FORM OF ADVISORY AGREEMENT
Exhibit 10.1
FORM OF ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this “Agreement”), dated as of , 2009 (the “Effective
Date”), is by and among XXXXX & XXXXX HEALTHCARE REIT II, INC., a Maryland corporation (the
“Company”), XXXXX & XXXXX HEALTHCARE REIT II HOLDINGS, LP, a Delaware limited partnership (the
“Partnership”), XXXXX & XXXXX HEALTHCARE REIT II ADVISOR, LLC, a Delaware limited liability company
(the “Advisor”).
WITNESSETH
WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration
Statement on Form S-11 (the “Registration Statement”) covering the initial public offering of its
common stock, par value $0.01 per share (the “Shares”);
WHEREAS, the Company intends to qualify as a REIT (as defined below), and intends to invest
its funds in investments permitted by the terms of the Company’s Articles of Incorporation and
Sections 856 through 860 of the Code (as defined below);
WHEREAS, the Company is the general partner of the Partnership and intends to conduct all of
its business and make all of its investments in Properties and Real Estate-Related Investments
through the Partnership;
WHEREAS, the Company and the Partnership desire to avail themselves of the experience, sources
of information, advice, assistance and certain facilities available to the Advisor (as defined
below) and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on
behalf of, and subject to the supervision of, the Board of Directors, all as provided herein; and
WHEREAS, the Advisor is willing to undertake to render such services, subject to the
supervision of the Board of Directors, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms have the definitions
hereinafter indicated:
Acquisition Expenses. Any and all expenses incurred by the Company, the Partnership, the
Advisor, or any Affiliate of any such entity in connection with the selection, evaluation, and
acquisition of, and investment in Properties and Real Estate-Related Investments, whether or not
acquired (or made), including, but not limited to, legal fees and expenses, travel and
communications expenses, cost of appraisals and surveys, nonrefundable option payments on property
not acquired, accounting fees and expenses, architectural, engineering and other property reports,
environmental and asbestos audits, title insurance premiums and escrow fees, transfer taxes, and
miscellaneous expenses related to the selection, evaluation and acquisition of Properties and Real
Estate-Related Investments.
Acquisition Fee. Any and all fees and commissions, exclusive of Acquisition Expenses, paid by
any Person to any other Person (including any fees or commissions paid by or to any Affiliate of
the Company or the Advisor) in connection with the purchase, origination,
development or construction of an Asset, including, without limitation, real estate
commissions, selection fees, Development Fees (as such term is defined in the NASAA Guidelines),
Construction Fees (as such term is defined in the NASAA Guidelines), non-recurring management fees,
loan fees, points or any other fees of a similar nature, however designated. Excluded shall be
Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in
connection with the actual development and construction of any Property.
Advisor. Xxxxx & Xxxxx Healthcare REIT II Advisor, LLC, a Delaware limited liability company,
any successor advisor to the Company and the Partnership to which Xxxxx & Xxxxx Healthcare REIT II
Advisor, LLC or any successor advisor subcontracts substantially all of its functions.
Affiliate or Affiliated. An Affiliate of another Person includes only the following: (i) any
Person directly or indirectly owning, controlling, or holding with the power to vote ten percent
(10.0%) or more of the outstanding voting securities of such other Person; (ii) any Person ten
percent (10.0%) or more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; (iii) any Person directly or
indirectly controlling, controlled by, or under common control with such other Person; (iv) any
executive officer, director, trustee, or general partner of such other Person; and (v) any legal
entity for which such Person acts as an executive officer, director, trustee, or general partner.
An entity shall not be deemed to control or be under common control with an Advisor-sponsored
program unless (i) the entity owns ten percent (10.0%) or more of the voting equity interests of
such program or (ii) a majority of the board of directors (or equivalent governing body) of such
program is comprised of Affiliates of the entity.
Appraised Value. Value according to an appraisal made by an Independent Appraiser.
Articles of Incorporation. The Articles of Incorporation of the Company under Title 2 of the
Corporations and Associations Article of the Annotated Code of
Maryland dated as of January 7,
2009, as amended from time to time.
Asset Management Fee. The Asset Management Fee payable to the Advisor as defined in
Section 8(b).
Average Invested Assets. For a specified period, the average of the aggregate Book Value of
the assets of the Company invested, directly or indirectly, in
Properties and Real Estate-Related Investments, before reserves for depreciation, amortization, bad debt or other similar non-cash
reserves, computed by taking the average of such values at the end of each month during such period
(for loan receivables, the average of the aggregate loan receivable balances outstanding at the end
of each month during such period).
Board of Directors or Board. The persons holding such office, as of any particular time,
under the Articles of Incorporation of the Company, whether they be the Directors named therein or
additional or successor Directors.
Book Value. The value of an asset on the books of the Company, before allowance for
depreciation or amortization.
Bylaws. The bylaws of the Company, as the same are in effect from time to time.
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Capped O&O Expenses. All Organizational and Offering Expenses other than selling commissions
and the dealer manager fee.
Code. Internal Revenue Code of 1986, as amended from time to time, or any successor statute
thereto. Reference to any provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.
Company. Xxxxx & Xxxxx Healthcare REIT II, Inc., a corporation organized under the laws of
the State of Maryland.
Competitive Real Estate Commission. A real estate or brokerage commission for the purchase or
sale of a property which is reasonable, customary, and competitive in light of the size, type, and
location of the property.
Contract Purchase Price. The amount actually paid or allocated by the Company in respect of
the purchase, development, construction or improvement of a Property, or the amount funded or
actually paid to acquire or originate a Real Estate-Related Investment, in each case exclusive of
Acquisition Fees and Acquisition Expenses.
Contract Sales Price. The total consideration received by the Company for the sale of a
Property or other Real Estate-Related Investment exclusive of the applicable Disposition Fee.
Director. A member of the Board of Directors of the Company.
Disposition Fee. The fee payable to the Advisor under certain circumstances in connection
with the Sale of one or more Properties pursuant to Section 8(c).
Distributions. Any distributions of money or other property by the Company to owners of
Shares, including distributions that may constitute a return of capital for federal income tax
purposes.
Fiscal Year. Any period for which any income tax return is submitted by the Company to the
Internal Revenue Service and which is treated by the Internal Revenue Service as a reporting
period.
