EX-10.2






12/18/07




CONTRIBUTION AGREEMENT




(St. Johns Mercy Rehabilitation Hospital)




THIS CONTRIBUTION AGREEMENT made as of this 19th day of December, 2007
(“Agreement Date”), by and among BD ST. LOUIS DEVELOPMENT, LLC, an Indiana limited liability
company (“Duke”), GRUBB & ELLIS HEALTHCARE REIT HOLDINGS, L.P., a Delaware limited partnership
(“Holdings”), and G&E HEALTHCARE REIT/DUKE CHESTERFIELD REHAB, LLC, a Delaware limited liability
company (the “Company”).



W I T N E S S E T H

T H A T:




WHEREAS, Duke is the owner of the land described on Exhibit A attached hereto
comprising approximately 7.114 acres located in Chesterfield, Missouri (the “Land”) together with
the improvements on the Land and certain other rights described herein; and



WHEREAS, on or about the date hereof Duke and Holdings entered into the Limited Liability
Company Agreement of the Company the form of which is attached hereto as Exhibit C (the
"Operating Agreement”), as the sole members of the Company, with Holdings owning eighty percent
(80%) of the membership interests of the Company and Duke owning twenty percent (20%) of the
membership interests of the Company;



WHEREAS, in accordance with the Operating Agreement and this Agreement, Duke will contribute,
or cause to be contributed on its behalf, the Property to the Company on the Closing Date (as
hereinafter defined), in respect of Duke’s membership interest the Company (the “Duke Capital
Contribution”) and Holdings will contribute cash in the amount of the Holdings Capital Contribution
(as herein defined) in respect of Holdings’ membership interest the Company;



WHEREAS, Holdings and Duke acknowledge and agree that subject to Section 2.2 hereof,
the Property at Closing, shall have an agreed value (“Agreed Value”) of THIRTY-SIX MILLION FOUR
HUNDRED FORTY THOUSAND AND NO/100 DOLLARS ($36,440,000.00); and



WHEREAS, capitalized terms used and not otherwise used herein shall have the meaning ascribed
to them in the Operating Agreement.



NOW, THEREFORE, in consideration of Ten Dollars ($10.00), the Earnest Money, the mutual
covenants 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:



Section 1. Definitions and Exhibits.



1.1 Definitions. For purposes of this Agreement, each of the following
terms, when used herein with an initial capital letter, shall have the meaning ascribed to it as
follows:



Agreement. This Contribution Agreement.



Appurtenances. All rights, privileges and easements appurtenant to the Land,
including, without limitation, all of Duke’s right, title and interest, if any, in minerals, oil,
gas and other hydrocarbon substances on the Land, as well as all development rights, air rights,
water rights and water stock owned by Duke relating to the Land, and any easements, rights of way
or other appurtenances of Duke used in connection with the beneficial use and enjoyment of the
Land.



Assignment. An Assignment and Assumption Agreement substantially in the form attached
hereto as Exhibit G.



Building. The building located on the Land with a street address of 14561 N. Outer
Forty Road, Chesterfield, Missouri.



Business Day. Any day, other than a Saturday or Sunday, on which commercial banks in
the State of New York are open for business.



Closing. The closing and consummation of the contribution to the Company of the
Property and the Holdings Capital Contribution pursuant hereto.



Closing Date. December 18, 2007.



Closing Statement. As defined in Section 4.4.



Commencement Agreement. That certain Commencement Agreement by and between Duke and
Tenant dated December 12, 2007.



Confidentiality Agreement. That certain Confidentiality Agreement executed by
Holdings in favor of Duke dated as of September 27, 2007.



Construction Warranty. As defined in Section 7.5.



Contract Date. The date upon which this Agreement shall be deemed effective, which
shall be the date first above written.



Contracts. All assignable equipment leases, service, utility, supply, maintenance,
and concession contracts, agreements and other continuing contractual obligations affecting the
use, operation, maintenance, development and repair of the Real Property or the Personal Property
to which Duke is a party, and which shall extend beyond the date of Closing, if any, and which
Holdings elects that the Company shall assume.



Deed. The Special Warranty Deed to be delivered to the Company or a wholly-owned
subsidiary of the Company by Duke at Closing substantially in the form attached hereto as
Exhibit F.



Delinquent Rents. As defined in Section 4.2.1(ii).



Duke Deliveries. The initial due diligence items as described in Section 8 and
Exhibit A of the Letter of Intent.



Earnest Money. ONE MILLION AND NO/100 DOLLARS ($1,000,000.00), together with all
interest earned thereon.



Escrow Agent and Title Insurer, respectively, shall mean First American Title
Insurance Company, whose address is 30 North LaSalle Street, Suite 310, Chicago, Illinois 60602.



Existing Survey. That certain survey prepared by Stock & Associates, last revised
September 12, 2007, Job Number 204-3400.6, which has previously been delivered to Holdings.



Guaranty That certain Guaranty of Lease dated May 1, 2007 by St. John’s Mercy Health
System and Centerre Healthcare Corporation as “Guarantors”.



Improvements. The Building and any other buildings, structures and improvements
located upon the Land, including Duke’s interest, if any, in all systems, facilities, fixtures,
machinery, equipment and conduits to provide fire protection, security, heat, exhaust, ventilation,
air conditioning, electrical power, light, plumbing, refrigeration, gas, sewer and water thereto
(including all replacements or additions thereto between the date hereof and the Closing Date).



Initial Capital Account. The cash amount or Agreed Value of capital contributions
made to the Company by Duke and Holdings pursuant to Section 2 less the amount of cash
distributions made to Duke by the Company or directly from Loan proceeds pursuant to Section 2



Inspection Date. December 12, 2007.



Intangible Property. All intangible personal property now or hereafter owned by Duke
and used in the ownership, use, operation, occupancy, maintenance or development of the Property,
including, without limitation (i) all licenses, permits, certificates, approvals, authorizations
and other entitlements issued (the “Permits”); (ii) all reports, test results,
environmental assessments, surveys, plans, specifications (the “Plans”); (iii) all
warranties and guaranties from manufacturers, contractors, subcontractors, suppliers and
installers; (iv) all trade names, trademarks, service marks, building and property names and
building signs used in connection with the Real Property, excluding the name “Duke” or “Bremner”;
(v) all telephone numbers, domain names, e-mail addresses and other means of contact utilized in
connection with the Real Property; and (vi) all other intangible property related to the Real
Property (collectively the “Intangible Property”).



Lease. That certain St. John’s Mercy Rehabilitation Hospital Lease Agreement dated
May 1, 2006 by and between Duke and Tenant, as modified by the Commencement Agreement, together
with all associated amendments, modifications, extensions or supplements thereto.



Letter of Intent. That certain letter of intent between Duke and Holdings dated
November 15, 2007.



Loan. As defined in Section 2.1.



New Escrow Agreement. An escrow agreement among Duke, Holdings and Escrow Agent
referred to in Section 3 hereof substantially in the form attached hereto as Exhibit
B and by this reference made a part hereof.



Original Escrow Agreement. That certain Escrow Agreement by and between Duke,
Holdings and Escrow Agent, dated November 16, 2007.



Permitted Title Exceptions. (i) All presently existing and future liens of unpaid
taxes or assessments, water rates, water charges and sewer taxes, rents and charges, if any, not
yet due and payable, (ii) all those matters specifically set forth on the Title Commitment which
Holdings does not object or which Holdings waives pursuant to Section 5.1 of this
Agreement; (iii) the rights of Tenant, as tenant only; and (iv) any matters created or caused by
Holdings.



Personal Property. Duke’s interest in tangible personal property located on the
Property and used in connection with operation and maintenance of the Improvements, if any.



Property. All of Duke’s right, title and interest in, to and under the following
property: (i) the Land; (ii) the Appurtenances; (iii) the Improvements; (iv) the Personal Property;
(v) the Lease, together with all deposits held in connection with the Lease, including, without
limitation, all security deposits (if any), prepaid rent, guaranties, letters of credit and other
similar charges and credit enhancements providing additional security for the Lease (if any),
including without limitation, the Guaranty; (vi) the Contracts (if any); and (vii) the Intangible
Property.



Property Management Agreement. A property management agreement between the Company
and Holdings in a form reasonably acceptable to Duke and Holdings pursuant to which the Company
shall pay Holdings a property management fee equal to one percent (1%) of the net Rent.



Real Property. The Land, Appurtenances and Improvements.



Rent. The “Rent” as defined in the Lease.



SNDA. The subordination, non-disturbance and attornment agreement executed by Tenant
substantially in the form attached hereto as Exhibit J.



