Document:

Exhibit 10.1

 

Execution Version

 

PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT
(this “Agreement”), dated as of this 30th day of December, 2016 (the “Effective Date”), is
made and entered into by and between GLOBAL MEDICAL REIT, INC., a Maryland corporation (“Purchaser”), and GREAT
BEND SURGICAL PROPERTIES, LLC, a Kansas limited liability company (“Seller”).

 

RECITALS:

 

A.           WHEREAS,
Seller owns an acute care hospital located at 514 Cleveland Street, Great Bend, Kansas, together with the real property, the improvements
and all appurtenances thereto (the “Facility”), which defined term shall include all of the Assets (as defined
in Recital B below) applicable to the Facility).

 

B.           WHEREAS,
the parties desire to enter into this Agreement pursuant to which Purchaser will purchase, accept and assume from Seller, and Seller
will sell, convey, transfer and assign to Purchaser, the following, hereinafter collectively referred to as the “Assets”:

 

(i)          Seller’s
good and marketable, valid and insurable fee simple title and all other rights, title and interest of Seller in and to the parcel(s)
of real property on which the Facility is located, such real property being more particularly described on Exhibit A, attached
hereto (the “Real Property”);

 

(ii)         Seller’s
fee simple title in and to all buildings, structures, facilities, amenities, driveways, walkways, parking lots and other improvements
located on the Real Property (collectively, the “Improvements”);

 

(iii)        all
right, title and interest of Seller in and to any alleys, strips or gores adjoining the Real Property, any easements, rights of
way or other interests in, on, under or to, any land, highway, street, road or right of way, open or proposed, in, under, across,
abutting or benefiting the Real Property, and any pending or future action for condemnation, eminent domain or similar proceeding,
or for any damage to the Real Property by reason of a change of grade thereof, and all other accessions, appurtenant rights, and
privileges of Seller in and to the Real Property and the Improvements;

 

(iv)        all
fixtures owned by Seller located at the Facility and used in connection with the Facility (the “Personal Property”);
and

 

(v)         all
licenses, permits and warranties benefiting the Facility that are held in Seller’s name.

 

C.           WHEREAS,
simultaneously therewith, Purchaser and Seller intend that Purchaser will lease the Facility to Great Bend Regional Hospital, LLC,
a Kansas limited liability company (“Tenant”) pursuant to a lease in accordance with the terms set forth herein
(the “Facility Lease”), it being understood that the Facility Lease will initially be guaranteed by the physicians
who own the Tenant (the “Guarantors”) on a joint and several basis pursuant to a written Guaranty (the “Guaranty”).

 

     

     

    

 

NOW, THEREFORE, in consideration
of the recitals, and of the mutual agreements, representations, warranties, conditions and covenants herein contained, the parties
hereto agree as follows:

 

ARTICLE
I

 

PURCHASE
AND SALE

 

1.1           Transfer
of Assets. For and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency
of which are herein acknowledged, and subject to the terms and conditions herein provided, Seller shall convey, transfer and assign
the Assets to Purchaser.

 

1.2           Closing.

 

(a)          Unless
this Agreement shall have been terminated pursuant to an express right to terminate as herein provided, the closing hereunder (the
“Closing”) shall occur on or before 5:00 p.m. CT on the date fifteen (15) business days after the expiration
of the Due Diligence Period (as defined in Section 1.7(b) below) (the “Closing Date”). The Closing will
be effective for accounting purposes as of 12:01:01 a.m. on the Closing Date such that the Closing Date will be a day of income
and expense to Purchaser.

 

(b)          On
the Closing Date, all documents and other materials required from Seller under Section 9.1(b) (collectively, the “Seller
Documents”) and from Purchaser under Section 9.1(c) (collectively, the “Purchaser Documents”)
in order to effectuate the consummation of the Closing shall be delivered to the Title Company (as defined in Section 4.10(b)
below), as escrow agent (“Escrow Agent”) (to hold in escrow in accordance with customary conveyancing practices
subject to the consummation of the Closing) by overnight courier, and Purchaser may deliver all of the Purchaser Documents required
hereunder to Escrow Agent on or before the Closing Date (to hold in escrow in accordance with customary conveyancing practices
subject to the consummation of the Closing) by overnight courier.

 

1.3           Purchase
Price. The aggregate purchase price (the “Purchase Price”) for the Assets shall be Twenty-four Million Five
Hundred Thousand and No/100 Dollars ($24,500,000.00), subject to the prorations and further adjustments as provided for in this
Agreement. At the Closing, the Purchase Price shall be paid as in cash, subject to the prorations and further adjustments as provided
for in this Agreement, by wire transfer of immediately available federal funds to Escrow Agent (“Cash Proceeds”).

 

1.4           Deposit.
Within five (5) business days following the Effective Date, Purchaser will deposit the sum of One Hundred Thousand and No/100
Dollars ($100,000.00) (the “Deposit”) with the Title Company as provided herein. At Closing, the Deposit shall
be applied to the Purchase Price.

 

1.5           Payment
of Purchase Price. At Closing, Purchaser shall pay the Purchase Price, adjusted for any prorations, credits and additions for
the benefit of Purchaser or Seller as specified in this Agreement, as set forth in Section 1.3 hereof.

 

     

     

    

 

1.6           No
Assumed Liabilities. At Closing, Purchaser shall NOT assume any liabilities or obligations of Seller whatsoever, fixed or contingent,
and prior to, on and after the Closing Date, Seller shall retain and discharge in the ordinary course all liabilities and obligations
of Seller. Purchaser shall not assume any contracts, equipment leases or leases, and Seller shall remain fully liable for all obligations
thereon. There shall be no adjustment between Purchaser and Seller of taxes, assessments, water charges, utilities, receivables
or rents, if any, premiums on existing insurance policies, if any, or any other items relating to the Assets, it being understood
by the parties that Tenant, as Tenant under the Facility Lease, shall be obligated to pay the same under the terms thereof
from and after the Closing Date.

 

1.7           Due
Diligence Period.

 

(a)          Seller
and Purchaser hereby acknowledge that, as of the Effective Date, Purchaser has not yet had an opportunity to conduct due diligence
and fully review and evaluate all aspects of this transaction and the condition and suitability of the Assets. In order to enable
Purchaser to commence its due diligence review in a timely and efficient manner, Seller agrees to deliver to Purchaser all items
identified on Purchaser’s preliminary due diligence checklist attached hereto as Exhibit B (the “Preliminary
Due Diligence Checklist”) to the extent in Seller’s possession or control on or before the date five (5) business
days after the Effective Date (the “Diligence Delivery Date”). Purchaser may reasonably supplement the Preliminary
Due Diligence Checklist as Purchaser deems appropriate, and Seller shall provide to Purchaser such supplemental items as may be
in Seller’s possession or control (at no cost to Seller) within five (5) business days after written request by Purchaser.
To the extent Seller has any of the items on the Preliminary Due Diligence Checklist in electronic format, Seller shall send true,
correct and complete copies of those items to Purchaser via the internet. To the extent Seller has items on the Preliminary Due
Diligence Checklist in hardcopy, but not in electronic format, Seller shall make true, complete and correct copies of those items
and deliver them to Purchaser via overnight courier.

 

(b)          For
the period (as such period may be extended pursuant to Section 4.10(b) or (c) below, the “Due Diligence Period”)
commencing on the Effective Date and continuing until 5:00 p.m. CT on the fortieth (40th) business day thereafter, Purchaser
shall have the right to terminate this Agreement in the event Purchaser, in Purchaser’s sole discretion, is not satisfied
with the Assets for any reason. If Purchaser does not deliver notice (in accordance with the provisions of this Agreement) to Seller
on or before 5:00 p.m. CT on the last day of the Due Diligence Period that Purchaser will elect to proceed to Closing, then this
Agreement shall automatically terminate, the Deposit shall be refunded to Purchaser, and the parties shall thereafter be released
from all further duties and obligations under this Agreement. If Purchaser elects to proceed to Closing as set forth in this Section
1.7, then this Agreement shall remain in full force and effect, and the Deposit shall become non-refundable, except as otherwise
provided herein.

 

(c)          It
is the intention of Seller and Purchaser to negotiate and finalize the form and content of the Facility Lease on or before the
conclusion of the Due Diligence Period. Upon finalization of the Facility Lease, Seller and Purchaser shall enter into a letter
of agreement evidencing the parties’ agreement as to the form and content of the Facility Lease and attaching the Facility
Lease as an exhibit thereto (the “Letter Agreement”). Notwithstanding anything to the contrary contained herein, should
the parties fail to execute and deliver such Letter Agreement prior to the conclusion of the Due Diligence Period, this Agreement
shall terminate, the parties shall be released and discharged of and from all further obligations and liabilities under this Agreement,
and the Deposit shall be returned to Purchaser.

 

     

     

    

 

ARTICLE
II

 

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

As an inducement to Purchaser
to enter into this Agreement and to consummate the transactions contemplated herein, Seller represents and warrants the following,
each of which warranties and representations is material to and is relied upon by Purchaser:

 

2.1           Organization
and Qualification. Seller is a limited liability company duly organized and validly existing under the laws of the State of
Kansas with full power and authority to own assets and to carry on its business as it is now being conducted and to own or lease
and operate the Assets it owns or leases as and in the place now owned, leased or operated, and as will be leased pursuant to the
Facility Lease, respectively.

 

2.2           Authority;
Binding Effect.

 

(a)          Seller,
Tenant and Guarantors have, and at Closing will have, the full and unrestricted right, corporate power and authority to execute,
deliver and perform this Agreement and to consummate the transactions and perform all obligations contemplated hereby and in all
agreements, instruments and documents being or to be executed and delivered by Seller in connection with such transactions, including,
without limitation, the Seller Documents, the Facility Lease and all agreements, instruments and documents being or to be executed
and delivered by Seller, Tenant and Guarantors in connection with the Facility Lease, including, without limitation, the Guaranty
(collectively, “Related Documents”).

 

(b)          This
Agreement and each Related Document, upon due execution and delivery by Seller, Tenant and Guarantors, will constitute the legal,
valid, and binding obligation of Seller, Tenant and Guarantors enforceable in accordance with its respective terms.

 

(c)          Seller
and Tenant have obtained all required corporate approval required for the execution and consummation of this Agreement, the Related
Documents and all transactions contemplated hereby and thereby.

 

2.3           Licenses.
The Facility is currently licensed to operate for the use set forth in Recital A (the “Permitted Use”).
All permits, licenses, Government Program (as defined below), provider agreements and other authorizations issued and required
by Governmental Authorities in connection with the ownership, maintenance and operation of the Facility, including, without limitation,
such licenses required for the Permitted Use (collectively, the “Licenses”) are in good standing and Seller
has not received written notice that Seller is in violation of any restriction or other rules, regulations, statutes, ordinances
or requirements or any judgments, decrees, writs, injunctions or orders of any Governmental Authority in effect as of the date
hereof, or as enacted or amended from time to time after the Effective Date (collectively, “Applicable Laws”)
in connection with the Licenses or the Facility or otherwise affecting possession, operation and use thereof. Seller or Tenant
is the holder of all the Licenses and there is no other person or entity that operates, manages or leases the Facility (other than
Tenant).

 

     

     

    

 

2.4           Governmental
Authorities. Seller is not required to submit any notice, report or other filing with any federal, state, municipal, foreign
or other governmental or regulatory authority (individually, a “Governmental Authority” and collectively, “Governmental
Authorities”) in connection with Seller’s execution or delivery of this Agreement or any of the Related Documents
or the consummation of the transactions contemplated hereby and no consent, approval or authorization of any Governmental Authority
is required to be obtained by Seller in connection with the execution, delivery and performance of this Agreement.

 

2.5           Taxes.
All real property taxes and assessments and all personal property taxes and assessments in connection with the Assets due and payable
prior to Closing have been paid or, by the time of Closing, will be paid by Seller.

