Document:

EX-10.13

ENVIRONMENTAL INDEMNITY AGREEMENT

This Environmental Indemnity Agreement (this “Agreement”), which is dated as of June
24, 2008, is executed by G&E HEALTHCARE REIT NUTFIELD PROFESSIONAL CENTER, LLC, a Delaware limited
liability company (“Nutfield Borrower”), and GRUBB & ELLIS HEALTHCARE REIT, INC., a
Maryland corporation (“Indemnitor”), in favor of WACHOVIA FINANCIAL SERVICES, INC., a North
Carolina corporation, as administrative agent for the “Lenders” pursuant to the Loan Agreement
described below (in such capacity, “Administrative Agent”) and in favor of each party that
now or hereafter is bound under the Loan Agreement as a “Lender” (referred to herein individually
as a “Lender” and collectively as “Lenders”).

RECITALS

A. Lenders have agreed upon certain conditions to make a loan to Nutfield Borrower, G&E
Healthcare REIT 5995 Plaza Drive, LLC, a Delaware limited liability company, G&E Healthcare REIT
Epler Parke Building B, LLC, a Delaware limited liability company, G&E Healthcare REIT Academy,
LLC, a Delaware limited liability company, and G&E Healthcare REIT Medical Portfolio 2, LLC, a
Delaware limited liability company (collectively, “Borrower”), in the maximum principal
amount of up to Fifty Million Three Hundred Twenty-One Thousand Five Hundred and No/100 Dollars
($50,321,500.00) (“Loan”), which Loan is evidenced by one or more promissory notes, each
now or hereafter executed by Borrower to one or more Lenders, in the aggregate principal amount of
$50,321,500.00 (“Notes”), and which Loan and Notes are secured by, among other documents,
that certain Mortgage, Assignment, Security Agreement and Fixture Filing (“Mortgage”) of
even date herewith, executed by Nutfield Borrower for the benefit of Administrative Agent,
encumbering certain real and personal property as therein described (collectively, the
"Property”), including the land described in Exhibit A which is attached hereto and
made a part hereof; and

B. Borrower has entered into a Loan Agreement (“Loan Agreement”) with Administrative
Agent and Lenders, relating to the Loan; and

C. Administrative Agent is acting as the agent for all of the Lenders now or hereafter
existing under the Loan Agreement; and

D. Lenders have refused to make the Loan to Borrower unless this Agreement is executed by
Nutfield Borrower and Indemnitor and is delivered to Administrative Agent (on behalf of Lenders).

NOW, THEREFORE, in consideration of Administrative Agent’s and Lenders’ entering into the Loan
Agreement and of other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by Nutfield Borrower and Indemnitor, Nutfield Borrower and Indemnitor hereby
agree that the foregoing recitals are true and correct and are by this reference hereby made a part
hereof as if fully set forth below, and further covenant and agree with Administrative Agent and
Lenders, and their respective successors and assigns, as follows:

1. Certain Definitions. As used in this Agreement:

"C.C.P.” means the California Code of Civil Procedure, as amended from time to time.

"Claim” means any controversy or claim between one or more Obligors and Administrative
Agent or any Lender, whether arising in contract or tort or by statute, that arises out of or
relates to this Agreement, including any renewals, extensions or modifications hereof.

"Cut-Off Date” means the earlier of the following two dates: (a) the date on which
the indebtedness and obligations secured by the Mortgage have been paid and performed in full and
the Mortgage has been released; or (b) the date on which the lien of the Mortgage is fully and
finally foreclosed or a conveyance by deed in lieu of such foreclosure is fully and finally
effective and possession of the Property has been given to and accepted by the purchaser or grantee
free of occupancy and claims to occupancy by Obligors and their heirs, devisees, representatives,
successors and assigns; provided, however, that if such payment, performance, release, foreclosure
or conveyance is challenged in proceedings under any Debtor Relief Law or otherwise, the Cut-Off
Date shall be deemed not to have occurred until such challenge is validly released, dismissed with
prejudice or otherwise barred by law from further assertion.

"Debtor Relief Law” means any federal, state or local law, domestic or foreign, as now
or hereafter in effect relating to bankruptcy, insolvency, liquidation, receivership,
reorganization, arrangement, composition, extension or adjustment of debts, or any similar law
affecting the rights of creditors.

"Default” has the meaning ascribed to such term in the Mortgage and includes any
breach of any covenant, representation or warranty and any other default under this Agreement,
subject to any applicable notice and cure period.

"Default Rate” is the rate set forth in the last sentence of Section 2.3(b) of the
Loan Agreement.

"Environmental Assessment” means a report (including all drafts thereof) of an
environmental assessment of the Property of such scope as may be requested by Administrative Agent
or another Indemnified Party, including the taking of soil borings and air and groundwater samples
and other above- and below-ground testing, by a consulting firm acceptable to such Indemnified
Party and made in accordance with the established guidelines of such Indemnified Party.

"Environmental Claim” means any investigative, enforcement, cleanup, removal,
containment, remedial or other private or governmental or regulatory action at any time threatened,
instituted or completed pursuant to any applicable Environmental Requirement, against Nutfield
Borrower or any Obligor against or with respect to the Property or any condition, use or activity
on the Property (including any such action against any Indemnified Party), and any claim at any
time threatened or made by any person against any Obligor or against or with respect to the
Property or any condition, use or activity on the Property (including any such claim against any
Indemnified Party), relating to damage, contribution, cost recovery, compensation, loss or injury
resulting from or in any way arising in connection with any Hazardous Material or any Environmental
Requirement.

"Environmental Damages” means all claims, demands, liabilities (including strict
liability), losses, damages (including consequential damages), causes of action, judgments,
penalties, fines, reasonable costs and expenses (including reasonable fees, costs and expenses of
attorneys, consultants, contractors, experts and laboratories), of any and every kind and
character, contingent or otherwise, matured or unmatured, known or unknown, foreseeable or
unforeseeable, made, incurred, suffered, brought, or imposed at any time and from time to time, and
arising in whole or in part from any of the following matters, regardless of whether caused by an
Obligor or a tenant or subtenant, or a prior owner of the Property or its tenant or subtenant, or
any third party:

(a) The presence of any Hazardous Material on the Property, or any escape, seepage,
leakage, spillage, emission, release, discharge or disposal of any Hazardous Material on or
from the Property, or the migration or release or threatened migration or release of any
Hazardous Material to, from or through the Property, on or before the Cut-Off Date; or

(b) Any act, omission, event or circumstance existing or occurring in connection with
the handling, treatment, containment, removal, storage, decontamination, cleanup, transport
or disposal of any Hazardous Material which is or was present on the Property on or before
the Cut-Off Date; or

(c) The breach of any representation, warranty, covenant or agreement contained in this
Agreement because of any event or condition occurring or existing on or before the Cut-Off
Date; or

(d) Any violation relating to the Property on or before the Cut-Off Date, of any
Environmental Requirement in effect on or before the Cut-Off Date, regardless of whether any
act, omission, event or circumstance giving rise to the violation constituted a violation at
the time of the occurrence or inception of such act, omission, event or circumstance; or

(e) Any Environmental Claim, or the filing or imposition of any environmental lien
against the Property, because of, resulting from, in connection with, or arising out of any
of the matters referred to in the preceding clauses (a) through (d).

