Exhibit 10.7
Loan No. 94-0954263
PROMISSORY NOTE
$32,300,000.00
Wisconsin
December 21, 2007
     FOR VALUE RECEIVED NNN Eastern Wisconsin Medical Portfolio, LLC, a Delaware
limited liability company (“Borrower”), having its principal place of business
at c/o Triple Net Properties, 1551 N. Tustin Avenue, Suite 300, Santa Ana,
California 92705 promises to pay to the order of PNC Bank, National Association
(“Lender”), at the following address: 10851 Mastin, Suite 300, Overland Park,
Kansas 66210, or such other place as the holder hereof may from time to time
designate in writing, the principal sum of Thirty Two Million Three Hundred
Thousand and No/100 Dollars ($32,300,000.00) in lawful money of the United
States of America, with interest thereon to be computed from the date of
disbursement under this Promissory Note (the “Note”) at the Applicable Interest
Rate (hereinafter defined), and to be paid in installments as follows:

  A.   A payment, on the date of disbursement, representing interest from the
date of disbursement through the last day of the calendar month in which such
disbursement is made;     B.   An interest-only payment, representing interest
for the immediately preceding calendar month, on the first day of February, 2008
and on the first day of each calendar month thereafter up to and including the
first day of January, 2013;     C.   A constant payment of $203,309.03 (based
upon an amortization schedule assuming a 360 day year consisting of 12 months of
30 days each) on the first day of February, 2013 and on the first day of each
calendar month thereafter up to and including the first day of December, 2017;
and     D.   The balance of said principal sum, all unpaid interest thereon and
all other amounts owed pursuant to this Note, the Security Instrument
(hereinafter defined), the Other Security Documents (hereinafter defined), or
otherwise in connection with the loan evidenced by this Note shall be due and
payable on the first day of January, 2018 (the “Maturity Date”).

All payments to be made by Borrower to Lender shall be deemed received by Lender
only upon Lender’s actual receipt of same.
     1. Applicable Interest Rate. Interest accruing on the principal sum of this
Note shall be calculated based upon a per annum interest rate divided by
360 days resulting in a per diem interest amount that will accrue for each
calendar day in a year of 365 days (366 days in a leap year). The term
“Applicable Interest Rate” as used in this Note shall mean, from the date of
this Note through and including the Maturity Date, a rate of six and forty-six
hundredths percent (6.46%) per annum.
     2. Application. All payments on this Note shall be applied at any time and
from time to time in the following order: (i) the payment or reimbursement of
any expenses (including but not limited to late charges), costs or obligations
(other than the principal hereof and interest hereon) for which Borrower shall
be obligated or Lender entitled pursuant to the provisions hereof or of the
Security Instrument or the Other Security Documents, (ii) the payment of accrued
but unpaid interest thereon, (iii)

 

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the payment of unpaid escrow amounts required herein, in the Security Instrument
or in the Other Security Documents, and (iv) the payment of all or any portion
of the principal balance then outstanding hereunder, in either the direct or
inverse order of maturity, at Lender’s option.
     3. Late Charge. If any part of the Debt (hereinafter defined) is not
actually received by Lender by close of business on the fifth (5th) day after
the date on which it was due, Borrower shall pay to Lender an amount (the “Late
Charge”) equal to the lesser of five percent (5%) of such unpaid portion of the
missed payment or the maximum amount permitted by applicable law, to defray the
expenses incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. All
such Late Charges shall be automatically due and payable without notice or
demand and shall be secured by the Security Instrument and the Other Security
Documents.
     4. Security; Defined Terms; Incorporation by Reference. This Note is
secured by the Security Instrument and the Other Security Documents. The term
“Security Instrument” as used in this Note shall mean either the Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing, or the
Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture
Filing, executed and delivered by Borrower contemporaneously with this Note and
which secures the Debt. The term “Other Security Documents” means all documents
other than this Note or the Security Instrument now or hereafter executed and/or
delivered by Borrower and/or others and to or in favor of Lender, which wholly
or partially secure, evidence or guarantee payment of the Debt, provide for any
indemnity in favor of or payment to Lender related to the Debt, this Note or the
Mortgaged Property (as defined in the Security Instrument), provide for any
escrow/holdback arrangements or for any actions to be completed by Borrower
subsequent to the date hereof, or are otherwise related to the loan evidenced by
this Note. All amounts due and payable under this Note, together with all sums
due under the Security Instrument and the Other Security Documents, including
any applicable Prepayment Consideration (hereinafter defined) and all applicable
attorney fees and costs, are collectively referred to herein as the “Debt.”
Where appropriate, the singular number shall include the plural, the plural
shall include the singular, and the words “Lender” and “Borrower” shall include
their respective successors, assigns, heirs, personal representatives, executors
and administrators.
     5. Prepayment/Defeasance.
     (a) When Permitted. Prior to November 1, 2017 (the “Early Payment Date”),
Borrower shall not have the right to prepay all or any portion of the Debt at
any time during the term of this Note (except for any prepayment permitted under
the Security Instrument in the event of a casualty or condemnation). No
Prepayment Consideration (hereinafter defined) will be due from any prepayment
of this Note (in whole but not in part) on or after the Early Payment Date.
Notwithstanding the foregoing or anything else to the contrary herein, upon the
completion of a defeasance as set forth below, Borrower shall have no further
right to prepay all or any portion of the Debt. In the event of a prepayment on
or after such date, Borrower shall pay, together with the amount of such
prepayment, an amount equal to (i) all accrued and unpaid interest, and (ii) any
other sums due under this Note, the Security Instrument or any Other Security
Document. Additionally, any such prepayment not actually received by Lender
before 5:00 p.m., Central Time, on the 5th day of any calendar month must also
include the interest which would have accrued on the amount of such prepayment
during the entire calendar month in which the prepayment is made.
     (b) Notice. Borrower may give written notice to Lender specifying the date,
which date must be on or after the Early Payment Date, on which a full
prepayment of the Debt is to be made (the date of any prepayment hereunder,
whether pursuant to such notice or not, and whether voluntary or involuntary,
being herein called the “Prepayment Date”). Lender shall receive this notice not
more than sixty (60) days and not less than thirty (30) days prior to the
Prepayment Date. If any such notice of prepayment is

