EX-10.1






PURCHASE AND SALE AGREEMENT




SMITH-PACKETT SENIOR PORTFOLIO




THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made this 28th day
of June, 2010 (the “Effective Date”), by and between GRUBB & ELLIS EQUITY ADVISORS, LLC, a
Delaware limited liability company (“Buyer”), CLC RE, LLC, a Virginia limited liability
company (“CLC Seller”), and ALBEMARLE HEALTH INVESTORS, LLC, a Virginia limited liability
company (“Albemarle Seller”, and together with CLC Seller, “Seller”).



RECITALS




A. Albemarle Seller is the owner of that certain parcel of land having a street address of
1165 Pepsi Place, Charlottesville, Virginia 22901, being more particularly described on Exhibit A
attached hereto (together with the Other Property Rights (defined below), the “Charlottesville
Land”). CLC Seller is the owner of those certain parcels of land having a street address of:
(i) 12185 Grapefield Road, Bastian, Virginia 24314, being more particularly described on Exhibit A
attached hereto (together with the Other Property Rights, the “Bland Land”); (ii) 318 E.
Main Street, Lebanon, Virginia 24266, being more particularly described on Exhibit A attached
hereto (together with the Other Property Rights, the “Maple Grove Land”); (iii) 188 Old
Fincastle Road, Fincastle, Virginia 24090, being more particularly described on Exhibit A (together
with the Other Property Rights, the “Fincastle Land”); (iv) 100 Alleghany Reg Hosp Lane,
Low Moor, Virginia 24457, being more particularly described on Exhibit A attached hereto (together
with the Other Property Rights, the “Low Moor Land”); (v) 11611 Robious Road, Midlothian,
Virginia 23113 (together with the Other Property Rights, the “Willow Creek Land”); and (vi)
1 Spring Street, Hot Springs, Virginia 24445 ) (together with the Other Property Rights, the
"Springs Land”). The Charlottesville Land, Bland Land, Maple Grove Land, Fincastle Land,
Low Moor Land, Willow Creek Land, and Springs Land collectively are referred to as the
“Land.”



B. The Charlottesville Land, together with the Improvements (defined below) constructed
thereon, is referred to herein as the “Charlottesville Property”. The Bland Land, together
with the Improvements constructed thereon, is referred to herein as the “Bland Property”.
The Maple Grove Land, together with the Improvements constructed thereon, is referred to herein as
the “Maple Grove Property”. The Fincastle Land, together with the Improvements constructed
thereon, is referred to herein as the “Fincastle Property”. The Low Moor Land, together
with the Improvements constructed thereon, is referred to herein as the “Low Moor
Property”. The Willow Creek Land, together with the Improvements constructed thereon, is
referred to herein as the “Willow Creek Property”. The Springs Land, together with the
Improvements constructed thereon, is referred to herein as the “Springs Property”. The
Charlottesville Property, Bland Property, Maple Grove Property, Fincastle Property, Low Moor
Property, Willow Creek Property, and Springs Property collectively are referred to as the
“Property.” The phrase “one of the Properties” shall mean a generic reference to one or
more of the Charlottesville Property, Bland Property, Maple Grove Property, Fincastle Property, Low
Moor Property, Willow Creek Property and Springs Property.



C. Seller desires to sell the Properties to Buyer, and Buyer desires to purchase the
Properties from Seller on and subject to the terms and conditions set forth in this Agreement.



AGREEMENT




FOR AND IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH HEREIN AND OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO,
INTENDING TO BE LEGALLY BOUND, AGREE AS FOLLOWS:



Section 1. Terms and Definitions: The terms listed below shall have the respective
meaning given them as set forth adjacent to each term.



(a) “Broker(s)” collectively shall mean Heavenrich & Company, acting as Seller’s
agent.



(b) “Closing” shall mean the consummation of the transaction contemplated herein,
which shall occur, subject to extension set forth in Section 10 hereof, on the date (the
“Closing Date”) that is thirty (30) days after expiration of the Due Diligence Period (as
defined herein). The parties are targeting July 31, 2010 for the Closing Date, however this date
is a non-binding estimate and Buyer shall have no obligation to complete the Closing prior to said
thirtieth (30th) day after the expiration of the Due Diligence Period.



(c) “Due Diligence Period” shall mean the period beginning upon the execution of this
Agreement, and extending until July 21, 2010.



(d) “Earnest Money” shall mean the Initial Deposit, the Additional Deposit and, if
paid, the Final Deposit (together with all interest accrued thereon). The “Initial
Deposit” shall mean the sum of One Million and No/100 Dollars ($1,000,000.00). The
“Additional Deposit” shall mean the sum of Five Hundred Thousand and No/100 Dollars
($500,000.00). The “Final Deposit” shall mean the sum of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00). Buyer shall deposit the Initial Deposit with Title Insurer within
three (3) business days after the execution and delivery of this Agreement by the parties hereto.
If Buyer does not terminate this Agreement during the Due Diligence Period as provided herein, then
Buyer shall deposit the Additional Deposit with Title Insurer within three (3) business days after
the expiration of the Due Diligence Period. If Buyer exercises its right pursuant to Section
10 to extend the Closing Date, then Buyer shall deposit the Final Deposit with Title Insurer as
provided by Section 10. The Earnest Money shall be deposited by Buyer in escrow with Title
Insurer, to be applied as part payment of the Purchase Price at the time the sale is closed, or
disbursed as agreed upon in accordance with the terms of this Agreement. Upon the expiration of
the Due Diligence Period, and provided that Buyer has not terminated this Agreement, Title Insurer
shall release and pay the Initial Deposit to Seller (following receipt from Seller of a written
request for payment of same together with wire transfer instructions for such payment) and the
Initial Deposit shall become nonrefundable to Buyer, except that Seller shall refund the Initial
Deposit to Buyer if this Agreement is terminated (i) pursuant to Section 9(b) following a
default by Seller, (ii) pursuant to Section 13 following the failure of a condition
precedent to Buyer’s obligations hereunder, or (iii) pursuant to any other Section of this
Agreement, except where such termination is pursuant to Section 9(a) following a default by
Buyer. Such payment of the Initial Deposit shall be deemed applied as part payment of the Purchase
Price. Additionally, following payment of the Additional Deposit and the expiration of the Due
Diligence Period, the Additional Deposit shall be held by Title Insurer as provided herein and
shall be nonrefundable to Buyer, except that Title Insurer shall refund the Additional Deposit to
Buyer if this Agreement is terminated (i) pursuant to Section 9(b) following a default by
Seller, (ii) pursuant to Section 13 following the failure of a condition precedent to
Buyer’s obligations hereunder, or (iii) pursuant to any other Section of this Agreement, except
where such termination is pursuant to Section 9(a) following a default by Buyer. Seller
and Buyer each shall pay one-half of all escrow fees charged by the Title Insurer.



(e) “Lease(s)” shall mean collectively or individually, as the context requires, each
of the Charlottesville Lease, Bland Lease, Maple Grove Lease, Fincastle Lease, Low Moor Lease,
Willow Creek Lease, and Springs Lease, each of which is defined as follows:




(i) With respect to the Charlottesville Real Property, that certain lease agreement
between Albemarle Seller and The Laurels of Charlottesville, LLC (referred to herein as the
“Charlottesville Tenant”) dated December 30, 2005, as amended, pursuant to which
Charlottesville Tenant operates a 120 bed skilled nursing facility at and on the
Charlottesville Real Property (the “Charlottesville Lease”).




(ii) With respect to the Bland Real Property, that certain lease agreement between CLC
Seller and AFS of Bastion, Inc, (referred to herein as the “Bland Tenant”) dated
February 1, 2005, as amended, pursuant to which Bland Tenant operates a 60 bed skilled
nursing facility at and on the Bland Real Property (the “Bland Lease”).




(iii) With respect to the Maple Grove Real Property, that certain lease agreement
between CLC Seller and Senior Care of Lebanon, Inc. (referred to herein as “Maple Grove
Tenant”) dated February 1, 2005, as amended, pursuant to which Maple Grove Tenant
operates a 60 bed skilled nursing facility at and on the Maple Grove Real Property (the
“Maple Grove Lease”).




(iv) With respect to the Fincastle Real Property, that certain lease agreement between
CLC Seller and AFS of Fincastle, Inc. (referred to herein as “Fincastle Tenant”)
dated February 1, 2005, as amended, pursuant to which Fincastle Tenant operates a 60 bed
skilled nursing facility at and on the Fincastle Real Property (the “Fincastle
Lease”).