 

2.6           No
Defaults. The execution, delivery and performance of this Agreement and any of the Related Documents by Seller do not and will
not:

 

(a)          Conflict
with or result in any breach of the provisions of, or constitute a default under the articles of incorporation, bylaws, articles
of organization, operating agreement or other governing organizational documents, as the case may be, of Seller;

 

(b)          Violate
any restriction to which Seller is subject or, with or without the giving of notice, the passage of time, or both, violate (or
give rise to any right of termination, cancellation or acceleration under) any mortgage, deed of trust, license, lease, indenture
or other material agreement or instrument, whether oral or written, to which Seller is a party, or by which it or any of the Assets
are bound, which will not be fully satisfied, assigned or terminated on or prior to Closing as a result of the transactions contemplated
in this Agreement, or result in the termination of any such instrument or termination of any provisions in such instruments, or
result in the creation or imposition of any lien, charge or encumbrance upon any of the Assets;

 

(c)          Create
any liens or other encumbrances on the Assets in favor of third parties;

 

(d)          Constitute
a violation of any Applicable Law of any Governmental Authority; or

 

(e)          Result
in the breach or violation of any of the warranties and representations herein set forth by Seller.

 

2.7           Title
to Property and Related Matters.

 

(a)          There
are no violations of any covenants or restrictions encumbering the Assets, and there are no violations of any Applicable Laws relating
to the Licenses or the operation of the Facility for the Permitted Use or any other Applicable Laws of any Governmental Authorities
applicable to the Assets or the operations thereof. Seller has no knowledge of any agreements, documents or instruments which are
not recorded among the land records but which affect the title to the Facility.

 

     

     

    

 

(b)          Seller
is the holder of good and marketable, insurable and valid fee simple title to the Facility free and clear of all Monetary Encumbrances
(as defined in Section 4.10(b)) other than such Monetary Encumbrances as Seller shall pay and discharge in full prior to or on
or at Closing.

 

(c)          The
Facility is supplied with such utilities as are reasonably necessary for the operation of the Facility as currently operated and
for its intended purpose, and Seller has no knowledge of any future plans by any utility provider to curtail or eliminate any utilities
currently serving the Assets. All utility bills and deposits required by any utility provider that are in Seller’s name have
been paid by Seller in the ordinary course of business.

 

(d)          The
Facility abuts on and has direct vehicular access to a public road, or has access to a public road via a permanent irrevocable
and insurable easement benefiting the Real Property upon which the Facility is located, and Seller has no knowledge of, and has
received no notice that alleges any breach or default under any instrument creating any such easement or attempting to terminate
or revoke such easement.

 

(e)          There
are no pending rezoning or other pending land use actions affecting the Assets or any properties in the immediate vicinity of the
Assets. Seller has not received written notice of and has no knowledge of any threatened or contemplated rezoning or other land
use actions affecting or which will affect the Assets, including, without limitation, on properties in the immediate vicinity of
the Assets. The current use of the Facility is lawfully permitted either as a currently conforming use or as a fully legally “grandfathered
use”, and there is no known violation of any Applicable Laws relating to the zoning, land use, building codes or other similar
requirements of Governmental Authorities.

 

(f)          At
the Closing, Seller shall not be indebted to any contractor, laborer, mechanic, materialman, architect or engineer for work, labor
or services performed or rendered, or for materials supplied or furnished, in connection with the Assets for which any such person
could lawfully claim a lien against the Assets.

 

(g)          There
are no condemnation or eminent domain proceedings pending, or, to the knowledge of Seller, threatened or contemplated against the
Assets or any part thereof, or access thereto, and Seller has not received notice, oral or written, of the desire of any public
authority or other entity to take or use the Assets or any part thereof. Between the Effective Date and the Closing, Seller will
give Purchaser prompt written notice of any actual or any threatened or contemplated condemnation of any part of the Assets of
which Seller receives written notice.

 

(h)          There
are no parties other than Seller in possession of the Assets, or any portion thereof, other than Tenant.

 

(i)          There
are no outstanding options or rights of first refusal to purchase the Assets or any portion thereof or interest therein.

 

(j)          The
Assets constitute all of the assets reasonably necessary and sufficient to conduct the operation of the Facility in the manner
that such operation has been conducted by Seller and as required by Applicable Laws.

 

     

     

    

 

2.8           Hazardous
Substances.

 

(a)          For
purposes of this Agreement, “Environmental Laws” means the Resource Conservation and Recovery Act (RCRA), 42
U.S.C. Section 6901 et seq., the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42
U.S.C. Sections 9601 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Toxic Substances
Control Act (15 U.S.C. §2601 et. seq.), the Clean Air Act (42 U.S.C. §7401 et. seq.), the
Safe Water Drinking Act (42 U.S.C. §300(f) et. seq.), the Occupational Safety and Health Act, and all other
applicable state, county, municipal, administrative or other environmental, hazardous waste or substance, health and safety
laws, ordinances, rules, regulations, judgments, orders and requirements of any Governmental Authority relating or pertaining to
(A) any aspect of the environment, (B) the preservation or reclamation of natural resources, (C) the management, release and threatened
release of Hazardous Substances (as hereinafter defined), (D) response actions and corrective actions regarding Hazardous Substances,
(E) the ownership, operation or maintenance of personal and real property that manages or releases Hazardous Substances or at which
Hazardous Substances are managed, (F) common law torts relating to the release of Hazardous Substances, including so-called “toxic
torts”, and (G) environmental or ecological conditions on, under or about the Assets, all as in effect as of the Effective
Date and on the Closing Date. For purposes of this Agreement, “Hazardous Substance” shall mean any and
all substances, wastes, materials, pollutants, contaminants, compounds, chemicals or elements which are defined or classified as
a “hazardous substance”, “hazardous material”, “toxic substance”, “hazardous waste”,
“pollutant”, “contaminant” or words of similar import under any Environmental Law, including, without limitation,
all dibenzodioxins and dibenzofurans, polychlorinated biphenyls (PCBs), petroleum hydrocarbon, including crude oil or any derivative
thereof, any radioactive material, and asbestos-containing materials in any form.

 

(b)          To
Seller’s knowledge, the Assets do not contain any Hazardous Substances, except for Hazardous Substances typically used in,
and in quantities necessary for the day-to-day operation of, the Facility and which are commonly used in other similar facilities,
such as cleaning fluids, insecticides and medicines (the “Common Products”), which Common Products, to Seller’s
knowledge, have been used, transported, stored and disposed of by Tenant in compliance in all material respects with all applicable
Environmental Laws;

 

(c)          There
is no pending or to Seller’s knowledge, threatened litigation or proceeding before any Governmental Authority in which any
person or entity alleges the presence, release or threat of release of any Hazardous Substance or violation of Environmental Laws
at the Facility;

 

(d)          Seller
has not received any notice of, and has no knowledge that, any Governmental Authority or employee or agent thereof has determined,
or threatens to determine, or is investigating, that there is a presence, release or threat of release or placement on, in or from
the Assets, or the generation, transportation, storage, treatment, or disposal at the Assets, of any Hazardous Substance. Seller
shall notify Purchaser promptly of its receipt of any such notice or knowledge after the Effective Date and prior to the Closing
Date;

 

     

     

    

 

(e)          To
Seller’s knowledge, (i) Seller has owned the Assets in compliance with all applicable Environmental Laws, has obtained
all necessary permits under the Environmental Laws for the operation of the Assets, and has not used any of the Assets for the
generation, storage, manufacture, use, transportation, disposal or treatment of Hazardous Substances, and (ii) the Assets
are currently in compliance with all applicable Environmental Laws in all material respects;

 

(f)          There
has been no discharge of any Hazardous Substance on or from any of the Assets during the time of Seller’s ownership or occupancy
thereof; and

 

(g)          Seller
has, or will, deliver to Purchaser copies of all reports or tests in Seller’s possession with respect to (i) the compliance
of the Assets with Environmental Laws and (ii) the presence of Hazardous Substances on, in or from the Facility or the Real Property.

 

2.9           Patriot
Act. Seller is in compliance with the requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”),
and other similar requirements contained in the rules and regulations of the Office of Foreign Assets Control, Department of the
Treasury (“OFAC”) and in any enabling legislation or other Executive Orders or regulations in respect thereof
(the Order and such other rules, regulations, legislation or orders are collectively called the “Orders”). Neither
Seller nor any of its affiliates (A) is listed on the Specially Designated Nationals and Blocked Person List maintained by OFAC
pursuant to the Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules
and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “Lists”),
(B) is a Person (as defined in the Order) who has been determined by competent authority to be subject to the prohibitions contained
in the Orders; or (C) is owned or controlled by (including, without limitation, by virtue of such Person being a director or owning
voting shares or interests), or acts for or on behalf of, any person on the Lists or any other Person who had been determined by
competent authority to be subject to the prohibitions contained in the Orders.

 

2.10         Survey
Reports, Etc.; Compliance with Law. Seller has delivered or, pursuant to Section 1.7, will deliver to Purchaser true and complete
copies of all survey reports, waivers of deficiencies, plans of correction, and any other investigation notices, warnings, correspondence
or reports issued with respect to the Facility (collectively, “Licensing Surveys”), and Seller shall also promptly
deliver to Purchaser any Licensing Surveys received, filed, arising or involving the Facility between the Effective Date and the
Closing Date. There are no material deficiencies or violations noted in any Licensing Surveys and Tenant has remedied, discharged
and complied with all applicable plans of correction, such that there are no current violations or deficiencies with respect to
any of the Licenses. Tenant is currently conducting, and has at all times conducted, its operation of the Facility in compliance
with all Applicable Laws.

 

2.11         Capital
Expenditures. Except for routine expenditures for repairs and replacements in connection with the ongoing maintenance and upkeep
of the Facility, which Seller covenants and agrees to undertake and complete in the ordinary course consistent with past practices
pursuant to Section 4.1 below, Seller does not have any outstanding contracts for capital expenditures relating to the Facility,
nor does Seller have any agreement, obligations or commitments for capital expenditures relating to the Facility, including, without
limitation, additions to property, plant, equipment or intangible capital assets. Seller has not deferred or delayed implementing
any capital expenditures at the Facility and the Facility has been constructed to an institutional (as opposed to residential)
grade, including, without limitation, fire suppression systems and construction standards related to fire suppression.

 

     

     

    

 

2.12         Absence
of Notices. Seller has not received any written notice, and has no knowledge, that any federal, state, county, municipal or
other Governmental Authority is alleging any fire, health, safety, building, pollution, environmental, zoning or other violation
of Applicable Law, including, without limitation, applicable health care licensure laws or violations under the Licenses, with
respect to the Facility or any part thereof.

 

2.13         Financial
Statements. Seller has delivered or will deliver to Purchaser copies of the financial statements listed in the Preliminary
Due Diligence Checklist certified by the chief financial officer of Seller, Tenant and Guarantors (collectively, the “Financial
Statements”). The Financial Statements (including the notes thereto) have been prepared in accordance with generally
accepted accounting principles (“GAAP”) on a consistent basis throughout the periods covered thereby and present
fairly the financial condition of the Facility as of such dates and the results of operation of the Facility for such periods.

 

2.14         No
Litigation. There are no actions, suits, claims, governmental investigations or other legal or administrative proceedings,
or any orders, decrees or judgments in progress, pending or in effect, or, to the knowledge of Seller, threatened against or relating
to Seller or Tenant, the Facility, Tenant’s operation of the Facility, any of the Assets or against or relating to the transactions
contemplated by this Agreement, and there are none pending in state courts, or in any federal courts, or, to the knowledge of Seller,
pending in other jurisdictions or threatened in writing, at law or in equity, by or before any federal, state or municipal court
or other Governmental Authority.

 

2.15         Absence
of Certain Changes or Events. From the date of last inspection by Purchaser through the Effective Date, none of the Facility,
Seller or Tenant has:

 

(a)          Suffered
any Material Adverse Change;

 

(b)          Sold,
transferred or otherwise disposed of, or agreed to sell, transfer or otherwise dispose of, any assets related to or connected with
the Facility having a fair market value at the time of sale, transfer or disposition of $50,000.00 or more in the aggregate, other
than with respect to sales of Inventory in the ordinary course of business, or cancelled, or agreed to cancel, any debts or claims
relating primarily to the Facility in the amount of $50,000.00 or more in the aggregate; or

 

(c)          Made
any change in any method of accounting or accounting practice relating to the Facility.

 

2.16         Condition
of Assets. All of the Assets are in Seller’s possession or control and are located at or on the Facility and all of the
Assets are in good repair and working order.

 

2.17         Truth
of Warranties, Representations, and Statements. All of the statements, representations, and warranties made by Seller in this
Agreement and the statements and information set forth in the attached Exhibits are true and accurate in every material respect.

