Exhibit 10.2

 

 

 

TERM LOAN AGREEMENT

Dated as of November 19, 2015

among

CHP PARTNERS, LP,

as Borrower,

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent,

and

The Other Lenders Party Hereto

 

 

 

BANK OF AMERICA, N.A., JPMORGAN CHASE BANK, N.A., and SUNTRUST BANK,

as Co-Syndication Agents

FIFTH THIRD BANK,

as Documentation Agent

KEYBANC CAPITAL MARKETS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

J.P. MORGAN SECURITIES LLC, and SUNTRUST ROBINSON HUMPHREY, INC.,

as Joint Lead Arrangers

 

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01

  

Defined Terms

     1   

1.02

  

Other Interpretive Provisions

     19   

1.03

  

Accounting Terms

     20   

1.04

  

Rounding

     20   

1.05

  

Times of Day

     20   

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

     21   

2.01

  

Committed Loans

     21   

2.02

  

Borrowings, Conversions and Continuations of Committed Loans

     21   

2.03

  

Intentionally Deleted

     22   

2.04

  

Intentionally Deleted

     22   

2.05

  

Prepayments

     22   

2.06

  

Termination or Reduction of Commitments

     22   

2.07

  

Repayment of Loans

     22   

2.08

  

Interest

     23   

2.09

  

Intentionally Deleted

     23   

2.10

  

Computation of Interest and Fees

     23   

2.11

  

Evidence of Debt

     23   

2.12

  

Payments Generally; Agent’s Clawback

     24   

2.13

  

Sharing of Payments

     25   

2.14

  

Unencumbered Pool

     25   

2.15

  

Increase in Commitments

     27   

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

     28   

3.01

  

Taxes

     28   

3.02

  

Illegality

     29   

3.03

  

Inability to Determine Rates

     29   

3.04

  

Increased Costs

     29   

3.05

  

Compensation for Losses

     30   

3.06

  

Mitigation Obligations

     30   

3.07

  

Survival

     30   

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     31   

4.01

  

Conditions of Initial Credit Extension

     31   

4.02

  

Conditions to all Credit Extensions

     32   

ARTICLE V. REPRESENTATIONS AND WARRANTIES

     32   

5.01

  

Existence, Qualification and Power

     32   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

5.02

  

Authorization; No Contravention

     32   

5.03

  

Governmental Authorization; Other Consents

     32   

5.04

  

Binding Effect

     33   

5.05

  

Financial Statements; No Material Adverse Effect

     33   

5.06

  

Litigation

     33   

5.07

  

No Default

     33   

5.08

  

Ownership of Property; Liens

     33   

5.09

  

Environmental Compliance

     33   

5.10

  

Insurance

     34   

5.11

  

Taxes

     34   

5.12

  

ERISA Compliance

     34   

5.13

  

Subsidiaries

     34   

5.14

  

Margin Regulations; Investment Company Act

     34   

5.15

  

Disclosure

     35   

5.16

  

Compliance with Laws

     35   

5.17

  

Taxpayer Identification Number

     35   

5.18

  

Intellectual Property; Licenses, Etc.

     35   

5.19

  

Unencumbered Pool

     35   

5.20

  

Solvency

     35   

5.21

  

OFAC

     35   

ARTICLE VI. AFFIRMATIVE COVENANTS

     36   

6.01

  

Financial Statements

     36   

6.02

  

Certificates; Other Information

     36   

6.03

  

Notices

     37   

6.04

  

Payment of Obligations

     38   

6.05

  

Preservation of Existence, Etc.

     38   

6.06

  

Maintenance of Properties

     38   

6.07

  

Maintenance of Insurance

     38   

6.08

  

Compliance with Laws

     38   

6.09

  

Books and Records

     38   

6.10

  

Inspection Rights

     38   

6.11

  

Use of Proceeds

     39   

6.12

  

Financial Covenants

     39   

6.13

  

Unencumbered Pool Records

     39   

6.14

  

Security Interests

     39   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

6.15

  

Appraisals

     40   

6.16

  

Additional Guarantors

     40   

ARTICLE VII. NEGATIVE COVENANTS

     40   

7.01

  

Liens

     40   

7.02

  

Investments

     41   

7.03

  

Indebtedness

     41   

7.04

  

Fundamental Changes

     42   

7.05

  

Dispositions

     42   

7.06

  

Restricted Payments

     42   

7.07

  

Change in Nature of Business

     43   

7.08

  

Transactions with Affiliates

     43   

7.09

  

Burdensome Agreements

     43   

7.10

  

Use of Proceeds

     43   

7.11

  

Leasing Restrictions

     43   

7.12

  

OFAC

     43   

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

     44   

8.01

  

Events of Default

     44   

8.02

  

Remedies Upon Event of Default

     45   

8.03

  

Application of Funds

     46   

ARTICLE IX. ADMINISTRATIVE AGENT

     46   

9.01

  

Appointment and Authorization of Administrative Agent

     46   

9.02

  

Rights as a Lender

     46   

9.03

  

Exculpatory Provisions

     47   

9.04

  

Reliance by Administrative Agent

     47   

9.05

  

Delegation of Duties

     47   

9.06

  

Resignation by Agent

     48   

9.07

  

Non-Reliance on Agent and Other Lenders

     48   

9.08

  

No Other Duties, Etc.

     48   

9.09

  

Administrative Agent May File Proofs of Claim

     48   

9.10

  

Joint Lead Arranger, Documentation Agent and Syndication Agent

     49   

ARTICLE X. MISCELLANEOUS

     49   

10.01

  

Amendments, Etc.

     49   

10.02

  

Notices; Effectiveness; Electronic Communications

     50   

10.03

  

No Waiver; Cumulative Remedies

     51   

10.04

  

Expenses; Indemnity; Damage Waiver

     51   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

10.05

  

Payments Set Aside

     52   

10.06

  

Successors and Assigns

     53   

10.07

  

Treatment of Certain Information; Confidentiality

     55   

10.08

  

Right of Setoff

     56   

10.09

  

Interest Rate Limitation

     56   

10.10

  

Counterparts; Integration; Effectiveness

     56   

10.11

  

Survival of Representations and Warranties

     56   

10.12

  

Severability

     56   

10.13

  

Governing Law; Jurisdiction; Etc.

     56   

10.14

  

Waiver of Jury Trial

     57   

10.15

  

No Advisory or Fiduciary Responsibility

     57   

10.16

  

USA PATRIOT Act Notice

     58   

10.17

  

Time of the Essence

     58   

10.18

  

FINAL AGREEMENT

     58   

 

-iv-

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SCHEDULES

2.01

     Commitments and Applicable Percentages

5.06

     Litigation

5.09

     Environmental Matters

5.13

     Subsidiaries and Other Equity Investments

10.02

     Administrative Agent’s Office, Certain Addresses for Notices EXHIBITS

Form of

A

     Committed Loan Notice

B

     Term Note

C

     Compliance Certificate

D

     Assignment and Assumption

E

     Unencumbered Pool Certificate

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TERM LOAN AGREEMENT

This TERM LOAN AGREEMENT (this “Agreement”) is entered into as of November 19,
2015, among CHP PARTNERS, LP, a Delaware limited partnership (“Borrower”), each
lender from time to time party hereto (collectively, “Lenders” and individually,
a “Lender”), and KEYBANK NATIONAL ASSOCIATION, a national banking association,
as Administrative Agent.

Borrower has requested that Lenders provide a term loan credit facility (whether
one or more, the “Credit Facilities”), and Lenders are willing to do so on the
terms and conditions set forth herein. In consideration of the mutual covenants
and agreements herein contained, the parties hereto covenant and agree as
follows:

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Additional Lender” has the meaning specified in Section 2.15.

“Administrative Agent” or “Agent” means KeyBank National Association, a national
banking association, in its capacity as administrative agent under any of the
Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or account as
Agent may from time to time notify Borrower and Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by Agent.

“Adjusted Base Rate” means the sum of (a) the Base Rate plus (b) the Applicable
Margin.

“Adjusted LIBOR Rate” means the sum of (a) the LIBOR Rate plus (b) the
Applicable Margin.

“Adjusted Net Operating Income” means, for any Eligible Unencumbered Pool
Property, the difference between (a) the Gross Revenues [provided, that, if the
applicable Property is net leased, Gross Revenues shall be the lesser of
(i) actual rent paid to the Owner or (ii) a reduced rent that complies with the
EBITDAR Thresholds], and (b) the sum of (i) the operating expenses for the
applicable Property for such period, (ii) the greater of (A) the actual
management expense for the applicable period or (B) 5% of Gross Revenues for any
Seniors Housing Property, or 3% of Gross Revenues for any MOB, and (iii) the
applicable Capital Reserves. Adjusted Net Operating Income shall be calculated
based upon a trailing six month basis (annualized). For any of the Eligible
Unencumbered Pool Properties that have been owned for less than six months, such
calculation shall be based on a trailing three month basis (annualized),
building each month until a trailing six month basis is achieved. Any variation
in the foregoing calculation must be approved by Required Lenders.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all Lenders.

“Agreement” means this Term Loan Agreement.

“AL” means an assisted living facility.

“ALZ” mean a memory care facility.

“Anti-Terrorism Laws” means those laws and sanctions relating to terrorism or
money laundering, including Executive Order No. 13224, the USA Patriot Act
(Public Law 107-56), the Bank Secrecy Act (Public Law 91-508), the Trading with
the Enemy Act (50 U.S.C. App. Section 1 et. seq.), the International Emergency

 

TERM LOAN AGREEMENT   Page 1

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Economic Powers Act (50 U.S.C. Section 1701 et. seq.), and the sanction
regulations promulgated pursuant thereto by the Office of Foreign Assets
Control, as well as laws relating to prevention and detection of money
laundering in 18 U.S.C. Sections 1956 and 1957 (as any of the foregoing may from
time to time be amended, renewed, extended or replaced).

“Applicable Margin” means the Term Loan Margin.

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time. If the commitment of each
Lender to make Loans have been terminated pursuant to Section 8.02 or if the
Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

“Appraised Value” means any Project’s value, on a leased fee (if the Project is
triple net leased to a third-party that is not affiliated with Borrower or CNL
HP) or fee simple basis (if the Project is not triple net leased to a
third-party that is not affiliated with Borrower or CNL HP), as applicable as
determined by Agent in its sole but reasonable discretion, and as determined by
an appraisal on an ‘as-is’ basis performed by an appraisal firm acceptable to
the Agent.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.06(b)), and accepted by Agent, in substantially the form of
Exhibit D or any other form approved by Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
CNL HP and its consolidated Subsidiaries, if any, for the fiscal year ended
December 31, 2014, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year of CNL HP
and its consolidated Subsidiaries, including the notes thereto.

“Base Rate” means, for any day, a fluctuating interest rate per annum as shall
be in effect from time to time which rate per annum shall at all times be equal
to the greatest of:

(a) the rate of interest established by KeyBank National Association, from time
to time, as its “prime rate,” whether or not publicly announced, which interest
rate may or may not be the lowest rate charged by it for commercial loans or
other extensions of credit;

(b) the Federal Funds Effective Rate in effect from time to time, determined one
Business Day in arrears, plus 1/2 of 1% per annum; and

(c) one percent (1.0%).

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

TERM LOAN AGREEMENT   Page 2

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“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Committed Borrowing.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where Administrative Agent’s Office is located and, if such
day relates to any LIBOR Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank LIBOR
market.

“Capital Reserves” means, to the extent Borrower or any Owner is responsible for
a portion or all of the capital expenditures for a given Project, Capital
Reserves is defined as an amount equal to $350 per unit for IL, AL & ALZ, $500
per bed for SNF, $0.50 per square foot for medical office and $0.75 per square
foot for all other property types annually. For triple net or absolute net
properties, no additional reserves shall apply.

“Capitalization Rate” means 7.50% for Seniors Housing Properties and 7.00% for
MOBs.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Change of Control” means, with respect to any Person, an event or series of
events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time (such right, an “option right”)), directly or
indirectly, of 25% or more of the equity securities of such Person entitled to
vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right);

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of such Person cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body; or

(c) any individual(s) or entity(s) acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of such Person, or control over the equity securities of
such Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such individual(s) or entity(s) or group has the right
to acquire pursuant to any option right) representing 25% or more of the
combined voting power of such securities.

 

TERM LOAN AGREEMENT   Page 3

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“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“CNL HP” means CNL Healthcare Properties, Inc., a Maryland corporation.

“Code” means the Internal Revenue Code of 1986.

“Commitment” means, as to each Lender, its obligation to make Committed Loans to
Borrower pursuant to Section 2.01 in the amount set forth opposite such Lender’s
name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.

“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of LIBOR Rate Loans, having the same
Interest Period made by each of the Lenders pursuant to Section 2.01.

“Committed Loan” has the meaning specified in Section 2.01.

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of LIBOR Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

“Consolidated EBITDA” means, with respect to any period, an amount equal to the
EBITDA of CNL HP and its Subsidiaries (to the extent of CNL HP’s Equity
Percentage in such Subsidiaries) for such period determined on a consolidated
basis plus (without duplication) each such person’s Equity Percentage of EBITDA
of its Unconsolidated Affiliates as hereafter provided.

“Consolidated Fixed Charges” means, on any date of determination, the sum of
(a) consolidated interest expense (both expensed and capitalized), plus (b) all
of the principal due and payable and principal paid with respect to Total
Indebtedness of CNL HP and its Subsidiaries (to the extent of CNL HP’s Equity
Percentage in such Subsidiaries) during such period, other than any balloon,
bullet or similar principal payment which repays such Total Indebtedness in full
and any voluntary full or partial prepayments prior to stated maturity thereof,
plus (c) all distributions on preferred stock paid during such period, plus
(d) the principal payment on any capital lease obligations. Each such person’s
equity percentage in the fixed charges referred to above of its Unconsolidated
Affiliates shall be included (without duplication) in the determination of
“Consolidated Fixed Charges”.

“Consolidated Net Worth” means, with respect to any period, for CNL HP and its
Subsidiaries (to the extent of CNL HP’s Equity Percentage in such Subsidiaries),
an amount equal to (a) the sum of (i) shareholder’s equity as of such date, plus
(ii) accumulated depreciation and amortization, less (b) the sum of (i) all
intangible assets (excluding those related to value of leases from real estate
acquisitions) plus (ii) intangible liabilities all as determined in accordance
with GAAP. Each such person’s equity percentage in the amounts referred to above
of its Unconsolidated Affiliates shall be included (without duplication) in the
determination of “Consolidated Net Worth.”

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means a Borrowing.

 

TERM LOAN AGREEMENT   Page 4

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“Credit Facilities” as such term is defined on Page 1.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means when used with respect to Obligations an interest rate
equal to the sum of (a) the Adjusted Base Rate plus (b) 2% per annum; provided,
however, that with respect to a LIBOR Rate Loan, the Default Rate shall be an
interest rate equal to the interest rate (including any Applicable Margin)
otherwise applicable to such Loan plus 2% per annum.

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Committed Loans, within two Business Days of the date such Loans
were required to be funded hereunder unless such Lender notifies Agent and the
Borrower in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to
the Agent or any other Lender any other amount required to be paid by it
hereunder within two Business Days of the date when due, (b) has notified the
Borrower or the Administrative Agent in writing that it does not intend to
comply with its funding obligations hereunder, or has made a public statement to
that effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically
identified in such writing or public statement) cannot be satisfied), or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

“Defaulting Lender Waterfall” means any payment of principal, interest, fees or
other amounts received by the Agent for the account of any Defaulting Lender
(whether voluntary or mandatory, at maturity or otherwise) or received by the
Agent from a Defaulting Lender pursuant to Section 10.08 shall be applied at
such time or times as may be determined by Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Agent hereunder;
second, as the Borrower may request (so long as no Default or Event of Default
exists), to the funding of any Loan in respect of which such Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by the Administrative Agent; third, if so determined by the Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement; fourth, to the payment of any amounts
owing to the Lenders as a result of any judgment of a court of competent
jurisdiction obtained by any Lender against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement;
fifth, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans in respect of which such Defaulting Lender
has not fully funded its appropriate share, and (y) such Loans were made at a
time when the conditions set forth in Section 4.02 were satisfied or waived,
such payment shall be applied solely to pay the Loans of all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of such Defaulting Lender until such time as all Loans are funded by the Lenders
pro rata in accordance with the Commitments under the Facility. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this
“Defaulting Lender Waterfall” shall be deemed paid to and redirected by such
Defaulting Lender, and each Lender irrevocably consents hereto.

“Development Property” means any property that is currently under construction
or is a recently completed construction project that is not yet 85% leased.
Notwithstanding the foregoing, a completed construction project may not be
included as a “Development Property” for more than 12 months. After 12 months,
the property will be valued on the basis of current “as-is” appraised value if
included in the Unencumbered Pool.

 

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“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“EBIT” means, for any Person, such Person’s net income, less income or plus loss
from discontinued operations and extraordinary items, plus income taxes, plus
interest expense.

“EBITDA” means, with respect to any Person, for any period (without
duplication): (a) net income (or loss) in accordance with GAAP, exclusive of the
following (but only to the extent included in determination of such net income
(loss)): (i) depreciation and amortization expense; (ii) interest expense;
(iii) income tax expense; (iv) acquisition and closing costs (to include
investment service fees not to exceed 1.85% of the purchase price of an asset
and disposition fees not to exceed 1% of the disposition price of an asset) and
extraordinary or non-recurring gains and losses (including, without limitation,
gains and losses on the sale of assets and income and expense allocated to
minority owners); and (v) other non-cash items to the extent not actually paid
as a cash expense; plus (b) such Person’s pro rata share of EBITDA of its
Unconsolidated Affiliates as provided below. In no event shall any of the
adjustments be double-counted. With respect to consolidated Subsidiaries that
are not wholly-owned Subsidiaries, EBITDA attributable to such entities shall
only be included to the extent of CNL HP’s Equity Percentage in such
Subsidiaries. For the avoidance of doubt, EBITDA for Unconsolidated Affiliates
and Subsidiaries of CNL HP that are not wholly owned Subsidiaries shall include
only CNL HP’s Equity Percentage of net income (or loss) from such Subsidiary of
CNL HP that is not a wholly owned Subsidiary plus its Equity Percentage of
(i) depreciation and amortization expense; (ii) interest expense; (iii) income
tax expense; (iv) acquisition closing costs and extraordinary or non-recurring
gains and losses (including, without limitation, gains and losses on the sale of
assets) and income and expense allocated to minority owners; and (v) other
non-cash items to the extent not actually paid as a cash expense.

