LOAN AGREEMENT
DATED AS OF OCTOBER 22, 2013
BY AND AMONG
FOREST PARK REALTY PARTNERS III, LP,
a Texas limited partnership,
and
BT FOREST PARK REALTY PARTNERS, LP,
a Texas limited partnership
individually and collectively, as Borrower,
AND
SABRA TEXAS HOLDINGS, L.P.,
a Texas limited partnership,
as Lender

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TABLE OF CONTENTS
ARTICLE 1 INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES    1
1.1INCORPORATION OF RECITALS.    1
1.2INCORPORATION OF EXHIBITS.    1
ARTICLE 2 DEFINITIONS; PRINCIPLES OF CONSTRUCTION    2
2.1DEFINITIONS.    2
2.2PRINCIPLES OF CONSTRUCTION.    11
ARTICLE 3 LOAN AND LOAN DOCUMENTS    12
3.1AGREEMENT TO LEND AND BORROWER; LOAN BALANCING.    12
3.2CONDITIONS PRECEDENT TO MAKING THE LOAN.    12
3.3TERM OF THE LOAN.    12
3.4INTEREST.    12
3.5LOAN PAYMENTS.    13
ARTICLE 4 FINANCIAL REPORTING COVENANTS    14
4.1MAINTENANCE OF BOOKS AND RECORDS.    14
4.2FINANCIAL, MANAGEMENT AND REGULATORY REPORTS.    15
4.3ADDITIONAL INFORMATION.    15
4.4PUBLICATION OF BORROWER’S REPORTS.    15
ARTICLE 5 OPERATIONAL AND OTHER COVENANTS    15
5.1ORGANIZATIONAL COVENANTS.    15
5.2OPERATIONAL COVENANTS.    17
5.3FINANCIAL COVENANTS.    19
5.4LOAN COVENANTS.    20
5.5AUTHORIZED REPRESENTATIVE.    22
5.6CONTEST PROCEDURE.    22
ARTICLE 6 BORROWER’S REPRESENTATIONS AND WARRANTIES    22
6.1ORGANIZATIONAL REPRESENTATIONS AND WARRANTIES.    22
6.2OPERATIONAL REPRESENTATIONS AND WARRANTIES.    24
6.3FINANCIAL REPRESENTATIONS AND WARRANTIES.    26
6.4LOAN REPRESENTATIONS AND WARRANTIES.    27
6.5BORROWER’S REPRESENTATIONS AND WARRANTIES; OPTION AGREEMENT.    28
ARTICLE 7 ENVIRONMENTAL MATTERS    28
7.1ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.    28
7.2ENVIRONMENTAL COVENANTS.    29
7.3RIGHT OF ENTRY AND DISCLOSURE OF ENVIRONMENTAL REPORTS.    30
7.4BORROWER’S REMEDIAL WORK.    30
7.5ENVIRONMENTAL INDEMNITY.    31
7.6REMEDIES UPON AN ENVIRONMENTAL DEFAULT.    32
7.7UNCONDITIONAL ENVIRONMENTAL OBLIGATIONS.    32
7.8INDEMNIFICATION SEPARATE FROM THE LOAN.    32
ARTICLE 8 INSURANCE, CASUALTIES AND CONDEMNATION    33
8.1INSURANCE.    33
8.2CASUALTY AND CONDEMNATION.    36
8.3DELIVERY OF NET CASUALTY PROCEEDS.    37

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ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES    41
9.1EVENTS OF DEFAULT.    41
9.2REMEDIES CONFERRED UPON LENDER.    42
ARTICLE 10 LOAN EXPENSE, COSTS AND ADVANCES    44
10.1LOAN AND ADMINISTRATION EXPENSES.    44
10.2RIGHT OF LENDER TO MAKE ADVANCES TO CURE BORROWER’S DEFAULTS.    44
ARTICLE 11 GENERAL PROVISIONS    44
11.1CAPTIONS.    44
11.2LENDER’S DISCRETION.    45
11.3GOVERNING LAW.    45
11.4JURISDICTION.    45
11.5WAIVER OF JURY TRIAL.    45
11.6MODIFICATION; CONSENT.    46
11.7DELAY NOT A WAIVER.    46
11.8WAIVERS; ACQUIESCENCE OR FORBEARANCE.    46
11.9PREFERENCES.    47
11.10DISCLAIMER BY LENDER.    47
11.11PARTIAL INVALIDITY; SEVERABILITY.    47
11.12DEFINITIONS INCLUDE AMENDMENTS.    48
11.13ENTIRE AGREEMENT.    48
11.14WAIVER OF DAMAGES.    48
11.15WAIVER OF NOTICE.    48
11.16CLAIMS AGAINST LENDER.    48
11.17SET-OFFS.    49
11.18FUNDS HELD BY LENDER.    49
11.19RELATIONSHIP.    49
11.20NO THIRD PARTY BENEFICIARIES.    49
11.21AGENTS.    49
11.22CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.    50
11.23INTERPRETATION.    50
11.24SUCCESSORS AND ASSIGNS.    50
11.25TIME IS OF THE ESSENCE.    50
11.26NOTICES.    51
11.27EXECUTION IN COUNTERPARTS.    51
11.28JOINT AND SEVERAL.    51

EXHIBITS AND SCHEDULES
EXHIBIT A:        Legal Description of the Land
EXHIBIT B:        List of Required Diligence Material
EXHIBIT C:        Closing Date Deliverables
EXHIBIT D:        Reporting Requirements
EXHIBIT E:        Environmental Documents
SCHEDULE 1:        Ownership Structure of Borrower
SCHEDULE 2:        Description of Facility
SCHEDULE 3:        Material Contracts
SCHEDULE 4:        Disclosed Litigation

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LOAN AGREEMENT
THIS LOAN AGREEMENT (this “Agreement”) is made as of October 22, 2013, by and
among FOREST PARK REALTY PARTNERS III, LP, a Texas limited partnership (“Phase
III Borrower”), and BT FOREST PARK REALTY PARTNERS, LP, a Texas limited
partnership (“Phase I Borrower,” with Phase III Borrower and Phase I Borrower
being referred to individually and collectively as “Borrower”), on one hand, and
SABRA TEXAS HOLDINGS, L.P., a Texas limited partnership (collectively, with its
successors and assigns, “Lender”), on the other hand.
RECITALS
A.Borrower owns the fee interest in that certain real property legally described
on Exhibit A-1 attached hereto (the “Land”). The Land is improved with the acute
care hospital listed on Schedule 2 attached hereto, together with an associated
parking structure and certain other related improvements (collectively, the
“Improvements”). Such facility and the Land, along with all other Improvements,
Fixtures, the Personal Property owned by Borrower and the Intangible Property
(all as defined below) used in connection or associated with such facility shall
at times be referred to herein as the “Facility.”
B.Borrower has applied to Lender for a loan (the “Loan”) in the amount of One
Hundred Ten Million and No/100 DOLLARS ($110,000,000.00) (the “Loan Amount”),
and Lender is willing to make the Loan on the terms and conditions hereinafter
set forth. The Loan is evidenced by that certain Secured Promissory Note of even
date herewith made by Borrower and payable to Lender in the original principal
amount of the Loan Amount (the “Note”). The terms and provisions of the Note are
hereby incorporated by reference in this Agreement.
C.Borrower’s obligations under the Loan will be secured by, inter alia, that
certain Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filing of even date herewith, executed by Borrower for the benefit of
Lender (the “Deed of Trust”).
D.This Agreement, the Note, the Deed of Trust and any other documents evidencing
or securing the Loan or executed in connection therewith, are referred to herein
collectively as the “Loan Documents.”
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

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ARTICLE 1
INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES
1.1
Incorporation of Recitals.

The foregoing preambles and all other recitals set forth herein are made a part
hereof by this reference.
1.2
Incorporation of Exhibits.

The Schedules and Exhibits annexed hereto are incorporated herein as a part of
this Agreement and expressly made a part hereof by this reference with the same
effect as if set forth in the body hereof.
ARTICLE 2
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
2.1
Definitions.

For all purposes of this Agreement, except as otherwise expressly provided, the
following terms shall have the respective meanings set forth below:
Adjusted GAAP: As such term is defined in the Facility Lease.
Affiliate: With respect to a specified Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls or is Controlled by or
is under common Control with such Person or entity, including, without
limitation, any general or limited partnership in which the first Person is a
partner.
Agreement: This Loan Agreement.
Alterations: Any alteration, improvement, exchange, replacement, modification or
expansion of the Improvements or real property fixtures at the Facility.
Anti-Money Laundering Laws: As such term is defined in Section 5.4(g).
Authorization: Any and all licenses, operating permits, Provider Agreements, bed
rights, certificates of exemption, approvals, waivers, variances and other
governmental or “quasi-governmental” authorizations necessary or advisable for
the use of the Facility for the Primary Intended Use and, to the extent
applicable, receipt of reimbursement or other payments under Medicare, Medicaid
and any Third Party Payor Programs. For the avoidance of doubt, and
notwithstanding anything to the contrary herein, the definition of
“Authorization” shall not include Provider Agreements so long as the Facility is
maintained as a private-pay facility.
Authorized Representative: As such term is defined in Section 5.5.
Award: Any compensation paid by any Governmental Authority in connection with a
Condemnation in respect of all or any part of the Facility.
Bankruptcy Action: With respect to any Person, (i) such Person filing a
voluntary petition under the Bankruptcy Code or any other federal or state
bankruptcy or insolvency law; (ii) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other federal or state bankruptcy
or insolvency law which is not dismissed within sixty (60) days of the filing
thereof, or soliciting or petitioning creditors in writing for any involuntary
petition against such Person; (iii) such Person filing an answer consenting to

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or otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other Person under the Bankruptcy Code or any other federal or state
bankruptcy or insolvency law, or soliciting or causing to be solicited
petitioning creditors for any involuntary petition from any Person; (iv) such
Person seeking, consenting to or acquiescing in or joining in an application for
the appointment of a custodian, receiver, trustee, or examiner for such Person
or any portion of the Facility; (v) such Person making an assignment for the
benefit of creditors, or admitting, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due; or (vi) such Person
taking any action in furtherance of any of the foregoing.
Bankruptcy Code: 11 U.S.C. § 101 et seq., as the same may be amended from time
to time.
Borrower: As such term is defined in the opening paragraph of this Agreement,
and including any successor obligor on the Loan from time to time.
Business Day: Any day other than a Saturday, a Sunday or any other day on which
national banks in Dallas, Texas, are not open for business.
Capital Alterations: Any Alteration for which the budgeted cost exceeds Two
Hundred Fifty Thousand Dollars ($250,000).
Casualty: The occurrence of any casualty, damage or injury, by fire or
otherwise, to the Facility or any part thereof.
Casualty Consultant: As such term is defined in Section 8.3(b)(ii).
Casualty Proceeds: As applicable, (i) the amount of all insurance proceeds
payable as a result of a Casualty, or (ii) the amount of the Award payable as a
result of a Condemnation.
Casualty Retainage: As such term is defined in Section 8.3(b)(iv).
Change in Control: Any (i) any material change in the capital structure,
organizational documents or governing documents of the applicable Person;
(ii) any change in the legal or beneficial ownership of more than twenty-five
percent (25%) of the capital stock, partnership interests or membership
interests of the applicable Person; (iii) any pledge, assignment or
hypothecation of or Lien or encumbrance on any of the legal or beneficial equity
interests in the applicable Person; (iv) any change in the legal or beneficial
ownership or control of the outstanding voting equity interests of the
applicable Person necessary at all times to elect a majority of the board of
directors (or similar governing body) of each such Person and to direct the
management policies and decisions of such Person; (v) the applicable Person
shall cease to, directly or indirectly, own and control at least seventy-five
percent (75%) of each class of the outstanding equity interests of each
Subsidiary of such Person; and (vi) any “Change of Control”, “Change in Control”
or terms of similar import under any document or instrument governing or
relating to Debt of or equity in such Person.
Closing Date: The date of this Agreement.
Closing Procedure Letter: A letter to the Title Company executed by Lender and
Borrower setting forth directions for the Title Company in connection with the
funding of the Loan as of the Closing Date.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Condemnation: A temporary or permanent taking by any Governmental Authority as
the result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain, of all or any part

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of the Facility, or any interest therein or right accruing thereto, including
any right of access thereto or any change of grade affecting the Facility or any
part thereof.
Contingent Obligation: Any direct or indirect liability of Borrower: (i) with
respect to any Debt of another Person; (ii) with respect to any undrawn portion
of any letter of credit issued for the account of Borrower as to which Borrower
is otherwise liable for the reimbursement of any drawing; (iii) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement; or (iv) for any obligations of another
Person pursuant to any guaranty or pursuant to any agreement to purchase,
repurchase or otherwise acquire any obligation or any property constituting
security therefor, to provide funds for the payment or discharge of such
obligation or to preserve the solvency, financial condition or level of income
of another Person. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guarantied or otherwise supported or, if not a fixed
and determinable amount, the maximum amount so guarantied or otherwise
supported.
Control: As such term is used with respect to any Person, including the
correlative meanings of the terms “controlled by” and “under common control
with”, shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
County: The county in the State where the Land is situated.
Debt: For any Person, without duplication: (i) all indebtedness of such Person
for borrowed money, for amounts drawn under a letter of credit or for the
deferred purchase price of property for which such Person or its assets is
liable; (ii) all unfunded amounts under a loan agreement, letter of credit or
other credit facility for which such Person would be liable if such amounts were
advanced thereunder; (iii) all amounts required to be paid by such Person as a
guaranteed payment to partners or a preferred or special dividend, including any
mandatory redemption of shares or interests; (iv) all indebtedness guaranteed by
such Person, directly or indirectly; (v) all obligations under leases that
constitute capital leases for which such Person is liable; (vi) all obligations
of such Person under interest rate swaps, caps, floors, collars and other
interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss;
(vii) off-balance sheet liabilities of such Person; and (viii) obligations
arising under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business.
Deed of Trust: As such term is defined in Recital C.
Default Rate: A rate per annum equal to the lesser of (a) (i) fifteen
percent (15.0%) if default in question can be cured by the payment of money and
(ii) twelve percent (12%) if the default in question arises due to a breach of
any non-monetary covenant or condition hereof or (b) the Maximum Legal Rate.
Environmental Documents: As such term is defined in Section 7.1.
Environmental Obligations: As such term is defined in Section 7.7.
Environmental Proceedings: Any environmental proceedings, whether civil
(including actions by private parties), criminal, or administrative proceedings,
relating to the Facility.
Environmental Reports: As such term is defined in Section 7.3.
Event of Default: As such term is defined in Section 9.1.

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Expenses: All losses, fines, penalties, judgments, awards, costs and expenses
(including, without limitation, reasonable attorneys’ fees and costs and
expenses of investigation).
Facility: As such term is defined in Recital A.
Facility Lease: That certain Amended and Restated Lease Agreement (Forest Park
Medical Center – Dallas) dated as of October 22, 2013, by and between Borrower,
as “landlord,” and Facility Tenant, as “tenant.”
Facility Tenant: Forest Park Medical Center, LLC, a Texas limited liability
company.
Fixtures: All permanently affixed equipment, machinery, fixtures and other items
of real and/or personal property owned by Borrower, including all components
thereof, now and hereafter located in, or used in connection with, or
permanently affixed to or incorporated into any of the Improvements or the Land,
including all furnaces, boilers, heaters, electrical equipment, heating,
plumbing, lighting, ventilating, refrigerating, incineration, air and water
pollution control, waste disposal, air‑cooling and air‑conditioning systems and
apparatus, sprinkler systems and fire and theft protection equipment, together
with all replacements, modifications, alterations and additions thereto, all of
which are hereby deemed to constitute real property.
GAAP: Those generally accepted accounting principles 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 agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession, in each case, consistently applied.
Governmental Authority: Any governmental court, board, agency, licensing agency,
commission, office or authority or any governmental unit (federal, state,
county, district, municipal, city or otherwise) whether now or hereafter in
existence having jurisdiction over the Borrower or the Facility, including,
without limitation, the United States Department of Health, Centers for Medicare
and Medicaid Services, the United States Department of Health and Human
Services, any state licensing agency and/or any state Medicaid agency and any
quasi-governmental authorities.
Hazardous Material: Means and includes gasoline, petroleum, asbestos containing
materials, explosives, radioactive materials, microbial matter, biological
toxins, mycotoxins, mold or mold spores or any hazardous or toxic material,
substance or waste which is defined by those or similar terms or is regulated as
such under any Legal Requirement of any Governmental Authority having
jurisdiction over the Facility or any portion thereof or its use, including:
(i) any “hazardous substance” defined as such in (or for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so‑called
“superfund” or “superlien” Law, including the judicial interpretation thereof;
(ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33);
(iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part
260; (iv) any petroleum, including crude oil or any fraction thereof;
(v) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas
usable for fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R.
Part 1910; and (vii) any other toxic substance or contaminant that is subject to
any other Legal Requirement or other past or present requirement of any
Governmental Authority. Any reference in this definition of Hazardous Materials
to a Legal Requirement, includes the same as it may be amended from time to
time, including the judicial interpretation thereof.

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HIPAA: The Health Insurance Portability and Accountability Act of 1996, as the
same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.
Hospital: As such term is defined in Section 5.2(a).
Impositions: Any property (real and personal) and other taxes and assessments
levied or assessed with respect to the Facility or Borrower’s interest therein,
including, without limitation, any state or county occupation tax, transaction
privilege, franchise taxes, margin taxes, business privilege, rental tax or
other excise taxes.
Improvements: As such term is defined in Recital A.
Indebtedness: The outstanding principal amount of the Loan together with all
interest accrued and unpaid thereon and all other sums due to under this
Agreement, the Note or any other Loan Document.
Indemnified Liabilities: As such term is defined in Section 5.4(c).
Indemnified Party: Lender and Lender’s Affiliates and their respective agents,
employees, owners, partners, members, managers, contractors, representatives,
consultants, attorneys, auditors, officers and directors, together with all
successors and assigns of the foregoing, including any Person acquiring the
Facility through a foreclosure or deed in-lieu of foreclosure under the Deed of
Trust.
Insolvent: Has the meaning provided for such term in the Texas Uniform
Commercial Code.
Insurance Requirements: All terms of any insurance policy required by this
Agreement and all requirements of the issuer of any such policy, together with
all fire underwriters’ regulations promulgated from time to time.
Intangible Property: The interest, if any, of Borrower in and to any of the
following intangible property owned by Borrower in connection with the Land and
the Improvements: (i) the identity or business of the Facility as a going
concern, including, without limitation, any names or trade names by which the
Facility may be known, and all registrations for such names, if any; (ii) to the
extent assignable or transferable, the interest, if any, of Borrower in and to
each and every guaranty and warranty concerning the Improvements or real
property fixtures at the Facility, including, without limitation, any roofing,
air conditioning, heating, elevator and other guaranty or warranty relating to
the construction, maintenance or repair of the Improvements or such fixtures;
and (iii) the interest, if any, of Borrower in and to all Authorizations to the
extent the same can be assigned or transferred in accordance with applicable
law.
Intellectual Property: All patents, patent applications and like protections,
including improvements divisions, continuation, renewals, reissues, extensions
and continuations in part of the same, trademarks, trade names, trade styles,
trade dress, service marks, logos and other business identifiers and, to the
extent permitted under applicable law, any applications therefor, whether
registered or not, and the goodwill of the business of Borrower connected with
and symbolized thereby, copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
works, whether published or unpublished, technology, know-how and processes,
operating manuals, trade secrets, computer hardware and software, rights to
unpatented inventions and all applications and licenses therefor, used in or
necessary for the conduct of business by Borrower at the Facility and all claims
for damages by way of any past, present or future infringement of any of the
foregoing.