(v) With respect to the Low Moor Real Property, that certain master lease agreement
between Seller and AFS of Low Moor, Inc. (referred to herein as “Low Moor Tenant”)
dated February 1, 2005, as amended pursuant to which Low Moor Tenant operates a 60 bed
skilled nursing facility at and on the Low Moor Real Property (the “Low Moor
Lease”).




(vi) With respect to the Willow Creek Real Property, that certain lease agreement (the
“Willow Creek Lease”) between CLC Seller and Oak Health Care Investors of Richmond,
Virginia, Inc. (referred to herein as “Willow Creek Tenant”) dated February 25,
2005, as amended and assigned to Laurel Realty Properties, LLC (now known as Diamond Senior
Living, LLC)(“Diamond”) and subleased to LHCC Properties, LLC pursuant to a Master Lease and
Security Agreement dated December 30, 2005, as amended, and sub-subleased to the Willow
Creek Tenant pursuant to a Sublease dated December 30, 2005, as amended, pursuant to which
Willow Creek Tenant operates a 120 bed skilled nursing facility at and on the Willow Creek
Real Property.




(vii) With respect to the Springs Real Property, that certain lease agreement between
CLC Seller and AFS of Hot Springs, LLC (referred to herein as “Springs Tenant”)
dated February 1, 2005, as amended, pursuant to which Springs Tenant operates a 60 bed
skilled nursing facility at and on the Springs Real Property (the “Springs Lease”).



The Charlottesville Tenant, the Bland Tenant, the Maple Grove Tenant, the Fincastle Tenant, the Low
Moor Tenant, the Willow Creek Tenant and the Springs Tenant are generically referred to herein
individually and collectively (as the context requires may be require) as “Tenant”.



(f) “Other Property Rights” shall mean all gores, strips, easements, licenses, rights
tenements, hereditaments, liberties, powers, privileges and appurtenances relating to the Real
Property, and all of Seller’s right, title and interest in and to any adjacent or abutting lands
lying in the beds of streets or roads, whether open, proposed or vacated.



(g) “Property” shall mean all of the following:



(i) the Land;



(ii) all buildings, facilities and other improvements located thereon, including without
limitation all fixtures, fittings and components thereof (such as any and all elevators,
partitions, ducts, motors, compressors, and the heating, ventilating, air conditioning, plumbing,
sprinkling, drainage, lighting, gas, electrical and all other systems located therein)
(collectively, the “Improvements” and, together with the Land, the “Real
Property”);



(iii) all right, title and interest of Seller under the Lease and all security deposits,
guaranties and other documents delivered to Seller or that Seller is holding in connection
therewith (collectively, the “Awards”);



(iv) all right, title and interest of Seller, if any, to any unpaid award for (A) any taking
or condemnation of the Real Property or any portion thereof, or (B) any damage to the Real Property
by reason of a change of grade of any street or highway;



(iv) all right, title and interest of Seller in and to the documents, surveys, reports
relating to the physical attributes of the Real Property, as opposed to the operation of the
Property (the “Property Diligence Materials”);



(v) all right, title and interest of Seller in and to any machinery, furniture, equipment and
items of personal property owned by Seller attached or appurtenant to, located on or used in the
ownership, use, operation or maintenance of the Property or the Improvements (the “Personal
Property”); and



(vi) all right, title and interest of Seller in and to the intangible property used in
connection with the foregoing, including, without limitation, any and all certificates of occupancy
and other permits, licenses and certificates, certificates of need to the extent required for the
operation of the business at the Real Property, and all warranties, guaranties and other assurances
of performance pertaining to the Real Property, all surveys, drawings, plans, specifications,
diagrams, reports, environmental assessments and other architectural or engineering work product
(collectively, the “Intangible Property”). Intangible Property shall exclude Seller’s
intellectual property, such as trade names, logos and the like.



(h) “Purchase Price” shall mean the sum of Forty-Five Million and 00/100 Dollars
($45,000,000.00), payable in cash at Closing. For purposes of determining Closing-related charges
that are calculated based upon the consideration paid for an individual Property, such as (by way
of example only) the “Grantor’s Tax,” “State Recordation Tax” and the “County Recordation Tax”, the
parties shall use the allocation of the Purchase Price set forth on Schedule 1(h) attached
hereto; however, the parties agree that said allocation is stipulated solely for this stated
purpose and is not otherwise intended to be binding on the parties.



(i) “Seller’s Notice Address” shall be as follows, except as same may be changed
pursuant to the Notice section herein:



James R. Pietrzak



4423 Pheasant Ridge Road, S.W., Suite 302



Roanoke, VA 24014



Tel. No.: 540-774-7762



With a required copy to:



William. W. Terry, III



4423 Pheasant Ridge Road, S.W., Suite 302



Roanoke, VA 24014



Tel. No.: 540-774-7762



(j) “Buyer’s Notice Address” shall be as follows, except as same may be changed
pursuant to the Notice section herein:



Mr. Stefan Oh



Grubb & Ellis Equity Advisors, LLC



1551 N. Tustin Avenue, Suite 300



Santa Ana, CA 97205



Tel. No.: 714-975-2295



With a required copy to:



Steven A. Kaye, Esq.



Arnall Golden Gregory LLP



171 17th Street, NW, Suite 2100



Atlanta, GA 30363



Tel. No.: 404-873-8100



(k) “Title Insurer” shall mean First American Title Insurance Company, whose notice
address shall be as follows, except as may be changed pursuant to the Notice section herein:




Barbara Laffer


Senior Commercial Escrow Officer


First American Title Insurance Company


National Commercial Services


777 South Figueroa Street, Fourth Floor,


Los Angeles, CA 90017


Tel. No.: 213-271-1702


e-fax:  818-450-0135



e-mail: blaffer@firstam.com



Section 2. Proration of Expenses and Payment of Costs and Recording Fees. Seller
and Buyer agree that all utility charges, real estate taxes, assessments and any assumed
liabilities shall be prorated on a calendar-year basis as of the date of Closing, subject to the
obligations of Tenant under the Lease. If Closing shall occur before the actual taxes and special
assessments payable during such year are known, the apportionment of taxes shall be upon the basis
of taxes for the Property payable during the immediately preceding year, provided that, if the
taxes and special assessments payable during the year in which Closing occurs are thereafter
determined to be more or less than the taxes payable during the preceding year, Seller and Buyer
promptly shall adjust the proration of such taxes and special assessments, and Seller or Buyer, as
the case may be, shall pay to the other any amount required as a result of such adjustment and this
covenant shall not merge with the Deed delivered hereunder but shall survive the Closing. Seller
shall be responsible for the payment of all municipal license taxes payable during the calendar
year in which the Closing occurs and corresponding to any period prior to the Closing Date, and the
Lease shall require that Tenant pay all such amounts from and after the Closing Date. Seller shall
pay all fees (including defeasance fees), charges and expenses imposed or assessed in connection
with the prepayment of all mortgage loans encumbering the Property. The premium and related charges
for owner’s title insurance policy to be issued to Buyer and deed preparation and recording fees
necessary to record the deed at the register of deeds office where each Property is located shall
be allocated between Seller and Buyer in accordance with the custom of the jurisdictions in which
the Real Property is located. The so-called “Grantor’s Tax” shall be paid by Seller. The
so-called “State Recordation Tax” and the “County Recordation Tax” shall be paid by Buyer. Buyer
shall be responsible for the cost of its own surveys, Phase 1 environmental studies and due
diligence investigations. Seller and Buyer shall be responsible for their own attorney’s fees.



Section 3. Sale of Property. Seller hereby agrees to sell, transfer and convey the
Property to Buyer, and Buyer hereby agrees to purchase and accept the Property from Seller, in each
case for the Purchase Price and on and subject to the other terms and conditions set forth in this
Agreement. 



Section 4. Payment of Purchase Price. Buyer shall pay the Purchase Price in
accordance with all the terms and conditions of this Agreement. Buyer shall pay the Purchase Price
by wire transfer of immediately available federal funds to the Title Insurer on the morning of the
Closing, and Title Insurer shall disburse all funds it receives from the parties in connection with
the Closing.



