[picaloanagreement1016001.jpg]
1 TERM LOAN AGREEMENT This Term Loan Agreement (“Agreement”) is entered into as
December 11, 2017, by and between PROASSURANCE INDEMNITY COMPANY, INC., an
Alabama stock insurance company (“Borrower”), whose address is c/o ProAssurance
Corporation, 100 Brookwood Place, Birmingham, AL 35209, Attention: General
Counsel, and FIRST TENNESSEE BANK NATIONAL ASSOCIATION (“Lender”), whose
address, for purposes of this Agreement, is 211 Franklin Rd, Suite 300,
Brentwood, TN 37027. PRELIMINARY STATEMENTS Lender has agreed to loan to
Borrower amounts not to exceed $17,850,000 (the “Loan”) in connection with the
recapitalization of an office building with 163,613 square feet of rentable
space in Birmingham, Alabama. In connection with the funding and administration
of the Loan, the parties hereto agree as follows: ARTICLE 1. DEFINITIONS The
following terms as used in this Agreement or in the other Loan Documents shall
have the following meanings: 1.1. Business Day. Any day that is not a Saturday,
Sunday or banking holiday in the State. 1.2. Consolidated Debt to Capitalization
Ratio. On a consolidated basis for the Borrower and any of its Subsidiaries, the
ratio of (a) Consolidated Funded Debt to (b) the sum of Consolidated Net Worth
and Consolidated Funded Debt. 1.3. Consolidated Funded Debt. As for the
applicable Person, the sum of the following, without duplication, (a) all
indebtedness of such Person for borrowed money, specifically including the
Obligations, (b) all obligations of such Person for the deferred purchase price
of property or services (other than trade payables incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person, whether
evidenced by notes, bonds, debentures, standby and/or commercial letters of
credit, or other similar instruments, and (d) all contingent obligations of such
Person, which shall include, without limitation, any agreement, undertaking or
arrangement whereby such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liability upon, the obligation or liability of any other Person,
or agrees to maintain a net worth or working capital or other financial
condition of any other Person, or otherwise assures any creditor of such other
Person against loss, but excluding any reserve for losses and loss adjustment
expenses.

--------------------------------------------------------------------------------

 
[picaloanagreement1016002.jpg]
2 1.4. Consolidated Net Worth. The surplus as regards policyholders as reflected
in the most recent annual or quarterly statement filed by Borrower with the
insurance regulatory authorities. 1.5. Costs. All fees, charges, costs and
expenses of any nature whatsoever incurred at any time and from time to time
(whether before or after a Default) by Lender in making, funding, administering
or modifying the Loan, in negotiating or entering into any “workout” of the
Loan, or in exercising or enforcing any rights, powers and remedies provided in
the Security Documents or any of the other Loan Documents, including reasonable
attorneys’ fees, court costs, receiver’s fees, management fees and costs
incurred in the repair, maintenance and operation of, or taking possession of,
or selling, the Project. 1.6. Default. The occurrence of any of the events
described in Article 9 of this Agreement, including expiration of any applicable
notice and cure period set forth therein. 1.7. Default Rate. A rate equal to the
lesser of (a) the interest rate payable under the Note at the time a Default
occurs, plus two percent (2%) per annum, and (b) the highest rate of interest
allowed by Law. 1.8. Environmental Claim. Shall have the meaning set forth in
the Indemnity Agreement. 1.9. Environmental Due Diligence. Environmental due
diligence for the Project acceptable to Lender, which may include, at Lender’s
discretion, a phase I environmental site assessment. 1.10. Environmental Law.
Shall have the meaning set forth in the Indemnity Agreement. 1.11. Equity. All
amounts that would, in conformity with GAAP, be included on the balance sheet
under stockholders’ equity. 1.12. ERISA. The Employee Retirement Income Security
Act of 1974, as amended from time to time, including (unless the context
otherwise requires) any rules or regulations promulgated thereunder. 1.13. GAAP.
Generally accepted accounting principles in the United States of America as in
effect from time to time. 1.14. Governmental Authority. Any governmental or
quasi-governmental entity, including any court, department, commission, board,
bureau, agency, administration, service, district or other instrumentality of
any governmental entity. 1.15. Improvements. The existing improvements on the
Land consisting of a 163,613 square foot office building, together with any
future improvements made to the Project. 1.16. Indemnity Agreement. The
Environmental Indemnity Agreement of even date herewith, signed by Borrower in
favor of Lender.

--------------------------------------------------------------------------------

 
[picaloanagreement1016003.jpg]
3 1.17. Interest Rate Swap. Any agreement, whether or not in writing, relating
to any rate swap, forward rate transaction, commodity swap, equity index swap or
option, interest rate option, cap or collar transaction, or any other similar
transaction, including, unless the context otherwise clearly requires, any form
of master agreement published by the International Swaps and Derivatives
Association, Inc., or any other master agreement, entered into by Borrower (or
its affiliate), in connection with the Loan, together with any related schedule
and confirmation, as amended, supplemented, superseded or replaced from time to
time. 1.18. Land. The real property described in Exhibit A attached hereto.
1.19. Laws. All federal, state and local laws, statutes, rules, ordinances,
regulations, codes, licenses, authorizations, decisions, injunctions,
interpretations, orders or decrees of any court or other Governmental Authority
having jurisdiction over the Project, as may be in effect from time to time.
1.20. Leases. All leases and other similar agreements, whether now existing or
hereafter entered into, for space at the Premises, including all lease
guaranties related thereto, as the same may be amended or modified from time to
time. 1.21. Lien. Any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing). Notwithstanding the generality of the foregoing, the
definition of “Lien” shall not include statutory deposits made with insurance
regulators in the states in which PICA is authorized to do business. 1.22. Loan.
The real estate loan in the amount of up to $17,850,000, as evidenced by the
Note, provided the amount advanced shall not exceed 85% of the appraised value
of the Property, as determined by Lender based upon an appraisal provided by
Borrower. The terms of the Loan are provided for herein and in the Note and the
other Loan Documents. 1.23. Loan Documents. The Note, the Security Documents,
the Indemnity Agreement, any Interest Rate Swap entered into in connection with
the Loan, this Agreement and any other documents or instruments evidencing or
securing the Loan. 1.24. Loan Proceeds. Funds disbursed or to be disbursed under
the Note pursuant to this Agreement. 1.25. Mortgage. The Future Advance Mortgage
of even date herewith, from Borrower to Lender encumbering the Premises and
securing repayment of the Obligations. 1.26. Note. The Promissory Note of even
date herewith, from Borrower to Lender in the principal amount of $17,850,000.
1.27. Obligations. All present and future debts, obligations and liabilities of
Borrower to Lender arising pursuant to, or on account of, the provisions of this
Agreement, the Note or any