Gross Income. All cash receipts derived from the operation of any Property, excluding (i)
tenant security deposits unless and until such deposits are forfeited upon a tenant default and
(ii) proceeds from insurance claims, condemnation proceedings, sales or refinancings.
Gross Offering Proceeds. The aggregate purchase price of all Shares sold for the account of
the Company through an Offering, without deduction for volume discounts, selling commissions, the
dealer manager fee or Organizational and Offering Expenses. For the purpose of computing Gross
Offering Proceeds, the purchase price of any Share for which reduced selling commissions are paid
to the dealer manager or a soliciting dealer (where net proceeds to the Company are not reduced)
shall be deemed to be the full amount of the offering price per Share pursuant to the Prospectus
for such Offering without reduction.
Independent Appraiser. A person or entity with no material current or prior business or
personal relationship with the Advisor or the Directors, who is engaged to a substantial extent in
the business of rendering opinions regarding the value of assets of the type held by the Company,
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and who is a qualified appraiser of real estate as determined by the Board. Membership in a
nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or
the Society of Real Estate Appraisers shall be conclusive evidence of such qualification.
Independent Director. A Director who is not on the date of determination, and within the last
two years from the date of determination has not been, directly or indirectly associated with the
Sponsor or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor or any
of their Affiliates, other than the Company, (ii) employment by the Sponsor, the Advisor or any of
their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any of
their Affiliates, other than as a Director of the Company or as a director or trustee of any other
real estate investment trust organized by the Sponsor or advised by the Advisor, (iv) performance
of services, other than as a Director, for the Company, (v) service as a director or trustee of
more than three real estate investment trusts organized by the Sponsor or advised by the Advisor or
(vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor
or any of their Affiliates. A business or professional relationship is considered “material” per
se if the aggregate gross revenue derived by the Director from the Sponsor, the Advisor and their
Affiliates (excluding fees for serving as a Director of the Company or another real estate
investment trust or real estate program that is organized, advised or managed by the Advisor or its
Affiliates) exceeds 5.0% of either the Director’s annual gross income during either of the last two
years or the Director’s net worth on a fair market value basis. An indirect association with the
Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child,
sibling, mother- or father-in-law, son- or daughter-in-law, or brother- or sister-in-law is or has
been associated with the Sponsor, the Advisor, any of their Affiliates or the Company.
Intellectual Property Rights. All rights, titles and interests, whether foreign or domestic,
in and to any and all trade secrets, confidential information rights, patents, invention rights,
copyrights, service marks, trademarks, know-how, or similar intellectual property rights and all
applications and rights to apply for such rights, as well as any and all moral rights, rights of
privacy, publicity and similar rights and license rights of any type under the laws or regulations
of any governmental, regulatory, or judicial authority, foreign or domestic and all renewals and
extensions thereof.
Joint Venture. Any joint venture, partnership, limited liability company or other Affiliate
of the Company (other than the Partnership) that owns, in whole or in part on behalf of the
Company, any Properties.
Lease Fee. The Lease Fee payable to the Advisor, an Affiliate of the Advisor or a
non-Affiliated third party, as defined in Section 8(d).
Listing. The term “Listing” shall mean that the Shares have been approved for trading on a
national securities exchange. Upon such Listing, the Shares shall be deemed Listed.
NASAA Guidelines. The Statement of Policy Regarding Real Estate Investment Trusts published
by the North American Securities Administrators Association, Inc. on May 7, 2007, and as in effect
on the date hereof.
Net Income. For any period, the total revenues applicable to such period, less the total
expenses applicable to such period excluding additions to reserves for depreciation, amortization,
bad debt or other similar non-cash reserves; provided, however, Net Income for purposes of
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calculating total allowable Operating Expenses (as defined herein) shall exclude the gain from
the sale of the Company’s assets.
Offering. Any offering of Shares that is registered with the Securities and Exchange
Commission, excluding Shares offered under any employee benefit plan.
Offering Stage. The period from the commencement of the Company’s initial public equity
offering through the termination of the Company’s last public equity offering prior to Listing.
For purposes of this definition, “public equity offering” does not include offerings on behalf of
selling stockholders or offerings related to a distribution reinvestment plan, employee benefit
plan or the redemption of interests in the Partnership.
Operating Expenses. All costs and expenses incurred by the Company, as determined under
generally accepted accounting principles in the United States of America, which in any way are
related to the operation of the Company or to Company business, including fees paid to the Advisor,
but excluding (i) the expenses of raising capital such as Organizational and Offering Expenses,
legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing
and other such expenses and tax incurred in connection with the issuance, distribution, transfer,
registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash
expenditures such as depreciation, amortization and bad loan reserves, (v) incentive fees paid in
compliance with Section IV.F of the NASAA Guidelines and (vi) Acquisition Fees and Acquisition
Expenses, real estate commissions on resale of property, and other expenses connected with the
acquisition, disposition, and ownership of real estate interests, mortgage loans or other property
(such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property).
Organizational and Offering Expenses. Any and all costs and expenses, including selling
commissions and the dealer manager fee, incurred by the Advisor or any Affiliate in connection with
the formation, qualification and registration of the Company and the offering of the Shares,
including, without limitation, the following: total underwriting and brokerage discounts and
commissions (including fees of the underwriter’s attorneys); printing, engraving, mailing and
distributing costs; salaries of employees while engaged in sales activity; all charges of transfer
agents, registrars, trustees, escrow holders, depositories and experts; and fees, expenses and
taxes related to the filing, registration and qualification of the sale of the Shares under federal
and state laws, including accountants’ and attorneys’ fees.
Partnership. Xxxxx & Xxxxx Healthcare REIT II Holdings, LP, a Delaware limited partnership
formed to own and operate properties on behalf of the Company.
Partnership Agreement. The Agreement of Limited Partnership of the Partnership, as amended
from time to time, between the Company, as General Partner and the Advisor, as the initial Limited
Partner.