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given, the entire Debt, including any applicable Prepayment Consideration (as
defined below), shall be due and payable on the Prepayment Date.
     (c) Prepayment After Event of Default. If following the occurrence of any
Event of Default, Borrower shall tender payment of an amount sufficient to
satisfy the Debt at any time prior to or after a sale of the Mortgaged Property,
either through foreclosure or the exercise of the other remedies available to
Lender under the Security Instrument or the Other Security Documents, such
tender by Borrower shall be deemed to be a voluntary prepayment under this Note
in the amount tendered and in such case Borrower shall also pay to Lender, with
respect to the amount tendered, the applicable Prepayment Consideration set
forth in this Note, which Prepayment Consideration shall be immediately due and
payable. Lender shall not be obligated to accept any such prepayment of this
Note unless it is accompanied by an amount (the “Prepayment Consideration”)
equal to the greater of: (x) one percent (1%) of the outstanding principal
balance of this Note at the time of prepayment; or (y) the Yield Maintenance
Amount (hereinafter defined).
     Lender shall not be obligated to accept any such tender unless it is
accompanied by all Prepayment Consideration due in connection therewith.
Borrower acknowledges that the Prepayment Consideration is a bargained for
consideration to Lender for the privilege of prepaying the Debt prior to
maturity, and not a penalty, and Borrower recognizes that Lender would incur
substantial additional costs and expenses in the event of a prepayment of the
Debt and that the Prepayment Consideration compensates Lender for such costs and
expenses (including without limitation, the loss of Lender’s investment
opportunity during the period from the date such tender is accepted until the
Maturity Date). Borrower agrees that Lender shall not, as a condition to
receiving the Prepayment Consideration, be obligated to actually reinvest the
amount prepaid in any treasury obligation or in any other manner whatsoever.
Except as otherwise set forth in the Security Instrument, no Prepayment
Consideration will be due for involuntary prepayments resulting from any
Casualty (as defined in the Security Instrument) or Condemnation (as defined in
the Security Instrument).
     Yield Maintenance Amount. The “Yield Maintenance Amount” shall mean the
present value, as of the Prepayment Date, of the remaining scheduled payments of
principal and interest from the Prepayment Date through the Maturity Date
(including any balloon payment) determined by discounting such payments at the
Discount Rate (hereinafter defined), less the amount of principal being prepaid.
The term “Discount Rate” shall mean the rate which, when compounded monthly, is
equivalent to the Treasury Rate (hereinafter defined) when compounded
semi-annually. The term “Treasury Rate” shall mean the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading U.S. Government
Securities/Treasury Constant Maturities for the week ending prior to the
Prepayment Date, of U.S. Treasury constant maturities with maturity dates (one
longer and one shorter) most nearly approximating the Maturity Date. (In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required Prepayment Consideration.
     (d) Defeasance. Any provision hereof to the contrary notwithstanding, at
any time during the Defeasance Period (as defined below), Borrower may obtain a
release of the Mortgaged Property from the lien of the Security Instrument only
upon the satisfaction of the following conditions:
     (i) not less than thirty (30) days prior written notice shall be given to
Lender specifying a date (the “Defeasance Date”) on which the Defeasance
Collateral (as defined below) is to be delivered, such date being the first day
of the month;