Without limiting the generality of the foregoing, “Environmental Damages” includes:
(i) the investigation or remediation of any such Hazardous Material or violation of any such
Environmental Requirement, including the preparation of any feasibility studies or reports and the
performance of any cleanup, remediation, removal, response, abatement, containment, closure,
restoration, monitoring or similar work required by any Environmental Requirement or necessary to
have full use and benefit of the Property as contemplated by the Loan Documents (including any of
the same in connection with any foreclosure action or transfer in lieu thereof); (ii) injury or
damage to any person, property or natural resource occurring on or off the Property, including the
cost of demolition and rebuilding of any improvements on real property; (iii) all liability to pay
or indemnify any person or governmental authority for costs expended in connection with any of the
matters included within this definition of Environmental Damages; (iv) the investigation and
defense of any claim, whether or not such claim is ultimately defeated; and (v) the settlement of
any claim or judgment.

"Environmental Law” means any federal, state or local law, statute, ordinance, code,
rule, regulation, license, authorization, decision, order, injunction, decree, or rule of common
law, and any judicial interpretation of any of the foregoing, which pertains to health or safety
(as they relate to natural resources or the environment), any Hazardous Material, or the
environment (including ground or air or water or noise pollution or contamination, and underground
or aboveground tanks) and shall include the Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601
et seq. (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986
(“SARA”); the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.;
the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§ 300f et seq.; California Health and Safety Code § 25100 et seq.; and any other state or federal
environmental statutes, and all rules, regulations, orders and decrees now or hereafter promulgated
under any of the foregoing, as any of the foregoing now exist or may be changed or amended or come
into effect in the future.

"Environmental Requirement” means any Environmental Law, agreement or restriction, as
the same now exists or may be changed or amended or come into effect in the future, which pertains
to health or safety (as they relate to natural resources or the environment), any Hazardous
Material, or the environment, including ground, air, water or noise pollution or contamination, and
underground or aboveground tanks.

"Hazardous Material” means any substance, whether solid, liquid or gaseous: (a) which
is listed, defined or regulated as a “hazardous substance”, “hazardous waste” or “solid waste”, or
otherwise classified as hazardous or toxic, in or pursuant to any Environmental Requirement; or
(b) which is or which contains asbestos, radon, any polychlorinated biphenyl, urea formaldehyde
foam insulation, explosive or radioactive material, or motor fuel or other petroleum hydrocarbons;
or (c) which causes or poses a threat to cause a contamination or nuisance on the Property or any
adjacent property or a hazard to the environment or to the health or safety of persons on the
Property.

"Indemnified Party” means each of the following persons and entities:
(a) Administrative Agent; (b) Lenders or any subsequent holders of the Notes; (c) Trustee; (d) any
persons or entities owned or controlled by, owning or controlling, or under common control or
affiliated with, Administrative Agent, Lenders, any subsequent holders of the Notes, and/or
Trustee; (e) any participants and co-lenders in the Loan; (f) the directors, officers, partners,
employees, attorneys and agents of each of the foregoing persons and entities; and (g) the heirs,
personal representatives, successors and assigns of each of the foregoing persons and entities.

"Loan Documents” has the meaning ascribed to such term in the Mortgage.

"Obligor” means any individual Nutfield Borrower or Indemnitor and “Obligors”
means some or all of the persons and entities comprising Nutfield Borrower and/or Indemnitor,
collectively.

"On” or “on”, when used with respect to the Property or any property adjacent
to the Property, means “on, in, under, above or about.”

"Trustee” means the Trustee under the Mortgage.

2. Representations and Warranties. Each Obligor hereby represents and warrants to,
and covenants with, Administrative Agent and Lenders, that, except as disclosed in that certain
Phase 1 Environmental Site Assessment Report provided to Administrative Agent in connection with
the closing of the Loan, as of the date of recordation of the Mortgage:

(a) During the period of Nutfield Borrower’s ownership of the Property, the Property has not
been used for industrial or manufacturing purposes, for landfill, dumping or other waste disposal
activities or operations, for generation, storage, use, sale, treatment, processing, recycling or
disposal of any Hazardous Material, for underground or aboveground storage tanks, or for any other
use that could give rise to the release of any Hazardous Material on the Property, except for
minimal quantities of substances on the Property which technically could be considered Hazardous
Material (provided that such substances are of a type and are held only in a quantity normally used
in connection with the construction, occupancy or operation of comparable buildings (such as
cleaning fluids and supplies normally used in the day-to-day operation of business offices), and
such substances are being held, stored and used in compliance with all applicable Environmental
Requirements); to the best of Obligors’ knowledge, no such use of the Property occurred at any time
prior to the period of Nutfield Borrower’s ownership of the Property; and to the best of Obligors’
knowledge, no such use on any adjacent property occurred at any time prior to the date hereof;

(b) Except for minimal quantities of substances on the Property which technically could be
considered Hazardous Material (provided that such substances are of a type and are held only in a
quantity normally used in connection with the occupancy or operation of comparable buildings (such
as cleaning fluids and supplies normally used in the day-to-day operation of business offices), and
such substances are being held, stored and used in compliance with all applicable Environmental
Requirements), to the best of Obligors’ knowledge, there is no Hazardous Material, storage tank (or
similar vessel) whether underground or otherwise, sump or well currently on the Property;

(c) Obligors have received no written notice and have no knowledge of any Environmental Claim
or any completed, pending or proposed or threatened investigation or inquiry concerning the
presence or release of any Hazardous Material on the Property or any adjacent property or
concerning whether any condition, use or activity on the Property or any adjacent property is in
violation of any existing Environmental Requirement;

(d) To the best of Obligors’ knowledge, the present conditions, uses and activities of and on
the Property do not violate any existing Environmental Requirement and the use of the Property
which Nutfield Borrower (and each tenant and subtenant, if any) makes and intends to make of the
Property complies and will comply with all applicable Environmental Requirements;

(e) The Property does not appear on and to the best of Obligors’ knowledge has never been on
the National Priorities List, any federal or state “superfund” or “superlien” list,
or any other list or database of properties maintained by any local, state or federal agency or
department showing properties which are known to contain or which are suspected of containing a
Hazardous Material;

(f) To the best of Obligors’ knowledge, no action has been taken pursuant to the provisions of
California Health and Safety Code §§ 25220-25241 to designate the Property as a hazardous waste
property or border zone property or otherwise to restrict the land use of the Property (including
through a moratorium on new land uses), nor does any Obligor know of any basis for such designation
or other restriction;

(g) Obligors have never applied for and been denied environmental impairment liability
insurance coverage relating to the Property; and

(h) No Obligor, and to Obligors’ knowledge no tenant or subtenant, has obtained or is required
to obtain any permit or authorization to construct, occupy, operate, use or conduct any activity on
any of the Property by reason of any Environmental Requirement.

