SERVICES
AGREEMENT
THIS SERVICES AGREEMENT (this “
Agreement ”) is made and entered into as of
April 3, 2009 (the “ Effective Date ”), by
and between AMERICAN REALTY CAPITAL II, LLC, a Delaware limited
liability company (“ ARC II ”) and GRUBB &
ELLIS HEALTHCARE REIT, INC., a Maryland corporation (the “
REIT ”), with respect to the following recitals:
R E C I T A L
S
A. The REIT intends to file with
the Securities and Exchange Commission (the “ SEC
”) a Registration Statement on Form S-11 (the “
Registration Statement ”) in connection with a
follow-on offering (the “ Follow-On
Offering ”) of up to $2,200,000,000 in shares of
common stock (the “ Shares ”) to be offered to
the public.
B. The REIT intends to continue
to qualify as a real estate investment trust for federal income tax
purposes and to invest its funds in investments permitted by the
terms of the REIT’s Articles of Incorporation and
Section 856 through 860 of the Internal Revenue Code.
C. Realty Capital Securities,
LLC, a Delaware limited liability company (“ RCS
”), a wholly-owned subsidiary of ARC II will be engaged by
the REIT as its agent and exclusive dealer manager in connection
with the Follow-On Offering to solicit and to cause other
securities brokers to solicit subscriptions for the Shares pursuant
to the terms and conditions of an Exclusive Dealer Manager
Agreement (the “ Dealer Manager Agreement ”)
entered into by and between RCS and the REIT, concurrently
herewith.
D. The REIT’s current
Amended and Restated Advisory Agreement (the “ Advisory
Agreement ”) dated November 14, 2008 with Grubb
& Ellis Healthcare REIT Advisor, LLC, a Delaware limited
liability company (the “ REIT Advisor ”)
and Grubb & Ellis Realty Investors, LLC, a Virginia limited
liability company (“ GERI ”) expires on
September 20, 2009, unless earlier terminated (except with
respect to certain provisions therein that survive expiration or
termination). The REIT desires to enter into this Agreement to
supplement and augment its internal capacity.
E. Prior to the effectiveness of
the Follow-On Offering, the REIT will change its name to
“Healthcare Trust of America, Inc.”
F. The REIT desires to avail
itself of the experience, sources of information, advice,
assistance and certain facilities available to ARC II, and to have
ARC II undertake the duties and responsibilities herein set forth,
on behalf of, and subject to the supervision of the REIT, all as
provided herein.
G. ARC II is willing to
undertake to render such services, subject to the supervision of
the REIT, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, of the mutual
covenants and agreements contained in this Agreement, and other
good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by the parties, the parties hereby agree as
follows:
A G R E E M E N
T
1. Scope of Services . The REIT hereby
appoints ARC II to provide, and ARC II hereby agrees to provide,
subject to the terms and conditions of this Agreement, the
below-referenced general consulting services, and other specific
services as ARC II and the REIT may agree upon from time to time
during the term of this Agreement.
(a) General Consulting
Services . ARC II shall provide general consulting services to
the REIT in connection with the operations of the REIT, including,
but not limited to: (i) creating a website that allows for
investor access to account information; (ii) engaging and
negotiating with certain vendors that will provide transfer agent
and escrow services, (iii) augmenting, if needed, a public
company-ready management team; (iv) assisting and cooperating
with the REIT’s self-management program; and
(v) performing such other services as set forth on
Exhibit A attached hereto (collectively, “
General Consulting Services ”).
(b) Specific Services . ARC
II shall provide other services to the REIT as the REIT may request
during the term of this Agreement, including, without limitation:
(i) property management services as more particularly
described on Exhibit C attached hereto, (ii) asset
acquisition, disposition and/or other related services as more
particularly described on Exhibit D attached hereto;
and (iii) asset accounting services (including property level
accounting, preparation of payables and receivables schedules,
property P&Ls, balance sheets, cash reconciliation through
general ledger, excluding corporate accounting, roll up and SEC
filings) as more particularly described on Exhibit E
attached hereto (collectively, “ Specific Services
”). Nothing herein is intended or shall be construed to
require the REIT to utilize ARC II for any or all of the Specific
Services. In addition, nothing herein is intended or shall be
construed to restrict the REIT’s ability to retain any other
party to perform any or all of the Specific Services.