Survey. The Existing Survey and any updates of the Existing Survey or new survey of
the Property that Holdings elects to obtain.



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



Tenant Estoppel Certificate. An estoppel certificate executed by Tenant substantially
in the form attached hereto as Exhibit H.



Title Commitment. Title commitment(s) issued to the Company by the Title Insurer for
an owner’s policy of title insurance (in the form most recently adopted by ALTA) in the amount of
the Agreed Value, covering title to the Property.



Holdings Capital Contribution. As defined in Section 2 hereof.



1.2 Exhibits. Attached hereto and forming an integral part of this
Agreement are the following exhibits, all of which are incorporated into this Agreement as fully as
if the contents thereof were set out in full herein at each point of reference thereto:



	 	 	 
	Exhibit A -

Exhibit B -

Exhibit C -

Exhibit D -

Exhibit E -

Exhibit F -

Exhibit G -

Exhibit H -

Exhibit I -

Exhibit J -

	 	Description of Land

New Escrow Agreement

Operating Agreement

Disclosure Schedule

Form of Deed

Non-Foreign Certificate

Assignment and Assumption Agreement

Form of Tenant Estoppel Certificate

Form of Audit Letter

Form of SNDA






Section 2. Capital Contributions and Distributions. In accordance with the
provisions of this Agreement and the Operating Agreement, at Closing (i) Duke will contribute the
Property to the Company, (ii) Holdings will contribute cash to the Company in the amount of
$11,552,000, which is equal to eighty percent (80%) of the difference between the Agreed Value and
the principal amount of the Loan (the “Holdings Capital Contribution”). Twenty percent of the
principal amount of the Loan in the amount of $4,400,000 shall be disbursed directly from
the Lender or the title company to Duke and the Company will receive the remaining net proceeds
from the Loan. Immediately thereafter, the Company will make a cash distribution to Duke in the
amount of $29,152,000, as reimbursement for a portion of the capital expenditures incurred in
developing the Property, so that Duke’s Initial Capital Account shall equal twenty percent (20%) of
the total Initial Capital Account, and eighty percent of Holdings Initial Capital Account shall
equal eighty percent (80%) of the total Initial Capital Account.



2.1 Loan. Concurrently with Closing and in accordance with the terms of the
Operating Agreement, the Company shall obtain debt financing of approximately 60% of the Agreed
Value (the “Loan”).



Section 3. Earnest Money.



3.1 Earnest Money. Holdings has deposited with Escrow Agent, the Earnest
Money, which is being held pursuant to the terms of the Original Escrow Agreement. On the Contract
Date, Duke, Holdings and Escrow Agent shall execute the New Escrow Agreement. Upon delivery of the
New Escrow Agreement, the Original Escrow Agreement shall be of no further force and effect and
shall replaced in its entirety by the New Escrow Agreement. All Earnest Money, together with any
interest or other income earned thereon, shall be held, invested and disbursed pursuant to the New
Escrow Agreement.



3.2 Disbursement. In the event the Property is contributed to the Company
by Duke, the Earnest Money shall be applied at Closing as part of the Holdings Capital Contribution



unless otherwise disbursed pursuant to this Agreement. Whenever the Earnest Money is by the terms
hereof to be disbursed by Escrow Agent, Duke and Holdings agree promptly to execute and deliver
such notice or notices as shall be reasonably necessary to authorize Escrow Agent to make such
disbursement.



Section 4. Prorations and Adjustments. At the Closing, Holdings and Duke
shall prorate all items of income and expense relating to the Property based upon Holdings’ and
Duke’s respective interests in the Company and periods of ownership for the calendar year in which
the Closing occurs on a cash basis (i.e. based solely upon amounts payable in the year in which
Closing occurs regardless of when they accrue), with the Company treated as the owner of the
Property on the Closing Date, including, without limitation:



4.1 Rent.



4.1.1 Closing. Except as provided in subparagraph (ii) below, Duke shall
pay or credit to the Company (with respect to periods from and after the Closing Date), if, as and
when the same shall be received: (A) all Rent paid by Tenant under the Lease for the calendar
month in which the Closing occurs, prorated for the number of days during such calendar month from,
including and after the Closing, and (B) all prepaid and overpaid Rent of Tenant under the Lease.



4.1.2 Post-Closing. After Closing, Holdings, as Managing Member of the
Company shall make diligent good faith efforts to collect all unpaid Rent for any period prior to
the Closing, provided that Holdings shall have no obligation to institute litigation or terminate
the Lease in connection with any such collections. Any Rent due and owing Duke before the Closing
Date by Tenant under the Lease that is unpaid at the Closing, is herein called “Delinquent Rent”.
There shall be no cash credit to Duke at Closing on account of any Delinquent Rent, but following
Closing, rental and other payments received by the Company, Holdings or Duke from Tenant shall be
first applied toward payment of the Rent for the month in which the Closing occurs, then to any
Rent due to the Company after the Closing and finally toward the payment of Delinquent Rent.
Company shall reasonably cooperate with Duke in any collection of Delinquent Rent.



4.1.3 Tenant Improvements and Leasing Commissions. At or prior to Closing,
Duke shall pay any leasing commissions and tenant improvement costs due and payable on or before
the Closing Date, if any.



4.2 Real Estate Taxes. At or prior to Closing, Duke shall pay all 2007
real estate taxes that are due and payable. The amount of $169,822.00 paid by Duke for 2007 real
estate taxes is not capitalized as Rent and shall be reimbursed directly to Duke by Tenant and
treated as Delinquent Rent.



4.3 Leasing Commissions. At or prior to Closing, Duke shall pay any leasing
commissions due and payable on or before the Closing Date. The Company shall pay any leasing
commissions due and payable in connection with any expansion or renewal after the Closing Date.



4.4 Miscellaneous Prepaid Items. Any prepaid items, including, without
limitation, fees for licenses which are transferred to the Company at the Closing and annual permit
and inspection fees will be prorated as of the Closing Date.



4.5 Closing Statement. Duke shall prepare and deliver to Holdings no later
than three (3) Business Days prior to the Closing Date an estimated closing statement which shall
set forth all costs payable, and the prorations and credits provided for in this Agreement and to
the extent Duke does not timely deliver the estimated closing statement to Holdings, Holdings shall
have the right, but not the obligation, to extend the Closing Date by the number of days Duke is
delinquent in delivering such estimated closing statement to Holdings. Any item which cannot be
finally prorated because of the unavailability of information shall be tentatively prorated on the
basis of the best data then available and adjusted when the information is available in accordance
with this subsection. Holdings shall notify Duke within two (2) days after its receipt of such
estimated closing statement of any items which Holdings disputes, and the parties shall attempt in
good faith to reconcile any differences not later than one (1) day before the Closing Date. The
estimated closing statement as adjusted as aforesaid and approved in writing by the parties (which
shall not be withheld if prepared in accordance with this Agreement) shall be referred to herein as
the “Closing Statement”. If the prorations and credits made under the Closing Statement shall
prove to be incorrect or incomplete for any reason, then either party shall be entitled to an
adjustment to correct the same; provided, however, that any adjustment shall be made, if at all,
within sixty (60) days after the Closing Date (except with respect to taxes, in which case such
adjustment shall be made within thirty (30) days after the information necessary to perform such
adjustment is available), and if a party fails to request an adjustment to the Closing Statement by
a written notice delivered to the other party within the applicable period set forth above (such
notice to specify in reasonable detail the items within the Closing Statement that such party
desires to adjust and the reasons for such adjustment), then the prorations and credits set forth
in the Closing Statement shall be binding and conclusive against such party.



4.6 Items Not Prorated. Duke and Holdings agree that (a) on the Closing
Date, the Property will not be subject to any financing, except the Loan; and (b) none of the
insurance policies relating to the Property will be assigned to the Company and the Company shall
be responsible for arranging for its own insurance as of the Closing Date.



4.7 Closing Costs. Holdings and Duke shall share the following costs and
expenses in accordance with their Percentage Interests: the cost of any updates to the Existing
Survey, the cost of owner’s and lender’s title insurance policies and all title policy endorsements
(whether for owner’s or lender’s policies), all escrow or closing agent charges, all costs
associated with the recording of the Deed and any documents related to the Loan, costs and expenses
incurred in connection with the Loan, and all transfer taxes, if any. Holdings shall pay all costs
of Holdings’ due diligence. Each party shall pay its own attorneys (except for those fees
associated with the Loan negotiation which will be a Company expense). The obligations of the
parties to pay the foregoing costs and expenses shall survive the termination of this Agreement.



	 	 	 
	4.8Survival. The provisions of this Section 4 shall survive the Closing.

	 

	Section 5.

