authority and legal right to execute and deliver and to perform and observe the provisions of this Agreement, the Transaction Documents and all other instruments provided for herein to which it is a party, and otherwise carry out the transactions contemplated hereunder and the Exhibits hereto.
5.2.2    This Agreement has been, and on the Closing Date all other documents to be delivered by Buyer pursuant to this Agreement will have been, duly authorized, executed and delivered by Buyer and constitute, and will constitute, the valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms.
ARTICLE VI     
COVENANTS OF THE PARTIES AND OTHER MATTERS
Section 6.1    Covenants of Seller and Lessee. Prior to the Closing Date for the Purchased Facilities, and Prior to the Closing Date of any applicable Option Property, Seller shall:
(i)    not amend or permit to be amended any agreement or other instrument related to the Property, other than as disclosed herein, or Seller’s or Lessee’s business;
(j)    timely pay or cause to be paid all income, property, sales and withholding taxes and all ad valorem and other taxes, liens and charges upon the Property and business operated thereon as they become due;

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(k)    not dispose of or encumber or permit the disposition or encumbrance of the Property or any portion thereof;
(l)    not enter into, or assume or permit to be entered into or assumed, any contract, agreement, obligation, lease, license or commitment related to the Property except as contemplated hereunder or under the other Transaction Documents or the Exhibits hereto or thereto and except for Resident and/or Patient Agreements entered into in the ordinary course of Seller’s or Lessee’s business;
(m)    not do any act or omit any act which would cause a breach of any contract, commitment or obligation which would have an adverse effect on the Property or the business conducted thereon;
(n)    promptly advise Buyer in writing of any adverse change in the financial position, assets or earnings of Owner, Seller or Lessee or their respective Affiliates, or in the financial position, assets or earnings of the Property;
(o)    not amend, terminate or waive or permit to be amended, terminated or waived any right related to the Property or the business conducted thereon;
(p)    afford the officers, attorneys, accountants, and other authorized representatives of Buyer access during normal business hours to the Property and to the books and records related to the Property and the business conducted thereon in order to afford Buyer such opportunity of review, examination and investigation as Buyer shall desire with respect to the same and permit Buyer to make extracts from, and take copies of, such books and records as may be reasonably necessary for such purposes;
(q)    give all notices to Governmental Authorities required by law for the transfer of the Property; and
(r)    take all action as may be necessary to comply promptly with any and all Governmental Requirements affecting the Property and all orders of any board of fire underwriters or other similar bodies in connection with the making of repairs and alterations, and promptly, and in no event later than twenty- four (24) hours from the time of its receipt, notify, Buyer of any failure of Seller to comply with the same.
Section 6.2    Notification of Changes. At any time at or prior to the Closing Date for the Purchased Facilities, and Prior to the Closing Date of any applicable Option Property, Seller shall promptly notify Buyer of (a) any change in the condition of the Property or any contiguous or neighboring property which could have a material adverse effect on the Property, Owner, Seller, Lessee or Buyer, or (b) any event or circumstance of which Seller becomes aware which makes any representation or warranty of Seller contained herein untrue or misleading, or any covenant of Owner, Seller or Lessee in the Transaction Documents incapable or less likely of being performed, it being understood that the obligation to provide notice to Buyer under this Section 6.2 shall in no way relieve Owner, Seller or Lessee of any liability for a breach by such party of any of its representations, warranties or covenants contained in the Transaction Documents.
Section 6.3    Effect Transaction; No Assumption of Liabilities. Seller shall take all actions necessary or desirable to effect the transactions contemplated herein. Except as expressly agreed 

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otherwise in writing, Buyer shall not assume or otherwise be responsible for any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created (collectively, the “Excluded Liabilities”). All liabilities and obligations of Seller, including the Excluded Liabilities, shall be retained by and remain obligations of Seller after the Closing.
Section 6.4    Indemnification. In addition to, and without limiting any indemnification obligation of Owner, Seller, Guarantors or Lessee under the Lease or under any other Transaction Document, Owner and Seller, jointly and severally, unconditionally and irrevocably indemnifies, protects and agrees to defend, reimburse and hold harmless Buyer and its Affiliates from and against any and all loss, cost or expense, including reasonable attorneys’ fees, arising from (i) the breach or violation of any representation or warranty of Owner or any Seller contained herein; (ii) the failure of Owner or Seller to satisfy or perform any covenant or other provision contained herein; (iii) any violation of any covenant, condition, or restriction affecting the Property by Owner or Seller; (iv) any encroachment of buildings or other improvements onto adjoining lands or onto easements or licenses or rights-of-way located on the Property which is not a Permitted Exception; (v) the presence or existence of any Hazardous Substance on, in or under the Property; and (vi) any claims made against Buyer or its Affiliates by any third party arising out of the transactions contemplated in this Agreement or the Exhibits hereto, including but not limited to any matters disclosed on Schedule 5.1.5. Payment shall not be a condition precedent to recovery under the foregoing indemnification provision.  Subsection (iv) and (v) of this Section 6.4 shall only apply to the Option Properties as of April 1, 2016.
Section 6.5    Option Agreements. The Option Agreements shall not be amended, modified, assigned or delegated in any way by any party thereto without the prior written consent of Buyer, except as disclosed and described herein.
Section 6.6    Subleases.  Seller agrees to enter subleases for the Option Properties with Ensign effective May 1, 2016 on terms acceptable to Buyer, Seller and Ensign as part of the Ensign Transaction.  If the Ensign Transaction does not close Seller shall not be required to enter into any Subleases.
ARTICLE VII     
OPTION PROPERTY
Section 7.1    Option Properties. Pursuant to the Option Agreements, Seller holds options to purchase the Option Property, described on Exhibit C, which exhibit is incorporated herein by reference, and all improvements, fixtures, Personal Property, Intangible Property rights and appurtenant rights and interests located on, affixed to, or used in connection therewith (each a “Purchase Option”).
7.1.2    Assignment of Purchase Option. Subject to the conditions of this Agreement, Seller hereby agrees to assign and transfer all of its interests in the Purchase Options and Option Agreements to Buyer upon the following terms and conditions:
(a)    NHI will exercise each Purchase Option under the time frames set forth below and subject to the terms and conditions set forth in the Ensign Transaction lease which shall include satisfactory legal review of applicable third party reports (Phase 1, Property Inspection, Title and ALTA Survey), organizational documents, due diligence and regulatory compliance.  The exercise 

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of each Purchase Option and obligation for Buyer to close thereunder shall be subject to and contingent upon Buyer entering into the lease with Ensign on or before May 31, 2016, and subject to and contingent upon Ensign entering into acceptable subleases with Seller for the Option Properties.  The exercise of each Purchase Option and obligation for Buyer to close thereunder will also be subject to and contingent upon satisfactory regulatory performance of Ensign and the absence of any existing, pending or expected regulatory investigations or “bad boy” acts that would include any investigations for fraud, abuse related to any governing body or regulatory body over Ensign’s operations.  Subject to the conditions contained herein, Buyer shall elect to have Seller assign all of its interests in each Purchase Option.  Buyer shall provide written notice to Seller of such election between the first day of the thirteenth (13th) month and the last day of the fourteenth (14th) month following the receipt of notice of the respective Option Property passing of the DADS Life Safety Code Inspection, which notice shall be delivered to Buyer within five (5) days by the Seller.  If Buyer fails to timely elect to have Seller assign all of its interests in any Purchase Option or if Buyer elects and fails to close in the timeframe required hereunder, Seller shall have no obligation to assign its interest in the applicable Purchase Option and may exercise the Purchase Option itself or take any other action it deems proper in regards to the applicable Purchase Option. 
(b)    At Closing of the applicable Option Property, Seller agrees it shall assign all of its interest in the applicable Purchase Option, which Closing shall occur within ninety (90) days of the purchase option election notice by Buyer. Buyer shall pay Seller the Option Transfer Purchase Price upon such assignment. Upon the Closing under any Option Agreement, Seller shall provide Buyer with representations and warranties substantially equivalent to those contained in Section 5.1 for the subject Option Property if, and only if, the Ensign Transaction does not close.
ARTICLE VIII     
MISCELLANEOUS
Section 8.1    Survival. All covenants, representations and warranties made by Owner, Seller and Buyer hereunder or in any certificates or other instruments delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement, the Closing and recordation of the Deed for a period of eighteen (18) months from the applicable Closing Date for each Purchased Facility and Option Facility.
Section 8.2    Brokers. Owner and Seller jointly and severally warrant that it has not had any contact or dealings with any Person or real estate broker which would give rise to the payment of any fee or brokerage commission in connection with this Agreement, and Owner and Seller shall indemnify, protect, reimburse, hold harmless and defend Buyer from and against any liability with respect to any fee or brokerage commission arising out of any act or omission of Owner, Seller or their respective Affiliates. Buyer warrants that it has not had any contact or dealings with any Person or real estate broker which would give rise to the payment of any fee or brokerage commission in connection with this Agreement, and Buyer shall indemnify, protect, hold harmless and defend Seller from and against any liability with respect to any fee or brokerage commission arising out of any act or omission of Buyer.
Section 8.3    Notices. Any notice, consent, approval, demand or other communication required or permitted to be given hereunder (a “notice”) must be in writing and may be served personally, by U.S. Mail or by a nationally recognized overnight courier service that provides written proof of delivery, such as Federal Express, Airborne, or UPS. If served by U.S. Mail or a nationally recognized overnight courier service, it shall be addressed as follows:

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	If to Buyer:
	Texas NHI Investors, LLC
c/o National Health Investors, Inc. 
222 Robert Rose Drive 
Murfreesboro, TN 37129 
Attn: Kristin S. Gaines 
Phone: (615) 890-9100 
Fax: (615) 225-3030 
Email: kgaines@nhireit.com

	 
	 

	with a copy to (which shall not constitute notice):
	Stites & Harbison, PLLC 
401 Commerce Street, Suite 800 
Nashville, TN 37219 
Attn: John Brittingham, Esq. 
Phone: (615) 782-2344 
Fax: (615) 782-0723 
Email: jbrittingham@stites.com

	 
	 

	If to Owner or Seller:
	c/o Legend Healthcare, LLC 
1390 E. Bitters Road 
San Antonio, TX 78216 
Attn: Doug Preston 
Phone: (210) 564-0100 
Fax: (210) 564-0157 
Email: dpreston@legendhc.com

	 
	 

	with a copy to (which shall not constitute notice):
	Strasburger & Price  
2301 Broadway 
San Antonio, TX 78215 
Attn: Chip Sugg, Esq. 
Phone: (210) 250-6165 
Fax: (210) 258-2748 
Email: chip.sugg@strasburger.com 

	 
	 

	If to Option Property Sellers:
	_________________________________
_________________________________
_________________________________

Any notice which is personally served shall be effective upon the date of service; any notice given by U.S. Mail shall be deemed effectively given, if deposited in the U. S. Mail, registered or certified with return receipt requested, postage prepaid and addressed as provided above, on the date of receipt, refusal or non-delivery indicated on the return receipt. In addition, either party may send notices by facsimile or email (provided such facsimile or email is followed by delivery via another method permitted hereunder other than facsimile or email) or by a nationally recognized overnight courier service that provides written proof of delivery (such as Federal Express, DHL or UPS). Any notice sent by facsimile or email shall be effective upon confirmation of receipt in legible form, and any notice sent by a nationally recognized overnight courier shall be effective on the date of delivery to the party at its address specified above as set forth in the courier’s delivery receipt. Either party may, by notice to the other from time to time in the manner herein provided, specify a different address for notice purposes.
Section 8.4    Attorneys’ Fees. If Buyer or Seller brings an action at law or other proceeding against the others to enforce any of the terms, covenants or conditions hereof or any instrument 

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executed pursuant to this Agreement, or by reason of any breach or default hereunder or thereunder, the party prevailing in any such action or proceeding and any appeal thereupon shall be paid all of its costs and attorneys’ fees by the non-prevailing party or parties, on a joint and several basis.
Section 8.5    Successors. This Agreement shall be binding upon Buyer, Owner and Seller and their respective successors and assigns. Notwithstanding the foregoing, the rights and obligations of Owner and Seller under this Agreement may not be assigned without the prior written consent of Buyer, which consent may be given or withheld in the sole and absolute discretion of Buyer. Buyer may, however, assign its rights and obligations hereunder without the consent of Seller.
Section 8.6    Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Buyer or Seller of a breach of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement.
Section 8.7    Invalidity. In the event any one or more of the provisions contained in this Agreement shall, for any reason, be held to, be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.
Section 8.8    GOVERNING LAW. EXCEPT WHERE FEDERAL LAW IS APPLICABLE AND UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD OF PRINCIPLES OR CONFLICTS OF LAW).
Section 8.9    Bulk Sales. Buyer and Seller hereby waive compliance with the notice provisions of any bulk sales statute in effect in the State. Seller shall indemnify, defend and hold harmless Buyer from and against any and all claims, losses, damages, liabilities, costs and expenses (including reasonable legal fees and expenses) paid or incurred by Buyer and arising directly or indirectly out of noncompliance with bulk sales statutes.
Section 8.10    Counterparts. This Agreement may be executed in any number of counterparts (including electronic signature and signatures transmitted by facsimile), each of which shall be a valid and binding original, but all of which together shall constitute one and the same instrument.
Section 8.11    Entire Agreement. This Agreement, together with the other Transaction Documents, the Exhibits hereto and thereto and such other documents as are contemplated hereunder or thereunder, constitute the entire agreement of the parties in respect of the subject matter hereof, and may not be changed or modified except by an agreement in writing signed by the parties.
[END OF TEXT; SIGNATURES APPEAR ON FOLLOWING PAGES]

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IN WITNESS WHEREOF, the parties hereto have caused this Purchase and Sale Agreement to be executed effective as of the day and year first above written.
[SIGNATURE PAGE OF SELLER FOR PURCHASE AND SALE AGREEMENT]

	
		
	 
	BUYER:

	 
	 

	 
	TEXAS NHI INVESTORS, LLC, 
a Texas limited liability company

	 
	 

	 
	 
 
By:       /s/ Eric Mendelsohn

	 
	Name:  Eric Mendelsohn

	 
	Title:    President

[Signatures continue on following pages.]

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[SIGNATURE PAGE OF SELLER FOR PURCHASE AND SALE AGREEMENT]
	
		
	SELLER:
	 

	 
	 

	GLADEWATER REAL ESTATE, LP, a Texas limited partnership
	FIREHOLE RIVER REAL ESTATE HOLDINGS – WEST SAN ANTONIO LTD, 
a Texas corporation

	By: LHC Real Estate Holdings, Inc., a Texas corporation, its General Partner 
 
 
By:       /s/ Martin Tomerlin
	By:  Legend Healthcare – Real Estate Holdings, LLC, a Texas limited liability company, its General Partner 
 
By:       /s/ Martin Tomerlin

	Name:  Martin Tomerlin
	Name:  Martin Tomerlin

	Title:    President
	Title:    Manager

	 
	 

	FIREHOLE RIVER REAL ESTATE HOLDINGS – GRANITE MESA, LTD, 
a Texas limited partnership
	RGV REAL ESTATE HOLDINGS, LTD, 
a Texas corporation

	By:  Legend Healthcare – Real Estate Holdings, LLC, a Texas limited liability company, its General Partner 
 
By:       /s/ Martin Tomerlin
	By:  RGV Real Estate GP, LLC, a Texas limited liability company, its General Partner 
 
 
By:       /s/ Martin Tomerlin

	Name:  Martin Tomerlin
	Name:  Martin Tomerlin

	Title:    Manager
	Title:  President

	 
	 

	FIREHOLE RIVER REAL ESTATE HOLDINGS – SONTERRA, LTD, 
a Texas limited partnership
	FIREHOLE RIVER REAL ESTATE HOLDINGS – EULESS, LP, a Texas limited partnership

	By:  Legend Healthcare – Real Estate Holdings, LLC, a Texas limited liability company, its General Partner 
 
By:       /s/ Martin Tomerlin
	By:  Firehole River, GP, Inc., a Texas corporation, its General Partner

By:       /s/ Martin Tomerlin

	Name:  Martin Tomerlin
	Name:  Martin Tomerlin

	Title:  Manager
	Title:  President

	 
	 

	OWNER: 
 
LEGEND HEALTHCARE, LLC,
	FIREHOLE RIVER REAL ESTATE HOLDINGS – KATY LTD., a Texas limited partnership 

	a Texas limited liability company

 

By:       /s/ Martin Tomerlin
	By:  Firehole River GP – Katy, LLC, a Texas limited liability company, its General Partner

 
By:       /s/ Martin Tomerlin

	Name:  Martin Tomerlin
	Name:  Martin Tomerlin

	Title:  Manager
	Title:  Manager

	 
	 

	 
	 

