Exhibit 10.1
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this “Agreement”), dated as of August 24, 2009 (the
“Effective Date”), is by and among GRUBB & ELLIS HEALTHCARE REIT II, INC., a
Maryland corporation (the “Company”), GRUBB & ELLIS HEALTHCARE REIT II HOLDINGS,
LP, a Delaware limited partnership (the “Partnership”), GRUBB & ELLIS HEALTHCARE
REIT II ADVISOR, LLC, a Delaware limited liability company (the “Advisor”).
WITNESSETH
WHEREAS, the Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-11 (the “Registration Statement”) covering the
initial public offering of its common stock, par value $0.01 per share (the
“Shares”);
WHEREAS, the Company intends to qualify as a REIT (as defined below), and
intends to invest its funds in investments permitted by the terms of the
Company’s Articles of Incorporation and Sections 856 through 860 of the Code (as
defined below);
WHEREAS, the Company is the general partner of the Partnership and intends to
conduct all of its business and make all of its investments in Properties and
Real Estate-Related Investments through the Partnership;
WHEREAS, the Company and the Partnership desire to avail themselves of the
experience, sources of information, advice, assistance and certain facilities
available to the Advisor (as defined below) and to have the Advisor undertake
the duties and responsibilities hereinafter set forth, on behalf of, and subject
to the supervision of, the Board of Directors, all as provided herein; and
WHEREAS, the Advisor is willing to undertake to render such services, subject to
the supervision of the Board of Directors, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
definitions hereinafter indicated:
Acquisition Expenses. Any and all expenses incurred by the Company, the
Partnership, the Advisor, or any Affiliate of any such entity in connection with
the selection, evaluation, and acquisition of, and investment in Properties and
Real Estate-Related Investments, whether or not acquired (or made), including,
but not limited to, legal fees and expenses, travel and communications expenses,
cost of appraisals and surveys, nonrefundable option payments on property not
acquired, accounting fees and expenses, architectural, engineering and other
property reports, environmental and asbestos audits, title insurance premiums
and escrow fees, transfer taxes, and miscellaneous expenses related to the
selection, evaluation and acquisition of Properties and Real Estate-Related
Investments.

 

 

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Acquisition Fee. Any and all fees and commissions, exclusive of Acquisition
Expenses, paid by any Person to any other Person (including any fees or
commissions paid by or to any Affiliate of the Company or the Advisor) in
connection with the purchase, origination, development or construction of an
Asset, including, without limitation, real estate commissions, selection fees,
Development Fees (as such term is defined in the NASAA Guidelines), Construction
Fees (as such term is defined in the NASAA Guidelines), non-recurring management
fees, loan fees, points or any other fees of a similar nature, however
designated. Excluded shall be Development Fees and Construction Fees paid to any
Person not affiliated with the Sponsor in connection with the actual development
and construction of any Property.
Advisor. Grubb & Ellis Healthcare REIT II Advisor, LLC, a Delaware limited
liability company, any successor advisor to the Company and the Partnership to
which Grubb & Ellis Healthcare REIT II Advisor, LLC or any successor advisor
subcontracts substantially all of its functions.
Affiliate or Affiliated. An Affiliate of another Person includes only the
following: (i) any Person directly or indirectly owning, controlling, or holding
with the power to vote ten percent (10.0%) or more of the outstanding voting
securities of such other Person; (ii) any Person ten percent (10.0%) or more of
whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; (iii) any Person
directly or indirectly controlling, controlled by, or under common control with
such other Person; (iv) any executive officer, director, trustee, or general
partner of such other Person; and (v) any legal entity for which such Person
acts as an executive officer, director, trustee, or general partner. An entity
shall not be deemed to control or be under common control with an
Advisor-sponsored program unless (i) the entity owns ten percent (10.0%) or more
of the voting equity interests of such program or (ii) a majority of the board
of directors (or equivalent governing body) of such program is comprised of
Affiliates of the entity.
Appraised Value. Value according to an appraisal made by an Independent
Appraiser.
Articles of Incorporation. The Articles of Incorporation of the Company under
Title 2 of the Corporations and Associations Article of the Annotated Code of
Maryland dated as of January 8, 2009, as amended from time to time.
Asset Management Fee. The Asset Management Fee payable to the Advisor as defined
in Section 8(b).
Average Invested Assets. For a specified period, the average of the aggregate
Book Value of the assets of the Company invested, directly or indirectly, in
Real Estate-Related Investments or Properties, before reserves for depreciation,
amortization, bad debts or other similar non-cash reserves, computed by taking
the average of such values at the end of each month during such period (for
loans, the average of the aggregate loan balances outstanding at the end of each
month during such period).
Board of Directors or Board. The persons holding such office, as of any
particular time, under the Articles of Incorporation of the Company, whether
they be the Directors named therein or additional or successor Directors.
Book Value. The value of an asset on the books of the Company, before allowance
for depreciation or amortization.
Bylaws. The bylaws of the Company, as the same are in effect from time to time.

 

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Capped O&O Expenses. All Organizational and Offering Expenses other than selling
commissions and the dealer manager fee.
Code. Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.
Company. Grubb & Ellis Healthcare REIT II, Inc., a corporation organized under
the laws of the State of Maryland.
Competitive Real Estate Commission. A real estate or brokerage commission for
the purchase or sale of a property which is reasonable, customary, and
competitive in light of the size, type, and location of the property.
Contract Purchase Price. The amount actually paid or allocated by the Company in
respect of the purchase, development, construction or improvement of a Property,
or the amount funded or actually paid to acquire or originate a Real
Estate-Related Investment, in each case exclusive of Acquisition Fees and
Acquisition Expenses.
Contract Sales Price. The total consideration received by the Company for the
sale of a Property or other Real Estate-Related Investment exclusive of the
applicable Disposition Fee.
Director. A member of the Board of Directors of the Company.
Disposition Fee. The fee payable to the Advisor under certain circumstances in
connection with the Sale of one or more Properties pursuant to Section 8(c).
Distributions. Any distributions of money or other property by the Company to
owners of Shares, including distributions that may constitute a return of
capital for federal income tax purposes.
Financing Coordination Fee. The fees payable to the Advisor pursuant to
Section 8(e).
Fiscal Year. Any period for which any income tax return is submitted by the
Company to the Internal Revenue Service and which is treated by the Internal
Revenue Service as a reporting period.
Gross Income. All cash receipts derived from the operation of any Property,
excluding (i) tenant security deposits unless and until such deposits are
forfeited upon a tenant default and (ii) proceeds from insurance claims,
condemnation proceedings, sales or refinancings.
Gross Offering Proceeds. The aggregate purchase price of all Shares sold for the
account of the Company through an Offering, without deduction for volume
discounts, selling commissions, the dealer manager fee or Organizational and
Offering Expenses. For the purpose of computing Gross Offering Proceeds, the
purchase price of any Share for which reduced selling commissions are paid to
the dealer manager or a soliciting dealer (where net proceeds to the Company are
not reduced) shall be deemed to be the full amount of the offering price per
Share pursuant to the Prospectus for such Offering without reduction.