Section 5. Title. At Closing, Seller agrees to convey to Buyer fee simple
marketable title to the Real Property by special warranty deed, free and clear of all liens,
defects of title, conditions, easements, assessments, restrictions, and encumbrances except for,
with respect to each of the Properties, (i) the Lease, (ii) taxes for the current year and
subsequent years not yet due and payable (subject to apportionment as provided elsewhere in this
Agreement), (iii) existing zoning laws, ordinances and regulations and other laws, ordinances and
regulations respecting the use, occupancy and operation of the Property; (iv) other exceptions set
forth in the Title Report (as defined below) or on a survey of the Property which Seller does not
agree to cure under Section 6(a) herein and in which Buyer waives as an Objection pursuant to said
Section 6(a) (collectively, the “Permitted Exceptions”).



Section 6. Examination of Property. Seller and Buyer hereby agree as follows:



(a) Title Examination. Buyer shall order a title report (the “Title Report”) from the
Title Insurer promptly after the date hereof. Seller shall deliver a copy of its most recent ALTA
survey (which shall be certified), within two (2) business days after the date hereof which Buyer
shall have the right to have updated and revised to incorporate Buyer’s survey requirements.
Before the expiration of the Due Diligence Period, Buyer may furnish to Seller a copy of Buyer’s
Title Report and survey, together with a statement specifying any defects in title and/or the
survey (the “Objections”). Seller shall notify Buyer within ten (10) days after receipt of
the Objections whether Seller will cure the Objections. If Seller does not respond within said ten
(10) day period, Seller shall be deemed to have elected to not cure the Objections. If Seller does
not agree (or is deemed to not agree) to cure the Objections, Buyer shall have the right, by notice
given to Seller and Title Insurer within ten (10) days after receipt of Seller’s notice (or within
ten (10) days of the expiration of Seller’s ten (10) day response period, if Seller does not
respond), either to (a) waive the Objections and close title without abatement or reduction of the
Purchase Price, or (b) terminate this Agreement. If Buyer fails to deliver the Objections to
Seller within the Due Diligence Period, then Buyer shall be deemed to have elected not to terminate
this Agreement. If Buyer elects to terminate this Agreement the Earnest Money shall be immediately
returned to Buyer, and upon such return, except as expressly provided herein, this Agreement and
all rights and obligations of the respective parties hereunder shall be null and void.
Notwithstanding the foregoing, Seller shall be solely responsible for the payment or other
satisfaction and discharge of record at or before the Closing of all liens and encumbrances against
the Property and objected to by Buyer which can be removed by the payment of a fixed and
ascertainable sum of money. In the event Seller fails or refuses to cure monetary liens or
encumbrances against the Property, Buyer may, but is not obligated to, elect to satisfy such
monetary liens or encumbrances and deduct the costs of the cure from the Purchase Price.



Notwithstanding the foregoing, following the Effective Date of this Agreement, Seller shall
not create, place, grant, convey, or otherwise voluntarily cause or otherwise consent to any liens,
encumbrances or restrictions affecting the Real Property, or any part thereof, to be created,
suffered to be placed or recorded against the title to the Real Property, nor will Seller during
said period convey any interest in the Property to anyone other than Buyer without Buyer’s prior
written consent, which consent Buyer may withhold in its absolute discretion. At Closing, Seller
will cause the Real Property to be released or otherwise discharged from any lien securing the
payment of a sum certain which has been voluntarily created by, or with the consent of, Seller or
will bond over said lien to the reasonable satisfaction of Buyer and Buyer’s title insurance
company sufficient to cause said company to insure over said lien.



Any exceptions to title to the Real Property that arise between the Effective Date of the
title commitment obtained by Buyer and the Closing are referred to herein as “New Defects.”
Buyer may notify Seller in writing (the “Gap Notice”) of any New Defect (a) raised by the
Title Insurer between the Effective Date of the Title Commitment and the Closing (the
“Gap”) and (b) not otherwise known to Buyer prior to the Effective Date of the Title
Commitment; provided that Buyer must notify Seller of such objection to title within two (2)
business days of being made aware of the existence of such exceptions. If Buyer sends a Gap Notice
to Seller, Buyer and Seller shall have the same rights and obligations with respect to such notice
as exist in Section 5(a) of this Agreement with respect to the Objection Notice.



(b) Examination. Within three (3) business days following execution of this
Agreement, Seller shall provide to Buyer copies of the following documents and materials pertaining
to the Property to the extent within Seller’s possession or readily obtainable by Seller: all
contracts, subcontracts or agreements affecting the Property (the “Contracts”); title
commitment/policy, title exceptions, ALTA survey, site plans and specifications, architectural
plans, environmental/hazardous material reports, structural reports, soils reports, governmental
permits/approvals, zoning information, copies of tax bills, condemnation notices, operating expense
information and reports, and utility letters and copies of all correspondence related to the Lease,
plans and specification for the Improvements, and all items specified on Schedule 6
attached hereto, and any other documents relating to the Property reasonably requested by Buyer.
All such due diligence items shall be sent to Buyer at the address set forth in Section 1(i), to
the attention of Phil Han. Additionally, during the term of this Agreement, Buyer, its employees,
contractors, agents and designees, shall have the right to enter the Real Property for the purposes
of inspecting and testing the same, and making surveys, mechanical and structural engineering
studies, inspecting construction, and conducting any other interviews, investigations and
inspections as Buyer may reasonably require to assess the condition and suitability of the
Property; provided, however, that such activities by or on behalf of Buyer on the Property shall
not materially interfere with the conduct of business by Tenant under the Lease; and provided
further, however, that Buyer shall indemnify and hold Seller harmless from and against any and all
claims or damages to the extent directly resulting from the activities of Buyer on the Property
(but not claims or damages arising out of the findings of such activities), and Buyer shall repair
any and all damage caused, in whole or in part, by Buyer and return the Property to its condition
prior to such damage, which obligation shall survive Closing or any termination of this Agreement.
Seller shall reasonably cooperate with the efforts of Buyer and the Buyer’s representatives to
inspect the Property. After the Effective Date, Buyer shall be permitted to speak and meet with
Tenant in connection with Buyer’s due diligence. Buyer shall give Seller reasonable notice before
entering the Property, and Seller may have a representative present during any and all
examinations, inspections and/or studies on the Property. Buyer shall have the unconditional
right, for any reason or no reason, to terminate this Agreement with respect to all, but not less
than all, of the Properties by giving written notice thereof to Seller prior to the expiration of
the Due Diligence Period, in which event this Agreement shall become null and void, whereupon Title
Insurer shall refund the Earnest Money to Buyer (which obligation and right shall survive such
termination), and all rights, liabilities and obligations of the parties under this Agreement shall
expire, except as otherwise expressly set forth herein. If Buyer does not so terminate this
Agreement prior to the expiration of the Due Diligence Period with respect to the Properties, then
Buyer conclusively shall be deemed to have waived its right to terminate this Agreement with
respect to said Properties pursuant to this Section 6(b).



The parties hereto acknowledge that Buyer may expend material sums of money in reliance on
Seller’s obligations under this Agreement in connection with negotiating and executing this
Agreement, furnishing the Earnest Moneys, conducting the inspections contemplated by this paragraph
and preparing for Closing, and that Buyer would not have entered into this Agreement without the
availability of an Inspection Period. Therefore, the parties agree that adequate consideration
exists to support Seller’s obligations hereunder even before expiration of the Inspection Period.
Notwithstanding anything to the contrary contained herein, the effect of any representations or
warranties made by Seller in this Agreement shall not be diminished by any inspections, tests, or
investigations made by Buyer.



At no cost to Seller, Seller will cooperate with Buyer in connection with Buyer’s efforts to
obtain reliance letters issued by the authors of third party reports included among the Property
Diligence Materials in favor of the parties designated by Buyer.



(c) Seller shall deliver to Tenant an estoppel certificate in a form prepared and required by
Buyer within two (2) business following receipt of same from Buyer, but in no event shall Seller be
required to deliver any such estoppel certificate prior to the expiration of the Due Diligence
Period, and thereafter Seller shall use commercially reasonable and diligent efforts to cause
Tenant to execute the same and to deliver the same to Buyer. Seller shall promptly deliver to
Buyer photocopies of executed estoppel certificate when Seller receives the same. If Seller has
not obtain the certificate by Closing, Buyer may, in addition to its other remedies herein, adjourn
the Closing for a period of up to thirty (30) days to permit Seller to obtain the missing
certificate.



