**Exhibit 10.9**

 

**LOAN AGREEMENT**

 

**Between**

 

**BROTMAN MEDICAL CENTER INC.,**

**a California corporation,debtor-in-possession**

 

**as**

 

**“Borrower”**

 

**and**

 

**JHA EAST 7 LLC,**

**a Delaware limited liabilitycompany**

 

**as**

 

**“Lender”**

 

----

 

**TABLE OF CONTENTS**

 
| ** ** | ** **                                             | **Page** |
|------------|--------------------------------------------------------|----------|
|       |                                                   |     |
| 1.1        | Principal                                              | 7        |
|       |                                                   |     |
| 1.2        | Interest                                               | 7        |
|       |                                                   |     |
| 1.3        | Maturity                                               | 7        |
|       |                                                   |     |
| 1.4        | Current Bankruptcy                                     | 7        |
|       |                                                   |     |
| II.        | CLOSING CONDITIONS                                     | 8        |
|       |                                                   |     |
| 2.1        | Conditions of Lender’s  Obligation to Close       | 8        |
|       |                                                   |     |
| 2.2        | Conditions of Borrower’s Obligation to Close      | 9        |
|       |                                                   |     |
| III.       | DISBURSEMENT OF LOAN AMOUNT                            | 10       |
|       |                                                   |     |
| 3.1        | General                                                | 10       |
|       |                                                   |     |
| 3.2        | Inspections                                            | 10       |
|       |                                                   |     |
| 3.3        | Lender Responsibility                                  | 10       |
|       |                                                   |     |
| 3.4        | Direct Application of  Proceeds                        | 10       |
|       |                                                   |     |
| 3.5        | Insufficient Documentation                             | 11       |
|       |                                                   |     |
| IV.        | REPRESENTATIONS AND WARRANTIES OF LENDER AND  BORROWER | 11       |
|       |                                                   |     |
| 4.1        | Representations and  Warranties of Borrower            | 11       |
|       |                                                   |     |
| 4.2        | Representations and  Warranties of Lender              | 13       |
|       |                                                   |     |
| V.         | COVENANTS OF BORROWER                                  | 14       |
|       |                                                   |     |
| 5.1        | Paying Costs of Loan                                   | 14       |
|       |                                                   |     |
| 5.2        | Using Loan Proceeds                                    | 14       |
|       |                                                   |     |
| 5.3        | Keeping of Records                                     | 14       |
|       |                                                   |     |
| 5.4        | Providing Financial  Information                       | 14       |
|       |                                                   |     |
| 5.5        | Providing Operating  Budgets and Operating Statements  | 15       |
|            |                                                        |          |  |

 

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|   |                                                                               | **Page** |
|--------|------------------------------------------------------------------------------------|----------|
|   |                                                                               |     |
| 5.6    | Complying with the Loan  Documents and Other Agreements                            | 15       |
|   |                                                                               |     |
| 5.7    | Compliance with Laws                                                               | 15       |
|   |                                                                               |     |
| 5.8    | Ownership of Personal  Property                                                    | 15       |
|   |                                                                               |     |
| 5.9    | Representations and  Warranties                                                    | 15       |
|   |                                                                               |     |
| 5.10   | Trade Names                                                                        | 15       |
|   |                                                                               |     |
| 5.11   | No Distributions                                                                   | 16       |
|   |                                                                               |     |
| 5.12   | Future Development                                                                 | 16       |
|   |                                                                               |     |
| 5.13   | Further Assurances                                                                 | 16       |
|   |                                                                               |     |
| 5.14   | Notice of Litigation, Etc                                                          | 16       |
|   |                                                                               |     |
| 5.15   | Signage                                                                            | 16       |
|   |                                                                               |     |
| 5.16   | Maintenance of Existence                                                           | 17       |
|   |                                                                               |     |
| 5.17   | Impound Account                                                                    | 17       |
|   |                                                                               |     |
| 5.18   | Reserve Account                                                                    | 17       |
|   |                                                                               |     |
| 5.19   | Existence; Change of Name;  Location as a Registered Organization                  | 17       |
|   |                                                                               |     |
| 5.20   | Property Management                                                                | 18       |
|   |                                                                               |     |
| 5.21   | Prohibited Transactions                                                            | 18       |
|   |                                                                               |     |
| 5.22   | Compliance with  Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws | 18       |
|   |                                                                               |     |
| 5.22   | Compliance with  Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws | 18       |
|   |                                                                               |     |
| VI.    | DEFAULTS                                                                           | 19       |
|   |                                                                               |     |
| 6.1    | Events of Default                                                                  | 19       |
|   |                                                                               |     |
| 0.6.2  | Rights and Remedies                                                                | 20       |
|   |                                                                               |     |
| VII.   | SINGLE PURPOSE ENTITY REQUIREMENTS                                                 | 21       |
|   |                                                                               |     |
| VIII.  | MISCELLANEOUS                                                                      | 21       |
|        |                                                                                    |          |  |

 

ii

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|   |                                                     | **Page** |
|--------|----------------------------------------------------------|----------|
|   |                                                     |     |
| 8.1    | Binding Effect; Waivers;  Cumulative Rights and Remedies | 21       |
|   |                                                     |     |
| 8.2    | Survival                                                 | 21       |
|   |                                                     |     |
| 8.3    | Governing Law; Waiver of  Jury Trial                     | 21       |
|   |                                                     |     |
| 8.4    | Counterparts                                             | 21       |
|   |                                                     |     |
| 8.5    | Notices                                                  | 22       |
|   |                                                     |     |
| 8.6    | Costs and Expenses;  Indemnification; Reimbursement      | 22       |
|   |                                                     |     |
| 8.7    | No Third Party Reliance                                  | 22       |
|   |                                                     |     |
| 8.8    | Sale of Loan or  Participations                          | 22       |
|   |                                                     |     |
| 8.9    | Arrangement by Brokers                                   | 23       |
|   |                                                     |     |
| 8.10   | Recourse                                                 | 23       |
|   |                                                     |     |
| 8.11   | Time of the Essence                                      | 24       |
|   |                                                     |     |
| 8.12   | Entire Agreement; No Oral  Modifications                 | 24       |
|   |                                                     |     |
| 8.13   | Captions                                                 | 24       |
|   |                                                     |     |
| 8.14   | Joint and Several  Liability                             | 24       |
|   |                                                     |     |
| 8.15   | Borrower-Lender  Relationship                            | 24       |
|   |                                                     |     |
| 8.16   | Benefit of Lender                                        | 24       |
|   |                                                     |     |
| 8.17   | Single Purpose Entity                                    | 24       |
|   |                                                     |     |
| 8.18   | Pledge of Accounts                                       | 24       |
|   |                                                     |     |
| 8.19   | Prohibition Against  Transfers                           | 24       |
|   |                                                     |     |
| 8.20   | Lender Approval                                          | 25       |
|   |                                                     |     |
| 8.21   | Personal Property Financings                             | 25       |

 

**LIST OF EXHIBITS ANDEXHIBITS**

** **
| EXHIBIT A       | — |   | Legal Description of Land                   |
|-----------------|--------|--------|---------------------------------------------|
| EXHIBIT B       | — |   | Additional Required Items  Prior to Funding |
| SCHEDULE 2.1(h) | — |   | Liabilities/Litigation                      |

 

iii

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**LOAN AGREEMENT**

 

**THIS LOANAGREEMENT** (this “**Agreement**”) is made and entered into as of July 9,2008, by and between**BROTMAN MEDICAL CENTERINC.**, a California corporation, debtor-in-possession (“**Borrower**”) and **JHA EAST 7 LLC**,a Delaware limited liability company (“**Lender**”).

 

**WITNESSETH THAT**, in consideration of the mutual covenants andagreements hereinafter set forth, the parties hereto agree as follows:

 

**DEFINITIONS**

 

Forthe purposes of this Agreement, the following terms shall have the followingrespective meanings, unless the context hereof clearly requires otherwise:

 

**Accounts**:  Means collectively the Reserve Account andthe Tax and Insurance Deposit Account.

 

**Affiliate**:  Means (x) withrespect to a corporation, (i) any officer or director thereof and anyPerson which is, directly or indirectly, the beneficial owner of more than 10%of any class of shares or other equity security or (ii) any Personwhich, directly or indirectly, controls or is controlled by or is under commoncontrol with such corporation and (y) with respect to a partnership,venture or limited liability company, any (i) general partner or member, (ii) generalpartner of a general partner or member, (iii) partnership with a commongeneral partner or member, or (iv) co-venturer thereof, and if any generalpartner, member or co-venturer is a corporation, any Person which is anAffiliate of such corporation.  Controls(which includes the correlative meanings of “controlled by” and “under commoncontrol with”) means effective power, directly or indirectly, to direct orcause the direction of the management and policies of such Person.

 

**Agreement**:  This LoanAgreement, including any amendments hereof and supplements hereto executed byBorrower and Lender.

 

**Anti-Terrorism Laws**: Shall mean, collectively, (a) the Uniting and Strengthening Americaby Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Actof 2001 (Public Law 107 56) (The USA PATRIOT Act), (b) Executive Order No. 13224on Terrorist Financing, effective September 24, 2001, and relating toBlocking Property and Prohibiting Transactions With Persons Who Commit,Threaten to Commit, or Support Terrorism, (c) the International EmergencyEconomic Power Act, 50 U.S.C. §1701 et seq. and (d) all other LegalRequirements relating to money laundering or terrorism.