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EXHIBIT A
Legal Descriptions of Purchased Facilities
Legal Description of Gladewater Facility
All that certain 5.095 acre lot, tract or parcel of land situated in the H.W. Augustine Survey, A-8, City of Gladewater, Upshur County, Texas, being the same called 5.095 acre tract conveyed to Gladewater Real Estate, LP, a Texas Limited Partnership, by deed recorded in Upshur County Clerk’s File No. #200601772, Official Records of Upshur County, Texas, being a part of a called 8.699 acre tract conveyed to Kenneth Skipper as recorded in Volume 443, Page 544, Deed Records of Upshur County, Texas, said 5.095 acres being more particularly described as follows:
BEGINNING at crimped 1/2” iron pipe found for this SWC and the SWC of the overall 8.699 acre tract, also being located on the EBL of a called 16.67 acre tract conveyed to R.D. Carpenter and Loyce Carpenter as recorded in Volume 353, Page 731, Official Records of Upshur County, Texas;
THENCE N 00°38’21” W - 399.36’ (called 399.48’) along this WBL and the Carpenter EBL to a 1/2” iron rod found, for this NWC, and the SWC of the called 3.795 acre tract conveyed to Steven Skurlock and Jill Skurlock as recorded in Volume 250, Page 378, Official Records of Upshur County, Texas;
THENCE N 89°24’12” E - 566.42’ (called 566.19’) along this NBL and the Skurlock SBL to a 1/2” iron rod with RPLS #3940 cap, set for this NEC and the SEC of the Skurlock tract, said NEC being located N 89°24’12” E - 0.44’ from a 1/2” iron rod found, said NEC also being located on the West ROW of FM #2685;
THENCE along a curve in the West ROW of FM #2685 and this EBL, said curve having a radius of 1482.394’, an arc length of 34.87’ a central angle of 01°20’52”, a chord of S 03°00’15” W - 34.87’ to an “X” cut in a concrete drive;
THENCE S 02°19’42” W - 349.90’ along the EBL of this tract and the West ROW of FM #2685, to an “X” cut in the top of a concrete ROW Monument found;
THENCE along a curve in the West ROW of FM #2685, and this EBL, said curve having a radius of 1859.859’, an arc length of 15.22’, a central angle of 00°28’08”, a chord of S 02°33’53” W - 15.22’ to a 1/2” iron rod with RPLS #3940 cap, set for this SEC, being the SEC of the overall 8.699 acres, also being the NEC of the called 11.74 acre tract conveyed to Calvary Baptist Church tract as recorded in Volume 434, Page 69, Official Records of Upshur County, Texas, said SEC being located S 89°24’45” W - 0.38’ from a 1/2” iron rod found;
THENCE S 89°24’45” W - 545.23’ (called 545.08’) along this SBL and the NBL of the Calvary Baptist Church tract to this POINT OF BEGINNING, containing 5.095 acre, more or less.
Legal Description of Marble Falls Facility
Being 5.474 acres consisting of all of Lot 3E-1, a Minor Replat of Lot 3E and part of Tract 4, Holly-Naumann Subdivision Number Three (3), a subdivision located in the City of Marble Falls, Burnet County, Texas, as recorded in Cabinet 4, Slide 44-C of the Plat Records of Burnet County, Texas, also referenced under Clerk’s File No. 0709648 of the Official Public Records of Burnet County, Texas, and being more particularly described by metes and bounds as follows:
BEGINNING     at a 1/2” iron rod found at the northwest corner of said Lot 3E-1;
THENCE, N 28° 26’ 33” E, 333.78 feet to a 1/2” iron rod found along the northwest line of said Lot 3E-1;
THENCE, S 61° O5’ 46” E, 11.49 feet to a 1/2” iron rod found;
THENCE, N 28° 53’ 38” E, 64.98 feet to a 1/2” iron rod found marking the northeast corner of the herein described tract;
THENCE, S 61° 05’ 17” E, 581.56 feet to a 1/2” iron rod found marking the southeast corner of the herein described tract;
THENCE, S 26° 47’ 21” W, 64.96 feet to a 1/2” iron rod set with yellow cap marked “Rosin GRP 2906”;
THENCE, S 29° 18’ 18” W, 348.98 feet to a 1/2” iron rod found marking the southwest corner of the herein described tract;
THENCE, N 61° 05’ 55” W, 471.10 feet to a 1/2” iron rod found along the southwest line of the herein described tract;
THENCE, along a curve to the left with the following parameters:
Length     178.33 feet
Radius     60.00
Delta        170° 17’ 24”
Tangent     706.40
Chord         N 56° 18’ 27” W
Chord Distance 119.57 feet
to the POINT OF BEGINNING.
Legal Description of Sonterra Facility
Lot 14, Block 1, New City Block 16331, Temple Sage Subdivision, Unit 5, in the City of San Antonio, Bexar County, Texas, according to plat thereof recorded in Volume 9555, Page 190, as amended by Volume 9559, Page 187, Deed and Plat Records of Bexar County, Texas.
Legal Description of West San Antonio Facility
Lot 23, Block 8, New City Block 15417, Christ Temple Church-Replat, in the City of San Antonio, Bexar County, Texas, according to plat thereof recorded in Volume 9635, Page 63, Deed and Plat Records of Bexar County, Texas.
Legal Description of McAllen Facility
Lot Thirteen (13) and Lot Sixteen (16), RIDGE PLAZA, an addition to the City of McAllen, Hidalgo County, Texas, as per map or plat thereof recorded in Volume 39, Page 27, Map Records, Hidalgo County, Texas.
Legal Description of Euless Facility
Lot 1R, Block A, WESTPARK NURSING CENTER, an addition to the City of Euless, Tarrant County, Texas, according to the Replat recorded in Instrument No. D210042848 of the Plat Records of Tarrant County, Texas.
Legal Description of Katy Facility
Tract 1 (Fee):
A 2.3422 acre tract of land being all of Restricted Reserve “D” of Katy Medical Complex Sec. 2, a subdivision in Harris County, Texas according to the map or plat thereof recorded under Film Code No. 603146 of the Map Records of Harris County, Texas.
Tract 2 (Easement):
Appurtenant access easements as reflected by instruments recorded under Clerk’s File Nos. Y393343 (as amended by Z155583) and Z235932 of the Real Property Records of Harris County, Texas.

EXHIBIT B
Form of Bill of Sale and Assignment
(_________________________ Facility)
THIS BILL OF SALE AND ASSIGNMENT (this “Bill of Sale and Assignment”)’ is made this _____ day of ______________________, 2016, by and between _________________, a (“Transferor”), and Texas NHI Investors, LLC, a Texas limited liability company (“Transferee”).  All capitalized terms used herein, but not specifically defined herein, shall have the meanings given to such terms in that certain Contract of Acquisition dated of even date herewith (the “Agreement”) by and between Transferor and Transferee.
RECITALS
A    Transferor is the owner of that certain real property located in _______________ County, Texas, consisting of approximately _____ acres as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”).  Transferor is also the owner of all buildings, structures and other improvements situated on the Land comprising the approximately __________ square foot, __________ unit _________________ facility (collectively, the “Improvements”), together with the Personal Property (as defined herein) used in connection therewith. The Land and the Improvements shall be referred to herein, collectively, as the “Facility.”
B    Pursuant to the Agreement, Transferor is required to transfer and assign to Transferee as of the Closing Date (as defined in the Agreement) all of Transferor’s right, title and interest in and to the Facility, including the Personal Property.
C    In order to perfect the transfer and vesting of the Personal Property to and in Transferee and in order that Transferee shall be in possession of an instrument evidencing the same, as set forth more fully herein and in the Agreement, Transferor and Transferee have made and entered into this Bill of Sale and Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Transferor and Transferee hereby agree as follows:
1.    Transfer and Assignment of Personal Property.  Effective as of the date hereof, Transferor hereby grants, assigns, transfers, conveys and delivers to Transferee, absolutely and unconditionally, and free from all encumbrances and other claims of any kind, all of Transferor’s right, title and interest in and to all Intangible Property (as defined in the Agreement) and all tangible personal property of every kind and nature located at, upon or about, or affixed or attached to, or installed in the Facility or used or to be used in connection with and incorporated into or otherwise relating to the Facility or its ownership, planning, development, construction, operation and/or maintenance, including the following:
(a)    All equipment, machinery, fixtures, furniture and furnishings and other tangible personal property, including all components thereof, now or on the Closing Date located in, on or used in connection with the Facility, including all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air cooling and air conditioning systems, apparatus, sprinkler systems, fire and theft protection equipment, built-in oxygen and vacuum systems, tools, repair parts, appliances and communications equipment, to the extent any of the foregoing items are not conveyed to Transferee as part of the Facility pursuant to the warranty deed executed by Transferor and delivered to Transferee concurrently herewith; and
(b)    Those specific items of tangible personal property described on Exhibit B attached hereto.
The foregoing is herein referred to, collectively, as the “Personal Property.”  In no event shall the Personal Property include any of the Excluded Property (as defined in the Agreement). Transferor hereby warrants and defends unto Transferee, its successors and assigns, all right, title and interest in the Personal Property against every person whomsoever claiming all or any part thereof or interest therein.
2.    Acceptance.  Except as otherwise provided in the Agreement, Transferee hereby accepts the foregoing transfer and assignment of Personal Property.
3.    Further Assurances.  Transferor transfers the Personal Property to Transferee, its successor and assigns, to have and hold to and for its and their own use and benefit forever. Transferor, for itself and its successors and assigns, hereby covenants that, from time to time after the Closing Date, at Transferee’s request and without further consideration, Transferor shall execute and deliver such other instruments of conveyance and transfer and take such other actions as Transferee reasonably may require to vest more effectively the Personal Property in Transferee, its successors and assigns, and to place Transferee in possession of the Personal Property, and to do all other things and execute and deliver all other instruments and documents as may be required to effect the same.
4.    Enforcement.  In the event of any action or suit by either party hereto against the other arising from or interpreting this Bill of Sale and Assignment, the prevailing party in such action or suit shall, in addition to such other relief as may be granted, be entitled to recover its costs of suit and actual attorneys’ fees, whether or not the same proceeds to final judgment.
5.    Successors and Assigns.  This Bill of Sale and Assignment shall be binding upon and inure to the benefit of Transferor and Transferee and their respective successors and assigns.
6.    Counterparts.  This Bill of Sale and Assignment may be executed in multiple counterparts, all of which shall be but one and the same instrument, binding on all parties when all separately executed copies have been fully delivered.
7.    Governing Law.  This Bill of Sale and Assignment shall be construed and enforced according to and governed by the laws of the State in which the Land is located.
IN WITNESS WHEREOF, Transferor and Transferee have executed this Bill of Sale and Assignment as of the date first written above.
	
