AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS

AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS

THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS (this “Agreement”) is made and entered into as of this 30th day of October, 2006, between LIBERTY FALLS, LLC, an Ohio limited liability company (“Seller”), TRIPLE NET PROPERTIES, LLC, a Virginia limited liability company (“Buyer”) and DAVE CHRESTENSEN and TODD CRAWFORD (each a “Guarantor,” and collectively, “Guarantors”).

RECITALS

A. Seller owns certain real property located in Butler County, Ohio and more specifically described in Exhibit A attached hereto and incorporated herein (the “Land”), commonly known as 6770 Cincinnati-Dayton Road and such other assets, as the same are herein described.

B. Seller desires to sell to Buyer and Buyer desires to purchase from Seller the Property (hereinafter defined).

C. The “Effective Date” of this Agreement shall be the date on which this Agreement is fully executed by all parties, as evidenced by the latest date inserted next to the signature block of each party.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, premises and agreements herein contained, the parties hereto do hereby agree as follows:

1.  Purchase and Sale .

1.1. The purchase and sale includes, and at the Close of Escrow (hereinafter defined) Seller shall sell, transfer, grant and assign to Buyer, Seller’s entire right and interest in and to all of the following (hereinafter sometimes collectively, the “Property”):

1.1.1. The Land, together with all structures, buildings, improvements, machinery, fixtures, and equipment affixed or attached to the Land and all easements, development rights, rights of way, and other rights appurtenant to the Land (all of the foregoing being collectively referred to herein as the “Real Property”);

1.1.2. The lease with the Sisters of Mercy of Hamilton, Ohio d/b/a Mercy Hospital of Fairfield (the “Tenant”), including associated amendments, leasing the Real Property in accordance with the terms set forth on Exhibit B and otherwise to the reasonable satisfaction of Buyer, to be fully executed prior to the Close of Escrow (hereafter the “Lease”), together with all security deposits, other deposits held in connection with the Lease, Lease guarantees and other similar credit enhancements providing additional security for the Lease;

1.1.3. All tangible and intangible personal property owned by Seller located on or used in connection with the Real Property, including, specifically, without limitation, equipment, furniture, tools and supplies, any website maintained by Seller and all related intangibles (the “Personal Property”);

1.1.4. All service contracts, agreements, warranties and guaranties relating to the operation, use or maintenance of the Property (the “Contracts”); and

1.1.5. To the extent transferable, all building permits, certificates of occupancy and other certificates, permits, licenses and approvals relating to the Property (the “Permits”).

2.  Purchase Price . The total Purchase Price of the Property shall be Seven Million SixHundred Thousand and No/100 Dollars ($7,600,000.00) (the “Purchase Price”), and payable as follows:

2.1. Deposit/Further Payments .

2.1.1. Provided this agreement has not been sooner terminated, Buyer shall deposit with LandAmerica Commercial Services, Mn: Gale Hunt, Telephone: 949-930-9307, Facsimile: 714-459-7203 1920 Main Street, 12th Floor, Irvine, California 92614 (“Escrow Holder”) the amount of One Hundred Thousand and No/100 Dollars ($100,000.00) (the “Initial Deposit”) on the date that is the later of (a) fifteen (15) days following the Effective Date; or (b) five (5) business days following receipt by Buyer of the fully executed Lease. Escrow Holder shall immediately release the Initial Deposit to Seller.

2.1.2. No later than the date which is forty-five (45) days after the EffectiveDate, and absent the termination of this Agreement, Buyer shall deliver to Escrow Holder the additional sum of One Hundred Thousand and. No/100 Dollars ($100,000.00), (the “Additional Deposit” and together with the Initial Deposit, the “Deposit”). Escrow Holder shall retain the Additional Deposit until the Close of Escrow or earlier termination of this Agreement.

2.1.3. On or before the Close of Escrow, Buyer shall deposit with the EscrowHolder to be held in Escrow the balance of the Purchase Price, in immediately available funds by wire transfer made payable to the Escrow Holder.

2.1.4. If this Agreement is terminated in accordance with its terms, the Depositshall be paid to the party entitled to retain it, as provided in this Agreement.