	 	Title and Survey
	
 
	 	 






5.1 Duke will cause Title Insurer to issue an Extended Coverage ALTA Owner’s Policy
of Title Insurance (the “Title Policy”) for and on behalf of Company in the total amount of
the Agreed Value and obtainable at standard rates insuring title in and to the Real Property.
Holdings hereby acknowledges that Duke has heretofore delivered the Existing Survey and the Title
Commitment to Holdings. Holdings shall have until the Inspection Date (the “Title Review Period”)
to (a) examine title to the Property and the updated Survey, (ii) determine whether Holdings will
be able to obtain any endorsements it desires on behalf of the Company and (iii) to give written
notice to Duke of any objections that Holdings may have to title or the Survey (the “Title
Objection Notice”), provided Holdings shall have no right to object to any matters of title which
constitute Permitted Title Exceptions. If Holdings shall fail to timely deliver the Title
Objection Notice, Holdings shall be deemed to have waived such right to object to any title
exceptions or other conditions or matters which are shown on the Survey. If Holdings does timely
deliver the Title Objection Notice to Duke, Duke shall elect, by written notice delivered to
Holdings within three (3) Business Days following Duke’s receipt of the Title Objection Notice (the
"Cure Response Period”) to either endeavor to cure or satisfy any particular objection(s) at or
prior to Closing or not to so cure or satisfy any particular title objection(s) (the “Title
Response Notice”). To the extent Duke shall fail to deliver the Title Response Notice to Holdings
prior to the expiration of the Cure Response Period or shall elect not cure any particular title
objection(s) by Closing, then Holdings may elect, by written notice to Duke within the earlier of
(x) five (5) Business Days after delivery of the Title Response Notice or (y) the expiration of the
Cure Response Period, either to (a) terminate this Agreement, in which case the Earnest Money shall
be returned to Holdings by Escrow Agent and the parties shall have no further rights or obligations
hereunder, except for those which expressly survive any such termination, or (b) waive its
objections hereunder and proceed with the transaction pursuant to the remaining terms and
conditions of this Agreement, without any reduction in the amount of the Holdings Capital
Contribution. Duke shall not be required to cure any matter objected to by Holdings. If Holdings
fails to so give Duke notice of its election within the timeframe required therefor, Holdings shall
be deemed to have elected the option contained in subpart (b) above. Holdings shall have the right
at any time to waive any objections that it may have made and, thereby, to preserve this Agreement
in full force and effect.



Notwithstanding anything to the contrary contained herein, Duke agrees to discharge by payment
prior to Closing, at Duke’s expense, any mortgages or loan documents that were voluntarily created
or assumed by Duke (excluding those related to the Loan), or undisputed liens for construction work
contracted for directly by Duke, which are recorded against the Property (“Duke’s Liens”). Duke,
at Duke’s expense, shall be obligated at Closing to discharge by payment or alternative manner
reasonably satisfactory to the Title Insurer and Holdings (including, without limitation, statutory
bonding and affirmative title coverage) liens recorded against the Property for construction work
not contracted for directly by Duke or disputed in good faith by Duke (“Non-Duke Liens”). In the
event Duke fails to release or cure Duke’s Liens or Non-Duke Liens, Holdings shall have the right
to terminate this Agreement and receive a return of the Earnest Money.



The foregoing procedures for making and responding to objections to title exceptions and
survey matters shall also apply with respect to any objections to title exceptions (other than
Permitted Title Exceptions) which first appear on updates of the Title Commitment received by
Holdings after the date of the Title Objection Notice (and Holdings shall provide Duke with copies
of any updated Title Commitments and Schedule B items first shown in such updated commitments) or
any survey matters that did not exist as of the date of the Title Objection Notice (other than
Permitted Title Exceptions), except that all such objections must be made on or before the
earlier of five (5) Business Days after Holdings becomes aware of such title exceptions or survey
matters or the Closing Date, and all agreements to cure and termination rights relating thereto
must be made or exercised, as applicable, on or before the earlier of the time periods provided in
the previous paragraph or the Closing Date.



5.2 Payment of Contractors. Subject to the terms of Section 5.1 hereof, all
contractors, subcontractors, suppliers, consultants, architects, engineers and others with whom
Duke has directly contracted (as opposed to such parties contracted by Tenant or a third-party) and
who have performed services or labor or have supplied materials in connection with Duke’s
acquisition, development, or construction of the Real Property, shall have been paid in full and
all liens arising therefrom shall have been bonded over or satisfied and released at or before
Closing, and to the extent such costs and expenses are not due and payable at Closing, Duke shall
promptly pay all such costs and expenses after Closing when due. This Section 5.2 shall survive
Closing.



Section 6. Holdings’ Inspection.



6.1 Document Inspection. Holdings and Duke acknowledge that Holdings shall
review and inspect the Duke Deliveries and any other documents provided or made available by Duke
or obtained by Holdings. Except as otherwise expressly provided herein, Duke makes no
representation or warranty as to the truth, accuracy or completeness of the Duke Deliveries or any
other studies, documents, reports or other information provided to Holdings by Duke.



6.2 Physical Inspection. Subject to the Lease, any restrictions of record
and applicable laws, Holdings and its agents shall have the right, from time to time prior to the
Inspection Date during normal business hours, to enter upon the Property to examine the same and
the condition thereof, and to conduct such surveys and to make such engineering and other
inspections, tests and studies as Holdings shall determine to be reasonably necessary, all at
Holdings’ sole cost and expense, including, without limitation, a Phase I environmental report and
a roof survey and report. Notwithstanding the foregoing, Holdings shall not conduct or allow any
physically intrusive testing of, on or under the Property. Holdings agrees to give Duke reasonable
advance verbal notice of such examinations or surveys and to conduct all examinations and surveys
of the Property in accordance with all applicable laws and in a manner that will not interfere with
the operations the Tenant thereon and will not harm or damage the Property or cause any claim
adverse to Duke or Tenant, and agrees to repair or restore the Property to its condition prior to
any such examinations or surveys immediately after conducting the same. Holdings shall not contact
Tenant concerning the Property without Duke’s prior consent, and Duke shall have the right to be
present during any such contacts. Holdings hereby indemnifies and holds Duke and any agent,
advisor, representative, affiliate, employee, director, partner, member, beneficiary, investor,
servant, shareholder, subsidiary, trustee or other person or entity acting on Duke’s behalf or
otherwise related to or affiliated with Duke (collectively, “Duke Related Parties”) harmless from
and against any claims, suits, losses, costs, expenses (including without limitation court costs
and attorneys’ fees), liabilities, judgments and damages (collectively, “Claims”), incurred by Duke
as a result of any inspection performed by Holdings, except for Claims against Duke based upon any
obligations and liabilities of Duke, which indemnity shall survive the Closing and any termination
of this Agreement. Prior to, and as a condition to any entry on the Property by Holdings or its
agents for the purposes set forth in this Section 6.2, Holdings shall deliver to Duke a
certificate of insurance evidencing comprehensive general liability coverage (including coverage
for contractual indemnities) with a combined single limit of at least $2,000,000.00 and excess
umbrella coverage for bodily injury and property damage in the amount of $5,000,000.00, in a form
reasonably acceptable to Duke, covering any activity, accident or damage arising in connection with
Holdings or agents of Holdings on the Property, and naming Duke, as an additional insured.
Holdings shall provide a copy of any written inspection, test, report or summary to Duke promptly
upon Holdings’ receipt thereof.



6.3 Formal Inspection Period. Holdings’ obligation to close under this
Agreement is subject to and conditioned upon Holdings’ investigation and study of and satisfaction
with the Property as set forth in this Section 6. Holdings shall have until 5:00 p.m.
E.S.T. on the Inspection Date in which to make such investigations and studies with respect to the
Property as Holdings deems appropriate and to terminate this Agreement, by written notice delivered
to Duke, if Holdings is not, for any reason, satisfied with the Property, in which case the Earnest
Money shall be returned to Holdings and neither party shall have any further obligations hereunder
except for those obligations of Holdings set forth in Sections 6.2 and 6.4. If
Holdings fails to deliver written notice to Duke of its election to terminate this Agreement on or
before 5:00 p.m. E.S.T. on the Inspection Date, then this Agreement shall be deemed to have been
terminated by Holdings, the Earnest Money shall be returned to Holdings and neither party shall
have any further obligations hereunder, except as expressly survive termination of this Agreement.