 

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Independent Appraiser. A person or entity with no material current or prior
business or personal relationship with the Advisor or the Directors, who is
engaged to a substantial extent in the business of rendering opinions regarding
the value of assets of the type held by the Company, and who is a qualified
appraiser of real estate as determined by the Board. Membership in a nationally
recognized appraisal society such as the American Institute of Real Estate
Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence
of such qualification.
Independent Director. A Director who is not on the date of determination, and
within the last two years from the date of determination has not been, directly
or indirectly associated with the Sponsor or the Advisor by virtue of
(i) ownership of an interest in the Sponsor, the Advisor or any of their
Affiliates, other than the Company, (ii) employment by the Sponsor, the Advisor
or any of their Affiliates, (iii) service as an officer or director of the
Sponsor, the Advisor or any of their Affiliates, other than as a Director of the
Company or as a director or trustee of any other real estate investment trust
organized by the Sponsor or advised by the Advisor, (iv) performance of
services, other than as a Director, for the Company, (v) service as a director
or trustee of more than three real estate investment trusts organized by the
Sponsor or advised by the Advisor or (vi) maintenance of a material business or
professional relationship with the Sponsor, the Advisor or any of their
Affiliates. A business or professional relationship is considered “material” per
se if the aggregate gross revenue derived by the Director from the Sponsor, the
Advisor and their Affiliates (excluding fees for serving as a Director of the
Company or another real estate investment trust or real estate program that is
organized, advised or managed by the Advisor or its Affiliates) exceeds 5.0% of
either the Director’s annual gross income during either of the last two years or
the Director’s net worth on a fair market value basis. An indirect association
with the Sponsor or the Advisor shall include circumstances in which a
Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or
daughter-in-law, or brother- or sister-in-law is or has been associated with the
Sponsor, the Advisor, any of their Affiliates or the Company.
Intellectual Property Rights. All rights, titles and interests, whether foreign
or domestic, in and to any and all trade secrets, confidential information
rights, patents, invention rights, copyrights, service marks, trademarks,
know-how, or similar intellectual property rights and all applications and
rights to apply for such rights, as well as any and all moral rights, rights of
privacy, publicity and similar rights and license rights of any type under the
laws or regulations of any governmental, regulatory, or judicial authority,
foreign or domestic and all renewals and extensions thereof.
Joint Venture. Any joint venture, partnership, limited liability company or
other Affiliate of the Company (other than the Partnership) that owns, in whole
or in part on behalf of the Company, any Properties.
Lease Fee. The Lease Fee payable to the Advisor, an Affiliate of the Advisor or
a non-Affiliated third party, as defined in Section 8(d).
Listing. The term “Listing” shall mean that the Shares have been approved for
trading on a national securities exchange. Upon such Listing, the Shares shall
be deemed Listed.
NASAA Guidelines. The Statement of Policy Regarding Real Estate Investment
Trusts published by the North American Securities Administrators Association,
Inc. on May 7, 2007, and as in effect on the date hereof.

 

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Net Income. For any period, the total revenues applicable to such period, less
the total expenses applicable to such period excluding additions to reserves for
depreciation, amortization, bad debts or other similar non-cash reserves;
provided, however, Net Income for purposes of calculating total allowable
Operating Expenses (as defined herein) shall exclude the gain from the sale of
the Company’s assets.
Offering. Any offering of Shares that is registered with the Securities and
Exchange Commission, excluding Shares offered under any employee benefit plan.
Offering Stage. The period from the commencement of the Company’s initial public
equity offering through the termination of the Company’s last public equity
offering prior to Listing. For purposes of this definition, “public equity
offering” does not include offerings on behalf of selling stockholders or
offerings related to a distribution reinvestment plan, employee benefit plan or
the redemption of interests in the Partnership.
Operating Expenses. All costs and expenses incurred by the Company, as
determined under generally accepted accounting principles in the United States
of America, which in any way are related to the operation of the Company or to
Company business, including fees paid to the Advisor, but excluding (i) the
expenses of raising capital such as Organizational and Offering Expenses, legal,
audit, accounting, underwriting, brokerage, listing, registration, and other
fees, printing and other such expenses and tax incurred in connection with the
issuance, distribution, transfer, registration and Listing of the Shares,
(ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as
depreciation, amortization and bad loan reserves, (v) incentive fees paid in
compliance with Section IV.F of the NASAA Guidelines and (vi) Acquisition Fees
and Acquisition Expenses, real estate commissions on resale of property, and
other expenses connected with the acquisition, disposition, and ownership of
real estate interests, mortgage loans or other property (such as the costs of
foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property).
Organizational and Offering Expenses. Any and all costs and expenses, including
selling commissions and the dealer manager fee, incurred by the Advisor or any
Affiliate in connection with the formation, qualification and registration of
the Company and the offering of the Shares, including, without limitation, the
following: total underwriting and brokerage discounts and commissions (including
fees of the underwriter’s attorneys); printing, engraving, mailing and
distributing costs; salaries of employees while engaged in sales activity; all
charges of transfer agents, registrars, trustees, escrow holders, depositories
and experts; and fees, expenses and taxes related to the filing, registration
and qualification of the sale of the Shares under federal and state laws,
including accountants’ and attorneys’ fees.
Partnership. Grubb & Ellis Healthcare REIT II Holdings, LP, a Delaware limited
partnership formed to own and operate properties on behalf of the Company.
Partnership Agreement. The Agreement of Limited Partnership of the Partnership,
as amended from time to time, between the Company, as General Partner and the
Advisor, as the initial Limited Partner.
Person. An individual, corporation, partnership, estate, trust (including a
trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation within
the meaning of Section 509(a) of the Code, joint stock company or other entity,
or any government or any agency or political subdivision thereof, and also
includes a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

 