3. Violations. Prior to the Cut-Off Date, Obligors will not cause, commit, permit or
allow to continue any violation of any Environmental Requirement (a) by any person or entity,
including any Obligor, or (b) by or with respect to the Property or any use of or activity on the
Property. In addition, Obligors will not cause, permit or allow to continue the attachment of any
environmental lien to the Property. Obligors will not place, install, dispose of or release, or
cause, permit, or allow the placing, installation, disposal, spilling, leaking, dumping or release
of, any Hazardous Material or storage tank (or similar vessel) on the Property and will keep the
Property free of Hazardous Material. Notwithstanding the foregoing provisions of this
Section 3, Obligors shall not be in Default under this Section 3 should Obligors
store minimal quantities of substances on the Property which technically could be considered
Hazardous Material; provided that such substances are of a type and are held only in a quantity
normally used in connection with the occupancy or operation of comparable buildings (such as
cleaning fluids and supplies normally used in the day-to-day operation of business offices), and
such substances are being held, stored and used in compliance with all applicable Environmental
Requirements. The indemnity in Section 6 of this Agreement shall always apply to such
substances, and it shall be and continue to be the responsibility of Obligors to take all remedial
actions required under and in accordance with Section 5 of this Agreement in the event of
any unlawful release of any such substance.

4. Notice to Lender. Obligors shall promptly deliver to Administrative Agent a copy
of each report pertaining to the Property or to any Obligor prepared by or on behalf of any Obligor
pursuant to any Environmental Requirement. Obligors shall promptly advise Administrative Agent in
writing of any Environmental Claim or of the discovery of any Hazardous Material on the Property as
soon as any Obligor first obtains knowledge thereof, including a full description of the nature and
extent of the Environmental Claim and/or Hazardous Material and all relevant circumstances.

5. Remedial Actions.

(a) Except as permitted under Section 3 above, if any Hazardous Material is discovered
on the Property at any time, prior to the Cut-Off Date, and regardless of the cause, Obligors shall
promptly at Obligors’ sole risk and expense and solely under the names of Obligors or any of them:
(i) remove, treat, and dispose of the Hazardous Material in compliance with all applicable
Environmental Requirements, or if such removal is prohibited by any Environmental Requirement, take
whatever action as is required by any Environmental Requirement; and (ii) take such other action as
is necessary to have the full use and benefit of the Property as contemplated by the Loan
Documents. Obligors at their sole expense shall provide Administrative Agent with satisfactory
evidence of the actions taken as required in this clause (a). Obligors shall provide to
Administrative Agent within thirty (30) days of Administrative Agent’s request a bond, letter of
credit or other financial assurance evidencing to Administrative Agent’s satisfaction that all
necessary funds are readily available to pay the costs and expenses of the actions required by this
clause (a) and to discharge any assessments or liens established against the Property as a result
of the presence of the Hazardous Material on the Property.

(b) All remedial actions shall be conducted (i) in a diligent and timely fashion by licensed
contractors acting under the supervision of a consultant or consulting environmental engineer, and
(ii) in accordance with all Environmental Requirements and all other applicable governmental
requirements. The selection of the contractors and consultant or consulting environmental engineer
for the remedial actions, the contracts entered into with such parties, any disclosures to or
agreements with any public or private agencies or parties relating to the remedial actions and any
written plan for the remedial actions (and any changes thereto) shall each, at the option of
Administrative Agent, be subject to the prior written approval of Administrative Agent, which
approval shall not be unreasonably withheld, conditioned or delayed. Within fifteen (15) days
after completion of such remedial actions, Obligors shall obtain and deliver to Administrative
Agent an Environmental Assessment of the Property made after such completion which shall confirm to
Administrative Agent’s satisfaction that all required remedial action as stated above has been
taken and successfully completed and that there is no evidence or suspicion of any contamination or
risk of contamination on the Property or any adjacent property or of violation of any Environmental
Requirement with respect to any such Hazardous Material.

(c) After the occurrence and during the continuance of a Default, Administrative Agent may,
but shall never be obligated to, remove or cause the removal of any Hazardous Material from the
Property (or if removal is prohibited by any Environmental Requirement, take or cause the taking of
such other action as is required by any Environmental Requirement) if Obligors fail to promptly
commence such remedial actions following discovery and thereafter diligently prosecute the same to
the satisfaction of Administrative Agent (without limitation of Administrative Agent’s rights to
declare a Default under any of the Loan Documents and to exercise all rights and remedies available
by reason thereof). After the occurrence and during the continuance of a Default, Administrative
Agent and its designees are hereby granted access to the Property at any time or times, upon
reasonable notice (which may be written or oral), and a license which is coupled with an interest
and irrevocable, to remove or cause such removal or to take or cause the taking of any such other
action.

6. Indemnity. Obligors hereby agree to protect, indemnify, defend and hold
Indemnified Parties and each of them harmless from and against, and, if and to the extent paid, to
reimburse them on demand for, any and all Environmental Damages. Without limitation, the foregoing
indemnity shall apply to each Indemnified Party with respect to Environmental Damages which in
whole or in part are caused by or arise out of the negligence of such (and/or any other)
Indemnified Party. However, such indemnity shall not apply to (a) a particular Indemnified Party
to the extent that the subject of the indemnification is caused by or arises out of the gross
negligence or willful misconduct of that particular Indemnified Party, or (b) Environmental Damages
created or arising solely from events or conditions first existing after a foreclosure sale under
the Mortgage (or a deed in lieu thereof), but only if a party other than Obligors or an affiliate
of any Obligor acquires title to the Property, provided that any such Environmental Damages do not
directly or indirectly arise from or relate to any release of or exposure to any Hazardous
Materials (including personal injury or damage to property), noncompliance with any Environmental
Laws, or remediation existing prior to the event described above. In any dispute between Obligors
and Administrative Agent and/or Lenders as to whether Obligors are released from liability pursuant
to the immediately preceding sentence, Obligors shall bear the burden of proof with respect to
whether they have been released from liability. Upon demand by any Indemnified Party, Obligors
shall diligently defend any Environmental Claim which affects the Property or which is made or
commenced against such Indemnified Party, whether alone or together with Obligors or any other
person, all at Obligors’ own cost and expense and by counsel to be approved by such Indemnified
Party in the exercise of its reasonable judgment. In the alternative, at any time any Indemnified
Party may elect to conduct its own defense through counsel selected by such Indemnified Party and
at the cost and expense of Obligors. Obligors and Indemnified Parties intend that to the extent
that Environmental Damages are not recoverable under C.C.P. § 736(a), such Environmental Damages
shall be recoverable under the law of the State of California other than C.C.P. § 736, as provided
in C.C.P. § 736(d).

7. Binding Obligations; Survival. The representations, warranties, covenants and
agreements in this Agreement shall be binding upon Obligors and their successors, assigns and legal
representatives and shall inure to the benefit of Indemnified Parties and each of them; provided,
however, that Obligors may not assign this Agreement, or assign or delegate any of their rights or
obligations under this Agreement, without the prior written consent of Administrative Agent in each
instance. The representations, warranties, covenants and agreements in this Agreement shall not
terminate on the Cut-Off Date or upon the release, foreclosure or other termination of the
Mortgage, but will survive the Cut-Off Date, the payment in full of the indebtedness secured by the
Mortgage, foreclosure of the Mortgage or conveyance in lieu of foreclosure, the release or
termination of the Mortgage and any and all of the other Loan Documents and Swap Contracts, any
investigation by or on behalf of any Indemnified Party, any proceeding under any Debtor Relief Law,
and any other event whatsoever. Without limiting the generality of the foregoing, the obligations
of Obligors to indemnify Indemnified Parties under Section 6 after the Cut-Off Date shall
be presumed, unless shown by a preponderance of evidence to the contrary.