6.4 Confidentiality. Holdings and its representatives shall hold in
confidence all data and information relating to the Property, Duke or its business, whether
obtained before or after the execution and delivery of this Agreement pursuant to the
Confidentiality Agreement, which is incorporated herein and which Holdings hereby reaffirms. In
the event of a breach by Holdings or its representatives of this Section 6.4, Duke shall
be entitled to all remedies set forth in the Confidentiality Agreement. Nothing in this Agreement
shall be construed as prohibiting Duke from pursuing any other available remedy at law or in equity
for such breach of the Confidentiality Agreement. The provisions of this Section 6.4 shall
survive the Closing and any termination of this Agreement.



Section 7. Representations and Warranties.



7.1 Duke’s Representations. As of the Contract Date, Duke hereby represents
and warrants to Holdings that the following statements are true except as may otherwise be
disclosed on Exhibit D:



7.1.1 Lease. The entirety of the Property is demised to Tenant pursuant to
the Lease. A complete copy of the Lease has been furnished by Duke to Holdings, and the copies so
provided are true and complete. There are no options or rights to renew, extend or terminate the
Lease or expand any Lease premises, except as shown in the Lease. The Lease has not been amended,
modified or terminated (except as may be disclosed to Holdings in the Estoppel Certificate). Duke
represents and warrants that (i) to Duke’s knowledge, the Lease and the Guaranty are presently in
full force and effect without any default on the part of Duke, the Tenant or guarantor thereunder;
(ii) all tenant improvements that Duke, as landlord, is obligated to complete prior to the Contract
Date pursuant to the Lease have been completed and accepted by Tenant; and (iii) Duke has neither
given nor received any written notice of any default by Duke or Tenant pursuant to the Lease that
remains uncured. Subject to any adjustments required by the Commencement Agreement, no rent and no
other payments have been collected in advance for more than one(1) month and no rents or other
deposits are held by Duke, except the rent for the current month.



7.1.2 Agreements. Duke has not entered into any management agreement,
agreement for provision of services or supplies, protective covenants, easements, or other contract
or agreement which will be binding on Holdings, the Company or the Property after the Closing,
except the Lease, and matters of record.



7.1.3 Unrecorded Rights. Duke has not entered into any unrecorded agreement
granting a third party any lease, option to purchase, right of first refusal or any other similar
right, which grants a third party the right to purchase, transfer, lease or occupy all or any
portion of the Real Property, except as contained in the Lease. Duke has delivered written notice
to Tenant in accordance with the requirements of Section 32(a) of the Lease in connection with the
transaction contemplated herein, and Duke has not received any written response to such notice from
Tenant.



7.1.4 No Litigation. There are no actual or pending material litigation,
suit, action or proceeding, or to Duke’s knowledge, threatened, at law or in equity, by any
organization, person, individual or federal or state governmental agency against Duke or against
the Property as of the Contract Date.



7.1.5 Authority. Duke is a duly organized and validly formed limited
liability company under the laws of the State of Indiana, is qualified to do business in state in
which the Property is located and is not subject to any involuntary proceeding for dissolution or
liquidation thereof. Subject to Section 9.2(a) hereof, Duke has full power and authority to enter
into this Agreement, to perform this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and all documents contemplated
hereby by Duke have been duly and validly authorized by all necessary action on the part of Duke
and all required consents and approvals have been duly obtained and will not result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture, agreement or
instrument to which Duke is a party or otherwise bound. This Agreement is a legal, valid and
binding obligation of Duke, enforceable against Duke in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other
similar laws affecting the rights of creditors generally.



7.1.6 Non-Foreign Status. Duke is not a “foreign person” as that term is
defined in Section 1445 of the Internal Revenue Code of 1986, as amended and the Regulations
promulgated pursuant thereto.



7.1.7 Authority of Signatories; No Breach of Other Agreements, etc. The
execution, delivery of and performance under this Agreement are pursuant to authority validly and
duly conferred upon Duke and the signatories hereto. The consummation of the transaction herein
contemplated and the compliance by Duke with the terms of this Agreement do not conflict with, or
result in a breach of, the terms, conditions or provisions of, or constitute a default under, any
agreement, arrangement, understanding, accord, document or instrument by which Duke is bound.



7.1.8 Employees. There are no on-site employees of Duke at the Real
Property, and following the Closing, Holdings shall have no obligation to employ or continue to
employ any individual employed by Duke or its affiliates in connection with the Real Property.



7.1.9 Environmental. Except as expressly set forth in the Duke
Deliverables, Duke has not received any written notice from any governmental or quasi-governmental
authority of any violations of any applicable federal, state or local laws, statutes, rules,
regulations, ordinances, orders or requirements (collectively, “Laws”) noted or issued by any
governmental authority having jurisdiction over or affecting the Real Property, including, without
limitation, Laws relating to “Hazardous Materials”. For purposes of this Agreement, “Hazardous
Materials” are substances defined as: “toxic substances,” “toxic materials,” “hazardous waste,”
“hazardous substances,” “pollutants,” or “contaminants” [as those terms are defined in the
Resource, Conservation and Recovery Act of 1976, as amended (42 U.S.C. § 6901 et. seq.), the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C.
§ 9601 et. seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. § 1801 et.
seq.), the Toxic Substances Control Act of 1976, as amended (15 U.S.C. § 2601 et. seq.), the Clean
Air Act, as amended (42 U.S.C. § 1251 et. seq.) and any other federal, state or local law, statute,
ordinance, rule, regulation, code, order, approval, policy and authorization relating to health,
safety or the environment]; asbestos or asbestos-containing materials; lead or lead-containing
materials; oils; petroleum-derived compounds; pesticides; or polychlorinated biphenyls. No part of
the Real Property has been previously used by Duke, or to the knowledge of Duke, by any other
person or entity, for the storage, manufacture or disposal of Hazardous Materials, except as may be
disclosed in the Duke Deliverables and except any storage, manufacture or disposal of Hazardous
Materials in connection with Tenant’s use of the Property. Except as set forth in the Duke
Deliverables, to the knowledge of Duke, there are no underground storage tanks of any nature
located on any of the Real Property.



7.1.10 Violations. Duke has no knowledge of, and has not received any
written notice of, any uncured violation of any zoning, building, fire, or any other statute,
ordinance, rule, regulation or order applicable to the Property, or any part thereof, or any
covenants, restrictions or CCRs encumbering the Property, that will not have been corrected prior
to Closing. Duke has not received written notice  from any governmental or quasi-governmental
authority of any violation relating to any permit or license required to continue the present
use of the Real Property that remains uncured.



7.1.11 Seller Deliveries. To Duke’s knowledge, the Duke Deliveries made
available to Holdings pursuant to this Agreement are, except as expressly otherwise disclosed in
writing by Duke prior to the Inspection Date, complete copies of the Duke Deliveries, in all
material respects; provided, however, that such materiality qualifier shall not apply to the Lease
and the Guaranty. While Duke does not warrant the accuracy of the information set forth in those
of the Duke Deliveries actually prepared by Duke, Duke hereby represents and warrants to Holdings
that (a) Duke has no actual knowledge of any inaccuracies in those particular Duke Deliveries and
all of the Duke Deliveries actually prepared by Duke (as opposed to those prepared by a third party
for use by Duke) do, in fact, constitute the same information upon which Duke relies in its
operation of the Property.



7.1.12 Condemnation Proceedings. To Duke’s knowledge, there are no
presently pending or contemplated proceedings to condemn the Real Property or any part of it.



7.1.13 Contracts. Except for the Lease and the Guaranty, to Duke’s
knowledge, there are no agreements, written or oral, relating to the management, leasing,
operation, maintenance and/or improvement of the Property or any portion thereof to which Duke is a
party.



7.1.14 Survival. The representations and warranties of Duke in this Section
7.1 shall survive the Closing for a period of one (1) year.



7.2 Holdings’ Representations. As of the Contract Date, Holdings hereby
represents and warrants to Duke that the following statements are true:



7.2.1 Holdings is a duly organized and validly formed limited liability company
under the laws of the State of Virginia, is qualified to do business in state in which the Property
is located and is not subject to any involuntary proceeding for dissolution or liquidation thereof.



7.2.2 The execution, delivery of and performance under this Agreement are pursuant
to authority validly and duly conferred upon Holdings and the signatories hereto. To Holdings’
knowledge, the consummation of the transaction herein contemplated and the compliance by Holdings
with the terms of this Agreement do not and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any agreement, arrangement,
understanding, accord, document or instrument by which Holdings is bound.