 

**Bankruptcy Code**:  Means theUnited States Bankruptcy Code.

 

**Bankruptcy Court Order**: Means the findings and order described in Section 2.1(m).

 

**Borrower**:  BROTMANMEDICAL CENTER INC., a California corporation, debtor-in-possession, and itspermitted successors and assigns.

 

----

 

**Brokers**:  Shall havethe meaning given such term in Section 4.1(m).

 

**Business Day**:  Any day otherthan a Saturday, a Sunday, or a legal holiday on which Lender is not open forbusiness.

 

**Closing Date**:  The date uponwhich the Loan Amount is funded by Lender into the Escrow Account.

 

**Collateral**:  AllEquipment, furniture, furnishings, machinery, inventory, construction materials(if any), and any other item of personal property in which Borrower now orhereafter owns or acquires any interest or right, including any of theforegoing that are leased, which are used or useful in the construction,operation, use or occupancy of the Property (or any portion thereof); all ofBorrower’s documents, instruments, contract rights (including any rights underany development agreement) and general intangibles relating to any futureconstruction, use, operation or occupancy of the Property (or any portionthereof); all insurance proceeds from any policies of insurance covering any ofthe aforesaid; and such other collateral as may be described in the Deed ofTrust.  Notwithstanding anything to thecontrary contained in any Loan Document, Collateral shall not include, withoutlimitation, any accounts receivable.

 

**Consultants**:  Third partyexperts retained by Lender to assist it in connection with closing, disbursingor administering the Loan.

 

**Control**:  Means thepossession, directly or indirectly, of the power to direct or cause thedirection of the management and policies of a Person whether through ownershipof voting securities, beneficial interests, by contract or otherwise.  The definition is to be construed to apply equallyto variations of the word “Control” including “Controlled,” “Controlling” or “Controlledby.”

 

**Current Bankruptcy**: Means the filing by Borrower on October 25, 2007 of aChapter 11 petition for bankruptcy under the Bankruptcy Code.

 

**Deed of Trust**:  That certainDeed of Trust With Assignment of Leases and Rents, Security Agreement andFixture Filing of even date herewith executed by Borrower as trustor in favorof Lender as beneficiary to be recorded in the Official Records, creating afirst lien on the Property, and all buildings, fixtures and improvements now orhereafter owned or acquired by Borrower and situated on the Land, and allrights and easements appurtenant thereto, and a first lien on and a securityinterest in the Collateral associated with and appurtenant to the Land, whichDeed of Trust shall secure the Note and the other obligations specifiedtherein, including any amendments to such Deed of Trust and supplements theretoexecuted by Borrower and Lender.

 

**Default Rate**:  The DefaultRate of interest payable under the Note, as that term is defined in the Note.

 

**Environmental Indemnity**:  That certain Unsecured EnvironmentalIndemnity of even date herewith, executed by Borrower, in favor of Lender,setting forth certain indemnification obligations relating to “HazardousSubstances” (as defined therein).

 

2

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**Equipment**: All fixturesand equipment, if any, owned by Borrower and located or to be located in or on,and used in connection with the management, maintenance or operation of, theLand and the Improvements, and the business conducted at the Land and theImprovements.

 

**Equity Interests**:  Means (a) partnership interests (whethergeneral or limited) in an entity which is a partnership; (b) membershipinterests in an entity which is a limited liability company; or (c) theshares or stock interests in an entity which is a corporation.

 

**Escrow Account**:  Theinterest-bearing escrow account opened by Borrower with Escrow Holder.

 

**Escrow Holder**:  FidelityNational Title Company, Newport Beach, California.

 

**Financing Statement**: A UCC-1 financing statement naming Borrower as debtor and Lender assecured party, perfecting Lender’s security interest in the Collateral, in formand substance satisfactory to Lender, in Lender’s sole discretion, to be filedin the Office of the Secretary of State of the State of the Borrower’sformation.

 

**Governmental Requirements**: All laws, statutes, codes, ordinances, and governmental rules,regulations and requirements applicable to Borrower, Lender and the Property.

 

**Improvements**:  Theimprovements which currently exist or which may in the future be placed orconstructed upon the Land.

 

**Initial Deposit**:  The initialdeposit in the amount determined pursuant to Section 5.17(a), to bedeposited by Borrower into the Taxes and Insurance Deposit Account prior to theClosing Date.

 

**Land**:  The landconsisting of approximately 1.1 acres, legally described on Exhibit Aattached hereto and incorporated herein by this reference, together with alladditions thereto and substitutions therefor agreed to by Borrower and Lender.

 

**Lender**:  JHA EAST 7,LLC, a Delaware limited liability company, and its successors and assigns.

 

**Loan**:  The loan ofthe Loan Amount evidenced by the Note and to be made as a single lump sumpursuant to the terms of this Agreement and to be secured by the Deed of Trustand other Loan Documents, as applicable.

 

**Loan Amount**:  Seven Millionand No/100 Dollars ($7,000,000.00), provided that if the Bankruptcy Court determinesthat the aggregate payoff amounts of Borrower’s current debtor-in-possessionfinancing and pre-petition financing (collectively, the “**Total BKPayoff Amount**”) do not exceed Twenty Two Million and 00/100thsDollars ($22,000,000.00), in the aggregate, the Loan Amount shall be reduced bythe amount by which Twenty Two Million and 00/100ths Dollars ($22,000,000.00)exceeds the Total BK Payoff Amount.

 

3

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**Loan Documents**:  The documentsdescribed in this Agreement, which evidence and secure the Loan, including butnot limited to the Note, the Deed of Trust, this Agreement, the EnvironmentalIndemnity,  and the Financing Statementand including any amendments thereof and supplements thereto executed byBorrower and Lender.

 

**Material Adverse Effect**: Means, other than as a result of the Current Bankruptcy, with respect toany circumstance, act, condition or event of whatever nature (including anyadverse determination in any litigation, arbitration, or governmentalinvestigation or proceeding), whether singly or in conjunction with any otherevent, act, condition, circumstances, whether or not related, in Lender’sreasonable judgment, a material adverse change in, or a materially adverseeffect upon (a) the business, operations, or financial condition ofBorrower; (b) the ability of Borrower to perform its obligations under anyLoan Document to which it is a party; (c) the use, value or condition ofthe Property; (d) compliance of the Property with any Requirements of Law;or (e) the validity, priority or enforceability of any Loan Document orthe liens, rights (including, without limitation, recourse against theProperty) or remedies of Lender hereunder or thereunder.

 

**Maturity Date**:  Thirty-six(36) months from the Closing Date.

 

**Note**:  ThePromissory Note, of even date herewith, executed and delivered by Borrower toLender in the Loan Amount, as the same may be amended, modified or replacedfrom time to time.

 

**OFAC List**:  Means thelist of specially designated nationals and blocked persons subject to financialsanctions that is maintained by the U.S. Treasury Department, Office of ForeignAssets Control and any other similar list maintained by the U.S. TreasuryDepartment, Office of Foreign Assets Control pursuant to any Requirements ofLaw, including, without limitation, trade embargo, economic sanctions, or otherprohibitions imposed by Executive Order of the President of the UnitedStates.  The OFAC List is accessiblethrough the internet website www.treas.gov/ofac/t11sdn.pdf.

 

**Official Records**: The Official Records of Los Angeles County, California.

 

**Operating Statement**: A current, detailed statement of income and expenses from and formanaging, maintaining and operating the Property, in form and substance acceptableto Lender, certified as true, correct and complete by Borrower.

 

**Permits**:  Allgovernmental approvals, authorizations, permits and entitlements which havebeen or will be issued with respect to the Property, including buildingpermits, annexation agreements, plot plan approvals, subdivision approvals,environmental approvals (including an environmental impact report if requiredunder applicable law), sewer and water permits, and zoning and land useentitlements.

 

**Permitted Encumbrances**: The liens, charges and encumbrances on title to the Land as shown on theTitle Policy and as approved by Lender, or as otherwise approved in writing byLender, both in Lender’s sole discretion.

 

**Permitted Transfer**: Means each of the following:

 

4

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a.             Transfers of Equity Interests which, in the aggregateover the term of the Loan (i) do not exceed forty-nine percent (49%) ofthe total interests in Borrower; (ii) do not result in any Person holdingan Equity Interest in Borrower which exceeds forty-nine percent (49%) of thetotal Equity Interests in Borrower; and (iii) do not result in a change ofControl.

 

b.             Transfers with respect to anyPerson whose stocks or certificates are traded on a nationally recognized stockexchange.

 

c.             Transfers which have been approvedby Lender in accordance with Section 8.20 hereof.

 

d.             Permitted Encumbrances.

 

e.             All Transfers of worn out orobsolete Equipment that are promptly replaced with property of equivalent valueand functionality.

 

f.              All leases which have beenapproved by Lender in accordance with this Agreement.

 

**Person**:  Means andincludes an individual, a partnership, a corporation, a limited liabilitycompany, a trust, an unincorporated association, a joint venture or any other entityor a government or any agency or political subdivision thereof.

 

**Property**:  The Land, theImprovements and the Collateral.

 

**Requirements of Law**: Means (a) the organizational documents of an entity, and (b) anylaw, regulation, ordinance, code, decree, treaty, ruling or determination of anarbitrator, court or other Governmental Authority, or any Executive Orderissued by the President of the United States, in each case applicable to orbinding upon such Person or to which such Person, any of its property or theconduct of its business is subject including, without limitation, laws,ordinances and regulations pertaining to the zoning, occupancy and subdivisionof real property.