		
	“Transferor”
	“Transferee”

	 
	 

	_____________________________________
	TEXAS NHI INVESTORS, LLC, 
a Texas limited liability company

	 
	 

	Name:    
 
Title:   
	 
 
By:   

	 
	Name:  Eric Mendelsohn

	 
	Title:    CEO and President

[INSERT NAME OF APPROPRIATE ENTITY FOR EACH OF TRANSFEROR AND TRANSFEREE.]

EXHIBIT A TO BILL OF SALE AND ASSIGNMENT
[ Legal Description — Land ]
EXHIBIT B TO BILL OF SALE AND ASSIGNMENT
[Itemized List of Personal Property]

EXHIBIT C
Legal Description of Option Properties
Legal Description of New Braunfels Facility
Lot 1, Generations Subdivision, a subdivision in Comal County, Texas according to the map or plat recorded under Document No. 2014 06020124, Map and Plat Records of Comal County, Texas.
Legal Description of Waxahachie Facility
BEING all that certain lot, tract, or parcel of land situated in the HENRI LEVY SURVEY, Abstract No. 629 in the City of Waxahachie, Ellis County, Texas, and all of a called 6.3253 acre tract of land as conveyed to WCE 2013 Charitable Remainder Unitrust by deed as recorded in Volume 2733, Page 1190 of the Official Public Records of Ellis County, Texas (OPRECT), and being a 1.314 acre portion of a called 10.083 acre tract of land as conveyed to William C. Estes by deed as recorded in Volume 2724, Page 1690 of the Official Public Records of Ellis County, Texas (OPRECT), and the aforesaid two tracts being contiguous and hereinafter considered as one tract and being more particularly described as follows:
BEGINNING at a 1/2” steel rod found with cap #4466 for the northeast corner of said 6.3253 acre tract and same for this tract and the northwest corner of the residual of a called 57.928 acre tract of land conveyed to Moritz Interests, Ltd. by deed as recorded in Volume 1844, Page 1118 OPRECT in the south line of a called 186.005 acre tract of land conveyed to Moritz Interests, Ltd. by deed as recorded in Volume 1826, Page 699 OPRECT and being in the occupied north line of said LEVY survey and the occupied south line of the HENRY SANGE SURVEY, Abstract No. 1009; said northeast corners bears N 88°39’12” E, 958.62 feet from a 5/8” steel rod found for the northwest corner of said 10.083 acre tract in the east line of U.S. HIGHWAY 77 NORTH, a variable width right of way; (with the bearing basis for this description from GPS observation, Texas Co-Ordinate System, North Central Zone, and having a beginning co-ordinate of: Northing = 6844573.87, Easting = 2481660.91)
THENCE S 06°05’10” W, 620.74 feet (same as deed) to a 1/2” steel rod set for the southeast corner of said 6.3253 acre and same for this tract and an existing southwest corner of said residual of 57.928 acre tract and in the north line of COUNTRY MEADOWS BOULEVARD, a 60’ wide right of way as dedicated in Cabinet G, Slide 124 of the Plat Records of Ellis County, Texas (PRECT);
THENCE along the south line of said 6.3253 acre tract and same for this tract and the north line of said COUNTRY MEADOWS BOULEVARD as follows:
Southwesterly, 12.72 feet along the arc of a counter clockwise curve having a radius of 480.00 feet (Long Chord=S 81°17’37” W, 12.72 feet) to a 1/2” steel rod set;
Southwesterly, 108.74 feet along the arc of a clockwise curve having a radius of 420.00 feet (Long Chord=S 88°03’20” W, 108.44 feet) to a 1/2” steel rod set;
N 84°31’37” W, 21.27 feet to a 1/2” steel rod set;
Northwesterly, 247.77 feet along the arc of a clockwise curve having a radius of 420.00 feet (Long Chord=N 67°37’37” W, 244.19 feet) to a 1/2” steel rod set;
N 50°43’37” W, 119.72 feet to a 1/2” steel rod set;
Northwesterly, 5.18 feet along the arc of a counter clockwise curve having a radius of 480.00 feet (Long Chord=N 51°02’11” W, 5.18 feet) to a 1/2” steel rod set for the southwest corner of said 6.3253 acre tract and the southeast corner of said 1.314 acre portion of said 10.083 acre tract;
THENCE Northwesterly, 158.47 feet continuing along the arc of said counter clockwise curve having a radius of 480.00 feet (Long Chord=N 60°48’13” W, 157.75 feet) and along the south line of said 10.083 acre tract and same for this tract and the north line of said COUNTRY MEADOWS BOULEVARD along the arc of said curve to a 1/2” steel rod set for the southwest corner of said 1.314 acre portion of said 10.083 acre tract and same for this tract;
THENCE N 06°00’00” E, 358.97 feet through said 10.083 acre tract and along the west line of this tract to a 1/2” steel rod set for the northwest corner of said 1.314 acre portion of said 10.083 acre tract and same for this tract in the north line of said 10.083 acre tract and in the south line of said 186.005 acre tract and in said LEVY-SANGE survey line, said northwest corner bears N 88°39’12” E, 327.69 feet from a 5/8” steel rod found for the northwest corner of said 10.083 acre tract in the east line of U.S. HIGHWAY 77 NORTH, a variable width right of way;
THENCE N 88°39’12” E along the north line of said 10.083 acre tract and same for this tract and the south line of said 186.005 acre tract and along said survey line, passing at 146.20 feet a 1/2” steel rod set for the northeast corner of said 1.314 acre portion of said 10.083 acre tract and the northwest corner of said 6.3253 acre tract, continuing along the north line of the 6.3253 acres tract, in all, 630.93 feet to the POINT OF BEGINNING and containing approximately 7.6363 acres of land.
Legal Description of Garland Facility
Tract 1:
Lot 2R, Block 1, of ILT Addition Replat of Lots 2&3, Block 1, an addition to the City of Garland, Dallas County, Texas, according to the Map or Plat thereof recorded under Document No. 201500066626, Official Public Records of Dallas County, Texas.
Tract 2:
Easement estate as defined and established by that certain Reciprocal Easement Agreement by and between Harold F. Peek d/b/a Peek Properties, et al. and QuickTrip Corporation, dated September 23, 2008, and recorded under Document No. 200800310888, Official Public Records of Dallas County, Texas.
Tract 3:
Easement estate as defined and established by that certain Utility Easement executed by The Charter School Fund II – Garland LLC, an Idaho limited liability company to Crossroads Centre, a Texas general partnership, Peek Properties & Investments, Ltd., a Texas limited partnership, and Harold F. Peek, individually, as recorded under Document No. 201300062737, Official Public Records of Dallas County, Texas.
Tract 4:
Easement estate as defined and established by that certain Drainage Easement executed by The Charter School Fund II – Garland LLC, an Idaho limited liability company to Crossroads Centre, a Texas general partnership, Peek Properties & Investments, Ltd., a Texas limited partnership, and Harold F. Peek, individually, as recorded under Document No. 201300062738, Official Public Records of Dallas County, Texas.
Tract 5:
Easement estate as established and defined by that certain Cross Access Easement recorded under Document No. 201500067247, Official Public Records of Dallas County, Texas.
Legal Description of Fort Worth Facility
BEING all that certain tract or parcel of land situated in Tarrant County, Texas, and being 10.64 acres of land situated in the William McCowen Survey, Abstract No. 999, approximately 12 miles Northeast of Fort Worth, Texas, and being more particularly described by metes and bounds as follows:
BEGINNING at a found 3/8” iron rod on the South right-of-way line of Golden Triangle Boulevard (120’ ROW), formerly known as County Road No. 4012, said point being on the common line between the E. Crawford Family Limited Partnership tract (Volume 12931/ Page 414) and the Piedmont Beach Partners, L.P. tract (15463/90);
THENCE South 00 degrees 19 minutes 17 seconds East, with the common line between said Crawford tract and said Piedmont Beach Partners, L.P. tract, for a distance of 710.71 feet to a 5/8” iron rod with cap stamped “TNP” set at the most southerly northeast corner of Crawford Farms Blocks 1 thru 9 addition, an addition to the City of Fort Worth, as shown on plat recorded in Cabinet A, Slide 7124, Plat Records of Tarrant County, Texas;
THENCE South 89 degrees 32 minutes 24 seconds West, with a north line of said Crawford Farms addition, for a distance of 632.78 feet to a 5/8” capped iron rod (stamped “TNP”) set in an ell corner of said Crawford Farms addition;
THENCE North 04 degrees 31 minutes 54 seconds East, along an east line of said Crawford Farms addition, for a distance of 715.80 feet to a 5/8” iron rod with cap stamped “5136” found on the south right-of-way line of said Golden Triangle Boulevard;
THENCE North 00 degrees 13 minutes 20 seconds West, for a distance of 60.43 feet;
THENCE North 89 degrees 46 minutes 40 seconds East, a distance of 572.46 feet;
THENCE South 0 degrees 00 minutes 00 seconds, for a distance of 60.43 feet to the POINT OF BEGINNING, and containing 10.64 acres of land, more or less of which 0.79 acre lies within Golden Triangle Boulevard, leaving a net area of 9.85 acres.
Legal Description of Austin Facility
Lot I, Block A, of COLLINWOOD WEST SECTION 1-B, a subdivision in Travis County, Texas, according to the map or plat recorded under Document Number 200000112 of the Official Public Records of Travis County, Texas, as affected by that Certificate of Approval recorded under Document Number 2000055229 of the Official Public Records of Travis County, Texas, and by that Confirmation and Ratification of Plat recorded under Document Number 2002000774 of the Official Public Records of Travis County, Texas.