8. Environmental Assessments. If any Indemnified Party shall ever have reason to
believe that any Hazardous Material affects the Property, or if any Environmental Claim is made or
threatened, or if a Default shall have occurred, or upon the occurrence of the Cut-Off Date if
requested by any Indemnified Party, Obligors shall at their expense provide to such Indemnified
Party from time to time, in each case within thirty (30) days after request by such Indemnified
Party, an Environmental Assessment made after the date of such request. Obligors will cooperate
with each consulting firm making any such Environmental Assessment and will supply to the
consulting firm, from time to time and promptly on request, all information available to Obligors
to facilitate the completion of the Environmental Assessment. If Obligors fail to furnish any
Indemnified Party within ten (10) days after such Indemnified Party’s request with a copy of an
agreement with an acceptable environmental consulting firm to provide such Environmental
Assessment, or if Obligors fail to furnish to any Indemnified Party such Environmental Assessment
within thirty (30) days after request by such Indemnified Party, the Indemnified Party may cause
any such Environmental Assessment to be made at Obligors’ expense and risk. Indemnified Parties
and their designees are hereby granted access to the Property at any time or times, upon reasonable
notice (which may be written or oral), and a license which is coupled with an interest and
irrevocable, to make or cause to be made such Environmental Assessments. Without limiting the
generality of the foregoing, Obligors agree that Indemnified Parties will have all rights, powers
and authority to enter and inspect the Property as is granted to the secured lender under
California Civil Code § 2929.5, and that any Indemnified Party will have the right to appoint a
receiver to enter and inspect the Property to the extent such authority is provided under
applicable law, including the authority given to the secured lender under C.C.P. § 564(c). All
reasonable costs and expenses incurred by any Indemnified Party in connection with any
Environmental Assessment conducted in accordance with this Section 8 shall be paid by
Obligors. Indemnified Parties shall be under no duty to make any Environmental Assessment of the
Property, and in no event shall any such Environmental Assessment by any Indemnified Party be or
give rise to a representation that any Hazardous Material is or is not present on the Property, or
that there has been or shall be compliance with any Environmental Requirement, nor shall Obligors
or any other person be entitled to rely on any Environmental Assessment made by or at the request
of any Indemnified Party. Indemnified Parties owe no duty of care to protect Obligors or any other
person against, or to inform them of, any Hazardous Material or other adverse condition affecting
the Property.

9. Information. The results of all investigations conducted and/or Environmental
Assessments prepared by or for any Indemnified Party shall be and at all times remain the property
of the Indemnified Party and under no circumstances shall any Indemnified Party have any obligation
whatsoever to disclose or otherwise make available to Obligors or any other party such results or
any other information obtained by any Indemnified Party in connection with such investigations and
reports. Notwithstanding the foregoing, Indemnified Parties hereby reserve the right, and Obligors
hereby expressly authorize any Indemnified Party, to make available to any party (including any
governmental agency or authority and any prospective bidder at any foreclosure sale of the
Property) any and all Environmental Assessments that any Indemnified Party may have with respect to
the Property. Obligors consent to Indemnified Parties notifying any party (either as part of a
notice of sale or otherwise) of the availability of any or all of the Environmental Assessments and
the information contained therein. Obligors acknowledge that Indemnified Parties cannot control or
otherwise assure the truthfulness or accuracy of the Environmental Assessments, and further
acknowledge that the release of the Environmental Assessments, or any information contained
therein, to prospective bidders at any foreclosure sale of the Property may have a material and
adverse effect upon the amount that a party may bid at such sale. Obligors agree that Indemnified
Parties shall have no liability whatsoever as a result of delivering any or all of the
Environmental Assessments or any information contained therein to any third party, and Obligors
hereby release and forever discharge Indemnified Parties from any and all claims, damages, or
causes of action, arising out of, connected with or incidental to the Environmental Assessments or
the delivery thereof.

10. Cross-Default with Loan Documents and Swap Contracts. Any Default under this
Agreement shall constitute a Default under the Loan Documents and Swap Contracts. In addition, any
Default under any of the Loan Documents or Swap Contracts shall constitute a Default hereunder.

11. Payable on Demand; Remedies. Any amounts to be paid under this Agreement by
Obligors (or any of them) from time to time shall be payable by Obligors within ten (10) business
days after demand by Administrative Agent or any other Indemnified Party. In addition to any other
rights or remedies Administrative Agent or Lenders may have under this Agreement, at law or in
equity, upon the occurrence of a Default under this Agreement, Administrative Agent and Lenders may
(a) pursue any remedies available to it under C.C.P. § 726.5 and C.C.P. § 736, and/or (b) subject
to the terms and conditions of this Agreement, do or cause to be done whatever is necessary to
cause the Property to comply with all Environmental Requirements, and the cost thereof shall become
immediately due and payable upon demand by Administrative Agent, and if not paid when due shall
accrue interest at the Default Rate until paid. Without limiting any other rights or remedies of
Administrative Agent or Lenders, Obligors acknowledge and agree that the provisions of this
Agreement are “environmental provisions,” as that term is defined in C.C.P. § 736(f)(2), made by
Obligors relating to the real property security, and that Obligors’ failure to comply with the
terms of this Agreement shall be a breach of contract such that Administrative Agent and Lenders
shall have the remedies provided under C.C.P. § 736 for the recovery of damages and for the
enforcement thereof. Pursuant to C.C.P. § 736, Administrative Agent’s and/or Lenders’ action for
the recovery of damages or enforcement of this Agreement shall not constitute an action within the
meaning of C.C.P. § 726(a) or constitute a money judgment for a deficiency or a deficiency judgment
within the meaning of C.C.P. § 580a, § 580b, or § 726.

12. Unsecured Agreement; Not a Loan Document; Cumulative Rights. This Agreement is
not secured by the Mortgage or any other Loan Document or any collateral whatsoever. This
Agreement is not one of the Loan Documents. Obligors, Administrative Agent and Lenders intend for
this Agreement to serve as Administrative Agent’s and Lenders’ written demand and Obligors’
response concerning the environmental condition of the Property as required by C.C.P. § 726.5. The
liability of Obligors or any other person under this Agreement shall not be limited or impaired in
any way by any provision in the Loan Documents or Swap Contracts or applicable law limiting
Obligors’ or such other person’s liability or Administrative Agent and Lenders’ recourse or rights
to a deficiency judgment, or by any change, extension, release, inaccuracy, breach or failure to
perform by any party under the Loan Documents or Swap Contracts, Obligors’ (and, if applicable,
such other person’s) liability hereunder being direct and primary and not as a guarantor or surety.
Nothing in this Agreement or in any Loan Document or Swap Contract shall limit or impair any
rights or remedies of Administrative Agent, Lenders, Trustee and/or any other Indemnified Party
against any Obligor or any other person under any Environmental Requirement or otherwise at law or
in equity, including any rights of contribution or indemnification.