 

     

     

    

 

2.18         Materials
Provided. All materials provided to Purchaser by Seller either prior to the Effective Date or during the term hereof, including,
without limitation, all items on the Preliminary Due Diligence Checklist, are true, accurate and complete in all material respects.

 

ARTICLE
III

 

REPRESENTATIONS
AND WARRANTIES OF PURCHASER

 

As an inducement to Seller
to enter into this Agreement and to consummate the transactions contemplated herein, Purchaser represents and warrants the following,
each of which warranties and representations is material to and is relied upon by Seller:

 

3.1           Corporate
Organization; Etc. Purchaser is a corporation duly organized and validly existing under the laws of the State of Maryland with
full power and authority to own assets and to carry on its business as it is now being conducted.

 

3.2           Truth
of Warranties, Representations, and Statements. All of the statements, representations, and warranties made by Purchaser in
this Agreement are true and accurate in every material respect.

 

ARTICLE
IV

 

COVENANTS
OF SELLER

 

Seller covenants and agrees
during the period after the Effective Date and through and including the Closing Date as follows:

 

4.1           Regular
Course of Business. Seller shall: (a) cause Tenant to operate the Facility in a manner consistent with all Applicable
Laws, Seller’s past practices and industry standards for the Permitted Use; (b) maintain the Assets in good order and repair
and otherwise in sufficient repair, order and condition to satisfy the representations and warranties as to the condition and quantity
of the Assets set forth in Article II; (c) comply with all Applicable Laws with respect to the Assets and the operation thereof,
including, without limitation, all required regulatory standards of any Governmental Authorities with regulatory jurisdiction over
the Facility and compliance with all Governmental Programs; (d) not enter into any agreements or leases that would have had to
be disclosed on any exhibit hereto had such agreements or leases been entered into prior to the Effective Date without prior written
notice to Purchaser and Purchaser’s approval thereof, which approval shall not be unreasonably withheld; (e) keep in full
force and effect present insurance policies through the Closing Date.

 

     

     

    

 

4.2           Full
Access and Disclosure. The term “Facility Management” means the following personnel: the principals of Seller,
any regional vice presidents (or other personnel with managerial oversight of the Facility), the director or executive director,
as applicable, of the Facility, the head nurse at the Facility and the head maintenance person at the Facility. On the Effective
Date, Seller shall notify the Facility Management of the pending sale/leaseback of the Facility to Purchaser and instruct the Facility
Management to fully cooperate with Purchaser and to treat the pending sale with utmost confidentiality. Thereafter, Seller shall
afford to Purchaser and its counsel, accountants, environmental consultants, engineers, appraisers, lenders and other authorized
representatives (collectively, “Purchaser’s Representatives”) access to the Facility during business hours,
including, but not limited to, the roof, all FF&E, the heating and cooling systems, and any and all financial data and records,
operating data and other information requested, including the Most Recent Financial Statements, audits, inspection reports, plans
of correction with respect to Licensing Surveys, and all contracts, agreements, correspondence files and other documents relating
to the Facility so that Purchaser may have a full opportunity to make such investigations of the Assets and the Facility as Purchaser
shall desire to make, provided, however, Purchaser shall not conduct any invasive investigations, including the sampling
of any environment media, without the prior written consent of Seller. Seller shall be entitled to have a representative present
during Purchaser’s scheduled visits. Seller shall furnish such additional financial and operating data and other information
as Purchaser and Purchaser’s Representatives shall from time to time request, and Seller shall supplement or amend any information,
written or otherwise, previously delivered or otherwise disclosed to Purchaser with respect to any matter hereafter arising which,
if existing or occurring at the Effective Date, would have been required to be set forth or disclosed.

 

4.3           Borrowing.
Seller shall not create or permit to become effective any mortgage, pledge, lien, encumbrance or charge of any kind upon all or
any portion of the Assets.

 

4.4           Consents.
Seller shall obtain, at Seller’s cost and expense, on or prior to Closing, all consents necessary for Seller, Tenant and
Guarantors to fulfill Seller’s, Tenant’s and Guarantors’ obligations to consummate the transactions contemplated
hereby and pursuant to the Facility Lease and the Guaranty, including, without limitation, any required consents of any Governmental
Authority.

 

4.5           Compliance
with Laws. Seller shall comply with all Applicable Laws in conjunction with the execution, delivery and performance of this
Agreement, the transactions contemplated hereby and the ownership, operation and maintenance of the Facility prior to Closing.

 

4.6           Taxes.
To the extent due and payable at any time prior to the Closing Date hereunder and otherwise to the extent necessary to transfer
the Facility to Purchaser in accordance with the terms of this Agreement, Seller shall file all federal, state and local
returns, and, to the extent applicable, estimates and reports and pay all amounts then due, for all taxes for all periods through
and including the Closing Date.

 

4.7           No
Disposition of Assets. Seller shall not sell, lease or otherwise dispose of or distribute any of the Assets or properties
related thereto or necessary for operation of the Facility.

 

4.8           Further
Documentation. Seller agrees that following the Closing, upon written request by Purchaser, Seller will do, execute, acknowledge,
and deliver, or cause to be done, executed, acknowledged, and delivered, all such further acts, deeds, assignments, transfers,
conveyances and assurances as may be reasonably required, in order to more fully assign, grant, transfer, convey, assure and confirm
to Purchaser, or to its successors and assigns, or for aiding and assisting in collecting and reducing to possession, any or all
of the Assets to be sold to Purchaser pursuant to this Agreement. This Section shall survive Closing.

 

     

     

    

 

4.9           Confidentiality.
Seller will use its commercially reasonable efforts to keep confidential all information relating to the terms of this Agreement
and all information relating to Purchaser (other than information that is a matter of public knowledge or that has heretofore been
or is hereafter published in any publication for public distribution or filed as public information with any Governmental Authority)
and such information shall not at any time be used for the advantage of Seller or its representatives or disclosed to third parties
(including Facility-based Employees) by Seller or its representatives, other than to the extent necessary to consummate the transactions
contemplated hereby or as required by Applicable Law.

 

4.10         Title
Insurance and Survey; Environmental Assessments.

 

(a)          Existing
Title Documents. As part of its delivery of the items on the Preliminary Due Diligence Checklist, Seller will provide to Purchaser
a copy of Seller’s currently effective title insurance policy and plats and surveys in its possession that relate to the
Real Property.

 

(b)          Title
Commitment and Survey. Purchaser, at Purchaser’s option, shall use commercially reasonable efforts to obtain the following
prior to the expiration of the Due Diligence Period: (i) an updated real property survey for the Facility (the “Survey”),
and (ii)  a title commitment for the Facility (the “Title Commitment”), issued by a national title company
selected by Purchaser (the “Title Company”), which Title Commitment shall contain a commitment by the Title
Company to issue to Purchaser a title insurance policy on an extended coverage ALTA Owner’s form, in form and substance reasonably
acceptable to Purchaser (the “Title Policy”) insuring the valid fee simple title to the Facility. Seller will
cause all standard exceptions to be deleted from the Title Policy at the Closing, other than exceptions for (i) such itemized matters
shown on the Survey to which Purchaser does not object pursuant to the provisions hereof and (ii) taxes for the year in which the
Closing occurs which are not yet due and payable, and Seller will execute and deliver or otherwise obtain such documents and instruments
as the Title Company shall require, including, without limitation, Seller’s affidavits and gap indemnities. Purchaser shall
have until the expiration of the Due Diligence Period to give written notice to Seller accepting or objecting to the Title Commitment
and Survey, with any such notice of objection specifying the exceptions or other matters to which Purchaser objects. The failure
of Purchaser to object to any matter reflected in the Title Commitment or Survey prior to the expiration of the Due Diligence Period
shall cause such matter to become a Permitted Encumbrance; provided, however, Seller shall be unconditionally obligated
to pay any outstanding indebtedness evidenced by, and cause the release of any lien, mortgage, deed of trust, deed to secure debt,
security agreement, judgment, tax lien or other encumbrance affecting the Assets and capable of being released through or as a
result of the payment of money (collectively, “Monetary Encumbrances”) irrespective of whether Purchaser objects
to same unless and only to the extent that such obligation is waived in writing by Purchaser. Notwithstanding the foregoing, Purchaser
shall not have the right to object to any matters created or consented to in separate written consent by Purchaser, all of which
shall be deemed to be “Permitted Encumbrances” hereunder. If Purchaser objects to any encumbrance or other matter
reflected in the Title Commitment or Survey, Seller shall have ten (10) Business Days from the date of the notice of such objection
within which to cure the same (which cure may be effected by payment and discharge of the objectionable item or by causing the
Title Company to remove the same as an exception or affirmatively insure over such item provided such affirmative insurance shall
be reasonably satisfactory to Purchaser and any lender of Purchaser and sufficient, in Purchaser’s reasonable judgment, to
adequately address Purchaser’s and any lender’s concerns with respect to such matter) and in the event Seller shall
fail or refuse to do so within said ten (10) Business Day period, Purchaser shall have five (5) Business Days thereafter in which
to advise Seller in writing of Purchaser’s election (x) to make such payments as are necessary to effect releases of such
claims Seller is not prepared to cure and to proceed to Closing or (y) to terminate this Agreement by notice to Seller, in which
case the Deposit shall be refunded to Purchaser, and neither party shall have any further rights, duties or obligations hereunder
or (z) to extend the Closing Date for a period not to exceed thirty (30) days to enable Purchaser or Seller to so cure; provided,
however, (i) Purchaser shall have the right, but shall not be obligated, to cure such matters, (ii) if neither party cures such
matters in said thirty (30) day period, Purchaser shall again have the right to terminate this Agreement, in which case the Deposit
shall be refunded to Purchaser, and neither party shall have any further rights, duties or obligations hereunder and (iii) any
such extension shall not limit or affect Seller’s absolute obligation hereunder to cure all Monetary Encumbrances. In the
event that any update to the Title Commitment prior to or on the Closing Date reveals any new matter not previously shown or disclosed
on the prior Title Commitment, then Purchaser will have the same rights of objection, termination and extension of the Closing
Date, and Seller will have the same obligations of cure, as set forth above. In the event Seller undertakes or commits to cure
any item to which Purchaser objects and does not cure the same on or before Closing, completion of such cure to Purchaser’s
satisfaction shall be a condition to Purchaser’s obligation to close the transaction contemplated herein.

 

     

     

    

 

(c)          Environmental
Reports. Seller will provide copies of any previously prepared Phase I environmental assessments or other environmental
assessments in Seller’s possession conducted for the Facility pursuant to the Preliminary Due Diligence Checklist and Seller
will permit Purchaser and its agents to conduct a non-invasive environmental assessment for the Facility (the “Phase I”).
Purchaser will have until the expiration of the Due Diligence Period to approve or disapprove the Phase I in writing delivered
to Seller. If the Phase I recommends that a Phase II Environmental Assessment (a “Phase II”) be ordered for
the Facility, then Purchaser will use commercially reasonable efforts to obtain such Phase II prior to the expiration of the Due
Diligence Period provided Seller has consented to Purchaser conducting such Phase II. In the event Seller does not consent to the
Phase II, Purchaser may terminate this Agreement and Purchaser shall be entitled to a return of its Deposit. In the event Seller
consents to the Phase II, and the Phase II is not completed prior to the expiration of the Due Diligence Period, the Due Diligence
Period shall automatically be extended until the date that is five (5) Business Days after the date that Purchaser receives the
Phase II. Should Purchaser disapprove of any matter set forth in the Phase I or Phase II, Purchaser shall notify Seller in writing
of such disapproval at or prior to the expiration of the Due Diligence Period (as such period may be extended as contemplated above)
(the “Environmental Notice”). The failure of Purchaser to deliver an Environmental Notice to Seller on or prior
to the expiration of the Due Diligence Period shall be deemed to be a waiver by Purchaser of any right to disapprove any matter
specifically set forth in the Phase I or Phase II, respectively. If Purchaser delivers an Environmental Notice to Seller prior
to the expiration of the Due Diligence Period, Seller shall have ten (10) Business Days from the date of Seller’s receipt
of such Environmental Notice in which to advise Purchaser whether or not Seller will cure the same prior to Closing, and if Seller
fails or refuses to do so within said ten (10) Business Day period, Purchaser shall have five (5) Business Days thereafter
in which to advise Seller in writing of Purchaser’s election (x) to waive the matters to which Purchaser objected and to
proceed to Closing or (y) to terminate this Agreement by notice to Seller, in which case the Deposit shall be refunded to Purchaser,
and neither party shall have any further rights, duties or obligations hereunder or (z) to extend the Closing Date for a period
not to exceed thirty (30) days to enable Purchaser or Seller to so cure; provided, however, (i) Purchaser shall have the right,
but shall not be obligated, to cure such matters and (ii) if neither party cures such matters in said thirty (30) day period, Purchaser
shall again have the right to terminate this Agreement, in which case the Deposit shall be refunded to Purchaser, and neither party
shall have any further rights, duties or obligations hereunder. If requested by Seller, Purchaser shall promptly provide Seller
a copy of the Phase I and Phase II (if applicable).