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Property or Properties. Any land, rights in land (including leasehold
interests), and any buildings, structures, improvements, furnishings, fixtures
and equipment located on or used in connection with land and rights or interests
in land, or any portion thereof, transferred or conveyed to the Company or the
Partnership, either directly or indirectly, or such investments the Board of
Directors and the Advisor mutually designate as Properties to the extent such
investments could be classified as either Properties or Real Estate-Related
Investments.
Property Management Fee. The Property Management Fee as defined in Section 8(d).
Property Manager. Any entity that has been retained to perform and carry out
property rental, leasing, operation and management services at one or more of
the Properties, excluding persons, entities or independent contractors retained
or hired to perform facility management or other services or tasks at a
particular Property.
Proprietary Property. All modeling algorithms, tools, computer programs,
know-how, methodologies, processes, technologies, ideas, concepts, skills,
routines, subroutines, operating instructions and other materials and aides used
in performing the duties set forth and all modifications, enhancements and
derivative works of the foregoing.
Prospectus. Prospectus has the meaning set forth in Section 2(10) of the
Securities Act of 1933, as amended, including a preliminary prospectus, an
offering circular as described in Rule 253 of the General Rules and Regulations
under the Securities Act of 1933, as amended, or, in the case of an intrastate
offering, any document by whatever name known, utilized for the purpose of
offering and selling securities of the Company to the public.
REIT. A real estate investment trust under Sections 856 through 860 of the Code.
Real Estate-Related Investments. Any real estate-related investments transferred
or conveyed to the Company or the Partnership, either directly or indirectly, or
such investments the Board of Directors and the Advisor mutually designate as
Real Estate-Related Investments to the extent such investments could be
classified as either Real Estate-Related Investments or Properties.
Sale or Sales. (i) Any transaction or series of transactions whereby: (A) the
Company or the Partnership (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of
any Property or portion thereof, including the lease of any Property consisting
of the building only, and including any event with respect to any Property which
gives rise to a significant amount of insurance proceeds or condemnation awards;
(B) the Company or the Partnership (except as described in other subsections of
this definition) sells, puts, transfers, conveys, or relinquishes its ownership
of all or substantially all of the interest of the Company or the Partnership in
any joint venture in which it is a co-venturer or partner; (C) any joint venture
(except as described in other subsections of this definition) in which the
Company or the Partnership as a co-venturer or partner sells, grants, transfers,
conveys, or relinquishes its ownership of any Property or portion thereof,
including any event with respect to any Property which gives rise to insurance
claims or condemnation awards; (D) the Company or the Partnership directly or
indirectly (except as described in other subsections of this definition) sells,
grants, conveys or relinquishes its interest in any loan or mortgage or any
portion thereof (including with respect to any

 

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mortgage or loan, all payments thereunder or in satisfaction thereof other than
regularly scheduled interest payments) of amounts owed pursuant to such loan or
mortgage and any event which gives rise to the payment of a significant amount
of insurance proceeds or condemnation or similar award; or (E) the Company or
the Partnership directly or indirectly (except as described in other subsections
of this definition) sells, grants, transfers, conveys or relinquishes its
ownership of any other Property not previously described in this definition or
any portion thereof, but (ii) not including any transaction or series of
transactions specified in clause (i)(A), (i)(B), (i)(C), (i)(D) or (i)(E) above
in which the proceeds of such transaction or series of transactions are
reinvested in one or more Properties within one hundred eighty (180) days
thereafter.
Sponsor. Grubb & Ellis Company.
Stockholders. The registered holders of the Shares.
2.0%/25.0% Guidelines. The 2.0%/25.0% Guidelines as defined in Section 9(c)(ii).
2. Appointment. The Company and the Partnership appoint the Advisor to serve as
its advisor as of the Effective Date, on the terms and conditions set forth in
this Agreement, and the Advisor hereby accepts such appointment as of the
Effective Date.
3. Duties and Authority of the Advisor. The Advisor undertakes to use its
commercially reasonable efforts (1) to present to the Company and the
Partnership potential investment opportunities in order to provide a continuing
and suitable investment program consistent with the investment objectives and
policies of the Company as determined and adopted from time to time by the Board
and (2) to manage, administer, promote, maintain, and improve the Properties on
an overall portfolio basis in a diligent manner. The services of the Advisor are
to be of scope and quality not less than those generally performed by
professional asset managers of other similar property portfolios. The Advisor
shall make available the full benefit of the judgment, experience and advice of
the members of the Advisor’s organization and staff with respect to the duties
it will perform under this Agreement. To facilitate the Advisor’s performance of
these undertakings, but subject to the restrictions included in Sections 4 and 7
and the provisions of Section 11 and to the continuing and exclusive authority
of the Board and the general partner of the Partnership, the Company and the
Partnership hereby delegate to the Advisor the authority to, and the Advisor
hereby agrees to, either directly or by engaging a duly qualified and licensed
Affiliate of the Advisor or other duly qualified and licensed Person:
(a) serve as the Company’s and the Partnership’s investment and financial
advisor and, as requested by the Board, provide research and economic and
statistical data in connection with the Company’s assets and investment
policies;
(b) provide the daily management of the Company and the Partnership and perform
and supervise the various administrative functions reasonably necessary for the
management of the Company and the Partnership;
(c) maintain and preserve the books and records of the Company, including (i) a
stock ledger reflecting a record of the Stockholders and their ownership of the
Company’s Shares, (ii) acting as transfer agent for the Company’s Shares or
selecting, engaging and overseeing the performance by a third party transfer
agent, and (iii) maintaining the accounting and other record-keeping functions
at the Property and Company levels;

 

