EX-10.1






LIMITED LIABILITY COMPANY AGREEMENT OF




G&E HEALTHCARE REIT/DUKE CHESTERFIELD REHAB, LLC




1




TABLE OF CONTENTS




Page No.




	 	 	 	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS	 	 	 	 	 	5
	Section 1.1
	 	Definitions	 	 	5	 
	ARTICLE 2 ORGANIZATIONAL MATTERS; PURPOSE; TERM
	 	 	13	 
	Section 2.1
	 	Formation of Company	 	 	13	 
	Section 2.2
	 	Name	 	 	13	 
	Section 2.3
	 	Registered Office; Registered Agent; Principal Office	 	 	14	 
	Section 2.4
	 	Foreign Qualification	 	 	14	 
	Section 2.5
	 	Purpose and Scope	 	 	14	 
	Section 2.6
	 	Term	 	 	14	 
	Section 2.7
	 	No State Law Partnership	 	 	14	 
	Section 2.8
	 	Warranties, Representations and Covenants – of all Members.	 	 	14	 
	Section 2.9
	 	Representations and Warranties of Holdings.	 	 	15	 
	Section 2.10
	 	Representations and Warranties of Duke.	 	 	16	 
	Section 2.11
	 	Project LLC.	 	 	16	 
	ARTICLE 3 MEMBERSHIP; DISPOSITIONS OF INTERESTS
	 	 	16	 
	Section 3.1
	 	Members	 	 	16	 
	Section 3.2
	 	Dispositions of Membership Interests.	 	 	16	 
	Section 3.3
	 	Creation of Additional Membership Interests	 	 	18	 
	Section 3.4
	 	Resignation	 	 	18	 
	Section 3.5
	 	Information	 	 	18	 
	Section 3.6
	 	Liability to Third Parties	 	 	18	 
	Section 3.7
	 	Withholding	 	 	18	 
	ARTICLE 4 MANAGEMENT OF COMPANY
	 	 	19	 
	Section 4.1
	 	Executive Committee.	 	 	19	 
	Section 4.2
	 	Management of the Company.	 	 	22	 
	Section 4.3
	 	Operating Budgets	 	 	25	 
	Section 4.4
	 	Officers and Authorized Signatories	 	 	25	 
	Section 4.5
	 	Removal of Manager	 	 	25	 
	Section 4.6
	 	Reimbursement of Expenses	 	 	25	 
	Section 4.7
	 	Compensation of Manager and Members	 	 	25	 
	Section 4.8
	 	Transactions with Affiliates.	 	 	26	 
	Section 4.9
	 	Property Management.	 	 	26	 
	Section 4.10
	 	Indemnification; Reimbursement of Expenses; Insurance	 	 	26	 
	Section 4.11
	 	Conflicts of Interest	 	 	27	 
	Section 4.12
	 	Governmental Requirements	 	 	27	 
	ARTICLE 5 ACCOUNTING AND REPORTING
	 	 	27	 
	Section 5.1
	 	Fiscal Year, Accounts, Reports.	 	 	27	 
	Section 5.2
	 	Bank Accounts	 	 	28	 
	ARTICLE 6 CAPITAL CONTRIBUTIONS
	 	 	28	 
	Section 6.1
	 	Initial Capital Contributions	 	 	28	 
	Section 6.2
	 	Required Additional Capital Contributions	 	 	28	 
	Section 6.3
	 	Assignment by Duke	 	 	28	 
	Section 6.4
	 	Additional Capital Contributions - Calls by Members	 	 	29	 
	Section 6.5
	 	Notice of Additional Capital Contributions	 	 	29	 
	Section 6.6
	 	Additional Capital Contributions and Member Loans	 	 	30	 
	Section 6.7
	 	Return of Contributions	 	 	30	 
	Section 6.8
	 	Member Loans	 	 	30	 
	Section 6.9
	 	Balances	 	 	31	 
	Section 6.10
	 	No Third-Party Rights	 	 	31	 
	Section 6.11
	 	Member Loans for Guaranty Payments	 	 	31	 
	ARTICLE 7 FINANCING
	 	 	 	 	 	 	31	 
	Section 7.1
	 	Project Financing	 	 	31	 
	ARTICLE 8 DISTRIBUTIONS
	 	 	 	 	 	 	31	 
	Section 8.1
	 	Distributions in General	 	 	31	 
	Section 8.2
	 	Distribution of Net Cash Flow	 	 	31	 
	Section 8.3
	 	Distribution of Capital Proceeds	 	 	32	 
	ARTICLE 9 CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS
	 	 	32	 
	Section 9.1
	 	[Intentionally Omitted]	 	 	32	 
	Section 9.2
	 	Capital Accounts.	 	 	32	 
	Section 9.3
	 	Adjustment of Gross Asset Value	 	 	33	 
	Section 9.4
	 	Profits, Losses and Distributive Shares of Tax Items.	 	 	34	 
	Section 9.5
	 	Tax Returns	 	 	36	 
	Section 9.6
	 	Tax Elections	 	 	36	 
	Section 9.7
	 	Tax Matters Member	 	 	37	 
	Section 9.8
	 	Allocations on Transfer of Interests	 	 	37	 
	Section 9.9
	 	Restrictions on Company Activities.
	 	 	37	 







ARTICLE 10 WITHDRAWAL, DISSOLUTION, LIQUIDATION, AND TERMINATION 39



	 	 	 	 	 	 	 	 	 
	Section 10.1
	 	Dissolution, Liquidation, and Termination Generally	 	 	39	 
	Section 10.2
	 	Liquidation and Termination	 	 	39	 
	Section 10.3
	 	Deficit Capital Accounts	 	 	40	 
	Section 10.4
	 	Cancellation of Certificate	 	 	40	 
	ARTICLE 11 MISCELLANEOUS PROVISIONS
	 	 	40	 
	Section 11.1
	 	Notices	 	 	40	 
	Section 11.2
	 	Governing Law	 	 	41	 
	Section 11.3
	 	Entireties; Amendments	 	 	41	 
	Section 11.4
	 	Waiver	 	 	42	 
	Section 11.5
	 	Severability	 	 	42	 
	Section 11.6
	 	Ownership of Property and Right of Partition	 	 	42	 
	Section 11.7
	 	Captions, References	 	 	42	 
	Section 11.8
	 	Involvement of Members in Certain Proceedings	 	 	42	 
	Section 11.9
	 	Interest	 	 	42	 
	Section 11.10
	 	Estoppels.	 	 	43	 







ARTICLE 12 Call Rights 43



	 	 	 	 	 	 	 	 	 
	Section 12.1
	 	Holdings Call Rights	 	 	43	 
	Section 12.2
	 	Closing	 	 	43	 
	Section 12.3
	 	Remedies	 	 	44	 







ARTICLE 13 Put Rights 44



	 	 	 	 	 	 	 	 	 
	Section 13.1Duke Put Rights
	 	 	44	 
	Section 13.2Closing
	 	 	45	 
	Section 13.3Remedies
	 	 	45	 
	Section 13.4Fair Market Value
	 	 	45	 
	EXHIBITS/SCHEDULES:
	 	 	 	 
	Exhibit A
	 	Initial Capital Contribution Balances	 	 	 	 
	Exhibit B
	 	Contribution Agreement	 	 	 	 
	Exhibit C
	 	Property Management Agreement	 	 	 	 
	Exhibit D
	 	Representation Letter	 	 	 	 






2




LIMITED LIABILITY COMPANY AGREEMENT OF




G&E HEALTHCARE REIT/DUKE CHESTERFIELD REHAB, LLC




THIS LIMITED LIABILITY COMPANY AGREEMENT OF G&E HEALTHCARE REIT/DUKE CHESTERFIELD REHAB, LLC
(this “Agreement”) is entered into as of December 19, 2007, between BD ST. LOUIS
DEVELOPMENT, LLC, an Indiana limited liability company, as a Member (“Duke”), and GRUBB &
ELLIS HEALTHCARE REIT HOLDINGS, L.P., a Delaware limited partnership, as a Member (“Holdings”).



W I T N E S S E T H:




WHEREAS, Duke and Holdings formed the Company under the Act and desire to enter into this
Agreement to govern the operations of the Company and to set forth their respective rights, duties
and responsibilities with respect to the Company.



NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00), the mutual promises,
obligations and agreements contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:



ARTICLE 1




DEFINITIONS




Section 1.1 Definitions. As used in this Agreement, the following terms shall have
the following meanings:



“1933 Act” is defined in Section 2.8.



“Act” means the Delaware Limited Liability Company Act (6 Del.C. §18-101 et seq.), as
it may be amended from time to time.



“Additional Capital Contribution” means, any additional contribution of a Member to
the capital of the Company, including, without limitation, those made pursuant to Sections 6.3 or
6.4.



“Adjusted Capital Account” means, with respect to a Member, such Member’s Capital
Account as of the end of each fiscal year, as the same is specially computed to reflect the
adjustments required or permitted to be taken into account in applying Regulations Section
1.704-1(b)(2)(ii)(d) (including adjustments for Company Minimum Gain and Member Nonrecourse Debt
Minimum Gain).



“Adjusted Capital Account Deficit” means, for each Member, the deficit balance, if
any, in that Member’s Adjusted Capital Account.



“Affiliate” means, with respect to a Person, another Person, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common control with the
Person in question. The term “control” as used in the preceding sentence means, with
respect to a Person that is a corporation, the right to exercise, directly or indirectly, more than
50% of the voting rights attributable to the shares of the controlled corporation, and, with
respect to a Person that is not a corporation, the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of the controlled Person.



“Agreement” means this Limited Liability Company Agreement of G&E Healthcare REIT/Duke
Chesterfield Rehab, LLC.



“Auditor” means Deloitte Touche LLP or another independent firm of certified public
accountants selected by the Manager.



“Bankruptcy” means, with respect to a Person, the occurrence of (1) a general
assignment by the Person for the benefit of creditors; (2) the filing by the Person of a voluntary
petition in bankruptcy; (3) the entry of a judgment by any court that the Person is bankrupt or
insolvent, or the entry against the Person of an order for relief in any bankruptcy or insolvency
proceeding, but only if such order, judgment or decree continues unstayed and in effect for a
period of sixty (60) consecutive days; (4) the filing of a petition or answer by the Person seeking
for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation; (5) the filing by the Person of an answer or
other pleading admitting or failing to contest the material allegations of a petition filed against
it in any proceeding for reorganization or of a similar nature; (6) the appointment of a trustee,
receiver or liquidator of the Person or of all or any substantial part of its properties, which is
not dismissed within sixty (60) days thereafter; or (7) the entry against a Member of any “order
for relief” or of any other judgment or decree by any court of competent jurisdiction in any
involuntary proceeding against a Member under present or future Federal bankruptcy laws or under
any other state or local bankruptcy, insolvency or other laws respecting debtor’s rights, but only
if such order, judgment or decree continues unstayed and in effect for a period of sixty (60)
consecutive days.



“Business Day” means any day other than Saturday, Sunday, or other day on which
commercial banks in Indiana are authorized or required to close under the laws of the State of
Indiana.




“Call’ is defined in Section 12.1.




“Call Notice” is defined in Section 12.1.




“Call Period” is defined in Section 12.1.




“Call Purchase Price” is defined in Section 12.1.



“Capital Account” shall have the meaning set forth in Section 9.2.



“Capital Contribution” means, with respect to each Member, the amount of cash and the
initial Gross Asset Value, as agreed by the Members, of any property (net of liabilities assumed by
the Company resulting from such contribution and liabilities to which the property is subject)
contributed to the Company by that Member.



“Capital Contribution Balance” means, for each Member, the total Capital Contributions
of that Member, less the cumulative distributions by the Company to that Member in return thereof
pursuant to Sections 6.2, 6.3 and 8.3(a).



“Capital Proceeds” means funds of the Company arising from a Capital Transaction, net
of (i) the actual costs incurred by the Company in consummating the Capital Transaction, (ii) the
amount of such proceeds or awards that are applied to mortgage or other indebtedness of the Company
or used to repair damage caused by a casualty or taking and (iii) reserves reasonably approved by
the Manager.



“Capital Transaction” means the sale, financing, refinancing or similar transaction of
or involving the Property (including, without limitation, transactions which generate condemnation
awards, payment of title insurance proceeds or casualty loss insurance proceeds other than business
interruption or rental loss insurance proceeds). Neither Duke’s exercise of the Put Option nor
Holdings’ exercise of the Call Option shall be considered to trigger a Capital Transaction.



“Certificate” is defined in Section 2.1.



“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
corresponding provisions of succeeding law.



“Company” means G&E Healthcare REIT/Duke Chesterfield Rehab, LLC, a Delaware limited
liability company.



“Company Minimum Gain” has the same meaning as “partnership minimum gain” as set forth
in Regulations Section 1.704-2(b)(2) and 1.704-2(d).



“Contributing Member” is defined in Section 6.5.



“Contribution Agreement” means the Contribution Agreement between the Members dated
December      , 2007.



“Depreciation” means, for each taxable year or other period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with respect to an asset for
the year or other period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of the year or other period,
Depreciation will be an amount which bears the same ratio to the beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction for the year or
other period bears to the beginning adjusted tax basis, provided that if the federal income tax
depreciation, amortization, or other cost recovery deduction for the year or other period is zero,
Depreciation will be determined with reference to the beginning Gross Asset Value using any
reasonable method selected by the Manager.




“Duke” means BD ST. Louis Development, LLC, an Indiana limited liability company.




“Duke Interest” is defined in Section 12.1.