13. Consideration. Obligors acknowledge that Lenders have relied and will rely on the
representations, warranties, covenants and agreements herein in closing and funding the Loan and
that the execution and delivery of this Agreement is an essential condition but for which Lenders
would not close or fund the Loan. Obligors further acknowledge that Administrative Agent has
relied and will rely on the representations, warranties, covenants and agreements herein in acting
as administrative agent for the Loan and that the execution and delivery of this Agreement is an
essential condition but for which Administrative Agent would not act as administrative agent for
the Loan.

14. No Waiver. No delay or omission by any Indemnified Party to exercise any right
under this Agreement shall impair any such right nor shall it be construed to be a waiver thereof.
No waiver of any single breach or default under this Agreement shall be deemed a waiver of any
other breach or default. Any waiver, consent or approval under this Agreement must be in writing
to be effective.

15. Notices. All notices, requests, consents, demands and other communications
required or which any party desires to give hereunder shall be in writing (including, without
limitation, telecopy, telegraphic, telex, or cable communication) and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by courier, or by registered or certified
United States mail, postage prepaid, addressed to the party to whom directed at the addresses
specified at the end of this Agreement (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by telegram, telex, or facsimile. Any such
notice or communication shall be deemed to have been given either at the time of personal delivery
or, in the case of courier or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or, in the case of telegram, telex or facsimile, upon receipt;
provided, that service of a notice required by any applicable statute shall be considered complete
when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change
of address shall be effective except upon actual receipt. This Section 15 shall not be
construed in any way to affect or impair any waiver of notice or demand provided in any Loan
Document or to require giving of notice or demand to or upon any person in any situation or for any
reason.

16. Invalid Provisions. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any other provision and
a determination that the application of any provision of this Agreement to any person or
circumstance is illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.

17. Construction. Whenever in this Agreement the singular number is used, the same
shall include plural where appropriate, and vice versa; and words of any gender in this Agreement
shall include each other gender where appropriate. The headings in this Agreement are for
convenience only and shall be disregarded in the interpretation hereof. Reference to
"person” or “entity” means firms, associations, partnerships, joint ventures,
trusts, limited liability companies, corporations and other legal entities, including public or
governmental bodies, agencies or instrumentalities, as well as natural persons. The words
"include” and “including” shall be interpreted as if followed by the words
"without limitation.”

18. Joint and Several Liability and Waivers by Obligors.

(a) Each Obligor agrees that it is jointly and severally liable to Indemnified Parties for the
payment of all obligations arising under this Agreement, and that such liability is independent of
the obligations of the other Obligors. Any Indemnified Party may bring an action against any
Obligor, whether or not any action is brought against the other Obligors.

(b) Each Obligor agrees that any release which may be given by any Indemnified Party to the
other Obligors will not release such Obligor from its obligations under this Agreement.

(c) Each Obligor waives any right to assert against any Indemnified Party any defense, setoff,
counterclaim, or claims which such Obligor may have against the other Obligors or any other party
liable to Indemnified Parties or any of them for the obligations of Obligors under this Agreement.

(d) Each Obligor agrees that it is solely responsible for keeping itself informed as to the
financial condition of the other Obligors and of all circumstances which bear upon the risk of
nonpayment. Each Obligor waives any right it may have to require Indemnified Parties to disclose
to such Obligor any information which Indemnified Parties or any of them may now or hereafter
acquire concerning the financial condition of the other Obligors.

(e) Each Obligor waives all rights to notices of acceptance of this Agreement and further
waives all rights to notices of default or nonperformance by any other Obligor under this
Agreement.

(f) Each Obligor waives any right of subrogation, reimbursement, indemnification and
contribution (contractual, statutory or otherwise), including any claim or right of subrogation
under any Debtor Relief Law, which such Obligor may now or hereafter have against any other Obligor
or any other person with respect to the obligations incurred under this Agreement. Each Obligor
waives any right to enforce any remedy that any Indemnified Party now has or may hereafter have
against any other Obligor.

19. Indemnitor Waivers. Indemnitor waives:

(a) All statutes of limitations as a defense to any action or proceeding brought against
Indemnitor by any Indemnified Party, to the fullest extent permitted by law;

(b) Any right it may have to require Indemnified Party to proceed against Nutfield Borrower,
proceed against or exhaust any security held from Nutfield Borrower, or pursue any other remedy in
any Indemnified Party’s power to pursue;

(c) Any defense based on any claim that Indemnitor’s obligations exceed or are more burdensome
than those of Nutfield Borrower;

(d) Any defense based on: (i) any legal disability of Nutfield Borrower, (ii) any release,
discharge, modification, impairment or limitation of the liability of Nutfield Borrower to any
Indemnified Party from any cause, whether consented to by any Indemnified Party or arising by
operation of law or from any bankruptcy or other voluntary or involuntary proceeding, in or out of
court, for the adjustment of debtor-creditor relationships (“Insolvency Proceeding”) and
(iii) any rejection or disaffirmance of the Loan, or any part of it, or any security held for it,
in any such Insolvency Proceeding;

(e) Any defense based on any action taken or omitted by any Indemnified Party in any
Insolvency Proceeding involving Nutfield Borrower, including any election to have any Indemnified
Party’s claim allowed as being secured, partially secured or unsecured, any extension of credit by
any Indemnified Party to Nutfield Borrower in any Insolvency Proceeding, and the taking and holding
by any Indemnified Party of any security for any such extension of credit;

(f) All presentments, demands for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, notices of acceptance of this Agreement and of the existence,
creation, or incurring of new or additional indebtedness, and demands and notices of every kind;
and

(g) Any defense based on or arising out of any defense that Nutfield Borrower may have to the
payment or performance of the Loan or any part of it.

20. Waivers of Subrogation and Other Rights.

(a) Upon the occurrence and during the continuance of a Default by Nutfield Borrower,
Administrative Agent and Lenders in their sole discretion, without prior notice to or consent of
Indemnitor, may elect to: (i) foreclose either judicially or nonjudicially against any real or
personal property security it may hold for the Loan, (ii) accept a transfer of any such security in
lieu of foreclosure, (iii) compromise or adjust the Loan or any part of it or make any other
accommodation with Nutfield Borrower or Indemnitor, or (iv) exercise any other remedy against
Nutfield Borrower or any security. No such action by Administrative Agent and/or Lenders shall
release or limit the liability of Indemnitor, each of whom shall remain liable under this Agreement
after the action, even if the effect of the action is to deprive Indemnitor of any subrogation
rights, rights of indemnity, or other rights to collect reimbursement from Nutfield Borrower for
any sums paid to any Indemnified Party, whether contractual or arising by operation of law or
otherwise. Indemnitor expressly agrees that under no circumstances shall it be deemed to have any
right, title, interest or claim in or to any real or personal property to be held by any
Indemnified Party or any third party after any foreclosure or transfer in lieu of foreclosure of
any security for the Loan.

(b) Regardless of whether Indemnitor may have made any payments to any Indemnified Party,
Indemnitor forever waives: (i) all rights of subrogation, all rights of indemnity, and any other
rights to collect reimbursement from Nutfield Borrower for any sums paid to any Indemnified Party,
whether contractual or arising by operation of law (including the United States Bankruptcy Code or
any successor or similar statute) or otherwise, (ii) all rights to enforce any remedy that any
Indemnified Party may have against Nutfield Borrower, and (iii) all rights to participate in any
security now or later to be held by any Indemnified Party for the Loan.