--------------------------------------------------------------------------------

 
[picaloanagreement1016004.jpg]
4 of the other Loan Documents, including the obligations: (a) to pay all
principal, interest, late charges, prepayment premiums (if any) and other
amounts due at any time under the Note; (b) to pay all expenses, indemnification
payments, fees and other amounts due at any time under the Security Documents or
any of the other Loan Documents, together with interest as provided in the Loan
Documents; (c) to pay and perform all obligations of Borrower (or its affiliate)
under any Interest Rate Swap; and (d) to perform, observe and comply with all of
the terms, covenants and conditions, expressed or implied, which Borrower is
required to perform, observe or comply with pursuant to the terms of the Loan
Documents. 1.28. Person. An individual, a corporation, a partnership, a joint
venture, a limited liability company, a trust, an unincorporated association,
any Governmental Authority or any other entity. 1.29. Premises or Property. The
Land, and all of the estate, right, title and interest of Borrower at law or in
equity in and to the Land, and all of the buildings, structures and improvements
of every nature whatsoever now or hereafter situated on the Land and all
fixtures, machinery, appliances, equipment, furniture and personal property of
every kind whatsoever now or hereafter owned by Borrower and located in or on,
or attached to, and used or intended to be used in connection with the Land.
1.30. Project. The operation of the Improvements on the Land, as contemplated by
this Agreement. 1.31. Security Documents. The Mortgage, any UCC financing
statements registered in connection with the Loan, and any and all other Loan
Documents which secure the Obligations. 1.32. State. The State of Tennessee.
1.33. Subsidiary. Any corporation, partnership, or other entity of which more
than fifty percent (50%) of the issued and outstanding voting securities is
owned or controlled, directly or indirectly, by Borrower. 1.34. Title Insurance
Agent. Fidelity National Title Group Contact Information: Fidelity National
Title Group 6840 Carothers Parkway, Suite 200 Franklin, TN 37067 Attn: Beth
Thomas Telephone: (615) 224-7512 Fax: (615) 807-3874 Email:
Elizabeth.Thomas@fnf.com 1.35. Title Insurance Commitment. An American Land
Title Association (“ALTA”) mortgagee’s title insurance commitment to be issued
by the Title Insurance Company in such form as is acceptable to Lender. 1.36.
Title Insurance Company. Fidelity National Title Insurance Agency.

--------------------------------------------------------------------------------

 
[picaloanagreement1016005.jpg]
5 1.37. Title Insurance Policy. An ALTA mortgagee’s title insurance policy to be
issued by the Title Insurance Company in the amount of the Note showing fee
simple title to the Premises to be vested in Borrower and insuring the Mortgage
as a first Lien on the Premises, subject only to exceptions permitted by Lender,
and otherwise in form and substance acceptable to Lender. ARTICLE 2. WARRANTIES
AND REPRESENTATIONS In consideration for Lender committing to fund the Loan,
Borrower hereby represents and warrants to Lender, as follows: 2.1. Purpose of
Loan. The Loan shall be used to recapitalize the Property and for no other
purpose. The Loan is for commercial purposes. 2.2. Pending Suits. To Borrower’s
knowledge, there are no suits, judgments, bankruptcies or executions pending or
threatened against Borrower or the Premises, other than claims made against
Borrower under its insurance policies. 2.3. Financial Statements. The Financial
Statements delivered by Borrower to Lender are true and correct in all material
respects, fairly present the respective financial condition of Borrower as of
the date or dates thereof, no material adverse change has occurred in the
financial condition reflected therein since the date or dates thereof, and no
additional borrowings have been made by Borrower other than the borrowing
contemplated hereby. 2.4. No Mechanic’s or Materialmen’s Liens. Borrower has, as
of the date hereof, permitted no work at the Premises or the delivery of any
materials to the Premises which could give rise to a Lien on the Premises or the
Improvements. 2.5. No Violation of Other Agreements. The consummation of the
transactions contemplated by this Agreement and the performance of this
Agreement and the other Loan Documents will not result in any breach of, or
constitute a Default under, the Borrower’s organizational documents or any other
instrument or agreement to which Borrower is a party or by which it may be bound
or affected. 2.6. Zoning/Land Use. The Land is zoned to permit the ownership and
operation of the Improvements for the intended purpose, and Borrower has all
zoning approvals necessary for the ownership and operation of the Project. 2.7.
Access. The Land has access to publicly dedicated rights of way, as necessary,
for the construction and intended use and operation of the Project. 2.8. Leases.
Borrower has provided Lender with a current rent roll and a copy of all existing
Leases. All existing Leases are in full force and effect and, to Borrower’s
knowledge, no default exists under the Leases as at the date hereof. 2.9.
Subsidiaries. Borrower has no Subsidiaries.