3.  Title and Survey .

3.1. Title Insurance . No later than ten (10) days following the Effective Date, Seller shall order a current title insurance commitment and/or preliminary title report for the Real Property, including legible copies of all items identified as exceptions therein (the “Title Documents”). Seller shall, at Seller’s sole expense, cause Land America Title Company (the “Title Company”) to issue an Extended Coverage ALTA Owner’s Policy of Title Insurance, together with title policy endorsements as requested by Buyer (the “Title Policy”) for and on behalf of Buyer in the total amount of the Purchase Price and obtainable at standard rates insuring good, marketable and insurable title in and to the Real Property. Buyer shall pay for the cost of the lender title insurance policy, if any. The Title Policy shall be free and clear of exceptions except as follows:

3.1.1. Real property taxes and assessments, which are a lien not yet due;

3.1.2. The Permitted Exceptions (hereinafter defined) included in the Title Policy and approved by Buyer in accordance with this Agreement.

3.2. Survey . On or before the Effective Date, Seller shall either (a) deliver an existing ALTA survey of the Real Property (the “Existing Survey”) to Buyer or (b) notify Buyer that an Existing Survey is not available. No later than ten (10) days following the Effective Date, Buyer shall order an update of the Existing Survey or a new ALTA survey of the Real Property if no Existing Survey is provided by Seller (the “Survey”). Buyer shall be responsible for all costs associated with the Survey.

4.  Due Diligence Items .

4.1. Seller shall, within five (5) days after the Effective Date (the “Delivery Date”), deliver to Buyer each of the following due diligence items in Seller’s possession or reasonably available to Seller (collectively, the “Due Diligence Items”):

4.1.1. Copies of any and all existing surveys (ALTA, boundary or otherwise) or plats of the Real Property;

4.1.2. Copies of any existing owner/lender title insurance policies for the Real Property or any portion thereof;

4.1.3 A draft copy of a proposed lease to be entered into with respect to the Real Property;

4.1.4. A list of all contracts, including service contracts, warranties, management, maintenance, leasing commission or other agreements affecting the Real Property, if any, together with copies of the same;

4.1.5. All site plans, leasing plans, existing or proposed building plans, drawings, environmental, mechanical, electrical, structural, soils and similar reports and/or audits and plans and specifications relative to the Real Property in the possession of Seller or under the control of Seller, if any;

4.1.6. True and correct copies of the real estate and personal property tax statements covering the Property or any part thereof for each of the two (2) years prior to the current year and, if available, for the current year;

4.1.7. A schedule of all current or pending litigation with respect to the Property or any part thereof, if any, or otherwise with respect to Seller that might have a material adverse effect on Seller’s ability to perform hereunder, together with a brief description of each such proceeding;

4.1.8. Copies of tiles and records relating to the ownership of the Real Property (provided, however, with Buyer’s consent such files and records may be made available for inspection by Buyer during ordinary business hours at Seller’s management office);

4.1.9. A “Phase I” environmental report for the Property.

5.  Inspections .

5.1. Procedure; Indemnity . Buyer, at its sole expense, shall have the right to conduct feasibility, environmental, engineering, title, survey and physical studies of the Real Property at any time from and after the Effective Date and for a period of ninety (90) days thereafter (the “Due Diligence Period”); provided, however, if the Due Diligence Items are not delivered on the Delivery Date, Buyer may, by written notice delivered prior to the conclusion of the Due Diligence Period, extend the Due Diligence Period for a period equal to the associated delay in delivery of such materials beyond the Delivery Date. Buyer and its duly authorized agents or representatives shall be permitted to enter upon the Real Property at all reasonable times during the Due Diligence Period in order to conduct engineering studies, soil tests and any other inspections and/or tests that Buyer may deem necessary or advisable (collectively, the “Inspections”). Buyer agrees to promptly discharge any liens that may be imposed against the Real Property as a result of Buyer’s Inspections and to defend, indemnify and hold Seller harmless from all claims, suits, losses, costs, expenses (including without limitation court costs and attorneys’ fees), liabilities, judgments and damages incurred by Seller as a result of any Inspections performed by Buyer.