(c) Indemnitor understands and acknowledges that if Administrative Agent or any Lender
forecloses judicially or nonjudicially against any real property security for the Loan, that
foreclosure could impair or destroy any ability that Indemnitor may have to seek reimbursement,
contribution or indemnification from Nutfield Borrower or others based on any right Indemnitor may
have of subrogation, reimbursement, contribution or indemnification for any amounts paid by
Indemnitor under this Indemnity. Indemnitor further understands and acknowledges that in the
absence of the provisions of this Indemnity, such potential impairment or destruction of
Indemnitor’s rights, if any, may entitle Indemnitor to assert a defense to this Indemnity based on
Section 580d of the California Code of Civil Procedure as interpreted in Union Bank v.
Gradsky, 265 Cal.App.2d 40 (1968). By executing this Agreement, Indemnitor freely, irrevocably
and unconditionally: (i) waives and relinquishes that defense and agrees that Indemnitor will be
fully liable under this Agreement even though Administrative Agent or a Lender may foreclose
judicially or nonjudicially against any real property security for the Loan; (ii) agrees that
Indemnitor will not assert that defense in any action or proceeding which any Indemnified Party may
commence to enforce this Agreement; (iii) acknowledges and agrees that the rights and defenses
waived by Indemnitor under this Agreement include any right or defense that Indemnitor may have or
be entitled to assert based upon or arising out of any one or more of Sections 580a, 580b, 580d
or 726 of the California Code of Civil Procedure or Section 2848 of the California Civil Code;
(iv) acknowledges and agrees that Lender is relying on this waiver in making the Loan, and that
this waiver is a material part of the consideration which Lender is receiving for making the Loan;
and (v) acknowledges and agrees that Administrative Agent is relying on this waiver in agreeing to
act as administrative agent for the Loan, and that this waiver is a material part of the
consideration which Administrative Agent is receiving for acting as Administrative Agent for the
Loan.

(d) Indemnitor waives Indemnitor’s rights of subrogation and reimbursement and any other
rights and defenses available to Indemnitor by reason of Sections 2787 to 2855, inclusive, of the
Civil Code including, without limitation, (i) any defenses Indemnitor may have to the indemnity
obligation by reason of an election of remedies by Administrative Agent or any Lender and (ii) any
rights or defenses Indemnitor may have by reason of protection afforded to Nutfield Borrower with
respect to the obligation so guaranteed pursuant to the antideficiency or other laws of California
or New Hampshire limiting or discharging Nutfield Borrower’s indebtedness, including without
limitation, Sections 580a, 580b, 580d, or 726 of the Code of Civil Procedure.

(e) Indemnitor waives all rights and defenses arising out of an election of remedies by any
Indemnified Party, even though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, has destroyed Indemnitor’s rights of subrogation
and reimbursement against Nutfield Borrower by the operation of Section 580d of the Code of Civil
Procedure or otherwise.

(f) No provision or waiver in this Indemnity shall be construed as limiting the generality of
any other waiver contained in this Indemnity.

21. Indemnitor waives all rights and defenses that Indemnitor may have because Borrower’s debt
is secured by real property. This means, among other things:

(a) Administrative Agent and/or Lenders may collect from Indemnitor without first foreclosing
on any real or personal property collateral pledged by Borrower.

(b) If Administrative Agent and/or Lenders forecloses on any real property collateral pledged
by Borrower:

i. The amount of the debt may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price.

ii. Administrative Agent may collect from Indemnitor even if Administrative
Agent and/or Lender, by foreclosing on the real property collateral, has destroyed
any right Indemnitor may have to collect from Borrower.

This is an unconditional and irrevocable waiver of any rights and defenses Indemnitor may have
because Borrower’s debt is secured by real property.

22. Applicable Law. The laws of the State of California and applicable United States
federal law shall govern the rights and duties of the parties hereto and the validity, enforcement
and interpretation hereof.

23. Lender Assigns; Disclosure of Information. Administrative Agent and any Lender
may, at any time, sell, transfer, or assign its interest in the Loan and any and all servicing
rights with respect thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or unrated public
offering or private placement. In the event of any such sale, transfer or assignment of the Loan
or any part thereof, the rights and benefits under this Agreement may be transferred therewith to
the extent applicable to the Loan or part thereof being sold, transferred or assigned. Obligors
waive notice of any sale, transfer or assignment of the Loan or any part thereof, and agree that
failure to give notice of any such sale, transfer or assignment will not affect the liabilities of
Obligors hereunder. Administrative Agent and Lenders are hereby authorized to disseminate any
information they now has or hereafter obtain pertaining to the Property or this Agreement,
including credit and/or other information on Obligors and/or any party liable, directly or
indirectly, for any part of the obligations under this Agreement, to any actual or prospective
assignee or participant with respect to the Loan, to any of Administrative Agent’s or Lenders’
affiliates to any regulatory body having jurisdiction over Administrative Agent or any Lender, and
to any other parties as necessary or appropriate in Administrative Agent or any Lender’s reasonable
judgment.

24. Execution; Modification. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original for all purposes and all of which
constitute, collectively, one agreement. This Agreement may be amended only by an instrument in
writing intended for that purpose executed jointly by an authorized representative of each party
hereto.

25. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, OBLIGORS AND
LENDER HEREBY WAIVE TRIAL BY JURY IN RESPECT OF ANY “CLAIM” AS DEFINED IN SECTION 1. THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY OBLIGORS AND LENDER, AND OBLIGORS AND LENDER
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY
TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. OBLIGORS AND
LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 25 IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. EACH OBLIGOR FURTHER REPRESENTS AND WARRANTS
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

1

THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

EXECUTED and DELIVERED as of the date first written above.

	 	 	 	 	 
	Nutfield Borrower:
	 	 	 	 
	The address of Borrower is:
	 	 	 	 
	G&E Healthcare REIT Nutfield
Professional Center, LLC
	 	G&E HEALTHCARE REIT NUTFIELD
	c/o Grubb & Ellis Realty Investors,
	 	PROFESSIONAL CENTER, LLC, a Delaware
	LLC
	 	limited liability company
	1551 N. Tustin Avenue, Suite 300
	 	By: /s/ Shannon K S Johnson
	Santa Ana, California 92705
	 	Name: Shannon K S Johnson
	Attn: Shannon Johnson and Dan Prosky
	 	Title: Authorized Signatory
	INDEMNITOR:
	 	 	 	 
	The address of Indemnitor is:
	 	 	 	 
	Grubb & Ellis Healthcare REIT, Inc.
c/o Grubb & Ellis Realty Investors,
	 	GRUBB & ELLIS HEALTHCARE REIT, INC., a
	LLC
	 	Maryland corporation
	1551 N. Tustin Avenue, Suite 300
	 	By: /s/ Shannon K S Johnson
	Santa Ana, California 92705
	 	Name: Shannon K S Johnson
	Attn: Shannon Johnson and Dan Prosky
	 	Title: Chief Financial Officer
	The address for providing notices to
Administrative Agent and Lenders is:
	 	 	 	 
	Wachovia Financial Services, Inc.
Real Estate Financial Services
General Banking Group
Mail Code: CA 6233
15750 Alton Parkway
Irvine, California 92618
Attn: Anne McNeil
	 	 	 	 

2Exhibit 4

Exhibit 4.1

BAYWOOD INTERNATIONAL, INC.