EXHIBIT D
Base Purchase Price Allocation
	
				
	Purchased Facilities
	 

	 
	 

	Gladewater Facility
	

	$18,600,000.00
	

	 
	 

	Marble Falls Facility
	

	$15,550,000.00
	

	 
	 

	Sonterra Facility
	

	$17,200,000.00
	

	 
	 

	West San Antonio Facility
	

	$17,017,683.00
	

	 
	 

	McAllen Facility
	

	$10,217,317.00
	

	 
	 

	Euless Facility
	

	$13,375,000.00
	

	 
	 

	Katy Facility
	

	$16,040,000.00
	

	 
	 

	TOTAL FOR ALL PURCHASED FACILITIES
	

	$108,000,000.00
	

	
				
	 
	 

	Austin Facility
	

	$10,500,000.00
	

	 
	 

EXHIBIT E
Names of Buyer’s Affiliates in which title to each Property is to be vested are as listed below:
	
		
	Property Identification
	Grantee/Transferee

	Gladewater Facility
	Texas NHI Investors, LLC

	Marble Falls Facility
	Texas NHI Investors, LLC

	Sonterra Facility
	Texas NHI Investors, LLC

	West San Antonio Facility
	Texas NHI Investors, LLC

	McAllen Facility
	Texas NHI Investors, LLC

	Euless Facility
	Texas NHI Investors, LLC

	Katy Facility
	Texas NHI Investors, LLC

	 
	 

	Austin Facility
	Texas NHI Investors, LLC

	New Braunfels Facility
	Texas NHI Investors, LLC or affiliate

	Waxahachie Facility
	Texas NHI Investors, LLC or affiliate

	Garland Facility
	Texas NHI Investors, LLC or affiliate

	Fort Worth Facility
	Texas NHI Investors, LLC or affiliate

EXHIBIT F
Second Lease Amendment to Master Lease
See attached.

SCHEDULE 5.1.5
Threatened/Pending Litigation
	
				
	Facility
	Claimant
	Date of Incident
	Details/Request

	 
	 
	 
	 

	Gladewater Facility
	N/A
	N/A
	N/A

	Austin Facility
	City of Austin
	N/A
	City of Austin against the Travis County Appraisal District, et al, under Cause No. D-1-GN-14-003492

	Marble Falls Facility
	N/A
	N/A
	N/A

	Sonterra Facility
	N/A
	N/A
	N/A

	West San Antonio
	N/A
	N/A
	N/A

	McAllen Facility
	N/A
	N/A
	N/A

	Euless Facility
	N/A
	N/A
	N/A

	Katy Facility
	N/A
	N/A
	N/A

28
20289N:160040:1158741:10:NASHVILLEExhibit

Exhibit 10.2 

EXECUTION COPY

EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made this 16th day of February, 2016, between Citrix Systems, Inc., a Delaware corporation (“Citrix”) and Christopher Hylen (the “Executive”).
WHEREAS, Citrix is pursuing the potential spinoff of its GoTo family of products (the “Spinoff”); and 
WHEREAS, Citrix desires for the company resulting directly from the Spinoff (the “Company”) to employ the Executive as its President and Chief Executive Officer effective on the date of the Spinoff (the “Commencement Date”) on the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.Employment.

(a)Term.  The term of the Executive’s employment with the Company shall commence on the Commencement Date and shall continue until and including the third anniversary of the Commencement Date unless earlier terminated as provided herein or extended as described in this paragraph (the “Initial Term”).  The Initial Term shall be renewed automatically for periods of one year (each, an “Extended Term”) commencing at the third anniversary of the Commencement Date and each subsequent anniversary thereof, unless written notice of non-renewal is given by either party to the other not less than 180 days prior to the end of the Initial Term or any Extended Term.  As used herein, “Term” shall include the Initial Term and any Extended Term, but the Term shall end upon any termination of the Executive’s employment with the Company as provided herein.  Notwithstanding the foregoing, in the event a Change in Control (as defined in Section 6(d)) occurs during the Initial Term or any Extended Term, the Term shall be extended until 12 months after the Change in Control. 

(b)Position and Duties.  During the Term, the Executive shall serve as the President and Chief Executive Officer of the Company, reporting to the Board of Directors of the Company (the “Board”) and the Chairman of the Board, shall have supervision and control over and responsibility for the day‐to‐day business and affairs of the Company and shall have such other powers and duties as may from time to time be prescribed by the Chairman of the Board, provided that such duties are consistent with the Executive’s position or other positions that he may hold from time to time.  While the Executive remains the President and Chief Executive Officer of the Company, he shall be nominated each year as a candidate for re-election as a member of the Board, to serve under the same terms as the other Directors, with no additional compensation.  The Executive shall resign from the Board upon his termination of employment.  Such resignation shall be automatic and without any further action on the Executive’s part, and the Executive agrees to execute any additional documentation with respect thereto reasonably requested by the Company.  The Executive shall devote his full working time and efforts to the business and affairs of the Company.  Notwithstanding the foregoing, the Executive may serve on one outside public board of directors, consistent with the Company’s Corporate Governance Guidelines and with the approval of the Board, which shall not be unreasonably withheld or conditioned, and engage in non-

personal religious, charitable or other community activities as long as such services and activities are disclosed to the Board and do not interfere with the Executive’s performance of his duties to the Company as provided in this Agreement.

(c)Principal Place of Employment.  The Executive’s initial principal place of employment during the Term shall be at the Company’s office at a location in California to be determined by mutual agreement of the Board and the Executive.

(d)Corporate Policies.  During the Term, the Executive shall be subject to all of the Company’s corporate governance and executive compensation policies in effect from time to time, including any stock ownership guidelines.

2.Compensation and Related Matters.

(a)Base Salary.  During the Term, the Executive’s initial annual base salary shall be $525,000.  The Executive’s base salary shall be reviewed at least annually by the Board and may be increased in its discretion but, once increased, may not be decreased.  The base salary in effect at any given time is referred to herein as “Base Salary.”  The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for senior executives.

(b)Incentive Compensation.  During the Term, the Executive shall be eligible to receive variable cash incentive compensation as determined by performance goals established by the Compensation Committee of the Board upon consultation with the Executive.  The Executive’s target annual incentive compensation shall be 100 percent of his Base Salary (“Target Variable Cash Compensation”) and his maximum annual cash incentive compensation shall be 200 percent of his Base Salary.  The cash incentive compensation for the initial year of employment will be pro-rated.  Incentive compensation for any calendar year will be payable within 75 days after the end of such year.

(c)Existing Citrix Equity Awards to be Assumed by the Company.  In connection with completion of the Spinoff:

(i)any outstanding time-based restricted stock units of Citrix held by the Executive as of immediately prior to the Commencement Date (other than any such time-based restricted stock units which become fully vested upon completion of the Spinoff) will be assumed by the Company with (A) an increase in the number of restricted stock units per the formula in the applicable award agreements to retain the aggregate intrinsic value of the awards and (B) no change in the related vesting schedules, including treatment in the event of death or disability; and

(ii)for any performance-based restricted stock units granted to the Executive by Citrix (other than any such performance-based restricted stock units which become vested upon completion of the Spinoff), to the extent unearned as of the date of the Spinoff and unless otherwise agreed to in writing by the Executive, such awards would be cancelled in accordance with their terms and the Executive would receive an equity award from the Company whose value would equal the estimated fair value of such cancelled awards measured at the time of the completion of the Spinoff with (A) no change in any time-based vesting schedule and (B) no change in the related vesting schedules, including treatment in the event of death or disability.

(d)Initial Equity Awards.  As a material inducement to the Executive’s accepting employment with the Company, on the third day following the Commencement Date, the Executive shall 

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be granted equity awards with an aggregate value of $8,000,000 (the “Initial Equity”).  For purposes of the preceding sentence, the number of units granted will be calculated based on the five-day average closing price of a share of the Company’s common stock for the five full trading days immediately following the Commencement Date.  The Initial Equity shall be provided 50 percent in shares of time-based restricted stock units and 50 percent in performance-based restricted stock units.  The shares of time-based restricted stock will vest in three equal installments on each anniversary of the grant date, subject to continued employment of the Executive other than as stated herein.  The performance-based restricted stock units will be based on the Company’s compounded annualized total shareholder return (“TSR”) over a three-year performance period relative to the Company’s peer group as of the grant date of such award as selected by the Compensation Committee of the Board, with 0% earned if TSR is below the 20th percentile of the peer group (threshold), 100% earned if TSR is at the 60th percentile of the peer group (target), and 150% earned if TSR is at the 100th percentile of the peer group (maximum).  Performance between threshold and target levels and between target and maximum levels will be determined through interpolation.

(e)Equity Compensation.  For the first full calendar year during the Term and each year thereafter, the Executive will be eligible to participate in the Company’s long-term incentive equity program.  The structure and terms of the equity grants to the Executive (which will be the same for the senior management team) will be determined by the Compensation Committee of the Board in consultation with the Executive.