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     (ii) all accrued and unpaid interest and all other sums due under this
Note, the Security Instrument and the Other Security Documents up to the
Defeasance Date, including, without limitation, all reasonable costs and
expenses incurred by Lender or its agents in connection with such defeasance,
including, without limitation, any legal fees and expenses incurred in
connection with obtaining and reviewing the Defeasance Collateral, the
preparation of the Defeasance Security Agreement (as defined below) and related
documentation, accountant fees, and investment advisor fees, all of which shall
be paid in full on or prior to the Defeasance Date;
     (iii) no Event of Default, and no event or condition that, with the giving
of notice or passage of time or both, would constitute an Event of Default,
shall exist either at the time Borrower gives notice of the Defeasance Date to
Lender or on the Defeasance Date;
     (iv) Borrower shall deliver to Lender on or before the Defeasance Date
direct, non-callable obligations of the United States of America in such form
and amount that provide for the payments prior, but as close as possible, to all
successive regularly scheduled monthly payment dates, including the Maturity
Date, with such payments being equal to or greater than the amount of the
corresponding monthly payment required to be paid under this Note (hereafter,
“Scheduled Defeasance Payments”) for the balance of the term hereof and the
amount required to be paid on the Maturity Date (such obligations are
collectively and singularly referred to herein as “Defeasance Collateral”) each
of which shall be duly endorsed by the holder thereof as directed by Lender or
accompanied by a written instrument of transfer in form and substance wholly
satisfactory to Lender (including, without limitation, such instrument as may be
required by the depository institution holding such securities or the issuer
thereof, as the case may be, to effectuate book-entry transfers and pledges
through the book-entry facilities of such institution) in order to perfect a
first priority security interest in such Defeasance Collateral in favor of
Lender. The Defeasance Collateral may be purchased by Lender on Borrower’s
behalf, in which case Borrower shall deposit with Lender at least three days
before the Defeasance Date a sum sufficient, in Lender’s sole and absolute
discretion, to purchase the Defeasance Collateral. Any sums in excess of the
amount necessary to purchase the Defeasance Collateral shall be remitted to
Borrower upon release of the Mortgaged Property.
     (v) Borrower shall deliver the following to Lender, at Borrower’s cost, on
or prior to the Defeasance Date:
     (A) a pledge and security agreement, in form and substance satisfactory to
Lender in its sole discretion, creating a first priority security interest in
favor of Lender in the Defeasance Collateral (the “Defeasance Security
Agreement”);
     (B) a certificate of Borrower certifying that all of the requirements
hereunder for a defeasance have been satisfied;
     (C) an opinion of counsel in form and substance and delivered by counsel
satisfactory to Lender in its sole discretion stating, among other things,
(x) that Lender has a perfected first priority security interest in the
Defeasance Collateral, (y) that the Defeasance Security Agreement is enforceable
against Borrower in accordance with its terms and (z) that the defeasance will
not cause the entity which holds this Note to fail to qualify as a “real estate
mortgage investment conduit” (a “REMIC”), within the meaning of Section 860D of
the Internal Revenue Code of 1986, as amended from time to time or any successor
statute (the “Code”);

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     (D) an opinion of an independent certified public accountant acceptable to
Lender representing and warranting to Lender that the Defeasance Collateral will
generate monthly amounts equal to or greater than the Scheduled Defeasance
Payments including the amount required to be paid on the Maturity Date of this
Note, and such other approvals required by Lender;
     (E) evidence in writing from each of the Rating Agencies to the effect that
such release will not result in a qualification, downgrade or withdrawal of any
rating in effect immediately prior to the Defeasance Date for any securities or
“Pass-Through Certificates” issued pursuant to the terms of a trust and
servicing agreement in the event that this Note or any interest therein is
included in a REMIC or other securitization vehicle;
     (F) such other certificates, opinions, documents or instruments as Lender
may reasonably require; and
     (G) upon approval by Lender of the schedule of Defeasance Collateral to be
delivered to Lender, Borrower shall (i) pay Lender a nonrefundable fee, in an
amount reasonably determined by Lender, as compensation for the review, analysis
and processing of the defeasance request; and (ii) if required by Lender,
deposit with Lender an amount estimated by Lender to be sufficient to fund all
other fees, costs and expenses related to the defeasance, including Lender’s
reasonable attorneys’ fees and expenses and rating agency fees, if any and
expenses together with all expenses and costs associated with the release of the
lien on the Mortgaged Property. Borrower shall be responsible for all fees,
costs and expenses associated with the defeasance which, if not covered by the
above deposit, shall be paid to Lender no later than the Defeasance Date.
     Upon compliance with the foregoing requirements relating to the delivery of
the Defeasance Collateral, the Mortgaged Property shall be released from the
lien of the Security Instrument and the Defeasance Collateral shall constitute
collateral which shall secure this Note and the Debt.
     The “Defeasance Period” shall mean the period of time: (1) commencing on
the date which is the later to occur of: (A) two (2) years after the “start-up
day,” within the meaning of Section 860(G)(a)(9) of the Code, of the REMIC that
holds this Note; and (B) three (3) years after the date of the first regularly
scheduled monthly payment due hereunder, and (2) ending on the Early Payment
Date. The “Rating Agencies” shall mean, collectively, Standard & Poor’s Ratings
Services, Moody’s Investors Service, Inc., Fitch IBCA, Inc., and their
respective successors and assigns, to the extent each of the foregoing performed
credit rating services for the REMIC or other securitization vehicle which owns
this Note.
     (e) Successor Borrower. In connection with a defeasance under this Section,
Borrower shall establish or designate a successor entity (the “Successor
Borrower”) which shall be a single purpose entity approved by Lender in its sole
discretion. Borrower shall transfer and assign all obligations, rights and
duties under and to this Note together with the Defeasance Collateral to such
Successor Borrower. Such Successor Borrower shall assume the obligations under
this Note and the Security Instrument and Borrower shall be relieved of its
obligations under such documents except for any such representations that
specifically survive the defeasance. Borrower shall pay $1,000 to any such
Successor Borrower as consideration for assuming the obligations under this Note
and the Security Instrument. Borrower shall pay all costs and expenses incurred
by Lender, including Lender’s attorneys’ fees and expenses, incurred in
connection with establishment of the Successor Borrower.