Section 7. Risk of Loss/Condemnation. Upon an occurrence of a casualty,
condemnation or taking, Seller shall notify Buyer in writing of same. Until Closing, the risk of
loss or damage to the Property shall be borne by Seller. In the event all or any portion of the
Property is damaged in any casualty or condemned or taken, Buyer may elect to terminate this
Agreement by providing written notice of such termination to Seller within ten (10) business days
after Buyer’s receipt of notice of such condemnation, taking or damage, upon which termination the
Earnest Money shall be returned to the Buyer and neither party hereto shall have any further
rights, obligations or liabilities under this Agreement, except as otherwise expressly set forth
herein. With respect to any condemnation or taking (of any notice thereof), if Buyer does not
elect to cancel this Agreement as aforesaid, there shall be no abatement of the Purchase Price and
Seller shall assign to Buyer at the Closing the rights of Seller to the awards, if any, for the
condemnation or taking, and Buyer shall be entitled to receive and keep all such awards. With
respect to a casualty, if Buyer does not elect to terminate this Agreement or does not have the
right to terminate this Agreement as aforesaid, there shall be no abatement of the Purchase Price
and Seller shall assign to Buyer at the Closing the rights of Seller to the proceeds under Seller’s
insurance policies covering such Property with respect to such damage or destruction (or pay to
Buyer any such proceeds received prior to Closing) and pay to Buyer the amount of any deductible
with respect thereto, and Buyer shall be entitled to receive and keep any monies received from such
insurance policies.



Section 8. Earnest Money Disbursement. The Earnest Money shall be held by the Title
Insurer, in trust, and disposed of only in accordance with the following provisions:



(a) Upon receipt of the Earnest Money, Title Insurer shall deliver to Seller and Buyer written
notice confirming Title Insurer’s receipt of the Earnest Money, the date on which Title Insurer
received the Earnest Money and that the Earnest Money has been deposited as required by this
Agreement. The Title Insurer shall invest the Earnest Money in a money market account reasonably
satisfactory to Buyer, and shall promptly provide Buyer and Seller with confirmation of the
investments made.



(b) Title Insurer shall pay the Initial Deposit to Seller when and as required by Section 1(d)
of this Agreement. If the Closing occurs, the Title Insurer shall deliver the Earnest Money to
Seller (or so much thereof that Title Insurer has not previously paid to Seller) at Closing and the
same shall be credited against the Purchase Price. If for any reason the Closing does not occur,
the Title Insurer shall deliver the Earnest Money to Seller or Buyer only upon receipt of a written
demand therefor from such party, except where this paragraph expressly provides for notice only
from Buyer. Subject to the last sentence of this clause (b), if for any reason the Closing does not
occur and either party makes a written demand (the “Demand”) upon the Title Insurer for
payment of the Earnest Money, the Title Insurer shall give written notice to the other party of the
Demand within one (1) business day after receipt of the Demand. If the Title Insurer does not
receive a written objection from the other party to the proposed payment within five (5) business
days after the giving of such notice by Title Insurer, the Title Insurer is hereby authorized to
make the payment set forth in the Demand. If the Title Insurer does receive such written objection
within such period, the Title Insurer shall continue to hold such amount until otherwise directed
by written instructions signed by Seller and Buyer or a final judgment of a court. Notwithstanding
the foregoing provisions of this clause (b) if Buyer delivers a notice to Title Insurer stating
that Buyer has terminated this Agreement on or prior to the expiration of the Due Diligence Period,
then Title Insurer shall immediately return the Earnest Money to Buyer without the necessity of
delivering any notice to, or receiving any notice from Seller. Notwithstanding any provision of
this Agreement to the contrary, Title Insurer shall have no obligation to return the Initial
Deposit to Buyer after Title Insurer has paid the same to Seller in accordance with the terms and
conditions of this Agreement.



(c) The parties acknowledge that the Title Insurer is acting solely as a stakeholder at their
request and for their convenience, that the Title Insurer shall not be deemed to be the agent of
either of the parties, and that the Title Insurer shall not be liable to either of the parties for
any action or omission on its part taken or made in good faith, and not in disregard of this
Agreement, but shall be liable for its negligent acts and for any liabilities (including reasonable
attorneys’ fees, expenses and disbursements) incurred by Seller or Buyer resulting from the Title
Insurer’s mistake of law respecting the Title Insurer scope or nature of its duties. Seller and
Buyer shall jointly and severally indemnify and hold the Title Insurer harmless from and against
all liabilities (including reasonable attorneys’ fees, expenses and disbursements) incurred in
connection with the performance of the Title Insurer’s duties hereunder, except with respect to
actions or omissions taken or made by the Title Insurer in bad faith, in disregard of this
Agreement or involving negligence on the part of the Title Insurer. The Title Insurer has executed
this Agreement in the place indicated on the signature page hereof in order to confirm that the
Title Insurer has received and shall hold the Earnest Money in escrow, and shall disburse the
Earnest Money pursuant to the provisions of this Section 8.



(d) Buyer and Seller, together, shall have the right to terminate the appointment of Title
Insurer hereunder by giving to it notice of such termination, specifying the date upon which such
termination shall take effect and designating a replacement Title Insurer, who shall sign a
counterpart of this Agreement. Upon demand of such successor Title Insurer, the Earnest Money shall
be turned over and delivered to such successor Title Insurer, who shall thereupon be bound by all
of the provisions hereof. Title Insurer may resign at will and be discharged from its duties or
obligations hereunder by giving notice in writing of such resignation specifying a date when such
resignation shall take effect; provided, however, that (i) prior to such resignation a substitute
escrow agent is approved in writing by Seller and Buyer, which approval shall not be unreasonably
withheld or delayed, or (ii) Title Insurer shall deposit the Earnest Money with a court of
competent jurisdiction. After such resignation, Title Insurer shall have no further duties or
liability hereunder.



(e) Title Insurer’s agreements and obligations hereunder with respect to the Earnest Money
shall terminate and Title Insurer shall be discharged from further duties and obligations hereunder
upon final payment of the Earnest Money in accordance with the terms of this Agreement.



Section 9. Default



(a) If Seller is ready, willing and able to consummate the Closing in accordance with the
terms of this Agreement, and Buyer defaults in any of its obligations undertaken in this Agreement,
and should such default continue for a period of ten (10) business days after the date on which
Buyer receives Seller’s written notice of default, then Seller shall be entitled to, as its sole
and exclusive remedy to either: (i) if Buyer is willing to proceed with Closing, waive such
default and proceed to Closing in accordance with the terms and provisions hereof; or (ii) declare
this Agreement to be terminated, and Seller shall be entitled to immediately receive all of the
Earnest Money as liquidated damages as and for Seller’s sole remedy. Upon such termination,
neither Buyer nor Seller shall have any further rights, obligations or liabilities hereunder,
except as otherwise expressly provided herein. Seller and Buyer agree that (a) actual damages due
to Buyer’s default hereunder would be difficult and inconvenient to ascertain and that such amount
is not a penalty and is fair and reasonable in light of all relevant circumstances, (b) the amount
specified as liquidated damages is not disproportionate to the damages that would be suffered and
the costs that would be incurred by Seller as a result of having withdrawn the Properties from the
market, and (c) Buyer desires to limit its liability under this Agreement to the amount of the
Earnest Money paid in the event Buyer fails to complete Closing. Seller hereby waives any right to
recover the balance of the Purchase Price, or any part thereof, and the right to pursue any other
remedy permitted at law or in equity against Buyer. In no event under this Section or otherwise
shall Buyer be liable to Seller for any punitive, speculative or consequential damages.



(b) In the event of a default in the obligations herein taken by Seller, Buyer may, either
waive such default and proceed to Closing in accordance with the terms and provisions hereof or may
in its sole discretion elect to either (i) terminate this Agreement, whereupon Title Insurer shall
return the Earnest Money to Buyer and Seller shall pay to Buyer all of the out-of-pocket costs and
expenses incurred by Buyer in connection with this Agreement (which obligations shall survive such
termination), which return and payment shall operate to terminate this Agreement and release Seller
and Buyer from any and all liability hereunder, except those which are specifically stated herein
to survive any termination hereof, or (ii) to enforce specific performance of Seller’s obligations
hereunder. Notwithstanding the foregoing, in the event of a willful or intentional default of
Seller hereunder, Buyer shall, in addition to the foregoing remedies, be permitted to pursue any
and all rights and remedies available to Buyer at law or in equity. Buyer may exercise the
foregoing remedies with respect to all of the Properties or anyone of the Properties.