5.2. Approval .

5.2.1. Buyer shall have until the conclusion of the Due Diligence Period (as the same may be extended in accordance with the terms of this Paragraph 5) to approve or disapprove the Inspections, the Due Diligence Items and Buyer’s evaluation of the Real Property. If Buyer shall fail to deliver a written notice to Seller and Escrow Holder within the Due Diligence Period approving the condition of the Real Property, this Agreement shall thereupon be automatically terminated, Buyer shall not be entitled to purchase the Real Property, Seller shall not be obligated to sell the Real Property to Buyer and the parties shall be relieved of any further obligation to each other with respect to the Real Property. Upon such termination, Seller shall be entitled to retain the Initial Deposit and the Second Deposit (if it has been made).

5.2.2. Notwithstanding anything to the contrary contained herein, Buyer hereby agrees that if this Agreement is terminated for any reason, Buyer shall promptly and at its sole expense return to Seller all Due Diligence items delivered by Seller to Buyer in connection with Buyer’s inspection of the Real Property.

5.2.3. Procedure for Approval of Title . Buyer shall have the Due Diligence Period to review and approve, in writing, the condition of the title to the Real Property; provided, however Buyer shall have a minimum of thirty (30) days to review the Title Documents and the Survey after Buyer’s receipt of both the Title Documents and the Survey (the “Title Review Period”). Upon request, Buyer will notify Escrow Holder and Seller when Buyer has received both the Title Documents and the Survey so that the Title Review Period can be determined. If the Due Diligence Period is scheduled to expire prior to the Title Review Period, the Due Diligence Period shall be extended automatically to coincide with the expiration of the Title Review Period, and any reference to the Title Review Period and the Due Diligence Period in this Agreement shall mean the same date. If the Title Documents or the Survey reflect or disclose any defect, exception or other matter affecting the Real Property (“Title Defects”) that is unacceptable to Buyer, then Buyer shall provide Seller with written notice of Buyer’s objections (“Buyer’s Objections”) no later than the conclusion of the Due Diligence Period; provided, however, if Buyer shall fail to notify Seller in writing within the Due Diligence Period either that the condition of title is acceptable or of any specific objections to the state of title to the Real Property, then Buyer shall be deemed to have objected to all exceptions to title or other conditions or matters which are shown on the Survey or described in the Title Documents except as provided below. Seller may, at its sole option, elect, by written notice given to Buyer within three (3) days following the conclusion of the Due Diligence Period (“Seller’s Notice Period”), to cure or remove the objections made or deemed to have been made by Buyer; provided, however, Seller shall in all events have the obligation to (i) act in good faith in making such election and curing any Title Defects that Seller elects to cure, (ii) specifically remove any monetary encumbrances affecting the Real Property, and (iii) remove any Title Defect that attaches to the Real Property subsequent to the conclusion of the Due Diligence Period. The failure of Seller to deliver written notice electing to cure Buyer’s Objections during Seller’s Notice Period shall be deemed an election by Seller not to cure Buyer’s Objections. Should Seller elect to attempt to cure or remove Buyer’s Objections, Seller shall have fifteen (15) days from the conclusion of the Due Diligence Period (“Cure Period”) in which to accomplish the cure. If Seller elects (or is deemed to have elected) not to cure or remove any objection, then Buyer shall be entitled to either (i) terminate this Agreement (in which case Seller shall be entitled to retain the Initial Deposit and the Second Deposit if it has been made); or (ii) waive any objections that Seller has not elected to cure and close this transaction as otherwise contemplated herein, The failure of Buyer to provide written notice to Seller within ten (10) days following the expiration of Seller’s Notice Period waiving any objections Seller has not elected to cure shall be deemed an election by Buyer to terminate this Agreement. Any exceptions to title accepted by Buyer pursuant to the terms of this paragraph shall be deemed “Permitted Exceptions”. If the Title Review Period, as extended by the notice and cure periods provided above, extends beyond the Close of Escrow, the Close of Escrow shall be extended accordingly. Notwithstanding the foregoing, the parties agree that Seller shall satisfy all monetary liens, including mechanics’ liens, at or before the Close of Escrow, and no such liens shall constitute Permitted Exceptions.