7.3 Miscellaneous.



7.3.1 As used herein, the phrase “Duke’s knowledge” or any derivation thereof shall
mean the actual knowledge of Jason Sturman, Vice President, Fund Management, provided, however, he
shall have no duty to investigate the matter to which such actual knowledge, or the absence
thereof, pertains. It shall be a condition of Closing that the representations and warranties
contained in this Section 7 are true and correct in all material respects on the Contract
Date and at Closing. In the event that Duke or Holdings learns that any of said representations or
warranties becomes inaccurate between the Contract Date and the Closing, Duke or Holdings, as
applicable, shall immediately notify the other party in writing of such change (a “Notice of
Inaccuracy”). If Duke does not cure such change by the Closing Date, Holdings may either (a)
terminate this Agreement by written notice to Duke, in which case the Earnest Money, together with
interest earned thereon, shall be returned to Holdings and the parties shall have no further rights
or obligations hereunder, except for those which expressly survive such termination, or (b) waive
such right to terminate by proceeding with the transaction pursuant to the remaining terms and
conditions of this Agreement without any reduction in the Agreed Value. In the event Holdings
elects option (b) in the preceding sentence, the representations and warranties shall be deemed to
be automatically amended to reflect said change.



7.3.2 Notwithstanding and without limiting the foregoing, (i) if any of the
representations or warranties of Duke that survive Closing contained in this Agreement or in any
document or instrument delivered in connection herewith are materially false or inaccurate, or Duke
is in material breach or default of any of its obligations under this Agreement that survive
Closing, and Holdings nonetheless closes the transactions hereunder and contributes the Holdings
Capital Contribution to the Company, then Duke shall have no liability or obligation respecting
such false or inaccurate representations or warranties or other breach or default (and any cause of
action resulting therefrom shall terminate upon the Closing) in the event that on or prior to
Closing, Holdings shall have had knowledge of the false or inaccurate representations or warranties
or other breach or default.



7.4 Reaffirmation. Subject to the provisions of Section 7.3.1, at
Closing, Duke shall be deemed to have reaffirmed that representations and warranties of Duke in
this Section 7 are true and correct in all material respects. At Closing, Holdings shall
be deemed to have reaffirmed that the representations and warranties of Holdings in this
Section 7 are true and correct.



7.5 Construction Defect Warranty. Notwithstanding anything to the contrary
contained herein, Duke shall make any repairs and replacements necessary to correct any defect in
workmanship or material in the Building for the period from Closing until June 30, 2008, provided
Holdings notifies Duke in writing of such defect on or before June 30, 2008. Duke shall have the
benefit of any subcontractor warranties in connection with the performance of Duke’s obligations
under the preceding sentence. In the event Duke fails to make such repairs and replacements
promptly, and such failure continues for thirty (30) days after written notice thereof from
Holdings to Duke (or if such repair or replacement cannot reasonably be completed in thirty days
then if Duke fails to commence such repair and/or replacement and diligently pursue completion
thereof), then the Company may complete such repair or replacement and Duke shall reimburse the
Company for all reasonable out-of-pocket costs incurred by the Company upon written demand
therefor. Duke’s obligation under this Section are herein collectively called the “Construction
Warranty”. This Section shall survive Closing.



Section 8. Operations Pending Closing. Duke hereby covenants from and after
the Contract Date as follows:



8.1 Duke, at its expense, shall use commercially reasonable efforts to (i) operate
the Property from and after the Contract Date in substantially the same manner as prior thereto and
(ii) cause the Tenant to, maintain the Property until the Closing or sooner termination of this
Agreement, substantially in its present condition and pursuant to Tenant’s normal course of
business and as required by the Lease, subject to ordinary wear and tear, damage by fire or other
casualty and condemnation. Duke shall also perform all normal maintenance from and after the
Contract Date in the same fashion as prior to the Contract Date.



8.2 To provide Holdings with copies of (a) any default letters sent to or received
from Tenant and, (b) any copies of correspondence received from Tenant that it is discontinuing
operations at the Real Property or seeking to re-negotiate the Lease and (c) notices of bankruptcy
filings received with respect to Tenant.



8.3 After the Contract Date, without Holdings’ consent, not to be unreasonably
withheld, conditioned or delayed, Duke shall not enter into any contract for service to the
Property unless it is terminable without penalty on no more than thirty (30) days written notice
(except that Duke may enter into any such contract in response to any condition or event which
would endanger the safety or integrity of the Improvements, provided that the Company shall have no
obligation to assume any such contract unless Holdings approves of such contract in writing). Duke
shall promptly deliver a copy of any item in the preceding sentence entered into by Duke
following the Inspection Date.



8.4 To cause to be in force fire and extended coverage insurance upon the Real
Property, and public liability insurance with respect to damage or injury to persons or property
occurring on the Real Property in at least such amounts, and with the same deductibles, as are
maintained by Duke on the date hereof.



8.5 To not enter into any new lease with respect to the Real Property, without
Holdings’ prior written consent; provided, however Tenant’s right under the Lease to enter into
subleases and licenses without landlord’s consent shall not be subject to this Section 8.5.
Exercise of a mandatory renewal option shall not be considered a new lease. To the extent
specifically disclosed to and approved by Holdings in connection with any request for approval, any
brokerage commission and the cost of tenant improvements or other allowances payable with respect
to a new lease shall be prorated between Company and Duke in accordance with their respective
periods of ownership as it bears to the primary term of the new lease. Further, except for the
Commencement Agreement, which shall not require Holdings’ approval, Duke will not modify or cancel
the Lease without first obtaining the written consent of Holdings. Holdings shall have five (5)
Business Days following receipt of a request for any consent pursuant to this Section in which to
approve or disapprove of any new lease or any modification or cancellation of the Lease (other than
the Commencement Agreement). Failure to respond in writing within said time period shall be deemed
to be approval. Duke’s execution of a new lease or modification or cancellation of the Lease
following Holdings’ reasonable refusal to consent thereto shall constitute a default hereunder.
Holdings shall have sole discretion in all such matters contained in this Section 8.5.



8.6 To not sell, assign, or convey any right, title, or interest whatsoever in or to
the Real Property, or create any security interest, easement, encumbrance, charge, or condition
affecting the Real Property (other than the Permitted Exceptions).



8.7 To use commercially reasonable efforts to obtain the SNDA and Estoppel
Certificate from the Tenant.



Section 9. Conditions to Closing.



9.1 Holdings’ Conditions Precedent. Holdings’ obligation to proceed to
Closing under this Agreement is subject to the following conditions precedent:




	 	(a)	 	Duke shall have materially performed and satisfied each and all of Duke’s
material obligations under this Agreement.






	 	(b)	 	Each and all of Duke’s representations and warranties set forth in this
Agreement shall be true and correct in all material respects at the Contract Date and
at the Closing Date and Duke shall not have on or prior to the Closing Date, failed to
meet, comply with or perform in any material respect any covenants or agreements on
Duke’s part as required by the terms of this Agreement.






	 	(c)	 	Duke shall obtain and deliver to Holdings, no later than one (1) day prior to
the Closing Date the Tenant Estoppel Certificate and the SNDA from Tenant. The matters
certified in the Tenant Estoppel Certificate shall be subject to Holdings’ reasonable
approval, provided, (i) any qualification of any assertion in the Tenant Estoppel
Certificate and the SNDA regarding the status of the performance of any of landlord’s
obligations under the Lease that such assertion is made “to Tenant’s knowledge” or
similar qualification made by Tenant shall be acceptable and (ii) the SNDA shall be
acceptable if the lender requiring the SNDA has approved it. If Holdings disapproves
of the Tenant Estoppel Certificate or SNDA, and Duke is unable to deliver, in Holdings’
good faith business judgment, a reasonably acceptable estoppel certificate or SNDA (as
the case may be) prior to the Closing Date, Holdings shall have the right to terminate
this Agreement and to obtain a refund of the Earnest Money without any further action
required by any party, and neither party shall have any further obligation to the
other, except for those matters that expressly survive termination of this Agreement.






	 	(d)	 	The terms and conditions of the Loan and the documents to be executed in
connection with the Loan (the “Loan Documents”) have been approved by Holdings. Fully
executed Loan Documents and the Loan proceeds shall have been received by the Company.






	 	(e)	 	On the Closing Date, the Title Insurer shall be unconditionally obligated and
prepared, subject to the payment of the applicable title insurance premium and other
related charges, to issue to Company the Title Policy.






	 	(f)	 	Tenant shall be not be in default under its Lease nor shall Tenant have given
notice that it is discontinuing operations at the Real Property nor shall Tenant filed
bankruptcy or sought any similar debtor protective measure or be the subject of an
involuntary bankruptcy.






	 	(g)	 	As of the Closing Date, Duke shall not have commenced (within the meaning of
any Bankruptcy Law) a voluntary case, nor shall there have been commenced against Duke
an involuntary case, nor shall Duke have consented to the appointment of a Custodian of
it or for all or any substantial part of its property, nor shall a court of competent
jurisdiction have entered an order or decree under any Bankruptcy Law that is for
relief against Duke in an involuntary case or appoints a Custodian of Duke for all or
any substantial part of its property. The term “Bankruptcy Law” means Title 11, U.S.
Code, or any similar state law for the relief of debtors. The term “Custodian” means
any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.