 

     

     

    

 

(d)          No
Solicitation. After the Effective Date and before the Closing Date, Seller shall not directly or indirectly, through any officer,
director, employee, agent or otherwise, solicit, initiate or encourage submission of proposals or offers from any person relating
to any acquisition of all or any portion of the Assets, or any assets of or equity interest in Seller or any business combination
involving Seller, or furnish to any other person any information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any other person to do or seek any of the foregoing.

 

(e)          Capital
Expenditures. Seller shall complete all capital projects as needed on an emergency basis or as otherwise required to maintain
the Facility in good operating condition in a good and workmanlike manner, using materials and labor, all at Seller’s sole
cost and expense.

 

(f)          Changes
in Representations and Warranties. Throughout the period from the Effective Date through and including the Closing Date, Seller
shall give Purchaser prompt written notice of (i) any representation and warranty made by Seller in this Agreement which Seller
hereafter learns was inaccurate or incorrect when originally made and (ii) any event, change or occurrence which would make any
representation or warranty of Seller inaccurate or incorrect as of the time of such event, change or occurrence (Seller hereby
acknowledging and agreeing that all representations and warranties of Seller herein are hereby deemed to re-made and re-affirmed
by Seller each and every day while this Agreement is in effect) and (iii) any event, change or occurrence which will or reasonably
may be anticipated to prevent Seller from making the same representations and warranties as set forth herein on and as of the Closing
Date. The giving of any such notices shall not limit or modify any rights of Purchaser hereunder arising in the case of a breach
of a representation or warranty by Seller, and Purchaser shall have the right to terminate this Agreement at any time prior to
Closing following receipt by Purchaser of any such notice of a materially inaccurate or incorrect representation or warranty, such
determination of materiality to be made by Purchaser in its sole discretion.

 

     

     

    

 

ARTICLE
V

 

COVENANTS
OF PURCHASER

 

Purchaser covenants and
agrees with Seller that:

 

5.1           Compliance
with Laws. Purchaser shall comply in all material respects with all Applicable Laws Purchaser is required to comply with in
connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

 

5.2           Required
Consents; Governmental Approvals. Seller warrants that there are no filings with Governmental Authorities or any permits, approvals,
authorizations or consents of any Governmental Authorities or any municipality, or other governmental agency or administrative
body that authorizes or regulates the operation of the Facility or the conduct of the business thereon as presently operated that
are required to consummate the transactions contemplated by this Agreement.

 

5.3           Further
Documentation. Purchaser agrees that following the Closing Date, upon written request by Seller, Purchaser will do, execute,
acknowledge, and deliver, or cause to be done, executed, acknowledged, and delivered, all such further acts, documents and assurances
as may be reasonably required, without enlarging or extending any obligations or liability of Purchaser under this Agreement in
any manner and without requiring the expenditure of funds by Purchaser, as necessary to fully consummate the transactions contemplated
by this Agreement.

 

5.4           Changes
in Representations and Warranties. Throughout the period from the Effective Date through and including the Closing Date, Purchaser
shall give Seller prompt written notice of any representation and warranty made by Purchaser in this Agreement which becomes materially
inaccurate or incorrect, to the extent Purchaser obtains knowledge of such inaccuracy or incorrectness.

 

ARTICLE
VI

 

INDEMNIFICATION

 

6.1           Indemnification
by Seller. Seller unconditionally and irrevocably indemnifies, protects and agrees to defend and hold harmless Purchaser 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 Seller contained herein; (ii) the failure of Seller to satisfy or perform any covenant or
other provision contained herein; (iii) any violation of any covenant, condition or restriction affecting any Property caused by
Seller or its agents or employees; (iv) any encroachment of buildings or other improvements onto adjoining lands or onto easements
or licenses or rights-of-way located on any Property which is not a Permitted Encumbrances; (v) the presence or existence of any
Hazardous Substance on, in or under any Property; and (v) any claims made against Purchaser by any third party arising out of the
transactions contemplated in this Agreement or the Exhibits hereto (collectively, “Purchaser Indemnified Losses”).
Payment shall not be a condition precedent to recovery under the foregoing indemnification provision.

 

6.2           Indemnification
by Purchaser. Purchaser hereby unconditionally and irrevocably indemnifies, protects and agrees to defend and hold harmless
Seller from and against any and all loss, cost or expense, including costs and reasonable legal fees, incurred by Seller as a result
of the breach or violation of any representation or warranty of Purchaser hereunder. Payment shall not be a condition precedent
to recovery under the foregoing indemnification provision.

 

     

     

    

 

6.3           Notification
of Claims.

 

(a)          A
party entitled to be indemnified pursuant to Section 6.1 or 6.2 above (the “Indemnified Party”) shall
notify the party liable for such indemnification (the “Indemnifying Party”) in writing of any claim or demand
which the Indemnified Party has determined gives rise or will likely give rise to a right of indemnification under this Agreement,
as soon as possible after the Indemnified Party becomes aware of such claim or demand and has made such determination; provided,
however, that the Indemnified Party’s failure to give such notice to the Indemnifying Party in a timely fashion shall
not result in the loss of the Indemnified Party’s rights with respect thereto except to the extent the Indemnified Party
is prejudiced by the delay. Subject to the Indemnifying Party’s right to defend in good faith third party claims as hereinafter
provided, the Indemnifying Party shall satisfy its obligations under this Article within thirty (30) days after the receipt of
written notice thereon from the Indemnified Party, it being agreed that the Indemnifying Party need not satisfy such obligations
during any period in which the Indemnifying Party is defending in good faith the applicable third party claim in the manner described
hereinbelow.

 

(b)          If
the Indemnified Party notifies the Indemnifying Party of any claim or demand pursuant to Section 6.3(a), and if such claim or demand
relates to a claim or demand asserted by a third party against the Indemnified Party which the Indemnifying Party acknowledges
is a claim or demand for which it must indemnify or hold harmless the Indemnified Party under Section 6.1 or 6.2, the Indemnifying
Party shall have the right to either (i) pay such claim or demand or (ii) employ counsel reasonably acceptable to the Indemnified
Party to defend any such claim or demand asserted against the Indemnified Party. The Indemnified Party shall have the right to
participate in the defense of any such claim or demand. The Indemnifying Party shall notify the Indemnified Party in writing, as
promptly as possible (but in any case reasonably in advance of the due date for the answer or response to a claim) after the date
of the notice of claim given by the Indemnified Party to the Indemnifying Party under Section 6.3(a) of its election to defend
in good faith any such third party claim or demand. So long as the Indemnifying Party is defending in good faith any such claim
or demand asserted by a third party against the Indemnified Party and is able to demonstrate to the Indemnified Party its financial
wherewithal to fully perform its indemnification obligation in the event such contested claim is resolved adversely to the Indemnified
Party, the Indemnified Party shall not settle or compromise such claim or demand. The Indemnified Party shall make available to
such counsel all records and other materials in the Indemnified Party’s possession reasonably required by it for its use
in contesting any third party claim or demand. Whether or not the Indemnifying Party elects to defend any such claim or demand,
the Indemnified Party shall have no obligations to do so.

 

(c)          The
Indemnified Party shall have the right to participate in any matter through counsel of its own choosing at its own expense (unless
the Indemnified Party determines in good faith that there is a conflict of interest that prevents counsel for the Indemnifying
Party from representing the Indemnified Party, in which case the Indemnifying Party will have the right to choose and fund other
counsel to represent the Indemnified Party or to reimburse the Indemnified Party for the expenses of its counsel). After the Indemnifying
Party has notified the Indemnified Party of its intention to undertake to defend or settle any such Third Party Claim, and for
so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such Third Party Claim, except
to the extent such participation is requested by the Indemnifying Party, in which event the Indemnified Party shall be reimbursed
by the Indemnifying Party for reasonable legal expenses and out-of-pocket expenses incurred in connection with such requested participation.

 

     

     

    

 

(d)          An
Indemnifying Party may not, without the prior written consent of the Indemnified Party, settle or compromise any claim against
an Indemnified Party or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless
such settlement, compromise or consent includes an unconditional release of the Indemnified Party from all liability arising out
of such claim and does not contain any equitable order, judgment or term which in any manner affects, restrains or interferes with
the business of the Indemnified Party or any of the Indemnified Party’s affiliates.

 

ARTICLE
VII

 

CONDITIONS
TO THE OBLIGATIONS OF PURCHASER

 

Each and every obligation
of Purchaser under this Agreement, except for the obligations of Purchaser to be fulfilled prior to the Closing and obligations
that survive termination of this Agreement, shall be subject to the satisfaction, on or before the Closing, of each of the
following conditions set forth in this Article, unless waived in writing by Purchaser. The following constitute material conditions
to Purchaser’s performance hereunder, the failure of any of which shall entitle Purchaser to terminate this Agreement upon
written notice to Seller:

 

7.1           Representations
and Warranties; Performance.

 

(a)          The
representations and warranties made by Seller herein and in the Related Documents shall be true and correct in all material respects
(materiality to be determined by Purchaser in its discretion) as of the Effective Date and at and as of the Closing, with the same
effect as though made on such date.

 

(b)          Seller
shall have performed and complied with each of its covenants pursuant to this Agreement or any Related Documents in all material
respects through the Closing.

 

7.2           Required
Consents; Authorization.

 

(a)          Purchaser
or its designee shall have received or obtained all internal approvals and Required Consents.

 

(b)          Purchaser
shall have received certified copies of resolutions duly adopted by the board of directors of Seller (or Seller’s general
partner, manager or members, as appropriate) approving the transactions contemplated by this Agreement.

 

     

     

    

 

(c)          No
Destruction or Condemnation of Property. The Facility shall not have suffered material damage, destruction or condemnation
loss (or received notice of an impending condemnation loss). If, after the Effective Date, the Facility incurs damage, destruction
or condemnation loss (or received notice of an impending condemnation loss) which is not material damage, destruction or loss,
Seller shall be required to repair any such damage, destruction or loss (in all instances to restore the Facility to fully functional
status consistent with prior operation) before Purchaser shall be obligated to proceed to Closing. For the purposes of this Section,
“material damage, destruction or loss,” shall mean damage to, or condemnation loss (or impending condemnation loss)
that (a) is reasonably expected to cost $100,000.00 or more to repair, (b) materially interferes with the operation of the Facility
or (c) renders the Facility less than a functional structure in which Seller can operate the business currently conducted thereon.

 

(d)          No
Proceeding or Litigation. No injunction, judgment, order, decree, ruling or charge shall be in effect under any action, suit
or proceeding before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator that (i) prevents consummation of any of the transactions contemplated by this Agreement or the Facility
Lease or (ii) would cause any of the transactions contemplated by this Agreement or the Facility Lease to be rescinded following
consummation, provided that Purchaser has not solicited or encouraged any such action, suit or proceeding.

 

(e)          Title
Insurance. Title to the Real Property shall be as required by Section 4.10 above, Purchaser shall have received the Title
Policy in the form therein free and clear of encumbrances other than the Permitted Encumbrances.

 

(f)          Material
Adverse Change. There has been no Material Adverse Change. For purposes hereof, the term “Material Adverse Change”
shall mean any change or event or effect that is materially adverse to the Assets, business, profits, or financial condition of
the Tenant, the Guarantors, or the Facility or in the adjusted net operating income of the Tenant, the Guarantors or the Facility,
each as reasonably determined by Purchaser.

 

(g)          Other
Agreements. Seller shall have delivered into the Closing escrow its countersigned copies of the Seller Documents.

