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Exhibit 10.2
 
PROMISSORY NOTE
 
 
$14,000,000.00
January 22, 2009

 
THIS PROMISSORY NOTE (this "Note"), is made as of January 22, 2009 by CARUTH
HAVEN, L.P.,  a Delaware limited partnership ("Borrower"), having an address at
c/o Cornerstone Growth & Income REIT, Inc., 1920 Main Street, Suite 400, Irvine,
CA 92614, to and in favor of CORNERSTONE OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, its successors and assigns ("Lender"), having an address at
1920 Main Street, Suite 400, Irvine, CA 92614.
 
NOW, THEREFORE, FOR VALUE RECEIVED, Borrower, unconditionally promises to pay to
the order of Lender, without any counterclaim, setoff or deduction whatsoever,
on the Maturity Date (as hereinafter defined), at the office of Lender, or at
such other place as Lender may designate to Borrower in writing from time to
time, the principal sum of FOURTEEN MILLION AND NO/100 DOLLARS ($14,000,000.00),
together with interest on so much thereof as is from time to time outstanding
and unpaid, from the date of the advance of the principal evidenced hereby, at
the Note Rate (as such term is hereinafter defined), compounded annually, in
lawful money of the United States of America, which shall at the time of payment
be legal tender in payment of all debts and dues, public and private.

TERMS AND CONDITIONS
 
1.01           Payment of Principal and Interest.  Interest shall be computed
hereunder based on a 360-day year and paid for the actual number of days elapsed
for any whole or partial month in which interest is being calculated.  In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included (regardless of the time of day
such advance is made), and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business.  Payments in federal
funds immediately available in the place designated for payment received by
Lender prior to 2:00 p.m. local time on a business day at the place designated
for payment shall be credited prior to close of business, while other payments
may, at the option of Lender, not be credited until immediately available to
Lender in federal funds at the place designated for payment prior to 2:00 p.m.
local time at said place of payment on a day on which Lender (or if Lender
designates another entity to receive payment on behalf of Lender, such entity)
is open for business.
 
Payment of interest only shall be payable in monthly installments, beginning on
March 1, 2009, and continuing on the first day of each and every month (each a
"Payment Date") thereafter through and including January 22, 2010 (the "Maturity
Date"), at which time the entire outstanding principal balance hereof, together
with all accrued but unpaid interest thereon, shall be due and payable in
full.  Each such monthly installment shall be applied first to the payment of
accrued interest and then to reduction of principal.  If the advance of the
principal amount evidenced by this Note is made on a date other than the first
day of a calendar month, then Borrower shall pay to Lender contemporaneously
with the execution hereof interest at the Note Rate (a) for a period from the
date of such advance through and including the tenth day of the calendar month
in which this Note is funded, if the advance of the principal amount evidenced
by this Note is made prior to the first day of a calendar month, or (b) for a
period from the date

 

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of such advance through and including the first day of the first calendar month
following the month in which this Note is funded, if the advance of the
principal amount evidenced by this Note is made after the first day of a
calendar month.  For purposes of making payments hereunder, but not for purposes
of calculating interest accrual periods, if the day on which any payment is due
is not a Business Day (as defined in the Security Instrument), then amounts due
on such date shall be due on the immediately preceding Business Day.
 
As used herein, the following terms shall have the meanings set out below:

(a)           “Note Rate” shall mean and refer to the rate per annum equal to
the Prime Rate plus Three (3%) percent.  As of the date hereof, the Note Rate is
6.25%.  The Note Rate shall be set on the first day each calendar month by
Lender and shall be applicable to interest accruing from the Payment Date
occurring in such month through the next Payment Date; if the determination date
of such Note Rate is not a Business Day, the Note Rate for such period shall be
determined as of the immediately preceding Business Day.

(b)           ”Prime Rate” shall mean and refer to a rate of interest per annum
equal to the prime commercial rate published from time to time in The Wall
Street Journal and if The Wall Street Journal shall no longer publish a prime
rate or shall no longer be in existence, the prime rate as determined by Lender
based on the prime rate announced by a major money center bank selected by
Lender.  Each determination of the Prime Rate by Lender shall be conclusive,
absent manifest error.  It is understood and agreed that such Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged by such bank to any customer.  Lender shall not be obligated to give
notice of any change in the Prime Rate.