(c) Future Investment Banking
Services . If, at any time during the term of this Agreement or
prior to the expiration of the thirty-six (36) month period
following a successful Follow-On Offering, the REIT is considering
retaining an investment bank or other similar agent in connection
with any merger, acquisition, private placement or sale of the
REIT’s stock or bonds (primary or secondary), the REIT will
endeavor to discuss such actions with ARC II prior to hiring a firm
to provide such investment banking services. The REIT, however,
shall be under no obligation to hire ARC II to furnish such
investment banking services. In the event the REIT elects to hire
ARC II for investment banking or financial advisory services, ARC
II and the REIT shall negotiate in good faith to arrive at mutually
acceptable terms for the specific type of engagement at prevailing
market rates. Notwithstanding anything to the contrary contained in
this Agreement, the REIT shall have no liability based on any
actual or alleged non-compliance with this Section 1(c)
.
(a) ARC Subordinated Incentive
Payment . The REIT agrees to pay ARC II a subordinated
incentive payment (“ ASIP ”) (as set
forth in Exhibit B attached hereto), if any, as
consideration for ARC II (i) providing the General Consulting
Services to the REIT and (ii) making itself available to
provide the Specific Services in accordance with the terms and
conditions of this Agreement.
(b) Specific Consulting
Fees . Subject to the terms and conditions of this
Agreement, the REIT, at its sole option, shall have the right to
utilize ARC II to perform any or all of the Specific Services. As
consideration for such services, the REIT agrees to pay ARC II, as
applicable: (i) the Property Management Fee, as defined and
more particularly described on Exhibit C attached
hereto, (ii) the Real Estate Services Fee, as defined and more
particularly described on Exhibit D attached hereto,
and (iii) the Asset Accounting Fee, as defined and more
particularly described on Exhibit E attached hereto.
|
3.
|
|
Third Party Costs Reimbursement
. All third party costs and expenses incurred by the REIT will be
paid directly by the REIT. All third party out of pocket
costs and expenses reasonably incurred by ARC II on behalf of the
REIT in connection with this Agreement shall be paid directly by
the REIT unless ARC II has paid such out of pocket expense, in
which case the REIT shall reimburse ARC II in arrears within ten
(10) days of presentation of an expense statement and
certificate of payment to the REIT; provided, however , once
such costs and expenses, in the aggregate, exceed $50,000.00 in any
calendar year, all future non-aggregated costs and expenses during
that calendar year shall be subject to approval by the REIT in its
sole discretion.
|
|
4.
|
|
ARC II Solely Consulting to the
REIT .
|
(a) The REIT agrees that ARC II
has been retained pursuant to this Agreement to act solely as a
consultant to provide the services set forth in
Section 1 to the REIT and not as an advisor to or agent
of any other person.
(b) It is specifically
understood that the REIT will not base its decisions regarding
whether and how to pursue any strategic alternative solely on ARC
II’s advice, but will also consider the advice of the
REIT’s management team, board of directors, legal, tax and
other business advisors and such other factors which it considers
appropriate.
(c) The REIT understands and
acknowledges that ARC II does not provide tax or legal advice.
(d) ARC II, as an independent
contractor under this Agreement, shall not assume the
responsibilities of a fiduciary to the REIT or its stockholders in
connection with the performance of ARC II’s services
hereunder.
(e) Except to the extent
specifically set forth in this Agreement, ARC II and the REIT,
together with their respective affiliates, hereby acknowledge that
the rights and obligations they have to one another under any
credit or other agreement are separate from each such party’s
rights and obligations under this Agreement and will not be
affected by either party’s performance under this
Agreement.
|
5.
|
|
Competitive Activities; Right of First
Refusal .
|
(a) During the term of this
Agreement, ARC II and its affiliates hereby agree not to provide
any General Consulting Services or Specific Services to any real
estate investment trust, tenancy-in-common program, fund or other
real estate company primarily engaged in the acquisition, leasing,
operation or management of medical office buildings or
healthcare-related facilities of the type described in the
prospectus contained in the Registration Statement covering the
offering of Shares, as finally amended at the effective date of the
Registration Statement in the section entitled “Investment
Objectives, Strategy and Criteria–Real Property
Investments–Medical Office Buildings and Healthcare-Related
Facilities.”