6.  Escrow .

6.1. Opening . Purchase and sale of the Property shall be consummated through an escrow (the “Escrow”) to be opened with Escrow Holder within three (3) business days following the Effective Date. This Agreement shall be considered the escrow instructions between the parties, with such further consistent written instructions as Escrow Holder shall require in order to clarify its duties and responsibilities. If Escrow Holder shall require further Escrow instructions, Escrow Holder may prepare such instructions on its usual form. Such further instructions shall, so long as not inconsistent with the terms of this Agreement, be promptly signed by Buyer and Seller and returned to Escrow Holder within three (3) business days of receipt thereof. If of any conflict between the terms and conditions of this Agreement and any further Escrow instructions, the terms and conditions of this Agreement shall control,

6.2. Close of Escrow . Subject to the extension rights set forth in this Agreement, Escrow shall close at a mutually agreeable date (“Close of Escrow”) within ten (10) days after the later of (i) the expiration of the Due Diligence Period or (ii) Seller’s receipt of a Certificate of Occupancy for the building being constructed on the Property; provided, however, that Buyer may, at Buyer’s election, and upon payment of Twenty-Five Thousand and No/100 Dollars ($25,000.00) on each occasion, extend the Close of Escrow on not more than one (1) occasion for an additional period of thirty (30) days. Any payments received by Seller pursuant hereto shall be applied to the Purchase Price at the Close of Escrow. In addition, Buyer will be given a credit of Eight Hundred Thousand and No/100 Dollars ($800,000.00) toward the Purchase Price at Closing for certain matters related to the Lease. Notwithstanding the foregoing, if the certificate of occupancy has not been issued by the date which is fifteen months after the Effective Date, this Agreement shall automatically terminate and the entire Deposit shall be returned to the Buyer.

6.3.2. On or before the Close of Escrow, the balance of the Purchase Price; provided, however that Buyer shall not be required to deposit the balance of the Purchase Price into Escrow until Buyer has been notified by Escrow Holder that (i) Seller has delivered to Escrow each of the documents and instruments to be delivered by Seller in connection with Buyer’s purchase of the Property, (ii) Title Company has committed to issue and deliver the Title Policy to Buyer, and (iii) the only impediment to the Close of Escrow is delivery of such amount by or on behalf of Buyer;

6.3.3. On or before the Close of Escrow, such other documents as Escrow Holder may reasonably require from Buyer in order to issue the Title Policy; and

6.3.4. A counterpart original of an Assignment and Assumption Agreement in the form attached hereto as Exhibit C (the “ Assignment Agreement ”), duly executed by Buyer assigning all of Seller’s right, title and interest in and to the Lease, Contracts and Permits from and after the Close of Escrow.

6.4. Seller Required to Deliver . On or before the Close of Escrow, Seller shall deliver to Escrow or Buyer, as applicable, the following:

6.4.1. A duly executed and acknowledged special warranty deed, conveying fee title to the Real Property in favor of Buyer;

6.4.2. A completed Certificate of Non-Foreign Status, duly executed by Seller under penalty of perjury;

6.4.3. A Bill of Sale, for the Personal Property, if any, in favor of Buyer and duly executed by Seller;

6.4.4. Such other documents as Escrow Holder may require from Seller in order to issue the Title Policy;

6.4.5. Tenant’s estoppel certificate and SNDA as required by and provided for in Paragraph 9.1.4;

6.4.6. A counterpart original of the Assignment Agreement duly executed by Seller, assigning all of Seller’s right, title and interest in and to the Lease, Contracts and Permits to Buyer from and after the Close of Escrow;

6.4.7. To Buyer, all keys to all buildings and other improvements located on the Real Property, combinations to any safes thereon, and security devices therein in Seller’s possession;

6.4.8. A letter from Seller addressed to the Tenant informing the Tenant of the change in ownership;

6.4.9. To Buyer, the original Lease;

6.4.10. To Buyer, all records and files relating to the management or operation of the Real Property, including, without limitation, all insurance policies, all service contracts, all tenant files (including correspondence), property tax bills, insurance, and property taxes;

6.4.11. A customary “gap” indemnity; and

6.4.12. A Reciprocal Access and Easement Agreement (“REA”) permitting all necessary means of access to the Property across that land retained by the Seller, as more specifically shown on the drawing entitled “Liberty Falls — Preliminary Site Plan “G” attached hereto as part of Exhibit A (the “Retained Parcel”).