 

**Reserve Account**:  Means theinterest-bearing account to be established by Borrower at a financialinstitution approved by Lender to pay for capital improvements, repairs andreplacements to the Property.

 

**Reserve Contribution**: Means the amount of Ten Thousand and 00/100ths Dollars ($10,000.00), tobe deposited by Borrower into the Reserve Account each month in accordance withSection 5.18.

 

**Reserve Deposit**:  The initialdeposit in the amount of Twenty-Five Thousand and 00/100ths Dollars($25,000.00), to be deposited into the Reserve Account on or before the ClosingDate.

 

**Tax and Insurance Deposit Account**: Means an interest bearing demand deposit account to be opened byBorrower at a financial institution approved by Lender for the purpose ofdepositing payments of real estate taxes and assessments and insurance premiumsfor the Property, in the amounts and in the manner provided for in Section 5.17hereof.

 

5

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**Title Company**:  FidelityNational Title Company, Newport Beach, California.

 

**Title Policy**:  A titleinsurance policy in the form of an American Land Title Association ExtendedCoverage Loan Policy — 1970, amended 10-17-70 (without further modification,revision or amendment), insuring that on the Closing Date, Borrower owns feesimple title to the Land and that the Deed of Trust is a valid first lien onthe Property in the amount of the Note. The Title Insurance Policy must provide affirmative insurance againstmechanics liens and contain endorsements as Lender requires, in Lender’s solediscretion.  Except as approved by Lenderin writing prior to the Closing Date, the Title Insurance Policy must notcontain any survey exceptions, exceptions for rights of parties in possession(other than pursuant to existing leases), easements not of record or unpaidinstallments of special assessments, or any other exceptions to coverage notapproved by Lender.  The Title InsurancePolicy must contain such reinsurance agreements and direct access agreements asLender may require.

 

**Transfer**:  Means anyaction by which either (a) the legal or beneficial ownership of the EquityInterests in Borrower or (b) the legal or equitable title to the Property,or any part thereof, or (c) the Property or any portion thereof, is sold,assigned, transferred, hypothecated, pledged or otherwise encumbered or disposeof, in each case (a), (b) or (c) whether undertaken, directly orindirectly, or occurring by operation of law or otherwise, including, withoutlimitation, each of the following actions:

 

a.                                       the sale, conveyance, assignment, grantof an option with respect to, mortgage, deed in trust, pledge, grant of asecurity interest in, or any other transfer, as security or otherwise, of theProperty or with respect to leases or rents (or any thereof);

 

b.                                      the grant of an easement across theProperty or any other agreement granting rights in or restricting the use ordevelopment of the Property (including, without limitation, air rights);

 

c.                                       an installment sale wherein Borroweragrees to sell the Property for a price to be paid in installments; or

 

d.                                      an agreement by Borrower entered intoafter the Closing Date leasing all or a part of the Property.

 

**Transferees**:  Shall havethe meaning given such term in Section 8.8.

 

**Transferred Interest**: Shall have the meaning given such term in Section 8.8.

 

**UCC**:  Means the UniformCommercial Code as enacted and in effect in the state where the Property islocated (and as it may from time to time be amended); provided that, to theextent that the UCC is used to define any term in this Agreement or in anyother Loan Document and such term is defined differently in different Articlesor Divisions of the UCC, the definition of such term contained in Article orDivision 9 shall govern; provided further, however, that if, by reason ofmandatory provisions of law, any or all of the attachment, perfection orpriority of , or remedies with respect to, Lender’s liens on any Collateral isgoverned by the Uniform Commercial Code as enacted an in effect in ajurisdiction other than the state where the Property

 

6

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islocated, the term “UCC” shall mean the Uniform Commercial Code as enacted andin effect in such other jurisdiction solely for the purposes of the provisionsthereof relating to such attachment, perfection, priority or remedies and forpurposes of definitions related to such provisions.

 

Capitalized terms usedbut not otherwise defined herein shall have the meanings used and defined inthe Note.

 

# **I.**

 

# **LOAN; OPTION TO PURCHASE**

 

## **1.1          Principal.** Lender agrees to lend to Borrower, and Borrower agrees to borrow fromLender, the Loan Amount, in accordance with the terms hereof until the MaturityDate, the disbursement of which is evidenced by the Note.

##  

## **1.2          Interest**.

##  

### **(a)              Computation**. Borrower shall pay to Lender interest on the Loan at the Interest Rateand in the manner specified in the Note.

###  

### **(b)              Usury**. In the event that the interest and/or charges in the nature of interest,if any, provided for by this Agreement or by any other Loan Document, shallcontravene a legal or statutory limitation applicable to the Loan, if any,Borrower shall pay only such amounts as would legally be permitted; provided,however, that if the defense of usury and all similar defenses are unavailableto Borrower, Borrower shall pay all amounts provided for herein.  If, for any reason, amounts in excess of theamounts permitted in the foregoing sentence shall have been paid, received,collected or applied hereunder, whether by reason of acceleration or otherwise,then, and in that event, any such excess amounts shall be applied to principal,unless principal has been fully paid, in which event such excess amount shallbe refunded to Borrower.

###  

## **1.3          Maturity**. The principal balance owing on the Loan, and all accrued interest andother sums owing under the Loan Documents not otherwise paid when due, shall bedue and payable in full on the Maturity Date.

##  

## **1.4          Releaseof Deed of Trust**.  Lender shall promptly release the Deed ofTrust on the Property upon repayment in full of the Loan.

##  

## **1.5         ****Current Bankruptcy**. Notwithstanding the provisions of Section 1129(a)(9)(A) or anyother provision of the Bankruptcy Code, the Loan shall not be required to berepaid by Borrower upon confirmation of a plan of reorganization for theBorrower in the Current Bankruptcy.

 

7

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# **II.**

 

# **CLOSING CONDITIONS**

 

## **2.1          Conditionsof Lender’s Obligation to Close**.  The ClosingDate shall not occur, and Lender shall not be required to disburse the LoanAmount hereunder until the conditions and requirements set forth below have beencompleted and fulfilled to the reasonable satisfaction of Lender (or waived byLender in writing).

 

### **(a)              LoanDocuments**.  Borrower shall execute and deliver (or causeto be executed and delivered) to Lender and Escrow Holder the Loan Documentsand such other documents as Lender may require, in form and substanceacceptable to Lender and to its counsel, in their sole discretion, to evidenceand secure the Loan.  Lender maydesignate which of the Loan Documents are to be placed of record, the order ofrecording thereof, and the offices in which the same are to be recorded.  Borrower shall pay all documentary,intangible, recording and/or registration taxes and/or fees due upon the Note,the Deed of Trust, the Financing Statement and/or the other Loan Documents.

###  

### **(b)              TitleInsurance**.  Lender shall have received an unconditionalcommitment from the Title Company to issue the Title Policy.

###  

### **(c)              Brokers’Affidavit**.  Brokers shall have executed and delivered toLender an affidavit to the effect that Brokers have arranged this transactionand been paid a fee in connection therewith and that Brokers are currentlylicensed real estate brokers under the laws of the State of California to whichaffidavit a copy of said brokers’ licenses shall be attached.

###  

### **(d)              Conditionsfor Disbursement**.  Borrower shall have satisfied all conditionsfor disbursement set forth in Article III.

###  

### **(e)             ****Tax and InsuranceDeposit Account**.  Borrower shall have established in Borrower’sname, the Tax and Insurance Deposit Account with a financial institutionreasonably approved by Lender, and shall have funded the Initial Deposit, andpremiums for the 12-month period following the Closing Date shall have beenpaid for all insurance required to be maintained by Borrower.

###  

### **(f)               Recordationof Deed of Trust**.  The Deed of Trust shall have been recorded inthe Official Records in full compliance with the letter of title and escrowinstructions from the Lender to the Escrow Holder.

###  

### **(g)              NoDefaults**.  As of the Closing Date, no default or eventof default under this Agreement or under any of the other Loan Documents shallhave occurred and be continuing, and no event shall have occurred which, uponthe service of notice and/or the lapse of time, would constitute an event ofdefault thereunder.

 

### **(h)             ****Liabilities**. Except for the Current Bankruptcy, and except as set forth on Schedule 2.1(h) attachedhereto, there is no litigation, administrative proceeding, 

 

8

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### investigation or other legal proceeding pending or, to Borrower’sknowledge, threatened, which would have a Material Adverse Effect.

###  

### **(i)              ****Reserve Account**. Borrower shall have established in Borrower’s name, the Reserve Accountwith a financial institution approved by Lender, and shall have funded the ReserveDeposit.

###  

### **(j)               AdditionalConditions to Disbursement of Loan Amount**.  In additionto the satisfaction of each of the conditions set forth above in this Article II,and the applicable conditions specified in Article III below, Lender maycondition the disbursement of the Loan Amount upon Lender’s receipt andapproval of each of the additional items set forth in Exhibit Bhereto.

###  

### **(k)             Representationsand Warranties**.  The representations and warranties ofBorrower under Article IV shall be true and correct in all materialrespects through the Closing Date.

###  

### **(l)               BankruptcyCourt Order**.  The Bankruptcy Court shall have enteredfindings and an order in form and substance reasonably approved by Lenderapproving this Agreement and the other Loan Documents and providing that theLoan and the transaction contemplated hereby was extended by Lender in goodfaith, as provided in Section 364(e) of the Bankruptcy Code, and thatLender is entitled to all of the protections afforded to Lender provided in Section 364(e) ofthe Bankruptcy Code.  The order approvingthis Agreement and the other Loan Documents shall provide, among other things,that the Loan Documents shall not be altered, extended or otherwise modified inthis, or any future, bankruptcy case of Borrower.