“EBITDAR” means, for any Person for any applicable period, such Person’s net
income, less income or plus loss from discontinued operations and extraordinary
items, plus income taxes, plus interest expense, plus depreciation and
amortization, plus any leased asset payments during such period.

“EBITDAR Thresholds” means, for each net leased Eligible Unencumbered Pool
Property, the applicable tenant EBITDAR for such Property must be equal to or
greater than: (i) 1.10x for Seniors Housing Properties; (ii) 1.85x for hospitals
included as Other Healthcare Assets; and (iii) 1.35x for all Other Healthcare
Assets excluding hospitals.

“Eligible Assignee” means any Qualified Lender that meets the requirements to be
an assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents,
if any, as may be required under Section 10.06(b)(iii)).

“Eligible MOB Property” shall mean as of any date, any MOB which is an Eligible
Unencumbered Property.

“Eligible Other Healthcare Asset” shall mean as of any date, any Other
Healthcare Asset which is an Eligible Unencumbered Property.

“Eligible Seniors Housing Property” shall mean as of any date, each Seniors
Housing Property which is an Eligible Unencumbered Property.

“Eligible Unencumbered Property” shall mean any Property which: (i) is 100%
owned by any Owner; (ii) is owned in fee simple, free and clear of any title
exceptions or negative pledge other than those approved in writing by Agent (if
not owned fee simple, the applicable Property may be subject to a “mortgageable”
ground lease with not less than 30 years remaining on the term and with other
standard mortgagee provisions acceptable to Agent in its sole discretion);
(iii) is free from environmental concerns; (iv) has all appropriate licenses and
certificates of occupancy per the applicable jurisdiction; (v) is located in the
mainland United States; (vi) is an operating property free from development
and/or material renovation; (vii) is (a) managed by the Borrower, any Affiliate
of Borrower

 

TERM LOAN AGREEMENT   Page 6

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or a qualified property management company reasonably acceptable to Agent, or
(b) leased to a single tenant not in bankruptcy or more than sixty days past due
on any payment of rent; and (viii) if a MOB, (a) is leased to a single tenant
not in bankruptcy or, to the extent leased to multiple tenants, is not leased to
a tenant or tenants in bankruptcy pursuant to a lease or leases covering in
excess of 40% of the total rentable area of the applicable Property; and (b) is
not leased to any tenant more than sixty days past due on any rent or, to the
extent leased to multiple tenants, not leased to a tenant or tenants more than
sixty days delinquent in payment of rent pursuant to a lease or leases covering
in excess of 40% of the total rentable area of the Property. If a Property fails
to meet any of the foregoing, it may be deemed to be an “Eligible Unencumbered
Property” if such Property is otherwise acceptable to Required Lenders in their
reasonable discretion.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“Equity Percentage” means, with respect to any Person, the ownership interest of
such Person in each of its Subsidiaries and Unconsolidated Affiliates, as
applicable.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by Borrower or any ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 8.01.

 

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“Excluded Taxes” means, with respect to Agent, any Lender or any other recipient
of any payment to be made by or on account of any obligation of Borrower or any
Guarantor hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is
located, and (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which Borrower or any Guarantor
is located.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to KeyBank on
such day on such transactions as determined by Agent.

“FFO” as defined by NAREIT and adjusted for (a) non-cash/reoccurring write offs,
(b) acquisitions costs and investment service fees (not to exceed 1.85% of
purchase price), and (c) deferred financing costs. FFO from joint venture
investments will be excluded and the amount of distributions received in cash
from the joint ventures will be included. In no event shall any adjustments be
double counted.

“Fixed Charge Coverage Ratio” means the ratio of (a) Consolidated EBITDA, to
(b) Consolidated Fixed Charges. Such ratio shall be calculated for the twelve
(12) month period ending on the applicable date of determination.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Gross Asset Value” means an amount equal to the sum of (a) the undepreciated
book value (adjusted for any impairments) of all operating properties (including
real estate related intangibles) owned by Borrower, CNL HP or any Subsidiary of
Borrower or CNL HP consolidated for GAAP purposes, plus (b) the GAAP book value
of all Development Properties owned by Borrower, CNL HP or any Subsidiary of
Borrower or CNL HP (to the extent of the applicable Person’s Equity Percentage
in such Subsidiary); plus (c) the GAAP book value of all land owned by Borrower,
CNL HP or any Subsidiary of Borrower or CNL HP (to the extent of the applicable
Person’s Equity Percentage in such Subsidiary); plus (d) the GAAP book value of
all mortgage notes receivable owned by Borrower, CNL HP or any Subsidiary of
Borrower or CNL HP (to the extent of the applicable Person’s Equity Percentage
in such Subsidiary), plus (e) the cash and cash equivalents of Borrower or CNL
HP. Notwithstanding anything to the contrary, “Gross Asset Value” will include
the pro rata share of Borrower or CNL HP of any of the items listed above for
any Unconsolidated Affiliates.

“Gross Revenue” means, for any applicable period, all revenues of the Pool
Assets derived from the operation, use, leasing and occupancy of such Pool
Assets; provided, however, that in no event shall Gross Revenues include (a) any
loan proceeds, (b) proceeds or payments under insurance policies (except
proceeds of business interruption insurance); (c) condemnation proceeds; (d) any
security deposits received from tenants in the applicable Pool Assets, unless
and until the same are applied to rent or other obligations in accordance with
the tenant’s lease; or (e) any other extraordinary items, in Agent’s reasonable
discretion.

 

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“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantors” means, collectively, CNL HP, each Material Subsidiary, each Owner
and each Tenant, on a joint and several basis.

“Guaranty” means that certain Guaranty Agreement, executed by the Guarantors,
jointly and severally, in favor of the Lenders pursuant to which the Guarantors
have guaranteed, among other things, all obligations of Borrower under the Loan
Documents.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“IL” means an independent living facility.

“Incremental Amendment” has the meaning specified in Section 2.15.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money (other than trade debt
incurred in the ordinary course of business which is not more than one hundred
eighty (180) days past due) and all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than sixty (60) days after
the date on which such trade account payable was created);

 

TERM LOAN AGREEMENT   Page 9

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(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) capital leases and Synthetic Lease Obligations;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Ineligible Unencumbered Property” has the meaning specified in Section 2.14.

“Information” has the meaning specified in Section 10.07.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each month as well as the last day of each Interest Period
applicable to such Loan and the Maturity Date; and (b) as to any Base Rate Loan,
the last Business Day of each month and the Maturity Date.

“Interest Period” means, as to each LIBOR Rate Loan, the period commencing on
the date such LIBOR Rate Loan is disbursed or converted to or continued as a
LIBOR Rate Loan and ending on the date one, two, three or six months thereafter,
as selected by Borrower in its Committed Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;

(iii) any one month Interest Period that begins on a date other than as provided
in (ii) shall end on the last Business Day of the calendar month in which such
Interest Period commences; and

(iv) no Interest Period shall extend beyond the Maturity Date.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another

 

TERM LOAN AGREEMENT   Page 10

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Person that constitute a business unit. For purposes of covenant compliance, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.

“IRS” means the United States Internal Revenue Service.

“KeyBank” means KeyBank National Association and its successors.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify Borrower and Agent.

“Leverage Ratio” means, as of any applicable date of determination, the ratio of
(a) CNL HP’s consolidated Total Indebtedness to (b) the Gross Asset Value.

“LIBOR Base Rate” has the meaning specified in the definition of LIBOR Rate.

“LIBOR Rate” means for any Interest Period with respect to a LIBOR Rate Loan, a
rate per annum determined by Agent pursuant to the following formula:

 

  LIBOR Rate =   

LIBOR Base Rate

        1.00 – LIBOR Reserve Percentage   

Where,

“LIBOR Base Rate” means, for such Interest Period the rate per annum equal to
the ICE Benchmark Administration LIBOR Rate (“ICE LIBOR”), as published by
Reuters (or other commercially available source providing quotations of ICE
LIBOR as designated by Agent from time to time) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, provided, that in no
event shall such rate be less than zero for each LIBOR Rate Loan that has not
been identified by the Borrower in accordance with the terms of this Agreement
as being subject to a Specified Swap Contract. If such rate is not available at
such time for any reason, then the “LIBOR Base Rate” for such Interest Period
shall be the rate per annum determined by Agent to be the rate at which deposits
in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the LIBOR Rate Loan being made, continued or
converted by KeyBank and with a term equivalent to such Interest Period would be
offered by KeyBank’s London Branch to major banks in the London interbank LIBOR
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.

“LIBOR Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”). The LIBOR Rate for each outstanding LIBOR Rate Loan
shall be adjusted automatically as of the effective date of any change in the
LIBOR Reserve Percentage.

 

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“LIBOR Rate Loan” means a Committed Loan that bears interest at a rate based on
the LIBOR Rate.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to Borrower under Article II in
the form of a Committed Loan.

“Loan Documents” means this Agreement, each Term Note and the Guaranty.

“Loan Parties” means, collectively, Borrower, CNL HP, each other Guarantor and
each other Person (other than Agent or any Lender) executing any Loan Document.
For the avoidance of doubt, no Operator shall be deemed to be a “Loan Party” so
long as such Operator is not a Guarantor.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of (i) Borrower
or CNL HP or (ii) Borrower, CNL HP and their Subsidiaries taken as a whole;
(b) a material impairment of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party.

“Material Subsidiary” means (i) any wholly-owned Subsidiary of Borrower or CNL
HP which owns, directly or indirectly, equity in any Owner or Tenant and
(ii) any wholly-owned Subsidiary of Borrower or CNL HP which accounts for 5% or
more of Gross Asset Value and that is not prohibited from providing a guaranty
under permanent debt agreements.

“Maturity Date” means the Term Loan Maturity Date.

“MOB” means medical office building.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

“NAREIT” means the National Association of Real Estate Investment Trusts.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“Operator” means any lessee, manager or other operator of any Pool Asset. For
the avoidance of doubt, any lessee under a residency agreement or a space lease
shall not be deemed to be an “Operator”.

“Other Healthcare Asset” shall mean any specialty hospital, acute care hospital,
long-term acute care hospital, ambulatory surgery center, diagnostic center or
SNF approved by Required Lenders.

 

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“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future stamp, intangible or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.

“Outstanding Amount” means with respect to Committed Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Committed Loans occurring on such
date.

“Owner” shall mean the applicable Subsidiary of CNL HP that owns a Pool Asset.

“Owner EBITDA” means, for any Owner for any applicable period, such Owner’s net
income, less income or plus loss from discontinued operations and extraordinary
items, plus income taxes, plus interest expense, plus depreciation and
amortization for such period.

“Participant” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

“Permanent Debt Availability Component” means the allocated amount of debt
resulting in a 1.5 to 1.0 implied debt service coverage ratio when the Adjusted
Net Operating Income for the Pool One Properties is divided by the annual debt
service for such allocated amount of debt applying a thirty (30) year
amortization period and an interest rate equal to the greater of (i) six and
one-half percent (6.5%), and (ii) the yield per annum as of the date of such
calculation on U.S. Treasury securities selected in good faith by Agent,
maturing approximately ten (10) years after the date of calculation, plus three
percent (3.00%).

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA), if any, established by Borrower or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Pool Asset” means any Eligible Unencumbered Property that has been included in
the Unencumbered Pool for all purposes hereunder.

“Pool One Availability” shall be the lesser of (i) sixty percent (60%) of the
Pool One Value, and (ii) the Permanent Debt Availability Component.

 

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“Pool One Properties” shall refer to all Pool Assets that are not Pool Two
Properties.

“Pool One Value” means, with respect to all Pool One Properties, an aggregate
amount equal to the sum of:

(a) for each Seniors Housing Property, either (i) during the 18 month period
commencing on the date such Property is acquired by the applicable Owner, the
acquisition cost of such Property, or (ii) at all times thereafter, the quotient
of such Property’s Adjusted Net Operating Income divided by the Capitalization
Rate; plus

(b) for each MOB, either (i) during the 18 month period commencing on the date
such Property is acquired by the applicable Owner, the acquisition cost of such
Property, or (ii) at all times thereafter, the quotient of such Property’s
Adjusted Net Operating Income divided by the Capitalization Rate; plus

(c) the as-is Appraised Value of each Other Healthcare Asset.

Notwithstanding the foregoing, for those Pool Assets that are less than 80%
occupied at the time of addition to the Unencumbered Pool, the Pool One Value
for such Pool Assets is the amount equal to the sum of the following for the 18
month period commencing on the date of inclusion to the Unencumbered Pool:

(x) the as-stabilized Appraised Value of each Seniors Housing Property; plus

(y) the as-stabilized Appraised Value of each MOB.

At the expiration of such 18 month period, the value of the applicable Pool
Assets shall be calculated pursuant to clauses (a), (b) and (c) above.

“Pool Two Availability” shall be defined as sixty percent (60%) of the Pool Two
Value.

“Pool Two Asset” shall refer to each Pool Asset that is a Seniors Housing
Property that was recently built and received its certificate of occupancy no
more than 18 months from the time of calculation. Notwithstanding the foregoing,
the properties known as “Fieldstone”, “HRA Villages”, “Dogwood at Acworth”, and
“Superior Residences of Panama City” shall be included as Pool Two Properties
through June 30, 2016. The Borrower may designate any Pool Asset as a Pool One
Property if such Property satisfies the criteria for a Pool Two Asset; provided,
however, that once a Pool Asset is designated as a Pool One Property, such
Property can no longer be a Pool Two Asset.

“Pool Two Properties” shall refer to all Pool Two Assets.

“Pool Two Value” means the aggregate Appraised Value of the Pool Two Properties
determined on an “as-stabilized” basis.

“Prior Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement, dated December 19, 2014, by and among Borrower, Agent and the lenders
a party thereto from time to time, as amended.

“Project” shall refer to each Seniors Housing Property, MOB or Other Healthcare
Asset that is owned by an Owner and is a Pool Asset.

“Property” shall refer to any Senior Housing Property, MOB or Other Healthcare
Asset.

“Public Lender” has the meaning specified in Section 6.02.

“Qualified Lender” means (i) any commercial bank, savings bank, savings and loan
association or similar financial institution which (a) has total assets of One
Billion Dollars ($1,000,000,000) or more, (b) is “well capitalized” within the
meaning of such term under the regulations promulgated under the auspices of the
Federal Deposit Insurance Corporation Improvement Act of 1991, (c) in the sole
judgment of the Agent, is engaged in the business of lending money and extending
credit, and buying loans or participations in loans under credit facilities

 

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substantially similar to those extended under this Agreement, and (d) in the
sole judgment of the Agent, is operationally and procedurally able to meet the
obligations of a Lender hereunder to the same degree as a commercial bank;
(ii) any insurance company in the business of writing insurance which (a) has
total assets of One Billion Dollars ($1,000,000,000) or more (b) is “best
capitalized” within the meaning of such term under the applicable regulations of
the National Association of Insurance Commissioners, and (c) meets the
requirements set forth in subclauses (c) and (d) of clause (i) above; and
(iii) any other financial institution having total assets of One Billion Dollars
($1,000,000,000) (including a mutual fund or other fund under management of any
investment manager having under its management total assets of One Billion
Dollars ($1,000,000,000) or more) which meets the requirement set forth in
subclauses (c) and (d) of clause (i) above; provided that each Qualified Lender
must (w) be organized under the Laws of the United States of America, any state
thereof or the District of Columbia, or, if a commercial bank, be organized
under the Laws of the United States of America, any state thereof or the
District of Columbia, the Cayman Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, (x) act under the Loan Documents through a
branch, agency or funding office located in the United States of America, and
(y) be exempt from withholding of tax on interest and deliver the documents
related thereto pursuant to the Internal Revenue Code as in effect from time to
time.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

“Rent” shall mean all rentals or other income paid to an Owner under the leases
between any Owner and the tenant in connection with a Pool Asset for any
applicable period, but specifically excluding any reserves, escrows, security
deposits or other deposits, taxes, or reimbursements for amounts paid by an
Owner on a tenant’s behalf.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders having in the
aggregate at least fifty percent (50.0%) of the Total Outstandings.

“Responsible Officer” means the chief executive officer, president, chief
financial officer or treasurer of a Loan Party and, solely for purposes of
notices given pursuant to Article II, any other officer or employee of the
applicable Loan Party so designated by any of the foregoing officers in a notice
to Agent. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of Borrower, CNL HP or any Subsidiary of Borrower or CNL HP (to the
extent of the Equity Percentage of Borrower or CNL HP in such Subsidiary), or
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such capital stock
or other Equity Interest or on account of any return of capital to the
stockholders, partners or members (or the equivalent Person thereof) of Borrower
or CNL HP.

“RIDEA” means the REIT Investment Diversification and Empowerment Act of 2007.

“Sanctioned Entity” shall mean (i) an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident,
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available
at http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html, or as
otherwise published from time to time as such program may be applicable to such
agency, organization or person.

 

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“Sanctioned Person” shall mean a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published from time to time.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Indebtedness” means, as of any date of determination, the aggregate
principal amount of Total Indebtedness outstanding of Borrower or CNL HP or any
Subsidiary of Borrower or CNL HP (to the extent of the applicable Person’s
Equity Percentage in such Subsidiary), as evidenced by notes, bonds, debentures,
or similar instruments and capital lease obligations that is secured by a lien.

“Secured Recourse Indebtedness” means Secured Indebtedness that is recourse for
payment to Borrower or CNL HP. For the avoidance of doubt, the indebtedness of
Borrower under the Loan Documents shall not be deemed to be Secured Recourse
Indebtedness for purpose hereof.