(c)           “Required Debt Service Coverage Ratio” shall mean a debt service
coverage ratio, as determined by Lender, of not less than 1.60 to 1.00.

1.02          Prepayment.  This Note may be prepaid in whole but not in part
(except as otherwise specifically provided herein) on any Payment Date, provided
(i) written notice of such prepayment is received by Lender not more than thirty
(30) days and not less than ten (10) days prior to the date of such prepayment;
any such prepayment shall be accompanied by all interest accrued hereunder and
all other sums due hereunder or under the other Loan Documents (as hereinafter
defined).

Partial prepayments of this Note shall not be permitted, except partial
prepayments resulting from Lender applying insurance or condemnation proceeds to
reduce the outstanding principal balance of this Note as provided in the
Security Instrument.  No notice of prepayment shall be required under the
circumstance specified in the preceding sentence.  No principal amount repaid
may be re-borrowed.  All such proceeds shall be payable to Lender unless
prohibited by law, regulation, operation of such policy or the specific terms of
the Loan Documents.  Partial payments of principal shall be applied to the
unpaid principal balance evidenced hereby on the next succeeding Payment Date
following Lender's determination to apply insurance or condemnation proceeds to
the partial prepayment of the outstanding principal balance of this Note.

1.03          Security.  The indebtedness evidenced by this Note and the
obligations created hereby are secured by, among other things, (a) that certain
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing (the "Security Instrument"), dated of even date herewith, made by
Borrower in favor of Lender, encumbering certain property located in Dallas
County, Texas, and (b) an Assignment of Leases and Rents, dated of even date
herewith, made by Borrower in favor of Lender (the "Assignment").  The Security
Instrument, the Assignment, together with this Note, any indemnity and

 
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guaranty agreement, any hazardous substances indemnity agreement, and such other
agreements, documents and instruments, together with any and all renewals,
modifications, amendments, restatements, consolidations, substitutions,
replacements, and extensions and modifications thereof, are herein referred to
collectively as the "Loan Documents".  All of the terms and provisions of the
Loan Documents are incorporated herein by reference.  Some of the Loan Documents
are to be filed for record on or about the date hereof in the appropriate public
records.
 
1.04          Default.  It is hereby expressly agreed that should any default
occur in the payment of principal or interest as stipulated above and such
payment is not made when due, or should any other default occur under any of the
Loan Documents which is not cured within any applicable grace or cure period
therein, including without limitation, any sale, transfer, conveyance or other
violation of the terms of Section 1.13 of the Security Instrument, then an
“Event of Default” shall exist hereunder, and in such event the indebtedness
evidenced hereby, including all sums advanced or accrued hereunder or under any
other Loan Document, and all unpaid interest accrued thereon, shall, at the
option of Lender and without notice to Borrower, at once become due and payable
and may be collected forthwith, whether or not there has been a prior demand for
payment and regardless of the stipulated date of maturity.
 
In the event that any payment is not received by Lender on the date when due,
then in addition to any default interest payments due hereunder, Borrower shall
also pay to Lender a late charge in an amount equal to five percent (5.0%) of
the amount of such overdue payment in order to defray Lender's expenses in
addressing and processing the delinquent payment and compensate Lender from the
loss of the use of such payment.  Such amount shall be secured by the Loan
Documents, but shall not result in any extension of the Maturity Date nor a
waiver of any other right or remedy available to Lender in connection with the
Loan Documents.
 
So long as any default exists hereunder, regardless of whether or not there has
been an acceleration of the indebtedness evidenced hereby, and at all times
after maturity of the indebtedness evidenced hereby (whether by acceleration or
otherwise), interest shall accrue on the outstanding principal balance of this
Note at a rate per annum equal to five percent (5.0%) plus the interest rate
which would be in effect hereunder absent such default or maturity, or if such
increased rate of interest may not be collected under applicable law, then at
the maximum rate of interest, if any, which may be collected from Borrower under
applicable law (the "Default Interest Rate"), and such default interest shall be
immediately due and payable.  Such amounts shall be secured by the Loan
Documents, but shall not result in any extension of the Maturity Date nor a
waiver of any other right or remedy available to Lender in connection with the
Loan Documents.
 