Section 10. Closing. The Closing shall consist of the execution and delivery of
documents by Seller and Buyer, as set forth below, and delivery by Buyer to Seller of the Purchase
Price in accordance with the terms of this Agreement. It is expected that the parties will not
attend Closing and instead will utilize an escrow with Title Insurer. Accordingly, Seller shall
deliver to Title Insurer at least two (2) business days prior to the Closing Date (or on such other
date specified below) the following executed documents, each to be provided separately for each of
the Properties being acquired, all in form and substance reasonably satisfactory to Buyer and, as
appropriate, executed by Seller and acknowledged or notarized:



(a) one (1) original of a Special Warranty Deed conveying the Real Property to Buyer, subject
only to the Permitted Exceptions;



(b) if the legal description of the Land set forth on the survey obtained by Buyer (the
“Survey Description”) differs from the legal description of the Land set forth on the deed
by which Seller acquired title, one (1) originals of a Quit Claim Deed conveying the Real Property
to Buyer utilizing the Survey Description;



(c) two (2) originals of an assignment and assumption of the Lease and Security Deposits, in a
form acceptable to Buyer, assigning the Lease and any security deposits thereunder to Buyer;



(d) intentionally omitted;



(e) two (2) originals of the Bill of Sale in the form of Exhibit B attached hereto
from Seller to Buyer conveying the Personal Property, if any, and the Property Diligence Materials
to Buyer;



(f) two (2) originals of an Assignment of Intangible Property in the form of Exhibit C
attached hereto;



(g) two (2) originals of an assignment of the Contracts from Seller to Tenant;



(h) on the business day prior to the Closing Date, two (2) originals of a settlement statement
setting forth the Purchase Price, all prorations and other adjustments to be made pursuant to the
terms hereof, and the funds required for Closing as contemplated hereunder;



(i) all transfer tax statements, declarations and filings as may be necessary, appropriate or
required by local practice for purposes of recordation of the deed;



(j) a good standing certificate for Seller, Tenant and any guarantor of the Lease; and a
resolution of Seller authorizing the sale of the Property to Buyer, together with an incumbency
certificate for the officers signing this Agreement and such instruments as may be reasonably
required by Buyer;



(k) keys and combinations to all locks located in the Improvements;



(l) to the extent not previously delivered to Buyer, but only to the extent within Seller’s
possession or reasonable control, originals of the Due Diligence Materials and warranties issued to
Seller in connection with the construction of the Improvements (it being agreed that in the event
such warranties are not assignable to Buyer, Seller shall have such warranties re-issued to Buyer
or Tenant, as requested by Buyer); the leasing files; copies of all books and records applicable to
the Property which are identified by Buyer by written notice to Seller and reasonably necessary for
the orderly transition of operation of the Property; and readable electronic copies thereof in
Microsoft Word or other similar format;



(m) to the extent not previously delivered to Buyer, the Lease, bearing the original
signatures of the landlord and tenant thereunder, or a copy thereof bearing an original
certification of Tenant confirming that the copy is true, correct and complete;



(n) an original estoppel certificate from Tenant in a form acceptable to Buyer and which does
not assert any defaults, offsets, defenses, punchlist items or claims under the Lease and which is
dated not earlier than thirty (30) days prior to the date of Closing. In addition, the business
terms of such estoppel certificate must be in accordance with and not contradict the Leases;



(o) a certificate as may be required by the Internal Revenue Service pursuant to Section 1445
of the Internal Revenue Code of 1986, as amended, or the regulations issued pursuant thereto (the
“Code”), certifying the non-foreign status of Seller;



(p) such affidavits or other instruments as the Title Insurer shall require in order to issue
policies of title insurance (i) free of any exceptions for unfiled mechanics’ or materialmen’s
liens for work performed prior to Closing, (ii) free from the claim of parties in possession other
than the Tenant, and (iii) providing for such other customary matters as Title insurer shall
request;



(q) such original documentation from Brokers as may be reasonably required to evidence the
satisfaction or waiver, and release, of all liens that Brokers may have in connection with a claim
for commissions or other compensation due to the Closing of the transaction contemplated by this
Agreement, and in form and substance reasonably acceptable to Title Insurer and which will permit
Title Insurer to issue its title insurance policy to Buyer without exception for and insuring
against such Broker claims.



(r) Two original recertifications by Seller of the representations and warranties of Seller
made under this Agreement;



(s) Evidence of a waiver of rights, in form and substance reasonably acceptable to Buyer, from
each party having a right or option to purchase the Property (or any portion thereof) from Seller
other than the Charlottesville Lease option to purchase;



(t) Notices to tenants under the Leases, in the form prepared by Buyer and duly executed by
Seller, advising the tenants of the sale of the Property and directing that rent and other payments
thereafter be sent to Buyer (or its agent) at the address provided by Buyer at Closing, unless
otherwise directed by Buyer;



(u) a certificate of insurance or other evidence reasonably satisfactory to Buyer
memorializing and confirming that Tenant is then maintaining policies of insurance of the types and
in the amounts required by the Lease, in the form required by the Lease; and



(v) such other instruments as are reasonably required by Title Insurer to close the escrow and
consummate the purchase of the Property in accordance with the terms hereof.



In addition to the obligations required to be performed hereunder by the parties at Closing,
each of the parties agrees to perform such other acts, and to execute, acknowledge and deliver,
prior to, at or subsequent to Closing, such other applications, notices, instruments, documents and
other materials as the other may reasonably request when and as necessary (as reasonably determined
by the requesting party or its counsel) in order to effect the consummation of the transactions
contemplated hereby and to lawfully vest title to the Property in Buyer. The foregoing shall
include, without limitation, those actions and items required by all Health Care Regulatory
Agencies (defined below) having jurisdiction over the Property, the ownership, operation,
maintenance, management, use, regulation, development, expansion or construction thereof, the
provision of health care services thereon, the reimbursement of health care costs relating thereto,
or which grant, issue or regulate any licenses, permits, accreditations, provider numbers,
approvals, qualifications, certifications, and other authorizations granted by any Health Care
Regulatory Agency or other governmental authority, accreditation organization or Third Party Payor
(defined below) relating to or affecting the Property, the establishment, construction, ownership,
operation, maintenance, management, use, regulation, development, expansion or construction
thereof, the provision of health care services thereon, and/or the reimbursement of healthcare
costs relating thereto (collectively, the foregoing being referred to herein as the “Regulatory
Approvals”). Each party shall proceed with diligence and in cooperation with the other party to
obtain the Regulatory Approvals at the earliest possible opportunity. As used in this paragraph,
the term (i) “Health Care Regulatory Agency” shall mean all agencies, boards, authorities,
bodies, accreditation organizations and governmental authorities with jurisdiction over the
Regulatory Approvals; and (ii) the term “Third Party Payor” shall mean Medicare, Medicaid,
Tricare, Veteran’s Administration, commercial and private insurers, managed care company, employee
assistance programs, HMOs, preferred provider organizations and any other governmental, commercial,
or other organization which maintains a healthcare reimbursement program or policy. This paragraph
and the obligations of the parties hereunder shall survive the Closing.



At Closing, Buyer shall instruct the Title Insurer to deliver the Earnest Money to Seller which
shall be applied to the Purchase Price, shall deliver the balance of the Purchase Price to Seller
and shall execute and deliver two (2) original execution counterparts of the Closing documents
referenced above to be executed by Buyer. Buyer shall have a one time right to extend the Closing
for up to thirty (30) days upon written notice to Seller to be received by Seller on or prior to
the date scheduled for the Closing, provided that, as a condition to the effectiveness of such
extension, Buyer shall deposit the Final Deposit with Title Insurer. The Closing shall be held
through the mail by delivery of the closing documents to the parties on or prior to the Closing or
such other place or manner as the parties hereto may mutually agree.



Section 11. Representations by Seller. For the purpose of inducing Buyer to enter
into this Agreement and to consummate the sale and purchase of the Property in accordance herewith,
each of the Albemarle Seller and CLC Seller make the following representations and warranties to
Buyer, with respect to only itself and the Property(ies) owned by such Seller, as of the date
hereof and as of the Closing Date, which shall survive the Closing for a period of one (1) year.