“Duke Guaranty” is defined in Section 7.1.



“Encumbrance” is defined in Section 3.2.



“Executive Committee” means the Company’s management committee established in
accordance with Section 4.1.




“Fair Market Value” means the fair market value of the Property as determined
pursuant to the appraisal process set forth in Section 13.4.



“Governmental Authority” means the United States of America, any of the several
states, any county or municipality in which the Project is located, and any agency, authority,
court, department, commission, board, bureau or instrumentality of any of them.



“Governmental Requirements” means, collectively, all laws, statutes, ordinances,
regulations, tariffs, judicial or administrative orders, and procedural requirements imposed by any
political subdivision, any agency thereof, any regulated public utility company, or other
Governmental Authority regulating or affecting the acquisition, ownership, or development of the
Property, or the construction, leasing, or operation of the Project or a Member, as applicable.



“Gross Asset Value” is defined in Section 9.3.




“Gross Asset Value of the Property” is defined in Section 6.3.




“Guaranty Payment” is defined in Section 6.11.




“Guaranty Payment Member Loan” is defined in Section 6.11.



“Holdings” means Grubb & Ellis Healthcare REIT Holdings, L.P., a Delaware limited
partnership.




“Holdings Guaranty” is defined in Section 7.1.



“Imputed Closing Costs” means an amount, (not to exceed 1% of the purchase price),
that would normally be incurred by the Company if the Project were sold for an amount specified in
Article 13, for title insurance premiums, survey costs, brokerage commissions and other
commercially reasonable closing costs.




“Initial Capital Contributions” is defined in Section 6.1.



“Internal Rate of Return” or “IRR” shall mean that interest rate which, when used as a
discount rate, causes (i) the net present value as of the date of this Agreement of the specified
distributions made to a Member through the computation date, to equal (ii) the net present value as
of the date of this Agreement of (x) the Capital Contributions made by a Member through the
computation date less (y) distributions made to a Member pursuant to Section 6.2 and Section 6.3.
For purposes of this definition, (i) net present value shall be determined using monthly
compounding periods; and (ii) any contribution or distribution during a year shall be deemed to
occur on the date such contribution or distribution is made.



“Lease” means that certain St. John’s Mercy Rehabilitation Hospital Lease
Agreement dated May 1, 2006 by and between Duke and Tenant, as amended by Commencement Agreement
dated December 12, 2007 between Duke and Tenant, the interest of Duke thereunder having been
assigned to the Company on or about the date hereof.



“Major Decisions” is defined in Section 4.1(b).



“Manager” initially means Holdings and shall also include each Person who is a Member
hereafter designated as a Manager in accordance with this Agreement, until such Person ceases to be
a Manager of the Company.



“Manager Authorized Signatories” is defined in Section 4.4(b).



“Member Loan” is defined in Section 6.6.



“Member Nonrecourse Debt” has the same meaning as “partner nonrecourse debt” in
Regulations Section 1.704-2(b)(4).



“Member Nonrecourse Debt Minimum Gain” has the same meaning as “partner nonrecourse
debt minimum gain” in Regulations Section 1.704-2(i)(3).



“Member Nonrecourse Deductions” has the same meaning as “partner nonrecourse
deductions” in Regulations Section 1.704-2(i)(2).



“Members” means Holdings, Duke, and each Person hereafter admitted as a Member in
accordance with this Agreement, until such Person ceases to be a Member of the Company.



“Membership Interests” means all of the rights and interests of whatsoever nature of
the Members in the Company, including without limitation the right to participate in management to
the extent herein expressly provided, to receive distributions of funds, and to receive allocations
of income, gain, loss, deduction, and credit.



“Net Cash Flow” means Net Operating Income less debt service on loans to the Company.



“Net Operating Income” means, for any period, the amount by which Operating Revenues
exceed Operating Expenses for such period.



"Non-Contributing Member” has the meaning set forth in Section 6.5 hereof.



“Operating Budget” means the annual budget, prepared by the Manager setting forth the
estimated capital requirements and operating revenues and expenses of the Company for the then
current or immediately succeeding calendar year and for each month and each calendar quarter of
such calendar year.



“Operating Expenses” means, for any period, the current obligations of the Company for
such period, determined in accordance with generally accepted accounting principles and applicable
to commercial real estate, consistently applied, for operating expenses of the Property and the
Project and for capital expenditures not paid from Capital Proceeds or the Members’ Capital
Contributions to the Company and for reserves as reasonably determined by the Manager. Operating
Expenses shall not include debt service on loans to the Company, nor any non-cash expenses such as
depreciation or amortization.



“Operating Revenues” means, for any period, the gross revenues of the Company arising
from the conduct of the business of the Company from what ever source, including, without
limitation, ownership of the Property and operation of the Project during such period, including
proceeds of any business interruption insurance and amounts funded from Company reserves, but
specifically excluding Capital Proceeds and Capital Contributions.



“Partially Adjusted Capital Account” means, with respect to each Member and any fiscal
year, the Capital Account of such Member at the beginning of such fiscal year, adjusted as set
forth in the definition of Capital Accounts for all contributions and distributions during such
year and all special allocations pursuant to Sections 9.4(c) and 9.4(d) hereof with respect to such
fiscal year, but before giving any effect to the allocation of Profit or Loss for such fiscal year
pursuant to Sections 9.4(a) and 9.4(b).



“Person” means an individual or entity.



“Prime Rate” means, on any particular date, the interest rate which JP Morgan Chase,
or any successor publicly announces as its “prime rate” as of the close of business on such date;
provided, however, that in the event that such interest rate, as announced by JP
Morgan Chase or its successor, is discontinued or becomes unascertainable, the Members shall select
and substitute an appropriate national banking association which publicly announces a “prime rate”
of interest, and the term “Prime Rate,” as used in this Agreement, shall thereafter be deemed to
refer to such interest rate as announced by such national banking association as its “prime rate”
until such time as such interest rate as announced by JP Morgan Chase or its successor once again
becomes ascertainable.




“Proceeding” is defined in Section 4.10.



“Profits” and “Losses” mean, for each taxable year or other period, an amount
equal to the Company’s taxable income or loss for the year or other period, determined in
accordance with Section 703(a) of the Code (including all items of income, gain, loss or deduction
required to be stated separately under Section 703(a)(1) of the Code), with the following
adjustments:




1. Any income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses will be added to taxable income or loss;




2. Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as
Section 705(a)(2)(B) expenditures under Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses, will be subtracted from taxable
income or loss;




3. Gain or loss resulting from any disposition of Company property with respect to
which gain or loss is recognized for federal income tax purposes will be computed by
reference to the Gross Asset Value of the property, notwithstanding that the adjusted tax
basis of the property differs from its Gross Asset Value;




4. In lieu of depreciation, amortization and other cost recovery deductions taken into
account in computing taxable income or loss, there will be taken into account Depreciation
for the taxable year or other period;




5. Any items which are specially allocated under 9.4(c) or 9.4(d) will not be included
in Profits or Losses; and



If the Gross Asset Value of any Company asset is adjusted under Section 9.3(b) or Section
9.3(c) the adjustment will be taken into account as gain or loss from disposition of the asset for
purposes of computing Profits or Losses.



“Project” means and refers to an approximately 112,000 square foot rehabilitation
hospital and related parking facilities located on the Property.



"Project LLC” means G&E HEALTHCARE REIT CHESTERFIELD REHAB HOSPITAL, LLC, a Delaware
limited liability company, the sole member which is the Company, through which Project LLC the
Company intends to hold title to the Property and own and operate a Project.



"Project LLC Agreement” means the limited liability company agreement of the Project
LLC date on the date hereof.



“Project Loan” means that certain loan closed on or about the date hereof in the
original principal amount of $22,00,000.00 from National City Bank to the Company evidenced and
secured by the Project Loan Documents.



“Project Loan Documents” means the loan documents evidencing and securing the Project
Loan.



“Property” means approximately 7.115 acres of real property located at 14561 N. Outer
Forty Road and 14754 Conway Road, Chesterfield, Missouri and the Project located thereon, which has
been contributed to the Company by Duke on or about the date hereof.



“Property Manager” means Triple Net Properties Realty, Inc., a California corporation
and an Affiliate of Holdings.



“Property Management Agreement” means the property management agreement in a form
substantially the same as that attached here as Exhibit C and made a part hereof.




“Put’ is defined in Section 13.1.




“Put Closing Date” is defined in Section 13.2.




“Put Notice” is defined in Section 13.1.




“Put Period” is defined in Section 13.1.




“Put Purchase Price” is defined in Section 13.1.



“Registered Company” is defined in Section 3.2(b)(1).




“REIT” means a real estate investment trust as that term is defined under the Code.




“Regulations” means the regulations promulgated by the United States Department of
the Treasury pursuant to and in respect of provisions of the Code. All references herein to
sections of the Regulations shall include any corresponding provisions of succeeding, similar,
substitute, temporary, proposed or final Regulations.




“Regulatory Allocations” is defined in Section 9.4(d).



“Removal Event” means, for the purposes of Section 4.5 and the potential removal of a
Member from its position as Manager (but not as a Member of the Company), (a) a Member’s withdrawal
or retirement from the Company or the disposition (whether voluntary or by operation of law) by a
Member of all or any part of such Member’s Membership Interest in the Company in breach of the
covenant contained in Article 3 hereof, or any other breach of Article 3 hereof, (b) any fraud,
gross negligence or willful misconduct concerning a Member in the performance of its obligations
under this Agreement, (c) a Member has become a Non-Contributing Member, subject to the cure
periods provided in Section 6.5, or, (d) an act of Bankruptcy by a Member.



“Rent” means the annual Base Rent (as that term is defined in the Lease) payable by
the Tenant under the Lease.



“Rent for the First Lease Year” means the Rent payable by the lessee under the Lease
for the First Lease Year (as that term is defined in the Lease and as described in Section
2(b)(iii)(A) of the Lease).



“Representatives” The members or alternate members of the Executive Committee
representing a Member.



“Sharing Ratios” shall, unless and until changed pursuant to this Agreement, be as
follows:



	 	 	 	 	 
	Duke
	 	 	20	%
	Holdings
	 	 	80	%






“State Acts” is defined in Section 2.8.



“Target Capital Account” means, with respect to any Member and any fiscal year, an
amount (which may be either positive or negative) equal to the hypothetical distribution such
Member would receive pursuant to the following sentence, minus the Member’s share of Company
Minimum Gain determined pursuant to Regulations Section 1.704-2(g) and minus the Member’s share of
Member Nonrecourse Debt Minimum Gain determined in accordance with Regulations Section
1.704-2(i)(5), all computed immediately prior to the hypothetical sale in the following sentence.
The hypothetical distribution to a Member is equal to the amount that would be received by such
member if all Company assets were sold for cash equal to their Gross Asset Values, all Company
liabilities were satisfied to the extent required by their terms (limited, with respect to each
Company Nonrecourse Debt or Member Nonrecourse Debt to the Gross Asset Value of the assets securing
each such liability), and the net assets of the Company were distributed in full to the Members
pursuant to Section 8.3 hereof, all as of the last day of such year.



“Tenant” means St. John’s Mercy Rehabilitation, LLC, a Missouri limited liability
company.



“Transfer” is defined in Section 3.2.



ARTICLE 2




ORGANIZATIONAL MATTERS; PURPOSE; TERM





Section 2.1 Formation of Company.



The Company has been organized as a Delaware limited liability company by filing a certificate
of formation (the “Certificate”) under the Act.




Section 2.2 Name.



The name of the Company shall be G&E HEALTHCARE REIT/DUKE CHESTERFIELD REHAB, LLC, and all
Company business must be conducted in that name or such other name as the Manager shall approve.




Section 2.3 Registered Office; Registered Agent; Principal Office.



The agent of the Company shall be The Corporation Trust Company or, following any removal, any
successor approved by the Executive Committee. The registered office of the Company is located at
Corporation Trust Center 1209 Orange Street, City of Wilmington, County of New Castle, Delaware
19801. The principal office of the Company shall be at c/o Triple Net Properties, Inc., 1551 North
Tustin Avenue, Suite 300, Santa Ana, California 92705, or at such other location as the Manager
shall approve.




Section 2.4 Foreign Qualification.



Before the Company conducts business in any jurisdiction other than Delaware, the Manager
shall cause the Company to comply with all requirements necessary to qualify the Company as a
foreign limited liability company in that jurisdiction. At the request of the Manager, each Member
shall execute, acknowledge, swear to, and deliver all certificates and other instruments conforming
with this Agreement that are necessary or appropriate to qualify, continue, or terminate the
Company as a foreign limited liability company in all jurisdictions in which the Company may
conduct business.




Section 2.5 Purpose and Scope.



The purposes and scope of the Company’s activities are strictly limited to acquiring the
Property, with a view to the future sale and/or other disposition, and the owning, maintaining,
leasing and selling of the Project on the Property; financing the foregoing activities; and
performing all other activities reasonably necessary or incidental to the furtherance of such
purposes, acting directly or indirectly through the Project LLC.




Section 2.6 Term.



The Company shall commence on the effective date of the Certificate and shall have perpetual
existence, unless sooner dissolved as herein provided.




Section 2.7 No State Law Partnership.



The Company shall not be a partnership or joint venture under any state or federal law, and no
Member or Manager shall be a partner or joint venturer of any other Member or Manager for any
purposes, other than under the Code and other applicable tax laws, and this Agreement may not be
construed otherwise.