 

ARTICLE
VIII

 

CONDITIONS
TO THE OBLIGATIONS OF SELLER

 

Each and every obligation
of Seller under this Agreement, except for the obligations to be fulfilled prior to the Closing and obligations that survive termination
of this Agreement, shall be subject to the satisfaction, on or before the Closing, of each of the following conditions unless waived
in writing by Seller:

 

8.1           Representations
and Warranties; Performance.

 

(a)          The
representations and warranties made by Purchaser herein and in the Related Documents, shall be true and correct in all material
respects on and as of the Effective Date and at and as of the Closing, with the same effect as though made on such date.

 

(b)          Purchaser
shall have performed and complied with all covenants required by this Agreement to be performed and complied in all material respects
with by Purchaser prior to the Closing.

 

     

     

    

 

8.2           Other
Agreements. Purchaser shall have delivered into the Closing escrow its countersigned copies of the Purchaser Documents.

 

ARTICLE
IX

 

CLOSING

 

9.1           Possession
and Closing Documents.

 

(a)          Possession.
Possession of all Assets sold hereunder shall be delivered to Purchaser on the Closing Date unless Tenant is entitled possession
thereto pursuant to the terms of the Facility Lease.

 

(b)          Closing
Documents. Seller shall deliver to Purchaser on the Closing Date:

 

(i)          A
duly executed special warranty deed conveying the Real Property and Improvements to Purchaser, free and clear of all encumbrances
other than the Permitted Encumbrances (the “Deed”);

 

(ii)         A
duly executed Bill of Sale for any Personal Property in the form attached hereto as Exhibit C;

 

(iii)        Such
additional bills of sale, certificates of title and other appropriate instruments of assignment and conveyance, in form mutually
but reasonably satisfactory to Purchaser and Seller, dated as of the Closing, conveying all title to the Assets, free and clear
of all liens, liabilities, security interests or encumbrances except as otherwise permitted herein;

 

(iv)        Evidence
of the authority of Seller to execute and deliver the Seller Documents in order to effectuate the Closing;

 

(v)         Duly
executed affidavit in form satisfactory to obtain the Title Policy, without exception for mechanic’s, materialman’s
or other statutory liens;

 

(vi)        A
closing statement setting forth in reasonable detail the financial transactions contemplated by this Agreement, including, without
limitation, the Purchase Price, all prorations, and the allocation of costs specified herein (“Closing Statement”),
duly executed by Seller;

 

(vii)       A
duly executed bring-down certificate in form acceptable to Purchaser, reaffirming that the representations and warranties of Seller
are true and correct as of the Closing Date;

 

(viii)      A
duly executed certificate and affidavit of non-foreign status;

 

(ix)         The
duly executed Facility Lease and Guaranty; and

 

(x)          Any
other documents reasonably required by the Title Company.

 

     

     

    

 

(c)          Purchaser
shall deliver to Seller or cause to be delivered to Seller on the Closing Date, in addition to the Deposits set forth in Section
1.4 above, the following:

 

(i)          the
duly executed Facility Lease;

 

(ii)         the
Closing Statement.

 

9.2           Closing
Adjustments. Pursuant to Section 1.6 above, there shall be no adjustments at Closing.

 

9.3           Closing
Costs. Each party shall pay its respective attorney’s fees. Seller shall pay any brokerage fees associated with this
transaction. Each party shall each pay fifty percent (50%) of all other Closing costs, including without limitation (a) any
escrow or closing charges of the Title Company, (b) the title exam fees and the premium for the Title Policy and the cost of all
title endorsements required by Purchaser, (c) any recording fees associated with the recording of the Deed, (d) all grantor’s
tax or other similar transfer taxes, (e) all costs (including recording costs) to payoff and release any Monetary Encumbrance,
(f) the costs of any UCC searches required by Purchaser; and (g) costs associated with the inspections and investigations
conducted by Purchaser or its agents or representatives during the Due Diligence Period. Notwithstanding anything to the contrary
contained herein, Seller shall not be responsible for any of Purchaser’s lender fees and costs, including but not limited
to the premium for the lender’s Title Policy and cost of all title endorsements.

 

ARTICLE
X

 

DEFAULT;
REMEDIES

 

10.1         Purchaser’s
Default. If at any time Purchaser is in default of any representation, warranty or covenant of Purchaser under this Agreement
in any material respect, and Seller gives notice of such default to Purchaser (“Seller’s Notice”) then
Purchaser will have a period expiring on the tenth (10th) Business Day after the date of Seller’s Notice (“Purchaser’s
Cure Period”), to (i) correct or cure Purchaser’s default or (ii) if the Due Diligence Period has not expired,
to terminate this Agreement by notice to Seller, whereupon the Deposit shall be returned to Purchaser and neither party shall have
any further rights, duties or obligations hereunder except as expressly survive the termination hereof.

 

10.2         Default
Cured. If Purchaser does not elect to terminate during the Due Diligence Period, and Purchaser’s default is corrected
or cured within Purchaser’s Cure Period, the parties shall proceed to Closing as herein provided, with the Closing Date being
extended by not more than ten (10) days to accommodate any delay resulting from such default.

 

10.3         Default
Not Cured. If Purchaser does not elect to terminate during the Due Diligence Period, and Purchaser does not cure its default
within the Purchaser’s Cure Period, then, provided no default by Seller then exists and provided that Seller has not elected
to waive such default, this Agreement shall terminate and the parties shall be released and discharged of and from all further
obligations and liabilities under this Agreement, and the Deposit shall be paid to Seller as Seller’s sole and exclusive
liquidated damages and in full and complete settlement and liquidation of all damages sustained by Seller, it being acknowledged
by Seller and Purchaser that the amount of damages incurred by Seller as a result of Purchaser’s default would be substantial
but difficult, if not impossible, to ascertain and that such liquidated damages represent the parties’ best estimate of the
damages Seller will incur as a result of such default. Seller shall not be entitled to exercise any other rights, powers or remedies
at law or in equity, other than its right to receive the Deposit pursuant hereto, and Seller hereby expressly and irrevocably waives
all such other rights, powers and remedies and hereby covenants not to sue.

 

     

     

    

 

10.4         Seller’s
Default. If Seller is in default of any representation, warranty or covenant of Seller under this Agreement in any material
respect and Purchaser gives notice of such default to Seller (“Purchaser’s Notice”), then Seller will
have a period expiring on the tenth (10th) Business Day after the date of Purchaser’s Notice (“Seller’s
Cure Period”), to correct or cure Seller’s default.

 

10.5         Default
Cured. If Seller’s default is corrected or cured within Seller’s Cure Period, the parties shall proceed to Closing
as herein provided, with the Closing Date being extended by not more than ten (10) days to accommodate any delay resulting from
such default.

 

10.6         Default
Not Cured. If Seller does not cure its default within the Seller’s Cure Period then, upon notice to Seller, Purchaser
may elect to either (i) proceed to Closing, in which case, in addition to the right to monetary damages resulting from such default,
Purchaser will have the right to maintain an equitable action against Seller for specific performance of its obligation to sell
the Assets and to perform hereunder; or (ii) terminate this Agreement. If Purchaser elects to terminate this Agreement under
subsection (ii) above, then (A) the Deposit shall be retained by Purchaser; and (B) Purchaser shall be entitled to pursue an action
for damages against Seller, provided that any damages awarded to Purchaser as a result of such action shall not exceed the amount
of Purchaser’s actual out-of-pocket expenses.

 

ARTICLE
XI

 

MISCELLANEOUS
PROVISIONS

 

11.1         Amendment
and Modification. This Agreement may be amended, modified and supplemented only by written agreement of all the parties with
respect to any of the terms contained herein.

 

11.2         Waiver
of Compliance; Consent. Any failure of Seller, on the one hand, or Purchaser, on the other hand, to comply with any
obligation, covenant, agreement or condition may be waived in writing by the other party, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party,
such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in
this Section.

 

     

     

    

 

11.3         Notices.
All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be personally
delivered, or sent by facsimile transmission (provided a copy is thereafter promptly mailed as hereinafter provided), or sent by
overnight commercial delivery service (provided a receipt is available with respect to such delivery), or mailed by first-class
registered or certified mail, return receipt requested, postage prepaid (and shall be effective when received, if sent by personal
delivery or by facsimile transmission or by overnight delivery service, or on the third (3rd) day after mailing, if
mailed):

 

If to Seller, to:

 

Great Bend Surgical Properties,
LLC

514 Cleveland Street

Great Bend, Kansas 67530-3562

Attention: Kerry Noble, CEO

Fax No.: 620-792-5509

E-mail: knoblechem@yahoo.com

 

with copies to (which shall not constitute notice):

 

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Attention: Kathleen M. Martin, Esq.

Fax No.: 212-309-6001

E-mail: kathleen.martin@morganlewis.com

 

If to Purchaser, to:

 

Global Medical REIT Inc.

4800 Montgomery Lane, Suite 450

Bethesda, Maryland 20814

Fax: 202 380 0891

Email: AlfonzoL@GlobalMedicalREIT.com

 

with a copy to:

 

Bradley Arant Boult Cummings LLP

1600 Division Street, Suite 700

Nashville, Tennessee 37203

Attn: Ann Peldo Cargile

Fax: 615-252-2373

Email: acargile@bradley.com

 

or to such other person or address as any party
shall furnish to the other parties in writing pursuant to this Section. Notwithstanding the foregoing, Purchaser shall be permitted
in connection with the exercise of its rights to terminate this Agreement or to give title, survey or environmental objections
on or before the expiration of the Due Diligence Period to send any such termination or objection notice via electronic mail which
shall constitute effective delivery for purposes hereof.

 

     

     

    

 

11.4         Brokers
and Finders; Expenses. Except for Seller’s retention of Keller Williams Realty Diamond Partners, Inc., whose compensation
shall be the sole obligation and responsibility of Seller, the parties hereto represent and warrant to each other that none of
them has retained any broker or finder in connection with this transaction. Seller on the one hand, and Purchaser, on the other,
each agrees to indemnify the other for any losses incurred with respect to a breach of this Section. Except as otherwise provided
herein, each party hereto shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.

 

11.5         Attorney’s
Fees. In the event any proceeding or suit is brought to enforce this Agreement, the prevailing party shall be entitled to all
reasonable costs and expenses (including reasonable attorneys’ fees) incurred by such party in connection with any action,
suit or proceeding to enforce the other’s obligations under this Agreement.

 

11.6         Assignment.
This Agreement and all the provisions hereof shall be binding upon and inure to the benefit of the parties and their respective
heirs, successors and permitted assigns. Purchaser may assign its rights under the Agreement to an affiliate that controls Purchaser
or is controlled by Purchaser or is under common control with Purchaser, including joint venture entities in which Purchaser or
its affiliates share control with third parties, without the prior written consent of Seller (each such assignee a “Purchaser’s
Permitted Assignee”). Other than the foregoing, neither Purchaser nor Seller may assign this Agreement without first
obtaining the other party’s written consent, which may be withheld in such other party’s sole discretion. Upon an assignment
by Purchaser of its rights under the Agreement in accordance with this Section, Purchaser’s Permitted Assignee(s) shall be
deemed to be the Purchaser hereunder and shall be the beneficiary of all of Seller’s warranties, representations and covenants
in favor of Purchaser under this Agreement. If there is more than one Seller hereunder, the obligations of Sellers hereunder shall
be joint and several.

 

11.7         Governing
Law. This Agreement shall be governed by the laws of the State or Commonwealth where the Facility is located as to, including,
but not limited to, matters of validity, construction, effect and performance but exclusive of its conflicts of laws provisions.

 

11.8         Business
Day. If the date for the giving of notice or performance of any duty or obligation hereunder falls on a day that is not a Business
Day, such date shall be automatically extended to the next Business Day. As used herein, a “Business Day” means
any day other than a Saturday, Sunday or any other day on which banks are authorized to be closed in the State or Commonwealth
where the Facility is located Tennessee.

 

11.9         Counterparts;
Facsimile Signature. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Executed counterparts of this Agreement or any amendment
hereto may be delivered by electronic or facsimile transmission.

 

11.10         Headings.
The Article and Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

     

     

    

 

11.11         Entire
Agreement. This Agreement, which term as used throughout includes the Exhibits hereto, embodies the entire agreement and understanding
of the parties in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements
and understandings among the parties hereto with respect to such subject matters contained herein.

 

11.12         Warranty
of Authority. Each of the parties warrants that the persons signing on their behalf have the right and power to enter into
this Agreement and to bind them to the terms of this Agreement.