Person. An individual, corporation, partnership, estate, trust (including a trust qualified
under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or
to be used exclusively for the purposes described in Section 642(c) of the Code, association,
private foundation within the meaning of Section 509(a) of the Code, joint stock company or other
entity, or any government or any agency or political subdivision thereof, and also includes a group
as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
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Property or Properties. Any land, rights in land (including leasehold interests), and any
buildings, structures, improvements, furnishings, fixtures and equipment located on or used in
connection with land and rights or interests in land, or any portion thereof, transferred or
conveyed to the Company or the Partnership, either directly or indirectly, or such investments the
Board of Directors and the Advisor mutually designate as Properties to the extent such investments
could be classified as either Properties or Real Estate-Related Investments.
Property Management Fee. The Property Management Fee as defined in Section 8(d).
Property Manager. Any entity that has been retained to perform and carry out property rental,
leasing, operation and management services at one or more of the Properties, excluding persons,
entities or independent contractors retained or hired to perform facility management or other
services or tasks at a particular Property.
Proprietary Property. All modeling algorithms, tools, computer programs, know-how,
methodologies, processes, technologies, ideas, concepts, skills, routines, subroutines, operating
instructions and other materials and aides used in performing the duties set forth and all
modifications, enhancements and derivative works of the foregoing.
Prospectus. Prospectus has the meaning set forth in Section 2(10) of the Securities
Act of 1933, as amended, including a preliminary prospectus, an offering circular as described in
Rule 253 of the General Rules and Regulations under the Securities Act of 1933, as amended, or, in
the case of an intrastate offering, any document by whatever name known, utilized for the purpose
of offering and selling securities of the Company to the public.
REIT. A real estate investment trust under Sections 856 through 860 of the Code.
Real Estate-Related Investments. Any real estate-related investments transferred or conveyed
to the Company or the Partnership, either directly or indirectly, or such investments the Board of
Directors and the Advisor mutually designate as Real Estate-Related Investments to the extent such
investments could be classified as either Real Estate-Related Investments or Properties.
Sale or Sales. (i) Any transaction or series of transactions whereby: (A) the Company or the
Partnership (except as described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of
any Property consisting of the building only, and including any event with respect to any Property
which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the
Company or the Partnership (except as described in other subsections of this definition) sells,
puts, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest
of the Company or the Partnership in any joint venture in which it is a co-venturer or partner; (C)
any joint venture (except as described in other subsections of this definition) in which the
Company or the Partnership as a co-venturer or partner sells, grants, transfers, conveys, or
relinquishes its ownership of any Property or portion thereof, including any event with respect to
any Property which gives rise to insurance claims or condemnation awards; (D) the Company or the
Partnership directly or indirectly (except as described in other subsections of this definition)
sells, grants, conveys or relinquishes its interest in any loan or mortgage or any portion thereof
(including with respect to any mortgage or loan, all payments thereunder or in satisfaction thereof
other than regularly scheduled interest payments) of amounts owed pursuant to such loan or mortgage
and any event which gives rise to the payment of a significant amount of insurance proceeds or
condemnation or similar award; or (E) the Company or the Partnership directly or
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indirectly (except as described in other subsections of this definition) sells, grants,
transfers, conveys or relinquishes its ownership of any other Property not previously described in
this definition or any portion thereof, but (ii) not including any transaction or series of
transactions specified in clause (i)(A), (i)(B), (i)(C), (i)(D) or (i)(E) above in which the
proceeds of such transaction or series of transactions are reinvested in one or more Properties
within one hundred eighty (180) days thereafter.
Sponsor. Xxxxx & Xxxxx Company.
Stockholders. The registered holders of the Shares.
2.0%/25.0% Guidelines. The 2.0%/25.0% Guidelines as defined in Section 9(c)(ii).
2. Appointment. The Company and the Partnership appoint the Advisor to serve as its
advisor as of the Effective Date, on the terms and conditions set forth in this Agreement, and the
Advisor hereby accepts such appointment as of the Effective Date.
3. Duties and Authority of the Advisor. The Advisor undertakes to use its
commercially reasonable efforts (1) to present to the Company and the Partnership potential
investment opportunities in order to provide a continuing and suitable investment program
consistent with the investment objectives and policies of the Company as determined and adopted
from time to time by the Board and (2) to manage, administer, promote, maintain, and improve the
Properties on an overall portfolio basis in a diligent manner. The services of the Advisor are to
be of scope and quality not less than those generally performed by professional asset managers of
other similar property portfolios. The Advisor shall make available the full benefit of the
judgment, experience and advice of the members of the Advisor’s organization and staff with respect
to the duties it will perform under this Agreement. To facilitate the Advisor’s performance of
these undertakings, but subject to the restrictions included in Sections 4 and 7
and the provisions of Section 11 and to the continuing and exclusive authority of the Board
and the general partner of the Partnership, the Company and the Partnership hereby delegate to the
Advisor the authority to, and the Advisor hereby agrees to, either directly or by engaging a duly
qualified and licensed Affiliate of the Advisor or other duly qualified and licensed Person:
(a) serve as the Company’s and the Partnership’s investment and financial advisor and, as
requested by the Board, provide research and economic and statistical data in connection with the
Company’s assets and investment policies;
(b) provide the daily management of the Company and the Partnership and perform and supervise
the various administrative functions reasonably necessary for the management of the Company and the
Partnership;
(c) maintain and preserve the books and records of the Company, including (i) a stock ledger
reflecting a record of the Stockholders and their ownership of the Company’s Shares, (ii) acting as
transfer agent for the Company’s Shares or selecting, engaging and overseeing the performance by a
third party transfer agent, and (iii) maintaining the accounting and other record-keeping functions
at the Property and Company levels;
(d) investigate, select, and, on behalf of the Company and the Partnership, engage and conduct
business with such Persons as the Advisor deems necessary to the proper performance of its
obligations hereunder, including but not limited to consultants, accountants, correspondents,
lenders, technical advisors, attorneys, brokers, underwriters, transfer agents, corporate
fiduciaries,
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escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents,
banks, builders, developers, property owners, property management companies, real estate operating
companies, securities investment advisors, mortgagors, and any and all agents for any of the
foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by
the Advisor necessary or desirable for the performance of any of the foregoing services, including