--------------------------------------------------------------------------------

 
[picaloanagreement1016006.jpg]
6 ARTICLE 3. THE LOAN 3.1. Use and Purposes. Borrower agrees to borrow from
Lender and Lender agrees to lend to Borrower the Loan Proceeds, such Loan
Proceeds to be used for the purposes and subject to all of the terms, provisions
and conditions of this Agreement. 3.2. Advances Secured by Security Documents.
All disbursements, advances or payments made by Lender hereunder, from time to
time, and any amounts expended by Lender under this Agreement or the other Loan
Documents, and all other loan expenses, including reasonable attorneys fees, as
and when advanced or incurred, will be deemed to be a part of the Obligations
and as such will be secured by the Security Documents to the same extent and
effect as if the terms and provisions of this Agreement were set forth therein.
ARTICLE 4. CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS Unless otherwise agreed
by Lender in writing, Lender will not be obligated to close the Loan and
disburse any Loan Proceeds unless and until the following conditions have been
satisfied (all in a manner acceptable to Lender): 4.1. Loan Documents. Borrower
shall have furnished or delivered to Lender, in form and substance acceptable to
Lender, the Loan Documents executed by Borrower. 4.2. Closing Costs. Borrower
shall have paid all reasonable Costs incurred by Lender in connection with the
Loan, including the reasonable fees of counsel for the Lender. 4.3. Financial
Statements. Borrower shall have delivered to Lender current financial statements
for Borrower certified to be true, correct and complete. Said financial
statements must be current within the last twelve (12) months. 4.4. Title
Policy. Borrower shall have procured a commitment for the issuance of the Title
Insurance Policy, in a form acceptable to Lender. 4.5. Survey. Borrower shall
have provided Lender with a current ALTA as-built survey of the Land, prepared
by a licensed surveyor satisfactory to the Lender, which survey shall be
certified to Lender and the Title Insurance Company, and shall be in form and
substance acceptable to Lender. 4.6. Insurance. Borrower shall have furnished to
Lender evidence, either in the form of duplicate policies, binders or
certificates, acceptable to Lender (identifying each insurance policy, name of
insurer, amount of coverage, deductible provisions and expiration date) that
Borrower has purchased, and has in full force and effect, policies of insurance,
as required by Lender and the Security Documents.

--------------------------------------------------------------------------------

 
[picaloanagreement1016007.jpg]
7 4.7. Evidence of Compliance. Borrower shall have furnished to Lender evidence
satisfactory to Lender that the Improvements are in compliance with all Laws and
all rules and regulations promulgated thereunder, and any restrictions of record
affecting the Premises, including those dealing with condominiums, horizontal
property regimes, building, zoning, environmental impact, setbacks, Americans
With Disabilities Act, wetlands, and safety and pollution control. 4.8.
Appraisal. Lender shall have obtained a narrative appraisal of the Premises and
Improvements, on a completed basis, which is satisfactory to Lender in amount,
form and substance. Borrower shall pay for the cost of the appraisal. 4.9.
Organizational Documents. Lender shall be provided with a copy of Borrower’s
organizational documents and evidence of authority to sign this Agreement and
the other Loan Documents. 4.10. Environmental Due Diligence. Lender shall be
provided with such Environmental Due Diligence for the Property as Lender may
require, to be in form and content acceptable to Lender. All reports shall be
addressed to Lender. Borrower shall pay for the cost of the Environmental Due
Diligence. 4.11. Opinion of Counsel. Borrower shall provide Lender with an
opinion from counsel to Borrower, in such form and content as reasonably
required by Lender. 4.12. Leases. Lender shall have received all Leases and
amendments relating thereto, and, with respect to any single Lease or tenant,
having greater than 5,000 square feet of leased space, (i) an tenant estoppel
certificate, and (ii) subordination, estoppel and attornment agreement, each in
a form acceptable to Lender. 4.13. Commitment Fee. Payment of the commitment fee
to Lender in the amount of $17,850. 4.14. Lender’s Site Visit. Lender shall have
access to the Property to complete its site visit and inspection of the
Property. ARTICLE 5. COLLATERAL FOR THE LOAN The Obligations shall be secured by
a first priority Lien on the Premises and all materials and other personal
property related to the operation of the Project, as evidenced by the Security
Documents.

--------------------------------------------------------------------------------

 
[picaloanagreement1016008.jpg]
8 ARTICLE 6. LOAN The loan shall be fully funded upon the Closing of the Loan.
ARTICLE 7. COVENANTS AND AGREEMENTS Borrower covenants and agrees with Lender as
follows: 7.1. Costs. Borrower will pay all reasonable Costs required to satisfy
the conditions of this Agreement, including, but not limited to, all taxes and
recording expenses, Lender’s attorneys fees, surveys, appraisals, title
insurance, title updates, real estate taxes, and insurance policies. 7.2.
Inspections. Borrower will permit Lender and its representatives to enter upon
the Premises at all reasonable times to inspect the Improvements and to examine
all records which relate to the ownership and operation of the Improvements and
will cooperate, and cause Borrower’s manager, if applicable, to cooperate with
Lender in such inspections. 7.3. Brokers. Borrower will indemnify and hold
harmless Lender from and against all claims of brokers and agents arising by
reason of the execution of this Agreement or the consummation of the
transactions contemplated hereby. 7.4. (Intentionally Omitted) 7.5. Compliance
with Laws. The Improvements shall be owned and operated in accordance with all
applicable Laws, including, without limitation, all zoning, land use, code,
setback and other applicable regulations and restrictions. 7.6. Books and
Records; Financial Statements; Tax Returns. Borrower will keep and maintain full
and accurate books and records administered in accordance with sound accounting
principles, consistently applied, showing in detail the earnings and expenses of
the Property and Borrower shall permit Lender and Lender’s representatives, to
examine such books and records (regardless of where maintained) and all
supporting data and to make copies therefrom at all reasonable times and as
often as may be requested by Lender. In addition, Borrower will furnish or cause
to be furnished to Lender: (a) As soon as available and in any event within one
hundred twenty (120) days of each year end, annual financial statements, audited
by an independent certified public accounting firm reasonably acceptable to
Lender, together with operating statements for the Project, to include an
updated rent roll, all prepared in accordance with statutory accounting
principles and certified by the Chief Financial Officer of ProAssurance
Corporation (Borrower’s indirect parent company) as being true and accurate in
all material respects;