“Seniors Housing Properties” shall mean all IL, AL and ALZ facilities.

“SNF” means a skilled nursing facility.

“Solvent” means, as to any Loan Party on a particular date, that any such Person
(a) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its
debts as they mature, (b) has assets having a value, both at fair valuation and
at present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe that it
will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.

“Specified Swap Contract” means any Swap Contract that is made or entered into
at any time, or in effect at any time now or hereafter, whether as a result of
an assignment or transfer or otherwise, in each case with respect to the Loan,
between the Borrower and a Specified Swap Contract Provider.

“Specified Swap Contract Provider” means any Lender, or Affiliate of a Lender,
that is party to a Swap Contract at the time such Swap Contract is entered into.

“Subordinated Liabilities” means liabilities subordinated to the Obligations in
a manner acceptable to Agent in its sole discretion.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
CNL HP.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to

 

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the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Tenant” shall mean the applicable wholly-owned Subsidiary of CNL HP that
controls any Pool Asset pursuant to a lease with the applicable Owner.

“Term Loan Availability Period” shall refer to the ninety (90) day period
commencing on the date of this Agreement.

“Term Loan Commitment Amount” shall mean $250,000,000.00.

“Term Loan Commitment Increase” shall have the meaning given such term in
Section 2.15.

“Term Loan Facility” means that certain term loan facility established by the
Lenders for the Borrower hereunder on or about the date hereof in the initial
maximum aggregate amount of $250,000,000.00, subject to Borrower’s right to
increase such facility as set forth in Section 2.15.

“Term Loan Initial Maturity Date” means November 19, 2020.

“Term Loan Maturity Date” means the date on which the Term Notes mature, whether
by acceleration, lapse of time or otherwise; provided, that such date shall be
the Term Loan Initial Maturity Date, unless earlier accelerated as permitted
herein or in any other Loan Document.

“Term Loan Margin” means the corresponding percentages per annum as set forth
below based on the Leverage Ratio:

 

Pricing Level

   Covenant Level   Applicable Margin        Leverage Ratio   LIBOR Margin    
Base Rate Margin  

I

   < 40%     1.55 %      0.55 % 

II

   > 40%, but < 45%     1.70 %      0.70 % 

III

   > 45%, but < 50%     1.80 %      0.80 % 

IV

   > 50%, but < 55%     1.95 %      0.95 % 

V

   > 55%     2.15 %      1.15 % 

Commencing the date hereof, the Term Loan Margin shall be Price Level III until
the receipt by Agent of the first Compliance Certificate. The Term Loan Margin
shall be determined and adjusted quarterly on the date (each a

 

TERM LOAN AGREEMENT   Page 17

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“Calculation Date”) ten (10) Business Days after receipt by the Administrative
Agent of the Compliance Certificate pursuant to Section 6.02 for the most
recently ended fiscal quarter of the Borrower; provided that if the Borrower
fails to provide the Compliance Certificate as required by Section 6.02 for the
most recently ended fiscal quarter of the Borrower preceding the applicable
Calculation Date, the Term Loan Margin from such Calculation Date shall be based
on Pricing Level V until such time as an appropriate Compliance Certificate is
provided, at which time the Pricing Level shall be determined by reference to
the Leverage Ratio as of the last day of the most recently ended fiscal quarter
of the Borrower preceding such Calculation Date. The Term Loan Margin shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Term Loan Margin shall be applicable to all Loans then
existing or subsequently made or issued.

“Term Notes” means, collectively, each promissory note made by Borrower in favor
of a Lender evidencing Loans made by such Lender evidencing the Term Loan
Facility, substantially in the form of Exhibit B.

“Total Indebtedness” means all of the following (without duplication):

(a) all obligations of such person in respect of money borrowed (other than
trade debt incurred in the ordinary course of business which is not more than
one hundred eighty (180) days past due);

(b) all obligations of such person, whether or not for money borrowed
(i) represented by notes payable, or drafts accepted, in each case representing
extensions of credit, (ii) evidenced by bonds, debentures, notes or similar
instruments, or (iii) constituting purchase money indebtedness, conditional
sales contracts, title retention debt instruments or other similar instruments,
upon which interest charges are customarily paid or that are issued or assumed
as full or partial payment for property or services rendered;

(c) all obligations of such person as a lessee or obligor under a capitalized
lease;

(d) all reimbursement obligations of such person under any letters of credit or
acceptances (whether or not the same have been presented for payment);

(e) all off-balance sheet obligations of such person;

(f) all obligations of such person in respect of any purchase obligation,
repurchase obligation, takeout commitment or forward equity commitment, in each
case evidenced by a binding agreement (excluding any such obligation to the
extent the obligation can be satisfied by the issuance of equity interests);

(g) net obligations under any derivatives contract not entered into as a hedge
against existing indebtedness, in an amount equal to the derivatives termination
value thereof;

(h) all indebtedness of other persons which such person has guaranteed or is
otherwise recourse to such person (except for guaranties of customary exceptions
for fraud, misapplication of funds, environmental indemnities, violation of
“special purpose entity” covenants, and other similar exceptions to recourse
liability until a claim is made with respect thereto, and then shall be included
only to the extent of the amount of such claim), including liability of a
general partner in respect of liabilities of a partnership in which it is a
general partner which would constitute indebtedness hereunder, any obligation to
supply funds to or in any manner to invest directly or indirectly in a person,
to maintain working capital or equity capital of a person or otherwise to
maintain net worth, solvency or other financial condition of a person, to
purchase indebtedness, or to assure the owner of indebtedness against loss,
including, without limitation, through an agreement to purchase property,
securities, goods, supplies or services for the purpose of enabling the debtor
to make payment of the indebtedness held by such owner or otherwise;

(i) all indebtedness of another person secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien on property or assets owned by such person, even though such person
has not assumed or become liable for the payment of such indebtedness or other
payment obligation; and

(j) such person’s pro rata share of the indebtedness (based upon its equity
percentage in such unconsolidated affiliates) of any unconsolidated affiliate of
such person.

 

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“Total Indebtedness” shall be adjusted to remove any impact of intangibles
pursuant to FAS 141, as issued by the Financial Accounting Standards Board in
June of 2001.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a LIBOR Rate Loan.

“Unconsolidated Affiliates” means, in respect of any Person, any other Person in
which such Person holds an Equity Interest and (a) which Equity Interest is
accounted for in the financial statements of such Person on an equal basis of
accounting and whose financial results would not be consolidated under GAAP with
the financial results of such first Person on the consolidated financial
statements of such first Person, or (b) which is not a Subsidiary of such first
Person.

“Unencumbered Pool” means all Pool Assets as of any applicable date of
determination.

“Unencumbered Pool Certificate” means a certificate executed by Borrower in the
form attached hereto as Exhibit E.

“Unencumbered Pool Availability” means the sum of (i) the Pool One Availability,
plus (ii) the Pool Two Availability.

“Unencumbered Pool Value” means, with respect to all Pool Assets, the sum of
(i) the Pool One Value plus the (ii) the Pool Two Value.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

“Unsecured Indebtedness” means, as of any date of determination, the aggregate
amount of Total Indebtedness of Borrower or CNL HP or any Subsidiary of Borrower
or CNL HP (to the extent of the applicable Person’s Equity Percentage in such
Subsidiary) as of such date that is not Secured Indebtedness.

“Unsecured Interest Expense” means, as of any date of determination, the greater
of (i) the product of (a) the Unsecured Indebtedness multiplied by (b) six
percent (6.00%), and (ii) the actual interest expense on the Unsecured
Indebtedness for the applicable period.

“Weighted Average Occupancy” means: (a) with respect to an AL, IL, or an ALZ
that is single and/or single and dual occupancy, the number of occupied units
divided by total units; (b) with respect to an AL, IL, or an ALZ that is dual
occupancy only, the number of occupied beds divided by total beds; (c) with
respect to a SNF, the number of occupied beds divided by total beds; and (d) for
all other product types, the occupied square footage divided by the total square
footage. The foregoing occupancy determination will be weighted for each
applicable Property based upon such Property’s contribution to the aggregate
Adjusted Net Operating Income for the Pool One Properties.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine

 

TERM LOAN AGREEMENT   Page 19

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and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall
be construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and Borrower or the Required Lenders shall so request, Agent, Lenders
and Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) Borrower shall provide to Agent and Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of CNL HP and its Subsidiaries or to the
determination of any amount for CNL HP and its Subsidiaries on a consolidated
basis or any similar reference shall, in each case, be deemed to include each
variable interest entity that CNL HP is required to consolidate pursuant to FASB
Interpretation No. 46 – Consolidation of Variable Interest Entities: an
interpretation of ARB No. 51 (January 2003) as if such variable interest entity
were a Subsidiary as defined herein.

1.04 Rounding. Any financial ratios required to be maintained by Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

 

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ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Committed Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans prior to the Term Loan Maturity Date under
the Term Loan Facility (each such loan, a “Committed Loan”) to Borrower from
time to time during the Term Loan Availability Period, on any Business Day, in
an aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Unsecured Indebtedness shall not exceed the
Unencumbered Pool Availability, (ii) the aggregate principal amount of Loans
made under the Term Loan Facility shall not exceed the Term Loan Commitment
Amount, and (iii) the aggregate Outstanding Amount of the Committed Loans of any
Lender shall not exceed such Lender’s Commitment. The initial amount of the Term
Loan Facility (prior to any increase in accordance with Section 2.15) may be
funded in up to two advances on or before the end of the Term Loan Availability
Period. Amounts borrowed under the Term Loan Facility may be prepaid under
Section 2.05, but may not be reborrowed hereunder. Committed Loans may be Base
Rate Loans or LIBOR Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Committed Loans.

(a) Each Committed Borrowing, each conversion of Committed Loans from one Type
to the other, and each continuation of LIBOR Rate Loans shall be made upon
Borrower’s irrevocable notice to Agent, which may be given by telephone. Each
such notice must be received by Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of LIBOR Rate Loans or of any conversion of LIBOR Rate Loans to
Base Rate Committed Loans, and (ii) one Business Day prior to the requested date
of any Borrowing of Base Rate Committed Loans. Each telephonic notice by
Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery
to Agent of a written Committed Loan Notice, appropriately completed and signed
by a Responsible Officer of Borrower. Each Borrowing of, conversion to or
continuation of LIBOR Rate Loans shall be in a principal amount of $1,000,000 or
a whole multiple of $1,000,000 in excess thereof. Each Borrowing of or
conversion to Base Rate Committed Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Committed
Loan Notice (whether telephonic or written) shall specify (i) whether Borrower
is requesting a Committed Borrowing, a conversion of Committed Loans from one
Type to the other, or a continuation of LIBOR Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Committed Loans to be
borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, (v) in the
case of a LIBOR Rate Loan, whether such Loan is subject to a Specified Swap
Agreement, and (vi) if applicable, the duration of the Interest Period with
respect thereto. If Borrower fails to specify a Type of Committed Loan in a
Committed Loan Notice or if Borrower fails to give a timely notice requesting a
conversion or continuation, then the applicable Committed Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable LIBOR Rate Loans. If Borrower requests a
Borrowing of, conversion to, or continuation of LIBOR Rate Loans in any such
Committed Loan Notice, but fail to specify an Interest Period, it will be deemed
to have specified an Interest Period of one month.

(b) Following receipt of a Committed Loan Notice, Agent shall promptly notify
each Lender of the amount of its Applicable Percentage of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is
provided by Borrower, Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in the preceding subsection.
In the case of a Committed Borrowing, each Lender shall make the amount of its
Committed Loan available to Agent in immediately available funds at
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), Agent shall make all funds so received
available to Borrower in like funds as received by Agent either by (i) crediting
the account of Borrower on the books of KeyBank with the amount of such funds or
(ii) wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) Agent by Borrower.

(c) Except as otherwise provided herein, a LIBOR Rate Loan may be continued or
converted only on the last day of an Interest Period for such LIBOR Rate Loan.
During the existence of a Default, no Loans may be requested as, converted to or
continued as LIBOR Rate Loans without the consent of the Required Lenders,

 

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and the Required Lenders may demand that any or all of the then outstanding
LIBOR Rate Loans be converted immediately to Base Rate Committed Loans and
Borrower agrees to pay all amounts due under Section 3.05 in accordance with the
terms thereof due to any such conversion.

(d) Agent shall promptly notify Borrower and Lenders of the interest rate
applicable to any Interest Period for LIBOR Rate Loans upon determination of
such interest rate.

(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than eight (8) Interest Periods
in effect with respect to Committed Loans.

2.03 Intentionally Deleted.

2.04 Intentionally Deleted.

2.05 Prepayments. (a) Borrower may, upon notice to Agent, at any time or from
time to time voluntarily prepay Committed Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by Agent not
later than 12:00 noon (A) three (3) Business Days prior to any date of
prepayment of LIBOR Rate Loans and (B) on the date of prepayment of Base Rate
Committed Loans; (ii) any prepayment of LIBOR Rate Loans shall be in a principal
amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and
(iii) any prepayment of Base Rate Committed Loans shall be in a principal amount
of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case,
if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Committed Loans to be prepaid and, if LIBOR Rate Loans are to be prepaid, the
Interest Period(s) of such Loans. Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment. If such notice is given by Borrower, Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein. Any prepayment of a LIBOR Rate
Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Each
such prepayment shall be applied to the Committed Loans of Lenders in accordance
with their respective Applicable Percentages.

(b) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, Borrower shall immediately prepay Loans in an
aggregate amount equal to such excess.

(c) If for any reason the Unsecured Indebtedness at any time exceeds the
Unencumbered Pool Availability, Borrower shall immediately prepay (i) a portion
of the Unsecured Indebtedness in an aggregate amount equal to such excess, or
(ii) Loans in an aggregate amount equal to the lesser of (A) such excess, or
(B) the aggregate outstanding balance under the Term Notes.

2.06 Termination or Reduction of Commitments. Borrower may, upon notice to
Agent, terminate the Aggregate Commitments, or from time to time permanently
reduce the Aggregate Commitments; provided that (i) any such notice shall be
received by Agent not later than 12:00 noon five (5) Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess
thereof, and (iii) Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments. Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Applicable
Percentage. All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.

2.07 Repayment of Loans. Borrower shall repay to Lenders, on the Term Loan
Maturity Date, the aggregate principal amount of Committed Loans under the Term
Loan Facility outstanding on such date.

 

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2.08 Interest. (a) Subject to the provisions of subsection (b) below, (i) each
LIBOR Rate Loan shall bear interest on the outstanding principal amount thereof
for each Interest Period at a rate per annum equal to the Adjusted LIBOR Rate
for such Interest Period; and (ii) each Base Rate Committed Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Adjusted Base Rate.

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by Borrower under
any Loan Document is not paid following the expiration of any applicable grace
or cure period, whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders, such amount shall thereafter bear
interest from the date such payment was due (without regard to any applicable
grace or cure period) at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.09 Intentionally Deleted.

2.10 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by KeyBank’s “prime rate” shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and interest shall be made on the
basis of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year). Interest shall accrue on each Loan for the day on which the Loan is made,
and shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.07, bear interest for one
day. Each determination by Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.

2.11 Evidence of Debt. The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Agent in the ordinary course of business. The accounts or records maintained by
Agent and each Lender shall be conclusive absent manifest error of the amount of
the Credit Extensions made by Lenders to Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
Agent in respect of such matters, the accounts and records of Agent shall
control in the absence of manifest error. Upon the request of any Lender made
through Agent, Borrower shall execute and deliver to such Lender (through Agent)
a Term Note, which shall evidence such Lender’s Loans in addition to such
accounts or records. Each Lender may attach schedules to its Term Note and
endorse thereon the date, Type (if applicable), amount and maturity of its Loans
and payments with respect thereto.

 

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2.12 Payments Generally; Agent’s Clawback. (a) General. All payments to be made
by Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by Borrower hereunder shall be made to Agent, for the account of
the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than
12:00 noon on the date specified herein. Agent will promptly distribute to each
Lender its Applicable Percentage (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by Agent after 12:00 noon Cleveland, Ohio
time shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be. Any and all amounts
due hereunder or under the other Loan Documents which remain unpaid more than
ten (10) days after the date said amount was due and payable shall incur a fee
of four percent (4%) of said amount, which payment shall be in addition to all
of Lenders’ other rights and remedies under the Loan Documents, provided that no
late charge shall apply to the final payment of principal on the Maturity Date.

(b) Funding by Lenders; Presumption by Agent. Unless Agent shall have received
notice from a Lender prior to the proposed date of any Committed Borrowing of
LIBOR Rate Loans (or, in the case of any Committed Borrowing of Base Rate Loans,
prior to 12:00 p.m. on the date of such Committed Borrowing) that such Lender
will not make available to Agent such Lender’s share of such Committed
Borrowing, Agent may assume that such Lender has made such share available on
such date in accordance with Section 2.02 (or, in the case of a Committed
Borrowing of Base Rate Loans, that such Lender has made such share available in
accordance with and at the time required by Section 2.02) and may, in reliance
upon such assumption, make available to Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Committed
Borrowing available to Agent, then the applicable Lender and Borrower severally
agree to pay to Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to Borrower to but excluding
the date of payment to Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by Agent in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by Agent in
connection with the foregoing and (B) in the case of a payment to be made by
Borrower, the interest rate applicable to Base Rate Loans. If Borrower and such
Lender shall pay such interest to Agent for the same or an overlapping period,
Agent shall promptly remit to Borrower the amount of such interest paid by
Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to Agent, then the amount so paid shall constitute such
Lender’s Committed Loan included in such Committed Borrowing. Any payment by
Borrower shall be without prejudice to any claim Borrower may have against a
Lender that shall have failed to make such payment to Agent.