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Interest Rate: A fixed rate per annum equal to eight percent (8%).
Investment: Any investment in any Person, whether by means of acquiring (whether
for cash, property, services, securities or otherwise), making or holding Debt,
securities, capital contributions, loans, time deposits, advances, guaranties or
otherwise. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect thereto.
Knowledge: When used with the terms to Borrower’s Knowledge”, “to the Knowledge
of Borrower”, “known to Borrower” or any similar phrase, the same shall mean the
actual, current knowledge, without any duty of investigation, of Derrick N.
Evers, Harry M. Lake and Nicholas Summerville. Notwithstanding the foregoing,
each instance in which the term “to the best of” or any term of similar import
is used to qualify Borrower’s knowledge, the knowledge of Borrower shall be
deemed to include the information that would be possessed by Borrower after
reasonable inquiry and investigation with respect to the particular matter in
question. As used herein, the term “reasonable inquiry and investigation” means
the level of inquiry and investigation that Borrower has exercised in accordance
with its or his past practices and procedures as indirect owners of an equity
interest in Borrower and/or Facility Tenant with respect to the particular
matter in question. If not already included in the foregoing definition of
“reasonable inquiry and investigation,” then, solely with respect to the
representations and warranties in Section 6.2, the term “reasonable inquiry and
investigation” shall also mean reasonable inquiry of the officers and employees
of Facility Tenant familiar with the operation of the Facility with respect to
the particular matter in question.
Land: As such term is defined in Recital A.
Legal Requirements: All federal, state, county, municipal and other governmental
statutes, laws, rules, policies, guidance, codes, orders, regulations,
ordinances, permits, licenses, covenants, conditions, restrictions, judgments,
decrees and injunctions and common law applicable to Borrower or Facility Tenant
or affecting the Facility or the maintenance, construction, use, condition,
operation or alteration thereof, whether now or hereafter enacted and in force,
including, any and all of the foregoing that relate to the use of the Facility
for the Primary Intended Use.
Lender: As defined in the opening paragraph of this Agreement, and including any
successor holder of the Loan from time to time.
Lien: With respect to any asset, any mortgage, lien, pledge, charge, security
interest, attachment, title retention agreement or other encumbrance of any
kind, in respect of such asset.
Loan: As such term is defined in Recital B.
Loan Amount. As such term is defined in Recital B.
Loan Documents: As such term is defined in Recital D.
Loan Term: As such term is defined in Section 3.2.
Lockout Period: As such term is defined in Section 3.5(d).
Material Adverse Effect: With respect to any event, act, condition or occurrence
of whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), whether singly or in
conjunction with any other event or events, act or acts, condition or

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conditions, occurrence or occurrences, whether or not related, (i) a material
adverse change in any of (a) the condition (financial or otherwise), operations,
business, properties or prospects of Borrower, if the same would reasonably be
expected to reduce the value of the Facility by $500,000.00 or more, whether
measured by a loss of, reduction in or adverse effect on earnings, profits or
cash flows or the occurrence or increase of any liability, fine, penalty, suit,
action, charge, claim, demand, cost, damage or otherwise, (b) the rights and
remedies of Lender under any Loan Document, or the ability of Borrower to
perform any of its obligations under any Loan Document to which it is a party,
(c) the legality, validity or enforceability of any Loan Document, (d) the
existence, perfection or priority of any security interest granted in any Loan
Document, or (e) Facility Tenant’s ability to accept, admit and/or retain
patients to the extent that any adverse change in the ability of Facility
Tenant’s ability to accept, admit and/or retain patients results, in whole or in
part, from the action or inaction of Borrower; or (ii) the imposition of a fine
against or the creation of any liability of Borrower or Facility Tenant to any
Governmental Authority under any Legal Requirement in excess of $500,000.00
(with respect to Borrower) or in excess of $1,000,000.00 (with respect to
Facility Tenant) unless the same is being contested pursuant to Section 5.6 and
such contest results in a final adjudication that is favorable to Borrower or
Facility Tenant, as applicable.
Material Alterations: Any Alterations that (i) would materially enlarge or
reduce the size of the Facility; (ii) would tie in or connect with any
improvements on property adjacent to the Land; or (iii) would affect the
structural components of the Facility or the main electrical, mechanical,
plumbing, elevator or ventilating and air conditioning systems for the Facility
in any material respect.
Material Contract: As such term is defined in Section 6.2(m).
Maturity Date: The earlier of (i) the last date of the calendar month that is a
full thirty-six (36) months from the Closing Date or any earlier date on which
the Loan shall be required to be paid in full, whether by acceleration or
otherwise, or Borrower elects to prepay the Loan in full pursuant to
Section 3.5, or (ii) the date on which Lender or an Affiliate of Lender acquires
the Facility pursuant to the call or put option set forth in the Option
Agreement.
Maximum Legal Rate: The maximum non-usurious interest rate, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or
received on the indebtedness evidenced by the Note and as provided for herein or
the other Loan Documents, under the laws of such state or states whose laws are
held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan.
Medicaid: That certain program of medical assistance, funded jointly by the
federal government and the states for impoverished individuals who are aged,
blind and/or disabled, and for members of families with dependent children,
which program is more fully described in Title XIX of the Social Security Act
(42 U.S.C. §§ 1396 et seq.) and the regulations promulgated thereunder.
Medicare: That certain federal program providing health insurance for eligible
elderly and other individuals, under which physicians, hospitals, nursing
facilities, home health care and other providers are reimbursed for certain
covered services they provide to the beneficiaries of such program, which
program is more fully described in Title XVIII of the Social Security Act (42
U.S.C. §§ 1395 et seq.) and the regulations promulgated thereunder.
Net Casualty Proceeds: All Casualty Proceeds or any portion thereof, after
deduction of reasonable costs and expenses (including, but not limited to,
reasonable attorneys’ fees), if any, in collecting such Casualty Proceeds.
Net Casualty Proceeds Deficiency: As such term is defined in Section 8.3(b)(vi).

54151.4    8

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Note: As such term is defined in Recital B.
Notice: As such term is defined in Section 11.26.
OFAC List: As such term is defined in Section 5.4(g).
OFAC Rules: As such term is defined in Section 5.4(g).
Operating Expenses: All of the costs and expenses (net of extraordinary items)
payable by Borrower and relating to the operation, maintenance and management of
the Facility and the assets and business of Borrower and Facility Tenant (as
applicable), including, without limitation, if applicable, utilities, repairs
and maintenance, insurance premiums, advertising expenses, payroll and related
taxes and equipment lease payments.
Operative Documents: Collectively, the Loan Documents and Facility Lease.
Option Agreement: That certain Option Agreement of even date herewith, by and
between Lender and Borrower, pursuant to which, Borrower has granted to Lender a
purchase option to acquire the Facility and Lender has granted to Borrower a put
option to require Lender to acquire the Facility.
Ordinary Course of Business: In respect of any transaction involving Borrower,
the ordinary course of business of Borrower, as conducted by Borrower in
accordance with past practices. In respect of any transaction involving the
Facility or the operations thereof, the ordinary course of operations for the
Facility, as conducted by Facility Tenant or Borrower, as applicable, in
accordance with past practices.
Organizational Documents: Borrower’s partnership agreement and certificate of
formation; together with its incumbency certificate, resolutions, and
certificate of good standing.
Payment Date: The due date for the payment of the installments of interest and
principal hereunder and under the Note or any other sums payable under this
Agreement or any other Loan Document.
Patriot Act: As such term is defined in Section 5.4(g).
Permitted Contingent Obligations: Each of the foregoing: (i) Contingent
Obligations arising in respect of the Debt under the Loan Documents;
(ii) Contingent Obligations resulting from endorsements for collection or
deposit in the Ordinary Course of Business; (iii) Contingent Obligations
incurred in the Ordinary Course of Business with respect to surety and appeal
bonds, performance bonds and other similar obligations not to exceed $200,000 in
the aggregate at any time outstanding; (iv) Contingent Obligations arising under
indemnity agreements with title insurers to cause such title insurers to issue
to Lender or the lenders under any other Permitted Debt mortgagee title
insurance policies; (v) Contingent Obligations arising with respect to customary
indemnification obligations in favor of purchasers in connection with
dispositions of personal property assets permitted under Section 5.2(c); and
(vi) other Contingent Obligations not permitted by clauses (i) through
(v) above, not to exceed $200,000 in the aggregate at any time outstanding.
Permitted Debt: Each of the following: (i) the Indebtedness; (ii) Debt in the
form of insurance premiums financed through the applicable insurance company;
and (iii) trade accounts payable arising and paid on a timely basis and in the
Ordinary Course of Business.

54151.4    9

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Permitted Exceptions: Those title exceptions or defects which Lender has
approved to appear as exceptions on the Title Policy and thereafter such other
title exceptions as expressly permitted under the provisions of the Loan
Documents or as Lender may otherwise reasonably approve in writing.
Permitted Investments: Each of the following: (i) cash and cash equivalents;
(ii) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the Ordinary Course of
Business; (iii) Investments consisting of travel advances and employee
relocation loans and other employee loans and advances in the Ordinary Course of
Business; (iv) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or
suppliers arising in the Ordinary Course of Business; (v) Investments consisting
of notes receivable of customers and suppliers who are not Affiliates, in the
Ordinary Course of Business; (vi) Investments consisting of deposit accounts
maintained in the Ordinary Course of Business; and (vii) other Investments in an
amount not exceeding $100,000 in the aggregate.
Person: Any individual, corporation, partnership, limited liability company,
joint venture, estate, trust, unincorporated association, any other entity, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
Personal Property: As such term is defined in Section 5.2(c).
Potential Default: Any event, fact or circumstance that with notice, the passage
of time, or both would constitute an Event of Default.
Prohibited Person(s): As such term is defined in Section 5.4(g).
Primary Intended Use: The type of healthcare facility corresponding to the
Facility as shown on Schedule 2 attached hereto, and such other healthcare uses
as may be permitted in the Facility Lease.
Provider Agreements: Any agreements under which healthcare facilities are
eligible to receive payment under Medicare, Medicaid or any Third Party Payor
Program from Governmental Authorities or non-public entities.
Remedial Work: As such term is defined in Section 7.4.
Restoration: The repair and restoration of the Facility after a Casualty or
Condemnation as nearly as possible to the condition the Facility was in
immediately prior to such Casualty or Condemnation, and otherwise in accordance
with Section 8.3.
Restoration Threshold: Two Hundred Fifty Thousand Dollars ($250,000).
State: The State of Texas.
Subdivision Statutes: All applicable statutes, rules, regulations and
administrative guidelines regarding the subdivision of real property in the
State.
Subsidiary: With respect to any Person, any (i) corporation of which an
aggregate of more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, capital stock of any
other class

54151.4    10

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or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of more than fifty percent (50%) of such capital stock
whether by proxy, agreement, operation of law or otherwise; and (ii) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
Third Party Payor: Any Person, from time to time, that maintains a Third Party
Payor Program.
Third Party Payor Programs: Any third party payor programs pursuant to which
healthcare facilities qualify for payment or reimbursement for medical or
therapeutic care or other goods or services rendered, supplied or administered
to any admittee or patient by or from any Governmental Authority, bureau,
corporation, agency, commercial insurer, non-public entity, “HMO,” “PPO” or
other comparable party.
Title Insurer: Bridge Title Company, 3100 Monticello, Suite 800, Dallas, Texas
75205, Attn: Benjamin Murphy.
Title Policy: A TLTA Lender’s Policy of Title Insurance, insuring that on the
Closing Date, the Deed of Trust constitutes a valid first priority lien on the
Facility, subject only to the Permitted Exceptions, in the amount of the Loan.
Transfer: Any (i) sale, transfer, lease, conveyance, alienation, pledge,
assignment, mortgage, encumbrance, hypothecation or other disposition of (a) all
or any portion of the Facility or any interest therein, or (b) more than
twenty-five percent (25%) of the partnership interests in Borrower (including
any interest in the profits, losses or cash distributions in any way relating to
Borrower) or more than twenty-five percent (25%) of the membership, partnership
or ownership interest in any entity which holds more than a ten percent (10%)
interest in, or directly or indirectly controls, Borrower; (ii) creation of any
new ownership interest in Borrower (including any interest in the profits,
losses or cash distributions in any way relating to Borrower); or (iii) Change
in Control with respect to Borrower.
2.2
Principles of Construction.

All references to sections and schedules are to sections and schedules in or to
this Agreement unless otherwise specified. Any reference in this Agreement or in
any other Loan Document to any Loan Document shall be deemed to include
references to such documents as the same may hereafter be amended, modified,
supplemented, extended, replaced and/or restated from time to time (and, in the
case of any note or other instrument, to any instrument issued in substitution
therefor). Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined. The word “include(s)” when used in this Agreement and the
other Loan Documents means “include(s), without limitation,” and the word
“including” means “including, but not limited to.” Unless otherwise expressly
provided, capitalized terms used in referenced defined terms or provisions or
Schedules or Exhibits, as the case may be, shall have the meanings assigned to
such capitalized terms in the specific Loan Document in which such defined terms
or provisions appear or to which such Schedules or Exhibits are appended. All
terms defined in this Agreement shall, unless otherwise defined therein, have
the same meanings when used in the Note, the Deed of Trust, the other Loan
Documents, or any certificate or other document made or delivered pursuant
hereto.

54151.4    11

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ARTICLE 3
LOAN AND LOAN DOCUMENTS
3.1
Agreement to Lend and Borrower; Loan Balancing.

Subject to the terms, provisions and conditions of this Agreement and the other
Loan Documents, on the Closing Date, Borrower agrees to borrow from Lender and
Lender shall disburse to Borrower the Loan Amount. The Loan shall be repaid in
accordance with the terms of this Agreement and the Note. Any portion of the
Loan borrowed and repaid hereunder may not be re-borrowed.
3.2
Conditions Precedent to Making the Loan.

Borrower agrees that Lender’s obligation to close the Loan is conditioned upon
(a) Lender’s receipt, if applicable, and approval of all of the items set forth
in Exhibit B; (b) Borrower’s delivery to Lender of the items and documents set
forth in Exhibit C, in form and content satisfactory to Lender, duly executed
(and acknowledged where necessary) by the appropriate parties thereto; (c) no
Event of Default or Potential Default existing; and (d) all representations and
warranties of Borrower contained in this Agreement and any other Loan Document
being true and correct in all material respects.
3.3
Term of the Loan.

The term of the Loan shall commence on the Closing Date and shall end on the
Maturity Date (the “Loan Term”).
3.4
Interest.

(a)    Interest Rate. Provided that no Event of Default exists (in which event
the Default Rate shall be applicable), the principal amount of the Loan
outstanding from time to time shall bear interest until paid at the Interest
Rate.
(b)    Computation. Interest on the principal amount of the Loan shall be
calculated based on a three hundred sixty (360) day year and charged for the
actual number of days elapsed.
(c)    Default Interest. If, and for so long as, an Event of Default shall have
occurred and be continuing, the outstanding principal balance of the Loan shall
accrue interest at a rate per annum equal to the Default Rate, calculated from
the date the event occurred which led to such an Event of Default without regard
to any grace or cure periods contained herein.
(d)    Usury Savings. This Agreement and the other Loan Documents are subject to
the express condition that in no event shall the interest contracted for,
charged, taken, reserved or received with respect to this Agreement or the Loan
or any other obligations of Borrower under this Agreement or any of the other
Loan Documents exceed the Maximum Legal Rate. Notwithstanding anything to the
contrary set forth herein or in any of the other Loan Documents, if at any time
the rate or amount of interest payable, charged, taken, reserved, or received
under this Agreement or any of the other Loan Documents (the “Stated Rate”)
would exceed the Maximum Legal Rate, then for so long as the Maximum Legal Rate
would be so exceeded, the rate or amount of interest payable shall be equal to
the Maximum Legal Rate; provided, however, that if at any time thereafter the
Stated Rate is less than the Maximum Legal Rate, Borrower shall, to the extent
permitted by law, continue to pay interest at the Maximum Legal Rate until such
time as the total interest received is equal to the total interest which would
have been received had the Stated Rate been (but for the operation of this
provision) the interest rate or amount payable. Thereafter, the interest rate or
amount payable

54151.4    12

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shall be the Stated Rate unless and until the Stated Rate again would exceed the
Maximum Legal Rate, in which event this provision shall again apply. In no event
shall the total interest paid, charged, taken, reserved or received by Lender
exceed the maximum rate or amount which it could lawfully have charged, taken,
reserved, or received had the interest been calculated, spread or amortized for
the full term hereof at the Maximum Legal Rate. If, notwithstanding the prior
sentence, Lender has received interest under this Agreement or under any of the
other Loan Documents at a rate or amount in excess of the Maximum Legal Rate,
such excess rate or amount shall be applied to the reduction of the principal
balance of the Loan or to other amounts (other than interest) payable hereunder,
and if no such principal or other amounts are then outstanding, such excess or
part thereof remaining shall be paid to Borrower. In computing interest payable
with reference to the Maximum Legal Rate applicable to Lender, such interest
shall be calculated at a daily rate equal to the Maximum Legal Rate divided by
the number of days in the year in which such calculation is made.
3.5
Loan Payments.

(a)    Monthly Interest Payments; Accrued Interest. Borrower shall make a
payment to Lender of interest only on the Closing Date for the period from the
Closing Date through and including October 31, 2013. Commencing on December 1,
2013 and continuing on the first (1st) day of each calendar month thereafter,
Borrower shall make payments of interest on the outstanding principal balance of
the Loan calculated in arrears at the Interest Rate, provided, however, if the
Default Rate shall be applicable, interest shall be so calculated at the Default
Rate and interest payable at the Default Rate following an Event of Default
shall be payable from time to time on demand of Lender. In any event, upon the
payment or prepayment of any principal of any portion of the Loan, accrued and
unpaid interest on the principal amount so paid or prepaid shall be due and
payable.
(b)    Payment on Maturity Date. Borrower shall pay to Lender the outstanding
principal balance of the Loan, all accrued and unpaid interest and all other
Indebtedness due under the Loan Documents on the Maturity Date.
(c)    Late Charge. If any monthly interest payment or any other amount due
hereunder or under the Note or the other Loan Documents (other than the final
payment of principal) is not timely made within five (5) days of its Payment
Date, Borrower, at the option of Lender, shall promptly pay a late charge equal
to five percent (5%) of the amount of such delinquent payment to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of the delinquent payment.
Borrower and Lender agree that such late charge represents a fair and reasonable
estimate of the costs that Lender will incur by reason of a late payment by
Borrower. In addition, any monthly interest payment or any other amount due
hereunder or under the Note or the other Loan Documents (including the final
payment of principal) is not timely made within fifteen (15) days of its Payment
Date, the amount unpaid, including any late charges, shall bear interest at the
Default Rate, compounded monthly from such Payment Date to the date of payment
thereof, and Borrower shall pay such interest to Lender on demand. Any such late
charge or interest shall be secured by the Deed of Trust and the other Loan
Documents to the extent permitted by applicable law. The payment of such late
charge or such interest shall neither constitute waiver of nor excuse or cure
the late payment giving rise to such late charge or interest nor prevent Lender
from exercising any other rights and remedies available to Lender arising from
such late payment.
(d)    Prepayments. The Loan may not be voluntarily prepaid in full or in part
prior to the first day of the thirty first (31st) full calendar month after the
Closing Date (the “Lockout Period”), except in the event of a purchase of the
Facility by Lender or an Affiliate of Lender pursuant to either of the options
set forth in the Option Agreement. Thereafter, Borrower shall have the right to
make prepayments of the Loan

54151.4    13

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in whole, but not in part, at any time provided Borrower (i) gives Lender
written notice of such prepayment not more than sixty (60) days and not less
than ten (10) Business Days prior to the date of such prepayment; provided,
however, such written notice shall not be required in the event of a purchase of
the Facility by Lender or an Affiliate of Lender pursuant to either of the
options set forth in the Option Agreement; and (ii) such prepayment is
accompanied by all accrued and unpaid interest on the amount so prepaid up to
and including the date of prepayment, if any. If Borrower elects to prepay the
Loan, such election shall be irrevocable. If Borrower fails to prepay the Loan
on the date specified in such written notice, such failure shall constitute an
immediate Event of Default.
(e)    Method and Place of Payment. Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Lender by electronic funds transfer debit transactions through wire
transfer of immediately available funds and shall be initiated by Borrower for
settlement on the date when due, and shall be made in lawful money of the United
States of America. For purposes of making payments hereunder, but not for
purposes of calculating interest accrual periods, whenever any payment to be
made hereunder or under any other Loan Document shall be stated to be due on a
day that is not a Business Day, the due date thereof shall be the immediately
following Business Day. Lender shall provide Borrower with appropriate wire
transfer information. Borrower shall inform Lender of payment by sending a
facsimile or e-mail transmission of Borrower’s wire transfer confirmation not
later than noon, Pacific Standard or Daylight Savings time on each date when a
payment is due hereunder or the Note or by such other means as Lender may
reasonably require.
(f)    No Set-Off. All payments required to be made or caused to be made by
Borrower hereunder or under the Note or the other Loan Documents shall be made
irrespective of, and without deduction for, any setoff, claim or counterclaim
and shall be made irrespective of any defense thereto.
ARTICLE 4
FINANCIAL REPORTING COVENANTS
4.1
Maintenance of Books and Records.

Borrower shall keep and maintain, or cause to be kept and maintained, proper and
accurate books and records in accordance with GAAP, which books and records
shall in all material respects reflect the financial affairs of Borrower. Lender
shall have the right, from time to time during normal business hours after three
(3) Business Days prior oral or written notice to Borrower, to examine and audit
such books and records at the office of Borrower and to make such copies or
extracts thereof as Lender shall request, and Borrower hereby agrees to
reasonably cooperate with any such examination or audit; provided, however, the
cost of such examination or audit shall be borne by Lender, except during the
continuation of an Event of Default, in which case, the cost of any such
examination or audit shall be borne by Borrower and shall be payable within
fifteen (15) days of Lender’s demand therefor.
4.2
Financial, Management and Regulatory Reports.

Borrower shall provide Lender with the reports listed in Exhibit D within the
applicable time specified therein. All financial information provided shall be
prepared in accordance with GAAP or Adjusted GAAP, as applicable, and shall be
submitted electronically using the applicable template provided by Lender from
time to time or, if no such template is provided by Lender, in the form of
unrestricted, unlocked “.xls” spreadsheets created using Microsoft Excel (2003
or newer editions) or in such other form as Lender may reasonably require from
time to time. Borrower shall be assessed with a $500 administrative fee for each
instance in which Borrower fails to provide Lender with the reports listed in
Exhibit D within the applicable time specified therein, which administrative fee
shall be immediately due and payable to Lender; provided,

54151.4    14

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however, such fee shall not be assessed for the first (1st) report that is not
so provided by Borrower within a given calendar year if such report is delivered
within five (5) days of Lender’s written demand therefor.
4.3
Additional Information.