--------------------------------------------------------------------------------

 
[picaloanagreement1016009.jpg]
9 (b) As soon as available and in any event within forty five (45) days of each
quarter end, quarterly company-prepared financial statements, together with
operating statements for the Project, to include an updated rent roll, all
prepared in accordance with statutory accounting principles and certified by the
Chief Financial Officer of ProAssurance Corporation (Borrower’s indirect parent
company) as being true and accurate in all material respects; (c) In connection
with the delivery of annual and quarterly financial statements in Section 7.6(a)
and Section 7.6(b), above, a certificate of the Borrower, signed by an officer
of Borrower, certifying compliance with the financial covenant set forth in
Section 8.5 and setting forth the calculations related thereto; and (d) In
connection with each June 30th and December 31st quarter end financial statement
in Section 7.6(b), above, a rent roll for the Property, certified by the Chief
Financial Officer of ProAssurance Corporation (Borrower’s indirect parent
company) as being true and accurate in all material respects. (e) Other
financial statements and information as Lender may reasonably request from time
to time. All financial statements shall be in form satisfactory to Lender. 7.7.
Estoppel Certificates. Within ten (10) days after any request by Lender,
Borrower shall certify in writing to Lender, the then unpaid balance of the Loan
and whether Borrower claims any right of defense or setoff to the payment or
performance of any of the Obligations, and if Borrower claims any such right of
defense or setoff, Borrower shall give a detailed written description of such
claimed right. 7.8. Notification by Borrower. Borrower will promptly give
written notice to Lender of (i) the occurrence of any Default, and (ii) any
claim by Borrower of a default by any other party under any Lease; or (iii) a
change in (A) Borrower’s legal name, (B) Borrower’s entity type, (C) in
Borrower’s Federal Taxpayer Identification Number, or (D) in Borrower’s
jurisdiction of incorporation, formation or organization, as applicable. 7.9.
Indemnification by Borrower. Borrower agrees to indemnify Lender and to hold
Lender harmless from and against, and to defend Lender by counsel approved by
Lender against, any and all claims directly or indirectly arising out of or
resulting from any transaction, act, omission, event or circumstance in any way
connected with the Property or the Obligations (a “Claim”), including any Claim
arising out of or resulting from (a) construction of the Improvements, including
any defective workmanship or materials; (b) any failure by Borrower to comply
with the requirements of any Laws or to comply with any agreement that applies
to the Property; (c) any failure by Borrower to observe and perform any of the
obligations imposed upon the landlord under the Leases; (d) any other Default
hereunder or under any of the other Loan Documents; or (e) any assertion or
allegation that Lender is liable for any act or omission of Borrower or any
other Person in connection with the ownership, development, financing, leasing,
operation or sale of the Property; provided, however, that Borrower shall not be
obligated to indemnify Lender with respect to any Claim arising solely from the
gross negligence or willful misconduct of Lender. The agreements and
indemnifications contained in this Section shall apply to Claims arising both
before and after the repayment of the Loan and shall survive the repayment of
the Loan, any foreclosure or deed, assignment or conveyance in lieu thereof

--------------------------------------------------------------------------------

 
[picaloanagreement1016010.jpg]
10 and any other action by Lender to enforce the rights and remedies of Lender
hereunder or under the other Loan Documents. 7.10. Appraisals. Lender may obtain
from time to time an appraisal of all or any part of the Property, prepared in
accordance with written instructions from Lender, from a third-party appraiser
satisfactory to, and engaged directly by, Lender. The cost of one such appraisal
obtained by Lender in each calendar year and the cost of each such appraisal
obtained by Lender following the occurrence of a Default shall be paid by
Borrower on demand. 7.11. ERISA Information and Compliance. Except to the extent
that a failure to do so will not have a Material Adverse Effect, comply with
ERISA and all other applicable laws governing any pension or profit sharing plan
or arrangement to which Borrower is a party or is otherwise subject. Borrower
shall provide Lender with notice of any “reportable event” or “prohibited
transaction” or the imposition of a “withdrawal liability” within the meaning of
ERISA. 7.12. Leasing Matters. (a) Borrower represents and warrants that Borrower
has delivered to Lender a true and correct copy of all Leases, including all
amendments and exhibits, and any guaranty(ies) thereof, affecting any part of
the Improvements, together with an accurate and complete rent roll for the
Property (b) Borrower shall not terminate or materially amend or modify any
existing Material Lease, permit any tenant under any Material Lease to terminate
or materially amend or modify any sublease or enter into any Material Lease of
space in the Improvements unless approved by Lender. As used in this section, a
“Material Lease” shall mean any Lease having greater than 5,000 square feet of
leased space. (c) Delivery of Leasing Information and Documents. From time to
time upon Lender’s request, Borrower shall promptly deliver to Lender (i)
complete executed originals of each Lease and (ii) a complete rent roll of the
Property in such detail as Lender may require, together with such operating
statements and leasing schedules and reports as Lender may require. ARTICLE 8.
NEGATIVE COVENANTS Borrower hereby covenants and agrees with Lender that the
Borrower will not: 8.1. Acquisitions; Mergers; Disposition of Assets. Make,
receive, or obtain any acquisitions or merge or consolidate with or into any
business or entity, or sell, assign, lease, or otherwise dispose of any of its
assets (except for obsolete, damaged or unusable assets), other than in the
ordinary course of Borrower's present business upon terms standard in Borrower's
industry or unless the Loan would be paid in full in connection therewith.
Notwithstanding the foregoing, Borrower may merge or consolidate with Podiatry
Insurance Company of America, PACO Assurance Company, Inc., and/or Medmarc
Casualty Insurance Company, where Borrower is the surviving entity.