(c) Payments by Borrower; Presumptions by Agent. Unless Agent shall have
received notice from Borrower prior to the date on which any payment is due to
Agent for the account of the Lenders that Borrower will not make such payment,
Agent may assume that Borrower have made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to Lenders the
amount due. In such event, if Borrower have not in fact made such payment, then
each of Lenders severally agrees to repay to Agent forthwith on demand the
amount so distributed to such Lender, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to Agent, at the greater
of the Federal Funds Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation. A notice of Agent to any
Lender or Borrower with respect to any amount owing under this subsection
(b) shall be conclusive, absent manifest error.

(d) Failure to Satisfy Conditions Precedent. If any Lender makes available to
Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to Borrower
by Agent because the conditions to the applicable Credit Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof,
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(e) Obligations of Lenders Several. The obligations of Lenders hereunder to make
Committed Loans and to make payments under Section 10.04(c) are several and not
joint. The failure of any Lender

 

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to make any Committed Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Committed Loan, purchase its participation or to make its payment under
Section 10.04(c).

(f) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.13 Sharing of Payments. If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of the Committed Loans made by it, resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of such Committed
Loans or participations and accrued interest thereon greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify Agent of such fact, and (b) purchase (for cash at
face value) participations in the Committed Loans of the other Lenders, or make
such other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Committed Loans
and other amounts owing them, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by Borrower pursuant to and in accordance with the express terms of
this Agreement or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Committed Loans to any
assignee or participant, other than to Borrower, CNL HP or any Subsidiary
thereof (as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

2.14 Unencumbered Pool.

(a) Covenants. With respect to the Unencumbered Pool, so long as any Lender
shall have any Commitment hereunder, any Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, Borrower shall, and shall cause each Owner
to:

(i) Cause the Unencumbered Pool to include not less than twenty-five
(25) Eligible Unencumbered Properties with a minimum Unencumbered Pool Value of
$400,000,000.00;

(ii) Cause the portion of the Unencumbered Pool Value attributable to Eligible
Seniors Housing Properties and Eligible MOB Properties to be not less than
seventy-five percent (75%);

(iii) Cause not more than twenty-five percent (25%) of the Unencumbered Pool
Value to be derived from any one metropolitan statistical area;

(iv) Cause not more than twenty percent (20%) of the Unencumbered Pool Value to
be derived from any one Operator;

(v) Cause no single Pool Asset to exceed fifteen percent (15%) of the
Unencumbered Pool Value excluding the Pool Asset commonly known as “Legacy
Village” which may equal up to twenty percent (20%) of the Unencumbered Pool
Value;

 

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(vi) Maintain the weighted average (based upon each asset’s Unencumbered Pool
Value) remaining lease term for all Eligible MOB Properties, on an aggregate
basis, at a level of least two years;

(vii) Pool Two Properties shall not exceed seven and one-half percent (7.5%) of
the Unencumbered Pool Value; and

(viii) The Weighted Average Occupancy of the Pool One Properties must equal or
exceed eighty-five percent (85%) at all times.

If, as of the end of any calendar quarter, Borrower fails to meet any of the
foregoing covenants, Borrower may cure any such default by either (A) removing
one or more Pool Assets from the Unencumbered Pool (each such property an
“Ineligible Unencumbered Property”), (B) making a principal payment in
accordance with Section 2.05 in an amount attributable to the applicable
failure, or (C) to the extent the failure is related to clauses (ii), (iii),
(iv) or (v), reducing the Unencumbered Pool Value by an amount attributable to
the applicable failure, and, in either (A), (B) or (C), recalculating the
covenants and the Unencumbered Pool Value. Such recalculation and payment shall
be made within the time required for delivery of the then due Unencumbered Pool
Certificate as set forth in Section 6.02.

(b) Additions of Eligible Unencumbered Properties to the Unencumbered Pool.
Provided that no Default or Event of Default exists, Borrower shall have the
right, subject to the satisfaction of the conditions set forth below and upon
notice to Agent, to request the addition of an Eligible Unencumbered Property to
the Unencumbered Pool. Any request shall be subject to the following:

(i) Delivery by Borrower to Agent of such request in writing at least thirty
(30) days (or such other period approved by Agent) prior to the requested date
of applicable addition;

(ii) Delivery by Borrower to Agent of a pro forma Compliance Certificate and
Unencumbered Pool Certificate prepared using the financial statements of
Borrower most recently provided or required to be provided to Agent under
Section 6.01 evidencing compliance in all material respects with all covenants
and conditions related to the Unencumbered Pool after giving effect to the
applicable addition and shall certify that after giving effect to such addition,
no Default or Event of Default shall exist;

(iii) The Borrower shall, as a condition to such Eligible Unencumbered Property
being included as a Pool Asset, cause each applicable Material Subsidiary to
become a Guarantor hereunder in accordance with Section 6.16; and

(iv) Borrower shall pay all reasonable costs and expenses of Agent and its
counsel in connection with the applicable addition.

(c) Removal. Borrower shall have the right upon notice to Agent to remove a Pool
Asset from the Unencumbered Pool. Any request shall be subject to the following:

(i) Delivery by Borrower to Agent of such request in writing at least twenty
(20) days (or such shorter period approved by Agent) prior to the requested date
of release;

(ii) Delivery by Borrower to Agent of a pro forma Compliance and Unencumbered
Certificate prepared using the financial statements of Borrower most recently
provided or required to be provided to Agent under Section 6.01 evidencing
compliance in all material respects with all covenants and conditions related to
the Unencumbered Pool after giving effect to the applicable release and shall
certify that after giving effect to such release, no Default or Event of Default
shall exist; and

(iii) Borrower shall pay all reasonable costs and expenses of Agent and its
counsel in connection with the applicable release.

 

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Upon the release of any Pool Asset, Agent on behalf of the Lenders shall release
the applicable Owner or Tenant of such Pool Asset and any other Material
Subsidiary, which (after giving effect to the release of such Owner or Tenant)
owns no interest in any other Owner or Tenant of a Pool Asset, from their
respective Guaranty(s) and the obligations thereunder as well as any other Loan
Documents to which such Subsidiary or such Material Subsidiary is a party to.

(d) Ineligible Unencumbered Properties. If, at any time, a Pool Asset becomes an
Ineligible Unencumbered Property, Borrower shall promptly submit an updated
Compliance Certificate and Unencumbered Certificate after having given effect to
the removal of the applicable Ineligible Unencumbered Property from the
Unencumbered Pool and shall make any payments under Section 2.05 required in
connection with such recalculation at the time the applicable Unencumbered
Certificate is delivered.

2.15 Increase in Commitments.

(a) At any time prior to the Business Day immediately preceding the Term Loan
Maturity Date, the Borrower shall have the right, in consultation and
coordination with the Agent, to request (by written notice to the Agent), one or
more increases in the amount of the Term Loan Commitments (each such increase, a
“Term Loan Commitment Increase”), provided that;

(i) at the time of any such request and upon the effectiveness of any
Incremental Amendment referred to below and the date that such Term Loan
Commitment Increase becomes effective, no Default or Event of Default shall have
occurred and be continuing or would result therefrom;

(ii) all representations and warranties contained in this Agreement shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on the date that such Term Loan
Commitment Increase becomes effective (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on such date, except
that any representation and warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date;

(iii) the Borrower shall be in pro forma compliance with the covenants in
Section 6.12;

(iv) each Term Loan Commitment Increase shall be in a combined minimum principal
amount of $5,000,000;

(v) the aggregate amount of all Term Loan Commitment Increases made available
pursuant to this Section 2.15 shall not exceed $100,000,000; and

(vi) the Borrower shall have delivered to the Agent a certificate executed by a
Responsible Officer of the Borrower, certifying compliance with the requirements
of each of the preceding clauses (i) - (v).

(b) Each notice from Borrower pursuant to this Section 2.15 shall set forth the
requested amount and proposed terms of the relevant Term Loan Commitment
Increase.

(c) Term Loan Commitment Increases may be provided, by any existing Lender or by
any other Eligible Assignee (any such other bank or other financial institution
being called an “Additional Lender”), provided that no existing Lender shall be
obligated to provide any Term Loan Commitment Increase, unless it so agrees in
its sole discretion. Commitments in respect of Term Loan Commitment Increases
shall become Commitments (or in the case to be provided by an existing Lender,
an increase in such Lender’s applicable Commitment) under this Agreement
pursuant to an amendment (each, an “Incremental Amendment”) to this Agreement
and, as appropriate, the other Loan Documents, executed by the Borrower, each
existing Lender agreeing to provide such Commitment, if any, each Additional
Lender, if any, and the Agent. The Incremental Amendment may, without the
consent of any other Lenders, effect such amendments to this Agreement and the
other Credit Documents as may be necessary or appropriate, in the reasonable
opinion of the Agent and the Borrower, to effect the provisions of this
Section 2.15.

 

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(d) The effectiveness of any Incremental Amendment shall be subject to (i) the
delivery of an acknowledgement in form and substance reasonably satisfactory to
the Agent and executed by each Guarantor acknowledging that such Term Loan
Commitment Increases shall constitute (and be included in the definition of)
“Obligations” under each Guaranty of such Guarantor and (ii) the delivery by the
Credit Parties of such technical amendments, modifications and/or supplements to
the respective Loan Documents as are reasonably requested by the Administrative
Agent to ensure that such Term Loan Commitment Increases (and related
Obligations) are entitled to the benefits of the relevant Loan Documents.

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes. (a) Payments Free of Taxes. Any and all payments by Borrower to or
on account of any obligation of Borrower hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if Borrower shall be
required by any applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), Agent or any
applicable Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) Borrower shall make
such deductions, and (iii) Borrower shall timely pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.

(b) Payment of Other Taxes by Borrower. Without limiting the provisions of
subsection (a) above, Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law; provided, however,
Borrower shall have the right to contest any Other Taxes in good faith.

(c) Indemnification by Borrower. Borrower shall indemnify Agent and each Lender,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by
Agent, such Lender and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender (with a copy to Agent), or by Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower shall deliver to Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to Agent.

(e) Status of Lenders. Any Lender, if requested by Borrower or Agent, shall
deliver such documentation prescribed by applicable law or reasonably requested
by Borrower or Agent as will enable Borrower or Agent to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements.

(f) Treatment of Certain Refunds. If Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by Borrower or with respect to which Borrower have
paid additional amounts pursuant to this Section, it shall pay to Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that Borrower, upon the request of Agent or
such Lender, agrees to repay the amount paid over to Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to Agent or such Lender in the event Agent or such Lender is required
to repay such refund to such Governmental Authority. This subsection shall not
be construed to require Agent or any Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
Borrower or any other Person.

 

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3.02 Illegality. If any Lender reasonably determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund LIBOR
Rate Loans, or to determine or charge interest rates based upon the LIBOR Rate,
or any Governmental Authority has imposed material restrictions on the authority
of such Lender to purchase or sell, or to take deposits of, Dollars in the
London interbank market, then, on notice thereof by such Lender to Borrower
through Agent, any obligation of such Lender to make or continue LIBOR Rate
Loans or to convert Base Rate Committed Loans to LIBOR Rate Loans shall be
suspended until such Lender notifies Agent and Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
Borrower shall, upon demand from such Lender (with a copy to Agent), prepay or,
if all LIBOR Rate Loans can be converted to Base Rate Loans and Borrower so
elects, convert all LIBOR Rate Loans of such Lender to Base Rate Loans, either
on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such LIBOR Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such LIBOR Rate Loans. Upon any
such prepayment or conversion, Borrower shall also pay accrued interest on the
amount so prepaid or converted and all amounts due under Section 3.05 in
accordance with the terms thereof due to such prepayment or conversion.

3.03 Inability to Determine Rates. If Agent determines in connection with any
request for a LIBOR Rate Loan or a conversion to or continuation thereof that
(a) Dollar deposits are not being offered to banks in the London interbank
Eurodollar market for the applicable amount and Interest Period of such LIBOR
Rate Loan, (b) adequate and reasonable means do not exist for determining the
LIBOR Base Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan, or (c) the LIBOR Base Rate for any requested Interest Period
with respect to a proposed LIBOR Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, Agent will promptly so
notify Borrower and each Lender. Thereafter, the obligation of Lenders to make
or maintain LIBOR Rate Loans shall be suspended until Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of LIBOR Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate
Loans in the amount specified therein.

3.04 Increased Costs. (a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBOR Rate);

(ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any LIBOR Rate Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 3.01 and the imposition of, or any change in the
rate of, any Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or LIBOR Rate Loans made by such
Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender, or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender, Borrower will pay to such Lender such additional amount or amounts as
will compensate such Lender for such additional costs incurred or reduction
suffered.

(b) Capital Requirements. If any Lender reasonably determines that any Change in
Law affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by such Lender
to a level below that which such Lender or such Lender’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the

 

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policies of such Lender’s holding company with respect to capital adequacy and
liquidity), then from time to time Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or such Lender’s
holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to Borrower shall be conclusive absent manifest error. Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s right to demand such compensation, provided
that Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six (6) months prior to the date that such Lender
notifies Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof).

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to Agent)
from time to time, Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or

(b) any failure by Borrower (for a reason other than the failure of such Lender
to make a Loan) to prepay, borrow, continue or convert any Loan other than a
Base Rate Loan on the date or in the amount notified by Borrower; including any
loss of anticipated profits and any loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain such Loan or from fees
payable to terminate the deposits from which such funds were obtained. Borrower
shall also pay any customary and reasonable administrative fees charged by such
Lender in connection with the foregoing. For purposes of calculating amounts
payable by Borrower to Lenders under this Section 3.05, each Lender shall be
deemed to have funded each LIBOR Rate Loan made by it at the LIBOR Base Rate
used in determining the LIBOR Rate for such Loan by a matching deposit or other
borrowing in the London interbank Eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBOR Rate Loan was in fact so
funded.

3.06 Mitigation Obligations. If any Lender requests compensation under
Section 3.04, or Borrower are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
such Lender shall use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be,
in the future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred
by any Lender in connection with any such designation or assignment.

3.07 Survival. All of Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

 

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ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of each Lender to
make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

(a) Agent’s receipt of the following, each of which shall be originals or
electronically (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each dated
the Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to Agent and each of the Lenders:

(i) executed counterparts of this Agreement and the Guaranty, sufficient in
number for distribution to Agent, each Lender and each Loan Party;

(ii) the Term Notes;

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as Agent
may reasonably require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan
Party is a party;

(iv) such documents and certifications as Agent may reasonably require to
evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business
in each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification, except to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect;

(v) a favorable opinion of counsel to the Loan Parties reasonably acceptable to
Agent addressed to Agent and each Lender, as to the matters set forth concerning
the Loan Parties and the Loan Documents in form and substance reasonably
satisfactory to Agent;

(vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

(vii) a certificate signed by a Responsible Officer of Borrower certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably expected
to have, either individually or in the aggregate, a Material Adverse Effect;

(viii) evidence that all insurance required to be maintained pursuant to the
Loan Documents has been obtained and is in effect;

(ix) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of Borrower most recently ended prior to the Closing Date, signed by a
Responsible Officer of Borrower; and

(x) such other assurances, certificates, documents, consents or opinions as
Agent or the Required Lenders reasonably may require.

(b) Any fees required to be paid on or before the Closing Date shall have been
paid.

(c) Unless waived by Agent, Borrower shall have paid all reasonable fees,
charges and disbursements of counsel to Agent (directly to such counsel if
requested by Agent) to the extent invoiced prior to or on the Closing Date, plus
such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
Borrower and Agent).

 

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Without limiting the generality of the provisions of the last sentence of
Section 9.03(d), for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension is subject to the following conditions
precedent:

(a) The representations and warranties of Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct, in all material respects, on and as of the date of
such Credit Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct, in all material respects, as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) Agent shall have received a Request for Credit Extension in accordance with
the requirements hereof.

(d) Agent shall have received, in form and substance reasonably satisfactory to
it, such other assurances, certificates, documents or consents related to the
foregoing as Agent or the Required Lenders reasonably may require.

Each Request for Credit Extension submitted by Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

ARTICLE V. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Agent and the Lenders that:

5.01 Existence, Qualification and Power. Each Loan Party (a) is duly organized
or formed, validly existing and, as applicable, in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) execute, deliver and perform its obligations under the Loan Documents
to which it is a party, and (c) is duly qualified and is licensed and, as
applicable, in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license; except in each case referred to in
clause (b)(i), or (c), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.

 

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5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of CNL HP
and its consolidated Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of CNL HP and its consolidated Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheets of CNL HP and its consolidated
Subsidiaries dated June 30, 2015, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of each Borrower
and its consolidated Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses
(i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against Borrower, CNL HP or any Subsidiaries
thereof or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) except as specifically disclosed in
Schedule 5.06, either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect, and there has
been no adverse change in the status, or financial effect on any Loan Party, of
the matters described on Schedule 5.06.

5.07 No Default. No Loan Party is in default under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

5.08 Ownership of Property; Liens. Borrower, CNL HP and each Owner has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of each
Borrower and each Owner is subject to no Liens, other than Liens permitted by
Section 7.01.

5.09 Environmental Compliance. Borrower, CNL HP and each Owner conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

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5.10 Insurance. The properties of Borrower, CNL HP and each Owner are insured
with financially sound and reputable insurance companies not Affiliates of
Borrower or CNL HP, in such amounts (after giving effect to any self-insurance
compatible with the following standards), with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where Borrower, CNL HP or the
applicable Owner operates.

5.11 Taxes. Borrower, CNL HP and each Owner has filed all Federal, state and
other material tax returns and reports required to be filed, and has paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon it or its properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against Borrower, CNL HP or any Owner that would, if made, have a
Material Adverse Effect.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither Borrower nor CNL
HP or any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) no Borrower nor CNL
HP or any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

5.13 Subsidiaries. As of the Closing Date, neither Borrower nor CNL HP has any
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests of Borrower or CNL HP in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned, directly or indirectly, by Borrower or CNL HP in the amounts specified on
Part (a) of Schedule 5.13 free and clear of all Liens. Neither Borrower nor CNL
HP has any equity investments in any other corporation or entity other than
those specifically disclosed in Part(b) of Schedule 5.13. All of the outstanding
Equity Interests in Borrower or CNL HP have been validly issued and are fully
paid and nonassessable.