(a) Seller is duly organized, validly existing and in good standing under the laws of its
state of organization, and (if different than the state of organization) the State in which the
Property is located. Seller is authorized to consummate the transaction set forth herein and
fulfill all of its respective obligations hereunder and under all closing documents to be executed
by Seller, and has all necessary power to execute and deliver this Agreement and all closing
documents to be executed by Seller, and to perform all of Seller’s obligations hereunder and
thereunder. Neither the execution and delivery of this Agreement and all closing documents to be
executed by Seller, nor the performance of the obligations of Seller hereunder or thereunder will
result in the violation of any applicable municipal, county, state and federal laws, ordinances,
regulations, statutes, administrative rulings or restrictive covenants (“Laws”) or any
provision of the organizational documents of or will conflict with any order or decree of any court
or governmental instrumentality of any nature by which Seller is bound;



(b) Seller, alone, has, and at Closing hereunder will convey and transfer to Buyer,
indefeasible, good and marketable legal and equitable fee simple title to the Real Property, free
and clear of all mortgages, liens, claims, judgments, encumbrances, ground rents, leases,
tenancies, licenses, security interests, covenants, conditions, restrictions, rights of way,
easements, encroachments and any other matters affecting title, except only the Permitted
Exceptions. Each individual Property consists of a single contiguous parcel.



(c) Seller has not received any written notice of any current or pending litigation, action,
proceeding (including condemnation proceeding), tax appeals (or other similar proceedings
challenging or seeking to reduce the assessed valuation of the Real Property) or environmental
investigations against Seller, the Property or in connection with the business operated at the Real
Property and Seller does not have any knowledge of any threatened litigation, action, proceeding,
tax appeals or environmental investigations against Seller or the Property;



(d) Permanent certificates of occupancy and all other licenses, permits, authorizations,
consents, approvals and other grants of authority required by all governmental or
quasi-governmental authorities having jurisdiction, and the requisite certificates of the local
board of fire underwriters (or other body exercising similar functions), if any, have been issued
for the Improvements which are a part of the Property, and for the full functioning and operation
of the Property, have been paid for in full, and are in full force and effect.



(e) None of the Contracts will be binding upon Buyer after the Closing other than the Lease;



(f) Except for defaults cured on or before the date hereof, Seller has not received any
written notice of default under the terms of any of the Contracts;



(g) Except for violations cured or remedied on or before the date hereof, Seller has not
received any written notice from (or delivered any notice to) any governmental authority regarding
any violation of any Laws applicable to the Property and Seller does not have knowledge of any such
violations. Seller shall cure or comply with, prior to Closing or as soon thereafter as reasonably
practical, any violation or notice of which Seller or Buyer receives written notice prior to the
Closing from any of the foregoing governmental, quasi-governmental or nongovernmental authorities;



(h) No written or oral notice has been given to Seller by any holder of any mortgage or deed
of trust on the Property, by any insurance company which has issued a policy with respect to any of
the Property, or by any board of fire underwriters (or other body exercising similar functions),
any of which notices claim any defect or deficiency or request the performance of any repairs,
alterations or other work to the Property;



(i) With respect to the Lease: (i) the copy of each Lease delivered to Buyer is a true,
correct and complete copy of the Lease, and the Lease is the only lease, license or occupancy
agreement relating to the Property; (ii) the Lease is valid, subsisting and in full force and
effect on the terms set forth therein, and has not been modified, in writing or otherwise, except
as set forth on said Schedule; (iii) Seller has not delivered a written notice to Tenant informing
Tenant that it is in default of the Lease, nor has Seller received from Tenant a written notice
asserting that Seller is in default, and to the best knowledge of Seller, neither Seller nor Tenant
is in default of their respective obligations under the Lease; (iv) Seller has no knowledge of any
claims, offsets or defenses by Tenant under the Lease; (v) no brokerage or leasing commissions or
other compensation is or will be due or payable to any person, firm, corporation or other entity
with respect to or on account of the current term of the Lease or any extension or renewal thereof;
(vi) Seller has no outstanding obligation to provide Tenant with an allowance of any kind or to
construct any improvements to the Real Property; (vii) Seller has not received rent or other
charges from any Tenant more than one (1) month in advance; (viii) Seller has no reason to believe
that the Tenant or any guarantor of a Lease is or may become unable or unwilling to perform any of
its obligations under the Lease for any reason; (ix) no guarantor has been released or discharged,
voluntarily or involuntarily or by operation of law, from any obligation with respect to the Lease
that is guaranteed; (x) Seller has not applied and shall not apply all or any portion of the
security deposit under the Lease to any Rent, and (xi) no Rents have been assigned, pledged or
encumbered.



(j) Neither this Agreement nor the consummation of the transactions contemplated hereby is
subject to any first right of refusal or other purchase right in favor of any other person or
entity, except for the rights granted to each Tenant of the Charlottesville Property and the Willow
Creek Property pursuant to the applicable Lease for each; and apart from this Agreement and as
aforesaid, Seller has not entered into any written agreements for the purchase or sale of the
Property, or any interest therein which remain in effect.



(k) The Property is now and has at all times been in compliance in all material respects with
all Laws. Seller has not received any written notice that the Property or Seller’s use and
occupancy thereof violates any Laws.



(l) Seller is not a “foreign person” under the Foreign Investment in Real Property Tax Act of
1980 (“FIRPTA”) and upon consummation of the transaction contemplated hereby, Buyer will
not be required by FIRPTA to withhold from the Purchase Price any withholding tax;



(m) There are no employees of Seller engaged in the operation or maintenance of the Property;



(n) Seller has not initiated or participated in, any action for a change or modification in
the current subdivision, site plan, zoning or other land use permits for the Property; and



(o) During the period of Seller’s ownership of the Real Property, no Hazardous Substances have
been generated, stored, released, or disposed of on or about the Real Property in violation of any
law, rule or regulation applicable to the Property which regulates or controls matters relating to
the environment or public health or safety (collectively, “Environmental Laws”), and to
Seller’s knowledge, prior to Seller’s ownership of the Real Property, no Hazardous Substances have
been generated, stored, released, or disposed of on or about the Real Property in violation of any
Environmental Laws. Seller has not received any written notice from (nor delivered any notice to)
any federal, state, county, municipal or other governmental department, agency or authority
concerning any petroleum product or other hazardous substance discharge or seepage. As used in
this Agreement, the term “Hazardous Substances” shall mean any substance or material which
is defined or deemed to be hazardous or toxic pursuant to any Environmental Laws. To Seller’s best
knowledge, there are no underground storage tanks located on the Property.



(p) No consent, approval or other action of, or filing on registration with, any governmental
agency, commission or office is required on Seller’s behalf with respect to the transaction
contemplated herein except such approval as may be required by the Virginia Department of Health.



(q) No litigation or proceeding before any commission, agency or other administrative
authority is pending or threatened against or affecting the Property or Seller’s use of the
Property or arising out of or by virtue of the ownership or use by Seller of the Property. No
pending or threatened judicial, municipal, health or administrative proceeding exists which affects
the Property or Seller’s use of the Property, or in which Seller is or may be a party by reason of
the ownership or use by Seller of all or any part of the Property.



(r) There are not any outstanding, cited or proposed deficiencies, sanctions or work orders of
any authority related to the Property and the operation of the Property.



(s) All water, sewer, gas, electric, telephone, and other public utilities and all storm water
drainage required by law or necessary for the current operation of the Real Property (1) either
enter the Real Property through open public streets adjoining the Land, or, if they pass through
adjoining private land, do so in accordance with valid public or private easements or rights of way
which will inure to the benefit of Buyer, (2) are installed, connected and operating, in good
condition, with all installation and connection charges paid in full, including, without
limitation, connection and the permanent right to discharge sanitary waste into the collector
system of the appropriate sewer authority, and (3) are adequate to service the Real Property for
their current use. No moratorium, proceeding or other fact or condition exists which threatens to
impair continued furnishing of such services to the Real Property at regular rates and fees. Water
and sanitary sewer are public.



(t) No work has been performed or is in progress at, and no materials have been furnished to,
the Real Property which, though not presently the subject of, might give rise to, mechanics’,
material suppliers’, or other liens against the same or any portion thereof. If any lien for such
work is filed before or after Closing hereunder, Seller shall promptly discharge the same at its
cost.



(u) All books, records, maintenance and service records, rent rolls, bills, invoices and
related documentation furnished or made available by Seller to Buyer are complete, true and correct
and fairly present the financial condition, assets and liabilities relating to the Property and the
results of operations for such periods, have been prepared in accordance with federal income tax
accounting principles consistently maintained since the beginning of the periods covered thereby.
There has been no material adverse change in the operation of the Property since the effective date
of the foregoing financial statements.