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     (f) Defeasance Collateral Account. All cash from interest and principal
payments paid on the Defeasance Collateral shall be paid over to Lender for each
Scheduled Defeasance Payment and applied first to accrued and unpaid interest
and then to principal. Any cash from interest and principal paid on the
Defeasance Collateral not needed to pay accrued and unpaid interest or principal
shall be retained in a designated account established by Borrower or Successor
Borrower as the case may be, (the “Defeasance Collateral Account”) which shall
constitute additional collateral for the loan evidenced hereby. The Defeasance
Collateral Account shall contain only cash from interest and principal paid on
the Defeasance Collateral. Borrower or Successor Borrower, as applicable, shall
be the owner of the Defeasance Collateral Account and shall report all income
accrued thereon for federal, state and local income tax purposes and shall pay
all costs and expenses associated with opening and maintaining the account and
may pay all costs and expenses associated with maintaining the Successor
Borrower from such account. Lender shall have no responsibility to fund any
Scheduled Defeasance Payments and shall not be liable in any way by reason of
any insufficiency in the Defeasance Collateral Account. Upon an assumption by
Successor Borrower acceptable to Lender, Borrower shall be relieved of its
obligations under this Note and the Defeasance Security Agreement and, to the
extent such documents relate to the Mortgaged Property, the Other Security
Documents.
     (g) Release of Security Instrument Following Defeasance. Upon compliance
with the requirements hereunder for a defeasance, the Mortgaged Property shall
be released from the lien of the Security Instrument and the Other Security
Documents, and the Defeasance Collateral shall constitute collateral securing
this Note. Lender will, at Borrower’s expense, execute and deliver any
agreements reasonably requested by Borrower to release the lien of the Security
Instrument from the Mortgaged Property.
     (h) Purchase of Defeasance Collateral. In the event of purchase by Lender
of the Defeasance Collateral, such purchase may, in Lender’s sole and absolute
discretion be through an affiliate of Lender or a third party entity. Borrower
shall be responsible for the payment of any brokerage or other transaction fees
in connection with such purchase.
     6. Default. An “Event of Default” shall occur if:
     (a) Borrower fails to make the full and punctual payment of any amount
payable hereunder or under the Security Instrument or Other Security Documents,
which failure is not cured on or before the fifth (5th) day after the date of
written notice from Lender to Borrower of such failure;
     (b) Borrower fails to pay the entire outstanding principal balance
hereunder, together with all accrued and unpaid interest, on the date when due,
whether on the Maturity Date, upon acceleration or prepayment or otherwise; or
     (c) an Event of Default (as defined in the Security Instrument or any of
the Other Security Documents) has occurred under the Security Instrument and/or
Other Security Documents.
     7. Acceleration. The whole of the Debt, including without limitation, the
principal sum of this Note, all accrued interest and all other sums due under
this Note, the Security Instrument and the Other Security Documents, together
with any applicable Prepayment Consideration, shall become immediately due and
payable at the option of Lender, without notice, at any time following the
occurrence of an Event of Default.
     8. Default Interest. Upon the occurrence of an Event of Default (including
without limitation, the failure of Borrower to pay the Debt in full on the
Maturity Date), Lender shall be entitled to receive and Borrower shall pay
interest on the entire unpaid principal balance at the rate (the “Default