5.14 Margin Regulations; Investment Company Act.

(a) Neither Borrower nor CNL HP is engaged or will engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.

(b) None of the Borrower, CNL HP, any Person Controlling Borrower, CNL HP or any
Subsidiary of Borrower or CNL HP is, or is required to be registered as, an
“investment company” under the Investment Company Act of 1940.

 

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5.15 Disclosure. Borrower has disclosed to Agent and Lenders all agreements,
instruments and corporate or other restrictions to which it or any Loan Party is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of any Loan Party to Agent or any
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

5.16 Compliance with Laws. Each Loan Party is in compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or
(b) the failure to comply therewith, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

5.17 Taxpayer Identification Number. Borrower’s true and correct U.S. taxpayer
identification number is set forth on Schedule 10.02.

5.18 Intellectual Property; Licenses, Etc.. Borrower, CNL HP and each Owner own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person. To
the best knowledge of Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by Borrower, CNL HP or any Owner infringes upon any
rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of Borrower, threatened, which,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

5.19 Unencumbered Pool. Each Owner owns the applicable Pool Asset, free and
clear of any and all Liens in favor of third parties (other than Liens otherwise
permitted hereunder).

5.20 Solvency. As of the Closing Date, each of the Loan Parties will be Solvent.

5.21 OFAC. None of the Loan Parties: (i) is a Sanctioned Person, (ii) has any of
its assets in Sanctioned Entities, or (iii) derives any of its operating income
from investments in, or transactions with Sanctioned Persons or Sanctioned
Entities. The proceeds of any Loan will not be used and have not been used to
fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity. No Loan Party is
violation of any Anti-Terrorism Law or engaged in nor has it conspired to engage
in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law. No Loan Party (i) conducts any business or engages in making
or receiving any contribution of funds, goods or services to or for the benefit
of any Sanctioned Persons or Sanctioned Entities, or (ii) deals in, or otherwise
engages in any transaction relating to, any property or interests in property
blocked pursuant to the Executive Order No. 13224.

 

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ARTICLE VI. AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, Borrower and CNL HP
shall, and shall (except in the case of the covenants set forth in Sections
6.01, 6.02, and 6.03) cause each other Loan Party to:

6.01 Financial Statements. Deliver to Agent a sufficient number of copies for
delivery by Agent to each Lender, in form and detail satisfactory to Agent and
the Required Lenders:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of Borrower, the consolidated annual financial statements of CNL HP
as of the end of such fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit; and

(b) as soon as available, but in any event within 45 days after the end of each
of the first three quarters of each fiscal year of Borrower, the consolidated
quarterly financial statements of CNL HP, all in reasonable detail and prepared
in accordance with GAAP, unaudited and certified by an authorized officer of
Borrower; and

(c) within 45 days of the end of each quarter, internally prepared individual
financial statements, occupancy reports, and payor mix statistics of all Pool
Assets; and

(d) prior to December 31 of each year, annual forward-looking budgets for the
Borrower and the Pool Assets for next succeeding year; and

(e) federal tax returns of Borrower and CNL HP as soon as practical but in no
event later than 30 days after the filing thereof; and

(f) property cost reports and Department of Health surveys as requested.

6.02 Certificates; Other Information. Deliver to Agent a sufficient number of
copies for delivery by Agent to each Lender, in form and detail satisfactory to
Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default or, if any such
Default shall exist, stating the nature and status of such event;

(b) concurrently with the delivery of the financial statements referenced in
Section 6.01(a) and Section 6.01(b) above, a duly completed Unencumbered Pool
Certificate signed by the chief executive officer, chief financial officer,
treasurer or controller of Borrower;

(c) concurrently with the delivery of the financial statements referenced in
Section 6.01(a) and Section 6.01(b) above, a duly completed Compliance
Certificate signed by Responsible Officer of Borrower;

(d) promptly after any request by Agent or any Lender, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Borrower and CNL
HP by independent accountants in connection with the accounts or books of
Borrower, CNL HP or any Subsidiary of Borrower or CNL HP, or any audit of any of
them;

(e) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of Borrower and CNL HP, and copies of all annual, regular, periodic and special
reports and registration statements which Borrower or CNL HP may file or be
required to file with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to Agent pursuant hereto;

(f) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party pursuant to the
terms of any indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lenders pursuant to Section 6.01 or any other
clause of this Section 6.02;

 

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(g) promptly, and in any event within five (5) Business Days after receipt
thereof by any Loan Party, copies of each notice or other correspondence
received from the Securities and Exchange Commission (or comparable agency in
any applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party; and

(h) promptly, such additional information regarding the business, financial or
corporate affairs of Borrower or CNL HP, or compliance with the terms of the
Loan Documents, as Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Borrower post such documents, or provide a link thereto on Borrower’s website on
the Internet at the website address listed on Schedule 10.02; or (ii) on which
such documents are posted on Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and Agent have access (whether a
commercial, third-party website or whether sponsored by Agent); provided that:
(i) Borrower shall deliver paper copies of such documents to Agent or any Lender
that requests Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by Agent or such Lender and (ii) Borrower
shall notify Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

Borrower hereby acknowledges that (a) Agent will make available to Lenders
materials and/or information provided by or on behalf of Borrower hereunder
(collectively, “Borrower Materials”) by posting Borrower Materials on IntraLinks
or another similar electronic system (the “Platform”) and (b) certain of the
Lenders (each, a “Public Lender”) may have personnel who do not wish to receive
material non-public information with respect to Borrower, CNL HP or Affiliates
thereof or the respective securities of any of the foregoing, and who may be
engaged in investment and other market-related activities with respect to such
Persons’ securities. Borrower hereby agrees that (w) all Borrower Materials that
are to be made available to Public Lenders shall be clearly and conspicuously
marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” Borrower shall be deemed to have authorized Agent and the Lenders to
treat such Borrower Materials as not containing any material non-public
information with respect to Borrower or its securities for purposes of United
States Federal and state securities laws (provided, however, that to the extent
such Borrower Materials constitute Information, they shall be treated as set
forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Investor;” and (z) Agent shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.

6.03 Notices. Promptly notify Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of Borrower or any other Loan Party;
(ii) any dispute, litigation, investigation, proceeding or suspension between
Borrower or any other Loan Party and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting Borrower or any other Loan Party, including pursuant to any applicable
Environmental Laws, in each instance which resulted or could reasonably be
expected to result in a Material Adverse Effect;

(c) of the occurrence of any ERISA Event; and

(d) of any material change in accounting policies or financial reporting
practices by Borrower, CNL HP or any Subsidiary of Borrower or CNL HP.

 

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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of Borrower setting forth details of the occurrence referred
to therein and stating what action Borrower have taken and proposes to take with
respect thereto. Each notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by Borrower, CNL HP or such Owner; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

6.05 Preservation of Existence, Etc.. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of Borrower, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons and providing for not less than 30 days’ prior notice to
Agent of termination, lapse or cancellation of such insurance.

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, write, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of Borrower, CNL HP or such Owner, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over Borrower, CNL HP or such Owner, as the case may be. Borrower
shall maintain at all times books and records pertaining to the Unencumbered
Pool in such detail, form and scope as Agent or any Lender shall reasonably
require.

6.10 Inspection Rights. Permit representatives and independent contractors of
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of Borrower and
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to Borrower; provided,
however,

 

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that any such inspection shall not interfere with the use and occupancy of the
applicable property and when an Event of Default exists Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of Borrower at any time during normal business
hours and without advance notice.

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes not in contravention of any Law (including anti-corruption
Laws and sanctions) or of any Loan Document.

6.12 Financial Covenants.

(a) Maximum Leverage. Maintain at all times the Leverage Ratio at a level less
than or equal to 60%.

(b) Minimum Fixed Charge Coverage Ratio. Maintain at all times the Fixed Charge
Coverage Ratio at a level equal to or in excess of 1.50 to 1.0.

(c) Minimum Consolidated Net Worth. Not permit Consolidated Net Worth to be less
than $700,000,000.00 plus 80% of net equity capital proceeds raised after the
date of the Prior Credit Agreement.

(d) Maximum Cash Distribution Ratio. Not make cash distributions (net of any
distributions through the dividend reinvestment policy), as determined on an
aggregate rolling four fiscal quarter basis, in excess of (i) so long as no
Event of Default exists, the greater of (A) 95% of FFO or (B) the amount
required to be paid out to maintain REIT status, or (ii) during the existence of
an Event of Default, the amount required to be paid out to maintain REIT status.

(e) Maximum Secured Indebtedness. Maintain the ratio of Secured Indebtedness to
Gross Asset Value at a level equal to or less than: (i) 45% from July 1, 2015
through December 31, 2015; and (ii) 40% at all times thereafter.

(f) Maximum Secured Recourse Indebtedness. Maintain the ratio of Secured
Recourse Indebtedness to Gross Asset Value at a level equal to or less than 15%.

(g) Maximum Other Investments. Maintain the ratio of: (i) investments in
unimproved land to Gross Asset Value at a level equal to or less than 5%;
(ii) investments in mortgage notes to Gross Asset Value at a level equal to or
less than 10%; and (iii) investments in unimproved land, mortgage notes,
Development Properties and joint ventures in the aggregate to Gross Asset Value
at a level equal to or less than 25%.

(h) Unsecured Interest Coverage. Maintain the ratio of the Adjusted Net
Operating Income for all Pool Assets to Unsecured Interest Expense at a level
equal to or excess of 1.75 to 1.0.

Notwithstanding anything to the contrary, to the extent that Borrower or any of
the Guarantors enters into (or amends) any Unsecured Indebtedness subject to a
more restrictive version of any of the forgoing covenants, then the applicable
covenant as set forth herein shall be deemed amended to such more restrictive
level as of the effective date of the applicable financing and shall remain in
effect until such Unsecured Indebtedness is paid in full.

6.13 Unencumbered Pool Records. To execute and deliver promptly, and to cause
each other Loan Party to execute and deliver promptly, to Agent, from time to
time, solely for Agent’s convenience in maintaining a record of the Unencumbered
Pool, such written statements and schedules as Agent may reasonably require
designating, identifying or describing the Pool Assets.

6.14 Security Interests. To, and to cause each other Loan Party to, (a) defend
the Pool Assets against all claims and demands of all Persons at any time
claiming the same or any interest therein, and (b) do whatever Agent may
reasonably request, from time to time, to effect the purposes of this Agreement
and the other Loan Documents.

 

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6.15 Appraisals. Agent and/or the Required Lenders shall have the right to
obtain a new or updated Appraisal of any Pool Asset from time to time. Borrower
shall cooperate with Agent in this regard. If the Appraisal is obtained to
comply with any applicable law or regulatory requirement, or bank policy
promulgated to comply therewith, or an Event of Default exists, Borrower shall
pay for any such Appraisal upon Agent’s request.

6.16 Additional Guarantors. Notify Agent at the time that any Person becomes a
Material Subsidiary, and promptly thereafter (and in any event within 30 days),
cause such Person to (a) become a Guarantor by executing and delivering to Agent
a counterpart of the Guaranty or such other document as Agent shall deem
appropriate for such purpose, and (b) deliver to Agent documents of the types
referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to in
clause (a)), all in form, content and scope reasonably satisfactory to Agent.

ARTICLE VII. NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, neither Borrower nor
CNL HP shall, nor shall it permit any of its Subsidiary to, directly or
indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

(a) Liens granted by any Owner existing on the date hereof and not securing
Indebtedness;

(b) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

(d) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(e) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(f) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

(g) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(h) Liens securing Indebtedness permitted under Section 7.03(e); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition; and

(i) With respect to any Subsidiary that is not an Owner, Tenant or Material
Subsidiary or the assets of any such Subsidiary that is not an Owner, Tenant or
Material Subsidiary, Liens which individually or in the aggregate would not
reasonably be expected to result in a Material Adverse Effect.

 

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7.02 Investments. Make any Investments, except:

(a) Investments held by Borrower, CNL HP or any Subsidiary in the form of cash
equivalents or short-term marketable debt securities;

(b) Investments of Borrower or CNL HP in any wholly-owned Subsidiary thereof and
Investments of any wholly-owned Subsidiary in Borrower, CNL HP or in another
wholly-owned Subsidiary of Borrower or CNL HP;

(c) Investments of Borrower, CNL HP or any wholly-owned Subsidiary of Borrower
or CNL HP in any Person if after giving effect to such Investment, Borrower and
CNL HP are in compliance with Section 6.12(g) of this Agreement;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.03;

(f) Investments represented by Swap Contracts;

(g) Investment in secured notes, mortgages, deeds of trust, collateralized
mortgage obligation, or other secured debt instruments, provided that after
giving effect to Investment, Borrower are in compliance with Section 6.12(g) of
this Agreement;

(h) Investments consisting of inter-company Indebtedness in the ordinary course
of business;

(i) Investments in a Person, if as a result such Person is merged, consolidated
or amalgamated with or into, or transfer or coveys substantially all of its
assets to, or is liquidated into, a Borrower or a Guarantor; and

(j) with respect to any Subsidiary that is not an Owner or Tenant, Investments
which individually or in the aggregate would not reasonably be expected to
result in a Material Adverse Effect.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness under the Loan Documents;

(b) Guarantees by or from Borrower, CNL HP or any Subsidiary in respect of
Indebtedness otherwise permitted hereunder;

(c) obligations (contingent or otherwise) of Borrower, CNL HP or any Subsidiary
thereof existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

 

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(d) Indebtedness in respect of capital leases, Synthetic Lease Obligations and
purchase money obligations for fixed or capital assets within the limitations
set forth in Section 7.01(i).

(e) Indebtedness existing as of the date of this Agreement;

(f) with respect to any Subsidiary that is not an Owner or Tenant, Indebtedness
which individually or in the aggregate would not reasonably be expected to
result in a Material Adverse Effect; and

(g) Indebtedness permitted under Sections 6.12(e), (f) and (i).

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person (in each instance, a “Corporate
Transaction”), except that, so long as no Default exists or would result
therefrom:

(a) any Subsidiary of Borrower or CNL HP may merge with (i) Borrower or CNL HP,
provided that Borrower or CNL HP shall be the continuing or surviving Person, or
(ii) any one or more other Subsidiaries of Borrower or CNL HP, provided that
when any wholly-owned Subsidiary of Borrower or CNL HP is merging with another
such Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person;

(b) any Subsidiary of Borrower or CNL HP may Dispose of all or substantially all
of its assets (upon voluntary liquidation or otherwise) to Borrower, CNL HP or
to another Subsidiary of Borrower or CNL HP; provided that if the transferor in
such a transaction is a wholly-owned Subsidiary of Borrower or CNL HP, then the
transferee must either be Borrower, CNL HP or a wholly-owned Subsidiary thereof;
and

(c) any Corporate Transaction shall be permitted provided the same does not
result in a Change of Control.

7.05 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) any Corporate Transaction that does not result in a Change of Control;

(c) Dispositions of equipment or other personal property to the extent the same
is promptly replaced with equipment or other personal property of similar
utility, value and quality;

(d) Disposition permitted by Section 7.04;

(e) Dispositions made in connection with the sale, transfer or conveyance of a
Pool Asset; provided Borrower complies with the provisions of Section 2.14(c)
with respect to the removal of such Pool Asset from the Unencumbered Pool; and

(f) with respect to any Subsidiary that is not an Owner or Tenant and the assets
of any such Subsidiary that is not an Owner or Tenant, any Dispositions made in
the ordinary course of business.

provided, however, that any such Disposition shall be for fair market value.

7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or issue or sell any Equity Interests (other than publicly traded shares of CNL
HP, which are expressly permitted hereby), except for Restricted Payments
necessary and required to be made in order for CNL HP to maintain its REIT
status and except that, so long as no Default shall have occurred and be
continuing at the time of any action described below or would result therefrom:

(a) each Subsidiary of Borrower or CNL HP may make Restricted Payments to
Borrower, any Guarantor and any other Person that owns an Equity Interest in
such Subsidiary, ratably according to their respective holdings of the type of
Equity Interest in respect of which such Restricted Payment is being made;

 

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(b) Borrower, CNL HP and each Subsidiary thereof may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person; and

(c) Borrower, CNL HP and each Subsidiary thereof may purchase, redeem or
otherwise acquire Equity Interests issued by it with the proceeds received from
the substantially concurrent issue of new shares of its common stock or other
common Equity Interests.

7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by Borrower, CNL
HP and the Subsidiaries thereof on the date hereof or any business substantially
related or incidental thereto.

7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of Borrower or CNL HP, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
Borrower, CNL HP or such Subsidiary as would be obtainable by such Person at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that the foregoing restriction shall not apply to
transactions between or among Borrower and any Guarantor or between and among
Guarantors.

7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement, any other Loan Document, any Indebtedness permitted under
Section 7.03g, any Guarantee permitted by Section 7.03(b) hereof or, with
respect to any Subsidiary that is not an Owner, any Contractual Obligation
entered into by such Subsidiary in connection with any Lien, Investment,
Indebtedness or Disposition permitted hereunder) that (a) limits the ability
(i) of any Subsidiary of Borrower or CNL HP to make Restricted Payments to
Borrower or CNL HP or to otherwise transfer property to Borrower or CNL HP,
(ii) of any Subsidiary of Borrower or CNL HP to Guarantee the Indebtedness of
Borrower or (iii) of Borrower, CNL HP or any Subsidiary thereof to create,
incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iii) shall not prohibit any negative pledge incurred
or provided in favor of any holder of Indebtedness permitted under
Section 7.03(f) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

7.11 Leasing Restrictions. Without the prior written consent of Agent, neither
Borrower, nor any Owner or Tenant, shall (i) lease any Pool Asset to a single
tenant (each herein referred to as a “Triple Net Lease”), or (ii) modify or
amend any existing Triple Net Lease to the extent that such amendment or
modification includes one or more of the following: (a) reduction of rent
(including waiving any rent payments); (b) reduction of term, (c) modification
to the obligor, and (d) other material changes that may impact the value of the
asset. In connection with the foregoing, Agent shall respond by approving or
disapproving the lease within ten (10) days after receipt of the copy from
Borrower. Agent’s failure to approve or disapprove the lease within that period
shall constitute approval of the lease. Borrower shall pay all reasonable costs
incurred by Agent in connection with Agent’s review and approval of tenant
leases, including reasonable attorneys’ fees and costs.