--------------------------------------------------------------------------------

 
[picaloanagreement1016011.jpg]
11 8.2. Discontinuance of Business; Dissolution; Etc. Materially change or
discontinue the nature of its business as of the date of this Agreement, or
commence to dissolve, wind-up or liquidate itself. 8.3. Liens. Create, incur,
assume or suffer to exist any Lien on the Property or any of its properties that
have not been discharged, bonded over or otherwise released of record within
thirty (30) days after recordation thereof, other than Liens in favor of Lender
or Liens securing advances from a Federal Home Loan Bank. 8.4. Creation of
Subsidiaries, Etc. Create, purchase, or otherwise acquire any Subsidiary, unless
such Subsidiary guaranties the Loan in a manner satisfactory to Lender. PICA
Management Resources, Inc., which is anticipated to merge into an affiliate of
Borrower, is not be required to guaranty the Loan or otherwise enter into any
Loan Document. 8.5. Consolidated Debt to Capitalization Ratio. Permit the
Consolidated Debt to Capitalization Ratio to exceed 35.0%. 8.6. Minimum Rating.
Permit the Borrower’s A.M. Best Long-Term Issuer Credit Rating to be less than
“bbb”; provided that Borrower shall have the right to cure a Default arising
from a violation of this minimum rating covenant by, within thirty (30) of such
covenant violation, depositing and maintaining an amount equal to thirty five
percent (35%) of the then outstanding principal amount of the Loan into a
blocked, interest bearing deposit account with Lender (the “Cash Collateral
Account”). The Borrower hereby grants to Lender a security interest in the Cash
Collateral Account and all balances therein, all as security for the
Obligations. The funds in the Cash Collateral Account will be released (i) to
the extent the balance of the Cash Collateral Account exceeds five percent (35%)
of the outstanding principal amount of the Loan, and (ii) upon Borrower’s
compliance with the minimum rating covenant set forth in this Section 8.6.
ARTICLE 9. DEFAULT 9.1. Default by Borrower. The occurrence of any one or more
of the following shall constitute a “Default” as such term is used herein: (a) A
failure to pay amounts due under the Note or the other Loan Documents, within
five (5) days of the date when due; (b) Any representation, warranty or
statement made by Borrower in this Agreement, the other Loan Documents or any
other instrument now or hereafter evidencing, securing or in any manner relating
to the Loan proves untrue in any material respect; (c) Failure of Borrower to
comply in all material respects with any of the terms and conditions of this
Agreement, or the other Loan Documents, which failure is not cured within thirty
(30) days after the occurrence thereof; (d) A Lien for the performance of work
or the supply of materials filed against the Property, remains unsatisfied or
unbonded for a period of thirty (30) days after the date of filing or service;

--------------------------------------------------------------------------------

 
[picaloanagreement1016012.jpg]
12 (e) Borrower fails to pay any indebtedness (other than the Loan) owed by
Borrower to Lender when and as due and payable (whether by acceleration or
otherwise); (f) Without the prior written consent of Lender the Borrower ceases
to be wholly owned, directly or indirectly, by ProAssurance Corporation; (g) In
the reasonable opinion of Lender, the prospect of payment or performance of all
or any part of the Obligations has been impaired because of a material adverse
change in the financial condition, results of operations, business or properties
of Borrower or any other Person liable for the payment or performance of any of
the Obligations; (h) If Borrower files a voluntary petition in bankruptcy or is
adjudicated a bankrupt or insolvent, or files any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal bankruptcy act or any
other present or future applicable federal, state or other statute or Law, makes
an assignment for the benefit of creditors, or seeks or consents to or
acquiesces in the appointment of any trustee, receiver or liquidator for
Borrower for all or any substantial part of its properties or of the Premises;
(i) If within sixty (60) days after the commencement of any proceeding against
Borrower seeking any reorganization, arrangement, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
act or any other present or future applicable federal, state or other statute or
Law, such proceeding is not dismissed, or if, within sixty (60) days after the
appointment, without the consent or acquiescence of Borrower of any trustee,
receiver or liquidator for Borrower or any Guarantor for all or any substantial
part of their properties or of the Premises; (j) If a third party obtains a
judgment against Borrower or the Project, which (a) materially and adversely
impacts the obligations of the Borrower under the Loan, and (b) is not vacated
and released within sixty (60) days at the date of such judgment. The occurrence
of a Default under any other Loan Document shall be deemed a Default under all
other Loan Documents. 9.2. Lender’s Remedies in the Default. Upon the occurrence
of any Default, Lender, in addition to all remedies conferred upon Lender by Law
or equity, and by the terms of the Loan Documents, may, in its sole discretion,
pursue any one or more of the following remedies concurrently or successively,
it being the intent hereof that none of such remedies shall be to the exclusion
of any other: (a) Take possession of the Premises and operate the Improvements
and do anything in its sole judgment to fulfill the obligations of Borrower
hereunder, any expense incurred by Lender being deemed to be part of the
Obligations, including either the right to avail itself of or procure
performance of existing contracts or Leases, under the assignment to Lender or
otherwise, or let any contracts with the same vendors or others. Without
restricting the generality of the foregoing and for purposes aforesaid, Borrower
hereby appoints and constitutes Lender its lawful attorney-in-fact with full
power of substitution in the Project to operate the