Borrower acknowledges that it would be extremely difficult or impracticable to
determine Lender's actual damages resulting from any late payment or default,
and such late charges and default interest are reasonable estimates of those
damages and do not constitute a penalty.  The remedies of Lender in this Note or
in the other Loan Documents, or at law or in equity, shall be cumulative and
concurrent, and may be pursued singly, successively or together in Lender's
discretion.  Time is of the essence with respect to all matters concerning or
relating to this Note.  Borrower agrees to pay on demand all expenses and costs
of enforcement, administration and collection incurred or paid by Lender
including, but not limited to, reasonable attorneys’ fees and disbursements of
Lender, whether or not with respect to retained firms, the reimbursement for the
expenses of in-house staff, or otherwise and whether or not any legal proceeding
is commenced hereunder.  The foregoing amounts shall be paid together with
interest thereon at the Default Interest Rate from the date paid or incurred by
Lender until such expenses are paid by the Borrower.
 
1.05          Exculpation.  Notwithstanding anything in the Loan Documents to
the contrary, but subject to the qualifications set forth below, Lender agrees
that (i) Borrower shall be liable

 
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upon the indebtedness evidenced hereby and for the other obligations arising
under the Loan Documents to the full extent (but only to the extent) of the
security therefore, the same being all properties (whether real or personal),
rights, estates and interests now or at any time hereafter securing the payment
of this Note and/or the other obligations of Borrower under the Loan Documents
(collectively, the "Property"), (ii) if default occurs in the timely and proper
payment of all or any part of such indebtedness evidenced hereby or in the
timely and proper performance of the other obligations of Borrower under the
Loan Documents, any judicial proceedings brought by Lender against Borrower
shall be limited to the preservation, enforcement and foreclosure, or any
thereof, of the liens, security titles, estates, assignments, rights and
security interests now or at any time hereafter securing the payment of this
Note and/or the other obligations of Borrower under the Loan Documents, and
confirmation of any sale under power of sale, and no attachment, execution or
other writ of process shall be sought, issued or levied upon any assets,
properties or funds of Borrower other than the Property except with respect to
the liabilities described below in this section and in Section 1.06 below, and
(iii) in the event of a foreclosure of such liens, security titles, estates,
assignments, rights or security interests securing the payment of this Note
and/or the other obligations of Borrower under the Loan Documents, whether by
judicial proceedings or exercise of power of sale, no judgment for any
deficiency upon the indebtedness evidenced hereby shall be sought or obtained by
Lender against Borrower, except with respect to the liability described below in
this section; provided, however, that, notwithstanding the foregoing provisions
of this section, Borrower shall be fully and personally liable and subject to
legal action (a) for proceeds paid under any insurance policies (or paid as a
result of any other claim or cause of action against any person or entity) by
reason of damage, loss or destruction to all or any portion of the Property, to
the full extent of such proceeds not previously delivered to Lender, but which,
under the terms of the Loan Documents, should have been delivered to Lender, (b)
for proceeds or awards resulting from the condemnation or other taking in lieu
of condemnation of all or any portion of the Property, or any of them, to the
full extent of such proceeds or awards not previously delivered to Lender, but
which, under the terms of the Loan Documents, should have been delivered to
Lender, (c) for all tenant security deposits or other refundable deposits paid
to or held by Borrower or any other person or entity in connection with leases
of all or any portion of the Property which are not applied in accordance with
the terms of the applicable lease or other agreement, (d) for rent and other
payments received from tenants under leases of all or any portion of the
Property paid more than one (1) month in advance, (e) for rents, issues, profits
and revenues of all or any portion of the Property received or applicable to a
period after any notice of default from Lender hereunder or under the Loan
Documents in the event of any default hereunder or thereunder which are not
either applied to the ordinary and necessary expenses of owning and operating
the Property or paid to Lender, (f) for damage to the Property as a result of
intentional misconduct or gross negligence of, or material waste to or of the
Property by, Borrower or any of its principals, officers or general partners or
members, or any agent or employee of any such persons, or any removal of the
Property in violation of the terms of the Loan Documents, to the full extent of
the losses or damages actually incurred by Lender on account of such damage or
removal, (g) for Borrower's failure to pay any valid taxes, assessments,
mechanic's liens, materialmen's liens or other claims which could create liens
on any portion of the Property, accruing prior to the date Lender acquires
actual possession and control of the Property, which would be superior to the
lien or security title of the Security Instrument or the other Loan Documents,
to the full extent of the amount claimed by any such lien claimant, (h) for all
obligations and indemnities of Borrower