###  

## **2.2          Conditionsof Borrower’s Obligation to Close**.  The ClosingDate shall not occur, and Borrower shall not be required complete thetransaction contemplated hereby until the conditions and requirements set forthbelow have been completed and fulfilled to the reasonable satisfaction ofBorrower (or waived by Borrower in writing):

##  

### **(a)              LoanDocuments**.  Lender shall execute and deliver (or cause tobe executed and delivered) to Escrow Holder the Loan Documents and such otherdocuments required to be delivered by Lender to Escrow Holder pursuant to theLoan Documents

###  

### **(b)              Representationsand Warranties**.  The representations and warranties of Lenderunder Article IV shall be true and correct in all material respectsthrough the Closing Date.

###  

### **(c)              BankruptcyCourt Order**.  The Bankruptcy Court shall have entered anorder (i) determining that the payoff amounts of Borrower’s currentdebtor-in-possession financing and pre-petition financing do not exceed TwentyTwo Million and 00/100ths Dollars ($22,000,00.00), in the aggregate, and (ii) expresslydisallowing any claim for non-compliance fees in connection therewith.

 

9

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# **III.**

 

# **DISBURSEMENT OF LOAN AMOUNT**

 

## **3.1          General**.

##  

### **(a)              Reductionof Loan Amount**.  The Loan Amount shall be disbursed by Lenderfor the benefit of Borrower on the Closing Date in accordance with the termsand conditions set forth in this Article III.  Borrower acknowledges that the Loan Amountshall be disbursed minus any (i) delinquent taxes and assessments on theProperty not satisfied and removed prior to the Closing Date, and (ii) anymechanic’s liens encumbering the Property. Any amounts withheld by Lender pursuant to clause (i) of thepreceding sentence shall promptly be applied by Lender to pay and delinquenttaxes and assessments on the Property and any amounts withheld by Lenderpursuant to clause (ii) of the preceding sentence shall be held in aninterest bearing account with Escrow Holder pending Borrower’s direction as tothe application of such proceeds.

###  

### **(b)              Advancesto Lender**.  Lender may, at Lender’s option, without anyobligation to do so, advance to itself all sums due to Lender under thisAgreement or under any of the other Loan Documents.  Lender shall also have the right, but not theobligation, to advance and directly apply the proceeds of the Loan to thesatisfaction of any of Borrower’s other obligations hereunder or under any ofthe other Loan Documents.

###  

## **3.2          Inspections**.

##  

### **(a)              Accessto the Property**.  Upon reasonable advance notice, Lender, theTitle Company, Consultants and their representatives shall have access to theProperty at all reasonable times and shall have the right to enter the Propertyand to conduct such inspections thereof as they shall deem necessary ordesirable for the protection of Lender’s interests.

###  

### **(b)              Consultants**. Lender may retain any Consultants deemed necessary or desirable byLender, at Borrower’s expense, to make periodic inspections of theProperty.  Lender may also retain suchother Consultants as Lender deems necessary or convenient to perform suchservices as may, from time to time, be required by Lender in connection withthe Loan, this Agreement, the other Loan Documents or the Property.

###  

### **(c)              NoReliance by Borrower or Third Party**.  NeitherBorrower nor any third party shall have the right to use or rely upon anyreports generated by Lender or its Consultants for any purpose whatsoever.

###  

## **3.3          LenderResponsibility**.  It is expressly understood and agreed thatLender assumes no liability or responsibility for protection of the Property,or for any representations made by Borrower.

 

## **3.4          DirectApplication of Proceeds**.  Lender shallhave the right, but not the obligation, to disburse and directly apply theproceeds of any portion of the Loan Amount to the satisfaction of any ofBorrower’s obligations hereunder or under the other Loan Documents. 

 

10

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## Any advance by Lender for such purpose shall be part of the Loan andshall be evidenced and secured by the Loan Documents.  Lender may advance such funds and incur suchexpenses as Lender deems necessary to preserve the Property and any securityfor the Loan, and such expenses, even though in excess of the amount of theLoan, shall be secured by any and all documents securing the Loan and the Noteand shall be payable to Lender upon demand.

##  

## **3.5          InsufficientDocumentation**.  In the event that Lender shall determine, inits reasonable judgment, that proper documentation to support disbursement ofthe Loan Amount, as required by this Agreement, has not been furnished, it maywithhold payment of the Loan Amount as shall not be so supported by properdocumentation, and shall promptly notify Borrower of the discrepancy in oromission of such documentation.  Untilsuch time as such discrepancy or omission is corrected to the satisfaction ofLender, it may withhold disbursement of the Loan Amount.

 

# **IV.**

 

# **REPRESENTATIONS AND WARRANTIES OF LENDER AND BORROWER**

 

## **4.1          Representationsand Warranties of Borrower**.  As aninducement to Lender to execute this Agreement and to disburse the proceeds ofthe Loan, Borrower represents and warrants to Lender that:

##  

### **(a)              LegalStatus of Borrower**.  Borrower is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofCalifornia.

###  

### **(b)              Title**. Borrower is the owner, in fee simple, of the Land and the Improvements,subject to no lien, charge, mortgage, deed of trust, restriction orencumbrance, except Permitted Encumbrances.

###  

### **(c)              NoBreach of Applicable Agreements or Laws**.  Subject toobtaining the approval of the Bankruptcy Court, the consummation of thetransactions contemplated hereby and the execution, delivery and/or performanceof this Agreement and the other Loan Documents will not result in any breach ofor constitute a default under any mortgage, deed of trust, lease, bank loan,credit agreement, or other instrument or violate any Governmental Requirements,to which Borrower is a party, or by which Borrower may be bound or affected.

###  

### **(d)              NoLitigation or Defaults**.  Except forthe Current Bankruptcy, and except as set forth on Schedule 2.1(h),there are no actions, suits or proceedings pending or, to the knowledge ofBorrower, threatened against or affecting Borrower or the Property which wouldhave a Material Adverse Effect, or involving the validity or enforceability ofthe Loan Documents or the priority of the lien thereof, at law or in equity;and Borrower is not in default under any order, writ, injunction, decree ordemand of any court or any administrative body having jurisdiction overBorrower.

###  

### **(e)              Financialand Other Information**.  The financial statements ofBorrower previously or hereafter delivered to Lender fairly and accuratelypresent, or will fairly and accurately present, the financial condition ofBorrower, as of the dates of such statements, 

 

11

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### and neither this Agreement nor any document, financial statement,financial or credit information, certificate or statement referred to herein orfurnished to Lender by Borrower contains, or will contain, any untrue statementof a material fact or omits, or will omit, a material fact, or is or will bemisleading in any material respect.

###  

### **(f)               ERISA**.  (a) Borroweris not and will not be an “employee benefit plan,” as defined in §3(3) ofERISA, subject to Title I of ERISA, (b) none of the assets of Borrowerconstitute or will constitute “plan assets” of one or more such plans withinthe meaning of 29 C.F.R. §2510.3-101, (c) Borrower is not and will not bea “governmental plan” within the meaning of §3(3) of ERISA, and (d) transactionsby or with Borrower are not and will not be subject to state statutesregulating investment of, and fiduciary obligations with respect to,governmental plans.

###  

### **(g)              BoundaryLines; Conformance with Governmental Requirements and Restrictions**. Except as disclosed in the survey provided to Lender, the exterior linesof the Improvements are, and at all times will be, within the boundary lines ofthe Land, and Borrower has examined and is familiar with all applicablecovenants, conditions, restrictions and reservations, and with all applicableGovernmental Requirements, including but not limited to building codes andzoning, environmental, hazardous substance, energy and pollution control laws,ordinances and regulations affecting the Property, and the Property conforms toand complies with said covenants, conditions, restrictions, reservations andGovernmental Requirements.

###  

### **(h)              Utilities,Etc.**  Telephone services, gas, electric power, stormsewers, sanitary sewer and water facilities are available to the boundaries ofthe Land, adequate to serve the Property and not subject to any conditions(other than normal charges to the utility supplier) which would limit the useof such utilities.  All streets andeasements necessary for the operation of the Property are available to theboundaries of the Property.

###  

### **(i)               Collateral. **Borrower is now and shall continue to be the soleowner of the Collateral free from any lien, security interest or adverse claimof any kind whatsoever, except for liens or security interests in favor ofLender, the interest of a lessor pursuant to a lease of personal property, anyliens disclosed in the Title Policy, or liens or security interests otherwiseapproved by Lender in Lender’s sole discretion.

###  

### **(j)               Condemnation**. No condemnation proceeding or moratorium is pending or, to the knowledgeof Borrower, threatened against the Land or the Improvements which would impairany construction, use, sale or occupancy of the Property (or any portionthereof) in any manner whatsoever.

###  

### **(k)             GovernmentalRegulations**.  Except for the Current Bankruptcy, Borroweris not subject to regulation under the Investment Company Act of 1940, theFederal Power Act, the Public Utility Holding Company Act of 1935, theInterstate Commerce Act or any federal or state statute or regulation limitingits ability to incur indebtedness for money borrowed.