In addition to the reports required under Section 4.2 above, upon Lender’s
request from time to time, Borrower shall use its commercially reasonable
efforts to provide Lender with such additional information and unaudited
quarterly financial information concerning Borrower and the Facility and the
operations thereof as Lender may require for purposes of its ongoing filings
with the Securities and Exchange Commission, under both the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended,
including, but not limited to, 10-Q Quarterly Reports, 10-K Annual Reports and
registration statements to be filed by Lender during the Loan Term, subject to
the conditions that Borrower shall not be required to disclose information that
is material non-public information or is subject to the quality assurance
immunity or is subject to attorney-client privilege or the attorney work product
doctrine.
4.4
Publication of Borrower’s Reports.

Borrower specifically agrees that Lender may include financial information and
such information concerning the operation of the Facility which does not violate
the confidentiality of the facility-patient relationship and the
physician-patient privilege under applicable laws, in offering memoranda or
prospectuses, or similar publications in connection with syndications, private
placements or public offerings of Lender’s securities or interests, and any
other reporting requirements under applicable federal or state laws, including
those of any successor to Lender.
ARTICLE 5
OPERATIONAL AND OTHER COVENANTS
5.1
Organizational Covenants.

(a)    Prohibition of Assignments and Transfers by Borrower. Borrower shall not
assign or attempt to assign its rights under this Agreement and any purported
assignment shall be void. Without the prior written consent of Lender, which
consent may be withheld in Lender’s sole discretion, Borrower shall not suffer
or permit any Transfer.
(b)    Organizational Matters. Borrower shall not, without the prior written
consent of Lender, (i) amend or modify any Organizational Document;
(ii) dissolve or terminate its existence; or (iii)  change its state of
formation or its name. Borrower shall remain in good standing under its
applicable state of formation.
(c)    Notice of Change. Borrower shall give Lender prior written notice of any
change in: (i) the location of Borrower’s place of business or its chief
executive office if it has more than one place of business; and (ii) the
location of Borrower’s books and records.
(d)    Affiliate Transactions. Prior to Borrower entering into any agreement
with an Affiliate pertaining to the Facility, Borrower shall deliver to Lender a
copy of such agreement, which shall be satisfactory to Lender in its reasonable
discretion, and the terms of which shall be substantially similar to those that
would be available on an arm’s length basis with unaffiliated third parties for
similar agreements. If requested by Lender, such agreement shall provide Lender
the right to terminate it upon Lender’s (or its designee’s) taking possession of
the Facility

54151.4    15

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(e)    Restrictive Agreements. Borrower shall not directly or indirectly enter
into or assume any agreement prohibiting the creation or assumption of any Lien
upon its properties or assets, whether now owned hereafter acquired.
(f)    Limited Purpose. Borrower shall do all things necessary to observe
organizational formalities and preserve its existence. Borrower shall maintain
all of its books, records, financial statements and bank accounts separate from
those of its Affiliates. Borrower shall not, nor permit any other Person to,
list Borrower’s assets as assets on the financial statement of any other Person.
Borrower shall file its tax returns in the same manner as Borrower has filed its
tax returns previously and in the Ordinary Course of Business. Borrower shall
maintain its books, records, resolutions and agreements as official records.
(g)    Organizational Formalities. Borrower shall at all times (i) hold itself
out to the public as a legal entity separate and distinct from any other entity;
(ii) correct any known misunderstanding regarding its status as a separate
entity; (iii) conduct business in its own name; (iv) not identify itself or any
of its Affiliates as a division or part of the other, provided, however, that
Borrower shall be permitted to hold itself out to the public as a common
enterprise with its Affiliates; (v) maintain and utilize separate stationery,
invoices and checks bearing its own name; (vi) maintain, adequate capital for
its normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations; (vii) use
commercially reasonable efforts to maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person; (viii) not guarantee or become obligated for the debts of any Affiliate
or hold itself out to be responsible for or have its credit available to satisfy
the debts or obligations of any Affiliate; (ix) compensate each of its
consultants and agents from its own funds for services provided to it and pay
from its own assets all obligations of any kind incurred; and (x) not commingle
its funds or other assets with those of any Affiliate or constituent party or
any other Person, and will hold all of its assets in its own name.
(h)    Employees. Borrower shall not have any employees during the Loan Term.
(i)    Furnishing Notices. Borrower shall promptly provide Lender with written
notice of (i) any litigation, arbitration or other proceeding or governmental
investigation pending or, to Borrower’s Knowledge, threatened against Borrower,
Facility Tenant or the Facility that would reasonably be expected to have a
Material Adverse Effect and of which Borrower has Knowledge; (ii) the existence
of any Event of Default; and (iii) any infringement by Borrower or claim of
infringement against Borrower by any other Person with respect to any
Intellectual Property that would reasonably be expected to have a Material
Adverse Effect.
5.2
Operational Covenants.

(e)    Use of Property. Borrower shall cause (subject to Section 8.2) the
Facility to continuously be occupied by Facility Tenant and used solely for the
operation of an acute care hospital and all services reasonably related thereto,
including in-patient, out-patient acute hospital services, skilled nursing
services, rehabilitation services, transitional services, diagnostic services,
pharmaceutical services, health care education, research and training, physician
and health care professional services, public health and disease prevention
programs, and other uses and services reasonably related to the operation of a
surgery center.
(f)    Maintenance and Preservation Obligation. Borrower shall (or shall cause
Facility Tenant to): (i) keep and maintain the Facility in good appearance,
repair and condition, and maintain proper housekeeping; (ii) promptly make all
repairs (interior and exterior, structural and nonstructural, ordinary and
extraordinary, foreseen and unforeseen) necessary to keep the Facility in good
and lawful order and condition

54151.4    16

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and in compliance with all Legal Requirements, Insurance Requirements and
Authorizations, and to maintain the Facility in an operating and structural
condition for use for the Primary Intended Use in the Ordinary Course of
Business; and (iii) keep and maintain all Personal Property in good condition
and repair and replace such property consistent with prudent industry practice
pursuant to Section 5.2(c) below. Borrower shall cause, or shall cause Facility
Tenant to cause, all such repairs to be done in a good and workmanlike manner.
(g)    Personal Property. Borrower shall cause Facility Tenant to obtain and
install all items of furniture, fixtures, supplies and equipment as shall be
necessary or reasonably appropriate to operate the Facility for the Primary
Intended Use (collectively, the “Personal Property”) and in the Ordinary Course
of Business.
(h)    Alterations. Without the prior written consent of Lender, Borrower shall
not make, or permit to be made, any Capital Alterations or Material Alterations
to the Facility, except to the extent expressly permitted under the Facility
Lease without Borrower’s consent, in which case, and notwithstanding anything to
the contrary herein, Lender’s prior consent shall not be required. If Lender
consents to the making of any Capital Alterations or Material Alterations
(provided Lender’s consent is required by this Agreement), Lender may impose
commercially reasonable conditions thereon in connection with its approval
thereof. Without Lender’s consent, Borrower may make, or may permit to be made,
any other Alterations provided the same (i) do not decrease the value of the
Facility; (ii) do not adversely affect the exterior appearance of the Facility;
and (iii) are consistent in terms of style, quality and workmanship to the
original Improvements, and provided further that the same are constructed and
performed in accordance with the following:
(i)    Such construction shall not commence until Borrower or Facility Tenant,
as applicable, shall have procured and paid for all municipal and other
governmental permits and authorizations required therefor (as well as any
permits or approvals required in connection with any Permitted Exceptions);
(ii)    During and following completion of such construction, the parking that
is located on the Land shall remain adequate for the operation of the Facility
for the Primary Intended Use and in no event shall such parking be less than
what is required by any applicable Legal Requirements;
(iii)    All work done in connection with such construction shall be done
promptly and in a good and workmanlike manner using materials of appropriate
grade and quality consistent with the existing materials and in conformity with
all Legal Requirements;
(iv)    If, by reason of the construction of any Alteration, a new or revised
certificate of occupancy for any component of the Facility is required, Borrower
or Facility Tenant, as applicable, shall obtain such certificate in compliance
with all applicable Legal Requirements and furnish a copy of the same to Lender
promptly upon receipt thereof; and
(v)    Upon completion of any Alteration of which Borrower has actual knowledge,
Borrower shall promptly deliver (or cause to be delivered) to Lender final lien
waivers from each and every general contractor and, with respect to Alterations
costing in excess of $250,000.00, each and every subcontractor that provided
goods or services costing in excess of $50,000.00 in connection with such
Alterations indicating that such contractor or subcontractor has been paid in
full for such goods or services, together with such other evidence as Lender may
reasonably require to satisfy Lender that no liens have been created in
connection with such Alteration; provided, however, with respect to any
Alterations completed by Facility Tenant, Borrower shall only be obligated to
deliver lien waivers to the extent that the Facility Tenant is required to
deliver the same to Borrower pursuant to the Lease.

54151.4    17

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(i)    Zoning. Without Lender’s prior written consent, Borrower shall not
initiate or acquiesce in a change in the plat of subdivision, or zoning
classification or use of the Facility.
(j)    Payment of Operating Expenses. Borrower shall pay and discharge, or shall
cause Facility Tenant to pay and discharge, on a timely basis prior to
delinquency, all Operating Expenses, except for such Operating Expenses that are
being contested pursuant to Section 5.6 below or those for which the nonpayment
or nondischarge could not reasonably be expected to have a Material Adverse
Effect or result in a Lien against the Facility or any portion thereof, except
for Permitted Exceptions. Borrower shall maintain, or cause Facility Tenant to
maintain, in accordance with GAAP, appropriate reserves for the accrual of all
Operating Expenses. Borrower shall not breach or permit to exist any default
under, the terms of any lease, commitment, contract, instrument or obligation to
which it is a party, or by which its properties or assets are bound, except for
such breaches or defaults which could not reasonably be expected to have a
Material Adverse Effect.
(k)    Payment of Impositions. Subject to Section 5.6, Borrower shall pay, or
shall cause Facility Tenant to pay, all Impositions no less than five (5) days
prior to the date on which a fine, penalty, interest or cost may be added for
non-payment thereof and furnish to Lender evidence thereof prior to such date.
(l)    Laborers, Subcontractors and Materialmen. Borrower shall notify Lender
promptly if it receives any default notice, notice of lien or demand for past
due payment, written or oral, from any laborer, subcontractor or materialmen,
and the amount of the lien claim is in excess of $50,000.00.
(m)    Liens. Subject to Section 5.6 and excluding the applicable Permitted
Exceptions, Borrower shall not suffer or permit any Lien to be filed or
otherwise asserted against the Facility; provided, however, Borrower may,
without Lender’s prior written consent, grant easements to cable and telephone
service providers and other providers of utility services to the Facility so
long as the granting of such easement does not have a Material Adverse Effect.
(n)    Compliance With Laws and Material Contracts. Borrower shall (i) comply in
all material respects with all Legal Requirements and Insurance Requirements
applicable to Borrower regarding the ownership of the Facility, except to the
extent that failure to so comply could not reasonably be expected to have a
Material Adverse Effect; and (ii) comply, in all material respects, with all
Material Contracts, except to the extent that failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
(o)    Material Contracts. Borrower shall not amend, modify, supplement or
otherwise change the terms of any Material Contract if the same (i) is contrary,
in any material respect, to the terms of this Agreement or any other Loan
Document; (ii) could reasonably be expected to be adverse in any material
respect to the rights, interests or privileges of Lender or its ability to
enforce the same; (iii) results in the imposition or expansion in any material
respect of any obligation of or restriction or burden on Borrower; or
(iv) reduces in any material respect any rights or benefits of Borrower.
Borrower shall deliver to Lender an executed copy of any amendments or
modifications to any Material Contracts entered into during the Loan Term.
(p)    Facility Lease. Borrower shall not (i) amend, modify, supplement or
otherwise change the terms of the Facility Lease or any guaranty thereof, or
(ii) exercise any remedy of termination or repossession under the Facility
Lease, in each case, without Lender’s prior written consent, which consent may
be granted or withheld in Lender’s sole and absolute discretion. Borrower shall
fully and timely comply with all of the terms and provisions of the Facility
Lease. Without limiting the generality of Section 5.1(i), Borrower agrees that
within 24 hours of its receipt of any notice of default or potential default
from Facility Tenant, Borrower shall deliver a copy of such notice to Lender.
Borrower further covenants that it shall promptly and in good faith cooperate
with Lender in Lender’s efforts to effectuate a timely cure of any default or
potential default

54151.4    18

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arising under the Facility Lease, with all costs incurred by Lender in
connection therewith becoming immediately due and payable by Borrower upon
written demand by Lender. Nothing in the foregoing shall be deemed to require
Lender to effectuate a cure of any defaults or potential defaults under the
Facility Lease.
(q)    Facility Tenant. Borrower shall not (i) enter into any other agreement
relating to the management or operation of the Facility with Facility Tenant or
any other Person, (ii) consent to the assignment by Facility Tenant of its
interest under the Facility Lease, or (iii) waive or release any of its rights
and remedies under the Facility Lease, in each case, without the prior written
consent of Lender. Such restrictions and approval rights are solely for the
purposes of assuring that the Facility is managed and operated in the Ordinary
Course of Business and consistent with Legal Requirements and the preservation
and protection of the Facility and shall not place responsibility for the
control, care, management or repair of the Facility upon Lender, or make Lender
responsible or liable for any negligence in the management, operation, upkeep,
repair or control of the Facility.
5.3
Financial Covenants.

(g)    No Additional Debt or Contingent Obligations. Borrower shall not,
directly or indirectly, create, incur, assume, guarantee or otherwise become or
remain directly or indirectly liable with respect to (i) any Debt except for
Permitted Debt; or (ii) any Contingent Obligations except for Permitted
Contingent Obligations. Borrower shall not default on the payment of any
Permitted Debt or Permitted Contingent Obligations unless the same could not
reasonably be expected to have a Material Adverse Effect.
(h)    Purchase of Assets, Investments. Borrower shall not, directly or
indirectly, (i) acquire or enter into any agreement to acquire any assets other
than in the Ordinary Course of Business; (ii) engage or enter into any agreement
to engage in any joint venture or partnership with any other Person; or
(iii) acquire, own or enter into any agreement to acquire or own any Investment
other than Permitted Investments.
5.4
Loan Covenants.

(a)    Loss of Note or other Loan Documents. Upon notice from Lender of the
loss, theft, or destruction of the Note and upon receipt of an affidavit of lost
note and an indemnity reasonably satisfactory to Borrower from Lender, or in the
case of mutilation of the Note, upon surrender of the mutilated Note, Borrower
shall make and deliver a new note of like tenor in lieu of the then to be
superseded Note. If any of the other Loan Documents were lost or mutilated,
Borrower agrees to execute and deliver replacement Loan Documents in the same
form of such Loan Document(s) that were lost or mutilated.
(b)    Publicity. Lender reserves the right to publicize the making of the Loan
and, in such publicity, may include a description of the Facility and the Loan
and in connection therewith shall have the right to photograph and use pictures
of the Facility in any such advertisements, brochures, print, media and other
copy. All news releases, publicity or advertising by Borrower or its Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents shall be subject to
the prior written approval of Lender in its sole discretion; provided, however,
that without prior Lender consent, Borrower or its Affiliates may reference the
Loan generally without identifying Lender for any purpose, and may disclose any
and all information regarding the Loan or the Loan Documents (i) to its
attorneys, advisors, accountants, consultants agents, investors, partners,
employees, and lenders and (ii) in order to comply with Legal Requirements.
(c)    Indemnification. Borrower shall indemnify, defend and hold harmless each
Indemnified Party from and against all claims, injury, damage, liability,
criminal and civil penalties, judgments, suits, excise taxes and Expenses of any
and every kind arising from or related to (i) the, ownership, operation or

54151.4    19

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maintenance of the Facility; (ii) the breach of any representation or warranty
made hereunder or under any of the other Loan Documents; or (iii) the breach by
Borrower of any of its obligations under this Agreement or the other Loan
Documents (collectively, the “Indemnified Liabilities”). Notwithstanding the
immediately preceding sentence, no Indemnified Party shall be entitled to be
indemnified against its own negligence or willful misconduct. To the extent that
the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by such Indemnified Party. Upon written request by an
Indemnified Party that is entitled to indemnification hereunder, Borrower will
undertake, at its own costs and expense, on behalf of such Indemnified Party,
using counsel reasonably satisfactory to the Indemnified Party, the defense of
any legal action or proceeding. At Lender’s option, Lender may, at Borrower’s
expense, prosecute or defend any action involving the priority, validity or
enforceability of any of the Loan Documents; provided, however, Lender will use
commercially reasonable efforts to prosecute a claim for such action under the
Title Policy, and to the extent that Borrower has paid the cost of defending any
such action and Lender is subsequently reimbursed under the Title Policy, Lender
will remit such funds to Borrower. No provision in this Section 5.4(c) shall in
any manner limit or otherwise affect any indemnity to which Borrower is entitled
to claim from any other Person, including Facility Tenant.
(d)    Site Visits, Inspecting. With not less than forty-eight (48) hours prior
notice to Borrower, Lender and Lender’s Inspector shall, subject to the
reasonable security measures, safety rules or procedures established by Borrower
or Facility Tenant, have the right at any reasonable time during regular
business hours to enter and visit the Facility for the purpose of performing
appraisals and inspecting the Facility. Lender has no duty, however, to visit or
inspect the Facility, and no site visit or inspection by Lender shall impose any
liability on Lender. Neither Borrower nor any other Person is entitled to rely
on any site visit or inspection by Lender or Lender’s Inspector. Lender owes no
duty of care to protect Borrower or other Person against, or to inform Borrower
or other Person of, any adverse condition affecting the Facility. Lender shall
make reasonable efforts to avoid interfering with Borrower’s and Facility
Tenant’s use of the Facility in exercising any rights provided in this
Section 5.4(d).
(e)    Estoppel Certificates. Within fifteen (15) Business Days following
written request by Lender, Borrower shall furnish to Lender a certificate, duly
executed and certified, confirming (i) the amount of the original principal
amount of the Note, and the unpaid principal amount of the Note; (ii) the rate
of interest of the Note, (iii) the date payments of interest and/or principal
were last paid; (iv) any off-sets or defenses to the payment of the
Indebtedness, and if any are alleged, the nature thereof; (v) that the Note and
this Agreement have not been modified or if modified, giving particulars of such
modification; (vi) that no Event of Default has occurred and is then continuing
or if the same is not true, the nature of the Event of Default, the period of
time it has existed and the action being taken to remedy such Event of Default,
and (vii) such other factual matters as Lender may reasonably request,
including, without limitation, that the representations and warranties made
hereunder remain true and accurate in all material respects as of the date of
such certificate.
(f)    Further Assurances. Borrower shall, at its own cost and expense, promptly
and duly take, execute, acknowledge and deliver all such further acts, documents
and assurances as may from time to time be necessary or as Lender may from time
to time reasonably request to carry out the intent and purposes of this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby, including all such actions to establish, create, preserve, protect
and perfect a first priority lien in favor of Lender in the Facility.

54151.4    20

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(g)    Compliance With U.S.A. Patriot Act and Anti-Terrorism Laws. Borrower is
not and will not become a person (individually, a “Prohibited Person” and
collectively, “Prohibited Persons”) either listed on the specially Designated
Nationals and Blocked Persons List maintained by the Office of Foreign Asset
Control, U.S. Department of the Treasury (the “OFAC List”) or otherwise subject
to any other prohibition or restriction imposed by laws, regulations or
executive orders, including Executive Order No. 13224, administered by the
Office of Foreign Asset Control, U.S. Department of the Treasury (collectively
the “OFAC Rules”). Borrower (i) is not and will not become owned or controlled
by a Prohibited Person; (ii) is not acting and will not act for or on behalf of
a Prohibited Person; and (iii) is not providing and will not provide material,
financial or technological support or other services to or in support of acts of
terrorism of a Prohibited Person. Borrower will not enter into a lease with any
Prohibited Person. Borrower will not enter into any lease or undertake any
activities related to this Agreement in violation of the Federal Bank Secrecy
Act, 31 U.S.C. §5311, et seq. or any federal or state laws, including but not
limited to, 18 U.S.C. §§1956, 1957 and 1960 prohibiting money laundering and
terrorist financing (collectively, “Anti-Money Laundering Laws”). Borrower shall
provide such information as Lender may reasonably require from time to time to
permit Lender to satisfy its obligations under the USA Patriot Act (Title III of
Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), the OFAC
Rules or the Anti-Money Laundering Laws. Borrower shall immediately notify
Lender if Borrower has knowledge that Borrower or any member or beneficial owner
of Borrower is or becomes a Prohibited Person or (A) is convicted of, (B) pleads
nolo contendere to (C) is indicted on or (D) is arraigned and held over on
charges under the Anti-Money Laundering Laws or involving money laundering or
predicate crimes to money laundering.
5.5
Authorized Representative.