In the event any of the foregoing conditions are not satisfied prior to or at the
Closing, Holdings may terminate this Agreement by written notice to Duke and thereafter
shall have no obligation to proceed with Closing. If Holdings so terminates this Agreement,
neither party shall have any further obligation hereunder except those which expressly
survive the termination of this Agreement. Notwithstanding the foregoing but subject to
Sections 11.2 and 11.3 hereinbelow, nothing contained in this Section
9.1 shall waive or diminish any right or remedy Holdings may have for Duke’s default or
breach of this Agreement.



9.2 Duke’s Conditions Precedent. Duke’s obligation to proceed to Closing
under this Agreement is subject to the following conditions precedent:




	 	(a)	 	Duke receiving all corporate and partnership approvals to complete this
transaction on or before the Inspection Date. In the event this condition is not
satisfied on or prior to the Inspection Date, Duke may deliver written notice thereof
to Holdings on or before the Inspection Date whereupon this Agreement shall cease and
terminate, the Earnest Money shall be returned and paid to Holdings, and neither party
shall have any further obligation hereunder except those which expressly survive the
termination of this Agreement. If Duke fails to so notify Holdings on or before the
Inspection Date, this condition shall be deemed waived.






	 	(b)	 	Holdings shall have materially performed and satisfied each and all of
Holdings’ material obligations under this Agreement and Holdings’ representations and
warranties hereunder shall be true and correct in all material respects. In the event
this condition is not satisfied on or prior to the Closing Date, Duke shall have no
obligation to proceed to Closing and, if Duke delivers written notice to Holdings that
the foregoing condition has not been satisfied, this Agreement shall cease and
terminate, the Earnest Money shall be returned and paid to Holdings, and neither party
shall have any further obligation hereunder except those which expressly survive the
termination of this Agreement.






	 	(c)	 	The terms and conditions of the Loan and the Loan Documents have been approved
by Duke. Fully executed Loan Documents and the Loan proceeds shall have been received
by the Company.






Notwithstanding the foregoing, nothing contained in this Section 9.2 shall
waive or diminish any right or remedy Duke may have for Holdings’ default or breach of this
Agreement.



Section 10. Closing.



10.1 Time and Place. Provided that all of the conditions set forth in this
Agreement are theretofore fully satisfied, waived or performed, the Closing shall be held in escrow
through Escrow Agent, on or prior to 4:00 p.m. EST on the Closing Date or such other date that is
mutually agreeable to Holdings and Duke unless the Closing Date is postponed pursuant to the
express terms of this Agreement.



10.2 Duke Closing Deliveries. Duke shall obtain and deliver to Holdings or
to Escrow Agent, as the case may be, at the Closing the following documents (all of which shall be
duly executed, and witnessed and/or notarized as necessary):



10.2.1 The Deed, subject to the Permitted Title Exceptions, substantially in the
form attached as Exhibit E hereto, in proper form for recording conveying fee title to the
Real Property to Company, or subject to the terms of the Operating Agreement, to a wholly-owned
subsidiary of the Company.



10.2.2 Counterpart original of the Operating Agreement duly executed by Duke.



10.2.3 A Non-Foreign Certificate, substantially in the form attached as
Exhibit F hereto.



10.2.4 Two (2) original Assignments.



10.2.5 A Closing Statement prepared by Duke.



10.2.6 Original counterpart signatures on any Loan documents that are required to be
executed by Duke.



10.2.7 An affidavit of title or other affidavit customarily required by the Title
Insurer and reasonably satisfactory to Duke to remove the standard mechanics’ liens and parties in
possession exceptions from an owner’s title insurance policy which are capable of being removed by
such an affidavit.



10.2.8 Such transfer tax, certificate of value or other similar documents
customarily required in the county in which the Property is located.



10.2.9 Such further instructions, documents and information, including, but not
limited to a Form 1099-S, as Title Insurer may reasonably request as necessary to consummate the
contribution contemplated by this Agreement and to issue the Title Policy.



10.2.10 No later than one (1) day prior to the Closing Date, the Tenant Estoppel
Certificate and the SNDA executed by Tenant.



10.2.11 Evidence reasonably satisfactory to Holdings and the Title Insurer
respecting the due organization of Duke and the due authorization and execution by Duke of this
Agreement and the documents required to be delivered hereunder.



10.2.12 One (1) original letter, in a form acceptable to Holdings, duly executed by
Duke, advising Tenant of the change in ownership of the Real Property;



10.2.13 If applicable, a paid receipt (to the Closing Date) for water and sewer from
the municipal authority responsible for the same if unpaid water and sewer charges constitute a
lien against the Property.



10.2.14 Such other documents or instruments that are reasonably necessary to
consummate the Closing.



10.3 Holdings Deliveries. Holdings shall deliver to Duke or to Escrow
Agent, as the case may be, at Closing the following:



10.3.1 The Holdings Capital Contribution in immediately available funds, subject to
the prorations and adjustments provided for in this Agreement.



10.3.2 Counterpart originals of the Operating Agreement duly executed by Holdings
and the Company.



10.3.3 Counterpart originals duly executed (and witnessed and/or notarized as
necessary) by Holdings of the Assignment and the Closing Statement.



10.3.4 The fully executed Property Management Agreement.



10.3.5 Such transfer tax, certificate of value or other similar documents
customarily required in the county in which the Property is located.



10.3.6 Original counterpart signatures on any Loan documents that are required to be
execute by Holdings.



10.3.7 Evidence reasonably satisfactory to Duke and the Title Insurer respecting the
due organization of Holdings and the Company and the due authorization and execution by Holdings
and the Company of this Agreement and the documents required to be delivered hereunder.



10.3.8 Such other documents or instruments that are reasonably necessary to
consummate the Closing.



Section 11. Default and Remedies.



11.1 Holdings’ Default. In the event of a default by Holdings under the
terms of this Agreement, which is not cured by Holdings as provided hereunder within seven (7) days
after written notice by Duke, and due to such event of default by Holdings, the Closing does not
occur, Duke’s sole and exclusive remedy hereunder shall be to terminate this Agreement. If Duke
terminates this Agreement as provided in the previous sentence and after a cure period of seven (7)
days, the Escrow Agent shall disburse the Earnest Money to Duke, and Duke shall be entitled to
retain the Earnest Money for such default of Holdings, whereupon this Agreement shall terminate and
the parties shall have no further rights or obligations hereunder, except for those which expressly
survive any such termination. Notwithstanding the foregoing, nothing contained herein shall waive
or diminish any right or remedy Duke may have at law or in equity for Holdings’ default or breach
of Section 6.2 or Section 6.4 of this Agreement. It is hereby agreed that Duke’s
damages in the event of a default by Holdings hereunder are uncertain and difficult to ascertain,
and that the Earnest Money constitutes a reasonable liquidation of such damages and is intended not
as a penalty, but as liquidated damages. This provision shall expressly survive the termination of
this Agreement.



11.2 Duke’s Default. Subject to Section 7.3, in the event of a
default by Duke under the terms of this Agreement which is not cured by Duke as provided hereunder
within seven (7) days after written notice by Holdings and due to such event of default by Duke the
Closing does not occur, Holdings’ sole and exclusive remedies hereunder shall be to either (a)
terminate this Agreement, whereupon Holdings will receive a refund of the Earnest Money from Escrow
Agent and neither party hereto shall have any further obligation or liability to the other (except
with respect to those provisions of this Agreement which expressly survive the termination hereof),
Holdings hereby waiving any right or claim to damages for Duke’s breach, or (b) provided the
Holdings Capital Contribution has been deposited with Escrow Agent on or before the scheduled
Closing Date, seek specific performance of Duke’s obligations under this Agreement (but no other
action, for damages or otherwise, shall be permitted); provided that any action by Holdings for
specific performance must be filed, if at all, within thirty (30) days of Duke’s default, and the
failure to file within such period shall constitute a waiver by Holdings of such right and remedy.
If Holdings shall not have filed an action for specific performance within the aforementioned time
period or so notified Duke of its election to terminate this Agreement, Holdings’ sole remedy shall
be to terminate this Agreement in accordance with clause (a) above. Notwithstanding the foregoing,
if Duke’s default constitutes an Intentional Duke Default (as hereinafter defined) and Holdings
makes the election described in clause (a) above, then Holdings shall also have the right to
receive reimbursement for its out-of-pocket costs in an amount equal to the lesser of (i) One
Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, or (ii) the amount of all
third-party out-of-pocket costs and expenses actually incurred by Holdings in connection with this
Agreement and the Property (“Third-Party Costs”), including due diligence costs, engineering and
environmental review costs, and legal fees and expenses. In no event shall Duke be liable for
consequential, speculative, remote or punitive damages, or any damages other than Third-Party
Costs, and Holdings hereby waives any right to seek or collect any such consequential, speculative,
remote or punitive damages, or any damages other than Third-Party Costs (such Third Party Costs to
be limited in all cases as provided above). “Intentional Duke Default” means any one or more of
the following: (x) fraudulent misrepresentation, (y) criminal conduct (i.e. conduct that
constitutes a felony under applicable law), or (z) an intentional and deliberate act of Duke taken
on or after the Contract Date that is intended to result in, and does result in, Duke’s failure to
perform in accordance with this Agreement.