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(d) investigate, select, and, on behalf of the Company and the Partnership,
engage and conduct business with such Persons as the Advisor deems necessary to
the proper performance of its obligations hereunder, including but not limited
to consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, transfer agents, corporate fiduciaries, escrow
agents, depositaries, custodians, agents for collection, insurers, insurance
agents, banks, builders, developers, property owners, property management
companies, real estate operating companies, securities investment advisors,
mortgagors, and any and all agents for any of the foregoing, including
Affiliates of the Advisor, and Persons acting in any other capacity deemed by
the Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of
the Company and the Partnership with any of the foregoing;
(e) make investments in and dispositions of Real Estate-Related Investments
within the discretionary limits and authority as granted by the Board and in
accordance with the Articles of Incorporation;
(f) consult with the officers of the Company and the Board and assist the Board
in the formulation and implementation of the Company’s financial policies, and,
as necessary, furnish the Board with advice and recommendations with respect to
the making of investments consistent with the investment objectives and policies
of the Company and in connection with any borrowings proposed to be undertaken
by the Company and the Partnership;
(g) select joint venture partners, structure corresponding agreements and
oversee and monitor these relationships;
(h) recommend to the Board of Directors appropriate transactions which would
provide liquidity to the Stockholders;
(i) oversee the performance by a third party or Affiliated Property Manager of
its duties, including collection of payments due from third parties under
contracts related to use of any Property and other assets of the Company and
payment of Property expenses and maintenance;
(j) conduct periodic on-site visits to some or all (as the Advisor deems
reasonably necessary) of the Properties to inspect the physical condition of the
Properties and to evaluate the performance of a third party or Affiliated
Property Manager of its duties;
(k) review, analyze and comment upon the operating budgets, capital budgets and
leasing plans prepared and submitted by a third party or Affiliated Property
Manager and aggregate these property budgets into the Company’s overall budget;
(l) review and analyze on-going financial information pertaining to each
Property, each Real Estate-Related Investment and the overall portfolio of
Properties and Real Estate-Related Investments;
(m) if a transaction requires approval by the Board of Directors, deliver to the
Board of Directors all documents requested by them in their evaluation of the
proposed investment in the Property or the Real Estate-Related Investment;
(n) formulate and oversee the implementation of strategies for the
administration, promotion, management, operation, maintenance, improvement,
financing and refinancing, marketing, leasing, and disposition of Properties on
an overall portfolio basis;

 

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(o) subject to the provisions of Sections 3(m) and 4 hereof, (i) locate, analyze
and select potential investments in Properties and Real Estate-Related
Investments, (ii) structure and negotiate the terms and conditions of
transactions pursuant to which investment in Properties and Real Estate-Related
Investments will be made; (iii) make investments in Properties and Real
Estate-Related Investments on behalf of the Company or the Partnership in
compliance with the investment objectives and policies of the Company;
(iv) arrange for financing and refinancing and make other changes in the asset
or capital structure of, and dispose of, reinvest the proceeds from the sale of,
or otherwise deal with the investments in, Properties and Real Estate-Related
Investments; (v) enter into leases, supply agreements and other income-producing
contracts relating to third party use of any Property and Real Estate-Related
Investments of the Company; (vi) enter into service contracts for any Property
or Real Estate-Related Investment, including oversight of Affiliated companies
that perform property management services for the Company and the Partnership;
(vii) if applicable, oversee a non-Affiliated Property Manager and any other
non-Affiliated Persons who perform services for the Company; and (viii) to the
extent necessary, perform all other operational functions for the maintenance
and administration of such Property or Real Estate-Related Investments;
(p) obtain the prior approval of the Board, any particular Directors specified
by the Board or any committee of the Board, as the case may be, for any and all
investments in Properties and Real Estate-Related Investments;
(q) negotiate on behalf of the Company and the Partnership with banks or lenders
for loans to be made to the Company, and negotiate on behalf of the Company and
the Partnership with investment banking firms and broker-dealers or negotiate
private sales of Shares and other securities or obtain loans for the Company and
the Partnership, but in no event in such a way so that the Advisor shall be
acting as broker-dealer or underwriter; provided, further, that any fees and
costs payable to third parties incurred by the Advisor in connection with the
foregoing shall be the responsibility of the Company or the Partnership;
(r) on behalf of the Company and the Partnership, maintain, with respect to any
Property and to the extent available, title insurance or other assurance of
title and customary fire, casualty and public liability insurance;
(s) obtain reports (which may be prepared by the Advisor or its Affiliates),
where appropriate, concerning the value of investments or contemplated
investments of the Company and the Partnership in Properties or Real
Estate-Related Investments;
(t) from time to time, or at any time reasonably requested by the Board, provide
information or make reports to the Board related to its performance of services
to the Company and the Partnership under this Agreement;
(u) from time to time, or at any time reasonably requested by the Board, make
reports to the Board of the investment opportunities it has presented to other
Advisor-sponsored programs or that it has pursued directly or through an
Affiliate;
(v) provide the Company and the Partnership with all necessary cash management
services;
(w) deliver to or maintain on behalf of the Company copies of all appraisals
obtained in connection with the investments in Properties and all valuations of
Real Estate-Related Investments as may be required to be obtained by the Board;

 

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(x) notify the Board of all proposed material transactions before they are
completed;
(y) at the direction of Company management, prepare the Company’s periodic
reports and other filings made under the Securities Exchange Act of 1934, as
amended, and the Company’s Post-Effective Amendments to the Registration
Statement as well as all related prospectuses, prospectus supplements and
supplemental sales literature and assist in connection with the filing of such
documents with the appropriate regulatory authorities;
(z) supervise the preparation and filing and distribution of returns and reports
to governmental agencies and to investors and act on behalf of the Company in
connection with investor relations;
(aa) effect any private placements of Shares or other interests in Properties as
may be approved by the Board;
(bb) establish and maintain bank accounts on behalf of the Company and the
Partnership pursuant to Section 5 of this Agreement;
(cc) provide office space, equipment and personnel as required for the
performance of the foregoing services as the Advisor; and
(dd) do all things it reasonably deems necessary to assure its ability to render
the services described in this Agreement.
4. Modification or Revocation of Authority of Advisor. The Board may, at any
time upon the giving of notice to the Advisor, modify or revoke the authority or
approvals set forth in Section 3; provided, however, that such modification or
revocation shall be effective upon receipt by the Advisor and shall not be
applicable to investment transactions to which the Advisor has committed the
Company and the Partnership prior to the date of receipt by the Advisor of such
notification.
5. Bank Accounts. At the direction of the Board of Directors, the Advisor may
establish and maintain one or more bank accounts in its own name for the account
of the Company and the Partnership or in the name of the Company and the
Partnership and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company
and the Partnership, under such terms and conditions as the Board may approve,
provided that no funds shall be commingled with the funds of the Advisor; and
the Advisor shall from time to time render appropriate accountings of such
collections and payments to the Board and to the auditors of the Company.
6. Records; Access. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board
and by counsel, auditors and authorized agents of the Company, at any time or
from time to time during normal business hours. The Advisor shall at all
reasonable times have access to the books and records of the Company and the
Partnership.