Borrower hereby appoints Derrick N. Evers as its “Authorized Representative” for
purposes of dealing with Lender on behalf of Borrower in respect of any and all
matters in connection with this Agreement, the other Loan Documents, and the
Loan. The Authorized Representative shall have the power, in his discretion, to
give and receive all notices, monies, approvals, and other documents and
instruments, and to take any other action on behalf of Borrower. All actions by
the Authorized Representative shall be final and binding on Borrower. Borrower
may appoint a new Authorized Representative with Lender’s prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed. Lender
may rely on the authority given to the Authorized Representative until actual
receipt by Lender of a duly authorized resolution substituting a different
person as the Authorized Representative whom Lender has previously approved. No
more than one person shall serve as Authorized Representative at any given time.
5.6
Contest Procedure.

Borrower shall have the right to contest in good faith and with reasonable
diligence the amount, validity or application, in whole or in part, of any Lien,
Operating Expense, Imposition, Legal Requirement or Insurance Requirement;
provided however, that (a) Borrower shall give Lender prior written notice of
its intent to so contest the obligation if the amount of such obligation exceeds
$250,000.00; (b) Borrower establishes such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP to be made on
its books and records and financial statements with respect to such obligation;
(c) compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge; (d) Borrower’s title to the Facility
is not adversely affected thereby; (e) the Facility or any part thereof or any
interest therein shall not be in any danger of being sold, forfeited or lost by
reason of such contest; (e) upon request by Lender, from time to time, Borrower
provides Lender with notice of the status of such contest and confirmation of
the continuing satisfaction of this definition; and (f) upon a final
determination of such contest, Borrower shall promptly comply with the
requirements thereof.

54151.4    21

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ARTICLE 6
BORROWER’S REPRESENTATIONS AND WARRANTIES
6.1
Organizational Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations
hereunder, each of Phase III Borrower and Phase I Borrower hereby represents and
warrants for itself to Lender that the following are true and correct as of the
Closing Date and covenants that the following shall remain true and correct in
all material respects through the Loan Term:
(r)    Organization. Borrower is duly organized, validly existing and in good
standing under the laws of the State of Texas with full power and authority to
own its assets and conduct its business. Borrower’s principal place of business
is 3030 Olive Street, Suite 220, Dallas, Texas 75219, and Borrower’s books of
accounts and records are located at its principal place of business. Borrower
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the other Loan Documents by it, and has the
power and authority to execute, deliver and perform under this Agreement, the
other Loan Documents and all the transactions contemplated hereby and thereby.
(s)    Binding Effect. This Agreement and the other Loan Documents have been
duly authorized, executed and delivered by Borrower and constitute legal, valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with their respective terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(t)    No Conflicts. The execution and delivery of this Agreement and the other
Loan Documents by Borrower and the performance of its obligations hereunder and
thereunder will not conflict with, result in a breach of, or constitute a
default under any of the terms, conditions or provisions of any Organizational
Document or any agreement or instrument to which Borrower is a party or by which
it is bound, or result in the creation or imposition of any Lien on any of
Borrower’s assets or property (other than pursuant to the Loan Documents), or,
to the best of Borrower’s Knowledge, conflict with any provision of any Law,
Legal Requirement or any order or other decree of any court or Governmental
Authority to which Borrower or the Facility is subject.
(u)    Enforceability. The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable,
and Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.
(v)    Organizational Documents. True and complete copies of the Organizational
Documents have been furnished to Lender. There are no other agreements, oral or
written, among any of the partners or members of Borrower other than the
Organizational Documents. The Organizational Documents were duly executed and
delivered, are in full force and effect, and binding upon and enforceable in
accordance with their terms. The Organizational Documents constitute the entire
understanding among the partners or members of Borrower relating to Borrower. No
breach exists under the Organizational Documents and no act has occurred and, to
Borrower’s Knowledge, no condition exists which, with the giving of notice or
the passage of time would constitute a breach under the Organizational
Documents.

54151.4    22

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(w)    Capitalization. The identity of the holders of the partnership interests
in Borrower and their respective partnership interests as of the Closing Date
are set forth on Schedule 1. No partnership interests in Borrower, other than
those described above, are issued and outstanding as of the Closing Date. As of
the Closing Date there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from Borrower of any partnership interest of Borrower.
No partnership interest in Borrower is certificated.
(x)    No Bankruptcy Action; Solvency. None of Borrower or any beneficial owner
of Borrower is Insolvent and there has been no Bankruptcy Action by or against
any of them. Borrower has (i) not entered into the transaction or any Loan
Document with the actual intent to hinder, delay, or defraud any creditor; and
(ii) received reasonably equivalent value in exchange for its obligations under
the Loan Documents. Borrower’s assets do not and, immediately following the
making of the Loan will not, constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted.
(y)    Foreign Person. None of Borrower or, to Borrower’s Knowledge, any
beneficial owner of Borrower is or will be a “foreign corporation”, “foreign
partnership”, “foreign trust”, “foreign estate”, “foreign person”, “affiliate”
of a “foreign person” or a “United States intermediary” of a “foreign person”
within the meaning of the Internal Revenue Code Sections 897, 1445 or 7701, the
Foreign Investments in Real Property Tax Act of 1980, the International
Investment and Trade Services Survey Act, the Agricultural Foreign Investment
Disclosure Act of 1978, or the regulations promulgated pursuant to such Acts or
any amendments to such Acts.
(z)    OFAC. Neither Borrower nor, to Borrower’s Knowledge, any beneficial owner
of Borrower is currently listed on the OFAC List.
(aa)    Investment Company Act. Borrower is not an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended.
(bb)    Employees. Borrower has no employees.
6.2
Operational Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations
hereunder, each of Phase III Borrower and Phase I Borrower hereby represents and
warrants for itself to Lender that the following are true and correct as of the
Closing Date and covenants that the following shall remain true and correct in
all material respects through the Loan Term, except where any of the following
are qualified as to certain dates:
(i)    Physical Condition. To the best of Borrower’s Knowledge, except as may be
disclosed to Lender in writing, there are presently no existing material defects
in the Facility and no material repairs (except in the ordinary course of
business) or alterations thereof are reasonably necessary or appropriate. Except
as may be disclosed to Lender in writing, Borrower has not received notice from
any insurance company or bonding company of any defects or inadequacies in the
Facility, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or
of any termination or threatened termination of any policy of insurance or bond.
(j)    Title. Borrower has indefeasible fee simple title to the Land and
Improvements and good title to the Personal Property owned by Borrower and the
Intangible Property owned by Borrower, free and clear of all Liens except the
Permitted Exceptions and the Deed of Trust.

54151.4    23

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(k)    Trade Name; Other Intellectual Property. Except for the Intangible
Property and licenses arising from the purchase of “off the shelf” products,
Borrower does not own, possess, license or use (as the case may be) any patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, websites, domain names or copyrights related
to the Facility.
(l)    Utilities and Public Access. The Facility has rights of access to public
rights-of-way and either the Facility is served by water, sewer, sanitary sewer
and storm drain facilities required for the operation of the Facility for the
Primary Intended Use. All curb cuts and driveway permits necessary for access to
the Facility are existing or have been fully approved by the appropriate
Governmental Authority. All roads and streets necessary for the full utilization
of the Facility for the Primary Intended Use have been completed and with
respect to all roads and streets, the necessary rights of way therefor have
either been acquired by the appropriate Governmental Authority or have been
dedicated to public use and accepted by said Governmental Authority allowing for
the construction, use and operation of, and access to the Facility.
(m)    Boundaries. Except as disclosed in the Permitted Exceptions, (i) all of
the Improvements lie wholly within the boundaries and building restriction, set
back and side yard lines of the Land and no Improvements encroach upon any
recorded or visible easement (or other easement of which Borrower is aware or
has reason to believe may exist) with respect to the Facility; (ii) no
improvements on adjoining properties encroach upon the Land; and (iii) no
easements or other encumbrances affecting the Land encroach upon any of the
Improvements, in any case so as to affect the value or marketability of the
Facility in any material respect.
(n)    Intentionally Deleted.
(o)    Separate Tax Lots. The Facility is comprised of one (1) or more parcels
that constitute separate tax lots and is taxed separately without regard to any
other property and for all purposes of the Facility may be mortgaged, conveyed
and otherwise dealt with as an independent parcel. There are no unpaid or
outstanding real estate or other taxes or assessments on or against the Facility
or any part thereof, except general real estate taxes for fiscal year 2013 and
subsequent years not yet due or payable.
(p)    Compliance. To the best of Borrower’s Knowledge, the use of the Facility,
including for the Primary Intended Use, does not violate (i) any Legal
Requirements, including any Legal Requirements relating to subdivision, zoning,
building, environmental protection or wetland protection; or (ii) any building
permits, covenants, conditions and restrictions of record or other agreements
affecting the Facility or any part thereof. Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority, the violation of which might have a Material Adverse Effect. Neither
the zoning authorizations, subdivision approvals or variances nor any other
right to construct or to use the Facility is to any extent dependent upon or
related to any real estate other than the Land. To the best of Borrower’s
Knowledge, the Land includes all property and rights that may be reasonably
necessary or desirable to promote the present and any reasonable future
beneficial uses and enjoyment thereof. To the best of Borrower’s Knowledge,
there are no defaults by any party under the easements, restrictions, covenants
or operating agreements which benefit or burden the Land.
(q)    Litigation. Except as disclosed on Schedule 4, there is no action, suit,
proceeding or investigation pending or, to Borrower’s Knowledge, threatened
against Borrower in any court or by or before any other Governmental Authority
that would reasonably be expected to have a Material Adverse Effect if decided
against, in whole or in part, Borrower.

54151.4    24

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(r)    Condemnation. No Condemnation or other proceeding has been commenced or,
to Borrower’s Knowledge, is contemplated with respect to all or any portion of
the Land or for the relocation of roadways providing access to the Land.
(s)    Assessments. Except as shown in the Title Policy, to Borrower’s
Knowledge, there are no pending or proposed special or other assessments for
public improvements or otherwise affecting the Land, nor are there any
contemplated improvements to the Land that may result in such special or other
assessments.
(t)    Assets. Borrower does not own any asset or property other than the
Facility.
(u)    Material Contracts. Except for the Operative Documents and the other
agreements set forth on Schedule 3 (collectively with the Operative Documents,
the “Material Contracts”), as of the Closing Date there are no (i) agreements
for managerial, consulting or similar services to which Borrower is a party or
by which it is bound; (ii) agreements regarding Borrower, its assets or
operations or any investment therein to which any of its equity holders is a
party or by which it is bound; (iii) real estate leases, Intellectual Property
licenses or other leases or license agreements to which Borrower is a party,
either as lessor or lessee, or as licensor or licensee (other than licenses
arising from the purchase of “off the shelf” products); (iv) customer,
distribution, marketing or supply agreements to which Borrower is a party, in
each case with respect to the preceding clauses (i) through (iv) requiring
payment of more than $100,000 in any year; (v) partnership agreements to which
Borrower is a general partner or joint venture agreements to which Borrower is a
party; (vi) third party billing arrangements to which Borrower is a party; or
(vii) any other agreements or instruments to which Borrower is a party, and the
breach, nonperformance or cancellation of which, or the failure of which to
renew, could reasonably be expected to have a Material Adverse Effect. The
consummation of the transactions contemplated by the Loan Documents will not
give rise to a right of termination in favor of any party to any Material
Contract, except for such Material Contracts the noncompliance with which would
not reasonably be expected to have a Material Adverse Effect.
(v)    No Default. There is no outstanding Event of Default under this Agreement
or the other Loan Documents, nor to the best of Borrower’s Knowledge, any
condition, which, after notice or the passage of time or both, would constitute
an Event of Default under this Agreement or a default under the other Loan
Documents. In addition and to the best of Borrower’s Knowledge, Borrower is not
in default under any contract, agreement or commitment to which it is a party,
including any Material Contract, the breach of which might reasonably be
expected to have a Material Adverse Effect.
(w)    Intellectual Property. Other than licenses arising from the purchase of
“off the shelf” products, Borrower neither owns or licenses any Intangible
Property that is issued, registered or pending with any United States or foreign
Governmental Authority (including, without limitation, any and all applications
for the registration of any Intellectual Property with any such United States or
foreign Governmental Authority). To the best of Borrower’s Knowledge, Borrower
conducts its business without infringement or claim of infringement of any
intellectual property rights of others and there is no infringement or claim of
infringement by others of any intellectual property rights of Borrower, which
infringement or claim of infringement could reasonably be expected to have a
Material Adverse Effect.
(x)    Insurance. Borrower has obtained and delivered, or has caused Facility
Tenant to obtain and deliver, to Lender certificates evidencing all of the
policies of insurance required hereunder, with all premiums prepaid thereunder,
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. Except as shown in the loss history delivered to Lender, no
claims relating to the Facility have been made under any of such policies, and
to Borrower’s Knowledge, no Person, including Borrower has done, by act or
omission, anything which would impair the coverage of any of such policies.

54151.4    25

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6.3
Financial Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations
hereunder, each of Phase III Borrower and Phase I Borrower hereby represents and
warrants for itself to Lender that the following are true and correct as of the
Closing Date and covenants that the following shall remain true and correct in
all material respects through the Loan Term:
(h)    Financial and Other Information. All financial statements and other
documents and information previously furnished by Borrower to Lender in
connection with the Loan are true, complete and correct in all material respects
and fairly present on a consistent basis with the financial conditions of the
subjects thereof for the immediately prior periods as of the respective dates
thereof and do not fail to state any material fact necessary to make such
statements or information not misleading, and no material adverse change with
respect to the Land, Improvements or Borrower has occurred since the respective
dates of such statements and information. Borrower has no material liability,
contingent or otherwise, not disclosed in such financial statements. Borrower
has no contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a
Materially Adverse Effect. In addition, there is no fact or circumstance
presently known to Borrower which has not been disclosed to Lender and is
reasonably likely to have a Material Adverse Effect.
(i)    Tax Filings. Borrower has filed (or has obtained effective extensions for
filing) all federal, state and local tax returns required to be filed and has
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower. To the best of Borrower’s
Knowledge, the tax returns filed by Borrower have properly reflected the income
and taxes of Borrower for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit.
(j)    Federal Reserve Regulations. The Loan is not being made for the purpose
of purchasing or carrying “margin stock” within the meaning of Regulation G, T,
U or X issued by the Board of Governors of the Federal Reserve System and no
portion of the proceeds of the Loan shall be used in any manner that would
violate such Regulations or otherwise violate the Securities Act of 1933 or the
Securities Exchange Act of 1934, and Borrower agrees to execute all instruments
necessary to comply with all the requirements of Regulation U of the Federal
Reserve System.
6.4
Loan Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations
hereunder, each of Phase III Borrower and Phase I Borrower hereby represents and
warrants for itself to Lender that the following are true and correct as of the
Closing Date and covenants that the following shall remain true and correct in
all material respects through the Loan Term:
(a)    Delivery of Agreements. To Borrower’s Knowledge, Borrower has furnished
Lender with true and complete copies of all material information that Borrower
possesses with respect to the Facility and that has been requested by Lender,
including, without limitation, the information set forth on Exhibit B.
(b)    Consents. To the best of Borrower’s Knowledge, no consent, approval,
authorization or order of any Governmental Authority or other Person is required
for the execution, delivery and performance by Borrower of, or compliance by
Borrower with, this Agreement or the other Loan Documents or the consummation of
the transactions contemplated hereby and thereby, other than those which have
been obtained by Borrower.

54151.4    26

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(c)    Recitals. All statements set forth in the Recitals are true and correct.
(d)    Full and Accurate Disclosure. To Borrower’s Knowledge, no information
contained in this Agreement, the other Loan Documents, or any written statement
furnished by or on behalf of Borrower pursuant to the terms of this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made. To the best of
Borrower’s Knowledge, there has been no material adverse change in any
condition, fact, circumstance or event that would make the financial statements,
occupancy reports, reports, certificates or other documents submitted in
connection with the Loan inaccurate, incomplete or otherwise misleading in any
material respect or that otherwise is reasonably likely to have a Materially
Adverse Effect.
6.5
Borrower’s Representations and Warranties; Option Agreement.

Lender acknowledges and agrees that the representations, warranties and
covenants of Borrower set forth in this Article 6 have been made by Borrower to
induce Lender to execute this Agreement and perform its obligations hereunder.
Accordingly, if Lender or an Affiliate of Lender acquires the Facility (or a
portion thereof) pursuant to either of the options set forth in the Option
Agreement, Lender shall not be entitled to rely on the representations and
warranties of Borrower set forth in this Article 6, either with respect to the
evaluation and inspection of the Facility (or such portion thereof to be
acquired by Lender) or with respect to the acquisition of title to the Facility
(or such portion thereof acquired by Lender), and Lender (or Lender’s Affiliate,
as applicable) shall rely instead on the representations and warranties of
Borrower set forth in the agreement of purchase and sale executed pursuant to
the Option Agreement. All of the foregoing representations and warranties shall
become null and void with respect to the Facility (or such portion thereof
acquired by Lender) upon Borrower’s conveyance of title to Lender (or Lender’s
Affiliate, as applicable) pursuant to the terms of the Option Agreement.
ARTICLE 7
ENVIRONMENTAL MATTERS
7.1
Environmental Representations and Warranties.

Borrower hereby represents and warrants to Lender that (a) except as
specifically disclosed in the documents listed in Exhibit E attached hereto (the
“Environmental Documents”), to Borrower’s knowledge (i) the Land is free of all
Hazardous Material except for materials used in the Ordinary Course of Business
and in compliance with all Legal Requirements, and (ii) no release of any
Hazardous Material has occurred on, onto or about the Land; (b) neither Borrower
nor, to the best of Borrower’s Knowledge, any other Person, has ever caused or
permitted any Hazardous Material to be placed, held, located or disposed of in
violation of applicable Legal Requirements on, under, at or in a manner to
affect the Land, or any part thereof, and the Land has never been used (whether
by Borrower or, to the best of Borrower’s Knowledge, by any other Person) for
any activities involving, directly or indirectly, the use, generation,
treatment, storage, transportation, or disposal of any Hazardous Material in
violation of applicable Legal Requirements; (c) except as specifically disclosed
in the Environmental Documents, the Land currently complies, and the Facility
will comply based on its anticipated use, with all Legal Requirements, including
those relating to Hazardous Material; (d) in connection with the ownership,
operation, and use of the Land, all necessary notices have been filed and all
required permits, licenses and other authorizations have been obtained relating
to any generation, treatment, storage, disposal or use of Hazardous Material or
as otherwise required under the Legal Requirements; (e) there is no present or,
to the best of Borrower’s Knowledge, past or threatened investigation, inquiry
or proceeding relating to the environmental condition of the Land; (f) neither
the Land nor Borrower is subject to any remedial obligations under any Legal
Requirements relating to Hazardous

54151.4    27

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Material, health or the environment or as may be necessary for protection of
human health, the environment or to maintain the value of the Land or
Improvements; (g) except as specifically disclosed in the Environmental
Documents or otherwise disclosed to Lender by Borrower, there are no underground
tanks, vessels or similar facilities for the storage, containment or
accumulation of Hazardous Material of any sort on, under or affecting the Land;
and (h) Borrower has not and will not release or waive the liability of any
previous owner of the Land or any party who may be potentially responsible for
the presence of or removal of Hazardous Material from the Land, except for such
waivers in favor of the seller of the Land set forth in the purchase contract
under which (or the conveyance instrument pursuant to which) Borrower acquired
the Land, and Borrower has not made promises of indemnification regarding
Hazardous Material on the Land to any party, except as may be contained in the
purchase contract under which (or the conveyance instrument pursuant to which)
Borrower has acquired the Land (to the extent that Borrower agreed to indemnify
the seller of the Land with respect to any Hazardous Materials placed on the
Land by Borrower following the closing date of such purchase contract) or the
Loan Documents.
7.2
Environmental Covenants.