--------------------------------------------------------------------------------

 
[picaloanagreement1016013.jpg]
13 Improvements in the name of Borrower; to use funds remaining under this
Agreement or which may be reserved, or escrowed or set aside for any purpose
hereunder at any time to operate the Improvements; it being understood and
agreed that this power of attorney shall be a power coupled with an interest and
cannot be revoked; (b) Lender may apply to any court of competent jurisdiction
for, and obtain appointment of, a receiver for the Property; (c) Lender may set
off the amounts due Lender under the Loan Documents against any and all
accounts, credits, money, securities or other property of Borrower now or
hereafter on deposit with, held by or in the possession of Lender to the credit
or for the account of Borrower, without notice to or the consent of Borrower;
(d) Borrower shall not be relieved of any of the Obligations by reason of the
failure of Lender to comply with any request of Borrower or of any other Person
to take action to foreclose on the Property under the Security Documents or
otherwise to enforce any provision of the Loan Documents, or by reason of the
release, regardless of consideration, of all or any part of the Property. No
delay or omission of Lender to exercise any right, power or remedy accruing upon
the happening of a Default shall impair any such right, power or remedy or shall
be construed to be a waiver of any such Default or any acquiescence therein. No
remedy available to Lender under the Loan Documents or otherwise, is intended to
be exclusive of any other remedies provided for in the Loan Documents, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder, or under the Loan Documents, or now or hereafter
existing at Law or in equity. Every right, power and remedy given by the Loan
Documents to Lender shall be concurrent and may be pursued separately,
successively or together against Borrower or the Property or any part thereof,
and every right, power and remedy given by the Loan Documents may be exercised
from time to time as often as may be deemed expedient by Lender; (e) Withhold
further disbursement of the Loan Proceeds, if applicable; (f) Declare the entire
balance of the Obligations, without demand or notice of any kind (which are
hereby expressly waived) to be due and payable at once and, in such event, such
Obligations shall become immediately due and payable; (g) Pursue such other
remedies as may be available to Lender at Law or equity. ARTICLE 10. GENERAL
COVENANTS 10.1. No Assignments by Borrower. This Agreement may not be assigned
by Borrower without the prior written consent of Lender. Borrower will remain
liable for payment of all sums advanced hereunder before and after such
assignment. 10.2. Assignment by Lender. This Agreement, the Loan Documents and
any other instrument now or hereafter evidencing, securing or in any manner
affecting the Loan may be

--------------------------------------------------------------------------------

 
[picaloanagreement1016014.jpg]
14 endorsed, assigned and transferred in whole or in part by Lender, and any
such holder and assignee of the same will succeed to and be possessed of the
rights of Lender under all of the same to the extent transferred and assigned.
10.3. Interest Not to Exceed Maximum Allowed by Law. If from any circumstances
whatsoever, by reason of acceleration or otherwise, the fulfillment of any
provision of this Agreement or any other Loan Document involves transcending the
limit of validity prescribed by any applicable usury statute or any other
applicable Law, with regard to obligations of like character and amount, then
the obligations to be fulfilled will be reduced to the limit of such validity as
provided in such statute or Law, so that in no event shall any payment of
interest or other like charges be possible under this Agreement or the other
Loan Documents in excess of the limit of such validity. 10.4. Time of the
Essence. Time is of the essence of this Agreement. 10.5. No Agency. Lender is
not the agent or representative of Borrower, and Borrower is not the agent or
representative of Lender, and nothing in this Agreement will be construed to
make Lender liable to anyone for goods delivered or services performed upon the
Premises or for debts or claims accruing against Borrower. 10.6. No Partnership
or Joint Venture. Neither anything contained herein nor the acts of the parties
hereto will be construed to create a partnership or joint venture between
Borrower and Lender. 10.7. No Third Party Beneficiaries. All conditions to the
obligations of Lender to make advances hereunder are imposed solely and
exclusively for the benefit of Lender and its assigns and no other Person will
have standing to require satisfaction of such conditions or be entitled to
assume that Lender will not make disbursements in the absence of strict
compliance with any or all thereof and no other Person, under any circumstances,
will be deemed to be beneficiary of such conditions, any or all of which may be
waived in whole or in part by Lender at any time if Lender in its sole
discretion deems it advisable to do so. 10.8. Waiver. No delay or omission by
Lender to exercise any right or power arising from any Default will impair any
such right or power or be considered to be a waiver of any such Default or any
acquiescence therein nor shall the action or nonaction of Lender in case of
Default on the part of Borrower impair any right or power arising therefrom. No
disbursement of the Loan hereunder shall constitute a waiver of any of the
conditions to Lender’s obligation to make further disbursements nor, in the
event Borrower is unable to satisfy any such condition, shall any such
disbursement have the effect of precluding Lender from thereafter declaring such
inability to be a Default as hereinabove provided. 10.9. Notices. All notices,
requests, demands and other communications required or permitted to be given
hereunder will be sufficiently given if in writing and delivered in person or
sent by United States certified mail, return receipt requested, postage prepaid,
to the party being given such notice at the appropriate address set forth in the
first paragraph of this Agreement, or to such other address as either party may
give to the other in writing for such purpose. All such