(f)Expenses.  The Executive shall be entitled to receive prompt reimbursement for any and all reasonable expenses incurred by him during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its senior executive officers.  Any reimbursement that the Executive is entitled to receive shall (i) be paid as soon as practicable and in any event no later than the last day of the Executive’s tax year following the tax year in which the expense was incurred, (ii) not be affected by any other expenses that are eligible for reimbursement in any tax year and (ii) not be subject to liquidation or exchange for another benefit.

(g)Other Benefits.  During the Term, the Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans.

(h)Vacations.  During the Term and beginning on the Commencement Date, the Executive shall be entitled to accrue up to four weeks paid vacation for each full calendar year of employment, which shall be accrued ratably.  The Executive shall also be entitled to all paid holidays given by the Company to its executives.

3.Indemnification.  The Company and the Executive shall enter into an Indemnification Agreement pursuant to which the Company shall indemnify the Executive with respect to any actions commenced against the Executive in his capacity as a director or officer or former director or officer of the Company, or any affiliate thereof for which he may serve in such capacity, and the Company shall advance on a timely basis any expenses incurred in defending such actions.  The Company agrees to secure and maintain reasonably satisfactory directors’ and officers’ liability insurance with respect to the Executive.  The Executive shall be designated as a “covered person” under the Company’s Director’s and Officer’s insurance coverage and shall be covered to the same extent as other directors and executive officers, including following the termination of the Executive’s employment for the maximum statute of limitations period which could apply to any claim against the Executive which otherwise would be covered by such insurance.

3

4.Termination.  During the Term, the Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

(a)Death.  The Executive’s employment hereunder shall terminate upon his death.

(b)Disability.  The Company may terminate the Executive’s employment if he is disabled and unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period.  If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue.  The Executive shall cooperate with any reasonable request of the physician in connection with such certification.  If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive.  Nothing in this Section 4(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.  

(c)Termination by Company for Cause.  The Company may terminate the Executive’s employment hereunder for Cause.  For purposes of this Agreement, “Cause” shall mean:  a termination of the Executive’s employment which is a result of:

(i)the indictment of the Executive for the commission of any felony or a misdemeanor involving deceit, material dishonesty or fraud, or any willful conduct by the Executive that would reasonably be expected to result in material injury or reputational harm to the Company if he were retained in his position; or

(ii)willful disclosure of material trade secrets or other material confidential information related to the business of the Company and its subsidiaries or affiliates; or 

(iii)willful and continued failure substantially to perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board, which demand identifies the specific actions which the Board believes constitute willful and continued failure substantially to perform the Executive’s duties, and which performance is not substantially corrected by the Executive within 30 days of receipt of such demand; or

(iv)willful and knowing participation in releasing false or materially misleading financial statements or submission of a false certification to the Securities and Exchange Commission; or

(v)failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Board to cooperate, or the willful destruction or failure to preserve documents or other materials known to 

4

be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation. 

For the avoidance of doubt, any termination of the Executive’s employment by the Company shall not constitute a termination for Cause unless (i) the Company provides written notice to the Executive of the Cause for his termination of employment and (ii) the termination of the Executive’s employment is approved by a majority of the members of the Board other than the Executive, in each case with the Executive having been given an opportunity, with the Executive’s counsel present, to explain to the Board any actions or conduct giving rise to a potential termination of his employment for Cause.
(d)Termination Without Cause.  The Company may terminate the Executive’s employment hereunder at any time without Cause.  Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 4(c) and does not result from the death or disability of the Executive under Section 4(a) or (b) shall be deemed a termination without Cause.

(e)Termination by the Executive.  The Executive may terminate his employment hereunder at any time for any reason, including but not limited to Good Reason.  For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent:

(i)a substantial reduction, not consented to by the Executive, in the nature or scope of the Executive’s duties, responsibilities, authorities, powers, functions or duties or change in the Executive’s title to any position other than President and Chief Executive Officer, including, without limitation, any requirement that the Executive report to any person(s) other than the Board and the Chairman of the Board; provided that it will be considered a substantial reduction in duties and responsibilities if after a Change in Control (as defined herein), the Executive is not President and Chief Executive Officer of the ultimate parent of the resulting company and such parent is not a publicly traded company; or

(ii)a reduction in the Executive’s annual base salary or Target Variable Cash Compensation, each as in effect on the Commencement Date or as the same may be increased from time to time hereafter; or 

(iii)the relocation of the Company’s office at which the Executive is expected to be principally employed (the “Current Office”) to any other location more than 35 miles from the Current Office, or the requirement by the Company for the Executive to be based more than 35 miles away from the Current Office, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations; or

(iv)material breach by the Company of any agreements, plans, policies and practices relating to the Executive’s employment with the Company; or

(v)failure to provide the Executive with any payments, rights and other entitlements included hereunder, including without limitation upon a Change in Control as provided for in Section 6 herein; or

5

(vi)the Company’s issuance to the Executive of a notice of non-renewal under Section 1(a) herein. 

“Good Reason Process” shall mean that (1) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (2) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition, if such condition occurs prior to a Change in Control and within 90 days of the first occurrence with respect to a condition that occurs in connection with or following a Change in Control; (3) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (4) notwithstanding such efforts, the Good Reason condition continues to exist; and (5) the Executive terminates his employment within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.
(f)Notice of Termination.  Except for termination as specified in Section 4(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

(g)Date of Termination.  “Date of Termination” shall mean:  (i) if the Executive’s employment is terminated by his death, the date of his death; (ii) if the Executive’s employment is terminated on account of disability under Section 4(b) or by the Company for Cause under Section 4(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company under Section 4(d), the date on which a Notice of Termination is given; (iv) if the Executive’s employment is terminated by the Executive under Section 4(e) without Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 4(e) with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

5.Compensation Upon Termination.

(a)Termination Generally.  If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to his authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(f) of this Agreement) and unused vacation that accrued through the Date of Termination on or before the time required by law but in no event more than 30 days after the Executive’s Date of Termination; and (ii) any vested benefits the Executive may have under any employee benefit or equity plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefit”).

(b)Termination by the Company Without Cause or by the Executive with Good Reason.  During the Term, if the Executive’s employment is terminated by the Company without Cause as provided in Section 4(d), or the Executive terminates his employment for Good Reason as provided in Section 4(e), then the Company shall pay the Executive his Accrued Benefit.  In addition, subject to the Executive signing a separation agreement substantially in the form attached hereto as Exhibit I (the 

6

“Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable, all within 60 days after (i) the earlier of the Date of Termination or (ii) the Executive is provided with the Separation Agreement and Release (the “60-day Period”):

(i)the Company shall pay the Executive a lump sum equal to 1.5 times the sum of (A) the Executive’s Base Salary plus (B) the Executive’s Target Variable Cash Compensation (the “Severance Amount”); and

(ii)(A) all time-based equity awards (including any awards originally subject to performance vesting conditions that remain subject to time-based vesting after satisfaction of such performance conditions) held by the Executive in which the Executive would have vested solely if he had remained employed for an additional 18 months following the Date of Termination shall vest and become exercisable or nonforfeitable and (B) all performance-based equity awards held by the Executive in which the Executive would have vested had he remained employed through the end of the performance period in respect of each such award shall become vested as of the end of such performance period(s) based on the Company’s actual performance through the end of such performance period(s) but such amount shall be further prorated in the manner set forth in the applicable award agreement; and

(iii)for a period of 18 months following the Date of Termination or until the Executive becomes covered under a group health plan of another employer, whichever is earlier, subject to the Executive’s continued copayment of premium amounts in amounts consistent with that applicable to active employees, the Executive, the Executive’s spouse and dependents shall continue to participate in the Company’s health insurance plan (medical, dental and vision) upon the same terms and conditions in effect for other executives of the Company; provided, however, that the continuation of health benefits under this Subsection shall reduce and count against the rights of the Executive, the Executive’s spouse and dependents under COBRA; and

(iv)the Severance Amount shall be paid out in a lump sum on the next regularly-scheduled payroll date following the date the Separation Agreement and Release becomes irrevocable and in any event during the 60-day Period; provided, however, that if the 60-day Period begins in one calendar year and ends in a second calendar year, the Severance Amount shall be paid on the first regularly-scheduled payroll date in the second calendar year and no later than the last day of such 60-day Period; and

(v)the Company shall also pay the Executive the variable cash compensation he would have earned if he had remained employed with the Company in the amount determined by the Compensation Committee of the Board at the completion of the year in which the Date of Termination occurs, with such amount further pro-rated by a fraction, the numerator of which shall be the number of elapsed days in the calendar year through the Date of Termination and the denominator of which shall be 365 (“Pro‐Rated Bonus”).  The Pro-Rated Bonus will be payable within 75 days after the end of the year in which the Date of Termination occurs.

(c)Benefits upon Death/Disability.  During the Term, if the Executive’s employment is terminated on account of death under Section 4(a) or disability under Section 4(b), all time-based equity awards (including any awards originally subject to performance vesting conditions that remain subject to time-based vesting after satisfaction of such performance conditions) held by the Executive on the Date of Termination shall vest and become exercisable or nonforfeitable and all performance-based equity awards held by the Executive on the Date of Termination which the Executive would have vested had he 

7

remained employed through the end of the performance period in respect of each such award shall become vested as of the end of such performance period(s) based on the Company’s actual performance through the end of such performance period(s) but such amount shall be further prorated in the manner set forth in the applicable award agreement.