Borrower shall:
(k)    comply, and use its commercially reasonable efforts to cause each other
Person on or occupying the Facility to comply, with all Legal Requirements
relating to Hazardous Material;
(l)    not install, use, generate, manufacture, store, treat, release or dispose
of, nor permit the installation, use, generation, storage, treatment, release or
disposal of, Hazardous Material on, under or about the Facility except as
specifically disclosed in the Environmental Documents and except for materials
used in the Ordinary Course of Business (and in compliance with all Legal
Requirements) of the Facility;
(m)    within five (5) Business Days after discovering or being advised of any
of the following, advise Lender in writing of: (i) any and all Environmental
Proceedings; (ii) except for materials used in the Ordinary Course of Business
and in compliance with all Legal Requirements, the presence of any Hazardous
Material on, under or about the Facility of which Lender has not previously been
advised in writing; (iii) any remedial action taken by it or on its behalf in
response to any Hazardous Material on, under or about the Facility or to any
Environmental Proceedings of which Lender has not previously been advised in
writing; (iv) the discovery by it of the presence of any Hazardous Material in
violation of Legal Requirements on, under or about any real property or bodies
of water adjoining or in the vicinity of the Facility; and (v) the discovery by
it of any occurrence or condition on any real property adjoining or in the
vicinity of the Facility that could cause the Facility or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of the Facility under any Legal Requirements relating to Hazardous Material;
(n)    provide Lender with copies of all reports, analyses, notices, licenses,
approvals, orders, correspondences or other written materials in its possession
or control relating to the environmental condition of the Facility or real
property or bodies of water adjoining or in the vicinity of the Facility or
Environmental Proceedings (other than those previously provided to Lender by
Borrower prior to the date of this Agreement) within five (5) Business Days
following Borrower’s receipt thereof;
(o)    not install or allow to be installed any tanks for the storage of
Hazardous Material on, at or under the Facility except for materials used in the
Ordinary Course of Business and in compliance with all Legal Requirements; and
(p)    not allow or permit any material mold, fungal or other microbial growth
in or on the Improvements, or conditions that could reasonably be expected to
result in material mold, fungal or microbial

54151.4    28

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growth (e.g. material problems with the heating, ventilation and air
conditioning system, water leaks or building materials known to be conducive to
material mold, fungal or microbial growth) that could reasonably be expected to
result in material liability or material costs or expenses to remediate the
mold, fungal or microbial growth or to remedy the conditions that could
reasonably be expected to result in such material growth.
7.3
Right of Entry and Disclosure of Environmental Reports.

Borrower hereby grants to Lender an irrevocable license and authorization to
enter upon and inspect the Facility to conduct such environmental audits and
tests, including, without limitation, subsurface testing, soils, air, building
materials and groundwater testing, and other tests which may physically invade
the Facility, that Lender determines are necessary or desirable in its
reasonable discretion. Any such entry by Lender shall be at reasonable times and
upon at least two (2) weeks advance notice to Borrower and shall be subject to
all HIPAA requirements and reasonable security requirements established by
Borrower or Facility Tenant from time to time. With respect to invasive testing,
such as soil borings, Lender shall consult with Borrower in advance of such
tests. Lender agrees, however, that it shall not conduct any such audits or
tests, unless an Event of Default exists under the Loan Documents or Lender has
reason to believe that such audit or test may disclose the presence or release
of Hazardous Material (other than in the Ordinary Course of Business) or a
violation of Legal Requirements or unless an environmental audit deems further
testing necessary. All reasonable out-of-pocket costs and expenses incurred by
Lender in connection with any inspection, audit or testing conducted in
accordance with this Section 7.3 while an Event of Default exists shall be paid
by Borrower, and all out-of-pocket costs and expenses incurred by Lender in
connection with any other inspection, audit or testing conducted in accordance
with this Section 7.3 shall be paid by Lender. The results of all investigations
and reports prepared by Lender shall be and at all times remain the property of
Lender and under no circumstances shall Lender have any obligation whatsoever to
disclose or otherwise make available to Borrower or any other party such results
or any other information obtained by it in connection with such investigations
and reports; provided, however, that if there exists no Event of Default under
the Loan Documents, if requested by Borrower, Lender shall provide to Borrower a
copy of the written report with respect to any inspection, audit or testing for
which Borrower has paid hereunder. Lender hereby reserves the right, and
Borrower hereby expressly authorizes Lender to make available to any party in
connection with a foreclosure under the Deed of Trust any and all environmental
reports, whether prepared by Lender or prepared by Borrower and provided to
Lender (collectively, the “Environmental Reports”), which Lender may have with
respect to the Facility. Borrower consents to Lender notifying any party under
such circumstances of the availability of any or all of the Environmental
Reports and the information contained therein. Borrower further agrees that
Lender may disclose such Environmental Reports to any Governmental Authority if
it reasonably believes that it is required to disclose any matter contained
therein to such Governmental Authority; provided that Lender shall give Borrower
at least seventy-two (72) hours’ prior written notice before so doing or a
reasonable period of time under the circumstances if Lender reasonably believes
it must report in a shorter period of time. Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or accuracy of the
Environmental Reports, and that the release of the Environmental Reports, or any
information contained therein, to prospective bidders at any foreclosure sale
under the Deed of Trust may have a material and adverse effect upon the amount
that a party may bid at such sale. Borrower agrees that Lender shall not have
any liability whatsoever as a result of delivering any or all of the
Environmental Reports or any information contained therein to any third party,
and Borrower hereby releases and forever discharges Lender from any and all
claims, damages, or causes of action arising out of connected with or incidental
to the Environmental Reports or the delivery thereof.
7.4
Borrower’s Remedial Work.

54151.4    29

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Borrower shall promptly perform (or shall cause Facility Tenant to perform) any
and all necessary remedial work (“Remedial Work”) in response to any
Environmental Proceedings or the presence, storage, use, disposal,
transportation, discharge or release of any Hazardous Material on, under or
about the Facility or any portion thereof as reasonably necessary to comply with
any Legal Requirements or as may be necessary for protection of human health,
the environment or to maintain the value of the Land or Improvements.
All Remedial Work shall be conducted: (a) in a diligent and timely fashion by
licensed contractors acting under the supervision of a consulting environmental
engineer; (b) pursuant to a detailed written plan for the Remedial Work approved
by any public or private agencies or persons with a legal or contractual right
to such approval; (c) with such insurance coverage pertaining to liabilities
arising out of the Remedial Work as is then customarily maintained with respect
to such activities; and (d) only following receipt of any required permits,
licenses or approvals. With respect to Remedial Work performed by or on behalf
of Borrower, the selection of the Remedial Work contractors and consulting
environmental engineer, the contracts entered into with such parties, any
disclosures to or agreements with any public or private agencies or parties
relating to Remedial Work and the written plan for the Remedial Work (and any
changes thereto) shall each be subject to Lender’s prior written approval, which
shall not be unreasonably withheld or delayed. In addition, Borrower shall
submit to Lender, promptly upon receipt or preparation, copies of any and all
reports, studies, analyses, correspondence, governmental comments or approvals,
proposed removal or other Remedial Work contracts and similar information
prepared or received by Borrower in connection with any Remedial Work, or
Hazardous Material relating to the Facility. All costs and expenses of such
Remedial Work shall be paid by Borrower (or Borrower shall cause the same to be
paid by Facility Tenant pursuant to the terms of the Facility Lease), including,
without limitation, the charges of the Remedial Work contractors and the
consulting environmental engineer, any taxes or penalties assessed in connection
with the Remedial Work and Lender’s reasonable fees and out-of-pocket costs
incurred in connection with monitoring or review of such Remedial Work. Lender,
at Lender’s sole expense, shall have the right but not the obligation to join
and participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Environmental Proceedings.
7.5
Environmental Indemnity.

Borrower shall protect, indemnify, defend and hold harmless each Indemnified
Party from and against any and all actual or potential claims, liabilities,
damages (direct or indirect) and Expenses (foreseeable or unforeseeable) that
arise out of or relate in any way to (a) any breach of any representation,
warranty or covenant contained in this Article 7, (b) any Environmental
Proceedings or any use, handling, production, transportation, disposal, release
or storage of any Hazardous Material in, under or on the Facility, whether by
Borrower or any other Person, (c) any exercise by Lender of any of its rights
and remedies under this Article 7, including, without limitation, the costs of
any required or necessary investigation, assessment, testing, remediation,
repair, cleanup, or detoxification of the Facility and the preparation of any
closure or other required plans.
Borrower’s liability to the Indemnified Parties shall arise upon the earlier to
occur of (1) discovery of any Hazardous Material on, under or about the
Facility, or (2) the institution of any Environmental Proceedings, and not upon
the realization of loss or damage, and Borrower shall pay to Lender from time to
time, immediately upon request, an amount equal to the documented Expenses
incurred by Lender for which Borrower is required to indemnify Lender under this
Section 7.5. In addition, in the event any Hazardous Material is removed, or
caused to be removed from the Facility, by Borrower, Lender or any other Person,
the number assigned by the U.S. Environmental Protection Agency to such
Environmental Proceedings or any similar identification shall in no event be in
the name of Lender or identify Lender as a generator, arranger or other
designation. The foregoing indemnity shall not include Expenses arising solely

54151.4    30

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from Hazardous Material which first exist on the Facility following the date on
which Lender (or its nominee) or any successor or assignee thereof, takes title
to the Facility (directly or indirectly), whether by foreclosure of the Deed of
Trust or otherwise.
7.6
Remedies Upon an Environmental Default.

In addition to any other rights or remedies Lender may have under this
Article 7, at law or in equity, if Borrower shall fail to timely comply in any
material respect with any of the provisions of this Article 7, or if any
representation or warranty made in this Article 7 proves to be false or
misleading in any material respect, then, after (a) delivering written notice to
Borrower, which notice specifically states that Borrower has failed to comply
with the provisions of this Article 7; and (b) the expiration of the earlier to
occur of (i) a sixty (60) day period after receipt of such notice and (ii) the
cure period, if any, permitted under any applicable Legal Requirements with
which Borrower shall have failed to comply, Lender may declare an immediate
Event of Default and exercise any and all remedies provided for herein or any
other Loan Documents, and do or cause to be done whatever is reasonably
necessary to cause the Facility to comply with all Legal Requirements relating
to Hazardous Material and other Legal Requirements and the cost thereof shall
constitute an Expense hereunder and shall become immediately due and payable
without notice and with interest thereon at the Default Rate until paid.
Borrower shall give to Lender access to the Facility for the purpose of
effecting such compliance and hereby specifically grants to Lender a license,
effective upon expiration of the applicable period as described above, if any,
to do whatever is necessary to cause the Facility to so comply, including,
without limitation, to enter the Facility and remove therefrom any Hazardous
Material to the extent necessary to comply with applicable Legal Requirements or
otherwise comply with any Legal Requirements relating to Hazardous Material.
7.7
Unconditional Environmental Obligations.

Notwithstanding any term or provision contained herein or in the other Loan
Documents, the covenants and obligations of Borrower under this Article 7 (the
“Environmental Obligations”) are unconditional. Borrower shall be fully liable
for the Environmental Obligations, and such liability shall not be limited to
the original principal amount of the Loan. The Environmental Obligations shall
be enforceable by Lender, its Affiliates and its successors and assigns. The
Environmental Obligations shall survive the repayment of the Loan and any
foreclosure or transfer in lieu of foreclosure or similar proceedings or any
transfer of title (directly or indirectly) to the Facility or any portion
thereof.
7.8
Indemnification Separate from the Loan.

Borrower agrees that the Environmental Obligations are separate, independent of
and in addition to the undertakings of Borrower pursuant to the Loan, the Note,
the other provisions of this Agreement and the other Loan Documents. A separate
action may be brought to enforce the provisions of this Article 7, which shall
in no way be deemed to be an action on the Note, whether or not the Loan has
been repaid and whether or not Lender would be entitled to a deficiency judgment
following a judicial foreclosure or trustee’s sale. The Environmental
Obligations shall not be affected by any exculpatory provisions (if any)
contained in the Note, this Agreement or any of the other Loan Documents. All
rights and obligations of this Article 7 shall survive performance and repayment
of the obligations evidenced by and arising under the Loan Documents, surrender
of the Note, releasing of the Deed of Trust, release of other security provided
in connection with the Loan, trustee’s sale or foreclosure under the Deed of
Trust and/or any of the other Loan Documents (whether by transfer or other
assignment in lieu of foreclosure, or otherwise), acquisition of the Facility by
Lender, any other transfer of the Facility, and transfer of Lender’s rights in
the Loan and the Loan Documents. Notwithstanding the foregoing, if Lender or an
Affiliate of Lender acquires the Facility (or a portion thereof) pursuant to
either of the options set forth in the Option Agreement, Lender shall not be
entitled to

54151.4    31

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indemnification by Borrower pursuant to this Article 7 with respect to the
Facility (or such portion thereof acquired by Lender).
In connection with the breach of any Environmental Obligation, Borrower waives
all rights to require Lender to (i) proceed against or exhaust any security for
the Loan or (ii) pursue any remedy in Lender’s power whatsoever. Borrower waives
all defenses by reason of any disability or other defense under the Loan or by
reason of the cessation from any cause whatsoever of its liability under the
Loan, or that it may acquire by reason of Lender’s election of any remedy
against it including, without limitation, Lender’s exercise of its rights to
foreclose under the Deed of Trust.
ARTICLE 8
INSURANCE, CASUALTIES AND CONDEMNATION
8.1
Insurance.

(q)    General Insurance Requirements.
(i)    All of the policies of insurance required to be maintained by Borrower
under this Section 8.1 shall (A) be written in form satisfactory to Lender and
issued by insurance companies (x) with a policyholder and financial rating of
not less than “A-”/“VII” in the most recent version of Best’s Key Rating Guide
and (y) authorized to do insurance business in the State; (B) provide that any
insurance maintained by Lender for or with respect to the Facility shall be
excess and noncontributory with Borrower’s insurance; and (C) include a waiver
of all rights of subrogation and recovery against Lender.
(ii)    All liability type policies (with the exception of Borrower’s workers’
compensation/employer’s liability insurance and professional liability
insurance) must name Lender as an “additional insured.” All property policies
(other than the business interruption policies) shall name Lender as “loss
payee.” Losses shall be payable to Lender and/or Borrower as provided herein.
Any loss adjustment shall require the written consent of Lender and Borrower
unless the amount of the loss is less than the Restoration Threshold, in which
event no consent shall be required.
(iii)    Borrower shall provide Lender copies of the original policies or a
satisfactory ACORD evidencing the existence of the insurance required by this
Agreement and showing the interest of Lender prior to the commencement of the
Loan Term or, for a renewal policy, not less than ten (10) days prior to the
expiration date of the policy being renewed. If Lender is provided with an ACORD
certificate, it may demand that Borrower provide a complete copy of the related
policy within ten (10) days.
(iv)    Borrower’s obligations to carry the insurance provided for herein may be
brought within the coverage of a so-called “blanket” policy or policies of
insurance carried and maintained by Borrower; provided, however, that the
coverage afforded Lender will not be reduced or diminished or otherwise be
materially different from that which would exist under a separate policy meeting
all other requirements hereof by reason of the use of the blanket policy, and
provided further that the requirements of this Section 8.1 are otherwise
satisfied, and provided further that Borrower maintains specific allocations
acceptable to Lender. For any liability policies covering one or more other
properties in addition to the Facility, Lender may require excess limits as
Lender reasonably determines.

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(v)    Each insurer under the property policies maintained by Borrower pursuant
to this Section 8.1 shall agree, by endorsement on the policy or policies issued
by it, or by independent instrument furnished to Lender, each to the extent
available in the State, that it will give to Lender thirty (30) days’ written
notice before the policy or policies in question shall be altered or cancelled.
Borrower shall provide thirty (30) days’ written notice to Lender (ten (10) days
for non-payment of premium) prior to the cancellation of any liability type
policies maintained by Borrower pursuant to this Section 8.1.
(r)    Required Policies. During the Loan Term, Borrower shall maintain, or
shall cause Facility Tenant to maintain, the following insurance with respect to
Borrower, Facility Tenant and the Facility, as applicable, at its (or Facility
Tenant’s) sole cost and expense:
(i)    Fire and Extended Coverage against loss or damage by fire, vandalism and
malicious mischief, extended coverage perils commonly known as “Special Risk,”
and all physical loss perils normally included in such Special Risk insurance,
including but not limited to sprinkler leakage and windstorm, together with
coverage for earthquake (including earth movement), flood (if the Facility is
located in whole or in part within a designated 100-year flood plain area) and
terrorism, to the extent not included or specifically excluded from such Special
Risk Insurance, all in an amount equal to one hundred percent (100%) of the full
replacement cost of the Facility (as defined below in Section 8.1(c)), and
including a building ordinance coverage endorsement;
(ii)    If the Facility contains steam boilers, pressure vessels or similar
apparatus, insurance with an agreed amount endorsement (such that the insurance
carrier has accepted the amount of coverage and has agreed that there will be no
co-insurance penalty), covering the major components of the central heating, air
conditioning and ventilating systems, boilers, other pressure vessels, high
pressure piping and machinery, elevators and escalators, if any, and other
similar equipment installed in the Facility, in an amount equal to one hundred
percent (100%) of the full replacement cost of the Facility, which policy shall
insure against physical damage to and loss of occupancy and use of the Facility
arising out of an accident, explosion, or breakdown covered thereunder;
(iii)    If there is any storage tank, whether above ground or below ground,
located at the Facility, whether or not in use, Pollution Liability Insurance
with the same limits as required for the commercial general liability insurance
pursuant to Section 8.1(b)(v) below;
(iv)    Business Interruption and Extra Expense Coverage for loss of business
income on an actual loss sustained basis for no less than twelve (12) months,
covering perils consistent with the requirements of Section 8.1(b), including
either an agreed amount endorsement or a waiver of any co-insurance provisions,
so as to prevent Borrower, Lender and any other insured thereunder from being a
co-insurer, and containing an extended period indemnity endorsement that
provides that the continued loss of business income will be insured until such
income returns to the same level it was prior to the loss or the expiration of
not fewer than six (6) months after the date of the completed repairs;
(v)    Commercial General Liability Coverage (including products and completed
operations liability and broad form coverage, host liquor liability, broad form
property damage (with the explosion, collapse and underground damage exclusions
deleted), blanket contractual liability, independent contractors liability,
personal injury and advertising injury coverage and medical payments coverage)
against claims for bodily injury, death, medical expenses, property damage

54151.4    33

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occurring on, in or about the Facility, affording the parties protection of not
less than One Million Dollars ($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) in the annual aggregate;
(vi)    Professional Liability Coverage for damages for injury, death, loss of
service or otherwise on account of professional services rendered or which
should have been rendered, in a minimum amount of One Million Dollars
($1,000,000) per occurrence and Three Million Dollars ($3,000,000) in the annual
aggregate;
(vii)    Umbrella/Excess Liability Coverage covering operations at the Facility
in the minimum amount of Ten Million Dollars ($10,000,000) per occurrence and
Ten Million Dollars ($10,000,000) in the annual aggregate, written on a
“following form” policy or on a policy form that provides coverage that is at
least as broad as that found on each of the underlying insurance policies;
(viii)    To the extent required by the State, Worker’s Compensation Coverage
for injuries sustained by Borrower’s or Facility Tenant’s employees in the
course of their employment and otherwise consistent with all applicable Legal
Requirements and employer’s liability coverage with limits of not less than Five
Hundred Thousand Dollars ($500,000) each accident, Five Hundred Thousand Dollars
($500,000) bodily injury due to disease each employee and One Million Dollars
($1,000,000) bodily injury due to disease; and
(ix)    During such time as Borrower or Facility Tenant is constructing any
improvements, Borrower, at its (or Facility Tenant’s) sole cost and expense,
shall carry, or cause to be carried (a) a completed operations endorsement to
the commercial general liability insurance policy referred to above,
(b) builder’s risk insurance, completed value form, covering all physical loss,
in an amount and subject to policy conditions satisfactory to Lender, and
(c) such other insurance, in such amounts, as Lender deems necessary to protect
Lender’s interest in the Facility from any act or omission of Borrower’s or
Facility Tenant’s contractors or subcontractors.
(s)    Replacement Costs. The term “replacement cost” shall mean the actual
replacement cost of the insured property from time to time with new materials
and workmanship of like kind and quality (including the cost of compliance with
changes in zoning and building codes and other laws and regulations, demolition
and debris removal and increased cost of construction). If Lender believes that
the replacement cost has increased at any time during the Loan Term, it shall
have the right to have such replacement cost redetermined by an impartial
national insurance company reasonably acceptable to both parties (the “impartial
appraiser”). The determination of the impartial appraiser shall be final and
binding, and, as necessary, Borrower shall increase, but not decrease, the
amount of the insurance carried pursuant to this Article 8 to the amount so
determined by the impartial appraiser. Each party shall pay one-half (1/2) of
the fee, if any, of the impartial appraiser. If Borrower or Facility Tenant has
made Alterations, Lender may at Borrower’s expense have the replacement cost
redetermined at any time after such Alterations are made.
(t)    Claims-Made Policies. If Borrower or Facility Tenant obtains and
maintains the commercial general liability coverage and/or professional
liability coverage described in Sections 8.1(b)(v) and 8.1(b)(vi) on a
“claims-made” basis, Borrower or Facility Tenant shall provide continuous
liability coverage for claims arising during the Loan Term and providing for an
extended reporting period reasonably acceptable to Lender for a minimum of three
(3) years after expiration of the Loan Term. If such policy is canceled or not
renewed for any reason whatsoever, Borrower must provide evidence of a
replacement policy reflecting coverage with retroactive coverage back to the
commencement date of term and maintain such coverage for a period of at least
three (3) years beyond the expiration of the Loan Term or Borrower or Facility
Tenant

54151.4    34

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must obtain tail coverage for the length of the remaining term plus an
additional three (3) years beyond the expiration of the Loan Term.
(u)    Non-Renewal. If Borrower fails to cause the insurance required under this
Article 8 to be issued in the names herein called for, fails to pay or cause to
be paid the premiums therefor or fails to deliver such policies or certificates
thereof to Lender, at the times required, Lender shall be entitled, but shall
have no obligation, to obtain such insurance and pay the premiums therefor, in
which event the cost thereof, together with interest thereon at the Default
Rate, shall be repayable to Lender upon demand therefor.
(v)    Deductibles. Deductibles/self-insured retentions for the insurance
policies required under this Article 8 shall not be greater than $50,000.00 with
respect to the polices required in Sections 8.1(b)(i), (ii) and (iv) above, and
$100,000.00 with respect to the policies required in Sections 8.1(b)(v) and
(vi); provided, however, that the deductibles/self-insured retentions for losses
sustained from earthquake (including earth movement), flood or windstorm (i.e.,
wind/hail) may be equal, but not greater than, five percent (5%) of the
replacement cost of the Facility.
(w)    Increase in Limits; Coverage Types. If, from time to time after the
Closing Date, Lender determines in the exercise of its commercially reasonable
judgment that the limits of the insurance required to be maintained hereunder
are no longer commensurate to the limits being regularly required by
institutional lenders with respect to similar properties in the State or that a
particular type of insurance coverage is being regularly required by
institutional lenders with respect to similar properties in the State, Lender
may notify Borrower of the same, indicating the particular limit or type of
coverage that Lender has determined should be increased or carried hereunder, as
applicable. Within thirty (30) days of the receipt of such notice, Borrower
shall cause to be increased the particular limit or obtained the particular
coverage, as applicable, unless and until further modified pursuant to the
provisions of this Section 8.1(g). Notwithstanding anything herein to the
contrary, Lender shall not request a modification of the insurance requirements
of this Agreement more frequently than once every three (3) years.
(x)    No Separate Insurance. Borrower shall not, and shall not suffer Facility
Tenant to, on its own initiative or pursuant to the request or requirement of
any third party, (i) take out separate insurance concurrent in form or
contributing in the event of loss with that required in this Section 8.1 to be
furnished by, or which may reasonably be required to be furnished by, Borrower
or Facility Tenant or (ii) increase the amounts of any then existing insurance
by securing an additional policy or additional policies, unless all parties
having an insurable interest in the subject matter of the insurance, including
in all cases Lender, are included therein as additional insureds and the loss is
payable under such insurance in the same manner as losses are payable hereunder.
Notwithstanding the foregoing, nothing herein shall prohibit Borrower or
Facility Tenant from insuring against risks not required to be insured hereby,
and as to such insurance, Lender need not be included therein as an additional
insured, nor must the loss thereunder be payable in the same manner as losses
are payable hereunder.
8.2
Casualty and Condemnation.