 

12

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### **(l)               Compliancewith Anti-Terrorism, Embargo, Sanctions and Anti Money Laundering Laws**. Borrower and, to Borrower’s current knowledge, (a) each Personowning an interest in Borrower and (b) each tenant at the Property:  (i) is not currently identified on theOFAC List, and (ii) is not a Person with whom a citizen of the UnitedStates is prohibited to engage in transactions by any trade embargo, economicsanction, or other prohibition of United States law, regulation, or ExecutiveOrder of the President of the United States, including, without limitation, anyAnti-Terrorism Laws.  Borrower agrees toconfirm this representation and warranty in writing on an annual basis ifrequested by Lender to do so.

###  

### **(m)             Brokers**. Borrower is represented by HealthWest Realty Advisors (“Broker”)****in connection with the making and arrangement of the Loanand the transaction contemplated hereby. Other than any brokerage commissions or fees which may be due byBorrower to the Broker for such services, there are no other brokerage commissionsor finders’ fees due or claimed by any party to be due from Borrower inconnection with or with respect to the transaction contemplated hereby.  Borrower shall be fully responsible for anycommissions or fees due and owing, if any, to Broker.

###  

### **(n)              Defectsand Hazards**.  Borrower does not know of any defects, factsor conditions affecting the Land that would make it unsuitable for the usecontemplated hereunder or of any abnormal hazards (including earth movement orslippage) affecting the Land.

###  

### **(o)              Permits**. Borrower has obtained all Permits which are necessary for the operationof the Property in accordance with all applicable building, environmental,subdivision, land use and zoning laws, including all permits for theImprovements, annexation agreements, plot plan approvals, subdivision approvals(including the approval and recordation of any required subdivision map),environmental approvals (including a negative declaration or an environmentalimpact report if required under applicable law), sewer and water permits andzoning and land use entitlements.

###  

## **4.2          Representationsand Warranties of Lender**.  Lenderrepresents and warrants to Borrower that:

##  

### **(a)              LegalStatus of Lender**.  Lender is a limited liability company dulyorganized, validly existing and in good standing under the laws of Delaware.

###  

### **(b)             ****No Breach of ApplicableAgreements or Laws**.  The consummation of thetransactions contemplated hereby and the execution, delivery and/or performanceof this Agreement and the other Loan Documents will not result in any breach ofor constitute a default under any mortgage, deed of trust, lease, bank loan,credit agreement, or other instrument or violate any Governmental Requirements,to which Lender is a party, or by which Lender may be bound or affected.

 

13

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# **V.**

 

# **COVENANTS OF BORROWER**

 

As an inducement toLender to execute this Agreement and to make the Loan, and while this Agreementis in effect, and until Lender has been paid in full the principal of andinterest on the Loan made by Lender hereunder and under the other LoanDocuments, Borrower hereby covenants as set forth in this Article V:

 

## **5.1         ****Paying Costs of Loan**. Borrower shall pay all reasonable expenses incurred by Lender inconnection with the Loan and its documentation, closing, administration andenforcement, including, without limitation, all recording costs, titleinsurance premiums, escrow charges, costs of surveys, appraisal fees, costsassociated with updating existing environmental reports (and, if reasonablynecessary, obtaining a Phase II report), and reasonable expenses anddisbursements of Lender’s legal counsel.

##  

## **5.2          UsingLoan Proceeds. **Borrower shall use the Loan solely to payoff, or to reimburse Borrower for paying off, (a) Borrower’s currentdebtor-in-possession financing and pre-petition financing and (b) thecosts and expenses incurred by Borrower in connection with obtaining theLoan.  Borrower shall not use the Loanproceeds, or any portion of them, to pay any fees or other payments to anyAffiliate of Borrower without Lender’s prior written consent, in Lender’s solediscretion.

##  

## **5.3          Keepingof Records**.  Borrower shall set up and maintain accurateand complete books, accounts and records pertaining to the Property in a mannerreasonably acceptable to Lender. Borrower will permit representatives of Lender to have free access toand to inspect and copy all books, records and contracts of Borrower.  Any such inspection by Lender shall be forthe sole benefit and protection of Lender, and Lender shall have no obligationto disclose the results thereof to Borrower or to any third party.

##  

## **5.4          ProvidingFinancial Information**.  Borrower shall furnish suchfinancial information concerning Borrower and the Property as Lender mayreasonably request, and shall furnish to Lender (a) quarterly financialstatements for Borrower within forty-five (45) days following the end of eachfiscal quarter thereof, (b) quarterly written reports, within forty-five(45) days following the end of each fiscal quarter, setting forth anynew direct indebtedness, obligations or liabilities incurred by Borrower(which shall include contingent liabilities and guaranties) since the datehereof (or the date of the last such written report after the first suchwritten report is so provided), and (c) if required by Lender, copies ofall federal income tax returns (with all supporting schedules) of Borrower dueduring the term of the Loan within fifteen (15) days after the deadline (assuch deadline may be extended) for filing the same.  All such financial statements shall be inreasonable detail, shall be prepared for partnerships, corporations and limitedliability companies in accordance with generally accepted accounting principlesconsistently applied and for individuals in accordance with accounting principlesconsistently applied, shall be certified by the party to which they apply astrue, correct and complete**.**

 

14

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## **5.5          ProvidingOperating Statements**.  Borrower shall, within ten (10) daysfollowing the close of each fiscal quarter, deliver to Lender an OperatingStatement and rent roll, in form and detail reasonably satisfactory to Lender,for the Property for the preceding fiscal quarter.  Borrower shall also deliver to Lender anannual Operating Statement for the Property within ninety (90) days followingthe end of each fiscal year thereof.  Allsuch Operating Statements, rent rolls and leasing status reports shall becertified as true, correct and complete by Borrower.

##  

## **5.6          Complyingwith the Loan Documents and Other Agreements**.  Borrowershall comply with and perform all of its agreements and obligations under theLoan Documents and shall comply with all reasonable requests by Lender whichare consistent with the terms thereof. Borrower shall comply with and perform all of its agreements andobligations under any mortgage, deed of trust, lease, bank loan, creditagreement, and any other agreement and any Governmental Requirements to whichBorrower is a party, or by which Borrower may be bound or affected.

##  

## **5.7          Compliancewith Laws**.  Borrower will comply and, to the extent it isable, will cause others to comply with all laws and requirements ofgovernmental authorities having jurisdiction over the processing, approving andrecording of any subdivision map, and will furnish Lender with reports of anyofficial searches for violation of any requirements established by suchgovernmental authorities.  Borrower willcomply and, to the extent it is able, will cause others to comply with allrestrictive covenants and all obligations created by private contracts andleases which affect ownership, development, construction, equipping, fixturing,use, occupancy, sale or leasing of the Property (or any portion thereof).  The Property and the leasing thereof shall bein compliance with all permits and approvals issued by governmental agencieswith respect to the Property, applicable building, zoning and use laws,requirements, regulations and ordinances, and any development will not violateany restrictions of record against the Property.  Borrower will deliver to Lender, promptlyafter receipt thereof, copies of all permits and approvals received fromgovernmental authorities relating to the use, construction, development, orsale of the Property.

##  

## **5.8          Ownershipof Personal Property**.  Borrower will be the soleowner of all Collateral acquired after the date hereof, free from any adverselien, security interest or adverse claim of any kind whatsoever, except forsecurity interests and liens in favor of Lender, Liens disclosed in the TitlePolicy, and other liens approved by Lender, in Lender’s sole discretion.  Borrower will not convey or transfer anyportion of the Collateral without the prior written consent of Lender, otherthan in the ordinary course of business; provided, however, Borrower may conveyor transfer some or all of the Collateral so long as Borrower obtains areplacement of comparable or greater utility and value.

##  

## **5.9          Representationsand Warranties**.  Until repayment of the Note and all otherobligations secured by the Deed of Trust, Borrower shall ensure that therepresentations and warranties of Article IV remain true and complete inall material respects.

##  

## **5.10        TradeNames**.  Borrower shall immediately notify Lender inwriting of any change in the jurisdiction of organization or place of businessof, or the change in the legal, trade or fictitious business names used byBorrower, and Lender is hereby authorized to file or record 

 

15

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## any additional financing statements, amendments and other certificatesnecessary to reflect any such changes.

##  

## **5.11        NoDistributions**.  During the occurrence and continuation of anyEvent of Default, Borrower will not, without the prior written consent ofLender in its sole discretion, make any distribution of assets to anyshareholder of Borrower, whether or not such a distribution is permitted underthe terms of Borrower’s bylaws, including repayment of any loans made by ashareholder of Borrower to Borrower, return of capital contributions,distributions upon termination, liquidation or dissolution of Borrower or anydevelopment, property management, accounting or other fees payable to ashareholder of Borrower.

##  

## **5.12        FutureDevelopment**.  Borrower shall not undertake any on-siteconstruction, demolition or rehabilitation work on the Land at a cost in excessof $500,000 without the prior written consent of Lender.  Borrower shall notify Lender of its intentionto undertake any material on-site construction, demolition or rehabilitation workon the Land regardless of the cost thereof and shall demonstrate to Lender’sreasonable satisfaction that Borrower has the funds available to pay for suchcosts.  Upon request, Borrower shalldeliver to Lender copies of any plans, specifications and contracts relating tosuch work as Lender shall reasonably request.

##  

## **5.13        FurtherAssurances**.  Borrower shall execute and deliver from timeto time, promptly after any request therefor by Lender, any and allinstruments, agreements and documents and shall take such other action as maybe reasonably necessary or desirable in the opinion of Lender to maintain,perfect or insure Lender’s security provided for herein and in the other LoanDocuments, including the filing or recording of UCC renewal statements or amendments,the execution of such amendments to the Deed of Trust and the other LoanDocuments and the delivery of such endorsements to the Title Company, all asLender reasonably requires, and shall pay all fees and expenses (includingreasonable attorneys’ fees) related thereto or incurred by Lender in connectiontherewith.