(v) Buyer hereby acknowledges, understands and agrees that it has an opportunity to inspect
the Property as set forth in Section 6 herein, and except as set forth in this Agreement, the
Property shall be conveyed at Closing to Buyer in “as-is” condition with no representation or
warranties whatsoever. Notwithstanding the foregoing, Seller shall promptly notify Buyer of any
change in any condition with respect to the Property or of any event or circumstance which makes
any representation or warranty of Seller to Buyer under this Agreement untrue or misleading, or any
covenant of Buyer under this Agreement incapable or less likely of being performed, it being
understood that Seller’s obligation to provide notice to Buyer under this Section shall in no way
relieve Seller of any liability for a breach by Seller of any of its representations, warranties or
covenants under this Agreement.



The representations and warranties of Seller contained in this Agreement shall have been true
when made and shall be true in all material respects at and as of the date of Closing as if such
representations and warranties were made at and as of the Closing, and Seller shall have performed
and complied in all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by Seller prior to or at the Closing.



Section 12. Buyer’s Representations. Buyer represents and warrants to, and
covenants with, Seller that Buyer is duly formed, validly existing and in good standing under the
laws of Delaware and is authorized to consummate the transaction set forth herein and fulfill all
of its obligations hereunder and under all closing documents to be executed by Buyer. Buyer has
all necessary power to execute and deliver this Agreement and all closing documents to be executed
by Buyer, and to perform all of Buyer’s obligations hereunder and thereunder. This Agreement and
all closing documents to be executed by Buyer have been (or as of Closing will have been) duly
authorized by all requisite corporate or other required action on the part of Buyer and are the
valid and legally binding obligation of Buyer, enforceable in accordance with their respective
terms. Neither the execution and delivery of this Agreement and all closing documents to be
executed by Buyer, nor the performance of the obligations of Buyer hereunder or thereunder will
result in the violation of any law or any provision of the organizational documents of Buyer or
will conflict with any order or decree of any court or governmental instrumentality of any nature
by which Buyer is bound.



Section 13. Conditions to Buyer’s Obligations. All of Buyer’s obligations hereunder
(including, without limitation, Buyer’s obligation to pay the Purchase Price, to accept title to
the Property and to consummate the Closing) are expressly conditioned on the satisfaction at or
before the time of Closing of the following conditions precedent being fully satisfied as of the
Closing (any one or more of which may be waived in writing in whole or in part by Buyer, at Buyer’s
option):



(a) At Closing, Seller shall deliver possession of the Property to Buyer free and clear of all
tenancies and other occupancies except for the Lease;



(b) Seller shall deliver to Buyer on or before the Closing the items set forth in Section 10
above that Seller is obligated to deliver as of the Closing;



(c) Buyer shall receive from Title Insurer or any other title insurer approved by Buyer in its
judgment and discretion, a current ALTA owner’s form of title insurance policy, or irrevocable and
unconditional binder to issue the same, with extended coverage for the Real Property in the amount
of the Purchase Price, dated, or updated to, the date of the Closing, insuring, or committing to
insure, at its ordinary premium rates Buyer’s good and marketable title in fee simple to the Real
Property and otherwise in such form and with such endorsements as provided in the title commitment
approved by Buyer pursuant to Section 6 hereof, subject only to the Permitted Exceptions;



(d) The Real Property shall have a valid, permanent and unconditional certificate of occupancy
(or the equivalent thereof) for the use and occupancy of the Property by Tenant (to the extent
required by applicable law), and Buyer shall have received a copy of such certificates in Seller’s
possession or reasonably within Seller’s control;



(e) More than ninety percent (90%) of all amounts to be paid pursuant to Lease (and any other
lease that will be in effect following Closing) will qualify as “rents from real property” for
purposes of Section 856(c)(3)(A) of the Code.



(f) Tenant shall be in possession of the premises demised under the Lease, open for business
to the public and paying full and unabated rent under the Lease;



(g) Between the date hereof and the Closing Date, there shall have been no material adverse
change in the financial or physical condition of the Property or the business operated thereon;



(h) The municipality in which the Property is located issues all certificates, permits and
inspection and other approvals that may be required as a condition to the transfer of the Property
to Buyer; and



(l) Seller shall have timely given all notices required under applicable Laws of the
transaction contemplated herein to the Virginia Department of Health. and, promptly upon delivery
of such notice, Seller shall provide reasonable evidence of such delivery to Buyer.



If any of the foregoing conditions precedent have not been satisfied as of Closing, Buyer may
either: (i) waive any unsatisfied conditions and proceed to Closing in accordance with the terms
and provisions hereof with no deduction from or adjustment of the Purchase Price except for (a)
adjustment equal to the amount required to satisfy and discharge of record at or before Closing of
any and all lien, judgment or other encumbrance which can be removed by the payment of a fixed and
ascertainable amount together with interest and penalties thereon, if any, and together with any
additional title insurance costs or premiums imposed by Title Insurer by reason thereof, and (b)
the cost of curing any failed condition precedent to the extent reducible to a liquidated sum; (ii)
terminate this Agreement by delivering written notice thereof to Seller no later than Closing, upon
which termination the Earnest Money shall be refunded to Buyer and Seller shall reimburse Buyer for
all title insurance company charges, survey charges, attorneys’ fees and other out-of-pocket costs
incurred in connection with the transactions contemplated by this Agreement, all obligations,
liabilities and rights of the parties under this Agreement shall terminate. If any of the
foregoing conditions precedent have not been satisfied as of Closing with respect to only some of
the Properties, then Buyer may make a separate election in accordance with this paragraph with
respect to each of said Properties.



Section 14. Conditions to Seller’s Obligations. Seller’s obligation to deliver
title to the Property shall be subject to compliance by Buyer with the following conditions
precedent on and as of the date of Closing:



(a) Buyer shall deliver to Seller on the Closing Date the remainder of the Purchase Price,
subject to adjustment of such amount pursuant to Section 2 hereof;



(b) Buyer shall deliver to Seller on or before the Closing the items set forth in Section 10
above that Buyer is obligated to deliver; and



(c) The representations and warranties of Buyer contained in this Agreement shall have been
true when made and shall be true in all material respects at and as of the date of Closing as if
such representations and warranties were made at and as of the Closing, and Buyer shall have
performed and complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by Buyer prior to or at the Closing.



Section 15. Notices. Unless otherwise provided herein, all notices and other
communications which may be or are required to be given or made by any party to the other in
connection herewith shall be in writing and shall be deemed to have been properly given and
received on the date received if: (i) delivered in person, (ii) deposited in the United States
mail, registered or certified, return receipt requested, or (iii) deposited with a nationally
recognized overnight courier, to the addresses set out in Section 1, or at such other addresses as
specified by written notice delivered in accordance herewith. Notices may be given on a party’s
behalf by its attorney.



Section 16. Seller Covenants. Seller agrees that, with respect to each of the
Properties, it: (a) shall continue to operate and manage the Property in a prudent and
businesslike manner and in the same manner in which Seller has previously operated and managed the
Property, and in doing so, Seller shall not take any action, or fail to take any action which would
cause the Property to be operated, managed and maintained (1) in violation or continued violation
of any applicable law, (2) in a manner the result of which would have a material adverse effect on
the Property or Buyer’s ability to continue the operation thereof after the Closing in
substantially the same manner as now conducted, or (3) which would cause any of the representations
and warranties of Seller contained in this Agreement to be incorrect, incomplete or misleading in
any material respect as of the Closing; (b) shall make all necessary repairs and replacements
required to keep the Property in good repair and working order and in substantially the same
condition as the date hereof; (c) shall maintain in full force and effect all insurance policies in
place with respect to the Property as of the Effective Date; (d) shall not, without Buyer’s prior
written consent: (i) amend the Lease in any manner, nor enter into any new lease, license
agreement or other occupancy agreement with respect to the Property; (ii) consent to an assignment
of the Lease or a sublease of the premises demised thereunder or a termination or surrender
thereof; (iii) terminate the Lease nor release any guarantor of or security for any Lease; and/or
(iv) cause, permit or consent to an alteration of the Real Property unless such consent is
non-discretionary); and (e) shall perform when due all of Seller’s obligations under the Leases and
the Contracts, under all governmental approvals, and under all other agreements relating to the
Property; and Seller shall comply with all applicable laws, ordinances, rules and regulations
affecting the Property, and duly and timely file all tax reports required to be filed by Seller and
promptly pay when due all federal, state and local taxes and assessments, charges, fees, interest
and penalties levied on Seller or the Property. Seller shall promptly inform Buyer in writing of
any material event adversely affecting the ownership, use, occupancy or maintenance of the
Property, whether insured or not.