Section 2.8 Warranties, Representations and Covenants – of all Members. Each Member
represents and warrants as to the following:




(a) That it understands that the Company will not register the issuance of the Membership
Interests under the federal Securities Act of 1933, as amended (the "1933 Act"), or any
state securities laws (the “State Acts”) in reliance upon exemptions from registration
contained in the 1933 Act and the State Acts, and that the Company relies upon these exemptions,
in part, because of the Member’s representations, warranties, and agreements contained in this
Agreement.




(b) That such Member is acquiring its Membership Interest for its own purpose, with the
intention of holding the Membership Interest for investment and with no present intention of
dividing or allowing others to participate in this investment or of reselling or otherwise
participating, directly or indirectly, in a distribution of the Membership Interest; and it will
not make any sale, transfer, or other disposition of the Membership Interest without registration
under the 1933 Act and the State Acts unless an exemption from registration is available under the
1933 Act and the State Acts.




(c) That the Member is familiar with the business in which the Company is or will be engaged,
and based upon its knowledge and experience in financial and business matters, it is familiar with
the investments of the type that it is undertaking to purchase; it is fully aware of the problems
and risks involved in making an investment of this type; and it is capable of evaluating the
merits and risks of this investment. The Member acknowledges that, prior to executing this
Agreement, it has had the opportunity to ask questions of and receive answers or obtain additional
information from a representative of the Company concerning the financial and other affairs of the
Company, and, to the extent it believes necessary in light of its knowledge of the Company’s
affairs, it has asked these questions and received satisfactory answers.




(d) That the investment that the Member is undertaking corresponds with the nature and size
of its present investments and net worth, and the Member can financially bear the economic risk of
this investment, including the ability to afford holding the Membership Interest for an indefinite
period or to afford a complete loss of this investment.




(e) That the Member has taken and shall continue to take all steps and implemented all
policies which are necessary to ensure that such Member is in compliance with all Governmental
Requirements applicable to such Member and its business, including, without limitation, those
Governmental Requirements relating to the prevention of money laundering and anti-terrorism,
including as they relate to the source of funds to such Member, any direct or indirect interest
holders in such Member or the Company and to the operations of such Member, any direct or indirect
interest holders in such Member or the Company.



Section 2.9 Representations and Warranties of Holdings. Holdings hereby represents
and warrants to Duke and the Company that:




(a) Holdings is a duly formed and validly existing limited partnership in good standing under
the laws of the State of Delaware and all other states in which Holdings is required to so qualify
in order to legally perform its obligations hereunder, and has the requisite power and authority
to enter into and carry out the terms of this Agreement;




(b) all action required to be taken by Holdings to consummate this Agreement has been taken
by Holdings and no further approval of any board, court or other body is necessary in order to
permit Holdings to consummate this Agreement;




(c) neither the execution and delivery of, nor the performance of, nor the compliance with,
this Agreement has resulted (or will result) in any violation of, be in conflict with, invalidate,
cancel or make inoperative, interfere with, or constitute a default under, any charter, bylaw,
venture agreement, partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, agreement, permit, judgment, decree or order to which Holdings is a party or by which
Holdings is bound, and there is no default and no event or omission has occurred which, but for
the passing of time or the giving of notice, or both, would constitute a default on the part of
Holdings under this Agreement;




(d) there is no action, proceeding or investigation pending or, to Holdings’ actual
knowledge, threatened (nor any basis therefor) which questions, directly or indirectly, the
validity or enforceability of this Agreement as to Holdings; and




(e) this Agreement has been duly executed by Holdings and constitutes the valid and binding
agreement of Holdings, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by laws affecting the rights and remedies of creditors generally and
equitable principles of general application.



Section 2.10 Representations and Warranties of Duke. Duke hereby represents and
warrants to Holdings and the Company that:




(a) Duke is a duly formed and validly existing limited liability company in good standing
under the laws of the State of Indiana and all other states in which Duke is required to so
qualify in order to legally perform its obligations hereunder, and has the requisite power and
authority to enter into and carry out the terms of this Agreement;




(b) all action required to be taken by Duke to consummate this Agreement has been taken by
Duke and no further approval of any board, court or other body is necessary in order to permit
Duke to consummate this Agreement;




(c) neither the execution and delivery of, nor the performance of, nor the compliance with,
this Agreement has resulted (or will result) in any violation of, be in conflict with, invalidate,
cancel or make inoperative, interfere with, or constitute a default under, any charter, bylaw,
venture agreement, partnership agreement, trust agreement, mortgage, deed of trust, indenture,
contract, agreement, permit, judgment, decree or order to which Duke is a party or by which Duke
is bound, and there is no default and no event or omission has occurred which, but for the passing
of time or the giving of notice, or both, would constitute a default on the part of Duke under
this Agreement;




(d) there is no action, proceeding or investigation pending or, to Duke’s actual knowledge,
threatened (nor any basis therefor) which questions, directly or indirectly, the validity or
enforceability of this Agreement as to Duke; and




(e) this Agreement has been duly executed by Duke and constitutes the valid and binding
agreement of Duke, enforceable in accordance with its terms, except as the enforceability thereof
may be limited by laws affecting the rights and remedies of creditors generally and equitable
principles of general application.




Section 2.11 Project LLC. At all times the Project LLC shall be treated as a
disregarded entity (i.e. not treated as an entity separate from the Company) under Treasury
Regulations Section 301.7701-3(b)(1)(ii) and under each analogous or similar provision of state or
local law in each jurisdiction where the Company is required to file a tax return. The Company
has not made and shall not make, with respect to the Project LLC an election under Treasury
Regulations Section 301.7701-(3) to be treated or classified other than as provided in Treasury
Regulations Section 301.7701-3(b)(1)(ii).



ARTICLE 3




MEMBERSHIP; DISPOSITIONS OF INTERESTS





Section 3.1 Members.



The initial Members of the Company are Holdings and Duke, each of which is admitted to the
Company as a Member as of the date hereof.




Section 3.2 Dispositions of Membership Interests.




(a) General Restriction. A Member may not make an assignment, transfer, or other
disposition (voluntarily, involuntarily or by operation of law) (each a “Transfer”) of all
or any portion of its Membership Interest or the ownership or equity interests in a Member, nor
pledge, mortgage, hypothecate, grant a security interest in, or otherwise encumber (each an
“Encumbrance”) all or any portion of its Membership Interest or the controlling ownership
or equity interests in a Member, except with the consent of the other Member(s) or as permitted in
Section 3.2(b). Any attempted Transfer or Encumbrance, other than in strict accordance with this
Section 3.2, shall be null, void, and of no force or effect. A Person to whom a Membership
Interest is Transferred pursuant to the terms of this Agreement will be admitted to the Company as
a Member. In connection with any Transfer of a Membership Interest or any portion thereof, and
any admission of any transferee as a Member, the Member making such Transfer and the transferee
shall furnish the other Member(s) with such documents regarding the Transfer as the other
Member(s) may request (in form and substance satisfactory to the other Member(s)), including a
copy of the Transfer instrument, a ratification by the transferee of this Agreement (if the
transferee is to be admitted as a Member) and a legal opinion that the Transfer complies with
applicable federal and state securities laws. For purposes hereof, a Transfer shall be deemed to
have occurred with respect to a Member upon any assignment, transfer, or other disposition
(voluntary, involuntary, or by operation of law) of an interest in that Member. Upon a Transfer
of a Membership Interest permitted by this Agreement, (a) the transferor shall cease to be a
Member for all purposes of this Agreement, and (b) the transferee shall be entitled to receive
that portion of distributions or allocations to which the transferor of the Membership Interest
would be entitled and (c) such transferee shall have all other rights of a Member pursuant to this
Agreement or otherwise.




(b) Permitted Transfers. Notwithstanding the limitations in Section 3.2(a) of this
Agreement:




(1) Holdings may Transfer or otherwise grant Encumbrances in all, but not a portion of,
its Membership Interest and ownership or equity interests in the Company to GRUBB & ELLIS
HEALTHCARE REIT, INC., or any Affiliate of GRUBB & ELLIS HEALTHCARE REIT, INC. or Holdings
and at the election of Holdings, upon any such Transfer of the entire Membership Interest,
the transferee thereof shall be admitted as a Member. In addition, Duke acknowledges that it
has been advised that Holdings may Transfer its Membership Interests to a publicly registered
company or the subsidiary of a publicly registered company that is managed by, sponsored by
or under common control with Holdings or Holdings’ principals or Registered Company and that
in such event the assignee will be required to make certain filings with the Securities and
Exchange Commission (the “SEC Filings”) that relate to the most recent
pre-acquisition fiscal year (the “Audited Year”) and the current fiscal year through
the date of acquisition (the “Stub Period”) for the Property. As used herein, the
term “Registered Company” shall mean a publicly registered company or the subsidiary of a
publicly registered company that is managed by, sponsored by or under common control with
Holdings or Holdings’ principals. To assist the assignee in preparing the SEC Filings, Duke
agrees to provide the assignee with the following: (i) access to bank statements for the
Audited Year and Stub Period; (ii) rent roll as of the end of the Audited Year and Stub
Period; (iii) operating statements for the Audited Year and Stub Period; (iv) access to the
general ledger for the Audited Year and Stub Period; (v) cash receipts schedule for each
month in the Audited Year and Stub Period; (vi) access to invoices for expenses and capital
improvements in the Audited Year and Stub Period; (vii) accounts payable ledger and accrued
expense reconciliations in the Audited Year and Stub Period; (viii) check register for the
three (3) months following the Audited Year and Stub Period; (ix) the Lease and five (5) year
lease schedules, to the extent applicable; (x) copies of all insurance documentation for the
Audited Year and Stub Period; (xi) copies of accounts receivable aging as of the end of the
Audited Year and Stub Period along with an explanation for all accounts over thirty (30) days
past due as of the end of the Audited Year and Stub Period; and (xii) a signed representation
letter in the form attached hereto as Exhibit D.




(2) Duke may Transfer or otherwise grant Encumbrances in all or a portion of its
Membership Interest and ownership or equity interests in Duke to (i) any Affiliate of Duke
Realty Corporation, (ii) any entity, a majority of which is owned directly or indirectly by
Duke or Duke Realty Corporation, or any entity under common control with Duke Realty
Corporation, (iii) any entity which owns a majority of the voting stock of Duke Realty
Corporation, (iv) any partnership or limited liability company of which either Duke, Duke
Realty Corporation or any entity described in subparts (i), (ii) or (iii) of this sentence is
the sole or managing general partner or member owning at least fifty percent (50%) of the
partnership or limited liability company, or a lesser amount if Holdings grants its prior
written consent, which consent Holdings agrees will not be unreasonably withheld, delayed or
conditioned, (v) any entity which may result from a merger or consolidation by or with
Duke or Duke Realty Corporation, or (vi) any entity to which Duke Realty Corporation is
selling all or substantially all of its assets, and at the election of Duke, upon any
such Transfer of its Membership Interest, the transferee shall be admitted as a Member.




Notwithstanding anything to contrary contained in this Agreement, in no event shall
either Member Transfer or Encumber its Membership Interest if such Transfer or Encumbrance
shall constitute a Prohibited Transfer (as defined in the Project Loan Documents), unless
such Member has obtained the express written consent of the Lender and otherwise complied
with the terms of the Project Loan Documents with respect thereto.




Section 3.3 Creation of Additional Membership Interests.



Additional Membership Interests may be created and issued to existing Members or to other
Persons, and such other Persons may be admitted to the Company as Members, with the approval of all
Members, on such terms and conditions as all the Members may determine at the time of admission.




Section 3.4 Resignation.



A Member may not resign or withdraw from the Company without the consent of the other Members.




Section 3.5 Information.



In addition to the other rights specifically set forth in this Agreement, each Member is
entitled to the following information under the circumstances and conditions set forth in the Act:
(a) true and full information regarding the status of the business and financial condition of the
Company; (b) promptly after becoming available, a copy of the Company’s federal, state and local
income tax returns for each year; (c) a current list of the name and last known business, residence
or mailing address of each Member and Manager; (d) a copy of this Agreement, the Company’s
certificate of formation, and all amendments to such documents; (e) true and full information
regarding the amount of cash and a description and statement of the agreed value of any other
property or services contributed by each Member and which each Member has agreed to contribute in
the future, and the date on which each became a Member; and (f) other information regarding the
affairs of the Company to which that Member is entitled pursuant to Section 18-305 of the Act
(including all Company books and records).




Section 3.6 Liability to Third Parties.



No Member shall be liable for the debts, obligations, indemnifications or liabilities of the
Company (except indebtedness that is expressly guaranteed by such Member).




Section 3.7 Withholding.



If the Code or any Governmental Requirements require the Company to withhold any tax with
respect to a distributive share of Company income, gain, loss, deduction or credit, or a
distribution of cash or Property, the Company shall withhold and pay over to any Governmental
Authority any amount required to be withheld pursuant to the Code or any other Governmental
Requirements. All amounts so withheld shall be treated as amounts paid or distributed to the
applicable Member and will reduce the amount otherwise payable or distributable to such other
Member for all purposes of this Agreement.




Section 3.8 Relationship of Members



Each Member agrees that, to the fullest extent permitted by the Act and except to the extent
expressly stated in this Agreement or in any other agreement to which each Member is a party:



(a) No Member shall have any authority to bind or act for, or assume any obligation or
responsibility on behalf of, any other Member, the Company or the Project LLC.