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Rate”) equal to the greater of: (a) four percent (4%) above the Applicable
Interest Rate; or (b) four percent (4%) above the Prime Rate (hereinafter
defined) in effect at the time of the occurrence of the Event of Default;
provided, however, that notwithstanding the foregoing, in no event shall the
Default Rate exceed the Maximum Rate (hereinafter defined). The term “Prime
Rate” shall mean the prime rate reported in the Money Rates section of The Wall
Street Journal for the date (the “Default Rate Calculation Date”) upon which the
Event of Default occurred, or if no publication occurs upon such date, then the
date of publication immediately preceding the date of the Event of Default. In
the event that The Wall Street Journal should cease or temporarily interrupt
publication, the term “Prime Rate” shall mean the daily average prime rate
published upon the Default Rate Calculation Date in another business newspaper,
or business section of a newspaper, of national standing chosen by Lender. In
the event that a prime rate is no longer generally published or is limited,
regulated or administered by a governmental or quasi-governmental body, then
Lender shall select a comparable interest rate index which is readily available
and verifiable to Borrower but is beyond Lender’s control. The Default Rate
shall be computed from the occurrence of the Event of Default until the actual
payment in full of the Debt. This charge shall be added to the Debt, and shall
be deemed secured by the Security Instrument. This clause, however, shall not be
construed as an agreement or privilege to extend the Maturity Date, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default.
     9. Attorney Fees. In the event that Lender employs attorney(s) to collect
the Debt, to enforce the provisions of this Note or to protect or foreclose the
security herefor, Borrower agrees to pay Lender’s attorney fees and
disbursements, whether or not suit be brought. Such fees shall be immediately
due and payable. As used herein, “Lender’s attorney fees and disbursements,”
“attorney fees and costs,” and similar words and phrases shall include, but not
be limited to, litigation preparation costs and expenses, paraprofessional fees,
secretarial overtime, depositions, electronic research, postage, travel,
communications and related costs and expenses, and expenses of preparing the
Mortgaged Property for sale, including, without limitation, all costs and
expenses of environmental testing, investigation, reporting, remediation and
clean-up.
     10. Limit of Validity. This Note is subject to the express condition that
at no time shall Borrower be obligated or required to pay interest or other
charges on the Debt at a rate which may subject Lender to civil or criminal
liability as a result of such rate exceeding the maximum interest rate which
Borrower is permitted to pay by applicable law (the “Maximum Rate”). If by the
terms of this Note, Borrower is at any time required or obligated to pay
interest or other charges on the Debt at a rate in excess of the Maximum Rate,
the rate of interest due under this Note shall be deemed to be immediately
reduced to the Maximum Rate and any previous payments in excess of the Maximum
Rate shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder.
     11. No Oral Amendments. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.
     12. Exculpation. Subject to the provisions of this Section, Borrower’s
liability under this Note, the Security Instrument or the Other Security
Documents shall only extend to the Mortgaged Property and other collateral given
to secure the Debt, and Lender shall not enforce such liability against any
other asset, property or funds of Borrower; provided, however, the foregoing
shall not:
     (a) impair the right of Lender to bring suit and obtain personal, recourse
judgments against any person or entity (including Borrower) relating to any
losses (including attorney’s fees and court costs) sustained by Lender in
connection with any fraud, intentional misrepresentation, waste, or

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misappropriation of tenant security deposits or rents collected more than one
(1) month in advance by Borrower;
     (b) impair the right of Lender to name, and obtain a judgment against any
person or entity (including Borrower) to the extent required by law to either
obtain a judgment of specific performance with respect to any of the provisions
of this Note, the Security Instrument or any of the Other Security Documents, or
to foreclose the Security Instrument and obtain title to the Mortgaged Property
and other collateral given to secure the Debt;
     (c) affect the validity or enforceability of, or impair the right of Lender
to bring suit and obtain personal, recourse judgments against any person or
entity (including Borrower) to enforce any guaranty, indemnity or release of
liability made by such person or entity (whether made in this Note, the Security
Instrument, any of the Other Security Documents or in any other separate
agreement);
     (d) impair the right of Lender to obtain the appointment of a receiver;
     (e) impair the enforcement of the Assignment of Leases and Rents executed
in connection herewith; or
     (f) affect the validity or enforceability of, or impair the right of Lender
to bring suit and obtain personal, recourse judgments against any person or
entity (including Borrower) relating to any losses sustained by Lender in
connection with any of the provisions of this Note, the Security Instrument or
any of the Other Security Documents requiring that: (i) any person or entity
maintain any insurance over any of the Mortgaged Property, or (ii) any insurance
proceeds or condemnation awards be paid to Lender; or
     (g) impair the right of Lender to bring suit and obtain personal, recourse
judgments against any person or entity (including Borrower) for the full amount
of the Debt if the Mortgaged Property or any part thereof shall become an asset
in: (i) a voluntary bankruptcy or insolvency proceeding, or (ii) an involuntary
bankruptcy or insolvency proceeding: (A) which is commenced by any person or
entity controlling, controlled by or under common control with Borrower (the
“Borrowing Group”) or (B) in which any member of the Borrowing Group objects to
a motion by Lender for relief from any stay or injunction from the foreclosure
of the Security Instrument or any other remedial action permitted under this
Note, the Security Instrument or any of the Other Security Documents.
     Items (a) through (g) above are collectively the “Non-Recourse Exceptions.”
To the extent Borrower is a general partnership and Lender is required under
applicable law to pursue its remedies against the persons or entities
constituting Borrower, each reference to the phrase “(including Borrower)” in
the Non-Recourse Exceptions shall be deemed to read “(including Borrower or any
person or entity constituting Borrower).” Borrower’s liability under the
Non-Recourse Exceptions, excepting item (g), shall be limited to the amount of
any losses or damages sustained by Lender in connection with such Non-Recourse
Exceptions. Nothing herein shall be deemed to be a waiver of any right which
Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions
of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt
secured by the Security Instrument or to require that all of the Mortgaged
Property and other collateral given to secure the Debt shall continue to secure
all of the Debt.
     13. Assignment. Lender, and its successors, endorsees and assigns, may
freely transfer and assign this Note. Borrower’s right to transfer its rights
and obligations with respect to the Debt, and to be released from liability
under this Note, shall be governed by the Security Instrument.