 
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under the Loan Documents relating to hazardous or toxic substances or compliance
with environmental laws and regulations to the full extent of any losses or
damages (including, without limitation, those resulting from diminution in value
of the Property or any portion thereof) incurred by Lender as a result of the
existence of such hazardous or toxic substances or failure to comply with
environmental laws or regulations, (i) for fraud or material misrepresentation
in connection with or related to the Loan, including without limitation, the
origination thereof and/or performance thereof, by Borrower or any of its
principals, officers, directors, general partners or members, any guarantor, any
indemnitor or any agent, employee or other person authorized or apparently
authorized to make statements or representations on behalf of Borrower, any
principal, officer, director, general partner, beneficial owner or member of
Borrower, or any guarantor or any indemnitor, to the full extent of any losses,
damages and expenses of Lender on account thereof (including, without
limitation, attorneys’ fees and expenses), (j) for any amounts paid under leases
containing early lease termination and/or surrender options or otherwise paid by
tenants in consideration of an early termination and/or surrender of any lease
and not delivered to Lender in accordance with the Security Instrument, (k) for
all damage, liability, loss, cost and expense (including, without limitation,
attorney’s fees) incurred by Lender as a result of the termination or revocation
of any governmental license or authorization necessary to permit the operation
of the Property as an assisted living facility, (l) any amounts required to be
paid for Pre-Existing Employee Expense, as such term is defined in the
Collateral Assignment (as defined in the Cash Management Agreement), and (m) the
costs incurred in recovering such amounts, including, without limitation,
attorneys' fees and expenses.  References herein to particular sections of the
Loan Documents shall be deemed references to such sections as affected by other
provisions of the Loan Documents relating thereto.  Nothing contained in this
section shall (i) be deemed to be a waiver, release or impairment of the
indebtedness evidenced by this Note or the other obligations of Borrower under
the Loan Documents or the lien of the Loan Documents upon the Property, or (ii)
preclude Lender from foreclosing the Loan Documents in case of any default
hereunder or under any of the Loan Documents or from enforcing any of the other
rights of Lender except as stated in this section, or (iii) limit or impair in
any way whatsoever the Indemnity and Guaranty Agreement or the Hazardous
Substances Indemnity Agreement, each of even date herewith, executed and
delivered in connection with the indebtedness evidenced by this Note or any
other indemnity or guaranty executed and delivered in connection with the
indebtedness evidenced by this Note, or release, relieve, reduce, waive or
impair in any way whatsoever, any obligation of any party to such Indemnity and
Guaranty Agreement or Hazardous Substances Indemnity Agreement or any other such
indemnity or guaranty or agreement relating hereto.  Borrower agrees that Lender
shall not be deemed to have waived any right which Lender may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the debt secured by the Security
Instrument or to require that all collateral shall continue to secure all of the
debt owing to Lender in accordance with the Loan Documents.
 
1.06          Exceptions to Exculpation.  Notwithstanding anything to the
contrary in this Note or any of the Loan Documents, the obligations of Borrower
under this Note and the other Loan Documents shall be fully recourse to Borrower
in the event that:  (i) the first full monthly payment of principal and interest
under this Note is not paid when due; (ii) Borrower fails to maintain its status
as a single purpose entity, as required by, and in accordance with the terms and
provisions of, the Security Instrument; (iii) Borrower fails to obtain Lender's
prior written consent to any subordinate financing (including, without
limitation, any mezzanine financing) or other voluntary lien encumbering the
Property; (iv) Borrower fails to obtain