(b) Any consent, approval, determination or other action by a Member shall be given or taken
in the sole and absolute discretion of that Member in its own best interests and without regard to
the best interests of another Member or the Company or the financial, tax or other effect on
another Member or the Company; provided, however, the forgoing shall not authorize any Member to
engage in intentional misconduct, commit a knowing violation of law or engage in conduct in
violation of the terms of this Agreement.



(c) No Member is authorized to act as the agent, representative or attorney-in-fact for any
other Member.



ARTICLE 4




MANAGEMENT OF COMPANY





Section 4.1 Executive Committee.




(a) Formation and Authority. Except for Major Decisions, the Manager shall be vested
with and shall control the business and affairs of the Company. The Members hereby establish the
Executive Committee, and vest the Executive Committee with the authority to act on behalf of the
Company in its own capacity and in its capacity as sole member of the Project LLC and to make all
Major Decisions as set forth in this Agreement.




(b) Major Decisions. No action shall be taken, sum expended, decision made or
obligation incurred by the Company, and the Manager will not permit the Company to perform any of
the foregoing, with respect to a matter within the scope of any of the matters described below
(“Major Decisions”), unless the Executive Committee has expressly approved such matter, or
express provision therefor is set forth in this Agreement or in an Operating Budget approved by
the Executive Committee. References throughout this Agreement related to actions to be taken by or
on behalf of the Company shall be deemed to include actions by or on behalf of a Project LLC
regardless of whether the Project LLC is specifically referenced:




(1) Any sale, transfer, exchange, mortgage, financing, hypothecation or encumbrance of
all or any part of the Property. However, the Manager may make incidental sales, exchanges,
conveyances, or transfers of Company (or Project LLC) personalty or fixtures in the ordinary
course of business; .




(2) Any material amendment or material modification of the Lease and the termination of
the Lease for cause or otherwise (or any such actions with regard to lease(s) entered into in
replacement or substitution thereof with respect to the Project, in whole or in part;;




(3) If the Lease shall be terminated, then the following matters shall become Major
Decisions: (A) leases of the Project, (B) Operating Budgets and (C) leasing agreements for
the lease of space in the Project;




(4) elect to dissolve the Company (or the Project LLC) or the filing of any petition or
consenting to the filing of any petition that would subject the Company (or the Project LLC)
to a Bankruptcy;




(5) entering into any agreement with a Member or any Affiliate thereof, which is not
specifically referenced in this Agreement;




(6) except as set forth in Sections 12 and 13, removal or redemption of a Member or any
Membership Interest; and




(7) except as set forth in Section 3.2(b), the admission of any new Members to the
Company (or the Project LLC).




(c) Membership Composition. Subject at all times to Section 4.1(e) hereof, the
Executive Committee shall at all times consist of two (2) members, one (1) of whom shall be
designated by Duke and one (1) of whom shall be designated by Holdings. Each Member may appoint
an alternate for each member appointed by it to the Executive Committee by written notice to the
other Member and the Company as provided in this Agreement, and the members and alternates
representing a Member may act interchangeably and with equal authority with the members. Each
member or alternate appointed to the Executive Committee shall represent the interests of the
Member making such appointment or designation. Initially, the members of the Executive Committee
designated by each Member are as follows:



	 	 	 
	Duke:

	 	Holdings:
	 

	 	 
	Member: Matthew A. Cohoat

Alternate: Jason F. Sturman

	 	Member: Scott D. Peters

Alternate: Danny Prosky







(d) Membership — Removal and Vacancies. Each Member shall have the power and
authority to remove any member or alternate member of the Executive Committee appointed by it by
delivering written notice of such removal to the Company and the other Member. Vacancies on the
Executive Committee shall be filled by the Member which appointed the Executive Committee member
or alternate member previously holding the position which is then vacant.




(e) Resignation Upon Withdrawal. Upon either Member (or a permitted transferee of
such Member) ceasing to be a Member in the Company, such Member (or such permitted transferee)
shall cause the members and alternates appointed by it to the Executive Committee to resign from
the Executive Committee of the Company in which event the Executive Committee will consist of only
two (2) members who will be designated by the remaining Member.




(f) Membership — Bad Acts Removal. At the request of the other Member, each Member
shall remove any member or alternate to the Executive Committee appointed by it who (a)
misappropriates or converts any funds of the Company to his or her personal use, (b) is declared
to be an incompetent in any judicial proceedings and appoint a replacement member or alternate.




(g) Voting — One Vote. All of the members or alternate members of the Executive
Committee representing a Member (the “Representatives”) shall collectively be entitled to
cast one (1) vote on behalf of that Member with respect to any decision made by the Executive
Committee; provided that if only one Representative representing a Member is present at a meeting
of the Executive Committee, the Representative present shall be entitled to cast the one (1) vote
on behalf of such Member.




(h) Meetings — Generally. Regular meetings of the Executive Committee may be held at
such times and places as may be designated from time to time by resolution of the Executive
Committee and communicated to all Representatives by written notice in accordance with Section
11.1. Special meetings of the Executive Committee may be called by the Manager or any member of
the Executive Committee upon three (3) Business Days notice to all Representatives by telephone,
or telecopy so long as a Representative of each Member is contacted directly via telephone or such
Representative confirms actual receipt of any notice sent via telecopy, which notice may be waived
in each instance. The Executive Committee may conduct its meetings through communication by which
all Representatives participating may hear each other during the meeting. An agenda for each
meeting shall be prepared in advance by the Manager in consultation with the Members. Subject at
all times to Section 4.1(f) hereof, two (2) Representatives of the Executive Committee, one
representing each Member, shall constitute a quorum. Unanimous approving votes shall be required
for all actions of the Executive Committee and such unanimous approving votes shall be binding
upon both Members for all matters, including financing, refinancing, conveyance of some or all of
the Company’s assets, dissolution of the Company, and execution of contracts. Any action required
or permitted to be taken by the Executive Committee may be taken by written consent (delivered by
electronic means or otherwise) signed by the number of members or alternates required to approve
such actions and taken at a meeting of the Executive Committee.




(i) Meetings — Other Invitees. With advance notice to the members representing the
other Member, an Executive Committee member or alternate representing either Member, may invite to
any meeting of the Executive Committee any Person having an equity interest in the Member
represented or in any constituent entity thereof, or any legal counsel, consultant or other agent
of any such party, provided that no Persons other than the Executive Committee members or
alternates shall be entitled to vote with respect to any proceedings of the Executive Committee.




(j) Meetings — Minutes. The Manager shall cause written minutes to be prepared of
all actions taken by the Executive Committee whether by formal meeting, telephonic meeting or
otherwise, and, within ten (10) Business Days after any such meeting, shall deliver a copy thereof
to each member or alternate member of the Executive Committee in attendance at such meeting for
his or her review and written approval, which written approval shall be required in order to
evidence the approval of any action taken by the Executive Committee, and which minutes shall be
deemed approved by the Representative representing a Member if not approved or disapproved by such
Representative within five (5) Business Days after the delivery thereof.




(k) Procedures and Methods. In addition to the foregoing, the Executive Committee
may adopt other procedures and methods designed to permit the business of the Company to proceed
in an orderly and prompt manner, notwithstanding the necessity of Executive Committee approval
hereunder, so long as such procedures and methods are calculated to keep members and alternates of
the Executive Committee advised of the affairs of the Company and allow for a reasonable period
for objection by any member of the Executive Committee.




(l) Voting — Reliance. The members and alternates of the Executive Committee
representing each Member may rely absolutely on the vote, consent, approval, disapproval or
execution and delivery of any instrument by any member or alternate representing the other Member
as having been fully authorized and approved by the other Member, and no member or alternate is
authorized or required to inquire as to whether any member or alternate representing the other
Member was actually authorized by the Member represented by him or her.




(m) No Commission. Members and alternates of the Executive Committee shall not
receive any compensation or other remuneration from the Company for their services to the Company.




Section 4.2 Management of the Company.




(a) Duties and Obligations – Generally. The Manager shall manage the affairs of the
Company and make all decisions with regard thereto, except where (i) such decision is a Major
Decision or otherwise requires a Member’s approval under this Agreement or (ii) the approval of
any of the Members is expressly required by a non-waivable provision of applicable law.




(b) Standard of Care. The Manager shall discharge its duties in good faith and in
the best interests of the Company in accordance with this Agreement. The Manager, on behalf of
the Company, shall in good faith use all commercially reasonable efforts to cause the Property
Manager to comply with its obligations under the Property Management Agreement Without limiting
the ability of the Executive Committee to designate officers pursuant to Section 4.4, the Manager
shall not delegate any of its rights or powers to manage and control the business and affairs of
the Company without the approval of the Executive Committee. .




(c) Manager Authority. Except as otherwise expressly provided in this Agreement, (i)
all references herein to any action to be taken by the Company shall mean action taken in the name
of the Company and on its behalf by the Manager and (ii) the Manager may make any reasonable
decision, take any reasonable action, and execute and deliver any document or instrument, on
behalf of the Company without the consent of any other Member.



By way of illustration, but not in limitation of the foregoing, except for Major Decisions,
the Manager shall and shall have the power and the authority, on behalf of the Company as the
Manager, to do any and all of the following to effectuate the purposes of the Company:



(1) Engage qualified Persons to assist in the Company’s business, including design
professionals, contractors and consultants, attorneys, accountants, real estate brokers and
management agents;



(2) Pay, without duplication, all expenses incurred by the Company in accordance with the
approved Operating Budget, including all costs and expenses to maintain continuously insurance
required under this Agreement and for all taxes and assessments when due;



(3) Maintain the books and records for the Company, conduct asset management activities of the
Company and prepare the reports and financial statements to be submitted to the Members in
accordance with this Agreement;



(4) Operate the business of the Company in accordance with the approved Operating Budget,
subject to the budget flexibility provisions of Section 4.1(b)(3) above;




(5) Supervise negotiations with the appropriate Governmental Authorities;



(6) Supervise the resolution of any disputes concerning boundaries of the Property or Project
and the rights of adjoining owners;



(7) Cause the Property to be acquired by the Company in accordance with the Contribution
Agreement and thereafter cause the Project to be maintained and operated and leased substantially
in accordance with the approved Operating Budget, and in compliance with all applicable
Governmental Requirements, including those relating to zoning, building, fire, subdivision control,
and environmental requirements, including the Americans with Disabilities Act, and applicable
variances to any of the foregoing;



(8) As applicable, obtain all permits, licenses, approvals, and variances required for the
acquisition, ownership and maintenance of the Property, and for the operation, management, repair,
redevelopment, renovation, improvement, leasing and use of the Project in accordance with
applicable Governmental Requirements and customary local practices;



(9) If applicable, for a repair, redevelopment or renovation, select and approve materials to
be incorporated into the Project consistent with their intended quality;



(10) Maintain or cause the tenant under the Lease or tenants under any other leases hereafter
in effect with respect to the Project, the insurance coverages required by (i) the Lease or any
other leases hereafter in effect with respect to the Project and (ii) the Project Loan Documents or
the documentation for any loan to the Company hereafter in effect;



(11) Oversee the management of the Project and procure the proper performance of all
obligations connected with the carrying out and completion thereof substantially in accordance with
the approved Operating Budget therefor;



(12) Verify and pay all costs incurred in connection with the Property and the Project in
conformity with the approved Operating Budget therefor;



(13) Advise the Members without delay of or any difficulties, problems, occurrences,
circumstances or situations relating to the Project that, in the reasonable commercial judgment of
the Manager, are likely to cause any capital repairs or renovations, or a material variance from an
approved Operating Budget;



(14) Undertake, implement and complete any operation and maintenance program or any other
program or action to remove or otherwise remediate hazardous materials; and




(15) Perform all necessary or incidental activities relating to the foregoing.




(d) Any Person not Affiliated with the Manager that deals with the Manager on behalf of the
Company may rely absolutely on any action, failure to act, or execution and delivery of any
instrument by the Manager on behalf of the Company as having been authorized by requisite action
of the Executive Committee, and no such non-Affiliated Person shall be authorized or required to
inquire as to whether any such action by the Manager on behalf of the Company shall actually have
been so authorized. As between the Members, as between an Affiliated Person and the Company or
Manager, and as between the Manager and the Company, the authority of the Manager to act on behalf
of the Company shall be determined from the pertinent provisions of this Agreement.




Section 4.3 Operating Budget.



An annual Operating Budget shall be prepared for the Project which shall be prepared and
submitted by the Manager to the Executive Committee for approval. After an annual Operating Budget
has been approved by the Executive Committee, the Manager shall implement it on behalf of the
Company and may incur the expenditures and obligations therein provided. The initial Operating
Budget shall be prepared by the Manager and submitted to the Executive Committee for approval
within thirty (30) days after the date hereof. Thereafter, by November 1 of each calendar year, the
Manager shall deliver to the Executive Committee for approval a proposed Operating Budget for the
Property or Project for the next calendar year. If any Operating Budget for any calendar year has
not been approved by January 1 of that year, the Company shall continue to operate under the
Operating Budget for the previous year with such adjustments as may be necessary to reflect
deletion of non-recurring expense items set forth on the previous Operating Budget and increased
insurance costs, taxes, utility costs, and debt service payments; however, no capital expenditures
(other than deposits into any capital reserve account) shall be made for that year until an
Operating Budget for such year is approved, unless the Executive Committee specifically consents
thereto in writing.




Section 4.4 Officers and Manager Authorized Signatories.




(a) The Executive Committee may designate one or more Persons to be officers of the Company,
and any officers so designated shall have such title, authorities, duties, and salaries as the
Executive Committee may delegate to them. Any officer may be removed as such, either with or
without cause, by the Executive Committee.