6.Change in Control Payment.  The provisions of this Section 6 are intended to assure and encourage in advance the Executive’s continued attention and dedication to his assigned duties and his objectivity during the pendency and after the occurrence of a Change in Control.  These provisions shall apply in lieu of, and expressly supersede, the provisions of Section 5(b) regarding severance pay and benefits upon a termination of employment, if such termination of employment occurs within 12 months after the occurrence of the first event constituting a Change in Control.  These provisions shall terminate and be of no further force or effect beginning 12 months after the occurrence of a Change in Control (provided that any obligation to satisfy payment obligations thereafter shall remain in effect until all such payments are made).

(a)Treatment of Equity Awards with Performance-Based Vesting.  Upon a Change in Control, any equity award with performance-based vesting held by the Executive shall be deemed earned either at target or based on actual achievement of the performance metric, if higher, but the shares deemed earned shall remain subject to time-based vesting over the remaining performance measurement period.

(b)Change in Control Benefits.  During the Term, if upon or within 12 months after a Change in Control, the Executive’s employment is terminated by the Company without Cause as provided in Section 4(d) or the Executive terminates his employment for Good Reason as provided in Section 4(e), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming irrevocable, all within the 60-day Period, 

(i)the Company shall pay the Executive a lump sum in cash in an amount equal to two times the sum of (A) the Executive’s current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) the Executive’s Target Variable Cash Compensation; and

(ii)all equity awards held by the Executive shall immediately accelerate and become fully vested, exercisable (if applicable) and nonforfeitable; and

(iii)for a period of 24 months following the Date of Termination or until the Executive becomes covered under a group health plan of another employer, whichever is earlier, subject to the Executive’s continued copayment of premium amounts in amounts consistent with that applicable to active employees, the Executive, the Executive’s spouse and dependents shall continue to participate in the Company’s health insurance plan (medical, dental and vision) upon the same terms and conditions in effect for other executives of the Company; provided, however, that the continuation of health benefits under this Subsection shall reduce and count against the rights of the Executive, the Executive’s spouse and dependents under COBRA; and

(iv)the Company shall pay the Pro-Rated Bonus to the Executive, but the Pro-Rated Bonus shall be calculated based on Target Variable Cash Compensation; and

(v)the amount payable under Sections 6(b)(i) and (iv) shall be paid on the next scheduled payroll date following the date the Separation Agreement and Release becomes irrevocable and in any event during the 60-day Period; provided, however, that if the 60-day 

8

Period begins in one calendar year and ends in a second calendar year, such payment shall be paid on the first regularly-scheduled payroll date in the second calendar year and no later than the last day of such 60-day Period.

(c)Additional Limitation.

(i)Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

(ii)For purposes of this Section 6(c), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 

(iii)The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(c)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”) with the Executive’s consent, which will not be unreasonably withheld.  The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

(d)Definitions.  For purposes of this Section 6, the following terms shall have the following meanings:

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“Change in Control” shall mean any of the following:
(i)any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended and in effect from time to time (the “Exchange Act”) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Exchange Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Company’s Board (“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company); or

(ii)the consummation of a consolidation, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company in a single transaction or series of related transactions (a “Corporate Transaction”); excluding, however, a Corporate Transaction in which the stockholders of the Company immediately prior to the Corporate Transaction, would, immediately after the Corporate Transaction, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the corporation issuing cash or securities in the Corporate Transaction (or of its ultimate parent corporation, if any); or 

(iii)persons who, as of the Commencement Date, constitute the Company’s Board (the “Incumbent Directors”) cease for any reason, including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to the Commencement Date shall be considered an Incumbent Director if such person’s election was approved by or such person was nominated for election by either (A) a vote of at least a majority of the Incumbent Directors or (B) a vote of at least a majority of the Incumbent Directors who are members of a nominating committee comprised, in the majority, of Incumbent Directors; but provided further, that any such person whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or

(iv)any other acquisition of the business of the Company in which a majority of the Board votes in favor of a decision that a Change in Control has occurred within the meaning of this Agreement; or

(v)the approval by the Company’s stockholders of any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (a) solely as the result of an acquisition of securities by the Company that, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of shares of Voting Securities beneficially owned by any person to 30 percent or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting 

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Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 30 percent or more of the combined voting power of all then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of the foregoing clause (a).
7.Section 409A.

(a)Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death.  If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

(b)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses).  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c)To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A‐1(h).

(d)The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A‐2(b)(2).  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(e)The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred 

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compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

8.Third Party Agreement and Cooperation.

(a)Third-Party Agreements and Rights.  The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business.  The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

(b)Litigation and Regulatory Cooperation.  During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company.  The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company.  Any cooperation pursuant to this Section 8(b) is subject to the Company’s obligation to (i) reimburse the Executive for any reasonable and documented expenses incurred during activities reasonably performed at the Company’s request pursuant to this Section 8(b), subject to the same standards and procedures as apply to business expense reimbursements pursuant to the Company’s Travel and Expense reimbursement policy, and (ii) compensate the Executive at a daily rate equal to the sum of the Executive’s annual Base Salary as of the date of the Executive’s separation from employment and the Executive’s Target Variable Cash Compensation, divided by 365, to the extent that the Executive reasonably expends any time in performing activities at the Company’s request pursuant to this Section 8(b) at any time after the Executive’s separation from employment; provided that the Executive acknowledges that he shall not at any time be entitled to compensation for time spent in activities that could have been compelled pursuant to a subpoena, including testimony and related attendance at depositions, hearings or trials.

9.Arbitration of Disputes.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of the Executive’s employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American Arbitration Association (“AAA”) in Santa Clara, California, in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to the selection of arbitrators.  In the event that any person or entity other than the Executive or the Company may be a party with regard to any such controversy or claim, such 

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controversy or claim shall be submitted to arbitration subject to such other person or entity’s agreement.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  This Section 9 shall be specifically enforceable. Notwithstanding the foregoing, this Section 9 shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 9.

10.Consent to Jurisdiction.  To the extent that any court action is permitted consistent with or to enforce Section 9 of this Agreement, the parties hereby consent to the jurisdiction of the Superior Court of the State of California and the United States District Court for the Northern District of California.  Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

11.Integration.  This Agreement, together with the additional agreements referred to herein, constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter.  

12.Withholding.  All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

13.No Mitigation.  The Company agrees that, if the Executive’s employment by the Company is terminated, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 5 or 6 hereof.  Further, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company or otherwise.

14.No Offset.  The Company’s obligation to make the payments provided for in this Agreement and otherwise perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company or any of its Affiliates may have against the Executive or others whether by reason of the Executive’s breach of this Agreement, subsequent employment of the Executive, or otherwise. 

15.Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after his termination of employment but prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to his death (or to his estate, if the Executive fails to make such designation).

16.Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

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17.Survival.  The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

18.Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

19.Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

20.Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

21.Governing Law.  This is a California contract and shall be construed under and be governed in all respects by the laws of the State of California, without giving effect to the conflict of laws principles of such State.  With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Ninth Circuit.  

22.Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

23.Successors.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.  

24.Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

25.Effective Date.  This Agreement will be effective upon the completion of the Spinoff, subject to the Executive’s entry into the Company’s form of confidentiality, non-competition, non-solicitation and assignment of inventions agreement and delivery of a release in favor of Citrix in substantially the form attached to the Executive’s Incentive Agreement with Citrix (with exceptions for his Indemnification Agreement with Citrix and all rights to accrued benefits).  For the avoidance of doubt, Citrix may unilaterally assign this Agreement to the Company in connection with the Spinoff.

This Agreement will not create any right for the Executive to be retained in the employ of Citrix, any successor to Citrix or the Company.  Prior to the completion of the Spinoff (including in the case of a concurrent spin-merge transaction), any termination of the Executive’s employment will be governed by his Incentive Agreement or Change in Control Agreement with Citrix, as applicable.  This Agreement will 

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be void ab initio if (i) Citrix abandons the Spinoff as currently contemplated, (ii) Citrix determines to separate the GoTo family of products in a different manner (including, without limitation, in a concurrent spin-merge transaction), or (iii) the Spinoff does not occur by June 30, 2017.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.
CITRIX SYSTEMS, INC.
By:      /s/  Robert Calderoni                                      
Name: Robert Calderoni
Title: Executive Chairman

    /s/  Christopher Hylen                                                 Christopher Hylen

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EXHIBIT I
SEPARATION AGREEMENT AND RELEASE
I, Christopher Hylen (referred to herein with the pronouns “I,” “me” and “my”), and SpinCo, Inc. (the “Company”) enter into this Separation Agreement and Release (the “Release”) pursuant to Section 5(b) of the Employment Agreement between the Company and me dated ____________, 2016 (the “Employment Agreement”).  I acknowledge that my timely execution and return and my non-revocation of this Release are conditions to my entitlement to the benefits set forth in Section 5 or 6 of the Employment Agreement (the “Severance Benefits”).   I therefore agree to the following terms: 
1.Release of Claims.  I voluntarily release and forever discharge the Company, its parents, subsidiaries, and affiliated entities, and each of those entities’ respective current and former shareholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns (collectively referred to as the “Releasees”) generally from all claims, demands, debts, damages and liabilities of every name and nature, known or unknown (“Claims”) that, as of the date when I sign this Release, I have, ever had, now claim to have or ever claimed to have had against any or all of the Releasees.  This includes, without limitation, the release of all Claims: 