 

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7. Limitations on Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its
sole judgment made in good faith, would (a) adversely affect the status of the
Company as a REIT, (b) subject the Company to regulation under the Investment
Company Act of 1940, as amended, or (c) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company or the Partnership, its Shares or its other securities, or otherwise
not be permitted by the Articles of Incorporation or Bylaws of the Company,
except if such action shall be ordered by the Board, in which case the Advisor
shall notify promptly the Board of the Advisor’s judgment of the potential
impact of such action and shall refrain from taking such action until it
receives further clarification or instructions from the Board. In such event the
Advisor shall have no liability for acting in accordance with the specific
instructions of the Board so given. Notwithstanding the foregoing, the Advisor,
its directors, officers, employees and stockholders, and stockholders, directors
and officers of the Advisor’s Affiliates shall not be liable to the Company, the
Partnership, the Board or to the Stockholders for any act or omission by the
Advisor, its directors, officers, employees or stockholders, or stockholders,
directors or officers of the Advisor’s Affiliates taken or omitted to be taken
in the performance of their duties under this Agreement except as provided in
Sections 20 and 21 of this Agreement.
8. Fees.
(a) Acquisition Fee. The Advisor or its Affiliates shall receive as compensation
for services rendered in connection with the investigation, selection and
acquisition of Properties or Real Estate-Related Investments (by purchase,
investment or exchange) funded by equity raised during the Offering Stage
through the Advisor or its Affiliates, including any acquisitions completed
after the end of the Offering Stage and/or the termination of this Agreement or
funded with net proceeds from a Sale, an acquisition fee payable by the Company
(the “Acquisition Fee”). The total Acquisition Fee paid to the Advisor or its
Affiliates for services provided by the Advisor, its Affiliates or
sub-contractors thereof, but excluding real estate commissions paid to real
estate broker Affiliates of the Advisor, shall be (x) with respect to each Real
Estate-Related Investment, two percent (2.0%) of the Contract Purchase Price of
each such Real Estate-Related Investment and (y) with respect to Properties, two
and one-quarter percent (2.25%) of the Contract Purchase Price of each such
Property.
At the Advisor’s discretion, a portion of the Acquisition Fee may be paid to
third-party developers for services rendered. Acquisition Fees shall be payable
on the acquisition of a specific Property, on the acquisition of a portfolio of
Properties through a purchase of assets, controlling securities or by joint
venture, by a merger or similar business combination or other comparable
transaction, or on the completion of development of a Property or Properties for
the Company, including the acquisition of any Properties funded by equity raised
during the Offering Stage by the Advisor or its Affiliates which are completed
after the end of the Offering Stage and/or the termination of this Agreement.
However, the total of all Acquisition Fees and Acquisition Expenses payable with
respect to any Property or Real Estate-Related Investment that is acquired shall
not exceed six percent (6.0%) of the Contract Purchase Price of such Property or
Real Estate-Related Investment unless fees in excess of such amount are approved
by a majority of the Board of Directors, including a majority of the Independent
Directors.
(b) Asset Management Fee. Subject to the overall limitations contained below in
this Section 8(b), commencing on the Effective Date, the Advisor shall be paid a
monthly fee in arrears for the services rendered in connection with the
management of the Company’s assets (the “Asset Management Fee”) in an amount
equal to one-twelfth of eighty-five one-hundredths of one percent (0.85%) of the
Average Invested Assets for such month; provided, however, that the Company’s
obligation to pay the Asset Management Fee shall be subject to the Stockholders
receiving annualized Distributions in an amount equal to five percent (5.0%) per
annum of average Invested Capital (as such term is defined in the Articles of
Incorporation). The Asset Management Fee shall be payable by the Company in cash
or in Shares at the election of the Advisor in whole or in part, from time to
time,

 

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by the Advisor (without interest); provided, however, that the Company may
object to the Advisor’s election and refuse to pay the Advisor in Shares if such
payment would result in a conflict with any provision of the Articles of
Incorporation. If the Advisor elects to receive the Asset Management Fee in the
form of Shares and such election does not conflict with any provision of the
Articles of Incorporation, then the Shares shall be valued at a price per share
equal to the average closing price of the Shares over the ten trading days
immediately preceding the date of such election if the Shares are Listed at such
time. If the Shares are not Listed and the Company is still in its Offering
Stage, and for the twelve-month period following the termination of the Offering
Stage, at such time, the Advisor will estimate the per share value of the Shares
at a price per share equal the most recent price paid to acquire a Share during
the Offering Stage (excluding any Shares sold pursuant to any distribution
reinvestment plan or sold with purchase price discounts). If the Shares are not
Listed and the Offering Stage has been completed for more than twelve
(12) months at such time, the Shares shall be valued at a price per share equal
to the estimated value of the shares as reasonably determined by the Advisor on
the date of election, based upon the most recent Appraised Value of the Company.
(c) Disposition Fee. If the Advisor or an Affiliate of the Advisor provides a
substantial amount of services (as determined by a majority of the Independent
Directors) in connection with the Sale of one or more Properties, the Advisor or
such Affiliate shall receive at closing a disposition fee equal to the lesser of
(i) two percent (2.0%) of the Contract Sales Price of such Property or
Properties, or (ii) fifty percent (50.0%) of a Competitive Real Estate
Commission given the circumstances surrounding the sale (the “Disposition Fee”).
In each case in which a Disposition Fee may be payable, the precise amount of
the fee within the limits set forth in the preceding sentence shall be
determined by the Board, including a majority of the Independent Directors,
based upon the extent of the services provided by the Advisor or its Affiliate
and market norms for the services provided. Notwithstanding anything to the
contrary herein, no Disposition Fee shall be payable to the Advisor or its
Affiliate for Property Sales if such Sales involve the Company selling all or
substantially all of its Properties in one or more transactions designed to
effectuate a business combination transaction (as opposed to a Company
liquidation, in which case the Disposition Fee would be payable if the Advisor
or an Affiliate provides a substantial amount of services as provided above).
Any Disposition Fee payable under this section may be paid in addition to real
estate commissions paid to non-Affiliates, provided that the total real estate
commissions (including such Disposition Fee) paid to all Persons by the Company
for each Property shall not exceed an amount equal to the lesser of (i) six
percent (6.0%) of the Contract Sales Price of the Property or (ii) the
Competitive Real Estate Commission for the Property.
(d) Property Management Fee; Lease Fee. Either the Advisor or an Affiliate of
the Advisor as the Property Manager shall receive a monthly property management
fee of up to four percent (4.0%) of the monthly Gross Income from each Property
managed by such Property Manager (the “Property Management Fee”). The Advisor or
an Affiliate of the Advisor may sub-contract its duties to any third-party,
including for fees less than the Property Management Fee payable to the Advisor.
In addition, the Advisor or an Affiliate of the Advisor as the Property Manager
may receive a separate fee for any leasing activities in an amount not to exceed
the fee customarily charged in arm’s length transactions by others rendering
similar services in the same geographic area for similar properties, as
determined by a survey of brokers and agents in such area (the “Lease Fee”). The
Lease Fee is generally expected to range from three percent (3.0%) to eight
percent (8.0%) of the gross revenues generated during the initial term of the
lease. In addition to the above Property Management Fee and Lease Fee, for each
Property managed directly by a non-Affiliated Property Manager but where an
Affiliate of the Advisor has oversight responsibility over such non-Affiliated
Property Manager, the Company will pay such Affiliate of the Advisor a monthly
oversight fee of up to one percent (1.0%) of the Gross Income from the Property;
provided, however, that in no event shall the Company pay both the Property
Management Fee and an oversight fee to the Advisor or its Affiliates with
respect to the same property.