but not limited to entering into contracts in the name of the Company and the Partnership with any
of the foregoing;
(e) make investments in and dispositions of Real Estate-Related Investments within the
discretionary limits and authority as granted by the Board and in accordance with the Articles of
Incorporation;
(f) consult with the officers of the Company and the Board and assist the Board in the
formulation and implementation of the Company’s financial policies, and, as necessary, furnish the
Board with advice and recommendations with respect to the making of investments consistent with the
investment objectives and policies of the Company and in connection with any borrowings proposed to
be undertaken by the Company and the Partnership;
(g) select joint venture partners, structure corresponding agreements and oversee and monitor
these relationships;
(h) recommend to the Board of Directors appropriate transactions which would provide liquidity
to the Stockholders;
(i) oversee the performance by a third party or Affiliated Property Manager of its duties,
including collection of payments due from third parties under contracts related to use of any
Property and other assets of the Company and payment of Property expenses and maintenance;
(j) conduct periodic on-site visits to some or all (as the Advisor deems reasonably necessary)
of the Properties to inspect the physical condition of the Properties and to evaluate the
performance of a third party or Affiliated Property Manager of its duties;
(k) review, analyze and comment upon the operating budgets, capital budgets and leasing plans
prepared and submitted by a third party or Affiliated Property Manager and aggregate these property
budgets into the Company’s overall budget;
(l) review and analyze on-going financial information pertaining to each Property, each Real
Estate-Related Investment and the overall portfolio of Properties and Real Estate-Related
Investments;
(m) if a transaction requires approval by the Board of Directors, deliver to the Board of
Directors all documents requested by them in their evaluation of the proposed investment in the
Property or the Real Estate-Related Investment;
(n) formulate and oversee the implementation of strategies for the administration, promotion,
management, operation, maintenance, improvement, financing and refinancing, marketing, leasing, and
disposition of Properties on an overall portfolio basis;
(o) subject to the provisions of Sections 3(m) and 4 hereof, (i) locate,
analyze and select potential investments in Properties and Real Estate-Related Investments, (ii)
structure and negotiate the terms and conditions of transactions pursuant to which investment in
Properties and
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Real Estate-Related Investments will be made; (iii) make investments in Properties and Real
Estate-Related Investments on behalf of the Company or the Partnership in compliance with the
investment objectives and policies of the Company; (iv) arrange for financing and refinancing and
make other changes in the asset or capital structure of, and dispose of, reinvest the proceeds from
the sale of, or otherwise deal with the investments in, Properties and Real Estate-Related
Investments; (v) enter into leases, supply agreements and other income-producing contracts relating
to third party use of any Property and Real Estate-Related Investments of the Company; (vi) enter
into service contracts for any Property or Real Estate-Related Investment, including oversight of
Affiliated companies that perform property management services for the Company and the Partnership;
(vii) if applicable, oversee a non-Affiliated Property Manager and any other non-Affiliated Persons
who perform services for the Company; and (viii) to the extent necessary, perform all other
operational functions for the maintenance and administration of such Property or Real
Estate-Related Investments;
(p) obtain the prior approval of the Board, any particular Directors specified by the Board or
any committee of the Board, as the case may be, for any and all investments in Properties and Real
Estate-Related Investments;
(q) negotiate on behalf of the Company and the Partnership with banks or lenders for loans to
be made to the Company, and negotiate on behalf of the Company and the Partnership with investment
banking firms and broker-dealers or negotiate private sales of Shares and other securities or
obtain loans for the Company and the Partnership, but in no event in such a way so that the Advisor
shall be acting as broker-dealer or underwriter; provided, further, that any fees and costs payable
to third parties incurred by the Advisor in connection with the foregoing shall be the
responsibility of the Company or the Partnership;
(r) on behalf of the Company and the Partnership, maintain, with respect to any Property and
to the extent available, title insurance or other assurance of title and customary fire, casualty
and public liability insurance;
(s) obtain reports (which may be prepared by the Advisor or its Affiliates), where
appropriate, concerning the value of investments or contemplated investments of the Company and the
Partnership in Properties or Real Estate-Related Investments;
(t) from time to time, or at any time reasonably requested by the Board, provide information
or make reports to the Board related to its performance of services to the Company and the
Partnership under this Agreement;
(u) from time to time, or at any time reasonably requested by the Board, make reports to the
Board of the investment opportunities it has presented to other Advisor-sponsored programs or that
it has pursued directly or through an Affiliate;
(v) provide the Company and the Partnership with all necessary cash management services;
(w) deliver to or maintain on behalf of the Company copies of all appraisals obtained in
connection with the investments in Properties and all valuations of Real Estate-Related Investments
as may be required to be obtained by the Board;
(x) notify the Board of all proposed material transactions before they are completed;
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(y) at the direction of Company management, prepare the Company’s periodic reports and other
filings made under the Securities Exchange Act of 1934, as amended, and the Company’s
Post-Effective Amendments to the Registration Statement as well as all related prospectuses,
prospectus supplements and supplemental sales literature and assist in connection with the filing
of such documents with the appropriate regulatory authorities;
(z) supervise the preparation and filing and distribution of returns and reports to
governmental agencies and to investors and act on behalf of the Company in connection with investor
relations;
(aa) effect any private placements of Shares or other interests in Properties as may be
approved by the Board;
(bb) establish and maintain bank accounts on behalf of the Company and the Partnership
pursuant to Section 5 of this Agreement;
(cc) provide office space, equipment and personnel as required for the performance of the
foregoing services as the Advisor; and
(dd) do all things it reasonably deems necessary to assure its ability to render the services
described in this Agreement.
4. Modification or Revocation of Authority of Advisor. The Board may, at any time
upon the giving of notice to the Advisor, modify or revoke the authority or approvals set forth in
Section 3; provided, however, that such modification or revocation shall be effective upon
receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor
has committed the Company and the Partnership prior to the date of receipt by the Advisor of such
notification.
5. Bank Accounts. At the direction of the Board of Directors, the Advisor may
establish and maintain one or more bank accounts in its own name for the account of the Company and
the Partnership or in the name of the Company and the Partnership and may collect and deposit into
any such account or accounts, and disburse from any such account or accounts, any money on behalf
of the Company and the Partnership, under such terms and conditions as the Board may approve,
provided that no funds shall be commingled with the funds of the Advisor; and the Advisor shall
from time to time render appropriate accountings of such collections and payments to the Board and
to the auditors of the Company.