--------------------------------------------------------------------------------

 
[picaloanagreement1016015.jpg]
15 notices, requests, demands and other communications, if so mailed, will be
deemed to be given when so mailed. 10.10. Partial Invalidity. In the event any
one or more of the provisions contained in this Agreement shall be for any
reason be held to be invalid, illegal or unenforceable in any respect, such
validity, illegality or unenforceability shall not affect any other provision of
this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been set forth herein. 10.11.
Entire Agreement. This Agreement, the Loan Documents and the other contracts,
agreements and instruments described herein contain all of the terms and
conditions related to the disbursement of the Loan by Lender and the use of the
Loan by Borrower. This Agreement may not be modified or amended except in
writing signed by Borrower and Lender. 10.12. Publicity. Borrower hereby gives
Lender permission to release articles concerning financing of the Premises. At
the request of Lender, Borrower shall erect a sign or add Lender’s name to the
construction sign on the Project site identifying Lender’s financing of the
Project. 10.13. WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY JOINTLY AND
SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS INSTRUMENT AND TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS
HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. BORROWER AND LENDER EACH
REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
GIVEN. 10.14. Further Assurances. Borrower agrees that at any time, and from
time to time, after execution and delivery of this Agreement, it shall, upon the
request of Lender, execute and deliver such further documents and do such
further things as Lender may reasonably request in order to more fully
effectuate the purposes of this Agreement. 10.15. Governing Law. This Agreement
shall be governed by and construed in accordance with the Laws of the State of
Tennessee. 10.16. Severability. In the case one or more of the provisions of
this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity of the remaining provisions shall be in no way affected, prejudiced or
disturbed thereby. 10.17. Assignments and Participations. Lender may sell or
offer to sell the Loan or interests therein to one or more assignees or
participants. Borrower shall execute, acknowledge and deliver any and all
instruments reasonably requested by Lender in connection therewith, and to the
extent, if any, specified in any such assignment or participation, such
assignee(s) or participant(s) shall have the same rights and benefits with
respect to the Loan Documents as such Person(s) would have if such Person(s)
were Lender hereunder. Lender may disseminate any information it now has or
hereafter obtains pertaining to the Loan, including any security for the Loan,
any credit or other information on the Property (including environmental reports
and

--------------------------------------------------------------------------------

 
[picaloanagreement1016016.jpg]
16 assessments), Borrower, any of Borrower’s principals or any Guarantor, to any
actual or prospective assignee or participant, to Lender’s affiliates, to any
regulatory body having jurisdiction over Lender, to any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and the Loan, or to any other party as necessary or appropriate in
Lender’s reasonable judgment. 10.18. Electronic Transmission of Data. Lender and
Borrower agree that certain data related to the Loan (including confidential
information, documents, applications and reports) may be transmitted
electronically, including transmission over the Internet to the parties, the
parties affiliates, agents and representatives, and other Persons involved with
the subject matter of this Agreement. Borrower acknowledges and agrees that (a)
there are risks associated with the use of electronic transmission and that
Lender does not control the method of transmittal or service providers, (b)
Lender has no obligation or responsibility whatsoever and assumes no duty or
obligation for the security, receipt or third party interception of any such
transmission, and (c) Borrower will release, hold harmless and indemnify Lender
from any claim, damage or loss, including that arising in whole or part from
Lender’s strict liability or sole, comparative or contributory negligence, which
is related to the electronic transmission of data. 10.19. Forum. Borrower hereby
irrevocably submits generally and unconditionally for itself and in respect of
its property to the jurisdiction of any state court or any United States federal
court sitting in Davidson County, Tennessee with respect to any matter or
dispute (a “Dispute”) arising in connection with the Loan, the Project or
Premises. Borrower hereby irrevocably waives, to the fullest extent permitted by
Law, any objection that Borrower may now or hereafter have to the laying of
venue in any such court and any claim that any such court is an inconvenient
forum. Borrower hereby agrees and consents that, in addition to any methods of
service of process provided for under applicable Law, all service of process in
any such Dispute may be made by certified or registered mail, return receipt
requested, directed to Borrower at its address for notice set forth in this
Agreement, and service so made shall be complete five (5) days after the same
shall have been so mailed. Nothing herein shall affect the right of Lender to
serve process in any manner permitted by Law or limit the right of Lender to
bring proceedings against Borrower in any other court or jurisdiction. 10.20.
USA Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), Lender is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act. (Remainder of Page Intentionally Left
Blank)

--------------------------------------------------------------------------------

 
[picaloanagreement1016017.jpg]