7.12 OFAC. No Loan Party shall (a) directly or through its Affiliates and
agents, conduct any business or engage in any transaction or dealing with any
Sanctioned Persons or Sanctioned Entities, including the making or receiving of
any contribution of funds, goods or services to or for the benefit of any
Sanctioned Persons or Sanctioned Entities, (b) directly or through its
Affiliates and agents, deal in, or otherwise engage in any transaction

 

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relating to, any property or interests in property blocked pursuant to the
Executive Order No. 13224; (c) directly or through its Affiliates and agents,
engage in or conspire to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law; or (d) fail to deliver to any
Lender any certification or other evidence requested from time to time by such
Lender, confirming the compliance of the Loan Parties with this section.

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
three (3) days after the same becomes due, any interest on any Loan, or
(iii) within five (5) days after written notice, any other amount due and
payable hereunder or under any other Loan Document; or

(b) Specific Covenants. Borrower or any other Loan Party fails to perform or
observe any term, covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05, 6.10, 6.11, 6.12 or 6.13 or Article VII; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days (provided, however, if such Loan Party has undertaken to
cure in good faith such default within such 30 day period and the same cannot be
reasonably cured within such 30 day period, such Loan Party shall have an
additional 60 day period to cure such default) or any default or Event of
Default occurs under any other Loan Document; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
when made or deemed made; or

(e) Cross-Default. A default occurs and is not cured within any applicable grace
or cure period to (i) any recourse indebtedness (including any guarantees) of
Borrower or any Guarantor, provided, that the aggregate amount outstanding under
any such indebtedness is in excess of $5,000,000, and the applicable lender or
lenders has sent notices of default and acceleration in connection therewith or
(ii) any non-recourse indebtedness (including any guarantees) of Borrower or any
Guarantor, provided, that the amount outstanding under any such indebtedness is
in excess of $25,000,000 in any one instance or $50,000,000.00 in the aggregate,
and the applicable lender or lenders has sent notices of default and
acceleration in connection therewith; provided, however, there shall be no Event
of Default with respect to any default arising under this Section 8.01(e) during
any period during which the applicable lender or lenders forbear exercising
their rights and remedies with respect to the applicable default; or

(f) Insolvency Proceedings, Etc. Any Loan Party institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 90
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 90 calendar
days, or an order for relief is entered in any such proceeding; or

 

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(g) Inability to Pay Debts; Attachment. (i) Borrower or any Loan Party becomes
unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

(h) Judgments. There is entered against Borrower or any Loan Party (i) one or
more final judgments or orders for the payment of money in an aggregate
outstanding amount (as to all such outstanding and unpaid judgments or orders)
exceeding the $5,000,000.00 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) Borrower or any Loan Party have not paid and satisfied
in full the applicable judgment or order within thirty (30) days of entry,
(B) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (C) there is a period of 15 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower or CNL HP under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the
$5,000,000.00, or (ii) Borrower, CNL HP or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of the Threshold
Amount; or

(j) Invalidity of Loan Documents. Any Loan Party contests in any manner the
validity or enforceability of any Loan Document or any provision thereof; or any
Loan Party denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any Loan Document or
any provision thereof; or

(k) Environmental. Failure to remediate within the time period permitted by law
or governmental order (or within a reasonable period of time given the nature of
the matter if no specific time has been given) any environmental problems which
would reasonably be expected to result in a Material Adverse Effect, related to
properties whose aggregate book value are in excess of $15,000,000.00 after all
administrative hearings and appeals have been concluded; or

(l) Change of Control. There occurs any Change of Control with respect to
Borrower or CNL HP; or

(m) Prior Credit Agreement. There occurs any event of default under the Prior
Credit Agreement, beyond any applicable grace or notice and cure period.

(n) REIT Status. CNL HP fails to maintain its status as a real estate investment
trust; or

(o) Material Adverse Effect. There occurs any event or circumstance that has a
Material Adverse Effect.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, Agent shall, at the request of, or may, with the consent of, the
Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Borrower; and

(c) exercise on behalf of itself, the Lenders all rights and remedies available
to it and the Lenders under the Loan Documents;

 

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provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable
without further act of Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to Agent (including fees and time charges for attorneys
who may be employees of Agent) and amounts payable under Article III) payable to
Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to
Lenders [including fees, charges and disbursements of counsel to the respective
Lenders (including fees and time charges for attorneys who may be employees of
any Lender) and amounts payable under Article III], ratably among them in
proportion to the respective amounts described in this clause Second payable to
them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations, ratably among Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among Lenders in proportion to the respective
amounts described in this clause Fourth held by them;

Fifth, to Agent for the account of any Lender or any Affiliate of a Lender for
any amount owed by a Loan Party under any Swap Contract between any Loan Party
and such Lender or affiliate of any Lender; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Law.

ARTICLE IX. ADMINISTRATIVE AGENT

9.01 Appointment and Authorization of Administrative Agent.

(a) Each of the Lenders hereby irrevocably appoints KeyBank to act on its behalf
as Administrative Agent hereunder and under the other Loan Documents and
authorizes Agent to take such actions on its behalf and to exercise such powers
as are delegated to Agent by the terms hereof and thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of Agent and the Lenders, and no Borrower nor
any other Loan Party shall have rights as a third party beneficiary of any of
such provisions.

(b) Agent shall also act as the “collateral agent” under the Loan Documents, and
each of the Lenders hereby irrevocably appoints and authorizes Agent to act as
the agent of such Lender for purposes of acquiring, holding and enforcing any
and all liens on collateral granted by any of the Loan Parties to secure any of
the Obligations, together with such powers and discretion as are reasonably
incidental thereto.

9.02 Rights as a Lender. The Person serving as Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires,

 

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include the Person serving as Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with Borrower, CNL HP or any Subsidiary thereof or other
Affiliate thereof as if such Person were not Agent hereunder and without any
duty to account therefor to Lenders.

9.03 Exculpatory Provisions. Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable Law;

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Borrower, CNL HP or any Affiliates thereof
that is communicated to or obtained by the Person serving as Agent or any of its
Affiliates in any capacity; and

(d) shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Sections
8.02 and 10.01) or (ii) in the absence of its own gross negligence or willful
misconduct. Agent shall not be deemed to have knowledge of any Default unless
and until written notice describing such Default is given to Agent by Borrower,
a Lender. Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to Agent.

9.04 Reliance by Administrative Agent. Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan that
by its terms must be fulfilled to the satisfaction of a Lender, Agent may
presume that such condition is satisfactory to such Lender unless Agent shall
have received notice to the contrary from such Lender prior to the making of
such Loan. Agent may consult with legal counsel (who may be counsel for
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

9.05 Delegation of Duties. Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub agents appointed by Agent. Agent and any such sub
agent may perform any and all of its duties and exercise its rights and powers
by or through their respective Related Parties. The exculpatory provisions of
this Article shall apply to any such sub agent and to the Related Parties of
Agent and any such sub agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

 

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9.06 Resignation by Agent. Agent may at any time give notice of its resignation
to Lenders and Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with Borrower, to appoint
a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may on behalf of Lenders, appoint a
successor Agent meeting the qualifications set forth above; provided that if
Agent shall notify Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by Agent on
behalf of the Lenders under any of the Loan Documents, the retiring Agent shall
continue to hold such collateral security until such time as a successor Agent
is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor Agent as
provided for above in this Section. Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Agent, and the retiring Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this Section). The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After the retiring Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

9.07 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc.. Anything herein to the contrary notwithstanding, no
Lender holding a title listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as Agent or a Lender
hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, Agent (irrespective of whether the principal of any
Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of Lenders and Agent (including any claim
for the reasonable compensation, expenses, disbursements and advances of
Lenders, Agent and their respective agents and counsel and all other amounts due
Lenders and Agent under Section 10.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same.

Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to Agent and, in the event that Agent shall consent
to the making of such payments directly to Lenders, to pay to Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of
Agent and its agents and counsel, and any other amounts due Agent under
Section 10.04. Nothing contained herein shall be deemed to authorize Agent to
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consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize Agent to vote in respect of the
claim of any Lender in any such proceeding.

9.10 Joint Lead Arranger, Documentation Agent and Syndication Agent.

The titles “Joint Lead Arranger”, “Documentation Agent” and “Co-Syndication
Agent” are, in each case, in name only, and shall confer no rights or
obligations under this Agreement.

ARTICLE X. MISCELLANEOUS

10.01 Amendments, Etc.. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and Borrower or the applicable Loan Party, as the
case may be, and acknowledged by Agent, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall:

(a) waive any condition set forth in Section 4.01(a) without the written consent
of each Lender; provided, however, in the sole discretion of Agent, only a
waiver by Agent shall be required with respect to immaterial matters or items
specified in Section 4.01(a)(iii) or (iv) with respect to which Borrower have
given assurances satisfactory to Agent that such items shall be delivered
promptly following the Closing Date;

(b) increase the Aggregate Commitments beyond $100,000,000.00, provided that no
Lender’s Commitment can be increased (or reinstated if terminated pursuant to
Section 8.02) without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or any fees or other amounts payable hereunder or under any other Loan
Document, without the written consent of each Lender directly affected thereby;
provided, however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of Borrower to pay interest at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
to reduce any fee payable hereunder;

(e) change either Section 2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by Agent in addition to the Lenders required above, affect
the rights or duties of Agent under this Agreement or any other Loan Document.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of
all Lenders or each affected Lender may be effected with the consent of the
applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased, reinstated or extended
without the written consent of such Defaulting Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the written consent of such Defaulting Lender.

 

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10.02 Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by electronic mail address as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

(i) if to Borrower or Agent, to the address, electronic mail address or
telephone number specified for such Person on Schedule 10.02 ; and

(ii) if to any other Lender, to the address, electronic mail address or
telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received. Notices
delivered through electronic communications to the extent provided in subsection
(b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Agent, provided that the foregoing shall not apply to notices to any Lender
pursuant to Article II if such Lender has notified the Agent that it is
incapable of receiving notices under such Article by electronic communication.
Agent or Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications. Unless Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM BORROWER MATERIALS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH BORROWER MATERIALS OR THE PLATFORM. In no event shall Agent or
any of its Related Parties (collectively, the “Agent Parties”) have any
liability to Borrower, CNL HP, any Lender or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) arising out of Borrower’s or Agent’s transmission of Borrower
Materials through the Internet, except to the extent that such losses, claims,
damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to Borrower, CNL HP,
any Lender or any other Person for indirect, special, incidental, consequential
or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Borrower or Agent may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each other Lender may change its address, electronic
mail address or telephone number for notices and other communications hereunder
by notice to Borrower and Agent. In addition, each Lender agrees to notify Agent
from time to time to

 

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ensure that Agent has on record (i) an effective address, contact name,
telephone number, and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.
Furthermore, each Public Lender agrees to cause at least one individual at or on
behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable Law, including
United States Federal and state securities Laws, to make reference to Borrower
Materials that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to Borrower or its securities for purposes of United States Federal
or state securities laws.

(e) Reliance by Agent and Lenders. Agent and the Lenders shall be entitled to
rely and act upon any notices (including telephonic Committed Loan Notices)
purportedly given by or on behalf of Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
Borrower shall indemnify Agent, each Lender and the Related Parties of each of
them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of
Borrower. All telephonic notices to and other telephonic communications with
Agent may be recorded by Agent, and each of the parties hereto hereby consents
to such recording. The foregoing shall not exculpate Agent or any Lender from
its gross negligence or willful misconduct.

10.03 No Waiver; Cumulative Remedies. No failure by any Lender or Agent to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Borrower shall pay (i) all reasonable out of pocket
expenses incurred by Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all out of pocket expenses
incurred by Agent or any Lender (including the fees, charges and disbursements
of any counsel for Agent or any Lender), and shall pay all fees and time charges
for attorneys who may be employees of Agent or any Lender, in connection with
the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loans made hereunder, including all such out of
pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans.

(b) Indemnification by Borrower. Borrower shall indemnify Agent (and any
sub-agent thereof), each Lender and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who
may be employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by Borrower or any other Loan Party
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder, or the consummation of
the transactions contemplated hereby or thereby, or, in the case of Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use
of the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Borrower, CNL
HP or any Owner, or any Environmental Liability related in any way to Borrower,
CNL HP, any Owner or any Tenant, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract,

 

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tort or any other theory, whether brought by a third party or by Borrower or any
other Loan Party, and regardless of whether any Indemnitee is a party thereto IN
ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are determined
by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee, or
(y) result from a claim brought by Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Loan Document, if Borrower or such Loan Party has obtained a
final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that Borrower for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section
to be paid by it to Agent (or any sub-agent thereof) or any Related Party of any
of the foregoing, each Lender severally agrees to pay to Agent (or any such
sub-agent) or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for Agent (or any such sub-agent) in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.10(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, neither Borrower shall assert, and each Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
Agent, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of
Borrower is made to Agent or any Lender, or Agent or any Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to Agent upon demand
its applicable share (without duplication) of any amount so recovered from or
repaid by Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from
time to time in effect. The obligations of the Lenders under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

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10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Borrower nor any
other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance with
the provisions of subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender no minimum amount need be
assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of Agent and, so long as no Event of Default
has occurred and is continuing, Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been met;

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender
or an Affiliate of a Lender; and

(B) the consent of Agent (such consent not to be unreasonably withheld or
delayed) shall be required if such assignment is to a Person that is not a
Lender or an Affiliate of such Lender.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to Agent an Assignment and Assumption, together with a processing and
recordation fee in the amount of

 

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$3,500.00; provided, however, that the Agent may, in its sole discretion, elect
to waive such processing and recordation fee in the case of any assignment. The
assignee, if it is not a Lender, shall deliver to Agent an Administrative
Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to Borrower, CNL
HP or any of the Affiliates or Subsidiaries of Borrower or CNL HP.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon
request, each Borrower (at its expense) shall execute and deliver a Term Note to
the assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection
(d) of this Section.

(c) Register. Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and Borrower,
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, Borrower or Agent, sell participations to any Person (other than a
natural person or Borrower, CNL HP or any Affiliate or Subsidiary of Borrower or
CNL HP) (each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) Borrower, Agent, and the Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that affects such
Participant. Subject to subsection (e) of this Section, Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with Borrower’s prior written consent.

 

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(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Term Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act or any other similar state laws based on the Uniform
Electronic Transactions Act.

(h) Deemed Consent of Borrower. If the consent of Borrower to an assignment to
an Eligible Assignee is required hereunder (including a consent to an assignment
which does not meet the minimum assignment threshold specified in
Section 10.06(b)(i)(B)), Borrower shall be deemed to have given their consent
five Business Days after the date notice thereof has been delivered to Borrower
by the assigning Lender (through Agent) unless such consent is expressly refused
by Borrower prior to such fifth Business Day.

(i) Termination of Defaulting Lender. The Borrower may terminate the unused
amount of the Commitment of any Lender that is a Defaulting Lender upon not less
than fifteen (15) Business Days’ prior notice to the Agent (which shall promptly
notify the Lenders thereof), and in such event the provisions of the Defaulting
Lender Waterfall shall apply to all amounts thereafter paid by the Borrower for
the account of such Defaulting Lender under this Agreement (whether on account
of principal, interest, fees, indemnity or other amounts); provided that (i) no
Event of Default shall have occurred and be continuing, and (ii) such
termination shall not be deemed to be a waiver or release of any claim the
Borrower, the Agent or any Lender may have against such Defaulting Lender.

10.07 Treatment of Certain Information; Confidentiality. Each of Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to each Borrower and its obligations, (g) with the consent of Borrower
or (h) to the extent such Information (x) becomes publicly available other than
as a result of a breach of this Section or (y) becomes available to Agent, any
Lender or any of their respective Affiliates on a nonconfidential basis from a
source other than Borrower. For purposes of this Section, “Information” means
all information received from Borrower, CNL HP or any Subsidiary thereof
relating to Borrower, CNL HP or any Subsidiary thereof or any of their
respective businesses, other than any such information that is available to
Agent or any Lender on a nonconfidential basis prior to disclosure by Borrower,
CNL HP or any Subsidiary thereof, provided that, in the case of information
received from Borrower, CNL HP or any Subsidiary thereof after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Each of Agent and the Lenders acknowledges that
(a) the Information may include material non-public information concerning
Borrower, CNL HP or a Subsidiary thereof, as the case may be, (b) it has
developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws.

 

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10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, or
any such Affiliate to or for the credit or the account of Borrower or any other
Loan Party against any and all of the obligations of Borrower or such Loan Party
now or hereafter existing under this Agreement or any other Loan Document to
such Lender or any such Affiliate, irrespective of whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and
although such obligations of Borrower or such Loan Party may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or their respective Affiliates may have. Each Lender agrees to
notify Borrower and Agent promptly after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If Agent or any Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to Borrower. In determining whether the interest contracted
for, charged, or received by Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by Agent and when Agent shall have received counterparts hereof that,
when taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by Agent and
each Lender, regardless of any investigation made by Agent or any Lender or on
their behalf and notwithstanding that Agent or any Lender may have had notice or
knowledge of any Default at the time of any Credit Extension, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.13 Governing Law; Jurisdiction; Etc..

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF OHIO.