(b) Holdings has appointed the following persons as its authorized signatories to execute and
deliver any and all documents and agreements that Holdings is authorized or required to execute
and deliver in its capacity as Manager of the Company: (i) Shannon K S Johnson, (ii) Andrea R.
Biller and (iii) Scott D. Peters (the “Manager Authorized Signatories”). The Members
hereby acknowledge and agree that Holdings shall have the power and authority to remove or replace
or designate additional Manager Authorized Signatories in its sole discretion by delivering
written notice of such removal to the Company and the other Member, Upon Managers ceasing to be a
Member in the Company, the Manager Authorized Signatories shall no longer have any rights to bind
the Company or otherwise act upon its behalf. Any entity that replaces Holdings as Manager of the
Company shall have the same right to designate its own Manager Authorized Signatories from time to
time in its sole discretion.



Section 4.5 Removal of Manager. Upon the occurrence of a Removal Event on the part of a
Member who is also a Manager, and provided the other Member shall (i) not have also suffered a
Removal Event, and (ii) not be in default under this Agreement, the non-managing Member may remove
the managing Member as the Manager, in which event the non-managing Member shall undertake the role
of Manager hereunder.




Section 4.6 Reimbursement of Expenses.



The Manager shall be reimbursed for all out-of-pocket expenses actually incurred by it
directly in conjunction with the business and affairs of the Company (including travel and
entertainment expenses, telephone costs, and the like, but not overhead expenses, to the extent set
forth on an Operating Budget or as otherwise approved in writing by the Executive Committee. Upon
request, the Manager shall provide reasonable supporting verification to the other Members for all
expenditures for which any reimbursement is requested.




Section 4.7 Compensation of Manager and Members.



Except as herein otherwise specifically provided or approved by the Executive Committee, no
compensatory payment shall be made by the Company to the Manager or any Member for the services to
the Company of the Manager or such Member or any member or employee of the Manager or such Member.




Section 4.8 Transactions with Affiliates.




(a) General. When any service or activity to be performed on behalf of the Company
is performed by a Member or an Affiliate of a Member, the fee payable for such service or activity
shall not exceed the fee which would be payable by the Company to an unaffiliated third party of
comparable standing providing the same services. The foregoing shall not limit or otherwise
impact the amounts payable by the Company under any Property Management Agreement.




(b) Exercise of Remedies under Agreements with Affiliates. Notwithstanding any
other provision to the contrary, (i) the single vote of the member of the Executive Committee
appointed by Holdings shall, on its own, be sufficient to bind the Company to authorize or require
the enforcement of, or exercise any right or option or taking of any action under any agreement
between the Company and Duke or an Affiliate of Duke and (ii) the single vote of the member of
the Executive Committee appointed by Duke shall, on its own, be sufficient to bind the Company to
authorize or require the enforcement of, or exercise any right or option or taking of any action
under the Property Management Agreement and the other agreement between the Company and Holdings
or any Affiliate of Holdings and (iii) in either of the forgoing events, the Company shall be
required to immediately take any such actions requested by Holdings or Duke, as the case may be,
other than termination.




Section 4.9 Property Management.



On or before the date of this Agreement the Company shall enter into a Property Management
Agreement with Property Manager, under which Property Manager shall manage the Project.




Section 4.10 Indemnification; Reimbursement of Expenses; Insurance



To the fullest extent permitted by the Act: (a) the Company shall indemnify each Member and
Manager who was, is or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (“Proceeding”), any appeal therein, or any inquiry or
investigation preliminary thereto, solely by reason of the fact that he or she is or was a Member
or Manager and was acting within the scope of its duties or under the authority of the Members; (b)
the Company shall pay or reimburse a Member or Manager for all losses and expenses incurred by him
or her (1) in advance of the final disposition of a Proceeding to which such Member or Manager was,
is or is threatened to be made a party, and (2) in connection with his or her appearance as a
witness or other participation in any Proceeding. The Company, by adoption of a resolution of the
Members, may indemnify and advance expenses to an officer, employee or agent of the Company to the
same extent and subject to the same conditions under which it may indemnify and advance expenses to
Members and Managers under the preceding sentence. The provisions of this Section 4.10 shall not
be exclusive of any other right under any law or any provision of the Certificate or this
Agreement, or otherwise. Notwithstanding the foregoing, this indemnity shall not apply to actions
constituting gross negligence, willful misconduct or bad faith, or involving a breach of this
Agreement, but shall apply to actions constituting simple negligence. The Company may purchase and
maintain insurance to protect itself and any Member, Manager, officer, employee or agent of the
Company, whether or not the Company would have the power to indemnify such Person under this
Section 4.10. This indemnification obligation shall be limited to the assets of Company and no
Member shall be required to make a Capital Contribution in respect thereof.




Section 4.11 Conflicts of Interest.



Except as otherwise set forth in this Agreement, (i) each Member, Manager, officer or
Affiliate thereof may engage in and possess interests in other business ventures of any and every
type and description, independently or with others, including ones in competition with the Company,
with no obligation to offer to the Company or any other Member, Manager, officer or Affiliate the
right to participate therein or to account therefore, and (ii) the Company may transact business
with any Member, Manager, officer or Affiliate thereof, provided the terms of those transactions
are no less favorable than those the Company could obtain from unrelated third parties.




Section 4.12 Governmental Requirements.



The Manager and Members will use their respective good faith and commercially reasonable
efforts to cause the Company to conduct its business in accordance with all applicable Governmental
Requirements having jurisdiction of the Company and its properties and assets.



ARTICLE 5




ACCOUNTING AND REPORTING





Section 5.1 Fiscal Year, Accounts, Reports.




(a) The fiscal year of the Company shall be the calendar year.




(b) The books of account of the Company, at Company expense, shall be kept and maintained by
the Manager on an accrual basis in accordance with generally accepted accounting principles
applied on a consistent basis. The books of account shall be kept at the principal place of
business of the Company, and shall at all times be available for inspection by any Member.




(c) The Manager shall, at Company expense, furnish to the Members (1) on or before the 20th
day of each month, an unaudited statement setting forth and describing in reasonable detail the
receipts and expenditures of the Company during the preceding month and comparing the results of
operations of the Company for such month and for the year to date to the Operating Budget, (2) on
or before 60 days after the end of each fiscal year, a balance sheet of the Company dated as of
the end of such fiscal year, a statement of the Members’ Capital Accounts and Capital Contribution
Balances, a statement of Net Cash Flow, and a statement setting forth the Profits and Losses of
the Company for such fiscal year, and (3) from time to time, all other information relating to
Company and its business and affairs reasonably requested by any Member. Upon the request of
either Member, the books and records of the Company shall be audited by the Auditor, with the
audit report issued within ninety (90) days following the end of the fiscal year.




(d) Each Member, at its expense, may at all reasonable times during usual business hours
audit, examine, and make copies of or extracts from the books of account records, files, and bank
statements of the Company. Such right may be exercised by any Member, or by its designated agents
or employees.




Section 5.2 Bank Accounts.



The Manager shall open and maintain (in the name of the Company) a special bank account or
accounts in a bank or savings and loan association, the deposits of which are insured, up to the
applicable limits, by an agency of the United States government, in which shall be deposited all
funds of the Company. Withdrawals therefrom shall be made upon the signatures of such Persons as
the Manager shall designate.



ARTICLE 6




CAPITAL CONTRIBUTIONS





Section 6.1 Capital Contributions.




Contemporaneously with the execution of this Agreement and in accordance with the terms and
conditions of the Contribution Agreement, Duke shall contribute the Property to the capital of the
Company and Holdings shall contribute cash to the capital of the Company as set forth on
Exhibit A attached hereto and made a part hereof in exchange for their Membership
Interests in the Company (the “Initial Capital Contributions”). Simultaneously with the
contribution of the Property to the Company, the Company shall contribute the Property to the
Project LLC; provided, that for convenience of the parties, the Property will be deeded directly
to the Project LLC.




Section 6.2 Project Loan and Distributions to Duke.




(a) Simultaneously with the contribution to the Company of the Initial Capital Contributions
by Duke and Holdings the Company shall close the Project Loan.




(b) Immediately after the funding of the Initial Capital Contributions and the closing of the
Project Loan, the Company shall distribute to Duke the amounts set forth on said Exhibit A
from the sources of funds described on said Exhibit A.



(c) The Members agree that after giving effect to the contributions and distributions
contemplated by Sections 6.1 and 6.2(b) above, Duke’s Capital Contribution Balance is
$2,899,038.85, and Holdings’ Capital Contribution Balance is $11,596,155.41.00.



	 	 	 
	Section 6.3

Section 6.4

	 	Intentionally Omitted.

Additional Capital Contributions — Calls by Members.
	
 
	 	 






If the Manager should at any time determine that to meet the Company’s cash requirements (x),
the Company is in need of any funds in excess of amounts: available to the Company from (i) cash
flow, (ii) reserves set forth in any Operating Budget or otherwise approved by the Executive
Committee, (iii) any loans approved by the Executive Committee made to the Company to fulfill such
obligations or requirements, or (iv) the Initial Capital Contributions made by the Members pursuant
to Section 6.1 hereof, and (y) that it would be in the best interests of the Company to obtain such
required funds, then the Members shall contribute the needed funds to the capital of the Company in
proportion to their respective Sharing Ratios at such time. In the event that the Manager makes a
call for an Additional Capital Contribution under this Section 6.4, but then a Member fails to make
the Additional Capital Contribution required hereunder within the time period required under
Section 6.5 hereof, such Member shall be a Non-Contributing Member hereunder, and the other Member
shall be relieved of any obligation to make such Additional Capital Contribution called for,
notwithstanding any provision hereof to the contrary (and, to the extent such Member has already
made such Additional Capital Contribution, such Additional Capital Contribution shall be refunded
to it immediately upon its demand and, upon such reimbursement, the Non-Contributing Member’s
failure to contribute shall be deemed cured and such Member shall no longer be considered a
Non-Contributing Member).



Section 6.5 Notice of Additional Capital Contributions.



Additional Capital Contributions contemplated by Section 6.4 hereof may be called for only in
the amounts, at the times and for the purposes set forth in this Article 6, by written notice to
the Members by the Manager and shall be due twenty (20) Business Days after the date of such
notice. Any Member not meeting such capital call in full within said twenty (20)-Business Day
period shall be a "Non-Contributing Member” hereunder, but the other Member (the
"Contributing Member") shall not exercise its remedies under Section 6.6 hereof unless such
failure to meet a capital call remains uncured by the close of business on the tenth (10th)
Business Day following the expiration of such twenty (20)-Business Day period.



Section 6.6 Additional Capital Contributions and Member Loans.



(a) Funding of Additional Capital or Member Loans on Behalf of Non-Contributing
Member. In the event that a Member becomes a Non-Contributing Member with respect to an
obligation to make a cash Additional Capital Contribution under Section 6.4 hereof, then following
the expiration of any applicable grace or cure period expressly set forth in Section 6.5 hereof,
the Contributing Member may, but shall not have the obligation to, pay, for and on behalf of the
Non-Contributing Member, an amount equal to the amount which the Non-Contributing Member has failed
to contribute to the capital of the Company, and the amount so paid by the Contributing Member on
its own behalf and on behalf of the Non-Contributing Member shall (x) constitute a loan to the
Company (a “Member Loan”). Any such loan to the Company shall be transferable to an
Affiliate of the Contributing Member at any time and shall bear interest on the unpaid principal
balance thereof at an annual rate (compounding monthly) equal to the lesser of (A) the then maximum
rate permitted on such debts under the laws of the State of Delaware, or (B) six percent (6%) over
the Prime Rate in effect on the date on which the Contributing Member makes such loan; provided,
however, that the Prime Rate shall be adjusted and determined on the last day of each calendar
month while any part of such loan or any interest accrued thereon remains outstanding, and such
loan shall bear interest on the unpaid principal balance thereof from the first day of the next
succeeding calendar month through the last day of such next succeeding calendar month at an annual
rate (compounding monthly) equal to the lesser of (I) the then maximum rate permitted on such debts
under the laws of the State of Missouri or (II) six percent (6%) over the Prime Rate as so
determined. Notwithstanding the provisions of Articles 8 and 10 hereof, and any other provision
hereof to the contrary, until any such loan and all interest accrued thereon has been paid to the
Contributing Member making such loan, no distributions of cash, in liquidation or otherwise, shall
be made by the Company to the Members, and all such distributions to which the Members would
otherwise be entitled under this Agreement shall be distributed by the Company to the Contributing
Member making such loan and shall be applied first to the payment of all accrued and unpaid
interest on such loan and then to the payment of the principal amount of any such loan.



Section 6.7 Return of Contributions.



Except as expressly provided herein, no Member shall be entitled to the return of (a) any part
of its Capital Contributions, (a) any interest in respect of any Capital Contribution, or (b) the
fair market value of its Membership Interest in connection with a withdrawal from the Company or
otherwise. Unrepaid Capital Contributions shall not be a liability of the Company or of any
Member. No Member shall be required to contribute or lend any cash or property to the Company to
enable the Company to return any Member’s Capital Contributions to the Company.



Section 6.8 Company Loans.



If the Company shall have insufficient cash to pay its obligations, any Member, with the
approval of the Executive Committee, may advance such funds for the Company on such terms and
conditions as the lending Member and the Executive Committee shall determine. Each such advance
shall constitute a loan from such Member to the Company and shall not constitute a Capital
Contribution.



Section 6.9 Balances.