--------------------------------------------------------------------------------

 
[picaloanagreement1016018.jpg]
EXHIBIT A - REAL ESTATE Parcel I: A parcel land located in the Northeast one
quarter of the Southwest one quarter of Section 17, Township 18 South, Range 2
West Jefferson County, Alabama and being a portion of Lot 5A Brookwood One, A
Limited Partnership Addition to Brookwood Medical Center, as recorded in Map
Book 104 Page 45 in the Office of Judge of Probate Jefferson County, Alabama,
said parcel being more particularly described as follows: Commence at a found
capped rebar marking to Northeast corner of said Lot 5A; thence run South 58
Degrees 14 Minutes 25 Seconds West along the North line of said Lot 5A for a
distance of 658.00 feet to a set 5/8 inch rebar stamped CA-560-LS, said point
marking the POINT OF BEGINNING of the parcel herein described; thence leaving
said North line run South 00 Degrees 09 Minutes 18 Seconds West for a distance
of 606.00 feet to a set nail; thence run South 89 Degrees 50 Minutes 42 Seconds
East for a distance of 130.00 feet to a set nail; thence run South 00 Degrees 09
Minutes 18 Seconds West for a distance of 243.16 feet to a found 1/2 inch rebar;
thence run South 27 Degrees 38 Minutes 22 Seconds West for a distance of 115.51
feet to a found 1/2 inch rebar, said point lying on the North right of way of
Brookwood Medical Center Drive, said point also lying on a curve turning to the
left, having radius of 1392.37 feet, a central angle of 15 Degrees 34 Minutes 12
Seconds, a chord bearing of South 69 Degrees 13 Minutes 36 Seconds West, a chord
length of 377.21 feet; thence run along the arc of said curve and along said
right of way for a distance of 378.38 feet to a set 5/8 inch capped rebar
stamped CA-560- LS; thence run South 61 Degrees 26 Minutes 30 Seconds West along
said right of way for a distance of 45.92 feet to a set 5/8 inch capped rebar
stamped CA-560-LS, said point marking the beginning of a curve turning to the
right having radius of 55.00 feet, a central angle of 90 Degrees 00 Minutes 00
Seconds, a chord bearing of North 73 Degrees 33 Minutes 30 Seconds West, a chord
length of 77.78 feet; thence run along the arc of said curve and along said
right of way for a distance of 86.39 feet to a set 5/8 inch capped rebar stamped
CA-560-LS, said point lying on the East right of way of Brookwood Boulevard;
thence run North 28 Degrees 33 Minutes 30 Seconds West along said right of way
for a distance of 350.00 feet to a found PK nail; thence leaving said right of
way run North 61 Degrees 26 Minutes 23 Seconds East for a distance of 55.02 feet
to a found 5/8 inch rebar thence run North 02 Degrees 17 Minutes 42 Seconds West
for a distance of 234.54 feet to a found 5/8 inch rebar; thence run North 31
Degrees 47 Minutes 10 Seconds West for a distance of 165.29 feet to a set 5/8
inch capped rebar stamped CA-560-LS, said point lying on the aforementioned
North line of lot 5A; thence run North 58 Degrees 14 Minutes 25 Seconds East
along said North lot line for a distance of 716.20 feet to a POINT OF BEGINNING.
Said parcel contains 502,460 square feet or 11.53 acres more or less. Parcel II:
A non-exclusive easement for passage and parking over that part of Lot 5A,
according to the Survey of Brookwood One, a Limited Partnership, Addition to
Brookwood Medical Center, as recorded in Map Book 104, Page 45, in the Office of
the Judge of Probate of Jefferson County, Alabama, more particularly described
as follows: All private roadways, pedestrian walkways, curb cuts, and other
means of ingress and egress over and across said Lot 5A to and from Medical
Center Drive, as set out in Cross-Easement

--------------------------------------------------------------------------------

 
[picaloanagreement1016019.jpg]
Agreement recorded in Real Volume 1123, Page 390, in said Probate Office, as
amended by instrument recorded in Real Volume 1454, Page 264. Parcel III:
Easement for sanitary sewer line created by instrument recorded in Real Volume
1650, Page 874 and described as follows: Begin at the most Westerly Corner of
Lot 5A, Brookwood I, a Limited Partnership Addition to Brookwood Medical Center
as recorded in Map Book 104, Page 45, in the Office of the Judge of Probate,
Jefferson County, Alabama; run thence in a Southeasterly direction along the
Northeasterly right-of-way line of Brookwood Boulevard, said course being
situated on a curve to the right, having a central angle of 19 degrees, 08
minutes, 11 seconds and a radius of 533.14 feet; thence run along the arc of
said curve for a distance of 178.06 feet to the end of said curve; thence run
along the tangent if extended to said curve in a Southeasterly direction
continuing along the Northeasterly right-of-way line of Brookwood Boulevard for
a distance of 69.63 feet to the point of beginning of a 10 foot wide easement
being 5 feet on either side of the following described center line, from the
point of beginning thus obtained, thence turn an angle to the left of 69 degrees
08 minutes, 07 seconds and run in a Northeasterly direction for a distance of
103.28 feet to the end of said easement. Parcel IV: Easement for water line
created by Instrument recorded in Real Volume 1650, Page 874, and described as
follows: Commence at the most Westerly Corner of Lot 5 A, Brookwood I, a Limited
Partnership Addition to Brookwood Medical Center, as recorded in Map Book 104,
Page 45, in the Office of the Judge of Probate, Jefferson County, Alabama; run
thence in the Southeasterly direction along the Northeasterly right-of-way line
of Brookwood Boulevard, said course being situated on a curve to the right,
having a central angle of 19 degrees, 08 minutes, 11 seconds and a radius of
533.14 feet, for a distance of 178.06 feet to the end of said curve; thence run
along the tangent, if extended to said curve in a Southeasterly direction along
the Northeasterly right-of-way line of Brookwood Boulevard for a distance of
151.63 feet to the point of beginning of a 10 foot wide easement, lying 5 feet
on either side of the following described center line, and from the point of
beginning thus obtained, thence turn an angle to the left of 90 degrees, and run
in the Northeasterly direction for a distance of 73.95 feet to the end of said
easement. All the foregoing, being the same property conveyed to ProAssurance
Indemnity Company, Inc. as successor by merger with Mutual Assurance, Inc. by
deed of record in Book 3553, Page 010, in the Office of the Judge of Probate of
Jefferson County, Alabama.

--------------------------------------------------------------------------------