 

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(e) Financing Coordination Fee. In the event of the origination or refinancing
of any debt financing obtained by the Company, including the assumption
(directly or indirectly) of existing debt, that is used to acquire properties,
to make other permitted investments or is assumed (directly or indirectly) in
connection with the acquisition of Properties or Real Estate-Related
Investments, and if the Advisor provides services related to such origination or
refinancing, the Company will pay to the Advisor a Financing Coordination Fee
equal to one percent (1.0%) of the amount available to the Company and/or
outstanding under such financing; provided, however, that the Advisor shall be
entitled to a Financing Coordination Fee in connection with the refinancing of a
loan secured by any particular property that was previously subject to a
financing in which the Advisor received a Financing Coordination Fee only to the
extent, and on such amount, if any, by which the principal amount of the new
loan exceeds the principal amount of the original loan at the time such original
loan was acquired by the Company.
(f) Construction Management Fee; Development Services Fee. In the event that the
Advisor or its Affiliates assist with planning and coordinating the construction
of any capital or tenant improvements, the Company may pay the respective party
up to 5.0% of the cost of such improvements. In addition, the Advisor or its
Affiliates may provide development-related services, and the Company will pay
the respective party a development fee in an amount that is usual and customary
for comparable services rendered for similar projects in the geographic market
where the services are provided; however, the Company will not pay a development
fee to the Advisor or its Affiliates if the Advisor elects to receive an
Acquisition Fee based on the cost of such development.
9. Expenses.
(a) Reimbursable Expenses. In addition to the compensation paid to the Advisor
pursuant to Section 8 hereof, the Company or the Partnership shall pay directly
or reimburse the Advisor for all of the expenses paid or incurred by the Advisor
(to the extent not reimbursable by another party, such as the dealer manager) in
connection with the services it provides to the Company and the Partnership
pursuant to this Agreement, including, but not limited to:
(i) the Organizational and Offering Expenses; provided, however, that within
sixty (60) days after the end of the month in which an Offering terminates, the
Advisor shall reimburse the Company to the extent (i) Capped O&O Expenses borne
by the Company exceed the maximum amount permitted pursuant to the Prospectus
for the Offering and (ii) Organizational and Offering Expenses borne by the
Company exceed fifteen percent (15.0%) of the Gross Offering Proceeds raised in
a completed Offering;
(ii) Acquisition Expenses incurred in connection with the selection and
acquisition of Properties and Real Estate-Related Investments, whether or not
acquired, subject to the aggregate six percent (6.0%) cap on Acquisition Fees
and Acquisition Expenses set forth in Section 8(a) above;
(iii) the actual cost of goods and services used by the Company and obtained
from entities not Affiliated with the Advisor, other than Acquisition Expenses,
including brokerage fees paid in connection with the purchase and sale of Real
Estate-Related Investments;

 

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(iv) interest and other costs for borrowed money, including discounts, points
and other similar fees;
(v) taxes and assessments on income of the Company or any of the Properties;
(vi) costs associated with insurance required in connection with the business of
the Company or by the Board;
(vii) expenses of managing and operating Properties owned by the Company,
whether payable to an Affiliate of the Company or a non-Affiliated Person;
(viii) all compensation and expenses payable to the Independent Directors and
all expenses payable to the non-Independent Directors in connection with their
services to the Company and the Stockholders and their attendance at meetings of
the Directors and the Stockholders;
(ix) expenses associated with Listing or with the issuance and distribution of
securities other than the Shares, such as selling commissions and fees,
advertising expenses, taxes, legal and accounting fees, listing and registration
fees;
(x) expenses connected with payments of Distributions in cash or otherwise made
or caused to be made by the Company to the Stockholders;
(xi) expenses of organizing, redomesticating, merging, liquidating or dissolving
the Company or of amending the Articles of Incorporation or the Bylaws;
(xii) expenses of maintaining communications with Stockholders or their
financial advisors, including the cost of preparation, printing, and mailing
annual reports and other Stockholder reports, proxy statements and other reports
required by governmental entities;
(xiii) administrative service expenses (including (a) personnel costs; provided,
however, that no reimbursement shall be made for costs of personnel to the
extent that such personnel perform services in transactions for which the
Advisor receives a separate fee, and (b) the Company’s allocable share of other
overhead of the Advisor such as rent and utilities);
(xiv) transfer agent and registrar’s fees and charges;
(xv) expenses associated with the disposition of Properties, including, subject
to Section 8(c), real estate commissions;
(xvi) audit, accounting, legal and other professional fees; and
(xvii) all other administrative service expenses, including all costs and
expenses incurred by Advisor in fulfilling its duties hereunder. Such costs and
expenses may include reasonable wages and salaries and other employee-related
expenses of all employees of the Advisor or its Affiliates who are engaged in
the management, administration, operations, or marketing of the Company,
including taxes, insurance and benefits relating to such employees, and legal,
travel and other out-of-pocket expenses which are directly related to their
services provided hereunder.