The Company’s books and records shall contain entries indicating the type and amount of
Capital Contributions made to the Company.



Section 6.10 No Third-Party Rights.



Nothing contained in this Article 6, nor any other provision of this Agreement shall be
construed to create any rights or benefits in any Person, other than the Members, and their
respective legal representatives and permitted transferees, successors and assigns, subject to the
limitations on transfer contained herein.



Section 6.11 Member Loans for Guaranty Payments. Notwithstanding anything contained herein to
the contrary, in the event that Holdings (or Grubb & Ellis Healthcare REIT, Inc., a Maryland
corporation) shall make a payment to the lender of the Project Loan or otherwise incur any damages,
losses, costs or expenses, including, without limitation, actual and reasonable attorneys fees or
expenses, under or related to the Holdings Guaranty or Duke shall make a payment to the lender of
the Project Loan or otherwise incur any damages, losses, costs or expenses, including, without
limitation, actual and reasonable attorneys fees or expenses, under or related to the Duke Guaranty
(a “Guaranty Payment”), then (a) the amount of such Guaranty Payment by Holdings or Grubb &
Ellis Healthcare REIT, Inc. shall constitute a Member Loan to the Company by Holdings and (b) the
amount of such Guaranty Payment by Duke shall constitute a Member Loan to the Company by Duke
(either a “Guaranty Payment Member Loan”). Any Guaranty Payment Member Loan shall be
treated in the same manner as other Member Loans except as follows: (i) Guaranty Payment Member
Loans shall be paid prior to the payment of any other Member Loans and (ii) Guaranty Payment Member
Loans made by Duke shall be payable prior to payments of Guaranty Payment Member Loans made by
Holdings.



ARTICLE 7




FINANCING





Section 7.1 Project Financing.



On or about the date hereof the Company shall close the Project Loan. In connection with the
Project Loan, Manager, on behalf of the Company, shall enter into an interest rate cap
agreement in form and substance satisfactory to Manager in its reasonable discretion. Each Member
agrees to provide a limited payment guaranty of the obligations of the Company with respect to the
Project Loan; provided, however, that (a) the Members’ obligations under any such guaranty
agreements shall be proportionate to their respective Sharing Ratios, (b) Holdings’ guaranty shall
be for 80% of the outstanding indebtedness of the Project Loan from time to time and shall be
provided by Grubb & Ellis Healthcare REIT, Inc. (the “Holdings Guaranty”), (c) Duke’s
guaranty shall be for 20% of the outstanding indebtedness of the Project Loan from time to time
(the “Duke Guaranty”) and (d) such guaranty agreements shall otherwise be in form and
substance reasonably acceptable to each Member. Subject to the limitations set forth in the
following sentence, in connection with the Holdings Guaranty, Duke agrees to indemnify and hold
Holdings harmless with respect all losses, damages, costs and expenses, including without
limitation, actual and reasonable legal fees and disbursements incurred by Holdings being required
to (i) take any actions or make an undertakings under Sections 21(a) or (b) of the Holdings
Guaranty, or (b) make any payments of any amounts under the Sections 21(a) or (b) of the Holdings
Guaranty (collectively, the “Claims”). Duke’s obligation to indemnify and hold harmless Holdings
shall be limited to Claims to the extent they result from any action or inaction that constitutes
gross negligence, willful misconduct or bad faith, or involving a breach of this Agreement (but
shall not apply to actions constituting simple negligence) by Duke from and after the
Closing Date (as defined in the Project Loan Documents) (including without limitation, any action
or inaction that constitutes gross negligence, willful misconduct or bad faith, or involving a
breach of this Agreement (but shall not apply to actions constituting simple negligence)
by Duke in the event that Duke shall become the Manager of the Company).



ARTICLE 8




DISTRIBUTIONS





Section 8.1 Distributions in General.



From time to time, in accordance with Sections 8.2 below, the Manager shall determine the
amount, if any, by which the Company funds then on hand exceed the reasonable working capital needs
of the Company, including reasonable reserves for future Company obligations. Any excess funds
shall be distributed to the Members in accordance with the provisions of this Article 8.




Section 8.2 Distribution of Net Cash Flow.



The Net Cash Flow for any particular period, subject to Section 6.6(a) and 6.11, shall be
distributed to the Members in the following order of priority no less frequently than bi-monthly:




(a) For the first thirty six month period following the date of this Agreement, 20% to Duke
and 80% to Holdings;




(b) After the first thirty six month period following the date of this Agreement,




(1) first, 20% to Duke and 80% to Holdings until each Member has received an
amount calculated like interest equal to a 6% per annum cumulative return on its Capital
Contribution Balance;.




(2) second, 30% to Duke and 70% to Holdings until each Member has received an
amount calculated like interest equal to an 8% per annum cumulative return on its Capital
Contribution Balance, and taking into account the amounts distributed under Section 8.2(a)
and 8.2(b)(1); and




(3) The balance, if any, 40% to Duke and 60% to Holdings.



Section 8.3 Distribution of Capital Proceeds. Capital Proceeds for any particular period,
subject to Section 6.6(a) and 6.11, shall be distributed in the following order of priority within
30 days of the closing of any Capital Transaction:




(a) first, 20% to Duke and 80% to Holdings in reduction of their Capital Contribution
Balances until each of their Capital Contribution Balances have been reduced to zero;




(b) second, 20% to Duke and 80% to Holdings until each Member has shall have achieved
a 6% IRR, taking into account the amounts distributed under Sections 8.2 and Section 8.3(a). ;




(c) third, 30% to Duke and 70% to Holdings until each Member has shall have achieved
an 8% IRR , taking into account the amounts distributed under Sections 8.2 and Sections 8.3(a) and
(b); and




(d) The balance, if any, 40% to Duke and 60% to Holdings.



ARTICLE 9




CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS




	 	 	 
	Section 9.1

Section 9.2

	 	[Intentionally Omitted]

Capital Accounts.
	
 
	 	 







(a) Establishment and Maintenance. A separate capital account (“Capital
Account”) will be maintained for each Member. The Capital Account of each Member will be
determined and adjusted as follows:




(1) Each Member’s Capital Account will be credited with the amount of cash and Gross
Asset Value, as agreed by the Members, of any property (net of liabilities assumed by the
Company resulting from such contribution and liabilities to which the property is subject)
contributed by a Member to the Company, the Member’s distributive share of Profits, any items
in the nature of income or gain that are specially allocated to the Member under Section
9.4(c) or Section 9.4(d), and the amount of any Company liabilities that are assumed by the
Member or secured by any Company property distributed to the Member.




(2) Each Member’s Capital Account will be debited with the amount of cash and the Gross
Asset Value of any Company property distributed to the Member under any provision of this
Agreement, the Member’s distributive share of Losses, any items in the nature of deduction or
loss that are specially allocated to the Member under Section 9.4(c) or Section 9.4(d), and
the amount of any liabilities of the Member assumed by the Company or which are secured by
any property contributed by the Member to the Company.




(3) If any Membership Interest is Transferred in accordance with the terms of this
Agreement, the transferee will succeed to the Capital Account of the transferor to the extent
it relates to the transferred Membership Interest.




(b) Modifications by Manager. The provisions of this Section 9.2 and the other
provisions of this Agreement relating to the maintenance of Capital Accounts have been included in
this Agreement to comply with Section 704(b) of the Code and the Regulations promulgated
thereunder and will be interpreted and applied in a manner consistent with those provisions. The
Manager may modify the manner in which the Capital Accounts are maintained under this Section 9.2
to comply with those provisions, as well as upon the occurrence of events that might otherwise
cause this Agreement not to comply with those provisions; however, without the unanimous consent
of all Members, the Manager may not make any modification to the way Capital Accounts are
maintained if such modification would have the effect of changing the amount of distributions to
which any Member would be entitled during the operation, or upon the liquidation, of the Company.



Section 9.3 Adjustment of Gross Asset Value.



“Gross Asset Value.” with respect to any asset, is the adjusted basis of that asset
for federal income tax purposes, except as follows:




(a) The initial Gross Asset Value of any asset contributed (or deemed contributed under Code
Sections 704(b) and 752 and the Regulations promulgated thereunder) by a Member to the Company
will be, subject to Section 6.3, the fair market value of the asset on the date of the
contribution, as detailed on Exhibit A or as otherwise determined by the Executive
Committee.




(b) The Gross Asset Values of all Company assets will be adjusted to equal the respective
fair market values of the assets, as determined by the Executive Committee, as of (1) the
acquisition of an additional interest in the Company by any new or existing Member in exchange for
more than a de minimis capital contribution, (2) the distribution by the Company to a Member of
more than a de minimis amount of Company property as consideration for an interest in the Company
if an adjustment is necessary or appropriate to reflect the relative economic interests of the
Members in the Company, and (3) the liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g).




(c) The Gross Asset Value of any Company asset distributed to any Member will be the gross
fair market value of the asset on the date of distribution.




(d) The Gross Asset Values of Company assets will be increased or decreased to reflect any
adjustment to the adjusted basis of the assets under Code Section 734(b), 732(d) or 743(b), but
only to the extent that the adjustment is taken into account in determining Capital Accounts under
Regulations Section 1.704-1(b)(2)(iv)(m), provided that Gross Asset Values will not be adjusted
under this Section 9.3(d) to the extent that the Manager determines that an adjustment under
Section 9.3(b) is necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment under this Section 9.3(d).




(e) After the Gross Asset Value of any asset has been determined or adjusted under Section
9.3(a), Section 9.3(b) or Section 9.3(d), Gross Asset Value will be adjusted by the Depreciation
taken into account with respect to the asset for purposes of computing Profits or Losses.



Section 9.4 Profits, Losses and Distributive Shares of Tax Items.




(a) Profits. After giving effect to the special allocations in Sections 9.4(c)
and 9.4(d), Profits for any fiscal year shall be allocated to the Members so as to reduce,
proportionately, the differences between their respective Target Capital Accounts and
Partially Adjusted Capital Accounts for such fiscal year. No portion of Profits for any
fiscal year shall be allocated to a member whose Partially Adjusted Capital Account is
greater than or equal to its Target Capital Account for such fiscal year.




(b) Losses. After giving effect to the special allocations in Sections 9.4(c)
and 9.4(d), Losses for any taxable year shall be allocated to the Members so as to reduce,
proportionately the differences between their respective Partially Adjusted Capital Accounts
and Target Capital Accounts for such fiscal year. No portion of the Losses for any fiscal
year shall be allocated to a Member whose Target Capital Account is greater than or equal to
its Partially Adjusted Capital Account for such fiscal year.




(c) Special Allocations. The following special allocations will be made in the
following order and priority before determinations and allocations of Profits and Losses:




(1) Company Minimum Gain Chargeback. If there is a net decrease in Company
Minimum Gain during any taxable year or other period for which allocations are made, before
any other allocation under this Agreement, each Member will be specially allocated items of
Company income and gain for that period (and, if necessary, subsequent periods) in
proportion to, and to the extent of, an amount equal to such Member’s share of the net
decrease in Company Minimum Gain during such year determined in accordance with Regulations
Section 1.704-2(g)(2). The items to be allocated will be determined in accordance with
Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 9.4(c)(1) is intended to
comply with the minimum gain chargeback requirements of the Regulations, and will be
interpreted consistently with the Regulations.




(2) Member Nonrecourse Debt Minimum Gain Chargeback. If there is a net
decrease in Member Nonrecourse Debt Minimum Gain with respect to a Member Nonrecourse Debt
during any taxable year or other period for which allocations are made, any Member with a
share of such Member Nonrecourse Debt Minimum Gain (determined under Regulations Section
1.704-2(i)(5)) will be specially allocated items of Company income and gain for that period
(and, if necessary, subsequent periods) in an amount equal to such Member’s share of the net
decrease in the Member Nonrecourse Debt Minimum Gain during such year determined in
accordance with Regulations Section 1.704-2(i)(4). The items to be so allocated will be
determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 9.4(c)(2) is intended to comply with the minimum gain chargeback requirements of the
Regulations Section 1.704-2(f) and will be interpreted consistently with the Regulations.




(3) Qualified Income Offset. A Member who unexpectedly receives any
adjustment, allocation or distribution described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Company income and
gain in an amount and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible.




(4) Nonrecourse Deductions. Nonrecourse Deductions for any taxable year or
other period for which allocations are made will be allocated among the Members in
proportion to their respective Sharing Ratios in the Company.




(5) Member Nonrecourse Deductions. Notwithstanding anything to the contrary in
this Agreement, any Member Nonrecourse Deductions for any taxable year or other period for
which allocations are made will be allocated to the Member who bears the economic risk of
loss with respect to the Member Nonrecourse Debt to which the Member Nonrecourse Deductions
are attributable in accordance with Regulations Section 1.704-2(i).




(6) Code Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Company asset under Code Sections 734(b) or 743(b) is required to be taken
into account in determining Capital Accounts under Regulations Section 1.704-1(b)(2)(iv)(m),
the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment decreases the
basis), and the gain or loss will be specially allocated to the Members in a manner
consistent with the manner in which their Capital Accounts are required to be adjusted under
Regulations Section 1.704-1(b)(2(iv)(m).




(7) The allocations of Profit and Loss and items thereof in this Article 9 are intended
to produce Capital Accounts for the Members that would equal the amounts each Member would
receive if the Company were liquidated, all of the assets of the Company were sold for their
Gross Asset Values and the proceeds were distributed in accordance with Section 10.2(c)(2).
If at any time that is not the case, the Manager is authorized to make special allocations of
items of income, gain, loss and expense until the Members’ Capital Accounts equal the amounts
each Member would receive if the Company were liquidated, all of the assets of the Company
were sold for their Gross Asset Values and the proceeds were distributed in accordance with
Section 10.2(c)(2).