 

11.13         Exhibits.
Nothing in any Exhibit shall be deemed adequate to disclose an exception to a representation or warranty made herein unless the
applicable Exhibit identifies the exception and the specific representation to which it relates with reasonable particularity and
describes the relevant facts in reasonable detail. Any fact or item disclosed on any Exhibit hereto shall not be deemed by reason
only of such inclusion, to be material and shall not be employed as a point of reference in determining any standard of materiality
under this Agreement.

 

11.14         Reliance.
In executing and in carrying out the provisions of this Agreement, the parties are relying solely on the representations, warranties
and agreements contained in this Agreement and on any writing delivered pursuant to provisions of this Agreement or at the Closing
of the transactions herein provided for and not upon any representation, warranty, agreement, promise or information, written or
oral, made by any person other than as specifically set forth herein or therein.

 

11.15         Publicity.
No party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior
written approval of the other parties, which approval shall not be unreasonably withheld or delayed; provided, however,
that any party may make the following public disclosure (without the consent of the other party): (a) if prior to Closing, such
disclosure it believes in good faith is required by Applicable Law or stock market rule; or (b) if post-Closing, disclosure of
such of the principal terms of the transaction contemplated by this Agreement that such party elects to make.

 

11.16         Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, INCLUDING TO ENFORCE OR DEFEND
ANY RIGHTS HEREUNDER, AND AGREES THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[SIGNATURE PAGES FOLLOW]

 

     

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed or have caused their duly authorized officers to execute this Agreement as of the date first written
above.

 

	 	GLOBAL MEDICAL REIT INC., a Maryland corporation
	 	 
	 	By:	/s/ David A. Young
	 	Title:	Chief Executive Officer
	 	Date:	December 30, 2016

 

[SELLER’S SIGNATURE PAGES TO FOLLOW]

 

     

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed or have caused their duly authorized officers to execute this Agreement as of the date first written
above.

 

	 	GREAT BEND SURGICAL PROPERTIES, LLC, a Kansas limited liability company
	 	 
	 	By:	/s/ L.T. Fleske
	 	Title:	Chairman
	 	Date:	December 30, 2016

 

     

     

    

 

EXHIBIT A

 

Legal Description of the Real Property

 

[To be provided during Due Diligence Period.]

 

Exhibit
A-1

 

     

     

    

 

EXHIBIT B

 

Preliminary Due Diligence Checklist

 

		1.	Company Information

		a.	Bios for key management team

		b.	Organizational structure and ownership charts

		c.	Description of entity ownership, ownership record book, and equity holder list

		d.	List of medical staff by specialty (age, board certification)

		e.	Description of physician recruitment efforts and plans

		f.	List/description of key contracts (physicians, managed care, suppliers, software vendors, service agreements, facilities, etc.)

		g.	Insurance certificate and loss run reports for the Operator/Tenant

		h.	Description of current loans and material covenants

		i.	Description of any pending, threatened, or past litigations

		2.	Certification, Compliance, and Regulator

		a.	Accreditation certificates (JCAHO, AAAHC, etc.) and any accreditation survey reports and the responses to any noted deficiencies
or to conditional accreditation

		b.	Any governmental approvals, permits, certificates, registrations, licenses and the like required in order for the facility
to conduct its business

		c.	Quality reports or summary quality data for the facility

		d.	Copies of Medicare Cost Report (if applicable)

		e.	Summary of any notices from governmental entities regarding any possible violations

		3.	Real Estate Physical Assessment Due Diligence

		a.	Environmental Phase I and physical assessment condition reports

		b.	Surveys, title insurance policy, and title commitments

		c.	Copies of any unrecorded document affecting use of property

		d.	Building floor plans and space measurement reports

		e.	Any certificate or license needed to occupy and use the building

		f.	List of major capital expenditures in the past three years

		g.	Fixed asset roll-forward report and depreciation schedules

		4.	Financial Information

		a.	Operator/Tenant and Guarantors

		i.	Audited income statements for Tenant for the fiscal years ended 2014 and 2015.

		ii.	Cash flow statement, balance sheets, changes in stockholders equity and cash flow as of and for the six (6) month period ended
June 30, 2016.

		iii.	Schedule of capital improvements to the Facility that
were completed in the fiscal years ended 2013, 2014 and 2015.

		iv.	Monthly cash flow for trailing twelve months (preferably in excel or text)

		v.	Current and next year detailed budget with supporting assumptions

		b.	Seller (if different than the Operator/Tenant)

		i.	Cash flow statement, income statement, and balance sheet

		ii.	Year-end and year-to-date for past three years

		5.	Information on real estate being sold

		a.	Copies of appraisals done to obtain bank financing within last two years

 

Exhibit
B-1

 

     

     

    

 

		b.	Copies of utility bills for past two years

		c.	Copies of any leases or subleases

		d.	Property tax bills for the past two years (assessment notice & tax bills)

		e.	Summary/list of any building service contract (HVAC, elevators, etc.)

		6.	Revenue Due Diligence

		a.	Revenue break downs, collection rate, A/R schedule, and bad debt allowance by payor for past two years, including out-of-network
and co-pays percentages

		b.	Description of billing and collections systems and practices

		c.	Utilization stats, case volumes and revenue by specialty and by physician

		d.	List/decryption of contracts with insurance companies

 

     

     

    

 

EXHIBIT C

 

THIS BILL OF SALE AND ASSIGNMENT
(this “Bill of Sale and Assignment”) is made this ____ day of __________, 201__, by and between __________________,
a ______________ (“Transferor”), and __________________, a ______________ (“Transferee”). All capitalized
terms used herein, but not specifically defined herein, shall have the meanings given to such terms in that certain Asset Purchase
Agreement dated ________________  (the “Agreement”) by and between Transferor and Transferee.

 

RECITALS

 

A.           Transferor
is the owner of that certain real property located in ________________ County, ____________, 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, in consideration
of the premises, the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby covenant and 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 the Personal 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.

 

Exhibit
C-1

 

     

     

    

 

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 written 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 reasonably
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.

 

[Remainder of Page Intentionally Left Blank.
Signatures on Following Page.]

 

     

     

    

 

IN WITNESS WHEREOF, Transferor
and Transferee have executed this Bill of Sale and Assignment as of the date first written above.

 

	 	“Transferor”
	 	________________________________________________,
	 	a ___________________________________
	 	 
	 	By:______________________________________________
	 	Name: ___________________________________________
	 	Title: ____________________________________________
	 	 
	 	“Transferee”
	 	________________________________________________,
	 	a___________________________________
	 	 
	 	By: _____________________________________________
	 	Name: ___________________________________________
	 	Title: ____________________________________________Exhibit

Exhibit 10.1

December 28, 2016

Mr. James W. Barge
2700 Colorado Ave., Suite 200
Santa Monica, California 90404

RE:  Employment Agreement

Dear Mr. Barge:

On behalf of Lions Gate Entertainment Inc. (the “Company”), this is to confirm the terms of your employment by the Company. We refer to you herein as “Employee.”  The terms of Employee’s employment are as follows:

1.    TERM

(a)  The term of this agreement (“Agreement”) will begin October 1, 2016 and end September 30, 2020, subject to earlier termination as provided for in Section 7 below (the “Term”).  Until October 1, 2016 the employment agreement dated September 16, 2013 between the Company and Employee (the “Prior Agreement”) governed the terms and conditions of Employee’s employment.  During the Term of this Agreement, Employee will serve as Chief Financial Officer, reporting to the Company’s Chief Executive Officer (the “CEO”), currently Jon Feltheimer.  Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the entertainment industry and as may be reasonably requested by the Company.

(b)  So long as this Agreement shall continue in effect, Employee shall devote Employee’s full business time, energy and ability exclusively to the business, affairs and interests of the Company and matters related thereto, shall use Employee’s best efforts and abilities to promote the Company’s interests, and shall perform the services contemplated by this Agreement in accordance with policies established by the Company.  As long as Employee’s meaningful business time is devoted to the Company, Employee may devote a reasonable amount of time to management of personal investments and charitable, political and civic activities, so long as these activities do not conflict with the Company’s interests or otherwise interfere with Employee’s performance under this Agreement.

(c)  Subject to travel required by Employee’s position and consistent with the reasonable business of the Company, Employee will be based in the Los Angeles, California area.

Mr. James W. Barge
December 28, 2016
Page 2 of 17

(d)  During the Term, the Company shall pay for the services of an assistant to the extent available in keeping with the Company’s policy and practice for the Company’s co-Chief Operating Officers and division heads.

2.    COMPENSATION

(a)  Salary.  During the Term of this Agreement, Employee will be entitled to receive base salary (“Base Salary”), payable in accordance with the Company’s normal payroll practices in effect.  During the Term, Employee’s annual rate of Base Salary will be one million dollars ($1,000,000).

(b)  Payroll.  Nothing in this Agreement shall limit the Company’s right to modify its payroll practices, as it deems necessary.

(c)  Annual Bonuses.  During the Term, Employee shall be eligible to receive annual performance bonuses based on such Company and/or individual performance criteria as determined by the Compensation Committee (the “CCLG”) of the Board of Directors of Lions Gate Entertainment Corp. (“Lions Gate”), in its discretion and in consultation with the CEO.  Commencing with the Company’s 2018 fiscal year, the target amount of such annual bonus will be one hundred percent (100%) of Employee’s Base Salary.  Except as expressly provided in Section 7 below, Employee must be employed with the Company through the end of the Company’s fiscal year to be eligible to receive a bonus for such fiscal year.  Any such bonus will be paid as soon as practicable after the end of the applicable fiscal year and in all events within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4) (generally within two and one‐half months after the end of the fiscal year for which the bonus is paid).  Notwithstanding the foregoing, the provisions of Employee’s Prior Agreement shall govern as to Employee’s bonus for the Company’s 2017 fiscal year. 

(d)  Special Bonus Opportunity.  Employee shall be granted the opportunity to receive a cash bonus in the amount of $1,000,000 (the “Special Bonus”), provided that the Special Bonus will be payable only if (a) Lions Gate achieves specified performance goals established by the CCLG for the Special Bonus, and (b) Employee’s employment with the Company continues through the period specified by the CCLG.  The performance goals for the Special Bonus will be finalized by the CCLG within thirty (30) days following the date of this Agreement and will generally relate to the achievement of certain synergies in connection with Lions Gate’s acquisition of Starz and the integration of the two companies following the transaction. 

(e)    Tax Withholding.  Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

Mr. James W. Barge
December 28, 2016
Page 3 of 17

3.    BENEFITS

As an employee of the Company, Employee will continue to be eligible to participate in all benefit plans to the same extent as other similarly situated salaried employees of the Company (including the Company’s co-Chief Operating Officers and division heads) and in all events subject to the terms of such plans.  For the sake of clarity, such plans do not include compensation and/or any bonus plans.

4.    VACATION AND TRAVEL

(a)  Employee shall be entitled to take paid time off without a reduction in salary, subject to (i) the approval of Employee’s supervisor, and (ii) the demands and requirements of Employee’s duties and responsibilities under this Agreement.  Employee shall accrue no paid vacation.  

(b)  Employee will be eligible to be reimbursed for any business expenses in accordance with the Company’s current Travel and Entertainment policy.

(c)  In addition, to the extent the following are within the Company’s policy and practice then in effect for similarly situated employees (including the Company’s co-Chief Operating Officers and division heads), Employee shall be entitled to (i) business class travel for flights in excess of four (4) hours; (ii) all customary “perqs” of division heads and the co-Chief Operating Officers of the Company; (iii) a cell phone, which may be expensed; (iv) a reserved parking space; and (v) reimbursement for all expenses reasonably incurred in connection with his employment.

(d)  The Company reserves the right to modify, suspend or discontinue any and all of the above referenced benefits, plans, practices, policies and programs (including those in Section 3) at any time (whether before or after termination of employment) without notice to or recourse by Employee so long as action is taken in general with respect to other similarly situated persons (including the Company’s co-Chief Operating Officers and division heads) and does not single out Employee.