(b) During the term of this
Agreement, if ARC II or one of its affiliates identifies an
opportunity to make an investment in one or more office buildings
or other facilities for which greater than fifty percent (50%) of
the gross rentable space at such office buildings or other
facilities or notes secured by such office buildings or other
facilities is leased to, or is reasonably expected to be leased to,
one or more medical or healthcare-related tenants, which it
proposes to acquire or recommends to purchase either directly or
indirectly through an affiliate or in a joint venture or other
co-ownership arrangement, for itself or for any other ARC
II-sponsored or managed program, then ARC II agrees that it shall
provide the REIT with the first opportunity to purchase such
investment and that it shall provide all necessary information to
the REIT in order to enable the REIT to determine whether to
proceed with such investment. In the event that the REIT does not
approve proceeding with the investment within thirty (30) days
of receipt of such information from ARC II, the ARC II may proceed
with the investment opportunity for its own account or offer the
investment opportunity to any other person or entity.
(a) No ARC II partner,
stockholder, officer, director, employee, investment advisor, or
any successor in interest of any of them (collectively, the “
ARC II Parties ”) shall have any personal or other
liability of any kind under this Agreement, and the REIT hereby
expressly waives and releases such liability on behalf of itself
and all persons claiming by, through or under the REIT. The
limitations of liability contained in this Section 5(a)
shall inure to the benefit of ARC II’s and the ARC II
Parties’ present and future partners, beneficiaries,
officers, directors, trustees, stockholders, agents and employees,
and their respective partners, heirs, successors and assigns.
(b) No REIT partner,
stockholder, officer, director, employee, investment advisor, or
any successor in interest of any of them (collectively, the “
REIT Parties ”) shall have any personal or other
liability of any kind under this Agreement, and ARC II hereby
expressly waives and releases such liability on behalf of itself
and all persons claiming by, through or under ARC II. The
limitations of liability contained in this Section 5(b)
shall inure to the benefit of the REIT’s and the REIT
Parties’ present and future partners, beneficiaries,
officers, directors, trustees, stockholders, agents and employees,
and their respective partners, heirs, successors and assigns.
|
7.
|
|
Insurance; Fidelity Bonds .
|
(a) Insurance . ARC II shall
procure and maintain, at its sole expense, insurance coverages in
amounts and for such duration as are reasonably required by the
REIT (the “ Coverages ”). The Coverages
shall, at a minimum, be not less than those coverages typically
maintained by third party consultants/service providers for real
estate investment trusts of similar size and engaged in similar
operations. The Coverages shall include, but shall not be limited
to, commercial general liability, follow form excess or umbrella
liability, automobile liability, workers’
compensation/employer’s liability, professional liability,
employment practices liability, fiduciary liability and crime. The
REIT shall be included as an additional insured on the commercial
general liability and follow form excess or umbrella liability
insurance by endorsements reasonably acceptable to the REIT. All
Coverages shall be subject to the REIT’s review and approval,
which approval shall not be unreasonably withheld. Prior to
commencement of the services under this Agreement, ARC II shall
deliver to the REIT certificates of insurance evidencing each of
the required Coverages and shall deliver the additional insured
endorsements required hereunder. At the written request of the
REIT, ARC II shall promptly provide complete, true and correct
copies of each and all of its insurance policies affording the
required Coverages.
(b) Fidelity Bonds . If
required by the REIT, ARC II will maintain a fidelity bond with a
responsible surety company in such amounts as may be reasonably
required by the REIT, covering all members or partners thereof
together with employees and agents of ARC II handling funds of the
REIT and investment documents or records pertaining to investments
of the REIT. Such bonds shall inure to the benefit of the REIT in
respect of losses from acts of such partners, employees and agents
through (but not limited to) theft, embezzlement, fraud,
negligence, error or omission or otherwise. The premiums on such
bonds shall be paid by ARC II.
(c) Deductibles and Self-Insured
Retentions . ARC II shall be solely responsible for timely
payment of any and all deductibles and self-insured retentions
applicable to the Coverages and the fidelity bonds.
|
8.
|
|
Indemnity . The REIT and ARC II
agree to the provisions with respect to the mutual indemnity and
other matters set forth on Exhibit F attached hereto,
the terms of which are incorporated herein in their entirety.
Exhibit F is an integral part of this Agreement and
shall survive any termination or expiration of this Agreement.
|
(a) Term . The term of this
Agreement shall commence as of the date first above written and,
unless sooner terminated pursuant to Sections 9(b) and
(c) below, shall expire three (3) years from the
Effective Date (the “ Term ”).