 

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(b) Other Services. Should the Board request that the Advisor, any Affiliate of
the Advisor or any director, officer or employee thereof render services for the
Company and the Partnership other than set forth in Section 3, such additional
services, if the Advisor elects to perform them, shall be separately compensated
at such rates and in such amounts as are agreed by the Advisor and the Board,
including a majority of the Independent Directors, subject to the limitations
contained in the Articles of Incorporation, shall not exceed an amount that
would be paid to non-Affiliated third parties for similar services, and shall
not be deemed to be services pursuant to the terms of this Agreement.
(c) Timing of and Limitations on Reimbursements.
(i) Expenses incurred by the Advisor on behalf of the Company and the
Partnership and payable pursuant to this Section 9 shall be reimbursed at least
quarterly to the Advisor. The Advisor shall prepare a statement documenting the
expenses of the Company and the Partnership during each quarter, and shall
deliver such statement to the Company and the Partnership within forty-five
(45) days after the end of each quarter.
(ii) The Company shall not reimburse the Advisor at the end of any fiscal
quarter Operating Expenses that, in the four consecutive fiscal quarters then
ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of two 2.0%
of Average Invested Assets or 25.0% of Net Income (the “2.0%/25.0% Guidelines”)
for such year unless a majority of the Independent Directors determines that
such Excess Amount was justified, based on unusual and nonrecurring factors that
a majority of the Independent Directors deems sufficient. If a majority of the
Independent Directors does not approve such excess as being so justified, any
Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the
Company. If a majority of the Independent Directors determines such excess was
justified, then within sixty (60) days after the end of any fiscal quarter of
the Company for which total reimbursed Operating Expenses for the Expense Year
exceed the 2.0%/25.0% Guidelines, the Advisor, at the direction of a majority of
the Independent Directors, shall send to the Stockholders a written disclosure
of such fact, together with an explanation of the factors the Independent
Directors considered in determining that such excess expenses were justified.
The Company will ensure that such determination will be reflected in the minutes
of the meetings of the Board of Directors. All figures used in the foregoing
computation shall be determined in accordance with generally accepted accounting
principles in the United States of America, applied on a consistent basis. In
the event that the Independent Directors do not determine that excess expenses
were justified, the Advisor shall reimburse the Corporation the amount by which
the expense reimbursement exceeded the 2.0%/25.0% Guidelines.
(iii) The foregoing reimbursements of expenses, as limited by this Agreement,
will be made regardless of whether any cash distributions are made to the
Stockholders.
10. Statements. The Advisor shall furnish to the Company not later than the
thirtieth (30th) day following the end of each Fiscal Year, a statement showing
a computation of the fees or other compensation payable to the Advisor or an
Affiliate of the Advisor with respect to such Fiscal Year under Sections 8 and 9
hereof. The final settlement of compensation payable under Sections 8 and 9
hereof for each Fiscal Year shall be subject to adjustments in accordance with,
and upon completion of, the annual audit of the Company’s financial statements.
11. Internalization of the Advisor. To the extent that the Board of Directors
determines that it is in the best interests of the stockholders of the Company
to internalize (acquire from the Advisor) any management functions provided by
Advisor, the compensation payable to the Advisor for such specific
internalization shall be negotiated and agreed upon by the Independent Directors
and the Advisor.

 

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12. Other Activities of the Advisor. Nothing herein contained shall prevent the
Advisor from engaging in other activities, including, without limitation, the
rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Advisor or its
Affiliates; nor shall this Agreement limit or restrict the right of any
director, officer, employee, or stockholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other
partnership, corporation, firm, individual, trust or association. The Advisor
may, with respect to any investment in which the Company or the Partnership is a
participant, also render advice and service to each and every other participant
therein. The Advisor shall report to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor’s obligations to the
Company and the Partnership and its obligations to or its interest in any other
partnership, corporation, firm, individual, trust or association.
13. Non-Solicitation. The Company agrees not to solicit any current and/or
future employees of the Advisor or its Affiliates for employment or in any
consulting or similar capacity during the Offering Stage and for two (2) years
following the termination of the Offering Stage.
14. Information Furnished to the Advisor. The Board of Directors will keep the
Advisor informed concerning the investment and financing policies of the
Company. The Board of Directors shall notify the Advisor promptly of its
intention to make any investments or to sell or dispose of any existing
investments. The Board of Directors will timely notify the Advisor of any
activities or actions that would require a report or other filing be made with
the Securities and Exchange Commission or any other governmental or regulatory
authority. Upon request of the Advisor, the Company shall furnish the Advisor
with a certified copy of any Company financial statements, a signed copy of each
report prepared by independent certified public accountants, and such other
information with regard to its affairs as the Advisor may reasonably request.
15. Relationship of Advisor and Company. The Company, the Partnership and the
Advisor are not partners or joint venturers with each other, and nothing in this
Agreement shall be construed to make them such partners or joint venturers or
impose any liability as such on either of them.
16. Term. This Agreement shall continue in force until the first anniversary of
the Effective Date, subject to an unlimited number of successive one-year
renewals upon mutual consent of the parties. The Board will evaluate the
performance of the Advisor annually before renewing the Agreement.
17. Termination.
(a) This Agreement may be terminated upon sixty (60) days written notice without
cause or penalty, by either party (if by the Company, only upon approval of a
majority of the Independent Directors).
(b) Survival. The provisions of Sections 6, 7, 11, 13, and 19 through 32, and
the provisions of Section 8, shall survive expiration or termination of this
Agreement.

 

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18. Assignment. This Agreement shall not be assigned by the Advisor to a
non-Affiliate. This Agreement may be assigned by the Advisor to an Affiliate
with the approval of the Board, including a majority of the Independent
Directors. Notwithstanding the foregoing, the Advisor may assign any rights to
receive fees or other payments under this Agreement without obtaining the
approval of the Board. This Agreement shall not be assigned by the Company or
the Partnership without the consent of the Advisor, except in the case of an
assignment by the Company or the Partnership to a corporation or other
organization which is a successor to all of the assets, rights and obligations
of the Company or the Partnership, as the case may be, in which case such
successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as the Company and the Partnership is bound by
this Agreement.
19. Payments to and Duties of Advisor Upon Termination. Payments to the Advisor
pursuant to this Section 19 shall be subject to the 2.0%/25.0% Guidelines to the
extent applicable.
(a) After the expiration or termination of this Agreement, the Advisor shall not
be entitled to compensation for further services hereunder except that it shall
be entitled to the Acquisition Fee to the extent provided by Section 8(a) and it
shall be entitled to receive from the Company within thirty (30) days after the
effective date of such termination all unpaid reimbursements of expenses and all
earned but unpaid fees payable to the Advisor prior to termination of this
Agreement; and
(b) The Advisor shall promptly upon termination:
(i) pay over to the Company all money collected and held for the account of the
Company pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;
(ii) deliver to the Board a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board;
(iii) deliver to the Board all assets, including Properties and Real
Estate-Related Investments, and documents of the Company then in the custody of
the Advisor; and
(iv) cooperate with the Company to provide an orderly management transition.
20. Indemnification by the Company.
(a) The Company shall indemnify and hold harmless the Advisor and its
Affiliates, including their respective officers, directors, partners and
employees, from all liability, claims, damages or losses arising in the
performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or
losses and related expenses are not fully reimbursed by insurance, provided that
the Company shall not indemnify and hold harmless the Advisor or its Affiliates
unless:
(i) the Advisor or its Affiliates have determined, in good faith, that the
course of conduct which caused the loss or liability was in the best interests
of the Company;
(ii) the Advisor or its Affiliates were acting on behalf of or performing
services for the Company;