5.    EQUITY GRANTS

(a)  Time-Based SAR Award.  On December 28, 2016, the CCLG approved an award of 425,000 share appreciation rights with respect to Lions Gate’s Class B common shares (the “Class B Shares” and such award, the “Time-Based Class B SAR Award”).  The CCLG established the per-share “base price” of the Time-Based Class B SAR Award at the time of grant.  Subject to Employee’s continued employment hereunder, the Time-Based Class B SAR Award will vest and become exercisable as to twenty-five percent (25%) of the rights subject to the award on each of September 30, 2017, September 30, 2018, September 30, 2019 and September 30, 2020; provided, that the award is subject to accelerated vesting in connection with certain terminations of Employee’s employment as provided in Section 5(e) below.  Each right subject to the Time-Based Class B SAR

Mr. James W. Barge
December 28, 2016
Page 4 of 17

 Award shall be payable upon exercise of the right, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Lions Gate’s Class A common shares (“Class A Shares”), cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each right so exercised) equal to the amount by which the fair market value (as determined under the Plan) of a Class B Share on the date of such exercise of the Time-Based Class B SAR Award exceeds the per-share base price of the Time-Based Class B SAR Award.  The Time-Based Class B SAR Award may be exercised only if and to the extent vested.

(b)  Performance SAR Award.  On December 28, 2016, the CCLG approved an award of 425,000 share appreciation rights with respect to the Class B Shares that are subject to the time-based and performance-based vesting requirements set forth below in this paragraph ( the “Performance-Based Class B SAR Award”).  The CCLG established the per-share “base price” of the Performance-Based Class B SAR Award at the time of grant.  Subject to Employee’s continued employment hereunder, the Performance-Based Class B SAR Award will be eligible to vest and become exercisable as to twenty-five percent (25%) of the rights subject to the award on each of September 30, 2017, September 30, 2018, September 30, 2019 and September 30, 2020 (each, a “Performance Vesting Date”); provided, however, that the vesting of the applicable installment of the Performance-Based Class B SAR Award on a particular Performance Vesting Date shall also be subject to an assessment of Employee’s personal performance over the twelve (12) month period ending on such Performance Vesting Date (or, if so determined by the CCLG, performance over a fiscal year of Lions Gate that overlaps with such twelve (12)-month period); and provided, further, that the award is subject to accelerated vesting in connection with certain terminations of Employee’s employment as provided in Section 5(e) below.  Such performance assessment and the determination as to the portion (if any) of the Performance-Based Class B SAR Award that will vest on such Performance Vesting Date shall be made by the CCLG in its discretion, in consultation with the CEO.  Any portion of the Performance-Based Class B SAR Award that does not vest as of the end of the applicable performance period shall expire as of the last day of such period with no possibility of further vesting; provided, however, that the CCLG may, in its sole discretion, provide that any such portion of the Performance-Based Class B SAR Award may remain outstanding and eligible to vest at such time or times and subject to such terms and conditions as established by the CCLG (but in no event shall the award vest as to more than 100% of the rights subject to the award).  Each right subject to the Performance-Based Class B SAR Award shall be payable upon exercise of the right, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each right so exercised) equal to the amount by which the fair market value (as determined under the Plan) of a Class B Share on the date of such exercise of the Performance-Based Class B SAR Award exceeds the per-share base price of the Performance-Based Class B SAR Award.  The Performance-Based Class B SAR Award may be exercised only if and to the extent vested.
    

Mr. James W. Barge
December 28, 2016
Page 5 of 17

(c)  Time-Based RSU Award.  On December 28, 2016, the CCLG approved an award of 100,000 restricted share units with respect to Lions Gate’s Class B common shares (the “Time-Based Class B RSU Award”).  Subject to Employee’s continued employment hereunder, the Time-Based Class B RSU Award will vest as to twenty-five percent (25%) of the units subject to the award on each of September 30, 2017, September 30, 2018, September 30, 2019 and September 30, 2020; provided, that the award is subject to accelerated vesting in connection with certain terminations of Employee’s employment as provided in Section 5(e) below.  Each restricted share unit subject to the Time-Based Class B RSU Award shall be payable upon vesting of the right, as determined by the CCLG in its sole discretion, in the form of either Class B Shares, Class A Shares, cash or any combination of the foregoing, with such payment in any case to have an aggregate value (for each vested unit) equal to the fair market value (as determined under the Plan) of a Class B Share on the date of such payment.

(d)  Terms of Awards in General.  Each of the awards set forth above in this Section 5 (the “Equity Awards”) shall be granted in accordance with the terms and conditions of the Lions Gate Entertainment Corp. 2012 Performance Incentive Plan (the “Plan”).  The “Award Date” for each such award shall be the date of the CCLG’s approval of the award. Each such award shall be evidenced by and subject to the terms of an award agreement in the form generally then used by Lions Gate to evidence grants of the applicable type of award under the Plan.
(e)  Acceleration of Equity Awards.  The following provisions shall apply to the Equity Awards contemplated by this Section 5:
		
	(i)
	In the event that either (A) Employee’s employment terminates due to his death or Disability (as defined herein), (B) Employee’s employment is terminated by the Company “without cause” as contemplated by Section 7(a)(v) below, (C) a Change of Control (as defined herein) occurs during the Term of this Agreement and on or within twelve (12) months following such Change of Control, Employee’s employment is terminated by Employee for “Good Reason” (as such term is defined in Section 7(a)(vi) below), or (D) the employment of both Jon Feltheimer and Michael Burns with the Company terminates (the second such termination to occur, a “Change in Management”) and on or within twelve (12) months following such Change in Management, Employee’s employment is terminated by Employee for “Good Reason” (as such term is defined in Section 7(a)(vi) below), each of the Equity Awards, to the extent then outstanding and unvested, shall immediately accelerate and become fully vested. 

		
	(ii)
	Notwithstanding any provision to the contrary herein or in any equity award or other agreement, the provisions for accelerated vesting of equity awards in this Section 5(e) shall apply to, in addition to the Equity Awards, any other equity-based awards granted by the Company to 

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Employee that are (A) outstanding as of the date of this Agreement or (B) granted during the Term at any time after the date of this Agreement (unless otherwise expressly provided by the CCLG at the time it approves the applicable grant).
(f)  Definition of Change in Control.  For the purposes of this Agreement, “Change of Control” shall mean:
		
	(i)
	if any person, other than (A) any person who holds or controls entities that, in the aggregate (including the holdings of such person), hold or control thirty-three percent (33%) or more of the outstanding shares of Lions Gate on the date of execution of this Agreement by each party hereto (collectively, a “Thirty-Three Percent Holder”) or (B) a trustee or other fiduciary holding securities of Lions Gate under an employee benefit plan of Lions Gate, becomes the beneficial owner, directly or indirectly, of securities of Lions Gate representing thirty-three percent (33%) or more of the outstanding shares as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, excluding any transactions or series of transactions involving a sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder; 

		
	(ii)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there is a sale or disposition of thirty-three percent (33%) or more of Lions Gate's assets (or consummation of any transaction, or series of related transactions, having similar effect);

		
	(iii)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate, there occurs a change or series of changes in the composition of the Board as a result of which half or less than half of the directors are incumbent directors;

		
	(iv)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets of Lions Gate (excluding any sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder in a single transaction or a series of transactions), a shareholder or group of shareholders acting in concert, other than a Thirty-Three Percent Holder in a single transaction or a series of transactions, obtain control of thirty-three percent (33%) or more of the outstanding shares of Lions Gate; 

		
	(v)
	if, as a result of one or more related transactions in the context of a merger, consolidation, sale or other disposition of equity interests or assets 

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of Lions Gate, a shareholder or group of shareholders acting in concert obtain control of at least half of the Board, excluding any transactions or series of transactions involving a sale or other disposition of securities of Lions Gate by a Thirty-Three Percent Holder;

		
	(vi)
	if there is a dissolution or liquidation of Lions Gate; or

		
	(vii)
	if there is any transaction or series of related transactions that has the substantial effect of any one or more of the foregoing, excluding any transaction or series of transactions involving a Thirty-Three Percent Holder.

6.    HANDBOOK

Employee agrees that the Company Employee Handbook outlines other policies in addition to the terms set forth in this Agreement, which will apply to Employee’s employment with the Company, and Employee acknowledges receipt of such handbook.  Employee acknowledges and agrees that it is Employee’s obligation to read, understand and adhere to the rules and policies set forth in such handbook.  Employee acknowledges and agrees that the Company retains the right to revise, modify or delete any such policy or any employee benefit plan it deems appropriate.  Notwithstanding the foregoing, in the event any provision of the Company Employee Handbook conflicts with this Agreement, the provisions of this Agreement shall control.

7.    TERMINATION

(a)  This Agreement and the Term shall terminate upon the happening of any one or more of the following events:

		
	(i)
	The mutual written agreement between the Company and Employee; 

		
	(ii)
	The death of Employee; 

		
	(iii)
	Employee’s “Disability,” which means for purposes hereof Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing Employee’s duties hereunder for a period of ninety (90) days or more, provided that Employee has not cured disability within ten (10) days of written notice; 

		
	(iv)
	The determination on the part of the Company that “cause” exists for termination of this Agreement.  As used herein, “cause” is defined as the occurrence of any of the following:  

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	(A)
	Employee’s conviction of a felony or plea of nolo contendere to a felony (other than a traffic violation); 

		
	(B)
	commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder;

		
	(C)
	material breach of this Agreement by Employee; or 

		
	(D)
	any act of misconduct by Employee having a substantial adverse effect on the business or reputation of the Company; 

Prior to terminating Employee's employment for “cause,” the Company shall provide Employee with written notice of the grounds for the proposed termination. If the grounds for termination are capable of cure, the Employee shall have fifteen (15) days after receiving such notice in which to cure such grounds to the extent such cure is possible. If not cure is possible or Employee has failed to cure, Employee's employment shall terminate upon the 15th day following notice of termination.

		
	(v)
	Employee is terminated “without cause.”  Termination “without cause” shall be defined as Employee being terminated by the Company for any reason other than as set forth in Sections 7(a)(i)-(iv) above.  In the event of a termination “without cause,” subject to Employee’s execution and delivery to the Company of a general release of claims in a form acceptable to the Company not more than twenty-one (21) days after the date the Company provides such release (and Employee’s not revoking such release within any revocation period provided under applicable law), Employee shall be entitled to receive a severance payment equal to 50% of the amount of the Base Salary that Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term had Employee continued to be employed with the Company through such date (but no less than the greater of either (x) twelve (12) months’ Base Salary at the rate in effect on Employee’s termination or (y) the amount Employee would receive from the Company’s severance policy for non-contract employees that is in effect at the time of termination).  Subject to the release provision set forth above, such amount shall be paid in cash in a lump sum as soon as practicable after (and in all events within sixty (60) days after the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company; 

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provided, however, that if the 60-day period following Employee’s separation from service spans two calendar years, such lump sum payment shall be made within such 60-day period but in the second of the two calendar years. The Company shall provide the final form of release agreement to Employee not later than seven (7) days following the termination date.  The Company’s provision of the payments and benefits referred to in this Section 7(a)(v) and Section 5 and Section 7(a)(vii), in addition to the accrued obligations described in Section 7(b) below, shall relieve the Company of any and all obligations to Employee.

		
	   (vi)
	The foregoing notwithstanding, if Employee’s employment with the Company terminates on or within twelve (12) months following a Change of Control or a Change in Management (as defined in Section 5(e)) pursuant to a termination by the Company “without cause” or by Employee for “Good Reason” (as defined below), then Employee shall be entitled to receive (in addition to any rights to accelerated vesting of equity awards under Section 5 hereof and in lieu of the severance provided in Section 7(a)(v) above) a severance payment equal to 100% of the amount of the Base Salary that Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term had Employee continued to be employed with the Company through such date (but no less than the greater of either (x)(A) in the case of a termination on or following a Change in Management, twelve (12) months’ Base Salary at the rate in effect on Employee’s termination and (B) in the case of a termination on or following a Change of Control, two million five hundred thousand dollars ($2,500,000) or (y) the amount Employee would receive from the Company’s severance policy for non-contract employees that is in effect at the time of termination); provided, however, that Employee’s right to receive such payments shall be subject to satisfaction of the requirement to provide a general release of claims in accordance with Section 7(a)(v).  Subject to such release requirement, the amount referred to in the foregoing clause shall be paid in cash in a lump sum as soon as practicable after (and in all events within sixty (60) days after the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company; provided, however, that if the 60-day period following Employee’s separation from service spans two calendar years, such lump sum payment shall be made within such 60-day period but in the second of the two calendar years. The Company’s provision of the payments and benefits referred to in this Section 7(a)(vi) and in Section 5 and  Section 7(a)(vii), in addition to the accrued 

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obligations described in Section 7(b) below, shall relieve the Company of any and all obligations to Employee. 