##  

## **5.14        Noticeof Litigation, Etc**.  Promptly upon receiving noticethereof, Borrower will give, or cause to be given, prompt written notice toLender of (a) any action or proceeding instituted by or against it in anyfederal or state court or before any commission or other regulatory body,federal, state or local, foreign or domestic, which, if adversely determined,could reasonably be expected to have a Material Adverse Effect or which wouldconstitute an event of default or a default under any other material contract,instrument or agreement to which it is a party or by or to which it or any ofits properties or assets may be bound or subject; or (b) any suchproceedings that are threatened against it, which, if adversely determined,could reasonably be expected to have a Material Adverse Effect; or (c) anyactions, proceedings or notices adversely affecting the Property (or anyportion thereof) or Lender’s interest therein or any zoning, building or othermunicipal officers, offices or departments having jurisdiction with respect tothe Property or the leasing of it.

##  

## **5.15        Signage**. Borrower shall not sell, lease or assign the right to any signage on orabout the Property without the prior written consent of Lender, other thanrights of tenants pursuant to existing leases.

 

16

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## **5.16        Maintenanceof Property**.  Borrower shall maintain and preserve allrights and franchises material to its business at the Property.

##  

## **5.17        ImpoundAccount**.

##  

### **(a)             **Borrower shall at all times maintain andmake deposits into the Taxes and Insurance Deposit Account as follows:commencing on the first day of the month in which Borrower is required to makeits first interest payment under the Note (the “**FirstPayment Date**”), (i) Borrower shall deposit into the Taxes andInsurance Deposit Account an amount equal to the product of one-twelfth (1/12th) of the yearly real estate taxes and assessmentswhich may be levied on the Property multiplied by the number of months whichhave elapsed since the end of the prior fiscal tax year and the First PaymentDate (Borrower shall receive a credit for the Initial Deposit), and (ii) thereafter,on the first day of the month thereafter until the Maturity Date, Borrowershall deposit or cause to be deposited into the Taxes and Insurance DepositAccount an amount equal to one-twelfth (1/12th)of the yearly real estate taxes and assessments which may be levied on theProperty and the yearly premiums for all insurance required to be maintained byBorrower.  In connection with theforegoing, Borrower shall be responsible for ensuring Lender’s receipt, atleast thirty (30) days prior to the respective due date for payment, of allbills, invoices and statements for all real estate taxes and assessments andinsurance premiums to be paid.  In itssole discretion, Lender may retain a third party tax lien service to obtain taxcertificates and other evidence or estimates of tax due or to become due andBorrower shall promptly reimburse Lender for the cost of such service.  Any unpaid reimbursements for any tax lienservice will be added to the Note.

###  

### **(b)             **Lender shall withdraw, and Borrowerhereby authorizes Lender to withdraw, funds from the Taxes and InsuranceDeposit Account from time to time in order to cover the payments of real estatetaxes and assessments and insurance premiums as the same become due andpayable.

###  

## **5.18        ReserveAccount**.  Commencing on the first day of the month inwhich Borrower is required to make its first interest payment under the Note,and continuing on the first day of each month thereafter  until the Maturity Date, Borrower shalldeposit the Reserve Contribution into the Reserve Account.  Borrower may draw upon the Reserve Accountfor purposes of making capital improvements to the Property, up to four (4) timesin any given year, provided Borrower gives Lender at least thirty (30) daysprior written notice of such draw request, and further provided that Lenderapproves of the amount of the requested draw, the proposed cost, scope and needfor the requested improvements, repairs and/or replacements, and the proposedmanner in which the work is to be performed.

##  

## **5.19        Existence;Change of Name; Location as a Registered Organization**. Borrower shall continuously maintain (a) its existence and shallnot dissolve or permit its dissolution, and (b) its rights and franchisesto do business in the state where the Property is located.  Borrower shall not change Borrower’s name,legal entity, or its location as a registered organization within the meaningof the UCC, without notifying Lender of such change in writing at least thirty(30) days prior to its effective date. The notification requirements set forth in this Section are inaddition to, and not in limitation of, the requirements of ARTICLE 7.  Borrower 

 

17

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## shall pay all costs and expenses incurred by Lender (including, withoutlimitation, reasonable legal fees) in connection with any change describedherein.

##  

## **5.20        Reserved**.

##  

## **5.21        ProhibitedTransactions**.  Borrower shall not engage in any transactionwhich would cause any obligation or action taken or to be taken hereunder byBorrower (or the exercise by Lender of any of its rights under any of the LoanDocuments) to be a non-exempt (under a statutory or administrative classexemption) prohibited transaction under ERISA. Borrower agrees to deliver to Lender such certifications or otherevidence throughout the term of the Loan as requested by Lender in its solediscretion to confirm compliance with Borrower’s obligations under this Section 5.20or to confirm that Borrower’s representations and warranties regarding ERISAremain true.

##  

## **5.22        Compliancewith Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws**. Borrower shall comply with all Requirements of Law relating to moneylaundering, anti-terrorism, trade embargos and economic sanctions, now orhereafter in effect, including, without limitation, Anti-Terrorism Laws.  Without limiting the foregoing, Borrowershall not take any action, or permit any action to be taken, that would causeBorrower’s representations and warranties in Section 4.1(l) of thisLoan Agreement to become untrue or inaccurate at any time during the term ofthe Loan.  Borrower shall notify Lenderpromptly of Borrower’s actual knowledge that the representations and warrantiesin Section 4.1(l) of this Loan Agreement may no longer be accurate orthat any other violation of the foregoing Requirements of Law has occurred oris being investigated by Governmental Authorities.  In connection with such an event, Borrowershall comply with all Requirements of Law and directives of GovernmentalAuthorities and, at Lender’s request, provide to Lender copies of all notices,reports and other communications exchanged with, or received from, GovernmentalAuthorities relating to such event. Borrower shall also reimburse Lender for any expense incurred by Lenderin evaluating the effect of such an event on the Loan and Lender’s interest inthe collateral for the Loan, in obtaining any necessary license fromGovernmental Authorities as may be necessary for Lender to enforce its rightsunder the Loan Documents, and in complying with all Requirements of Lawapplicable to Lender as the result of the existence of such an event and forany penalties or fines imposed upon Lender as a result thereof.

##  

## **5.23        SinglePurpose Entity**.  In connection with the effectiveness ofBorrower’s plan of reorganization in the Current Bankruptcy, and subject toBorrower’s receipt of all necessary regulatory and other approvals, Borrowercovenants and agrees to use its commercially reasonable efforts to cause theProperty to be transferred to a “single purpose entity” (“SPE”) and to causesuch SPE to comply with customary “single purpose entity” covenants, including,without limitation, corporate governance provisions, rating agency requirements,and the assignment of any applicable property management agreement.

 

18

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# **VI.**

 

# **DEFAULTS**

 

## **6.1          Eventsof Default**.  Any of the following events shall constitutean “Event of Default” under this Agreement:

##  

### **(a)             **Borrower shall default in the payment ofprincipal due according to the terms hereof or of the Note.

###  

### **(b)             **Borrower shall default in the payment ofinterest on the disbursement of the Loan Amount made by Lender, or in thepayment of fees or other amounts payable to Lender, hereunder, under the Noteor under any of the other Loan Documents, and such default is not cured withinfive (5) days after receipt of written notice from Lender.

###  

### **(c)             **Borrower shall fail to perform or observeany obligation or covenant (other than those obligations and covenantsdescribed in subparagraphs (a) and (b), above, or otherwise set forth insubparagraphs (d) through (p), below, of this Section 6.1) under thisAgreement or any other Loan Document within thirty (30) days after receipt ofwritten notice that such obligation was not performed; provided that, if curecannot reasonably be effected within such 30-day period, such failure shall notbe an Event of Default hereunder so long as Borrower commences cure within such30-day period, and thereafter diligently prosecutes such cure to completion;and provided further, however, that notwithstanding the 30-day cure period orextended cure period described above in this subparagraph (c), if a differentnotice or cure period is specified under any Loan Document or under anyprovision of the Loan Documents as to any such failure or breach, the specificLoan Document or provision shall control, and Borrower shall have no more timeto cure the failure or breach than is allowed under the specific Loan Documentor provision as to such failure or breach.

###  

### **(d)             **Any representation or warranty made byBorrower in this Agreement, in any of the other Loan Documents, or in anycertificate or document furnished under the terms of this Agreement or inconnection with the Loan, shall be untrue or incomplete in any material respectwhen made.

###  

### **(e)             **An event of default, after the expirationof any applicable notice and/or cure period provided thereunder, shall existunder the terms of any other credit facility or other agreement now orhereafter existing between Borrower and Lender or JHA West 16, LLC, and/orbetween any other Affiliate of Borrower and Lender or JHA West 16, LLC.

###  

### **(f)              **A default shall exist under the terms ofBorrower’s formation documents.

###  

### **(g)             **The Environmental Indemnity, at any timeand for any reason ceases to be in full force and effect, or Borrower contestsor denies the validity or enforceability of the Environmental Indemnity, orgives notice to Lender to such effect, or otherwise attempts to revoke orrepudiate any of the foregoing as to any existing or future obligations.