11.3 Limitation on Liability.



11.3.1 Notwithstanding anything to the contrary contained in this Agreement or any
document executed in connection herewith, the aggregate liability of Duke arising pursuant to or in
connection with the representations, warranties, indemnifications, covenants or other obligations
(whether express or implied) of Duke under this Agreement (or any document or certificate executed
or delivered in connection herewith), shall not exceed $900,000.00, however, Holdings shall not
make any claims in connection with the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Duke under this Agreement unless such claims in
the aggregate exceed $50,000.00. This limits in this Section 11.3 shall not apply to the
Construction Warranty.



11.3.2 No shareholder or agent of Duke, nor any Duke Related Parties, shall have any
personal liability, directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter,
and Holdings and its successors and assigns and, without limitation, all other persons and
entities, shall look solely to Duke’s assets for the payment of any claim or for any performance,
and Holdings, on behalf of itself and its successors and assigns, hereby waives any and all such
personal liability.



11.3.3 The provisions of this Section 11.3 shall survive the Closing or
sooner termination of this Agreement.



Section 12. Condemnation or Destruction.



12.1 Condemnation. If, prior to the Closing, the Property is subject to a
bona fide written threat of Material Condemnation (as hereinafter defined) by a body having the
power of eminent domain, or is taken by eminent domain or condemnation, or sale in lieu thereof,
then Duke, within three (3) business days after Duke receives notice of such occurrence, shall give
Holdings written notice of such occurrence and the nature and extent of such Material Condemnation.
Within thirty (30) days after written notification to Holdings of the estimated amount of the
condemnation award resulting from a Material Condemnation, as determined by a third party
independent contractor, engineer or appraiser selected by Duke, subject to Holdings’ reasonable
approval (the “Appraiser”), Holdings shall have the right, by giving written notice to Duke, to
terminate this Agreement, in which event this Agreement shall automatically terminate, the Earnest
Money shall be returned to Holdings without any further action required from either party, Holdings
and Duke shall each be liable for one-half of any escrow fees or charges and neither party shall
have any continuing obligations hereunder. If, before the Closing, proceedings are commenced for
the taking by exercise of the power of eminent domain of less than a Material Condemnation, or if
Holdings has the right to terminate this Agreement pursuant to the preceding sentence but Holdings
does not exercise such right, then this Agreement shall remain in full force and effect and, on the
Closing Date, the condemnation award (or, if not theretofore received, the right to receive such
portion of the award) payable on account of the taking shall be assigned, or paid to, Company. The
foregoing notwithstanding, in the event the taking results in the cancellation of, or rent
abatement under, the Lease, Holdings shall have the option to terminate this Agreement. For
purposes hereof, a “Material Condemnation” shall be one which results or would result in damage or
loss affecting the Property in an amount greater than five percent (5%) of the Agreed Value, as
determined by the Appraiser



12.2 Damage or Destruction. If, prior to the Closing, a Material Casualty
(as hereafter defined) shall affect the Property, Duke agrees to give Holdings written notice of
such occurrence and the nature and extent of such damage and destruction. Within thirty (30)
days after written notification to Holdings of the estimated amount of the damages to the Property
resulting from a Material Casualty, as determined by the Appraiser, then Triple may in its
discretion either (i) elect to terminate this Agreement, in which case the Earnest Money shall be
returned to Holdings without any further action required from either party, Holdings and Duke shall
each be liable for one-half of any escrow fees or charges and neither party shall have any further
obligation to the other or (ii) proceed to Closing in which event any insurance proceeds, plus the
cash amount of any associated deductible, shall be paid over to Company. In the event that the
casualty is uninsured, Holdings may terminate this Agreement unless Holdings receives a credit
against the Holdings Capital Contribution equal to the cost of repairs. The foregoing
notwithstanding, in the event any casualty results in the cancellation of, or rental abatement
under the Lease, Holdings shall have the option to terminate this Agreement without regard to the
cost of repairs. For purposes hereof, a “Material Casualty” shall be a casualty, which results or
would result in damage or loss affecting the Property in an amount greater than five percent (5%)
of the Agreed Value, as determined by the Appraiser.



Section 13. Assignment. Duke shall not assign any of its right, title or
interest in and to this Agreement. Holdings may not assign its rights under this Agreement without
Duke’s written consent, which consent may be granted or withheld in Duke’s sole and absolute
discretion; provided, however, that Holdings may, upon five (5) days prior written notice to Duke,
assign this Agreement to Grubb & Ellis Healthcare REIT, Inc. or its affiliate; provided, however,
(x) Holdings’ assignee shall assume in writing all of Holdings’ obligations hereunder pursuant to
an assignment and assumption agreement in form and content acceptable to Duke in the exercise of
Duke’s reasonable judgment and (z) no assignment of this Agreement shall relieve Holdings of its
obligations hereunder.



Section 14. Intentionally Omitted.



Section 15. Brokers and Brokers’ Commissions. Holdings and Duke each
warrant and represent to the other that neither party has employed a real estate broker or agent in
connection with the transaction contemplated hereby, except SavillsGranite, which shall be paid by
Duke pursuant to the terms of a separate agreement. Each party agrees to indemnify and hold the
other harmless from any loss or cost suffered or incurred by it as a result of the other’s
representation herein being untrue. This Section 15 shall expressly survive the Closing
hereunder.



Section 16. Notices.



Wherever any notice or other communication is required or permitted hereunder, such notice or
other communication shall be in writing and shall be delivered by hand, by nationally-recognized
overnight express delivery service, by U.S. registered or certified mail, return receipt requested,
postage prepaid, or by facsimile with confirmation to the addresses set out below or at such other
addresses as are specified by written notice delivered in accordance herewith:



	 	 	 
	DUKE:

Attn: Jason Sturman

	 	Duke Realty Limited Partnership



	600 E 96th Street, Suite 100

	Indianapolis, IN 46240

Fax: (317) 808-6794

with copy to:

	 	



Duke Realty Limited Partnership






	 	 	 
	Attn: Ann Banta Kustoff, Esq.

	3950 Shackleford Road, Suite 300

	Duluth, Georgia 30396

Fax: (770) 717-4231

HOLDINGS:

	 	



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.



	 	 	 
	with copy to:

	 	(714) 667-8252

(714) 667-6816 Fax

Cox, Castle & Nicholson LLP







2049 Century Park East, Suite 2800


Los Angeles, CA 90067


Attn: David P. Lari, Esq.


(310) 284-2240


(310) 277-7889 Fax



Such notices shall be deemed received (a) on the date of delivery, if delivered by hand or
overnight express delivery service; (b) on the date indicated on the return receipt if mailed; or
(c) on the date of facsimile, if sent by facsimile and confirmed.



Section 17. Disclaimer of Condition.