(e)    Casualty. If the Facility shall sustain a Casualty, Borrower shall give
prompt written notice of such Casualty to Lender and shall (or shall cause
Facility Tenant to, in accordance with and subject to the terms of the Facility
Lease), if required hereby, promptly commence and diligently prosecute to
completion the Restoration and otherwise comply with the provisions of
Section 8.3. Subject to Borrower’s right to receive the Net Casualty Proceeds,
as set forth in Section 8.3, Borrower shall pay (or Borrower shall cause
Facility Tenant to pay) all costs of such Restoration whether or not such costs
are covered by insurance. Lender may, but shall not be obligated to, make proof
of loss if not made promptly by Borrower.

54151.4    35

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(f)    Condemnation. Borrower shall give Lender prompt notice of any actual or
threatened Condemnation by any Governmental Authority of all or any part of the
Facility upon Borrower obtaining actual knowledge thereof and shall deliver to
Lender a copy of any and all papers served in connection with such proceedings.
Lender may participate in any such proceedings, and Borrower shall from time to
time deliver to Lender all instruments requested by Lender to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any Condemnation, Borrower shall continue to pay the
Indebtedness at the time and in the manner provided for its payment in the Note
and in this Agreement. If the Facility or any portion thereof is taken by any
Governmental Authority, Borrower shall (or shall cause Facility Tenant to, in
accordance with and subject to the terms of the Facility Lease) promptly
commence and diligently prosecute the Restoration and otherwise comply with the
provisions of Section 8.3.
8.3
Delivery of Net Casualty Proceeds.

(a)    Minor Casualty or Condemnation. If a Casualty or Condemnation has
occurred, Borrower’s right, title and interest in and to all Casualty Proceeds
are, except as otherwise herein provided, hereby assigned to Lender and all Net
Casualty Proceeds shall, except as otherwise herein provided, be paid to Lender.
Borrower shall, in good faith and in a commercially reasonable manner, file and
prosecute the adjustment, compromise or settlement of any claim for Casualty
Proceeds and, subject to Borrower’s right to receive the direct payment of any
Net Casualty Proceeds as herein provided, will cause the same to be paid
directly to Lender to be held and applied in accordance with the provisions of
this Agreement. Except upon the occurrence and during the continuance of an
Event of Default, Borrower may settle any insurance claim with respect to Net
Casualty Proceeds which do not exceed the Restoration Threshold. Whether or not
an Event of Default shall have occurred and be continuing, Lender shall have the
right to approve, such approval not to be unreasonably withheld, conditioned or
delayed any settlement which would in Lender’s reasonable judgment result in Net
Casualty Proceeds which exceed the Restoration Threshold, and Borrower shall
deliver or cause to be delivered to Lender all instruments reasonably requested
by Lender to permit such approval. Borrower shall pay all out-of-pocket costs,
fees and expenses reasonably incurred by Lender (including, without limitation,
all reasonable attorneys’ fees and expenses, the fees of insurance experts and
adjusters and costs incurred in any litigation or arbitration), and interest
thereon at the Default Rate to the extent not paid within twenty (20) Business
Days after delivery of a request for reimbursement by Lender, accompanied by
reasonable back-up documentation, in connection with the settlement of any claim
for Casualty Proceeds and the seeking and obtaining of any payment on account
thereof in accordance with the foregoing provisions. If any Casualty Proceeds
are received by Borrower and may be retained by Borrower pursuant to this
Section 8.3(a), such Casualty Proceeds shall, until the completion of the
Restoration, be held in trust for Lender and shall be segregated from other
funds of Borrower and used to pay for the cost of the Restoration in accordance
with the terms hereof, and to the extent such Casualty Proceeds exceed the
Restoration Threshold, such Casualty Proceeds shall be forthwith paid directly
to and held by Lender to be applied or disbursed in accordance with this
Section 8.3. If an Event of Default shall have occurred and be continuing, or if
Borrower fails to file any insurance claim for a period of thirty (30) Business
Days after a Casualty, or to prosecute the same with commercially reasonable
diligence following Borrower’s receipt of written notice to do so from Lender,
Borrower hereby irrevocably empowers Lender, in the name of Borrower as its true
and lawful attorney-in-fact, to file and prosecute such claim (including
settlement thereof) with counsel satisfactory to Lender and to collect and to
make receipt for any such payment, all at Borrower’s expense (including payment
of interest at the Default Rate for any amounts advanced by Lender pursuant to
this sentence to the extent not paid within twenty (20) days). Notwithstanding
anything to the contrary set forth in this Agreement, but excluding all
situations requiring prepayment of the Note, to the extent any Casualty Proceeds
(either singly or when aggregated with all other then unapplied Casualty
Proceeds) do

54151.4    36

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not exceed the Restoration Threshold, such Casualty Proceeds are to be paid
directly to Borrower to be applied to the Restoration in accordance with the
terms hereof. If a Casualty or Condemnation has occurred and the Net Casualty
Proceeds shall be less than the Restoration Threshold and the costs of
completing the Restoration shall be less than the Restoration Threshold, and
provided no Event of Default shall have occurred and remain uncured, the Net
Casualty Proceeds will be disbursed pursuant to the preceding sentence, as
directed by Borrower. As soon as reasonably practicable after receipt of the Net
Casualty Proceeds (but in no event later than sixty (60) days after receipt of
the Net Casualty Proceeds related to such Casualty or Condemnation, whichever
the case may be, occurs), Borrower shall commence and satisfactorily complete
with due diligence the Restoration in accordance with the terms of this
Agreement.
(b)    Major Casualty or Condemnation.
(i)    If a Casualty or Condemnation has occurred, Borrower shall commence and
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement, provided that, if required pursuant to the terms of
this Agreement, Lender shall have made the Net Casualty Proceeds available to
Borrower in accordance with the provisions of this Agreement. If the Net
Casualty Proceeds are equal to or greater than the Restoration Threshold or the
costs of completing the Restoration is equal to or greater than the Restoration
Threshold, Lender shall make the Net Casualty Proceeds available for the
Restoration, provided that each of the following conditions are met:
(A)    No Event of Default shall have occurred and be continuing;
(B)    In the event the Net Casualty Proceeds are insurance proceeds, less than
fifty percent (50%) of the total floor area of the Improvements has been
damaged, destroyed or rendered unusable as a result of such Casualty, or in the
event the Net Casualty Proceeds are an Award, less than ten percent (10%) of the
Land is taken, and such Land is located along the perimeter or periphery of the
Facility, and no material portion of the Improvements (or the parking areas
servicing the Improvements) is the subject of the Condemnation;
(C)    Borrower shall commence the Restoration as soon as reasonably practicable
(but in no event later than sixty (60) days after receipt of the Net Casualty
Proceeds related to such Casualty or Condemnation, whichever the case may be,
occurs) and shall diligently pursue the same to satisfactory completion;
(D)    Lender shall be satisfied, in its reasonable discretion, that (i) the
undisbursed amount of the Net Casualty Proceeds shall be sufficient to pay for
the costs of completing the Restoration or Borrower has deposited sufficient
funds with Lender to pay for any such deficiency, and (ii) any operating
deficits and all payments of principal and interest under this Agreement and the
Note will be paid during the period required for Restoration from (1) the Net
Casualty Proceeds or (2) other funds of Borrower;
(E)    Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (i) the Maturity Date, (ii) such time as may be
required under applicable Legal Requirements, or (iii) the expiration of the
rent loss and/or business interruption insurance coverage;
(F)    The Facility and the use thereof after the Restoration will be in
compliance with and permitted under all applicable Legal Requirements;

54151.4    37

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(G)    The Restoration shall be done and completed by Borrower in an expeditious
and diligent fashion and in compliance with all applicable Legal Requirements;
and
(H)    Such Casualty or Condemnation, as applicable, does not result in the
permanent loss of access to the Facility or the related Improvements or the
parking required to be available at the Facility pursuant to applicable Legal
Requirements.
(ii)    The Net Casualty Proceeds shall be paid directly to Lender and held by
Lender and until disbursed in accordance with the provisions of this
Section 8.3(b), and shall constitute additional security for the Indebtedness.
The Net Casualty Proceeds shall be disbursed by Lender to, or as directed by,
Borrower from time to time during the course of the Restoration, promptly after
receipt of evidence satisfactory to Lender that (A) all requirements set forth
in Section 8.3(b)(i) have been satisfied, (B) all materials installed and work
and labor performed (except to the extent that they are to be paid for out of
the requested disbursement) in connection with the Restoration have been paid
for in full (subject to usual and customary retainages), and (C) there exist no
notices of pendency, stop orders, mechanic’s or materialman’s liens or notices
of intention to file the same, or any other Liens of any nature whatsoever on
the Facility arising out of the Restoration which have not been fully bonded to
the reasonable satisfaction of Lender and discharged of record.
(iii)    All plans and specifications required in connection with the
Restoration shall be subject to prior reasonable approval by Lender and by an
independent architect selected by Lender (the “Casualty Consultant”). The
identity of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been engaged, shall
be subject to reasonable approval by Lender and the Casualty Consultant. All
costs and expenses reasonably incurred by Lender in connection with recovering,
holding and advancing the Net Casualty Proceeds for the Restoration, including,
without limitation, reasonable attorneys’ fees and disbursements and the
Casualty Consultant’s fees and disbursements, shall be paid by Borrower.
(iv)    Lender shall not be obligated to make disbursements of the Net Casualty
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, less the Casualty Retainage. The term “Casualty Retainage”
shall mean, as to each contractor, subcontractor or materialman engaged in the
Restoration, an amount equal to ten percent (10%) of the Hard Costs actually
incurred for work in place as part of the Restoration, as certified by the
Casualty Consultant, until such time as the Restoration has been completed. The
Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 8.3(b)(iv), be less than the amount
actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Casualty Retainage shall not be released until
the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 8.3(b)(iv) and all
applicable Legal Requirements and that all approvals necessary for the
re-occupancy and use of the Facility have been obtained from all appropriate
Governmental Authorities, and Lender receives evidence reasonably satisfactory
to Lender that the costs of the Restoration have been paid in full or will be
paid in full out of the Casualty Retainage; provided, however, that Lender will
release the portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Casualty Consultant certifies to Lender that such
contractor, subcontractor or materialman has satisfactorily completed all work
and has supplied all materials in accordance with the provisions of such
contractor’s, subcontractor’s or materialman’s contract, such contractor,
subcontractor or materialman delivers the lien waivers and evidence of payment
in full of all sums due to such contractor, subcontractor or materialman as

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may be reasonably requested by Lender. If required by Lender, the release of any
such portion of the Casualty Retainage shall be approved by the surety company,
if any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(v)    Lender shall not be obligated to make disbursements of the Net Casualty
Proceeds more frequently than once every calendar month.
(vi)    If at any time the Net Casualty Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs which
are estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Casualty Proceeds Deficiency”) with Lender before any further disbursement of
the Net Casualty Proceeds shall be made. The Net Casualty Proceeds Deficiency
deposited with Lender shall be held by Lender and shall be disbursed for costs
actually incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Casualty Proceeds, and until so
disbursed pursuant to this Section 8.3(b) shall constitute additional security
for the Indebtedness.
(vii)    The excess, if any, of the Net Casualty Proceeds and the remaining
balance, if any, of the Net Casualty Proceeds Deficiency deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 8.3(b), and the
receipt by Lender of evidence reasonably satisfactory to Lender that all costs
incurred in connection with the Restoration have been paid in full, shall be
remitted promptly by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under any of the Loan Documents and provided,
however, that with respect to an Award, no amounts shall be remitted to Borrower
in excess of the Net Casualty Proceeds Deficiency deposited with Lender.
(viii)    All Net Casualty Proceeds not required (A) to be made available for
the Restoration or (B) to be returned to Borrower as excess Net Casualty
Proceeds pursuant to Section 8.3(b)(vii) may be retained and applied by Lender
toward the payment of the Indebtedness whether or not then due and payable in
such order, priority and proportions as Lender in its sole discretion shall deem
proper, or, at the discretion of Lender, the same may be paid, either in whole
or in part, to Borrower for such purposes as Lender shall designate.
(c)    Application of Net Casualty Proceeds. Upon the occurrence and during the
continuation of an Event of Default, Lender, at its option, may withdraw all the
Net Casualty Proceeds or the undisbursed balance thereof and the remaining
balance, if any, of the Net Casualty Proceeds Deficiency deposited with Lender
and may apply the such Net Casualty Proceeds and Net Casualty Proceeds
Deficiency either to the payment of Restoration or to payment of the
Indebtedness in such order, proportion and priority as Lender may determine in
its sole discretion. Lender’s right to withdraw and apply such Net Casualty
Proceeds and Net Casualty Proceeds Deficiency shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents.
(d)    Waiver. Borrower hereby waives the provisions of any law prohibiting
Lender from making any election with respect to the application of Net Casualty
Proceeds under this Section 8.3.
(e)    Facility Lease. Notwithstanding anything to the contrary in this
Article 8, if a Casualty or Condemnation occurs and the terms of the Facility
Lease are applicable thereto, then the terms of the Facility Lease shall govern
and control in such instances, including, without limitation, that Net Casualty
Proceeds shall be payable to Facility Tenant for the restoration of the Facility
to the extent such Net Casualty Proceeds

54151.4    39

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are payable to Facility Tenant under the terms of the Facility Lease. Where the
Facility Lease provides that Net Casualty Proceeds, or any portion thereof, are
payable to Borrower, the same shall be paid to Lender to be applied pursuant to
the applicable terms of this Article 8.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
9.1
Events of Default.

The occurrence of any one or more of the following shall constitute an “Event of
Default” as said term is used herein:
(g)    Failure of Borrower to pay when due any principal, interest, premium, fee
or any other amount payable under any Loan Document;
(h)    Failure of Borrower to strictly comply, and to cause strict compliance,
with the provisions of Section 5.1 (other than Section 5.1(i)), Section 5.2(a),
Section 5.2(l), Section 5.3(a), Section 5.3(b), Section 5.4(g), Article 7 and
Section 8.1;
(i)    Failure of Borrower for a period of thirty (30) days after written notice
from Lender, to observe or perform (or to cause observance or performance of)
any non-monetary covenant or condition contained in this Agreement or any other
Loan Documents not set forth in the subsections above; provided that if any such
failure concerning a non-monetary covenant or condition is susceptible to cure
and cannot reasonably be cured within said thirty (30) day period, then Borrower
shall have an additional sixty (60) day period to cure such failure and no Event
of Default shall be deemed to exist hereunder so long as Borrower commences such
cure within the initial thirty (30) day period and diligently and in good faith
pursues such cure to completion within such resulting ninety (90) day period
from the date of Lender’s notice; and provided further that if a different
notice or grace period is specified under any other subsection of this
Section 9.1 with respect to a particular breach, or if another subsection of
this Section 9.1 applies to a particular breach and does not expressly provide
for a notice or grace period, the specific provision shall control;
(j)    Any material suspension, limitation or restriction placed upon Borrower,
Facility Tenant, any Authorization, the Facility, the operations at the Facility
or Facility Tenant’s ability to admit residents or patients at the Facility
(e.g., an admissions ban or non-payment for new admissions by Medicare, Medicaid
or any Thirty Party Payor Program resulting from an inspection survey);
provided, however, if any such material suspension, limitation or restriction is
curable by Borrower or Facility Tenant under the applicable Authorization or
Legal Requirement, it shall not constitute an Event of Default if Borrower or
Facility Tenant promptly commences to cure such breach and thereafter diligently
pursues such cure to the completion thereof within the lesser of: (a) the cure
period under the applicable Legal Requirement or Authorization, or (b) sixty
(60) days after the occurrence of any such material suspension, limitation or
restriction;
(k)    If any warranty, representation, statement, report or certificate made
now or hereafter by Borrower is untrue or incorrect in any material respect at
the time made or delivered, provided that if such breach is reasonably
susceptible of cure, then no Event of Default shall exist so long as the
applicable party cures said breach within the notice and cure period provided in
9.1(c) above for such breach;
(l)    A Bankruptcy Action is taken by or against Borrower or an attachment or
execution is levied against the Facility;

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(m)    If one or more final and non-appealable judgments or decrees shall be
entered against Borrower involving in the aggregate a liability in excess of
$1,000,000.00 and such judgment or decree is not bonded, satisfied, settled or
dismissed within sixty (60) days after the entry of such judgment or decree;
(n)    A conviction or any guilty plea by Borrower in connection with a felony
criminal proceeding against Borrower, as applicable, involving a crime of moral
turpitude;
(o)    The occurrence of any other event or circumstance denominated as an Event
of Default herein or under any of the other Loan Documents and the expiration of
any applicable grace or cure periods, if any, specified for such Event of
Default herein or therein, as the case may be; or
(p)    A default shall occur under any other lease or agreement between Lender
or an Affiliate of Lender and Borrower, or any letter of credit, guaranty,
mortgage, deed of trust, or other instrument executed by Borrower in favor of
Lender or an Affiliate of Lender, in every case, whether now or hereafter
existing, where the default is not cured within any applicable grace period set
forth therein.
9.2
Remedies Conferred Upon Lender.