(b) Termination by the REIT .
At the sole option of the REIT, the REIT may: (i) terminate this
Agreement for any reason or no reason, at any time after the one
(1) year anniversary of the Effective Date upon at least
ninety (90) days written notice, which notice shall not be
permitted prior to the one (1) year anniversary of the
Effective Date; (ii) terminate this Agreement immediately,
subject to any applicable notice and cure period, for “
Cause ” (as defined below);
(iii) terminate this Agreement on ten (10) days written
notice if an affiliate of ARC II terminates any agreement entered
into between the REIT and any affiliate of the ARC II (other than
any agreement entered into for services pursuant to
Section 2 of this Agreement) without cause or good
reason in accordance with the terms of such agreement;
(iv) terminate this Agreement on ten (10) days written
notice if the REIT terminates any agreement entered into between
the REIT and any affiliate of ARC II (other than any agreement
entered into for services pursuant to Section 2 of this
Agreement) for cause in accordance with the terms of such
agreement; (v) terminate this Agreement on ten (10) days
written notice if there shall have occurred any material adverse
change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, or in the management or personnel of ARC II that
materially adversely affects its ability to perform its services
under this Agreement; (vi) terminate this Agreement if ARC II
fails to maintain an adequate number of skilled employees to
professionally carry out the services for which ARC II is being
engaged consistent with third party service providers providing
similar services to real estate investment trusts of similar size
and nature as the REIT and such failure is not cured within sixty
(60) days after written notice thereof from the REIT to ARC
II; and (vii) terminate this Agreement on ten (10) days
written notice if neither William Kahane nor Nicholas Schorsch is
available to provide ongoing non-exclusive services to the REIT in
accordance with this Agreement.
“ Cause ” shall
mean any one of the following:
|
|
(i)
|
|
fraud, criminal conduct, or willful misconduct
by ARC II;
|
|
|
(ii)
|
|
a material breach of this Agreement by ARC II,
provided that (a) ARC II does not cure any such material
breach within thirty (30) days of receiving notice of such
material breach from the REIT, or (b) if such material breach
is not of a nature that can be remedied within such period, ARC II
does not diligently take all reasonable steps to cure such breach
or does not cure such breach within a reasonable time period;
|
|
|
(iii)
|
|
if, a court of competent jurisdiction enters a
decree or order for relief in respect of ARC II in any involuntary
case under the applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appoints a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
ARC II or for any substantial part of its property or orders the
winding up or liquidation of ARC II’s affairs;
|
|
|
(iv)
|
|
if, ARC II commences a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, or consents to
the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
ARC II or for any substantial part of its property, or makes any
general assignment for the benefit of creditors, or fails generally
to pay its debts as they become due; or
|
ARC II agrees that if any of the
events specified in subsections (iii) or (iv) above
occur, it will give written notice thereof to the REIT within seven
(7) days after the occurrence of such event.
(c) Termination by ARC II .
At the sole option of ARC II, ARC II may (i) terminate this
Agreement for any reason or no reason, at any time after the one
(1) year anniversary of the Effective Date upon at least
ninety (90) days written notice, which notice shall not be
permitted prior to the one (1) year anniversary of the
Effective Date, or (ii) terminate this Agreement for “
Good Reason ” (as defined below) immediately,
subject to any applicable notice and cure period.
As used above, “ Good
Reason ” shall mean fraud, criminal conduct or
willful misconduct, or a material breach of this Agreement by the
REIT, provided that (i) the REIT does not cure any such
material breach within thirty (30) days of receiving notice of
such material breach from ARC II, or (ii) if such material
breach is not of a nature that can be remedied within such period,
the REIT does not diligently take all reasonable steps to cure such
breach or does not cure such breach within a reasonable time
period.
|
10.
|
|
Representations and Warranties of ARC
II . As an inducement to the REIT entering into this
Agreement, ARC II hereby represents and warrants to the REIT
that:
|
(a) Skilled Personnel and
Adequate Staffing . ARC II has and will at all times maintain
an adequate number of skilled and licensed employees to
professionally carry out the services for which ARC II is being
engaged consistent with third party service providers to a real
estate investment trust of the size and nature as the REIT. In
addition, ARC II shall at all times maintain an adequate number of
skilled and licensed employees to perform any or all of the
Specific Services set forth in this agreement and shall be
available upon advance written notice by the REIT to have such
employees, as well as all necessary systems, equipment, software
and other appropriate items available to perform such services as
requested by the REIT from time to time consistent with third party
service providers to a real estate investment trust of the size and
nature as the REIT.