2008 STOCK OPTION AND INCENTIVE PLAN

 

SECTION 1.    GENERAL PURPOSE OF THE PLAN; DEFINITIONS 

        The name of the plan is the Baywood International, Inc. 2008 Stock Option and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable the officers, employees, directors and other key persons (including consultants and prospective employees) of Baywood International, Inc. (the "Company") and its Subsidiaries, if any, upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company's welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby motivating their efforts on the Company's behalf and strengthening their desire to remain with the Company. 

        The following terms shall be defined as set forth below: 

        "Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder. 

        "Award" or "Awards," except where referring to a particular category of grant under the Plan, shall include Non-Qualified Stock Options, Restricted Stock Awards and Unrestricted Stock Awards. 

        "Award Grant" or “Award Agreement” means a written or electronic agreement setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Agreement is subject to the terms and conditions of the Plan. 

        "Board" means the Board of Directors of the Company. 

       “Cause” shall include, but not be limited to (i) an act or acts of personal dishonesty of a grantee at the expense of the Company or any of its Subsidiaries, (ii) a willful violation of the grantee's employment duties and responsibilities, (iii) a conviction of the grantee of a felony or a crime involving moral turpitude, (iv) unauthorized disclosure of confidential information, (v) competing with the Company or (vi) conduct substantially prejudicial to the Company. The Committee shall have the exclusive right to determine whether Cause exists and the Committee's determination shall be binding and conclusive on all grantees and the Company.

        "Code" means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations. 

        "Committee" means the compensation committee of the Board or a similar committee performing the functions of the compensation committee, or if no committee exists, then the entire Board of Directors. If the Company’s securities are listed on a stock exchange, such compensation committee will be comprised of members that meet the criteria established by that stock exchange.  

        "Covered Employee" as defined by Section 162(m) of the Code, means an employee of the Company, who as of the close of the taxable year, served as the Company’s Chief Executive Officer, or was acting in such a capacity, or whose total compensation must be reported to stockholders under the Exchange Act by reason of such employee being one of the four highest paid officers for the taxable year. 

        "Effective Date" means the date on which the Plan is approved by the Company’s Board of Directors as set forth in Section 14. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. 

        "Fair Market Value" of the Stock on any given date means:

(i) if the Stock is publicly traded, the closing sale price on such date or, if there are no trades on such date, the mean between the closing bid and asked prices on that date, as reported by the principal exchange or market on which the Stock is traded (or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or another customary financial reporting service, as determined by the Committee); or 

(ii) if the Stock is not publicly traded or, if publicly traded, the sales prices or bid and asked quotations are not publicly reported, the fair market value as determined by the Committee.

"Non-Qualified Stock Option" means any Stock Option that is not an incentive stock option as defined in Section 422 of the Code. 

        "Option" or "Stock Option" means any option to purchase shares of Stock granted pursuant to Section 5. 

        "Restricted Stock Award" means an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Committee, shares of Stock subject to such restrictions and conditions as the Committee may determine at the time of grant. 

        "Sale Event" shall mean (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation in which the outstanding shares of Stock are converted into or exchanged for securities of the successor entity and the holders of the Company's outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction, or (iv) the sale of all of the Stock of the Company to an unrelated person or entity. 

        "Sale Price" means the value as determined by the Committee of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event. 

        "Stock" means the common stock, par value $0.001 per share, of the Company, subject to adjustments pursuant to Section 3. 

        "Subsidiary" means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly. 

        "Unrestricted Stock Award" means an Award of shares of Stock free of any restrictions. 

SECTION 2.    ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS 

        (a)   Committee.    The Plan shall be administered by the Committee. 

        (b)   Powers of Committee.    The Committee shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority: 

        (i)    to select the individuals to whom Awards may from time to time be granted; 

        (ii)   to determine the time or times of grant, and the extent, if any, of Non-Qualified Stock Options, Restricted Stock Awards and Unrestricted Stock Awards or any combination of the foregoing, granted to any one or more grantees; 

        (iii)  to determine the number of shares of Stock to be covered by any Award; 

        (iv)  to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the form of written instruments evidencing the Awards; 

        (v)   to accelerate at any time the exercisability or vesting of all or any portion of any Award; 

        (vi)  subject to the provisions of Section 5(b), to extend at any time the period in which Stock Options may be exercised; and 

        (vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan. All decisions and interpretations of the Committee shall be binding on all persons, including the Company and Plan grantees. 

        (c)   Delegation of Authority to Grant Options.    Subject to applicable law, the Committee, in its discretion, may delegate to the Chief Executive Officer or Chief Financial Officer of the Company all or part of the Committee's authority and duties with respect to the granting of Options, to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not Covered Employees. Any such delegation by the Committee shall include a limitation as to the amount of Options that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee's delegate or delegates that were consistent with the terms of the Plan. 

        (d)   Award Agreement.    Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award, the provisions applicable in the event employment or service terminates, and the Company's authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award. 

        (e)   Indemnification.    Neither the Board nor the Committee, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Committee (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys' fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company's articles of incorporation or bylaws or any directors' and officers' liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company. 

SECTION 3.    STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION 

        (a)   Stock Issuable.    The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 2,000,000 shares, subject to adjustment as provided in Section 3(b). For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, cancelled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company. 

        (b)   Changes in Stock.    Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company's capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company or the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or Subsidiary thereof), the Committee shall make an appropriate or proportionate adjustment in (i) the maximum number of shares of Stock reserved for issuance under the Plan, (ii) the number of Stock Options that can be granted to any one individual grantee, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (v) the price for each share subject to any then outstanding Stock Options under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options) as to which such Stock Options remain exercisable. The Committee shall also make equitable or proportionate adjustments in the number of shares of Stock subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Committee shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Committee in its discretion may make a cash payment in lieu of fractional shares. 

        (c)   Mergers and Other Transactions.    In the case of and subject to the consummation of a Sale Event, all Awards that are not exercisable, vested and/or nonforfeitable prior to the effective time of such Sale Event may become exercisable, vested and/or nonforfeitable in connection with such Sale Event as specified by the Committee with respect to particular Awards in the relevant Award documentation or otherwise. Upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree (after taking into account any acceleration). In the event of such termination, each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Committee, to exercise all outstanding Options held by such grantee, including those that will become exercisable upon the consummation of the Sale Event; provided, however, that the exercise of Options not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event. 

        Notwithstanding anything to the contrary in this Section 3(c), in the event of a Sale Event pursuant to which holders of the Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the Sale Event, the Company shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding Options, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price times the number of shares of Stock subject to outstanding Options (to the extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options. 

        (d)   Substitute Awards.    The Committee may grant Awards under the Plan in substitution for Stock and stock-based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary, if any, or the acquisition by the Company or a Subsidiary, if any, of property or stock of the employing corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances. Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a). 

SECTION 4.    ELIGIBILITY 

        Grantees under the Plan will be such full or part-time officers, directors and other employees and key persons (including consultants and prospective employees) of the Company and its Subsidiaries, if any, as are selected from time to time by the Committee in its sole discretion. 