6. Records; Access. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board and by counsel,
auditors and authorized agents of the Company, at any time or from time to time during normal
business hours. The Advisor shall at all reasonable times have access to the books and records of
the Company and the Partnership.
7. Limitations on Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made
in good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the
Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law,
rule, regulation or statement of policy of any governmental body or agency having jurisdiction over
the Company or the Partnership, its Shares or its other securities, or otherwise not be permitted
by the Articles of Incorporation or Bylaws of the Company, except if
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such action shall be ordered by the Board, in which case the Advisor shall notify promptly the
Board of the Advisor’s judgment of the potential impact of such action and shall refrain from
taking such action until it receives further clarification or instructions from the Board. In such
event the Advisor shall have no liability for acting in accordance with the specific instructions
of the Board so given. Notwithstanding the foregoing, the Advisor, its directors, officers,
employees and stockholders, and stockholders, directors and officers of the Advisor’s Affiliates
shall not be liable to the Company, the Partnership, the Board or to the Stockholders for any act
or omission by the Advisor, its directors, officers, employees or stockholders, or stockholders,
directors or officers of the Advisor’s Affiliates taken or omitted to be taken in the performance
of their duties under this Agreement except as provided in Sections 20 and 21 of
this Agreement.
8. Fees.
(a) Acquisition Fee. The Advisor or its Affiliates shall receive as compensation for services
rendered in connection with the investigation, selection and acquisition of Properties or Real
Estate-Related Investments (by purchase, investment or exchange) funded by equity raised during the
Offering Stage through the Advisor or its Affiliates, including any acquisitions completed after
the end of the Offering Stage and/or the termination of this Agreement or funded with net proceeds
from a Sale, an acquisition fee payable by the Company (the “Acquisition Fee”). The total
Acquisition Fee paid to the Advisor or its Affiliates for services provided by the Advisor, its
Affiliates or sub-contractors thereof, but excluding real estate commissions paid to real estate
broker Affiliates of the Advisor, shall be (x) with respect to each Real Estate-Related Investment,
two percent (2.0%) of the Contract Purchase Price of each such Real Estate-Related Investment and
(y) with respect to Properties, two and three-quarters percent (2.75%) of the Contract Purchase
Price of each such Property.
At the Advisor’s discretion, a portion of the Acquisition Fee may be paid to third-party
developers for services rendered. Acquisition Fees shall be payable on the acquisition of a
specific Property, on the acquisition of a portfolio of Properties through a purchase of assets,
controlling securities or by joint venture, by a merger or similar business combination or other
comparable transaction, or on the completion of development of a Property or Properties for the
Company, including the acquisition of any Properties funded by equity raised during the Offering
Stage by the Advisor or its Affiliates which are completed after the end of the Offering Stage
and/or the termination of this Agreement. However, the total of all Acquisition Fees and
Acquisition Expenses payable with respect to any Property or Real Estate-Related Investment that is
acquired shall not exceed six percent (6.0%) of the Contract Purchase Price of such Property or
Real Estate-Related Investment unless fees in excess of such amount are approved by a majority of
the Board of Directors, including a majority of the Independent Directors.
(b) Asset Management Fee. Subject to the overall limitations contained below in this
Section 8(b), commencing on the Effective Date, the Advisor shall be paid a monthly fee in
arrears for the services rendered in connection with the management of the Company’s assets (the
“Asset Management Fee”) in an amount equal to one-twelfth of eighty-five one-hundredths of one
percent (0.85%) of the Average Invested Assets for such month; provided, however, that the
Company’s obligation to pay the Asset Management Fee shall be subject to the Stockholders receiving
Distributions in an amount equal to five percent (5.0%) per annum, cumulative, non-compounded, of
average Invested Capital (as such term is defined in the Articles of Incorporation). The Asset
Management Fee shall be payable by the Company in cash or in Shares at the election of the Advisor
in whole or in part, from time to time, by the Advisor (without interest); provided, however, that
the Company may object to the Advisor’s election and refuse to pay the Advisor in Shares if such
payment would result in a conflict with any provision of the
11
Articles of Incorporation. If the Advisor elects to receive the Asset Management Fee in the
form of Shares and such election does not conflict with any provision of the Articles of
Incorporation, then the Shares shall be valued at a price per share equal to the average closing
price of the Shares over the ten trading days immediately preceding the date of such election if
the Shares are Listed at such time. If the Shares are not Listed and the Company is still in its
Offering Stage, and for the twelve-month period following the termination of the Offering Stage, at
such time, the Advisor will estimate the per share value of the Shares at a price per share equal
the most recent price paid to acquire a Share during the Offering Stage (excluding any Shares sold
pursuant to any distribution reinvestment plan or sold with purchase price discounts). If the
Shares are not Listed and the Offering Stage has been completed for more than twelve (12) months at
such time, the Shares shall be valued at a price per share equal to the estimated value of the
shares as reasonably determined by the Advisor on the date of election, based upon the most recent
Appraised Value of the Company.
(c) Disposition Fee. If the Advisor or an Affiliate of the Advisor provides a substantial
amount of services (as determined by a majority of the Independent Directors) in connection with
the Sale of one or more Properties, the Advisor or such Affiliate shall receive at closing a
disposition fee equal to the lesser of (i) two percent (2.0%) of the Contract Sales Price of such
Property or Properties, or (ii) fifty percent (50.0%) of a Competitive Real Estate Commission given
the circumstances surrounding the sale (the “Disposition Fee”). In each case in which a Disposition
Fee may be payable, the precise amount of the fee within the limits set forth in the preceding
sentence shall be determined by the Board, including a majority of the Independent Directors, based
upon the extent of the services provided by the Advisor or its Affiliate and market norms for the
services provided. Notwithstanding anything to the contrary herein, no Disposition Fee shall be
payable to the Advisor or its Affiliate for Property Sales if such Sales involve the Company
selling all or substantially all of its Properties in one or more transactions designed to
effectuate a business combination transaction (as opposed to a Company liquidation, in which case
the Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount
of services as provided above). Any Disposition Fee payable under this section may be paid in
addition to real estate commissions paid to non-Affiliates, provided that the total real estate
commissions (including such Disposition Fee) paid to all Persons by the Company for each Property
shall not exceed an amount equal to the lesser of (i) six percent (6.0%) of the Contract Sales
Price of the Property or (ii) the Competitive Real Estate Commission for the Property.