(f)    Upon the occurrence and during the continuation of an Event of Default,
all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower under this Agreement or any of the other
Loan Documents executed and delivered by, or applicable to, Borrower or at law
or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Indebtedness shall be declared due and payable,
and whether or not Lender shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the
Loan Documents with respect to the Facility. Any such actions taken by Lender
shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing (i) to the extent not prohibited by
applicable Law, Lender is not subject to any “one action” or “election of
remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has foreclosed upon its rights in the Facility under the Deed of Trust or
otherwise realized upon any security held by Lender in satisfaction of the
Indebtedness or the Indebtedness has been paid in full.
(g)    Any amounts recovered from collateral for the Loan after the occurrence
and during the continuation of an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any other
amounts due under the Loan Documents in such order, priority and proportions as
Lender in its sole discretion shall determine.
(h)    Upon the occurrence and during the continuation of an Event of Default,
Lender may declare all unpaid principal of and accrued interest on the Note,
together with all other sums payable under the Loan Documents, to be immediately
due and payable, whereupon the same shall become and be immediately due and
payable, anything in the Loan Documents to the contrary notwithstanding, and
without presentation, protest or further demand or notice of any kind, all of
which are, to the fullest extent permitted by law, expressly hereby waived by
Borrower.
(i)    Upon the occurrence and during the continuation of an Event of Default
and upon prior written notice to Borrower, Lender may appoint or seek
appointment of a receiver, without regard to the solvency of Borrower or the
adequacy of the security, for the purpose of preserving the Facility, preventing

54151.4    41

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waste, and to protect all rights accruing to Lender by virtue of this Agreement
and the other Loan Documents. All expenses incurred in connection with the
appointment of such receiver, or in protecting or preserving the Facility shall
be charged against Borrower and shall be secured by the Deed of Trust.
(j)    Upon the occurrence and during the continuation of an Event of Default,
for the purposes of carrying out the provisions and exercising the rights,
powers and privileges granted by or referred to in this Agreement, Borrower
hereby irrevocably constitutes and appoints Lender its true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and do and perform any acts which are referred to in
this Agreement, in the name and on behalf of Borrower. The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an interest and
irrevocable.
(k)    Except as otherwise expressly set forth herein, Borrower hereby waives to
the extent not prohibited by applicable law (a) all presentments, demands for
payment or performance, notices of nonperformance (except to the extent required
by the provisions hereof or of any other Loan Documents), protests and notices
of dishonor, (b) any requirement of diligence or promptness on Lender’s part in
the enforcement of its rights (but not fulfillment of its obligations) under the
provisions of this Agreement or any other Loan Document, and (c) any and all
notices of every kind and description which may be required to be given by any
statute or rule of law and are not otherwise required to be given hereunder or
under any other Loan Document, to the fullest extent permitted by applicable
law.
(l)    No course of dealing and no delay or omission by Lender or Borrower in
exercising any right or remedy hereunder shall operate as a waiver thereof or of
any other right or remedy and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. No waiver or consent by
Lender shall be binding upon Lender unless it is in writing and signed by
Lender. Lender’s exercise of Lender’s right to remedy any default by Borrower to
Lender or any other Person shall not constitute a waiver of the default
remedied, a waiver of any other prior or subsequent default by Borrower or a
waiver of the right to be reimbursed for any and all of its expenses in so
remedying such default.
(m)    The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender’s sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon the occurrence and
continuation of an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one default or Event of Default with respect to Borrower shall not be
construed to be a waiver of any subsequent default or Event of Default by
Borrower or to impair any remedy, right or power consequent thereon.
ARTICLE 10
LOAN EXPENSE, COSTS AND ADVANCES
10.1
Loan and Administration Expenses.

Except as otherwise expressly provided in this Agreement, Borrower
unconditionally agrees to pay all reasonable costs and expenses of Lender
incurred in attempting to enforce or collect payment of the Loan or enforce any
rights of Lender or Borrower’s obligations hereunder and expenses of Lender
incurred (including expenses relating to documentary and expert evidence) in
attempting to realize on any security

54151.4    42

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for the Loan (including any foreclosure sale of the Facility, conveyance in lieu
transaction or costs incurred in connection with any litigation or bankruptcy or
administrative hearing and any appeals therefrom and any post-judgment
enforcement action including, without limitation, supplementary proceedings in
connection with the enforcement of this Agreement). All such costs or expenses
incurred or advances or payments made by Lender shall also include court costs,
reasonable legal fees and disbursements relating thereto and shall be included
as additional Indebtedness evidenced by the Note and secured by the Deed of
Trust and the other Loan Documents and, if not paid within ten (10) days after
payment is requested by Lender, shall bear interest at the Default Rate from the
date due until paid. Borrower agrees to pay all brokerage, finder or similar
fees or commissions payable in connection with the transactions contemplated
hereby and shall indemnify, defend and hold harmless Lender against all claims,
liabilities, and Expenses arising in relation to any claim by broker, finder or
similar person. Lender is hereby authorized, without any specific request or
direction by Borrower, to make disbursements from time to time in payment of or
to reimburse Lender for all Loan expenses and fees.
10.2
Right of Lender to Make Advances to Cure Borrower’s Defaults.

In the event that Borrower fails to perform any of Borrower’s covenants,
agreements or obligations contained in this Agreement or any of the other Loan
Documents (after the expiration of applicable grace periods, except in the event
of an emergency or other exigent circumstances), Lender may (but shall not be
required to) perform any of such covenants, agreements and obligations, and any
amounts expended by Lender in so doing and shall constitute additional
Indebtedness evidenced by the Note and secured by the Deed of Trust and the
other Loan Documents and shall bear interest at a rate per annum equal to the
Default Rate until paid.
ARTICLE 11
GENERAL PROVISIONS
11.1
Captions.

The captions and headings of various Articles, Sections and subsections of this
Agreement and the other Loan Documents and the Exhibits and Schedules pertaining
thereto are for convenience only and are not to be considered as defining or
limiting in any way the scope or intent of the provisions hereof or thereof.
11.2
Lender’s Discretion.

(a)    Whenever pursuant to this Agreement Lender has exercised any right given
to it to disapprove any materials submitted in writing from Borrower, any
resubmission for reconsideration by Borrower to Lender of such materials must be
accompanied by a version of such materials clearly showing (by way of a
“blackline”, “redline” or otherwise) any changes made from the version of such
materials previously submitted. Any time period within which Lender may be
obligated by the terms of this Agreement to provide its approval or disapproval
shall not commence until such time as Lender shall have received such version
showing such changes.
(b)    Lender may, in Lender’s sole and absolute discretion, accept or reject
any proposed cure of an Event of Default. In no event shall any portion of this
Agreement or any of the other Loan Documents which provides that Lender shall
have certain rights and/or remedies only during the continuance of an Event of
Default be construed so as to require Lender to accept a cure of any such Event
of Default. Unless and until Lender expressly accepts any proposed cure of an
Event of Default in writing, such Event of Default shall be deemed to be
continuing for purposes of this Agreement and the other Loan Documents.

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11.3
Governing Law.

THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER AND THE OTHER LOAN
DOCUMENTS AND THE OBLIGATIONS ARISING THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA.
11.4
Jurisdiction.

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION
BE INSTITUTED IN ANY FEDERAL COURT IN THE NORTHERN DISTRICT OF TEXAS OR STATE
COURT IN DALLAS COUNTY, TEXAS, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY
NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON‑CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
11.5
Waiver of Jury Trial.

EACH OF BORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND TO THE GREATEST EXTENT PERMITTED BY LAW
WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. BORROWER AND
LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
11.6
Modification; Consent.

No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly
provided herein, no notice to, or demand on Borrower, shall entitle Borrower to
any other or future notice or demand in the same, similar or other
circumstances.
11.7
Delay Not a Waiver.

Neither any failure nor any delay on the part of Lender or Borrower in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder or under any other
Loan Document, shall operate as or constitute a waiver thereof, nor shall a
single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, with
respect to the Lender, and not by way of limitation, by accepting payment after
the due date of any amount payable under this Agreement or any other Loan

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Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement or the
other Loan Documents, or to declare a default for failure to effect prompt
payment of any such other amount.
11.8
Waivers; Acquiescence or Forbearance.

(a)    Borrower for itself and all endorsers, guarantors and sureties and their
heirs, legal representatives, successors and assigns, to the fullest extent
permitted by law, (i) waives presentment for payment, demand, notice of
nonpayment or dishonor, protest of any dishonor, protest and notice of protest
and all other notices in connection with the delivery, acceptance, performance,
default or enforcement of the payment of the Loan; (ii) waives and renounces all
rights to the benefits of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, valuation, stay, extension, redemption,
appraisement, or exemption and homestead laws now provided, or which may
hereafter be provided, by the laws of the United States and of any state thereof
against the enforcement and collection of the obligations evidenced by the Note
or this Loan Agreement or as a bar to the enforcement of the lien or security
interest created by any of the Loan Documents.
(b)    Borrower for itself and all endorsers, guarantors and sureties and their
heirs, legal representatives, successors and assigns, to the fullest extent
permitted by law, (i) agrees that its liability shall not be in any manner
affected by any indulgence, extension of time, renewal, waiver, or modification
granted or consented to by Lender; (ii) consents to any indulgences and all
extensions of time, renewals, waivers, or modifications that may be granted by
Lender with respect to the payment or other provisions of this Loan Agreement,
the Note, and to any substitution, exchange or release of the collateral, or any
part thereof, with or without substitution, and agrees to the addition or
release of any endorsers, guarantors, or sureties, or whether primarily or
secondarily liable, without notice to Borrower and without affecting its
liability hereunder; (iii) agrees that its liability shall be unconditional and
without regard to the liability of any other person or entity; and
(iv) expressly waives the benefit of any statute or rule of law or equity now
provided, or which may hereafter be provided, which would produce a result
contrary to or in conflict with the foregoing.
(c)    Each and every covenant and condition for the benefit of Lender contained
in this Agreement and the other Loan Documents may be waived by Lender,
provided, however, that to the extent that Lender may have acquiesced in any
noncompliance with any requirements or conditions precedent to the closing of
the Loan, Lender may at any time after such acquiescence require Borrower to
comply with all such requirements. Any forbearance by Lender in exercising any
right or remedy under any of the Loan Documents, or otherwise afforded by
applicable law, including any failure to accelerate the Maturity Date shall not
be a waiver of or preclude the exercise of any right or remedy nor shall it
serve as a novation of the Note or as a reinstatement of the Loan or a waiver of
such right of acceleration or the right to insist upon strict compliance of the
terms of the Loan Documents. Lender’s acceptance of payment of any sum secured
by any of the Loan Documents after the due date of such payment shall not be a
waiver of Lender’s right to either require prompt payment when due of all other
sums so secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Lender shall not be a waiver of Lender’s right to accelerate the maturity of the
Loan, nor shall Lender’s receipt of any awards, proceeds, or damages under
Article 9 of this Agreement operate to cure or waive Borrower’s default in
payment of sums secured by any of the Loan Documents.
11.9
Preferences.

Lender shall have the continuing and exclusive right to apply or reverse and
reapply any and all payments by Borrower to any portion of the obligations of
Borrower hereunder. To the extent Borrower makes a payment or payments to
Lender, which payment or payments or any part thereof are subsequently

54151.4    45

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invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.
11.10
Disclaimer by Lender.

Lender shall not be liable to any contractors, subcontractors, supplier,
architect, engineer or other party for labor or services performed or materials
supplied in connection with the Facility. Lender shall not be liable for any
debts or claims accruing in favor of any such parties against Borrower or others
or against the Facility. Lender neither undertakes nor assumes any
responsibility or duty to Borrower to select, review, inspect, supervise, pass
judgment upon or inform Borrower of any matter in connection with the Facility.
Borrower shall rely entirely upon its own judgment with respect to such matters,
and any review, inspection, supervision, exercise of judgment or supply of
information to Borrower by Lender in connection with such matters is for the
protection of Lender only, and neither Borrower nor any third party is entitled
to rely thereon.
11.11
Partial Invalidity; Severability.

If any of the provisions of this Agreement or the other Loan Documents, or the
application thereof to any person, party or circumstances, shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement or the other Loan
Documents, or the application of such provision or provisions to persons,
parties or circumstances other than those as to whom or which it is held invalid
or unenforceable, shall not be affected thereby, and every provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law
and to this end, the provisions of this Agreement and all the other Loan
Documents are declared to be severable.
11.12
Definitions Include Amendments.

Definitions contained in this Agreement which identify documents, including, but
not limited to, the Loan Documents, shall be deemed to include all amendments
and supplements to such documents from the date hereof, and all future
amendments, modifications, and supplements thereto entered into from time to
time to satisfy the requirements of this Agreement or otherwise with the consent
of Lender. Reference to this Agreement contained in any of the foregoing
documents shall be deemed to include all amendments and supplements to this
Agreement.
11.13
Entire Agreement.

This Agreement, taken together with all of the other Loan Documents and all
certificates and other documents delivered by Borrower to Lender, embody the
entire agreement with respect to the Loan and supersede all prior commitments,
agreements, representations, and understandings, written or oral, relating to
the subject matter hereof, and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto.
11.14
Waiver of Damages.

In no event shall Lender be liable to Borrower for punitive, exemplary or
consequential damages, including, without limitation, lost profits, whatever the
nature of a breach by Lender of its obligations under this Agreement or any of
the Loan Documents, and Borrower waives all claims for punitive, exemplary or

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consequential damages; provided, however, the foregoing waiver of claims for
exemplary and consequential damages shall not be applicable to claims arising
from fraud or willful misconduct on the part of Lender.
11.15
Waiver of Notice.

Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or the other Loan
Documents specifically and expressly provide for the giving of notice by Lender
to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.
11.16
Claims Against Lender.

Lender shall not be in default under this Agreement, or under any other Loan
Documents, unless a written notice specifically setting forth the claim of
Borrower shall have been given to Lender within six (6) months after Borrower
first had knowledge of the occurrence of the event which Borrower alleges gave
rise to such claim and Lender does not remedy or cure the default, if any there
be, promptly thereafter. Borrower waives any claim, set-off or defense against
Lender arising by reason of any alleged default by Lender as to which Borrower
does not give such notice timely as aforesaid. No failure by Lender to perform
any of its obligations hereunder shall be a valid defense to, or result in any
offset against, any payments that Borrower is obligated to make under any of the
Loan Documents. The obligations of Borrower under this Agreement and the other
Loan Documents shall not be reduced, discharged or released because or by reason
of any existing or future offset, claim or defense of Borrower, or any other
party, against any participant by reason of such participant’s failure to
perform its obligations under this Agreement, including, without limitation, the
failure of any participant to fund any advance. Borrower acknowledges that the
foregoing waivers are or may be essential to Lender’s ability to enforce its
remedies without delay and that such waiver therefore constitutes a substantial
part of the bargain between Lender and Borrower with regard to the Loan. In the
event that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where, by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, neither Lender nor its
agents shall be liable for any monetary damages, and Borrower’s sole remedy
shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. Any action or proceeding to determine whether Lender has
acted reasonably shall be determined by an action seeking declaratory judgment.
Any expedited procedure legally available with such a declaratory judgment
action or action for injunctive relief may be utilized to the extent possible.
11.17
Set-Offs.

Any assignee of Lender’s interest in and to this Agreement and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
11.18
Funds Held by Lender.

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Any Net Casualty Proceeds, any Net Casualty Proceeds Deficiency and any other
sums deposited with Lender hereunder shall not bear interest, shall not be held
by Lender in trust or as an agent of Borrower and may be commingled with the
other assets of Lender; provided, however, Lender shall hold any Net Casualty
Proceeds and Net Casualty Proceeds Deficiency in excess of $100,000 in a
segregated account.
11.19
Relationship.

The relationship between Lender and Borrower shall be that of creditor-debtor
only. No term in this Agreement or in the other Loan Documents and no course of
dealing between the parties shall be deemed to create any relationship of
agency, partnership, joint venture, tenancy in common or joint tenancy or any
fiduciary duty by Lender to Borrower or any other party.
11.20
No Third Party Beneficiaries.

This Agreement and the other Loan Documents are solely for the benefit of Lender
and nothing contained in this Agreement or the other Loan Documents shall be
deemed to confer upon anyone other than Lender any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein and no other person or persons shall have any benefits, rights or
remedies under or by reason of this Agreement or the other Loan Documents, or by
reason of any actions taken by Lender pursuant to this Agreement or the other
Loan Documents.
11.21
Agents.

In exercising any rights under the Loan Documents or taking any actions provided
for therein, Lender may act through its employees, agents or independent
contractors as authorized by Lender.
11.22
Conflict; Construction of Documents; Reliance.

In the event of any conflict between the provisions of this Agreement and any of
the other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that the Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any parent, subsidiary or affiliate of
Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action on
the basis of the foregoing with respect to Lender’s exercise of any such rights
or remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.
11.23
Interpretation.

With respect to all Loan Documents, whenever the context requires, all words
used in the singular will be construed to have been used in the plural, and vice
versa, and each gender will include any other gender. The word “obligations” is
used in its broadest and most comprehensive sense, and includes all primary,
secondary, direct, indirect, fixed and contingent obligations. It further
includes all principal, interest,

54151.4    48

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prepayment charges, late charges, loan fees and any other fees and charges
accruing or assessed at any time, as well as all obligations to perform acts or
satisfy conditions. No listing of specific instances, items or matters in any
way limits the scope or generality of any language in the Loan Documents. This
Agreement and all of the other Loan Documents shall not be construed more
strictly against one party than against the other, merely by virtue of the fact
that it may have been prepared primarily by counsel for one of the parties.
11.24
Successors and Assigns.

Subject to the restrictions on transfer and assignment contained in
Section 5.1(a) of this Agreement, this Agreement and the other Loan Documents
shall inure to the benefit of and shall be binding on Lender and Borrower and
their respective legal representative, successors and permitted (in the case of
Borrower) assigns.
11.25
Time is of the Essence.

Borrower agrees that time is of the essence under this Agreement and the other
Loan Documents and the performance of each of the covenants and agreements
contained herein and therein.
11.26
Notices.

All notices, demands, requests, consents, approvals or other communications (any
of the foregoing, a “Notice”) required, permitted or desired to be given
hereunder shall be in writing sent by facsimile transmission (with answer back
acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at the following applicable address:
If to Borrower:
c/o Neal Richards Group, LLC 
3030 Olive Street, Suite 220
Dallas, Texas 75219
Attn: Derrick N. Evers
Fax No.: (214) 754-0011
If to Lender:
c/o Sabra Health Care REIT, Inc.
18500 Von Karman Avenue, Suite 550
Irvine, California 92612
Attn: Richard K. Matros
Fax No.: (949) 679-8868
With a copy to:
c/o Neal Richards Group, LLC 
3030 Olive Street, Suite 220
Dallas, Texas 75219
Attn: Lee A. White
Fax No.: (214) 754-0011
With a copy to:
Sherry Meyerhoff Hanson & Crance LLP
610 Newport Center Drive, Suite 1200
Newport Beach, California 92660
Attn: Kevin L. Sherry, Esq.
Fax No.: (949) 719-1212

A party may designate a different address by notice to the other party as
provided above. Lender shall use commercially reasonable efforts to provide
copies of notices rendered to Borrower to the additional parties specified
above, but the failure to effect any such Notice to such additional party shall
not affect the validity and full force and effect of such Notice upon Borrower.
Any Notice shall be deemed to have been received on the date of delivery if
delivered during business hours on a Business Day (otherwise on the next
Business Day). Any notice or demand delivered to the person or entity named
above to accept notices and demands for such party shall constitute notice or
demand duly delivered to such party, even if delivery is refused.
11.27
Execution in Counterparts.

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This Agreement and the other Loan Documents may be executed in any number of
counterparts and by different parties hereto or thereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
11.28
Joint and Several.

The obligations of Borrower hereunder and under each of the other Loan Documents
shall be joint and several in every respect. If Lender delivers notice to one
Borrower hereunder, such notice shall be deemed delivered to each Borrower. The
actions of any one Borrower shall be binding on each other Borrower and Lender
shall be entitled to rely on any such action, even if not specifically
unanimous.