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     14. Applicable Law; Jurisdiction. This Note shall be governed and construed
in accordance with the laws of the state in which the real property encumbered
by the Security Instrument is located. Borrower hereby submits to personal
jurisdiction in the state courts located in said state and the federal courts of
the United States of America located in said state for the enforcement of
Borrower’s obligations hereunder and waives any and all personal rights under
the law of any other state to object to jurisdiction within such state for the
purposes of any action, suit, proceeding or litigation to enforce such
obligations of Borrower.
     15. Joint and Several Liability. If Borrower consists of more than one
person or entity, the obligations and liabilities of each such person or entity
shall be joint and several.
     16. Waiver of Presentment, Etc. Borrower and all others who may become
liable for the payment of all or any part of the Debt do hereby severally waive
relief from valuation and appraisement laws, presentment and demand for payment,
notice of dishonor, protest, notice of protest, and notice of intent to
accelerate the maturity hereof (and of such acceleration), except to the extent
that specific notices are required by this Note, the Security Instrument or the
Other Security Documents.
     17. No Waiver. Any failure by Lender to insist upon strict performance by
Borrower of any of the provisions of this Note, the Security Instrument or the
Other Security Documents shall not be deemed to be a waiver of any of the terms
or provisions of this Note, the Security Instrument or the Other Security
Documents, and Lender shall have the right thereafter to insist upon strict
performance by Borrower of any and all of the terms and provisions of this Note,
the Security Instrument or the Other Security Documents.
     18. Notices. Except as otherwise specified herein, any notice, consent,
request or other communication required or permitted to be given hereunder shall
be in writing, addressed to the other party as set forth below (or to such other
address or person as either party or person entitled to notice may by notice to
the other party specify), and shall be: (a) personally delivered; (b) delivered
by Federal Express or other comparable overnight delivery service; or (c)
transmitted by United States certified mail, return receipt requested with
postage prepaid; to:

      Lender:  
PNC Bank, National Association
   
10851 Mastin, Suite 300
   
Overland Park, Kansas 66210
   
Attention: Closing Department
   
 
Borrower:  
NNN Eastern Wisconsin Medical Portfolio, LLC
   
c/o Triple Net Properties
   
1551 N. Tustin Avenue, Suite 300
   
Santa Ana, California 92705
   
Attention: Theresa Hutton

     Unless otherwise specified, all notices and other communications shall be
deemed to have been duly given on the first to occur of actual receipt of the
same or: (i) the date of delivery if personally delivered; (ii) one (1) business
day after depositing the same with the delivery service if by overnight delivery
service; and (iii) three (3) days following posting if transmitted by mail.
Borrower must prominently display Lender’s Loan Number (as set forth on page 1
of this Note) on all notices or communications to Lender.
     19. Severability. If any term, covenant or condition of this Note is held
to be invalid, illegal or unenforceable in any respect, this Note shall be
construed without such provision.