For purposes of this Agreement, “Good Reason” shall mean any material diminution by the Company in Employee’s responsibilities as measured against Employee’s responsibilities prior to the Change of Control or Change in Management, as applicable, or any change in the positions to which Employee reports which results in Employee reporting to individuals with a materially lower level of authority than the individuals to whom Employee currently reports; provided, however, that any such condition shall not constitute “Good Reason” unless both (x) Employee provides written notice to the Company of the condition claimed to constitute Good Reason within ninety (90) days of the initial existence of such condition, and (y) the Company fails to remedy such condition within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of Employee’s employment with the Company shall not be treated as a termination for “Good Reason” unless such termination occurs not more than one (1) year following the initial existence of the condition claimed to constitute “Good Reason.”  For these purposes, if the Company is purchased by another entity, it shall not be considered a material diminution in responsibility if Employee is made Chief Financial Officer (or similar role) at that other entity.  

		
	(vii)
	In addition, if Employee becomes entitled to receive the severance benefits provided in either Section 7(a)(v) or 7(a)(vi) above and subject to the release requirement set forth therein, or if Employee’s employment terminates pursuant to either Section 7(a)(ii) or 7(a)(iii) above, Employee shall also be entitled to (A) payment by the Company of any bonus payable pursuant to Section 2(c) on a prorated basis for the fiscal year in which such termination of employment occurs based on the amount of such fiscal year worked by Employee (any such bonus to be paid at the time provided in Section 2(c) above and no such bonus to be payable for any fiscal year subsequent to the year of termination of employment); and (B) if Employee timely elects continued health coverage pursuant to COBRA, payment by the Company of his COBRA premiums for six (6) months following his date of termination (or, if earlier, the date he becomes eligible for coverage under the health plan of a future employer or the Company is otherwise no longer required to offer COBRA coverage to Employee).

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(b)  In the event that this Agreement is terminated pursuant to Sections 7(a)(i)-(iv) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that the Company shall pay to Employee, any base salary that had accrued but had not been paid (including accrued and unpaid vacation time) as of the date of termination (and, in the case of a termination pursuant to Section 7(a)(ii) or 7(a)(iii), shall provide the benefits provided in Section 5(e)(i) and Section 7(a)(vii)). Following the termination of the Term and/or this Agreement for any reason, Sections 9 through 15 shall, notwithstanding anything else herein to the contrary, survive and continue to be binding upon the parties following such termination.

8.    EXCLUSIVITY AND SERVICE

Employee’s services shall be exclusive to the Company during the Term.  Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the entertainment industry and as may be reasonably requested by the Company.  Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by the Company in connection with the regular conduct of its business.  Employee further agrees to render services during Employee’s employment hereunder whenever, wherever and as often as the Company may reasonably require in a competent, conscientious and professional manner, and as instructed by the Company in all matters, including those involving artistic taste and judgment, but there shall be no obligation on the Company to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.

9.    INTELLECTUAL PROPERTY

(a)  Employee agrees that the Company shall be the sole and exclusive owner throughout the universe in perpetuity of all of the results and proceeds of Employee’s services, work and labor in connection with Employee’s employment by the Company, during the Term and any other period of employment with the Company, free and clear of any claims, liens or encumbrances.  Employee shall promptly and fully disclose to the Company, with all necessary detail for a complete understanding of the same, any and all developments, clients and potential client lists, discoveries, inventions, improvements, conceptions, ideas, writings, processes, formulae, contracts, methods, works, whether or not patentable or copyrightable, which are conceived, made, acquired, or written by Employee, solely or jointly with another, while employed by the Company (whether or not at the request or upon the suggestion of the Company) and which are substantially related to the business or activities of the Company its parent, affiliates, or subsidiaries that are within the scope of Employee’s employment and responsibilities hereunder (collectively, “Proprietary Rights”). 

(b)  All copyrightable works that Employee creates in connection with Employee’s obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries shall be considered “work made for 

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hire” and therefore the property of the Company.  To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and transfers and agrees to assign and transfer to the Company (or as otherwise directed by the Company) Employee's full rights, title and interests in the Proprietary Rights to the Company or its designee.  In addition, Employee shall deliver to the Company any and all drawings, notes, specifications and data relating to the Proprietary Rights.  Whenever requested to do so by the Company, Employee shall execute and deliver to the Company any and all applications, assignments and other instruments and do such other acts that the Company shall reasonably request to apply for and obtain patents and/or copyrights in any and all countries or to otherwise protect the Company’s interest in the Proprietary Rights and/or to vest title thereto to the Company.  Employee further agrees not to charge the Company for time spent in complying with these obligations.  This Section 9 shall apply only to that intellectual property which related at the time of conception to the Company's then current or anticipated business or resulted from work performed by Employee for the Company. Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to an invention which qualifies fully under California Labor Code Section 2870.

10.    ASSIGNMENT AND DELEGATION

Employee shall not assign any of Employee’s rights or delegate any of Employee’s duties granted under this Agreement.  Any such assignment or delegation shall be deemed void ab initio.

11.    TRADE SECRETS

The parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of Employee’s duties hereunder and at any other period of employment with the Company, its parent, affiliates, or subsidiaries, Employee shall have and has had access to information concerning the operation of the Company and its affiliated entities, including without limitation, financial, personnel, sales, planning and other information that is owned by the Company and regularly used in the operation of the Company’s business and (to the extent that such confidential information is not subsequently disclosed or otherwise becomes known to the public generally other than by breach of this Agreement by Employee) that this information constitutes the Company’s trade secrets. Employee agrees that Employee shall not disclose any such trade secrets, directly or indirectly, to any other person or use them in any way, either during the Term of this Agreement or at any other time thereafter, except as is required in the course of Employee’s employment for the Company, as required by applicable law or court order, or if authorized in writing.  Employee shall not use any such trade secrets in connection with any other employment and/or business opportunities following the Term. In addition, Employee hereby expressly agrees that Employee will not disclose any confidential matters of the Company and its affiliated entities that are not trade secrets 

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prior to, during or after Employee’s employment including the specifics of this Agreement. Employee shall not use any such confidential information in connection with any other employment and/or business opportunities at any time during or following the Term. In addition, in order to protect any such confidential information, Employee agrees that during the Term and for a period of eighteen (18) months thereafter, Employee will not, directly or indirectly, induce or entice any other executive or employee of the Company, with the exception of Employee’s exclusive assistant if the Company has employed an individual in such role, to leave such employment.

12.    ARBITRATION

Any dispute, controversy or claim arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall at the request of either party be submitted to and settled by binding arbitration conducted before a single arbitrator in Los Angeles in accordance with the Federal Arbitration Act, to the extent that such rules do not conflict with any provisions of this Agreement.  Said arbitration shall be under the jurisdiction of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California. All such actions must be brought within the statute of limitations period applicable to the claim as if that claim were being filed with the judiciary or forever be waived.  Failure to institute an arbitration proceeding within such period shall constitute an absolute bar to the institution of any proceedings respecting such controversy or claim, and a waiver thereof.  The arbitrator shall have the authority to award damages and remedies in accordance with applicable law.  Any award, order, or judgment pursuant to such arbitration shall be deemed final and binding and may be entered and enforced in any state or federal court of competent jurisdiction.  Each party agrees to submit to the jurisdiction of any such court for purposes of the enforcement of any such award, order, or judgment.  The Company shall pay for the administrative costs of such hearing and proceeding.

13.    INDEMNIFICATION

Except with respect to claims resulting from Employee’s willful misconduct or acts outside the scope of his employment hereunder, Employee shall continue to be defended, indemnified and held harmless by Company in respect of all claims arising from or in connection with his position or services as an Employee of the Company to the maximum extent permitted in accordance with Lions Gate’s Articles of Incorporation, Bylaws, Board Resolutions and under applicable California and British Columbia law (including, without limitation and as applicable, attorney’s fees), and shall be covered by the Company’s applicable directors and officers insurance policy. 

14.     LIMIT ON BENEFITS
(a)  Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Employee under any other Company plan or agreement 

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(such payments or benefits are collectively referred to as the “Benefits” for purposes of this Section 14) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is referred to hereinafter as the “Limited Benefit Amount”). In such case, unless Employee has given prior written notice to the Company specifying a different order to effectuate the reduction of the Benefits (any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder), the Benefits shall be reduced or eliminated by first reducing or eliminating cash severance payments, then by reducing or eliminating other cash payments, then by reducing or eliminating those payments or benefits which are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Employee’s rights and entitlements to any benefits or compensation.

(b)  A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by Company’s independent public accountants or another certified public accounting firm of national reputation designated by Lions Gate (the “Accounting Firm”). Company and Employee shall use their reasonable efforts to cause the Accounting Firm to provide its determination (the “Determination”), together with detailed supporting calculations and documentation to Company and Employee within five (5) days of the date of termination of Employee’s employment, if applicable, or such other time as requested by Company or Employee (provided Employee reasonably believes that any of the Benefits may be subject to the Excise Tax), and if the Accounting Firm determines that no Excise Tax is payable by Employee with respect to any Benefits, Company and Employee shall use their reasonable efforts to cause the Accounting Firm to furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Benefits. Unless Employee provides written notice to Company within ten (10) days of the delivery of the Determination to Employee that he disputes such Determination, the Determination shall be binding, final and conclusive upon Company and Employee.

15.    INTEGRATION, AMENDMENT, NOTICE, SEVERABILITY, AND FORUM

(a)  This Agreement expresses the binding and entire agreement between Employee and the Company and, from and after the Effective Date, shall replace and supersede all prior arrangements and representations, either oral or written, as to the subject matter hereof.  Notwithstanding the foregoing, Section 5 of the Prior Agreement, the terms of any equity grants that have been made under any other employment 

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agreements between Company and Employee, and the terms of any equity grants that have been provided by Company to Employee outside the terms of any employment agreement, in each case to the extent the applicable equity award is outstanding on the date hereof, shall remain in full force and effect (subject in each case to Section 5(e)(ii) above).

(b)  All modifications or amendments to this Agreement must be made in writing and signed by both parties. 

(c) Any notice required herein shall be in writing and shall be deemed to have been duly given when delivered by hand, received via electronic mail or on the depositing of said notice in any U.S. Postal Service mail receptacle with postage prepaid, addressed to the Company at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404 and to Employee at the address set forth above, or to such address as either party may have furnished to the other in writing in accordance herewith.

(d)  If any portion of this Agreement is held unenforceable under any applicable statute or rule of law then such portion only shall be deemed omitted and shall not affect the validity of enforceability of any other provision of this Agreement.

(e)  This Agreement shall be governed by the laws of the State of California.  The state and federal courts (or arbitrators appointed as described herein) located in Los Angeles, California shall, subject to the arbitration agreement set forth in Section 12 above, be the sole forum for any action for relief arising out of or pursuant to the enforcement or interpretation of this Agreement.  Each party to this Agreement consents to the personal jurisdiction and arbitration in such forum and courts and each party hereto covenants not to, and waives any right to, seek a transfer of venue from such jurisdiction on any grounds.    

16.    SECTION 409A

(a)  It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the U.S. Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject Employee to payment of any additional tax, penalty or interest imposed under Code Section 409A.  The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Employee.

(b)  Notwithstanding any provision of this Agreement to the contrary, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s separation from service (as defined above), Employee shall not be entitled to any payment or benefits pursuant to Section 7(a)(v) until the earlier of (i) the date which is six (6) months after Employee’s separation from service for any

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reason other than death, or (ii) the date of Employee’s death.  Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s separation from service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Employee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Employee’s death).  The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. 

(c)  To the extent that any reimbursements pursuant to the provisions of this Agreement are taxable to Employee, any such reimbursement payment shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred.  The benefits and reimbursements pursuant to such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year.

(d)  Each payment made pursuant to any provision of this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A. 
[Remainder of page intentionally left blank]

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Please acknowledge your confirmation of the above terms by signing below where indicated.

Very truly yours,

LIONS GATE ENTERTAINMENT INC.
                        

/s/ Wayne Levin
Wayne Levin
Chief Strategic Officer and General Counsel, Lions Gate Entertainment Corp.    
   
AGREED AND ACCEPTED
This 28th day of December, 2016

/s/ James W. Barge 
JAMES W. BARGE

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