SECTION 5.    STOCK OPTIONS 

        Any Stock Option granted under the Plan shall be in such form as the Committee may from time to time approve. 

        Stock Options granted under the Plan will be Non-Qualified Stock Options.

        The Committee, in its discretion, may grant Stock Options to eligible employees, directors and key persons (including consultants and prospective employees) of the Company or any Subsidiary, if any. Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable. If the Committee so determines, Stock Options may be granted in lieu of cash compensation at the optionee's election, subject to such terms and conditions as the Committee may establish. 

        (a)   Exercise Price.    The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Committee at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant.

        (b)   Option Term.    The term of each Stock Option shall be fixed by the Committee, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted. 

        (c)   Exercisability; Rights of a Stockholder.    Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Committee at or after the grant date. The Committee may at any time accelerate the vesting schedule of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options. 

        (d)   Method of Exercise.    Stock Options may be exercised in whole or in part, prior to the expiration or the earlier termination as provided herein, by giving written notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price, together with any amounts required to be withheld for income tax reporting, may be made by one or more of the following methods to the extent provided in the Option Award Agreement: 

        (i)    In cash, by certified or bank check or other instrument acceptable to the Committee; or

        (ii)  By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment procedure. 

        Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Agreement or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee).

SECTION 6.     RESTRICTED STOCK AWARDS 

        (a)   Nature of Restricted Stock Awards.    The Committee shall determine the restrictions and conditions applicable to each Restricted Stock Award at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The terms and conditions of each such Award Grant shall be determined by the Committee, and such terms and conditions may differ among individual Awards and grantees. 

        (b)   Rights as a Stockholder.    Upon execution of the Restricted Stock Award Grant and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the Restricted Stock Award Grant if any. Unless the Committee shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock is vested as provided in Section 6(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the Company until such Restricted Stock is vested as provided in Section 6(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Committee may prescribe. 

        (c)   Restrictions.    Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Grant. 

        (d)   Vesting of Restricted Stock.    The Committee at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Stock and the Company's right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed "vested." 

SECTION 7.    UNRESTRICTED STOCK AWARDS 

        Grant or Sale of Unrestricted Stock.    The Committee may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Committee) an Unrestricted Stock Award under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee. 

SECTION 8.    TRANSFERABILITY OF AWARDS 

        (a)   Transferability.    Except as provided in Section 8(b) below, during a grantee's lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee's legal representative or guardian in the event of the grantee's incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void. 

        (b)   Committee Action.    Notwithstanding Section 8(a), the Committee, in its discretion, may provide either in the Award Grant regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or her Awards to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award. 

        (c)   Family Member.    For purposes of Section 8(b), "family member" shall mean a grantee's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee's household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests. 

        (d)   Designation of Beneficiary.    Each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee's death. Any such designation shall be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee's estate. 

SECTION 9.    TAX WITHHOLDING 

        (a)   Payment by Grantee.    Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries, if any, shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company's obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee. 

        (b)   Payment in Stock.    Subject to approval by the Committee, a grantee may elect to have the Company's minimum required tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii) transferring to the Company shares of Stock owned by the grantee with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due. 

SECTION 10.    TERMINATION, DEATH, DISABILITY, TRANSFER, LEAVE OF ABSENCE, ETC. 

        (a)   Termination of Employment.  Except as may otherwise be provided by the Committee either in the Award Agreement or, subject to Section 11 below, in writing after the Award Agreement is issued, if a grantee’s employment (or other service relationship) terminates for any reason (other than for Cause), any Stock Options or Restricted Stock Awards that are not vested and exercisable as of the date that the grantee’s employment (or other service relationship) terminates, shall be cancelled immediately and any Stock Options or Restricted Stock Awards that are vested and exercisable as of the date grantee’s employment terminates (other than for Cause) shall remain exercisable for 60 days after the date of termination, after which any unexercised Stock Options or Restricted Stock Awards are cancelled.  If grantee’s employment terminates for Cause, all Stock Options and Restricted Stock awards are cancelled immediately.  

        (b)   Death or Disability.  Notwithstanding the foregoing, except as may otherwise be provided by the Committee either in the Award Agreement or, subject to Section 11 below, in writing after the Award Agreement is issued, the following provisions shall apply with respect to a grantee’s death or disability:

i.

Death.  In the event of grantee’s death, all Stock Options and Restricted Stock Awards shall become fully exercisable and remain exercisable for their full term.  Such awards shall be transferred to a beneficiary as set forth in Section 8 above. 

ii.

Disability.  In the event grantee becomes disabled while employed by the Company, any unvested Stock Options or Restricted Stock Awards shall continue to vest and be exercisable as if grantee were an active employee of the Company.  A grantee shall be deemed disabled if he or she suffers from a permanent and total disability as defined in the Code.

        (c)   For purposes of the Plan, the following events shall not be deemed a termination of employment: 

i.

a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or 

ii.

an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee's right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing. 

SECTION 11.    AMENDMENTS AND TERMINATION 

        The Board may, at any time, amend or discontinue the Plan and the Committee may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder's consent. Except as provided in Section 3(b) or 3(c), in no event may the Committee exercise its discretion to reduce the exercise price of outstanding Stock Options or effect repricing through cancellation and re-grants. Any material Plan amendments (other than amendments that curtail the scope of the Plan), including any Plan amendments that (i) increase the number of shares reserved for issuance under the Plan, (ii) expand the type of Awards available under, materially expand the eligibility to participate in, or materially extend the term of, the Plan, or (iii) materially change the method of determining Fair Market Value, shall be subject to approval by the Board. In addition, to the extent determined by the Committee to be required by the Code to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Board. Nothing in this Section 11 shall limit the Committee's authority to take any action permitted pursuant to Section 3(c). 

SECTION 12.    STATUS OF PLAN 

        With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Committee shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the Company's obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence. 

SECTION 13.    GENERAL PROVISIONS 

        (a)   No Distribution.    The Committee may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof. 

        (b)   Delivery of Stock Certificates.    Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee's last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee's last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic "book entry" records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board has determined, with advice of counsel (to the extent the Board deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Committee may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that an individual make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee.

        (c)   Stockholder Rights.    Until Stock is deemed delivered in accordance with Section 13(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award. 

        (d)   Other Compensation Arrangements; No Employment Rights.    Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary, if any. 

        (e)   Trading Policy Restrictions.    Option exercises and other Awards under the Plan shall be subject to such Company's insider trading policy and procedures, as in effect from time to time. 

        (f)    Forfeiture of Awards under Sarbanes-Oxley Act.    If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any grantee who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such individual under the Plan during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission, as the case may be, of the financial document embodying such financial reporting requirement. 

SECTION 14.    EFFECTIVE DATE OF PLAN 

        This Plan shall become effective upon approval by the Company’s Board of Directors. No grants of Stock Options and other Awards may be made hereunder after the tenth (10th) anniversary of the Effective Date. 

SECTION 15.    GOVERNING LAW 

        This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Arizona, applied without regard to conflict of law principles. 

DATE APPROVED BY BOARD OF DIRECTORS: May 14, 2008

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