		
	•
	relating to my employment by the Company and my separation from employment; 

		
	•
	of wrongful discharge; 

		
	•
	of breach of contract; 

		
	•
	of retaliation or discrimination under federal, state or local law (including, without limitation, Claims of age discrimination or retaliation under the Age Discrimination in Employment Act, Claims of disability discrimination or retaliation under the Americans with Disabilities Act, Claims of discrimination or retaliation under Title VII of the Civil Rights Act of 1964 and Claims of any form of discrimination or retaliation that is prohibited by the California Unruh Act or the law of any other state); 

		
	•
	under any other federal or state statute; 

		
	•
	of defamation or other torts; 

		
	•
	of violation of public policy; 

		
	•
	for wages, bonuses, incentive compensation, vacation pay or any other compensation or benefits; and 

		
	•
	for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees; 

provided, however, that this release shall not affect my rights under the Company’s Section 401(k) plan, my rights to the Accrued Benefits and the Severance Benefits under the Employment Agreement, my rights to indemnification under the Indemnification Agreement between the Company and me (the “Indemnification Agreement”), my rights to Directors’ and Officers’ insurance, my rights to any vested equity awards, my rights to file an administrative charge or complaint with the Equal Employment Opportunity Commission or other administrative agency, and any rights and claims that cannot be waived by law.  
I agree that I shall not seek or accept damages of any nature, other equitable or legal remedies for my own benefit, attorney’s fees, or costs from any of the Releasees with respect to any Claim released by this Release. I represent that I have not assigned to any third party and I have not filed with any court any Claim released by this Release. 

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2.Ongoing Obligations. I reaffirm my ongoing obligations under the SpinCo, Inc. Confidential Information, Inventions Assignment and Non-Solicitation Agreement between me and the Company dated _____________, 2016 (the “Restrictive Covenant Agreement”), including, without limitation, my obligations to maintain the confidentiality of all confidential and proprietary information of the Company, to return to the Company (in good condition) all of the Company’s equipment, property, and documents (whether in paper, electronic, or other format, and all copies thereof) that are in my possession or control, and refrain from certain competition and solicitation activities for a twelve (12) month period after my separation from employment.  I acknowledge that the execution of Exhibit A to the Restrictive Covenant Agreement, entitled “SpinCo, Inc. Termination Certification” (the “Certification”), is required by the Restrictive Covenant Agreement and accordingly agree to sign and return to the Company, at the same time I return the Release, the Certification (attached hereto as Appendix A) as a condition to my entitlement to the Severance Benefits.  I also reaffirm my ongoing obligations under the SpinCo, Inc. Statement of Company Policy Regarding Insider Trading and Disclosure of Material Non-Public Information (the “Insider Trading Policy”) and agree that those obligations continue to apply following my separation from employment, until such time as any material, nonpublic information possessed by me has become public or is no longer material.  Without limiting the foregoing, I acknowledge and agree that I shall continue to be subject to the remainder of any Quarterly Black Out or Special Black Out (as defined in the Insider Trading Policy), if such black out period was instituted prior to my separation from employment. 

3.Litigation and Regulatory Cooperation. I agree to cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while I was employed by the Company.  My full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  I also agree to cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while I was employed by the Company.  Any cooperation pursuant to this Section 3 is subject to the Company’s obligation to (i) reimburse me for any expenses incurred during activities reasonably performed at the Company’s request pursuant to this Section 3, subject to the same standards and procedures as apply to business expense reimbursements pursuant to the Company’s Travel and Expense reimbursement policy, and (ii) compensate me at a daily rate equal to the sum of my annual base salary as of my separation from employment and my “Target Variable Cash Compensation”, each as defined in the Employment Agreement, divided by 365 to the extent that I reasonably expend any time in performing activities at the Company’s request pursuant to this Section 3 at any time more than 18 months after the date of termination of my employment; provided that I acknowledge that I shall not at any time be entitled to compensation for time spent in activities that could have been compelled pursuant to a subpoena, including testimony and related attendance at depositions, hearings or trials. 
 
4.Non-Disparagement and No Cooperation.  I agree that I will not, at any time in the future, make any written or oral statement that disparages or damages (i) the business of the Company or any affiliate of the Company (together, “Company Parties”), (ii) any products or services of any Company Party, or (iii) any member of the board of directors or management of any Company Party.  The Company will direct its directors and officers not to, at any time in the future, make or cause to be made any written or oral statement that disparages me or my reputation.  I agree that I will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any of the other Releasee, unless under a subpoena or other court order to do so; provided that nothing in this Release shall be 

17

construed to affect my right to participate in any proceeding before a federal or state administrative agency, including, without limitation, by cooperating with any such agency’s request for information or by making any good faith report to a governmental entity concerning any act or omission that I reasonably believe constitutes a possible violation of federal or state law or making other disclosures that are protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation.  In addition, I recognize that the Company’s business relationships with its customers, distributors, resellers and partners (collectively, “Customers and Partners”) are very important to the Company, and that if I - as an important Company representative in its dealings with Customers and Partners during the course of my employment - make any statement (directly or indirectly) to such Customers or Partners about the Company, any other Company Party, employees of any Company Party or the products or services of any Company Party that is untrue or otherwise may be harmful to the Company or any other Company Party, I will be deemed to have violated this Section 4.   

5.California Civil Code Section 1542.  I acknowledge that I have been advised to consult with legal counsel and am familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Being aware of said code section, I agree to expressly waive any rights I may have thereunder, as well as under any other statute or common law principles of similar effect.
6.Right to Consider and Revoke Release. I acknowledge that I have been given the opportunity to consider this Release for a period ending 45 days after the date when it was proposed to me. In the event that I execute this Release within less than 45 days after such date, I acknowledge that such decision was entirely voluntary and that I had the opportunity to consider this Release until the end of the 45-day period. To accept this Release, I shall deliver a signed Release to the Company’s General Counsel within such 45-day period. For a period of seven (7) days from the date when the I execute this Release (the “Revocation Period”), I shall retain the right to revoke this Release by written notice that is received by the General Counsel on or before the last day of the Revocation Period. This Release shall take effect only if it is executed within the 45-day period as set forth above and if it is not revoked pursuant to the preceding sentence. If those conditions are satisfied, this Release shall become effective and enforceable on the date immediately following the last day of the Revocation Period (the “Effective Date”). 

7.Other Terms.
(a)Legal Representation; Review of Release. I acknowledge that I have been advised to discuss all aspects of this Release with my attorney, that I have carefully read and fully understand all of the provisions of this Release and that I am voluntarily entering into this Release. 

(b)Binding Nature of Release. This Release shall be binding upon me and upon my heirs, administrators, representatives and executors. 

(c)Amendment. This Release may be amended only upon a written agreement executed by the Company and me. 

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(d)Severability. In the event that at any future time it is determined by an arbitrator or court of competent jurisdiction that any covenant, clause, provision or term of this Release is illegal, invalid or unenforceable, the remaining provisions and terms of this Release shall not be affected thereby and the illegal, invalid or unenforceable term or provision shall be severed from the remainder of this Release. In the event of such severance, the remaining covenants shall be binding and enforceable. 

(e)Governing Law and Interpretation. This Release shall be deemed to be made and entered into in the State of California, and shall in all respects be interpreted, enforced and governed under the laws of the State of California, without giving effect to the conflict of laws provisions of California law.  The language of all parts of this Release shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against the Company or me. 

(f)Entire Agreement; Absence of Reliance. I acknowledge that I am not relying on any promises or representations by the Company or any of its agents, representatives or attorneys regarding any subject matter addressed in this Release.  I acknowledge that this Release constitutes the entire agreement between the Company and me and that this Release supersedes any previous agreements or understandings between me and the Company, except the Employment Agreement, the Indemnification Agreement, the Restrictive Covenant Agreement, the Insider Trading Policy, and any equity award agreements and equity plans to which they are subject, and any other obligations specifically preserved in this Release.  

So agreed.                                                                                  SPINCO, INC.
                
	
			
	 
	 
	 

	 
	By:
	 

	Christopher Hylen
	 
	Name:

	 
	 
	Title:

Date:                                                                                                                                                     
     

19

Appendix A

SpinCo, Inc.
Termination Certification

This is to certify that except as may be needed to provide transition assistance, I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to SpinCo, Inc., its subsidiaries, affiliates, successors or assigns (together, the “Company”). 
I further certify that I have complied with all the terms of the Company’s Confidential Information, Inventions Assignment and Non-Solicitation Agreement signed by me, including the reporting of any Developments and original works of authorship (as defined therein) conceived or made by me (solely or jointly with others) covered by that agreement.
I further agree that, in compliance with the Confidential Information and Inventions Assignment Agreement and subject to the limitations and restrictions therein, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its clients, consultants or licenses.

	
					
	Date:
	 
	 
	 
	 

	 
	 
	 
	Christopher Hylen
	 

SPINCO, INC.	
					
	Date:
	 
	By:
	 
	 

	 
	 
	 
	Title
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

20

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