 

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(b) SUBMISSION TO JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF OHIO SITTING IN CUYAHOGA COUNTY AND
OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF OHIO, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH OHIO STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT OR ANY LENDER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.14 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.15 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
Borrower and each other Loan Party acknowledges and agrees and acknowledges its
Affiliates’ understanding that that: (i) (A) the services regarding this
Agreement provided by Agent are arm’s-length commercial transactions between
Borrower, each other Loan Party and their respective Affiliates, on the one
hand, and Agent, on the other hand, (B) Borrower and the other Loan Parties have
consulted their own legal, accounting, regulatory and tax advisors to the extent
they have deemed appropriate, and (C) Borrower and each other Loan Party is
capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents; (ii) (A) Agent is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary, for Borrower, any
other Loan Party, or any of their respective Affiliates, or any other Person and
(B) Agent does not have any obligation to Borrower, any other Loan

 

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Party or any of their Affiliates with respect to the transaction contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) Agent and its Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of Borrower, the
other Loan Parties and their respective Affiliates, and Agent has no obligation
to disclose any of such interests to Borrower, any other Loan Party of any of
their respective Affiliates. To the fullest extent permitted by law, Borrower
and the other Loan Parties hereby waive and release, any claims that it may have
against Agent with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated
hereby.

10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and Agent (for itself and not on behalf of any 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”), it is required to obtain, verify and record information that identifies
Borrower or CNL HP, which information includes the name and address of each
Borrower and other information that will allow such Lender or Agent, as
applicable, to identify each Borrower in accordance with the Act.

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

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

 

TERM LOAN AGREEMENT   Page 58

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWER: CHP PARTNERS, LP, a Delaware limited partnership By:   CHP GP, LLC, a
Delaware limited liability company, General Partner   By:   CNL Healthcare
Properties, Inc., a Maryland corporation, Managing Member     By:  

 

      Henry E. Moorhead, Vice President

 

STATE OF TEXAS    )    : COUNTY OF DALLAS    )

I, the undersigned, a Notary Public in and for said County in said State, hereby
certify that Henry E. Moorhead, whose name as Vice President of CNL Healthcare
Properties, Inc., a Maryland corporation, the Managing Member of CHP GP, LLC, a
Delaware limited liability company, the General Partner of CHP PARTNERS, LP, a
Delaware limited partnership, is signed to the foregoing instrument, and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he as such Vice President and with full authority,
executed the same voluntarily for and as the act of said corporation on the day
the same bears date. Given under my hand and official seal this 16th day of
November, 2015.

 

 

Notary Public My Commission Expires:  

 

 

Borrower’s Signature Page

to

Term Loan Agreement

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

AGENT: KEYBANK NATIONAL ASSOCIATION, as Administrative Agent By:  

 

  Jonathan Slusher, Assistant Vice President

 

Agent’s Signature Page

to

Term Loan Agreement

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

LENDERS: KEYBANK NATIONAL ASSOCIATION By:  

 

  Jonathan Slusher, Assistant Vice President

 

KeyBank’s Signature Page

to

Term Loan Agreement

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

BANK OF AMERICA, N.A. By:  

 

Name:  

 

Title:  

 

 

Bank of America’s Signature Page

to

Term Loan Agreement

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

JPMORGAN CHASE BANK, N.A. By:  

 

Name:  

 

Title:  

 

 

JP Morgan’s Signature Page

to

Term Loan Agreement

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

SUNTRUST BANK By:  

 

Name:  

 

Title:  

 

 

Suntrust Bank’s Signature Page

to

Term Loan Agreement

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

FIFTH THIRD BANK By:  

 

  Brad J. Boersma, Vice President

 

Fifth Third Bank’s Signature Page

to

Term Loan Agreement

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

COMERICA BANK By:  

 

Name:  

 

Title:  

 

 

Comerica Bank’s Signature Page

to

Term Loan Agreement

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

THE HUNTINGTON NATIONAL BANK By:  

 

Name:  

 

Title:  

 

 

Huntington National Bank’s Signature Page

to

Term Loan Agreement

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

SEASIDE NATIONAL BANK & TRUST By:  

 

Name:  

 

Title:  

 

 

Seaside National Bank’s Signature Page

to

Term Loan Agreement

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

WHITNEY BANK By:  

 

Name:  

 

Title:  

 

 

Whitney Bank’s Signature Page

to

Term Loan Agreement

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

EASTERN BANK By:  

 

Name:  

 

Title:  

 

 

Eastern Bank’s Signature Page

to

Term Loan Agreement

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

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

 

Lender

   Term Commitment      Applicable Percentage  

KeyBank National Association

   $ 40,500,000.00         15.57692308 % 

Bank of America, N.A.

   $ 40,000,000.00         15.38461538 % 

JPMorgan Chase Bank, N.A.

   $ 40,000,000.00         15.38461538 % 

SunTrust Bank

   $ 40,000,000.00         15.38461538 % 

Fifth Third Bank

   $ 40,000,000.00         15.38461538 % 

Whitney Bank

   $ 20,000,000.00         7.69230769 % 

The Huntington National Bank

   $ 20,000,000.00         7.69230769 % 

Eastern Bank

   $ 10,000,000.00         3.84615385 % 

Comerica Bank

   $ 5,000,000.00         1.92307692 % 

Seaside National Bank & Trust

   $ 4,500,000.00         1.73076923 % 

Total

   $ 260,000,000.00         100.000000000000 % 

 

SCHEDULE 2.01   Page 1

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

SCHEDULE 5.06

LITIGATION

NONE.

 

SCHEDULE 5.06   Page 1

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

SCHEDULE 5.09

ENVIRONMENTAL MATTERS

NONE

 

SCHEDULE 5.09   Page 1

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

SCHEDULE 5.13

SUBSIDIARIES

AND OTHER EQUITY INVESTMENTS

AND EQUITY INTERESTS IN BORROWER/CNL HP

Part (a). Subsidiaries.

 

Subsidiary:

  

Percentage Ownership by Borrower/CNL HP:

CHP 959 Lane CA MOB Owner, LLC

   100%

CHP 971 Lane CA MOB Owner, LLC

   100%

CHP Abilene TX Holding GP, LLC

   100%

CHP Abilene TX Holding, LP

   100%

CHP Abilene TX MOB GP, LLC

   100%

CHP Abilene TX MOB Owner, LP

   100%

CHP Albuquerque NM Owner, LLC

   100%

CHP Albuquerque NM Tenant Corp.

   100%

CHP Anderson IN Senior Living Owner, LLC

   100%

CHP Auburn WA Owner, LLC

   100%

CHP Auburn WA Tenant Corp.

   100%

CHP Austin TX Holding GP, LLC

   100%

CHP Austin TX Holding, LP

   100%

CHP Austin TX Owner GP, LLC

   100%

CHP Austin TX Senior Living Owner, LP

   100%

CHP Austin TX Tenant Corp.

   100%

CHP Batesville Healthcare Owner, LLC

   100%

CHP Bay Medical CA MOB Owner, LLC

   100%

CHP Beaumont Lending, LLC

   100%

CHP Beaumont TX Surgical Owner, LLC

   100%

CHP Beaverton OR Owner, LLC

   100%

CHP Beaverton OR Tenant Corp.

   100%

CHP Bend-High Desert OR Owner, LLC

   100%

CHP Bend-High Desert OR Tenant Corp.

   100%

CHP Bend OR MOB Owner, LLC

   100%

CHP Billings MT Owner, LLC

   100%

CHP Billings MT Tenant Corp.

   100%

CHP Birmingham AL MOB Owner, LLC

   100%

CHP Boise ID Owner, LLC

   100%

CHP Boise ID Tenant Corp.

   100%

CHP Broadway Healthcare Owner, LLC

   100%

CHP Calvert MOB Owner, LLC

   100%

CHP Cary NC MOB Owner, LLC

   100%

CHP Cascadia Partners I, LLC

   75% [CHP/Cascadia JV]

CHP Central Wing Annex MOB Owner, LLC

   100%

CHP Chapel Hill NC MOB Owner, LLC

   100%

CHP Chestnut Commons OH MOB Owner, LLC

   100%

CHP Chula Vista CA MOB Owner, LLC

   100%

CHP Cincinnati OH MOB Owner, LLC

   100%

CHP Claremont Holding, LLC

   100%

CHP Claremont CA Owner, LLC

   100%

CHP Clyde NC MOB Owner, LLC

   100%

CHP Columbia MO Plaza 1 MOB Owner, LLC

   100%

CHP Columbia MO Plaza 2 MOB Owner, LLC

   100%

CHP Columbia MO Plaza 4 MOB Owner, LLC

   100%

CHP Columbia SC Owner, LLC

   100%

 

SCHEDULE 5.13   Page 1

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

CHP Columbia SC Tenant Corp.

   100%

CHP Coral Springs FL MOB Owner, LLC

   100%

CHP Corvallis-West Hills OR Owner, LLC

   100%

CHP Corvallis-West Hills OR Tenant Corp.

   100%

CHP Cypress Partners I, LLC

   90% [CHP/Cypress JV]

CHP Duluth GA Senior Living Owner, LLC

   100%

CHP Dunkirk MOB Owner, LLC

   100%

CHP Durham NC MOB Owner, LLC

   100%

CHP Escondido CA MOB Owner, LLC

   100%

CHP Frederick MD-Liberty MOB Owner, LLC

   100%

CHP Frederick MD-Patriot MOB Owner, LLC

   100%

CHP Glendale CA MOB Owner, LLC

   100%

CHP GP, LLC

   100%

CHP Grand Junction CO Senior Living, LLC

   100%

CHP Grayson GA Owner, LLC

   100%

CHP Grayson GA Tenant Corp.

   100%

CHP Greenville SC Owner, LLC

   100%

CHP Greenville SC Owner, LLC

   100%

CHP Gresham-Huntington Terrace OR Owner, LLC

   100%

CHP Gresham-Huntington Terrace OR Tenant Corp.

   100%

CHP Gulf Breeze FL Senior Living Owner, LLC

   100%

CHP Gulf Breeze FL Tenant Corp.

   100%

CHP Henderson NV Pavilion IV MOB Owner, LLC

   100%

CHP Henderson NV Pavilion V MOB Owner, LLC

   100%

CHP Henderson NV Pavilion VI MOB Owner, LLC

   100%

CHP Hospital Holding, LLC

   100%

CHP Houston TX Hospital Land Owner, LLC

   100%

CHP Houston TX Hospital Owner, LLC

   100%

CHP Houston TX MOB Owner, LLC

   100%

CHP Huntersville NC MOB Owner, LLC

   100%

CHP Huntersville NC MOB Parent, LLC

   100%

CHP Hurst TX Surgical Owner, LLC

   100%

CHP Idaho Falls ID Owner, LLC

   100%

CHP Idaho Falls ID Tenant Corp.

   100%

CHP Isle at Cedar Ridge TX Owner, LLC

   100%

CHP Isle at Cedar Ridge TX Tenant Corp.

   100%

CHP Isle at Watercrest-Bryan TX Owner, LLC

   100%

CHP Isle at Watercrest-Bryan TX Tenant Corp.

   100%

CHP Isle at Watercrest-Mansfield TX Owner, LLC

   100%

CHP Isle at Watercrest-Mansfield TX Tenant Corp.

   100%

CHP Jacksonville FL MOB Owner, LLC

   100%

CHP Jasper AL Owner, LLC

   100%

CHP Jasper AL Tenant Corp.

   100%

CHP Jefferson Commons Condo MOB Owner, LLC

   100%

CHP Jonesboro Healthcare Owner, LLC

   100%

CHP JV SL Development Holding, LLC

   100%

CHP Katy TX Member, LLC

   100%

CHP Knoxville Plaza A MOB Owner, LLC

   100%

CHP Knoxville Plaza B MOB Owner, LLC

   100%

CHP Knoxville TN MOB Owner, LLC

   100%

CHP Knoxville TN MOB Parent, LLC

   100%

CHP Lake Zurich IL Owner, LLC

   100%

CHP Lake Zurich IL Tenant Corp.

   100%

CHP Lancaster OH Senior Living Owner, LLC

   100%

CHP Las Vegas NV Rehab Owner, LLC

   100%

CHP Layton UT Owner, LLC

   100%

 

SCHEDULE 5.13   Page 2

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

CHP Layton UT Tenant Corp.

   100%

CHP Leawood KS MOB Owner, LLC

   100%

CHP Legacy Ranch TX Owner, LLC

   100%

CHP Legacy Ranch TX Tenant Corp.

   100%

CHP Lincoln Plaza AZ MOB Owner, LLC

   100%

CHP Longview-Monticello Park WA Owner, LLC

   100%

CHP Longview-Monticello Park WA Tenant Corp.

   100%

CHP Magnolia Healthcare Owner, LLC

   100%

CHP Maplewood MN Owner, LLC

   100%

CHP Maplewood MN Tenant Corp.

   100%

CHP Margate FL Medical Arts Owner, LLC

   100%

CHP Margate FL Medical Park Owner, LLC

   100%

CHP Marietta GA Senior Living Owner, LLC

   100%

CHP Matthews NC MOB Owner, LLC

   100%

CHP Matthews NC MOB Parent, LLC

   100%

CHP Meadows Place TX Holding GP, LLC

   100%

CHP Meadows Place TX Holding, LP

   100%

CHP Meadows Place TX Owner GP, LLC

   100%

CHP Meadows Place TX Senior Living Owner, LP

   100%

CHP Meadows Place TX Tenant Corp.

   100%

CHP Medford-Arbor Place OR Owner, LLC

   100%

CHP Medford-Arbor Place OR Tenant Corp.

   100%

CHP Medical Arts MOB Owner, LLC

   100%

CHP MetroView-Charlotte NC MOB Owner, LLC

   100%

CHP MetroView-Charlotte NC MOB Parent, LLC

   100%

CHP Midtown-Charlotte NC MOB Owner, LLC

   100%

CHP Midtown-Charlotte NC MOB Parent, LLC

   100%

CHP Mine Creek Healthcare Owner, LLC

   100%

CHP Mishawaka IN Rehab Owner, LLC

   100%

CHP MOB Holding, LLC

   100%

CHP NC Specialty Hospital Owner, LLC

   100%

CHP NC-GA MOB Parent, LLC

   100%

CHP Newburyport MA MOB Owner, LLC

   100%

CHP NNN Development Holding, LLC

   100%

CHP North Mountain AZ MOB Owner, LLC

   100%

CHP Novi MI MOB Owner, LLC

   100%

CHP O’Fallon MO Owner, LLC

   100%

CHP O’Fallon MO Tenant Corp.

   100%

CHP Oklahoma City OK Rehab Owner, LLC

   100%

CHP Oxford NC MOB Owner, LLC

   100%

CHP Panama City FL Owner, LLC

   100%

CHP Panama City FL Tenant Corp.

   100%

CHP Park at Plainfield IL Owner, LLC

   100%

CHP Park at Plainfield IL Tenant Corp.

   100%

CHP Partners, LP

   100%

CHP Presbyterian-Charlotte NC MOB Owner, LLC

   100%

CHP Presbyterian-Charlotte NC MOB Parent, LLC

   100%

CHP Raider Ranch TX Owner, LLC

   100%

CHP Raider Ranch TX Senior Housing Owner, LLC

   100%

CHP Raider Ranch TX Tenant Corp.

   100%

CHP Rome GA MOB Owner, LLC

   100%

CHP Roxboro NC MOB Owner, LLC

   100%

CHP Salem-Orchard Heights OR Owner, LLC

   100%

CHP Salem-Orchard Heights OR Tenant Corp.

   100%

CHP Salem-Southern Hills OR Owner, LLC

   100%

CHP Salem-Southern Hills OR Tenant Corp.

   100%

 

SCHEDULE 5.13   Page 3

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

CHP San Antonio TX Holding GP, LLC

   100%

CHP San Antonio TX Holding, LP

   100%

CHP San Antonio TX MOB GP, LLC

   100%

CHP San Antonio TX MOB Owner, LP

   100%

CHP Santa Monica CA MOB Owner, LLC

   100%

CHP Searcy Healthcare Owner, LLC

   100%

CHP Senior Living Net Lease Holding, LLC

   100%

CHP Shorewood WI Owner, LLC

   100%

CHP Shorewood WI Tenant Corp.

   100%

CHP SL Development Holding, LLC

   100%

CHP SL Owner Holding I, LLC

   100%

CHP SL Owner Holding II, LLC

   100%

CHP South Bay Partners I, LLC

   95% [CHP/South Bay JV]

CHP Sparks NV Owner, LLC

   100%

CHP Sparks NV Tenant Corp.

   100%

CHP Spivey I Jonesboro GA MOB Owner, LLC

   100%

CHP Spivey II Jonesboro GA MOB Owner, LLC

   100%

CHP Springs TX Owner, LLC

   100%

CHP Springs TX Tenant Corp.

   100%

CHP Surprise AZ Rehab Owner, LLC

   100%

CHP Tega Cay SC Owner, LLC

   100%

CHP Tega Cay SC Tenant Corp.

   100%

CHP Tillamook-Five Rivers OR Owner, LLC

   100%

CHP Tillamook-Five Rivers OR Tenant Corp.

   100%

CHP Town Village OK Owner, LLC

   100%

CHP Town Village OK Tenant Corp.

   100%

CHP TRS Development Holding, LLC

   100%

CHP TRS Holding, Inc.

   100%

CHP Tualatin-Riverwood OR Owner, LLC

   100%

CHP Tualatin-Riverwood OR Tenant Corp.

   100%

CHP Vancouver-Bridgewood WA Owner, LLC

   100%

CHP Vancouver-Bridgewood WA Tenant Corp.

   100%

CHP Watercrest at Bryan TX Owner, LLC

   100%

CHP Watercrest at Bryan TX TRS Corp.

   100%

CHP Watercrest at Katy TX Owner, LLC

   95% [100% Owned by CHP/South Bay JV]

CHP Watercrest at Katy TX TRS Corp.

   95% [100% Owned by CHP/South Bay JV]

CHP Watercrest at Mansfield Holding, LLC

   100%

CHP Watercrest at Mansfield TX Owner, LLC

   100%

CHP Watercrest at Mansfield TX TRS Corp.

   100%

CHP Wausau WI Senior Living Owner, LLC

   100%

CHP Westville IN MOB Owner, LLC

   100%

CHP Yakima WA II JV Member, LLC

   100%

CHP Yakima WA II Owner, LLC

   75% [100% Owned by CHP/Cascadia JV]

CHP Yakima WA II Tenant Corp.