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     20. Time of the Essence. Time shall be of the essence in the performance of
all obligations of Borrower hereunder.
     21. Additional Terms and Provisions. Certain additional and supplemental
terms and provisions of this Note are set forth in this paragraph. The terms and
provisions of this paragraph control and supersede any conflicting terms and
provisions contained in this Note.
     (a) Late Charge. No Late Charge will be applicable in connection with a
failure to pay the remaining outstanding principal, unpaid interest and other
amounts payable on the Maturity Date, except that the late charge will apply
against the monthly payment.
     (b) Defeasance.
     (i) Defeasance Release. The introductory paragraph of Section 5(d) is
modified by inserting “of all but not part” between “release” and “of” in the
second line.
     (ii) Maturity Date in the Event a Defeasance Occurs. The two references to
“Maturity Date” in Paragraph 5(d)(iv) are amended to read “Early Payment Date,”
and in the event the loan evidenced hereby has been defeased, the Maturity Date
of the Loan will be amended to be November 1, 2017.
     (iii) Defeasance Period. Notwithstanding anything in Paragraph 5, if Lender
completes a sale (a “CMBS Sale”) of loan evidenced hereby in connection with the
issuance of commercial mortgage-backed securities within 12 months following the
funding date hereof, the term “Defeasance Period” shall mean the period of time:
(1) commencing on the date which is two (2) years after the “start-up day,”
within the meaning of Section 860(G)(a)(9) of the Code, of the REMIC that holds
this Note, and (2) ending on the Early Payment Date.
     (iv) Defeasance Collateral. Notwithstanding anything in Paragraph 5, as
used herein, the term “U.S. Government Securities” shall mean non-redeemable
securities evidencing an obligation to timely pay principal and/or interest in a
full and timely manner that are (a) direct obligations of the United States of
America for the full and timely payment of which its full faith and credit is
pledged, or (b) to the extent acceptable to an applicable Rating Agency, other
“government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended.
     (c) Prepayment. If Lender does not complete a CMBS Sale within 12 months
following the funding date hereof, Paragraph 5 of this Note shall be of no
further force and effect, and the following prepayment provisions shall apply.
     (i) When Permitted. Except as set forth in this Section, Borrower shall not
have the right to prepay all or any portion of the Debt at any time during the
term of this Note. Borrower may prepay the Debt in whole, but not in part
(except for any prepayment permitted under the Security Instrument in the event
of a casualty or condemnation) if: (i) no Event of Default (hereinafter defined)
then exists; (ii) any applicable Prepayment Consideration (hereinafter defined)
is tendered with such prepayment; and (iii) the required notice of prepayment
required hereby is timely received by Lender. Notwithstanding anything to the
contrary contained herein, no prepayments will be allowed during the Lockout
Period (as defined in subparagraph (c) below). Additionally, any such prepayment
not actually received by Lender before 5:00 p.m., central time, on the 5th
calendar day of any month must also include the interest which would

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have accrued on the amount of such prepayment during the entire calendar month
in which the prepayment is made.
     (ii) Notice. Borrower shall give written notice to Lender specifying the
date on which prepayment is to be made (the “Prepayment Date”). Lender shall
receive this notice not more than sixty (60) days and not less than thirty
(30) days prior to the Prepayment Date. If any such notice of prepayment is
given, the entire Debt, including any applicable Prepayment Consideration, shall
be due and payable on the Prepayment Date.
     (iii) Prepayment Consideration. Lender shall not be obligated to accept any
prepayment of the principal balance of this Note unless it is accompanied by all
Prepayment Consideration due in connection therewith. Except as otherwise set
forth in the Security Instrument, no Prepayment Consideration will be due for
involuntary prepayments resulting from any Casualty (as defined in the Security
Instrument) or Condemnation (as defined in the Security Instrument). The
“Prepayment Consideration” shall be computed as follows:

     
From the date of disbursement hereunder through December 31, 2010:
  The “Lockout Period,” no prepayment allowed.
 
   
January 1, 2011 through the last day of October, 2017:
  The greater of: (i) one percent (1%) of the outstanding principal balance of
this Note at the time of prepayment; or (ii) the Yield Maintenance Amount
(hereinafter defined).
 
   
November 1, 2017 through maturity:
  No Prepayment Consideration.

Borrower acknowledges that the Prepayment Consideration is a bargained for
consideration and not a penalty, and Borrower recognizes that Lender would incur
substantial additional costs and expenses in the event of a prepayment of the
Debt and that the Prepayment Consideration compensates Lender for such costs and
expenses (including without limitation, the loss of Lender’s investment
opportunity during the period from the Prepayment Date until the Maturity Date).
Borrower agrees that Lender shall not, as a condition to receiving the
Prepayment Consideration, be obligated to actually reinvest the amount prepaid
in any treasury obligation or in any other manner whatsoever.
     (iv) Yield Maintenance Amount. The “Yield Maintenance Amount” shall mean
the present value, as of the Prepayment Date, of the remaining scheduled
payments of principal and interest from the Prepayment Date through the Maturity
Date (including any balloon payment) determined by discounting such payments at
the Discount Rate (hereinafter defined), less the amount of principal being
prepaid. The term “Discount Rate” shall mean the rate which, when compounded
monthly, is equivalent to the Treasury Rate (hereinafter defined) when
compounded semi annually. The term “Treasury Rate” shall mean the yield
calculated by the linear interpolation of the yields, as reported in Federal
Reserve Statistical Release H.15 Selected Interest Rates under the heading U.S.
Government Securities/Treasury Constant Maturities for the week ending prior to
the Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date. (In
the event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.) Lender shall notify Borrower of the
amount and the basis of determination of the required Prepayment Consideration.