 
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Lender's prior written consent to any assignment, transfer, or conveyance of the
Property or any interest therein as required by the Security Instrument; (v) a
receiver, liquidator or trustee of Borrower or of any guarantor or indemnitor
shall be appointed or if Borrower or any guarantor or indemnitor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by, consented to, or acquiesced in by,
Borrower or any guarantor or indemnitor or if any proceeding for the dissolution
or liquidation of Borrower or of any guarantor shall be instituted by Borrower
or any guarantor; (vi) Borrower or any guarantor or indemnitor shall have
colluded with other creditors to cause an involuntary bankruptcy filing with
respect to Borrower or any guarantor or indemnitor; or (vii) Borrower defaults
hereunder in any way and Borrower or any guarantor or indemnitor, either before
or after the occurrence of any such default, contests or in any way interferes
with, directly or indirectly, any foreclosure action, Uniform Commercial Code
sale and/or deed in lieu of foreclosure transaction commenced by Lender or with
any other enforcement of Lender's rights, powers or remedies under any of the
Loan Documents or under any document evidencing, securing or otherwise relating
to any of the Collateral (as such term is defined in the Security Instrument) or
any of the other Property (whether by making any motion, bringing any
counterclaim, claiming any defense, seeking any injunction or other restraint,
commencing any action, seeking to consolidate any such foreclosure or other
enforcement with any other action, or otherwise).
 
1.07          Delegation to Servicer.  At the option of Lender, the Loan may be
serviced by a servicer or a trustee (together with their respective successors
and assigns, the "Servicer") selected by Lender and Lender may delegate all or
any portion of its rights and responsibilities under this Note and the other
Loan Documents to the Servicer pursuant to a servicing agreement between Lender
and Servicer.
 
 
1.08
GENERAL CONDITIONS

 
(a)            No Waiver; Amendment.  No failure to accelerate the debt
evidenced hereby by reason of default hereunder, acceptance of a partial or past
due payment, or indulgences granted from time to time shall be construed (i) as
a novation of this Note or as a reinstatement of the indebtedness evidenced
hereby or as a waiver of such right of acceleration or of the right of Lender
thereafter to insist upon strict compliance with the terms of this Note, or (ii)
to prevent the exercise of such right of acceleration or any other right granted
hereunder or by any applicable laws; and Borrower hereby 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.  No extension of the time for the payment of this Note or
any installment due hereunder, made by agreement with any person or entity now
or hereafter liable for the payment of this Note shall operate to release,
discharge, modify, change or affect the original liability of Borrower under
this Note, either in whole or in part, unless Lender agrees otherwise in
writing.  This Note may not be changed orally, but only by a definitive written
agreement signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.  Moreover, Borrower agrees that it shall
not rely on any other memoranda, written analysis, proposal or conversation or
action/inaction on the possibility that the Lender might ultimately agree to a
waiver of any term or provision of this Note or any other Loan Document.  As
negotiations may be lengthy and complex, and may not produce a definitive
written agreement, the Borrower should not forego any opportunities to repay the
Note in reliance on any such negotiations or any proposed written agreement that
is not fully-executed.
 
 
(b)
Intentionally reserved.

 
(c)            Waivers.  Presentment for payment, demand, protest and notice of
demand, protest and nonpayment and all other notices are hereby waived by
Borrower.  Borrower hereby further waives and

 
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renounces, to the fullest extent permitted by law, all rights to the benefits of
any statute of limitations and any moratorium, reinstatement, marshalling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided by the Constitution and laws of the United
States of America and of each state thereof, both as to itself and in and to all
of its property, real and personal, against the enforcement and collection of
the obligations evidenced by this Note or the other Loan Documents.
 
(d)           Limit of Validity.  Notwithstanding anything to the contrary
contained in this Note or the Security Instrument, neither the Note Rate nor the
Default Interest Rate shall at any time exceed the Maximum Rate.  The term
“Maximum Rate,” as used herein, shall mean, on any day, the highest non-usurious
rate of interest (if any) permitted by applicable law on such day.  For purposes
of Chapter 303 of the Texas Finance Code, as it may from time to time be
amended, the Maximum Rate shall be the “weekly ceiling” as defined in Section
303.002 of said Code and as computed in accordance with Section 303.003 of said
Code, from time to time in effect; provided, however, that to the extent
permitted by applicable law, Lender reserves the right to change, from time to
time by further notice and disclosure to Borrower, the ceiling on which the
Maximum Rate is based under Chapter 303 of said Code; and, provided further,
that the “highest non-usurious rate of interest permitted by applicable law” for
purposes of this Note or the Security Instrument shall not be limited to the
applicable rate ceiling under Chapter 303 of said Code if federal laws or other
state laws now or hereafter in effect and applicable to this Note or the
Security Instrument (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest. In no event shall the Loan be
considered a revolving credit account as defined in Chapter 346 of the Texas
Finance Code, as may be hereafter amended or re-codified.
 