(b) Standby Employees . To
the extent the REIT has not elected ARC II to provide any Specific
Services, ARC II shall nevertheless maintain adequate staffing
levels such that ARC II can deploy an adequate amount of skilled
personnel, staff and other human and physical resources to
diligently pursue the completion of any such Specific Services for
the REIT pursuant to the terms of this Agreement upon reasonable
advance written notice, but in no event later than forty-five
(45) days after such advance written notice.
(c) Completion . ARC II shall
diligently pursue the completion of the services for which ARC II
was engaged and shall make its personnel and the personnel of its
affiliates available to the REIT to the extent necessary in order
that its obligations hereunder may be fully discharged in a timely
and first class manner.
(d) Time Commitment . ARC II
shall fully and faithfully discharge its obligations and
responsibilities, and shall devote such time and attention to the
REIT’s affairs as may be necessary to carry out the services
for which ARC II is engaged under this Agreement.
(e) Standard of Care . ARC II
shall, at all times, have a duty to exercise good faith, in
compliance with the terms of this Agreement, and shall use diligent
and professional efforts in performing the services hereunder
consistent with industry standards.
(f) Litigation . There is no
litigation, arbitration or reference proceeding pending or, to ARC
II’s knowledge, threatened against ARC II, against ARC II
with respect to ARC II’s executive management team, or which
could prevent or materially impair the ability of ARC II to perform
its duties and obligations under this Agreement.
(g) No Violations or
Investigations . No proceeding is or was pending against ARC
II, nor to the knowledge of ARC II has there been any
investigations or any threatened proceeding involving or alleging
violations of any federal securities laws, FINRA rules, Blue Sky
laws or any other applicable laws or regulations.
(h) Salaries . ARC II
acknowledges the ARC II is responsible for payment of the salaries
of its own employees.
(i) Financial Status .
ARC II has a net worth in an amount sufficient to
meet its anticipated operating expenses for the following
twelve (12) month period.
|
11.
|
|
Covenants of ARC II . ARC II
covenants and agrees with the REIT as follows:
|
(a) Key Persons . ARC II
agrees to take reasonable steps to retain Nicholas S. Schorsch, and
William M. Kahane (each, a “ Key Employee ,” and
collectively, the “ Key Employees ”) so that
they are available to provide ongoing non-exclusive services
(consistent with this Agreement) for the benefit of the REIT during
the term of this Agreement and for any remaining services to be
provided thereafter by ARC II. The REIT acknowledges that such Key
Employees are at-will employees and will, subject to the
limitations set forth in Section 6 above, be providing
services to other investment programs managed by ARC II and its
affiliates.
(b) Maintenance of Personnel and
Staff . ARC II agrees to maintain an adequate number of skilled
and licensed employees to carry out professionally the services for
which ARC II is being engaged consistent with third party service
providers providing similar services to real estate investment
trusts of similar size and nature as the REIT. In addition, ARC II
shall be available upon reasonable advance written notice by the
REIT to have such employees, as well as all necessary systems,
equipment, software and other appropriate items available to
perform such services as requested by the REIT from time to time
consistent with third party service providers proving similar
services to real estate investment trusts of similar size and
nature as the REIT.
(c) Specific Services
Agreements . To the extent the REIT: (i) requests that ARC
II provide Property Management Services for the REIT, the parties
shall enter into a Property Management Agreement, subject to the
terms and conditions set forth on the attached
Exhibit C ; (ii) requests that ARC II provide
Acquisition and/or Disposition Services for the REIT, the parties
shall enter into a Real Estate Services Agreement, subject to the
terms and conditions set forth on the attached
Exhibit D ; (iii) requests that ARC II provide Asset
Accounting Services for the REIT, the parties shall enter into a
Asset Accounting Services Agreement, subject to the terms and
conditions set forth on the attached Exhibit E .
(d) Cooperation . ARC II
shall use good faith reasonable efforts to fully cooperate with the
REIT, REIT Advisor and GERI, and any other party that may be
necessary