[Signature page follows]

EXECUTED as of the date first set forth above.
BORROWER:
FOREST PARK REALTY PARTNERS III, LP,
a Texas limited partnership
By:    Neal Richards Group Forest Park Development, LLC,
    a Texas limited liability company,
    its General Partner
By:     /s/ Derrick N. Evers            
Name: Derrick N. Evers            
Title: Manager                    

BT FOREST PARK REALTY PARTNERS, LP,
a Texas limited partnership
By:    GP BT Healthcare Development Partners, LLC,
    a Texas limited liability company,
    its General Partner
By:     /s/ Derrick N. Evers            
Name: Derrick N. Evers            
Title: Authorized Signatory            
[Signatures continue on next page]

54151.4    50

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LENDER:
SABRA TEXAS HOLDINGS, L.P.,
a Texas limited partnership
By:    Sabra Texas Holdings GP, LLC,
    a Texas limited liability company,
    Its General Partner
By:     /s/ Talya Nevo-Hacohen            

    Name: Talya Nevo-Hacohen            

    Title:     Chief Investment Officer        

54151.SIG    S-1

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EXHIBIT A-1
Legal Description of Land
PARCEL A: FEE SIMPLE
BEING A TRACT OF LAND LOCATED IN THE M.J. SANCHEZ SURVEY, ABSTRACT No. 1272,
BEING A PORTION OF LOT 2E, BLOCK A/7748, FOREST CENTRAL ADDITION No. 12, AN
ADDITION TO THE CITY OF DALLAS, DALLAS COUNTY, TEXAS, ACCORDING TO THE PLAT
RECORDED IN COUNTY CLERK'S NUMBER 201000180724, PLAT RECORDS, DALLAS COUNTY,
TEXAS (P.R.D.C.T.), AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS
FOLLOWS:
BEGINNING AT A 1/2" IRON ROD FOUND WITH A CAP STAMPED "WIER & ASSOC INC", BEING
THE SOUTHEAST CORNER OF SAID LOT 2E, THE NORTHEAST CORNER OF LOT 2F OF SAID
FOREST CENTRAL ADDITION No. 12., AND IN THE WEST LINE OF A TRACT OF LAND
DESCRIBED IN A DEED TO DALLAS POWER AND LIGHT COMPANY, RECORDED IN VOLUME 4963,
PAGE 188, DEED RECORDS, DALLAS COUNTY, TEXAS (D.R.D.C.T.);
THENCE SOUTH 85°28'10" WEST, DEPARTING THE WEST LINE OF SAID DALLAS POWER AND
LIGHT COMPANY TRACT, ALONG THE SOUTH LINE OF SAID LOT 2E AND THE NORTH LINE OF
SAID LOT 2F, A DISTANCE OF 189.65 FEET TO A 1/2" IRON ROD SET WITH A CAP STAMPED
"WIER & ASSOC INC";
THENCE NORTH 07°02'48" WEST, DEPARTING THE SOUTH LINE OF SAID LOT 2E AND THE
NORTH LINE OF SAID LOT 2F, A DISTANCE OF 43.20 FEET TO AN "X" CUT SET;
THENCE SOUTH 82°58'53" WEST, A DISTANCE OF 17.75 FEET TO AN "X" CUT SET;
THENCE NORTH 07°03'40" WEST, A DISTANCE OF 284.26 FEET TO A POINT FOR A CORNER
IN THE FACE OF A 6 STORY MEDICAL OFFICE BUILDING;
THENCE SOUTH 82°57'18" WEST, ALONG THE FACE OF SAID BUILDING, A DISTANCE OF
40.33 FEET TO A POINT FOR A CORNER AT THE INTERSECTION OF THE FACE OF SAID
BUILDING AND THE CENTER OF A 2 INCH EXPANSION JOINT;
THENCE ALONG THE CENTER OF A 2 INCH EXPANSION JOINT AS FOLLOWS:
NORTH 06°56'08" WEST, A DISTANCE OF 0.63 FEET TO A POINT FOR A CORNER;
SOUTH 83°04'14" WEST, A DISTANCE OF 90.56 FEET TO A POINT FOR A CORNER;
SOUTH 06°55'46" EAST, A DISTANCE OF 4.37 FEET TO A POINT FOR A CORNER AT THE
INTERSECTION OF THE FACE OF SAID BUILDING AND THE CENTER OF SAID 2 INCH
EXPANSION JOINT;
THENCE SOUTH 39°59'43" WEST, DEPARTING THE FACE OF SAID BUILDING, A DISTANCE OF
39.85 FEET TO AN "X" CUT SET;

54151.4    Exhibit A-1

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THENCE SOUTH 82°55'37" WEST, A DISTANCE OF 50.50 FEET TO AN "X" CUT SET IN THE
WEST LINE OF SAID LOT 2E AND THE EAST LINE OF LOT 2C OF SAID FOREST CENTRAL
ADDITION No. 12 AND BEING THE BEGINNING OF A NON-TANGENT CURVE TO THE LEFT;
THENCE NORTHWESTERLY, AN ARC DISTANCE OF 334.70 FEET, ALONG SAID NON-TANGENT
CURVE TO THE LEFT HAVING A RADIUS OF 725.00 FEET, A DELTA ANGLE OF 26°27'04" AND
A CHORD BEARING OF NORTH 11°21'10" WEST, 331.74 FEET TO AN "X" CUT FOUND, BEING
THE NORTHEAST CORNER OF SAID LOT 2C;
THENCE NORTH 72°00'31" WEST, ALONG THE NORTH LINE OF SAID LOT 2C, A DISTANCE OF
124.74 FEET TO A 1/2" IRON ROD FOUND WITH A CAP STAMPED "WIER & ASSOC INC",
BEING THE NORTHWEST CORNER OF LOT 2C OF SAID FOREST CENTRAL ADDITION No. 12 AND
IN THE EAST RIGHT-OF-WAY LINE OF U.S. HIGHWAY No. 75 (CENTRAL EXPRESSWAY), A
VARIABLE WIDTH PUBLIC RIGHT-OF-WAY;
THENCE NORTH 17°06'20" EAST, ALONG THE EAST RIGHT-OF-WAY LINE OF SAID U.S.
HIGHWAY No. 75, A DISTANCE OF 51.00 FEET TO AN "X" CUT FOUND BEING THE MOST
NORTHERLY NORTHWEST CORNER OF SAID LOT 2E, AND IN THE SOUTH LINE OF LOT 2D,
BLOCK A/7749, FOREST CENTRAL ADDITION No. 12, AN ADDITION TO THE CITY OF DALLAS,
DALLAS COUNTY, TEXAS, ACCORDING TO THE PLAT RECORDED IN COUNTY CLERK'S NUMBER
201000157478, P.R.D.C.T.;
THENCE DEPARTING THE EAST RIGHT-OF-WAY LINE OF SAID U.S. HIGHWAY No. 75, ALONG
THE NORTH LINE OF SAID LOT 2E AND THE SOUTH LINE OF SAID LOT 2D AS FOLLOWS:
SOUTH 72°00'31" EAST, A DISTANCE OF 91.03 FEET TO AN "X" CUT FOUND;
NORTH 82°59'47" EAST, A DISTANCE OF 184.37 FEET TO AN "X" CUT FOUND;
SOUTH 07°00'13" EAST, A DISTANCE OF 18.58 FEET TO A 1/2" IRON ROD WITH A CAP
STAMPED "WIER & ASSOC INC" FOUND;
NORTH 82°59'47" EAST, A DISTANCE OF 14.00 FEET TO AN "X" CUT FOUND;
NORTH 07°00'13" WEST, A DISTANCE OF 18.58 FEET TO AN "X" CUT FOUND;
NORTH 82°59'47" EAST, A DISTANCE OF 91.17 FEET TO AN "X" CUT FOUND;
NORTH 07°58'21" EAST, A DISTANCE OF 70.55 FEET TO AN "X" CUT FOUND;
NORTH 82°48'28" EAST, A DISTANCE OF 34.07 FEET TO A 60D NAIL FOUND, BEING THE
MOST NORTHERLY NORTHEAST CORNER OF SAID LOT 2E, THE MOST EASTERLY SOUTHEAST
CORNER OF SAID LOT 2D, AND IN THE WEST LINE OF SAID DALLAS POWER AND LIGHT
COMPANY, RECORDED IN VOLUME 4963, PAGE 188, DEED RECORDS, DALLAS COUNTY, TEXAS
(D.R.D.C.T.);
THENCE ALONG THE EAST LINE OF SAID LOT 2E AND THE WEST LINE OF SAID DALLAS POWER
AND LIGHT COMPANY TRACT AS FOLLOWS:
SOUTH 25°34'55" EAST, A DISTANCE OF 412.95 FEET TO AN "X" CUT FOUND;

54151.4    Exhibit A-2

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SOUTH 03°51'55" EAST, A DISTANCE OF 373.72 FEET TO THE PLACE OF BEGINNING AND
CONTAINING 5.149 ACRES (224,280 SQUARE FEET) OF LAND, MORE OR LESS.
PARCEL B: FEE SIMPLE
BEING A TRACT OF LAND LOCATED IN THE M.J. SANCHEZ SURVEY, ABSTRACT NO. 1272,
BEING ALL OF LOT 2D, BLOCK A/7748, FOREST CENTRAL ADDITION NO. 12, AN ADDITION
TO THE CITY OF DALLAS, DALLAS COUNTY, TEXAS, ACCORDING TO THE PLAT RECORDED IN
COUNTY CLERK’S NUMBER 201000180724, PLAT RECORDS, DALLAS COUNTY, TEXAS.
PARCEL C: EASEMENT ESTATE
NON-EXCLUSIVE EASEMENT AS CREATED IN DECLARATION OF ACCESS AND COVENANTS DATED
JUNE 17, 1996, EXECUTED BY TRI-STATES THEATERS, A TEXAS LIMITED PARTNERSHIP,
RECORDED IN VOLUME 96154, PAGE 2543, DEED RECORDS, DALLAS COUNTY, TEXAS, AS
AFFECTED BY INSTRUMENT RECORDED UNDER CLERK'S FILE NO. 20080075081, REAL
PROPERTY RECORDS, DALLAS COUNTY, TEXAS.
PARCEL D: EASEMENT ESTATE
NON-EXCLUSIVE EASEMENT RIGHTS RECORDED UNDER CLERK'S FILE NO. 20080100808, REAL
PROPERTY RECORDS, DALLAS COUNTY, TEXAS.
PARCEL E: EASEMENT ESTATE
NON-EXCLUSIVE EASEMENT AS CREATED IN RECIPROCAL EASEMENT AGREEMENT, DATED MARCH
6, 2013, EXECUTED BY AND BETWEEN BT FOREST PARK REALTY PARTNERS, LP AND FOREST
PARK REALTY PARTNERS III, LP, FILED MARCH 6, 2013, UNDER CLERK'S FILE NO.
201300069103, REAL PROPERTY RECORDS, DALLAS COUNTY, TEXAS.
PARCEL F: EASEMENT ESTATE
NON-EXCLUSIVE EASEMENT AS CREATED IN MUTUAL ACCESS EASEMENT AGREEMENT, DATED
DECEMBER 9, 2009, EXECUTED BY AND BETWEEN BT FOREST PARK REALTY PARTNERS, LP AND
FOREST PARK REALTY PARTNERS III, LP, AND WRC CENTRAL FOREST L.P., FILED JANUARY
6, 2010 UNDER CLERK'S FILE NO. 201000003016, REAL PROPERTY RECORDS, DALLAS
COUNTY, TEXAS.
PARCEL G: EASEMENT ESTATE
NON-EXCLUSIVE EASEMENT ESTATE AS CREATED IN MUTUAL ACCESS EASEMENT AGREEMENT,
FILED SEPTEMBER 29, 2009, RECORDED UNDER CLERK’S FILE NO. 200900276413, REAL
PROPERTY RECORDS, DALLAS COUNTY, TEXAS.

54151.4    Exhibit A-3

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EXHIBIT B
Conditions Precedent to Loan Closing
1.
Lender’s receipt and approval of the following, in its sole and absolute
discretion:

a.
an ALTA survey for the Land, certified to Lender in form and substance
reasonably satisfactory to Lender, with all title exceptions plotted or noted
thereon;

b.
a Phase I site assessment for the Land, showing Lender as a
recipient/beneficiary;

c.
a search of the records of the office of the Secretary of the State of Texas and
the Official Records of the County showing all Uniform Commercial Code financing
statements and fixture filings against Borrower and/or the Facility and the Land
or any part thereof or interest therein;

d.
a certificate of the zoning official having jurisdiction over the Facility in
form and substance reasonably satisfactory to Lender showing that the Facility
complies with all applicable zoning and land use laws, rules and regulations as
well as all Subdivision Statutes;

e.
a copy of the Facility Lease, together with any and all amendments,
modifications or supplements thereto and any and all other guaranties or other
ancillary documents executed in connection with the Facility Lease;

f.
copy of all existing covenants, conditions or restrictions, parking easements or
agreements, reciprocal easement agreements or similar agreements or instruments
affecting the use or enjoyment of the Facility, together with any and all
amendments, modifications or supplements thereto, to the extent not previously
delivered to Lender by the Title Company;

g.
all of Borrower’s and, to the extent the same are available to Borrower under
the terms of the Facility Lease, Facility Tenant’s books, records, income and
expense statements, year-end financial and monthly operating statements relating
to the Facility for the three most recent fiscal years prior to the Closing Date
and, to the extent available, the current year to date, together with operating
budgets for the current calendar year and the succeeding calendar year;

h.
all plans and specifications, soil, engineering, environmental or architectural
notices, studies, reports or plans, and all other reports concerning the
Facility which relate to the physical condition or operation of the Facility or
recommended improvements thereto, including, without limitation, any information
that relates to the Facility’s compliance with the Americans with Disabilities
Act of 1990;

i.
all permits, licenses, approvals, entitlements and other governmental, utility
service provider and other quasi-governmental authorizations, including any
certificates of occupancy that Borrower or Facility Tenant now holds in
connection with the ownership, planning, development, construction, use,
operation or maintenance of the Facility, and all amendments, modifications,
supplements, general conditions and addenda thereto;

j.
all appraisals of the Facility prepared in the last eighteen (18) months;

k.
all guarantees, representations and warranties, whether express or implied, made
to or inuring to the benefit of Borrower regarding the Facility or its operation
or the construction of the

54151.4    Exhibit B-1

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Improvements; and all contracts, leases and other binding agreements currently
in effect relating to the Facility and/or the use thereof to which Borrower is a
party, together with any and all amendments, modifications or supplements
thereto;
l.
the most recent tax bills for the Facility including, but not limited to, bills
for real estate taxes and personal property taxes, if any; and all notices
received by Borrower within the two (2) years immediately preceding the date
hereof and pertaining to real estate taxes or assessments applicable to the
Facility;

m.
copies of any and all written notices received by Borrower or, to the extent the
same are available to Borrower under the terms of the Facility Lease, Facility
Tenant within the last two (2) years from any governmental or quasi-governmental
authorities with respect to (A) violations or alleged violations of any
Authorization, law, code or regulation, including, without limitation, any
health and sanitation, fire or building codes; (B) defects or other deficiencies
in the Facility, and (C) results of all inspections of the Facility.

2.
The Title Company shall be unconditionally and irrevocably committed to issue
the Title Policy in accordance with the Closing Procedure Letter

54151.4    Exhibit B-2

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EXHIBIT C
Closing Date Deliverables
Loan Documents
Loan Agreement, by and between Borrower and Lender
Secured Promissory Note, from Borrower to the order of Lender
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture
Filing, from Borrower in favor of Lender
Specific Assignment of Lease and Subordination Agreement, executed by Borrower,
Facility Tenant and Lender
Deliverables
Certified Organizational Documents for Borrower, including good standing
certificates from the state of its formation.
Authorizing resolutions from Borrower, including incumbency certificates
Legal opinion from Borrower’s counsel as to due authorization, execution,
delivery and enforceability with respect to all Loan Documents
Evidence of the insurance required under the Loan Documents, with Lender shown
as an additional insured or loss payee, as applicable
Estoppel Certificate from Facility Tenant in favor of Lender
Option Agreement, between Borrower and Lender
Memorandum of Option Agreement, executed by Borrower and Lender
Owner’s Affidavit and Gap Indemnity from Borrower in favor of Title Insurer

54151.4    Exhibit C

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EXHIBIT D
Reporting Requirements
REPORT
DUE DATE
“Tenant’s Standard Monthly Reporting Package”, 
as defined in the Facility Lease.
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Five (5) days after Borrower receives the same from Facility Tenant, and
Borrower shall take all reasonable steps to cause Facility Tenant to deliver
such statements and reports within thirty (30) days of the end of each calendar
month
Facility Tenant’s financial statements (as described in Section 35(a)(i) of the
Facility Lease) and Tenant’s “Key Performance Reporting”,
as defined in the Facility Lease 
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Five (5) days after Borrower receives the same from Facility Tenant, and
Borrower shall take all reasonable steps to cause Facility Tenant to timely
deliver such statements and reports
Quarterly financial statements  
of Borrower
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Forty-Five (45) days after the end of each of quarter of the fiscal year of
Borrower
Facility Tenant’s audited financials (as described in Section 35(a)(ii) of the
Facility Lease) 
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Five (5) days after Borrower receives the same from Facility Tenant, and
Borrower shall take all reasonable steps to cause Facility Tenant to timely
deliver such financials
Annual financial statements  
of Borrower certified as true and accurate by an officer or manager of Borrower
or its general partner
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Ninety (90) days after the fiscal year end of Borrower
Federal tax returns 
of Borrower
Thirty (30) days after the filing of such returns with the IRS
Regulatory reports with respect to the Facility, as follows (if and to the
extent applicable):
(1) all federal, state and local licensing and reimbursement certification
surveys, inspection and other reports received by Borrower as to the Facility
and its operations, including state department of health licensing surveys;
(2) Medicare and Medicaid certification surveys; and
(3) life safety code reports.
(Via e-mail to jmachado@sabrahealth.com, or such other e-mail address as Lender
may designate from time to time)
Ten (10) Business Days after receipt by Borrower
Reports of regulatory violations,
by written notice of the following (if and to the extent applicable):
(1) any violation of any federal, state or local licensing or reimbursement
certification statute or regulation, including Medicare or Medicaid;
(2) any suspension, termination or restriction placed upon Borrower, Facility
Tenant or the Facility, the operation of the Facility or the ability to admit
patients;
(3) intentionally omitted; or
(4) any violation of any other permit, approval or certification in connection
with the Facility or the operations thereof, by any federal, state or local
authority, including Medicare or Medicaid.
Two (2) Business Days after receipt by Borrower

54151.4    Exhibit D

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EXHIBIT E
Environmental Documents
1.
Phase I Environmental Site Assessment dated November, 2011, prepared by John T.
McRae and Sonja D. Williams with Rone Engineering Services, Ltd., for Forest
Park Medical Partners.

2.
Phase I Environmental Site Assessment dated May 1, 2009, prepared by W&M
Environmental Group, Inc. for WRC Central Forest, L.P. and Union Bank.

3.
Phase I Environmental Site Assessment dated December 13, 2006, prepared by W&M
Environmental Group, Inc. for WRC Central Forest, L.P. and Wrightwood Capital.

54151.4    Exhibit E

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SCHEDULE 1
Borrower Ownership Structure
See attached organizational chart, incorporated by this reference, with respect
to the ownership structure of Borrower.

BT FOREST PARK REALTY PARTNERS, LP
ORGANIZATIONAL STRUCTURE CHART

Class A Limited Partners:
Richard F. Toussaint, MD
Wade N. Barker, MD
Brian Sherman

Class B Limited Partners:
Multiple Investors
(See Partnership Records)
Limited Partners
BT Forest Park Realty Partners, LP, a Texas limited partnership
Richard F. Toussaint, MD    49.0%
Wade N. Barker, MD    49.0%
Brian Sherman    2.0%
General Partner
Managers:
Richard F. Toussaint, MD
Wade N. Barker, MD
GP BT Healthcare Development Partners, LLC, a Texas limited liability company

54151.4    Schedule 1-1

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FOREST PARK REALTY PARTNERS III, LP
ORGANIZATIONAL STRUCTURE CHART

General Partner
Neal Richards Group Forest Park Development, LLC, a Texas limited liability
company
Managers:
Richard F. Toussaint, MD
Wade N. Barker, MD
Derrick N. Evers
Toussaint Family Partnership, Ltd.    30.0%
Jefe Plover Interests, Ltd.    30.0%
Neal Richards Group, LLC    12.5%
Derrick N. Evers    5.0%
Vibrant Healthcare Management, LLC    10.0%
Ross Neville    5.0%
SRP Medical Investments, L.P.    7.5%
Limited Partners
Limited Partners:
Multiple Investors
(See Partnership Records)
Forest Park Realty Partners III, LP, a Texas limited partnership

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SCHEDULE 2
Facility Information

Facility Name
Facility Address
Primary Intended Use
Forest Park Medical Center – Dallas
12090, 11990 and 11960 North Central Expressway, Dallas, Texas
Acute Care Hospital

54151.4    Schedule 2-1

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SCHEDULE 3
Material Contracts
1.
Purchase And Sale Agreement And Joint Escrow Instructions dated as of February
20, 2013, by and between Phase III Borrower, as “Seller”, and HTA-FP Tower, LLC,
a Delaware limited liability company, as “Buyer” (“HTA”), relating to the sale
of “Forest Park Tower” medical office building located at 11970 N. Central
Expressway, Dallas, Texas 75243 (the “Tower MOB”).

2.
Master Lease Agreement dated as of March II, 2013 (the “Master Lease”), by and
between HTA, as “Landlord”, and Phase III Borrower, as “Tenant”, relating to the
master lease by Phase III Borrower of approximately 32,425 rentable square feet
within the Tower MOB.

3.
Post-Closing Escrow Agreement (Master Lease) dated as of March 11, 2013, by and
among Phase III Borrower, as “Seller”, HTA, as “Buyer”, and Bridge Title
Company, as “Escrow Agent”, relating to the deposit by Phase III Borrower of
funds into escrow to support Phase III Borrower’s obligations under the Master
Lease.

4.
Post-Closing Escrow Agreement (Daugherty’s Lease) dated as of March 11,2013, by
and among Phase III Borrower, as “Seller”, HTA, as “Buyer”, and Bridge Title
Company, as “Escrow Agent”, relating to the deposit by Phase III Borrower of
funds into escrow to provide credit support for the obligations of Daugherty’s
Pharmacy Forest Park Dallas, LLC under a lease with HTA in the Tower MOB.

5.
Post-Closing Escrow Agreement (NRG Master Lease) dated as of March 11, 2013, by
and among Phase III Borrower, Neal Richards Group, LLC (“NRG”), and Bridge Title
Company, as “Escrow Agent", relating to the deposit by Phase III Borrower of
funds into escrow to Support NRG’s obligations under a master lease of
approximately 4,615 rentable square feet within the Tower MOB.

54151.4    Schedule 3-1

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SCHEDULE 4
Disclosed Litigation
Declaratory Judgment Action filed by Forest Park Phase II, LP; BT Forest Park
Realty Partners, LP; Forest Park Realty Partners III, LP; Neal Richards Group,
LLC; and SRP Medical, LLC against Hammond Hanlon Camp, LLC and Morgan Keegan &
Company, Inc. (Cause No. 13-01282 in the 68th Judicial District Court, Dallas
County, Texas), relating to a dispute regarding claims by Hammond Hanlon Camp,
LLC and Morgan Keegan & Company, Inc. for commissions from the sale of the
Forest Park Pavilion Medical Office Building and the Forest Park Tower Medical
Office Building on the Forest Park Medical Center - Dallas campus. The parties
are in settlement negotiations.

54151.4    Schedule 4-1