(d) Property Management Fee; Lease Fee. Either the Advisor or an Affiliate of the Advisor as
the Property Manager shall receive a monthly property management fee of up to four percent (4.0%)
of the monthly Gross Income from each Property managed by such Property Manager (the “Property
Management Fee”). The Advisor or an Affiliate of the Advisor may sub-contract its duties to any
third-party, including for fees less than the Property Management Fee payable to the Advisor. In
addition, the Advisor or an Affiliate of the Advisor as the Property Manager may receive a separate
fee for any leasing activities in an amount not to exceed the fee customarily charged in arm’s
length transactions by others rendering similar services in the same geographic area for similar
properties, as determined by a survey of brokers and agents in such area (the “Lease Fee”). The
Lease Fee is generally expected to range from three percent (3.0%) to eight percent (8.0%) of the
gross revenues generated during the initial term of the lease. In addition to the above Property
Management Fee and Lease Fee, for each Property managed directly by a non-Affiliated Property
Manager but where an Affiliate of the Advisor has oversight responsibility over such non-Affiliated
Property Manager, the Company will pay such Affiliate of the Advisor a monthly oversight fee of up
to one percent (1.0%) of the Gross Income from the Property; provided, however, that in no event
shall the Company pay both the Property
12
Management Fee and an oversight fee to the Advisor or its Affiliates with respect to the same
property.
(e) Construction Management Fee; Development Services Fee. In the event that the Advisor or
its Affiliates assist with planning and coordinating the construction of any capital or tenant
improvements, the Company may pay the respective party up to 5.0% of the cost of such improvements.
In addition, the Advisor or its Affiliates may provide development-related services, and the
Company will pay the respective party a development fee in an amount that is usual and customary
for comparable services rendered for similar projects in the geographic market where the services
are provided; however, the Company will not pay a development fee to the Advisor or its Affiliates
if the Advisor elects to receive an Acquisition Fee based on the cost of such development.
9. Expenses.
(a) Reimbursable Expenses. In addition to the compensation paid to the Advisor pursuant to
Section 8 hereof, the Company or the Partnership shall pay directly or reimburse the
Advisor for all of the expenses paid or incurred by the Advisor (to the extent not reimbursable by
another party, such as the dealer manager) in connection with the services it provides to the
Company and the Partnership pursuant to this Agreement, including, but not limited to:
(i) the Organizational and Offering Expenses; provided, however, that within sixty (60) days
after the end of the month in which an Offering terminates, the Advisor shall reimburse the Company
to the extent (i) Capped O&O Expenses borne by the Company exceed the maximum amount permitted
pursuant to the Prospectus for the Offering and (ii) Organizational and Offering Expenses borne by
the Company exceed fifteen percent (15.0%) of the Gross Offering Proceeds raised in a completed
Offering;
(ii) Acquisition Expenses incurred in connection with the selection and acquisition of
Properties and Real Estate-Related Investments, whether or not acquired, subject to the aggregate
six percent (6.0%) cap on Acquisition Fees and Acquisition Expenses set forth in Section
8(a) above;
(iii) the actual cost of goods and services used by the Company and obtained from entities not
Affiliated with the Advisor, other than Acquisition Expenses, including brokerage fees paid in
connection with the purchase and sale of Real Estate-Related Investments;
(iv) interest and other costs for borrowed money, including discounts, points and other
similar fees;
(v) taxes and assessments on income of the Company or any of the Properties;
(vi) costs associated with insurance required in connection with the business of the Company
or by the Board;
(vii) expenses of managing and operating Properties owned by the Company, whether payable to
an Affiliate of the Company or a non-Affiliated Person;
(viii) all compensation and expenses payable to the Independent Directors and all expenses
payable to the non-Independent Directors in connection with their services to the
13
Company and the Stockholders and their attendance at meetings of the Directors and the
Stockholders;
(ix) expenses associated with Listing or with the issuance and distribution of securities
other than the Shares, such as selling commissions and fees, advertising expenses, taxes, legal and
accounting fees, listing and registration fees;
(x) expenses connected with payments of Distributions in cash or otherwise made or caused to
be made by the Company to the Stockholders;
(xi) expenses of organizing, redomesticating, merging, liquidating or dissolving the Company
or of amending the Articles of Incorporation or the Bylaws;
(xii) expenses of maintaining communications with Stockholders or their financial advisors,
including the cost of preparation, printing, and mailing annual reports and other Stockholder
reports, proxy statements and other reports required by governmental entities;
(xiii) administrative service expenses (including (a) personnel costs; provided, however, that
no reimbursement shall be made for costs of personnel to the extent that such personnel perform
services in transactions for which the Advisor receives a separate fee, and (b) the Company’s
allocable share of other overhead of the Advisor such as rent and utilities);
(xiv) transfer agent and registrar’s fees and charges;
(xv) expenses associated with the disposition of Properties, including, subject to Section
8(c), real estate commissions;
(xvi) audit, accounting, legal and other professional fees; and
(xvii) all other administrative service expenses, including all costs and expenses incurred by
Advisor in fulfilling its duties hereunder. Such costs and expenses may include reasonable wages
and salaries and other employee-related expenses of all employees of the Advisor or its Affiliates
who are engaged in the management, administration, operations, or marketing of the Company,
including taxes, insurance and benefits relating to such employees, and legal, travel and other
out-of-pocket expenses which are directly related to their services provided hereunder.
(b) Other Services. Should the Board request that the Advisor, any Affiliate of the Advisor
or any director, officer or employee thereof render services for the Company and the Partnership
other than set forth in Section 3, such additional services, if the Advisor elects to
perform them, shall be separately compensated at such rates and in such amounts as are agreed by
the Advisor and the Board, including a majority of the Independent Directors, subject to the
limitations contained in the Articles of Incorporation, shall not exceed an amount that would be
paid to non-Affiliated third parties for similar services, and shall not be deemed to be services
pursuant to the terms of this Agreement.
(c) Timing of and Limitations on Reimbursements.
(i) Expenses incurred by the Advisor on behalf of the Company and the Partnership and payable
pursuant to this Section 9 shall be reimbursed at least quarterly to the Advisor. The
Advisor shall prepare a statement documenting the expenses of the Company and the Partnership
14
during each quarter, and shall deliver such statement to the Company and the Partnership
within forty-five (45) days after the end of each quarter.