(d) Curative Allocations. The allocations set forth in Section 9.4(c) (the
“Regulatory Allocations”) are intended to comply with certain requirements of Regulations
Sections 1.704-1(b) and 1.704-2. The Regulatory Allocations may effect results which would be
inconsistent with the manner in which the Members intend to divide Company distributions.
Accordingly, the Manager is authorized to divide other allocations of Profits, Losses, and other
items among the Members, to the extent that they exist, so that the net amount of the Regulatory
Allocations and the special allocations to each Member is zero. The Manager will have discretion
to accomplish this result in any reasonable manner that is consistent with Code Section 704 and
the related Regulations.




(e) Tax Allocations-Code Section 704(c). For federal, state and local income tax
purposes, Company income, gain, loss, deduction or expense (or any item thereof) for each fiscal
year shall be allocated to and among the Members to reflect the allocations made pursuant to the
provisions of this Section 9.4 for such fiscal year. In accordance with Code Section 704(c) and
the related Regulations, income, gain, loss and deduction with respect to any property contributed
to the capital of the Company, solely for tax purposes, will be allocated among the Members so as
to take account of any variation between the adjusted basis to the Company of the property for
federal income tax purposes and the initial Gross Asset Value of the property (computed in
accordance with Section 9.3). If the Gross Asset Value of any Company asset is adjusted under
Section 9.3(b), subsequent allocations of income, gain, loss and deduction with respect to that
asset will take account of any variation between the adjusted basis of the asset for federal
income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and
the related Regulations, using the so-called “traditional method.”. Allocations under this
Section 9.4(e) are solely for purposes of federal, state and local taxes and will not affect, or
in any way be taken into account in computing, any Member’s Capital Account or share of Profits,
Losses or other items or distributions under any provision of this Agreement.




(f) Solely for purposes of determining a Member’s proportionate share of the “excess
nonrecourse liabilities” of the Company within the meaning of Regulations Section 1.752-3(a)(3),
the Members’ interests in Company profits are in proportion to their Sharing Ratios




(g) Members shall be bound by the provisions of this Section 9.4 in reporting their shares of
Company income and loss for income tax purposes.



Section 9.5 Tax Returns.



The Manager or its designee shall prepare and file all necessary federal and state income tax
returns for the Company to be prepared prior to their due dates, including making the elections
described in Section 9.6. Each Member shall furnish to the Manager all pertinent information in
its possession relating to Company operations that is necessary to enable such income tax returns
to be prepared and filed. Manager agrees to comply with any reasonable request from Duke for an
estimate of taxable income for a particular year.



	 	 	 
	Section 9

	 	.6Tax Elections.
	 

	 	 






	 	 	 
	The following elections shall be made on the appropriate returns of the Company:








(a) to adopt the calendar year as the Company’s fiscal year;




(b) to adopt the accrual method of accounting;




(c) if there is a distribution of Company property as described in section 734 of the Code
or if there is a transfer of a Company interest as described in section 743 of the Code, upon
written request of any Member, to elect, pursuant to section 754 of the Code, to adjust the basis
of Company properties; and




(d) to elect to amortize the organizational expenses of the Company ratably over a period of
60 months as permitted by section 709(b) of the Code.



No election shall be made by the Company or any Member to be excluded from the application of
the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of
applicable state laws.



Section 9.7 Tax Matters Member.



Holdings shall be the “tax matters partner” of the Company pursuant to section 6231(a)(7) of
the Code. As tax matters partner, such Member shall take such action as may be necessary to cause
each other Member to become a “notice partner” within the meaning of section 6223 of the Code.
Such Member shall inform each other Member of all significant matters that may come to its
attention in its capacity as tax matters partner by giving notice thereof within ten days after
becoming aware thereof and, within such time, shall forward to each other Member copies of all
significant written communications it may receive in such capacity. Such Member shall not take any
action contemplated by Subchapter C of Chapter 63, Subtitle F of the Code without the consent of
each other Member. This provision is not intended to authorize such Member to take any action left
to the determination of an individual Member under such Subchapter of the Code.



Section 9.8 Allocations on Transfer of Interests.



All items of income, gain, loss, deduction, and credit allocable to any interest in the
Company that may have been transferred shall be allocated between the transferor and the transferee
based upon that portion of the calendar year during which each was recognized as owning such
interest, without regard to the results of Company operations during any particular portion of such
calendar year and without regard to whether cash distributions were made to the transferor or the
transferee during such calendar year; however, such allocation shall be made in accordance with a
method permissible under section 706 of the Code and the Regulations thereunder.



Section 9.9 Restrictions on Company Activities.



It is mutually agreed and understood that certain actions, if taken by the Company, could have
seriously adverse tax or other economic consequences to the Members. In order to avoid such
consequences, notwithstanding any other provision of this Agreement, the Members hereby agree as
follows:




(a) The Members acknowledge that Duke Realty Corporation is an Affiliate of Duke and is a
real estate investment trust (a “REIT”) and that Duke Realty Corporation’s ability to
maintain its status as a REIT may be affected by the nature of the income and assets of the
Company. So long as Duke or any Affiliate of Duke is a REIT, unless authorized by the express
terms of this Agreement: (i) except with the express written consent of Duke, the Company shall
not take any action which (a) could, in the reasonable judgment of Duke, adversely affect the
ability of Duke Realty Corporation to continue to qualify as a REIT, or (b) could, in the
reasonable judgment of Duke, subject Duke Realty Corporation to any additional taxes under Section
857 or Section 4981 of the Code; (ii) except with the express written permission of Duke, no
services shall be provided directly by the Company to, or for the benefit of, tenants of the
Property unless such services are provided by a “taxable REIT subsidiary” as defined in Section
856(l) of the Code or an “independent contractor” as defined in Section 856(d)(3) of the Code with
respect to Duke Realty Corporation. The Members agree to discuss the types of services that might
be provided directly by the Company to, or for the benefit of, tenants of the Property and to
jointly determine (1) which services, if any, shall be so provided to, or for the benefit of,
tenants of the Company, and (2) whether the Members or their Affiliates should form a jointly
owned taxable REIT subsidiary to provide any such services and appropriate charges for any
services provided by a taxable REIT subsidiary.




(b) So long as Duke or any Affiliate of Duke is a REIT: (i) without the prior approval of
Duke, the Company shall neither acquire, nor own, directly or indirectly, any “securities” other
than securities that constitute real estate assets within the meaning of Code Section
856(c)(5)(B), Government securities, or securities that are not considered securities pursuant to
Section 856(m), (ii) any securities held by the Company in violation of the preceding clause (i)
shall be deemed for all purposes to be held in trust by the Company for the benefit of Holdings,
and shall not be an asset of the Company; and (iii) the Company shall immediately distribute such
excess securities to Holdings, and Holdings hereby acknowledges and agrees that it will pay an
amount of cash to Duke equal to Duke’s then-Sharing Ratio in the Company multiplied by the fair
market value of such excess securities, as determined by an appraisal process as set forth in
Subsection 9.9(f) hereof, and that the Company will pay all of the expenses associated with the
appraisal process.




(c) Without the prior approval of both Members, the Company shall not elect to be treated as
other than a partnership for federal, state and local tax purposes.




(d) Without the prior approval of both Members, the Company shall not actively market and
hold for sale subdivided lots or condominium units.




(e) If an appraisal is required pursuant to Subsection 9.9(b) hereof, such appraisal shall be
conducted by a committee of three (3) appraisers, each of whom shall be an MAI appraiser, chosen
as follows: one (1) such appraiser shall be chosen by Duke, the second appraiser shall be chosen
by Holdings and the third appraiser shall be chosen by the two (2) appraisers chosen as aforesaid.
If either party does not select an appraiser within ten (10) days of the date of the election and
direction from the other party to so select an appraiser, then the appraiser chosen by the other
party shall be solely responsible for determining such fair market value. Each appraiser shall
make an independent appraisal, and, if there is more than one (1) appraiser, the fair market value
shall be the average of the two (2) appraisals closer in value. Each appraiser shall file its
appraisal with the Company within twenty (20) days of its being retained hereunder



ARTICLE 10




WITHDRAWAL, DISSOLUTION, LIQUIDATION, AND TERMINATION




	 	 	 
	Section 10

	 	.1Dissolution, Liquidation, and Termination Generally.
	 

	 	 






	 	 	 
	The Company shall be dissolved upon

	 	the first to occur of any of the following:







(a) The sale or disposition of all of the assets of the Company and the receipt, in cash, of
all consideration therefor;




(b) The determination of the Executive Committee to dissolve the Company; and




(c) The occurrence of any event which, as a matter of law, requires that the Company be
dissolved.



Notwithstanding the foregoing, if the Company is dissolved pursuant to Section 10.1(c) because an
event described in Section 18-801(4) of the Act occurs with respect to a Member, then the other
Member may elect to continue the Company business within 90 days after the Members have actual
notice of such event.




Section 10.2 Liquidation and Termination.



Upon dissolution of the Company, unless it is continued as provided above, the Manager shall
act as liquidator or may appoint one or more other Persons as liquidator; however, if the Company
is dissolved because of an event occurring with respect to a Member, the liquidator shall be one or
more Persons selected in writing by the other Member. The liquidator shall proceed diligently to
wind up the affairs of the Company and make final distributions as provided herein. The costs of
liquidation shall be a Company expense. Until final distribution, the liquidator shall continue to
operate the Company properties with all of the power and authority of the Manager hereunder. The
steps to be accomplished by the liquidator are as follows:




(a) as promptly as possible after dissolution and again after final liquidation, the
liquidator shall cause a proper accounting to be made by the Auditor of the Company’s assets,
liabilities, and operations through the last day of the calendar month in which the dissolution
shall occur or the final liquidation shall be completed, as applicable;




(b) the liquidator shall pay all of the debts and liabilities of the Company or otherwise
make adequate provision therefor (including the establishment of a cash escrow fund for contingent
liabilities in such amount and for such term as the liquidator may reasonably determine); and




(c) all remaining assets of the Company shall be distributed to the Members as follows:




(1) the liquidator may sell any or all Company property; and




(2) Company property shall be distributed to the Members as provided in Section 8.3.




Section 10.3 Deficit Capital Accounts.



No Member shall be required to pay to the Company, to any other Member or to any third party
any deficit balance which may exist from time to time in the Member’s Capital Account.




Section 10.4 Cancellation of Certificate.



Upon completion of the distribution of Company assets pursuant to Section 10.2(c)(2), the
Member (or such other person as the Act may require or permit) shall file a Certificate of
Cancellation with the Secretary of State of Delaware, cancel any other filings made pursuant to
Section 2.4, and take such other actions as may be necessary to terminate the existence of the
Company.



ARTICLE 11




MISCELLANEOUS PROVISIONS





Section 11.1 Notices.



Each notice, demand, request, election or other communication (a “notice”) provided
for under this Agreement shall be in writing. It shall be sent with all charges prepaid by
depositing it with the United States Postal Service or any official successor thereto, certified or
registered mail, return receipt requested, or by a nationally-recognized overnight courier service
that obtains receipts. Each notice shall be effective upon being so deposited, but the time period
in which a response to any notice must be given or any action taken with respect thereto shall
commence to run from the date of actual receipt of the notice by the addressee thereof, as
evidenced by the return receipt or courier receipt. Rejection or other refusal by the addressee to
accept or the inability to deliver because of a changed address of which no notice was given shall
be deemed to be the receipt of the notice sent. Any party shall have the right from time to time to
change the address or individual’s attention to which notices to it shall be sent and to specify up
to two additional addresses to which copies of notices to it shall be sent by giving to the other
party at least ten (10) Business Days’ prior notice thereof. The addresses of the parties are as
follow:



	 	 	 	 	 
	Duke:
	 	c/o Duke Realty Limited Partnership
	 
	 	600 East 96th Street, Suite 100
	 
	 	Indianapolis, Indiana 46240
	 
	 	Attention:  Howard L. Feinsand, Esq.
	 
	 	Telephone:  (317) 808-6119
	 
	 	FAX:  (317) 808-6790
	with a copy to:
	 	Alston & Bird LLP
	 
	 	1201 West Peachtree Street
	 
	 	Atlanta, Georgia 30309
	 
	 	Attention:  James G. Farris, Jr., Esq.
	 
	 	Telephone:  (404) 881-7896
	 
	 	FAX:  (404) 881-7777
	Holdings:
	 	c/o Grubb & Ellis Healthcare REIT, Inc.
	 
	 	1551 N. Tustin Avenue, Suite 200
	 
	 	Santa Ana, CA  92705
	 
	 	Attn: Danny Prosky, Vice President – Acquisitions and Mathieu
	 
	 	Streiff, Esq.
	 
	 	Telephone: (714)  667-8252
	 
	 	FAX: (714)  667-6816
	with a copy to:
	 	Cox, Castle & Nicholson LLP
	 
	 	2049 Century Park East, Suite 2800
	 
	 	Los Angeles, CA 90067
	 
	 	Attn:  David P. Lari, Esq.
	 
	 	Telephone: (310) 284-2240
	 
	 	Fax: (310) 277-7889







Section 11.2 Governing Law.



This Agreement and the obligations of the Members hereunder shall be construed and enforced in
accordance with the laws of the State of Delaware, excluding any conflicts of law rule or principle
which might refer such construction to the laws of another state or country. Each Member submits
to the jurisdiction of the state and federal courts in the State of Delaware.