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     (v) Prepayment After Event of Default. If, following the occurrence of any
Event of Default, Borrower shall tender payment of an amount sufficient to
satisfy the Debt at any time prior to or after a sale of the Mortgaged Property,
either through foreclosure or the exercise of the other remedies available to
Lender under the Security Instrument or the Other Security Documents, such
tender by Borrower shall be deemed to be a voluntary prepayment under this Note
in the amount tendered and in such case Borrower shall also pay to Lender, with
respect to the amount tendered, the applicable Prepayment Consideration set
forth in this Note, if any, which Prepayment Consideration shall be immediately
due and payable. If such tendered prepayment under this Note shall occur during
the Lockout Period, Borrower also shall pay to Lender in addition to all other
amounts owing, the Yield Maintenance Amount (as defined herein except that all
references to “Prepayment Date” shall mean the date of said tendered
prepayment).
     (d) Exculpation.
     (i) Anything in Paragraph 12 above to the contrary notwithstanding, so long
as the Mortgaged Property is owned by tenants in common, each individual tenant
in common (and the guarantor which owns or controls such tenant in common) shall
only be liable to the extent of matters committed or caused by (1) such
guarantor or such tenant in common, (2) any tenant in common which is controlled
directly or indirectly by such guarantor, (3) any tenant in common of which such
guarantor is a manager, managing member, or general partner, or (4) any tenant
in common in which such guarantor owns a direct or indirect beneficial interest.
     (ii) Section 12(f) is modified to state the following: “affect the validity
or enforceability of, or impair the right of Lender to bring suit and obtain
personal, recourse judgments against any person or entity (including Borrower)
relating to any losses sustained by Lender in connection with any of the
provisions of this Note, the Security Instrument or any of the Other Security
Documents requiring that: (i) any person or entity maintain any insurance over
any of the Mortgaged Property in accordance with the terms of the Loan, unless
(x) Lender is escrowing funds therefore and fails to make such payment, or
(y) the amount of rents and proceeds generated from the Mortgaged Property
following application against the Loan, taxes, and other standard operating
expenses is insufficient to pay all insurance premiums, or (ii) any insurance
proceeds or condemnation awards be paid to Lender; or”
     BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THEY, OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN EVIDENCED BY THIS NOTE OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE SECURITY INSTRUMENT
OR ANY OF THE OTHER SECURITY DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF BORROWER OR LENDER
IN CONNECTION WITH THE LOAN EVIDENCED BY THIS NOTE. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER’S MAKING OF THE LOAN SECURED BY THE SECURITY INSTRUMENT
AND THE OTHER SECURITY DOCUMENTS.
     (e) Attorney’s Fees. The second sentence of Paragraph 9 is replaced with
the following:
“As used herein, “Lender’s attorney fees and disbursements,” “attorney fees and
costs,” and similar words and phrases shall refer to third-party fees, costs and
expenses including, but not limited to, litigation preparation costs and
expenses, paraprofessional fees, secretarial overtime, depositions, electronic
research, postage, travel, communications and related costs and expenses,

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and expenses of preparing the Mortgaged Property for sale, including, without
limitation, all costs and expenses of environmental testing, investigation,
reporting, remediation and clean-up.”
[NO FURTHER TEXT ON THIS PAGE]

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     IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note to be
effective the day and year first above written.

                      BORROWER:        
 
                    NNN EASTERN WISCONSIN MEDICAL
PORTFOLIO, LLC,
a Delaware limited liability company    
 
                    By:   Triple Net Properties, LLC,
a Virginia limited liability company,
its Manager    
 
               
 
      By:   /s/ Jeffrey T. Hanson     
 
               
 
      Name:   Jeffrey T. Hanson     
 
               
 
      Title:   Chief Investment Officer     
 
               
 
                    Taxpayer ID No. 26-1461325    

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STATE OF
              )                     ) ss. COUNTY OF           )
 
               

On                     , 200_, before me,
                                        , a Notary Public in and for said County
and State, personally
appeared                                                             personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted,
executed the instrument.

             
WITNESS my hand and official seal.
             
 
  Signature        
 
                (this area for official notarial seal)    

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     This Endorsement forms a part of that certain Promissory Note in the stated
principal amount of Thirty-Two Million Three Hundred Thousand and No/100 Dollars
($32,300,000.00) dated December 21, 2007, made by NNN Eastern Wisconsin Medical
Portfolio, a Delaware limited liability company, to PNC Bank, National
Association.
     Pay to the order of
                                                            , without recourse.

                PNC Bank, National Association    
 
  By:      
 
         
 
       Jeannette Butler, Vice President  

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