(ii) The Company shall not reimburse the Advisor at the end of any fiscal quarter Operating
Expenses that, in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the
“Excess Amount”) the greater of two 2.0% of Average Invested Assets or 25.0% of Net Income (the
“2.0%/25.0% Guidelines”) for such year unless a majority of the Independent Directors determines
that such Excess Amount was justified, based on unusual and nonrecurring factors that a majority of
the Independent Directors deems sufficient. If a majority of the Independent Directors does not
approve such excess as being so justified, any Excess Amount paid to the Advisor during a fiscal
quarter shall be repaid to the Company. If a majority of the Independent Directors determines such
excess was justified, then within sixty (60) days after the end of any fiscal quarter of the
Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2.0%/25.0%
Guidelines, the Advisor, at the direction of a majority of the Independent Directors, shall send to
the Stockholders a written disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such excess expenses were justified. The
Company will ensure that such determination will be reflected in the minutes of the meetings of the
Board of Directors. All figures used in the foregoing computation shall be determined in
accordance with generally accepted accounting principles in the United States of America, applied
on a consistent basis. In the event that the Independent Directors do not determine that excess
expenses were justified, the Advisor shall reimburse the Corporation the amount by which the
expense reimbursement exceeded the 2.0%/25.0% Guidelines.
(iii) The foregoing reimbursements of expenses, as limited by this Agreement, will be made
regardless of whether any cash distributions are made to the Stockholders.
10. Statements. The Advisor shall furnish to the Company not later than the thirtieth
(30th) day following the end of each Fiscal Year, a statement showing a computation of the fees or
other compensation payable to the Advisor or an Affiliate of the Advisor with respect to such
Fiscal Year under Sections 8 and 9 hereof. The final settlement of compensation
payable under Sections 8 and 9 hereof for each Fiscal Year shall be subject to
adjustments in accordance with, and upon completion of, the annual audit of the Company’s financial
statements.
11. Internalization of the Advisor. To the extent that the Board of Directors
determines that it is in the best interests of the stockholders of the Company to internalize
(acquire from the Advisor) any management functions provided by Advisor, the compensation payable
to the Advisor for such specific internalization shall be negotiated and agreed upon by the
Independent Directors and the Advisor.
12. Other Activities of the Advisor. Nothing herein contained shall prevent the
Advisor from engaging in other activities, including, without limitation, the rendering of advice
to other Persons (including other REITs) and the management of other programs advised, sponsored or
organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict the right of
any director, officer, employee, or stockholder of the Advisor or its Affiliates to engage in any
other business or to render services of any kind to any other partnership, corporation, firm,
individual, trust or association. The Advisor may, with respect to any investment in which the
Company or the Partnership is a participant, also render advice and service to each and every other
participant therein. The Advisor shall report to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates or could create a
conflict of interest between the Advisor’s obligations to the Company and the Partnership and its
15
obligations to or its interest in any other partnership, corporation, firm, individual, trust
or association.
13. Non-Solicitation. The Company agrees not to solicit any current and/or future
employees of the Advisor or its Affiliates for employment or in any consulting or similar capacity
during the Offering Stage and for two (2) years following the termination of the Offering Stage.
14. Information Furnished to the Advisor. The Board of Directors will keep the
Advisor informed concerning the investment and financing policies of the Company. The Board of
Directors shall notify the Advisor promptly of its intention to make any investments or to sell or
dispose of any existing investments. The Board of Directors will timely notify the Advisor of any
activities or actions that would require a report or other filing be made with the Securities and
Exchange Commission or any other governmental or regulatory authority. Upon request of the
Advisor, the Company shall furnish the Advisor with a certified copy of any Company financial
statements, a signed copy of each report prepared by independent certified public accountants, and
such other information with regard to its affairs as the Advisor may reasonably request.
15. Relationship of Advisor and Company. The Company, the Partnership and the Advisor
are not partners or joint venturers with each other, and nothing in this Agreement shall be
construed to make them such partners or joint venturers or impose any liability as such on either
of them.
16. Term. This Agreement shall continue in force until the first anniversary of the
Effective Date, subject to an unlimited number of successive one-year renewals upon mutual consent
of the parties. The Board will evaluate the performance of the Advisor annually before renewing
the Agreement.
17. Termination.
(a) This Agreement may be terminated upon sixty (60) days written notice without cause or
penalty, by either party (if by the Company, only upon approval of a majority of the Independent
Directors).
(b) Survival. The provisions of Sections 6, 7, 11, 13, and 19 through 32, and
the provisions of Section 8, shall survive expiration or termination of this Agreement.
18. Assignment. This Agreement shall not be assigned by the Advisor to a
non-Affiliate. This Agreement may be assigned by the Advisor to an Affiliate with the approval of
the Board, including a majority of the Independent Directors. Notwithstanding the foregoing, the
Advisor may assign any rights to receive fees or other payments under this Agreement without
obtaining the approval of the Board. This Agreement shall not be assigned by the Company or the
Partnership without the consent of the Advisor, except in the case of an assignment by the Company
or the Partnership to a corporation or other organization which is a successor to all of the
assets, rights and obligations of the Company or the Partnership, as the case may be, in which case
such successor organization shall be bound hereunder and by the terms of said assignment in the
same manner as the Company and the Partnership is bound by this Agreement.
19. Payments to and Duties of Advisor Upon Termination. Payments to the Advisor
pursuant to this Section 19 shall be subject to the 2.0%/25.0% Guidelines to the extent
applicable.
16
(a) After the expiration or termination of this Agreement, the Advisor shall not be entitled
to compensation for further services hereunder except that it shall be entitled to the Acquisition
Fee to the extent provided by Section 8(a) and it shall be entitled to receive from the Company
within thirty (30) days after the effective date of such termination all unpaid reimbursements of
expenses and all earned but unpaid fees payable to the Advisor prior to termination of this
Agreement; and
(b) The Advisor shall promptly upon termination:
(i) pay over to the Company all money collected and held for the account of the Company
pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled;
(ii) deliver to the Board a full accounting, including a statement showing all payments
collected by it and a statement of all money held by it, covering the period following the date of
the last accounting furnished to the Board;
(iii) deliver to the Board all assets, including Properties and Real Estate-Related
Investments, and documents of the Company then in the custody of the Advisor; and
(iv) cooperate with the Company to provide an orderly management transition.