 

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(iii) such liability or loss was not the result of negligence or misconduct by
the Advisor or its Affiliates; and
(iv) such indemnification or agreement to hold harmless is recoverable only out
of Company’s net assets and not from its stockholders.
The obligation of the Company to indemnify or hold harmless the Advisor and its
Affiliates shall also be subject to any limitations imposed by Maryland law.
21. Indemnification by Advisor. The Advisor shall indemnify and hold harmless
the Company from contract or other liability, claims, damages, taxes or losses
and related expenses, including attorneys’ fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, willful misfeasance, misconduct, or reckless disregard of its duties, but
the Advisor shall not be held responsible for any action of the Board in
following or declining to follow advice or recommendation given by the Advisor.
22. Fidelity Bond. The Advisor shall not be required to obtain or maintain a
fidelity bond in connection with the performance of its services hereunder.
23. Notices. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing unless some other method of giving such
notice, report or other communication is required by the Articles of
Incorporation, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:

     
To the Board and to the Company:
  Grubb & Ellis Healthcare REIT II, Inc.
 
  1551 N. Tustin Avenue, Suite 300
 
  Santa Ana, CA 92705
 
  Attention: Chief Executive Officer
 
   
To the Partnership:
  Grubb & Ellis Healthcare REIT II Holdings, LP
 
  1551 N. Tustin Avenue, Suite 300
 
  Santa Ana, CA 92705
 
  Attention: Chief Executive Officer of
 
  Grubb & Ellis Healthcare REIT II, Inc.,
 
  its General Partner
 
   
To the Advisor:
  Grubb & Ellis Healthcare REIT II Advisor, LLC
 
  1551 N. Tustin Avenue, Suite 300
 
  Santa Ana, CA 92705
 
  Attention: Chief Executive Officer

Either party may at any time give notice in writing to the other party of a
change in its address for the purposes of this Section 23.
24. Amendments. This Agreement shall not be changed, modified, terminated, or
discharged, in whole or in part, except by an instrument in writing signed by
each of the parties hereto, or their respective successors or assignees.
25. Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

 

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26. Construction. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Maryland.
27. Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
28. Indulgences, Not Waiver. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.
29. Gender. Words used herein regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires.
30. Titles Not to Affect Interpretation. The titles of sections and subsections
contained in this Agreement are for convenience only, and they neither form a
part of this Agreement nor are they to be used in the construction or
interpretation hereof.
31. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
the counterparts hereof, taken together, bear the signatures of all of the
parties reflected hereon as the signatories.
32. Rights of the Advisor and its Affiliates. Grubb & Ellis Healthcare REIT II
Advisor, LLC or an Affiliate thereof has a proprietary interest in the name
“Grubb & Ellis.” Accordingly, and in recognition of this right, if at any time
Grubb & Ellis Healthcare REIT II Advisor, LLC or an Affiliate thereof ceases to
perform the services of the Advisor under this Agreement, the Company or the
Partnership, as the case may be, will, promptly after receipt of written request
from Grubb & Ellis Healthcare REIT II Advisor, LLC, cease to conduct business
under or use the name “Grubb & Ellis” or any variation or derivative thereof and
the Company and the Partnership shall, within five (5) business days of such
cessation, each change its name (and the names of any of their Affiliates) to a
name that does not contain the name “Grubb & Ellis” or any other word or words
that might, in the sole discretion of the Advisor, be susceptible of indication
of some form of relationship between the Company and the Advisor or any
Affiliate thereof. Consistent with the foregoing, the parties acknowledge and
agree that the Advisor or one or more of its Affiliates has in the past and may
in the future organize, sponsor or otherwise permit to exist other investment
vehicles (including vehicles for investment in real estate) and financial and
service organizations having “Grubb & Ellis” as a part of their name, all
without the need for any consent (and without the right to object thereto) by
the Company or its Board. The Advisor retains ownership of and reserves all
Intellectual Property Rights in the Proprietary Property. To the extent that the
Company has or obtains any claim to any right, title or interest in the
Proprietary Property, including without limitation in any suggestions,
enhancements or contributions that Company may provide regarding the Proprietary
Property, the Company hereby assigns and transfers exclusively to the Advisor
all right, title and interest, including without limitation all Intellectual
Property Rights, free and clear of any liens, encumbrances or licenses in favor
of the Company or any other party, in and to the Proprietary Property. In
addition, at the Advisor’s expense, the Company will perform any acts that may
be deemed desirable by the Advisor to evidence more fully the transfer of
ownership of right, title and interest in the Proprietary Property to the
Advisor, including but not limited to the execution of any instruments or
documents now or hereafter requested by the Advisor to perfect, defend or
confirm the assignment described herein, in a form determined by the Advisor.
[Signatures Appear on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Advisory Agreement as
of the day and year first above written.

            GRUBB & ELLIS HEALTHCARE REIT II, INC.
      By:   /s/ Jeffrey T. Hanson         Name:   Jeffrey T. Hanson        
Title:   Chief Executive Officer     
GRUBB & ELLIS HEALTHCARE REIT II HOLDINGS, LP       By:   Grubb & Ellis
Healthcare REIT II, Inc.,       its General Partner            By:   /s/ Jeffrey
T. Hanson         Name:   Jeffrey T. Hanson        Title:   Chief Executive
Officer     
GRUBB & ELLIS HEALTHCARE REIT II ADVISOR, LLC
      By:   /s/ Jeffrey T. Hanson         Name:   Jeffrey T. Hanson       
Title:   Chief Executive Officer   

 

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