It is the intention of the parties hereto to comply with the usury laws of the
State of Texas and the United States of America.  The parties hereto do not
intend to contract for, charge or receive any interest or other charge which is
usurious, and by execution of this Note or the Security Instrument, Borrower
agrees that Lender has no such intent.  This Note, the Security Instrument, the
other Loan Documents and all other agreements between Borrower and Lender or any
other holder hereof, which are now existing or hereafter arising, whether
written or oral, are hereby expressly limited so that in no event whatsoever,
whether by reason of acceleration of maturity hereof, or otherwise, shall the
amount paid, or agreed to be paid, to Lender or any other holder hereof for the
use, forbearance or detention of the money to be due hereunder or otherwise, or
for the payment or performance of any covenant or obligation contained herein or
in any other document evidencing, securing or pertaining to the Debt, exceed the
Maximum Rate.  If from any circumstance whatsoever fulfillment of any provisions
hereof or other document, at the time performance of such provisions shall be
due, shall involve transcending the valid limits prescribed by law, then ipso
facto, the obligation to be fulfilled shall be reduced to the Maximum Rate, and
if from any such circumstance Lender or any other holder shall ever receive as
interest or otherwise an amount which will exceed the Maximum Rate, such amount
which would be excessive interest shall be applied to the reduction of the
principal amount owing hereunder (without prepayment premium or penalty) or on
account of any other principal indebtedness of Borrower to the holder and not to
the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal hereof and such other indebtedness, such excess shall be
refunded to Borrower.  All sums paid and agreed to be paid to Lender or any
other holder for use, forbearance or detention of the indebtedness of Borrower
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the period until payment in full on the Note
(or any renewals, extensions and rearrangement thereof) so that the actual rate
of interest on account of the Debt is uniform throughout the term of this Note
(and all renewals, extensions and rearrangements hereof) and does not exceed the
Maximum Rate.  The terms and provisions of this Section 1.09(d) shall control
and supersede any other provision of this Note or the other Loan Documents.

 
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(e)            Use of Funds.  Borrower hereby warrants, represents and covenants
that no funds disbursed hereunder shall be used for personal, family or
household purposes and that amounts paid to Borrower hereunder shall be
disbursed in accordance with the related sources and uses statement prepared by
Lender and executed by Borrower on the date hereof and that no other funds are
required to be disbursed hereunder.  Borrower hereby acknowledges and confirms
that its execution of such sources and uses statement constitutes its
irrevocable and unconditional consent and authorization to the disbursement and
use of the loan proceeds as described therein.

(f)            Unconditional Payment.  Borrower is and shall be obligated to pay
principal, interest and any and all other amounts which become payable hereunder
or under the other Loan Documents absolutely and unconditionally and without any
abatement, postponement, diminution or deduction and without any reduction for
counterclaim or setoff.  In the event that at any time any payment received by
Lender hereunder shall be deemed by a court of competent jurisdiction to have
been a voidable preference or fraudulent conveyance under any bankruptcy,
insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to
Borrower and shall not be discharged or satisfied with any prior payment thereof
or cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such payment
shall be immediately due and payable upon demand.

 
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(g)           Further Assurances.  Borrower shall execute and acknowledge (or
cause to be executed and acknowledged) and deliver to Lender all documents, and
take all actions, reasonably required by Lender from time to time to confirm the
rights created under this Note and the other Loan Documents, to protect and
further the validity, priority and enforceability of this Note and the other
Loan Documents, to subject to the Loan Documents any property of Borrower
intended by the terms of any one or more of the Loan Documents to be encumbered
by the Loan Documents, to correct any error in any of the Loan Documents or any
error in the disbursement of any funds pursuant to the Loan Documents, or
otherwise carry out the purposes of the Loan Documents and the transactions
contemplated thereunder; provided, however, that no such further actions,
assurances and confirmations shall alter the exculpation provisions of this Note
(or the other Loan Documents) or increase Borrower's obligations under this
Note.
 