20. Indemnification by the Company.
(a) The Company shall indemnify and hold harmless the Advisor and its Affiliates, including
their respective officers, directors, partners and employees, from all liability, claims, damages
or losses arising in the performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related
expenses are not fully reimbursed by insurance, provided that the Company shall not indemnify and
hold harmless the Advisor or its Affiliates unless:
(i) the Advisor or its Affiliates have determined, in good faith, that the course of conduct
which caused the loss or liability was in the best interests of the Company;
(ii) the Advisor or its Affiliates were acting on behalf of or performing services for the
Company;
(iii) such liability or loss was not the result of negligence or misconduct by the Advisor or
its Affiliates; and
(iv) such indemnification or agreement to hold harmless is recoverable only out of Company’s
net assets and not from its stockholders.
The obligation of the Company to indemnify or hold harmless the Advisor and its Affiliates shall
also be subject to any limitations imposed by Maryland law.
21. Indemnification by Advisor. The Advisor shall indemnify and hold harmless the
Company from contract or other liability, claims, damages, taxes or losses and related expenses,
including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and
related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s
bad faith, fraud, willful misfeasance, misconduct, or reckless disregard of its duties, but
17
the Advisor shall not be held responsible for any action of the Board in following or
declining to follow advice or recommendation given by the Advisor.
22. Fidelity Bond. The Advisor shall not be required to obtain or maintain a fidelity
bond in connection with the performance of its services hereunder.
23. Notices. Any notice, report or other communication required or permitted to be
given hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to
whom it is given, and shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:
To the Board and to the Company:
|
Xxxxx & Xxxxx Healthcare REIT II, Inc. | |
| 0000 X. Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxx Xxx, XX 00000 | ||
| Attention: Chief Executive Officer | ||
To the Partnership:
|
Xxxxx & Xxxxx Healthcare REIT II Holdings, LP | |
| 0000 X. Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxx Xxx, XX 00000 | ||
| Attention: Chief Executive Officer of | ||
| Xxxxx & Xxxxx Healthcare REIT II, Inc., | ||
| its General Partner | ||
To the Advisor:
|
Xxxxx & Xxxxx Healthcare REIT II Advisor, LLC | |
| 0000 X. Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxx Xxx, XX 00000 | ||
| Attention: Chief Executive Officer |
Either party may at any time give notice in writing to the other party of a change in its
address for the purposes of this Section 23.
24. Amendments. This Agreement shall not be changed, modified, terminated, or
discharged, in whole or in part, except by an instrument in writing signed by each of the parties
hereto, or their respective successors or assignees.
25. Severability. The provisions of this Agreement are independent of and severable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.
26. Construction. The provisions of this Agreement shall be construed and interpreted
in accordance with the laws of the State of Maryland.
27. Entire Agreement. This Agreement contains the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other than by an agreement
in writing.
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28. Indulgences, Not Waiver. Neither the failure nor any delay on the part of a party
to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
29. Gender. Words used herein regardless of the number and gender specifically used,
shall be deemed and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.
30. Titles Not to Affect Interpretation. The titles of sections and subsections
contained in this Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.
31. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when the counterparts hereof, taken together, bear the signatures of
all of the parties reflected hereon as the signatories.
32. Rights of the Advisor and its Affiliates. Xxxxx & Xxxxx Healthcare REIT II
Advisor, LLC or an Affiliate thereof has a proprietary interest in the name “Xxxxx & Xxxxx.”
Accordingly, and in recognition of this right, if at any time Xxxxx & Xxxxx Healthcare REIT II
Advisor, LLC or an Affiliate thereof ceases to perform the services of the Advisor under this
Agreement, the Company or the Partnership, as the case may be, will, promptly after receipt of
written request from Xxxxx & Xxxxx Healthcare REIT II Advisor, LLC, cease to conduct business under
or use the name “Xxxxx & Xxxxx” or any variation or derivative thereof and the Company and the
Partnership shall, within five (5) business days of such cessation, each change its name (and the
names of any of their Affiliates) to a name that does not contain the name “Xxxxx & Xxxxx” or any
other word or words that might, in the sole discretion of the Advisor, be susceptible of indication
of some form of relationship between the Company and the Advisor or any Affiliate thereof.
Consistent with the foregoing, the parties acknowledge and agree that the Advisor or one or more of
its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist
other investment vehicles (including vehicles for investment in real estate) and financial and
service organizations having “Xxxxx & Xxxxx” as a part of their name, all without the need for any
consent (and without the right to object thereto) by the Company or its Board. The Advisor retains
ownership of and reserves all Intellectual Property Rights in the Proprietary Property. To the
extent that the Company has or obtains any claim to any right, title or interest in the Proprietary
Property, including without limitation in any suggestions, enhancements or contributions that
Company may provide regarding the Proprietary Property, the Company hereby assigns and transfers
exclusively to the Advisor all right, title and interest, including without limitation all
Intellectual Property Rights, free and clear of any liens, encumbrances or licenses in favor of the
Company or any other party, in and to the Proprietary Property. In addition, at the Advisor’s
expense, the Company will perform any acts that may be deemed desirable by the Advisor to evidence
more fully the transfer of ownership of right, title and interest in the Proprietary Property to
the Advisor, including but not limited to the execution of any instruments or documents now or
hereafter requested by the Advisor to perfect, defend or confirm the assignment described herein,
in a form determined by the Advisor.
19
[Signatures Appear on Next Page]
20
IN WITNESS WHEREOF, the parties hereto have executed this Advisory Agreement as of the day and
year first above written.
| XXXXX & XXXXX HEALTHCARE REIT II, INC. | ||||
| By: | ||||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
| XXXXX & XXXXX HEALTHCARE REIT II HOLDINGS, LP |
||||
| By: | Xxxxx & Xxxxx Healthcare REIT II, Inc., its General Partner |
|||
| By: | ||||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
| XXXXX & XXXXX HEALTHCARE REIT II ADVISOR, LLC | ||||
| By: | ||||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
21