17.1 Disclaimer; Release. Subject to the express representations of Duke in
Section 7.1 and the covenants of Duke in this Agreement to the extent such covenants
survive Closing, the Construction Warranty and the documents delivered at Closing (collectively,
"Duke’s Warranties”), it is understood and agreed that Duke is not making and has not at any time
made any warranties or representations of any kind or character, expressed or implied, with respect
to the Property, including, but not limited to, any warranties or representations as to
habitability, merchantability, fitness for a particular purpose, title (other than Duke’s limited
warranty of title to be set forth in the Deed), zoning, tax consequences, latent or patent physical
or environmental condition, utilities, operating history or projections, valuation, governmental
approvals, the compliance of the Property with governmental laws, the truth, accuracy or
completeness of the Property documents or any other information provided by or on behalf of Duke to
Holdings or the Company, or any other matter or thing regarding the Property. Subject to the
express representations of Duke in the Duke’s Warranties, Holdings acknowledges and agrees that
upon Closing, Duke shall sell and convey to the Company and Company shall accept the Property “AS
IS, WHERE IS, WITH ALL FAULTS,” except to the extent otherwise expressly provided in this
Agreement. Subject to the express representations of Duke in the Duke’s Warranties, Holdings has
not relied and will not rely on, and Duke is not liable for or bound by, any expressed or implied
warranties, guaranties, statements, representations or information pertaining to the Property or
relating thereto (including specifically, without limitation, Property information packages
distributed with respect to the Property) made or furnished by Duke, the manager of the Property,
or any real estate broker or agent representing or purporting to represent Duke, to whomever made
or given, directly or indirectly, orally or in writing. Holdings represents to Duke that Holdings
has conducted, or will conduct prior to Closing, such investigations of the Property, including but
not limited to, the physical and environmental conditions thereof, as Holdings deems necessary to
satisfy itself as to the condition of the Property and the existence or nonexistence or curative
action to be taken with respect to any hazardous or toxic substances on or discharged from the
Property, and will rely solely upon same and not upon any information provided by or on behalf of
Duke or its agents or employees with respect thereto, other than such representations, warranties
and covenants of Duke as are expressly set forth in this Agreement. Subject to the express
representations and covenants of Duke in the Duke’s Warranties, upon Closing, the Company shall
assume the risk that adverse matters, including but not limited to, construction defects and
adverse physical and environmental conditions, may not have been revealed by Holdings’
investigations, and Holdings and the Company, upon Closing, shall be deemed to have waived,
relinquished and released Duke and Duke Related Parties from and against any and all claims,
demands, causes of action (including, without limitation, causes of action in tort), losses,
damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees and court
costs) of any and every kind or character, known or unknown, which the Company, Holdings or any
agent, representative, affiliate, employee, director, officer, partner, member, servant,
shareholder or other person or entity acting on the Company’s or Holdings’ behalf or otherwise
related to or affiliated with Holdings might have asserted or alleged against Duke and/or Duke
Related Parties at any time by reason of or arising out of any latent or patent construction
defects, physical conditions (including, without limitation, environmental conditions), the Lease
and the Tenant, violations of any applicable laws (including, without limitation, any environmental
laws) or any and all other acts, omissions, events, circumstances or matters regarding the
Property. Neither Holdings nor the Company shall look to Duke or any Duke Related Parties in
connection with the foregoing for any redress or relief. The foregoing release shall be given full
force and effect according to each of its expressed terms and provisions, including those relating
to unknown and unsuspected claims, damages and causes of action.



17.2 Effect and Survival of Disclaimer and Release. Duke and Holdings
acknowledge that the Agreed Value reflects that the Property is being contributed subject to the
provisions of this Section 17, and Duke and Holdings agree that the provisions of this
Section 17 shall survive Closing indefinitely.



Section 18. Miscellaneous.



18.1 Governing Law; Headings; Rules of Construction. This Agreement shall
be governed by and construed in accordance with the internal laws of the State in which the Land is
located, without reference to the conflicts of laws or choice of law provisions thereof. The
titles of sections and subsections herein have been inserted as a matter of convenience of
reference only and shall not control or affect the meaning or construction of any of the terms or
provisions herein. All references herein to the singular shall include the plural, and vice versa.
The parties agree that this Agreement is the result of negotiation by the parties, each of whom
was represented by counsel, and thus, this Agreement shall not be construed against the maker
thereof.



18.2 No Waiver. Neither the failure of either party to exercise any power
given such party hereunder or to insist upon strict compliance by the other party with its
obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof
shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof.



18.3 Entire Agreement. Except for the Confidentiality Agreement and the
Operating Agreement, this Agreement contains the entire agreement of the parties hereto with
respect to the Property and any other prior understandings or agreements are merged herein and no
representations, inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein or incorporated herein by reference shall be of any force or effect.



18.4 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and assigns (subject to Section 13 above).



18.5 Amendments. No amendment to this Agreement shall be binding on any of
the parties hereto unless such amendment is in writing and is executed by the party against whom
enforcement of such amendment is sought.



18.6 Date For Performance. If the time period by which any right, option or
election provided under this Agreement must be exercised, or by which any act required hereunder
must be performed, or by which the Closing must be held, expires on a Saturday, Sunday or legal or
bank holiday, then such time period shall be automatically extended through the close of business
on the next regularly scheduled Business Day.



18.7 Recording. Duke and Holdings agree that they will not record this
Agreement and that they will not record a short form of this Agreement.



18.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which, when taken
together, shall constitute but one and the same instrument.



18.9 Time of the Essence. Time shall be of the essence of this Agreement
and each and every term and condition hereof.



18.10 Severability. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and
regulations. If any term or provision of this Agreement or the application thereof to any person
or circumstance shall for any reason and to any extent be held to be invalid or unenforceable, then
such term or provision shall be ignored, and to the maximum extent possible, this Agreement shall
continue in full force and effect, but without giving effect to such term or provision.



18.11 Attorneys’ Fees. In the event that either party shall bring an action
or legal proceeding for an alleged breach of any provision of this Agreement or any representation,
warranty, covenant or agreement herein set forth, or to enforce, protect, determine or establish
any term, covenant or provision of this Agreement or the rights hereunder of either party, the
prevailing party shall be entitled to recover from the non-prevailing party, as a part of such
action or proceedings, or in a separate action brought for that purpose, reasonable attorneys’ fees
and costs, expert witness fees and court costs as may be fixed by the court or jury.



18.12 Publicity. Between the Contract Date and the Closing, Duke and
Holdings shall discuss and coordinate with respect to any public filing or announcement concerning
the contributions as contemplated hereunder. Nothing in the forgoing sentence shall limit
Holdings’ obligations pursuant to Section 6.4 hereof.



18.13 Discharge of Duke’s Obligations. Except as otherwise expressly
provided in this Agreement, Holdings’ acceptance of the Deed shall be deemed a discharge of all of
the obligations of Duke hereunder and all of Duke’s representations, warranties, covenants and
agreements in this Agreement shall merge in the documents and agreements executed at the Closing
and shall not survive the Closing, except and to the extent that, pursuant to the express
provisions of this Agreement, any of such representations, warranties, covenants or agreements are
to survive the Closing.



18.14 Disclosure. Notwithstanding any terms or conditions in this Agreement
to the contrary, but subject to restrictions reasonably necessary to comply with federal or state
securities laws, any person may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided relating to such tax treatment and tax structure.
For the avoidance of doubt, this authorization is not intended to permit disclosure of the names
of, or other identifying information regarding, the participants in the transaction, or of any
information or the portion of any materials not relevant to the tax treatment or tax structure of
the transaction. The provisions of this Section 18.14 shall survive the Closing.



18.15 Waiver of Trial by Jury. Duke and Holdings hereby irrevocably and
unconditionally waive any and all right to trial by jury in any action, suit or counterclaim
arising in connection with, out of or otherwise relating to, this Agreement. The provisions of
this Section 18.15 shall survive the Closing or termination hereof.



18.16 Information and Audit Cooperation. At Holdings’ request, at any time
after Closing and continuing for a period of one (1) year after Closing, Duke shall provide to
Holdings’ designated independent auditor access to the books and records of the Property, and all
related information regarding the Property for the period for which Holdings is required to have
the Property audited, and Duke shall provide to such auditor a representation letter regarding the
books and records of the Property, in substantially the form of Exhibit I attached hereto,
in connection with the normal course of auditing the Property in accordance with generally accepted
auditing standards.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]






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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its
duly authorized signatory, effective as of the day and year first above written.




DUKE:




BD ST. LOUIS DEVELOPMENT, LLC,


an Indiana limited liability company



	 	 	 	 	 
	By:	 	DUKE REALTY LIMITED PARTNERSHIP,
	 	 	an Indiana limited partnership, sole member
	
 
	 	By:
	 	DUKE REALTY CORPORATION,

an Indiana corporation, its general partner
	
 
	 	 	 	By: /s/ Jason F. Sturman

Name: Jason F. Sturman

Title: VP Fund Mgmt






[Signatures are continued on the following page.]





2







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








	 	 	THE COMPANY:





G&E HEALTHCARE REIT/DUKE



CHESTERFIELD REHAB, LLC,



a Delaware limited liability company



By: Grubb & Ellis Healthcare REIT Holdings, L.P.,



a Delaware limited partnership, its manager



	 
	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







[Signatures are continued on the following page.]





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WITH RESPECT TO SECTION 18.12 ONLY:




FIRST AMERICAN TITLE INSURANCE


COMPANY, a California corporation




By: /s/ Martha Reyna

Name: Martha Reyna

Title: Sr. National Escrow Officer









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