6.5.2. All other costs customarily borne by purchasers of real property in Butler County, Ohio, which costs are not being paid by Seller in accordance with Paragraph 3 of this Agreement.

6.6.4. All costs, fees and expenses associated with last Eight Hundred Thousand and No/100 Dollars ($800,000.00) of the Purchase Price, including but not limited to, recording taxes and title insurance costs (that is to say, all costs paid by Buyer will be based on a purchase price of $6,800,000.00) ; and

6.6.5. All other costs customarily borne by sellers of real property in Butler County, Ohio.

6.7. Prorations .

6.7.1. Items to be Prorated . The following shall be prorated between Seller and Buyer as of the Close of Escrow with Buyer being deemed the owner of the Property as of the Close of Escrow:

(a) Taxes and Assessments . All non-delinquent real property taxes, assessments and other governmental impositions of any kind or nature, including, without limitation, any special assessments or similar charges (collectively, “Taxes”), which relate to the tax year within which the Close of Escrow occurs based upon the actual number of days in the tax year. With respect to any portion of the Taxes which are payable by the Tenant directly to the authorities, no proration or adjustment shall be made. The proration for Taxes shall be based upon the most recently issued tax bill for the Property. If the most recent tax bill is not for the current tax year, then the parties shall reprorate within thirty (30) days of the receipt of the tax bill for the current tax year. Upon the Close of Escrow and subject to the adjustment provided above, Buyer shall be responsible for real estate taxes and assessments on the Property payable from and after the Close of Escrow.

(b) Rents . Buyer will receive a credit at the Close of Escrow for all rents collected by Seller prior to the Close of Escrow and allocable to the period from and after the Close of Escrow based upon the actual number of days in the month. No credit shall be given Seller for accrued and unpaid rent or any other non-current sums due from Tenant until these sums are paid, and Seller shall retain the right to collect any such rent provided Seller does not sue to evict the Tenant or terminate the Lease. Buyer shall cooperate with Seller after the Close, of Escrow to collect any rent under the Lease which has accrued as of the Close of Escrow; provided, however, Buyer shall not be obligated to sue the Tenant or exercise any legal remedies under the Lease or to incur any expense over and above its own regular collection expenses. All payments collected from Tenant after Close of Escrow shall first be applied to the month in which the Close of Escrow occurs, then to any rent due to Buyer for the period after the Close of Escrow and finally to any rent due to Seller for the period prior to the Close of Escrow; provided, however, notwithstanding the foregoing, if Seller collects any payments from Tenant after the Close of Escrow through its own collection efforts, Seller may first apply such payments to rent due Seller for the period prior to the Close of Escrow.

(c)  CAM Expenses . To the extent that Tenant is reimbursing the landlord for common area maintenance and other operating expenses (collectively, “CAM Charges”), CAM Charges shall be prorated at the Close of Escrow and again subsequent to the Close of Escrow, as of the date of the Close of Escrow on a lease-by-lease basis with each party being entitled to receive a portion of the CAM Charges payable under the Lease for the CAM Lease Year in which the Close of Escrow occurs, which portion shall be equal to the actual CAM Charges incurred during the party’s respective periods of ownership of the Property during the CAM Lease Year. As used herein, the term “CAM Lease Year” means the twelve (12) month period as to which annual CAM Charges are owed under each Lease. Five (5) days prior to Close of Escrow Seller shall submit to Buyer an itemization of its actual CAM Charges operating expenses through such date and the amount of CAM Charges received by Seller as of such date, together with an estimate of CAM Charges to be incurred to, but not in