(h)           Submission to Jurisdiction; Waiver of Jury Trial.
 
BORROWER, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO
PERSONAL JURISDICTION IN THE STATE WHERE THE PROPERTY IS LOCATED OVER ANY SUIT,
ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS NOTE, (B)
AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN EITHER THE CITY OR THE COUNTY
WHERE THE PROPERTY IS LOCATED, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS,
AND (D) AGREES THAT BORROWER WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN
ANY OTHER FORUM AND BORROWER FURTHER CONSENTS AND AGREES TO SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING
BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO BORROWER AT THE
ADDRESS FOR NOTICES DESCRIBED ON THE FIRST PAGE HEREOF, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED
IN ANY OTHER MANNER PERMITTED BY LAW).
 
BORROWER, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES,
RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS NOTE OR
ANY CONDUCT, ACT OR OMISSION OF LENDER, OR ANY OF THEIR DIRECTORS, OFFICERS,
PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH LENDER OR BORROWER BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THIS NOTE AND/OR THE LOAN EVIDENCED HEREBY, IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
 
(i)             Miscellaneous.  This Note shall be interpreted, construed and
enforced according to the laws of the State in which the Property is located and
the applicable laws of the United States of America.  The terms and provisions
hereof shall be binding upon and inure to the benefit of Borrower and Lender and
their respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law.  To the extent any notice is provided hereunder or under
any other Loan Document and Borrower knows or has reason to believe that any of
the foregoing entities are acting as or on behalf of Lender hereunder, in
addition to Lender, Borrower shall provide such notice to such entity. As used
herein, the terms "Borrower" and "Lender" shall be

 
9

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deemed to include their respective successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law.  Subject to
the limitations set forth in Section 1.05 above, if Borrower consists of more
than one person or entity, each shall be jointly and severally liable to perform
the obligations of Borrower under this Note.  All personal pronouns used herein,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural and vice versa.  Titles of
articles and sections are for convenience only and in no way define, limit,
amplify or describe the scope or intent of any provisions hereof.  Capitalized
terms used in this Note and not otherwise defined herein shall have the meaning
ascribed to them in the Security Instrument or, if not therein defined, as
defined in the other Loan Documents.  Time is of the essence with respect to all
provisions of this Note, the Security Instrument and the other Loan
Documents.  This Note and the other Loan Documents contain the entire agreements
between the parties hereto relating to the subject matter hereof and thereof and
all prior agreements relative hereto and thereto which are not contained herein
or therein are terminated.
 
[No Further Text on this Page; Signature Page Follows]

 
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IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has duly
executed this Note as of the day and year first written above.
 

 
Caruth Haven, L.P., a Delaware limited partnership
     
By:   Caruth Haven GP, LLC, a Delaware limited liability company, its sole
general partner
     
By:  CGI Healthcare Operating Partnership, L.P., its sole member
     
By:  Cornerstone Growth & Income Operating Partnership, L.P., its sole general
partner
     
By:  Cornerstone Growth & Income REIT, Inc., a Maryland corporation, its sole
general partner
             
    By:      ____________________
 
    Name: ____________________
 
    Title:   ____________________

 

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THE STATE OF ______________
§

§
COUNTY OF ________________
§

This instrument was acknowledged before me on January _____, 2009, by
_________________________________________, the ____________________________ of
Cornerstone Growth & Income REIT, Inc., a Maryland corporation, which is the
sole general partner of Cornerstone Growth & Income Operating Partnership, L.P.,
a Delaware limited partnership, which is the sole general partner of CGI
Healthcare Operating Partnership, L.P. a Delaware limited partnership, which is
the sole member of Caruth Haven GP, LLC, a Delaware limited liability company,
which is the sole general partner of Caruth Haven L.P., a Delaware limited
partnership, on behalf of said limited partnership.
 

  ___________________________________  
Notary Public, State of _________________
     
My Commission Expires:
         
Printed Name of Notary

 
 

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