 

19

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### **(h)             **Borrower shall fail to maintain insuranceas required by the Deed of Trust or shall fail to furnish to Lender proof ofpayment of all premiums for such insurance.

###  

### **(i)              **A transfer, encumbrance, lien, change ofownership or other action or occurrence prohibited by the Deed of Trust shalloccur.

###  

### **(j)              **Lender fails to have an enforceable lienon or security interest in any property or Collateral given as security for theLoan.

###  

### **(k)            **If Borrower shall (i) make anassignment for the benefit of creditors; (ii) generally not be paying itsdebts as they become due; or (iii) admit in writing its inability to payits debts as they become due;

###  

### **(l)              **Other than with respect to the CurrentBankruptcy, if (i) Borrower shall commence any case, proceeding or otheraction under any existing or future law of any jurisdiction, domestic orforeign, relating to bankruptcy, insolvency, reorganization, conservatorship orrelief of debtors (A) seeking to have an order for relief entered withrespect to it, or seeking to adjudicate it a bankrupt or insolvent, or seekingreorganization, arrangement, adjustment, winding-up, liquidation, dissolution,composition or other relief with respect to it or its debts, or (B) seekingappointment of a receiver, trustee, custodian, conservator or other similarofficial for it or for all or any substantial part of its assets; or (ii) thereshall be commenced against Borrower any case, proceeding or other action of anature referred to in clause (i) above by any party other than Lenderwhich (A) results in the entry of an order for relief or any suchadjudication or appointment, or (B) remains undismissed, undischarged orunbonded for a period of ninety (90) days; or (iii) there shall becommenced against Borrower any case, proceeding or other action seekingissuance of a warrant of attachment, execution, distraint or similar processagainst all or any substantial part of its assets which results in the entry ofany order for any such relief which shall not have been vacated, discharged, orstayed or bonded pending appeal within ninety (90) days from the entry thereof;or (iv) Borrower shall take any action in furtherance of, or indicatingits consent to, approval of, or acquiescence in, any of the acts set forth inclause (i), (ii), or (iii) above;

###  

### **(m)            **Any judgment for monetary damages isentered against Borrower which, in Lender’s sole judgment, has a MaterialAdverse Effect or is not covered to Lender’s satisfaction by collectibleinsurance proceeds;

###  

### **(n)             **If a Transfer, other than a PermittedTransfer, occurs without Lender’s prior written consent or in violation of theterms of Lender’s consent; or

###  

## **6.2          Rightsand Remedies**.  Upon the occurrence and during thecontinuance of an event of default, unless such event of default issubsequently waived in writing by Lender, Lender shall be entitled, at theoption of Lender, to exercise any or all of the following rights and remedies,consecutively or simultaneously, and in any order:

##  

### **(a)             **Lender may declare the entire unpaidprincipal balance of the Loan Amount to be immediately due and payable,together with accrued and unpaid interest on such advances, without notice toor demand on Borrower.

 

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### **(b)             **Lender may exercise any or all remediesspecified herein and in the other Loan Documents, including (without limitingthe generality of the foregoing) the right to foreclose the Deed of Trust,and/or any other remedies which it may have therefor at law, in equity or understatute.

###  

### **(c)             **Lender may cure the event of default onbehalf of Borrower, and, in doing so, may enter upon the Property, and mayexpend such sums as it may deem desirable, including attorneys’ fees, eventhough causing the Loan to exceed the face amount of the Note, shall bearinterest at the Default Rate and shall be payable by Borrower on demand.

 

# **VII.**

 

# **RESERVED**

 

# **VIII.**

 

# **MISCELLANEOUS**

 

## **8.1          BindingEffect; Waivers; Cumulative Rights and Remedies**. The provisions of this Agreement shall inure to the benefit of and bebinding upon the parties hereto and their respective heirs, executors,administrators, personal representatives, legal representatives, successors andassigns; provided, however, that neither this Agreement nor the proceeds of theLoan may be assigned by Borrower voluntarily, by operation of law or otherwise,without the prior written consent of Lender, in Lender’s sole discretion.  No delay on the part of Lender in exercisingany right, remedy, power or privilege hereunder shall operate as a waiverthereof, nor shall any single or partial exercise of any right, remedy, poweror privilege hereunder constitute such a waiver or exhaust the same, all ofwhich shall be continuing.  The rightsand remedies of Lender specified in this Agreement shall be in addition to, andnot exclusive of, any other rights and remedies which Lender would otherwisehave at law, in equity or by statute, and all such rights and remedies,together with Lender’s rights and remedies under the other Loan Documents, arecumulative and may be exercised individually, concurrently, successively and inany order.

##  

## **8.2          Survival**. All agreements, representations and warranties made in this Agreement orany other Loan Document shall survive the execution of this Agreement, themaking of the advances by Lender, and the execution of the other LoanDocuments, and shall continue until Lender receives payment in full of allindebtedness of Borrower incurred under this Agreement and under the other LoanDocuments.

##  

## **8.3          GoverningLaw; Waiver of Jury Trial**.  ThisAgreement, the rights of the parties hereunder and the interpretation hereofshall be governed by, and construed in accordance with, the internal laws ofthe State of California, in all respects. Borrower hereby waives any right to a trial by jury in any actionrelating to the Loan and/or the Loan Documents.

##  

## **8.4          Counterparts**. This Agreement may be executed in any number of counterparts, all ofwhich shall constitute a single Agreement.

 

21

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## **8.5          Notices**. Any notice required or permitted to be given by either party hereto tothe other under the terms of this Agreement, or documents related hereto, shallbe deemed to have been given on the date the same is deposited in the UnitedStates Mail, registered or certified, return receipt requested, postageprepaid, addressed to the party to which the notice is to be given at theaddress set forth opposite its name below, or at any other address specified ina notice given by such party to the other not less than ten (10) daysprior to the effective date of the address change.

##  

## **8.6          Costsand Expenses; Indemnification; Reimbursement.**

##  

### **(a)             **Upon the closing and funding of the Loan,Borrower shall pay (i) all taxes and assessments and all reasonableout-of-pocket expenses, charges, costs and fees provided for in this Agreement,and (ii) all reasonable out of pocket expenses incurred by Lender (includingthe reasonable out-of-pocket fees, charges and disbursements of any counsel forLender), in connection with the enforcement or protection of its rights inconnection with this Agreement and the other Loan Documents, including itsrights under this Section, and (iii) a loan fee to Lender in the amount ofone percent (1%) of the original principal balance of the Loan (which shall bepaid out of Loan proceeds).

###  

### **(b)             **Borrower shall indemnify Lender(hereinafter, “**Indemnitee**”) against, and holdeach Indemnitee harmless from, any and all losses, claims, damages, liabilitiesand related expenses (including the reasonable fees, charges and disbursementsof any counsel for any Indemnitee), incurred by any Indemnitee or assertedagainst any Indemnitee by any third party or by Borrower or Indemnitor arisingout of, in connection with, or as a result of (i) the execution ordelivery of this Agreement, any other Loan Document or any agreement orinstrument contemplated hereby or thereby, the performance by the partieshereto of their respective obligations hereunder or thereunder or theconsummation of the Loan transactions, or (ii) any actual or prospectiveclaim, litigation, investigation or proceeding relating to any of theforegoing, whether based on contract, tort or any other theory, whether broughtby a third party or by Borrower, and regardless of whether any Indemnitee is aparty thereto, provided that such indemnity shall not, as to any Indemnitee, beavailable to the extent that such losses, claims, damages, liabilities orrelated expenses (x) are determined by a court of competent jurisdictionby final and nonappealable judgment to have resulted from the gross negligenceor willful misconduct of such Indemnitee or (y) result from a claimbrought by Borrower against an Indemnitee for breach in bad faith of suchIndemnitee’s obligations hereunder or under any other Loan Document, ifBorrower or Indemnitor has obtained a final and nonappealable judgment in itsfavor on such claim as determined by a court of competent jurisdiction.

###  

### **(c)             **The obligations on the part of Borrowerunder this Section 7.6 shall survive the closing of the Loan and therepayment thereof.

###  

## **8.7          NoThird Party Reliance**.  No third party shall beentitled to rely upon this Agreement or to have any of the benefits of Lender’sinterest hereunder, unless such third party is an express assignee of all or aportion of Lender’s interest hereunder.

##  

## **8.8          Saleof Loan or Participations**.  Lender may atany time sell, transfer, syndicate, grant participations in or otherwisedispose of any portion of the Loan (each such interest so 

 

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## disposed of being herein called a “**Transferred Interest**”)to banks, insurance companies or other financial institutions (hereinaftercalled “**Transferees**”), pursuant to suchtransfer agreements, co-lender agreements, participations agreements and/oragency agreements into which Lender and its Transferees may enter and by whichBorrower shall agree in writing to recognize. In addition, Lender may, at any time and from time to time, in itsordinary course of business and in accordance with applicable law, (i) assignan undivided interest in the Loan to an Affiliate of Lender or to a successorentity by reason of any merger affecting Lender, or (ii) pledge or assignthe same to any Federal Reserve Bank in accordance with applicable law.  At the request of Lender, in the event of anysuch sale, assignment, transfer or syndication, Borrower shall execute separatenew Notes to the Assignor and its assignee, in the amounts of their respectiveinterests in the Loan after said assignment, and shall deliver the same to theassignor and the assignee, in exchange for the assignor’s existing Note.  All such separate new Notes shall be entitledto all the rights and benefits accorded to the Note under the terms of the LoanDocuments.  No such assignment shall bebinding upon Borrower until Lender gives written notice thereof to Borrower.  Lender may divulge all information relatingto Borrower or the Property which Lender has to any actual or potentialTransferee, and Borrower shall cooperate with Lender in connection with thetransfer.  Borrower agrees that eachTransferee shall be entitled to the benefits hereof with respect to itsTransferred Interest and that each Transferee may exercise any and all rightsof banker’s lien, setoff and counterclaim as if such Transferee were a directlender to Borrower.  If Lender makes anyassignment to a Transferee, then upon notice to Borrower such Transferee, tothe extent of such assignment (unless otherwise provided therein), shall becomea lender hereunder and shall have all the rights and obligations of Lenderhereunder, and Lender shall be released from its duties and obligations underthis agreement to the extent of such assignment.