Section 17. Guaranty of Seller Obligation. As a condition precedent to Buyer
executing this Agreement, James R. Smith and James R. Pietrzak (collectively the
“Guarantor”), by execution of this Agreement, guaranty and agree to be liable for the
performance by Seller of its obligations under this Agreement, including without limitation (a) the
obligation to repay the Initial Deposit to Buyer as required by this Agreement after Title Insurer
has paid the Initial Deposit to Seller, and (b) the obligation to pay Buyer all of the
out-of-pocket costs and expenses incurred by Buyer in connection with this Agreement following a
termination of this Agreement pursuant to Section 9(b) hereof.



Section 18. Computation of Time; Performance on Business Days. In computing any
period of time pursuant to this Agreement, the day of the act or event from which the designated
period of time begins to run will not be included. The last day of the period so computed will be
included, unless it is a Saturday, Sunday or a Holiday, in which event the period runs until the
end of the next day which is not a Saturday, Sunday or such legal holiday. The term “business day”
shall mean Monday through Friday, except for a Holiday. The term “Holiday” shall mean Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and New Year’s Day. All
references to a period of days in this Lease shall be deemed to refer to calendar days unless the
term “business day” is used.



Section 19. Entire Agreement; Modification. This Agreement constitutes the sole and
entire agreement among the parties hereto and no modification of this Agreement shall be binding
unless in writing and signed by Seller and Buyer. No signature of Title Insurer shall be required
to amend this Agreement except for an amendment modifying the terms of Section 8 of this Agreement.
No prior agreement or understanding pertaining to the subject matter hereof (including, without
limitation, any letter of intent executed prior to this Agreement) shall be valid or of any force
or effect from and after the date hereof. Any rule of construction which provides that ambiguities
are to be resolved against the drafting party shall not apply to the interpretation of this
Agreement.



Section 20. Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall be invalid or unenforceable, at any time or to any
extent, then the remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall not be affected
thereby. Each provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law



Section 21. Applicable Law. This Agreement shall be construed under the laws of the
State in which the Property is located, without giving effect to any state’s conflict of laws
principles.



Section 22. Broker’s Commissions. Buyer and Seller each hereby represent that,
except for the Broker listed herein, there are no other brokers involved or that have a right to
proceeds in this transaction. Seller shall be responsible for payment of commissions to the Broker
pursuant to a separate written agreement executed by Seller. Seller and Buyer each hereby agree to
indemnify and hold the other harmless from all loss, cost, damage or expense (including reasonable
attorneys’ fees at both trial and appellate levels) incurred by the other as a result of any claim
arising out of the acts of the indemnifying party (or others on its behalf) for a commission,
finder’s fee or similar compensation made by any broker, finder or any party who claims to have
dealt with such party (except that Buyer shall have no obligations hereunder with respect to any
claim by Broker). The representations, warranties and indemnity obligations contained in this
section shall survive the Closing or the earlier termination of this Agreement.



Section 23. Assignment. Buyer may assign its rights under this Agreement, provided,
however, that no such assignment shall relieve Buyer of any of its obligations hereunder until
Closing is complete. If this Agreement relates to more than one Property, Buyer may assign this
Agreement in part with respect to individual Properties to facilitate the acquisition of each
Property by a separate entity formed by Buyer.



Section 24. Attorneys’ Fees. In any action between Buyer and Seller as a result of
a party’s failure to perform or a default under this Agreement, the prevailing party shall be
entitled to recover from the other party, and the other party shall pay to the prevailing party,
the prevailing party’s attorneys’ fees, expenses and court costs incurred in such action.



Section 25. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and shall become a
binding agreement when one or more counterparts have been signed by each of the parties and
delivered to the other party. Signatures on this Agreement which are transmitted by electronically
shall be valid for all purposes, however any party shall deliver an original signature on this
Agreement to the other party upon request.



Section 26. Anti-Terrorism. Neither Buyer or Seller, nor any of their affiliates,
are in violation of any Anti-Terrorism Law (as hereinafter defined) or engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. “Anti-Terrorism
Laws” shall mean any laws relating to terrorism or money laundering, including: Executive Order No.
13224; the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or may hereafter be,
renewed, extended, amended or replaced; the applicable laws comprising or implementing the Bank
Secrecy Act; and the applicable laws administered by the United States Treasury Department’s Office
of Foreign Asset Control (as any of the foregoing may from time to time be amended, renewed,
extended, or replaced).



Section 27. Cooperation with Audit. Seller acknowledges that Buyer intends to
assign all of its rights, title and interest in and to this Agreement. The assignee may be
affiliated with a publicly registered company (“Registered Company”) promoted by Buyer.
Seller acknowledges that it has been advised that if the Buyer is affiliated with a Registered
Company, the assignee may be required to make certain filings with the Securities and Exchange
Commission (the “SEC Filings”) that relate to the three (3) most recent pre-acquisition
fiscal years (the “Audited Years”) and the current fiscal year through the date of
acquisition (the “stub period”) for the Property. To assist the assignee in preparing the
SEC Filings, the Seller covenants and agrees to provide the assignee with the following during the
Due Diligence Period and any time thereafter until the first anniversary of the Closing Date: (i)
access to bank statements for the Audited Years and stub period; (ii) rent roll as of the end of
the Audited Years and stub period; (iii) operating statements for the Audited Years and stub
period; (iv) access to the general ledger for the Audited Years and stub period; (v) cash receipts
schedule for each month in the Audited Years and stub period; (vi) access to invoices for expenses
and capital improvements in the Audited Years and stub period; (vii) accounts payable ledger and
accrued expense reconciliations; (viii) check register for the 3-months following the Audited Years
and stub period; (ix) all leases and 5-year lease schedules; (x) copies of all insurance
documentation for the Audited Years and stub period; (xi) copies of accounts receivable aging as of
the end of the Audited Years and stub period along with an explanation for all accounts over 30
days past due as of the end of the Audited Years and stub period; (xii) signed representation
letter in the form attached hereto as Schedule “27-A” (“Representation Letter”),
and (xiii) to the extent necessary, the information set forth in the letter set forth in the form
attached hereto as Schedule “27-B”(“Audit Letter”). Seller also agrees to deliver
to Buyer a signed Representation Letter and the information requested in the Audit Letter within
five (5) business days prior to Closing, and such delivery shall be a condition to Closing so long
as such request is made during the Due Diligence Period. The provisions of this Section shall
survive Closing.



Section 28. Buyer’s Disclosures. Seller acknowledges that Buyer may assign this
Agreement to a subsidiary of an entity that may elect to qualify as a Real Estate Investment Trust
(“REIT”) and that, as such, it is subject to certain filing and reporting requirements in
accordance with federal laws and regulations, including but not limited to, regulations promulgated
by the Securities and Exchange Commission. Accordingly, and notwithstanding any provision of this
Agreement or the provisions of any other existing agreement between the parties hereto to the
contrary, Buyer may publicly file, disclose, report or publish any and all information related to
this transaction that may be reasonably interpreted as being required by federal law or regulation
after Closing.



The remainder of this page is intentionally blank. Signatures follow on the next page.





1






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



“BUYER”:



GRUBB & ELLIS EQUITY ADVISORS, LLC,


a Delaware limited liability company



By: /s/ Michael J. Rispoli

Michael J. Rispoli

Chief Financial Officer



June 28, 2010



“SELLER”:



ALBEMARLE SELLER:



ALBEMARLE HEALTH INVESTORS, LLC





a Virginia limited liability company



By: /s/ James R. Pietrzak

James R. Pietrzak

Vice Chairman Manager




CLC SELLER:



CLC RE, LLC



By: CLC HEALTH INVESTORS, LLC


Its Sole Member



By: /s/ James R. Pietrzak

James R. Pietrzak

Vice Chairman Manager




By signing below, the undersigned acknowledge and agree to be bound by the terms of this
Agreement pursuant to Section 17 above.



GUARANTOR:



/s/ James R. Smith


James R. Smith

/s/ James R. Pietrzak

James R. Pietrzak



THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS AGREEMENT
RELATING TO TITLE INSURER AND THE DEPOSIT.



TITLE INSURER:



FIRST AMERICAN TITLE INSURANCE COMPANY



By: /s/ Barbara Laffor

Barbara Laffor

Escrow Officer



June 29, 2010




2