Section 11.3 Entireties; Amendments.



This Agreement and its exhibits constitute the entire agreement between the Members relative
to the formation of the Company. Except as otherwise provided herein, no amendments to this
Agreement (or the Project LLC Agreement) shall be binding upon any Member unless set forth in a
document duly executed by such Member.




Section 11.4 Waiver.



No consent or waiver, express or implied, by any Member of any breach or default by any other
Member in the performance by the other Member of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the performance by such
other Member of the same or any other obligation hereunder. Failure on the part of any Member to
complain of any act or to declare any other Member in default, irrespective of how long such
failure continues, shall not constitute a waiver of rights hereunder.




Section 11.5 Severability.



If any provision of this Agreement or the application thereof to any Person or circumstances
shall be invalid or unenforceable to any extent, and such invalidity or unenforceability does not
destroy the basis of the bargain between the parties, then the remainder of this Agreement and the
application of such provisions to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.




Section 11.6 Ownership of Property and Right of Partition.



A Member’s interest in the Company shall be personal property for all purposes. No Member
shall have any right to partition the property owned by the Company or the Project LLC.




Section 11.7 Captions, References.



Pronouns, wherever used herein, and of whatever gender, shall include natural persons and
corporations and associations of every kind and character, and the singular shall include the
plural wherever and as often as may be appropriate. Article and Section headings are for
convenience of reference and shall not affect the construction or interpretation of this Agreement.
Whenever the terms “hereof”, “hereby”, “herein”, or words of similar import are used in this
Agreement they shall be construed as referring to this Agreement in its entirety rather than to a
particular Section or provision, unless the context specifically indicates to the contrary.
Whenever the word “including” is used herein, it shall be construed to mean including without
limitation. Any reference to a particular “Article” or a “Section” shall be construed as referring
to the indicated article or Section of this Agreement unless the context indicates to the contrary.




Section 11.8 Involvement of Members in Certain Proceedings.



Should any Member become involved in legal proceedings unrelated to the Company’s business in
which the Company is required to provide books, records, an accounting, or other information, then
such Member shall indemnify the Company from all expenses incurred in conjunction therewith.




Section 11.9 Interest.



No amount charged as interest on loans hereunder shall exceed the maximum rate from time to
time allowed by applicable law.



Section 11.10 Estoppels.



Each Member shall, upon not less than fifteen (15) days’ written notice from any other Member,
execute and deliver to such other Member a statement certifying that this Agreement is unmodified
and in full force and effect (or, if modified, the nature of the modification) and whether or not
there are, to such Member’s knowledge, any uncured defaults on the part of any other Member,
specifying such defaults if any are claimed. Any such statement may be relied upon by third
parties.



ARTICLE 12




CALL RIGHTS




Section 12.1 Holdings Call Rights.



Notwithstanding any other provision of this Agreement to the contrary, Holdings has the right
and option (the “Call’) to require Duke to sell to Holdings the entire Membership Interest
of Duke in the Company (the “Duke Interest”) in a closing to occur at any time during the
period commencing on January 1, 2010 and ending March 31, 2010 (the “Call Period”). The
Call may be exercised by Holdings providing written notice of exercise (the “Call Notice”)
given to Duke during the Call Period, but not later than January 29, 2010. The Call Notice shall
be with respect to all, and not less than all, of the Duke Interest The purchase price payable
for the Duke Interest (the “Call Purchase Price”) shall be $3,900,000.00.



Section 12.2 Closing.



Effective as of the Call Closing Date, Duke shall cease to be a Member of the Company and the
provisions of this Section 12.2 shall apply. The transfer of the Duke Interests by Duke to
Holdings pursuant to the Call shall be closed and consummated through the delivery of documents and
funds through First American Title Insurance Company or another nationally recognized title
insurance company mutually acceptable to the Members on or before 2:00 p.m., Atlanta, Georgia time
on the date set forth in the Call Notice, which closing date shall not be later than 60 days after
Duke’s receipt of the Call Notice, or on such earlier Business Day as may be mutually approved by
the Members (the “Call Closing Date”). At the closing, Holdings shall deliver to Duke (i)
the Call Purchase Price in immediately available U.S. funds, and (ii) Duke’s allocable share of
undistributed Net Cash Flow of the Company through the Call Closing Date. At such Call closing,
Holdings shall also obtain and deliver to Duke a release from any personal recourse liabilities, of
Duke (or any Affiliates of Duke that have executed and delivered guaranties, indemnities or other
recourse obligations that are not limited to the Company, including, without limitation, the Duke
Guaranty) made in connection with any loan to the Company which is not paid in full on the Call
Closing Date. Holdings’ obligations in this regard shall be a condition to Duke’s obligations
under this Article 12. Simultaneously with the receipt of the Call Purchase Price and any
applicable release, Duke shall deliver the Duke Interests to Holdings free and clear of all
transfers, encumbrances, liens, security interests and competing claims, together with customary
representations and warranties concerning Duke’s ownership of the Duke Interest, and shall deliver
to Holdings such instruments of transfer and such evidence of Duke’s existence, good standing and
due authorization and execution and delivery as Holdings shall reasonably request, but shall not be
obligated to provide any representations or warranties concerning the assets of the Company.
Holdings shall have the right to cause its nominee(s) or designee(s) to acquire the Duke Interest
at the closing but nothing herein shall relieve Holdings of its obligations hereunder. Any costs,
expenses or fees imposed by a lender to provide its consent or to release a Duke (or its
Affiliates) from personal liability related to any loan shall be paid 50% by Holdings and 50% by
Duke. At the Call Closing, the Members shall execute and deliver amendments to this Agreement and
any statement with regard to the Company filed in any public records, reflecting the withdrawal of
Duke from the Company as of the Call Closing Date.



Section 12.3 Remedies.



In the event that Duke shall have otherwise complied with the provisions of this Article 12
but Holdings shall fail to pay or cause to be paid the Call Purchase Price and take the other
actions required by Section 12.2, Duke shall have the option to pursue an action to specifically
enforce the obligations of Holdings under this Article 12. In the event that Holdings shall have
otherwise complied with the provisions of Article 12 but Duke shall fail to transfer its Membership
Interest to Holdings and take the other actions required hereby, Holdings shall have the option to
specifically enforce the obligations of Duke under this Article 12. Each Member shall pay its own
attorney’s fees and expenses incurred in connection with the transfer of the Duke Interests. In
order for either Member to pursue the specific performance of the obligations of the Members under
this Article 12, such Member shall have provided written notice to the other Member of such
Member’s breach of this Article 12 within 30 days after the Call Closing Date and if not earlier
resolved, filed an action in a court of competent jurisdiction in pursuit of such remedy within 90
days after the Call Closing Date.



ARTICLE 13




PUT RIGHTS




Section 13.1 Duke Put Rights.



Notwithstanding any other provision of this Agreement to the contrary, Duke has the right and
option (the “Put’) to require Holdings to purchase from Duke the Duke Interest in a closing
to occur at any time during the period commencing on January 1, 2011 and ending on the later to
occur of March 31, 2011 and thirty (30) days after the date the Fair Market Value of the Property
is determined in accordance with Section 13.4 hereof (the “Put Period”). The Put may be
exercised by Duke providing written notice of exercise (the “Put Notice”) given to Holdings
during the Put Period, but not later than January 31, 2011. The Put Notice shall be with respect
to all, and not less than all, of the Duke Interest. The purchase price payable for the Duke
Interest (the “Put Purchase Price”) shall be an amount in cash (U.S.) equal to the greater
of $10.00 in cash, or the amount of cash which Duke would have received on the Put Closing Date if
the Company had sold the Property to a third party in an all cash transaction, for an amount equal
to Fair Market Value of the Property determined in the manner set forth in Section 13.4 below and
the Capital Proceeds from such deemed sale transaction had been distributed pursuant to Section 8.3
hereof. The determination of the Put Purchase Price shall include, without limitation, all
adjustments and expenses of sale that would be have actually been incurred in connection with such
deemed sale transaction, which the Members hereby agree shall be equal to the Imputed Closing
Costs; provided, however, that the Put Purchase Price shall not include real estate closing
prorations, which shall be separately adjusted between the Duke and Holdings pursuant to Section
13.3 hereof. Holdings shall pay the amount payable to Duke to the Company by wire transfer of
immediately available U.S. funds, which amount shall be distributed immediately to the Duke in
liquidation of its Membership Interest.



Section 13.2 Closing.



Effective as of the Put Closing Date, Duke shall cease to be a Member of the Company and the
provisions of this Section 13.2 shall apply. At such Put closing, Holdings shall also obtain and
deliver to Duke a release from any personal recourse liabilities, of Duke (or any Affiliates of
Duke that have executed and delivered guaranties, indemnities or other recourse obligations that
are not limited to the Company, including, without limitation, the Duke Guaranty) made in
connection with any loan to the Company which is not paid in full on the Put Closing Date.
Holdings’ obligations in this regard shall be a condition to Duke’s obligations under this Article
13.



The Put closing shall take place on the date through delivery of documents and funds through
First American Title Insurance Company or another nationally recognized title insurance company
mutually acceptable to the Members on or before 2:00 p.m., Atlanta, Georgia time on the date set
forth in the Put Notices, but not later than the last day of the Put Period (the “Put Closing
Date”). At the Put closing, the Members shall execute and deliver amendments to this Agreement
and any statement with regard to the Company filed in any public records, reflecting the withdrawal
of Duke from the Company as of the Put Closing Date.



Section 13.3 Remedies.



Duke shall provide customary representations warranties and covenants as to (i) its ownership
of its Membership Interest in the Company free and clear of any transfers or encumbrances of any
nature and (ii) the existence, good standing and authority of Duke to convey its Membership
Interest in the Company to Holdings, but shall not be obligated to provide any representations or
warranties concerning the assets of the Company. In addition, traditional real estate closing
prorations shall be made, and the Put Purchase Price payable to Duke shall be increased or
decreased by the net amount thereof due to or from Duke. In the event that the Duke shall have
otherwise complied with the provisions of this Article 13 but Holdings shall fail to pay (or cause
to be paid by the Company) the full amount of the Put Purchase Price to Duke by the Put Closing
Date, then Duke shall have the option to pursue and action to specifically enforce the obligations
of Holdings under this Article 13. In the event that Holdings shall have otherwise complied with
the provisions of Article 13 but Duke shall fail to transfer its Membership Interest to Holdings
and take the other actions required hereby, Holdings shall have the option to specifically enforce
the obligations of Duke under this Article 13. In order for either Member to pursue the specific
performance of the obligations of the Members under this Article 13, such Member shall have
provided written notice to the other Member of such Member’s breach of this Article 13 within 30
days after the Put Closing Date and if not earlier resolved, filed an action in a court of
competent jurisdiction in pursuit of such remedy within 90 days after the Put Closing Date.



Each Member shall pay its own attorney’s fees and expenses incurred in connection with the Put
procedure. Any costs, expenses or fees imposed by a lender to provide its consent or to release a
Duke (or its Affiliates) from personal liability related to any loan shall be paid 50% by Holdings
and 50% by Duke.




Section 13.4 Fair Market Value.



For the purposes of this Article 13, the Fair Market Value of the Property shall be determined
by the unamimous consent of the Executive Committee, or, in the event unanimous consent is not
reached, by a committee of appraisers, each of whom shall be an MAI appraiser, chosen as follows:
Within ten (10) days after the date of Holdings’ receipt of the Put Notice one (1) such appraiser
shall be chosen by Duke and a second appraiser shall be chosen by Holdings. If either party does
not select an appraiser within said ten (10) day period, then the appraiser chosen by the other
party shall be solely responsible for determining such Fair Market Value. Each appraiser shall
make an independent appraisal, and, if there is more than one (1) appraiser, the fair market value
shall be the average of the two (2) appraisals if the higher appraisal is in an amount which is
less than 105% of the amount of the lower appraisal. If the amounts of the higher appraisal is in
an amount which is greater than 105% of the amount of the lower appraisal, then a third appraiser
shall be chosen by the two (2) appraisers initially chosen (such selection to be made within ten
(10) days of the date it is determined that the first two appraisals are not close enough to
average) and the appraisal of such third appraiser shall determine the Fair Market Value of the
Property. Each appraiser shall file its appraisal with the Company within twenty (20) days of its
being retained hereunder.



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[Remainder of page intentionally left blank]




IN WITNESS WHEREOF, the duly authorized representatives of the Members have executed this
Agreement as of the date first above written.



	 	 	 
	MEMBERS:

	 	DUKE
	
 
	 	 
	
 
	 	BD ST. LOUIS DEVELOPMENT, LLC, an Indiana limited liability company
	
 
	 	By: DUKE REALTY LIMITED PARTNERSHIP,

an Indiana limited partnership







	 	 	 	By:
DUKE REALTY CORPORATION, an Indiana corporation,
General Partner






By /s/ Jason F. Sturman

Jason Sturman, Vice President





Taxpayer Identification Number: 35-1898425



[Signatures continued on following page]






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HOLDINGS:


GRUBB & ELLIS HEALTHCARE REIT HOLDINGS, L.P.,


a Delaware limited partnership




BY: GRUBB & ELLIS HEALTHCARE REIT, INC., a Maryland
corporation, its General Partner




By: /s/ Shannon K S Johnson

Name: Shannon K S Johnson

Title: Chief Financial Officer





Taxpayer Identification Number: 20-4738347




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