##  

So long as (and only solong as) no event of default then exists at the time of a disposition of aTransferred Interest, confidential information regarding Borrower given to suchTransferees shall be kept confidential except to the extent such Transferee isrequired to disclose such information by reason of any applicable law orregulation.

 

## **8.9          Arrangementby Brokers**.  Borrower acknowledges and agrees that thisLoan and the transaction contemplated hereby has been made or arranged by theBrokers as described in Section 1916.1 of the California Civil Code, andas such, this transaction is exempt from Section 1 of Article XV ofthe California Constitution.

##  

## **8.10        Recourse**. Upon an event of default, Lender will look solely to the Property forthe repayment of the Loan and will not enforce or seek a judgment againstBorrower; provided, however, Borrower shall be personally liable to Lender for:(i) fraud or intentional misrepresentation in connection with theexecution and the delivery of this Agreement, or the other Loan Documents; (ii) Borrower’smisapplication or misappropriation of rents received by Borrower after theoccurrence of a default or event of default; (iii) Borrower’smisapplication or misappropriation of security deposits or rents collected morethan thirty (30) days in advance; (iv) Borrower’s misapplication or themisappropriation of insurance proceeds or condemnation awards; (v) Borrower’sfailure to pay prior to delinquency any Impositions (as defined in the Deed ofTrust) (except to the extent that sums sufficient to pay such amounts have beendeposited in escrow with Lender), charges for labor or materials or othercharges that can create liens on the Property; (vi) Borrower’s failure toreturn or to reimburse Lender for all Collateral 

 

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## taken from the Property by or on behalf of Borrower and not replacedwith Collateral of the same utility and of the same or greater value inviolation of the terms of the Loan Documents; (vii) any act of intentionalwaste or arson by Borrower or any affiliate thereof with respect to theProperty; or (viii) Borrower’s failure to comply with the provisions of Section 1.12of the Deed of Trust.

##  

## **8.11        Timeof the Essence**.  Time is of the essence hereof with respect tothe dates, terms and conditions of this Agreement.

##  

## **8.12        EntireAgreement; No Oral Modifications**.  ThisAgreement, the other Loan Documents and the other documents mentioned hereinand executed as of the date hereof set forth the entire agreement of theparties with respect to the Loan and supersede all prior written or oralunderstandings and agreements with respect thereto.  No modification or waiver of any provision ofthis Agreement shall be effective unless set forth in writing and signed by theparties hereto.

##  

## **8.13        Captions**. The headings or captions of the Articles and Sections set forth hereinare for convenience only, are not a part of this Agreement and are not to beconsidered in interpreting this Agreement.

##  

## **8.14        Jointand Several Liability**.  If Borrower consists of morethan one (1) individual and/or entity, each of said individuals and/orentities shall be jointly and severally liable for each covenant, agreement,representation and warranty of Borrower hereunder.

##  

## **8.15        Borrower-LenderRelationship**.  The relationship between Borrower and Lendercreated hereby and by the other Loan Documents shall be that of a borrower anda lender only, and in no event shall Lender be deemed to be a partner of, or ajoint venturer with, Borrower.

##  

## **8.16       ****Benefit of Lender**. The rights of the Lender under the Loan Documents are for the benefit ofLender solely in its capacity as a lender in connection with the Loan and arenot intended to benefit the Lender in its capacity as the “Buyer” under theOption Agreement.

##  

## **8.17        Reserved**.

##  

## **8.18        Pledgeof Accounts**.  Borrower shall grant to Lender a perfectedsecurity interest in the Accounts as additional security for the Loan.  Upon the occurrence of an Event of Defaulthereunder, Lender shall be entitled to foreclose upon Borrower’s interest inthe Accounts either before, after or together with the foreclosure of the Deedof Trust.  Upon any such foreclosure, allamounts contained in the Accounts shall be applied to reduce the balance ofLoan Amount.  On or prior to the ClosingDate, Lender, Borrower and the financial institutions maintaining the Accountsshall enter into “control agreements” for the purpose of perfecting thesecurity interests in the Accounts as provided under the UCC.

##  

## **8.19        ProhibitionAgainst Transfers**.  Borrower shall not permit anyTransfer to be undertaken or cause any Transfer to occur, other than aPermitted Transfer.  Any Transfer made inviolation of this Loan Agreement shall be void.

 

24

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## **8.20        LenderApproval**.  Lender’s decision to approve any Transferproposed by Borrower shall be made in Lender’s sole discretion and Lender shallnot be obligated to approve any Transfer.

##  

## **8.21        PersonalProperty Financings**.  Lender hereby agrees thatBorrower shall be permitted to secure financings and grant liens on theCollateral but not on the Land and Improvements to other lenders.  Lender agrees to subordinate its lien on theCollateral to such other liens in order to facilitate such financings;provided, however, the terms of such financings shall be commerciallyreasonable.

 

**[Signatures on followingpage]**

 

25

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**INWITNESS WHEREOF**,the parties have executed this Agreement as of the day and year first abovewritten.

 

 
| Address:                        | “**BORROWER**”                        |
|---------------------------------|-------------------------------------------------|
|                            |                                            |
| Brotman  Medical Center Inc.    | **BROTMAN  MEDICAL CENTER INC.,**               |
| 3828  Delmas Terrace            | a  California corporation, debtor-in-possession |
| Culver  City, California 90231  |                                            |
| Attn:  Stanley Otake, CEO       |                                            |
|                            | By:                                             | /s/  Stanley Otake |
|                            | Name:                                           | Stanley  Otake |
|                            | Its:                                            | Chief  Executive Officer |
|                            |                                            |
|                            |                                            |
| Address:                        | “**LENDER**”                          |
|                            |                                            |
| JHA  East 7, LLC                | **JHA  EAST 7, LLC,**                           |
| c/o  Jewish Home for the Aging  | a  Delaware limited liability company           |
| 7150  Tampa Avenue              |                                            |
| Reseda,  California 91335       |                                            |
| Attention:  Loan Administration | By:                                             | /s/  Richard S. Liman |
|                            | Name:                                           | Richard  S. Liman |
|                            | Its:                                            | Manager |

 

26

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**EXHIBIT A**

 

**Legal Description of Land**

 

PARCEL1: (APN: 4207-2-27)

 

LOTS 9TO 14 INCLUSIVE IN BLOCK 13 OF TRACT 2444, IN THE CITY OF CULVER CITY, IN THECOUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24PAGES 5 TO 7, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAIDCOUNTY.  EXCEPT FROM LOT 14, ALL OIL,GAS, MINERALS, HYDROCARBONS AND /OR ASSOCIATED SUBSTANCES IN OR UNDER SAID LOTBELOW A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, BUT WITHOUT THE RIGHT TOENTER UPON THE SURFACE OF THE TOP 500 FEET OF THE SUBSURFACE OF SAID LOT, ASRESERVED BY ELLA B. OLESON, A WIDOW, IN THE DEED RECORDED February 1, 1963IN BOOK D-1906 PAGE 919 OFFICIAL RECORDS.

 

PARCEL(APN: 2407-2-27)

 

THESOUTHWESTERLY 5 FEET OF THAT PORTION OF THAT CERTAIN ALLEY NOW VACATED IN BLOCK13 OF TRACT N0.2444, IN THE CITY OF CULVER CITY, IN THE COUNTY OF LOS ANGELES,STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24 PAGE 7 OF MAPS, IN THEOFFICE OF THE COUNTY RECORDER OF SAID COUNTY; BOUNDED ON THE SOUTHEAST BY THESOUTHWESTERLY PROLONGATION OF THE NORTHWESTERLY LIME OF LOT 28 IN BLOCK 13 OFSAID TRACT NO. 2444 AND BOUNDED ON THE NORTHWESTERLY PROLONGATION OF THENORTHWESTERLY LINE OF LOT 24 IN BLOCK 13 OF SAID TRACT NO. 2444.

 

APN:4207-002-027

 

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**EXHIBIT B**

 

**Additional Required ItemsPrior to Funding**

 

a.             Proof of Lender’sright to rely upon any environmental report that Borrower (or a predecessor ofBorrower) has obtained with respect to the Property.

 

b.             A Phase IEnvironmental Site Assessment shall be required, at no cost to Lender.  Lender reserves the right to require a moreextensive environmental audit at Lender’s sole cost and expense.

 

c.             Copy of allorganizational documents for the Borrower.

 

d.             Preliminary titlereport and all associated documents prior to loan closing.  Title insurance policy containing allrequired endorsements at closing.

 

e.             Current financialstatements for the Borrower.

 

f.              UCC Lien Search.

 

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**SCHEDULE 2.1(h)**

 

**[**Liabilities/Litigation]

 

None.

 

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