   75% [100% Owned by CHP/Cascadia JV]

CHP Yakima WA Owner, LLC

   100%

CHP Yakima WA Tenant Corp.

   100%

CHP Yelm-Rosemont WA Owner, LLC

   100%

CHP Yelm-Rosemont WA Tenant Corp.

   100%

CHP Yuma AZ MOB Member, LLC

   90% [100% Owned by CHP/Cypress JV]

CHP Yuma AZ MOB Owner, LLC

   100%

CHT Aberdeen SD Senior Living, LLC

   100%

CHT Acworth GA Owner, LLC

   100%

CHT Acworth GA Tenant Corp.

   100%

CHT Billings MT Senior Living, LLC

   100%

CHT Brookridge Heights MI Owner, LLC

   100%

CHT Brookridge Heights MI Tenant Corp.    

   100%

 

SCHEDULE 5.13   Page 4

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

CHT Casper WY Senior Living, LLC

   100%

CHT Council Bluffs IA Senior Living, LLC

   100%

CHT Curry House MI Owner, LLC

   100%

CHT Curry House MI Tenant Corp.

   100%

CHT Decatur IL Senior Living, LLC

   100%

CHT Grand Island NE Senior Living, LLC

   100%

CHT Harborchase Assisted Living Owner, LLC

   100%

CHT Harborchase TRS Tenant Corp.

   100%

CHT Lima OH Senior Living, LLC

   100%

CHT Mansfield OH Senior Living, LLC

   100%

CHT Marion OH Senior Living, LLC

   100%

CHT SL IV Holding, LLC

   100%

CHT Symphony Manor MD Owner, LLC

   100%

CHT Symphony Manor MD Tenant Corp.

   100%

CHT Tranquility at Fredericktowne MD Owner, LLC

   100%

CHT Tranquility at Fredericktowne MD Tenant Corp.

   100%

CHT Windsor Manor AL Holding, LLC

   100%

CHT Woodholme Gardens MD Owner, LLC

   100%

CHT Woodholme Gardens MD Tenant Corp.

   100%

CHT Zanesville OH Senior Living, LLC

   100%

CHT GCI Partners I, LLC

   75% [CHP/Windsor JV]

CHT Windsor Manor TRS Corp.

   75% [100% Owned by CHP/Windsor JV]

Grinnell IA Assisted Living Owner, LLC

   75% [100% Owned by CHP/Windsor JV]

Grinnell IA Assisted Living Tenant, LLC

   75% [100% Owned by CHP/Windsor JV]

Indianola IA Assisted Living Owner, LLC

   75% [100% Owned by CHP/Windsor JV]

Indianola IA Assisted Living Tenant, LLC

   75% [100% Owned by CHP/Windsor JV]

Nevada IA Assisted Living Owner, LLC

   75% [100% Owned by CHP/Windsor JV]

Nevada IA Assisted Living Tenant, LLC

   75% [100% Owned by CHP/Windsor JV]

Vinton IA Assisted Living Owner, LLC

   75% [100% Owned by CHP/Windsor JV]

Vinton IA Assisted Living Tenant, LLC

   75% [100% Owned by CHP/Windsor JV]

Webster City IA Assisted Living Owner, LLC

   75% [100% Owned by CHP/Windsor JV]

Webster City IA Assisted Living Tenant, LLC

   75% [100% Owned by CHP/Windsor JV]

Part (b). Other Equity Investments. None

 

SCHEDULE 5.13   Page 5

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

SCHEDULE 10.02

ADMINISTRATIVE AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES

BORROWER:

CHP Partners, LP

c/o CNL Healthcare Properties, Inc.

450 South Orange Avenue

Orlando, Florida 32801

Attention: Kevin R. Maddron, Senior Vice President and Chief Financial Officer

Attention: Holly J. Greer, Esq., Senior Vice President and General Counsel

Telephone:   (407) 540-7519 (Maddron); and (407) 540-7546 (Greer)
Electronic Mail:   kevin.maddron@cnl.com; holly.greer@cnl.com

U.S. Taxpayer Identification Number: 27-2963394

With a copy to:

Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

215 N. Eola Drive

Orlando, Florida 32801

Attention: Peter Luis Lopez, Esq.

Telephone:   (407) 418-6277 Electronic Mail:   Peter.Lopez@lowndes-law.com

 

SCHEDULE 10.02   Page 1

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

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

KeyBank National Association

127 Public Square

Cleveland, Ohio 44114

Attention: Brandon Taseff

Telephone: (216) 689-4968

Telecopier: (216) 689-5970

Electronic Mail: Brandon_Taseff@KeyBank.com

Account No.:

Ref:                     

ABA# 026009593

Other Notices as Administrative Agent:

KeyBank National Association

4910 Tiedeman Road, 3rd Floor

Brooklyn, Ohio 44144

Attention: Amy L. MacLearie

Telephone: (216) 813-6935

Telecopier: (216) 357-6383

Electronic Mail: amy_l_maclearie@keybank.com

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

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:             ,         

 

To: KeyBank National Association, as Agent

Ladies and Gentlemen:

Reference is made to that certain Term Loan Agreement, dated as of
[            ,         ] (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among
[                                        , a
                                        ] (the “Borrower”), the Lenders from
time to time party thereto, and KeyBank National Association, as Administrative
Agent.

The undersigned hereby requests (select one):

A Borrowing of Committed Loans A conversion or continuation of Committed Loans

 

  1. On                      (a Business Day).

 

  2. In the amount of $        .

 

  3. Comprised of                                                          .

[Type of Committed Loan requested]

 

  4. For LIBOR Rate Loans: with an Interest Period of          months.

The Committed Borrowing, if any, requested herein complies with the provisos to
the first sentence of Section 2.01 of the Agreement.

 

BORROWER

By:

 

 

Name:

 

 

Title:

 

 

 

A-1

Form of Committed Loan Notice

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

EXHIBIT B

FORM OF TERM NOTE

 

$           

FOR VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to
             or registered assigns (“Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the principal amount of each Loan
from time to time made by the Lender to Borrower under that certain Term Loan
Agreement, dated as of [            ,             ] (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among Borrower, the Lenders from time to time party thereto, and KeyBank
National Association, as Administrative Agent.

Borrower promises to pay interest on the unpaid principal amount of each Loan
from the date of such Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Agreement. All payments of
principal and interest shall be made to Agent for the account of the Lender in
Dollars in immediately available funds at the Administrative Agent’s Office. If
any amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.

This Note is one of the Term Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. No amount borrowed hereunder and repaid may be
reborrowed. This Note is unsecured. Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.

Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF OHIO.

 

[BORROWER] By:  

 

Name:  

 

Title:  

 

 

B-1

Form of Term Note

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

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date    Type of Loan
Made    Amount of
Loan Made    End of
Interest
Period    Amount of
Principal or
Interest Paid
This Date    Outstanding
Principal
Balance This
Date    Notation
Made by                                                                        
                                                                                
                                                                                
                                                                                
                                                                                
                 

 

B-2

Form of Term Note

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

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

 

To: KeyBank National Association, as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Term Loan Agreement, dated as of
[            ,         ] (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among CHP PARTNERS, LP, a
Delaware limited partnership (“Borrower”), each lender from time to time party
hereto (collectively, “Lenders” and individually, a “Lender”), and KEYBANK
NATIONAL ASSOCIATION, a national banking association, as Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                          of Borrower, and that, as
such, he/she is authorized to execute and deliver this Certificate to Agent on
the behalf of Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Borrower has delivered the year-end audited financial statements required
by Section 6.01(a) of the Agreement for the fiscal year of Borrower ended as of
the above date, together with the report and opinion of an independent certified
public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Borrower has delivered the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of Borrower ended as of
the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of each Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of Borrower
during the accounting period covered by such financial statements.

3. A review of the activities of Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period Borrower performed and observed all its Obligations
under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period, Borrower
performed and observed each covenant and condition of the Loan Documents
applicable to it, and no Default has occurred and is continuing.]

—or—

[to the best knowledge of the undersigned, during such fiscal period, the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default and its nature and status:]

 

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Form of Compliance Certificate

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4. The representations and warranties of Borrower contained in Article V of the
Agreement, and/or any representations and warranties of Borrower or any other
Loan Party that are contained in any document furnished at any time under or in
connection with the Loan Documents, are true and correct on and as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Compliance
Certificate, the representations and warranties contained in subsections (a) and
(b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Agreement, including the statements in connection with which
this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
            ,         .

 

[BORROWER] By:  

 

Name:  

 

Title:  

 

 

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Form of Compliance Certificate

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For the Quarter/Year ended                      (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

 

I.   Section 6.12(a) – Leverage Ratio.      A.   CNL HP’s consolidated Total
Indebtedness at Statement Date:   $                   B.   Gross Asset Value at
Statement Date:   $                   C.   Leverage Ratio: (Line 1.A. divided
Line 1.B.)   $                   D.   Maximum Permitted Leverage Ratio:   $
                  E.   Compliance: Yes/No   II.   Section 6.12(b) – Fixed Charge
Coverage Ratio.      A.   EBITDA       1.   consolidated net income:   $
                    2.   plus income tax expense:   $                     3.  
plus interest expense:   $                     4.   plus depreciation and
amortization:   $                     5.   plus acquisition and closing costs
and extraordinary or non-recurring gains and losses:   $                     6.
  plus other non-cash items:   $                     7.   plus the applicable
Person’s share of the EBITDA of its unconsolidated Affiliates and Subsidiaries:
  $                     8.   Total Consolidated EBITDA:   $                   B.
  Consolidated Fixed Charges       1.   consolidated interest expense:   $
                    2.   plus the current portion of principal paid or payable
with respect to the Total Indebtedness of CNL HP:   $                     3.  
plus all preferred distributions paid during the period:   $                    
4.   plus the current portion of capitalized lease obligations:   $             
       5.   Total Fixed Charges:   $                

 

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Form of Compliance Certificate

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  C.   Ratio (Line II.A.8 ÷ Line II.B.5):              to 1.0      D.   Minimum
Required Fixed Coverage Charge Ratio:              to 1.0      E.   Compliance:
Yes/No   III.   Section 6.12(c) – Minimum Consolidated Net Worth.      A.  
Consolidated Net Worth at Statement Date:       1.   shareholders’ equity at
Statement Date:   $                     2.   plus accumulated depreciation and
amortization as of such date:   $                     3.   less all intangible
assets (excluding those related to value of leases from real estate
acquisitions) plus intangible liabilities as of such date:   $                  
  4.   Total Consolidated Net Worth   $                   B.   Minimum Required
Consolidated Net Worth:       1.   $            .00 :   $                     2.
  plus 80% of net equity capital proceeds raised since December 19, 2014:   $
                    Minimum Required Consolidated Net Worth: (III.B.1 plus
III.B.2):   [$              ]    C.   Compliance: Yes/No   IV.   Section 6.12(d)
– Minimum Cash Distribution Ratio.      A.   Total cash distributions as of
Statement Date (net of any distributions through dividend reinvestment policy):
  $                   B.   FFO   $                   C.   Cash Distribution
Ratio (Line V.A ÷ Line V.B):          %    Maximum Permitted:     95 %    D.  
Compliance: Yes/No   V.   Section 6.12(e) – Maximum Secured Indebtedness Ratio.
     A.   Borrower’s total Secured Indebtedness   $                   B.  
Borrower’s Gross Asset Value   $                   C.   Ratio (Line V.A ÷ Line
V.B):          % 

 

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Form of Compliance Certificate

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VI.   Section 6.12(f) – Maximum Secured Recourse Debt.      A.   Borrower’s
total secured recourse debt:   $                   B.   Gross Asset Value   $
                  C.   Ratio (Line VI.A ÷ Line VI.B):          %    Maximum
Permitted     15 %    D.   Compliance: Yes/No   VII.   Section 6.12(g) – Maximum
Other Investments.      A.   Other Investments       1.   Unimproved land:   $
                    2.   plus Development Properties:   $                     3.
  plus mortgage notes:   $                     4.   Total Other Investments:   $
                  B.   Gross Asset Value:   $                   C.   Ratios:
(Line VII. A.1 to Line VII B) (Line VII A.3 to Line VII.B) (Line VII.A.4 ÷ Line
VII.B)    

 

 

    

    

    

% 

% 

% 

  Maximum Permitted:    

 

 

5

10

25

% 

% 

% 

  D.   Compliance: Yes/No   VIII.   Section 6.12(h) – Unsecured Interest
Coverage.      A.   Adjusted NOI for the applicable period:   $                
  B.   Unsecured Interest Expense for the applicable period:   $                
  C.   Unsecured Interest Coverage (Line VIII.A÷VIII.B):   $                  
Minimum Required:     1.75 to 1.0      D.   Compliance: Yes/No  

 

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Form of Compliance Certificate

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EXHIBIT D

FORM

OF

ASSIGNMENT AND ASSUMPTION

[THIS EXHIBIT D IS A KEYBANK PREFERENCE OR POLICY. Do not alter without the
approval of the Legal Department and Commercial Agency Management.]

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each] Assignor identified in item 1 below ([the][each, an] “Assignor”) and
[the][each] Assignee identified in item 2 below ([the][each, an] “Assignee”).
[It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees] hereunder are several and not joint.]. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Term Loan Agreement identified below (the “Loan Agreement”), receipt of a copy
of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Loan Agreement, as of the Effective Date inserted by Agent as
contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights
and obligations in [its capacity as a Lender][their respective capacities as
Lenders] under the Loan Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
[the Assignor][the respective Assignors] under the respective facilities
identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of [the
Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] against any Person, whether known or unknown,
arising under or in connection with the Loan Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as, [the][an] “Assigned
Interest”). Each such sale and assignment is without recourse to [the][any]
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by [the][any] Assignor.

1. Assignor[s]:                     

2. Assignee[s]:                      for each Assignee, indicate Affiliate of
[identify Lender]]

3. Borrower(s):                     

4. Administrative Agent: KeyBank National Association, as the administrative
agent under the Loan Agreement

5. Loan Agreement: [Term Loan Agreement, dated as of                     , among
                    , the Lenders from time to time party thereto, KeyBank
National Association, as Administrative Agent]

6. Assigned Interest[s]:

 

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Form of Assignment and Assumption Agreement

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Assignor[s]

   Assignee[s]    Facility
Assigned    Aggregate
Amount of
Commitment/Loans
for all Lenders      Amount of
Commitment/Loans
Assigned      Percentage
Assigned of
Commitment/Loans     CUSIP
No.          $                    $                           %             $
                   $                           %             $                
   $                           %   

[7. Trade Date:                     ]

Effective Date:             , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

  Title: ASSIGNEE [NAME OF ASSIGNEE] By:  

 

  Title:

 

[Consented to and] Accepted:

KeyBank National Association, as

  Administrative Agent

By:  

 

  Title: [Consented to:] By:  

 

  Title:

 

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Form of Assignment and Assumption Agreement

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Loan Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.06(b)(iii),(v) and
(vi) of the Loan Agreement (subject to such consents, if any, as may be required
under Section 10.06(b)(iii) of the Loan Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Loan Agreement as a
Lender thereunder and, to the extent of [the][the relevant] Assigned Interest,
shall have the obligations of a Lender thereunder, and (iv) it is sophisticated
with respect to decisions to acquire assets of the type represented by
[the][such] Assigned Interest and either it, or the Person exercising discretion
in making its decision to acquire [the][such] Assigned Interest, is experienced
in acquiring assets of such type, (v) it has received a copy of the Loan
Agreement, and has received or has been accorded the opportunity to receive
copies of the most recent financial statements delivered pursuant to Section
[    ] thereof, as applicable, and such other documents and information as it
deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest
,and (vi) it has independently and without reliance upon Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest; and (b) agrees that
(i) it will, independently and without reliance upon Agent, [the][any] Assignor
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, Agent shall make all payments in
respect of [the][each] Assigned Interest (including payments of principal,
interest, fees and other amounts) to [the][the relevant] Assignor for amounts
which have accrued to but excluding the Effective Date and to [the][the
relevant] Assignee for amounts which have accrued from and after the Effective
Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of
                     [confirm that choice of law provision parallels the Loan
Agreement].

 

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Form of Assignment and Assumption Agreement

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EXHIBIT E

FORM OF UNENCUMBERED POOL CERTIFICATE

KeyBank National Association, as Agent

127 Public Square

Cleveland, Ohio 44114

Attention: Brandon Taseff

 

  RE: CHP PARTNERS, LP

Ladies and Gentlemen:

The undersigned is the                      of CHP Partners, LP, a Delaware
limited partnership (“Borrower”), and is authorized to execute and deliver this
Unencumbered Pool Certificate on behalf of Borrower pursuant to the Term Loan
Agreement, dated as of November 19, 2015 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among Borrower,
each lender from time to time party hereto (collectively, “Lenders” and
individually, a “Lender”), and KEYBANK NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent. Capitalized terms used but not defined
herein shall have the meanings specified in the Loan Agreement.

The Borrower hereby delivers this Unencumbered Pool Certificate to you pursuant
to Section 6.02(b) of the Loan Agreement and in connection therewith hereby
certifies to the Agent as follows:

 

  (a) The Borrower are furnishing to you herewith the Unencumbered Pool
Certificate. This certificate is submitted in compliance with requirements of
the Agreement.

 

  (b) The Unencumbered Pool analyses and information set forth on Schedule 1
attached hereto are true and accurate, in all material respects, on and as of
the date of this Certificate.

 

  (c) The undersigned officer is executing and delivering this certificate
solely in his or her capacity as an authorized officer of the Borrower, and not
individually (and therefore is not subject to personal liability on account of
the certifications set forth herein), and is providing the attached information
to demonstrate compliance.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Borrowing Base Certificate for and on behalf of the Borrower as of             ,
201    .

 

BORROWER: CHP PARTNERS, LP, a Delaware limited partnership By:  

 

Name:  

 

Title:  

 

 

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Form of Unencumbered Pool Certificate

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SCHEDULE A

UNENCUMBERED POOL CALCULATION

 

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Form of Unencumbered Pool Certificate